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OLI
OLI - O-line Holdings Limited - Audited abridged results for the year ended 30
June 2010, notice of annual general meeting
O-line Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2006/034685/06)
JSE share code: OLI
ISIN Number: ZAE0000110730
("O-line" or "the Company" or "the Group")
Audited Abridged Results for the Year Ended 30 June 2010, Notice of Annual
General Meeting
* HIGHLIGHTS:
* REVENUE UP 14.49%
* MAIDEN DIVIDEND OF 5 CENTS PER SHARE PAID
* NET ASSET VALUE PER SHARE 92.85 CENTS
1 Posting of Annual Report
Shareholders are informed that O-line's Annual Report for the year ended 30
June 2010 will be posted to shareholders today.
2 Audited Financial Information
Condensed Group Statement of Financial Position
As at As at
30 June 30 June
2010 2009
Audited Audited
R'000 R'000
ASSETS
Non-current assets 165 870 153 479
Property, plant and equipment 76 783 71 331
Goodwill 64 632 64 632
Other financial assets 18 702 13 853
Deferred tax 5 753 3 663
Current assets 192 505 173 355
Inventories 75 672 66 547
Other financial assets 2 292
Current tax receivable 1 781 245
Trade and other receivables 56 012 54 639
Cash and cash equivalents 56 748 51 924
TOTAL ASSETS 358 375 326 834
EQUITY AND LIABILITIES
Equity 221 456 174 809
Share capital 132 217 91 667
Reserves 38
Retained income 89 201 83 142
Liabilities
Non-current liabilities 54 906 66 306
Borrowings 43 551 54 490
Finance lease obligations 2 841 3 129
Deferred taxation 8 514 8 687
Current liabilities 82 013 85 719
Borrowings 18 750 33 460
Current taxation payable 591 12 411
Finance lease obligation 1 852 1 735
Trade and other payables 60 820 37 858
Provisions - 255
Total liabilities 136 919 152 025
Total equity and liabilities 358 375 326 834
Condensed Group Statement of Comprehensive Income
Year ended Year ended
30 June 30 June
2010 2009
Audited Audited
R'000 R'000
Continuing operations
% Increase (14.49%)
Revenue 351 368 306 903
Cost of Sales (235 692) (192 560)
Gross Profit 115 676 114 343
Other Income 721 3 149
Operating Expenses (75 482) (58 203)
Operating Profit 40 915 59 289
Investment Revenue 4 093 3 568
Impairment (8 053) -
Finance Costs (6 798) (6 845)
Profit before taxation 30 157 56 012
Taxation (9 468) (15 622)
Profit from continuing operations 20 689 40 390
Discontinued operations
Loss from discontinued operations (4 805) (1 856)
---------- ----------
Profit for the year 15 884 38 534
Other comprehensive income
Exchange differences on translating
foreign operations 38 -
---------- ----------
Total comprehensive income 15 922 38 534
========== ==========
Earnings and headline earnings per share
7.23 21.80
Earnings per share (cents) 9.42 22.85
(2.19) (1.05)
- Continuing operations
- Discontinued operations
Headline and fully diluted headline earnings per 7.70 21.79
share (cents) 9.45 22.84
(1.75) (1.05)
- Continuing operations
- Discontinued operations
Reconciliation of earnings and headline R'000 R'000
earnings
Headline earning 20 769 40 376
Continuing operations 20 689
40 390
Profit after taxation
Add: Loss/(Profit) on sale of fixed assets
80 (14)
Headline earnings
Discontinued operations (3844)
(1856)
Loss after taxation (4 (1
805) 856)
Less: Loss on sale of fixed assets
Total Headline Earning --------- ---------
-16 925 -
Weighted Average number of shares ========= 38 520
= =========
=
(`000) 219 176
744 753
Actual number of shares in issue (`000) 238 500 196 500
Headline and diluted earnings per share
(cents) 7.70 21.79
Continuing operations 9.45 22.84
Discontinued operations (1.75)
(1.05)
Condensed Group Statement of Changes in Equity
Share Share Foreign Retained Total
capital premium currency income equity
Translati
on
Reserve
R'000 R'000 R'000 R'000 R'000
Balance at 1 July *- 47 371 - 44 608 91 979
2008
Total comprehensive -
income for the year - - 38 534 38 534
Issue of shares *- 46 500 - - 46 500
Share issue (2 204) - (2 204)
expenses
Total changes *- 44 296 - 38 534 82 830
Balance at 1 July
2009 - 91 667 - 83 142 174 809
Total comprehensive 38
income for the year - - 15 884 15 922
Issue of shares *- 42 000 - - 42 000
Share issue - (1 450) - - (1 450)
expenses - - - (9 825) (9 825)
Dividends
Total changes - 40 550 38 6 059 46 647
Balance at 30 June *- 132 217 38 89 201 221 456
2010
*Less than R1 000
Condensed Group Cash Flow Statement
As at 30 As at 30
June 2010 June 2009
Audited Audited
R'000 R'000
Cash flows from operating activities
Cash generated from operations 57 218 71 188
Interest income 4 093 3 568
Finance costs (6 407) (6 384)
Taxation paid (25 088) (14 247)
Cash flows of discontinued operations
(3721) (1655)
Net cash from operating activities 26 095 52 470
Cash flows from investing activities
Purchase of property, plant and equipment (12 297) (7 101)
Sale of property, plant and equipment 1 378 5 151
Business combinations - (129 811)
Sale of business 2 292 -
Purchase of financial assets (7 141) (13 853)
Net cash from investing activities (15 768) (145 614)
Cash flows from financing activities
Proceeds on share issue 40 551 44 296
Proceeds from borrowings - 67 531
Repayment of borrowings (25 649) -
Movement in loans to directors, managers and (8 053) -
employees
Repayment of shareholders loans - (12 181)
Finance lease payments (2 565) (1 506)
Dividend paid (9 825)
Net cash from financing activities (5 541) 98 140
Total cash movement for the year 4 786 4 996
Cash at the beginning of the year 51 924 46 928
Effect of exchange rate movement on cash 38 -
balances
Total cash at end of year 56 748 51 924
3 Basis of preparation and corporate governance
The financial information has been prepared in accordance with
International Financial Reporting Standards ("IFRS"), the Companies Act of
South Africa, as amended, and the JSE Limited ("JSE") Listings
Requirements. The financial information has been prepared under the
historical cost convention. The principle accounting policies used in the
preparation of the financial information is consistent with those applied
for the year ended 30 June 2009.
The financial information set out above has been prepared from the annual
financial statements for the year ended 30 June 2010 which have been
audited by AM Smith and Company Inc. and their unmodified audit opinion is
available for inspection at O-line's registered office. The O-line Group
complies with the Corporate Practise and Conduct as required in terms of
the JSE Listings Requirements.
4 Notes
Discontinued operations
The group has decided to discontinue its operations in the signage business
of Armco Superlite (Pty) Ltd ("Armco"). The assets and liabilities of the
discontinued operation were disposed of and settled respectively.
The decision was made by the board to discontinue these operations due to a
lack of return on investment.
Year end Year end
30 June 30 June
2010 2009
R'000 R'000
Profit and Loss
Revenue 5 604 6 891
Expenses (12 278) (9 469)
Net loss before tax (6 674) (2 578)
Taxation 1 869 722
Loss (4 805) (1 856)
Major Changes to the Statement of Financial Position
Non Current Assets and Non Current Liabilities
Non-current assets increased from R153 million to R166 million mainly as a
result of a net increase in the Armco management loans of R4.8 million
after the impairment provision of R8 million, paid in terms of the
guarantee by the company to Steelwood Africa (Pty) Ltd and additional
property and plant acquired of R10 million. Non current liabilities
decreased from R66 million to R55 million as a result of a reduction in
borrowings of R11.2 million.
Current Assets and Current Liabilities
Current assets increased from R173 million to R193 million and current
liabilities decreased from R86 million to R82 million mainly attributable
to an increase in inventory of R9.1 million, cash and cash equivalents of
R4.8 million and a reduction in borrowings of R14.6 million and net taxes
owing and receivable of R13.3 million. Trade receivables increased
marginally and trade payables increased substantially due to an increase in
raw material purchases. This is reflected in increased inventory levels at
year-end.
Equity
Equity increased from R175 million to R221 million attributed to the R40.5
million equity raised as a result of the Tiso share issue, and the current
profit of R15.8 million less the dividend paid of R9.8 million.
5 Dividends
The directors declared a maiden cash dividend of 5 cents per share, which
was paid on Monday, 9 November 2009, to ordinary shareholders recorded in
the books of the Company at the close of business on Friday, 6 November
2009.
Dividends are declared after consideration on solvency and liquidity of the
company, future funding requirements and attributable cash flows.
Accordingly the Board of Directors at their discretion will at a future
date decide whether or not to declare a dividend for the current year.
6 Related party transactions
During the period, the Group entered into various transactions with its
related parties. Full disclosure is made in the O-line annual report for
the year ended 30 June 2010.
Abridged segmental Year ended 30 June Year ended 30 June
results, assets and 2010 2009
liabilities
Revenue
O-line Support
Systems 157 806 188 236
ARMCO 214 707 132 726
Eliminations (15 541) (7 168)
Total 356 972 313 794
Operating profit
O-line Support
Systems 6 295 29 578
ARMCO 29 274 27 938
Corporate (359) (6 223)
Eliminations (969) 5 432
Total 34 241 56 725
Assets
O-line Support
Systems 111 660 91 186
ARMCO 190 941 190 142
Corporate 137 205 111 987
Eliminations (81 431) (66 481)
Total 358 375 326 834
Liabilities
O-line Support
Systems 51 042 27 551
ARMCO 170 429 177 472
Corporate 312 17 318
Eliminations (84 864) (70 316)
Total 136 919 152 025
7 Cash Flow
The excess cash generated out of O-line and the raised equity has been
spent on capital expenditure, working capital and the repayment of debt
incurred as a result of the Armco acquisition.
Chairman, E.A. Jay, market overview
Market conditions during the year have been fairly difficult. Many projects
have either been shelved or delayed. The first six months of the financial
year were particularly difficult but there has been a steady improvement in
the market. Many of the larger projects that were delayed are now coming
back on steam and many of the Africa projects have been re-instated.
Failing any major market calamity, the market for the year ahead should
show a steady improvement. We thus remain cautiously optimistic for the
year ahead.
Chief Executive Officer, Graeme Smart, view of future prospects
Moving forward the Group is well positioned. All objectives regarding
establishment of new branches and the refurbishment and upgrade of certain
plants, accompanied by the arrival of some new machinery, have taken place
and all branches are fully operational. Sectors are definitely showing
signs of returning to business as usual and projects that were halted or
shelved have been resubmitted for re costing, indicating that most are now
becoming bankable. Divisionally both the cable management and galvanizing
plants have the larger infrastructure projects to look forward to with the
focus being on power plants such as Medupi and Kusile.
O-line Support Systems looks forward to an exciting future as it ventures
into a partnership with another international player, resulting in a new
range of products with an emphasis on commercial products pertaining to
buildings, shopping centers and office parks.
Road safety products are expected to maintain their momentum as
construction companies begin the final phase of the Gauteng freeway
upgrade. Road safety products have also experienced increased international
demand from Mozambique, Angola and a few others countries and this is
expected to grow as these African countries follow suit with infrastructure
development. Construction products have experienced a huge demand from
surrounding countries to date and continue to grow the order book, all
resulting in the expectation of a great year ahead.
8 Notice of Annual General Meeting
The AGM of O-line shareholders will be held at 14-16 Prop Street, Selby Ext
11, Johannesburg, 2001, South Africa, on Friday 26 November 2010, at 10h00.
Details of the proceedings and resolutions are contained in the Annual
Report.
For and on behalf of the Board
G.S. Smart (Chief Executive Officer)
E.A. Jay (Chairman)
23 September 2010
Designated Advisor: QuestCo Sponsors (Proprietary) Limited
Date: 23/09/2010 17:16:01 Produced by the JSE SENS Department.
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