| Mon 16 Nov 2009, 8:18 | | BWI - B&W - Preliminary Condensed Audited Financia |
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BWI
BWI
BWI - B&W - Preliminary Condensed Audited Financial Results For The Year
Ended 31 August 2009
B & W Instrumentation and Electrical Limited
Incorporated in the Republic of South Africa
(Registration number 2001/008548/06)
Share Code: BWI & ISIN: ZAE000098687
("B&W" or "the company" or "the group")
PRELIMINARY CONDENSED AUDITED FINANCIAL RESULTS
FOR THE YEAR ENDED 31 AUGUST 2009
HIGHLIGHTS
- Revenue up 11.7%
- Operating profit R76 million
- Cash on hand of R140 million
- Total dividend of 7.5 cents (2008: 7 cents)
- Order book of R570 million
Consolidated balance sheet
Audited Audited
31 August 31 August
2009 2008
R`000 R`000
ASSETS
Non-current assets 50 580 24 309
Property, plant and equipment 27 362 10 561
Deferred tax 3 041 -
Retention debtors 20 177 13 748
Current assets 331 442 236 941
Inventories 2 084 4 690
Loans to related parties - 940
Trade and other receivables 189 594 120 684
Cash and cash equivalents 139 764 110 627
Total assets 382 022 261 250
EQUITY and LIABILITIES
Equity 156 064 111 779
Share capital 32 285 32 285
Retained income 123 771 79 494
Minority interest 8 -
Non-current liabilities 682 557
Deferred tax 682 557
Current liabilities 225 276 148 914
Loans from related parties 1 030 1 185
Other financial liabilities 78 017 -
Current tax payable 6 065 18 130
Trade and other payables 126 295 116 718
Deferred tax 9 967 11 051
Provisions 3 902 1 830
Total equity and liabilities 382 022 261 250
Number of ordinary shares in 200 000 000 200 000 000
issue
Net asset value per share 78.0 55.9
(cents)
Net tangible asset value per 78.0 55.9
share (cents)
Income statement
Audited year Audited year
to to
31 August 31 August
2009 2008
R`000 R`000
Revenue 502 840 450 333
Cost of sales (397 062) (350 731)
Gross profit 105 778 99 602
Other income 1 279 4 775
Operating expenses (31 506) (29 021)
Operating profit 75 551 75 356
Investment revenue 7 750 7 368
Finance costs (386) (432)
Profit before taxation 82 915 82 292
Taxation (23 631) (24 456)
Profit for the year 59 284 57 836
Equity holders of the parent 59 277 57 836
Minority interest 7 -
Adjustment for headline earnings - 236 207
loss on sale of property, plant
and equipment
Headline earnings attributable to 59 513 58 043
ordinary shareholders
Weighted average number of 200 000 000 200 000 000
ordinary shares in issue
Earnings per ordinary share 29.64 28.92
(cents)
Headline earnings per ordinary 29.76 29.02
share (cents)
STATEMENT OF CHANGES IN EQUITY
R`000 Share Share Treasury Retained Minority Total
capital premium shares income interest equity
Balance at 1 2 32 283 - 32 658 - 64 943
September 2007
Profit for the - - - 57 836 - 57 836
year
Dividends - - - - (11 000)
(11 000)
Issue of - 6 703 - - - 6 703
share capital
Treasury - - (6 703) - - (6 703)
shares
Balance at 2 38 986 (6 703) 79 494 - 111 779
31 August 2008
Profit for the - - - 59 277 8 59 285
year
Issue of share - 4 566 - - - 4 566
capital
Treasury - - (4 566) - - (4 566)
shares
Dividends - - - (15 000) - 15 000)
Balance at 2 43 552 (11 269) 123 771 8 156 064
31 August 2009
Cash flow statement
Audited year Audited year
to 31 August to 31 August
2009 R`000 2008 R`000
Cash from operating activities (14 387) 87 133
Net cash from investing activities (19 493) 941
Net cash from financing activities 63 017 (11 000)
Total cash movement for the year 29 137 77 074
Cash at beginning of the year 110 627 33 553
Total cash at end of the year 139 764 110 627
Segmental reporting
The group`s segmental analysis is based on the economic environments in
which it operates as presented below. All the business activities are
related to the construction and erection of electrical plant and
instrumentation.
R`000 South Madagascar Mozambique Total
Africa 2009
and
other
Profit and loss
Contract revenue 366 400 88 632 47 808 502 840
Contract costs (266 (88 427) (41 809) (397 062)
826)
Gross profit 99 574 205 5 999 105 778
Other income 525 702 52 1 279
Operating expenses (30 403) (985) (118) (31 506)
Operating profit 69 696 (78) 5 933 75 551
Investment income 7 708 42 - 7 750
Finance costs (159) (227) - (386)
Profit (loss) before 77 245 (263) 5 933 82 915
tax
Assets and liabilities
Total assets 240 226 72 387 69 409 382 022
Total liabilities (138 (34 105) (53 377) (225 958)
476)
COMMENTARY
Introduction
The directors of B&W are pleased to present the results for the financial
year ended 31 August 2009 ("the year"). B&W successfully weathered
challenging economic conditions to achieve growth in both revenue and
operating profit, albeit moderated by a number of contract delays. Focus on
revising operating procedures yielded improved efficiencies and cost-
savings, and positively impacted the group`s cash position.
The mining sector continued to account for the majority of group revenue. In
line with the board`s plans an increased proportion of group revenue was
derived from infrastructure and oil & gas projects during the year.
Further, new projects were secured to take B&W`s order book to a record high
of R570 million heading into the 2010 financial year. A revised schedule for
commencement of the delayed contracts, together with a timeous start of the
new work, should see a good proportion of the order book translate into
revenue during the 2010 financial year.
Basis of preparation and accounting policies
The accounting policies applied in the preparation of these preliminary
condensed audited annual financial statements, which are based on reasonable
judgments and estimates, are in accordance with International Financial
Reporting Standards ("IFRS") and are consistent with those applied in the
audited annual financial statements for the year ended 31 August 2008. These
preliminary condensed audited annual financial statements as set out in this
report have been prepared in terms of IAS 34: Interim Financial Reporting,
the Companies Act (Act 61 of 1973), as amended, and the Listings
Requirements of the JSE Limited.
COMPARATIVE FIGURES
Certain comparative figures have been reclassified to better comply with
IFRS disclosure requirements.
The reclassifications have either increased or (decreased) the line items
previously reported and the impact is as follows:
Group
2009 2008
R`000 R`000
Balance sheet
Trade and other payables - 45 674
Provisions - 1 830
Trade and other receivables - 33 755
Deferred tax - current liability - 11 051
Deferred tax - non-current liability - (11 051)
Retention debtors - non-current - 13 748
Income statement
Other income - 513
Operating expenses - 512
Operating profit - 1
Profit before taxation - 1
Profit for the year - 1
Statement of changes in equity
Retained income balance 1 September 2007 - (1)
Profit for the year 2008 - (1)
Issue of share capital - 6 703
Treasury shares - (6 703)
- -
Group profile
As one of the three largest providers of electrical and instrumentation
("E&I") services in South Africa, B&W operates in the mining,
infrastructure, oil & gas, industrial, utilities, chemical and food &
beverage industries. Specific services include equipment procurement,
construction management, installation, post-installation commissioning and
plant optimisation.
Review of operations
B&W`s new orders for the year totalled R480 million, 39% of which is
situated outside of South Africa. 62% of the present order book relates to
cross-border contracts.
The mining sector contributed 67% of total group revenue. Three large-scale
projects for a coal mine near Middelburg were awarded during the year which
offset to an extent the negative impact of project delays.
Infrastructure became an increasingly successful focus area with a major
contract win for a cement plant and reticulation work in the Northern Cape.
The group also continued to secure new projects outside of South Africa and
has offices in Madagascar and Mozambique to facilitate the execution of
projects in those regions.
Financial results
Revenue increased 11.7% to R502.8 million compared to R450 million in the
previous year. Operating profit was steady at R75.6 million.
Net profit after tax (NPAT) and earnings per share (EPS) remained relatively
flat at R59.3 million and 29.64 cents per share, respectively.
Headline earnings per share ("HEPS") of 29.76 cents per share compared
favourably with the prior year (2008: 29.0 cents).
B&W has intensified focus on cash management.
The group has maintained a healthy cash position and ended the year with
cash in hand of R140.0 million.
Prospects
B&W remains positive about growth in the year ahead with a record order book
in hand and operational refinements yielding benefits for the group.
The directors believe the overall E&I projects pipeline indicates reasonable
growth opportunities, particularly in the mining sector over the medium-term
and in oil & gas from around 2013/2014.
However, only a marginal recovery is anticipated in the E&I industry in the
short-term and tighter competition for tenders is expected to continue
placing pressure on margins. The group will endeavour to overcome this by
further streamlining operational procedures.
The bulk of current opportunities is situated in South Africa for the
foreseeable future. Nonetheless the group will continue to pursue cross-
border work in Africa, a high growth region where margins can be more
favourable. Cross-border work should continue contributing significantly to
B&W`s top and bottom line growth.
Current economic and market conditions may yield exciting acquisition
opportunities. B&W will pursue these where they will support expansion into
Africa and/or diversification into complementary niche E&I markets.
Renewal of cautionary
Shareholders are referred to the announcement dated 29 October 2009 in which
they were advised that B&W had entered into negotiations, which if
successfully concluded, may have a material effect on the price of the
company`s securities. B&W is currently in negotiations with Pontins
(Proprietary) Limited ("Pontins"). Pontins is a leading earthing and
lightning protection company which will augment B&W`s existing electrical
contracting business with a complementary niche service.
Accordingly, shareholders are advised to continue exercising caution when
dealing in the company`s securities until a further announcement is made.
Dividends
In light of B&W`s healthy cash position, notice is given that a final
dividend of 5 cents per share is hereby declared for the year. Together with
the interim dividend of 2.5 cents per share declared on 20 April 2009, the
total dividend for the year amounts to 25% of NPAT in line with the group`s
dividend policy. The dividend will be financed out of the group`s free cash
flow.
The salient dates for the dividend are as follows:
Last day to trade shares cum dividend Friday, 4 December 2009
Shares trade ex dividend Monday, 7 December 2009
Record date Friday, 11 December 2009
Payment date Monday, 14 December 2009
No share certificates may be dematerialised or rematerialised between
Monday, 7 December 2009 and Friday, 11 December 2009, both dates inclusive.
AUDIT OPINION
The preliminary condensed annual financial statements for the year have been
audited by B&W`s auditors, Certified Master Auditors Inc. Their unqualified
audit report is available for inspection at the company`s registered office.
SUBSEQUENT EVENTS
The board of directors of B&W are not aware of any material events that have
occurred between the end of the year and the date of this report.
Appreciation
Our employees` tenacity in a tough market has continued to drive B&W`s
growth and we are most appreciative of their efforts. We also thank our
fellow directors for their wise counsel which further contributed to our
positive performance. Finally, we thank our clients, shareholders, business
partners and advisors for their continued support.
John Barrow Brian Harley
Chairman Managing Director
On behalf of the board
16 November 2009
Directors:
John Barrow (Chairman); Brian Harley (Managing Director); Danie Evert
(Financial Director); Johan Breedt; Tom Lombard; Ken Nel; Dean Nevay; Gary
Swanepoel; Sam Vilakazi; Wolf Wassermeier*; Jimmy Oosthuizen*; Unati
Mabandla*
*Independent non-executive director
Registered office:
Master Business Associates Secretarial Services (Pty) Limited
234 Alexandra Avenue, Midrand, 1685
(Private Bag X168, Halfway House, 1685)
Designated Adviser:
Merchantec Capital
Transfer secretaries:
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61763, Marshalltown, 2107)
Company secretary:
Master Business Associates Secretarial Services (Pty) Limited
234 Alexandra Avenue, Midrand, 1685
(Private Bag X168, Halfway House, 1685)
Auditors:
Certified Master Auditors Inc.
Investor Relations:
Envisage Investor & Corporate Relations
Date: 16/11/2009 07:05:07 Produced by the JSE SENS Department.
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