| Mon 17 Sep 2007, 10:58 | | SKY - Sea Kay - Audited maiden abridged results fo |
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SKY
SKY
SKY - Sea Kay - Audited maiden abridged results for the year ended 30 June 2007
and renewal of cautionary
Sea Kay Holdings Limited
(formerly Pilvest CO 1 (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2006/004967/06)
JSE Code: SKY ISIN: ZAE000102380
("Sea Kay")
AUDITED MAIDEN ABRIDGED RESULTS FOR THE YEAR ENDED 30 JUNE 2007 AND RENEWAL OF
CAUTIONARY
Introduction
The directors of Sea Kay are pleased to announce the group`s maiden results as a
listed entity for the year ended 30 June 2007. Sea Kay listed on 16 August 2007.
The results only include trading activities for the six month period ended 30
June 2007 as prior to this period, Sea Kay was a dormant company which, on 1
January 2007, acquired its two (wholly owned) subsidiaries, namely Sea Kay
Engineering Services (Pty) Ltd and Seriso 474 (Pty) Ltd.
No comparative figures are therefore presented.
CONSOLIDATED INCOME STATEMENT for the year ended 30 June 2007
2007
Audited
R000
Revenue 250,301
Cost of sales (183,725)
Gross profit 66,576
Operating costs (17,585)
Depreciation (1,050)
Interest income 2,369
Finance costs (4,882)
Profit before taxation 45,428
Taxation (4,318)
Profit after taxation 41,110
Segment reporting
The reporting of segment information is not applicable in the group, however, it
has been included for information purposes:
Construction Manufacturing
Total
R000 R000 R000
Revenue to external 246,158 4,143 250,301
parties
Inter segment revenues - 13,727 13,727
Total revenue 246,158 17,870 264,028
Profit after taxation 39,114 1,996 41,110
2007 Estimate
per pre-
listing
2007 statement
Audited R000
R000
Headline earnings 41,110 31,316
Weighted average number of shares 326,653 326,653
Basic earnings per share (cents) 12,59 9,58
Headline earnings per share (cents) 12,59 9,58
Diluted earnings per share (cents) 12,59 9,58
Note: Profit after taxation equals headline earnings.
CONSOLIDATED BALANCE SHEET at 30 June 2007
2007
Audited
R000
ASSETS
Non-current assets 88,579
Property, plant and equipment 10,991
Goodwill 77,588
Current assets 146,592
Inventories 9,940
Trade and other receivables 121,698
Other financial assets 573
Taxation receivable 1,050
Construction contracts and receivables 12,184
Cash and bank balances 1,147
Total assets 235,171
EQUITY AND LIABILITIES
Total equity 144,816
Issued capital 106,536
Retained earnings 38,280
Non-current liabilities 19,259
Other financial liabilities 13,243
Finance lease 3,120
Deferred taxation 2,896
Current liabilities 71,096
Trade and other payables 45,900
Other financial liabilities 3,185
Borrowings 10,761
Finance lease 1,909
Provisions 747
Bank overdrafts 8,594
Total equity and liabilities 235,171
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2007
Share
capital and
premium Retained Total
Income Equity
R000 R000 R000
Balance at 30 June 2006 - - -
Shares issued prior to 106,536 106,536
listing
Ordinary dividends - (2,830) (2,830)
Profit for the year - 41,110 41,110
Balance at 30 June 2007 106,536 38,280 144,816
CONSOLIDTED CASH FLOW STATEMENT FOR the year ended 30 June 2007
2007
Audited
R000
Cash flows from operating activities (54,466)
Cash utilised in operating activities (48,054)
Net finance costs (2,477)
Taxation paid (3,935)
Cash utilised in investment activities 17,669
Property, plant and machinery acquired (12,283)
Sale of property, plant and equipment 67
Investments in subsidiaries 29,885
Cash flows from financing activities 29,350
Long term liabilities raised 32,180
Ordinary dividends paid (2,830)
Decrease in cash and cash equivalents (7,447)
Cash and cash equivalents at beginning of year -
Cash and cash equivalents at end of year (7,447)
Details of acquisitions of subsidiaries
Sea Kay
Engineering Seriso 474
Services (Pty) Ltd
(Pty) Ltd
R000 R000
Acquisition date 01/01/2007 01/01/2007
% voting equity 100 100
Cost of acquisition 94,485 10,000
Number of shares issued 135,644 14,356
Fair value of equities 94,485 10,000
Profit since acquisition (1 January - 30 39,114 1,996
June 2007)
Revenue for 12 months (1 July 2006 - 30 360,640 26,048
June 2007)
Profit for 12 months - (1 July 2006 - 30 49,815 2,772
June 2007)
Basis of preparation
The results have been prepared in terms of International Financial Reporting
Standards ("IFRS") in terms of the company`s current accounting policies. These
abridged financial statements have been compiled in compliance with IAS34.
Results
Headline earnings of R41,1 million (12,59 cents per share) was achieved for the
period ended 30 June 2007, exceeding the earnings estimate contained in the pre-
listing statement (9,58 cents per share) by 31%. The increase is attributable
to a reduced tax charge. The reduction in the tax charge is as a result of the
application of section 24C of the Income Tax Act on allowances for construction
contracts.
Included in operating cost is a bad debt provision of R3,3 million as the
recoverability of it is uncertain.
Sea Kay Engineering Services (Pty) Ltd, the main operating subsidiary of the Sea
Kay group, increased its revenue by more than 100% compared to the prior year on
the back of increased Government and private sector spending. Earnings before
interest, taxation, depreciation and amortisation ("EBITDA") increased by 125%,
with an increase of 1,25% on the EBITDA margin.
Capital expenditure and depreciation for the year ended 30 June 2007
2007
Audited
R000
Capital expenditure for the year 12,282
Depreciation for the year 1,050
Capital expenditure committed or authorised for 2008 19,500
Year under review
The Sea Kay group is focused on development of construction of subsidised (RDP),
affordable (Gap-Credit linked) and bonded mass housing schemes for Government,
financial institutions, mines and private clients. In the period under review
Sea Kay completed the R153 million Xstrata housing project in Steelpoort.
Sea Kay also completed the construction of 51 computer centres at various
schools throughout Gauteng. This project was undertaken for Pinnacle Micro as
part of the Gauteng-Online initiative to uplift computer literacy in schools.
Work has commenced on the Olievenhoutbosch Ministerial Housing Project for Absa
Bank comprising 3,000 units situated in Centurion, and is 60% complete.
Work has commenced on the N2 Delft Symphony Housing project in Cape Town. The
first phase of 2,374 houses is under construction. Other projects currently
under construction include Pennyville Soweto, Thorntree View Tswane, as well as
Kanana and Everton in Sedibeng. The Ibuyile Development Consortium (of which Sea
Kay held a 45% share during the period) completed the design and construction of
6,245 residential erven in Delft Symphony as part of the N2 Gateway project.
Prospects
As at 30 June 2007, the group`s 12 month forward construction order book is R598
million. Government and financial institution-led initiatives should inevitably
result in strong, sustainable demand for the services provided by Sea Kay as is
evident from Government`s announced housing budget of R248 billion. It is
Government`s stated intent to house 2,2 million people by 2014. In addition,
financial institutions continue to increase their spending in housing
development market and have earmarked approximately R42 billion for this sector.
The future outlook for the group remains exceptionally buoyant. Government and
private sector (especially the banking sector) spending on housing and
infrastructure is higher than any prior period in the country`s history.
Sea Kay intends to continue its growth both organically and acquisitively should
appropriate opportunities arise. The forthcoming financial year will see Sea
Kay growing its supply chain in terms of the potential acquisition and
development of building materials, innovative products and complementary
construction related services. Sea Kay`s current Construction Industry
Development Board (CIDB) rating is 8. Sea Kay will apply for a 9 rating in the
near future as all necessary criteria have been fulfilled. This will allow the
business to bid on projects with a value in excess of R100 million.
Sea Kay has recently established a property development company and secured
three projects namely Thorntree View in Tswane for 300 credit linked housing
units, 200 bonded units in Beverly Hills (Sedibeng) and 1,333 credit linked
units in Delft Symphony. These contracts are at better margins than the
traditional home building construction business. It is anticipated that Sea Kay
Property Development will enjoy good growth in the medium- to long-term.
Dividends
The board has reviewed the current period`s results together with the forecast
for 2008 and has decided not to declare a dividend. Cash generated by the
business is to be invested in the continued growth of Sea Kay`s activities.
Acquisition
Sea Kay has acquired an additional 45% profit share in The Ibuyile Development
Consortium ("Ibuyile") for a cash consideration of R28 million, resulting in a
90% profit share in Ibuyile.
As a result of this agreement the future construction opportunities and profit
growth for the group on the N2 Gateway project should increase substantially.
The potential development profit on certain aspects of the N2 Gateway project
will also improve margins for the Sea Kay group. As a result of this
acquisition a revised profit forecast for the year ending 30 June 2008 will be
published in due course.
Audit opinion
SAB&T Inc has signed an unqualified audit opinion on the annual financial
statements. These financial statements have been approved by the board and
abridged for the purposes of this report. The auditors have reviewed the
abridged financial statements. Both the auditors` opinion and the annual
financial statements are available for inspection at the company`s registered
office as well as being posted on the company`s website.
Directors
On 20 July 2007 the following directors were appointed:
MH Lomas(Chairman)
HSP Mashaba
C Kruger
P van der Schyf
K van der Vyver
BW Marais
Post balance sheet events
The company listed on the JSE Limited on 16 August 2007. Capital of R47,9
million was raised.
Further cautionary announcement
Shareholders are reminded of the cautionary announcement issued on 6 September
2007 in which shareholders were advised that Sea Kay has entered into
negotiations which, if successfully concluded, may have a material effect on the
price of its securities. Shareholders are accordingly advised to continue to
exercise caution when dealing in the company`s securities until a further
announcement is made.
For and on behalf of the Board
MH Lomas (Chairman)
17 September 2007
Registered office and postal address:
7 Patton Road, Duncanville, Vereeniging, 1930
PO Box 925, Meyerton, 1960
Website: www.seakay.co.za
Directors:
MH Lomas# (Chaiman), C Kruger (Group CEO), K van der Vyver (Group Financial
Director), P van der Schyf, HSP Mashaba#, BW Marais#
*independent non-executive, # non-executive
Company secretary:
MN Hattingh
Transfer secretaries:
Link Market Services South Africa (Proprietary) Limited
Auditors
SAB&T Inc, Registered Auditors, Chartered Accountants (SA)
Sponsor
Ernst & Young Sponsors (Proprietary) Limited
Date: 17/09/2007 10:58:27 Produced by the JSE SENS Department.
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