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RBA
RBA
RBA - RBA Holdings - Audited Results For The Year Ended 31 December 2007
RBA Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1999/009701/06)
Share Code: RBA
ISIN Code: ZAE000104154
RBA Holdings Limited ("RBA" or "the group")
AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007
Highlights
- Revenue up 39%
- Headline earnings per share up 91%
- Net asset value per share up 327%
Consolidated Balance Sheet
Year Ended Year Ended
31 December 31 December
2007 2006 Audited
Audited
R`000 R`000
Assets
Non-Current Assets 64 628 30 459
Investment properties 24 718 18 453
Property, plant and equipment 5 509 4 148
Goodwill 231 -
Investments in associates 9 779 3 208
Stands held for trading 7 819 4 650
Deposits for land and stand 13 572 -
allocations
Loans to RBA employees share 3 000 -
trust
Current Assets 79 220 28 935
Stands held for trading 23 152 453
Construction contracts in 36 137 18 567
progress
Prepayments and other 6 642 3 568
receivables
Deposits for land and stand 10 961 6 339
allocations
Cash and cash equivalents 2 328 8
Total assets 143 848 59 394
Equity and liabilities 85 165 18 001
Share capital 28 393 1
Retained income 53 516 17 396
Minority interest 3 256 604
Liabilities
Non-current liabilities 22 824 14 164
Shareholders and related loans - 1 865
Borrowings 14 662 7 245
Finance lease obligation 1 731 2 277
Deferred tax 6 431 2 777
Current liabilities 35 859 27 229
Current portion of borrowings 19 224 1 114
Finance lease obligation 2 097 1 024
Taxation payable 3 629 6 761
Trade and other payables 7 124 7 847
Construction contracts in 3 785 10 428
progress
Bank overdraft - 55
Total equity and liabilities 143 848 59 394
Number of shares in issue 310 000 000 280 000 000
Net asset value per share 27.47 6.43
(cents)
Tangible net asset value per 27.40 6.43
share (cents)
Consolidated Income Statement
31 31 %
December December Change
2007 2006
Audited Audited
R`000 R`000
Revenue 244 046 175 819 39%
Cost of sales (156 218) (120 372)
Gross profit 87 828 55 447
Other income 7 211 8 261
Operating costs (39 317) (33 745)
Operating profit 55 722 29 963 86%
Investment Income 580 3
Finance costs (2 085) (2 089)
Profit before taxation 54 217 27 877
Taxation (15 769) (8 728)
Profit for the period 38 448 19 149 101%
Profit/(Loss) from associate 324 (165)
companies
Minority interest (loss) (2 652) (36)
Net profit for the period 36 120 18 948 91%
Reconciliation of headline
earnings
Profit attributable to 36 120 18 948
ordinary shareholders
Adjusted for profit on (142) -
disposal of property, plant
and equipment
Fair value adjustment of (1 324) (1 300)
investment property
Headline earnings 34 654 17 648 96%
attributable to ordinary
shareholders
Weighted average number of 288 383 280 000
shares in issue (note 1) 562 000
Basic earnings per share 12.52 6.77 85%
(cents)
Headline earnings per share 12.02 6.3 91%
(cents)
Note:
1. In order to make the earnings per share calculations more meaningful, the
weighted average number of shares in issue has taken into account the
effect of the capital restructurings undertaken during the listing in
September 2007.
Consolidated Cash Flow Statement
31 December 31 December
2007 2006
Audited Audited
R`000 R`000
Cash flows from operating (13 320) 11 643
activities
Cash generated from operations 3 201 20 453
Interest received 580 3
Interest paid (2 085) (2 089)
Dividend paid - (5 000)
Taxation paid (15 016) (1 724)
Cash flows from investing (27 316) (5 556)
activities
Acquisition of property, plant (3 523) (1 067)
and equipment
Proceeds on disposal of 600 -
property, plant and equipment
Acquisition of investment (2 799) (4 489)
property
Deposits paid for land and (18 194) -
stand allocations
Purchase of non current land (3 170) -
for trading
Business combinations (230) -
Cash flows from financing 43 011 (8 385)
activities
Loans raised 26 054 2 728
Loans repaid (9 572) (11 661)
Proceeds on share issue 28 394 -
Shareholder`s loans (repaid) / (1 865) 548
raised
Cash flows for the period 2 375 (2 298)
Cash and cash equivalents at (47) 2 251
beginning of period
Cash and cash equivalents at 2 328 (47)
end of period
Segment Report
Gauteng Region Limpopo Region Consolidated
R`000 R`000
31 December 31 31 31 31 31 December
2007 December December December December 2006
Audited 2006 2007 2006 2007 Audited
R`000 Audited Audited Audited Audited R`000
R`000 R`000 R`000 R`000
Revenue 225 630 159 034 18 416 16 785 244 046 175 819
Profit 36 498 18 863 (378) 85 36 120 18 948
Total 134 964 56 776 8 884 2 618 143 848 59 394
assets
Total 49 908 39 262 8 775 2 131 58 683 41 393
liabilit
ies
Consolidated Statement of Changes in Equity
Share Share Accumulated Minority Total
capital premium profit interest R`000
R`000 R`000 R`000 R`000
Balance at 1 - 3 448 3 470
1 January 21
2006
Profit for - - 18 948 36 18 984
the year
Share - - - 547 547
issue
Dividends - - (5 000) - (5 000)
Balance at 1 - 17 396 604 18 001
1 January
2007
Profit for - - 36 120 2 652 38 772
the year
Share 1 29 999 - - 30 000
issue
Share - (1 606) - - (1 606)
issue
costs
Balance at 2 28 393 53 516 3 256 85 167
31
December
2007
INTRODUCTION
The directors are pleased to announce the annual financial results of RBA
Holdings Limited for the year ended 31 December 2007 ("the year"), following the
successful listing of the company in September 2007 on the Alternative Exchange
("Altx") of the JSE Ltd.
Although all indicators are significantly up, it is important to note that this
growth is solely the result of the organic growth and performance of the group.
During the year, no acquisitions were made and the growth in the company can be
compared against the forecasts in the listing prospectus.
REVIEW OF OPERATIONS
The group continued to take advantage of the demand for affordable housing in
the Gauteng area and thriving market conditions continued to drive demand for
RBA`s products in 2007. At the same time management`s focus on operational
efficiency led to improved operating margins. The group`s internal construction
division is now responsible for 70% of production - up from 15% in 2006.
2007 saw the introduction of the National Credit Act ("NCA"). The effects of the
NCA on the group were not significant mainly due to the fact that RBA has been
credit vetting clients for the past 5 years.
During the year the group completed 929 homes in 12 project areas.
The group invested substantially in purchasing land and securing stand
allocations from infrastructure developers. At 31 December 2007 R 55,5 million
had been invested - up from R 11,4 million at 31 December 2006.
The rising interest rate environment makes houses more difficult to afford.
House sizes have been adjusted to keep the bond commitments and instalments of
clients at affordable levels.
FINANCIAL RESULTS
The group has achieved an attributable profit of R 36,1 million for the year in
line with the forecast in the listing prospectus.
On a turnover growth of 39%, the group increased headline earnings per share
from 6.3 cents to 12.02 cents over the year. The net asset value of the group
increased from R 18 million to R 85,1 million.
PROSPECTS
Organic growth and investment in securing land have placed RBA in a favorable
position to optimize on opportunities in the lower end of the South African
housing sector. The additional capacity created by its internal construction arm
has ideally positioned RBA to deliver on the demand for its product.
At 31 December 2007 the group had 516 approved sales that were awaiting
registration at the deeds office, the profit of which will be recognised in the
2008 financial year.
At 29 February 2008 the group had 989 stands that were available for sale to
prospective clients.
The strategy for the 2008 financial year is to introduce higher density housing
developments thereby reducing the land cost per unit. The group will continue
its strategy of acquiring land in areas along the urban edges to ensure that its
land pipeline is maintained.
The group intends growing its rental book significantly during 2008 which will
add an annuity income stream for the company as well as capital appreciation.
The introduction of rental units will allow RBA access to clients who will in
future qualify for the purchasing of new homes via home loans.
In the absence of any unexpected events or changes in the current trading
environment, the directors are confident of achieving the forecasts for 2008 as
outlined in the listing prospectus.
DIVIDENDS
In line with RBA`s growth strategy no dividend has been declared. The dividend
policy of RBA will be reviewed annually in light of RBA`s cash flow, gearing and
capital requirements.
CHANGES TO CAPITAL STRUCTURE
The group listed on the Alternative Exchange ("Altx") of the JSE Ltd on 20
September 2007. 30 000 000 shares with a par value of 0.001 cents were issued at
R1.00 per share. The R30 million raised on listing was applied as follows:
- R7 million for working capital;
- R3 million to establish a staff share incentive scheme; and
- R20 million to procure land and provide deposits to secure land.
BASIS OF PREPARATION
The annual financial statements have been prepared in accordance with
International Financial Reporting Standards and the Companies Act of South
Africa, 1973. The accounting policies used to prepare these financial statements
are consistent with those applied at the previous financial year end.
AUDIT REPORT
The annual financial statements have been audited by RBA`s Auditors, Baxters
Registered Accountants and Auditors. The auditor`s unqualified audit report is
available for inspection at the Company`s registered office.
APPRECIATION
The group recognises the value of its management teams and staff and thanks them
for their loyalty and work ethic which have contributed to RBA`s exceptional
results and the milestone objective of listing on the Altx. We also thank our
business partners, advisors, clients and shareholders for their support and
faith in the group.
By order of the Board
3 March 2008
D K Wentzel J L Mortimer
Chief Executive Officer Financial Director
CORPORATE INFORMATION
Executive directors: D K Wentzel; J L Mortimer; B A Stegmann; R F Eksteen; D F
Esterhuyse; G S Warren
Non-executive directors: L Theron, L A Thondi
Company Secretary: J L Mortimer CA (SA)
Registration number: 1999/009701/06
Registered address: Nedbank Building, Cnr Biccard & Jorissen Street,
Braamfontein, 2017
Postal address: P.O Box 30885, Braamfontein, 2017
Telephone: 011 483 5000
Facsimile: 086 516 0873
Web address: www.rbaholdings.co.za
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited
Auditors: Baxters Registered Accountants and Auditors
Designated Adviser: Exchange Sponsors (Pty) Limited
Date: 03/03/2008 11:14:11 Produced by the JSE SENS Department.
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