Wrap Text
Unaudited interim results for the six months ended 30 June 2012
KayDav Group Ltd
Incorporated in the Republic of South Africa
Registration Number: 2006/038698/06
JSE code: KDV - ISIN: ZAE000108940
("KayDav" or "the Group" or "the Company")
Unaudited Interim Results
for the six months ended 30 June 2012
- Revenue R253 million (up 14%)
- Headline earnings per share 4.9 cents (up 53%)
- Net tangible asset value per share 65.6 cents
- Distribution per share 6 cents
Consolidated statement of comprehensive income
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
30 June 30 June 31 December
2012 2011 2011
R R R
Revenue 253 182 787 221 401 673 483 643 885
Cost of sales (173 193 853) (152 806 566) (333 033 080)
Gross profit 79 988 934 68 595 107 150 610 805
Other income 291 303 208 389 874 267
Operating expenses (67 400 179) (59 529 988) (125 088 168)
Operating profit 12 880 058 9 273 508 26 396 904
Investment income 37 166 109 748 144 514
Finance costs (1 124 819) (1 331 571) (2 579 612)
Profit before taxation 11 792 405 8 051 685 23 961 806
Taxation (3 316 699) (2 247 196) (5 782 727)
Profit for the period 8 475 706 5 804 489 18 179 079
Other comprehensive income
Total comprehensive income
attributable to equity holders of the parent 8 475 706 5 804 489 18 179 079
Reconciliation between
earnings and headline earnings
Earnings 8 475 706 5 804 489 18 179 079
(Profit)/loss on disposal of plant
and equipment (49 453) (19 869) 295 476
Taxation on (profit)/loss on disposal
of plant and equipment 13 847 5 563 (82 733)
Impairment of plant and equipment 700 000
Taxation on impairment of plant
and equipment (196 000)
Headline earnings attributable to equity holders 8 440 100 5 790 183 18 895 822
Weighted average number of shares in issue 172 751 585 183 566 511 182 751 712
Basic and diluted earnings per share (cents) 4.9 3.2 9.9
Basic and diluted headline earnings per share (cents) 4.9 3.2 10.3
Consolidated statement of financial position
Unaudited Unaudited Audited
ended ended year ended
30 June 30 June 31 December
2012 2011 2011
R R R
ASSETS
Non-current assets 50 904 867 51 636 500 51 563 206
Plant and equipment 32 808 533 30 964 026 30 764 470
Goodwill 14 302 804 14 302 804 14 302 804
Deferred taxation 3 793 530 6 369 670 6 495 932
Current assets 174 094 014 158 274 153 148 350 367
Inventories 77 395 540 65 148 524 72 258 022
Trade and other receivables 82 087 847 75 068 012 68 390 409
Cash and cash equivalents 11 617 596 16 060 542 6 167 920
Taxation 2 993 031 1 997 075 1 534 016
Total assets 224 998 881 209 910 653 199 913 573
EQUITY AND LIABILITIES
Capital and reserves 127 623 384 111 160 871 119 147 678
Share capital 173 184 173
Share premium 180 168 412 184 556 185 180 168 412
Accumulated loss (52 545 201) (73 395 498) (61 020 907)
Non-current liabilities 20 135 314 13 257 950 12 368 889
Instalment sale liabilities 5 052 675 3 474 920 4 114 591
Interest-bearing liabilities 15 082 639 9 783 030 8 254 298
Current liabilities 77 240 183 85 491 832 68 397 006
Trade and other payables 40 127 274 58 615 158 50 253 363
Short-term portion of instalment sale liabilities 4 234 389 3 487 803 3 775 494
Short-term portion of interest-bearing liabilities 4 766 144 2 841 891 2 988 196
Bank overdraft 23 449 994 16 585 060 9 487 289
Taxation 57 251 23 393
Provisions 4 605 131 3 961 920 1 869 271
Total equity and liabilities 224 998 881 209 910 653 199 913 573
Shares in issue at period end 172 751 585 183 087 373 172 751 585
Net asset value per share (cents) 73.9 60.7 69.0
Net tangible asset value per share (cents) 65.6 52.9 60.7
Condensed consolidated statement of cash flows
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
30 June 30 June 31 December
2012 2011 2011
R R R
Cash flows from operating activities (14 274 213) (1 386 211) 6 069 196
Cash flows from investing activities (4 242 085) (1 730 191) (7 137 597)
Cash flows from financing activities 10 003 269 (12 121 459) (16 964 311)
Net decrease in cash and cash equivalents (8 513 029) (15 237 861) (18 032 712)
Net cash and cash equivalents at the
beginning of the period (3 319 369) 14 713 343 14 713 343
Net cash and cash equivalents at the
end of the period (11 832 398) (524 518) (3 319 369)
Condensed statement of changes in equity
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
30 June 30 June 31 December
2012 2011 2011
R R R
Balance at the beginning of the period 119 147 678 115 650 549 115 650 549
Distribution to shareholders (10 100 061) (10 100 050)
Share repurchases (194 106) (4 581 900)
Total comprehensive income for the period 8 475 706 5 804 489 18 179 079
Balance at the end of the period 127 623 384 111 160 871 119 147 678
Segmental analysis
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
30 June 30 June 31 December
2012 2011 2011
R R R
Segmental revenue
Board distribution 244 938 218 215 347 802 471 028 870
Manufacturing 21 036 987 17 067 421 40 686 396
Internal revenue (12 792 418) (11 013 550) (28 071 381)
Net revenue 253 182 787 221 401 673 483 643 885
Internal revenue relates to sales from the
manufacturing segment to the board
distribution segment.
Segmental results
Board distribution 12 793 242 8 082 537 26 055 459
Manufacturing 86 816 12 819 184 335
Other 1 178 152 157 110
Operating profit before interest 12 880 058 9 273 508 26 396 904
Operating assets
Board distribution 191 527 379 176 024 789 167 937 010
Manufacturing 18 929 944 20 575 474 14 455 121
Other 1 059 051 206 605 447 638
Internal transactions (7 606 857) (9 565 764) (5 258 948)
203 909 517 187 241 104 177 580 821
Commentary
Introduction
KayDav Group Ltd ("KayDav" or "the Group") specialises in the
distribution and adding of value to wood based panels, which are
products manufactured through the compression of wood waste into
a solid panel. Wood-based panels are used for a variety of purposes in
the construction, furniture manufacturing and shopfitting industries.
Financial results
Revenue of R253 million exceeded that of the previous corresponding
period by 14%. The revenue growth together with an improvement
in the gross profit margin over that of the six months ended 30 June
2011 from 31.0% to 31.6% resulted in gross profit exceeding that of
the six months ended 30 June 2011 by 17%.
Operating expenses were 13% higher than that of the previous
corresponding period as a result of the costs associated with an
increased sales effort and of related additional operational activity.
Total comprehensive income increased by 46% while earnings and
headline earnings per share increased by 53% over that of the six
months ended 30 June 2011. Earnings and headline earnings per
share growth were assisted by the buy back of KayDav shares during
the 12 months ended 31 December 2011.
The net overdraft at 30 June 2012 of R11.8 million is after early
payment of suppliers in return for additional settlement discounts.
The total of the amounts paid before their due dates was R26 million.
During June 2012 the Group raised a term loan from its bankers
amounting to R10 million. Of this amount R6 million will partially fund
the acquisition of the property letting enterprise which was announced
on 23 March 2012. The Group currently rents a building which houses
its Ottery operations from this enterprise and the acquisition is in
substance an acquisition of the building. The remainder of the
R14 million purchase price will be funded by a loan secured by a
mortgage bond over the property.
KayDav is pleased with the further improvement in its financial
results considering the continued challenging trading conditions in
the industry.
Prospects
Activity levels in our industry are determined by consumer demand
which is affected by consumers' personal debt levels, employment
and willingness and ability of financial institutions to extend credit.
On a macro level, much uncertainty exists around the local outlook
for employment, inflation and interest rates which not only affects
current consumer demand but also makes it difficult to gauge the
prospects for industry growth in the short to medium term. On a
micro level, management continues to focus on increasing market
share and effective cost and working capital control.
The earnings growth during the first 6 months of the financial year
ending 31 December 2012 bodes well for the second half of the
financial year which normally generates the greater contribution to
operating profits.
Distributions to shareholders
Notice is hereby given that the board of directors of KayDav have
resolved to make a capital reduction in lieu of a dividend out of share
premium (a reduction of Contributed Tax Capital as defined in the
Income Tax Act) of 6 cents per share.
Salient dates
The salient dates in respect of the cash distribution are as follows:
Last day to trade to be eligible to
receive the cash distribution Friday, 7 September 2012
Shares trade ex' the cash distribution Monday, 10 September 2012
Record date for the cash distribution Friday, 14 September 2012
Cash distribution paid to shareholders Monday, 17 September 2012
Notes:
1. Any change to the above dates will, subject to approval of the
JSE Limited, be communicated to shareholders by notification on
SENS and in the press.
2. Shares may not be dematerialised or rematerialised between
Monday, 10 September 2012 and Friday, 14 September 2012.
Additional information
In terms of the Listings Requirements in relation to cash distributions
the following information is disclosed:
1. The issued share capital of KayDav is 172 751 585 ordinary
shares; and
2. KayDav's tax reference number is 9154477161.
Given that the cash distribution is by way of a reduction of Contributed
Tax Capital, the information relating to dividends tax is not applicable
and has not been disclosed.
Capital commitments
At 30 June 2012 the Group had the following capital commitments
which were all contracted for:
1. The acquisition of the Ottery warehouse mentioned under
"Financial results" above at a cost of R13 850 000 which will be
financed by terms loans from the Group's bankers partly secured
by a mortgage bond over the property.
2. The acquisition of a smaller property in Ottery, previously rented,
at a cost of R2 100 000 to serve as a production facility. The cost
will be financed by a combination of a term loan secured by a
mortgage bond over the property and internal funds.
3. The acquisition of production machinery at a cost of R 5 845 000
which will by financed by instalment sale liabilities.
Subsequent events
No material change has taken place in the affairs of the Group
between the end of the financial period and the date of this report,
that requires adjustment or disclosure.
Basis of preparation
The interim financial statements have been prepared in accordance
with International Financial Reporting Standards, AC 500 standards as
issued by the Accounting Practices Board, the requirements of IAS 34
(Interim Financial Reporting) and in compliance with the JSE Listings
Requirements and the Companies Act, 2008 of South Africa.
The accounting policies applied in preparing these interim financial
statements are consistent with those presented in the annual
financial statements for the year ended 31 December 2011. These
interim financial statements have not been audited or reviewed by
the KayDav auditors, PKF (Jhb) Inc. This interim report was prepared
by the financial director, Martin Slier CA (SA).
Appreciation
The board extends its appreciation to our management and staff for
their efforts during this reporting period. We also thank our customers
and suppliers for their continued support.
On behalf of the board
IH Stern GF Davidson
Chairman Chief Executive Officer
Cape Town 22 August 2012
Corporate information
Executive directors: GF Davidson (CEO), M Slier (CFO)
Non-executive directors: IH Stern (Chairman), J Hertz, B Tlhabanelo
Registration number: 2006/038698/06
Registered address: 105 Bamboesvlei Road, Ottery, 7800
Postal address: PO Box 272 Ottery 7808
Telephone: 021 704 7060
Facsimile: 086 519 2014
Company Secretary: Probity Business Services (Pty) Limited
Transfer secretaries: Link Market Services South Africa (Pty) Limited
Sponsor: Java Capital
Date: 22/08/2012 05:03:00 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.