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ABK
ABK
ABK - African Brick - Financial Results For The 6 Months Ended 31 August 2007
AFRICAN BRICK CENTRE LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1999/006214/06)
Share code: ABK & ISIN: ZAE000105169
("African Brick" or "the company")
Financial results for the 6 months ended 31 august 2007
HIGHLIGHTS
- Revenue up by 20%
- Attributable earnings up by 66%
- Headline earnings up 65%
- Both EPS and HEPS up 69%
- Listing on ALTx on 08 October 2007
ABRIDGED INCOME
STATEMENTS
African African African Brick African Brick
Brick Brick Centre
Group Group Group (Pty) Ltd
6 months 6 months 12 months 6 months
ended ended ended ended
31-Aug-07 31-Aug- 28-Feb-07 31-Aug-07
06
Pro forma Pro Pro forma Actual
forma
(Note 2)
R `000 R `000 R `000 R `000
Revenue 57,062 47,394 95,900 63,380
Cost of Sales -27,258 -27,698 -57,437 -46,554
Gross Profit 29,804 19,696 38,463 16,826
Other Income 445 311 854 332
Operating expenses -10,660 -8,060 -16,605 -8,141
Profit before 19,589 11,947 22,712 9,017
interest and taxation
Profit/ (Loss) on -19 -46 -8 -18
disposal of non-
current assets
Investment Revenue 251 110 438 92
(interest received)
Fair value Adjustment - - 38,048 -
Finance Costs -169 -184 -394 -81
Profit before 19,652 11,826 60,796 9,010
taxation
Taxation -5,721 -3,426 -16,888 -2,624
Profit attributable
to ordinary 13,931 8,400 43,908 6,386
shareholders
Million Million Million Million
Weighted average 320 320 320 320
shares in issue
Note 1
Basic earnings per 4.4 2.6 13.7 2.0
share (EPS) (cents):
Reconciliation of R `000 R `000 R `000 R `000
headline earnings:
Profit attributable 13,931 8,400 43,908 6,386
to ordinary
shareholders
Adjusted for:
Profit/(Loss) on 13 33 6 13
disposal of non-
current assets (net
after tax)
Fair value - - -27,014 -
adjustments (net
after tax)
Headline earnings 13,944 8,433 16,900 6,399
attributable to
ordinary shareholders
Headline earnings per 4.4 2.6 5.3 2.0
share (HEPS) (cents):
Note 1: The pro forma weighted average number of shares in issue are based on
the sub-division and increase of the ordinary shares in issue into 320 000 000
ordinary shares in issue, as set out in the detailed prospectus dated 02 October
2007.
Note 2: The historical pro forma financial information for 28 February 2007 is
an extract from the reviewed aggregated pro forma financial information, as set
out in Annexure 2 of the detailed prospectus. African Brick Centre was
restructured with effect from 01 September 2007. In terms of the restructure,
African Brick Centre acquired 100% of the issued shares of African Brick (Pty)
Ltd, African Brick Lenasia (Pty) Ltd and Landton Properties (Pty) Ltd.
Note 3: The aggregated historical financial information does not take into
account any benefit from the capital raised pursuant to the private placing
ABRIDGED BALANCE SHEETS
31-Aug-07 28-Feb-07 31-Aug-07
Aggregated Aggregated African
Group Group Brick Centre
Financials Financials (Pty) Ltd
Audited (Company)
(Note 1)
Pro forma Pro forma Actual
R `000 R `000 R `000
ASSETS
Non current assets 55,144 54,612 9,474
Property, plant and equipment 16,364 15,831 9,463
Investment properties 38,429 38,429
Other non current assets 351 352 11
Current assets 41,573 27,339 25,657
Inventories 20,977 8,401 12,566
Trade and other receivables 16,033 10,146 11,517
Cash and cash equivalents 4,563 8,792 1,574
Loans receivable from group - - -
companies
Total assets 96,717 81,951 35,131
EQUITY AND LIABILITIES
Equity 65,187 51,256 17,506
Share capital - -
Revaluation surplus 4,242 4,242 3,452
Retained income 60,945 47,014 14,054
Non current liabilities 12,820 12,794 1,262
Interest-bearing liabilities 1,408 1,516 677
Deferred taxation 11,412 11,278 585
Current liabilities 18,710 17,901 16,363
Loans from group companies - - 367
Trade and other payables 6,915 7,879 11,307
Current portion interest- 1,124 1,210 540
bearing liabilities
Taxation payable 9,711 7,852 4,099
Provisions 960 960 50
Total equity and liabilities 96,717 81,951 35,131
Note 1: Individual companies now forming part of the African Brick Centre Group,
were audited as separate legal entities
Abridged cash flow
statements
6 months ended 12 months ended 6 months
ended
31-Aug-07 28-Feb-07 31-Aug-07
African Brick African Brick African Brick
Group Group Centre (Pty)
Ltd
(Company)
Pro forma Pro forma Actual
R `000 R `000 R `000
Cash flows from -2,528 13,522 -2,389
operating activities
Cash flows from -1,508 -358 -503
investing activities
Cash flows from -193 -7,182 246
financing activities
Net increase/(decrease) - 4,229 5,982 - 2,646
in cash and cash
equivalents
Cash and cash 8,792 2,810 4,220
equivalents at beginning
of period
Cash and cash 4,563 8,792 1,574
equivalents at end of
period
Abridged statements of changes in equity
31-Aug-07 28-Feb-07 31-Aug-07
African Brick African Brick African Brick
Group Group Centre (Pty)
Ltd
(Company)
Pro forma Pro forma Actual
R `000 R `000 R `000
Balance at beginning of 51,256 5,786 11,120
period
Net profit for the 13,931 43,908 6,386
period
Revaluation of land & - 4,242 -
buildings
Dividends - -2,680 -
Balance at end of period 65,187 51,256 17,506
REVIEW OF TRADING RESULTS
The directors of African Brick Centre are pleased to present the interim
financial results for the six months ended 31 August 2007 ("the interim
period").
FINANCIAL RESULTS
Revenue increased during the interim period by 20% to R57 million (2006: R47
million). This reflects the Group`s continuing effort to drive growth and the
expansion of the African Brick Centre brand.
Gross profit increased by 51.3% to R29,8 million (2006: R19,7 million). This is
a result of improved productivity, higher volumes of production as well as fine
tuning of the Group`s pricing policies. Gross profit margins increased to 52.2%,
up from the 41.6% margins achieved during the previous interim period. Profit
before taxation increased by 66.2% to R19,6 million, reflecting the Group`s
effective cost management approach. Earnings attributable to ordinary
shareholders increased by 66% to R13,9 million (2006: R8,4 million).
The Group`s investment in working capital has increased, primarily, to
accommodate growth. This fact is evident from the Cash Flow Statement for the
six months ended 31 August 2007. However, the capital raised as a result of the
private placing, has had an extremely positive impact on the cash position of
the company.
LISTING ON ALTx
Pursuant to raising capital of R45 million, the Company listed on the
Alternative Exchange ("ALTx") of the JSE on 8 October 2007.
MANUFACTURING FACILITIES
The manufacturing of African Brick Centre currently consists of two factories,
situated at Krugersdorp and Lenasia respectively.
The combined production capacity of the two manufacturing plants is currently
estimated to be in excess of 90 million bricks per annum. The vast majority of
outputs from the manufacturing operations are sold to the retailing arm of
African Brick Centre, at market related wholesale prices. This is a key strategy
in ensuring that a consistent pricing policy is being applied over the full
spectrum of wholesale and retail customers of the African Brick Group.
RETAIL STORES
African Brick Centre sells its production through 9 of its own and 18 franchise
operated centres.
The retail outlet situated at Head Office is currently being upgraded to
accommodate the expansion of business activities. The Group has focused on
boosting the African Brick Centre brand. A renewed drive was launched to enhance
this brand.
PROSPECTS
Traditionally the second half of the financial reporting period is known to be
slower than the first half. Revenue for the months of September and October are
however still within the annual budget. The Group is currently incurring capital
as well as operational expenses in order to further improve its strategic
position in the market. The favourable cash position after the private placing,
will enable the Group to continue its focus on growth. The pro-forma historical
financial information does not take into account any benefits from the capital
raised pursuant to the private placing.
DIVIDEND POLICY
The Board of Directors has decided not to declare any interim dividends. No
change to the stated dividend policy, as per the detailed prospectus, is
anticipated.
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 results have not been reviewed or audited by the company`s auditors.
These pro forma interim financial statements incorporate the Financial
Statements of the company and its subsidiaries. All inter-company transactions
were eliminated.
BY ORDER OF THE BOARD
21 November 2007
B VAN GRAAN B REYNEKE
CHIEF EXECUTIVE OFFICER MANAGING DIRECTOR
CORPORATE INFORMATION
Non-Executive Directors DR O VAN GRAAN (Chairman)
MJ JACK
D MOSTERT
Executive Directors B VAN GRAAN (CEO)
B REYNEKE (MD)
TC MEYER (FD)
Designated and Corporate Advisor: PSG Capital (Pty) Ltd
Registration No: 1999/006214/06
Registered Address: 31 Biccard Street
Krugersdorp
1739
Postal Address: P O Box 315
Krugersdorp
1740
Company Secretary: D Arvanitis & Co
Tel: (011)953-1305
Fax:(011)660-7322
Transfer Secretaries: Link Market Services
South Africa (Pty) Ltd
Date: 22/11/2007 07:48:45 Produced by the JSE SENS Department.
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