| Wed 4 Feb 2009, 15:00 | | ARH - ARB Holdings Limited - Unaudited Interim Results For The Six Months Ended |
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ARH
ARH
ARH - ARB Holdings Limited - Unaudited Interim Results For The Six Months Ended
31 December 2008
ARB HOLDINGS LIMITED
("ARB" or "the group")
(Registration number: 1986/002975/06)
Share code: ARH ISIN: ZAE00109435
UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2008
HIGHLIGHTS
- Revenue increased by 8,5%
- Cash on hand of R95.6 million
- NAV increased to 180,81 cents
ABRIDGED GROUP INCOME STATEMENT
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 Dec `08 31 Dec `07 30 June `08
R000`s R000`s R000`s
Revenue 647 212 596 388 1 343 909
Profit before interest
and taxation 77 843 90 301 195 115
Interest received 5 351 2 572 7 492
Interest paid (716) (5 329) (6 541)
Profit before taxation 82 478 87 544 196 066
Taxation 27 110 28 668 60 992
Profit for the period 55 368 58 876 135 074
Minority interest 10 183 13 757 30 930
Earnings attributable to
ARB equity holders 45 185 45 119 104 144
Headline earnings adjustment (6) - (6)
Taxation on adjustments 2 - 2
Headline earnings 45 181 45 119 104 140
Number of ordinary shares
in issue (000`s) 235 000 235 000 235 000
Weighted average number
of shares (000`s) 235 000 207 989 221 325
Diluted number of
shares (000`s) 235 000 207 989 221 325
Earnings per share (cents) 19,23 21,69 47,05
Diluted earnings per
share (cents) 19,23 21,69 47,05
Headline earnings per
share (cents) 19,23 21,69 47,05
Diluted headline earnings
per share (cents) 19,23 21,69 47,05
The headline earnings adjustment relates to the surplus on disposal of property,
plant and equipment.
No segmental report has been prepared as the group does not have material
separately identifiable reporting segments.
ABRIDGED GROUP BALANCE SHEET
Unaudited Unaudited Audited
31 Dec `08 31 Dec `07 30 June `08
R000`s R000`s R000`s
ASSETS
Non-current assets
Property, plant and equipment 98 327 82 518 94 168
Deferred taxation 1 593 1 659 2 113
Current assets
Inventory 250 685 220 962 307 966
Trade and other receivables 133 399 155 465 234 975
Deferred lease payments 29 - 58
Taxation overpaid 3 765 - 122
Cash resources 95 664 54 552 112 589
TOTAL ASSETS 583 462 515 156 751 991
EQUITY AND LIABILITIES
Equity and reserves
Share capital 24 24 24
Share premium 171 375 171 440 171 375
Non-distributable reserve - 9 374 -
Revaluation reserve 29 897 23 893 29 897
Accumulated profits 223 613 140 579 208 978
Attributable to
ARB equity holders 424 909 345 310 410 274
Minority interest 64 300 46 304 63 477
Total shareholders` funds 489 209 391 614 473 751
Non-current liabilities
Interest-bearing borrowings 5 835 6 492 4 212
Deferred lease payments 68 - 68
Deferred taxation 14 224 8 941 14 033
Current liabilities
Trade and other payables 68 986 103 553 248 687
Provisions 926 742 2 390
Interest-bearing borrowings 2 080 1 897 3 716
Deferred lease payments - 12 -
Taxation payable 2 064 1 905 5 051
Bank overdraft 70 - 83
TOTAL EQUITY AND LIABILITIES 583 462 515 156 751 991
Number of ordinary shares
in issue (000`s) 235 000 235 000 235 000
Net asset value per share (cents) 180,81 146,94 174,58
ABRIDGED GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months to 6 months to Year to
31 Dec `08 31 Dec `07 30 June `08
R000`s R000`s R000`s
Cash generated by operating
activities 57 434 96 158 183 689
Interest received 5 351 2 572 7 492
Interest paid (716) (5 329) (6 541)
Dividends paid (39 910) (57 700) (57 700)
Taxation paid (29 037) (41 663) (68 660)
Secondary tax on companies paid (3 991) (3 275) (3 275)
Cash flows from operating activities (10 869) (9 237) 55 005
Cash flows from investing activities (3 827) (6 879) (10 418)
Cash flows from financing activities
Issue of shares - 171 444 171 379
Loans repaid (2 216) (78 776) (81 460)
Net decrease in cash resources (16 912) 76 552 134 506
Cash resources at beginning of
period 112 506 (22 000) (22 000)
Cash resources at end of period 95 594 54 552 112 506
ABRIDGED STATEMENT OF CHANGES IN EQUITY
Share Share Non-distributable Revaluation
capital premium reserve reserve
R000`s R000`s R000`s R000`s
Balance at 30 June
2007 (unaudited) 20 - 9 374 23 893
Issue of shares 4 171 440 - -
Profit for the period - - - -
Dividends paid - - - -
Balance at 31 December
2007 (unaudited) 24 171 440 9 374 23 893
Transfer of reserves - - (9 374) -
Recovery of listing costs - (65) - -
Profit for the period - - - -
Revaluation of property,
plant and equipment net
of taxation - - - 6 004
Balance at 30 June
2008 (audited) 24 171 375 - 29 897
Profit for the period - - - -
Dividends paid - - - -
Balance at 31 December
2008 (unaudited) 24 171 375 - 29 897
Accumulated Minority
profits interest Total
R000`s R000`s R000`s
Balance at 30 June
2007 (unaudited) 152 120 33 587 218 994
Issue of shares - - 171 444
Profit for the period 45 119 13 757 58 876
Dividends paid (56 660) (1 040) (57 700)
Balance at 31 December
2007 (unaudited) 140 579 46 304 391 614
Transfer of reserves 9 374 - -
Recovery of listing costs - - (65)
Profit for the period 59 025 17 173 76 198
Revaluation of property,
plant and equipment net
of taxation - - 6 004
Balance at 30 June
2008 (audited) 208 978 63 477 473 751
Profit for the period 45 185 10 183 55 368
Dividends paid (30 550) (9 360) (39 910)
Balance at 31 December
2008 (unaudited) 223 613 64 300 489 209
COMMENTARY
Introduction
The board of ARB is pleased to present the group`s interim results for the six
months ended 31 December 2008 ("the period"). Notwithstanding a weakened economy
and difficult market conditions, revenue increased 8,5% year-on-year for the
period, driven mainly by the performance of the newly opened Nelspruit branch.
Basis of Preparation
The unaudited interim financial statements for the period have been prepared in
compliance with International Accounting Standard (IAS 34) - Interim Financial
Reporting and in terms of the Listings Requirements of the JSE Limited. The
accounting policies applied in preparing these unaudited interim financial
statements are consistent with those applied in the annual financial statements
for the year ended 30 June 2008 and the six months to 31 December 2007 and
comply with International Financial Reporting Standards (IFRS) and the South
African Companies Act, 1973.
Financial Review
Revenue increased to R647,2m from R596,4m in the comparative prior period. The
fall in metal prices, which impacted on operating margin, caused a decline in
net profit to R55,4m from R58,9m in the comparative prior period. Despite this,
headline earnings remained stable when compared to that at 31 December 2007.
In response to the changing market environment, inventory levels have been
reduced from R308m at 30 June 2008 to R251m at the end of the period. Where
appropriate, provisions have been made in response to declining metal prices.
During the period, capital expenditure was incurred for the purchase of new
vehicles and for the development of new premises for the Cape Town branch.
Operational Review
Notwithstanding falling metal prices, ARB Electrical Wholesalers` branch network
achieved revenue growth through increased volumes. Fueled by higher
infrastructure expenditure, the Gauteng branch continued to grow and the new
Nelspruit branch performed ahead of expectations. The Cape branches maintained
operating levels despite depressed regional market conditions.
ARB Mining made good progress in obtaining accreditation as a supplier with
numerous mines and mine contract facilitators. While growth is slow, ARB remains
positive that this division will continue to prosper, despite the
rationalisations introduced at certain mines.
ARB Global, which was established to focus exclusively on exports to Africa,
made significant progress in establishing a quality supply base in Asia. These
imported products are currently being tested for accreditation by Energy
regulators in the SADC region.
Prospects
Management remains cautiously optimistic for the ensuing six months. Sectoral
infrastructure expenditure continues and levels of enquiries remain positive.
ARB should continue to benefit from parastatal spend over the next five years
primarily by Eskom and Transnet. Government`s repeated commitment to providing
access to electricity and Eskom`s continued rural investment programme should
benefit ARB. Demand from Eskom`s distribution infrastructure operations remains
strong with new connections continuing unabated. Eskom`s activity should be most
evident in the Eastern Cape, KwaZulu-Natal and Limpopo which are targeted as
growth nodes. Further, Eskom has begun awarding tenders for coal-fired power
stations in line with its programme to radically increase capacity. ARB`s
established customer base includes the contractors participating in Eskom`s
expansion programme.
The focus in the medium-term will be growth in market share, both organically
and by acquisition. Acquisitions will be considered in light of strict vetting
criteria. In addition, ARB will continue to look to cross-border expansion to
drive top and bottom line growth.
Appointments
Byron Nichles has been appointed as CEO with effect from 1 February 2009 to
focus on mergers and acquisitions. Craig Robertson, former ARB CEO, remains on
the board as an executive director with specific focus on his role as chief
executive of the main operating subsidiary, ARB Electrical Wholesalers.
Dividend
In line with policy, no interim dividend has been declared. ARB`s dividend
policy is to distribute a final dividend for the full year of up to a maximum of
one third of net profit after taxation.
Appreciation
We thank our management teams and employees for their commitment and hard work
which contributed to the group`s performance for the period. We also express our
appreciation to our fellow directors for their wise counsel. We thank our
business partners, advisors and shareholders for their ongoing support.
For and on behalf of the Board.
Alan R Burke Craig Robertson William Neasham
Chairman CEO (for the period under review) Financial Director
4 February 2009
Directors: AR Burke (Chairman)*; B Nichles (CEO); CC Robertson; WR Neasham
(Financial Director); JR Modise*; DF Muhlwa*; ST Downes *>
*non-executive >independent
Registered office: 10 Mack Road, Prospecton, Durban, 4110 (PO Box 26426,
Isipingo Beach, 4115)
Sponsor: PSG Capital (Pty) Ltd, Building 8, Woodmead Estate, 1 Woodmead Drive,
Woodmead, 2191 (PO Box 987, Parklands, 2121)
Transfer secretaries: Computershare Investor Services (Pty) Ltd, 70
Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
Company secretary: WR Neasham CA(SA), 10 Mack Road, Prospecton, Durban, 4110 (PO
Box 26426, Isipingo Beach, 4115)
Auditors: PKF (Durban), 12 on Palm Boulevard, Gateway, 4319 (PO Box 1858,
Durban, 4000)
Date: 04/02/2009 15:00:01 Produced by the JSE SENS Department.
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