Wrap Text
Abridged consolidated financial statements for year ended 29 February 2016 and notice of AGM
BRIKOR LIMITED
("the Group")
(Incorporated in the Republic of South Africa)
Registration number 1998/013247/06
JSE code: BIK
ISIN: ZAE000101945
Abridged consolidated financial statements
for the year ended 29 February 2016 and notice of annual general meeting
HIGHLIGHTS
- Total debt decreased by 37,8 % to R184 million
- Net asset value per share increased by 236,4 % to 7,4 cents per share
- Net tangible asset value per share increased by 5 400,0 % to 5,5 cents per share
- Operating profit increased by 91,8 % to R49 million
- EBITDA increased by 48,5 % to R67 million
- Headline earnings per share increased by 107,4 % to 5,6 cents per share
- Earnings per share increased by 246,7 % to 5,2 cents per share
PREPARED BY:
The abridged consolidated financial results (“abridged financial results” or “results”) for the year ended 29 February 2016 were
prepared by Laura Craig CA(SA) (group financial manager) under the supervision of Andre Hanekom (chief financial officer).
AUDITOR’S OPINION
This abridged consolidated financial results are extracted from audited information but is not itself audited. The directors take full
responsibility for the preparation of the abridged consolidated financial results and the correct extraction of the financial information
included herein from the underlying annual financial statements. The financial statements were audited by KPMG Inc., and the audit
report thereon is available for inspection at the company’s registered office. The auditor’s report is unmodified, however includes the
following paragraph with respect to reportable irregularities:
“In accordance with our responsibilities in terms of section 44(2) and 44(3) of the Auditing Profession Act, we report that we have
identified reportable irregularities in terms of the Auditing Profession Act. We have reported these matters to the Independent
Regulatory Board for Auditors.” The matters pertaining to the reportable irregularities have been described in note 6 to the abridged
consolidated financial results.
OVERVIEW
The directors of Brikor are pleased to present the abridged consolidated financial results for the year ended 29 February 2016, which
reflect continued growth and improvement.
Brikor is a diverse manufacturer and supplier of building and construction materials across a broad spectrum of the market from low-
cost housing, residential to commercial, industrial, civil engineering and infrastructure projects. The group operates through three
divisions, namely bricks, aggregates and coal (through its subsidiary, Ilangabi Investments 12 (Pty) Ltd).
The group’s overall financial indicators improved substantially in a competitive trading environment through effective cost management
initiatives and a concerted effort to maintain and improve sustainable working capital levels. The continued focus on the group’s core
operations and the coal operations were maintained.
FINANCIAL RESULTS
In a competitive operating environment, revenue remained relatively consistent at R317,0 million (2015: R318,2 million) and gross profit
percentage increased by 3,4 % to R86,9 million (2015: R76,5 million). The improvement in gross profit was mainly from higher gross
profit contributions achieved by the bricks and coal segments, contributing to the additional R10,3 million in gross profit.
Control of input costs in production, through the wholly-owned mining subsidiary Ilangabi Investments 12 (Pty) Ltd, and the additional
revenue generated through the sale of the additional coal derived through the mining process, provided the natural synergy which
continued to grow external revenues and reduce production input costs.
Operating expenses decreased substantially to R43,7 million (2015: R47,6 million) as a result of efforts to keep expenses to an
absolute minimum for fundamental business critical expenditure only.
The above measures resulted in the group generating an operating profit before interest and taxation of R48,6 million (2015: R25,3
million).
The group ended with a total profit and other comprehensive income of R32,8 million (2015: R9,5 million), resulting in earnings per
share of 5,2 cents (2015: 1,5 cents) and fully diluted earnings per share of 5,2 cents (2015: 1,5 cents) for the year.
Capital expenditure
For the year under review capital expenditure amounted to R18,4 million, the material values being invested as follows:
Plant and equipment of R16,7 million made up as follows:
– Aggregates segment – R2,1 million on fixed plant and R1,6 million on mobile plant;
– Coal segment – R0,1 million on fixed plant and R11,6 million on mobile plant; and
– Bricks segment – R0,1 million on fixed plant, R0,9 million mobile plant and R0,25 million on workshop equipment.
Motor vehicles of R1,7m made up as follows:
– Bricks segment – R0,9 million on four motor vehicles; and
– Coal segment – R0,5 million on three motor vehicles and a truck for R0,3 million.
Total property, plant and equipment decreased to R109,2 million (2015: R114,4 million) as a net result of:
- additions to property, plant and equipment of R18,4 million (2015: R17,1 million);
- disposals/scrapping of property, plant and equipment of R6,5 million (2015: R1,0 million);
- depreciation of R16,8 million (2015: R11,7 million);
- impairment of property, plant and equipment of Rnil (2015: R7,1 million); and
- downward adjustment of decommissioning assets of R0,4 million (2015: capitalisation of R0,044 million) relating to the environmental
provision.
Consolidated statement of financial position
as at 29 February 2016
2016 2015
R'000 R'000
ASSETS
Non-current assets 134,445 140,332
Property, plant and equipment 109,202 114,393
Intangible assets 12,320 13,656
Other financial assets 12,714 12,283
Deferred tax asset 209 -
Current assets 96,617 169,770
Inventories 45,499 38,305
Trade and other receivables 29,871 36,974
Cash and cash equivalents 21,247 94,491
Total assets 231,062 310,102
EQUITY AND LIABILITIES
Equity attributable to equity holders of the company 46,854 14,007
Stated capital 228,242 228,242
Accumulated loss (181,388) (214,235)
Non-current liabilities 95,616 85,860
Borrowings 5,582 8,884
Shareholders' loans 43,115 35,134
Provisions 46,919 41,597
Deferred tax liability - 245
Current liabilities 88,592 210,235
Borrowings 9,984 109,004
Trade and other payables 58,661 83,475
Taxation 19,947 17,756
Total equity and liabilities 231,062 310,102
Consolidated statement of profit or loss and other comprehensive income
for the year ended 29 February 2016
Notes 2016 2015
R'000 R'000
Revenue 317,002 318,229
Cost of sales (230,126) (241,695)
Gross profit 86,876 76,534
Other income 5,376 3,479
Administrative expenses (32,570) (37,827)
Expenses (32,570) (30,714)
Impairments - (7,113)
Distribution expenses (4,374) (3,603)
Other expenses (6,725) (13,251)
Operating profit before interest and taxation 48,583 25,332
Finance income 3,083 1,657
Finance costs (13,505) (15,384)
Profit before taxation 38,161 11,605
Taxation (5,314) (2,129)
Profit after taxation 32,847 9,476
Total comprehensive income for the year attributable to owners of the company 32,847 9,476
EARNINGS PER SHARE 2 cents cents
Basic
Continuing operations 5.2 1.5
Diluted
Continuing operations 5.2 1.5
Consolidated statement of changes in equity
for the year ended 29 February 2016
Treasury Accumulated
Stated capital shares loss Total equity
R'000 R'000 R'000 R'000
Balance at 28 February 2014 244,142 (15,900) (223,711) 4,531
Total comprehensive income for the year - - 9,476 9,476
Balance at 28 February 2015 244,142 (15,900) (214,235) 14,007
Total comprehensive income for the year - - 32,847 32,847
Balance at 29 February 2016 244,142 (15,900) (181,388) 46,854
Consolidated statement of cash flows
for the year ended 29 February 2016
2016 2015
R'000 R'000
Cash flows from operating activities 37,086 73,525
Cash generated from operations 48,010 83,536
Finance income 3,083 1,657
Finance costs (8,623) (11,668)
Tax paid (5,384) -
Cash flows to investing activities (15,989) (19,128)
Additions to property, plant and equipment (18,450) (17,054)
Proceeds on disposal of property, plant and equipment 4,340 701
Increases in investments into other financial assets (1,879) (2,775)
Cash flows to/from financing activities (94,341) 19,049
Borrowings raised 18,600 21,326
Borrowings repaid (112,941) (2,277)
Net (decrease)/increase in cash and cash equivalents (73,244) 73,446
Cash and cash equivalents at beginning of year 94,491 21,045
Cash and cash equivalents at end of year 21,247 94,491
Notes to the consolidated financial statements
for the year ended 29 February 2016
1 BASIS OF PREPARATION AND ACCOUNTING POLICIES
The summarised consolidated abridged financial statements are prepared in accordance with the requirements of the JSE Limited
Listings Requirements for abridged reports and the requirements of the Companies Act of South Africa applicable to summary financial
statements. The Listings Requirements require abridged reports to be prepared in accordance with the framework concepts and the
measurement and recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting
Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting.
The accounting policies applied in the preparation of the consolidated financial statements, from which the abridged financial results
were derived, are in terms of International Financial Reporting Standards and are consistent with the accounting policies applied in the
preparation of the previous consolidated financial statements.
The abridged consolidated financial results have been prepared on the historic cost conversion, except for certain financial instruments,
which are stated at fair value. The results are presented in Rand rounded to the nearest thousand (R’000).
2 EARNINGS PER SHARE
2016 2015
cents cents
Basic
Continuing operations 5.2 1.5
Diluted
Continuing operations 5.2 1.5
Headline earnings per share
Continuing operations 5.6 2.7
Diluted headline earnings per share
Continuing operations 5.6 2.7
The calculation of the basic earnings per share attributable to the ordinary equity holders is based on the following information:
Reconciliation between basic earnings and headline earnings as well as diluted earnings
Continued
Total
operations
R'000 R'000
2016
Profit
Basic and diluted profit 32,847 32,847
Loss on disposal of property, plant and equipment 669 669
Loss on scrapping of property, plant and equipment 1,449 1,449
Headline and diluted headline profit 34 965 34 965
2015
Profit
Basic and diluted profit 9,476 9,476
Impairments of assets 7,113 7,113
Loss on the disposal of property, plant and equipment 268 268
Headline and diluted headline profit 16 857 16 857
2016 2015
'000 '000
Number of shares
Weighted average number of shares 629,342 629,342
Diluted weighted average number of shares 629,342 629,342
3 SEGMENTAL REPORTING
Segmental revenues and results
The following is an analyses of the group's revenue and results from operations by reportable segments:
Segment profit reconciliation
Brick
Manufacturing Coal Aggregates *Other Total
R'000 R'000 R'000 R'000 R'000
2016
Total revenue 172,612 114,283 37,935 - 324,830
Intersegmental revenue - (7,828) - - (7,828)
Reportable segment revenue 172,612 106,455 37,935 - 317,002
Gross profit 51,801 29,351 5,724 - 86,876
Other income 3,388 922 1,066 - 5,376
Operating profit before interest and taxation 33,811 12,334 2,438 - 48,583
Segment assets and liabilities
Segment assets 68,272 69,446 71,888 21,456 231,062
Segment liabilities (37,720) (74,265) (9,161) (63,062) (184,208)
Other segment information
Depreciation and amortisation included in cost of
sales and operating expenditure (8,546) (6,963) (2,578) - (18,087)
Additions to non-current assets 2,164 12,494 3,792 - 18,450
2015
Total revenue 151,468 112,238 58,917 - 322,623
Intersegmental revenue - (4,394) - - (4,394)
Reportable segment revenue 151,468 107,844 58,917 - 318,229
Gross profit 49,973 16,951 9,610 - 76,534
Other income 2,586 327 566 - 3,479
Operating profit before interest and taxation 16,969 7,283 1,080 - 25,332
Segment assets and liabilities
Segment assets 68,791 74,672 72,148 94,491 310,102
Segment liabilities (58,035) (70,121) (11,248) (156,691) (296,095)
Other segment information
Depreciation and amortisation included in cost of
sales and operating expenditure (3,401) (6,074) (2,985) - (12,460)
Additions to non-current assets 34 16,000 1,020 - 17,054
*Other segment relates to non-segment specific cash and liabilities
Factors used to identify segments are based on geographical location and divisional structuring, this is also how the group reports
financial results to management on a monthly basis.
The accounting policies of the reportable segments are the same as the group’s accounting policies described in note 1 of the
consolidated financial statements. Segment profit represents the profit earned by each segment without allocation of finance costs and
income tax expense. This is the measure reported to the chief operating decision-maker for the purposes of assessment of segment
Reportable segment revenue relates to external customers only. No single customer exists upon which the Group is significantly
dependent on for revenue and revenue is derived solely from South African customers.
Other assets and liabilities
For the purposes of monitoring segment performance and allocating resources between segments:
• all assets are allocated to reportable segments other than non-current assets held-for-sale, tax assets and cash and cash equivalents.
• all liabilities are allocated to reportable segments other than general borrowings, shareholders loans, deferred taxations, taxation and
bank overdraft.
4 RELATED PARTIES
Relationships Related director
Entities controlled/influenced by directors
Cyndara 113 (Pty) Ltd P.M. McDonald
Scarlett Sun 33 (Pty) Ltd P.M. McDonald and G Parkin
E-Fuel (Pty) Ltd P.M. McDonald and G Parkin
Nigel Brick and Clay (Pty) Ltd P.M. McDonald and G Parkin
Elgar Share Trust P.M. McDonald and G Parkin
Kuvula Trade 40 (Pty) Ltd G Parkin
Nature of
goods and
services
purchased
or sold 2016 2015
R'000 R'000
Related party balances
Loan accounts - owing (to)/by related parties
Estate late: GvN Parkin
Shareholder - loan 1 Unsecured, interest 7,59% p.a (29,803) (27,849)
Shareholder - loan 2 Unsecured, imputed interest 12% p.a (7,954) (7,059)
Shareholder - loan 3 Unsecured, interest free (2,726) (226)
G Parkin
Shareholder loan Unsecured, interest free (2,632) -
Amounts included in trade receivables/(trade payables) regarding related parties
Scarlett Sun 33 (Pty) Ltd Machinery rental - (8,910)
Scarlett Sun 33 (Pty) Ltd Surface rights (3,344) -
Scarlett Sun 33 (Pty) Ltd Deposit for bricks and aggregates - 1
Scarlett Sun 33 (Pty) Ltd Diesel and maintenance 145 -
Scarlett Sun 33 (Pty) Ltd Machinery parts and consumables (616) -
Nigel Brick and Clay (Pty) Ltd Bricks 1,482 787
Nigel Brick and Clay (Pty) Ltd Bricks (1,796) -
Cyndara 113 (Pty) Ltd Engineering (97) (830)
Cyndara 113 (Pty) Ltd Engineering - 27
Kuvula Trade 40 (Pty) Ltd Transport 1,024 -
Kuvula Trade 40 (Pty) Ltd Rental 39 -
Kuvula Trade 40 (Pty) Ltd Transport (1,820) -
AP van der Merwe Consultancy fees (60) -
Amounts included in borrowings regarding related parties
Scarlett Sun 33 (Pty) Ltd Interest at prime plus 1% (6,658) -
Related party transactions
Interest paid
G v N Parkin On loan account (2,184) (2,026)
G v N Parkin Imputed interest (895) (795)
Legal fees
PM McDonald Attorneys (473) -
Consulting fees
AP van der Merwe (170) -
Equipment purchased
Scarlett Sun 33 (Pty) Ltd (7,441) -
Equipment sold
Scarlett Sun 33 (Pty) Ltd 100 -
Purchases from related parties
Scarlett Sun 33 (Pty) Ltd Machinery rental (2,649) (9,552)
Scarlett Sun 33 (Pty) Ltd Surface rights (4,860) (4,584)
Scarlett Sun 33 (Pty) Ltd Machinery parts (2,972) (244)
Scarlett Sun 33 (Pty) Ltd Equipment purchased (8,991) -
Cyndara 113 (Pty) Ltd Engineering - (275)
Nigel Brick and Clay (Pty) Ltd Bricks (7,421) (3,494)
Kuvula Trade 40 (Pty) Ltd Transport (16,003) (12,579)
Sales to related parties
Cyndara Engineering - 149
Nigel Brick and Clay (Pty) Ltd Bricks 2,270 1,341
Scarlett Sun 33 (Pty) Ltd Bricks and aggregates 77 12
Scarlett Sun 33 (Pty) Ltd Diesel & maintenance 134 117
Kuvula Trade 40 (Pty) Ltd Transport 30 10
5 DIRECTORS' EMOLUMENTS
2016 2015
R'000 R'000
Executive
Short-term employee benefits 3,966 3,869
Post-employment benefits 151 171
Non-executive
Short-term employee benefits 253 80
6 REPORTABLE IRREGULARITIES
On 24 November 2016 the auditors reported reportable irregularities to the Independent Regulatory Board of Auditors in respect on non-
compliance with the Income Tax Act, No 58 of 1962 and the Mineral and Petroleum Resources Royalties Act, No 29 of 2008. The
particulars of the reportable irregularities relate to the following instances, which resulted in penanlties and interest being charged to the
group:
• Non-submission of annual tax returns and non-timeous payments of provisional tax on due dates, as required by the Income Tax Act,
No 58 of 1962; and
• Non-registration for Royalty Tax and/or submission of returns and/or payment of Royalty Tax due to SARS, as required by the Mineral
and Petroleum Resources Royalties Act, No 29 of 2008.
These non-compliances were due to the provisional liquidation of Brikor and cash flow constraints on the group.
Management is aware of the above and is in the process of taking corrective steps, particularl since the provisional liquidation of Brikor
has been lifted to ensure that the relevant non-compliances are adequately addressed. Full provision has been made in the
summarised abridged consolidated financial statements for any related amounts due.
7 SALIENT FEATURES
2016 2015
Number of shares in issue (excluding treasury shares) ('000) 629,342 629,342
Net asset value (R'000) 46,854 14,007
Adjusted with:
- Intangible assets 12,320 13,656
Net tangible asset value 34,534 351
Net asset value per share (cents) 7.4 2.2
Net tangible asset value per share (cents) 5.5 0.1
Reconciliation of EBITDA (R'000)
Operating profit before interest and taxation ("EBIT") 48,583 25,332
Adjusted with:
- Depreciation and ammortisation 18,087 12,460
- Impairments - 7,113
Earnings before interest, taxation, depreciation, ammortisation
and impairment adjustments ("EBITDA") 66,670 44,905
8 SUBSEQUENT EVENTS AND GOING CONCERN
Management is not aware of any material events, other than as outlined below, which occurred subsequent to the year ended 29
February 2016 and which need adjustment or disclosure.
Subsequent to the end of the financial year the group has received offers for the sale of two of its properties, namely the Rayton
property situated of Portion 31 of Witfontein NO.510 - JR District Bronkhorstspruit and the Nigel Schist property situated of Portion 58
of the Farm Vrisfewaag 510IR.
No intention existed at year-end to dispose of these properties and at the date of the publication of this summarised audited
consolidated abridged financial statements report no formal heads of agreement have been drafted or agreed to by the parties. The
group has however indicated its interest in the offers and is in the process of negotiating the terms to be agreed upon. Both properties
will be disposed of inclusive of the rehabilitation provisions pertaining to each property respectively.
GOING CONCERN
The directors have prepared their budgets and cash flow forecast for the year ahead based on reasonable and supportable
assumptions.
The cash flow forecast and current management results indicates that the group will operate as a going concern for the foreseeable
future.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the annual general meeting of the shareholders of Brikor will be held at Heidelberg Kloof Lodge, Heidelberg
Kloof Estate, Stand 31, Heidelberg at 11:00 on 28th July 2017 (SA time) to deal with the business as set out in the notice of annual
general meeting in the annual report.
DATE OF PUBLICATION OF THIS REPORT
Wednesday, January 18, 2017
G Parkin A Hanekom
Financial
Chief Executive Officer director
Nigel
Wednesday, January 18, 2017
CORPORATE INFORMATION
Directors: PM McDonald (Chairman)*; PS Moyanga (Lead independent director)^; G Parkin (CEO); A Hanekom (FD); L Hani^; CB
Madolo^; AP van der Merwe*
* Non-executive ^ Independent non-executive
Registered address: 1 Marievale Road, Vorsterskroon, Nigel 1490
Postal address: PO Box 884, Nigel 1490
Telephone: (011) 739 9000
Facsimile: (011) 739 9021
Company secretary: CIS Company Secretaries (Pty) Ltd
Transfer secretaries: Computershare Investor Services (Pty) Ltd
Auditors: KPMG Inc.
Designated Adviser: Exchange Sponsors (2008) (Pty) Ltd
These results and an overview of Brikor are available at www.brikor.co.za
Date: 19/01/2017 08:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
