Sectors Shares

Elb Group Limited - Reviewed Group Condensed Provisional Report And Final Cash Dividend Declaration For The Year Ended 30 June 2014

Release Date: 19/09/2014 13:51
Code(s): ELR
 
Wrap Text
Reviewed group condensed provisional report and final cash dividend declaration for the year ended 30 June 2014

ELB GROUP LIMITED 
('ELB', 'the Company' or 'the Group')
Incorporated in the Republic of South Africa
Registration number 1930/002553/06
Share code: ELR     ISIN: ZAE000035101

REVIEWED GROUP CONDENSED PROVISIONAL REPORT and final cash dividend declaration
for the year ended 30 June 2014

HIGHLIGHTS
- Sales up 18% to R2 349 million
- Total comprehensive income before tax return on total equity of 27%
- Internal rate of return to shareholders of 20%
- Net asset value up 16% to 2 728 cents per share
- Profit after tax up 11% to R131 million
- Headline earnings per share up 2% to 382 cents
- Final cash dividend declared of 67 cents, an increase of 12%

COMMENTS

INTRODUCTION

ELB Group's strategic focus is on being a holistic engineering solutions
provider to the mining, minerals, power, port, construction and industrial
sectors in the field of materials handling and gravity separation plants.
This is achieved through ELB generated innovation, in-house capability and
the supply, with world class partners, of equipment and technology. The
Group operates predominantly in Africa and Australasia.

Over the past year ELB has invested in a number of initiatives aimed at
sustainable growth, the results of which will continue to be realised over
the next few years. These initiatives include the expansion of its
geographic footprint in Africa and increasing its product and technology
range.

ELB has recently entered into a heads of agreement to form a 50:50 joint
venture for ELB to distribute initially in South Africa the Belaz range of
haulage trucks primarily to the mining sector. Belaz currently supplies
approximately 40% of the haulage trucks to the global market. This will
significantly enhance the growth prospects of ELB's Equipment division.

ELB also acquired B&W Instrumentation and Electrical Limited (B&W) during
the year, with effect from 22 April 2014. B&W is one of South Africa's
leading electrical and instrumentation (E&I) construction groups and has a
well-established track record of successful delivery in the E&I industry
since its inception in 1973. It has a wide footprint throughout South Africa
and across sub-Saharan Africa, with its head office based in Alberton,
Gauteng. ELB continues to seek to increase its complete product offering to
the market and its clients and hence the acquisition of B&W is strongly
aligned to the strategic direction of ELB. Servicing similar industries, the
acquisition will create improved efficiencies and long term sustainability
for the combined group of companies. In addition, synergies exist that can
and will be leveraged. B&W joins ELB with a sound order book and will take
advantage of additional project opportunities derived from ELB and the
market going forward. B&W is expected to make a positive contribution to the
ELB group results in the next year.

FINANCIAL RESULTS

The 18% increase in turnover for the year from R1 985 million in 2013 to 
R2 349 million in 2014 is a satisfactory result given the current difficult
trading conditions.

Profit for the year increased by 11% from R118 million in 2013 to R131
million in 2014 largely as a result of the increase in the engineering services
operations performance. ELB's share of comprehensive income decreased by 3%
from R111 million in 2013 to R108 million in 2014, largely due to a 
R13 million adjustment to the Pension Fund Employer Surplus Account.

The net asset value per share attributable to ordinary shareholders
increased from 2 345 cents in 2013 to 2 728 cents in 2014, an increase of
16%.

Headline earnings per share for the year increased by 2% from 374 cents per
share to 382 cents per share.

Due to the project nature of the business there is no consistent correlation
between turnover and profit in accounting periods, as profit recognition
largely increases during the latter stages of projects.

OPERATIONS

Africa

Trading conditions in the region though relatively buoyant remained
challenging during the year and the Group did well to secure a satisfactory
level of business.

ELB Equipment

This operation had a decrease in turnover from R762 million in 2013 to R660
million in 2014 while profit before tax decreased from R71 million in 2013
to R46 million in 2014. This was against the background of a weaker Rand
coupled with tougher trading conditions resulting in reduced margins. The
operation is well positioned to benefit from more favourable trading
conditions.

ELB Engineering Services

This operation has again shown good growth in the year. Although turnover
increased by 51% from R889 million in 2013 to R1 344 million in 2014, profit
before tax increased by 60% from R77 million in 2013 to R123 million in
2014. This material increase in profit before tax is attributable to a
number of projects reaching more advanced stages of completion, ELB
Construction producing satisfactory results in its third year of operation
and the inclusion of B&W for the two months since acquisition.

ELB Engineering Services has been successful in securing a number of new
projects and business opportunities which have positioned this operation
well for the coming 24 to 36 months.

Australasia

The Ditch Witch business has had a satisfactory year given the difficult
trading conditions it faces. The business continues to service the growing
demand for its Ditch Witch and Komptech range of products and the New
Zealand business unit has proven to be a profitable contributor to the Ditch
Witch operation.

Turnover decreased by 5% from R363 million in 2013 to R346 million in 2014
while profit before tax remained at R26 million in 2014.

Ditch Witch remains well positioned in both Australia and New Zealand to
take advantage of any increase in infrastructure spend in the region.

CASH FLOW

Net cash and cash equivalents declined from R471 million to R423 million
during the year as cash was used in increasing working capital, in continued
capital expenditure, fluctuations in up-front customer payments and the
inclusion of B&W. The cash and cash equivalent balances remained healthy at
the year-end after absorbing the utilisation. Cash flow management remains a
high priority for the Group.

ELB works closely with its bankers, suppliers and customers to ensure the
Group continues to retain a strong balance sheet at all times.

PROSPECTS

Activity levels in the various sectors that the ELB Group operates in remain
challenging, however the Group is well positioned to take advantage of any
positive change in the market conditions and opportunities that may arise.
The various strategies for growth that have been implemented over the past
12 months will stand the group in good stead for the future.

SOCIAL RESPONSIBILITY

ELB's empowerment partner is the ELB Educational Trust, which was
established to promote the education of historically disadvantaged South
Africans in engineering disciplines. To this end scholarships continue to be
awarded to students at various South African universities.

In addition to a number of smaller donations ELB has made substantial
donations to the St Vincent School for the Deaf and the Ligbron Academy of
Technology. These institutions have been identified as worthy of ELB's
support and which will further assist the historically disadvantaged in our
community.

Apart from donations ELB has also made significant contributions towards
small business development of the historically disadvantaged in South
Africa.

BOARD OF DIRECTORS

Mr Michael Easter joined the Board as Group Financial Director on 1 July
2013.

DIVIDENDS

It has been decided to declare a final dividend of 67 cents (2013 – 60
cents) per ordinary share.

The total dividend for the year is therefore 95 cents per share versus 85
cents per share for the 2013 financial year, representing an increase of
12%.

ACCOUNTING POLICIES

The condensed consolidated provisional financial statements are prepared in
accordance with the requirements of the JSE Limited Listings Requirements
for provisional reports and the requirements of the Companies Act of South
Africa. The Listings Requirements require provisional reports to be prepared
in accordance with the framework concepts and the measurement and
recognition requirements of International Financial Reporting Standards
(IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and Financial Pronouncements as issued by Financial
Reporting Standards Council and to also, as a minimum, contain the
information required by IAS 34 Interim Financial Reporting. The accounting
policies applied in the preparation of the condensed consolidated financial
statements are in terms of IFRS and are consistent with those applied in the
previous consolidated financial statements.

REVIEW BY THE INDEPENDENT AUDITOR

KPMG Inc, the Company's independent auditor, has reviewed the condensed
consolidated provisional financial statements contained in this provisional
report and has expressed an unmodified conclusion on the condensed
consolidated provisional financial statements. The review report is
available for inspection at the Company's registered office.

On behalf of the Board

Dr Stephen Meijers         Peter Blunden             Michael Easter
Chief Executive Officer    Chief Executive Officer   Group Financial Director
ELB Group and ELB ELB Equipment                      ELB Group
Engineering Services

Boksburg
18 September 2014

GROUP BALANCE SHEET
                                                      30 June 2014   30 June 2013   
                                                             R 000          R 000   
ASSETS                                                                              
Non-current assets                                         315 685        217 717   
Property, plant and equipment                              180 948        146 730   
Goodwill and intangible assets                              24 041              -   
Pension fund employer surplus account                       39 850         49 078   
Non-current loans receivable                                   933          3 748   
Deferred income tax assets                                  69 913         18 161   
Current assets                                           1 687 283      1 407 293   
Inventories, and construction contract work not                                     
yet billed                                                 804 163        623 798   


Receivables and other current assets                       430 960        312 989   
Cash and cash equivalents                                  452 160        470 506   
Total assets                                             2 002 968      1 625 010   
EQUITY AND LIABILITIES                                                              
Equity attributable to ordinary shareholders of                                     
ELB                                                        779 312        601 089   
Issued capital                                             107 702         25 192   
Treasury shares                                           (37 986)       (48 565)   
Reserves                                                    65 990         51 770   
Retained earnings                                          643 606        572 692   
Non-controlling interests in consolidated                                           
entities                                                   133 868        113 526   
Total equity                                               913 180        714 615   
Non-current liabilities                                     46 971         58 596   
Interest bearing borrowings                                 24 722         29 726   
Provision for trade back commitments                         2 861          2 670   
Deferred income tax liabilities                             19 388         26 200   
Current liabilities                                      1 042 817        851 799   
Non-interest bearing payables, other current                                        
liabilities and current provision                          783 314        672 893   
Interest bearing payables                                  230 135        178 906   
Bank overdraft                                              29 368              -   
Total liabilities                                        1 089 788        910 395   
Total equity and liabilities                             2 002 968      1 625 010   
Ordinary shares in issue (000's)                            35 824         33 860   
Deduct: Treasury shares in issue (000's)                     7 254          8 231   
Ordinary shares in issue on which net asset                                         
value per ordinary share is calculated                      28 570         25 629   
Net asset value per ordinary share (cents)                   2 728          2 345   

GROUP STATEMENT OF PROFIT OR LOSS                                                   
                                                          Reviewed        Audited   
                                                              Year           Year   
                                                             ended          ended   
                                                      30 June 2014   30 June 2013   
                                                             R 000          R 000   
Sales                                                    2 349 282      1 984 597   
Operating costs excluding depreciation and                                          
amortisation of non-financial assets                   (2 165 799)    (1 813 048)   
Operating profit before depreciation and                                            
amortisation of non-financial assets                       183 483        171 549   
Depreciation and amortisation of non-financial                                      
assets                                                    (20 590)       (14 212)   


Profit from operations                                     162 893        157 337   
Finance income                                              26 088         17 303   
Finance expenses                                          (10 380)       (11 275)   
Profit before income tax                                   178 601        163 365   
Income tax expense                                        (47 816)       (45 412)   
Profit for the year                                        130 785        117 953   
Profit for the year attributable to:                                                
Ordinary shareholders of ELB                               102 379         95 255   
Non-controlling interests in consolidated                                           
entities                                                    28 406         22 698   
                                                           130 785        117 953   
CALCULATION OF GROUP HEADLINE EARNINGS                                              
                                                          Reviewed        Audited   
                                                              Year           Year   
                                                             ended          ended   
                                                      30 June 2014   30 June 2013   
                                                             R 000          R 000   
Profit attributable to ordinary shareholders of                                     
ELB from the statement of profit or loss                   102 379         95 255   
Deduct: Items excluded from headline earnings                                       
as detailed below:                                             268            233   
Plant and equipment:                                                                
Profit on disposal                                             485            405   
Income tax on profit on disposal                             (131)          (110)   
Non-controlling interests in profit on disposal               (86)           (62)   
Headline earnings                                          102 111         95 022   
Weighted average number of ordinary shares                                          
(excluding treasury shares) on which basic                                          
earnings per ordinary share are based (000's)               26 723         25 396   
Earnings per ordinary share (cents)                                                 
- basic                                                      383.1          375.1   
- diluted                                                    378.9          365.2   
Headline earnings per ordinary share (cents)                                        
- basic                                                      382.1          374.2   
- diluted                                                    378.0          364.3   
Dividends declared for the year per ordinary                                        
share (cents)                                                   95             85 
  
GROUP STATEMENT OF COMPREHENSIVE INCOME                                             
                                                          Reviewed        Audited   

                                                              Year           Year   
                                                             ended          ended   
                                                      30 June 2014   30 June 2013   
                                                             R 000          R 000   
Profit for the year from the statement of                                           
profit or loss                                             130 785        117 953   
Other comprehensive income                                  11 189         19 691   
Items that may be reclassified subsequently to                                      
profit or loss                                                                      
Foreign currency translation reserve                                                
adjustments attributable to ordinary                                                
shareholders of ELB                                         17 284         13 143   
Income tax effect of foreign currency                                               
translation reserve adjustments attributable to                                     
ordinary shareholders of ELB                               (2 576)        (1 592)   
Items that will not be reclassified to profit                                       
or loss                                                                             
Non-controlling interests in foreign currency                                       
translation reserve adjustments                              3 051          2 320   
Foreign currency translation adjustments to                                         
foreign non-controlling interests                            2 609          1 476   
Pension fund employer surplus account                                               
remeasurements                                            (12 648)          6 024   
Aeroplane revaluation surplus increase                         531            401   
Income tax effect of items that will not be                                         
reclassified to profit or loss                               2 938        (2 081)   
Total comprehensive income for the year                    141 974        137 644   
Total comprehensive income for the year                                             
attributable to:                                                                    
Ordinary shareholders of ELB                               108 306        111 388   
Non-controlling interests in consolidated                                           
entities                                                    33 668         26 256   
                                                           141 974        137 644   
GROUP STATEMENT OF CHANGES IN EQUITY                                                       
                                            Attributable to ordinary shareholders of ELB   
                                    Issued     Treasury                   Retained              
                                   capital       shares     Reserves      earnings      Total   
                                     R 000        R 000        R 000         R 000      R 000   
Balance at 30 June 2012 -                                                          
Audited                             25 192     (52 684)       37 077       494 015    503 600   
Total comprehensive income                                                         
for the year                                                  11 796        99 592    111 388   
Profit for the year                                                         95 255     95 255   
Other comprehensive income                                    11 796         4 337     16 133   


Ordinary dividends paid                                                   (19 528)   (19 528)   
non-controlling interests                                                                       
in distributions by a                                                                           
consolidated group entity                                                                       
Increase in share options                                                                       
reserve                                                        1 510                    1 510   
Transfer from share options                                                                     
reserve to retained                                                                             
earnings for share options                                                                      
exercised and fully paid,                                                                       
and for share options                                                                           
lapsed through attrition                                       (949)           949          -   
Redundant items in the                                                                          
foreign currency                                                                                
translation reserve                                                                             
transferred to retained                                                                         
earnings                                                       2 336       (2 336)          -   
Decrease in the carrying                                                                        
amount of treasury shares                                                                       
held by group entities                            4 119                                 4 119   
Preference shares redeemed                                                                      
for cash                                                                                        

Balance at 30 June 2013 -                                                                       
Audited                             25 192     (48 565)       51 770       572 692    601 089   

Total comprehensive income                                                                      
for the year                                                  15 033        93 273    108 306   
Profit for the year                                                        102 379    102 379   
Other comprehensive income                                    15 033       (9 106)      5 927   

Ordinary dividends paid                                                   (23 373)   (23 373)   
non-controlling interests                                                                       
in distributions by a                                                                           
consolidated group entity                                                                       
Increase in share options                                                                       
reserve                                                          201                      201   
Transfer from share options                                                                     
reserve to retained                                                                             
earnings for share options                                                                      
exercised and fully paid,                                                                       
and for share options                                                                           
lapsed through attrition                                     (4 555)         4 555          -   
Item restored to the                                                                            
foreign currency                                                                                
translation reserve from                                                                        
retained earnings                                              3 541       (3 541)          -   
Decrease in the carrying                                                                        
amount of treasury shares                                                                       
held by group entities                           10 579                                10 579   
Ordinary shares issued              82 510                                             82 510   
non-controlling interest                                                                        
acquired                                                                                        

Balance at 30 June 2014 -                                                                       
Reviewed                           107 702     (37 986)       65 990       643 606    779 312   

                                                            Non-              
                          Attributable to            controlling              
                                 ordinary              interests              
                             shareholders    Pref-    in consol-              
                                   of ELB   erence        idated      Total   
                                    Total   shares      entities     equity   
                                    R 000    R 000         R 000      R 000   
Balance at 30 June 2012 -                                                     
Audited                           503 600        8        87 940    591 548   

Total comprehensive income                                                    
for the year                      111 388                 26 256    137 644   
Profit for the year                95 255                 22 698    117 953   
Other comprehensive income         16 133                  3 558     19 691   

Ordinary dividends paid          (19 528)                  (861)   (20 389)   
Non-controlling interests                                                     
in distributions by a                                                         
consolidated group entity                                   (75)       (75)   
Increase in share options                                                     
reserve                             1 510                    266      1 776   
Transfer from share                                                           
options reserve to                                                            
retained earnings for                                                         
share options exercised                                                       
and fully paid, and for                                                       
share options lapsed                                                          
through attrition                       -                      -          -   
Redundant items in the                                                        
foreign currency                                                              
translation reserve                                                           
transferred to retained                                                       
earnings                                -                      -          -   
Decrease in the carrying                                                      
amount of treasury shares                                                     
held by group entities              4 119                             4 119   
Preference shares redeemed                                                    
for cash                                       (8)                      (8)   

Balance at 30 June 2013 -                                                     
Audited                           601 089        -       113 526    714 615   

Total comprehensive income                                                    
for the year                      108 306                 33 668    141 974   
Profit for the year               102 379                 28 406    130 785   
Other comprehensive income          5 927                  5 262     11 189   

Ordinary dividends paid          (23 373)                (5 402)   (28 775)   
Non-controlling interests                                                     
in distributions by a                                                         
consolidated group entity                                (4 496)    (4 496)   
Increase in share options                                                     
reserve                               201                     35        236   
Transfer from share                     -                      -          -   
options reserve to                                                           
retained earnings for                                                        
share options exercised                                                      
and fully paid, and for                                                      
share options lapsed                                                         
through attrition                       -                      -          -       
Item restored to the                                                         
foreign currency                                                             
translation reserve from                                                     
retained earnings                       -                      -          -   
Decrease in the carrying                                                      
amount of treasury shares                                                     
held by group entities             10 579                     41     10 620   
Ordinary shares issued             82 510                            82 510   
Non-controlling interest                                                      
acquired                                                 (3 504)    (3 504)   
 
Balance at 30 June 2014 -                                                     
Reviewed                          779 312        -       133 868    913 180   

GROUP CASH FLOW STATEMENT                                                   
                                                    Reviewed      Audited   
                                                        Year         Year   
                                                       ended        ended   
                                                     30 June      30 June 
                                                        2014         2013  
                                                       R 000        R 000   
Cash inflow/(outflow) from operating activities                             
before dividends and distributions paid               13 960     (15 153)   
Dividends and distributions paid                    (33 271)     (20 464)   
Cash outflow from operating activities              (19 311)     (35 617)   
Cash outflow from investment activities             (28 931)     (17 111)   
Cash inflow from financing activities                  7 169       18 665   
Cash outflow for the year                           (41 073)     (34 063)   
Foreign currency exchange and translation                                   
adjustments to cash and cash equivalents              16 944       15 179   
Decrease in cash and cash equivalents               (24 129)     (18 884)   
Cash and cash equivalents at the beginning of                               
the year                                             470 506      489 390   
Cash and cash equivalents of business                                       
combination at acquisition                          (23 585)            -   
Cash and cash equivalents at the end of the                                 
year                                                 422 792      470 506   

SEGMENT INFORMATION                                                                            
                                                    Engineering                    
                                          Equipment    Services    
                                  Total      Africa      Africa   Australasia      Other   
                                  R 000       R 000       R 000         R 000      R 000   
Reviewed                                                                                   
Year ended 30 June                                                                         
2014                                                                                       
Sales                                                                                      
External to the                                                                            
Group                         2 349 282     658 927   1 344 451       345 895          9   
Inter segment                       732         713           -             -         19   
Inter segment                                                                              
elimination                       (732)           -           -             -      (732)   
As reported in                                                                             
profit or loss                2 349 282     659 640   1 344 451       345 895      (704)   
Profit before income tax        178 601      45 780     123 114        26 224   (16 517)   
Profit for the year             130 785      32 817      92 088        20 682   (14 802)   
Profit attributable                                                                        
to ordinary                                                                                
shareholders of ELB             102 379      28 092      71 792        14 320   (11 825)   
Assets                        2 002 968     775 958     851 467       378 511    (2 968)   
Liabilities                   1 089 788     402 532     593 010       132 825   (38 579)   
  
Audited                                                                          
Year ended 30 June                                                               
2013                                                                             

Sales                                                                            
External to the                                                                  
Group                     1 984 597     732 550     889 093     362 942         12   
Inter segment                28 990      28 990           -           -          -   
Inter segment                                                                    
elimination                (28 990)           -           -           -   (28 990)   
As reported in                                                                 
profit or loss            1 984 597     761 540     889 093     362 942   (28 978)   

Profit before tax           163 365      71 050      77 063      26 317   (11 065)   
Profit for the year         117 953      51 022      55 315      20 791    (9 175)   
Profit attributable                                                              
to ordinary                                                                        
shareholders of ELB          95 255      43 369      43 503      14 297    (5 914)   
Assets                    1 625 010     773 757     533 801     329 083   (11 631)   
Liabilities                 910 395     415 730     399 105     117 502   (21 942)   

NOTES

Acquisition of subsidiary

On 22 April 2014 the Group acquired 100% of the shares in B&W
Instrumentation and Electrical Limited ('B&W') and as a result obtained
control of the B&W Group.

In the two months to 30 June 2014, B&W contributed revenue of R78 million
and profit of R10 million to ELB's group results. If the acquisition had
occurred on 1 July 2013, management estimates that the ELB group
consolidated revenue would have been R2 707 million and the ELB group
consolidated profit for the year would have been R41 million, which is after
post-tax adjustments of R58 million that arose on the alignment of B&W's
accounting policies to those of ELB's and other fair value adjustments on
acquisition of the B&W net assets.

a. Consideration transferred

The acquisition date fair value of the consideration transferred was one
fully paid up ELB Group ordinary share issued for every 108 B&W ordinary
shares held amounting to R82 million, being 1 964 527 ordinary shares at the
fair value of R42,00, being the market price of an ELB Group ordinary share
on 22 April 2014, the effective date of the acquisition, less the 72 176
ordinary shares issued to the B&W Share Purchase Scheme Trust at the fair
value of R42,00 per ordinary share which are debited to treasury shares,
amounting to R3 million.

b. Acquisition related costs

Acquisition related costs of R3,0 million relating to external legal fees,
advisor, JSE and due diligence costs were incurred. These costs were
included in ‘Operating costs excluding depreciation and amortisation' in the
B&W profit or loss prior to the effective acquisition date and R0,2 million
was included in the ELB Group statement of profit or loss for the year.

c. Identifiable assets acquired and liabilities assumed

The following table summarises the recognised amounts of assets acquired and
liabilities assumed at the date of acquisition:

                                                              R 000
 Property, plant and equipment                               19 493
 Goodwill                                                     7 368
 Intangible assets                                           12 323
 Deferred tax                                                49 140
 Inventories and work in progress                            51 967
 Trade and other receivables                                 43 327
 Cash and cash equivalents                                    2 799
 Non-controlling interest                                     3 504
 Trade and other payables                                  (86 276)
 Onerous contracts                                          (3 197)
 Bank overdraft                                            (26 384)
Total identifiable net assets acquired                       74 064

d. Fair value of intangible assets and onerous contracts

The fair value determination of contracts acquired was based on future
contract revenue and contract profits. Net cash flows arising from these
contracts, net of contributory asset charges, were discounted at a Weighted
Average Cost of Capital ('WACC') rate of 21,43% over the lives of the
contracts to determine a net present value of future profits. Onerous
contracts were recognised in respect of all loss making contracts.

The fair value determination of the brand name acquired was based on future
revenue and the application of a royalty rate of 1%. The net cash flows
arising from the revenue royalty were discounted at a WACC rate of 21,43%
over the future revenue period to determine the net present value of the
royalty based brand value.

e. Goodwill
                                                                  R 000
Goodwill arising from the acquisition has been
recognised as follows:
Total net consideration transferred                              79 479
Total identifiable net assets acquired                         (74 064)
Goodwill                                                          5 415

The goodwill is attributable mainly to the skills and technical talent of
B&W's work force, and the synergies expected to be achieved from integrating
the company into the Group's existing business. None of the goodwill
recognised is expected to be deductible for tax purposes.

Capital expenditure incurred and future commitments

Other capital expenditure of R29 million was incurred during the year
primarily on property, plant and equipment.

At 30 June 2014 there was a capital expenditure commitment of R5 million for
the acquisition of an additional property. At 30 June 2013 there were
capital expenditure commitments of R4 million.

The commitment will be funded from a combination of planned and existing
mortgage bond facilities available to the Group and from the Group's cash
and cash equivalents.

Contingent liabilities

A Group entity has issued a guarantee of R0,8 million in favour of a raw
material supplier to a company which was previously part of the Group and
has now been sold. The guarantee is cancellable by three calendar months
notice. A financial guarantee liability with a carrying amount of R16 000 at
30 June 2014 is carried in respect of the guarantee.

ELB Engineering Services operates in the engineering contracting business
and is exposed to the risks associated with engineering contracts. These
risks are managed on the basis of limited liability and appropriate
insurances.

All known liabilities of the Group at the balance sheet date have been
accrued.

FINAL CASH DIVIDEND DECLARATION

ORDINARY DIVIDEND NUMBER 133

The directors have declared a final cash dividend of 67 cents per share on
the Company's ordinary shares for the year ended 30 June 2014. The following
additional information is given in respect of the dividend:
  - the dividend has been declared out of income reserves
  - the South African dividend tax rate is 15%
  - there are no secondary tax on companies (STC) credits utilised
  - ELB Group Limited's income tax reference number is: 9275151711
  - The gross dividend is 67 cents per ordinary share for ordinary
    shareholders exempt from the dividend tax
  - The net dividend is 56,95 cents per ordinary share for ordinary
    shareholders liable to pay the dividend tax
  - ELB Group Limited has 35 824 527 ordinary shares in issue, of which 
    7 254 207 were treasury shares at the year end

The salient dates in respect of the dividend are:

Last day to trade cum dividend                      Friday, 17 October 2014
Shares commence trading ex dividend                 Monday, 20 October 2014
Record date                                         Friday, 24 October 2014
Date of payment                                     Monday, 27 October 2014

Shares may not be dematerialised or rematerialised between Monday, 
20 October 2014, and Friday, 24 October 2014, both dates inclusive.

By order of the Board

Elbex (Pty) Ltd                                               Boksburg
Company secretary                                    18 September 2014

Preparation of the reviewed group condensed provisional report
The preparation of the reviewed group condensed provisional report was
supervised by the group financial director, Michael Easter CA(SA).

DIRECTORS
AG Fletcher (chairman) Dr SJ Meijers (group chief executive and chief
executive - ELB Engineering Services) PJ Blunden (chief executive - ELB
Equipment) MC Easter (group financial director) T de Bruyn* Dr JP Herselman*
MV Ramollo CJ Smith (alternate) IAR Thomson*
*Non-executive

Registered office       Share transfer           Sponsor
                        secretaries
14 Atlas Road           Computershare Investor   Rand Merchant Bank (a
Anderbolt               Services(Pty) Ltd        division of FirstRand Bank
Boksburg                70 Marshall Street       Limited)
1459                    Johannesburg             1 Merchant Place
                        2001                     cnr Fredman Drive and Rivonia
                        (PO Box 61051,           Road
                        Marshalltown,            Sandton
                        2107)                    2196

COMPANY SECRETARY
Elbex (Pty) Ltd

POSTAL ADDRESS: PO Box 565, Boksburg, 1460

WEBSITE: www.elb.co.za

TELEPHONE: +27 11 306 0700

RELEASE DATE
The reviewed group condensed provisional report was released on 19 September 2014.

Date: 19/09/2014 01:51:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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