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Condensed audited consolidated results for the year ended 31 December 2013
KAYDAV GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 2006/038698/06
JSE share code: KDV * ISIN: ZAE000108940
("KayDav" or "the Group" or "the company")
CONDENSED AUDITED CONSOLIDATED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2013
- Revenue R666.2 million (up 21%)
- Headline earnings per share 13.7 cents (up 18%)
- Distribution per share 7.5 cents (up 7%)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
year ended year ended
31 December 31 December
2013 2012
R R
Revenue 666 218 405 550 919 804
Cost of sales (468 870 730) (381 974 757)
Gross profit 197 347 675 168 945 047
Other income 507 320 1 365 064
Operating expenses (161 313 907) (139 476 746)
Operating profit 36 541 088 30 833 365
Investment income 166 891 178 733
Finance costs (3 557 933) (2 540 847)
Profit before taxation 33 150 046 28 471 251
Taxation (9 439 202) (8 120 717)
Profit for the year 23 710 844 20 350 534
Other comprehensive income - -
Total comprehensive income attributable to
equity holders of the parent 23 710 844 20 350 534
Reconciliation between earnings and headline earnings
Earnings 23 710 844 20 350 534
Loss/(profit) on sale of plant and equipment 27 058 (523 302)
Taxation on loss/(profit) on sale of plant and equipment (7 576) 146 525
Impairment of plant and equipment - -
Taxation on impairment of plant and equipment - -
Headline earnings 23 730 326 19 973 757
Weighted average number of shares in issue 172 751 585 172 751 585
Basic and diluted earnings per share (cents) 13.7 11.8
Headline earnings per share (cents) 13.7 11.6
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
year ended year ended
31 December 31 December
2013 2012
R R
ASSETS
Non-current assets 73 245 308 68 695 759
Property, plant and equipment 57 005 752 52 619 029
Goodwill 14 302 804 14 302 804
Deferred taxation 1 936 752 1 773 926
Current assets 184 990 190 165 011 970
Inventories 87 957 081 71 733 983
Trade and other receivables 76 305 832 71 365 557
Cash and cash equivalents 20 710 093 20 841 337
Taxation 17 184 1 071 093
Total assets 258 235 498 233 707 729
EQUITY AND LIABILITIES
Capital and reserves 140 751 333 129 133 100
Share capital 173 173
Share premium 157 710 689 169 803 300
Accumulated loss (16 959 529) (40 670 373)
Non-current liabilities 26 118 763 30 194 513
Instalment sale liabilities 12 288 476 9 926 850
Interest-bearing liabilities 13 830 287 19 955 251
Deferred taxation - 312 412
Current liabilities 91 365 402 74 380 116
Trade and other payables 40 701 296 48 983 495
Short-term portion of instalment sale liabilities 5 708 338 4 547 748
Short-term portion of interest-bearing liabilities 6 124 965 5 538 192
Bank overdraft 34 834 452 12 644 240
Taxation 890 319 -
Provisions 3 106 032 2 666 441
Total equity and liabilities 258 235 498 233 707 729
Shares in issue at year-end 172 751 585 172 751 585
Net asset value per share (cents) 81.5 74.8
Net tangible asset value per share (cents) 73.2 66.5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
year ended year ended
31 December 31 December
2013 2012
R R
Balance at the beginning of the year 129 133 100 119 147 678
Total comprehensive income for the year 23 710 844 20 350 534
Share repurchases - -
Distribution to shareholders (12 092 611) (10 365 112)
Total equity 140 751 333 129 133 100
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
year ended year ended
31 December 31 December
2013 2012
R R
Net cash flows from operating activities 2 410 780 28 191 996
Net cash flows from investing activities (1 129 274) (7 935 217)
Net cash flows from financing activities (23 602 962) (8 740 313)
Net(decrease)/increase in cash and cash equivalents (22 321 456) 11 516 466
Net cash and cash equivalents at the beginning
of the year 8 197 097 (3 319 369)
Net cash and cash equivalents at the end of the year (14 124 359) 8 197 097
SEGMENTAL ANALYSIS
Audited Audited
year ended year ended
31 December 31 December
2013 2012
R R
Segmental revenue
Board distribution 648 861 028 532 957 540
Manufacturing 41 713 661 46 495 481
Internal revenue (24 356 284) (28 533 217)
Total revenue 666 218 405 550 919 804
Internal revenue relates to sales from the manufacturing
segment to the board distribution segment.
Segmental results
Board distribution 37 932 997 29 806 990
Manufacturing (1 391 909) 1 026 375
Operating profit before interest 36 541 088 30 833 365
COMMENTARY
INTRODUCTION
KayDav specialises in the adding of value to and distribution of wood-based panels,
which are manufactured through the compression of wood waste into a solid panel.
Wood-based panels are used for a variety of purposes in the construction, furniture
manufacturing and shop fitting industries.
FINANCIAL RESULTS
We are pleased to report a satisfactory set of results for the year ended
31 December 2013.
Revenue for the year ended 31 December 2013 increased by 20.9% from R550.9 million for
the year ended 31 December 2012 to R666.2 million. When sales for the Durban branch,
which commenced trading on 1 October 2012, are excluded sales growth for the
2013 financial year amounted to 15.8%.
While continued pressure on gross profit margins led to nominal gross profit growing
by only 16.8%, 4.1 percentage points lower than the sales growth number, to
R197.3 million (2012: R168.9 million), operating expenses increased by only 15.7%
from R139.5 million to R161.3 million, 5.2 percentage points below sales growth,
resulting in the operating profit margin of 5.5% (2012: 5.6%) remaining fairly
consistent.
Profit for the year increased by 16.5% to R23.7 million (2012: R20.4 million) for
the year ended 31 December 2013 while headline earnings per share grew by 18.1%
from 11.6 cents for the year ended 31 December 2012 to 13.7 cents for the year ended
31 December 2013.
The net tangible asset base of the Group of R126.4 million at 31 December 2013
(2012: R114.8 million) continues to provide a sound platform for growth. Interest-
bearing debt, excluding bank overdraft as a percentage of capital and reserves
decreased from 31% at 31 December 2012 to 27% at 31 December 2013. The net bank
overdraft of R14.1 million at 31 December 2013 is after an early payment of
R15.0 million to a creditor at the year end in return for additional settlement
discount.
CAPITAL COMMITMENTS
At 31 December 2013 KayDav was committed to acquire a warehouse for R3.0 million to
enhance the expansion of its operation in Brackenfell, Western Cape. The acquisition
will be financed by a combination of a mortgage bond loan and internal funds. The Group
was further committed to acquire two delivery vehicles at a total cost of R1.3 million
to be financed by instalment sale liabilities.
PROSPECTS
KayDav is hopeful that economic growth will accelerate in the near to medium term and
the Group is well positioned to take advantage of such growth when it occurs. KayDav
remains focused on increasing its market share and profitability while maintaining and
improving working capital efficiency.
CHANGES TO CAPITAL STRUCTURE
There has been no change in KayDav's capital structure during the year ended
31 December 2013 aside from a distribution out of share premium to shareholders of
7 cents per share on 22 April 2013.
DISTRIBUTIONS TO SHAREHOLDERS
Notice is hereby given that the board of directors of KayDav has resolved to make a
capital reduction in lieu of a dividend out of share premium (a reduction of
Contributed Tax Capital as defined in the Income Tax Act, No. 58 of 1962, as amended)
of 7.5 cents per share.
SALIENT DATES
The salient dates in respect of the cash distribution are as follows:
Last day to trade to be eligible to receive the cash distribution Friday, 2 May 2014
Shares trade "ex" the cash distribution Monday, 5 May 2014
Record date for the cash distribution Friday, 9 May 2014
Cash distribution paid to shareholders Monday, 12 May 2014
NOTES
1. Any change to the above dates will, subject to approval of the JSE Ltd, be
communicated to shareholders by notification on SENS.
2. Shares may not be dematerialised or rematerialised between Monday, 5 May 2014 and
Friday, 9 May 2014.
ADDITIONAL INFORMATION
In terms of the JSE Listings Requirements in relation to cash distributions the
following information is disclosed:
1. The issued share capital of KayDav is 172 751 585 ordinary shares; and
2. KayDav's tax reference number is 9154477161.
Given that the cash distribution is by way of a reduction of Contributed Tax Capital,
the information relating to dividends tax is not applicable and has not been disclosed.
SUBSEQUENT EVENTS
No material changes have taken place in the affairs of the Group between the end of
the financial year and the date of this report, which require adjustment or disclosure.
BASIS OF PREPARATION
The condensed audited consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards ("IFRS"), the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee, the
requirements of IAS 34 (Interim Financial Reporting), the JSE Listings Requirements
and the Companies Act, No. 71 of 2008, as amended.
The accounting policies applied in preparing these condensed audited consolidated
financial statements are in terms of IFRS and are consistent with those presented in
the annual financial statements for the year ended 31 December 2012.
The annual financial statements were prepared under the supervision of the CFO,
Martin Slier CA(SA).
DIRECTORATE
There has been no change to the directorate during the year.
AUDIT REPORT
These condensed audited consolidated financial results are extracted from audited
information, but is not itself audited by KayDav's auditors, Grant Thornton
Johannesburg Inc, whose unqualified audit report is available for inspection at
KayDav's registered office. The directors take full responsibility for the preparation
of the condensed audited consolidated financial results and for ensuring that the
information has been correctly extracted from the underlying annual financial statements.
ANNUAL REPORT
Shareholders are advised that the integrated annual report containing the financial
statements will be posted on or before 31 March 2014. KayDav's annual general meeting
will be held at 10:00 on Thursday, 15 May 2014 at 2 Arnold Road, Rosebank, 2196, Gauteng.
APPRECIATION
The board extends its appreciation to our management and staff for their efforts
during this reporting period. We also thank our customers and suppliers for their
continued support.
On behalf of the board
I H Stern G F Davidson
Chairman Chief Executive Officer
26 March 2014
CORPORATE INFORMATION
Executive directors: G F Davidson (CEO), M Slier (CFO)
Independent non-executive directors: I H Stern (Chairman), J Hertz, B Tlhabanelo
Registration number: 2006/038698/06
Registered address: 105 Bamboesvlei Road, Ottery, 7800
Postal address: PO Box 272, Ottery, 7808
Telephone: 021 704 7060 Facsimile: 021 704 2082
Company secretary: Probity Business Services (Pty) Ltd
Transfer secretaries: Link Market Services South Africa (Pty) Ltd
Sponsor: Java Capital
Date: 26/03/2014 11:11:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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