| Wed 27 Aug 2008, 8:00 | | ARH - ARB Holdings Limited - Audited results for the year ended 30 June 2008 |
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ARH
ARH
ARH - ARB Holdings Limited - Audited results for the year ended 30 June 2008
ARB Holdings Limited
("ARB" or "the group")
(Registration number: 1986/002975/06)
Share code: ARH ISIN: ZAE000109435
AUDITED RESULTS
for the year ended 30 June 2008
HIGHLIGHTS
Successful listing on JSE November 2007
Performance in line with prelisting forecasts
Revenue up 28,3% y-o-y
Headline earnings up 23,7% y-o-y
Dividend of 13 cents per share
ABRIDGED GROUP INCOME STATEMENTS
Audited Audited
Year to Year to
June 2008 June 2007
R000`s R000`s
Revenue 1 343 909 1 047 642
Profit before interest and taxation 195 115 168 563
Interest received 7 492 1 416
Interest paid (6 541) (13 595)
Profit before taxation 196 066 156 384
Taxation 60 992 46 164
Profit for the year 135 074 110 220
Minority interest 30 930 26 027
Profit attributable to ordinary shareholders 104 144 84 193
Headline earnings adjustment (6) -
Tax on adjustments 2 -
Headline earnings 104 140 84 193
Ordinary number of shares in issue (000`s) 235 000 200 000
Weighted average number of shares (000`s) 221 325 200 000
Diluted number of shares (000`s) 221 325 200 000
Earnings per share (cents) 47,05 42,10
Diluted earnings per share (cents) 47,05 42,10
Headline earnings per share (cents) 47,05 42,10
Diluted headline earnings per share (cents) 47,05 42,10
ABRIDGED GROUP CASH FLOW STATEMENTS
Audited Audited
Year to Year to
June 2008 June 2007
R000`s R000`s
Cash generated by operating activities 183 688 81 542
Interest received 7 492 1 416
Interest paid (6 541) (13 595)
Taxation paid (68 660) (41 261)
Secondary tax on companies paid (3 275) -
Cash flows from operating activities 112 704 28 102
Cash flows from investing activities (10 417) (15 507)
Cash flows from financing activities
Proceeds of share issue 171 379 -
Dividends paid (57 700) -
Interest-bearing loans repaid (81 460) 25 129
Net increase in cash and cash equivalents 134 506 37 724
Cash and cash equivalents at beginning of year (22 000) (59 724)
Cash and cash equivalents at end of year 112 506 (22 000)
ABRIDGED GROUP BALANCE SHEETS
Audited Audited
30 June 2008 30 June 2007
R000`s R000`s
ASSETS
Non-current assets
Property, plant and equipment 94 168 77 310
Deferred tax 2 113 2 373
Current assets
Inventory 307 966 213 500
Trade and other receivables 235 033 195 854
Taxation prepaid 122 -
Cash resources 112 589 23
TOTAL ASSETS 751 991 489 060
EQUITY AND LIABILITIES
Equity and reserves
Share capital 24 20
Share premium 171 375 -
Non-distributable reserve - 9 374
Revaluation reserve 29 897 23 893
Accumulated profits 208 978 152 120
Total ordinary shareholders` funds 410 274 185 407
Minority interest 63 477 33 587
Total shareholders` funds 473 751 218 994
Non-current liabilities
Interest-bearing borrowings 4 212 40 070
Deferred lease liability 68 -
Deferred taxation 14 033 8 580
Current liabilities
Trade and other payables 248 407 130 585
Provisions 2 670 2 439
Interest-bearing borrowings 3 716 9 930
Deferred lease payments - 24
Shareholders` loans - 37 165
Taxation payable 5 051 19 250
Bank overdraft 83 22 023
TOTAL EQUITY AND LIABILITIES 751 991 489 060
Number of ordinary shares in issue (000`s) 235 000 200 000
Net asset value per share (cents) 174,58 92,70
Comparative ordinary number of shares in issue is stated after taking into
account the share split on 15 October 2007 of 10 000 for one share.
STATEMENT OF CHANGES IN EQUITY
Share capital and Revaluation Non-distributable
share premium reserve reserve
R000`s R000`s R000`s
Balance at 30 June 2006 20 6 483 9 374
Profit for the year - - -
Revaluation of
property, plant and
equipment net of tax - 17 410 -
Balance at 30 June 2007 20 23 893 9 374
Net proceeds of
share issue 171 379 - -
Transfer to
accumulated profits - - (9 374)
Profit for the year - - -
Revaluation of
property, plant and
equipment net of tax - 6 004 -
Dividends paid - - -
Balance at 30 June 2008 171 399 29 897 -
Accumulated Minority
profits interest Total
R000`s R000`s R000`s
Balance at 30 June 2006 67 927 7 560 91 364
Profit for the year 84 193 26 027 110 220
Revaluation of property, plant and
equipment net of tax - - 17 410
Balance at 30 June 2007 152 120 33 587 218 994
Net proceeds of share issue - - 171 379
Transfer to accumulated profits 9 374 - -
Profit for the year 104 144 30 930 135 074
Revaluation of property, plant and
equipment net of tax - - 6 004
Dividends paid (56 660) (1 040) (57 700)
Balance at 30 June 2008 208 978 63 477 473 751
COMMENTARY
Introduction
The board of ARB is pleased to present the maiden annual results since
listing for the year ended 30 June 2008 ("the year"). The group`s performance
is in line with pre-listing forecasts notwithstanding a weakened economy
which reversed a number of the underlying material assumptions set out in the
prospectus.
On 20 November 2007 the group successfully debuted on the Main Board of the JSE
Limited ("JSE") in the `Electronic and Electrical Equipment` sector. This has
significantly raised ARB`s profile, translating into an expanded customer base
and enhancing prospects.
Basis of preparation
The audited annual financial statements for the year have been prepared in
compliance with International Financial Reporting Standards ("IFRS"), IAS 34
and the South African Companies Act, 1973. The accounting policies applied in
preparing these audited annual financial statements are consistent with those
applied in the annual financial statements for the year ended 30 June 2007.
The annual financial statements have been audited by the group`s auditors PKF
(Durban), and their unqualified audit opinion is available for inspection at
the group`s registered office.
Financial review
Revenue increased by 28,3% to R1,34 billion from R1,05 billion in the previous
year. Profit attributable to ordinary shareholders grew to R104,1 million from
R84,2 million, 3% ahead of the forecast in the prospectus. Headline earnings of
R104,1 million, up 23,7% year-on-year, translated into headline earnings per
share of 47,05 cents compared to 42,10 cents.
Operating margins reduced slightly through planned expansion as anticipated in
ARB`s prospectus.
Cash raised from listing of R171,4 million was used to expunge debt, extend
ARB`s geographical footprint and fund further expansion in existing markets.
Stock levels increased ahead of forecast in the last quarter of the year.
This investment in inventory positions ARB to leverage a broadened product
range in anticipation of high demand.
Operational review
During the year ARB expanded into key geographical markets to positive effect,
particularly in the Gauteng and Cape regions. The group purchased larger
premises in Gauteng to capitalise on growth fuelled by infrastructure spend.
The Gauteng operations accounted for 35,6% of group revenue for the year. In
May 2008, ARB further expanded into coal-rich Mpumalanga with the opening of a
new branch in the provincial capital, Nelspruit.
The majority of ARB`s client base comprises industrial groups in high growth
sectors, Eskom, parastatals, major construction groups and electrical
contractors. This augurs well for ARB`s continued growth. The slowdown in the
residential development market has impacted minimally with only a negligible
percentage of revenue derived from this market.
Prospects
A new division, ARB Mining, was established subsequent to year-end to take
advantage of the buoyant mining sector in South Africa. ARB is currently
undergoing accreditation with a number of key mining houses and some early
signs of success are encouraging.
In addition the group has established ARB Global to focus exclusively on
exports into Africa. The new division is expected to benefit from
infrastructure development and growth in industry on the continent.
The directors anticipate further growth in market share as a result of
investment in ARB`s presence in Gauteng, Cape Town and Nelspruit.
Increased government and Eskom infrastructure expenditure is expected to drive
sales growth for ARB. Despite the current power crisis, the electrification of
rural areas continues unabated particularly in schools and clinics as well as
in low-cost housing. Eskom has confirmed that no budget cuts are planned in
low-cost housing connections in 2008/9.
A deep skills base with good succession planning has ensured that a young, but
experienced senior management tier is in place, providing sustainability of
leadership to guide the group`s future growth.
ARB will continue to evaluate appropriate acquisition opportunities in
complementary industries.
Dividend
ARB has declared a dividend for the year of 13 cents per share. This is in line
with the policy set out in the prospectus to distribute
a final dividend of up to a maximum of one third of net profit after taxation.
The salient dates for the dividend are as follows:
Last day to trade shares cum dividend Friday, 12 September 2008
Shares commence trading ex dividend Monday, 15 September 2008
Record date Friday, 19 September 2008
Payment date Monday, 22 September 2008
Share certificates may not be dematerialised or rematerialised between Monday,
15 September 2008 and Friday, 19 September 2008, both days inclusive.
Appreciation
We thank our management teams and employees for their hard work and commitment
which contributed to the group`s successful listing on the Main Board JSE as
well as the excellent performance for the year. We also thank our fellow
directors for their counsel and extend our appreciation to our business
partners, advisors, suppliers and customers for their ongoing support. We
welcome our new stakeholders who have joined us on or since listing, and look
forward to continuing to deliver value for them.
For and on behalf of the board.
Alan R Burke Craig Robertson Billy Neasham
Chairman Chief Executive Officer Financial Director
27 August 2008
Directors
AR Burke (Chairman)*; CC Robertson (CEO); WR Neasham (FD); ST Downes *>; JR
Modise*; DF Muhlwa*
*Non-executive >Independent
Registered office
10 Mack Road, Prospecton, Durban, 4110
PO Box 26426, Isipingo Beach, 4115
Auditors
PKF (Durban)
2nd Floor, 12 Palm Boulevard, Gateway, Umhlanga, 4319
PO Box 1858, Durban, 4000
Corporate advisor and sponsor
Bridge Capital Advisors (Pty) Limited
2nd Floor, 27 Fricker Road, Ilovo, 2196
PO Box 651010, Benmore, 2010
Transfer secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Company secretary
WR Neasham CA(SA)
10 Mack Road, Prospecton, Durban, 4110
PO Box 26426, Isipingo Beach, 4115
Investor relations
Envisage Investor & Corporate Relations
Date: 27/08/2008 08:00:02 Produced by the JSE SENS Department.
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