| Thu 28 Aug 2008, 10:15 | | RBA - RBA Holdings Limited - Abridged interim results for the six month period |
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RBA
RBA
RBA - RBA Holdings Limited - Abridged interim results for the six month period
ended 30 June 2008
RBA HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 1999/009701/06)
Share Code: RBA
ISIN Code: ZAE000104154
("RBA Holdings")
ABRIDGED INTERIM RESULTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2008
Highlights
Earnings attributable to ordinary shareholders 14% increase
Revenue growth 6%
Abridged consolidated balance sheet
30 30 31
June(Revi June(Revi December
ewed)2008 ewed)2007 (Audited)
R`000 R`000 2007
R`000
Assets
Non-current assets 83 193 50 908 67 649
Current assets 90 115 50 313 79 227
Total assets 173 308 101 221 146 876
Equity and liabilities
Capital and reserves 103 254 36 248 85 167
Non-current liabilities 35 344 31 799 25 845
Current liabilities 34 710 33 174 35 864
Total equity and liabilities 173 308 101 221 146 876
Abridged consolidated income statement
6 months ended Year
ended
30 30 Chang 31 Dec
June(Re June(Re e% (Audited
viewed) viewed) )2007
2008 2007 R`000
R`000 R`000
Revenue 105 851 100 177 6% 244 046
Cost of Sales (64 (59 9% (156
601) 196) 218)
Gross profit 41 250 40 981 87 828
Operating expenses (27 (17 61% (39 319)
571) 147)
Earnings before interest 13 679 23 834 48 509
and taxation
Other income 12 402 3 285 7 211
Net finance charges (1 553) (1 217) (1 505)
Profit before taxation 24 528 25 902 54 215
Taxation (6 437) (7 022) (15 769)
Profit after taxation 18 091 18 880 38 446
Profit/(Loss) from (3) (632) 324
associate companies
Minority interests 113 (2 242) (2 652)
Attributable earnings 18 201 16 006 14% 36 118
Headline Earnings
Earnings attributable to 18 201 16 006 14% 36 118
ordinary shareholders
Fair value adjustment of (850) (750) (1 540)
"non-core business"
investment property
Profit/(Loss) on sale of - - (142)
property, plant and
equipment
Headline earnings 17 351 15 256 34 436
attributable to ordinary
shareholders
Weighted average number of 310 000 280 000 288 383
shares in issue 000 000 562
Basic earnings per share 5.87 5.72 3% 12.52
(cents)
Headline earnings per share 5.60 5.45 3% 11.94
(cents)
Abridged statement of changes in equity
Share Share Retained Minority Total
capital premium earnings Interest R`000
R`000 R`000 R`000 R`000
Balance at 1 January 1 - 17 396 604 18 001
2007
Profit for the period - - 16 006 2 242 18 248
Balance at 30 June 1 - 33 402 2 846 36 249
2007
Profit for the period - - 20 111 410 20 521
Issue of shares 2 30 000 - - 30 002
Share issue expenses - (1 606) - - (1
606)
Balance at 1 January 3 28 394 53 514 3 256 85 166
2008
Profit for the period - - 18 201 (113) 18 088
Balance at 30 June 3 28 394 71 715 3 143 103
2008 254
Abridged consolidated cash flow statement
6 months ended Year ended
30 30 31
June(Reviewed)2008 June(Reviewed)2007 December(Audited)2007
R`000 R`000 R`000
Cash and 2 334 630 630
equivalents
at
beginning
of period
Cash flows 12 775 2 646 (15 222)
from
operating
activities
Cash flows (7 616) (13 035) (26 088)
from
investing
activities
Cash flows (2 533) 7 447 43 014
from
financing
activities
Cash and 4 960 (2 312) 2 334
equivalents
at end of
period
OVERVIEW
The directors of RBA Holdings present the reviewed interim results for the 6
month period ended 30 June 2008.
Established in 1997, RBA Holdings is a supplier of fully bonded affordable homes
in Gauteng and Polokwane. Our business model focuses on the acquisition of land,
town planning, project management of services installation, marketing and
construction of quality affordable homes.
PERFORMANCE REVIEW
In a challenging trading period, revenue was up 6% in comparison with the same
reporting period last year.
The revenue number was below expectation due to delays in commencing with
construction in the Braamfischerville Ext 14 project area in the south west of
Johannesburg. To date, 221 sales with approved end user finance have been
concluded on the project and construction was initially scheduled for March
2008. Township establishment and infrastructure servicing of the project was
delayed due to the fact that mineral prospecting rights are attached to the
project which needed to be waived by the holder before the residential housing
development could commence. The issue has been resolved and construction will
begin in February 2009 with the revenue on these sales realising during the 2009
financial year.
Gross profit margin reduced marginally from 40% to 38% due to the reduction in
the average size of homes built. This is a consequence of individuals purchasing
smaller homes relative to their income and affordability levels.
A strategic decision was taken by the group to gear up the business
operationally. Therefore the increase of 61% in group operating expenses was due
to the following:
The strengthening of the senior management tier within the group.
Increasing capacity at an operational level.
Aggressive marketing campaigns in building brand awareness for the group.
Other income includes revaluations of our long term investment property
portfolio to market value, amounting to R 10,9 million. R 10,1 million relates
to the revaluation of rental units and R 850 k to the revaluation of our office
premises.
At 30 June 2008 inventory consisting of land available for development amounted
to 674 stand opportunities. In accordance with IFRS this inventory is not
revalued to market value.
Stand deposits held by land developers and attorneys amounted to R 15,6 million.
These deposits are used to secure land opportunities amounting to 6 837 stands.
These stands are then sold to end users in the form of a turnkey housing package
consisting of land and a top structure unit.
PROSPECTS
With a shortage of housing in South Africa estimated at over 2 million homes, of
which 600 000 are in the affordable housing sector, the long term prospects for
the group are very positive.
The group will continue with its strategy of introducing higher density housing
developments thereby reducing the land cost per unit. The group will also
continue its strategy of acquiring land in areas along the urban edges to ensure
that its land pipeline is maintained.
As at 30 June 2008, 7511 stand opportunities were secured and 490 fully bank
funded units were under construction in 14 project areas. These units will be
completed before the end of 2008. The group had concluded 520 approved sales
that were awaiting registration at the deeds office and the group had 782 stands
that were immediately available for sale to prospective clients.
It is management`s view that the interest rate cycle has neared its peak. As the
cycle enters a downward phase the demand for our product will increase as our
clients affordability in terms of bank lending criteria improves.
The group`s initiative of growing its rental book is underway. This will add to
our annuity income stream as well as capital appreciation on the units.
In spite of the delay in the Braamfischerville Ext 14 project area and the
weaker market conditions management expects earnings per share for the 2008
financial year to be in line with that achieved for the 2007 financial year.
SUBSEQUENT EVENTS
The directors are not aware of any matter or circumstance arising since the end
of the period, which significantly affects the financial position of the Group
or the results of its operations as presented in these results.
DIVIDEND POLICY
In line with RBA Holdings growth strategy no dividend has been declared. The
dividend policy of RBA Holdings will be reviewed at the end of the 2009
financial year with due regard to cash flow, gearing and capital requirements.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The consolidated interim financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) and IAS 34: Interim
Financial Reporting. The accounting policies used in the preparation of these
results are consistent in all material respects with those used in the annual
financial statements for the year ended 31 December 2007.
REVIEW OPINION
The auditors of RBA Holdings, LUCRO Auditing, have reviewed the financial
information in terms of rule 3.18 of the Listings Requirements of the JSE
Limited. Their unqualified review opinion is available for inspection at the
offices of RBA Holdings.
APPRECIATION
We thank our dedicated staff for their commitment and hard work during the past
6 months. We also thank our business partners, advisors, clients and
shareholders for their support and faith in the group.
By order of the Board
28 August 2008
David Wentzel Jason Mortimer
Chief Executive Officer Financial Director
CORPORATE INFORMATION
Executive directors: D K Wentzel; J L Mortimer; B A Stegmann; R F Eksteen; D F
Esterhuyse; G S Warren
Non-executive directors: L Theron, L A Thondi
Company Secretary: K M Linstrom
Registration number: 1999/009701/06
Registered address: Nedbank Building, Cnr Biccard & Jorissen Street,
Braamfontein, 2017
Postal address: P.O Box 30885, Braamfontein, 2017
Telephone: 011 483 5000
Facsimile: 086 516 0873
Web address: www.rbaholdings.co.za
Transfer secretaries: Computershare Investor Services (Pty) Limited
Auditors: LUCRO Auditing
Designated Adviser: Exchange Sponsors (Pty) Limited
Date: 28/08/2008 10:15:01 Produced by the JSE SENS Department.
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