| Thu 28 Jul 2005, 17:45 | | Basil Read - Unaudited results for the six months |
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Basil Read - Unaudited results for the six months ended 30 June 2005
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
Unaudited results for the six months ended 30 June 2005
Summarised consolidated income statement
Restated Restated
Unaudited Unaudited Audited
6 months 6 months 12 months
30 June 2005 30 June 2004 31 December 2004
R`000 R`000 R`000
Revenue 254 435 207 342 469 148
Operating profit/(loss)
for the period 12 155 (35 943) (92 756)
Profit on sale of subsidiaries - - 54 780
Profit on sale of associate - - 1 793
Net finance costs (6 145) (2 548) (4 680)
Profit/(loss) for the period after
net finance costs 6 010 (38 491) (40 863)
Profit/(loss) from associates 148 (1 551) 287
Profit/(loss) for the period
before taxation 6 158 (40 042) (40 576)
Taxation (224) (5 426) (1 039)
Normal and foreign taxation (224) - (237)
Secondary taxation on companies - (5 510) (5 510)
Deferred taxation - 84 4 708
Profit/(loss) for the period
after taxation 5 934 (45 468) (41 615)
Profit/(loss) for the period
attributable to the following:
Equity shareholders of the company 5 934 (46 191) (42 338)
Minority interest - 723 723
Net profit/(loss) for the period 5 934 (45 468) (41 615)
Depreciation and impairment for
the period (R`000) 10 133 15 123 34 451
Number of shares in issue (`000) 55 100 55 100 55 100
Ordinary dividends per share (cents) - 80,00 80,00
Earnings/(loss) per share (cents) 10,77 (83,83) (76,84)
Headline earnings/(loss)
per share (cents) 10,79 (87,10) (179,72)
Fully diluted earnings/(loss)
per share (cents) 10,77 (79,84) (76,84)
Fully diluted headline
earnings/(loss) per share (cents) 10,79 (82,95) (179,72)
Reconciliation of basic
earnings/(loss) to headline
earnings/(loss)
Basic earnings/(loss) 5 934 (46 191) (42 338)
Adjusted by
- Profit on sale of subsidiaries - - (54 780)
- Profit on sale of associate - - (1 793)
- Profit on sale of property,
plant and equipment (160) (1 802) (2 525)
- Impairment loss on plant
and equipment - - 2 772
- Fair value gain - foreign
currency swap 170 - -
- Fair value gain - investment
properties - - (360)
Headline earnings/(loss) 5 944 (47 993) (99 024)
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 -
Diluted average number of shares 55 100 57 855 55 100
Statement of changes in equity
Restated Restated
Unaudited Unaudited Audited
6 months 6 months 12 months
30 June 2005 30 June 2004 31 December 2004
R`000 R`000 R`000
Issued capital
Ordinary share capital at
beginning and end of period 58 264 58 264 58 264
Accumulated loss
GAAP reported balance at
beginning of year (54 842) 29 778 29 778
IFRS transition 194 1 992 1 992
IFRS balance at beginning of year (54 648) 31 770 31 770
Net profit/(loss) for the period 5 934 (46 191) (42 338)
As previously reported 5 934 (47 897) (40 540)
IFRS transition - 1 706 (1 798)
(48 714) (14 421) (10 568)
Ordinary dividend paid during
the period - (44 080) (44 080)
Balance at end of period (48 714) (58 501) (54 648)
Other reserves
Foreign currency translation reserve
Balance at end of period 3 536 4 068 2 917
Balance at beginning of period 2 917 2 671 2 671
Movement for the period 619 1 397 246
3 536 4 068 2 917
Summarised consolidated balance sheet
Restated Restated
Unaudited Unaudited Audited
30 June 2005 30 June 2004 31 December 2004
R`000 R`000 R`000
Assets
Non-current assets 114 483 145 683 116 654
Property, plant and equipment 79 162 117 732 91 271
Investment property 1 000 2 516 1 000
Investments 180 180 180
Investments in associates 15 397 11 501 5 459
Deferred taxation 18 744 13 754 18 744
Current assets 83 819 149 721 85 146
Inventories 464 916 486
Trade and receivables 64 433 117 996 40 771
Cash and cash equivalents 18 922 30 809 43 889
198 302 295 404 201 800
EQUITY AND LIABILITIES
Capital and reserves 13 086 3 831 6 533
Issued capital 58 264 58 264 58 264
Accumulated loss (48 714) (58 501) (54 648)
Other reserves 3 536 4 068 2 917
Minority interests - - -
Non-current liabilities
Interest-bearing borrowings 24 285 6 702 33 189
Current liabilities 160 931 284 871 162 078
Trade and accounts payable 134 603 156 504 99 817
Provisions 7 375 9 596 6 140
Current portion of
interest-bearing borrowings 18 581 45 271 17 892
Bank overdraft - 73 500 37 897
Deferred taxation 372 - 332
198 302 295 404 201 800
Net asset value per share (cents) 23,75 6,95 11,86
Capital expenditure for the
period (R`000) 26 981 8 178 22 648
Summarised consolidated cash flow statement
Restated Restated
Unaudited Unaudited Audited
6 months 6 months 12 months
30 June 2005 30 June 2004 31 December 2004
R`000 R`000 R`000
Operating cash flow 22 063 (23 437) (65 229)
Movements in working capital 16 268 (763) 53 681
Net cash generated from/
(utilised by) operations 38 331 (24 200) (11 548)
Net finance costs (6 145) (2 548) (4 680)
Dividends paid - (44 080) (43 799)
Taxation paid (224) (5 510) (5 622)
Cash flow from operating
activities 31 962 (76 338) (65 649)
Cash flow from investing
activities (10 817) 3 187 86
Cash flow from financing
activities (8 215) (53 737) (12 642)
Movement in cash and cash
equivalents 12 930 (126 888) (78 205)
Cash and cash equivalents at
the beginning of the period 5 992 84 197 84 197
Cash and cash equivalents
at the end of the period 18 922 (42 691) 5 992
Summarised consolidated segment report
Plant and Civil engineering and Buildings and
Total head office opencast mining structures
R`000 R`000 R`000 R`000
Revenue 254 435 - 219 407 35 028
Net profit before
taxation 6 158 (1 038) 7 680 (484)
Reconciliation of assets, liabilities and equity - IFRS
ASSETS LIABILITIES EQUITY
31 December 1 January 31 December 1 January 31 December 1 January
2004 2004 2004 2004 2004 2004
R`000 R`000 R`000 R`000 R`000 R`000
GAAP
reported 201 606 349 571 195 267 259 581 6 339 89 990
Adjustments
for property,
plant and
equipment 194 1 992 - - 194 1 992
IFRS
reported 201 800 351 563 195 267 259 581 6 533 91 982
Reconciliation of performance indicators - IFRS
Unaudited Audited
6 months 12 months
30 June 2004 31 December 2004
cents cents
Loss per share
GAAP reported (86,93) (73,58)
Adjustments for property, plant and equipment 3,10 (3,26)
IFRS reported (83,83) (76,84)
Headline loss per share
GAAP reported (91,68) (179,41)
Adjustments for property, plant and equipment 4,58 (0,31)
IFRS reported for property,
plant and equipment (87,10) (179,72)
Comments
Basis of presentation
The financial statements for the six months ended 30 June 2005 are prepared in
accordance with International Financial Reporting Standards (`IFRS`) and in the
manner required by the fourth schedule of the Companies Act of South Africa and
in compliance with the Listings Requirements of JSE Limited (`the JSE`). The
principal accounting policies used in the preparation of the unaudited results
for the period ended 30 June 2005 are consistent with those applied for the year
ended 31 December 2004 and for the unaudited results for the six months ended 30
June 2004 in terms of IFRS.
Restatement of financial information for the year ended 31 December 2004 and the
six months ended 30 June 2004 under International Financial Reporting Standards
For the year ended 31 December 2004 the Basil Read group prepared its financial
statements under South African Statements of Generally Accepted Accounting
Practice (`SA GAAP`) as effective at that date. In terms of the Listings
Requirements of the JSE the group is required to prepare its consolidated
financial statements in accordance with IFRS from 1 January 2005. IFRS refers to
the application of International Accounting Standards (`IAS`) and IFRS.
The date of transition to IFRS is 1 January 2004, which represents the start of
the earliest period of comparative information presented and thus the group`s
opening balance sheet at 1 January 2004 has been restated to reflect all
existing IFRS statements expected to be applicable on
31 December 2005. However IFRS 1 allows a number of exemptions to retrospective
application of IFRS and the group has adopted the following transitional
arrangements on a consistent basis:
Property, plant and equipment: the group has elected to measure individual items
of property and plant at fair value at the date of transition to IFRS, hence
fair value is deemed to be cost at that date.
The basis of material adjustments, net of the associated tax effect, is
reflected in the tables of reconciliation of assets, liabilities and equity and
is noted as follows:
Property, plant and equipment was previously measured at cost less accumulated
depreciation and accumulated impairments losses. Under IFRS, property, plant and
equipment is still stated at cost less accumulated depreciation and accumulated
impairment losses, incorporating residual values and component accounting on
material items.
There have been no material adjustments to the cash flow statement in respect of
cash flows from operating activities, cash flows from investing activities and
cash flows from financing activities.
Overall review
The group has experienced difficult times over the last five years mainly due to
difficult trading conditions in Africa and the decrease in value of government
projects in South Africa. The decision taken late last year to withdraw from all
government work in Africa together with the increase in government spending in
South Africa has stabilised the group and a platform has now been set from which
the group can grow to its former strength.
The board is happy to report that profitability has been restored with the net
profit for the six months ended June 2005 being R6 million (June 2004 - loss of
R45 million). The group`s revenue has increased by R47 million to R254 million.
The cash on hand has increased by R13 million to
R19 million since 31 December 2004.
The restoration of the group`s new head office was completed in June and the
staff has settled in well in their new offices.
The group has been awarded new contracts in the amount of R280 million and its
order book amounted to R865 million at 30 June 2005 (June 2004 - R450 million).
The group continued to invest in new plant and equipment in support of new
contracts. A decision has been taken to sell non-strategic plant, which has
resulted in the plant`s book value being reduced by R12 million. The group
incurred capital expenditure in the amount of R27 million for the period under
review.
The group is proud to report that at the end of June 2005, besides normal trade
payables, it has no indebtedness to its major shareholder, Bouygues Travaux
Publics SA.
At the end of the period under review the group had issued guarantees in the
amount of R131 million, compared with R166 million for the same period last
year. It is not expected that any loss will arise out of the issue of these
guarantees.
Shareholders are referred to the cautionary announcement dated 26 July 2005,
wherein shareholders were advised that discussions are taking place with regards
to a potential black economic empowerment (`BEE`) transaction.
Operational review
The restructuring of the building division has paid off with the commencement of
three new contracts during the period under review. The division`s turnover for
the six months under review has already exceeded last year`s turnover. The
division is expected to continue growing under buoyant market conditions.
The revenue in the mining division continues to grow and exceed expectations.
However, the division has experienced a difficult six months due to difficult
mining conditions on one of its opencast mining contracts. The division managed
to widen its client base with the start of a new contract with Debswana in
Botswana.
The roads and civils division continues to produce excellent results. The
division was awarded the contract to expand the Richards Bay Coal Terminal,
which commenced in May this year and is expected to be completed in twenty-two
months. The division continues to strengthen ties with its BEE partners, Newport
Construction (Pty) Limited in the Eastern Cape and BR-Tsima Construction (Pty)
Limited in Limpopo province.
The Cosmo City development outside Johannesburg is in full swing with phase one
of the housing development already sold out. The group is currently
investigating other similar developments in South Africa.
Prospects
Construction prospects in South Africa are good and are expected to improve
further with construction due to start on Gautrain, increased government
spending and construction activity relating to the Soccer World Cup 2010. The
group has positioned itself to take full advantage of this upswing.
The building division is expected to start construction on luxury apartment
blocks in Sandton, Johannesburg and in Umhlanga, Durban.
The mining division is continuing to build relationships with mining houses and
is following up on good prospects.
Talks with the government are still on track regarding the proposed N1/N2
concession in the Western Cape and the roads and civils division has been
awarded a further two roads projects since 30 June 2005.
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.
There have been no changes to the board during the period under review.
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 continuing to
investigate 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 date 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 28 July 2005
CEO, Managing Director Johannesburg
Directors
C Teresa#* (Chairman), ML Heyns (CEO, Managing Director), P Boiraud#*, CJ
Gazaignes#*,
JM Kiviatkowski#*
#French #*Non-executive
Group secretary
E Kruger
Registered office
388 Gild Road, Lilianton, Boksburg 1459
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited
Sponsor
Bridge Capital Services (Pty) Limited
Auditors: PricewaterhouseCoopers Inc
Date: 28/07/2005 05:42:35 PM
Produced by the JSE SENS Department
