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SUMMARISED PROVISIONAL AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2018
Trellidor Holdings Limited
(Registration number 1970/015401/06)
Share code: TRL
ISIN: ZAE000209342
("Trellidor", "the Company" or "Group")
SUMMARISED PROVISIONAL AUDITED FINANCIAL RESULTS
FOR THE YEAR ENDED 30 JUNE 2018
HIGHLIGHTS
UP 9.3%
Net cash from operating activities
28%
Return on capital
16.2
Cents per share final dividend
COMMENTARY
Introduction
Trellidor Holdings Limited ("the Group") comprises the Trellidor and Taylor Group businesses.
Trellidor is the market leading manufacturer of custom-made barrier security products, distributed via a dedicated and
skilled franchise network operating throughout South Africa, Africa and the UK.
The Taylor Group business incorporates Taylor, a major manufacturer and distributor of custom-made blinds, decorative
and security shutters and NMC, an importer and distributor of cornicing and skirting products. The Taylor Group has a
strong presence in the Western and Southern Cape.
Overview
The Trellidor business produced a solid performance reflecting its strong positioning in and the defensive qualities of the
security sector despite the tough economic conditions during the period which negatively impacted consumer spending
throughout South Africa and Africa, particularly in the middle-income market. The Taylor Group however was fully exposed
to the decline in consumer disposable income.
Group revenue for the year grew 2.6% to R539.0 million (2017: R525.3 million) in these difficult trading conditions.
The Group's gross profit margin of 45.6% was lower compared to the previous year (47.7%), predominantly due to;
increased material costs, a change in sales mix (higher proportion of sales of premium product) and an under recovery of
an above inflationary increase in labour cost. Operating expenses were well managed and increased by 4% year-on-year.
Accordingly, profit after tax of R59.6 million and earnings per share of 54.4 cents for the year declined 10% and 8%
respectively.
The Group's strong cash-generating capacity was reflected in the net cash from operating activities of R68.1 million which
grew by 9.3%. As previously reported, the second tranche of the Taylor business acquisition purchase price of R30 million
was paid from cash reserves in July 2017.
During the year the Group purchased 446,535 Group shares on the open market valued at R2.6m. These shares were
cancelled after year end.
The Group has interest-bearing liabilities of R93.0 million which incurred R8.3 million of net interest for the year ended
30 June 2018. The Group's gearing is at a conservative level and its financial risk is well managed - interest cover is
9.6 times.
The results presentation will be uploaded onto the company's website during the course of the week ending 14 September 2018.
Segments
Trellidor
Revenue grew 5% to R331.6 million. The product diversification and geographic expansion strategies generated new
product and international sales growth of 23% and 12%, respectively. This is a pleasing outcome of these strategies.
Gross margin reduced to 46.8% (2017: 49.0%), due primarily to a change in sales mix and under recovery of an above
inflationary increase in labour costs.
Recurring overhead cost growth was below inflation. Operating profit before interest declined by 1.7% to R64.9 million.
Net cash from operating activities of R49.8 million grew by 12%.
Taylor Group
Revenue declined by 0.3% to R208.8 million. Taylor experienced strong shutter sales but this was offset by weaker blind
sales. NMC which accounts for 13% of Taylor Group sales was severely impacted by the slowdown in the construction
sector.
Gross margin reduced to 43.7% (2017: 45.7%) due predominantly to higher material input costs.
Overheads were negatively impacted by new product launch expenses and foreign exchange losses of R3.2 million (2017:
R0.9 million). Operating profit before interest decreased by 31.3% to R31.8 million. Net cash from operating activities of
R18.3 million grew by 1%.
Dividend
The Board of Directors has declared a final gross dividend of 16.2 cents (2017: 19.5 cents) per ordinary share. This brings
the total gross dividend for the year ended 30 June 2018 to 27.2 cents (2017: 30.0 cents).
In addition, the Group purchased on the open market and cancelled 446,535 Group shares valued at R2.6 million.
Prospects
The introduction of the new product set over the last few years and the synergistic acquisition of the Taylor Group have
diversified and grown the Group's revenue stream. These strategies have proven to be successful as indicated above and
will continue to drive strong growth in 2019. In this respect, the strategy to sell certain Taylor products through the Trellidor
distribution network will be accelerated in 2019.
New franchisees have been signed in Africa and a dedicated team focused on growing the Group's distribution in Africa
is developing new opportunities.
The Group has capacity to benefit from operational gearing generated by strategies focused on increasing sales volumes.
Operational improvements are targeted, particularly to increase gross margin. During the period capital expenditure of
R6.0 million out of a planned total R12.0 million was made in an efficiency-enhancing project, which is expected to yield
a payback period of two years. The capital expenditure includes factory expansion and new machinery. This project was
implemented in August 2018 and will start producing full benefits from January 2019.
The Group will also continue to seek synergistic acquisition opportunities.
Auditor's report
The summarised consolidated financial results have been extracted from audited consolidated annual financial statements
but is itself not audited. The consolidated annual financial statements from which this report is extracted have been
audited by Mazars on which they expressed an unmodified opinion. A copy of the consolidated financial statements for
the year ended 30 June 2018 together with the audit report is available for inspection at the company's registered office.
The directors take full responsibility for the preparation of the summarised report and that the financial information has
been correctly extracted from the underlying consolidated annual financial statements. The consolidated annual financial
statements were approved by the board on 6 September 2018.
Information included under the heading "Prospects" and any reference to future financial information included in the
audited summarised consolidated financial results have not been audited or reviewed. Shareholders are therefore advised
that in order to obtain a full understanding of the nature of the auditor's engagement they should obtain a copy of their
report with the accompanying financial results from the company's registered office.
TM Dennison
Chief Executive Officer
11 September 2018
CASH DIVIDEND DECLARATION
Notice is hereby given that the directors have declared a final gross dividend of 16.20 cents per share for the year ended
30 June 2018.
The dividend has been declared from income reserves. A dividend withholding tax of 20% will be applicable to all
shareholders who are not exempt. The final net ordinary dividend is 12.96 cents per share for ordinary shareholders.
The issued share capital at the declaration date is 107 893 583 shares.
The income tax number of the company is 9419378840.
The salient dates for the dividend will be as follows:
Last day of trade to receive a dividend Tuesday, 2 October 2018
Shares commence trading "ex" dividend Wednesday, 3 October 2018
Record date Friday, 5 October 2018
Payment date Monday, 8 October 2018
Share certificates may not be dematerialised or rematerialised between Wednesday, 3 October 2018 and Friday, 5 October
2018, both days inclusive.
SUMMARISED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
at 30 June 2018
Audited Audited
30 June 30 June
2018 2017
Note R'000 R'000
Assets
Non-current assets
Property, plant and equipment 61 175 51 500
Goodwill 74 401 74 401
Intangible assets 42 363 46 741
Other financial assets 693 287
Deferred tax assets 3 443 3 687
182 075 176 616
Current assets
Inventories 5 106 374 94 724
Trade and other receivables 61 377 61 779
Other financial assets 1 565 794
Current tax receivable 2 202 -
Cash and cash equivalents 27 128 55 103
198 646 212 400
Total assets 380 721 389 016
Equity and liabilities
Equity
Stated capital 43 188 45 759
Reserves 4 253 2 031
Retained income 165 107 139 273
Equity attributable to owners of the company 212 548 187 063
Non-controlling interests 5 626 4 827
Total equity 218 174 191 890
Liabilities
Non-current liabilities
Other financial liabilities 6 71 364 86 090
Deferred tax liabilities 2 610 4 439
73 974 90 529
Current liabilities
Trade and other payables 7 65 681 52 617
Other financial liabilities 6 21 687 49 886
Current tax payables 894 3 647
Warranty provisions 311 447
88 573 106 597
Total liabilities 162 547 197 126
Total equity and liabilities 380 721 389 016
SUMMARISED CONSOLIDATED STATEMENT
OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
for the year ended 30 June 2018
Audited Audited
30 June 30 June
2018 2017
Note R'000 R'000
Revenue 538 984 525 384
Cost of sales (293 070) (274 878)
Gross profit 245 914 250 506
Other income 7 395 6 711
Operating expenses (161 409) (154 917)
Operating profit before interest and tax 3 91 900 102 300
Investment revenue 1 302 3 107
Finance costs (9 595) (12 183)
Profit before tax 83 607 93 224
Taxation (24 029) (27 234)
Profit for the year 59 578 65 990
Other comprehensive income:
Items that may be reclassified to profit or loss
Exchange differences on translating foreign operations (108) (710)
Reclassification of hedging reserves to profit and loss - 662
Income tax related to items that may be reclassified - -
Other comprehensive income for the year net of taxation (108) (48)
Total comprehensive income for the year 59 470 65 942
Profit attributable to:
Owners of the company 58 763 64 265
Non-controlling interests 815 1 725
59 578 65 990
Total comprehensive income attributable to:
Owners of the company 58 671 64,323
Non-controlling interests 799 1 619
59 470 65 942
Earnings per share for profit for the period attributable
to the owners of the company during the year
Earnings and diluted earnings per share (cents) 4 54.4 59.3
SUMMARISED CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2018
Total
attributable
to owners Non-
Stated Total Retained of the controlling Total
capital reserves income company interests equity
R'000 R'000 R'000 R'000 R'000 R'000
Balance at 1 July 2016 45 759 582 103 501 149 842 (846) 148 996
Total comprehensive
income for the period - 58 64 265 64 323 1 619 65 942
Employee share option - 1 391 - 1 391 - 1 391
Dividends - - (28 493) (28 493) - (28 493)
Sale of shares in subsidiary
to non-controlling interest - - - - 4 054 4 054
Balance at 30 June 2017 45 759 2 031 139 273 187 063 4 827 191 890
Total comprehensive
income for the period - (92) 58 763 58 671 799 59 470
Employees share option - 2 314 - 2 314 - 2 314
Dividend - - (32 929) (32 929) - (32 929)
Own shares (2 571) - - (2 571) - (2 571)
Balance at 30 June 2018 43 188 4 253 165 107 212 548 5 626 218 174
SUMMARISED CONSOLIDATED
STATEMENT OF CASH FLOWS
for the year ended 30 June 2018
Audited Audited
30 June 30 June
2018 2017
R'000 R'000
Cash flows from operating activities
Cash generated from operations 106 947 104 626
Interest income 1 302 3 107
Finance costs (9 537) (12 183)
Tax paid (30 569) (33 230)
Net cash from operating activities 68 143 62 320
Cash flows from investing activities
Business combinations - (124 005)
Purchase of property, plant and equipment (16 416) (9 071)
Other (1 504) 1 041
Net cash used in investing activities (17 920) (132 035)
Cash flows from financing activities
Purchase of own shares (2 571) -
Net proceeds from other financial liabilities (42 983) 59 865
Dividends paid (32 929) (28 493)
Proceeds on sale of shares to non-controlling interest - 4 054
Net cash from financing activities (78 483) 35 426
Total cash movement for the year (28 260) (34 289)
Cash at the beginning of the year 55 103 89 388
Effect of exchange rate movement on cash balances 285 4
Cash and cash equivalents at the end of the period 27 128 55 103
NOTES TO THE SUMMARISED
CONSOLIDATED FINANCIAL RESULTS
for the year ended 30 June 2018
1. Basis of preparation
The provisional audited summarised consolidated financial results for the year ended 30 June 2018 has been prepared
and presented 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, the Listings Requirements of the JSE Limited, contains the information as required
by IAS 34 - Interim Financial Reporting and the Companies Act No 71 of 2008, under the supervision of the Chief
Financial Officer, Mr CG Cunningham CA(SA). The accounting policies applied and methods of computation used
in preparation of the summarised consolidated financial information are in terms of IFRS and consistent with those
applied in the annual financial statements for the year ended 30 June 2017.
2. Segmental information
Audited Audited
30 June 30 June
2018 2017
R'000 R'000
Revenue
Trellidor 331 576 315 903
Taylor 208 820 209 481
Inter-segment (1 412) -
538 984 525 384
Operating profit before interest and tax
Trellidor 64 956 66 086
Taylor 31 835 46 307
96 791 112 393
Reconciling items
Net finance costs (8 293) (9 076)
Acquisition costs - (2 474)
Amortisation of the client database (4 891) (4 891)
Fair value adjustment on deferred consideration - (2 728)
Profit before tax 83 607 93 224
Total assets
Trellidor 141 356 125 725
Taylor 209 112 204 501
Inter-segment (318) -
350 150 330 226
Reconciling items
Cash and cash equivalents 27 128 55 103
Deferred tax 3 443 3 687
Total as per statement of financial position 380 721 389 016
Revenue by location of customer - geographical information
South Africa 475 431 470 019
Foreign 63 553 55 365
538 984 525 384
3. Operating profit
Operating profit before interest for the year is stated after accounting
for the following, amongst others:
Operating lease charge - premises 7 728 7 270
Depreciation 6 471 6 448
Amortisation of intangible assets 5 104 5 108
Employee benefits 125 885 116 886
Advertising 25 555 23 429
Cartage 7 307 6 842
Gas, electricity and water 7 075 7 034
4. Earnings per share
Profit attributable to ordinary shareholders 58 763 64 265
Adjusted for:
Profit on disposal of property, plant and equipment (100) (86)
Gross amount (150) (120)
Non-controlling interest 8 -
Tax effect 42 34
Headline earnings 58 663 64 179
Adjusted for:
Amortisation client database 4 891 4 891
Acquisition costs - Taylor - 2 474
Fair value adjustment on contingent consideration - 2 728
Tax effect (1 369) (2 134)
Non-controlling interest (264) (597)
Core headline earnings 61 921 71 541
Number Number
'000 '000
Number of shares issued 108 340 108 340
Weighted average number of ordinary shares in issue during the period 108 021 108 340
Diluted weighted average number of shares 108 021 108 340
Earnings and diluted earnings per share (cents) 54.4 59.3
Headline and diluted headline earnings per share (cents) 54.3 59.2
Core headline and diluted core headline earnings per share (cents) 57.3 66.0
Audited Audited
30 June 30 June
2018 2017
R'000 R'000
5. Inventories
Raw materials, components 101 053 80 544
Work in progress 1 805 3 222
Finished goods 1 335 1 772
Goods in transit 3 276 9 650
107 469 95 188
Provision for obsolescence (1 095) (464)
106 374 94 724
6. Other financial liabilities
Nedbank 25 000 22 264
First National Bank term loans 61 057 77 166
Wesbank Corporate 693 1 634
Novaspectacular Investments Proprietary Limited 6 301 4 912
Deferred purchase consideration - 30 000
93 051 135 976
7. Trade and other payables
Trade payables 37 587 25 592
Amounts received in advance 9 486 6 292
Accrued leave pay and bonus 9 853 9 425
Accrued expenses 6 586 8 835
Other payroll accruals 2 169 2 473
65 681 52 617
CORPORATE INFORMATION
Trellidor Holdings Limited Auditors and
("Trellidor", "the Company" or "Group") Independent Reporting Accountants
(Registration number 1970/015401/06) Mazars
Share code: TRL Mazars House
ISIN: ZAE000209342 197 Peter Mokaba Road
Morningside
Executive directors Durban, 4001
TM Dennison (Chief Executive Officer) (PO Box 70584, Overport, 4067)
CG Cunningham (Chief Financial Officer)
Corporate Sponsor
Independent non-executive directors PSG Capital Proprietary Limited
MC Olivier (Chairman) (Registration number 2006/015817/07)
RB Patmore 1st Floor, Ou Kollege
JB Winship 35 Kerk Street
Stellenbosch, 7600
Company Secretary (PO Box 7403, Stellenbosch, 7599)
P Nel and
(BComm ACIS)
71 Cotswold Drive 2nd Floor, Building 3
Westville 3629 11 Alice Lane
Sandhurst
Registered office Sandton, 2196
20 Aberdare Drive (PO Box 650957, Benmore, 2010)
Phoenix Industrial Park
Durban, 4001 Transfer Secretaries
(PO Box 20173, Durban North, 4016) Computershare Investor Services Proprietary Limited
(Registration number 2004/003647/07)
Date of incorporation Rosebank Towers
23 November 1970 15 Biermann Avenue
Rosebank, 2196
Place of incorporation (PO Box 61051, Marshalltown, 2107)
South Africa
Website
http://www.trellidor.co.za
Date: 11/09/2018 08:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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