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SIC
SIC
SIC- Safic Holdings Limited - Audited results for the period ended 30 June 2007
Safic Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 2004/029691/06)
Share Code: SIC
ISIN Code: ZAE000088068
("SAFIC" or "the group")
Audited Results For The Period Ended 30 June 2007
HIGHLIGHTS
Headline earnings per share up 79%
EDITDA up 69%
Turnover up 12%
Consolidated balance sheet
30 June 2007 30 June
Audited 2006
Pro forma
R`000 R`000
Assets
Property, plant and equipment 24 376 16 714
Goodwill 31 232 -
Intangible Assets 728 3 252
Other financial assets 480 490
Deferred tax 427 -
57 243 20 456
Current Assets
Inventories 34 665 31 477
Trade and other Receivables 29 943 26 572
Cash and cash equivalents 10 858 4 030
75 466 62 079
Total assets 132 709 82 535
Equity and liabilities
Share capital 73 754 1
Reserves 2 482 349
Retained income 10 873 36 298
Minority interest 13 (2 766)
Capital and reserves 87 122 33 882
Liabilities
Non-current liabilities
Loans from shareholders 279 3 963
Other financial liabilities 3 729 7 933
Deferred tax 2 106 419
6 114 12 315
Current liabilities
Other financial liabilities 710 3 039
Current tax payable 2 906 1 168
Operating lease liability 212 -
Trade and other payables 32 424 28 013
Provisions 2 463 1 524
Shareholders loans 738 -
Dividend payable - 350
Bank overdraft 20 2 244
39 473 36 338
Total equity and liabilities 132 709 82 535
Number of shares in issue 75 186 521 60 186 521
Net asset value per share (cents) 116 56
Tangible net asset value per share (cents) 73 51
Consolidated income statement
Year ended Year ended
30 June 2007 30 June 2006
Audited Pro forma
R`000 R`000
Revenue 210 199 188 053
Gross profit 114 049 104 193
Other income 1 257 1 171
Operating costs 97 471 94 810
Earnings before interest, tax, depreciation 17 835 10 554
and amortisation
Depreciation and amortization 2 838 3 053
Profit before interest and taxation 14 997 7 501
Net interest paid 410 491
Profit before taxation 14 587 7 010
Taxation 3 832 1 553
Profit for the period 10 755 5 457
Minority interest (loss) (49) (297)
Net profit for the period 10 804 5 754
Reconciliation of headline earnings
Profit attributable to ordinary shareholders 10 804 5 754
Adjusted for profit on disposal of property, 337 177
plant and equipment
Fairvalue adjustment 319 -
Impairment reversal - (352)
Headline earnings attributable to ordinary 11 460 5 579
shareholders
Weighted average number of shares in issue 69 186 521 60 186 521
(1)
Basic earnings per share (cents) 15.62 9.56
Headline earnings per share (cents) 16.56 9.27
Note:
1) The reviewed weighted average number of shares in issue is also used for
the comparative figures in order to reflect a more meaningful comparative
by taking into account the effect of the capital restructurings undertook
during the listing in November 2006 on the earnings per share
calculations.
Consolidated cash flow statement
Year ended Year ended
30 June 2007 30 June 2006
Audited Pro forma
R`000 R`000
Cash flows from operating activities 10 814 (16 340)
Cash generated from operations 14 638 (15 219)
Interest received 544 162
Interest paid (954) (491)
Taxation paid (1 981) (792)
Expenses recognised directly in equity (1 433) -
Cash flows from investing activities (5 286) 7 732
Acquisition of property, plant and equipment (8 111) (2 990)
Proceeds on disposal of property plant and 1 124 148
equipment
Proceeds on disposal of investment property - 1 286
Purchase of intangible assets (236) (3 251)
Business combinations 1 787 9 678
Sale of financial assets 150 -
Goodwill on purchase of business - 2 861
Cash flows from financing activities 5 310 13 440
Loans raised - 9 825
Proceeds on share issue 15 000 1
Movement in long term liability (7 901) -
Loans to group companies repaid - 561
Shareholder`s loans (repaid) / raised (1 789) 3 953
Dividends paid - (900)
Cash flows for the period 10 838 4 832
Cash and Cash equivalents at beginning of - (3 046)
period
Cash and Cash equivalents at end of period 10 838 1 786
Segment Report
For the 12 month period ended 30 June 2007
R`000 Environmental Infrastructural Elimination Combination
Solutions Development
Revenue 74 990 148 693 (13 484) 210 199
Operating profit 3 026 12 503 (532) 14 997
Finance costs (682) (497) 769 (410)
Income taxes (1 129) (2 703) - (3 832)
Minority interest 49
Profit for the 10 804
period
Segment assets 96 259 75 710 (39 260) 132 709
Segment liabilities 54 351 30 496 (39 260) 45 587
Capital expenditure 5 525 2 585 8 110
Depreciation and 953 1 884 2 837
amortization
Statement of changes in equity
For the 12 month period ended 30 June 2006 (2)
Share Share NDR Accumulated Minority Total
capital premium profit interest R`000
R`000 R`000 R`000
Balance at 1 July 14 535 14 535
2005
Share Issue 1 1
Business 17 259 (2 468) 14 791
combinations
Non-distributable 349 349
reserve
Profit for the 5 754 (298) 5 456
year
Dividends (1 250) (1 250)
Balance at 30 June 1 349 36 298 (2 766) 33 882
2006
For the 12 month period ended 30 June 2007
Share Share Total share Share option Revaluation
capital premium capital revaluation reserve
R`000 R`000 R`000 reserve
Balance at 1 0 - - - -
July 2006
Profit for
the year
Share Issue 1 75 186 75 187
Share premium (1 433) (1 433)
expenses
Revaluation 3 034
of land and
buildings
Deferred tax (821)
on
revaluation
Depreciation (50)
recognised
directly in
Equity
Minority
interest at
acquisition
reserves
Share option 319
reserve
Total changes 1 73 753 73 754 319 2 163
Balance at 30 1 73 753 73 754 319 2 163
June 2007
Continued:
Retained Total Minority Total equity
income attributable interest
to equity
holders of
the group /
company
Balance at 1 July 2006 - - - -
Profit for the year 10 804 10 804 (49) 10 755
Share Issue 75 187 75 187
Share premium expenses (1 433) (1 433)
Revaluation of land and 3 034 3 034
buildings
Deferred tax on (821) (821)
revaluation
Depreciation recognised 69 19 19
directly in Equity
Minority interest at 62 62
acquisition reserves
Share option reserve 319 319
Total changes 10 873 87 109 13 87 122
Balance at 30 June 2007 10 873 87 109 13 87 122
Note:
2) The statement of changes in equity for the 12 month period ended 30 June
2006 has been included for information purposes only as these figures
refer to a period prior to the establishment of the group.
INTRODUCTION
The directors are pleased to announce the annual financial results of Safic
Holdings Limited for the year ended 30th June 2007 ("the year"), following the
successful listing of the company in November 2006 on the Alternative Exchange
("AltX") of the JSE Ltd.
The results exceeded those of the previous financial year as well as the
forecasts in the listing prospectus ("the listing forecasts"). Although all
indicators are significantly up, it is important to note that this growth is
solely the result of the organic growth and performance of the company as
listed. During the period, no acquisitive announcements were made and the
growth in the company can be compared effectively against the listing
prospectus.
All key performance indicators are ahead of forecast.
Revenue up 12%
EBIDTA up 69%
PBIT up 100%
Earnings per share up 63%
Headline earnings per share up 79%
HEPS increase over listing forecast 26%
REVIEW OF OPERATIONS
SAFIC has continued its strategy of exploiting synergies within the group
companies while selectively growing revenue. Sustainable growth has been the
cornerstone of the group`s performance during the period under review. Thriving
market conditions continue to see demand for the product offering grow while
strict attention to cost control and operational efficiency has made a
significant contribution to the increased profitability.
FINANCIAL RESULTS
The group has achieved an attributable profit of R10.8 million for the year
ended 30th June 2007. This is 88% up on the previous corresponding period and
19% up on the forecast as outlined in the listing prospectus. On a turnover
growth of 12%, the group has increased profitability by 88%. EBITDA margin
increased from 5.6% to 8.5% over this period, this compared to 7.5% presented
in the forecast. Headline earnings of 16.56c per share has exceeded the
forecast of 13.13c by 26% and is up 79% year on year.
OPERATIONAL REVIEW
During the period under review, Infrastructural Development, flooring has still
been the major contributor towards both the revenue and the profitability of
the group. The full impact of the anticipated Government infrastructure spend
has not yet been felt and the increased spend in the construction sector has
only marginally impacted on the results for the period under review. All
indications point towards a steady increase in the demand for flooring products
with a substantial revenue increases anticipated for the next financial year.
Major projects awarded to FloorworX Africa include Baragwanath Hospital, 1
Military Hospital, Tempe Military Base, Daimler Chrysler, Truro House,
University of Westville, Nelspruit Archives, Wits University and Pretoria
Academic Oncology.
The chemical division, Environmental Solutions, has seen a substantial increase
in profitability due to an operational restructuring process. The period under
review has seen the successful entry into the chemical tender business with
major contracts awarded by the Gauteng Shared Services Centre and Anglo
Platinum chemical tenders.
The retail division, which has underperformed during the period under review
has effectively been restructured and the signing of a licensing agreement to
launch a domestic range of chemical products using the well know Madam & Eve
brand will provide the Retail division with a more diversified product range in
the new financial year.
PROSPECTS
Buoyant market conditions continue to drive demand for the group`s flooring
products and management expects demand to increase over the next financial
year. A number of markets are also opening in Africa due to focused export
efforts. Ongoing focus from management on cost control and operational
efficiency should see further improvements in operating margins.
The focus on previously ignored tender and contractual business within the
chemical division has already started to bear fruit and a substantial increase
in revenue is anticipated within the next financial year. This coupled with
increased efficiency and cost management initiatives should see this division
becoming a substantial contributor to both revenue and profit during the coming
period.
The retail range of Madam & Eve household products to be launched under the
Magicmaid brand has captivated the retail industry and management is confident
that this will greatly improve the profitability of the retail division within
the next financial year with the full impact of this strategy being forecast
for the year ending 2009.
DIVIDENDS
No dividends have been declared for this reporting period.
CHANGES TO CAPITAL STRUCTURE
The group listed on the Altx on 23 November 2006. Prior to the listing the
group issued and sold 15 000 000 shares in a private placement. The 15 000 000
shares with a par value of 0.001 cents were issued at R1.00 per share.
BASIS OF PREPARATION
The annual financial statements have been prepared in accordance with
International Financial Reporting Standards and the Companies Act of South
Africa, 1973. The accounting policies used to prepare these financial
statements are consistent with those applied in previous financial years except
for the adoption of the revaluation model of Land and Buildings as allowed by
IAS16.
Comparative figures have been presented for illustrative purposes only as
historical audited financial statements for the group are not available due to
the fact that the group listed on the 23rd November 2006 as a consolidated
group.
AUDIT REPORT
The annual financial statements have been audited by PKF Inc. The auditor`s
unqualified audit report is available for inspection at the Company`s
registered office
APPRECIATION
The board would like to take this opportunity to thank the various management
teams for their loyalty and dedication towards the achievement of the
objectives that has been set. The milestone objective of listing on the Altx
has been achieved through commitment and hard work. The board would also like
to thank its business partners, advisors and suppliers, and most importantly
the shareholders for their ongoing support and faith in the group.
By order of the Board
21 September 2007
F C Platt A J Voogt
Chief Executive Officer Financial Director
CORPORATE INFORMATION
Non executive directors: M D C Motlatla
M E Dipico
Executive directors: F C Platt
A J Voogt
Dr. D E Platt
Registration number: 2004/029691/06
Registered address: 32 Steele Street
Steeledale
2197
Postal address: P.O. Box 1754
Alberton
1450
Company secretary: G W Delport
Telephone: 0860 4 72342
Facsimile: 06861 4 72342
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited
Designated Adviser: Exchange Sponsors (Pty) Limited
Date: 26/09/2007 11:14:01 Produced by the JSE SENS Department.
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