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Audited annual results and dividend declaration - June 2014
Cashbuild Limited
(Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE Code: CSB ISIN: ZAE000028320
AUDITED ANNUAL RESULTS AND DIVIDEND DECLARATION – JUNE 2014
Revenue up 6% Operating profit up 11% Headline earnings up 12%
Net asset value per share up 11% Total dividend up 8%
SUMMARY CONSOLIDATED INCOME STATEMENT – AUDITED
R'000 Year ended Year ended
30 June 30 June
2014 2013 %
(52 weeks) (52 weeks) change
Revenue 6 781 274 6 376 945 6
Cost of sales (5 175 906) (4 921 664) 5
Gross profit 1 605 368 1 455 281 10
Selling and marketing expenses (1 051 550) (966 965) 9
Administrative expenses (200 734) (163 700) 23
Other operating expenses (3 713) (4 154) (11)
Other income 8 195 2 078 >100
Operating profit 357 566 322 540 11
Finance costs (1 004) (1 225) (18)
Finance income 23 927 30 718 (22)
Profit before income tax 380 489 352 033 8
Income tax expense (111 036) (103 482) 7
Profit for the year 269 453 248 551 8
Attributable to:
Owners of the Company 265 915 245 490 8
Non-controlling interests 3 538 3 061 16
269 453 248 551 8
Earnings per share (cents) 1 147.6 1 063.2 8
Diluted earnings per share (cents) 1 136.6 1 038.3 9
SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME – AUDITED
Year ended Year ended
30 June 2014 30 June 2013
R'000 (52 weeks) (52 weeks)
Profit for the year 269 453 248 551
Other comprehensive income:
Total movement in foreign currency translation
reserve (FCTR) 3 711 4 240
Attributable to:
Owners of the Company 4 253 4 506
Non-controlling interests (542) (266)
Total comprehensive income for the year 273 164 252 791
Total comprehensive income attributable to:
Owners of the Company 270 168 249 996
Non-controlling interests 2 996 2 795
273 164 252 791
ADDITIONAL INFORMATION - AUDITED
R’000 Year ended Year ended
30 June 2014 30 June 2013
Net asset value per share (cents) 4 858 4 379
Ordinary shares (‘000s):
- In issue 25 190 25 190
- Weighted-average 23 171 23 091
- Diluted weighted-average 23 395 23 643
Capital investment 269 555 198 042
Depreciation of property, plant and equipment 87 351 75 008
Amortisation of intangible assets 13 237 6 773
Capital commitments 163 787 164 995
Property operating lease commitments 1 130 661 953 363
Contingent liabilities 1 411 6 307
SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION - AUDITED
R’000 30 June 2014 30 June 2013
ASSETS
Non-current assets 873 144 692 725
Property, plant and equipment 794 174 618 597
Intangible assets 42 019 50 333
Rent prepayments 36 530 20 557
Deferred income tax assets 421 3 238
Current assets 1 743 011 1 376 275
Assets held for sale 12 393 15 645
Inventories 933 035 986 709
Trade and other receivables 93 261 115 196
Financial assets at fair value - 125 628
Cash and cash equivalents 704 322 123 818
Current income tax assets - 9 279
Total assets 2 616 155 2 069 000
EQUITY AND LIABILITIES
Shareholders’ equity 1 239 118 1 116 436
Share capital and reserves 1 223 723 1 102 976
Non-controlling interests 15 395 13 460
Non-current liabilities 100 217 96 099
Deferred operating lease liability 100 217 92 016
Deferred profit - 1 595
Borrowings - 2 488
Current liabilities 1 276 820 856 465
Trade and other liabilities 1 243 406 853 929
Current income tax liabilities 28 813 -
Employee benefits 4 601 2 536
Total equity and liabilities 2 616 155 2 069 000
SUMMARY CONSOLIDATED CASH FLOW STATEMENT - AUDITED
R'000 Year ended Year ended
30 June 2014 30 June 2013
Cash flows from operating activities
Cash generated from operations 929 670 156 378
Interest paid (1 004) (1 225)
Taxation paid (70 127) (113 610)
Net cash generated from operating activities 858 539 41 543
Cash flows from investing activities
Net investment in assets (261 968) (179 743)
Decrease/(increase) in financial assets 125 628 (125 628)
Interest received 23 927 30 718
Net cash used in investing activities (112 413) (274 653)
Cash flows from financing activities
(Decrease)/increase in other borrowings (250) 16
Shares purchased by The Cashbuild Operations
Management Member Trust - (2 546)
Shares purchased by The Cashbuild Share
Incentive Trust (77 349) -
Shares sold by The Cashbuild Share
Incentive Trust 21 763 1 842
Dividends paid
- own equity (107 763) (131 762)
- non-controlling interests (1 061) (1 180)
Acquisition of/increase in shareholding in subsidiary (2 238) (60)
Net cash used in financing activities (166 898) (133 690)
Net increase/(decrease) in cash and cash equivalents 579 228 (366 800)
Effect of exchange rate movements on cash and
cash equivalents 1 276 2 672
Cash and cash equivalents at beginning of year 123 818 487 946
Cash and cash equivalents at end of year 704 322 123 818
SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY – AUDITED
R’000 Attributable to owners of the Company
Share
Treasury based Non-con-
Share share Treasury pay- trolling
capi- capi- Share share ment Retained inte- Total
tal tal premium premium reserves FCTR earnings rests equity
Balance at 1 July 2012
252 (20) 65 823 (28 332) 12 618 (14 842) 941 175 11 408 988 082
Total comprehensive income for the year
- - - - - 4 506 245 490 2 795 252 791
Dividends paid
- - - - - - (131 762) (1 180) (132 942)
Increase in shareholding of subsidiary
- - - - - - (497) 437 (60)
Shares sold by The Cashbuild Share Incentive Trust
- 1 - 766 - - 1 075 - 1 842
Shares purchased by The Cashbuild Operations Management Member Trust
- (1) - (2 545) - - - - (2 546)
Recognition of share based payments
- - - - 9 269 - - - 9 269
Closing balance at 30 June 2013
252 (20) 65 823 (30 111) 21 887 (10 336)1 055 481 13 460 1 116 436
Total comprehensive income for the year
- - - - - 4 253 265 915 2 996 273 164
Dividends paid
- - - - - - (107 763) (1 061) (108 824)
Shares sold by The Cashbuild Share Incentive Trust
- 3 - 21 760 - - - - 21 763
Shares purchased by The Cashbuild Share Incentive Trust
- (6) - (77 343) - - - - (77 349)
Recognition of share based payments
- - - - 13 928 - - - 13 928
Closing balance at 30 June 2014
252 (23) 65 823 (85 694) 35 815 (6 083)1 213 633 15 395 1 239 118
SUMMARY CONSOLIDATED SEGMENTAL ANALYSIS - AUDITED
R'000 Year ended Year ended
30 June 2014 30 June 2013
South Africa
Income statement
Revenue 5 889 869 5 583 424
Operating profit 311 405 277 733
Statement of financial position
Segment assets 2 072 733 1 626 670
Segment liabilities 1 155 662 786 355
Other segment items
Depreciation 78 209 67 159
Amortisation 13 237 6 773
Capital investment 247 785 179 506
Other members of common monetary area*
Income statement
Revenue 568 700 505 499
Operating profit 34 718 31 610
Statement of financial position
Segment assets 354 062 299 468
Segment liabilities 151 474 121 066
Other segment items
Depreciation 5 251 4 688
Amortisation - -
Capital investment 9 107 13 259
*Includes Namibia, Swaziland and Lesotho
Botswana and Malawi
Income statement
Revenue 322 705 288 022
Operating profit 11 443 13 197
Statement of financial position
Segment assets 189 360 142 862
Segment liabilities 69 901 45 143
Other segment items
Depreciation 3 891 3 161
Amortisation - -
Capital investment 12 663 5 277
Group
Income statement
Revenue 6 781 274 6 376 945
Operating profit 357 566 322 540
Statement of financial position
Segment assets 2 616 155 2 069 000
Segment liabilities 1 377 037 952 564
Other segment items
Depreciation 87 351 75 008
Amortisation 13 237 6 773
Capital investment 269 555 198 042
NOTES TO THE SUMMARY CONSOLIDATED ANNUAL FINANCIAL INFORMATION
1.Basis of preparation. The summary consolidated financial statements are prepared in accordance with the requirements of International Financial Reporting Standards, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and the requirements of the Companies Act of South Africa 2008 applicable to summary annual financial statements. The accounting policies applied in the preparation of the consolidated annual financial statements from which the summary consolidated annual financial statements were derived are in terms of International Financial Reporting Standards and are consistent with those accounting policies applied in the preparation of the previous consolidated annual financial statements. The annual financial statements were prepared under the supervision of the Finance Director, Mr AE Prowse CA(SA) and approved by the Board on 1 September 2014.
2.Independent audit by the auditor. These summary consolidated annual financial statements for the year ended 30 June 2014 have been audited by PricewaterhouseCoopers Inc., who expressed an unmodified opinion thereon. The auditor also expressed an unmodified opinion on the consolidated annual financial statements from which these summary consolidated annual financial statements were derived. A copy of their unmodified audit report is available for inspection at the registered office of the Company.
3.Reporting period. The Group adopts the retail accounting calendar, which comprises the reporting period ending on the last Sunday of the month (2014: 29 June (52 weeks); 2013: 30 June (52 weeks)).
4.Earnings per share. Earnings per share is calculated by dividing the earnings attributable to owners of the Company for the year by the weighted average number of 23 171 020 ordinary shares in issue during the year (June 2013: 23 090 567 shares).
5.Headline earnings per ordinary share. The calculations of headline earnings and diluted headline earnings per ordinary share are based on headline earnings of R265.2 million (June 2013: R237.4 million) and a weighted average of 23 171 020 (June 2013: 23 090 567) and fully diluted of 23 394 727 (June 2013: 23 643 228) ordinary shares in issue.
Reconciliation between net profit attributable to the equity holders of the Company and headline earnings:
R’000 June 2014 June 2013 % change
Net profit attributable to the owners
of the Company 265 915 245 490 8
Profit on sale of assets after taxation (692) (8 046)
Headline earnings 265 223 237 444 12
Headline earnings per share (cents) 1 144.6 1 028.3 11
Diluted headline earnings per share (cents) 1 133.7 1 004.3 13
6.Declaration of dividend. The Board has declared a final dividend (No. 43), of 253 cents (June 2013: 191 cents) per ordinary share out of income reserves to all shareholders of Cashbuild Limited. The dividend per share is calculated based on 25 189 811 (June 2013: 25 189 811) shares in issue at date of dividend declaration. Net local dividend amount is 215.05 cents per share for shareholders liable to pay Dividends Tax and 253 cents per share for shareholders exempt from paying Dividends Tax. The total dividend for the year amounts to 528 cents (June 2013: 487 cents) an 8% increase on the prior year. Local dividend tax is 15% and there are no STC credits available for use. Cashbuild Limited’s tax reference number is 9575168712.
Date dividend declared: Monday, 1 September 2014
Last day to trade “CUM” the dividend: Thursday, 18 September 2014
Date commence trading “EX” the dividend: Friday, 19 September 2014
Record date: Friday, 26 September 2014
Date of payment: Monday, 29 September 2014
Share certificates may not be dematerialised or rematerialised between Friday, 19 September 2014 and Friday, 26 September 2014, both dates inclusive.
On behalf of the Board
DONALD MASSON WERNER DE JAGER
Chairman Chief Executive
Johannesburg
1 September 2014
COMMENTARY
NATURE OF BUSINESS
Cashbuild is southern Africa’s largest retailer of quality building materials and associated products, selling direct to a cash-paying customer-base through our constantly expanding chain of stores (215 at the end of this financial year). Cashbuild carries an in-depth quality product range tailored to the specific needs of the communities we serve. Our customers are typically home-builders and improvers, contractors, farmers, traders, large construction companies and government-related infrastructure developers, as well as all other customers requiring quality building materials at lowest prices.
Cashbuild has built its credibility and reputation by consistently offering its customers quality building materials at the lowest prices and through a purchasing and inventory policy that ensures customers’ requirements are always met.
INTERNATIONAL FINANCIAL REPORTING STANDARDS
The Group is reporting its audited results in accordance with International Financial Reporting Standards (“IFRS”).
FINANCIAL HIGHLIGHTS
Revenue for the year increased by 6% and gross profit increased by a pleasing 10%. Operating expenses increased by 10%. Basic earnings per share increased by 8% and headline earnings per share increased by 11%. Net asset value per share has shown an 11% increase, from 4 379 cents (June 2013) to 4 858 cents. Cash and cash equivalents increased to R704 million (June 2013: R124 million) mainly due to a reduction in stock levels and payments to suppliers being effected after the year-end close.
Stores in existence prior to the beginning of July 2012 (pre-existing stores – 191 stores) increased by 1% in revenue and the 24 new stores contributed 5% of the increase. This increase for the year has been achieved in tough trading conditions with selling price inflation of 5%.
Due to continued focus on margins within the competitive environment, gross profit percentage margin increased to 23.7% from the 22.8% of the prior year.
Operational expenses for the year remained well controlled with existing stores accounting for 5% of the increase and new stores 5%. The total increase for the year amounted to 10%. The main contributor to the increase on existing stores is the people cost component in order to maintain and improve customer service standards.
The effective tax rate for the year of 29% has remained consistent with the prior year.
Cashbuild’s statement of financial position remains solid. Stock levels have decreased by 5% notwithstanding the increase in the number of stores. Overall stockholding at 75 days (June 2013: 83 days). Trade receivables remain well under control.
During the year, Cashbuild opened 15 new stores, 20 stores were refurbished and seven stores were relocated. Six Cashbuild DIY pilot stores (not included in the 215 stores number), were opened and trading at the end of the financial year. Cashbuild will continue its store expansion, relocation and refurbishment strategy in a controlled manner, applying the same rigorous process as in the past.
PROSPECTS
Management remain positive about the top line trading prospects for the next quarter. The first six trading weeks since year-end have reported an increase in revenue of 10% on that of the comparable six weeks. This information has not been reviewed nor audited by the Company’s auditor.
Directors: D Masson* (Chairman), WF de Jager (Chief Executive), IS Fourie*, HH Hickey*, AGW Knock*, Dr DSS Lushaba*, AE Prowse, NV Simamane*, SA Thoresson, A van Onselen (*non-executive)
Company secretary: Corporate Governance Leaders CC
Registered office: 101 Northern Parkway, Ormonde, Johannesburg 2091.
PO Box 90115, Bertsham 2013
Transfer secretaries: Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg 2001. PO Box 61051, Marshalltown 2107
Auditor: PricewaterhouseCoopers Inc.
Sponsor: Nedbank Capital
Cashbuild Limited (Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE code: CSB
ISIN: ZAE000028320
QUALITY BUILDING MATERIALS AT THE LOWEST PRICES
www.cashbuild.co.za
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