| Tue 20 Jul 2010, 7:05 | | ELI - Ellies Holdings Limited - Reviewed Group Results For The Year Ended 30 |
|
ELI
ELI
ELI - Ellies Holdings Limited - Reviewed Group Results For The Year Ended 30
April 2010
ELLIES HOLDINGS LIMITED
(Registration number 2007/007084/06)
Share code: ELI
ISIN: ZAE000103081
Reviewed group results for the year ended 30 April 2010
Abridged consolidated statement of financial position
Restated Restated
Reviewed as at Audited as at Audited as at
30 April 2010 30 April 2009 30 April 2008
R R R
ASSETS
Non-current assets 264,159,073 258,468,974 78,028,128
Property, plant and
equipment 33,059,016 31,383,675 26,582,766
Goodwill 217,553,983 217,553,983 47,704,840
Other intangible assets 7,936,506 4,893,754 -
Deferred taxation 5,609,568 4,637,562 3,740,522
Current assets 510,029,423 473,995,554 387,638,058
Inventories 297,811,042 287,290,864 190,233,149
Trade and other
receivables 193,365,421 156,134,729 150,468,069
Taxation receivable 633,618 1,952,535 -
Other current assets - 897,932 1,312,511
Bank and cash balances 18,219,342 27,719,494 45,624,329
Total assets 774,188,496 732,464,528 465,666,186
EQUITY AND LIABILITIES
Capital and reserves 517,253,770 385,683,763 235,268,251
Share capital and
premium 501,493,956 440,559,669 355,171,918
Non-distributable
reserves (178,666,833) (178,335,326) (178,194,003)
Accumulated profits 194,426,647 123,459,420 58,290,336
Non-current liabilities 33,625,451 90,369,337 22,665,281
Interest-bearing
liabilities 33,625,451 28,178,845 406,647
Vendor loans payable - 60,634,835 22,126,127
Deferred taxation - 1,555,657 132,507
Current liabilities 223,309,275 256,411,428 207,732,654
Interest-bearing
liabilities 23,380,458 8,394,783 326,303
Vendor loans payable 13,607,482 31,659,823 4,276,518
Trade and other payables 147,345,006 130,242,536 95,149,974
Provisions 1,492,774 1,274,726 1,226,308
Taxation payable 6,011,263 3,552,974 20,863,068
Bank overdrafts 31,472,292 81,286,586 85,890,483
Total equity and
liabilities 774,188,496 746,364,528 465,666,186
Shares in issue and to
be issued at end of
year (number of shares) 303,505,691 270,674,399 234,499,914
Shares in issue 303,505,691 246,638,901 233,526,089
Shares to be issued - 24,035,498 973,825
Net asset value per
share (cents) 170.43 156.38 100.75
Net tangible asset
value per share (cents) 96.13 68.17 80.32
Abridged consolidated statement of comprehensive income
Reviewed as at Audited as at
30 April 2010 30 April 2009
R R
Reviewed year Audited year
ended ended
30 April 2010 30 April 2009
R R
Revenue 1,156,477,451 976,846,314
Profit before
depreciation,
amortisation, interest
and taxation ("EBITDA") 132,432,542 131,409,064
Depreciation (11,904,055) (10,018,633)
Amortisation of
intangibles (1,427,674) (8,202,663)
Profit before
impairments, interest
and taxation 119,100,813 113,187,768
Interest received 947,770 1,143,576
Interest paid (19,718,614) (24,601,855)
Net profit before
taxation ("PBT") 100,329,969 89,729,489
Taxation (29,362,742) (24,560,405)
Net profit after
taxation 70,967,227 65,169,084
Other comprehensive income:
Foreign currency
translation reserve (331,507) (141,323)
Total comprehensive
income for the year 70,635,720 65,027,761
Supplementary information
Basic earnings per
share (cents) 26.19 26.42
Headline earnings per
share (cents) 25.96 26.42
Core headline earnings
per share (cents) 29.43 32.16
Diluted earnings per
share (cents) 23.38 24.08
Diluted headline
earnings per share (cents) 23.18 24.08
Diluted core headline
earnings per share (cents) 26.27 29.30
Shares in issue (number of shares):
- At end of the year 303,505,691 270,674,399
- Weighted 270,944,245 246,638,901
- Diluted 303,505,691 270,674,399
Reconciliation of headline earnings and core headline
earnings
Reviewed year Audited year
ended ended
30 April 2010 30 April 2009
R R
Net profit after taxation 70,967,227 65,169,084
Adjusted for:
Profit on sale of property,
plant and equipment (857,633) (4,660)
Tax effect on adjustments 240,137 1,305
Headline earnings
attributable to
ordinary shareholders 70,349,731 65,165,729
Adjusted for:
Amortisation of intangibles 1,427,674 8,202,663
IFRS implied interest
on vendor liabilities 8,355,361 8,238,889
Tax effect on adjustments (399,749) (2,296,746)
Core headline earnings
attributable to ordinary
shareholders 79,733,017 79,310,535
Abridged consolidated statement of cash flows
Reviewed year Audited year
ended ended
30 April 2010 30 April 2009
R R
Cash flows from
operating activities 63,267,842 (4,859,851)
Cash flow from
investing activities (17,387,516) (31,600,918)
Cash flows from
financing activities (5,566,184) 21,084,613
Net increase/
(decrease) in cash and
cash equivalents 40,314,142 (15,376,156)
Cash and cash
equivalents at the
beginning of the year (53,567,092) (40,266,154)
Cash acquired as part
of business combinations - 2,075,218
Cash and cash equivalents
at the end of the year (13,252,950) (53,567,092)
Abridged statement of changes in equity
Share capital Non-distributable
and premium reserves
R R
Balances at
1 May 2008 355,171,918 (178,194,003)
Shares issued at a
premium (net of costs) 85,387,751 -
Total comprehensive
income for the year - (141,323)
Balances at 30
April 2009 440,559,669 (178,335,326)
Shares issued at a
premium (net of costs) 60,934,287 -
Total comprehensive
income for the year - (331,507)
Balances at 30
April 2010 501,493,956 (178,666,833)
Accumulated
profits Total
R R
Balances at
1 May 2008 58,290,336 235,268,251
Shares issued at a
premium (net of costs) - 85,387,751
Total comprehensive
income for the year 65,169,084 65,027,761
Balances at 30
April 2009 123,459,420 385,683,763
Shares issued at a
premium (net of costs) - 60,934,287
Total comprehensive
income for the year 70,967,227 70,635,720
Balances at 30
April 2010 194,426,647 517,253,770
Segmental analysis
Strategic Business Unit
Reviewed year ended
30 April 2010
Revenue PBT
R
Wholesale distribution
of consumer goods
and services 985,310,498 81,414,144
Infrastructural
electrification 171,166,953 18,915,825
Group 1,156,477,451 100,329,969
Audited year ended
30 April 2009
Revenue PBT
R
Wholesale distribution of
consumer goods and services 759,713,152 66,586,280
Infrastructural
electrification 217,133,162 23,143,209
Group 976,846,314 89,729,489
Notes to the reviewed year end results
Reviewed results for the year-ended 30 April 2010
The results for the year ended 30 April 2010 have been reviewed by PKF (Jhb)
Inc.
and their unqualified review report is available for inspection at the group`s
registered office.
Comparatives
The Statements of Financial Position for 30 April 2008 and 2009 have been
restated due to the misclassification of a portion of the warranty provision in
these years, as explained in the commentary. The 30 April 2008 Statements of
Comprehensive Income and Cash Flows have not been shown as the misclassification
has no impact on these statements.
Basis of preparation and accounting policies
The results for the year ended 30 April 2010 have been prepared in accordance
with, and comply with IFRS, IAS 34, AC 500 series of Interpretations, the South
African Companies Act of 1973, as amended, and the JSE Listing Requirements.
The accounting policies and methods of computation are consistent with those
applied in the annual financial statements for 30 April 2009 except for the
first time application of IAS 1 (revised) that resulted in changed presentation.
Commentary
Ellies Holdings Limited ("Ellies" or "the group") presents its reviewed annual
results for the year ended 30 April 2010
Through the year, Ellies has continued to increase market share and overall has
grown profits, performing better in the second than in the first half of the
financial year. Overall profit growth is notwithstanding recessionary pressures
on infrastructural electrification, which negatively impacted on Megatron`s
contribution to the group. . Management is confident that the group is
positioned to capitalise on growth opportunities and increased trading as
economic conditions recover.
Financial results
Although recessionary conditions continued throughout the year, profitability
improved dramatically in the second six month period and overall the results
for the year are satisfactory. Headline earnings grew by 8% over the full year
2010: R 70.3m vs. 2009: R65.2m), after dropping by 10.1% in the first half of
the year.
HEPS compared to the prior year dropped slightly by 1.7%. This is as a result of
the additional issue of 24,3m shares relating to the Megatron overachievement of
warranted profits in June 2009.
The key indicators are as follows:
Revenue is up 18% to R1 156,5 m (2009: R976,8m), which reflects growth in
market share which has been achieved against a 2,8% sacrifice in margin.
The group`s liquidity is much improved with cash flows from operations of
R63,3m for the year. Interest bearing debt has been reduced by R62,4 m to
R88,5 m and vendor liabilities have been reduced by R78,7m,
During the year, it was identified that the provision for warranty claims in
prior year results included an incorrectly classified provision that should have
been netted off the cost of inventory. . The effect of the reclassification on
the prior year figures is to reduce both provisions and inventory by R13,9 m
(2008: R12,5 m). The reclassification of this provision has had no impact on
earnings or net asset value for the current or prior years.
Review of operations
The "wholesale distribution of consumer goods and services", including the
Satellite Television performed above expectations with steady demand through the
furniture stores, independent and national retail outlets. A focus on the
management of credit and inventory (in particularly regarding generators) has
translated into improved cash flows for the year.
The "Infrastructural electrification" division`s management is optimistic
regarding prospects in the current year and attributes the disappointing
contribution during the year under review to delays in capital expenditure in
the residential building and mining sectors.
Prospects
Ellies` diversity of products and customer base limits the impact of the current
adverse economic climate, but management expects conditions to remain testing in
the short term. The High Definition and Digital Product advances, the Corporate
and Ellies Power divisions, and growth in exports to neighbouring countries
offset some weakness in local demand. Ellies has established a branch in
Swaziland and representative offices in Zambia and Zimbabwe to foster exports to
these regions.
While recessionary conditions have impacted on the Ellies group, they have also
eliminated some price cutting competitors and regulatory changes have created
barriers to entry for these competitors in the future. Ellies continues to
emphasise quality and has become a member of SEDEX ("Supplier Ethical Data
Exchange"), which is a UK membership organisation for businesses committed to
continuous improvement of the ethical performance of their supply chains.
The Ellies Appliances division has made pleasing inroads in a relatively short
time and is expected to be a substantial contributor to earnings in the future.
In order to capitalise on trends toward energy conservation and the reduction of
green house effects, Ellies has entered the renewable energy sector including
solar power, solar heating and energy efficient lighting, a sector which has
great potential.
Ellies is establishing a "Green office" environment to showcase its service and
product offerings.
Although there has been a delay in the rollout of Digital migration, the group
will benefit and participate in the ultimate conversion of all terrestrial
households to digital reception.
The Megatron business has been affected by the slowdown in the residential
building and mining sectors. Demand has rebounded in the mining sector and
several significant contracts have recently been won. The residential sector
continues to improve but off a reduced base. During the year there were
significant investments in both technology and manufacturing capacity.
Investments were made in the type testing of new equipment as well as the
commissioning of a transformer production facility. Management anticipate that
the benefits there from will materialise in the current year.
Although no final agreement was reached with Power Line Africa, thus resulting
in no acquisition at this time, the strong synergies between our two operations
remain. We will continue the strong business relationship developed and foresee
excellent benefits from joint activities in Africa.
The board expresses a positive and optimistic outlook with regard to the group`s
organic growth and opportunities, with continued benefits from improved capacity
utilisation. With the improved liquidity of the group, management believes that
they are well placed to take advantage of available opportunities.
Cash dividend declaration
Shareholders are advised that a cash dividend of 5 cents per share has been
declared. The salient dates are as follows:
Last date to trade "cum" dividend Thursday, 5 August 2010
Shares trade "ex" dividend Friday, 6 August 2010
Record date Friday, 13 August 2010
Payment of dividend Monday, 16 August 2010
Shareholders may not dematerialise or rematerialise their shares between Friday,
6 August 2010 and Friday, 13 August 2010, both days inclusive.
Appreciation
The directors and management wish to thank all staff for their efforts and
loyalty
over these challenging times. We would also like to thank all our customers,
business partners, advisors suppliers and shareholders for their continued
support
and faith in the group.
By order of the board
ER Salkow WMG Samson
Chairman CEO
20 July 2010
Ellies Holdings Limited
(Registration number 2007/007084/06)
Share code: ELI
ISIN: ZAE000103081
Directors
Executive Directors Non-executive Directors
ER Salkow (Chairman) AC Brooking
WMG Samson (Chief executive officer) MR Goodford
MF Levitt (Chief financial officer) MS Mazwi
RH Berkman
RE Otto
Registered office
94 Eloff Street Ext, Village Deep,
Johannesburg, 2001
(PO Box 57076, Springfield, 2137)
Designated advisor
Java Capital (Pty) Limited
2nd Floor, 2 Arnold Road, Rosebank, 2196
(PO Box 2087, Parklands, 2121)
Transfer secretaries
Link Market Services South Africa Limited
5th Floor, 11 Diagonal Street, Johannesburg, 2001
(PO Box 4844, Johannesburg, 2000)
Auditors
PKF (Jhb) Inc.
42 Wierda Road West, Wierda Valley, Sandton, 2196
(Private Bag X10046, Sandton, 2146)
Company secretary
Probity Business Services (Pty) Limited
3rd Floor, The Mall Offices, Cradock Avenue,
Rosebank, 2196
(PO Box 85392, Emmarentia, 2029)
Date: 20/07/2010 07:05:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
