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Condensed audited consolidated results for the year ended 31 December 2012
KAYDAV GROUP LIMITED
Incorporated in the Republic of South Africa
Registration number: 2006/038698/06
JSE code: KDV * ISIN: ZAE000108940
("KayDav" or "the Group" or "the Company")
Condensed audited consolidated results for the year ended 31 December 2012
- Earnings per share 11.8 cents (up 19%)
- Headline earnings per share 11.6 cents (up 13%)
- Net tangible asset value per share 66.5 cents (up 10%)
- Distribution to shareholders per share 7 cents (up 17%)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
year ended year ended
31 December 31 December
2012 2011
R R
Revenue 550 919 804 483 643 885
Cost of sales (381 974 757) (333 033 080)
Gross profit 168 945 047 150 610 805
Other income 1 365 064 874 267
Operating expenses (139 476 746) (125 088 168)
Operating profit 30 833 365 26 396 904
Investment income 178 733 144 514
Finance costs (2 540 847) (2 579 612)
Profit before taxation 28 471 251 23 961 806
Taxation (8 120 717) (5 782 727)
Profit for the year 20 350 534 18 179 079
Other comprehensive income - -
Total comprehensive income attributable to
equity holders of the parent 20 350 534 18 179 079
Reconciliation between earnings and headline earnings
Earnings 20 350 534 18 179 079
(Profit)/loss on sale of plant and equipment (523 302) 295 476
Taxation on (profit)/loss on sale of plant and equipment 146 525 (82 733)
Impairment of plant and equipment - 700 000
Taxation on impairment of plant and equipment - (196 000)
Headline earnings 19 973 757 18 895 822
Weighted average number of shares in issue 172 751 585 182 751 712
Basic and diluted earnings per share (cents) 11.8 9.9
Headline earnings per share (cents) 11.6 10.3
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
as at as at
31 December 31 December
2012 2011
R R
ASSETS
Non-current assets 68 695 759 51 563 206
Property, plant and equipment 52 619 029 30 764 470
Goodwill 14 302 804 14 302 804
Deferred taxation 1 773 926 6 495 932
Current assets 165 011 970 148 350 367
Inventories 71 733 983 72 258 022
Trade and other receivables 71 365 557 68 390 409
Cash and cash equivalents 20 841 337 6 167 920
Taxation 1 071 093 1 534 016
Total assets 233 707 729 199 913 573
EQUITY AND LIABILITIES
Capital and reserves 129 133 100 119 147 678
Share capital 173 173
Share premium 169 803 300 180 168 412
Accumulated loss (40 670 373) (61 020 907)
Non-current liabilities 30 194 513 12 368 889
Instalment sale liabilities 9 926 850 4 114 591
Interest-bearing liabilities 19 955 251 8 254 298
Deferred taxation 312 412 -
Current liabilities 74 380 116 68 397 006
Trade and other payables 48 983 495 50 253 363
Short-term portion of instalment sale liabilities 4 547 748 3 775 494
Short-term portion of interest-bearing liabilities 5 538 192 2 988 196
Bank overdraft 12 644 240 9 487 289
Taxation - 23 393
Provisions 2 666 441 1 869 271
Total equity and liabilities 233 707 729 199 913 573
Shares in issue at year-end 172 751 585 172 751 585
Net asset value per share (cents) 74.8 69.0
Net tangible asset value per share (cents) 66.5 60.7
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
year ended year ended
31 December 31 December
2012 2011
R R
Balance at the beginning of the year 119 147 678 115 650 549
Total comprehensive income for the year 20 350 534 18 179 079
Share repurchases - (4 581 900)
Distribution to shareholders (10 365 112) (10 100 050)
Total equity 129 133 100 119 147 678
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
year ended year ended
31 December 31 December
2012 2011
R R
Net cash flows from operating activities 28 191 996 6 521 732
Net cash flows from investing activities (7 935 217) (3 630 060)
Net cash flows from financing activities (8 740 313) (20 924 384)
Net increase/(decrease) in cash and cash equivalents 11 516 466 (18 032 712)
Net cash and cash equivalents at the beginning
of the year (3 319 369) 14 713 343
Net cash and cash equivalents at the end of the year 8 197 097 (3 319 369)
SEGMENTAL ANALYSIS
Audited Audited
year ended year ended
31 December 31 December
2012 2011
R R
Segmental revenue
Board distribution 532 957 540 471 028 870
Manufacturing 46 495 481 40 686 396
Internal revenue (28 533 217) (28 071 381)
Total revenue 550 919 804 483 643 885
Internal revenue relates to sales from the manufacturing
segment to the board distribution segment.
Segmental results
Board distribution 29 806 990 26 055 459
Manufacturing 1 026 375 184 335
Other - 157 110
Operating profit before interest 30 833 365 26 396 904
COMMENTARY
INTRODUCTION
KayDav specialises in the adding of value to and distribution of wood-based panels,
which are 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 for the year ended 31 December 2012 increased by 13.9% to R550.9 million from
R483.6 million for the year ended 31 December 2011. The lack of selling price
inflation as a result of the oversupply of wood-based panels continued to hamper sales
growth. The Group experienced pressure on gross margins during the second half of the
2012 financial year resulting in gross profit for the year ending 31 December 2012
being only 12.2% above that of the prior year.
Operating expenses increased by 11.5% to R139.5 million compared to the R125.1 million
of the previous period.
Profit before taxation increased by 18.8% to R28.5 million for the year ended
31 December 2012, while the increase in total comprehensive income for the year was
lower at 11.9% as a result of an increased effective tax rate of 29% compared to the
24% for the year ended 31 December 2011. The 2011 financial year effective tax rate was
reduced by the recognition of a previously unrecognised deferred tax asset during that
financial year.
Headline earnings per share of 11.6 cents for the year ended 31 December 2012, which
is up 13% from the 10.3 cents for the previous corresponding period, was driven by
increased profitability and the effect of share repurchases. Earnings for the year
ended 31 December 2011 included an impairment of R504 000, after tax, which was
excluded for headline earnings purposes.
The Group had a net tangible asset value of R114.8 million at 31 December 2012
(2011: R104.8 million) after the Company made a capital distribution to shareholders
of 6 cents per share during the 2012 financial year. Interest-bearing debt excluding
bank overdraft was 31% (2011: 16%) of capital and reserves at the year-end. During
the year the Group acquired a warehouse in Ottery, which was previously rented from a
third party, at a cost of R13 850 000 and a building currently used for cutting and
edging at a cost of R2 100 000. The acquisitions were financed by a loan secured by a
mortgage bond over the warehouse property of R7 980 000 and the remainder by a portion
of a term loan of R10 000 000 from KayDav's bankers. In addition the Group acquired
plant and equipment at a cost of R7 107 823 and vehicles at a cost of R3 632 414 of
which the major part was financed by instalment sales, resulting in outstanding
instalment sale liabilities at 31 December 2012 increasing by R6.6 million to
R14.5 million from the R7.9 million outstanding at 31 December 2011.
At 31 December 2012 the Group had a current ratio of 2.2 (2011: 2.2).
CAPITAL COMMITMENTS
KayDav had no capital commitments at year-end.
PROSPECTS
The Group remains focused on increasing its market share and profitability while
maintaining and improving working capital efficiency.
To this end KayDav opened a branch in Durban which commenced trading on 1 October 2012.
This location, being the largest geographical market for our products where the Group
did not have a presence previously, was a logical next step for KayDav.
The industry is still battling the effects of oversupply on its selling prices, slow
macroeconomic growth and the over indebtedness of the South African consumer. We are
hopeful that these constraining factors will ease during 2013 and beyond.
KayDav is well positioned to take advantage of growing demand when it occurs.
CHANGES TO CAPITAL STRUCTURE
There has been no change in KayDav's capital structure during the year ended
31 December 2012 aside from a distribution out of share premium to shareholders of
6 cents per share.
DISTRIBUTIONS TO SHAREHOLDERS
Notice is hereby given that the board of directors of KayDav has 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 7 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, 12 April 2013
Shares trade "ex" the cash distribution Monday, 15 April 2013
Record date for the cash distribution Friday, 19 April 2013
Cash distribution paid to shareholders Monday, 22 April 2013
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, 15 April 2013
and Friday, 19 April 2013.
Additional information
In terms of the JSE 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.
SUBSEQUENT EVENTS
No material changes have taken place in the affairs of the Group between the end of
the financial year and the date of this report, which require adjustment or disclosure.
BASIS OF PREPARATION
The condensed audited consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards, the SAICA Financial Reporting Guides
as issued by the Accounting Practices Committee, the requirements of IAS 34 (Interim
financial reporting), the JSE Listings Requirements and the Companies Act, No. 71 of
2008, as amended.
The accounting policies applied in preparing these condensed audited consolidated
financial statements are consistent with those presented in the annual financial
statements for the year ended 31 December 2011.
The annual financial statements were prepared under the supervision of the CFO,
Martin Slier CA(SA).
DIRECTORATE
There has been no change to the directorate during the year. Jonathan Hertz was
appointed as chairman of the audit and risk committee and as chairman of the
remuneration committee of the board during the 2012 financial year.
AUDIT REPORT
These condensed audited consolidated financial results have been audited by KayDav's
auditors, PKF (Jhb) Inc, whose unqualified audit report is available for inspection at
KayDav's registered office.
ANNUAL REPORT
Shareholders are advised that the integrated annual report containing the financial
statements will be posted on or before 31 March 2013. KayDav's annual general meeting
will be held at 10:00 on Thursday 13 June 2013 at 2 Arnold Road, Rosebank, 2196,
Gauteng.
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
I H Stern G F Davidson
Chairman Chief Executive Officer
26 March 2013
CORPORATE INFORMATION
Executive Directors: G F Davidson (CEO), M Slier (CFO)
Independent Non-executive Directors: I H 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: 021 704 2082
Company Secretary: Probity Business Services (Pty) Limited
Transfer Secretaries: Link Market Services South Africa (Pty) Limited
27 March 2013
Sponsor: Java Capital
Date: 27/03/2013 08:17:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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