| Wed 5 Sep 2007, 15:26 | | RAR- Rare- Audited Maiden Prelim Financial Results |
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RAR
RAR
RAR- Rare- Audited Maiden Prelim Financial Results: 12 Months Ended 30 June 2007
RARE HOLDINGS
(Incorporated in the Republic of South Africa)
(Registration number 2002/025247/06)
Share code: RAR & ISIN: ZAE000092714
("Rare" or "the Group")
Audited maiden prelim financial results for the 12 months ended 30 June 2007
- Revenue up by 49%
- Profit after tax up by 49%
- Earnings per share up by 27%
- Headline earnings per share up by 24%
CONSOLIDATED INCOME STATEMENT
2007 2006
R`000 R`000
Revenue 317 772 213 819
Cost of sales (234 972) (155 378)
Gross profit 82 800 58 441
Other income 3 007 8 840
Operating expenses (57 692) (48 676)
Investment income 31 452
Finance costs (6 521) (4 101)
Profit before tax 21 625 14 956
Income tax expense (5 577) 4 197
Profit for the year 16 048 10 759
Attributable to:
Equity holders of the parent 14 010 5 411
Minority interest 2 038 5 348
Basic earnings per share - cents
Profit attributable to equity holders of 14 010 5 411
Rare Holdings Limited
Weighted average number of ordinary shares 49 368 24 265
in issue
Earnings per ordinary share 28,38 22,30
Headline earnings per share - cents
Profit attributable to ordinary shareholders 14 010 5 411
Profit/(loss) on disposal of fixed assets (3) 153
Headline earnings attributable to ordinary 14 007 5 564
shareholders
Headline earnings per share 28,37 22,93
CONSOLIDATED BALANCE SHEET
2007 2006
R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 24 111 10 140
Goodwill 35 578 29 945
Intangible assets 1 993 1 980
Other financial assets 372 256
Deferred taxation 226 318
62 280 42 639
Current assets
Inventories 72 888 47 599
Trade and other receivables 56 995 35 094
Current taxation receivable 4 1 551
Cash and equivalents 1 211 5 934
131 098 90 178
Total assets 193 378 132 817
EQUITY AND LIABILITIES
EQUITY
Equity attributable to equity holders of
parent
Share capital 72 598 0,1
Reserves 1 243 -
Retained income 45 067 14 314
Minority interest 511 13 976
119 419 28 290
LIABILITIES
Non-current liabilities
Loans from minority shareholders in 3 386 -
subsidiaries
Other financial liabilities 9 944 1 291
Operating lease liability 117 66
Deferred tax 477 70
Vendor loans - 32 470
13 924 33 897
Current liabilities
Loans from shareholders 192 540
Trade and other payables 42 289 65 870
Other financial liabilities 3 424 2 072
Current tax payable 3 661 283
Provisions 572 621
Vendor loans - 169
Bank overdraft 9 897 1 075
60 035 70 630
Total liabilities 73 959 104 526
Total equity and liabilities 193 378 132 817
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
R`000
Group
Balance at 1 July 2005 17 532
Changes in equity
Profit for the year 10 759
Total changes 10 759
Balance at 1 July 2006 28 290
Changes in equity
Profit for the year 16 048
Issue of shares 75 253
Share issue costs (2 725)
Treasury shares (510)
Capitalisation issue -
Foreign currency revaluation reserve 10
Revaluation of property 3 082
Dividends (184)
Business combinations 154
Total changes 91 128
Balance at 30 June 2007 119 418
CONSOLIDATED CASH FLOW STATEMENT
2007 2006
R`000 R`000
Cash flows from operating activities
Cash generated from (used in) operations (46 477) 33 496
Interest income 31 452
Dividends received - -
Finance costs (6 521) (4 101)
Tax paid (1 811) (9 733)
Net cash from operating activities (54 778) 20 114
Cash flows from investing activities - -
Purchase of property, plant and equipment (11 808) (5 819)
Sale of property, plant and equipment 461 181
Purchase of other intangible assets (106) -
Sale of other intangible assets (17) -
Loans to group companies repaid - 3 165
Sale of financial assets (116) 379
Investment in subsidiary - -
Net cash from investing activities (11 586) (2 094)
Cash flows from financing activities
Proceeds on share issue 887 -
Proceeds on share issue-premium 71 711 -
Repayment of other financial liabilities 10 006 (6 782)
Movement in vendor loans (32 639) 169
Repayment of shareholders` loan 3 038 (2 638)
Dividends paid 185 -
Net cash from financing activities 52 818 (9 251)
Total cash movement for the period (13 546) 8 769
Cash at the beginning of the period 4 860 (3 909)
Total cash at end of the period (8 686) 4 860
Notes
Based on the assumption that the restructuring of the company, as fully detailed
in the prospectus, had been effective for the full financial year ended 30 June
2007, the headline earnings attributable to Rare Holdings would have been
R17,538 million (2006: R10,912 million). With the full 70 million shares in
issue for the entire period and taking into account that the private placing
shares were issued only on 23 February 2007, the weighted average number of
shares would have been 76,250 million for 2007 (2006: 70 million) with a
resultant headline earnings of 23 cents per share (2006: 15,59 cents per share).
COMMENTARY
Profile
Rare is a distributor and manufacturer of piping and related products covering
the entire fluid conveyance cycle across all sectors. The group is represented
nationally through either company owned outlets or strategic distributorships.
Rare is represented in Angola through a partnership with a local enterprise. Its
three divisions are focused on the energy, water and chemical markets
respectively, and covers both trading and manufacturing. The group has developed
several market leading products in-house, and the various brand-names in the
group are universally recognised within the fluid conveyance industry.
Rare remains committed to supporting local enterprise, as is evidenced through
its trading and expanding manufacturing activities. Rare currently employs 285
people across the various divisions. Rare, as a major employer in the areas it
operates in, is aware of its social responsibilities and is actively involved in
the various communities.
Strategic overview
Rare`s Xtender programme, a supply chain concept encompassing the entire fluid
conveyance process, providing Total Cost of Ownership solutions, has had a very
successful implementation. This has allowed Rare to leverage a substantial
portion of government and other industries` infrastructure spend. The Water and
Chemical divisions, in particular, have shown exponential growth and this trend
is expected to continue. While infrastructure expenditure is expanding, similar
investment activity is also anticipated from the private sector.
Rare is focusing on the expansion of its maintenance arm across all divisions to
ensure continued growth beyond the current infrastructure spending. To this end
Rare is expanding its staff complement and maintenance fleet. TAS Online, a pump
monitoring company that fills a strategic opening in Rare`s product offering,
has entered into an association with RARE to complement the Xtender programme.
Rare continues to look at ways to further pursue other strategic opportunities
in the fluid cycle.
During the year under review, Rare has built up close relationships with various
overseas suppliers, particularly in China, to enable it to maintain its margins
and quality. In moving away from traditional suppliers with established credit
lines, cash flow has come under pressure as expected as these new relationships
are being forged.
Financial
The initial success of the Xtender programme has been highly encouraging.
Revenue has increased by 48% to R318 million (2006: R214 million). Rare Water
and Rare Chemical in particular showed exceptional turnover growth which bodes
well for Rare`s strategy to enter more fluids markets other than the energy
sector. Profit before tax increased by 44%. Net profit after tax showed an
increase of 45%.
In its first year of operation Rare Angola incurred an expected loss. We expect
this investment to bear fruit in the coming year and act as Rare`s springboard
into oil-rich West Africa, which remains a strategic imperative for the group.
Maiden earnings per share came to 28,4 cents. In anticipation of further
expansion in 2008, no dividends will be declared.
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) and are in compliance with the Companies
Act of South Africa and the listing requirements of the JSE. The accounting
policies are consistent with those of the previous financial period.
Rare`s auditors are Greenwoods who have issued an opinion on Rare`s financial
statements. A copy of their unqualified report is available for inspection at
the company`s registered office. These summarised financial statements were
derived from the group`s financial statements.
Prospects
Rare remains confident about its future prospects, as its range of products and
services combined with the Xtender programme gives it strategically balanced
access to the various markets in which it operates. Increased spending in
infrastructure leads to substantial opportunities for Rare to capitalise on the
maintainance of these new installations. Rare Angola is expected to contribute
materially to 2008 income.
The directors of Rare Holdings are confident that Rare`s growth will continue,
and that the company is sufficiently diversified to allow it to access a wider
market.
On behalf of the board
DMJ Ncube DE Scheepers
Chairman CEO
6 September 2007
Directors:
KO Fordwor*, DMJ Ncube* (Chairman),
S Pather*, KC van Heerden,
DE Scheepers (CEO), PJ Willemse (FD),
JJ van der Merwe*
*Non-executive director
Registered office:
35 Potgieter Street
Alrode
Johannesburg
(PO Box 124186, Alrode, 1451)
Transfer secretaries:
Computershare Investor Services
2004 (Pty) Limited
70 Marshall Street
Johannesburg, 2001
(PO Box 61763, Marshalltown, 2107)
Sponsor:
PSG Capital
Date: 05/09/2007 15:26:01 Produced by the JSE SENS Department.
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