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Scharrig Mining Limited - Unaudited Results For The Six Months Ended 30
September 2005
SCHARRIG MINING LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1992/01973/06)
Share Code: SCN ISIN Code: ZAE000006474
("Schamin" or "the Company")
Unaudited Results
for the six months
ended 30 September 2005
Headline earnings PER SHARE s 42% Operating profit s 45 % Dividend s 43%
Abridged Consolidated Balance Sheet as at 30 September 2005
Unaudited Unaudited
Unaudited IFRS IFRS
six months restated six restated year
ended months to ended
30 Sept 30 Sept 31 March
2005 2004 2005
R000 R000 R000
ASSETS
Non-current assets
Property, plant and
equipment 655 090 523 729 613 274
655 090 523 729 613 274
Current assets
Inventories 11 818 7 804 9 887
Trade and other
receivables 71 375 59 964 57 188
Bank balance and cash 28 882 29 292 28 885
112 075 97 060 95 960
Total assets 767 165 620 789 709 234
EQUITY AND LIABILITIES
Share capital and
premium 92 508 90 986 92 378
Reserves 199 357 131 961 165 082
Ordinary shareholders
funds 291 865 222 947 257 460
Non-current liabilities
Long-term borrowings 157 757 134 182 146 326
Deferred taxation 100 300 70 209 83 041
258 057 204 391 229 367
Current liabilities
Trade and other payables 44 068 18 984 53 673
Current portion of
long-term borrowings 172 037 173 991 168 259
Taxation 1 138 476 475
217 243 193 451 222 407
Total equity and
liabilities 767 165 620 789 709 234
Net asset value per share
(cents) 212 167 187
Abridged Consolidated
Cash Flow Statement
for the six months ended 30 September 2005
Unaudited Unaudited
Unaudited IFRS IFRS
six months restated six restated year
ended months to ended
30 Sept 30 Sept 31 March
2005 2004 2005
R000 R000 R000
Cash generated
from operations 112 378 115 542 220 251
Interest paid (15 022) (11 762) (33 472)
Dividend paid (5 299) (3 029) (7 502)
Taxation paid (854) (54)
Cash flows from
operating activities 92 057 99 897 179 223
Cash flows from
investing activities (105 001) (119 377) (254 355)
Cash flows from
financing activities 12 941 31 850 87 095
Net (decrease)/increase in
cash and cash equivalents (3) 12 370 11 963
Cash and cash equivalents at
the beginning of period 28 885 16 922 16 922
Cash and cash equivalents
at the end of period 28 882 29 292 28 885
Segmental Analysis - unaudited
for the six months ended 30 September 2005
R000 R000
Turnover Net income
before taxation
Coal Mining 309 906 39 820
Second-hand
equipment trading 1 904 (202)
311 810 39 618
Reconciliation between IFRS and SA GAAP
Unaudited Unaudited
IFRS restatedIFRS restated
year six months
ended ended
31 March 30 Sept
R000 2005 2004
IFRS equity impact
Equity as previously reported SA GAAP 163 014 131 453
Change in accounting policy -
IAS 16 Restatement of accumulated
depreciation to reflect plant and
equipment"s
useful lives 2 912 726
Deferred tax adjustment on the
restatements (844) (218)
Equity restated - IFRS compliance 165 082 131 961
IFRS income statement impact
Net income after tax as previously reported
SA GAAP 61 623 26 109
Change in accounting policy -
IAS 16 Restatement of accumulated
depreciation
to reflect plant and equipment"s
useful lives 2 912 726
Deferred tax adjustments on the
restatements (844) (218)
Net income after tax -
IFRS compliance 63 691 26 617
Abridged Consolidated Income Statement
for the six months ended 30 September 2005
Unaudited Unaudited
Unaudited IFRS IFRS
six months restated six restated year
ended months to ended
30 Sept 30 Sept 31 March
2005 2004 2005
R000 R000 R000
Revenue 311 810 276 821 567 571
Operating profit before
finance charges 72 518 50 075 122 055
Finance charges 15 022 11 762 33 472
Net profit before
taxation 57 496 38 313 88 583
Taxation 17 878 11 696 24 892
Net profit after taxation 39 618 26 617 63 691
Earnings attributable to ordinary
shareholders 39 618 26 617 63 691
Attritutable earnings
per share (cents) 31.0 21.9 51.3
Headline earnings
per share (cents) 31.0 21.9 51.3
Dividend per share (cents)
- interim (proposed) 5.0 2.5 3.5
- final (declared) 4.0
5.0 2.5 7.5
Shares in issue (000)
- at end of period 137 431 133 431 137 431
- weighted average for
the period 127 650 121 467 124 141
Reconciliation of headline
earnings
Earnings attributable to
ordinary shareholders 39 618 26 617 63 691
Headline earnings attributed
to ordinary shareholders 39 618 26 617 63 691
Statement of Changes in Equity
for the six months ended 30 September 2005
Non-
Accumu- distri-
Share Share Treasury lated butable
Capital Premuim Shares Profit Reserve Total
R000 R000 R000 R000 R000 R000
Balance at
30 Sept 2004 1 279 90 575 (868) 116 206 15 755 222 947
Shares issued 40 9 480 (9 520)
Dividends paid 52 (4 473) (4 421)
Share options exercised 1 340 1 340
Profit for the six
months ended
31 March 2005 37 594 37 594
Balance at
1 April 2005 1 319 100 055 (8 996) 149 327 15 755 257 460
Profit for the
period ended
30 Sept 2005 39 618 39 618
Dividend paid 130 (5 343) (5 213)
Balance at
30 Sept 2005 1 319 100 055 (8 866) 183 602 15 755 291 865
COMMENTS
Nature of operations
Schamin is listed on the "Other Mineral Extractors and Mines" sector of the main
board of the JSE Securities Exchange South Africa (JSE). Schamin was established
in 1972 and was listed on the JSE in 1993. Schamin is one of the major providers
of opencast mining and mine rehabilitation services to the South African coal
mining industry. Schamin"s client base includes a number of blue chip
international and local mining companies.
Results
Turnover increased by 13% over the corresponding period in 2004. Operating
profit for the six-month period increased to R72.5 million which represents a
44.8% increase. The group"s operating margin has increased to 23.2% at September
2005 from 18.1% in September 2004. Headline earnings per share of 31.0 cents was
42% higher than the corresponding period for 2004. An interim dividend of 5
cents per share has been declared (3.5 cents in 2004) which represents an
increase of 41.6% over the prior year.
Schamin"s debt to equity ratio has decreased to 103% from 125% at September
2004. The debt to equity ratio should decline further by the end of the
financial year.
These results incorporate the effect of the conversion to International
Financial Reporting Standards (IFRS). Full disclosure of the impact of the
adoption of IFRS is included in this announcement.
Capital expenditure
Budgeted replacement capital expenditure for the 2006 financial year was R75
million. At the half year a net amount of R52.8 million of replacement capital
expenditure had been incurred. In order to take advantage of the continued
strong demand for the group"s services an additional R52.2 million has been
spent enlarging the fleet. The majority of the new fleet was deployed in August
and September.
Directorate
During the six months ended 30 September 2005
Messrs D C M Gihwala, R K Jonah, A Joffe and E H J Stoyell were appointed to the
board as non-executive directors. Mr D C M Gihwala replaced Mr T Scharrighuisen
as the non-executive chairman.
Prospects
Schamin should achieve real earnings growth for the 2006 financial year driven
by:
continuing strong demand for its services;
operational efficiencies; and
the increased size of the fleet.
Dividend
An interim dividend of 5.0 cents per share has been declared by the board in
respect of the six-month period to 30 September 2005, payable on Monday, 12
December 2005 to those shareholders recorded in the register of the company at
the close of business on Friday, 9 December 2005. The salient dates of the
interim dividend are as follows:
Last date to trade
cum dividend Friday, 2 December 2005
Shares trade ex dividend Monday, 5 December 2005
Record date Friday, 9 December 2005
Payment date Monday, 12 December 2005
No dematerailisation or rematerialisation of shares may take place between
Monday, 5 December 2005 and Friday, 9 December 2005, both dates inclusive.
Basis of presentation
The abridged financial statements have been prepared in terms of IFRS expected
to be applicable at 31 March 2006 and in compliance with IAS 34 - Interim
Financial Reporting. This may differ from IFRS finally in effect at 31 March
2006 as a result of ongoing review and possible amendments by interpretive
guidance from the International Accounting Standards Board (IASB) and the
International Financial Reporting Interpretations Committee (IFRIC) and may
therefore be subject to change. The financial statements for the six months
ended 30 September 2005 and the annual financial statements for the year ended
31 March 2005 were previously prepared in accordance with South African
Statements of Generally Accepted Accounting Practice (SA GAAP).
In preparing these abridged financial statements for the six months ended 30
September 2005, certain accounting policy changes were applied to comply with
IFRS.The comparative figures for the six months ended
30 September 2004 and the year ended 31 March 2005 were restated to reflect
these adjustments. Reconciliations and descriptions of the effect of the
transition from SA GAAP to IFRS on the group"s equity and net profit are
provided in this announcement.
Transitional arrangements
The group"s annual financial statements for the year ended 31 March 2006 will be
the first set of annual financial statements that comply with IFRS. The group
has applied IFRS 1 (First time adoption of International Financial Reporting
Standards) in preparing these abridged financial statements. The group"s
transition date is 1 April 2004.The group"s opening balance sheet at that date
has been restated to reflect all existing IFRS statements expected to be
applicable on 31 March 2006.
The following new accounting policy was applied for IRFS reporting:
IAS 16 - Revaluation of residual values in plant and equipment.
In calculating the depreciation charge, an entity reduces the total depreciable
amount of an asset by that asset"s residual value. Previously, under SA GAAP the
estimated residual value was fixed on recognition of the asset and was not
subject to reassessment. IAS 16 requires that the residual value of the asset
should be reassessed at each balance sheet date, with a resultant effect on the
depreciation charge already recognized. Annual increases in asset values result
in an annual upward adjustment of residual values.
Cautionary announcement
Shareholder are referred to the cautionary announcement released on SENS on 8
November 2005. Shareholders are advised that the company is still engaged in
discussions which, if successfully concluded, may have an impact on the price of
the company"s shares. Accordingly, shareholders are advised to continue to
exercise caution when dealing in their shares until a further announcement is
made.
On behalf of the board
D C M Gihwala
Non-executive Chairman
C Scharrighuisen
Managing Director
Boksburg
14 November 2005
Directors: D C M Gihwala* (Chairman), C Scharrighuisen (Managing), J Holland
(Financial), T R Hendry*, Dr P Huysamer*,
A Joffe*, R K Jonah*, C Moorcroft, T Scharrighuisen*, E H J Stoyell**Non-
Executive
Transfer Secretaries
Ultra Registrars (Pty) Limited
5th Floor
11 Diagonal Street
Johannesburg
2001
(PO Box 4844
Johannesburg 2000)
Tel (011) 832-2652
Sponsor
SASFIN CORPORATE FINANCE
A DIVISION OF SASFIN BANK LIMITED
Registered Address
28 Patrick Road
Jet Park
Boksburg
1459
(PO Box 30194
Jet Park 1469)
Tel (011) 397-3870
Date: 14/11/2005 09:51:36 AM Produced by the JSE SENS Department
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