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DLV - Dorbyl Limited - Interim group results for the six months ended 30

Release Date: 17/11/2011 16:45
Code(s): DLV
Wrap Text

DLV - Dorbyl Limited - Interim group results for the six months ended 30 September 2011 Dorbyl Limited (Incorporated in the Republic of South Africa) (Registration Number: 1911/001510/06) Share Code: DLV ISIN Code:ZAE000002184 ("the Company" or "the Group") INTERIM GROUP RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2011 Income Statement Unaudited Unaudited 6 months to Audited 6 months to September Year to
September 2010 March 2011 Represented 2011 R`000 R`000 R`000
Continuing operations: Revenue 71 751 72 719 126 959 Cost of sales (82 647) (66 722) (126 209) Gross (loss)/profit (10 896) 5 997 750 Other operating income 888 4 357 6 408 Administrative expenses (10 247) (9 723) (23 880) Sales and distribution expenses (1 848) (1 382) (3 559) Other operating expenses Environmental costs (4 173) - (5 199) Pattern testing costs (7 354) - - Employee benefit liabilities - - (2 381) Operating loss (33 630) (751) (27 861) Net finance income 1 604 2 806 5 604 Finance income 1 711 2 912 5 947 Finance costs (107) (106) (343)
(Loss)/profit before taxation (32 026) 2 055 (22 257) Income tax expense (13) - (4 919) (Loss)/profit after taxation (27 176) from continuing operations (32 039) 2 055 Discontinued operations: Loss from discontinued (2 530) operations, net of taxation - (2 530) Loss for the period (32 039) (475) (29 706) Other comprehensive expense Revaluation of property, plant - 21 771 and equipment 4 173 Other comprehensive income for - 21 771 the period, net of income tax 4 173 Total comprehensive loss for the (475) (7 935) period (27 866) Loss attributable to: Equity holders of the parent (32 039) (475) (29 224) Minority interest - - (482) Loss for the period (32 039) (475) (29 706) Total comprehensive loss attributable to: Equity holders of the parent (27 866) (475) (7 453) Minority interest - - (482) Total comprehensive loss for the (27 866) (475) (7 935) period Loss per share (cents) Basic and diluted loss per share (94.4) (1.4) (86.1) Continuing operations (94.4) 6.1 (78.7) Discontinued operations - (7.5) (7.4) Headline loss reconciliation: Loss for the period (32 039) (475) (29 224) Adjusted for: - 1 242 1 010 Profit on disposal of plant, - (1 288) (1 520) vehicles and equipment Reversal of impairment of assets - (750) (750) Impairment of investment in - 3 280 3 280 equity accounted investees Headline (loss)/earnings (32 039) 767 (28 214) Headline and diluted (94.4) 2.3 (83.2) (loss)/earnings per share (cents) Continuing operations (94.4) 2.3 (83.2) Discontinued operations - - - Dividends paid per ordinary share (cents) Special - 22 November 2010 - - 150.0 R`000 R`000 R`000 Depreciation and amortization (448) (52) (615) Finance income 1 711 2 912 5 947 Interest received 1 558 2 912 5 947 Foreign exchange gains 153 - - Finance cost (107) (106) (343) Interest paid (1) - (117) Foreign exchange losses - - (14) Interest paid - other (106) (106) (212) Balance Sheet Unaudited Unaudited 6 months to Audited 6 months to September Year to September 2010 March
2011 Represented 2011 R`000 R`000 R`000 ASSETS Non-current assets 49 186 - 44 221 Property, plant and equipment 49 186 - 44 221 Current assets 104 091 231 472 136 831 Inventories 24 573 - 25 330 Taxation receivable 47 - 47 Trade and other receivables 34 204 2 929 28 886 Employee benefits 1 503 2 821 1 503 Cash and cash equivalents 43 764 154 680 81 065 Assets classified as held for sale - 71 042 - Total assets 153 277 231 472 181 052 EQUITY AND LIABILITIES Total equity 79 699 166 115 107 565 Equity attributable to equity 79 075 164 805 106 941 holders of the parent Minority interest 624 1 310 624 Non-current liabilities 28 954 27 893 28 954 Preference share capital 3 980 3 980 3 980 Employee benefits 24 974 23 913 24 974 Current liabilities 44 624 37 464 44 533 Trade and other payables 44 616 14 698 44 227 Provisions - 300 300 Taxation payable 8 - 6 Liabilities classified as held for 22 466 - sale - Total equity and liabilities 153 277 231 472 181 052 Assets classified as held for sale Property, plant and equipment - 19 861 - Investment in equity accounted 5 718 - investee - Inventories - 14 460 - Trade and other receivables - 28 659 - Tax receivable - 165 - Cash and cash equivalents - 2 179 - - 71 042 -
Liabilities classified as held for sale Trade and other payables including 22 461 - derivatives - Taxation payable - 5 - - 22 466 - Capital commitments authorised - - - Authorised and contracted for - - - Authorised but not contracted for - - - Operating lease commitments 1 349 5 593 3 373 Operating lease receivables 842 3 228 2 049 Investments in equity accounted 5 718 - investee - prior year classified - as held for sale Net asset value per share (cents) 233 486 315 Acquisition of property, plant and equipment Expansion 1 240 3 194 6 134 Replacement 4 101 - 3 752
Ordinary shares (000) Issued - net of treasury shares 33 924 33 924 33 924 Weighted average number of shares 33 924 33 924 - net of treasury shares 33 924 Cash Flow Statement Unaudited Unaudited 6 months to Audited
6 months to September Year to September 2010 March 2011 Represented 2011 R`000 R`000 R`000
Cash utilised by operations (43 266) (11 328) (36 260) Loss for the period (32 039) (475) (29 706) Adjusted for: Depreciation 448 52 615 Reversal of impairment on (750) (750) property, plant and equipment Impairment losses on investment 3 280 3 280 in associate - Net interest income (1 451) (2 806) (5 618) Gain on sale of property, plant (1 288) (1 520) and equipment - Income tax expense 13 - 4 919 (33 029) (1 987) (28 780) Change in inventories 757 (897) (11 767) Change in trade and other (1 706) 6 643 receivables (10 965) Change in trade and other (6 632) 510 payables 389 Change in provisions and employee - 2 381 benefits (300) Cash utilised by operating (11 222) (31 013) activities (43 148) Interest expense (107) (106) (329) Income taxes paid (11) - (4 918) Cash flows from investing 122 067 122 091 activities 5 965 Interest income 1 558 2 912 5 947 Proceeds on disposal of property, 77 588 77 608 plant and equipment - Acquisition of property, plant (3 194) (6 134) and equipment (1 240) Disposal of discontinued 43 641 43 479 operations, net of cash disposed 5 647 of Changes in advances made to 1 120 1 191 associate - Cash flows from financing - (50 886) activities - Dividends paid - - (50 886) Net change in cash and cash 110 739 34 945 equivalents (37 301) Cash and cash equivalents at 42 083 42 083 beginning of period 81 065 Classified as held for sale at 4 037 4 037 beginning of period - Classified as held for sale - (2 179) - Cash and cash equivalents at end 43 764 154 680 81 065 of period Statement of changes in equity Stated Reserves Equity Minority capital Retained holders of interest Total earnings the parent equity R`000 R`000 R`000 R`000 R`000 R`000
Balance at 1 11 248 74 466 165 280 1 310 April 2010 79 566 166 590 Total comprehensive loss for the period Loss for the - - (475) - period (475) (475) Total other - (69 716) - - comprehensive 69 716 - income Transfer of - (69 716) - - revaluation reserve on sale 69 716 - of property Balance 30 11 248 4 750 164 805 1 310 September 2010 148 807 166 115 Total comprehensive loss for the period Loss for the - - (28 749) (482) period (28 (29 749) 231)
Total other - 21 021 21 771 - comprehensive 750 21 771 income Revaluation of - 21 771 21 771 - property, plant - 21 771 and equipment Transfer of - (750) - - revaluation 750 - reserve on sale of property Transactions with - - (50 886) (204) owners, recorded (50 (51 directly in 886) 090) equity Dividends to - - (50 886) (204) shareholders (50 (204) 886) Disposal of - - - (204) minority interest - (204) Stated Reserves Equity Minority
capital holders interest Total Retaine of the equity d parent earning
s R`000 R`000 R`000 R`000 R`000 R`000 Balance at 31 11 248 25 771 69 922 106 941 624 March 2011 107 565 Total comprehensive loss for the period Loss for the - - (32 (32 039) - period 039) (32 039) Total other - 3 934 239 4 173 - comprehensive 4 173 income Revaluation of - 4 173 - 4 173 - property, plant 4 173 and equipment Depreciation on - (239) 239 - - revaluation of - property Balance 30 11 248 29 705 38 122 79 075 624 September 2011 79 699 REVIEW OF OPERATIONS AND INTERIM GROUP RESULTS The results for the period under review were unsatisfactory and disappointing. The adverse gross margin of R10,9m is mainly attributable to an unfavourable stock variance, disruptions in production and consequent excessive overtime due to strike actions, the costs of new pattern testing as noted below and a national shortage of bentonite (a key input in the castings process). The protracted strike occurred at a critical stage of supply of new products to new customers. The need to meet the company`s obligation for reliable delivery and quality necessitated extended overtime amounting to R6,2m. The stock take at 30 September 2011 revealed an unexpected adverse stock variance of 500 tons of produced goods to a value of R5,4m. Management, together with the internal auditors are investigating the reasons and causes of the variance, including the possibility of theft. During the period under review, 106 new patterns compared to a norm of 3 to 4 per month were requested, made and delivered, highlighting the success of the drive to broaden the product and customer base. New patterns demand extensive management time and testing on the production line, representing an investment for the future viability of the business. The research and development costs and the cost of lost time for normal production as a result of this process amount to some R7,4m. Prospects/The future of Guestro Despite the setbacks described above, the board continues to believe that, amongst the options available to the company, the strategy adopted to reconfigure the product and customer base holds the greatest prospect for preserving value for shareholders in the medium term. The turn-around, which envisages a broader customer base, requiring quality products, capable of efficient manufacture at high utilisation of existing capacity, is underway and is closely monitored. Net asset value as at 30 September 2011 The net asset value per share as at 30 September 2011 at 233 cents per share is 82 cents lower than the 315 cents per share as at 31 March 2011. The net asset value is mainly attributable to cash, Guestro Castings, the Benoni Property, Corporate Head Office less the historical employee benefit liabilities. The net asset value at 30 September 2011 can be summarised as follows: Benoni property R40, 6 million or 120 cents per share Casting business R32, 2 million or 95 cents per share Cash R43, 8 million or 129 cents per share Less: Net employee fund liabilities R23, 4 million or -69 cents per share Other net corporate liabilities R14, 1 million or -42 cents per share Total net asset value R79, 1 million The net asset value does not consider the possible impact of Secondary Tax on Companies (STC). Due to the assessed tax losses and capital losses within the relevant corporate entities, the Group is not expected to pay Income Tax or Capital Gains Tax in the foreseeable future. Segmental reporting The primary segment during the period was general engineering. In terms of the geographical segment, general engineering is considered to be a South African operation. Due to the fact that the whole business is considered as one segment, no segmental reporting has been provided. Subsequent events There have been no matters which are material to the financial affairs of the Company or the Group that have occurred between the balance sheet date and the date of the approval of the interim results. Basis of preparation The results for the six months ended 30 September 2011 have been prepared in accordance with International Financial Reporting Standards (IFRS), IAS 34 - Interim Financial Reporting, the AC 500 Standards, the Companies Act and the Listings Requirements of the JSE Limited. The accounting policies are consistent with those applied in the prior comparative period. The preparation of the group`s consolidated results for the six months ended 30 September 2011, was supervised by BD Bhikha, the Financial Director. Directorate Mr BP Wood, the Financial Director, resigned from the Board effective 30 June 2011 in order to take up a position in his home town of Port Elizabeth. Mr BD Bhikha was appointed as Financial Director in an interim position effective 29 August 2011. Dividend No ordinary dividend has been declared in respect of the period under review. On behalf of the board JB Magwaza (Chairman) RF Rohrs (Chief Executive) 17 November 2011 Registered Office: 13 Lincoln Road, Industrial Sites, Benoni South, 1501 Transfer Secretaries: Computershare Investor Services (Pty) Ltd 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) Company Secretary: BD Bhikha Sponsor: PSG Capital (Pty) Ltd Auditors: KPMG Inc Directors: JB Magwaza (Chairman)***, RF Rohrs (Chief Executive)*, BD Bhikha (Financial Director)*, JW Dreyer**, PM Bester***, TA Morkel*** *Executive director **Non-executive director ***Independent Non-executive director Date: 17/11/2011 16:45:01 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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