| Mon 2 Jun 2008, 8:37 | | BSS - BSI SA Limited - Year End Results To 31 March 2008 |
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BSS
BSS
BSS - BSI SA Limited - Year End Results To 31 March 2008
BSI (SA) Limited
(Incorporated in the Republic of South Africa)
(Registration number 2001/023164/06)
(JSE code: BSS & ISIN: ZAE000107371)
("BSI" or "the company")
PRESS RELEASE
YEAR END RESULTS TO 31 MARCH 2008
BSI steel group annual results exceed listing forecasts
Monday, 2 June 2008: AltX-listed steel group BSI headline earnings of R98,4
million for the year ending 31 March 2008 were 338% up on the previous year and
23% higher than forecast at time of listing in October last year.
Joint CEO William Battershill says these maiden results as a listed company are
pleasingly above target with some remarkable achievements. "For example, our
South African based operations, excluding exports, achieved a 37% increase in
tonnage attributable to organic growth. Compare this to the South African Iron
& Steel Institute report of a 4% increase in industry volumes for the 2007
calendar year."
The BSI group of companies operates as a processor, stockist, bulk seller and
exporter of steel products, with strategically located operations in South
Africa, Democratic Republic of the Congo and Zambia, servicing Southern African
markets.
BSI revenues increased by 62% to R1,432 billion (2007: R882 million). Organic
growth accounted for 55% of this increase, with business acquisitions
contributing to the balance.
The overall gross profit margin increased significantly to 20,7%, up from the
comparative 14,2% Battershill says this improvement exceeds the original
forecast of 17% and was achieved through steel price increases and the growing
demand for steel.
Interest expense at R22,4 million (2007: R13 million) increased in line with the
growth in the local operations and is above forecast due to the higher than
expected growth in revenue and increases in the prime overdraft rate.
Attributable earnings for the year were up 196% to R99,4 million, earnings per
share up 268% to 15,1 cents, and headline earnings per share were up 303% to
14,9 cents.
On listing, BSI raised R100 million in a private placement which was used to
acquire the operations in Zambian and the Democratic Republic of the Congo, fund
capital expenditure and operational growth. Working capital increased by R207
million for the period.
At the start of this reporting period, the group acquired the minority interests
in several of its subsidiaries (being 30% of Discount Steel KZN, 25% of Garrison
Steel, 35% of Discount Steel Africa and 30% of Discount Steel Trading, all
effective 1 April 2007). Discount Steel Africa acquired 100% of Discount Steel
Zambia which in turn acquired 100% of Discount Steel Lubumbashi.
Battershill says the outlook for SA steel consumption in terms of tonnage
remains positive and Southern African export markets have continued to exceed SA
growth. "We will remain focused on organic growth, which provides us with the
highest return/lowest risk option and growing our market share in an expanding
steel market. But we also intend to acquire businesses that will provide us with
diversification, either through new products or new geographic areas of
operation."
April and May 2008 have been good trading months for the group and a prevalence
of supply shortages can be seen in most product streams, with long-products
being particularly tight and expected to remain so for several months. Flat-
product shortages are easing, except for quenched and tempered plate and colour-
coated coil, which are likely to remain in short supply for the foreseeable
future.
The group commenced earthworks in mid May this year at its intended Meyerton
processing and distribution facility. This new depot will improve group
efficiencies and customer service levels as BSI processing and merchanting
divisions can then all be housed in one facility instead of being scattered
across the Gauteng region.
Battershill says that the group is still following a strategy of reinvesting all
earnings back into the group in order to fund growth and development. "But we
intend to declare our first dividend as a listed company based on the results
for the financial year ending 31 March 2009." ENDS
For further information please contact Michelle K Blumenau, Turquoise PR &
Marketing Communications T 011 728 5004 C 083 273 9891
michelle@turquoisepr.co.za
Date: 02/06/2008 08:37:01 Produced by the JSE SENS Department.
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