| Tue 18 Nov 2008, 17:42 | | ABK - African Brick Centre Limited - Abridged interim results for the 6 months |
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ABK
ABK
ABK - African Brick Centre Limited - Abridged interim results for the 6 months
ended 31 August 2008
AFRICAN BRICK CENTRE LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 1999/006214/06)
Share Code: ABK & ISIN: ZAE000105169
("African Brick Centre" or "The Company")
SUMMARY
- Revenue up by 99%
- Acquisition of 51% shareholding in Dash Brick and Building Supplies
- Closure of Lenasia plant
- Opening of Pentz Bricks plant in Port Elizabeth
ABRIDGED INTERIM RESULTS FOR THE 6 MONTHS ENDED 31 AUGUST 2008
INTRODUCTION
The Directors of African Brick Centre hereby announce the consolidated interim
results of African Brick Centre and its subsidiaries ("the Group") for the 6
months ended 31 August 2008.
ABRIDGED CONSOLIDATED INCOME STATEMENT
6 Months 6 Months
ended ended
31 August 31 August
2008 2007
Notes (R`000) (R`000)
Revenue 113 423 57 062
Earnings before interest, 2 086 20 498
taxation, depreciation and
amortisation ("EBITDA")
Investment revenue 851 251
Finance costs (814) (169)
Depreciation and amortization (6 475) (928)
Profit before taxation (4 352) 19 652
Taxation (196) (5 721)
Profit/Loss after taxation (4 548) 13 931
Attributable to minority (985) -
shareholders
Profit attributable to ordinary (5 533) 13 931
shareholders
Earnings per share (cents) 3 (1.8) 4.4
("EPS")
Headline earnings per share 3 (0.15) 4.4
(cents) ("HEPS")
Shares in issue (`000) 3 312 238 320 000
Shares in issue - weighted 3 312 238 320 000
average (`000)
ABRIDGED CONSOLIDATED BALANCE SHEET
31 August 31 August
2008 2007
Notes (R`000) (R`000)
ASSETS 2
Non-current assets 103 697 55 144
Investment property 625 625
Property, plant and equipment 64 367 54 168
Goodwill 36 997 -
Other non-current assets 1 708 351
Current assets 91 326 41 573
Cash resources 10 215 4 563
Inventories 47 512 20 977
Other current assets 33 599 16 033
TOTAL ASSETS 195 023 96 717
EQUITY AND LIABILITIES
Equity 142 349 65 187
Share capital and premium 113 315 -
Revaluation reserves 3 452 4 242
Retained income 23 266 60 945
Minority interest 2 316 -
Non-current liabilities 17 787 12 820
Borrowings 5 263 1 408
Deferred taxation 11 184 11 412
Other financial liabilities 1 340 -
Current liabilities 34 887 18 710
Taxation payable 6 160 9 711
Provisions 910 960
Other current liabilities 27 817 8 039
TOTAL EQUITY AND LIABILITIES 195 023 96 717
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Group
6 months 6 months
ended ended
31 August 31 August
2008 2007
(R`000) (R`000)
Cash generated from/(utilised in) (9 209) 1 118
operations
Net interest received 37 82
Income tax paid (5 894) (3 728)
Net cash flow from operating (15 066) (2 528)
activities
Net cash flow from investing (12 847) (1 508)
activities
Net cash flow from financing 1535 (193)
activities
Net movement in cash balance (26 378) (4 229)
Cash balances at beginning of 36 593 8 792
period
Cash balances at end of period 10 215 4 563
ABRIDGED STATEMENT OF CHANGES IN SHAREHOLDERS` EQUITY
Share Share Reval Retained Minority
Capital Premium Reserve Income Interest Total
(R`000) (R`000) (R`000) (R`000) (R`000) (R`000)
Balance at 1 March 313 113 029 3 452 28 799 - 145 593
08
Minority interest 1 331 1 331
on acquisition of
subsidiary
Prelim expenses (27) (27)
incurred
Profit after ( 5 533) 985 (4 548)
taxation
Balance at 29 313 113 002 3 452 23 266 2 316 142 349
February 2008
NOTES TO THE ABRIDGED INTERIM FINANCIAL STATEMENTS
1. Basis of preparation
The interim results have been prepared in accordance with IAS 34 (Interim
Financial Reporting). The accounting policies used to prepare these interim
financial statements are consistent with those applied in the prior interim
period, and are in accordance with International Financial Reporting
Standards ("IFRS").
These results have not been reviewed or audited by the Company`s auditors.
These pro-forma interim statements incorporate the financial statements of
the Company and its subsidiaries. All inter-company transactions were
eliminated on consolidation.
2. The historical pro-forma interim financial information for 31 August 2007
represents aggregated financial information before the Company`s
restructuring. African Brick Centre was restructured with effect from 1
September 2007. In terms of the restructuring, African Brick Centre
acquired 100% of the issued shares of African Brick (Pty) Ltd, African
Brick Lenasia (Pty) Ltd and Landton Properties (Pty) Ltd. The Company also
acquired a 51% shareholding in Dash Brick and Building Supplies -
Strubensvalley (Pty) Ltd with effect from 1 April 2008. A meaningful
comparison to the consolidated financial information as at 31 August 2008
is therefore not possible.
3. Earnings per share
Earnings per share is calculated on the consolidated profit after tax,
divided by the weighted average number of shares in issue during the
interim period.
6 months 6 months
ended ended
31 August 31 August
2008 2007
Earnings attributable to ordinary ( 5 533) 13 931
shareholders (R`000)
Weighted average number of shares in 312 238 320 000
issue (`000)
Basic Earnings per share ("EPS") ( 1.8) 4.4
(cents)
Reconciliation of Headline Earnings
Earnings attributable to ordinary ( 5 13 931
shareholders (R`000) 533)
Adjusted for
(Profit)/Loss on disposal of non- 14 13
current assets (net after tax)
(R`000)
Impairment losses (R`000) 5 053 -
Headline earnings attributable to ( 466) 13 944
ordinary shareholders (R`000)
Headline earnings per share ("HEPS") (0.15) 4.4
(cents)
4. Weighted average number of shares in issue
The weighted average number of shares in issue for the Group is calculated
in accordance with the guidelines of IAS 33 (Earnings per Share) and is
appropriately weighted from the date of the share issue.
FINANCIAL REVIEW
Revenue for the interim period under review increased by 99% compared with the
pro-forma aggregated revenue for the corresponding interim period ended 31
August 2007 ("the corresponding interim period"). This is mainly attributable to
the acquisition of a majority shareholding in Dash Brick & Building Supplies
with effect from 1 April 2008.
EBITDA amounted to R2.1 Million, a decrease of R18.4 Million (90%) compared to
the pro-forma aggregated results for the corresponding interim period. This
decrease can be attributed mainly to adverse trading conditions ruling, as a
result of high interest rates and an oversupply of bricks in the market. Rising
overhead and manufacturing costs have also contributed to the decrease in the
profitability of the Group.
Cash of R15 Million was invested in operations, mainly to finance the investment
in working capital. Cash of R12.8 Million was also invested in investment
activities, of which R9.4 Million represented the investment in subsidiaries and
R3.4 Million represented capital expenditure.
OPERATIONAL REVIEW
The expiry of the lease on the Lenasia plant in August 2008, presented the Group
with the opportunity to review its manufacturing and production requirements in
light of rapidly declining demand and the general overstocked position in the
market. A decision was taken to close the Lenasia plant and to consolidate
production for the Gauteng area at the Krugersdorp plant, so as to take
advantage of economies of scale and production efficiencies. As a result of the
Lenasia closure, the Company has decided to write off the goodwill pertaining to
that asset in the amount of R5 Million.
The plant at Lenasia has been redeployed at the new Pentz Bricks operation in
Port Elizabeth, thereby allowing for substantial savings in capital expenditure
and other costs. Pentz Bricks is currently ramping up production and is expected
to become a significant producer and supplier in the Eastern Cape. The PE
factory produces plaster bricks of a high quality at a competitive price. The
group now supplies its own plaster and facing products (transported from its
Krugersdorp factory) to the Eastern Cape market.
OUTLOOK
The impact of current market turmoil has been sudden and dramatic. High interest
rates, lack of credit and economic uncertainty have caused a severe drop in
building activity as is evidenced by the slow down of building plans passed by
authorities. As a result, demand for bricks has declined significantly over the
past year and stocks in the industry have built up to unprecedented levels. Some
manufacturers are willing to liquidate stocks at below cost to raise cash flow,
which puts further pressure on margins, already suffering from increased input
costs such as fuel and electricity.
Against this background, the Group is focusing on right sizing the businesses
for the current climate, including production volumes and operational cost
structures as is evidenced by the Lenasia closure.
The Company announced on 10 November 2008 that Black owned investment group
Yakani Group, has indicated its firm intention to make an offer for 51% of
African Brick. The Board is excited about this transaction and the potential
opening up of markets that have hitherto been inaccessible to the Group.
Despite current market conditions the Yakani Group has confirmed it has
confidence in the future of the Company. The Board expects to post a circular
to shareholders setting out the details of the offer during the first week in
December 2008.
BY ORDER OF THE BOARD
B VAN GRAAN TC MEYER
CHIEF EXECUTIVE OFFICER FINANCIAL DIRECTOR
CORPORATE INFORMATION
Designated and Corporate Advisor: PSG Capital (Proprietary) Limited
Registration Number: 1999/006214/06
Registered Address: 31 Biccard Street Krugersdorp 1739
Postal Address: P O Box 315 Krugersdorp 1740
Company Secretary: D Arvanitis & Company Tel: (011)953-1305 Fax: (011)660-
7322
Transfer Secretaries: Link Market Services South Africa (Pty) Ltd
Date: 18/11/2008 17:42:01 Produced by the JSE SENS Department.
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