Wrap Text
Summarised Provisional Audited Financial Results For The Year Ended 30 June 2017
Trellidor Holdings Limited
("Trellidor", "the company" or "the group")
(Registration number 1970/015401/06)
Share code: TRL
ISIN: ZAE000209342
SUMMARISED PROVISIONAL AUDITED FINANCIAL RESULTS
for the year ended 30 June 2017
Highlights
UP 17%
Earnings per share of 59.3 cents
UP 27%
Diluted core headline earnings per share of 66.0 cents
UP 23%
Final dividend declared of 19.5 cents per share
(resulting in a dividend of 30 cents per share for the year - 20% growth)
Commentary
Basis of preparation
The provisional audited summarised consolidated financial results for the year ended 30 June 2017 has been prepared
and presented in accordance with the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards ("IFRS"), the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee, the Listings Requirements of the JSE Limited, contains the information as required by IAS 34 -
Interim Financial Reporting and the Companies Act No 71 of 2008, under the supervision of the Chief Financial Officer,
Mr CG Cunningham CA (SA). The accounting policies applied and methods of computation used in preparation of the
summarised consolidated financial information are in terms of IFRS and consistent with those applied in the financial
statements for the year ended 30 June 2016, except for the change in inventory measurement from first-in-first-out to
weighted average cost. The impact of the change is not material.
Introduction
In accordance with its growth strategy Trellidor Holdings Limited ("Group") acquired the Taylor Blinds and NMC businesses
("Taylor"), effective 7 July 2016. The Group now comprises Trellidor and Taylor and the Group's results include Taylor for
the full year for the first time.
Trellidor is the market leading manufacturer of custom-made barrier security products, distributed via a dedicated and
skilled franchise network situated throughout South Africa, Africa and the UK.
Taylor is a major manufacturer and distributor of custom-made blinds, decorative and security shutters and cornicing/
skirting products. Taylor has a strong presence in the Western and Southern Cape.
Overview
Following the Taylor acquisition, Group revenue for the year grew 67.6% to R525 million in difficult trading conditions.
The Group's gross profit margin of 47.7% was in line with expectations and consistent with the interim results. Operating
expenses as a ratio to revenue have increased to 29.5% (June 2016: 28.1%) mainly due to acquisition related expenses
of R10.1 million. These acquisition related expenses have been added back in the calculation of core headline earnings
per share, refer note 3. In addition, foreign exchange losses of R3.0 million (June 2016: R2.3 million gain), also negatively
impacted the operating margin.
Profit after tax for the year grew by 22% to R66 million and earnings per share by 17% to 59.3 cents per share. Diluted
core headline earnings per share (see note 3), which is headline earnings per share after adjusting for certain IFRS charges
and once off expenses grew by 27% to 66.0 cents per share.
Cash generated from operating activities has grown 20.5% to R62.3 million.
The Taylor business achieved the earn out targets as defined in the purchase agreement and the deferred consideration
of R30 million was settled from internally generated cash reserves in July 2017. The initial purchase price of R130.6 million
was funded by the issue of shares on listing and debt of R95.8 million.
Following the acquisition of Taylor and as at 30 June 2017, the Group has interest bearing liabilities of R106.0 million which
incurred R9.1 million of net interest for the year ended 30 June 2017. The Group's financial risk is well managed - interest
cover is 8.4 times and debt repayments are covered 2.2 times by net cash from operating activities.
Segments
Trellidor
During the period, consumer spending throughout South Africa and Africa continued to be negatively impacted as a result
of the tough economic conditions. Revenue recovered slightly from half year to grow by 1% for the full year. Mainly due to
low revenue growth and higher steel costs, gross margin reduced from 50.2% to 49.0%. Recurring overhead costs were
well managed to below inflationary increases. These factors together with foreign exchange losses of R2.1 million (June
2016: R2.3 million foreign exchange gain) resulted in the operating profit before interest declining 14.3%.
Taylor
It was encouraging that despite the tough economic conditions, the business achieved the agreed earn out targets.
Revenue of R209.5 million was achieved with gross margins of 45.7% meeting expectation. Operating expenses were
inflated by the acquisition related expenses and IFRS accounting charges (see notes 1 and 3).
Dividend
The Board of Directors has declared a final gross dividend of 19.5 cents (2016: 15.8 cents) per ordinary share. This brings
the total gross dividend for the year ended 30 June 2017 to 30.0 cents (2016: 25.0 cents).
Prospects
The new security shutter, launched during the year, was well received by the market. Continued product range growth is
expected. Africa growth remains a key strategy through opening new distributorships and by extending the number of
Group products being sold into Africa.
The acquisition of Taylor has provided a platform for growth into a new market segment and a diversification of the Group's
revenue streams. Key growth strategies which incorporate distribution synergies with Trellidor, particularly in Africa and
outside the Western and Southern Cape and a broadening of the Taylor product range are being pursued.
The Group is mindful that the economic environment remains fragile and in addition to its revenue growth strategies it will
continue to focus on efficiencies, improved utilisation of materials, overhead control and pricing strategies in order to
mitigate these challenges.
Auditor's review
The summarised consolidated financial results have been extracted from audited consolidated annual financial statements
but is itself not audited. The consolidated annual financial statements from which this report is extracted have been audited
by Mazars on which they expressed an unmodified opinion. A copy of the consolidated financial statements for the year
ended 30 June 2017 together with the audit report is available for inspection at the company's registered office. The
directors take full responsibility for the preparation of the summarised report and that the financial information has been
correctly extracted from the underlying consolidated annual financial statements. The consolidated annual financial
statements were approved by the board on 7 September 2017.
Information included under the heading "Prospects" and any reference to future financial information included in the audited
summarised consolidated financial results have not been audited or reviewed. 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 their report with
the accompanying financial results from the company's registered office.
TM Dennison
Chief Executive Officer
12 September 2017
Cash dividend declaration
Notice is hereby given that the directors have declared a final gross dividend of 19.5 cents per share for the year ended
30 June 2017.
The dividend has been declared from income reserves. A dividend withholding tax of 20% will be applicable to all
shareholders who are not exempt. The final net ordinary dividend is 15.6 cents per share for ordinary shareholders.
The issued share capital at the declaration date is 108,340,118 shares.
The income tax number of the company is 9419378840.
The salient dates for the dividend will be as follows:
Last day of trade to receive a dividend Tuesday, 3 October 2017
Shares commence trading "ex" dividend Wednesday, 4 October 2017
Record date Friday, 6 October 2017
Payment date Monday, 9 October 2017
Share certificates may not be dematerialised or rematerialised between Wednesday, 4 October 2017 and Friday,
6 October 2017, both days inclusive.
Summarised consolidated statement of financial position
at 30 June 2017
Audited Audited
30 June 2017 30 June 2016
Note R'000 R'000
Assets
Non-current assets
Property, plant and equipment 51,500 42,553
Goodwill 74,401 2,389
Intangible assets 46,741 1,630
Other financial assets 287 450
Deferred tax assets 3,687 3,707
176,616 50,729
Current assets
Inventories 4 94,724 30,796
Trade and other receivables 61,779 44,435
Other financial assets 794 1,546
Cash and cash equivalents 55,103 89,388
212,400 166,165
Total assets 389,016 216,894
Equity and liabilities
Equity
Stated capital 45,759 45,759
Reserves 2,031 582
Retained income 139,273 103,501
Equity attributable to owners of the company 187,063 149,842
Non-controlling interests 4,827 (846)
Total equity 191,890 148,996
Liabilities
Non-current liabilities
Other financial liabilities 86,090 23,367
Deferred tax liabilities 4,439 -
90,529 23,367
Current liabilities
Trade and other payables 52,617 37,516
Other financial liabilities 49,886 2,978
Current tax payables 3,647 3,563
Provisions 447 474
106,597 44,531
Total liabilities 197,126 67,898
Total equity and liabilities 389,016 216,894
Summarised consolidated statement of profit or loss and
other comprehensive income
for the year ended 30 June 2017
Note Audited Audited
30 June 2017 30 June 2016
R'000 R'000
Revenue 525,384 313,442
Cost of sales (274,878) (156,188)
Gross profit 250,506 157,254
Other income 6,711 6,391
Operating expenses (154,917) (88,227)
Operating profit before interest 2 102,300 75,418
Investment revenue 3,107 2,749
Finance costs (12,183) (2,291)
Profit before tax 93,224 75,876
Taxation (27,234) (21,685)
Profit for the year 65,990 54,191
Other comprehensive income:
Items that will be reclassified to profit or loss
Exchange differences on translating foreign operations (710) (246)
Reclassification of hedging reserves to profit and loss 662 993
Income tax related to items that may be reclassified - -
Other comprehensive income for the year net of
taxation (48) 747
Total comprehensive income for the year 65,942 54,938
Profit attributable to:
Owners of the company 64,265 53,706
Non-controlling interests 1,725 485
65,990 54,191
Total comprehensive income attributable to:
Owners of the company 64,323 54,489
Non-controlling interests 1,619 449
65,942 54,938
Earnings per share for the year attributable to the
owners of the company during the period
Earnings and diluted earnings per share (cents) 3 59.3 50.8
Condensed consolidated statement of changes in equity
at 30 June 2017
Stated Total Retained Total attributable to Non-controlling Total
capital reserves income owners of the company interests equity
R'000 R'000 R'000 R'000 R'000 R'000
Balance at 1 July 2015 - (201) 69,762 69,561 (1,295) 68,266
Total comprehensive income for the year - 783 53,706 54,489 449 54,938
Issue of shares 45,759 - - 45,759 - 45,759
Dividends - - (19,967) (19,967) - (19,967)
Balance at 30 June 2016 45,759 582 103,501 149,842 (846) 148,996
Total comprehensive income for the year - 58 64,265 64,323 1,619 65,942
Employees share option - 1,391 - 1,391 - 1,391
Dividends - - (28,493) (28,493) - (28,493)
Sale of shares in subsidiary to non-controlling
interest - - - - 4,054 4,054
Balance at 30 June 2017 45,759 2,031 139,273 187,063 4,827 191,890
Summarised consolidated statement of cash flows
for the year ended 30 June 2017
Audited Audited
30 June 2017 30 June 2016
R'000 R'000
Cash flows from operating activities
Cash generated from operations 104,626 72,413
Interest income 3,107 2,748
Finance costs (12,183) (2,291)
Tax paid (33,230) (21,134)
Net cash from operating activities 62,320 51,736
Cash flows used in investing activities
Business combinations 5 (124,005) -
Purchase of property, plant and equipment (9,071) (7,246)
Other 1,041 (1,018)
Net cash used in investing activities (132,035) (8,264)
Cash flows from financing activities
Proceeds on share issue - 45,759
Net proceeds from other financial liabilities 59,865 4,835
Dividends paid (28,493) (19,967)
Proceeds on sale of shares to non-controlling interest 4,054 -
Net cash from financing activities 35,426 30,627
Total cash movement for the year (34,289) 74,099
Cash at the beginning of the year 89,388 15,424
Effect of exchange rate movement on cash balances 4 (135)
Cash and cash equivalents at the end of the period 55,103 89,388
Notes to the summarised consolidated financial results
for the year ended 30 June 2017
1. Segmental information
Audited Audited
Year ended Year ended
30 June 2017 30 June 2016
R'000 R'000
Revenue
Trellidor 315,903 313,442
Taylor 209,481 -
525,384 313,442
Operating profit before interest and tax
Trellidor 66,086 77,096
Taylor 46,307 -
112,393 77,096
Reconciling items
Net finance (costs)/income (9,076) 457
Acquisition costs/listing costs (2,474) (1,677)
Amortisation of the client database (4,891) -
Fair value adjustment on deferred
consideration (2,728) -
Operating profit before tax 93,224 75,876
Audited Audited
Year ended Year ended
30 June 2017 30 June 2016
R'000 R'000
Total assets
Trellidor 125,725 123,799
Taylor 204,501 -
330,226 123,799
Reconciling items
Cash and cash equivalents 55,103 89,388
Deferred tax 3,687 3,707
Total as per statement of financial
position 389,016 216,894
Audited Audited
Year ended Year ended
30 June 2017 30 June 2016
R'000 R'000
Revenue by location Revenue by location
of customer of customer
Geographical information
South Africa 470,019 261,271
Foreign 55,365 52,171
525,384 313,442
Audited Audited
Year ended Year ended
30 June 2017 30 June 2016
R'000 R'000
2. Operating profit
Operating profit before interest for the year is stated after accounting for the following, amongst others:
Operating lease charge - premises 7,270 1,009
Depreciation 6,448 5,992
Amortisation of intangible assets 5,108 108
Salaries and wages 116,886 75,363
Advertising 23,429 14,979
3. Earnings per share
Audited Audited
Year ended Year ended
30 June 2017 30 June 2016
R'000 R'000
Profit attributable to ordinary shareholders
Adjusted for: 64,265 53,706
Profit on disposal of property, plant and
equipment (86) (542)
Gross amount (120) (666)
Tax effect 34 124
Headline earnings 64,179 53,164
Adjusted for:
Amortisation client database 4,891 -
Acquisition costs - Taylor 2,474 -
Listing costs - 1,677
Fair value adjustment on contingent
consideration 2,728 -
Tax effect (2,134) -
Non-controlling interest (597) -
Core headline earnings 71,541 54,841
Number Number
‘000s ‘000s
Number of shares issued 108,340 108,340
Weighted average number of ordinary shares
in issue during the period 108,340 105,631
Diluted weighted average number of shares 108,340 105,631
Earnings and diluted earnings per share (cents) 59.3 50.8
Headline and diluted headline earnings per
share (cents) 59.2 50.3
Core headline and diluted core headline
earnings per share (cents) 66.0 51.9
Audited Audited
Year ended Year ended
30 June 2017 30 June 2016
R'000 R'000
4. Inventories
Raw materials, components 80,544 25,326
Work in progress 3,222 1,184
Finished goods 1,772 759
Goods in transit 9,650 3,962
95,188 31,231
Provision for obsolescence (464) (435)
94,724 30,796
5. Business combination
As disclosed in the 2016 Annual Report, Trellidor Innovations Proprietary Limited, a 92.5% held subsidiary of
Trellidor Holdings Limited, acquired the Taylor Group with effect from 7 July 2016 from Odyssey House Proprietary
Limited. Integral to the deal was the purchase of a minority stake of 7.5% by the Managing Director of this business,
this investment was achieved through Novaspectacular Proprietary Limited and is proportional to the investment by
Trellidor Holdings Limited.
As part of the purchase agreement, a deferred consideration of R30,000,000, contingent on Taylor achieving an
earnings target, was agreed, this was achieved and was paid in July 2017. The fair value of this deferred and
contingent consideration is included in other financial liabilities and at date of purchase was R27 272 000. The fair
value is based on a discount rate of 10.5% and the earnings target being achieved. The acquisition of the business
provides the Trellidor Group with strong brands, management team and distribution network for the development of
the home improvements market, distinct from the Trellidor business. The accounting for the business combination has
been finalised and is reported below. The goodwill has increased due to the recognition of a deferred tax liability.
Full details of the group's business combinations, additions and disposals of property, plant and equipment as well
as commitments and contingent liabilities are included in the audited consolidated annual financial statements that
are available to be reviewed at the company's Registered Office.
Fair value of assets acquired and liabilities assumed
Audited
Year ended
30 June 2017
R'000
Property, plant and equipment 6,002
Intangible assets 50,175
Inventories 40,845
Trade and other receivables 20,736
Cash and cash equivalents 7,466
Other financial liabilities (19,773)
Deferred tax (7,612)
Trade and other payables (8,182)
Current tax payable (2,927)
Total identifiable net assets 86,730
Goodwill 71,148
157,878
Acquisition date fair value of consideration paid
Cash (130,606)
Deferred consideration (27,272)
(157,878)
Net cash outflow on acquisition
Acquisition of Taylor Group
Cash consideration paid (130,606)
Cash acquired 7,466
(123,140)
Other acquisitions during the year (865)
(124,005)
Directors of Trellidor
Executive
TM Dennison (Chief Executive Officer)
CG Cunningham (Chief Financial Officer)
Independent non-executive
MC Olivier (Chairman)
JB Winship
RB Patmore
Company Secretary
P Nel
(BComm FCIS)
71 Cotswold Drive
Westville, 3629
Registered Office
20 Aberdare Drive
Phoenix Industrial Park
Durban, 4001
(P.O. Box 20173, Durban North, 4016)
Date of Incorporation
23 November 1970
Place of Incorporation
South Africa
Auditors and Independent Reporting Accountants
Mazars
Mazars House
197 Peter Mokaba Road
Morningside
Durban, 4001
(P.O. Box 70584, Overport, 4067)
Corporate Sponsor
PSG Capital Proprietary Limited
(Registration number 2006/015817/07)
1st Floor, Ou Kollege
35 Kerk Street
Stellenbosch, 7600
(P.O. Box 7403, Stellenbosch, 7599)
and
2nd Floor, Building 3
11 Alice Lane
Sandhurst
Sandton, 2196
(P.O. Box 650957, Benmore, 2010)
Transfer Secretaries
Computershare Investor Services Proprietary Limited
(Registration number 2004/003647/07)
Rosebank Towers
15 Biermann Avenue
Rosebank, 2196
(P.O. Box 61051, Marshalltown, 2107)
Date: 12/09/2017 08:02:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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