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31 December 2001
Wilson Bayly Holmes-Ovcon Limited
(Registration no. 1982/011014/06)
JSE Share Code: WBO
ISIN Code: ZAE000009932
Interim Results for the six months ended 31 December 2001
- TURNOVER UP 46%
- OPERATING PROFIT UP 40%
- HEADLINE EARNINGS UP 33%
ABRIDGED GROUP INCOME STATEMENT
% 6 months to 6 months to Year to
increase/ 31 Dec 2001 31 Dec 2000 30 June 2001
(decrease) R'000 R'000 R'000
Turnover 46.3 1 076 789 735 782 1 701 182
Operating income
before depreciation 39.6 62 494 44 765 96 951
Depreciation 18 705 12 761 30 680
Operating income 36.8 43 789 32 004 66 271
Investment income 5 435 8 014 16 858
Income before interest 49 224 40 018 83 129
Interest paid 3 772 249 2 102
Income before
taxation 14.3 45 452 39 769 81 027
Taxation 12.1 13 290 11 851 24 624
Income after taxation 15.2 32 162 27 918 56 403
Associate companies
earnings 4 945 - 6 351
Headline earnings 32.9 37 107 27 918 62 754
Amortisation
of goodwill 12 513 - 11 271
Attributable
income (11.9) 24 594 27 918 51 483
Shares in
issue ('000's) 55 491 55 491 55 491
Headline earnings
per share (cents) 32.9 66.9 50.3
ABRIDGED CASH FLOW STATEMENT
6 months to 6 months to Year to
31 Dec 2001 31 Dec 2000 30 June 2001
R'000 R'000 R'000
Cash flows from
operating activities
Cash generated by operations 7 400 92 392 33 327
Investment income 5 435 8 014 16 858
Cash generated from operations 12 835 100 406 50 185
Financing costs (3 772) (249) (2 102)
Taxation (1 512) (642)
Repayment of share premium (11 098) (8 878) (14 428)
Cash retained from operations (2 035) 89 767 33 013
Utilised in investing activities
Change in investments (4 298) 24 047 4 135
Investment in associates (10 208) - (65 109)
Purchase of fixed
assets (net) (29 468) (10 075) (45 999)
Cash flow after
investing activities (46 009) 103 739 73 960
Cash effects of
financing activities
Change in net borrowings (2 785) 474 (3 422)
Net change in bank and
cash balances (48 794) - (77 382)
Cash and bank balances
at start of period 208 847 - 215 076
Cash and bank balances on
acquisition of subsidiaries - - 71 153
Cash and bank balances
at end of period 160 053 104 213 208 847
ABRIDGED GROUP BALANCE SHEET
31 Dec 2001 31 Dec 2000 30 June 2001
R'000 R'000 R'000
ASSETS
Non-current assets 345 879 183 438 333 035
Property, plant and equipment 186 976 118 575 176 125
Investments 119 715 64 863 105 209
Goodwill 39 188 - 51 701
Current assets 554 808 487 349 619 184
Inventories 18 371 8 633 18 428
Contracts in progress 328 283 158 783 337 312
Accounts receivable 48 101 49 686 54 597
Bank balances 160 053 270 247 208 847
Total assets 900 687 670 787 952 219
EQUITY AND LIABILITIES
Ordinary share capital
and reserves 288 711 231 347 255 203
Non-current liabilities 72 828 52 952 71 629
Interest bearing debt 4 613 186 8 804
Deferred tax 68 215 52 766 62 825
Current liabilities 539 148 386 488 625 387
Short-term loans 10 032 532 8 626
Accounts payable 499 349 367 673 594 894
Taxation 29 767 18 283 21 867
Total equity and liabilities 900 687 670 787 952 219
Net tangible asset value
per share (c) 450 417 367
STATEMENT OF CHANGES IN EQUITY
6 months to 6 months to Year to
31 Dec 2001 31 Dec 2000 30 June 2001
R'000 R'000 R'000
Capital and reserves at
start of period 255 203 207 464 207 464
Retained income for the period 24 594 27 918 51 483
Changes in foreign
currency reserve 20 012 4 843 10 684
Share premium repayment (11 098) (8 878) (14 428
Capital and reserves at
the end of period 288 711 231 347 255 203
NOTES AND ADDITIONAL INFORMATION
6 months to 6 months to Year to
31 Dec 2001 31 Dec 2000 30 June 2001
R'000 R'000 R'000
1. Segmental results
Turnover
Local 679 500 581 247 1 226 046
International 397 289 154 535 475 136
1 076 789 735 782 1 701 182
Operating income
Local 29 666 23 477 48 754
International 14 123 8 527 17 517
43 789 32 004 66 271
Results at the interim
period are not
seasonally influenced.
2. Contingent liabilities
Guarantees issued 349 506 272 712 210 610
3. Continuity
These results are based on the same accounting policies and methods of
computation as those used in preparing the annual financial statements at 30
June 2001 and are prepared in accordance with Generally Accepted Accounting
Practice.
COMMENTS
We are pleased to report that the group continues on its path of steady
growth. Headline earnings for the period at R37 million reflect an increase
of 33% over the comparable period whilst turnover at R1,08 billion equates
to an increase of 46%.
Delays were experienced in obtaining payment for work done on a number of
major local and overborder contracts during the period. Fortunately the
bulk of these problems were satisfactorily resolved before the end of the
calendar year but the delays in payment placed pressure on our cash reserves
and this is reflected in the decrease in investment revenue over the period.
Capital expenditure for the period amounted to R29 million (2000 : R10
million).
The Roads and Earthworks division achieved results well in excess of its
budget and is on track to once again achieve record results for the
financial year. The Komati dam contract, in which the company is a joint
venture partner has been successfully completed and the impounding of water
has started. Construction work on the N4 Toll Road contract commenced in
September last year and is making steady progress. The contract is due for
completion in 2004.
The division's major road contracts in Swaziland and Lesotho are both making
good progress and have reached the stage where the unique complexities of
each contract are well understood and are being successfully managed. Heavy
rains late last year impacted upon both these contracts as well as those
being carried out in Botswana but not to the degree that would significantly
affect the division's financial performance. The company is also engaged in
the construction of two major road contracts in Mozambique and these have
got off to a good start. Work on the second phase of the division's gold
mine contract in Tanzania will only start when the required funding has been
secured.
The Construction division continues to perform well, posting significant
gains in both turnover and operating profits despite the tight trading
conditions in the building industry. The division was awarded two major
building contracts in joint venture; the new Constitutional Court building
in Braamfontein worth R77 million and the contract for alterations and
extensions to the South African Reserve Bank head office in Pretoria, worth
R163 million.
The company is also a partner in the joint venture undertaking the
construction of the Arabella Grand Hotel at the Convention Centre site in
Cape Town. Work on the Convention Centre itself is proceeding smoothly and
the value of the company's share of work on this site now exceeds R400
million. Extensions and alterations to hospitals throughout the country
continue to be a welcome source of work.
Civil engineering contracts continue to perform well with significant
volumes of work being carried out at Orapa mine in Botswana and the Skorpion
mine in Namibia by both the Construction division and the Roads and
Earthworks division. The contract for the supply of water to various
platinum mines from the Olifants river is all but complete. Other contracts
for the platinum mines are ongoing and this source continues to be the
provider of a steady flow of work for the company.
The Stocks Civil Engineering acquisition has bedded down well despite
certain contracts taking longer to wrap up than was originally anticipated.
Property development continues to play a minor role in the group's
activities. The financing of the Waterfall Mall shopping centre in
Rustenburg was re-structured and as a result the company's stake in the
equity has increased from 33% to 40%. The Gwen Lane property in the Sandton
CBD in which the company has a 50% stake remains unlet and given the present
state of the commercial property market in Sandton, this situation is
unlikely to change in the near future.
Probuild Constructions (Aust) Pty Ltd, in which the company has a minority
stake has a full order book and results are expected to exceed budget for
the year.
PROSPECTS
The group's order book at the start of 2002 amounted to R2,4 billion
compared to R1,5 billion a year ago. As a result the company has sufficient
work on hand to achieve and, in certain cases, exceed its targets for the
year. Barring unforeseen circumstances, we therefore expect the results for
the second half of the year to be better than those now reported.
DISTRIBUTION OF SHARE PREMIUM IN LIEU OF AN INTERIM DIVIDEND
Subject to the passing of certain ordinary resolutions at a general meeting
to be held on 4 April 2002 the company will repay to shareholders the sum of
R6 658 860.00 from its share premium account ("the distribution"), the
equivalent of 12 cents per share (2000 : 10 cents).
The last day to trade "CUM" the distribution in order to participate in the
distribution is Friday, 5 April 2002. The shares of WBHO will commence
trading "EX" the distribution on Monday, 8 April 2002, and the record date
will be Friday, 12 April 2002. Payment in respect of the distribution will
be made on Monday 15 April 2002.
A circular giving formal notice of the meeting will be posted to
shareholders.
On behalf of the board
B G HOLMES A J MACKENZIE
Chairman Director
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