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ELR ELRP
ELR
ELR/ELRP - ELB Group Limited - Reviewed Group Provisional Report And Final
Cash Dividend Declarations For The Year Ended 30 June 2009
ELB GROUP LIMITED
Incorporated in the Republic of South Africa
Registration number 1930/002553/06
Share codes: ELR & ELRP
ISIN: ZAE000035101 & ZAE000035333
(`ELB`, the `Company` or the `Group`)
REVIEWED GROUP PROVISIONAL REPORT AND FINAL CASH DIVIDEND DECLARATIONS FOR THE
YEAR ENDED 30 JUNE 2009
COMMENTS
INTRODUCTION
The ELB Group is a total solutions provider to the mining, minerals, power,
port, construction and industrial sectors in the field of materials handling
and appropriate process plants. This is achieved through ELB generated
innovation and the supply, with world class partners, of equipment and
technology. The Group operates in Africa and Australia.
ELB is an investment holding company owning 85 percent of ELB Engineering
Limited (ELB Engineering) with the remaining 15 percent owned by the ELB
Educational Trust established as the Group`s BEE partner promoting education
in maths and science for historically disadvantaged South Africans.
FINANCIAL RESULTS
The ELB Group results for the period, seen against the background of the
financial turmoil experienced worldwide, are indeed commendable.
Sales of continuing operations increased by 16,5 percent from R1 069 million
in 2008 to R1 246 million in 2009.
Headline earnings of the Group decreased by 23,2 percent from R66,8 million in
2008 to R51,3 million in 2009, and headline earnings per share decreased by
22,2 percent from 243,2 cents per share in 2008 to 189,1 cents per share in
2009.
CASH FLOW
Cash flow management remains a high priority for the ELB Group. The financial
events over the last twelve months have confirmed that ELB`s conservative
approach to cash flow management is highly appropriate, which is evidenced by
the R290 million cash and cash equivalents at the year end.
PROSPECTS
The ELB Group continues to be well positioned to benefit from both the ongoing
infrastructure spend in Southern Africa and Australia as well as the increase
in capacities and efficiencies being implemented by the global resources and
power industry sectors. This will be enhanced by the continued growth and
development of our know how and skills base.
The coming twelve months are being approached with caution as it is
anticipated that trading conditions will remain difficult.
DIRECTORATE
In compliance with JSE Listings Requirements Mr Anthony Fletcher, the chairman
of the Board, was also appointed as financial director on 25 May 2009.
Mr Joe Matsau who was appointed a director on 8 July 2008 resigned from the
Board on 1 September 2009 owing to a potential conflict of interests. The
Board thanks him for his contribution and wishes him well in his future
endeavors.
SOCIAL RESPONSIBILITY
As mentioned above, ELB`s empowerment partner is the ELB Educational Trust
established to promote education in maths and science for historically
disadvantaged South Africans. To this end bursaries were awarded to students
at various South African universities.
ELB also made a substantial donation to the St Vincent School for the Deaf.
This institution has been identified as worthy of ELB`s support and will
further assist the historically disadvantaged in our community.
ACCOUNTING POLICIES
The reviewed provisional financial statements have been prepared in accordance
with International Accounting Standard (IAS) 34: Interim Financial Reporting.
Accounting policies accord with International Financial Reporting Standards
(IFRS), and are consistent with those applied in the financial year ended 30
June 2008. The provisional financial statements also comply with the South
African Companies Act.
REVIEW BY THE INDEPENDENT AUDITOR
KPMG Inc, the Company`s independent auditor, has reviewed the provisional
financial statements contained in this provisional report and has expressed an
unmodified conclusion on the provisional financial statements. The review
report is available for inspection at the Company`s registered office.
DIVIDENDS
The final dividend has been decreased from 40 cents in 2008 to 20 cents in
2009, but is a substantial increase on the interim dividend of 10 cents per
share and reflects the Board`s confidence in the prospects for the ELB Group
going forward.
The total dividend for the year is therefore 30 cents per share versus 60
cents per share for the 2008 financial year representing a decrease of 50 per
cent.
On behalf of the Board
A G Fletcher
Chairman
Boksburg
22 September 2009
GROUP INCOME STATEMENT
Reviewed Audited
Year ended Year ended
30 Jun 09 30 Jun 08
R 000 R 000
Continuing operations
Sales 1 245 817 1 069 408
Operating costs excluding (1 170 147) (968 020)
depreciation
Operating profit before depreciation 75 670 101 388
Depreciation (5 108) (4 099)
Profit from operations 70 562 97 289
Profit on realisation of non current
assets held for sale 4 232 -
Finance income 27 953 21 886
Finance expenses (9 717) (8 814)
Profit before tax 93 030 110 361
Income tax expense (29 562) (34 709)
Profit from continuing operations 63 468 75 652
Discontinued operations
Profit from discontinued operations - 2 107
Profit for the year 63 468 77 759
Attributable to:
Ordinary shareholders of ELB 55 526 68 007
Minority interest 7 942 9 752
63 468 77 759
CALCULATION OF GROUP HEADLINE EARNINGS
Reviewed Audited
Year Year
ended ended
30 Jun 09 30 Jun 08
R 000 R 000
Profit attributable to ordinary 55 526 68 007
shareholders of ELB per the income
statement
Deduct: Items excluded from headline 4 230 1 250
earnings as detailed below:
Continuing operations:
(Loss) / profit on disposal of
plant and equipment:
Included in profit from ( 313) 275
operations
Profit on realisation of non 4 232 -
current assets held for sale
Discontinued operations:
Profit on disposal of plant and - 77
equipment
Profit on sale of property - 1 647
Loss on sale of subsidiaries - ( 641)
Income tax effect of items excluded 277 ( 79)
from headline earnings
Minority interest in items excluded 34 ( 29)
from headline earnings
Headline earnings 51 296 66 757
Weighted average number of shares
(excluding
treasury shares) on which basic
earnings per
share are based (000`s) 27 128 27 454
Earnings per ordinary share (cents)
- basic 204.7 247.7
- diluted 204.7 247.5
Headline earnings per ordinary share
(cents)
- basic 189.1 243.2
- diluted 189.1 242.9
Dividends declared for the year per 30 60
ordinary share (cents)
GROUP BALANCE SHEET
Reviewed Audited
30 Jun 09 30 Jun 08
R 000 R 000
ASSETS
Non current assets 59 888 59 425
Property, plant and equipment 39 617 41 820
Non current loan receivable 3 469 3 949
Deferred tax assets 16 802 13 656
Current assets 816 750 786 553
Inventories and construction 373 079 381 345
contracts in progress
Receivables and other current assets 151 785 89 814
Income tax recoverable 1 597 160
Cash and cash equivalents 290 289 315 234
Total assets 876 638 845 978
EQUITY AND LIABILITIES
Attributable to ordinary 291 196 263 848
shareholders of ELB
Issued capital 25 192 25 192
Treasury shares (31 161) (24 758)
Reserves 902 9 163
Retained earnings 296 263 254 251
Preference shares 8 8
Total equity attributable to equity 291 204 263 856
holders of ELB
Minority interest 27 759 21 710
Total equity 318 963 285 566
Non current liabilities 19 333 17 724
Interest bearing borrowings 7 606 9 891
Provision 11 107 7 403
Deferred tax liabilities 620 430
Current liabilities 538 342 542 688
Non interest bearing payables and 379 015 286 889
other current liabilities
Interest bearing payables 150 158 228 719
Income tax payable 9 169 27 080
Total equity and liabilities 876 638 845 978
Ordinary shares in issue (000`s) 33 860 33 860
Deduct: Treasury shares in issue 6 842 6 403
(000`s)
Ordinary shares in issue on which 27 018 27 457
net asset value per share is
calculated
Net asset value per share (cents) 1 078 961
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to ordinary shareholders of ELB
Issued Treasury Retained Total
capital shares Reserves earnings
R 000 R 000 R 000 R 000 R 000
Balance at 30 25 192 (23 215) (6 208) 197 213 192 982
June 2007
Profit for the 68 007 68 007
year
Foreign currency 15 037 15 037
translation
adjustments for
foreign
operations
Total recognised - - 15 037 68 007 83 044
income and
expense for the
year
Ordinary (10 969) (10 969)
dividends paid
Premium on buyout (853) (853)
of minority
interest in
subsidiary
Share options 1 187 1 187
recognised
The ELB Share
Incentive Trust
Increase in (1 543) (1 543)
treasury shares
held
Total changes for - (1 543) 15 371 57 038 70 866
the year
Balance at 30 25 192 (24 758) 9 163 254 251 263 848
June 2008
Profit for the 55 526 55 526
year
Foreign currency (12 688) (12 688)
translation
adjustments for
foreign
operations
Total recognised - - (12 688) 55 526 42 838
income and
expense for the
year
Ordinary (13 514) (13 514)
dividends paid
Share options 4 427 4 427
recognised
The ELB Share
Incentive Trust
Increase in (6 403) (6 403)
treasury shares
held
Total changes for - (6 403) (8 261) 42 012 27 348
the year
Balance at 30 25 192 (31 161) 902 296 263 291 196
June 2009
GROUP STATEMENT OF CHANGES IN EQUITY continued
Attrib. to Minority Reviewed
ordinary Preferenc Total
shareholders e
of ELB
Total shares interest equity
R 000 R 000 R 000 R 000
Balance at 30 June 192 982 8 9 830 202 820
2007
Profit for the year 68 007 9 752 77 759
Foreign currency 15 037 2 654 17 691
translation
adjustments for
foreign operations
Total recognised 83 044 - 12 406 95 450
income and expense for
the year
Ordinary dividends (10 969) ( 586) (11 555)
paid
Premium on buyout of ( 853) ( 150) (1 003)
minority interest in
subsidiary
Share options 1 187 210 1 397
recognised
The ELB Share
Incentive Trust
Increase in treasury (1 543) (1 543)
shares held
Total changes for the 70 866 - 11 880 82 746
year
Balance at 30 June 263 848 8 21 710 285 566
2008
Profit for the year 55 526 7 942 63 468
Foreign currency (12 688) (2 239) (14 927)
translation
adjustments for
foreign operations
Total recognised 42 838 - 5 703 48 541
income and expense for
the year
Ordinary dividends (13 514) ( 435) (13 949)
paid
Share options 4 427 781 5 208
recognised
The ELB Share
Incentive Trust
Increase in treasury (6 403) (6 403)
shares held
Total changes for the 27 348 - 6 049 33 397
year
Balance at 30 June 291 196 8 27 759 318 963
2009
GROUP CASH FLOW STATEMENT
Reviewed Audited
Year Year
ended ended
30 Jun 09 30 Jun 08
R 000 R 000
Continuing operations
Cash inflow from operating activities 103 120 073
before dividends paid
Dividends paid (13 949) (11 555)
Cash (outflow) / inflow from operating (13 846) 108 518
activities
Cash outflow from investment activities (3 218) (19 985)
Cash (outflow) / inflow from financing (7 881) 2 580
activities
Cash (outflow) / inflow from continuing (24 945) 91 113
operations
Discontinued operations
Cash inflow from discontinued - 14 945
operations
(Decrease) / increase in cash and cash (24 945) 106 058
equivalents
Cash and cash equivalents at the 315 234 209 176
beginning of the year
Cash and cash equivalents at the end of 290 289 315 234
the year
NOTES
Capital commitments
At 30 June 2009 there were capital commitments of
R23 837 000 (30 June 2008 - R2 924 000). The
commitments, which comprise the purchase of
additional property and extensions to existing
property, will be funded through a new mortgage bond
for the additional property, and mainly on draw down
on the current mortgage bond for the existing
property, with limited use of the available cash and
cash equivalents.
Contingent liabilities
A Group entity has issued a guarantee of R830 000 in
favour of a raw material supplier to a company which
was previously part of the ELB Timbers segment, and
has now been sold. The guarantee is cancellable by
three calendar months notice. A financial guarantee
liability of R70 000 has been accrued in respect of
the guarantee.
ELB Engineering Services operates in the engineering
contracting business and is exposed to the risks
associated with engineering contracts. These risks
are managed on the basis of limited liability.
All known liabilities of the group have been
accrued. However a contractual dispute has arisen
that the directors believe will be unlikely to
result in a material loss.
SEGMENT ANALYSIS
Reviewed Audited
Year Year
ended ended
30 Jun 09 30 Jun 08
R 000 R 000
Segment revenue
Continuing operations
ELB Engineering 1 245 817 1 069 408
Discontinued operations
ELB Timbers - 26 765
Total 1 245 817 1 096 173
Segment results
Headline earnings
Continuing operations
ELB Engineering 53 833 67 607
ELB Group non segmental (2 537) (1 874)
Headline earnings of continuing 51 296 65 733
operations
Headline earnings of discontinued
operations
ELB Timbers - 1 024
Headline earnings attributable to 51 296 66 757
ordinary shareholders of ELB
Items excluded from headline earnings
Continuing operations 4 230 167
Discontinued operations - 1 083
Profit attributable to ordinary 55 526 68 007
shareholders of ELB
FINAL CASH DIVIDEND DECLARATIONS
The directors have declared the following final cash
dividends for the year ended 30 June 2009.
PREFERENCE DIVIDEND NUMBER 117
A final cash dividend has been declared at the rate
of 6% per annum for the second six month period on
the 6% fixed cumulative redeemable preference shares
of R2 each, equivalent to 6 cents per share.
ORDINARY DIVIDEND NUMBER 123
A final cash dividend of 20 cents per share has been
declared on the ordinary shares.
The salient dates in respect of both dividends are:
Last day to trade cum dividend Friday, 16 October 2009
Shares commence trading ex dividend Monday, 19 October 2009
Record date Friday, 23 October 2009
Date of payment Monday, 26 October 2009
Share certificates may not be dematerialised or
rematerialised between Monday, 19 October 2009, and
Friday, 23 October 2009, both dates inclusive.
By order of the Board
DG Jones
Secretary
Boksburg
22 September 2009
REGISTERED OFFICE
ELB Equipment Limited
14 Atlas Road
Anderbolt
Boksburg
1459
SHARE TRANSFER
SECRETARIES
Computershare Investor Services (Pty) Limited
70 Marshall Street
Johannesburg, 2001
(PO Box 61051,
Marshalltown, 2107)
SPONSOR
Rand Merchant Bank (a division of FirstRand Bank
Limited)
1 Merchant Place
Cnr Fredman Drive & Rivonia Road
Sandton, 2196
DIRECTORS
AG Fletcher (chairman), PJ Blunden (chief executive
- ELB Equipment), T de Bruyn,* Dr JP Herselman,* Dr
SJ Meijers (chief executive - ELB Engineering
Services), MV Ramollo
*Non executive
Date: 25/09/2009 09:00:01 Produced by the JSE SENS Department.
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