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Summarised audited annual financial statements for the year ended 28 February 2015 and dividend announcement
CARGO CARRIERS LIMITED
(Registration Number 1959/003254/06)
Share code: CRG
ISIN: ZAE000001764
("CRG" or "the Company")
Summarised audited annual financial statements for the year ended 28 February 2015 and dividend
announcement
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2015 2014
R’000 R’000
Turnover 909,699 911,375
Other income 3,728 3,707
Revenue 913,427 915,082
Operating and administration costs (573,561) (561,502)
Employment costs (214,076) (221,916)
Depreciation of property, plant and equipment (69,588) (73,856)
Profit from operating activities 56,202 57,808
(Loss)/profit on disposal of property, plant and equipment (518) 6,334
Impairment of assets (2,469) (10,554)
Revaluation of investment properties 1,265 8,576
Dividend income - 1,137
Profits from associates and joint ventures 2,920 3,218
Profit before finance income and finance cost 57,400 66,519
Finance income 6,378 6,472
Finance cost (18,351) (23,162)
Profit before tax 45,427 49,829
Taxation (15,501) (3,759)
Profit for the year 29,926 46,070
Other comprehensive income:
Items not to be reclassified to profit or loss in subsequent periods:
Revaluation of owner occupied properties 6,052 4,333
Income tax effect (783) (770)
Income tax effect of property adjustments - (1,774)
Change in estimated base cost for CGT purposes - 2,857
Other comprehensive income to be reclassified to profit or loss in
subsequent periods:
Exchange differences on translation of foreign operations (1,615) 3,601
Other comprehensive income for the year, net of tax 3,654 8,247
Total comprehensive income for the year, net of tax 33,580 54,317
Total comprehensive income, net of tax attributable to:
Equity holders of the parent 32,065 53,729
Non-controlling interest 1,515 588
Total comprehensive income for the year, net of tax 33,580 54,317
Profit for the year attributable to:
Equity holders of the parent 28,411 45,482
Non-controlling interest 1,515 588
29,926 46,070
FINANCIAL INFORMATION
Dividend per share (cents)
- interim dividend declared during the year 6.0 15.0
- final dividend declared after year end 20.0 40.0
Total dividends 26.0 55.0
Basic and diluted earnings per share (cents) 146.4 234.4
Adjustments (cents):
Loss/(profit) on disposal of property, plant and equipment 1.9 (23.5)
Impairment of assets 12.7 54.4
Revaluation of investment properties (5.9) (36.0)
Basic and diluted headline earnings per share (cents) 155.1 229.3
Group borrowings
Borrowing capacity of the Group (R'000) 229,814 217,524
Borrowing capacity utilized (R'000) 40,104 99,766
Borrowing capacity utilized (%) 17.5% 45.9%
Capital commitments (R'000) - -
Net asset value per share (cents) 2,279 2,166
Ordinary shares in issue (closing and weighted average) (000) 19,406 19,406
SEGMENTAL ANALYSIS
2015 2014
R’000 R’000
Revenue
Industrial 796,616 761,630
Agricultural 74,770 113,529
Aviation 3,193 3,242
Supply chain services 35,681 33,212
Property 3,167 3,469
913,427 915,082
Profit before finance income and finance cost
Industrial 55,174 57,985
Agricultural 157 (9,847)
Aviation 1,020 3,671
Supply chain services (3,375) (2,629)
Property 4,424 17,339
57,400 66,519
Non-current assets (excluding deferred tax)
Industrial 319,822 370,826
Agricultural 45,186 45,499
Aviation 11,733 12,139
Supply chain services 1,339 1,214
Property 130,451 109,640
508,531 539,318
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2015 2014
R’000 R’000
ASSETS
Non-current assets
Property, plant and equipment 448,146 487,092
Investment properties 25,735 24,470
Investment in associates 26,778 22,953
Investment in joint ventures 7,872 4,803
Deferred taxation 15,296 18,481
523,827 557,799
Current assets
Trade and other receivables 167,948 150,190
Inventories 15,230 16,989
Cash and short-term deposits 134,412 116,341
317,590 283,520
Non- current assets held for sale 20,799 11,702
Total Assets 862,216 853,021
EQUITY AND LIABILITIES
Equity
Share capital 194 194
Non-distributable reserves 56,547 51,796
Distributable reserves 385,332 368,212
Equity attributable to equity holders of the parent 442,073 420,202
Non-controlling interest 17,555 14,846
Total Equity 459,628 435,048
Non-current liabilities
Deferred taxation 95,232 98,954
Contingent consideration 3,010 5,721
Provisions 3,881 2,781
Interest bearing loans and borrowings 93,713 107,019
195,836 214,475
Current liabilities
Trade and other payables 118,741 92,309
Interest bearing loans and borrowings 80,803 109,088
Taxation 7,208 2,101
206,752 203,498
Total Equity and Liabilities 862,216 853,021
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity
Foreign attributable
Asset currency Distributabl to equity Non-
Share revaluation translation Other e holders of controlling Total
capital reserve* reserve* reserves* reserves the parent interest equity
Balance at 1 March 2013 194 60,049 6,196 50 306,777 373,266 16,493 389,759
Total comprehensive income - 4,646 3,601 - 45,482 53,729 588 54,317
- Profit for the year - - - - 45,482 45,482 588 46,070
- Other comprehensive income - 4,646 3,601 - - 8,247 - 8,247
Disposal of assets and transfer
between reserves - (20,878) (6,291) - 27,169 - - -
Exchange differences realised on
dissolution of foreign subsidiary - - (2,641) - 2,641 - - -
Post tax transfer of revaluation of
investment properties - 7,064 - - (7,064) - - -
Dividends paid - - - - (6,793) (6,793) (2,235) (9,028)
Balance at 28 February 2014 194 50,881 865 50 368,212 420,202 14,846 435,048
Total comprehensive income - 5,269 (1,615) - 28,411 32,065 1,515 33,580
- Profit for the year - - - - 28,411 28,411 1,515 29,926
- Other comprehensive income - 5,269 (1,615) - - 3,654 - 3,654
Transfer between reserves - (50) 50 - - -
Dissolution of foreign subsidiary - - - - (73) (73) - (73)
Purchase of negative equity from
non-controlling interest - - - - (1,194) (1,194) 1,194 -
Post tax transfer of revaluation of
investment properties - 1 147 - - (1,147) - - -
Dividends paid - - - - (8,927) (8,927) - (8,927)
Balance at 28 February 2015 194 57,297 (750) - 385,332 442,073 17,555 459,628
* represents non-distributable reserves
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
2015 2014
R’000 R’000
Cash receipts from customers 891,901 897,634
Cash paid to suppliers and employees (746,777) (792,244)
Cash generated by operations 145,124 105,390
Finance income 6,378 6,472
Finance cost (18,351) (23,162)
Dividends paid (8,927) (9,028)
Dividend income - 1,137
Tax paid (10,254) (4,085)
Cash flows from operating activities 113,970 76,724
Cash flows from financing activities (41,591) (50,091)
Cash flows from investing activities (51,252) 5,047
Payment of contingent consideration (3,251) (1,437)
Movement in loan to associates and joint ventures (3,974) 57
Purchase of property, plant and equipment (53,269) (64,133)
Proceeds from sale of property, plant and equipment 9,242 70,560
Increase in cash and cash equivalents 21,127 31,680
Cash and cash equivalents at the beginning of the year 116,341 84,780
Foreign exchange movement during the year (3,056) (119)
Cash and cash equivalents at the end of the year 134,412 116,341
Review
The Group remained resilient through the tough trading conditions such as strike action,
labour unrest and the depreciation of the South African Rand and related African currencies
against the US dollar, producing a satisfactory set of results.
The Group's turnover remained fairly constant while profit from operating activities declined
moderately by 2.8%. The industrial segment revenue increased 4.6%, however, this did not
translate into operating profits which were affected by exchange losses incurred by our
Zambian subsidiary. The agricultural segment revenue declined 34.1% while its operating
profits increased 101.6%, largely influenced by the disposal and exit from its underperforming
Malelane and tomato harvesting business. The property segment profits show a 74.5%
decline, due to the prior year being influenced by a high profit from the sale of the Alrode
property and a higher revaluation surplus.
Net finance costs decreased 28.3% to R11.9 million, benefitting from the 20.8% reduction in
finance costs relating to instalment sales agreement approaching settlement maturity.
Finance income decreased 1.5% due to the low-interest bearing US dollar accounts which
constitute R47.6 million of the cash and short term deposits at year end.
Diluted earnings and headline earnings per share decreased 37.5% and 32.4% respectively,
largely affected by a more normalised tax charge of 34.1% (2014: 7.5%). The prior year tax
benefitted from a reduction in the deferred tax provision related to capital gains tax base
cost re-assessments. The reduction in earnings has correspondingly reduced the final
dividend payable to 20.0 cents per share.
Prospects
A low economic growth outlook combined with difficult market conditions is expected to
place current trading and profitability levels under strain. The debt to equity ratio has
decreased to a conservative 8.7%, placing the Group in an ideal position to pursue its organic
and acquisitive growth objectives. The year ahead is expected to be challenging, however,
the Group intends to remain steadfast and continue to enhance stakeholder value.
Basis of preparation
The condensed consolidated financial statements for the year ended 28 February 2015 have
been prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards ("IFRS"), IAS 34: Interim Financial Reporting, the
Listings Requirements of the Johannesburg Stock Exchange and the requirements of the
Companies Act, 2008 (No. 71 of 2008). These condensed consolidated financial statements
do not include all the information and disclosures required in the annual financial statements,
and should be read in conjunction with the Group’s annual financial statements as at 28
February 2015 which is expected to be available to shareholders towards the end of May
2015. The annual financial statements were compiled under the supervision of the Chief
Financial Officer, Mr S Maharaj CA(SA)/HDipTax.
The accounting policies are consistent in all material respects with that of the prior financial
period, except for the following amendments to IFRS: IFRS 10 Consolidated Financial
Statements (Investment entities); IAS 32 Financial Instruments: Presentation (Right to off-set);
IAS 36 Impairment of Assets (Disclosure of Recoverable amount); IAS 39 Financial Instruments:
Recognition and Measurement (Novation of derivatives); IFRIC 21 Levies (New Standard).
None of which significantly impacted the financials of the Group.
Fair values of financial instruments
The fair value measurement of level 2 financial instruments have been determined in
accordance with appropriate valuation techniques, including recent market transaction and
other valuation models. Significant inputs include market yield curves and exchange rates.
There is no difference between the fair value and carrying value of financial assets and
liabilities not presented below due to either the short-term nature of these items, or the fact
that they are priced at variable interest rates.
The following table provides the fair value measurement hierarchy of the Group's assets and
liabilities:
GROUP
Fair value 2015 2014
measurement R’000 R’000
Non-current assets
Property, plant and equipment Level 2 448,146 487,092
Investment properties Level 2 25,735 24,470
Non- current assets held for sale Level 2 20,799 11,702
Non-current liabilities
Contingent consideration Level 3 3,010 5,721
Interest bearing loans and borrowings Level 2 93,713 107,019
There have been no transfers between Level 2 and Level 3 during the period. The movement
in the contingent liability is mainly a result of fair value adjustments and the payment
reflected in the cash-flow.
Independent Auditor's Report
The annual financial statements have been audited by Ernst & Young Inc. and their
unqualified audit opinion is available on request from the company secretary or at Cargo
Carriers Limited's registered office. This summarised report is extracted from the audited
information, but is not itself audited. The directors take full responsibility for the preparation of
this provisional report and are satisfied that the financial information has been correctly
extracted from the underlying annual financial statements. The Group's integrated annual
report will be available by the end of May 2015.
Dividend Declaration
Notice is hereby given that a gross final cash dividend (Number 48) of 20.0 cents per share
(2014: 40.0 cents) has been declared for the year ended 28 February 2015. The dividend has
been declared out of income reserves. The dividend will be subject to a dividend
withholding tax rate of 15% or 3.0 cents per ordinary share. As no STC credits are available for
utilisation, shareholders, unless exempt or qualifying for a reduced withholding tax rate, will
receive a net dividend of 17.0 cents per share.
Cargo Carriers tax reference number is 9900156713 and the number of ordinary shares in issue
at the declaration date is 20 000 000.
The salient dates for the dividend will be as follows:
Last date to trade ‘cum’ dividend Friday, 5 June 2015
Shares commence trading ‘ex’ the dividend Monday, 8 June 2015
Record date (date shareholders recorded in share
Friday, 12 June 2015
register)
Payment date Monday, 15 June 2015
Share certificates may not be dematerialised or rematerialised between Monday, 8 June
2015 and Friday, 12 June 2015 both dates inclusive.
Events after the reporting period
The Company accepted an offer before year-end to sell its majority shareholding in a foreign
subsidiary to the minority shareholder. The suspensive conditions in the offer were not met by
the buyer after year-end and as a result the sale was not concluded at the issue date of
these financial statements. The results of this foreign subsidiary for the year ended 28 February
2015 is included in the Industrial sector in the segment report in note 26. The transaction was
not treated as a discontinued operation in the annual financial statements, as the probability
of the transaction being concluded per the initial suspensive conditions was not assessed as
highly probable.
A letter of intent for the purchase of the Companies minority shareholding in a South African
associate company was received after year end from the majority shareholder. It is
expected that the sale transaction will be concluded during the next financial year. The
financial results of the associate are presented under the Agricultural sector in the segment
report in note 26.
Appointment of Independent Non-executive director
Mr Vincent Raseroka was appointed as an independent non-executive director and member
of the remuneration, nominations and audit and risk committee with effect from 18 July 2014.
By order of the board
19 May 2015
Board of Directors
SP Mzimela* (Chairperson), A E Franklin*, B B Fraser#, M J Vuso*
V Raseroka*, G D Bolton (Executive), M J Bolton (CEO), S Maharaj (CFO)
# non-executive director
* independent non-executive director
Registered Office
11A Grace Road, Mountainview,
Observatory, Johannesburg 2198
Share transfer secretaries
Computershare Investor Services Proprietary Limited
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Company Secretary
Arbor Capital Company Secretarial Proprietary Limited
Sponsor
Arbor Capital Sponsors Proprietary Limited
Website
www.cargocarriers.co.za
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