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ELI - Ellies Holdings Limited - Audited results for the year ended 30 April 2011

Release Date: 20/07/2011 11:31
Code(s): ELI
Wrap Text

ELI - Ellies Holdings Limited - Audited results for the year ended 30 April 2011 Ellies Holdings Limited (Registration No. 2007/007084/06) Share code ELI ISIN code ZAE000103081 AUDITED RESULTS FOR THE YEAR ENDED 30 APRIL 2011 Revenue up 14% NPAT up 33% HEPS 31,42 cents NAV per share 196,40 cents Abridged consolidated statement of financial position Audited Audited as at as at
30 April 2011 30 April 2010 R`000 R`000 % change ASSETS Non-current assets 309 553 264 159 Property, plant and equipment 76 584 33 059 - Land and buildings 41 353 - - Other 35 231 33 059 Goodwill 217 554 217 554 Intangible assets 6 434 7 936 Investment in associate 1 039 - Deferred taxation 7 942 5 610 Current assets 655 240 510 029 Inventories 358 895 297 811 Trade and other receivables 224 319 193 365 Taxation receivable 418 634 Bank and cash balances 71 608 18 219 Total assets 964 793 774 188 EQUITY AND LIABILITIES Total shareholders` interests 596 079 517 254 Share capital and premium 501 494 501 494 Non-distributable reserves (178 875) (178 667) Accumulated profits 274 824 194 427 Equity attributable to equity 597 443 517 254 holders of the parent Non-controlling interests (1 364) - Non-current liabilities 44 059 33 625 Interest-bearing liabilities 43 913 33 625 Deferred taxation 146 - Current liabilities 324 655 223 309 Interest-bearing liabilities 29 672 23 380 Vendor loans payable - 13 607 Trade and other payables 245 182 147 346 Provisions 2 258 1 493 Taxation payable 1 099 6 011 Shareholders for dividends 188 - Bank overdrafts 46 256 31 472 Total equity and liabilities 964 793 774 188 Shares in issue at the end of 303 505 691 303 505 691 the year (number of shares) Net asset value per share 196,40 170,43 15,2 (cents) Tangible net asset value per 122,81 96,46 27,3 share (cents) Abridged consolidated statement of comprehensive income Audited Audited year ended year ended 30 April 2011 30 April 2010 R`000 R`000 % change
Revenue 1 316 055 1 156 478 13,8 Profit before depreciation, 159 786 132 433 20,7 amortisation, interest and taxation ("EBITDA") Depreciation (12 229) (11 904) Amortisation of intangibles (1 502) (1 428) Profit before interest and 146 055 119 101 taxation Interest received 548 948 Interest paid (12 819) (19 719) Share of losses from associate (531) - Net profit before taxation 133 253 100 330 ("PBT") Taxation (39 044) (29 363) Net profit after taxation 94 209 70 967 32,8 Other comprehensive income: Foreign currency translation (208) (332) reserve Total comprehensive income for 94 001 70 635 the year Attributable to: Equity holders of the parent 95 573 70 967 Non-controlling interests (1 364) - Net profit after tax 94 209 70 967 Attributable to: Equity holders of the parent 95 365 70 635 Non-controlling interests (1 364) - Total comprehensive income for 94 001 70 635 the year Supplementary information: Basic earnings per share 31,49 26,19 20,2 (cents) Headline earnings per share 31,42 25,96 21,0 (cents) Core headline earnings per 32,09 29,43 9,0 share (cents) Diluted earnings per share 31,49 23,38 34,7 (cents) Diluted headline earnings per 31,42 23,18 35,5 share (cents) Diluted core headline earnings 32,09 26,27 22,2 per share (cents) Dividends per share (cents) - 5,00 Shares in issue (number of shares): - At the end of the year 303 505 691 303 505 691 - Weighted 303 505 691 270 944 245 - Diluted 303 505 691 303 505 691 Reconciliation of earnings to headline earnings and core headline earnings Audited Audited year ended year ended 30 April 2011 30 April 2010
R`000 R`000 % change Net profit for the year 95 573 70 967 34,7 attributable to equity holders of the parent Adjusted for: Profit on sale of property, (301) (858) plant and equipment Tax effect on adjustments 84 240 Headline earnings attributable 95 356 70 349 35,5 to ordinary shareholders Adjusted for: Amortisation of intangibles 1 502 1 428 Transactional costs expensed 473 - (Failed acquisition) IFRS implied interest on vendor 481 8 356 liabilities Tax effect on adjustments (421) (400) Core headline earnings 97 391 79 733 22,1 attributable to ordinary shareholders Abridged consolidated statement of cash flows Audited Audited year ended year ended 30 April 2011 30 April 2010
R`000 R`000 % change Cash flows from operating 93 290 63 268 activities Cash generated from operations 166 000 101 805 63,1 Interest received 548 948 Interest paid (in cash) (12 338) (11 363) Taxation paid (45 932) (28 122) Dividends paid (14 988) - Cash flows from investing (57 177) (17 388) activities Cash flows from financing 2 492 (5 566) activities Net increase in cash and cash 38 605 40 314 equivalents Cash and cash equivalents at (13 253) (53 567) the beginning of the year Cash and cash equivalents at 25 352 (13 253) the end of the year Abridged statement of changes in equity Audited Audited
year ended year ended 30 April 2011 30 April 2010 R`000 R`000 Balance at the beginning of the 517 254 385 685 year Shares issued at a premium - 60 934 Total comprehensive income for 94 001 70 635 the year Dividends declared during the (15 176) - year Balance at the end of the year 596 079 517 254 Segmental analysis Audited Audited year ended year ended 30 April 2011 30 April 2010 R`000 R`000 % change
Revenue 1 316 055 1 156 478 Wholesale distribution of 1 095 946 985 311 11,2 consumer goods and services Infrastructural electrification 216 540 171 167 26,5 Property 3 131 - Other 3 569 - Holding company/consolidation (3 131) - Segmental profits/(losses) from operations Profit before interest and 145 524 119 101 taxation Wholesale distribution of 124 772 100 627 24,0 consumer goods and services Infrastructural electrification 22 821 18 916 20,6 Property 2 646 - Other (4 289) - Holding company/consolidation (426) (442) Net finance costs (12 271) (18 771) Operating segments (combined) (10 108) (10 415) Property division (1 682) - Deemed vendor interest (481) (8 356) Profit before taxation 133 253 100 330 Notes to the audited year end results Audited results for the year ended 30 April 2011 The results for the year ended 30 April 2011 have been audited by PKF (Jhb) Inc. and their unqualified audit report is available for inspection at the group`s registered office. Basis of preparation and accounting policies These annual financial results have been prepared in accordance with International Financial Reporting Standards ("IFRS"), the AC 500 series of Interpretations, the requirements of IAS 34, the Listing Requirements of the JSE Limited and the Companies Act of South Africa. The accounting policies used are consistent with those applied in the previous financial year. Commentary Introduction On 26 November 2010, Ellies Holdings Limited ("Ellies" or "the group") transferred its listing from the Alternative Exchange to the Main Board - "Electronic and Electrical Sector" of the JSE Limited. The group is pleased to welcome Mr Oliver Fortuin to the board as Lead Independent Director, effective from 11 April 2011. Oliver has more than 20 years` experience in the technology industry, 15 of these with IBM. He is currently serving as a senior executive for IBM Sub-Saharan Africa. Financial overview The group achieved strong growth during the year under review, with overall revenue up 14% and net profit after tax ("NPAT") up 33%, to R94,2 million (2010: R70,9 million), with the two major segments having both achieved Profit from operations growth in excess of 20%. The Earnings growth of 34,7% translates into an EPS growth of 20,2% as a result of the Rights Offer. As at 30 April 2010, shares in issue amounted to 303 505 691, while the weighted average number of shares amounted to 270 944 245. The group`s balance sheet remains strong, with NAV and NTAV per share improving to 196 cents (2010: 170 cents) and 123 cents (2010: 96 cents) respectively. As stated in our 2010 interim results, the group has implemented a strategy to acquire its operating premises countrywide and, where appropriate, upgrade these premises. The Property segment has invested R43,4 million as at year end. The group anticipates that, over time, the resultant capitalisation of property and the value growth will deliver sound returns. Currently the properties are financed through a ten year facility of R40 million. It is anticipated that the directors will continue with this long term investment strategy. Cash generation from operations during the period was healthy. At the period end, the cash position had grown by R38,6 million. Much of this cash improvement is due to additional creditor financing and significant cash receipts against contract orders placed prior to year end, with a significant portion being utilised towards the fulfilment of these contract orders. Divisional overview Ellies and Elsat divisions continued their solid performance with strong consumer demand for its products and services. Gross margins improved by more than 2% points, due to economies of scale and improved purchasing. Recognition must be given to the growth in the TV satellite market, largely due to the 2010 FIFA World Cup and new TV satellite services providers entering the market. The performance of the Infrastructural electrification segment reflects a substantial improvement, in spite of the depressed conditions in the building sector. This turnaround is largely due to the improved demand in the mining resources sector. In addition, the division`s diversification into renewable power solutions and the telecommunications sector, has contributed to this improvement. Prospects Ellies, by its nature, will continue to grow and diversify by seeking new products and ventures, and thus offering its solid customer base additional quality products and services. We, together with our strategic alliance partners, look forward to the imminent implementation of the Digital Terrestrial Television ("DTT") migration rollout through southern Africa. The group continues its participation in energy conservation and the reduction of green house effects, with renewable energy sector products including solar power, solar heating and energy-efficient lighting. In the past few months Ellies has secured new agencies and products in the lighting and power creation and conservation environment, to enhance its offerings. Ellies has established a Green Office environment to showcase this. The group intends to utilise different forms of carbon financing, including the generation of carbon credits under the Clean Development Mechanism, to bring its renewable energy sector products to market in an affordable and sustainable manner. The strong Rand has to some extent limited the export contributions from Ellies. Management is adopting an aggressive approach to improve efficiencies and capacity utilisation, thereby improving our African export penetration. In-toto Solutions, a BEE initiative and subsidiary of Ellies, focuses on government and large private sector projects. It has successfully completed its first energy-efficient housing project, with future in-roads into this area expected. SkyeVine has started operating, by providing internet satellite connectivity within Sub-Saharan Africa, with the successful launching of Intelsat`s New Dawn Satellite. Ellies has a 45% interest in SkyeVine and will continue to invest and co-develop the opportunities. Returns from this investment are expected to be reflected in the coming years, with the growth in the subscriber base. This venture not only utilises Ellies` established national and African logistic infrastructure but also adds a new dimension to our satellite division. SkyeVine`s internet services will provide redundancies and reach where terrestrial broadband providers cannot. It is an all-inclusive Internet-via- Satellite solution. SkyeVine, with its unique product offering, is focused on growing the broadband subscriber base in Africa, by targeting the home user and small enterprise markets. With the mining sector once again starting to spend on infrastructural developments, particularly in Africa, this segment`s contribution is expected to continue to improve. This is supported by the current order book. The building and electrification sectors however, are recovering at a slower rate. Megatron`s continued diversification into associated power products, renewable energy and telecommunications and together with the manufacture of transformers is expected to contribute towards its future buoyancy. The board remains positive as regards the group`s continued organic growth, current new ventures, and new product opportunities which continue to present themselves. Dividend policy The payment of dividends is reviewed periodically, taking into account prevailing circumstances and future cash requirements. No dividend is proposed at this stage due to short term funding requirements to support working capital needs. Appreciation The directors and management, as always, continue to recognise and appreciate the focused efforts and hard work of the group`s staff and also continue to appreciate its customers, business partners, advisors, suppliers and, most importantly, shareholders. The recent labour unrest and related intimidation necessitated that some of our Gauteng operations ceased trading for a limited period and we appreciate the understanding of our customers and dedication of our many loyal staff members. By order of the board ER Salkow WMG Samson Chairman CEO 20 July 2011 Directors: Executive Directors: ER Salkow (Chairman) WMG Samson (Chief executive officer) MF Levitt (Chief financial officer) RH Berkman RE Otto Lead independent non-executive Director: OD Fortuin (appointed 11 April 2011) Independent non-executive Directors: MR Goodford MS Mazwi Non-executive Directors: AC Brooking Registered office: 94 Eloff Street Ext, Village Deep, Johannesburg, 2001 (PO Box 57076, Springfield, 2137) Sponsor: Java Capital (Pty) Limited Auditors: PKF (Jhb) Inc. Company secretary: Probity Business Services (Pty) Limited Transfer secretaries: Link Market Services South Africa (Pty) Limited Date: 20/07/2011 11:31:18 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`). 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