| Fri 28 Sep 2001, 0:00 | | Sallies - Preliminary Report |
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PRELIMINARY REPORT FOR THE YEAR ENDED 3O JUNE 2001
22% increase in profit from mining
718% increase in headline earnings per share
523% increase in net profit
CONSOLIDATED CASH FLOW STATEMENTS
Year Year
ended ended
30 June 30 June
2001 2000
Audited Audited
R000 R000
Net cash inflow/(outflow) from
operating activities 25 265 (534)
Cash generated by operations 30 749 5 000
Finance cost (3 371) (3 786)
Investment income 475 944
Normal taxation paid (2 588) (2 692)
Net cash outflow from
investment activities (8 066) (72 139)
Acquisition of subsidiary - (66 358)
Net additions to mine plant,
equipment and buildings (8 903) (5 538)
Additions to office furniture
and equipment (96) (243)
Proceeds from disposal of office
furniture and equipment 933 -
Net cash (outflow)/inflow from
financing activities (10 105) 74 657
Proceeds from issue of shares 12 012 44 208
Long-term loan
- raised - 38 999
- repaid (22 117) (8 550)
Net increase in cash
and cash equivalents 7 094 1 984
Cash and cash equivalents at
beginning of year 2 116 132
Cash and cash equivalents at
end of year 9 210 2 116
CONSOLIDATED INCOME STATEMENTS
Year Year
ended ended
30 June 30 June
2001 2000
Audited Audited %
R000 R000 change
Revenue - mining 99 031 88 680 12
* Continued operations 98 101 88 680 11
* Discounted operations 930 -
Cost of sales (77 897) (71 348) (9)
* Continued operations (75 200) (71 348) (5)
* Discounted operations (2 697) -
Profit from mining operations 21 134 17 332 22
* Continued operations 22 901 17 332 32
* Discounted operations (1 767) -
Less: Administrative expenses (8 768) (5 317)
Less: Amortisation of goodwill (1 020) (616)
Less: Amortisation of mineral rights (2 053) (2 055)
Loss on disposal of property,
plant and equipment (116) -
Net finance costs (2 896) (2 842)
Net foreign exchange loss (2 138) (2 906)
Profit on disposal of subsidiary 283 -
Net profit before taxation 4 426 3 596 (23)
Taxation
- normal (779) (2 753)
- deferred 537 (171)
Net profit for the year 4 184 672 523
Depreciation 2 173 2 122
Issued shares (number) 92 294 454 64 574 054
Weighted average shares issued (number) 66 017 034 60 677 758
Weighted average shares issued for
diluted earnings per share (number) 101 284 054 81 287 758
Reconciliation of earnings:
Net profit attributable to shareholders
for basic earnings per share 4 184 672 523
Amortisation of goodwill 1 020 -
Loss on disposal of assets (net of tax) 81 -
Loss on discontinued operations
(net of tax) 1 566 -
Deferred tax on amortised goodwill (656) -
Surplus on disposal of subsidiary (283) -
Net profit attributable to shareholders
for headline earnings per share 5 912 672 780
Depreciation - net of taxation 1 521 1 485
Amortisation of mineral rights 2 053 2 055
Adjusted cash earnings attributable to
shareholders for cash earnings
per share 9 486 4 212 125
Income adjustment for diluted earnings
per share 2 664 2 062
Earnings per share:
Basic:
- undiluted (cents) 6.3 1.1 473
- diluted (cents) 6.8 3.4 100
Headline:
- undiluted (cents) 9.0 1.1 718
- diluted (cents) 8.5 3.4 150
Cash earnings per share:
- undiluted (cents) 14.4 6.9 109
- diluted (cents) 12.0 7.7 56
CONSOLIDATED BALANCE SHEETS
30 June 30 June
2001 2000
Audited Audited
R000 R000
EQUITY AND LIABILITIES
Capital and reserves 57 647 41 502
Share capital and premium 54 045 42 084
Accumulated income/(loss) 3 602 (582)
Non-current liabilities 26 787 44 973
Long-term loan 8 848 27 027
Provision for environmental
rehabilitation 937 407
Deferred taxation 17 002 17 539
Current liabilities 23 980 18 067
Accounts payable 13 523 8 159
Taxation payable - 899
Current portion of
long-term liabilities 10 457 9 009
Total equity and liabilities 108 414 104 542
ASSETS
Non-current assets 74 554 71 308
Property, plant and equipment 61 857 60 322
Goodwill 12 697 10 986
Current assets 33 860 33 234
Inventories 8 652 8 313
Accounts receivable 15 088 22 805
Taxation prepaid 910 -
Cash and cash equivalents 9 210 2 116
Total assets 108 414 104 542
Net asset value per issued share at
year end (cents) 62.5 63.4
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Accu-
Share Share mulated
capital premium income Total
R000 R000 R000 R000
Balance on formation
of the group on 1 July 1999 9 - (1 254) (1 245)
Net income for year 672 672
Issue of shares 55 44 153 44 208
Share issue and listing expenses
charged against share premium (2 133) (2 133)
Balance at 30 June 2000 64 42 020 (582) 41 502
Issue of shares 28 11 984 12 012
Share issue and listing expenses
charged against share premium (51) (51)
Net income for the year 4 184 4 184
Balance at 30 June 2001 92 53 953 3 602 57 647
Overview
The results for the year ending 30 June 2001 were much improved over those
of the previous year with a growth of 718 per cent in headline earnings. The
results were, however, significantly below budget as a result of lower
headgrade, recoveries and a number of plant breakdowns, but should be
improved on in the forthcoming year.
Production
Acid grade fluorspar concentrate production was marginally lower than that
of the previous year. This was mainly as a result of a lower headgrade and
recoveries, compounded by a major breakdown in the plant in November 2000.
During the year the mill feed increased from 117 to 125 tonnes per hour,
which is considered the full capacity of the plant.
The cost of production increased by 30 per cent mainly as a result of the
increase in the cost of fuel, the weakening of the Rand, the continued
increase in the stripping ratio without a corresponding increase in ore
grade and high maintenance costs on an ageing plant.
Metallurgical grade fluorspar concentrate is purchased from a competitor,
dried and briquetted, for sale into the local market. Sales of this product
were two per cent lower due to a drop in demand. The cost per tonne
increased by 34 per cent mainly due to increases in the purchase price,
fuel, gas and transport.
Aggregate crushing commenced in August 2000, but was terminated during
May 2001 due to it having little economic merit over the long term and not
being the core business of Witkop.
Agricultural lime sales remain dependent on farming circumstances. The
group has, however, commissioned a study into alternative commercial uses
for its substantial dolomitic lime tailings, which could result in new
avenues of production and revenues. Any commercial opportunities in this
field would be embarked on in a joint venture, so that management at Witkop
remains focused on the production of acid grade fluorspar.
Sales
Acid grade fluorspar concentrate sales volumes were 14 per cent down
compared with the 2000 financial year. Sales in 2000 were higher as the acid
grade fluorspar stocks were fully utilised for this purpose. The lower
volumes were, however, offset by improved US$ selling prices and the
weakening in the Rand/US$ exchange rate.
Metallurgical grade fluorspar volumes were down due to lower demand,
whilst prices increased by 16 per cent over those of the previous year.
Year Year
ended ended
30 June 30 June %
2001 2000
change
Acid grade fluorspar concentrate
Ore mined tonne 1 220 386 1 146 377 6
Stripping ratio per tonne ore 0.54 0.22 145
Ore milled tonne 1 055 661 932 138 13
Head grade per cent 13.69 13.76 (1)
Production tonne 112 391 114 034 (1)
Sales volume tonne 109 310 127 338 (14)
Average price Rand/tonne 840.89 657.07 28
Average export price US$/tonne 112.16 104.75 7
Average exchange rate Rand/US$ 7.67 6.33 21
Average export price Rand/tonne 860.27 662.93 30
Average cost of exports Rand/tonne 663.45 555.31 19
Average local price Rand/tonne 657.10 581.96 13
Average cost of local sales Rand/tonne 517.73 406.82 27
Metallurgical grade fluorspar
concentrate
Production tonne 11 753 13 808 (15)
Sales volume tonne 13 027 13 249 (2)
Average selling price Rand/tonne 454.05 391.30 16
Average cost or production Rand/tonne 430.42 321.54 34
Aggregate
Production tonne 63 977 -
Sales volume tonne 42 797 -
Average selling price Rand/tonne 21.73 -
Average cost of aggregate Rand/tonne 49.67 -
Agricultural lime
Sales volume tonne 42 649 52 325 (18)
Average selling price Rand/tonne 7.18 6.76 6
Employment number 182 183
Staff turnover per cent 10 10
Safety rating stars 5 5
Mineral resources
The group has proven and probable reserves adequate for 14 years at current
production levels of 120 000 tonnes per annum. Large unexplored inferred
resources exist in close proximity to the plant.
Capital expenditure
Capital expenditure during the year under review amounted to R6.1 million
and relates mainly to pre-stripping to ensure enough available reserves for
effective mining and R2.7 million on the feasibility study and test work
associated with the proposed plant expansion. Future capital expenditure
will have to be expended to upgrade the current crushing facility and
certain areas of the process plant to maintain current production levels.
During the review period the mining fleet was disposed of and the group
reverted to contract mining.
Capital structure
On 6 June 2001 Rand Merchant Bank exercised its option to convert US$1.5
million of its loan facility into equity. This resulted in an issue of an
additional 27 720 400 shares with a par value of 0.1 cent per share at a
premium of 43.23 cents per share.
Accounting policies
The group's accounting policies conform with South African Statements of
Generally Accepted Accounting Practice. These policies are consistent with
those applied in the previous year.
Restatement of comparative results
The consolidated cash flow statement, weighted average shares issued for
diluted earnings per share and diluted earnings per share for the year ended
30 June 2000 have been restated to realign with current disclosure.
Diluted earnings per share
Diluted earnings per share have been calculated assuming that at the
beginning of the year 5 600 000 share options, allocated to directors,
employees and consultants, were exercised and that RMB Australia had
exercised its conversion right resulting in the issue of 36 710 000 shares,
the number of shares being based on the share price and exchange rate at the
beginning of the year. The net profit is therefore adjusted by the after-tax
effect of interest and foreign exchange gains/(losses) on the US$1.5 million
portion of the loan and interest earned on the additional capital from the
exercise of the share options.
On behalf of the Board
M J TUITE
Chairman
Johannesburg
28 September 2001
Registered office and Secretaries
KPMG Services (Pty) Limited, 1226 Schoeman Street, Pretoria
(PO Box 11265, Hatfield, 0028)
Transfer secretaries
Computershare Services Limited, 1st Floor, Edura, 41 Fox Street,
Johannesburg
(PO Box 61051, Marshalltown, 2107)
Directors
M J Tuite* (Chairman), P H De Villiers (Managing Director), O R Dix, L J
Woolcock*
*Australian
