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TFX
TFX
TFX - Top Fix Holdings Limited - Reviewed provisional consolidated condensed
financial results for the 12 months ended 30 June 2010
Top Fix Holdings Limited ("Top Fix" or "the Group")
Incorporated in the Republic of South Africa
(Registration number 2006/011359/06)
JSE code: TFX
ISIN: ZAE000088423
COMMENTARY ON THE GROUP`S RESULTS:
Further to the SENS announcement of 28th September 2010, the Group results for
the year to 30 June 2010, prior to impairment of goodwill in the Scaffolding
Division, reflect a 72% decline in headline earnings compared to the year ended
30 June 2009 from 11 cents to 3,1 cents per share. The continued building
recession in the country adversely affected the Scaffolding Division, and the
Group showed a loss for the second half of the year, prior to additional debtors
provisions and downsizing costs referred to below, of R2 million. Downsizing and
cost cutting counter-measures, with resultant costs of approximately R1 million,
have now been effected, and further cost cutting is still being considered.
As at 30 June 2010 recovery procedures were still in progress in respect of
disputed debtors balances relating to prior financial years. As such the
directors of Top Fix have adopted a prudent approach, and in compliance with
International Financial Reporting Standards ("IFRS"), have reassessed and
increased the provisions raised against the amounts in dispute in prior years by
R2,5 million. Arbitration proceedings, currently in progress against a former
joint venture party are due for finalisation in October 2010.
Net interest charges at R3,8 million compare to R4,2 million in the prior year.
A significant decrease in accounts receivable, from R82 million last year to R53
million at June 2010 is mainly due to lower activity levels as well as improved
debtor collections. Accordingly, the Group achieved a net cash inflow from
operations of R22,2 million for the current year.
Scaffolding
In the light of current economic conditions, detailed above, Scaffolding
achieved an operating loss for the year of R6,1 million, compared to the R18,2
million profit achieved in the previous year. As detailed above downsizing and
cost cutting, although largely complete, is ongoing. In the light of these
developments it has been necessary to reassess the goodwill attaching to the
division and an impairment loss of R44 million, being the full goodwill
attaching to the operation has been recognised.
Personnel Outsourcing
Personnel Outsourcing achieved an operating profit for the year of R16,2
million, 4% up on last year. The division has continued to perform well
considering the economy and secured contracts for international personnel
placements in Afghanistan during the year. Further international placements are
actively being pursued.
Safety Surveillance
Safety Surveillance continues to perform well with an operating profit of R2,5
million, 10% above the previous year.
Directorate
Mr PR Todd, Managing Director of the Scaffolding Division resigned on 31 August
2010. Responsibility for the Division has been assumed by Mr BW Marais.
Joint Ventures
In addition to the BEE joint venture, Umdeni Labour Services, commenced last
year, the Group has commenced two further BEE operations, Umdeni Exploration
(49% holding), providing accommodation for trainees, and Hlakani Maintenance
(20% holding), which will provide maintenance services to large industrial
operations. The effect on earnings in the current year was insignificant.
Related party transactions
An amount of R12,5 million is due to MBM Technical Services (Pty) Ltd, a company
controlled by Mr BW Marais. The loan bears interest at the prime overdraft rate
plus 1% and is repayable on demand. R2 million in interest charges were raised
against the loan during the year and the company has given the assurance that it
will not withdraw this financing to the detriment of the Group`s ability to meet
its other financial obligations.
Future prospects
The recent Scaffolding cost cutting measures and local shortage of skilled
artisans leave both the Scaffolding and Personnel Outsourcing operations well
placed to take advantage of opportunities in South Africa.
Basis of preparation and accounting policies
The reviewed results for the year ended 30 June 2010 have been prepared in
accordance with International Financial Reporting Standards, IAS34, the AC500
series of Interpretations, the JSE Listing Requirements and the Companies Act of
South Africa. The financial information for the year ended 30 June 2010 has been
prepared adopting the same accounting policies used in the most recent annual
financial statements.
Capital commitments and contingencies
The Group had no significant outstanding capital commitments or contingencies as
at 30 June 2010.
Review opinion
These results have been reviewed by Top Fix`s auditors, PKF (Jhb) Inc., and
their unqualified review opinion is available for inspection at Top Fix`s
registered office.
Dividend declaration:
In line with current Group policy, no dividend has been declared for the year.
REVIEWED PROVISIONAL CONSOLIDATED CONDENSED FINANCIAL INFORMATION FOR THE YEAR
ENDED 30 JUNE 2010
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Reviewed Audited
Year ended Year
ended
30 June 30 June
2010 2009
R`000 R`000
Revenue 295 580 322 500
Cost of sales (216 795) (221 619)
Gross profit 78 785 100 881
Net operating expenses (66 092) (64 892)
Operating profit 12 693 35 989
Impairment of goodwill (44 034)
-
Interest received 1 257 3 836
Interest paid (5 031) (8 080)
(Loss)/profit before taxation (35 115) 31 745
Taxation (2 560) (9 318)
(Loss)/profit attributable to the (37 675) 22 427
equity holders of the parent
Other comprehensive income
- -
Total comprehensive (loss)/income
attributable to equity holders of (37 675)
the parent 22 427
Weighted average shares in issue 203 182 203 182
(`000)
Earnings (Loss)/diluted earnings
per share (cents) (18.5) 11.0
Headline earnings per share
3.1 11.0
Calculation of headline earnings
Attributable (loss)/earnings (37 675) 22 427
Impairment of goodwill 44 034 -
Loss/(profit) on sale of property, 15 (47)
plant and equipment (after
taxation)
Headline earnings
6 374 22 380
CONSOLIDATED SEGMENT ANALYSIS
Reviewed Audited
Year ended Year
ended
30 June 30 June
2010 2009
REVENUE R`000 R`000
Scaffolding 82 873 104 709
Personnel outsourcing 202 276 208 823
Total revenue 206 695 212 245
Internal (4 419) (3 422)
Safety surveillance 10 431 8 968
Total Group 295 580 322 500
SEGMENT PROFIT FROM OPERATIONS
Operating (loss)/profit 12 693 35 989
Scaffolding (6 066) 18 167
Personnel outsourcing 16 233 15 567
Safety surveillance 2 521 2 300
Head office 5 (45)
Impairments
Scaffolding (44 034) -
Net interest (paid)/received (3 774) (4 244)
Scaffolding (5 885) (4 481)
Personnel outsourcing 1 984 436
Safety surveillance 125 (202)
Head office 2 3
(Loss)/profit before taxation (35 115) 31 745
Scaffolding (55 985) 13 686
Personnel outsourcing 18 217 16 003
Safety surveillance 2 646 2 098
Head office 7 (42)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Reviewed Audited
30 June 30 June
2010 2009
ASSETS R`000 R`000
Non-current assets 141 309 179 603
Property, plant and equipment 125 263 120 493
Goodwill 13 980 58 014
Investment in and loans to joint 1 433 567
ventures
Deferred taxation 633 529
Current assets 64 492 88 505
Inventories 9 102 4 791
Trade and other receivables 53 902 81 905
Bank and call deposits 1 488 1 809
TOTAL ASSETS 205 801 268 108
EQUITY AND LIABILITIES
Capital and reserves 141 722 179 397
Non-current liabilities 9 295 22 796
Interest bearing liabilities 4 965 14 775
Deferred taxation 4 330 8 021
Current liabilities 54 784 65 915
Interest bearing liabilities 16 046 13 840
Bank overdrafts and invoice 14 431 16 752
discounting
Trade and other payables 22 898 28 836
Taxation payable 1 409 6 487
TOTAL EQUITY AND LIABILITIES 205 801 268 108
Shares in issue (`000) 203 182 203 182
Net asset value per share (cents)
69.8 88.3
Net tangible asset value per share
(cents) 62.9 59.7
CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed Audited
Year ended Year
ended
30 June 30 June
2010 2009
R`000 R`000
Cash flow from operations 22 221 8 438
Cash generated by operations 37 428 15 762
Interest received 1 257 3 836
Interest paid (5 031) (6 838)
Taxation paid (11 433) (4 322)
Cash flow from investing (12 617) (10 155)
activities
Investment in/disposal of (866) (234)
operations
Investment in/disposal of (11 751) (9 921)
property, plant and equipment
Cash flow from financing
activities
Movement in loans payable (7 604) 1 833
Increase in cash resources 2 000 116
Cash resources at beginning of (14 943) (15 059)
year
Cash resources at end of year (12 943) (14 943)
Cash resources (12 943) (14 943)
Bank and call deposits 1 488 1 809
Bank overdraft and invoice (14 431) (16 752)
discounting
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Reviewed Audited
Year ended Year
ended
30 June 30 June
2010 2009
R`000 R`000
Equity at beginning of year 179 397 156 970
Attributable (loss)/profit for the (37 675) 22 427
year
Equity at end of year 141 722 179 397
For and on behalf of the Board
MN Hattingh (Company Secretary)
BT Ngcuka (Chairman) BW Marais (Chief Executive)
Date: 30 September 2010
Directors:
BT Ngcuka* (Chairman); BW Marais (CEO); JA Barker (Financial Director); KG
Galesitoe*#; FF Goosen; JJ Senekal*#; KT Nondumo*#; F Swart* (* - non-executive)
(# - independent)
Secretary and Registered Office:
MN Hattingh,
6 Topaz Street,
Littleton Manor,
Centurion
0157
Transfer Secretaries:
Link Market Services South Africa (Pty) Ltd,
11 Diagonal Street,
Johannesburg 2000 (PO Box 4844, Johannesburg 2001)
Designated Advisor:
QuestCo Sponsors (Pty) Limited
Website:
www.topfix.co.za
Date: 30/09/2010 16:07:01 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,
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howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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