| Thu 7 Aug 2008, 12:00 | | KWS - Kwikspace Modular Buildings - Audited Condensed Results For The Year Ended |
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KWS
KWS
KWS - Kwikspace Modular Buildings - Audited Condensed Results For The Year Ended
31 May 2008 and dividend declaration
KWIKSPACE MODULAR BUILDINGS LIMITED
Registration number 1997/008959/06
Share code: KWS
ISIN: ZAE000104287
AUDITED CONDENSED RESULTS
for the year ended 31 May 2008
HIGHLIGHTS
- Revenue up 49,2%
- Operating profit up 32,5%
- Headline earnings up 48,2%
- Maiden dividend of 20 cents per share
INTRODUCTION
The directors of Kwikspace are pleased to present the maiden audited condensed
financial results for the year ended 31 May 2008, which results have delivered
strong growth.
BASIS OF PREPARATION OF THE AUDITED RESULTS
The condensed financial statements comprise a balance sheet at 31 May 2008, an
income statement, a statement of changes in equity and a summarised cash flow
statement for the year ended 31 May 2008.
The condensed financial statements have been prepared in accordance with IAS 34,
Interim Financial Reporting. The accounting policies adopted in the preparation
of the condensed financial statements are consistent with those used to prepare
the financial statements for the six months ended 31 May 2007 and in accordance
with International Financial Reporting Standards (IFRS) and the South African
Companies Act, with the exception of the adoption of IFRS 7 and the early
adoption of IFRS 8.
The condensed financial statements have been prepared on the historical cost
basis, except for certain financial assets and financial liabilities that have
been measured at fair value and revaluation of certain property, plant and
equipment.
The sum total of the income statement for the six months ended 30 November 2006
and 31 May 2007 should be used as a comparative for the twelve months under
review ending 31 May 2008. During the period (1 June 2006 to 30 November 2006),
however the company was operating as a division of its former holding company
Steelwood Africa (Pty) Limited.
NATURE OF THE BUSINESS
Kwikspace is the largest and most diverse manufacturer of factory built
accommodation in Africa. Since 1972, Kwikspace has been manufacturing, selling
and renting modular buildings and is the only national modular building company
in South Africa and ISO 9001: 2000 accredited.
Rental
The company has 2,488 rental units in its fleet, the largest rental fleet in
South Africa. Customers rent from 1 unit to 300 units at a time and rental
contracts range from 1 month to 3 years, with a current average rental period of
5,2 months.
Mobiles
Mobile units are manufactured at the company`s Klipriver, Cape Town and Durban
factories. The mobile units are fully assembled at the factory and then
transported by road, rail or sea as fully built units ready for immediate
occupation in urban or rural areas.
Sizes vary up to 61m2 if transported fully assembled to the site or up to 612m2
if the unit is transported and later assembled on site.
Panelised
Panelised units are manufactured at the company`s Klipriver factory outside
Johannesburg in a component kit form and then transported to the customers`
sites and erected.
The company`s panelised products offer ranges from single 12m2 buildings to 20
000m2 turnkey camps housing thousands of people.
OPERATIONAL REVIEW
Mobiles
A total of 2,085 mobile units which created approximately 55,100m2 of
accommodation space were manufactured at Klipriver, Cape Town and Durban
factories during the year. The growth in revenue has been driven by
infrastructure development, growth in the resources sector and government
spending on education and health.
Panelised
For the financial year ending 31 May 2008 the company manufactured, sold and
erected a total of approximately 43,900m2 of panelised buildings for offices,
schools and other accommodation space.
Rental
During the year 402 units were added to the rental fleet which increased the
fleet size to 2,488 units. The average utilisation for 2008 was 94%, this in
comparison to 92% in 2007. Revenue growth in the rental division has been driven
by the increase in the overall level of infrastructure spending in the economy
and the expansion in the resources industry.
Prospects
The board expects that the economies in which the company operates will remain
strong for the foreseeable future, as will the demand for the company`s
products.
The company is currently busy with delivery to and construction on site relating
to numerous contracts in export countries like the DRC, Zambia, Mozambique and
Angola.
The order books in the various business segments are higher than this time last
year. Business is being attracted from the following areas in particular, mining
in other countries in Africa and the infrastructure and resource expansion
locally.
FINANCIAL REVIEW
Income statement
Revenue increased by 49,2% to R402,1 million (2007: R269,6 million).
Gross profit increased by 51,1% to R195 million
(2007: R129,1 million).
Operating profit grew significantly by 32,5% to R96,3 million
(2007: R72,7 million).
Profit for the period increased by 46,3% to R64,5 million
(2007: R44,1 million).
Headline earnings increased by 48,2% to R65,2 million
(2007: R44,0 million).
The compound annual growth rate over the past four years has been 56,7% per
annum for revenue and 57,5% per annum for operating profit.
The increase in the profit for the period is greater than the operating profit
increase because of the tax rate adjustment during 2008. As was stated in the
interim results, interest on shareholders` loans of R150 million was paid for
the second six months of 2007 and the first six months of 2008, hence the
similar finance cost figure in the two years. The interest in the first half of
2008 was R8,8 million but in the second half was R2,5 million.
The profit earned is not uniformly distributed between the first and second
halves of the year. The second half has short months in December and January due
to construction sector holidays and Easter holidays in April.
Headline earnings
12 months 6 months 6 months
audited audited reviewed
R`000 31 May 31 May 30 November
2008 2007 2006
Earnings attributable to 64 482 19 078 24 957
ordinary shareholders
Adjustments
Loss/(profit) on sale of 965 75 (186)
property, plant and equipment
Total tax effect of adjustments (270) (22) 54
Headline earnings 65 177 19 131 24 825
Ordinary shares
Issued ordinary shares 85 384 615 - -
Weighted average number of 78 659 100 - -
shares
Headline earnings per share 82,86 - -
(cents)
Comparative figures for the earnings and headline earnings per share have not
been disclosed, seeing as it will not give a true reflection of the company`s
performance for the year ending 31 May 2008, in the prior comparative periods
there were only 100 issued shares.
CAPITAL COMMITMENTS
The company has spent R46,4 million on property, plant and equipment, with R20,9
million authorised and committed for the 2009 financial year.
GUARANTEES AND CONTINGENT LIABILITIES
The total contingent liabilities of the company in respect of guarantees by the
bank amount to R14,6 million (2007: R6,7 million). Guarantees are issued in
respect of due performance of contracts by third parties. The directors are of
the opinion that any loss is improbable and it is not anticipated that any
material liabilities will arise.
BORROWINGS
The shareholders` loans of R150 million at 31 May 2007 were repaid with the
proceeds from the listing. Long-term borrowings increased by R13,3 million to
R15,0 million, this was a result of land and buildings previously leased being
purchased by means of a mortgage bond as well as plant and machinery being
imported and financed through instalment sale agreements.
POST BALANCE SHEET EVENTS
On 5 August 2008 the board approved additional capital expenditure to the value
of R32,4 million.
SEGMENTAL REPORTING
The company has adopted IFRS 8, Operating Segments in advance of its effective
date, with effect from 1 January 2007. IFRS 8 requires operating segments to be
identified on the basis of internal reports about components of the company that
are regularly reviewed by the chief operating decision maker in order to
allocate resources to the segment and to assess its performance. In contrast,
the predecessor standard (IAS 14, Segment Reporting) required an entity to
identify two sets of segments (business and geographical), using a risks and
rewards approach, with the entity`s "system of internal financial reporting to
key management personnel" serving only as the starting point for the
identification of such segments. As a result, following the adoption of IFRS 8,
the identification of the company`s reportable segments has changed. The
company`s reportable segments under IFRS 8 are therefore as follows:
- Rentals
- Panelised
- Mobiles
- Corporate and other
Information regarding these segments is reported in the condensed segmental
analysis. Amounts reported for the prior year have been restated on the new
basis.
DIVIDEND
Notice is hereby given that a maiden dividend of 20 cents per ordinary share has
been declared on 5 August 2008, in respect of the year ended 31 May 2008.
In compliance with the requirements of the JSE Limited, the following dates are
applicable.
Last day to trade cum dividend Thursday, 18 September 2008
First trading day ex dividend Friday, 19 September 2008
Record date Friday, 26 September 2008
Payment date Monday, 29 September 2008
Share certificates may not be dematerialised or rematerialised between Friday,
19 September 2008 and Friday, 26 September 2008, both days inclusive.
CORPORATE GOVERNANCE
The directors and senior managers of the company endorse the Code of Corporate
Practices and Conduct as set out in the King II Report on Corporate Governance.
The board has to date appointed a remuneration committee as well as an audit
committee.
GOING CONCERN
The condensed financial statements have been prepared on the going concern basis
since the directors have every reason to believe that the company has adequate
resources in place to continue in operation for the foreseeable future.
BOARD OF DIRECTORS
On 5 August 2008, Mr WRG Post stood down as chairperson of the company, but will
remain a non-executive director. Mr AJ Phillips has been appointed in his place.
AUDIT OPINION
The results for the period ended 31 May 2008 have been audited by the company`s
auditors, BDO Spencer Steward (Jhb) Inc., and the unqualified audit report is
available for inspection at the company`s registered office.
By order of the board
AJ Russell KR Coulthard
Financial Director Chief Executive Officer
7 August 2008
CONDENSED BALANCE SHEET
Audited Audited
31 May 31 May
R`000 2008 2007
Assets
Non-current assets
Property, plant and equipment 164 047 133 093
Goodwill 36 179 36 179
200 226 169 272
Current assets
Inventories 44 438 26 074
Trade and other receivables 124 413 79 321
Cash and cash equivalents 9 509 4 950
178 360 110 345
Total assets 378 586 279 617
Equity and liabilities
Equity
Share capital and premium 143 635 *
Non-distributable reserves 1 459 -
Retained income 83 462 19 078
228 556 19 078
Liabilities
Non-current liabilities
Long-term financial liabilities 12 625 151 057
Deferred tax 20 622 27 411
33 247 178 468
Current liabilities
Loans from group companies - 2 268
Current portion of long-term financial 2 404 654
liabilities
Taxation payable 27 473 7 669
Trade and other payables 86 906 71 480
116 783 82 071
Total liabilities 150 030 260 539
Total equity and liabilities 378 586 279 617
Issued ordinary shares 85 384 615 -
Weighted average number of shares 78 659 100 -
Net asset value per share (cents) 290,57 -
Net tangible asset value per share 244,57 -
(cents)
CONDENSED INCOME STATEMENT
12 months 6 months 6 months
audited audited reviewed
31 May 31 May 30 November
R`000 2008 2007 2006
Revenue 402 051 142 054 127 511
Cost of sales (207 035) (66 623) (73 858)
Gross profit 195 016 75 431 53 653
Other income 3 431 87 1 466
Operating expenses (102 190) (39 227) (18 727)
Operating profit 96 257 36 291 36 392
Finance income 66 93 -
Finance costs (11 453) (9 511) (41)
Profit before taxation 84 870 26 873 36 351
Taxation (20 388) (7 795) (11 394)
Profit for the period 64 482 19 078 24 957
Issued ordinary shares 85 384 615 - -
Weighted average number of 78 659 100 - -
shares
Earnings per share (cents) 81,98 - -
CONDENSED STATEMENT OF CHANGES IN EQUITY
12 months 6 months
audited audited
31 May 31 May
R`000 2008 2007
Shareholders` equity at the beginning of 19 078 *
the period
Issue of ordinary shares 143 537 -
Profit for the year 64 482 19 078
Movement in other reserves 1 459 -
Shareholders` equity at the end of the 228 556 19 078
period
* The issued share capital at 31 May 2007 was R100
CONDENSED CASH FLOW STATEMENT
12 months 6 months
audited audited
31 May 31 May
R`000 2008 2007
Cash flows from operating activities 42 168 21 342
Purchase of property, plant and equipment (46 373) (9 293)
Proceeds on sale of property, plant and 4 199 468
equipment
Acquisition of business - (159 353)
Repayment of loans to group companies (2 268) -
Proceeds of loans to group companies - 1 075
Cash flows from investing activities (44 442) (167 103)
Proceeds on share issue 143 515 -
Repayment of interest-bearing borrowings 13 318 711
Proceeds from shareholders` loans - 150 000
Repayment of shareholders` loans (150 000) -
Cash flows from financing activities 6 833 150 711
Net increase in cash and cash equivalents 4 559 4 950
Cash and cash equivalents at the 4 950 -
beginning of the period
Cash and cash equivalents at the end of 9 509 4 950
the period
CONDENSED SEGMENTAL ANALYSIS
12 months 6 months
audited audited
31 May 31 May
R`000 2008 2007
Primary segment
Revenue
Rental 84 491 35 223
Mobiles 162 051 50 349
Panelised 155 509 56 482
Corporate and other - -
402 051 142 054
Operating profit
Rental 52 049 21 949
Mobiles 46 010 15 312
Panelised 41 520 15 871
Corporate and other (43 322) (16 841)
96 257 36 291
Total assets
Rental 153 069 140 691
Mobiles 83 669 45 721
Panelised 77 322 47 389
Corporate and other 64 526 45 816
378 586 279 617
CORPORATE INFORMATION
Executive directors: KR Coulthard (CEO); JP Jooste; AJ Russell; SC Slabbert;
BL Viviers
Non-executive directors: AJ Phillips (Chairperson); LT Buthelezi; MC Mogase;
SK Mota; WRG Post; JA Flint
Registration number: 1997/008959/06
Registered address: 32 Karee Kloof Road, Waterval, Klipriver
Postal address: PO Box 580, Klipriver, 1871
Company secretary: WR Somerville
* Telephone: (011) 617 8000
* Facsimile: (011) 903 8993
Transfer secretaries: Link Market Services South Africa (Pty) Limited
Legal advisors: Prinsloo, Tindle & Andropoulos Inc.
Lead sponsor: JP Morgan Equities Limited
These results and an overview of Kwikspace are available at www.kwikspace.co.za
Date: 07/08/2008 12:00:01 Produced by the JSE SENS Department.
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