| Mon 20 Apr 2009, 7:05 | | BWI - B & W Instrumentation and Electrical - Unaudited Consolidated Interim |
|
BWI
BWI
BWI - B & W Instrumentation and Electrical - Unaudited Consolidated Interim
Results for the Six Months Ended 28 February 2009
B & W Instrumentation and Electrical Limited
Incorporated in the Republic of South Africa
(Registration number 2001/008548/06)
Share code: BWI & ISIN: ZAE000098687
("B&W" or "the company" or "the group")
UNAUDITED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2009
- HIGHLIGHTS
- Revenue up 23.6%
- NPAT up 21.4%
- EPS up 21.5%
- Interim dividend declared up 25%
- Cash positive R106.3 million
CONSOLIDATED BALANCE SHEET
Unaudited Audited
28 February 31 August
2009 2008
R`000 R`000
ASSETS
Non-current assets 12 904 10 561
Property, plant and equipment 12 904 10 561
Current assets 284 072 203 185
Inventories 6 027 4 690
Loans 111 940
Trade and other receivables 171 652 86 928
Cash and cash equivalents 106 282 110 627
Total assets 296 976 213 746
EQUITY AND LIABILITIES
Capital and reserves 136 068 111 779
Share capital 32 285 32 285
Retained income 103 627 79 494
Foreign currency translation reserve 156 -
Minority interest * *
Non-current liabilities 11 370 11 608
Deferred tax 11 370 11 608
Current liabilities 149 538 90 359
Loans 4 753 1 185
Current tax payable 13 001 18 130
Trade and other payables 131 784 71 044
Total equity and liabilities 296 976 213 746
Number of ordinary shares in issue 200 000 000 200 000 000
Net asset value per share (cents) 68.0 55.9
Net tangible asset value per share 68.0 55.9
(cents)
*Less than R 1 000
CONSOLIDATED INCOME STATEMENT
Unaudited Reviewed
six months to six months to
28 February 29 February
% 2009 2008
change R`000 R`000
Revenue 23.6 270 993 219 281
Cost of sale (211 267) (170 778)
Gross profit 23.1 59 726 48 503
Other income - 2 013
Operating costs (15 614) (13 937)
Operating profit 20.6 44 112 36 579
Investment revenue 4 770 3 303
Finance costs (58) (90)
Profit before taxation 22.7 48 824 39 792
Taxation (14 691) (11 686)
Profit after taxation 21.4 34 133 28 106
Attributable to:
Equity holders of the parent 34 133 28 106
Minority interest * *
Reconciliation of headline
earnings:
Loss on sale of fixed assets 236 166
Headline earnings attributable 21.6 34 369 28 272
to ordinary shareholders
Weighted average number of 200 000 000 200 000 000
ordinary shares
Earnings per share (cents) 21.5 17.1 14.1
Headline earnings per share 22.0 17.2 14.1
(cents)
Dividend per share paid 42.9 5.0 3.5
(cents)
*Less than R 1 000
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Foreign
currency
Share Share Distributable translation Minority Total
capital premium reserve reserve interest equity
R`000 R`000 R`000 R`000 R`000 R`000
Balance at 1 2 32 283 32 659 - - 64 944
September
2007
Net profit - - 28 106 - - 28 106
for the
period
Dividends - - (7 000) - - (7 000)
declared
Balance at 29 2 32 283 53 765 - - 86 050
February 2008
Balance at 1 2 32 283 53 765 - - 86 050
March 2008
Net profit - - 29 729 - * 29 729
for the
period
Dividends - - (4 000) - - (4 000)
declared
Balance at 31 2 32 283 79 494 - * 111 779
August 2008
Balance at 1 2 32 283 79 494 - * 111 779
September
2008
Net profit - - 34 133 - - 34 133
for the
period
Translation - - - 156 * 156
of foreign
entities
Dividends - - (10 000) - - (10 000)
declared
Balance at 28 2 32 283 103 627 156 * 136 068
February 2009
*Less than R
1 000
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Reviewed
six months to six months to
28 February 29 February
2009 2008
R`000 R`000
Cash flow from operating activities 4 766 29 933
Cash flow from investing activities 889 (651)
Cash flow from financing activities (10 000) 5 500
(Decrease)/Increase in cash and cash (4 345) 34 782
equivalents
Cash and cash equivalents at the 110 627 33 553
beginning of the period
Cash and cash equivalents at the end 106 282 68 335
of the period
COMMENTARY
Introduction
The directors of B&W are pleased to present the unaudited consolidated interim
results ("interim results") which, in view of the current global financial
climate, reflect commendable growth in revenue, profit, earnings per share
("EPS") and dividends.
Revenue increased to R271 million from the previous comparative period,
resulting in an increase in net profit after tax ("NPAT") and EPS of 21.4% and
21.5%, respectively.
During the interim period B&W secured a number of significant new contracts both
in South Africa and cross-border, which offset to an extent certain other
contracts on which execution had already begun but which have now been delayed
or had the original programme extended due to the current financial crisis. As a
result it is anticipated that target revenue and returns will be achieved for
the full financial year ending August 2009.
The new contracts, together with the revival of those that have been delayed,
are further anticipated to position B&W to achieve target revenue and returns
for the financial year to August 2010.
Basis of preparation
The accounting policies applied in the preparation of these unaudited condensed
interim financial statements, which are based on reasonable judgments and
estimates, are in accordance with International Financial Reporting Standards
("IFRS") and are consistent with those applied in the audited annual financial
statements for the previous year ended 31 August 2008. The condensed interim
financial statements as set out in this report have been prepared in terms of
IAS 34 - Interim Financial Reporting, the Companies Act, 1973 (Act 61 of 1973)
as amended, and the Listings Requirements of the JSE Limited.
The interim results have not been audited or reviewed by the group`s auditors.
Group profile
B&W is a leading provider of electrical and instrumentation ("E&I") services to
the oil & gas, industrial, utilities, mining, chemical and food & beverage
industries. Services include equipment procurement, project supervision,
installation, post-installation commissioning and ongoing maintenance.
Financial results
Revenue increased by 23.6% from the previous comparative period to R271 million.
Gross profit margins remained constant at 22% in the interim period. Operating
expenses amounted to R15.6 million, which equates to 5.8% of revenue (2008:
6.4%).
Together these factors resulted in NPAT of R34.1 million (2008: R28.1 million)
with EPS of 17.1 cents (2008: 14.1 cents).
In anticipation of the economic downturn, B&W has, for the past twelve months,
focused on debt collection in order to preserve its cash balance. The increase
in debtors` days which is currently being experienced as a result of economic
conditions and despite B&W`s client base comprising mainly blue-chip clients,
will therefore not materially hamper operations.
B&W has maintained a commendably positive cash balance, reflecting R106.3
million cash on hand at the end of the interim period despite operating cash
flow having been negatively affected by an increase in book debts. However,
additional measures have been implemented to improve the collection of
outstanding funds.
It is B&W`s policy to take forward cover on the Rand costs associated with US
Dollar-denominated contracts. Delays in a limited number of these contracts have
necessitated the extension of the forward cover contracts. While this will
ultimately have no effect on returns, the funding of such extensions has a
negative effect on cash flows in the interim.
Prospects
Despite the significant deterioration in market conditions during the interim
period due to the global financial meltdown, contracts with an aggregate value
of R272 million (2008: R214 million) were secured and additional work to the
value of R31.1 million was negotiated on existing contracts. 57% of new
contracts relate to projects outside of South Africa.
B&W is confident that it has a sufficiently strong order book to enable it to
grow organically, albeit at a more modest pace through 2009 and until August
2010, despite a number of projects having been postponed or cancelled. This is
further supported by a number of additional contracts identified by B&W in its
traditional markets that are likely to be awarded to the group.
During the period to August 2010, it is anticipated that tender margins will
come under pressure. Every effort will be made to maintain current levels by
increasing operational efficiencies.
One positive effect of weakened market conditions is an elimination of the
skills shortage, which just 12 months ago posed a barrier to growth. B&W is
therefore seizing the opportunity at present to recruit and incentivise
qualified staff to remain with the group once market conditions improve.
The depth of the market downturn and its duration, neither of which can be
estimated with any confidence at this stage, will determine prospects beyond
2010. However, there are certain markets (differentiated either by geography or
sector from B&W`s traditional markets) which will be less affected. B&W is
currently implementing contingency plans to access these markets.
Dividend policy
Company policy dictates the declaration of an annual dividend equating to 25% of
annual NPAT. In light of the excellent performance and cash-positive position,
it has been decided that an interim dividend of 2.5 cents per share (2008: 2.0
cents) be declared. From time to time the board of directors will consider
dividend cover based on B&W`s cash flow, gearing and capital requirements. The
dividend will be financed out of B&W`s free cash flow.
The salient dates for the dividend are as follows:
Last day to trade shares cum dividend Friday, 15 May 2009
Shares trade ex dividend Monday, 18 May 2009
Record date Friday, 22 May 2009
Payment date Monday, 25 May 2009
No share certificates may be dematerialised or rematerialised between Monday, 18
May 2009 and Friday, 22 May 2009, both dates inclusive.
Subsequent events
The directors are not aware of any material matter or circumstances arising
since the end of the interim period and up to the date of this report.
John Barrow Brian Harley
Chairman Managing Director
On behalf of the board.
20 April 2009
Directors: John Barrow (Chairman); Brian Harley (Managing Director); Danie Evert
(Financial Director); Johan Breedt; Tom Lombard; Ken Nel; Dean Nevay; Gary
Swanepoel; Sam Vilakazi; Wolf Wassermeier*^ ; Jimmy Oosthuizen*^; Unati
Mabandla*^.
*Non-executive director
^Independent
Registered office: 234 Alexandra Avenue, Midrand, 1685 (Private Bag X168,
Halfway House, 1685)
Designated Adviser: Merchantec (Proprietary) Limited
Transfer secretaries: Computershare Investor Services (Proprietary) Limited
70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
Company secretary: Master Business Associates VII (Proprietary) Limited
234 Alexandra Avenue, Midrand, 1685 (Private Bag X168, Halfway House, 1685)
Investor Relations: Envisage Investor & Corporate Relations
Date: 20/04/2009 07:05:02 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.
