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ELR ELRP
ELR
ELR/ELRP - ELB Group Limited - Reviewed group provisional report for the year
ended 30 June 2007 and dividend announcement
ELB GROUP LIMITED (ELB)
Incorporated in the Republic of South Africa
Registration number 1930/002553/06
Share codes: ELR & ELRP
ISIN: ZAE000035101 & ZAE000035333
REVIEWED GROUP PROVISIONAL REPORT FOR THE YEAR ENDED 30 JUNE 2007 AND DIVIDEND
ANNOUNCEMENT
COMMENTS
INTRODUCTION
ELB is an investment holding company owning 85 per cent of ELB Engineering
Limited (ELB Engineering). ELB Engineering currently comprises ELB Equipment,
ELB Engineering Services and Ditch Witch Australia.
A decision was made to discontinue the ELB Timbers business with effect from 31
December 2006.
FINANCIAL RESULTS
The ELB Group saw sales from continuing operations increase from R591 million in
2006 to R 900 million in 2007 and headline earnings from continuing operations
increase from R24,9 million in 2006 to R49,3 million in 2007.
ELB Equipment saw turnover increase from R452 million in 2006 to R609 million in
2007, ELB Engineering Services saw turnover increase from R53 million in 2006 to
R180 million in 2007 and Ditch Witch Australia saw turnover increase from R85
million in 2006 to R114 million in 2007.
The closure of ELB Timbers is proceeding according to plan and based on current
information no further material losses are expected during closure.
PROSPECTS
The ELB Group is well positioned to benefit from both the ongoing infrastructure
spend in Southern Africa and Australia as well as the increase in capacities and
efficiencies being implemented by the global resources and power industry
sectors. This will be enhanced by the continued growth and development of our
know how and skills base.
ACCOUNTING POLICIES
Accounting policies accord with the South African Companies Act and
International Financial Reporting Standards (IFRS),including IAS 34, and are
consistent with those applied in the financial year ended 30 June 2006.
DIRECTORATE
During the year Messrs Guy Smith and John Hall having reached mandatory
retirement age retired as directors of ELB. Their committed service and
outstanding contributions over the years is much appreciated.
REVIEW BY THE INDEPENDENT AUDITOR
KPMG Inc, the company`s independent auditor, has reviewed the provisional
financial statements contained in this provisional report and has expressed an
unmodified conclusion on the provisional financial statements. The review report
is available for inspection at the company`s registered office.
DIVIDENDS
The final dividend has been increased from 10 cents in 2006 to 20 cents in 2007
reflecting the Boards confidence in the prospects for the ELB Group going
forward.
The total dividend for the year is therefore 30 cents per share versus 15 cents
per share for the 2006 financial year.
On behalf of the Board
A G Fletcher
Chairman
Boksburg
25 September 2007
GROUP INCOME STATEMENT
Reviewed Audited
Year Year
ended ended
30 Jun 07 30 Jun 06
R 000 R 000
Continuing operations
Sales revenue 899 650 590 717
Operating costs excluding depreciation (817 512) (552 077)
Operating profit before depreciation and 82 138 38 640
abnormal items
Depreciation (3 499) (2 433)
Operating profit before abnormal items 78 639 36 207
Abnormal items as detailed below: expense - (1 781)
Profit from operations 78 639 34 426
Interest received 12 100 6 525
Interest paid (5 404) (4 689)
Profit before tax 85 335 36 262
Income tax expense (27 618) (11 896)
Profit from continuing operations 57 717 24 366
Discontinued operations
Loss from discontinued operations as (19 067) (22 487)
detailed below
Profit for the year 38 650 1 879
Attributable to:
Ordinary shareholders of ELB 30 386 1 871
Minority interest 8 264 8
38 650 1 879
ABNORMAL ITEMS (continuing operations)
Operating item
Relocation of operation - (931)
Capital item
Restructure of ELB operations incorporating - (850)
the introduction of BEE partners
Abnormal items from continuing operations: - (1 781)
expense
LOSS FROM DISCONTINUED OPERATIONS
Loss from operations before items listed (15 243) (12 422)
below
Relocation of operation - ( 400)
Impairment of non current assets - (9 648)
Impairment of non current assets - reduction - 983
of deferred tax liability
Retrenchment and other discontinuance costs (3 824) (1 000)
Loss from discontinued operations (19 067) (22 487)
DETERMINATION OF GROUP HEADLINE EARNINGS
Reviewed Audited
Year Year
ended ended
30 Jun 07 30 Jun 06
R 000 R 000
Profit attributable to ordinary shareholders 30 386 1 871
of ELB per the income statement
Deduct: Capital items as detailed below: (3 645) (10 208)
Continuing operations:
Profit on disposal of plant and equipment:
Included in operating profit before abnormal 202 375
items
Capital item detailed in the income
statement:
Restructure incorporating the introduction - (850)
of BEE partners
Discontinued operations:
Profit on disposal of plant and equipment 60 41
Impairment of non current assets - (9 648)
Impairment of non current assets - reduction - 983
of deferred tax liability
Retrenchment and other discontinuance costs (3 824) (1 000)
Income tax effects of capital items (61) (109)
Minority interest in capital items (22) -
Headline earnings 34 031 12 079
Weighted average number of shares (excluding 27 246 27 315
treasury shares) on which basic earnings per
share are based (000`s)
Headline earnings of continuing operations
per ordinary share (cents)
- basic and fully diluted 181.1 91.3
Headline earnings per ordinary share (cents)
- basic and fully diluted 124.9 44.2
Earnings per ordinary share (cents)
- basic and fully diluted 111.5 6.8
Dividends declared for the year per ordinary 30 15
share (cents)
GROUP BALANCE SHEET
Reviewed Audited
30 Jun 07 30 Jun 06
R 000 R 000
ASSETS
Non current assets 34 674 37 118
Property, plant and equipment 26 662 29 687
Deferred tax assets 8 012 7 431
Current assets 517 067 486 766
Inventories and construction contracts in 210 098 231 382
progress
Receivables and other current assets 66 209 98 127
Income tax recoverable 62 382
Assets of discontinued operations held for 31 522 5 337
disposal
Cash and cash equivalents 209 176 151 538
Total assets 551 741 523 884
EQUITY AND LIABILITIES
Attributable to ordinary shareholders of ELB 192 982 162 061
Issued capital 25 192 25 192
Treasury shares (23 215) (24 098)
Reserves (6 208) (11 315)
Retained earnings 197 213 172 282
Preference shares 8 8
Total equity attributable to equity holders 192 990 162 069
of ELB
Minority interest 9 830 665
Total equity 202 820 162 734
Non current liabilities 7 201 9 613
Interest bearing borrowings 5 768 9 613
Deferred tax liabilities 1 433 -
Current liabilities 341 720 351 537
Non interest bearing payables and other 221 707 246 851
current liabilities
Interest bearing payables 90 142 94 954
Income tax payable 18 478 7 904
Liabilities of discontinued operations held 11 393 1 828
for disposal
Total equity and liabilities 551 741 523 884
Ordinary shares in issue (000`s) 33 860 33 860
Deduct: Treasury shares in issue (000`s) 6 454 6 708
Ordinary shares in issue on which net asset 27 406 27 152
value per share is calculated
Net asset value per share (cents) 704 597
Capital commitments
At 30 June 2007 there were capital commitments of R 14 868 000 (30 June 2006 - R
649 000)
Contingent liabilities
ELB Engineering Services operates in the engineering contracting business and is
exposed to the risks associated with engineering contracts. These risks are
managed on the basis of limited liability. All known liabilities of the group
have been accrued and the directors were not aware of any contingent liabilities
requiring possible additional accruals.
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to ordinary shareholders of ELB
Issued Treasury Retained
capital shares Reserves earnings Total
R 000 R 000 R 000 R 000 R 000
Balance at 30 June 2005 25 192 (23 366) (13 721) 173 136 161 241
Profit for the year 1 871 1 871
Foreign currency 2 406 2 406
translation adjustments
for foreign operations
Total recognised income - - 2 406 1 871 4 277
and expense for the year
Ordinary dividends paid (2 725) (2 725)
The ELB Participants
Share Trust
Additional shares (1 006) (1 006)
acquired
Share incentive trusts
Paid up shares released 274 274
by the trusts
Acquisition of 15%
interest in ELB
Engineering Limited by
the ELB
Educational Trust for
Historically
Disadvantaged South
Africans
Total changes for the - (732) 2 406 (854) 820
year
Balance at 30 June 2006 25 192 (24 098) (11 315) 172 282 162 061
Profit for the year 30 386 30 386
Foreign currency 5 107 5 107
translation adjustments
for foreign operations
Total recognised income 5 107 30 386 35 493
and expense for the year
Ordinary dividends paid (5 455) (5 455)
ELB Share Incentive
Trust
Paid up shares released 883 883
by the trust
Total changes for the - 883 5 107 24 931 30 921
year
Balance at 30 June 2007 25 192 (23 215) (6 208) 197 213 192 982
GROUP STATEMENT OF CHANGES IN EQUITY CONTINUED:
Reviewed
Preference Minority Total
shares interest equity
R 000 R 000 R 000
Balance at 30 June 2005 8 207 161 456
Profit for the year 8 1 879
Foreign currency translation 2 406
adjustments for foreign operations
Total recognised income and expense - 8 4 285
for the year
Ordinary dividends paid (2 725)
The ELB Participants Share Trust
Additional shares acquired (1 006)
Share incentive trusts
Paid up shares released by the trusts 274
Acquisition of 15% interest in ELB
Engineering Limited by the ELB
Educational Trust for Historically
Disadvantaged South Africans 450 450
Total changes for the year - 458 1 278
Balance at 30 June 2006 8 665 162 734
Profit for the year 8 264 38 650
Foreign currency translation 901 6 008
adjustments for foreign operations
Total recognised income and expense - 9 165 44 658
for the year
Ordinary dividends paid (5 455)
ELB Share Incentive Trust
Paid up shares released by the trust 883
Total changes for the year - 9 165 40 086
Balance at 30 June 2007 8 9 830 202 820
GROUP CASH FLOW STATEMENT
Reviewed Audited
Year Year
ended ended
30 Jun 07 30 Jun 06
R 000 R 000
Cash inflow from operating activities before 75 240 58 801
dividends paid
Dividends paid (5 455) (2 725)
Cash inflow from operating activities 69 785 56 076
Cash outflow from investment activities (7 106) (10 860)
Cash (outflow) / inflow from financing (2 944) 2 856
activities
Increase in cash and cash equivalents 59 735 48 072
Cash and cash equivalents at the beginning 151 538 103 466
of the year
Cash and cash equivalents at the end of the 211 273 151 538
year
Held by:
Continuing operations 209 176 151 538
Discontinued operations - assets held for 2 097 -
disposal
211 273 151 538
SEGMENT ANALYSIS
Reviewed Audited
Year Year
ended ended
30 Jun 07 30 Jun 06
R 000 R 000
Segment revenue
Continuing operations
ELB Engineering 899 650 590 717
Discontinued operations
ELB Timbers 83 711 102 964
Total 983 361 693 681
Segment results
Headline earnings / (loss)
Continuing operations
ELB Engineering 49 007 27 659
ELB Group non segmental income / (expense) 327 (1 786)
Continuing operations before items listed 49 334 25 873
below
ELB Engineering
Abnormal operating item
Relocation of operation - (931)
Headline earnings of continuing operations 49 334 24 942
Headline loss of discontinued
operations
ELB Timbers (15 303) (12 863)
Headline earnings attributable to ordinary 34 031 12 079
shareholders of ELB
Capital items
Continuing operations 119 (584)
Discontinued operations (3 764) (9 624)
Profit attributable to ordinary shareholders 30 386 1 871
of ELB
DIVIDENDS
The directors have declared the following final dividends for the year ended 30
June 2007.
PREFERENCE DIVIDEND NUMBER 113
A final dividend has been declared at the rate of 6% per annum for the second
six month period on the 6% fixed cumulative redeemable preference shares of R2
each, equivalent to 6 cents per share.
ORDINARY DIVIDEND NUMBER 119
A final dividend of 20 cents per share has been declared on the ordinary shares.
The salient dates in respect of both dividends are:
Last day to trade cum dividend Friday, 12 October 2007
Shares commence trading ex dividend Monday, 15 October 2007
Record date Friday, 19 October 2007
Date of payment Monday, 22 October 2007
Shares certificates may not be dematerialised or rematerialised between Monday,
15 October 2007, and Friday, 19 October 2007, both dates inclusive.
By order of the Board
DG Jones
Secretary
Boksburg
25 September 2007
REGISTERED OFFICE
ELB Equipment
14 Atlas Road
Anderbolt
Boksburg
1459
SHARE TRANSFER SECRETARIES
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street
Johannesburg
2001
(PO Box 61051, Marshalltown, 2107)
SPONSOR
Rand Merchant Bank (a division of FirstRand Bank Limited)
1 Merchant Place
cnr Fredman Drive and Rivonia Road
Sandton
2196
DIRECTORS
AG Fletcher (chairman)
PJ Blunden (chief executive - ELB Equipment)
T de Bruyn*
Dr JP Herselman*
Dr SJ Meijers (chief executive - ELB Engineering Services)
MV Ramollo
*Non executive
Date: 25/09/2007 14:00:01 Produced by the JSE SENS Department.
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