| Wed 29 Oct 2008, 7:05 | | KIR - Kairos - Unaudited Interim Results For The Six Months Ended 31 August 2008 |
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KIR
KIR
KIR - Kairos - Unaudited Interim Results For The Six Months Ended 31 August 2008
KAIROS INDUSTRIAL HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number 1987/002927/06
Share code: KIR & ISIN: ZAE000011284
("Kairos" or "the Group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2008
OVERVIEW OF RESULTS
Revenue for the period under review increased marginally by 1,5%, however as a
result of the tough trading conditions, the operating loss increased by R3,033
million to R3,140 million.
The first six months trading in the Group has always been more difficult than
that in the second half of the year and the trend this year is no different. The
brick business continues to be marginalised because of the overtraded position
throughout the industry and the resultant aggressive price cutting that
continues to take place. Shrinkage in the domestic demand for bricks continues
as a result of the prevailing high interest rates and stringent lending
requirements defined in the Credit Act. The results in the brick division were
further severely affected by a lock out which ensued for a period of three weeks
during the reporting period.
The demands on the mining industry by ESKOM to conserve energy usage resulted in
a particularly slow start to the year for BroKrew, the mining ventilation and
ducting division of the Group. The mines held back on their normal order call
off and this position has only now started to normalise. The results were also
affected by the cancellation of a large order by one of its mining customers
that had their shafts flooded. BroKrew has commenced positioning itself to take
advantage of potentially large new business in diversified industries and these
costs have been expensed in the current reporting period.
The effects of the above translate into a net loss after taxation of R4,888
million for the period under review, which represents a loss per share of 1,94
cents, an increase of 1,29 cents from the previous loss per share of 0,65 cents.
Headline loss per share of 2,51 cents was up 1,86 cents on the previous loss per
share of 0,65 cents.
The financial information on which this interim statement is based has not been
reviewed or reported on by the company`s auditors.
BASIS OF PREPARATION
The unaudited consolidated interim financial statements have been prepared in
accordance with International Financial Reporting Standards ("IFRS"), and in
terms of IAS 34, and in compliance with the Listing Requirements of the JSE
Limited and the South African Companies Act (1973). These accounting policies
used in the preparation of these interim results are consistent with those used
in the annual financial statements for the year ended 29 February 2008.
DIVIDEND
The Board has resolved that no interim dividend will be declared.
PROSPECTS
Current market conditions remain flat and overtraded for the brick manufacturing
businesses within the Group. This situation is likely to continue until such
time as interest rates soften and positive sentiments return to the domestic
construction sector. In the interim period the businesses have been scaled
accordingly, to meet current demand on their bricks.
The potential for significant growth within the BroKrew division resulting from
ESKOM`s plans to roll out additional power stations over the next decade remain
exciting prospects for the Group. These contracts are typically of a longer term
nature and will contribute positively to the Groups earnings growth.
The coal exploration division continues to investigate new opportunities in the
market. Currently two prospecting permits have been granted with a third
approval being awaited. An application for a mining permit has been lodged on
one of the above reserves which should result in mining commencing in early
2009.
The planning for the development of the Groups` various residential and
commercial sites remain on track. More certainty on the finalisation of these
developments should be on hand by the financial year end.
Although there remain many challenges ahead, the Group continues to be very well
positioned within the markets in which it operates and the board remains
confident of the prospects for the full year.
CONTINGENCIES AND SUBSEQUENT EVENTS
There is no obligation, current or pending, which is considered likely to have
an adverse effect on the Group and no material events have occured in the period
between 31 August 2008 and the date of this report.
For and on behalf of the board
WL van Deventer WA Lombard
Chief Executive Financial Director
28 October 2008
ABRIDGED CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
for the for the for the
6 months 6 months 12 months
ended ended ended
31 Aug 31 Aug 29 Feb
(R`000) 2008 2007 2008
Revenue 116 101 114 394 245 398
Cost of sales (106 022) (100 449) (214 875)
Gross profit 10 079 13 945 30 523
Operating costs (13 219) (14 052) (25 463)
Operating (loss)/profit (3 140) (107) 5 060
before accounting for the
following:
Investment revenues 497 57 4 880
Profit on disposal of fixed - - 21
assets
Other income and gains - - 696
Reversal of 1 429 - (1 513)
impairment/(impairment) of
financial assets
Finance cost (3 612) (1 687) (6 954)
(Loss)/profit before taxation (4 826) (1 737) 2 190
Taxation (62) 99 (1 389)
- Normal (117) (73) (44)
- Deferred 55 172 (1 345)
Net (loss)/profit (4 888) (1 638) 801
attributable to ordinary
shareholders
Determination of headline
(loss)/earnings
(Loss)/profit after taxation (4 888) (1 638) 801
Profit on disposal of fixed - - (21)
assets
Fair value adjustment (1 429) - 1 513
Retrenchment costs - - 661
Headline (loss)/earnings (6 317) (1 638) 2 954
Number of shares on which 252 107 252 107 252 107
(loss)/earnings per share is
based (000`s)
Headline (loss)/earnings per (2.51) (0.65) 1.17
share (cents)
(Loss)/earning per ordinary (1.94) (0.65) 0.32
share (cents)
ABRIDGED GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
for the for the for the
6 months 6 months 12 months
ended ended ended
31 Aug 31 Aug 29 Feb
(R`000) 2008 2007 2008
Cash inflows/(outflows) from 1 293 (3 408) 5 283
operating activities
Cash outflows from investment (6 294) (1 309) (7 802)
activities
Cash inflows/(outflows) from 1 850 (928) (150)
financing activities
Net movement in cash and cash (3 151) (5 645) (2 669)
equivalents
Cash and cash equivalents at 4 501 7 170 7 170
beginning of period
Cash and cash equivalents at 1 350 1 525 4 501
end of the period
SEGMENTAL ANALYSIS
Unaudited Unaudited Audited
for the for the for the
6 months 6 months 12 months
ended ended ended
31 Aug 31 Aug 29 Feb
(R`000) 2008 2007 2008
REVENUE
Mining Supplies 96 803 82 169 187 661
Manufacturing - bricks 19 298 32 225 57 737
116 101 114 394 245 398
OPERATING AND INVESTMENT
INCOME
Mining Supplies 1 838 1 594 8 580
Manufacturing - bricks (5 489) 1 061 (4 522)
Property and other 54 (293) (511)
Investment income 497 57 4 880
(3 100) 2 419 8 427
GROUP BALANCE SHEET
Unaudited Unaudited Audited
as at as at as at
31 Aug 31 Aug 29 Feb
(R`000) 2008 2007 2008
ASSETS
Non-current assets 60 380 55 502 57 673
Investment Properties 11 700 11 700 11 700
Property, plant and equipment 42 113 36 113 39 406
Patents and intangibles 2 500 2 500 2 500
Investments - 1 315 -
Goodwill 3 874 3 874 3 874
Mineral and exploration assets 193 - 193
Current assets 103 835 84 170 87 552
Inventories 47 682 27 092 35 496
Other financial assets 9 297 8 823 7 311
Trade and other receivables 42 580 45 643 38 973
Mineral and exploration assets 1 271 - 1 271
Taxation overpaid 23 59 -
Cash and cash equivalents 2 982 2 553 4 501
TOTAL ASSETS 164 215 139 672 145 225
EQUITY AND LIABILITIES
Stated capital and reserves 60 271 64 412 65 159
Non-current liabilities 21 043 16 059 18 866
Other financial liabilities 9 872 10 159 10 103
Instalment sale agreements 5 866 2 632 3 435
Deferred taxation 5 305 3 268 5 328
Current liabilities 82 901 59 201 61 200
Loans from shareholders/group 509 - 3 342
companies
Other financial liabilities 19 700 11 351 16 562
BBBEE share creditors - 1 561 -
Current taxation payable 134 414 103
Instalment sale agreements 5 453 3 830 2 278
Trade and other payables 47 596 31 617 33 106
Provisions 7 877 9 401 5 365
Bank overdraft 1 632 - -
Loan payable - 1 027 444
TOTAL EQUITY AND LIABILITIES 164 215 139 672 145 225
Shares in issue (000`s) 252 107 252 107 252 107
Net asset value per share (cents) 23.91 25.55 25.85
Net tangible asset value per share 21.38 23.02 23.32
(cents)
STATEMENT OF CHANGES IN EQUITY
Capital Total
Revalua- redemp- share-
Stated tion Retained tion holders
(R`000) Capital reserve losses reserve equity
Balance as at
1 March 2007
As previously 209 564 6 487 (150 461) 460 66 050
reported (Restated)
Loss for the period - - (1 638) - (1 638)
Balance as at 209 564 6 487 (152 099) 460 64 412
31 August 2007
Profit for the - - 747 - 747
period
Realisation of - (872) 872 - -
revaluation reserve
through use
Balance as at 209 564 5 615 (150 480) 460 65 159
29 February 2008
Loss for the period - - (4 888) - (4 888)
Balance at 209 564 5 615 (155 368) 460 60 271
31 August 2008
Registered office: 1111 Church Street, Hatfield 0083, Pretoria
PO Box 11328, Hatfield 0028, Pretoria Tel: +27 (0) 12 342 1980 Fax: +27 (0)
12 342 1976 E-mail: info@kairos.co.za
Sponsor: Bridge Capital Advisors (Pty) Limited, 27 Fricker Road, Illovo
Boulevard, Illovo 2196
Share transfer secretaries: Computershare Investor Services (Pty) Limited, 70
Marshall Street, Johannesburg 2001
Directors: JB Oosthuizen (non-executive chairman), WL van Deventer (chief
executive), JJ de W Mulder, VD Mazibuko, WA Lombard
Visit us at www.kairos.co.za
Date: 29/10/2008 07:05:01 Produced by the JSE SENS Department.
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