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ABU
ABU
ABU - abe Construction Chemicals - Financial Results For The 6 Months Ended
30 November 2008
a.b.e. CONSTRUCTION CHEMICALS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1982/005383/06)
Share Code: ABU & ISIN: ZAE000102059
("abe" or "the company")
FINANCIAL RESULTS FOR THE 6 MONTHS ENDED 30 NOVEMBER 2008
HIGHLIGHTS
- PROFIT BEFORE TAX UP 42%
- TURNOVER UP 27%
- TOTAL ASSETS UP 25%
- HEADLINE EARNINGS UP 37%
INCOME STATEMENT
% change Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 November 30 November 31 May
2008 2007 2008
R 000`s R 000`s R 000`s
Revenue 27% 140,185 110,377 220,305
Cost of sales (85,559) (68,053) (135,437)
Gross profit 29% 54,626 42,324 84,868
Other income 365 344 9,396
Distribution costs (4,307) (2,871) (8,441)
Administration expenses (5,078) (4,763) (9,717)
Other expenses (25,263) (20,296) (46,885)
Operating profit 38% 20,343 14,738 29,221
Investment revenue 651 125 458
Finance costs (305) (247) (528)
Profit before taxation 42% 20,689 14,616 29,151
Taxation (6,643) (4,239) (8,194)
Profit for the period 35% 14,046 10,377 20,957
Attributable to:
Equity holders of abe 14,046 10,377 20,957
Earnings per share (Note 1)
Weighted average number 100,000,000 66,660,000 96,750,000
of shares in issue
- Basic and diluted 14,04 15,57 21,7
basic earnings per
share (cents)
- Headline and diluted 14,02 15,33 21,2
headline earnings per
share (cents)
BALANCE SHEET
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 November 30 November 31 May 2008
2008 2007
R 000`s R 000`s R 000`s
Assets
Non-Current Assets 38,804 28,235 38,353
Property, plant and 38,804 28,235 38,353
equipment
Current Assets 116,619 96,501 109,114
Inventories 48,973 37,769 46,222
Trade and other 55,884 51,197 43,202
receivables
Cash and cash 11,762 7,535 19,690
equivalents
Total Assets 155,423 124,736 147,467
Equity and Liabilities
Equity 91,349 66,457 85,803
Share capital (Note 1) 1,000 1,000 1,000
Share Premium 33,636 33,621 33,636
Non-Distributable 16,374 7,748 16,374
Reserves
Retained income 40,339 24,088 34,793
Liabilities
Non-Current Liabilities 7,156 6,680 7,278
Other financial 2,835 2,819 2,348
liabilities
Provisions 2,247 2,515 2,467
Deferred tax 2,074 1,346 2,463
Current Liabilities 56,918 51,599 54,386
Other financial 1,012 1,101 1,832
liabilities
Current tax payable 7,935 5,474 1,753
Trade and other payables 45,860 43,649 49,788
Provisions 2,111 1,375 1,013
Total Liabilities 64,074 58,279 61,664
Total Equity and 155,423 124,736 147,467
Liabilities
STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months 6 months ended 12 months
ended 30 November ended
30 November 2007 31 May 2008
2008
R 000`s R 000`s R 000`s
Opening balance as 85,803 21,458 21,458
previously reported
Shares issued during period - 999
Share Premium - 33,621 34,636
Attributable earnings 14,046 10,378 20,957
Dividends paid (8,500) -
Movement in Non- - - 8,752
distributable reserve
Movement in Retained Income - - -
Closing balance 91,349 66,456 85,803
Comprising
Share capital 1,000 1,000 1,000
Share Premium 33,636 33,621 33,636
Retained earnings 40,339 24,088 34,793
Non-distributable reserve 16,374 7,747 16,374
Total Shareholders` equity 91,349 66,456 85,803
CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 November 30 November 31 May 2008
2008 2007
R 000`s R 000`s R 000`s
Cash flow from operating
activities
Cash generated from 3,421 9,112 29,893
operations
Interest income 651 125 458
Finance cost (305) (247) (528)
Tax paid (850) (7,288)
Net cash from operating 2,917 8,990 22,535
activities
Cash flows from investing
activities
Purchase of property, (2,041) (3,981) (5,697)
plant and equipment
Disposal of property, 29 158 709
plant and equipment
Net cash from investing (2,012) (3,823) (4,988)
activities
Cash flows from financing
activities
Proceeds on share issue - 34,621 34,635
Proceeds/(repayment of (333) 226 (75)
other financial
liabilities
Loans repaid to group - (36,811) (1,748)
companies
Dividend paid (8,500) (35,000)
Net cash from financing (8,833) (1,964) (2,188)
activities
Total cash movements (7,928) 3,203 15,359
Cash at the beginning of 19,690 4,331 4,331
the period
Total cash at the end of 11,762 7,534 19,690
the period
SEGMENTAL ANALYSIS
Reportable segments Company
30 Nov 2008 30 Nov 2007 31 May 2008
Segment revenue - external 140,185 110,377 220,304
customers
Segment profit 20,689 14,616 29,151
Interest expense 309 247 528
Trade receivables 54,696 50,570 40,257
Reportable segments Reconciling Item
30 Nov 2008 30 Nov 2007 31 May 2008
Segment revenue - external -3,810 -3,232 -6,843
customers
Segment profit -7,183 -7,000 18,660
Interest expense 309 247 528
Trade receivables -1,860 -945 -1,128
Reportable segments South Africa
30 Nov 2008 30 Nov 2007 31 May 2008
Segment revenue - external 129,689 102,139 205,640
customers
Segment profit 23,699 18,622 41,672
Interest expense - - -
Trade receivables 50,063 44,833 37,748
Reportable segments Export
30 Nov 2008 30 Nov 2007 31 May 2008
Segment revenue - external 14,306 11,470 21,507
customers
Segment profit 4,173 2,994 6,139
Interest expense - - -
Trade receivables 6,493 6,682 3,637
Business Activity Company
30 Nov 2008 30 Nov 2007 31 May 2008
Segment revenue - external 140,185 110,377 220,305
customers
Segment gross profit 54,626 42,324 84,868
Business Activity Reconciling Item
30 Nov 2008 30 Nov 2007 31 May 2008
Segment revenue - external -3,810 -3,232 -6,843
customers
Segment gross profit -3,726 -3,718 -6,740
Business Activity Resellers
30 Nov 2008 30 Nov 2007 31 May 2008
Segment revenue - external 50,369 44,371 83,077
customers
Segment gross profit 21,406 19,329 35,516
Business Activity Construction
30 Nov 2008 30 Nov 2007 31 May 2008
Segment revenue - external 79,320 57,768 122,564
customers
Segment gross profit 31,830 23,182 48,824
Business Activity Export
30 Nov 2008 30 Nov 2007 31 May 2008
Segment revenue - external 14,306 11,470 21,507
customers
Segment gross profit 5,116 3,531 7,268
Sales by product category
30 Nov 2008 30 Nov 2007 31 May 2008
Waterproofing 68,350 58,318 120,174
General Construction 48,410 29,503 45,415
Silicones and Sealants 19,328 18,029 55,330
Other 7,907 7,759 6,229
TOTAL 143,995 113,609 227,148
Reconciling item -3,810 -3,232 -6,843
Company 140,185 110,377 220,305
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed interim financial report for the six months ended 31 November 2008
has been prepared in compliance with the Listings Requirements of the JSE
Limited, International Financial Reporting Standards (IFRS) (in particular
International Accounting Standard 34 Interim Financial Reporting) and the South
African Companies Act, 1973, as amended.
Except as otherwise disclosed, the accounting policies applied in the
presentation of the interim financial report are consistent with those applied
for the year ended 31 May 2008 and the six months ended 30 November 2007.
These condensed consolidated interim financial statements have been prepared in
accordance with the historic cost convention except for certain financial
instruments which are stated at fair value.
The consolidated interim financial results are presented in rand, which is abe`s
functional and presentation currency.
SELECTED EXPLANATORY NOTES
1. SHARE CAPITAL, EARNINGS AND HEADLINE EARNINGS PER ORDINARY SHARE
As set out in the trading update released on SENS on 11 December 2008, the
weighted average number of shares for the Company in respect of the 6
months ended 30 November 2007 has been recalculated as a consequence of the
interpretation of IAS33 (Earnings per Share). Even though 100,000,000
ordinary shares were in issue from the date of listing on ALTx (17 August
2007) until 30 November 2007, the shares were required to be weighted
taking into account the share split and capitalization issue which occurred
just prior to listing resulting in 66,660,000 weighted average number of
shares in issue for the period to 30 November 2007.
There has been no change in the share capital in the interim period and
there are still 100,000,000 ordinary shares in issue.
The calculation of basic earnings per share is based on net profit
attributable to ordinary shareholders of R14,045,755 (2007: R10,377,622)
and weighted average of 100,000,000 (2007: 66,660,000) shares in issue .
The calculation of headline earnings per share is based on earnings of
R14,016,554 (2007: R10,219,125) and a weighted average of 100,000,000
(2007: 66,660,000) shares in issue.
Reconciliation between earnings and headline earnings:
2008 2007
Basic Earnings 14,045,755 10,377,622
Less: Profit on sale of fixed assets (29,201) (154,498)
Headline Earnings 14,016,554 10,219,125
2. Post balance sheet events
No event which is material to the understanding of this report has occurred
between the financial period and the date of this report.
FINANCIAL RESULTS
The directors of a.b.e. are pleased to present the interim results for the six
months ended 30 November 2008.
- REVENUE
Increased by 27% from R110m to R140m.
- GROSS PROFIT
Grew by 29% partly as a result of constant attention to pricing in times of
volatile raw material and other input costs.
- ATTRIBUTABLE EARNINGS
Profit before tax grew by 42% whilst profit after tax grew by 35% as a
result of R850,000 STC on maiden dividend paid.
- TOTAL ASSETS
Grew from R124m to R155m which included a R8.6m revaluation of fixed
property.
OPERATIONAL REVIEW
1. RESELLERS
Turnover increased by 13.5% vs comparative period which was in line with
expectations.
The strategy for the 2nd half of the year is to improve market share by
capitalizing on our distribution network and relationships with the
national chains as we do foresee a slowdown in economic activity in this
segment of the business.
2. CONSTRUCTION
Turnover increased by more than anticipated at 37% due mainly to
infrastructure spend. a.b.e. will continue to benefit from opportunities
in the second half of the year in respect of existing projects as well as
new projects where our products are specified. We also expect growth in
sales of our new roof tile range which is gaining acceptance in the market.
3. EXPORTS
Posted an increase of 25% which was in line with forecast and we expect to
benefit from rand depreciation in the second half of the year. Most
exports are to Sub-Sahara Africa.
4. PROSPECTS
Management believe that they are on track to achieve forecast profits for
the period ending 31 May 2009 as published in the prospectus which, if
achieved, will represent an increase of 21% in attributable profits between
31 May 2008 and 2009.
5. DIVIDEND
There is no change to the dividend policy as set out in the prospectus and
therefore no interim divided will be paid.
For and on behalf of the Board
S K Mota S P Stacey
Chairman Chief Executive Officer
Johannesburg
10 February 2009
Registered Office:
7 Wilcox Road
Isipingo
KwaZulu-Natal
4110
Transfer Secretaries:
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street
Johannesburg
2001
Directors:
S K Mota*
W R G Post*
S P Stacey
L F Avis
S Rault
ID Hague
RB Patmore**
M Meehan**
* Non-executive
** Independent non-executive
Designated Advisor: PSG Capital (Pty) Limited
Date: 10/02/2009 12:00:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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