| Mon 20 Apr 2009, 15:00 | | SPO - Set Point - Group Unaudited Results for the six months ended 28 February |
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SPO
SPO
SPO - Set Point - Group Unaudited Results for the six months ended 28 February
2009
Set Point Group (formerly Set Point Technology Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 1996/014334/06)
Share code: SPO ISIN: 000132601
("Set Point" of "the Company" or "the Group")
Set Point Group Unaudited Results for the six months ended 28 February 2009
HIGHLIGHTS
Pre-tax profit R32,1 million
Headline earnings per share 6,4 cents
Dividend per share 2,0 cents
Strong balance sheet
Condensed consolidated income statements
Unaudited Unaudited Audited
at 28 at 29 at 31
February February August
2009 2008 2008
R`000 R`000 R`000
Revenue 182 304 177 095 382 547
Cost of sales (96 339) (87 237) (201 958)
Gross profit 85 965 89 858 180 589
Selling and administration (54 391) (56 801) (106 380)
expenses
Other operating income 976 783 2 470
Other operating expenses (451) (1 082) (2 117)
(Loss)/profit on disposal of (121) 261 85
plant and equipment
Foreign exchange transaction (330) (802) (1 031)
losses
Amortisation of intangible - (541) (1 171)
assets
Operating profit 32 099 32 758 74 562
Finance income 1 404 2 607 5 109
Finance costs (1 388) (2 634) (4 419)
Profit before taxation 32 115 32 731 75 252
Taxation (10 712) (10 946) (24 668)
Profit after taxation 21 403 21 785 50 584
Attributable to:
Equity holders of Set Point 21 403 21 741 50 544
Minority interests - 44 40
21 403 21 785 50 584
Shares in issue
Weighted average number of 336 895 342 449 342 753
ordinary shares in issue
(000`s)
Fully diluted weighted 340 168 352 824 347 165
average number of ordinary
shares in issue (000`s)
Basic earnings per share 6.4 6.3 14.7
(cents)
Diluted basic earnings per 6.4 6.2 14.7
share (cents)
Headline earnings per share 6.4 6.3 14.7
(cents)
Diluted headline earnings per 6.4 6.1 14.7
share (cents)
Reconciliation of headline earnings:
Earnings 21 403 21 741 50 544
Adjusted for: 87 (189) (61)
- Loss/(profit) on disposal 121 (261) (85)
of plant and equipment
- Taxation effect (34) 72 24
Headline earnings 21 490 21 552 50 483
Condensed consolidated statements of changes in equity
Unaudited Unaudited Audited
six months six months year
ended ended ended
28 February 29 February 31 August
2009 2008 2008
R`000 R`000 R`000
Opening balances 155 144 117 541 117 541
Recognised income and expense
Profit for the period 21 403 21 741 50 544
attributable to equity
holders of Set Point
Transactions with shareholders
Share based payments 386 31 728
Dividends (10 300) (6 856) (13 670)
Treasury shares (5 597) 170 170
(purchased)/issued
Shares issued 129 131 266
Acquisition of minority - - (435)
interests
Equity attributable to equity 161 165 132 758 155 144
holders of Set Point
Minority interests - 217 -
Total equity 161 165 132 975 155 144
Condensed consolidated balance sheets
Unaudited Unaudited Audited
at 28 at 29 at 31
February February August
2009 2008 2008
R`000 R`000 R`000
Assets
Non-current assets 83 315 76 808 83 808
Plant and equipment 39 877 31 817 37 044
Goodwill 40 099 40 099 40 099
Intangible assets - 630 -
Deferred taxation 3 339 4 262 6 665
Current assets 147 795 154 765 186 302
Inventories 76 952 58 736 67 890
Trade and other receivables 56 808 68 555 66 848
Cash and cash equivalents 14 035 27 474 51 564
Total assets 231 110 231 573 270 110
Equity and Liabilities
Total Equity 161 165 132 975 155 144
Non-current liabilities 17 336 14 524 16 667
Purchase consideration - - 336
payable
Interest bearing liabilities 13 283 10 333 12 011
Provisions and accruals 4 053 4 191 4 320
Current liabilities 52 609 84 074 98 299
Interest bearing liabilities 3 224 2 867 4 458
Trade and other payables 46 632 62 976 69 013
Taxation liability 2 753 18 231 24 828
Total equity and liabilities 231 110 231 573 270 110
Shares in issue (net of 337 047 342 816 343 131
treasury shares) (000`s)
Net asset value per share 47.8 38.7 45.2
(cents)
Condensed consolidated cash flow statements
Unaudited Unaudited Audited
six months six months year
ended ended ended
28 February 29 February 31 August
2009 2008 2008
R`000 R`000 R`000
Cash flows from operating (24 466) 12 643 42 380
activities
Cash generated by operations 15 219 20 644 65 553
Finance income 1 404 2 607 5 109
Finance costs (1 388) (2 634) (4 038)
Taxation paid (29 461) -793 (10 321)
Dividends paid - ordinary (10 240) (6 856) (13 598)
shareholders
- minority shareholders - (325) (325)
Cash flows from investing (7 283) (7 628) (16 639)
activities
Capital expenditure on plant (8 362) (7 920) (17 572)
and equipment
Disposals of plant and 1 079 292 933
equipment
Cash flows from financing (5 780) (14 234) (10 870)
activities
Proceeds from issue of shares 129 131 266
Shares (purchased)/issued by
treasury (5 597) 170 170
Payment to vendors in respect (312) (11 321) 11 321)
of purchase consideration
payable
Payment in respect of long (39) (34) (74)
term provisions
Payment of interest bearing (4 115) (6 600) (10 626)
debt
Interest bearing debt raised 4 154 3 420 10 715
Cash
(Utilised)/generated during (37 529) (9 219) 14 871
the period
At beginning of period 51 564 36 693 36 693
At end of period 14 035 27 474 51 564
Condensed segmental information
Segment Segment Capital
assets liabil- expen- Deprecia-
ities diture tion
R`000 R`000 R`000 R`000
Analytical Services 55 329 24 893 5 412 2 312
Fluid Handling 104 197 21 913 1 848 783
Mining Services 63 325 8 774 607 808
Central and Shared 3 603 14 391 495 427
Services
Consolidation entries, 1 317 (26) - -
adjustments and intra
group elimination
227 771 69 945 8 362 4 330
Condensed segmental information (cont)
Segment revenue Segment operating
profit
R`000 % R`000 %
Analytical Services 59 756 32.8 19 908 62
Fluid Handling 86 671 47.5 17 137 53.4
Mining Services 35 877 19.7 2 321 7.2
Central and Shared - - (7 253) (22.6)
Services
Consolidation entries, - - (14) -
adjustments and intra
group elimination
182 304 100 32 099 100
PROFILE
Set Point is an industrial product and services group which operates through
three divisions - Analytical Services, Fluid Handling and Mining Services.
Set Point`s ordinary shares have been listed on the JSE since 1997 and are
quoted in the Business Support Services sub-sector.
FINANCIAL RESULTS
Headline earnings increased marginally to 6,4 cents on a lower weighted
average number of shares in issue. Revenue increased 3% to R182,3 million.
Gross margin declined by 3,5%, but this was largely offset by cost reductions,
with the effect that operating profit was largely unchanged at R32,1 million.
The Group`s balance sheet remains strong with minimal borrowings net of cash
balances. Inventories were higher than budgeted at the reporting date but are
expected to reduce in line with the Group`s normal ratios by the financial
year end.
Dividends have been maintained at 2 cents per share.
REVIEW OF OPERATIONS
The Analytical Services division operates through specialised laboratories
offering expert chemical analysis for the condition monitoring of fluids,
mainly oil, and ore body analysis for the precious metals mining and
exploration industry. Strong volume growth in oil samples for condition
monitoring as customers invest more in preventative equipment maintenance has
offset a decline in mineral samples as exploration companies curtailed their
activities. Divisional revenue increased 5% and operating profit decreased
1,3%.
The Fluid Handling division which supplies pumps, valves, couplings and flow
meters to the mining and petrochemical industries has sustained revenues in a
competitive environment at the cost of a slight reduction in operating
margins. In particular the dewatering division has had a successful first half
with an increase in capacity utilisation and profitability. Although
divisional revenue increased 6% overall operating profit declined by 4%.
The Mining Services division consists of the manufacture and repair of hopper
wheels, skip and cage guides and rollers as well as the production and supply
of reference materials for laboratories in the mining, exploration and assay
industries. The significant downturn in these industries, particularly in
platinum mining and exploration, has had a direct and disappointing impact on
the revenues and profitability of the division. Management is taking
appropriate action in the light of the downturn and has mitigated the impact
through ongoing inventory and cost reduction and improving operating
efficiencies. Divisional revenue declined 8% and overall operating profit
declined by 29%.
BASIS OF PREPARATION
The condensed interim group financial statements have been prepared in
accordance with the recognition and measurement criteria of International
Financial Reporting Standards (IFRS) and interpretation statements in issue
and effective at 28 February 2009, and are in compliance with the presentation
and disclosure requirements of IAS 34: Interim Financial Reporting, the JSE
Limited`s Listing requirements and in a manner required by the South African
Companies Act. The accounting policies applied are consistent with those
followed in the preparation of the consolidated annual financial statements
for the year ended 31 August 2008.
DIRECTORATE
Paul Nkuna, the CEO of Mineworkers Investment Company (Pty) Limited (MIC)
resigned from the board on 2 February 2009. We thank him for his valuable
contribution during his period on the board.
Cynthia Mapaure, the CFO of MIC, joined the board as a non-executive director
on 3 February 2009. We welcome her and look forward to her participation.
CHANGE OF NAME
Following the passing of a special resolution at the annual general meeting
held on 2 February 2009 the Company has changed its name to Set Point Group
Limited.
DIVIDENDS
Notice is hereby given that an interim dividend number 9 of 2 cents per share
has been declared in respect of the financial year ending on 31 August 2009.
This dividend will be paid out of profits as determined by the directors, to
shareholders recorded as such in the register at the close of business on the
record date, Friday 29 May 2009. The last date to trade and to participate in
the dividend is Friday, 22 May 2009. Shares will commence to trade ex-dividend
from Monday, 25 May 2009.
The important dates pertaining to this dividend for shareholders trading on
the JSE Limited are as follows:
Last day to trade "cum" dividend Friday, 22 May 2009
Shares trade "ex" dividend from Monday, 25 May 2009
Record date Friday, 29 May 2009
Payment date Monday, 1 June 2009
Share certificates may not be dematerialised or re-materialised between
Monday, 25 May 2009 and Friday, 29 May 2009 both days inclusive.
PROSPECTS
The economic turmoil prevailing in global markets has affected the Group`s
operations. The Group is taking appropriate steps to limit the impact of these
conditions and to remain well placed to take advantage of the eventual
turnaround in the economy and a recovery of commodity prices.
For and on behalf of the board
Christopher Seabrooke Graeme Horsfield
Chairman Chief Executive Officer
20 April 2009
Directors: CS Seabrooke* (Chairman), MJ Smith* (Deputy Chairman), GJ Horsfield
(Chief Executive Officer), MD Evers# (Chief Financial Officer), DC Seaton*+,
BH Kent*+, JM Judin*+, CN Mapaure*, GE Nel*+, TM Skwambane*+, CP Coutts-
Trotter *(Alternate)
(* Non-executive) (+ Independent) (# British) ( Zimbabwean)
Company Secretary: MD Evers
Registered Office: 30 Electron Avenue, Isando, 1601
(PO Box 856, Isando 1600)
Transfer Secretaries: Computershare Investor Services (Pty) Limited
(Registration number: 1958/003546/06)
Ground Floor, 70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown 2107)
Sponsor: Investec Bank Limited
(Registration number: 1969/004763/06)
20 April 2009
Date: 20/04/2009 15:00:04 Produced by the JSE SENS Department.
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