| Thu 23 Sep 2010, 16:37 | | KDV - Kaydav Group Limited - Unaudited interim results for the six months ended |
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KDV
KDV
KDV - Kaydav Group Limited - Unaudited interim results for the six months ended
30 June 2010
KAYDAV GROUP LIMITED
Incorporated in the Republic of South Africa
Registration Number: 2006/038698/06
JSE code: KDV * ISIN: ZAE000108940
UNAUDITED INTERIM RESULTS for the six months ended 30 June 2010
* Revenue R230 million (up 6%)
* Headline earnings per share 1.6 cents (down 11%)
* Tangible net asset value per share 53.4 cents (up 23%)
Consolidated statement of comprehensive income
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
R R R
Revenue 230 172 143 217 370 707 461 236 347
Cost of sales (158 644 078) (147 193 338) (316 385 280)
Gross profit 71 528 065 70 177 369 144 851 067
Other income 454 423 495 070 500 486
Operating expenses (65 108 711) (62 058 144) (131 307 258)
Operating profit 6 873 777 8 614 295 14 044 295
Interest received 212 759 368 317 807 565
Interest paid (1 547 334) (1 363 389) (2 043 334)
Profit before taxation 5 539 202 7 619 223 12 808 526
Taxation (2 100 727) (2 284 322) (6 303 138)
Profit for the period 3 438 475 5 334 901 6 505 388
Other comprehensive income - - -
Total comprehensive income
attributable to equity holders
of the parent 3 438 475 5 334 901 6 505 388
Reconciliation between
earnings and headline
earnings
Profit for the period 3 438 475 5 334 901 6 505 388
Profit/(Loss) on disposal
of property, plant and
equipment (2 089) (57 793) 50 034
Taxation effect of disposal
of property, plant and
equipment 585 16 182 (14 009)
Headline earnings attributable to
equity holders 3 436 971 5 293 290 6 541 413
Weighted average number of
shares in issue 213 504 505 295 232 716 279 416 077
Basic and diluted earnings
per share (cents) 1.6 1.8 2.3
Headline earnings per share
(cents) 1.6 1.8 2.3
Consolidated statement of financial position
Unaudited Unaudited Audited
30 June 30 June 31 December
2010 2009 2009
R R R
ASSETS
Non-current assets 51 643 882 51 746 822 52 291 161
Plant and equipment 34 793 222 34 533 009 35 542 939
Goodwill 14 302 804 14 302 804 14 302 804
Deferred taxation 2 547 856 2 911 009 2 445 418
Current assets 162 073 079 145 300 133 142 731 681
Inventories 68 490 264 59 577 249 62 177 403
Trade and other receivables 82 366 693 76 532 431 69 506 096
Cash and cash equivalents 9 531 600 9 190 453 9 491 221
Taxation 1 684 522 - 1 556 961
Total assets 213 716 961 197 046 955 195 022 842
EQUITY AND LIABILITIES
Capital and reserves 112 837 302 142 521 573 125 842 799
Share capital 184 295 236
Share premium 195 184 431 229 477 552 211 628 350
Accumulated loss (82 347 313) (86 956 274) (85 785 787)
Non-current liabilities 18 011 536 7 166 850 6 535 603
Instalment sale liabilities 5 122 402 6 603 435 6 018 822
Interest-bearing liabilities 12 828 607 - -
Deferred taxation 60 527 563 415 516 781
Current liabilities 82 868 123 47 358 532 62 644 440
Trade and other payables 54 388 910 36 458 235 50 664 350
Current portion of instalment
sale liabilities 2 790 474 2 782 211 2 552 466
Current portion of
interest-bearing liabilities 2 499 867 - -
Bank overdraft 19 012 096 3 919 999 7 689 783
Taxation - 681 978 -
Provisions 4 176 776 3 516 109 1 737 841
Total equity and liabilities 213 716 961 197 046 955 195 022 842
Shares in issue at period-end 184 586 273 295 232 716 236 186 273
Net asset value per share
(cents) 61.1 48.3 53.3
Tangible net asset value per
share (cents) 53.4 43.4 47.2
Condensed consolidated statement of cash flows
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
R R R
Cash flows from operating
activities (8 011 374) 9 803 618 28 102 830
Cash flows from investing
activities (1 496 652) (793 625) (3 898 234)
Cash flows from financing
activities (1 773 908) (3 311 842) (21 975 461)
Net (decrease)/increase in cash
and cash equivalents (11 281 934) 5 698 151 2 229 135
Cash and cash equivalents at
beginning of period 1 801 438 (427 697) (427 697)
Cash and cash equivalents at end
of period (9 480 496) 5 270 454 1 801 438
Condensed statement of changes in equity
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
R R R
Balance at the beginning of the
period 125 842 799 137 186 672 137 186 672
Share repurchases (16 443 972) - (17 849 261)
Total comprehensive income for
the period 3 438 475 5 334 901 6 505 388
Balance at the end of the period 112 837 302 142 521 573 125 842 799
Segmental analysis
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
R R R
Segmental revenue
Board distribution 208 269 898 206 337 795 429 014 760
Manufacturing 30 648 152 20 647 957 51 597 968
Internal revenue (8 745 907) (9 615 045) (19 376 381)
Net revenue 230 172 143 217 370 707 461 236 347
Segmental results
Board distribution 10 082 004 9 983 243 19 393 767
Manufacturing (3 208 227) (1 368 948) (5 348 830)
Other - - (642)
Operating profit before interest 6 873 777 8 614 295 14 044 295
Commentary
Introduction
KayDav Group Limited ("KayDav" or "the Group") specialises in the distribution
and adding of value to wood-based panels, which are products manufactured
through the compression of wood waste into a solid panel. Wood-based panels are
used for a variety of purposes in the construction, furniture manufacturing and
shopfitting industries.
Financial results
Group revenue for the first six months of the 2010 financial year was 6% higher
than that of the same period in 2009.
The board distribution segment experienced sales growth of 1% while the
manufacturing segment increased sales by 48% mainly via the Castle Timbers
manufacturing business.
The board distribution segment contributed R10.1 million to operating profit,
which exceeded budgeted expectations. However, the manufacturing segment
incurred an operating loss of R3.2 million. The manufacturing segment`s
performance is naturally of great concern and management is making every effort
to ensure this segment develops to an acceptable level of profitability.
Significant losses in one of the business units resulted in a taxation loss
which was not recognised as a deferred taxation asset. This resulted in an
average tax rate of 38% for the Group compared to the standard rate of 28%. Once
this business unit becomes profitable the deferred tax asset will be recognised.
During the reporting period KayDav repurchased 51 600 000 of its own shares,
resulting in 184 586 273 KayDav shares in issue at 30 June 2010. The weighted
average number of shares in issue used to calculate the earnings per share
values was 213 504 505.
The repurchase of KayDav shares was funded by a medium-term loan from KayDav`s
bankers. At the end of June 2010 the balance of this loan was R15 328 474. The
loan is repayable over five years and carries interest at 1 percentage point
above the prime overdraft rate. The interest on the loan reduced basic and
diluted earnings per share as well as headline earnings per share for the six
months to June 2010 by 0.23 cents.
Basic and diluted earnings per share as well as headline earnings per share of
1.6 cents per share are 11% lower than the 1.8 cents per share for the previous
corresponding period.
Historically, the second half of the year contributes the larger portion of
annual profits. During 2008 and 2009 this was not the case due to the economic
downturn and the effect of losses from start-up businesses.
The tangible net asset base of the group at 30 June 2010 was R98.5 million (June
2009: R128.2 million). The repurchase of the KayDav shares during the second
half of the 2009 financial year and the first six months of the 2010 financial
year amounted to a reduction in this base of R34.3 million.
The net cash deficit of R9.5 million at 30 June 2010 resulted from an
arrangement with a major supplier to settle our account early in return for
increased settlement discount.
Prospects
On a macro level much uncertainty still exists around the global and local
economic prospects for the future. Our industry is reliant on consumer demand
which in turn is impacted on by amongst other factors personal debt levels,
employment and the willingness of financial institutions to extend credit. In
light of these macro issues the pace of recovery remains unclear. Having regard
to this scenario, management remains focused on increasing market share and
effective working capital control. The significant change in the capital
structure of the Group arising from the share repurchases augurs well for
enhancing shareholder value in future.
Dividends
No dividends were declared during the period under review.
Basis of preparation
The interim financial statements have been prepared in accordance with
International Financial Reporting Standards, AC 500 standards, the requirements
of IAS 34 (Interim Financial Reporting) and in compliance with the JSE Listings
Requirements and the Companies Act of South Africa.
The accounting policies applied in preparing these interim financial statements
are consistent with those presented in the annual financial statements for the
year ended 31 December 2009 and have not been audited or reviewed by the
KayDav`s auditors.
Directorate
As announced on 24 August 2010, Geoffrey Davidson and Jay Katz resigned from the
KayDav board on 23 August 2010 so as to achieve a balance between executive and
non-executive directors. Geoffrey Davidson will continue in a consulting and
business development capacity, while Jay Katz will remain in an executive
management capacity at KayDav subsidiary KayDav Industries (Proprietary)
Limited. We wish to thank them both for their contribution to the KayDav board.
Appreciation
The board extends its appreciation to our management and staff for their efforts
during this reporting period. We also thank our customers and suppliers for
their continued support.
On behalf of the board
I H Stern G F Davidson
Chairman Chief Executive Officer
Cape Town
22 September 2010
Corporate information
Executive Directors: G F Davidson (CEO), M Slier (CFO)
Non-executive Directors: I H Stern (Chairman), J Hertz
Registration Number: 2006/038698/06
Registered Address: 105 Bamboesvlei Road, Ottery, 7800
Postal Address: PO Box 272 Ottery 7808
Telephone: 021 704 7060 Facsimile: 021 704 2082
Company Secretary: Probity Business Services (Pty) Limited
Transfer Secretaries: Link Market Services South Africa (Pty) Limited
Sponsor: Java Capital
23 September 2010
Date: 23/09/2010 16:37:01 Produced by the JSE SENS Department.
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