| Thu 18 Sep 2008, 16:32 | | KDV - Kaydav Group - Unaudited Interim Results for the Six Months Ended |
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KDV
KDV
KDV - Kaydav Group - Unaudited Interim Results for the Six Months Ended
30 June 2008
KAYDAV GROUP LIMITED
Incorporated in the Republic of South Africa
Registration Number: 2006/038698/06
JSE code: KDV
ISIN: ZAE000108940
("KayDav" or "the Group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2008
HIGHLIGHTS:
- Revenue R199 million
- Headline earnings per share 3.4 cents
- Tangible net asset value per share 38.2 cents
Condensed Consolidated Income Statement
Unaudited Audited Audited
6 months 4 months 6 months
ended ended ended
30 June 31 December 30 June
2008 2007 2007
R R R
Revenue 198 860 060 103 765 910 -
Cost of sales (137 753 149) (71 574 673) -
Gross profit 61 106 911 32 191 237 -
Other income 314 615 274 523 -
Operating expenses (46 701 513) (22 690 325) (1 439 018)
Share-based payments - (4 000 000) -
Goodwill impairment (89 053 849) - -
Operating (loss)/profit (74 333 836) 5 775 435 (1 439 018)
Interest (paid)/received (709 493) (219 932) 1 028 716
(Loss)/Profit before
taxation (75 043 329) 5 555 503 (410 302)
Taxation (3 954 754) (2 777 809) -
(Loss)/Profit attributable
to equity holders of the
parent (78 998 083) 2 777 694 (410 302)
Reconciliation between
earnings and headline
earnings
(Loss)/Profit attributable
to equity holders (78 998 083) 2 777 694 (410 302)
(Profit)/Loss on disposal
of property, plant and
equipment (16 402) 270 179 -
Goodwill impairment 89 053 849 - -
Headline earnings/(loss)
attributable to equity
holders 10 039 364 3 047 873 (410 302)
Weighted average
number of shares in issue 295 232 716 220 363 402 100
Basic (loss)/earnings per
share (cents) (26.8) 1.3 (410 302)
Diluted (loss)/earnings
per share (cents) (26.8) 1.3 (410 302)
Headline earnings/(loss)
per share (cents) 3.4 1.4 (410 302)
Consolidated Balance Sheet
30 June 31 December 30 June
2008 2007 2007
R R R
ASSETS
Non-current assets 76 059 497 158 022 108 -
Plant and equipment 29 913 677 23 272 633 -
Goodwill 44 482 145 133 535 994 -
Deferred taxation 1 663 675 1 213 481 -
Current assets 151 349 234 148 532 784 50 610 342
Inventories 78 268 527 70 017 758 -
Trade and other receivables 64 374 360 60 341 937 -
Cash and cash equivalents 7 685 774 16 127 753 50 610 342
Taxation 1 020 573 2 045 336 -
227 408 731 306 554 892 50 610 342
EQUITY AND LIABILITIES
Capital and reserves 157 257 458 236 255 541 (410 202)
Share capital 295 295 100
Share premium 229 477 552 229 477 552 -
Retained earnings (72 220 389) 6 777 694 (410 302)
Non-current liabilities 11 069 815 6 136 472 -
Instalment sale liabilities 10 153 336 5 231 478 -
Deferred taxation 916 479 904 994 -
Current liabilities 59 081 458 64 162 879 51 020 544
Trade and other payables 42 653 185 38 375 885 -
Current portion of
instalment sale liabilities 4 944 159 4 447 659 -
Shareholder loan - - 51 020 544
Bank overdraft 9 106 778 13 303 603 -
Taxation - 6 756 872 -
Provisions 2 377 336 1 278 860 -
227 408 731 306 554 892 50 610 342
Shares in issue at
period-end 295 232 716 295 232 716 100
Tangible net asset value
per share (cents) 38.2 34.8 (410 202)
Condensed Consolidated Cash Flow Statement
Unaudited Audited Audited
6 months 4 months 6 months
ended ended ended
30 June 31 December 30 June
2008 2007 2007
R R R
Cash flows from
operating activities (1 437 575) (3 220 694) (410 302)
Cash flows from
investing activities (8 225 937) (111 013 204) -
Cash flows from
financing activities 5 418 358 117 058 048 51 020 644
Net (decrease)/increase
in cash and cash equivalents (4 245 154) 2 824 150 50 610 342
Cash and cash equivalents
at beginning of period 2 824 150 - -
Cash and cash equivalents
at end of period (1 421 004) 2 824 150 50 610 342
Condensed Consolidated Statement of Changes in Equity
Unaudited Audited Audited
6 months 4 months 6 months
ended ended ended
30 June 31 December 30 June
2008 2007 2007
R R R
Balance at the beginning of the
period 236 255 541 - -
Issue of shares - 233 857 817 100
Listing expenses - (4 379 970) -
Share-based payment - 4 000 000 -
(Loss)/Profit attributable to
equity holders of the parent (78 998 083) 2 777 694 (410 302)
Balance at the end of the period 157 257 458 236 255 541 (410 202)
Goodwill reconciliation
Goodwill at 1 January 2008 133 535 994
Impairment (89 053 849)
Goodwill at 30 June 2008 44 482 145
Commentary
Introduction
KayDav Group Ltd ("KayDav" or "the Group") specialises in the distribution and
adding of value to wood-based panels, which is the name given to products
manufactured through the compression of wood waste into a solid panel. Wood-
based panels are used for a variety of purposes in the construction, furniture
manufacturing and shopfitting industries.
Having faced challenging economic conditions during this interim period,
management has focused its attention on laying the foundation for future
growth. Our strategy is to consistently grow our market share by improving
operating efficiencies and opening stores in new geographical areas. We will
continue to pursue this strategy whilst investigating other opportunities as
they arise.
Financial results
The Group faced considerable challenges during the period resulting from the
general slowdown in the economy, rising interest rates, electricity supply
issues and the effect of the National Credit Act on bank lending. Due to the
contraction in business activity the Group has not achieved its growth
forecasts.
Monthly projections were used to arrive at the forecasts for the year ending
December 2008 as stated in the prospectus. For the six months to June the
Group`s turnover and headline earnings are 14% and 32% below these forecast
numbers respectively.
Historically the second half of the year accounts for the larger part of the
full year operating profits.
Headline earnings per share for the period of 3.4 cents compares to headline
earnings of 5.3 cents per share as per the pro forma financial information for
the corresponding prior period, published in the Group`s prospectus on
1 November 2007. The pro forma financial information included interest received
of R2 778 288 on cash balances which did not form part of the business
combination.
Goodwill arising from prior period acquisitions of the business of Kayreed and
the shares of Davidsons` Holding Company (Pty) Ltd was impaired during the
reporting period. Impairment resulted from changes in general valuation
assumptions affecting financial markets and the present decrease in earnings.
Goodwill was impaired by an amount R89 053 849, which resulted in a loss of
R78 998 083 for the reporting period.
Prospects
In line with our strategy the Group has opened a board wholesale and retail
business trading under the Davidson`s Discount Boards brand in Silverton,
Pretoria. The business commenced trading in August 2008 and has exceeded its
forecast turnover for the first month of operations. A new business called
Castle Timbers was established to manufacture solid wood products. The initial
set-up of this business in the Western Cape is complete and trading commenced
during September 2008.
In general the outlook for the economy remains difficult in the short term as
consumer spending continues to be under pressure. Despite the above management
is confident that the Group is well positioned to overcome these challenges
through focused implementation of its strategy.
Capital commitments
At period-end the group was contracted to acquire capital equipment to the
value of R1 809 056 for its new outlet in Silverton, Pretoria.
Dividends
No dividends were declared during the current period.
Basis of preparation
The interim financial statements have been prepared in accordance with
International Financial Reporting Standards, the requirements of IAS 34
(Interim Financial Reporting) and in compliance with the JSE Listings
Requirements and the Companies Act of South Africa, 1973.
The accounting policies applied in preparing these interim financial statements
are consistent with those presented in the annual financial statements for the
period to December 2007.
These results have not been audited or reviewed by the company`s auditors, PKF
(Jhb) Inc.
Appreciation
The board extends its appreciation to our management and staff for their
efforts during this reporting period. We also thank our customers and suppliers
for their continued support.
On behalf of the board
I H Stern G F Davidson
Chairman Chief Executive Officer 18 September 2008
Corporate information
Executive Directors: G F Davidson (CEO), G Davidson, M Slier (CFO), J Katz
Non-executive Directors: I H Stern (Chairman), J Hertz
Registration Number: 2006/038698/06
Registered Address: 3rd Floor, JHI House, 11 Cradock Avenue, Rosebank, 2196
Postal Address: PO Box 272, Ottery, 7808
Telephone: 021 704 7060 Facsimile: 021 704 2082
Company Secretary: Probity Business Services (Pty) Ltd
Transfer Secretaries: Link Market Services South Africa (Pty) Ltd
Sponsor: Java Capital (Pty) Ltd
Date: 18/09/2008 16:32:13 Produced by the JSE SENS Department.
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