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Unaudited Interim Group Results for the Six Months Ended 31 August 2016
Spanjaard Limited
(Incorporated in the Republic of South Africa)
Registration number 1960/004393/06
Share code: SPA ISIN: ZAE000006938
("Company" or "Group")
UNAUDITED INTERIM GROUP RESULTS
FOR THE SIX MONTHS ENDED
31 AUGUST 2016
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Six months to Six months to
31 August 31 August
2016 2015
R'000 R'000
Revenue 60 703 58 348
Cost of sales (37 680) (39 548)
Gross profit 23 023 18 800
Operating expenses (19 977) (18 974)
Depreciation and amortisation (1 779) (1 580)
Operating profit/(loss) 1 267 (1 754)
Finance costs (462) (672)
Profit/(loss) before income tax 805 (2 426)
Taxation (311) 105
Profit/(loss) for the period from continuing operations 494 (2 321)
Other comprehensive income
Movement in foreign currency translation reserve 87 (836)
Total comprehensive income/(loss) for the period 581 (3 157)
Profit/(loss) per ordinary share
– basic and diluted (cents) 0,06 (28,5)
Headline profit/(loss) per ordinary share
– basic and diluted (cents) 0,06 (28,5)
CONDENSED CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
As at As at
31 August 29 February
2016 2016
R'000 R'000
Assets
Non-current assets 30 774 32 051
Property, plant and equipment 28 394 29 412
Goodwill 437 437
Intangibles 1 943 2 202
Current assets 36 133 40 286
Inventories 16 054 17 433
Trade receivables and prepayments 18 044 20 911
Amount due by ultimate holding company 13 –
Current income tax receivable 577 346
Cash and cash equivalents 1 445 1 596
Total assets 66 907 72 337
Equity and liabilities
Total shareholders' equity 43 272 42 866
Ordinary shares and premium 6 871 6 871
Reserves 36 401 35 995
Liabilities
Non-current liabilities 5 417 5 599
Borrowings 587 1 143
Deferred tax liabilities 4 830 4 456
Current liabilities 18 218 23 872
Trade and other payables 10 217 13 335
Borrowings 2 169 2 717
Loans from ultimate holding company – 1 953
Shareholders for dividends 67 1 362
Bank overdraft 5 765 4 505
Total equity and liabilities 66 907 72 337
Net asset value per share 531,4 526,4
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS
Six months to Six months to
31 August 31 August
2016 2015
R'000 R'000
Cash flows from operating activities 3 482 (146)
Cash flows from investing activities (502) 2 969
Cash flows from financing activities (4 365) (1 522)
Net (decrease)/increase in cash and cash equivalents (1 385) 1 301
Cash and cash equivalents at beginning of period (2 909) (5 583)
Effect of exchange rate movement on cash balances (26) (286)
Cash and cash equivalents at end of period (4 320) (4 568)
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
Six months to Six months to
31 August 31 August
2016 2015
R'000 R'000
Ordinary shares 407 407
Share premium 6 464 6 464
Share-based payment compensation reserve 1 906 1 906
Foreign currency translation reserve 44 106
Opening balance 131 (730)
Movement for the year (87) 836
Revaluation reserve 6 315 10 708
Opening balance 6 457 10 868
Movement for the year (142) (160)
Retained earnings 28 136 22 667
Opening balance 27 500 24 988
Total profit/(loss) for the period from continuing
operations 494 (2 321)
Movement in reserves 142 –
Total shareholders' equity 43 272 42 258
DIVIDENDS
Dividend declared per ordinary share (cents)
– interim – –
SUPPLEMENTARY INFORMATION
Six months to Six months to
31 August 31 August
2016 2015
R'000 R'000
Capital expenditure 331 214
OPERATING SEGMENTS
Six months to Six months to
31 August 31 August
2016 2015
R'000 R'000
Segment revenue
Special lubricants and allied chemicals 58 602 55 097
External customers 11 849 13 863
Local customers 46 753 41 234
Lubricant powders/metal powders 1 016 2 529
External customers 757 1 660
Local customers 259 869
Other 2 786 2 018
External customers 2 786 2 018
Reconciling items (1 701) (1 296)
External customers (1 651) (1 046)
Local customers (50) (250)
60 703 58 348
Segment result
Special lubricants and allied chemicals 1 063 (2 359)
Lubricant powders/metal powders (248) (26)
Other 812 781
Reconciling items (360) (150)
1 267 (1 754)
Segment assets
Special lubricants and allied chemicals 46 326 60 895
Lubricant powders/metal powders 11 789 13 522
Other 24 134 26 595
Reconciling items (15 342) (28 675)
66 907 72 337
Segment liabilities
Special lubricants and allied chemicals 17 673 32 554
Lubricant powders/metal powders 2 461 4 077
Other 16 207 15 537
Reconciling items (12 706) (22 697)
23 635 29 471
RECONCILIATION OF HEADLINE EARNINGS
Six months to Six months to
31 August 31 August
2016 2015
R'000 R'000
Profit/(Loss) attributable to shareholders 494 (2 321)
Headline profit/(loss) 494 (2 321)
Weighted average number of ordinary
shares in issue ('000) 8 143 8 143
Headline profit/(loss) per ordinary share
– basic and diluted (cents) 0,06 (28,5)
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed consolidated interim financial statements for the six months ended 31 August
2016 have been prepared in accordance with International Financial Reporting Standards (IFRS),
IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and the Financial Pronouncements as issued by the Financial
Reporting Standards Council, as well as the requirements of the South African Companies Act
(2008) and the JSE Listings Requirements.
The condensed consolidated interim financial statements do not include all the disclosures
required for a full set of financial statements prepared in accordance with International Accounting
Standards (IFRS) as issued by the International Accounting Standards Board.
The condensed consolidated interim financial statements appearing in this announcement are
the responsibility of the directors and the directors take full responsibility for the preparation
thereof. Ian Saunders CA(SA), Financial Director, is responsible for this set of condensed
consolidated interim financial statements.
The accounting policies applied in the preparation of these condensed consolidated interim
financial statements are in terms of IFRS and are consistent with those applied in the
consolidated annual financial statements for the year ended 29 February 2016. The condensed
consolidated interim financial statements have not been reviewed or audited by the group's auditors.
COMMENTARY
POINTS OF INTEREST
- Group Revenue is up by 4%.
- EBITDA up from (R174,000) to R3 046 000.
- Net asset value improved from 526,4 to 531,4 cents per share.
EXECUTIVE CHAIRMAN'S STATEMENT
The total comprehensive income for the first half of the year is a modest R581 000 amounting to
a positive change of R3 738 000 compared to the same period last year.
We have had an interesting first six months of the 2017 financial year and continue to consolidate
after the turbulent times we experienced during the same period last year. Our management
team now has a firm understanding of the business and has established a strong base from
which to grow.
Sales increased by 4%, much of which was a result of excellent growth of 86% in our food
products manufacturing division. Our cost reduction programme has been extremely successful
with our total EBITDA improving from a loss position at this stage last year to R3 046 000 for the
current reporting period.
Our mining/industrial/marine division continues to cope with challenges such as shutdowns of
a number of mining operations. Our Eskom business, where we supply special lubricants for
critical applications, has dropped to some extent. Our international sales division is receiving
additional marketing attention which should reflect in the results for the second half.
We have continued making significant ground in the area of inventory management with new
inventory planning software assisting us in this regard. This in turn has resulted in more efficient
purchasing of raw materials which has greatly assisted us in better cash and accounts payable management.
We look forward to the second half of the financial year which has traditionally been the better
half for us.
SEGMENTAL ANALYSIS
The special lubricants and allied chemicals segment has achieved sales growth of 6,4%
compared to the same period last year largely due to the increase in the food products
manufacturing division. The significant weakening of the Rand has had an overall positive effect
on our financials as a whole. A lot of energy is currently being spent looking for new markets to
develop where our product quality and pricing are favourable factors in achieving growth.
Our metal powders segment has coped with some quality difficulties in the previous year caused by quality
fluctuations in the raw material we obtained from certain suppliers. As a result certain cost-cutting
measures have been put in place at Coppermet Proprietary Limited including staff reduction
and a cut of overtime which will help in producing better results. We are still trying to win back
lost export customers after last year's quality issues, but this is taking longer than anticipated.
We are hopeful that the business will be operating at its usual capacity by the beginning of the
next financial year.
Our Rotterdam-based EU distribution from the Netherlands is experiencing good growth off a
low base when compared to the same period last year. We are working closely with our partners
in the Netherlands to improve efficiencies in our logistics operations.
INTERIM DIVIDEND
No dividends have been declared nor are any proposed for the period reported on (2015: RNil).
By order of the Board
Levitt Kirson Business Services Proprietary Limited
Company Secretary
07 October 2016
Directors
RJW Spanjaard (Executive Chairman), K Welgemoed, I Saunders, GF Cort,
CKT Palmer MSc, MBA, Mrs S Hari*, BL Montgomery*, Prof DP van der Nest* *Independent Non-executive
Registered office
748 – 750 Fifth Street, Wynberg, Sandton, 2090
Transfer Secretaries
Computershare Investor Services Proprietary Limited, 70 Marshall Street, Johannesburg, 2001
Sponsor
Arbor Capital Sponsors Proprietary Limited, Ground Floor, One Health Building,
Woodmead North Office Park, 54 Maxwell Drive, Woodmead, 2157
Email: info@spanjaard.biz
Website: www.spanjaard.biz
Date: 07/10/2016 01:22:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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