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CSB - Cashbuild Limited - Audited Group Interim Results and Dividend Declaration

Release Date: 29/03/2011 09:01
Code(s): CSB
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CSB - Cashbuild Limited - Audited Group Interim Results and Dividend Declaration December 2010 Cashbuild Limited (Registration number: 1986/001503/06) (Incorporated in the Republic of South Africa) Listed on the JSE Limited JSE Share Code: CSB ISIN:ZAE000028320 AUDITED GROUP INTERIM RESULTS AND DIVIDEND DECLARATION DECEMBER 2010 Net asset value per share up 17% Revenue up 7% Operating profit down 1% Operating profit excl BEE transaction up 43% Interim dividend up 48% Headline earnings down 21% Headline earnings excl BEE transaction up 48% CONDENSED GROUP INCOME STATEMENT - AUDITED Six months Six months Year ended ended ended 31 December 31 December 30 June 2010 2009 % 2010
R`000 (26 weeks) (26 weeks) change (52 weeks) Revenue 2,986,823 2,803,003 7 5,369,146 Cost of sales (2,322,104) (2,232,835) 4 (4,216,241) Gross profit 664,719 570,168 17 1,152,905 Selling and marketing expenses (472,292) (390,409) 21 (776,838) Administrative expenses (76,293) (62,352) 22 (132,470) Other operating expenses (2,227) (1,244) 79 (5,398) Other income 2,149 1,205 78 1,245 Operating profit 116,056 117,368 (1) 239,444 Finance cost (538) (787) (32) (5,700) Finance income 15,563 9,753 60 21,936 Profit before income tax 131,081 126,334 4 255,680 Income tax expense (62,333) (39,910) 56 (82,005) Profit for the period 68,748 86,424 (20) 173,675 Attributable to: Owners of the company 62,482 82,013 (24) 163,776 Non-controlling interests 6,266 4,411 42 9,899 68,748 86,424 (20) 173,675 Earnings per share (cents) 275.2 361.1 (24) 721.2 Diluted earnings per share (cents) 273.4 360.3 (24) 717.7 CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME - AUDITED Six months Six months Year ended ended ended 31 December 31 December 30 June
2010 2009 2010 R`000 (26 weeks) (26 weeks) (52 weeks) Profit for the period 68,748 86,424 173,675 Other comprehensive income: Foreign currency translation adjustments (3,698) (3,251) (5,075) Other comprehensive income for the period, net of tax (3,698) (3,251) (5,075) Total comprehensive income for the period 65,050 83,173 168,600 Total comprehensive income attributable to: Owners of the company 59,468 78,762 158,701 Non-controlling interests 5,582 4,411 9,899 65,050 83,173 168,600
ADDITIONAL INFORMATION - AUDITED Six months Six months Year ended ended ended 31 December 31 December 30 June
R`000 2010 2009 2010 Net asset value per share (cents) 2,894 2,484 2,703 Ordinary shares (`000): - In issue 25,190 25,805 25,805 - Weighted-average 22,707 22,709 22,709 - Diluted weighted-average 22,850 22,764 22,821 Capital expenditure 97,461 93,945 137,849 Depreciation of property, plant and equipment 26,561 24,058 48,002 Amortisation of intangible assets 357 347 709 Capital commitments 87,516 133,303 104,744 Property operating lease commitments 808,555 789,928 891,907 Contingent liabilities 30,303 15,265 17,910 CONDENSED GROUP STATEMENT OF FINANCIAL POSITION - AUDITED 31 December 31 December 30 June R`000 2010 2009 2010 ASSETS Non-current assets 529,957 443,324 462,763 Property, plant and equipment 489,980 410,614 425,293 Intangible assets 30,497 24,065 28,149 Deferred income tax assets 9,480 8,645 9,321 Current assets 1,723,063 1,581,375 1,398,498 Assets held for sale 659 659 659 Inventories 842,736 868,689 784,445 Trade and other receivables 76,813 73,604 71,114 Cash and cash equivalents 802,855 638,423 542,280 Total assets 2,253,020 2,024,699 1,861,261 EQUITY AND LIABILITIES Shareholders` equity 778,861 687,537 749,606 Share capital and reserves 728,939 640,885 697,466 Non controlling interests 49,922 46,652 52,140 Non-current liabilities 76,218 65,541 71,496 Deferred operating lease liability 71,754 61,493 67,318 Deferred profit 1,725 1,777 1,751 Deferred income tax liability 143 - - Borrowings (non interest-bearing) 2,596 2,271 2,427 Current liabilities 1,397,941 1,271,621 1,040,159 Trade and other liabilities 1,388,163 1,244,942 1,018,360 Current income tax liabilities 7,765 24,634 19,781 Employee benefits 2,013 2,045 2,018 Total equity and liabilities 2,253,020 2,024,699 1,861,261 CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY - AUDITED R`000 Attributable to owners of the company Share Cum.
Treasury based trans- Non- Share share Treasury pay- lation controlling capi- capi- Share share ment adjust- Retained inte- Total tal tal premium premium reserve ments earnings rests equity Balance at 1 July 2009 258 (29) 115,817 (83,686) 475 (6,566) 558,286 43,679 628,234 Total comprehensive income for the period - - - - - (3,251) 82,013 4,411 83,173 Dividend paid - final 2009 - - - - - - (23,270) (1,438) (24,708) Recognition of share based payments - - - - 838 - - - 838 Balance at 31 December 2009 258 (29) 115,817 (83,686) 1,313 (9,817) 617,029 46,652 687,537 Total comprehensive income for the period - - - - - (1,824) 81,763 5,488 85,427 Dividend paid - interim 2010 - - - - - - (24,196) - (24,196) Recognition of share based payments - - - - 838 - - - 838 Balance at 30 June 2010 258 (29) 115,817 (83,686) 2,151 (11,641) 674,596 52,140 749,606 Total comprehensive income for the period - - - - - (3,014) 62,482 5,582 65,050 Share buy back (6) 6 (49,994) 49,994 - - - - - Dividend paid - final 2010 - - - - - - (28,834) (7,800) (36,634) Recognition of share based payments - - - - 839 - - - 839 Balance at 31 December 2010 252 (23) 65,823 (33,692) 2,990 (14,655) 708,244 49,922 778,861 CONDENSED GROUP CASH FLOW STATEMENT - AUDITED Six months Six months Year ended ended ended 31 December 31 December 30 June
R`000 2010 2009 2010 Cash flows from operating activities Cash generated from operations 454,525 434,213 448,595 Interest paid (538) (787) (5,700) Taxation paid (74,365) (36,323) (83,947) Net cash generated from operating activities 379,622 397,103 358,948 Cash flows from investing activities Net investment in assets (96,681) (90,541) (134,373) Interest received 15,563 9,753 21,936 Net cash used in investing activities (81,118) (80,788) (112,437) Cash flows from financing activities Increase in borrowings 169 145 301 Dividends paid - own equity (28,834) (23,270) (47,466) - non-controlling interests (7,800) (1,438) (1,438) Net cash used in financing activities (36,465) (24,563) (48,603) Net increase in cash and cash equivalents 262,039 291,752 197,908 Effect of exchange rate movements on cash and cash equivalents (1,464) (1,459) (3,758) Cash and cash equivalents at beginning of period 542,280 348,130 348,130 Cash and cash equivalents at end of period 802,855 638,423 542,280 CONDENSED GROUP SEGMENTAL ANALYSIS - AUDITED SOUTH AFRICA Six months Six months Year ended ended ended
31 December 31 December 30 June R`000 2010 2009 2010 Income statement Revenue 2,566,826 2,356,361 4,533,300 Operating profit 94,079 93,266 195,314 Statement of financial position Segment assets 1,876,151 1,691,293 1,543,791 Segment liabilities 1,278,059 1,170,526 976,272 Other segment items Depreciation 24,045 21,743 43,447 Amortisation 357 347 674 Capital expenditure 82,080 89,683 131,755 OTHER MEMBERS OF COMMON MONETARY AREA* Income statement Revenue 271,192 278,744 521,264 Operating profit 17,221 13,931 27,653 Statement of financial position Segment assets 234,436 201,332 196,137 Segment liabilities 115,021 92,003 75,096 Other segment items Depreciation 1,590 1,472 2,795 Amortisation - - - Capital expenditure 13,043 349 1,967 * Includes Namibia, Swaziland and Lesotho BOTSWANA AND MALAWI Income statement Revenue 148,805 167,898 314,582 Operating profit 4,756 10,171 16,477 Statement of financial position Segment assets 142,433 132,074 121,333 Segment liabilities 81,079 74,633 60,287 Other segment items Depreciation 926 843 1,760 Amortisation - - 35 Capital expenditure 2,338 3,913 4,127 GROUP Income statement Revenue 2,986,823 2,803,003 5,369,146 Operating profit 116,056 117,368 239,444 Statement of financial position Segment assets 2,253,020 2,024,699 1,861,261 Segment liabilities 1,474,159 1,337,162 1,111,655 Other segment items Depreciation 26,561 24,058 48,002 Amortisation 357 347 709 Capital expenditure 97,461 93,945 137,849 NOTES TO THE CONDENSED GROUP INTERIM FINANCIAL INFORMATION 1. Basis of preparation. The condensed consolidated interim financial information ("financial information") announcement is based on the audited interim financial statements of the group for the period ended 31 December 2010 which have been prepared in accordance with International Financial Reporting Standards ("IFRS") and the presentation and disclosure requirements of IAS 34 - Interim Financial Reporting, the Listings Requirements of the JSE and the South African Companies Act (1973) and consistently applied to the prior year. 2. Independent audit by the auditors. These condensed consolidated interim results have been audited by our auditors PricewaterhouseCoopers Inc., who have performed their audit in accordance with the International Standards on Auditing. A copy of their unqualified audit report is available for inspection at the registered office of the company. 3. Reporting period. The group adopts the retail accounting calendar, which comprises the reporting period ending on the last Saturday of the month (2010: 25 December (26 weeks); 2009 : 26 December (26 weeks); June 2010: 26 June (52 weeks)). 4. Earnings per share. Earnings per share is calculated by dividing the earnings attributable to owners of the company for the period by the weighted average number of 22,706,987 ordinary shares in issue during the period (December 2009: 22,709,487 shares; June 2010 : 22,709,487 shares). 5. Headline earnings per ordinary share. The calculations of headline earnings and diluted headline earnings per ordinary share are based on headline earnings of R63.7 million (December 2009: R81.0 million; June 2010: R162.9 million) and a weighted average of 22,706,987 (December 2009: 22 709 487; June 2010: 22,709,487) and fully diluted of 22,849,556(December 2009: 22,763,737; June 2010: 22,820,888) ordinary shares in issue. Reconciliation between net profit attributable to the owners of the company and headline earnings. %
R`000 Dec-10 Dec-09 change Jun-10 Net profit attributable to the owners of the company 62,482 82,013 (24) 163,776 Loss/(profit) on sale of assets after taxation 1,217 (1,035) (902) Headline earnings 63,699 80,978 (21) 162,874 Headline earnings per share (cents) 280.5 356.6 (21) 717.2 Diluted headline earnings per share (cents) 278.8 355.7 (22) 713.7 6. Declaration of dividend. The board has declared a interim dividend (No. 36), of 157 cents (December 2009: 106 cents) per ordinary share to all shareholders of Cashbuild Limited. The dividend per share is calculated based on 25 189 811 shares in issue at date of dividend declaration. Date dividend declared: Monday, 28/03/2011 Last day to trade "CUM" the dividend: Thursday, 14/04/2011 Date commence trading "EX" the dividend: Friday, 15/04/2011 Record date: Thursday, 21/04/2011 Date of payment: Tuesday, 26/04/2011 Share certificates may not be dematerialised or rematerialised between Friday, 15 April 2011 and Thursday, 21 April 2011, both dates inclusive. On behalf of the board DONALD MASSON PAT GOLDRICK Chairman Chief executive Johannesburg Date: 28 March 2011 NATURE OF BUSINESS Cashbuild is southern Africa`s largest retailer of quality building materials and associated products, selling direct to a cash-paying customer-base through our constantly expanding chain of stores (192 at the end of this reporting period). Cashbuild carries an in-depth quality product range tailored to the specific needs of the communities we serve. Our customers are typically home- builders and improvers, contractors, farmers, traders, large construction companies and government-related infrastructure developers, as well as all other customers requiring quality building materials at lowest prices. Cashbuild has built its credibility and reputation by consistently offering its customers quality building materials at the lowest prices and through a purchasing and inventory policy that ensures customers` requirements are always met. INTERNATIONAL FINANCIAL REPORTING STANDARDS The group is reporting its audited interim results in accordance with International Financial Reporting Standards ("IFRS"). BEE TRANSACTION In terms of a special resolution adopted by shareholders on 6 December 2010, shares to the value of R50 million were repurchased by the company from the Cashbuild Empowerment Trust ("the Trust"). The value realized by this transaction was distributed to the beneficiaries of the Trust. This distribution is reported as a personnel expense in the group interim income statement. The associated transactional costs, including the tax effects of the transaction are also accounted for. The financial effects can be summarised as follows: Before % After % change change on 2009 on 2009
Operating profit 167,325 43 116,056 (1) Attributable earnings 118,751 45 62,482 (24) Net asset value per share (cents) 3,117 25 2,894 17 Headline earnings per share (cents) 528.3 48 280.5 (21) The financial highlights below should be read in conjunction with this table. FINANCIAL HIGHLIGHTS Revenue for the half-year increased by 7% whilst operating profit decreased by 1%. This decrease in profit is a result of an increase in gross profit of 17%, whilst operating expenses increased by 21%, largely as result of the effects of the BEE transaction described above. Basic earnings per share decreased by 24% and headline earnings per share decreased by 21%. Net asset value per share has shown a 17% increase, from 2,484 cents (Dec 2009) to 2,894 cents. Cash and cash equivalents increased by 26% to R802 million. Stores in existence since the beginning of July 2009 (pre-existing stores - 180 stores) accounted for 4% of the increase in revenue with the remaining 3% increase due to the 12 new stores the group has opened since July 2009. This increase for the year has been achieved in tough trading conditions with selling price inflation of 2%. The growth in customer transactions of 5% (of which 2% is from the existing store base) is encouraging and bodes well for the future. Despite the competitive environment, gross profit percentage margin increased to 22.3% during this period and was 2.0% higher in percentage terms than the 20.3% achieved for the comparative period of the prior year. Operational expenses (excluding BEE transaction) for the period remained well controlled with existing stores accounting for 7% of the increase and new stores 3%. The total increase for the period amounted to 10%. The effective tax rate for the period of 48% is 16% higher than that of the comparable period, largely due to the non deductibility of the people cost component of the BEE transaction. The normalised effective tax rate is 31.7% Cashbuild`s statement of financial position remains solid. Stock levels have decreased by 3%. This decrease is in spite of the stocking of seven additional stores since the previous half year-end. Overall stockholding at 61 days (December 2009: 68 days; June 2010: 72 days) showed an improvement on the position as at December 2009 and June 2010. Trade receivables remain well under control. During the period, Cashbuild opened four new stores. Five stores were refurbished and one store relocated. Cashbuild will continue its store expansion, relocation and refurbishment strategy in a controlled manner, applying the same rigid process as in the past. PROSPECTS Management remains optimistic about the revenue prospects for the next quarter. The first nine trading weeks since year-end have reported an increase in revenue of 5% on that of the comparable nine weeks. It is anticipated that gross profit percentage margins will be under pressure during the second half trading. Directors: D Masson* (Chairman), PK Goldrick (Chief executive) (Irish), WF de Jager, KB Pomario, AE Prowse, FM Rossouw*, NV Simamane*, SA Thoresson, A van Onselen (*non-executive) Company secretary: Corporate Governance Leaders CC Registered office: cnr Northern Parkway and Crownwood Rd, Ormonde, Johannesburg 2001. PO Box 90115, Bertsham 2013 Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg 2001. PO Box 61051, Marshalltown 2107 Auditors: PricewaterhouseCoopers Inc. Sponsor: Nedbank Capital QUALITY BUILDING MATERIALS AT THE LOWEST PRICES www.cashbuild.co.za Date: 29/03/2011 09:01:03 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.

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