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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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