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KIR
KIR
KIR - Kairos Industrial Holdings Limited - Abridged Audited Results For The
Year Ended 28 February 2007
Kairos Industrial Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/02927/06)
Share code: KIR & ISIN: ZAE000011284
("Kairos", "the group" or "the company")
AUDITED CONSOLIDATED INCOME STATEMENT
Year ended Year ended
28 Feb 2007 28 Feb 2006
R`000 R`000
Turnover 198 215 120 883
Cost of sales (160 203) (92 688)
Gross profit 38 012 28 195
Operating costs (26 655) (18 476)
Operating profit before investment
income,
depreciation and finance costs 11 357 9 719
Interest on loan to joint venture - 1 115
Investment income 867 557
Profit on disposal of fixed assets 697 988
Fair value adjustments 103 731
Depreciation (4 240) (3 049)
Finance costs (3 240) (2 881)
Profit before taxation 5 544 7 180
Taxation 1 094 (1 906)
Net profit attributable to ordinary 6 638 5 274
shareholders
Reconciliation of headline earnings
Net profit as above 6 638 5 274
Profit on disposal of fixed assets (697) (988)
Headline earnings 5 941 4 286
Number of shares on which profit per 252 107 252 107
share is based (000`s)
Headline earnings per share (cents) 2.36 1.70
Earnings per share (cents) 2.63 2.09
AUDITED CONSOLIDATED BALANCE SHEET
28 Feb 2007 28 Feb
2006
R`000 R`000
ASSETS
Non-current assets 65 485 55 922
Patents and intangibles 6 374 2 815
Property, plant and equipment 49 225 43 308
Investments 1 062 975
Other non-current assets 8 824 8 824
Current assets 66 370 40 068
Inventories 27 116 17 107
Trade and other receivables 31 929 11 497
Taxation overpaid 59 183
Bank and cash on hand 7 266 11 281
TOTAL ASSETS 131 855 95 990
EQUITY AND LIABILITIES
Stated capital 210 147 210 147
Non-distributable reserve 641 641
Revaluation reserve 17 812 15 131
Accumulated loss (162 550) (169 188)
Total equity 66 050 56 731
Non-current liabilities 18 843 15 154
Long-term borrowings 15 431 9 525
Deferred taxation 3 412 2 689
BBBEE share creditors - 2 940
Current liabilities 46 962 24 105
Short-term loans 17 001 5 616
BBBEE share creditors 2 936 2 940
Taxation payable 375 742
Accounts payable 22 330 11 558
Provisions 4 223 3 249
Bank overdraft 97 -
TOTAL EQUITY AND LIABILITIES 131 855 95 990
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Accumu- Non- Total
lated Revaluation distributable Share shareholders`
losses reserve reserves capital funds
R`000 R`000 R`000 R`000 R`000
Balance as
at 1 March
2005
As (174 4 827 1 164 210 41 669
previously 462) 140
reported
Profit for 5 274 - - - 5 274
the year
Revaluation - 10 304 - - 10 304
of plant
and
equipment
Reversal on - - (523) - (523)
sale of
property
Shares - - - 7 7
issued with
odd-lot
offer
Balance as (169 15 131 641 210 56 731
at 28 188) 147
February
2006
Profit for 6 638 - - - 6 638
the year
Revaluation - 2 681 - - 2 681
property
plant and
equipment
Balance as (162 17 812 641 210 66 050
at 28 550) 147
February
2007
SEGMENTAL ANALYSIS
2007 2006 %
R`000 R`000 Change
REVENUE
Mining supplies 132 840 52 977 150,8
Manufacturing - bricks 65 374 67 180 (2,7)
Property and other - 726 (100,0)
198 214 120 883 64,0
OPERATING AND INVESTMENT
INCOME
Mining supplies 6 471 4 611 40,3
Manufacturing - bricks 4 367 6 314 (30,8)
Property and other 519 (1 206) 143,0
Investment income 867 1 672 (48,1)
12 224 11 391 7,3
ABRIDGED GROUP CASH FLOW STATEMENT
Year ended Year ended
28 Feb 2007 28 Feb 2006
R`000 R`000
Net cash (outflow)/inflow from (10 462) 11 830
operating activities
Cash (outflow)/inflow from investing (8 005) (12 335)
activities
Cash flows from financing activities 14 356 3 061
Total cash movement for the year (4 111) 2 556
Cash at the beginning of the year 11 281 8 725
Total cash at end of the year 7 170 11 281
OVERVIEW OF RESULTS
Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") and the accounting
policies as set out in the 2007 annual report are consistent with those
applied in the 2006 annual report.
In terms of paragraph 8.60 of the JSE Listing Requirements shareholders are
advised that the group`s auditors, Burn Reynolds and Company, have audited
the group annual financial statements. A copy of their unqualified audit
opinion is available for inspection at the company`s registered office.
Financial highlights
Group turnover for the financial year under review increased by 64% to
R198,215 million compared to R120,883 million the previous year. The
increase in group turnover is mainly due as a result of the purchase of the
remaining 50% share holding in the mine ventilation and supplies business
and the consolidation of these results into the Group as at
28 February 2007.
At the operating level it is pleasing to note that profit before
depreciation and finance cost amounted to R11,357 million compared to
R9,719 million for the previous year. The overall improved performance can
be attributed to the successful management of controls, lower interest
rates during the year and continued economic growth in both the mining and
construction sectors, being the sectors that our core businesses operate
in.
Net profit after taxation amounted to R6,638 million compared to R5,274
million in the 2006 financial year. Headline earnings per share increased
by 38,8% to 2,36 cents while the net asset value per share increased by
16,4% to 26,2 cents per share.
REVIEW OF ACTIVITIES OF OPERATIONAL SUBSIDIARIES
Major operations
(a) Witbank Brickworks (1961) (Pty) Limited
Sales for the year declined by 2,7% from R67,180 million to
R65,374 million resulting in a decline in operating and
investment income of 30,8%. Management remains confident that
there will be a significant improvement resulting from ongoing
improvement to production efficiencies as well as the high
current demand and buoyant market.
(b) BroKrew Industrial (Pty) Limited
As previously reported the remaining 50% shareholding in the
mine ventilation and supplies joint venture was acquired at
the beginning of the financial year and the group restructured
with BroKrew Industrial (Pty) Limited becoming a wholly owned
subsidiary of the Kairos Group.
Due to the consolidation of the full results and the sustained
strength of the rand, sales increased during the year under
review by 150,8%. The company remains a major supplier of
ventilation equipment to the mining sector.
Operating and investment income increased from R4,611 million
to R6,471 million for the year under review.
Management is in the process of implementing various expansion
strategies.
Minor operations
(c) Coal Reserves
A strong emphasis has during the last year been placed on
entering the coal mining arena. Further to the activities
regarding our Uitspan Reserves as previously reported, Kairos
Coal & Exploration (Pty) Ltd was formed with its main focus
being to obtain prospecting permits on various strategic
reserves with the aim to further obtaining mining licenses.
The rationale for this strategy is Kairos` strong position
regarding skills and infrastructure already at our disposal at
our brick making facilities as well as a very strong demand
for coal locally and abroad. With some prospecting permits
already allotted, and various other applications lodged and
reserves identified, prospects for the future look promising.
Earnings from this venture should benefit the group from
financial year 2011 onwards.
(d) Township Development
The subsidiaries Ten Cradock Avenue (Pty) Ltd and Estlind
Investments (Pty) Ltd are the owners of prime development land
comprising more than 200 hectares in the township of Witbank,
Mpumalanga. Negotiations are far advanced for the proclamation
of various residential, retail and industrial sites. This
project should start contributing to earnings within the next
24 months.
SKILLS DEVELOPMENT
Training and development programmes are continuing, providing skills
training to all levels of staff.
EMPLOYMENT EQUITY
The company is complying with the Act and encourages the internal movement
and promotion of employees.
STRATEGY
The company`s strategy remains unchanged. Its management will remain
focused on its core revenue-producing businesses - Witbank Brickworks
(1961) (Pty) Limited and BroKrew Industrial (Pty) Limited and will
investigate appropriate acquisitions as they may be identified.
APPRECIATION
I wish to record my appreciation and thanks to all management, staff and
directors for their integral contribution, loyalty and support over the
past 12 months.
Pretoria
11 May 2007
By order of the Board
Mr. WL van Deventer
Chief executive
Directors: JB Oosthuizen (non-executive chairman), WL van Deventer (chief
executive), WA Lombard, JJ de W Mulder, VD Mazibuko
Visit us at www.kairos.co.za
Sponsor: Bridge Capital Advisors (Pty Limited, 1st Floor Building 22a, The
Woodlands, Woodlands Drive, Woodmead, Sandton
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited,
70 Marshall Street, Johannesburg 2001
Date: 17/05/2007 15:16:07 Produced by the JSE SENS Department.
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