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CAFCA LIMITED - Unaudited Financial Results for the six months ended 31 March 2016

Release Date: 12/05/2016 11:03
Code(s): CAC     PDF:  
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Unaudited Financial Results for the six months ended 31 March 2016

Cafca Limited
Share Code: CAC
ISIN Code: ZW0009011942

Notice To Shareholders

Unaudited Financial Results for the six months ended 31 March 2016

All figures in United Stated Dollars
                                                       UNUADITED           UNAUDITED            AUDITED
                                                        SIX MONTHS TO       SIX MONTHS TO         FULL YEAR TO
                                                                                                  30 SEPETMBER
                                                        31 MARCH 2016       31 MARCH 2015             2015
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME                $                   $                       $
Revenue                                                   9,357,591           14,210,430           29,310,805
Operating profit                                           307,298            1,060,325            2,445,275
Net finance income/(cost)                                  (74,785)               9,427                   7,276
Profit Before Income tax                                   232,513            1,155,214            2,452,551
Income tax expense                                        (104,093)           (305,641)            (656,027)
Profit for the period                                      128,420             849,573             1,796,524
Other Comprehensive Income:                                   -                   -                       -
Total Comprehensive Income for the period                  128,420             849,573             1,796,524




Issued Ordinary Shares (weighted) (number)               32,830,666           32,770,666           32,770,666
Basic Earnings per share (cents)                            0.39                 2.59                 5.48
Diluted Earnings per share(number)                       33,459,000           32,919,000           33,459,000
Diluted Earnings per share (cents)                          0.38                 2.58                 5.37

 Headline Earnings per share(number)                    32,830,666          32,770,666          32,770,666
 Headline Earnings per share (cents)                       0.39                2.59                 5.48

                                                         UNAUDITED           UNAUDITED           AUDITED
                                                          SIX MONTHS TO        SIX MONTHS TO        FULL YEAR TO
                                                                                                    30 SEPTEMBER
CONSOLIDATED STATEMENT OF FINANCIAL POSITION              31 MARCH 2016        31 MARCH 2015            2015
                                                                                                          $
                                                                   $                   $

ASSETS
Non Current Assets
Property, plant and equipment                               3,402,680            3,303,665            3,416,831
Loans and receivables                                             18,540               18,540                 18,540
Current Assets
Inventory                                     8,619,432         7,843,413         9,540,613
Trade and other receivables                   5,882,541         3,879,638         5,320,445
Cash and cash equivalents                         86,366            518,598          49,508
Total Assets                                  18,009,559       15,563,698        18,345,937


EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital                                         328              328              328
Share premium                                    169,281          136,582           138,081
Share option reserve                               5,300           57,733            57,733
Retained earnings                             14,244,072       12,989,437        14,115,652
Total Equity                                  14,418,981       13,184,080        14,311,794

LIABILITIES
Non-current assets
Deferred income tax liabilities                619,563         614,813           624,882

Current liabilities
Trade and other payables                      1,375,180       1,656,370         2,702,513
Current income tax liabilities                   96,435         108,435            26,225

Total liabilities                             3,590,578       2,379,618         4,034,143

Total equity and liabilities                  18,009,559      15,563,698        18,345,937

STATEMENT OF CHANGES IN EQUITY
                                              Share Capital     Share Premium    Share Option   Retained
                                                                                 Reserve        earnings     Total
                                              $                 $                $              $            $
Balance at 1 October 2014                     326               87,699           41,722           12,139,864 12,269,611
Transaction with owners:
Issue of shares                                   2             12,398            -                 -           12,400
Share options                                 -                 37,984            16,011           -             53,995
Comprehensive income:
Reversal of impairment                        -                 -                -                 179,264      179,264
Profit for the year                           -                  -                               1,796,524    1,796,524
Balance at 30 September 2015                  328               138,081           57,733        14,115,652   14,311,794


Balance at 1 October 2015                     328               138,081           57,733        14,115,652   14,311,794
Transaction with owners:
Issue of shares                               -                   7,200             -                -          7,200
Share options                                 -                 24,000           (52,433)            -        (28,433)
Profit for the period                         -                 -                                 128,420     128,420
Balance at 31 March 2016                                     328                   169,281           5,300     14,244,072 14,418,981




ABRIDGED STATEMENT OF CASH FLOWS
                                                SIX MONTHS TO   SIX MONTHS TO        FULL YEAR TO
                                                31 MARCH 2016    31 MARCH 2015       30 SEPTEMBER 2015


Profit before income tax                               232,513        1,155,214            2,452,551
Depreciation                                           164,659          149,516               310,037
Share option (credit)/charge                         (28,433)          52,495               53,995
Profit on sale of property plant,and equipment        (4,320)         (27,109)             (27,109)
Finance income                                           -             (9,427)             (10,009)
Finance cost                                             74,785           -                  2,733
Change in working capital                             (968,248)      (1,532,524)         (3,624,383)
Net cash (utilised in)                                (529,044)        (211,835)           (842,185)
Finance income                                         -                9,427               10,009
Finance costs                                         (74,785)           -                   2,733
Income tax paid                                       (39,640)         (252,536)          (675,063)
Tax paid                                             (252,536)        (214,315)            (668,582)
Net cash utilised in operating
activities                                           (643,469)        (454,944)              (1,509,972)
Acquisition of plant and equipment                   (150,292)        (320,690)                (415,275)
Proceeds from sale of property plant and
equipment                                                  4,320        34,050                 34,050
Net utilised in investing activities                  (150,292)       (320,690)              (415,275)
CASHFLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital                       7,200         12,400              12,400
Net decrease in cash and cash equivalents              (782,241)      (729,184)          (1,878,797)
Cash and cash equivalents at beginning of the period    (631,015)     1,247,782           1,247,782
Cash and cash equivalents at end of period             (1,413,256)      518,598            (631,015)


                                                  SIX MONTHS TO SIX MONHTS TO FULL YEAR TO
                                                31 MARCH 2016 31 MARCH 2015 30 SEPTEMBER 2015

Capital expenditure                               150,292            320,690         415,275
Depreciation                                      164,659            149,516         310,037


NOTES THE FINANCIAL STATEMENTS
1.The principal accounting policies of the group, have been followed in all material respects and conform to International Financial Reporting
Standards(IFRS) and the Zimbabwe Companies Act(Chapter 24:03).
2.The financial statements are presented in United States Dollars which is the functional currency of the Group.
3.Related party transactions
 CBI-Electric African Cables-A division of ATC (Pty) Ltd owns 71% of the company and the remaining 29% are widely held.
The following transactions were carried out with related parties:
                                                         UNDAUDITED        UNAUDITED       AUDITED
                                                         SIX MONTHS TO     SIX MONTHS TO TWELVE MONTHS
                                                         31 MARCH 2016     31 MARCH 2015 30 SEPTEMBER
                                                                                             2015
Purchases during the year from holding company
CBI-Electric African Cables a division of ATC(Pty) Ltd      138,228        2,957,562        5,184,645
CBI Electric Aberdare/ATC Telecoms Cable(Pty) Ltd             2,631          157,840          180,325
Goods and services are bought from related parties on
Commercial terms and conditions.

Sales during the year to holding company
CBI-Electric African Cables a division of ATC(Pty) Ltd          -            2,924,273       3,630,226
The above sales were done at arm’s length

Balances arising from purchase of goods and services
Payables to related parties
CBI-Electric African Cables a division of ATC(Pty) Ltd          -            630,478             -

There were no loans made to directors of the Group companies

Key management remuneration
Key management includes directors(executive and non-executive)
and executive managers(members of the executive)

Salaries and short term benefits                           236,118          355,197         801,457
Share options(credit)/charge                               (28,433)          53,495          53,995
Directors fees                                              48,150           37,334          76,114
Commitments

The Group had no significant capital commitments authorised by directors or contracted for at the reporting period.

Segment information
The executive management team is the Group’s Chief operating decision maker. Management has determined the operating segments based on reports
reviewed by the executive team that are used to make strategic decisions.The Group has one product line,and operates in one industry sector.


                                                         UNUADITED         UNAUDITED        AUDITED
                                                           SIX MONTHS TO    SIX MONTHS TO      FULL YEAR TO
                                                                                               30 SEPETMBER
                                                           31 MARCH 2016    31 MARCH 2015          2015


Revenue from customers domiciled in Zimbabwe              8,931,661        10,592,178        23,801,710
Revenue from external customers                             425,930         3,618,252         2,590,484
Total                                                     9,357,591        14,210,430        23,310,805

Revenue from transations with single local customers that amounted to 10% of more of each of the      Group’s revenues equal approximately to US
$4,651,954

These revenues are attributable to customers domiciled in Zimbabwe .The breakdown of the major component of the total revenue from individual
local customers with revenue of at least 10% is as follows:
Energy transmission                                   4,440,344          4,651,954        12,406,957

The segment information provided to the executive team for the reportable segments for six months to 31 March are as follows:


Revenue from customers                                  9,357,591       14,210,430      29,310,805
Depreciation                                              164,659          149,516         310,037
Share option charge /(credit)                             (28,433)          52,495          53,995
Profit before income tax                                  307,298        1,145,787       2,445,275
Net finance income/(costs)                                (74,785)           9,427           7,276
Income tax expense                                        104,093         305,641         656,027
Total assets                                           18,009,559       15,563,698      18,345,937
Total liabilities                                       3,590,578        2,379,618       4,034,143


Bank overdraft                                         1,499,622             -              680,523
The Group has an overdraft facility limit of $5 250 000 and a letter of credit limit of $750 000+.The overdraft facilities bear an interest at
10% per annum and are unsecured.The facilities expire within a year and are denominated in US$. The fair value of borrowings equal their carrying
amounts as the impact of discounting is insignificant.



COMMENTARY AND OVERVIEW OF RESULTS

PROFITABILITY
Revenue for the 6 months period to 31 March 2016 is 34% down on the comparative prior year period.

At the Annual General meeting shareholders were made aware of the fact that production was being scaled down from 300 tons a month to 200 tons a
month. The reasons given being a downturn in both the local and export markets.

Locally all sectors are down. Mining is battling with low commodity prices whilst Industry has been adversely affected by liquidity and viability
challenges. Housing is slowing down due to liquidity issues and the ability of potential home owners to raise mortgage bonds. Sales to Government
have been curtailed due to nonpayment. The power utilities are experiencing cash flow constraints arising from the reduction in local power
generation and having to raise funds to import power. The international decrease in the copper price affected the barter transaction leading to
reduction in sales by 25%.

In terms of exports, Malawi is suffering from devaluation and foreign currency shortages. Zambia due to the drop in copper prices, is also having
foreign currency challenges. Mozambique has currently stopped all import payments. The devaluation of the rand over the period made us
uncompetitive to export to South Africa.

During the period, due to the weakening of the rand, imports from South Africa increased as it became cheaper to import finished product rather
than to procure locally manufactured product.

FINANCIAL POSITION
The Consolidated Statement of Financial Position remains strong with stock and debtors of $14.5 million adequately covering liabilities and
borrowings of $2.9 million.

OUTLOOK
Sales continue to deteriorate though our current 6 monthly forecast is that sales will be higher than the last 6 months, however still
approximately 30% down against the comparative period last year. To improve viability total monthly costs have been reduced by 30%.

Our major concern going forward is the country’s ability to fund the Nostro accounts to pay for imported raw materials.
DIVIDEND
The Directors have waived the declaring of a dividend in order to retain resources for funding working capital, in particular debtors.


By order of Board

C Kangara
Company Secretary
12 May 2016



Directors: H.P.Mkushi (Chairman), R.N. Webster (Managing), E.T.Z.Chidzonga
A.E.Dickson, A.Mabena, S.E Mangwengwende, P De Villiers, G.Eddey, G.J.H Steyn

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