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ABU
ABU
ABU - A.B.E. Construction Chemicals - Financial results for the 6 months ended
30 November 2009
a.b.e. CONSTRUCTION CHEMICALS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 1982/005383/06)
Share Code : ABU ISIN : ZAE000102059
("a.b.e." or "the Company")
FINANCIAL RESULTS FOR THE 6 MONTHS ENDED 30 NOVEMBER 2009
HIGHLIGHTS:
- PROFIT BEFORE TAX INCREASED BY 9%
- HEADLINE EARNINGS INCREASED BY 11%
- CASH ON HAND INCREASED TO R29.7 MILLION
INCOME STATEMENT
Unaudited Unaudited Audited
6 months 6 months ended 12 months
ended 30 Nov 2008 ended
30 Nov 2009 31 May 2009
R 000`s R 000`s R 000`s
Revenue 136,630 140,185 262,729
Cost of sales (80,160) (85,559) (162,574)
Gross profit 56,470 54,626 100,155
Other income 112 365 2,271
Distribution costs (4,674) (4,307) (8,638)
Administration expenses (5,076) (5,078) (10,259)
Other expenses (24,757) (25,263) (47,972)
Operating profit 22,075 20,343 35,557
Investment revenue 708 651 1,086
Finance costs (243) (305) (617)
Profit before taxation 22,540 20,689 36,026
Taxation (7,002) (6,643) (10,846)
Profit and total 15,538 14,046 25,180
comprehensive income for the
period
Profit and total
comprehensive income
attributable to:
Equity holders of a.b.e. 15,538 14,046 25,180
Earnings per share 2
- Basic and diluted basic 15,5 14,0 25,2
earnings per share (cents)
- Headline and diluted 15,6 14.0 25,0
headline earnings per share
(cents)
Number of ordinary shares in 100 000 100 000 100 000
issue (`000)
BALANCE SHEET
Unaudited Unaudited Audited
6 months ended 6 months 12 months
30 Nov 2009 ended ended
30 Nov 2008 31 May 2009
R 000`s R 000`s R 000`s
Assets
Non-Current Assets 39,715 38,804 40,329
Property, plant and 39,715 38,804 40,329
equipment
Current Assets 128,731 116,619 121,891
Inventories 50,047 48,973 57,609
Trade and other 48,990 55,884 42,367
receivables
Cash and cash equivalents 29,694 11,762 21,915
Total Assets 168,446 155,423 162,220
Equity and Liabilities
Equity 108,021 91,349 102,483
Share capital 1 1,000 1,000 1,000
Share Premium 33,636 33,636 33,636
Non-Distributable Reserves 16,247 16,374 16,247
Retained income 57,138 40,339 51,600
Liabilities
Non-Current Liabilities 6,983 7,156 8,642
Other financial 2,125 2,835 3,534
liabilities
Provisions 2,402 2,247 2,379
Deferred tax 2,456 2,074 2,729
Current Liabilities 53,442 56,918 51,095
Other financial 2,025 1,012 2,233
liabilities
Current tax payable 8,561 7,935 2,054
Trade and other payables 37,319 45,860 45,538
Provisions 5,537 2,111 1,270
Total Liabilities 60,425 64,074 59,737
Total Equity and 168,446 155,423 162,220
Liabilities
STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months
30 Nov 2009 30 Nov 2008 ended
31 May 2009
R 000`s R 000`s R 000`s
Opening balance as 102,483 85,803 85,803
previously reported
Changes in reserves
Total comprehensive income 15,538 14,046 25,180
for the period
Dividends paid (10,000) (8,500) (8,500)
Closing balance 108,021 91,349 102,483
Comprising:
Share capital 1,000 1,000 1,000
Share Premium 33,636 33,636 33,636
Retained earnings 57,138 40,339 51,600
Non-distributable reserve 16,247 16,374 16,247
Total Shareholders` equity 108,021 91,349 102,483
CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months ended
ended ended 31 May 2009
30 Nov 2009 30 Nov 2008
R 000`s R 000`s R 000`s
Cash flow from
operating activities
Cash generated from 20,771 3,421 23,518
operations
Interest income 708 651 1,086
Finance cost (243) (305) (617)
Tax paid (768) (850) (10,279)
Net cash from operating 20,468 2,917 13,708
activities
Cash flows from
investing activities
Purchase of property, (1,157) (2,041) (4,828)
plant and equipment
Disposal of property, 85 29 545
plant and equipment
Net cash from investing (1,072) (2,012) (4,283)
activities
Cash flows from
financing activities
Proceeds/(repayment) of (1,617) (333) 1,300
other financial
liabilities
Dividend paid (10,000) (8,500) (8,500)
Net cash from financing (11,617) (8,833) (7,200)
activities
Total cash movements 7,779 (7,928) 19,690
Cash at the beginning 21,915 19,690 2,225
of the period
Total cash at the end 29,694 11,762 21,915
of the period
SEGMENTAL ANALYSIS
Reportable segments Company
30 Nov 2009 30 Nov 2008 31 May 2009
Segment revenue - external 136,630 140,185 262,729
customers
Segment profit 22,540 20,689 36,026
Interest expense 465 309 469
Trade receivables 47,762 54,696 41,904
Reportable segments Reconciling Item
30 Nov 2009 30 Nov 2008 31 May 2009
Segment revenue - external -3,659 -3,810 -7,825
customers
Segment profit -9,052 -7,183 -19,814
Interest expense 309 309 469
Trade receivables -1,103 -1,860 -629
Reportable segments South Africa
30 Nov 2009 30 Nov 2008 31 May 2009
Segment revenue - external 126,823 129,689 244,929
customers
Segment profit 27,377 23,699 47,835
Interest expense - - -
Trade receivables 44,789 50,063 39,128
Reportable segments Export
30 Nov 2009 30 Nov 2008 31 May 2009
Segment revenue - external 13,466 14,306 25,625
customers
Segment profit 4,215 4,173 8,005
Interest expense - - -
Trade receivables 4,076 6,493 3,405
Business Activity Company
30 Nov 2009 30 Nov 2008 31 May 2009
Segment revenue - external 136,630 140,185 262,729
customers
Segment gross profit 56,470 54,626 100,155
Business Activity Reconciling Item
30 Nov 2009 30 Nov 2008 31 May 2009
Segment revenue - external -3,659 -3,810 -7,825
customers
Segment gross profit -5,442 -3,726 -11,511
Business Activity Resellers
30 Nov 2009 30 Nov 2008 31 May 2009
Segment revenue - external 48,751 50,369 94,981
customers
Segment gross profit 22,061 21,406 41,347
Business Activity Construction
30 Nov 2009 30 Nov 2008 31 May 2009
Segment revenue - external 78,072 79,320 149,948
customers
Segment gross profit 34,467 31,830 60,748
Business Activity Export
30 Nov 2009 30 Nov 2008 31 May 2009
Segment revenue - external 13,466 14,306 25,625
customers
Segment gross profit 5,384 5,116 9,571
Sales by product category
30 Nov 2009 30 Nov 2008 31 May 2009
Waterproofing 66,682 68,350 140,743
General Construction 49,169 48,410 61,134
Silicones and Sealants 19,049 19,328 60,249
Other 5,389 7,907 8,428
TOTAL 140,289 143,995 270,554
Reconciling item -3,659 -3,810 -7,825
Company 136,630 140,185 262,729
FINANCIAL RESULTS
The directors of a.b.e. are pleased to present the interim results for the six
months ended 30 November 2009.
a.b.e. encountered a challenging trading environment during this period which
saw sluggish activity in the retail/DIY industry, delays in new and existing
construction projects and reduced demand in the export markets.
Revenue declined by 2.5% to R136.6m but a.b.e. grew gross profits by 3.4% to
R56.5m as a result of a close focus on pricing and tight management of raw
materials and other input costs. Tight control was also exercised over
overheads and consequently profit after tax grew by 10.6% to R15.5m. This
result was achieved after taking into account an STC charge of R1.0m in the
period.
Cash on hand increased to R29.7m which places a.b.e. in a strong position to
take advantage of opportunities that may present themselves.
No interim dividend will be paid, which is in line with the Company`s dividend
policy.
CHIEF EXECUTIVE OFFICER
Shareholders are referred to the SENS announcement dated 11 January 2010
regarding the resignation of the CEO Stan Stacey with effect from 31 January
2010 and are advised that progress is being made in recruiting a new CEO. An
appointment will be made by 1 April 2010.
PROSPECTS
Traditionally revenue and hence profits are not earned evenly throughout the
year, the first half being more robust than the second. These conditions are
expected to be more prevalent in 2010 because of the delayed recovery in
economic activity. In addition, the Company has to meet the costs associated
with the resignation of the former CEO.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed interim financial report for the six months ended 30 November 2009
has been prepared in compliance with the Listings Requirements of the JSE
Limited, International Financial Reporting Standards (IFRS) (in particular
International Accounting Standard 34 Interim Financial Reporting) and the
Companies Act of South Africa. These interim financial statements have not been
audited or reviewed by the Company`s auditors.
The accounting policies applied in the presentation of the interim financial
report are consistent with those applied for the year ended 31 May 2009 and the
six months ended 30 November 2008 except for IAS1 - Presentation of Financial
Statements (revised). The adoption of this standard has no material effect on
the results, nor has it required any restatement of the results
These condensed interim financial statements have been prepared in accordance
with the historic cost convention except for certain financial instruments which
are stated at fair value.
The interim financial results are presented in rand, which is a.b.e.`s
functional and presentational currency.
SELECTED EXPLANATORY NOTES
1 SHARE CAPITAL
There has been no change in the share capital in the period under review
and there are 100,000,000 ordinary shares in issue.
2 EARNINGS PER ORDINARY SHARE
The calculation of basic and headline earnings per share is based on net
profit attributable to ordinary shareholders of R15,538,841 (2008:
R14,045,755) and headline earnings of R15,591,080 (2008: R14,016,554).
Reconciliation between earnings and headline earnings:
6 months ended 6 months ended
30 Nov 2009 30 Nov 2008
Basic Earnings 15,538,841 14,045,755
Loss/Profit)on sale of fixed assets 52,239 (29,201)
Headline Earnings 15,591,080 14,016,554
3 POST BALANCE SHEET EVENTS
No material events have occurred between the financial period and the date
of this report.
For and on behalf of the Board
S K Mota L F Avis
Chairman Financial Director
Johannesburg
3 February 2010
Registered Office:
7 Wilcox Road
Isipingo
KwaZulu-Natal
4110
Company Secretary:
William Somerville
Corporate Statutory Services
20 Lurgan Road
Parkview
2193
Transfer Secretaries:
Computershare Investor Services (Pty) Limited
70 Marshall Street
Johannesburg
2001
Directors:
S K Mota*
W R G Post*
L F Avis
S Rault
I Hague
R Patmore**
M Meehan**
* Non-executive
** Independent Non-executive
Designated Advisor: PSG Capital (Pty) Limited
Date: 03/02/2010 09:00:02 Produced by the JSE SENS Department.
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