Wrap Text
BDM - Buildmax Limited - Audited consolidated financial results for the year
ended 28 February 2011
Buildmax Limited
("Buildmax" or "the group")
(Registration no. 1995/012209/06)
Share Code BDM ISIN code ZAE000011250
Audited consolidated financial results for the year ended 28 February 2011
Revenue from continuing operations up 4,7%
Operating losses during second 6 months down 51%
Interest bearing debt down 56%
Headline loss per shareimproved by 25,4%
Abridged consolidated statement of comprehensive income
Continuing Discontinued Total
operations operations operations
year ended year ended year ended
28 February 28 February 28 February
2011 2011 2011
R`000 R`000 R`000
Revenue 1 299 545 69 669 1 369 214
Operating profit before 117 023 15 678 132 701
depreciation and
amortisation ("EBITDA")
Depreciation (181 488) (25 207) (206 695)
Operating (loss)/profit (64 465) (9 529) (73 994)
before amortisation
Amortisation of intangible (11 298) - (11 298)
assets
Operating (loss)/profit (75 763) (9 529) (85 292)
Loss on disposal of - - -
business
Impairment losses (274 407) (21 313) (295 720)
Loss before interest and (350 170) (30 842) (381 012)
taxation ("LBIT")
Net interest paid (27 369) (7 594) (34 963)
Loss before taxation (377 539) (38 436) (415 975)
("LBT")
Taxation 44 244 - 44 244
Loss for the year (333 295) (38 436) (371 731)
Unrealised profit due to 2 620
change in fair value of
cash flow hedge
Taxation (733)
Total comprehensive loss (369 844)
Loss for the year
attributable to:
Equity holders of the (364 403)
company
Outside shareholders` (7 328)
interests
(371 731)
Total comprehensive loss
for the year attributable
to:
Equity holders of the (362 516)
company
Outside shareholders` (7 328)
interests
(369 844)
Table Continues:...
Continuing Discontinued Total
Operations operations operations
year ended year ended
year ended 28 February 28 February
28 February 2010 2010
2010 R`000 R`000
R`000
Revenue 1 240 906 564 678 1 805 584
Operating profit before 215 063 12 477 227 540
depreciation and
amortisation ("EBITDA")
Depreciation (131 320) (44 770) (176 090)
Operating (loss)/profit 83 743 (32 293) 51 450
before amortisation
Amortisation of (21 758) - (21 758)
intangible assets
Operating (loss)/profit 61 985 (32 293) 29 692
Loss on disposal of (2 467) - (2 467)
business
Impairment losses (805 613) (263 553) (1 069 166)
Loss before interest and (746 095) (295 846) (1 041 941)
taxation ("LBIT")
Net interest paid (64 857) (21 569) (86 426)
Loss before taxation (810 952) (317 415) (1 128 367)
("LBT")
Taxation 62 803 54 715 117 518
Loss for the year (748 149) (262 700) (1 010 849)
Unrealised profit due to 1 711
change in fair value of
cash flow hedge
Taxation (479)
Total comprehensive loss (1 009 617)
Loss for the year
attributable to:
Equity holders of the (1 007 245)
company
Outside shareholders` (3 604)
interests
(1 010 849)
Total comprehensive loss
for the year
attributable to:
Equity holders of the (1 006 013)
company
Outside shareholders` (3 604)
interests
(1 009 617)
Reconciliation of headline loss
Continuing and Continuing
discontinued operations operations
Year ended Year ended Year ended Year
28 February 28 February 28 ended 28
2011 R`000 2010 R`000 February February
2011 2010
R`000 R`000
Loss for the year (364 403) (1 007 245) (325 967) (744 545)
attributable to equity
holders of the company
Adjusted for:
Loss on disposal of - 2 467 - 2 467
business
Remeasurement of assets 2 487 - 2 487 -
held for sale
(Profit)/loss on (9 227) 4 465 (7 948) 2 805
disposal of property,
plant and equipment
- Gross (12 815) 6 202 (11 039) 3 897
- Taxation 3 588 (1 737) 3 091 (1 092)
Impairment of property, 35 232 303 752 13 919 201 837
plant and equipment
- Gross 39 873 421 878 18 560 280 329
- Taxation (4 641) (118 126) (4 641) (78 492)
Impairment of goodwill 223 893 635 459 223 893 513 455
and other intangibles
- Gross 255 847 647 288 255 847 525 284
- Taxation (25 791) (7 716) (25 791) (7 716)
- Outside (6 163) (4 113) (6 163) (4 113)
shareholders` interest
Headline loss (112 018) (61 102) (93 616) (23 981)
attributable to equity
holders of the company
Abridged consolidated statement of changes in equity
Share Cashflow Accumulated Outside Total
capital and hedging loss R`000 shareholders` R`000
premium reserve interest
R`000 R`000 R`000
Balances as 1 732 382 (5 572) (91 653) 3 604 1 638 761
at 28
February 2009
Total - 1 232 (1 007 245) (3 604) (1 009 617)
comprehensive
income/(loss)
Balances as 1 732 382 (4 340) (1 098 898) - 629 144
at 28
February 2010
Shares issued 290 824 - - - 290 824
Total - 1 887 (364 403) (7 328) (369 844)
comprehensive
income/(loss)
Balances as 2 023 206 (2 453) (1 463 301) (7 328) 550 124
at 28
February 2011
Abridged consolidated statement of cash flows
Year ended Year ended
28 February 28 February
2011 2010
R`000 R`000
Operating activities
Loss before taxation ("LBT") (415 975) (1 128 367)
Non-cash flow items and changes in working 509 048 1 426 597
capital
Net finance costs 34 963 86 426
Cash generated from operations 128 036 384 656
Net interest paid in cash (34 218) (86 985)
Taxation paid (3 312) (29 388)
Net cash inflow from operating activities 90 506 268 283
Investing activities
Purchase of property, plant and equipment
- Expanding operations (5 402) (151 215)
- Maintaining operations (84 548) (45 774)
Proceeds on disposal of property plant and 92 199 15 201
equipment
Net cash inflow/(outflow) from investing 2 249 (181 788)
activities
Financing activities
Net proceeds from issue of shares 290 824 -
Interest-bearing liabilities raised 89 186 85 245
Interest-bearing liabilities repaid (459 772) (353 889)
Net cash outflows from financing activities (79 762) (268 644)
Net increase/(decrease) in cash and cash 12 993 (182 149)
equivalents
Cash and cash equivalents at the beginning 104 775 286 924
of the year
Cash and cash equivalents at the end of the 117 768 104 775
year
Abridged consolidated statement of financial position
Audited Reviewed Audited
28 February 31 August 28 February
2011 2010 2010
R`000 R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 613 915 708 764 901 997
Goodwill 27 111 27 111 190 848
Other intangible assets 71 393 74 348 174 801
Deferred taxation 12 124 14 596 20 087
724 543 824 819 1 287 733
Current assets
Inventories 44 832 52 225 72 049
Trade and other receivables 155 001 170 646 269 284
Taxation receivable 4 425 5 573 5 502
Bank and cash balances 127 029 33 727 136 447
331 287 262 171 483 282
Assets classified as held for sale 53 543 45 067 -
Total assets 1 109 373 1 132 057 1 771 015
EQUITY AND LIABILITIES
Share capital and premium 2 023 206 1 732 382 1 732 382
Cash flow hedging reserve (2 453) (3 925) (4 340)
Accumulated loss (1 463 301) (1 427 464) (1 098 898)
Attributable to equity holders of 557 452 300 993 629 144
the company
Outside shareholders` interests (7 328) (7 150) -
Total shareholders` interests 550 124 293 843 629 144
Non-current liabilities
Interest-bearing liabilities 101 886 204 110 315 037
Derivative instruments 290 1 326 1 940
Provisions 4 751 3 956 3 956
Deferred taxation 28 948 39 064 85 487
135 875 248 456 406 420
Current liabilities
Interest-bearing liabilities 174 764 262 573 307 522
Derivative instruments 3 118 4 126 4 088
Vendor loan payable - 43 500 47 000
Trade and other payables 190 580 240 559 325 254
Provisions 25 471 17 710 19 571
Taxation payable 883 2 745 344
Bank overdrafts 9 261 18 545 31 672
404 077 589 758 735 451
Liabilities directly associated with 19 297 - -
assets classified as held for sale
Total equity and liabilities 1 109 373 1 132 057 1 771 015
Net asset value per share (cents) 16,2 28,9 60,5
Net tangible asset value per share 13,9 21,2 30,0
(cents)
Net asset value per share (cents)* 16,2 8,7 18,3
Net tangible asset value per share 13,9 6,4 9,1
(cents)*
*Based on shares in issue on 28
February 2011
Supplementary information
Audited Adjusted for Originally
year ended rights issue reported
28 February year ended year ended
2011 28 February 28 February
2010 2010
Headline loss per share (cents)
- Continuing and discontinued (4,4) (2,8) (5,9)
operations
- Continuing operations (3,7) (1,1) (2,3)
- Discontinued operations (0,7) (1,7) (3,6)
Basic loss per share (cents)
- Continuing and discontinued (14,3) (46,1) (96,8)
operations
- Continuing operations (12,8) (34,1) (71,5)
- Discontinued operations (1,5) (12,0) (25,3)
Shares in issue (`000)
- at end of the year 3 444 716 3 444 716 1 040 700
- weighted 2 546 426 2 183 655 1 040 700
Abridged segmental analysis
Reviewed 6 Unaudited 6 Audited
months ended months ended year ended
31 August 2010 28 February 28 February
R`000 2011 R`000 2011
R`000
EXTERNAL REVENUE
Continuing operations 659 754 639 791 1 299 545
Mining Services 418 520 406 491 825 011
Equipment sales and 40 117 44 631 84 748
rental
Construction Materials 201 117 188 669 389 786
Discontinued
operations
Mining Services 69 669 - 69 669
729 423 639 791 1 369 214
INTER-SEGMENT REVENUE
Continuing operations 2 085 19 530 21 615
Mining Services - 1 079 1 079
Equipment sales and 1 348 18 231 19 579
rental
Construction Materials 737 220 957
Discontinued
operations
Mining Services - - -
2 085 19 530 21 615
EBITDA
Continuing operations 45 822 71 201 117 023
Mining Services 40 282 30 960 71 242
Equipment sales and - 36 068 36 068
rental
Construction Materials 5 540 4 173 9 713
Discontinued
operations
Mining Services 15 678 - 15 678
61 500 71 201 132 701
Operating
(loss)/profit before
amortisation
Continuing operations (40 158) (24 307) (64 465)
Mining Services (33 950) (30 142) (64 092)
Equipment sales and - 13 595 13 595
rental
Construction Materials (6 208) (7 760) (13 968)
Discontinued
operations
Mining Services (9 529) - (9 529)
(49 687) (24 307) (73 994)
Impairment losses
Continuing operations 272 422 1 985 274 407
Mining Services 140 522 - 140 522
Equipment sales and - - -
rental
Construction Materials 131 900 1 985 133 885
Discontinued
operations
Mining Services 21 313 - 21 313
293 735 1 985 295 720
Loss before interest
and taxation ("LBIT")
Continuing operations (320 924) (29 246) (350 170)
Mining Services (179 021) (30 143) (209 164)
Equipment sales and - 13 595 13 595
rental
Construction Materials (141 903) (12 698) (154 601)
Discontinued
operations
Mining Services (30 842) - (30 842)
(351 766) (29 246) (381 012)
Table continues:...
Unaudited 6 Unaudited 6 Audited year
months ended months ended ended 28
31 August 2009 28 February February 2010
R`000 2010 R`000 R`000
EXTERNAL REVENUE
Continuing operations 632 678 608 228 1 240 906
Mining Services 403 364 413 197 816 561
Equipment sales and - - -
rental
Construction Materials 229 314 195 031 424 345
Discontinued
operations
Mining Services 324 640 240 038 564 678
957 318 848 266 1 805 584
INTER-SEGMENT REVENUE
Continuing operations 2 773 2 877 5 650
Mining Services 281 - 281
Equipment sales and - - -
rental
Construction Materials 2 492 2 877 5 369
Discontinued
operations
Mining Services 1 724 1 419 3 143
4 497 4 296 8 793
EBITDA
Continuing operations 143 432 71 631 215 063
Mining Services 114 134 68 277 182 411
Equipment sales and - - -
rental
Construction Materials 29 298 3 354 32 652
Discontinued
operations
Mining Services 43 451 (30 974) 12 477
186 883 40 657 227 540
Operating
(loss)/profit before
amortisation
Continuing operations 79 517 4 226 83 743
Mining Services 59 380 10 649 70 029
Equipment sales and - - -
rental
Construction Materials 20 137 (6 423) 13 714
Discontinued
operations
Mining Services 22 403 (54 696) (32 293)
101 920 (50 470) 51 450
Impairment losses
Continuing operations - 805 613 805 613
Mining Services - 341 719 341 719
Equipment sales and - - -
rental
Construction Materials - 463 894 463 894
Discontinued
operations
Mining Services - 263 553 263 553
- 1 069 166 1 069 166
Loss before interest
and taxation ("LBIT")
Continuing operations 66 413 (812 508) (746 095)
Mining Services 52 529 (337 921) (285 392)
Equipment sales and - - -
rental
Construction Materials 13 884 (474 587) (460 703)
Discontinued
operations
Mining Services 22 403 (318 249) (295 846)
88 816 (1 130 757) (1 041 941)
INTRODUCTION
The Board of Directors presents the Group`s abridged audited consolidated
results for the year ended 28 February 2011 (`the period`).
The Group remains fully committed to achieving fatality free operations and
continuously focuses on improving Safety, Health, Environment, Community and
Quality (`SHECQ`) in all work environments to ensure efficient, zero harm
production in Mining Services and our other operations. Diesel Power Opencast
Mining (Pty) Limited (`Diesel Power`), an entity in the Mining Services business
unit, in January 2011, proudly recorded three million injury free production
hours over a period of 18 months. The lost time injury frequency rate in the
contract mining services business was 0,05 (calculated as (total injuries x 200
000)/total man hours worked). This equated to only two incidents during the
course of 2011 financial year - an outstanding achievement when benchmarked
against industry norms.
The business environment for the period under review remained challenging. The
Group`s results continued to reflect the impact of the global recession on the
sectors in which Buildmax operates and specifically the adverse domino effect on
the value of second-hand yellow metal fleets worldwide compounded by excessive
rainfall in our operating areas in the last four months of the financial year.
During the financial year, Buildmax continued with significant restructuring
initiatives in its Mining Services business unit positioning itself for an
expansion and diversification strategy to penetrate less capital intensive areas
of the mining services supply chain in the future, leveraging the strength of
the Diesel Power brand and its competitive advantage in terms of SHECQ
excellence.
The Group raised R300,5 million through a rights issue of which the net proceeds
were R290,8 million. The proceeds were used to strengthen the Group`s statement
of financial position, reduce interest bearing short-term debt, provide equity
for medium term capital expenditure for the Group`s Mining Services business
unit and provide additional working capital for the Group.
As a result of the significantly improved financial position, Diesel Power was
able to secure an asset based funding package of R130 million from the
Industrial Development Corporation of South Africa Limited ("IDC"). This
facility will be used to replace existing mining equipment and increase Diesel
Power`s capacity with an improved mix of assets, positioning Diesel Power to
become more efficient, leveraging off their blue chip customer base.
In order to achieve strategic alignment and improve profitability and cash flow,
management have been analysing the performance and financial forecasts of all
operating entities to ascertain which have medium to long term prospects of
achieving acceptable and sustainable returns for the Group. As a result of these
reviews the Board approved the sale of Watertite and consequently the assets and
liabilities were disclosed as held for sale.
FINANCIAL OVERVIEW
The Group`s principal business - opencast mining services - remains, amongst
other factors, highly dependent on fleet replacement, availability of asset
based funding and securing reasonable prices for its second-hand equipment. The
low levels of activity in global markets in the wake of the economic downturn
have resulted in a surplus of second-hand equipment and vehicles, which has
reduced second-hand resale prices by as much as 50%, to the detriment of the
Group. Although demand for the Group`s second hand equipment and vehicles
improved during the second half of the year, bank funding required by potential
buyers remained constrained.
In light of this and compounded by the tougher credit climate, Buildmax has been
forced to continue with extending the useful life of assets beyond the ideal
replacement cycle. Consequently, production has been negatively impacted and
maintenance costs have increased, which has reduced top and bottom line growth.
Wherever possible, albeit in a constrained market, the Group continues to
dispose of equipment when compelling opportunities present themselves. To this
end a new business unit, Equipment Sales & Rental, has been formed. This new
business unit will focus on improving the Group`s second-hand brand equity as
well as the efficiency of asset disposals compared to ad-hoc disposals of assets
in the various businesses in the Group.
Based on the continued weak outlook for the industries the Group operates in,
management again conducted a critical review of the value of the Mining Services
fleet and tested for impairment of goodwill and intangible assets. As a result
of this review, the value of these assets were impaired by a further R295,7
million.
FINANCIAL PERFORMANCE
Continuing operations
Despite revenue from continuing operations growing by 4,7% to R1,30 billion
(FY2010: R1,24 billion), EBITDA decreased by 45,6% to R117,0 million (FY2010:
R215,1 million) primarily as a result of costs associated with:
- The continued decline in the value of second-hand equipment and the scarcity
of bank finance for new equipment;
- Ongoing use of sub-contractors and hired equipment at punitive rates;
- The Mining Services business unit having to extend the life of its yellow
metal fleet, resulting in an increased investment in maintenance and related
resources to improve sustainable plant availability and productivity;
- Excessive rainfall during the last four months of the financial year; and
- The continued erosion of margins in the construction industry.
The loss before taxation improved from R810,9 million to R377,5 million which
includes non-cash impairment losses of R274,4 million in the current year.
Shareholders` funds decreased to R550,1 million (FY2010: R629,1 million). Net
asset value per share, (based on the number of shares in issue at the end of the
current financial year, subsequent to the rights offer) reduced from 18,3 cents
to 16,2 cents and net tangible asset value per share increased from 9,1 cents to
13,9 cents.
The basic loss per share after impairments of non-current assets amounted to
12,8 cents compared to the comparative period loss of 71,5 cents.
Discontinued operations
As indicated, when releasing the prior year`s results, the mining operations of
Vukuza have been disclosed as discontinued operations. Revenue from these
operations was R69,7 million, with EBITDA of R15,7 million and an operating loss
of R9,5 million. Following the review (see above), the carrying value of the
fleet was impaired by R21,3 million. Including the impact of the impairment on
property, plant and equipment, discontinued operations reported a loss before
interest and taxation of R30,8 million.
HEADLINE loss PER SHARE (`HlPS`)
The Group recorded `HLPS` in continuing and discontinued operations of 4,4 cents
compared to a loss of 5,9 cents for the comparative period. The Group did not
issue any potentially dilutive instruments for the year under review (FY 2010:
Nil).
DEBT AND CASH
The Group`s gross debt was R289,3 million at the end of the year, significantly
lower than R660,3 million for the comparative period. Debt repayments during the
period amounted to R459,8 million and were funded from internal cash resources
(R328,7 million), proceeds from the sale of surplus mining equipment and
vehicles (R32,6 million) and from the proceeds of the rights issue.
The Group`s net cash position increased by R13,0 million and it generated R128,0
million from operations.
Certain of the Group`s debt facilities are subject to covenants in terms of
which a number of the Group`s subsidiaries are required to meet pre-determined
performance indicators. As set out in the 2010 annual financial statements,
management had commenced renegotiating these covenants with the Group`s bankers.
Subsequent to the successful implementation of the rights offer, management and
the bankers have agreed on revised, less restrictive covenants and it is
expected that formal agreements will be signed before the end of the first
quarter of the 2012 financial year. At year-end, the Group was not in breach of
any borrowing covenants.
CAPITAL EXPENDITURE
The onerous bank lending environment for new and used equipment remains an
impediment to the equipment replacement cycle. This has resulted in
substantially lower capital expenditure (`capex`) for the period. Gross capex
amounted to R89,9 million, 54,3% lower than in the previous year. Net capex
after the sale of surplus equipment resulted in a cash inflow of R2,2 million.
The Group secured an asset based funding facility of R130 million from the IDC.
No draw-downs had been made against this facility by the end of the 2011
financial year. The Group will utilise the available facility for plant
replacement and growth that will have a positive impact on productivity in the
Mining Services business unit.
RIGHTS ISSUE
The Group successfully raised R300,5 million through a fully subscribed rights
issue to qualifying shareholders. The rights issue was completed on 15 November
2010. Shareholders are referred to the SENS announcement dated 16 November 2010
in this regard.
OPERATIONAL OVERVIEW
Group
As indicated at the time of release of the Group`s interim results, an operating
loss before amortization and impairments was expected for the full year. The
turnaround strategy implemented during FY2011 is beginning to deliver the
desired results. As disclosed in the segmental analysis, the Group reported a
significant reduction in operating losses during the second half of FY2011. The
operating loss of R24,3 million reported for the second half of FY2011 was an
improvement in excess of 50% over both the second six months of FY2010 and the
first six months of FY2011. Included in the results for the last 6 months of
2011 is an Onerous Contract provision of R15 million in Diesel Power an entity
in the Mining Services business unit.
Continuing operations
Mining Services
Revenue increased by 1% to R825 million (FY2010: R816,6 million). EBITDA reduced
by 60,9% to R71,2 million (FY2010: R182,4 million). The business unit incurred a
loss before interest and taxation of R209,2 million including impairments of
R140,5 million on goodwill, intangible assets and equipment.
Gross capex for the period of R69,1 million was 26,6% lower than the comparative
period`s capex of R94,2 million. Management will only commit to growth capex if
new projects meet required financial returns criteria.
The new Equipment Sales & Rental business unit delivered revenue of R84,7
million.
Construction Materials
Revenue for this business unit was R389,8 million, a decrease of 8,1% from the
R424,3 million reported for the comparative period. Margins were eroded as a
result of increased input costs, which the divisions were unable to pass on to
customers. EBITDA declined to R9,7 million (FY2010: R32,7 million). The business
unit incurred a loss before interest and taxation of R154,6 million which
includes non cash flow impairments on goodwill and intangible assets of R133,9
million.
Gross capex for the period was R10,3 million, 68,4% lower than capex for the
comparative period of R32,6 million. Capex was financed by internal cash
resources and no significant capex is forecasted in the short-term for this
business unit.
OUTLOOK AND PROSPECTS
Mining Services
Coal remains one of the cheapest sources of energy in the world. Its abundant
reserves compared to other fossil fuels means that it is likely to remain the
primary source of energy for the foreseeable future.
Whilst Eskom has curtailed its projected demand for coal over the medium-term
and has announced its intention to introduce alternative energy sources, the
continued roll-out of coal fired power stations coupled with international
demand for thermal and coking coal, particularly from China and India, should
ensure continued growth in this sector for the foreseeable future.
Additional export capacity continues to come on stream at Richards Bay, Durban
and Maputo. Exports from Richards Bay for the financial year under review were
marginally higher than the sales for the comparative period. Further, Transnet
has announced that it intends to increase the size of its rolling stock fleet
and improve its rail network which should alleviate some bottlenecks currently
experienced by coal exporters.
The Buildmax Group has meaningful contractual relationships with the leading
mining Groups in the country, which it is ambitious to grow for mutual benefit.
Mining Services is well positioned to participate in additional coal mining
supply chain activities that are less capital intensive. Management is currently
formulating its strategy in this regard. The directors are optimistic that this
market will provide profitable opportunities for the Mining Services business
unit in the future.
Construction Materials
The outlook for the construction industry is reliant on spending by government
and the private sector. The lack of funding continues to hamper public sector
projects while high levels of debt, excess stock and a lack of bank funding
continue to impact negatively on the private sector. Predicting a recovery in
the construction market is extremely difficult and the market is not expected to
improve during the 2012 financial year. However the businesses in the
Construction Materials unit are well positioned to benefit from improved trading
conditions as and when they occur.
Group
The restructuring of the Mining Services business unit has been completed and
the operating performance improved. Initiatives such as the appointment of new
management, improved maintenance, better pricing and the general turnaround of
the business started to take shape in the second six months of 2011. The
proceeds of the rights issue and the right-sizing of Mining Services has led to
an improvement in Buildmax`s financial position.
TRANSFORMATION
Black shareholding in the Group has significantly reduced from 17% at the end of
the previous financial year to 6,75%, due to the finalisation of the rights
issue.
The Transformation Committee has formulated a three to four year plan to improve
the Group`s rating from a level 6 to a Level 4 contributor.
SAFETY, HEALTH, ENVIRONMENT, COMMUNITY & QUALITY (SHECQ)
Buildmax continually strives to provide a safe working environment for all
employees, sub-contractors and stakeholders by complying with all legal and
other requirements. The Buildmax SHECQ Management System has been successfully
implemented, maintained and monitored for the purpose of continual improvement.
Our ongoing commitment towards our values and customer requirements has driven
us to meeting best practice in SHECQ.
The Buildmax SHECQ Management System was assessed and certified by SABS to
confirm compliance with two SABS standards, namely ISO 9001: 2008 (Quality
Management ) and the OHSAS 18001: 2007 (Occupational Health and Safety)
standards with no exclusions and also received benchmark results from UNISA on
internal and external communication processes.
Buildmax is absolutely committed to making "Efficient Zero Harm Production" a
reality and this is achieved with the combined commitment of every member of our
team and other relevant stakeholders.
STAFF COMPLEMENT
At the end of February the Group employed 2 405 people down from 3 450 at the
2010 year end.
BOARD OF DIRECTORS AND MANAGEMENT
During the year, and in line with the requirements of King III, Colin Wood was
appointed as Independent Non-Executive Chairman of the Board and Terry Bantock
assumed the position of CEO, both effective 23 September 2010. Subsequent to Mr.
Wood`s new appointment, he resigned from his position as Chairman of the
Remuneration Committee. Independent Non-Executive Director Colin Brayshaw was
appointed as Chairman of the Remuneration Committee.
The following board members resigned during the period under review:
Herman Fourie 2 August 2010
Paul de Klerk 2 August 2010
Mark Matisonn 24 November 2010
Raymond Munitz 24 November 2010
Anil Maharaj 16 May 2011
Malcolm McCulloch was appointed on 12 January 2011 and Greame Montgomery on 1
June 2011 as Non-Executive Directors.
In order to strengthen the management of the Group, the EXCO has been
constituted as follows:
- Terry Bantock (CEO);
- Christie Els (CFO);
- Paul de Klerk (MD: Retail Division); and
- Herman Fourie (Executive Director: Commercial and Finance of Mining Services
SBU);
- Thandeka Mgoduso (Group Human Resources and Strategic Transformation
Director);
- Warren Phillips (MD: Manufacturing Division).
- Kobus van Biljon (CEO Mining Services SBU);
FINAL DIVIDEND
No dividend has been declared. It is the Group`s policy to consider the
declaration of a dividend annually.
APPRECIATION
We believe we have an outstanding and dedicated management team who are
operating with great enthusiasm and determination to steer the company in a
profitable direction. While there remain a few challenges to be overcome, we are
confident that the Buildmax turnaround is on track and that the Group will
become a profitable company with solid growth prospects especially in the mining
sector of the South African economy.
We would like to thank our fellow directors, management teams and employees for
their hard work and dedication under very trying conditions. We also thank our
customers, suppliers, service providers, shareholders and advisors for their
ongoing support.
Basis of preparation and accounting policies
This abridged consolidated financial report for the year ended 28 February 2011
has been prepared in compliance with International Financial Reporting Standards
(`IFRS`) specifically IAS 34 Interim Financial Reporting, the AC 500 standards
as issued by the Accounting Practices Board, the South African Companies Act (as
amended), and the Listings Requirement of the JSE Limited.
With effect from the start of the current financial year, Buildmax has adopted a
more appropriate, activity based, depreciation method, which is now based on the
actual hours worked by the mining assets. Utilising the services of internal and
external industry experts, management has conservatively revised the residual
values and useful lives of all items of property, plant and equipment and
adjusted these values accordingly.
Except for the change in the depreciation method and for the adoption of new and
revised accounting standards which became effective during the financial year,
the principle accounting policies applied by the Group in the abridged
consolidated financial results for the year ended 28 February 2011 are
consistent with those applied in the consolidated financial statements for the
year ended 28 February 2010. The audited financial statements and unqualified
audit report of the external auditors, PKF (Jhb) Inc. are available for
inspection at the registered office of the company.
Estimates and contingencies
Management makes estimates and judgments concerning the future with regards to
opencast mining contracts, provisions, claims, depreciation methods and residual
values when estimating the recoverable amounts of assets. The resulting
estimates and judgments can only approximate the actual results. Estimates and
judgments are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be
reasonable under the circumstances.
Subsequent events
The Group is in an advance stage of concluding a transaction whereby Buildmax
will dispose of its entire shareholding in Benoni Sand and Buildware (Pty)
Limited to a consortium led by Paul de Klerk. This disposal is in line with the
overall Group strategy.
Contingencies
The Group has contingent liabilities in respect of legal claims arising in the
ordinary course of business.
It is not anticipated that any material liabilities will arise from the
contingent liabilities other than those provided for.
Colin Wood
Chairman of the Board
Terry Bantock
Group CEO
Christie Els
CFO
30 May 2011
Directors: C Wood (Chairman)*; TP Bantock (Chief Executive Officer); CS Els
(Chief Financial Officer); CB Brayshaw*; MD Lamola*; DJ Mack*; MW McCulloch*; BT
Ngcuka*; (*Non-executive director, Independent)
Registered office: 514 Pretoria Road, Fairleads, Benoni. (Postnet Suite 435,
Private Bag X108, Centurion, 0046)
Sponsor: Java Capital
Auditors: PKF (Jhb) Inc., 42 Wierda Road West, Wierda Valley, Sandton, 2196
Transfer secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall
Street, Johannesburg, 2001 (PO Box 61763, Marshalltown, 2107)
Company secretary: Probity Business Services (Pty) Limited
www.buildmax.co.za
Date: 30/05/2011 17:36:32 Supplied by www.sharenet.co.za
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