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WILSON BAYLY HOLMES - OVCON LIMITED
Civil Engineering and Building Contractors
(Registration No. 1982/011014/06)
Interim Results for the six months ended 31 December 2000
* Turnover up 15%
* Operating Income up 23%
* Earnings per share up 22%
ABRIDGED GROUP INCOME STATEMENT
% 6 months to 6 months to Year to
increase/ 31 Dec 2000 31 Dec 1999 30 June 2000
(decrease) R'000 R'000 R'000
Turnover 15.4 735782 637846 1309550
Operating Income 23.0 32004 26017 53749
Investment income 18.8 8014 6746 14844
Income before interest 40018 32763 68593
Interest paid (76.3) 249 1049 1146
Income before taxation 25.4 39769 31714 67447
Taxation 33.6 11851 8869 18397
Income after taxation 22.2 27918 22845 49050
Associate company's
earnings 40 (230)
Attributable income 22.0 27918 22885 48820
Shares in issue (000's) 55491 55491 55491
Earnings per share
(cents) 22.0 50.3 41.2 88.0
ABRIDGED CASH FLOW STATEMENT
6 months to 6 months to Year to
31 Dec 2000 31 Dec 1999 30 June 2000
R'000 R'000 R'000
Cash flows from operating
activities
Cash generated by operations 92392 41003 122068
Investment income 8014 6746 14844
Cash generated from operations 100406 47749 136912
Financing costs (249) (1049) (1146)
Taxation (1512) - (12622)
Dividend - 7214 (11654)
Cash retained from operations 98645 39486 111490
Utilised in investing activities
Change in investments (24047) (2530) (7126)
Purchase of fixed assets (10075) (7713) (22854)
Repayment of share premium (8878) - -
Cash flow after investing
activities 55645 29243 81510
Cash effects of financing
activities
Change in net debt (474) (4745) (6245)
Net increase in bank balances 55171 24498 75265
ABRIDGED GROUP BALANCE SHEET
31 Dec 2000 31 Dec 1999 30 June 2000
R'000 R'000 R'000
ASSETS
Non-current assets 183438 138483 162180
Property, plant and equipment 118575 116978 121364
Investments 64863 21505 40816
Current Assets 487349 321024 475549
Inventories 8633 18655 16637
Contracts in progress 158783 104067 185286
Accounts receivable 49686 33993 58550
Bank balances 270247 164309 215076
Total assets 670787 459507 637729
EQUITY AND LIABILITIES
Ordinary share capital and
reserves 231347 183844 207464
Non-current liabilities 52952 50345 50356
Interest bearing debt 186 733 434
Deferred tax 52766 49612 49922
Current liabilities 386488 225318 379909
Short-term loans 532 1796 758
Accounts payable 367673 219083 368363
Taxation 18283 - 10788
Proposed dividend - 4439 -
Total equity and liabilities 670787 459507 637729
Net asset value per share (c) 417 331 374
NOTES AND ADDITIONAL INFORMATION
31 Dec 31 Dec 30 June
2000 1999 2000
R'000 R'000 R'000
1. Segmental results
Turnover
Local 581247 404701 997965
International 154535 233145 311585
735782 637846 1309550
Operating income
Local 23477 14959 28342
International 8527 11058 25407
32004 26017 53749
Results at the interim period are not
seasonally influenced.
2. Depreciation 12761 14609 24761
3. Contingent liabilities
Guarantees issued 272712 188639 210610
4. Continuity
These results are based on the same accounting policies and methods of
computation as those used in preparing the annual financial statements at 30
June 2000.
STATEMENT OF CHANGES IN EQUITY
6 months to 6 months to Year to
31 Dec 2000 31 Dec 1999 30 June 2000
R'000 R'000 R'000
Capital and reserves at
start of period 207464 164896 164479
Net profit of period 27918 22885 48820
Foreign currency translation
reserve 4843 503 (1395)
Dividends - (4440) (4440)
Share premium repayment (8878) - -
Capital and reserves at the
end of period 231347 183844 207464
COMMENTS
Good results despite tough trading conditions
The construction industry continued to experience tough trading conditions in
South Africa during the six months under review. The building sector in
particular continues to be depressed and the major wave of casino contracts has
ended. There have, however, been a number of large building projects out to
tender which have been keenly priced.
Despite these adverse conditions operating income for the period under review
increased to R32m on a turnover increase of 15%. Attributable profit at R28m
represents an increase of 22% over the comparable period and net asset value
per share has increased to 417 cents per share.
The Stock Civils acquisition which became unconditional in January 2001 not
only provides the group with enhanced civil engineering, roads, earthworks and
mining capacity but also broadens the group's footprint geographically and
increases its client base.
A swing to civil engineering contracts
There has been a noticeable increase in the volume of work on offer in the
civil engineering sector since the beginning of this year and the group has
been awarded contracts for civil engineering works amounting to a sum in excess
of R335 million. This work has filled the gap caused by a decline in building
contracts undertaken by the group.
Roads and Earthworks division exceptionally busy
The roads and earthworks division remains busy with more of its work being
executed in South Africa than previously. The division has major road contracts
in Swaziland, Lesotho and Botswana and is engaged in flood relief work in
Mozambique. The company was recently awarded a mine development contract in
Namibia and construction on the N4 platinum tollroad is expected to commence in
the near future.
Casino projects successfully completed
The SunWest and Caesars casino projects were successfully completed during the
period but work continues on the Emerald Safari resort on the Vaal River. There
are still a number of casinos to be built and these should be coming out to
tender in the near future. Work on the extensions to the Menlyn Centre in
Pretoria is in its final stages and the Gateway Shoppertainment World contract
in Umhlanga will continue well past the end of this financial year. The company
was recently awarded the contract for the construction of the Japanese embassy
in Pretoria as well as alternations and extensions to Sandton City. Extensions
to the Hyde Park Shopping centre were also carried out during the period.
Extensions and renovations to various hospitals in the major metropolitan areas
have been proved to be a useful source of work.
Coastal divisions perform well
Both the Cape and KwaZulu-Natal branches remain busy and are expected to
achieve satisfactory profits for the year.
New property development
The company's office park development in Atholl, Sandton has been completed and
successfully on sold. The company also has a stake in a company owning an
office block in Gwen Lane, Sandton situated in the centre of South Africa's
financial district. The intention is to redevelop this property, creating a
high-rise landmark office tower with lettable space of up to 35 000m2.
New acquisition in final stages
The company is in the final stages of completing a major offshore acquisition
concerning which it has issued a cautionary notice to shareholders. An
announcement giving further details is emminent.
PROSPECTS
An even better second half expected
The company starts a new calendar year with an order book of R1.5 billion
excluding the N4 Platinum tollroad contract. In addition a number of major
projects such as Coega harbour and extensions to the port in Durban have been
announced and in general, expenditure on GDFI in both South Africa and in the
countries in which we operate is expected to increase. This augurs well for our
industry. Profits from our recent acquisitions will also add to the income
stream. The company therefore expects to record higher results in the second
half of the year compared to those achieved in the current period.
REPAYMENT OF SHARE PREMIUM
In lieu of dividend directors propose to repay a portion of the Company's share
premium amounting to R5 549 050.00 and equivalent to 10 cents per ordinary
share on or about 6 April 2001 to shareholders registered in the books of the
Company at close of business on 30 March 2001.
A notice convening a general meeting to approve this proposal will be included
in the interim report sent to shareholders.
On behalf of the board
BG HOLMES A J MACKENZIE
Chairman Director
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