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Summarised audited consolidated results for the year ended 31 December 2016
KAYDAV GROUP LIMITED
Incorporated in the Republic of South Africa
Registration number: 2006/038698/06
JSE share code: KDV ISIN: ZAE000108940
('KayDav' or 'the company' or 'the Group')
SUMMARISED AUDITED CONSOLIDATED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2016
- Revenue (up 12%)
- Headline earnings per share 15.9 cents (down 15%)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited year Audited year
ended ended
31 December 2016 31 December 2015
R R
Revenue 967 752 148 864 568 033
Cost of sales (703 367 040) (621 857 231)
Gross profit 264 385 108 242 710 802
Other income 953 317 858 473
Operating expenses (220 435 250) (192 740 639)
Operating profit 44 903 175 50 828 636
Investment income 7 622 130 895
Finance costs (6 425 087) (5 871 522)
Profit before taxation 38 485 710 45 088 009
Taxation (11 151 490) (12 916 823)
Profit for the year 27 334 220 32 171 186
Other comprehensive income - -
Total comprehensive income attributable to
equity holders of the parent 27 334 220 32 171 186
Reconciliation between earnings and headline
earnings
Earnings 27 334 220 32 171 186
Loss on sale of plant and equipment 79 193 155 088
Taxation on loss on sale of plant and equipment (22 174) (43 425)
Headline earnings 27 391 239 32 282 849
Weighted average number of shares in issue 172 751 585 172 751 585
Basic and diluted earnings per share (cents)* 15.8 18.6
Headline and diluted headline earnings
per share (cents)* 15.9 18.7
*The company has no dilutionary instruments in issue.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited year Audited year
ended ended
31 December 2016 31 December 2015
R R
ASSETS
Non-current assets 101 948 746 92 775 977
Property, plant and equipment 75 460 258 66 115 538
Goodwill 26 361 344 26 361 344
Deferred taxation 127 144 299 095
Current assets 324 127 465 295 655 321
Inventories 168 668 440 151 515 557
Trade and other receivables 114 674 817 105 857 636
Cash and cash equivalents 40 782 429 36 983 740
Taxation 1 779 1 298 388
TOTAL ASSETS 426 076 211 388 431 298
EQUITY AND LIABILITIES
Capital and reserves 196 977 529 179 144 646
Share capital 173 173
Share premium 126 615 503 136 116 840
Accumulated profit 70 361 853 43 027 633
Non-current liabilities 34 402 592 32 141 294
Instalment sale liabilities 16 400 952 14 558 008
Interest-bearing liabilities 17 374 230 17 462 074
Deferred taxation 627 410 121 212
Current liabilities 194 696 090 177 145 358
Trade and other payables 124 880 933 118 950 994
Short-term portion of instalment sale liabilities 7 976 911 8 627 935
Short-term portion of interest-bearing liabilities 4 994 771 5 449 403
Bank overdraft 50 908 607 38 606 874
Taxation 2 064 387 2 018 794
Provisions 3 870 481 3 491 358
TOTAL EQUITY AND LIABILITIES 426 076 211 388 431 298
Shares in issue at year-end 172 751 585 172 751 585
Net asset value per share (cents) 114.0 103.7
Net tangible asset value per share (cents) 98.8 88.4
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited year Audited year
ended ended
31 December 2016 31 December 2015
R R
Balance at the beginning of the year 179 144 646 155 611 036
Total comprehensive income for the year 27 334 220 32 171 186
Distribution to shareholders (9 501 337) (8 637 576)
Total equity 196 977 529 179 144 646
CONSOLIDATED STATEMENT OF CASH FLOWS
Audited year Audited year
ended ended
31 December 2016 31 December 2015
R R
Cash flows from operating activities
Operating cash before working capital movements 52 451 089 57 942 976
Working capital movements (19 314 590) (20 401 677)
Cash generated by operations 33 136 499 37 541 299
Investment income 7 622 130 895
Finance costs (6 425 087) (5 871 522)
Taxation paid (9 131 137) (12 880 906)
Net cash inflow from operating activities 17 587 897 18 919 766
Cash flow from investing activities
Investment in property, plant and equipment (2 519 839) (1 557 987)
Proceeds on disposal of property,
plant and equipment 535 021 1 248 251
Acquisition of business - (7 218 117)
Net cash outflow from investing activities (1 984 818) (7 527 853)
Cash flow from financing activities
Distribution to shareholders (9 501 337) (8 637 576)
Repayment of instalment sale liabilities (9 403 871) (9 539 597)
Proceeds from interest-bearing liabilities 391 565 -
Repayment of interest-bearing liabilities (5 592 480) (6 245 568)
Net cash outflow from financing activities (24 106 123) (24 422 741)
Net decrease in cash and cash equivalents (8 503 044) (13 030 828)
Net cash and cash equivalents at
the beginning of the year (1 623 134) 11 407 694
Net cash and cash equivalents at
the end of the year (10 126 178) (1 623 134)
SEGMENTAL ANALYSIS
Audited year Audited year
ended ended
31 December 2016 31 December 2015
R R
Segmental revenue
Board Distribution and Adaptation 905 481 498 816 678 686
Packaging 67 100 354 49 606 551
Internal revenue (4 829 704) (1 717 204)
Total revenue 967 752 148 864 568 033
Internal revenue relates to sales from the
Packaging segment to the Board Distribution and
Adaptation segment.
Segmental results
Board Distribution and Adaptation 38 479 331 45 552 997
Packaging 6 449 432 5 415 959
Other (25 588) (140 320)
Operating profit before interest 44 903 175 50 828 636
Operating assets
Board Distribution and Adaptation 373 609 186 332 808 281
Packaging 27 674 702 29 143 942
Other 1 447 130 812 810
Internal balances (3 145 074) (2 292 562)
Total operating assets 399 585 944 360 472 471
Operating liabilities
Board Distribution and Adaptation 168 454 239 157 015 369
Packaging 5 812 876 6 021 251
Other 55 284 851 46 402 596
Internal balances (3 145 074) (2 292 562)
Total operating liabilities 226 406 892 207 146 654
Segmental assets consist of property, plant and equipment, inventory,
trade and other receivables and operating cash and exclude taxation assets,
investments and intangible assets. Segmental liabilities consist of operating
liabilities and exclude taxation liabilities.
COMMENTARY
INTRODUCTION
KayDav comprises a group of businesses involved in the distribution of
wood-based panels as well as packaging and packaging machinery. Wood-based
panels are manufactured through the compression of wood waste into
solid panels. These panels have a variety of applications in the construction,
furniture manufacturing and shopfitting industries. Packaging consumables
and machinery are those products and machines which cater for a wide
variety of packaging requirements in the industrial, agricultural and
commercial sectors.
FINANCIAL RESULTS
The 2016 financial year was a challenging one for KayDav from an
operational and earnings growth point of view.
The Group was able to grow revenue by 12% from R864.6 million to R967.8 million,
with the Board Distribution and Adaptation segment growing revenue by 11%
and the Packaging segment growing revenue by 35% to R67.1 million
(2015: R49.6 million).
Revenue growth did not wholly carry through to gross profit growth, which
grew by 9% to R264.4 million (2015: R242.7 million), due to a drop in the
gross profit margin from 28.1% for the year ended 31 December 2015 to
27.3% for the year ended 31 December 2016. A tougher trading environment
was experienced during the second half of the financial year while increased
competition in Gauteng lead to the lower gross profit margin and an
increased operating expense to sales ratio. With operating expenses
increasing by 14% from the prior year against the 9% increase in gross
profit, earnings decreased to R27.3 million (2015: R32.2 million) and
consequently earnings per share of 15.8 cents (2015: 18.6 cents) and
headline earnings per share of 15.9 cents (2015: 18.7 cents) decreased by 15%.
At 31 December 2016 the Group had a net tangible asset base of R170.6 million
(2015: R152.8 million) after a cash distribution to shareholders out of
share premium of R9.5 million (2015: R8.6 million), with a net debt:equity
ratio of 29% (2015: 27%) and a current ratio of 1.7 (2015: 1.7).
PROSPECTS
The Packaging segment grew operating profit by 19% to R6.4 million
(2015: R5.4 million) during 2016 and the Group looks forward to continued
growth from this segment through gaining market share.
Slow macro-economic growth continues to affect the board distribution
business and we expect 2017 to be a very challenging year. The Group
remains focused on increasing its market share profitably by being
customer-centric and sales-focused while maintaining and improving
working capital efficiency.
CHANGES TO CAPITAL STRUCTURE
There has been no change in KayDav's capital structure during the
year ended 31 December 2016 aside from a distribution out of share
premium to shareholders of 5.5 cents per share, amounting to R9.5 million,
on 23 May 2016.
DISTRIBUTIONS TO SHAREHOLDERS
The KayDav board of directors ('the board') has decided that no
distribution to shareholders will be made at this time. The board
considers it prudent to conserve cash in light of the high-risk
macro-economic environment in which the Group operates. This decision
will be revisited at the time of publishing the Group's interim financial
statements during August 2017.
SUBSEQUENT EVENTS
No material changes have taken place in the affairs of the Group between
the end of the financial year and the date of this report, which require
adjustment or disclosure.
BASIS OF PREPARATION
The summarised audited consolidated financial statements have been
prepared in accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB),
the South African Institute of Chartered Accountants Financial
Reporting Guides as issued by the Accounting Practices Committee,
Financial Reporting Pronouncements as issued by the Financial Reporting
Standards Council (FRSC), the requirements of IAS 34 (Interim Financial
Reporting) and the requirements of the South African Companies Act and
the JSE Listings Requirements.
The accounting policies applied in preparing these summarised audited
consolidated financial statements are consistent with those presented
in the annual financial statements for the year ended 31 December 2015.
The annual financial statements were prepared under the supervision of
the CFO, Martin Slier, CA(SA).
DIRECTORATE
Frank Davidson was appointed to the KayDav board on 30 June 2016.
Shareholders are referred to the Group's SENS announcement of the
same date in respect of this change for more information.
AUDIT REPORT
The external auditor, Grant Thornton, has issued an opinion on the
Group's consolidated financial statements for the year ended
31 December 2016. The audit was conducted in accordance with International
Standards on Auditing. The auditor responsible for the audit is KT Kuhn.
An unmodified audit opinion has been issued on the consolidated
financial statements.
These summarised audited consolidated results for the year ended
31 December 2016 have been extracted from the audited annual financial
statements but are not themselves audited. The audit report does not
necessarily cover all the information included in the announcement.
Shareholders are therefore advised that in order to obtain a full
understanding of the nature of the auditor's engagement they should
obtain a copy of the auditor's report together with the accompanying
financial information from the company's registered office. The directors
take full responsibility for the preparation of these summarised audited
consolidated results and confirm that the financial information has
been correctly extracted from the underlying audited results for the
year ended 31 December 2016.
NOTICE OF ANNUAL GENERAL MEETING
Shareholders are advised that the integrated annual report containing
the annual financial statements will be posted on or before 31 March 2017.
KayDav’s annual general meeting will be held at 10:00 on Thursday,
18 May 2017 at the offices of Grant Thornton Johannesburg Partnership,
52 Corlett Drive, Wanderers Office Park, Illovo, 2196, Gauteng. The last
day to trade in order to be eligible to participate in and vote at the
annual general meeting is Tuesday, 9 May 2017 and the record date for
voting purposes is Friday, 12 May 2017.
APPRECIATION
The board extends its appreciation to our management and staff for their
efforts during this reporting period. We also thank our shareholders,
customers and suppliers for their continued support.
On behalf of the board
I H Stern G F Davidson
Chairperson Chief Executive Officer
23 March 2017
CORPORATE INFORMATION
KAYDAV GROUP LIMITED
Incorporated in the Republic of South Africa
Registration number: 2006/038698/06
Share code: KDV
ISIN: ZAE000108940
('KayDav' or 'the Group')
Income tax reference number: 9154/477/16/1
Registered address: 105 Bamboesvlei Road, Ottery 7800
Postal address: PO Box 272, Ottery 7808
Telephone: 021 704 7060
Facsimile: 021 704 2082
Executive directors: GF Davidson (CEO), M Slier (CFO)
Independent non-executive Directors: IH Stern (Chairman),
B Tlhabanelo, S van Niekerk, F Davidson
Company Secretary: CIS Company Secretaries Proprietary Limited
Transfer Secretaries: Link Market Services South Africa
Proprietary Limited
Auditor: Grant Thornton Johannesburg Partnership
Sponsor: Java Capital
Website: www.kaydav.co.za
Date: 23/03/2017 04:50:00 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.
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