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PKH
PKH
PKH - Protech - Financial effects of the acquisitions and withdrawal of
cautionary announcement
Protech Khuthele Holdings Limited
(formerly M&W Prinsloo Management Services (Pty) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2000/024352/06)
JSE code: PKH & ISIN: ZAE000101986
("Protech" or "the Company")
FINANCIAL EFFECTS OF THE ACQUISITIONS AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
1. Introduction
Shareholders are referred to the announcement dated 10 October 2007, in which
they were advised that Protech had, subject to certain conditions precedent,
purchased the businesses of Instant Concrete Products (Proprietary) Limited
("the Instant Concrete business"); Amadou Investments (Proprietary) Limited,
Oudema Concrete (Proprietary) Limited, Rockcrete Readymix (Proprietary) Limited
and Rockcrete Transport (Proprietary) Limited, ("the Rockcrete business") and
acquired the premises from which a portion of the Instant Concrete business is
operated ("the fixed property"), which property is owned by Mille Investments
189 (Proprietary) Limited) ("Mille") from the shareholders of those companies.
Collectively referred to as "the acquisitions".
2. Conditions precedent
The directors advise that the due diligence exercise on the acquisitions has
now been completed and accordingly set out below the unaudited pro forma
financial effects of the acquisitions.
Shareholders are further advised that the conditions precedent to the
acquisitions have been met save for:
2.1 Unconditional written approval of the Competition Commission being
obtained; and
2.2 The conclusion of service and relevant restraint of trade agreements with
identified key management members of the Instant Concrete and Rockcrete
businesses.
3. Rationale for the acquisitions
The acquisitions were made in line with the Company`s strategy to acquire
businesses which are operationally complementary in vertically integrating the
Company`s key supply chain elements.
The acquisitions are expected to make a positive contribution to the
operational efficiencies and will improve the margins of the Protech group as a
whole.
4. Funding of acquisitions
The acquisitions will be funded by a combination of cash and debt.
5. Unaudited pro forma financial effects of the acquisitions
The unaudited pro forma financial effects for which the directors of Protech
are responsible, set out below are provided for illustrative purposes only to
provide information about how the acquisitions may have impacted on Protech`s
results and financial position. Due to the nature of the unaudited pro forma
financial information, it may not give a fair presentation of the Company`s
results and financial position after the acquisitions. The unaudited pro forma
financial effects are based on the reviewed financial information of Protech at
28 February 2007 and are presented in a manner consistent with the format and
accounting policies adopted by Protech.
5.1 Effect of the acquisitions on the net asset value of Protech
The historical net asset value of the businesses being acquired amounts to
R 23.5 million. It must be noted that this net asset value is calculated by
using the audited historical depreciated book values of the assets of the
businesses as at 30 June 2007. In terms of IFRS the assets acquired will be
revalued and included in the financial records of Protech at fair value.
5.2 Effect of the acquisitions on the historical unaudited pro forma results
The historical aggregated after tax earnings of the required businesses as per
their audited financial statements as at 30 June 2007 amount to R 8.9 million.
5.1.3. Effect of acquisitions table
Before the After the Percentage
Acquisitions Acquisitions Change (%)
Earnings per share (cents) 10.3(1) 10.5(3) 1.9%
Headline earnings per share
(cents) 12.0(1) 12.2(3) 1.7%
Diluted earnings per share
(cents) 10.3 10.5 1.9%
Net asset value per share
(cents) 22.0(1) 28.4(2) 29.1%
Net tangible asset value per 22.0(1) 28.4 29.1%
Share (cents)
Number of shares in issue
(`000) 362 500 362 500
Weighted average number of
shares (`000) 350 000 350 000
Notes:
1. Extracted from the pre listing statement of Protech issued on 30 July 2007
representing the pro forma results of the Company for the 12 months ended 28
February 2007. The pro forma financial effects have been based on Protech`s
pro forma results for the 12 months ended 28 February 2007 in order to align
them with the audited annual results of the acquisitions.
2. The net asset value per share after the acquisitions was calculated applying
the following assumptions.
a. The value of the net assets acquired is based on the audited book values at
30 June 2007.
b. The purchase consideration will be funded by a combination of cash and debt
to the value of R 79.4 million.
3. The earnings per share and headline earnings per share calculations in
the after acquisitions column are based on the following assumptions:
a. Earnings were adjusted to reflect the additional cost related to the portion
of the debt incurred to fund the acquisitions.
b. The earnings of the acquired businesses are based on the aggregated
historical earnings of all the acquired businesses as they appear in the
audited annual financial statements for the 12 months ended 30 June 2007.
6. Withdrawal of cautionary announcement
Shareholders are advised that caution is no longer required to be exercised by
them when dealing in Protech securities.
Johannesburg
30 November 2007
SPONSOR:
Ernst & Young Sponsors (Pty) Ltd
(Registration number 2000/031843/07)
Date: 30/11/2007 08:30:01 Produced by the JSE SENS Department.
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