| Fri 27 Sep 2002, 18:16 | | Sallies Limited - Audited Results For The Year En |
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Sallies Limited - Audited Results For The Year Ended 30 June 2002
Sallies Limited
(Incorporated in the Republic of South Africa)
(Registration number 1903/001879/06)
JSE Share code: SAL ISIN: ZAE000022588
("the group" or "the company")
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2002
HIGHLIGHTS
15,7% increase in revenue
50,4% increase in profit before tax
20,0% increase diluted headline earnings per share
CONSOLIDATED INCOME STATEMENTS
Year ended Year ended
30 June 2002 30 June 2001
Audited Audited %
R`000 R`000 Change
Revenue - Mining 114 115 99 031
* Continued operations 113 510 98 101 15,7
* Discontinued operations 605 930
Cost of sales (89 152) (77 897)
* Continued operations 87 070 75 200
* Discontinued operations 2 082 2 697
Profit from mining operations 24 963 21 134
* Continued operations 26 440 22 901 15,5
* Discontinued operations (1 477) (1 767)
Less:
Administrative expenses (11 516) (8 768)
Amortisation of goodwill (628) (1 020)
Amortisation of mineral rights (1 966) (2 053)
Net finance costs (1 060) (2 896)
Net foreign exchange profit/(loss) 2 287 (2 138)
Profit on disposal of subsidiary - 283
Impairment of property, plant
and equipment (5 101) -
Loss on disposal of property, plant
and equipment (322) (116)
Net profit before taxation 6 657 4 426 50,4
Taxation
- normal (3 550) (779)
- deferred 1 488 537
Net profit for year 4 595 4 184 9,8
Included in the above is
depreciation of: (2 639) (2 173)
Earnings per share
Issued shares (number) 92 294 454 92 294 454
Weighted undiluted average
shares issued (number) 92 294 454 66 017 034
Weighted average shares issued
for diluted earnings per
share (number) 99 133 906 101 284 054
Reconciliation of earnings:
Net profit attributable to
shareholders for basic earnings
per share 4 595 4 184
Amortisation of goodwill 628 1 020
Deferred tax on amortised goodwill (628) (656)
Non-recurring expenditure (net of tax) 260 -
Loss on disposal of assets (net of tax) 225 81
Loss on discontinued operations (net of tax) 1 112 1 566
Impairment loss (net of tax) 3 571 -
Surplus on disposal of subsidiary (283)
Net profit attributable to shareholders
for headline earnings per share 9 763 5 912
Depreciation, (net of tax) 1 841 1 521
Amortisation of mineral rights 1 966 2 053
Adjusted cash earnings attributable
to shareholders for cash earnings
per share 13 570 9 486
Income adjustment for diluted
earnings per share 315 2 664
Diluted earnings 13 885 12 150
Earnings per share
Basic
- undiluted (cents) 5,0 6,3 (20,6)
- diluted (cents) 5,0 6,8 (26,5)
Headline
- undiluted (cents) 10,6 9,0 17,8
- diluted (cents) 10,2 8,5 20,0
Cash earnings per share
- undiluted (cents) 14,7 14,4 2,1
- diluted (cents) 14,0 12,0 16,7
CONSOLIDATED BALANCE SHEETS
Year ended Year ended
30 June 2002 30 June 2001
Audited Audited
R`000 R`000
EQUITY AND LIABILITIES
Capital and reserves 62 242 57 647
Share capital and premium 54 045 54 045
Retained income 8 197 3 602
Non-current liabilities 16 776 26 787
Long-term loan 269 8 848
Provision for environmental rehabilitation 993 937
Deferred taxation 15 514 17 002
Current liabilities 38 165 23 980
Accounts payable 18 252 13 523
Bank overdraft 7 457 -
Current portion of long-term liabilities 12 456 10 457
Total equity and liabilities 117 183 108 414
ASSETS
Non-current assets 67 390 74 554
Property, plant and equipment 55 321 61 857
Goodwill 12 069 12 697
Current assets 49 793 33 860
Inventories 13 524 8 652
Accounts receivable 35 368 15 088
Taxation prepaid 18 910
Cash and cash equivalents 883 9 210
Total assets 117 183 108 414
Net asset value per issued share
at year end (cents) 67,4 62,5
CONSOLIDATED CASH FLOW STATEMENTS
Year ended Year ended
30 June 2002 30 June 2001
Audited Audited
R`000 R`000
Net (outflow)/cash inflow
From operating activities (823) 24 982
Cash generated by operations 2 895 30 466
Finance cost (1 526) (3 371)
Investment income 466 475
Normal taxation paid (2 658) (2 588)
Net cash outflow from investment activities (3 494) (7 783)
Additions to mine plant, equipment and buildings (5 991) (8 903)
Additions to office furniture and equipment (104) (96)
Proceeds from disposal of office furniture
and equipment 2 933
Proceeds from disposal of mining plant and
Equipment 2 599 -
Proceeds from disposal of subsidiary - 283
Net cash outflow from financing activities (11 467) (10 105)
Proceeds from issue of ordinary shares - 12 012
Long-term loan
- raised 1 014 -
- repaid (12 481) (22 117)
Net (decrease)/increase in cash and cash
equivalents (15 784) 7 094
Cash and cash equivalents at beginning of year 9 210 2 116
Cash and cash equivalents at end of year (6 574) 9 210
Year ended Year ended %
30 June 2002 30 June 2001 Change
Acid grade fluorspar concentrate
Ore mined tonne 1 270 326 1 220 386 4,1
Stripping ratio per tonne ore 0,68 0,54 25,9
Ore milled tonne 989 561 1 055 661 (6,3)
Head grade percentage 14,91 13,69 1,2
Production tonne 109 984 112 391 (2,1)
Sales volume tonne 102 574 109 310 (6,2)
Average selling price Rand/tonne 1 034,38 840,89 23,0
Average export/sales price
USD/tonne 107,83 112,16 (3,9)
Average exchange rate Rand/USD 9,81 7,67 27,9
Average export sales price
Rand/tonne 1 057,28 860,27 22,9
Average cost of exports
Rand/tonne 820,97 663,45 23,7
Average local sales price
Rand/tonne 805,82 657,10 22,6
Average cost of local product
Rand/tonne 710,24 517,73 37,2
Metalurgical grade fluorspar concentrate
Production tonne 12 146 11 753 3,3
Sales volume tonne 13 003 13 027 (0,2)
Average selling price Rand/tonne 530,21 454,05 16,8
Average cost of production
Rand/tonne 469,72 430,42 9,1
Aggregate
Production tonne - 63 977 (100)
Sales volume tonne 21 692 42 797 (49,3)
Average selling price Rand/tonne 27,91 21,73 28,4
Average cost of aggregate
Rand/tonne 40,00 49,67 (19,5)
Agricultural lime
Sales Volume tonne 62 869 42 649 47,4
Average selling price Rand/tonne 8,06 6,28 28,3
Other
Employment number 144 182 (20,9)
Staff turnover percentage 8,7 10 (1,3)
Safety rating stars - 5
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Retained
capital premium income Total
R000 R000 R000 R000
Balance at 1 July 2000 64 42 020 (582) 41 502
Issue of shares 28 11 984 12 012
Share issue and listing expenses (51) (51)
Net income for year 4 184 4 184
Balance at 30 June 2001 92 53 953 3 602 57 647
Net income for the year 4 595 4 595
Balance at 30 June 2002 92 53 953 8 197 62 242
COMMENTARY
Overview
The results for the year ended 30 June 2002 improved from those of the
previous year with growth of 20,0 per cent in diluted headline earnings per
share. The results were positively impacted by the fluctuating Rand to US Dollar
("USD") exchange rate and negatively by the lower than budgeted production and
sales volumes.
The year under review saw changes in the management team at the Mine and
improvements to the processing plant making it more flexible to cope with the
various ore types. These changes coupled with a plant upgrade, planned for
completion within the first six months of the 2003 financial year, should augur
well for operational performance of the mine.
Production
Acid grade Fluorspar concentrate production was marginally lower than that of
the previous year and was mainly as a result of lower recoveries.
The cost of export production increased by 23,7 per cent mainly as a result of:
- the increase in the cost of fuel;
- the weakening of the Rand;
- change in the nature of ore being processed leading to materially higher
reagent consumption;
- reduced recoveries; and
- high maintenance costs on an ageing plant resulting in lower production
levels.
Metallurgical grade fluorspar concentrate is purchased from a competitor,
dried and briquetted, for sale into the local market. The cost per tonne
increased by 9,1 per cent mainly due to increases in the purchase price of fuel,
gas and transport. These operations are under review.
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 Fluorspar Mine. Income from this source was from the sale of
crushed aggregate stockpiles whilst costs for using the crusher continued until
May 2002.
Sales
Acid grade fluorspar concentrate sales volumes were 6,2 per cent down
compared with 2001 financial year. This was due to lower production levels and
lower demand from customers during the second half of the year. The decrease in
the USD price and volumes was, however, more than compensated for by the Rand
depreciation against the USD.
Metallurgical grade fluorspar volumes were marginally down due to lower demand,
whilst prices increased by 16,8 per cent above those of the previous year.
Agricultural lime sales remain dependent on farming circumstances. The Group
is still investigating alternative commercial uses for its substantial dolomitic
lime tailings, which could result in new avenues of production and revenues.
Mineral resources
During the year under review a total reassessment of the Witkop Fluorspar
Mine`s mineral resources was undertaken. This indicated that by taking the
proposed ore blend into account, Witkop Fluorspar Mine has measured reserves
adequate for 15 years at current Mine production levels of 1,3 million tonne per
annum. Large unexplored inferred reserves exist in close proximity of the plant.
Capital expenditure
Capital expenditure during the year under review amounted to R6,1 million and
relates mainly to the construction of a new haul road to the Buffelshoek
deposits and the acquisition of a XRF analysing machine.
Future capital expenditure of R4,6 million to upgrade the current crushing
facility and certain areas of the process plant has been approved, which should
result in a significant improvement in efficiencies.
Accounting policies
The group`s accounting policies conform to South African Statements of
Generally Accepted Accounting Practice. These policies are consistent with those
applied in the previous year.
Auditors report
Ernst & Young have audited the group annual financial statements. Their
unqualified audit report is available for inspection at the company`s registered
office.
Profit warning
The second half results for 2002 were disappointing due to the lower USD
price, the strengthening of the Rand against the USD and the effects of the
depreciating Rand filtering through costs, coupled with lower than anticipated
production levels. These conditions are expected to continue for the first six
months of the 2003 financial year, whilst production volumes are expected to
increase subsequent to the planned plant upgrade.
Financial results for the first six months are therefore expected to be
significantly lower than those of the previous year`s corresponding period.
Expiry of Dispossessed Members Fund
Sallies Limited would like to advise all shareholders to dematerialise their
shares and surrender all share certificates to their Central Securities
Depository Participant bank or broker prior to 29 September 2002.
On behalf of the Board
M J Tuite
Chairman
Johannesburg
29 September 2002
Registered office:
KPMG Services (Pty) Limited, 1226 Schoeman Street, Pretoria
(PO Box 11265, Hatfield, 0028)
Transfer secretaries:
Computershare Investor Services Limited,
70 Marshall Street, Johannesburg
(PO Box 61051, Marshalltown, 2107)
Directors:
M J Tuite* (Chairman), P H De Villiers (Managing Director),
O R Dix, J H Slade ** and L J Woolcock*
*Australian ** British
Date: 27/09/2002 05:54:00 PM Produced by the JSE SENS Department
