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CAFCA LIMITED - Audited Abridged Financial Results for the year ended 30 September 2018

Release Date: 16/11/2018 08:30
Code(s): CAC     PDF:  
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Audited Abridged Financial Results for the year ended 30 September 2018

Cafca Limited
Share Code: CAC
ISIN Code: ZW0009011942

Notice To Shareholders

Audited Abridged Financial Results for the year ended 30 September 2018

All figures are in United States Dollars


                                                      30 SEPT 2018        30SEPT 2017


STATEMENT OF COMPREHENSIVE INCOME
Revenue                                               30,382,348          19,310,457
Operating profit                                          5,232,656       1,223,077
Finance income                                               1,364            3,150
Profit before income tax                                  5,234,020       1,226,227

Income tax expense                                    (1,374,589)          (500,014)

Profit for the year                                   3,859,430             726,213
Other comprehensive income:                           -                       -

Total comprehensive income for the year               3,859,430              726,213




Issued Ordinary Shares (weighted) (number)                33,059,000      33,059,000
Basic Earnings per share (cents)                             11.67            2.21
Diluted Earnings per share(number)                        33,459,000      33,459,000
Diluted Earnings per share (cents)                           11.53             2.17
Headline earnings per share(number)                       33,059,000      33,059,000
Headline earnings per share(cents)                            11.67            2.18
STATEMENT OF FINANCIAL POSITION               AT 31 SEPT 2018   AT 31 SEPT 2017

ASSETS                                               $                $
Non-Current Assets
Property ,plant and equipment                    2,990,638          3,263,957


Current assets
Inventories                                      8,624,425          8,256,431
Current income tax receivables                       -                18,540
Trade and other trade receivables                2,035,613          2,389,492
Available for sale financial assets                  6,180            18,540
Cash and cash equivalents                        8,854,476          4,168,171
Total Assets                                    22,511,332         18,115,541


Equity attributable to owners of the parent
Share Capital                                            331              328
Share premium                                      254,701            177,948
Share option reserve                                193,600            20,056
Retained earnings                                15,648,704        15,260,469
Total Equity                                     16,097,336        15,458,801


LIABILITIES
Non-current liabilities

Deferred income tax liabilities                    656,692            788,880

Current liabilities
Trade and other payables                         1,740,628            1,496,132
Provisions                                         427,288              371,728
Currrent income tax liabilities                    118,193                 -
Dividend payable                                 3,471,195                 -

Total liabilities                               6,413,996            2,656,740

Total equity and liabilities                   22,511,332            18,115,541
STATEMENT OF CHANGES IN EQUITY
                                                            Share Capital   Share Premium       Share Option   Retained
                                                                                                reserve        earnings     Total
                                                            $               $                   $              $            $
Balance at 1 October 2016                                   328             169,281             5,300          14,534,256   14,709,165
Transfer of non-distributable reserve
Transaction with owners:
Issue of shares                                             -                 5,200             -                  -             5,200
Share options                                               -                 3,467             14,756                          18,223
Total comprehensive income for the year                     -               -                   -                726,213       726,213
Net profit for the year                                     -               -                   -                726,213       726,213
Other comprehensive income for the year                     -               -                   -                  -              -
Balance at 30 September 2017                                328             177,948             20,056         15,260,469   15,458,801



Balance at 1 October 2017                                   328             177,948             20,056         15,260,469   14,458,801
Transaction with owners:
Issue of shares                                              -              40,400              -                   -          40,400
Share options                                                3              36,353              173,544             -         209,900
Dividend declared                                            -              -                   -              (3,471,195) (3,471,195)
Total comprehensive income for the year                      -              -                   -               3,859,430   3,859,430
Profit for the period                                        -              -                   -               3,859,430   3,859,430
Other comprehensive income for the year                      -              -                   -                   -           -
Balance at 30 September 2018                                331             254,701             193,600        15,648,704 16,097,336



STATEMENT OF CASH FLOWS

                                                     30 September 2018      30 September 2017
Profit before income tax                                    5,234,020              1,226,227
Depreciation                                                  361,528                358,763
Non-cash employee share based payment charge                  209,900                 18,223
Profit on sale of property plant,
and equipment                                                  (3,770)                (14,723)
Finance income                                                  1,364                   3,150
Provision for slow moving obsolete inventories                  1,628                 (69,137)
(Decrease)/increase in allowance for impairment of
trade receivables                                             (24,446)                  8,809
Working capital changes:
(Increase)/decrease in inventories                           (369,623)              120,118
Decrease in trade and other receivables                       378,326               928,033
Increase in trade and other payables                          244,496               760,478
Increase in provision for other liabilities and charges        55,560                42,724
Net cash generated from operations                          6,101,342             3,382,665

Tax paid                                                  (1,369,633)                 (328,410)
Finance income                                                (1,364)                   (3,150)
Net generated from operating activities                   4,730,345                   3,051,105
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property ,plant and equipment               (88,209)                    (376,455)
Proceeds from sale of property,plant and equipment           3,770                       14,723
Net cash utilised in investing activities                  (84,439)                    (361,732)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital                         40,400                       5,200


Increase in cash and cash equivalents                    4,686,305                     2,694,573
Cash and cash equivalents at the beginning of the year   4,168,171                     1,473,598
Cash and cash equivalents at the end of year             8,854,476                     4,168,171




NOTES THE FINANCIAL STATEMENTS
For the year ended 30 September 2018

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

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

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

The key audit matters
-Impact of trading conditions on the entity’s operations
-Impairment assessment of plant and equipment
The auditor’s report on the financial results is available for inspection at the Company’s registered office.


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

5.Related party transactions
Reunert Electrical Engineering (Proprietary)Limited owns 70% of the company and the remaining 30% are widely held.
The following transactions were carried out with related parties:


                                                                       30 September    30 September
                                                                            2018        2017
 (i) Sale of goods
 Metal Fabricators of Zambia Plc( Zamefa)                                        18,345          411,365




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

  CBI-Electric African Cables-A Division of ATC( Pty) Limited                2,602,046              729,207
  CBI-Electric Telecoms Cable(Pty) Limited                                      23,627               17,336
  Metal Fabricators of Zambia Plc(Zamefa)                                       56,983            1,393,489


(iii)Year end balances arising from purchase of goods/services:
 a.Amounts due to related parties:
 CBI-Electric African Cables-A Division of ATC (Pty) Limited                     7,950                 33,826
 CBI-Electric Telecoms (Pty) Limited                                                -                  17,336

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

(iv)Key management remuneration:
 Key management includes directors(executive and non-executive)
 and members of the executive committee
Salaries and short term benefits                                                 655,336               582,170
Share options charge                                                             209,336                18,223
Director’ emoluments
-Fees                                                                             65,058               80,016

 Total                                                                            930,294              680,409

6.Segmentation information

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

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

Revenue analysis

                                                                 30 September 2018   30 September 2017

                   Revenue for customers domiciled in Zimbabwe      30,382,345            18,256,550

                   Revenue from external customers                   1,054,457             1,053,907

                                                                    30,382,348            19,310,457
Revenue from transactions with single and local customers that amount to 10% of more each of the Group’s revenues , equal approximately
US$6,583,033(2017 $6,879,764).These revenues are attributable to customers domiciled in Zimbabwe. The breakdown of the major component of the
total revenue from three major customers of least 10% is as follows:

                                                             30 September 2018    30 September 2017

                                      Energy Transmission       6,583,033             5,879,764



The total of non-current assets located in Zimbabwe is $2,990,638 (2017:$3,263,957) and there are no non-current assets located in other
countries.

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

                                                             30 September 2018    30 September 2017

Revenue from customers                                           30,382,345          19,310,457

Profit before interest and taxation                               5,234,020           1,226,227

Net finance income                                                    1,364               3,150

Finance cost                                                      1,374,589             500,013

Total assets                                                     22,511,332           18,115,541

Liabilities                                                       6,413,996            2,656,740



                                                              30 September 2018    30 September 2017

8.Property plant and equipment

 Capital expenditure                                                   88,209               173,684

 Depreciation                                                         361,528               358,763


COMMENTARY AND OVERVIEW OF RESULTS



Revenue & Volumes
An increase in volume together with a change in sales mix from aluminium to copper resulted in turnover increasing 57% year on year. Most of the
growth was in the local market resulting mainly from protection by Government of local manufacturers.

Profitability
Operating profit improved four fold from the previous year of $1,2 million to $5,2 million in the current year.

As mentioned in our trading statement:

“Profitability has been improved by strong local demand and a change in sales mix from aluminium to copper products. The high level of finished
goods brought forward from the previous year has also contributed and allowed us to hold prices throughout the year.”
“The prior year was adversely affected by a volume decrease that resulted in breakeven months until the cost base was significantly reduced –
this cost base has since been maintained.”

Statement of Financial Position and Cashflow
Cash balances as at the yearend were $8,9 million of which $3,5 million was set aside for the dividend and $4,0 million retained for capital
expenditure.

There were no foreign liabilities and no significant trade and other payables.

Stocks at the beginning of the year were $8,2 million and closed at $8,6 million as a hedge against hyperinflation and short term availability of
foreign exchange.

Outlook
The economy since the year end has taken a significant down turn as a result of the acute foreign exchange shortage and the market has discounted
the (Real Time Gross Transfer Settlement) RTGS bank balances vis-à-vis the value of US dollars.


Until such time as the authorities can put in place a more equitable and stable system of foreign currency allocation it will be difficult to
predict the fortunes of either the economy or the company.

Dividend
The Directors approved on the 6th September 2018 a dividend of 10.5 cents per share to shareholders which was paid on the 5th October 2018.

By order of Board




C Kangara
Company Secretary
16 November 2018

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

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