| Tue 11 Sep 2007, 9:15 | | RBA - RBA Holdings Limited - Abridged Prospectus |
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JSE
RBA
RBA - RBA Holdings Limited - Abridged Prospectus
RBA Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1999/009701/06)
(JSE code: RBA ISIN: ZAE000104154)
("RBA" or "the company")
Abridged Prospectus
This abridged prospectus is not an invitation to the public to subscribe for
shares in RBA, but is issued in compliance with the Listings Requirements of the
JSE Limited for information purposes only. The information in this abridged
prospectus has been extracted from a full prospectus issued by RBA on 5
September 2007 ("the detailed prospectus"), which is available as set out in
paragraph 8. At the date of listing the authorised share capital of RBA
comprises 750 000 000 ordinary shares with a par value of 0.001 cent each, of
which 310 000 000 shares will be in issue after a private placement of RBA
ordinary shares by way of an offer by the company for the subscription of 30 000
000 ordinary shares at an issue price of 100 cents per ordinary share in the
share capital of RBA thereby raising R30 million before expenses and an offer
for sale of 35 000 000 ordinary shares by the existing shareholders at a price
of 100 cents per ordinary share (together, "the private placement").
ABRIDGED PROSPECTUS
Listing of RBA ordinary shares ("shares") on JSE Limited ("the JSE").
1. INTRODUCTION
1.1 RBA intends to list on Altx to raise capital to take full advantage of
various growth opportunities.
1.2 The concomitant placement of vendor shares will assist in improving the
free float and liquidity of the shares.
1.3 A listing will further enhance the corporate profile and general public
awareness of RBA and its business.
1.4 Upon listing, members of the investing public, clients and associates of
RBA will be afforded the opportunity to participate directly in the future
growth and earnings potential of the company.
1.5 The listing will provide the platform for the company to pursue its vision
of becoming the leader in supplying fully bonded quality homes on a turnkey
basis to the affordable housing market in Gauteng and Polokwane, as well as
throughout the rest of South Africa.
2. NATURE OF THE COMPANY`S BUSINESS AND INDUSTRY
2.1 RBA was established in 1997 and registered under the Act in 1999. RBA has
grown to become one of the leading suppliers of fully bonded quality homes
on a turnkey basis to the affordable housing market in Gauteng
(Johannesburg, Tshwane and Vaal Triangle) and Polokwane.
2.2 RBA`s head office operates from its premises, the Nedbank building, in
Braamfontein, Johannesburg.
2.3 RBA has built more than 5 000 homes since its establishment in 1997. There
are approximately 600 homes under construction currently, with the capacity
to deliver about 1 200 homes per annum. This capacity can be increased to
deliver in excess of 2 000 homes per annum.
2.4 RBA Developments (Johannesburg) manages land procurement, legal,
administration, project management, construction and finance for all the
group`s operations as well as consults to all group companies on strategic
matters.
2.5 In 2001 RBA opened a sales office in Pretoria. Demand for housing in the
affordable housing market segment led to the establishment of RBA Tshwane
in January 2006, which also has three satellite sales offices to meet the
demand between Johannesburg and Pretoria.
2.6 The RBA sales office in Polokwane was opened in 2003, an independent
company being established during 2005 due to the local demand.
2.7 RBA controls most of the processes throughout the supply chain in order to
deliver an affordable product at a fixed price on time. This was achieved
in the following manner:
- RBA has internal and external channels to ensure it meets its sales
targets;
- established an internal construction arm to ensure quality control and
to meet delivery targets;
- established a bond originating business capitalising on the
commissions paid by commercial banks for placing clients` loans with
them;
- a credit life assurance business, underwritten by Hollard Insurance,
was established to ensure that RBA was protected in the event of a
client`s death or disability; in addition the premiums received add to
RBA`s bottom line; and
- acquisition of small pockets of land to be used for township
development.
2.8 RBA`s vision is:
- to become the leader in supplying fully bonded quality homes on a -
turnkey basis to the affordable housing market in South Africa;
- to acquire vacant land in order to improve control of product delivery
and to increase profit margins by delivering product built on its own
land;
- to alleviate the critical housing shortage in South Africa;
- to acquire businesses to increase capacity and further improve control
of delivery;
- to ensure customer satisfaction by adjusting capacity and
infrastructure of the group; and
- to develop and motivate RBA and its staff to become leaders in their
respective fields.
3. PROSPECTS
3.1 Demand for RBA`s turnkey solution will continue to grow as a result of the
following:
- the rapidly growing black middle class with increasing disposable
income and a strong culture of home ownership;
- the housing backlog which is estimated at approximately 2,2 million
units;
- the housing market growing at approximately 20% per annum;
- RBA`s one stop turnkey offering, track record and brand are attractive
to clients;
- Banks are prepared to finance 132 000 homes per annum to meet their
commitments under the Financial Services Charter;
- a greater availability of end user finance solutions, linked products
and development capital/loans;
- relaxation of the urban edge; and
- Government support for projects.
3.2 RBA is geared to increase the capacity on its existing sales,
administration, construction and software platforms.
3.3 RBA performs the initial financial screening itself, and consequently does
not expect the National Credit Act to have any negative effect on demand
nor an increase in "declined" applications. RBA expects this Act to have a
positive impact on the affordable housing sector as a client`s disposable
income should increase due to the difficulty in obtaining short-term
credit. It is expected that this additional disposable income should, in
due course, be available for repayment of bond instalments.
3.4 RBA intends pursuing growth opportunities such as the following:
- increasing its market share in Johannesburg, Tshwane and Polokwane;
- introducing its product to other areas of the country;
- meeting the growing demand;
- growing its internal construction business;
- growing ancillary sources of revenue;
- acquiring land along the urban fringes;
- building of a rental stock book; and
- introducing a higher density lower cost product.
4. SUMMARY OF HISTORICAL AND FORECAST INCOME STATEMENTS
The summarised historical and forecast financial information of RBA for the
financial year ended 31 December 2006, and the financial years ending 31
December 2007 and 31 December 2008, the preparation of which is the
responsibility of the directors, are set out below. This financial
information must be read in conjunction with the independent reporting
accountants` report thereon reproduced in Annexures 3, 4 and 5 of the
detailed prospectus.
Extracts from the historical and forecast income statements
Year ended 31 December Audited Forecast Forecast
2006 2007 2008
R`000 R`000 R`000
Gross revenue
175,819 235,221 306,188
Direct and operating
costs (152,972) (177,041) (227,365)
EBITDA
22,847 58,180 78,823
Depreciation
(1,145) (1,400) (1,700)
Profit before interest
and taxation 21,702 56,780 77,123
Other income
8,261 3,259 3,358
Interest income
3 528 604
Interest paid
(2,089) (3,602) (4,432)
Profit before taxation
27,877 56,965 76,653
Taxation
(8,728) (16,501) (22,287)
Profit after taxation
19,149 40,464 54,366
Profit/(loss) from (165)
associate company (65) 200
Minority interest
(36) (4,931) (8,070)
Earnings attributable to
ordinary shareholders 18,948 35,468 46,496
Fair value adjustment of
investment property
(1,300) (810) (891)
Headline earnings
attributable to ordinary 17,648 34,658 45,605
shareholders
Pro forma weighted 280,000,000 288,383,562 310,000,000
average shares in issue
Pro forma earnings per
share (cents) 6.77 12.30 15.00
Pro forma headline
earnings per share 6.30 12.02 14.71
(cents)
Notes:
(1). The pro forma number of shares in issue for 31 December 2006 is based on
the sub-division and increase of the ordinary shares in issue into 280 000
000 ordinary shares in issue on the last practicable date as set out in
paragraph 23.3 of the detailed prospectus.
(2). The assumptions upon which the forecast income statements are based are set
out in paragraph 11.3 of the detailed prospectus.
5. PURPOSE OF THE PRIVATE PLACEMENT AND THE LISTING
5.1 The purpose of the placement and the listing are to:
- Raise R30 million capital:
- to take full advantage of growth opportunities;
- to procure additional land especially along urban edges;
- to pursue potential acquisition opportunities;
- to provide a working capital cash injection;
- Place R35 million vendor shares to improve the free float and
liquidity of RBA shares;
- Retain and attract staff through the incentive of meaningful equity
participation;
- Enhance general public awareness of RBA, its activities and
specialised skills; and
- Afford members of the investing public, suppliers and associates of
RBA the opportunity to participate directly in the earnings potential
of the group.
6. DIRECTORS, COMPANY SECRETARY AND REGISTERED OFFICE
6.1 Full names, ages, business addresses and functions of the board of
directors of RBA:
Director Age Function Business address
David King 36 Chief Executive 11th Floor, Nedbank
Wentzel Officer and Building, 96 Jorissen
Chairman Street, Braamfontein,
2017
Richard 31 Executive 11th Floor, Nedbank
Francis Director Building, 96 Jorissen
Eksteen Street, Braamfontein,
2017
Daniel 38 Marketing 11th Floor, Nedbank
Frederik Director Building, 96 Jorissen
Esterhuyse Street, Braamfontein,
2017
Jason 30 Financial 11th Floor, Nedbank
Leonard Director Building, 96 Jorissen
Mortimer Street, Braamfontein,
2017
Bernard 34 Land 11th Floor, Nedbank
Andre Procurement Building, 96 Jorissen
Stegmann Director Street, Braamfontein,
2017
George 31 Executive 11th Floor, Nedbank
Stuart Director Building, 96 Jorissen
Warren Street, Braamfontein,
2017
Leon 60 Non-Executive 104 Kerry Road, Parkview,
Theron Director 2193
Lehlohonol 42 Non-Executive 92 Douglas Harris Drive,
o Andy Director Meyersdal, Alberton
Tondi
Notes:
All the directors are South African
6.2 Company secretary and registered office are:
Jason Leonard Mortimer (CA) SA
Nedbank Building
96 Jorissen Street
Braamfontein, 2017
(PO Box 30885, Braamfontein, 2017)
Telephone: (011) 483 5000
Facsimile: (011) 339 8724
7. THE PLACEMENT
7.1 Salient features
Salient features
The salient features of the private placement are as follows:
Offer price per ordinary share 100
(cents)
Par value per ordinary share (cents) 0.001
Premium per ordinary share (cents) 99.99
Number of ordinary shares offered by 30 000 000
the company for subscription in
terms of the private placement
Issue consideration to be received R30 million
by the company before expenses
Number of ordinary shares offered 35 000 000
for sale by the existing
shareholders in terms of the private
placement
Total consideration to be received R35 million
by the existing shareholders
The opening and closing dates of the private placement are as
follows:
Opening date of the private Tuesday, 11 September
placement 09:00 on 2007
Closing date of private placement at Wednesday, 12 September
12:00 on 2007
Anticipated listing date on Altx at Thursday, 20 September
commencement of trade on 2007
Note: These dates are subject to change at the discretion of the company. Any
changes will be released on SENS.
7.2 RBA holds irrevocable undertakings from various selected investors to
subscribe for, or purchase, 65 000 000 shares in terms of the private
placement, amounting to 100% of the private placement shares.
7.3 The private placement of 65 000 000 ordinary shares have been fully
allocated to the investors who have given irrevocable undertakings as set
out in paragraph 7.2 above.
7.4 The placement has not been underwritten and is not subject to a minimum
subscription, being achieved.
8. LISTING ON THE JSE
Subject to the required spread of public shareholders in terms of the
Listings Requirements being obtained pursuant to the private placement, the
JSE has approved the listing of 310 million shares on Altx with effect from
the commencement of business on Thursday, 20 September 2007. The shares
will trade under the abbreviated name "RBA" and the JSE code "RBA" and ISIN
ZAE000104154.
9. COPIES OF THE PROSPECTUS
Copies of the prospectus, in English, may be obtained during business
hours, from 11 September 2007 from the registered offices of RBA, Exchange
Sponsors (Pty) Limited and the transfer secretaries, details of which are
set out below:
- the registered office of the company - Nedbank Building, 96 Jorissen
Street, Braamfontein, 2017;
- the offices of Exchange Sponsors (Pty) Limited - 39 First Road, Hyde
Park, 2196; and
- the offices of Computershare Investor Services 2004 (Pty) Limited -
Ground Floor, 70 Marshall Street, Johannesburg, 2001.
Johannesburg
11 September 2007
Designated adviser
Exchange Sponsors (Pty) Limited
Attorneys
Webber Wentzel Bowens
Auditors and reporting accountants
Baxters Registered Accountants and Auditors
Limited assurance provider
KPMG Inc.
Date: 11/09/2007 09:15:07 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
