| Tue 26 Feb 2002, 0:00 | | Rebserve - Interim Report For The Six Months Ended |
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REBSERVE HOLDINGS LIMITED
(formely Rebhold Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1995/004153/06)
("Rebserve")
Isin: ZAE000034484
Share code: RBV
Interim report for the six months ended 31 December 2001
Financial HIGHLIGHTS
- Turnover from continuing operations up 33% to R1 426 million
- Profit from continuing operations up 22% to R134 million
- Net income before taxation from continuing operations
up 10% to R157 million
- Headline net income attributable to
ordinary shareholders up 11% to R106 million
- Diluted headline earnings per share (compared
to pro forma for comparable period) up 13% to 55 cents
The following are the unaudited results of Rebserve and its subsidiaries
("the group") for the six months ended 31 December 2001 with comparative
figures.
Summarised Group Income Statement
Pro forma
Unaudited Unaudited Unaudited Audited
6 months 6 months 6 months year
ended ended ended ended
31-Dec 31-Dec 31-Dec 30-Jun
2001 % 2000 2000 2001
R'000 increase R'000 R'000 R'000
Turnover 1 426 406 1 076 202 2 932 070 5 559 588
Continuing operations 1 426 406 33 1 076 202 1 076 202 2 379 115
Discontinued operations - - 1 855 868 3 180 473
Profit from operations 133 534 109 754 191 687 352 221
Continuing operations 133 534 22 109 754 109 754 237 390
Discontinued operations - - 81 933 114 831
Net investment income 23 906 33 895 23 707 43 653
Net income before
taxation
and exceptional items 157 440 10 143 649 215 394 395 874
Exceptional items (5 666) - -344 53 311
Net income
before taxation 151 774 143 649 215 050 449 185
Taxation (39 446) (39 670) (56 608) (96 072)
Net income after
taxation 112 328 103 979 158 442 353 113
Net income attributable
to outside (11 897) (8 799) (22 108) (4 314)
shareholders
Net income attributable
to
ordinary shareholders 100 431 95 180 136 334 348 799
Number of shares in
issue (000) 193 730 187 116 187 116 193 730
Weighted average
number of shares
in issue (000) 191 905 187 116 187 116 193 730
Earnings per share 52,3 50,9 72,9 180,0
(cents)
Headline earnings
per share (cents) 55,3 50,9 73,0 134,6
Diluted headline
earnings
per share (cents) 55,3 13 49,1 70,5 134,6
Dividend per share - - - 20,5
(cents)
Note:
1. The pro forma results for the six months ended 31 December 2000 were
prepared on the assumption that the disposal and/or closure of the wholesale
and non-core businesses had been effective from 1 July 2000.
2. The exceptional item in the current period comprises the amortisation of
goodwill.
Summarised Group Balance Sheet
Unaudited Unaudited Audited
31-Dec 31-Dec 30-Jun
2001 2000 2001
R'000 R'000 R'000
Assets
Non-current assets 661 991 616 803 623 789
Fixed assets 535 630 353 472 513 026
Investments and loans 85 549 141 220 68 647
Deferred taxation 40 812 122 111 42 116
Current assets 1 088 950 1 573 217 1 548 528
Liquid funds 611 671 700 626 657 212
Other current assets 477 279 872 591 891 316
Total assets 1 750 941 2 190 020 2 172 317
Equity and liabilities
Capital and reserves 818 229 803 246 926 966
Share capital and reserves 711 118 511 442 706 624
Amounts due to vendors 95 527 171 346 199 163
Outside shareholders' interest 11 584 120 458 21 179
Non-current liabilities 90 260 222 556 264 072
Interest bearing liabilities 77 448 213 572 254 915
Non-interest bearing 12 812 8 984 9 157
liabilities
Current liabilities 842 452 1 164 218 981 279
Interest bearing liabilities 96 873 85 221 40 547
Non-interest bearing 745 579 1 078 997 940 732
liabilities
Total equity and liabilities 1 750 941 2 190 020 2 172 317
Net asset value per share 383,9 317,3 381,0
(cents)
Net tangible asset value 252,5 317,3 256,7
Per share (cents)
Summarised Group Cash Flow
Statement
Unaudited Unaudited Audited
31-Dec 31-Dec 30-Jun
2001 2000 2001
R'000 R'000 R'000
Cash generated from operations 113 482 143 625 303 761
Net investment income 23 906 23 707 43 653
Taxation paid (65 816) (52 200) (80 111)
Dividends paid (39 720) (14 890) (14 890)
Cash available from operating 31 852 100 242 252 413
activities
Cash effects of investing and (77 393) 29 344 (44 066)
financing activities
Net movement in liquid funds (45 541) 129 586 208 347
Net liquid funds at the beginning
of the period
and on acquisition of businesses 657 212 571 040 448 865
and subsidiaries
Net liquid funds at the
end of the period 611 671 700 626 657 212
Statement of changes in equity
Unaudited Unaudited Audited
31-Dec 31-Dec 30-Jun
2001 2000 2001
R'000 R'000 R'000
Balance at the beginning of the 905 787 573 477 573 477
period
Shares issued/acquired (56 215) 15 029 14 902
Acquisition of subsidiaries (103 638) (41 612) (30 951)
and businesses
Net income attributable to ordinary 100 431 136 334 348 799
shareholders
Dividends (39 720) (440) (440)
Balance at the end of the period 806 645 682 788 905 787
Segmental information
31-Dec 31-Dec 30-Jun
2001 2000 2001
R'000 R'000 R'000
Turnover
Services
(continuing operations) 1 426 406 1 076 202 2 379
115
Facilities management
and professional
services 547 889 366 758 898 035
Mining and technical
services 326 537 255 315 574 841
Food services 270 557 242 351 472 847
Support services 281 423 211 778 433 392
Wholesale
(discontinued operations) - 1 855 868 3 180
473
1 426 406 2 932 070 5 559
588
Profit from operations
Services
(continuing operations) 133 534 109 754 237 390
Facilities management
and professional
services 41 332 22 399 61 310
Mining and technical
services 51 471 39 249 87 908
Food services 23 440 22 673 45 292
Support services 17 291 25 433 42 880
Wholesale
(discontinued operations) - 81 933 114 831
133 534 191 687 352 221
Commentary
Financial results
Rebserve achieved a solid overall result in the period under review, being
the first trading period following Rebserve's successful transformation into
a focused services group. Continued difficult trading and economic
conditions were exacerbated by the sharp decline in the value of the Rand
and market uncertainty in the second quarter.
Turnover from continuing operations increased by 33%. Profit from continuing
operations increased by 22% to R134 million with almost all such growth
being organic. Net investment income declined by 30%. Headline net income
attributable to ordinary shareholders increased by 11% to R106 million. The
weighted average number of shares in issue decreased to 192 million shares
following the implementation of the share buyback programme. This resulted
in diluted headline earnings per share of 55,3 cents per share for the
period, up 13% on the pro forma diluted headline earnings per share for the
comparable six month period.
Cash generated from operating activities remained strong, notwithstanding
the payment of the remaining creditors and the costs associated with the
closure of the Browns and Weirs stores as previously provided for. The
directors remain confident that the final costs of closing the Browns and
Weirs head office will not exceed the original estimates.
The group's balance sheet remains strong with liquid funds of R612 million
at 31 December 2001. This includes an amount of
R230 million earmarked for payment of the balance of the Molope purchase
consideration and related liabilities.
Operational performance
Trading conditions remained highly competitive. The trading results for the
period are generally in line with management's expectations and reflect the
sound mix of services businesses within the group, the dependability
associated with certain annuity-based service contracts, and the strong
management expertise within the group.
The internal development of Rebserve to create a coherent, focused and
vigorous force in the services sector has continued throughout.
Facilities Management and Professional Services
TFMC continues to perform satisfactorily and has delivered good results.
Service achievements are set to exceed the minimum contractual levels agreed
with Telkom Limited ahead of schedule. TFMC is continuously exploring ways
in which maximum benefits can be delivered to Telkom through this successful
facilities management contract.
TFMC is supported by its own professional services team and through the
relationship with WS Atkins plc. This team is constantly working on securing
future facilities management contracts. The directors remain convinced that
the group is the leading contender to win major facilities management
contracts when these are awarded. The directors are not aware of any major
facilities management contracts having been awarded in South Africa since
the Telkom contract was awarded to TFMC.
JIC Mining's facilities management services within the mining sector have
performed to expectations. They provide confirmation of the demand for
facilities management and integrated services of the type that Rebserve is
well positioned to provide.
Mining and Technical Services
As a result of the increase in the Rand gold price over the period under
review the level of activity within the mining sector will increase and JIC
Mining is set to capitalise on new opportunities in both the gold and
platinum sectors. This will reinforce its dominant position within the
mining industry. JIC delivered a steady performance whilst spending time and
resources in setting up new contracts and pursuing new opportunities. The
set-up costs of new contracts have been expensed in the period.
Trollope Mining delivered a good performance. The business continues to
focus on its core skills and the retention of operational flexibility. The
investment in increasingly sophisticated management tools to monitor
performance and aid plant investment planning is bearing fruit.
Food Services
Stamford Sales (now incorporating Bakers World) performed well as a result
of the high service levels coupled with the attention of management to the
maintenance of good customer and supplier relations.
Royal and King Pie have delivered reasonable performances, having absorbed
significant rises in food prices during the period.
Support Services
The consolidation of Rebserve's cleaning services under Berco management has
been completed with the realisation of savings in overheads.
Rebserve has experienced mixed results in its security operations. Protea
had a good half year. The expected improvement in the performance of Coin,
following changes in senior management and actions to upgrade the businesses
operations, has not yet materialised. Coin has however remained profitable
although its contribution was less than for the comparable period.
The freight forwarding operations experienced a slow start to the year which
was exacerbated by the fallout from the events of 11 September 2001 and the
impact of the declining Rand. Under the circumstances the businesses have
performed reasonably, holding their own in this difficult environment.
Accounting policies
The results for the six months ended 31 December 2001 have been prepared in
accordance with South African statements of Generally Accepted Accounting
Practice. The accounting policies used are consistent in all respects with
the accounting policies applied in the financial statements for the year
ended 30 June 2001.
Dividend
It is the group's policy to declare a single annual dividend.
Prospects
Rebserve is well positioned to capitalise on the strong foundation which has
been established by virtue of its current range of services businesses, as
well as the good organic growth prospects arising from the continuing trend
towards outsourcing and the provision of integrated services.
Having completed a period of consolidation, the group has the resources
available to pursue selective acquisitions of focused services businesses
which will further enhance Rebserve's position as the leading provider of
integrated services in South Africa.
In the absence of unforeseen circumstances Rebserve expects to deliver real
earnings growth for the year ended 30 June 2002 off the base which has been
established of 100,6 cents pro forma headline earnings per share from
continuing operations (including investment income) for the year ended 30
June 2001.
SM Levenberg WJ Paskins
Chairman Chief Executive
25 February 2002
Registered Office:
Rebserve House, Hunts End, 36 Wierda Road West, Wierda Valley, Sandton, 2196
Telephone 27 11 290-4200
Telefax 27 11 783-0027
ISIN: ZAE000011631 Share Code: RBV
Sponsor: Deutsche Securities S.A. (Proprietary) Limited
Transfer Secretaries: Computershare Services Limited,
4th Floor Edura, 41 Fox Street, Johannesburg, 2001
Directors:
SM Levenberg (Chairman), MC Ramaphosa (Deputy Chairman),
WJ Paskins (Chief Executive), MH Brodie*, F Cohen, AP Nkuna*,
CD Stein*, BC Till *Non-executive
A copy of these results is available on the Rebserve website at:
www.rebserve.com
