| Tue 14 Sep 2004, 8:54 | | Report For The Six Months Ended 30 June 2004 |
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Cementation - Interim Report For The Six Months Ended 30 June 2004
The Cementation Company (Africa) Limited
(Incorporated in the Republic of South Africa)
(Registration number 1926/008840/06)
Share code CMT/CMTP ISIN ZAE000001582 / ZAE000001590
(`Cementation` or `the Group`)
INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2004
CONDENSED CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
six months six months year
to June to June to December
2004 2003 2003
R`000 R`000 R`000
Turnover 698 242 603 710 1 296 292
Cost of sales 659 083 571 528 1 240 866
Gross profit for period 39 159 32 182 55 426
Other operating (expense) income (1 053) (53) 2 695
Forex loss (1 233) (621) (3 864)
Other 180 568 6 559
Admistrative expenses (16 477) (14 696) (34 409)
Net profit from operations 21 629 17 433 23 712
Net finance cost (823) (1 463) (3 357)
Net profit before taxation 20 806 15 970 20 355
Taxation (7 243) (4 816) (3 680)
Net profit for period 13 563 11 154 16 675
CONDENSED CASH FLOW STATEMENT
Unaudited Unaudited Audited
six months six months year
to June to June to December
2004 2003 2003
R`000 R`000 R`000
Cash flows from operating
activities 16 099 (67 680) 32 355
Cash flows from investing
activities (38 851) (21 662) (52 670)
Cash flows from financing
activities 1 057 4 900 7 354
Net change in cash and cash
equivalents (21 695) (84 442) (12 961)
Cash and cash equivalents at
beginning of period 30 222 43 183 43 183
Cash and cash equivalents at end
of period 8 527 (41 259) 30 222
At June At June At December
2004 2003 2003
R`000 R`000 R`000
Number of ordinary shares in issue -
000 18 952 18 952 18 952
Net asset value per ordinary share -
cents 589.1 487.4 517.6
Attributable earnings per ordinary
share - cents 71.6 58.9 87.9
Headline earnings per ordinary share
(before exceptional items) - cents 71.6 58.9 101.8
Dividends per ordinary share - no
dividend was declared
Capital expenditure 40 236 22 362 56 212
Depreciation 25 660 20 279 46 063
Capital expenditure committed or
authorised 18 492 35 941 26 486
CONDENSED BALANCE SHEET
At June At June At December
2004 2003 2003
R`000 R`000 R`000
ASSETS
Non-current assets 109 984 95 306 96 973
Current assets 313 978 230 183 262 479
Inventories 33 260 25 605 27 606
Trade and other receivables 257 838 204 578 194 720
Cash and cash equivalents 22 880 - 40 153
Total assets 423 962 325 489 359 452
EQUITY AND LIABILITIES
Capital and reserves 111 939 92 678 98 385
Ordinary share capital and premium 40 076 40 076 40 076
Cumulative preference share capital
and premium 300 300 300
Non-distributable reserves 848 3 424 1 302
Accumulated profits 70 715 48 878 56 707
Non-current liabilities 20 411 10 779 19 636
Interest bearing borrowings 12 716 9 205 11 659
Deferred taxation 7 695 1 574 7 977
Current liabilities 291 612 222 032 241 431
Trade and other payable 268 436 178 379 224 450
Provisions 2 394 5 670
Short-term borrowings 14 353 41 259 9 931
Tax payable 8 823 - 1 380
Total equity and liabilities 423 962 325 489 359 452
CONDENSED STATEMENT OF CHANGES IN EQUITY
Ordinary Preference
share share Share
capital capital premium
R`000 R`000 R`000
Balance at 30 June 2003 9 476 300 30 600
Net profit for the period
Revaluation of property
Transfer to accumulated profits
Preference dividends
Balance at 31 December 2003 9 476 300 30 600
Net profit for the period
Transfer from non-distributable
reserves
Preference dividends
Balance at 30 June 2004 9 476 300 30 600
Non- Accu-
distri- mulated
butable profit/
reserves (loss) Total
R`000 R`000 R`000
Balance at 30 June 2003 3 424 48 878 92 678
Net profit for the period 5 521 5 521
Revaluation of property 195 195
Transfer to accumulated profits ( 2 317) 2 317 -
Preference dividends (9) (9)
Balance at 31 December 2003 1 302 56 707 98 385
Net profit for the period 13 563 13 563
Transfer from non-distributable
reserves (454) 454 -
Preference dividends (9) (9)
Balance at 30 June 2004 848 70 715 111 939
ACCOUNTING POLICIES
The financial statements are prepared on the historical cost basis and in
accordance with South African Statements of Generally Accepted Accounting
Practice. The accounting policies are, in all material respects, consistent with
the annual financial statements for the year ended 31 December 2003.
COMMENTARY
Revenue for the period increased by 15,6% to R698,2 million (2003: R603,7
million). Operating profit for the period increased to R21,6 million (2003:
R17,4 million), at an operating margin of 3,1% (2003: 2,9%). Operating profits
were enhanced by an exceptional profit of R5,9 million following the
finalisation of contracts and the closure of the Construction Division in
Durban.
Headline earnings per share of 71,6 cents were achieved, which is 21,6% up on
the comparative period.
Improved cash flows are reflected in a positive cash flow from operating
activities of R16,1 million achieved against an outflow of R67,7 million for the
comparative period. Despite an outflow from investing activities, the improved
cash flow has contributed to a reduction in overall borrowings of the business.
Performance
The strength of the Rand has continued to have a negative impact on our major
clients as reflected in the delay of new capital projects. While this has
impacted new orders, the Group has maintained a satisfactory order book of R1,4
billion (2002: R1,8 billion). Management will continue to focus on operational
control and efficiencies, which should continue to improve delivery and overall
business performance.
Majority shareholder
Murray & Roberts Limited (Murray & Roberts), a wholly-owned subsidiary of Murray
& Roberts Holdings Limited has, with effect from 22 July 2004 acquired Skanska
Cementation International Holdings Limited`s interest in Cementation.
Minority shareholders have been advised that an offer will be made for their
shares and that on approval by the requisite majority of minority shareholders,
an application will be made to terminate Cementation`s listing on the JSE
Securities Exchange South Africa.
Outlook and prospects
The focus will continue to be on mining industry opportunities in sub-Saharan
Africa with an emphasis on improved safety performance, quality delivery and
turnaround of underperforming contracts.
The directors expect that headline earnings for the full year to December 2004
will represent a substantial improvement on the low base of the previous year.
The directors expect that, in achieving a substantially improved result, certain
outstanding contractual uncertainties will be resolved.
No adjustment has been made for these items in the current period results.
DIVIDENDS
Preference
Notice is hereby given that the board has declared the following preference
dividend to be paid on Monday, 11 October 2004.
Dividend number 66 of 6 cents per 6% cumulative preference share, for the six
months ended 30 June 2004.
To comply with the procedures of STRATE, the last day to trade in Cementation
preference shares in order to receive the preference dividends is Friday, 1
October 2004. The preference shares will commence trading ex-dividend from
Monday, 4 October 2004 and the record date will be Friday, 8 October 2004.
Holders of certificated preference shares may not dematerialise their shares
between Monday, 4 October 2004 and Friday, 8 October 2004, inclusive.
Ordinary
The directors have agreed not to declare an ordinary dividend. The board
continues to review the dividend policy on a regular basis.
DIRECTORATE
Messrs D G Fison, S Keeble and G Hancock resigned as directors effective 22 July
2004 following the disposal by Skanska AB of its 79,1% shareholding in the
Group. Messrs B C Bruce, R W Rees and S J Flanagan of Murray & Roberts were
appointed to the board on 22 July 2004.
For and on behalf of the board
B R van Rooyen (Chairman)
B J Hancock (Financial Director)
14 September 2004
Executive Directors: A A B Douglas, B J Hancock
Non-executive Directors: B C Bruce, R W Rees, S J Flanagan
Independent non-executive Directors: T J Motlatsi, B R van Rooyen
Company Secretary: B J Hancock
Date: 14/09/2004 07:00:11 AM
Produced by the JSE SENS Department
