| Thu 30 Sep 2010, 17:41 | | SEP - Sephaku holdings limited - Audited condensed consolidated financial |
|
SEP
SEP
SEP - Sephaku holdings limited - Audited condensed consolidated financial
results for the sixteen months ended 30 June 2010
SEPHAKU HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2005/003306/06)
Share code: SEP ISIN: ZAE000138459
("Sephaku Holdings" or "the company")
AUDITED CONDENSED CONSOLIDATED FINANCIAL RESULTS
FOR THE SIXTEEN MONTHS ENDED 30 JUNE 2010
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 28 February
2010 2009
R`000 R`000
Assets
Non-current assets
Property, plant and equipment 416 921 140 982
Goodwill 749 749
Intangible assets 88 990 47 177
Investments in associates 87 38 267
Other financial assets - 200
Deposits for rehabilitation 567 334
507 314 227 709
Current assets
Loans to group companies 577 8 018
Other financial assets 72 525 25
Current tax receivable 58 512
Trade and other receivables 16 880 4 180
Other loans receivable 336 941
Cash and cash equivalents 14 900 271 678
105 276 285 354
Non-current assets held for sale - 14 118
TOTAL ASSETS 612 590 527 181
Equity and liabilities
Equity attributable to equity holders of the parent
Share capital 225 215 214 981
Reserves 31 991 1 678
Retained income 149 209 212 702
406 415 429 361
Non-controlling interest 71 674 83 579
478 089 512 940
Liabilities
Non-current liabilities
Deferred income 8 456 -
Deferred tax 17 079 -
Provisions 6 715 -
32 250 -
Current liabilities
Loans from group companies - 110
Loans from shareholders 74 695 -
Other financial liabilities 29 -
Current tax payable 91 4 098
Trade and other payables 26 458 10 023
Deferred income 978 -
Loans payable - 10
102 251 14 241
TOTAL LIABILITIES 134 501 14 241
TOTAL EQUITY AND LIABILITIES 612 590 527 181
Net asset value per share (cents) 260,85 284,19
Tangible net asset value per share (cents) 203,25 252,47
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
16 months 12 months
ended ended
30 June 28 February
2010 2009
Revenue 6 181 -
Cost of sales (2 798) -
Gross profit 3 383 -
Other income 1 508 15 386
Operating expense (140 630) (53 378)
Profit on disposal of companies 31 124 -
Operating loss (104 615) (37 992)
Investment revenue 16 630 30 373
Loss from equity accounted investments (2 615) (1 964)
Finance costs (481) (271)
Loss for the period before tax (91 081) (9 854)
Taxation 907 (645)
Loss for the period (90 174) (10 499)
Other comprehensive income:
Effects of cash flow hedge (52 300) -
Gain on property revaluation 102 777 -
Taxation related to other comprehensive income (16 238) -
Other comprehensive income for the period net of
taxation 34 239 -
Total comprehensive loss for the period (55 935) (10 499)
Loss attributable to:
Equity holders of the parent (71 497) (11 046)
Non-controlling interests (18 677) 547
(90 174) (10 499)
Total comprehensive loss attributable to:
Equity holders of the parent (44 030) (11 046)
Non-controlling interest (11 905) 547
(55 935) (10 499)
Basic loss per share (cents) (46,16) (8,88)
Diluted loss per share (cents) (44,45) (8,59)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
16 months 12 months
ended ended
30 June 28 February
2010 2009
R`000 R`000
Cash flows from operating activities
Cash used in operations (125 858) (15 997)
Interest income 16 630 30 373
Finance costs (481) (270)
Tax paid (3 157) -
Net cash from operating activities (112 866) 14 106
Cash flows from investing activities
Purchase of property, plant and equipment (176 318) (136 299)
Sale of property, plant and equipment - 6
Purchase of intangible asset (46 410) (15 911)
Acquisition of businesses (3 600) -
Movement in investments in subsidiaries and
associates - (11 773)
Movement in other financial assets 53 538 9 352
Movement in deposits for rehabilitation (233) (75)
Movement in other loans receivable 712 -
Purchase of other financial asset - (375)
Transfer assets of disposal groups - (14 118)
Movement in loans to directors, managers and employees 28 427
Net cash from investing activities (172 283) (168 766)
Cash flows from financing activities
Proceeds on share issue 7 816 445 438
Proceeds on preference share issue - 100
Movement in other financial liabilities 29 -
Movement in other loans payable (10) -
Cash raised from shareholder`s loan 74 694 -
Forex loss through cash flow hedge reserve (52 300) -
Net movements in loans with group companies (1 859) (4 259)
Cash paid to minority shareholders - (76 013)
Cash received for shares not yet issued - 6 885
Net cash from financing activities 28 370 372 151
Total cash and cash equivalents movement for the
period (256 779) 271 491
Cash and cash equivalents at beginning of the period 271 678 54 187
Total cash and cash equivalents at end of period 14 899 271 678
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity
Total Hedging Revaluation based
share reserve reserve share
capital option
reserve
R`000 R`000 R`000 R`000
Balance at 1 March 2008 84 652 - - 1 678
Total comprehensive loss
for the period - - - -
Issue of shares 445 437 - - -
Treasury shares held by
subsidiary (2 235) - - -
Premium paid on acquisition
of additional shares in
subsidiary (319 859) - - -
Issue of preference shares 100 - - -
Preference shares to be issued 7 080 - - -
Ordinary shares from previous
period included in issue (194) - - -
Gain on issue of shares to
minorities - - - -
Business combinations
Total changes 130 329 - - -
Balance at 01 March 2009 214 981 - - 1 678
Total comprehensive loss
for the period - (41 955) 69 421 -
Issue of shares 7 816 - - -
Employee share option scheme - - - 2 847
Sephaku Management
transferred to Trust - - - -
Subsidiary holding treasury
shares sold 2 418 - - -
Total changes 10 234 (41 955) 69 421 2 847
Balance at 30 June 2010 225 215 (41 955) 69 421 4 525
Retained Attributable Non
earnings to equity controlling Total equity
holders of Interests
the parent
R`000 R`000 R`000 R`000
Balance at 1 March 2008 39 965 126 295 20 734 147 029
Total comprehensive
loss for the period (11 046) (11 046) 547 (10 499)
Issue of shares - 445 437 - 445 437
Treasury shares
held by subsidiary (4 169) (6 404) - (6 404)
Premium paid on
acquisition of
additional shares
in subsidiary - (319 859) - (319 859)
Issue of preference shares - 100 - 100
Preference shares
to be issued - 7 080 - 7 080
Ordinary shares
from previous
period included in issue - (194) - (194)
Gain on issue of
shares to minorities 187 952 187 952 - 187 952
Business combinations - - 62 298 62 298
Total changes 172 737 303 066 62 845 365 911
Balance at 1 March 2009 212 702 429 361 83 579 512 940
Total comprehensive
loss for the period (71 496) (44 030) (11 905) (55 935)
Issue of shares - 7 816 - 7 816
Employee share option scheme - 2 847 - 2 847
Sephaku Management
transferred to Trust 8 003 8 003 - 8 003
Subsidiary holding
treasury shares sold - 2 418 - 2 418
Total changes (63 493) (22 946) (11 905) (34 851)
Balance at 30 June 2010 149 209 406 415 71 674 478 089
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Net asset value per share and earnings per share
30 June 28 February
2010 2009
R`000 R`000
Net asset value and tangible net asset value per share
Total assets 612 590 527 181
Total liabilities (134 501) (14 241)
Minority interest (71 674) (83 579)
Net asset value attributable to equity holders
of the parent 406 415 429 361
Goodwill (749) (749)
Intangible assets (88 991) (47 177)
Tangible net asset value 316 675 381 435
Shares in issue 155 805 363 151 081 000
Net asset value per share (cents) 260,85 284,19
Tangible net asset value per share (cents) 203,25 252,47
Earnings and headline earnings per share
Reconciliation of basic earnings to diluted
earnings and headline earnings:
Basic loss and diluted loss (71 497) (11 046)
Profit on sale of non-current assets (31 124) (758)
Impairment of intangible assets 4 089 6
Impairments 595 175
Headline loss attributable to equity
holders of the parent (97 937) (11 623)
Reconciliation of weighted average number of shares:
Basic weighted average number of shares 154 896 985 124 331 930
Diluted effect of share options 5 940 000 4 221 875
Diluted weighted average number of shares 160 836 985 128 553 805
Basic loss per share (cents) (46,16) (8,88)
Diluted loss per share (cents) (44,45) (8,59)
Headline loss per share (cents) (63,23) (9,35)
Diluted headline loss per share (cents) (60,89) (9,04)
Business combinations
Acquisition of businesses
30 June
2010
R`000
Intangible assets 3 000
Investments in associates 600
3 600
Consideration paid
Cash (3 600)
Sephaku Holdings acquired interests in the following subsidiaries during the
period under review:
100% interest in Ergomark (Pty) Ltd on 1 September 2009
100% interest in Incubex Minerals Ltd on 22 June 2010
100% interest in Sephaku Cement Investment Holdings Ltd on 29 March 2010
During May 2009 Sephaku PGM Holdings (Pty) Ltd sold its interest in African
Spirit Trading 364 (Pty) Ltd.
African Spirit Trading 364 (Pty) Ltd changed its name to Sephaku Limestone &
Exploration (Pty) Ltd on 18 August 2009.
Sephaku Holdings acquired 51% interest in Sephaku Limestone & Exploration (Pty)
Ltd for a purchase price of R3m. The price paid to the third party is used as an
indicator of the fair value of the intangible asset as no market value can be
determined.
Sephaku Fluoride Ltd, a subsidiary of Sephaku Holdings, acquired a 26% interest
in associate Finishing Touch Trading 121 (Pty) Ltd.
Sephaku PGM Holdings (Pty) Ltd acquired interest in the following associates
during the period under review:
30% interest in Egonox (Pty) Ltd on 5 March 2009
30% interest in Synchrophor (Pty) Ltd on 26 June 2009
30% interest in Indelum Properties (Pty) Ltd on 21 April 2009
30% interest in Empivert (Pty) Ltd on 26 June 2009
30% interest in Synchrotrix (Pty) Ltd on 26 June 2009
30% interest in Vigacron (Pty) Ltd on 26 June 2009
Ergomark (Pty) Ltd, a subsidiary of Sephaku Holdings, acquired a 50% interest in
Insa Coal Holdings (Pty) Ltd on 01 September 2009 for the purchase price of R100
and made further equity investments of R600 000 to retains its 50% interest.
Sale of businesses
30 June
2010
R`000
Carrying value of assets sold
Property, plant and equipment (2 597)
Intangible assets (370)
Retained income (3 714)
Loans to directors, managers, employees (5)
Investment (6 707)
Investment in associates (38 274)
Trade and other receivables (82)
Trade and other payables 565
Other loans and receivables (107)
Inter-company loans 86 236
Leave provision 361
Assets of disposal groups (32 880)
Other loans (5 270)
Total net assets sold (2 844)
Profit on disposal (36 470)
(39 314)
Consideration received
Debtor 80 000
Loan accounts (40 686)
39 314
On 1 March 2009 all the shares in Sephaku Management (Pty) Ltd were transferred
to the Samet Trust.
On 31 October 2009 all the shares in Blue Waves Properties 198 (Pty) Ltd were
sold to Sephaku Cement (Pty) Ltd ("Sephaku Cement") for R30m.
On 27 January 2010 the interest in African Nickel Holdings (Pty) Ltd and Sephaku
Gold Holdings (Pty) Ltd was sold to the Wu group for an amount of R80m.
Segmental reporting
Ash Cement Fluorspar
R`000 R`000 R`000
30 June 2010
Segment revenue: from (6 181) - -
external customers
Segment result 4 679 83 340 2 589
Segment assets 84 978 385 580 53 252
Total assets includes 52 957 127 718 43 418
additions to non-current assets
Segment liability (18 584) (108 826) (59 033)
28 February 2009
Segment result - 21 910 144
Segment assets - 437 092 1 270
Total assets includes - 167 372 6 967
additions to non-current assets
Segment liability - (13 986) (2 757)
Other Consolidation Total
R`000 R`000 R`000
30 June 2010
Segment revenue: from - - (6 181)
external customers
Segment result 30 382 - 120 990
Segment assets 149 631 (60 851) 612 590
Total assets includes 1 635 225 728
additions to non-current assets
Segment liability (22 427) 74 369 (134 501)
28 February 2009
Segment result 12 884 (6 236) 28 702
Segment assets 78 060 284 940 801 362
Total assets includes 13 820 319 859 508 018
additions to non-current assets
Segment liability (16 236) 18 738 (14 241)
The segment information has been prepared in accordance with IFRS 8 - Operating
Segments (IFRS 8) which defines the requirements for the disclosure of financial
information of an entity`s operating segments.
Management has determined the operating segments based on the information used
by the board to make strategic decisions.
The section `Other` includes revenue, expenditure, assets and liabilities in
respect of smaller operations in Tin, Coal, Vanadium, Platinum, Chrome and
Diamonds.
Basis of preparation
These abridged consolidated annual financial statements have been presented in
terms of disclosure requirements set out in IAS 34 Interim Financial Reporting,
which has been amended following the revision of IAS 1 Presentation of Financial
Statements.
The group`s abridged financial results have been prepared on a historical cost
basis and comply with the International Financial Reporting Standards ("IFRS"),
the AC 500 standards as issued by the Accounting Practices Board and in the
manner required by the Companies Act of South Africa. The accounting policies
adopted are consistent with those applied in the annual financial statements for
the year ended 28 February 2009.
The abridged announcement has been prepared in accordance with the JSE Limited
Listings Requirements.
Auditor`s report
The consolidated financial statements for the 16 months ended 30 June 2010 have
been audited by PKF (Pta.) Inc. The auditor`s unqualified audit report is
available for inspection at the company`s registered office. These consolidated
financial statements are the responsibility of the Board of Directors.
Commentary
Highlights:
- the finalisation of a supply agreement with Sinoma International Engineering
Company Limited, the largest manufacturer of cement plants in the world, in
April 2009;
- the commissioning of Sephaku Cement`s fly ash plant in September 2009,
positioning the company as a fully fledged retail competitor;
- the completion of a bankable feasibility study on the Fluorspar Project and
approval of an environmental impact assessment for the Delmas cement plant in
October 2009;
- the disposal of Sephaku Holdings gold and nickel assets to Mandra Capital and
private investor Mong Seng Wu in January 2010 for R80m as the first step in
creating a more focused industrial minerals company.
Events after reporting period:
- The board has taken a strategic decision to reorganise the assets of the
Sephaku Holdings group in order to present a more defined and focused investment
opportunity to the market. Accordingly, subject to approval by the Department of
Mineral Resources, Sephaku Holdings shall dispose of all the shares it holds in
its subsidiaries, other than those subsidiaries with interests relating to
cement and fluorspar, to a wholly owned subsidiary of the company, Incubex
Minerals Ltd. Subject to shareholders` approval, Sephaku Holdings intends to
distribute to shareholders all of the issued shares in Incubex in the ratio of
one Incubex share for every ten Sephaku Holdings shares in the form of a
dividend in specie.
- Dangote Industries Ltd ("Dangote") has agreed to invest an additional amount
of R779m of equity into Sephaku Cement to achieve an aggregate shareholding in
Sephaku Cement of 64%, resulting in Dangote acquiring control of Sephaku Cement.
Dangote has already advanced an amount of R75.6m to Sephaku Cement during June
2010 as a convertible loan, which loan amount will be deducted from the total
subscription amount. The loan will be converted to Sephaku Cement shares during
October 2010, once all regulatory and formal shareholder approvals have been
obtained regarding the total proposed investment by Dangote.
Outlook:
The forthcoming year will see the company consolidate its position as one of
South Africa`s leading emerging industrial minerals exploration and development
companies, with plant construction under way and production drawing closer The
continued strategic realignment of the Sephaku Holdings group will provide
clarity to shareholders and the market at large.
Commentary on the financial results:
The Sephaku Holdings group incurred a loss of R90m for the 16 months ended 30
June 2010, which includes an R86m loss incurred by the Sephaku Cement group. The
loss also includes Sephaku Cement employee costs of R66m incurred for the ramp
up of staff required for the ash processing plant and the cement manufacturing
project.
Material additions to property, plant and equipment consist of the cement
manufacturing plant (Aganang Project) of R93m, the ash processing plant (Kendal
Project) of R53m and R18m spent on the purchase of the remaining extent of
Portion 22 of the farm Witklip no 232 (76,9004 ha). All the properties were
revalued by an independent sworn appraiser resulting in an R103m increase in the
carrying value.
Additions to intangible assets of R46m relates for the most part to costs
incurred on the Fluorspar Project.
Annual general meeting:
The company`s 4th annual general meeting will be held at the Centurion Lake
Hotel, 1001 Lenchen Avenue, Centurion on Thursday, 11 November 2010 at 10h00.
Further details on the company`s annual general meeting will be included in
Sephaku Holdings` annual report.
On behalf of the board
Neil Crafford-Lazarus Lelau Mohuba
CEO Chairman
Pretoria
30 September 2010
Company information
Directors: L Mohuba (Chairman), NR Crafford-Lazarus* (Chief Executive Officer),
RR Matjiu*, ME Smit*, CR de W de Bruin, PF Fourie, MG Mahlare, GS Mahlati, MM
Ngoasheng, J Bennette# , D Twist# , JW Wessels#
*Executive # Alternate
Company secretary: Sephaku Management (Pty) Ltd
Registered office: Suite 4A, Manhattan Office Park, 16 Pieter Road,
Highveld Technopark Centurion, 0169
Date: 30/09/2010 17:41:30 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.
