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Concor Limited - Interim Report For The Six Months Ended 31 December 2004
CONCOR LIMITED
(Registration number 1969/003076/06)
(Incorporated in the Republic of South Africa)
Share code: CNC
ISIN: ZAE000001616
INTERIM REPORT FOR THE SIX MONTHS ENDED 31 DECEMBER 2004
Salient features Change (%) 2004 2003
Revenue (2) 738,5m 753,6m
Operating Income before interest 5,5 12,9m 12,3m
Earnings per share - cents 19,6 81,8 68,4
Headline earnings per share - cents 18,3 80,9 68,4
Summarised consolidated income statement
Unaudited six Unaudited six
months ended months ended Audited
31 December 31 December year ended
2004 2003 30 June 2004
R` 000 R` 000 R` 000
Revenue 738 572 753 562 1 386 954
Operating income before interest 12 934 12 261 24 581
Interest received 4 206 8 250 13 608
Interest paid (2 578) (6 407) (12 975)
Income before taxation 14 562 14 104 25 214
Taxation (4 335) (4 036) (1 163)
Income after taxation 10 227 10 068 24 051
Associates losses after tax (345) (941) (1 781)
Outside shareholders interest 41 - (35)
Earnings attributable to
ordinary shareholders 9 923 9 127 22 235
Impairment of loans to associates - - 2 641
Revaluation of properties - - (5 004)
Profit on sale of fixed property (103) - (2 132)
Headline earnings attributable to
ordinary shareholders 9 820 9 127 17 740
Weighted average number of
shares in issue 12 133 884 13 347 594 13 347 594
Earnings per share (cents) 81,8 68,4 166,6
Headline earnings per share (cents) 80,9 68,4 132,9
Dividend per share (cents) - - 30,0
Summarised consolidated balance sheet
Unaudited Unaudited Audited
31 December 31 December 30 June
2004 2003 2004
R` 000 R` 000 R` 000
Non-current assets 234 732 228 954 224 449
Property, plant and equipment 141 780 148 550 129 699
Unlisted investments 50 601 55 652 49 335
Investment property 16 371 - 16 371
Deferred tax asset 25 980 24 752 29 044
Current assets 431 303 547 295 449 512
Other current assets 278 489 376 762 264 242
Deposits and cash 152 814 170 533 185 270
Total assets 666 035 776 249 673 961
Shareholders equity 207 069 186 133 203 802
Outside shareholders interest 12 18 53
Interest bearing debt 46 765 69 593 49 870
Current liabilities 412 189 520 505 420 236
Total equity and liabilities 666 035 776 249 673 961
Shares in issue at year end 13 347 594 13 347 594 13 347 594
Shares in issue at year end after
consolidating employee
share scheme 12 016 753 13 347 594 13 347 594
Net asset value per share (Rand) 17,23 13,95 15,27
Gearing (%) 23 37 24
Capital expenditure (R `000) 30 794 41 042 55 400
Capital commitments (R `000) 32 533 5 300 9 697
Depreciation 18 006 26 558 55 626
Statement of changes in equity
Unaudited six Unaudited six Audited
months ended months ended year ended
31 December 31 December 30 June
2004 2003 2004
R` 000 R` 000 R` 000
Ordinary share capital
Opening and closing balance 6 674 6 674 6 674
Treasury shares
Opening balance - - -
Shares acquired (2 676) - -
Closing balance (2 676) - -
Share premium
Opening and closing balance 51 640 51 640 51 640
Non-distributable reserve
Foreign currency translation
reserve/(deficit)
Opening balance 1 686 (1 371) (1 371)
Movement (382) (225) 3 057
Closing balance 1 304 (1 596) 1 686
Distributable reserve
Opening balance as
previously reported 143 802 124 292 124 292
Revaluation of property by associate - - 1 279
Restated opening balance 143 802 124 292 125 571
Earnings attributable to
ordinary shareholders 9 923 9 127 22 235
Dividend paid (3 598) (4 004) (4 004)
Closing balance 150 127 129 415 143 802
Shareholders` equity 207 069 186 133 203 802
Segmental information
Unaudited six Unaudited six Audited
months ended months ended year ended
31 December 31 December 30 June
2004 2003 2004
% R` 000 % R` 000 % R` 000
Revenue
Construction 78 576 428 81 609 858 78 1 084 568
Manufacturing 21 158 542 19 142 206 21 293 116
Discontinuing operations 1 3 602 0 1 498 1 9 270
100 738 572 100 753 562 100 1 386 954
Income before taxation
including associates
Construction 49 7 082 72 9 528 22 5 284
Manufacturing 72 10 167 50 6 496 81 18 923
Discontinuing Operations (21) (3 032) (22) (2 861) (3) (774)
100 14 217 100 13 163 100 23 433
Geographical revenue
Republic of South Africa 99 728 443 89 670 627 91 1 268 502
Rest of Africa 1 10 129 11 82 935 9 118 452
100 738 572 100 753 562 100 1 386 954
Abridged cash flow statement
Unaudited Unaudited Audited
31 December 31 December 30 June
2004 2003 2004
R` 000 R` 000 R` 000
Operating activities
Cash receipts from customers 713 703 789 620 1 452 312
Cash paid to suppliers 702 554 813 706 1 422 617
Cash generated/(utilised)
by operations 11 149 (24 086) 29 695
Net interest received 1 628 1 843 633
Dividends received 41 7 11
Dividends paid (3 598) (4 004) (4 004)
Taxation paid (7 167) (1 629) (15 482)
Cash inflow/(outflow) from
operating activities 2 053 (27 869) 10 853
Cash outflow from
investment activities (28 729) (53 857) (58 119)
Acquisition of property, plant
and equipment (30 794) (41 042) (55 400)
Acquisition of investment property - - (12 553)
Movement in loans to
associate companies - 1 344 107
Proceeds on disposal of property,
plant and equipment 3 331 1 638 14 229
Acquisition of unlisted investments (1 266) (15 797) (4 502)
Net cash utilised (26 676) (81 726) (47 266)
Cash (outflow)/inflow from
financing activities (5 780) 11 498 (8 225)
Long term liabilities
raised/(repaid) 12 364 24 874 (5 366)
Short term loans repaid (15 468) (13 376) (2 859)
Treasury shares acquired (2 676) - -
Decrease in deposits and cash (32 456) (70 228) (55 491)
Notes
1. Compliance with GAAP
These interim results have been compiled in accordance with South African
Statements of Generally Accepted Accounting Practice, and the listing
requirements of the JSE Securities Exchange in South Africa.
2. Accounting policies
The same accounting policies and methods of computation have been used in the
preparation of these audited financial statements as were used in the annual
financial statements to 30 June 2004.
3. Change in estimates
The group reviewed its depreciation estimates during the period under review.
The useful lives of all assets have been changed which resulted in a reduced
depreciation charge.
4. Employee share scheme
As the share scheme rules are in the process of being amended, with control over
the scheme passing to the non-executive directors of the group, this scheme is
now controlled by the group. It has therefore been consolidated into these
results, with a consequent change to the weighted average numbers of shares in
issue. Had the scheme been consolidated previously, the weighted average number
of shares in issue for the year ended June 2004 would have been 12 202 543.
Consequently, earnings per share would have been 182,2 cents and headline
earnings per share would have been 145,4 cents.
5. Net asset value per share
Net asset value per share has been calculated on shares in issue of 12 016 753
(after taking treasury shares into account resulting from the consolidation of
the employee share scheme). Had the scheme been consolidated for the year ended
June 2004, shares in issue would have been 12 173 357, in which case net asset
value per share would have been R16,74.
Financial overview
Revenue for the 6 months ended 31 December 2004 is lower than for the
corresponding period of the prior financial year due to a continued depressed
infrastructure market and operating income is only marginally up due to further
losses on the Sand Bypass contract. The technical issues pertaining to the Sand
Bypass contract have been resolved and it is anticipated that the contract will
be completed timeously.
The Group reviewed its depreciation estimates at the beginning of the year to
more closely align the useful life estimates with the actual useful life. This
has resulted in a reduced depreciation charge for the period. Had the estimates
not been changed the depreciation charge would have been R20,1m. Capital
expenditure amounted to R30,7m and a further R33m will be spent during the
second six months of the financial year, mainly in the Technicrete and Opencast
operations.
It is our stated intention to sell our 3,55% stake in the Bakwena Platinum
Corridor Concessionaire and progress has been made with interested parties.
Asset based finance debt, current assets and current liabilities remained fairly
static compared to June 2004.
Operational review
Our Technicrete division once again produced an excellent result and is expected
to exceed the previous year`s revenue and profit. Technicrete is pursuing
several new expansion opportunities which should come on stream towards the end
of the financial year.
The Opencast Mining division strengthened its order book and continued building
on its reputation as preferred contractor in the hard rock mining sector.
Underground Mining is currently operating under extremely tight market
conditions due to the negative effect that the strong rand is having on the
mining industry, but has nevertheless produced a satisfactory result for the 6
months under review.
Facility Management`s performance was slightly below expectation due to
additional costs incurred at Chapman`s Peak Drive.
The Building division has a full order book for the rest of the year and has now
reached critical mass. The margins in the Building sector have lifted, but
contracts awarded last year at low margins must be completed before a
satisfactory result can be expected from our building operations.
The Civils, Roads and Engineering divisions won several contracts during October
and November and have a good order book until the end of the financial year. Due
to delayed contract awards, all three divisions are behind budgeted revenue
levels which resulted in an under-recovery of fixed costs.
The Roads and Engineering divisions should achieve a modest profit by year end
whilst the main objective of the Civils division is to complete the Sand Bypass
contract. An engineering solution was successfully implemented to protect the
works from the sea and the permanent works are now progressing well under dry
conditions.
The Ngqura Harbour project in Joint Venture with Hochtief and empowerment
partners is progressing extremely well, with 95% of the breakwater construction
completed.
Two of the five caisson units were floated and placed into position at the end
of the eastern breakwater.
Prospects
The current order book, excluding Ngqura, stands at a satisfactory R1,1 billion
and although the construction divisions have not performed to expectation over
the last few years, we are confident that Government`s promised infrastructure
spending will come to fruition in the near future.
Opencast Mining and Technicrete will continue to produce excellent profits and
returns. Apart from Government`s spending, there are several other major
projects in southern Africa that will commence during the next 18 months and
Concor is well positioned to participate in these.
Dividend declaration
The Board has decided not to declare an interim dividend.
On behalf of the board
FW Keller JH Engelbrecht
Chairman Acting Chief Executive
24 February 2005
Date: 24/02/2005 05:52:57 PM
Produced by the JSE SENS Department
