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KELGRAN LIMITED - Reviewed Results for the year ended 30 June 2002
KELGRAN LIMITED
Dimension Stone Specialists
(Incorporated in the Republic of South Africa)
Registration number 1975/04595/06
Code:KLG
ISIN:ZAE0000038851
Condensed Income Statement
Reviewed
2002
R`000 Audited
2001
R`000
Revenue 444 520 371 867
Operating profit before depreciation,
finance costs and non-operational cost 33 962 37 349
Depreciation (6 179) (13 351)
Net finance costs (4 546) (4 501)
Profit before non-operational cost 23 237 19 497
Non-operational cost (8 933) (4 266)
Profit before taxation 14 304 15 231
Taxation (3 220) 6 700
Profit after taxation 11 084 21 931
Minority interest (60) (132)
Attributable to ordinary shareholders 11 024 21 799
Reconciliation to headline earnings
Attributable to ordinary shareholders 11 024 21 799
Profit on sale of property, plant
and equipment (4 077) (2 810)
Profit on sale of investments (886) -
Retrenchment cost 8 933 4 266
Tax (1 191) (437)
Headline earnings 13 803 22 818
Earnings per share (cents)
- basic 11,9 23,8
- fully diluted 11,7 23,2
- headline 14,9 24,9
- fully diluted headline 14,7 24,3
Dividends paid per share (cents)
- interim 3,0 4,0
- final - 2,0
Weighted number of shares
in issue (`000) 92 871 91 709
Number of shares in issue (`000) 94 034 91 709
Fully diluted number of shares (`000) 94 034 94 034
Condensed Balance Sheet
Reviewed
2002
R`000 Audited
2001
R`000
ASSETS
Non-current assets 79 241 69 397
Property, plant and equipment 51 611 51 341
Deferred taxation 17 512 10 273
Loans to contractors 10 118 7 758
Investments - 25
Current assets 282 297 227 809
Inventories 123 534 114 374
Accounts receivable 147 706 99 667
Cash and cash equivalents 11 057 13 768
Total assets 361 538 297 206
EQUITY AND LIABILITIES
Capital and reserves 176 823 166 295
Minority shareholders` interest
in subsidiaries 333 273
Non-current liabilities 12 949 11 247
Rehabilitation and closure
cost obligation 11 632 10 178
Post-retirement medical benefits
obligation 1 317 1 069
Current liabilities 171 433 119 391
Accounts payable 88 281 69 774
Current tax liabilities 6 099 4 640
Short-term borrowings 77 053 44 977
Total equity and liabilities 361 538 297 206
Condensed Statement of Changes in Equity
Reviewed
2002
R`000 Audited
2001
R`000
Ordinary share capital
At the beginning of the year 1 834 1 834
Shares issued during the year 47 -
At the end of the year 1 881 1 834
Share premium
At the beginning of the year 69 294 69 294
Share premium raised 2 278 -
At the end of the year 71 572 69 294
Non-distributable reserves
At the beginning of the year 6 065 6 065
Movements during the year - -
At the end of the year 6 065 6 065
Retained earnings
At the beginning of the year -
as previously reported 86 281 69 137
Effect of adoption of AC107 2 821 3 668
At the beginning of the
year - as restated 89 102 72 805
Net profit for the year 11 024 21 799
Dividends paid (2 821) (5 502)
At the end of the year 97 305 89 102
Capital and reserves 176 823 166 295
Condensed Cash Flow Statement
Reviewed
2002
R`000 Audited
2001
R`000
Cash flow from operating activities (24 290) 8 151
Cash generated by operating activities 1 010 22 748
Net finance costs (4 546) (4 501)
Non-operational cost (8 933) (4 266)
Taxation refunded/(paid) (9 000) (328)
Dividends paid (2 821) (5 502)
Cash flows from investing activities (10 497) 2 822
Cash flows from financing activities - (1 253)
Net (decrease)/increase in
cash and cash equivalents (34 787) 9 720
Cash and cash equivalents at the
beginning of the year (31 209) (40 929)
Cash and cash equivalents at
the end of the year (65 996) (31 209)
COMMENTS
NATURE OF BUSINESS
The Group is engaged in the quarrying, marketing and distribution of
granite. As these activities comprise an integrated operation, the Group
regards this as a single primary business segment, on which all
information is disclosed in this announcement.
RESULTS
Turnover increased by 20 percent from R371,9 million to R444,5 million,
mainly as a result of the weaker Rand.
Profit before non-operational cost increased by 19 percent from R19,5
million to R23,2 million, in spite of operational difficulties
experienced during the year, including labour disruptions, transport
difficulties and outsourcing of all quarry operations.
Demand for granite remained stable during the year, but was under-
supplied due to low production levels at most quarries during the first
half of the year.
Performance improved in the second half of the financial year as the
Group started to benefit from its outsourcing programme.
Profit before taxation, however, decreased by 6 percent from R15,2
million to R14,3 million, mainly due to retrenchment cost incurred of
R8,9 million.
The outsourcing of quarrying activities led to the disposal of surplus
equipment, contributing to the increased tax liability. Included in the
tax charge of R3,2 million is a deferred tax credit of R4,1 million
relating to the recognition of a deferred tax asset in one of the
operating subsidiaries, in respect of previously unrecognised tax
losses, to the extent that realisation of the related tax benefit is now
probable.
Capital expenditure for the year amounted to R11,6 million (30 June
2001: R6,3 million), of which R2,3 million was settled through the issue
of
2 324 830 shares to Randgold, in terms of an agreement dated 15 March
1995, following the registration of certain mineral rights in Kelgran`s
name.
Debt net of cash amounted to R66,0 million at 30 June 2002, reducing
from R87,0 million as at 31 December 2001 (30 June 2001: R31,2 million).
The net debt equity ratio was 37,3 percent (30 June 2001: 18,8 percent).
Bank guarantees given by the Group to third parties amounted to R7,8
million, whilst contingencies totalled R0,7 million (R7,6 million and
R1,2 million, respectively as at 30 June 2001).
OPERATIONAL ACTIVITIES
Outsourcing of all quarry activities was completed during the year, and
as a result, production volume and cost are now stable. Sales for the
year however, were below expectations due to disruption of quarry
activities during the transition to outsourcing. In addition, lack of
rail transport capacity also significantly restricted sales volumes.
Following intensive exploration, several trial granite quarries were
opened, and these new materials are now being actively promoted.
The Barracuda tile factory performed satisfactorily and continued to
expand production in monumental products.
ACCOUNTING POLICIES
The accounting policies adopted in the preparation of the annual
financial statements are consistent with those used in the audited
financial statements for the year ended 30 June 2001, apart from the
adoption of AC107, requiring that dividends be recorded in the period in
which they were paid (refer to the Condensed Statement of Changes in
Equity).
REVIEW BY THE INDEPENDENT AUDITORS
The results have been reviewed by PricewaterhouseCoopers Inc and their
unqualified report is available for inspection at Kelgran`s registered
office.
PROSPECTS
Exploration and evaluation of new products are continuing, which will
support Kelgran`s profit base in the medium- to long-term.
Attributable income should continue to improve, whilst debt is expected
to reduce in the next financial year.
DIVIDEND
The Directors have resolved not to declare a final dividend.
By order of the Board
Rob Brown
Acting Managing Director
17 September 2002
Executive Directors
Dato` Choo Eng Guan* (Deputy Chairman), RFE Brown (Acting 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
Computershare Investor Services Limited, 11 Diagonal Street,
Johannesburg 2001
Date: 16/09/2002 05:57:12 PM Produced by the JSE SENS Department
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