To view the PDF file, sign up for a MySharenet subscription.

RBX - Raubex Group Limited - Unaudited interim results for the six months ended

Release Date: 07/11/2011 07:15
Code(s): RBX
Wrap Text

RBX - Raubex Group Limited - Unaudited interim results for the six months ended 31 August 2011 Raubex Group Limited (Incorporated in the Republic of South Africa) Registration number 2006/023666/06 Share Code: RBX ISIN Code: ZAE000093183 ("Raubex" or the "Group") UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2011 - Revenues up 3,7% to R2,61 billion (H1 2011: R2,52 billion) - Operating profit down 31,4% to R282 million (H1 2011: R411,2 million) - HEPS down 37,1% to 92,9 cents per share (H1 2011: 147,6 cents per share) - Cash flow from operations down 34,8% to R263,3 million (H1 2011: R403,8 million) - Capex spend of R88,3 million ( H1 2011: R119,7 million) - Stable order book of R4,6 billion (H1 2011: R4,7 billion) - Interim dividend of 25 cents per share "We have delivered a satisfactory performance for the six month period given the extremely difficult and highly competitive market in which the Group is currently operating. "Our revenues have grown and we have maintained a stable order book supported by a good performance from the materials division. Although anticipated, the decrease in operating profit and cash flows was compounded by the bitumen supply problems and delays on certain provincial work. "Whilst the long-term outlook for the South African road construction remains positive, we will continue to monitor the effects of the tolling controversy on the Group and on our clients closely whilst growing our portfolio of African projects. "We are confident that the Group will maintain a healthy financial position and stable order book of profitable work for the remainder of the year." Francois Diedrechsen, Financial and Commercial Director of Raubex Group 7 November 2011 ENQUIRIES Raubex Group +27 (0) 12 665 3226 Francois Diedrechsen College Hill +27 (0) 11 447 3030 Frederic Cornet +27 (0) 83 307 8286 Lexi Ball +27 (0) 82 815 1821 GROUP INCOME STATEMENT Unaudited Unaudited Audited
6 months 6 months 12 months 31 August 31 August 28 February 2011 2010 2011 R`000 R`000 R`000
Revenue 2 609 998 2 516 208 4 545 974 Cost of sales (2 206 542) (1 981 992) (3 645 552) Gross profit 403 456 534 216 900 422 Other income 7 572 20 355 27 665 Other gains/(losses) - net (443) (19 555) (18 934) Administrative expenses (128 533) (123 787) (246 595) Operating profit 282 052 411 229 662 558 Finance income 13 986 16 569 30 422 Finance costs (18 647) (23 781) (43 875) Profit before income tax 277 391 404 017 649 105 Income tax expense (100 647) (128 161) (202 096)
Profit for the period 176 744 275 856 447 009 Profit for the period attributable to: Owners of the parent 173 496 273 037 443 405 Non-controlling interest 3 248 2 819 3 604 Basic earnings per share 94,0 148,0 241,5 (cents) Diluted earnings per share 93,6 148,0 240,3 (cents) GROUP STATEMENT OF COMPREHENSIVE INCOME Unaudited Unaudited Audited 6 months 6 months 12 months
31 August 31 August 28 February 2011 2010 2011 R`000 R`000 R`000
Profit for the period 176 744 275 856 447 009 Other comprehensive income for the period, net of tax Currency translation 326 (1 203) (1 279) differences Total comprehensive income for 177 070 274 653 445 730 the period Comprehensive income for the period attributable to: Owners of the parent 173 822 271 834 442 126 Non-controlling interest 3 248 2 819 3 604 Total comprehensive income for 177 070 274 653 445 730 the period CALCULATION OF DILUTED EARNINGS PER SHARE Unaudited Unaudited Audited 6 months 6 months 12 months
31 August 31 August 28 February 2011 2010 2011 R`000 R`000 R`000 Profit attributable to equity 173 496 273 037 443 405 holders of the parent entity Weighted average number of 184 536 184 536 183 572 ordinary shares in issue (`000) Adjustments for: Shares deemed issued for no 848 - - consideration (`000) Contingently issuable shares - - 964 (`000) Weighted average number of 185 384 184 536 184 536 ordinary shares for diluted earnings per share (`000) Diluted earnings per share 93,6 148,0 240,3 (cents) CALCULATION OF HEADLINE EARNINGS PER SHARE Unaudited Unaudited Audited 6 months 6 months 12 months
31 August 31 August 28 February 2011 2010 2011 R`000 R`000 R`000 Profit attributable to equity 173 496 273 037 443 405 holders of the parent entity Adjustments for: Profit on sale of plant and (2 843) (858) (3 313) equipment Total tax effect of adjustments 796 240 928 Basic headline earnings 171 449 272 419 441 020 Weighted average number of 184 536 184 536 183 572 shares (`000) Headline earnings per share 92,9 147,6 240,2 (cents) Diluted headline earnings per 92,5 147,6 239,0 share (cents) GROUP STATEMENT OF FINANCIAL POSITION Unaudited Unaudited Audited 6 months 6 months 12 months 31 August 31 August 28 February
2011 2010 2011 R`000 R`000 R`000 ASSETS Non-current assets Property, plant and equipment 1 294 874 1 236 262 1 276 133 Intangible assets 760 046 762 626 761 445 Deferred income tax assets 39 681 34 401 45 047 Trade and other receivables 520 639 585 Total non-current assets 2 095 121 2 033 928 2 083 210 Current assets Inventories 152 891 115 508 126 333 Construction contracts in 310 212 244 994 244 116 progress and retentions Trade and other receivables 1 115 359 1 045 021 948 367 Current income tax receivable 19 028 14 434 14 192 Cash and cash equivalents 479 028 473 926 594 914 Total current assets 2 076 518 1 893 883 1 927 922 Total assets 4 171 639 3 927 811 4 011 132 EQUITY Share capital 1 845 1 845 1 845 Share premium 2 179 613 2 179 613 2 179 613 Other reserves (1 147 722) (1 156 772) (1 156 847) Retained earnings 1 558 738 1 399 409 1 510 726 Equity attributable to equity 2 592 474 2 424 095 2 535 337 holders of the parent Non-controlling interest 10 212 8 819 9 276 Total equity 2 602 686 2 432 914 2 544 613 LIABILITIES Non-current liabilities Borrowings 215 168 215 805 231 905 Provisions for liabilities and 15 420 13 614 18 058 charges Deferred income tax liabilities 261 368 222 356 236 038 Total non-current liabilities 491 956 451 775 486 001 Current liabilities Trade and other payables 838 394 707 980 712 789 Borrowings 220 645 252 143 245 654 Current income tax liabilities 13 751 72 752 17 498 Provisions for other liabilities 4 207 10 247 4 577 and charges Total current liabilities 1 076 997 1 043 122 980 518 Total liabilities 1 568 953 1 494 897 1 466 519 Total equity and liabilities 4 171 639 3 927 811 4 011 132 GROUP STATEMENT OF CASH FLOWS Unaudited Unaudited Audited 6 months 6 months 12 months
31 August 31 August 28 February 2011 2010 2011 R`000 R`000 R`000 Cash flows from operating activities Cash generated from operations 263 269 403 840 853 013 Finance income 13 986 16 569 30 422 Finance costs (18 647) (23 781) (43 875) Dividend received 2 552 3 107 5 476 Income tax paid (87 013) (114 105) (241 159) Net cash generated from 174 147 285 630 603 877 operating activities Cash flows from investing activities Purchases of property, plant and (88 274) (119 725) (292 490) equipment Proceeds from sale of property, 13 454 15 949 42 110 plant and equipment Acquisition of subsidiaries (7 760) - 141 Repayment of loan from associate - - (750) Net cash used in investing (82 580) (103 776) (250 989) activities Cash flows from financing activities Proceeds from borrowings 66 438 102 049 246 699 Repayment of borrowings (146 095) (167 678) (302 722) Dividends paid to owners of the (125 484) (136 968) (196 019) parent Dividends paid to non- (2 312) - (601) controlling interests Net cash used in financing (207 453) (202 597) (252 643) activities Net (decrease)/increase in cash (115 886) (20 743) 100 245 and cash equivalents Cash and cash equivalents at the 594 914 494 669 494 669 beginning of the year Cash and cash equivalents at the 479 028 473 926 594 914 end of the period GROUP STATEMENT OF CHANGES IN EQUITY Share Share Other
capital premium reserves R`000 R`000 R`000 Balance at 1 March 2010 1 826 2 139 632 (1 139 446) Shares issued 19 39 981 - Share option reserve - - (16 123) Non-controlling interest on - - - acquisition of subsidiary Total comprehensive income for - - (1 203) the period Dividends paid - - - Balance at 31 August 2010 1 845 2 179 613 (1 156 772) Shares issued - - - Non-controlling interest on - - - acquisition of subsidiary Total comprehensive income for - - (75) the Period Dividends paid - - - Balance at 28 February 2011 1 845 2 179 613 (1 156 847) Share option reserve - - 8 799 Total comprehensive income for - - 326 the period Dividends paid - - - Balance at 31 August 2011 1 845 2 179 613 (1 147 722) GROUP STATEMENT OF CHANGES IN EQUITY (continued) Retained Total attri-Non- Total earnings butable to controlling equity equity interest
holders of the parent company R`000 R`000 R`000 R`000
Balance at 1 March 1 263 340 2 265 352 4 344 2 269 696 2010 Shares issued - 40 000 - 40 000 Share option reserve - (16 123) - (16 123) Non-controlling - - 1 656 1 656 interest on acquisition of subsidiary Total comprehensive 273 037 271 834 2 819 274 653 income for the period Dividends paid (136 968) (136 968) - (136 968) Balance at 31 August 1 399 409 2 424 095 8 819 2 432 914 2010 Shares issued - - 70 70 Non-controlling - - 202 202 interest on acquisition of subsidiary Total comprehensive 170 368 170 293 786 171 079 income for the period Dividends paid (59 051) (59 051) (601) (59 652) Balance at 28 February 1 510 726 2 535 337 9 276 2 544 613 2011 Share option reserve - 8 799 - 8 799 Total comprehensive 173 496 173 822 3 248 177 070 income for the period Dividends paid (125 484) (125 484) (2 312) (127 796) Balance at 31 August 1 558 738 2 592 474 10 212 2 602 686 2011 GROUP SEGMENTAL ANALYSIS Aggregate Road Road Consolidated and surfacing construction
crusher and and rehabili- earthworks tation R`000 R`000 R`000 R`000
Reportable segments At 31 August 2011 Segment revenue - 696 510 1 337 594 575 894 2 609 998 external Segment result 126 076 130 938 25 038 282 052 (operating profit) At 31 August 2010 Segment revenue - 517 662 1 294 267 704 279 2 516 208 external Segment result 102 745 202 125 106 359 411 229 (operating profit) At 28 February 2011 Segment revenue - 1 040 147 2 178 339 1 327 488 4 545 974 external Segment result 178 203 300 187 184 168 662 558 (operating profit) Local Inter- Consolidated national R`000 R`000 R`000
Geographical information At 31 August 2011 Segment revenue - external 2 196 068 413 930 2 609 998 Segment result (operating profit) 245 630 36 422 282 052 At 31 August 2010 Segment revenue - external 2 234 103 282 105 2 516 208 Segment result (operating profit) 392 512 18 717 411 229 At 28 February 2011 Segment revenue - external 3 932 876 613 098 4 545 974 Segment result (operating profit) 583 669 78 889 662 558 Additional information EMPLOYEE BENEFIT EXPENSE Unaudited Unaudited Audited 6 months 6 months 12 months 31 August 31 August 28 February 2011 2010 2011
R`000 R`000 R`000 Employee benefit expense in the income statement consists of: - Salaries, wages and contributions 529 334 474 780 893 407 - Share options granted to employees 8 799 1 411 (5 280) Total employee benefit expense 538 133 476 191 888 127 CAPITAL EXPENDITURE AND DEPRECIATION Unaudited Unaudited Audited 6 months 6 months 12 months 31 August 31 August 28 February 2011 2010 2011
R`000 R`000 R`000 Capital expenditure for the period 88 274 119 725 292 490 Depreciation for the period 110 134 111 091 220 184 Amortisation of intangible assets 1 398 1 198 2 380 for the period NOTES Basis of preparation These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"), IAS 34: "Interim Financial Reporting", the South African Companies Act 71 of 2008, as amended, and the JSE Listings Requirements. The principal accounting policies used in the preparation of the unaudited results for the period ended 31 August 2011 are consistent with those applied for the year ended 28 February 2011 and for the unaudited results for the six months ended 31 August 2010 in terms of IFRS. Business combinations Burma Plant Hire (Pty) Ltd On 1 July 2011, the Group acquired 51% of the share capital and related sale claims of Burma Plant Hire (Pty) Ltd for R4,04 million cash. The acquired company specialises in plant hire to the broader construction industry. Contingencies On 29 April 2011, shareholders were advised that the Group had become aware of certain irregularities in terms of the provisions of the Competition Act, No 89 of 1998. The transgressions were not covered by leniency under the Corporate Leniency Provision of the Act. The Group filed a Fast Track application to the Competition Commission by the required deadline date of 15 April 2011. The Competition Commission is currently in the process of assessing this submission and the Group remains committed to fully co-operate with the Commission and to ensure that its employees, management and directors do not engage in any conduct which constitutes a prohibited practice. No provision for penalties has been made in the results for the period ended 31 August 2011. Events after the reporting period There were no material events after the reporting period to report up to the date of preparation of these Group financial statements. COMMENTARY FINANCIAL OVERVIEW Revenue increased 3,7% to R2,61 billion whilst operating profit decreased 31,4% to R282 million from the corresponding prior period as a result of the declining margins and extremely competitive conditions being experienced in the road construction industry. Profit before tax decreased 31,3% to R277,4 million. The effective tax rate increased to 36,3% from 31,7% in the corresponding prior period due to the reversal of a previously recognised deferred tax asset arising from the Group`s share incentive scheme. Earnings per share decreased 36,5% to 94 cents with headline earnings per share decreasing 37,1% to 92,9 cents. Group operating margin decreased 33,7% from 16,3% to 10,8% compared to the corresponding prior period. The Group generated operating cash flows of R263,3 million before finance charges and taxation. Trade and other receivables increased by 6,7% to R1,11 billion due to payment delays from the Free State Provincial Government which continue to have a negative impact on the Group`s working capital as well as an increasing number of public and private customers settling outside of standard terms. Capital expenditure on fixed assets to the value of R88,3 million was incurred during the period under review. Net cash outflow for the six months ended 31 August 2011 was R115,9 million, with total cash and cash equivalents at the end of the period amounting to R479 million. OPERATIONAL REVIEW Roadmac Roadmac is a specialist in light road rehabilitation, the manufacturing and the laying of asphalt, chip and spray, surface dressing, enrichments and slurry seals. Roadmac is the largest contributor to Group revenue, contributing 51,3% of total revenue. The divisional performance continues to be impacted by strong competition in the light rehabilitation market with the resulting decrease in margins being reflected in the results for the period. The division has been operating near capacity and has maintained a healthy order book with new work being secured at the prevailing lower margins. A short supply of bitumen in the country has had a negative effect on asphalt production and surfacing operations as sites struggle to achieve efficiencies due to the erratic supply of this key product. Revenue for the division increased 3,4% to R1,34 billion (H1 2011: R1,29 billion) and operating profit decreased 35,2% to R130,9 million (H1 2011: R202,1 million) as the increased revenues were offset by the lower operating margins of the current contracts. The divisional operating margins decreased to 9,8% (H1 2011: 15,6%), with margin pressure expected to continue in the second half of the year. The division incurred capital expenditure of R22,6 million during the period (H1 2011: R29,7 million). Raubex Construction Raubex Construction is a road and civil infrastructure construction company focused on the key areas of new road construction (greenfields) and heavy road rehabilitation. This division has been affected the most by the pricing pressures of the current operating environment. A stable order book has been maintained while management has adopted a cautious approach to tendering for new work at the current low margins. Revenue for the division decreased 18,2% to R575,9 million (H1 2011: R704,3 million) whilst operating profit decreased 76,5% to R25 million (H1 2011: R106,4 million). The divisional margins decreased to 4,3% (H1 2011: 15,1%), as the lower margin work secured in the current operating environment is realised. A cautious revenue recognition policy has been applied to certain Free State provincial contracts until clarity is obtained regarding the outcome of this work. The division incurred capital expenditure of R16,2 million during the period (H1 2011: R28 million). Raumix Raumix is the materials division of the Group with its core focus spread over three areas, including contract crushing, production of aggregates for the commercial market and materials handling for the mining industry. Commercial quarry operations have reported stable results for the period, supported by infrastructure projects in the Free State and Eastern Cape regions and encouraging results from the Gauteng area, despite the residential building market remaining depressed. Contract crushing operations have maintained a stable order book and continue to perform well despite pressure on margins. Whilst the plants have been operating at capacity during the period, new contracts will need to be secured before year-end to maintain the current operating efficiencies. There has been a noticeable improvement in the mining and material handling operations of the division with increased tonnages being reported and new contracts having been secured. The diamond mining activities of B&E International are particularly encouraging with two new contracts recently secured with Namdeb in Namibia and ongoing operations at Mbada in Zimbabwe. Increased activity has also been reported by SPH Kundalila in South Africa, with a contract recently secured at a new platinum mine in the Pilanesberg area of the North West province and an iron ore screening contract secured at Thabazimbi in the Limpopo province. Revenue for the division increased 34,6% to R696,5 million (H1 2011: R517,7 million) and operating profit by 22,7% to R126,1 million (H1 2011: R102,7 million). The divisional margins decreased to 18,1% (H1 2011: 19,8%). The division incurred capital expenditure of R49,5 million during the period (H1 2011: R62 million). International Internationally, revenue increased 46,7% to R413,9 million (H1 2011: R282,1 million) and operating profit by 94,6% to R36,4 million (H1 2011: R18,7 million). The international margins increased to 8,8% (H1 2011: 6,6%). The road contracts in the north of Namibia continue to progress well, while a cautious approach to tendering in Zambia has been maintained with careful consideration given to currency and funding risks. The Group`s results from international operations were supplemented by the improvement in mining activities of B&E International. PROSPECTS In the short term, trading conditions in the road construction industry will be challenging and the impact of margin pressure will continue to be felt during the remainder of the financial year and into 2013. The Group has adopted a cautious approach to tendering for new work at the prevailing low margins and has maintained a stable order book of R4,6 billion (H1 2011: R4,7 billion). The improvement in mining activities will continue to benefit the material handling and screening operations of B&E International and SPH Kundalila over the short and medium term. Whilst management remains optimistic with respect to the long-term outlook for the South African road construction industry, government policy towards future toll roads in South Africa remains uncertain. This uncertainty and potential delays in the award of future toll concessions, including the N1/N2 Winelands project, could retard the industry`s recovery. With this in mind, the Group continues to look for growth in other geographies and valuable experience is being gained around the tendering processes in the promising Indian roads sector, whilst the Group`s African expansion drive remains a priority. Despite the current market conditions, the Group has been able to maintain a healthy balance sheet and strong cash position together with a stable order book of profitable work. This, combined with Raubex`s considerable industry experience across its management team, sets the Group on a strong footing to navigate the challenging period ahead. DIVIDEND DECLARATION The directors have declared an interim cash dividend of 25 cents per share on 7 November 2011. The salient dates for the payment of the dividend are as follows: Last day to trade cum dividend Friday, 25 November 2011 Commence trading ex dividend Monday, 28 November 2011 Record date Friday, 2 December 2011 Payment date Monday, 5 December 2011 No share certificates may be dematerialised or rematerialised between Monday, 28 November 2011, and Friday, 2 December 2011, both dates inclusive. On behalf of the Board: MC Matjila Chairman RJ Fourie Chief Executive Officer F Diedrechsen Group Financial and Commercial Director 7 November 2011 Directors: MC Matjila (Chairman)# , JE Raubenheimer#, RJ Fourie, F Diedrechsen, F Kenney#, L Maxwell* BH Kent*, NF Msiza*# Non-executive * Independent non- executive Company secretary: Mrs HE Ernst Registered office: The Highgrove Office Park Building No 1 Tegel Avenue Centurion South Africa Transfer secretaries: Computershare Investor Services (Pty) Ltd 70 Marshall Street Johannesburg 2001 South Africa Auditors: PricewaterhouseCoopers Inc. Sponsor: Investec Bank Limited www.raubex.co.za Date: 07/11/2011 07:15:32 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.

Share This Story