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ATR
ATR
ATR-ACTOWERS-Abridged Audited Financial Results: year ended 28 February 2007
Africa Cellular Towers Limited
(Incorporated in the Republic of South Africa)
(Registration number 2000/027374/06)
(JSE code: ATR ISIN: ZAE000088084)
("ACTOWERS" or "the company" or "the group")
* Revenue up 52%
* Headline earnings up 47% to R31
million
* Earnings per share up 38%
* Headline earnings per share up 36%
* Net tangible asset value per share
up over 100%
ABRIDGED AUDITED FINANCIAL RESULTS
FOR THE YEAR ENDED 28 FEBRUARY 2007
CONSOLIDATED INCOME STATEMENTS
Year ended 28
February
2007
Audited
R`000
Revenue 197 251
Gross profit 61 555
Other income 11 610
Operating costs (29 364)
Earnings before interest, tax, 43 801
depreciation and amortisation (EBITDA)
Depreciation (1 125)
Profit before interest and taxation 42 676
Net interest received 2 439
Profit before taxation 45 115
Taxation (13 650)
Earnings attributable to ordinary 31 465
shareholders
Reconciliation of headline earnings:
Earnings attributable to ordinary 31 465
shareholders
Adjusted for:
Profit on sale of property, plant and (385)
equipment
Headline earnings attributable to 31 080
ordinary shareholders
Weighted average shares in issue on 193 425
which earnings per share are based
(`000) (1)
Fully diluted weighted average shares in 196 329
issue (`000) (1)
Shares in issue at period end (`000) (1) 241 650
Earnings per share (cents) 16.3
Headline earnings per share (cents) 16.1
Fully diluted earnings per share (cents) 16.0
Fully diluted headline earnings per 15.8
share (cents)
Note:
(1) The weighted average shares in issue for 28 February 2006 is based on
the conversion of 100 ordinary shares in issue to 180 000 000 ordinary
shares in issue.
CONSOLIDATED BALANCE SHEETS
28 February 28 February
2007 2006
Audited Audited
R`000 R`000
ASSETS
Non-current assets 11 834 15 505
Property, plant and equipment 10 882 6 012
Other financial assets 952 9 220
Deferred taxation - 273
Current assets 155 855 71 489
Inventories 41 353 4 295
Other financial assets 720 -
Current taxation receivable 1 708 -
Trade and other receivables 51 195 65 940
Loans receivable - 182
Cash and cash equivalents 60 879 1 072
Total assets 167 689 86 994
EQUITY AND LIABILITIES
Equity and liabilities
Equity and reserves 125 896 46 497
Share capital 47 882 -
Revaluation reserve 66 14
Retained earnings 77 948 46 483
Non-current liabilities 7 479 4 310
Long-term liabilities 7 052 3 202
Deferred taxation 427 -
Other liability - 590
Loans payable - 518
Current liabilities 34 314 36 187
Loans from directors (3) 193 3 695
Current taxation payable - 11 942
Current portion of long-term liabilities 2 426 1 390
Trade and other payables 31 695 17 952
Bank overdraft - 1 208
Total equity and liabilities 167 689 86 994
Shares in issue (`000) (1) (2) 230 000 180 000
Net asset value per share (cents) 54.7 25.8
Net tangible asset value per share 54.7 25.8
(cents)
Note:
(1) Shares in issue for 28 February 2006 is based on the conversion of
100 ordinary shares in issue to 180 000 000 ordinary shares in
issue.
(2) Shares in issue have been adjusted for treasury shares issued in
terms of the ACTOWERS Employee Share Trust.
(3) Loans from directors have been reclassified from non-current
liabilities to current liabilities in the comparative figures for
28 February 2006.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Shar Re- Retained Total
e valuation earnings equity
capi reserve R`000 R`000
tal R`000
R`00
0
Balance 1 March 2005 - 17 25 320 25 337
Changes in equity:
Share capital issued
Share premium
Profit for the year 21 163 21 163
Fair value adjustments (3) (3)
to investments
Balance 1 March 2006 - 14 46 483 46 497
Changes in equity: 23 23
Share capital issued
Share premium 47 47 229
229
Share-based payment 630 630
reserve
Profit for the year 31 465 31 465
Fair value adjustment to 52 52
investments
Balance at 28 February 47 66 77 948 125 896
2007 882
CONSOLIDATED CASH FLOW STATEMENTS
Year ended Year ended
28 February 28 February
2007 2006
Audited Audited
R`000 R`000
Cash flow from operating activities 10 128 12 952
Cash generated by operating activities 34 290 20 229
Net interest received 2 439 1 440
Taxation paid (26 601) (8 717)
Cash flows from investing activities 2 172 (2 008)
Property, plant and equipment acquired (6 282) (2 152)
Proceeds on disposals of property, 671 -
plant and equipment
Repayment of financial assets 7 601 144
Loan receivable 182 -
Cash flows from financing activities 48 715 (8 552)
Proceeds on share issue 47 252 -
Finance lease payments capital and 5 443 632
interest
Movement in other liability (590) (7)
Loan payable (518) (12 693)
Repayment of shareholders loan (3 502) 3 516
Non-cash movement share based payments 630 -
Change in cash and cash equivalents 61 015 2 392
Cash and cash equivalents at beginning (136) (2 528)
of year
Cash and cash equivalents at end of 60 879 (136)
year
OVERVIEW
The directors of ACTOWERS have pleasure in presenting the audited year end
results for the 12 months ended 28 February 2007 and are pleased to announce
that the group has significantly exceeded its growth forecasts for the year
as set out in the detailed prospectus dated 16 November 2006. ACTOWERS, one
of the largest in-house, full turnkey manufacturing and supply companies of
telecommunication support systems in Africa and other emerging markets,
listed on 29 November 2006 on the Alternative Exchange ("ALTX") of the JSE
Limited ("JSE").
The group continued to take advantage of buoyant trading conditions in the
overall cellular industry in Africa and other emerging markets. A further
five new licences were awarded to major licenced operators in Africa, that
are of interest to ACTOWERS, which is an indication of the continued growth
of the market on this continent. In addition ACTOWERS was awarded its first
contract in Madagascar in 2007 which extended the group`s geographical
operational footprint.
FINANCIAL RESULTS
For the year, group revenue increased by 52% to R197,3 million (2006: R129,4
million), which is directly attributable to large contracts that were
awarded to ACTOWERS in Nigeria, Ghana and Congo Brazzaville.
Gross profit increased by 28% to R61,6 million in 2007 (2006: R47,9
million), but the overall gross profit margin declined to 31,2% in 2007
(2006: 37,0%) as result of increased competition and an increase in the
steel price that could not immediately be passed on to ACTOWERS` customers.
Furthermore the 2007 financial year was characterized by an increased number
of "supply and install" contracts compared to more "supply-only" type
contracts in the 2006 financial year, which also impacted negatively in 2007
on the group`s gross profit margins.
The group`s EBITDA margin was maintained at 22,2% in February 2007 compared
to 22,7% in February 2006 due to the containment of operating costs and
larger foreign exchange profits earned for the year ended 28 February 2007.
EBITDA increased 49% to R43,8 million (2006: R29,3 million) for the year
under review.
Headline earnings increased 47% from the previous year to R31,0 million
(2006: R21,2 million), and attributable earnings increased 49% from the
previous period to R31,5 million (2006: R21,2 million). Headline earnings
per share increased 36% to 16.1 cents (2006: 11.8 cents).
The balance sheet was significantly strengthened, as a result of the private
placement undertaken prior to the listing, whereby ACTOWERS raised R50
million. The proceeds raised enabled the company to increase its inventory
levels substantially to R41,3 million (2006: R4,3 million) to ensure a
higher work-in-process in the company to meet demand.
Trade and other receivable ratios improved with a further reduction in
exposure or revenue contribution from the Celtel International Group from
over 70% for the year 28 February 2006 to approximately 50% for the year
ended 28 February 2007 due to the introduction of new cellular operators as
clients.
BASIS OF PREPARATION OF THE AUDITED RESULTS
Statement of compliance
The abridged financial statements comprise a consolidated balance sheet at
28 February 2007, a consolidated income statement, consolidated statement of
changes in equity and summarised consolidated cash flow statement for the
year ended 28 February 2007. The abridged financial statements have been
prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards ("IFRS") and the presentation
and disclosure requirements of IAS 34, Interim Financial Reporting.
The basis of preparation is consistent with the prior comparative year.
The abridged financial statements were approved by the board of directors on
21 May 2007.
Basis of measurement
The abridged financial statements have been prepared on the historical cost
basis except for certain financial instruments measured at fair value.
AUDITOR`S REPORT
Nexia HBLT Chartered Accountants (East Rand) Inc.`s unqualified auditor`s
report on the abridged financial statements contained in this report is
available for inspection at the company`s registered office.
SHARE CAPITAL
ACTOWERS has, through a private placement, placed 50 000 000 ordinary shares
at 100 cents per share to selected investors of ACTOWERS with the listing on
the JSE.
Prior to the date of listing on ALTX, an offer was made to the group`s
employees, to acquire shares in the company through the Share Incentive
Trust. Employees have accepted 11 650 000 ordinary shares that were offered
by the Share Incentive Trust.
PROSPECTS
ACTOWERS recently commenced to erect its own galvanising plant. It is
expected that after capital expenditure of approximately R10 million to R12
million, the galvanising plant will be fully operational towards the end of
2007, which should have a positive impact on ACTOWERS` gross profit margins.
ACTOWERS received approval from the Ghanaian Government in May 2007, to
occupy space in the Ghana Free Zone for purposes of holding ACTOWERS
inventory items to expedite delivery of components to customers and to
provide ACTOWERS with a competitive edge. In addition it is the intention
of ACTOWERS to over time establish a manufacturing concern in Ghana to
supply the whole of West and North Africa. The Free Zone will also provide
ACTOWERS with certain cost benefits as exports from the Free Zone are exempt
of charges.
SUBSEQUENT EVENTS
Shareholders are referred to the proposed acquisition and cautionary
announcement dated 13 February 2007 of JK Shelters (Pty) Limited ("JKS"), a
manufacturer and supplier of shelters to the cellular phone tower market and
complimentary to the ACTOWERS business, where ACTOWERS has entered into a
Heads of Agreements with JKS. An indicative purchase consideration of R40
million was determined based on JKS achieving a profit after taxation of R8
million for the year ended 28 February 2007. In terms of the Head of
Agreement, 30% of the purchase consideration will be settled in cash and the
difference by the issue of ACTOWERS ordinary shares at an issue price of 135
cents per share.
The above transaction is a related party transaction in terms of the JSE
Listings Requirements. Shareholders are advised to exercise caution when
dealing in the company`s securities until a full announcement is made.
DIVIDEND POLICY
On behalf of the Board
C J J Kruger
J de Villiers
Managing Director
Financial Director
22 May 2007
CORPORATE INFORMATION
Non executive director: Dr R R Richards
Registration number: 2000/027374/06
Postal address: PO Box 1363, Alberton, 1450
Company secretary: De Villiers Myburgh Inc.
Telephone: (011) 907 7364
Facsimile: (011) 869 9107
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited
Designated Adviser: Exchange Sponsors (Pty) Limited
These results and an overview of ACTOWERS are available at
www.africacellular.co.za.
Date: 22/05/2007 11:31:04 Produced by the JSE SENS Department.
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