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CSB - Cashbuild Limited - Audited group annual financial results and dividend
declaration June 2011
Cashbuild Limited
(Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE Share Code: CSB ISIN: ZAE000028320
Net asset value per share up 15% Total dividend for year up 27% Revenue up
6% Operating profit excl BEE transaction up 21% Headline earnings excl
BEE transaction up 28%
AUDITED GROUP ANNUAL FINANCIAL RESULTS AND DIVIDEND DECLARATION JUNE 2011
CONDENSED GROUP INCOME STATEMENT - AUDITED
R`000 Year ended Year ended
30 June 30 June %
2011 2010 change
Revenue 5 667 494 5 369 146 6
Cost of sales (4 393 705) (4 216 241) 4
Gross profit 1 273 789 1 152 905 10
Share buy-back and distribution to BEE
participants (51 269) -
Selling and marketing expenses (814 558) (776 838) 5
Administrative expenses (166 613) (132 470) 26
Other operating expenses (7 060) (5 398) 31
Other income 4 985 1 245 300
Operating profit 239 274 239 444 0
Finance cost (704) (5 700) (88)
Finance income 29 759 21 936 36
Profit before income tax 268 329 255 680 5
Income tax expense (107 207) (82 005) 31
Profit for the year 161 122 173 675 (7)
Attributable to:
Owners of the company 150 220 163 776 (8)
Non-controlling interests 10 902 9 899 10
161 122 173 675 (7)
Earnings per share (cents) 661.6 721.2 (8)
Diluted earnings per share (cents) 657.5 717.7 (8)
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME - AUDITED
R`000 Year ended Year ended
30 June 30 June
2011 2010
Profit for the year 161 122 173 675
Other comprehensive income:
Foreign currency translation adjustments (3 200) (5 075)
Other comprehensive income for the year, net of tax (3 200) (5 075)
Total comprehensive income for the year 157 922 168 600
Total comprehensive income attributable to:
Owners of the company 147 459 158 701
Non-controlling interests 10 463 9 899
157 922 168 600
ADDITIONAL INFORMATION - AUDITED
R`000 Year ended Year ended
30 June 30 June
2011 2010
Net asset value per share (cents) 3 109 2 703
Ordinary shares (`000s):
- In issue 25 190 25 805
- Weighted-average 22 707 22 709
- Diluted weighted-average 22 848 22 821
Capital expenditure 147 042 137 849
Depreciation of property, plant and equipment 55 207 48 002
Amortisation of intangible assets 707 709
Capital commitments 115 191 104 744
Property operating lease commitments 871 817 891 907
Contingent liabilities 97 743 17 910
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION - AUDITED
R`000 30 June 30 June
2011 2010
ASSETS
Non-current assets 551 692 462 763
Property, plant and equipment 509 395 425 293
Intangible assets 31 711 28 149
Deferred income tax assets 10 586 9 321
Current assets 1 584 844 1 398 498
Assets held for sale 659 659
Inventories 788 701 784 445
Trade and other receivables 74 924 71 114
Cash and cash equivalents 720 560 542 280
Total assets 2 136 536 1 861 261
EQUITY AND LIABILITIES
Shareholders` equity 838 118 749 606
Share capital and reserves 783 255 697 466
Non-controlling interests 54 863 52 140
Non-current liabilities 80 196 71 496
Deferred operating lease liability 75 715 67 318
Deferred profit 1 699 1 751
Deferred income tax liability 125 -
Borrowings (non interest-bearing) 2 657 2 427
Current liabilities 1 218 222 1 040 159
Trade and other liabilities 1 179 761 1 018 360
Current income tax liabilities 36 336 19 781
Employee benefits 2 125 2 018
Total equity and liabilities 2 136 536 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 year
- - - - - (5 075) 163 776 9 899 168 600
Dividend paid
- - - - - - (47 466) (1 438) (48 904)
Recognition of share based payments
- - - - 1 676 - - - 1 676
Closing 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 year
- - - - - (2 761) 150 220 10 463 157 922
Dividend paid
- - - - - - (64 488) (7 740) (72 228)
Share buy-back
(6) 6 (49 994) 49 994 - - - - -
Recognition of share based payments
- - - - 2 818 - - - 2 818
Closing balance at 30 June 2011
252 (23) 65 823 (33 692) 4 969 (14 402) 760 328 54 863 838 118
CONDENSED GROUP CASH FLOW STATEMENT - AUDITED
R`000 Year ended Year ended
30 June 30 June
2011 2010
Cash flows from operating activities
Cash generated from operations 464 568 448 595
Interest paid (704) (5 700)
Taxation paid (91 792) (83 947)
Net cash generated from operating activities 372 072 358 948
Cash flows from investing activities
Net investment in assets (146 622) (134 373)
Interest received 29 759 21 936
Net cash used in investing activities (116 863) (112 437)
Cash flows from financing activities
Increase in other borrowings 230 301
Dividends paid
- own equity (64 488) (47 466)
- non controlling interests (7 740) (1 438)
Net cash used in financing activities (71 998) (48 603)
Net increase in cash and cash equivalents 183 211 197 908
Effect of exchange rate movements on cash and
cash equivalents (4 931) (3 758)
Cash and cash equivalents at beginning of year 542 280 348 130
Cash and cash equivalents at end of year 720 560 542 280
CONDENSED GROUP SEGMENTAL ANALYSIS - AUDITED
South Africa
R`000 Year ended Year ended
30 June 30 June
2011 2010
Income statement
Revenue 4 882 594 4 533 300
Operating profit 194 025 195 314
Statement of financial position
Segment assets 1 731 567 1 543 791
Segment liabilities 1 091 717 976 272
Other segment items
Depreciation 49 722 43 447
Amortisation 707 674
Capital expenditure 125 342 131 755
Other members of common monetary area*
R`000 Year ended Year ended
30 June 30 June
2011 2010
Income statement
Revenue 505 390 521 264
Operating profit 33 039 27 653
Statement of financial position
Segment assets 280 092 196 137
Segment liabilities 149 582 75 096
Other segment items
Depreciation 3 537 2 795
Amortisation - -
Capital expenditure 17 122 1 967
Botswana and Malawi
R`000 Year ended Year ended
30 June 30 June
2011 2010
Income statement
Revenue 279 510 314 582
Operating profit 12 210 16 477
Statement of financial position
Segment assets 124 877 121 333
Segment liabilities 57 119 60 287
Other segment items
Depreciation 1 949 1 760
Amortisation - 35
Capital expenditure 4 578 4 127
Group
R`000 Year ended Year ended
30 June 30 June
2011 2010
Income statement
Revenue 5 667 494 5 369 146
Operating profit 239 274 239 444
Statement of financial position
Segment assets 2 136 536 1 861 261
Segment liabilities 1 298 418 1 111 655
Depreciation 55 207 48 002
Amortisation 707 709
Capital expenditure 147 042 137 849
* Includes Namibia, Swaziland and Lesotho
NOTES TO THE CONDENSED GROUP ANNUAL FINANCIAL INFORMATION
1. Basis of preparation. The condensed consolidated financial information
("financial information") announcement is based on the audited financial
statements of the group for the year ended 30 June 2011 which have been prepared
in accordance with International Financial Reporting Standards ("IFRS"), the
Listings Requirements of the JSE and the South African Companies Act (2008) and
consistently applied to the prior year.
The financial statements have been prepared by the Financial Director, Mr AE
Prowse CA(SA) and were approved by the board on 19 September 2011.
2. Independent audit by the auditors. These condensed consolidated 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 (2011:
25 June (52 weeks); 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 year by the weighted average
number of 22 706 987 ordinary shares in issue during the year.(June 2010: 22 709
487 shares).
5. 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 income statement.
The associated transactional costs, including the tax effects of the transaction
are also accounted for.
The financial highlights below should be read in conjunction with this table.
Before % After %
change change
on 2010 on 2010
Operating profit 290 543 21 239 274 0
Attributable earnings 206 489 26 150 220 (8)
Net asset value per
share (cents) 3 333 23 3 109 15
Headline earnings per
share (cents) 916.4 28 668.6 (7)
6. Headline earnings per ordinary share. The calculations of headline earnings
and diluted headline earnings per ordinary share are based on headline earnings
of R151.8 million (June 2010: R162.9 million) and a weighted average of 22 706
987 (June 2010: 22 709 487) and fully diluted of 22 847 567 (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 %
Jun-11 Jun-10 change
Net profit attributable to
the owners of the company 150 220 163 776 (8)
Loss/(profit) on sale of assets
after taxation 1 594 (902)
Headline earnings 151 814 162 874 (7)
Headline earnings per share (cents) 668.6 717.2 (7)
Diluted headline earnings per share (cents) 664.5 713.7 (7)
7. Declaration of dividend. The board has declared a final dividend (No. 37), of
139 cents (June 2010: 127 cents) per ordinary share to all shareholders of
Cashbuild Limited. The dividend per share is calculated based on 25 189 811
(2010: 25 805 347) shares in issue at date of dividend declaration. The total
dividend for the year amounts to 296 cents (2010: 233 cents) a 27% increase year
on year.
Date dividend declared: Monday, 19 September 2011
Last day to trade "CUM" the dividend: Friday, 7 October 2011
Date commence trading "EX" the dividend: Monday, 10 October 2011
Record date: Friday, 14 October 2011
Date of payment: Monday, 17 October 2011
Share certificates may not be dematerialised or rematerialised between Monday,
10 October 2011 and Friday, 14 October 2011, both dates inclusive
On behalf of the board
DONALD MASSON PAT GOLDRICK
Chairman Chief Executive
Johannesburg Date: 19 September 2011
COMMENTARY
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 (191 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 results in accordance with International
Financial Reporting Standards ("IFRS").
FINANCIAL HIGHLIGHTS
Revenue for the year increased by 6% whilst gross profit increased by 10%.
Operating profit showed no growth compared to the prior year. Operating expenses
increased by 13%, largely as result of the BEE transaction. Basic earnings per
share decreased by 8% and headline earnings per share decreased by 7%. Net asset
value per share has shown a 15% increase, from 2 703 cents (June 2010) to 3 109
cents. Cash and cash equivalents increased by 33% to R721 million.
Stores in existence since the beginning of July 2009 (pre-existing stores - 178
stores) accounted for 3% of the increase in revenue with the remaining 3%
increase due to the 13 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 4% (of which 1% is
from the existing store base) is encouraging.
Despite the competitive environment, gross profit percentage margin increased to
22.5% during this year and was 1.0% higher in percentage terms than the 21.5%
achieved for the comparative period of the prior year.
Operational expenses (excluding BEE transaction) for the year remained well
controlled with existing stores accounting for 5% of the increase and new stores
3%. The total increase for the year amounted to 8%. The main contributor to the
increase on existing stores is the people cost component in order to maintain
and improve customer service standards.
The effective tax rate for the year of 40% is 8% higher than that of the
previous year, largely due to the non deductibility of the BEE transaction.
Cashbuild`s statement of financial position remains solid. Stock levels have
increased by 1%. This increase is due mainly to the stocking of five additional
stores since the previous year-end. Overall stockholding at 72 days (June 2010:
72 days) is in line with the stock position as at June 2010. Trade receivables
remain well under control.
During the period, Cashbuild opened five new stores. 14 stores were refurbished
and four store relocated. Three stores (trading in close proximity to other
Cashbuild stores) were closed during the year. Cashbuild will continue its store
expansion, relocation and refurbishment strategy in a controlled manner,
applying the same rigid process as in the past.
During the period Cashbuild Limited made an offer to acquire the non-controlling
shareholders` interest in Cashbuild Swaziland for an amount of R62 million. The
acquisition will only be accounted for when all the suspensive conditions are
met.
PROSPECTS
Management remain positive about the top line trading prospects for the next
quarter. The first nine trading weeks since year-end have reported an increase
in revenue of 8% on that of the comparable nine weeks. This general forecast has
not been reviewed nor audited by the company`s auditors.
Directors: D Masson* (Chairman), PK Goldrick (Chief executive) (Irish),
WF de Jager, A Knock*, Dr DS Lushaba*, AE Prowse, FM Rossouw*, NV Simamane*, SA
Thoresson, A van Onselen
(*non-executive)
Company secretary: Corporate Governance Leaders CC
Registered office: 101 Northern Parkway, Ormonde, Johannesburg 2091.
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: 20/09/2011 07:06:23 Supplied by www.sharenet.co.za
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