| Mon 24 Feb 2003, 16:34 | | WILSON BAYLY HOLMES - OVCON LIMITED - UNAUDITED IN |
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WILSON BAYLY HOLMES - OVCON LIMITED
(Registration No 1982/011014/06)
Building and civil engineering contractors
ISIN No: ZAE000009932
Share code: WBO
Operating income up 17,5%
Headline earnings up 30%
Real growth achieved
Income Statement
6 months to 6 months to Year to
% 31 Dec 31 Dec 30 June
increase/ 2002 2001 2002
(decrease)R`000 R`000 R`000
Turnover 13,8 1 225 168 1 076 789 2 284 063
Operating income before
depreciation and
amortisation 14,9 71 779 62 494 120 489
Less: Depreciation 20 722 18 705 41 136
Goodwill
amortisation 14 320 12 513 26 680
Operating income 17,5 36 737 31 276 52 673
Investment income 6 430 5 435 17 232
Income before interest 43 167 36 711 69 905
Interest paid 1 395 3 772 4 582
Income before taxation 26,8 41 772 32 939 65 323
Taxation 25,2 16 633 13 290 25 483
Income after taxation 27,9 25 139 19 649 39 840
Income from associates 8 782 4 945 13 437
Attributable income 37,9 33 921 24 594 53 277
Add back goodwill
amortisation 14 320 12 513 26 680
Headline earnings 30,0 48 241 37 107 79 957
Shares in issue (`000,s) 55 491 55 491 55 491
Earnings per share
(cents) 61,1 44,3 96,0
Headline earnings
per share (cents) 30,0 86,9 66,8 144,0
Cash Flow Statement
6 months to 6 months to Year to
31 Dec 31 Dec 30 June
2002 2001 2002
R`000 R`000 R`000
Cash flows from
operating activities
Operating profit before
working capital changes 56 898 87 363 143 001
Working capital changes (15 555) (79 963) 31 924
Cash generated from
operations 41 343 7 400 174 925
Investment income 6 430 5 435 17 232
Financing costs (1 395) (3 772) (4 582)
Taxation (6 235) - (19 942)
Repayment of share
premium (13 318) (11 098) (17 757)
Cash retained from
operations 26 825 (2 035) 149 876
Utilised in investing
activities
Change in investments (3 575) (4 298) (7 276)
Investment in associates (10 828) (10 208) 28 750
Investment in subsidiary (22 616) - -
Purchase of fixed
assets (net) (28 598) (29 468) (83 063)
Cash flow after investing
activities (38 792) (46 009) 88 287
Cash effects of financing activities
Change in borrowings 103 (2 785) (5 645)
Net change in bank and
cash balances (38 689) (48 794) 82 642
Cash and bank balances
at start of period 291 489 208 847 208 847
Cash flow on acquisition
of subsidiary 10 143 - -
Cash and bank balances
at end of period 262 943 160 053 291 489
Statement of Changes in Equity
6 months to 6 months to Year to
31 Dec 31 Dec 30 June
2002 2001 2002
R`000 R`000 R`000
Capital and reserves at
start of period 335 101 255 203 255 203
Retained income for
the period 33 921 24 594 53 277
Changes in foreign
currency reserve (19 249) 20 012 44 378
Repayment of share premium (13 318) (11 098) (17 757)
Capital and reserves at
end of period 336 455 288 711 335 101
Group Balance Sheet
31 Dec 31 Dec 30 June
2002 2001 2002
R`000 R`000 R`000
ASSETS
Non-current assets 377 572 345 879 355 772
Property, plant and
equipment 234 741 186 976 217 338
Investments in
associates 108 876 113 995 98 048
Investments and loans 12 273 5 720 8 698
Goodwill 21 682 39 188 31 688
Current assets 665 387 554 808 822 766
Inventories 27 565 18 371 27 032
Contracts in progress 334 449 328 283 428 386
Accounts receivable 40 430 48 101 75 859
Bank balances 262 943 160 053 291 489
Total assets 1 042 959 900 687 1 178 538
EQUITY AND LIABILITIES
Ordinary share capital
and reserves 336 455 288 711 335 101
Non-current liabilities 71 460 72 828 60 095
Interest bearing debt 10 037 4 613 12 941
Deferred tax 61 423 68 215 47 154
Current liabilities 635 044 539 148 783 342
Short-term loans 11 857 10 032 6 773
Accounts payable and
provisions 581 472 499 349 733 490
Taxation 41 715 29 767 43 079
Total equity and
liabilities 1 042 959 900 687 1 178 538
Net tangible asset
value per share (cents) 567 450 547
Notes and Additional Information
31 Dec 31 Dec 30 June
2002 2001 2002
R`000 R`000 R`000
1. Segmental results
Turnover
Local 838 683 679 500 1 511 427
International 386 485 397 289 772 636
1 225 168 1 076 789 2 284 063
Operating income
Local 36 291 29 666 60 282
International 14 766 14 123 19 071
51 057 43 789 79 353
Results at the interim
period are not seasonally
influenced
2. Contingent liabilities
Guarantees issued 554 030 349 506 423 280
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 2002.
These condensed statements fairly represent, in all material respects, the
Statement of Generally Accepted Accounting Practice on Interim Financial
Reporting.
WBHO
Construction is Our Business
COMMENTS
We are pleased to report that for the six months ended 31 December 2002 headline
earnings have increased by 30% compared to the same period last year.
After a substantial increase in turnover in 2002 (34%), the group has entered
into a period of consolidation and turnover for the year ended 30 June 2003 is
expected to be at much the same level as that achieved in the previous year.
Delays in the awards of certain foreign contracts and the strengthening of the
rand have also affected turnover growth.
The operating income margin has shown a slight increase from 4,07% to 4,17%
during the period but is expected to be well above the comparative figure at the
end of the financial year. Fluctuations in margin levels are related to the mix
of work undertaken by the group as well as the state of completion of certain
large contracts presently in progress and can vary significantly from one period
to another.
Earnings from associate companies have shown a substantial increase largely due
to the increased stake in Probuild Constructions (Aust.) Pty Ltd which took
effect from 1 July 2002. In addition, the company traded at a higher level of
profitability during the period.
The number of building contracts has remained steady during the period with new
contracts being awarded at Eskom`s Megawatt Park offices, the Midlands Mall
regional shopping centre in Pietermaritzburg and a distribution centre for
Nestle in Modderfontein. Work on the International Conference Centre in Cape
Town is coming to a close but work on the Constitutional Court in Braamfontein
will continue beyond this financial year. Work on the extensions to the Reserve
Bank head office in Pretoria is progressing reasonably well and is expected to
be complete early in the new financial year. The client of the group`s joint
venture contract for the construction of the Namiwawa hotel in Blantyre, Malawi
has experienced payment problems and we have placed a hold on any further
building activity until the problem is satisfactorily resolved.
During the period the group acquired Suncon (Pty) Ltd, a medium-sized building
company, with a solid reputation, operating in Botswana. We believe that this
acquisition will enable us to establish a greater foothold in the building
sector in this country. The company has also acquired a minority stake in
Capital Africa Services Ltd, an investment holding company with an interest in
one company manufacturing reinforcing mesh and in another manufacturing rock
anchors, primarily for the mining industry. These are both greenfield ventures
and should make worthwhile contributions to the bottom line in the future.
Mining infrastructure and other heavy concrete works continue to provide a
useful source of work. Contracts continue to flow from the platinum mines in the
Rustenburg and Pietersburg areas and the division is also involved in contracts
for the additions to the Hillside Aluminium smelter in Richards Bay as well as
for Sasol Gas.
The roads and earthworks division continues to perform well despite problems on
its contract in Lesotho due to changes in the scope of work and delays in
granting access to certain sections. This contract is now expected to be
completed in November this year and we believe adequate provisions have been
made to cater for any losses likely to be incurred on the contract. We have
submitted substantial claims but no reliance will be made on these until they
have been settled. On the other hand, a dispute in connection with a contract in
Botswana was satisfactorily resolved during the period. The division continues
to be active in practically all the neighbouring countries and is particularly
busy in Botswana where the group has just been awarded a sanitation services
contract at Tonata worth R210 million. In South Africa work has started on the
R100 million road rehabilitation contract near Colesberg and work on the N4
Platinum Corridor toll road project, in which the company is a joint venture
partner, is also making good progress.
Cash flow during the period has been adversely affected by additional working
capital requirements on certain contracts as well as funding the cost of the
investments referred to above. Capital expenditure for the period amounted to
R28,6 million.
Prospects
We have managed to maintain our order book at the R2 billion level and the group
still expects to achieve real growth in headline earnings per share for the year
to 30 June 2003.
Distribution of share premium in lieu of an interim dividend. The directors of
WBHO have proposed a cash distribution, by way of a reduction of share premium,
of 14 cents per ordinary share for the six months ended 31 December 2002 ("the
distribution"), subject to the approval of shareholders at the General Meeting
to be held on Friday, 28 February 2003.
The last day to trade cum the distribution is Friday, 4 April 2003. Shares will
commence trading ex the distribution from Monday, 7 April 2003. The distribution
is payable to all shareholders of WBHO recorded in the register of the company
at the close of business on Friday, 11 April 2003. Payment will be made on
Monday, 14 April 2003. Share certificates may not be dematerialised or
rematerialised between Monday, 7 April 2003 and Friday,
11 April 2003, both days inclusive. A circular giving formal notice of the
meeting was posted to shareholders on 12 February 2003.
On behalf of the board
M S WYLIE A J MACKENZIE
Chairman Director
24 February 2003
Date: 24/02/2003 04:00:03 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
