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BUILDMAX LIMITED - Unaudited interim financial results for the six months ended 31 August 2016

Release Date: 10/11/2016 10:19
Code(s): BDM     PDF:  
Wrap Text
Unaudited interim financial results for the six months ended 31 August 2016

Buildmax Limited
(Incorporated in the Republic of South Africa)
Registration number 1995/012209/06
Share code: BDM ISIN: ZAE000167318
("Buildmax" or the "group" or the "company")

Unaudited interim financial results for the six months ended 31 August 2016

Commentary

Trading conditions in the mining industry remain challenging and macro drivers continue to weigh
heavily on the business sectors that the group serves. The sluggish Chinese economy and
negligible growth in Europe and South Africa have resulted in a significant drop in the demand for
mining commodities, giving rise to over stocking in the supply chain.

Whilst coal prices have started to recover, Eskom's management of coal procurement, coupled
with unpredictable export demand, has resulted in very few new coal mining projects and
unpredictable production calls, consequently mine owners have become cautious to invest in
capital projects. As a result, the market for opencast mining services has diminished, triggering an
oversupply of services, increased competition, lower prices, cautious lenders, bearish investors,
labour and community unrest and a general liquidity crunch in the sector.

This environment has been exacerbated by a global surplus of second hand plant and a
substantial drop in second hand values. In South Africa, the weaker rand was followed by a
considerable increase in the cost of new plant, constraining the ability to replace and finance
equipment. Unfortunately, the increase in new equipment prices has not translated into improved
market values in respect of second hand equipment due to an oversupply of second hand
equipment and financing constraints.

The following items continue to negatively impact the company's results:

-   The limited number of new contracts combined with competition in the market has made it
    difficult to win any significant mining contracts at acceptable margins.

-   The inability to respond rapidly enough and reduce fixed costs to the changed business
    environment which requires a more flexible business model.

-   The ongoing liquidity crunch being experienced in the sector which is largely driven by bearish
    sentiment surrounding the prospects of mining in a highly regulated environment with
    unsettled legislation.

-   The depreciation of the rand against major currencies has substantially increased the price of
    spares and new equipment.

-   The escalation of mining rates has not been adequate to match cost and new capital
    equipment inflation.

During the past 24 months, management has endeavoured to change the structure of the
company to match the differing needs of the market, whilst retaining important aspects of the
support structure, such as uncompromising safety. Management has responded with the following
turnaround action plan which enabled the company to become more agile whilst still maintaining
its high standards:

-   Right-sized the business to reduce fixed costs.

-   Terminated loss making contracts.

-   Restructured bank financing to improve liquidity.

-   Adopted a less asset intensive and more flexible business model.

-   Reached a settlement agreement with creditors in Botswana.

Whilst the prospects for mining contractors have been depressed during the past three years, the
board of directors remains confident that there will always be a demand for reliable quality
opencast contractors with experience and world class management and safety systems.

Financial

The results for the interim period ended 31 August 2016, as compared to the results for the
interim period ended 31 August 2015, are summarised below:
-   Revenue from continuing operations increased by 29.7% to R420.5 million.
-   Cost saving initiatives implemented in FY2015 and FY2016 resulted in a 57.7%
    improvement in EBITDA from continuing operations from R21.4 million to R33.7 million.
-   A reduction in the operating loss from continuing operations of 74.1% from R37.1 million to
    R9.6 million.
-   Headline loss per share from continuing operations reduced by 7.9 cents (44.1%) to 
    10.0 cents from 17.9 cents.
-   Headline loss per share from discontinued operations reduced by 13.2 cents (99.3%) to 
    0.1 cents from 13.3 cents.
-   Basic loss per share from continuing operations reduced by 10.4 cents (49.1%) to 
    10.8 cents from 21.2 cents.
-   Basic loss per share from discontinued operations reduced by 17.3 cents (89.6%) to 
    1.9 cents from 19.2 cents.
-   Tangible net asset value and net asset value per share decreased from 206.5 cents to
    111.8 cents.
-   Net debt reduced by R101.6 million from R347.0 million to R245.4 million.
-   Cash generation by operating activities improved by R16.9 million to R6.4 million.
-   All banking covenants were met.

Going concern

These unaudited interim financial results have been prepared on the basis of accounting policies
applicable to a going concern. This basis presumes that funds will be available to finance future
operations and that the realisation of assets and settlement of liabilities, contingent obligations
and commitments, will occur in the ordinary course of business.

Although the group's balance sheet reflects a net asset value attributable to equity holders 
of the parent of R199.9 million and contracts are profitable at a site level, cash flow remains 
under pressure  attributable to equity holders of the parent due to lower than expected volumes.
The group reported a basic loss of R24.5 million, a 69.5% reduction when compared to the 
six months ended 31 August 2015.

As at 31 August 2016, the group's current liabilities exceeded its current assets of which 64.2% is
due to the short-term portion of its long-term debt. The company is in regular dialogue with its
lenders to ensure that sufficient funding is available to meet the company's obligations as and
when they become due.

The company continued to record a loss primarily due to relatively low coal demand resulting in
increased pressure on the outsourced contract mining services sector. This was offset, to some
extent, by various cost control measures which have resulted in an improvement in performance
and cash flow generation.

Market conditions are expected to remain tough for the industry in the foreseeable future and the
company continues to focus on improving efficiencies and increasing production levels.

The company has not accounted for any possible benefit from the liquidation process of Messina
Copper Botswana Proprietary Limited ("Messina Copper Botswana") in its interim results. The
company refers shareholders to the SENS announcement made by ZCI Limited (share code ZCI
ISIN: BMG9887P1068) ("ZCI") on 3 October 2016 regarding the possible proceeds arising as a
result of the liquidation of Messina Copper Botswana, the operating subsidiary of ZCI's subsidiary,
African Copper Plc.

The board of directors is satisfied that the group is a going concern and has therefore applied the
going concern principle in preparation of these interim financial results.

Safety and quality management

The mining division has maintained and boasts a proud track record of more than 55 million
fatality free injury hours and almost 6 million fatality free shifts. Safety is a core value of the group
and is integral to the way in which it conducts its business. This is demonstrated by its
commitment to high standards and assignment of specific responsibilities for safety. The value the
group places on the safety of employees and sub-contractors is reflected in the safety vision,
"Committed to Efficient Zero Harm Production".

The safety policy and framework supports our safety vision, provides direction and sets standards
for operations to develop and manage their proactive safety programs and strategies with the
objective of continuously improving safety performance. The company's operations continue to
maintain certification for the OHSAS 18001: 2007 health and safety management standard, as
well as the ISO 9001: 2008 quality management standard.

People

The quality of our people is a critical source of our competitive advantage. The company
recognises that, in order to achieve the sustained high performance that is necessary to meet the
demands of its business environment, it needs to attract, retain and continuously develop its
employees at all levels. Whilst retaining key staff, we ran various voluntary retrenchment
programmes due to lower volumes of work and the closing down of the civils division which has
resulted in significant cost savings.

Sustainability

The board of directors and the executive leadership team remain committed to building a
sustainable business that takes into account the economic, social and environmental impacts on
the communities in which the group operates.

Transformation

Under its current BEE certification, Diesel Power Opencast Mining (Pty) Ltd ("Diesel Power")
maintains a Level 5 BEE rating.

Governance

Buildmax complies with the Companies Act, 71 of 2008 and the Listings Requirements of the JSE
Limited.

Outlook, prospects and strategy

We believe that the current slowdown in the demand for commodities is cyclical. Whilst the
prospects for contract mining have been depressed during the past three years, we remain confident
that there will always be a demand for reliable quality opencast contractors with experience and
world class management and safety systems.

A major concern that is prevalent is the ongoing liquidity crunch being experienced in the sector.
This is largely driven by low commodity prices and bearish sentiment about the prospects in
mining in a highly regulated environment.

Buildmax remains of the view that the following strategic drivers are imperative to remain
competitive, retain clients and win new business in this challenging sector:

    - Industry consolidation.

    - Improved pricing.

    - Cost management.

    - Asset-light business model.

    - Leverage our management information and SHERQ systems.

    - Knowledge management (IP).

    - Sector turn-around.

    - Stability at Eskom.

    - Transformation.

Management acknowledge that transformation is a business imperative and have identified the
steps that need to be taken in order to increase Diesel Power's BEE shareholding from the
current 47.15% to an excess of 51% black ownership. It is anticipated that this process will be
completed by 28 February 2017.

Dividend

There was no interim dividend declared by Buildmax.

Changes to the board of directors

Shareholders are referred to the announcement released by the company on SENS on
1 November 2016 in which shareholders were advised of the following changes to the board of
directors:

    -   Mr Terry Bantock resigned as Chief Executive Officer with effect from 31 October 2016
        and will remain on the board of directors of Buildmax as a non-executive director; and

    -   Mr Graeme Montgomery, currently a non-executive director of Buildmax, has been
        appointed by the board of directors as Chief Executive Officer with effect from 
        1 November 2016.

Acknowledgements

The board would like to express its appreciation to all its customers, staff, business partners,
shareholders and other stakeholders for their support and continued confidence in the
sustainability of the group and its underlying business.

On behalf of the board:

Colin Wood                   Graeme Montgomery                     Christie Els
Chairman                     CEO                                   CFO

Johannesburg
10 November 2016


Notes to the unaudited interim financial results for 6 months ended 31 August 2016

This interim report should be read in conjunction with the Buildmax 2016 integrated report
which is available at www.buildmax.co.za.

Approval of the interim financial results

The unaudited interim financial results have been prepared in accordance with International
Financial Reporting Standards, IAS 34: Interim Financial Reporting, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee, the Financial
Pronouncements as issued by the Financial Reporting Standards Council, the JSE Listings
Requirements and the Companies Act, 71 of 2008.

The accounting policies used in the preparation of these interim results are consistent with those
used in the annual financial results for the year ended 29 February 2016, which have been
prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB). The group interim financial results have been
prepared on the historical cost basis.

This report and the financial statements were compiled under the supervision of Mr CS Els, 
Chief Financial Officer, CA (SA). These results have not been reported on or reviewed by 
the company's auditors.

The interim financial results have been prepared on a going concern basis as the board of
directors believe that the company and the group will continue to be in operation for the
foreseeable future.

The interim financial results were approved by the board of directors on 27 October 2016.

Estimates and contingencies

Management makes estimates and judgments concerning the future with regards to opencast
mining contracts, provisions, claims, depreciation methods and residual values when estimating
the recoverable amounts of assets.

The resulting estimates and judgments can only approximate the actual results. Estimates and
judgments are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the
circumstances.

The group has contingent liabilities in respect of legal claims and contractual guarantees
arising in the ordinary course of business. It is anticipated that no material liabilities will arise
from the contingent liabilities other than those provided for.

Assets held for sale and discontinued operations

Diesel Power Botswana, Diesel Power Congo, the Aggregates and Quarries business and the
civils and earthworks division have been reported as discontinued operations and the FY2016
interim results for discontinued operations have been restated to include the results of Diesel
Power Botswana and Diesel Power Congo. Consequently, the continuing operations FY2016
interim results have been restated to exclude Diesel Power Botswana and Diesel Power Congo.
These changes are reflected in the table below:

Condensed consolidated statement of comprehensive income at 31 August 2015 as previously reported

                                                                                   Continuing  Discontinued
                                                                                   operations    operations      Total
                                                                                        R'000         R'000      R'000
 
Revenue                                                                               462 680         1 556    464 236
 
Operating profit before depreciation and amortisation ("EBITDA")                       41 206         (964)     40 242
 
Depreciation                                                                         (68 410)             -   (68 410)
Operating loss                                                                       (27 204)         (964)   (28 168)
  
Impairment of trade receivable                                                       (45 158)             -   (45 158)
Impairment of property, plant and equipment                                          (13 106)             -   (13 106)
Loss before interest and taxation ("PBIT")                                           (85 468)         (964)   (86 432)
 
Net interest paid                                                                    (19 548)          (52)   (19 600)
Interest paid                                                                        (19 956)         (101)   (35 695)
Interest received                                                                         408            49        457
Loss before taxation ("PBT")                                                        (105 016)       (1 016)  (106 032)

Taxation                                                                               25 884          (57)     25 827
Loss for the period                                                                  (79 132)       (1 073)   (80 205)

Other comprehensive loss for the period:
Foreign currency translation reserve                                                      601             -        601
Total comprehensive loss for the period                                              (78 531)       (1 073)   (79 604)

Condensed consolidated statement of comprehensive income at 31 August 2015 as currently reported

                                                                                   Continuing  Discontinued
                                                                                   operations    operations      Total
                                                                                        R'000         R'000      R'000

Revenue                                                                               324 243       139 993    464 236

Operating profit before depreciation and amortisation ("EBITDA")                       21 364        18 878     40 242

Depreciation                                                                         (58 428)       (9 981)   (68 409)
Operating loss                                                                       (37 064)         8 897   (28 167)

Impairment of trade receivable                                                        (4 052)      (41 106)   (45 158)
Impairment of property, plant and equipment                                                 -      (13 106)   (13 106)
Loss before interest and taxation ("PBIT")                                           (41 116)      (45 315)   (86 431)

Net interest paid                                                                    (17 843)       (1 758)   (19 601)
Interest paid                                                                        (17 847)       (2 211)   (35 695)
Interest received                                                                           4           453        457
Loss before taxation ("PBT")                                                         (58 959)      (47 073)  (106 032)

Taxation                                                                               13 009        12 818     25 827
Loss for the period                                                                  (45 951)      (34 255)   (80 205)

Other comprehensive loss for the period:
Foreign currency translation reserve                                                      601             -        601
Total comprehensive loss for the period                                              (45 350)      (34 255)   (79 604)
                                           
Events after the reporting period.

There are no material events after the reporting period to.

Mining services and equipment sales & rental

The scope of these services include expertise in mine planning, pit design, production scheduling,
drilling and blasting, opencast mining, pillar mining, surveying and mine rehabilitation. The
companies that form part of the business include:

-   Diesel Power
-   Buildmax Equipment
-   Diesel Power Botswana (discontinued operation)
-   Diesel Power Congo (discontinued operation)
-   Civils and earthworks (discontinued operation).

As tough trading conditions continue in South Africa, with a particularly negative impact on the
construction industry, the prospects for civils contractors are poor and, as there are no meaningful
projects on the horizon, this division was closed at the end of February 2016.


The mining services business will, however, tender for selected civils work that is strategic to its
mining activities and respective clients.


Aggregates and quarries (discontinued operation)

Letamo quarry, currently in care and maintenance, is still owned by the group and an expression
of interest has been received to purchase it. Post year-end, Letamo saw renewed interest in that
area for its aggregate.

Letamo, together with the remaining assets and related liabilities of Buildmax Aggregates and
Quarries, continue to be classified as "held for sale".

Condensed consolidated statement of financial position
                                                                                        Unaudited           Unaudited               Audited
                                                                                   31 August 2016      31 August 2015      29 February 2016
                                                                                            R'000               R'000                 R'000
ASSETS                                
Non-current assets                                
Property, plant and equipment                                                             401 645             664 638               474 866
Deferred taxation                                                                          33 293              52 879                27 521
                                                                                          434 938             717 517               502 387
Current assets                                
Inventories                                                                                10 743              12 272                10 351
Trade and other receivables                                                               128 939             154 645               140 019
Taxation receivable                                                                         5 594               3 241                 6 387
Bank and cash balances                                                                     24 774              15 800                47 677
                                                                                          170 050             185 957               204 434
Assets classified as held for sale                                                         13 979              14 006                13 747
Total assets                                                                              618 967             917 480               720 568
                                
EQUITY AND LIABILITIES                                
Share capital and premium                                                               2 007 662           1 994 196             2 007 662
BEE IFRS 2 cost                                                                             1 195               1 195                 1 195
Foreign currency translation reserve                                                        7 361               1 218                 4 371
Share based payment reserve                                                                     -              13 466                     -
Accumulated loss                                                                      (1 816 298)         (1 640 913)           (1 793 299)
Attributable to equity owners of the parent                                               199 920             369 162               219 929
Non controlling interest                                                                 (49 726)            (31 082)              (48 043)
Total shareholders' interests                                                             150 194             338 080               171 886
                                
Non-current liabilities                                
Interest-bearing liabilities                                                                7 366              24 653                41 728
Term loan                                                                                 123 915             175 470               123 915
Capitalised finance leases                                                                  7 238              18 385                 9 777
Deferred taxation                                                                          14 618              11 575                14 618
                                                                                          153 137             230 083               190 038
Current liabilities                                
Interest-bearing liabilities                                                               28 189              19 138                26 231
Term loan                                                                                  50 888              64 779                50 887
Capitalised finance leases                                                                 10 929              23 701                21 320
Trade and other payables                                                                  178 301             199 555               208 427
Taxation payable                                                                                -                   -                 1 820
Bank overdrafts                                                                            41 612              36 678                44 454
                                                                                          309 919             343 851               353 139
Liabilities directly associated with                                 
assets held for sale                                                                        5 717               5 465                 5 505
Total equity and liabilities                                                              618 967             917 479               720 568
                                
Shares in issue at end of period                                                          178 782             178 782               178 782
Net asset value per share (cents)                                                           111.8               206.5                 123.0
Tangible net asset value per share (cents)                                                  111.8               206.5                 123.0
                               
Condensed consolidated statement of comprehensive income
                                                                                        Unaudited  Restated unaudited               Audited
                                                                                   6 months ended      6 months ended            year ended
                                                                                   31 August 2016      31 August 2015      29 February 2016
                                                                                            R'000               R'000                 R'000
Continuing operations
Revenue                                                                                   420 466             324 243               704 940
Gross profit                                                                               71 742              83 675               137 528
Operating profit/(loss) before depreciation and amortisation ("EBITDA")                    33 684              21 364               (9 601)

Depreciation                                                                             (43 281)            (58 428)             (112 093)
Operating loss                                                                            (9 597)            (37 064)             (121 694)

Impairment of trade receivable                                                                  -             (4 052)                     -
Impairment of property, plant and equipment                                                     -                   -                 (413)
Loss before interest and taxation ("PBIT")                                                (9 597)            (41 116)             (122 107)

Net interest paid                                                                        (18 239)            (17 843)              (35 642)
Interest paid                                                                            (18 241)            (17 847)              (35 695)
Interest received                                                                               2                   4                    53
Loss before taxation ("PBT")                                                             (27 836)            (58 959)             (157 749)

Taxation                                                                                    6 778              13 009                 6 002
Loss for the period before discontinued operations ("PAT")                               (21 058)            (45 951)             (151 747)
After tax loss from discontinued operations (see note below)                              (3 425)            (34 255)              (97 805)
Loss for the period                                                                      (24 483)            (80 205)             (249 552)

Other comprehensive loss for the period:
Foreign currency translation reserve                                                        2 990                 601                 3 754
Total comprehensive loss for the period                                                  (21 492)            (79 604)             (245 798)

Loss for the period attributable to:
Equity owners of the parent                                                              (22 799)            (72 141)             (224 527)
Non controlling interest                                                                  (1 683)             (8 064)              (25 025)
                                                                                         (24 483)            (80 205)             (249 552)

Total comprehensive loss for the period attributable to:
Equity owners of the parent                                                              (19 809)            (71 540)             (220 773)
Non controlling interest                                                                  (1 683)             (8 064)              (25 025)
                                                                                         (21 492)            (79 604)             (245 798)

Reconciliation of headline loss 
                                                                                        Unaudited  Restated unaudited              Audited
                                                                                   6 months ended      6 months ended           year ended
                                                                                   31 August 2016      31 August 2015     29 February 2016
                                                                                            R'000               R'000                R'000
Continuing operations
Loss for the period attributable to shareholders of Buildmax                             (19 375)            (37 887)            (137 107)
Adjusted for:

Add back loss on disposal of property, plant and equipment                                  1 566               5 849               38 790
- Gross                                                                                     2 174               8 125               53 875
- Taxation                                                                                  (608)             (2 275)             (15 085)

Impairment of property, plant and equipment, goodwill and intangibles                           -                   -                  297
 - Gross                                                                                        -                   -                  413
 - Taxation                                                                                     -                   -                (116)
 
Headline loss attributable to ordinary shareholders                                      (17 809)            (32 037)             (98 020)

                                                                                        Unaudited  Restated unaudited              Audited
                                                                                   6 months ended      6 months ended           year ended
                                                                                   31 August 2016      31 August 2015     29 February 2016
                                                                                            R'000               R'000                R'000
Discontinued operations
Loss for the period attributable to shareholders of Buildmax                              (3 425)            (34 255)             (87 420)
Adjusted for:

Add back profit on disposal of property, plant and equipment                                3 259                 277                1 923
- Gross                                                                                     4 178                 384                2 465
- Taxation                                                                                  (919)               (107)                (542)

Impairment of property, plant and equipment, goodwill and intangibles                           -              10 223               33 426
 - Gross                                                                                        -              13 106               42 854
 - Taxation                                                                                     -             (2 883)              (9 428)

Headline loss attributable to ordinary shareholders                                         (166)            (23 755)             (52 071)

Supplementary information
Loss per share
                                                                                        Unaudited  Restated unaudited              Audited
                                                                                   6 months ended      6 months ended           year ended
                                                                                   31 August 2016      31 August 2015     29 February 2016
                                                                                            cents               cents                cents
Headline loss per share (cents)*                                                           (10.1)              (31.2)               (84.0)
Continuing operations                                                                      (10.0)              (17.9)               (54.8)
Discontinued operations                                                                     (0.1)              (13.3)               (29.1)

Basic loss per share (cents)*                                                              (12.8)              (40.4)              (125.6)
Continuing operations                                                                      (10.8)              (21.2)               (76.7)
Discontinued operations                                                                    (2.60)              (19.2)               (48.9)
          
Shares in issue ('000)          
- at end of the period                                                                    178 782             178 782              178 782
- weighted                                                                                178 782             178 782              178 782
* There were no dilutionary instruments in issue.

Condensed consolidated statement of cash flows
                                                                                        Unaudited  Restated unaudited             Audited
                                                                                   6 months ended      6 months ended          year ended
                                                                                   31 August 2016      31 August 2015    29 February 2016
                                                                                            R'000               R'000               R'000
Operating activities
Loss before taxation                                                                     (31 723)           (106 032)           (247 600)
Working capital movement                                                                 (19 439)            (41 521)              31 157
Impairment of property, plant and equipment, trade receivable, 
goodwill and intangible assets                                                                  -              58 264              43 267
Other non-cash flow items                                                                  57 274              77 356             165 952
Net interest paid                                                                          19 999              19 600              40 349
Cash generated from operations                                                             26 111               7 667              33 125
Net interest paid in cash                                                                (19 999)            (19 600)            (40 349)
Dividend paid                                                                               (200)               (200)               (200)
Taxation received / (paid)                                                                    440               1 570             (1 857)
Cash generated from / (utilised by)  operating activities                                   6 352            (10 563)             (9 281)

Investing activities
Purchase of property, plant and equipment
- Expanding operations                                                                          -                   -                   -
- Maintaining operations                                                                  (2 567)            (10 765)            (31 943)
Environmental guarantee investment                                                          (315)                   -               (825)
Proceeds on disposal of held for sale mining rights and related fixed properties                -                   -              37 000
Proceeds on disposal of property, plant and equipment as well as assets held for sale      21 500              47 297             107 389
Net cash generated from investing activities                                               18 618              36 532             111 621

Financing activities
Interest-bearing liabilities raised                                                             -              31 172              41 712
Interest-bearing liabilities repaid                                                      (45 332)            (25 133)            (87 943)
Net cash flows (utilised by) / generated from financing activities                       (45 332)               6 039            (46 231)

Net (decrease) / increase in cash and cash equivalents                                   (20 362)              32 008              56 109
Cash and cash equivalents at the beginning of the period                                    3 223            (52 886)            (52 886)
Cash and cash equivalents at the end of the period                                       (17 139)            (20 878)               3 223

Categories of cash flow split between continued and discontinued operations
Net cash outflow from operating activities                                                  6 654            (10 563)             (9 281)
-Continuing operations                                                                     39 039            (19 869)               1 137
-Discontinued operations                                                                 (32 385)               9 306            (10 418)
Net cash inflow/(outflow) from investing activities                                        18 618              36 532             111 621
-Continuing operations                                                                   (15 306)               1 099              60 086
-Discontinued operations                                                                   33 924              35 433              51 535
Net cash outflow from finance activities                                                 (45 333)               6 039            (46 231)
-Continuing operations                                                                    (3 939)              22 572            (32 774)
-Discontinued operations                                                                 (41 394)            (16 533)            (13 457)

Split of net cash and cash equivalents netween South African and foreign operations
South African operations                                                                 (17 189)            (21 652)               1 819
-Continuing operations                                                                   (18 867)            (25 161)               (512)
-Discontinued operations                                                                    1 678               3 509               2 331
Foreign operations                                                                            351                 774               1 404
-Continuing operations                                                                          -                   -                   -
-Discontinued operations                                                                      351                 774               1 404

Cash and cash equivalents at the end of the period                                       (16 838)            (20 878)               3 223

Condensed consolidated statement of changes in equity
                                                                                                                                                                            Non            Total
                                               Share capital and          Share based     BEE IFRS2      Foreign currency    Accumulated   Attributable to equity   controlling    shareholders'
                                                         premium      payment reserve         costs   translation reserve           loss     owners of the parent      interest         interest
                                                           R'000                R'000         R'000                 R'000          R'000                    R'000         R'000            R'000
Balances as at 28 February 2015                        1 994 196               13 466         1 195                   617    (1 568 572)                  440 902      (23 018)          417 884

Total comprehensive loss for the period
  Continuing operations                                        -                    -             -                     -       (42 582)                 (42 582)       (3 369)         (45 951)
  Discontinued operations                                      -                    -             -                   601       (29 559)                 (28 959)       (4 695)         (33 653)
 
Dividend paid                                                  -                    -             -                     -          (200)                    (200)             -            (200)

Balances as at 31 August 2015                          1 994 196               13 466         1 195                 1 218    (1 640 913)                  369 162      (31 082)          338 080

Total comprehensive loss for the period (Restated)
  Continuing operations                                        -                    -             -                     -       (66 039)                 (66 039)      (11 271)         (77 310)
  Discontinued operations                                      -                    -             -                 3 153       (86 347)                 (83 194)       (5 690)         (88 884)
Transfer from share based payment reserve to
share premium                                             13 466             (13 466)             -                     -              -                        -             -                -
Dividend paid                                                  -                    -             -                     -              -                        -             -                -

Balances as at 29 February 2016                        2 007 662                    -         1 195                 4 371    (1 793 299)                  219 929      (48 043)          171 886
 
Total comprehensive loss for the period 
  Continuing operations                                        -                    -             -                     -       (19 374)                 (19 374)       (1 383)         (20 757)
  Discontinued operations                                      -                    -             -                2 990         (3 425)                    (435)         (300)            (735)
 
Dividend paid                                                  -                    -             -                     -          (200)                    (200)             -            (200)

Balances as at 31 August 2016                          2 007 662                    -         1 195                 7 361    (1 816 298)                  199 920      (49 726)          150 194


Condensed segmental analysis
                                                                                        Unaudited Restated unaudited              Audited
                                                                                   6 months ended     6 months ended           year ended
                                                                                   31 August 2016     31 August 2015     29 February 2016
                                                                                            R'000              R'000                R'000

EXTERNAL REVENUE
Continuing operations                                                                     420 466            324 243              704 940
Mining Services - Diesel Power                                                            420 466            324 243              704 940
Mining Services - Equipment sales and rental                                                    -                  -                    -
Total Mining Services                                                                     420 466            324 243              704 940
Civils and Earthworks                                                                           -                  -                    -

Discontinued operations                                                                    17 040            139 993              239 675
Africa open cast mining operations (Congo and Botswana)                                     9 241             65 526              121 067
Civils and Earthworks                                                                       5 710             72 911              115 564
Aggregates and Quarries                                                                     2 089              1 556                3 044

                                                                                          437 506            464 236              944 615

INTER-SEGMENT REVENUE
Continuing operations                                                                       6 987              4 181               13 868
Mining Services - Diesel Power                                                                  -                  -                    -
Mining Services - Equipment sales and rental                                                6 987              4 181               13 868
Total Mining Services                                                                       6 987              4 181               13 868
Civils and Earthworks                                                                           -                  -                    -

Discontinued operations                                                                     9 241                  -                    -
Africa open cast mining operations (Congo and Botswana)                                     9 241                  -                    -
Civils and Earthworks                                                                           -                  -                    -
Aggregates and Quarries                                                                         -                  -                    -

                                                                                           16 228              4 181               13 868

EBITDA
Continuing operations                                                                      33 684             21 364              (9 600)
Mining Services - Diesel Power                                                             39 325             27 793             (10 677)
Mining Services - Equipment sales and rental                                                2 605              (837)                4 397
Total Mining Services                                                                      41 930             26 956              (6 282)
Civils and Earthworks                                                                           -                  -                    -
Corporate head office                                                                     (8 246)            (5 592)              (3 319)

Discontinued operations                                                                     2 524             18 878             (27 319)
Africa open cast mining operations (Congo and Botswana)                                     3 837             12 399             (33 984)
Civils and Earthworks                                                                     (1 020)              7 443                9 240
Aggregates and Quarries                                                                     (293)              (964)              (2 575)

                                                                                           36 208             40 243             (36 920)
 
OPERATING LOSS BEFORE INTEREST, AMORTISATION AND IMPAIRMENT 
Continuing operations                                                                     (9 597)           (37 064)            (121 694)

Mining Services - Diesel Power                                                            (3 536)           (29 586)            (121 247)
Mining Services - Equipment sales and rental                                                2 185            (1 768)                2 989
Total Mining Services                                                                     (1 351)           (31 354)            (118 258)
Civils and Earthworks                                                                           -                  -                    -
Corporate head office                                                                     (8 246)            (5 710)              (3 436)
              
Discontinued operations                                                                   (2 127)              8 897             (42 290)
Africa open cast mining operations (Congo and Botswana)                                     (814)              2 418             (48 955)
Civils and Earthworks                                                                     (1 020)              7 443                9 240
Aggregates and Quarries                                                                     (293)              (964)              (2 575)
              
                                                                                         (11 724)           (28 167)            (163 984)

After tax loss from discontinued operations:
                                                                                        Unaudited          Unaudited              Audited
                                                                                   6 months ended     6 months ended           year ended
                                                                                   31 August 2016     31 August 2015     29 February 2016
                                                                                            R'000              R'000                R'000

Revenue                                                                                    17 040            139 993              239 675
Gross profit                                                                                (356)              7 539               61 973
Operating loss before depreciation and amortisation ("EBITDA")                              2 524             18 878             (27 319)

Depreciation                                                                              (4 651)            (9 981)             (14 971)
Operating loss before amortisation                                                        (2 127)              8 897             (42 290)

Impairment of trade receivable                                                                  -           (41 106)                    -
Impairment of property, plant and equipment                                                     -           (13 106)                    -
Impairment of goodwill and intangible assets                                                    -                  -             (42 854)
Loss before interest and taxation ("PBIT")                                                (2 127)           (45 315)             (85 144)
 
Net interest paid                                                                         (1 760)            (1 758)              (4 707)
Interest paid                                                                             (1 811)            (2 211)              (5 208)
Interest received                                                                              51                453                  501
Loss before taxation ("PBT")                                                              (3 887)           (47 073)             (89 851)

Taxation                                                                                      462             12 818              (7 954)
Loss for the period ("PAT")                                                               (3 425)           (34 255)             (97 805)

Directors
G Montgomery (CEO)
CS Els (CFO)
J Mathebula
CB Brayshaw*#
MD Lamola*
DJ Mack*
MW McCulloch*#
T Bantock*
BT Ngcuka*
CJM Wood*# (Chairman)
*Non-executive
#Independent

Company secretary
GH Miller

Registered office
Reef Insurance Brokers Building
2 Mowbray Avenue
Benoni
1500
(PO Box 11962, Rynfield, 1514)

Sponsor
Questco (Pty) Ltd
1st Floor, Yellowwood House
Ballywoods Office Park
33 Ballyclare Drive
Bryanston, 2021

Auditors
Grant Thornton Johannesburg Partnership
Registered Auditors and Chartered Accountants (SA)
52 Corlett Drive, Wanderers Office Park
Illovo, 2196

Transfer secretaries
Computershare Investor Services (Pty) Ltd
70 Marshall Street
Johannesburg, 2001
(PO Box 61763, Marshalltown, 2107)

www.buildmax.co.za
Date: 10/11/2016 10:19:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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