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ABK
ABK
ABK - African Brick Centre Limited - Abridged audited results for the year ended
28 February 2009
AFRICAN BRICK CENTRE LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 1999/006214/06)
Share Code: ABK ISIN: ZAE000105169
("African Brick Centre" or "the Company" or "the Group")
ABRIDGED AUDITED RESULTS FOR THE TWELVE MONTHS ENDED 28 FEBRUARY 2009
INTRODUCTION
The Board of Directors of African Brick Centre announced the Group`s results for
the twelve months ended 28 February 2009. The consolidated Group results
include Dash Brick and Building Supplies Strubensvalley (Proprietary) Limited
("Dash Brick"), African Brick (Proprietary) Limited ("African Brick"), African
Brick Lenasia (Proprietary) Limited ("African Brick Lenasia") and Landton
Properties (Proprietary) Limited ("Landton Properties") ("the subsidiaries").
Effective control and the power to govern the financial and operating policies
of Dash Brick was acquired on 1 April 2008. The aforementioned subsidiary
results have been consolidated with effect from 1 April 2008 with the results of
African Brick Centre.
The majority shareholder of African Brick Centre is Yakani Infraco (Proprietary)
Limited who acquired 51% shareholding on 30th January 2009, and took effective
control on 1 February 2009.
ABRIDGED INCOME STATEMENT
Note Group Group
s
Audited Audited
12 Months 12 Months
ended 28 ended 29
February February
2009 2009
R000`s R000`s
Revenue 191 868 116 014
Earnings / (loss) before interest, (31 283) 29 607
tax, depreciation and amortisation
("EBITDA")
Investment revenue 1 074 2 164
Finance costs (1 538) (439)
Depreciation and amortisation (3 009) (967)
Impairment of goodwill and clay (44 071) -
reserves
Profit / (Loss) before taxation (82 225) 30 365
Taxation (521) (9 234)
Profit / (Loss) after taxation (82 746) 21 132
Earnings per share (cents) ("EPS") 4 (26.5) 10.9
Headline earnings per share (cents) 4 (12.4) 10.9
("HEPS")
Shares in issue (000`s) 312 238 312 238
Shares in issue - weighted average 312 238 193 397
(000`s)
ABRIDGED BALANCE SHEET
Note Group Group
s
Audited Audited
12 Months 12 Months
ended 28 ended 29
February February
2009 2009
R000`s R000`s
ASSETS
Non-current assets 64 553 96 848
Investment property 625 625
Property, plant and equipment 62 903 60 232
Goodwill - 35 392
Intangible assets - 162
Other financial assets 841 5
Deferred tax 184 184
Prepayments - 248
Current assets 48 352 89 169
Cash resources 1 567 36 593
Inventories 24 314 34 768
Other current assets 22 471 17 808
TOTAL ASSETS 112 905 186 017
EQUITY AND LIABILITIES
Equity 60 380 145 593
Share capital and premium 113 315 113 342
Revaluation reserves 2 662 3 452
Retained income (55 597) 28 799
Non-current liabilities 28 021 14 694
Borrowings 1 789 3 133
Deferred taxation 11 355 11 502
Other financial liabilities 10 177 59
Provisions 4 700 -
Current liabilities 24 503 25 730
Taxation payable 35 11 476
Provisions 500 910
Bank overdraft 3 218 -
Other current liabilities 20 750 13 344
TOTAL EQUITY AND LIABILITIES 112 905 186 017
Net asset value per share (cents) 19.3 46.6
ABRIDGED CASH FLOW STATEMENT
Group Group
Audited Audited
12 Months 12 Months
ended 28 ended 29
February February
2009 2009
R000`s R000`s
Cash generated from operations (15 637) 3 949
Net interest received/(paid) (464) 1 933
Income tax paid (12 564) (5 476)
Net cash flow from operating activities (28 665) 406
Net cash flow from investing activities (19 262) (8 968)
Net cash flow from financing activities 9 682 36 363
Net movement in cash balance (38 245) 27 801
Cash balances at beginning of period 36 593 8 792
Cash balances at end of period (1 652) 36 593
ABRIDGED GROUP STATEMENT OF CHANGES IN
SHAREHOLDERS` EQUITY
Share Share Reval Retained Total
Capital Premium Reserve Income
R000`s R000`s R000`s R000`s R000`s
Balance at 1 March 07 - - 3 452 7 667 11 119
Issue of share capital 320 116 940 - - 117 260
Shares repurchased (8) (3 911) - - (3 918)
Profit after taxation - - - 21 132 21 132
Balance at 29 February 312 113 029 3 452 28 800 145 593
2008
Balance at 1 March 08 312 113 029 3 452 28 800 145 593
Reversal of reserves (790) (790)
Minority share of net (1 651) (1 651)
profit
Preliminary expenses - (26) (26)
incurred
Loss after taxation - - - (82 746) (82 746)
Balance at 28 February 312 113 003 2 662 (55 597) 60 380
2009
MANAGEMENT COMMENTARY
African Brick Centre`s wholly owned subsidiaries at year-end were:
African Brick and African Brick Lenasia Limited are both involved in the
manufacturing of clay bricks. During the year under review, African Brick
Lenasia closed their Gauteng operation due to poor market demand and upgraded
the Eastern Cape manufacturing facility with plant and equipment previously
operated in Gauteng. These two factories currently have a combined production
yield in excess of seventy one million clay bricks per annum. This is a
reduction in the production capacity as previously reported (ninety million
bricks).
Landton Properties, which operates as a property investment company. The
entity also owns the premises at which African Brick`s production facilities
are based.
Dash Brick is an established retail outlet operated from Strubensvalley.
FINANCIAL REVIEW
Revenue for the period under review increased by R75.8 million (65%). Earning
before interest, tax, depreciation and amortisation amounted to a loss of
R34,8 million, and a decrease of R64,5 million (222%) compared to the results
for the period ended 29 February 2008.
The adverse market conditions resulted in the conversion of retail branches to
trade depots with the exception of the Honeydew branch during the second half
of the financial year. Due to the oversupply of bricks in the market, selling
prices were under pressure which inevitably led to a reduction in production
output, prior to year end.
Losses incurred in the retail division and taxation paid, mainly contributed
to the cash shortfall from operations of R21.949 Million. Capital expenditure
and commissioning cost of the Eastern Cape Plant amounted to R7.6 Million with
investment in subsidiary of R12.070 Million during the 12 months under review.
OPERATIONAL REVIEW
During the period under review the group upgraded its manufacturing facility
situated in the Eastern Cape. This investment in plant and equipment is
considered strategic due to the quality of our plaster clay brick production
and the anticipated demand in that geographical region. No further capital
expenditure is required and the facility has a production capacity of 22
million bricks per annum. Production processes have been re-aligned during
January and February 2009 in order to reduce the cost of manufacturing.
OUTLOOK
Short to medium term outlook for the Group:
In light of the international and local economic climate, activity in the
building industry has slowed down significantly and will remain under pressure
for the foreseeable future. The Group is expected to return to profitability
in the current financial year due to the restructuring of the retail
infrastructure and improvements made in the efficiencies of the manufacturing
operations. Synergies with infrastructure investments controlled by the
controlling shareholder should provide additional benefits to the Group during
the economic downturn.
NOTES TO THE ABRIDGED CONSOLIDATED AUDITED FINANCIAL STATEMENTS
1. Significant accounting policies
The abridged consolidated audited financial statements of African Brick Centre
for the twelve months ended 28 February 2009 comprise the Company and its
subsidiaries (collectively referred to as the "Group").
Statement of compliance
The abridged consolidated audited financial statements have been prepared in
accordance with the International Financial Reporting Standards ("IFRS") and
the presentation and disclosure requirements of IAS 34 (Interim Financial
Reporting), the Listing Requirements of the JSE Limited, paragraph 6.8 and the
Companies Act 61, 1973, as amended. The abridged consolidated financial
statements do not include all of the information required for full Annual
Financial Statements and should be read in conjunction with the Consolidated
Annual Financial Statements for the year ended 28 February 2009.
The accounting policies have been applied consistently by individual Group
companies and have been applied consistently to all periods presented in these
abridged consolidated audited financial statements.
Authorised and issued share capital
No changes during the period under review.
Investment in Subsidiaries during the financial year:
Dash
Date of effective control 1 April 08
Voting equity 51%
30 November 08
100%
R000`s
Fair value of assets acquired
Property, plant and equipment 1 420 639
Inventory 1 906 500
Trade and other receivables 11 653 015
Trade and other payables (5 136 028)
Tax assets / liabilities (577 263)
Borrowing (4 386 375)
Cash (512 424)
Total 4 368 064
Consideration paid
Cash (12 090 750)
Goodwill 7 722 686
Total 4 368 064
Net cash outflow on acquision
Cash consideration paid (12 090 750)
Cash acquired (512 424)
Total (12 603 174)
4. EPS
EPS is calculated on the Group`s profit after tax, divided by the
weighted average number of shares in issue during the 12 month period.
Profit after tax (R000`s) 82 746)
Weighted average number of shares in issue (000`s) 12 238
EPS (26.5) cents
HEPS
Reconciliation of headline earnings:
Earnings attributable to ordinary shareholders (R000`s) (82 746)
Less: profit on disposal of non-current assets (R000`s) (32)
Plus: impairment of goodwill and clay reserves 44 071
Headline earnings attributable to ordinary
shareholders (R000`s) (38 707)
Weighted average number of shares in issue (000`s) 312 238
HEPS (12.4) cents
There are no factors existing during this reporting period which require the
disclosure or calculation of diluted EPS.
5. Segmental reporting
The Group did not apply segmental reporting. This is in accordance with the
guidelines of IFRS 8 (Operating Segments). No segment reports based on
geographical spread of operations was prepared due to the fact that more than
90% of Group revenue was generated from one geographical region.
No segment report based on product diversification was prepared due to the
fact that the vast majority of Group revenue is derived from the sale of
bricks.
6. Capital Commitments
The Company had no capital commitments as at year end.
7. Dividend policy
In light of the current prevailing business environment as well as the fact
that the current period recorded a loss and decrease in cash and cash
equivalents, the Board of Directors has decided not to declare a dividend.
8. Subsequent Events
No events material to the understanding of the report have occurred in the
period between the period-end date and the date of this report.
9. Directors
The following directors served on the Board as at 28 February 2009:
Non-Executive Directors SA Tati (Chairman)
DB Mostert (Independent)
MJ Jack (Independent)
Dr D Konar
Executive Directors B van Graan*
HH Knoetze (Chief Executive Officer)
B Blom (Financial Director)
WAF Strydom
* B van Graan resigned as an Executive Director on 12 May 2009
10. Audit Opinion
The annual financial statements have been audited by PKF (Pta) Inc. The
auditors` unqualified audit opinion is available for inspection at the
Company`s registered office.
BY ORDER OF THE BOARD
29 May 2009
Johannesburg
HH KNOETZE B BLOM
CHIEF EXECUTIVE OFFICER FINANCIAL DIRECTOR
SA TATI
CHAIRMAN
CORPORATE INFORMATION
Designated and Corporate Advisor PSG Capital (Proprietary) Limited
Registration Number 1999/006214/06
Bussiness Address 31 Biccard Street
Krugersdorp
1739
Postal Address P O Box 315
Krugersdorp
1740
Company Secretary and Registered Address Premium Corporate Consulting
Services (Pty) Ltd
Waterford Office Park
Unit 28, First Floor
Cnr Witkoppen and Waterford Drive
Fourways, 2188
Johannesburg, South Africa
PO Box 1078,
Jukskei Park, 2153
Transfer Secretaries Link Market Services
South Africa (Pty) Ltd
Date: 29/05/2009 15:12:00 Produced by the JSE SENS Department.
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