| Thu 22 Mar 2012, 9:00 | | EXL - Excellerate Holdings Limited - Unaudited consolidated results for the |
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EXL
EXL
EXL - Excellerate Holdings Limited - Unaudited consolidated results for the
six months ended 31 December 2011
EXCELLERATE HOLDINGS LIMITED
Registration number 1997/009884/06
JSE code: EXL ISIN: ZAE000026092
(Incorporated in the Republic of South Africa)
("Excellerate" or "the Group")
Unaudited consolidated results
for the six months ended 31 December 2011
HIGHLIGHTS
- Revenue growth of 38,1%
- Attributable profit up by 25,8%
- Earnings per share up by 24,5%
- Cash generated from operations up by 51,1%
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
for the period
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 December 31 December 30 June
2011 2010 2011
R`000 R`000 R`000
Continuing operations
Revenue 526 234 381 173 792 052
Gross profit 154 678 108 740 250 516
Profit before net finance costs and 48 722 43 066 73 633
taxation
Net finance costs (5 451) (8 045) (14 953)
Profit before taxation 43 271 35 021 58 680
Taxation (13 326) (10 334) (16 540)
Profit for the period from 29 945 24 687 42 140
continuing operations
Discontinued operations
1 593 1 056 (1 560)
Profit for the period after - 2 348 1 969
taxation
Profit/(loss) on sale of businesses 1 593 (1 292) (3 529)
after taxation
Profit for the period 31 538 25 743 40 580
Other comprehensive income:
Foreign currency translation 211 - (23)
reserve
Total comprehensive income for the 31 749 25 743 40 557
period
Profit attributable to:
Equity holders of the parent 26 760 21 268 34 240
Non-controlling interest 4 778 4 475 6 340
31 538 25 743 40 580
Total comprehensive income for the
period attributable to:
Equity holders of the parent 26 971 21 268 34 217
Non-controlling interest 4 778 4 475 6 340
31 749 25 743 40 557
Shares in issue (`000) 222 066 218 350 218 706
Weighted average number of shares 219 504 217 915 218 203
in issue (`000)
Fully diluted weighted average 222 154 221 553 221 997
number of shares in issue (`000)
Earnings per share (cents) 12,2 9,8 15,7
Headline earnings per share (cents) 11,4 10,3 17,3
Diluted earnings per share (cents) 12,1 9,6 15,4
Diluted headline earnings per share 11,3 10,1 17,0
(cents)
Reconciliation between income
attributable to equity holders of
the parent and the headline
earnings attributable to the equity
holders of the parent:
Attributable to ordinary 26 760 21 268 34 240
shareholders
- (Profit)/loss on disposal of (1 853) 1 500 4 175
businesses
- net (gain)/loss on sale of (128) 8 53
property, plant and equipment
- taxation effect of the 295 (422) (660)
adjustments
Headline earnings 25 074 22 354 37 808
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
at
Unaudited Unaudited Audited
31 December 31 December 30 June
2011 2010 2011
R`000 R`000 R`000
ASSETS
Non-current assets 344 774 315 133 346 284
Property, plant and equipment 87 046 78 125 82 103
Goodwill 203 571 205 381 203 890
Intangible assets 20 848 21 784 21 398
Investment in associate 232 631 232
Interest-bearing receivables 1 946 1 906 3 761
Vendor loans for sale of businesses 29 786 - 29 041
Deferred taxation 1 345 7 306 5 859
Current assets 331 809 354 020 290 408
Inventories 52 206 100 462 50 667
Trade and other receivables 191 472 188 988 143 428
Current portion of interest-bearing 5 722 5 044 4 660
receivables
Investment in associate - 5 435 -
Assets held for sale - - 15 536
Vendor loans for sale of businesses 13 454 - 37 163
Amounts owing by joint venture 9 724 10 247 7 436
partners
Taxation receivable 8 357 7 539 6 560
Other financial assets 308 56 -
Cash and cash equivalents 50 566 36 249 24 958
Total assets 676 583 669 153 636 692
EQUITY AND LIABILITIES
Equity and reserves 285 036 266 215 258 615
Share capital 2 246 2 184 2 188
Share premium 67 144 65 169 64 950
Share-based payment reserve 507 1 454 1 298
Foreign currency translation 188 - (23)
reserve
Retained earnings 203 063 171 267 184 395
Equity attributable to equity 273 148 240 074 252 808
holders of the parent
Non-controlling interest 11 888 26 141 5 807
Non-current liabilities 113 037 132 694 123 469
Interest-bearing debt 103 555 125 120 115 182
Deferred taxation 9 482 7 574 8 287
Current liabilities 278 510 270 244 254 608
Trade and other payables 220 928 217 089 194 534
Amounts owing to joint venture 14 845 13 681 10 098
partners
Taxation payable 6 197 8 757 3 900
Current portion of interest-bearing 35 896 22 668 40 273
debt
Other financial liabilities - - 70
Shareholders for dividends 260 147 147
Bank overdrafts 384 - -
Vendors for acquisitions - 7 902 5 586
Total equity and liabilities 676 583 669 153 636 692
Net asset value per share (cents) 123,0 109,9 115,6
Net tangible asset value per share 21,9 8,0 12,6
(cents)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
for the period
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 December 31 December 30 June
2011 2010 2011
R`000 R`000 R`000
Cash flows from operating 12 501 (3 984) 38 745
activities
Cash generated from operations 34 794 23 028 81 076
Net finance costs (5 451) (8 078) (14 795)
Dividends paid (8 770) - (652)
Taxation paid (8 072) (18 934) (26 884)
Cash flows from investing 26 476 (100 538) (144 260)
activities
Net additions to property, plant (12 661) (9 322) (23 390)
and equipment
Net additions to intangible assets (131) (140) (4 520)
Movement in vendor loans for (5 563) (91 086) (97 300)
acquisition of businesses
Cash flow on disposal of businesses 25 477 (378) 374
Increase/(decrease) in interest- 2 323 (327) (4 168)
bearing receivables
Movement in loans between joint 1 834 715 (59)
venture partners
Movement in loan to associate 15 197 - (15 197)
company
Cash flows from financing (13 753) 109 583 99 285
activities
Net interest-bearing debt (16 005) 109 348 99 265
(repaid)/raised
Sale of treasury shares 2 252 235 20
Increase/(decrease) in cash and 25 224 5 061 (6 230)
cash equivalents
Cash and cash equivalents at 24 958 31 188 31 188
beginning of period
Cash and cash equivalents at end of 50 182 36 249 24 958
period
SEGMENTAL REPORT
Property Procurement Corporate Total
R`000 R`000 R`000 R`000
December 2011
Total revenue per 267 746 288 101 4 886 560 733
reportable segment
Elimination of Inter- - (29 642) (4 857) (34 499)
Group sales
267 746 258 459 29 526 234
Discontinued operation - - - -
267 746 258 459 29 526 234
Profit before taxation 26 063 26 617 (9 409) 43 271
Discontinued operation - 1 853 - 1 853
26 063 28 470 (9 409) 45 124
December 2010
Total revenue per 178 108 328 029 4 552 510 689
reportable segment
Elimination of Inter- (1 832) (21 142) (3 985) (26 959)
Group sales
176 276 306 887 567 483 730
Discontinued operation - (102 557) - (102 557)
176 276 204 330 567 381 173
Profit before taxation 27 042 19 009 (11 030) 35 021
Discontinued operation (2 664) 3 812 - 1 148
24 378 22 821 (11 030) 36 169
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share- Foreign
based currency
Share Share payment translation
capital premium reserve reserve
R`000 R`000 R`000 R`000
Balance at 30 June 2010 2 179 64 939 1 602 -
Total comprehensive
income for the period
Profit for the period - - - -
Transactions with owners,
recorded directly into
equity
Sale of treasury shares 5 230 - -
Arising on acquisition of - - - -
business
Movement in share-based - - (148) -
payment reserve
Balance at 31 December 2 184 65 169 1 454 -
2010
Total comprehensive - - - (23)
income for the period
Profit for the period - - - -
Foreign currency - - - (23)
translation reserve
Transactions with owners,
recorded directly into
equity
Sale of treasury shares 4 (219) - -
Conversion of share - - - -
premium into loan
Non-controlling interest - - - -
sold
Movement in share-based - - (156) -
payment reserve
Balance at 30 June 2011 2 188 64 950 1 298 (23)
Total comprehensive - - - 211
income for the period
Profit for the period - - - -
Foreign currency - - - 211
translation reserve
Transactions with owners,
recorded directly into
equity
Arising on acquisition of - - - -
business
Movement in share-based - - (791) -
payment reserve
Dividends paid - - - -
Sale of treasury shares 58 2 194 - -
Balance at 31 December 2 246 67 144 507 188
2011
Attributable
to equity Non-
Retained holders controlling
earnings of parent interest Total
R`000 R`000 R`000 R`000
Balance at 30 June 2010 149 851 218 571 779 219 350
Total comprehensive
income for the period
Profit for the period 21 268 21 268 4 475 25 743
Transactions with owners,
recorded directly into
equity
Sale of treasury shares - 235 - 235
Arising on acquisition of - - 20 887 20 887
business
Movement in share-based 148 - - -
payment reserve
Balance at 31 December 171 267 240 074 26 141 266 215
2010
Total comprehensive 12 972 12 949 1 865 14 814
income for the period
Profit for the period 12 972 12 972 1 865 14 837
Foreign currency - (23) - (23)
translation reserve
Transactions with owners,
recorded directly into
equity
Sale of treasury shares - (215) - (215)
Conversion of share - - (20 627) (20 627)
premium into loan
Non-controlling interest - - (1 572) (1 572)
sold
Movement in share-based 156 - - -
payment reserve
Balance at 30 June 2011 184 395 252 808 5 807 258 615
Total comprehensive 26 760 26 971 4 778 31 749
income for the period
Profit for the period 26 760 26 760 4 778 31 538
Foreign currency - 211 - 211
translation reserve
Transactions with owners,
recorded directly into
equity
Arising on acquisition of - 1 303 1 303
business
Movement in share-based 791 - - -
payment reserve
Dividends paid (8 883) (8 883) - (8 883)
Sale of treasury shares - 2 252 - 2 252
Balance at 31 December 203 063 273 148 11 888 285 036
2011
GENERAL OVERVIEW
The Board of Directors ("the Board") of Excellerate is pleased to again
report an improved performance by the Group during the six months ended 31
December 2011, with significant increases in revenue and profitability,
together with strong cash flow management. The improvement in profitability
is derived principally from improved performance within our Procurement and
Logistics Segment, together with lower Group net finance costs. The
underlying performance within our Property Services Segment was slightly
depressed as a result of delays of some commission revenues, which should be
recovered in the second half of the financial year, together with the impact
of some restructuring costs.
With effect from 30 June 2011, and in accordance with our stated strategy,
the Group disposed of its entire interest in its general merchandise and
trading businesses being conducted under the names "Goldenmarc",
"Hypertrade" and "Louis Smiedt". In addition, with effect from 1 July 2011,
the Group disposed of its entire interest in its commodity trading business,
Excellerate Commodities Trading (Pty) Limited. Accordingly, the operations,
and the disposal transactions in relation to these businesses, have been
accounted for in the discontinued operations section of the Statement of
Comprehensive Income for both the current and comparative financial periods.
During the period, management has continued to drive growth plans around
outsourced services with a focus on property-related services, as well as
procurement and logistics services.
Excellerate remains both operationally and financially sound and, provided
that trading conditions remain favourable, the Group is well-placed to
continue to improve comparative performance in the second half of the
financial year. This information has not been reviewed or reported on by the
company`s auditors.
FINANCIAL OVERVIEW
Key features of the Group`s financial performance for the six-month period
ended 31 December 2011 include:
- Group revenue for the period increased by 38,1% to R526,2 million (2010:
R381,2 million).
- Profit from continuing operations before finance costs and taxation rose
by 13,0% to R48,7 million (2010: R43,1 million).
- Despite increased finance costs associated primarily with acquisition and
expansion activities, interest cover in respect of continuing operations has
significantly improved, and is at a comfortable level of 8,9 times (2010:
5,4 times).
- Profit attributable to ordinary shareholders was up 25,8% to R26,8 million
(2010: R21,3 million).
- Cash generated from operations increased by 51,3% to R34,8 million (2010:
R23,0 million), once again highlighting the cash generative ability of the
Group.
- Cash and cash equivalents at the end of the period amounted to R50,2
million (June 2011: R25,0 million).
- Interest-bearing debt, together with vendors for acquisitions, at the end
of the period amounted to R139,5 million (June 2011: R161,0 million).
- Earnings per share and diluted earnings per share increased by 24,5% to
12,2 cents (2010: 9,8 cents) and by 26,0% to 12,1 cents (2010: 9,6 cents),
respectively.
- Headline earnings per share and diluted headline earnings per share
increased by 10,7% to 11,4 cents (2010: 10,3 cents) and by 11,9% to 11,3
cents (2010: 10,1 cents), respectively.
During the period under review, cash flows generated by operating activities
improved to R34,8 million (2010: R23,0 million). Net cash finance costs
decreased to R5,5 million (2010: R8,1 million), largely as a result of lower
interest-bearing debt, together with interest earned in respect of balances
due on vendor loans for sale of businesses. Cash tax paid decreased to R8,1
million (2010: R18,9 million). Dividends paid during the period amounted to
R8,8 million (2010: nil), resulting in total cash flow generation from
operating activities for the period of R12,5 million (2010: consumption of
R4,0 million).
Cash flows generated from investing activities amounted to R26,5 million
(2010: investment of R100,5 million). Net cash utilised in financing
activities for the period amounted to R13,8 million (2010: cash raised
R109,6 million). Total net cash generated for the period therefore amounted
to R25,2 million (2010: R5,1 million).
REVIEW OF OPERATIONS
Property Services Segment
Revenue in the Property Services Segment grew by 51,9% to R267,8 million
(2010: R176,3 million). This growth was largely due to the inclusion of JHI
revenue for six months (2010: three months), combined with organic growth
from most of the other business units withinthis segment.
Profitability before taxation from continuing operations in this segment
decreased by 3,6% to R26,1 million (2010: R27,0 million). The primary reason
for this is that, while JHI contributes significant turnover in the first
quarter of the financial year, the contribution to profitability is limited
during this period due to the inherent timing of cost structure increases,
as well as cyclical billings. Consequently, the substantial addition of JHI
turnover in the first three months of the financial year resulted in a
minimal increase in profitability. JHI did, however, deliver profitability
in line with expectations for the six-month period ended 31 December 2011.
Also impacting the performance of this segment was restructuring costs
within Levingers and Sterikleen, with the former experiencing declining
volumes, and the latter being repositioned for sustainable growth into the
future.
Interpark and Chattels both delivered good revenue growth and conversion to
profitability.
Procurement and Logistics Segment
Revenue in the Procurement and Logistics Segment grew by 26,5% to R258,5
million (2010: R204,3 million), with each of the business units contributing
good growth.
Profitability before taxation from continuing operations in this segment
increased by 40,0% to R26,6 million (2010: R19,0 million), indicating the
ability of the operational overhead structures to absorb revenue growth.
In line with previous reporting, the expected improvements in the financial
performance of Staffing Logistics were achieved. Management will continue to
monitor the proposed changes to relevant legislation closely and will adapt
the business model accordingly should any significant changes occur.
ACQUISITIONS AND DISPOSALS
On 1 July 2011, the Group acquired an additional share in Nu-Africa Comm
Trading (Pty) Limited, which is now accounted for as a subsidiary. This
acquisition is not material to the Group. Other than the previously
mentioned disposals of the Group`s general merchandise and trading
businesses, as well as its commodity trading business, no material
acquisitions or disposals were undertaken during the period under review.
PROSPECTS
While some concerns have been raised regarding the delayed recovery of the
property sector in South Africa, management expects a solid performance from
the Property Services Segment in the months ahead. In addition, the Group
will look to entrench the gains made in the Procurement and Logistics
Segment.
Going forward, management will continue to emphasise organic earnings
growth, and the conversion thereof to enhanced profitability. In addition,
given the available gearing capacity, management will seek strategic, value-
enhancing acquisitions, while assessing the compatibility of the Group`s
existing assets with its strategic objectives.
REPORTING ENTITY
Excellerate is a company domiciled in South Africa. The condensed
consolidated interim financial statements as at and for the period ended 31
December 2011 comprise Excellerate, its subsidiaries, joint ventures and
interests in associates.
BASIS OF PREPARATION
These condensed consolidated interim financial statements for the six months
ended 31 December 2011 have been prepared in accordance with the framework
concepts and the measurement and recognition requirements of International
Financial Reporting Standards (IFRS), the AC 500 standards as issued by the
Accounting Practices Board or its successor, and in the manner required by
the Companies Act and complies with the disclosure requirements of IAS 34:
Interim Financial Reporting. The condensed consolidated interim financial
statements have been prepared under the historical cost convention.
The accounting policies used in the preparation of these results are in
accordance withIFRS and are consistent in all material respects with those
used in the audited annual financial statements for the year ended 30 June
2011.
The condensed consolidated interim financial statements are presented in
Rand rounded to the nearest thousand (`000).
The condensed consolidated statement of financial position at 31 December
2011 and the related condensed statement of comprehensive income, statement
of changes in equity and cash flow for the six months then ended have not
been reviewed or reported on by the Group`s auditors.
SUBSEQUENT EVENTS
There have been no significant subsequent events that have had a material
impact on the interim financial statements.
RECLASSIFICATION OF COMPARATIVE INFORMATION
As reported in the June 2011 Annual Report, the classifications of the
business units have been restructured in line with the implementation of its
stated strategy. Comparatives for the Segmental report have been
reclassified along with the reclassification of the business units.
DIVIDEND
As is consistent with the Group`s policies regarding the payment of interim
dividends, the Board has decided not to declare a dividend at this time.
PREPARER OF FINANCIAL STATEMENTS
These condensed consolidated financial statements have been prepared by Mr G
Nash CA(SA), under the supervision of Mr JE Wellsted CA(SA).
For and on behalf of the Board
GG Hulley NT Christodoulou
Chief Executive Officer Chairman
Sandton
22 March 2012
DIRECTORS
Gordon Hulley Chief Executive Officer
Athol Stewart Executive Director
James Wellsted Group Financial Director
Rudi Stumpf Non-Executive Director
Clive Howell Non-Executive Director (alternate to Graham Davel)
Graham Davel Non-Executive Director
Michael Mohohlo Non-Executive Director
Arnold Meyer Non-Executive Director
Nick Christodoulou Non-Executive Director (Chairman)
SHARE TRANSFER SECRETARY
Computershare Investor Services Proprietary Limited
70 Marshall Street
Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Tel: (+27 11) 370 5000
Fax: (+27 11) 688 7721
COMPANY SECRETARY
ER Goodman Secretarial Services CC
(represented by E Goodman)
2nd Floor, Palm Grove, Grove City
196 Louis Botha Avenue
Houghton, 2198
Tel: (+27 11) 728 0742
Fax: (+27 11) 728 4226
email: ergoodmn@netactive.co.za
REGISTERED OFFICE
1st Floor
Atholl Square
Corner Katherine Street and Wierda Road East
Sandown, 2196
PO Box 785448, Sandton, 2146
Tel: (+27 11) 523 2980
Fax: (+27 11) 523 2990
email: info@excellerate.co.za
SPONSOR
One Capital
17 Fricker Road
Illovo, 2196
PO Box 784573, Sandton, 2146
Tel: (+27 11) 550 5000
Fax: (+27 86) 538 4299
email: info@onecapital.co.za
Website: www.excellerate.co.za
Date: 22/03/2012 09:00:03 Produced by the JSE SENS Department.
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