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Wilson Bayly Holmes - Ovcon Limited - Unaudited Interim Results For The Six
Release Date: 28/02/2005 16:38:13 Code(s): WBO
Wilson Bayly Holmes - Ovcon Limited - Unaudited Interim Results For The Six
Months Ended 31 December 2004
Wilson Bayly Holmes - Ovcon Limited
(Registration number 1982/011014/06)
Share code: WBO ISIN: ZAE000009932
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2004
* Attributable income up 38%
* Headline earnings up 18%
* Operating income up 13%
GROUP INCOME STATEMENT
6 months to 6 months to Year to
% 31 December 31 December 30 June
Increase/ 2004 2003 2004
(decrease) R`000 R`000 R`000
Gross revenue 82,4 2 236 873 1 226 062 2 510 717
EBITDA 34,1 116 213 86 683 161 656
Depreciation and goodwill (20,8) 24 724 31 204 64 678
Operating income 64,9 91 489 55 479 96 978
Investment income 102,5 10 515 5 192 15 559
Income before interest 68,1 102 004 60 671 112 537
Interest paid (63,5) 709 1 944 4 001
Income before taxation 72,5 101 295 58 727 108 536
Taxation 45,0 29 375 20 263 30 393
Income after taxation 87,0 71 920 38 464 78 143
Income from associates (89,2) 909 8 450 20 271
Minorities interest - (8 215) - -
Income attributable
to shareholders 37,7 64 614 46 914 98 414
Reconciliation of
headline earnings
Income attributable
to shareholders 37,7 64 614 46 914 98 414
Add back
Goodwill amortisation (58,1) 4 021 9 602 20 482
Profit on sale
of fixed assets - (1 954) - (3,123)
Headline earnings 18,0 66 681 56 516 115 773
Shares in issue (000`s) 55 491 55 491 55 491
Earnings per share (cents) 116,4 84,5 177,4
Headline earnings per share (cents) 120,2 101,8 208,6
GROUP CASH FLOW STATEMENT
6 months to 6 months to 12 months to
31 December 31 December 30 June
2004 2003 2004
R`000 R`000 R`000
Cash flow from operating activities
Operating profit before working
capital changes 110 333 74 720 120 017
Working capital changes 24 572 5 595 68 616
Cash generated from operations 134 905 80 315 188 633
Investment income 10 515 5 192 15 559
Financing costs (709) (1 944) (4 001)
Taxation (24 330) (16 859) (21 610)
Dividend paid (18 867) (15 537) (24 971)
Cash retained from operations 101 514 51 167 153 610
Utilised in investing activities
Change in investments and loans (7 637) (11 970) (60 192)
Acquisition of subsidiary (4 952) (1 531) (1 376)
Acquisition of associates (4 560) (3 818) 37 516
Purchase of property, plant
and equipment (60 035) (18 020) (87 291)
Proceeds on sale of property,
plant and equipment 18 306 6 771 15 305
Net cash inflow/(outflow) from
investing activities (58 878) (28 568) (96 038)
Cash flow from investing activities
Change in net debt 17 783 (10 616) (20 492)
Net cash inflow/(outflow) from
financing activities 17 783 (10 616) (20 492)
Net increase/(decrease) in cash
and cash equivalents 60 419 11 983 37 080
Cash and cash equivalents at
beginning of period 323 421 286 341 286 341
Cash acquired on acquisition
of subsidiary 120 186 - -
Cash and cash equivalents at
end of period 504 026 298 324 323 421
BALANCE SHEET
31 December 31 December 30 June
2004 2003 2004
R`000 R`000 R`000
ASSETS
Non-current assets 439 730 383 099 431 564
Property, plant and equipment 305 659 230 720 266 553
Investments in associates 14 609 119 950 90 519
Investments and loans 81 826 25 333 73 555
Goodwill 37 636 7 096 937
Current assets 1 247 775 913 476 1 036 783
Inventories 25 722 26 935 26 395
Contracts in progress 553 219 474 914 531 735
Accounts receivable 127 121 107 530 141 225
Bank balances 541 713 304 097 337 428
Total assets 1 687 505 1 296 575 1 468 347
EQUITY AND LIABILITIES
Capital and reserves 470 629 390 553 396 641
Ordinary shareholders interest 439 998 390 553 396 641
Minority shareholders interest 30 631 - -
Non-current liabilities 98 934 74 789 75 324
Interest bearing debt 27 905 4 941 2 813
Deferred tax 71 029 69 848 72 511
Current liabilities 1 117 942 831 233 996 382
Interest bearing debt 11 364 20 342 12 594
Accounts payable and provisions 1 007 750 759 238 921 185
Bank overdrafts 37 687 5 773 14 007
Taxation 61 141 45 880 48 596
Total equity and liabilities 1 687 505 1 296 575 1 468 347
Net tangible asset value
per share (cents) 725 691 713
GROUP STATEMENT OF CHANGES IN EQUITY
6 months to 6 months to Year to
31 December 31 December 30 June
2004 2003 2004
R`000 R`000 R`000
Capital and reserves at
beginning of period 396 641 360 376 360 376
Retained income for the period 64 614 46 914 98 414
Changes in translation reserve (2 390) (1 200) (37 178)
Dividend paid (18 867) (15 537) (24 971)
Capital and reserves at end of period 439 998 390 553 396 641
NOTES AND ADDITIONAL INFORMATION
6 months to 6 months to Year to
31 December 31 December 30 June
2004 2003 2004
R`000 R`000 R`000
1. Segmental results
Gross revenue
Local 1 261 725 947 869 2 002 046
International 975 148 278 193 508 671
2 236 873 1 226 062 2 510 717
Operating income before goodwill
amortisation
Local 47 572 43 689 78 718
International 47 938 21 392 40 178
95 510 65 081 118 896
Results at the interim period
are not seasonally influenced
2. Contingent liabilities
Guarantees issued 462 851 485 498 294 722
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 2004.
These condensed financial statements fairly represent, in all material
respects, the South African Statements of Generally Accepted Accounting Practice
on Interim Financial Reporting.
COMMENTARY
Results
The group has once again achieved good results for the first six months of its
financial year with headline earnings per share increasing by 18% to 120 cents
per share. With effect from 1 July 2004 Probuild Constructions (Aust) Pty
Limited became a group subsidiary. Consequently the accounting treatment has
changed and the results of Probuild for the period have been consolidated as
opposed to being equity accounted.
In order to give stakeholders a better appreciation of the performance of the
group during the period we have restated the comparative figures in the table
below so that Probuild`s results for this period are also consolidated.
Six months to
31 December
2004 2003 %
Increase/
R`000 R`000 (decrease)
Operating income before goodwill amortisation 95 510 84 325 13,3
Goodwill amortisation 4 021 9 602 (58,1)
Operating income 91 489 74 723 22,4
Investment income 10 515 9 714 8,2
Income before interest 102 004 84 437 20,8
Interest paid 709 1 944 (63,5)
Income before taxation 101 295 82 493 22,8
Taxation 29 375 27 390 7,2
Income after taxation 71 920 55 103 30,5
Income from associates 909 298 205,0
Minorities interest (8 215) (8 487) 3,2
Income attributable to shareholders 64 614 46 914 37,7
The increase in turnover, apart from the consolidation of the Probuild results,
is due to the roads and earthworks division being more active and the building
division experiencing an upturn in the local market.
The cash position has improved by R60 million from operations over the period
and by a further R120 million arising from the consolidation of Probuild. This
increase was achieved despite an increase in net capital expenditure of R31
million during the period.
Order book higher
The order book of R4,1 billion (R1,1 billion attributable to Probuild) has
increased from the R2,75 billion reported in June 2004.
Roads division
The roads division continues to produce solid results with significant increases
in both contract profits and turnover.
The division has been busy in Mozambique during the period but is now looking
for replacement work. Activity in Botswana has been relatively quiet but the
division has recently been awarded the Ntimbale Dam contract in northern
Botswana. Work is under way on the division`s major road contract in Swaziland
and the opencast mining contract in Tanzania should continue well into the next
financial year. There are prospects of obtaining further contracts in Africa but
awards could be subject to lengthy delays. The division has increased its level
of work in the Republic and is involved in a variety of contracts throughout the
country.
Building activity at a high level
The level of building activity has been high throughout the country but
particularly in the coastal areas. Our Western Cape division should achieve both
a record turnover and profit this financial year. Similarly, in KwaZulu-Natal
and the Eastern Cape there is sufficient work on hand to ensure that budgets for
the year are exceeded. Highlights for the division during the period were the
completion on time of the Clearwater regional shopping centre in Roodepoort and
the Sibaya Casino and Entertainment Kingdom in Umdloti. The Cape Gate regional
shopping centre in Cape Town is on schedule to open in March 2005.
Civil division quiet
The civil division`s order book has improved slightly, but the level of work on
offer in this sector remains disappointing.
Property developments
The group has interests in a number of golf estate developments. These are still
in their early stages and are not expected to contribute significantly to the
overall profits this financial year.
Probuild exceeds budget
Probuild has exceeded its profit budget for the year to date which was set at a
slightly lower level than that achieved in 2004. This trend is expected to
continue for the remainder of the financial year.
Construction charter
Negotiations regarding the establishment of a construction charter and balanced
score card for the industry continue and our chairman, Mike Wylie, is playing an
active role in these negotiations.
Prospects
Prospects for the construction industry for the medium term look promising. Work
relating to the Soccer World Cup must commence shortly if the facilities are to
be ready in time. There have also been announcements from both Government and
various parastatals of significant capital spend over the next three years. In
addition, the present interest rate levels have led to considerable construction
activity in the private retail and residential sectors. However, the strong rand
is expected to continue to have a negative impact on spending in the mining
sector.
Dividend declaration
Notice is hereby given that an interim dividend of 21 cents per share (2003: 17
cents) in respect of the year ended 30 June 2005 has been declared payable to
all shareholders recorded in the register of the company on Friday, 22 April
2005, the record date. The last day to trade cum-dividend will be Friday, 15
April 2005 and the shares will trade ex-dividend from Monday, 18 April 2005.
Payment of the dividend will be made on Monday, 25 April 2005. Share
certificates may not be dematerialised or rematerialised between Monday, 18
April 2005 and Friday, 22 April 2005, both days inclusive.
On behalf of the board
M S Wylie A J MacKenzie
Chairman Director 24 February 2005
www.wbho.co.za
`Construction is our Business`
