Wrap Text
Reviewed condensed consolidated interim financial results for the six months ended 31 August 2013
INFRASORS HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 2007/002405/06
Share code: IRA ISIN: ZAE 000101507
("Infrasors", "the Company" or "the Group")
REVIEWED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS
FOR THE SIX MONTHS ENDED 31 AUGUST 2013
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Restated Restated Restated
Reviewed unaudited audited audited
R000's 6 months ended 6 months ended 12 months ended 12 months ended
Note 31 August 2013 31 August 2012 28 February 2013 29 February 2012
Revenue 164 540 144 232 282 605 272 744
Cost of sales (111 704) (112 228) (221 433) (191 411)
Gross profit 52 836 32 004 61 172 81 333
Other income 237 296 530 882
Administration and other operating
expenses (25 668) (17 272) (52 060) (34 663)
Depreciation and amortisation (17 490) (11 611) (37 608) (20 975)
Contribution/(loss) from operations 9 915 3 417 (27 966) 26 577
Fair value adjustment on financial asset - - (43 365) -
Other fair value adjustments and 3 (242 752) 10 015
impairments (5 275) -
Operating profit before interest 4 640 3 417 (314 083) 36 592
Investment revenue 339 1 974 6 869 5 635
Finance costs (6 695) (4 903) (13 470) (12 549)
(Loss)/profit before tax (1 716) 488 (320 684) 29 678
Taxation 4 2 254 (166) 15 076 (5 208)
Profit/(loss) for the period 538 322 (305 608) 24 470
Total comprehensive income/(loss) for the period 538 322 (305 608) 24 470
Analysis of profit/(loss) and total comprehensive
income/(loss) for the period
Attributable to the equity holders of Infrasors 122 111 (305 058) 24 680
Attributable to non-controlling interest 416 211 (550) (210)
538 322 (305 608) 24 470
Earnings/(loss) per share (cents)
Basic and diluted 1 0.1 0.1 (166.1) 13.4
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Restated Restated Restated
Reviewed as at unaudited as at audited as at audited as at
R000's Note 31 August 2013 31 August 2012 28 February 2013 1 March 2012
Non-current assets 250 415 608 789 281 996 596 475
Property, plant and equipment 5 220 741 336 544 242 381 327 071
Investment property 3 040 98 333 3 040 98 089
Mineral rights 2 672 92 464 2 690 92 464
Goodwill - 129 - 129
Held to maturity investment 7 - 49 596 11 676 49 596
Other financial assets 6 23 756 19 676 21 653 16 569
Deferred tax assets 206 12 047 556 12 557
Current assets 83 269 74 821 76 196 83 096
Inventories 15 560 22 099 16 859 19 962
Trade and other receivables 48 633 43 779 38 593 46 068
Cash and cash equivalents 19 076 8 943 20 744 17 066
Total assets 333 684 683 610 358 192 679 571
Capital and reserves
Total equity 129 487 452 706 140 626 452 384
Share capital 927 927 927 927
Share premium 256 959 256 959 256 959 256 959
Treasury shares 7 (13 942) (2 266) (2 266) (2 266)
Net issued capital 243 944 255 620 255 620 255 620
Revaluation reserve - 6 150 - 6 150
Retained (loss)/earnings 8 (116 237) 188 811 (116 358) 188 700
Attributable to equity holders of parent 127 707 450 581 139 262 450 470
Non-controlling interest 1 780 2 125 1 364 1 914
Non-current liabilities 127 331 165 950 147 739 169 361
Borrowings 68 229 77 216 81 903 80 623
Environmental rehabilitation 25 009 23 178 26 747 23 178
provision
Deferred tax liabilities 34 093 65 556 39 089 65 560
Current liabilities 76 866 64 954 69 827 57 826
Borrowings 13 104 21 288 18 812 22 115
Loans from holding company 6 433 - - -
Trade and other payables 36 466 43 610 40 693 35 452
Bank overdraft 19 275 - 9 588 -
Current tax liabilities 1 588 56 734 259
Total Liabilities 204 197 230 904 217 566 227 187
Total equity and liabilities 333 684 683 610 358 192 679 571
Net asset value per share (cents) 80.1 245.3 75.8 245.2
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed Restated unaudited Restated audited Restated audited
R000's 6 months ended 6 months ended 12 months ended 12 months ended
31 August 2013 31 August 2012 28 February 2013 29 February 2012
Cash inflow from operating activities 5 524 19 583 20 229 31 208
Cash outflow from investing activities (3 930) (23 346) (16 001) (38 455)
Cash outflow from financing activities (12 949) (4 360) (10 138) 7 269
Net decrease in cash and cash
equivalents (11 355) (8 123) (5 910) 22
Cash and cash equivalents at the
beginning of the period 11 156 17 066 17 066 17 044
Cash and cash equivalents at the
end of the period (199) 8 943 11 156 17 066
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Restated Restated Restated
Reviewed unaudited audited audited
6 months ended 6 months ended 12 months ended 12 months ended
R000's 31 August 2013 31 August 2012 28 February 2013 1 March 2012
Share capital 927 927 927 927
Share premium 256 959 256 959 256 959 256 959
Treasury shares (13 942) (2 266) (2 266) (2 266)
Opening balance (2 266) (2 266) (2 266) (2 266)
Retrieval of shares from Infrasors (11 676) - - -
Empowerment Trust (refer note 7)
Revaluation reserve - 6 150 - 6 150
Opening balance - 6 150 6 150 6 150
Change in deferred tax rate - - (340) -
Loss on revaluation of land - - (7 151) -
Deferred tax on loss on revaluation of - - 1 341 -
land
Retained (loss)/income (116 237) 188 811 (116 358) 188 700
Original balance (103 566) 198 603 198 603 171 049
Restatement (12 793) (9 903) (9 903) (7 029)
Restated opening balance (116 359) 188 700 188 700 164 020
Restated profit for the period in total - 111 (305 058) 24 680
comprehensive income
Profit for the period in total 122 - - -
comprehensive income
Non-controlling interest 1 780 2 125 1 364 1 914
Opening balance 1 364 1 914 1 914 -
Non-controlling interest arising from - - - 2 124
business combination
Profit for the period in total 416 211 (550) (210)
comprehensive income
Balance at end of the period 129 487 452 706 140 626 452 384
CONDENSED SEGMENT RESULTS
Dolomite and
Silica limestone Other Total
R000's
Reviewed six months ended 31 August 2013
Turnover from external customers 46 611 117 929 - 164 540
Inter-segment revenues - - 15 118 15 118
Impairments and fair value adjustments (5 275) - - (5 275)
Depreciation and amortisation (6 605) (9 282) (1 603) (17 490)
Interest revenue - 108 231 339
Interest expense (729) (356) (5 610) (6 695)
Contribution/(loss) from operations 2 152 12 456 (4 693) 9 915
Profit/((loss) before tax (3 852) 12 208 (10 072) (1 716)
Assets 85 657 235 021 13 006 333 684
Liabilities 30 591 97 725 75 881 204 197
Restated unaudited six months ended 31 August 2012
Turnover from external customers 46 230 98 002 - 144 232
Inter-segment revenues - - 9 000 9 000
Impairments and fair value adjustments - - - -
Depreciation and amortisation (4 650) (6 618) (343) (11 611)
Interest revenue 114 609 1 251 1 974
Interest expense (571) (475) (3 857) (4 903)
Contribution/(loss) from operations 3 215 4 669 (4 467) 3 417
Profit/(loss) before tax 2 758 4 803 (7 073) 488
Assets 169 143 249 605 264 862 683 610
Liabilities 67 747 91 156 72 001 230 904
Restated audited 12 months ended 28 February 2013
Turnover from external customers 89 806 191 440 1 359 282 605
Inter-segment revenues - - 22 425 22 425
Impairments and fair value (150 990) (3 576) (131 551) (286 117)
adjustments
Depreciation and amortisation (16 450) (20 710) (447) (37 607)
Interest revenue 1 197 6 671 6 869
Interest expense (2 528) (3 478) (7 464) (13 470)
Contribution/(loss) from operations (11 556) 9 978 (26 388) (27 966)
Profit/(loss) before tax (141 085) 4 054 (183 653) (320 684)
Assets 92 028 237 909 28 255 358 192
Liabilities (50 028) (88 865) (78 673) (217 566)
Dolomite and
Silica limestone Other Total
R000's
Restated audited 12 months ended 29 February 2012
Turnover from external customers 85 661 185 205 1 878 272 744
Inter-segment revenues - - 16 845 16 845
Impairments and fair value - - 10 015 10 015
adjustments
Depreciation and amortisation (8 406) (11 692) (877) (20 975)
Interest revenue 1 497 5 137 5 635
Interest expense (945) (699) (10 905) (12 549)
Contribution/(loss) from operations 13 100 23 923 (10 446) 26 577
Profit/(loss) before tax 12 155 23 720 (6 197) 29 678
Assets 108 855 249 248 321 468 679 571
Liabilities (46 905) (84 814) (95 468) (227 187)
NOTES TO THE REVIEWED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. Earnings per share ("EPS") reconciliation Basic and diluted
Restated Restated
Reviewed unaudited Restated audited audited
6 months ended 6 months ended 12 months ended 12 months ended
R000's 31 August 2013 31 August 2012 28 February 2013 28 February 2012
Restated net profit/(loss) 122 111 (305 058) 24 680
Total shares in issue 000's 185 521 185 521 185 521 185 521
Treasury shares 000's 26 137 1 812 1 812 1 812
Net shares in issue 000's 159 384 183 709 183 709 183 709
Weighted average number of shares in
issue 000's 159 384 183 709 183 709 183 709
Earnings/(loss) per share Cents 0.1 0.1 (166.1) 13.4
2. Headline earnings per share ("HEPS") reconciliation Basic and diluted
Restated Restated Restated
Reviewed unaudited audited audited
6 months ended 6 months ended 12 months ended 12 months ended
R000's 31 August 2013 31 August 2012 28 February 2013 29 February 2012
Net profit/(loss) 122 111 (305 058) 24 680
Loss/(profit) on disposal of PPE 721 (204) 2 987 (122)
Fair value adjustments and impairments -
Fair value adjustment on investment property - - 88 109 (10 015)
Impairments of PPE 5 275 - 65 545 -
Impairments of mineral rights - - 88 969 -
Impairments of goodwill - - 129 -
Total fair value adjustments and impairments 5 275 - 242 752 (10 015)
Tax effect on headline adjustments (1 679) 57 (58 526) 1 436
Headline earnings/(loss) 4 439 (36) (117 845) 15 979
Weighted average number of shares in
issue 000's 159 384 183 709 183 709 183 709
Headline earnings/(loss) per share Cents 2.8 - (64.2) 8.7
Reviewed Restated Restated audited Restated audited
6 months ended unaudited 6 12 months ended 12 months ended
31 August 2013 months ended 28 February 2013 29 February 2012
R000's 31 August 2012 R000's R000's
R000's
3. Other fair value adjustments and
impairments
Fair value adjustment of investment property - - (88 109) 10 015
Impairments of property, plant and equipment (5 275) - (65 545) -
Impairments of mineral rights - - (88 969) -
Impairments of goodwill - - (129) -
(5 275) - (242 752) 10 015
Impairments of property, plant and equipment
during the period relate to the
Delf Sand Proprietary Limited plant and equipment
impaired as the business is the nearing the end of
its economic life
4. Taxation 2 254 (166) 15 076 (5 208)
Taxation reduction for the six months
ended 31 August 2013 due to deferred tax on the
assessed loss of Delf Sand Proprietary Limited
5. Capital commitments
Approved capital expenditure for the full year 6 000 19 169 19 169 16 455
to be funded from surplus cash and bank
financing
Reviewed Restated unaudited Restated audited Restated audited
6 months ended 6 months ended 12 months ended 12 months ended
31 August 2013 31 August 2012 28 February 2013 29 February 2012
R000's R000's R000's R000's
6. Other financial assets
Opening balance 21 653 16 569 16 569 11 433
Investment in environmental insurance 551 1 703 2 277 2 798
policies
Investment in guaranteed endowment policies 1 552 1 404 2 807 2 338
Closing balance 23 756 19 676 21 653 16 569
7. Movement in number of treasury shares
Shares Shares Shares Shares
Opening balance 1 811 927 1 811 927 1 811 927 1 811 927
Retrieval of shares from Infrasors
Empowerment Trust 24 325 348 - - -
Closing balance 26 137 275 1 811 927 1 811 927 1 811 927
24 325 348 Infrasors shares held as security on the held to maturity loan receivable from the Infrasors Empowerment Trust
amounting to R11.7 million was retrieved as the trust is unable to repay the debt.
8. Restatement of comparative periods
The following standards, amendments to published standards and interpretations which became effective for the period
commencing on 1 March 2013 were adopted by the Group:
IFRIC 20 Stripping costs in the production phase of a surface mine (effective date: 1 January 2013)
The transitional provisions of IFRIC 20 requires an entity to apply this IFRIC to production stripping costs incurred on or after the
beginning of the earliest period presented. The Group has adopted the IFRIC for the current accounting period, which commenced
on 1 March 2013. The IFRIC is therefore applied to production stripping costs incurred on or after 1 March 2012.
A summary of the impact on the comparitive and previous years results is set out below:
6 months 12 months 12 months
31 August 2012 28 February 2013 29 February 2012
As As As
previously Restatement As previously Restatement As previously Restatement As
R000's reported for IFRIC 20 restated reported for IFRIC 20 restated reported for IFRIC 20 restated
Balance sheet impact
Change in assets
Property plant and equipment
Mining assets and mine development costs: 17 34 - 17 344 22 337 - 22 337 14 767 - 14 767
Accumulated depreciation - (15 762) (15 762) (2 677) (17 767) (20 444) - (13 754) (13 754)
Change in equity and liabilities
Retained earnings 200 159 (11 348) 188 811 (103 566) (12 792) (116 358) 198 603 (9 903) 188 700
Deferred tax liabilities 69 970 (4 412) 65 556 44 064 (4 975) 39 089 69 411 (3 852) 65 559
Income statement impact
Increase in depreciation (9 604) (2 007) (11 611) (33 595) (4 013) (37 608) (16 984) (3 991) (20 975)
Decrease in taxation deferred tax 2 689 562 3 251 9 407 1 123 10 530 4 756 1 117 5 873
Decrease in net income for the period (6 915) (1 445) (8 360) (24 188) (2 890) (27 078) (12 228) (2 874) (15 102)
Effect on dolomite and limestone
segment report
Profit/(loss) before tax 2 495 (2 007) 488 (316 671) (4 013) (320 684) 33 669 (3 991) 29 678
Total assets 699 372 (15 762) 683 610 375 959 (17 767) 358 192 693 325 (13 754) 679 571
Earnings/(loss) per share 0.8 (0.7) 0.1 (164.5) (1.6) (166.1) 15.0 (1.6) 13.4
Headline earnings/(loss) per share 0.8 (0.8) - (62.6) (1.6) (64.2) 10.3 (1.6) 8.7
9. Related party transactions
Reviewed Restated unaudited Restated audited Restated audited
6 months ended 6 months ended 12 months ended 12 months ended
31 August 2013 31 August 2012 28 February 2013 29 February 2012
R000's R000's R000's R000's
Management and consulting fees paid to
Afrimat Limited 4 868 - - -
Contributions made to the Infrasors
Environmental Rehabilitation Trust 389 519 1 072 1 038
Rental recoveries from director controlled entity - 145 192 252
Rent paid to Whirlprops 35 Proprietary Limited 190 675 1 492 1 137
10. Events after reporting date
Bridge Capital Advisors Proprietary Limited has been appointed as sponsor with effect from 1 September 2013.
As part of the company's share buy-back campaign, 128 669 shares have been repurchased by the subsidiary Infrasors
Management Services Proprietary Limited at an average price of 79c per share since 1 September 2013.
11. Contingent liability
On 25 June 2013 SARS issued an adjusted income tax assessment claiming R9.7 million additional tax, R7.3 million penalties and
R2.4 million interest, relating to the activities of the subsidiary Lyttelton Dolomite Proprietary Limited for the tax years 2010, 2011
and 2012 based on the premise that the company is not a mining entity. The company has submitted an objection to SARS and is
of the opinion that the activities are of a mining nature.
COMMENTARY
Basis of preparation
The reviewed condensed consolidated interim results for the six months ended 31 August 2013 ("period") have been prepared in accordance
with and containing the information required by IAS 34: Interim Financial Reporting, recognition and measurement requirements the
International Financial Reporting Standards ("IFRS"), the SAICA financial reporting guides as issued by the Accounting Practices Committee,
and the South African Companies Act, No 71 of 2008 and comply with the JSE Listing Requirements. The accounting policies and methods of
computation applied in the preparation of these interim results comply with IFRS and are consistent with those applied in the audited annual
financial statements for the 12 months ended 28 February 2013, apart from the effect from the change in accounting policy related to the
first time adoption of IFRIC 20.
The reviewed condensed consolidated interim financial statements have been prepared under the supervision of the Financial
Director, M. Potgieter CA (SA).
Introduction
The reviewed condensed consolidated interim financial results for the period reflect the benefits from the turnaround initiatives that
commenced on 1 March 2013.
A majority shareholding of 50.7% of the Company was acquired by Afrimat Limited ("Afrimat") with effect from 1 March 2013. This
was followed by two offers by Afrimat to minorities at 35 cents and 65 cents per share, respectively. Afrimat's stake in Infrasors
now stands at 59.78%.
Financial results
Revenue for the period increased by 11.8% to R164.59 million (Aug 2012: R147.2 million). Contribution from operations increased by
190.2% to R9.9 million (Restated 2012: R3.4 million). Profit after tax amounts to R0.5 million (Restated 2012: R0.3 million) and
includes the costs of impairment to assets amounting to R5.3 million.
Cash generated from operating activities reduced to R5.5 million (Aug 2012: R19.6 million), mainly due to the increased working capital
of R13.5 million. The cash outflow from investing activities decreased to R3.9 million (Aug 2012: R23.3 million) as a result of reduced
plant and equipment additions. The net outflow of financing activities of R12.9 million (Aug 2012: R4.4 million) was an increase largely
attributable to settlement of borrowings payable to the IDC to the extent of R13.5 million.
Operational review
Silica segment activities were constrained due to the declining raw material reserve at Delf Silica and the delay in obtaining the
Delf Cullinan mining right. Dolomite segment benefited from higher demand from the construction sector, increased sales prices
and cost reduction initiatives which are beginning to show positive results. Limestone segment benefited from increased sales
prices and improved production throughputs.
The turnaround initiatives throughout the Group are progressing satisfactorily with improved plant availability, increased production
throughput and increased sales margins.
There has been no material change in the Group's mineral reserves during the periods.
Dividends
The directors have elected not to declare a dividend for the period ended 31 August 2013 (2012: R nil) until such time as the group's
debt to equity ratio reach a level acceptable to its financiers.
Prospects
The Group expects to remain a key supplier to the local construction and metallurgical markets and should in future also benefit
from current cost reduction initiatives and its renewed focus on marketing.
Initiatives aimed at expanding volumes, reducing costs, improving efficiencies and developing the required skill levels of our
employees will be a key focus in all operations.
Auditor's Review
The condensed consolidated interim financial statements for the period have been reviewed by the company's auditors, Mazars.
Their unmodified review opinion is available for inspection at the company's registered office. Their review was conducted in
accordance with ISRE2410 "Review of interim financial information performed by the independent auditor of the entity".
On behalf of the board
M Noge LR Loubser
Chairman Managing Director
30 October 2013
ADMINSTRATIVE INFORMATION AT DATE OF THIS REPORT
Directors
M Noge# (Chairman), LR Loubser (Managing Director), M Potgieter (Financial Director), JCP Bekker# , T de Bruyn* ,
AJ van Heerden* , HP Verreynne* , PFC Ying#
All of the above directors are South African and resident in South Africa.
* Non-executive director's # Independent non-executive directors
Registered office
Lyttelton Dolomite Mine,
Botha Avenue, Lyttelton,
Centurion, 0157
(P.O. Box 14014, Lyttelton, 0140)
Sponsor
Bridge Capital Advisors Proprietary Limited
2nd Floor, 27 Fricker Road, Illovo, 2196
(PO Box 651010, Benmore, 2010)
Legal Advisers and Attorney
Webber Wentzel
10 Fricker Road, Illovo Boulevard, Johannesburg 2196
(P.O. Box 6771, Marshalltown, 2107)
Auditors
Mazars
2nd Floor Mazars House,
5 St David's Place, Parktown 2193
(P.O. Box 6697, Johannesburg, 2000)
Transfer Secretaries
Link Market Services South Africa Proprietary Limited
13th Floor, Rennies House,
19 Ameshoff Street, Braamfontein, 2001
(P.O. Box 4844, Johannesburg, 2000)
Company secretary
PGS de Wit
Tyger Valley Office Park No. 2,
Corner Willie van Schoor Avenue and Old Oak Road, Tyger Valley, 7530
(P.O. Box 5278, Tyger Valley, 7536)
www.infrasors.co.za
Date: 30/10/2013 05:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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