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Audited consolidated interim results and dividend declaration December 2012
Cashbuild Limited
(Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE Share Code: CSB ISIN: ZAE000028320
AUDITED CONSOLIDATED INTERIM RESULTS AND DIVIDEND DECLARATION DECEMBER 2012
Revenue up 2% Operating profit down 6% Headline earnings up 1% Net asset value per share up 20%
CONDENSED CONSOLIDATED INCOME STATEMENT - AUDITED
Six months Year
ended ended
31 December 30 June
2012 2011 % 2012
R000 (26 weeks) (26 weeks) change (53 weeks)
Revenue 3 317 770 3 252 822 2 6 310 052
Cost of sales (2 556 647) (2 511 908) 2 (4 837 024)
Gross profit 761 123 740 914 3 1 473 028
Selling and marketing expenses (486 825) (451 951) 8 (894 960)
Administrative expenses (76 286) (78 041) (2) (177 745)
Other operating expenses (2 251) (2 761) (18) (4 491)
Other income 349 992 (65) 4 643
Operating profit 196 110 209 153 (6) 400 475
Finance cost (441) (117) 277 (706)
Finance income 18 695 14 298 31 33 561
Profit before income tax 214 364 223 334 (4) 433 330
Income tax expense (63 007) (70 660) (11) (140 297)
Profit for the period 151 357 152 674 (1) 293 033
Attributable to:
Owners of the company 149 750 149 080 - 286 832
Non-controlling interests 1 607 3 594 (55) 6 201
151 357 152 674 (1) 293 033
Earnings per share (cents) 649.1 656.5 (1) 1 261.3
Diluted earnings per share (cents) 641.6 651.2 (1) 1 257.5
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - AUDITED
Six months Year
ended ended
31 December 30 June
2012 2011 2012
R'000 (26 weeks) (26 weeks) (53 weeks)
Profit for the period 151 357 152 674 293 033
Other comprehensive income:
Foreign currency translation adjustments (1 677) 3 823 (2 753)
Other comprehensive income for the period,
net of tax (1 677) 3 823 (2 753)
Total comprehensive income for the period 149 680 156 497 290 280
Total comprehensive income attributable to:
Owners of the company 149 221 152 488 286 392
Non-controlling interests 459 4 009 3 888
149 680 156 497 290 280
ADDITIONAL INFORMATION - AUDITED
Six months Year
ended ended
31 December 30 June
R'000 2012 2011 2012
Net asset value per share (cents) 4 233 3 542 3 877
Ordinary shares ('000):
- In issue 25 190 25 190 25 190
- Weighted-average 23 071 22 707 22 742
- Diluted weighted-average 23 339 22 893 22 809
Capital expenditure 127 892 46 448 110 909
Depreciation of property, plant and equipment 34 815 29 576 62 921
Amortisation of intangible assets 3 080 462 1 876
Capital commitments 184 810 168 603 197 281
Property operating lease commitments 860 587 851 773 930 855
Contingent liabilities 1 831 34 557 14 337
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AUDITED
31 December 30 June
R'000 2012 2011 2012
ASSETS
Non-current assets 669 799 554 410 583 333
Property, plant and equipment 598 735 510 901 517 006
Intangible assets 47 225 34 005 41 687
Rent prepayments 17 027 - 13 483
Deferred income tax assets 6 812 9 504 11 157
Current assets 1 623 440 1 975 804 1 342 735
Assets held for sale 17 656 13 577 18 225
Inventories 950 212 861 834 744 606
Trade and other receivables 138 583 74 081 91 958
Cash and cash equivalents 516 989 1 026 312 487 946
Total assets 2 293 239 2 530 214 1 926 068
EQUITY AND LIABILITIES
Shareholders' equity 1 078 000 904 397 988 082
Share capital and reserves 1 066 376 892 299 976 674
Non-controlling interests 11 624 12 098 11 408
Non-current liabilities 92 186 85 184 89 241
Deferred operating lease liability 87 865 81 152 85 122
Deferred profit 1 621 1 673 1 647
Borrowings (non interest-bearing) 2 700 2 359 2 472
Current liabilities 1 123 053 1 540 633 848 745
Trade and other liabilities 1 080 182 1 495 329 837 661
Current income tax liabilities 40 378 43 095 8 768
Employee benefits 2 493 2 209 2 316
Total equity and liabilities 2 293 239 2 530 214 1 926 068
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - AUDITED
R000 Attributable to owners of the company
Share Cum.
Treasury based trans- Non-
Share share Treasury pay- lation Controlling
capi- capi- Share share ment adjust- Retained inte- Total
tal tal premium premium reserve ment earnings rests equity
Balance at 1 July 2011
252 (23) 65 823 (33 692) 4 969 (14 402) 760 328 54 863 838 118
Total comprehensive income for the period
- - - - - 3 408 149 080 4 009 156 497
Buy-out of minority in subsidiary
- - - - - - (15 437) (46 774) (62 211)
Dividend paid
- - - - - - (31 563) - (31 563)
Recognition of share based payments
- - - - 3 556 - - - 3 556
Balance at 31 December 2011
252 (23) 65 823 (33 692) 8 525 (10 994) 862 408 12 098 904 397
Total comprehensive income for the period
- - - - - (3 848) 137 753 (121) 133 784
Dividend paid
- - - - - - (67 255) (569) (67 824)
Recognition of share based payments
- - - - 4 093 - - - 4 093
Shares sold by The Cashbuild Share Incentive Trust
- 3 - 5 360 - - 8 269 - 13 632
Balance at 30 June 2012
252 (20) 65 823 (28 332) 12 618 (14 842) 941 175 11 408 988 082
Total comprehensive income for the period
- - - - - (529) 149 750 459 149 680
Increase in shareholding of subsidiary
- - - - - - (497) 437 (60)
Dividend paid
- - - - - - (62 955) (680) (63 635)
Recognition of share based payments
- - - - 3 441 - - - 3 441
Shares sold by The Cashbuild Share Incentive Trust
- - - 766 - - 1 075 - 1 841
Shares purchased by the The Cashbuild Operations Management Trust
- - - (1 349) - - - - (1 349)
Balance at 31 December 2012
252 (20) 65 823 (28 915) 16 059 (15 371)1 028 548 11 624 1 078 000
CONDENSED CONSOLIDATED CASH FLOW STATEMENT AUDITED
Six months Year
ended ended
31 December 30 June
R'000 2012 2011 2012
Cash flows from operating activities
Cash generated from operations 226 130 491 911 151 553
Interest paid (441) (117) (706)
Taxation paid (27 051) (62 944) (168 561)
Net cash generated from operating
activities 198 638 428 850 (17 714)
Cash flows from investing activities
Net investment in assets (124 737) (46 005) (97 577)
Interest received 18 695 14 298 33 561
Net cash used in investing activities (106 042) (31 707) (64 016)
Cash flows from financing activities
Decrease/(increase) in borrowings 228 (298) (185)
Shares sold by The Cashbuild Share Incentive 1 841 - 13 632
Trust
Shares purchased by The Cashbuild Operations
Management Trust (1 349) - -
Dividends paid
- own equity (62 955) (31 563) (98 817)
- non-controlling interests (680) - (569)
Increase in shareholding of subsidiary (60) (62 211) (62 211)
Net cash used in financing activities (62 975) (94 072) (148 150)
Net increase in cash and cash equivalents 29 621 303 071 (229 880)
Effect of exchange rate movements on cash
and cash equivalents (578) 2 681 (2 734)
Cash and cash equivalents at beginning
of period 487 946 720 560 720 560
Cash and cash equivalents at end
of period 516 989 1 026 312 487 946
CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS - AUDITED
Six months Year
ended ended
31 December 30 June
R'000 2012 2011 2012
SOUTH AFRICA
Income statement
Revenue 2 917 466 2 834 633 5 505 910
Operating profit 173 248 177 831 343 452
Statement of financial position
Segment assets 1 849 484 2 052 645 1 519 637
Segment liabilities 1 025 756 1 373 690 768 834
Other segment items
Depreciation 31 020 26 962 56 356
Amortisation 3 080 462 1 869
Capital expenditure 108 391 39 596 98 466
OTHER MEMBERS OF COMMON MONETARY AREA*
Income statement
Revenue 257 682 277 589 523 871
Operating profit 12 618 18 482 32 844
Statement of financial position
Segment assets 301 144 325 496 279 636
Segment liabilities 137 674 180 334 124 740
Other segment items
Depreciation 2 338 1 529 3 847
Amortisation - - -
Capital expenditure 16 226 6 562 5 144
* Includes Namibia, Swaziland and Lesotho
BOTSWANA AND MALAWI
Income statement
Revenue 142 622 140 600 280 271
Operating profit 10 244 12 840 24 179
Statement of financial position
Segment assets 142 611 152 073 126 795
Segment liabilities 51 809 71 793 44 412
Other segment items
Depreciation 1 456 1 085 2 718
Amortisation - - 7
Capital expenditure 3 275 290 7 299
GROUP
Income statement
Revenue 3 317 770 3 252 822 6 310 052
Operating profit 196 110 209 153 400 475
Statement of financial position
Segment assets 2 293 239 2 530 214 1 926 068
Segment liabilities 1 215 239 1 625 817 937 986
Other segment items
Depreciation 34 814 29 576 62 921
Amortisation 3 080 462 1 876
Capital expenditure 127 892 46 448 110 909
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
1. Basis of preparation. The condensed consolidated interim financial information ("financial information") announcement is based on the audited interim financial statements of the group for the period ended 31 December 2012 which have been prepared in accordance with International Financial Reporting Standards ("IFRS") and the presentation and disclosure requirements of IAS 34 - Interim Financial Reporting, the Listings Requirements of the JSE and the Companies Act of South Africa (2008) and consistently applied to the prior period. The financial statements have been prepared by the financial director, Mr. AE Prowse CA (SA), and were approved by the board on 11 March 2013.
2. Independent audit by the auditors. These condensed consolidated interim 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. Reporting period. The group adopts the retail accounting calendar, which comprises the reporting period ending on the last Saturday of the month (2012: 29 December (26 weeks); 2011: 24 December (26 weeks); June 2012: 30 June (53 weeks)).
4. Earnings per share. Earnings per share is calculated by dividing the earnings attributable to owners of the company for the period by the weighted average number of 23 071 449 ordinary shares in issue during the period.
(December 2011: 22 706 987 shares; June 2012: 22 742 446 shares).
5. Headline earnings per ordinary share. The calculations of headline earnings and diluted headline earnings per ordinary share are based on headline earnings of R150.1 million (December 2011: R149.3 million; June 2012: R285.6 million) and a weighted average of 23 071 449 (December 2011: 22 706 987; June 2012: 22 742 446) and fully diluted of 23 339 190 (December 2011: 22 892 962; June 2012: 22 809 260) ordinary shares in issue.
Reconciliation between net profit attributable to the owners of the company and headline earnings:
%
R'000 Dec-12 Dec-11 change Jun-12
Net profit attributable to the owners
of the company 149 750 149 080 - 286 832
Loss/(profit) on sale of assets after
taxation 398 208 (1 264)
Headline earnings 150 148 149 288 1 285 568
Headline earnings per share (cents) 650.8 657.5 (1) 1 255.7
Diluted headline earnings per share
(cents) 643.3 652.1 (1) 1 252.0
6.Declaration of dividend.
The board has declared an interim dividend (No. 40), of 296 cents (December 2011: 296 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 shares in issue at date of dividend declaration.
Net local dividend amount is 251.60 cents per share for shareholders liable to pay Dividends Tax and 296 cents per share for shareholders exempt from paying Dividends Tax. 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, 11/03/2013
Last day to trade "CUM" the dividend: Friday, 05/04/2013
Date commence trading "EX" the dividend: Monday, 08/04/2013
Record date: Friday, 12/04/2013
Date of payment: Monday, 15/04/2013
Share certificates may not be dematerialised or rematerialised between Monday, 08 April 2013 and Friday, 12 April 2013, both dates inclusive.
On behalf of the board
DONALD MASSON WERNER DE JAGER
Chairman Chief Executive
Johannesburg
11 March 2013
COMMENTARY
NATURE OF BUSINESS
Cashbuild is southern Africas largest retailer of quality building materials and associated products, selling direct to a cash-paying customer-base through our constantly expanding chain of stores (194 at the end of this reporting period). 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 interim results in accordance with International Financial Reporting Standards (IFRS).
FINANCIAL HIGHLIGHTS
Revenue for the half year increased by 2% and gross profit increased by 3%. Although the increase in operating expenses was curtailed to 6%, this resulted in operating profit decreasing by 6%. Basic earnings per share decreased by 1% and headline earnings per share decreased by 1%. Net asset value per share has shown a 20% increase, from 3 542 cents (December 2011) to 4 233 cents.
Cash and cash equivalents at R517 million are as a result of payments to suppliers being affected before the half year-end close.
Revenue from stores in existence since the beginning of July 2011 (pre-existing stores 187 stores) were at similar levels to the prior period while the 2% increase in revenue was due to the seven new stores the group has opened since July 2011. Revenue for the half year has been achieved in tough trading conditions with selling price inflation of 2%. The lack of growth in customer transactions (2% growth was from the new stores with a decline of 2% from existing stores) remains an area of focus for management.
Despite the competitive environment, gross profit percentage margin increased to 22.9% during this half year and is lower in percentage terms than the 23.3% achieved for the previous full financial year.
Operational expenses for the half year remained well controlled with existing stores accounting for 4% of the increase and new stores 2%. The total increase for the half year amounted to 6%. 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 half year of 29% is 3% lower than that of the previous half year, mainly due to the change from STC to a dividend withholding tax.
Cashbuilds statement of financial position remains solid. Stock levels have increased by 10% (3% from new stores), resulting in stock-holding at 70 days (December 2011: 60 days) due to planned stocking to cater for supplier closure period in December and early January. Trade and other receivables, although increased, remain well under control.
During the period, Cashbuild opened three new stores. 12 stores were refurbished and four stores relocated. Cashbuild will continue its store expansion, relocation and refurbishment strategy in a controlled manner, applying the same rigorous process as in the past.
The interim dividend declared of 296 cents per share (2011: 296 cents) is at similar levels to that of the prior comparative period.
PROSPECTS
Management expects trading conditions to remain depressed during the next quarter and will continue to drive the business model as well as take advantage of business opportunities. The first eight weeks trading since period-end have reported a decrease in revenue of 1% on that of the comparable eight weeks.
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: 12/03/2013 07:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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