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CASHBUILD LIMITED - Audited annual results and dividend declaration - June 2013

Release Date: 17/09/2013 09:00
Code(s): CSB     PDF:  
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Audited annual results and dividend declaration - June 2013

Cashbuild Limited
(Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE Share Code: CSB           ISIN: ZAE000028320

AUDITED ANNUAL RESULTS AND DIVIDEND DECLARATION  JUNE 2013

Revenue up 1% (up 3%)*     Operating profit down 19% (down 12%)*    
Headline earnings down 17% (down 9%)*    
Net asset value per share up 13% (up 16%)*

*When comparing current 52 weeks with prior 52 weeks    


SUMMARY CONSOLIDATED GROUP INCOME STATEMENT  AUDITED
R'000                                   Year ended        Year ended
                                           30 June           30 June         
                                              2013              2012        % 
                                         (52 weeks)        (53 weeks)  change 
Revenue                                  6 376 945         6 310 052        1 
Cost of sales                           (4 921 664)       (4 837 024)       2 
Gross profit                             1 455 281         1 473 028       (1)
Selling and marketing expenses            (966 965)         (894 960)       8 
Administrative expenses                   (163 700)         (177 745)      (8)
Other operating expenses                    (4 154)           (4 491)      (8)
Other income                                 2 078             4 643      (55)
Operating profit                           322 540           400 475      (19)
Finance cost                                (1 225)             (706)      74 
Finance income                              30 718            33 561       (8)
Profit before income tax                   352 033           433 330      (19)
Income tax expense                        (103 482)         (140 297)     (26)
Profit for the year                        248 551           293 033      (15)

Attributable to:
Owners of the company                      245 490           286 832      (14)
Non-controlling interests                    3 061             6 201      (51)
                                           248 551           293 033      (15)
Earnings per share (cents)                 1 063.2           1 261.3      (16)
Diluted earnings per share (cents)         1 038.3           1 257.5      (17)

SUMMARY CONSOLIDATED GROUP STATEMENT OF COMPREHENSIVE INCOME - AUDITED
                                                    Year ended     Year ended 
                                                  30 June 2013   30 June 2012 
R'000                                                (52 weeks)     (53 weeks)
Profit for the year                                    248 551        293 033 
Other comprehensive income:
Foreign currency translation adjustments                 4 240         (2 753)
Other comprehensive income for the year, net of tax      4 240         (2 753)
Total comprehensive income for the year                252 791        290 280 

Total comprehensive income attributable to:
Owners of the company                                  249 996        286 392 
Non-controlling interests                                2 795          3 888 
                                                       252 791        290 280 

ADDITIONAL INFORMATION - AUDITED
R'000                                               Year ended     Year ended 
                                                  30 June 2013   30 June 2012 
Net asset value per share (cents)                        4 379          3 877 
Ordinary shares ('000):	
 - In issue                                             25 190         25 190 
 - Weighted-average                                     23 091         22 742 
 - Diluted weighted-average                             23 643         22 809 
Capital expenditure                                    198 042        110 909 
Depreciation of property, plant and equipment           75 008         62 921 
Amortisation of intangible assets                        6 773          1 876 
Capital commitments                                    164 995        197 281 
Property operating lease commitments                   953 363        930 855 
Contingent liabilities                                   6 307         14 337 

SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION - AUDITED
R'000                                                  30 June        30 June 
                                                          2013           2012 
ASSETS
Non-current assets                                     692 725        583 333 
Property, plant and equipment                          618 597        517 006 
Intangible assets                                       50 333         41 687 
Rent prepayments                                        20 557         13 483 
Deferred income tax assets                               3 238         11 157 
Current assets                                       1 376 275      1 342 735 
Assets held for sale                                    15 645         18 225 
Inventories                                            986 709        744 606 
Trade and other receivables                            115 196         91 958 
Financial assets at fair value                         125 628              - 
Cash and cash equivalents                              123 818        487 946 
Current income tax assets                                9 279              - 

Total assets                                         2 069 000      1 926 068 

EQUITY AND LIABILITIES
Shareholders' equity                                 1 116 436        988 082 
Share capital and reserves                           1 102 976        976 674 
Non-controlling interests                               13 460         11 408 

Non-current liabilities                                 96 099         89 241 
Deferred operating lease liability                      92 016         85 122 
Deferred profit                                          1 595          1 647 
Borrowings                                               2 488          2 472 

Current liabilities                                    856 465        848 745 
Trade and other liabilities                            853 929        837 661 
Current income tax liabilities                               -          8 768 
Employee benefits                                        2 536          2 316 

Total equity and liabilities                         2 069 000      1 926 068 

SUMMARY CONSOLIDATED GROUP STATEMENT OF CHANGES IN EQUITY  AUDITED
R000            Attributable to owners of the company        
                                  Share     Cum.                Non-
    Treasury                      based    trans-           Control-
Share  share           Treasury     pay-  lation               ling 
 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 year
   -       -         -        -       -     (440)  286 832    3 888   290 280 
Dividend paid
   -       -         -        -       -        -   (98 817)    (569)  (99 386)
Buy-out of minority in subsidiary
   -       -         -        -       -        -   (15 437) (46 774)  (62 211)
Shares sold by The Cashbuild Share Incentive Trust
   -       3         -    5 360       -        -     8 269        -    13 632 
Recognition of share based payments
   -       -         -        -   7 649        -         -        -     7 649 
Closing 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 year
   -       -         -        -       -    4 506   245 490    2 795   252 791 
Dividend paid 
   -       -         -        -       -        -  (131 762)  (1 180) (132 942)
Increase in shareholding of subsidiary
   -       -         -        -       -        -      (497)     437       (60)
Shares sold by The Cashbuild Share Incentive Trust
   -       1         -      766       -        -     1 075        -     1 842 
Shares purchased by The Cashbuild Operations Management Member Trust
   -      (1)        -   (2 545)      -        -         -        -    (2 546)
Recognition of share based payments
   -       -         -        -   9 269        -         -        -     9 269 
Closing balance at 30 June 2013
 252     (20)  ` 65 823  (30 111) 21 887  (10 336) 1 055 481  13 460 1 116 436


SUMMARY CONSOLIDATED GROUP CASH FLOW STATEMENT - AUDITED

R'000                                               Year ended     Year ended 
                                                  30 June 2013   30 June 2012 
Cash flows from operating activities
Cash generated from operations                         156 378        151 553 
Interest paid                                           (1 225)          (706)
Taxation paid                                         (113 610)      (168 561)
Net cash generated from/(used in)
  operating activities                                  41 543        (17 714)

Cash flows from investing activities
Net investment in assets                              (179 743)       (97 577)
Increase in financial assets                          (125 628)             - 
Interest received                                       30 718         33 561 
Net cash used in investing activities                 (274 653)       (64 016)

Cash flows from financing activities
Increase/(decrease) in other borrowings                     16           (185)
Shares purchased by The Cashbuild 
  Operations Management Trust                           (2 546)             - 
Shares sold by The Cashbuild Share Incentive Trust       1 842         13 632 
Dividends paid
 - own equity                                         (131 762)       (98 817)
 - non-controlling interests                            (1 180)          (569)
Increase in shareholding of subsidiary                     (60)       (62 211)
Net cash used in financing activities                 (133 690)      (148 150)

Net decrease in cash and cash equivalents             (366 800)      (229 880)
Effect of exchange rate movements on cash and 
  cash equivalents                                       2 672         (2 734)
Cash and cash equivalents at beginning of year         487 946        720 560 
Cash and cash equivalents at end of year               123 818        487 946 

SUMMARY CONSOLIDATED GROUP SEGMENTAL ANALYSIS - AUDITED
R'000                                               Year ended     Year ended 
South Africa                                      30 June 2013   30 June 2012
Income statement
Revenue                                              5 583 424      5 505 910 
Operating profit                                       277 733        343 452 

Statement of financial position
Segment assets                                       1 626 670      1 519 637 
Segment liabilities                                    786 355        768 834 

Other segment items
Depreciation                                            67 159         56 356 
Amortisation                                             6 773          1 869 
Capital expenditure                                    179 506         98 466 

Other members of common monetary area*
Income statement
Revenue                                                505 499        523 871 
Operating profit                                        31 610         32 844 

Statement of financial position
Segment assets                                         299 468        279 636 
Segment liabilities                                    121 066        124 740 

Other segment items
Depreciation                                             4 688          3 847 
Amortisation                                                 -              - 
Capital expenditure                                     13 259          5 144 

Botswana and Malawi
Income statement
Revenue                                                 288 022       280 271 
Operating profit                                         13 197        24 179 

Statement of financial position
Segment assets                                          142 862       126 795 
Segment liabilities                                      45 143        44 412 

Other segment items
Depreciation                                              3 161         2 718 
Amortisation                                                  -             7 
Capital expenditure                                       5 277         7 299 

Group
Income statement
Revenue                                               6 376 945     6 310 052 
Operating profit                                        322 540       400 475 

Statement of financial position
Segment assets                                        2 069 000     1 926 068 
Segment liabilities                                     952 564       937 986 
		
Other segment items
Depreciation                                             75 008        62 921 
Amortisation                                              6 773         1 876 
Capital expenditure                                     198 042       110 909 

*Includes Namibia, Swaziland and Lesotho 

NOTES TO THE SUMMARY CONSOLIDATED GROUP ANNUAL FINANCIAL INFORMATION
1. Basis of preparation. The summary consolidated financial information ("financial information") announcement is based on the audited financial statements of the group for the year ended 30 June 2013 which have been 
prepared in accordance with International Financial Reporting Standards ("IFRS"), the Listings Requirements of the JSE and the Companies Act of South Africa (2008) and consistently applied to the prior year. The annual financial statements were prepared under the supervision of the financial director, Mr AE Prowse CA (SA) and approved by the board on 16 September 2013.

2. Independent audit by the auditor. These summary consolidated results have been audited by our auditor PricewaterhouseCoopers Inc., who has performed the audit in accordance with the International Standards on Auditing. A copy of the 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 Sunday of the month (2013: 30 June (52 weeks); 2012: Saturday 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 year by the weighted average number of 23 090 567 ordinary shares in issue during the year (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 R237.4 million (June 2012: R285.6 million) and a weighted average of  23 090 567 (June 2012: 22 742 446) and fully diluted of 23 643 228 (June 2012: 22 809 260) ordinary shares in issue. 

Reconciliation between net profit attributable to the equity holders of the company and headline earnings:
R'000                                                                       % 
                                                    Jun-13    Jun-12   change 
Net profit attributable to owners of 
  the company                                      245 490   286 832      (14)
Profit on sale of assets after taxation             (8 046)   (1 264)       -
Headline earnings                                  237 444   285 568      (17)
Headline earnings per share (cents)                1 028.3   1 255.7      (18)
Diluted headline earnings per share (cents)        1 004.3   1 252.0      (20)


6. Unaudited pro-forma information illustrating the impact of the 53rd week on the annual results for the year ended June 2012 compared to June 2013.
Although Cashbuild has reported financial results for the year (52 weeks) to 30 June 2013, it is appropriate and good practice to illustrate pro-forma information of the comparative 52 week prior period for the user of these financial statements.

The unaudited pro-forma information presented below has been prepared for illustrative purposes only, to indicate how such information compares to the unaudited pro-forma results of the group for the prior 52 week ended 23rd June 2012. The directors of the company are responsible for the compilation, contents and preparation of the unaudited pro-forma financial information.

                             AUDITED             UNAUDITED            AUDITED 
                              Actual                Actual             Actual 
                                2013         %        2012   53rd        2012 
R'000                      (52 weeks)   change   (52 weeks)  week   (53 weeks)
Revenue                    6 376 945         3   6 178 907  131 145  6 310 052 
Operating profit             322 540       (12)    366 710   33 765    400 475 
Net profit attributable 
  to owners of the company   245 490        (7)    262 723   24 109    286 832 
Headline earnings            237 444        (9)    261 459   24 109    285 568 
Earnings per share (cents)   1 063.2        (8)    1 155.2             1 261.3 
Headline earnings per share
  (cents)                    1 028.3       (11)    1 149.7             1 255.7 
Net asset value per share
  (cents)                      4 379        16       3 782               3 877 

Notes:

1. The accounting policies adopted in the latest audited annual financial statements, which have been prepared in accordance with IFRS, have been used in preparing the unaudited pro-forma information.

2. The "53rd week" column for the comparative year, represents the actual sales of product for the 53rd week and directly related costs, net of taxation for the one week period (24 - 30 June). Cost of sales and directly related variable operating expenses are calculated based on the actual percentages achieved during the prior financial year. The cost of sales of the 53rd week also includes an additional month's settlement discount relating to the trade suppliers' payment at the prior year-end.

3. The "Actual 2012 (52 weeks)" column in the opinion of the directors, fairly reflects the results of the 52 week period ended 23rd June 2012.

7. Declaration of dividend. The board has declared a final dividend (No. 41), of 191 cents (June 2012: 273 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 (2012: 25 189 811) shares in issue at date of dividend declaration. Net local dividend amount is 162.35 cents per share for shareholders liable to pay Dividends Tax and 191 cents per share for shareholders exempt from paying Dividends Tax. The total dividend for the year amounts to 487 cents (2012: 569 cents). 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, 16 September 2013
Last day to trade "CUM" the dividend: Friday, 4 October 2013
Date commence trading "EX" the dividend: Monday, 7 October 2013 
Record date: Friday, 11 October 2013
Date of payment: Monday, 14 October 2013
Share certificates may not be dematerialised or rematerialised between Monday, 7 October 2013 and Friday, 11 October 2013, both dates inclusive. 

On behalf of the board 

DONALD MASSON                            WERNER DE JAGER
Chairman                                 Chief Executive

Johannesburg                             16 September 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 (200 at the end of this financial year). 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.

FINANCIAL HIGHLIGHTS
The commentary below relates to statutory results. For a 52 week vs 52 week comparison, refer to the pro-forma information in Note 6 above.

Revenue for the year increased by 1% whilst gross profit decreased by 1%. Operating profit decreased by 19% largely due to operating expenses increasing by 6%. Basic earnings per share decreased by 16% and headline earnings per share decreased by 18%. Net asset value per share has shown a 13% increase, from  3 877 cents (June 2012) to 4 379 cents. Cash, cash equivalents and financial assets have decreased by 49% to R249 million as a result of increased capital expenditure and stockholding. 

Stores in existence since the beginning of July 2011 (pre-existing stores  187 stores) decreased by 1% in revenue and the 13 new stores contributed 2%. This increase for the year has been achieved in tough trading conditions with selling price inflation of 2%. As anticipated, gross margin percentage has decreased to more normalised levels of 22.8%.

Operational expenses for the year remained well controlled with existing stores accounting for 3% of the increase and new stores 3%. The total increase for the year amounted to 6%. The main contributor to the increase on existing stores was systems related, due to the roll-out of the new IT system that was completed during the year.

The effective tax rate for the year of 29% is 3% lower than that of the previous 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 33%, with overall stockholding at 83 days (June 2012: 63 days). Trade receivables remain well under control.

During the financial year, Cashbuild opened nine new stores, 20 stores were refurbished and six stores were relocated. Cashbuild will continue its store expansion, relocation and refurbishment strategy in a controlled manner, applying the same rigorous process as in the past.

PROSPECTS
Despite tough trading conditions, management is positive about the top line trading prospects for the next quarter. The first eight trading weeks since year-end have reported an increase in revenue of 10% on that of the comparable eight weeks, whilst the gross margin remained under pressure. This general forecast has not been reviewed nor audited by the company's auditor.

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

Auditor: PricewaterhouseCoopers Inc. 

Sponsor: Nedbank Capital

Cashbuild Limited (Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE code: CSB
ISIN: ZAE000028320
QUALITY BUILDING MATERIALS AT THE LOWEST PRICES
www.cashbuild.co.za

Date: 17/09/2013 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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