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Summarised unaudited interim financial statements for the period ended 31 August 2015 and Dividend Announcement
Cargo Carriers Limited
Registration number: 1959/003254/06
Incorporated in the Republic of South Africa
("Cargo Carriers" or “the Group”)
JSE Share code: CRG
ISIN Code: ZAE000001764
SUMMARISED UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 AUGUST 2015 AND DIVIDEND
ANNOUNCEMENT
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
R'000 31 August 2015 31 August 2014 28 February
2015
Turnover 417,578 438,484 909,699
Other income 1,640 2,098 3,728
Revenue 419,218 440,582 913,427
Operating and administration costs (259,546) (274,386) (573,561)
Employment costs (110,593) (107,431) (214,076)
Depreciation of property, plant and
equipment (30,882) (32,597) (69,588)
Profit from operating activities 18,197 26,168 56,202
Profit on disposal of property, plant and
equipment 6,938 454 (518)
Impairment of assets (1,804) (28) (2,469)
Revaluation of investment properties - - 1,265
Share of profits from associates and joint
ventures 2,568 806 2,920
Profit before finance income and finance
cost 25,899 27,400 57,400
Finance income 3,568 3,360 6,378
Finance costs (7,431) (9,440) (18,351)
Profit before tax 22,036 21,320 45,427
Income tax expense (4,025) (5,470) (15,501)
Profit for the period 18,011 15,850 29,926
Other comprehensive income:
Items not to be reclassified to profit or loss
in subsequent periods:
Revaluation of owner occupied properties - - 6,052
Income tax effect - - (783)
Other comprehensive income to be
reclassified to profit or loss in subsequent
periods:
Exchange differences on translation of
foreign operations (2,173) (628) (1,615)
Other comprehensive income, net of tax (2,173) (628) 3,654
Total comprehensive income, net of tax 15,838 15,222 33,580
Profit for the period attributable to:
Equity holders of the parent 21,237 14,946 28,411
Non-controlling interest (3,226) 904 1,515
18,011 15,850 29,926
Total comprehensive income, net of tax
attributable to:
Equity holders of the parent 19,064 14,318 32,065
Non-controlling interest (3,226) 904 1,515
15,838 15,222 33,580
FINANCIAL INFORMATION
Dividend per share (cents)
- paid during the period 20.0 40.0 6.0
- declared after the period end 8.0 6.0 20.0
Total dividends 28.0 46.0 26.0
Basic and diluted earnings per share
(cents) 109.4 77.0 146.4
Adjustments (cents):
Profit on disposal of property, plant and
equipment (25.7) (1.7) 1.9
Impairment of assets 9.3 0.1 12.7
Revaluation of investment properties - - (5.9)
Basic and diluted headline earnings per
share (cents) 93.0 75.4 155.1
Group borrowings
Borrowing capacity of the Group (R'000) 235,793 221,254 229,814
Borrowing capacity utilised (R'000) 52,745 101,076 40,104
Borrowing capacity utilised (%) 22.4 45.7 17.5
Capital commitments (R'000) 3,316 - -
Net asset value per share (cents) 2,356 2,193 2,279
Ordinary shares in issue (closing and
weighted average) ('000) 19,406 19,406 19,406
SEGMENTAL ANALYSIS
Revenue
Industrial 365,373 377,135 796,616
Agriculture 38,112 42,110 74,770
Aviation 631 1,980 3,193
Supply chain services 13,445 17,795 35,681
Property 1,657 1,562 3,167
Total revenue 419,218 440,582 913,427
Profit before finance income and finance
cost
Industrial 12,597 26,493 55,174
Agriculture 8,276 (494) 157
Aviation 2,770 1,158 1,020
Supply chain services (1,343) (852) (3,375)
Property 3,239 1,095 4,424
Total profit before finance income and
finance cost 25,899 27,400 57,400
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited
Unaudited Unaudited 28 February
R'000 31 August 2015 31 August 2014 2015
Assets
Non-current assets
Property, plant and equipment 434,094 495,226 448,146
Investment properties 25,735 24,470 25,735
Investment in associates 29,220 32,605 26,778
Investment in joint ventures 8,796 8,127 7,872
Deferred taxation 16,298 20,925 15,296
514,143 581,353 523,827
Current assets
Inventories 16,946 16,020 15,230
Trade and other receivables 194,560 166,203 167,948
Cash and short-term deposits 119,832 106,924 134,412
331,338 289,147 317,590
Non- current assets held for sale 18,470 10,639 20,799
Total assets 863,951 881,139 862,216
Equity and Liabilities
Equity attributable to owners of the parent
Share capital 194 194 194
Non-distributable reserves 54,374 51,168 56,547
Distributable reserves 402,688 374,201 385,332
Equity attributable to equity holders of the
parent 457,256 425,563 442,073
Non-controlling interest 14,329 16,944 17,555
Total equity 471,585 442,507 459,628
Non-current liabilities
Deferred taxation 89,369 101,450 95,232
Contingent consideration 3,583 2,655 3,010
Provisions 4,717 3,891 3,881
Interest bearing loans and borrowings 89,810 120,933 93,713
187,479 228,929 195,836
Current liabilities
Trade and other payables 103,092 110,363 109,751
Provisions 8,928 9,818 8,990
Interest bearing loans and borrowings 82,767 87,067 80,803
Taxation 10,100 2,455 7,208
204,887 209,703 206,752
Total equity and liabilities 863,951 881,139 862,216
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
31 August 2015 31 August 2014 28 February
2015
Cash receipts from customers 399,004 409,397 891,901
Cash paid to suppliers and employees (366,916) (332,026) (746,777)
Cash generated by operations 32,088 77,371 145,124
Finance income 3,568 3,360 6,378
Finance costs (7,431) (9,440) (18,351)
Dividends paid (3,881) (7,763) (8,927)
Dividend income - - -
Tax paid (6,868) (4,648) (10,254)
Cash flows from operating activities 17,476 58,880 113,970
Cash flows from financing activities (10,819) (8,791) (41,591)
Cash flows from investing activities (18,561) (58,355) (51,252)
Increase in loans to joint ventures (800) (12,171) (3,974)
Payment of contingent consideration - (3,251) (3,251)
Purchase of property, plant and
equipment (39,204) (45,029) (53,269)
Proceeds from sale of property, plant and
equipment 21,443 2,096 9,242
(Decrease)/increase in cash and cash
equivalents (11,904) (8,266) 21,127
Cash at the beginning of the period 134,412 116,341 116,341
Foreign exchange movement on cash
balances (2,676) (1,151) (3,056)
Cash and cash equivalents at the end of
the period 119,832 106,924 134,412
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity
Foreign attributable
Asset currency to equity Non-
Share Revaluation Distributable translation Other holders of controlling Total
capital reserve* reserves reserve* reserves* the parent interest equity
Balance at 31 August 2014 194 50,881 374,201 237 50 425,563 16,944 442,507
Total comprehensive
income - 5,269 13,465 (987) - 17,747 611 18,358
- Profit for the period - - 13,465 - - 13,465 611 14,076
- Other comprehensive
income - 5,269 - (987) - 4,282 - 4,282
Purchase of non-controlling
interest (73) (73) - (73)
Transfer between reserves - 50 - (50) - -
Post tax transfer of
revaluation of investment
properties - 1,147 (1,147) - - - - -
Dividends paid - - (1,164) - - (1,164) - (1,164)
Balance at 28 February
2015 194 57,297 385,332 (750) - 442,073 17,555 459,628
Total comprehensive
income - - 21,237 (2,173) - 19,064 (3,226) 15,838
Profit for the period - - 21,237 - - 21,237 (3,226) 18,011
- Other comprehensive
income - - - (2,173) - (2,173) - (2,173)
Dividends paid - - (3,881) - - (3,881) - (3,881)
Balance at 31 August 2015 194 57,297 402,688 (2,923) - 457,256 14,329 471,585
* represents non-distributable reserves
Review
Global economies have experienced a steady deterioration in trading conditions during the period, with the
local economy being significantly impacted by lower commodity prices and the strengthening of the US dollar.
The Group, however, managed to remain steadfast amidst tough trading conditions delivering a 13.6% increase
in profits for the period.
Revenue decreased 4.8%, primarily due to the slowdown in demand for copper and steel related products
which impacted our industrial segment. The industrial segment's operating profits were further impaired by
R18.2 million due to unrealised foreign exchange losses incurred within our Zambian subsidiary. The significant
increase in profitability within the agriculture segment is attributable to favourable weather patterns resulting in
increased throughput, a R2.1 million increase in foreign exchange gains within our Zimbabwean subsidiary and a
R2.3 million increase in profits from an associate. The increased profits of R1.6m and R2.1m within the aviation
and property segments respectively, is primarily attributable to profit on disposal of assets. The supply chain
segment operating losses increased by R0.49 million and was affected by a slow uptake in project revenue
during the period.
Net finance costs decreased by 36.5% as a result of the majority of instalment sale contracts within South Africa
reaching maturity. Finance costs are expected to increase in line with new capital expenditure incurred during
the latter part of the current reporting period.
Earnings per share and headline earnings per share have increased by 42.1% and 23.4% respectively, benefitting
significantly from the South African and Swaziland operations. The disposal of non-core assets together with a
lower effective tax rate of 18.3% further enhanced earnings, thereby partially offsetting the exchange losses
incurred in Zambia. Management remains committed to ensuring that the business remains profitable and
generates acceptable levels of returns to all of its stakeholders.
Prospects
It is very challenging at this stage to predict the future course of the economy, however, there are indications of
a slight recovery in commodity prices as efforts are boosted to revive the faltering sector. Further depreciation
of the major reporting currencies against the US dollar is envisaged, which would result in our Zambian subsidiary
not recovering from the foreign exchange losses incurred. The Group intends to remain focused on its growth
ambitions and is well supported by its current low gearing and available debt capacity. Barring any unforeseen
circumstances, the Group is expected to continue profitably to year end.
Accounting Policies
The interim condensed consolidated financial statements for the period ended 31 August 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 71 of 2008. The accounting policies are consistent with
those applied in the prior year financial statements and the carrying amounts of financial instruments
approximates their fair value. These results have not been audited nor have they been reviewed by the Group's
auditors, Ernst & Young Inc. The interim condensed consolidated financial statements were compiled under the
supervision of the Chief Financial Officer, Mr S Maharaj CA(SA)/HDipTax.
Events after the reporting period
There were no significant events after the reporting period.
Dividend Declaration
Despite the challenging trading conditions experienced, the board has decided to declare a gross interim cash
dividend (Number 49) of 8.0 cents per share (2014: 6.0 cents) for the period ended 31 August 2015. The dividend
has been declared out of income reserves.
The dividend will be subject to a dividend withholding tax rate of 15% or 1.2 cents per ordinary share. Shareholders,
unless exempt or qualifying for a reduced withholding tax rate, will receive a net dividend of 6.8 cents per share
(2014: 5.1 cents).
Cargo Carriers tax reference number is 9900156713 and the number of ordinary shares in issue at the declaration
date is 20 000 000, of which 593 710 are treasury shares.
The salient dates for the dividend are as follows:
Last day to trade “cum” the cash dividend (LDT) Friday, 27 November 2015
Shares commence trading “ex” the dividend Monday, 30 November 2015
Record date (date shareholders recorded in share register) Friday, 4 December 2015
Payment date Monday, 7 December 2015
Shareholders may not dematerialise or rematerialise their share certificates between Monday, 30 November
2015 and Friday, 4 December 2015, both dates inclusive.
Registered Office
11A Grace Road
Mountainview, Observatory, Johannesburg
2198
Transfer Secretaries
Computershare Investor Services Proprietary Limited
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Website
www.cargocarriers.co.za
By order of the board
Arbor Capital Company Secretarial Proprietary Limited
Company Secretary
27 October 2015
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
Sponsor
Arbor Capital Sponsors Proprietary Limited
Date: 27/10/2015 05:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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