CAFCA LIMITED - Audited Abridged Financial Results for the year ended 30 September 2017

Release Date: 16/11/2017 09:00
Code(s): CAC
 
Wrap Text
Audited Abridged Financial Results for the year ended 30 September 2017

Cafca Limited
Share Code: CAC
ISIN Code: ZW0009011942

Notice To Shareholders

Audited Abridged Financial Results for the year ended 30 September 2017

All figures are in United States Dollars


                                                          30 SEPT 2017    30SEPT 2016


STATEMENT OF COMPREHENSIVE INCOME
Revenue                                                    19,310,457     18,148,818
Operating profit                                            1,223,077       757,196
Finance income                                                  3,150             -
Finance cost                                                       -        (79,168)
Profit before income tax                                    1,226,227       678,028
Income tax expense                                           (500,014)     (259,424)
Profit for the year                                           726,213       418,604
Other comprehensive income:                                    -              -
Total comprehensive income for the year                        726,213      418,604




Issued Ordinary Shares (weighted) (number)                  32,874,000    32,830,666
Basic Earnings per share (cents)                                2.21          1.28
Diluted Earnings per share(number)                          33,459,000    33,459,000
Diluted Earnings per share (cents)                              2.17           1.25
Headline earnings per share(number)                        32,874,000     32,830,666
Headline earnings per share(cents)                               2.17           1.25
STATEMENT OF FINANCIAL POSITION                  AT 31 SEPT 2017   AT 31 SEPT 2016

ASSETS                                                 $                 $
Non-Current Assets
Property ,plant and equipment                       3,263,957          3,246,265
Available for sale financial assets                    18,540            18,540
Total non current assets                            3,282,497          3,264,805

Current assets
Inventories                                         8,256,431          8,307,412
Current income tax receivables                         18,540            84,085
Trade and other trade receivables                   2,389,492          3,326,334
Cash and cash equivalents(excluding overdraft)      4,168,171          1,473,598
Total Assets                                       18,115,541         16,456,234


Equity attributable to owners of the parent
Share Capital                                              328               328
Share premium                                         177,948            169,281
Share option reserve                                   20,056              5,300
Retained earnings                                  15,260,469         14,534,256
Total Equity                                       15,458,801         14,709,165


LIABILITIES
Non-current liabilities

Deferred income tax liabilities                      788,880            682,411

Current liabilities
Trade and other payables                          1,496,132             735,654
Provisions                                          371,728             329,004

Total liabilities                                 2,867,740           1,064,658

Total equity and liabilities                     18,115,541          16,456,234
STATEMENT OF CHANGES IN EQUITY
                                                             Share Capital     Share Premium     Share Option   Retained
                                                                                                 reserve        earnings     Total
                                                             $                 $                 $              $            $
Balance at 1 October 2015                                    328               138,081           57,733         14,115,652   14,311,794
Transfer of non-distributable reserve
Transaction with owners:
Issue of shares                                              -                   7,200           -                  -             7,200
Share options                                                -                  24,000           (52,433)                       (28,433)
Total comprehensive income for the year                      -                 -                 -               418,604         416,604
Net profit for the year                                      -                 -                 -               418,604         418,604
Other comprehensive income for the year                      -                 -                 -              -                  -
Balance at 30 September 2016                                 328               169,281           5,300          14,534,256   14,709,165



Balance at 1 October 2016                                    328               169,281           5,300          14,534,256   14,709,165
Transaction with owners:
Issue of shares                                               -                5,200             -                  -           5,200
Share options                                                 -                3,467             -                  -           3,467
Total comprehensive income for the year                       -                -                 -                726,213      726,213
Profit for the period                                         -                -                 -                726,213      726,213
Other comprehensive income for the year                       -                -                 -                  -             -
Balance at 30 September 2017                                 328               177,948            5,300         15,260,469   15,458,801



STATEMENT OF CASH FLOWS

                                                     30 September 2017       30 September 2016
Profit before income tax                                    1,226,227                 678,028
Depreciation                                                  358,763                 319,270
Non-cash employee share based payment/(credit)                 18,223                 (28,433)
Profit on sale of property plant,
and equipment                                                 (14,723)                (9,107)
Finance income                                                 3,150                    -
Finance costs                                                    -                    79,168
Allowance for impairment of trade receivables                  8,809                 (39,771)
Working capital changes:
Decrease in inventories                                      120,120                1,188,883
Decrease in trade and other receivables                      928,033                2,033,882
Increase/(decrease) in trade and other payables              760,478               (1,640,495)
Increase in provision for other liabilities and charges       42,724                    2,640
Net cash generated from operations                         3,382,667                2,538,896

Tax paid                                                   (328,410)                 (312,205)
Finance costs                                                  -                      (79,168)
Finance income                                               (3,150)                     -
Net generated from operating activities                    3,051,107                2,247,523
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property ,plant and equipment               (376,455)                 (173,684)
Proceeds from sale of property,plant and equipment             14,723                     23,574
Net cash utilised in investing activities                    (361,732)                  (150,110)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital                            5,200                    7,200


Increase in cash and cash equivalents                       2,694,575               2,104,613
Cash and cash equivalents at the beginning of the year      1,473,596                (631,015)
Cash and cash equivalents at the end of year                4,168,171               1,473,596




NOTES THE FINANCIAL STATEMENTS
For the year ended 30 September 2017

1.CAFCA Limited (the “Company”) manufactures and supplies cables for transmission and distribution of energy and information.It is a public
limited company incorporated in Zimbabwe.The Company has its primary listing on the Zimbabwe Stock Exchange and secondary listing on the
Johannesburg Stock Exchange.

Basis of preparation
2.The financial statements of CAFCA Limited the (the “Company”) have been prepared in accordance with International Financial reporting Standards
(“IFRS”) and interpretations issued by IFRS Interpretations Committee.( “IFRS IC”) applicable to companies reporting under IFRS and in the manner
required by the Zimbabwe Companies Act(Chapter 24:03).The financial statements have been prepared under the historical cost convention.

Audit opinion
3. These financial results should be read in conjunction with the complete set of financial statements for the year ended 30 September 2017,which
have been audited by PricewaterhouseCoopers Chartered Accountants (Zimbabwe).The auditors unqualified audit opinion includes a section on key
audit matters as defined by ISA 701,’Communicating key audit matters in the independent auditors report, relating to trading conditions and
assessment of impairment of property,plant and equipment.This includes both the rationale for determining the key audit matters and how they were
addressed during the audit. The annual report including the auditors’ opinion on these financial results is available for inspection at the
Company’s registered office.

4.The financial statements are presented in United States Dollars which is the functional currency of the Company.

5.Related party transactions
Reunert Electrical Engineering (Proprietary)Limited owns 70.20% of the company and the remaining 29.80% are widely held.
The following transactions were carried out with related parties:


                                                                         30 September    30 Septermber
                                                                             2017        2016
 (i) Sale of goods
 Metal Fabricators of Zambia Plc( Zamefa)                                 411,365           -




(ii)Purchases during the period from the holding company:

  CBI-Electric African Cables-A Division of ATC( Pty) Limited              729,207            170,587
  CBI-Electric Telecoms Cable(Pty) Limited                                  17,336             14,386
  Metal Fabricators of Zambia Plc(Zamefa)                                   1,393,489              -


(iii)Year end balances arising from purchase of goods/services:
 a.Amounts due to related parties:
 CBI-Electric African Cables-A Division of ATC (Pty) Limited                   33,826               -
 CBI-Electric Telecoms (Pty) Limited                                           17,336               -

 b.Amounts due from related parties
Metal Fabricators of Zambia Plc(Zamefa)                                     106,644                     -

(iv)There were no loans made to directors or management during the
     year.(2016:US$)

(iv)Key management remuneration:
 Key management includes directors(executive and non-executive)
 and members of the executive committee
Salaries and short term benefits                                                     621,063      591,490
Share options charge/(credit)                                                        18,223       (28,433)
Director’ emoluments
-Fees                                                                                   80,016     90,270

 Total                                                                                  719,302    653,327

6.Segmentation information

  The executive management team is the Company’s chief operating decision maker. Management has determined the operating segments based on
reports reviewed by the executive team that are used to make strategic decisions. The Company has one product line, and operates in one industry
sector.

Revenue is primarily from customers who are domiciled in Zimbabwe and revenue from external customers pertains mainly to customers domiciled in
Zambia,Malawi and Mozambique.

Revenue analysis

                                                                 30 September 2017      30 September 2016

                   Revenue for customers domiciled in Zimbabwe      18,256,550              16,257,021

                   Revenue from external customers                   1,053,907               1,891,797

                                                                    19,310,457              18,148,818



Revenue from transactions with single and local customers that amount to 10% of more each of the Group’s revenues , equal approximately
US$5,879,764(2016 $6,007,571).These revenues are attributable to customers domiciled in Zimbabwe. The breakdown of the major component of the
total revenue from three major customers of least 10% is as follows:

                                                                 30 September 2017      30 September 2016

                                     Energy Transmission           5,879,764                6,007,571
The total of non-current assets located in Zimbabwe is $3,282,497 (2017:$3,264,805) and there are no non-current assets located in other
countries.

The segment information provided to the executive team for the product reportable segments for the year ended 30 September are as follows:

                                                             30 September 2017    30 September 2016

Revenue from customers                                           19,310,457          29,310,805

Profit before interest and taxation                                1,226,227            678,028

Net finance income                                                    3,150                -

Finance cost                                                            -                79,168

Total assets                                                    18,115,541           16,456,234

Liabilities                                                      20,656,740             1,747,069



                                                              30 September 2017    30 September 2016

8.Property plant and equipment

 Capital expenditure                                                 376,455              173,684

 Depreciation                                                        358,763              319,270


COMMENTARY AND OVERVIEW OF RESULTS



Revenue & Volumes
Revenue and volumes for the year were up 6% and 8% respectively on the prior year. The company has benefited from the lack of competition from
imports resulting from the difficulty in obtaining foreign currency. Utilities have purchased more aluminium products than in the prior year
accounting for the larger volume % increase over revenue % increase.

Profitability
With the revenue increase complementing the lower cost base, profits increased by 80% year on year. Of the $1,2 million profit before tax $100
183 was export incentive received from the Reserve Bank of Zimbabwe on our export receipts in the period.

Basic earnings per share increased 73% from 1.28 cents per share to 2.21 cents.

Statement of Financial Position
The company has managed credit facilities to generate cash to finance raw materials and the replacement of ageing plant. At the year end cash and
equivalents were $4,2 million mainly due to the improvement in working capital. Trade and other payables increased from $735 654 to $1 496 132
mainly due to lack of foreign currency to settle our foreign creditors.

Outlook
The company is currently benefiting from import protection – this period of protection must be used wisely to improve our competitiveness by
replacing key machines, cost containment and improving process efficiency.
Foreign currency is key to maintaining our supply of raw materials and enabling us to replace ageing plant. We also appreciate our responsibility
to generate foreign currency through exports and to meet all long term customer needs.

Dividend
The Directors recommend not paying a dividend during this period of protection as the company is expected to invest in improving its
competitiveness.

By order of Board

C Kangara
Company Secretary
16 November 2017

Directors: H.P. Mkushi (Chairman) R.N. Webster (Managing)
E.T.Z Chidzonga P.E De Villiers G.Eddey A.E. Dickson A. Mabena S.E Mangwengwende G.J.H Steyn T.A Taylor

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