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ELR ELRP
ELR
ELR / ELRP - ELB Group Limited - Unaudited Group Interim Report And Cash
Dividend Declarations For The Six Months Ended 31 December 2008
ELB GROUP LIMITED
Incorporated in the Republic of South Africa
Registration number 1930/002553/06
Share codes: ELR & ELRP
ISIN: ZAE000035101 & ZAE000035333
("ELB", "the Company" or "the Group")
UNAUDITED GROUP INTERIM REPORT AND CASH DIVIDEND DECLARATIONS FOR THE SIX MONTHS
ENDED 31 DECEMBER 2008
COMMENTS
INTRODUCTION
The ELB Group is a total solutions provider to the mining, minerals, power,
port, construction and industrial sectors in the field of materials handling and
appropriate process plants. This is achieved through ELB generated innovation
and the supply, with world class partners, of equipment and technology. The
Group operates in Africa and Australia.
FINANCIAL RESULTS
The results for the six months to 31 December 2008 reflect headline earnings of
R15,3 million (2007 - R22,9 million) representing a decrease of 33,1 percent.
The ELB Equipment division`s trading results for the six months exceeded budget,
as did Ditch Witch in Australia.
ELB Engineering Services experienced an excellent six months both in terms of an
improvement in profitability as well as a significant increase in the order
book.
MATERIAL ADJUSTMENTS FOR THE PERIOD
Included in the financial results are the following material (expense)/ income
adjustments:
Six months ended Year ended
31 December 30 June
2008 2007 2008
R000 R000 R000
Unrealised foreign currency (29 982) 3 463 1 230
exchange adjustments (IAS 21)
Share options expense (IFRS 2) (2 578) - (1 397)
Total for the period (32 560) 3 463 (167)
As a result the pre tax earnings of the ELB Group for the six months ended 31
December 2008 were reduced by R32,6 million (2007 - increase of R3,5 million).
The unrealised currency exchange adjustments arose because of the severe
depreciation of the rand at the end of the period against the currencies of
certain of ELB`s major suppliers.
CASH FLOW
Fair value accounting has diminished the role of the income statement as the
principal measure of performance and has necessitated greater emphasis being
placed on cash flow management for the period. The ELB Group works closely with
its bankers, suppliers and customers to ensure that the Group retains a strong
balance sheet including healthy cash balances to assist in dealing with severe
economic downturns and uncertainties.
PROSPECTS
The global resources and power industry sectors continue to be affected by the
current financial crisis and the weakness being experienced in the resources
sector. Therefore ELB expects to find trading conditions in the second six
months extremely challenging.
ACCOUNTING POLICIES
The unaudited interim financial statements have been prepared in accordance with
International Accounting Standard (IAS) 34: Interim Financial Reporting.
Accounting policies accord with International Financial Reporting Standards
(IFRS), and are consistent with those applied in the financial year ended 30
June 2008. The interim financial statements also comply with the South African
Companies Act 1973, as amended.
DIVIDENDS
As the future holds many uncertainties at present, and until it becomes clear
what credit the banks are willing to provide the sectors in which we operate, it
is considered prudent to preserve liquidity wherever possible.
In line with ELB`s historic conservative approach to dividend distribution it
has been decided to declare a reduced interim ordinary dividend of 10 cents
(2007 - 20 cents) per ordinary share.
Dividends are paid from operating profits.
On behalf of the Board
A G Fletcher
Chairman
Boksburg
17 March 2009
GROUP INCOME STATEMENT
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 08 31 Dec 07 30 June 08
R000 R000 R000
Continuing operations
Sales revenue 711 897 458 071 1 069 408
Operating costs excluding (691 596) (423 525) (968 020)
depreciation
Operating profit before 20 301 34 546 101 388
depreciation
Depreciation (2 578) (1 931) (4 099)
Profit from operations 17 723 32 615 97 289
Finance income 17 641 11 024 21 886
Finance expenses (6 460) (3 947) (8 814)
Profit before tax 28 904 39 692 110 361
Income tax expense (11 252) (13 893) (34 709)
Profit from continuing 17 652 25 799 75 652
operations
Discontinued operations
Profit from discontinued - 1 493 2 107
operations as detailed below
Profit for the period 17 652 27 292 77 759
Attributable to:
Ordinary shareholders of ELB 15 342 24 636 68 007
Minority interest 2 310 2 656 9 752
17 652 27 292 77 759
PROFIT FROM DISCONTINUED
OPERATIONS
(Loss)/profit from operations - (154) 1 101
before items listed below
Profit on sale of property - 1 647 1 647
Loss on sale of subsidiaries - - (641)
Profit from discontinued - 1 493 2 107
operations
CALCULATION OF GROUP HEADLINE EARNINGS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 08 31 Dec 07 30 June 08
R000 R000 R000
Profit attributable to 15 342 24 636 68 007
ordinary shareholders of
ELB per the income
statement
Deduct: Items excluded 39 1 777 1 250
from headline earnings
as detailed below:
Continuing operations:
Profit on disposal of
plant and equipment:
Included in profit from 64 87 275
operations
Discontinued operations:
Profit on sale of - 1 647 1 647
property
Profit on disposal of - 80 77
plant and equipment
Loss on sale of - - (641)
subsidiaries
Income tax effect of (18) (26) (79)
items excluded from
headline earnings
Minority interest in (7) (11) (29)
items excluded from
headline earnings
Headline earnings 15 303 22 859 66 757
Weighted average number 27 237 27 438 27 454
of shares (excluding
treasury shares) on
which basic earnings per
share are based (000`s)
Earnings per ordinary
share (cents)
- basic 56,3 89,8 247,7
- diluted 56,3 89,8 247,5
Headline earnings per
ordinary share (cents)
- basic 56,2 83,3 243,2
- diluted 56,2 83,3 242,9
Dividends declared for 10 20 60
the period per ordinary
share (cents)
GROUP BALANCE SHEET
Unaudited Unaudited Audited
31 Dec 08 31 Dec 07 30 Jun 08
R000 R000 R000
ASSETS
Non current assets 61 295 45 494 59 425
Property, plant and 41 545 36 044 41 820
equipment
Non current loan receivable 3 365 - 3 949
Deferred tax assets 16 385 9 450 13 656
Current assets 876 456 588 908 786 553
Inventories and construction 472 087 272 984 381 345
contracts in progress
Receivables and other 110 861 86 668 89 974
current assets
Assets of discontinued - 19 980 -
operations held for disposal
Cash and cash equivalents 293 508 209 276 315 234
Total assets 937 751 634 402 845 978
EQUITY AND LIABILITIES
Attributable to ordinary 255 199 212 222 263 848
shareholders of ELB
Issued capital 25 192 25 192 25 192
Treasury shares (31 254) (22 856) (24 758)
Reserves 2 480 (6 479) 9 163
Retained earnings 258 781 216 365 254 251
Preference shares 8 8 8
Total equity attributable to 255 207 212 230 263 856
equity holders of ELB
Minority interest 22 841 12 438 21 710
Total equity 278 048 224 668 285 566
Non current liabilities 21 747 14 177 17 724
Interest bearing borrowings 8 598 14 018 9 891
Provision 10 876 - 7 403
Deferred tax liabilities 2 273 159 430
Current liabilities 637 956 395 557 542 688
Non interest bearing 422 636 258 640 286 889
payables and other current
liabilities
Interest bearing payables 206 406 112 546 228 719
Income tax payable 3 728 16 109 27 080
Liabilities of discontinued - 8 262 -
operations held for disposal
Bank overdraft 5 186 - -
Total equity and liabilities 937 751 634 402 845 978
Ordinary shares in issue 33 860 33 860 33 860
(000`s)
Deduct: Treasury shares in 6 843 6 366 6 403
issue (000`s)
Ordinary shares in issue on 27 017 27 494 27 457
which net asset value per
share is calculated
Net asset value per ordinary 945 772 961
share (cents)
NOTES
Capital commitments
At 31 December 2008 there were capital commitments of R1 890 000 (31 December
2007 - R4 835 000, 30 June 2008 - R2 924 000).
Contingent liabilities
A Group entity has issued a guarantee of R830 000 in favour of a raw material
supplier to a company which was previously part of the ELB Timbers segment, and
has now been sold. The guarantee is cancellable by three calendar months notice.
No accrual has been made in respect of the guarantee.
ELB Engineering Services operates in the engineering contracting business and is
exposed to the risks associated with engineering contracts. These risks are
managed on the basis of limited liability.
All known liabilities of the group have been accrued. However a contractual
dispute has arisen that the directors believe will be unlikely to result in a
material loss.
GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 08 31 Dec 07 30 June 08
R000 R000 R000
Continuing operations
Cash (outflow)/inflow from (7 072) (1 439) 120 073
operating activities before
dividends paid
Dividends paid (10 812) (5 484) (11 555)
Cash (outflow)/inflow from (17 884) (6 923) 108 518
operating activities
Cash outflow from investment (2 239) (11 490) (19 985)
activities
Cash (outflow)/inflow from (6 789) 8 609 2 580
financing activities
Cash (outflow)/inflow from (26 912) (9 804) 91 113
continuing operations
Discontinued operations
Cash inflow from discontinued - 9 904 14 945
operations
(Decrease)/increase in cash and (26 912) 100 106 058
cash equivalents
Cash and cash equivalents at 315 234 209 176 209 176
the beginning of the period
Cash and cash equivalents at 288 322 209 276 315 234
the end of the period
Reconciliation to the balance
sheet
Current assets - cash and cash 293 508 209 276 315 234
equivalents
Current liabilities - bank (5 186) - -
overdraft
288 322 209 276 315 234
SEGMENT ANALYSIS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 08 31 Dec 07 30 June 08
R000 R000 R000
SEGMENT REVENUE
Continuing operations
ELB Engineering 711 897 458 071 1 069 408
Discontinued operations
ELB Timbers - 12 971 26 765
Total 711 897 471 042 1 096 173
SEGMENT RESULTS
Headline earnings/(loss)
Continuing operations
ELB Engineering 17 375 23 740 67 607
ELB Group non (2 072) (647) (1 874)
segmental expense
Headline earnings of 15 303 23 093 65 733
continuing operations
Headline (loss)/earnings
of discontinued
operations
ELB Timbers - (234) 1 024
Headline earnings 15 303 22 859 66 757
attributable to ordinary
shareholders of ELB
Items excluded from
headline earnings
Continuing operations 39 50 167
Discontinued - 1 727 1 083
operations
Profit attributable to 15 342 24 636 68 007
ordinary shareholders of
ELB
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to ordinary shareholders of ELB
Issued Treasury Retained
capital shares Reserves earnings Total
R 000 R 000 R 000 R 000 R 000
Balance at 30 25 192 (23 215) (6 208) 197 213 192 982
June 2007
Profit for the 68 007 68 007
year
Foreign 15 037 15 037
currency
translation
adjustments
for foreign
operations
Total - - 15 037 68 007 83 044
recognised
income and
expense for
the year
Ordinary (10 969) (10 969)
dividends paid
Premium on buy ( 853) ( 853)
out of
minority
interest in
subsidiary
Share options 1 187 1 187
recognised
The ELB Share
Incentive
Trust
Net (1 543) (1 543)
increase in
treasury
shares held
Total changes - (1 543) 15 371 57 038 70 866
for the year
Balance at 30 25 192 (24 758) 9 163 254 251 263 848
June 2008
Profit for the 15 342 15 342
six months
Foreign (8 874) (8 874)
currency
translation
adjustments
for foreign
operations
Total - - (8 874) 15 342 6 468
recognised
income and
expense for
the six months
Ordinary (10 812) (10 812)
dividends paid
Share options 2 191 2 191
recognised
The ELB Share
Incentive
Trust
Net (6 496) (6 496)
increase in
treasury
shares held
Total changes - (6 496) (6 683) 4 530 (8 649)
for the six
months
Balance at 31 25 192 (31 254) 2 480 258 781 255 199
December 2008
Balance at 30 25 192 (23 215) (6 208) 197 213 192 982
June 2007
Profit for the 24 636 24 636
six months
Foreign ( 271) ( 271)
currency
translation
adjustments
for foreign
operations
Total - - ( 271) 24 636 24 365
recognised
income and
expense for
the six months
Ordinary (5 484) (5 484)
dividends paid
ELB Share
Incentive
Trust
Net 359 359
decrease in
treasury
shares held
Total changes - 359 ( 271) 19 152 19 240
for the six
months
Balance at 31 25 192 (22 856) (6 479) 216 365 212 222
December 2007
GROUP STATEMENT OF CHANGES IN EQUITY CONTINUED
Attributable
to ordinary
shareholders Minority Unaudited
of ELB Preference Total
Total shares interest equity
R 000 R 000 R 000 R 000
Balance at 30 192 982 8 9 830 202 820
June 2007
Profit for the 68 007 9 752 77 759
year
Foreign 15 037 2 654 17 691
currency
translation
adjustments for
foreign
operations
Total 83 044 - 12 406 95 450
recognised
income and
expense for the
year
Ordinary (10 969) ( 586) (11 555)
dividends paid
Premium on buy ( 853) ( 150) (1 003)
out of minority
interest in
subsidiary
Share options 1 187 210 1 397
recognised
The ELB Share
Incentive Trust
Net increase (1 543) (1 543)
in treasury
shares held
Total changes 70 866 - 11 880 82 746
for the year
Balance at 30 263 848 8 21 710 285 566
June 2008
Profit for the 15 342 2 310 17 652
six months
Foreign (8 874) (1 566) (10 440)
currency
translation
adjustments for
foreign
operations
Total 6 468 - 744 7 212
recognised
income and
expense for the
six months
Ordinary (10 812) (10 812)
dividends paid
Share options 2 191 387 2 578
recognised
The ELB Share
Incentive Trust
Net increase (6 496) (6 496)
in treasury
shares held
Total changes (8 649) - 1 131 (7 518)
for the six
months
Balance at 31 255 199 8 22 841 278 048
December 2008
Balance at 30 192 982 8 9 830 202 820
June 2007
Profit for the 24 636 2 656 27 292
six months
Foreign ( 271) ( 48) ( 319)
currency
translation
adjustments for
foreign
operations
Total 24 365 - 2 608 26 973
recognised
income and
expense for the
six months
Ordinary (5 484) (5 484)
dividends paid
ELB Share
Incentive Trust
Net decrease 359 359
in treasury
shares held
Total changes 19 240 - 2 608 21 848
for the six
months
Balance at 31 212 222 8 12 438 224 668
December 2007
INTERIM CASH DIVIDEND DECLARATIONS
The directors have declared the following interim cash dividends.
PREFERENCE DIVIDEND NUMBER 116
An interim cash dividend has been declared at the rate of 6% per annum for the
first six month period on the 6% fixed cumulative redeemable preference shares
of R2 each, equivalent to 6 cents per preference share.
ORDINARY DIVIDEND NUMBER 122
An interim cash dividend of 10 cents per share has been declared on the ordinary
shares.
The salient dates in respect of both dividends are:
Last day to trade cum dividend Thursday, 30 April 2009
Shares commence trading ex dividend Monday, 4 May 2009
Record date Friday, 8 May 2009
Date of payment Monday, 11 May 2009
Share certificates may not be dematerialised or rematerialised between Monday, 4
May 2009, and Friday, 8 May 2009, both dates inclusive.
By order of the Board
DG Jones
Secretary
Boksburg
17 March 2009
REGISTERED OFFICE
ELB Equipment Limited
14 Atlas Road,
Anderbolt,
Boksburg,
1459
SHARE TRANSFER SECRETARIES
Computershare Investor Services (Pty) Limited
70 Marshall Street,
Johannesburg, 2001
(PO Box 61051,
Marshalltown, 2107)
SPONSOR
Rand Merchant Bank (a division of FirstRand Bank Limited)
1 Merchant Place,
Cnr Fredman Drive & Rivonia Road,
Sandton, 2196
DIRECTORS
AG Fletcher (chairman), PJ Blunden (chief executive - ELB Equipment), T de
Bruyn*, Dr JP Herselman*, TJ Matsau*, Dr SJ Meijers (chief executive - ELB
Engineering Services), MV Ramollo
*Non executive
Date: 17/03/2009 16:38:19 Produced by the JSE SENS Department.
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