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BRIKOR LIMITED - Unaudited Condensed Consolidated Interim Results for the six Months ended 31 August 2013

Release Date: 02/12/2013 11:15
Code(s): BIK     PDF:  
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Unaudited Condensed Consolidated Interim Results for the six Months ended 31 August 2013

BRIKOR LIMITED (In provisional liquidation)
Registration number: 1998/013247/06
JSE code: BIK
ISIN: ZAE000101945
(“Brikor” or “the Company” or “the Group”)
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX 
MONTHS ENDED 31 AUGUST 2013
HIGHLIGHTS
Revenue increased by 48% to R155,4 million
Gross profit increased by 41% to R52,7 million
Operating expenses increased by 13% to R16,9 million
Net increase in cash and cash equivalents of R30,4 million
Profit after tax improved to R24,9 million 
PREPARED BY:
The condensed consolidated interim financial results (“interim 
financial results” or “results”) for the six months ended 31 
August 2013 were prepared by Laura Craig CA(SA) under the 
supervision of Hanleu Botha, Financial Director. The interim 
results report for the six months ended 31 August 2013 was 
published on 2 December 2013 and is presented below: 
OVERVIEW 
The directors of Brikor are pleased to present the unaudited 
condensed consolidated interim financial results for the six 
months ended 31 August 2013, which reflect the profitable 
turnaround of the Group. 
Brikor is a diverse manufacturer and supplier of building and 
construction materials across a broad spectrum of the market from 
low-cost housing, residential to commercial, industrial, civil 
engineering and infrastructure projects and has an Aggregates 
division, Bricks division and a Coal division through its 
subsidiary, Ilangabi. 
During the 2013 financial year, the Board decided to focus on its 
core operations to improve Brikor’s financial position. Core 
focus areas included a reduction in costs, the commissioning of 
coal operations through its subsidiary and the sale of non-core 
assets. The successful implementation of these steps positively 
influenced the results for the six months ended 31 August 2013, 
resulting in the Group realising a commendable operating profit 
before impairment reversals of R36,6 million (31 August 2012: 
R23,0 million) compared to R34,5 million for the full 2013 
financial year. 
The increase in turnover has been largely attributable to the 
addition of coal sales and increased sales in the Bricks 
division. Gross profit value improved visibly as a result of cost 
management and high margins achieved in the Coal division, 
increased volumes and an improvement in yields in the Bricks 
division. 
As a result of the completion of certain contracts in the 
Aggregates division during the early part of the reporting period 
there has been a decrease in the profits achieved. However, new 
contracts have been entered into and will reflect in the latter 
part of the 2014 financial year.
The continued focus on working capital management and improved 
profit growth have resulted in the Group’s cash and cash 
equivalents now reflecting a positive balance of R12,0 million 
(31 August 2012: R18,4 million negative balance).  
FINANCIAL RESULTS 
In a competitive operating environment revenue increased by 48% 
to R155,4 million (31 August 2012: R104,7 million) and gross 
profit increased by 41% to R52,7 million (31 August 2012: R37,3 
million). The improvement in gross profit is mainly due to the 
addition of the Coal division.  
Operating expenses increased marginally by 13% to R16,9 million 
(31 August 2012: R14,9 million) as a result of continued cost 
management. 
The above measures resulted in the Group generating an operating 
profit before impairment reversals of R36,6 million (31 August 
2012: R23,0 million).
After taking finance income, finance costs and impairment 
reversals into consideration, the profit for the six months 
amounted to R30,2 million (31 August 2012: R12,9 million), and a 
total profit and other comprehensive income of R24,1 million (31 
August 2012: R2,1 million), which resulted in earnings per share 
of 3,9 cents (31 August 2012: 0,3 cents per share) and fully 
diluted headline earnings per share of 3,8 cents (31 August 2012: 
1,3 cents per share) for the six months. 
Continuing operations delivered earnings per share of 4,0 cents 
(2012: 2,0 cents per share) and fully diluted headline earnings 
per share of 3,9 cents (2012: 1,9 cents per share). 
Property, plant and equipment increased to R116,9 million (31 
August 2012: R95,2 million) as a net result of: 
-  additions of R13,6 million;
-  depreciation of R8,0 million;
-  transfers of assets to Investment Property of R14,3 million;
-  capitalisation of decommissioning assets of R6,7 million   
   relating to the environmental provision; 
-  disposals of R0,8 million; and
-  a reversal of impairment of R24,5 million on the Donkerhoek 
   plant, which is no longer impaired as the business has 
   returned to profitability. 
Due to a historical breach of covenants, Brikor’s loan facilities 
of R93,8 million (31 August 2012: R112,6 million) were 
reclassified as a current liability from 2011, in accordance with 
IAS 1, Presentation of Financial Statements. 
PROSPECTS 
The Group is benefiting from an improvement in market conditions 
and has positioned itself accordingly to extrapolate maximum 
benefits from such improvements. 
Assuming that current market and economic conditions will not 
deteriorate, Brikor is expecting continuing improved results for 
the next reporting period. 
The market and prospect information contained in the reviewed 
condensed consolidated provisional financial results for the six 
months ended 31 August 2013 have been neither reviewed nor 
reported on by the Group’s external auditors.
DIVIDEND 
No dividend has been declared for the period.
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX 
MONTHS ENDED 31 AUGUST 2013
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                 Unaudited Unaudited   Reviewed
                                  6 months  6 months       year
                                     ended     ended      ended
                                    31 Aug    31 Aug     28 Feb
                                      2013      2012       2013
                                     R'000     R'000      R'000
Continuing operations
Revenue                            155 392   104 652    223 755
Cost of sales                     (102 681)  (67 308)  (155 861)
Gross profit                        52 711    37 344     67 894
Other income                           830       603      1 100
Administration expenses            (14 617)  (12 598)   (29 815)
Distribution expenses               (1 892)   (1 841)    (3 943)
Operating expenses                    (405)     (492)      (777)
Operating profit before 
 impairment reversals               36 627    23 016     34 459
Reversal of impairments                  -     1 269     32 299
Operating profit before interest 
 and taxation                       36 627    24 285     66 758
Interest received                      830     1 207      2 516
Finance costs                       (7 276)  (12 642)   (23 449)
Profit before taxation              30 181    12 850     45 825
Taxation                            (5 262)        -     (1 797)
Profit after taxation from 
 continuing operations              24 919    12 850     44 028
Loss from discontinued operation      (878)      (42)      (530)
Profit/(loss) from disposal of 
 discontinued operation                 41   (10 740)   (10 569)
Total profit for the period 
 attributable to equity holders 
 of the Company                     24 082     2 068     32 929
Total comprehensive profit for 
 the year attributable to equity 
 holders of the Company             24 082     2 068     32 929
                                 Unaudited Unaudited   Reviewed
                                  6 months  6 months       year
                                     ended     ended      ended
                                    31 Aug    31 Aug     28 Feb
                                      2013      2012       2013
                                     R'000     R'000      R'000
Reconciliation of EBITDA
Operating profit before interest
and taxation (“EBIT”)               36 627    24 285     66 758
Depreciation cost of sales           4 246     2 852      6 388
Depreciation operating expenses        342       371        648
Impairment reversals                     -    (1 269)   (32 299)
Earnings before interest, taxation,
depreciation, amortisation and 
impairment reversals (“EBITDA”)     41 215    26 239     41 495
                                 Unaudited Unaudited   Reviewed
                                  6 months  6 months       year
                                     ended     ended      ended
                                    31 Aug    31 Aug     28 Feb
                                      2013      2012       2013
                                     R'000     R'000      R’000
Profit/(loss) per share
Basic
Continuing operations                  4,0       2,0        7,0
Discontinued operations               (0,1)     (1,7)      (1,8)
Total                                  3,9       0,3        5,2
Diluted profit/(loss)
Continuing operations                  4,0       2,0        7,0
Discontinued operations               (0,1)     (1,7)      (1,8)
Total                                  3,9       0,3        5,2
Headline profit/(loss)
Continuing operations                  3,9       1,9        2,0
Discontinued operations               (0,1)     (0,6)      (0,7)
Total                                  3,8       1,3        1,3
Diluted headline profit/(loss)
Continuing operations                  3,9       1,9        2,0
Discontinued operations               (0,1)     (0,6)      (0,7)
Total                                  3,8       1,3        1,3
                                 Unaudited Unaudited   Reviewed
                                  6 months  6 months       year
                                     ended     ended      ended
                                    31 Aug    31 Aug     28 Feb
                                      2013      2012       2013
                                     R'000     R'000      R’000
Reconciliation of headline profit:
Profit attributable to ordinary 
 Shareholders                       24 082     2 068     32 929
Adjusted for impairment of assets        -    (5 184)   (36 213)
Adjusted for (profit)/loss on 
 disposal of non-current assets       (480)   11 600     11 419
Headline profit attributable to 
 ordinary shareholders of 
 the Company                        23 602     8 484      8 135
Weighted average shares in issue 
 on which earnings are 
 based ('000)                      629 342   629 342    629 342
Treasury shares issued to the 
 Brikor Share Incentive 
 Scheme ('000)                           -    15 900          -
Fully diluted weighted average 
 shares in issue ('000)            629 342   645 242    629 342
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                 Unaudited Unaudited   Reviewed
                                    31 Aug    31 Aug     28 Feb
                                      2013      2012       2013
                                     R'000     R'000      R'000
ASSETS
Non-current assets                 174 521   132 371    164 825
Property, plant and equipment      116 948    95 185    110 034
Investment property                 14 342         -     14 342
Intangible assets                   14 791     8 350     15 169
Other financial assets              28 440    28 836     25 280
Current assets                     122 228    79 406     90 220
Inventories                         48 607    41 016     47 195
Trade and other receivables         55 313    33 032     33 157
Cash and cash equivalents           18 308     5 358      9 868
Non-current assets held for sale         -    34 580     14 959
Total assets                       296 749   246 357    270 004
EQUITY AND LIABILITIES
Equity attributable to equity 
 holders of the Company             57 307     2 364     33 225
Share capital                           63        63         63
Share premium                      228 179   228 179    228 179
Accumulated loss                  (170 935) (225 878)  (195 017)
Non-current liabilities             62 537    48 204     52 222
Borrowings                           8 045     9 838      5 037
Shareholder loans                   31 408    30 311     29 430
Provisions                          18 889     8 055     17 010
Deferred taxation                    4 195         -        745
Current liabilities                176 905   195 789    184 557
Borrowings                          94 423   114 474    102 794
Trade and other payables            64 883    42 680     49 008
Taxation                            11 303    14 923     11 528
Bank overdraft                       6 296    23 712     21 227
Total equity and liabilities       296 749   246 357    270 004
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                 Unaudited Unaudited   Reviewed
                                  6 months  6 months       year
                                     ended     ended      ended
                                    31 Aug    31 Aug     28 Feb
                                      2013      2012       2013
                                     R'000     R'000      R'000
Cash flows from operating
 activities                         26 539     5 242     15 034
Cash flows from investing 
 Activities                            270        16     14 580
Cash flows (to)/from financing 
 activities                         (3 438)    3 021    (14 340)
Net increase in cash and cash 
 equivalents                        23 371     8 279     15 274
Cash and cash equivalents at 
 the beginning of the period       (11 359)  (26 633)   (26 633)
Cash and cash equivalents at 
 the end of the period              12 012   (18 354)   (11 359)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                 Unaudited Unaudited   Reviewed
                                  6 months  6 months       year
                                     ended     ended      ended
                                    31 Aug    31 Aug     28 Feb
                                      2013      2012       2013
                                     R'000     R'000      R'000
Balance at beginning of period      33 225       296        296
Total comprehensive profit for 
 the period                         24 082     2 068     32 929
Balance at end of period            57 307     2 364     33 225
SEGMENT ANALYSIS
There are three reportable segments offering different products 
which are managed separately as they require different technology 
and marketing strategies, which are: 
-  Coal - the mining and sales of coal through Brikor’s 
subsidiary;
-  Bricks - the manufacturing and sales of bricks; and
-  Aggregates - the quarrying and sales of aggregates.
For each of these segments, the Group’s CEO (the chief operating 
decision-maker) reviews internal management reports on at least a 
quarterly basis.
The following is an analysis of the Group’s revenue and results 
from operations by reportable segments:
                          Coal     Bricks Aggregates      Total
                         R’000      R’000      R’000      R’000
UNAUDITED 
6 MONTHS ENDED 
31 Aug 2013
Revenue from 
 external customers     45 027     89 056     21 309    155 392
Operating profit 
 before impairments     18 364     16 473      1 790     36 627
Reversal of impairments      -          -          -          -
Operating profit 
 before interest 
 and taxation           18 364     16 473      1 790     36 627
Segment assets and 
 liabilities
Segment assets          60 923    161 283     74 543    296 749
Segment current 
 Liabilities           (22 655)   (53 526)    (6 301)   (82 482)
Other segment 
 information
Depreciation and 
 amortisation included 
 in cost of sales and 
 operating expenses     (1 177)    (1 971)    (1 440)    (4 588)
Additions to non-current 
 assets                  5 188      5 493        811     11 492
UNAUDITED 
6 MONTHS ENDED 
31 Aug 2012
Revenue from 
 external customers          -     82 815     21 837    104 652
Operating profit before 
 impairment reversals        -     19 603      3 413     23 016
Impairment reversals         -      1 014        255      1 269
Operating profit  before 
 interest and taxation       -     20 617      3 668     24 285
Segment assets and 
 liabilities
Segment assets               -    167 354     44 423    211 777
Segment current liabilities  -    (73 400)    (7 915)   (81 315)
Other segment information
Depreciation and 
 amortisation included 
 in cost of sales and 
 operating expenses          -     (2 653)      (570)    (3 223)
Additions to non-current 
 Assets                      -     14 652      2 204     16 856
REVIEWED 
YEAR ENDED 
28 Feb 2013
Revenue from external 
 Customers              60 483    114 720     48 552    223 755
Operating profit 
 before impairment 
 reversals              17 411      6 078     10 970     34 459
Impairments reversals        -      1 014     31 285     32 299
Operating profit 
 before interest 
 and taxation           17 411      7 092     42 255     66 758
Segment assets and 
 liabilities
Segment assets          29 167    143 563     82 315    255 045
Segment current 
 liabilities            (6 071)   (66 645)    (9 047)   (81 763)
Other segment 
 information
Depreciation and 
 amortisation included 
 in cost of sales and 
 operating expenses     (1 317)    (4 453)    (1 266)    (7 036)
Additions to non-current 
 assets                 13 715      9 356      2 579     25 650
                                Unaudited  Unaudited   Reviewed
                                   31 Aug     31 Aug     28 Feb
                                     2013       2012       2013
                                    R'000      R'000      R'000
Reconciliation of assets
Total assets for reportable 
 segments                         296 749    211 777    255 045
Non-current assets held for sale        -     34 580     14 959
                                  296 749    246 357    270 004
Reconciliation of liabilities
Corporate liabilities             (94 423)  (114 474)  (102 794)
Total liabilities for 
 reportable segments              (82 482)   (81 315)   (81 763)
Other liabilities                 (62 537)   (48 204)   (52 222)
                                 (239 442)  (243 993)  (236 779)
NOTES TO THE CONDENSED FINANCIAL RESULTS
1.  BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed consolidated interim financial results for the six 
months ended 31 August 2013 have been prepared in accordance with 
the recognition and measurement requirements of International 
Financial Reporting Standards (IFRS) and the presentation and 
disclosure requirements of IAS 34 Interim Financial Reporting, 
the Listings Requirements of the JSE Limited, the SAICA Financial 
Reporting Guides as issued by the Accounting Practices Committee 
and Financial Reporting Pronouncements as issued by the Financial 
Reporting Standards Council, and the Companies Act. 
The accounting policies applied are consistent with those applied 
for the year ended 28 February 2013 and are in terms of IFRS as 
issued by the International Accounting Standards Board. New 
standards and interpretations that became effective on 1 March 
2013 had no material effect on the results for the period.  
The condensed consolidated interim financial results have been 
prepared on the historic cost convention, except for certain 
financial instruments, which are stated at fair value and are 
presented in Rand rounded to the nearest thousand (R'000).
2.  RELATED PARTIES
Ultimate controlling party
The Group’s ultimate controlling party is G v N Parkin.
Related party transactions 
Transaction value for the period ended      Balance outstanding
                 31 Aug  31 Aug  28 Feb  31 Aug  31 Aug  28 Feb
                   2013    2012    2013    2013    2012    2013
                  R’000   R’000   R’000   R’000   R’000   R’000
Sales to related 
 parties
Cyndara 113 
 (Pty)Ltd            89      74   1 636      69     130      69
Vecto Trade 
 (Pty) Ltd            -       -       -     164     218     218
Scarlet Sun 33 
 (Pty) Ltd           87       -     252      12      22     203
Purchases from 
 related parties
Cyndara 113 
 (Pty)Ltd           853     340   2 552     447     (10)    159
Leomega (Pty) Ltd             -       -      12      12     918
Scarlet Sun 33 
 (Pty) Ltd            -      34   1 715               -       -
Interest paid to 
 related parties
GvN Parkin        1 960   1 159   2 486  31 408  30 311  29 430
Interest received from 
 related parties 
Huntrex (Pty) Ltd   804     965   1 835  16 452  19 246  17 884
The above transactions occurred at arm’s length on market-related 
terms.
3.  SALIENT FEATURES
                               Unaudited   Unaudited   Reviewed
                                   31 Aug     31 Aug     28 Feb
                                     2013       2012       2013
Number of shares in issue 
 (excluding treasury 
 shares)(‘000)                    629 342    629 342    629 342
Net asset value per share (cents)     9,1        0,4        5,3 
Net tangible asset value per 
 share (cents)                        6,8       (0,9)       2,9 
Significant items in profit 
 before taxation(‘000)
-  Impairment reversals                 -      1 269     32 299 
-  Directors’ emoluments            1 884      1 411      3 577 
-  Employee cost                   24 484     22 539     50 492 
Net asset value per share is determined by dividing the total 
equity by the actual number of shares in issue at the reporting 
date.
Net tangible asset value per share is determined by dividing the 
total equity less intangible assets by the actual number of 
shares in issue at the reporting date.
4.  SUBSEQUENT EVENTS AND GOING CONCERN
The directors have prepared their budgets and cash flow forecast 
for the 2014 financial year based on reasonable and supportable 
assumptions. 
The cash flow forecast indicates that Brikor will have sufficient 
cash to enable Brikor to settle its liabilities (excluding the 
financing under dispute, which is discussed further below) in the 
ordinary course of business. During the first half of the 2014 
financial year, Brikor has improved the growth that is reflected 
for the 2013 financial year and the 2014 cash flow forecast. 
However, due to a historical breach of financial covenants, 
Brikor’s loan facilities of R93,8 million (2012: R112,6 million) 
were reclassified as a current liability from 2011, in accordance 
with the requirements of IAS 1: Presentation of Financial 
Statements. As a result of this reclassification, the Company’s 
current liabilities are reflecting as exceeding its current 
assets on the condensed consolidated statement of financial 
position at 31 August 2013 by R54,7 million (31 August 2012: 
R116,4 million). 
LEGAL DISPUTE WITH FINANCIER
The Company announced on SENS on 22 February 2013 that Brikor was 
in breach of the financing covenants of its financier. This SENS 
announcement was renewed on 10 April 2013, 24 May 2013 and 2 July 
2013 until it was withdrawn on 13 September 2013. On 31 July 2013 
it was announced that Brikor’s shares had been suspended as it 
has been placed into provisional liquidation whilst the outcome 
remained pending, a further announcement was released on SENS on 
10 October 2013 that the setting of the court date will be given 
by the court on 22 November 2013. The date was set for the 16 May 
2014 as announced on SENS on 25 November 2013.
DATE OF PUBLICATION OF THIS REPORT 
2 December 2013
G v N Parkin                                  H Botha
Chief Executive Officer                       Financial Director
Durban
2 December 2013
CORPORATE INFORMATION
Non-executive directors: Dr BS Ngubane; CB Madolo
Executive directors: G v N Parkin (CEO); H Botha (FD); G Parkin 
(Jnr) (Alternate director to the CEO)
Registered address: Maharaj Attorneys, 3 Rydall Vale Crescent, La 
Lucia Office Park, Durban
Postal address: PO Box 884, Nigel 1490
Telephone: (011) 739 9000
Facsimile: (011) 739 9021
Company secretary: CIS Company Secretaries (Pty) Ltd
Transfer secretaries: Computershare Investor Services (Pty) Ltd
Auditors: KPMG Inc. 
Designated Adviser: Exchange Sponsors (2008) (Pty) Ltd
These results and an overview of Brikor are available at 
www.brikor.co.za


Date: 02/12/2013 11:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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