| Mon 3 Oct 2011, 7:05 | | TFX - Top Fix Holdings Limited - Reviewed consolidated provisional results for |
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TFX
TFX
TFX - Top Fix Holdings Limited - Reviewed consolidated provisional results for
the year ended 30 June 2011
TOP FIX HOLDINGS LIMITED
(Registration number 2006/011359/06)
JSE code: TFX ISIN: ZAE000088423
REVIEWED CONSOLIDATED PROVISIONAL RESULTS FOR THE YEAR ENDED 30 JUNE 2011
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Reviewed Audited
R`000 Year ended Year ended
30 June 30 June
2011 2010
Revenue 316 200 295 580
Cost of sales (236 505) (216 795)
Gross profit 79 695 78 785
Net operating expenses (62 127) (66 092)
Operating profit 17 568 12 693
Impairment of goodwill - (44 034)
Interest received 28 1 257
Interest paid (3 492) (5 031)
Profit/(loss) before taxation 14 104 (35 115)
Taxation (4 187) (2 560)
Profit/(loss) attributable to the equity
holders of the parent 9 917 (37 675)
Other comprehensive income
Total comprehensive income/(loss)
attributable to equity holders of the parent 9 917 (37 675)
Weighted average shares in issue (`000) 203 182 203 182
Earnings/headline earnings per share (cents)
Earnings/(loss) per share 4.9 18.5
Headline earnings per share 6.8 3.1
Calculation of headline earnings
Attributable earnings/(loss) 9 917 (37 675)
Impairment of goodwill - 44 034
Loss on disposal of property, plant and
equipment (after taxation) 3 943 15
Headline earnings 13 860 6 374
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Reviewed Audited
R`000 30 June 30 June
2011 2010
ASSETS
Non-current assets 126 283 141 309
Property, plant and equipment 109 741 125 263
Goodwill 13 980 13 980
Investment in and loans to joint ventures 1 124 1 433
Deferred taxation 1 438 633
Current assets 70 546 64 492
Inventories 6 879 9 102
Trade and other receivables 62 422 53 902
Bank and call deposits 1 245 1 488
Non-current assets held for sale
Property, plant and equipment (scaffolding) 2 080 -
TOTAL ASSETS 198 909 205 801
EQUITY AND LIABILITIES
Capital and reserves 151 639 141 722
Non-current liabilities 1 879 9 295
Interest bearing liabilities 1 846 4 965
Deferred taxation 33 4 330
Current liabilities 45 391 54 784
Interest bearing liabilities 5 956 16 046
Bank overdrafts and invoice discounting 18 216 14 431
Trade and other payables 19 174 22 898
Taxation payable 2 045 1 409
TOTAL EQUITY AND LIABILITIES 198 909 205 801
Shares in issue (`000) 203 182 203 182
Net asset value per share (cents) 74.6 69.8
Net tangible asset value per share (cents) 67.8 62.9
CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed Audited
R`000 Year ended Year ended
30 June 30 June
2011 2010
Cash flows from operating activities 8 316 22 221
Cash generated by operations 20 432 37 428
Interest received 28 1 257
Interest paid (3 492) (5 031)
Taxation paid (8 652) (11 433)
Cash flows from investing activities (336) (12 617)
Investment in/disposal of operations 821 (866)
Investment in/disposal of property,
plant and equipment (1 157) (11 751)
Cash flows from financing activities
Movement in loans payable (12 008) (7 604)
(Decrease)/increase in cash resources (4 028) 2 000
Cash resources at beginning of year (12 943) (14 943)
Cash resources at end of year (16 971) (12 943)
Cash resources (16 971) (12 943)
Bank and call deposits 1 245 1 488
Bank overdraft and invoice discounting (18 216) (14 431)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Reviewed Audited
R`000 Year ended Year ended
30 June 30 June
2011 2010
Equity at beginning of year 141 722 179 397
Attributable profit/(loss) for the year 9 917 (37 675)
Equity at end of year 151 639 141 722
SEGMENT ANALYSIS
Reviewed Audited
R`000 Year ended Year ended
30 June 30 June
2011 2010
REVENUE
Scaffolding 56 943 82 873
Personnel outsourcing 247 524 202 276
Total revenue 252 475 206 695
Internal (4 951) (4 419)
Safety surveillance 11 733 10 431
Total Group 316 200 295 580
SEGMENT PROFIT FROM OPERATIONS
Operating profit/(loss) 17 568 12 693
Scaffolding (14 430) (6 066)
Personnel outsourcing 29 051 16 233
Safety surveillance 2 948 2 521
Head office (1) 5
Impairments
Scaffolding goodwill (44 034)
Net interest (paid)/received (3 464) (3 774)
Scaffolding (3 428) (5 885)
Personnel outsourcing 28 1 984
Safety surveillance (64) 125
Head office 2
Profit/(loss) before taxation 14 104 (35 115)
Scaffolding (17 858) (55 985)
Personnel outsourcing 29 079 18 217
Safety surveillance 2 884 2 646
Head office (1) 7
COMMENTARY ON THE GROUP`S RESULTS:
The Group results for the year ended 30 June 2011 reflect headline earnings per
share of 6.8 cents, this represents a 119% improvement from that reported for
the year ended 30 June 2010 of 3.1 cents. The continued recession that has been
experienced in the South African construction sector has adversely affected the
Scaffolding Division, necessitating a strategic realignment of the division. In
comparison, the Personnel Outsourcing division has experienced exceptional
results which have resulted in an overall increase in Group earnings.
During the current year, debtors balances that were considered irrecoverable in
the previous financial years were recovered to the extent of R1,3 million. The
directors of Top Fix have adopted a prudent approach, and in compliance with
International Financial Reporting Standards, have reassessed the recoverability
of the debtors balance and increased the remaining provisions against debtors
balances in dispute from R6,6 million to R10,6 million.
Net interest charges incurred in the current year were R3,5 million as compared
to R3,8 million in the prior year. Trade and other receivables increased from
R53 million at 30 June 2010 to R62 million at 30 June 2011, this increase being
attributed mainly to the increased activity levels in the Personnel Outsourcing
division. Significant reductions in the debtors balance have been achieved since
the financial year end as a result of an improved debtor`s collection strategy.
Despite the increased debtors balance, the Group achieved a net cash inflow from
operating activities of R8.3 million during the current year.
Scaffolding
In light of current economic conditions, the Scaffolding division experienced an
operating loss for the year of R14,4 million, (2010: loss of R6,1 million).
Included in the current year operating loss is a loss of R5,2 million incurred
on the sale (R1,3 million) and scrapping (R3,9 million) of scaffolding
equipment.
The Scaffolding division has made a strategic shift from concentrating mainly on
the building trade to diversifying the Group revenue stream and placing greater
emphasis on maintenance work and equipment hire. The Group expects that the
implementation of the strategic shift, as described above, will result in the
division returning to profitability during 2012.
Personnel Outsourcing
The Personnel Outsourcing division achieved an operating profit for the year of
R29,1 million, representing a 79% increase from the prior year. An extended
client base and major maintenance programs undertaken by the division`s largest
customers have resulted in Personnel Outsourcing achieving exceptional results,
despite the current economic difficulties. Contracts for international personnel
placements in Mozambique were secured during the year and further international
placements are actively being pursued.
Safety Surveillance
The Safety Surveillance division continues to perform well with an operating
profit of R2.9 million, representing an increase of 17% from the previous
financial year.
CHANGES IN DIRECTORS
Mr. PR Todd, Managing Director of the Scaffolding Division, has resigned and
responsibility for the Division was assumed by Mr. BW Marais. Messrs KG
Galesitoe, FW Swart and Ms KT Nondumo have also resigned as directors and MR N
de Waal and Ms N Sonjani have been appointed to the board of directors.
JOINT VENTURES AND DISPOSALS
In addition to the BEE joint ventures, the Group has commenced a further BEE
operation, `Career Jump`, in which the Group has a 40% holding. `Career Jump` is
an internet based recruitment data base and search engine.
Effective 1 January 2011, the Group disposed of its entire interest in property
holding company, Plenty Properties 115 (Pty) Ltd, to the 49% joint venture,
Umdeni Exploration (Pty) Ltd, at book value. Settlement of the consideration for
the disposal has been recognised on loan account, the terms of which are
interest free with no fixed terms of repayment.
RELATED PARTY TRANSACTIONS
An amount of R4 million (2010: R 12,5 million) is due to MBM Technical Services
(Pty) Ltd, a company controlled by director Mr. BW Marais. The loan bears
interest at the prevailing prime overdraft rate plus 1% and is repayable on
demand. R1,4 million in interest charges were raised against the loan during the
current financial year and MBM Technical Services (Pty) Ltd has given the
assurance that it will not withdraw this financing to the detriment of the
Group`s ability to meet its other financial obligations.
FUTURE PROSPECTS
The shortage of skilled artisans experienced in Sub-Saharan Africa leave the
Personnel Outsourcing division`s operations well placed to take advantage of
organic growth opportunities. The changes that have been implemented within the
Scaffolding Division, including stringent cost cutting measures, are expected to
return the Scaffolding division to profitability by 2012. The Safety
Surveillance division is expected to continue to operate well and contribute to
Group profitability. The acquisition of a 40% interest in BEE operation, `Career
Jump`, is expected to further contribute towards the profitability and growth of
the Group. The Group is focused on securing new contract business in all
divisions.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed consolidated provisional results for the twelve months ended 30
June 2011 ("annual reporting period") have been prepared in in accordance with
IAS 34: Interim Financial Reporting, as well as the AC 500 statements and
interpretations, on a historical cost basis and conform to International
Financial Reporting Standards ("IFRS").
The accounting policies adopted for the annual reporting period are consistent
with those applied in the financial statements for the Group for the period
ended 30 June 2010.
The annual reporting period announcement has been prepared in accordance with
the disclosure requirements of the JSE Limited Listings Requirements and the
Companies Act of South Africa.
The preparation of the financial statements has been supervised by Mr. JA
Barker, CA (SA).
CAPITAL COMMITMENTS AND CONTINGENCIES
The Group had no significant outstanding capital commitments or contingencies as
at 30 June 2011.
REVIEW OPINION
These results have been reviewed by Top Fix`s auditors, PKF (Jhb) Inc., and
their unqualified review opinion is available for inspection at Top Fix`s
registered office.
DIVIDEND DECLARATION
In line with current Group policy, no dividend has been declared for the year.
For and on behalf of the Board
BT Ngcuka (Chairman) BW Marais (Chief Executive)
Date: 30 September 2011
Directors
BT Ngcuka* (Chairman); BW Marais (CEO); JA Barker (Financial Director);
FF Goosen; JJ Senekal*#; N Sonjani*#; N de Waal* (* - non-executive)
(# - independent)
Secretary and Registered Office
MN Hattingh, 6 Topaz Street, Littleton Manor, Centurion 0157
Transfer Secretaries
Link Market Services South Africa (Pty) Ltd, 11 Diagonal Street,
Johannesburg 2000 (PO Box 4844, Johannesburg 2001)
Designated Advisor
QuestCo Sponsors (Pty) Limited
Website
www.topfix.co.za
Date: 03/10/2011 07:05:36 Produced by the JSE SENS Department.
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