| Tue 17 Mar 2009, 16:59 | | KDV - Kaydav Group - Audited Results For The Twelve Months Ended |
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KDV
KDV
KDV - Kaydav Group - Audited Results For The Twelve Months Ended
31 December 2008
KAYDAV GROUP LIMITED
Incorporated in the Republic of South Africa
Registration Number: 2006/038698/06
JSE code: KDV ISIN: ZAE000108940
("KayDav" or "the Group")
AUDITED RESULTS FOR THE TWELVE MONTHS ENDED 31 DECEMBER 2008
Highlights
- Revenue R440 million
- Headline earnings per share 6.8 cents
- Tangible net asset value per share 41.6 cents
CONSOLIDATED INCOME STATEMENT
2008 2007
R R
Revenue 440 446 378 103 765 910
Cost of sales (304 878 293) (71 574 673)
Gross profit 135 568 085 32 191 237
Operating income other 464 062 274 523
Operating expenses (105 004 236) (22 690 325)
Share-based payments (4 000 000)
Goodwill impairment (119 233 190)
Operating (loss)/profit (88 205 279) 5 775 435
Investment income 1 037 795 509 764
Finance costs (2 508 493) (729 696)
(Loss)/Profit before taxation (89 675 977) 5 555 503
Taxation (9 392 892) (2 777 809)
(Loss)/Profit attributable to equity
holders of the parent (99 068 869) 2 777 694
RECONCILIATION BETWEEN EARNINGS AND HEADLINE
EARNINGS
(Loss)/Profit attributable to equity holders
of parent (99 068 869) 2 777 694
(Profit)/Loss on disposal of property, plant
and equipment (3 317) 270 179
Goodwill impairment 119 233 190
Headline earnings attributable to equity
holders of parent 20 161 004 3 047 873
Weighted number of shares in issue 295 232 716 220 363 402
Basic and diluted(loss)/earnings
per share(cents) (33.6) 1.3
Headline earnings per share (cents) 6.8 1.4
CONSOLIDATED BALANCE SHEET
2008 2007
R R
Assets
Non-current assets 52 210 613 158 022 108
Plant and equipment 35 914 574 23 272 633
Goodwill 14 302 804 133 535 994
Deferred tax 1 993 235 1 213 481
Current assets 162 232 239 148 532 784
Inventory 87 454 624 70 017 758
Trade and other receivables 67 956 516 60 341 937
Cash and cash equivalents 6 821 099 16 127 753
Taxation 2 045 336
Total assets 214 442 852 306 554 892
Equity and liabilities
Capital and reserves 137 186 672 236 255 541
Share capital 295 295
Share premium 229 477 552 229 477 552
(Accumulated loss)/ Retained earnings (92 291 175) 6 777 694
Non-current liabilities 10 494 405 6 136 472
Instalment sale liabilities 9 195 960 5 231 478
Deferred tax 1 298 445 904 994
Current liabilities 66 761 775 64 162 879
Trade and other payables 53 197 846 38 375 885
Short-term portion of instalment
sale liabilities 3 501 529 4 447 659
Bank overdraft 7 248 796 13 303 603
Taxation 269 085 6 756 872
Provisions 2 544 519 1 278 860
Total equity and liabilities 214 442 852 306 554 892
Shares in issue at period-end 295 232 716 295 232 716
Tangible net asset value per share (cents) 41.6 34.8
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
2008 2007
R R
Cash flow from operating activities 10 237 158 (3 220 695)
Cash flow from investing activities (16 507 360) (111 013 203)
Cash flow from financing activities 3 018 355 117 058 048
Net (decrease)/increase in cash
and cash equivalents (3 251 847) 2 824 150
Net cash and cash equivalents at the
beginning of the period 2 824 150
Net cash and cash equivalents at the end of
the period (427 697) 2 824 150
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Total share
capital premium capital
R R R
Issue of shares 295 233 857 522 233 857 817
Listing expenses - (4 379 970) (4 379 970)
Profit for the period
Share-based payment
Balance at 31 December 2007 295 229 477 552 229 477 847
Profit for the period
Balance at 31 December 2008 295 229 477 552 229 477 847
Goodwill reconciliation
Goodwill at 1 January 2008
Impairment
Goodwill at 31 December 2008
(Accumulated
loss) /Retained
earnings Total equity
R R
Issue of shares 233 857 817
Listing expenses (4 379 970)
Profit for the period 2 777 694 2 777 694
Share-based payment 4 000 000 4 000 000
Balance at 31 December 2007 6 777 694 236 255 541
Profit for the period (99 068 869) (99 068 869)
Balance at 31 December 2008 (92 291 175) 137 186 672
Goodwill reconciliation
Goodwill at 1 January 2008 133 535 944
Impairment (119 233 190)
Goodwill at 31 December 2008 14 302 804
COMMENTARY
INTRODUCTION
KayDav Group Ltd ("KayDav" or "the Group") specialises in the distribution and
upgrading of wood-based panels and solid wood products.
Wood-based panels are manufactured through the compression of wood waste into a
solid panel. These products have a variety of applications in the construction,
furniture manufacturing and shopfitting industries.
FINANCIAL RESULTS
The current economic conditions have impacted negatively on trading volumes in
our businesses. The effect of high interest rates, the adoption of the National
Credit Act and the contraction in general business activity has resulted in the
Group not achieving its profit forecasts as set out in the Group`s prospectus
published on 1 November 2007.
The Group`s turnover and headline earnings are 8% and 42% below these forecast
numbers respectively. Initial pre-tax losses incurred on new ventures amounted
to R3 877 499.
Headline earnings per share for the year of 6.8 cents compares to headline
earnings of 11.8 cents per share as per the forecast published in the Group`s
prospectus. Goodwill arising from prior period acquisitions of the business of
Kayreed and the shares of Davidsons Holding Company (Pty) Ltd was impaired
during the year. Impairment resulted from changes in general valuation
assumptions affecting financial markets and the decrease in headline earnings.
Goodwill was impaired by an amount of R119 233 190, which resulted in a loss of
R99 068 869. Headline earnings amounted to R20 161 004 compared to R34 885 000
in the prospectus.
Management pursued the strategy of expanding the KayDav footprint through the
successful launching of two new Davidson`s stores in Pretoria and Johannesburg.
PROSPECTS
Castle Timbers commenced operations during the latter half of 2008. This
business, whilst timber related, is a new venture for KayDav in that it focuses
on solid wood products as opposed to our traditional wood-based panels.
The new Davidson`s stores are trading profitably while Castle Timbers has
reached breakeven turnover. These ventures gained market share for the Group
during the year under review. The outlook for the foreseeable future remains
uncertain. Management is of the opinion that current conditions will persist
throughout the 2009 year with some improvement in 2010.
EXPRESSION OF INTEREST TO ACQUIRE THE GROUP`S EXISTING OPERATIONS
A cautionary announcement relating to the above expression of interest was
released on SENS on 28 January 2009 and renewed on 12 March 2009.
DIVIDENDS
No dividends were declared during the year ended 31 December 2008.
BASIS OF PREPARATION
These financial statements have been prepared in accordance with International
Financial Reporting Standards, the requirements of IAS 34 and in compliance with
the JSE Listings Requirements and the Companies Act of South Africa, 1973.
The accounting policies applied in preparing these financial statements are
consistent with those presented in the annual financial statements for the
period to December 2007.
The consolidated financial statements have been audited by the company`s
auditors, PKF (Jhb) Inc whose unqualified audit report is available for
inspection at the company`s registered office.
APPRECIATION
The board extends its appreciation to our management and staff for their
contribution to the Group`s achievements. We also thank our customers and
suppliers for their continued support.
On behalf of the board
I H Stern G F Davidson
Chairman Chief Executive Officer 17 March 2009
Corporate information
Executive Directors: G F Davidson (CEO), G Davidson, M Slier (CFO), J Katz
Non-executive Directors: I H Stern (Chairman), J Hertz
Registration Number: 2006/038698/06
Registered Address: 105 Bamboesvlei Road, Ottery, 7800
Postal Address: PO Box 272, Ottery, 7808
Telephone: 021 704 7060 Facsimile: 021 704 2082
Company Secretary: Probity Business Services (Pty) Ltd
Transfer Secretaries: Link Market Services South Africa (Pty) Ltd
Auditors: PKF (Jhb)Inc
Sponsor
Java Capital (Proprietary) Limited
Date: 17/03/2009 16:59:49 Produced by the JSE SENS Department.
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