| Thu 28 Feb 2008, 15:11 | | SKY - Sea Kay Holdings Limited - Unaudited interim |
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SKY
SKY
SKY - Sea Kay Holdings Limited - Unaudited interim group results for the six
months ended 31 December 2007
SEA KAY HOLDINGS LIMITED
(formerly Pilvest CO 1 (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
(Registration number 2006/004967/06)
JSE code: SKY
ISIN: ZAE000102380
("Sea Kay")
UNAUDITED INTERIM GROUP RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
The directors of Sea Kay are pleased to announce the group`s interim results for
the six months ended 31 December 2007. The comparative figures for the year
ended June 2007 only include trading activities for a six month period, as prior
to this period Sea Kay was dormant.
CONDENSED INCOME STATEMENTS
Revised Unaudited Audited
profit Six months Year
forecast ended 31 ended
Year December 30
ending 30 June
June
2008 2007 2007
R000 R000 R000
Revenue 728,146 236,462 250,301
Operating profit 129,649 40,191 47,938
Investment revenue - 7,015 2,369
Finance costs (11,991) (6,182) (4,882)
Profit before taxation 117,658 41,024 45,428
Taxation (34,121) (12,231) (4,318)
Profit after taxation 83,537 28,793 41,110
Allocated as follows:
Equity shareholders of Sea Kay
Holdings Limited 28,581 41,110
Minority Interest 212 -
28,793 41,110
Unaudite Audited
d Year
Six ended
months 30
ended 31 June
December 2007
2007
Reconciliation of headline
earnings
Profit after taxation 28,793 41,110
Headline earnings 28,793 41,110
Weighted average number of 471,723 326,653
shares
Earnings per share (cents) 6,10 12,59
Headline earnings per share 6,10 12,59
(cents)
CONDENSED BALANCE SHEETS
Unaudited Audited
Six Year
months ended
ended 31 30
December June
2007 2007
ASSETS R000 R000
Non-current assets 101,880 88,579
Property, plant and equipment 17,449 10,991
Goodwill 84,431 77,588
Current assets 316,501 146,592
Inventories 19,358 9,940
Trade and other receivables 235,919 121,698
Other financial assets - 573
Taxation receivable - 1,050
Construction contracts and receivables 47,948 12,184
Cash and bank balances 13,276 1,147
Total assets 418,381 235,171
EQUITY AND LIABILITIES
Total equity 223,674 144,816
Issued capital 153,099 106,536
Retained earnings 66,861 38,280
Minority interest 3,714 -
Non-current liabilities 56,517 19,259
Other financial liabilities 50,090 13,243
Finance lease 3,621 3,120
Deferred taxation 2,806 2,896
Current liabilities 138,190 71,096
Trade and other payables 71,750 45,900
Other financial liabilities - 3,185
Current tax payable 17,984 -
Loans payable 28,603 10,761
Finance lease 1,973 1,909
Provisions 15 747
Bank overdrafts 17,865 8,594
Total equity and liabilities 418,381 235,171
CONDENSED STATEMENT OF CHANGES IN EQUITY
Unaudited Audited
Six Year
months ended
ended 31 30 June
December 2007
2007
R000 R000
Balance at 1 July 144,816 -
Shares issued prior 46,563 106,536
to listing
Ordinary dividends - (2,830)
Minorities purchased 3,502 -
Profit for the period 28,793 41,110
Balance at end of 223,674 144,816
period
CONDENSED CASH FLOW STATEMENTS
Unaudited Audited
Six months Year
ended 31 ended
December 30 June
2007 2007
R000 R000
Cash flows from operating activities (75,477) (54,466)
Cash utilised in operating activities (82,194) (48,054)
Net finance costs 833 (2,477)
Taxation received (paid) 5,884 (3,935)
Cash utilised in investment activities (20,296) 17,669
Property, plant and machinery acquired (7,091) (12,283)
Sale of Property, plant and equipment - 67
Investments in subsidiaries (13,778) 29,885
Repayment of loan 573 -
Cash flows from financing activities 98,631 29,350
Proceeds on shares issued 46,563 -
Long term liabilities raised / (repaid) 52,068 32,180
Ordinary dividends paid - (2,830)
Increase/(decrease) in cash and cash 2,858 (7,447)
equivalents
Cash and cash equivalents at beginning of (7,447) -
period
Cash and cash equivalents at end of period (4,589) (7,447)
CONDENSED SEGMENTAL ANALYSIS
Unaudited Audited
Six months Year
ended 31 ended
December 30 June
2007 2007
R000 R000
Revenue 236,462 250,301
Manufacturing 4,268 4,143
Construction 232,194 246,158
Profit after taxation 28,793 41,110
Manufacturing 2,196 1,996
Construction 26,597 39,114
FINANCIAL OVERVIEW
The results have been prepared in terms of International Financial Reporting
Standards ("IFRS"), IAS34: Interim Financial Reporting, Schedule 4 of the South
African Companies Act and in terms of the company`s current accounting policies.
Headline earnings of R28,8 million (6.10 cents per share) was achieved for the
period ended 31 December 2007. The results are in line with the revised forecast
published in respect of the year ending 30 June 2008. The first six months of a
financial year traditionally contribute less to revenue than the latter part of
the financial year due to Government spending, which increases in the latter
half of the financial year as a result of appointment time frames on the
awarding of subsidised housing programmes.
Sea Kay Engineering Services (Pty) Ltd, the main operating subsidiary of the Sea
Kay group, increased its revenue by more than 85% compared to the corresponding
prior year period as a result of increased Government and private sector
spending.
At the end of the period, the group was cash negative with a balance of R4,6
million. Despite the exceptional performance in operating profits, the cash
generated from operations was negative of R82 million. This is mainly due to the
rapid expansion and growth in revenue and due to contract conditions in terms of
payment. Subsequent to period end, the company has collected R84,3 million on
outstanding debtors. The Department of Housing Gauteng has changed payment
conditions by de-linking certain processes that slowed payment terms in the
past. Contracting conditions looking forward are expected to generate a positive
cash flow and will result in an improvement of working capital
Capital expenditure and depreciation for the period ended 31 December
2007
Unaudited Audited
Six months ended Year ended
31 December 2007 30 June 2007
R000 R000
Capital expenditure for the period 7,091 12,282
Depreciation for the period 391 1,050
Capital expenditure committed or 9,855 19,500
authorised for the period
OPERATIONAL OVERVIEW
Construction:
Sea Kay continues to improve production levels and prospects for the remainder
of the year remain positive. All the subsidiaries experienced significant growth
as the spending by Government and the financial section continued to
materialise.
Ibuyile Development Consortium:
Ibuyile Development Consortium is responsible for the turn-key development of
the Delft Symphony section of the greater N2 Gateway housing project.
The N2 Gateway project in Cape Town experienced some delays as a result of the
illegal occupation of the completed and semi-completed houses in the
abovementioned project during December 2007. As a result of a court order
obtained on 6 February 2008 through an urgent application, the illegal occupants
were removed on 19 February 2008. Steps have been taken to manage the effect of
the delays and management is confident that it will not have a negative impact
on the results for the full financial year.
Sea Kay Engineering Services (Pty) Ltd:
Sea Kay Engineering Services is a mass housing contractor.
Various new projects have commenced, including RDP, credit link and bonded
houses in Gauteng with the Western Cape BMG and credit link houses.
Prospects:
Management is confident that there is further potential for growth in the group
in all three spheres, namely construction, material manufacturing and property
development. The State President reiterated in his State of the Nation address
on 8 February 2008 that the backlog of 2.3 million houses remains a high
priority for the National Government and that 260,000 houses must be constructed
per annum to eradicate informal settlements.
Management is confident that Sea Kay will be able to deliver further turn-key
development projects on a larger scale. Challenges facing the group relate to
the application of proper risk management in the selection process of suitable
projects, improving margins and slowly increasing turnover. Currently Sea Kay`s
12 month forward construction order book is R824 million.
The directors are confident that in the absence of any unexpected events or
changes in the current operating environment, the projected earnings growth for
the year ending 30 June 2008 will be achieved.
DIVIDENDS
The board has reviewed the current period`s results together with the forecast
for 2008 and has decided not to declare a dividend.
ACQUISITION
The acquisition of an additional 45% of the Ibuyile Development Consortium was
postponed to 1 October 2007. The purchase price was re-calculated from R28
million to R13.8 million. The potential development profits on certain aspects
of the N2 Gateway project will also improve margins for the Sea Kay group in the
next six months.
28 February 2008
Registered office and postal address:
7 Patton Road, Duncanville, Vereeniging, 1930
PO Box 925, Meyerton, 1960
Website: www.seakay.co.za
Directors:
MH Lomas* (Chairman), C Kruger (Group CEO), K van der Vyver (Group Financial
Director), P van der Schyf, A Deshmukh*, BW Marais*, C Louw*
*independent non-executive.
Company secretary:
H Steyn
Transfer secretaries:
Link Market Services South Africa (Proprietary) Limited
Auditors
SAB&T Incorporated, Registered Auditors, Chartered Accountants (SA)
Sponsor
Ernst & Young Sponsors (Proprietary) Limited
Date: 28/02/2008 15:11:08 Produced by the JSE SENS Department.
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