Wrap Text
Audited results for the year ended 28 February 2015
Raubex Group Limited
(Incorporated in the Republic of South Africa)
Registration number 2006/023666/06
Share Code: RBX
ISIN Code: ZAE000093183
("Raubex" or the "Group")
Audited results for the year ended 28 February 2015
Salient features
- Revenues up 14,5% to R7,25 billion (2014: R6,33 billion)
- Operating profit up 15,2% to R622,2 million (2014: R539,9 million)
- Group operating profit margin of 8,6% (2014: 8,5%)
- HEPS up 11,8% to 209,1 cents per share (2014: 187,1 cents per share)
- Cash flow from operations up 4,5% to R785,1 million (2014: R751,4 million)
- Capex spend of R510,6 million (2014: R483,3 million)
- Order book of R8,68 billion (2014: R6,55 billion)
- Final dividend of 36 cents per share declared
Rudolf Fourie, CEO of Raubex Group, said: "We have delivered a strong set of results in a tough
environment supported by a great performance from the materials division which now accounts for
over 50% of the Group's earnings.
"The recent acquisitions have been successfully integrated and are contributing positively.
We will continue to seek earnings enhancing acquisitions that are in line with our integrated model.
"The Group's order book is at an all-time high and the international projects secured in Zambia
allow us to be more selective in the work that we tender for in South Africa.
"Our more diversified base, strong balance sheet and cash position will help us navigate the
challenging conditions in the South African construction market and deliver growth in the
year ahead."
Group income statement
Audited Audited
12 months 12 months
28 February 28 February
2015 2014
R'000 R'000
Revenue 7 245 259 6 325 012
Cost of sales (6 257 742) (5 463 929)
Gross profit 987 517 861 083
Other income 12 113 11 302
Other gains/(losses) - net 9 984 16 021
Administrative expenses (387 443) (348 531)
Operating profit 622 171 539 875
Finance income 46 520 38 749
Finance costs (62 259) (44 162)
Share of profit of investments
accounted for using the equity
method 205 -
Profit before income tax 606 637 534 462
Income tax expense (178 563) (154 786)
Profit for the year 428 074 379 676
Profit for the year attributable to:
Owners of the parent 399 837 355 573
Non-controlling interest 28 237 24 103
Basic earnings per share (cents) 213,4 191,3
Diluted earnings per share (cents) 209,9 187,9
Group statement of comprehensive income
Audited Audited
12 months 12 months
28 February 28 February
2015 2014
R'000 R'000
Profit for the year 428 074 379 676
Other comprehensive income for
the year, net of tax
Currency translation differences 382 4 688
Actuarial (loss)/gain on
post-employment benefit
obligations (137) 2 043
Total comprehensive income for
the year 428 319 386 407
Comprehensive income for the
year attributable to:
Owners of the parent 400 082 362 304
Non-controlling interest 28 237 24 103
Total comprehensive income for
the year 428 319 386 407
Calculation of diluted earnings per share
Audited Audited
12 months 12 months
28 February 28 February
2015 2014
R'000 R'000
Profit attributable to owners of the
parent entity 399 837 355 573
Weighted average number of
ordinary shares in issue ('000) 187 330 185 900
Adjustments for:
Shares deemed issued for no
consideration (share options)
('000) 3 202 3 360
Weighted average number of
ordinary shares for diluted
earnings per share ('000) 190 532 189 260
Diluted earnings per share (cents) 209,9 187,9
Calculation of headline earnings per share
Audited Audited
12 months 12 months
28 February 28 February
2015 2014
R'000 R'000
Profit attributable to owners of the
parent entity 399 837 355 573
Adjustments for:
Profit on sale of property, plant
and equipment (11 348) (10 244)
Excess from fair value of assets
acquired over purchase price - (368)
Total tax effects of adjustments 3 177 2 868
Basic headline earnings 391 666 347 829
Weighted average number of
shares ('000) 187 330 185 900
Headline earnings per share
(cents) 209,1 187,1
Diluted headline earnings per
share (cents) 205,6 183,8
Group statement of financial position
Audited Audited
12 months 12 months
28 February 28 February
2015 2014
R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 2 171 829 1 841 611
Intangible assets 795 098 763 671
Investment in associates and joint
ventures 10 708 -
Deferred income tax assets 43 136 37 509
Non-current inventories 90 668 -
Non-current trade and other
receivables 129 355 -
Total non-current assets 3 240 794 2 642 791
Current assets
Inventories 438 330 420 240
Construction contracts in progress
and retentions 362 351 322 590
Trade and other receivables 1 253 668 1 068 410
Current income tax receivable 40 964 28 671
Cash and cash equivalents 937 275 871 260
Total current assets 3 032 588 2 711 171
Total assets 6 273 382 5 353 962
EQUITY
Share capital 1 873 1 859
Share premium 2 179 613 2 179 613
Other reserves (1 140 762 (1 104 240)
Retained earnings 2 381 905 2 109 193
Equity attributable to owners of
the parent 3 422 629 3 186 425
Non-controlling interest 110 788 54 612
Total equity 3 533 417 3 241 037
LIABILITIES
Non-current liabilities
Borrowings 672 320 429 961
Provisions for liabilities and
charges 54 253 34 675
Deferred income tax liabilities 311 621 266 464
Other financial liabilities 77 262 -
Total non-current liabilities 1 115 456 731 100
Current liabilities
Trade and other payables 1 170 248 1 075 529
Borrowings 427 620 287 600
Current income tax liabilities 26 641 18 696
Total current liabilities 1 624 509 1 381 825
Total liabilities 2 739 965 2 112 925
Total equity and liabilities 6 273 382 5 353 962
Group statement of changes in equity
Share Share Other Retained
capital premium reserves earnings
R'000 R'000 R'000 R'000
Balance at 1 March 2013 1 845 2 179 613 (1 112 515) 1 850 616
Shares issued in terms of
equity-settled share option
scheme 14 - (23 767) 23 767
Share option reserve - - 27 354 -
Acquisition of non-controlling
interest - - - (1 971)
Total comprehensive income for
the year - - 4 688 357 616
Dividends paid - - - (120 835)
Balance at 28 February 2014 1 859 2 179 613 (1 104 240) 2 109 193
Shares issued in terms of
equity-settled share option
scheme 14 - (16 242) 16 242
Share option reserve - - 27 797 -
Put option written on
non-controlling interest - - (48 459) -
Non-controlling interest arising on
business combination - - - -
Acquisition of non-controlling
interest - - - (12 099)
Total comprehensive income for
the year - - 382 399 700
Dividends paid - - - (131 131)
Balance at 28 February 2015 1 873 2 179 613 (1 140 762) 2 381 905
Group statement of changes in equity
Total
attributable
to owners Non-
of the parent controlling Total
company interest equity
R'000 R'000 R'000
Balance at 1 March 2013 2 919 559 39 031 2 958 590
Shares issued in terms of
equity-settled share option
scheme 14 - 14
Share option reserve 27 354 - 27 354
Acquisition of non-controlling
interest (1 971) (6 214) (8 185)
Total comprehensive income for
the year 362 304 24 103 386 407
Dividends paid (120 835) (2 308) (123 143)
Balance at 28 February 2014 3 186 425 54 612 3 241 037
Shares issued in terms of
equity-settled share option
scheme 14 - 14
Share option reserve 27 797 - 27 797
Put option written on
non-controlling interest (48 459) - (48 459)
Non-controlling interest arising on
business combination - 61 376 61 376
Acquisition of non-controlling
interest (12 099) (195) (12 294)
Total comprehensive income for
the year 400 082 28 237 428 319
Dividends paid (131 131) (33 242) (164 373)
Balance at 28 February 2015 3 422 629 110 788 3 533 417
Group statement of cash flows
Audited Audited
12 months 12 months
28 February 28 February
2015 2014
R'000 R'000
Cash flows from operating
activities
Cash generated from operations 785 053 751 420
Finance income 46 520 38 749
Finance costs (57 900) (44 162)
Income tax paid (188 848) (136 438)
Net cash generated from
operating activities 584 825 609 569
Cash flows from investing
activities
Purchases of property, plant
and equipment (510 599) (483 299)
Proceeds from sale of property,
plant and equipment 40 267 52 839
Acquisition of subsidiaries (202 485) (115 040)
Loans granted to associates
and joint ventures (10 500) -
Net cash used in investing
activities (683 317) (545 500)
Cash flows from financing
activities
Proceeds from borrowings 752 827 504 253
Repayment of borrowings (411 642) (404 319)
Proceeds from shares issued 14 14
Dividends paid to owners
of the parent (131 131) (120 835)
Dividends paid to non-controlling
interests (33 242) (2 308)
Acquisition of interest in
a subsidiary (12 294) (8 185)
Net cash generated from/(used in)
financing activities 164 532 (31 380)
Net increase in cash and
cash equivalents 66 040 32 689
Cash and cash equivalents at
the beginning of the year 871 260 835 685
Effects of exchange rates on
cash and cash equivalents (25) 2 886
Cash and cash equivalents at
the end of the year 937 275 871 260
Group segmental analysis
Road
surfacing
and Road
rehabili- construction
Materials tation and earthworks
R'000 R'000 R'000
Reportable segments
28 February 2015
Segment revenue 1 961 342 2 568 538 1 463 953
Segment result (operating profit) 323 640 192 462 55 169
Margin 16,5% 7,5% 3,8%
28 February 2014
Segment revenue 1 624 577 2 505 115 1 179 805
Segment result (operating profit) 259 152 209 260 40 026
Margin 16,0% 8,4% 3,4%
Group segmental analysis
Infra- Consoli-
structure Tosas dated
R'000 R'000 R'000
Reportable segments
28 February 2015
Segment revenue 862 660 388 766 7 245 259
Segment result (operating profit) 39 649 11 251 622 171
Margin 4,6% 2,9% 8,6%
28 February 2014
Segment revenue 730 759 284 756 6 325 012
Segment result (operating profit) 36 966 (5 529) 539 875
Margin 5,1% (1,9%) 8,5%
Local Interna- Consoli-
tional dated
R'000 R'000 R'000
Geographical information
28 February 2015
Segment revenue 6 606 290 638 969 7 245 259
Segment result (operating profit) 538 722 83 449 622 171
Margin 8,2% 13,1% 8,6%
28 February 2014
Segment revenue 5 890 468 434 544 6 325 012
Segment result (operating profit) 459 116 80 759 539 875
Margin 7,8% 18,6% 8,5%
Additional information
Employee benefit expense
Audited Audited
12 months 12 months
28 February 28 February
2015 2014
R'000 R'000
Employee benefit expense in the
income statement consists of:
Salaries, wages and contributions 1 648 079 1 436 923
Share options granted to
employees 27 797 27 354
Total employee benefit expense 1 675 876 1 464 277
Capital expenditure and depreciation
Audited Audited
12 months 12 months
28 February 28 February
2015 2014
R'000 R'000
Capital expenditure for the year 510 599 483 299
Depreciation for the year 334 997 282 968
Amortisation of intangible assets
for the year 280 280
NOTES
Basis of preparation
The summary consolidated financial statements are prepared in accordance with the requirements
of the JSE Limited Listings Requirements for abridged reports, and the requirements of the
Companies Act applicable to summary financial statements. The Listings Requirements require
abridged 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 the 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 consolidated financial statements from which the summary
consolidated 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.
These summary consolidated financial statements for the year ended 28 February 2015 have been
prepared under the supervision of the Financial Director, Mr JF Gibson CA(SA) and audited by
PricewaterhouseCoopers Inc., who expressed an unmodified opinion thereon. The auditor also
expressed an unmodified opinion on the annual financial statements from which these summary
consolidated financial statements were derived. A copy of the auditor's report on the summary
consolidated financial statements and of the auditor's report on the annual consolidated financial
statements are available for inspection at the Company's registered office.
The auditor's report does not necessarily report on all of the information contained in this
announcement. Any reference to pro forma or future financial information included in this
announcement has not been reviewed or reported on by the auditors. Shareholders are advised that
in order to obtain a full understanding of the nature of the auditors' engagement they should obtain
a copy of that report together with the accompanying financial information from the Company's
registered office.
Business combinations
Shisalanga Construction (Pty) Ltd ("Shisalanga")
On 1 June 2014 the Group acquired 60% of the issued share capital and obtained control of Shisalanga
for a purchase price of R38,4 million settled in cash. Shisalanga manufactures a range of asphalt
products from its plants based in Northern KwaZulu-Natal.
The revenue included in the consolidated income statement since 1 June 2014 contributed by Shisalanga
was R101,7 million with a net profit contribution of R7,0 million over the same period. Had Shisalanga
been consolidated from 1 March 2014 the consolidated income statement would show pro forma revenue of
R123,1 million and net profit of R4,3 million.
OMV Stilfontein (Pty) Ltd and OMV Gypsum Potchefstroom (Pty) Ltd ("OMV")
On 1 July 2014 the Group acquired a 70% interest in OMV's aggregate crushing and ready-mix concrete
operations situated near Stilfontein and a 70% interest in OMV's gypsum operations situated near
Potchefstroom in the North West province for a purchase price of R70,3 million settled in cash.
An additional contingent consideration is payable dependent on future earnings and a put option
has been written on the remaining 30% in favour of the non-controlling interest. The contingent
consideration liability has been valued at R18,9 million and the put option liability at R48,5 million.
The revenue included in the consolidated income statement since 1 July 2014 contributed by OMV was
R89,2 million with a net profit contribution of R9,2 million over the same period. Had OMV been
consolidated from 1 March 2014 the consolidated income statement would show pro forma revenue of
R147,1 million and net profit of R12,4 million.
Buildmax Aggregates and Quarries (Pty) Ltd ("BAQ")
On 1 September 2014 the Group acquired certain business operations and assets from BAQ for a
purchase price of R59,7 million in cash. The business combination acquired comprises the sand
quarry operations of Crushco Quarry and Alpha Sand Quarry and the aggregate crushing operations
of Aflease. These operations will give the Group a more diversified product range in the form
of building and plaster sand to add to its existing range of aggregates and are located in
the Gauteng province.
The revenue included in the consolidated income statement since 1 September 2014 contributed by
BAQ was R53,3 million with a net profit contribution of R6,2 million over the same period. Had
BAQ been consolidated from 1 March 2014 the consolidated income statement would show pro forma
revenue of R98,9 million and net profit of R13,5 million.
Prodev Plant Hire (Pty) Ltd ("Prodev")
On 1 September 2014 Burma Plant Hire (Pty) Ltd acquired 100% of the issued share capital of
Prodev for R31 million cash. Prodev is a plant hire company operating in Namibia and the
acquisition of this business will increase the Group's presence in Namibia.
The revenue included in the consolidated income statement since 1 September 2014 contributed
by Prodev was R22,9 million with a net profit contribution of R4,9 million over the same period.
Had Prodev been consolidated from 1 March 2014 the consolidated income statement would show
pro forma revenue of R38,1 million and net profit of R10,0 million.
Empa Structures CC and Empa Plant CC ("Empa")
On 1 November 2014 the Group acquired a 70% interest in Empa for R25,5 million cash. The company
specialises in the construction of concrete structures with its main focus on construction of
water treatment plants, waste water treatment plants, reservoirs and bridges.
The revenue included in the consolidated income statement since 1 November 2014 contributed
by Empa was R48,0 million with a net profit contribution of R1,1 million over the same period.
Had Empa been consolidated from 1 March 2014 the consolidated income statement would show
pro forma revenue of R152,6 million and net profit of R1,1 million.
Details of the net assets acquired, purchase consideration and goodwill are set out below:
Shisa OMV BAQ
R'000 R'000 R'000
Consideration
Cash 38 400 70 284 59 695
Contingent consideration (fair
value) - 18 874 -
Total consideration 38 400 89 158 59 695
Recognised amounts of
identifiable assets acquired and
liabilities assumed
Property, plant and equipment 34 070 35 159 54 761
Deferred tax asset 3 420 - 3 756
Non-current inventories - 95 184 -
Inventories 762 11 253 4 934
Construction contracts in progress 990 - -
Trade and other receivables 34 765 22 195 3 764
Current income tax receivable 490 - -
Cash and cash equivalents 8 209 5 549 -
Borrowings (28 739) (4 484) -
Provision for liabilities and charges - - (13 415)
Deferred tax liability (5 025) (37 378) -
Current income tax liability - - -
Trade and other payables (7 430) (10 824) -
Total identifiable net assets 41 512 116 654 53 800
Non-controlling interest (16 605) (34 996) -
Goodwill attributable to owners of
the parent 13 493 7 500 5 895
Goodwill attributable to
non-controlling interests - - -
Total 38 400 89 158 59 695
Purchased consideration settled in
cash 38 400 70 284 59 695
Less: Cash and cash equivalents (8 209) (5 549) -
Cash outflow on acquisition for
cash flow statement 30 191 64 735 59 695
Prodev Empa Total
R'000 R'000 R'000
Consideration
Cash 31 000 25 490 224 869
Contingent consideration (fair
value) - 2 136 21 010
Total consideration 31 000 27 626 245 879
Recognised amounts of
identifiable assets acquired and
liabilities assumed
Property, plant and equipment 31 000 29 680 184 670
Deferred tax asset - 1 372 8 548
Non-current inventories - - 95 184
Inventories - 1 612 18 561
Construction contracts in progress - 12 026 13 016
Trade and other receivables - 25 701 86 425
Current income tax receivable - - 490
Cash and cash equivalents - 8 626 22 384
Borrowings - (7 972) (41 195)
Provision for liabilities and charges - - (13 415)
Deferred tax liability (3 999) (6 214) (52 616)
Current income tax liability - (1 671) (1 671)
Trade and other payables - (26 578) (44 832)
Total identifiable net assets 27 001 36 582 275 549
Non-controlling interest - (10 975) (62 576)
Goodwill attributable to owners of
the parent 2 799 2 019 31 706
Goodwill attributable to
non-controlling interests 1 200 - 1 200
Total 31 000 27 626 245 879
Purchased consideration settled in
cash 31 000 25 490 224 869
Less: Cash and cash equivalents - (8 626) (22 384)
Cash outflow on acquisition for
cash flow statement 31 000 16 864 202 485
Events after the reporting period
Belabela Quarries (Pty) Ltd
On 18 April 2015 the Group effectively acquired 74% of Belabela Quarries (Pty) Ltd ("Belabela"),
through its subsidiary Loop en Hoop (Pty) Ltd for a purchase price of R43 million to be settled
in cash. Belabela is a commercial quarry operating on the outskirts of Gaborone in Botswana.
The acquisition will give the Group a base from which it can expand and further develop its
operating model in Botswana.
Buildmax Aggregates and Quarries (Pty) Ltd
On 10 March 2015 the Group acquired certain mining rights and properties for an aggregate
sum of R37 million in cash from the former owners of the businesses of Buildmax Aggregates
and Quarries (Pty) Ltd.
COMMENTARY
Financial overview
Revenue increased 14,5% to R7,25 billion and operating profit increased by 15,2% to R622,2 million
from the corresponding prior year. These results were supported by positive contributions from
acquisitions concluded during the year and a strong performance from the Group's materials division
which contributed 52,0% to total operating profit. The road construction divisions experienced a
stable but challenging year due to persistent competitive pressures in this sector.
Profit before tax increased 13,5% to R606,6 million (2014: R534,5 million) with the effective tax
rate increasing to 29,4% from 29,0%.
Earnings per share increased 11,6% to 213,4 cents with headline earnings per share increasing
11,8% to 209,1 cents.
Group operating profit margin remained flat at 8,6% (2014: 8,5%).
Cash generated from operations increased 4,5% to R785,1 million (2014: R751,4 million) before
finance charges and taxation.
Net finance costs increased to R15,7 million (2014: R5,4 million) due to increased borrowings
and non-cash finance costs of R2,7 million relating to the unwinding of discount in the valuation
of the contingent consideration and put option granted to the sellers of OMV. Total non-cash
finance costs amounted to R4,4 million for the year.
Trade and other receivables increased by 29,5% to R1,38 billion due mainly to the acquisitions
concluded during the year and also the inclusion of plant accounted for as receivables under
finance leases.
Inventories increased by 25,9% to R529,0 million due mainly to the inclusion of the mine dumps
at Stilfontein and the gypsum dump at Potchefstroom on the acquisition of OMV. The value of
bitumen stock on hand decreased due to the lower bitumen price which tracks international fuel
oil prices.
Borrowings increased 53,3% to R1,10 billion (2014: R717,6 million) due mainly to the financing
of plant and equipment for the Tschudi copper mine project in Namibia and also the Buildmax and
Prodev assets acquired.
Capital expenditure on property, plant and equipment increased 5,6% to R510,6 million
(2014: R483,3 million).
The Group's net cash inflow for the year was R66,0 million. Total cash and cash equivalents at
the end of the year increased 7,6% to R937,3 million (2014: R871,3 million).
Operational overview
Materials
The materials division, which includes the Raumix operations, comprises three main disciplines
including commercial quarries, contract crushing and materials handling and processing for the
mining industry.
The division delivered a strong organic performance for the year and also successfully bedded
down the acquisitions of OMV crushers and the Buildmax Aggregates quarries, which contributed
positively to earnings. The commercial quarries reported solid results for the year with healthy
demand experienced from the residential and commercial building markets as well as infrastructure
projects. Conditions also favoured the mining and material handling operations where good results
were reported despite being affected by a three-week strike at the Namdeb operations in Namibia,
which was successfully resolved before year end. In line with the South African construction sector,
contract crushing operations have been operating under competitive conditions and were negatively
affected in Mozambique by a one-month production loss due to flooding in the northern region of
the country.
Revenue for the division increased 20,7% to R1,96 billion (2014: R1,62 billion) and operating profit
increased by 24,9% to R323,6 million (2014: R259,2 million).
The divisional operating profit margins increased to 16,5% (2014: 16,0%).
The division incurred capital expenditure of R358,3 million during the year (2014: R320,3 million).
The division has a secured order book of R1,86 billion (2014: R1,67 billion).
Road surfacing and rehabilitation
This division specialises in the manufacturing and laying of asphalt, chip and spray, surface
dressing, enrichments and slurry seals.
The division delivered a stable performance for the year in an operating environment that remains
very competitive. Increased competition in the asphalt market and a lower volume of work awarded
in the KwaZulu-Natal provincial market made for particularly challenging conditions. However,
margins have stabilised at the current levels. The division has increased its order book which
includes contracts from SANRAL, the N3 Toll Concession and provincial work in the Western and
Eastern Cape. Asphalt margins improved slightly during the year supported by the acquisition of
Shisalanga Construction.
Revenue for the division increased 2,5% to R2,57 billion (2014: R2,51 billion) with operating
profit decreasing by 8,0% to R192,5 million (2014: R209,3 million).
The divisional operating profit margin decreased to 7,5% (2014: 8,4%).
The division incurred capital expenditure of R63,4 million during the year (2014: R85,5 million).
The division has a secured order book of R2,47 billion (2014: R1,78 billion).
Road construction and earthworks
This division is the road and civil infrastructure construction division focused on the key
areas of new road construction and heavy road rehabilitation.
The division delivered an improved performance for the year in an operating environment that
remains very competitive. Management has focused its attention on production monitoring and
driving efficiencies across the business units to ensure that the low margin work available
is executed profitably. The progress made on projects in Namibia and Zambia also supported
these results. The divisional order book grew significantly following the awards of significant
contracts from both SANRAL in South Africa and the Roads Development Agency in Zambia during
the year.
Revenue for the division increased 24,1% to R1,46 billion (2014: R1,18 billion) with operating
profit increasing 37,8% to R55,2 million (2014: R40,0 million).
The divisional operating profit margins increased to 3,8% (2014: 3,4%) with a marked improvement
in the last six months due to a number of lower margin contracts being substantially completed
in the first half.
The division incurred capital expenditure of R44,6 million during the year (2014: R51,2 million).
The division has a secured order book of R3,20 billion (2014: R2,07 billion) with R1,49 billion
relating to contracts in Zambia and Namibia.
Raubex Infrastructure
The infrastructure division specialises in disciplines outside of the road construction sector,
including energy (with a specific focus on renewable energy), rail, telecommunications, pipeline
construction and housing infrastructure projects.
The division has established its reputation in the market and is supported by a stable order book
of work mainly focused on civil construction works related to Eskom's Renewable Energy Independent
Power Producer Procurement Programme ("REIPPPP"), residential housing solutions, mine housing solutions
and water pipeline infrastructure. The division successfully completed work on two second round
photovoltaic ("PV") solar farms during the first half of the year but the delays experienced in
reaching financial closure on round 3 REIPPPP projects pushed the order book out into the new year
and impacted the second half performance. The acquisition of Empa Structures has been bedded down
and will strengthen the Group's own capacity to tender on projects that require specialist concrete
structure work.
Revenue for the division increased 18,0% to R862,7 million (2014: R730,8 million) and operating profit
increased 7,3% to R39,6 million (2014: R37,0 million).
The divisional operating profit margins decreased to 4,6% (2014: 5,1%).
The division incurred capital expenditure of R37,7 million (2014: R22,8 million).
The division has a secured order book of R1,01 billion (2014: R909,4 million).
Tosas
Tosas is a manufacturer and distributor of value added bituminous products used primarily for
road construction activities.
The company made good progress during the year and returned to profitability through a combination
of "right sizing" initiatives and increased volume through improved marketing and service delivery.
The modified bitumen industry is experiencing challenging trading conditions and margins pressure
as new entrants compete for market share. The Group has continued to realise synergies from this
acquisition through the efficient supply of bitumen on internal contracts.
Revenue for Tosas increased 36,5% to R388,8 million (2014: R284,8 million) with an operating
profit of R11,3 million from a loss of R5,5 million reported in the prior year. Total revenue
including internal supply to the Group amounted to R696,1 million (2014: R411,5 million).
Tosas has secured an external order book of R129,4 million (2014: R127,2 million).
Tosas incurred capital expenditure of R6,6 million (2014: R3,5 million).
International
The Group's international operations ("Africa") reported stable results for the year supported
by the Namibian operations where work on the upgrading of the road from Rosh Pinah to Oranjemund
is under way as well as various material handling contracts across the country. Material handling
operations were adversely affected in the second half of the year by a three-week strike at the
Namdeb operations in Namibia, while flooding in Northern Mozambique affected contract crushing
operations. In Zambia work commenced on two Link 8000 contracts with activities limited to site
establishment, planning and minor works. Major construction works in Zambia are set to commence
in the year ahead.
Internationally, revenue increased 47,0% to R639,0 million (2014: R434,5 million) and operating
profit increased by 3,3% to R83,4 million (2014: R80,8 million).
Operating profit margins decreased to 13,1% (2014: 18,6%) due mainly to the Rosh Pinah to
Oranjemund contract being at lower margin, more in line with the South African road
construction market. The strike in Namibia and flooding in Mozambique put pressure
on the materials division margins.
Prospects
The Group has grown its order book by 32,5% to R8,68 billion (2014: R6,55 billion) with 25,4%
of the order book now representing contracts in Africa. With a healthy short-term order book
secured, the Group will now focus on effective execution of current contracts and selective
tendering for replacement work.
A number of earnings enhancing acquisitions were bedded down during the year and the Group
will continue to look for acquisitions in the materials sector in the year ahead. In line
with this strategy, the Group acquired the Belabela quarry in Gaborone, Botswana on
18 April 2015. This acquisition will give the Group a platform for expansion in the
Botswana market.
Whilst mindful of the constant risks associated with industrial action in South Africa and
the effect of commodity prices on the mining industry, the Group expects healthy operating
conditions to continue in the materials sector.
Raubex's drive to diversify the Group's revenue streams over the past few years has resulted
in the materials division now contributing over 50% of the Group's total earnings and the
successful development of the infrastructure division. This, together with the higher margin
work secured in Zambia, positions the Group well to navigate the challenging conditions in the
South African construction market and deliver growth in the year ahead.
Dividend declaration
The directors have declared a gross final cash dividend from income reserves of 36 cents per
share on 11 May 2015 for the year ended 28 February 2015. The salient dates for the payment
of the dividend are as follows:
Last day to trade cum dividend Friday, 29 May 2015
Commence trading ex dividend Monday, 1 June 2015
Record date Friday, 5 June 2015
Payment date Monday, 8 June 2015
No share certificates may be dematerialised or rematerialised between Monday, 1 June 2015
and Friday, 5 June 2015, both dates inclusive.
In terms of Dividends Tax ("DT"), the following additional information is disclosed:
- The local DT rate is 15%.
- The number of ordinary shares in issue at the date of this declaration is 187 330 165.
- The dividend to utilise for determining the DT due is 36 cents per share.
- The DT amounts to 5,40 cents per share.
- The net local dividend amount is 30,60 cents per share for shareholders liable to pay the DT.
- Raubex Group Limited's income tax reference number is 9370/905/151.
In terms of the DT legislation, the DT amount due will be withheld and paid over to the South
African Revenue Service by a nominee company, stockbroker or Central Security Depository Participant
(collectively "Regulated Intermediary") on behalf of shareholders. All shareholders should declare
their status to their Regulated Intermediary, as they may qualify for a reduced DT rate or exemption.
On behalf of the Board:
JE Raubenheimer
Chairman
RJ Fourie
Chief Executive Officer
JF Gibson
Financial Director
11 May 2015
Directors
JE Raubenheimer#
RJ Fourie
JF Gibson
F Kenney#
LA Maxwell*
BH Kent*
NF Msiza*
# Non-executive
* Independent non-executive
Company secretary
Mrs HE Ernst
Registered office
The Highgrove Office Park
Building No 1
Tegel Avenue
Centurion
South Africa
Transfer secretaries
Computershare Investor Services (Pty) Ltd
70 Marshall Street
Johannesburg
2001
South Africa
Auditors
PricewaterhouseCoopers Inc.
Sponsor
Investec Bank Limited
www.raubex.com
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