| Tue 20 Sep 2005, 14:51 | | Audited results for the year ended 30 June 2005 |
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Concor Limited - Audited results for the year ended 30 June 2005
CONCOR LIMITED
Registration number 1969/003076/06
Incorporated in the Republic of South Africa
Share Code: CNC
ISIN: ZAE000001616
Audited results for the year ended 30 June 2005
Salient Features Change (%) 2005 2004
Revenue (Rmillion) Up 17,2 1 624 1 386
Operating Income (Rmillion) Up 95,6 32,8 16,8
Operating Margin (%) Up 66,7 2,0 1,2
Earnings per share (cents) Up 23,5 225,1 182,2
Headline earnings per share (cents) Up 55,9 226,7 145,4
Dividend per share (cents) Up 66,7 50 30
Summarised consolidated income statement
Audited Audited
year ended year ended
30 June 2005 30 June 2004
R`000 R`000
Revenue 1 624 104 1 386 954
Operating income before finance cost
and investment income 32 767 16 752
Net finance (cost)/income (4 764) 633
Investment income 10 327 7 829
Income before taxation 38 330 25 214
Taxation (13 965) (1 163)
Income after taxation 24 365 24 051
Associates income/(losses) after tax 1 876 (1 781)
Outside shareholders interest (193) (35)
Earnings attributable to
ordinary shareholders 26 048 22 235
Impairment of loans to associates 256 2 641
Revaluation of investment properties (1 639) (5 004)
Impairment of group properties 1 818
Profit on sale of shares (134)
Profit on sale of property (119) (2 132)
Headline earnings attributable to
ordinary shareholders 26 230 17 740
Weighted average number of shares in
issue after consolidating employee
share scheme 11 571 690 12 202 689
Earnings per share (cents) 225,1 182,2
Headline earnings per share (cents) 226,7 145,4
Dividend declared per share (cents) 50,0 30,0
Dividend cover 4,5 6,1
Summarised consolidated balance sheet
Audited Audited
30 June 2005 30 June 2004
R`000 R`000
Non-current assets 249 792 224 449
Property, plant and equipment 154 785 129 699
Unlisted investments 57 813 49 335
Investment property 16 350 16 371
Deferred tax asset 20 844 29 044
Current assets 565 203 448 906
Other current assets 360 971 263 257
Deposits and cash 204 232 185 649
Total assets 814 995 673 355
Shareholders` equity 216 807 203 151
Outside shareholders` interest 246 53
Interest bearing debt 50 343 49 870
Current liabilities 547 599 420 281
Total equity and liabilities 814 995 673 355
Shares in issue at year end 13 347 594 13 347 594
Shares in issue at year end after
consolidating employee share scheme 11 349 373 12 173 357
Net asset value per share (Rand) 19,10 16,65
Gearing (%) 23 25
Capital expenditure (R`000) (70 323) (55 400)
Capital commitments (R`000) 34 324 9 697
Depreciation 41 012 55 626
Segmental information
Audited Audited
year ended year ended
30 June 2005 30 June 2004
% R`000 % R`000
Revenue
Construction 81 1 310 215 78 1 084 568
Manufacturing 19 307 687 21 293 116
Discontinuing operations 0 6 202 1 9 270
100 1 624 104 100 1 386 954
Income before taxation
including associates
Construction 44 17 493 22 5 284
Manufacturing 61 24 526 81 18 923
Discontinuing operations (5) (1 813) (3) (774)
100 40 206 100 23 433
Geographical Revenue
Republic of South Africa 99 1 615 552 91 1 268 502
Rest of Africa 1 8 552 9 118 452
100 1 624 104 100 1 386 954
Statement of changes in equity
Audited Audited
year ended year ended
30 June 2005 30 June 2004
R`000 R`000
Ordinary share capital and premium
Opening and closing balance 58 314 58 314
Treasury shares
Opening balance (1 277) -
Shares acquired (6 707) (1 277)
Closing balance (7 984) (1 277)
Non-distributable reserve
Opening balance 1 981 (1 371)
Movement in foreign currency
translation reserve (2 280) 3 057
Movement due to consolidation of
employee share scheme 295
Closing balance (299) 1 981
Distributable reserve
Opening balance as previously reported 143 802 125 571
Effect of consolidation of share scheme 331
Restated opening balance 144 133 125 571
Earnings attributable to
ordinary shareholders 26 048 22 235
Dividend paid (3 405) (3 673)
Closing balance 166 776 144 133
Shareholders` equity 216 807 203 151
Abridged cash flow statement
Audited Audited
year ended year ended
30 June 2005 30 June 2004
R`000 R`000
Operating activities
Cash receipts from customers 1 616 798 1 453 297
Cash paid to suppliers (1 514 991) (1 422 284)
Cash generated by operations 101 807 31 013
Net finance (cost)/income (4 764) 633
Dividends received 6 348 11
Dividends paid (3 405) (3 673)
Taxation paid (12 190) (15 475)
Cash inflow from operating activities 87 796 12 509
Cash outflow from investment activities (62 979) (58 119)
Acquisition of property, plant
and equipment (70 323) (55 400)
Acquisition of investment property - (12 553)
Movement in loans to associate companies (503) 107
Proceeds on disposal of property, plant
and equipment 9 946 14 229
Acquisition of unlisted investments (2 099) (4 502)
Net cash generated/(utilised) 24 817 (45 610)
Cash outflow from financing activities (6 234) (9 502)
Long term liabilities raised/(repaid) 4 944 (5 366)
Short term loans repaid (4 471) (2 859)
Treasury shares acquired (6 707) (1 277)
Increase/(decrease) in deposits and cash 18 583 (55 112)
Notes
1. Compliance with GAAP
These results have been compiled in accordance with South African Statements of
Generally Accepted Accounting Practice, and the listing requirements of the JSE
Limited 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, other than as detailed below.
3. Change in estimates
The group reviewed its depreciation estimates during the year. The useful lives
of all assets have been changed which resulted in a reduced depreciation charge.
This led to an increase in income after tax of R11,8 million.
4. Employee share scheme
During the year, the directors obtained a legal opinion regarding the control of
the scheme. The opinion was that, because the scheme acts on recommendations by
the remuneration committee which is appointed by the Board, it is controlled by
the group. This has led to the scheme being consolidated into these results, as
well as the prior year figures being restated.
5. Restatement of prior year figures
As explained above, the employee share scheme has been consolidated into these
results. Consequently, the prior year figures have also been restated. The
effect of these changes on the prior year are as follows:
Restated Previous
Earnings per share (cents) 182,2 166,6
Headline earnings per share (cents) 145,4 132,9
Net asset value per share (Rand) 16,65 15,27
6. Audit report
The results for the year ended 30 June 2005 have been audited by KPMG Inc. Their
unqualified audit opinion is available for inspection at the company`s
registered office.
Financial overview
The Board is pleased to report an increase in revenue, earnings, dividends and
cash generation. The headline earnings growth of 56% marginally exceeds the
growth indication announced to the market earlier this year. The increase in
revenue from R1,4bn to R1,6bn is mainly attributable to strong growth in the
Building division. Operating income and operating margin increased by 95,6% and
66,7% respectively, but the percentage margin is still well below our target of
at least 3% due to losses in the Civils and Building divisions. The group did
not utilize any assessed losses during the year, resulting in a substantial
increase in the taxation charge for the year.
Capital expenditure amounted to R70m during the year under review and exceeded
budget as a result of shortages experienced in the equipment hire market.
Deposits and cash increased by R18,6m to R204m whilst asset-based, interest-
bearing debt remained at R50m. Return on shareholder`s equity has improved over
the last few years to 12,4%, with some of the divisions achieving superior
returns whilst loss-making divisions reduced the returns to current levels.
The Board has declared a dividend of 50 cents per share.
Operational review
Technicrete achieved a record result in a strong building market. The success of
the division can be attributed to an innovative and energetic management team.
The block plant in Mozambique was closed due to insufficient volumes. Additional
capacity was acquired through the purchase of a 49% interest in the Royal
Bafokeng Brick and Tile factory in Rustenburg during April. Technicrete is
actively pursuing further expansion opportunities in South Africa.
In line with previous years, both the Underground and Opencast Mining divisions
exceeded their budgets. Opencast Mining has entrenched its position as preferred
mining contractor in the platinum sector by securing additional work and
contract extensions of current contracts from existing clients on a continual
basis.
The Roads and Engineering Divisions also achieved outstanding results by turning
2004 losses into high margin profits. The significant improvement in the
profitability of the Roads division is directly attributed to the realignment of
the division`s strategy to focus on bulk earthworks contracts.
The Facility Management Division has achieved its financial targets for the
year. We are pleased to report that the contractual liabilities relating to the
rock fall in July 2004 at Chapman`s Peak were resolved during the year. We have
not been able to commence with the construction of the permanent toll plaza as
yet, as the related environmental issues are still under discussion with all
stakeholders. Consequently Concor is still warehousing a 20% BEE stake in the
concession company which will be sold to a BEE grouping upon the resolution of
the aforesaid.
The Coega Harbour project is nearing completion and is expected to report a
final profit in line with the original budget. Concor is proud of its role in
delivering this world class project together with its international partner,
Hochtief.
Further losses and delays were experienced on the Sand Bypass contract in the
Civils division resulting from a change in construction methods. International
marine experts have been consulted and it is estimated that the contract will be
completed towards December. The division also suffered losses on a contract for
Sasol, where substantial claims have been submitted for adjudication.
Although the revenue in the Building division more than doubled compared to the
last financial year, the work was won at very low margins. Given the continued
growth in the building sector the division has become more selective regarding
new contracts, with improved profits on new projects awarded over the last six
months expected to materialise in the new financial year.
Prospects
Work on hand amounts to R1,3bn with the recent award of the R320m Johannesburg
Airport International terminal contract of which the Group is a 55% partner. All
the divisions, except for Civils, have a satisfactory workload. We are pleased
to note an improvement in margins over the last few months and will only tender
on contracts that will deliver an acceptable return with proven teams.
We are excited about the future prospects in the construction industry given
that several major projects have been announced recently, which include harbour,
airport, dam, and power station expansion projects. The Gautrain project and
continued private sector spending as a result of the low interest and inflation
rates, as well as government`s promised road infrastructure program will result
in strong growth in the industry over the next few years.
Change in control
Concor enters a new phase with the recent announcement that Murray and Roberts
will acquire the shares held by Hochtief and that it would make an offer to all
minorities by means of a scheme of arrangement whereby the company will become a
wholly owned subsidiary of Murray and Roberts, if the proposed scheme of
arrangement is sanctioned by the court. Hochtief has been a shareholder in
Concor for more than 30 years and several major projects have been completed
jointly.
Dividend declaration
The Board has declared a final dividend of 50 cents per share (2004 - 30 cents)
payable to shareholders. In order to comply with the requirements of STRATE, the
relevant details are:
Event Date
Last date to trade cum div Friday, 21 October 2005
Shares to commence trading ex div Monday, 24 October 2005
Record date Friday, 28 October 2005
(date shareholders recorded in books)
Payment date Monday, 31 October 2005
No share certificate may be dematerialised or rematerialised between
Monday, 24 October 2005 and Friday, 28 October 2005, both days inclusive.
Composition of the Board
Mr. JH Engelbrecht resigned from the Board on 30 April 2005 and Mr. TR Robinson,
Managing Director of the mining divisions, was appointed to the Board on 1 May
2005.
On behalf of the Board
FW Keller AJ Bester
Chairman Acting Chief Executive
20 September 2005
Directors: FW Keller (Chairman), AJ Bester (Acting Chief Executive), TR
Robinson, M Lommatzsch, CE Sevillano-Barredo Secretary: R C Davies
Registered Office: Concor House, 13 Church Street Ext., Crown Industria,
Johannesburg 2001 (PO Box 8259, Johannesburg 2000)
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Limited, 70
Marshall Street, Johannesburg 2107 (PO Box 61051, Marshalltown, 2107)
Date: 20/09/2005 02:47:11 PM
Produced by the JSE SENS Department
