Wrap Text
Unaudited condensed consolidated interim results
Mazor Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 2007/017221/06
Share code: MZR
ISIN: ZAE00109823
('Mazor' or 'the company' or 'the group')
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS
for the six months ended 31 August 2013
Revenue up 25.8%
Gross profit up 50.9%
HEPS up 289.8%
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
as at as at as at
31 August 31 August 28 February
2013 2012 2013
R R R
ASSETS
Non-current assets
Property, plant and equipment 85 145 361 71 099 081 86 514 822
Goodwill 8 141 200 8 396 200 8 396 200
Intangible asset 20 000 000 20 000 000 20 000 000
Other financial assets - 72 980 -
Equity-accounted investments 1 067 240 1 860 469 1 374 547
Loans to equity-accounted investments 2 115 661 - 2 115 123
Deferred tax 11 295 411 10 427 416 11 480 066
127 764 873 111 856 146 129 880 758
Current assets
Inventories 103 698 485 98 598 172 96 813 413
Loans to equity-accounted investments - 2 114 257 -
Construction contracts and receivables 18 162 009 34 360 000 42 167 592
Other financial assets 990 341 - -
Current tax receivable 4 675 1 223 499 702
Trade and other receivables 47 467 081 56 809 180 43 917 132
Cash and cash equivalents 74 279 770 41 699 272 50 694 173
244 602 361 234 804 380 233 593 012
Non-current assets held-for-sale and assets
of disposal groups - - 751 364
Total assets 372 367 234 346 660 526 364 225 134
EQUITY AND LIABILITIES
Equity
Stated capital 76 945 787 - 76 945 787
Share capital - 1 186 -
Share premium - 76 944 601 -
Retained income 187 368 013 159 964 175 172 724 567
264 313 800 236 909 962 249 670 354
Liabilities
Non-current liabilities
Other financial liabilities 24 544 514 32 936 226 27 327 867
Deferred tax 652 561 64 350 1 301 556
25 197 075 33 000 576 28 629 423
Current liabilities
Other financial liabilities 14 311 012 17 643 901 23 174 959
Current tax payable 2 961 192 - 404 253
Trade and other payables 60 785 495 56 890 867 57 167 591
Bank overdraft 4 798 660 2 215 220 5 178 554
82 856 359 76 749 988 85 925 357
Total liabilities 108 053 434 109 750 564 114 554 780
Total equity and liabilities 372 367 234 346 660 526 364 225 134
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28 February
2013 2012 2013
R R R
Continuing operations
Revenue 252 828 922 200 956 801 428 679 423
Cost of sales (182 167 160) (154 125 212) (324 286 542)
Gross profit 70 661 762 46 831 589 104 392 881
Other income 1 563 351 15 008 810 19 663 624
Operating expenses (46 848 413) (44 070 975) (86 755 072)
Operating profit 25 376 700 17 769 424 37 301 433
Investment revenue 1 218 723 1 317 941 2 639 624
Income from equity-accounted investments (307 307) 498 311 12 390
Finance costs (1 979 845) (847 905) (2 823 198)
Profit before taxation 24 308 271 18 737 771 37 130 249
Taxation (6 655 544) (1 236 146) (6 690 540)
Profit from continuing operations 17 652 727 17 501 625 30 439 709
Discontinued operations
Profit/(Loss) from discontinued operations 2 689 128 (280 234) (457 925)
Total comprehensive income for the year 20 341 855 17 221 391 29 981 784
Number of shares in issue 121 501 553 121 501 553 121 501 553
Number of shares in issue (after
treasury shares) 118 658 716 118 658 716 118 658 716
Weighted average number of shares 118 658 716 118 658 716 118 658 716
Basic and diluted earnings per share (cents) 17.14 14.51 25.27
RECONCILIATION BETWEEN EARNINGS AND HEADLINE EARNINGS:
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28 February
2013 2012 2013
R R R
Earnings attributable to ordinary shareholders 20 341 855 17 221 391 29 981 784
Adjusted for:
IFRS 3 fair value adjustment (included in
other income) - (9 845 054) (9 845 053)
Gain on bargain purchase (included in
other income) - (2 768 542) (3 025 384)
Gain on disposal of discontinued operation (3 380 620) - -
Tax effect thereof 634 334 - -
(Gain)/Loss on disposal of property, plant
and equipment 38 058 (119 340) (130 818)
Tax effect thereof (10 656) 33 415 36 629
Headline earnings 17 622 971 4 521 870 17 017 158
Basic and diluted headline earnings per
share (cents) 14.85 3.81 14.34
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28 February
2013 2012 2013
R R R
Cash flows from operating activities
Cash generated from operations 42 609 206 4 483 524 34 423 789
Interest income 1 218 723 1 209 846 2 639 624
Finance costs (1 944 701) (847 905) (2 671 865)
Tax paid (5 507 904) (2 134 756) (5 593 694)
Dividends paid (5 698 409) (1 899 389) (1 899 389)
Cash flows of held-for-sale/discontinued
operations 305 158 (401 511) (606 060)
Net cash flow from operating activities 30 982 073 409 809 26 292 405
Cash flows from investing activities
Purchase of property, plant and equipment (3 231 764) (9 324 633) (18 969 006)
Proceeds from disposal of plant and equipment 223 624 628 236 810 323
Investment in joint venture acquired - (1 350 973) (1 350 972)
Cash inflow/(outflow) on acquisition of subsidiary - 4 213 400 (16 255 975)
Proceeds from disposal of listed shares - 866 779 925 495
Proceeds on disposal of discontinued operations 7 635 980 - -
Repayment of loan by equity-accounted investments - - 9 999
Increase in loan to equity-accounted investments (538) (2 104 258) (2 115 123)
Net cash flow from investing activities 4 627 302 (7 071 449) (36 945 259)
Cash flows from financing activities
(Repayment)/Increase in other financial
liabilities (11 643 884) 4 482 883 14 505 664
Net cash flow from financing activities (11 643 884) 4 482 883 14 505 664
Decrease in cash and cash equivalents
for the year 23 965 491 (2 178 757) 3 852 810
Cash and cash equivalents at the beginning
of the year 45 515 619 41 662 809 41 662 809
Cash and cash equivalents at the end
of the year 69 481 110 39 484 052 45 515 619
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Stated Retained Total
capital premium capital income equity
R R R R R
Balance at 1 March 2012 1 186 76 944 601 - 144 642 173 221 587 960
Changes in equity
Total comprehensive income
for the period 29 981 783 29 981 783
Dividends paid (1 899 389)* (1 899 389)
Convert to no par
value shares (1 186) (76 944 601) 76 945 787
Balance at 28 February 2013 - - 76 945 787 172 724 567 249 670 354
Changes in equity
Total comprehensive income
for the period 20 341 855 20 341 855
Dividends paid (5 698 409)* (5 698 409)
Balance at 31 August 2013 - - 76 945 787 187 368 013 264 313 800
* A net dividend of 4.08 cents per share was paid on 3 June 2013 (1.381 cents per share
on 11 June 2012)
CONDENSED SEGMENT REPORT
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28 February
2013 2012 2013
R R R
Segment revenue - external
- Aluminium 135 256 538 85 177 883 184 843 543
- Steel 51 434 566 46 540 619 106 522 084
- Glass# 66 137 818 69 238 299 137 313 796
- Corporate - - -
252 828 922 200 956 801 428 679 423
Segment revenue - internal
- Aluminium 1 658 723 600 877 1 936 480
- Steel 1 426 500 - -
- Glass# 21 360 602 17 882 292 35 735 388
- Corporate 3 007 378 1 770 000 4 381 148
27 453 203 20 253 169 42 053 016
Segment result - operating profit
- Aluminium 19 449 420 3 199 289* 18 733 555
- Steel 5 731 136 328 217 7 139 027
- Glass# (1 550 605) 2 120 793 (2 210 103)
- Corporate 1 746 749 12 121 124* 13 638 954
25 376 700 17 769 424 37 301 433
Segment assets
- Aluminium 132 749 525 113 763 743 115 774 307
- Steel 65 498 946 62 729 336 69 137 397
- Glass 151 519 566 157 764 557 156 255 409
- Corporate 22 599 197 12 402 890 23 058 021
372 367 234 346 660 526 364 225 134
Segment liabilities
- Aluminium 33 820 392 53 693 051 31 745 494
- Steel 9 057 352 11 174 152 13 696 382
- Glass 54 882 812 44 736 880 57 896 546
- Corporate 10 292 879 146 481 11 216 358
108 053 434 109 750 564 114 554 780
* The fair value adjustment and gain on bargain purchase on the step-acquisition of HBS
was reclassified from the Aluminium segment to the Corporate segment in August 2012 in
order to achieve consistency with the February 2013 annual report
# Excludes discontinued operations
COMMENTARY
INTRODUCTION
The unaudited condensed consolidated interim results for the six months to
31 August 2013 ('the period') reflect continued improvement in the group's performance
as market conditions in the construction sector stabilise.
BASIS OF PREPARATION
The unaudited condensed consolidated interim results have been prepared in
accordance with and containing the information required by IAS 34: Interim Financial
Reporting, the recognition and measurement requirements of 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 Listings Requirements. The accounting
policies and methods of computation applied in the preparation of these unaudited
condensed consolidated interim financial statements comply with IFRS and are
consistent with those applied in the audited annual financial statements for the year
ended 28 February 2013.
These unaudited condensed consolidated interim results were authorised for issue by
the board of directors on 4 November 2013.
The unaudited condensed consolidated financial statements for the period ended
31 August 2013 have been prepared under the supervision of the financial director,
Ms L Mazor CA(SA) and have not been reviewed or audited by the company's
auditors, Mazars.
These unaudited condensed consolidated interim financial statements should be read
in conjunction with the audited annual financial statements for the year ended
28 February 2013.
GROUP PROFILE
The Steel division comprises Mazor Steel which designs, supplies and erects
structural steel frames.
The Aluminium division comprises Mazor Aluminium which designs, manufactures and
installs aluminium structures such as doors, windows, shopfronts, facades and
balustrades for major blue-chip construction groups. HBS augments the division's
offering with a wide range of fenestration systems and accessories.
The Glass division comprises Compass Glass and Compass Glass SA, which manufacture
and distribute laminated and toughened safety glass and double-glazed units.
The group has a strong national presence across Gauteng, KwaZulu-Natal and the
Eastern Cape in addition to its historical base in the Western Cape.
REVIEW OF OPERATIONS
The group continued to deliver solid growth driven by favourable market conditions
spurred by the recovery of the construction sector. Demand has stabilised,
supporting higher margins. The first six months of the year saw operations performing
better than in the past three years. The group is in a strong cash position and
remains focused on improving cash generation.
Steel delivered an improved performance over the comparable period.
Aluminium continued to perform well, buoyed by a substantial increase in margins.
The division was awarded numerous new contracts in the previous year which have
continued in the current period. HBS performed beyond expectations reflecting the
success of aggressive marketing and the expansion of the product range.
Glass performance remained stable at the Cape Town, Johannesburg and George branches.
To improve return on equity the group disposed of Compass Glass SA's Port Elizabeth
and East London branches. The group continues to focus on rationalisation aimed at
driving higher gross profit in the division.
FINANCIAL RESULTS
Revenue from continuing operations was up by 25.8% to R252.8 million compared to
R200.9 million in the same period in the previous year. Revenue for the Steel division
was up 10.5% to R51.4 million and in the Aluminium division revenue was up 58.8% to
R135.3 million. Glass saw a slight decrease in revenue from continuing operations of
4.5% to R66.1 million due to rationalisations and a focus on more profitable accounts.
Operating profit from continuing operations in the prior year included a fair value
adjustment as well as a gain on bargain purchase which arose on the acquisition of
the remaining 50% of HBS. After removing the effects of these two items, operating
profit for the period increased by 392.2% over the comparative period. Headline
earnings per share increased by 289.8% on the comparative period to 14.85 cents per
share from 3.81 cents per share.
Cash and cash equivalents increased by R24.0 million during the period due
predominantly to cash generated from operations.
DISPOSALS
In line with its rationalisation strategy, the group sold its East London and
Port Elizabeth divisions of Compass Glass SA with effect from 1 March 2013 and
1 July 2013 respectively for a consideration of R8.6 million. The divisions have been
disclosed as discontinued operations and the comparative periods restated accordingly.
DIVIDEND DECLARATION
In line with group policy, no interim dividend has been declared for the period.
PROSPECTS
Mazor is confident that the construction sector has turned a corner and is well on
the way to recovery. Demand is stronger and is expected to improve further. The group
is poised to return to meaningful profit increases. Aluminium has a healthy pipeline
for the short to medium term. Glass is expected to increase profits in the year ahead;
the primary focus for the second half of the year is cost cutting at the Compass Glass
Cape Town branch. Steel construction in Cape Town has been subdued. However,
substantial projects are expected to start within the next 12 months. Going forward
the group intends to build on market gains driving margin expansion and capturing
more substantial market share.
The group is well positioned with a broad presence across South Africa, fast
expanding product range and established capability to benefit from the current and
future market up-tick. Mazor will target the higher margin work as it becomes available.
Acquisitions in line with current offering will be considered.
APPRECIATION
We thank our management and staff for their commitment and hard work during the
period. We also thank our board for their continued invaluable guidance and our
business associates, customers and shareholders for their unwavering support.
FORWARD-LOOKING STATEMENTS
This announcement contains certain forward-looking statements with respect to the
financial condition and results of the operations of Mazor that, by their nature,
involve risk and uncertainty because they relate to events and depend on circumstances
that may or may not occur in the future. These may relate to future prospects,
opportunities and strategies. If one or more of these risks materialise, or should
underlying assumptions prove incorrect, actual results may differ from those
anticipated. By consequence, none of the forward-looking statements have been
reviewed or reported on by the group's auditors.
On behalf of the board
M Kaplan R Mazor
Chairman CEO
5 November 2013
Directors: M Kaplan (Chairman)*^, R Mazor (CEO), L Mazor (Financial Director),
S Mazor, A Darko*^, A Groll*^, F Boner*^, A Varachhia*
* Non-executive director ^ Independent
Company secretary: Ivor Mark Bloom
Registered office: 8 Monza Road, Killarney Gardens, 7441 (PO Box 60635,
Table View, 7439)
Sponsor: Bridge Capital Advisors (Pty) Limited, 2nd Floor, 27 Fricker Road,
Illovo Boulevard, Illovo, 2196 (PO Box 651010, Benmore, 2010)
Transfer secretaries: Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
Date: 05/11/2013 03:21:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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