TRELLIDOR HOLDINGS LIMITED - Summarised Provisional Audited Financial Results For The Year Ended 30 June 2017

Release Date: 12/09/2017 08:02
Code(s): TRL
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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

for the year ended 30 June 2017


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)


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.


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.


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.



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%.


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).


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).


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   
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                                                                                 
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   
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
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
                                                                                         Year ended
                                                                                       30 June 2017
     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
                  Acquisition date fair value of consideration paid
     Cash                                                                                 (130,606)
     Deferred consideration                                                                (27,272)
                  Net cash outflow on acquisition
     Acquisition of Taylor Group
     Cash consideration paid                                                              (130,606)
     Cash acquired                                                                            7,466
     Other acquisitions during the year                                                       (865)
Directors of Trellidor
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 House
197 Peter Mokaba Road
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)


2nd Floor, Building 3
11 Alice Lane
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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