| Mon 4 May 2009, 15:31 | | TWP - TWP Holdings Limited - Reviewed condensed consolidated results for the 12 |
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TWP
TWP
TWP - TWP Holdings Limited - Reviewed condensed consolidated results for the 12
months ended 28 February 2009
TWP Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 2003/025640/06
Share code: TWP ISIN: ZAE000110763
("TWP")
REVIEWED CONDENSED CONSOLIDATED RESULTS FOR THE 12 MONTHS ENDED 28 FEBRUARY 2009
Highlights
Turnover of R1 251m - up 77% Pre-tax profit of R169m - up 9%
Headline earnings of R119m - up 23%
Income statement
Group Group
Reviewed Audited
12 months 12 months
ended ended
28 February 29 February
R`000 2009 2008
Revenue 1,250,530 705,006
Cost of sales (744,065) (414,020)
Gross profit 506,465 290,986
Net operating expenses (345,840) (136,515)
Operating profit 160,625 154,471
Finance income 12,402 5,249
Finance costs (4,435) (5,019)
Profit before income taxes 168,592 154,701
Income tax expense (52,006) (44,943)
Net profit for the year 116,586 109,758
Net profit for the period attributable to
- Equity shareholders of the parent company 116,936 105,736
Minority shareholders (350) 4,022
Net profit for the year 116,586 109,758
cents cents
Basic and diluted earnings per share (cents) 100.06 102.20
Basic and diluted headline earnings per share
(cents) 102.23 93.82
Balance sheet
Group Group
Reviewed Audited
28 February 29 February
R`000 2009 2008
ASSETS
Non-current asset
Property, plant and equipment 104,182 37,588
Intangible assets (incl goodwill) 227,133 36,726
Available for sale financial assets 3,807 -
Loans to related companies 2 1,250
Deferred taxation 4,434 1,023
339,558 76,587
Current assets
Inventory 1,309 -
Trade and other receivables 275,585 173,883
Work in progress 80,192 61,850
Available for sale financial assets 4,013 51,261
Cash and cash equivalents 51,095 91,259
412,194 378,253
Total assets 751,752 454,840
SHAREHOLDERS` EQUITY
Share capital and premium 285,529 190,391
Other reserves (20,142) (14,987)
Retained earnings 271,529 154,593
536,916 329,997
Minority interest 48 1,769
536,964 331,766
LIABILITIES
Non-current liabilities
Deferred taxation 24,296 9,168
Long-term liabilities 15,275 4,609
39,571 13,777
Current liabilities
Trade and other payables 122,538 66,981
Deferred revenue - 283
Short-term portion of long-term liabilities 8,716 2,542
Bank overdraft 137 12,435
Taxation 43,826 27,056
175,217 109,297
Total equity and liabilities 751,752 454,840
Statement of changes in equity
Share
capital Other Retained Minority
R`000 and premium reserves earnings interest Total
Balance at
28 Feb 2007 100 - 48,857 475 49,432
Shares issued 181,748 - - - 181,748
Acquisitions and
formations 8,543 (15,445) - (2,793) (9,695)
Translation of foreign
subsidiaries - 458 - 65 523
Net profit for the
period - - 105,736 4,022 109,758
Balance at
29 February 2008 190,391 (14,987) 154,593 1,769 331,766
Share acquired for
share incentive
scheme (10,992) - - - (10,992)
Share incentive scheme
accrued - 2,007 - - 2,007
Shares issued on
acquisition of
subsidiaries 106,130 - - - 106,130
Disposal of
subsidiaries - - - (1,393) (1,393)
Translation of foreign
Operations - 155 - 22 177
Fair value loss on available-
for-sale financial
assets - (7,317) - - - (7,317)
Net profit for the
period - - 116,936 (350) 116,586
Balance at
28 February 2009 285,529 (20,142) 271,529 48 536,964
Cash flow statement
Group Group
Reviewed Audited
12 months 12 months
ended ended
28 February 29 February
R`000 2009 2008
Cash flow from operating activities 117,760 4,963
Cash flow from investing activities (124,183) (86,841)
Cash flow from financing activities (21,620) 161,861
cash and cash equivalents -
movement for the period (28,043) 79,983
Cash and cash equivalents - beginning
of period 78,824 (1,682)
Exchange differences on translation
of foreign operations 177 523
Cash and cash equivalents at end of period 50,958 78,824
Segmental information Inter- Total
South segment for the
African Australian Turkish elimin- 12 months
operations operations operations ations 28 Feb 2009
R`000 R`000 R`000 R`000 R`000
Geographical segments
Revenue 1,140,988 117,346 - (7,804) 1,250,350
Operating profit/
(loss) 165,568 (4,943) - - 160,625
Total assets 745,559 26,201 - (20,008) 751,752
Total liabilities (205,693) (29,098) - 20,003 (214,788)
Net assets 539,866 (2,897) - (5) 536,964
Capital expenditure (78,256) (14,629) - - (92,885)
Depreciation (27,976) (3,997) - - (31,973)
Inter- Total
South segment for the
African Australian Turkish elimin- 12 months
operations operations operations ations 29-Feb-08
R`000 R`000 R`000 R`000 R`000
Geographical segments
Revenue 656,729 47,958 6,842 (6,523) 705 006
Operating profit 150,715 4,244 (488) - 154 471
Total assets 438,612 27,344 7,664 (18,780) 454 840
Total liabilities (109,495) (24,337) (7,877) (18,635) (123,074)
Net assets 329 117 3,007 (213) (145) 331,766
Capital expenditure (25,193) (7,750) (139) - (33,082)
Depreciation (8,841) (861) - - (9,702)
Notes to the condensed consolidated financial statements
Basis of preparation
The condensed consolidated financial statements contained in this preliminary
report have been prepared on the historical cost basis, except for financial
instruments that are fair valued, in accordance with the group`s accounting
policies which are consistent with those adopted in the financial year ended
29 February 2008 and which are compliant with International Financial Reporting
Standards ("IFRS") and in accordance with the disclosure requirements of IAS
34: "Interim Financial Reporting", the South African Companies Act, 1973, as
amended, and the JSE Listings Requirements.
Audit review opinion
These financial results have been reviewed by the group`s auditors,
PricewaterhouseCoopers Inc., and their unqualified review opinion is available
for inspection at the company`s registered office.
Basic earnings per share, diluted earnings per share and headline earnings
per share are calculated as follows:
Reviewed Audited
12 months 12 months
28 February 29 February
2009 2008
Basic earnings per share
Basic earnings per share (cents) 100.06 102.20
is calculated based on a net profit of (R`000) 116,936 105,736
and a weighted average number
of shares outstanding of 116,861 103,459
Headline earnings per share
Headline earnings per share (cents) 102.23 93.82
is calculated based on a headline
profit of (R`000) 119,466 97,062
and a weighted average number of shares
outstanding of 116,861 103,459
Diluted basic earning per share
The company currently has no potential equity instruments with a dilutive
effect.
Reconciliation of basic and
headline earnings for the year:
Net profit for the period (R`000) 116,936 105,736
Loss/(profit) after tax on the disposal/
impairment of fixed assets 2,606 (123)
Profit after tax on the disposal of
investments (76) (8,551)
Headline earnings 119,466 97,062
Business acquisitions
The 100% acquisition of TPS.P Architects (Pty) Ltd, was finalised during
the first half of the year. The original purchase price for this transaction
amounted to R138 million, which would be partly settled by the issue of
4 125 352 new TWP Holdings Limited shares. The balance was paid in cash. The
purchase price that was used for accounting purposes under IFRS was R111.7
million (including transaction costs), which is lower as a result of the
downward movement in the TWP share price since the signing of the purchase
agreements. The purchase contract makes provision for certain additional
future payment/refunds on this purchase price, based on the level of profits
generated by this business.
The 100% acquisition of Matomo Projects (Pty) Ltd, which includes the
remaining 50% of TWP Matomo Projects (Pty) Ltd, was finalised during the
second half of the year. This acquisition results in Matomo Projects (Pty) Ltd
and TWP Matomo Projects (Pty) Ltd becoming wholly-owned subsidiaries of the
TWP Holdings group. The original purchase price for this transaction amounted
to R139.4 million, which would be partly settled by the issue of 2 346 140 new
TWP Holdings Limited shares. The purchase price that was used for accounting
purposes under IFRS was R109.7 million (including transaction costs), which
is lower as a result of the downward movement in the TWP share price since the
signing of the purchase agreements.
The increase in the carrying value of intangible assets (including goodwill)
per the balance sheet is directly related to these transactions and is based
on provisional purchase price allocations.
Disposal of businesses
The group disposed of its entire interests of 100% of the shareholding in TWP
Eurasia Investments and in two 51% directly and indirectly owned subsidiaries
(SA Turkey Investments and TWP Eurasia) with effect from 1 March 2008. This
transaction resulted in the group recovering its investment, with an immaterial
profit being recognised in the current period.
Financial results and review of operations
Financial results
Revenue increased by 77% to R1 251m compared to the previous financial year.
While this was encouraging and exceeded forecast a corresponding increase
in pre-tax profit was not achieved. This in part was due to IFRS accounting
rules which resulted in a write down of intangible assets associated with
acquisitions throughout the year of R20.3m, without which a comparable
pre- tax profit of R 189m, 22% up on last year would have been achieved.
Headline earnings increased by 23% to R119m and the balance sheet remains
strong with net assets of R537m. The group as a whole continues to carry
minimal debt and this position is not anticipated to change in the near future.
Review of operations
While the majority of the underlying business units performed well the results
were impacted in three areas. Firstly the wholly owned retreatment plant in
Rustenburg experienced start up delays while the front end was modified to
accept the highly variable feedstock. This will not have an effect on the
overall profitability of this venture but did affect cash flow. The plant is
now running at close to full capacity and generating R4m of income per month.
Secondly TWP Australia was affected by the sudden and severe downturn in
business prospects in the region and the cancellation of its main contracts.
The majority of the write down has been taken in this year and the operation
has been downscaled. Thirdly TRG, the group`s granite quarry, has experienced
delays due to the unseasonal rainfall and associated production losses. In this
instance the group is considering the sale of this business, either in whole
or in part, as a going concern.
During the course of the second half of the year the group was restructured
largely into a single business unit. This has gone well and the benefits of
this should be seen in the 2010 financial year.
Dividends
The board has declared a maiden dividend for the year ended 28 February 2009 of
10 cents per share to all shareholders holding shares as of 26th June 2009,
payable on 29th June 2009. While the 2007 pre-listing statement specifically
stated that no dividends would be considered for two years, the board is of the
opinion that the balance sheet is sufficiently robust as to allow the payment of
a dividend and fund ongoing capital requirements. In compliance with Strate, the
salient dates are as follows:
Last day to trade cum dividend Friday, 19 June 2009
Shares commence trading ex dividend Monday, 22 June 2009
Record date Friday, 26 June 2009
Payment date of dividend Monday, 29 June 2009
Shares may not be rematerialised or dematerialised from Monday, 22 June
2009
to Friday, 26 June 2009, both days inclusive.
Prospects
Notwithstanding the somewhat disappointing underperformance in the three areas
noted above the board is confident that the situation can be reversed in the
short term. While business conditions on a global scale are difficult the
group has diversified so as to spread risk and core business operations
continue to perform. In the last few months there has been a slow, but notable,
improvement in business sentiment and the group has solid prospects on a go
forward basis. While 2010 will no doubt be a period of consolidation TWPs
position as the leading EPCM group in Africa will ensure consistent and solid
growth into the future.
On behalf of the board
E Dube
Chairman
N Townshend
Chief executive officer
S Dewsbery
Chief financial officer 4 May 2009
TWP Holdings Limited
Reg number: 2003/025640/06
Share code: TWP
ISIN: ZAE000110763
Directors
E Dube *(Chairman)
A Lawless *
H Makupula *
N Townshend (CEO)
S Dewsbery (CFO)
*Non-executive
Registered address: The Atrium, 7th Avenue & Rustenburg Road, Melville 2092.
Postal address: PO Box 61232, Marshalltown 2107.
Company Secretary T Liebenberg, Legal Information Services (Pty) Ltd. Reg number
2008/028843/07. Address: Cnr Republic & Main Ave, Ferndale, Randburg. Tel +27
(11) 326-1330 Fax +27 (11) 787-5643. Email:Theunis@lisinfo.co.za
Transfer secretaries: Computershare Investor Services (Pty) Ltd., 70 Marshall
Street, Johannesburg 2001. PO Box 61051 Marshalltown 2107. Tel +27 (11) 370-
5000.
Sponsor: Nedbank Capital. Auditors: PricewaterhouseCoopers Inc. Bankers: FNB
Ltd. Attorneys: Tli Incorporated.
www.twp.co.za
Date: 04/05/2009 15:31:02 Produced by the JSE SENS Department.
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