| Tue 20 Mar 2012, 7:28 | | CSB - Cashbuild Limited - Audited group interim results and dividend declaration |
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CSB
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CSB - Cashbuild Limited - Audited group interim results and dividend declaration
December 2011
Cashbuild Limited
(Registration number: 1986/001503/06)
(Incorporated in the Republic of South Africa)
JSE Share Code: CSB ISIN: ZAE000028320
AUDITED GROUP INTERIM RESULTS AND DIVIDEND DECLARATION DECEMBER 2011
Revenue up 9% Operating profit up 80% Operating profit excl BEE up 25%
Headline earnings up 134% Headline earnings excl BEE up 24%
Net asset value per share up 22% Interim dividend up 89%
CONDENSED GROUP INCOME STATEMENT - AUDITED
Six months Year
ended ended
31 December 30 June
2011 2010 % 2011
R`000 (26 weeks) (26 weeks) change (52 weeks)
Revenue 3 252 822 2 986 823 9 5 667 494
Cost of sales (2 511 908) (2 322 104) 8 (4 393 705)
Gross profit 740 914 664 719 11 1 273 789
Share buy-back and distribution
to BEE participants - (51 269) (100) (51 269)
Selling and marketing expenses (451 951) (421 023) 7 (814 558)
Administrative expenses (78 041) (76 293) 2 (166 613)
Other operating expenses (2 761) (2 227) 24 (7 060)
Other income 992 2 149 (54) 4 985
Operating profit 209 153 116 056 80 239 274
Finance cost (117) (538) (78) (704)
Finance income 14 298 15 563 (8) 29 759
Profit before income tax 223 334 131 081 70 268 329
Income tax expense (70 660) (62 333) 13 (107 207)
Profit for the period 152 674 68 748 122 161 122
Attributable to:
Owners of the company 149 080 62 482 139 150 220
Non-controlling interests 3 594 6 266 (43) 10 902
152 674 68 748 122 161 122
Earnings per share (cents) 656.5 275.2 139 661.6
Diluted earnings per share (cents) 651.2 273.4 138 657.5
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME - AUDITED
Six months Year
ended ended
31 December 30 June
2011 2010 2011
R`000 (26 weeks) (26 weeks) (52 weeks)
Profit for the period 152 674 68 748 161 122
Other comprehensive income:
Foreign currency translation adjustments 3 823 (3 698) (3 200)
Other comprehensive income for the period,
net of tax 3 823 (3 698) (3 200)
Total comprehensive income for the period 156 497 65 050 157 922
Total comprehensive income attributable to:
Owners of the company 152 448 59 468 147 459
Non-controlling interests 4 009 5 582 10 463
156 497 65 050 157 922
ADDITIONAL INFORMATION - AUDITED
Six months Year
ended ended
31 December 30 June
2011 2010 2011
R`000 (26 weeks) (26 weeks) (52 weeks)
Net asset value per share (cents) 3 542 2 894 3 109
Ordinary shares (`000):
- In issue 25 190 25 190 25 190
- Weighted-average 22 707 22 707 22 707
- Diluted weighted-average 22 893 22 850 22 848
Capital expenditure 46 448 97 461 147 042
Depreciation of property, plant and equipment 29 576 26 561 55 207
Amortisation of intangible assets 462 357 707
Capital commitments 168 603 87 516 115 191
Property operating lease commitments 851 773 808 555 871 817
Contingent liabilities 34 557 30 303 97 743
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION - AUDITED
31 December 30 June
R`000 2011 2010 2011
ASSETS
Non-current assets 554 410 529 957 551 692
Property, plant and equipment 510 901 489 980 509 395
Intangible assets 34 005 30 497 31 711
Deferred income tax assets 9 504 9 480 10 586
Current assets 1 975 804 1 723 063 1 584 844
Assets held for sale 13 577 659 659
Inventories 861 834 842 736 788 701
Trade and other receivables 74 081 76 813 74 924
Cash and cash equivalents 1 026 312 802 855 720 560
Total assets 2 530 214 2 253 020 2 136 536
EQUITY AND LIABILITIES
Shareholders` equity 904 397 778 861 838 118
Share capital and reserves 892 299 728 939 783 255
Non-controlling interests 12 098 49 922 54 863
Non-current liabilities 85 184 76 218 80 196
Deferred operating lease liability 81 152 71 754 75 715
Deferred profit 1 673 1 725 1 699
Deferred income tax liability - 143 125
Borrowings (non interest bearing) 2 359 2 596 2 657
Current liabilities 1 540 633 1 397 941 1 218 222
Trade and other liabilities 1 495 329 1 388 163 1 179 761
Current income tax liabilities 43 095 7 765 36 336
Employee benefits 2 209 2 013 2 125
Total equity and liabilities 2 530 214 2 253 020 2 136 536
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY - AUDITED
R`000 Attributable to owners of the company
Share Cum. Non-
Treasury based trans- Control-
Share share Treasury pay- lation ling
capi- capi- Share share ment adjust- Retained inte- Total
tal tal premium premium reserve ment earnings rests equity
Balance at 1 July 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
Dividend paid
- - - - - - (28 834) (7 800) (36 634)
Share buy back and distribution to BEE participants
(6) 6 (49 994) 49 994 - - - - -
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
Total comprehensive income for the period
- - - - - 253 87 738 4 881 92 872
Dividend paid
- - - - - - (35 654) 60 (35 594)
Recognition of share based payments
- - - - 1 979 - - - 1 979
Balance at 30 June 2011
252 (23) 65 823 (33 692) 4 969 (14 402) 760 328 54 863 838 118
Total comprehensive income for the period
- - - - - 3 408 149 080 4 009 156 497
Acquisition of non-controlling interest in subsidiary
- - - - - - (15 437) (46 774) (62 211)
Dividend paid
- - - - - - (31 563) - (31 563)
Recognition of share based payments
- - - - 3 556 - - - 3 556
Balance at 31 December 2011
252 (23) 65 823 (33 692) 8 525 (10 994) 862 408 12 098 904 397
CONDENSED GROUP CASH FLOW STATEMENT - AUDITED
Six months Year
ended ended
31 December 30 June
2011 2010 2011
R`000 (26 weeks) (26 weeks) (52 weeks)
Cash flows from operating activities
Cash generated from operations 491 911 454 525 464 568
Interest paid (117) (538) (704)
Taxation paid (62 944) (74 365) (91 792)
Net cash generated from operating
activities 428 850 379 622 372 072
Cash flows from investing activities
Net investment in assets (46 005) (96 681) (146 622)
Interest received 14 298 15 563 29 759
Net cash used in investing activities (31 707) (81 118) (116 863)
Cash flows from financing activities
(Decrease)/increase in borrowings (298) 169 230
Dividends paid
- own equity (31 563) (28 834) (64 488)
- non-controlling interests - (7 800) (7 740)
Acquisition of non-controlling interest
in subsidiary (62 211) - -
Net cash used in financing activities (94 072) (36 465) (71 998)
Net increase in cash and cash equivalents 303 071 262 039 183 211
Effect of exchange rate movements on cash
and cash equivalents 2 681 (1 464) (4 931)
Cash and cash equivalents at beginning
of period 720 560 542 280 542 280
Cash and cash equivalents at end
of period 1 026 312 802 855 720 560
CONDENSED GROUP SEGMENTAL ANALYSIS - AUDITED
Six months Year
ended ended
31 December 30 June
R`000 2011 2010 2011
SOUTH AFRICA
Income statement
Revenue 2 834 633 2 566 826 4 882 594
Operating profit 177 831 94 079 194 025
Statement of financial position
Segment assets 2 052 645 1 876 151 1 731 567
Segment liabilities 1 373 690 1 278 059 1 091 717
Other segment items
Depreciation 26 962 24 045 49 721
Amortisation 462 357 707
Capital expenditure 39 596 82 080 125 342
OTHER MEMBERS OF COMMON MONETARY AREA*
Income statement
Revenue 277 589 271 192 505 390
Operating profit 18 482 17 221 33 039
Statement of financial position
Segment assets 325 496 234 436 280 092
Segment liabilities 180 334 115 021 149 582
Other segment items
Depreciation 1 529 1 590 3 537
Amortisation - - -
Capital expenditure 6 562 13 043 17 122
* Includes Namibia, Swaziland and Lesotho
BOTSWANA AND MALAWI
Income statement
Revenue 140 600 148 805 279 510
Operating profit 12 840 4 756 12 210
Statement of financial position
Segment assets 152 073 142 433 124 877
Segment liabilities 71 793 81 079 57 119
Other segment items
Depreciation 1 085 926 1 949
Amortisation - - -
Capital expenditure 290 2 338 4 578
GROUP
Income statement
Revenue 3 252 822 2 986 823 5 667 494
Operating profit 209 153 116 056 239 274
Statement of financial position
Segment assets 2 530 214 2 253 020 2 136 536
Segment liabilities 1 625 817 1 474 159 1 298 418
Other segment items
Depreciation 29 576 26 561 55 207
Amortisation 462 357 707
Capital expenditure 46 448 97 461 147 042
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 2011
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 (2008) and consistently applied to the prior period. The
financial statements have been prepared by the financial director, Mr AE Prowse
CA (SA) and were approved by the board on 19 March 2012.
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 (2011:
24 December (26 weeks); 2010: 25 December (26 weeks); June 2011: 25 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 2010: 22 706 987 shares; June 2011: 22 706 987 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 R149.3 million (December 2010: R63.7 million; June 2011: R151.8 million) and
a weighted average of 22 706 987 (December 2010: 22 706 987; June 2011: 22 706
987) and fully diluted of 22 892 962 (December 2010: 22 849 556; June 2011: 22
847 567) ordinary shares in issue.
Reconciliation between net profit attributable to the owners of the company and
headline earnings:
R`000 December December % June
2011 2010 change 2011
Net profit attributable to the
owners of the company 149 080 62 482 139 150 220
Loss on sale of assets after taxation 208 1 217 1 594
Headline earnings 149 288 63 699 134 151 814
Headline earnings per share (cents) 657.5 280.5 134 668.6
Diluted headline earnings per share (cents) 652.1 278.8 134 664.5
6. BEE transaction. In terms of a special resolution adopted by the shareholders
on 6 December 2010, shares to the value of R50 million were repurchased by the
company from the Cashbuild Empowerment Trust ("the Trust") in the prior
financial period.
The value realised by this transaction was distributed to the beneficiaries of
the Trust. The associated transactional costs, including the tax effects of the
transaction are also accounted for in the income statement. The financial
effects can be summarised as follows:
December December
2010 2010
December (Excl % (Incl %
R`000 2011 BEE) change BEE) change
Operating profit 209 153 167 325 25 116 056 80
Attributable earnings 149 080 118 751 26 62 482 139
Net asset value per share (cents) 3 542 3 117 14 2 894 22
Headline earnings per share (cents) 657.5 528.3 24 280.5 134
The financial highlights should be read in conjunction with this table.
7. Increase in shareholding in subsidiaries. During the period the Swaziland
Competition Commission approved the sale of share agreement between Cashbuild
Management Services Proprietary Limited ("CMS") and the Swaki Investment
Corporation Limited in terms of which CMS acquired the remaining 50%
shareholding in Cashbuild (Swaziland) Proprietary Ltd for R62 211 000. This
purchase resulted in a decrease in non-controlling interests of R46 774 656. The
remaining purchase price was allocated directly to equity.
8. Change in dividend policy. The board has changed the dividend policy to 2
times cover (previously 3 times cover on first half and 2.5 times on second
half)on both first and second half results.
9. Declaration of dividend. The board has declared an interim dividend (No. 38),
of 296 cents (December 2010: 157 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, 19/03/2012
Last day to trade "CUM" the dividend: Wednesday, 4/04/2012
Date commence trading "EX" the dividend: Thursday, 5/04/2012
Record date: Friday 13/04/2012
Date of payment: Monday 16/04/2012
Share certificates may not be dematerialised or rematerialised between Thursday,
5 April 2012 and Friday, 13 April 2012, both dates inclusive.
On behalf of the board
DONALD MASSON Werner de Jager
Chairman Chief Executive
Johannesburg 19 March 2012
COMMENTARY
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 ,191 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").
FINANCIAL HIGHLIGHTS - EXCLUDING BEE
Revenue for the half-year increased by 9% whilst operating profit increased by
25%, compared to the prior half year. This increase excludes the effects of the
BEE transaction implemented in the prior comparative period. (See table above
for reconciliation to statutory earnings). This profit was as a result of an
increase in gross profit of 11%, whilst operating expenses increased by 7%.
Basic earnings per share increased by 26% and headline earnings per share
increased by 24%. Net asset value per share has shown a 14% increase, from 3 117
cents (December 2010) to 3 542 cents. Cash and cash equivalents increased by 28%
to R1 026 million.
Stores in existence since the beginning of July 2010 (pre-existing stores - 185
stores) accounted for 8% of the increase in revenue with the remaining 1%
increase due to the six new stores the group has opened since July 2010. This
increase for the half-year has been achieved in tough trading conditions with
selling price inflation of 5%. Disappointing customer transaction growth (1%
growth was from the new stores with a decline of 1% from existing stores) is an
area of focus for management for the remainder of the year.
Despite the competitive environment, gross profit percentage margin increased to
22.8% during this half-year and was higher in percentage terms than the 22.3%
achieved for the comparative period of the prior year.
Operational expenses for the half-year remained well controlled with existing
stores accounting for 6% of the increase and new stores 1%. The main contributor
to the increase on existing stores is the people cost component in order to
maintain and improve customer service standards.
The effective tax rate for the period of 32% is 16% lower than that of the
previous half year, mainly due to the non-deductibility and related STC effect
of the BEE transaction in the prior comparative period.
Cashbuild`s statement of financial position remains solid. Stock levels have
increased by 2%. This increase is due mainly to the stocking of three additional
stores since the previous half year. Overall stockholding at 60 days (December
2010: 61 days) is as result of continued focus on slow moving stocks. Trade
receivables remain well under control.
During the period, Cashbuild opened one new store, four stores were refurbished
and two stores relocated. One store trading in an unsustainable market was
closed during the half year. Cashbuild will continue its store expansion,
relocation and refurbishment strategy in a controlled manner, applying the same
rigorous process as in the past.
Interim dividend declared has increased by 89% to 296 cents per share (2011: 157
cents) due to the change in dividend cover policy mentioned above, as well as
the 26% increase in attributable earnings.
PROSPECTS
Management remains positive about the top line trading prospects for the next
quarter. The first nine trading weeks since period-end have reported an increase
in revenue of 10% on that of the comparable nine weeks.
Directors: D Masson* (Chairman), WF de Jager (Chief executive), AGW Knock*, Dr
DSS Lushaba*, AE Prowse, NV Simamane*, SA Thoresson, A van Onselen.
(*non-executive)
Company secretary: Corporate Governance Leaders CC
Registered office: 101 Northern Parkway, Ormonde, Johannesburg 2091.
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: 20/03/2012 07:28:07 Produced by the JSE SENS Department.
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