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DYM
DYM
DYM - Dynamic Cables - Reviewed Financial Results For The Year Ended 31
December 2006
DYNAMIC CABLES RSA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/001807/06)
Share code DYM & ISIN: ZAE000028270
("Dynamic Cables" or "the company")
REVIEWED FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006
Abridged Group Income Statement
for the year ended 31 December 2006
Reviewed Audited
2006 2005
R`000 R`000
Turnover 160 329 97 304
Gross profit 53 300 28 697
Operating expenses (36 055) (19 218)
Finance costs (net) (1 930) (1 410)
Negative goodwill - 3 164
Investment income 34 38
Profit before taxation 15 349 11 271
Income tax expense (5 543) (2 988)
Profit for the period 9 806 8 284
Attributable to:
Equity holders of the company 9 806 8 284
Minority interest - -
9 806 8 284
Earnings per share for profit
attributable to the equity holders of
the Group during the period (expressed
as cents per share)
Basic 14,7 12,4
Headline 14,7 9,2
Fully diluted 14,7 14,4
Abridged Group Balance Sheet
as at 31 December 2006
Reviewed Audited
2006 2005
R`000 R`000
ASSETS
Non-current assets 19 832 16 559
Property, plant and equipment 10 597 6 905
Other intangible assets 9 235 9 244
Deferred tax asset - 410
Current assets 67 377 39 856
Inventories 19 312 8 942
Loans to shareholders 5 034 3 318
Other financial assets 3 333 2 990
Trade and other receivables 27 334 17 815
Cash and cash equivalents 12 364 6 791
Total assets 87 209 56 415
EQUITY
Capital and reserves attributable to 34 860 25 059
the company`s equity holders
Share capital and premium 104 074 104 075
Retained earnings (69 214) (79 016)
LIABILITIES
Non-current liabilities 3 832 3 263
Borrowings 2 616 792
Deferred tax liability 1 216 2 471
Current liabilities 48 517 28 093
Trade and other payables 30 530 15 818
Current income tax liabilities 16 050 11 542
Borrowings 834 300
Operating lease liability 433 433
Bank overdraft 670 -
Total liabilities 52 349 31 356
Total equity and liabilities 87 209 56 415
Abridged Group Cash Flow Statement
for the year ended 31 December 2006
Reviewed Audited
2006 2005
R`000 R`000
Cash flow from operating activities 10 562 3 776
Operating profit/(loss) before working 15 348 11 271
capital changes
Working capital changes (80) (5 464)
Cash (utilised)/generated by operations 15 268 5 807
Interest received 34 38
Interest paid (1 930) (1 410)
Taxation paid (2 810) (659)
Cash flow from investing activities (5 305) (2 895)
Purchase of property, plant and (6 895) (1 149)
equipment
Purchase of subsidiary - (1 588)
Proceeds from sale of property, plant 927 (158)
and equipment
Purchase/(disposal) of other 1 006 -
investments
Sale of financial assets (343) -
Cash flow from financing activities (354) 61
(Repayments of)/proceeds from non- 2 619 -
current borrowings
Finance lease payments 2 361
(Repayments of)/proceeds from current (5 334) 61
borrowings
Net (decrease)/increase in cash 4 903 942
Cash surplus at the beginning of the 6 791 5 849
year
Cash resources at the end of the year 11 694 6 791
Statement of Changes in Equity
for the year ended 31 December 2006
Share Share Retained
capital premium earnings Total
Reviewed R`000 R`000 R`000 R`000
Balance at 1 January 3 247 100 827 (79 020) 25 054
2006 (Audited)
Profit for the year 9 806 9 806
Balance at 31 December 3 247 100 827 (69 214) 34 860
2005
Segmental information
for the year ended 31 December 2006
Profit
before
Revenue tax Assets Liabilities Total
Primary R`000 R`000 R`000 R`000 R`000
segment
Engineering 12 663 2 723 20 009 7 820 43 215
Cabling and 147 666 12 626 67 200 44 529 272
other 021
Total 160 329 15 349 87 209 52 349 315
236
Supplementary Information
for the period ended 31 December 2006
Reviewed Audited
2006 2005
R`000 R`000
Shares in issue (000`s) 66 800 66 800
Shares in issue - weighted (000`s) 66 800 66 800
Diluted number of shares - weighted 66 800 66 800
(000`s)
Profit attributable to ordinary 9 806 8 284
shareholders (R`000)
Earnings per share (cents) 14,7 12,4
Fully diluted earnings per share 14,7 14,4
(cents)
Headline earnings per share (cents) 14,7 9,2
Fully diluted headline earnings per 14,7 10,7
share - (cents)
Reconciliation of headline earnings
Profit attributable to ordinary 9 806 8 284
shareholders (R`000)
Goodwill amortised - 1 036
Negative goodwill - (3 164)
Headline earnings (R`000) 9 806 6 156
Reconciliation of diluted number of
shares
Number of shares in issue (`000) 66 800 66 800
Number of shares to be cancelled (`000) - (9 439)
Diluted number of shares (`000) 66 800 57 361
Accounting Policies
This abridged report complies with International Accounting Standard 34 -
Interim Financial Reporting, as well as with Schedule 4 of the South
African Companies Act and the disclosure requirements of the JSE
Limited`s Listing Requirements.
The abridged report has been prepared using accounting policies that
comply with International Financial Reporting Standards. The accounting
policies are consistent with those applied in the financial statements
for the year ended 31 December 2005.
Consolidation
Associates are those entities over which the Group is able to exert
significant influence but which are neither subsidiaries nor interests in
a joint venture. Investments in associates are initially recognised at
cost and subsequently accounted for using the equity method.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date control
ceases.
The purchase method of accounting is used to account for the acquisition
of subsidiaries by the Group.
The excess of the cost of acquisition over the fair value of the Group`s
share of the identifiable net assets is recorded as goodwill. If the cost
of acquisition is less than the fair value of the Group`s share of the
net assets of the subsidiary acquired, the difference is recognised
directly in the income statement as negative goodwill.
Goodwill is tested annually for impairment and carried at cost less
accumulated impairment losses.
Changes in Estimates
There are no changes to estimates made under previous SA GAAP for
transition to IFRS. Where estimates have previously been made under SA
GAAP, consistent estimates (after adjustments to reflect any difference
in accounting policies) have been made for the same date.
Dividends
No dividends have been declared or paid during the year.
Segmental Reporting
The company has diversified investments across two main categories,
namely Engineering and Cabling.
The condensed segment report deals with these two categories.
Subsequent Events
Subsequent to year end, Dynamic Cables RSA Limited acquired a 100%
holding of Kovacs Investment 753 (Pty) Limited. Other than the
acquisition there were no other material subsequent events.
Related Party Transactions
Related party transactions between subsidiaries of the Group and between
the company and the Group have been eliminated in full on consolidation.
These transactions are no less favourable than those arranged with third
parties.
Auditors` Review Opinion
The results have been reviewed by Grant Thornton whose unmodified review
report is available for inspection at the company`s registered office.
These condensed results comply with IAS 34 Interim Financial Reporting.
The accounting policies used in the preparation of this report are
consistent with those used in the annual financial statements for the
year ended 31 December 2005, which comply with International Financial
Reporting Standards.
COMMENTS
It gives me great pleasure to present the results of Dynamic Cables RSA
Limited for the financial year ended 31 December 2006. These results
represent good growth and we are pleased to report our best results so
far.
All the company`s divisions performed better than in the previous year
with the result that headline earnings per share after tax have increased
by 60%. Our engineering operations performed according to our
expectations and showed a positive improvement in profit compared with
the previous year.
Increased demand for services throughout the country led to a growing
demand for new metal enclosures from all of the companies that supply
telecom services and electrification. Our extensive financial and human
resources and our strong empowerment credentials have positioned us well
to take advantage of the rapid growth in infrastructure in our country.
Our specialist cable division again performed above expectation due to
the boom in the industrial sector. We were able to supply many industries
deploying new machinery to cope with the demands of a growing economy. In
the ICT Sector our copper connectivity products enjoyed an increased
uptake and we expect this trend to continue for the next two years due to
new technologies requiring the telecom sector to modernise their
equipment. The continuous demand by consumers for the latest and most
comprehensive features have led to greater competition amongst service
providers to continually upgrade their equipment so as to provide these
features to increasingly discerning consumers.
Due to the state spending in the civil and aviation environment on large
infrastructural projects, good demand for our cable products will
continue.
Grand Parade Investments Limited (GPI)
Shareholders are referred to the takeover bid announced on 2 November
2006. We are in discussions with Cape Empowerment Trust Limited to
facilitate the enhancement of our offer with a view to ultimately gain
the JSE`s approval of a continued listing. Shareholders will be advised
as soon as these negotiations have run their course.
Dynamic Cable RSA Limited has performed above our expectations and we
expect this performance to continue going forward.
In conclusion I wish to thank my colleagues on the board, our management
and our workforce for the hard work in achieving these remarkably good
results.
For and on behalf of the board
TD Rai R McGregor
Chief Executive Company Secretary
Cape Town
29 March 2007
Date: 29/03/2007 13:05:00 Produced by the JSE SENS Department.
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