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ELB GROUP LIMITED - INTERIM REPORT AND DIVIDEND ANNOUNCEMENT FOR THE SIX MONTHS
ENDED 31 DECEMBER 2004
ELB GROUP LIMITED
(ELB)
Incorporated in the Republic of South Africa
Registration number 1930/002553/06
Share codes: ELR & ELRP ISIN: ZAE000035101 & ZAE000035333
Interim report and dividend announcement for the six months ended 31 December
2004
GROUP INCOME STATEMENT
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 04 31 Dec 03 30 June 04
R000 R000 R000
Sales revenue 274 759 282 383 580 332
Net operating costs excluding
depreciation and amortisation (263 159) (270 550) (548 648)
Operating profit before depreciation,
amortisation and abnormal items 11 600 11 833 31 684
Depreciation and amortisation (4 115) (4 400) (8 524)
Operating profit before abnormal
items 7 485 7 433 23 160
Abnormal items as detailed below:
net income 4 500 432 -
Profit from operations 11 985 7 865 23 160
Net treasury income 1 720 3 721 4 113
Translation loss of foreign
treasury cash (1 266) (7 978) (13 622)
Profit before tax 12 439 3 608 13 651
Income tax expense (5 148) (2 877) (9 393)
Net tax reversal on foreign
treasury reserves - - 14 071
Profit after tax 7 291 731 18 329
Minority interest (597) (864) (2 157)
Net profit/(loss) 6 694 (133) 16 172
ABNORMAL ITEMS
Capital items
Profit on sale of interest in
subsidiary 6 499 - -
Profit on sale of portion of
interest in subsidiary 62 - -
Net recovery from discontinued
operation - 432 -
Net abnormal capital items: net
income 6 561 432 -
Trading items
Relocation of factory (966) - -
Interest on revised tax assessments
of subsidiary (661) - -
Input value added tax (VAT) dispute (341) - -
Interest on VAT dispute (93) - -
Net abnormal items: net income 4 500 432 -
RECONCILIATION OF GROUP HEADLINE EARNINGS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 04 31 Dec 03 30 June 04
R000 R000 R000
Net profit/(loss) per the income
statement 6 694 (133) 16 172
Deduct: Capital items as below: 6 563 52 ( 361)
Net abnormal capital items before tax
as detailed in the income statement 6 561 432 -
Capital items included in operating
profit before abnormal items:
Profit on disposal of plant and
equipment 175 51 114
Goodwill amortisation (135) (463) (543)
Income tax effect of capital items (52) (15) (34)
Minority interest in capital items 14 47 102
Headline earnings/(loss) 131 (185) 16 533
Weighted average number of shares
(excluding treasury shares) on which
basic earnings per share are
based (000`s) 27 319 28 639 27 974
Earnings/(loss) per ordinary share
(cents) - basic 24,5 (0,5) 57,8
- fully diluted 24,4 (0,5) 57,5
Headline earnings/(loss) per
ordinary share (cents)
- basic 0,5 (0,6) 59,1
- fully diluted 0,5 (0,6) 58,8
Dividends declared in respect of the
current period, per ordinary
share (cents) 5 10 30
GROUP STATEMENT OF CHANGES IN CAPITAL AND RESERVES
Unaudited Unaudited Audited
Accu- Total Total Total
Issued Treasury mulated 31 Dec 31 Dec 30 Jun
capital shares Reserves profit 2004 2003 2004
R000 R000 R000 R000 R000 R000 R000
Balance at
the beginning
of the period 25 192 (23 563) 750 146 667 149 046 147 124 147
124
Movement in
issued
capital
Shares issued
to The ELB
Participants
Share Trust 15 000 15 000
Listing fee
and (61) (61)
securities
tax
Movement in
treasury
shares
Loan to The
ELB
Participants
Share Trust (19 720 (19
742)
Decrease in
share
incentive
trusts loan
accounts 186 186 4 100 4 106
Movement in
accumulated
profit
Net profit/
(loss) for
the period 6 694 6 694 (133) 16 172
Translation
adjustments
of
foreign
entities 893 893 (63) (5 046)
Final
dividend for
the
previous year (5 461) (5 461) (5 778) (5
778)
Interim
dividend for
the current
year - - - (2 729)
Balance at
the end of
the period 25 192 (23 377) 750 148 793 151 358 140 469 149
046
GROUP BALANCE SHEET
Unaudited Unaudited Audited
31 Dec 04 31 Dec 03 30 Jun 04
R000 R000 R000
Assets
Non current assets 37 334 37 190 34 152
Property, plant and equipment 28 670 22 068 24 848
Intangible assets - 8 512 4 211
Deferred tax assets 8 664 6 610 5 093
Current assets 359 995 363 194 346 811
Inventories 186 161 164 751 164 209
Debtors and prepayments 54 282 42 051 54 550
Cash and cash equivalents 119 552 156 392 128 052
Total assets 397 329 400 384 380 963
EQUITY AND LIABILITIES
Capital and reserves 151 358 140 469 149 046
Issued capital 25 192 25 192 25 192
Treasury shares (23 377) (23 549) (23 563)
Reserves 750 750 750
Accumulated profit 148 793 138 076 146 667
Preference shares 8 8 8
Minority interest 170 2 385 3 478
Total equity 151 536 142 862 152 532
Non current liabilities 8 526 16 842 1 686
Interest bearing borrowings 7 296 621 385
Deferred tax liabilities 1 230 16 221 1 301
Current liabilities 237 267 240 680 226 745
Non interest bearing creditors and
accruals 184 333 150 318 148 167
Interest bearing creditors 32 271 58 477 47 894
Short term borrowings and bank
overdrafts 20 663 31 885 30 684
Total equity and liabilities 397 329 400 384 380 963
Ordinary shares in issue (000`s) 33 860 33 860 33 860
Deduct: Treasury shares in issue (000`s) 6 505 6 559 6 559
Ordinary shares in issue on which net
asset value per share is calculated 27 355 27 301 27 301
Net asset value per share (cents) 553 515 546
Note
At 31 December 2004 there were capital commitments of R900 000 for alterations
and extensions to a property acquired during the period then ended, and of R235
000 (31 December 2003 - R146 000, 30 June 2004 -
R170 000) for equipment.
GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 04 31 Dec 03 30 June
04
R000 R000 R000
Cash outflow from operating
activities before dividends paid (12 448) (38 611) (55 921)
Dividends paid (5 461) (5 778) (8 707)
Cash outflow from operating activities (17 909) (44 389) (64 628)
Cash inflow/(outflow) from investment
activities 19 630 (9 852) (11 517)
Cash inflow/(outflow) from financing
activities 7 990 (787) (6 022)
Increase/(decrease) in net cash and
cash equivalents 9 711 (55 028) (82 167)
Net cash and cash equivalents at the
beginning of the period 97 368 179 535 179 535
Cash and cash equivalents of
subsidiary on disposal (8 190) - -
Net cash and cash equivalents at the
end of the period 98 889 124 507 97 368
SEGMENT ANALYSIS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Dec 04 31 Dec 03 30 June
04
R000 R000 R000
SALES REVENUE
Continuing operations
ELB Equipment Holdings 209 540 226 587 453 253
ELB Timber Holdings 41 853 20 015 54 980
Total continuing operations 251 393 246 602 508 233
Discontinued operation
ELB McWade Electrical 23 366 35 781 72 099
Total 274 759 282 383 580 332
HEADLINE EARNINGS/(LOSS)
Continuing operations
ELB Equipment Holdings 4 479 6 401 15 842
ELB Timber Holdings (3 669) (4 532) (11 548)
Continuing operations before
adjustments below 810 1 869 4 294
ELB Equipment Holdings (2 361) (5 585) 4 536
Translation loss of foreign treasury
cash - before tax (1 266) (7 978) (13 622)
Tax credit on translation loss of
foreign treasury cash - 2 393 4 087
Net tax reversal on foreign treasury
reserves - - 14 071
Abnormal trading items (1 095) - -
ELB Timber Holdings (966) - (1 153)
Abnormal trading item - relocation of
factory (966) - -
Prior year tax adjustment - - (1 153)
Total continuing operations (2 517) (3 716) 7 677
Discontinued operation
ELB McWade Electrical 2 648 3 531 8 856
Headline earnings/(loss) 131 (185) 16 533
Capital items
Continuing operations 6 563 (380) (361)
Discontinued operation - 432 -
Net profit/(loss) 6 694 (133) 16 172
COMMENTS
INTRODUCTION
ELB is an investment holding company comprising two trading segments namely ELB
Equipment Holdings and ELB Timber Holdings.
During the period ELB McWade Electrical was sold for R30 million resulting in an
abnormal profit on realisation of R6,5 million.
FINANCIAL RESULTS
The results for the six months to 31 December 2004 reflect a net profit of R6,7
million (2003 - loss R0,1 million) and headline earnings of R0,1 million (2003 -
loss R0,2 million).
ELB Equipment Holdings traded satisfactorily for the period reporting headline
earnings before the adjustments detailed in the segment analysis, of R4,5
million.
ELB McWade Electrical (McWade) was sold with effect from 30 September 2004 and
the results include headline earnings of R2,6 million from McWade for the three
months ended 30 September 2004.
ELB Timber Holdings has been affected by the stronger Rand but satisfactory
progress is being made with the re-establishing of the Timber business. Though
turnover for the six months continued to increase a headline loss of R3,7
million, before factory relocation costs, has been reported.
PROSPECTS
ELB Equipment Holdings is expected to trade profitably for the second six
months.
ELB Timber Products is focusing on building a capability to produce and market
higher value niche products. The second six months is not expected to be
profitable and every effort is being made to reduce
the losses.
DIVIDENDS
An interim dividend of 5 cents (2003 - 10 cents) per ordinary share has been
declared.
ACCOUNTING POLICIES
Accounting policies accord with the South African Companies Act and South
African Statements of Generally Accepted Accounting Practice and are consistent
with those applied in the previous financial year ended 30 June 2004. As
disclosed in the annual report for the year ended 30 June 2004, the Group`s
share trusts were consolidated for the first time in that year. The effects of
the change were to treat shares under the control of the trusts as treasury
shares, and the dividends thereon as operating costs. The comparatives for the
six months ended 31 December 2003 have been restated accordingly.
On behalf of the Board
WGL Bateman AG Fletcher
Chairman Executive Deputy Chairman
Boksburg
17 March 2005
DIVIDENDS
The directors have declared the following interim dividends in respect of the
six month period ended 31 December 2004.
PREFERENCE DIVIDEND NUMBER 108
A dividend at the rate of 6% per annum on the 6% fixed cumulative redeemable
preference shares of R2 each, equivalent to 6 cents per share.
ORDINARY DIVIDEND NUMBER 114
A dividend of 5 cents per share on the ordinary shares.
The salient dates in respect of both dividends are:
Date of declaration Thursday, 17 March 2005
Last day to trade cum dividend Friday, 8 April 2005
Shares commence trading ex dividend Monday, 11 April 2005
Record date Friday, 15 April 2005
Date of payment Monday, 18 April 2005
Shares may not be dematerialised or rematerialised between Monday, 11 April 2005
and Friday, 15 April 2005, both dates inclusive.
By order of the Board
DG Jones Boksburg
Secretary 17 March 2005
REGISTERED OFFICE
Founders I Building, Bateman Campus
Bartlett Road, Boksburg North, 1459
SHARE TRANSFER SECRETARIES
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
SPONSOR
Rand Merchant Bank (a division of FirstRand Bank Limited)
Corporate Finance
1 Merchant Place, Cnr Fredman Drive & Rivonia Road
Sandton, 2196
Date: 17/03/2005 05:15:29 PM
Produced by the JSE SENS Department
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