| Wed 2 Mar 2005, 17:54 | | Basil Read Holdings Limited - Reviewed Results For |
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Basil Read Holdings Limited - Reviewed Results For The Year Ended 31 December
Release Date: 02/03/2005 17:34:48 Code(s): BSR
Basil Read Holdings Limited - Reviewed Results For The Year Ended 31 December
2004
Basil Read Holdings Limited
(`Basil Read` or `the Group`)
(Registration number 1984/007758/06)
ISIN: ZAE000029781
Share code: BSR
REVIEWED RESULTS FOR THE YEAR ENDED 31 December 2004
SUMMARISED CONSOLIDATED INCOME STATEMENT
Reviewed Audited
2004 2003
R`000 R`000
Revenue 469 148 540 674
Operating (loss)/profit for the year (90 874) 10 440
Profit on sale of subsidiaries 54 780 -
Profit on sale of associate 1 793 -
Profit on sale of unlisted investment - 28 412
Dividends received - 1 007
Net finance (costs)/income (4 680) 14 109
(Loss)/profit for the year after
finance (cost)/income (38 981) 53 968
Profit/(losses) from associates 349 (3 261)
(Loss)/profit for the year
before taxation (38 632) 50 707
Taxation (1 185) (10 597)
Normal and foreign current taxation (299) (3 190)
Secondary taxation on companies (STC) (5 510) -
Deferred taxation 4 624 (7 407)
(Loss)/profit for the year
after taxation (39 817) 40 110
Minority interests (723) 219
Net (loss)/profit for the year (40 540) 40 329
Depreciation and impairment for
the year (R`000) 32 568 36 291
(Loss)/earnings per share (cents) (73,58) 73,19
Headline (loss)/earnings per
share (cents) (179,41) 18,08
Fully diluted (loss)/earnings
per share (cents) (73,58) 69,71
Fully diluted headline
(loss)/earnings per share (cents) (179,41) 17,22
Dividends per share (cents) 80,00 -
Reconciliation of basic earnings
to headline earnings
(Loss)/earnings (40 540) 40 329
Adjusted by - Profit on sale
of subsidiaries (54 780) -
Adjusted by -
Profit on sale of associate (1 793) -
Profit on sale of unlisted investment - (26 385)
Profit on sale of property,
plant and equipment (4 154) (3 981)
Impairment loss on plant
and equipment 2 772 -
Fair value gain - investment properties (360) -
Headline (loss)/earnings (98 855) 9 963
Reconciliation between weighted
average number of shares and
diluted average number of shares
Weighted average number
of shares (`000) 55 100 55 100
Adjusted by -
Share Incentive Scheme (`000) - 2 755
Diluted average number of
shares (`000) 55 100 57 855
Statement of changes in equity
Reviewed Audited
2004 2003
R`000 R`000
Issued capital
Ordinary share capital at
beginning and end of the year 58 264 58 264
Other reserves
Foreign currency translation reserve
Balance at end of the year 2 917 2 671
Balance at beginning of the year 2 671 (4 586)
Movement for the year 246 7 257
Cash flow hedge reserve
Balance at end of the year - -
Balance at beginning of the year - 15 363
Movement for the year - 15 363
2 917 2 671
Accumulated (loss)/profit
Balance at beginning of the year 29 778 (10 551)
Movement for the year (40 540) 40 329
(10 762) 29 778
Dividend paid during the year (44 080) -
Balance at the end of the year (54 842) 29 778
Summarised consolidated balance sheet
Reviewed Audited
R`000 R`000
Assets
Non-current assets 116 460 160 851
Property, plant and equipment 90 783 126 072
Investment property 1 000 2 516
Investments 180 180
Investments in associates 5 459 18 035
Deferred taxation 19 038 14 048
Current assets 85 146 188 720
Inventories 486 923
Trade debtors and receivables 40 771 103 600
Cash and cash equivalents 43 889 84 197
201 606 349 571
Equity and liabilities
Capital and reserves 6 339 90 713
Issued capital 58 264 58 264
Accumulated (loss)/profit (54 842) 29 778
Other reserves 2 917 2 671
Minority interests - (723)
Non-current liabilities
Interest-bearing borrowings 33 189 12 098
Current liabilities 162 078 247 483
Trade and other accounts payable 99 817 145 768
Provisions 6 140 8 103
Current portion of interest-bearing
borrowings 17 892 93 612
Bank overdraft 37 897 -
Deferred taxation 332 -
201 606 349 571
Net asset value per share (cents) 11,50 164,63
Capital expenditure for
the year (R`000) 22 648 47 838
Summarised consolidated cash flow statement
Reviewed Audited
2004 2003
R`000 R`000
Net cash utilised by operations (11 548) (12 904)
Net finance (costs)/income (4 680) 14 109
Dividends (paid)/received (43 799) 1 007
Taxation (paid)/received (5 622) 5 034
Cash flow from operating activities (65 649) 7 246
Cash flow from investing activities 86 36 999
Cash flow from financing activities (12 642) (23 491)
Movement in cash and cash equivalents (78 205) 20 754
Cash and cash equivalents at the
beginning of the year 84 197 63 443
Cash and cash equivalents at the
end of the year 5 992 84 197
Summarised consolidated segment report
Inter-
Total Local national
R`000 R`000 R`000
Revenue 469 148 234 852 234 296
Loss from operations (34 301) (7 482) (26 819)
COMMENTS
These results have been compiled in accordance with South African statements of
Generally Accepted Accounting Practice and in the manner required by the fourth
schedule of the Companies Act of South Africa. The results have been reviewed by
the company`s auditors, PricewaterhouseCoopers Inc. Their review report is
available for inspection at the company`s registered office.
The same accounting policies and methods of computation have been used in the
preparation of these results as were used in the preparation of the audited
financial statements to 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
The 2004 year can best be described as one of the most difficult years in the
Group`s history.
As per the cautionary announcement published on SENS on 22 December 2004, the
Group`s results for the twelve months ended 31 December 2004 are substantially
down from the results for the same period last year. This can be attributed to a
R72 million decrease in turnover, which resulted in a lack of overhead recovery
and plant utilisation, exacerbated by an extremely difficult roads contract in
Namibia. This lack of turnover is as a result of government underspending,
together with the stronger Rand that has caused a slowdown in the awarding of
mining and civil contracts.
The latter half of the year was focused on restructuring and positioning the
Group to take full advantage of the expected upswing in the sector. The Group`s
overhead structure has been dramatically reduced and the decision has also been
taken to move the head office back to Boksburg in the first quarter of the new
year. The effects of these cost savings will be evident in the 2005 results.
This restructuring was fully supported by our major shareholder, Bouygues
Travaux Publics SA, who acquired a further 47% of the Group`s shares from fellow
subsidiaries within the Bouygues Group. Bouygues Travaux Publics SA also
purchased the Group`s subsidiary in Namibia.
The Group continued to invest in new plant and equipment during the period under
review. Unfortunately the Group had to provide for an impairment loss of R3
million on plant and equipment, which was bought in 2001/2 during the peak of
Rand weakness. As a result of the strengthening Rand, this plant was overvalued.
Despite the unsuccessful attempt to conclude a black economic empowerment deal
in the latter half of the year under review, the Group is still actively, but
cautiously, pursuing potential partners.
At the reporting date the Group`s order book is R640 million. The Group has been
awarded contracts in the amount of R144 million in the first two months of this
year.
The Group successfully renewed its certification with ISO 9001:2000 and OHSAS
18001:1999.
The Group has reduced its exposure in terms of guarantees from R276 million, at
the end of 2003, to R142 million at the end of 2004. It is not expected that any
loss will arise out of the issue of these guarantees.
Operational review
The building division has refocused and new management were appointed at the end
of the year under review. This has already been rewarded with the division being
awarded two new contracts after year-end. The prospects of the building sector
still appear good and we are expecting to profit from this buoyant market.
Despite the difficulties experienced by the sector on road contracts in South
Africa, the roads division has performed well. The division`s empowerment
partners, BR-Tsima and Newport Construction, have continued to grow with the
awarding of new contracts and have shown good progress on current contracts.
With the sale of Basil Read Civils Namibia (Pty) Limited to Bouygues Travaux
Publics SA, the division does not have any problematic cross-border contracts.
The opencast mining division continued to grow with the awarding of a three-year
contract with Gallery Gold in Botswana and further extensions awarded on Lonmin
Platinum Mines. The division successfully completed an opencast mining contract
in Zambia and continues to produce satisfactory results.
PROSPECTS
The Cosmo City Development has commenced after four years of negotiation. The
total contribution expected from the project should contribute to the Group.
We expect positive growth patterns in both the civil engineering and building
sectors and we anticipate a number of developments triggered by the activities
surrounding the 2010 Soccer World Cup and other developments.
The opencast mining division continues to tender and develop relationships with
private clients, both in South Africa and cross border. We believe that these
relationships will continue to enhance the profitability of the Group.
Governance
The directors and senior managers of the Group endorse the Code of Corporate
Practices and Conduct as set out in the King II Report on Corporate Governance.
Having regard for the size of the Group, the board is of the opinion that the
Group substantially complies with the Code as well as with the Listings
Requirements of the JSE Securities Exchange, South Africa.
The past year has seen the departure of a number of directors who have provided
leadership and guidance to the Group.
Executive Director, Mr BEG Johansson, and Non-Executive Director, Mr A Brunet,
resigned in the first half of the year.
In line with the restructuring of the Group, Non-Executive Directors Messrs HP
Maury, O Montfort, OM Racine and JP Trin resigned from the board and were
replaced with Mr P Boiraud. Mr A Bernardo, Chief Executive Officer, resigned
from the board after accepting a new position within the Bouygues Group. He was
replaced by Mr ML Heyns as Chief Executive Officer. Mr C Teresa was appointed
Non-Executive Director and replaces Mr CJ Gazaignes as Chairman.
The board comprises one executive director and four non-executive directors and
it is recognised that the board needs to be expanded. The Group is currently
investigating several alternatives.
Dividends
No dividend is declared for the period under review.
Post balance sheet events
No material events have occurred between the balance sheet and the date of these
results that would have a material effect on the financial statements of the
Group.
By order of the board
ML Heyns 2 March 2005
CEO, Managing Johannesburg
Basil Read Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1984/007758/06)
(`Basil Read` or `the Group`)
ISIN: ZAE000029781
Share code: BSR
Directors
C Teresa#* (Chairman), ML Heyns (CEO, Managing),
P Boiraud#*, CJ Gazaignes#*, JM Kiviatkowski#*
#French *Non-executive
Group secretary
E Kruger
Registered office
Block D, Gillooly`s View Office Park, 5 Osborne Road, Bedfordview 2008
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
Sponsor
Bridge Capital Services (Pty) Limited
Auditors: PricewaterhouseCoopers Inc
