Wrap Text
Summarised Consolidated Financial Results for the year ended 30 June 2018
ROLFES HOLDINGS LIMITED
(Registration number 2000/002715/06)
Incorporated in South Africa
Share code: RLF
ISIN: ZAE000159836
("Rolfes" or "the group")
SUMMARISED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 30 June 2018
Derived from the audited consolidated financial statements
PERFORMANCE SUMMARY
Key features
- Revenue from continuing operations decreased by 1,1% to R1,422 billion
- Normalised headline earnings from continuing operations decreased by 31,3% to
34,7 cents per share
- Final dividend declared of 4 cents per share maintaining a full year dividend of
8 cents per share
- Strategic issues addressed and repositioned for growth
COMMENTARY
Strategic overview
Rolfes is a leading black empowered, industry-compliant supplier of agricultural, food, industrial
and water chemical management solutions for the local and international markets.
As part of its core organic growth strategy, the group concentrates on the expansion of its product
ranges. While the group will continue to seek acquisitions which have a high barrier to entry,
management's priority is to focus on the core businesses, their stability and organic growth.
Agricultural
The Agricultural division develops, manufactures and distributes products that promote plant root and
foliar health, soil nutrition, disease prevention and control as well as various other agricultural
remedies into the agricultural industry.
Food chemicals
Bragan Chemicals is an additive and ingredient supplier, imports and locally procures chemical
commodities. Through bulk importation and distribution of additives, ingredients and chemicals,
we supply to our clients who focus on food manufacturing.
Industrial chemicals
The Chemicals division distributes various products and additives including solvents, lacquer thinners,
surfactants, cleaning solvents, water treatment products, creosotes and waxes into the industrial
manufacturing, construction and water industry. The division further develops, manufactures and
provides leather chemicals and treatment solutions into the leather tanning industry.
Colour
Rolfes Colour supplies organic and inorganic products, additives, in-plant and point-of-sale
dispersions and pigments to all sectors of the paint industry.
Water
Rolfes Water provides total industrial water management solutions, including specialised water
purification solutions and products for commercial cooling and the industrial sectors.
Opportunities exist within petrochemical, primary metals, sugar and mining industries.
Group financial review
Continuing operations revenue decreased by 1,1% to R1,422 billion (June 2017: R1,437 billion).
Revenue was negatively impacted by the poor first quarter due to focus on prior year matters and
working capital management issues. The second and third quarters reflected a recovery, while the
fourth quarter was tough due to the general economic environment, poor trading conditions, most
specifically in the Agricultural division, and the finalisation of the restructuring of the
relevant management teams.
The revenue for the discontinued Silica mining operation was incidental at R1,3 million (June 2017:
R47,6 million) and the mine was sold, subject to the section 11 approval by the Department of Mineral
resources; the approval has not been received and as such the assets and liabilities are presented as
"Held for sale" on the consolidated statement of financial position. The proceeds from the mine will
amount to R7,5 million and there will be no profit or loss in respect of this transaction.
Gross profit for continuing operations decreased by 3,4% to R289,2 million (June 2017: R299,3 million)
and resulted in a margin of 20,3%, slightly down on the 2017 year of 20,8%. The reduction in margin
percentage was partially due to the impairment of inventory due to a more conservative management
approach when assessing asset value. The normalised margin amounts to 21,9% and management is
comfortable that the margin is sustainable and the group has capacity for future growth in all
major divisions.
Normalised operating profit from continuing operations, before once-off impairments and non-recurring
costs, decreased by 20,9% to R108,0 million (June 2017: R136,5 million) at a margin of 7,6% of revenue
(June 2017: 9,5%). Once-off impairments and non-recurring costs impacting continuing operations on an
operating profit level are reflected on the normalised earnings table below. Management is focused in
improving the operating margin and believes the foundation is set for the future. The current year's
trading was impacted by lost business in various areas and the focus has been on ensuring the divisions
are correctly positioned, suitably staffed, appropriately structured for growth and delivering
sustainable earnings.
Net finance costs amounting to R28,2 million increased by 8,8% from R25,9 million in 2017; this is
a direct result of the increased net debt which was R191,8 million as at 30 June 2018 compared to
R173,7 million as at 30 June 2017. The increased debt is to ensure a more appropriate inventory
level is in place during the peak season in 2019, mitigating against potential lost sales due to
stock shortages. Inventory levels as at 30 June 2018 are R334,7 million compared to R275,6 million
for 2017.
There is significant attention given to managing the return on capital employed at a business unit
level so as to maximise returns for shareholders.
Earnings decreased to R1,5 million (June 2017: R11,5 million) and headline earnings decreased to
R19,8 million (June 2017: R33,2 million). Headline earnings per share for continuing operations
decreased to 12,6 cents per share (June 2017: 41,0 cents per share). Earnings and headline earnings
were materially impacted by impairments and non-recurring items.
The directors believe that normalised headline earnings per share from continuing operations remain
the most meaningful measure for evaluating the group's operational performance. Normalised headline
earnings amounted to R55,2 million (June 2017: R81,4 million). Normalised headline earnings per share
decreased by 31,3% to 34,7 cents (June 2017: 50,5 cents). Normalised headline earnings are defined as
headline earnings from continuing operations excluding non-recurring items, once-off costs, impairments
and adjustments.
The weighted average number of shares in issue for the year was 161 301 468 and remained unchanged
from the prior year.
Normalised headline earnings per share:
Group audited
Dis- Dis-
Continuing continuing Continuing continuing
Group operations operations Group operations operations
Audited Audited Audited Audited Audited Audited
as at as at as at as at as at as at
30 June 30 June 30 June 30 June 30 June 30 June
2018 2018 2018 2017 2017 2017
R'000 R'000 R'000 R'000 R'000 R'000
Headline earnings 19 751 20 337 (586) 33 171 66 157 (32 986)
Adjusted for the before-tax
effect non-recurring
other costs:
Rehabilitation costs
resin plant site - - - 1 792 1 792 -
Impairment of a
third-party loan - - - 4 379 4 379 -
Lead chrome pigment write-off - - - 9 375 9 375 -
Non-recurring group costs 4 010 4 010 - 5 625 5 625 -
Excess audit fee 3 000 3 000 - - - -
Staff incentives and
settlements 9 486 9 486 - - - -
Site clean-up and renovations 6 268 6 268 - - - -
Provision for claim 5 000 5 000 - - - -
Inventory related impairments 21 632 21 632 - - - -
Total tax effect (14 501) (14 501) - (5 928) (5 928) -
Total after tax effect 34 895 34 895 - 15 243 15 243 -
Normalised headline earnings 54 646 55 232 (586) 48 414 81 400 (32 986)
Normalised headline
earnings per share 34,32 34,68 (0,36) 30,01 50,46 (20,45)
To add value to users, the normalised segmental split is reflected below:
30 June 2018 30 June 2018
Normal- Normal-
30 June 2018 ised 30 June 2018 ised
Revenue GP Norm EBIT
R'000 R'000 GP% R'000
Agriculture 285 810 81 405 28,5 22 555
Food chemicals 673 108 110 217 16,4 70 132
Chemicals 396 301 77 609 19,6 46 772
Colour 104 613 16 733 16,0 (684)
Water 41 944 24 974 59,5 (1 063)
Other 62 411 (147) (27 185)
Revenue elimination (142 539) - -
Share-based payment expense - - (2 496)
Continuing operations 1 421 648 310 791 21,9 108 031
30 June 2017 30 June 2017
Normal- Normal-
30 June 2017 ised 30 June 2017 ised
Revenue GP Norm EBIT
R'000 R'000 GP% R'000
Agriculture 293 450 73 546 25,1 25 951
Food chemicals 717 019 126 582 17,7 84 881
Chemicals 368 663 63 876 17,3 40 771
Colour 88 512 14 874 16,8 2 751
Water 51 255 27 548 53,7 4 435
Other 31 047 (415) (22 316)
Revenue elimination (112 537) - -
Share-based payment expense - - -
Continuing operations 1 437 409 306 011 21,3 136 473
Group cash flow performance
Cash generated from operations for continuing operations, amounted to R109,2 million (June 2017:
R145,5 million). The cash generated is in line with normalised operating profit for continuing operations
amounting to R108,0 million in the current year while the prior year was R136,5 million. Net working capital
increased by R40,7 million and is represented by an increase in inventory of R92,8 million, an increase in
trade and other receivables of R16,0 million and an increase in accounts and other payables of R70,3 million.
The management of working capital remains a key focus area with the priority of ensuring we have sufficient
stock to trade over peak periods. There however, remains opportunity for improvement in business units not
running on optimal stock levels. Net finance costs paid decreased slightly to R28,1 million while tax paid
amounted to R26,4 million. Dividends paid amounting to R12,9 million represent the 4 cents paid as a final
dividend for 2017 and an interim dividend of 4 cents paid for 2018. Cash utilised in investing activities
comprises investment in product development, predominantly relating to the Agricultural division, amounting
to R5,9 million (30 June 2017: R14,9 million) and additions to property, plant and equipment amounted to
R 3,9 million (30 June 2017: R8,4 million). The cash utilised in financing activities was made up of a
net loan repayment of R11,0 million and the acquisition of the minority interest in the Water business
of R4,5 million.
Operational review
Agricultural
Revenue decreased by 2,6% to R285,8 million (June 2017: R293,4 million). Gross profit margins decreased to
23,5% (June 2017: 25,1%) due to inventory-related impairments amounting R14,3 million; the normalised gross
profit amounted to R81,4 million which equates to 28,5%. The division's performance was partially impacted
by drought conditions in the Western Cape and although conditions improved in June 2018 we had not seen the
benefit before year end. The divisions' management was restructured to enable a increased focus on sales;
this has had a positive impact on the business.
Operating profit was impacted by the inventory impairments as well as more conservative capitalisation
methodology relating to intellectual property. The resultant operating profit amounted to R10,6 million
(June 2017: R20,5 million) while the normalised operating profit equates to R22,6 million and reflects
the sustainable earnings for this division at the reported level of revenue. The business has a fairly
fixed cost base and an increase in revenue should result in a good translation through to operating
profit.
Food chemicals
Revenue decreased by 6,1% to R673,1 million (June 2017: R717,0 million) mainly due to stock shortages
experienced in the first quarter. Gross profit margins decreased to 16,4% (June 2017: 17,7%) as a direct
result of product mix, pricing strategies and exchange rate movement. The gross profit amounted to
R110,2 million compared to the prior year of R126,6 million. Management is continuously trying to
balance margin percentage with market share and feels the 2018 overall margin is more realistic for
the industry.
Net operating profit for the year amounted to R62,6 million (June 2017: R 81,5 million).
Growth initiatives include the continued focus on the national expansion and collective export drive of
products into southern African countries as well the re-introduction of the personal care products.
Industrial chemicals
Revenue increased by 7,5% to R396,3 million (June 2017: R368,7 million). Gross profit margins increased
to 19,6% (June 2017: 17,3%). The increase was consistent across both the bulk industrial chemicals and
the more specialised leather solutions. The division continuously focuses on adding complementary products
to the basket so as to maximise opportunities with all clients.
Operating costs remained well controlled and resulted in a net operating profit, before a R 5,0 million
claims provision of R43,0 million (June 2017: R35,0 million). Operating profit margins increased to 10,9%
(June 2017: 9,5%), which reflects an exaggerated increase due to normalised adjustments in the prior year.
On a normalised basis the operating margin increased from 11,1% to 11,8%.
Colour
Revenue increased by 18,2 % to R104,6 million (June 2017: R88,5 million) and normalised gross profit
increased to R16,7 million, which represents a margin of 16,0% (June 2017: R14,9 million and 16,8%).
The reduction in margin percentage is due to the increased revenue and the expansion of the product
range which includes more commoditised products. The Colour division was impacted by inventory impairments
following the prior issues relating to the liquidation of the lead chrome pigment stock following the
closure of the lead chrome pigment plant in March 2016. The division has since gone through a restructure
with the focus being on the re-introduction of a full basket of goods while targeting a reduced working
capital requirement over a period of time.
Due to the performance over the last few years, goodwill amounting to R5,6 million required full impairment.
The normalised operating loss for the year amounted to R0,7 million compared to the comparative period
profit of R2,7 million. The management team and staff complement have been stabilised and the business
is positioned to contribute to the group having incurred losses for a number of years.
Water
Revenue decreased by 18,2% to R41,9 million (June 2017: R51,3 million) as the division was impacted
by the closure of the Botswana business. The Water business, which has a fixed cost base and strong
intellectual property, has rebranded and repositioned itself moving towards being a total water
management solution provider. We have invested in a strong management team and numerous proposals
have been submitted, and despite the long lead time for tender awards, momentum is being gained.
Operating profit was impacted by not only poor trading but the necessity to impair the goodwill amounting
to R9,2 million as well as the Botswana properties by R2,0 million based on market prices. Having added
back the non-recurring items results in an operating loss of R1,1 million for the full year while the
business has turned to become profitable again.
The business is now 100% owned as we reached an agreement to purchase the 30% minority interest held by
the previous owners for an amount of R4,5 million in March 2018.
Other
The Other division within the segmental analysis includes the Jet Park property and Head office expenses.
The normalised cost of this division amounted to R27,2 million (June 2017: R22,3 million) before the
impact of non-recurring costs, excess audit fee, staff incentives and settlements as well as site
clean up and renovation.
Operating environment and prospects
The group has made good progress on the strategic and legacy issues and the foundation has been set for
the future to deliver normal results and achieve appropriate returns. While ensuring we focus on our South
African businesses, we will be trying to maximise our African revenues through direct exports reducing the
risks related to cross-border costs, stock holdings and collections. New product ranges continue to be added
to the portfolio and we are leveraging off our current capacities in all divisions. The start to the new
financial year has met the board expectations and the group is on track to achieve an improvement in normalised
earnings. Prospects in all divisions are positive and opportunities exist in all of our segments. The management
team is well equipped, appropriately incentivised and focused on the strategic imperatives of delivering
sustainable earnings and returns on capital employed.
Any forward looking statements in this announcement have not been reviewed and reported on by the company's
auditors.
Dividends
Notice is given that a final gross cash dividend of 4,0 cents per share in respect of the year ended
30 June 2018 has been declared payable, from income reserves, to the holders of ordinary shares recorded
in the books of the company on Friday, 19 October 2018. The last day to trade cum dividend will therefore
be Tuesday, 16 October 2018 and Rolfes' shares will trade ex dividend from Wednesday, 17 October 2018.
Payment of the dividend will be on Monday, 22 October 2018. Share certificates may not be dematerialised
or rematerialised from Wednesday, 17 October 2018 (which is ex date) to Friday, 19 October 2018, both
days inclusive. Withholding tax on dividends will be deducted for all shareholders who are not exempt
in terms of the legislation at a rate of 20% which will result in a final net cash dividend of 3,2 cents
per share. The company's issued share capital at the period end is 161 942 800 shares (which includes
641 332 treasury shares) and the company's tax number is 9492/089/14/0.
Share buyback
The board has authorised a share buyback programme in accordance with the general authority which may be
implemented by management within set parameters. The intention of the programme is to purchase shares to
be held in treasury to eliminate any dilution created by the conditional share plan.
Changes to the board
At year-end, the board comprised nine directors, two executive directors and seven non-executive directors
of whom four are independent non-executives. As the chairman is not independent, Seapei Mafoyane serves as
the lead independent director. On 16 October 2017, Lizette Lynch resigned with immediate effect and
Mr RM Buttle was appointed as chief executive officer. Andre Broodryk was appointed as chief financial
officer on 6 November 2017.
On behalf of the board
MS Teke RM Buttle
Chairman Chief executive officer
17 September 2018
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
for the year ended 30 June
2018 2017
R'000 R'000
ASSETS
Non-current assets 356 432 393 725
Property, plant and equipment 86 612 104 307
Intangible assets and goodwill 251 688 269 172
Deferred tax asset 18 132 20 246
Current assets 667 216 591 402
Inventories 334 739 275 582
Trade and other receivables 250 533 237 817
Derivative asset 6 454 -
Cash and cash equivalents 43 148 71 970
Current tax asset 10 205 6 033
Assets classified as held for sale 22 137 -
645 079 591 402
Total assets 1 023 648 985 127
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 207 721 207 721
Retained earnings 260 313 281 778
Share-based payment reserve 2 496 -
Foreign currency translation reserve (1 679) (696)
Owners of the parent 468 851 488 803
Non-controlling interest - (3 169)
Total equity 468 851 485 634
Non-current liabilities 233 509 262 900
Interest-bearing liabilities 208 395 221 652
Deferred tax liability 17 155 27 526
Provisions 7 959 13 722
Current liabilities 321 288 236 593
Trade and other payables 284 143 208 881
Derivative liability - 780
Interest-bearing liabilities 26 562 24 040
Current tax liability 835 2 892
Liabilities directly associated with assets
classified as held for sale 9 748 -
Total equity and liabilities 1 023 648 985 127
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
for the year ended 30 June
2018 2017
Continuing operations R'000 R'000
Revenue 1 421 648 1 437 409
Cost of sales (1 132 489) (1 138 141)
Gross profit 289 159 299 268
Other income 13 988 13 675
Distribution expenses (9 200) (8 974)
Marketing expenses (4 334) (2 529)
Administration expenses (32 159) (16 747)
Impairments (19 016) (5 996)
Other expenses (195 271) (163 516)
Share-based payment expense (2 496) -
Operating profit before interest 40 671 115 181
Finance income 1 309 4 915
Finance cost (29 558) (30 772)
Profit before taxation 12 422 89 324
Income tax (12 717) (25 533)
(Loss)/profit from continuing operations (295) 63 791
Discontinued operations
Loss from discontinued operations, net of tax (583) (53 500)
(Loss)/profit (878) 10 291
Other comprehensive (loss)/income, net of taxation
Items that may be reclassified subsequently
to profit or loss:
Exchange difference on translating of
foreign operations (982) 1 360
Total comprehensive (loss)/income (1 860) 11 651
(Loss)/profit for the year attributable to:
Owners of the parent 1 494 11 467
Non-controlling interest (2 372) (1 176)
(878) 10 291
Total comprehensive (loss)/income attributable to:
Owners of parent 512 12 827
Non-controlling interest (2 372) (1 176)
(1 860) 11 651
Earnings and headline earnings per share:
Group:
- Earnings (basic) (cents) 0,93 7,11
- Earnings (diluted) (cents) 0,92 7,11
- Headline earnings (basic) (cents) 12,24 20,56
- Headline earnings (diluted) (cents) 12,20 20,56
Continuing operations:
- Earnings (basic) (cents) 1,29 40,28
- Earnings (diluted) (cents) 1,28 40,28
- Headline earnings (basic) (cents) 12,61 41,01
- Headline earnings (diluted) (cents) 12,56 41,01
Discontinued operations:
- Earnings (basic) (cents) (0,36) (33,17)
- Earnings (diluted) (cents) (0,36) (33,17)
- Headline earnings (basic) (cents) (0,36) (20,45)
- Headline earnings (diluted) (cents) (0,36) (20,45)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June
Reserves
Share- Foreign Non-
based currency control-
Stated Retained payment translation ling Total
capital earnings reserve reserve interest equity
R'000 R'000 R'000 R'000 R'000 R'000
Balance at 30 June 2016 207 721 288 736 - (2 057) (2 502) 491 898
Total comprehensive
income for the year - 11 467 - 1 360 (1 176) 11 651
Dividends paid - (16 192) - - - (16 192)
Acquisition of
non-controlling interest - (2 233) - - 509 (1 724)
Balance at 30 June 2017 207 721 281 778 - (697) (3 169) 485 633
Total comprehensive (loss)/
income for the year - 1 494 - (982) (2 372) (1 860)
Share-based payment expense - - 2 496 - - 2 496
Dividends paid - (12 919) - - - (12 919)
Acquisition of
non-controlling interest - (10 040) - - 5 541 (4 499)
Balance at 30 June 2018 207 721 260 313 2 496 (1 679) - 468 851
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June
Conti- Dis- Conti- Dis-
nuing nuing nuing nuing
Group operations operations Group operations operations
2018 2018 2018 2017 2017 2017
R'000 R'000 R'000 R'000 R'000 R'000
Cash flow (utilised in)/
generated from:
Cash generated from operations 102 688 109 186 (6 498) 132 513 145 465 (12 952)
Net working capital movement (38 446) (40 685) 2 240 (8 261) (20 823) 12 562
Operating activities 64 242 68 501 (4 250) 124 252 124 642 (390)
Net finance cost paid (28 138) (28 012) (126) (28 396) (25 827) (2 569)
Tax paid (26 334) (26 334) - (32 450) (32 073) (379)
Cash available for investment
and redistribution 9 770 14 155 (4 385) 63 406 66 742 (3 336)
Dividends paid (12 919) (12 919) - (16 192) (16 192) -
Cash flow utilised in
investing activities (9 747) (9 889) 142 (22 815) (22 061) (754)
- Investment in property,
plant and equipment (3 895) (4 037) 142 (8 433 (7 679) (754)
- Investment in intangible assets (5 852) (5 852) - (14 885) (14 885) -
- Other - - - 503 503 -
Cash flow (utilised)/generated from
financing activities (14 486) (17 477) 2 991 (2 769) (7 589) 4 820
- Increase bearing
liabilities raised 10 537 10 537 19 417 19 417
- Interest bearing
liabilities repaid (20 523) (20 000) (523) (20 462) (20 000) (462)
- Increase/(decrease) in
inter-segment funding - (3 514) 3 514 - (5 281) 5 281
- Minority buy-outs (4 500) (4 500) - (1 725) (1 725) -
Cash (deficit)/generated
for the period (27 382) (26 130) (1 252) 21 630 20 900 730
Effects of exchange rate
fluctuations on
translation of foreign operations (1 440) (1 441) - 1 942 1 942 -
Cash and cash equivalents:
- Beginning of the period 71 970 70 412 1 558 48 398 47 568 830
- End of the period 43 148 42 842 306 71 970 70 410 1 560
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 30 June
1. BASIS OF ACCOUNTING AND PREPARATION
The summarised consolidated financial statements are prepared and presented in accordance with the
requirements of the JSE Listings Requirements for and the requirements of the Companies Act of South
Africa. The Listings Requirements require summary reports to be prepared in accordance with the
framework concepts and the measurement and recognition requirements of the International Financial
Reporting Standards ("IFRS") and the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards Council
and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting.
The accounting policies applied in the preparation of these financial statements are in terms of
IFRS and are consistent with those applied in the previous consolidated financial statements.
2. FINANCIAL PREPARATION AND REVIEW
The condensed consolidated audited financial statements for the year ended 30 June 2018 have been prepared
by Rolfes Holding Limited's group financial reporting team. This process was supervised by the group's
chief financial officer Mr AP Broodryk, and approved by the Rolfes Holdings Limited board of directors on
17 September 2018.
These summarised consolidated financial statements are not itself audited, but have been derived
from the audited consolidated financial statements of Rolfes Holdings Limited for the year ended
30 June 2018, on which the auditor, KPMG Inc., has expressed an unmodified audit opinion. A copy
of the audit opinion is available for inspection at the company's registered address.
The board of directors takes full responsibility for the preparation of the summarised consolidated
financial statements and that it has been correctly extracted from the underlying annual financial
statements.
3. SEGMENT REPORT
Segmental analysis for the year ended 30 June 2018:
Dis-
Total conti-
Agri- Chemi- (conti- nued
culture Food cals Colour Water Other nuing) (Silica) Total
2018 2018 2018 2018 2018 2018 2018 2018 2018
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Total revenue 285 810 673 108 396 301 104 613 41 944 - 1 501 776 1 307 1 503 083
- External revenue 276 502 656 780 355 410 93 144 39 812 - 1 421 648 1 307 1 422 955
- Inter-segment revenue 9 308 16 328 40 891 11 469 2 132 - 80 128 - 80 128
Gross profit/(loss) 67 080 110 217 77 609 11 642 22 758 (147) 289 159 - 289 159
EBITDA 18 029 64 171 39 918 (5 291) (7 628) (33 675) 75 524 (77) 75 447
HEPS impairments (714) (76) (83) (5 621) (5 328) (6 144) (17 965) 3 (17 962)
Depreciation and amortisation (6 353) (1 192) (1 386) (1 386) (2 300) (1 775) (14 392) (753) (15 145)
Share-based payment expense (317) (319) (476) - (239) (1 145) (2 496) - (2 496)
PBIT 10 645 62 584 37 973 (12 298) (15 495) (42 739) 40 671 (827) 39 844
Total assets 276 479 383 922 198 724 69 313 39 882 34 516 1 002 836 20 812 1 023 648
Total liabilities 60 430 137 646 96 780 8 040 11 227 229 004 543 127 11 670 554 797
NAV 216 049 246 276 101 944 61 273 28 655 (194 488) 459 709 9 142 468 851
Inventories 82 430 127 288 86 306 36 124 3 726 (1 135) 334 739 - 334 739
Trade receivables 45 721 111 506 58 677 17 179 6 162 (5 839) 233 406 638 234 044
Trade payables (35 872) (129 510) (82 021) (5 198) (5 355) 8 851 (249 105) (716) (249 821)
Net working capital 92 279 109 284 62 962 48 105 4 533 1 877 319 040 (78) 318 962
Segmental analysis for the year ended 30 June 2017:
Dis-
Total conti-
Agri- Chemi- (conti- nued
culture Food cals Colour Water Other nuing) (Silica) Total
2017 2017 2017 2018 2017 2017 2017 2017 2017
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Total revenue 293 450 717 019 368 663 88 512 51 255 - 1 518 899 47 628 1 566 527
- External revenue 280 206 700 026 322 675 85 595 48 907 - 1 437 409 47 624 1 485 038
- Inter-segment revenue 13 244 16 993 45 988 2 917 2 348 - 81 490 4 81 494
Gross profit/(loss) 73 546 126 582 63 876 8 132 27 548 (415) 299 268 (14 307) 284 961
EBITDA 25 100 81 816 36 126 (6 696) 5 430 (15 027) 126 749 (29 325) 99 424
HEPS impairments 441 55 - 107 (11) (1 616) (1 024) (20 885) (21 909)
Depreciation and amortisation (5 068) (384) (1 138) (507) (1 360) (2 087) (10 544) (2 220) (12 764)
Share-based payment expense - - - - - - - - -
PBIT 20 473 81 487 34 988 (7 096) 4 059 (18 730) 115 181 (50 430) 64 751
Total assets 301 132 340 030 168 974 74 017 56 973 7 416 948 542 36 585 985 127
Total liabilities 73 145 89 987 71 215 11 113 21 167 202 849 469 476 30 017 499 493
NAV 227 987 250 043 97 759 62 904 35 806 (195 433) 479 066 6 568 485 634
Inventories 93 876 85 116 50 134 29 448 7 008 (1 000) 264 582 11 000 275 582
Trade receivables 57 133 104 593 55 912 16 047 12 820 (28 130) 218 375 6 357 224 732
Trade payables (47 290) (84 519) (57 730) (9 406) (7 641) 24 526 (182 060) (3 531) (185 591)
Net working capital 103 719 105 190 48 316 36 089 12 187 (4 604) 300 897 13 826 314 723
4. IMPAIRMENT
During the year impairment losses were recognised.
Segment 2018 2017
R'000 R'000
Agriculture
- Impairment of intangible assets 714 4 380
Chemicals
- Impairment of property, plant and equipment 111 -
Colour
- Impairment of goodwill 5 638 -
- Impairment of property, plant and equipment 287 -
Water
- Impairment of goodwill 9 225
- Impairment of property (classified as held for sale) 1 966 -
Discontinued - Silica
- Impairment of property, plant and equipment - 19 560
Group
- Impairment of goodwill (Colour and Water) 1 074 1 616
19 015 25 556
5. TAX
Dis- Dis-
Continuing continued Continuing continued
Group operations operations Group operations operations
2018 2018 2018 2017 2017 2017
R'000 R'000 R'000 R'000 R'000 R'000
Income tax (expense)/benefit
Current tax:
- Current year 20 436 20 436 - 29 192 30 244 (1 052)
- Prior year (332) (332) - 4 477 4 477 -
Deferred tax (8 257) (7 387) (870) (9 471) (9 188) (283)
Total 11 847 12 717 (870) 24 198 25 533 (1 335)
% % % % % %
Tax rate reconciliation
- Statutory rate 28,0 28,0 28,0 28,0 28,0 28,0
- Effect of non-allowable
expenditure 14,4 12,6 (1,3) 3,4 1,7 -
- Effect of research and
development allowance (1,9) (1,7) - (2,9) (1,5) -
- Effect of different tax
rates of subsidiaries
operating in other
jurisdictions 6,2 5,5 - (0,1) - -
- Effect of share-based 6,4 5,6 - - - -
- Effect of prior year
(overstatement)/understatement 0,7 0,6 - 2,3 0,8 (0,7)
- Effect of deferred tax
not recognised 54,3 51,8 33,1 22,5 (0,4) (24,2)
Effective rate 108,1 102,4 59,8 53,2 28,6 3,1
6. EARNINGS PER SHARE
2018 2017
2018 Dis- 2017 Dis-
2018 Continuing continued 2017 Continuing continued
Group operations operations Group operations operations
R'000 R'000 R'000 R'000 R'000 R'000
Numerator
Profit/(loss) for the
year attributable to
equity holders of the parent 1 494 2 077 (583) 11 467 64 967 (53 500)
Adjusted for:
(Gain) from sale of
property, plant and
equipment (net) (759) (756) (3) (434) (434) -
(Gain) from sale of
property, plant and
equipment (gross) (1 054) (1 050) (4) (603) (603) -
(Gain) from sale of
property, plant and
equipment (tax) 295 294 1 169 169 -
Loss from sale of
property, plant and
equipment (net) - - - 962 8 954
Loss from sale of
property, plant and
equipment (gross) - - - 1 336 11 1 325
Loss from sale of
property, plant and
equipment (tax) - - - (374) (3) (371)
Impairment property,
plant and equipment (gross) 2 364 2 364 - 19 560 - 19 560
Impairment goodwill (gross) 16 652 16 652 - 1 616 1 616 -
Headline earnings 19 751 20 337 (586) 33 171 66 157 (32 986)
Denominator
Opening balance
(number of shares) ('000) 161 943 161 943 161 943 161 943 161 943 161 943
Treasury shares
(number of shares) ('000) (641) (641) (641) (641) (641) (641)
Weighted average number
of shares used in basic
earnings per share, and
headline earnings per
share ('000) 161 302 161 302 161 302 161 302 161 302 161 302
Dilutive shares 648 648 648 - - -
Weighted average number of
shares used in diluted
earnings per share and diluted
headline earnings per share ('000) 161 950 161 950 161 950 161 302 161 302 161 302
Earnings per share (cents)
Basic 0,93 1,29 (0,36) 7,11 40,28 (33,17)
Diluted 0,92 1,28 (0,36) 7,11 40,28 (33,17)
Headline earnings per share (cents)
Basic 12,24 12,61 (0,36) 20,56 41,01 (20,45)
Diluted 12,20 12,56 (0,36) 20,56 41,01 (20,45)
7. FAIR VALUE DISCLOSURE
The group does not have any material items reported at fair value at the year end. Certain financial
instruments, being forward exchange contracts are measured using level 2 inputs, and presented under
trade and other receivables and trade and other payables. The impairments and provisions accounted
for in relation to discontinued operations are measured using level 3 inputs.
8. SUBSEQUENT EVENTS
Cash dividend declaration
In accordance with board policy to review dividend payments to shareholders at the end of each
reporting period, notice is hereby given that the board declared a final gross cash dividend of
4 cents per ordinary share for year ended 30 June 2018. The dividend will be payable to
shareholders recorded in the register of the company at the close of business on the record
date appearing below.
The number of ordinary shares in issue at the date of this declaration is 161 942 800.
The salient dates applicable to the final dividend are as follows:
Declaration date: Monday, 17 September 2018
Last date to trade cum dividend Tuesday, 16 October 2018
Shares commence trading ex dividend Wednesday, 17 October 2018
Record date Friday, 19 October 2018
Payment date Monday, 22 October 2018
In accordance with paragraphs 11.17(c)(i) to (x) and 11.17(c) of the JSE Listings Requirements,
the following additional information is disclosed:
- The local dividends tax rate is 20%;
- The dividends will be paid from cash reserves;
- The gross dividend to be used in determining the dividends tax is 4 cents per ordinary share;
- The dividends tax to be withheld by the company is equal to 0,8 cents per ordinary share;
- The gross dividend amount is 4 cents per ordinary share for shareholders exempt from dividends tax;
- The net dividend amount is 3,2 cents per ordinary share for shareholders not exempt from dividends tax;
- Rolfes Holdings Limited has 161 942 800 ordinary shares in issue (which includes 641 332 treasury
shares); and
- Rolfes Holdings Limited's income tax reference number is 9492/089/14/0.
Where applicable, payment in respect of certificated shareholders will be transferred electronically
to shareholders' bank accounts on the payment date. In the absence of specific mandates, payment
cheques will be posted to certificated shareholders at their risk on the payment date. Shareholders
who have dematerialised their shares will have their accounts at their Central Securities Depository
Participant or broker credited on the payment date.
No share certificates may be dematerialised or rematerialised between Wednesday, 17 October 2018 and
Friday, 19 October 2018 both days inclusive.
There are no additional material events, other than those reported in this announcement, that have
occurred between 30 June 2018 and the date of this report which may have a material impact on the
understanding of this report and the financial information presented.
CORPORATE INFORMATION
ROLFES HOLDINGS LIMITED
(Registration number 2000/002715/06)
Incorporated in South Africa
Share code: RLF
ISIN: ZAE000159836
("Rolfes" or "the group")
Registered office
First Floor, The Oval West, Wanderers Office Park
52 Corlett Drive, Illovo, 2196
Transfer secretaries
Computershare Investor Services Proprietary Limited
Directors
MS Teke*, (chairman), RM Buttle (chief executive officer), AP Broodryk (chief financial officer), SS Mafoyane*# (lead
independent director), MM Dyasi*#, DM Mncube*#, MG Mokoka*#, CS Seabrooke*, JR Winer*
* Non-executive # Independent
Company secretary
CorpStat Governance Services Proprietary Limited
Prepared by
RM Buttle and
AP Broodryk
Sponsors
Grindrod Bank Limited
Registered auditors
KPMG Inc.
www.rolfesza.com
Date: 17/09/2018 03:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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