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ABK
ABK
ABK - African Brick Centre - Unaudited interim results for the six months ended
31 August 2010
AFRICAN BRICK CENTRE LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 1999/006214/06)
Share Code: ABK
ISIN Code: ZAE000105169
("African Brick Centre" or "the Company")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2010
FEATURES
Headline loss 4.4 million
Revenue 43.4 million
Dividend -
Headline LPS 1.4 cents
Revenue growth -5.37%
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Figures in Rand Unaudited Restated Audited
31 August Unaudited 28 February
2010 31 August 2010
2009
Assets
Non-current assets 62,644 68,653 64,472
Current assets 30,173 37,960 32,176
Total assets 92,817 106,613 96,648
Equity and liabilities
Capital and reserves 45,828 63,684 50,240
Non-current liabilities 25,441 26,886 25,732
Current liabilities 21,548 16,043 20,676
Total equity and liabilities 92,817 106,613 96,648
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Figures in Rand Unaudited Restated Audited
31 Unaudited 28
August2010 31 August February201
2009 0
Gross revenue 43,434 45,900 89,780
Operating costs (44,505) (51,140) (102,097)
Earnings before disclosable (1,071) (5,240) (12,317)
items
Impairment of assets - - (5,017)
Profit on sale of assets - 289 219
Depreciation and amortisation (2,023) (1,368) (4,160)
Other Income 23 5,298 5,274
Operating profit (3,071) (1,021) (16,001)
Finance costs (1,341) (894) (1,966)
Interest received - - 203
Profit/ (loss) before taxation (4,412) (1,915) (17,764)
Taxation - - 2,384
Profit/(loss) after tax (4,412) (1,915) (15,380)
Profit/ (loss) attributable
to:
Non-controlling interest - - -
Owners of the parent (4,412) (1,915) (15,380)
(4,412) (1,915) (15,380)
Headline earnings
Profit attributable to (4,412) (1,915) (15,380)
ordinary shareholders
Impairment of assets - - 3,677
Profit on sale of assets - 289 (157)
Headline earnings attributable (4,412) (1,626) (11,860)
to ordinary shareholders
Earnings
Profit attributable to (4,412) (1,915) (15,380)
ordinary shareholders
Earnings attributable to (4,412) (1,915) (15,380)
ordinary shareholders
HEPS (Cents) / (HLPS) (1.4) (0.61) (3.8)
EPS (Cents) / (LPS) (1.4) (0.52) (4.9)
Shares in issue 312,239 312,239 312,239
Shares in issue - weighted 312,239 312,239 312,239
average
There is no factors existing
during this reporting
period which require the
disclosure or calculation
of diluted EPS
Comprehensive Income
Change in tax rate on
revaluation of property
plant and equipment - - 20
Profit/(loss) after tax (4,412) (1,915) (15,380)
Total comprehensive income (4,412) (1,915) (15,360)
Total comprehensive income
attributable to:
Non-controlling interest - - -
Owners of the parent (4,412) (1,915) (15,360)
(4,412) (1,915) (15,360)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Figures in Rand Unaudited Restated Audited
31 Unaudited 28
August2010 31 August February201
2009 0
Opening balance 50,240 60,380 60,380
Restatement of opening - 5,219 5,219
balance, prior period error
Opening balance restated 50,240 65,599
65,599
Total comprehensive income
- Total comprehensive loss for (4,412) (1,915)
the year
Opening balance as previously - - (15,360)
reported
Total 45,828 63,684 50,240
CONSOLIDATED STATEMENT OF CASH FLOWS
Figures in Rand Unaudited Restated Audited
31 Unaudited 28
August2010 31 August February201
2009 0
Cash and equivalents at (5,927) (1,652) (1,652)
beginning of year
Cash flows from operating (930) (1,461) (4,129)
activities
Cash generated from operations 348 (567) (2,368)
Interest received - - 1,013
Interest paid (1,002) (894) (2,485)
Taxation received/ (paid) 781 - (289)
Cash flows from investing (1,003) 235 (1,062)
activities
Cash flows from financing 1,481 415 916
activities
Cash and equivalents at end of (6,379) 756 (5,927)
year
CONSOLIDATED SEGMENT REPORT
Figures in Rand Unaudited Restated Audited
31 Unaudited 28
August2010 31 August February201
2009 0
External Customers 43,434 45,900 89,780
Retail 38,461 42,918 82,283
Manufacturing 4,973 2,982 6,580
Corporate - - 917
Inter-segment revenue
Retail - - -
Manufacturing 16,088 11,610 24,997
Eliminations (16,088) (11,610) (24,997)
Consolidated Revenue 43,434 45,900 89,780
Segment result before
disclosed items
Retail (382) 3,082 (3,511)
Manufacturing (1,288) (3,372) (6,440)
Corporate (Head Office) (1,401) - (1,253)
Profit / (loss) with sale of
assets
Retail - 99 29
Manufacturing - 190 190
Impairment
Retail - - -
Manufacturing - - (5,017)
Corporate - - -
Reportable segment profit / (3,071) (1,021) (16,001)
(loss)
Retail (382) 2,161 (3,481)
Manufacturing (1,288) (3,182) (11,267)
Corporate (Head Office) (1,401) - (1,253)
Eliminations - - -
Operating profit / (loss) (3,071) (1,021) (16,001)
Finance costs (1,341) (894) (1,966)
Interest received - - 203
Profit/ (loss) before taxation (4,412) (1,915) (17,764)
Taxation - - 2,384
Profit/(loss) after tax (4,412) (1,915) (15,380)
CONSOLIDATED SEGMENT REPORT (Continued)
Figures in Rand Unaudited Restated Audited
31 August Unaudited 28 February
2010 31 August 2010
2009
Reportable Segment Assets
Retail 18,056 24,524 24,169
Manufacturing 71,010 75,505 70,527
Corporate 17,393 21,068 22,744
Eliminations (13,642) (14,484) (20,792)
Total 92,817 106,613 96,648
Reportable Segment Liabilities
Retail (8,785) (17,074) (13,519)
Manufacturing (36,803) (30,308) (39,530)
Corporate (15,043) (10,031) (14,151)
Eliminations 13,642 14,484 20,792
Total (46,989) 42,929 (46,408)
Net asset value 45,828 63,684 50,240
PERFORMANCE REVIEW
The period under review saw a slow recovery in demand and margins of clay brick
manufactured product. A number of merchants and African Brick Centre agents are
experiencing an up-tick in demand and expect reasonable trading levels for the
second half of the year.
Both retail and manufacturing segments came close to break even. It is expected
that this position will continue to improve as revenue streams increase.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The accounting policies applied in the preparation of these condensed
consolidated financial statements, which are based on reasonable judgments and
estimates, are in accordance with International Financial Reporting Standards
(IFRS) and are consistent with those applied in the annual financial statements
for the year ended 28 February 2010. These unaudited consolidated condensed
interim financial statements as set out in this report have been prepared in
terms of IAS 34 - Interim Financial Reporting, the Companies Act, 1973 (Act 61
of 1973), as amended, and the Listings Requirements of JSE Limited.
Prior Period Error
With the listing of African Brick Centre towards the end of 2007, the holding
company acquired a 100% shareholding in the manufacturing company (African Brick
(Proprietary) Limited) which also mines clay (owns the rights to mine the clay)
as well as a property company by name of Landton Properties (Proprietary)
Limited which owns the land and clay reserves (and the mining rights) on which
premises African Brick currently mines the clay.
The clay reserves were never fair valued at date of acquisition resulting in
only goodwill being raised.
The correction of the error(s) results in adjustments as follows:
Statement of Financial Position
Unaudited Unaudited Audited
31 August 2010 31 August 2009 28 February
2010
Intangible assets - 5,219,082 -
Accumulated loss - 5,219,082 -
Profit or Loss
Impairment of goodwill - 5,219,082 -
Going Concern
The financial statements have been prepared on the going concern basis. The
rights offer and sale and lease-back referred to under "Subsequent Events", have
raised a total of R19,7 million in funding for the Company and its subsidiaries
( the Group). As a result, the Group is comfortable that it is adequately funded
to support its working capital needs and has access to sufficient resources to
support an increase in operating levels, while it will also benefit from reduced
debt levels.
Related Party Transactions
None
SUBSEQUENT EVENTS
The rights offer announced on 31 May 2010 was concluded on 23rd September 2010,
raising R11.9 million to strengthen the balance sheet. In addition, a sale and
lease back transaction on the Honeydew property was signed during October,
raising an additional R7.8 million. It is expected that the transfer of right
and ownership will only occur towards the end of the financial year.
CHANGES TO THE BOARD
Mr Linda Yanta resigned as an Independent Non-Executive Director and member of
the Audit and Risk Committee on Thursday 9 September 2010.
Mr Derrick Msibi was appointed as a member of the Audit and Risk Committee on 22
September 2010.
APPRECIATION
We thank our loyal staff for their commitment and also thank our business
partners, advisors, clients, and most importantly our shareholders, for their
ongoing support and participation in the rights offer.
PROSPECTS
The Group`s manufacturing facilities, operational infrastructure and credit risk
principles endured the challenges thrusted upon its business and in the process
also led to many improvements. Reduced debt levels, access to working capital
and an expected increase in volume and profit margins support the Group`s
strategic intent to outperform its competitors in the medium term.
By order of the Board
18 November 2010
MS Shangase B Blom
Managing Director Financial Director
CORPORATE INFORMATION
Directors:
Non-Executive SA Tati (Chairman), MM Patel*, DTV Msibi*,
WAF Strydom
*Independent
Executive MP Shangase (Managing Director),
B Blom (Financial Director)
Company Secretary Premium Corporate Consulting Services (Pty) Ltd
Registered office Unit 28, First Floor
Waterford Office Park
Fourways
Johannesburg
2188
Business address Farm 246, Luipaardsvlei
Krugersdorp
1739
Postal address PO Box 99
Rant en Dal
Krugersdorp
1751
Holding company Yakani Infraco (Proprietary) Limited
Incorporated in South Africa
Transfer secretaries: Link Market Services South Africa (Pty) Limited
Designated Adviser: Grindrod Bank Limited
These results and an overview of African Brick Centre are available at
www.africanbrick.co.za.
30 November 2010
Date: 30/11/2010 12:32:01 Produced by the JSE SENS Department.
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