| Wed 23 May 2007, 8:43 | | RBX - Raubex Group Limited - Audited Annual Result |
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RBX
RBX
RBX - Raubex Group Limited - Audited Annual Results For The Year Ended
28 February 2007 And Cautionary Announcement
Raubex Group Limited
Registration number 2006/023666/06
Share Code: RBX
ISIN Code: ZAE000093183
AUDITED ANNUAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2007 AND CAUTIONARY
ANNOUNCEMENT
HIGHLIGHTS
- Successful listing on the JSE Limited
- Results in-line with forecasts provided at pre-listing
- Revenues up 58.3% to R1190.9m (2006: R752.3m)
- Group operating margins of 16.3% (2006: 9.6%)
- HEPS up 132% to 83.3cps (2006: 35.9cps)
- Strong cash flow from operations up 123.6% to R198.8m (2006: R88.9m)
- Solid order book and good prospects for FY08
Francois Diedrechsen, Financial and Commercial Director of Raubex Group, said:
"We are very pleased to announce our first set of annual results as a public
company. The performance is strong and in line with the indications given ahead
of our JSE listing.
We are very positive about our prospects and look forward to solid growth next
year and continued buoyancy across the infrastructure market in South Africa."
23 May 2007
ENQUIRIES
Raubex Group 012 665 3226
Francois Diedrechsen
College Hill 011 447 3030
Frederic Cornet 083 307 8286
Jacques de Bie 082 691 5384
COMMENTARY
FINANCIAL OVERVIEW
Following a successful listing on the JSE limited on 20 March 2007, the
directors are pleased to report the group`s first set of annual financial
results as a public company.
Revenue increased by 58.3% to R1190.9m (2006: R752.3m) on the back of a
particularly strong performance by the Roadmac division and enhanced business
environment for the Raubex Construction division as the effect of government`s
increase in infrastructure spend began to materialise.
The operating profit improved 169% to R194.5m (2006: R72.3m) with operating
margin across the Group standing at 16.3% (2006: 9.6%) as a direct result of
the increasingly profitable contracts and solid performances across all
divisions.
The effective tax rate increased to 32.3% (2006: 22.7%), as a result of
utilisation of tax losses during 2006 and an increase in the STC charge during
2007. Headline earnings increased by 132% to R83.3m (2006: R35.9m) with HEPS up
132% to 83.3cps (2006: 35.9cps).
Operating cash inflow was R198.8m (2006: R88.9m).
OPERATIONAL OVERVIEW
Raubex continued to improve operational efficiencies as reflected by the
increase in the operating margins and all three divisions experienced
significant growth as government`s infrastructure spend began to flow through.
It is the stated strategy of Raubex to optimise efficiencies across its
divisions and fleet of equipment.
Roadmac
Roadmac is a specialist in the manufacturing and the laying of asphalt, chip
and spray, surface dressing, enrichments and slurry seals.
During the year under review, Roadmac increased its revenue to R685.2m (2006:
R367.1m) with net profit of R91.4m (2006: R59m).
Raubex Construction
Raubex Construction is a road and civil infrastructure construction company
focused on the key areas of new road construction (green fields) and heavy road
rehabilitation.
During 2007, the Division increased its revenue to R477.9m (2006: R350.5m) with
net profit of R36.7m (2006: R5.2m loss)
Raumix
Raumix is a producer and supplier of crushed aggregate. Raumix is a main
supplier to the construction industry and services the requirements of the
broader building industry including infrastructure projects.
During the year, Raumix`s revenue decreased to R27.8m (2006: R34.7m). The
decline was due to an increase in internal revenue which was eliminated on
consolidation. The division`s focus on operational efficiencies resulted in an
increase in net profit to R10.8m (2006: R10.6m).
BLACK ECONOMIC EMPOWERMENT
The Company is proud of its BEE credentials and in terms of ownership is more
than 26% owned by previously disadvantaged groups. The two main anchor BEE
shareholders are Matlapeng Holdings (Pty) Ltd and Kenworth (Pty) Ltd.
This BEE shareholding is a near unencumbered interest in Raubex. This as an
important advantage in its business strategy and will result in no dilution for
shareholders. BEE shareholders have agreed to a five year lock-in period post
listing.
DIVIDEND POLICY
As disclosed in the Pre-Listing Statement of the Group, Raubex intends to adopt
a competitive dividend policy and expects to declare its first dividend for the
interim period of the 2008 financial year.
SUBSEQUENT EVENTS
JSE listing
Subsequent to 28 February 2007, Raubex Group listed 162 129 832 ordinary shares
on the JSE Limited. 55 852 730 of those shares were placed with local and UK
based institutions as part of a Private Placing at a price of R15.00 each. The
placement was 11 times over subscribed.
Acquisitions
Raubex Group acquired two companies with effect 1 March 2007 - SPH Kundalila
and National Asphalt.
Raumix acquired SPH Kundalila, which was a successful strategic acquisition
that opened new routes to market for Raumix and secured a high quality new
client base including mining houses. SPH Kundalila is involved in the
screening, mining, crushing and processing of stone and related activities.
Roadmac acquired National Asphalt, a specialist in the manufacture and laying
of premix asphalt. A pro forma income statement including the effect of the
acquisitions has been included at the back of this report.
Based on the pro forma 2007 statement compared to those of February 2006,
revenue
increased by 113% to R1600m (2006: R752m) whilst operating profit moved by 279%
to R273.8m (2006: R72.2m). HEPS improved 220% to 115.2cps (2006: 35.9cps).
The revenue split for the three divisions, based on the pro forma statement,
is:
- Roadmac - 52.1%
- Raubex - 29.9%
- Raumix - 18%
PROSPECTS
As at 28 February 2007, the group`s construction book stands at R1.6bn.
Locally, a number of government led initiatives should inevitably result in
increased demand for the services provided by the Raubex Group. Most industry
players, including Raubex, only began seeing the tangible results of the
announced infrastructure investments filter through to the order book in the
past year. From the government`s announced budget infrastructure spend, R60
billion has been set aside, over the next three years, for roads alone.
Raubex believes that it will be the biggest beneficiary of the anticipated
growth in road expenditure at both the national and provincial government
levels.
The Group intends to continue growing both organically and acquisitively where
it is value enhancing. As a publicly traded company Raubex is also better
placed to participate in Public Private Partnerships due to the enhanced
financing options available as well as its enhanced profile.
International activities, although small from a group perspective, are
currently focused on Zambia and are expected to remain solid. These operations
contribute 11.3% of Group revenues.
Raubex has been operating in its selective markets for more than three decades.
It has never experienced a market as buoyant as the current market and it has
the strongest pipeline in its history. All the divisions continue to tender on
contracts with larger values and higher margins.
With a CIDB rating of 9 and as a listed company Raubex can tender on any
capital infrastructure project in the country. This includes tendering for
large scale PPP contracts.
CAUTIONARY ANNOUNCEMENT
Shareholders of Raubex are informed that the company is currently involved in
negotiations relating to a potential acquisition. If the potential acquisition
is successfully concluded it may have an impact on Raubex`s share price.
Shareholders are accordingly advised to exercise caution in their dealings in
Raubex shares until such time as further announcements are made.
Consolidated Financial Statements for the year ended 28 February 2007
Audited Consolidated Income Statement
for the year ended 28 February 2007
Audited Restated
2007 2006
R R
Revenue 1,190,860,142 752,289,999
Cost of sales (964,438,063) (647,804,301)
Gross profit 226,422,079 104,485,698
Other income 15,811,940 14,404,663
Other gains/(losses) - net (11,019,291) 283,827
Administrative expenses (36,710,215) (46,896,316)
Operating profit 194,504,513 72,277,872
Finance income 16,814,914 5,275,477
Finance costs (12,296,390) (3,230,306)
Share of profit of associates 6,258,820 9,090,184
Profit before taxation 205,281,857 83,413,227
Taxation expense (66,423,518) (19,011,960)
Profit for the year 138,858,339 64,401,267
Attributable to:
Equity holders of the company 85,335,234 36,025,834
Minority interest 53,523,105 28,375,433
Shares in issue 100,000,000 100,000,000
Basic earnings per share (cents) 85,3 36,0
Calculation of Headline Earnings per Share
for the year ended 28 February 2007
Net profit after tax attributable to equity
holders 85,335,234 36,025,834
Adjusted for:
Profit on sale of fixed assets after tax (1,460,217) (45,439)
Impairment of loans 505,638 -
Negative goodwill on acquisition of
subsidiaries (1,044,890) (79,880)
Basic headline earnings 83,335,765 35,900,515
Weighted average number of shares 100,000,000 100,000,000
Headline earnings per share (cents) 83,3 35,9
Audited Consolidated Balance Sheet
as at 28 February 2007
Audited Restated
2007 2006
R R
ASSETS
Non-Current Assets
Property, plant and equipment 290,398 357 221,459,999
Goodwill 16,533,580 3,551,833
Investments in associates 14,629,758 18,196,645
Deferred income tax assets 4,634,946 7,577,811
326,196,641 250,786,288
Current Assets
Inventories 17,628,617 11,548,511
Construction contracts in progress 44,263,883 25,244,500
Trade and other receivables 258,686,325 196,304,516
Current income tax receivable 17,077,177 8,441,771
Cash and cash equivalents 83,266,639 61,077,745
420,922,641 302,617,043
Total Assets 747,119,282 553,403,331
EQUITY AND LIABILITIES
Equity
Share capital 1,432,782 300
Share premium 1,282,167,325 -
Other reserves (1,195,534,256) -
Retained earnings 217,704,494 146,908,744
Equity Attributable to Equity Holders of
Company 305,770,345 146,909,044
Minority interest in equity 1,517,273 78,198,452
Total Equity 307,287,618 225,107,496
Liabilities
Non-Current Liabilities
Borrowings 89,208,131 66,867,993
Provisions for liabilities and charges 658,000 600,000
Deferred income tax liability 52,511,816 46,319,209
142,377,947 113,787,202
Current Liabilities
Short term portion of borrowings 37,014,819 29,684,764
Current income tax liabilities 8,494,173 7,176,664
Trade and other payables 246,006,662 176,369,297
Bank overdrafts 5,938,063 1,277,908
297,453,717 214,508,633
Total Liabilities 439,831,664 328,295,835
Total Equity and Liabilities 747,119,282 553,403,331
Audited Consolidated Cash Flow Statement
for the year ended 28 February 2007
Audited Restated
2007 2006
R R
Cash flows from operating activities
Cash generated from operations 198,880,958 88,913,342
Finance income 16,814,914 5,275,477
Dividends paid (65,504,353) (39,238,125)
Finance costs (12,296,390) (3,230,306)
Taxation paid (66,524,920) (31,050,499)
Net cash from operating activities 71,370,209 20,669,889
Cash flows from investing activities
Additions and acquisitions of fixed assets (113,831,528) (71,997,164)
Sale of fixed assets 22,731,812 26,666,738
Acquisition of subsidiaries (991,284,592) 6,655,934
Sale of financial assets - 1,659,408
Minorities acquired (278,826,096) -
Associates dividends received 4,275,000 -
Loans to associates (4,238,405) (1,125,331)
Net cash from investing activities (1,361,173,809) (38,140,415)
Cash flows from financing activities
Proceeds from borrowings 49,639,872 22,978,290
Borrowings repaid (19,969,679) -
Proceeds from shares and share premium
issued 1,283,600,106 -
Other non-cash items (5,937,960) -
Net cash from financing activities 1,307,332,339 22,978,290
Total cash movement for the period 17,528,739 5,507,764
Cash at the beginning of the period 59,799,837 54,292,073
Total cash at end of the period 77,328,576 59,799,837
Audited Consolidated Statement of Changes in Equity
Share Share
capital premium
R R
Balance at 1 March 2006 300 -
Changes in equity:
Issue of share capital and share premium 1,432,482 1,282,167,325
Currency translation reserve
Profit for the year
Reverse acquisition of subsidiary
Minority interest acquisition
Dividends
Total changes 1,432,482 1,282,167,325
Balance at 28 February 2007 1,432,782 1,282,167,325
Other Retained
reserves earnings
R R
Balance at 1 March 2006 - 146,908,744
Changes in equity:
Issue of share capital and share premium - -
Currency translation reserve 1,213,204 -
Profit for the year - 85,335,234
Reverse acquisition of subsidiary (1,001,620,037) -
Minority interest acquisition (173,677,907) -
Dividends - (35,989,000)
Total changes (1,174,084,740) 49,346,234
Balance at 28 February 2007 (1,174,084,740) 196,245,978
Total Minority Total equity
attributable to interest
equity holders
of the parent
company
R R R
Balance at 1 March
2006 146,909,044 78,198,452 225,107,496
Changes in equity:
Issue of share
capital and share
premium 1,283,599,807 - 1,283,599,807
Currency translation
reserve 1,213,204 404,401 1,617,605
Profit for the year 85,335,234 53,523,105 138,858,339
Reverse acquisition
of subsidiary (1,001,620,037) - (1,001,620,037)
Minority interest
acquisition (173,677,907) (101,093,332) (274,771,239)
Dividends (35,989,000) (29,515,353) (65,504,353)
Total changes 158,861,301 (76,681,179) 82,180,122
Balance at 28
February 2007 305,770,345 1,517,273 307,287,618
Audited Consolidated Statement of Changes in Equity
Share capital Other Retained
reserves earnings
R R R
Balance at 1 March 2005 as
adjusted to IFRS 300 1,533,004 135,847,481
Changes in equity:
Negative goodwill on
acquisition of subsidiaries
transferred to retained
earnings (1,533,004) 1,533,004
Profit for the year - 36,025,834
Minority interest on
acquisition of subsidiaries - -
Dividends - (26,497,575)
Total changes - (1,533,004) 11,061,263
Balance at 28 February 2006 300 - 146,908,744
Total Minority Total equity
attributable to interest
equity holders
of the parent
company
R R R
Balance at 1 March 2005
as adjusted to IFRS 137,380,785 58,106,776 195,487,561
Changes in equity:
Negative goodwill on
acquisition of
subsidiaries
transferred to retained
earnings - - -
Profit for the year 36,025,834 28,375,433 64,401,267
Minority interest on
acquisition of
subsidiaries - 4,456,793 4,456,793
Dividends (26,497,575) (12,740,550) (39,238,125)
Total changes 9,528,259 20,091,676 29,619,935
Balance at 28 February
2006 146,909,044 78,198,452 225,107,496
Note: Presentation of Financial Statements
These financial statements are the first published financial statements of the
group prepared in accordance with International Financial Reporting Standards
(IFRS). Consolidated and company financial statements until 28 February 2006
had been prepared in accordance with South African Statements of Generally
Accepted Accounting Practice (SA GAAP).
Audited Segmental Analysis
for the year ended 28 February 2007
Aggregate Road Surfacing
and and
crusher rehabilitation
R R
Business segments
At 28 February 2007
Segment revenue - external 27,780,892 685,149,524
Segment result (operating profit) 11,438,651 134,731,529
At 28 February 2006
Segment revenue - external 34,662,994 367,093,054
Segment result (operating profit) 10,178,607 67,580,521
Local
R
Geographical segments
At 28 February 2007
Segment revenue - external 1,047,246,969
Segment result (operating profit) 186,654,139
At 28 February 2006
Segment revenue - external 713,417,603
Segment result (operating profit) 75,629,583
Road
construction
and
earthworks Consolidated
R R
Business segments
At 28 February 2007
Segment revenue - external 477,929,726 1,190,860,142
Segment result (operating profit) 48,334,333 194,504,513
At 28 February 2006
Segment revenue - external 350,533,951 752,289,999
Segment result (operating profit) (5,481,256) 72,277,872
International Consolidated
R R
Geographical segments
At 28 February 2007
Segment revenue - external 143,613,173 1,190,860,142
Segment result (operating profit) 7,850,374 194,504,513
At 28 February 2006
Segment revenue - external 38,872,396 752,289,999
Segment result (operating profit) (3,351,711) 72,277,872
Notes
Accounting policies
These results have been compiled in accordance with International Financial
Reporting Standards (IAS34). The presentation of these results also conforms to
the listing requirements of the JSE Limited and Schedule 4 of the South African
Companies Act. The accounting policies used in the preparation of the results
differ to those adopted in the annual financial statements for the year ended
28 February 2006 due to the company`s first time adoption of IFRS and its
listing on the JSE.
Restatements, Changes in Accounting Policy and Comparatives
IFRS - First time adoption of IFRS
The company became a first time adopter of IFRS on 1 March 2005 and these are
the first financial statements presented under IFRS. The adoption of IFRS
resulted in change in the previously reported results for 2006 as follows:
2006 2006
SA GAAP Change IFRS
Assets 448,461,771 104,941,560 553,403,331
Liabilities 295,202,776 330,930,059 228,295,835
Equity 153,258,996 71,848,500 225,107,496
Profit after tax 63,165,464 1,235,803 64,401,267
The results have been audited by PricewaterhouseCoopers Incorporated and the
unqualified audit opinion is available on request from the company secretary at
the company`s registered office.
The group`s annual financial report will be available before the end of August
2007.
Reverse acquisition - Raubex (Pty) Ltd
The company acquired Raubex (Pty) Ltd in a reverse acquisition transaction
during the year and consequently predecessor accounting was applied and the
comparative figures presented are those of the acquired subsidiary.
The reverse acquisition was made by the issuance of 100 000 000 shares at 1c
each at a premium of R 9,99 per share.
Acquisition of minorities
The company acquired the interests of the minority shareholders of Raubex (Pty)
Ltd at 28 February 2007 by issuance of 42,848,200 shares of 1c each at a
premium of R 6,49 per share.
Acquisition of subsidiaries
The company acquired Milling Techniks (Pty) Ltd on 1 September 2006 for an
amount of R 15 000 000. Milling Techniks specialises in road rehabilitation.
Contingent assets and liabilities
There were no material changes in the contingent assets and liabilities since
the last annual balance sheet date.
Subsequent events
JSE listing
Subsequent to 28 February 2007, Raubex Group listed 162 129 832 ordinary shares
on the JSE Limited.
Acquisitions
Raubex Group acquired two companies with effect 1 March 2007 - SPH Kundalila
for R 162,2m and National Asphalt for R27,5m.
Raumix acquired SPH Kundalila. SPH Kundalila is involved in the screening,
mining, crushing and processing of stone and related activities.
Roadmac acquired National Asphalt, a specialist in the manufacture and laying
of premix asphalt.
Pro forma income statement of Raubex Group
The table below sets out the unaudited pro forma income statement of Raubex
Group. The unaudited pro forma statement has been prepared for illustrative
purposes only and because of its nature may not fairly reflect the results of
Raubex after the below-mentioned acquisitions. The pro forma forecast income
statement is the responsibility of the Directors of Raubex.
Audited
12 months ended
28 February 20071
R`000 Restructuring 2
Revenue 1,190,860 -
Operating profit 194,504 -
Net finance income/(cost) 4,519 -
Income from associates 6,259 -
Profit before tax 205,282 -
Taxation -66,424 -
Profit for the year 138,858 -
Attributable to:
Equity holders of the company 85,335 53,253
-
Minority interest 53,523 53,253 -
Shares in issue (`000) 100,000 43,278
Earnings per share (cents) 85.3 -
Headline earnings per share (cents) 83.3 -
Unaudited
pro forma
12 months ended
R`000 Acquisitions 3 28 February 2007
Revenue 410,060 1,600,920
Operating profit 79,350 273,854
Net finance income/(cost) -5,826 -1,307
Income from associates -5,879 380
Profit before tax 67,645 272,927
Taxation -17,512 -83,936
Profit for the year 50,133 188,991
Attributable to:
Equity holders of the company 50,133 188,721
Minority interest 270
Shares in issue (`000) 18,852 162,130
Earnings per share (cents) - 116.4
Headline earnings per share (cents) - 115.2
Notes:
1. Extracted from the audited results of Raubex Group for the year ended
28 February 2007,
2. Represents the effects of the group restructure on minority interests,
based on the assumption that the acquisition of the minorities interests were
effective from 1 March 2006.
3. Represents the effects of the acquisition of SPH, National Asphalt and
Milling Techniks per the Pre-listing statement, on the following assumptions:
a. The acquisitions were effective 1 March 2006;
b. Based on the unadjusted, except as set out below, financial information
of the respective entities as follows:
i. SPH - Unaudited management accounts for the 12 months ended 30 November
2006;
ii. National Asphalt - Audited financial statements for the year ended
31 August 2006, adjusted for the disposal of the effects of an investment
during the year; and
iii. Milling Techniks - Unaudited management accounts for the 6 months
ended 31 August 2006. Milling Techniks was acquired by Raubex with effect
1 September 2006, consequently its results for the 6 months ended
28 February 2007 are included in the results of Raubex for the year ended 28
February 2007;
4. The pro forma financial information is presented applying the accounting
policies of Raubex. The unaudited pro forma income statement of Raubex has
been reviewed by PricewaterhouseCoopers. A copy of the reporting accountants
report is available at the registered office of Raubex.
On behalf of the Board:
M C Matjila J E Raubenheimer F Diedrechsen
Chairman Chief Executive Officer Group Financial &
Commercial Director
23 May 2007
Raubex Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 2006/023666/06
Share Code: RBX
ISIN Code: ZAE000093183
("Raubex" or the "Company")
Directors:
M C Matjila (Chairman)# , J E Raubenheimer, GM Raubenheimer, F Diedrechsen,
F Kenney#, M B Swana#, L Maxwell*
# Non-executive * Independent non-executive
Company Secretary:
MDP Secretarial Services (Pty) Ltd
Registered office:
1st Floor Leopard Creek Building
The Greens Office Park
Centurion
Postal address:
PO Box 66192
Highveld
0169
Transfer secretaries:
Computershare Investor Services 2004 (Pty) Ltd
Auditors:
PricewaterhouseCoopers Advisory Services (Pty) Ltd
Sponsor:
Investec Bank Limited
www.raubex.co.za
Date: 23/05/2007 08:10:27 Produced by the JSE SENS Department.
