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Kairos - Unaudited interim results for the six months ended 31 August 2005
KAIROS INDUSTRIAL HOLDINGS LIMITED
Incorporated in the Republic of South Africa.
Registration number 1987/002927/06
JSE code: KIR & ISIN: ZAE000011284
("Kairos" or "the Group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2005
OVERVIEW OF RESULTS
Group revenue for the period under review increased by 42% while operating
profit decreased by R1,260m to R5,021m, compared to the restated comparative
six-month period. Investment income remained basically at the same level while
finance cost increased by 75% mainly due to the purchase of new plant and
equipment.
With a net profit after taxation of R3,264m for the period under review earnings
per share decreased to 1,29 cents, with headline earnings being 1,04 cents per
share.
The decrease in earnings is primarily as a result of an adjustment to estimated
production costs allocated to certain brick types. It is also attributable to a
once off write-down of non-saleable inventory at the Witbank Brickworks Division
and an increase in overheads relating to additional management capacity being
created to pursue future growth opportunities.
The results for the six month period are considered to be positive in the light
of the impact of the above. Gross margins will return to normal.
The company"s growth programme that emphasises increased production volumes is
on course.
BROAD BASED BLACK ECONOMIC EMPOWERMENT ("BBBEE") INITIATIVE
The BBBEE Initiative was successfully implemented during this interim period
resulting in The Kairos BBBEE Trust ("the Trust") acquiring a 10% shareholding
in the company with the Previously Disadvantaged Employees of the Group being
the sole beneficiaries of the Trust.
BASIS OF PREPARATION
The interim financial statements have been prepared in accordance with
International Reporting Standards ("IFRS") expected to be applicable at 28
February 2006 and comply with IAS 34 - Interim reporting. These standards and
practices are subject to ongoing review and may change.
As the group"s annual financial statements for the year ending 28 February 2006
will be the first annual financial statements to comply with IFRS, the group has
applied IFRS (First Time Adoption of International Financial Reporting
Standards) in preparing the interim financial statements.
Comparative figures have been adjusted accordingly.
DIVIDEND
The Board has resolved that no interim dividend will be declared.
PROSPECTS
The demand for clay bricks are expected to remain firm, and mining supplies
should show continued sales growth.
The group"s strategic focus remains unchanged with solid business models and
focus on its core businesses. The board remains confident of the prospects for
the full year and beyond.
For and on behalf of the board
L Jonker
Company Secretary
28 October 2005
UNAUDITED GROUP INCOME STATEMENT
Restated Restated
For the for the for the
6 months 6 months 12 months
ended ended ended
31 Aug 31 Aug 28 Feb
(R"000) 2005 2004 2005
Revenue 63 014 44 340 94 474
Cost of sales (48 110) (29 869) (67 201)
Gross profit 14 904 14 471 27 273
Operating costs (9 883) (8 190) (13 730)
Operating profit before investment 5 021 6 281 13 543
income, depreciation and finance
cost
Interest on loan to joint venture 557 557 1 115
Investment revenues 249 193 338
Other gains and losses 650 (189) (48)
Depreciation and amortisation (1 285) (710) (1 898)
expense
Finance cost (1 465) (837) (2 088)
Profit before taxation 3 727 5 295 10 962
Taxation (463) (630) (879)
- Normal (420) (39) (134)
- Deferred (43) (591) (745)
Net profit attributable to 3 264 4 665 10 083
shareholders
Determination of headline earnings
Profit after taxation 3 264 4 665 10 083
(Profit)/loss on disposal of fixed (650) 189 48
assets
Headline earnings 2 614 4 854 10 131
Number of shares on which earnings 252 089 252 085 252 085
per share is based (000"s)
Headline earnings per share (cents) 1,04 1,93 4,02
Earnings per share (cents) 1,29 1,85 4,00
UNAUDITED ABRIDGED GROUP CASH FLOW STATEMENT
Restated Restated
For the for the for the
6 months 6 months 12 months
ended ended ended
31 Aug 31 Aug 28 Feb
(R"000) 2005 2004 2005
Net cash flow from operating 9 604 11 065 6 237
activities
Net cash flow from investment (2 496) (944) (5 560)
activities
Net cash flow from financing (2 109) (503) 1 717
activities
Net increase in cash 4 999 9 618 2 394
Cash and cash equivalents at 8 725 6 331 6 331
beginning of period
Cash and cash equivalents at end of 13 724 15 949 8 725
period
SEGMENTAL ANALYSIS
Restated Restated
For the for the for the
6 months 6 months 12 months
ended ended ended
31 Aug 31 Aug 28 Feb
(R"000) 2005 2004 2005
REVENUE
Mining Supplies 26 079 20 206 45 128
Manufacturing - bricks 36 566 23 701 48 499
Property and other 369 449 847
Inter Group eliminations - (16) -
63 014 44 340 94 474
OPERATING AND INVESTMENT INCOME
Mining Supplies 2 283 423 1 257
Manufacturing - bricks 3 059 8 100 11 730
Property and other (321) (2 242) 556
Investment income 806 750 1 453
5 827 7 031 14 996
UNAUDITED GROUP BALANCE SHEET
At Restated at Restated
at
31 Aug 31 Aug 28 Feb
(R"000) 2005 2004 2005
ASSETS
Non-current assets 46 589 27 967 35 112
Property, plant and equipment 23 976 16 261 23 772
Investment property 10 644 7 978 8 355
Patents and intangibles 2 901 2 798 2 741
Investments 244 815 244
Other 8 824 115 -
Current assets 41 852 36 133 38 050
Inventories 13 995 10 552 17 578
Trade and other receivables 14 053 9 632 11 747
Cash and cash equivalents 13 724 15 949 8 725
Assets classified as held for sale 80 - -
Total assets 88 441 64 100 73 162
EQUITY AND LIABILITIES
Stated capital and reserves 47 888 33 310 42 305
Non-current liabilities 16 212 12 731 13 877
Long-term borrowings 11 023 12 140 13 132
Deferred taxation 788 591 745
BBBEE - Share creditors 4 401 - -
Current liabilities 24 341 18 059 16 980
Trade and other payables 15 933 14 452 11 983
Tax liabilities 544 61 156
Short-term portion of long-term 7 864 3 546 4 841
liability
Total equity and liabilities 88 441 64 100 73 162
Shares in issue (000"s) 252 089 252 085 252 085
Net asset value per share (cents) 19,00 13,21 16,78
Net tangible asset value per share 17,85 12,10 15,69
(cents)
STATEMENT OF CHANGES IN EQUITY
Non- Total
distribu- share-
Stated Revaluation Retained table holders
(R"000) capital reserve losses reserve funds
1 March 2004
As previously 210 140 (184 582) 1 203 26 761
reported under
SA GAAP
Profit for the 5 256 5 256
period
Effect of
changes in
accounting
policies
- Revaluation 1 884 1 884
of plant and
equipment
- Reversal on 39 (39)
sale of
investment
property
- Deferred tax (591) (591)
liability on
revaluations
Balance as at 210 140 1 884 (179 878) 1 164 33 310
31 August 2004
- unaudited
IFRS restated
Profit for the 5 572 5 572
period
Effect of
changes in
accounting
policies
- Revaluation 3 577 3 577
of plant and
equipment
- Deferred tax (154) (154)
liability on
revaluations
Balance as at 210 140 5 461 (174 460) 1 164 42 305
28 February
2005
- unaudited
IFRS restated
Profit for the 3 262 3 262
period
Effect of
changes in
accounting
policies
- Share issue 7 7
with odd lot
offer
- Revaluation 2 314 2 314
of plant and
equipment
Balance at 31
August 2005
- unaudited 210 147 7 775 (171 198) 1 164 47 888
IFRS restated
Registered office 1111 Church Street, Hatfield 0083, Pretoria
PO Box 11328, Hatfield 0028, Pretoria
Tel: +27 (0) 12 342 1980 Fax: +27 (0) 12 342 1976
E-mail: info@kairos.co.za
Sponsor Bridge Capital Services (Pty) Limited 1st Floor Building 22a, The
Woodlands, Woodlands Drive, Woodmead, Sandton
Transfer secretaries Computershare Investor Services 2004 (Pty) Limited 70
Marshall Street, Johannesburg 2001
Directors JB Oosthuizen (non-executive chairman), WL van Deventer (chief
executive), JJ de W Mulder, VD Mazibuko
Visit us at www.kairos.co.za
Date: 28/10/2005 05:05:19 PM Produced by the JSE SENS Department
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