| Tue 29 Mar 2011, 9:01 | | CSB - Cashbuild Limited - Audited Group Interim Results and Dividend Declaration |
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CSB
CSB
CSB - Cashbuild Limited - Audited Group Interim Results and Dividend Declaration
December 2010
Cashbuild Limited
(Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
Listed on the JSE Limited
JSE Share Code: CSB ISIN:ZAE000028320
AUDITED GROUP INTERIM RESULTS AND DIVIDEND DECLARATION DECEMBER 2010
Net asset value per share up 17% Revenue up 7% Operating profit down 1%
Operating profit excl BEE transaction up 43% Interim dividend up 48%
Headline earnings down 21% Headline earnings excl BEE transaction up 48%
CONDENSED GROUP INCOME STATEMENT - AUDITED
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2010 2009 % 2010
R`000 (26 weeks) (26 weeks) change (52 weeks)
Revenue 2,986,823 2,803,003 7 5,369,146
Cost of sales (2,322,104) (2,232,835) 4 (4,216,241)
Gross profit 664,719 570,168 17 1,152,905
Selling and marketing expenses (472,292) (390,409) 21 (776,838)
Administrative expenses (76,293) (62,352) 22 (132,470)
Other operating expenses (2,227) (1,244) 79 (5,398)
Other income 2,149 1,205 78 1,245
Operating profit 116,056 117,368 (1) 239,444
Finance cost (538) (787) (32) (5,700)
Finance income 15,563 9,753 60 21,936
Profit before income tax 131,081 126,334 4 255,680
Income tax expense (62,333) (39,910) 56 (82,005)
Profit for the period 68,748 86,424 (20) 173,675
Attributable to:
Owners of the company 62,482 82,013 (24) 163,776
Non-controlling interests 6,266 4,411 42 9,899
68,748 86,424 (20) 173,675
Earnings per share (cents) 275.2 361.1 (24) 721.2
Diluted earnings per share (cents) 273.4 360.3 (24) 717.7
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME - AUDITED
Six months Six months Year
ended ended ended
31 December 31 December 30 June
2010 2009 2010
R`000 (26 weeks) (26 weeks) (52 weeks)
Profit for the period 68,748 86,424 173,675
Other comprehensive income:
Foreign currency translation adjustments (3,698) (3,251) (5,075)
Other comprehensive income for the period,
net of tax (3,698) (3,251) (5,075)
Total comprehensive income for the period 65,050 83,173 168,600
Total comprehensive income attributable to:
Owners of the company 59,468 78,762 158,701
Non-controlling interests 5,582 4,411 9,899
65,050 83,173 168,600
ADDITIONAL INFORMATION - AUDITED
Six months Six months Year
ended ended ended
31 December 31 December 30 June
R`000 2010 2009 2010
Net asset value per share (cents) 2,894 2,484 2,703
Ordinary shares (`000):
- In issue 25,190 25,805 25,805
- Weighted-average 22,707 22,709 22,709
- Diluted weighted-average 22,850 22,764 22,821
Capital expenditure 97,461 93,945 137,849
Depreciation of property, plant
and equipment 26,561 24,058 48,002
Amortisation of intangible assets 357 347 709
Capital commitments 87,516 133,303 104,744
Property operating lease commitments 808,555 789,928 891,907
Contingent liabilities 30,303 15,265 17,910
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION - AUDITED
31 December 31 December 30 June
R`000 2010 2009 2010
ASSETS
Non-current assets 529,957 443,324 462,763
Property, plant and equipment 489,980 410,614 425,293
Intangible assets 30,497 24,065 28,149
Deferred income tax assets 9,480 8,645 9,321
Current assets 1,723,063 1,581,375 1,398,498
Assets held for sale 659 659 659
Inventories 842,736 868,689 784,445
Trade and other receivables 76,813 73,604 71,114
Cash and cash equivalents 802,855 638,423 542,280
Total assets 2,253,020 2,024,699 1,861,261
EQUITY AND LIABILITIES
Shareholders` equity 778,861 687,537 749,606
Share capital and reserves 728,939 640,885 697,466
Non controlling interests 49,922 46,652 52,140
Non-current liabilities 76,218 65,541 71,496
Deferred operating lease liability 71,754 61,493 67,318
Deferred profit 1,725 1,777 1,751
Deferred income tax liability 143 - -
Borrowings (non interest-bearing) 2,596 2,271 2,427
Current liabilities 1,397,941 1,271,621 1,040,159
Trade and other liabilities 1,388,163 1,244,942 1,018,360
Current income tax liabilities 7,765 24,634 19,781
Employee benefits 2,013 2,045 2,018
Total equity and liabilities 2,253,020 2,024,699 1,861,261
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY - AUDITED
R`000 Attributable to owners of the company
Share Cum.
Treasury based trans- Non-
Share share Treasury pay- lation controlling
capi- capi- Share share ment adjust- Retained inte- Total
tal tal premium premium reserve ments earnings rests equity
Balance at 1 July 2009
258 (29) 115,817 (83,686) 475 (6,566) 558,286 43,679 628,234
Total comprehensive income for the period
- - - - - (3,251) 82,013 4,411 83,173
Dividend paid - final 2009
- - - - - - (23,270) (1,438) (24,708)
Recognition of share based payments
- - - - 838 - - - 838
Balance at 31 December 2009
258 (29) 115,817 (83,686) 1,313 (9,817) 617,029 46,652 687,537
Total comprehensive income for the period
- - - - - (1,824) 81,763 5,488 85,427
Dividend paid - interim 2010
- - - - - - (24,196) - (24,196)
Recognition of share based payments
- - - - 838 - - - 838
Balance at 30 June 2010
258 (29) 115,817 (83,686) 2,151 (11,641) 674,596 52,140 749,606
Total comprehensive income for the period
- - - - - (3,014) 62,482 5,582 65,050
Share buy back
(6) 6 (49,994) 49,994 - - - - -
Dividend paid - final 2010
- - - - - - (28,834) (7,800) (36,634)
Recognition of share based payments
- - - - 839 - - - 839
Balance at 31 December 2010
252 (23) 65,823 (33,692) 2,990 (14,655) 708,244 49,922 778,861
CONDENSED GROUP CASH FLOW STATEMENT - AUDITED
Six months Six months Year
ended ended ended
31 December 31 December 30 June
R`000 2010 2009 2010
Cash flows from operating activities
Cash generated from operations 454,525 434,213 448,595
Interest paid (538) (787) (5,700)
Taxation paid (74,365) (36,323) (83,947)
Net cash generated from operating
activities 379,622 397,103 358,948
Cash flows from investing activities
Net investment in assets (96,681) (90,541) (134,373)
Interest received 15,563 9,753 21,936
Net cash used in investing activities (81,118) (80,788) (112,437)
Cash flows from financing activities
Increase in borrowings 169 145 301
Dividends paid
- own equity (28,834) (23,270) (47,466)
- non-controlling interests (7,800) (1,438) (1,438)
Net cash used in financing activities (36,465) (24,563) (48,603)
Net increase in cash and cash equivalents 262,039 291,752 197,908
Effect of exchange rate movements on cash
and cash equivalents (1,464) (1,459) (3,758)
Cash and cash equivalents at beginning
of period 542,280 348,130 348,130
Cash and cash equivalents at end
of period 802,855 638,423 542,280
CONDENSED GROUP SEGMENTAL ANALYSIS - AUDITED
SOUTH AFRICA
Six months Six months Year
ended ended ended
31 December 31 December 30 June
R`000 2010 2009 2010
Income statement
Revenue 2,566,826 2,356,361 4,533,300
Operating profit 94,079 93,266 195,314
Statement of financial position
Segment assets 1,876,151 1,691,293 1,543,791
Segment liabilities 1,278,059 1,170,526 976,272
Other segment items
Depreciation 24,045 21,743 43,447
Amortisation 357 347 674
Capital expenditure 82,080 89,683 131,755
OTHER MEMBERS OF COMMON MONETARY AREA*
Income statement
Revenue 271,192 278,744 521,264
Operating profit 17,221 13,931 27,653
Statement of financial position
Segment assets 234,436 201,332 196,137
Segment liabilities 115,021 92,003 75,096
Other segment items
Depreciation 1,590 1,472 2,795
Amortisation - - -
Capital expenditure 13,043 349 1,967
* Includes Namibia, Swaziland and Lesotho
BOTSWANA AND MALAWI
Income statement
Revenue 148,805 167,898 314,582
Operating profit 4,756 10,171 16,477
Statement of financial position
Segment assets 142,433 132,074 121,333
Segment liabilities 81,079 74,633 60,287
Other segment items
Depreciation 926 843 1,760
Amortisation - - 35
Capital expenditure 2,338 3,913 4,127
GROUP
Income statement
Revenue 2,986,823 2,803,003 5,369,146
Operating profit 116,056 117,368 239,444
Statement of financial position
Segment assets 2,253,020 2,024,699 1,861,261
Segment liabilities 1,474,159 1,337,162 1,111,655
Other segment items
Depreciation 26,561 24,058 48,002
Amortisation 357 347 709
Capital expenditure 97,461 93,945 137,849
NOTES TO THE CONDENSED GROUP INTERIM FINANCIAL INFORMATION
1. Basis of preparation. The condensed consolidated interim financial
information ("financial information") announcement is based on the audited
interim financial statements of the group for the period ended 31 December 2010
which have been prepared in accordance with International Financial Reporting
Standards ("IFRS") and the presentation and disclosure requirements of IAS 34 -
Interim Financial Reporting, the Listings Requirements of the JSE and the South
African Companies Act (1973) and consistently applied to the prior year.
2. Independent audit by the auditors. These condensed consolidated interim
results have been audited by our auditors PricewaterhouseCoopers Inc., who have
performed their audit in accordance with the International Standards on
Auditing. A copy of their unqualified audit report is available for inspection
at the registered office of the company.
3. Reporting period. The group adopts the retail accounting calendar, which
comprises the reporting period ending on the last Saturday of the month (2010:
25 December (26 weeks); 2009 : 26 December (26 weeks); June 2010: 26 June (52
weeks)).
4. Earnings per share. Earnings per share is calculated by dividing the earnings
attributable to owners of the company for the period by the weighted average
number of 22,706,987 ordinary shares in issue during the period (December 2009:
22,709,487 shares; June 2010 : 22,709,487 shares).
5. Headline earnings per ordinary share. The calculations of headline earnings
and diluted headline earnings per ordinary share are based on headline earnings
of R63.7 million (December 2009: R81.0 million; June 2010: R162.9 million) and a
weighted average of 22,706,987 (December 2009: 22 709 487; June 2010:
22,709,487) and fully diluted of 22,849,556(December 2009: 22,763,737; June
2010: 22,820,888) ordinary shares in issue.
Reconciliation between net profit attributable to the owners of the company and
headline earnings.
%
R`000 Dec-10 Dec-09 change Jun-10
Net profit attributable to the owners
of the company 62,482 82,013 (24) 163,776
Loss/(profit) on sale of assets after
taxation 1,217 (1,035) (902)
Headline earnings 63,699 80,978 (21) 162,874
Headline earnings per share (cents) 280.5 356.6 (21) 717.2
Diluted headline earnings per share (cents) 278.8 355.7 (22) 713.7
6. Declaration of dividend.
The board has declared a interim dividend (No. 36), of 157 cents (December 2009:
106 cents) per ordinary share to all shareholders of Cashbuild Limited. The
dividend per share is calculated based on 25 189 811 shares in issue at date of
dividend declaration.
Date dividend declared: Monday, 28/03/2011
Last day to trade "CUM" the dividend: Thursday, 14/04/2011
Date commence trading "EX" the dividend: Friday, 15/04/2011
Record date: Thursday, 21/04/2011
Date of payment: Tuesday, 26/04/2011
Share certificates may not be dematerialised or rematerialised between Friday,
15 April 2011 and Thursday, 21 April 2011, both dates inclusive.
On behalf of the board
DONALD MASSON PAT GOLDRICK
Chairman Chief executive
Johannesburg Date: 28 March 2011
NATURE OF BUSINESS
Cashbuild is southern Africa`s largest retailer of quality building materials
and associated products, selling direct to a cash-paying customer-base through
our constantly expanding chain of stores (192 at the end of this reporting
period). Cashbuild carries an in-depth quality product range tailored to the
specific needs of the communities we serve. Our customers are typically home-
builders and improvers, contractors, farmers, traders, large construction
companies and government-related infrastructure developers, as well as all other
customers requiring quality building materials at lowest prices.
Cashbuild has built its credibility and reputation by consistently offering its
customers quality building materials at the lowest prices and through a
purchasing and inventory policy that ensures customers` requirements are always
met.
INTERNATIONAL FINANCIAL REPORTING STANDARDS
The group is reporting its audited interim results in accordance with
International Financial Reporting Standards ("IFRS").
BEE TRANSACTION
In terms of a special resolution adopted by shareholders on 6 December 2010,
shares to the value of R50 million were repurchased by the company from the
Cashbuild Empowerment Trust ("the Trust"). The value realized by this
transaction was distributed to the beneficiaries of the Trust. This distribution
is reported as a personnel expense in the group interim income statement. The
associated transactional costs, including the tax effects of the transaction are
also accounted for.
The financial effects can be summarised as follows:
Before % After %
change change
on 2009 on 2009
Operating profit 167,325 43 116,056 (1)
Attributable earnings 118,751 45 62,482 (24)
Net asset value per share (cents) 3,117 25 2,894 17
Headline earnings per share (cents) 528.3 48 280.5 (21)
The financial highlights below should be read in conjunction with this table.
FINANCIAL HIGHLIGHTS
Revenue for the half-year increased by 7% whilst operating profit decreased by
1%. This decrease in profit is a result of an increase in gross profit of 17%,
whilst operating expenses increased by 21%, largely as result of the effects of
the BEE transaction described above. Basic earnings per share decreased by 24%
and headline earnings per share decreased by 21%. Net asset value per share has
shown a 17% increase, from 2,484 cents (Dec 2009) to 2,894 cents. Cash and cash
equivalents increased by 26% to R802 million.
Stores in existence since the beginning of July 2009 (pre-existing stores - 180
stores) accounted for 4% of the increase in revenue with the remaining 3%
increase due to the 12 new stores the group has opened since July 2009. This
increase for the year has been achieved in tough trading conditions with selling
price inflation of 2%. The growth in customer transactions of 5% (of which 2% is
from the existing store base) is encouraging and bodes well for the future.
Despite the competitive environment, gross profit percentage margin increased to
22.3% during this period and was 2.0% higher in percentage terms than the 20.3%
achieved for the comparative period of the prior year.
Operational expenses (excluding BEE transaction) for the period remained well
controlled with existing stores accounting for 7% of the increase and new stores
3%. The total increase for the period amounted to 10%.
The effective tax rate for the period of 48% is 16% higher than that of the
comparable period, largely due to the non deductibility of the people cost
component of the BEE transaction. The normalised effective tax rate is 31.7%
Cashbuild`s statement of financial position remains solid. Stock levels have
decreased by 3%. This decrease is in spite of the stocking of seven additional
stores since the previous half year-end. Overall stockholding at 61 days
(December 2009: 68 days; June 2010: 72 days) showed an improvement on the
position as at December 2009 and June 2010. Trade receivables remain well under
control.
During the period, Cashbuild opened four new stores. Five stores were
refurbished and one store relocated. Cashbuild will continue its store
expansion, relocation and refurbishment strategy in a controlled manner,
applying the same rigid process as in the past.
PROSPECTS
Management remains optimistic about the revenue prospects for the next quarter.
The first nine trading weeks since year-end have reported an increase in revenue
of 5% on that of the comparable nine weeks. It is anticipated that gross profit
percentage margins will be under pressure during the second half trading.
Directors: D Masson* (Chairman), PK Goldrick (Chief executive) (Irish), WF de
Jager, KB Pomario, AE Prowse, FM Rossouw*, NV Simamane*, SA Thoresson, A van
Onselen
(*non-executive)
Company secretary: Corporate Governance Leaders CC
Registered office: cnr Northern Parkway and Crownwood Rd, Ormonde, Johannesburg
2001. PO Box 90115, Bertsham 2013
Transfer secretaries: Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg 2001. PO Box 61051, Marshalltown 2107
Auditors: PricewaterhouseCoopers Inc.
Sponsor: Nedbank Capital
QUALITY BUILDING MATERIALS AT THE LOWEST PRICES
www.cashbuild.co.za
Date: 29/03/2011 09:01:03 Produced by the JSE SENS Department.
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