| Mon 23 Feb 2004, 17:06 | | Unaudited interim results for the six |
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Wilson Bayly Holmes - Ovcon Limited - Unaudited interim results for the six
months ended 31 December 2003
WILSON BAYLY HOLMES - OVCON LIMITED
Building and civil engineering contractors
ISIN: ZAE000009932
Share code: WBO
(Registration No 1982/011014/06)
Unaudited interim results for the six months ended 31 December 2003
Operating income up 27%
Headline earnings up 17%
Distribution to shareholders up 21%
Income Statement
6 months 6 months Year to
% to 31 Dec 31 Dec to 30 June
increase/ 2003 2002 2003
(decrease) R"000 R"000 R"000
Turnover 0,1 1 226 062 1 225 168 2 408 399
Operating income before
depreciation and
amortisation 20,8 86 683 71 779 138 773
Less: Depreciation 4,2 21 602 20 722 46 227
Goodwill amortisation (32,9) 9 602 14 320 28 975
Operating income 51,0 55 479 36 737 63 571
Investment income (19,2) 5 192 6 430 21 852
Income before interest 40,5 60 671 43 167 85 423
Interest paid 39,3 1 944 1 395 4 311
Income before taxation 40,6 58 727 41 772 81 112
Taxation 21,8 20 263 16 633 27 921
Income after taxation 53,0 38 464 25 139 53 191
Income from
associates (3,8) 8 450 8 782 18 816
Income attributable
to shareholders 38.3 46 914 33 921 72 007
Reconciliation of
headline earnings
Income attributable
to shareholders 38.3 46 914 33 921 72 007
Add back
Goodwill amortisation (32.9) 9 602 14 320 28 975
Headline earnings 17.1 56 516 48 241 100 982
Balance Sheet
31 Dec 31 Dec 30 June
2003 2002 2003
R"000 R"000 R"000
ASSETS
Non-current assets 383 099 377 572 375 472
Property, plant and equipment 230 720 234 741 234 302
Investments in associates 119 950 108 876 116 132
Investments and loans 25 333 12 273 13 363
Goodwill 7 096 21 682 11 675
Current assets 907 703 665 387 968 475
Inventories 26 935 27 565 28 748
Contracts in progress 474 914 334 449 562 645
Accounts receivable 107 530 40 430 90 741
Bank balances 298 324 262 943 286 341
Total assets 1 290 802 1 042 959 1 343 947
EQUITY AND LIABILITIES
Ordinary share capital
and reserves 390 553 336 455 360 376
Non-current liabilities 74 789 71 460 52 302
Interest bearing debt 4 941 10 037 15 856
Deferred tax 69 848 61 423 36 446
Current liabilities 825 460 635 044 931 269
Short-term loans 20 342 11 857 20 043
Accounts payable and
provisions 759 238 581 472 835 348
Taxation 45 880 41 715 75 878
Total equity and liabilities 1 290 802 1 042 959 1 343 947
Net tangible asset value per
share (cents) 691 567 628
Cash Flow Statement
6 months 6 months Year to
to 31 Dec to 31 Dec 30 June
2003 2002 2003
R"000 R"000 R"000
Cash flows from operating
activities
Operating profit before working
capital changes 74 720 56 898 109 685
Working capital changes 5 595 (15 555) (49 890)
Cash generated from operations 80 315 41 343 59 795
Investment income 5 192 6 430 21 852
Financing costs (1 944) (1 395) (4 311)
Taxation (16 859) (6 235) (8 174)
Repayment of share premium - (13 318) (21 086)
Dividend paid (15 537) - -
Cash retained from operations 51 167 26 825 48 076
Utilised in investing activities
Change in investments (11 970) (3 575) (4 665)
Investment in associates (3 818) (10 828) (8 230)
Investment in subsidiary (1 531) (22 616) (21 140)
Purchase of fixed assets (net) (11 249) (28 598) (50 844)
Cash flow after investing
activities 22 599 (38 792) (36 803)
Cash effects of financing
activities
Change in borrowings (10 616) 103 22 174
Net change in bank and
cash balances 11 983 (38 689) (14 629)
Cash and bank balances at
start of period 286 341 291 489 291 489
Cash flow on acquisition
of subsidiary - 10 143 9 481
Cash and bank balances at end
of period 298 324 262 943 286 341
Statement of Changes in Equity
6 months 6 months Year to
to 31 Dec to 31 Dec 30 June
2003 2002 2003
R"000 R"000 R"000
Capital and reserves at
start of period 360 376 335 101 335 101
Retained income for the period 46 914 33 921 72 007
Changes in foreign currency
reserve (1 200) (19 249) (25 646)
Repayment of share premium - (13 318) (21 086)
Dividend paid (15 537) - -
Capital and reserves at
end of period 390 553 336 455 360 376
Notes and Additional Information
31 Dec 31 Dec 30 June
2003 2002 2003
R"000 R"000 R"000
1. Segmental results
Turnover
Local 947 869 838 683 1 644 596
International 278 193 386 485 763 803
1 226 062 1 225 168 2 408 399
Operating income before
depreciation and amortisation
Local 43 689 36 291 86 321
International 21 392 14 766 6 225
65 081 51 057 92 546
Results at the interim period
are not seasonally influenced
2. Contingent liabilities
Guarantees issued 485 498 554 030 478 462
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 2003.
These condensed statements fairly represent, in all material respects, the South
African Statement of Generally Accepted Accounting Practice on Interim Financial
Reporting.
COMMENTS
At the midway stage the group is on track to achieve another successful year of
real growth in 2004.
Headline earnings have increased by 15 cents to 102 cents per share, an increase
of 17%.
Turnover has remained static largely due to a decline in work carried out by the
roads and earthworks division whereas the construction division recorded a
compensatory increase. Despite this, the roads and earthworks division has
achieved a much improved performance and this has largely brought about the
increase in operating margins from 4,2% in the comparative period to 5,3% for
the current six months.
The volume of work carried out beyond the borders of South Africa has further
declined and now represents 23% of total turnover. Again, because of the
improved performance of the roads and earthworks division operating income from
contracts outside South Africa has improved from 29% to 33% of the total.
Management is aware of the risks involved in tendering for major works
overborder and has tailored its strategy accordingly.
The order book at R2,2 billion is R300 million higher than the figure at the end
of June 2003. Cash balances at year-end stood at R298 million, an increase of
R12 million since June 2003. The group"s gearing is negligible.
The roads division is in line to be awarded a number of large road and
infrastructural contracts both in and outside South Africa. The undue delay in
awarding these contracts is frustrating but the division has managed to keep its
crews busy on a number of smaller earthworks and roads contracts in the
Republic. Work on the N4 Platinum toll road contract is in its final stages and
our road contract in Lesotho is complete but at this stage the final account has
not been settled. The contract for the rehabilitation of the N1 at Colesberg is
making good progress and is due for completion in August 2004.
The R200 million contract for the installation of a sewerage network for the
town of Tonota in Botswana is performing better than expected but could be
affected, on currency translation, by the recent devaluation of the Botswana
Pula. However, despite this, the contract is expected to remain profitable.
The surface mining contract in Tanzania is performing according to budget and in
Mozambique, the company has been awarded a contract for works at the Maputo
harbour worth R50 million.
The number of contracts for reinforced concrete civil work coming out to tender
has been disappointing but fortunately the slack has been taken up by a number
of new building contracts awarded during the period. This has resulted in the
construction division achieving a higher level of turnover than the comparative
period but margins have shown a slight decline because of the change in mix of
work.
In Gauteng work has started on the construction of the Clearwater Mall in
Roodepoort, a 14-month contract worth R290 million as well as on the prestigious
Bowman Gilfillan office block in the Sandton CBD. We will shortly commence work
on the construction of the village at the Oubaai Golf Estate and the first phase
is expected to be worth R60 million. The division has also been awarded a
contract for the construction of a shopping centre near Malelane worth R50
million. The DTI office campus contract is also making good progress and is due
for completion in June this year. The construction programme is onerous with
work to the value of R400 million required to be completed within a period of 17
months but the target completion dates should be achieved.
The Western Cape has been particularly busy during the period. The awards of the
Capegate regional shopping centre contract worth R256 million as well as a
smaller centre, "The Paddocks" in Milnerton worth R50 million have provided more
than sufficient work for the crews coming off the International Convention
Centre contract. The two apartment block contracts in Clifton have experienced
mixed fortunes, one has been successfully completed but work on the other has
been delayed by unexpectedly difficult ground conditions.
In KwaZulu-Natal good progress is being made on the Sibaya Casino and
Entertainment Kingdom which is due for completion in October 2004.
The Eastern Cape has also been busy and there is a fair amount of building work
on offer, particularly in Port Elizabeth.
The recent acquisition of Suncon (Pty) Limited in Botswana has proved to be a
success and turnover is expected to almost double in our second year of
ownership.
Our associate company in Australia, Probuild Constructions achieved a slight
increase in profits compared to the previous period, but the strengthening of
the Rand resulted in a decrease in earnings of 11% over the period in Rand
terms.
Our chairman, Mike Wylie, is playing an active role in the initiative to
establish a BEE charter for the construction industry and significant progress
has been achieved in this half year.
Prospects
In our annual report for the year ended 30 June 2003 we stated that the group
should achieve a real increase in headline earnings for the 2004 year. At this
stage we see no reason why we should change that view.
Dividend declaration
Notice is hereby given that an interim dividend of 17 cents per share in respect
of the year ended 30 June 2004 has been declared payable to all shareholders
recorded in the register of the company on Friday, 23 April 2004, the record
date. The last day to trade cum-dividend will be Friday, 16 April 2004 and the
shares will trade ex-dividend on Monday, 19 April 2004. Payment of the dividend
will be made on Monday, 26 April 2004. Share certificates may not be
dematerialised or rematerialised between Monday, 19 April 2004 and Friday, 23
April 2004 both days inclusive.
On behalf of the board
M S WYLIE
Chairman
A J MACKENZIE
Director
23 February 2004
Date: 23/02/2004 04:47:33 PM Produced by the JSE SENS Department
