| Wed 2 Apr 2008, 8:30 | | BWK - Buildworks - Unaudited Interim Results For The Six Months Ended |
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BWK
BWK
BWK - Buildworks - Unaudited Interim Results For The Six Months Ended
29 February 2008
Buildworks Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 2007/004935/06)
Share code: BWK & ISIN: ZAE000110219
("Buildworks" or "the company")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 29 FEBRUARY 2008
HIGHLIGHTS
- Revenue R98 million
- Net profit after tax R23,6 million
- Fully diluted headline earnings per share of 5,03 cents per share
- EBITDA percentage 41%
- Profit after tax percentage 24%
ABRIDGED CONDENSED INCOME STATEMENT
unaudited
6 months ended
29 February 2008
R`000
Revenue 98,046
Cost of sales (43,196)
Gross profit 54,850
Operating expenses (14,280)
Earnings before interest, tax, depreciation and 40,570
mortization ("EBITDA")
Depreciation (3,499)
Profit before interest and taxation 37,071
Net interest paid (4,317)
Profit before taxation 32,754
Taxation (9,171)
Profit attributable to ordinary shareholders 23,583
Reconciliation of headline earnings:
Profit attributable to ordinary shareholders 23,583
Add IAS16 profit on disposal of property, plant 70
& equipment
Headline earnings attributable to ordinary 23,653
shareholders
Weighted average shares in issue on which 418,729
earnings are based (000)
Fully diluted weighted average shares in issue 470,000
(000)
Shares in issue at period end (000) 470,000
Earnings per share (cents) 5.63
Headline earnings per share (cents) 5.65
Fully diluted earnings per share (cents) 5.02
Fully diluted headline earnings per share 5.03
(cents)
ABRIDGED CONDENSED BALANCE SHEET
unaudited
29 February 2008
R`000
ASSETS
Non-current assets 290,687
Property plant and equipment 179,360
Intangible assets 111,327
Current assets 66,614
Inventories 24,021
Trade and other receivables 23,677
Cash and cash equivalents 18,916
Total assets 357,301
EQUITY AND LIABILITIES
Equity 240,353
Issued capital 5
Share premium 216,765
Accumulated profits 23,583
Non-current liabilities 50,475
Environmental obligation 5,954
Secured loans 44,251
Deferred tax 270
Current liabilities 66,473
Trade and other payables 24,207
Current portion of non-current liabilities 27,832
Taxation 14,434
Total equity and liabilities 357,301
Number of shares in issue (000) 470,000
Net asset value per share (cents) 49.33
Net tangible asset per share (cents) 27.45
ABRIDGED CASH FLOW STATEMENT
unaudited
6 months ended
29 February 2008
R`000
Cash flows from operating activities 24,249
Cash flows from investing activities (77,416)
Cash flows from financing activities 72,083
Net increase in cash and cash equivalents 18,916
Cash and cash equivalents at beginning of period -
Cash and cash equivalents at end of period 18,916
ABRIDGED STATEMENTS OF CHANGES IN EQUITY
unaudited
6 months ended
29 February 2008
R`000
Balance at beginning of period -
Acquisition of businesses 90,094
Rights offer 80,000
Issue of share capital and share issue expenses 46,676
Profit attributable to ordinary shareholders 23,583
Balance at end of period 240,353
COMMENTARY
INTRODUCTION
The directors are pleased to present the maiden interim financial
results of the company for the six months ended 29 February 2008
("the interim period").
Buildworks is a group focused on manufacturing and providing heavy
building materials to the construction industry and in most cases
direct to the end user. Its products are an integral component of
the basic building structure and are an irreplaceable cornerstone
used in the construction of houses, roads, stadiums, shopping
centers, railways, schools, offices and other infrastructure and
will benefit from the continued capital formation in South Africa.
FINANCIAL RESULTS
Buildworks has achieved an excellent set of maiden interim results
for the first six months. It has achieved its objectives of listing
on the JSE Limited ("JSE") and management has integrated well into
the new corporate reporting structure.
The group has achieved excellent gross profit margins which have
resulted in the group achieving net profit after tax of R23,6m for
the interim period. This was achieved in the face of challenging
market conditions during the period under review which faced higher
than expected rainfall and severe power outages. The results are
reflective of the enormous amount of effort that went into securing
quality customers with whom we are assured of medium term growth
despite the challenging conditions.
Revenue was in line with expectations as a result of higher volumes
which enabled us to sell at lower prices to meet market demand. The
price weakness experienced is as a result of competitiveness in the
market place.
Gross profit margins have been in line with expectations as a result
of strict adherence to manufacturing processes and the ability to
produce product at higher yields than industry standard and the
continual focus on cost containment and efficient productivity.
Share capital and share premium increased as a result of the capital
raising undertaken at the time of listing.
PROSPECTS
The board of directors remains optimistic with regard to the group`s
prospects to August 2008 and beyond.
It is anticipated that the baton has passed for the foreseeable
future from consumer led growth to investment led growth. The
current construction boom is expected to continue for the
foreseeable future driven by government`s drive to improve the
quality of living and general infrastructure in the country.
The current operating climate will certainly be challenging over the
next year and the success factors that generated our returns will
remain in place, those being our ability to produce quality product
at the low end of the cost curve and our marketing coverage which
ensures reasonable selling margins and our relatively low levels of
debt.
The focus on expansion remains with the successful upgrade to the
aggregates plant and we expect our volumes to grow accordingly over
the next 12 months.
Construction of the roof tile plant has commenced, and it is
expected to have an impact in the first half of our 2010 year. It is
anticipated that the roof tile plants` final cost will be R70m as a
result of the selection of higher production capacity and greater
levels of automation. The option on the pavers plant remains open
and we continue to assess the optimum time to exercise this option.
On an ongoing basis we look for additional acquisition opportunities
in our related areas. We believe that we have the management team
with the capacity and capability to acquire, integrate and
successfully deliver on new business opportunities.
Historically operations have outperformed in the second half of the
financial year compared to the first due to the December and January
shut-down period and the seasonal rainfall in Gauteng. This trend is
expected to positively affect the following six-month period`s
results and we remain confident of our ability to deliver on the
profit forecast presented in our 2007 pre-listing statement.
DIVIDEND POLICY
The dividend policy will be reviewed periodically taking into
account prevailing circumstances and future cash requirements.
Initially, all earnings generated by the company will be utilised to
fund future growth.
Accordingly, in line with group policy, no dividend has been
declared for the interim period.
BASIS OF PREPARATION
The interim results have been prepared in accordance with
International Financial Reporting Standards and IAS 34 (Interim
Financial Reporting).
The allocation between goodwill and identifiable intangible assets
as a result of the excess of the cost of the acquisitions over the
fair value of the net tangible assets acquired will be valued in
terms of IFRS 3 in the year-end accounts.
The accounting policies applied in preparing these interim financial
statements are consistent with those presented in the 2007 pre-
listing statement.
These interim results have not be audited or reviewed by the
company`s auditors, PKF (Jhb) Inc.
CHANGE TO THE BOARD OF DIRECTORS
With effect from 1 April 2008, Anthony Dixon has been appointed as
an independent non-executive director.
Tony`s appointment is greatly welcomed by the board which will
benefit from his significant skills and experience which includes
his 29 years experience with PWC, 7 years in commerce and 3 years
with the Institute Of Directors in Southern Africa.
APPRECIATION
We thank our loyal staff for their commitment and hard work which
contributed to Buildworks`s achievement of its milestone listing on
the JSE. We also thank our customers, business partners, advisors,
suppliers and our shareholders for their ongoing support and faith
in the group.
By order of the board
Herman Mashaba Raoul Gamsu
Director Director
2 April 2008
Non-executive directors:
HSP Mashaba (Chairman), NC Machingawuta
Executive directors:
RD Gamsu, J Hooman, IM Klitzner
Registration number:
2007/004935/06
Business address:
6A Sandown Valley Crescent, Sandown, Sandton
Business postal address:
PO Box 651455, Benmore, Johannesburg 2010
Company secretary:
Morestat Corporate Services (Proprietary) Limited
Telephone: 011 722 7428
Facsimile: 011 722 7431
Transfer secretaries:
Computershare Investor Services 2004 (Pty) Limited
Designated advisor:
Java Capital (Proprietary) Limited
Visit our website: www.buildworksgroup.co.za
Date: 02/04/2008 08:30:01 Produced by the JSE SENS Department.
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