Wrap Text
Condensed consolidated audited results 2013
CHEMSPEC SPECIALITIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2005/039947/06)
Share code: CSP
ISIN: ZAE000109427
(“Chemspec” or “the Company”)
Condensed consolidated audited results 2013
Performance highlights
Revenue up 24% R471 million (2012: R381 million)
Loss for the period R31 million (2012: R14 million)
Basic loss per share up 35% 2,89 cents (2012: 2,13 cents)
Debt/Equity 56% (2012: 22%)
Current ratio 1.57:1 (2012: 2.19:1)
Lead coverage in decorative coatings 0% (2012: 0%)
Employee turnover 11,7% (2012: 12,5%)
Carbon footprint 0,30 (2012: 0,51) tons CO2 equivalent per ton production
Letter from the Chairman
Dear Shareholder
BACKGROUND
Over the last two years we have been busy restoring ChemSpec to a viable business from the absolute mess it was in.
It has been an exhilarating but testing period in the history of this fine 56-year old company and one in which some bold
decisions and actions were required.
Fortune favours the brave, and particularly so if it is combined with a huge amount of effort and commitment and a
return to sound business practice.
Since its low of 30 cents and a rights issue at 40 cents, the share is currently trading at around 50 cents.
For a cost to shareholders of R45 million (5,02 cents per share), the losses over the two-year period, we have been able
to turn ChemSpec into a respectable company with outstanding prospects for the future, although we are still a few
months off completion of the turnaround.
In last year's report I said that shareholders should not expect a one-day wonder but that we were confident of rewarding
patient investors in the medium to long term. I am no less buoyant this year. We look forward to the future, confident that
we will be able to reward stakeholders with ample returns on their investments, sustained over the long term.
I really would like shareholders to see this loss as a base-setter for a prosperous future rather than as a negative, and
also not to expect an immediate turn to profits but rather a near-term full recovery, which will happen.
I have personally taken ChemSpec to heart and with my family's shareholding currently standing at around 17%, I am
certain there are great things yet to come from this company.
CURRENT POSITION
Corporate
- Corporate governance
We have now reached a standard of corporate governance that we believe is required of a good public company,
having moved forward from the previous structures and processes which we came to see as unsatisfactory.
Resources
- Executive team
It is my belief that we have assembled by far the best executive team in the industry. This has taken quite some effort
and I know will bear fruit in the short term. I thank my executives for joining a great team and wish them good luck
into the future.
- Industry-specific workforce
Reporting to this executive team is a workforce of dedicated people with good knowledge and experience of the
industry. Thanks to all you fine people for your loyalty and support.
- Production facilities
We have developed an outstanding all-in-one production facility at Canelands, KwaZulu-Natal, with capacity to
accommodate our growth well into the future. Satellite facilities have been established in Johannesburg and Cape
Town for decorative paint, to reduce logistic costs.
- Infrastructure
We have a web of distribution networks which has been considerably enlarged by acquiring a distribution agreement
for Jack's Paints with its 80 stores across South Africa. This will continue to grow.
- Products
We now have a range of products covering decorative, auto refinish, woodfinish and industrial, stretching over the full
spectrum of customer needs.
- Routes to market
We have a broad route to market presence covering South Africa, Africa, USA and Australasia, some of which
is embryonic in terms of present penetration and provides room for further expansion both domestically and
internationally.
- Brand prominence
We are bringing new focus to bear on the branding of ChemSpec products in order to ensure that they enjoy greater
market visibility.
Operations
- Sales
Sales are up 24% for the past year and we are reasonably certain that we will achieve substantial sales increases
from our base of just under R500 million in the current year. We thank our customers for their loyal support and will
continue to look for ways to provide better service to them.
- Overhead base
We have taken an aggressive approach in our turnaround programme and have increased our overhead base ahead
of sales. The rate of increase in overheads should now diminish, having provided us with the base from which to
reach sales targets and at the same time take further strategic growth decisions.
- Finance cost
With the assistance of the IDC, we are borrowing capital for expansion at competitive rates. We have received good
support from our financiers and thank them for the confidence they have shown in ChemSpec.
Status
- Financial position
In light of the expected improvement in performance and limited capital expenditure requirements our current
financial position should be adequate.
- Partnerships
We have developed strong strategic alliances with the best international players in the industry and are extremely
proud of these alliances.
- South African
We are a wholly South African company in which the Industrial Development Corporation is a major shareholder. We
know how to do business in Africa. We will be improving our BEE rating and empowerment in general so that we can
truly say we are proudly South African and play a genuine role in transformation in our country. We have the base
from which to achieve this.
- International ability
Our auto refinish brands are well-established in the areas we trade in internationally and provide us with growth
opportunities in sales and manufacturing, particularly as the value of the Rand weakens against major currencies.
Culture
- Success
We have an attitude of winning, being the best, and are developing as an industry leader.
- 'Good goes with good'
We have a philosophy that 'good goes with good' or more simply put, 'birds of a feather flock together'. As we gain
the trust of all those associated with ChemSpec in one way or another, we will establish good long-term business
relationships with all the fine people who have the same high standard approach to business.
CHANGE OF DIRECTORATE
Tim Dykins resigned as an executive director and Tim McClure resigned as an independent non-executive director
during the year. I would like to personally thank both Tim Dykins and Tim McClure for their invaluable assistance while
they were with us. We also welcome Ms Thina Siwendu as an independent non-executive director and look forward to
benefiting from her wealth of experience in corporate governance and black economic empowerment.
THANKS
I thank my fellow board members for their strategic input and support. I thank our Chief Executive Officer, Baron
Schreuder, for the warm spirit in which he has embraced his role at ChemSpec. He is a first-class Chief Executive
Officer. I also thank Bruce Mackinnon, our Chief Operating Officer, for his role as Chief Executive Officer during our
earlier phases of turnaround and for the positive way he has embraced change. I also thank our executive team, the
wonderful people of ChemSpec and our customers, suppliers and financiers for their support and for being part of the
intense effort which is so needed in turning a company around.
CONCLUSION
This exciting journey of success at ChemSpec is only just beginning. We have almost completed setting the platform.
Please be patient.
We know that we will deliver first-class returns for our shareholders but will not be rushed. I hope you stay for the ride.
I am.
Ivan Clark
Chairman
Chief Executive Officer's review and comments on the results
Overview and highlights
It has been an extremely busy yet exciting first three months for me since my appointment in January 2013. The business
has responded positively to the introduction of a new Chief Executive Officer and the executive team has been hard at
work preparing strategies and discussing tactics on how we can continue to grow the sales line at multiple double digit
rates, increase margins and profitability and move the business into a sustainable cash-generating position.
The year to March 2013 must be seen as a year of investment in the future sustainability of this business by putting
together a number of key investment strategies. Among the important steps forward that we managed to accomplish,
we:
- acquired key leadership capacity in South Africa and Australia to help position the business for future growth and
increased our sales resource in various territories;
- launched two new products into the MICA channel, further enhancing our relationship and standing with them;
- acquired the Jack's Paints supply contract as well as the assets of Turnkey Paint Solutions (Pty) Ltd (a division of
Kansai Plascon). These acquisitions will add manufacturing capacity in Johannesburg for the decorative business,
sales turnover and, more importantly, open up new access to the market;
- bedded down the Sikkens automotive brand and the relationship with AkzoNobel, investing R12 million in the
business;
- invested in mixing banks and colour systems for future growth within the automotive business;
- commissioned a new resin plant and solvent blending capacity which will help to reduce our input costs in future;
- opened and invested in a new depot in Colorado, USA, in order to open up distribution in the western states;
- invested in upgrading our global IT platform to allow improved information visibility and supply chain enhancements; and
- invested in green/eco R&D in both automotive and decorative technology areas.
The business is in good shape, with a positive outlook amongst its employees, great infrastructure in place and beneficial
strategic partnerships with major global players. These factors together set up a sound platform for successful growth.
Results
Regrettably, ChemSpec incurred a loss of R31 million for the year ended March 2013 compared with a loss of
R14 million for the previous year. The second half of the year was tougher than expected, with periods of slower trade
in the USA and Australia businesses and some margin issues in South Africa, against the background of a longer-term
decision taken by the board to increase leadership capability and sales resource capacity in anticipation of stronger
performance. The result was poorer performance than expected for the second half, which momentarily halted our
progress.
While this is undoubtedly disappointing for shareholders, I must stress that the business is still in a turnaround phase
where unforeseen market circumstances will inevitably affect short-term performance. On the other hand, there are
a number of very positive opportunities for the business which will ensure improved trading and financial results and
future sustainability.
Trading results
Revenue increased by 24% to R471 million, but margins fell as a result of increased cost push inflation through rand
weakness, together with oil price and general commodity price increases from suppliers. Overhead costs were up by
34%. Finance costs were much improved as the benefit from the rights issue started coming through.
The South African and African operations, which comprise almost 70% of the business, performed well and grew by
more than 30%. Margins were unfortunately adversely affected by the weakening exchange rate, exacerbated by a strong
oil price and further exacerbated by product mix issues in the industrial and decorative businesses. These issues have
been addressed wherever possible and margins are already showing improvement.
The USA business had an excellent first half year in which it grew by more than 30%. This was followed by a
weak second half, resulting from generally poorer trading conditions in the automotive sector (experienced
more significantly by the majors) and the severe impact of super-storm Sandy on our largest customer in the
US (±$450 000 lost sales), leaving us with flat sales on last year. Overhead costs were slightly higher due to strategic
increases in our sales resource.
Australia showed flat sales on last year primarily as a result of some quality-related issues caused by raw material
variations. These have since been resolved and we look forward to better growth opportunities.
Financial position
The financial structure of the group remains healthy.
At year-end our debt to equity ratio was 56% and our current ratio was 1.57:1.
Available unutilised finance facilities at year-end totalled R55 million.
Working capital increased by R31,5 million as a result of increased business.
The business case for Chemspec
We have all the right markers in place to accelerate our continuing development into a sustainable and successful
coatings company.
- We have a first class production facility at Canelands, KwaZulu-Natal, a new facility in Cleveland, Gauteng (resulting
from the Jack's Paints supply contract acquisition), as well as a production facility in the USA.
- We have developed partnerships with world leaders whose specific product offerings together with our own products
allow us to offer our customers a wider range of products to meet their requirements.
- We have a good management team in place and teams of dedicated people in all our operations.
- We have been regaining market share selectively by focusing on economic returns.
- We are reviewing our product offering, improving our marketing drive and focusing on supply chain excellence to
ensure a sustainable supply situation.
- We have a customer base that is supportive of our business strategies.
Dividend
No dividends were declared or paid during the year (2012: nil).
Prospects
ChemSpec is a good, sound business offering a host of opportunities. The Jack's Paint contract acquisition for the
manufacture of its exclusive decorative paint brands has added value in that sector of the business and we will continue
to improve our position in its 80 stores countrywide. We are developing numerous other opportunities in the decorative
sector.
The automotive and industrial businesses in South Africa are growing and partner technology is allowing us to change
the mix of this category to improve margin and price mix.
Opportunities in Africa are being tested with all three technology and brand portfolio platforms. The US business is
stable and self-sustaining, with significant growth prospects in the short to medium term. The Australian business is
poised for growth, though this may take a little longer.
Shareholders are asked to be patient as we develop our business platform. The business requires a strategic and
methodical plan that will take time to implement, but which will allow sustainable growth through building brands and
relationships, both of which are earned through consistency and credibility. We have to approach this in a measured way
and there is still much to do.
ChemSpec has adopted austerity measures on top of its growth plan and is expected to continue to improve its results
in the coming year.
Appreciation
We thank all our customers for their continuing belief in us, allowing us the opportunity to rebuild this business. We
thank our suppliers for their continued support and belief in our ability to meet their requirements. We thank our
shareholders for their patience and continued endorsement of our plans. Last, but certainly not least, we thank our
valued employees for working tirelessly to improve this business for all our stakeholders.
Finally, I thank my executive team for so quickly responding to my leadership and participating fully in devising and
implementing the plans we have laid out for the future.
Annual general meeting
The annual general meeting of the company will be held at 2029 Old Mill Road, Canelands, Verulam, KwaZulu-Natal, on
Friday, 27 September 2013 at 11:00.
Website
A full set of reporting publications, including our 2013 final results presentation, can be found on our website at
www.chemspecpaint.com
Feedback
We invite feedback on our report and its contents and ask that you contact us at annual.report@chemspecpaint.com.
For and on behalf of the board
IAJ Clark BC Schreuder
Chairman Chief Executive Officer
Condensed consolidated statements of financial position
as at 31 March 2013
GROUP
Figures in R'000 Notes 2013 2012
ASSETS
Non-current assets
Property, plant and equipment 276 625 230 828
Intangible assets 46 065 29 312
Goodwill 22 937 22 926
Deferred tax 65 507 51 291
411 134 334 357
Current assets
Inventories 153 196 127 473
Trade and other receivables 102 864 77 426
Cash and cash equivalents 9 772 14 264
265 832 219 163
Assets held for sale 11 – 3 614
Total assets 676 966 557 134
EQUITY AND LIABILITIES
Equity
Stated capital 10 468 055 466 656
Translation reserve 9 615 (1 353)
Revaluation reserve 31 858 31 858
Share option reserve 3 187 1 187
Accumulated loss (145 903) (114 996)
366 812 383 352
Non-current liabilities
Other financial liabilities 137 891 69 978
Deferred tax 2 828 3 169
140 719 73 147
Current liabilities
Other financial liabilities 28 106 27 936
Trade and other payables 90 998 71 428
Bank overdraft 50 331 728
169 435 100 092
Liabilities held for sale 11 – 543
Total liabilities 310 154 173 782
Total equity and liabilities 676 966 557 134
Condensed consolidated statements of financial performance
for the year ended 31 March 2013
GROUP
Figures in R'000 Notes 2013 2012
Revenue 5 470 945 380 790
Cost of sales 6 (298 534) (224 511)
Gross profit 172 411 156 279
Other income 7 28 294 27 328
Operating expenses (237 530) (176 717)
Operating (loss)/profit 8 (36 825) 6 890
Finance income 270 4 034
Finance costs (7 802) (22 796)
Loss before taxation (44 357) (11 872)
Taxation 14 046 3 991
Loss from continuing operations (30 311) (7 881)
Discontinued operations 11 (596) (6 250)
Loss for the period (30 907) (14 131)
Basic loss per share 9
Continuing operations (cents) (2,83) (1,19)
Discontinued operations (cents) (0,06) (0,94)
Total basic loss per share (cents) (2,89) (2,13)
Diluted loss per share 9
Continuing operations (cents) (2,81) (1,18)
Discontinued operations (cents) (0,06) (0,94)
Total diluted loss per share (cents) (2,87) (2,12)
Condensed consolidated statements of comprehensive income
for the year ended 31 March 2013
GROUP
Figures in R'000 2013 2012
Loss for the period (30 907) (14 131)
Other comprehensive income 10 968 4 827
Exchange differences on translating foreign operations 10 968 4 827
Total comprehensive loss for the period (19 939) (9 304)
Condensed consolidated statements of cash flows
for the year ended 31 March 2013
GROUP
Figures in R'000 2013 2012
Cash flows from operating activities
Cash used by operations (37 160) (30 388)
Finance income 270 4 034
Finance costs (7 802) (22 796)
Taxation paid (650) (1 380)
Net cash from operating activities (45 342) (50 530)
Cash flows from investing activities
Purchase of plant and equipment (61 254) (39 258)
Proceeds on sale of plant and equipment 815 4 799
Acquisition of intangible assets (18 982) (13 071)
Acquisition of business (1 884) –
Proceeds of other financial assets – 8
Proceeds on disposal of assets held for sale 3 071 1 050
Net cash from investing activities (78 234) (46 472)
Cash flows from financing activities
Proceeds on share issue 1 399 259 022
Proceeds/(repayment) of other financial liabilities 68 082 (36 166)
Repayment of shareholder loans – (83 536)
Net cash from financing activities 69 481 139 320
Total cash movement for the period (54 095) 42 318
Cash/(overdraft) at the beginning of the period 13 536 (28 782)
Cash and cash equivalents at the end of the period (40 559) 13 536
Reconciled as follows:
Cash and cash equivalents 9 772 14 264
Bank overdraft (50 331) (728)
Cash and cash equivalents at the end of the period (40 559) 13 536
Condensed consolidated statements of changes in equity
for the year ended 31 March 2013
Share Share Stated Accumulated
Figures in R'000 capital premium capital loss
GROUP
Balance at 31 March 2011 2 207 632 – (100 865)
Transfer to stated capital (2) (207 632) 207 634 –
Issue of shares – – 261 095 –
Share issue expenses – – (2 073) –
Loss for the period – – – (14 131)
Share options – – – –
Translation reserve – – – –
Balance at 31 March 2012 – – 466 656 (114 996)
Issue of shares – – 1 404 –
Share issue expenses – – (5) –
Loss for the period – – – (30 907)
Share options – – – –
Translation reserve – – – –
Balance at 31 March 2013 – – 468 055 (145 903)
Revaluation Translation Share option
Figures in R'000 reserve reserve reserve Total
GROUP
Balance at 31 March 2011 31 858 (6 180) – 132 447
Transfer to stated capital – – – –
Issue of shares – – – 261 095
Share issue expenses – – – (2 073)
Loss for the period – – – (14 131)
Share options – – 1 187 1 187
Translation reserve – 4 827 – 4 827
Balance at 31 March 2012 31 858 (1 353) 1 187 383 352
Issue of shares – – – 1 404
Share issue expenses – – – (5)
Loss for the period – – – (30 907)
Share options – – 2 000 2 000
Translation reserve – 10 968 – 10 968
Balance at 31 March 2013 31 858 9 615 3 187 366 812
Condensed consolidated segmental analysis
for the year ended 31 March 2013
GROUP
Figures in R'000 2013 2012
Segment revenues
Automotive 238 426 203 540
Buy-ins 18 076 14 115
Decorative 52 594 39 200
Industrial/Woodfinish 133 196 110 387
Solvents 29 277 22 780
Total of all segments 471 569 390 022
Discontinued operations (624) (9 232)
Consolidated revenue 470 945 380 790
Segment result
Automotive (26 994) (7 279)
Buy-ins (1 034) (30)
Decorative (3 958) (980)
Industrial/Woodfinish (10 880) (3 120)
Solvents (1 491) (463)
Total of all segments (44 357) (11 872)
Income tax 14 046 3 991
Discontinued operations (596) (6 250)
Loss for the year (30 907) (14 131)
Segment assets
Automotive 342 276 288 348
Buy-ins 25 949 26 673
Decorative 75 501 57 596
Industrial/Woodfinish 191 211 149 985
Solvents 42 029 30 918
Discontinued operations – 3 614
Total of all segments 676 966 557 134
Revenue Revenue Assets Assets
Figures in R'000 2013 2012 2013 2012
Geographical segments
South Africa 285 011 217 116 546 259 446 061
International 185 934 163 674 130 707 111 073
470 945 380 790 676 966 557 134
Notes to the condensed consolidated audited results
for the year ended 31 March 2013
1. Accounting policies and basis of preparation
The condensed consolidated annual financial results for the year ended 31 March 2013 have been prepared
under the supervision of JG Maehler (CA)SA, in accordance with International Accounting Standards (IAS) 34
Interim Financial Reporting, the requirements of the South African Companies Act, 71 of 2008, as amended,
the South African Institute of Chartered Accountants (SAICA) Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting
Standards Council and in compliance with the Listings Requirements of the JSE Limited (JSE). These condensed
consolidated annual financial statements have also been prepared in accordance with the framework concepts,
measurement and recognition requirements of the International Financial Reporting Standards (IFRS) as
required by the JSE.
The condensed consolidated annual financial statements have been prepared on the historical cost basis
excluding financial instruments and property, plant and equipment which are fairly valued and conform to IFRS
as issued by the International Accounting Standards Board (IASB).
The relevant Standards and Interpretations which are not yet effective and which should be disclosed for March
2013 year-ends are identified in the table below, together with the dates on which these were issued by the IASB:
Date issued
Standard/Interpretation by the IASB Effective date
IAS 1 amendment Presentation of Financial Statements: Presentation June 2011 1 July 2012
of items of Other Comprehensive Income
IFRS 10 Consolidated Financial Statements May 2011 1 January 2013
IFRS 12 Disclosure of Interests in Other Entities May 2011 1 January 2013
IFRS 13 Fair Value Measurement May 2011 1 January 2013
IFRS 10, Consolidated Financial Statements, Joint June 2012 1 January 2013
IFRS 11 and Arrangements and Disclosure of Interests in Other
IFRS 12 amendment Entities: Transition Guidance
IAS 19 amendments Employee Benefits: Defined Benefit Plans June 2011 1 January 2013
IAS 27 Separate Financial Statements (2011) May 2011 1 January 2013
IFRS 7 amendment Disclosures – Offsetting Financial Assets and December 2011 1 January 2013
Financial Liabilities
IAS 32 Offsetting Financial Assets and Financial Liabilities December 2011 1 January 2014
IFRS 9 (2009) Financial Instruments November 2009 1 January 2015
IFRS 9 (2010) Financial Instruments October 2010 1 January 2015
These pronouncements had no material impact on the accounting transactions or the disclosure thereof.
The accounting standards and amendments issued to accounting standards and interpretations which are
relevant to the group, but not yet effective at 31 March 2013, have not been adopted. It is expected that where
applicable, these standards and amendments will be adopted on each respective effective date, except where
specifically identified.
The accounting policies, methods of measurement, recognition, computation and presentation adopted in the
preparation of the condensed consolidated annual financial statements are consistent with those applied in the
annual financial statements for the year ended 31 March 2012 and for the year ended 31 March 2013.
The report of the independent auditor, on the condensed consolidated financial statements which were derived
from the audited consolidated financial statements, on which an unmodified opinion was expressed, is available
for inspection at the company's registered office together with the condensed consolidated financial statements
identified in the auditor's report.
2. Related parties
There have been no significant changes in related party relationships since the previous year or significant
transactions during the year, other than in the normal course of business.
3. Post-balance sheet events
The directors are not aware of any material matter or circumstance arising since the financial year-end that is
not disclosed in this report.
4. Dividends
No dividends were declared or paid during the year (2012: nil).
GROUP
Figures in R'000 2013 2012
5. Revenue
Gross sale of goods 483 071 396 645
Less: Discount allowed (6 875) (4 645)
Less: Rebates (4 627) (1 978)
Less: Discontinued operations (624) (9 232)
470 945 380 790
6. Cost of sales
Gross cost of goods sold 300 993 229 344
Less: Discount received (1 973) (762)
Less: Rebates (387) (176)
Less: Discontinued operations (99) (3 895)
298 534 224 511
7. Other income
Profit on disposal of assets 167 –
Foreign exchange gain 1 438 343
Franchise fees – 70
Insurance claim 15 000 15 677
Rental income 7 520 7 610
Other sundry income 4 169 3 628
28 294 27 328
Rental income is received from the sub-leasing of certain portions of property leased by the company.
GROUP
Figures in R'000 2013 2012
8. Operating (loss)/profit
The analysis of expenses recognised in profit or loss using the
classification based on the function within the entity comprises:
Operating expenses 237 530 176 717
Administration 107 178 92 231
Distribution 48 490 35 191
Selling 83 214 63 313
Less: Discontinued operations (1 352) (14 018)
Profit for the year has been arrived at after charging:
Operating lease charges:
Premises 31 873 22 953
Motor vehicles 302 1 797
Office equipment 981 872
33 156 25 622
Auditors' remuneration:
Fees – current year 1 129 1 158
Tax and secretarial services 1 518 961
2 647 2 119
Depreciation and amortisation:
Depreciation of property, plant and equipment 21 836 24 138
Amortisation of intangible assets 4 477 3 092
26 313 27 230
Profit/(loss) on disposal of assets (167) 628
Staff costs 148 096 114 170
Group
Figures in R'000 2013 2012
9. Basic and diluted loss and headline loss per share
Basic loss per share
Continuing operations (cents) (2,83) (1,19)
Discontinued operations (cents) (0,06) (0,94)
Total basic loss per share (cents) (2,89) (2,13)
Basic headline loss per share
Continuing operations (cents) (2,84) (1,12)
Discontinued operations (cents) (0,06) (0,94)
Total basic headline loss per share (cents) (2,90) (2,06)
Diluted loss per share
Continuing operations (cents) (2,81) (1,18)
Discontinued operations (cents) (0,06) (0,94)
Total diluted loss per share (cents) (2,87) (2,12)
Diluted headline loss per share
Continuing operations (cents) (2,82) (1,12)
Discontinued operations (cents) (0,06) (0,94)
Total diluted headline loss per share (cents) (2,88) (2,06)
Basic loss per share
The loss used in the calculation of basic loss per share are as follows:
Loss for the year (continuing operations) (30 311) (7 881)
Loss for the year (discontinued operations) (596) (6 250)
Total loss attributable to equity holders of the parent (30 907) (14 131)
Reconciliation of total loss to headline loss attributable to equity holders
of the parent
Total loss attributable to equity holders of the parent (30 311) (7 881)
Non-headline adjustments
Loss/(profit) on disposal of assets (167) 628
Total tax effect of adjustments 47 (176)
Headline loss (continuing operations) (30 431) (7 429)
Headline loss (discontinued operations) (596) (6 250)
Total headline loss (31 027) (13 679)
Weighted average shares
The weighted average number of ordinary shares used in the calculation
of loss per share
Opening shares 1 071 261 648 418 523 544
Specific issue on 19 October 2011 of 117 107 280 shares – 52 794 266
Rights issue on 21 November 2011 of 535 630 824 shares – 191 714 858
Specific issue on 1 October 2012 of 2 600 000 shares 1 300 000 –
Weighted average number of ordinary shares (basic) 1 072 561 648 663 032 668
Share options 5 810 000 2 194 714
Weighted average number of ordinary shares (diluted) 1 078 371 648 665 227 382
Actual number of ordinary shares 1 073 861 648 1 071 261 648
GROUP
Figures in R'000 2013 2012
10. Stated capital
Authorised
1 500 000 000 (2012: 1 500 000 000) ordinary shares of no par value – –
– –
Issued
Share capital: 1 073 861 648 (2012: 1 071 261 648) ordinary shares
of no par value 481 621 480 217
Less share issue expenses (13 566) (13 561)
468 055 466 656
Reconciliation between opening balance of issued shares and closing
balance:
Opening balance of shares issued 1 071 261 648 418 523 544
Specific issue: 2 600 000 shares at R0,54 each 2 600 000 –
Specific issue: 117 107 280 shares at R0,40 each – 117 107 280
Rights issue: 535 630 824 shares at R0,40 each – 535 630 824
Total shares in issue 1 073 861 648 1 071 261 648
Results of the specific issue – 2013
The results of the specific issue of shares for cash on 1 October 2012 are set out below:
Value at
Number of 54 cents
shares per share
Specific issue 2 600 000 1 404
2 600 000 1 404
Results of the specific issue – 2012
The results of the specific issue of shares for cash on 19 October 2011 are set out below:
Value at
Number of 40 cents
shares per share
Industrial Development Corporation (IDC) 75 000 000 30 000
Clark Investments 42 107 280 16 843
117 107 280 46 843
Results of the rights offer – 2012
The rights offer closed on 18 November 2011, and the results thereof are
set out below:
Total number of rights offer shares available for subscription 535 630 824 214 252
Rights offer shares subscribed for by ChemSpec shareholders 521 134 279 208 454
Excess rights offer shares applied for by and allocated to ChemSpec
shareholders 14 496 545 5 798
535 630 824 214 252
11. DISCONTINUED OPERATIONS
During the 2012 financial year the board resolved to discontinue certain of the group's retail stores. Of the stores
identified to be discontinued, some of these were to be closed and others sold.
GROUP
Figures in R'000 2013 2012
Results of the discontinued operations
Revenue 624 9 232
Cost of sales (99) (3 895)
Operating expenses (1 352) (14 018)
Operating loss (827) (8 681)
Taxation 231 2 431
Net loss from discontinued operation (596) (6 250)
Basic loss per share (cents) (0,06) (0,94)
Basic headline loss per share (cents) (0,06) (0,94)
Diluted loss per share (cents) (0,06) (0,94)
Diluted headline loss per share (cents) (0,06) (0,94)
Cash flows from (used in) discontinued operations
Net cash from (used in) operating activities 827 (8 681)
Net cash from (used in) investing activities – –
Net cash from (used in) financing activities – –
Net cash outflows for the year 827 (8 681)
Effect on the statement of financial position
Plant and equipment – 1 782
Inventory – 1 832
Instalment sale liabilities – (543)
Net assets and liabilities – 3 071
Corporate information
Country of incorporation and domicile South Africa
Registration number 2005/039947/06
Share code CSP
ISIN ZAE000109427
Nature of business and principal activities Manufacture, distribution and supply of paint and ancillary products
Directors IAJ Clark (Non-executive chairman)
BC Schreuder (Chief executive officer)
BR Mackinnon (Chief operations officer)
JG Maehler (Financial director)
GV Metzer (Marketing and sales director)
S van Niekerk (International sales director)
DJ Coyle-Dowling (Commercial director)
JG Jones (Lead independent non-executive director)
NTY Siwendu (Independent non-executive director)
SE Sono (Independent non-executive director)
IBB Buchan (Non-executive director)
NA Page (Non-executive director)
ZM Buchan (Alternate non-executive director)
Registered office 2029 Old Mill Road
Canelands
Verulam, 4339
Business address 2029 Old Mill Road
Canelands
Verulam, 4339
Postal address PO Box 2359
Canelands
Verulam, 4340
Auditors KPMG Incorporated
20 Kingsmead Boulevard
Kingsmead Office Park
Durban, 4001
Transfer secretaries Computershare Investor Services (Pty) Ltd
70 Marshall Street
Johannesburg, 2001
Company secretary Statucor (Pty) Ltd
BDO House
Richefond Circle
Ridgeside Office Park
Umhlanga, 4319
Designated Advisor Grindrod Bank Limited
Website www.chemspecpaint.com
Telephone +27 32 541 8600
Fax +27 32 541 8653
20 June 2013
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