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BSS - BSI Steel Limited - Audited condensed financial results: year ended 31
March 2011
BSI Steel Limited
(Incorporated in the Republic of South Africa)
(Registration number 2001/023164/06)
(JSE code: BSS ISIN: ZAE000125134)
("BSI" or "the company" or "the group")
Salient features
- Revenue up 29%
- HEPS up 79% to 5.1 cents
- NAV per share up to 59.1 cents
- Dividend paid November 2010 of 2.0 cents per share
AUDITED CONDENSED FINANCIAL RESULTS FOR THE YEAR ENDED
31 MARCH 2011
Condensed income statement
Audited Audited
year year
ended ended
31 March 2011 31 March 2010
R`000 R`000
Revenue 1 856 448 1 437 068
Gross profit before 272 689 200 982
exceptional items
Exceptional items(1) - (8 256)
Gross profit 272 689 192 726
Other costs (186 188) (135 928)
Earnings before interest,
taxation, deprecation and
amortisation 86 501 56 798
("EBITDA")
Depreciation and (11 161) (9 286)
amortisation
Operating profit 75 340 47 512
Profit on disposals of assets - 7 868
Fair value adjustments 7 -
Interest received 1 344 1 423
Interest paid (34 564) (23 808)
Profit before taxation 42 127 32 995
Taxation (6 151) (7 035)
Profit for the year 35 976 25 960
Basic and diluted earnings
per share (cents) 5.1 3.7
Reconciliation of headline
earnings:
Profit for the year 35 976 25 960
Profit on disposal of - (7 868)
property, plant & equipment
Loss on disposal of property, 160 30
plant & equipment
Tax impact on adjustments (44) 2 195
Headline earnings (basic and 36 092 20 317
diluted)
Weighted average shares in 706 668 709 393
issue on which earnings are
based (000)
Headline earnings per share 5.1 2.9
(cents) (basic and diluted)
Dividend per share (cents) 2.0 -
Note:
1) During the first half of the prior year the company recorded
exceptional charges amounting to R8,26 million related to write downs of
inventory.
Condensed statement of comprehensive income
Audited Audited
31 March 31 March
2011 2010
R`000 R`000 Profit for the
year 35 976 25 960
Other comprehensive income
Realisation of property
revaluation - (10 056)
Taxation - 1 273
Effects of cash flow hedges 2 159 (2 425)
Foreign currency translation
Reserve (8 440) (28 009)
Total comprehensive income 29 695 (13 257)
Condensed statement of financial position
Audited Audited
31 March 2011 31 March 2010
R`000 R`000
ASSETS
Non-Current Assets
Property, plant and 260 042 240 888
equipment
Goodwill 13 206 13 442
Intangible assets 13 331 9 357
Deferred taxation 1 335 1 607
287 914 265 294
Current Assets
Inventories 283 638 296 320
Trade and other receivables 376 856 386 495
Current tax receivable 2 695 242
Other financial assets - 2
Cash and cash equivalents 40 656 23 294
703 845 706 353
Total assets 991 759 971 647
EQUITY AND LIABILITIES
Equity
Total shareholders` equity 417 769 399 949
Non-Current Liabilities
Other financial liabilities 98 305 114 248
Deferred taxation 3 412 2 724
101 717 116 972
Current Liabilities
Trade and other payables 222 202 209 791
Current tax payable 7 344 11 753
Other financial liabilities 23 464 19 728
Bank overdraft 219 263 213 454
472 273 454 726
Total Liabilities 573 990 571 698
Total equity and liabilities 991 759 971 647
Capital commitments 1 145 3 547
Number of shares in issue 706 668 706 668
(000)
Net asset value per share 59.1 56.6
(cents)
Net tangible asset value per 55.4 53.4
share (cents)
Condensed statement of changes in equity
Audited Audited
31 March 31 March
2011 2010
R`000 R`000
Balance at beginning of year 399 949 415 962
Dividend paid (14 133) -
Share Based Payment 2 258 1 366
Purchase of treasury shares - (4 122)
Total comprehensive income 29 695 (13 257)
Attributable to ordinary 417 769 399 949
shareholders at end of year
Condensed statement of cash flows
Audited Audited
31 March 31 March
2011 2010
R`000 R`000
Operating activity cash 74 308 (50 830)
flows
Cash flows from operations 117 837 (34 268)
Interest and taxation (43 529) (16 562)
Investing activity cash (36 272) (48 923)
flows
Financing activity cash (25 925) (2 603)
flows
Total cash movement for the 12 111 (102 356)
year
Cash at beginning of period (190 160) (84 648)
Effect of exchange rate (558) (3 156)
movement on cash balances
Total cash at end of year (178 607) (190 160)
Condensed segment report
Audited Audited
31 March 31 March
2011 2010
R`000 R`000
Gross revenue
Stockists 591 550 510 466
Bulk Sales 578 090 451 418
Exporting 676 807 474 839
Other 10 001 345
1 856 448 1 437 068
Profit before interest and
taxation
Stockists 5 568 (11 239)
Bulk Sales 26 359 25 392
Exporting 48 513 28 609
Other (5 093) 12 618
75 347 55 380
Total assets
Stockists 216 690 274 621
Bulk Sales 171 377 167 049
Exporting 276 914 350 853
Other 342 814 287 344
Eliminations (16 036) (108 220)
991 759 971 647
OVERVIEW
The directors of BSI are pleased to present the financial results for the year
ended 31 March 2011 ("the 2011 year").
The group operates in the steel and associated industries with strategically
located operations in South Africa, the Democratic Republic of the Congo
("DRC"), Mauritius, Mozambique, Zimbabwe and Zambia to service the Southern
African markets. BSI markets through three distinct channels, being Stockists,
Bulk sales and Exports; all of these divisions are supported by its steel
processing operations.
The financial year under review was characterised by favourable steel demand
leading up to the FIFA World Cup, followed by a marked contraction in
construction and manufacturing activity which severely affected the steel
industry for the balance of 2010. The last quarter of the financial year showed
improved demand and firmer prices which ended the year on a positive upward
trend.
FINANCIAL RESULTS
The results show an increase in headline earnings of 78% from R20 million in
2010 to R36 million. The growth in headline earnings is on the back of increased
margins achieved with a growth in revenue of 29% to R1 856 million (2010: R1 437
million).
The cost base of the group has grown 37% to R186 million (2010: R136 million),
this is in line with the group`s growth plans. Although the costs have increased
ahead of the turnover growth, the planned infrastructural development in both
assets and people has put the group into a position to take advantage of future
opportunities.
There has been continued effort to tighten up on the efficiencies of the
business and the relative reduction of Debtors and Inventories has allowed the
group to show a positive cash flow movement for the year, even while the growth
platform was being built. Although the borrowing costs for the year are up on
the previous year this expense has reduced in the second half.
DIVIDEND POLICY
We remain committed to paying a dividend in the second half of the year.
BASIS OF PREPARATION
The results have been prepared containing the information required by IAS 34
Interim Financial Reporting, AC 500 and are in accordance with the group`s
accounting policies, which comply with International Financial Reporting
Standards, the Companies Act of South Africa and the JSE listing requirements.
They are consistent with those in the prior year.
SUBSEQUENT EVENTS
No material change has taken place in the affairs of the group between the end
of the financial year and the date of this report.
PROSPECTS
BSI remains a growth company capitalising on opportunities both in South Africa
and in the rest of Africa. While volatility in terms of steel demand and price
has been challenging to manage, we believe that the strategies we have put in
place will allow us to grow and improve profitability on a consistent basis.
Having invested in a central steel processing and distribution centre in
Midvaal, we are now rolling out retail outlets across South Africa that will
significantly improve our geographic footprint. This will allow us to access a
different customer profile, bring in a cash sales component and expose the group
to improved sales margins.
In Africa we have eight branches and have recently opened a branch in Accra,
Ghana, which will be the first of a planned roll-out in West Africa. This
expansion will be more measured as a result of the increased challenges
operating in Africa.
Our continued product diversification will further fuel our growth and work
synergistically with our expanded branch network.
Our current initiatives are to manage our inventory more efficiently and ensure
our operational costs are kept under control. This needs to be balanced against
providing capacity for ongoing growth.
STATEMENT ON GOING CONCERN
The financial statements have been prepared on the going-concern
basis since the directors have every reason to believe that the
company has adequate resources in place to continue in operation for the
foreseeable future.
AUDIT OPINION
The auditors, Deloitte & Touche, have issued their
opinion on the group`s financial statements for the year ended 31 March 2011.
The audit was conducted in accordance with International Standards on Auditing.
They have issued an unmodified opinion. These summarized provisional financial
statements have been derived from the group financial statements and are
consistent in all material respects, with the group financial statements. A
copy of their audit report is available for inspection at the company`s
registered office. Any reference to future financial performance included in
this announcement, has not been reviewed or reported on by the Company`s
auditors.
By order of the Board
10 June 2011
W L Battershill J R Waller
Chairman Financial Director
CORPORATE INFORMATION
Non executive directors: B M Khoza (Alternate - N M Anderson),
N G Payne; R G Lewis
Executive directors: W L Battershill, G D G Mackenzie, C Parry, W R Teichmann, J
R Waller
Registered address: Murrayfield Park, Mkondeni,
Pietermaritzburg 3201
Postal address: P O Box 101096, Scottsville, 3209
Company secretary: S J Hackett
Telephone: (033) 846 2208
Facsimile: (033) 346 0870
Transfer secretaries: Computershare Investor Services (Pty) Limited
Designated Adviser: Sasfin Capital (A division of Sasfin Bank Limited)
Date: 10/06/2011 17:15:01 Supplied by www.sharenet.co.za
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