| Mon 14 May 2012, 7:15 | | RBX - Raubex Group Limited - Audited results for the year ended 29 February |
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RBX
RBX
RBX - Raubex Group Limited - Audited results for the year ended 29 February
2012
Raubex Group Limited
(Incorporated in the Republic of South Africa)
Registration number 2006/023666/06
Share Code: RBX ISIN Code: ZAE000093183
("Raubex" or the "Group")
AUDITED RESULTS
for the year ended 29 February 2012
Salient features
- Revenues up 10,7% to R5,03 billion (2011: R4,55 billion)
- Operating profit down 19,8% to R531,5 million (2011: R662,6 million)
- Group operating profit margin of 10,6% (2011: 14,6%)
- HEPS down 26,2% to 177,2 cents per share (2011: 240,2 cents per share)
- Cash flow from operations down 22,3% to R663,2 million (2011: R853,0
million)
- Capex spend of R286,6 million (2011: R292,5 million)
- Order book of R4,6 billion (2011: R4,4 billion)
- Final dividend of 35 cents per share declared
Francois Diedrechsen, Financial and Commercial Director of Raubex Group,
said: "As anticipated, the operating environment remained challenging and
marked by an extremely competitive marketplace.
"The good performance from the mining and material handling operations of the
group, especially outside of South Africa, supported overall revenue growth
and stability in the order book. Although the bitumen supply problems and
delays on certain provincial work were adequately addressed during the second
half of the year, these issues compounded the decrease in operating profit
and cash flows.
"Whilst the volume of road construction work remains encouraging, we are
monitoring the impact of the issues surrounding SANRAL closely and have
placed renewed emphasis on growing our portfolio of typically higher margin
African projects, across all three divisions.
"We remain optimistic that the group`s strong financial base and profitable
order book will result in stable operational and financial conditions in the
year ahead."
14 May 2012
ENQUIRIES
Raubex Group +27 (0) 12 665 3226
Francois Diedrechsen
College Hill +27 (0) 11 447 3030
Frederic Cornet +27 (0) 83 307 8286
Lexi Ball +27 (0) 82 815 1821
Commentary
FINANCIAL OVERVIEW
Revenue increased 10,7% to R5,03 billion and operating profit decreased 19,8%
to R531,5 million from the corresponding prior period.
Profit before tax decreased 20% to R519,4 million.
The effective tax rate increased to 34,3% from 31,1% in the corresponding
prior period due to the reversal of a previously recognised deferred tax
asset arising from the group`s share incentive scheme.
Earnings per share decreased 25,7% to 179,5 cents with headline earnings per
share decreasing 26,2% to 177,2 cents.
Group operating profit margin decreased to 10,6% (2011: 14,6%).
The group generated operating cash flows of R663,2 million before finance
charges, dividends received and taxation.
Trade and other receivables increased by 22,8% to R1,16 billion as a result
of increased activities and delayed payments on South African Provincial
Government contracts, particularly in the Free State Province, where
contracts continue to have a negative effect on working capital. These
contracts have been terminated and negotiations are underway to settle the
amounts due for value delivered to date.
Capital expenditure on fixed assets to the value of R286,6 million was
incurred during the year ended 29 February 2012.
Total cash and cash equivalents at the end of the period amounted to R624,9
million.
Total cash inflow for the period was R30 million.
OPERATIONAL OVERVIEW
Roadmac
Roadmac is a specialist in the manufacturing and laying of asphalt, chip and
spray, surface dressing, enrichments and slurry seals.
Roadmac is the largest contributor to group revenue, contributing 50,2% of
total revenue. Performance continues to be impacted by strong competition in
the light rehabilitation market and resulting decrease in margins. The
division has secured a healthy order book for the year ahead.
Bitumen short supply issues in the industry have had a negative impact on the
performance of the division. Mitigating strategies, including importation,
storage and decanting of bitumen have been put in place to alleviate
anticipated future supply disruptions.
Revenue for the division increased 15,9% to R2,52 billion (2011: R2,18
billion) and operating profit decreased by 23,6% to R229,4 million (2011:
R300,2 million).
The divisional operating profit margins decreased to 9,1% (2011: 13,8%) due
to the increased competition experienced during the year.
The division incurred capital expenditure of R71,0 million during the year
(2011: R79,4 million).
Raubex Construction
Raubex Construction is the road and civil infrastructure construction
division focused on the key areas of new road construction (green fields) and
heavy road rehabilitation.
This division was the most affected by pricing pressures resulting from
strong tendering competition and this trend continues to characterise the
current operating environment. The division`s order book is at a satisfactory
level considering the current low margin operating environment, with some key
contracts pending award. A cautious revenue recognition policy has been
applied to the Free State Province contracts until the outcome of these
contracts can be estimated reliably.
Revenue for the division decreased 14,4% to R1,14 billion (2011: R1,33
billion) whilst operating profit decreased 50,6% to R90,9 million (2011:
R184,2 million).
The divisional operating profit margins decreased to 8,0% (2011: 13,9%).
The division incurred capital expenditure of R27,6 million during the year
(2011: R71,0 million).
Raumix
Raumix is the materials division of the group with its core focus spread over
three areas including contract crushing, production of aggregates for the
commercial market and materials handling for the mining industry.
Commercial quarry operations have reported stable results for the year,
however there have been no signs of improvement in the residential building
market. The results for the year were supported by government infrastructure
spend in the vicinity of some of our more rural quarries.
The contract crushing operations of B&E International performed well during
the year and, although margins remain under pressure, a stable order book has
been maintained.
Mining and material handling operations have experienced a noticeable
increase in activity levels as demonstrated by the increased tonnages
reported. B&E International have expanded diamond mining activities and
secured various contracts with Namdeb in Namibia. Diamond mining activities
at the Mbada operation in Zimbabwe have been terminated.
Revenue for the division increased 31,9% to R1,37 billion (2011: R1,04
billion) and operating profit increased by 18,5% to R211,2 million (2011:
R178,2 million).
The divisional operating profit margins decreased to 15,4% (2011: 17,1%).
The division incurred capital expenditure of R188,0 million during the period
(2011: R142,1 million).
International
In Namibia, the contracts in the northern part of the country were
substantially completed in February 2012, with a small amount of work rolling
into the 2013 year. A new three-year maintenance contract has been secured
with the Namibia Roads Authority for the reseal of roads in the Otjiwarango
and Otshakati regions.
Satisfactory results were reported in Zambia, with a more stable exchange
rate limiting the foreign exchange effect on the results of these operations.
Mining-related activities of B&E International made an increased contribution
to the results of the group`s international operations.
Internationally, revenue increased 45,2% to R890,4 million (2011: R613,1
million) and operating profit by 47,2% to R116,1 million (2011: R78,9
million) with operating profit margins stable at 13,0% (2011: 12,9%).
PROSPECTS
Trading conditions in the road construction industry will continue to be
challenging in the short term and the impact of lower margin work will
continue to be felt in the year ahead.
The volume of work in the road construction and maintenance industry is
encouraging. However, the severe pricing pressure being experienced continues
to present extremely challenging trading conditions.
Improvements in mining-related activities are encouraging and the group
continues to explore new opportunities in this area.
The group has maintained a stable order book of R4,62 billion (2011: R4,38
billion) and has a cautious approach to tendering for new work in the current
low margin environment.
The group`s African expansion drive remains a priority.
DIVIDEND DECLARATION
The directors have declared a gross final dividend of 35 cents per share on
14 May 2012. The salient dates for the payment of the dividend are as
follows:
Last day to trade cum dividend Friday, 1 June 2012
Commence trading ex dividend Monday, 4 June 2012
Record date Friday, 8 June 2012
Payment date Monday, 11 June 2012
No share certificates may be dematerialised or rematerialised between Monday,
4 June 2012 and Friday, 8 June 2012, both dates inclusive.
In terms of the new Dividends Tax ("DT") effective 1 April 2012, the
following additional information is disclosed:
- The local DT rate is 15%.
- The total STC credits utilised as part of this declaration amount to R1 319
733.
- The number of ordinary shares in issue at the date of this declaration is
184 535 946.
- The total STC credits utilised per share amount to 0,72 cents per share.
- The dividend to utilise for determining the DT due is 34,28 cents per
share.
- The DT amounts to 5,142 cents per share.
- The net local dividend amount is 29,858 cents per share for shareholders
liable to pay the new DT and 35 cents per share for shareholders exempt from
paying the new DT.
- Raubex Group Limited`s income tax reference number is 9370/905/151.
In terms of the DT legislation, the DT amount due will be withheld and paid
over to the South African Revenue Services by a nominee-company, stockbroker
or Central Security Depository Participant (collectively "Regulated
Intermediary") on behalf of shareholders. All shareholders should declare
their status to their Regulated Intermediary, as they may qualify for a
reduced DT rate or exemption.
BOARD CHANGES
Shareholders were advised that Marake Collin Matjila tendered his resignation
as Non-Executive Chairperson of the Raubex Board on 3 April 2012 to prevent
any perceived conflicts of interest in considering Raubex`s involvement with
national roads privatisation projects. The Board wishes to reiterate its
appreciation for Mr Matjila`s leadership since the listing of the Company in
2007.
JE Raubenheimer, the founder, previous CEO and current Non-Executive Director
of Raubex Group has been appointed as the new Non-Executive Chairman by the
Board.
Group income statement
Audited Audited
12 months 12 months
29 February 28 February
2012 2011
R`000 R`000
Revenue 5 032 625 4 545 974
Cost of sales (4 257 404) (3 645 552)
Gross profit 775 221 900 422
Other income 14 429 27 665
Other gains/(losses) - net 4 818 (18 934)
Administrative expenses (263 006) (246 595)
Operating profit 531 462 662 558
Finance income 29 353 30 422
Finance costs (41 388) (43 875)
Profit before income tax 519 427 649 105
Income tax expense (178 230) (202 096)
Profit for the year 341 197 447 009
Profit for the year attributable to:
Owners of the parent 331 247 443 405
Non-controlling interest 9 950 3 604
Basic earnings per share (cents) 179,5 241,5
Diluted earnings per share (cents) 178,5 240,3
Group statement of comprehensive income
Audited Audited
12 months 12 months
29 February 28 February
2012 2011
R`000 R`000
Profit for the year 341 197 447 009
Other comprehensive income for the year,
net of tax
Currency translation differences (323) (1 279)
Total comprehensive income for the year 340 874 445 730
Comprehensive income for the year
attributable to:
Owners of the parent 330 924 442 126
Non-controlling interest 9 950 3 604
Total comprehensive income for the year 340 874 445 730
Calculation of diluted earnings per share
Audited Audited
12 months 12 months
29 February 28 February
2012 2011
R`000 R`000
Profit attributable to owners of the parent 331 247 443 405
entity
Weighted average number of ordinary shares 184 536 183 572
in issue (`000)
Adjustments for:
Shares deemed issued for no consideration 1 079 -
(`000)
Contingently issuable shares (`000) - 964
Weighted average number of ordinary shares 185 615 184 536
for diluted earnings per share (`000)
Diluted earnings per share (cents) 178,5 240,3
Calculation of headline earnings per share
Audited Audited
12 months 12 months
29 February 28 February
2012 2011
R`000 R`000
Profit attributable to owners of the parent 331 247 443 405
entity
Adjustments for:
Profit on sale of plant and equipment (3 365) (3 313)
Impairment of goodwill 1 030 -
Excess from fair value of assets acquired (2 813) -
over purchase price
Total tax effects of adjustments 942 928
Basic headline earnings 327 041 441 020
Weighted average number of shares (`000) 184 536 183 572
Headline earnings per share (cents) 177,2 240,2
Diluted headline earnings per share (cents) 176,2 239,0
Group statement of financial position
Audited Audited
12 months 12 months
29 February 28 February
2012 2011
R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment 1 353 753 1 276 133
Intangible assets 757 629 761 445
Deferred income tax assets 17 940 45 047
Trade and other receivables 404 585
Total non-current assets 2 129 726 2 083 210
Current assets
Inventories 153 157 126 333
Construction contracts in progress and 296 382 244 116
retentions
Trade and other receivables 1 164 508 948 367
Current income tax receivable 17 862 14 192
Cash and cash equivalents 624 919 594 914
Total current assets 2 256 828 1 927 922
Total assets 4 386 554 4 011 132
EQUITY
Share capital 1 845 1 845
Share premium 2 179 613 2 179 613
Other reserves (1 142 401) (1 156 847)
Retained earnings 1 670 355 1 510 726
Equity attributable to owners of the parent 2 709 412 2 535 337
Non-controlling interest 19 468 9 276
Total equity 2 728 880 2 544 613
LIABILITIES
Non-current liabilities
Borrowings 263 112 231 905
Provisions for liabilities and charges 23 066 18 058
Deferred income tax liabilities 229 612 236 038
Total non-current liabilities 515 790 486 001
Current liabilities
Trade and other payables 899 807 712 789
Borrowings 215 690 245 654
Current income tax liabilities 26 387 17 498
Provisions for liabilities and charges - 4 577
Total current liabilities 1 141 884 980 518
Total liabilities 1 657 674 1 466 519
Total equity and liabilities 4 386 554 4 011 132
Group statement of cash flows
Audited Audited
12 months 12 months
29 February 28 February
2012 2011
R`000 R`000
Cash flows from operating activities
Cash generated from operations 663 228 853 013
Finance income 29 353 30 422
Finance costs (41 388) (43 875)
Dividend received 4 264 5 476
Income tax paid (154 701) (241 159)
Net cash generated from operating 500 756 603 877
activities
Cash flows from investing activities
Purchases of property, plant and equipment (286 594) (292 490)
Proceeds from sale of property, plant and 37 340 42 110
equipment
Acquisition of subsidiaries (10 821) 141
Loan repayments received from associates - (750)
Net cash used in investing activities (260 075) (250 989)
Cash flows from financing activities
Proceeds from borrowings 257 512 246 699
Repayment of borrowings (294 180) (302 722)
Dividends paid to owners of the parent (171 618) (196 019)
Dividends paid to non-controlling interests (2 390) (601)
Net cash used in financing activities (210 676) (252 643)
Net increase in cash and cash equivalents 30 005 100 245
Cash and cash equivalents at the beginning 594 914 494 669
of the year
Cash and cash equivalents at the end of the 624 919 594 914
year
Group statement of changes in equity
Share Share Other Retained
capital premium reserves earnings
R`000 R`000 R`000 R`000
Balance at 1 March 1 826 2 139 632 (1 139 446) 1 263 340
2010
Shares issued 19 39 981 - -
Transfer from share - - (16 122) -
option reserve
Non-controlling - - - -
interest on
acquisition of
subsidiary
Total comprehensive - - (1 279) 443 405
income for the year
Dividends paid - - - (196 019)
Balance at 28 1 845 2 179 613 (1 156 847) 1 510 726
February 2011
Share capital repaid - - - -
Share option reserve - - 14 769 -
Non-controlling - - - -
interest on
acquisition of
subsidiary
Total comprehensive - - (323) 331 247
income for the year
Dividends paid - - - (171 618)
Balance at 29 1 845 2 179 613 (1 142 401) 1 670 355
February 2012
Total attributable
to owners Non-
of the parent controlling Total
company interest equity
R`000 R`000 R`000
Balance at 1 March 2 265 352 4 344 2 269 696
2010
Shares issued 40 000 70 40 070
Transfer from share (16 122) - (16 122)
option reserve
Non-controlling - 1 858 1 858
interest on
acquisition of
subsidiary
Total comprehensive 442 126 3 605 445 731
income for the year
Dividends paid (196 019) (601) (196 620)
Balance at 28 2 535 337 9 276 2 544 613
February 2011
Share capital repaid - (70) (70)
Share option reserve 14 769 - 14 769
Non-controlling - 2 702 2 702
interest on
acquisition of
subsidiary
Total comprehensive 330 924 9 950 340 874
income for the year
Dividends paid (171 618) (2 390) (174 008)
Balance at 29 2 709 412 19 468 2 728 880
February 2012
Group segmental analysis
Road Road
Aggregates surfacing construction
and and and
crusher rehabilitation earthworks Consolidated
R`000 R`000 R`000 R`000
Reportable
segments
29 February
2012
Segment revenue 1 372 282 2 523 708 1 136 635 5 032 625
Segment result 211 161 229 376 90 925 531 462
(operating
profit)
28 February
2011
Segment revenue 1 040 147 2 178 339 1 327 488 4 545 974
Segment result 178 203 300 187 184 168 662 558
(operating
profit)
Local International Consolidated
R`000 R`000 R`000
Geographical information
29 February 2012
Segment revenue 4 142 221 890 404 5 032 625
Segment result (operating 415 357 116 105 531 462
profit)
28 February 2011
Segment revenue 3 932 876 613 098 4 545 974
Segment result (operating 583 669 78 889 662 558
profit)
Additional Information
Employee benefit expense
Audited Audited
12 months 12 months
29 February 28 February
2012 2011
R`000 R`000
Employee benefit expense in the income
statement consists of:
Salaries, wages and contributions 1 028 195 893 407
Share options granted to employees 13 488 (5 280)
Total employee benefit expense 1 041 683 888 127
Capital expenditure and depreciation
Audited Audited
12 months 12 months
29 February 28 February
2012 2011
R`000 R`000
Capital expenditure for the year 286 594 292 490
Depreciation for the year 228 366 220 184
Amortisation of intangible assets for the 2 785 2 380
year
Notes
Basis of preparation
The abridged consolidated financial information is based on the audited
financial statements of the group for the year ended 29 February 2012, which
have been prepared by the Group Financial Manager, JF Gibson CA (SA), in
accordance with International Financial Reporting Standards ("IFRS"),
International Accounting Standard 34, the Listings Requirements of the JSE
Limited and the South Africa Companies Act 71 of 2008, on a consistent basis
with that of the prior year.
These results have been audited by PricewaterhouseCoopers Inc., Chartered
Accountants (SA), Registered Auditors. Their unqualified audit opinion is
available for inspection at the Company`s registered office.
Business combinations
Burma Plant Hire (Pty) Limited
On 1 July 2011 the group acquired 51% of the share capital and the sale
claims of Burma Plant Hire (Pty) Limited for R4,04 million cash. The acquired
company specialises in plant hire to the construction and mining industry.
The acquired company contributed revenues of R61,3 million and net profit of
R4,5 million for the period from 1 July 2011 to 29 February 2012. If the
acquisition had occurred on 1 March 2011, contributions to group revenue
would have been R78,5 million and net profit of R5,0 million.
National Highway Markings CC
On 1 September 2011 the group, through its subsidiary Centremark Roadmarking
(Pty) Limited, acquired the assets and liabilities of the business of
National Highway Markings CC as a going concern for R3 million cash. The
acquired business specialises in road marking and contributed revenues of R9
million with no contribution to net profit being recognised for the period
from 1 September 2011 to 29 February 2012.
Contingencies
On 29 April 2011, shareholders were advised that the group had become aware
of certain irregularities in terms of the provisions of the Competition Act,
No 89 of 1998. The transgressions are not covered by leniency under the
Corporate Leniency Provision of the Act. The group filed a Fast Track
application to the Competition Commission by the required deadline date of 15
April 2011. The Competition Commission is in the process of assessing this
submission and the group remains committed to fully co-operate with the
Commission and to ensure that its employees, management and directors do not
engage in any conduct which constitutes a prohibited practice. No provision
for penalties has been made in the results for the period ended 29 February
2012.
Events after the reporting period
There were no material events after the reporting period to report up to the
date of preparation of these group financial statements.
On behalf of the Board
JE Raubenheimer RJ Fourie F Diedrechsen
Chairman Chief Executive Group Financial and
Officer Commercial Director
14 May 2012
Directors:
JE Raubenheimer#
RJ Fourie
F Diedrechsen
F Kenney#
LA Maxwell*
BH Kent*
NF Msiza*
# Non-executive
* Independent non-executive
Company secretary:
Mrs H E Ernst
Registered office:
The Highgrove Office Park
Building No 1, Tegel Avenue, Centurion, South Africa
Transfer secretaries:
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
South Africa
Auditors:
PricewaterhouseCoopers Inc.
Sponsor:
Investec Bank Limited
www.raubex.co.za
Date: 14/05/2012 07:15:01 Produced by the JSE SENS Department.
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