| Thu 30 Sep 2010, 17:00 | | RBA - RBA Holdings Limited - Abridged interim results for the six month period |
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RBA
RBA
RBA - RBA Holdings Limited - Abridged interim results for the six month period
ended 30 June 2010
RBA Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1999/009701/06)
Share Code: RBA
ISIN Code: ZAE000104154
("RBA Holdings" or "the group")
ABRIDGED INTERIM RESULTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2010
Abridged consolidated statement of financial position
30 June 30 June 31
2010 2009 December
R`000 R`000 2009
R`000
(Audited)
Assets
Non-current assets 160 939 169 269 161 635
Current assets 108 088 96 468 107 395
Total assets 269 027 265 737 269 030
Equity and liabilities
Capital and reserves 46 106 94 430 66 086
Non-current liabilities 113 654 75 135 94 916
Current liabilities 109 267 96 172 108 028
Total equity and liabilities 269 027 265 737 269 030
Number of shares in issue 310 000 310 000 310 000
000 000 000
14.87 30.46 21.32
Net asset value per share
(cents)
Tangible net asset value per 13.36 28.79 19.80
share (cents)
27.78 43.37 34.23
Net asset value per share
including land inventory
revalued to market
value(cents)
Description of net asset value including land:
The group owns various pockets of land available for residential housing
development. In accordance with IFRS this inventory was not revalued to market
value. At 30 June 2010 the market value of this inventory exceeded book value by
approximately R 40 million. This should be taken into account when considering
the real net asset value of the group.
Abridged statement of comprehensive income
6 months ended Year
ended
30 June 30 June 31 Dec
2010 2009 2009
R`000 R`000 R`000
(Audit
ed)
Revenue 31 249 35 049 80 612
Rental Revenue 4 315 1 659 3 436
Cost of Sales (21 (22 397) (58
152) 999)
Gross profit 14 412 14 311 25 049
Other income 3 015 5 353 3 387
Operating expenses (26 (29 222) (56
626) 791)
Earnings before interest and (9 199) (9 558) (28
taxation 355)
Impairment - RBA Employees - - (407)
share trust
Impairment of Goodwill - - (100)
Finance charges (7 834) (5 388) (11
652)
Profit/(Loss) before taxation (17 (14 946) (40
033) 514)
Taxation 2 568 3 924 1 398
Profit/(Loss) after taxation (14 (11 022) (39
465) 116)
Profit/(Loss) from associate (26) (235) (487)
companies
Minority interests 4 112 4 214 5 655
Attributable Earnings/(Loss) (10 (7 043) (33
379) 948)
Headline Earnings
Reconciliation of headline
earnings
Profit attributable to (10 379) (7 043) (33 948)
ordinary shareholders
Adjusted for profit on - (292) (374)
disposal of property, plant
and equipment
Impairment - loan to RBA - - 407
employees share trust
Impairment of goodwill - - 100
Normalised earnings/(loss) (10 379) (7 335) (33 815)
attributable to ordinary
shareholders
Fair value adjustment of (2 733) (4 082) (2 380)
investment properties
Headline earnings/(loss) (13 112) (11 417) (36 195)
attributable to ordinary
shareholders
Weighted average number of 310 000 310 000 310 000
shares in issue 000 000 000
Basic earnings/(loss) per (3.35) (2.27) (10.95)
share (cents)
Normalised earnings/(loss) (3.35) (2.37) (10.91)
per share (cents)
Headline earnings/(loss) per (4.23) (3.68) (11.68)
share (cents)
Description of normalised earnings:
The directors believe normalised earnings more accurately reflect operational
performance of the group. Headline earnings are adjusted to take into account
the non operational requirements set out in the SAICA Circular 08/07 - Headline
Earnings (issued February 2008) in terms of which all amounts and adjustments
relating to items of investment properties are excluded in headline earnings.
However the directors are of the view that the revaluations of the rental unit
portfolio should be taken into account when determining the normalised earnings
for the group.
Abridged statement of changes in equity
Share Share Retained Revaluation Minority Total
capital premium earnings Reserve Interest R`000
R`000 R`000 R`000 R`000 R`000
Balance: 1 Jan 3 28 394 76 199 2 600 (1 507) 105
2009 689
Profit/(loss) - - (7 043) - (4 214) (11
for the period 258)
Balance: 30 3 28 394 69 156 2 600 (5 721) 94
June 2009 431
Profit/(loss) - - (26 904) - (1 441) (28
for the period 345)
Balance: 1 Jan 3 28 394 42 252 2 600 (7 162) 66
2010 086
Profit/(loss) - - (10 379) - (4 112) (14
for the period 491)
Business - - (2 694) - (2 795) (5
Combinations 489)
Balance: 30 3 28 394 29 179 2 600 (14 069) 46
June 2010 106
Abridged statement of cash flows
6 months ended Year
ended
30 June 30 June 31
2010 2009 December
R`000 R`000 2009
R`000
(Audited)
Cash and equivalents at (24 000) (16 744) (16 744)
beginning of period
Cash flows from operating (18 599) (12 800) (1 347)
activities
Cash flows from investing 4 459 (20 366) (49 244)
activities
Cash flows from financing 14 273 25 486 43 335
activities
Cash and equivalents at end (23 867) (24 424) (24 000)
of period
OVERVIEW
The directors of RBA Holdings present the reviewed interim results for the 6
month period ended 30 June 2010.
Established in 1997, RBA is a supplier of bank-funded affordable homes in
Gauteng, Polokwane and Kwazulu Natal. Our business model encompasses the
complete property development process namely the acquisition of land, town
planning, project management of services installation, marketing, sale/rental
and construction of quality affordable homes.
FINANCIAL REVIEW
The results for the period highlight the difficult economic and trading
conditions and the consequent delays experienced in our key project
Braamfisherville Ext 14, which impacted negatively on the Group`s top and bottom
line.
The group achieved an attributable loss of R10,379 million (2009: R7,043
million) for the six month period. Earnings per share for the six month period
amount to a loss of 3.35 cents (2009: 2.27 cents). The net asset value of the
group at 30 June 2010 was 14.87 cents (2009 - 30.46 cents) per share.
Cost saving measures were implemented and the groups` operating expenses reduced
by 9% against the 2009 comparative period. It has been a strategic objective of
the group to retain the capacity needed to convert our current pipeline as well
as take full advantage of the opportunities a recovering market will offer.
During 2009 the Board of RBA Holdings took the strategic decision to streamline
the group structure into four operating companies with a view to increasing
efficiencies.
The Board approved that the structure be simplified as follows with effect from
1 January 2010:
* RBA Holdings will remain the holding company;
* Land procurement is housed in Ground Base (Pty) Limited;
* Sales activities are housed in RBA Homes (Pty) Limited;
* Development activities are housed in RBA Developments (Johannesburg)
(Pty) Limited;
* Construction activities are housed in RBA Building Projects (Pty)
Limited.
The resultant shareholdings of RBA Holdings in the abovementioned operating
companies are as follows:
* Ground Base (Pty) Limited - 87%
* RBA Homes (Pty) Limited - 51%
* RBA Developments (Johannesburg) (Pty) Limited - 93.5 %
* RBA Building Projects (Pty) Limited - 51%
All the issued shares in subsidiaries incorporated into these companies which
were not held by RBA Holdings, were acquired from the minority shareholders.
BUSINESS REVIEW
Land
The group has secured 6 156 residential 1 stands and 4 286 residential 3
(sectional title) opportunities at various stages in the township establishment
process.
Sales
During the period under review the group achieved 233 approved sales. As at 30
June 2010 the group had a total of 539 approved sales (2009 - 387) that were
awaiting registration at the deeds office. Construction would commence
immediately after registration of stands into the clients` names. Registration
of transfer of erven in our key project, Braamfischerville Ext 14 (202 approved
sales at 30 June 2010), commenced during September 2010 and construction of
these homes is well underway at the date of this report.
Rentals
The big success of the 2009 financial year and the first half of 2010 was the
successful completion of 176 sectional title units in Protea Glen, Soweto. As at
30 June 2010 all 176 units were fully tenanted. The roll out of additional
rental projects has been slower than expected and we anticipate construction on
our next rental project to commence early 2011.
Marketing
In our target markets the RBA brand remains a trusted supplier of affordable
homes. An increase in marketing spend is anticipated in the second half of 2010
to boost our sales pipeline and improve brand awareness.
Administration
The time delays between submission of a potential sale to ultimate approval of
finance continues to improve as banks` willingness to lend to our clients gains
momentum. No problems are being experienced with registrations of mortgage bonds
and transfer of stands at the deeds office. Obtaining clearance certificates
from local authorities is however a challenge at this stage. Steps are being
implemented to address these challenges. During the difficult period under
review the group only transferred a total of 81 stands to clients.
Production
Our construction teams are performing well. Production levels are anticipated to
increase over the coming months as our approved sales are registered. No
problems are being experienced with plan approvals, council connections and
NHBRC enrolments.
Human resources
Staff turnover remains low and we are committed to ensuring that RBA remains an
employer of choice.
Green Policy
The group is committed to operating our business in an environmentally friendly
manner. A dedicated "green" committee develops and monitors our "green
policies."
PROSPECTS
The operating results for the period under review were disappointing. The
financial recovery of the group is underway and the directors anticipate a
significant financial recovery during the second half of 2010 as the pipeline of
485 approved sales is unlocked. The group has 99 houses under construction at 30
September 2010.
Recent months have seen an easing by certain banks of their lending criteria.
This along with an improvement in the affordability of mortgage loans due to
lower interest rates and an improvement in clients` disposable income levels,
has resulted in a continued improvement in monthly sales.
The directors believe that the medium to long term prospects for the group
remain positive due to the following factors:
* The historic shortage of housing in South Africa remains a problem;
* The group has sufficient land available to meet forecasted demand;
* The group has the production capacity to meet forecasted demand;
* A recovery from the economic downturn is underway; and
* The provision of home loans to RBA`s segment of the residential
housing market is still a focal point of the major commercial banks.
SUBSEQUENT EVENTS
The directors are not aware of any matter or circumstance arising since the end
of the period, which significantly affects the financial position of the group
or the results of its operations as presented.
DIVIDEND POLICY
No dividend has been declared. The dividend policy of RBA Holdings will be
reviewed annually with due regard to cash flow, gearing and capital
requirements.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The consolidated interim financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) and IAS 34: Interim
Financial Reporting. The accounting policies used in the preparation of these
results are consistent in all material respects with those used in the annual
financial statements for the year ended 31 December 2009.
APPRECIATION
We thank our dedicated staff for their commitment and hard work during a
difficult six months. We also thank our business partners, suppliers, advisors,
clients and shareholders for their support and faith in the group.
By order of the Board
30 September 2010
Johannesburg
Date: 30/09/2010 17:00:01 Produced by the JSE SENS Department.
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