Wrap Text
Reviewed interim results for the six months ended 30 June 2016
RBA HOLDINGS LIMITED (IN BUSINESS RESCUE)
(Incorporated in the Republic of South Africa)
(Registration number: 1999/009701/06)
(Share Code: RBA ISIN Code: ZAE000199642)
(RBA or the company)
Reviewed interim results for the six months ended 30 June 2016
Overview
Established in 1997, RBA is a supplier of quality affordable homes in the
South African market.
Production levels have increased from an average of just under 93 start
orders per month for the first 6 months of 2015 to 95 units per month
for the half year ending June 2016. The relatively small increase was
due to the delays experienced during the commencement of the business
rescue process.
Headlines:
* Revenue up 55.2% to R218,8 million (2015: R140,9 million).
* Gross profit from property development activities increased from
R22,1 million to R48,5 million.
* Operating expenses, including business rescue and restructuring
costs of R5,1 million (2015: R nil) increased by 15.4% to R44,5 million
(2015 – R38,6 million). Excluding business rescue and restructuring
cost of R5,1 million (2015: R nil) it increased by 2%.
* Operating profit of R9,7 million (June 2015: Loss R7,3 million).
* Finance costs increased by 76.6% to R18,9 million (2015: R10,7 million)
due to increased working capital funding requirements and delays in
finalising the business rescue plans.
* The increase in loans and borrowings for the period by R36 million is
the result of additional facilities made available by the Housing Impact
Fund of South Africa (HIFSA) subsequent to the start of the business
rescue proceedings.
* The equivalent houses constructed number increased by 14.3% to 520
(June 2015: 455) despite the delays experienced during the commencement
of the business rescue process in February 2016.
Business rescue proceedings
RBA and four subsidiaries RBA Developments (JHB)(Pty) Ltd, RBA Homes (Pty)
Ltd, RBA Building Projects (Pty) Ltd and RBA Executive Homes (Pty) Ltd
have been placed under supervision and in business rescue in terms of
sections 131(1) and 129(1) of the Companies Act of South Africa (Companies
Act). Mr Trevor Glaum was appointed as the business rescue practitioner
in terms of section 131 read with section 147 and section 129(3)(b) of
the Companies Act. In terms of section 140 of the Companies Act he has
management control over the companies in business rescue.
The business rescue practitioner is in the process of preparing business
rescue plans for publication and approval by creditors for RBA and RBA
Developments (JHB)(Pty) Ltd under business rescue in terms of section 150 of
the Companies Act. The plans for RBA Homes (Pty) Ltd, RBA Building Projects
(Pty) Ltd and RBA Executive Homes (Pty) Ltd were published on
the 29th of July 2016 and approved by creditors on 15 August 2016.
The creditors of RBA and RBA Developments (JHB)(Pty) Ltd have approved that
the publication date for the business rescue plans be extended to 30 November
2016. A process in underway to determine the value of the company and given
the expected time to completion and impact on the business rescue plan, it is
highly likely that this date will not be met and the date will have to be
extended closer to the time.
The business rescue practitioner is unable to determine if RBA and its
subsidiaries will continue as going concerns in the year ahead due to the
ongoing business rescue proceedings.
The condensed reviewed interim results for the 6 month period ending
30 June 2016:
Consolidated Statement of Financial Position
30-Jun-16* 30-Jun-15 31-Dec-15
R'000 R'000 R'000
Assets
Non-Current Assets
Investment property 5 868 12 346 5 868
Investment property - rental portfolio 75 688 96 994 76 026
Property, plant and equipment 2 749 3 176 3 600
Investments in joint ventures 6 692 8 156 6 373
Investments in associate 229 293 291
Deferred tax - 23 135 -
91 226 144 100 92 157
Current Assets
Inventories 8 485 2 878 4 726
Loan to joint venture 6 221 103 13 873
Stands held for trading 60 513 82 316 57 894
Revenue recognised in excess of
billings 48 532 50 179 37 740
Trade and other receivables 24 145 13 696 19 905
Deposits for land and stand allocations 41 1 770 2 781
Cash and cash equivalents 23 814 2 792 7 666
Investment property – rental Portfolio
- held for sale - - 981
171 751 153 734 145 566
Total Assets 262 977 297 834 237 723
Equity and Liabilities
Equity
Share capital 153 670 153 670 153 670
Reserves 3 292 2 954 3 292
Accumulated loss (201 604) (108 502) (190 861)
(44 642) 48 122 (33 899)
Non-controlling interests (15 793) (4 917) (16 392)
(60 435) 43 205 (50 291)
Non-Current Liabilities
Loans and borrowings 251 012 185 220 189 447
Instalment sale liabilities 12 150 1 127
Deferred tax - 2 187 -
251 024 187 557 190 574
Current Liabilities
Loans and borrowings 22 488 12 512 47 994
Loan from joint venture 1 693 - 89
Current tax payable 2 256 1 541 1 138
Instalment sale liabilities 1 378 274 482
Trade and other payables 42 756 41 553 43 869
Billings in excess of revenue
recognised 8 357 506
Loans from directors and management - - 796
Bank overdraft 1 817 2 835 1 988
Investment property - rental portfolio
- held for sale - - 578
72 388 67 072 97 441
Total Liabilities 323 412 254 629 288 014
Total Equity and Liabilities 262 977 297 834 237 723
Consolidated Statement of Profit and Loss and Comprehensive Income
6 months* 6 months 12 months
30-Jun-16 30-Jun-15 31-Dec-15
R'000 R'000 R'000
Revenue 218 808 140 966 308 509
Cost of sales (165 151) (113 644) (263 232)
Gross profit 53 657 27 322 45 277
Other income 591 3 877 7 123
Operating expenses (44 536) (38 583) (107 514)
Operating profit/(loss) 9 712 (7 384) (55 114)
Share of profit of equity accounted
investees 258 8 124 (890)
Finance income - - 2
Finance costs (18 998) (10 732) (27 290)
Loss before taxation (9 028) (9 992) (83 293)
Taxation (1 118) 11 791 (8 742)
Loss and total comprehensive income
for the period attributable to: (10,146) 1 799 (92 034)
Attributable to:
Owners of the company (10 745) 1 037 (81 321)
Non-controlling interests 599 762 (10 713)
(10 146) 1 799 (92 034)
Consolidated Statement of Cash Flows
6 months* 6 months 12 months
30-Jun-16 30-Jun-15 31-Dec-15
R'000 R'000 R'000
Cash flows from operating activities (28 531) (57 843) (63 028)
Cash used in operations (9 533) (47 111) (46 343)
Finance income - - 2
Finance costs (18 998) (10 732) (16 699)
Tax paid - - 12
Cash flows from investing activities 10 381 3 264 (16 249)
Purchase of property, plant and
equipment (231) (1 686) (4 353)
Proceeds on disposal of rental
portfolio held as available for sale 1 356 3 705 7 675
Proceeds from sale of property,
plant and equipment - - 93
Investment in joint venture - - (7 228)
Movement in loan to joint venture 9 256 1 245 (12 436)
Cash flows from financing activities 34 469 38 067 68 486
Proceeds on share issue - 55 000 55 000
Loans proceeds/(repaid) 35 483 (16 812) 12 895
Loans from directors, managers and
employees (796) - (472)
Repayment of instalment sale
liabilities (218) (121) 1 063
Cash flows for the period (16 318) (16 512) (10 790)
Cash and cash equivalents at
beginning of period 5 678 16 468 16 468
Cash and cash equivalents at end of
period 21 997 (44) 5 678
Consolidated Statement of Changes in Equity
Share
based
Share payment Accumulated
capital reserve loss
R'000 R'000 R'000
Balance at 1 January 2015 98 670 2 954 (109 539)
Issue of shares 55 000
Total comprehensive income for the
six month period 1 037
Balance at 30 June 2015 153 670 2 954 (108 502)
Total comprehensive income for the
six month period (82 357)
Share-based payment expense 338
Balance at 1 January 2016 153 670 3 292 (190 859)
Total comprehensive income for the
six month period (10 745)
Balance at 30 June 2016 153 670 3 292 (201 605)
Minority
interests Total
R'000 R'000
Balance at 1 January 2015 (5 679) (13 594)
Issue of shares - 55 000
Total comprehensive income for the six month period 762 1 799
Balance at 30 June 2015 (4 917) 43 205
Total comprehensive income for the six month period (11 475) (93 833)
Share-based payment expense - 338
Balance at 1 January 2016 (16 392) (50 289)
Total comprehensive income for the six month period 599 (10 146)
Balance at 30 June 2016 (15 793) (60 435)
Segmental Report
Property development activities
30-Jun-16* 30-Jun-15 31-Dec-15
R'000 R'000 R'000
Revenue 213 596 135 711 298 440
Cost of sales (165 151) (113 644) (263 232)
Gross profit 48 445 22 067 35 208
Other income 591 3 877 7 123
Operating expenses (excluding fair
value adjustment) (41 946) (35 612) (83 549)
Loss on fair value adjustments - - (2 930)
Total operating expenses (41 946) (35 612) (86 479)
Share of profit of equity accounted
investees 258 8 124 (890)
Finance income - - 2
Finance cost (13 101) (7 384) (16 368)
Loss (5 753) (8 928) (61 405)
Total assets 185 245 201 220 158 878
Total liabilities (218 489) 186 012 184 594
Sectional title rental activities
30-Jun-16* 30-Jun-15 31-Dec-15
R'000 R'000 R'000
Revenue 5 212 5 255 10 069
Cost of sales - - -
Gross profit 5 212 5 255 10 069
Other income - - -
Operating expenses (excluding fair
value adjustment) (2 590) (2 971) (3 181)
Loss on fair value adjustments - - (17 853)
Total operating expenses (2 590) (2 971) (21 034)
Share of profit of equity accounted
investees - - -
Finance income - - -
Finance cost (5 897) (3 348) (10 922)
Loss (3 275) (1 064) (21 887)
Total assets 77 732 96 614 78 846
Total liabilities (104 923) 68 618 103 419
Consolidated
30-Jun-16* 30-Jun-15 31-Dec-15
R'000 R'000 R'000
Revenue 218 808 140 966 308 509
Cost of sales (165 151) (113 644) (263 232)
Gross profit 53 657 27 322 45 277
Other income 591 3 877 7 123
Operating expenses (excluding fair (44 536) (38 583) (86 730)
value adjustment)
Loss on fair value adjustments - - (20 784)
Total operating expenses (44 536) (38 583) (107 513)
Share of profit of equity accounted
investees 258 8 124 (890)
Finance income - - 2
Finance cost (18 998) (10 732) (2 729)
Loss (9 028) (9 992) (83 292)
Total assets 262 977 297 834 237 723
Total liabilities (323 412) 25 463 288 014
1. Basis of preparation
These condensed consolidated interim financial statements 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 and
the requirements of the Companies Act of South Africa. The accounting policies
used in the preparation of these interim financial statements are consistent
with those used in the annual financial statements for the year ended
31 December 2015. This announcement does not include the information
required pursuant to paragraph 16A(j) of IAS 34 relating to the fair
value of financial instruments. Note that there has been no material
variation in the fair value of assets subject to IAS34 since reported in
final annual financial statements as at 31 December 2015.
The condensed consolidated interim financial statements were compiled
under the supervision of PJ Lessingh (CA)SA, the Group Chief
Financial Officer.
Preparation of the financial statements in accordance with IFRS assumes
that RBA and its subsidiaries will continue to operate as going concerns.
Given that the company and certain subsidiaries have been placed under
supervision of the business rescue proceedings the business rescue
practitioner is unable to determine if they will continue to operate
as going concerns.
2. Loans and borrowings
30-Jun-16 30-Jun-15 31-Dec-15
R'000 R'000 R'000
Held at amortised cost
Total loans and borrowings 251 012 185 220 189 447
Short-term loans and borrowings 22 488 12 512 47 994
273 500 197 732 237 441
HIFSA facilities
Working capital facility 90 000 70 000 70 000
Top structure facilities 91 000 - 30 000
Total facilities 181 000 70 000 100 000
Facilities utilised 145 026 68 974 105 809
The increase in loans and borrowings for the period by R36 million is the
result of additional facilities made available by the Housing Impact
Fund of South Africa (HIFSA) subsequent to the start of the business
rescue proceedings.
3. Reconciliation of headline earnings
30-Jun-16 30-Jun-15 31-Dec-15
R'000 R'000 R'000
Loss/(profit) attributable to
equity holders (10 745) 1 037 (81 321)
Loss/(profit) on disposal of
property, plant and equipment - 649 (93)
(Profit)/loss on disposal of
investment property (37) - 1 712
Fair value adjustment of investment
property - - 20 784
Headline earnings attributable to
equity holders (10 782) 1 686 (58 919)
Headline earnings per share
Basic (loss)/earnings per share
(cents) (7,3) 0,8 (57,1)
Headline (loss)/earnings per share
(cents) (7,3) 1,2 (41,4)
Diluted (loss)/earnings per share
(cents) (7,3) 1,2 (57,1)
Weighted average number of shares 146 918 258 137 802 236 142 397 710
4. Dividends
No interim dividend has been declared during the period.
5. Related party transactions
Group entities entered into various transactions with related parties, in
the ordinary course of business, on an arm’s length basis. The nature of
related party transactions is consistent with those reported previously.
6. Subsequent events
Since the commencement of business rescue proceedings on 23 February 2016
status updates of the business rescue proceedings are issued by the business
rescue practitioner and they are available on the company’s website.
The plans for RBA Homes (Pty) Ltd, RBA Building Projects (Pty) Ltd and RBA
Executive Homes (Pty) Ltd were published on the 29th of July 2016 and approved
by creditors on 15 August 2016. The successful implementation of these plans
relate to the approval of the RBA and RBA Developments (JHB)(Pty) Ltd business
rescue plans.
7. Going concern
Preparation of the condensed consolidated interim financial statements in
accordance with IFRS assumes that RBA and its subsidiaries will continue to
operate as going concerns and requires the directors to make an assessment
of the ability to continue as going concerns.
Under the going concern assumption, an entity is viewed as continuing in business
for the foreseeable future with neither the intention nor the necessity of
liquidation, ceasing trading or seeking protection from creditors. Assets and
liabilities are recorded on the basis that the entity will be able to realise
its assets and discharge liabilities in the normal course of business.
The Group incurred a net loss for the six months ended 30 June 2016 of
R10,1 million (2015: profit R1,8 million) and at that date its total
liabilities exceeded its total assets by R60,4 million (2015: total asset
exceeded total liabilities by R43,2 million).
The business rescue practitioner is unable to determine if RBA and its
subsidiaries will continue as going concerns until such time as the
business rescue plans are finalised and approved by creditors.
8. Independent review by the auditors*
These condensed consolidated interim financial statements for the six months
ended 30 June 2016 have been reviewed by the company’s auditors KPMG Inc.
As the Business Rescue Plans have not been approved, KPMG Inc. has been unable to
obtain sufficient appropriate evidence to support the appropriateness of the
financial statements being prepared using the going concern bases of accounting.
Because of the significance of the matter disclosed above KPMG did not express a
review conclusion on the condensed consolidated interim financial statements.
A copy of the auditors review report is available for inspection at the company’s
registered office.
9. Annual general meeting
The annual general meeting of the company is anticipated to be held prior to the
year end. This date is still to be confirmed and will be communicated to all
shareholders.
10. Appreciation
The Group recognises the value of its management teams and staff and thanks
them for their loyalty and work ethic during the first half of the year.
We also thank our suppliers, business partners, advisors, clients and shareholders
for their support for the group. The improvements in the Company’s position
after many difficult years are becoming increasingly evident.
11. Directorate
The directors in office at the date of this report are as follows:
Directors Office Designation
R D V Roos Chief Executive Executive Appointed 3 October 2016
Officer
P J Lessingh Chief Financial Executive Appointed 19 October 2016
Officer
A T Schaefer Chief Financial Executive Resigned 19 October 2016
Officer
M M Long Director Development Executive Resigned 3 October 2016
and Construction
K T Hopkins* Non-executive Appointed 16 February 2015
C Glover* Acting Chairman Non-executive Appointed 9 December 2015
E Nyandoro* Non-executive Appointed 25 March 2015
M Nienaber* Non-executive Appointed 9 December 2015
* Audit and Risk Committee members. The Acting Chairman of the Audit and Risk
Committee is Ken Hopkins.
By order of the Business Rescue Practitioner
1 November 2016
T Glaum
Business Rescue Practitioner
Corporate information
Executive directors: R Roos, P Lessingh
Non-executive directors: C Glover (Acting Chairman), M Nienaber, K Hopkins,
E Nyandoro
Company Secretary: R Kleyn
Registration number: 1999/009701/06
Registered address: Nedbank Building, Cnr Biccard & Jorissen Street,
Braamfontein, 2017
Postal address: PO Box 30885, Braamfontein, 2017
Telephone: 011 483 5000
Web address: www.rbaholdings.co.za
Transfer secretaries: Computershare Investor Services (Pty) Ltd
Auditors: KPMG Inc.
Business Rescue Practitioner: T Glaum
Designated Adviser: Exchange Sponsors (2008) (Pty) Ltd
Date: 02/11/2016 09:29:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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