| Wed 1 Oct 2008, 7:05 | | SFH - S A French Limited - Audited Condensed Results For The Financial |
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SFH
SFH
SFH - S A French Limited - Audited Condensed Results For The Financial
Year Ended 30 June 2008 and dividend declaration
S A FRENCH LIMITED
Incorporated in the Republic of South Africa
(Registration number 1982/009174/06)
Share code: SFH & ISIN: ZAE000108890
("SA French" or "the group")
AUDITED CONDENSED RESULTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2008
GROUP INCOME STATEMENT Audited Audited
12 months ended 12 months ended
30 June 2008 30 June 2007
R`000 R`000
Revenue 152 047 120 970
Cost of sales (117 896) (90 487)
Gross profit 34 151 30 483
Other income 842 3 998
Operating costs/expenses (22 115) (14 115)
Operating profit 12 878 20 366
Investment revenue 983 146
Gain on acquisition of reserves in - 33
subsidiary
Finance costs (4 226) (1 254)
Profit before taxation 9 635 19 291
Taxation (2 700) (6 605)
Profit after taxation 6 935 12 686
Reconciliation of attributable
earnings to headline earnings
6 935 12 686
Profit attributable to ordinary
shareholders
Loss / (Gain) on disposal of 11 (1 192)
property, plant and equipment
Tax effect of the disposal of (3) 149
property, plant and equipment.
Headline earnings attributable to 6 943 11 643
ordinary shareholders
Number of shares
Issued 165 000 000 115 000 000
Weighted average 148 333 333 115 000 000
Earnings per share - (cents) 4.68 11.03
Headline earnings per share - 4.68 10.12
(cents)
GROUP BALANCE SHEET Audited Audited
30 June 2008 30 June 2007
R`000 R`000
ASSETS
Non-current assets 42 649 27 524
Property, plant and equipment 38 353 27 524
Other financial assets 4 296 -
Current assets 139 039 55 695
Inventories 108 758 40 297
Loans to shareholders - 65
Current tax receivable 39 -
Trade and other receivables 20 112 10 667
Cash and cash equivalents 10 130 4 666
Total assets 181 688 83 219
EQUITY AND LIABILITIES
Capital and reserves 64 976 10 236
Share capital 48 955 1 150
Revaluation reserve 162 162
Retained income 15 859 8 924
Minority interest * *
Non-current liabilities 26 222 12 494
Installment sale agreements 25 050 12 076
Deferred tax 1172 418
Current liabilities 90 490 60 489
Loans from shareholders 9 568 6 988
Other financial liabilities - 518
Current tax payable 1 1 022
Installment sale agreements 8 367 2 060
Trade and other payables 72 012 49 347
Provisions 311 554
Bank overdraft 231 *
Total equity and liabilities 181 688 83 219
Number of shares issued 165 000 000 115 000 000
Net asset value per share - 39.38 8.90
(cents)
Net tangible asset value per 39.38 8.90
share - (cents)
* Less than R1 000
CONDENSED GROUP CASH FLOW STATEMENT Audited Audited
30 June 2008 30 June 2007
R`000 R`000
Net cash from operating activities (40 816) 14 656
Net cash from investing activities (19 550) (19 037)
Net cash from financing activities 65 598 6 858
Total cash movement for the year 5 232 2 477
Cash at the beginning of the year 4 666 2 189
Total cash at end of the year 9 898 4 666
CONDENSED GROUP Share Revaluation Retained Minority Total
STATEMENT OF capital reserve income interest equity
CHANGES IN EQUITY
R`000 R`000 R`000 R`000 R`000
Balance at 1 July 1 150 162 6 238 33 7 583
2006
Profit for the year - - 12 686 - 12 686
Dividends - - (10 000) - (10 000)
Acquisition of - - - (33) (33)
minority interest
Balance at 30 June 1 150 162 8 924 * 10 236
2007
50 000 - - - 50 000
Premium on issue of
shares
Listing expenses (2 195) - - - (2 195)
written off
Profit for the year - - 6 935 - 6 935
Dividends - - - - -
Balance at 30 June 48 955 162 15 859 * 64 976
2008
* Less than R1 000
COMMENTARY
Introduction
The directors are pleased to present the maiden financial results of SA
French for the year ended 30 June 2008. The year saw SA French list
successfully on the Alternative Exchange ("AltX") of the JSE Limited ("JSE")
on 7 November 2007. The share opened trade at a premium to the pre-listing
issue price of R1 per share, giving SA French a market capitalisation on
listing of R222.75 million.
Basis of preparation
The group annual financial statements from which these condensed financial
statements were derived have been prepared on the historical cost basis
excluding financial instruments which are fair valued and conform to
International Financial Reporting Standards ("IFRS"). The accounting policies
are consistent with those applied in the annual financial statements for the
year ended 30 June 2007. These condensed financial statements set out in this
report have been prepared in terms of IAS 34, the Companies Act, 1973 (Act 61
of 1973), as amended, and the Listings Requirements of the JSE.
Auditor`s report
The group`s annual financial statements for the year ended 30 June 2008 have
been audited by the company`s auditors, Anderson Rouchussen van der Bijl Inc.
The auditors` unmodified report on the group`s annual financial statements is
available for inspection at the company`s registered office.
Group profile
SA French was founded 26 years ago with the exclusive South African
distributorship for Potain, the world`s largest tower crane manufacturer.
Today it is the leading distributor of tower cranes and lifting solutions in
sub-equatorial Africa. The group currently offers a broad range of lifting
and materials handling solutions that are available either for sale or for
rental. All of the products are backed by high levels of service support
including a comprehensive parts inventory, competent and skilled technicians
and an in-house engineering capability.
Review of operations
The highlight of the year was the listing of SA French on the AltX which has
seen a positive effect in our market.
In early 2008 two new branches were launched, one in Cape Town and the other
in Durban, with four new service crews being employed and trained in these
regions. Whilst developing infrastructure is costly and the initial costs are
in most cases once off, management are of the opinion that it was absolutely
necessary to establish the Group as a national force. These expenses were for
the most part budgeted and the Group expects the investment to pay dividends
in both the short and long term.
In August 2008 the Group concluded a contract for the supply, delivery and
erection of two tower cranes on a major infrastructure project at Eskom`s
Medupi coal fired power station. The Group is also involved in the tender
process for cranes to be used in the construction of the Kusile power
station. It is expected that with the large civil projects commencing at the
end of 2008 that the next calendar year will start on a more positive note
than the last.
The Group undertook several turnkey projects in which all aspects of design
and installation of the lifting solution were handled by the Group`s
technical teams. These projects included the placement and commissioning of a
high specification tower cranes in Gauteng, KwaZulu Natal and the Eastern
Cape, the supply and commissioning of tower cranes and working platforms for
use on the construction of Westwood shopping centre in Durban, and the supply
and installation of passenger hoists for the Gauteng rapid rail link project.
Skills development
This year also saw a rise in the demand for our service department`s
expertise in erecting, servicing and dismantling tower cranes and hoists
throughout the country. The opening by SA French of branches in Durban and
Cape Town on 3 January 2008 resulted in four new service crews being employed
and trained in 2008.
Expansion of South African footprint
In January 2008 branches in Cape Town and Durban were fully established as a
result of planning and market research conducted in the latter half of 2007.
This has resulted in a national service being offered to our clients and new
markets opening up to the group through the expansion of our geographic
footprint.
Financial results
Group revenue increased by 25.7% to R152.047 million (2007: R120.970 million)
while operating profit decreased by 36.8% to R12.878 million (2007: R20.366
million). Net profit after tax is R6.935 million against the previous year of
R12.686 million. Headline earnings of R6.942 million for the year translated
into headline earnings per share of 4.68 cents (2007: 10.12 cents). The
group`s gross profit margin has decreased to 22.5% from 25.2%.
The electricity supply crisis that hit South Africa in January 2008 caused
uncertainty for many of SA French`s key clients in the construction industry.
This resulted in delays in the awarding of several infrastructure projects
and construction companies responded by restricting or delaying capital
expenditure decisions such as the purchase of tower cranes.
This change in market dynamic resulted in a change of focus in SA French`s
business. In particular, SA French has experienced an increase in demand for
crane rentals as many of its clients seek to keep costs variable until there
is clarity on the power supply issue. An increase in the rental of instead of
the sale of tower cranes has had an effect on SA French`s financial
statements. Firstly, from a balance sheet perspective SA French has made a
significant investment in its rental fleet. Secondly, from a revenue and
profitability perspective short-term profitability has been replaced by
longer-term revenues from rentals.
The cash reserves which have been accumulated will facilitate both organic
growth and current and future acquisitions.
Segmental reporting
IAS 8 has not been early adopted and will be implemented on 1 January 2009.
Management have not presented segment reporting during the year under review.
Prospects
The group is involved in major projects that begin in the first quarter of
2009 for the construction of the long awaited power station.
The award of the coal fired power station, Medupi, as well as the planned
award of the second such power station, Kusile, means that the major
contractors bidding for these contracts have been kept in close communication
with regard to the lifting requirements of these projects.
Subsequent events
The directors are not aware of any material matter or circumstances arising
since the end of the financial year and up to the date of this report.
Capitalisation award with a cash dividend alternative
Notice is hereby given that the directors of SA French have resolved to issue
fully paid ordinary shares in the company as a capitalisation award to
ordinary shareholders in lieu of a dividend. Ordinary shareholders will be
entitled, in respect of all or part of their shareholding, to elect to
receive new fully paid ordinary shares, which will be issued only to those
ordinary shareholders who elect in respect of all or part of their
shareholding, on or before 12:00 on Friday, 21 November 2008, to receive the
capitalisation award shares. Shareholders not electing to receive new fully
paid ordinary shares in respect of all or part of their shareholding will be
entitled to receive a cash dividend alternative of 1 cent per ordinary share
("the cash dividend alternative").
Salient dates
In accordance with the provisions of Strate, the electronic settlement and
custody system used by the JSE, the relevant dates for the capitalisation
award election and the cash dividend alternative are as follows:
Activity 2008
Final details of the capitalisation award Friday, 7 November
ratio to be released on the Securities
Exchange News Service ("SENS") on
Last day to trade to receive the cash Friday, 14 November
dividend or participate in the
capitalisation award
Shares commence trading ex the cash Monday, 17 November
dividend and the capitalisation award
Listing of the maximum number of new Monday, 17 November
ordinary shares to be taken up in terms of
the capitalisation award
Last day to elect to receive capitalisation Friday, 21 November
award shares by no later than 12:00
Record date to participate in the Friday, 21 November
capitalisation award or to receive the cash
dividend alternative
Payment of the cash dividend alternative to Monday, 24 November
shareholders who have elected to not
participate in the capitalisation award or
have participated in the capitalisation
award in respect of only part of their
shareholding
New shares issued and posted or Central Monday, 24 November
Securities Depository Participant ("CSDP")
or broker accounts credited regarding the
shares to be issued to shareholders
participating in the capitalisation award
in respect of all or part of their
shareholding.
Results of the capitalisation award Tuesday, 25 November
published on SENS
The maximum number of new shares listed in Thursday, 27 November
terms of the capitalisation award adjusted
to reflect the actual number of shares
issued in terms of the capitalisation award
on or about
Notes:
1. Shares may not be dematerialised or rematerialised between Monday, 17
November 2008, and Friday, 21 November 2008, both days inclusive.
2. The above dates and times are subject to change. Any changes will be
published on SENS.
The number of capitalisation shares to which shareholders are entitled
will be determined in the ratio that 1 cent per ordinary share bears to
the 30-day volume-weighted average price for SA French`s share, to be
determined no later than Thursday, 6 November 2008. Details of the ratio
will be published on SENS no later than Friday, 7 November 2008, at
11:00. Trading in the Strate environment does not permit fractions and
fractional entitlements. Accordingly, where a shareholder`s entitlement
to new ordinary shares calculated in accordance with the above formula
gives rise to a fraction of a new ordinary share, such fraction will be
rounded up to the nearest whole number, where the fraction is greater
than or equal to 0.5 and rounded down to the nearest whole number, where
the fraction is smaller than 0.5.
3. The right to the capitalisation shares in jurisdictions other than the
Republic of South Africa may be restricted by law and a failure to
comply with any of those restrictions may constitute a violation of the
securities laws of any such jurisdiction. Shareholder`s rights to
capitalisation shares are not being offered, directly or indirectly, in
the United States of America, the United Kingdom, Canada, Australia or
Japan, unless certain exemptions from the requirements of those
jurisdictions are applicable.
4. Dematerialised shareholders are required to notify their duly appointed
CSDP or broker of their election in terms of the capitalisation award in
the manner and at the time stipulated in the agreement governing the
relationship between the shareholder and his/her CSDP or broker.
The Notice of Annual General Meeting contained in the Annual Report
which will incorporate the capitalisation award and the cash dividend
alternative will be posted to shareholders on or about Wednesday, 5
November 2008.
Appreciation
We thank our employees for their continued loyalty, hard work and commitment
which culminated in the successful listing of the group on the JSE in
November 2007. We also thank our fellow directors for their wise counsel and
our stakeholders for their consistent faith in the group.
On behalf of the board
Quentin van Breda Warwick van Breda
Chief Executive Officer Operations Director
30 September 2008
Directors:
QCA van Breda (Chief Executive Officer), W van Breda (Operations Director),
JC Prinsloo (Financial Director), LB Mophatlane*, JM Poluta*, JD Xaba, MW
Mashaba (Formally MW Matlala)
*non-executive
Registered office
131 Fitter Road
Spartan
Kempton Park, 1619
Designated Adviser
Merchantec (Proprietary) Limited
2nd Floor, North Block
Hyde Park Office Tower
Corner Sixth Road & Jan Smuts Avenue
Hyde Park, Johannesburg, 2196
(PO Box 41480, Craighall, 2024
Transfer secretaries
Computershare Investor Services (Proprietary) Limited
Ground Floor
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Company secretary
Warwick van Breda
131 Fitter Road
Spartan
Kempton Park, 1619
(PO Box 2144, Kempton Park, 1620)
Date: 01/10/2008 07:05:01 Produced by the JSE SENS Department.
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implicitly, represent, warrant or in any way guarantee the truth, accuracy or
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employees and agents accept no liability for (or in respect of) any direct,
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