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SFH
SFH
SFH - S A French - Unaudited Interim Results For The Six Months Ended
31 December 2007
S A FRENCH LIMITED
Incorporated in the Republic of South Africa
(Registration number 1982/009174/06)
Share code: SFH & ISIN: ZAE000108890
("SA French" or "the group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
GROUP INCOME STATEMENTS Unaudited Unaudited Audited
six six months 12 months
months ended 31 ended 30
ended 31 December 2006 June
December 2007
2007
R`000 R`000 R`000
Revenue 92 324 46 991 120 970
Cost of sales (67 623) (35 530) (90 487)
Gross profit 24 701 11 461 30 483
Other income 674 2 337 3 998
Operating costs/expenses (12 520) (5 677) (14 115)
Operating profit 12 855 8 121 20 366
Investment revenue 372 2 146
Gain on acquisition of - 33 33
reserves in subsidiary
Finance costs (1 596) (367) (1 254)
Profit before taxation 11 631 7 789 19 291
Taxation (3 266) (2 518) (6 605)
Profit after taxation 8 365 5 271 12 686
Reconciliation of headline
earnings
8 365 5 271 12 686
Profit attributable to
ordinary shareholders
Headline earnings adjustment - (854) (1 043)
Headline earnings attributable 8 365 4 417 11 643
to ordinary shareholders
Number of shares
Issued 165 000 1 150 000 1 150 000
000
Weighted average 121 316 1 150 000 1 150 000
667
Earnings per share - (cents) 6.9 458.3 1 103.1
Headline earnings per share - 6.9 384.1 1 012.4
(cents)
GROUP BALANCE SHEETS Unaudited Unaudited Audited
31 December 31 December 30 June
2007 2006 2007
R`000 R`000 R`000
ASSETS
Non-current assets 33 478 12 077 27 524
Property, plant and 29 182 10 524 27 524
equipment
Other financial assets 4 296 1 553 -
Current assets 107 459 16 258 55 695
Inventories 63 643 6 760 40 297
Loans to shareholders - - 65
Trade and other 29 305 3 703 10 667
receivables
Cash and cash equivalents 14 511 5 795 4 666
Total assets 140 937 28 335 83 219
EQUITY AND LIABILITIES
Capital and reserves 66 406 10 821 10 236
Share capital 48 955 1 150 1 150
Revaluation reserve 162 162 162
Retained income 17 289 9 509 8 924
Minority interest * * *
Non-current liabilities 23 148 5 298 12 494
Instalment sale agreements 22 207 4 888 12 076
Deferred tax 941 410 418
Current liabilities 51 383 12 216 60 489
Loans from shareholders - 1 973 6 988
Other financial - - 518
liabilities
Current tax payable 1 761 2 043 1 022
Instalment sale agreements 6 028 1 236 2 060
Trade and other payables 42 311 6 802 49 347
Provisions 1 283 162 554
Total equity and 140 937 28 335 83 219
liabilities
Number of shares
Issued 165 000 000 1 150 000 1 150 000
Weighted average 121 316 667 1 150 000 1 150 000
Net asset value per share 40.2 941.0 890.1
- (cents)
Net tangible asset value 40.2 941.0 890.1
per share - (cents)
* Less than R1 000
GROUP CASH FLOW STATEMENT Unaudited Unaudited Audited
six six 12 months
months months ended 30
ended 31 ended 31 June
December December 2007
2007 2006
R`000 R`000 R`000
Net cash from operating (36 859) 5 999 14 656
activities
Net cash from investing (7 759) (4 111) (19 037)
activities
Net cash from financing 54 463 1 718 6 858
activities
Total cash movement for the 9 845 3 606 2 477
period
Cash at the beginning of the 4 666 2 189 2 189
period
Total cash at end of the 14 511 5 795 4 666
period
GROUP STATEMENT OF Share Revaluation Retained Minority Total
CHANGES IN EQUITY capital reserve income interest equity
R`000 R`000 R`000 R`000 R`000
Audited balance at 1 150 162 6 238 33 7 583
1 July 2006
Profit for the - - 5 271 - 5 271
period
Dividends - - (2 000) - (2 000)
Acquisition of - - - (33) (33)
minority interest
Unaudited balance 1 150 162 9 509 * 10 821
at 31 December 2006
Profit for the - - 7 415 - 7 415
period
Dividends - - (8 000) - (8 000)
- -
Audited balance at 1 150 162 8 924 * 10 236
30 June 2007
Premium on issue of 50 000 - - 50 000
shares
Listing expenses (2 195) - - (2 195)
written off
Profit for the - - 8 365 - 8 365
period
Dividends - - - - -
Unaudited balance 48 955 162 17 289 * 66 406
at 31 December 2007
* Less than R1 000
COMMENTARY
Introduction
The directors are pleased to present the maiden interim financial results of SA
French for the six months ended 31 December 2007 ("the interim period") which
reflect profitability in line with pre-listing and a 58.7% increase on the
previous comparative period. The period saw SA French list successfully on the
Alternative Exchange ("AltX") of the JSE Limited ("JSE") on 7 November 2007. The
share opened trade at a premium to the pre-listing issue price of R1 per share,
giving SA French a market capitalisation on listing of R222.75 million.
Basis of preparation
The unaudited consolidated interim financial statements for the six months ended
31 December 2007 have been prepared in compliance with International Accounting
Standards (IAS 34: Interim Financial Reporting) and the South African Companies
Act, 1973. The accounting policies and method of measurement and recognition
applied in preparation of the consolidated interim financial statements are
consistent with those applied to the group`s annual financial statements for the
year ended 30 June 2007, which comply with International Financial Reporting
Standards ("IFRS").
Group profile
SA French was founded 26 years ago with the exclusive South African
distributorship for Potain the world`s largest tower crane manufacturer. Today
it is the leading distributor of tower cranes and lifting solutions in sub-
equatorial Africa. The group currently offers a broad range of lifting and
materials handling solutions that are available either for sale or for rental.
All of the products are backed by high levels of service support including a
comprehensive parts inventory, competent and skilled technicians and an in-house
engineering capability.
Review of operations
The highlight of the six month period to December was the listing of SA French
on the AltX which has seen a positive effect in our market. Prior to the
December shutdown, a number of strategic and planning meetings involving our
teams and several of our major clients were held to discuss the way forward for
2008. Some project highlights for the interim period include the sale of two
"Topless MDT" tower cranes, making the South African construction industry one
of the first in the world to make use of the "Topless MDT" concept which was
launched by Potain at the Bauma trade fair in Germany in May 2007. The period
also saw SA French awarded the tender for a high specification tower crane to
assist in the construction of the Dam project in Steelpoort by the Department of
Water Affairs and Forestry.
The group undertook several turnkey projects in which all aspects of the design
and installation of the lifting solution were handled by our technical teams.
These projects include the placement and commissioning of a high specification
tower crane in East London, the supply and commissioning of tower cranes and
working platforms for use on the construction of Westwood shopping centre in
Durban, and the supply and installation of passenger hoists for the Gauteng
rapid rail link project.
Skills development
This period also saw a rise in the demand for our service department`s expertise
in erecting, servicing and dismantling tower cranes and hoists throughout the
country. The planned opening by SA French of branches in Durban and Cape Town on
3 January 2008 resulted in four new service crews being identified, for which
training will be ongoing in 2008.
Expansion of South African footprint
In January 2008 branches in Cape Town and Durban were fully established as a
result of planning and market research conducted in the latter half of 2007.
This has resulted in a national service being offered to our clients and new
markets opening up to the group through the expansion of our geographic
footprint.
Financial results
Results for the period are in line with forecasts. Group revenue increased by
96.5% to R92.324 million (2006: R46.991 million) while operating profit
increased by 58.3% to R12.855 million (2006: R8.121 million). Net profit after
tax was up 58.7% from R5.271 million in the previous comparative period to
R8.365 million. Headline earnings of R8.365 million for the period translated
into headline earnings per share of 6.9 cents (2006: 3.8 cents based on pro
forma number of shares).
The group`s gross profit margin has increased by 9.8% from 24.4% to 26.8%.
The cash reserves which have been accumulated will facilitate both organic
growth and current and future acquisitions.
Prospects
The group is involved in four projects that begin in the first quarter of 2008
for the construction of hotels in preparation for the 2010 World Cup.
The award of the coal fired power station, Medupi, as well as the planned award
of the second such power station, "project Bravo", means that the major
contractors bidding for these contracts have kept in close communication with
regard to their lifting requirements.
Dividend policy
No interim dividend has been declared for the period.
Appreciation
We thank our employees for their continued loyalty, hard work and commitment
which culminated in the successful listing of the group on the JSE in November
2007 and has further resulted in the strong interim performance reflected in
this report. We also thank our fellow directors for their wise counsel and our
stakeholders for their consistent faith in the group.
On behalf of the board
Quentin van Breda Warwick van Breda
Chief Executive Officer Operations Director
31 March 2008
Directors:
QCA van Breda (Chief Executive Officer), W van Breda (Operations Director), JC
Prinsloo (Financial Director), LB Mophatlane (Non Executive), JM Poluta (Non
Executive), JD Xaba, MW Matlala
Registered office
131 Fitter Road
Spartan
Kempton Park, 1619
Designated Advisors
Merchant Sponsors (Proprietary) Limited
2nd Floor, North Block
Hyde Park Office Tower
Corner Sixth Road & Jan Smuts Avenue
Hyde Park, Johannesburg, 2196
(PO Box 41480, Craighall, 2024
Transfer secretaries
Computershare Investor Services (Proprietary) Limited
Ground Floor
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Company secretary
Warwick van Breda
131 Fitter Road
Spartan
Kempton Park, 1619
(PO Box 2144, Kempton Park, 1620)
Date: 31/03/2008 17:30:00 Produced by the JSE SENS Department.
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