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OLI
OLI
OLI - O-line - Audited Abridged Financial Information, Change Statement, Notice
of Annual General Meeting and Dividend Declaration
O-line Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2006/034685/06)
JSE share code: OLI
ISIN Number: ZAE000110730
("O-line" or "the Company" or "the Group")
Audited Abridged Financial Information, Change Statement, Notice of Annual
General Meeting and Dividend Declaration
HIGHLIGHTS:
- REVENUE UP 81.88%
- NET PROFIT AFTER TAX UP 91.08%
- HEADLINE EARNINGS UP 94.40%
- HEADLINE EARNINGS PER SHARE 21.79 CENTS
- NET ASSET VALUE PER SHARE 88.96 CENTS
1. Posting of Annual Report
Shareholders are informed that O-line`s Annual Report will be posted on 30
September 2009.
2. Audited Financial Information
Condensed Group balance sheet
As at As at
30 June 30 June
2009 2008
Audited Audited
R`000 R`000
ASSETS
Non-current assets 153 479 24 784
Property, plant and equipment 71 331 23 870
Goodwill 64 632
Loans 13 853
Deferred tax 3 663 914
Current assets 173 355 115 736
Inventories 66 547 36 788
Current tax receivable 245 5
Trade and other receivables 54 639 32 015
Cash and cash equivalents 51 924 46 928
TOTAL ASSETS 326 834 140 520
EQUITY AND LIABILITIES
Equity 174 809 91 979
Share capital 91 667 47 371
Retained income 83 142 44 608
Liabilities
Non-current liabilities 66 306 12 588
Other financial liabilities 54 490 7 091
Finance lease obligations 3 129 1 570
Deferred taxation 8 687 3 927
Current liabilities 85 719 35 953
Loans from shareholders - 12 181
Other financial liabilities 33 460 1 626
Current taxation payable 12 411 2 680
Finance lease obligation 1 735 675
Trade and other payables 37 858 18 791
Provisions 255 -
Total liabilities 152 025 48 541
Total equity and 326 834 140 520
liabilities
Condensed Group income statement
Year ended Year ended
30 June 2009 30 June 2008
Audited Audited
R`000 R`000
% Increase (81.88%)
Sales 313 794 172 529
Cost of Sales (199 315) (109 151)
Gross Profit 114 479 63 378
Other Income 3 191 738
Operating Expenses (60 945) (37 690)
EBIT 56 725 26 426
Finance Costs (6 859) (1 884)
Investment Revenue 3 568 3 286
Profit before taxation 53 434 27 828
Taxation (14 900) (7 662)
Profit after taxation 38 534 20 166
Earnings and headline earnings per
share
21.80 15.42
Earnings per share (cents)
Headline and fully diluted headline 21.79 15.16
earnings per share (cents)
Reconciliation of earnings and R`000 R`000
headline earnings
Profit after taxation 38 534 20 166
Less: Profit on sale of fixed
assets
(14) (346)
Headline earnings 38 520 19 820
Weighted Average number of shares
(`000) 176 753 130 738
Actual number of shares in issue
(`000) 196 500 150 000
Headline and diluted earnings per
share (cents)
Condensed Group statement of changes in equity
Share Share Retained Total equity
Capital premium income
R`000 R`000 R`000 R`000
Balance at 1 July - - 24 442 24 442
2007
Profit for the year - - 20 166 20 166
Issue of shares *- 50 000 - 50 000
Share issue expenses (2 629) (2 629)
Total changes *- 47 371 20 166 67 537
Balance at 1 July
2008 - 47 371 44 608 91 979
Profit for the year - - 38 534 38 534
Issue of shares *- 46 500 - 46 500
Share issue expenses - (2 204) - (2 204)
Total changes - 44 296 38 534 82 830
Balance at 30 June
2009 *- 91 667 83 142 174 809
*Less than R1 000
Condensed Group cash flow statement
As at 30 As at 30
June 2009 June 2008
Audited Audited
R`000 R`000
Cash flows from operating activities
Cash generated by operations 68 811 12 637
Interest income 3 568 3 268
Finance costs (6 384) (1 636)
Taxation paid (13 525) (10 000)
Net cash from operating activities 52 470 4 287
Cash flows from investing activities
Purchase of property, plant and (7 101) (2 765)
equipment
Sale of property, plant and 5 151 882
equipment
Acquisition of businesses (129 811) -
Loans advanced (13 853) -
Net cash from investing activities (145 614) (1 883)
Cash flows from financing activities
Proceeds on share issue 44 296 47 371
Proceeds from of other financial 67 531 4 730
liabilities
Repayment of shareholders loans (12 181) -
Finance lease payments (1 506) (858)
Net cash from financing activities 98 140 51 243
Total cash movement for the year 4 996 53 647
Cash at the beginning of the year 46 928 (6 719)
Total cash at end of year 51 924 46 928
3. Basis of preparation and corporate governance
The financial information has been prepared in accordance with International
Financial Reporting Standards ("IFRS"), the Companies Act of South Africa, as
amended and the JSE Limited ("JSE") Listings Requirements. The financial
information has been prepared under the historical cost convention. The
principle accounting policies used in the preparation of the financial
information is consistent with those applied for the year ended 30 June 2008.
The financial information set out above has been prepared from the annual
financial statements for the year ended 30 June 2009 which have been audited by
AM Smith and Company Inc. and their unmodified audit opinion is available for
inspection at O-line`s registered office. The O-line Group complies with the
Corporate Practise and Conduct as required in terms of the JSE Listings
Requirements.
4. Notes
Acquisition of ARMCO
O-line acquired the ARMCO business as a going concern with effect from 1 June
2008 ("the effective date") for an amount of approximately R142 million. All the
profits, cash flows, risks and rewards of the ARMCO business were transferred to
O-line with effect from 1 June 2008 subject to obtaining Competition Commission
and O-line shareholders` approval.
("IFRS") provides that O-line can only consolidate the ARMCO results from the
date of acquiring control. O-line cannot consolidate the Armco results from the
effective date into the O-line results since the regulatory approval process for
the ARMCO acquisition was only completed on 1 December 2008, the date of the
registration of the special resolutions required to implement the ARMCO
acquisition even though shareholders gave irrevocable undertakings to vote in
favour of all the proposed resolutions in June 2008. Competition Commission
approval was obtained in October 2008.
The ARMCO results are included in the O-line results with effect from 1 December
2008.
Fair value of assets and R`000
liabilities acquired
Property, plant and 46 441
equipment 30 355
Inventories
Trade and other receivables 36 455
Cash 12 185
Borrowings (11 707)
Finance lease obligations (1 284)
Deferred tax liability (2 208)
Trade and other payables (24 701)
Tax liabilities (7 917)
Post retirement medical aid (255)
Net assets acquired 77 364
Goodwill 64 632
Cash consideration paid 141 996
The income statement R`000
relating to the ARMCO
business for the period 1
July 2008 to 30 November
2008
Turnover 147 398
Cost of sales (107 632)
Gross profit 39 766
Operating expenses (16 193)
Operating profit 23 573
Investment revenue 513
Finance costs (763)
Profit before taxation 23 323
Taxation (6 530)
Profit for the 5 month 16 793
period
Please note that the above
profit of R16.793 is not
included in the O-line Group
profit of R38.534 million.
Major Changes to Balance Sheet
Non Current Assets
Non-current assets increased as a result of the ARMCO acquisition and additional
plant acquired of R7 million.
Current Assets and Current Liabilities
Current assets increased considerably from R115 million to R173 million mainly
attributed to the ARMCO acquisition and loans to finance the ARMCO acquisition.
Inventory, trade receivable and trade payable increased in line with increased
turnover.
Equity
Equity increased from R91 million to R174 million attributed to the R37.5
million equity raised as a result of the ARMCO acquisition, the capitalisation
of the O-line management loan accounts amounting to R7.6 million at R1 per O-
line share, less share issue expenses and the current profit of R38.5 million.
5. Dividends
The O-line board is pleased to declare a maiden cash dividend of 5 cents per O-
line share ("the dividend"). The important dates relating to the dividend are
set out below:
Last date to trade to Friday, 30 October 2009
participate in the dividend
O-line shares commence Monday, 2 November 2009
trading ex the dividend
Record date for the dividend Friday, 6 November 2009
Payment date for the divided Monday, 9 November 2009
O-line share certificates may not be dematerialised or rematerialised between
Monday, 2 November 2009 and Friday, 6 November 2009, both dates inclusive.
6. Results and related party transactions
Overall financial performance by the Group was pleasing. O-line and ARMCO
management focused on the deliverance and enhancement of synergistic values as a
result of the ARMCO acquisition including the amalgamation off all branches and
outlets and the consolidation of the O-line and ARMCO brand of product.
During the period, the Group entered into various transactions with its related
parties. Full disclosure is made in the O-line annual report for the year ended
30 June 2009.
Abridged segmental Year ended 30 June Year ended 30 June
results, assets and 2009 2008
liabilities
Revenue
O-line Support
Systems 188 236 172 529
ARMCO Superlite 132 726 -
Eliminations (7 168)
Total 313 794 172 529
Operating profit
O-line Support
Systems 29 578 26 590
ARMCO Superlite 27 938 -
Corporate (6 224) (24)
Eliminations 5 433 (140)
Total 56 725 26 426
Assets
O-line Support
Systems 91 186 100 645
ARMCO Superlite 190 142 -
Corporate 111 987 62 408
Eliminations (66 481) (22 532)
Total 326 834 140 521
Liabilities
O-line Support
Systems 27 551 35 955
ARMCO Superlite 177 472 -
Corporate 17 316 12 586
Eliminations (70 314) -
Total 152 025 48 541
7. Cash Flow
The excess cash generated out of O-line and the raised equity has been spent on
capital expenditure, working and the repayment of debt incurred as a result of
Armco acquisition.
8. Prospects
O-line going forward will intensify its presence within Africa through the
marketing of both O-line Support Systems and the ARMCO brand of products. O-line
and ARMCO product are used in infrastructure development in the development of
roads, airports, ports, rail, commercial sectors including hospitals and
healthcare, water resources, the petrochemical, power, mining,
telecommunications industries. O-line is confident that the diversified basket
of product manufactured and distributed by the GROUP will results in sustainable
growth for O-line and ARMCO`s products.
9. Notice of Annual General Meeting
The AGM of O-line shareholders will be held at 14-16 Prop Street, Selby Ext 11,
Johannesburg, 2001, South Africa, on Friday 20 November 2009, at 10h00. Details
of the proceedings and resolutions are contained in the Annual Report.
For and on behalf of the board
G.S. Smart (Chief Executive Officer)
E.A. Jay (Chairman)
30 September 2009
CORPORATE INFORMATION
Executive directors: G.S Smart, E.A.C Verseput;G.A Driver; D Fensham and T
Loughran
Non-executive directors: E.A Jay and R.I Jay
Registration number: 2006/034685/06
Registered address: 14/16 Prop Street, Selby Ext 11, Johannesburg 2001
Postal address: PO Box 6457, Johannesburg, 2001
Company Secretary: Natalie Van Der Merwe
Transfer Secretaries: Computershare Investor Services (Proprietary) Limited
Auditors: AM Smith and Company Inc
Designated Advisor: QuestCo Sponsors (Proprietary) Limited
Attorneys: Edwin Jay
Date: 30/09/2009 07:05:02 Produced by the JSE SENS Department.
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