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EXL
EXL
EXL - Excellerate - Change Statement, Abridged Group Results For The Year Ended
30 June 2008 And Notice Of Annual General Meeting
EXCELLERATE HOLDINGS LIMITED
("Excellerate" or "the group")
Registration number 1997/009884/06
JSE code: EXL
ISIN: ZAE000026092
(Incorporated in the Republic of South Africa)
CHANGE STATEMENT, ABRIDGED GROUP RESULTS FOR THE YEAR ENDED 30 JUNE 2008 AND
NOTICE OF ANNUAL GENERAL MEETING
CHANGE STATEMENT
Shareholders are hereby advised that the Annual Report was posted to
shareholders on 26 November 2008. This report contains the abridged annual
financial statements for the year ended 30 June 2008 and contains certain
modification, as indicated in the notes, to the provisional results which were
released on SENS on 29 September 2008.
Abridged Group Results for the year ended 30 June 2008
EXCELLENT YEAR FOR EXCELLERATE
Strong operating and financial performances, underpinned by good cash
generation
Diluted earnings and headline earnings per share up 79%
Cash generated by operations of R56 million
Substantial organic and acquisitive growth, with four significant acquisitions
announced during the year
Continued development of entrepreneurial culture and partnership approach
Maiden dividend declared
CONSOLIDATED INCOME STATEMENT
for the year ended 30 June
Audited
Audited (restated)
2008 2007
R`000 R`000
Revenue 587 406 515 400
Cost of sales (385 714) (336 581)
Gross profit 201 692 178 819
Operating expenditure (157 610) (144 947)
Selling and distribution costs (30 745) (39 496)
Administrative expenses (81 454) (85 716)
Other expenses (45 411) (19 735)
Operating profit 44 082 33 872
Gain on disposal of 62 205
business/subsidiary
Amortisation of trademarks (127) -
Profit before net finance costs and 44 017 34 077
taxation
Finance income 6 149 5 051
Finance costs (7 803) (7 444)
Profit before taxation 42 363 31 684
Taxation - current (8 330) (17 259)
Taxation - deferred (4 623) 1 996
Tax on dividends paid - STC (50) -
Profit for the year 29 360 16 421
Attributable to:
Equity holders of the parent 28 925 16 343
Minority interest 435 78
29 360 16 421
Earnings per share (cents) 13,2 8,5
Diluted basic earnings per share 12,9 7,2
(cents)
CONSOLIDATED BALANCE SHEET
at 30 June
Audited
Audited (restated)
2008 2007
R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 35 981 28 186
Intangible assets 74 017 52 550
Long-term receivable 307 799
Finance lease receivable 880 991
Amount owing to joint venture
partner 5 169 -
Deferred taxation 12 307 16 477
128 661 99 003
Current assets
Inventories 103 354 89 426
Trade and other receivables 118 097 106 365
Current portion of finance lease 584 794
receivable
Amounts owing by joint venture 2 423 1 514
partners
Taxation receivable 4 583 5 664
Other financial assets 51 -
Cash and cash equivalents 49 989 23 489
279 081 227 252
Total assets 407 742 326 255
EQUITY AND LIABILITIES
Issued capital 2 190 2 189
Share premium 66 078 65 889
Non-distributable reserves - 18 612
Share-based payment reserve 1 830 -
Retained earnings 112 022 66 220
Equity attributable to equity holders 182 120 152 910
of the parent
Minority interests 783 846
Total equity 182 903 153 756
Non-current liabilities
Deferred taxation 1 747 835
Interest-bearing debt 20 039 10 575
21 786 11 410
Current liabilities
Trade and other payables 172 057 137 446
Amounts owing to joint venture 9 494 5 317
partners
Vendors for acquisitions 6 754 -
Taxation payable 9 790 14 128
Current portion of interest-bearing 4 873 3 998
debt
Other financial liabilities 85 200
203 053 161 089
Total equity and liabilities 407 742 326 255
Net asset value per share (cents) 83,1 69,9
Net tangible asset value per share 49,4 45,8
(cents)
Calculation of earnings per share
Number of shares in issue (`000) 219 045 218 895
Weighted average shares in issue for 219 004 192 598
the year (`000)
Diluted weighted average shares in 224 174 226 054
issue (`000)
Earnings per share (cents) 13,2 8,5
Diluted basic earnings per share 12,9 7,2
(cents)
Headline earnings per share (cents) 13,2 8,5
Diluted headline earnings per share 12,9 7,2
(cents)
The following adjustments to income
attributable to equity holders of the
parent were taken into account in the
calculation of headline earnings:
Attributable to equity holders of the 28 925 16 343
parent
- impairment of assets 5 -
- gain on disposal of business (62) (205)
- net (gain)/loss on sale of (38) 129
property, plant and equipment
- taxation effects of adjustments 27 22
Headline earnings 28 857 16 289
RESTATEMENT OF PRIOR YEAR RESULTS
Year ended
30 June
2007
R`000
Reconciliation of net profit for the year
As previously reported 16 660*
Attributable to minority shareholders 78
Attributable to equity holders of the parent 16 582
Adjusted for:
Proportionately consolidating joint ventures, 200
previously equity accounted as associates
Prior year errors (439)
16 421
Reconciliation of total equity
As previously reported 155 617*
Attributable to minority shareholders 846
Attributable to equity holders of the parent 154 771
Adjusted for:
Proportionately consolidating joint ventures, 166
previously equity accounted as associates
Prior year errors (2 027)
Amortisation of the trademark (1 707)1
Other prior year errors (320)
* As published in the 2007 annual report
1. Trademark erroneously assessed as having an indefinite useful life,
reassessed as having a finite life
CASH FLOW STATEMENT
for the year ended 30 June
Audited
Audited (restated)
2008 2007
R`000 R`000
Cash flows from operating activities 39 296 34 106
Cash generated by operations 56 200 47 500
Finance income 2 606 4 803
Finance costs (7 181) (7 285)
Dividends paid (498) -
Taxation paid (11 831) (10 912)
Cash flow from investing activities (13 957) (8 655)
Additions to property, plant and
equipment
- to expand (5 576) (1 412)
- to maintain (8 122) (8 960)
Additions to intangible assets (820) (300)
Proceeds on disposal of property, 1 114 487
plant and equipment
Acquisition of businesses (3 426) -
Proceeds on disposal of business 2 873 1 530
Cash flow from financing activities 1 161 1 946
Increase in interest-bearing debt 2 059 6 162
Decrease in compulsory convertible - (2 621)
liability
Receipt/(advance) of long-term 492 (118)
receivable
(Increase)/decrease in amounts owing (6 078) 640
by joint venture partners
Increase in amounts owing to joint 4 177 774
venture partners
Shares repurchased - (3 781)
Net increase/(decrease) in finance 321 (363)
lease receivables
Employee share options exercised 190 1 253
Net increase in cash and cash 26 500 27 397
equivalents
Cash and cash equivalents at beginning 23 489 (3 908)
of year
Cash and cash equivalents at end of 49 989 23 489
year
GROUP SEGMENTAL REPORT
for the year ended 30 June
Trading and
Services distribution Corporate
R`000 R`000 R`000
2008
Revenue (external) 196 488 390 918 -
Revenue (internal) 477 8 681 7 999
196 965 399 599 7 999
Depreciation expense (5 539) (3 820) (266)
Amortisation expense (127) - -
Finance income 4 052 6 170 2 015
Finance costs (1 530) (5 244) (7 117)
2 522 926 (5 102)
Profit before tax 28 619 24 666 (10 922)
Taxation (8 064) (6 906) 1 967
Additions to non-current 9 842 3 794 62
assets
Segment assets 187 764 224 285 (3 985)
Segment liabilities (118 501) (99 034) (7 626)
Segment equity (69 263) (125 251) 11 611
Cash flow from operating 25 540 22 890 (9 136)
activities
Cash flow from investing (13 334) (583) (40)
activities
Cash flow from financing (8 943) 10 543 (437)
activities
2007
Revenue (external) 152 822 362 578 -
Revenue (internal) 1 939 6 414 7 413
154 761 368 992 7 413
Depreciation expense (3 779) (3 017) (248)
Finance income 1 327 1 985 6 296
Finance costs (231) (1 465) (10 305)
1 096 520 (4 009)
Profit before tax 24 003 20 671 (12 990)
Taxation (6 961) (5 995) (2 307)
Additions to non-current 6 080 3 999 293
assets
Segment assets 113 805 205 365 7 085
Segment liabilities (84 933) (96 897) 9 331
Segment equity (28 872) (108 468) (16 416)
Cash flow from operating 26 238 14 927 (7 059)
activities
Cash flow from investing (5 994) (2 369) (292)
activities
Cash flow from financing 1 495 (9 700) 10 151
activities
Total
R`000 Notes
2008
Revenue (external) 587 406 (1)
Revenue (internal) 17 157
604 563
Depreciation expense (9 625)
Amortisation expense (127)
Finance income 12 237 (2)
Finance costs (13 891) (3)
(1 654)
Profit before tax 42 363
Taxation (13 003)
Additions to non-current 13 698
assets
Segment assets 408 064
Segment liabilities (225 161)
Segment equity (182 903) (4)
Cash flow from operating 39 294
activities
Cash flow from investing (13 957)
activities
Cash flow from financing 1 163
activities
2007
Revenue (external) 515 400 (1)
Revenue (internal) 15 766
531 166
Depreciation expense (7 044)
Finance income 9 608 (2)
Finance costs (12 001) (3)
(2 393)
Profit before tax 31 684
Taxation (15 263)
Additions to non-current 10 372
assets
Segment assets 326 255
Segment liabilities (172 499)
Segment equity (153 756) (4)
Cash flow from operating 34 106
activities
Cash flow from investing (8 655)
activities
Cash flow from financing 1 946
activities
Reconciliations of reportable segment revenues, profit or loss, assets and
liabilities and other material items
2008 2007
R`000 R`000
1 Revenues
Total revenue for reportable segments 604 563 531 166
Elimination of inter-segment revenue (17 157) (15 766)
Consolidated revenue 587 406 515 400
2 Finance income
Total finance income for reportable 12 237 9 608
segments
Elimination of inter-segment finance income (6 088) (4 557)
Consolidated finance income 6 149 5 051
3 Finance costs
Total finance costs for reportable segments (13 891) (12 001)
Elimination of inter-segment finance costs 6 088 4 557
Consolidated finance costs (7 803) (7 444)
4 For the purpose of internal performance management, certain inter-company
loans and cash have been treated as segment equity.
STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June
Compulsory
Issued Share convertible
capital premium debentures
R`000 R`000 R`000
Balance at 30 June 2006 as 1 741 50 224 18 641
restated
Balance at 30 June 2006 as 1 741 50 224 18 641
previously reported
Prior year adjustments
Profit for the year as
restated
Profit for the year as
previously stated
Prior year adjustments
Share-based payment
transactions
Sale of treasury shares 26 1 227
Repurchase of shares (51) (3 730)
Conversion of compulsory 473 18 168 (18 641)
convertible debentures into
ordinary shares
Balance at 30 June 2007 as 2 189 65 889 -
restated
Balance at 30 June 2007 as 2 189 65 889 -
previously reported
Prior year adjustments
Profit for the year
Transfer to share-based
payment reserve
Transfer to retained income
Dividend to minority
shareholders of
subsidiaries
Share-based payment
transactions
Sale of treasury shares 1 189
Balance at 30 June 2008 2 190 66 078 -
Share-
Non- based
distributable payment Retained
reserves reserve earnings
R`000 R`000 R`000
Balance at 30 June 2006 as 18 952 49 877
restated
Balance at 30 June 2006 as 18 952 51 499
previously reported
Prior year adjustments (1 622)
Profit for the year as 16 343
restated
Profit for the year as 16 582
previously stated
Prior year adjustments (239)
Share-based payment (340)
transactions
Sale of treasury shares
Repurchase of shares
Conversion of compulsory
convertible debentures into
ordinary shares
Balance at 30 June 2007 as 18 612 66 220
restated
Balance at 30 June 2007 as 18 612 68 081
previously reported
Prior year adjustments (1 861)
Profit for the year 28 925
Transfer to share-based (1 735) 1 735
payment reserve
Transfer to retained income (16 877) 16 877
Dividend to minority
shareholders of
subsidiaries
Share-based payment 95
transactions
Sale of treasury shares
Balance at 30 June 2008 - 1 830 112 022
Attributable
to equity
holders Minority
of parent interest Total
R`000 R`000 R`000
Balance at 30 June 2006 as 139 435 768 140 203
restated
Balance at 30 June 2006 as 141 057 768 141 825
previously reported
Prior year adjustments (1 622) (1 622)
Profit for the year as 16 343 78 16 421
restated
Profit for the year as 16 582 78 16 660
previously stated
Prior year adjustments (239) (239)
Share-based payment (340) (340)
transactions
Sale of treasury shares 1 253 1 253
Repurchase of shares (3 781) (3 781)
Conversion of compulsory - -
convertible debentures into
ordinary shares
Balance at 30 June 2007 as 152 910 846 153 756
restated
Balance at 30 June 2007 as 154 771 846 155 617
previously reported
Prior year adjustments (1 861) (1 861)
Profit for the year 28 925 435 29 360
Transfer to share-based - -
payment reserve
Transfer to retained income - -
Dividend to minority - (498) (498)
shareholders of
subsidiaries
Share-based payment 95 95
transactions
Sale of treasury shares 190 190
Balance at 30 June 2008 182 120 783 182 903
Notes to modification
The changes relate to the re-classification of certain items on the balance
sheet, cash flow statement and the group segmental report. The changes can best
be illustrated as follows:
Line item Reviewed Final Variance
Provisional Audited
R`000 R`000 R`000
Balance sheet
Non current assets - 2008
123,492 128,661 5,169
Amount owing by joint venture
partner - 2008 - 5,169 5,169
Current assets - 2008
284,572 279,081 (5,491)
Amounts owing by joint venture
partners - 2008 7,592 2,423 (5,169)
Trade and other receivables - 2008
118,419 118,097 (322)
Total assets - 2008
408,064 407,742 (322)
Current liabilities - 2008
203,375 203,053 (322)
Trade and other payables - 2008
172,379 172,057 (322)
Total equity and liabilities - 2008
408,064 407,742 (322)
Cash flow statement
Cash flows from operating
activities - 2008 39,294 39,296 2
Cash generated by operations - 2008
56,199 56,200 1
Finance income - 2008
6,149 2,606 (3,543)
Finance costs - 2008
(10,725) (7,181) 3,544
Cash flows from operating
activities - 2007 31,485 34,106 2,621
Cash generated by operations - 2007
47,659 47,500 (159)
Finance income - 2007
5,051 4,803 (248)
Finance costs - 2007
(10,313) (7,285) 3,028
Cash flows from financing
avtivities - 2008 1,163 1,161 (2)
(Increase)/decrease in amounts
owing by joint venture partners - (6,077) (6,078) (1)
2008
Increase in amounts owing by joint
venture partners - 2008 4,178 4,177 (1)
Cash flows from financing
avtivities - 2007 4,567 1,946 (2,621)
Decrease in compulsory convertible
debenture liability - 2007 - (2,621) (2,621)
Group segmental report
Cash flow from operating activities
- Corporate - 2007 (9,680) (7,059) 2,621
Cash flow from operating activities
- Total - 2007 31,485 34,106 2,621
Cash flow from financing activities
- Corporate - 2007 12,772 10,151 (2,621)
Cash flow from financing activities
- Total - 2007 4,567 1,946 (2,621)
The differences were due to reclassifications
between accounts.
REVIEW OF THE YEAR
For a review of operations, shareholders are
referred to the provisional results released on
SENS on 29 September 2008 and to the Annual
Report for the year ended 30 June 2008, which
report will be posted to shareholders today and
will be available on the Company`s website -
www.excellerate.co.za.
FINANCIAL OVERVIEW
Results for the year ended 30 June 2008 were once
again much improved on the previous 12 months,
reflecting the strong underlying performance of
the business. Importantly, the cash generation
and earnings flow from acquisitions during the
year have only been included in these results
from the respective effective dates of
acquisition.
Group revenue for the year increased by 14,0% to
R587 million. Profit after tax for the year
showed an improvement to R29,4 million for the 12
months, an increase of 78,8% over the comparative
period.
Diluted earnings per share and diluted headline
earnings per share both increased by 79,2% to
12,9 cents per share.
Once again, a highlight of the group`s results
has been strong cash generation - cash generated
by operations within the business units amounted
to R56,2 million (2007: R47,5 million).
Cash flows from operating activities after net
finance costs, dividends and taxation paid rose
to R39,3 million (2007: R34,1 million).
After cash flows from investing and financing
activities, cash and cash equivalents increased
to R50,0 million from R23,5 million at the prior
year end.
Excellerate`s balance sheet remains strong, with
minimal gearing. Total assets have increased by
25,1% to R408.0 million, whilst interest-bearing
debt rose by R10,3 million to R24,9 million.
Consequently the group is well-placed to access
any funding required to fulfil further growth
ambitions.
As indicated in the annual report for the period
ended 30 June 2007, Excellerate had made a
proposal to SARS for a financial settlement in
respect of disallowed claims of certain trademark
allowances. During the year under review, a
settlement was reached, and the group has settled
all the amounts due.
BASIS OF PREPARATION OF RESULTS
The group`s annual financial statements are
prepared in accordance with International
Financial Reporting Standards ("IFRS"), the
Listing Requirements of the JSE Limited and the
Companies Act of South Africa. These abridged
group annual financial statements are prepared in
accordance with the recognition and measurement
requirements of IFRS and the presentation and
disclosure requirements of IAS 34: Interim
Financial Reporting. These results supercede the
provisional results released on SENS on 29
September 2008.
The abridged group annual financial statements
for the year ended 30 June 2008 have been
extracted from the annual financial statements
for the year ended 30 June 2008. For a better
understanding of the Group`s financial position
and results of operations, these abridged
financial statements must be read in conjunction
with the group`s audited annual financial
statements for the year ended 30 June 2008.
The accounting policies applied in the
presentation of the annual financial statements
are consistent with those applied for the year
ended 30 June 2007, except as follows:
- Excellerate Holdings Limited has early
adopted IFRS 8 - Operating segments. The
segmental report was prepared using the
measurement and recognition criteria of
IFRS. The classification of the business
units into the segments have remained the
same as the previous year.
- After the acquisition of Chattels, the group
adopted the policy to proportionately
consolidate joint ventures. This policy was
also applied to those joint ventures,
classified erroneously in the past as
associates. Refer to the section on the
restatement of prior year results.
RELATED PARTY TRANSACTIONS
The group, in the ordinary course of business,
entered into various sale and purchase
transactions on an arm`s length basis at market
rates with related parties.
INDEPENDENT AUDIT OPINION
The results for the year ended 30 June 2008 have
been audited by KPMG Inc. Their unmodified audit
report is available for inspection at the
registered office of the company.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General
Meeting of the members of the Company will be
held at 1st Floor, Atholl Square, Corner
Katherine and Wierda Road East, Sandown, 2196 on
19 December 2008 at 14h00, to transact the
business as stated in the Notice of the Annual
General Meeting which is included as part of the
Annual Report which was posted to shareholders on
26 November 2008.
Registered office
1st Floor, Atholl Square, Corner Katherine Street
and Wierda Road East, Sandown 2196.
PO Box 785448, Sandton 2146
Tel: (+27 11) 523 2980
Fax: (+27 11) 523 2990
E-mail: info@excellerate.co.za
Company secretary
ER Goodman Secretarial Services CC
(represented by E Goodman).
2nd Floor, Palm Grove, Grove City,
196 Louis Botha Avenue, Houghton.
Tel: (+27 11) 728 0742
Fax: (+27 11) 728 4226
email: ergoodmn@netactive.co.za
Auditors
KPMG Inc.
Corporate advisors and sponsor
Barnard Jacobs Mellet Corporate Finance (Pty)
Limited
Bankers
FirstRand Bank Limited
Nedbank Limited
The Standard Bank of South Africa Limited
Share transfer secretary
Computershare Investor Services (Pty) Ltd
70 Marshall Street, Johannesburg 2001
PO Box 61051, Marshalltown 2107
Tel: (+27 11) 370 5000
Fax: (+27 11) 688 7721
Company registration number
Registration number 1997/009884/06
JSE code: EXL
ISIN: ZAE000026092
Sector
Cyclical Services Sector
Under sub-sector: Business Support Services
Website
www.excellerate.co.za
Date: 28/11/2008 13:23:01 Produced by the JSE SENS Department.
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