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ESORFRANKI LIMITED - Reviewed condensed consolidated interim results for the six months ended 31 August 2013

Release Date: 28/11/2013 07:05:00      Code(s): ESR       PDF(s):  
Reviewed condensed consolidated interim results for the six months ended 31 August 2013

ESORFRANKI LIMITED
(Registration number: 1994/000732/06)
Incorporated in the Republic of South Africa
(JSE Code: ESR      ISIN: ZAE000133369)
("Esorfranki" or "the company" or "the group")

Reviewed Condensed consolidated interim results
for the year ended 30 September 2013


Highlights

REVENUE GROWTH IN PIPELINES DIVISION OF 117%

9,4% OPERATING MARGIN IN PIPELINES

POST PERIOD DISPOSAL OF GEOTECHNICAL OPERATIONS

EFFECTIVE REVIEW OF CONTRACTING PRACTICES

STABLE ORDER BOOK OF R2,2 BILLION

Commentary

Introduction

Esorfranki's reviewed condensed consolidated interim results for the six months ended 31 August 2013
("the period") reflect mixed performances from the group's operations in still tough trading conditions.
Overall the group maintained satisfactory levels of revenue and work-on-hand.

Profitability was impacted by three loss-making contracts in the Civils division, which will be completed
within this financial year. Anticipated losses have been fully provided for and contracting practices have
been revised going forward.

The order book at the end of the period totalled R2,2 billion on a like-for-like basis compared to R2,1 billion
for the continuing operations at the end of the prior period.

Effective 18 November 2013, post the end of the period, the group disposed of the Geotechnical division
(see 'Events after the reporting date' below) for a cash consideration of R500 million, which is subject to
adjustment in terms of a formula contained in the sale agreement but which in aggregate will not exceed
an additional payment of R150 million after the three-year period on which this contingent consideration
is based.

This transaction will relieve cash constraints and position the company for growth. Focus going forward
will be on consolidation and improved contracting practices for greater efficiency and profitability.

The significant growth of Esorfranki Pipelines over the past two years has generated a healthy,
quality order book and satisfying profitability. The division has also entrenched a forceful presence in
KwaZulu-Natal where significant opportunity exists.

Esorfranki Civils has been revitalised by completely new management in the past year, which has seen
a new employee culture and revised contracting practices to position the division to benefit from further
growth in the social housing market and anticipated Government growth initiatives.

Financial results

Revenue from continuing operations increased 38,5% to R1,014 billion from R732 million in the comparative
period. Earnings before interest, depreciation, impairments, amortisation and taxation ("EBITDA") totalled
R28,0 million compared to R80,4 million.

The group posted a small headline profit compared to R25,4 million in the comparative period, which
translated into headline earnings per share of 0,01 cents (2012: 7,8 cents). Net asset value per share
("NAV") was higher at 291,7 cents from 267,9 cents.

Events after the reporting date

As announced on 9 October 2013, Esorfranki disposed of Esorfranki Geotechnical to international
ground engineering specialist, Keller Group plc ("Keller"), for R500 million with the potential for an
additional R150 million earn-out over three years.

Neither the geotechnical market in South Africa nor Esorfranki's share of that market has shown
meaningful growth over the last number of years. In addition, group research indicated that Keller
was intent on an aggressive sub-Saharan expansion strategy which, given Keller's scale and scope
of operations, would have subsumed Esorfranki's geotechnical presence in this region. With this in mind,
the board considered it to be in the best interests of shareholders to sell the Geotechnical division with
a longer term view to ensuring the group's sustainability.

The purchase consideration will be applied to effectively settle the outstanding debt on the high yield
bond programme, as well as to distribute a special dividend for shareholders (see 'Dividend' below).
Further detail is included in the circular posted to shareholders on 21 October 2013.

The transaction became unconditional on 18 November 2013.

Review of continued operations

Revenue in Esorfranki Civils increased 14% to R681,9 million from R598 million in the comparative period.
Three loss-making contracts led to a loss before tax of R31,6 million (August 2012: profit before tax
R28,7 million), namely the Kriel main civils and highwall contract; a road contract for Roads Agency
Limpopo; and the Bakwena N4 toll road. These contracts will be concluded in the six months ahead.
Positively, progress was made on further settlement of claims in respect of the Kusile contract.

The new management has instituted a comprehensive review of the division's operations, resulting
in a number of overhaul initiatives: revising cost to completion forecasts; adopting additional
contingencies against exposure on certain contracts; an operational restructuring and right-sizing;
and the sale of redundant plant. Under the leadership of Mark Rippon, a Management Development
Programme has been introduced to ensure the "right person for the right job".

The group, and in particular the Civils division, experienced significant disruption due to labour
unrest both internally and strikes in adjacent areas that impacted on certain sites, including the
Bakwena N4 toll road and Kusile.

The fledgling Esorfranki Developments division, which focuses on developing land for social housing
projects, has progressed well with a five-year pipeline of over R4 billion secured. Development projects
include Orchards, a 1 373-unit entry level housing estate in Pretoria valued at R340 million; Diepsloot East,
a more than 8 500-unit mixed development encompassing infrastructure work, pedestrian bridges,
'breaking new ground' housing and institutional rental and bonded units valued in excess of R1,5 billion;
Uitvlugt, a 4 500-unit entry/middle income unit development in Vereeniging valued at R1,35 billion; a
R135 million 900-unit entry level unit development in Shoshanguwe; and two housing contracts in
Kokstad – The Muzumbe 500-unit development valued at R33 million and Thimude, a 1 000-unit project
valued at R65 million.

Esorfranki Pipelines proved that it has decisively overcome its recent setbacks with strong results reflecting
profitable contract execution. The division recorded triple-digit revenue growth of 117% to R324 million
(August 2012: R149 million). Profit before tax increased 198% to R31 million (August 2012: R10,4 million).
The division saw a number of positive new contract awards. The R40 million project in Swaziland – its first
outside of South Africa – is progressing well and is set for completion by December 2013. The Umlass Road
and Stanger projects, valued at R131 million and R185 million respectively, are also progressing well.

Post period-end the division was awarded the R156 million Northern Aqueduct project as well as a
sanitation contract for Ethekwini rural schools.

Esorfranki Pipelines has successfully widened its geographic reach and now has a presence in
KwaZulu-Natal, Eastern Cape, Gauteng, North West and Swaziland, and is also tendering in Zimbabwe.

Review of discontinued operations

Revenue in Esorfranki Geotechnical increased 13% to R464,2 million (August 2012: R410,3 million). Profit
before tax ("PBT") decreased 33,6% to R26,1 million (August 2012: R39,2 million). Profit margins for the
period were 5,6%, with foreign operations achieving a PBT margin of 17,6% and contributing the majority
of the division's gross profit. These operations are reflected as discontinued operations.

Safety

The group's Lost Time Injury Frequency Ratio ("LTIFR") of 0,74 at period-end is significantly better than the
industry norm of 1,33. Nonetheless, effort is being applied to return this to below the group's tolerance
level of 0,6.

Competition Commission update

Further to previous announcements and updates, Esorfranki has co-operated fully with the Competition
Commission in its fast-track investigation into the construction industry. The group has paid an
administrative fine of R155 850 in full and final settlement of the matter.

An ongoing dispute regarding an investigation into alleged anti-competitive behaviour in the piling and
drilling industry remains with the Competition Tribunal. This dispute concerns allegations related to historical
transgressions by Franki Africa prior to that company's acquisition by the group, and by the then-named
Esor Proprietary Limited prior to listing. This has been fully provided for in the results.

CAPEX

During the period the group invested R26,8 million (August 2012: R126 million) to improve operational
efficiencies and increase capacity in anticipation of long-term contracts which are now in hand.
In terms of the fleet rationalisation programme, aimed at a less maintenance intensive fleet and lower
CO2 emissions, plant was disposed of totalling R41,5 million.

Transformation

Esorfranki remains a 'Level 4' contributor in terms of the Department of Trade and Industry's B-BBEE Codes of
Good Practice. Considerable effort continues to be channelled into improving to Level 3 in the short term.

As announced on 24 June 2013, neither of the proposed off-market BEE equity transactions has been
pursued. It is the company's intention to increase the shareholding of the Esor Broad Based Share
Ownership Scheme in the near future to a more meaningful level and, in addition, to explore possible
alternative opportunities.

The group continues to invest heavily in enterprise development with eight SMMEs currently receiving
Esorfranki's support.

Prospects

Notwithstanding continued difficult conditions, tender activity in both the private and Government sectors
has increased. Government currently accounts for 24% of Esorfranki Civils' order book, with 57% from
parastatals and the remaining 19% from the private sector. This has been bolstered by additions to existing
contracts at Kusile for a general services pipeline, terraces, underground services and crushing, together
valued at more than R1,1 billion. Certain work on these projects is being conducted in joint venture with
two of Esorfranki's enterprise development beneficiaries, Kulani and Masibuyisane.

With the right-sizing and restructuring of Esorfranki Civils now complete, and with the new management at
the helm, the division is well positioned to capitalise on future opportunities.

The order book for Esorfranki Pipelines remains solid at R407 million, with a number of new projects coming
to market. The ongoing expansion outside of South Africa is expected to continue.

Directorate

During the period Dr Oswald Franks was appointed as an independent non-executive director with
effect from 23 May 2013. Monhla Hlahla, who was appointed as an independent non-executive director
effective 23 May 2013, subsequently resigned post the period (29 October 2013) to pursue other business
interests.

Dividend

In line with group policy, no interim dividend has been declared. It remains the policy of the group
to review the dividend policy annually in light of cash flow, gearing, capital requirements and bank
covenants.

Shareholders were notified in an announcement dated 18 November 2013 that following the disposal of
the Geotechnical division becoming effective, the board declared a special gross dividend of 38 cents
per share from income reserves. The net amount of the special dividend is 32,3 cents per Esorfranki share,
constituted as follows:

Gross dividend (cents per share)                                                          38,0   
Gross STC credits                                                                          0,0   
                                                                                          38,0   
Dividend withholding tax (15% on taxable dividend)                                       (5,7)   
Net dividend per share                                                                    32,3 
  
The relevant dates relating to the special dividend are as follows:                              
Last day to trade cum special dividend                                Friday, 29 November 2013   
Ordinary shares commence trading ex-special dividend                   Monday, 2 December 2013   
Record date                                                            Friday, 6 December 2013   
Payment date                                                           Monday, 9 December 2013   


Statement of compliance

The reviewed condensed consolidated interim financial statements for the period have been prepared
in accordance with the framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and also, as a minimum, to contain the information required by IAS 34
Interim Financial Reporting, the JSE Listings Requirements and the requirements of the Companies Act of
South Africa. During the year the following accounting standards, interpretations and amendments to
published accounting standards were adopted: IAS 19 and IFRS 10-12. There was no significant impact on
the financial results as a result of adopting these standards.

Auditor's independent review

These condensed consolidated financial results for the period have been reviewed by the company's
auditors, KPMG Inc., in terms of International Standards on Review Engagements 2410. The scope of
the review was to enable the auditors to report that nothing had come to their attention that caused
them to believe that the accompanying condensed consolidated interim financial statements are not
presented, in all material respects, in accordance with IAS 34 – Interim Financial Reporting and the South
African Companies Act. Their unmodified review report on the condensed consolidated interim financial
statements is available for inspection at the registered office of the company.

Appreciation

We extend our thanks to our management and staff for their continued hard work and dedication during
challenging times. We also thank our business partners, suppliers, advisors and our valued clients and
shareholders for their continued confidence in the group.

On behalf of the board
                    
Bernie Krone             Wessel van Zyl   
CEO                      CFO
  
28 November 2013 

                         

Condensed consolidated statement of financial position
    
                                                        Reviewed    Reviewed       Audited   
                                                       31 August   31 August   28 February   
                                                            2013        2012          2013   
                                                           R'000       R'000         R'000   
ASSETS                                                                                       
Non-current assets                                       804 482   1 230 999     1 237 461   
Property, plant and equipment                            383 564     807 095       822 678   
Intangible assets                                         85 391      87 281        86 336   
Goodwill                                                 296 169     320 507       305 715   
Other investments                                         29 739           –             –   
Financial asset at fair value through profit or loss           –         449             3   
Deferred tax asset                                         9 619      15 667        22 729   
Current assets                                         1 767 095     960 341     1 006 320   
Inventories                                              125 654      56 144        69 721   
Non-current assets held-for-sale                               –       2 139             –   
Other investments                                          1 270      29 092        27 726   
Taxation                                                       –      14 697        14 513   
Trade and other receivables                              861 531     640 139       826 713   
Cash and cash equivalents                                 24 496     218 130        67 647   
Assets held-for-sale                                     754 144           –             –   
Total assets                                           2 571 577   2 191 340     2 243 781   
EQUITY AND LIABILITIES                                                                       
Share capital and reserves                             1 093 137   1 003 921     1 053 262   
Share capital and premium                                571 300     591 463       571 300   
Equity compensation reserve                               18 756      17 655        18 606   
Foreign currency translation reserve                      41 365     (3 127)         3 850   
Retained earnings                                        461 716     397 930       459 506   
Non-current liabilities                                  253 591     535 757       540 326   
Secured borrowings*                                      145 147     384 493       368 507   
Preference shares                                         22 217           –        21 000   
Post-retirement benefits                                       –       1 806         1 913   
Deferred tax liabilities                                  86 227     149 458       148 906   
Current liabilities                                    1 224 849     651 662       650 193   
Current portion of secured borrowings*                   262 315     102 353        79 481   
Taxation                                                   2 373      12 119         4 508   
Provisions                                                24 352      34 401        38 329   
Bank overdraft*                                           69 168           –        34 059   
Trade and other payables                                 552 870     502 789       493 816   
Liabilities held-for-sale                                313 771           –             –   
Total equity and liabilities                           2 571 577   2 191 340     2 243 781   
Net asset value per share (cents)                          291,7       267,9         280,3   
Tangible net asset value per share (cents)**               218,4       189,5         205,2

* Interest-bearing debt.
** (Net asset value less intangible assets net of deferred tax)/issued shares.



Condensed consolidated statement of comprehensive income

                                                 Reviewed     Reviewed                 Audited   
                                               Six months   Six months                    Year   
                                                    ended        ended                   ended   
                                                31 August    31 August             28 February   
                                                     2013         2012                    2013   
                                                             *restated    Change     *restated   
                                                    R'000        R'000         %         R'000   
Continuing operations                                                                            
Revenue                                         1 014 591      732 449      38,5     1 538 101   
Cost of sales                                   (951 697)    (637 325)      49,3   (1 306 865)   
Gross profit                                       62 894       95 124    (33,9)       231 236   
Other income                                        5 668          685     727,5         1 324   
Operating expenses                               (40 554)     (15 368)     163,9      (69 106)   
Profit before interest, tax, amortisation,                                                       
impairments and depreciation                       28 008       80 441    (65,1)       163 454   
Depreciation, impairments and amortisation       (36 862)     (43 665)    (15,6)      (88 564)   
Results from operating activities                 (8 854)       36 776   (124,1)        74 890   
Finance costs                                    (12 896)     (14 215)     (9,3)      (49 463)   
Finance income                                        289        1 654    (82,5)        17 811   
(Loss)/profit before tax                         (21 461)       24 215   (188,6)        43 238   
Taxation                                            6 618      (9 797)     167,5      (18 136)   
(Loss)/profit from continuing operations         (14 843)       14 418   (203,0)        25 102   
Discontinued operations                                                                          
Profit from discontinued operations,                                                             
net of tax (refer page 7)                          17 053       32 918    (48,2)        62 608   
Profit for the period                               2 210       47 336    (95,3)        87 710   
Other comprehensive income:                                                                      
Foreign currency translation differences                                                         
for foreign operations                             37 515       18 268     105,4        30 157   
Actuarial gain on post retirement benefit               –            –                    (97)   
Income tax on other comprehensive                                                                
income                                            (5 627)      (2 119)   (165,6)       (4 912)   
Other comprehensive income for the                                                               
period, net of tax                                 31 888       16 149    (97,5)        25 148   
Total comprehensive income attributable to:                                                      
Owners of the company                              34 098       63 485    (46,3)       112 858   
Basic earnings per share (cents) for                                                             
continued and discontinued operations                0,60        12,60    (95,2)          23,5   
Diluted earnings per share (cents) for                                                           
continued and discontinued operations                0,60        12,60    (95,2)          23,5   
Reconciliation of headline earnings                                                              
Profit attributable to ordinary shareholders        2 210       47 336    (95,3)        87 710   
Adjusted for:                                                                                    
Profit on disposal of property, plant                                                            
and equipment                                     (2 175)     (23 437)    (90,7)      (16 988)   
Profit on acquisition of subsidiary                     –        (801)     (100)             –   
Impairment of property, plant and                                                                
equipment                                               –        3 132     (100)         6 305   
Impairment of intangible assets                         –        2 981     (100)             –   
Headline earnings attributable to                                                                
ordinary shareholders                                  35       29 211    (99,9)        77 027   
Number of ordinary shares in issue ('000)         395 185      395 185                 395 185   
diluted weighted average                          375 606      374 787                 375 289   
weighted average                                  375 606      374 787                 375 289   
Headline earnings per share (cents)                  0,01          7,8    (99,9)          20,5   


* Restatement due to application of IFRS 5 relating to Discontinued Operations.



Condensed consolidated statement of cash flows

                                                            Reviewed     Reviewed       Audited   
                                                          Six months   Six months          Year   
                                                               ended        ended         ended   
                                                           31 August    31 August   28 February   
                                                                2013         2012          2013   
                                                               R'000        R'000         R'000   
Cash flows from operating activities                                                              
Profit before taxation                                         4 589       63 461       106 679   
Adjustments for:                                                                                  
Depreciation of property, plant and equipment                 51 977       48 294       107 624   
Impairment of land and buildings                                   –        8 491         8 757   
Amortisation of intangible assets                                945          945         1 890   
Amortisation of financial asset                                    –        4 133         7 612   
Profit on disposal of property, plant and equipment          (4 285)     (28 124)      (25 915)   
Loss on disposal of property, plant and equipment                  –            –         2 320   
Foreign currency adjustment                                   31 250        1 925         8 771   
Equity-settled share-based payment transactions                  150        1 467         2 418   
Fair value adjustment of derivative instruments                    –        1 699             –   
Profit on acquisition of subsidiary                                –      (1 113)       (1 115)   
Income tax refund/(paid)                                      22 523      (6 829)      (23 040)   
                                                             107 149       94 349       196 001   
Change in inventories                                       (76 934)     (35 522)       (8 830)   
Change in trade and other receivables                      (306 285)    (111 036)     (303 483)   
Change in trade and other payables                           265 331       81 601        72 608   
Change in provisions                                        (10 481)       18 051        10 851   
Net cash (utilised in)/generated by operations              (21 220)       47 443      (32 853)   
Cash flows from investing activities                                                              
Proceeds from sale of property, plant                                                             
and equipment                                                 41 526       45 047        39 132   
Acquisition of business, net of cash                               –      (8 320)      (28 456)   
Acquisition of property, plant and equipment                (26 798)    (125 994)     (193 930)   
Acquisition of other investments                             (3 283)     (34 082)      (27 726)   
Net cash generatedby/(utilised in) investing activities       11 445    (123 349)     (210 980)   
Cash flows from financing activities                                                              
Proceeds from the issue of share capital,                                                         
net of expenses                                                    –        (582)           554   
Increase in secured borrowings                                   683      180 012       162 154   
Post-retirement benefits paid                                      –            –           107   
Preference shares issued                                           –       21 000        21 000   
Net cash generated by financing activities                       683      200 430       183 815   
Net (decrease)/increase in cash and cash equivalents         (9 092)      124 524      (60 018)   
Cash and cash equivalents at beginning of period              33 588       93 606        93 606   
Cash and cash equivalents at end of period                    24 496      218 130        33 588  
 


Discontinued operations

                                                            Reviewed     Reviewed       Audited   
                                                          Six months   Six months          Year   
                                                               ended        ended         ended   
                                                           31 August    31 August   28 February   
                                                                2013         2012          2013   
                                                               R'000        R'000         R'000   
Results from discontinued operations                                                              
Revenue                                                      464 226      410 327       787 857   
Expenses                                                   (438 176)    (371 081)     (724 010)   
Results before taxation                                       26 050       39 246        63 847   
Income tax                                                   (8 997)      (6 328)       (1 239)   
Profit for the period                                         17 053       32 918        62 608   
Basic earning per share from discontinued                                                         
operations                                                       4,6          8,5          16,2   
Diluted earnings per share from discontinued                                                      
operations                                                       4,6          8,5          16,3   
Headline earnings per share from discontinued                                                     
operations                                                       4,4          2,4          11,9   
The profit from discontinued operations is attributable                                           
entirely to the owners of the company.                                                            
Cash flows from discontinued operations                                                           
Net cash generated by/(utilised in)                                                               
operating activities                                          34 386     (21 948)        12 553   
Net cash from investing activities                           (7 063)      (9 068)      (12 244)   
Net cash from financing activities                             9 294        8 378      (11 470)   
Effect on cash flows                                          36 617     (22 638)      (11 161) 
  


                                                           31 August   
                                                                2013   
                                                               R'000   
Effect of disposal on financial position of the group               
Assets                                                              
Property, plant and equipment                              (382 959)   
Goodwill                                                     (9 546)   
Deferred tax asset                                                30   
Inventories                                                 (21 001)   
Trade and other receivables                                (271 470)   
Cash and cash equivalents                                   (69 168)   
Total assets                                               (754 144)   
Liabilities                                                         
Secured borrowings                                            39 992   
Post-retirement benefits                                       1 913   
Deferred tax liabilities                                      50 540   
Taxation                                                      11 523   
Provisions                                                     3 496   
Trade and other payables                                     206 277   
Total equity and liabilities                                 313 771 
  


Condensed consolidated statement of changes in equity

                                                    Equity                                        
                                                 compensa-                                        
                              Share      Share        tion   Translation   Retained       Total   
                            capital    premium     reserve       reserve   earnings    earnings   
                              R'000      R'000       R'000         R'000      R'000       R'000   
Balance at 1 March 2012         388    591 657      16 188      (21 395)    350 594     937 432   
Profit for the period                                                        47 336      47 336   
Other comprehensive                                                                               
income                                                                                            
Foreign currency                                                                                  
translation differences                                                                           
for foreign operations                                            18 268                 18 268   
Total other                                                                                       
comprehensive income              –          –           –        18 268          –      18 268   
Total comprehensive                                                                               
income for the period             –          –           –        18 268     47 336      65 604   
Transactions with owners,                                                                         
recorded directly in                                                                              
equity                                                                                            
Contributions by and                                                                              
distributions to owners                                                                       –   
Share issues                             (582)                                            (582)   
Share-based payment                                                                               
transactions                                         1 467                                1 467   
Acquisition of trust                                                                              
treasury shares                (13)   (21 287)                               21 300           –   
Total contributions by                                                                            
and distributions                                                                                 
to owners                      (13)   (21 869)       1 467             –     21 300         885   
Balance at                                                                                        
31 August 2012                  375    569 788      17 655       (3 127)    419 230   1 003 921   
Balance at 1 March 2013         376    570 924      18 606         3 850    459 506   1 053 262   
Profit for the period                                                         2 210       2 210   
Other comprehensive                                                                               
income                                                                                        –   
Foreign currency                                                                                  
translation differences                                                                           
for foreign operations                                            37 515                 37 515   
Total other                                                                                       
comprehensive income              –          –           –        37 515          –      37 515   
Total comprehensive                                                                               
income for the period             –          –           –        37 515      2 210      39 725   
Transactions with owners,                                                                         
recorded directly in                                                                              
equity                                                                                        –   
Contributions by and                                                                              
distributions to owners                                                                       –   
Share issues                                                                                  –   
Share-based payment                                                                               
transactions                                           150                                  150   
Total contributions by                                                                            
and distributions to                                                                              
owners                            –          –         150             –          –         150   
Balance at                                                                                      
31 August 2013                  376    570 924      18 756        41 365    461 716   1 093 137   



Information about reportable segments
for the six months ended 31 August/twelve months ended 28 February



                                 Esorfranki Civils               Esorfranki Pipelines 
  
                          August         August    February    August     August   February   
                            2013           2012        2013      2013     2012       2013   
                           R'000          R'000       R'000     R'000     R'000      R'000   
Continuing operations                                                                                  
External revenues        681 864        598 765   1 223 262   324 590   149 163    323 552   
Reportable segment                                                                                     
(loss)/profit before                                                                                   
income tax              (31 575)         28 670      54 239    31 121    10 418     30 426   
Reportable segment                                                                                     
assets                   987 196        795 274     963 994   218 467   125 166    191 552 

  


                                Esorfranki Developments          Corporate and Eliminations 
  
                          August         August   February      August          August    February   
                            2013           2012       2013        2013            2012        2013   
                           R'000          R'000      R'000       R'000           R'000       R'000   
Continuing operations                                                                                
External revenues          8 137              –          –           –        (15 479)     (8 713)   
Reportable segment                                                                                   
(loss)/profit before                                                                                 
income tax               (4 301)              –          –    (16 706)        (14 873)    (41 428)   
Reportable segment                                                                                   
assets                   105 669              –          –     506 101         543 909     353 771   




                                     Consolidated   

                              August        August    February   
                                2013          2012        2013   
                               R'000         R'000       R'000   
Continuing operations                                         
External revenues          1 014 591       732 449   1 538 101   
Reportable segment                                            
(loss)/profit before                                          
income tax                  (21 461)        24 215      43 237   
Reportable segment                                            
assets                     1 817 433     1 464 349   1 509 317   




                                  Esorfranki Geotechnical  
 
                              August        August   February   
                                2013          2012       2013   
                               R'000         R'000      R'000   
Discontinued operations                                         
External revenues            464 226       410 327    787 857   
Reportable segment                                              
profit before income tax      26 050        39 246     63 442   
Reportable segment                                              
assets                       754 144       726 991    734 464  

 


Information about reportable segments (continued)
for the six months ended 31 August/twelve months ended 28 February

                                      South Africa                         Other Regions 
             
Geographical                     August         August    February   August     August   February   
information                        2013           2012        2013     2013       2012       2013   
                                  R'000          R'000       R'000    R'000      R'000      R'000   
Continuing operations                                                                                    
Total revenue                   994 111        732 449   1 538 101   20 480          –          –   
Profit before depreciation,                                                                              
amortisations, interest                                                                                  
and tax                          24 573         80 441     165 338    3 705          –          –   
Total assets                  1 811 497      1 464 349   1 509 317    5 936          –          –  

 


                                         Consolidated         
      
Geographical                     August      August    February   
information                        2013        2012        2013   
                                  R'000       R'000       R'000   
Continuing operations                                                
Total revenue                 1 014 591     732 449   1 538 101   
Profit before depreciation,                                          
amortisations, interest                                              
and tax                          28 278      80 441     165 338   
Total assets                  1 817 433   1 464 349   1 509 317   




                                         South Africa                    Other Regions  
 
Geographical                   August         August   February    August      August   February   
information                      2013           2012       2013      2013        2012       2013   
                                R'000          R'000      R'000     R'000       R'000      R'000   
Discontinued operations                                                                                
Total revenue                 331 655        230 925    423 338   132 571     179 402    364 519   
Profit before depreciation,                                                                            
amortisations, interest                                                                             
and tax                        22 452         33 445     34 060    24 365      22 519     69 867   
Total assets                  425 027        431 040    277 422   329 117     295 951    457 042   




                                            Consolidated     
         
Geographical                      August       August   February   
information                         2013         2012       2013   
                                   R'000        R'000      R'000   
Discontinued operations                                           
Total revenue                    464 226      410 327    787 857   
Profit before depreciation,                                       
amortisations, interest                                           
and tax                           46 817       55 964    103 927   
Total assets                     754 144      726 991    734 464   




ESORFRANKI LIMITED
(Registration number: 1994/000732/06)
Incorporated in the Republic of South Africa
(JSE Code: ESR      ISIN: ZAE000133369)
("Esorfranki" or "the company" or "the group")

DIRECTORS:
DM Thompson* (Chairman)
B Krone (CEO)
WC van Zyl (CFO)
EG Dube*
O Franks*
MB Mathabathe*
Dr FA Sonn*
*Independent non-executive

REGISTERED OFFICE:
30 Activia Road, Activia Park, Germiston, 1401
(PO Box 6478, Dunswart, 1508)
Telephone: +27 11 776 8700
Fax: +27 11 822 1158

SPONSOR:
Vunani Corporate Finance
Vunani House
Vunani Office Park, 151 Katherine Street, Sandton, 2196,
(PO Box 652419, Benmore, 2010)

TRANSFER SECRETARIES:
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)

COMPANY SECRETARY:
iThemba Governance and Statutory Solutions (Pty) Limited
Monument Office Park, Suite 5 – 102, 79 Steenbok Avenue, Monument Park, 0181
(PO Box 25160, Monument Park, 0181)

INVESTOR RELATIONS:
Envisage Investor Relations
4th Floor, South Wing, Hyde Park Corner, Jan Smuts Avenue, Hyde Park, 2196

www.esorfranki.co.za

ESORFRANKI CONSTRUCTION (Pty) Ltd is a wholly-owned subsidiary of ESORFRANKI LIMITED.
ESORFRANKI CIVILS I ESORFRANKI PIPELINES I ESORFRANKI GEOTECHNICAL
are divisions of ESORFRANKI CONSTUCTION (Pty) Ltd.



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