| Fri 23 Oct 2009, 15:47 | | SPO - Set Point Group - Audited Results for the year ended 31 August 2009 |
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SPO
SPO
SPO - Set Point Group - Audited Results for the year ended 31 August 2009
Set Point Group (formerly Set Point Technology Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 1996/014334/06)
Share code: SPO ISIN: ZAE000132601
("Set Point" or "the Company" or "the Group")
HIGHLIGHTS
Encouraging results in a difficult trading environment
* Revenue down 6.1%
* Operating profit before impairment decreased 17.8%
* HEPS down 14.3% to 12.6 cents
* Tangible NAV per share increase 17.6% to 39.4%
* Cash generated from operations R65.0 million
* Strong liquid balance sheet
* Final dividend maintained at 3 cents (full year 5 cents)
Consolidated income statements
Audited Audited
Year Ended Year ended
31 August 31 August
2009 2008
R`000 R`000
Revenue 359 376 382 547
Cost of sales (191 730) (201 958)
Gross profit 167 646 180 589
Selling and administration expenses (108 735) (106 380)
Other operating income 3 294 2 470
Other operating expenses (13 266) (2 117)
Profit on disposal of plant and equipment 64 85
Foreign exchange transaction losses (994) (1 031)
Amortisation of intangible assets - (1 171)
Impairment of goodwill (12 336) -
Operating profit 48 939 74 562
Finance income 3 693 5 109
Finance costs (2 644) (4 419)
Profit before taxation 49 988 75 252
Taxation (20 040) (24 668)
Profit after taxation 29 948 50 584
Attributable to:
Equity holders of Set Point 29 948 50 544
Minority interests - 40
29 948 50 584
Shares in issue
Weighted average number of ordinary shares in 336 244 342 753
issue (000`s)
Fully diluted weighted average number of 339 870 347 165
ordinary shares in issue (000`s)
Basic earnings per share (cents) 8.9 14.7
Diluted basic earnings per share (cents) 8.8 14.7
Headline earnings per share (cents) 12.6 14.7
Diluted headline earnings per share (cents) 12.4 14.7
Reconciliation of headline earnings:
Earnings 29 948 50 544
Adjusted for: 12 290 (61)
-profit on disposal of plant and equipment (64) (85)
-taxation effect 18 24
-impairment goodwill 12 336 -
Headline earnings 42 238 50 483
Condensed consolidated statements of changes in equity
Audited Audited
Year ended Year ended
31 August 31 August
2009 2008
R`000 R`000
Opening balances 155 144 117 541
Recognised income and expenses
Profit for the year attributable to equity 29 948 50 544
holders of Set Point
Transactions with shareholders
Share based payments 741 728
Dividends (16 898) (13 670)
Treasury shares (purchased)/issued (12 523) 170
Translation reserve 46 -
Shares issued 129 266
Acquisition of minority interests 27 (435)
Equity attributable to equity holders of Set 156 614 155 144
Point
Condensed consolidated balance sheets
Audited Audited
As at As at
31 August 31 August
2009 2008
R`000 R`000
Assets
Non-current assets 76 099 85 828
Plant and equipment 40 594 37 044
Investments* 2 833 2 020
Goodwill 27 763 40 099
Deferred taxation 4 909 6 665
Current assets 159 494 184 282
Inventories 61 764 67 890
Trade and other receivables 54 373 64 828
Bank balances and cash 43 357 51 564
Total assets 235 593 270 110
Equity and Liabilities
Total equity 156 614 155 144
Non-current liabilities 12 291 16 667
Purchase consideration payable - 336
Interest bearing liabilities 8 244 12 011
Post retirement medical aid liability 563 488
Long-term accruals 3 484 3 832
Current Liabilities 66 688 98 299
Interest bearing liabilities 7 976 4 458
Trade and other payables 47 783 69 013
Taxation liability 10 929 24 828
Total equity and liabilities 235 593 270 110
Shares in issue (net treasury shares) (000`s) 327 437 343 131
Tangible net asset value per share (cents) 39.4 33.5
*previously classified in trade and other receivables
Condensed consolidated cash flow statements
Audited Audited
Year ended Year ended
31 August 31 August
2009 2008
R`000 R`000
Cash flows from operating activities 17 020 42 380
Cash generated by operations 65 032 65 553
Finance income 3 693 5 109
Finance costs (2 644) (4 038)
Taxation paid (32 183) (10 321)
Dividends paid - ordinary shareholders (16 878) (13 598)
- minority shareholders - (325)
Cash flows from investing activities (12 189) (16 639)
Capital expenditure on plant and equipment (13 864) (17 572)
Disposals of plant and equipment 1 675 933
Cash flows from financing activities (13 038) (10 870)
Proceeds from issue of shares 129 266
Shares (purchased)/issued by treasury (12 523)
170
Payment to vendors in respect of purchase (312) (11 321)
consideration payable
Payment in respect of long term provisions (83) (74)
Payment of interest bearing debt (5 169) (10 626)
Interest bearing debt raised 4 920 10 715
Cash
(Utilised)/generated during the year (8 207) 14 871
At beginning of year 51 564 36 693
At end of year 43 357 51 564
Condensed segmental information
Segment Segment Capital
assets liabil- expen- Deprecia-
ities diture tion
R`000 R`000 R`000 R`000
Analytical Services 58 190 (25 212) 8 623 4 893
Fluid Handling 98 382 (19 303) 2 530 1 756
Mining Services 46 320 (9 503) 1 428 1 466
Central and Shared Services 28 167 (24 961) 1 283 588
Consolidation entries, (375) - - -
adjustments and intra group
elimination
230 684 (78 979) 13 864 8 703
Condensed segmental information (cont)
Segment revenue Segment operating
profit
R`000 % R`000 %
Analytical Services 114 236 31.8 34 848 71.2
Fluid Handling 170 539 47.4 36 151 73.9
Mining Services 74 601 20.8 (9 250)* (18.9)
Central and Shared Services - - (12 925) (26.4)
Consolidation entries, - - 115 0.2
adjustments and intra group
elimination
359 376 100.0 48 939 100.0
*after adjustment for impairment of goodwill
PROFILE
Set Point is an industrial product and services group which operates through
three divisions - Analytical Services, Fluid Handling and Mining Services.
Set Point`s ordinary shares have been listed on the JSE since 1997 and are
quoted in the business support services sub-sector.
FINANCIAL RESULTS
Revenue was down by 6.1% to R359.4 million, the majority of the decline
occurring in the Mining Services division.
Operating profit before impairment decreased by 17.8% and pretax profit before
impairment by 17.2% to R62.3 million.
The Group achieved headline earnings per share (HEPS) of 12.6 cents compared
to 14.7 cents in the previous year.
The balance sheet remains strong with cash balances of R43.4 million and cash
net of borrowings of R27.1 million.
Goodwill amounting to R12.3 million relating to the Mining Services division
has been impaired.
Based on these results, the Board has recommended the payment of a final
dividend of 3 cents per share making a total of 5 cents for the year (2008: 5
cents per share).
REVIEW OF OPERATIONS
The Group has not been spared the impact of the global economic turbulence
felt mainly in our exposure to mining and exploration activity in the Southern
African region, but has in the opinion of the Board delivered encouraging
results in a difficult trading environment.
Analytical Services operates through specialised laboratories offering expert
chemical analysis for the precious metals exploration industry and condition
monitoring of fluids. Although the Assay Laboratory sector was adversely
affected by the reduction in mining exploration activity, the Oil Condition
Monitoring sector was resilient and revenues were up by 15.8% in this
division. Overall Analytical Services operating profits fell by 13.7%
cushioned by the Oil Condition Monitoring division, but impacted by the need
to retain skills and laboratory infrastructure.
The Fluid Handling division, which supplies pumps, valves, couplings and flow
meters to the petrochemical and mining industries, saw decreased revenue of
1.9% to R170.5 million. Operating profit decreased by 8.9% due to margins
being squeezed to maintain market share.
Mining Services consists of the manufacture and repair of hopper wheels, skip
and cage guides and rollers, as well as the production and supply of reference
materials for exploration, mining and assay laboratories. This division was
directly affected by both the reduction in mining exploration activity and
platinum and gold mining in particular in South Africa. Revenue fell 20.0% and
operating profit by 182.4%.
Basis of preparation and accounting policies
This preliminary announcement has been prepared in accordance with the JSE
listing requirements; the Companies Act; and the recognition and measurement
requirements of International Financial Reporting Standards (IFRS) and the
presentation and disclosure requirements of IAS34 Interim Financial
Statements. The accounting policies applied are consistent with those followed
in the preparation of the consolidated annual financial statements in the
current and prior year.
Audit Opinion
The independent auditors, KPMG Inc. have issued their opinion on the Group`s
financial statements for the year ended 31 August 2009. A copy of their
unqualified audit report for the year is available for inspection at the
company`s registered office.
DIVIDENDS
The Group`s policy is to pay interim and final dividends annually which are
covered 2,5 to 3,0 times by HEPS.
Notice is hereby given that a final dividend of 3 cents per share has been
declared in respect of the year ended 31 August 2009. This dividend will be
paid out of profits as determined by the directors, to shareholders recorded
as such in the register at the close of business on the record date, Friday,
27 November 2009. The last date to trade, to participate in the dividend, is
Friday, 20 November 2009. Shares will commence trading ex-dividend from
Monday, 23 November 2009. The important dates pertaining to this dividend for
shareholders trading on the JSE Limited are as follows:
Last day to trade "CUM" dividend Friday, 20 November 2009
Shares trade "EX" dividend from Monday, 23 November 2009
Record date Friday, 27 November 2009
Payment date Monday, 30 November 2009
Share certificates may not be dematerialised or rematerialised between Monday,
23 November 2009 and Friday, 27 November 2009, both days inclusive.
PROSPECTS
In the current economic environment the Group does not expect any improvement
in headline earnings in the year ahead. The Group is however strategically
well positioned for future growth. This forecast has not been reviewed or
reported on by the Group`s auditors.
For and on behalf of the board
Christopher Seabrooke Graeme Horsfield
Chairman Chief Executive Officer
23 October 2009
Directors: CS Seabrooke* (Chairman), MJ Smith*+ (Deputy Chairman), GJ
Horsfield (Chief Executive Officer), MD Evers# (Chief Financial Officer), DC
Seaton*+, BH Kent*+, JM Judin*+, CN Mapaure* , GE Nel*+, TM Skwambane*+, CP
Coutts-Trotter *(Alternate)
(* Non-executive) (+ Independent) (# British) ( Zimbabwean)
Company Secretary: MD Evers
Registered Office: 30 Electron Avenue, Isando, 1601
(PO Box 856, Isando 1600)
Transfer Secretaries: Computershare Investor Services (Pty) Limited
(Registration number: 1958/003546/06)
Ground Floor, 70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown 2107)
Sponsor: Investec Bank Limited
(Registration number: 1969/004763/06)
Date: 23/10/2009 15:47:01 Produced by the JSE SENS Department.
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