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RBX
RBX
RBX - Raubex Group Limited - Unaudited interim results for the six months ended
31 August 2007
Raubex Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 2006/023666/06
Share Code: RBX ISIN Code: ZAE000093183
("Raubex" or the "Company")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2007
HIGHLIGHTS
* Revenues up 67,4% to R963,5 million (H1 2007: R575,6 million)
* Operating profit up 184% to R191,2 million (H1 2007: R67,2 million)
* Group operating margins of 19,8% (H1 2007: 11,6%)
* HEPS up 182% to 80,1 cents per share (H1 2007: 28,4 cents per share)
* Strong cash flow from operations up 139% to R177 million (H1 2007: R74
million)
* Capex spend of R160 million
* Maiden interim dividend of 20 cents per share declared
* Solid order book and good prospects for the remainder of the year
Francois Diedrechsen, Financial and Commercial Director of Raubex Group, said:
"We are pleased with the solid set of half year results released today. This
performance is underpinned by strong cash flows, improved operational margins
across all divisions and a growing order book. In addition, we have announced
our intention to acquire two businesses to assist us with capacity building and
to extend our geographical footprint as we gear the Group to take full advantage
of increased demand for our services.
"We look forward to another strong performance in the second half of the year
driven by continued buoyant market conditions in the South African
infrastructure sector."
ENQUIRIES:
Raubex Group: 012 665 3226
Francois Diedrechsen
College Hill 011 447 3030
Fred Cornet 083 307 8286
Jacques de Bie 082 691 5384
COMMENTARY
FINANCIAL OVERVIEW
Revenue increased 67,4% to R963,5 million and operating profit increased 184% to
R191,2 million from the corresponding prior period. Profit before tax increased
147% to R183,6 million.
Earnings per share increased 181% to 79,8 cents with headline earnings per share
increasing 182% to 80,1 cents after taking account of a loss on disposal of
fixed assets.
Group operating margin increased from 11,6% to 19,8% compared to the
corresponding prior year period.
The Group generated operating cashflows of R177 million before finance charges
and taxation. Capital expenditure on fixed assets to the value of R160,4 million
was incurred during the six months ended 31 August 2007. Net cash inflow for the
six months ended 31 August 2007 was R80,9 million with total cash and cash
equivalents at the end of the period amounting to R158,2 million.
OPERATIONAL OVERVIEW
Raubex continues to improve operational efficiencies as reflected by the
pleasing increase in the operating margins and all three divisions experienced
significant growth as government`s infrastructure spend continues to
materialise.
Roadmac
Roadmac is a specialist in the manufacturing and the laying of asphalt, chip and
spray, surface dressing, enrichments and slurry seals.
Roadmac is the largest contributor to Group revenue and performance for the
period has exceeded expectations. The division is operating in a very favourable
environment supported by a very healthy order book. The acquisition of National
Asphalt was successfully integrated during the period and is performing above
expectations.
Revenue for the division increased 55% to R566 million (H1 2007: R364 million)
and operating profit by 115% to R114 million (H1 2007: R53 million).
The divisional margins improved to 20,2% (H1 2007: 14,6%).
The division incurred capital expenditure of R70 million during the period.
Raubex Construction
Raubex Construction is a road and civil infrastructure construction company
focused on the key areas of new road construction (green fields) and heavy road
rehabilitation.
Revenue for the division increased 16% to R223 million (H1 2007: R193 million)
whilst operating profit increased 186% to R26,9 million (H1 2007: R9,4 million).
This is as a result of existing low margin contracts coming to an end and the
effects of new higher margin contracts starting to come through. The division is
positioning itself to take advantage of the expected increase in heavy civil
road infrastructure that is now evident.
The divisional margins improved strongly to 12% (H1 2007: 4,9%).
The division incurred capital expenditure of R26 million during the period.
Raumix
Raumix is the materials division of the Group with its core focus spread over
three areas including contract crushing, production of aggregates for the
commercial market and materials handling for the mining industry.
The smooth integration of SPH Kundalila was completed during the first half of
the year and the division is now benefiting from strong demand for material
handling and contract crushing services as a result of increased mining activity
driven by buoyant commodity and precious metal prices.
During the period, revenue for the division increased 816% to R174 million (H1
2007: R19 million) and operating profit by 987% to R50,1 million (H1 2007: R4,6
million).
The divisional margins improved to 28,8% (H1 2007: 24,3%).
The division incurred capital expenditure of R64,8 million during the period.
ACQUISITIONS
Raubex Group acquired SPH Kundalila and National Asphalt with effect 1 March
2007 and 1 April 2007 respectively.
Raumix acquired SPH Kundalila, which was a successful strategic acquisition that
opened new routes to market for Raumix and secured a high quality new client
base including mining houses. SPH Kundalila is involved in the screening,
mining, crushing and processing of stone and related activities.
Roadmac acquired National Asphalt, a specialist in the manufacture and laying of
premix asphalt.
A pro forma income statement including the effect of the acquisitions has been
included in this report.
In addition, the following two potential acquisitions were announced today
subject to conditions precedent being met. These transactions will be absorbed
in the Raubex Construction and Raumix divisions and are in line with the Group`s
acquisitive strategy to identify value enhancing businesses. The proposed
acquisitions will augment capacity and reinforce the Group`s geographical
footprint as it gears up to take full advantage of increased demand for its
services.
* Raubex Construction - Space Construction for a transaction value of R50
million (KwaZulu Natal)
* Raumix - Queenstown and Aliwal quarries for a total purchase consideration of
R33,6 million (Eastern Cape)
The Group is currently negotiating a further two similar capacity building
acquisitions.
PROSPECTS
As at 31 August 2007, the Group`s construction book stands at R2,3 billion.
Most industry players, including Raubex, are now seeing the tangible results of
the announced infrastructure investments filter through to the order book. More
recently, announcements such as the Gauteng road upgrade programme and plans to
upgrade various airports around the country add to the basic maintenance and
rehabilitation pipeline already present. Some of these projects also herald
opportunities to enter the Public Private Partnership market.
International activities, although still small from a Group perspective, remain
focused on Zambia and are expected to remain solid. An increased demand from
neighboring countries has become more evident and the Group will continue to
review those carefully.
In the current market conditions, the Group expects to deliver a strong
performance in the second half of the year driven by buoyant market conditions
and a focus on higher value and margins projects.
Finally, the Board wishes to thank all members of staff, management and
divisional heads for their valued support, contribution and dedication as the
Group entered the next phase in its successful 30 years history.
DIVIDEND DECLARATION
In line with the guidance provided prior to the listing, the directors have
declared a maiden interim dividend of 20 cents per share. Relevant dates are as
follows:
Last day to trade cum dividend Friday, 23 November 2007
Commence trading ex dividend Monday, 26 November 2007
Record date Friday, 30 November 2007
Dividend payable Monday, 3 December 2007
Share certificates may not be dematerialised or rematerialised between 26
November 2007 and 30 November 2007, both dates inclusive.
CONSOLIDATED INCOME STATEMENT
for the six months ended 31 August 2007
Audited
Annual
31 August 31 August 28 February
2007 2006 2007
R R R
Revenue 963 498 214 575 560 595 1 190 860 142
Cost of sales (728 590 078) (491 296 358) (964 438 063)
Gross profit 234 908 136 84 264 237 226 422 079
- Other income 3 941 601 6 300 403 15 811 940
- Other gains/losses (2 567 864) (8 033 269) (11 019 291)
- net
- Administrative (45 057 756) (15 295 923) (36 710 215)
expenses
Operating profit 191 224 117 67 235 448 194 504 513
- Finance income 5 097 029 4 636 924 16 814 914
- Finance costs (13 107 719) (2 724 163) (12 296 390)
- Share of profit of 386 180 5 203 961 6 258 820
associate
Profit before tax 183 599 607 74 352 170 205 281 857
Taxation expense (53 305 184) (24 748 423) (66 423 518)
Profit for the year 130 294 423 49 603 747 138 858 339
Attributable to:
Equity holders of 129 364 324 28 393 986 85 335 234
the company
Minority interest 930 099 21 209 761 53 523 105
Weighted average 162 129 832 100 000 000 100 000 000
number of shares
Basic earnings per 79,8 28,4 85,3
share (cents)
CALCULATION OF HEADLINE EARNINGS PER SHARE
for the six months ended 31 August 2007
Audited Annual
31 August 31 August 28 February
2007 2006 2007
R R R
Net profit after tax 129 364 324 28 393 986 85 335 234
attributable to equity
holders
Adjusted for:
Profit/loss on sale of 528 601 - (1 460 217)
fixed assets after tax
Impairment of loans - - 505 638
Negative goodwill on - - (1 044 890)
acquisition of
subsidiaries
Basic headline earnings 129 892 925 28 393 986 83 335 765
Weighted average number 162 129 832 100 000 000 100 000 000
of shares
Headline earnings per 80,1 28,4 83,3
share (cents)
CONSOLIDATED BALANCE SHEET
as at 31 August 2007
Audited Annual
31 August 31 August 28 February
2007 2006 2007
R R R
ASSETS
Non-current
assets
- Property, plant 556 221 005 239 749 247 290 398 357
and equipment
- Goodwill 161 466 680 3 478 813 16 533 580
- Investments in 635 924 11 778 481 14 629 758
associates
- Deferred income 1 532 701 1 401 768 4 634 946
tax assets
719 856 310 256 408 309 326 196 641
Current assets
- Inventories 37 373 450 11 830 743 17 628 617
- Construction 69 599 239 48 624 486 44 263 883
contracts in
progress
- Trade and other 328 172 302 179 164 545 258 686 325
receivables
- Current income 12 022 070 10 291 973 17 077 177
tax receivable
- Cash and cash 164 436 148 90 767 659 83 266 639
equivalents
611 603 209 340 679 406 420 922 641
Total assets 1 331 459 519 597 087 715 747 119 282
EQUITY AND
LIABILITIES
Equity
- Share capital 1 621 299 300 1 432 782
- Share premium 1 431 670 229 - 1 282 167 325
- Other reserves (1 174 048 277) - (1 174 084 740)
- Retained income 325 619 302 173 653 772 196 254 978
Equity
attributable to
equity holders
of the company 584 862 553 173 654 072 305 770 345
Minority interest 2 447 372 101 676 018 1 517 273
in equity
Total equity 587 309 925 275 330 090 307 287 618
Liabilities
Non-current
liabilities
- Borrowings 215 664 250 88 090 694 89 208 131
- Provisions for 3 636 150 - 658 000
liabilities and
charges
- Deferred income 78 993 358 26 249 412 52 511 816
tax liability
298 293 758 114 340 106 142 377 947
Current
liabilities
- Short-term 105 890 936 26 814 141 37 014 819
portion of
borrowings
- Current income 53 237 627 11 344 518 8 494 173
tax liabilities
- Trade and other 280 530 207 168 176 231 246 006 662
payables
- Bank overdrafts 6 197 066 1 082 629 5 938 063
445 855 836 207 417 519 297 453 717
Total liabilities 744 149 594 321 757 625 439 831 664
Total equity and 1 331 459 519 597 087 715 747 119 282
liabilities
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31 August 2007
Audited Annual
31 August 31 August 28 February
2007 2006 2007
R R R
Cash flows from
operating activities
Cash generated from 177 045 002 74 020 284 198 880 958
operations
Finance income 5 097 029 4 636 924 16 814 914
Dividends paid - (13 435 519) (65 504 353)
Finance costs (13 107 719) (2 724 163) (12 296 390)
Taxation paid (10 474 666) (22 470 519) (66 524 920)
Net cash from 158 559 646 40 027 007 71 370 209
operating activities
Cash flows from
investing activities
Additions and (160 396 278) (33 438 490) (113 831 528)
acquisitions of
fixed assets
Sale of fixed assets 46 985 498 1 201 100 22 731 812
Acquisition of 5 994 560 6 418 164 (991 284 592)
subsidiaries
Minorities acquired - - (278 826 096)
Associates` - - 4 275 000
dividends received
Loans to associates - - (4 238 405)
Net cash from (107 416 220) (25 819 226) (1 361 173 809)
investing activities
Cash flows from
financing activities
Net proceeds from 49 522 758 18 352 038 29 670 193
borrowings
Proceeds from shares - - 1 283 600 106
and share premium
issued
Share issue expenses (19 755 679) - -
Other non-cash items - - (5 937 960)
Net cash from 29 767 079 18 352 038 1 307 332 339
financing activities
Total cash movement 80 910 505 32 559 819 17 528 739
for the period
Cash at the 77 328 576 57 125 211 59 799 837
beginning of the
period
Total cash at end of 158 239 081 89 685 030 77 328 576
the period
SEGMENTAL ANALYSIS
for the six months ended 31 August 2007
Road
Aggregate surfacing and
and crusher rehabilitation
R R
Business segments
At 31 August 2007
Segmental revenue 174 038 319 566 097 763
Segmental result (operating 50 127 812 114 228 493
profit)
At 31 August 2006
Segmental revenue 18 960 068 363 971 122
Segmental result (operating 4 612 325 53 221 168
profit)
At 28 February 2007
Segmental revenue 27 780 892 685 149 524
Segmental result (operating 11 438 651 134 731 529
profit)
Road
construction
and earthworks Consolidated
R R
Business segments
At 31 August 2007
Segmental revenue 223 362 132 963 498 214
Segmental result (operating 26 867 812 191 224 117
profit)
At 31 August 2006
Segmental revenue 192 629 405 575 560 595
Segmental result (operating 9 401 955 67 235 448
profit)
At 28 February 2007
Segmental revenue 477 929 726 1 190 860 142
Segmental result (operating 48 334 333 194 504 513
profit)
Local International Consolidated
R R R
Geographical
segments
At 31 August 2007
Segmental revenue 889 709 888 73 788 326 963 498 214
Segmental result 180 113 136 11 110 981 191 224 117
(operating profit)
At 31 August 2006
Segmental revenue 493 235 936 82 324 659 575 560 595
Segmental result 69 001 159 (1 765 711) 67 235 448
(operating profit)
At 28 February 2007
Segmental revenue 1 047 246 969 143 613 173 1 190 860 142
Segmental result 186 654 139 7 850 374 194 504 513
(operating profit)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 August 2007
Share Share Other
capital premium reserves
R R R
Balance at 1 March 300
2006
Issue of share 1 432 482 1 282 167 325
capital and share
premium
Currency translation 1 213 204
reserve
Profit for the year
Reverse acquisition (1 001 620 037)
of subsidiary
Minority interest (173 677 907)
acquisition
Dividends
Balance at 28 1 432 782 1 282 167 325 (1 174 084 740)
February 2007
Issue of share 188 517 169 258 583
capital and share
premium
Share issue expenses (19 755 679)
Currency translation 36 463
reserve
Profit for the year
Balance at 31 August 1 621 299 1 431 670 229 (1 174 048 277)
2007
Total
attributable
to equity
holders of
Retained the parent
earnings company
R R
Balance at 1 March 146 908 744 146 909 044
2006
Issue of share 1 283 599 807
capital and share
premium
Currency translation 1 213 204
reserve
Profit for the year 85 335 234 85 335 234
Reverse acquisition (1 001 620 037)
of subsidiary
Minority interest (173 677 907)
acquisition
Dividends (35 989 000) (35 989 000)
Balance at 28 196 254 978 305 770 345
February 2007
Issue of share 169 447 100
capital and share
premium
Share issue expenses (19 755 679)
Currency translation 36 463
reserve
Profit for the year 129 364 324 129 364 324
Balance at 31 August 325 619 302 584 862 553
2007
Minority Total
interest equity
R R
Balance at 1 March 78 198 452 225 107 496
2006
Issue of share 1 283 599 807
capital and share
premium
Currency translation 404 401 1 617 605
reserve
Profit for the year 53 523 105 138 858 339
Reverse acquisition (1 001 620 037)
of subsidiary
Minority interest (101 093 332) (274 771 239)
acquisition
Dividends (29 515 353) (65 504 353)
Balance at 28 1 517 273 307 287 618
February 2007
Issue of share 169 447 100
capital and share
premium
Share issue expenses (19 755 679)
Currency translation 36 463
reserve
Profit for the year 930 099 130 294 423
Balance at 31 August 2 447 372 587 309 925
2007
NOTES
Accounting policies
These results have been compiled in accordance with International Financial
Reporting Standards (IFRS) and IAS 34: Interim Financial Reporting. The
presentation of these results also conforms to the listing requirements of the
JSE Limited and Schedule 4 of the South African Companies Act.
Acquisition of subsidiaries
Raubex Group made the following acquisitions during the six months ended 31
August 2007.
Raumix acquired 100% of SPH Kundalila on 1 March 2007 for R162,2 million by
issuance of 17 891 376 ordinary shares of 1 cent each at a premium of R162,1
million. The net assets acquired included a 45% interest in Canyon Rock. Raumix
acquired the remaining 10% interest in Canyon Rock from the minority
shareholders on 1 March 2007 for R7,2 million by issuance of 960 256 ordinary
shares of 1 cent each at a premium of R7,19 million. Canyon Rock was previously
a 45% held associate of Raubex Group. Profit after tax since acquisition date
included in group profit for the period was R12,5 million for SPH Kundalila and
R11,8 million for Canyon Rock.
Roadmac acquired the business of National Asphalt on 1 April 2007 for R30,1
million cash. Profit after tax included in group profit for the period was R6,7
million.
PRO FORMA INCOME STATEMENT OF RAUBEX GROUP
The table below sets out the unaudited pro forma income statement of Raubex
Group. The unaudited pro forma statement has been prepared for illustrative
purposes only.
Actual
6 months Restructuring
ended and
31 August acquisitions(1/2)
R`000 2006
Revenue 575 561 217 187
Operating profit 67 235 45 024
Net finance income/(cost) 1 913 (4 761)
Income from associate 5 204 (3 584)
Profit before tax 74 352 36 679
Taxation (24 748) (11 977)
Profit for the year 49 604 24 702
Attributable to:
Equity holders of the company 28 394 45 912
Minority interest 21 210 (21 210)
Shares in issue 100 000 62 130
Earnings per share (cents) 28,4 -
Headline earnings per share (cents) 28,4
Pro forma
6 months Actual
ended ended
31 August 31 August
R`000 2006 2007
Revenue 792 747 963 498
Operating profit 112 259 191 224
Net finance income/(cost) (2 848) (8 011)
Income from associate 1 620 386
Profit before tax 111 031 183 600
Taxation (36 725) (53 305)
Profit for the year 74 306 130 294
Attributable to:
Equity holders of the company 74 306 129 364
Minority interest - 930
Shares in issue 162 130 162 130
Earnings per share (cents) 45,8 79,8
Headline earnings per share (cents) 44,1 80,1
Notes:
1. Represents the effects of the group restructure on minority interests, based
on the assumption that the acquisition of the minorities interests were
effective from 1 March 2006.
2. Represents the effects of the acquisition of SPH, National Asphalt and
Milling Techniks per the Pre-listing statement, on the following assumptions:
a. The acquisitions were effective 1 March 2006
b. Based on the financial information of the respective entities as follows:
i. SPH - Unaudited management accounts for the six months ended 31 August 2006;
ii. National Asphalt - Unaudited management accounts for the six months ended 31
August 2006;
iii. Milling Techniks - Unaudited management accounts for the six months ended
31 August 2006.
On behalf of the Board
MC Matjila JE Raubenheimer F Diedrechsen
Chairman Chief Executive Group Financial &
Officer Commercial Director
6 November 2007
Raubex Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 2006/023666/06
Share Code: RBX ISIN Code: ZAE000093183
("Raubex" or the "Company")
Directors: MC Matjila (Chairman)#, JE Raubenheimer, GM Raubenheimer, F
Diedrechsen, F Kenney#, MB Swana#, L Maxwell*
# Non-executive * Independent non-executive
Company Secretary: MDP Secretarial Services (Pty) Limited
Registered office: 1st Floor Leopard Creek Building, The Greens Office Park,
Centurion
Postal address: PO Box 66192, Highveld, 0169
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited
Auditors: PricewaterhouseCoopers Advisory Services (Pty) Limited
Sponsor: Investec Bank Limited
www.raubex.co.za
Date: 06/11/2007 07:00:07 Produced by the JSE SENS Department.
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