| Mon 21 Jul 2008, 7:05 | | ELI - Ellies Holdings Limited - Reviewed group preliminary results for the |
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ELI
ELI
ELI - Ellies Holdings Limited - Reviewed group preliminary results for the
period ended 30 April 2008
Ellies Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2007/007084/06
JSE code: ELI ISIN: ZAE000103081
("ELLIES" or "the Group")
Reviewed group preliminary results for the period ended 30 April 2008
HIGHLIGHTS
- Revenue up 15.46% on forecast
- NPAT up 26.55%
- HEPS of 30.60 cents
- EPS of 30.25 cents (23.90 forecast)
- Fully diluted EPS of 30.10 cents
ABRIDGED CONSOLIDATED INCOME STATEMENT
Pro forma Change
14 months profit forecast On
ended 30 April for the 14 Forecas
2008 months ended 30 t
(12 months April 2008
trading) (12 months
* See Note 1 trading)
below * See Note 2
below
R R %
Revenue 701,941,731 607,948,488 15.46
Cost of goods sold (435,865,152) (366,686,395)
Gross profit 266,076,579 241,262,093
Other income 3,816,483 3,074,927
Administration and other (180,791,905) (175,910,129)
expenses
Profit from operations 89,101,157 68,426,891 30.21
Impairment of goodwill (750,000) -
Financing income 783,294 159,311
Financing expense ( 7,150,554) (3,713,277)
Profit before taxation 81,983,897 64,872,925 26.38
Taxation (23,693,561) (18,813,147)
Profit for the period 58,290,336 46,059,778 26.55
Reconciliation of headline
earnings to earnings
Profit for the period 58,290,336 46,059,778
Profit on sale of property, (88,387) -
plant and equipment
Impairment of goodwill 750,000 -
Headline earnings 58,951,949 46,059,778
Weighted average number of 192,682,775 192,682,775
shares in issue
Earnings per share (cents) 30.25 23.90
26.55
Headline earnings per share 30.60 23.90 27.99
(cents)
Fully diluted earnings per share 30.10 23.90 25.92
(cents)
Note 1: Ellies was incorporated on 06 March 2007, with a February year end.
During the period the company`s year end changed to April with effect
from the 2008 year end. As described in the "Introduction" paragraph
below the group effectively only began trading on 01 May 2007,
resulting in a 12 month trading period.
Note 2: The profit forecast for the period ended 30 April 2008 as per the
prospectus includes the trading results of Botswana. For comparative
purposes and reasons as described below, Botswana has been excluded
from the pro forma profit forecast presented.
ABRIDGED CONSOLIDATED BALANCE SHEET
As at 30 April 2008
R
78,028,128
Non-current assets
Property, plant and equipment 26,582,766
Goodwill 47,704,840
Deferred taxation 3,740,522
Current assets 400,138,058
Inventories 202,733,149
Trade and other receivables 151,780,580
Cash and cash equivalents 45,624,329
Total assets 478,166,186
Equity and liabilities
Capital and reserves 235,268,251
Share capital 2,335
Share premium 355,169,583
Non distributable reserve (178,194,003)
Accumulated profit 58,290,336
Non-current liabilities 22,665,281
Interest-bearing liabilities 22,532,774
Deferred taxation 132,507
Current liabilities 220,232,654
Trade and other payables 112,564,993
Current portion of non-current 4,602,821
liabilities
Taxation 17,174,357
Bank overdraft 85,890,483
Total equity and liabilities 478,166,186
Number of shares in issue 233,526,089
NAV per share (cents) 100.75
Tangible NAV per share (cents) 80.32
ABRIDGED CONSOLIDATED CASHFLOW STATEMENT
14 months ended 30
April 2008
(12 months trading)
R
(53,407,356)
Cash flows from operating
activities
Cash flows from investing (20,928,877)
activities
Cash flows from financing 54,596,246
activities
Net decrease in cash and cash (19,739,739,987)
equivalents
Cash and cash equivalents at -
beginning of period
Cash and cash equivalents acquired (20,526,167)
as part of business combination
Cash and cash equivalents at end of (40,266,154)
period
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
14 months ended 30
April 2008
R
Share capital and share premium 355,171,918
Issued during period 361,782,443
Share issue expenses written off (6,610,525)
Accumulated profit 58,290,336
Net profit for the period 58,290,336
Non distributable reserves (178,194,003)
Business purchased under common (178,194,003)
control
Total capital and reserves 235,268,251
INTRODUCTION
Ellies Holdings Ltd "Ellies" listed on the Alternative Exchange of the JSE
Limited on 5 September 2007. Having changed its financial year end from February
to April, Ellies is pleased to present its maiden reviewed results for the
period ended 30 April 2008.
Pursuant to a restructure before listing, Ellies acquired its operating
subsidiaries on 1 May 2007. As a result, the 14 month final reviewed period to
30 April 2008 incorporates 12 months of trading results.
PROFILE
Ellies is the largest manufacturer, wholesaler and distributor in Southern
Africa of television reception-related products and is a market leader in
domestic electronic and industrial audio products. It is also a significant
importer of products associated with its business. The group has a product range
of over 10 000, from terrestrial antennae and satellite equipment to television,
audio, domestic electrical and telephone accessories. Recently, Ellies has moved
into power generation products including generators and inverters. The group
controls the packaging, marketing, sales and distribution of both its own
manufactured and imported products. In addition, with the acquisition of the
business conducted by Megatron Federal, their power management and electrical
switch-gear and mini-substation manufacture and supply is a key component of the
group.
Ellies has fourteen operations:
Manufacturing and Engineering
- Aluminium & Plastics Manufacturing
- Electronics Manufacturing
- Light Metal Engineering
Manufacture, Import and Distribution Of:
- Terrestrial Television Reception Products
- Satellite Television Reception Products
- Ellies Electrical and Surge Safe Products
- Ellies Audio Equipment and Accessories
- Ellies Corporate Services
- ElSat Full Maintenance Finance and Rentals
- Packaging and Marketing
- Sales and Merchandising
- Distribution/Logistics
Import, Distribution and Installation Of
- 1 kva to 500 kva Generators (Petrol and Diesel)
- and 120w - 1200w Power Inverters
Megatron Federal Division
- Power management and electrical switch-gear and
mini-substation manufacture and supply.
- Large Power Generation
- Facilities Management and maintenance of the above
and Office Environments.
Positional and operational
Ellies` operations are geographically situated to service the Johannesburg,
Pretoria, Nelspruit, Polokwane, Bloemfontein, Upington, East London, Port
Elizabeth Cape Town and Namibia, with agents in Botswana and Mozambique, where
the principal infrastructural and industrial activities of the group as a whole
are facilitated across all its products and service offerings for both regional
and national customer bases.
FINANCIAL RESULTS AND PROSPECTS
Ellies has maintained strong and consistent growth in revenue and profitability
and has exceeded its forecast for the current financial period.
Growth in revenue to R701 million for the 12 trading months, May to April, was
driven by steady demand in the retail and DIY sectors, satellite sales to the
lower LSM market and to some degree the demand for power generation and related
products in the latter part of the year. Enhanced productivity efficiencies,
helped achieve these earnings.
Net profit after taxation for the period is R58 million, against a forecast of
R46million, translating to earnings per share ("eps") of 30.25 cents against
forecast eps of 23.90 cents.
Demand for power generation products impacted on Ellies` revenue and profit
growth to some extent in the latter 6 months of the reporting period. Although
the demand for the "consumer home" generation is expected to decline, the supply
of larger generators to business is expected to continue.
The board expects the current adverse economic climate to impact on Ellies in
the short term. However, Ellies` diversity of products and customer base will,
to some extent, hedge against much of this impact. Export growth also helps to
limit Ellies` exposure to current conditions, as will High definition and
Digital product advances, the developing Corporate and full maintenance Rental
Divisions and the continuing growth in market share of domestic electrical
products.
Ellies` Electro-plating plant commenced full production in April 2008 and is
adding further efficiencies and cost savings to the Engineering Division and
improving export competitiveness.
The acquisition of Megatron Federal, finalised after year end, has not affected
these results. A contribution to earnings from Megatron Federal will be included
in the results for the year ended 30 April 2009, in accordance with IFRS 3.
BOTSWANA
The Botswana companies trading as Ellies and ElSat were included in the profit
forecast as published in the prospectus. At this stage, exchange approval is
still awaited, with completion imminent. IFRS3 requires the results of Botswana
to be excluded until all conditions to the agreement have been fulfilled.
Accordingly, the results of Botswana have been removed in the pro-forma profit
forecast and current 12 months trading to April 2008.
BASIS OF PREPARATION AND REVIEW OPINION
The reviewed preliminary results have been prepared in accordance with IFRS,
specifically IAS 34 (Interim Financial Reporting), and comply with the
requirements of the South African Companies Act, 1973 and the listing
requirements of the JSE Limited. As required by the JSE Limited Listings
requirements, the group reports headline earnings in accordance with Circular
8/2007 : Headline Earnings as issued by the South African Institute of Chartered
Accountants.
These results have been reviewed by the group`s auditors, PKF (Jhb) Inc Their
unqualified review opinion is available for inspection at the company`s
registered office.
PROJECTIONS
The board remains cautiously optimistic with regard to the group`s organic
growth notwithstanding the current leveling-off of general consumer demand and
spend. With the acquisition of Megatron Federal as of 1 May 2008, and in light
of their forward order-book, seamless integration, contribution to product lines
and expertise and inherent synergies with Ellies, the board expects to maintain
growth in revenue and profitability.
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, no dividend
has been declared for this maiden financial year.
APPRECIATION
We welcome the management and staff of Megatron and thank all our staff,
customers, business partners, advisors, suppliers to the Ellies group and most
importantly our shareholders for their support and faith in the group.
By order of the board
Elliot R. Salkow Wayne Samson
Executive Chairman Chief Executive Officer
Michael Levitt
Chief Financial Officer
21 July 2008
Directors:
E Salkow (Chairman); W Samson (CEO); M Levitt (CFO);
J Murray; R Berkman; R Otto; H Epstein*; A Brooking*; M Mazwi* (*non-
executive)
Business address:
94 Eloff Street Ext, Village Deep, Johannesburg, South Africa
Business Postal Address:
P O Box 57076, Springfield 2137, South Africa.
Visit our website: www.elliesholdings.com
Transfer Secretaries:
Link Market Services South Africa (Proprietary) Limited
Company secretary:
Probity Business Services (Proprietary) Limited
Designated advisor:
Java Capital (Proprietary) Limited
Date: 21/07/2008 07:05:10 Produced by the JSE SENS Department.
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