| Mon 23 Feb 2009, 12:02 | | WBO - Wilson Bayly Holmes - Ovcon Limited - Unaudited interim financial |
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WBO
WBO
WBO - Wilson Bayly Holmes - Ovcon Limited - Unaudited interim financial
statements for the six months ended 31 December 2008
WILSON BAYLY HOLMES - OVCON LIMITED
Building and civil engineering contractors
(Registration no. 1982/011014/06)
ISIN No: ZAE000009932 Share code: WBO
UNAUDITED INTERIM FINANCIAL STATEMENTS
for the six months ended 31 December 2008
Revenue up 35%
Operating profit up 75%
Headline earnings up 78%
Condensed Income Statement
Unaudited Unaudited Audited
% December December June
increase 2008 2007 2008
R`000 R`000 R`000
Revenue 35,3 6 814 531 5 037 438 10 783 651
Operating profit 500 647 290 010 904 828
before non-trading
items
Impairment of - (8 623) (18 994)
goodwill
Fair value 2 526 2 089 3 657
adjustment to
concession
investment
(Loss)/profit on (1 184) - 93 408
disposal of
investments
Share-based (17 663) (5 926) (23 860)
payments expense
Operating profit 74,5 484 326 277 550 959 039
Share of profits 18 615 7 134 (20 710)
and losses in
associates
Investment income 139 171 58 094 162 744
Operating income 642 112 342 778 1 101 073
Finance costs (23 986) (6 962) (20 338)
Profit before 618 126 335 816 1 080 735
taxation
Taxation (182 954) (101 130) (318 211)
Profit for the 435 172 234 686 762 524
period
Profit attributable
to
Equity shareholders 392 768 211 882 716 169
of Wilson Bayly
Holmes-Ovcon
Limited
Minority interests 42 404 22 804 46 355
435 172 234 686 762 524
Reconciliation of
headline earnings
Net profit 392 768 211 882 716 169
Adjustments:
Impairment of - 8 623 18 994
goodwill
Share of - - 58 109
impairment of
goodwill arising
within associate
Loss/(profit) on 1 184 - (93 408)
disposal of
investments
Profit on (5 673) (1 678) (5 708)
disposal of
property, plant &
equipment (net of
tax)
Headline earnings 77,4 388 279 218 827 694 156
Ordinary shares
Issued (`000) 66 000 66 000 66 000
Weighted average 54 956 55 190 54 956
number of shares
(`000)
Diluted weighted 55 118 55 190 55 118
average number of
shares (`000)
Earnings per share 86,2 714,7 383,9 1 303,2
(cents)
Diluted earnings 712,6 383,9 1 299,3
per share (cents)
Headline earnings 78,2 706,5 396,5 1 263,1
per share (cents)
Diluted headline 704,4 396,5 1 259,4
earnings per share
(cents)
Dividend per share 66,7 100,0 60,0 242,0
(cents)
Operating margin 7,3 5,8 8,4
(%)
Condensed Balance Sheet
Unaudited Unaudited Audited
December December June
2008 2007 2008
R`000 R`000 R`000
ASSETS
Non-current assets 1 879 594 1 324 670 1 743 691
Property, plant and 1 143 317 890 465 1 041 071
equipment
Goodwill 161 843 201 221 98 600
Investment in associates 351 533 107 139 285 755
Other non-current assets 222 901 125 845 318 265
Current assets 6 369 968 3 631 380 6 152 291
Other current assets 3 027 863 1 908 603 3 370 770
Cash and cash equivalents 3 342 105 1 722 777 2 781 521
Total assets 8 249 562 4 956 050 7 895 982
EQUITY AND LIABILITIES
Capital and reserves 2 100 418 1 222 392 1 815 333
Ordinary share capital and 2 023 980 1 157 299 1 731 904
reserves
Minority interests 76 438 65 093 83 429
Non-current liabilities 217 542 141 874 264 798
Long-term financial 110 428 141 874 141 942
liabilities
Other non-current 107 114 - 122 856
liabilities
Current liabilities 5 931 602 3 591 784 5 815 851
Other current liabilities 5 912 074 3 441 186 5 811 254
Bank overdrafts 19 528 150 598 4 597
Total equity and liabilities 8 249 562 4 956 050 7 895 982
Net tangible asset value per 3 388 1 732 2 972
share (cents)
Condensed Cash Flow Statement
Unaudited Unaudited Audited
December December June
2008 2007 2008
R`000 R`000 R`000
Cash generated from 1 199 668 829 755 2 239 493
operations
Investment income 139 171 58 094 162 744
Finance costs (23 986) (6 962) (20 338)
Taxation paid (301 267) (158 226) (224 994)
Dividend paid (111 366) (56 158) (88 110)
Cash retained from operations 902 220 666 503 2 068 795
Net cash flow from investing (285 656) (382 225) (530 556)
activities
Net cash flow from financing (70 911) 19 450 (29 766)
activities
Net increase in cash and cash 545 653 303 728 1 508 473
equivalents
Cash and cash equivalents at 2 776 924 1 268 451 1 268 451
the beginning of the year
Cash and cash equivalents at 3 322 577 1 572 179 2 776 924
the end the of period
Condensed Statement of Changes in Equity
Unaudited Unaudited Audited
December December June
2008 2007 2008
R`000 R`000 R`000
Ordinary share capital and 1 815 333 1 081 404 1 081 404
reserves at the beginning of
the period
Profit for the period 435 172 233 559 879 482
Translation of foreign (6 988) (7 053) 93 098
entities
Transfer to share scheme 17 663 5 926 23 860
reserve
Dividend paid (111 366) (56 158) (103 625)
Purchase of treasury shares - - (4 681)
Change in shareholding of (49 396) (36 413) (37 247)
subsidiaries
Ordinary share capital and 2 100 418 1 222 392 1 815 333
reserves at the end of the
period
Segmental Information
Unaudited Unaudited Audited
December December June
2008 2007 2008
R`000 R`000 R`000
Primary Segments
Segment revenue
- Building and civil 4 727 521 3 604 800 7 807 924
engineering
- Roads and earthworks 2 072 702 1 211 391 2 719 297
- Industrial - 183 689 183 689
- Property and concessions 14 308 37 558 72 741
6 814 531 5 037 438 10 783 651
Segment result
- Building and civil 235 817 142 728 484 380
engineering
- Roads and earthworks 264 156 99 589 374 394
- Industrial - 39 362 39 058
- Property and concessions 674 8 331 6 996
500 647 290 010 904 828
Secondary Segments
Segment revenue
- Local 4 066 010 3 425 388 6 911 796
- International 2 748 521 1 612 050 3 871 855
6 814 531 5 037 438 10 783 651
Segment result
- Local 249 067 183 877 521 894
- International 251 580 106 133 382 934
500 647 290 010 904 828
Commentary
OVERVIEW OF RESULTS
We are pleased to announce that the group has again produced excellent results.
In line with the trading update published on 12 December 2008, headline earnings
have increased by 78,2% to R388 million (2007: R219 million) and earnings per
share improved by 86,2%. Revenue has increased by 35% to R6,8 billion (2007: R5
billion), and the operating profit has increased by 72,6% to R501 million from
R290 million. The operating margin for the six months under review has increased
to 7,3% (2007: 5,8%).
Despite the global economic slowdown the group continues to operate at a
satisfactory level. Our order book remains strong at R16,7 billion (2007: R15,5
billion). Capital expenditure for the six months amounted to R215 million (2007:
R204 million).
During the six months under review WBHO increased its stake in its Australian
operations resulting in an increase of goodwill of R62,2 million.
The good results achieved combined with diligent working capital management has
favourably influenced our net cash position which has increased from R2,5
billion at June 2008 to R3,3 billion at December 2008.
The total financial guarantees issued to third parties amounted to R3,5 billion
as at 31 December 2008 compared to R2,9 billion at 30 June 2008.
An interim dividend of 100 cents per ordinary share has been declared which is
67% higher than the 2007 interim dividend of 60 cents.
BUILDING AND CIVIL ENGINEERING
South Africa
The division has achieved good results for the six months under review with
commendable increases in revenue and operating profit. We start the calendar
year with an order book of R5,9 billion (2007: R6,8 billion).
We are engaged on the construction of three soccer stadia and two airports for
the Soccer World Cup in 2010. Work on the stadia is well on track. The roof
cables are being lifted at the Greenpoint stadium and the launch of the arch
over the Durban stadium has been successfully completed. Work on the Polokwane
stadium structure is making good progress. The central terminal building at OR
Tambo International was also completed and brought into service ahead of
schedule. Work continues on programme for the renovation of the remainder of the
international terminal.
The North, KwaZulu-Natal and Eastern Cape regions are all busy and have
substantial order books; however the Western Cape is starting to feel the
effects of a decline in the volume of work on offer. The building work at King
Shaka International Airport is progressing well.
The division is investigating opportunities to support its existing clients as
they expand into Africa.
The fall-off in commodity prices has affected the Civil division with a number
of mining contracts not materialising. Our flexibility in being able to
transfer resources effectively has enabled us to keep in tandem with these
changes in the construction market. The award of the civil works for the Kusile
Power Station in joint venture has given us a core workload for the next three
years.
We believe that the division is well placed to secure an increased share of the
potential public work whilst maintaining its strong position in the private
sector.
Australia
The group`s Australian subsidiary has experienced a pleasing six months with
both turnover and profit substantially exceeding that achieved in the
comparative period. We expect this to continue for the remainder of the
financial year.
The Probuild group begins the calendar year with an order book of R5,5 billion
(2007: R5,7 billion) leaving only a small percentage of unsecured work required
to achieve our 2010 forecasts. The majority of the turnover has been achieved in
Melbourne and Perth whilst Sydney remains quiet. Turnover in Brisbane is
satisfactory.
ROADS AND EARTHWORKS
The order book at the end of December was R4,1 billion (2007: R3 billion).The
level of activity within the division remains at full capacity.
The future phases of our mining contract in the DRC have been cancelled and we
are in the process of withdrawing from that country. We continue with mining
works in Ghana and Zambia, but at reduced levels. In Mozambique we have a number
of contracts, but with reduced revenue. In Botswana the division has commenced
construction of the extensions to the Sir Seretsi Kama International Airport in
Gaborone and is involved with a number of other contracts. We remain positive
about maintaining our work-load in southern Africa.
Locally, the division is involved in major road works on the Gauteng Freeway
Improvement Programme for SANRAL. Other major road contracts include the Mount
Frere upgrade in the Eastern Cape, the Nelspruit and Barberton Bypasses in
Mpumalanga and the Polokwane Bypass in Limpopo.
Work at the King Shaka International Airport is on track for completion in time
for the Soccer World Cup. The major upgrade of pipelines for Sapref in Durban is
complete and we are involved in pipeline rehabilitation in Durban.
In December we acquired a 30% interest in an asphalt surfacing company, Roadspan
Holdings (Pty) Limited, which we expect will add another valuable facet to our
division.
The division`s order book remains strong and there are good prospects of being
able to maintain it at reasonable levels.
INDUSTRIAL
WBHO`s industrial investments are held through its 50% associate, Capital Africa
Steel (Pty) Limited.
The performances of the steel related businesses for the six months under review
have been in line with budgets. However, the outlook for the remainder of the
year is more uncertain.
The readymix concrete division`s performance has been slightly below
expectations. We are expanding our interest in this sector and a number of
acquisitions are at an advanced stage of negotiation.
Commissioning of the steel pipe factory in Mozambique is scheduled to occur
towards the end of the financial year. This is fortuitous as the international
market for piping is currently going through a destocking phase but we expect
demand to start improving from July 2009 onwards.
PROPERTY
The group`s exposure to the property market is limited to two developments,
Simbithi Eco-Estate near Ballito and St Francis Links. Sales have been slow but
both developments are on sound footings.
PROSPECTS
The group expects to record a solid result for the 2009 financial year. Activity
in the procurement department remains at high levels and our order book of R16,7
billion provides a solid foundation for the 2010 financial year. Servicing the
public and private sectors in South Africa is a key focus for WBHO and we are
committed to playing our role in developing both human and capital resources in
this country.
GRATITUDE
The board extends its thanks to all our loyal and dedicated employees for their
valuable input in producing these results. We also thank all our clients for
their continued support.
BASIS OF ACCOUNTING
The consolidated interim unaudited financial statements have been prepared in
accordance with IAS34: Interim Financial Reporting, the International Financial
Reporting Standards (IFRS) and Schedule 4 of the South African Companies Act.
The accounting policies adopted in the preparation of these financial statements
are consistent with those used to prepare the comparative interim financial
statements and the annual financial statements for the year ended 30 June 2008.
Dividend declaration
Notice is hereby given that the directors have declared an interim dividend of
100 cents per share (2007: 60 cents) payable to shareholders in respect of the
six months ended 31 December 2008.
The following dates have reference:
Last day to trade cum dividend Friday, 17 April 2009
Trading ex dividend commences Monday, 20 April 2009
Record date Friday, 24 April 2009
Payment date Tuesday, 28 April 2009
Shares may not be dematerialised or rematerialised between Monday, 20 April 2009
and Friday, 24 April 2009, both dates inclusive.
For and on behalf of the board
MS Wylie EL Nel
Chairman Chief executive officer
23 February 2009
Sponsor: Investec Bank Limited
www.wbho.co.za
Date: 23/02/2009 12:02:01 Produced by the JSE SENS Department.
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