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W G WEARNE LIMITED - Unaudited Condensed Consolidated Interim Financial Results for the six months ended 31 August 2017

Release Date: 30/11/2017 17:43
Code(s): WEA     PDF:  
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Unaudited Condensed Consolidated Interim Financial Results for the six months ended 31 August 2017

W G WEARNE LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005983/06)
(Share Code: WEA ISIN Code: ZAE000078002)
(“Wearne” or “the Company”)

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS
for the six months ended 31 August 2017

Highlights

     Revenue increased by 7.17% to R213,2 million for the period under review
     Operating profit increased by 74.11% to R14,3 million for the period under review
     Basic earnings per share increased by 175.91% to 1.38 cents per share
     HEPS increased by 132.98% to 0.63 cents per share

Commentary

   Basis of preparation

   The unaudited condensed consolidated interim financial results for the six months ended 31 August 2017
   ("2017 period") have been prepared in accordance with and contains, as minimum the information required
   by IAS 34 : Interim Financial Reporting and have been prepared in accordance with the SAICA Financial
   Reporting Guides as issued by the Accounting Practices Committee, the JSE Listing Requirements and in the
   manner required by the South African Companies Act No. 71 of 2008, as amended. The accounting policies
   and methods of compilation applied in preparation of the consolidated interim financial results are in
   accordance with the International Financial Reporting Standards("IFRS") and are consistent with those
   applied in the audited annual financial statements for the year ended 28 February 2017. The above
   information has not been audited or reported on by WG Wearne's auditors.

   The consolidated interim financial results have been prepared under the supervision of the Chief Financial
   Officer, JJ Bierman CA (SA).

   Introduction

   WG Wearne Limited and its subsidiaries (“the Group”) provide a comprehensive range of products to the
   building and construction industry in South Africa. The major operating divisions comprise aggregates and
   ready mixed concrete products. The group delivered an improved set of results despite very difficult
   trading conditions in the construction industry.

   Financial results

   The improved performance during the 2017 interim period resulted in a headline profit per share of 0.63
   cents (2016 period: loss of 1.91 cents). The net asset value per share increased to 5.20 cents for the 2017
   period compared to 3.68 cents as at 28 February 2017. The improved profitability was mainly due to an
   increase in turnover of 22 % in the ready mixed concrete division specifically related to the Dankocom
   concrete supply contract in Upington.

   The Group’s revenue from continuing operations, increased by 7% (or R14 million) to R213 million for the
   six months ended 31 August 2017 compared to the six months ended 31 August 2016. The Group reflects a
   total comprehensive profit (including discontinued operations) of R4 million (2016 period: R10.4 million
   loss).

   Total liabilities decreased by R42 million to R314 million (2016 period: R356 million). This significant
   decrease in liabilities was due to most of the instalment sale agreements coming to the end of their
   contract terms and a bigger portion of the instalments going towards capital reduction.

   Operational review

   Trading conditions during the six month period remained extremely challenging as demand for building
   materials remained flat compared to 2016.

   The Aggregates division increased its external revenue by R1.1 million to R69.7 million for the 2017 period
   (2016 period: R68.6 million). This resulted in an operating profit of R1.2 million for the 2017 period (2016
   period: R1.05 million).

The Ready Mix concrete division saw an increase in external revenue of 22% to R143.5 million for the 2017
period (2016 period: R117.5 million). As mentioned this was mainly due to high demand for concrete on the
Ilanga Solar Plant contract with Dankocom. The balance of the operations was flat compared to the
previous financial year with margins still being very competitive. Operating profit improved to R 13.08
million for the 2017 period compared to an operating profit of R 1.5 million for the 2016 period.

Disposals

As disclosed previously in the annual financial statements the board made a decision to dispose of the
Brandvlei Quarry as a going concern. This transaction has not been finalised, hence Brandvlei’s assets and
liabilities were reclassified as a disposal group held for sale in the statement of financial position.

Joint Venture

As previously disclosed in the annual financial statements, the group has entered into a joint venture
agreement with Right Gold Machinery (Pty) Ltd in July 2017. Right Gold will be constructing a new crushing
plant which will double the current production capacity and allow the operation to take full advantage of
the growth in the market in Kwa-Zulu Natal. The transaction still needs to be approved by the shareholders.

B-BBEE

Existing BEE shareholders and the Wearne Workers Trust in aggregate hold 32.59% of Wearne’s issued
shares (excluding treasury shares and mandated investments).

Prospects

Current economic (GDP) growth rate for 2017 is expected to be 0.7 % and forecast to be 1.1 % in 2018. This
low growth forecast will result in a minimal increase in demand for building materials and cement related
products. With all current suppliers sitting with excess capacity this will result in margins in this sector still
remaining very competitive. There are indications in the market of consolidation in the cement industry and
this will hopefully lead to improved pricing in the ready mixed concrete industry. The signing of the 27
renewable energy power purchase agreements by Eskom as announced by Treasury will also lead to
significant activity in this sector and hopefully our ready mixed concrete division can secure some of these
contracts.

Activity in the aggregates division should also see an uptick in demand as further infrastructure spend is
planned by Government. The growth will however be dependent on the availability of funding to local
municipalities that are mandated to execute a lot of these contracts.

Further positive prospects for the concrete division are the roll out of the Gauteng Mega City Housing
Projects in 2018. The Mega City Projects is an R 100 billion investment that plans to deliver over 800 000
houses in Gauteng over the next 10 years. Our operations are well situated to take advantage of the
Western & Southern corridors. The first of these projects has been launched in the Carletonville and
Randfontein and more than 4000 housing units are planned for 2018 on these two projects.

Material uncertainty related to going concern

The financial results for the six months ending 31 August 2017 have been prepared on the going concern
basis as the directors are of the view that the Group has adequate resources in place to continue in
operation for the foreseeable future. The ability of the Group to fund short term operations in the
foreseeable future is largely dependent on the continued support of the Group’s funders, the return to
profitable trading and the ability to generate sufficient cash flows to honour commitments made.

  The aim of the process is to reduce the cash flow pressures of the group and improve liquidity and solvency
  of the individual subsidiaries.
  These conditions, indicate that a material uncertainty exists that may cast significant doubt on the group’s
  ability to continue as a going concern.

  The Group incurred a profit from continuing operations for the six months of the 2018 period of R3.8
  million (2017: R28.8 million loss). At 31 August 2017 the Group’s Current liabilities of R272 million (2017:
  R270 million) exceed current assets of R63 million (2016: R70 million) by R209 million (2017: R200 million).
  This highlights a material uncertainty casting significant doubt regarding the Group’s ability to continue as a
  going concern.

  The Group is currently technically solvent with a net asset value of R14 million (2017: R10 million). As at 31
  August 2017 the Group were in breach of the provisions of the following loan arrangement and these long
  term liabilities were reclassified from Non-Current to Current in compliance with the International Financial
  Reporting Standards (IAS 1):
  -         IDC;
  -         Nedbank; and
  -         ABSA
  Despite these breaches the Group still enjoys the support of all three funders.

  As mentioned in the Annual Financial Statements as at 28 February 2017 the board has initiated the
  following cost cutting processes:

  -  Reduction in Employment Costs of R500 000 per month, this should be fully implemented by November
     2017. The target of R500 000 per month was achieved but the real saving will only come into effect once the
     severances packages have been paid in full early in the new year.
        
  -  Restructuring the sand supply chain for the Ready Mixed Concrete business which will result in a R200 000 a
     month reduction in Raw Material Cost and a further R100 000 a month saving in Transport Costs. This has
     been implemented from September 2017.

  -  relocation of the Group’s Head Office to Randfontein which will result in a R100 000 a month saving.
     The Head office will be relocated by January 2018.
       
  -  Reduction in vehicle rental of R100 000 a month by reducing the LDV fleet from November 2017. This has
     been achieved.
        
  -  With the closure of the Mobile Crushing Division non-core mobile crushing equipment will also be sold. This
     should result in an inflow of R2 million.

  The Group has entered into an Equity Subscription Agreement with Milost Global Inc (“the Investor”) on 20
  October 2017 and the first draw down notice was signed on 2 November 2017. The first tranche of R5
  million should be received shortly and will be utilised to settle current SARS arrears.

  The Group has reached a deferment agreement with Liberty Life to settle the arrear Pension Fund
  contributions over three (3) months. The first payment was done in November 2017.

  The directors have considered the operational budget and cash flow forecasts for the ensuing year which
  are based on the current expected economic and market conditions. The board has adopted the going
  concern basis in the preparation of the annual financial statements subject to the following material
  uncertainties casting significant doubt about the Group’s ability to continue as a going concern

  - The continued support from all of the Group’s funders;

  - The successful conclusion of final agreements and the timeous drawdowns on the Milost Facility;
     
  - Receiving the contractual retention from Dankocom in February or March 2018; and

  - The successful implementation of the overhead reduction measures implemented by the board.

Dividends

No dividend has been declared for the period.

 On behalf of the board

 WP van der Merwe                                                SJ Wearne
 Chairman                                                        Chief Executive Officer

 30 November 2017                                                                                                                                                             6


Condensed consolidated statement of financial position

                                                                                Unaudited six               Unaudited six                   Audited year
                                                                              months ended 31             months ended 31                         ended
                                                                                  August 2017                 August 2016             28 February 2017
                                                                                       R'000                       R'000                        R'000
ASSETS
Non-Current Assets
Property, plant and equipment                                                              239,753                     240,376                     250,524
Trade and other receivables                                                                  9,431                           -                       4,395
Other financial assets                                                                       6,702                       6,535                       6,366
Deferred tax                                                                                 1,851                       4,851                       1,851
Total Non-Current Assets                                                                   257,737                     251,762                     263,136
Current Assets
Inventories                                                                                 18,811                      19,740                      17,967
Trade and other receivables                                                                 43,674                      58,175                      51,684
Cash and cash equivalents                                                                      492                         672                         640
Total Current Assets                                                                        62,977                      78,587                      70,291
Non-current assets held for sale and assets of disposal groups                               7,877                      58,081                       7,877
Total Assets                                                                               328,591                     388,430                     341,304
Equity and Liabilities
Equity
Share capital                                                                              178,357                     178,357                     178,357
Reserves                                                                                     1,864                       1,758                       1,567
Revaluation reserves                                                                        52,006                      51,522                      52,006
Accumulated loss                                                                          (218,042)                   (199,819)                   (221,881)
Total Equity                                                                                14,185                      31,818                      10,049
LIABILITIES
Non-Current Liabilities
Other financial liabilities                                                                  24,603                    107,091                       43,741
Deferred tax                                                                                  9,497                      7,040                        9,497
Provisions                                                                                    7,885                      7,360                        7,885
Total Non-Current Liabilities                                                                41,985                    121,491                       61,123
CURRENT LIABILITIES
Trade and other payables                                                                   135,295                     124,530                     138,178
Other financial liabilities                                                                114,410                      63,394                     108,971
Current tax payable                                                                              -                          55                          55
Bank overdraft                                                                              22,132                      27,626                      22,344
Total Current Liabilities                                                                  271,837                     215,605                     269,548
Liabilities of disposal groups                                                                 584                      19,516                         584
Total Liabilities                                                                          314,406                     356,612                     331,255
Total Equity and Liabilities                                                               328,591                     388,430                     341,304




                                            WG Wearne Limited Unaudited condensed consolidated interim financial results for the six months ended 31 August 2017
                                                                                                                                                                      7




Condensed consolidated statement of profit or loss and other comprehensive income

                                                                                       Unaudited six               Unaudited six                   Audited year
                                                                                     months ended 31             months ended 31                         ended
                                                                                         August 2017                 August 2016             28 February 2017
                                                                                              R'000                       R'000                        R'000
Revenue                                                                                           213,226                     198,963                     389,429
Cost of sales                                                                                    (158,999)                   (148,690)                   (347,633)
Gross profit                                                                                       54,227                      50,273                      41,796
Other operating income                                                                              4,917                       1,542                      23,026
Other operating expenses                                                                          (44,825)                    (43,591)                    (62,964)
Operating profit                                                                                   14,319                       8,224                       1,858
Investment income                                                                                      88                         (29)                        182
Finance costs                                                                                     (10,629)                    (12,434)                    (25,585)
Profit / (loss) before taxation                                                                     3,778                      (4,239)                    (23,545)
Taxation                                                                                                -                           -                      (5,268)
Profit / (loss) from continuing operations                                                          3,778                      (4,239)                    (28,813)
Profit / (loss) operations
Discontinuedfrom discontinued operations                                                                -                        (738)                        909
Profit / (loss) for the year                                                                        3,778                      (4,977)                    (27,904)
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Fair value adjustments: Revaluation of Property, plant and equipment                                        -                   (5,804)                     (4,252)
Deferred tax on fair value adjustments                                                                      -                        -                        (204)
Total items that will not be reclassified to profit or loss                                                 -                   (5,804)                     (4,456)
Items that may be reclassified to profit or loss:
Fair value adjustments: Available-for-sale                                                             297                         367                         175
Deferred tax on fair value adjustment                                                                    -                           -                           -
Total items that may be reclassified to profit or loss                                                 297                         367                         175
Other comprehensive income / (loss) for the year net of taxation                                       297                      (5,437)                     (4,281)
Total comprehensive (loss) income for the year                                                       4,075                     (10,414)                    (32,185)

Earnings per share:
From continuing and discontinued operations
Basic earnings / (loss) per share (c)                                                                  1.38                       (1.82)                    (10.22)
From continuing operations
Basic earnings / (loss) per share (c)                                                                  1.38                       (1.55)                    (10.55)
From discontinued operations
Basic earnings / (loss) per share (c)                                                                   -                         (0.27)                       0.33

Headline earnings per share:
From continuing and discontinued operations
Headline earnings / (loss) per share (c)                                                               0.63                       (1.91)                    (16.88)
From continuing operations
Headline earnings / (loss) per share (c)                                                               0.63                       (1.64)                    (17.25)
From discontinued operations
Headline earnings / (loss) per share (c)                                                                -                         (0.27)                       0.36

Reconciliation of headline profit / (loss):
Profit / (loss) for the period                                                                       3,778                      (4,977)                    (27,904)
Profit on the sale of PPE                                                                           (2,056)                       (242)                    (19,640)
Impairment of PPE                                                                                        -                           -                       1,421
                                                                                                     1,722                      (5,219)                    (46,123)


Weighted average number of shares                                                                 273,038                     273,038                     273,038




                                                   WG Wearne Limited Unaudited condensed consolidated interim financial results for the six months ended 31 August 2017
                                                                                                                                                       8




Condensed consolidated statement of cash flows
                                                                         Unaudited six               Unaudited six                 Audited year
                                                                       months ended 31             months ended 31                       ended
                                                                           August 2017                 August 2016             28 February 2017
                                                                                R'000                       R'000                        R'000
Cash flows from operating activities                                                 20,753                      23,470                     27,949
Interest income                                                                           -                          29                         64
Dividend income                                                                           -                          19                          -
Finance costs                                                                        (9,609)                    (13,360)                    (9,740)
Cash flows of held for sale / discontinued operations                                                                                        5,573
Net cash from operating activities                                                   11,145                     10,158                      23,846
Cash flows from investing activities
Purchase of property, plant and equipment                                            (1,625)                     (1,017)                   (12,230)
Proceeds on sale of property, plant and equipment                                     5,270                       2,281                     30,887
Loans repaid by subsidiaries                                                               -                           -                         -
Increase in other financial assets                                                         -                           -                         -
Net cash flows of discontinued operations                                                  -                           -                         -
Net cash from investing activities                                                    3,645                       1,264                     18,657
Cash flows from financing activities
Repayment of other financial liabilities                                            (14,725)                   (14,965)                    (41,348)
Net cash flows of discontinued operations                                                 -                           -                          -
Net cash from financing activities                                                  (14,725)                   (14,965)                    (41,348)
Total cash movement for the year                                                         64                     (3,543)                      1,155
Cash at the beginning of the year                                                   (21,704)                   (23,229)                    (22,859)
Total cash at end of the year                                                       (21,640)                   (26,772)                    (21,704)




                                     WG Wearne Limited Unaudited condensed consolidated interim financial results for the six months ended 31 August 2017
                                                                                                                                                                                                                                                                     9




Condensed consolidated statement of changes in equity
                                                                                                                              Total Share   Revaluation Available-for-sale
                                                                                              Share Capital   Share Premium       Capital      Reserve            Reserve               Total Reserves Accumulated Loss                         Total Equity

                                                                                                     R'000            R'000        R'000          R'000                   R'000                     R'000                    R'000                     R'000
Balance at 01 March 2016                                                                              273          178,084      178,357         57,326                   1,392                    58,718                 (194,842)                   42,233
Profit /(Loss) for the year                                                                              -                -            -              -                       -                         -                 (27,904)                  (27,904)
Other comprehensive income                                                                               -                -            -        (4,455)                    175                    (4,280)                        -                   (4,280)
Total comprehensive Profit / (Loss) for the year                                                         -                -            -        (4,455)                    175                    (4,280)                 (27,904)                  (32,184)
Transfer between reserves                                                                                -                -            -          (865)                       -                     (865)                     865                          -
Total contributions by and distributions to owners of company recognised directly in equity              -                -            -          (865)                       -                     (865)                     865                          -
Balance at 28 February 2017                                                                           273          178,084      178,357         52,006                   1,567                    53,573                 (221,881)                   10,049
Profit /(Loss) for the year                                                                              -                -            -              -                       -                         -                   3,778                     3,778
Other comprehensive income                                                                               -                -            -              -                    297                       297                         -                      297
Total comprehensive Profit / (Loss) for the year                                                         -                -            -              -                    297                       297                    3,778                     4,075
Transfer between reserves                                                                                -                -            -              -                       -                       (61)                     61                          -
Total contributions by and distributions to owners of company recognised directly in equity              -                -            -                                      -                         -                      61                        61
Balance at 31 August 2017                                                                             273          178,084      178,357         52,006                   1,864                    53,870                 (218,042)                   14,185




                                                                                                                                                   WG Wearne Limited Unaudited condensed consolidated interim financial results for the six months ended 31 August 2017
                                                                                                                                                            10




Notes

                                                                                Unaudited six               Unaudited six                   Audited year
                                                                              months ended 31             months ended 31                         ended
                                                                                  August 2017                 August 2016             28 February 2017
                                                                                       R'000                       R'000                        R'000


 1 Segment information

  Revenue : External sales
  Aggregates                                                                                69,661                      68,561                     142,396
  Readymix concrete                                                                        143,565                     117,539                     212,646
  Contracting                                                                                    -                      12,864                      34,387
  Total revenue : External Sales                                                           213,226                     198,964                     389,429

  Revenue : Inter-segment sales
  Aggregates                                                                                 25,534                      51,501                     69,529
  Readymix concrete                                                                          53,279                         308                     34,883
  Contracting                                                                                   184                       8,485                     44,081
  Total revenue : Inter-segment sales                                                        78,997                      60,294                    148,493

  Revenue : Total sales
  Aggregates                                                                                95,195                     120,062                     232,325
  Readymix concrete                                                                        196,844                     117,847                     255,529
  Contracting                                                                                  184                      21,348                      78,469
  Total revenue : Inter-segment sales                                                      292,223                     259,257                     566,323

  Operating Profit/(Loss)
  Aggregates                                                                                  1,236                       1,050                       3,319
  Readymix concrete                                                                          13,083                       1,521                       7,725
  Contracting                                                                                     -                       5,653                      (9,186)
  Total Operating Profit/(Loss)                                                              14,319                       8,224                       1,858

  Total Assets
  Aggregates                                                                               256,036                     244,301                     229,518
  Readymix concrete                                                                         41,470                      53,052                      57,475
  Contracting                                                                               31,085                      32,996                      54,311
  Total Assets                                                                             328,591                     330,349                     341,304

  The movement in Contracting sales decreasing to R0 when compared to previous reporting periods. This was due to the closure of the
  mobile contract crushing operations.


 2 Property, plant and equipment

  Opening Balance                                                                          250,524                     308,311                     294,426
  Additions                                                                                  1,625                       1,017                      12,230
  Disposals                                                                                 (3,213)                     (2,281)                    (13,840)
  Classified as held for sale                                                                    -                     (53,613)                     (7,817)
  Revaluations                                                                                   -                                                  (4,252)
  Depreciation                                                                              (9,182)                     (13,058)                   (28,802)
  Impairment loss                                                                                -                                                  (1,421)

  Total                                                                                    239,754                     240,376                     250,524




                                          WG Wearne Limited Unaudited condensed consolidated interim financial results for the six months ended 31 August 20177
                                                                                                                                                               11




Notes

                                                                                   Unaudited six               Unaudited six                   Audited year
                                                                                 months ended 31             months ended 31                         ended
                                                                                     August 2017                 August 2016             28 February 2017
                                                                                          R'000                       R'000                        R'000


 3 Trade and other receivables

   Trade receivables - Current                                                                  37,839                      49,253                      42,189
   Trade receivables - Non-current                                                               9,431                           -                       4,395
   Prepayments                                                                                   2,726                       1,825                       1,579
   Deposits                                                                                      2,189                       1,251                       1,871
   Other Receivables                                                                               920                       5,846                       6,045
                                                                                                53,105                      58,175                      56,079


   Non-current receivables relates to the Dancokom retention, all indications show that this amount will become due in March 2018.



 4 Other financial assets

   Available for sale
   Held by the Wearne Rehabilitation Trust: Stanlib Wealth
   Management Limited                                                                            6,702                       6,535                       6,366


   The investments are not available for use by the Group other than for the intended use of site rehabilitation in
   accordance with the directives of the Department of Minerals and Energy.

 5 Cash and cash equivalents

   Current assets                                                                                  492                         672                         640
   Current liabilities                                                                         (22,132)                    (27,626)                    (22,344)

                                                                                               (21,640)                    (26,954)                    (21,704)


   The Group has a loan covenant on its facilities with Nedbank which measure the debt service cover. The Group
   was in breach of these loan covenants during the year. Although Nedbank has not waived the breach they were made
   aware of it and the situation is monitored on a monthly basis.

 6 Non-current assets held for sale

   Assets
   Property, plant and equipment                                                                 7,817                      53,613                       7,817
   Trade and other receivables                                                                       -                        (285)                          -
   Inventories                                                                                      60                       4,569                          60
   Cash and cash equivalents                                                                         -                         185                           -
                                                                                                 7,877                      58,081                       7,877
   Liabilities
   Provisions                                                                                      584                       3,702                         584
   Other financial liabilities                                                                       -                      14,073                           -
   Trade and other payables                                                                          -                       1,737                           -
   Bank overdraft                                                                                    -                           3                           -
                                                                                                   584                      19,516                         584




                                             WG Wearne Limited Unaudited condensed consolidated interim financial results for the six months ended 31 August 20177
                                                                                                                                                               12




Notes

                                                                                   Unaudited six               Unaudited six                   Audited year
                                                                                 months ended 31             months ended 31                         ended
                                                                                     August 2017                 August 2016             28 February 2017
                                                                                          R'000                       R'000                        R'000


 7 Reserves

   Non-distributable reserves
   Fair value adjustment to available-for-sale investments                                       1,864                       1,758                       1,567


 8 Provisions

   Environmental rehabilitation                                                                  7,885                       7,360                       7,885


   Group companies are required to restore quarry and processing sites at the end of their useful lives to a
   condition acceptable to relevant authorities. A rehabilitation trust fund has been established at request of the
   regulatory authorities and annual contributions have been made to the trust as required, in order for the
   ultimate rehabilitation cost to be provided for at the end of the useful life of site.

 9 Other financial liabilities

   Opening Balance                                                                            152,712                     183,331                     170,485
   New borrowings                                                                               1,026                       2,119                      23,575
   Repayments                                                                                 (14,725)                    (14,965)                    (41,348)
   Closing Balance                                                                            139,013                     170,485                     152,712


   Non-current borrowings                                                                      24,603                     107,091                      43,741
   Current borrowings                                                                         114,410                      63,394                     108,971
                                                                                              139,013                     170,485                     152,712


   As at 31 August 2017 the following Non-Current Liabilities were reclassified as Current:
   ·     IDC loans in the amount of R68.75 million;
   ·     Nedbank Installment Sale loans of R9.2 million; and
   ·     ABSA Term loan of R30 million.

   These long term liabilities were reclassified from Non-Current to Current in compliance with the International Financial Reporting
   Standards (IAS 1) which requires an entity to classify a liability as current when the entity is in breach of a provision of a loan
   arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand even if the lender
   agreed, after the reporting period and before the authorisation of the financial statements for issue, not to demand payment as a
   consequence of the breach.


Notes

                                                                                  Unaudited six               Unaudited six                   Audited year
                                                                                months ended 31             months ended 31                         ended
                                                                                    August 2017                 August 2016             28 February 2017
                                                                                         R'000                       R'000                        R'000


10 Cash generated from operations

   No material events occurred between the reporting date and the date of this announcement.

   Profit / (Loss) before taxation                                                              3,778                      (4,239)                    (23,545)
     Adjustments for:
   Depreciation and amortisation                                                                9,182                      13,058                      28,802
   Gains on disposals, scrappings and settlements of assets and                                (2,056)                        (90)                    (19,640)
   liabilities
   Dividend income                                                                                (35)                        (19)                        (53)
   Interest income                                                                                (53)                        (29)                       (129)
   Finance costs                                                                               10,635                      12,434                      25,586
   Impairment losses and reversals                                                                  -                           -                       1,421
   Other non-cash items                                                                            49                           -                          95
   Changes in working capital:                                                                                                  -                           -
   Inventories                                                                                  2,974                       5,887                       9,614
   Trade and other receivables                                                                   (838)                     (9,980)                     (7,884)
   Trade and other payables                                                                    (2,883)                      6,449                      13,682
                                                                                               20,753                      23,470                      27,949


11 Events after the reporting date

   No material events occurred between the reporting date and the date of this announcement.



Corporate details

        REGISTERED OFFICE                      COMMERCIAL BANKERS
        WG Wearne Limited                      Nedbank Limited
        (Registration Number 1994/005983/06)   (Registration number 1951/000009/06)


        Stonemill Office Park                  Nedbank House
        3 Kiepersol House                      12 Fredman Drive
        300 Acacia Road                        Sandown
        PO Box 1674                            PO Box 784088
        Cresta, 2118                           Sandton, 2146
        Tel: 011 459 4500                      Tel: 011 775 2600
        Fax: 011 459 5481                      Fax: 011 783 4882
        Email: info@wearne.co.za


        TRANSFER SECRETARY                     COMPANY SECRETARY
        Terbium Financial Services (Pty) Ltd   iThemba Governance and Statutory
                                               Solutions Proprietary Ltd
        Beacon House                           (Registration number 2008/008745/07)
        31 Beacon Road
        Florida North, 1709                    Route 21 Corporate Park
        Tel: 086 010 4191                      72 Regency Drive
        Email: info@terbium.global             Block A
                                               Irene
                                               0157
        DESIGNATED ADVISER
        Exchange Sponsors


        44A Boundary Road
        Inanda Sandton, 2196
        PO Box 411216
        Craighall, 2024
        Tel: 011 880 2113
        Fax: 011 447 4824

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