Wrap Text
Audited preliminary consolidated financial results for the year ended 31 March 2013
BSI Steel Limited
(Incorporated in the Republic of South Africa)
(Registration number 2001/023164/06)
(JSE code: BSS ISIN: ZAE000125134)
("BSI" or "the company" or "the group")
Salient features
- Revenue up 32%
- HEPS down 51% to 4.2 cents
- NAV per share up to 77.6 cents
AUDITED PRELIMINARY CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR
ENDED 31 MARCH 2013
Condensed consolidated income statement
Audited Audited
year year
ended ended
31 March 2013 31 March 2012
R`000 R`000
Revenue 2 804 940 2 130 147
Gross profit 468 014 391 011
Other costs (375 597) (266 560)
Earnings before interest,
taxation, deprecation and
amortisation 92 417 124 451
("EBITDA")
Depreciation and (20 974) (13 319)
amortisation
Operating profit 71 443 111 132
Fair value adjustments - (6)
Interest received 2 112 1 652
Interest paid (46 490) (41 180)
Profit before taxation 27 065 71 598
Taxation 2 041 (10 724)
Profit for the year 29 106 60 874
Profit attributable to ordinary
shareholders 29 081 60 646
Profit attributable to non-
controlling interest 25 228
29 106 60 874
Basic and diluted earnings
per share (cents) 4.1 8.6
Reconciliation of headline
earnings:
Profit attributable to ordinary
shareholders 29 081 60 646
Loss on disposal of property,
plant & equipment 364 21
Tax impact on adjustments (102) (6)
Headline earnings attributable
to ordinary shareholders(basic
and diluted) 29 343 60 661
Weighted average shares in 706 447 706 668
issue on which earnings are
based (000)
Headline earnings per share 4.2 8.6
(cents) (basic and diluted)
Dividend per share (cents) - 2.0
Condensed consolidated statement of comprehensive income
Audited Audited
31 March 31 March
2013 2012
R`000 R`000
Profit for the year 29 106 60 874
Other comprehensive income
Effects of cash flow hedges - 266
Foreign currency translation
Reserve 39 655 16 266
Total comprehensive income 68 761 77 406
Attributable to ordinary shareholders 68 736 77 178
Attributable to non controlling
Interest 25 228
Condensed consolidated statement of financial position
Audited Audited
31 March 2013 31 March 2012
R`000 R`000
ASSETS
Non-Current Assets
Property, plant and 366 116 286 945
equipment
Goodwill 14 706 14 706
Intangible assets 17 805 16 396
Deferred taxation 18 342 2 196
416 969 320 243
Current Assets
Inventories 429 640 429 693
Trade and other receivables 671 173 530 412
Current tax receivable 3 354 1 925
Cash and cash equivalents 47 902 51 798
1 152 069 1 013 828
Total assets 1 569 038 1 334 071
EQUITY AND LIABILITIES
Equity
Total shareholders` equity 545 799 483 650
Non-controlling interest 253 228
546 052 483 878
Non-Current Liabilities
Other financial liabilities 107 648 91 301
Deferred taxation 5 092 2 587
Provisions 5 511 6 828
118 251 100 716
Current Liabilities
Trade and other payables 409 843 293 063
Current tax payable 8 689 2 751
Other financial liabilities 39 101 27 617
Loans from shareholders 100 100
Bank overdraft 447 002 425 946
904 735 749 477
Total Liabilities 1 022 986 850 193
Total equity and liabilities 1 569 038 1 334 071
Capital commitments - 25 000
Number of shares in issue 703 544 706 668
(000)
Net asset value per share 77.6 68.5
(cents)
Net tangible asset value per 73.0 64.1
share (cents)
Condensed consolidated statement of changes in equity
Audited Audited
31 March 31 March
2013 2012
R`000 R`000
Balance at beginning of year 483 650 417 769
Dividend paid - (14 133)
Share based payment (4 970) 2 836
Purchase of treasury shares (1 617)
Total comprehensive income 68 736 77 178
Profit for the year 29 081 60 646
Effects of cash flow hedges - 266
Foreign currency translation reserve 39 655 16 266
Attributable to ordinary 545 799 483 650
shareholders at end of year
Attributable to non-controlling
interest 253 228
Total equity 546 052 483 878
Condensed consolidated statement of cash flows
Audited Audited
31 March 31 March
2013 2012
R`000 R`000
Operating activity cash 73 579 (135 703)
flows
Cash flows from operations 121 451 (81 233)
Interest and taxation (47 872) (54 470)
Investing activity cash (86 835) (42 075)
flows
Financing activity cash (11 903) (17 909)
flows
Total cash movement for the (25 159) (195 687)
year
Cash at beginning of period (374 148) (178 607)
Effect of exchange rate 207 146
movement on cash balances
Total cash at end of year (399 100) (374 148)
Condensed consolidated segment report
Audited Audited
31 March 31 March
2013 2012
R`000 R`000
Net revenue
Stockists 846 582 657 683
Bulk Sales 775 906 595 539
Exporting 1 035 495 857 638
Other 146 957 19 287
2 804 940 2 130 147
Operating profit
Stockists 11 764 30 355
Bulk Sales 31 134 31 731
Exporting 63 666 68 665
Other (35 121) (19 625)
71 443 111 126
Total assets
Stockists 248 376 272 601
Bulk Sales 240 371 200 648
Exporting 464 180 458 979
Other 617 673 423 942
Eliminations (1 562) (22 099)
1 569 038 1 334 071
OVERVIEW
The directors of BSI are pleased to present the financial
results for the year ended 31 March 2013 ("the 2013 year").
The group operates in the steel and associated industries with
strategically located operations in South Africa, Mauritius, the
Democratic Republic of the Congo ("DRC"), Ghana, Mozambique,
Zambia and Zimbabwe. BSI markets through three distinct
channels, being Stockists, Bulk sales and Exports; all of these
divisions are supported by a steel distribution and processing
centre in Gauteng.
The financial year was characterised by reduced steel
consumption in the South African market, mainly due to the
uncertainty in the mining industry and struggling manufacturing
and construction sectors. The African markets were stable and
steel demand was steady. In addition steel prices were not as
volatile as in previous years.
FINANCIAL RESULTS
The year ending 31 March 2013 was a year in which BSI Steel grew
turnover by 32% to R2.8 billion (F2012 : R2.1 billion), and in
which domestic steel consumption contracted by at least 6%. This
significant volume growth put pressure on gross margins,
resources and efficiencies, and impacted on profitability.
BSI’s strategy over the last 18 months has been to grow product
and geographic diversity aggressively and to increase volumes
and market share. This strategy has influenced efficiencies,
albeit temporarily, borne out by a 40% rise in operating costs
to R375 million (F2012 : R266 million).
The increase in operating costs is also as a result of moving
into higher cost to turnover businesses such as the expansion of
the retail footprint, specialist businesses that process and add
value to steel and the continued roll-out of the Ghana
operation. These new startups contributed 60% of the increase in
cost.
Increasing the BSI trading platform has increased Property,
Plant and Equipment as well as the Debtors book. The
stockholding, although not greater than the comparative period,
has been rationalized and now covers the increased footprint.
BSI funded some of the growth with extended terms from foreign
suppliers which is reflected in the increase in Trade payables.
The Group borrowing facilities were increased during the year
and BSI continues to have sufficient funding lines to support
its future growth.
The investing activities include the acquisition of Brown
McFarlane Africa Limited during the period, for R25 million.
This has increased the fixed assets by R43 million which in turn
has improved the specialised processing capabilities of the
Group.
The export businesses, which are US Dollar based, have increased
the FCTR and hence total equity to just under R550 million due
to the weakness of the South African Rand.
DIVIDEND POLICY
No dividend is declared or proposed.
BASIS OF PREPARATION
The preliminary financial statements are prepared in accordance
with the requirements of the JSE Limited Listings Requirements
for preliminary reports and the requirements of the Companies
Act,2008(Act 71of 2008), as amended applicable to summary
financial statements. The Listings Requirements are for the
preliminary financial statements to be prepared in accordance
with the conceptual framework and the measurement and
recognition requirements of International Financial Reporting
Standards (IFRS), the SAICA Financial Reporting Guides as issued
by the Accounting Practices Committee, and also, as a minimum,
to contain the information required by IAS 34 Interim Financial
Reporting. The accounting policies applied in the preparation
of the consolidated financial statements from which the
preliminary consolidated financial statements were derived are
in terms of IFRS and are consistent with the accounting policies
applied in the preparation of the previous consolidated annual
financial statements except for the adoption of the revised IFRS
7 Financial instruments disclosures and IAS 12 Income Taxes.
The adoption of these revised standards has had no impact on the
financial statements. The preliminary consolidated financial
results have been prepared by R Vermaak (CA(SA)) under the
supervision of JR Waller (BCompt Hons), the group Financial
Director.
CHANGES TO THE BOARD
There were no changes to the Board of directors during the year
under review.
SUBSEQUENT EVENTS
No material change has taken place in the affairs of the group
between the end of the financial year and the date of this
report.
PROSPECTS
The South African and global economic outlook remains uncertain
and in this context BSI Steel has opted for a more prudent
approach during the coming period. Re-commencing a structured
roll-out of the branch network in South Africa, and the rest of
Africa will begin after a period of sustained profit growth.
BSI Steel will not acquire or start up any business for the rest
of 2013, in order to focus on organizational efficiencies across
all divisions, especially the new start-ups. These divisions
include BSI Steel Ghana, the six Express stores and BSI Steel
Plate Solutions which profiles plate for the mining and heavy
engineering sectors. The emphasis will continue to be on
improving gross margins and managing operating costs – a trend
that has manifested in greater profitability in the new calendar
year and which management commits to growing throughout F2014.
The drive to improve profits and manage working capital better,
while growing at a more measured pace, will ensure the balance
sheet is strengthened, and return on capital is enhanced.
STATEMENT ON GOING CONCERN
The financial statements have been prepared on the going-concern
basis since the directors have every reason to believe that the
company has adequate resources in place to continue in operation
for the foreseeable future.
AUDIT OPINION
The auditors, Deloitte & Touche, have issued their unmodified
opinion on the group`s financial statements for the year ended
31 March 2013. The audit was conducted in accordance with
International Standards on Auditing. A copy of their audit
report is available for inspection at the company’s registered
office. These preliminary financial statements have been
derived from the group financial statements and are consistent
in all material respects, with the group financial statements.
Any reference to future financial performance included in this
announcement, has not been reviewed or reported on by the
company’s auditors.
By order of the Board
13 June 2013
G D G Mackenzie J R Waller
CEO Financial Director
CORPORATE INFORMATION
Chairman W L Battershill
Non executive directors: I A J Clark; B M Khoza (Alternate - N M
Anderson), N G Payne; R G Lewis
Executive directors: G D G Mackenzie, J S Govender, C Parry, W R
Teichmann, J R Waller
Registered address: Murrayfield Park, Mkondeni,
Pietermaritzburg 3201
Postal address: P O Box 101096, Scottsville, 3209
Company secretary: S J Hackett
Telephone: (033) 846 2208
Facsimile: (033) 346 0870
Transfer secretaries: Computershare Investor Services (Pty)
Limited
Designated Advisor: Sasfin Capital (A division of Sasfin Bank
Limited)
Date: 13/06/2013 04:24:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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