Wrap Text
RAC - Racec Group Limited - Condensed consolidated unaudited results for the
six months ended 31 March 2012
RACEC GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1998/006153/06)
Share code: RAC ISIN: ZAE000105409
("RACEC" or "the Company" or "the Group")
CONDENSED CONSOLIDATED UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 MARCH
2012
INTRODUCTION
It is with a great deal of pride that we present our 2012 interim results.
This is our first six month interim reporting period ("reporting period") as
a restructured niche, black empowered, rail focused entity and it is
extremely rewarding to witness the beginning of the Groups turn around
following a challenging period of loss making and restructuring. We believe
these positive results are just the start and we are hugely optimistic and
excited about the future.
Our determined commitment to being a rail focused entity is paying dividends.
Not only have we worked hard at reducing our overall Group fixed costs, but
we have also managed to significantly grow our continued operations 2012
order book to in excess of 160%. Even more encouraging is that we are
anticipating a further improvement on our gross margin percentage, which
obviously bodes well for the remainder of 2012 and beyond.
Our current challenge is to build sufficient capacity to deliver the rail
opportunities in the medium- to long- term, without unnecessarily increasing
our fixed overhead cost. We have therefore rationalised our overhead
structure to accommodate core functions whist forming various outsourced and
alliance relationships with both service providers and clients. We believe
this will help us to more effectively scale our capacity to deliver in
response to industry demands.
We are also continuing with our strategy to diversify our operations across
the rail sector by targeting the following order book splits
* construction vs annuity contracts;
* South Africa vs Africa contracts; and
* private vs public clients.
We believe that by rationalising our overhead structure and achieving a
balanced mix of projects, that we will be able to minimise the effect of the
cyclical nature of the construction industry.
Construction remains a key driver of the Groups success and it is a business
we understand and have been delivering on for more than 55 years. Our
continued striving for excellence by consistently delivering quality projects
timeously and within budget allows us to provide continued services to our
existing clients as well as to attract new clients. Highlights during this
reporting period include the recent award of the total upgrading of a further
71 kilometres of track in Sierra Leone as well as several contract awards
locally, which are expected to significantly impact our 2012 and 2013
results.
Our strategy to secure annuity type contracts off the back of our initial
construction works is also proving to be successful. Our knowledge of the
site and contract conditions is allowing us to provide mutually beneficial
cost effective solutions for both ourselves and our clients. Short-term
maintenance works are currently being undertaken in Sierra Leone and
Mozambique as well as in South Africa and we are confident that we will
convert these into long-term contracts. Furthermore, we are actively
participating in discussions with clients on how best to provide mechanised
rail maintenance services to suit their requirements without unnecessarily
saturating the market with an oversupply of resources. We are excited about
this opportunity of providing full maintenance solutions, and feel that we
are well positioned to bridge the gap between our client`s expectations and
the equipment and other service provider`s frustrations.
We are also continuing our expansion strategy into the resource rich Africa
by focusing on mining houses and other large infrastructure contractors. Our
enviable position of being a niche player in an opportunity rich rail market
is also allowing us to apply strict risk mitigation measures before taking on
work. Our continued gross margin improvement is as a result of us being able
to deploy our resources as effectively and efficiently as possible. Further
imminent opportunities exist in Mozambique, Sierra Leone, Swaziland, Ghana,
Liberia, Congo, Malawi and Kenya and we have set up a permanent regional
presence in Mozambique and Sierra Leone.
Although our presence and delivery in the local market remains steady, we
anticipate that the full effects of the government`s infrastructure
commitment will be more seriously witnessed in the next 6 - 18 months. We
are therefore confident as an experienced, local, level 3 BBBEE, niche rail
contractor, that we are extremely well positioned to participate in the
anticipated rail infrastructure roll out.
Although RACEC is a listed entity, we remain highly entrepreneurial and
flexible. Our ability to act swiftly and decisively without being held back
by bureaucracy while simultaneously being supported by a strong Corporate
Governance and ethical culture is a great asset to our clients.
The last six months have also seen our relationship with Solethu Civils
Holdings Proprietary Limited ("Solethu") continues to grow. Solethu`s role
as a prominent industry player and the relationship with RRL Grindrod
Proprietary Limited is a positive synergistic rail fit for RACEC. The
mutually beneficial opportunities that co-exist are exciting, and we look
forward to delivering on these in the future. We are fortunate to have a
partner that not only provides the necessary BBBEE support, but that also
contributes significantly to the business. The support we have received
through the difficult times is testament to the strong relationship that has
been developed.
Although we are pleased with the turn around, it is important to recognise
all parties that assisted and made this happen. We are especially thankful
for the support given by our clients, suppliers, service providers and other
industry stakeholders. We trust that they will continue to be part of our
future success.
I would like to thank the Board of Directors that have supported the
executive team through some very difficult times. Through their support, we
have resisted opportunists and have now emerged stronger than before. I
would also like to thank all our loyal and hardworking staff who have managed
to consistently execute and deliver with excellence, despite the uncertainty
and changes they were experiencing. This certainly highlights that great
businesses are built around great people.
Lastly, I would like to thank the Executive Management team for their
efforts, support and contribution. They have shouldered much of the
responsibility, and it is due to their endless drive and commitment that we
have been able to restructure and turn the business around.
I am both honored and excited at the prospects of leading this great company
into the future, as RACEC strives to be the rail contractor of choice.
Gary Harrod
Chief Executive Officer
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
During the course of the 2009 financial year the Group sold 25% of its share
capital to its BEE investor Solethu for a total for R45 million and a further
9% during the course of 2010 by way of a rights issue, raising an additional
R10 million.
We have been required in terms of SIC 12 to consolidate the results of
Solethu. The impact of this consolidation results in R37.7 million of our
equity being disclosed as treasury shares and reflected as shareholders`
loans on the consolidated statement of financial position. The following
condensed consolidated financial statements reflect the following:
* The consolidated statement of comprehensive income, consolidated
statement of financial position and cash flow statement excluding
the SIC 12 consolidation. Management feels that these results give
a clearer indication of the underlying operations as they exclude
the SIC 12 consolidation and fair value adjustments.
* The consolidated statement of comprehensive income, consolidated
statement of financial position and cash flow statement including
the SIC 12 consolidation.
Excluding the SIC 12 consolidation of Solethu
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Unaudited
6 months 6 months year ended
ended ended 30
31 March 31 March September
2012 2011 2011
R`000 R`000 R`000
Revenue 127 763 80 457 225 982
Cost of sales (92 485) (49 044) (162 930)
Gross profit 35 278 31 413 63 052
Other income 1 979 25 123
Other expenses (22 522) (17 725) (35 665)
Net profit before investment revenue, 13 713 27 510
finance costs and taxation 14 735
Investment revenue 953 484 1 185
Finance costs (2 503) (1 823) (4 593)
Profit before taxation 13 185 12 374 24 102
Taxation (3 517) (6 297) (7 703)
Profit for the period 9 668 6 077 16 399
Discontinued operations
(Loss)/Profit for the year from - (1 638) (35 055)
discontinued operations
Loss from disposal of discontinued - - (37 936)
operations
Profit/(Loss) for the period 9 668 4 439 (56 592)
Attributable to:
Equity holders of the parent 9 668 4 888 (55 785)
Non-controlling interest - - (449) (807)
discontinued operations
9 668 4 439 (56 592)
Other comprehensive income/(loss):
- Foreign currency translation (117) (164) 49
differences
Total comprehensive income/(loss) for 9 551 4 275 (56 543)
the period
Unaudited Unaudited Unaudited
6 months 6 months year ended
ended ended 30
31 March 31 March September
2012 2011 2011
Attributable to:
Equity holders of the parent 9 551 4 724 (55 736)
Non-controlling interest - - (449) (807)
discontinued operations
9 551 4 275 (56 543)
EARNINGS/(LOSS) PER SHARE (CENTS)
Basic 5.8 3.0 (33.7)
Diluted basic 5.3 2.8 (31.2)
Headline 5.8 3.0 (7.2)
Diluted headline 5.3 2.8 (6.7)
From continued operations (cents)
Basic 5.8 3.7 9.9
Diluted basic 5.3 3.5 9.2
Headline 5.8 3.7 10.1
Diluted headline 5.3 3.5 9.3
From discontinued operations (cents)
Basic - (0.7) (43.6)
Diluted basic - (0.7) (40.3)
Headline - (0.7) (17.3)
Diluted headline - (0.7) (16.0)
Weighted average number of ordinary 165 165 585 165 585
shares in issue (`000)* 584
Fully diluted weighted average number 182 175 999 178 993
of ordinary shares in issue (`000)** 187
*Excludes treasury shares
** Treasury shares considered to have dilutive potential
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudite Unaudite Unaudite
d d d
as at as at as at
31 March 31 March 30
2012 2011 Septembe
R`000 R`000 r
2011
R`000
ASSETS
Non-current assets 62 648 84 461 66 555
- Property, plant and equipment 50 502 61 713 54 978
- Investment property 351 351 351
- Intangible assets 926 10 548 1 125
- Loans and receivables 9 360 4 404 8 839
- Loans to shareholders 1 499 915 1 200
- Loans to related parties - 11 62
- Deferred tax assets 10 6 519 -
Current assets 100 200 122 067 110 957
- Inventories 49 013 49 501 41 692
- Trade and other receivables 43 097 58 364 43 755
- Loans and receivables - - 4 385
- Tax receivable - 119 103
- Cash and cash equivalents 8 090 14 083 17 569
- Assets classified as held for - - 3 453
sale
Total assets 162 848 206 528 177 512
EQUITY AND LIABILITIES
Capital and reserves 43 953 94 011 34 325
- Equity attributable to equity 43 953 94 589 34 325
holders of the parent
- Non-controlling interest - (578) -
Non-current liabilities 12 360 16 306 16 965
- Other financial liabilities 6 560 8 284 9 916
- Share based payments 971 2 890 2 085
- Deferred tax liabilities 4 829 5 132 4 964
Current liabilities 106 535 96 211 126 222
- Loans from shareholders 3 770 6 795 6 739
- Other financial liabilities 4 859 8 800 6 257
- Current tax payable 4 610 10 624 7 639
- Trade and other payables 63 235 48 513 73 606
- Bank overdraft 30 061 21 479 30 936
- Liabilities directly associated 1 045
with assets classified as held for - -
sale
Total equity and liabilities 162 848 206 528 177 512
Net asset value per share (cents) 27.8 59.9 21.7
Net tangible asset value per share 27.2 53.2 21.0
(cents)
Total number of ordinary shares in 157 892 157 892 157 892
issue (`000)*
*Excludes treasury shares
Including the SIC 12 consolidation of Solethu
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
31 March 31 March 30
2012 2011 September
R`000 R`000 2011
R`000
Revenue 127 763 80 457 225 982
Cost of sales (92 485) (49 044) (162 930)
Gross profit 35 278 31 413 63 052
Other income 1 979 25 123
Other expenses (22 522) (17 725) (35 673)
Net profit before investment revenue, 13 713 27 502
finance costs and taxation 14 735
Investment revenue 654 208 622
Finance costs (4 756) (3 332) (7 885)
Profit before taxation 10 633 10 589 20 239
Taxation (3 517) (6 297) (7 762)
Profit for the period 7 116 4 292 12 477
Discontinued operations
(Loss)/Profit for the year from - (1 638) (35 055)
discontinued operations
Loss from disposal of discontinued - - (37 936)
operations
Profit/(Loss) for the period 7 116 2 654 (60 514)
Attributable to:
Equity holders of the parent 7 116 3 103 (59 707)
Non-controlling interest - - (449) (807)
discontinued operations
7 116 2 654 (60 514)
Other comprehensive income/(loss):
- Foreign currency translation (117) (164) 49
differences
Total comprehensive income/(loss) for 6 999 2 490 (60 465)
the period
Attributable to:
Equity holders of the parent 6 999 2 939 (59 658)
Non-controlling interest - - (449) (807)
discontinued operations
6 999 2 490 (60 465)
EARNINGS/(LOSS) PER SHARE (CENTS)
Basic 6.7 2.9 (56.3)
Diluted basic 3.9 1.8 (33.4)
Headline 6.6 2.9 (15.0)
Diluted headline 3.9 1.8 (8.9)
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
31 March 31 March 30
2012 2011 September
R`000 R`000 2011
R`000
From continued operations
Basic 6.7 4.0 11.8
Diluted basic 3.9 2.5 7.0
Headline 6.6 4.0 12.1
Diluted headline 3.9 2.5 7.2
From discontinued operations
Basic - (1.1) (68.0)
Diluted basic - (0.7) (40.3)
Headline - (1.1) (27.1)
Diluted headline - (0.7) (16.0)
Weighted average number of ordinary 106 104 106 104 106 104
shares in issue (`000)*
Fully diluted weighted average number 182 187 174 966 178 993
of ordinary shares in issue (`000)**
*Excludes treasury shares
** Treasury shares considered to have dilutive potential
SEGMENTAL REPORT
Analysis per reportable Administra Rail Consolida Total
segment tive construct ting R`000
investment ion Entries
and plant R`000 R`000
hire
R`000
Unaudited - 6 months ended
31 March 2012
Revenue - external 438 127 325 - 127
763
Revenue - intersegment 8 293 - - 8 293
(Loss)/Profit before tax (3 126) 13 759 - 10 633
Total assets 73 064 105 536 - 178
600
Unaudited - 6 months ended
31 March 2011
Revenue - external - 80 457 - 80 457
Revenue - intersegment 7 450 14 - 7 464
Profit/(loss) before tax 370 17 849 (7 630) 10 589
Total assets - continued 39 654 87 712 - 127
operations 366
Audited - year ended 30
September 2011
Revenue - external - 225 982 - 225
982
Revenue - intersegment 17 518 14 - 17 532
Profit/(loss) before tax 6 461 23 494 (9 716) 20 239
Total assets - continued 79 608 110 722 - 190
operations 330
Geographical analysis South Outside Consolida Total
Africa South ting R`000
R`000 Africa entries
R`000 R`000
Unaudited - 6 months ended
31 March 2012
Revenue - external 84 706 43 057 - 127
763
Revenue - intersegment 1 933 - - 1 933
(Loss)/Profit before tax (5 107) 15 740 - 10 633
Total assets 126 154 52 446 - 178
600
Unaudited - 6 months ended
31 March 2011
Revenue - external 30 474 49 983 - 80 457
Revenue - intersegment 1 597 - - 1 597
(Loss)/Profit before tax (7 121) 25 340 (7 630) 10 589
Total assets - continued 95 410 31 956 - 127
operations 366
Audited - year ended 30
September 2011
Revenue - external 139 345 86 637 - 225
982
Revenue - intersegment 6 325 - - 6 325
Profit/(Loss) before tax 23 383 6 571 (9 715) 20 239
Total assets - continued 117 555 72 775 - 190
operations 330
An operating segment is a component of the Group that engages in business
activities which may earn revenues and incur expenses and whose operating
results are regularly reviewed by the Group`s chief operating decision
makers, being the Group`s Board of Directors, in order to allocate resources
and assess performance, and for which discrete financial information is
available.
Operating segments, which display similar economic characteristics and have
similar products, services, customers, methods of distribution and regulatory
environments are aggregated for reporting purposes.
Segments were identified and grouped together using a combination of the
products and services offered by the segments and the geographical areas in
which they operate.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
as at as at as at
31 March 31 March 30
2012 2011 September
R`000 R`000 2011
R`000
ASSETS
Non-current assets 76 707 83 546 77 875
- Property, plant and equipment 50 502 61 713 54 978
- Investment property 351 351 351
- Intangible assets 926 10 548 1 125
- Loans and receivables 9 252 4 404 8 839
- Loans to related parties 15 666 11 12 582
- Deferred tax assets 10 6 519 -
Current assets 101 893 122 219 112 455
- Inventories 49 013 49 501 41 692
- Trade and other receivables 43 097 58 364 43 755
- Loans and receivables 1 692 - 5 883
- Tax receivable - 119 103
- Cash and cash equivalents 8 091 14 235 17 569
- Assets classified as held for - - 3 453
sale
Total assets 178 600 205 765 190 330
EQUITY AND LIABILITIES
Capital and reserves 6 158 59 423 (916)
- Equity attributable to equity 6 158 60 001 (916)
holders of the parent
- Non-controlling interest - (578) -
Non-current liabilities 42 426 56 926 45 709
- Loans from related parties 30 066 40 620 28 744
- Other financial liabilities 6 560 8 284 9 916
- Share based payments 971 2 890 2 085
- Deferred tax liabilities 4 829 5 132 4 964
Current liabilities 130 016 89 416 145 537
- Loans from related parties 27 192 - 25 996
- Other financial liabilities 4 859 8 800 6 257
- Current tax payable 4 669 10 624 7 697
- Trade and other payables 63 235 48 513 73 606
- Bank overdraft 30 061 21 479 30 936
- Liabilities directly associated - 1 045
with assets classified as held for -
sale
Total equity and liabilities 178 600 205 765 190 330
Net asset value per share (cents) 5.8 56.5 (0.9)
Net tangible asset value per share 4.9 46.6 (1.9)
(cents)
Total number of ordinary shares in 106 104 106 104 106 104
issue (`000)*
*Excludes treasury shares
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
31 March 31 March 30
2012 2011 September
R`000 R`000 2011
R`000
Cash flows from operating activities (6 013) 18 327 33 262
- Cash generated from operations 4 674 22 276 40 831
- Interest income 654 863 875
- Finance costs (4 756) (3 496) (3 662)
- Taxation paid (6 585) (1 316) (4 782)
Cash flows from investing activities 3 725 (11 137) (21 788)
- Purchase of property, plant and (1 643) (13 490) (24 936)
equipment
- Proceeds from disposal of property, 5 368 3 048 3 963
plant and equipment
- Purchase of intangible assets - (695) (782)
- Proceeds from disposal of - - (33)
discontinued operations
Cash flows from financing activities (6 213) (12 077) (22 741)
- Repayment of other financial (6 994) (6 649) (15 928)
liabilities
- Advance of other financial - 3 528 11 938
liabilities
- (Repayment)/Advance of loans by (3 201) (4 582) (8 903)
related parties
- Advance of loans and other 3 982 - (7 079)
receivables
- Net proceeds from share issue - - -
- Dividends paid - (4 374) (2 769)
Total cash movement for the period (8 501) (4 887) (11 267)
Cash at the beginning of the period (13 367) (2 132) (2 132)
Exchange rate movements on cash and (102) (225) 32
cash equivalents
Total cash at the end of the period (21 970) (7 244) (13 367)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Treasur Other Retaine Non- Total
capital y reserve d control equity
and shares s R`000 earning ling R`000
share R`000 s R`000 interes
premium t R`000
R`000
Balance at 1 October 70 369 (39 5 615 24 535 (129) 61 232
2010 158)
Total comprehensive - - (450) 3 389 (449) 2 490
loss
- Profit for the - - - 3 103 (449) 2 654
period
- Realised revaluation - (333) 333 - -
through depreciation -
- Deferred tax on - 93 (93) - -
revaluation through -
depreciation
- Realised revaluation - - (64) 64 - -
through disposal
- Deferred tax on - 18 (18) - -
revaluation through -
disposal
- Foreign currency - (164) - - (164)
translation -
differences
Share option expenses - - 75 - - 75
Dividends - - - (4 374) - (4 374)
Balance at 31 March 70 369 (39 5 240 23 550 (578) 59 423
2011 158)
Total comprehensive - - (82) (62 (358) (62
loss 515) 955)
- Loss for the period - - - (62 (358) (63
810) 168)
- Realised revaluation - (198) 198 - -
through depreciation -
- Deferred tax on - 55 (55) - -
revaluation through -
depreciation
- Realised revaluation - - (211) 211 - -
through disposal
- Deferred tax on - 59 (59) - -
revaluation through -
disposal
- Foreign currency - 213 - - 213
translation -
differences
- Share option - - 75 - - 75
expenses
Disposal of - - 889 (889) 936 936
controlling interest
in subsidiaries
Dividends - - - 1 605 - 1 605
Balance at 30 70 369 (39 6 122 (38 - (916)
September 2011 158) 249)
Total comprehensive - - (471) 7 470 - 6 999
loss
- Profit for the - - - 7 116 - 7 116
period
- Realised revaluation - - (164) 164 - -
through depreciation
- Deferred tax on - - 46 (46) - -
revaluation through
depreciation
- Realised revaluation - - (328) 328 - -
through disposal
- Deferred tax on - - 92 (92) - -
revaluation through
disposal
- Foreign currency - - (117) - - (117)
translation
differences
- Share capital issued 602 (602) - - - -
- Share option - - 75 - - 75
expenses
Balance at 31 March 70 971 (39 5 726 (30 - 6 158
2012 760) 779)
* The shares were issued to the RACEC Employee Share Trust ("the Trust"),
RACEC Employee Share Purchase Scheme ("the Scheme") and Solethu, being
special purpose entities, which are consolidated as part of the Group.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL RESULTS
Statement of compliance
The accounting policies applied in the preparation of these condensed
consolidated results, which are based on reasonable judgments and estimates,
are in accordance with International Financial Reporting Standards, its
interpretations adopted by the International Accounting Standards Board,
AC500 as issued by the Accounting Practices Board and are consistent with
those applied in the annual financial statements for the year ended 30
September 2011. These condensed consolidated financial statements as set out
in this report have been prepared in terms of IAS 34 - Interim Financial
Reporting, the South African Companies Act (Act 71 of 2008), as amended, and
the Listings Requirements of JSE Limited ("Listings Requirements").
These condensed consolidted financial statements have been prepared under the
supervision of Mr Sean Wilkins CA(SA), the chief financial officer of the
Group.
The interim results have not been audited or reviewed by the Group`s
auditors.
Basis of measurement
These unaudited condensed financial statements have been prepared on the
historical cost basis, modified for certain items measured at fair value.
Discontinued operations
During the 2011 financial year, RACEC disposed of all its Electrical services
segment subsidiaries. RACEC Electrification Proprietary Limited, RACEC Power
Proprietary Limited and Northern Electric (Cape) Proprietary Limited were
disposed of on 1 August 2011 and Greenbro Proprietary Limited and Greenglo
Geysers Proprietary Limited on 30 September 2011.
Unaudited Audited
6 months year ended
ended 30
31 March September
2011 2011
R`000 R`000
The results of the discontinued operations
for the period as follows:
Revenue 69 762 108
504
Cost of sales (60 246) (104
974)
Gross profit 9 516
3 530
Other income -
130
Other expenses (15 720) (37
232)
Net (loss)/profit before investment revenue, (6 204) (33
finance costs and taxation 572)
Investment revenue 655
939
Finance costs (164)
(919)
(Loss)/Profit before taxation (5 713) (33
552)
Taxation 4 075
(1 503)
Trading (loss)/profit after taxation (1 638) (35
055)
Loss from disposal of discontinued - (37
operations 936)
- Gross - (37
936)
- Taxation -
-
Net (loss)/profit for the period (1 638) (72
991)
(Loss)/Profit attributable to:
Equity holders of the parent (1 189) (72
184)
Non-controlling interest (449)
(807)
(1 638) (72
991)
The major classes of assets and liabilities classified as held for sale
were
as follow:
Unaudited Audited
6 months ended year ended
31 March 30 September
2011 2011
R`000 R`000
Assets
Property, plant and equipment - 3 453
Assets classified as held for sale - 3 453
Liabilities
Instalment sale agreement liabilities - 1 045
Liabilities directly association with - 1 045
assets classified as held for sale
4. Proceeds from the disposal of discontinued operations
Audited
year ended
30 September
2011
R`000
Property, plant and equipment 7 963
Intangible assets 3 478
Inventories 9 448
Trade and other receivables 47 272
Tax receivable 22
Cash and cash equivalents 190
Non-controlling interest 936
Loans from related parties (149)
Deferred tax liabilities (23)
Other financial liabilities (885)
Current tax payable (179)
Trade and other payables (25 116)
Bank overdraft (158)
42 799
Less: Net bank overdraft disposed of (32)
Loss on disposal of subsidiaries (37 936)
Proceeds on disposal 4 831
- Loan account with RACEC 4 371
Electrification Proprietary Limited
- Loan account with Greenbro 493
Proprietary Limited /Greenglo purchases
Proprietary Limited
- Cash flow (33)
Reconciliation of earnings/(loss) to headline earnings/(loss)
Continued operations
Unaudited Unaudited Audited
6 months 6 months year ended
ended ended 30
31 March 31 March September
2012 2011 2011
R`000 R`000 R`000
Reconciliation between earnings and
headline earnings:
- Profit/(Loss) after tax 7 116 4 292
12 477
- Impairment losses on property, - -
plant and equipment 289
- Loss on disposal of property, plant 455 24
and equipment 161
- Profit on disposal of property, (458) -
plant and equipment -
- Tax effect of adjustments (63) (7)
(126)
Headline earnings 7 050 4 309 12 801
Discontinued operations
- Loss after tax - (1 189)
(72 184)
- Impairment losses on property, - -
plant and equipment 123
- Impairment loss on Intangible - -
assets 5 557
- Loss on disposal of property, plant - 3
and equipment 14
- Profit on disposal of property, - (2)
plant and equipment (11)
- Loss on disposal of subsidiaries - -
37 936
- Tax effect of adjustments - -
(158)
Headline loss - (1 188) (28
723)
Total
- Profit/(Loss) after tax 7 116 3 103 (59
707)
- Impairment losses on property, - -
plant and equipment 412
- Impairment loss on Intangible - - 5
assets 557
- Loss on disposal of property, plant - 27
and equipment 175
- Profit on disposal of property, 455 (2)
plant and equipment (11)
- Loss on disposal of subsidiaries (458) - 37
936
- Tax effect of adjustments (63) (7)
(284)
Headline earnings/(loss) 7 050 3 121 (15
922)
COMMENTARY
FINANCIAL PERFORMANCE
The trading results reflect the results of the continuing operations of the
Group. The losses in relation to the discontinued operations and the losses
associated with the disposal of the discontinued operations are reflected as
discontinued on the face of the statement of comprehensive income.
On a like-for-like basis, comparing the performance for the six months to 31
March 2012 of the on-going operations with the corresponding prior period,
the Group`s revenue increased by R47.3 million, representing an increase of
58%.
The gross margin percentage achieved for the six months to 31 March 2012 was
28%, which is comparable to the overall margin achieved for the financial
year ended 30 September 2011. The gross margin for the corresponding prior
six months includes a once off mile stone receipt of R9.0 million from one of
our African contracts.
The growth in the continuing operations has been driven by profitable
operations of the rail business on opportunities in both the local market and
in Africa.
DIVIDENDS
It is the policy of the Group to declare dividends up to a maximum of one-
third of annual profits after tax, subject to working capital requirements
and acquisition activities.
In addition, it is the intention of the Group to periodically consider this
dividend policy, taking into account the prevailing market conditions, the
particular circumstances of the Group and future cash requirements in
determining if it is appropriate to pay dividends.
No dividends have been declared for the period ending 31 March 2012.
SUBSEQUENT EVENTS
The are no events after the reporting period that require disclosure.
DIRECTORATE
During the period under review, as from 28 February 2012, Mr. Stephen
Smithyman is no longer representing Mr. Q Zulu as an alternative on RACEC`s
board of directors.
By order of the Board
M Uys
Non-Executive Chairman
8 June 2012
G Harrod
Chief Executive Officer
Directors:
M Uys* (Chairman), G Harrod (Chief Executive Officer), C Harrod*, C Gooden*,
S Wilkins (Chief Financial Officer), B Petersen*, Q Zulu*,
* Non-executive
Company secretary:
C van Rensburg
Registered office:
8 Hawkins Avenue, Epping 1, 7460 (PO Box 61, Eppindust, 7475)
Transfer secretaries:
Computershare Investor Services (Proprietary) Limited (PO Box 61763,
Marshalltown, 2107)
Designated Adviser:
Merchantec Capital (PO Box 41480, Craighall, 2024)
Auditors:
Grant Thornton Cape Inc. (Docex 158, Cape Town)
These results may be viewed on the Internet on http://www.racec.co.za.
Date: 08/06/2012 16:06:00 Supplied by www.sharenet.co.za
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