| Mon 12 Nov 2007, 7:35 | | ATR - ACTOWERS - Abridged reviewed financial resul |
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ATR
ATR
ATR - ACTOWERS - Abridged reviewed financial results: for the six months ended
31 August 2007
Africa Cellular Towers Limited
(Incorporated in the Republic of South Africa)
(Registration number 2000/027374/06)
(JSE code: ATR ISIN: ZAE000088084)
("ACTOWERS" or "the company" or "the group")
Highlights
* Revenue up 148%
* Gross profit up 145%
* Headline earnings up 96%
* Headline earnings per share up 40%
* Net asset value per share up 35%
REVIEWED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 AUGUST 2007
Abridged income statements
Reviewed Unaudited Audited
6 months 31 6 months 31 12 months 28
August 2007 August 2006 February 2007
R`000 R`000 R`000
Revenue 176 924 71 241 197 251
Gross profit 56 903 23 265 61 555
Other income 1 232 7 152 11 610
Operating costs (18 659) (12 149) (29 364)
Earnings before interest, 39 476 18 268 43 801
taxation, depreciation and
amortisation ("EBITDA")
Depreciation (1 234) (404) (1 125)
Profit before interest and 38 242 17 864 42 676
taxation
Net interest received 1 974 2 706 2 439
Profit before taxation 40 216 20 570 45 115
Taxation (11 663) (5 965) (13 650)
Earnings attributable to 28 553 14 605 31 465
ordinary shareholders
Reconciliation of headline
earnings:
Earnings attributable to 28 553 14 605 31 465
ordinary shareholders
Adjusted for:
Profit on sale of property, - - (385)
plant and equipment
Headline earnings 28 553 14 605 31 080
attributable to ordinary
shareholders
Weighted average shares in 253 772 083 180 000 000 193 424 658
issue on which earnings per
share are based (1) (2) (3)
Fully diluted weighted 257 885 361 180 000 000 196 329 179
average shares in issue
Shares to be in issue (2) (3) 266 822 083 180 000 000 241 650 000
Earnings per share (cents) 11.3 8.1 16.3
Headline earnings per share 11.3 8.1 16.1
(cents)
Fully diluted earnings per 11.1 8.1 16.0
share (cents)
Fully diluted headline 11.1 8.1 15.8
earnings per share (cents)
Notes:
1 The weighted average shares in issue for 31 August 2006 is based on the
conversion of 100 ordinary shares in issue to 180 000 000 ordinary shares
in issue.
2 The weighted average number of shares in issue includes the weighted
average number of shares issued in terms of the JK Shelters (Pty) Limited
transaction ("JK Shelters transaction") with effect from 1 March 2007.
3 The 23 772 083 shares issued in terms of the JK Shelters transaction were
listed by the JSE Limited ("JSE") on 18 October 2007. These shares have
been included in the weighted average shares in issue on which earnings per
share are based.
Abridged balance sheets
31 August 2007 28 February 2007
Reviewed Audited
R`000 R`000
ASSETS
Non-current assets 61 447 11 834
Property, plant and equipment 26 859 10 882
Goodwill 34 463 -
Other financial assets 70 952
Deferred taxation 55 -
Current assets 236 015 155 855
Inventories 82 129 41 353
Other financial assets 4 738 720
Current taxation receivable - 1 708
Trade and other receivables 129 560 51 195
Cash and cash equivalents 19 588 60 879
Total assets 297 462 167 689
EQUITY AND LIABILITIES
Equity and liabilities
Equity and reserves 187 385 125 896
Share capital 80 790 47 882
Revaluation reserve 94 66
Retained earnings 106 501 77 948
Non-current liabilities 17 749 7 479
Long-term liabilities 15 660 7 052
Deferred taxation 2 089 427
Current liabilities 92 328 34 314
Loans from vendors 9 179 193
Current taxation payable 7 999 -
Current portion of long-term 2 748 2 426
liabilities
Trade and other payables 72 402 31 695
Total equity and liabilities 297 462 167 689
Shares in issue (1) (2) 253 772 083 230 000 000
Net asset value per share (cents) 73.8 54.7
Net tangible asset value per share 60.3 54.7
(cents)
Notes:
1 Shares in issue have been adjusted for the 11 650 000 treasury shares
issued in terms of the ACTOWERS Employee Share Trust.
2 The 23 772 083 shares issued in terms of the JK Shelters transaction were
listed by the JSE Limited ("JSE") on 18 October 2007. These shares have
been included in shares in issue.
Abridged statements of changes in equity
Share Revaluati Retained Total
capit on earnings equity
al reserve R`000 R`000
R`000 R`000
Balance 1 March 2006 - 14 46 483 46 497
Changes in equity: 23 23
Share capital issued
Share premium 47 47 229
229
Share-based payment 630 630
reserve
Profit for the year 31 465 31 465
Fair value adjustment 52 52
to investments
Balance 28 February 47 66 77 948 125 896
2007 882
Changes in equity: 2 2
Share capital issued
Share premium 32 32 090
090
Share-based payment 816 816
reserve
Profit for the year 28 553 28 553
Fair value adjustment 28 28
to investments
Balance at 31 August 80 94 106 501 187 385
2007 790
Abridged cash flow statements
Reviewed Audited
6 months 31 12 months 28
August 2007 February 2007
R`000 R`000
Cash flows from operating (37 138) 10 128
activities
Cash flows from investing (50 819) 2 172
activities
Cash flows from financing 46 666 48 715
activities
Change in cash and cash equivalents (41 291) 61 015
Cash and cash equivalents at 60 879 (136)
beginning of year
Cash and cash equivalents at end of 19 588 60 879
year
Abridged segment reports
Reviewed Unaudited
6 months 6 months
ended ended
31 August 31 August
2007 2006
R`000 R`000
Gross revenue
Cellular towers 148 843 71 241
Equipment shelters 28 081 -
176 924 71 241
Profit before interest and taxation
Cellular towers 30 501 17 864
Equipment shelters 7 741 -
38 242 17 684
Depreciation
Cellular towers (1 137) (404)
Equipment shelters (97) -
(1 234) (404)
OVERVIEW
The directors of ACTOWERS have pleasure in presenting the reviewed results for
the six months ended 31 August 2007 ("the interim period"). ACTOWERS is one of
the largest in-house, full turnkey manufacturing and supply companies of
telecommunication support systems in Africa and other emerging markets.
ACTOWERS acquired JK Shelters (Pty) Limited ("JK Shelters") with effect from 1
March 2007. JK Shelters manufactures and supplies shelters to the cellular
phone tower market and therefore compliments the business of ACTOWERS.
The group continued to take advantage of buoyant trading conditions in the
overall cellular industry in Africa and other emerging markets. The demand for
the installation of cellular towers and shelters across the geographic operating
area exceeded the expectations of the group during the interim period.
In addition the group secured new contracts which are currently being completed
in Madagascar, Congo Brazzaville and Chad.
FINANCIAL RESULTS
Revenue of ACTOWERS increased by 148% from R71.2 million in 2006 to R176.9
million during the interim period. These strong results are due to the
inclusion of the JK Shelters transaction and an increase in the production
facilities which led to an increase in product sales. Strong demand for the
group`s products was experienced and new clients were secured during the interim
period on a supply-only contracts basis.
Gross profit increased to R56.9 million by 145% (2006: R23.3 million), with
gross profit margins being consistent at approximately 32.2%.
EBITDA increased by 116% from R18.3 million in 2006 to R39.5 million during the
interim period. EBITDA margins decreased to 22.3% (2006: 25.6%) mainly as a
result of reduced exchange profits earned during the interim period.
Trade debtors as at 31 August 2007 of R129.6 million was significantly higher
than forecast due to debtors to the amount of USD5 million not being collected
in August 2007 as expected. During the first three weeks in September
approximately R32 million of the expected USD5 million was collected.
Inventories to the amount of R82.1 million further affected the working capital
of the group and were influenced by the shortage of ships available to transport
stock into Africa as well as the harbour strike experienced in Durban during
July and August 2007.
PROSPECTS
ACTOWERS is extending its product offering into the manufacturing of electrical
pylons for the electrical transmission industry. An order for the first proto-
type pylon has been placed and testing is eminent. Eskom recently stated that
approximately R39 billion has been earmarked for transmission and distribution
projects over the next five years. ACTOWERS has employed highly qualified
personnel with years of experience in the electrical pylon industry in order to
provide high standard pylons to Eskom and other power supply companies in
Africa.
ACTOWERS currently consumes approximately 1 100 tons of steel per month With
the current strong order book and the new electrical pylon venture embarked
upon, it is envisaged that ACTOWERS will increase production output to
approximately 3 000 tons of steel per month in 18 months` time.
ACTOWERS is fully committed to the transformation process required by Broad
Based Black Economic Empowerment ("BBBEE") and will over the short to medium
term increase the legal BEE ownership of the group.
The galvanizing bath and the galvanizing plant will be replaced to handle the
increased planned production output of the cellular towers and to accommodate
the galvanizing of the electrical pylon components. After the installation and
commissioning of three new CNC machines during September and October 2007
ACTOWERS has a total of eleven fully automated CNC machines which brings
critical mass to the manufacturing plant.
The re-zoning of the Ghana Free Zone is complete and infrastructure services
such as roads, water and electricity should also be completed in the first
quarter of 2008 with the expected date of occupation by ACTOWERS shortly after
the installation of these services.
The directors are confident that the forecast for 2008 will be achieved.
SHARE CAPITAL
An offer was made to the group`s employees to acquire 1 400 000 ordinary shares
in the company through the share incentive trust from 25 October 2007.
Employees have accepted 1 400 000 ordinary shares in the company.
DIVIDEND POLICY
It is the intention of the company to reconsider its dividend policy once the
group has achieved mature growth and periodically thereafter to take account of
prevailing circumstances and future cash requirements. Initially all earnings
generated by the group will be utilised to fund future growth and development.
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.
AUDITOR`S REVIEW
The auditors, Nexia HBLT Chartered Accountants (East Rand) Inc.`s, have reviewed
these interim results. A copy of their unqualified review opinion is available
for inspection at the company`s registered office.
On behalf of the Board
C J J Kruger
J de Villiers
Managing Director
Financial Director
9 November 2007
CORPORATE INFORMATION
Non executive director: Dr R R Richards
Executive directors: C J J Kruger (Chairman and Managing Director); D van
Staden; J de Villiers
Registration number: 2000/027374/06
Registered address: First Floor DVM office Park, 16 Kingfisher Crescent,
Meyersdal, 1447
Postal address: PO Box 1363, Alberton, 1450
Company secretary: Premium Corporate Consulting Services (Pty) Limited
Telephone: (011) 907 7364
Facsimile: (011) 869 9107
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited
Designated Adviser: Exchange Sponsors (Pty) Limited
These results and an overview of ACTOWERS are available at
www.africacellular.co.za.
Date: 12/11/2007 07:35:26 Produced by the JSE SENS Department.
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