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Summarised audited annual financial statements for the year ended 28 February 2014 and dividend announcement
Cargo Carriers Limited
Registration number: 1959/003254/06
Incorporated in the Republic of South Africa
(“Cargo Carriers”, “the company”)
JSE share code: CRG
ISIN code: ZAE000001764
Summarised audited annual financial statements for the year ended 28 February 2014 and dividend announcement
Consolidated statement of comprehensive income
2014 2013
R000 R000
Turnover 911 375 721 321
Other income 3 707 5 384
Revenue 915 082 726 705
Operating and administration costs (561 502) (441 456)
Employment costs (221 916) (194 943)
Depreciation of property, plant and equipment (73 856) (47 768)
Profit from operating activities 57 808 42 538
Profit on disposal of property, plant and equipment 6 334 1 261
Impairment of assets (10 554) (3 078)
Revaluation of investment properties 8 576 9 234
Dividend income 1 137 915
Profits from associates and joint ventures 3 218 2 491
Profit before finance income and finance cost 66 519 53 361
Finance income 6 472 4 547
Finance cost (23 162) (18 139)
Profit before tax 49 829 39 769
Taxation (3 759) (13 666)
Profit for the year 46 070 26 103
Other comprehensive income:
Items not to be reclassified to profit or loss in subsequent periods:
Revaluation of owner occupied properties 4 333 7 415
Income tax effect (770) (2 076)
Income tax effect of property adjustments (1 774) -
Change in estimated base cost for CGT purposes 2 857 -
Other comprehensive income to be reclassified to profit or loss in
subsequent periods:
Exchange differences on translation of foreign operations 3 601 1 244
Other comprehensive income for the year, net of tax 8 247 6 583
Total comprehensive income for the year, net of tax 54 317 32 686
Total comprehensive income, net of tax attributable to:
Equity holders of the parent 53 729 33 021
Non-controlling interest 588 (335)
Total comprehensive income for the year, net of tax 54 317 32 686
Profit for the year attributable to:
Equity holders of the parent 45 482 26 438
Non-controlling interest 588 (335)
46 070 26 103
Financial information
2014 2013
Dividend per share (cents)
- interim dividend declared during the year 15.0 10.0
- final dividend declared after year end 40.0 20.0
Total dividends 55.0 30.0
Basic and diluted earnings per share (cents) 234.4 136.3
Adjustments (cents):
Profit on disposal of property, plant and equipment (23.5) (4.7)
Impairment of assets 54.4 15.9
Revaluation of investment properties (36.0) (38.7)
Basic and diluted headline earnings per share (cents) 229.3 108.8
Group borrowings
Borrowing capacity of the group (R000) 217 524 194 880
Borrowing capacity utilised (R000) 99 766 181 417
Borrowing capacity utilised (%) 45.9 93.1
Capital commitments (R000) - 21 096
Net asset value per share (cents) 2 166 1 924
Ordinary shares in issue (closing and weighted average) (000) 19 406 19 406
Segmental analysis
2014 2013
R000 R000
Revenue
Industrial 761 630 587 563
Agricultural 113 529 94 480
Aviation 3 242 9 428
Supply chain services 33 212 30 192
Property 3 469 5 042
915 082 726 705
Profit before finance income and finance cost
Industrial 57 985 61 478
Agricultural (9 847) (16 574)
Aviation 3 671 4 775
Supply chain services (2 629) (10 658)
Property 17 339 14 340
66 519 53 361
Consolidated statement of changes in equity Foreign
Asset currency
Share revaluation translation Other
capital reserve* reserve* reserves*
Balance at 1 March 2012 194 47 578 4 952 50
Total comprehensive income - 5 339 1 244 -
- Profit for the year - - - -
- Other comprehensive income - 5 339 1 244 -
Transfer between reserves on disposal of assets - (380) - -
Non-controlling interest arising on a business combination - - - -
Post-tax transfer of revaluation of investment properties - 7 512 - -
Dividends paid - - - -
Balance at 28 February 2013 194 60 049 6 196 50
Total comprehensive income - 4 646 3 601 -
- Profit for the year - - - -
- Other comprehensive income - 4 646 3 601 -
Disposal of assets and transfer between reserves - (20 878) (6 291) -
Exchange differences realised on dissolution of foreign subsidiary - - (2 641) -
Post-tax transfer of revaluation of investment properties - 7 064 - -
Dividends paid - - - -
Balance at 28 February 2014 194 50 881 865 50
* Represents non-distributable reserves
Consolidated statement of changes in equity (continued)
Equity
attributable
to equity Non-
Distributable holders of controlling Total
reserves the parent interest equity
Balance at 1 March 2012 290 780 343 554 1 749 345 303
Total comprehensive income 26 438 33 021 (335) 32 686
- Profit for the year 26 438 26 438 (335) 26 103
- Other comprehensive income - 6 583 - 6 583
Transfer between reserves on disposal of assets 565 185 (185) -
Non-controlling interest arising on a business combination - - 15 264 15 264
Post-tax transfer of revaluation of investment properties (7 512) - - -
Dividends paid (3 494) (3 494) - (3 494)
Balance at 28 February 2013 306 777 373 266 16 493 389 759
Total comprehensive income 45 482 53 729 588 54 317
- Profit for the year 45 482 45 482 588 46 070
- Other comprehensive income - 8 247 - 8 247
Disposal of assets and transfer between reserves 27 169 - - -
Exchange differences realised on dissolution of foreign subsidiary 2 641 - - -
Post-tax transfer of revaluation of investment properties (7 064) - - -
Dividends paid (6 793) (6 793) (2 235) (9 028)
Balance at 28 February 2014 368 212 420 202 14 846 435 048
* Represents non-distributable reserves
Consolidated statement of financial position
2014 2013
R000 R000
Assets
Non-current assets
Property, plant and equipment 487 092 505 718
Investment properties 24 470 25 161
Deferred taxation 18 481 22 529
Investment in associates 22 953 19 869
Investment in joint ventures 4 803 4 726
557 799 578 003
Current assets
Trade and other receivables 150 190 133 951
Inventories 16 989 12 547
Taxation - 2 751
Cash and short-term deposits 116 341 84 780
283 520 234 029
Non-current assets held for sale 11 702 50 938
Total assets 853 021 862 970
Equity and liabilities
Equity
Share capital 194 194
Non-distributable reserves 51 796 66 295
Distributable reserves 368 212 306 777
Equity attributable to equity holders of the parent 420 202 373 266
Non-controlling interest 14 846 16 493
Total equity 435 048 389 759
Non-current liabilities
Deferred taxation 98 954 109 607
Contingent consideration 5 721 5 359
Provisions 2 781 -
Interest-bearing loans and borrowings 107 019 171 837
214 475 286 803
Current liabilities
Trade and other payables 92 309 92 048
Interest-bearing loans and borrowings 109 088 94 360
Taxation 2 101 -
203 498 186 408
Total equity and liabilities 853 021 862 970
Consolidated statement of cash flows
2014 2013
R000 R000
Cash receipts from customers 897 634 702 993
Cash paid to suppliers and employees (792 244) (653 330)
Cash generated by operations 105 390 49 663
Finance income 6 472 4 547
Finance cost (23 162) (18 139)
Dividends paid (9 028) (3 494)
Dividend income 1 137 915
Tax paid (4 085) (882)
Cash inflow from operating activities 76 724 32 610
Cash (outflow)/inflow from financing activities (50 091) 62 791
Cash inflow/(outflow) from investing activities 5 047 (68 713)
Payment of contingent consideration (1 437) -
Decrease/(increase) in loan to associates and
joint ventures 57 (1 400)
Purchase of subsidiary net of cash acquired - (10 172)
Purchase of property, plant and equipment (64 133) (80 618)
Proceeds from sale of property,
plant and equipment 70 560 23 477
Increase in cash and cash equivalents 31 680 26 688
Cash and cash equivalents at the beginning
of the year 84 780 58 152
Foreign exchange movement during the year (119) (60)
Cash and cash equivalents at the end of the year 116 341 84 780
Review
The group has delivered a significant increase in earnings and headline earnings per share, growing by 72.0% and
110.6% respectively. The growth in earnings reflects the positive impact of newly acquired subsidiary, Buks Haulage Limited
(“BHL”), being consolidated for the full year coupled with the lower tax rate of the group. The growth in earnings
permits the group to increase the total dividend payments for the year by 83.3%, with a final dividend of 40.0 cents per share
being declared.
Revenue increased 25.9% to a high of R915.1 million, which materialised primarily as a result of acquisitive growth.
Profit from operating activities increased 35.9%, benefiting substantially from the disposal of the underperforming
Malelane branch and the exit from the tomato harvesting business within the agricultural segment. The industrial segment was
positively influenced by the full year consolidation of BHL and the supply chain services segment had lower debtor
provisions. The disposal of the Alrode property and other non-core and unutilised assets held for sale, and a 29.2% increase
in equity earnings from joint ventures and associates further contributed to the 24.7% increase in profit before
finance income and finance cost.
Net finance costs increased by 22.8% to R16.7 million and was largely impacted by the increased borrowings of BHL.
Finance income improved by 42.3%, primarily due to the investment of the proceeds realised on the disposal of the Alrode
property.
The reduction in the effective group tax rate to 7.5% is due to the adjustment to the most favourable base cost for
CGT purposes of investment properties, which was treated as a change in estimate in the current year. The effect of this
adjustment resulted in the deferred tax provision being reduced by R6 million through profit and loss, consequently
reducing the effective tax rate by 12.1%. Barring the effect of this tax adjustment, would have translated in earnings and
headline earnings per share increasing by 49.3% and 82.2% respectively.
Prospects
The group has built a robust balance sheet which augurs well for successfully pursuing its growth objectives. Organic
and acquisitive growth will remain a key focus in the current year. The agricultural segment should benefit from the
disposal of the Malelane branch and management will continue to focus its efforts within this vertical. The industrial
segment should benefit from fewer labour disruptions and increased national infrastructure spending anticipated in the
current year. Management remains committed and focused to improve the performance and operating results of the business.
Basis of preparation
The consolidated financial statements for the year ended 28 February 2014 have been prepared in accordance with the
recognition and measurement criteria of International Financial Reporting Standards (“IFRS”), IAS 34: Interim Financial
Reporting, the Listings Requirements of the Johannesburg Stock Exchange and the requirements of the Companies Act,
2008 (No. 71 of 2008). The summarised financial statements do not include all the information and disclosures required in
the annual financial statements, and should be read in conjunction with the group’s annual financial statements as at
28 February 2014. The annual financial statements are expected to be available to shareholders towards the end of May 2014.
The annual financial statements were compiled under the supervision of the Chief Financial Officer, Mr S Maharaj (CA)(SA)/HDiptax.
The accounting policies are consistent in all material respects with that of the prior financial period, except for
the following amendments to IFRS: IFRS 7 Disclosures - Offsetting Financial Assets and Financial Liabilities, IFRS 10
Consolidated Financial Statements, IAS 27 Separate Financial Statements, IFRS 11 Joint Arrangements, IAS 28 Investments in
Associates and Joint Ventures, IFRS 12 Disclosure of Interests in Other Entities, IFRS 13 Fair Value Measurement, IAS 1
Presentation of Items of Other Comprehensive Income and IAS 19 Employee Benefits (Revised).
Fair values of financial instruments
The fair value measurement of level 2 financial instruments have been determined in accordance with appropriate
valuation techniques, including recent market transaction and other valuation models. Significant inputs include market yield
curves and exchange rates. There is no difference between the fair value and carrying value of financial assets and
liabilities not presented below due to either the short-term nature of these items, or the fact that they are priced at
variable interest rates.
The following table provides the fair value measurement hierarchy of the group’s assets and liabilities:
Group
Fair value 2014 2013
measurement R000 R000
• Non-current assets
Property, plant and equipment Level 2 487 092 505 718
Investment properties Level 2 24 470 25 161
Non-current assets held for sale Level 2 11 702 50 938
• Non-current liabilities
Contingent consideration Level 3 5 721 5 359
Interest-bearing loans and borrowings Level 2 109 088 94 360
There have been no transfers between Level 2 and Level 3 during the period. The movement in the contingent liability
is mainly a result of fair value adjustments and the payment reflected in the cash-flow.
Independent auditor’s report
The annual financial statements have been audited by Ernst & Young Inc. and their unqualified audit opinion is available
on request from the company secretary or at Cargo Carriers Limited’s registered office. This summarised report is extracted
from the audited information, but is not itself audited. The directors take full responsibility for the preparation of this
report and are satisfied that the financial information has been correctly extracted from the underlying annual financial statements.
Dividend declaration
Notice is hereby given that a gross final cash dividend (Number 46) of 40.0 cents per share (2013: 20.0 cents) has been
declared for the year ended 28 February 2014. The dividend has been declared out of income reserves. The dividend will
be subject to a dividend withholding tax rate of 15% or 6.0 cents per ordinary share. As no STC credits are available for
utilisation, shareholders, unless exempt or qualifying for a reduced withholding tax rate, will receive a net dividend
of 34.0 cents per share.
Cargo Carriers tax reference number is 9900156713 and the number of ordinary shares in issue at the declaration date
is 20 000 000.
The salient dates for the dividend will be as follows:
Last date to trade ‘cum’ dividend Friday, 6 June 2014
Shares commence trading ‘ex’ the dividend Monday, 9 June 2014
Record date (date shareholders recorded in share register) Friday, 13 June 2014
Payment date Tuesday, 17 June 2014
Share certificates may not be dematerialised or rematerialised between Monday, 9 June 2014 and Friday, 13 June 2014
both dates inclusive.
Changes to the board
With effect from 31 October 2013, Mr Stan Chilvers resigned as Chairman and Independent non-executive director Mrs
Sizakele Mzimela was appointed as Chairperson. Mrs Mzimela has been a member of the board since 2008 and her knowledge of
the company and leadership skills position her well to take over the reins from Mr Chilvers. The board welcomes Mrs Mzimela
to her new role. In addition, effective the same date Mr Garth Bolton stepped down as joint CEO, but continues to serve as
an executive director.
By order of the board
Arcay Client Support (Pty) Limited
Company secretary
20 May 2014
Board of directors
SP Mzimela* (Chairperson), AE Franklin*, BB Fraser#, MJ Vuso*, GD Bolton (Executive), MJ Bolton (CEO), S Maharaj (CFO)
# non-executive director
* independent non-executive director
Registered office
11A Grace Road, Mountainview, Observatory, Johannesburg, 2198
Sponsor
Arcay Moela Sponsors (Pty) Limited
Transfer secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
www.cargocarriers.co.za
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