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ELR/ELRP - ELB Group Limited - Unaudited group interim report and interim cash
dividend declarations for the six months ended 31 December 2011
ELB GROUP LIMITED
Incorporated in the Republic of South Africa
Registration number 1930/002553/06
Share codes: ELR & ELRP
ISIN: ZAE000035101 & ZAE000035333
(`ELB`, `the Company` or `the Group`)
UNAUDITED GROUP INTERIM REPORT AND INTERIM CASH DIVIDEND DECLARATIONS FOR THE
SIX MONTHS ENDED 31 DECEMBER 2011
COMMENTS
INTRODUCTION
The ELB Group is a total solutions provider to the mining, minerals, power,
port, construction and industrial sectors in the field of materials handling
and appropriate process plants. This is achieved through ELB generated
innovation and the supply with world class partners of equipment and
technology. The Group operates in Africa and Australasia.
FINANCIAL RESULTS
The 8,3 percent increase in turnover for the period from R792,6 million in
2010 to R858,6 million in 2011 reflects the improved activity level across
the full range of products and services offered by ELB.
Attributable comprehensive income for the period was R29,1 million (2010 -
R36,3 million), a decrease of 19,9 percent. Headline Earnings for the period
of R13,4 million (2010 - R34,9 million) represents a decrease of 61,5 percent.
There is no consistent correlation between turnover and profit in accounting
periods.
The ELB Group will from time to time experience volatility in headline
earnings particularly during periods of significant exchange rate
fluctuations. These fluctuations give rise to unrealised profits or losses
which experience has shown usually reverse or are recovered in the eventual
sale price of the relevant equipment.
The NAV per share increased by 5,0 percent from 1 550 cents per share at 30
June 2011 to 1 627 cents per share at 31 December 2011.
OPERATIONS
Africa
Though equipment sales during the period remained at acceptable levels, gross
margins were reduced with the sudden depreciation of the Rand.
The project work on hand is at a satisfactory level including projects
predominantly in South Africa, Mozambique, Zambia, Angola, Ghana, Sierra Leone
and the DRC.
The Group continues on an ongoing basis to add suitable technology partners to
its portfolio.
The Service Centre upgrade programme is now complete with Service Centres
located in all the major centres in which we operate namely Boksburg, Durban,
Cape Town, Kathu, George, Kimberley, Wolmaranstad, Brits and Middelburg.
Australasia
Ditch Witch has also traded at acceptable levels for the period across both
the Ditch Witch and Komptech ranges of equipment.
Good progress has been made with the development of the new Head
Office/Service Centre on the outskirts of Sydney and which is now due for
occupation by June 2012. This will enable Ditch Witch to better service the
growing demand for its Ditch Witch and Komptech range of products.
Ditch Witch in New Zealand has commenced trading with good prospects.
CASH'FLOW
Cash flow management remains a high priority for the Group.
ELB works closely with bankers, suppliers and customers to ensure we continue
to retain a strong balance sheet at all times.
PROSPECTS
ELB is well positioned to take advantage of a number of potential projects
currently being considered in Africa.
BOARD OF DIRECTORS
There was no change to the board of directors during the period.
DIVIDENDS
It has been decided to declare an interim dividend of 18 cents (2010 - 15
cents) per ordinary share which represents an increase of 20 per cent.
ACCOUNTING POLICIES
The Group has early adopted the inter linked suite of International Financial
Reporting Standards:
IFRS 10 - Consolidated Financial Statements,
IFRS 11 - Joint Arrangements and
IFRS 12 - Disclosure of Interests in Other Entities.
The amended and comprehensive definition of control in IFRS 10 has resulted in
the full consolidation of four of the five joint ventures within the Group
with effect from 1 July 2011. The remaining joint venture has been equity
accounted from 1 July 2011 in accordance with IFRS 11. The joint ventures were
previously proportionately consolidated. The change in accounting policy did
not result in any change in ordinary shareholders equity; or the net asset
value per ordinary share; or in the reported profit attributable to ordinary
shareholders. Comparative amounts for the previous periods have been restated.
Apart from this change the accounting policies are consistent with those
applied in the financial year ended 30 June 2011. Accounting policies also
accord with International Financial Reporting Standards (IFRS). The unaudited
interim financial statements have been prepared in accordance with
International Accounting Standard (IAS) 34: Interim Financial Reporting.
The interim financial statements also comply with the South African Companies
Act.
On behalf of the Board
Boksburg
19 March 2012
GROUP BALANCE SHEET
Unaudited Unaudited Restated
31 Dec 11 31 Dec 10 30 Jun 11
R000 R000 R000
ASSETS
Non current assets 158 867 98 148 127 870
Property, plant and equipment 129 674 73 329 96 113
Equity accounted joint venture 6 898 5 775 5 780
Non current loan receivable 3 150 3 951 4 922
Deferred income tax assets 19 145 15 093 21 055
Current assets 1 327 334 990 182 1 213 087
Inventories and construction contract 562 350 331 887 415 953
work not yet billed
Receivables and other current assets 141 303 116 955 159 319
Income tax refundable 14 905 6 375 5 191
Cash and cash equivalents 608 776 534 965 632 624
Total assets 1 486 201 1 088 330 1 340 957
EQUITY AND LIABILITIES
Equity attributable to ordinary 408 939 353 373 388 394
shareholders of ELB
Issued capital 25 192 25 192 25 192
Treasury shares (55 182) (54 939) (56 129)
Reserves 33 869 19 759 18 501
Retained earnings 405 060 363 361 400 830
Preference shares 8 8 8
Total equity attributable to equity 408 947 353 381 388 402
holders of ELB
Non controlling interests in 71 970 54 907 61 530
consolidated entities
Total equity 480 917 408 288 449 932
Non current liabilities 19 766 19 153 27 222
Interest bearing borrowings 14 574 8 639 20 622
Provision for trade back commitments 3 574 9 309 5 144
Deferred income tax liabilities 1 618 1 205 1 456
Current liabilities 985 518 660 889 863 803
Non interest bearing payables and 711 771 550 177 697 585
other current liabilities
Interest bearing payables 266 862 108 568 162 710
Income tax payable 1 461 2 144 3 508
Bank borrowings 5 424 - -
Total equity and liabilities 1 486 201 1 088 330 1 340 957
Ordinary shares in issue (000`s) 33 860 33 860 33 860
Deduct: Treasury shares in issue 8 731 9 094 8 801
(000`s)
Ordinary shares in issue on which net 25 129 24 766 25 059
asset value per ordinary share is
calculated
Net asset value per ordinary share 1 627 1 427 1 550
(cents)
GROUP INCOME STATEMENT
Unaudited Unaudited Restated
Six months Six months Year
ended ended ended
31 Dec 11 31 Dec 10 30 June 11
R000 R000 R000
Sales 858 600 792 554 1 369 348
Operating costs excluding (829 574) (725 746) (1 252 281)
depreciation
Operating profit before depreciation 29 026 66 808 117 067
Depreciation (4 611) (2 898) (6 165)
Profit from operations before 24 415 63 910 110 902
abnormal item
Abnormal item
Equity settled share options expense (655) (7 065) (8 212)
Profit from operations 23 760 56 845 102 690
Finance income 12 701 9 975 25 574
Finance expenses (5 599) (3 745) (6 334)
Equity accounted share of 936 (529) (730)
profit/(loss) of joint venture
Profit before income tax 31 798 62 546 121 200
Income tax expense (12 164) (19 248) (39 330)
Profit for the period 19 634 43 298 81 870
Profit for the period attributable
to:
Ordinary shareholders of ELB 14 262 34 742 67 202
Non controlling interests in 5 372 8 556 14 668
consolidated entities
19 634 43 298 81 870
CALCULATION OF GROUP HEADLINE EARNINGS
Unaudited Unaudited Restated
Six months Six months Year
ended ended ended
31 Dec 11 31 Dec 10 30 June 11
R000 R000 R000
Profit attributable to ordinary
shareholders
of ELB from the income statement 14 262 34 742 67 202
Deduct: Items excluded from headline 837 (119) (148)
earnings as detailed below:
Plant and equipment:
Profit on disposal 383 342 314
Fair value adjustment
(equity accounted share) 982 (489) (504)
Income tax effect of items excluded (382) 36 48
from headline earnings
Non controlling interests in items (146) (8) (6)
excluded from headline earnings
Headline earnings 13 425 34 861 67 350
Weighted average number of ordinary 25 079 24 755 24 845
shares (excluding treasury shares) on
which basic earnings per ordinary
share are based (000`s)
Earnings per ordinary share (cents)
- basic 56,9 140,3 270,5
- diluted 55,1 140,0 267,3
Headline earnings per ordinary share
(cents)
- basic 53,5 140,8 271,1
- diluted 51,9 140,5 267,9
Dividends declared for the period per 18 15 55
ordinary share (cents)
GROUP STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Restated
Six months Six months Year
ended ended ended
31 Dec 11 31 Dec 10 30 June 11
R000 R000 R000
Profit for the period from the income 19 634 43 298 81 870
statement
Other comprehensive income 19 230 2 182 10 727
Foreign currency translation reserve
Adjustments 17 426 1 808 9 497
Currency translation adjustments to 1 804 374 1 230
foreign non controlling interests
Income tax effect - - -
Total comprehensive income for the 38 864 45 480 92 597
period
Total comprehensive income for the
period attributable to:
Ordinary shareholders of ELB 29 074 36 279 75 274
Non controlling interests in 9 790 9 201 17 323
consolidated entities
38 864 45 480 92 597
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to ordinary shareholders of ELB
Issued Treasury Retained
capital shares Reserves earnings Total
R000 R000 R000 R000 R000
Balance at 30 June 2010 25 192 (55 123) 13 580 334 685 318 334
Total comprehensive 8 072 67 202 75 274
income for the year
Profit for the year 67 202 67 202
Other comprehensive
income
Foreign currency
translation reserve
Adjustments 8 072 8 072
Currency translation
adjustments to foreign
non controlling interests
Income tax effect - -
Ordinary dividends paid (11 188) (11 188)
Non controlling interest
in distributions by a
consolidated group entity
Increase in share options 6 980 6 980
reserve
Transfer from share (1 048) 1 048 -
options reserve to
retained earnings, for
share options exercised
and fully paid, and for
share options lapsed
through attrition
Redundant items in the
foreign currency
translation reserve
transferred to retained (9 083) 9 083 -
earnings
Increase in the carrying (1 006) (1 006)
amount of treasury shares
held by group entities
Balance at 30 June 2011 25 192 (56 129) 18 501 400 830 388 394
Total comprehensive 14 812 14 262 29 074
income for the six months
Profit for the six months 14 262 14 262
Other comprehensive
income
Foreign currency
translation reserve
Adjustments 14 812 14 812
Currency translation
adjustments to foreign
non controlling interests
Income tax effect - -
Ordinary dividends paid (10 032) (10 032)
Increase in share options 556 556
reserve
Decrease in the carrying 947 947
amount of treasury shares
held by group entities
Capital contributed by
non controlling interest
Balance at 31 December 25 192 (55 182) 33 869 405 060 408 939
2011
Balance at 30 June 2010 25 192 (55 123) 13 580 334 685 318 334
Total comprehensive 1 537 34 742 36 279
income for the six months
Profit for the six months 34 742 34 742
Other comprehensive
income
Foreign currency
translation reserve
Adjustments 1 537 1 537
Currency translation
adjustments to foreign
non controlling interests
Income tax effect - -
Ordinary dividends paid (7 429) (7 429)
Non controlling interest
in distributions by a
consolidated group entity
Increase in share options 6 005 6 005
reserve
Redundant items in the (1 363) 1 363 -
foreign currency
translation reserve
transferred to retained
earnings
Decrease in the carrying 184 184
amount of treasury shares
held by group entities
Balance at 31 December 25 192 (54 939) 19 759 363 361 353 373
2010
GROUP STATEMENT OF CHANGES IN
EQUITY continued
Attrib- Preference Non Unaudited
utable to controlling Total
ordinary interests in
sharehold
ers of
ELB
Total shares subsidiaries equity
R000 R000 R000 R000
Balance at 30 June 2010 318 334 8 45 602 363 944
Total comprehensive 75 274 17 323 92 597
income for the year
Profit for the year 67 202 14 668 81 870
Other comprehensive
income
Foreign currency
translation reserve
Adjustments 8 072 1 425 9 497
Currency translation 1 230 1 230
adjustments to foreign
non controlling interests
Income tax effect - - -
Ordinary dividends paid (11 188) (546) (11 734)
Non controlling interest (2 081) (2 081)
in distributions by a
consolidated group entity
Increase in share options 6 980 1 232 8 212
reserve
Transfer from share
options reserve to
retained earnings, for
share options
exercised and fully paid, - - -
and for share options
lapsed through attrition
Redundant items in the - - -
foreign currency
translation reserve
transferred to retained
earnings
Increase in the carrying (1 006) (1 006)
amount of treasury shares
held by group entities
Balance at 30 June 2011 388 394 8 61 530 449 932
Total comprehensive 29 074 9 790 38 864
income for the six months
Profit for the six months 14 262 5 372 19 634
Other comprehensive
income
Foreign currency
translation reserve
Adjustments 14 812 2 614 17 426
Currency translation 1 804 1 804
adjustments to foreign
non controlling interests
Income tax effect - - -
Ordinary dividends paid (10 032) (1 052) (11 084)
Increase in share options 556 99 655
reserve
Decrease in the carrying 947 947
amount of treasury shares
held by group entities
Capital contributed by 1 603 1 603
non controlling interest
Balance at 31 December 408 939 8 71 970 480 917
2011
Balance at 30 June 2010 318 334 8 45 602 363 944
Total comprehensive 36 279 9 201 45 480
income for the six months
Profit for the six months 34 742 8 556 43 298
Other comprehensive
income
Foreign currency
translation reserve
Adjustments 1 537 271 1 808
Currency translation 374 374
adjustments to foreign
non controlling interests
Income tax effect - - -
Ordinary dividends paid (7 429) - (7 429)
Non controlling interest (956) (956)
in distributions by a
consolidated group entity
Increase in share options 6 005 1 060 7 065
reserve
Redundant items in the - - -
foreign currency
translation reserve
transferred to retained
earnings
Decrease in the carrying 184 184
amount of treasury shares
held by group entities
Balance at 31 December 353 373 8 54 907 408 288
2010
GROUP CASH FLOW STATEMENT
Unaudited Unaudited Restated
Six months Six months Year
ended ended ended
31 Dec 11 31 Dec 10 30 June 11
R000 R000 R000
Cash inflow from operating 8 777 213 570 328 769
activities before dividends and
distributions paid
Dividends and distributions paid (11 084) (8 385) (13 815)
Cash (outflow)/inflow from operating (2 307) 205 185 314 954
activities
Cash outflow from investment (35 237) (18 989) (44 355)
activities
Cash (outflow)/inflow from financing (3 503) (1 923) 7 758
activities
Cash (outflow)/inflow for the period (41 047) 184 273 278 357
Foreign currency exchange and 11 775 (3 807) (232)
translation adjustments to cash and
cash equivalents
(Decrease)/increase in cash and cash (29 272) 180 466 278 125
equivalents
Cash and cash equivalents at the 632 624 354 499 354 499
beginning of the period
Cash and cash equivalents at the end 603 352 534 965 632 624
of the period
Reconciliation to the balance sheet
Current assets - cash and cash 608 776 534 965 632 624
equivalents
Current liabilities - bank (5 424) - -
borrowings
603 352 534 965 632 624
NOTES
Capital expenditure commitments
At 31 December 2011 there were capital expenditure commitments of R128 000 (31
December 2010 - R25 314 000, 30 June 2011 - R9 848 000). The commitments
comprise R106 000 for additions and improvements to existing property, and R22
000 for purchases of equipment. The commitments for the additions and
improvements to existing property will be funded from a combination of planned
and existing mortgage bond facilities available to the Group as well from the
Group`s cash and cash equivalents. The equipment purchases will be financed
from the Group`s cash and cash equivalents.
Contingent liabilities
A Group entity has issued a guarantee of R830 000 in favour of a raw material
supplier to a company which was previously part of the Group and has now been
sold. The guarantee is cancellable by three calendar months notice. A
financial guarantee liability with a carrying amount of R135 000 at 31
December 2011 is carried in respect of the guarantee.
ELB Engineering Services operates in the engineering contracting business and
is exposed to the risks associated with engineering contracts. These risks are
managed on the basis of limited liability.
All known liabilities of the Group at the balance sheet date have been
accrued.
SEGMENT INFORMATION
African Australasian
Total operations operations
R000 R000 R000
Unaudited - Six months ended
31 December 2011
Sales 858 600 730 346 128 254
Profit for the period 19 634 11 426 8 208
Headline earnings 13 425 7 859 5 566
Assets 1 486 201 1 263 297 222 904
Liabilities 1 005 284 942 830 62 454
Unaudited - Six months ended
31 December 2010
Sales 792 554 688 219 104 335
Profit for the period 43 298 32 815 10 483
Headline earnings 34 861 27 830 7 031
Assets 1 088 330 934 015 154 315
Liabilities 680 042 642 561 37 481
Restated - Year ended
30 June 2011
Sales 1 369 348 1 152 585 216 763
Profit for the year 81 870 62 629 19 241
Headline earnings 67 350 54 294 13 056
Assets 1 340 957 1 126 739 214 218
Liabilities 891 025 809 819 81 206
INTERIM CASH DIVIDEND DECLARATIONS
The directors have declared the following interim cash dividends for the six
months ended 31 December 2011. The interim dividends are subject to secondary
tax on companies (STC) and not dividend withholding tax as the declaration
date of the dividends precedes the implementation of the new dividends
taxation, which is effective from 1 April 2012.
PREFERENCE DIVIDEND NUMBER 122
An interim cash dividend has been declared at the rate of 6% per annum for the
first six month period on the 6% fixed cumulative redeemable preference shares
of R2 each, equivalent to 6 cents per preference share.
ORDINARY DIVIDEND NUMBER 128
An interim cash dividend of 18 cents per share has been declared on the
ordinary shares.
The salient dates in respect of both dividends are:
Last day to trade cum dividend Friday, 13 April 2012
Shares commence trading ex dividend Monday, 16 April 2012
Record date Friday, 20 April 2012
Date of payment Monday, 23 April 2012
Shares may not be dematerialised or rematerialised between Monday, 16 April
2012, and Friday, 20 April 2012, both dates inclusive.
By order of the Board
DG Jones Boksburg
Company secretary 19 March 2012
The preparation of the unaudited group interim report, excluding the comments
section, was supervised by the group accountant, Ian Glass, chartered
accountant (South Africa).
DIRECTORS
AG Fletcher (chairman), PJ Blunden (chief executive - ELB Equipment), T de
Bruyn,* Dr JP Herselman,* DG Jones (financial director), Dr SJ Meijers (chief
executive - ELB Engineering Services), MV Ramollo, IAR Thomson*
*Non executive
REGISTERED OFFICE
ELB Equipment Limited, 14 Atlas Road, Anderbolt, Boksburg, 1459
SHARE TRANSFER SECRETARIES
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
SPONSOR
Rand Merchant Bank (a division of FirstRand Bank Limited)
1 Merchant Place, Cnr Fredman Drive & Rivonia Road, Sandton, 2196
WEBSITE: www.elb.co.za
Date: 19/03/2012 12:06:20 Supplied by www.sharenet.co.za
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