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INSIMBI INDUSTRIAL HOLDINGS LIMITED - Condensed Consolidated Results For The Financial Year Ended 29 February 2020

Release Date: 21/08/2020 07:05
Code(s): ISB     PDF:  
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Condensed Consolidated Results For The Financial Year Ended 29 February 2020

INSIMBI INDUSTRIAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration No: 2002/029821/06)
Share code: ISB   ISIN code: ZAE000116828
("Insimbi" or "the group" or "the company") 

Condensed consolidated results for  the financial  year ended 29 February 2020


PROFILE

Insimbi provides the local and export steel, aluminium, cement, foundry, plastics, paper and pulp
industries with resource-based commodities like ferrous and non-ferrous metal and alloys, as well
as refractory materials, by integrating the supply, logistics and technical support functions.

FINANCIAL PERFORMANCE
                                                                           Restated
                                                     29 February        28 February           %
                                                            2020               2019      Change

Revenue (R'000)                                        4 812 068          4 545 214          6
Net  Profit (R'000)                                       29 366             45 834        (36)
Operating profit (R'000)                                  93 733            101 071         (7)
Cash generated from operations (R'000)*                  145 944             45 198        223
Earnings per share (cents)                                  8.08              11.93        (32)
Headline earnings per share (cents)                        10.13              13.52        (25)
* Restated


ACQUISITIONS
During the financial year under review, we continued our cautious but calculated "growth by
acquisition" strategy and successfully acquired Treppo Group Proprietary Limited ("Treppo Group") on
the 28th of November 2019. The Treppo Group is principally involved in the metal recycling industry.
This operation has direct synergies with our existing metal recycling operations. Unfortunately, the
rollout of this acquisition took longer than expected and it is expected to be value-accretive only 
in the new financial year ending February 2021. 

TRADING AND FINANCIAL PERFORMANCE
The steel and foundries industries in which we operate continued to struggle in the difficult local 
and global economies. The international trade standoff between the United States and China continued
throughout the year with significant negative impact on trading. The prices on the London Metal 
Exchange and the rand exchange rate fluctuations resulted in market uncertainty.

Group revenue increased by 5,9% from R4,5 billion to R4,8 billion. Gross profit however increased by
8,8% to R414 million from R380 million as a result of improved margins. 

The international trade stand-off between the United States and China had a negative effect on metals
pricing on the London Metals Exchange and, together with the push into ferrous metals, saw margins
down by 1,9% at AMR. Aluminium margins were down by 0,5% for the much the same reason.

Operating profit of R94 million was achieved, compared to R101 million in the previous year. Operating
expenses increased by 24%, of which 16% is attributable to the incorporation of Group Wreck
International Non-Ferrous Proprietary Limited for a full year and 6% to the Treppo Group. Effective
cost control was exercised in the rest of the group, with an increase of only 2% over the prior year.


DIVIDEND
Given the uncertainty that prevails in the current local and global markets as a result of the 
covid-19 pandemic, the board has elected not to declare a final dividend (2019: 2,0 cents).

OUTLOOK AND PROSPECTS
I remain cautiously optimistic about the rest of the year ahead despite the massive challenges facing
all of us due to Covid-19 and the unavoidable worsening of the economic landscape around us. There is
no doubt that the hard lockdown which resulted in almost 7 weeks of lost revenue in the first half of
the 2021 financial year will have a significant impact on our group's budgeted performance and it
remains to be seen how we perform in the current financial year compared to the prior 2020 year now
reported on.

At the time of writing it is fair to say that we are performing better than expected, since the lifting 
of level 5 lockdown. It is also fair to say, that as a result of Covid-19, we have learned not only how 
to adapt to the "new normal" but also how to operate more efficiently and effectively. This will result 
in material reductions in operating costs across the group. We are simply doing more with less. It is 
also no secret that due to the acquisition strategy pursued since 2016 the group balance sheet is 
currently rather heavily geared. As a result of the interest rate cuts since March 2020 of 2.75% (with 
more reductions expected) per annum, we will benefit significantly from a much reduced annual interest 
cost. We remain committed to playing our part as a corporate citizen of this country. This includes our 
commitment to good corporate and financial governance but equally so ongoing transformation, and we 
continue to strive to reach a minimum Level 4 rating at each operating entity.

These annual results for the year ended 29 February 2020 have been audited by the company's auditor, 
PricewaterhouseCoopers Inc., who expressed an unmodified audit opinion thereon. The audit opinion also 
includes communication of key audit matters. The audit opinion is available, along with the annual 
financial statements, and the summary financial results, on the company's website at: 
www.insimbi-group.co.za.

Any forward-looking statements contained in this announcement have not been reviewed nor reported on 
by the company's external auditors.

This short form announcement is the responsibility of the directors and is only a summary of the
information contained in the full announcement and does not contain full or complete details. The full
announcement published on SENS on 21 August 2020 is available on the group's website at 
www.insimbi-group.co.za. The full announcement is available for inspection and copies of the full 
announcement are available at the group's registered office (359 Crocker Road, Wadeville, Germiston)
and at the Sponsor's office at no charge during office hours from 21 August 2020. Any investment 
decisions by investors and/or shareholders in relation to the company's shares should be based on 
consideration of the full announcement as a whole.

Copies of the full announcement may also be requested from the Company Secretary 
MMadhlophe@insimbi-group.co.za.

The information in this press announcement has been extracted from the audited information, but the
announcement itself is not audited. 

The full announcement is also available at: https://senspdf.jse.co.za/documents/2020/jse/isse/isbe/fy2020.pdf

Johannesburg
21 August 2020


Directors:              F Botha (CA) SA (Chief Executive Officer)      
                        AJ de Wet (CA) SA (Chief Financial Officer)
                        C Coombs
                        RI Dickerson* (Chairperson)
                        IP Mogotlane*
                        N Mwale*
                        CS Ntshingila*
                        (*non-executive)
Company Secretary:      M Madhlophe
Registered office:      Stand 359 Crocker Road, Wadeville, Germiston, 1422
Website:                www.insimbi-iras.co.za
Sponsor:                Bridge Capital Advisors Proprietary Limited
Transfer Secretaries:   Computershare Investor Services Proprietary Limited
Auditor:                PricewaterhouseCoopers Inc.
 





Date: 21-08-2020 07:05:00
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