| Tue 19 May 2009, 7:59 | | SAN - Sanyati Holdings - Audited Results For The Year Ended 28 February 2009 |
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SAN - Sanyati Holdings - Audited Results For The Year Ended 28 February 2009
Sanyati Holdings Limited
("Sanyati" or "the company")
(Registration number: 1988/002538/06)
Share code: SAN ISIN: ZAE000081055
AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2009
- Cash on hand UP 1 443%
- Net tangible asset value UP 36%
- Fully Diluted HEPS of 19,68 cents UP 31%
- Revenue UP 54%
CONSOLIDATED BALANCE SHEET
As at As at
28 February 29 February
2009 2008
R`000 R`000
Audited Audited
ASSETS
Non-current assets 683 153 650 733
Property, plant and equipment 205 187 150 770
Investments 412 2 242
Deferred taxation 13 147 -
Goodwill 464 407 497 721
Current assets 566 009 447 278
Inventories 11 150 17 001
Development property 59 239 27 262
Trade and other receivables 345 955 372 528
Cash resources 60 222 17 685
Gross amount due from customers 89 443 12 802
Total assets 1 249 162 1 098 011
EQUITY AND LIABILITIES
Capital and reserves 709 530 638 830
Share capital and premium 547 869 529 879
Share-based payment reserve 7 478 2 353
Fair value reserve - 3 111
Accumulated profits 154 183 103 487
Non-current liabilities 64 902 112 374
Deferred taxation 23 338 22 292
Vendor liabilities 8 586 21 957
Interest-bearing borrowings 32 978 68 125
Current liabilities 474 730 346 807
Trade and other payables 213 732 175 484
Bank overdraft 25 786 15 453
Current portion of vendor liabilities 17 530 58 887
Gross amount due to customers 89 276 41 505
Current portion of interest-bearing borrowings 95 825 24 959
Provisions 1 460 12 472
Taxation 31 121 18 047
Total equity and liabilities 1 249 162 1 098 011
Number of ordinary shares in issue 399 975 305 844
Weighted average number of shares 357 063 278 515
Net asset value (cents) 198,71 229,37
Net tangible asset value (cents) 68,65 50,66
CONSOLIDATED INCOME STATEMENT
As at As at
28 February 29 February
2009 2008
R`000 R`000
Audited Audited
Revenue 1 543 041 1 002 458
Gross profit 247 656 213 189
Other income 928 3 789
Administration and operating expenses (144 250) (124 500)
EBITDA 104 334 92 478
Depreciation (15 826) (9 575)
Profit before interest and taxation 88 508 82 903
Net interest received/(paid) (7 357) 2 590
Profit before taxation 81 151 85 493
Taxation (33 566) (26 078)
Net profit for the period 47 585 59 415
Profit attributable to shareholders 47 585 59 415
Weighted average shares 357 063 278 515
Earnings per share (cents) 13,33 21,33
Headline earnings per share (cents) 23,33 22,31
Dividend per share (cents) - -
Diluted earnings per share(cents) 12,04 14,84
Fully diluted earnings per share (cents) 11,25 13,90
Diluted headline earnings per share (cents) 21,08 15,52
Fully diluted headline earnings
per share (cents) 19,68 14,53
CONSOLIDATED CASH FLOW STATEMENT
As at As at
28 February 29 February
2009 2008
R`000 R`000
Audited Audited
Cash generated/(utilised) by operations
Cash generated/(utilised) from operations 144 027 (41 324)
Interest received 12 068 7 821
Interest paid (19 425) (5 231)
Taxation paid (31 380) (5 699)
Net cash flows from operating activities 105 290 (44 433)
Cash flows from investing activities
Purchase of property, plant and equipment (72 648) (122 571)
Proceeds from sale of property,
plant and equipment 2 359 5 605
Purchase of investment property - (885)
Additions of goodwill at net amount - (89 961)
Less defered tax purchased - 2 640
Purchase/(Sale) of investments (1 830) (1 922)
Net cash flow from investing activities (72 119) (207 094)
Cash flows from financing activities
Issue of shares net of expenses - 103 083
Decrease in shareholders` loans - -
Increase in interest-bearing borrowings 35 719 80 812
Increase in short-term liabilities - -
Increase/(decrease) in vendor liability (36 686) 51 644
Net cash flows from financing activities (967) 235 539
Net increase/(decrease) in cash
and cash equivalents 32 204 (15 988)
Cash and cash equivalents at
beginning of year 2 232 18 220
Cash and cash equivalents at end of year 34 436 2 232
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Fair value Share Treasury Accumulated
reserve premium shares profits
R`000 R`000 R`000 R`000
Balance at 28 February 2007 3 111 52 743 - 44 072
Profit for the year - - - 59 415
Share Issue - 161 373 - -
Treasury shares
consolidation - 21 000 (21 000) -
Share adjustments - - - -
Balance at 29 February 2008 3 111 235 116 (21 000) 103 487
Share Issues and adjustments - 256 858 - -
Treasury shares
consolidation 3 000 (3 000)
Transfer of fair
value reserve (3 111) 3 111
Profit for the year 47 585
Balance at 28 February 2009 - 494 974 (24 000) 154 183
Share-based
Shares to payment Share
be issued reserve capital Total
R`000 R`000 R`000 R`000
Balance at 28 February 2007 - - 2 99 928
Profit for the year - - - 59 415
Share Issue - - 1 161 374
Treasury shares
consolidation - - - -
Share adjustments 315 760 2 353 - 318 113
Balance at 29 February
2008 315 760 2 353 3 638 830
Share Issues and
adjustments (238 869) 5 125 1 23 115
Treasury shares
consolidation -
Transfer of fair value reserve -
Profit for the year 47 585
Balance at 28 February
2009 76 891 7 478 4 709 530
SEGMENTAL REPORT
Civils Civils
2009 Building Coastal Inland Roads
Revenue
Segment revenue 234 049 576 824 283 413 163 721
Inter-segment sales (994) (1 354) - (23 251)
Sales to external customers 233 055 575 470 283 413 140 470
Results
Gross profit 50 267 60 055 58 514 11 007
PBIT (6 491) 30 034 32 462 (763)
Finance costs (3 236) 1 060 2 007 (672)
PBT (9 727) 31 094 34 469 (1 435)
Taxation (1 148) (4 699) - (1 711)
Profit for the year (10 875) 26 395 34 469 (3 146)
Depreciation 4 631 2 607 2 415 969
Capital expenditure 21 079 5 017 5 455 11 713
Segment assets 209 860 252 403 214 709 66 263
Segment liabilities 211 036 216 366 161 696 101 156
Inter-
Engineering Holding company and
2009 Central company eliminations Total
Revenue
Segment revenue 310 633 - (25 599) 1 543 041
Inter-segment sales - - 25 599 -
Sales to external
customers 310 633 - - 1 543 041
Results
Gross profit 63 589 - 4 224 247 656
PBIT 43 317 11 342 (21 393) 88 508
Finance costs (3 239) (7 050) 3 773 (7 357)
PBT 40 078 4 292 (17 620) 81 151
Taxation (6 985) (1 548) (17 475) (33 566)
Profit for the year 33 093 2 744 (35 095) 47 585
Depreciation 3 314 1 873 17 15 826
Capital expenditure 24 461 4 895 28 72 648
Segment assets 230 623 717 660 (442 356) 1 249 162
Segment liabilities 110 983 99 246 (360 851) 539 632
Civils Civils
2008 Building Coastal Inland Roads
Revenue
Segment revenue 187 028 503 256 221 770 176 201
Inter-segment sales (2 501) (82 265) (3 138)
Sales to external
customers 184 527 420 991 221 770 173 063
Results
Gross profit 54 958 74 141 43 235 41 135
PBIT 15 137 37 231 27 707 12 885
Finance costs/(income) (344) 204 - (283)
PBT 15 481 37 027 27 707 13 168
Taxation (4 406) (10 591) (7 974) (3 742)
Profit for the year 11 075 26 436 19 733 9 426
Depreciation 4 584 2 846 932 589
Capital expenditure 20 658 71 072 11 071 16 308
Segment assets 196 459 312 664 97 812 103 238
Segment liabilities (180 579) (210 336) (55 678) (100 055)
Inter-
Holding company and
2008 company eliminations Total
Revenue
Segment revenue 2 107 (87 904) 1 002 458
Inter-segment sales 87 904
Sales to external customers 2 107 1 002 458
Results
Gross profit 2 107 (2 387) 213 189
PBIT (7 634) (2 423) 82 903
Finance costs/(income) (2 167) (2 590)
PBT (5 467) (2 423) 85 493
Taxation 635 (26 078)
Profit for the year (4 832) (2 423) 59 415
Depreciation 624 9 575
Capital expenditure 4 306 123 415
Segment assets 659 472 (271 634) 1 098 011
Segment liabilities (87 469) 174 936 (459 181)
COMMENTARY TO FINANCIAL RESULTS
OVERVIEW
The group posted another set of strong results, despite the economic turmoil
experienced globally. Sanyati posted revenue of R1,5 billion (2008:
R1,0 billion), representing a very satisfactory growth of 54%. The increase in
revenue is mainly as a result of the Engineering Central division being
consolidated into the group for a full twelve months, for the first time. When
excluded, the remaining Sanyati divisions contributed a strong organic growth
of approximately 30% for the period under review. This result translated into a
13% improvement in earnings before interest, taxation, depreciation and
amortisation (EBITDA) to R104,3 million (2008: R92,5 million). The reasons for
the strong EBITDA results are twofold: the first-time consolidation of the
Engineering Central division for 12 months and the very good performance from
the Civil Inland division and more particularly the concrete sliding division.
In certain geographical areas the results were impacted by unusual high
rainfall, which led to slight delays on certain projects. The EBITDA margin
declined to 6,8% compared to 9,2% a year ago. Earnings per share decreased by
38% to 13,3 cents (2008: 21,3 cents) and headline earnings per share increased
by 4,5% to 23,3 cents (2008: 22,3 cents). The decline in earnings per share is
directly related to the impairment of goodwill in an amount of R35,7 million.
When excluding the goodwill impairment, earnings per share increased by 9,3%
for the year.
No dividends have been declared for the financial year-end, in line with our
current group dividend policy.
DIVISIONAL PERFORMANCE
Sanyati Civils Coastal
This division posted revenue of R575 million (2008: R421 million), a 36%
increase and gross profit of R60 million from R74 million in 2008, a decrease
of 19%. This is as a result of the loss of R17,2 million on a single contract.
This contract was initially part of the Gem acquisition and subsequent to the
acquisition, incorporated into Civils Coastal. The division`s gross operating
margin remains strong at 11% going forward and we anticipate a strong
performance from this division in the year ahead.
Sanyati Civils Inland
The division contributed R283 million (2008: R222 million), a 27% increase in
revenue to the group and a gross profit of R58 million from R43 million in
2008, translating into a gross margin of 21%. Although this division will again
contribute significantly to the group in 2010, we do not anticipate margins as
high as previously achieved. The division`s continued involvement with some of
the flagship projects in Gauteng continues to reduce its reliance on the
previous predominately private client base.
Sanyati Engineering Central
The division recorded revenue of R311 million (2008: Nil) and gross profit of
R64 million (2008: Nil). The gross margin of 20% in 2009 is anticipated to be
slightly lower for the 2010, financial year. Still subject to profit warranties
until February 2010 this division continues to grow and expand into new
operational areas. The division`s involvement in niche markets has resulted in
its high levels of profitability.
Sanyati Building
Revenue and gross profit for the year ended 28 February 2009 were R233 million
(2008: R185 million), a 26% increase in revenue, and R50 million (2008: R55
million), respectively. The contribution from building activities is expected
to further decline in the year ahead due to current economic circumstances and
we do not anticipate a repeat in the gross margin of 21% for the year ahead.
Sanyati Roads
This division posted revenue of R141 million (2008: R173 million), an 18%
decrease in revenue. Gross profit posted is R11 million from R41 million in
2008. The division`s gross margin remains under pressure at 7%. With an
increase in work load into the 2010 financial year we anticipate a recovery to
previous levels of profitability.
FINANCIAL REVIEW
Capital expenditure
The group invested R72,6 million (2008: R122,6 million) in capital assets
during the year. This capital expenditure of R72,6 million was mainly
expansionary in nature, made up of R21,1 million at Sanyati Building (mainly
piling operations), R11,7 million at Sanyati Roads and R24,5 million at
Engineering Central. The balance of the capital expenditure relates to minor
assets purchased for the other divisions as well as an increased investment in
the group`s information technology.
Balance sheet
Sanyati continues to boast a strong balance sheet and we are very comfortable
with the group`s capital position as at 28 February 2009.
Trade accounts receivable, net of provisions of R345,9 million at year-end, are
R26,6 million lower than the prior year. The average days outstanding in
debtors at year-end are 58 days, compared to 67 days in the prior year but
above the target of 50 days. This was as a result of improved collection
procedures as well as a movement away from the previous client base.
Improved cash collection procedures should assure a further reduction to
targeted levels.
Credit control across the group remains good and no significant write-offs have
been experienced in the year under review. The group has a bad debt provision
of R13,9 million that is been carried forward to the new financial year.
Interest-bearing borrowings comprise of the group overdraft facility, amounts
due to vendors as well as amounts owed to commercial financial institutions.
The group is carrying interest-bearing debt of R180,7 million (2008:
R189,4 million). R154,6 million of this debt is owed to banking institutions
for asset based finance agreements as well as development bonds over various
commercial and industrial properties currently under development. The net debt
to equity ratio at year-end is 25,5%.
Cash flows
Cash operating profit from continuing operations increased to R144 million from
a negative R41,3 million in 2008. Accounts receivable provided cash of R27
million for the year with only R0,5 million of debtors having been written off
in the current year and days outstanding at year-end amounting to 58 days.
After interest and taxation outflows, there was a net cash inflow of R105,3
million.
The outflow in investing activities of R72,1 million is in line with the
forecast spend. Prior to financing activities, the Group generated net cash
inflows of R33,1 million.
Financing activities realised cash inflows of R1 million, sourced via the
increase in interest-bearing borrowings of R35,7 million, offset by the
payments made to vendors, leaving the group cash positive at year-end to the
extent of R34,4 million. The group is well placed to continue funding any
future capital commitments or potential acquisitions.
Prospects
Looking towards the future, we have a secured forward pipeline of work of R2,4
billion with approximately R1,3 billion pending award at present.
Included in this amount of confirmed work is R2,1 billion that will be executed
during the 2010 financial year.
"The greater South African economy has benefited tremendously from the spurt of
infrastructure growth brought about by the 2010 World Cup Soccer. Government`s
well timed commitment to ongoing and substantial infrastructural spend should
mean that these benefits will continue to be felt well beyond 2010. Sanyati is
well placed to benefit from the roads and general infrastructural improvement
spend that is expected to continue throughout the country over the next three
to four years. Our exposure to 2010 World Cup Soccer stadia and related
infrastructure improvement programs is being replaced with a range of equally
attractive projects awarded by Government agencies and municipalities. Sanyati,
as a Group, is not dependent on one specialised area of construction. Through
thoughtful acquisitions we have assembled a national footprint and a
diversified product offering enabling Sanyati to easily be part of any "build"
within South Africa." concludes Jackson.
Sanyati is also well placed to benefit from roads and telecommunications
infrastructure development over the next three to four years. Our exposure to
2010 World Cup Soccer stadia, although lucrative for the company, is being
replaced with equally lucrative and large projects awarded from the likes of
SANRAL, ACSA and the private sector. Sanyati, as a group, is not dependent on
one specialised area of construction. Through thoughtful acquisitions we have a
national footprint and a diversified product offering enabling Sanyati to
easily be part of any "build" within South Africa.
Board of directors
In line with Sanyati`s move to the Main Board on 17 July 2008, it was our
stated intention to divorce the roles of CEO and executive chairman. We are
pleased to announce that on 9 April 2009, Sanyati announced the appointment of
Rick Jackson as executive chairman and Malcolm Lobban as chief executive officer
of the group with effect from 1 May 2009. We are delighted to welcome Malcolm on
board to develop the future strategic direction of Sanyati.
Effective 11 May 2009, Archie Rutherford resigned as executive director of
Sanyati to pursue his own interests.
By order of the Board
19 May 2009
Rick Jackson Marc Krouse
Executive Chairman GFD
CORPORATE INFORMATION
Sanyati Holdings Limited
("Sanyati" or "the company")
(Registration number: 1988/002538/06)
Share code: SAN ISIN: ZAE000081055
Directors:
RD Jackson (Executive chairman), MI Krouse (GFD), R Crowie*, HM Dlamini*,
MR Gahagan*, N Khambule*, MH Lobban (CEO), MJ Sangweni (*Non-executive)
Registered office:
Bridelia Sanyati Park, 3 Abrey Road, Kloof, KwaZulu-Natal, 3610 PO Box 1055,
Kloof, KwaZulu-Natal, 3640
Sponsor:
Exchange Sponsors (2008) (Pty) Limited
Transfer secretaries:
Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg,
2001 PO Box 61051, Marshalltown, 2107
Company secretaries:
Highway Corporate Services (Pty) Limited, Suites 13 - 17, Marwick Centre, Lucas
Drive, Hillcrest, 3610 PO Box 1319, Hillcrest, 3650
www.sanyati.co.za
Date: 19/05/2009 07:59:01 Produced by the JSE SENS Department.
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