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ELR ELRP
ELR
ELR / ELRP - ELB Group - Reviewed Group Provisional Report And Final Cash
Dividend Declarations For The Year Ended 30 June 2008
ELB GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1930/002553/06)
Share codes: ELR & ELRP
ISIN: ZAE000035101 & ZAE000035333
(`ELB`, `the Company` or `the Group`)
REVIEWED GROUP PROVISIONAL REPORT AND FINAL CASH DIVIDEND DECLARATIONS FOR THE
YEAR ENDED 30 JUNE 2008
COMMENTS
INTRODUCTION
The ELB Group is a total solutions provider to the mining, minerals, power,
port, construction and industrial sectors in the field of materials handling and
appropriate process plants. This is achieved through ELB generated innovation
and the supply, with world class partners, of equipment and technology. The
Group operates in South Africa and Australia.
ELB is an investment holding company owning 85 per cent of ELB Engineering
Limited (ELB Engineering) with the remaining 15 per cent owned by the ELB
Educational Trust established as the Group`s BEE partner promoting education in
maths and science of historically disadvantaged South Africans.
FINANCIAL RESULTS
Sales of the Group increased by 11,5 percent from R983 million in 2007 to R1 096
million in 2008, and headline earnings of the Group increased by 121 percent
from R30,2 million in 2007 to R66,8 million in 2008.
Sales of continuing operations increased by 18,9 percent from R900 million in
2007 to R1 069 million in 2008, and headline earnings of continuing operations
increased by 33,2 percent from R49,3 million in 2007 to R65,7 million in 2008.
South African continuing operations sales increased by 17,1 percent from R785
million in 2007 to R920 million, and headline earnings by 31,6 percent from
R40,4 million in 2007 to R53,2 million in 2008.
The Australian operation saw ELB Engineering`s 84,2 percent proportionately
consolidated share of turnover increase by 30,8 percent from R114 million in
2007 to R150 million in 2008, and share of headline earnings by 40,6 percent
from R8,9 million in 2007 to R12,5 million in 2008.
DISPOSAL OF ELB TIMBERS
As reported previously, the disposal of the Group`s timber operations was
concluded during the year.
PROSPECTS
The ELB Group continues to be well positioned to benefit from both the ongoing
infrastructure spend in Southern Africa and Australia as well as the increase in
capacities and efficiencies being implemented by the global resources and power
industry sectors. This will be enhanced by the continued growth and development
of our know how and skills base.
DIRECTORATE
Mr Joe Matsau was appointed a director on 8 July 2008. We welcome him to the
Board and look forward to his contribution as a director into the future.
SOCIAL RESPONSIBILITY
As mentioned above, ELB`s empowerment partner is the ELB Educational Trust
established to promote education in maths and science of historically
disadvantaged South Africans. To this end bursaries were awarded to five
students at various South African universities.
ELB also made substantial donations to the St Vincent School for the Deaf, the
John Wesley Community Centre in Benoni and Ligbron Academy of Technology. These
institutions have been identified as worthy of ELB`s support and will further
assist the historically disadvantaged in our community.
ACCOUNTING POLICIES
The reviewed provisional financial statements have been prepared in accordance
with International Accounting Standard (IAS) 34: Interim Financial Reporting.
Accounting policies accord with International Financial Reporting Standards
(IFRS), and are consistent with those applied in the financial year ended 30
June 2007. The provisional financial statements also comply with the South
African Companies Act 1973, as amended.
Where necessary, comparative amounts have been reclassified in accordance with
the classification in the current financial year.
REVIEW BY THE INDEPENDENT AUDITOR
KPMG Inc, the Company`s independent auditor, has reviewed the provisional
financial statements contained in this provisional report and has expressed an
unmodified conclusion on the provisional financial statements. The review report
is available for inspection at the Company`s registered office.
DIVIDENDS
The final dividend has been increased from 20 cents in 2007 to 40 cents in 2008
reflecting the Board`s confidence in the prospects for the ELB Group going
forward.
The total dividend for the year is therefore 60 cents per share versus 30 cents
per share for the 2007 financial year representing an increase of 100 per cent.
On behalf of the Board
A G Fletcher
Chairman
Boksburg
18 September 2008
GROUP INCOME STATEMENT
Reviewed Audited
Year Year
ended ended
30 Jun 08 30 Jun 07
R000 R000
Continuing operations
Sales revenue 1 069 408 899 650
Operating costs excluding (969 668) (817 512)
depreciation
Operating profit before 99 740 82 138
depreciation
Depreciation (4 099) (3 499)
Profit from operations 95 641 78 639
Finance income 23 534 12 100
Finance expenses (8 814) (5 404)
Profit before tax 110 361 85 335
Income tax expense (34 709) (27 618)
Profit from continuing operations 75 652 57 717
Discontinued operations
Profit/(loss) from discontinued 2 107 (19 067)
operations as detailed below
Profit for the year 77 759 38 650
Attributable to:
Ordinary shareholders of ELB 68 007 30 386
Minority interest 9 752 8 264
77 759 38 650
PROFIT/(LOSS) FROM DISCONTINUED
OPERATIONS
Profit/(loss) from operations 901 (15 243)
before items listed below
Retrenchment reversal/(accrual) of 200 (3 824)
costs
Profit on sale of property 1 647 -
Loss on sale of subsidiaries (641) -
Profit/(loss) from discontinued 2 107 (19 067)
operations
CALCULATION OF GROUP HEADLINE EARNINGS
Reviewed Audited
Year Year
ended ended
30 Jun 08 30 Jun 07
R000 R000
Profit attributable to ordinary 68 007 30 386
shareholders of ELB per the income
statement
Deduct: Items excluded from headline 1 250 179
earnings as detailed below:
Continuing operations:
Profit on disposal of plant and equipment:
Included in profit from operations 275 202
Discontinued operations:
Profit on disposal of plant and 77 60
equipment
Profit on sale of property 1 647 -
Loss on sale of subsidiaries (641) -
Income tax effect of items excluded from
headline earnings (79) (61)
Minority interest in items excluded from
headline earnings (29) (22)
Headline earnings 66 757 30 207
Weighted average number of shares 27 454 27 246
(excluding treasury shares) on which basic
earnings per share are based (000`s)
Earnings per ordinary share (cents)
- basic 247,7 111,5
- diluted 247,5 111,5
Headline earnings per ordinary share
(cents)
- basic 243,2 110,9
- diluted 242,9 110,9
Dividends declared for the year per 60 30
ordinary share (cents)
GROUP BALANCE SHEET
Reviewed Audited
30 Jun 08 30 Jun 07
R000 R000
ASSETS
Non current assets 59 425 34 674
Property, plant and equipment 41 820 26 662
Non current loan receivable 3 949 -
Deferred tax assets 13 656 8 012
Current assets 786 553 517 067
Inventories and construction 381 345 210 098
contracts in progress
Receivables and other current 89 974 66 271
assets
Assets of discontinued operations - 31 522
held for disposal
Cash and cash equivalents 315 234 209 176
Total assets 845 978 551 741
EQUITY AND LIABILITIES
Attributable to ordinary 264 058 192 982
shareholders of ELB
Issued capital 25 192 25 192
Treasury shares (24 758) (23 215)
Reserves 9 373 (6 208)
Retained earnings 254 251 197 213
Preference shares 8 8
Total equity attributable to 264 066 192 990
equity holders of ELB
Minority interest 21 500 9 830
Total equity 285 566 202 820
Non current liabilities 17 724 7 201
Interest bearing borrowings 9 891 5 768
Provision 7 403 -
Deferred tax liabilities 430 1 433
Current liabilities 542 688 341 720
Non interest bearing payables and 286 889 221 707
other current liabilities
Interest bearing payables 228 719 90 142
Income tax payable 27 080 18 478
Liabilities of discontinued - 11 393
operations held for disposal
Total equity and liabilities 845 978 551 741
Ordinary shares in issue (000`s) 33 860 33 860
Deduct: Treasury shares in issue 6 403 6 454
(000`s)
Ordinary shares in issue on which 27 457 27 406
net asset value per share is
calculated
Net asset value per share (cents) 962 704
NOTES
Capital commitments
At 30 June 2008 there were capital commitments of R2 924 000 (30 June 2007 - R14
868 000).
Contingent liabilities
A Group entity has issued a guarantee of R830 000 in favour of a raw material
supplier to a company which was previously part of the ELB Timbers segment, and
has now been sold. The guarantee is cancellable by three calendar months notice.
No accrual has been made in respect of the guarantee.
ELB Engineering Services operates in the engineering contracting business and is
exposed to the risks associated with engineering contracts. These risks are
managed on the basis of limited liability.
All known liabilities of the group have been accrued. However a contractual
dispute has arisen that the directors believe will be unlikely to result in a
material loss.
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to ordinary shareholders of ELB
Issued Treasury Retained
capital shares Reserves earnings Total
R000 R000 R000 R000 R000
Balance at 30 June 25 192 (24 098) (11 315) 172 282 162 061
2006
Profit for the 30 386 30 386
year
Foreign currency 5 107 5 107
translation
adjustments for
foreign operations
Total recognised - - 5 107 30 386 35 493
income and expense
for the year
Ordinary dividends (5 455) (5 455)
paid
The ELB Share
Incentive Trust
Paid up shares 883 883
released by the
trust
Total changes for - 883 5 107 24 931 30 921
the year
Balance at 30 June 25 192 (23 215) (6 208) 197 213 192 982
2007
Profit for the 68 007 68 007
year
Foreign currency 15 037 15 037
translation
adjustments for
foreign operations
Total recognised - - 15 037 68 007 83 044
income and expense
for the year
Ordinary dividends (10 969) (10 969)
paid
Premium above (853) (853)
equity carrying
amount on buyout
of minority
interest in
subsidiary
Recognition of 1 397 1 397
share options
The ELB Share
Incentive Trust
Net increase in (1 543) (1 543)
treasury shares
held
Total changes for - (1 543) 15 581 57 038 71 076
the year
Balance at 30 June 25 192 (24 758) 9 373 254 251 264 058
2008
Attributable
to ordinary
shareholders Reviewed
of ELB Preference Minority Total
Total shares Interest equity
R000 R000 R000 R000
Balance at 30 162 061 8 665 162 734
June 2006
Profit for the 30 386 8 264 38 650
year
Foreign currency 5 107 901 6 008
translation
adjustments for
foreign
operations
Total recognised 35 493 - 9 165 44 658
income and
expense for the
year
Ordinary (5 455) (5 455)
dividends paid
The ELB Share
Incentive Trust
Paid up shares 883 883
released by the
trust
Total changes for 30 921 - 9 165 40 086
the year
Balance at 30 192 982 8 9 830 202 820
June 2007
Profit for the 68 007 9 752 77 759
year
Foreign currency 15 037 2 654 17 691
translation
adjustments for
foreign
operations
Total recognised 83 044 - 12 406 95 450
income and
expense for the
year
Ordinary (10 969) (586) (11 555)
dividends paid
Premium above (853) (150) (1 003)
equity carrying
amount on buyout
of minority
interest in
subsidiary
Recognition of 1 397 1 397
share options
The ELB Share
Incentive Trust
Net increase (1 543) (1 543)
in treasury
shares held
Total changes for 71 076 - 11 670 82 746
the year
Balance at 30 264 058 8 21 500 285 566
June 2008
GROUP CASH FLOW STATEMENT
Reviewed Audited
Year Year
ended ended
30 Jun 08 30 Jun 07
R000 R000
Continuing operations
Cash inflow from operating activities 120 073 77 598
before dividends paid
Dividends paid (11 555) (5 455)
Cash inflow from operating activities 108 518 72 143
Cash outflow from investment activities (19 985) (6 648)
Cash inflow / (outflow) from financing 2 580 (2 306)
activities
Cash inflow from continuing operations 91 113 63 189
Discontinued operations
Cash inflow/(outflow) from discontinued 14 945 (3 913)
operations
Increase in cash and cash equivalents 106 058 59 276
Cash and cash equivalents at the beginning 209 176 149 900
of the year
Cash and cash equivalents at the end of 315 234 209 176
the year
SEGMENT ANALYSIS
Reviewed Audited
Year Year
ended ended
30 Jun 08 30 Jun 07
R000 R000
SEGMENT REVENUE
Continuing operations
ELB Engineering 1 069 408 899 650
Discontinued operations
ELB Timbers 26 765 83 711
Total 1 096 173 983 361
SEGMENT RESULTS
Headline earnings/(loss)
Continuing operations
ELB Engineering 67 607 49 007
ELB Group non segmental (1 874) 327
(expense)/income
Headline earnings of continuing 65 733 49 334
operations
Headline earnings/(loss) of discontinued
operations
ELB Timbers 1 024 (19 127)
Headline earnings attributable to 66 757 30 207
ordinary shareholders of ELB
Items excluded from headline earnings
Continuing operations 167 119
Discontinued operations 1 083 60
Profit attributable to ordinary 68 007 30 386
shareholders of ELB
FINAL CASH DIVIDEND DECLARATIONS
The directors have declared the following final cash dividends for the year
ended 30 June 2008.
PREFERENCE DIVIDEND NUMBER 115
A final cash dividend has been declared at the rate of 6% per annum for the
second six month period on the 6% fixed cumulative redeemable preference shares
of R2 each, equivalent to 6 cents per share.
ORDINARY DIVIDEND NUMBER 121
A final cash dividend of 40 cents per share has been declared on the ordinary
shares.
The salient dates in respect of both dividends are:
Last day to trade cum dividend Friday, 17 October 2008
Shares commence trading ex dividend Monday, 20 October 2008
Record date Friday, 24 October 2008
Date of payment Monday, 27 October 2008
Share certificates may not be dematerialised or rematerialised between Monday,
20 October 2008, and Friday, 24 October 2008, both dates inclusive.
By order of the Board
DG Jones
Secretary
Boksburg
19 September 2008
REGISTERED OFFICE
ELB Equipment
14 Atlas Road
Anderbolt
Boksburg
1459
SHARE TRANSFER SECRETARIES
Computershare Investor Services (Pty) Limited
70 Marshall Street
Johannesburg 2001
(PO Box 61051, Marshalltown, 2107)
SPONSOR
Rand Merchant Bank
(a division of FirstRand Bank Limited)
1 Merchant Place
Cnr Fredman Drive &
Rivonia Road
Sandton 2196
DIRECTORS
AG Fletcher (Chairman), PJ Blunden (Chief Executive - ELB Equipment), T de
Bruyn,* Dr JP Herselman,* TJ Matsau* Dr SJ Meijers (Chief Executive - ELB
Engineering Services), MV Ramollo
* Non executive
Date: 19/09/2008 12:18:01 Produced by the JSE SENS Department.
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