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RBX
RBX
RBX - Raubex Group Limited - Unaudited interim results for the six months ended
31 August 2008
Raubex Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 2006/023666/06
Share Code: RBX ISIN Code: ZAE000093183
Unaudited interim results for the six months ended 31 August 2008
Highlights
Revenues up 131,7% to R2,23 billion (H1 2008: R963,5 million)
Operating profit up 108,1% to R398 million (H1 2008: R191,2 million)
HEPS up 80,5% to 144,6 cents per share (H1 2008: 80,1 cents per share)
Strong cash flow from operations up 88,3% to R333,3 million (H1 2008: R177
million)
Capex spend of R232 million
Order book up 113% to R4,9 billion
Interim dividend of 30 cents per share declared
Francois Diedrechsen, Financial and Commercial Director of Raubex Group, said:
"The Group`s performance for the first half of the year has been extremely
healthy and in-line with our expectations. We are delighted to have yet again
delivered on our operational and financial strategy which was highlighted ahead
of our listing.
"During the period, we also successfully bedded down a number of acquisitions,
the financial effects of which are included in this set of results. These
acquisitions have proved to be value-enhancing and are performing well.
Importantly, the depth and breadth of skills and capacity that they`ve brought
to the Group positioned us well to continue taking full advantage of the spend
driven by the government and private sector.
"We look forward to another strong performance in the second half of the year."
10 November 2008
ENQUIRIES
Raubex Group 012 665 3226
Francois Diedrechsen
College Hill 011 447 3030
Fred Cornet 083 307 8286
Hayley Crane 072 758 1677
COMMENTARY
FINANCIAL OVERVIEW
Revenue increased 131,7% to R2,23 billion and operating profit increased 108,1%
to R398 million from the corresponding prior period.
Profit before tax increased 109,7% to R384,9 million.
Earnings per share increased 83,1% to 146,1 cents with headline earnings per
share increasing 80,5% to 144,6 cents.
Group operating margin decreased 10,1% from 19,8% to 17,8% compared to the
corresponding prior year period as a result of the acquisitions concluded
towards the end of last year.
The group generated operating cashflows of R333,3 million before finance charges
and taxation.
Capital expenditure on fixed assets to the value of R232 million was incurred
during the six months ended 31 August 2008.
Net cash outflow for the six months ended 31 August 2008 was R301,7 million with
total cash and cash equivalents at the end of the period amounting to R358,6
million. Net cash outflow on acquisition of subsidiaries amounted to R384
million.
Expenses related to the share incentive scheme amounted to R7,7 million during
the period.
OPERATIONAL OVERVIEW
The above financial performance includes the first set of earnings from the
acquisitions completed last year and which allowed Raubex to position itself as
a sizeable and credible industry player with the capacity and depth of skills to
take full advantage of the accelerated demand for its line of work.
Roadmac
Roadmac is a specialist in the manufacturing and the laying of asphalt, chip and
spray, surface dressing, enrichments and slurry seals.
Roadmac is the largest contributor to Group revenue and performance for the
period came in above expectations due to generally clement weather allowing for
increased productivity and a positive geographical mix during the winter months.
The division is operating in a very favourable environment supported by a
healthy order book.
The business of Bonn Plant Hire and Akasia Road Surfacing was integrated during
the period although only three months of earnings are included in these results.
Through Akasia Road Surfacing and National Asphalt, we expect the division to
benefit substantially from the high demand for asphalt required by the Gauteng
Freeway Improvement Project.
Revenue for the division increased 108% to R1,18 billion (H1 2008: R566,1
million) and operating profit by 92,5% to R219,9 million (H1 2008: R114,2
million).
The divisional margins decreased to 18,7% (H1 2008: 20,2%). This margin has now
stabilised and is expected to remain at the current levels.
The division incurred capital expenditure of R42 million during the period (H1
2008: R39,2 million).
Raubex Construction
Raubex Construction is the road and civil infrastructure construction company
focused on the key areas of new road construction (green fields) and heavy road
rehabilitation.
The acquisition of Thaba Bosiu Construction, Zamori Construction and Space
Construction were successfully integrated during the period and are performing
in line with expectations.
During the period under review, the Gauteng Freeway Improvement Project began
and Raubex Construction was awarded a significant contract worth some R720
million for the upgrading of National Route 21 (R21).
Internationally, the division has increased its activities in Zambia where eight
contracts are currently in progress including three major rehabilitation
contracts.
Revenue for the division increased 128,8% to R511 million (H1 2008: R223,4
million) whilst operating profit increased 133,2% to R62,6 million (H1 2008:
R26,9 million).
The divisional margins increased slightly to 12,3% (H1 2008: 12%).
The division incurred capital expenditure of R47,9 million during the period (H1
2008: R26 million).
Raumix
Raumix is the materials division of the Group with its core focus spread over
three areas including contract crushing, production of aggregates for the
commercial market and materials handling for the mining industry.
The acquisition of B&E International was successfully integrated during the
period. The contract crushing and material handling operations continue to
perform well with both SPH and B&E reporting strong first half results.
Revenue for the division increased 212,8% to R544,5 million (H1 2008: R174
million) and operating profit by 130,4% to R115,5 million (H1 2008: R50,1
million).
The divisional margins decreased to 21,2% (H1 2008: 28,8%) as a result of the
acquisition of B&E and lower margins achieved by the commercial quarry
operations due to a marked slow-down in the residential building market. It is
anticipated that some of the capacity available as a result will be utilised to
meet the demand for aggregates by various infrastructure development projects
around Gauteng.
Following the acquisitions of SPH and B&E, the division has undergone internal
restructuring in order to address the changing business mix and associated
management requirements. Going forward, Tobias Wiese of B&E will assume the role
of divisional Managing Director.
The division incurred capital expenditure of R142,1 million during the period
(H1 2008: R64,8 million).
PROSPECTS
The Company`s order book increased to R4,9 billion (H1 2008: R2,3 billion). This
increase was made possible not only through the acquisitions completed since
listing but also by the Group`s commitment to developing skills and capacity
internally.
With all the acquisitions successfully bedded down and performing in-line with
expectation, Raubex Group can continue to take advantage of the continuing
strong demand for its services.
With the Gauteng Freeway Improvement Project now underway, we expect SANRAL to
be announcing a number of reasonably sized contracts to be released for tender
in the coming months. It is worth noting that although SANRAL remains our
largest client, accounting for some 40% of our revenues, the group now has a
broad spread of private and other parastatal customers accounting for the
majority of its revenues.
Internationally, Raubex continues to maintain a cautious approach to growth in
Africa. In Zambia, the pipeline continues to grow across the country and the
division is actively exploring opportunities in Botswana and Namibia.
In the prevailing market conditions, the Group expects to deliver a strong
performance in the second half of the year.
DIVIDEND DECLARATION
The directors have declared an interim cash dividend of 30 cents per share on 10
November 2008. The salient dates for the payment of the dividend are as follows:
Last day to trade cum dividend Friday, 28 November 2008
Commence trading ex dividend Monday, 1 December 2008
Record date Friday, 5 December 2008
Payment date Monday, 8 December 2008
No share certificates may be dematerialised or rematerialised between Monday, 1
December and Friday, 5 December 2008, both dates inclusive.
CONSOLIDATED INCOME STATEMENT
Audited
Interim Interim Annual
31 August 31 August 29 February
2008 2007 2008
R R R
Revenue 2 232 675 952 963 498 214 2 135 778 031
Cost of sales (1 754 348 393) (728 590 078) (1 616 112 151)
Gross profit 478 327 559 234 908 136 519 665 880
- Other income 6 232 918 3 941 601 18 979 346
- Other 2 924 760 (2 567 864) 3 075 679
gains/(losses) -
net
- Administrative (89 517 218) (45 057 756) (110 438 956)
expenses
Operating profit 397 968 019 191 224 117 431 281 949
- Finance income 20 722 156 5 097 029 12 996 916
- Finance costs (33 807 510) (13 107 719) (27 986 271)
- Share of profit 50 021 386 180 478 480
of associate
Profit before tax 384 932 686 183 599 607 416 771 074
- Taxation (116 698 764) (53 305 184) (121 152 553)
expense
Profit for the 268 233 922 130 294 423 295 618 521
period
Attributable to:
Equity holders of 266 810 257 129 364 324 294 150 140
the Company
Minority interest 1 423 665 930 099 1 468 381
Weighted average 182 623 583 162 129 832 162 641 151
number of shares
Basic earnings 146,1 79,8 180,9
per share (cents)
CALCULATION OF DILUTED EARNINGS PER SHARE
Audited
Interim Interim Annual
2008 2007 2008
R R R
Weighted average 182 623 583 162 129 832 162 641 151
number of ordinary
shares in issue
Adjustments for:
- Share options 2 200 000 - 2 200 000
Weighted average 184 823 583 162 129 832 164 841 151
number of ordinary
shares for diluted
earnings per share
Earnings 266 810 257 129 364 324 294 150 140
attributable to
equity holders of
the Company
Diluted earnings per 144,4 79,8 178,4
share (cents)
CALCULATION OF HEADLINE EARNINGS PER SHARE
Audited
Interim Interim Annual
31 August 31 August 29 February
2008 2007 2008
R R R
Net profit after tax 266 810 257 129 364 324 294 150 140
attributable to
equity holders
Adjustments for:
- (Profit)/loss on (2 648 412) 528 601 (555 060)
sale of fixed assets
after tax
- Excess from fair - - (682 427)
value of assets
acquired over
purchase price
Basic headline 264 161 845 129 892 925 292 912 653
earnings
Weighted average 182 623 583 162 129 832 162 641 151
number of shares
Headline earnings 144,6 80,1 180,1
per share (cents)
Diluted headline 142,9 80,1 177,7
earnings per share
(cents)
CONSOLIDATED BALANCE SHEET
Audited
Interim Interim Annual
31 August 31 August 29 February
2008 2007 2008
R R R
ASSETS
Non-current
assets
- Property, 1 159 040 396 556 221 005 668 364 912
plant and
equipment
- Intangible 771 535 437 161 466 680 198 939 016
assets
- Investment in 8 120 780 635 924 2 670 759
associate
- Deferred 32 124 767 1 532 701 9 283 041
income tax
assets
- Trade and 348 102 - 401 787
other
receivables
Total non- 1 971 169 482 719 856 310 879 659 515
current assets
Current assets
- Inventories 120 596 302 37 373 450 50 439 686
- Construction 115 282 302 69 599 239 73 644 341
contracts in
progress
- Trade and 792 456 451 328 172 302 368 676 796
other
receivables
- Current 2 282 855 12 022 070 12 054 823
income tax
receivable
- Cash and cash 366 336 781 164 436 148 660 233 434
equivalents
Total current 1 396 954 691 611 603 209 1 165 049 080
assets
Non-current - - 2 472 076
assets held for
sale
Total assets 3 368 124 173 1 331 459 519 2 047 180 671
EQUITY AND
LIABILITIES
Equity
- Share capital 1 826 237 1 621 299 1 725 268
- Share premium 2 164 772 700 1 431 670 229 1 830 852 682
- Other (1 147 259 516) (1 174 048 277) (1 156 813 647)
reserves
- Retained 651 739 976 325 619 302 457 979 152
earnings
Equity 1 671 079 397 584 862 553 1 133 743 455
attributable to
equity holders
of the company
Minority 5 639 426 2 447 372 2 785 655
interest in
equity
Total equity 1 676 718 823 587 309 925 1 136 529 110
Liabilities
Non-current
liabilities
- Borrowings 414 998 388 215 664 250 249 069 699
- Provisions 12 532 488 3 636 150 7 954 770
for liabilities
and charges
- Deferred 195 311 808 78 993 358 113 897 357
income tax
liability
Total non- 622 842 684 298 293 758 370 921 826
current
liabilities
Current
liabilities
- Trade and 646 227 138 280 530 207 318 623 885
other payables
- Borrowings 248 688 779 105 890 936 143 856 259
- Current 165 863 000 53 237 627 77 229 574
income tax
liabilities
- Bank 7 783 749 6 197 066 20 017
overdrafts
Total current 1 068 562 666 445 855 836 539 729 735
liabilities
Total 1 691 405 350 744 149 594 910 651 561
liabilities
Total equity 3 368 124 173 1 331 459 519 2 047 180 671
and liabilities
CONSOLIDATED CASH FLOW STATEMENT
Audited
Interim Interim Annual
31 August 31 August 29 February
2008 2007 2008
R R R
Cash flows from
operating activities
Cash generated from 333 287 669 177 045 002 448 814 702
operations
Finance income 20 722 156 5 097 029 12 996 916
Finance costs (33 807 510) (13 107 719) (27 986 271)
Taxation paid (30 172 216) (10 474 666) (43 777 166)
Net cash from 290 030 099 158 559 646 390 048 181
operating activities
Cash flows from
investing activities
Additions of (231 990 454) (130 073 537) (244 584 549)
property, plant and
equipment
Proceeds from sale 13 672 129 16 662 757 22 758 994
of property, plant
and equipment
Acquisition of (384 056 666) 5 994 560 (57 143 171)
subsidiaries (net)
Associates` - - 24 000
dividends received
Loans associates (5 400 000) - 5 707 408
Net cash from (607 774 991) (107 416 220) (273 237 318)
investing activities
Cash flows from
financing activities
Proceeds from 90 240 447 49 522 758 119 169 200
borrowings (net)
Proceeds from shares (1 106 507) (19 755 679) 379 530 744
issued (net)
Dividends paid to (73 049 433) - (32 425 966)
company`s
shareholders
Dividends paid to - - (200 000)
minority interests
Net cash from 16 084 507 29 767 079 466 073 978
financing activities
Total cash movement (301 660 385) 80 910 505 582 884 841
for the period
Cash at the 660 213 417 77 328 576 77 328 576
beginning of the
period
Total cash at end of 358 553 032 158 239 081 660 213 417
the period
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Other
capital premium reserves
R R R
Balance at 1 March 1 432 782 1 282 167 325 (1 174 084 740)
2007
Issue of share capital 292 486 574 630 944 -
and share premium
Share issue expenses - (25 945 587) -
Currency translation - - 2 909 913
reserve
Share option reserve - - 14 361 180
Profit for the year - - -
Dividends paid - - -
Balance at 29 February 1 725 268 1 830 852 682 (1 156 813 647)
2008
Issue of share capital 100 969 335 026 525 -
and share premium
Share issue expenses - (1 106 507) -
Currency translation - - 1 815 743
reserve
Share option reserve - - 7 738 388
Minority interest in - - -
acquired company
Profit for the year - - -
Dividends paid - - -
Balance at 31 August 1 826 237 2 164 772 700 (1 147 259 516)
2008
Total attributable
to equity holders
Retained of the parent
earnings company
R R
Balance at 1 March 196 254 978 305 770 345
2007
Issue of share capital - 574 923 430
and share premium
Share issue expenses - (25 945 587)
Currency translation - 2 909 913
reserve
Share option reserve - 14 361 180
Profit for the year 294 150 140 294 150 140
Dividends paid (32 425 966) (32 425 966)
Balance at 29 February 457 979 152 1 133 743 455
2008
Issue of share capital - 335 127 494
and share premium
Share issue expenses - (1 106 507)
Currency translation - 1 815 743
reserve
Share option reserve - 7 738 388
Minority interest in - -
acquired company
Profit for the year 266 810 257 266 810 257
Dividends paid (73 049 433) (73 049 433)
Balance at 31 August 651 739 976 1 671 079 397
2008
Minority Total
interest equity
R R
Balance at 1 March 1 517 273 307 287 618
2007
Issue of share capital - 574 923 430
and share premium
Share issue expenses - (25 945 587)
Currency translation - 2 909 913
reserve
Share option reserve - 14 361 180
Profit for the year 1 468 382 295 618 522
Dividends paid (200 000) (32 625 966)
Balance at 29 February 2 785 655 1 136 529 110
2008
Issue of share capital - 335 127 494
and share premium
Share issue expenses - (1 106 507)
Currency translation - 1 815 743
reserve
Share option reserve - 7 738 388
Minority interest in 1 430 106 1 430 106
acquired company
Profit for the year 1 423 665 268 233 922
Dividends paid - (73 049 433)
Balance at 31 August 5 639 426 1 676 718 823
2008
SEGMENTAL ANALYSIS
Road
Aggregate surfacing
and and
crusher rehabilitation
Business segments R R
At 31 August 2008
Segment revenue 544 446 842 1 177 227 346
Segmental operating profit 115 469 355 219 854 748
At 31 August 2007
Segment revenue 174 038 319 566 097 763
Segmental operating profit 50 127 812 114 228 493
At 29 February 2008
Segment revenue 362 915 556 1 252 901 822
Segmental operating profit 102 240 357 233 921 754
Road
construction
and
earthworks Consolidated
Business segments R R
At 31 August 2008
Segment revenue 511 001 764 2 232 675 952
Segmental operating profit 62 643 916 397 968 019
At 31 August 2007
Segment revenue 223 362 132 963 498 214
Segmental operating profit 26 867 812 191 224 117
At 29 February 2008
Segment revenue 519 960 653 2 135 778 031
Segmental operating profit 95 119 838 431 281 949
Local International Consolidated
Geographical segments R R R
At 31 August 2008
Segment revenue 2 083 192 430 149 483 522 2 232 675 952
Segmental operating 374 664 357 23 303 662 397 968 019
profit
At 31 August 2007
Segment revenue 889 709 888 73 788 326 963 498 214
Segmental operating 180 113 136 11 110 981 191 224 117
profit
At 29 February 2008
Segment revenue 1 990 906 264 144 871 767 2 135 778 031
Segmental operating 407 733 525 23 548 424 431 281 949
profit
EMPLOYEE BENEFIT EXPENSE
Audited
Interim Interim Annual
31 August 31 August 29 February
2008 2007 2008
R R R
Employee benefit expense
in the income
statement consists of:
- Salaries, wages and 364 371 423 151 873 396 304 051 406
contributions
- Share options granted 7 738 388 - 14 361 180
to employees
Total employee benefit 372 109 811 151 873 396 318 412 586
expense
CAPITAL EXPENDITURE AND DEPRECIATION
Audited
Interim Interim Annual
31 August 31 August 29 February
2008 2007 2008
R R R
Capital expenditure 231 990 454 130 073 537 244 584 549
Depreciation 77 014 477 28 556 854 62 257 886
Amortisation of intangible 1 153 707 - 1 135 011
assets
NOTES
Accounting policies
The abridged consolidated financial information ("financial information") for
the six months ended 31 August 2008 has been prepared in accordance with
International Financial Reporting Standards ("IFRS"), International Accounting
Standard 34, the Listing Requirements of the JSE Limited and the South African
Companies Act 61 of 1973 as amended, on a consistent basis with that of the
prior period.
Acquisition of subsidiaries
The Group made the following acquisitions during the period.
B&E International Holdings (Pty) Limited
On 1 March 2008, the Group acquired 100% of the share capital of B&E
International Holdings (Pty) Limited, a group of companies specialising in
contract crushing and mineral processing operations at a cost of R513 million.
The purchase consideration was settled by the issuance of 9 029 677 ordinary
shares at a fair value of R295 million and cash of R218 million. The acquired
business contributed revenues of R291 million and net profit of R42,1 million to
the Group for the period 1 March 2008 to 31 August 2008.
Space Construction (Pty) Limited and Space Indlela Construction (Pty) Limited
On 1 March 2008, the Group acquired 100% of the share capital of Space
Construction (Pty) Limited and Space Indlela Construction (Pty) Limited, a group
of companies specialising in road construction at a cost of R50 million. The
purchase consideration was settled by the issuance of 277 771 ordinary shares at
a fair value of R10 million and cash of R40 million. The acquired businesses
contributed revenues of R72,6 million and net profit of R8 million to the Group
for the period 1 March 2008 to 31 August 2008.
Thaba Bosiu Construction (Pty) Limited and Zamori Construction (Pty) Limited
On 1 March 2008, the Group acquired 100% of the share capital of Thaba Bosiu
Construction (Pty) Limited and Zamori Construction (Pty) Limited, a group of
companies specialising in road construction at a cost of R100 million. The
purchase consideration was settled by the issuance of 789 474 ordinary shares at
a fair value of R30 million and cash of R70 million. The acquired businesses
contributed revenues of R88,3 million and net profit of R13,4 million to the
Group for the period 1 March 2008 to 31 August 2008.
Akasia Road Surfacing (Pty) Limited
On 1 June 2008, the Group acquired 100% of the share capital of Akasia Road
Surfacing (Pty) Limited for R117 million cash. The company specialises in
asphalt manufacturing and road surfacing. The acquired business contributed
revenues of R77 million and net profit of R9,5 million to the Group for the
period 1 June 2008 to 31 August 2008. If the acquisition had occurred on 1 March
2008, the contribution to Group revenue would have been R133,4 million and net
profit of R12,2 million.
On behalf of the Board:
M C Matjila J E Raubenheimer F Diedrechsen
Chairman Chief Executive Group Financial &
Officer Commercial Director
10 November 2008
Raubex Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 2006/023666/06
Share Code: RBX
ISIN Code: ZAE000093183
("Raubex" or the "Company")
Directors:
M C Matjila (Chairman)#, J E Raubenheimer, GM Raubenheimer, F Diedrechsen, F
Kenney#, M B Swana#, L Maxwell*
# Non-executive * Independent non-executive
Company Secretary:
Mrs H E Ernst
Registered office:
1st Floor Leopard Creek BuildingThe Greens Office ParkCenturion
Postal address:
PO Box 66192
Highveld
0169
Transfer secretaries:
Computershare Investor Services (Pty) Ltd
70 Marshall Street
Johannesburg
2001
PO Box 61051
Marshalltown
2107
Auditors:
PricewaterhouseCoopers Inc.
Sponsor:
Investec Bank Limited
www.raubex.co.za
Date: 10/11/2008 07:30:01 Produced by the JSE SENS Department.
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