| Wed 30 Jan 2002, 0:00 | | Kelgran Limited - Interim Results For The Six Mont |
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KELGRAN LIMITED
Dimension Stone Specialists
(Incorporated in the Republic of South Africa)
Registration number 1975/04595/06
Code:KLG
ISIN:ZAE0000038851
Interim Results for the six months ended 31 December 2001
CONDENSED INCOME STATEMENT 6 Months 6 Months Year
31 Dec 2001 31 Dec 2000 30 Jun 2001
R'000 R'000 R'000
Sales revenue 219 059 206 311 371 867
Operating profit before 17 327 21 134 37 349
depreciation, finance
costs and non operational cost
Depreciation (3 866) (8 450) (13 351)
Net finance costs (2 170) (2 975) (4 501)
Profit before non operational 11 291 9 709 19 497
cost
Non operational cost (7 690) (2 877) (4 266)
Profit before taxation 3 601 6 832 15 231
Taxation (1 759) (211) 6 700
Profit after taxation 1 842 6 621 21 931
Minority interest - - (132)
Attributable to ordinary 1 842 6 621 21 799
shareholders
Reconciliation to headline
earnings
Attributable to ordinary 1 842 6 621 21 799
shareholders
Profit on sale of property, (901) - (1 967)
plant and equipment - net of
tax
Retrenchment cost 7 690 - -
Headline earnings 8 631 6 621 19 832
Earnings per share (cents)
- basic 2,0 7,2 23,8
- fully diluted 2,0 7,0 23,2
- headline 9,2 7,2 21,7
- fully diluted headline 9,2 7,0 21,1
Dividends per share (cents)
- interim 0,0 2,0 2,0
- final 3,0
Weighted number of shares in 91 903 91 709 91 709
issue (`000)
Number of shares in issue 94 034 91 709 91 709
(`000)
Fully diluted number of shares 94 034 94 034 94 034
(`000)
CONDENSED BALANCE SHEET 31 Dec 2001 31 Dec 2000 30 Jun 2001
R'000 R'000 R'000
ASSETS
Non-current assets 65 339 57 856 61 639
Property, plant and equipment 55 863 57 831 51 341
Deferred taxation 9 451 10 273
Investments 25 25 25
Current assets 298 049 233 821 235 567
Inventories 112 308 100 006 114 374
Accounts receivable 175 393 111 494 107 425
Cash and cash equivalents 10 348 22 321 13 768
Total assets 363 388 291 677 297 206
EQUITY AND LIABILITIES
Capital and reserves 167 641 151 117 163 474
Minority shareholders' interest 273 141 273
in subsidiaries
Non-current liabilities 12 010 11 307 11 247
Rehabilitation and closure cost 10 941 9 794 10 178
obligation
Post-retirement medical benefits 1 069 1 170 1 069
obligation
Deferred taxation 343
Current liabilities 183 464 129 112 122 212
Accounts payable 80 545 59 907 69 774
Taxation 5 577 1 381 4 640
Short term borrowings 97 342 65 990 44 977
Shareholders for dividend 1 834 2 821
Total equity and liabilities 363 388 291 677 297 206
CONDENSED STATEMENT OF CHANGES 31 Dec 2001 31 Dec 2000 30 Jun 2001
IN EQUITY R'000 R'000 R'000
Ordinary share capital
At the beginning of the period 1 834 1 834 1 834
Shares issued during the period 47
At the end of the period 1 881 1 834 1 834
Share premium
At the beginning of the period 69 294 69 294 69 294
Share premium raised 2 278
At the end of the period 71 572 69 294 69 294
Non-distributable reserves
At the beginning of the period 6 065 6 065 6 065
Movements during the period - - -
At the end of the period 6 065 6 065 6 065
Retained earnings
At the beginning of the period 86 281 69 137 69 137
Net profits for the period 1 842 6 621 21 799
Dividends (1 834) (4 655)
At the end of the period 88 123 73 924 86 281
Capital and reserves 167 641 151 117 163 474
CONDENSED CASH FLOW STATEMENT 6 Months 6 Months Year
31 Dec 2001 31 Dec 2000 30 Jun 2001
R'000 R'000 R'000
Cash flow from operating (49 718) 200 393
activities
Cash (utilised)/generated by (37 037) 9 720 14 990
operating activities
Net finance costs (2 170) (2 975) (4 501)
Non operational cost (7 690) (2 877) (4 266)
Taxation refunded/(paid) (328)
Dividends paid (2 821) (3 668) (5 502)
Cash effects of investing (6 067) 6 298 10 580
activities
Cash effects of financing - (9 238) (1 253)
activities
Net (decrease)/increase in cash (55 785) (2 740) 9 720
and cash equivalents
Cash and cash equivalents at (31 209) (40 929) (40 929)
beginning of the period
Cash and cash equivalents at end (86 994) (43 669) (31 209)
of the period
Notes to the Interim Condensed Financial Statements
The accounting policies used in the preparation of the interim financial
statements are consistent with those used in the annual financial statements
for the year ended 30 June 2001.
These interim financial statements were not audited. The comparative figures
for the year ended 30 June 2001 had been audited.
The bank guarantees given by the Group to third parties amounted to R7,6
million, whilst contingencies totalled R0,4 million (R7,6 million and R1,2
million as at 30 June 2001, respectively).
Comments
The first six months of the financial year saw significant changes - the
outsourcing of the quarry operations - within Kelgran, and a change of focus
for the future with the emphasis on marketing and mineral resource
management.
International demand for Kelgran products remained stable during the period,
but was undersupplied due to production and transport difficulties.
Financial results exceeded expectations in Rand terms, mainly due to the
rapid decline in the value of the Rand against the US Dollar during
December.
In terms of an agreement with Randgold, dated 15 March 1995, 2 324 830
shares were issued to Randgold during the period following the registration
of certain mineral rights in Kelgran's name.
Financial results
Turnover increased by 6 percent from R206,3 million to R219,1 million,
mainly as a result of the weaker Rand.
Profit before non operational cost improved by 16 percent from R11,3 million
to R10,0 million. Profit before taxation, however, declined from R6,8
million to R3,6 million. This was due to retrenchment cost (reflected as non-
operational cost) incurred of R7,7 million compared to R2,9 million in the
comparative period.
The outsourcing of quarrying activities led to the disposal of surplus
equipment, hence the increased tax liability.
Capital expenditure for the period under review amounted to R6,4 million
compared to R4,1 million for the six months ended 31 December 2000.
Short term borrowings, the majority being offshore loans, increased from
R45,0 million to R97,3 million, mainly as a result of the weakened Rand.
Operational activities
Despite generally good market conditions, sales volumes for the period were
lower than for the same period last year, mainly due to difficulties in
matching production with customer requirements. Severe transport logistical
problems were incurred due to insufficient railway capacity, which also
detrimentally affected sales volumes.
Following labour disruption at the Rustenburg quarries, all of the Kelgran
quarry operations have now been outsourced. As a result of this policy
decision the retrenchment cost mentioned above was incurred.
Intensive exploration efforts have resulted in the establishment of several
new quarries, which are presently under market evaluation.
The performance of the Barracuda tile factory continues to improve as a
result of increased diversification into the manufacture of monumental
products.
Prospects
Outsourcing of all quarry operations has already yielded significant
benefits in terms of higher production levels and stable production cost. It
has also enabled the Group to rationalise overhead cost structures with
consequent savings.
Attributable income for the remainder of the financial year should therefore
continue to improve, whilst debt is expected to decline.
Dividend
Considering the objective to improve Group liquidity, the Directors have
resolved not to declare an interim dividend.
By order of the Board.
R F E Brown
Managing Director
Johannesburg 31 January 2002
Executive Directors
Dato' Choo Eng Guan*, RFE Brown (Managing Director) and FP van Wyk
Non-executive Directors
Dato' Yap Yong Seong* (Chairman), Dato' Murad Mohamed Hashim*, Yap Wee
Keat*, Dr J Mphafudi, Yap Wee Chun* and V di Capua**
*Malaysian ** Italian
Registered Office
4 Homestead Avenue, Bryanston, Sandton 2196
Transfer Secretaries
Mercantile Registrars Limited, 11 Diagonal Street, Johannesburg 2001
