| Thu 23 Oct 2008, 9:00 | | TWP - TWP - Reviewed interim results for the six months ended 31 August 2008 |
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TWP
TWP
TWP - TWP - Reviewed interim results for the six months ended 31 August 2008
TWP Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2003/025640/06)
Share code: TWP
ISIN: ZAE000110763
("TWP" or "the company")
Reviewed interim results for the six months ended 31 August 2008
TWP Holdings Limited Group Group Group
and its subsidiaries Reviewed Audited Reviewed
31 August 29 February 31 August
Balance sheet 2008 2008 2007
R`000 R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 86,178 37,588 21,424
Intangible assets (incl goodwill) 163,130 36,726 36,726
Available-for-sale financial assets 6,335 - -
Loans to related companies 1,258 1,250 2,461
Deferred taxation 1,752 1,023 349
258,653 76,587 60,960
Current assets
Trade and other receivables 284,370 173,883 97,626
Work in progress 51,372 61,850 23,751
Available-for-sale financial assets 47,496 51,261 -
Cash and cash equivalents 51,625 91,259 28,572
434,863 378,253 149,949
693,516 454,840 210,909
SHAREHOLDERS` EQUITY
Share capital and premium 283,891 190,391 100
Other reserves (19,341) (14,987) (1,649)
Retained earnings 219,510 154,593 91,700
484,060 329,997 90,151
Minority interest 376 1,769 1,202
484,436 331,766 91,353
LIABILITIES
Non-current liabilities
Deferred taxation 14,089 9,168 1,564
Long term liabilities 5,228 4,609 6,133
19,317 13,777 7,697
Current liabilities
Trade and other payables 106,432 66,981 69,469
Deferred revenue 8,568 283 -
Short term portion of long term
liabilities 4,109 2,542 3,993
Bank overdraft 6,902 12,435 9,590
Taxation 63,752 27,056 28,807
189,763 109,297 111,859
693,516 454,840 210,909
TWP Holdings Limited Group Group Group
and its subsidiaries Reviewed Audited Reviewed
6 months 12 months 6 months
Income statement ended ended ended
31 August 29 February 31 August
2008 2008 2007
R`000 R`000 R`000
Revenue 515,687 705,006 277,240
Cost of sales (348,313) (414,020) (190,461)
Gross profit 167,374 290,986 86,779
Net operating expenses (79,040) (136,515) (24,680)
Operating profit 88,334 154,471 62,099
Finance income 4,948 5,249 400
Finance costs (1,354) (5,019) (1,174)
Profit before income taxes 91,928 154,701 61,325
Income tax expense (26,987) (44,943) (16,007)
Net profit for the year 64,941 109,758 45,318
Net profit for the period attributable to:
Equity shareholders of the parent company 64,917 105,736 42,843
Minority shareholders 24 4,022 2,475
Net profit for the year 64,941 109,758 45,318
cents cents cents
Basic and diluted earnings per share 56.71 102.20 42.84
Basic and diluted headline earnings per share 56.55 93.82 34.29
TWP Holdings Limited
and its subsidiaries
Share capital Other Retained Minority
Statement of changes and premium reserves earnings interest Total in
equity R`000 R`000 R`000 R`000 R`000
Balance at 28 February
2007 100 - 48,857 475 49,432
Shares issued 181,748 - - - 181,748
Acquisitions and formations 8,543 (15,445) - (2,793) (9,695)
Translation of foreign
subsidiaries - 458 - 65 523
Net profit for the period - - 105,736 4,022 109,758
Balance at 29 February 2008 190,391 (14,987) 154,593 1,769 331,766
Shares acquired for share
incentive scheme (10,000) - - - (10,000)
Share incentive scheme
accrued - 601 - - 601
Shares issued on acquisition
of subsidiary 103,500 - - - 103,500
Disposal of subsidiaries - - - (1,393) (1,393)
Translation of foreign
subsidiaries - (166) - (24) (190)
Fair value loss on available
for sale financial assets - (4,789) - - (4,789)
Net profit for the period - - 64,917 24 64,941
Balance at 31 August 2008 283,891 (19,341) 219,510 376 484,436
TWP Holdings Limited Group Group Group
and its subsidiaries Reviewed Audited Reviewed
6 months 12 months 6 months
Cash flow statement ended ended ended
31 August 29 February 31 August
2008 2008 2007
R`000 R`000 R`000
Cash flow from operating activities 67,230 4,963 39,320
Cash flow from investing activities (91,564) (86,841) 2,962
Cash flow from financing activities (9,577) 161,861 (21,618)
Cash and cash equivalents
- movement for the period (33,911) 79,983 20,664
Cash and cash equivalents
- beginning of the period 78,824 (1,682) (1,682)
Exchange difference on translation
of foreign operations (190) 523 -
Cash and cash equivalents
- end of period 44,723 78,824 18,982
TWP Holdings Limited South Australian Turkish Inter- Total
and its subsidiaries African operations operations segment for the
operations eliminations 6 months
Segmental information 31 August
2008
Geographical segments R`000 R`000 R`000 R`000 R`000
Revenue 456,724 63,983 - (5,020) 515,687
Operating profit 86,568 1,766 - - 88,334
Total assets 672,080 37,535 - (16,099) 693,516
Total liabilities (190,649) (34,525) - 16,094 (209,080)
Net assets 481,431 3,010 - (5) 484,436
Capital expenditure (43,067) (12,694) - - (55,761)
Depreciation (7,858) (1,354) - - (9,212)
TWP Holdings Limited South Australian Turkish Inter- Total
and its subsidiaries African operations operations segment for the
operations eliminations 12 months
Segmental information 29 February
2008
Geographical segments R`000 R`000 R`000 R`000 R`000
Revenue 656,729 47,958 6,842 (6,523) 705,006
Operating profit 150,715 4,244 (488) - 154,471
438,612 27,344 7,664 (18,780) 454,840
Total liabilities (109,495) (24,337) (7,877) 18,635 (123,074)
Net assets 329,117 3,007 (213) (145) 331,766
Capital expenditure (25,193) (7,750) (139) - (33,082)
Depreciation (8,841) (861) - - (9,702)
Notes to the condensed financial information
1. Basis of preparation
These condensed consolidated financial statements have been prepared on the
historical cost basis, except for financial instruments that are fair valued, in
accordance with the group`s accounting policies which are consistent with those
adopted in the financial year ended 29 February 2008 and which are compliant
with International Financial Reporting Standards ("IFRS") and in accordance with
IAS 34: "Interim Financial Reporting", the South African Companies Act, 1973, as
amended, and the JSE Listings Requirements.
2. Audit review opinion
These financial results have been reviewed by the group`s auditors,
PricewaterhouseCoopers Inc., and their unqualified review opinion is available
for inspection at the company`s registered office.
3. Earnings & headline earnings per share
Group Group Group
Reviewed Audited Reviewed
31 August 29 February 31 August
2008 2008 2007
R`000 R`000 R`000
Basic earnings per share
Basic earnings per share (cents) 56.71 102.20 42.84
is calculated based on net profit
for the period of (R`000) 64,917 105,736 42,843
and a weighted average number (`000)
of shares outstanding of 114,467 103,459 100,000
Headline earnings per share
Headline earnings per share (cents) 56.55 93.82 34.29
is calculated based on profit for
the period of R`000) 64,731 97,062 34,292
and a weighted average number (`000)
of shares outstanding of 114,467 103,459 100,000
Diluted basic earnings per share
The company currently has no potential equity instruments with a dilutive
effect.
Reconciliation of basic and headline earnings for the period:
Net profit for the period (R`000) 64,917 105,736 42,843
Profit after tax on the disposal of
fixed assets (111) (123) -
Profit after tax on the disposal of
Investment (75) (8,551) (8,551)
Headline earnings 64,731 97,062 34,292
4. Business acquisitions
The 100% acquisition of TPS Architects (Pty) Ltd, was finalised during the six
month period. The purchase price for this transaction amounted to R138 million
(excluding transaction costs), of which R103.5 million was settled by the issue
of 4,125,352 new TWP Holdings Limited shares. The balance was paid in cash. The
purchase contract makes provision for certain additional future payments/refunds
on this purchase price, based on the level of profits generated by this
business. The increase in the carrying value of intangible assets (including
goodwill) per the balance sheet is directly related to this transaction and is
based on a provisional purchase price allocation.
5. Disposals of businesses
The group disposed of its entire interests in two 51% owned subsidiaries (SA
Turkey Investments and TWP Eurasia) with effect from 1 March 2008. This
transaction resulted in the group recovering its investment, with an immaterial
profit being recognised in the current period.
6. Post balance sheet events
The 100% acquisition of Matomo Projects (Pty) Ltd, which includes the remaining
50% of TWP Matomo Projects (Pty) Ltd, was finalised during October 2008. This
acquisition resulted in Matomo Projects (Pty) Ltd and TWP Matomo Projects (Pty)
Ltd becoming wholly-owned subsidiaries of the TWP Holdings group. The purchase
price for this transaction amounted to R139.4 million (excluding transaction
costs), of which R58.9 million was settled by the issue of 2,346,140 new TWP
Holdings Limited shares. The full purchase price allocation is in the process of
being completed and will be fully disclosed in the group`s February 2009 annual
report.
Review of operations
The group`s core consulting engineering businesses continued to perform well
during the first half of the year and the increase in revenue over 2008 H1 of
86% to R516m was pleasing. Equally pleasing was the 65% increase in headline
earnings per share to 56.55 cents. The net profit after tax margin of 12.6% was
however down on the projected 15% due mainly to the costs associated with
increasing revenue so significantly. These costs can be expected to moderate in
the second half of the financial year. The acquisitions of TPS Architects (Pty)
Limited Projects and the balance of TWP Matomo Process Plant (Pty) Limited were
effectively completed during the period under review and these can be expected
to contribute to earnings in the second half of the current and the 2010
financial years. One negative during the current half year period was the
delayed start-up of our owned and managed recovery plant in Rustenburg which
experienced feedstock problems. This will be resolved later this year but no
provision for operating income has been taken into account for this financial
year.
TWP`s Australian subsidiary continues to expand, and from a start-up operation
last year, currently has almost 100 staff based in Perth. Continued growth and
expansion into Australasia is being pursued in Perth and additional locations. A
regional presence has also been established in Zambia/DRC and commissions
already secured.
The group is also expanding beyond its focus area of mining and minerals and is
now active in the fields of electricity generation and industrial chemicals.
Resources permitting, additional focus areas will be considered.
This performance comes at a time when commodity prices, currencies and world
economies are exposed to huge volatility. Despite this backdrop, TWP`s business
fundamentals remain strong and new commissions are being secured on a regular
basis. The "project pipeline" is now valued at some R140bn from the R52bn less
than a year ago and the group is now the largest engineering service provider in
Africa.
Prospects
The board is pleased with the group`s performance in the first half of the 2009
financial year and remains confident that the 2009 year-end target as contained
in the Pre-Listing Statement dated 20 November 2007 of R181m remains achievable.
Melville 22 October 2008
Directors
E Dube *(Chairman)
A Lawless *
H Makupula *
N Townshend (CEO)
S Dewsbery (CFO)
*Non-executive
Registered address: The Atrium, 7th Avenue & Rustenburg Road, Melville 2092.
Postal address: PO Box 61232, Marshalltown 2107.
Company Secretary T Liebenberg, Legal Information Services cc. Reg number
1993/022242/23. Address: Cnr Republic & Main Ave, Ferndale, Randburg. Tel +27
(11) 326-1330 Fax +27 (11) 787-5643. Email: Theunis@tli.co.za.
Transfer secretaries: Computershare Investor Services (Pty) Ltd., 70 Marshall
Street, Johannesburg 2001. PO Box 61051 Marshalltown 2107. Tel +27 (11) 370-
5000.
Sponsor: Nedbank Capital. Auditors: PricewaterhouseCoopers Inc. Bankers: FNB
Ltd. Attorneys: Tli Incorporated.
www.twp.co.za
Date: 23/10/2008 09:00:11 Produced by the JSE SENS Department.
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