Wrap Text
Abridged unaudited condensed consolidated interim financial results for the six months ended 31 August 2018
BRIKOR LIMITED
(“Brikor”) or (“the company”) or ("the group")
(Incorporated in the Republic of South Africa)
Registration number: 1998/013247/06
JSE code: BIK
ISIN: ZAE000101945
ABRIDGED UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE SIX-
MONTH PERIOD ENDED 31 AUGUST 2018
Prepared by:
The abridged unaudited condensed consolidated interim financial results ("interim financial results" or " results") for
the six-month period ended 31 August 2018 were prepared by João Manuel Gonçalves CA (SA), group financial
manager and reviewed by Laura Craig CA (SA), group financial director.
FINANCIAL INDICATORS – continuing operations
- REVENUE increased by 0,6 % to R153,6 million
- EBITDA decreased by 48,2 % to R16,2 million
- NET ASSET VALUE increased by 1,9 % to 10,5 cents per share
- NET TANGIBLE ASSET VALUE increased by 34,1 % to 5,9 cents per share
- CASH AND CASH EQUIVALENTS decreased by 20,5 % to R12,8 million
- EARNINGS PER SHARE from continuing operations decreased by 85,7 % to 0,3 cents per share
- HEADLINE EARNINGS PER SHARE from continuing operations decreased by 85,0 % to 0,3 cents
per share
OVERVIEW
Brikor is a diverse manufacturer and supplier of building and construction materials across a broad spectrum of the
market from low-cost housing, residential to commercial, industrial and infrastructure projects. The group operates
through two segments, namely bricks and coal (the latter being through its subsidiary, Ilangabi Investments 12 (Pty)
Ltd).
The directors of Brikor are pleased to present the condensed consolidated interim financial results for the period
ended 31 August 2018, which reflect the Brikor group’s commitment to its core focus of risk management and
sustainability in a distressed economic trading environment.
The group’s overall financial indicators mirror the constraints experienced in the current economic climate.
DIRECTOR RESPONSIBILITY
The directors take full responsibility for the preparation of the abridged report and that the financial information has
been correctly extracted from the underlying financial statements.
FINANCIAL RESULTS – continuing operations
Revenue increased to R153,6 million (August 2017: R152,8 million) with the gross profit percentage decreasing to
21,1% (August 2017: 27,6%).
The competitive South African economic environment continues to put strain on selling prices in the brick segment.
The brick segment is also experiencing a change in demand of product range mixes with lower gross profit yielding
products prevailing. As a direct result the revenue in the brick segment has reduced by 3,9% to R88,9 million (August
2017: R92,5 million) with the gross profit reducing by 32,9% to R15,3 million (August 2017: R22,8 million).
The increased supply of coal segment product range, which yields higher prices resulted in an increase of 16,6% to
R79,4 million (August 2017: R68,1 million) which therefore resulted in an overall increase in the revenue for the
group.
Gross profit for the coal segment, however, reduced by 11,4% to R17.1 million (August 2017: R19,3 million), this
was a result of a new sizing plant which was commissioned for the group and took several weeks of installation
resulting in increased cost of production per ton due to the lack of volumes in March and April 2018 with fixed costs
remaining unchanged.
Other income reduced by 24,4% to R3,1 million (August 2017: R4,1 million) due to the expiry of certain rental
agreements as well as profit on sale of equipment in August 2017 which was a once of occurrence.
Administration, distribution and other expenses increased to R27,1 million (August 2017: R21,9 million), mainly due
to the cost incurred with the earlier release of the integrated annual report to the extent of R1,9 million and R1,9
million increased spend on Broad Based Black Economic Empowerment targets set by the group. The balance is a
result of annual inflationary increases.
Finance costs during the period reduced to R3,9 million (2017: R5,8 million) due to the settlement of the royalty tax
liabilities capital portion of R16,4 million, provisional tax liabilities of R3,3 million and the repayment of the estate
late GvN Parkin interest bearing loans to the extent of R20,0 million. This has positively influenced the current assets
versus current liabilities ratio which is now 1,4 times previously 1,1 times in August 2017. The debt to equity ratio
has greatly reduced from 3,0 times to 2,3 times, reducing overall credit risk for the group.
The group ended the financial period with an attributable profit from continuing operations of R2,1 million (August
2017: R13,2 million), resulting in basic earnings per share of 0,3 cents (August 2017: 2,1 cents) and basic headline
earnings per share of 0,3 cents (August 2017: 2,0 cents).
Property, plant and equipment decreased to R68,1 million from the February 2018 year-end amount of R73,6
million due to the following:
- the additions to buildings of R0,4 million;
- the additions of plant and equipment of R1,9 million;
- the additions to motor vehicles of R0,8 million;
- the disposal of plant and equipment of R0,8 million;
- the disposal of motor vehicles of R0,3 million; and
- depreciation of R7,5 million.
CHANGES TO THE BOARD OF DIRECTORS
Ms Laura Craig CA (SA), the interim financial director, has formally been appointed as the financial director
with effect from 14 September 2018. The board would like to welcome her in her new role in the company.
CORPORATE GOVERNANCE
The directors endorse and accept full responsibility for the application of the principles necessary to ensure that
effective corporate governance is practiced consistently throughout the group. Brikor is committed to the principles
of openness, integrity and accountability to all stakeholders and the board of directors accepts its duty to ensure that
the principles as set out in the King Report of Corporate Governance for South Africa – 2016 (King lV) are
implemented on an apply or explain basis.
With the board changes indicated above, the Brikor board now comprises seven directors of whom two are
executive, one is a non-executive and four are independent non-executives.
PROSPECTS
As the group continuously and consistently reduces its debts with the South African Revenue Services and related
parties in order to cement the statement of financial position into a secure solvent and liquid position, the Brikor
board is looking for future investment opportunities to grow the group's foothold in the relevant markets it trades in.
DIVIDEND
No dividend has been declared for the six months ended 31 August 2018.
Abridged unaudited condensed consolidated interim statement of financial position
as at 31 August 2018
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 August 31 August 28 February
2018 2017 2018
Notes R’000 R’000 R’000
ASSETS
Non-current assets 118 608 112 405 128 610
Property, plant and equipment 68 062 62 525 73 591
Intangible assets 4 480 5 546 4 784
Other financial assets 21 390 18 304 20 316
Deferred tax asset 24 676 26 030 29 919
Current assets 93 372 91 957 77 732
Inventories 46 207 34 754 36 607
Trade and other receivables 34 329 41 063 29 877
Cash and cash equivalents 12 836 16 140 11 248
Assets held-for-sale 2 4 108 51 515 44 711
Total assets 216 088 255 877 251 053
EQUITY AND LIABILITIES
Equity attributable to equity holders
of the company 66 230 64 650 58 659
Stated capital 228 242 228 242 228 242
Accumulated loss (162 012) (163 592) (169 583)
Total Liabilities 149 858 191 227 192 394
Non-current liabilities 82 870 100 831 100 796
Borrowings - 2 624 -
Shareholders’ loans 24 062 43 583 43 544
Provisions 55 560 54 084 52 262
Deferred tax liability 3 248 540 4 990
Current liabilities 64 533 82 754 83 181
Borrowings 2 419 6 946 6 565
Trade and other payables 58 558 67 747 70 561
Taxation 3 556 8 061 6 055
Liabilities held-for-sale 2 2 455 7 642 8 417
Total equity and liabilities 216 088 255 877 251 053
Abridged unaudited condensed consolidated interim statement of profit or loss and other comprehensive
income
for the six months ended 31 August 2018
Restated*
Unaudited unaudited
6 months 6 months Audited
ended ended year ended
31 August 31 August 28 February
Notes 2018 2017 2018
R’000 R’000 R’000
Revenue 153 641 152 786 273 128
Cost of sales (121 204) (110 681) (198 846)
Gross profit 32 437 42 105 74 282
Other income 3 100 4 101 7 805
Administrative expenses (20 074) (18 417) (39 524)
Distribution expenses (3 906) (2 988) (6 197)
Other expenses (3 078) (511) (2 878)
Operating profit before interest and
8 479 24 290 33 488
taxation
Finance income 338 383 901
Finance costs (3 859) (5 793) (12 133)
Profit before taxation 4 958 18 880 22 256
Taxation (2 861) (5 707) (7 724)
Profit after taxation 2 097 13 173 14 532
Profit/(loss) from discontinued operations 2 369 404 (6 946)
Profit from disposal of discontinued
2 5 105 - -
operations
Total comprehensive income for
the period attributable to owners of the
7 571 13 577 7 586
company
CENTS CENTS CENTS
Earnings per share 3
Basic and diluted
Continuing operations 0,3 2,1 2,3
Discontinued operations 0,9 0,1 (1,1)
Basic 1,2 2,2 1,2
Headline and diluted headline earnings per
share
Continuing operations 0,3 2,0 2,4
Discontinued operations 0,1 (0,1) (1,2)
Diluted 0,4 1,9 1,2
* Refer to Note 11 for the restatement of the financial results
Abridged unaudited condensed consolidated interim statement of changes in equity
for the six months ended 31 August 2018
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 August 31 August 28 February
2018 2017 2018
R’000 R’000 R’000
Stated capital 244 142 244 142 244 142
Treasury shares (15 900) (15 900) (15 900)
Accumulated loss at the beginning of the period (169 583) (177 169) (177 169)
Profit for the period 7 571 13 577 7 586
Total 66 230 64 650 58 659
Abridged unaudited condensed consolidated interim statement of cash flows
for the six months ended 31 August 2018
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 August 31 August 28 February
2018 2017 2018
R’000 R’000 R’000
Cash flows from operating activities (14 454) 16 033 22 960
Cash generated from operations (8 345) 19 092 30 170
Finance income 891 381 867
Finance costs (288) (3) (4 239)
Tax paid (6 712) (3 437) (3 838)
Cash flows to investing activities 41 212 (9 898) (16 916)
Additions to property, plant and equipment (3 087) (10 392) (15 940)
Proceeds on disposal of property, plant and
1 041 1 950 1 966
equipment
Proceeds on disposal of business 44 770 - -
Increase in other financial assets (1 512) (1 456) (2 942)
Cash flows (to)/from financing activities (25 170) (4 220) (9 021)
Borrowings raised - 3 893 33
Borrowings repaid (25 170) (8 113) (9 054)
Net increase/(decrease) in cash and cash
1 588 1 915 (2 977)
equivalents
Cash and equivalents at beginning of period 11 248 14 225 14 225
Cash and cash equivalents at end of period 12 836 16 140 11 248
SEGMENTAL REVENUE AND RESULTS
The following is an analysis of the group’s revenue and results from operations by reportable segments.
Segmental profit reconciliation
Six months ended 31 August 2018 –
Bricks Coal Other* Total
Unaudited
R’000 R’000 R’000 R’000
Total revenue 88 942 79 418 - 168 360
Intersegmental revenue - (14 719) - (14 719)
Reportable segment revenue 88 942 64 699 - 153 641
Gross profit 15 294 17 143 - 32 437
Other income 654 2 446 - 3 100
Operating profit before interest and taxation 1 327 7 152 - 8 479
Segment assets and liabilities
Segment assets 90 907 82 254 42 927 216 088
Segment liabilities (49 558) (66 455) (33 845) (149 858)
Other segment information
Depreciation and amortisation included in cost of
(2 680) (5 076) - (7 756)
sales and operating expenditure
Additions to non-current assets 2 360 727 - 3 087
Six months ended 31 August 2017 – Other*
Bricks Coal Total
Unaudited
R’000 R’000 R’000 R’000
Total revenue 92 477 68 114 - 160 591
Intersegmental revenue - (7 805) - (7 805)
Reportable segment revenue 92 477 60 309 - 152 786
Gross profit 22 782 19 323 - 42 105
Other income 936 3 165 - 4 101
Operating profit before interest and taxation 11 679 12 611 - 24 290
Segment assets and liabilities
Segment assets 78 798 75 426 101 653 255 877
Segment liabilities (51 588) (77 316) (62 323) (191 227)
Other segment information
Depreciation and amortisation included in cost of
(2 553) (4 526) (1 076) (8 155)
sales and operating expenditure
Additions to non-current assets 4 579 5 764 49 10 392
Year ended 28 February 2018 – Audited Bricks Coal Other* Total
R’000 R’000 R’000 R’000
Total revenue -1111
178 685 111 971 - 290 656
Intersegmental revenue - (17 528) - (17 528)
Reportable segment revenue 178 685 94 443 - 273 128
Gross profit 38 680 35 602 - 74 282
Other income 1 913 5 892 - 7 805
Impairments 810 - - 810
Operating profit before interest and taxation 11 556 21 932 - 33 488
Segment assets and liabilities
Segment assets 77 561 81 862 91 630 251 053
Segment liabilities (50 795) (74 451) (67 148) (192 394)
Other segment information
Depreciation and amortisation included in cost of
(4 784) (9 165) (1 076) (15 025)
sales and operating expenditure
Additions to non-current assets 4 647 14 968 185 19 800
*Other segment relates to non-segment-specific cash and liabilities as detailed below.
Factors used to identify segments are based on geographical location and divisional structuring; this is also how the
group reports financial results to the chief operating decision-maker on a monthly basis.
The accounting policies of the reportable segments are the same as the group’s accounting policies described in note
1. Segment profit represents the profit earned by each segment without allocation of finance costs and income tax
expense. This is the measure reported to the chief operating decision-maker for the purposes of assessment of
segment performance.
Reportable segment revenue relates to external customers only. Revenue is derived solely from South African
customers.
Other assets and liabilities
For the purposes of monitoring segment performance and allocating resources between segments:
• all assets are allocated to reportable segments other than assets held-for-sale, tax assets, deferred tax assets
and cash and cash equivalents.
• all liabilities are allocated to reportable segments other than general borrowings, shareholders’ loans,
deferred taxation, taxation, bank overdraft and liabilities held-for-sale.
NOTES TO THE ABRIDGED UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS FOR THE SIX MONTHS ENDED 31 AUGUST 2018
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The abridged unaudited condensed consolidated interim financial statements are prepared in accordance with the
requirements of the JSE Limited Listings Requirements for interim reports and the requirements of the Companies
Act of South Africa. The Listings Requirements require interim reports to be prepared in accordance with the
framework concepts and the measurement and recognition requirements of International Financial Reporting
Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and
Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum,
contain the information required by IAS 34 Financial Reporting.
The accounting policies applied in the preparation of the abridged unaudited condensed consolidated interim
financial statements are in terms of IFRS and are consistent with those applied for the previous consolidated annual
financial statements.
The results are presented in Rand rounded to the nearest thousand (R'000), unless otherwise indicated.
2. ASSETS AND LIABILITIES CLASSIFIED AS HELD-FOR-SALE AND DISCONTINUED OPERATION
Assets and liabilities classified as held-for-sale:
On 20 September 2016 and 17 November 2016 respectively, Brikor committed to sell two of its properties, namely
the Rayton property situated at Portion 31 of Witfontein NO.510 - JR District Bronkhorstspruit "Rayton" and the Nigel
Schist property situated at Portion 58 of the Farm Vrisgewaag 510IR "Schist".
Rayton property:
The impairment reversal has been applied to increase the carrying value of the property. The offer received for
Rayton amounting to R2,2 million, which is inclusive of the transfer of the Mining Right No GP30/5/1/2/2(237)MRC
and the related environmental restoration obligation, has been accepted and signed by the company’s directors on
17 April 2017.
Conditions precedent to the sale:
- The sale is subject to written consent in terms of section (11)1 of the Mineral and Petroleum Resources
Development Act No. 28 of 2002 (“the act”) is granted by the minister in respect of the proposed cession and
transfer of the mining right to the purchaser.
- The purchaser shall be responsible for making the application as required in terms of Section 11 of the Act with
the assistance of the company in terms of documentation required and general co-operation.
- Should the Section 11 transfer not be granted within 18 (eighteen) months from date of signature (11 April
2017) either party may be entitled, in writing, to cancel the agreement, unless the application is imminent, in
which case extension may be applied for by either party for a period of up to 60 (sixty) days or longer as agreed
upon.
- Costs incurred in terms of this agreement shall be borne by the purchaser.
Schist property:
The company has received several offers in terms of the Schist property of which the latest offer of R0,1 million is
inclusive of the transfer of the environmental obligation of R0,7 million and removal of alien vegetation estimated at
R0,2 million. The Board of directors has signed a resolution dated 28 September 2018 to dispose of this property
and the company is in the process of finalising the terms of agreement with the potential buyer.
Impairment reversal relating to the assets held-for-sale:
The impairment reversal was recognised in order to adjust the carrying value of the Rayton Property at the relevant
reporting dates to its fair value less cost to sell (August 2018: R0,08 million impairment reversal, August 2017: R0,06
million impairment reversal).
Measurement of fair values:
The fair value of the non-current assets held-for-sale was obtained with reference to purchase offers received from
third parties for the respective properties.
Fair value hierarchy:
The non-recurring fair value of the assets and liabilities held-for-sale of R2,2 million and R0,1 million respectively,
have been classified as a level 2 fair value (refer to note 10).
Cumulative income or (expenses) included in profit/(loss) and other comprehensive income:
Six months ended 31 August 2018 –
Unaudited Rayton Schist
property property Total
R’000 R’000 R’000
Impairment reversal 74 - 74
Net finance costs (74) - (74)
Profit/(loss) from non-current assets and
- - -
liabilities held-for-sale
Six months ended 31 August 2017 –
Unaudited Rayton Schist
property property Total
R’000 R’000 R’000
Change in estimate for environmental
(30) (13) (43)
rehabilitation provision
Impairment reversal 59 - 59
Net finance costs (29) - (29)
Loss from non-current assets and liabilities
- (13) (13)
held-for-sale
Year ended 28 February 2018 - Audited Rayton Schist
property property Total
R’000 R’000 R’000
Change in estimate for environmental
(328) (12) (340)
rehabilitation provision
Impairment reversal 452 - 452
Net finance costs (125) - (125)
Loss from non-current assets and liabilities
(1) (12) (13)
held-for-sale
Discontinued operation classified as held-for-sale:
Donkerhoek Quarries:
During the 2018 financial reporting period, the board was approached with the possibility that a potential buyer may
exist for the Donkerhoek business. During July 2017, the board mandated Exchange Sponsors, the current
designated advisors of Brikor, to broker the transaction, thereby initiating an active programme to find a potential
buyer and demonstrating management's commitment to sell the Donkerhoek business.
Subsequently, potential buyers were requested to present their offers and on 15 August 2017 the most favourable
offer in terms of quantitative and qualitative considerations, amounting to R50,2 million, was accepted.
The final agreement for the sale of the Donkerhoek business was signed on 27 October 2017 with conditions
precedent, including shareholder approval, subsequent to the release of the required category 1 circular. The
category 1 circular was posted and notice of the general meeting was issued on SENS on 14 March 2018. The
general meeting in terms of the disposal was held on 17 April 2018, during which the disposal of the division was
approved by a quorum of shareholders present.
The Donkerhoek business was finally sold for proceeds amounting to R44,8 million with liabilities amounting to R6,0
million being taken over by the buyer.
The fair value of the Donkerhoek division has been classified as a level 2 fair value. The market comparison
technique was used for the fair value of the Donkerhoek business.
The following table summarises the assets and liabilities of the Donkerhoek business that were sold during
the 6 months period ended 31 August 2018:
Donkerhoek Quarries Unaudited
6 months
ended
31 August
2018
R’000
Proceeds on disposal of discontinued operations 44 770
Net asset value 34 641
Property, plant and equipment 28 370
Intangible assets 5 074
Inventory 7 233
Environmental rehabilitation provision (5 662)
Payroll accruals (374)
Profit on disposal pre-taxation 10 129
Profit on disposal net of taxation 5 105
Add back taxation on disposal 5 024
The tables below analyses the results relating to the discontinued operations:
Donkerhoek Quarries Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 August 31 August 28 February
2018 2017 2018
R’000 R’000 R’000
Revenue - 20 653 37 828
Expenses (515) (21 111) (48 637)
Net finance income/ (cost) 578 (195) (393)
Impairment reversal - 905 906
Profit/(loss) before taxation 63 252 (10 296)
Taxation 306 152 3 350
Profit/(loss) from discontinued operations 369 404 (6 946)
Assets and liabilities held-for-sale
At 31 August 2018, the assets held-for-sale was stated at fair value less cost to sell and comprised the
following:
Six months ended 31 August 2018 – Unaudited Rayton Schist Donkerhoek
property property quarries Total
R’000 R’000 R’000 R’000
Assets held-for-sale
Property, plant and equipment 4 095 13 - 4 108
Non-current assets held-for-sale 4 095 13 - 4 108
Liabilities held-for-sale
Environmental rehabilitation provision 1 895 560 - 2 455
Non-current liabilities held-for-sale 1 895 560 - 2 455
At 31 August 2017, the assets held-for-sale was stated at fair value less cost to sell and comprised the
following:
Six months ended 31 August 2017 – Unaudited Rayton Schist Donkerhoek
property property quarries Total
R’000 R’000 R’000 R’000
Assets held-for-sale
Property, plant and equipment 3 618 13 28 115 31 746
Intangible assets - - 5 074 5 074
Inventory - - 14 695 14 695
Non-current assets held-for-sale 3 618 13 47 884 51 515
Liabilities held-for-sale
Environmental rehabilitation provision 1 418 560 4 837 6 815
Payroll accruals - - 827 827
Non-current liabilities held-for-sale 1 418 560 5 664 7 642
At 28 February 2018, the assets held-for-sale was stated at fair value less cost to sell and comprised the
following:
Year ended 28 February 2018 - Audited Rayton Schist Donkerhoek
property property quarries Total
R’000 R’000 R’000 R’000
Assets held-for-sale
Property, plant and equipment 4 021 13 28 370 32 404
Intangible assets - - 5 074 5 074
Inventory - - 7 233 7 233*
Non-current assets held-for-sale 4 021 13 40 677 44 711
Liabilities held-for-sale
Environmental rehabilitation provision 1 821 560 5 662 8 043
Payroll accruals - - 374 374
Non-current liabilities held-for-sale 1 821 560 6 036 8 417
*Inventory includes consumables to the value of R0,3 million, which were recovered through a normal trade basis.
The tables below summaries the cash flow effects relating to the discontinued operations:
Donkerhoek Quarries Unaudited Unaudited
6 months 6 months Audited
ended Ended year ended
31 August 31 August 28 February
2018 2017 2018
R’000 R’000 R’000
Cash flows from operating activities 63 (844) 158
Cash flows from investing activities 44 770 451 315
Cash flows from financing activities - - -
Net cash flows 44 833 (393) 473
3. EARNINGS PER SHARE
The calculations for earnings per share attributable to the ordinary equity holders are based on the following:
Reconciliation between basic earnings and headline earnings as well as diluted earnings:
Six months ended 31 August 2018 - Unaudited Continuing Discontinued
operations operations Total
R’000 R’000 R’000
Basic and diluted profit 2 097 5 474 7 571
Loss on disposal of property, plant and
123 - 123
equipment
Profit on disposal of discontinued operations - (5 105) (5 105)
Impairment reversal of assets (74) - (74)
Headline and diluted profit 2 146 369 2 515
Six months ended 31 August 2017 - Unaudited Continuing Discontinued
operations operations Total
R’000 R’000 R’000
Basic and diluted profit 13 173 404 13 577
(Profit)/loss on disposal of property, plant and
(271) 153 (118)
equipment
Impairment reversal of assets (59) (905) (964)
Loss on scrapping of property, plant and
5 - 5
equipment
Headline and diluted profit/(loss) 12 848 (348) 12 500
Year ended 28 February 2018 - Audited Continuing Discontinued
operations operations Total
R’000 R’000 R’000
Basic and diluted profit 14 532 (6 946) 7 586
Profit on disposal of property, plant and
(290) - (290)
equipment
Loss on disposal of property, plant and
2 153 155
equipment
Loss on scrapping of property, plant and
5 - 5
equipment
Impairment/(reversal) of assets 810 (906) (96)
Headline and diluted profit/(loss) 15 059 (7 699) 7 360
Number of shares
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 August 31 August 28 February
2017 2016 2017
’000 ’000 ’000
Weighted average number of shares 629 342 629 342 629 342
Diluted weighted average number of shares 629 342 629 342 629 342
4. RELATED PARTIES
Relationships Related Director
Entities controlled / significantly influenced by director
• Cyndara 113 (Pty) Ltd G Parkin
• Scarlett Sun 33 (Pty) Ltd G Parkin
• Galiya (Pty) Ltd G Parkin
• Nigel Brick and Clay (Pty) Ltd G Parkin
• Elgar Share Trust G Parkin
Unaudited Unaudited
Nature 6 months 6 months Audited
of goods ended ended year ended
and services 31 August 31 August 28 February
purchased or 2018 2017 2018
sold R’000 R’000 R’000
Related party balances
Loan accounts - owing (to)/by related parties
Estate late: GvN Parkin
Shareholder loan – loan 1 Unsecured,
interest 7,59%
p.a, no fixed
repayment
terms (20 237) (31 158) (30 618)
Shareholder loan – loan 2 Unsecured,
interest 12%
p.a, no fixed
repayment
terms - (8 578) (9 101)
Unaudited Unaudited
Nature 6 months 6 months Audited
of goods ended ended year ended
and services 31 August 31 August 28 February
purchased or 2018 2017 2018
sold R’000 R’000 R’000
Shareholder loan – loan 3 Unsecured,
interest free, no
fixed
repayment
terms (2 234) (2 256) (2 234)
G Parkin
Shareholder loan Unsecured,
interest free (1 591) (1 591) (1 591)
Amounts included in trade receivables and
(trade payables)
Scarlett Sun 33 (Pty) Ltd Machinery
parts and
consumables 34 47 34
Scarlett Sun 33 (Pty) Ltd Surface rights (7 107) (5 219) (4 720)
Nigel Brick and Clay (Pty) Ltd Bricks 2 226 1 732 1 171
Nigel Brick and Clay (Pty) Ltd Bricks (5 814) (5 368) (3 295)
Galiya (Pty) Ltd Transport 48 39 -
Galiya (Pty) Ltd Transport (81) (118) (68)
AP van der Merwe Consultancy
fees (48) (44) (59)
Cyndara Engineering (97) (97) (97)
Kaslam Magazine Advertising (5) - -
Amounts included in borrowings regarding
related parties
Scarlett Sun 33 (Pty) Ltd Interest at
prime plus 1% (1 351) (3 210) (3 050)
Related party transactions
Interest paid
G v N Parkin (loan 1) (1 169) (1 191) (2 351)
G v N Parkin (loan 2) (183) (510) (1 033)
Consultancy fees
AP van der Merwe (262) (265) (507)
Purchases from related parties
Scarlett Sun 33 (Pty) Ltd Surface rights (2 594) (2 223) (3 313)
Scarlett Sun 33 (Pty) Ltd Machinery (234) (129) (1 922)
Parts
Galiya (Pty) Ltd Transport (430) (567) (1 053)
Nigel Brick and Clay (Pty) Ltd Bricks (15 325) (9 738) (21 065)
Kaslam Magazine Advertising (35) - (45)
Sales to related parties
Nigel Brick and Clay (Pty) Ltd Bricks and 4 896 5 193 8 129
clay
Nigel Brick and Clay (Pty) Ltd Diesel and 613 - 1 020
Maintenance
Scarlett Sun 33 (Pty) Ltd Diesel and 737 - 2 188
maintenance
Galiya (Pty) Ltd Transport 262 255 497
5. SUBSEQUENT EVENTS
Management is not aware of any material events, other than as outlined below, which occurred subsequent to 31
August 2018 which need adjustment or disclosure.
Shareholders are referred to the cautionary announcement dated 8 August 2018 and the various subsequent
renewal of cautionary announcements, where they were advised that Brikor has entered into negotiations which
if successfully concluded may effect on the price of the securities.
6. GOING CONCERN
The directors have prepared their budgets and cash flow forecasts for the year ahead based on reasonable and
supportable assumptions.
The cash flow forecasts and current management results indicate that the company and its subsidiaries will operate
as going concerns for the foreseeable future.
7. OTHER LEGAL AND REGULATORY REQUIREMENTS
On 16 May 2018 the auditors reported reportable irregularities to the Independent Regulatory Board of Auditors in
respect on non-compliance with the Income Tax Act, No 58 of 1962 and the Companies Act, No 71 of 2008 of
South Africa. The particulars of the reportable irregularities relate to the following instances, which resulted in
penalties and interest being charged to the group:
• Non-submission of annual tax returns, as required by the Income Tax Act, No 58 of 1962; and
• Non-compliance with Section 30 of the Companies Act of South Africa in terms of preparing and approving
of annual financial statements within six months after the end of its financial year.
The directors are aware of the above and are in the process of taking corrective steps, particularly since the
provisional liquidation of Brikor has been lifted to ensure that the relevant non-compliances are adequately
addressed. Full provision has been made in the unaudited condensed consolidated interim financial statements
for any related amounts due. All provisional income tax returns have been submitted and paid as at the date of
signature of the report.
The 28 February 2013 to 28 February 2017 individual statutory financial statements for Ilangabi Investments 12
(Proprietary) Limited have been completed.
8. SALIENT FEATURES
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 August 31 August 28 February
2018 2017 2018
Number of shares in issue (excluding treasury
shares) ('000) 629 342 629 342 629 342
Net asset value per share (cents) 10,5 10,3 9,4
Net tangible asset value per share (cents) 5,9 4,4 3,0
Impairment reversals/(impairments) continuing
operations (R’000) 74 59 (810)
Impairment reversals/ discontinued
operations (R’000) - 905 906
Employee cost (R'000) (52 074) (51 559) (102 422)
Net asset value per share is determined by dividing the total equity by the actual number of shares in issue at
reporting date.
Net tangible asset value per share is determined by dividing the total equity less intangible assets by the actual
number of shares in issue at reporting date.
Reconciliation of EBITDA - continuing operations
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 August 31 August 28 February
2018 2017 2018
R’000 R’000 R’000
Operating profit before interest and taxation 8 478 24 290 33 488
Depreciation - cost of sales 7 048 6 378 12 465
Depreciation - other expenses 404 330 751
Amortisation - cost of sales 304 372 732
Impairments (74) (59) 810
16 160 31 311 48 246
9. DIRECTORS’ EMOLUMENTS
Unaudited Unaudited
6 months 6 months Audited
ended ended year ended
31 August 31 August 28 February
2018 2017 2018
R’000 R’000 R’000
Executive
Short-term benefits 2 563 2 465 4 292
Post-employment benefits 110 95 194
2 673 2 560 4 486
Non-executive
Short-term benefits 860 849 2 499
10. FAIR VALUE
When measuring the fair value of an asset or a liability, the group uses observable market data as far as possible. Fair
values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques
as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Measurement of fair values
Assets-held-for sale (Level 2):
The market comparison technique was used for determining the fair value of the assets held-for-sale. The fair value
is determined based on the estimated selling price in the ordinary course of business less the estimated cost to sell
(refer note 2 for detail).
11. Restatement of Financial Results
The financial results for the period ended 31 August 2017 have been restated due to reclassification of cost
recoveries to cost of sales. This restatement was also disclosed in the Brikor Limited integrated annual report for
the period ended 28 February 2018, shareholders are requested to refer to note 32 of the integrated annual report.
During 2017, Brikor incorrectly included cost recoveries as part of revenue. These recoveries have been re-allocated
to be included as part of the cost of sales line item of the statement of profit and loss and other comprehensive
income.
The effect of the restatement when applied consistently in the period ended 31 August 2017 had the following impact
on the statement of profit and loss and other comprehensive income:
Previously
Reported Adjustment Restated
R’000 R’000 R’000
Reclassification of cost recoveries
Revenue 155 655 (2 869) 152 786
Cost of sales (113 550) 2 869 110 681
By order of the board
Garnett Parkin Laura Craig
Chief Executive Officer Financial Director
01 November 2018
CORPORATE INFORMATION
Directors: A Pellow (Chairman)^; PS Moyanga^; G Parkin (CEO); LA Craig (FD); CB Madolo^; AP van der Merwe*;
M Mokate^
* Non-executive ^ Independent non-executive
Registered address: 1 Marievale Road, Vorsterskroon, Nigel 1490
Postal address: PO Box 884, Nigel 1490
Telephone: (011) 739 9000
Facsimile: (011) 739 9021
Company secretary: Fusion Corporate Secretarial Services (Pty) Ltd
Transfer secretaries: Computershare Investor Services (Pty) Ltd
Auditors: KPMG Inc.
Designated Adviser: Exchange Sponsors (2008) (Pty) Ltd
These results and an overview of Brikor are available at www.brikor.co.za
Date: 01/11/2018 03:31:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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