| Mon 1 Sep 2003, 18:32 | | Preliminary Profit Announcement & Audited results |
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WILSON BAYLY HOLMES - OVCON/ Preliminary Profit Announcement & Audited results
for the year ended 30 June 2003
WILSON BAYLY HOLMES - OVCON LIMITED
Building and Civil Engineering contractors
(Registration No 1982/011014/06)
ISINcode: ZAE000009932 Share code: WBO
Preliminary Profit Announcement
Audited results for the year ended 30 June 2003
Earnings exceed R100 million for first time
Headline earnings up 26,3%
Group balance sheet
2003 2002
R"000 R"000
ASSETS
Non-current assets 373 690 355 772
Property, plant and equipment 234 302 217 338
Investments in associates 116 132 98 048
Investments and loans 11 581 8 698
Goodwill 11 675 31 688
Current assets 910 942 950 576
Inventories 28 748 27 032
Contracts in progress 505 112 556 196
Accounts receivable 90 741 75 859
Bank balances 286 341 291 489
Total assets 1 284 632 1 306 348
EQUITY AND LIABILITIES
Ordinary share capital and reserves 360 376 335 101
Non-current liabilities 52 302 52 166
Interest bearing debt 15 856 5 012
Deferred tax 36 446 47 154
Current liabilities 871 954 919 081
Short-term loans 20 043 6 773
Accounts payable and provisions 776 033 869 229
Taxation 75 878 43 079
Total equity and liabilities 1 284 632 1 306 348
Net tangible asset value per share (cents) 628 547
Group income statement
2003 % increase/ 2002
R"000 (decrease) R"000
Gross revenue 2 408 399 5,4 2 284 063
Operating income before
depreciation and amortisation 138 773 15,2 120 490
Less: Depreciation 46 227 12,4 41 137
Goodwill amortisation 28 975 8,6 26 680
Operating income 63 571 20,7 52 673
Investment income 21 852 26,8 17 232
Income before interest 85 423 22,2 69 905
Interest paid 4 311 (5,9) 4 582
Income before taxation 81 112 24,2 65 323
Taxation 27 921 9,6 25 483
Income after taxation 53 191 33,5 39 840
Income from associates 18 816 40,0 13 437
Attributable income 72 007 35,2 53 277
Add back goodwill amortisation 28 975 8,6 26 680
Headline earnings 100 982 26,3 79 957
Shares in issue (000"s) 55 491 55 491
Earnings per share (cents) 130 35,2 96
Headline earnings per
share (cents) 182 26,3 144
Statement of changes in equity
2003 2002
R"000 R"000
Capital and reserves at start of year 335 101 255 203
Retained income for year 72 007 53 277
Changes in foreign currency translation
reserve (25 646) 44 378
Repayment of share premium (21 086) (17 757)
Capital and reserves at end of year 360 376 335 101
Segment information
2003 2002
R"000 R"000
Revenue
- Local 1 644 596 1 511 427
- International 763 803 772 636
2 408 399 2 284 063
Operating income before goodwill amortisation
- Local 86 362 60 282
- International 6 184 19 071
92 546 79 353
Cash flow statement
2003 2002
R"000 R"000
Cash flow from operating activities
Operating profit before working
capital changes 119 539 143 001
Working capital changes (51 672) 31 924
Cash generated from operations 67 867 174 925
Investment income 21 852 17 232
Finance costs (4 311) (4 582)
Taxation (8 174) (19 942)
Repayment of share premium (21 086) (17 757)
Net cash inflow from operating activities 56 148 149 876
Cash flow from investing activities
Change in investments and loans (2 883) (7 276)
Acquisition of subsidiary (21 140) -
Investments in associates (18 084) 28 750
Purchase of equipment (59 706) (88 049)
Proceeds from sale of fixed assets 8 862 4 986
Net cash outflow from investing activities (92 951) (61 589)
Cash flow from financing activities
Change in net debt 22 174 (5 645)
Net cash inflow/(outflow) from financing
activities 22 174 (5 645)
Net (decrease)/increase in cash and
cash equivalents (14 629) 82 642
Cash and cash equivalents at beginning
of year 291 489 208 847
Cash acquired on acquisition of subsidiaries 9 481 -
Cash and cash equivalents at end of year 286 341 291 489
Comments
Financial review
The group has once again achieved a satisfactory growth in headline earnings
which have increased by 26,3% to 182 cents per share. This is even more
noteworthy as this result was achieved in a period during which geopolitical
uncertainties and the strengthening of the rand caused a slowdown in the
construction industry.
Turnover of R2,4 billion represents a growth rate of 5,4% for the year. As we
predicted in our interim report, growth in turnover has been moderate. Turnover
beyond the borders of South Africa has shown a slight decline from 34% of total
turnover in 2002 to 32% this year.
The group has cash and bank balances of R286 million at the year-end, a decrease
of R5 million compared to the balances at the start of the year. The reasons for
the decline are the additional working capital requirements on certain contracts
and the lower translation level of our foreign cash holdings at the year end.
Capital expenditure of R60 million was well below budget.
A successful outcome to a challenging year
The year has not been without its difficulties but despite this we have managed
to achieve an increase in operating profits, before the amortisation of
goodwill, of 16,6% compared to the previous year.
Despite difficulties on its Lesotho contract, the Roads and Earthworks division
performed well for the first half of the financial year. Unfortunately, in the
second half, problems were encountered on certain contracts in Botswana and
heavy rains caused delays on our contracts in Mozambique. As a result, the
division failed to achieve its budget for the year but nevertheless managed to
earn a respectable profit in the circumstances.
The Lesotho contract is substantially complete and there is some hope that we
may be able to settle our claims amicably before we move off site. The
division"s R350 million contract in Swaziland has been successfully completed
and handed over. In Tanzania, the initial difficulties regarding our open-cast
mining contract have been resolved. The N4 Platinum toll road contract continues
to make good progress and is due for completion towards the end of 2004.
Building contracts continue to perform well
Good results were achieved on our building contracts in all the areas of South
Africa where we operate. The International Conference Centre in Cape Town was
successfully completed and handed over ahead of time. The refurbishment of the
Reserve Bank head office in Pretoria has just been completed, and the
Constitutional Court in Braamfontein is due for completion imminently. A recent
award is the contract for the construction of the Department of Trade and
Industry campus in Pretoria worth over R400million. The contract is being
undertaken in joint venture with two empowerment companies. Work has also
started on the Sibaya Casino and Entertainment Kingdom on the KwaZulu-Natal
north coast.
The division is also engaged on a number of contracts for the platinum mines in
the Rustenburg and Polokwane areas. Contracts of a significant size were also
carried out for Sasol Gas and for the Hillside aluminium smelter extensions in
Richards Bay.
Sound growth in Australia
Probuild Constructions recorded another very satisfactory year, producing
increased profits in a competitive market. WBHO increased its stake in the
company with effect from 1July 2002.
Prospects
At R1,8 billion the order book is at a slightly lower level than normal.
However, prospects in the building industry from which we derive almost half our
turnover are starting to improve. The amount of work on offer in the civil
engineering sector, at the level at which we could be competitive, has declined,
and the period between the submission of tenders and the awards of contracts has
lengthened. Much will depend upon our success in finding replacement work at
reasonable margins, more so for the Roads and Earthworks division than the
others. There are also a number of claims on certain contracts which could be
settled in the new financial year which, if successful, could improve our
performance.
We are budgeting for a turnover at similar levels to those achieved this year,
but the quality of earnings should improve and as a result we expect to show a
real increase in headline earnings per share in 2004.
Capital repayments and dividend
For some years now the company has utilised its share premium to effect capital
repayments to its shareholders. The balance of share premium left has now
reached a level where we cannot continue this practice. The company will
therefore resume dividend payments, the first being the final dividend of 28
cents per share in respect of this year. This, together with the capital
repayment of 14 cents per share at the interim stage, will give a total payment
to shareholders for this year of 42 cents per share compared to 36 cents last
year.
Accounting policy and consistency
The accounting policies and methods of computation as disclosed in the group"s
financial statements for this year are consistent with those applied in 2002 and
comply with the South African Statements of Generally Accepted Accounting
Practice.
The group"s financial statements have been audited by BDO Spencer Steward
(Johannesburg) Inc. and they have issued an unqualified report relating thereto.
The auditors concur that the financial information set out herein is in
accordance with the audited financial statements of the group for the year ended
30 June 2003. The auditor"s report is available for inspection at the company"s
registered office.
Dividend declaration
Notice is hereby given that a final dividend of
28 cents per share in respect of the year ended
30 June 2003 has been declared payable to all
shareholders recorded in the register
of the company on Friday, 24 October 2003, the record date.
The last day to trade cum-dividend
will be Friday, 17 October 2003,
and the shares will trade ex-dividend on Monday, 20 October 2003.
Payment of the dividend will be made on Monday, 27 October 2003.
Share certificates may not be dematerialised or rematerialised between Monday,
20 October 2003 and Friday, 24 October 2003, both dates inclusive.
On behalf of the board
M.S. WYLIE
Chairman
A.J. MACKENZIE
Director
1 September 2003
Construction is our business
Date: 01/09/2003 05:30:12 PM
Produced by the JSE SENS Department
