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ELR ELRP
ELR
ELR/ELRP - ELB Group limited - Unaudited group interim report for the six months
ended 31 December 2007
ELB GROUP LIMITED
Incorporated in the Republic of South Africa
Registration number 1930/002553/06
Share codes: ELR & ELRP
ISIN: ZAE000035101 & ZAE000035333
("ELB")
UNAUDITED GROUP INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
INTRODUCTION
The ELB Group is a total solutions provider to the mining, minerals, power,
port, construction and industrial sectors in the field of materials handling and
appropriate process plants. This is achieved through ELB generated innovation
and the supply with world class partners of equipment and technology.
FINANCIAL RESULTS
The results for the six months to 31 December 2007 reflect headline earnings of
R22,9 million (2006 - R6,8 million). The headline loss of the discontinued
operations was largely eliminated and was a significant factor in the
improvement of headline earnings.
The ELB Equipment division had another good six months exceeding budget as did
Ditch Witch in Australia. ELB Engineering Services experienced under recoveries
during the period due to delays in the awarding of certain key contracts. These
contracts have now been awarded allowing the company to go forward with a
healthy order book.
Subsequent to 31 December 2007 ELB Engineering acquired the 21% minority
interest in ELB Engineering Services, resulting in the latter company becoming
wholly owned by ELB Engineering. ELB`s indirect interest in ELB Engineering
Services, through ELB`s 85% holding in ELB Engineering, increased from 67% to
85%.
DISCONTINUED OPERATIONS
Since the half year end ELB Ultrabord has been sold for R 7 million. The
realisation of ELB Timbers remaining assets is proceeding according to plan and
based on current information no material losses are expected during the
realisation process.
PROSPECTS
The global resources and power industry sectors continue to offer numerous
opportunities and therefore ELB is expected to have a satisfactory second six
months. Provided exchange rates and interest rates remain stable ELB is well
positioned to achieve its objective of growing headline earnings.
DIVIDENDS
An interim dividend of 20 cents (2006 - 10 cents) per share has been declared on
the ordinary shares.
ACCOUNTING POLICIES
The unaudited interim financial statements have been prepared in accordance with
International Accounting Standard (IAS) 34: Interim Financial Reporting.
Accounting policies accord with International Financial Reporting Standards
(IFRS), and are consistent with those applied in the financial year ended 30
June 2007. The interim financial statements also comply with the South African
Companies Act 1973, as amended.
Where necessary, comparative amounts have been reclassified in accordance with
the classification in the current reporting period.
On behalf of the Board
AG Fletcher
Chairman
Boksburg
13 March 2008
GROUP INCOME STATEMENT
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 07 31 Dec 06 30 Jun 07
R 000 R 000 R 000
Continuing operations
Sales revenue 458 071 389 643 899 650
Operating costs (423 525) (355 387) (817 512)
excluding depreciation
Operating profit before 34 546 34 256 82 138
depreciation
Depreciation (1 931) (1 679) (3 499)
Profit from operations 32 615 32 577 78 639
Interest received 11 024 5 732 12 100
Interest paid (3 947) (3 512) (5 404)
Profit before tax 39 692 34 797 85 335
Income tax expense (13 893) (11 597) (27 618)
Profit from continuing 25 799 23 200 57 717
operations
Discontinued operations
Profit / (loss) from 1 493 (18 407) (19 067)
discontinued operations
as detailed below
Profit for the period 27 292 4 793 38 650
Attributable to:
Ordinary shareholders of 24 636 1 075 30 386
ELB
Minority interest 2 656 3 718 8 264
27 292 4 793 38 650
PROFIT / (LOSS) FROM
DISCONTINUED OPERATIONS
Loss from operations ( 354) (8 407) (15 243)
before items listed
below
Profit on sale of 1 647 - -
property
Impairment of plant and - (6 000) -
equipment
Retrenchment reversal / 200 (4 000) (3 824)
(accrual) of costs
Profit / (loss) from 1 493 (18 407) (19 067)
discontinued operations
DETERMINATION OF GROUP HEADLINE EARNINGS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 07 31 Dec 06 30 Jun 07
R 000 R 000 R 000
Profit attributable to 24 636 1 075 30 386
ordinary shareholders of
ELB per the income
statement
Deduct: Items excluded 1 777 (5 758) 179
from
headline earnings as
detailed
below:
Continuing operations:
Profit on disposal of 87 190 202
plant and equipment
Discontinued operations:
Profit on disposal of 1 647 - -
property
Profit on disposal of 80 128 60
plant and equipment
Impairment of plant and - (6 000) -
equipment
Income tax effect of ( 26) ( 56) ( 61)
excluded items
Minority interest effect ( 11) ( 20) ( 22)
of excluded items
Headline earnings 22 859 6 833 30 207
Weighted average number
of ordinary shares
(excluding treasury
shares on which
basic earnings per share
are
based(000`s) 27 438 27 170 27 246
Earnings per ordinary
share (cents)
- basic and fully 89.8 4.0 111.5
diluted
Headline earnings per
ordinary share (cents)
- basic and fully 83.3 25.1 110.9
diluted
Dividends declared for 20 10 30
the period per ordinary
share (cents)
GROUP BALANCE SHEET
Unaudited Unaudited Audited
31 Dec 07 31 Dec 06 30 Jun 07
R 000 R 000 R 000
ASSETS
Non current assets 45 494 33 518 34 674
Property, plant and 36 044 27 140 26 662
equipment
Deferred tax assets 9 450 6 378 8 012
Current assets 588 908 452 088 517 067
Inventories and 272 984 223 094 210 098
construction contracts
in progress
Receivables and other 86 606 66 092 66 209
current assets
Income tax recoverable 62 320 62
Assets of discontinued 19 980 36 175 31 522
operations held for
disposal
Cash and cash 209 276 126 407 209 176
equivalents
Total assets 634 402 485 606 551 741
EQUITY AND LIABILITIES
Attributable to ordinary 212 222 161 393 192 982
shareholders of ELB
Issued capital 25 192 25 192 25 192
Treasury shares (22 856) (23 840) (23 215)
Reserves (6 479) (10 595) (6 208)
Retained earnings 216 365 170 636 197 213
Preference shares 8 8 8
Total equity 212 230 161 401 192 990
attributable to equity
holders of ELB
Minority interest 12 438 4 510 9 830
Total equity 224 668 165 911 202 820
Non current liabilities 14 177 8 994 7 201
Interest bearing 14 018 8 994 5 768
borrowings
Deferred tax liabilities 159 - 1 433
Current liabilities 395 557 310 701 341 720
Non interest bearing 258 640 185 505 221 707
payables and other
current liabilities
Interest bearing 112 546 99 262 90 142
payables
Income tax payable 16 109 8 323 18 478
Liabilities of 8 262 17 611 11 393
discontinued operations
held for disposal
Total equity and 634 402 485 606 551 741
liabilities
Ordinary shares in issue 33 860 33 860 33 860
(000`s)
Deduct: Treasury shares 6 366 6 648 6 454
in issue (000`s)
Ordinary shares in issue 27 494 27 212 27 406
on which net asset value
per share is calculated
Net asset value per 772 593 704
ordinary share (cents)
Capital commitments
At 31 December 2007 there were capital commitments of R 4 835 000 (31 December
2006 - nil, 30 June 2007 - R 14 868 000).
Contingent liabilities
ELB Engineering Services operates in the engineering contracting business and is
exposed to the risks associated with engineering contracts. These risks are
managed on the basis of limited liability.
All known liabilities of the group have been accrued and the directors were not
aware of any contingent liabilities requiring possible additional accrual.
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to ordinary shareholders of ELB
Issued Treasury Retained
capital Shares Reserves earnings Total
R 000 R 000 R 000 R 000 R 000
Balance at 30 June 25 192 (24 098) (11 315) 172 282 162 061
2006
Profit for the year 30 386 30 386
Foreign currency 5 107 5 107
translation
adjustments for
foreign operations
Total recognised - - 5 107 30 386 35 493
income and expense
for the year
Ordinary dividends (5 455) (5 455)
paid
ELB Share Incentive
Trust
Paid up shares 883 883
released by the trust
Total changes for the - 883 5 107 24 931 30 921
year
Balance at 30 June 25 192 (23 215) (6 208) 197 213 192 982
2007
Profit for the period 24 636 24 636
Foreign currency ( 271) ( 271)
translation
adjustments for
foreign operations
Total recognised - - ( 271) 24 636 24 365
income and expense
for the period
Ordinary dividends (5 484) (5 484)
paid
ELB Share Incentive
Trust
Paid up shares 359 359
released by the trust
Total changes for the - 359 ( 271) 19 152 19 240
period
Balance at 31 25 192 (22 856) (6 479) 216 365 212 222
December 2007
Balance at 30 June 25 192 (24 098) (11 315) 172 282 162 061
2006
Profit for the period 1 075 1 075
Foreign currency 720 720
translation
adjustments for
foreign operations
Total recognised
income and expense
for the
period - - 720 1 075 1 795
(2 721) (2 721)
Ordinary dividends
paid
ELB Share Incentive
Trust
Paid up shares 258 258
released by the
trusts
Total changes for the - 258 720 (1 646) ( 668)
period
Balance at 31 25 192 (23 840) (10 595) 170 636 161 393
December 2006
GROUP STATEMENT OF CHANGES IN EQUITY CONTINUED:
Attributable Preference Minority Unaudited
to ordinary Total
shareholders
of ELB
Total shares interest equity
R 000 R 000 R 000 R 000
Balance at 30 June 162 061 8 665 162 734
2006
Profit for the year 30 386 8 264 38 650
Foreign currency 5 107 901 6 008
translation
adjustments for
foreign operations
Total recognised 35 493 - 9 165 44 658
income and expense
for the year
Ordinary dividends (5 455) (5 455)
paid
The ELB Share
Incentive Trust
Paid up shares 883 883
released by the
trust
Total changes for 30 921 - 9 165 40 086
the year
Balance at 30 June 192 982 8 9 830 202 820
2007
Profit for the 24 636 2 656 27 292
period
Foreign currency ( 271) ( 48) ( 319)
translation
adjustments for
foreign operations
Total recognised 24 365 - 2 608 26 973
income and expense
for the period
Ordinary dividends (5 484) (5 484)
paid
The ELB Share
Incentive Trust
Paid up shares 359 359
released by the
trust
Total changes for 19 240 - 2 608 21 848
the period
Balance at 31 212 222 8 12 438 224 668
December 2007
Balance at 30 June 162 061 8 665 162 734
2006
Profit for the 1 075 3 718 4 793
period
Foreign currency 720 127 847
translation
adjustments for
foreign operations
Total recognised 1 795 - 3 845 5 640
income and expense
for the period
Ordinary dividends (2 721) (2 721)
paid
ELB Share Incentive
Trust
Paid up shares 258 258
released by the
trust
Total changes for ( 668) - 3 845 3 177
the period
Balance at 31 161 393 8 4 510 165 911
December 2006
GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months Six months Year
Ended ended ended
31 Dec 07 31 Dec 06 30 Jun 07
R 000 R 000 R 000
Continuing operations
Cash (outflow) / inflow (1 439) (14 060) 77 598
from operating activities
before dividends paid
Dividends paid (5 484) (2 721) (5 455)
Cash (outflow) / inflow (6 923) (16 781) 72 143
from operating activities
Cash outflow from (11 490) (5 319) (6 648)
investment activities
Cash inflow / (outflow) 8 609 295 (2 306)
from financing activities
Cash (outflow) / inflow (9 804) (21 805) 63 189
from continuing operations
Discontinued operations
Cash inflow / (outflow) 9 904 (1 688) (3 913)
from discontinued
operations
Increase / (decrease) in 100 (23 493) 59 276
cash and cash equivalents
Cash and cash equivalents 209 176 149 900 149 900
at the beginning of the
period
Cash and cash equivalents 209 276 126 407 209 176
at the end of the period
SEGMENT ANALYSIS
Unaudited Unaudited Audited
Six months Six months Year
Ended ended ended
31 Dec 07 31 Dec 06 30 Jun 07
R 000 R 000 R 000
Segment revenue
Continuing operations
ELB Engineering 458 071 389 643 899 650
Discontinued operations
ELB Timbers 12 971 44 841 83 711
Total 471 042 434 484 983 361
Segment results
Headline earnings /
(loss)
Continuing operations
ELB Engineering 23 740 20 638 49 007
ELB Group non segmental ( 647) (1 270) 327
(expense) / income
Headline earnings of 23 093 19 368 49 334
continuing operations
Headline loss of
discontinued operations
ELB Timbers ( 234) (12 535) (19 127)
Headline earnings 22 859 6 833 30 207
attributable to ordinary
shareholders of ELB
Include items excluded
from headline earnings
Continuing operations 50 114 119
Discontinued operations 1 727 (5 872) 60
Profit attributable to 24 636 1 075 30 386
ordinary shareholders of
ELB
DIVIDENDS
The directors have declared the following interim dividends for the six month
period ended 31 December 2007.
PREFERENCE DIVIDEND NUMBER 114
An interim dividend has been declared at the rate of 6% per annum on the 6%
fixed cumulative redeemable preference shares of R2 each, equivalent to 6 cents
per share.
ORDINARY DIVIDEND NUMBER 120
An interim dividend of 20 cents per share has been declared on the ordinary
shares.
The salient dates in respect of both dividends are:
Last day to trade cum dividend Friday, 11 April 2008
Shares commence trading ex dividend Monday, 14 April 2008
Record date Friday, 18 April 2008
Date of payment Monday, 21 April 2008
Share certificates may not be dematerialised or rematerialised between Monday,
14 April 2008, and Friday, 18 April 2008, both dates inclusive.
By order of the Board
DG Jones Boksburg
Secretary 13 March 2008
DIRECTORS
AG Fletcher (chairman) PJ Blunden (chief executive - ELB Equipment) T de Bruyn*
Dr JP Herselman* Dr SJ Meijers (chief executive - ELB Engineering Services) MV
Ramollo
*Non executive
REGISTERED OFFICE
ELB Equipment
14 Atlas Road
Anderbolt
Boksburg
1459
SHARE TRANSFER SECRETARIES
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street
Johannesburg
2001
(PO Box 61051, Marshalltown, 2107)
SPONSOR
Rand Merchant Bank (A division of FirstRand Bank Limited)
1 Merchant Place
cnr Fredman Drive and Rivonia Road
Sandton
2196
Date: 14/03/2008 15:23:10 Produced by the JSE SENS Department.
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