| Thu 18 Oct 2007, 11:18 | | WEA - W G Wearne - Reviewed Financial Results For |
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WEA
WEA
WEA - W G Wearne - Reviewed Financial Results For The Six Months
Ended 31 August 2007
W G Wearne Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005983/06)
(JSE code: WEA & ISIN: ZAE000078002)
("Wearne" or "the company")
REVIEWED GROUP INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2007
Highlights
- Revenue up 55%
- Attributable earnings up 84%
- Earnings per share up 58%
- Headline earnings per share up 57%
- Net asset value per share up 91%
Abridged income statements
Reviewed Reviewed Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28
2007 2006 February
R`000 R`000 2007
R`000
Revenue 259 107 166 942 352 500
Cost of sales (172 860) (115 952) (246 133)
Gross profit 86 247 50 990 106 367
Other income 2 164 1 740 1 789
Administration expenses (31 597) (26 200) (48 877)
Earnings before interest, tax, 56 814 26 530 59 279
depreciation and amortisation
("EBITDA")
Depreciation (13 397) (6 373) (16 484)
Profit before interest and 43 417 20 157 42 795
taxation
Net interest paid (9 452) (1 798) (6 461)
Profit before taxation 33 965 18 359 36 334
Taxation (9 692) (5 173) (10 252)
Profit attributable to 24 273 13 186 26 082
ordinary shareholders
Reconciliation of headline
earnings:
Profit attributable to 24 273 13 186 26 082
ordinary shareholders
Less IAS 16 profit on disposal (1 054) (466) (184)
of property, plant and
equipment
Headline earnings attributable 23 219 12 720 25 898
to ordinary shareholders
Weighted average shares in 145 585 131 584
issue on which earnings are 125 015
based (000)
Fully diluted weighted average 150 000 130 000 136 119
shares in issue (000) (Note)
Shares in issue at period end 150 000 130 000 150 000
(000)
Earnings per share (cents) 16.7 10.6 19.8
Headline earnings per share 16.0 10.2 19.7
(cents)
Fully diluted earnings per 16.2 10.1 19.2
share (cents)
Fully diluted headline 15.5 9.8 19.0
earnings per share (cents)
Note: In terms of the acquisition agreement of the Tzaneen quarry ("Tzaneen
quarry acquisition"), which became effective on 1 August 2007, 500 000 new
Wearne ordinary shares will be issued on 30 June 2008 and 500 000 new Wearne
ordinary shares will be issued on 30 June 2009. The 1 000 000 new Wearne
ordinary shares will be issued at 500 cents per Wearne ordinary share to the
Tzaneen vendors.
Abridged balance sheets
Reviewed Reviewed Audited
31 August 31 August 28
2007 2006 February
R`000 R`000 2007
R`000
ASSETS
Non-current assets 355 371 110 545 269 911
Property, plant and equipment 344 068 105 561 263 896
Goodwill 7 419 2 419 2 419
Unlisted investments and 3 884 2 565 3 596
associates
Current assets 117 495 92 579 82 047
Inventories 21 716 9 113 13 857
Trade and other receivables 93 952 58 657 58 708
Cash and cash equivalents 1 827 24 809 9 482
Total assets 472 866 203 124 351 958
EQUITY AND LIABILITIES
Equity 162 508 72 021 139 312
Issued capital 146 125 145
Share premium 76 232 23 457 77 462
Non-distributable reserves 68 - 19
Accumulated profits 86 062 48 439 61 686
Non-current liabilities 201 183 63 706 132 111
Environmental obligation 13 855 5 677 12 794
Secured loans 27 532 - 28 117
Instalment sale creditors 142 451 49 181 78 031
Deferred taxation 17 345 8 848 13 169
Current liabilities 109 175 67 397 80 535
Trade and other payables 51 803 50 364 51 969
Current portion of non-current 35 217 13 839 26 851
liabilities
Taxation 5 971 3 194 1 715
Bank overdraft 16 184 - -
Total equity and liabilities 472 866 203 124 351 958
Number of shares in issue 145 585 125 015 145 466
(000)
Net asset value per share 111.6 57.6 95.8
(cents)
Net tangible asset value per 106.5 55.7 94.1
share (cents)
Abridged statements of changes in equity
Reviewed Reviewed Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28
2007 2006 February
R`000 R`000 2007
R`000
Balance at beginning of period 139 312 58 760 58 760
Issue of share capital and (1 230) 15 54 040
share issue expenses
Share-based payment reserve 49 - 19
Net profit for the period 24 274 13 186 26 082
Investment fair value 103 60 411
adjustment
Balance at end of period 162 508 72 021 139 312
Abridged cash flow statements
Reviewed Reviewed Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28
2007 2006 February
R`000 R`000 2007
R`000
Cash flows from operating 2 458 19 567 39 763
activities
Cash flow from investing (97 268) (47 606) (216 939)
activities
Cash flow from financing 70 971 32 862 166 672
activities
Net increase in cash and cash (23 839) 4 823 (10 504)
equivalents
Cash and cash equivalents at 9 482 19 986 19 986
beginning of period
Cash and cash equivalents at (14 357) 24 809 9 482
end of period
OVERVIEW
The directors of Wearne are pleased to present the reviewed interim financial
results for the six months ended 31 August 2007 ("the interim period"), which
results have again exceeded expectations and delivered excellent growth.
Group revenue increased by 55.2% to R259.1 million. Turnover of aggregates
increased by 136.9% to R83.4 million and that of ready-mixed concrete
increased by 33.4% to R175.7 million.
The De Bruyn acquisition of three sand and stone quarries is now fully
incorporated into our results for the period under review. Its performance
has met our expectations and we look forward to continued growth.
The acquisition of the quarry in Tzaneen became effective on 1 August 2007.
The acquisition of the Willowsfountain Quarry (Pty) Limited assets in
Pietermaritzburg ("the Willowsfountain quarry") has not yet been completed,
due to the fact that one of the conditions precedent has not yet been met. We
anticipate that this will be completed by the end of October 2007. The
trading benefits of the quarry operations acquired in Tzaneen and
Pietermaritzburg will only be realised during the next financial period.
FINANCIAL RESULTS
Group revenue increased by 55.2% to R259.1 million (2006: R166.9 million).
Gross profit increased by 69% to R86.2 million (2006: R51.0 million). Gross
profit margins increased to 33.3%, compared to 30.5% achieved for the
comparative interim period. EBITDA grew significantly by 114.2% to R56.8
million (2006: R26.5 million). EBITDA margins increased to 21.9% (2006: 15.9%)
due to a better recovery of administrative expenses and higher volumes
achieved.
Depreciation and interest charges increased significantly during the period
under review, due to the purchase of additional plant and equipment to the
value of R95 million. This amount includes assets of R10 million that form
part of the Tzaneen quarry acquisition.
Profit attributable to ordinary shareholders of R24.3 million was achieved
against R13.2 million for the comparative interim period and headline earnings
attributable to ordinary shareholders almost doubled to R23.2 million (2006:
R12.7 million).
PROSPECTS
Wearne has been awarded a number of major contracts that should see the group
maintain revenue levels for the remainder of the year, despite the traditional
slow down during the builders` break over the festive season.
The Board is pleased to report that additional contracts to the value of R20
million have been awarded to the Group by Concor Roads, a division of Murray &
Roberts Holdings Limited, for the supply of aggregate. The group has also been
named as preferred supplier of ready-mixed concrete for the Legend Golf &
Safari Resort in Naboomspruit. The total value of the contract will be in
excess of R100 million over a five year period.
POST BALANCE SHEET EVENTS
Shareholders are advised that the acquisition of the Willowsfountain quarry in
Pietermaritzburg is not yet unconditional. It is anticipated that the
Pietermaritzburg quarry acquisition will become unconditional by the end of
October 2007 and will strategically position Wearne to expand its geographical
footprint to include KwaZulu-Natal.
DIVIDEND POLICY
In line with group policy no dividend has been declared for the period.
BASIS OF PREPARATION
The interim results have been prepared in accordance with IAS 34 (Interim
Financial Reporting). The accounting policies used to prepare these interim
financial statements are consistent with those applied in the prior interim
period and at previous year-end and are in accordance with International
Financial Reporting Standards.
These consolidated interim financial statements incorporate the financial
statements of the company, its subsidiaries and special purpose entities that,
in substance, are controlled by the group. Results of subsidiaries are
included from the effective date of acquisition or up to the effective date of
disposal. All significant transactions and balances between group enterprises
are eliminated on consolidation.
This announcement has been prepared in accordance with the Listings
Requirements of the JSE Limited.
AUDITORS` REVIEW
The auditors, Clarke and Patterson, have reviewed these interim results. A
copy of their unqualified review opinion is available for inspection at the
company`s registered office.
By order of the Board
18 October 2007
S J Wearne O J G Harvey
Chief Executive Officer Chief Financial Officer
CORPORATE INFORMATION
Non executive directors: B Mkhonto, E Moloi
Executive directors: S J Wearne (Chairman and CEO); J C Wearne; B J du Toit; O
J G Harvey
Registration number: 1994/005983/06
Registered address: Stonemill Office Park, 300 Acacia Road, Cresta, 2195
Postal address: PO Box 1422, Randfontein, 1760
Company secretary: O J G Harvey
Telephone: (011) 459 4500
Facsimile: (011) 478 5481
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited
Designated Adviser: Exchange Sponsors (Pty) Limited
These results and an overview of Wearne are available at www.wearne.co.za.
Date: 18/10/2007 11:18:03 Produced by the JSE SENS Department.
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