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Audited Annual Results and Dividend Declaration for the 53 weeks ended 30 June 2012
Cashbuild Limited
(Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE Share Code: CSB ISIN: ZAE000028320
AUDITED ANNUAL RESULTS AND DIVIDEND DECLARATION FOR THE 53 WEEKS ENDED 30 JUNE
2012
Net asset value per share up 25%
Operating profit up 67%
Final dividend up 96%
Operating profit excl 53rd week and BEE up 26%
Revenue up 11%
Headline earnings up 88%
Headline earnings excl 53rd week and BEE up 26%
CONDENSED GROUP INCOME STATEMENT – AUDITED
R'000 Year ended Year ended
30 June 30 June
2012 2011 %
(53 weeks) (52 weeks) Change
Revenue 6 310 052 5 667 494 11
Cost of sales (4 837 024) (4 393 705) 10
Gross profit 1 473 028 1 273 789 16
Share buy-back and distribution to BEE
participants - (51 269) (100)
Selling and marketing expenses (894 960) (814 558) 10
Administrative expenses (177 745) (166 613) 7
Other operating expenses (4 491) (7 060) (36)
Other income 4 643 4 985 (7)
Operating profit 400 475 239 274 67
Finance cost (706) (704) -
Finance income 33 561 29 759 13
Profit before income tax 433 330 268 329 61
Income tax expense (140 297) (107 207) 31
Profit for the year 293 033 161 122 82
Attributable to:
Owners of the company 286 832 150 220 91
Non-controlling interests 6 201 10 902 (43)
293 033 161 122 82
Earnings per share (cents) 1 261.3 661.6 91
Diluted earnings per share (cents) 1 257.5 657.5 91
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME - AUDITED
Year ended Year ended
R'000 30 June 2012 30 June 2011
(53 weeks) (52 weeks)
Profit for the year 293 033 161 122
Other comprehensive income:
Foreign currency translation adjustments (2 753) (3 200)
Other comprehensive income for the year, net of tax (2 753) (3 200)
Total comprehensive income for the year 290 280 157 922
Total comprehensive income attributable to:
Owners of the company 286 392 147 459
Non-controlling interests 3 888 10 463
290 280 157 922
ADDITIONAL INFORMATION - AUDITED
R'000 Year ended Year ended
30 June 2012 30 June 2011
Net asset value per share (cents) 3 877 3 109
Ordinary shares ('000):
- In issue 25 190 25 190
- Weighted-average 22 742 22 707
- Diluted weighted-average 22 809 22 848
Capital expenditure 110 909 147 042
Depreciation of property, plant and equipment 62 921 55 207
Amortisation of intangible assets 1 876 707
Capital commitments 197 281 115 191
Property operating lease commitments 930 855 871 817
Contingent liabilities 14 337 97 743
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION - AUDITED
R'000 30 June 30 June
2012 2011
ASSETS
Non-current assets 583 333 551 692
Property, plant and equipment 517 006 509 395
Intangible assets 41 687 31 711
Rent prepayments 13 483 -
Deferred income tax assets 11 157 10 586
Current assets 1 342 735 1 584 844
Assets held for sale 18 225 659
Inventories 744 606 788 701
Trade and other receivables 91 958 74 924
Cash and cash equivalents 487 946 720 560
Total assets 1 926 068 2 136 536
EQUITY AND LIABILITIES
Shareholders' equity 988 082 838 118
Share capital and reserves 976 674 783 255
Non-controlling interests 11 408 54 863
Non-current liabilities 89 241 80 196
Deferred operating lease liability 85 122 75 715
Deferred profit 1 647 1 699
Deferred income tax liability - 125
Borrowings (non interest-bearing) 2 472 2 657
Current liabilities 848 745 1 218 222
Trade and other liabilities 837 661 1 179 761
Current income tax liabilities 8 768 36 336
Employee benefits 2 316 2 125
Total equity and liabilities 1 926 068 2 136 536
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY – AUDITED
R’000 Attributable to owners of the company
Share Cum. Non-
Treasury based trans- Control-
Share share Treasury pay- lation ling
capi- capi- Share share ment adjust- Retained inte- Total
tal tal premium premium reserve ment earnings rests equity
Balance at 1 July 2010
258 (29) 115 817 (83 686) 2 151 (11 641) 674 596 52 140 749 606
Total comprehensive income for the year
- - - - - (2 761) 150 220 10 463 157 922
Dividend paid
- - - - - - (64 488) (7 740) (72 228)
Share buy back
(6) 6 (49 994) 49 994 - - - - -
Recognition of share based payments
- - - - 2 818 - - - 2 818
Closing balance at 30 June 2011
252 (23) 65 823 (33 692) 4 969 (14 402) 760 328 54 863 838 118
Total comprehensive income for the year
- - - - - (440) 286 832 3 888 290 280
Dividend paid
- - - - - - (98 817) (569) (99 386)
Buy-out of minority in subsidiary
- - - - - - (15 437) (46 774) (62 211)
Shares sold by the Cashbuild Share Incentive Trust
- 3 - 5 360 - - 8 269 - 13 632
Recognition of share based payments
- - - - 7 649 - - - 7 649
Closing balance at 30 June 2012
252 (20) 65 823 (28 322) 12 618 (14 842) 941 175 11 408 988 082
CONDENSED GROUP CASH FLOW STATEMENT - AUDITED
R'000 Year ended Year ended
30 June 2012 30 June 2011
Cash flows from operating activities
Cash generated from operations 151 553 464 568
Interest paid (706) (704)
Taxation paid (168 561) (91 792)
Net cash (utilised)/generated from
operating activities (17 714) 372 072
Cash flows from investing activities
Net investment in assets (97 577) (146 622)
Interest received 33 561 29 759
Net cash used in investing activities (64 016) (116 863)
Cash flows from financing activities
Increase in other borrowings (185) 230
Proceeds from exercise of share options 13 632 -
Dividends paid
- own equity (98 817) (64 488)
- non-controlling interests (569) (7 740)
Increase in shareholding in subsidiary (62 211) -
Net cash used in financing activities (148 150) (71 998)
Net (decrease)/increase in cash and
cash equivalents (229 880) 183 211
Effect of exchange rate movements on cash and
cash equivalents (2 734) (4 931)
Cash and cash equivalents at beginning of year 720 560 542 280
Cash and cash equivalents at end of year 487 946 720 560
CONDENSED GROUP SEGMENTAL ANALYSIS - AUDITED
R'000 Year ended Year ended
South Africa 30 June 2012 30 June 2011
Income statement
Revenue 5 505 910 4 882 594
Operating profit 343 452 194 025
Statement of financial position
Segment assets 1 519 637 1 731 567
Segment liabilities 768 834 1 091 717
Other segment items
Depreciation 56 356 49 721
Amortisation 1 869 707
Capital expenditure 98 466 125 342
Other members of common monetary area*
Income statement
Revenue 523 871 505 390
Operating profit 32 844 33 039
Statement of financial position
Segment assets 279 636 280 092
Segment liabilities 124 740 149 582
Other segment items
Depreciation 3 847 3 537
Amortisation - -
Capital expenditure 5 144 17 122
Botswana and Malawi
Income statement
Revenue 280 271 279 510
Operating profit 24 179 12 210
Statement of financial position
Segment assets 126 795 124 877
Segment liabilities 44 412 57 119
Other segment items
Depreciation 2 718 1 949
Amortisation 7 -
Capital expenditure 7 299 4 578
Group
Income statement
Revenue 6 310 052 5 667 494
Operating profit 400 475 239 274
Statement of financial position
Segment assets 1 926 068 2 136 536
Segment liabilities 937 986 1 298 418
Other segment items
Depreciation 62 921 55 207
Amortisation 1 876 707
Capital expenditure 110 909 147 042
*Includes Namibia, Swaziland and Lesotho
NOTES TO THE CONDENSED GROUP ANNUAL FINANCIAL INFORMATION
1. Basis of preparation. The condensed consolidated financial information
("financial information") announcement is based on the audited financial
statements of the group for the year ended 30 June 2012 which have been
prepared in accordance with International Financial Reporting Standards
("IFRS"), the Listings Requirements of the JSE and the Companies Act of South
Africa (2008) and consistently applied to the prior year. The financial
statements have been prepared by the Financial Director, Mr AE Prowse CA(SA)
and were approved by the board on 17 September 2012.
2. Independent audit by the auditors. These condensed consolidated results
have been audited by our auditors PricewaterhouseCoopers Inc., who have
performed their audit in accordance with the International Standards on
Auditing.
A copy of their unqualified audit report is available for inspection at the
registered office of the company.
3. Earnings per share. Earnings per share is calculated by dividing the
earnings attributable to owners of the company for the year by the weighted
average number of 22 742 446 ordinary shares in issue during the year (June
2011: 22 706 987 shares).
4. Headline earnings per ordinary share. The calculations of headline earnings
and diluted headline earnings per ordinary share are based on headline
earnings of R285.6 million (June 2011: R151.8 million) and a weighted average
of 22 742 446 (June 2011: 22 706 987) and fully diluted of 22 809 260
(June 2011: 22 847 567) ordinary shares in issue.
Reconciliation between net profit attributable to the equity holders of the
company and headline earnings: %
R'000 Jun-12 Jun-11 Change
Net profit attributable to the owners of
the company 286 832 150 220 91
(Profit)/loss on sale of assets after taxation (1 264) 1 594
Headline earnings 285 568 151 814 88
Headline earnings per share (cents) 1 255.7 668.6 88
Diluted headline earnings per share (cents) 1 252.0 664.5 88
5. Unaudited pro-forma information illustrating the impact of the 53rd week on
the annual results for the year ended 30 June 2012 and the impact of the BEE
Transaction on the annual results for the year ended 30 June 2011.
The group adopts the retail accounting calendar, which comprises the reporting
period ending on the last Saturday of the month (2012: 30 June (53 weeks);
2011: 25 June (52 weeks)). Although Cashbuild has reported financial results
for the year (53 weeks) to 30 June 2012, it is appropriate and good practice
to illustrate pro-forma information of the comparative 52 week period for the
user of these financial statements.
During the 2011 financial year, the company concluded a BEE transaction, the
impact of which is reversed within the unaudited pro-forma results for the
year to 30 June 2011.
The unaudited pro-forma information presented below has been prepared for
illustrative purposes only, to indicate how such information compares to the
unaudited pro-forma results of the group for the prior 52-week period ended 25
June 2011. The directors of the company are responsible for the compilation,
contents and preparation of the unaudited pro-forma financial information.
Audited Unaudited
Actual Actual
R'000 2012 2012
(53 weeks) 53rd week (52 weeks)
Revenue 6 310 052 131 145 6 178 907
Operating profit 400 475 33 765 366 710
Net profit attributable to owners
of the company 286 832 24 109 262 723
Headline earnings 285 568 24 109 261 459
Earnings per share (cents) 1 261.3 1 155.2
Headline earnings per share (cents) 1 255.7 1 149.7
Net asset value per share (cents) 3 877 3 782
Unaudited Audited
Actual BEE Actual
% Change 2011 Transaction 2011
(52 weeks) (52 weeks)
Revenue 9 5 667 494 - 5 667 494
Operating profit 26 290 543 (51 269) 239 274
Net profit attributable to
owners of the company 27 206 489 (56 269) 150 220
Headline earnings 26 208 083 (56 269) 151 814
Earnings per share 909.4 661.6
Headline earnings per share 916.4 668.6
Net asset value per share 3 333 3 109
Notes:
1. The accounting policies adopted in the latest audited annual financial
statements, which have been prepared in accordance with IFRS, have been used
in preparing the unaudited pro-forma information.
2. The "53rd week" column represents the actual sales of product for the 53rd
week less directly related costs, net of taxation. Cost of sales and directly
related variable operating expenses are calculated based on the actual
percentages achieved during the current financial year. The cost of sales of
the 53rd week also includes an additional month's settlement discount relating
to the trade suppliers' payment at the year-end.
3. The "BEE Transaction" column relates to a BEE transaction in which shares
to the value of R50 million were repurchased by the company from the Cashbuild
Empowerment Trust. The value realised by this transaction was distributed to
the beneficiaries of the Trust. This distribution was reported as a personnel
expense in the condensed group income statement. The associated transactional
cost, including the tax effects of the transaction were also accounted for.
4. Our auditors have issued a limited assurance report on the unaudited pro-
forma financial information. A copy of their report is available for
inspection at the registered office of the company.
6. Declaration of dividend. The board has declared a final dividend (No 39),
of 273 cents (June 2011: 139 cents) per ordinary share out of income reserves
to all shareholders of Cashbuild Limited. The dividend per share is calculated
based on 25 189 811 (June 2011: 25 189 811) shares in issue at date of
dividend declaration. Net local dividend amount is 232.05 cents per share for
shareholders liable to pay Dividends Tax and 273 cents per share for
shareholders exempt from paying Dividends Tax.
The total dividend for the year amounts to 569 cents (June 2011: 296 cents), a
92% increase year on year. Local dividend tax is 15% and there are no STC
credits available for use. Cashbuild Limited’s tax reference number is
9575168712.
Date dividend declared: Monday, 17 September 2012
Last day to trade "CUM" the dividend: Friday, 5 October 2012
Date commence trading "EX" the dividend: Monday, 8 October 2012
Record date: Friday, 12 October 2012
Date of payment: Monday, 15 October 2012
Share certificates may not be dematerialised or rematerialised between Monday,
8 October 2012 and Friday, 12 October 2012, both dates inclusive.
On behalf of the board
DONALD MASSON WERNER DE JAGER
Chairman Chief executive
Johannesburg 17 September 2012
COMMENTARY
NATURE OF BUSINESS
Cashbuild is southern Africa’s largest retailer of quality building materials
and associated products, selling direct to a cash-paying customer-base through
our constantly expanding chain of stores (191 at the end of this reporting
year). Cashbuild carries an in-depth quality product range tailored to the
specific needs of the communities we serve. Our customers are typically home-
builders and improvers, contractors, farmers, traders, large construction
companies and government-related infrastructure developers, as well as all
other customers requiring quality building materials at lowest prices.
Cashbuild has built its credibility and reputation by consistently offering
its customers quality building materials at the lowest prices and through a
purchasing and inventory policy that ensures customers’ requirements are
always met.
INTERNATIONAL FINANCIAL REPORTING STANDARDS
The group is reporting its audited results in accordance with International
Financial Reporting Standards (“IFRS”).
FINANCIAL HIGHLIGHTS
Revenue for the year increased by 11% and gross profit increased by a pleasing
16%. Operating expenses increased by 9% (excluding the effects of the BEE
transaction in the prior year) resulting in an increase in operating profit of
67%. Basic earnings per share increased by 91% and headline earnings per share
increased by 88%. Net asset value per share has shown a 25% increase, from 3
109 cents (June 2011) to 3 877 cents.
Stores in existence since the beginning of July 2010 (pre-existing stores –
182 stores) accounted for 10% of the increase in revenue with the remaining 1%
increase due to the nine new stores the group has opened since July 2010. This
increase for the year has been achieved in tough trading conditions with
selling price inflation of 3%. The growth in customer transactions of 2% (of
which 1% is from the existing store base) remains an area of focus for
management.
Despite the competitive environment, gross profit percentage margin increased
to 23.3% during this year and was 0.8% higher in percentage terms than the
22.5% achieved for the prior financial year.
Operational expenses for the year remained well controlled with existing
stores accounting for 7% of the increase and new stores 2% bringing the total
increase for the year to 9%. The main contributor to the increase on existing
stores is the people cost component in order to maintain and improve customer
service standards.
The effective tax rate for the year of 32% is 8% lower than that of the
previous year, largely due to the non deductibility and related STC effect of
the BEE transaction in the prior year.
Cashbuild’s statement of financial position remains solid. Stock levels have
decreased by 6%. Overall stockholding at 63 days (June 2011: 72 days) is in
line with management’s expectations. Trade receivables remain well under
control. Cash and cash equivalents decreased by 32% to R488 million as a
results of payments to suppliers affected prior to year-end close resulting
from the 53rd week.
During the period, Cashbuild opened four new stores, 13 stores were
refurbished and three stores were relocated. Four stores trading in close
proximity to other Cashbuild stores were closed during the year. Cashbuild
will continue its store expansion, relocation and refurbishment strategy in a
controlled manner, applying the same rigorous process as in the past , however
expecting an increase in the number of new stores compared to the prior two
years.
PROSPECTS
The first nine trading weeks since year-end have reported an increase in
revenue of 5% on that of the comparable nine weeks, which is an indication of
the tough trading conditions. This general information has not been reviewed
nor audited by the company's auditors.
Directors: D Masson* (Chairman), WF de Jager (Chief executive), IS Fourie*, HH
Hickey*, AGW Knock*, Dr DSS Lushaba*, AE Prowse, NV Simamane*, SA Thoresson, A
van Onselen
(*non-executive)
Company secretary: Corporate Governance Leaders CC
Registered office: 101 Northern Parkway, Ormonde, Johannesburg 2091
PO Box 90115, Bertsham 2013
Transfer secretaries: Computershare Investor Services (Pty) Limited, 70
Marshall Street, Johannesburg 2001. PO Box 61051, Marshalltown 2107
Auditors: PricewaterhouseCoopers Inc.
Sponsor: Nedbank Capital
QUALITY BUILDING MATERIALS AT THE LOWEST PRICES
www.cashbuild.co.za
Date: 18/09/2012 11:18:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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