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Audited Results for the year ended 29 February 2016
Mazor Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 2007/017221/06
Share code: MZR
ISIN: ZAE000109823
('Mazor' or 'the company' or 'the group')
SUMMARISED RESULTS OF THE AUDITED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2016
Revenue up 30.8%
Operating profit up 246.2%
HEPS up to 26.9 cents per share
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2016 2015
R R
ASSETS
Non-current assets
Property, plant and equipment 84 832 242 77 793 737
Goodwill - -
Intangible asset 18 000 000 19 000 000
Deferred tax 4 342 457 5 477 045
107 174 699 102 270 782
Current assets
Inventories 101 758 943 95 404 710
Construction contracts and receivables 19 894 834 19 869 093
Current tax receivable 439 838 58 550
Trade and other receivables 41 359 974 37 173 539
Cash and cash equivalents 73 265 974 46 094 321
236 719 563 198 600 213
Total assets 343 894 262 300 870 995
EQUITY AND LIABILITIES
Equity
Stated capital 63 632 244 71 864 018
Retained income 177 069 358 148 722 620
240 701 602 220 586 638
Liabilities
Non-current liabilities
Other financial liabilities 13 035 156 14 271 961
Deferred tax 1 190 023 794 753
14 225 179 15 066 714
Current liabilities
Other financial liabilities 10 175 724 7 466 254
Current tax payable 400 438 305 322
Trade and other payables and amounts due to customers 72 768 326 51 485 667
Bank overdraft 5 622 993 5 960 400
88 967 481 65 217 643
Total liabilities 103 192 660 80 284 357
Total equity and liabilities 343 894 262 300 870 995
SUMMARISED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
2016 2015
R R
Revenue 491 710 681 376 077 950
Cost of sales (347 414 290) (308 209 565)
Gross profit 144 296 391 67 868 385
Other income 1 321 605 1 750 457
Operating expenses (104 673 401) (97 628 842)
Operating profit/(loss) 40 944 595 (28 010 000)
Investment revenue 3 967 933 3 687 508
Finance costs (2 932 442) (2 936 629)
Profit/(loss) before taxation 41 980 086 (27 259 121)
Taxation (13 633 348) (11 953 431)
Total comprehensive income/(loss) for the period 28 346 738 (39 212 552)
Basic and diluted earnings per share (cents) 25.4 (33.1)
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
2016 2015
R R
Cash flows from operating activities
Cash generated from operations 62 976 234 9 503 993
Interest income 3 923 538 3 620 847
Finance costs (2 932 442) (2 936 629)
Tax paid (12 389 663) (6 118 912)
Dividends paid - (10 447 082)
Net cash flow from operating activities 51 577 667 (6 377 783)
Cash flows from investing activities
Purchase of property, plant and equipment (19 352 628) (2 853 050)
Proceeds from disposal of plant and equipment 2 043 130 957 654
Net cash flow from investing activities (17 309 498) (1 895 396)
Cash flows from financing activities
Proceeds/(repayment) of other financial liabilities 1 472 665 (8 699 440)
Purchase of treasury shares (8 231 774) (5 081 769)
Net cash flow from financing activities (6 759 109) (13 781 209)
Increase/(decrease) in cash and cash
equivalents for the year 27 509 060 (22 054 388)
Cash and cash equivalents at the beginning of the year 40 133 921 62 188 309
Cash and cash equivalents at the end of the year 67 642 981 40 133 921
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Stated capital Retained income Total equity
R R R
Balance at 1 March 2014 76 945 787 198 382 254 275 328 041
Changes in equity
Loss for the period (39 212 552) (39 212 552)
Treasury shares acquired (5 081 769) (5 081 769)
Dividends paid (10 447 082)* (10 447 082)
Balance at 28 February 2015 71 864 018 148 722 620 220 586 638
Changes in equity
Profit for the period 28 346 738 28 346 738
Treasury shares acquired (8 231 774) (8 231 774)
Balance at 29 February 2016 63 632 244 177 069 358 240 701 602
* No dividend was paid in the current year (a gross dividend of 8.8 cents per
share on was paid 9 June 2014).
NOTES TO THE SUMMARISED RESULTS
RECONCILIATION BETWEEN EARNINGS AND HEADLINE EARNINGS:
2016 2015
R R
Earnings/(Loss) attributable to ordinary shareholders 28 346 738 (39 212 552)
Adjusted for:
Impairment of goodwill - 8 141 200
Impairment of PPE 875 000
Loss on disposal of property, plant and equipment 1 130 184 276 185
Tax effect thereof (316 451) (77 332)
Headline earnings 30 035 470 (30 872 499)
Number of shares in issue 109 351 442 121 501 553
Number of shares in issue (after treasury shares) 108 963 942 114 754 798
Weighted average number of shares 111 454 912 118 409 637
Basic and diluted headline earnings per share (cents) 26.9 (26.1)
SUMMARISED SEGMENT REPORT
2016 2015
R R
Segment revenue - external
- Aluminium 280 831 877 174 397 439
- Steel 71 341 218 77 868 920
- Glass 139 537 586 123 811 591
- Corporate - -
491 710 681 376 077 950
Segment revenue - internal
- Aluminium 1 335 491 120 240
- Steel 4 100 000 -
- Glass 27 514 234 18 659 017
- Corporate 5 724 098 5 678 755
38 673 823 24 458 012
Segment result - operating profit
- Aluminium 37 407 001 (5 982 628)
- Steel 4 561 812 2 478 201
- Glass (4 625 904) (19 415 518)
- Corporate 3 601 686 (5 090 055)
40 944 595 (28 010 000)
Segment assets
- Aluminium 155 338 437 120 354 689
- Steel 59 725 240 54 632 381
- Glass 115 522 936 111 962 367
- Corporate 13 307 649 13 921 558
343 894 262 300 870 995
Segment liabilities
- Aluminium 36 739 159 20 674 488
- Steel 16 076 358 13 018 959
- Glass 42 706 707 37 687 665
- Corporate 7 670 436 8 903 246
103 192 660 80 284 358
COMMENTARY
INTRODUCTION
The summarised results of the audited consolidated financial results ('summarized
Results') for the year ended 29 February 2016 ('the year') reflect a return to
profitability for the full year notwithstanding continued challenging market
conditions. Cost efficiencies and streamlined operations have helped to improve
the bottom line while increased activity in the construction sector, particularly
in the residential sub-sector, positively impacted our order book and revenue
growth.
BASIS OF PREPARATION
The summarised results of the audited consolidated annual financial statements
contain the information required by IAS 34: Interim Financial Reporting, and
have been prepared in accordance with the framework concepts and the measurement
and recognition requirements of International Financial Reporting Standards
('IFRS'), the SAICA financial reporting guides as issued by the Accounting
Practices Committee, the Companies Act, No. 71 of 2008, and the JSE Listings
Requirements.
The accounting policies and methods of computation applied in the preparation
of these summarised consolidated annual financial results are in terms of IFRS
and consistent with those applied in the most recently issued audited annual
financial statements.
The summarised results have been prepared under the supervision of the
financial director, Ms L Mazor CA(SA). This summarised report is extracted
from audited information, but is not itself audited. The directors take full
responsibility for the preparation of the summarised results and the
financial information has been correctly extracted from the underlying annual
financial statements.
The consolidated annual financial statements from which the summarised
results have been derived were audited by the group's external auditors,
Mazars, who expressed an unqualified audit opinion. This is available for
inspection at the company's registered office. That report does not
necessarily cover all the information contained in this announcement.
Shareholders are therefore advised that, in order to obtain a full
understanding of the nature of the auditors' work, they should refer to
the report together with the annual consolidated financial statements
contained in the integrated annual report.
A copy of the full set of consolidated annual financial statements is
available for inspection from the company secretary at the registered
office of the group. In order to request a copy, please contact Mr I Bloom
on 021 981 4300 or e-mail the request to ivor@altotrust.com.
GROUP PROFILE
The Steel division comprises Mazor Steel which designs, supplies and
erects structural steel frames.
The Aluminium division comprises Mazor Aluminium which designs,
manufactures and installs aluminium structures such as doors, windows,
shop fronts, facades and balustrades for major blue-chip construction
groups. HBS Aluminium Systems ('HBS') augments the division's offering
with a wide range of fenestration systems and accessories.
The Glass division comprises Compass Glass and Compass Glass SA which
manufacture and distribute laminated and toughened safety glass and
double-glazed units.
The group has a strong national presence across Gauteng and KwaZulu-Natal
in addition to its historical base in the Western Cape.
REVIEW OF OPERATIONS
The Aluminium division enjoyed a good year with an improved performance
from our manufacturing operations and solid results from HBS. We expect
both top and bottom line as well as margins to continue improving and are
well-positioned to weather increased input costs.
The Steel division saw increased activity in the year. However, rising
material costs will remain a challenge.
Although the Glass division still incurred an operating loss, its
performance has improved year-on-year. All three plants have been
streamlined and the product-focused strategy and optimised efficiencies
are beginning to bear fruit.
No material reportable events occurred between the reporting date and the
date of this announcement.
FINANCIAL RESULTS
Revenue was up by 30.8% to R491.7 million from R376.1 million in the prior
year. The Aluminium division posted strong revenue growth, up 61% to
R280.8 million. The Glass division also posted double digit growth with
revenue increasing 12.7% to R139.5 million. Revenue in the Steel
division was down 8.4% year-on-year to R71.3 million.
Operating profit rose 246.2% to R40.9 million compared to a loss of
R28.0 million in the prior year.
Headline earnings increased to R30 million from a loss of R30.9 million
in the prior year, resulting in an increase in headline earnings per
share to 26.9 cents compared to a loss of 26.1 cents.
The group invested R19.4 million in new plant predominantly to automate
and improve efficiencies in the Steel and Glass divisions.
The group increased cash and cash equivalents by R27.5 million due to
operating activities.
At 29 February 2016, the group had issued guarantees amounting to
R66.1 million compared to R24.3 million at 28 February 2015. These
guarantees have arisen in the ordinary course of business and it is not
expected that any loss will arise therefrom.
SHARE TRANSACTIONS
During the year, Mazor repurchased 5 790 856 of its own shares for a
total consideration of R8.2 million. The shares were repurchased by a
subsidiary of the company and held as treasury shares.
On 29 February 2016, Mazor cancelled 12 150 111 shares which were
previously held as treasury shares resulting in a reduction of issued
share capital to 109 351 442 shares.
DIRECTORATE
Mr A Darko resigned as an independent non-executive director of Mazor
and Chairman of the Audit and Risk and Social and Ethics Committees with
effect from 11 May 2015. We thank Mr Darko for his years of service.
Mr RS Schur was appointed as an independent non-executive director of
Mazor with effect from 27 August 2015. He is a member of the Audit and
Risk Committee, the Remuneration and Nomination and Social and Ethics
Committees. Mr Schur brings substantial experience to the board as a
former CFO of Protea Hotels and currently a non-executive director of
Ingenuity Property Investments.
DIVIDEND DECLARATION
Notice is hereby given that in line with strategy the board has declared
a final gross dividend for the year of 8.5 cents per share (2015:
No dividend declared after the reporting date) on 16 May 2016.
Salient dates are:
Last day to trade cum distribution Thursday, 9 June 2016
Shares trade ex distribution Friday, 10 June 2016
Record date Friday, 17 June 2016
Payment date Monday, 20 June 2016
Shareholders may not dematerialise or rematerialise their shares
between Friday, 10 June 2016 and Friday, 17 June 2016, both
days inclusive.
ADDITIONAL INFORMATION
The board has confirmed by resolution that the solvency and liquidity
test as contemplated by the Companies Act, No. 71 of 2008, has been
duly considered, applied and satisfied. The dividend has been declared
from reserves. This is a dividend as defined in the Income Tax Act,
No. 58 of 1962, and is payable from reserves.
The South African dividend withholding tax ('DWT') rate is 15%. Consequently
DWT of 1.275 cents per share is payable by shareholders who are not exempt
from DWT, resulting in a net dividend of 7.225 cents per share.
There are 109 351 442 ordinary shares in issue (inclusive of 387 500
treasury shares). The total dividend amount payable is R9 294 873.
Mazor Group Limited's tax reference number is 9495/976/15/2.
PROSPECTS
We anticipate some economic challenges in South Africa in the year ahead
but are confident that we are on a sound footing. Being predominantly
Cape-based and given that the Cape economy is growing faster than the rest
of the country we believe that we are all well positioned to take advantage
of future growth.
We will continue to focus on our cost per unit of revenue through our cost
and efficiency programmes including skills development and investment in
capital goods to streamline processes.
We expect to benefit from the uptick in the residential market, which will in
turn drive demand for retail, as well as tourism especially in Cape Town. In
addition we are seeing increased demand for big box warehouses for the
logistics industry.
We believe our focus on cost efficiency and product offering positions us
to benefit from growth opportunities going forward.
APPRECIATION
We extend our appreciation to our staff and management for their continued
commitment, which helped achieve our strong performance. We also thank our
fellow directors for their guidance and our business partners, suppliers,
advisors, valued clients and shareholders for their continued support.
The annual general meeting will be held on 18 July 2016 at 10:00 at Mazars
House, Rialto Road, Grand Moorings Precinct, Century City, Cape Town.
FORWARD-LOOKING STATEMENTS
This announcement contains certain forward-looking statements with respect
to the financial condition and results of the operations of Mazor that, by
their nature, involve risk and uncertainty because they relate to events and
depend on circumstances that may or may not occur in the future. These may
relate to future prospects, opportunities and strategies. If one or more of
these risks materialise, or should underlying assumptions prove incorrect,
actual results may differ from those anticipated. By consequence, none of the
forward-looking statements have been reviewed or reported on by the
group's auditors.
On behalf of the board
M Kaplan R Mazor
Chairman CEO
16 May 2016
Cape Town
Directors: M Kaplan (Chairman)*^, R Mazor (CEO), L Mazor (Financial Director),
S Mazor, RS Schur*^, A Groll*^, F Boner*^, A Varachhia* *Non-executive
director ^Independent
Company secretary: Ivor Mark Bloom
Registered office: 8 Monza Road, Killarney Gardens, 7441 (PO Box 60635,
Table View, 7439)
Sponsor: Bridge Capital Advisors (Pty) Limited, 2nd Floor, 27 Fricker Road,
Illovo Boulevard, Illovo, 2196 (PO Box 651010, Benmore, 2010)
Transfer secretaries: Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
Date: 17/05/2016 03:37:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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