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Unaudited Interim Group Results for the six months ended 30 September 2012
Dorbyl Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1911/001510/06)
Share Code: DLV ISIN Code: ZAE000002184
(“Dorbyl” or "the Company" or "the Group")
UNAUDITED INTERIM GROUP RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER
2012
STATEMENT OF COMPREHENSIVE INCOME
Unaudited
Unaudited 6 months to Audited
6 months to September Year to
September 2011 March
2012 R’000 2012
R’000 R’000 R’000
Revenue 80 722 71 751 143 461
Cost of sales (91 467) (82 647) (187 271)
Gross loss (10 745) (10 896) (43 810)
Other operating income 51 888 2 608
Administrative expenses (6 205) (10 247) (24 652)
Sale and distribution expenses (2 304) (1 848) (4 407)
Other operating expenses (808) (11 527) (8 099
Operating loss (20 011) (33 630) (78 360)
Net finance income 180 1 604 1 640
Finance income 287 1 711 2 606
Finance costs (107) (107) (966)
Other income 2 975 - -
Loss before taxation (16 856) (32 026) (76 720)
Income tax (expense) / relief - (13) 7 397
Loss after taxation (16 856) (32 039) (69 323)
Other comprehensive income
Revaluation of property 808 4 173 9 773
Deferred tax on revaluation of
property - - (7 532)
Other comprehensive income for
the period, net of income tax 808 4 173 2 241
Total comprehensive loss for the
period (16 048) (27 866) (67 082)
Loss attributable to:
Equity holders of the parent (16 856) (32 039) (69 071)
Non-controlling interest - - (252)
Loss for the period (16 856) (32 039) (69 323)
Total comprehensive loss
attributable to:
Equity holders of the parent (16 048) (27 866) (66 830)
Non-controlling interest - - (252)
Total comprehensive loss for the
period (16 048) (27 866) (67 082)
Loss per share (cents)
Basic and diluted loss per share (49.7) (94.4) (203.6)
Headline loss reconciliation:
Loss for the period (16 856) (32 039) (69 071)
Impairment / (reversal) of assets - - 1
Headline loss (16 856) (32 039) (69 070)
Headline and diluted headline
loss per share (cents) (49.7) (94.4) (203.6)
Depreciation and amortisation (825) (448) (1 529)
Finance income 287 1 711 2 606
Interest received 217 1 558 2 176
Foreign exchange gains 70 153 430
Finance costs (107) (107) (966)
Interest paid (1) (1) (66)
Foreign exchange losses - - (688)
Interest paid – preference shares (106) (106) (212)
Other income 2 975 - -
The other income specifically refers to funds recovered from the
retirement benefits of Mr EJ Vorster.
STATEMENT OF FINANCIAL POSITION
Restated
Unaudited Unaudited Audited
6 months to 6 months to
September September March
2012 2011 2012
R’000 R’000 R’000
ASSETS
Non-current assets 54 445 61 043 64 326
Property, plant and equipment 54 264 49 186 54 229
Investment in PFV fund 181 11 857 10 097
Current assets 47 612 104 091 52 398
Inventories 16 422 24 573 16 796
Taxation receivable - 47 -
Trade and other receivables 22 994 34 204 20 958
Employee benefits - 1 503 -
Cash and cash equivalents 8 196 43 764 14 644
Total assets 102 057 165 134 116 724
EQUITY AND LIABILITIES
Total equity 24 063 79 699 40 111
Equity attributable to equity
holders of the parent 24 063 79 075 40 111
Non-controlling interest - 624 -
Non-current liabilities 39 147 40 811 39 147
Preference shares 3 980 3 980 3 980
Employee benefits 35 167 36 831 35 167
Current liabilities 38 847 44 624 37 466
Trade and other payables 38 085 44 616 36 704
Employee benefits 758 - 758
Taxation payable 4 8 4
Total equity and liabilities 102 057 165 134 116 724
Capital commitments authorised - - -
Authorised and contracted for - - -
Authorised but not contracted for - - -
Operating lease commitments - 1 349 2 482
Operating lease receivables - 842 -
Net asset value per share (cents) 71 233 118
Acquisition of property, plant and
equipment
Replacement 51 1 240 1 764
Ordinary shares (000)
Issued - net of treasury shares 33 924 33 924 33 924
Weighted average number of shares
- net of treasury shares 33 924 33 924 33 924
STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 months to 6 months to Year to
September September March
2012 2011 2012
R’000 R'000 R'000
Cash flows from operating
activities (6 665) (43 266) (72 107)
Loss for the period (16 856) (32 039) (69 323)
Adjustments for:
Depreciation 825 448 1 529
Impairment losses on investment
in associate - - 1
Net interest income (111) (1 451) (1 898)
Income tax expense / (relief) - 13 (7 397)
Operating cash flow (16 142) (33 029) (77 088)
Changes in inventories 374 757 8 534
Changes in trade and other
receivables (2 087) (10 965) 2 281
Change in trade and other
payables 1 381 389 (7 523)
Change in provisions and employee
benefits 9 916 (300) 2 057
Cash utilised by operating
activities (6 558) (43 148) (71 739)
Interest paid (107) (107) (278)
Income taxes paid - (11) (90)
Cash flows from investing
activities 217 5 965 5 686
Interest received 217 1 558 2 176
Acquisition of property, plant
and equipment - (1 240) (1 764)
Disposal of discontinued
operations, net of cash disposed
of - 5 647 5 646
Changes in advances made to
associate - - (372)
Cash flows from financing
activities - - -
Net decrease in cash and cash
equivalents (6 448) (37 301) (66 421)
Cash and cash equivalents at
beginning of period 14 644 81 065 81 065
Cash and cash equivalents at end
of period 8 196 43 764 14 644
STATEMENT OF CHANGES IN EQUITY
Equity
holders Non-con-
Stated Retained of the trolling Total
capital Reserves earnings parent interest equity
R’000 R’000 R’000 R’000 R’000 R’000
Balance at 31
March 2011 11 248 25 771 69 922 106 941 624 107 565
Total
comprehensive
income for the
period
Loss for the
period - - (32 039) (32 039) - (32 039)
Total other
comprehensive
income for the
period - 3 934 239 4 173 - 4 173
Revaluation of
property - 4 173 - 4 173 - 4 173
Transfer
relating to
depreciation on
revaluation of
property - (239) 239 - - -
Balance 30
September 2011 11 248 29 705 38 122 79 075 624 79 699
Total
comprehensive
income for the
period
Loss for the
period - - (37 032) (37 032) (252) (37 284)
Total other
comprehensive
income for the
period - (2 180) 248 (1 932) - (1 932)
Revaluation of
property - 5 600 - 5 600 - 5 600
Deferred tax on
revaluation of
property - (7 532) - (7 532) - (7 532)
Transfer
relating to
depreciation on
revaluation of
property - (248) 248 - - -
Transactions
with owners,
recorded
directly to
equity:
Total
contributions
by and
distribution to
owners - - - - (372) (372)
Reduction in
non-controlling
interest - - - - (372) (372)
Balance 31
March 2012 11 248 27 525 1 338 40 111 - 40 111
Equity
holders Non-con-
Stated Retained of the trolling Total
capital Reserves earnings parent interest equity
R’000 R’000 R’000 R’000 R’000 R’000
Total
comprehensive
income for the
period
Loss for the
period - - (16 856) (16 856) - (16 856)
Total other
comprehensive
income for the
period - 607 201 808 - 808
Revaluation of
property - 808 - 808 - 808
Transfer
relating to
depreciation on
revaluation of
property - (201) 201 - - -
Balance 30
September 2012 11 248 28 132 (15 317) 24 063 - 24 063
REVIEW OF OPERATIONS AND INTERIM GROUP RESULTS
The results for the period under review as presented in the above
financial statements were an improvement on previous results but are
still unsatisfactory.
Product prices were increased sharply in the earlier months of this
period which had a positive impact on the results. The weakening of the
Rand over the same period helped to cushion the impact of these
increases to a large extent.
In the second part of the period the main activities were aimed at
finding potential strategic investors for Dorbyl Limited as the then
main shareholder, the RECM/Reef consortium, had indicated that they
would not be interested to make an offer for the remainder of the
shares. They sold their shares on 14 September 2012 to African Dune
Investments 311 (Pty) Ltd.
Al the above led to a chain of subsequent events as summarised below.
Subsequent events and Prospects
Two offers for the Dorbyl shares were received, one from African Dune
and one from an IDC Consortium as reported in our Integrated Report
released on 20 November 2012.
The African Dune offer opened on 19 November 2012 and will close at
12:00 on 28 December 2012 as explained in our SENS announcement dated 29
November 2012.
A revised offer by the IDC (on behalf of Naledi Foundry of Republic of
South Africa Proprietary Limited) was announced on SENS on 7 December
2012 which included an increase in the initial offer consideration of 73
cents per ordinary share to 85 cents per ordinary share (as well as two
offers to the respective preference shareholders).
The Dorbyl Independent Board provided their views:
On the African Dune offer in a response circular to Dorbyl
shareholders on 13 December 2012; and
On the revised IDC offer in a joint circular dated 18 December 2012
The Independent Board recommended to shareholders to accept the revised
IDC offer.
Whilst these offer processes were underway, the Dorbyl Guestro operation
experienced cash flow problems, to such an extent that a financial
distressed announcement was issued on 8 October 2012 and all
stakeholders were informed as such. This made operations difficult but
through exceptional recommendable gallant efforts by all involved – all
employees, management, directors, suppliers, customers and shareholders
– the plant remained in operation and had two better months in October
and November and will open again for business on 9 January 2013.
The Board wishes to sincerely thank all those who have been deeply
involved, with a lot of public or very private efforts, to ensure that
Dorbyl Guestro Castings remained a continuing business.
The fact that the two offer processes are soon coming to an end is a
positive and supports the Board’s view that with either one of these
offers materialising, Dorbyl can remain a going concern.
Net asset value as at 30 September 2012
The net asset value per share as at 30 September 2012 at 71 cents per
share is 47 cents lower than the 118 cents per share as at 31 March
2012.
The net asset value is mainly attributable to Guestro Castings, the
Benoni Property, cash and the historical employee benefit liabilities.
The net asset value at 30 September 2012 can be summarised as follows:
Benoni property R46,4 million or 137 cents per share
Casting business R20,3 million or 60 cents per share
Cash R 8,2 million or 24 cents per share
Less:
Net employee fund liabilities R35,7 million or (105) cents per share
Other net corporate liabilities R15,1 million or (45) cents per share
Total net asset value R24,1 million
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.
Basis of preparation
The results for the six months ended 30 September 2012 have been
prepared in accordance with International Financial Reporting Standards
(IFRS), IAS 34 – Interim Financial Reporting, the Companies Act 71 of
2008 and the Listings Requirements of the JSE Limited. The accounting
policies are consistent with those applied in the prior comparative
periods.
These unaudited consolidated financial statements for the six months
ended 30 September 2012 have been prepared by Mr J Theron (BCompt Hons -
Accounting sciences).
Directorate
Mr P Steyn was co-opted to the Board on 2 October 2012 as the third
independent non-executive director. The purpose of his appointment was
to duly constitute an Independent Board to oversee the two offer
processes as required in terms of the JSE Listings Requirements and the
Companies Act Regulations. Following the completion of the Independent
Board’s function, he resigned from the Board on 18 December 2012.
Mr J Theron, our Financial Director, leaves us at the end of this month.
The Board wishes to thank him for an exceptional effort the last few
months in trying circumstances and wish him well in his new position.
Dividend
No dividend has been declared in respect of the period under review.
On behalf of the board
RF Röhrs (Chairman and Chief Executive Officer)
20 December 2012
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: P Wentzel
Sponsor and transaction advisor: PSG Capital (Pty) Ltd
Auditors: KPMG Inc
Directors: RF Röhrs (Chairman and Chief Executive Officer)*, J Theron
(Financial Director)*, JC Badenhorst**, TA Morkel**
*Executive director **Independent Non-executive director
Date: 20/12/2012 08:48:00 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,
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