| Wed 20 Jul 2011, 11:31 | | ELI - Ellies Holdings Limited - Audited results for the year ended 30 April 2011 |
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ELI
ELI
ELI - Ellies Holdings Limited - Audited results for the year ended 30 April 2011
Ellies Holdings Limited
(Registration No. 2007/007084/06)
Share code ELI ISIN code ZAE000103081
AUDITED RESULTS FOR THE YEAR ENDED 30 APRIL 2011
Revenue up 14%
NPAT up 33%
HEPS 31,42 cents
NAV per share 196,40 cents
Abridged consolidated statement of financial position
Audited Audited
as at as at
30 April 2011 30 April 2010
R`000 R`000 % change
ASSETS
Non-current assets 309 553 264 159
Property, plant and equipment 76 584 33 059
- Land and buildings 41 353 -
- Other 35 231 33 059
Goodwill 217 554 217 554
Intangible assets 6 434 7 936
Investment in associate 1 039 -
Deferred taxation 7 942 5 610
Current assets 655 240 510 029
Inventories 358 895 297 811
Trade and other receivables 224 319 193 365
Taxation receivable 418 634
Bank and cash balances 71 608 18 219
Total assets 964 793 774 188
EQUITY AND LIABILITIES
Total shareholders` interests 596 079 517 254
Share capital and premium 501 494 501 494
Non-distributable reserves (178 875) (178 667)
Accumulated profits 274 824 194 427
Equity attributable to equity 597 443 517 254
holders of the parent
Non-controlling interests (1 364) -
Non-current liabilities 44 059 33 625
Interest-bearing liabilities 43 913 33 625
Deferred taxation 146 -
Current liabilities 324 655 223 309
Interest-bearing liabilities 29 672 23 380
Vendor loans payable - 13 607
Trade and other payables 245 182 147 346
Provisions 2 258 1 493
Taxation payable 1 099 6 011
Shareholders for dividends 188 -
Bank overdrafts 46 256 31 472
Total equity and liabilities 964 793 774 188
Shares in issue at the end of 303 505 691 303 505 691
the year (number of shares)
Net asset value per share 196,40 170,43 15,2
(cents)
Tangible net asset value per 122,81 96,46 27,3
share (cents)
Abridged consolidated statement of comprehensive income
Audited Audited
year ended year ended
30 April 2011 30 April 2010
R`000 R`000 % change
Revenue 1 316 055 1 156 478 13,8
Profit before depreciation, 159 786 132 433 20,7
amortisation, interest and
taxation ("EBITDA")
Depreciation (12 229) (11 904)
Amortisation of intangibles (1 502) (1 428)
Profit before interest and 146 055 119 101
taxation
Interest received 548 948
Interest paid (12 819) (19 719)
Share of losses from associate (531) -
Net profit before taxation 133 253 100 330
("PBT")
Taxation (39 044) (29 363)
Net profit after taxation 94 209 70 967 32,8
Other comprehensive income:
Foreign currency translation (208) (332)
reserve
Total comprehensive income for 94 001 70 635
the year
Attributable to:
Equity holders of the parent 95 573 70 967
Non-controlling interests (1 364) -
Net profit after tax 94 209 70 967
Attributable to:
Equity holders of the parent 95 365 70 635
Non-controlling interests (1 364) -
Total comprehensive income for 94 001 70 635
the year
Supplementary information:
Basic earnings per share 31,49 26,19 20,2
(cents)
Headline earnings per share 31,42 25,96 21,0
(cents)
Core headline earnings per 32,09 29,43 9,0
share (cents)
Diluted earnings per share 31,49 23,38 34,7
(cents)
Diluted headline earnings per 31,42 23,18 35,5
share (cents)
Diluted core headline earnings 32,09 26,27 22,2
per share (cents)
Dividends per share (cents) - 5,00
Shares in issue (number of
shares):
- At the end of the year 303 505 691 303 505 691
- Weighted 303 505 691 270 944 245
- Diluted 303 505 691 303 505 691
Reconciliation of earnings to headline earnings and core headline earnings
Audited Audited
year ended year ended
30 April 2011 30 April 2010
R`000 R`000 % change
Net profit for the year 95 573 70 967 34,7
attributable to equity holders
of the parent
Adjusted for:
Profit on sale of property, (301) (858)
plant and equipment
Tax effect on adjustments 84 240
Headline earnings attributable 95 356 70 349 35,5
to ordinary shareholders
Adjusted for:
Amortisation of intangibles 1 502 1 428
Transactional costs expensed 473 -
(Failed acquisition)
IFRS implied interest on vendor 481 8 356
liabilities
Tax effect on adjustments (421) (400)
Core headline earnings 97 391 79 733 22,1
attributable to ordinary
shareholders
Abridged consolidated statement of cash flows
Audited Audited
year ended year ended
30 April 2011 30 April 2010
R`000 R`000 % change
Cash flows from operating 93 290 63 268
activities
Cash generated from operations 166 000 101 805 63,1
Interest received 548 948
Interest paid (in cash) (12 338) (11 363)
Taxation paid (45 932) (28 122)
Dividends paid (14 988) -
Cash flows from investing (57 177) (17 388)
activities
Cash flows from financing 2 492 (5 566)
activities
Net increase in cash and cash 38 605 40 314
equivalents
Cash and cash equivalents at (13 253) (53 567)
the beginning of the year
Cash and cash equivalents at 25 352 (13 253)
the end of the year
Abridged statement of changes in equity
Audited Audited
year ended year ended
30 April 2011 30 April 2010
R`000 R`000
Balance at the beginning of the 517 254 385 685
year
Shares issued at a premium - 60 934
Total comprehensive income for 94 001 70 635
the year
Dividends declared during the (15 176) -
year
Balance at the end of the year 596 079 517 254
Segmental analysis
Audited Audited
year ended year ended
30 April 2011 30 April 2010
R`000 R`000 % change
Revenue 1 316 055 1 156 478
Wholesale distribution of 1 095 946 985 311 11,2
consumer goods and services
Infrastructural electrification 216 540 171 167 26,5
Property 3 131 -
Other 3 569 -
Holding company/consolidation (3 131) -
Segmental profits/(losses) from
operations
Profit before interest and 145 524 119 101
taxation
Wholesale distribution of 124 772 100 627 24,0
consumer goods and services
Infrastructural electrification 22 821 18 916 20,6
Property 2 646 -
Other (4 289) -
Holding company/consolidation (426) (442)
Net finance costs (12 271) (18 771)
Operating segments (combined) (10 108) (10 415)
Property division (1 682) -
Deemed vendor interest (481) (8 356)
Profit before taxation 133 253 100 330
Notes to the audited year end results
Audited results for the year ended 30 April 2011
The results for the year ended 30 April 2011 have been audited by PKF (Jhb) Inc.
and their unqualified audit report is available for inspection at the group`s
registered office.
Basis of preparation and accounting policies
These annual financial results have been prepared in accordance with
International Financial Reporting Standards ("IFRS"), the AC 500 series of
Interpretations, the requirements of IAS 34, the Listing Requirements of the JSE
Limited and the Companies Act of South Africa. The accounting policies used are
consistent with those applied in the previous financial year.
Commentary
Introduction
On 26 November 2010, Ellies Holdings Limited ("Ellies" or "the group")
transferred its listing from the Alternative Exchange to the Main Board -
"Electronic and Electrical Sector" of the JSE Limited.
The group is pleased to welcome Mr Oliver Fortuin to the board as Lead
Independent Director, effective from 11 April 2011. Oliver has more than 20
years` experience in the technology industry, 15 of these with IBM. He is
currently serving as a senior executive for IBM Sub-Saharan Africa.
Financial overview
The group achieved strong growth during the year under review, with overall
revenue up 14% and net profit after tax ("NPAT") up 33%, to R94,2 million (2010:
R70,9 million), with the two major segments having both achieved Profit from
operations growth in excess of 20%.
The Earnings growth of 34,7% translates into an EPS growth of 20,2% as a result
of the Rights Offer. As at 30 April 2010, shares in issue amounted to 303 505
691, while the weighted average number of shares amounted to 270 944 245.
The group`s balance sheet remains strong, with NAV and NTAV per share improving
to 196 cents (2010: 170 cents) and 123 cents (2010: 96 cents) respectively.
As stated in our 2010 interim results, the group has implemented a strategy to
acquire its operating premises countrywide and, where appropriate, upgrade these
premises. The Property segment has invested R43,4 million as at year end. The
group anticipates that, over time, the resultant capitalisation of property and
the value growth will deliver sound returns. Currently the properties are
financed through a ten year facility of R40 million. It is anticipated that the
directors will continue with this long term investment strategy.
Cash generation from operations during the period was healthy. At the period
end, the cash position had grown by R38,6 million. Much of this cash improvement
is due to additional creditor financing and significant cash receipts against
contract orders placed prior to year end, with a significant portion being
utilised towards the fulfilment of these contract orders.
Divisional overview
Ellies and Elsat divisions continued their solid performance with strong
consumer demand for its products and services. Gross margins improved by more
than 2% points, due to economies of scale and improved purchasing. Recognition
must be given to the growth in the TV satellite market, largely due to the 2010
FIFA World Cup and new TV satellite services providers entering the market.
The performance of the Infrastructural electrification segment reflects a
substantial improvement, in spite of the depressed conditions in the building
sector. This turnaround is largely due to the improved demand in the mining
resources sector. In addition, the division`s diversification into renewable
power solutions and the telecommunications sector, has contributed to this
improvement.
Prospects
Ellies, by its nature, will continue to grow and diversify by seeking new
products and ventures, and thus offering its solid customer base additional
quality products and services. We, together with our strategic alliance
partners, look forward to the imminent implementation of the Digital Terrestrial
Television ("DTT") migration rollout through southern Africa.
The group continues its participation in energy conservation and the reduction
of green house effects, with renewable energy sector products including solar
power, solar heating and energy-efficient lighting. In the past few months
Ellies has secured new agencies and products in the lighting and power creation
and conservation environment, to enhance its offerings. Ellies has established a
Green Office environment to showcase this.
The group intends to utilise different forms of carbon financing, including the
generation of carbon credits under the Clean Development Mechanism, to bring its
renewable energy sector products to market in an affordable and sustainable
manner.
The strong Rand has to some extent limited the export contributions from Ellies.
Management is adopting an aggressive approach to improve efficiencies and
capacity utilisation, thereby improving our African export penetration.
In-toto Solutions, a BEE initiative and subsidiary of Ellies, focuses on
government and large private sector projects. It has successfully completed its
first energy-efficient housing project, with future in-roads into this area
expected.
SkyeVine has started operating, by providing internet satellite connectivity
within Sub-Saharan Africa, with the successful launching of Intelsat`s New Dawn
Satellite. Ellies has a 45% interest in SkyeVine and will continue to invest and
co-develop the opportunities. Returns from this investment are expected to be
reflected in the coming years, with the growth in the subscriber base.
This venture not only utilises Ellies` established national and African logistic
infrastructure but also adds a new dimension to our satellite division.
SkyeVine`s internet services will provide redundancies and reach where
terrestrial broadband providers cannot. It is an all-inclusive Internet-via-
Satellite solution. SkyeVine, with its unique product offering, is focused on
growing the broadband subscriber base in Africa, by targeting the home user and
small enterprise markets.
With the mining sector once again starting to spend on infrastructural
developments, particularly in Africa, this segment`s contribution is expected to
continue to improve. This is supported by the current order book. The building
and electrification sectors however, are recovering at a slower rate. Megatron`s
continued diversification into associated power products, renewable energy and
telecommunications and together with the manufacture of transformers is expected
to contribute towards its future buoyancy.
The board remains positive as regards the group`s continued organic growth,
current new ventures, and new product opportunities which continue to present
themselves.
Dividend policy
The payment of dividends is reviewed periodically, taking into account
prevailing circumstances and future cash requirements. No dividend is proposed
at this stage due to short term funding requirements to support working capital
needs.
Appreciation
The directors and management, as always, continue to recognise and appreciate
the focused efforts and hard work of the group`s staff and also continue to
appreciate its customers, business partners, advisors, suppliers and, most
importantly, shareholders.
The recent labour unrest and related intimidation necessitated that some of our
Gauteng operations ceased trading for a limited period and we appreciate the
understanding of our customers and dedication of our many loyal staff members.
By order of the board
ER Salkow WMG Samson
Chairman CEO
20 July 2011
Directors:
Executive Directors:
ER Salkow (Chairman)
WMG Samson (Chief executive officer)
MF Levitt (Chief financial officer)
RH Berkman
RE Otto
Lead independent non-executive Director:
OD Fortuin (appointed 11 April 2011)
Independent non-executive Directors:
MR Goodford
MS Mazwi
Non-executive Directors:
AC Brooking
Registered office:
94 Eloff Street Ext, Village Deep, Johannesburg, 2001
(PO Box 57076, Springfield, 2137)
Sponsor:
Java Capital (Pty) Limited
Auditors:
PKF (Jhb) Inc.
Company secretary:
Probity Business Services (Pty) Limited
Transfer secretaries:
Link Market Services South Africa (Pty) Limited
Date: 20/07/2011 11:31:18 Produced by the JSE SENS Department.
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