| Wed 31 Oct 2007, 10:14 | | TFX - Top Fix Holdings - Reviewed Results for the |
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TFX
TFX
TFX - Top Fix Holdings - Reviewed Results for the year ended 30 June 2007
TOP FIX HOLDINGS LIMITED
(formerly Nutcreek Investments (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2006/011359/06)
JSE code: TFX
ISIN: ZAE000088423
("Top Fix" or "the Group")
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2007
INCOME STATEMENT
R`000 *Pro forma
Year ended Year ended
30 June 30 June
2007 2006
Turnover 192 580 163 158
Cost of sales (141 326) (112 196)
Gross profit 51 254 50 962
Net operating expenses (37 286) (25 018)
Operating profit 13 968 25 944
Net Interest Paid (2 273) (2 441)
Profit before taxation 11 695 23 503
Taxation (3 251) (7 350)
Profit for the year 8 444 16 153
Shares in issue (`000) 185 000 160 000
Weighted average shares in issue
issue (`000)
- Basic 174 110 160 000
- Fully diluted 174 110 160 000
Earnings per share/headline earnings
per share (cents)
- Basic 4.8 10.1
- Fully diluted 4.8 10.1
BALANCE SHEET
R`000 30 June 30 June
2007 2006
ASSETS
Non-current assets 117 602 79 126
Property, plant and equipment 58 999 20 802
Intangible assets 58 014 58 014
Deferred taxation asset 589 310
Current assets 52 254 41 894
Inventories 1 710 5 773
Accounts receivable 48 683 36 035
Bank and call deposits 1 861 86
TOTAL ASSETS 169 856 121 020
EQUITY AND LIABILITIES
Shareholders` equity 106 031 74 126
Non-current liabilities 7 442 5 709
Interest bearing debt 4 163 2 333
Deferred taxation liability 3 279 3 376
Current liabilities 56 383 41 185
Interest bearing debt 13 153 10 997
Accounts payable and provisions 34 584 23 617
Taxation 8 646 6 571
TOTAL EQUITY AND LIABILITIES 169 856 121 020
Net asset value per share (cents) 57.3 46.3
Net tangible asset value per share (cents) 26.0 10.1
CASH FLOW STATEMENT
R`000 Year ended Year ended
30 June 30 June
2007 2006
Cash generated by operations 19 544 -
Net Interest Paid (2 273) -
Taxation paid (1 648) -
Cash flow from operating activities 15 623 -
Cash flow from investing activities (41 979) (8 200)
Investment in new operations - (8 200)
Investment in property, plant and
equipment (41 979) -
Cash flow from financing activities 24 876 (124)
Shareholder funding 23 461 (124)
Movement in loans receivable 826
Increase in interest bearing liabilities 589 -
Decrease in net cash (1,480) (8,324)
Cash and cash equivalents at beginning of year (8,324) -
Cash and cash equivalents at end of year (9,804) (8,324)
Net borrowings (9 804) (8 324)
Bank and call deposits 1 861 86
Bank overdrafts and debtors discounting (11 665) (8 410)
STATEMENT OF CHANGES IN EQUITY
R`000 Year ended Year ended
30 June 30 June
2007 2006
Equity at beginning of year 74 126 -
Share issues 23 461 74 126
Attributable profit for the year 8 444 -
Equity at end of year 106 031 74 126
SEGMENT ANALYSIS
R`000 *Pro forma
Year ended Year ended
30 June 30 June
2007 2006
Turnover
Scaffolding 51 307 77 177
Personnel outsourcing 136 845 81 089
Safety surveillance 7 284 4 892
Internal/head office/consolidation (2 856) -
Total Group 192 580 163 158
Operating income
Scaffolding (126) 19 933
Personnel outsourcing 12 999 4 824
Safety surveillance 1 544 1 187
Internal/head office/consolidation (449) -
Total Group 13 968 25 944
* Top Fix did not trade for the year ended 30 June 2006 -
these are pro forma results of the individual subsidiaries prior to acquisition
by the Group in June 2006 as per the Pre-Listing Statement
COMMENTARY ON THE GROUP`S RESULTS:
Top Fix acquired the shares in its Scaffolding, Personnel Outsourcing
and Safety Surveillance operations on 29 June 2006 and listed on the
Alternative Exchange (ALTx) of the JSE Limited on 7 December 2006, following a
capital raise of R25 million at that date, to fund a substantial increase in
its scaffolding stock.
The Group`s profit for the year ended 30 June 2007 of R8,4 million compares
with R16,1 million as per the pro forma figure for the year ended 30 June 2006.
The latter is a pro forma figure as the Group did not trade for the year ended
30 June 2006 and the pro forma figures are based on the results of the
individual subsidiaries prior to acquisition.
A profit of R19,9 million for the year ended 30 June 2007 was forecast in the
Pre-Listing Statement and the reasons for not achieving that profit are set out
below. The basic and headline earnings per share are 4,8 cents compared to the
forecast of 11.4 cents, a 58% reduction. The comments under "Scaffolding" and
"Future Prospects" provide further elaboration.
No trading update was published as the review process has only just been
completed and the directors therefore had no reasonable degree of certainty on
which to base such trading update.
Scaffolding
Scaffolding broke even for the year ended 30 June 2007 as compared to R19.9
million in 2006. As mentioned in the interim results, the operating results of
the Scaffolding operation were adversely affected by the expiry of joint
venture contracts where Top Fix Scaffolding provided personnel and the other
partners provided scaffolding equipment. Prior to expiry of these joint
ventures, marketing efforts were aimed at replacing them with contracts
providing a complete service, i.e. supplying both scaffolding and personnel, In
anticipation of providing this complete service, scaffolding stocks were
increased although, as a result of the capital raising only being completed in
December 2006 and not in September 2006 as initially planned, Top Fix
Scaffolding has been unable to supply its additional scaffolding to the
industry for a sufficient period to counteract the impact of the termination of
the joint venture contracts. In addition, certain under-recoveries of amounts
pertaining to the joint ventures are under negotiation and accordingly no
accrual in respect of these under recoveries has been raised in respect of the
year ended 30 June 2007.
An amount of R8,1 million was received from an external company for the
training of scaffolding personnel, who would remain in Top Fix`s personnel pool
with an option for that company to draw scaffolders from the pool as required.
This revenue has been deferred until such time as the option is exercised.
Personnel Outsourcing
Personnel Outsourcing achieved exceptional results for the year, achieving
operating profit (including the fair value adjustment) more than double the
prior year profit at R13 million.
Safety Surveillance
Safety Surveillance achieved an operating profit of R1,5 million, 30% higher
than achieved in the previous year.
ACQUISITIONS
Top Fix acquired Umdeni Labour Hire on 1 July 2006 for no consideration.
JOINT VENTURE
As advised in the SENS announcements dated 13 June 2007 and 13 September 2007,
Top Fix Scaffolding has entered into a joint venture with Robor (Proprietary)
Limited ("the joint venture") to set up a scaffolding manufacture and hire
operation and plans to raise R40 million additional share capital through a
fully underwritten rights offer to shareholders. The purpose of the proposed
rights offer is to fund the joint venture and to facilitate expansion within
the existing scaffolding operation. Detailed announcements and a circular
relating to the rights offer will be made available to shareholders in due
course.
FUTURE PROSPECTS
The directors are confident that the joint-venture and the growth in
scaffolding stockholdings will dramatically reverse the recent poor performance
of the Scaffolding operation. They therefore expect to at least achieve the
Pre-Listing Statement forecast of 13,5c per share in the 2008 financial year; a
statement supported by results for the three months to September 2007 that are
well in excess of expectations.
BASIS OF PREPARATION AND ACCOUNTING POLICIES:
The reviewed results for the year ended 30 June 2007 have been prepared in
accordance with International Financial Reporting Standards and IAS34. The
financial information for the year ended 30 June 2007 has been prepared
adopting the same accounting policies used in the most recent annual financial
statements.
REVIEW OPINION
These results have been reviewed by Top Fix`s auditors, PKF (Jhb) Inc., and
their unqualified review opinion is available for inspection at the company`s
registered office.
DIVIDEND DECLARATION:
In line with Group policy, no dividend has been declared for the year.
For and on behalf of the Board
BT Ngcuka (Chairman) BW Marais (Chief Executive)
Date: 31 October 2007
Directors:
BT Ngcuka* (Chairman); BW Marais (CEO); JA Barker (Financial Director);
KG Bodigelo*; FF Goosen; EMJ Groenewald; JJ Senekal*; PR Todd
(* - non-executive)
Secretary and Registered Office:
MN Hattingh, 6 Topaz Street, Littleton Manor, Centurion 0157
Transfer Secretaries:
Link Market Services South Africa (Pty) Ltd, 11 Diagonal Street, Johannesburg
2000 (PO Box 4844, Johannesburg 2001)
Designated Advisor:
Ernst & Young Sponsors (Pty) Ltd.
Date: 31/10/2007 10:14:39 Produced by the JSE SENS Department.
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