| Mon 15 Jun 2009, 17:34 | | ALM - Alliance Mining Corporation Limited - Condensed reviewed financial results |
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ALM
ALM
ALM - Alliance Mining Corporation Limited - Condensed reviewed financial results
for the year ended 28 february 2009
Alliance Mining Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1997/013402/06)
JSE Code: ALM
ISIN: ZAE000104733
"(ALM" or "the group" or "the company")
CONDENSED REVIEWED FINANCIAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2009
CONDENSED GROUP BALANCE SHEET Reviewed Audited
28-Feb-09 29-Feb-08
R`000 R`000
ASSETS
Non-current assets 287 927 187 793
Property, plant and equipment 81 503 36 495
Goodwill on acquisition of subsidiaries 111 293 89 334
Investment property 20 016 23 456
Intangible assets 11 358 11 854
Financial receivables 63 756 26 654
Current assets 211 176 87 163
Inventory 120 815 21 521
Trade and other receivables 80 307 54 787
Cash and cash equivalents 10 054 10 855
Total assets 499 102 274 956
EQUITY AND LIABILITIES
Shareholders` Funds 377 398 238 197
Share capital and premium 132 653 126 713
Distributable reserves 244 745 111 484
Non-current liabilities 23 927 5 963
Deferred taxation 6 112 3 727
Long term liabilities 17 815 2 236
Current liabilities 97 777 30 796
Accounts payable 12 210 3 895
Taxation 46 476 25 423
Short term portion of long term liabilities 7 155 1 478
Short term borrowings 31 936 -
Total equity and liabilities 499 102 274 956
Shares in issue at period end (`000) 101 156 65 000
Net asset value per share (cents) 366.46
373.09
Net tangible asset value per share (cents)
251.84 210.78
CONDENSED GROUP INCOME STATEMENT Reviewed Audited
28-Feb-09 29-Feb-08
R`000 R`000
Revenue 484 520 312 122
Operating expenses (301 194) (201 843)
Other income 25 434 1 369
Profit before finance costs and depreciation 208 760 111 648
Finance costs ( 4 076) -
Investment income 479 711
Depreciation and amortization (3 731) (2 675)
Profit before taxation 201 432 109 684
Taxation (IS) (52 383) (28 896)
Net profit for the period 149 049 80 788
Basic and headline earnings per share 182.66 120.53
(cents)
Weighted average number of shares (`000) 81 598 67 027
CONDENSED GROUP CASH FLOW STATEMENT Reviewed Audited
28-Feb-09 29-Feb-08
R`000 R`000
Cash flows from operating activities 49 899 41 534
Cash flows from investing activities (13 598) (44 519)
Cash flows from financing activities (37 102) 6 260
Net movement in cash and cash equivalents (801) 3 274
Cash and cash equivalents at beginning of year 10 855 7 581
Cash and cash equivalents at end of year 10 054 10 855
CONDENSED GROUP
STATEMENT OF Share Share Shares Distributable
CHANGES IN EQUITY capital premiums to be reserve Total
R`000 R`000 issued R`000 R`000
R`000
Balance as at 28 50 43 063 - 34 088 77
February 2007 201
Share issue 15 61 586 - - 61
601
Deemed value of - - 21 999 - 21
shares to Thanda 999
Bantu
Dividends - - - (3 392) (3
392)
Net profit for the - - - 80 788 80
year 788
Balance as at 29 65 104 649 21 999 111 484 238
February 2008 197
Share issue 36 21 963 (21 - -
999)
Business - - - (188) (188)
Combinations
Deemed value of - - 5 940 - 5 940
shares to be issued
Dividends paid - - - (15 600) (15
600)
Net profit for the - - - 149 049 149
year 049
Balance as at 28 101 126 612 5 940 244 745 377
February 2009 398
Segmented Reporting
Income Statement
R`000
28 February 2009
Mining Mining
Products & Construction Other Total
Services
Revenue 176 682 257 516 50 322 484 520
Net profit after tax 77 540 69 011 2 498 149 049
R`000
29 February 2008
Mining Mining
Products & Construction Other Total
Services
Revenue 182 819 85 483 43 820 312 123
Net profit after tax 44 987 27 419 8 382 80 788
Balance Sheet
R`000
28 February 2009
Mining Mining
Products & Construction Other Total
Services
Net asset value 105 108 117 986 154 304 377 398
R`000
29 February 2008
Mining Mining
Products & Construction Other Total
Services
Net asset value 34 278 44 701 159 217 238 197
Overview
The board of directors of ALM is pleased to present the reviewed financial
results of the group for the year ended 28 February 2009.
Nature of the Business
ALM and its subsidiaries provide products and services to the mining industry.
ALM has operations in the West Rand, North West Province, Northern Province and
Mpumalanga.
The operations are grouped into three segments: Mining Products & Services,
Mining Construction and Other.
ALM remains focused on creating value for its shareholders. The group has
achieved growth as a result of the acquisitions concluded, and continues to
increase its share of the mining products and services market as well as
continuing expansion into the mining construction sector, while maintaining its
strategy to expand through the appropriate balance of organic and acquisitive
growth.
Business Combinations
In June 2008, ALM acquired 100% of the issued share capital of Stilfontein
Mining Supplies (Pty) Limited. During the year under review, management
continued to integrate the acquisitions with the acquisitions of prior years.
Goodwill increased by R21.9 million as a result of payments due to vendors in
respect of the acquisitions concluded in the previous financial year. No
further payments are due to vendors.
Financial Review
* The group generated R149.1 million (29 February 2008: R80.7 million) after
tax profits for the year under review.
* Earnings and headline earnings increased to 182.6 cents per share (29
February 2008: 120.53 cents).
* Net assets increased to R377.4 million at 28 February 2009 from R238.2
million at 29 February 2008.
The directors are pleased with the results achieved. ALM has shown strong
earnings and growth for the year under review. Headline earnings of R149 million
increased by 84% compared to the same period in 2008. The group has facilitated
demand from the mining construction and mining services industries with its
increased resource pools, while conducting unity between the companies to
improve efficiency.
Gross sales revenue increased to R484.5 million from R312.1 million at 29
February 2008, partly as a result of demand from the mining sector and partly
from additional contributions from subsidiaries acquired both in the previous
and current year.
Cost of sales and operating expenses increased from R201.8 million in February
2008 to R301.1 million in February 2009, which represents a lower increase than
that of turnover. Costs have been constrained by the introduction of cost
management measures to address rising costs, and by focusing on in-house
efficiencies. Best-of-breed information systems have been introduced into the
group and its subsidiaries which are continuing to provide information which
permits management to act prudently. The group managed its staff ratios
conservatively in the period, to achieve cost-saving targets.
Working Capital
There has been some decrease in the cash conversion ratio, partly due to the
increased scale of project-based work in progress, but also due to an increase
in trade and other receivables.
Inventories and work in progress increased by R99.2 million. Substantial
construction projects were under way at the year end, and are included in work
in progress. The group has pursued larger-scale projects, particularly in the
mining construction sector, with a concomitant increase in the investment
required to actualize the projects.
Trade receivables have increased from R54.7 million at 29 February 2008 to R80.3
million at 28 February 2009, which is mainly attributed to weakening economic
conditions. Debtors days have increased from 42 days to 68 days, due to the
general economic conditions causing a slowdown in payments.
Cash Flow and Borrowings
Cash outflow included capital expenditure of R37 million, resulting in net
borrowings increasing from R7.6 million as at 29 February 2008 to R69.1 million
as at 28 February 2009, mainly as a consequence of substantial investment in
working capital. The higher funding, combined with the higher interest rates in
the year, increased the net interest charge to R3.5 million, as a result of the
group taking advantage of its leverage position to increase debt to finance both
acquisitions and the increased working capital. The group`s debt:equity ratio
increased from 8.6% to 24.3% but remains well within the group`s gearing
benchmark range.
Share Capital
Share capital and premium increased as a result of the issue of the final 7,3
million shares issued to the shareholders of Thanda Bantu Projects in June 2008
following the performance warranties being met. There was a further issue of
12,3 million shares in July 2008 and 16,5 million shares issued in December 2008
in terms of the group`s approved share incentive scheme for employees.
Prospects
Current economic conditions, while of general concern, have not had a
detrimental impact on the growth in the business. The group and its subsidiaries
have survived the economic downturn thus far; order books remain healthy and the
group has substantial contract cover, which it continues to seek to expand, and
a significant number of new projects are in the process of being adjudicated.
The strategic capitalization of Thanda Bantu`s infrastructure and workshops in
Carletonville has placed the company in a good position to obtain and service
larger and further contracts and projects. The release of the harmonies between
the company subsidiaries and the acquisition of Stilfontein Mining Supplies is
being developed further, with a unified strategy within the group, comprising
procurement, new business and existing client development, administration and
operational integration. This has a downstream affect on other group
subsidiaries too, such as Galvrite Galvanising, which benefits directly from the
increased project flow from its sister companies.
New business development is a key component of the group`s growth strategy and
the group`s dedicated management and staff continue to explore opportunities in
existing and domestic market and increasingly, in international markets.
Business prospects are expected to improve in the year going forward as larger-
scale projects gather momentum and the benefits of the group`s aggressive
efficiency policies continue to be realized.
The strong balance sheet and conservative gearing approach of the group to the
present date provides the platform for the group to continue to seek investment
opportunities to ensure continued growth.
Basis of Preparation of the Audited Results
Statement of compliance
The reviewed condensed financial statements comprise a consolidated balance
sheet at 28 February 2009, a consolidated income statement, consolidated
statement of changes in equity and summarised consolidated cash flow statement
for the year ended 28 February 2009. The condensed financial statements have
been prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards ("IFRS"), the presentation and
disclosure requirements of IAS34: Interim Financial Reporting, the JSE Listings
Requirements and South African Companies Act.
The accounting policies applied for the year are consistent with those of the
prior year.
Basis of measurement
The condensed financial statements have been prepared on the historical cost
basis.
Audit Opinion
The condensed financial statements for the year ended 28 February 2009 have been
reviewed by Ngubane Zeelie Incorporated. The auditors` review report is
available for inspection at the company`s registered office.
Corporate Governance
The group subscribes to the principles of, and implements where appropriate, the
recommendations of the King II Code on Corporate Governance.
Dividend
Shareholders will be advised within the next 14 days of the dividend to be paid.
Cautionary Announcement
Shareholders are referred to the renewed cautionary announcement, dated 8 June
2009 and are advised that negotiations relating to a BEE transaction are
expected to be finalised within the next 14 days. Accordingly, shareholders are
advised to continue to exercise caution when dealing in the company`s securities
until a further announcement is made.
Statement on Going Concern
The financial statements have been prepared on the going-concern basis since the
directors have every reason to believe that the company has adequate resources
in place to continue in operation for the foreseeable future.
For and on behalf of the Board
AJP Steenkamp
Chief Executive Officer
15 June 2009
CORPORATE INFORMATION
Non executive directors: Dr. NM Phosa (Chairman), EA de Kok, Prof. Dr. NA
Nevhutanda
Executive directors: AJP Steenkamp (CEO), CM van Nieuwkerk (FD), BA de Kok
(COO), P Maema, M Gaboo
Registration number: 1998/020520/06
Registered address: 51 Shannon Road, Noordheuwel, 1740
Postal address: PO Box 640, Krugersdorp, 1740
Company secretary: CM van Nieuwkerk
Telephone: (011) 784 0120
Facsimile: (011) 783 8412
Transfer secretaries: Computershare Investor Services (Pty) Ltd
Auditors: Ngubane Zeelie Incorporated
Designated Adviser: Vunani Corporate Finance
Date: 15/06/2009 17:34:05 Produced by the JSE SENS Department.
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