Wrap Text
Audited Group results for the year ended 28 February 2019
Spanjaard Limited
(Incorporated in the Republic of South Africa)
Registration number: 1960/004393/06
Share code: SPA ISIN: ZAE000006938
(Company or Group)
Audited Group results for the year ended 28 February 2019
Consolidated statement of profit or loss and other comprehensive income
Year ended Year ended
R'000 28 Feb 2019 28 Feb 2018
Revenue 126 244 117 678
Cost of sales (78 296) (76 547)
Gross profit 47 948 41 131
Other income 792 329
Distribution costs (11 345) (12 295)
Administration expenses (32 356) (33 567)
Finance costs (1 197) (1 029)
Profit/(loss) before tax 3 842 (5 431)
Taxation (1 340) 897
Profit/(loss) for the year 2 502 (4 534)
Other comprehensive income/(loss)
Items that may be subsequently
reclassified to profit or loss
Movement in foreign currency translation
reserve 58 (15)
Items that will not be reclassified to
profit or loss
Revaluation on property, plant and
equipment 985 -
Tax on revaluation on property, plant and
equipment (180) -
Total comprehensive income/(loss) for
the year attributable
to ordinary shareholders 3 365 (4 549)
Earnings/(loss) and diluted earnings/(loss)
per ordinary share (cents) 30,7 (55,7)
Consolidated statement of financial position
As at As at
R'000 28 Feb 2019 28 Feb 2018
Assets
Non-current assets 33 370 30 572
Property, plant and equipment 31 047 28 994
Intangibles 1 886 1 141
Goodwill 437 437
Current assets 37 160 33 658
Inventories 20 091 16 768
Trade receivables and other receivables 16 531 16 255
Cash and cash equivalents 538 635
Non-current assets held for sale - 126
Total assets 70 530 64 356
Liabilities
Non-current liabilities 8 025 4 553
Deferred tax liabilities 5 675 4 164
Borrowings 2 350 389
Current liabilities 18 204 18 867
Trade and other payables 10 524 11 487
Bank overdraft 6 780 7 035
Borrowings 900 345
Total liabilities 26 229 23 420
Net assets 44 301 40 936
Equity
Capital and reserves attributable to the
Company's equity holders
Ordinary shares 407 407
Share premium 6 464 6 464
Reserves 37 430 34 065
Total equity 44 301 40 936
Dividends
As at As at
Dividend declared per ordinary share (cents) 28 Feb 2019 28 Feb 2018
- interim 0,0 0,0
- final 0,0 0,0
Supplementary information
Year ended Year ended
R'000 28 Feb 2019 28 Feb 2018
Capital expenditure 4 250 1 168
During the financial year new packaging machinery was purchased at a cost
of R2 555 000 as well as a new telephone system at a cost of R376 000 in
order to replace outdated equipment. The DHL IT integration was also
capitalised at a cost of R909 000.
Consolidated statement of cash flows
Year ended Year ended
R'000 28 Feb 2019 28 Feb 2018
Cash flows from operating activities
Cash receipts from customers 126 214 117 839
Cash paid to suppliers and employees (123 271) (119 158)
Cash generated from/(used in) operations 2 943 (1 319)
Interest paid (1 197) (1 029)
Tax received - 207
Net cash generated from/(used in) operating
activities 1 746 (2 141)
Cash flows from investing activities
Purchases of property, plant and equipment (138) (959)
Proceeds on sale of property, plant and
equipment 7 639
Proceeds on sale of non-current assets held for
sale 90 -
Purchases of intangible assets (572) (209)
Net cash generated used in investing activities (613) (529)
Cash flows from financing activities
Borrowings repaid (1 024) (1 474)
Proceeds from borrowings - 692
Loans from holding company - loans received - 244
Loans from holding company - repayments made - (149)
Net cash generated used in financing activities (1 024) (687)
Net increase/(decrease) in cash and cash
equivalents 109 (3 357)
Cash and cash equivalents at beginning of year (6 400) (2 997)
Effects of exchange rate changes on cash and
cash equivalents 49 (46)
Cash and cash equivalents at end of year (6 242) (6 400)
Consolidated statement of changes in equity
As at As at
R'000 28 Feb 2019 28 Feb 2018
Ordinary shares 407 407
Share premium 6 464 6 464
Foreign currency translation reserve 60 2
Opening balance 2 17
Net movement for the year 58 (15)
Revaluation reserve 7 497 7 621
Opening balance 7 621 8 536
Revaluation 805 -
Transfer to retained earnings (929) (915)
Share-based payment compensation reserve - 1 906
Opening balance 1 906 1 906
Transfer to retained earnings (1 906) -
Retained earnings 29 873 24 536
Opening balance 24 536 28 155
Profit/(loss) from continuing operations 2 502 (4 534)
Transfer from share-based payment compensation
reserve 1 906 -
Transfer from revaluation reserve 929 915
Total shareholders' equity 44 301 40 936
Reconciliation of headline earnings
Year ended Year ended
R'000 28 Feb 2019 28 Feb 2018
Continuing operations
Profit/(loss) attributable to shareholders 2 502 (4 534)
Impairment of non-current assets held for sale 9 245
Income tax effect on impairment (3) (69)
Loss on disposal of non-current assets held for
sale 27 -
Income tax effect on disposal (8) -
Loss/(profit) on disposal of property, plant
and equipment 64 (63)
Income tax effect on disposal (18) 18
Headline earnings/(loss) 2 573 (4 403)
Weighted average number of ordinary shares in
issue ('000) 8 143 8 143
Headline earnings/(loss) per ordinary share
- basic and diluted (cents) 31,6 (54,1)
Operating segments
R'000 Automotive Industrial Exports
2019
Segment sales 36 177 44 192 19 396
External foreign customers 4 972 464 19 396
External local customers 31 205 43 728 -
Segment cost of sales (18 405) (20 459) (9 874)
External foreign customers (2 324) (235) (9 874)
External local customers (16 081) (20 224) -
Segment gross profit/(loss) 17 772 23 733 9 522
External foreign customers 2 648 229 9 522
External local customers 15 124 23 504 -
Segment other income - - -
Segment distribution costs (1 687) (2 207) (4 451)
Segment administrative expenses (4 900) (5 631) (1 249)
Segment finance income/(costs) - 8 -
Profit/(loss) before tax 11 185 15 903 3 822
Taxation - - (124)
Profit/(loss) for the year 11 185 15 903 3 698
2018 - Restated
Segment sales 35 319 44 354 12 091
External foreign customers 4 905 547 12 091
External local customers 30 414 43 807 -
Segment cost of sales (17 751) (21 360) (6 556)
External foreign customers (2 146) (247) (6 556)
External local customers (15 605) (21 113) -
Segment gross profit/(loss) 17 568 22 994 5 535
External foreign customers 2 759 300 5 535
External local customers 14 809 22 694 -
Segment other income - - -
Segment distribution costs (1 627) (2 050) (4 860)
Segment administrative expenses (4 633) (5 753) (1 179)
Segment finance costs - - -
Profit/(loss) before tax 11 308 15 191 (504)
Taxation - - (32)
Profit/(loss) for the year 11 308 15 191 (536)
Head office,
Consumer manufacturing
R'000 goods and other Total
2019
Segment sales 26 163 316 126 244
External foreign customers - - 24 832
External local customers 26 163 316 101 412
Segment cost of sales (18 822) (10 736) (78 296)
External foreign customers - - (12 433)
External local customers (18 822) (10 736) (65 863)
Segment gross profit/(loss) 7 341 (10 420) 47 948
External foreign customers - - 12 399
External local customers 7 341 (10 420) 35 549
Segment other income - 792 792
Segment distribution costs (287) (2 713) (11 345)
Segment administrative expenses - (20 576) (32 356)
Segment finance income/(costs) - (1 205) (1 197)
Profit/(loss) before tax 7 054 (34 122) 3 842
Taxation - (1 216) (1 340)
Profit/(loss) for the year 7 054 (35 338) 2 502
2018 - Restated
Segment sales 23 464 2 450 117 678
External foreign customers - 1 060 18 603
External local customers 23 464 1 390 99 075
Segment cost of sales (18 920) (11 960) (76 547)
External foreign customers - - (8 949)
External local customers (18 920) (11 960) (67 598)
Segment gross profit/(loss) 4 544 (9 510) 41 131
External foreign customers - 1 060 9 654
External local customers 4 544 (10 570) 31 477
Segment other income - 329 329
Segment distribution costs (308) (3 450) (12 295)
Segment administrative expenses - (22 002) (33 567)
Segment finance costs - (1 029) (1 029)
Profit/(loss) before tax 4 236 (35 662) (5 431)
Taxation - 929 897
Profit/(loss) for the year 4 236 (34 733) (4 534)
The way in which we have determined our operating segments has been re-
evaluated based on recent changes to the organisational structure. We
have broken the business down into segments based on how management
assesses sales performance. The comparative figures have been restated
in line with this.
Related party transactions
Year ended Year ended
R'000 28 Feb 2019 28 Feb 2018
Transactions with subsidiaries
Management fees charged to subsidiary 840 840
Operating lease charged from subsidiary (2 400) (2 400)
Purchase of vehicle from subsidiary (105) -
Purchases of non-current assets held for sale
from subsidiary (14) -
Sales to subsidiary 3 192 2 636
Basis of preparation
The summary consolidated financial statements are prepared in accordance
with the requirements of the JSE Listings Requirements for provisional
reports, and the requirements of the Companies Act applicable to summary
financial statements. The Listings Requirements require provisional
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 Interim Financial
Reporting.
The accounting policies applied in the preparation of the consolidated
financial statements from which the summary consolidated financial
statements were derived are in terms of International Financial Reporting
Standards and are consistent with those accounting policies applied in
the preparation of the previous consolidated annual financial statements.
The Group has adopted the following new accounting standards as issued
by the IASB, which were effective for the Group from 1 March 2018:
IFRS 15 Revenue from Contracts with Customers (IFRS 15) and IFRS 9
Financial Instruments (IFRS 9). The application of both IFRS 15 and
IFRS 9 has had no material impact on the Group's results.
The annual financial statements, from which this report is extracted,
were audited in terms of the Companies Act, 71 of 2008.
The audited summary consolidated financial statements have been prepared
in accordance with IAS 34.
The audited summary consolidated financial statements were prepared by:
Financial Director I Saunders – CA(SA) published on 31 May 2019.
Audit opinion
These summary consolidated financial statements for the year ended
28 February 2019 have been audited by PricewaterhouseCoopers Inc., who
expressed an unmodified opinion thereon. The auditor also expressed an
unmodified opinion on the annual financial statements from which these
summary consolidated financial statements were derived.
A copy of the auditor's report on the summary consolidated financial
statements and of the auditor's report on the annual consolidated
financial statements are available for inspection at the Company's
registered office, together with the financial statements identified
in the respective auditor's reports.
Notice of annual general meeting and publication of annual report
Shareholders are advised that:
* the Annual General Meeting of the Company (the AGM) will be held at
12:00 on Thursday, 8 August 2019 at The Wanderers Club, 21 North Road,
Illovo, Johannesburg;
* the annual report, incorporating a notice convening the AGM, will be
available at the registered office of the Company and on the Company's
website at www.spanjaard.biz.
Commentary
Dear Shareholder
There has been a gratifying turnaround in our year-on-year financial
performance. We achieved our highest-ever sales during the year, which
increased by 7,3% to R126,24 million (2018: R117,68 million). This was
accomplished despite the completion of a loss-making contract for a
major retailer earlier in the year and discontinuing our Coppermet
operations. Cost of sales increased by a marginal 2,3%, demonstrating
the benefits of our fixed cost base within challenging conditions.
Our gross profit percentage improved by 3% to 38% and was boosted by a
corresponding 4,7% reduction in operating expenses, including all costs
related to distribution and administration. However, finance costs
increased, which is attributable to new finance leases as we purchased
new gas filling machinery during the year.
In our Exports segment, we can report a major improvement as sales grew
by 60,4% to R19,39 million (2018: R12,09 million), which increased the
segment's contribution to total sales to 15,4% (2018: 10,3%). Sales in
the Exports segment diversify our revenue streams and are anticipated
to increase further as we expand our presence into these buoyant
economies.
Consumer goods sales increased by 11,5% to R26,16 million (2018: R23,46
million), which includes the loss-making retail contract that was
concluded earlier in the year.
Automotive segment sales experienced modest growth year-on-year
reflecting the weak consumer environment.
Industrial segment sales were flat year-on-year at R44,19 million (2018:
R44,35 million), reflecting the general lack of business activity within
the mining and manufacturing sectors of the economy. We note improved
prospects in selected mining markets in Africa, which could stimulate
the Industrial segment sales in the year ahead.
Our cash generated from operations improved meaningfully during the
year, resulting in a marginal improvement in cash position at year-end,
despite higher prepayments relating to our new skills plan.
We continued our strict cost management during the year, maintaining our
good cash collections and keeping bad debts at low levels. This positive
financial performance was aided by our stringent customer vetting process
and supported by the services of Credit Guarantee.
The Board resolved to deregister Spanjaard UK Limited on 10 October 2018.
The Company has since been dissolved on 26 March 2019.
For their hard work throughout a busy and challenging year, we give our
sincere thanks to our employees and to management. We also extend our
heartfelt gratitude to our loyal customers, for building a future together
by supporting our business.
We appreciate the support of our shareholders and thank them sincerely for
facilitating the efforts of our management as we guide Spanjaard forward.
For helping us reach greater heights, we give thanks to our financiers and
bankers, suppliers and surrounding communities. We look forward to another
year of growing the business together.
Finally, we are grateful to our Chairman and Board of Directors for
providing their invaluable oversight, wisdom and guidance.
Due to the need to retain working capital the Board has resolved not to
declare a dividend.
By order of the Board
Prof DP van der Nest
Independent Non-executive Chairman
K Welgemoed
Chief Executive Officer
I Saunders
Financial Director
31 May 2019
Company information
Registration number
1960/004393/06
Directors
Prof DP van der Nest (Independent Non-executive Chairman)*,
K Welgemoed CA(SA) (Chief Executive Officer), I Saunders CA(SA)
(Financial Director), GF Cort, CKT Palmer, TN Stewart and S Hari*
*Independent Non-executive
Registered office
748 – 750 Fifth Street, Wynberg, Sandton, 2090
Company Secretary
Levitt Kirson Business Services (Pty) Ltd, 4th Floor, Aloe Grove,
Houghton Estate Office Park, 2 Osborn Road, Houghton, 2198
Transfer Secretaries
Computershare Investor Services Proprietary Limited, Rosebank
Towers, 15 Biermann Avenue, Rosebank, Johannesburg, 2196
Sponsors
Arbor Capital Sponsors Proprietary Limited, 20 Stirrup Lane,
Woodmead Office Park, Corner Woodmead Drive and Van Reenens
Avenue, Woodmead 2191
Auditors
PricewaterhouseCoopers Inc., 4 Lisbon Lane, Waterfall City,
Jukskei View, 2090
info@spanjaard.biz
www.spanjaard.biz
Date: 31/05/2019 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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