Wrap Text
Unaudited Consolidated Financial Results for the six month period ended 30 September 2014 and Dividend Declaration
BSI Steel Limited
(Incorporated in the Republic of South Africa)
(Registration number 2001/023164/06)
(JSE code: BSS ISIN: ZAE000125134)
("BSI" or "the Company" or "the Group")
Salient features
- Revenue down 5%
- Normalised earnings before tax R 46.3 million
- HEPS 0.5 cents per share
- NTAV 87 cents per share
- Dividend 2 cents per share
UNAUDITED CONSOLIDATED FINANCIAL RESULTS
FOR THE SIX MONTH PERIOD ENDED 30 SEPTEMBER 2014 AND DIVIDEND DECLARATION
Summarised statement of profit and loss
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 September 2014 30 September 2013 31 March 2014
R'000 R'000 R'000
Revenue 1 684 977 1 773 284 3 347 039
Gross profit 281 672 316 977 563 205
Other costs (201 154) (221 017) (424 562)
Earnings before interest,
taxation,
Depreciation and amortisation 80 518 95 960 138 643
("EBITDA")
Restructuring adjustments (25 013) - -
Depreciation and (18 416) (13 451) (27 945)
Amortisation
Profit before interest and 37 089 82 509 110 698
taxation
Income from equity accounted
Investments (1 640) - 945
(Loss) on disposal of assets (83) (369) (384)
Interest received 3 669 2 074 5 474
Interest paid (32 863) (31 432) (60 504)
Profit before taxation 6 172 52 782 56 229
Taxation (4 603) (8 487) (19 416)
Profit for the period 1 569 44 295 36 813
Profit attributable to ordinary
shareholders 1 839 44 297 36 946
Profit attributable to minority
shareholders (270) (2) (133)
1 569 44 295 36 813
Earnings per share (cents) 0.3 6.3 5.3
Reconciliation of headline
earnings:
Earnings attributable to ordinary
shareholders 1 839 44 297 36 946
Loss on disposal of 83 369 384
property, plant and equipment
Impairment of property, plant and
equipment 2 863 - -
Tax impact of adjustments (1 159) (103) (108)
Bargain purchase (no tax effect) - - (1 495)
Headline earnings attributable to
ordinary shareholders(basic and
diluted) 3 626 44 563 35 727
Weighted average shares in 701 810 702 020 702 020
issue on which earnings are
based (000) (1)
Headline earnings per share 0.5 6.4 5.1
(cents) (basic and diluted)
Note:
1) The weighted average number of shares in issue for 30 September 2014 is
based on the weighted number of shares held by the public during the period
under review
Summarised statement of other comprehensive income
Unaudited Unaudited Audited
30 September 30 September 31 March
2014 2013 2014
R'000 R'000 R'000
Profit for the period 1 569 44 295 36 813
Other comprehensive income
Foreign currency translation reserve 18 994 24 012 37 458
Total comprehensive income 20 563 68 307 74 271
Summarised consolidated statement of financial position
Unaudited Unaudited Audited
30 September 2014 30 September 2013 31 March 2014
R'000 R'000 R'000
ASSETS
Non-Current Assets
Property, plant and 376 437 377 303 392 747
equipment
Goodwill 14 706 14 706 14 706
Intangible assets 14 193 16 412 15 316
Investments in joint ventures 17 3 1 584
Deferred taxation 12 559 16 940 13 051
417 912 425 364 437 404
Current Assets
Inventories 423 686 452 788 450 350
Trade and other receivables 789 185 689 366 728 660
Current tax receivable 13 976 3 127 8 592
Other financial assets 670 6 978 -
Loans to group companies 11 172 - 10 498
Cash and cash equivalents 106 926 80 597 65 689
1 345 615 1 232 856 1 263 789
Total assets 1 763 527 1 658 220 1 701 193
EQUITY AND LIABILITIES
Equity
Total shareholders' equity 641 346 613 470 620 044
Non-controlling interest (413) 251 (143)
640 933 613 721 619 901
Liabilities
Non-Current Liabilities
Other financial liabilities 92 560 97 332 83 093
Deferred taxation 11 817 8 094 11 130
Provisions - 6 755 -
104 377 112 181 94 223
Current Liabilities
Trade and other payables 581 137 552 785 488 158
Current tax payable 2 375 12 525 6 899
Other financial liabilities 40 613 40 612 39 017
Loans from shareholders - 100 -
Bank overdraft 394 092 326 296 452 995
1 018 217 932 318 987 069
Total Liabilities 1 122 594 1 044 499 1 081 292
Total equity and liabilities 1 763 527 1 658 220 1 701 193
Number of shares in issue 701 810 701 810 701 810
(000) (1
Net asset value per share 91.3 87.5 88.3
(cents)
Net tangible asset value per 87.2 83.0 84.1
share (cents)
Summarised consolidated statement of changes in equity
Unaudited Unaudited Audited
30 September 30 September 31 March
2014 2013 2014
R'000 R'000 R'000
Equity holders' interest
Balance at beginning of period 620 044 545 799 545 799
Profit for the period 1 839 44 297 36 946
Foreign currency translation 18 994 24 012 37 458
reserve
Purchase of treasury shares - (1 115) (1 115)
Share based payment provision 469 477 956
Balance at end of period 641 346 613 470 620 044
Non-controlling interest
Balance at beginning of period (143) 253 253
Profit for the period (270) (2) (133)
Non-controlling interest buy back - - (263)
Balance at end of period (413) 251 (143)
Total equity 640 933 613 721 619 901
Summarised consolidated statement of cash flows
Unaudited Unaudited Audited
30 September 30 September 31 March
2014 2013 2014
R'000 R'000 R'000
Operating activity cash 86 697 188 409 93 090
flows
Cash flows from 127 816 216 312 160 357
operations
Interest and taxation (41 119) (27 903) (67 267)
Investing activity cash 618 (26 954) (55 733)
flows
Financing activity cash 9 657 (11 395) (28 995)
flows
Total cash movement for the 96 972 150 060 8 362
period
Cash at beginning of period (387 306) (399 100) (399 101)
Effect of exchange rate 3 168 3 341 3 433
movement on cash balances
Total cash at end of period (287 166) (245 699) (387 306)
Summarised consolidated segment report
Unaudited Unaudited Audited
30 September 30 September 31 March
2014 2013 2014
R'000 R'000 R'000
Gross revenue
Stockists 466 925 511 757 985 257
Bulk Sales 519 038 504 674 947 120
Exporting 669 907 686 068 1 314 323
Other 29 107 70 785 100 339
1 684 977 1 773 284 3 347 039
Profit before interest and
taxation
Stockists 9 831 18 338 30 102
Bulk Sales 17 941 20 295 39 002
Exporting 24 020 42 273 64 139
Other (16 426) 1 234 (21 984)
35 366 82 140 111 259
Assets
Stockists 298 026 299 182 287 966
Bulk Sales 247 211 208 935 232 887
Exporting 621 197 525 368 524 255
Other 615 881 630 612 667 664
Eliminations (18 788) (5 877) (11 579)
1 763 527 1 658 220 1 701 193
OVERVIEW
The interim financial results are presented for the six months ended 30 September
2014.
The Group Operates in the steel and associated industries with strategically
located operations in South Africa, the Democratic Republic of Congo, Mauritius,
Mozambique, Zimbabwe and Zambia. BSI markets through three distinct channels, being
Stockists, Bulk Sales and Exports.
The six months under review reflects the Group?s strategy of closing or
restructuring loss-making operations and the focus on reducing operating costs and
improved working capital management.
FINANCIAL RESULTS
In spite of the strike during July the turnover for the period under review was a
mere 5% lower than the comparative period in 2013 due to high turnover experienced
during the months following the strike, this being the reason for the increased
Trade receivables and Trade payables. The focus has been on lowering the operating
costs in order to withstand economic storms going forward which can be seen in the
11% decline in costs in comparison to the prior period. Most loss making operations
were closed towards the end of the reporting period and we will therefore see a
further decline in months to come.
Stock control has been a main priority across the Group during the course of the
last few years and we are excited to report that record turnover figures were
achieved during the latter part of the six months on the back of lower stock levels
than before. The benefits of this focus are apparent in the strongly improved cash
flow.
R25 million was expensed in terms of adjustments in the closure of loss making
operations and a further R15 million was suffered in pre-closure operating
losses. Normalised earnings before tax for the period under review amounted to R46
million. We are confident that the closure of these business units will have a
significant impact on the profitability of the BSI Group going forward.
Calculation of normalised earnings R'000
Profit before taxation 6 172
Loss on disposal of property, plant and equipment 83
Restructuring adjustments
Loss on disposal of plant and equipment 2 863
Loss on contract cancellations 7 309
Retrenchments 8 953
Inventory write downs 4 046
Impairment trade receivables 1 842
Total restructuring adjustments 25 013
Trading losses discontinued operations 15 004
Normalised earnings 46 272
The Group enjoys good relationships with its bankers and has adequate headroom on
its funding facilities.
PROSPECTS
Following a long period of poor returns it was decided to make material changes to
our trading model. All loss-making operations were closed during the H1, with the
exception of two small operations showing promise of near term profitability.
Remaining operations have been consolidated where practical, which has resulted in
significant operational savings and improved efficiencies. BSI is committed to a
highly disciplined and focussed approach going forward. We are aiming for
materially improved returns in the future, coupled with a reduction in risk through
tighter controls and a reduced operational footprint. Since the closure of the
loss-making operations, BSI has enjoyed higher sales levels at improved margins.
The Group experienced strong trading results for October together with a further
reduction in operating costs.
DIVIDEND DECLARATION
Notice is hereby given of the declaration of an ordinary gross cash dividend of 2
cents per share (“the dividend”) for the six month period. In accordance with the
JSE Listings Requirements the following additional information is disclosed; the
dividend has been declared out of income reserves; the local dividend tax rate is
15%; the gross local dividend amount is 2 cents per ordinary share for shareholders
exempt from dividend tax; the net local dividend amount is 1.7 cents per ordinary
share for shareholders liable to pay dividend tax; the Company currently has
719 854 996 shares in issue and the Company's income tax reference number is
9150236215. No STC credits have been utilised.
The following dates will apply to the dividend:
Last date to trade 'cum' the dividend 28 November 2014
Trading commences ex the dividend 1 December 2014
Record date 5 December 2014
Date of payment of the dividend 8 December 2014
Share certificates may not be dematerialised of rematerialised during the period
1 December to 5 December 2014, both days inclusive.
SUBSEQUENT EVENTS
No material change has taken place in the affairs of the group between the end of
the financial period and the date of this report.
DIRECTORATE
Mr J R Waller stepped down as Financial Director on 23 September 2014, but remains
on the board as a non-executive director.
Mr I A J Clark resigned as a director on 23 September 2014.
Mrs E Vermaak was appointed Financial Director on 23 September 2014.
Mr K Paxton was appointed as a director on 23 September 2014.
STATEMENT ON GOING CONCERN
The financial statements have been prepared on the going-concern basis since the
directors have every reason to believe that the Company has adequate resources in
place to continue in operation for the foreseeable future.
BASIS OF PREPARATION
The results have been prepared containing the information required by IAS 34
Interim Financial Reporting, SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued by the
Financial Reporting Standards Council and are in accordance with the Group's
accounting policies, which comply with International Financial Reporting Standards,
the Companies Act, 71 of 2008 of South Africa as amended and the JSE Limited
Listings Requirements. The basis of preparation is consistent with that of the
prior period.
The unaudited condensed consolidated financial statements were authorised for issue
by the directors on 6 November 2014 for publication on 6 November 2014. The
summarised consolidated financial statements for the six month period ended 30
September 2014 have been prepared by the Financial Director, Mrs E Vermaak.
Any reference to the future financial performance of the Group has not been
reviewed or reported on by the Group's auditors.
By order of the Board
6 November 2014
W L Battershill E Vermaak
CHAIRMAN AND CEO CFO
CORPORATE INFORMATION
Chairman and CEO: WL Battershill
Non-executive directors: J R Waller, B M Khoza (Alternate - N M Anderson),
N G Payne, R G Lewis
Executive directors: G D G Mackenzie, J Govender, C Parry, , K Paxton, E Vermaak
Registered address: 46 Eden Park Drive, Murrayfield Park, Mkondeni,
Pietermaritzburg 3201
Postal address: P O Box 101096, Scottsville, 3209
Company secretary: S J Hackett
Telephone: (033) 846 2208
Facsimile: (033) 846 2233
Transfer secretaries: Computershare Investor Services(Pty) Limited
Designated Adviser: Sasfin Capital (A division of Sasfin Bank Limited)
Date: 06/11/2014 04:48:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
