| Tue 15 Nov 2005, 15:48 | | Wescoal - Reviewed Interim Results for the six mon |
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Wescoal - Reviewed Interim Results for the six months ended 30 September 2005
Wescoal Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2005/006913/06)
(JSE code: WSL & ISIN: ZAE000069639)
("Wescoal" or "the Group")
REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2005
Warning: The listing of ordinary shares in the company is on ALTx. Investors
are advised of the risks of investing an a company listed on ALTx. Investors
are advised that the JSE does not guarantee the viability or the success of a
company listed on ALTx. In terms of the Listing Requirements, the company is
obliged to appoint and retain a Designated Adviser, which is required to, inter
alia, attend all board meetings held by the company to ensure that all the
Listing Requirements and applicable regulations are complied with, approve the
Financial Director of the company and guide the company in a competent,
professional and impartial manner. If the company fails to retain a Designated
Adviser, it must make arrangements to appoint a new Designated Adviser within
10 business days, failing which the company faces suspension of trading of its
secrities. If a Designated Adviser is not appointed within 30 days of its
suspension, the company faces the termination of its listing without the
prospect of an appropriate offer to minority shareholders.
Reviewed Interim Results for the six months ended 30 September 2005
Commentary on historical results
The group"s revenue for the six month period was 10.2% lower than the
comparative period. Sales into the domestic market were 19.2% lower than last
year due to extremely hot conditions prevailing during the winter months. The
prior year sales figure also include export sales to the value of R18 million
and gross profit to the value of R1.4 million. Due to the strengthening of the
rand none of these export orders materialized this year. Sales of coal into the
industrial market were also down due to the warm weather conditions. Despite
these factors and the impact on revenue of the hottest winter in 30 years,
profit after tax and earnings per share increased by 10.2% and 4.9%
respectively if compared to the comparative period.
The group successfully acquired the remaining 66% of Wescoal Mining ("Wesmine")
on 18 July 2005. Since the group took control over Wesmine production improved
by 75% and the company turned to profitable levels for the first time. Access
to its own washed coal has not only secured new customers for the group but
also allow additional margin at manufacturing as well as trading level.
Margin improved from last year"s levels of 8.7% to the current level of 9.3%.
This improvement is due to the successful integration of Wesmine into the
group.
The effective tax rate for the period was only 4% mainly due to the assessed
loss in Wesmine.
The successful JSE listing ("JSE") on 20 July 2005 with the capital raising and
private placing of R 7 million, allowed the group to further upgrade the
existing coal washing facilities and to aggressively pursue additional coal
deposits.
Future prospects
The group is aggressively pursuing additional coal deposits and the board is
confident of success on that front. The trading operation was negatively
affected by the mild winter conditions but there are no seasonal effects that
can impact on revenues in the second half of this financial year. The board is
therefore confident that the group will achieve the profit forecast as set out
in the prospectus dated 7 July 2005.
Wescoal Holdings Limited - Reviewed Interim Results for the six months ended
30 September 2005
The reviewed interim results for the six months ended 30 September 2005, with
pro forma comparative results for the period ended 2004 and the audited pro
forma results for the year ended 31 March 2005 are presented.
Consolidated Group Income Statements
Reviewed Unaudited pro Unaudited pro
interim forma group forma group
results for after after
Wescoal for Chandler* Chandler*
the six adjustment adjustment
months ended for the six for the year
30 September months ended ended
2005 30 September 31 March
R"000 2004 (Note 1) 2005 (Note 1)
R"000 R"000
Revenue 98,266 109,369 194,786
Gross Profit 9,157 9,509 16,677
Other operating expenses 33 47 154
Other operating costs (5,055) (3,846) (8,067)
Loss from associates - - (437)
Profit form operating 4,135 5,710 8,327
Finance costs (36) (72) (161)
Profit before taxation 4,099 5,638 8,166
Taxation (166) (2,070) (3,370)
Net profit for the year 3,933 3,568 4,796
Headline earnings
reconciliation
Net profit for the year 3,933 3,568 4,796
Less: Profit on disposal 27 27
of asset
Headline earning 3,933 3,541 4,769
Earnings per share
Ordinary in issue(000"s)
-Total at period end 103,709 86,000 86,000
-Weighted average shares 92,517 86,000 86,000
in issue
-Fully diluted weighted 92,594 86,000 86,000
average shares in issue
(Note 2)
Earnings per share
information
Attributable earnings per 4,3 4,1
ordinary share (cents) 5,6
Headline earnings per 4,3 4,1 5,5
share (cents)
Fully diluted attributable 4,2 4,1 5,6
earnings per share(cents)
Fully diluted headline 4,2 4,1 5,5
earnings per share(cents)
Notes:
(1) - The unaudited pro forma income statement was prepared on the basis that
the 100% acquisition of the shares of Chandler by Wescoal was completed on 1
April 2004.
(2) - Fully diluted earnings per share information is reflected showing the
potential effect of full dilution for 1 million options held by the Wescoal
directors to subscribe for new shares in Wescoal at 50 cents.
* Chandler Coal (Propriety) Limited (Registration number: 1996/011374/07) a
wholly-owned subsidiary of Wescoal and a company incorporated in accordance
with the law of South-Africa.
Consolidated Group balance sheets
Reviewed Unaudited pro Unaudited pro
interim forma group forma group
results for after after
the six Chandler* Chandler*
months ended adjustments adjustments
30 September 30 September 31 March
2005 2004 (Note 1) 2005 (Note 2)
R"000 R"000 R"000
IFRS IFRS GAAP
ASSETS
Non-current assets 40,433 31,845 33,806
Property, plant and 7,719 1,853 1,696
equipment
Goodwill 32,254 27,986 27,986
Interests in associate - 1,971 4,111
company
Deferred taxation 460 35 13
Current assets 31,423 32,192 21,374
Total assets 71,856 64,037 55,180
EQUITY AND LIABILITIES
Total Shareholders" funds 41,997 32,113 30,026
Shareholders" loan - - 2,265
41,997 32,113 32,291
Non-current liabilities
Long-term debt 262 - -
Current liabilities 29,597 31,924 22,889
Total equity and 71,856 64,037 55,180
liabilities
Notes:
- The unaudited pro forma balance sheet was prepared on the basis that the
100% acquisition of the shares of Chandler by Wescoal was completed on 30
September 2004.
- The unaudited pro forma balance sheet was prepared on the basis that the 100%
acquisition of the shares of Chandler by Wescoal was completed on 31 March
2005.
* Chandler Coal (Propriety) Limited (Registration number: 1996/011374/07) a
wholly-owned subsidiary of Wescoal and a company incorporated in accordance
with the law of South-Africa.
Consolidated Statement of Changes in Equity
Share Capital Share Premium Distributable Total
R"000 R"000 Reserve R"000
R"000
Balance at 1 86 29,940 - 30,026
March 2005
Share issued 118 8,953 - 9,071
Listing expenses - (1,033) - (1,033)
Earnings - - 3,933 3,933
attributable to
shareholders
Balance as at 30 204 37,860 3,933 41,997
September 2005
Group Cash Flow Statements
Reviewed Unaudited pro Unaudited pro
interim forma group forma group
results for after after
Wescoal for Chandler* Chandler*
the six adjustment adjustment
months ended for the six for the year
30 September months ended ended
2005 30 September 31 March
R"000 2004 (Note 1) 2005 (Note 1)
R"000 R"000
Net cash from operating 6,407 (3,069) 2,026
activities
Investing activities (10,765) (1,472) (3,668)
Financing activities 8,365 (63) 2,158
Net increase/(decrease) in 4,007 (4,604) 516
cash and cash equivalents
Cash and cash equivalents 768 252 252
at beginning of period
Cash and cash equivalents 4,775 (4,352) 768
at end of period
* Chandler Coal (Propriety) Limited (Registration number: 1996/011374/07) a
wholly-owned subsidiary of Wescoal and a company incorporated in accordance
with the law of South-Africa.
Accounting policies and presentation
The interim financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) for the six months ending 30
September 2005 as well as the South African Companies Act, 1973.
These are Wescoal"s first IFRS interim financial statements and the provisions
of IFRS 1 First-time adoption of International Financial Reporting Standards,
have been applied. The condensed interim financial statements have been
prepared in accordance with IAS 34.
Audit opinion
Middel & Partners have conducted certain procedure with regard to the unaudited
pro forma income statement, pro forma balance sheet and pro forma cash flow
statement of Chandler. Their unqualified review opinion is available for
inspection at Wescoal"s offices.
Middel & Partners have reviewed the financial information in terms of Rule 3.18
of the listing requirements of the JSE and their reviewed opinion is available
for inspection at Wescoal"s offices.
Thuthukile Edy Skweyiya Andre Russell Boje
Chairperson Chief Execuive Officer
15 November 2005
Designated Adviser: Exchange Sponsors (Pty) Limited (Registration number:
1999/024433/07), 39 First Road, Hyde Park, 2126
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Limited
(Registration number: 2004/003647/07), Ground Floor, 70 Marshall Street,
Johannesburg, 2000
Date: 15/11/2005 03:48:17 PM Produced by the JSE SENS Department
