| Tue 20 Nov 2007, 9:49 | | SCN - Scharrig Mining - Unaudited interim results |
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SCN
SCN
SCN - Scharrig Mining - Unaudited interim results for the six months ended
30 September 2007 and dividend declaration
Scharrig Mining Limited
Incorporated in the Republic of South Africa
Registration number 1992/001973/06
Share code: SCN ISIN code: ZAE000006474
("Schamin" or "the Company")
Unaudited interim results for the six months ended 30 September 2007
- Core earnings per share up 71%
- Operating profit up 144%
- Dividend up 57%
Abridged Consolidated Balance Sheet
as at 30 September 2007
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 Sept 30 Sept 31 March
2007 2006 2007
R`000 R`000 R`000
ASSETS
Non-current assets
Property, plant and
equipment 2 166 841 1 032 441 1 399 575
Intangible assets 276 648 227 785
Long-term loans 30 270
2 473 759 1 032 441 1 627 360
Current assets
Inventories 304 150 85 072 137 752
Trade and other receivables 429 060 135 652 317 156
VAT receivable 84 693 10 415 21 306
Bank balance and cash 228 759 50 167 164 511
1 046 662 281 306 640 725
Total assets 3 520 421 1 313 747 2 268 085
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 962 710 305 198 517 843
Reserves 464 674 285 911 363 650
Ordinary shareholders` funds 1 427 384 591 109 881 493
Outside shareholders` funds 12 489 8 389
Total shareholders` funds 1 439 873 591 109 889 882
Non-current liabilities
Long-term borrowings 1 007 552 250 783 322 855
Deferred taxation 208 544 145 017 182 008
1 216 096 395 800 504 863
Current liabilities
Trade and other payables 331 671 73 214 252 441
Vendor finance 30 000 284 586
Current portion of
long-term borrowings 440 202 252 397 309 353
Taxation 62 579 1 227 26 960
864 452 326 838 873 340
Total equity and liabilities 3 520 421 1 313 747 2 268 085
Net asset value per share
(cents) 702 365 490
Abridged Consolidated Cash Flow Statement
for the six months ended 30 September 2007
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 Sept 30 Sept 31 March
2007 2006 2007
R`000 R`000 R`000
Profit before tax 189 921 82 360 226 969
Non-cash flow items 142 749 69 162 160 849
Cash generated from
operations before working
capital adjustments 332 670 151 522 387 818
Changes in working capital (264 114) (96 703) (166 975)
Interest paid 59 321 19 798 59 638
Cash generated from
operations 127 877 74 617 280 481
Interest paid (59 321) (19 798) (59 638)
Dividend paid (20 502) (9 952) (21 411)
Taxation paid (2 109) (5 083)
Cash flows from operating
activities 45 945 44 867 194 349
Cash flows from investing
activities (1 239 137) (335 833) (710 371)
Net addition to property,
plant and equipment (755 415) (277 674) (562 154)
Net movement in loans
receivable (30 270) (22 140)
Acquisition of subsidiary (453 452) (58 159) (126 077)
Cash flows from financing
activities 1 260 413 317 493 659 157
Issue of shares 443 943 212 166 400 450
Movement in treasury shares 924 24 352
Long-term liabilities 815 546 105 327 234 355
Net increase in cash and
cash equivalents 67 221 26 527 143 135
Foreign currency
translation reserve (2 973) (2 264)
Cash and cash equivalents
at the beginning of period 164 511 23 640 23 640
Cash and cash equivalents
at the end of period 228 759 50 167 164 511
Abridged Consolidated Income Statement
for the six months ended 30 September 2007
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 Sept 30 Sept 31 March
2007 2006 2007
R`000 R`000 R`000
Revenue 1 087 422 414 452 1 368 760
Operating profit before
finance charges 249 242 102 158 296 360
Finance charges 59 321 19 798 69 391
Net profit before taxation 189 921 82 360 226 969
Taxation 65 024 24 969 69 728
Net profit after taxation 124 897 57 391 157 241
Earnings attributable to
outside shareholders 4 994 8 389
Headline earnings attributable to
ordinary shareholders 119 903 57 391 148 852
Core earnings per share
(cents) 74,3 43,5 103,7
Earnings/Headline earnings
per share (cents) 67,5 43,5 98,4
Dividend per share (cents)
- interim (proposed) 11,0 7,0 7,0
- final (declared) 10,0
11,0 7,0 17,0
Shares in issue (000)
- at end of period 203 430 153 147 179 810
- weighted average for the
period 177 599 132 043 151 352
Reconciliation between Core and Headline Earnings
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
30 Sept 30 Sept 31 March
2007 2006 2007
R`000 R`000 R`000
Headline earnings
attributed to ordinary
shareholders 119 903 57 391 148 852
Adjust for
Amortisation of customer
base 19 200 19 333
Fair value adjustment on
vendor liabilities 14 030
Foreign exhange adjus
tment
on vendor liabilities (19 173)
Earnings attributable to
outside shareholders 19 200 14 190
Tax effect of adjustment 5 568 4 115
13 632 10 075
Attributable to outside
shareholders 1 636 2 015
Attributable to ordinary
shareholders 11 996 8 060
Core earnings 131 899 57 391 156 912
Segmental analysis
Net profit Trade and
before tax other
and receivables
Turnover interest (Incl VAT)
R`000 R`000 R`000
2007
Opencast mining services 581 716 143 234 264 252
Coal mining JV`s 18 619 (3 728) 6 415
Exploration drilling 402 318 87 853 179 228
Drilling and blasting 59 935 17 775 46 714
Equipment and trading
spares 6 289 (4 850) 9 371
Crane hire 18 545 8 957 7 773
1 087 422 249 242 513 753
2006
Opencast mining services 394 521 99 515 141 496
Coal mining JV`s
Exploration drilling
Drilling and blasting 19 112 1 009 4 140
Equipment and trading
spares 819 1 634 431
Crane hire
414 452 102 158 146 067
Trade
and Property,
Inven- other plant and Net
tory payables equipment borrowings
R`000 R`000 R`000 R`000
2007
Opencast mining services 53 401 149 131 1 748 586 514 635
Coal mining JV`s 37 322 15 848 4 991 (7 008)
Exploration drilling 54 537 117 409 181 299 573 903
Drilling and blasting 1 196 23 555 191 007 141 692
Equipment trading and
spares 157 694 24 797 4 707 (10 256)
Crane hire 931 36 251 6 029
304 150 331 671 2 166 841 1 218 995
2006
Opencast mining services 48 320 41 606 974 352 394 472
Coal mining JV`s
Exploration drilling
Drilling and blasting 2 941 57 507 58 763
Equipment trading and
spares 36 752 28 667 582 (222)
Crane hire
85 072 73 214 1 032 441 453 013
Statement of changes in equity for the six months ended 30 September 2007
Share Share Capital Treasury
capital premium reserve sales
R`000 R`000 R`000 R`000
Balance at
30 September 2006 1 619 306 435 7 209 (2 856)
Share issue 265 225 935 (13 555)
Profit for the six months
ended 31 March 2007
Balance at
1 April 2007 1 884 532 370 7 209 (16 411)
Shares issued 344 443 599
Share options exercised 4 596 644
Profit for the period
ended 30 September 2007
Dividend paid 280
Balance at
30 September 2007 2 228 975 969 11 805 (15 487)
Reserve on
Foreign acquisition
exchange Accumu- of
translation lated subsi-
reserve profit diaries Total
R`000 R`000 R`000 R`000
Balance at
30 September 2006 264 836 13 866 591 109
Share issue 212 645
Profit for the 6 months
ended 31 March 2007 (2 263) 80 002 77 739
Balance at
1 April 2007 (2 263) 344 838 13 866 881 493
Shares issued 443 943
Share options exercised 5 240
Profit for the period
ended 30 September 2007 (2 974) 119 903 116 929
Dividend paid (20 501) (20 221)
Balance at
30 September 2007 (5 237) 444 240 13 866 1 427 384
Commentary
"This is another set of solid first half results on the back of coal in local
and international markets."
- Robin Berry, COO, Scharrig Mining
Nature of operations
Schamin has continued to grow in line with its vision to be the mining services
company of choice on the African continent. The Company is currently one of the
major players in the contract-mining sector and through its subsidiary
Geosearch, one of the largest exploration-drilling contractors on the continent.
Leveraging off these skills sets and resources, the Group has entered into
several joint ventures in the coal sector, through the acquisition of equity
interests in operating collieries and potential resources. These initiatives
ideally position the Group to benefit from the opportunities that the energy
sector currently presents.
Results
The results for the six months ended 30 September 2007 show another impressive
increase over the corresponding period. Turnover is up 162% and operating profit
has increased by 144% from R102,2 million to R249,2 million. Core earnings per
share have increased by 71% to 74,3 cents from 43,5 cents per share. Net asset
value per share has since 31 March 2007 increased by 50% from 468 cents per
share to 702 cents per share. Turnover in September 2007 was significantly
higher than March 2007, and this resulted in an increased investment in working
capital. The increased working capital levels have also resulted as a
consequence of holding increased strategic stock to continue growing the mining
services businesses in the face of strong demand.
Group operations
Contract mining services
Opencast mining
The Scharrighuisen operations have continued to expand, with all contracts
performing satisfactorily during the period under review. The division has
continued to expand its client base and now provides contract opencast mining
services to BECSA, Umcebo, Exxaro and Nkomati Anthracite.
In line with the rationale supporting this acquisition, Benicon has experienced
strong growth in its sector of the market, which has further broadened the
Group`s market share. The division is well placed to take advantage of its fleet
of electrically powered medium sized draglines as diesel prices remain at high
levels and it is now the sole dragline owning contract mining company in the
country.
Drilling and blasting
The rationalisation of the Scharrighuisen contracts into JEF Drill and Blast has
been completed and the synergies of combining the two business units are being
realised. Exposure to this segment of contracting, through the provision of
overburden drilling and blasting as a standalone service, has not only
complemented the Group`s earthmoving contracts, but has expanded Schamin`s
breadth of earnings potential and client base.
Spares and sales
The timely sourcing of used equipment on a global basis, for spare parts and
refurbishment, through this division, has continued to play a strategic role in
enhancing the group`s overall competitiveness and ability to continue growing
its mining services operations into the future.
Exploration drilling
Geosearch has continued to increase the number of rigs deployed and currently
operates in 12 countries across southern and Central Africa. The ongoing
increase in demand for exploration drilling across the continent is expected to
sustain the division`s growth in earnings profile for the foreseeable future.
Recent acquisitions
The acquisitions of Ritchie Crane Hire, effective from 1 March 2007 and
consolidated for the full half-year period, and CCT Opencast Mining, to be
consolidated from 1 October 2007, serve to broaden the overall service offering
of the group. Both businesses have exceeded earnings expectations for the period
under review.
Capital expenditure
The Group has invested an amount of R755 million during the period under review
in an endeavour to meet the strong demand for mining services.
The worldwide shortage of opencast mining equipment continues to impact the
expansion opportunities of the Group and to mitigate this shortage Schamin has
been aggressive in acquiring new and reasonably priced second hand mining
equipment, as it becomes available on the world market.
Coal mining joint ventures
During the period under review, the Group has entered into four Joint venture
agreements in order to take equity stakes in operating coal mines and potential
coal development opportunities.
Through the purchase of the shares in Benicon Coal, during April 2007, Schamin
acquired a 60% stake in the Nkomati Anthracite operation. The colliery was
recommissioned and produced its first sales during June 2007.
The Group also entered into a deal to acquire a 49,99% stake in the
Koornfontein mine, a large operating colliery, which will serve as base to
further develop its coal assets across Mpumalanga. The earnings from this
transaction will be consolidated, once regulatory approvals have been granted
for the acquisition. These are expected to be granted by 30 November 2007.
The establishment of the Merafe Coal JV, to develop several isolated coal
resources, provides Schamin and its Merafe Resources with an empowered vehicle
to pursue opportunities within the SA coal sector. These prospecting rights are
in the process of being converted into new order prospecting rights.
Through its partnership with Jonah Capital, in Jonah Coal, the Group has secured
a 25% stake in the African Energy JV in Botswana. With Aquila Resources, Jonah
Coal aims to unlock the potential value embodied in these large coal resources.
Prospects
Driven by strong demand, contract mining services are expected to continue to
provide the Group with a strong earnings growth profile through to the end of
the current financial year and for the foreseeable future. While the Group`s
coal mining joint ventures are not expected to make a meaningful contribution to
the bottom line in the current financial year, this is expected to change in
2008 and 2009, on the back of robust demand for energy, both domestically and
internationally.
Directorship Changes
Casper Scharrighuisen has decided that with effect from 30 November 2007 he will
relinquish his responsibilities as MD of the group. Cas will continue to play a
significant role in Scharrig as the General Manager responsible for the opencast
mining division. Mr Robin Berry has been appointed Chief Executive from 1
December 2007.
Basis of presentation
The interim financial statements are prepared on the historical cost basis
except for the revaluation of certain financial instruments which are carried at
either fair value or amortised cost as appropriate. The financial statements
have been prepared in accordance with International Financial Reporting
Standards (IFRS) and IAS 34 - Interim Financial Reporting. The accounting
policies have been applied consistently to all periods presented in the interim
financial statements.
Company Name Change
Scharrig shareholders voted on 2 November 2007 to support the change of the
company`s name to Sentula Mining Limited, which will trade on the JSE with the
share code SNU. The name change will be effective from the opening of business
on Monday, 26 November 2007.
The dividend will trade ex on the new ISIN ZAE000107223
Dividend
An interim dividend of 11 cents per share has been declared by the board in
respect of the six months ended 30 September 2007, payable on Tuesday, 18
December 2007 to those shareholders recorded in the register of the company at
the close of business on Friday 14 December 2007.The salient dates of the
interim dividend are as follows:
Last date to trade cum dividend Friday, 7 December 2007
Shares trade ex dividend Monday, 10 December 2007
Record date Friday, 14 December 2007
Payment date Tuesday, 18 December 2007
No dematerialisation or rematerialisation of shares may take place between
Monday, 10 December 2007 and Friday, 14 December 2007, both dates inclusive.
Shareholders presentation
Shareholders and other interested parties are invited to a presentation of the
results to take place at the Park Hyatt, Rosebank on Tuesday, 20 November 2007
starting at 11:00 am.
On behalf of the board
C Scharrighuisen G Louw Boksburg
Managing Director Financial Director 20 November 2007
Directors: Sir S E Jonah (Chairman), D C M Gihwala* (Deputy Chairman), C
Scharrighuisen (Managing), R Berry, G Louw (Financial), T R Hendry*, Dr P
Huysamer*, A Joffe*, R K Jonah*,
C Moorcroft, J Best*, E H J Stoyell* *Non-executive
Transfer Secretaries: Link Market Services South Africa (Pty) Limited, 5th
Floor, 11 Diagonal Street, Johannesburg, 2001.
PO Box 4844, Johannesburg 2000, Tel (011) 832-2652 Registered Address: 28
Patrick Road, Jet Park, Boksburg 1459, PO Box 30194, Jet Park 1469, Tel (011)
397-3870
Sponsor: Arcay Moela Sponsors (Pty) Limited
www.scharrig.co.za
Date: 20/11/2007 09:49:42 Produced by the JSE SENS Department.
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