| Wed 29 Sep 2004, 12:18 | | RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2004 |
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Basil Read Holdings Limited - Unaudited Results For The Six Months Ended 30 June
2004
BASIL READ HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1984/007758/07)
Share code: BSR ISIN: ZAE000029781
(`the Company`)
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2004
SUMMARISED CONSOLIDATED INCOME
STATEMENT Unaudited Unaudited Audited
six months six months 12 months
30 June 30 June 31 December
2004 2003 2003
R`000 R`000 R`000
Revenue 207 342 294 602 540 674
Contract (loss)/profit for the
period (37 565) 12 600 10 440
Profit on sale of unlisted
investment - - 28 412
Dividends received - 780 1 007
Net finance (costs)/income (2 548) (5 704) 14 109
(Loss)/profit for the period
after net finance (costs)/income (40 113) 7 676 53 968
Losses from associates (1 551) (2 096) (3 261)
(Loss)/profit for the period
before taxation (41 664) 5 580 50 707
Taxation (5 510) (2 382) (10 597)
Normal and foreign taxation - (2 382) (3 190)
Secondary Taxation on Companies (5 510) - -
Deferred taxation - - (7 407)
(Loss)/profit for the period
after taxation (47 174) 3 198 40 110
Minority interests (723) 290 219
Net (loss)/profit for the period (47 897) 3 488 40 329
Depreciation for the period
(R`000) 16 745 16 262 36 291
Number of shares in issue (`000) 55 100 55 100 55 100
Ordinary dividends per share
(cents) 80,00 - -
(Loss)/earnings per share (cents) (86,93) 6,33 73,19
Headline (loss)/earnings per
share (cents) (91,68) 4,55 18,08
Fully diluted (loss)/earnings per
share (cents) (82,79) 6,03 69,71
Fully diluted headline
(loss)/earnings per share (cents) (87,31) 4,33 17,22
Reconciliation of basic earnings
to headline earnings
Basic earnings (47 897) 3 488 40 329
Adjusted by - Profit on sale of
property, plant and equipment (2 617) (980) (3 981)
Profit on sale of unlisted
investment - - (26 385)
Headline earnings (50 514) 2 508 9 963
Reconciliation between weighted
average number of shares and
diluted average number of shares
Weighted average number of shares 55 100 55 100 55 100
Adjusted by - Share Incentive
Scheme 2 755 2 755 2 755
Diluted average number of shares 57 855 57 855 57 855
SUMMARISED CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
six months six months 12 months
30 June 30 June 31 December
2004 2003 2003
R`000 R`000 R`000
ASSETS
Non-current assets 141 985 199 991 160 851
Property, plant and equipment 113 740 124 528 126 072
Investment property 2 516 2 516 2 516
Investments 180 47 503 180
Investments in associates 11 501 3 989 18 035
Deferred taxation 14 048 21 455 14 048
Current assets 149 721 215 579 188 720
Inventories 916 1 523 923
Trade and receivables 117 996 174 511 103 600
Cash and cash equivalents 30 809 39 545 84 197
291 706 415 570 349 571
EQUITY AND LIABILITIES
Capital and reserves 133 64 567 90 713
Issued capital 58 264 58 264 58 264
Accumulated loss (62 199) (7 063) 29 778
Other reserves 4 068 13 366 2 671
Minority interests - (795) (723)
Non-current liabilities
Interest bearing borrowings 6 702 88 188 12 098
Current liabilities 284 871 263 610 247 483
Trade and accounts payable 156 504 152 664 145 768
Provisions 9 596 13 993 8 103
Current portion of interest
bearing borrowings 45 271 96 953 93 612
Bank overdraft 73 500 - -
291 706 415 570 349 571
Net asset value per share (cents) 0,24 117,18 164,63
Capital expenditure for the
period (R`000) 8 178 23 881 47 838
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
six months six months 12 months
30 June 30 June 31 December
2004 2003 2003
R`000 R`000 R`000
Net cash (utilised)/generated by
operations after working capital
adjustments (24 200) 4 077 (12 904)
Taxation (paid)/refunded (5 510) 9 054 5 034
Dividends (paid)/received (44 080) 780 1 007
Net finance (costs)/income (2 548) (5 704) 14 109
Cash flow from operating
activities (76 338) 8 207 7 246
Cash flow from investing
activities 3 187 (7 180) 36 999
Cash flow from financing
activities (53 737) (24 925) (23 491)
Movement in cash and cash
equivalents (126 888) (23 898) 20 754
Cash and cash equivalents at the
beginning of the period 84 197 63 443 63 443
Cash and cash equivalents at the
end of the period (42 691) 39 545 84 197
STATEMENT OF CHANGES IN EQUITY
Six months Six months 12months
30 June 30 June 31 December
2004 2003 2003
R`000 R`000 R`000
Issued capital
Ordinary share capital at
beginning and end of period 58 264 58 264 58 264
Other reserves
Foreign currency translation
reserve
Balance at end of period 4 068 130 2 671
Balance at beginning of period 2 671 (4 586) (4 586)
Movement for the period 1 397 4 716 7 257
Cash flow hedge reserve
Balance at end of period - 13 236 -
Balance at beginning of period - 15 363 15 363
Movement for the period - (2 127) (15 363)
4 068 13 366 2 671
Accumulated loss
Balance at beginning of period 29 778 (10 551) (10 551)
Net (loss)/profit for the period (47 897) 3 488 40 329
(18 119) (7 063) 29 778
Ordinary dividend paid during the
period (44 080) - -
Balance at end of period (62 199) (7 063) 29 778
SUMMARISED CONSOLIDATED SEGMENT REPORT
Total Local International
R`000 R`000 R`000
Revenue 207 342 117 478 89 864
Net loss before taxation (41 664) (25 047) (16 617)
COMMENTARY
RESULTS ANNOUNCEMENT - JUNE 2004
These unaudited results have been compiled in accordance with statements of
Generally Accepted Accounting Practice and in the manner required by the fourth
schedule of the Companies Act of South Africa.
The same policies and methods of computation have been used in the preparation
of these unaudited results as were used in the preparation of the unaudited
results for the six months ended 30 June 2003 and in the preparation of the
audited financial statements for the year ended 31 December 2003. The
calculation of headline earnings presented is based on the interpretation of
Circular 7/2002, Headline Earnings, issued by the South African Institute of
Chartered Accountants.
OVERALL REVIEW
As per the trading statement and cautionary announcement published on the 8
June 2004, the group`s results are lower than expected with a decrease of R47
million in pre tax profit when compared to the same period in 2003.
In the first half of 2004, the group suffered from the continued slowdown
within the civil engineering sector in South Africa, which has impacted on
profit margins. This slowdown can be attributed to the decrease in value in
government projects and the strengthening of the Rand affecting civil
engineering projects within the mining industry.
The decrease of activity is also due to the arithmatic effect of the transfer
of activity in the subsidiaries which are not consolidated.
The group has continued to experience problems in working on road contracts in
Africa, and more specifically in Namibia. This together with the lack of
activity in South Africa has resulted in the poor results.
The group continues to invest in plant and equipment in support of new
contracts mainly in open cast mining and is continuing with its restructuring
as announced previously. Unfortunately the effects of this restructuring are
not evident in the results because of the declining workload within the civil
engineering sector. Since June 30th, 2004 the order book has increased by R184
million and is currently at R634 million with, amongst others, the recent award
of a three year platinum mining contract in Eastplats.
At the reporting date, Basil Read has reduced its exposure in terms of
guarantees from ZAR258.2 million to ZAR165.9 million. It is not expected that
any loss will arise out of the issue of these guarantees.
OPERATIONAL REVIEW
The Opencast Mining Division has continued with open pit mining in Brits for
Lonmin Platinum and has successfully started the three-year mining contract for
Gallery Gold in Botswana. The Opencast Mining Division keeps ensuring a
constant turnover and is working on securing further contracts that have been
targeted.
The Roads and Civil Division continues to perform satisfactorily in South
Africa, securing awards in the last six months together with its empowerment
companies. It has also successfully completed the repairs on a section of the
N4 Toll road in Mozambique.
As stated previously the rehabilitation of 116 km of road in the Caprivi Strip,
Namibia, has encountered difficulties.
Adverse weather conditions have compounded problems experienced with this
project leading to delays in the operation and certain lack of revenue. The
production difficulties have been remedied and the board of directors is
exploring various ways to mitigate and remedy the financial consequences of
these difficulties.
The Building Division is still active on the construction of a hospital in the
Eastern Cape, together with its empowerment partner.
After negotiating the final settlement on various cross border projects the
group is expecting the related payments.
Basil Read has successfully renewed its certification with ISO 9001: 2000 and
OHSAS 18001: 1999.
PROSPECTS
Despite the shrinkage in government awards, the group`s road division has
secured several contracts in Limpopo and North West Provinces and is expecting
more work within these provinces. This can be attributed to better
competitiveness and the delivery of quality products within this region.
The building division is continuing with the development of the Cosmo City
project and with several turn key projects in Kwa-Zulu Natal. These are all
going through progressive and encouraging milestones.
The group continues with the empowerment process through its partnerships in
Limpopo and Eastern Cape. The group remains committed to the black empowerment
policy.
GOVERNANCE
Basil Read endorses the recommendations of the King Commission and strives to
comply with the recommendations in a manner which is appropriate having regard
to the size of the group. The board comprises of one executive director and six
non-executive directors who are all employed by the group`s holding company.
Executive director, B E G Johansson and non-executive director A Brunet
resigned from the board during the period under review.
Non-executive appointments to the board was Mr J P Trin. During the period
under review Mr H J Power resigned as company secretary and was replaced by Mrs
E Kruger.
DIVIDEND
No interim dividend has been declared for the period.
POST BALANCE SHEET EVENT
No material events have occurred between the balance sheet and the date of the
unaudited results that would have a material effect on the financial
statements.
By order of the Board
A Bernardo
29 September 2004
Directors: C J Gazaignes* (Chairman), A Bernardo (Chief Executive Officer);
J M Kiviatkowski*; O Montfort*; HP Maury*; O M Racine*;
J P Trin*
(French; *Non-executive)
Group Secretary: E Kruger
Registered office: Block D, Gillooly`s View Office Park,
5 Osborne Road, Bedfordview, 2008
Transfer secretary: Computershare Investor Service 2004 (Pty)
Limited
Sponsor: Bridge Capital Services (Pty) Limited
Auditors: PricewaterhouseCoopers Inc
Date: 29/09/2004 12:13:53 PM
Produced by the JSE SENS Department
