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TFX
TFX
TFX - Top fix - Unaudited Interim Results for the six months ended 31 December
2011
TOP FIX HOLDINGS LIMITED ,
(Registration number 2006/011359/06)
JSE code: TFX ISIN: ZAE000088423
(Top fix or "the Company" or "the Group")
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months ended 31 December Year ended
R`000 2011 2010 30 June
2011
Unaudited Unaudited Audited
Revenue 172 534 178 048 315
651
Cost of sales (138 (116 (235
967) 584) 956)
Gross profit 33 567 61 464 79
695
Net operating expenses (36 (44 (62
533) 160) 127)
Operating profit (2 17 304 17
before impairments 966) 568
Impairment of (78
scaffolding equipment 922) - -
Operating profit (81 17 304 17
before impairments 888) 568
Interest received
650 63 9
Interest paid (1 (1 (3
611) 967) 473)
Profit/(loss) before (82 15 400 14
taxation 849) 104
Taxation (4 (4 (4
344) 344) 187)
Profit/(loss)
attributable to the
equity holders
of the parent (87 11 056 9
193) 917
Other comprehensive
income - - -
Total comprehensive
(loss)/income
attributable to
the equity holders of (87 11 056 9
the parent 193) 917
Weighted average 203 182 203 182 203
shares in issue (`000) 182
Calculation of headline earnings
Attributable (87 11 056 9
(loss)/earnings 193) 917
Impairment loss 78 922
- -
Loss/(profit) on sale
of property,plant and
equipment (after 3
taxation) - 17 943
Headline (8 11 073 13
(loss)/earnings 271) 860
Earnings /diluted earnings per share (cents)
(Loss)/earnings per
share (42.9) 5.4 4.9
Headline
earnings/(loss) per (4.1) 5.4 6.8
share
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
6 months ended 31 December Year ended
R`000 2011 2010 30 June
2011
Unaudited Unaudited Audited
ASSETS
Non-current assets 44 913 139 239 126
283
Property, plant and 27 458 124 269 109
equipment 741
Goodwill 13 980 13 980 13
980
Investment in joint 1 870 1
ventures 128 124
Deferred taxation 1 605 1
862 438
Current assets 71 481 70 136 70
846
Inventories 4 289 8 7
826 179
Trade and other 66 907 61 076 62
receivables 422
Bank and call deposits 1
285 234 245
Non-current assets 1
held for sale - - 780
TOTAL ASSETS 116 394 209 375 198
909
EQUITY AND LIABILITIES
Capital and reserves 64 446 152 778 151
639
Non-current 1 864 8 1
liabilities 702 879
Interest bearing 1 517 3 1
liabilities 215 846
Deferred taxation 347 5 487
33
Current liabilities 50 084 47 895 45
391
Interest bearing 2 874 12 694 5
liabilities 956
Advances from joint
ventures - 908 -
Bank overdrafts and 23 929 13 358 18
invoice discounting 216
Trade and other 22 067 18 365 19
payables 174
Taxation payable 1 214 2 2
570 045
TOTAL EQUITY AND 116 394 209 375 198
LIABILITIES 909
Shares in issue (`000) 203 182 203 182 203
182
Net asset value per
share (cents) 31.7 75.2 74.6
Net tangible asset
value per share 24.8 68.3 67.8
(cents)
CONSOLIDATED STATEMENT OF CASH FLOWS
6 months ended 31 December Year ended
R`000 2011 2010 30 June
2011
Unaudited Unaudited Audited
Cash flow from (3 132) 4 991 9 812
operations
Cash generated by 2 857 9 150 21 929
operations
Interest received 650 63 9
Interest paid (1 611) (1 967) (3 473)
Taxation paid (5 028) (2 255) (8 653)
Cash flow from (130) (70) (1 832)
investing activities
Increase)/decrease in (747) 2 213 821
advances to joint
ventures
Net (proceeds on
disposal
of)/investment in
property,
plant and equipment 617 (2 283) (2 653)
Cash flow from
financing activities
Movement in loans (3 411) (5 102) (12 008)
payable
Decrease)/increase (6 673) (181) (4 028)
cash resources
Cash resources at (16 971) (12 943) (12 943)
beginning of period
Cash resources at end (23 644) (13 124) (16 971)
of period
Cash resources (23 644) (13 124) (16 971)
Bank and call deposits 285 234 1 245
Bank overdraft and (23 929) (13 358) (18 216)
invoice discounting
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
6 months ended 31 December Year ended
R`000 2011 2010 30 June
2011
Unaudited Unaudited Audited
Equity at beginning of 151 639 141 722 141
period 722
Total comprehensive (87 193) 11 056 9
income for the period 917
Equity at end of 64 446 152 778 151
period 639
SEGMENT REPORTING
6 months ended 31 December Year ended
R`000 2011 2010 30 June
2011
Unaudited Unaudited Audited
Revenue
Personnel outsourcing 158 943 138 393 246
975
Total revenue 161 338 141 020 252
475
Internal (2 395) (2 (5
627) 500)
Safety surveillance 6 262 6 11
710 733
Scaffolding 7 329 32 945 56
943
Total Group 172 534 178 048 315
651
Segment profit/(loss) from operations
Operating (2 966) 17 304 17
profit/(loss) before 568
impairments
Personnel outsourcing 13 543 16 520 29
051
Safety surveillance 2 062 2 2
160 948
Scaffolding (18 571) (1 (14
382) 430)
Head office -
6 (1)
Impairments
Scaffolding (78 922)
- -
Net interest (1 (3
(paid)/received (961) 904) 464)
Personnel outsourcing
(39) (31) 28
Safety surveillance (29) (64)
92
Scaffolding (893) (1 (3
966) 428)
Head office -
1 -
Profit/(loss) before (82 849) 15 400 14
taxation 104
Personnel outsourcing 13 504 16 489 29
079
Safety surveillance 2 033 2 2
252 884
Scaffolding (98 386) (3 (17
348) 858)
Head office -
7 (1)
CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2011
COMMENTARY ON THE GROUP`S RESULTS:
Further to the SENS announcement of 23 March 2012, Group results for the six
months ended 31 December 2011 reflect a headline loss per share of 4.1 cents,
compared to headline earnings per share of 5,4 cents achieved for the
comparative period to 31 December 2010. The continued recession in the South
African construction sector has once again adversely affected the Scaffolding
Division, resulting in a headline loss for the division of R19,4 million, after
debtors provisions detailed below.
In addition, in the light of the continued poor performance of the Scaffolding
operation, an impairment of R78,9 million was raised against the division`s
property, plant and equipment (predominantly access scaffolding). This resulted
in an attributable loss for the period to 31 December 2012 of R87,2 million
(42,9 cents per share)
The impairment loss, on 8300 tons of access scaffolding, has been calculated
using the following key assumptions relating to "fair value less costs to sell"
(significant management estimate that could differ materially from actual
results in future reporting period)
- 60% sold as access scaffolding after refurbishment costs of R 1000 per ton
- 40% sold as scrap at R 1500 per ton.
Subsequent to 31 December 2011 a sale agreement has been reached for the
division (see Acquisitions and Disposals).
The directors of Top Fix have reassessed the recoverability of the debtors
balance and increased the remaining provisions against debtors balances in
dispute in the Scaffolding division from R10,6 million to R16,2 million.
Net interest charges incurred in the current year were R1 million as compared to
R1,9 million in the comparative period. Trade and other receivables increased
from R62 million at 30 June 2011 to R67 million at 31 December 2011, the
increase arising in the Personnel Outsourcing division. Despite the increased
debtors balance, the Group achieved net cash generated by operations of R2,8
million for the six months to 31 December 2012.
Scaffolding
The Scaffolding Division reported an operating loss, before impairments of R18,6
million (see above for details of impairments and attributable losses of the
Division). Subsequent to 31 December 2011 a sale of the operation has been
proposed (see Acquisitions and Disposals).
Personnel Outsourcing
The Personnel Outsourcing division achieved an operating profit for the period
of R13,5 million, representing a decline of 18% on those achieved for the six
months ended 31 December 2011. Major maintenance programs undertaken by the
division`s largest customers in the comparative period, not repeated on the
same scale in the current period, as well as pressurized trading margins
contributed towards the earnings decline. Contracts for international personnel
placements in Mozambique continue and further international placements are
actively being pursued.
Safety Surveillance
The Safety Surveillance division continues to perform well with an operating
profit of R2.1 million, in line with that achieved for the six months ended 31
December 2010.
ACQUISITIONS AND DISPOSALS
Subsequent to 31 December 2011 an agreement has been entered whereby Mr BW
Marais will acquire the entire issued share capital and Group loan accounts
against the Scaffolding Division (Top Fix Scaffolding (Pty) Ltd and MBM
Administration and Labour Brokers (Pty) Ltd) in exchange for 48 million Top Fix
Holdings shares (to be cancelled) and a cash consideration of R5 million. As the
disposal constitutes a disposal of the major part of the Group`s assets, it will
be subject to shareholder approval by special resolution. Refer to the SENS
announcement of 14 February 2012 for full details of the proposed transaction.
In addition to impairment losses recognised in the current reporting period, a
loss on the disposal of the Scaffolding Division is expected if the offer is
accepted by shareholders.
In addition the Group acquired a 51% stake in Talent Sourcing Consultancy in
July 2011 for a consideration of R1,4 million. The effect of the acquisition on
Group results is not material.
CHANGES IN DIRECTORS
Messrs. BW Marais and JA Barker resigned on 14 February 2012 and 27 February
2012 respectively to continue with the disposed Scaffolding operation. Mr
Marias` position of Group Chief Executive has been assumed by executive
director, Mr FF Goosen ans Ms SL Kemp (formerly Group Financial Manager) has
assumed Mr Barker`s position as Group Financial Director.
RELATED PARTY TRANSACTIONS
An amount of R3,3 million is due by the Scaffolding Division to MBM Technical
Services (Pty) Ltd, a company controlled by Mr. BW Marais. The loan bears
interest at the prevailing prime overdraft rate plus 1% and is repayable on
demand. R0,3 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.
In addition, as detailed above, a sale of the Scaffolding Division to Mr Marais
has been proposed subsequent to 31 December 2011.
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 Safety Surveillance division is expected to
continue to operate well and contribute to Group profitability. 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 six months ended 31
December 2011 ("reporting period") have been prepared in accordance with IAS 34:
Interim Financial Reporting, as well as the AC 500 series of interpretations, on
a historical cost basis and conform to International Financial Reporting
Standards ("IFRS").
The accounting policies adopted for the reporting period are consistent with
those applied in the financial statements for the Group for the year ended 30
June 2011.
The 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.
These results have not been audited or reviewed by the groups auditors
The preparation of the financial statements has been supervised by Ms. SL Kemp,
CA (SA).
CAPITAL COMMITMENTS AND CONTINGENCIES
The Group had no significant outstanding capital commitments or contingencies as
at 30 June 2011.
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) FF Goosen (Chief Executive)
Date: 30 March 2012
Directors:
BT Ngcuka* (Chairman); FF Goosen (CEO); SL Kemp (Financial Director); JJ
Senekal*#; NN 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:
Sasfin Capital, a division of Sasfin Bank Ltd
Website:
www.topfix.co.za
Date: 30/03/2012 16:55:03 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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