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ELR ELRP
ELR
ELR/ELRP - ELB Group Limited - Reviewed group provisional report and final cash
dividend declarations for the year ended 30 June 2010
ELB GROUP LIMITED
Incorporated in the Republic of South Africa
Registration number 1930/002553/06
Share codes: ELR & ELRP
ISIN: ZAE000035101 & ZAE000035333
(`ELB`, the `Company` or the `Group`)
REVIEWED GROUP PROVISIONAL REPORT AND FINAL CASH DIVIDEND DECLARATIONS FOR THE
YEAR ENDED 30 JUNE 2010
COMMENTS
INTRODUCTION
The ELB Group is a total solutions provider to the mining, minerals, power,
port, construction and industrial sectors in the field of materials handling and
appropriate process plants. This is achieved through ELB generated innovation
and the supply with world class partners of equipment and technology. The Group
operates in Africa and Australia.
ELB is an investment holding company owning 85 percent of ELB Engineering
Limited (ELB Engineering) with the remaining 15 percent owned by the ELB
Educational Trust established as the Group`s BEE partner promoting the education
of historically disadvantaged South Africans in engineering disciplines.
FINANCIAL RESULTS
The ELB Group has once again produced satisfactory results considering that
trading conditions remained difficult during the period.
Sales decreased marginally by 0,4 percent from R1 246 million in 2009 to R1 241
million in 2010.
Headline earnings per share on the other hand increased by 3,4 percent from
189,1 cents per share in 2009 to 195,6 cents per share in 2010.
Net asset value per share increased by 19,3 percent from 1 078 cents per share
in 2009 to 1 286 cents per share in 2010.
CASH FLOW
Cash flow management remains a high priority for the ELB Group. The balance
sheet remains strong with sufficient liquidity to meet the challenges of the
coming year.
PROSPECTS
The ELB Group will continue to benefit from its strategy of focusing on material
handling and appropriate process plant solutions.
The prospects for the coming twelve months are more encouraging than they were
this time last year.
SOCIAL RESPONSIBILITY
As mentioned above, ELB`s empowerment partner is the ELB Educational Trust
established to promote the education of historically disadvantaged South
Africans in engineering disciplines. To this end bursaries were awarded to
students at various South African universities.
ELB also made substantial donations to the St Vincent School for the Deaf, the
Masibambane College in Orange Farm, the John Wesley Community Centre in Benoni
and the Ligbron Academy of Technology. These institutions have been identified
as worthy of ELB`s support and will further assist the historically
disadvantaged in our community.
BOARD OF DIRECTORS
Mr Joe Matsau resigned from the board on 1 September 2009.
Independent director, Mr Theunis de Bruyn, was appointed lead independent
director on 20 May 2010.
ACCOUNTING POLICIES
The reviewed provisional financial statements have been prepared in accordance
with International Accounting Standard (IAS) 34: Interim Financial Reporting.
Accounting policies accord with International Financial Reporting Standards
(IFRS), and are consistent with those applied in the financial year ended 30
June 2009; with the exception of the implementation of IAS 1 (revised) and IFRS
8 which have introduced certain changes to the presentation of the financial
statements and segment information, in this provisional report. The provisional
financial statements also comply with the South African Companies Act.
REVIEW BY THE INDEPENDENT AUDITOR
KPMG Inc, the Company`s independent auditor, has reviewed the provisional
financial statements contained in this provisional report and has expressed an
unmodified conclusion on the provisional financial statements. The review report
is available for inspection at the Company`s registered office.
DIVIDENDS
The final dividend has been increased from 20 cents in 2009 to 30 cents in 2010
reflecting the Board`s confidence in the prospects for the ELB Group going
forward.
The total dividend for the year is therefore 42 cents per share versus 30 cents
per share for the 2009 financial year, representing an increase of 40 percent.
On behalf of the Board
A G Fletcher Boksburg
Chairman 21 September 2010
GROUP INCOME STATEMENT
Reviewed Audited
Year Year
ended ended
30 Jun 10 30 Jun 09
R 000 R 000
Sales 1 241 323 1 245 817
Operating costs excluding depreciation (1 157 413) (1 170 147)
Operating profit before depreciation 83 910 75 670
Depreciation (4 837) (5 108)
Profit from operations 79 073 70 562
Profit on realisation of non current assets 3 609 4 232
held for sale
Finance income 11 894 27 953
Finance expenses (5 162) (9 717)
89 414 93 030
Profit before income tax
Income tax expense (26 974) (29 562)
Profit for the year 62 440 63 468
Profit for the year attributable to:
Ordinary shareholders of ELB 54 789 55 526
Non controlling interests in subsidiaries 7 651 7 942
62 440 63 468
CALCULATION OF GROUP HEADLINE EARNINGS
Reviewed Audited
Year Year
ended ended
30 Jun 10 30 Jun 09
R 000 R 000
Profit attributable to ordinary shareholders 54 789 55 526
of ELB from the income statement
Deduct: Items excluded from headline earnings 3 747 4 230
as detailed below:
Profit / (loss) on disposal of plant and
equipment:
Included in profit from operations 225 ( 313)
Profit on realisation of non current assets 3 609 4 232
held for sale
Income tax effect of items excluded from ( 63) 277
headline earnings
Non controlling interests in items excluded ( 24) 34
from headline earnings
Headline earnings 51 042 51 296
Weighted average number of ordinary shares 26 101 27 128
(excluding treasury shares) on which basic
earnings per ordinary share are based (000`s)
Earnings per ordinary share (cents)
- basic and diluted 209.9 204.7
Headline earnings per ordinary share (cents)
- basic and diluted 195.6 189.1
Dividends declared for the year per ordinary 42 30
share (cents)
GROUP STATEMENT OF COMPREHENSIVE INCOME
Reviewed Audited
Year Year
Ended ended
30 Jun 10 30 Jun 09
R 000 R 000
Profit for the year from the income statement 62 440 63 468
Other comprehensive income 2 330 (14 927)
Foreign currency translation adjustments for
foreign operations
Adjustments 2 330 (14 927)
Income tax effect - -
Total comprehensive income for the year 64 770 48 541
Total comprehensive income for the year
attributable to:
Ordinary shareholders of ELB 56 769 42 838
Non controlling interests in subsidiaries 8 001 5 703
64 770 48 541
GROUP BALANCE SHEET
Reviewed Audited
30 Jun 10 30 Jun 09
R 000 R 000
ASSETS
Non current assets 80 033 59 888
Property, plant and equipment 62 158 39 617
Non current loan receivable 3 951 3 469
Deferred income tax assets 13 924 16 802
Current assets 875 153 816 750
Inventories and construction contract work not 312 028 373 079
yet billed
Receivables and other current assets 202 075 151 785
Income tax refundable 8 905 1 597
Cash and cash equivalents 352 145 290 289
Total assets 955 186 876 638
EQUITY AND LIABILITIES
Equity attributable to ordinary shareholders of 318 334 291 196
ELB
Issued capital 25 192 25 192
Treasury shares (55 123) (31 161)
Reserves 13 580 902
Retained earnings 334 685 296 263
Preference shares 8 8
Total equity attributable to equity holders of 318 342 291 204
ELB
Non controlling interests in subsidiaries 35 738 27 759
Total equity 354 080 318 963
Non current liabilities 21 582 19 333
Interest bearing borrowings 10 543 7 606
Provision for trade back commitments 10 097 11 107
Deferred income tax liabilities 942 620
Current liabilities 579 524 538 342
Non interest bearing payables and other current 479 911 379 015
liabilities
Interest bearing payables 99 075 150 158
Income tax payable 538 9 169
Total equity and liabilities 955 186 876 638
Ordinary shares in issue (000`s) 33 860 33 860
Deduct: Treasury shares in issue (000`s) 9 114 6 842
Ordinary shares in issue on which net asset 24 746 27 018
value per ordinary share is calculated
Net asset value per ordinary share (cents) 1 286 1 078
GROUP STATEMENT OF CHANGES IN EQUITY
Attributable to ordinary shareholders of ELB
Issued Treasury Retained
capital shares Reserves earnings Total
R 000 R 000 R 000 R 000 R 000
Balance at 30 June 2008 25 192 (24 758) 9 163 254 251 263 848
Total comprehensive (12 688) 55 526 42 838
income for the year
Profit for the year 55 526 55 526
Other comprehensive
income
Foreign currency
translation adjustments
for foreign entities
Adjustments (12 688) (12 688)
Income tax effect - -
Ordinary dividends paid (13 514) (13 514)
Increase in share 4 427 4 427
options reserve
Increase in treasury (6 403) (6 403)
shares held by the share
trusts
Balance at 30 June 2009 25 192 (31 161) 902 296 263 291 196
Total comprehensive 1 980 54 789 56 769
income for the year
Profit for the year 54 789 54 789
Other comprehensive
income
Foreign currency
translation adjustments
for foreign entities
Adjustments 1 980 1 980
Income tax effect - -
Ordinary dividends paid (8 371) (8 371)
Increase in share 2 702 2 702
options reserve
Redundant items in the 7 996 (7 996) -
foreign currency
translation reserve
transferred to retained
earnings
Increase in treasury (23 962) (23 962)
shares held by the share
trusts
Balance at 30 June 2010 25 192 (55 123) 13 580 334 685 318 334
GROUP STATEMENT OF CHANGES IN
EQUITY continued
Attributable
to ordinary Non
shareholders controlling Reviewed
of ELB Preference interests in Total
Total shares subsidiaries equity
R 000 R 000 R 000 R 000
Balance at 30 June 2008 263 848 8 21 710 285 566
Total comprehensive 42 838 5 703 48 541
income for the year
Profit for the year 55 526 7 942 63 468
Other comprehensive
income
Foreign currency
translation adjustments
for foreign entities
Adjustments (12 688) (2 239) (14 927)
Income tax effect - - -
Ordinary dividends paid (13 514) ( 435) (13 949)
Increase in share 4 427 781 5 208
options reserve
Increase in treasury (6 403) (6 403)
shares held by the share
trusts
Balance at 30 June 2009 291 196 8 27 759 318 963
Total comprehensive 56 769 8 001 64 770
income for the year
Profit for the year 54 789 7 651 62 440
Other comprehensive
income
Foreign currency
translation adjustments
for foreign entities
Adjustments 1 980 350 2 330
Income tax effect - - -
Ordinary dividends paid (8 371) ( 498) (8 869)
Increase in share 2 702 476 3 178
options reserve
Redundant items in the - - -
foreign currency
translation reserve
transferred to retained
earnings
Increase in treasury (23 962) (23 962)
shares held by the share
trusts
Balance at 30 June 2010 318 334 8 35 738 354 080
GROUP CASH FLOW STATEMENT
Reviewed Audited
Year Year
ended ended
30 Jun 10 30 Jun 09
R 000 R 000
Cash inflow from operating activities 113 483 12 873
before dividends paid
Dividends paid (8 869) (13 949)
Cash inflow / (outflow) from operating 104 614 (1 076)
activities
Cash outflow from investment activities (27 061) (3 983)
Cash outflow from financing activities (21 549) (7 864)
Cash inflow / (outflow) for the year 56 004 (12 923)
Foreign currency translation and exchange 5 852 (12 022)
adjustments to cash and cash equivalents
Increase / (decrease) in cash and cash 61 856 (24 945)
equivalents
Cash and cash equivalents at the beginning 290 289 315 234
of the year
Cash and cash equivalents at the end of the 352 145 290 289
year
Reconciliation to the balance sheet
Current assets - cash and cash equivalents 352 145 290 289
NOTES
Capital commitments
At 30 June 2010 there were capital commitments of R 10 724 000 (30 June 2009
R 23 837 000). The commitments comprise additions and improvements to existing
property of R 10 523 000, which will be met from mortgage bond facilities
available to the Group, and equipment of R 201 000 which will be met from the
Group`s cash and cash equivalents.
Contingent liabilities
A Group entity has issued a guarantee of R 830 000 in favour of a raw material
supplier to a company which was previously part of the Group and has now been
sold. The guarantee is cancellable by three calendar months notice. A financial
guarantee liability of R 85 000 has been raised in respect of the guarantee.
ELB Engineering Services operates in the engineering contracting business and
is exposed to the risks associated with engineering contracts. These risks are
managed on the basis of limited liability.
All known liabilities of the group have been accrued. However a contractual
dispute has arisen that the directors believe will be unlikely to result in a
material loss.
SEGMENT ANALYSIS
Eliminate
African Australian inter
Total operations operations company
R 000 R 000 R 000 R 000
Reviewed
Year ended 30 June 2010
Sales 1 241 323 1 131 657 109 666 -
Profit for the year 62 440 57 667 4 773 -
Headline earnings 51 042 46 985 4 057 -
Assets 955 186 830 115 145 207 (20 136)
Liabilities 601 106 591 507 29 735 (20 136)
Audited
Year ended 30 June 2009
Sales 1 245 817 1 115 488 130 329 -
Profit for the year 63 468 52 535 10 933 -
Headline earnings 51 296 42 025 9 271
Assets 876 638 758 957 121 136 (3 455)
Liabilities 557 675 531 682 29 448 (3 455)
FINAL CASH DIVIDEND DECLARATIONS
The directors have declared the following final cash dividends for the year
ended 30 June 2010.
PREFERENCE DIVIDEND NUMBER 119
A final cash dividend has been declared at the rate of 6% per annum for the
second six month period on the 6% fixed cumulative redeemable preference shares
of R2 each, equivalent to 6 cents per preference share.
ORDINARY DIVIDEND NUMBER 125
A final cash dividend of 30 cents per share has been declared on the ordinary
shares.
The salient dates in respect of both dividends are:
Last day to trade cum dividend Friday, 22 October 2010
Shares commence trading ex dividend Monday, 25 October 2010
Record date Friday, 29 October 2010
Date of payment Monday, 1 November 2010
Share certificates may not be
dematerialised or rematerialised
between Monday, 25 October 2010,
and Friday, 29 October 2010,
both dates inclusive.
By order of the Board
DG Jones Boksburg
Secretary 21 September 2010
REGISTERED OFFICE SHARE TRANSFER SPONSOR
SECRETARIES
ELB Equipment Limited Computershare Investor Rand Merchant Bank (a
14 Atlas Road Services (Pty) Limited division of FirstRand
Anderbolt 70 Marshall Street Bank Limited)
Boksburg Johannesburg 1 Merchant Place
1459 2001 cnr Fredman Drive and
(PO Box 61051, Rivonia Road
Marshalltown, 2107) Sandton
2196
WEBSITE
www.elb.co.za
DIRECTORS
AG Fletcher (chairman) PJ
Blunden (chief executive - ELB
Equipment)
T de Bruyn* Dr JP Herselman* Dr
SJ Meijers (chief executive -
ELB Engineering Services) MV
Ramollo
*Non executive
Date: 22/09/2010 09:42:04 Produced by the JSE SENS Department.
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