| Mon 25 Feb 2008, 14:50 | | WBO - Wilson Bayly Holmes - Unaudited financial statements for the six months |
|
WBO
WBO
WBO - Wilson Bayly Holmes - Unaudited financial statements for the six months
ended 31 December 2007
WILSON BAYLY HOLMES
OVCON LIMITED
Building and civil engineering contractors
(Registration no. 1982/011014/06)
ISIN No: ZAE 000009932
Share code: WBO
Unaudited financial statements For the six months ended 31 December 2007
Revenue up 25%
Operating profit up 68%
Adjusted headline earnings up 77%
CONDENSED INCOME STATEMENT
Unaudited Unaudited Audited
% December December June
increase 2007 2006 2007
R`000 R`000 R`000
Revenue 24,9 5 037 438 4 031 860 8 127 793
Operating profit 68,1 290 010 172 554 415 877
Fair value adjustment 2 089 1 201 5 689
to concession
investment
Share-based payments (5 926) (30 206) (34 610)
expense
Impairment of goodwill (8 623) - (10 731)
Profit before net 277 550 143 549 376 225
finance income
Net finance income 51 132 15 393 55 399
Profit before 328 682 158 942 431 624
associate income
Income from associates 7 134 7 917 14 679
Profit before taxation 335 816 166 859 446 303
Taxation (101 130) (55 726) (127 999)
Net profit 111,2 234 686 111 133 318 304
Attributable to
Equity shareholders of 211 882 96 466 276 180
the parent
Minority interests 22 804 14 667 42 124
234 686 111 133 318 304
Reconciliation of
headline earnings
Net profit 211 882 96 466 276 180
Adjustments:
Impairment of 8 623 - 10 731
goodwill
Profit on sale of (1 678) (1 386) (4 299)
property, plant and
equipment (net of
tax)
Headline earnings 130,2 218 827 95 080 282 612
BEE share-based - 28 391 28 391
payments expense
Adjusted headline 77,2 218 827 123 471 311 003
earnings
Ordinary shares
Issued (`000) 66 000 66 000 66 000
Weighted average 55 190 55 190 55 190
number of shares
(`000)
Earnings per share 383,9 174,8 500,4
(cents)
Headline earnings per 396,5 172,3 512,1
share (cents)
Adjusted headline 396,5 223,7 563,5
earnings per share
(cents)
Dividend declared per 60,0 36,0 121,0
share (cents)
CONDENSED BALANCE SHEET
Unaudited Unaudited Audited
December December June
2007 2006 2007
R`000 R`000 R`000
ASSETS
Non-current assets 1 324 670 831 530 1 064 673
Property, plant and equipment 890 465 547 280 752 137
Goodwill 201 221 92 624 86 421
Investments 139 469 110 986 133 293
Other non-current assets 93 515 80 640 92 822
Current assets 3 631 380 2 332 632 3 183 655
Cash and cash equivalents 1 722 777 700 509 1 269 015
Other current assets 1 908 603 1 632 123 1 914 640
Total assets 4 956 050 3 164 162 4 248 328
EQUITY AND LIABILITIES
Total equity 1 222 392 874 133 1 081 404
Shareholders` equity 1 157 299 828 773 1 002 702
Minority interests 65 093 45 360 78 702
Non-current liabilities 141 874 183 618 117 232
Long-term financial 141 874 144 574 117 232
liabilities
Other non-current liabilities - 39 044 -
Current liabilities 3 591 784 2 106 411 3 049 692
Bank overdrafts 150 598 28 612 564
Other current liabilities 3 441 186 2 077 799 3 049 128
Total equity and liabilities 4 956 050 3 164 162 4 248 328
Net tangible asset value per 1 732 1 334 1 660
share (cents)
CONDENSED CASH FLOW STATEMENT
Unaudited Unaudited Audited
December December June
2007 2006 2007
R`000 R`000 R`000
Cash generated from operations 829 755 297 677 1 157 400
Net finance income 51 132 15 393 55 399
Taxation paid (158 226) (32 621) (80 275)
Dividend paid (56 158) (35 640) (59 400)
Cash retained from operations 666 503 244 809 1 073 124
Net cash flow from investing (392 989) (191 889) (449 953)
activities
Net cash flow from financing 19 450 (7 026) 12 231
activities
Net increase in cash and cash 292 964 45 894 635 402
equivalents
Cash and cash equivalents at the 1 268 451 626 003 626 003
beginning of the period
Cash acquired on acquisition of 10 764 - 7 046
subsidiaries
Cash and cash equivalents at end 1 572 179 671 897 1 268 451
of period
CONDENSED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
December December June
2007 2006 2007
R`000 R`000 R`000
Total equity at the beginning of 1 081 404 762 778 762 778
the period
Issue of shares - 26 047 26 047
Net profit for the period 234 686 111 133 318 304
Translation of foreign entities (7 053) 9 227 27 083
Share-based payments expense 5 926 30 206 34 610
Movement in other reserves - (5 885) (4 285)
Dividend paid (56 158) (35 640) (59 400)
Change in shareholding of (36 413) (23 733) (23 733)
subsidiaries
Total equity at the end of the 1 222 392 874 133 1 081 404
period
SEGMENTAL INFORMATION
Unaudited
December
2007
R`000
Operating Operating
margin % margin %
Segment revenue
- Building and
civil engineering 3 604 800
- Roads and earthworks 1 211 391
- Industrial 183 689
- Property and concessions 37 558
5 037 438
Segment result
(operating profit)
- Building and
civil engineering 4,0 142 728 3,4
- Roads and earthworks 8,2 99 589 4,8
- Industrial 21,4 39 362 8,0
- Property and concessions 22,2 8 331 16,4
5,8 290 010 4,3
SECONDARY SEGMENTS
Segment revenue
- Local 3 425 388
- International 1 612 050
5 037 438
Segment result
(operating profit)
- Local 5,4 183 877 3,8
- International 6,6 106 133 5,3
5,8 290 010 4,3
SEGMENT
AL INFORMATION
Unaudited Audited
December June
2006 2007
R`000 R`000
Operating
margin %
Segment revenue
- Building and
civil engineering 2 847 018 5 716 322
- Roads and earthworks 918 505 1 877 000
- Industrial 151 654 289 648
- Property and concessions 114 683 244 823
4 031 860 8 127 793
Segment result
(operating profit)
- Building and
civil engineering 97 567 3,9 222 453
- Roads and earthworks 44 111 4,1 76 128
- Industrial 12 123 22,5 65 083
- Property and concessions 18 753 21,3 52 213
172 554 5,1 415 877
SECONDARY SEGMENTS
Segment revenue
- Local 2 769 888 5 515 206
- International 1 261 972 2 612 587
4 031 860 8 127 793
Segment result
(operating profit)
- Local 105 603 5,5 303 519
- International 66 951 4,3 112 358
172 554 5,1 415 877
Accounting policies
The consolidated interim unaudited financial statements have been prepared in
accordance with IAS34: Interim Financial Reporting, the International Financial
Reporting Standards (IFRS) and Schedule 4 of the South African Companies Act.
The accounting policies adopted in the preparation of these financial statements
are consistent with those used to prepare the comparative interim financial
statements and the annual financial statements for the year ended 30 June 2007.
COMMENTARY
Overview of results
The group has produced excellent results for the six months to 31 December 2007.
Headline earnings have increased by 130%. Revenue has increased by 25% to R5
billion, and the operating profit has increased by 68% to R290 million from R173
million. The operating margin for the six months under review has increased to
5,8% (2006: 4,3%). The effective tax rate for the period is 30,1% (2006: 29,6%).
The interim result is much higher than the comparative six months to 31 December
2006 because of the disparity in earnings between the first and second halves of
the 2007 financial year where the second half profits were substantially higher
than those achieved in the first half. On 11 December last year we indicated
that headline earnings for the full year would be between 40% and 50% higher
than those reported for the year ended 30 June 2007. Notwithstanding the result
achieved to 31 December 2007 this forecast is still the view of the board.
An interim dividend of 60 cents per ordinary share has been declared which is
66% higher than the previous interim dividend of 36 cents.
Capital expenditure for the six months amounted to R207 million of which R59
million was financed through instalment sales. The net cash position increased
from R672 million in December 2006 to R1,6 billion in December 2007. The total
financial guarantees issued to third parties amounted to R2,9 billion as at 31
December 2007 compared to R2,5 billion at 30 June 2007.
Building and Civil Division
The division started 2008 with an order book of R6,8 billion (December 2006:
R3,5 billion), an increase of 94%. Construction of the Greenpoint, Durban and
Polokwane Stadiums is well underway. At the end of 2007 the labour force at the
Durban stadium went on strike. All the issues raised by the unions were resolved
and work was resumed with minimal disruption. Greenpoint Stadium has little
float left in the construction programme and management is watching this very
carefully. The rains hampered the start of the King Shaka International Airport
last year. This year progress has been good and the contract is progressing
well. Construction of the Central Terminal Building and the complete remodelling
of the international terminal at OR Tambo International Airport is on schedule
for opening prior to the World Cup. Other major contracts in Gauteng, Western
Cape, Eastern Cape and KwaZulu Natal are all progressing well.
The levels of civil work have increased with major contracts for Anglo Platinum,
Anglo Coal, Impala Platinum Holdings and other mining houses progressing well.
Highlights are the successful completions of the Potgietersrust Platinum Mine
concentrator and the East London Industrial Development Zone. We have started
work on the Nkomati Nickel Mine concentrator contract worth R160 million.
WBHO`s activities in Australia are conducted through the Probuild group in which
we have a 60% stake. Results have been slightly ahead of budget in Australian
dollars but show a 35% improvement when converted to rands. Since the start of
2008, the group has been successful in filling its order book - particularly in
Melbourne where a number of large contracts have been awarded. Probuild now has
an order book of R5,7 billion (December 2006: R1,8 billion) extending over a
number of years. Results for the remainder of the year are expected to show an
improvement on those achieved during the first six months.
Roads and Earthworks Division
The order book at the end of December was R3 billion (December 2006: R1,7
billion) an increase of 76% compared to the previous period. The division is
operating in Ghana, Zambia and the DRC where we are involved in a number of
mining infrastructure projects. The level of activity in Botswana remains at a
satisfactory level.
Our contracting activities in Mozambique have decreased with the completion of
several road contracts. Some minor works are continuing at the Maputo harbour.
Locally, the division is involved in major mining infrastructure works for new
platinum and coal mines. Our major road contracts at Mount Frere in the Eastern
Cape and at Barberton in Mpumalanga are progressing well.
Work at the OR Tambo and King Shaka International Airports is ongoing. Our
contracts for the construction of pipelines near Polokwane and Mokopane are
complete and the major upgrade of pipelines for Sapref in Durban will be
complete by April this year. With the recent acquisition of Insitu Pipelines
(Pty) Limited the division is well placed to supply specialist pipe solutions to
its industrial clients.
In the six months under review a number of golf courses and the associated
housing infrastructure have been completed.
Property and Concessions
Our property interests in Simbithi Eco Estate north of Durban and St Francis
Links near Port Elizabeth remain positive, however the earn-out is anticipated
to progress over a longer period.
The King Shaka International Airport, a design and build project is progressing
well. We continue to hold a 3,6% stake in the N4 toll road concession company
and the group`s participation in a number of petroleum and gas projects in
Mozambique has exciting prospects.
Industrials
During the period under review WBHO entered into a partnership with certain
investment funds managed by Brait South Africa Limited and Caracal (Pty) Limited
which resulted in Capital Africa Steel (Pty) Limited`s (CAS) capital being
restructured. The consequence of this transaction is, effective from 1 January
2008, WBHO`s stake in the equity of CAS reduces from being a wholly-owned
subsidiary to 50% with the Brait interests holding 40% and Caracal 10%.
CAS has considerable funds at its disposal and the intention is to rapidly
expand its interests in the steel industry, particularly products used in the
construction industry as well as other construction related products. Arising
from the restructure, CAS has acquired Symo Corporation, a long established
steel engineering business operating from premises in Elandsfontein as well as a
60% interest in Steel Mecca, a steel trading company in Rustenburg.
Despite the decrease in equity, WBHO`s earnings from CAS are expected to be of
the same order as those achieved in the previous year.
Training
Skills shortages at all levels of management are acute but we take confidence
from the outstanding performance of our construction teams. Last year we
increased our revenue by R2 billion and this year we will do the same. We have
managed to achieve this by introducing intensive training programmes for South
Africans of all races and have not imported any personnel from outside South
Africa. We believe this is a very special achievement. Expenditure on training
will rise to R14 million for this financial year.
Prospects
As reflected in the Business Confidence Index, 2008 did not get off to a good
start. It is still too early to assess the full implications of the power
outages on our sites and suppliers. The weakening of the rand will increase the
cost of imported capital goods and the increase in interest rates has led to a
decrease in activity in residential and retail building.
Crime remains at unacceptable levels encouraging the outflow of key qualified
people from the industry to areas of high demand such as the Emirates and
Australia. A large amount of work needs to be done especially in the provision
of infrastructure and we expect strong demand for our services beyond 2010.
Nevertheless we feel confident. Our order book at R15,5 billion has never been
higher and is made up of contracts in which we have to a large extent mitigated
the risks associated with this inflationary environment.
Dividend declaration
Notice is hereby given that the directors have declared an interim dividend of
60 cents per share (2007: 36 cents) payable to shareholders in respect of the
six months ended 31 December 2007.
The following dates have reference:
Last day to trade cum-dividend Friday, 11 April 2008
Trading ex-dividend commences Monday, 14 April 2008
Record date Friday, 18 April 2008
Payment date Monday, 21 April 2008
Shares may not be dematerialised or rematerialised between Monday, 14 April 2008
and Friday, 18 April 2008, both dates inclusive.
For and on behalf of the board
MS Wylie NS Maziya
Chairman Director
22 February 2008
Sponsor:
Investec Bank Limited
Date: 25/02/2008 14:50:27 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
