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Unaudited group interim report and interim cash dividend declarations for the six months ended 31 December 2012
ELB GROUP LIMITED
('ELB', 'the Company' or 'the Group')
Incorporated in the Republic of South Africa
Registration number 1930/002553/06
Share codes: ELR & ELRP
ISIN: ZAE000035101 & ZAE000035333
UNAUDITED GROUP INTERIM REPORT and interim cash dividend declarations
for the six months ended 31 December 2012
COMMENTS
INTRODUCTION
The ELB Group is a total solutions provider to the
mining, minerals, power, port, construction and
industrial sectors in the field of materials
handling and appropriate process plants. This is
achieved through ELB generated innovation and
the supply with world class partners of
equipment and technology. The Group operates
mainly in Africa and Australasia.
FINANCIAL RESULTS
The 11,4 percent decrease in turnover for the
period from R858,7 million in 2011 to R760,9
million in 2012 reflects the lower activity level
and revenue recognition across the full range of
products and services offered by ELB's African
operations.
Attributable comprehensive income for the
period was R36,4 million (2011 R29,1 million),
an increase of 25,2 percent. Headline earnings
for the period of R30,3 million (2011 R13,4
million) represents an increase of 126 percent.
The ELB Group will from time to time
experience volatility in headline earnings
particularly during periods of significant
exchange rate fluctuations. These fluctuations
give rise to unrealised currency exchange
profits or losses which experience has shown
usually reverse or are recovered in the eventual
sale price of the relevant equipment.
Net asset value (NAV) per share increased by 4,9
percent from 1 876 cents per share at 30 June
2012 to 1 968 cents per share at 31 December
2012.
OPERATIONS
Equipment Africa
Though equipment revenue during the period
was lower than expected gross margins were
however maintained.
Turnover for the period decreased by 4,9 percent
from R355,0 million in 2011 to R337,6 million in
2012. Profit for the period increased by 146
percent from R6,2 million in 2011 to R15,3 million
in 2012.
This increase in profit is largely attributable to
the exchange rate loss on translation being
significantly less than the prior period.
Engineering Africa
The project work on hand remains at a
satisfactory level with ongoing projects being in
South Africa, Mozambique, Zambia, Namibia,
Botswana, Angola, Sierra Leone, Congo and
the DRC.
Turnover for the period decreased by 31,2 percent
from R377,7 million in 2011 to R259,9 million
in 2012. Profit for the period increased by
11,0 percent from R16,4 million in 2011 to R18,2
million in 2012.
Consistent with prior periods there is no
correlation between turnover and profit due to the
nature of a project related business.
Australasia
Ditch Witch has continued to trade at
encouraging levels for the period across both the
Ditch Witch and Komptech ranges of equipment.
Turnover for the period increased by 27,5 percent
from R128,3 million in 2011 to R163,5 million in
2012. Profit for the period increased by 42,8
percent from R8,2 million in 2011 to R11,7 million
in 2012.
CASH FLOW
Cash flow management remains a high priority
for the Group.
ELB works closely with bankers, suppliers and
customers to ensure we continue to retain a
strong balance sheet at all times.
PROSPECTS
ELB continues to be well positioned to take
advantage of a number of potential projects
currently being considered in Africa.
BOARD OF DIRECTORS
Executive director, Dr Stephen Meijers, was
appointed Chief Executive Officer of the ELB
Group on 28 January 2013.
DIVIDENDS
It has been decided to declare an interim
dividend of 25 cents (2011 18 cents) per
ordinary share which represents an increase of
38,9 percent.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The unaudited group interim condensed financial
statements have been prepared in accordance
with International Accounting Standard: IAS 34
Interim Financial Reporting, the South African
Institute of Chartered Accountants (SAICA)
Financial Reporting Guides and the requirements
of the South African Companies Act. The
unaudited interim group financial statements are
in condensed consolidated form.
The accounting policies are consistent with
those applied in the financial year ended 30 June
2012 and also accord with International Financial
Reporting Standards (IFRS).
On behalf of the Board
AG Fletcher Dr SJ Meijers
Chairman Group Chief Executive Officer
Boksburg
12 March 2013
INTERIM CASH DIVIDEND DECLARATION
The directors have declared the undernoted interim cash dividends for the six months ended
31 December 2012. The interim dividends are subject to South African dividend tax. The following
information is disclosed in respect of the dividends:
- the dividends have been declared out of income reserves,
- the South African dividend tax rate is 15%,
- secondary tax on companies (STC) credits of R2 093 127 are available and will be utilised for the
ordinary dividend and
- ELB Group Limited's income tax reference number is: 9275151711.
Additional information is given below.
PREFERENCE DIVIDEND NUMBER 124
An interim cash dividend has been declared at the rate of 6% per annum for the first six month period
on the 6% fixed cumulative redeemable preference shares of R2 each, equivalent to 6 cents per
preference share.
- The gross dividend is 6 cents per preference share for preference shareholders exempt from
dividend tax.
- The net dividend is 5,1 cents per preference share for preference shareholders liable to pay dividend tax.
ORDINARY DIVIDEND NUMBER 130
An interim cash dividend of 25 cents per share has been declared on the ordinary shares.
- The gross dividend is 25 cents per ordinary share for ordinary shareholders exempt from dividend tax.
- The net dividend is 22,17726 cents per ordinary share, after utilising the STC credits, for ordinary
shareholders liable to pay dividend tax. The STC credit utilised is 6,18171 cents per ordinary share.
- ELB Group Limited has 33 860 000 ordinary shares in issue, which includes 8 432 591 treasury
shares.
The salient dates in respect of both dividends are:
Last day to trade cum dividend Friday, 12 April 2013
Shares commence trading ex dividend Monday, 15 April 2013
Record date Friday, 19 April 2013
Date of payment Monday, 22 April 2013
Shares may not be dematerialised or rematerialised between Monday, 15 April 2013, and
Friday, 19 April 2013, both dates inclusive.
By order of the Board
Elbex (Pty) Limited Boksburg
Company secretary 12 March 2013
The preparation of the unaudited group interim report, excluding the comments section, was
supervised by the group accountant, Ian Glass CA(SA), ACMA.
GROUP STATEMENT OF PROFIT OR LOSS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 12 31 Dec 11 30 June 12
R000 R000 R000
Sales 760 906 858 669 1 725 479
Operating costs excluding depreciation and fair value
adjustments to property, plant and equipment (703 704) (830 345) (1 582 644)
Operating profit before depreciation and fair value
adjustments to property, plant and equipment 57 202 28 324 142 835
Depreciation and fair value adjustments to property,
plant and equipment (6 856) (3 629) (10 754)
Profit from operations 50 346 24 695 132 081
Finance income 8 790 12 702 25 973
Finance expenses (5 311) (5 599) (11 899)
Profit before income tax 53 825 31 798 146 155
Income tax expense (14 721) (12 164) (43 285)
Profit for the period 39 104 19 634 102 870
Profit for the period attributable to:
Ordinary shareholders of ELB 30 469 14 262 79 479
Non controlling interests in consolidated entities 8 635 5 372 23 391
39 104 19 634 102 870
CALCULATION OF GROUP HEADLINE EARNINGS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 12 31 Dec 11 30 June 12
R000 R000 R000
Profit attributable to ordinary shareholders
of ELB from the statement of profit or loss 30 469 14 262 79 479
Deduct: Items excluded from headline earnings
as detailed below: 184 837 737
Plant and equipment:
Profit on disposal 315 383 744
Fair value adjustment 982 504
Income tax effect of items excluded from headline earnings (86) (382) (343)
Non controlling interests in items excluded from
headline earnings (45) (146) (168)
Headline earnings 30 285 13 425 78 742
Weighted average number of ordinary shares
(excluding treasury shares) on which basic
earnings per ordinary share are based (000's) 25 330 25 079 25 150
Earnings per ordinary share (cents)
basic 120,3 56,9 316,0
diluted 117,2 55,1 308,8
Headline earnings per ordinary share (cents)
basic 119,6 53,5 313,1
diluted 116,5 51,9 306,0
Dividends declared for the period per ordinary share (cents) 25 18 70
GROUP STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 12 31 Dec 11 30 June 12
R000 R000 R000
Profit for the period from the statement
of profit or loss 39 104 19 634 102 870
Other comprehensive income 7 917 19 230 22 049
Foreign currency translation reserve adjustments 8 388 17 426 19 498
Foreign currency translation adjustments to foreign
non controlling interests 949 1 804 2 019
Revaluation surplus - (decrease)/increase (236) 739
Income tax effect (1 184) (207)
Total comprehensive income for the period 47 021 38 864 124 919
Total comprehensive income for the period
attributable to:
Ordinary shareholders of ELB 36 392 29 074 96 504
Non controlling interests in consolidated entities 10 629 9 790 28 415
47 021 38 864 124 919
GROUP BALANCE SHEET
Unaudited Unaudited Audited
31 Dec 12 31 Dec 11 30 June 12
R000 R000 R000
ASSETS
Non current assets 171 982 158 678 169 228
Property, plant and equipment 142 606 136 383 140 334
Non current loan receivable 1 408 3 150 3 094
Deferred income tax assets 27 968 19 145 25 800
Current assets 1 243 078 1 327 666 1 204 632
Inventories, and construction contract work not yet billed 542 134 562 350 545 822
Receivables and other current assets 273 470 156 485 169 420
Cash and cash equivalents 427 474 608 831 489 390
Total assets 1 415 060 1 486 344 1 373 860
EQUITY AND LIABILITIES
Equity attributable to ordinary shareholders of ELB 499 088 408 939 474 837
Issued capital 25 192 25 192 25 192
Treasury shares (52 142) (55 182) (52 684)
Reserves 45 736 33 869 37 077
Retained earnings 480 302 405 060 465 252
Preference shares 8 8 8
Total equity attributable to equity holders of ELB 499 096 408 947 474 845
Non controlling interests in consolidated entities 98 654 71 970 87 940
Total equity 597 750 480 917 562 785
Non current liabilities 29 118 19 766 20 509
Interest bearing borrowings 23 741 14 574 15 494
Provision for trade back commitments 2 307 3 574 3 331
Deferred income tax liabilities 3 070 1 618 1 684
Current liabilities 788 192 985 661 790 566
Non interest bearing payables, other current liabilities
and current provision 633 340 713 375 603 602
Interest bearing payables 154 852 266 862 186 964
Bank borrowings 5 424
Total equity and liabilities 1 415 060 1 486 344 1 373 860
Ordinary shares in issue (000's) 33 860 33 860 33 860
Deduct: Treasury shares in issue (000's) 8 504 8 731 8 544
Ordinary shares in issue on which net asset
value per ordinary share is calculated 25 356 25 129 25 316
Net asset value per ordinary share (cents) 1 968 1 627 1 876
GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 12 31 Dec 11 30 June 12
R000 R000 R000
Cash (outflow)/inflow from operating activities
before dividends and distributions paid (57 440) 8 632 (95 921)
Dividends and distributions paid (13 167) (11 084) (18 244)
Cash outflow from operating activities (70 607) (2 452) (114 165)
Cash outflow from investment activities (8 569) (35 154) (44 643)
Cash inflow/(outflow) from financing activities 11 561 (3 503) (371)
Cash outflow for the period (67 615) (41 109) (159 179)
Foreign currency exchange and translation adjustments
to cash and cash equivalents 5 699 11 775 15 828
Decrease in cash and cash equivalents (61 916) (29 334) (143 351)
Cash and cash equivalents at the beginning of the period 489 390 632 741 632 741
Cash and cash equivalents at the end of the period 427 474 603 407 489 390
Reconciliation to the balance sheet
Current assets cash and cash equivalents 427 474 608 831 489 390
Current liabilities bank borrowings (5 424)
427 474 603 407 489 390
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to ordinary shareholders of ELB
Non controlling
interests in Unaudited
Issued Treasury Retained Preference consolidated Total
capital shares Reserves earnings Total shares entities equity
R000 R000 R000 R000 R000 R000 R000 R000
Balance at 30 June 2011 25 192 (56 129) 18 501 400 830 388 394 8 61 530 449 932
Total comprehensive income for the year 17 025 79 479 96 504 28 415 124 919
Profit for the year 79 479 79 479 23 391 102 870
Other comprehensive income
Foreign currency translation reserve adjustments 16 573 16 573 2 925 19 498
Foreign currency translation adjustments to foreign non controlling interests 2 019 2 019
Revaluation surplus - increase 628 628 111 739
Income tax effect (176) (176) (31) (207)
Ordinary dividends paid (14 575) (14 575) (2 436) (17 011)
Non controlling interest in distributions by a consolidated group entity (1 233) (1 233)
Increase in share options reserve 1 069 1 069 189 1 258
Transfer from share options reserve to retained earnings for share options
exercised and fully paid, and for share options lapsed through attrition (533) 533
Redundant items in the foreign currency translation reserve
transferred to retained earnings 1 015 (1 015)
Decrease in the carrying amount of treasury shares held by group entities 3 445 3 445 3 445
Capital contributed to subsidiary by non controlling interest in the subsidiary 1 475 1 475
Balance at 30 June 2012 25 192 (52 684) 37 077 465 252 474 837 8 87 940 562 785
Total comprehensive income for the six months 5 923 30 469 36 392 10 629 47 021
Profit for the six months 30 469 30 469 8 635 39 104
Other comprehensive income
Foreign currency translation reserve adjustments 7 130 7 130 1 258 8 388
Foreign currency translation adjustments to foreign non controlling interests 949 949
Revaluation surplus - decrease (201) (201) (35) (236)
Income tax effect (1 006) (1 006) (178) (1 184)
Ordinary dividends paid (13 167) (13 167) (13 167)
Increase in share options reserve 484 484 85 569
Transfer from share options reserve to retained earnings for share options
exercised and fully paid (84) 84
Redundant items in the foreign currency reserve transferred to retained earnings 2 336 (2 336)
Decrease in the carrying amount of treasury shares held by group entities 542 542 542
Balance at 31 December 2012 25 192 (52 142) 45 736 480 302 499 088 8 98 654 597 750
Balance at 30 June 2011 25 192 (56 129) 18 501 400 830 388 394 8 61 530 449 932
Total comprehensive income for the six months 14 812 14 262 29 074 9 790 38 864
Profit for the six months 14 262 14 262 5 372 19 634
Other comprehensive income
Foreign currency translation reserve adjustments 14 812 14 812 2 614 17 426
Foreign currency translation adjustments to foreign non controlling interests 1 804 1 804
Ordinary dividends paid (10 032) (10 032) (1 052) (11 084)
Increase in share options reserve 556 556 99 655
Decrease in the carrying amount of treasury shares held by group entities 947 947 947
Capital contributed to subsidiary by non controlling interest in the subsidiary 1 603 1 603
Balance at 31 December 2011 25 192 (55 182) 33 869 405 060 408 939 8 71 970 480 917
SEGMENT INFORMATION
Equipment Engineering
Total Africa Africa Australasia Other
R000 R000 R000 R000 R000
Unaudited
Six months ended
31 December 2012
Sales 760 906 337 550 259 873 163 483
Profit for the six months 39 104 15 340 18 195 11 723 (6 154)
Profit attributable to ordinary
shareholders of ELB 30 469 13 039 13 812 8 051 (4 433)
Assets 1 415 060 679 161 495 564 276 013 (35 678)
Liabilities 817 310 357 107 398 920 80 789 (19 506)
Unaudited
Six months ended
31 December 2011
Sales 858 669 354 989 377 659 128 254 (2 233)
Profit for the six months 19 634 6 234 16 393 8 208 (11 201)
Profit attributable to ordinary
shareholders of ELB 14 262 5 299 12 696 5 557 (9 290)
Assets 1 486 344 804 990 505 605 206 906 (31 157)
Liabilities 1 005 427 526 478 443 452 62 454 (26 957)
Audited
Year ended 30 June 2012
Sales 1 725 479 756 573 682 747 288 520 (2 361)
Profit for the year 102 870 51 462 46 984 21 004 (16 580)
Profit attributable to ordinary
shareholders of ELB 79 479 43 743 34 778 14 373 (13 415)
Assets 1 373 860 736 962 424 036 272 634 (59 772)
Liabilities 811 075 412 910 331 463 98 334 (31 632)
NOTES
Capital expenditure commitments
At 31 December 2012 there were capital expenditure commitments of R13 000 (31 December 2011 -
R128 000, 30 June 2012 - R3 051 000). The commitments at 31 December 2012 were for office and
computer equipment. The commitments are funded from the Group's available cash and cash equivalents.
Contingent liabilities
A Group entity has issued a guarantee of R830 000 in favour of a raw material supplier to a company which
was previously part of the Group and has now been sold. The guarantee is cancellable by three calendar
months notice. A financial guarantee liability with a carrying amount of R160 000 at 31 December 2012 is
carried in respect of the guarantee.
The ELB Engineering Services operates in the engineering contracting business and is exposed to the risks
associated with engineering contracts. These risks are managed on the basis of limited liability.
All known liabilities of the Group at the balance sheet date have been accrued.
DIRECTORS
AG Fletcher (chairman), Dr SJ Meijers (group chief executive and chief executive - ELB Engineering
Services), PJ Blunden (chief executive - ELB Equipment), T de Bruyn,* Dr JP Herselman,*
DG Jones (financial director), MV Ramollo, CJ Smith (alternate), IAR Thomson*
*Non executive
REGISTERED OFFICE
ELB Equipment Limited, 14 Atlas Road, Anderbolt, Boksburg, 1459
SHARE TRANSFER SECRETARIES
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
SPONSOR
Rand Merchant Bank (a division of FirstRand Bank Limited)
1 Merchant Place, Cnr Fredman Drive & Rivonia Road, Sandton, 2196
WEBSITE: www.elb.co.za
RELEASE DATE: 13 March 2013
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