| Wed 31 Mar 2010, 14:11 | | AET - Alert Steel Holdings Limited - Unaudited condensed financial results for |
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AET
AET
AET - Alert Steel Holdings Limited - Unaudited condensed financial results for
the six months ended 31 December 2009
ALERT STEEL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2003/005144/06)
JSE code: AET ISIN: ZAE000092847
("Alert" or "the company" or "the group")
UNAUDITED CONDENSED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER
2009
Condensed Statement of Comprehensive Income
Unaudited Unaudited
December December
2009 2008
6 months 6 months
R`000 R`000
Revenue 505 234 526 482
Gross profit 115 490 125 759
Other income 7 486 3 803
Operating costs (116 200) (100 752)
Depreciation (4 561) (3 246)
Goodwill impairment(1) (35 104) -
(Loss)/Profit before interest and taxation (32 889) 25 564
Net finance costs (9 223) (6 778)
(Loss) / Profit before taxation (42 112) 18 786
Taxation 1 962 (6 016)
Total comprehensive (loss)/income for the (40 150) 12 770
period, attributable to equity holders
Reconciliation of (loss)/headline earnings:
(Loss)/profit attributable to ordinary (40 150) 12 770
shareholders
Goodwill impairment 35 104 -
Headline (loss)/earnings attributable to (5 046) 12 770
ordinary shareholders
Weighted average number of shares in issue 248 428 248 428
570 570
Fully diluted weighted average number of shares 256 028 256 028
in issue 570 570
Loss/earnings per share (cents) (16,2) 5,1
Headline loss/earnings per share (cents) (2,0) 5,1
Fully diluted loss/earnings per share (cents) (15,8) 5,0
Fully diluted headline loss/earnings per share (2,1) 5,0
(cents)
Condensed Group Statement of Financial Position
Unaudited Audited
December June 2009
2009 R`000
R`000
ASSETS
Non-current assets 177 351 198 420
Investment Property 5 991 5 991
Property, plant and equipment 146 113 134 486
Goodwill (1) 19 561 54 665
Other financial assets 644 204
Deferred taxation 5 042 3 074
Current assets 313 061 321 838
Inventories 163 653 152 622
Loans to joint ventures 6 692 13 938
Current tax receivable 3 839 3 641
Trade and other receivables 134 372 142 149
Cash and cash equivalents 4 505 9 488
Total assets 490 412 520 258
EQUITY AND LIABILITIES
Total shareholders` funds 150 900 191 050
Non-current liabilities 78 782 64 607
Other financial liabilities 78 782 63 978
Deferred taxation - 629
Current liabilities 260 730 264 601
Loans from joint ventures 337 3 260
Other financial liabilities 19 219 20 208
Current tax payable 833 665
Trade and other payables 88 758 111 867
Provisions - 457
Bank overdraft 151 583 128 144
Total equity and liabilities 490 412 520 258
Number of shares in issue (net of treasury and 248 428 246 714
transaction shares) 570 285
Number of shares including share based payment 248 428 248 428
shares 570 570
Fully diluted number of shares in issue (2) 256 028 256 028
570 570
Net asset value per share (cents) 60,7 76,9
Net tangible asset value per share (cents) 52,9 54,9
Notes:
(1) Goodwill is carried at cost less any accumulated impairment. The excess
of the group`s interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities over the cost of the business
combinations is immediately recognised in the loss.
(2) The 7 600 000 ordinary shares issued to the Alert Share Incentive Scheme
have been treated as "treasury shares".
Condensed Group Statements of Changes in Equity
Unaudited Unaudited
December December
2009 2008
6 months 6 months
R`000 R`000
Balance at beginning of period 191 050 194 302
Total earnings (40 150) 12 770
Dividends declared - (7 629)
Balance at end of period 150 900 199 443
Condensed Group Statement of Cash Flows
Unaudited Unaudited
December December
2009 2008
6 months 6 months
R`000 R`000
Cash flow from operating activities (29 932) 8 981
Cash flow from investing activities (12 305) (72 553)
Cash flow from financing activities 13 815 12 845
Net increase in cash and cash equivalents (28 422) (50 727)
Cash and cash equivalents at beginning of period (118 656) (82 789)
Cash and cash equivalents at end of period (147 078) (133 516)
Condensed Segmental Report
Unaudited Unaudited
December December
2009 2008
6 months 6 months
R`000 R`000
Income Statements
Revenue
Retail 477 026 489 414
Reinforcing manufacturing 28 208 37 068
505 234 526 482
Profit before interest, goodwill impairment and
taxation
Retail 3 164 23 735
Reinforcing manufacturing (949) 1 829
2 215 25 564
Depreciation
Retail 4 441 3 217
Reinforcing manufacturing 120 29
4 561 3 246
Unaudited Audited
December June 2009
2009
R`000
Balance Sheets
Reportable segment assets
Retail 426 977 397 522
Reinforcing manufacturing 17 805 31 939
444 782 429 461
Reportable segment liabilities
Retail 182 393 173 509
Reinforcing manufacturing 4 366 23 001
186 759 196 510
Reconciliation of segmental assets
Total assets 490 412 520 258
Goodwill (19 561) (54 665)
Investment property (5 991) (5 991)
Deferred taxation (5 042) (3 074)
Current taxation (3 839) (3 641)
Loans receivable (6 692) (13 938)
Cash and cash equivalents (4 505) (9 488)
Segmental assets 444 782 429 461
Reconciliation of segmental liabilities
Current liabilities 260 730 264 601
Bank overdrafts (151 583) (128 144)
Current taxation liabilities (833) (665)
Loans payable (337) (3 260)
Non-current liabilities 78 782 63 978
Segmental liabilities 186 759 196 510
OVERVIEW
The directors of Alert present the unaudited interim financial results for
the six months ended 31 December 2009 ("the interim period"). The material
decline in the financial results of the company is a reflection of the
global financial crises. The six months under review were extremely
difficult for the company having regard to depressed market demand and
margins.
Acquisitions made during the previous reporting period, the opening of the
new branch in Wonderboom and the completion of the Alert Distribution
Centre, were the main contributors to the reported loss.
FINANCIAL RESULTS
Revenue decreased by 4% to R505,2 million (2008: R526,5 million) during the
interim period. Revenue is based on a combination of higher volumes
attributable to the new branches but lower selling prices as a result of
tough competition in the market.
Operating costs increased by 15,3% to R116,2 million (2008: R100,8 million)
mainly as a result of the acquisition and opening of new branches, adding an
estimated 8,500 square meters to the current retail space of the group. The
main driver for the increase in finance costs was the completion of the new
Distribution Centre, situated in East Lynne, Pretoria.
The headline loss of R5 million (headline profit 2008: R12,8 million)
resulted from lower revenues experienced during the interim period and
increases in operating costs as a result of the acquisition and opening of
new branches.
PROSPECTS
The directors of the company anticipate an increase in steel prices during
the second half of the financial year which should impact positively on the
group. The sector providing low cost housing, is still very active and the
company established a contracts department focusing on the effective
management of the contracts to minimise risk to the group.
With the return of the mining sector and commercial banks to the South
African market, the directors believe that as a result of the company`s
broader base, being the additional retail space and Distribution Centre, the
company will be well geared for the expected upswing.
Since January 2010, the group has exported steel to Zimbabwe, and on 1 March
2010, the group acquired a 51% share in a Zimbabwean based company. The
directors believe that the revenue from exports into Africa will be a
material contributor to the profits of the group during the next 5 to 10
years.
With the positive economic outlook in mind, the directors will continue
investigating new opportunities regarding product ranges, services, new
sites and the relocation of existing branches.
SHARE CAPITAL
1 714 285 Alert ordinary shares were issued during the period as final
payment for the "Steel Giant" acquisition.
BASIS OF PREPARATION OF THE UNAUDITED RESULTS
Statement of compliance
The condensed unaudited interim financial statements comprise a consolidated
balance sheet at 31 December 2009, a consolidated income statement,
consolidated statement of changes in equity, summarised consolidated cash
flow statement and segmental report for the six months ended 31 December
2009. The condensed financial statements have been prepared in accordance
with the recognition and measurement criteria of International Financial
Reporting Standards ("IFRS"), the presentation and disclosure requirements
of IAS 34, Interim Financial Reporting, AC500 Standards as issued by the
Accounting Practices Board or its successor for Interim Reporting, the JSE
Listings Requirements and the South African Companies Act. The accounting
policies adopted by the company for the period under review, which comply
with IFRS, are consistent with those applied for the comparative period.
Basis of measurement
The financial statements have been prepared on the historic cost basis
except for certain financial instruments measured at fair value.
DIVIDEND POLICY
No dividend was declared or paid during the period.
STATEMENT ON GOING CONCERN
The condensed unaudited group financial statements for the six months ended 31
December 2009 have been prepared on the going-concern basis since the
directors have every reason to believe that the company has adequate resources
in place to continue in operation for the foreseeable future.
On behalf of the Board
WF Schalekamp WW Mentz
Managing Director Financial Director
31 March 2010
CORPORATE INFORMATION
Non executive directors: EG Dube (Chairman), OV Jevon, R van Rooyen
Executive directors: WF Schalekamp, WW Mentz
Registration number: 2003/005144/06
Registered address: 12 Gompou Street, East Lynne, 0186
Postal address: PO Box 29607, Sunnyside, 0132
Company secretary: M Pretorius
Telephone: (012) 800 0004
Facsimile: (012) 800 4661
Transfer secretaries: Computershare Investor Services 2004 (Pty) Limited
Designated Adviser: Vunani Corporate Finance
Date: 31/03/2010 14:11:01 Produced by the JSE SENS Department.
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