Sharenet Sites 
Sharenet Sites
OLI - O-line Holdings Limited - Unaudited interim results for the six months ended 31 December 2010 O-line Holdings Limited (Incorporated in the Republic of South Africa) JSE share code: OLI ISIN Number: ZAE000110730 ("O-line" or "the Group") UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2010 Revenue increased from R157.6 million, for the six months ended 31 December 2009("the comparative period"), to R213.8 million, for the six months ended 31 December 2010 ("the current period"), as a result of trading volume growth across all divisions. This represents a 36% increase in revenue for the current period compared to the comparative period. Gross profit increased from R53.3m in the comparative period to R66.3m over the current period. O-line Support Systems (Pty) Limited ("O-line Support Systems") and Armco Superlite (Pty) Limited ("Armco")achieved gross profit margins for the current period of 35% and 25% respectively, while O-Line Holdings (Mocambique) Limitada ("O-line Mocambique")achieved a gross profit margin of 31% for the current period. The Group`s operating profit for the current period increased by 58.5%, from R17.1m in the comparative period to R27.2m in the current period, whilst operating expenses increased by 8.4% from R36.6m to R39.7m. Finance costs decreased from R3.4m in the comparative period to R2.7m in the current period, this is mainly attributable to the decrease in borrowings as Group debt has been settled and also due to a decrease in interest rates. At 31 December 2010, Armco Management owed O-line R 27.6m (R13 million at 31 December 2009) ("the Loans"). The Loans are secured by the pledge of 25 076 250 O-line shares and bear interest at the prime bank overdraft rate. At year- end, 30 June 2010, these Loans were impaired as the share price of O-line had fallen below R1.00 per share. Although at 31 December 2010 the O-line share price had recovered to levels above R1.00 the board felt it prudent to only review the impairment at the next year-end. Cash and cash equivalents have decreased from R71.8m in the comparative period to R35.2m in the current period as the Group utilised its available cash to finance operations, for expansion and to settle debt. The Group also experienced the following decreases / increases, compared to the comparative period: - Borrowings reflect a net decrease of R14m from R64.8m to R50.8m, this is in line with repayments in terms of loan agreements entered into by the Group. A new medium term loan of R8m was drawn down to purchase the property for the powder coating facility; - Trade and other payables remained constant; - Trade and other receivables increased by R26.3m to R53.3m following the upward trend in sales volumes; - Cash generated from operations decreased from R37.3m to R1.6m mainly as a result of increased trade as reflected in the increases in debtors and inventory at the current period end compared to the corresponding period. While the timing of the period end resulted in a negative impact on trade payables and receivables, working capital management remains a key area of focus for the Group; - Inventory also increased from R63.3m to R72.6m to support the increase in trade and the stocking up of O-line Mocambique; and - Capital expenditure decreased marginally from R2.2m in the comparative period to R2m as there was no major additional capital expenditure in the current period. Capex and forecast Contracts have been entered into for the purchase of plant and machinery for the City Deep manufacturing plant of approximately R2.2m. This expenditure will be financed by the raising of a medium term loan. Condensed Statement of Comprehensive Income for the six months ended 31 December 2010 Six months Six months Year ended ended ended 31 Dec 2010 31 Dec 2009 30 June 2010
Unaudited Unaudited Audited R`000 R`000 R`000
Continuing operations Revenue 213 834 157 642 351 368 Cost of Sales (147 546) (104 327) (235 692) Gross Profit 66 288 53 315 115 676 Other Income 578 464 721 Operating expenses (39 686) (36 627) (75 482) Operating profit 27 180 17 152 40 915 Investment revenue 1 889 1 701 4 093 Impairment - - (8 053) Finance costs (2 719) (3 489) (6 798) Profit before taxation 26 350 15 364 30 157 Taxation (7 404) (5 325) (9 468) Profit for the period 18 946 10 039 20 689 from continuing operations Loss for the period from - (3 799) (4 805) discontinued operations (Note 1) Profit for the period 18 946 6 240 15 884 Other comprehensive income Exchange difference on 2 - 38 translating foreign operations Total comprehensive 18 948 6 240 15 922 income for the period
Net profit attributable to: Owners of the parent: Profit for the period 18 946 10 039 20 689 from continuing operations Loss for the period from - (3 799) (4 805) discontinued operations Profit for the period 18 946 6 240 15 884 attributable to owners of the parent
Reconciliation of basic to headline earnings Headline earnings - 18 902 10 039 20 769 Continuing operations Basic earnings 18 946 10 039 20 689 Loss / (Profit) on sale (44) - 80 of fixed assets
Headline earnings - - (3 591) (3 844) Discontinued operations Basic earnings - (3 799) (4 805) Loss / (Profit) on sale - 208 961 of fixed assets Total shares in issue 238 500 000 238 500 000 238 500 000 Weighted average of 238 500 000 201 293 478 219 743 836 shares in issue Basic earnings per share 7.94 3.10 7.23 (cents) Continuing operations 7.94 4.99 9.42 Discontinued operations - (1.89) (2.19) Basic headline earnings 7.93 3.20 7.70 per share (cents) Continuing operations 7.93 4.98 9.45 Discontinued operations - (1.78) (1.75) Fully diluted earnings 7.94 3.10 7.23 per share (cents) Continuing operations 7.94 4.99 9.42 Discontinued operations - (1.89) (2.19) Fully diluted headline 7.93 3.20 7.70 earnings per share (cents) Continuing operations 7.93 4.98 9.45 Discontinued operations - (1.78) (1.75)
Condensed Statement of Changes in Equity for the six months ended 31 December 2010 Share Share Foreign Retaine Total
capital premium Currenc d equity y income Transla tion
Reserve
R`000 R`000 R`000 R`000 R`000 Balance at 31 December * 132 254 79 557 211 811 2009 Share issue expenses (37) (37) Total comprehensive 38 9 644 9 682 income for the period Balance at 1 July 2010 * 132 217 38 89 201 221 456 Total comprehensive 2 18 946 18 948 income for the period Balance at 31 December * 132 217 40 108 147 240 404 2010 * less than R1 000 Condensed Statement of Financial Position at 31 December 2010
31 31 30 June December December 2010 2010 2009
Unaudited Unaudited Audited R`000 R`000 R`000
Assets Non-Current Assets Property, plant and equipment 75 831 69 042 76 783 Goodwill 64 632 64 632 64 632 Other financial assets 19 645 12 357 18 702 Deferred taxation 4 478 2 382 5 753 164 586 148 413 165 870
Current Assets Inventories 72 595 63 346 75 672 Other financial assets 1 009 - 2 292 Current tax receivable 3 766 3 348 1 781 Trade and other receivables 53 341 27 043 56 012 Cash and cash equivalents 35 210 71 832 56 748 165 921 165 569 192 505
Non Current Assets Available - 3 036 - For Sale Total Assets 330 507 317 018 358 375 Equity and Liabilities Equity and reserves 240 404 211 811 221 456
Non-Current Liabilities Borrowings 36 378 43 858 43 551 Finance lease obligation 2 160 2 487 2 841 Deferred taxation 8 570 8 728 8 514 47 108 55 073 54 906 Current Liabilities Borrowings 14 384 21 001 18 750 Current tax payable 148 941 591 Finance lease obligations 1 786 1 741 1 852 Trade and other payables 26 677 26 196 60 820 Provisions - 255 - 42 995 50 134 82 013 Total Equity and Liabilities 330 507 317 018 358 375 Condensed Statement of Cash Flows for the six months ended 31 December 2010 31 31 30 June
December December 2010 2010 2009
Unaudited Unaudited Audited R`000 R`000 R`000 Cash flows from operating activities Cash generated from operations 1 610 37 263 57 218 Interest income 1 889 1 701 4 093 Finance costs (2 505) (3 268) (6 407) Taxation paid (8 510) (18 574) (25 088) Cash flows of discontinued - (3 366) (3 721) operations Net cash flows from operating (7 516) 13 756 26 095 activities Cash flows from investing activities Purchases of property, plant (1 760) (2 030) (12 297) and equipment Sale of property, plant and 211 128 1 378 equipment Sale of business 2 292 Sale / (purchases) of 341 1 496 (15 194) financial assets Net cash flows from investing (1 208) (406) (23 821) activities Cash flows from financing activities Proceeds on shares issued - 40 587 40 551 Repayment of borrowings (11 539) (23 090) (25 649) Finance lease payments (1 292) (1 114) (2 565) Dividends paid - (9 825) (9 825) Net cash flows from financing (12 831) 6 558 2 512 activities Total cash movement for period (21 555) 19 908 4 786 Cash and cash equivalents at 56 748 51 924 51 924 beginning of period Effect of exchange rate 17 - 38 movement on cash balances Cash and cash equivalents at 35 210 71 832 56 748 end of period Segment Report for the six months ended 31 December 2010 31 31 30 June December December 2010 2010 2009
Unaudited Unaudited Audited R`000 R`000 R`000
Revenue O-Line 96 906 70 405 157 806 Armco 125 495 94 111 214 707 Corporate - - - South African operations 222 401 164 516 372 513 O-Line Mozambique 436 - - Eliminations (9 003) (6 874) (15 541) 213 834 157 642 356 972
Operating Profit O-Line 11 906 3 064 6 295 Armco 16 743 14 819 29 274 Corporate (200) (212) (359) South African operations 28 449 17 671 35 210 O-Line Mozambique (588) - - Eliminations (681) (519) (969) 27 180 17 152 34 241 Assets O-Line 108 377 82 762 111 660 Armco 168 121 164 074 190 941 Corporate 141 128 139 903 137 205 South African operations 417 626 386 739 439 806 O-Line Mozambique 2 143 - - Eliminations (89 262) (69 721) (81 431) 330 507 317 018 358 375
Liabilities O-Line 39 826 24 174 51 042 Armco 139 565 153 351 170 429 Corporate 316 1 055 312 South African operations 179 707 178 580 221 783 O-Line Mozambique 2 799 - - Eliminations (92 403) (73 373) (84 864) 90 103 105 207 136 919
Capital expenditure O-Line 692 1 265 12 513 Armco 1 390 1 022 1 787 Corporate - - - South African operations 2 082 2 287 14 300 O-Line Mozambique 9 - - Eliminations - - - 2 091 2 287 14 300 For management purposes the Group is organised into three major operating divisions namely, O-line Support Systems, Armco and Corporate. It represents the basis on which the Group reports its primary segment information. NOTES TO THE INTERIM FINANCIAL STATEMENTS 1: Loss for the period from discontinued operations 31 31 30 June December December 2010
2010 2009 Audited Unaudited Unaudited
R`000 R`000 R`000 Revenue - 5 277 5 604 Expenses - (10 553) (12 278) Loss before taxation (5 276) (6 674) Taxation - 1 477 1 869 Loss for the period from - (3 799) (4 805) discontinued operations Basis of preparation These interim financial statements have been prepared in accordance with IAS 34 - Interim Financial Reporting, International Financial Reporting Standards (IFRS), the Companies Act of South Africa and the JSE Limited Listings Requirements. The accounting policies and methods of measurement, recognition and computation applied in the preparation of these interim financial statements are consistent with those applied in the Group`s most recent audited annual financial statements for the year ended 30 June 2010. The results for the period are not necessarily indicative of the results for the entire year, and interim financial statements should be read in conjunction with the audited annual financial statements for the year ended 30 June 2010. The board acknowledges its responsibility for the preparation of these interim financial statements in accordance with IFRS, the Companies Act of South Africa and the JSE Limited Listings Requirements. The financial information on which these interim results are based has not been reviewed or reported on by the O-line`s auditors. For and on behalf of the Board G.S. Smart (Chief Executive Officer) E.A. Jay (Chairman) 01 March 2011 Designated Advisor: QuestCo Sponsors (Proprietary) Limited Date: 01/03/2011 11:13:02 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
