| Wed 21 Nov 2007, 16:50 | | ASO - Austro Group Limited - Audited financial res |
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ASO
ASO
ASO - Austro Group Limited - Audited financial results for the year ended 31
august 2007
Austro Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 2001/029771/06)
Share code: ASO ISIN: ZAE000090882
("Austro" or "the company")
AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 AUGUST 2007
HIGHLIGHTS
Revenue increased by 58,7% to R279,0 million
Net profit for the year increased by 95,5% to R53,9 million
Headline earnings per share increased to 14,2 cents which exceeded the
forecast of 10,5 cents by 35,2%
ACQUISITIONS
* New Way Motor and Diesel Engineering (Proprietary) Limited
* Gearing Moss Supplies (Proprietary) Limited
* Neptune Plant (Proprietary) Limited and Neptune Plant Hire (Proprietary)
Limited
SUMMARISED INCOME STATEMENT
Year ended Year ended
31 August 31 August
2007 2006
R R
Revenue 279 015 132 175 850 787
Cost of sales (162 705 535) (102 539 823)
Gross profit 116 309 597 73 310 964
Other operating income 9 364 728 9 382 590
Operating expenses (52 404 991) (42 060 742)
Profit from operations 73 269 334 40 632 812
Finance income 2 354 626 516 409
Finance expense (92 000) (484 220)
Profit before taxation 75 531 960 40 665 001
Taxation expense (21 593 816) (13 074 393)
Net profit for the year 53 938 144 27 590 608
Dividends declared - 9 000 000
Number of shares in issue 377 500 610 308 261 400
Note 1
Weighted average number of shares 335 074 120 308 261 400
Note 2
Earnings per share (cents) 16,1 9,0
Reconciliation of headline earnings
Net profit for the year 53 938 144 27 590 608
Net profit on disposal of property, (6 403 511) -
plant and equipment
Headline earnings 47 534 633 27 590 608
Headline earnings per share (cents) 14,2 9,0
Note 1: Subsequent to year end, on 29 October 2007, 44 233 333 shares were
issued as part of the purchase price in acquiring New Way Motor and Diesel
Engineering (Proprietary) Limited and Gearing Moss Supplies (Proprietary)
Limited.
Note 2: For comparative purpose the shares in issue in the prior period have
been adjusted for the share split prior to listing, to provide more meaningful
information.
SUMMARISED BALANCE SHEET
At At
31 August 31 August
2007 2006
R R
Assets
Non-current assets 219 843 385 30 360 498
Property, plant and equipment 18 426 324 19 460 814
Goodwill and other intangibles 201 417 061 10 899 684
Current assets 428 694 874 72 683 102
Inventories 159 983 771 35 402 419
Trade and other receivables 59 949 588 23 546 069
Cash resources 208 761 515 13 734 614
Total assets 648 538 259 103 043 600
Equity and liabilities
Capital and reserves 387 799 823 19 721 242
Share capital and share premium 174 722 699 10
Shares to be issued 139 417 748 -
Accumulated profit 73 659 376 19 721 232
Non-current liability
Deferred taxation 159 788 480 351
Current liabilities 260 578 648 82 842 007
Trade and other payables 104 543 020 40 796 908
Amount owing for purchase of 127 111 858 5 445 790
subsidiaries
Shareholders for dividends - 22 000 000
Taxation 28 923 770 14 599 309
Total equity and liabilities 648 538 259 103 043 600
Net asset value per share (cents) 92,0 6,4
Tangible net asset value per share 44,2 2,9
(cents)
SUMMARISED CASH FLOW STATEMENT
Year ended Year ended
31 August 31 August
2007 2006
R R
Cash flows from operating activities (4 863 007) 17 374 169
Cash generated by operations 29 830 331 38 064 665
Finance income 2 354 626 516 409
Finance expense (92 000) (484 220)
Dividends received 1 189 -
Dividends paid (22 000 000) (10 000 000)
Taxation paid (14 957 153) (10 722 685)
Cash flows from investing activities 26 835 159 (3 552 425)
Cash flows from financing activities 173 054 749 (10 715 394)
Net increase in cash resources 195 026 901 3 106 350
Cash resources at beginning of year 13 734 614 10 628 264
Cash resources at end of year 208 761 515 13 734 614
SUMMARISED STATEMENT OF CHANGES IN EQUITY
Year ended Year ended
31 August 31 August
2007 2006
R R
Share capital and share premium 314 140 447 10
Balance at beginning of year 10 10
Issued during year 174 722 689 -
Shares to be issued 139 417 748 -
Accumulated profit 73 659 376 19 721 232
Balance at beginning of year 19 721 232 1 130 624
Net profit for the year 53 938 144 27 590 608
Dividends declared - (9 000 000)
Capital and reserves 387 799 823 19 721 242
SEGMENTAL ANALYSIS
Revenue (external) Profit before taxation
Year ended Year ended
31 August 31 August 31 August 31 August
2007 2006 2007 2006
Woodworking 212 585 215 175 850 787 59 396 585 40 665 001
Generators 66 429 917 - 16 135 375 -
Total 279 015 132 175 850 787 75 531 960 40 665 001
Net asset value
At
31 August 31 August
2007 2006
Woodworking 311 995 161 19 721 242
Generators 75 804 662 -
Total 387 799 823 19 721 242
COMMENTARY
INTRODUCTION
Austro has achieved excellent results in this, our first financial year as a
listed company. From the outset, the company`s mission has been to become the
foremost player in strategic, complementary niche markets in the industrial
suppliers and construction-related sectors.
Since its listing on the JSE Limited ("JSE") in February 2007, Austro has made
significant strides to realise this vision, including entering into, and
consolidating its position in, the generator sale and rental market, as well
as augmenting its service offering in respect of the woodworking machines and
tools market. Both of these markets are particularly exciting and lucrative as
they are key inputs into the construction and allied sectors which are showing
exceptional growth.
Established in the 1980`s, Austro`s primary business is distributing premium
quality woodworking equipment and selling and maintaining tools, blades and
cutters for this equipment. The Austro portfolio includes leading European
equipment manufacturers such as Biesse, Fravol, Casolin, Felder, Striebig and
Weinig.
During the year Austro made two acquisitions, namely New Way Motor and Diesel
Engineering (Proprietary) Limited ("New Way") and Gearing Moss Supplies
(Proprietary) Limited ("Gearing Moss"). The effective date of these
acquisitions was 1 June 2007, the results of these wholly owned subsidiaries
have been included for the last three months of the financial year. Included
in the total cost of the investments (New Way R225,4 million; Gearing Moss
R39,4 million) are portions to be settled by the issuing of shares (New Way
40,5 million shares; Gearing Moss 3,7 million shares) with a fair value on the
effective date of R3,08 per share.
New Way provides heavy machinery for commerce, industry, mining and the public
sector, its primary focus being the sale of industrial engines as well as the
manufacturing, servicing and sale of generators. New Way has the sole
distribution rights for John Deere Industrial and Marine Diesel Engines, Funk
Axles and Transmissions in sub-Saharan Africa. Other agencies include, amongst
others, Mitsubishi, Doosan Infacore (formerly Daewoo Industrial) and Marathon
Electric.
Gearing Moss is a supplier of mobile sawmills and small log-processing
equipment to the sawmilling industry and tooling to the industrial woodworking
industry. Gearing Moss has agencies for a number of leading brands including
Wood-Mizer portable sawmills, the world leader in sawmills, as well as its own
range of sawmilling equipment.
Subsequent to year-end Austro also acquired the shares in, and claims against,
Neptune Plant (Proprietary) Limited and Neptune Plant Hire (Proprietary)
Limited, collectively ("Neptune"), which hire out industrial generators to
commerce and industry. The group now offers their generators for hire,
primarily in the Western Cape, but also worldwide. The dynamic nature of this
business has seen Neptune generators travelling to all seven continents. The
effective date of this acquisition was 1 September 2007, the results were not
included in the current financial year.
The directors are pleased to present the audited financial results of the
company for the year ended 31 August 2007 ("the current year").
FINANCIAL RESULTS
Austro has managed to maintain strong and consistent organic growth in revenue
and profitability as well as benefiting from Austro`s exciting acquisitions.
The impact of the New Way and Gearing Moss acquisitions have only been
included for the final quarter of the year, the full potential of these new
lines of business and resultant synergies have yet to be realised. Since
listing on the JSE management has adapted well to the new corporate reporting
environment and has tackled the challenges associated with new acquisitions in
a controlled and responsible manner.
The 58,7% growth in revenue from R175,9 million to R279,0 million was driven
by increased demand in the construction and allied sectors, price increases as
well as the acquisitions set out above.
The gross profit margin of 41,7% is consistent with the prior year.
Net profit for the year increased 95,5% from R27,6 million to R53,9 million.
Included in net profit for the year is a profit on disposal of property, plant
and equipment of approximately R6,4 million. The current year acquisitions of
New Way and Gearing Moss contributed significantly to the drive to increase
profits, with their contribution to net profit for the three months of R11,3
million and R1,4 million respectively. Had the group acquired these
subsidiaries at the beginning of the current financial year the group revenue
and profit before tax would have been R460,2 million and R110,4 million
respectively.
Earnings per share of 16,1 cents exceeded the forecast of 12,5 cents by 28,8%,
while headline earnings per share of 14,2 cents exceeded the forecast of 10,5
cents by 35,2%.
Austro increased its stock levels in order to meet customer demand as well as
taking advantage of competitive pricing from suppliers on favourable terms and
exchange rates.
Share capital and share premium increased as a result of the capital raising
undertaken at the time of listing, the issue of shares in relation to the
acquisitions, as well as the issue of shares for cash to Stanlib Asset
Management (Proprietary) Limited.
PROSPECTS
The environment in which Austro operates is extremely favourable. South Africa
is experiencing a level of sustained growth in GDP which is unparalleled in
economic history. Record expansion in the construction and allied sectors
helped GDP grow by 4,8% in the first quarter of 2007, resulting in 34
consecutive quarters of economic growth since 1998.
The construction industry as a whole, and Austro in particular, will benefit
from the economic commitments from Government, state enterprise investment
programmes and growing foreign investments. The group believes its success
will be underpinned by Government`s preparation for the 2010 FIFA World Cup,
which will see the upgrading of five stadiums, and substantial improvements to
public transportation and related infrastructure in the host cities. On a
provincial level the Gautrain development, and the ever-increasing demand for
new residential and commercial properties, and their need for wood-related
products, will also result in increased demand for all of Austro`s products
and services up to, and beyond 2010.
The growth in the economy has also highlighted key limitations of various
infrastructural elements, one of which is power shortages. South Africa`s
existing power generating capacity and infrastructure is insufficient to meet
the growing demand for power in the country. As the largest supplier of power
to sub-Saharan Africa, South Africa is also ill-equipped to meet the needs of
this market. As the economy expands, the lack of capacity and infrastructure
to deliver power is becoming a fundamental problem in all spheres of life.
Commerce and industry owners are increasingly aware of the loss of business
due to power outages. Customers include the industrial and commercial sectors
as well as residential and luxury developments, municipalities, hospitals and
ships - which due to increased traffic through our harbours as a result of
growing exports and imports, require uninterrupted power, and the rental or
acquisition of generators providing the only alternatives. The recent boom in
the mining sector has also seen an increased demand for free-standing diesel
generators in mine slurries. This has created additional, lucrative markets
for Austro`s recent acquisitions, New Way and Neptune.
The hiring out of generators by Neptune will allow the group to take full
advantage of the temporary or short-term demand for generators. Looking
forward the group will adopt a more aggressive approach towards the rental
market, by expanding Neptune`s business into a larger geographical area. The
necessary resources needed to grow the division into a sizeable contributor to
the group`s profits will be allocated in order to meet this objective.
ACQUISITION ACTIVITY
The parties have agreed that Austro will no longer pursue the acquisition of
Generator and Plant Hire (Proprietary) Limited.
DIVIDEND POLICY
The dividend policy will be reviewed periodically taking into account
prevailing circumstances and future cash requirements. Initially, all earnings
generated by the company will be utilised to fund future growth.
Accordingly, in line with company policy, no dividend has been declared for
the current year.
BLACK ECONOMIC EMPOWERMENT ("BEE")
Austro is committed to equal opportunity employment through various broad-
based black economic empowered initiatives and is actively pursuing real BEE
equity ownership.
BASIS OF PREPARATION
These summarised consolidated financial statements have been prepared and
presented in accordance with International Financial Reporting Standards
("IFRS"), the requirements of IAS 34 and in compliance with the Listing
Requirements of the JSE and the South African Companies Act of 1973. The
principal accounting policies used in the preparation of the results for the
year ended 31 August 2007 are consistent with those applied in the prior year.
AUDIT OPINION
These summarised consolidated financial statements have been audited by PKF
(Jhb) Inc whose unqualified audit opinion is available for inspection at the
company`s registered office.
APPRECIATION
Austro has grown phenomenally since its listing. We extend our sincere thanks
to our dedicated staff, whose commitment has been an integral part of the
group`s success. We also thank our customers, business partners, advisors,
suppliers and most importantly our shareholders for their unwavering support
and faith in the group.
By order of the board
David Solomon Brouze Daniel Rothlisberger
Chairman Managing director
Johannesburg
21 November 2007
Non-executive directors:
DS Brouze (Chairman), R Jonah, W Hauser
Executive directors:
D Rothlisberger, BD Downs
Registration number:
2001/029771/06
Business/registered address:
1125 Leader Road, Stormill Ext 4, Roodepoort, Johannesburg
Business postal address:
PO Box 1914, Florida, Johannesburg
Company secretary:
Probity Business Services (Proprietary) Limited
Transfer secretaries:
Computershare Investor Services 2004 (Proprietary) Limited
Sponsor:
Java Capital (Proprietary) Limited
Auditors:
PKF (Jhb) Inc.
Visit our website: www.austrogrouplimited.com
Date: 21/11/2007 16:50:11 Produced by the JSE SENS Department.
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