| Thu 2 Feb 2006, 17:24 | | Basil Read Holdings Limited - Reviewed Results For |
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BSR
BSR
Basil Read Holdings Limited - Reviewed Results For The 12 Months Ended 31
December 2005
Basil Read Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1984/007758/06)
Share code: BSR ISIN: ZAE000029781
("the Company")
REVIEWED RESULTS FOR THE 12 MONTHS ENDED 31 DECEMBER 2005
SUMMARISED CONSOLIDATED INCOME STATEMENT
Reviewed
12 months 12 months
31 December 31 December
2005 2004
R"000 R"000
Revenue 617 332 469 148
Operating profit/(loss) for the year 36 426 (92 756)
Profit on sale of subsidiaries - 54 780
Profit on sale of associate 877 1 793
Net finance costs (13 195) (4 680)
Profit/(loss) for the year after net finance costs 24 108 (40 863)
Profit from associates 158 287
Profit/(loss) for the year before taxation 24 266 (40 576)
Taxation 709 (1 039)
Normal and foreign taxation (2 142) (237)
Secondary Taxation on Companies - (5 510)
Deferred taxation 2 851 4 708
Profit/(loss) for the year after taxation 24 975 (41 615)
Profit/(loss) for the year attributable to
the following Equity shareholders of the Company 24 975 (42 338)
Minority interest - 723
Net profit/(loss) for the year 24 975 (41 615)
Ordinary dividends per share (cents) - 80,00
Earnings/(loss) per share (cents) 45,31 (76,84)
Fully diluted earnings/(loss) per share (cents) 45,19 (76,84)
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
Reviewed
12 months 12 months
31 December 31 December
2005 2004
R"000 R"000
Operating cash flow 54 315 (65 229)
Movements in working capital 56 918 53 681
Net cash generated from/(utilised by) operations 111 233 (11 548)
Net finance costs (13 195) (4 680)
Dividends paid (52) (43 799)
Taxation paid (376) (5 622)
Cash flow from operating activities 97 610 (65 649)
Cash flow from investing activities (7 905) 86
Cash flow from financing activities (4 448) (12 642)
Movement in cash and cash equivalents 85 257 (78 205)
Cash and cash equivalents at the beginning of the year 5 992 84 197
Cash and cash equivalents at the end of the year 91 249 5 992
SUMMARISED CONSOLIDATED BALANCE SHEET
Reviewed
31 December 31 December
2005 2004
R"000 R"000
ASSETS
Non-current assets 106 933 116 654
Property, plant and equipment 82 293 91 271
Investment property 1 500 1 000
Investments 170 180
Investments in associates 428 5 459
Deferred taxation 22 542 18 744
Current assets 159 896 85 146
Inventories 1 141 486
Trade and other receivables 67 506 40 771
Cash and cash equivalents 91 249 43 889
266 829 201 800
EQUITY AND LIABILITIES
Capital and reserves 33 385 6 533
Issued capital 58 550 58 264
Accumulated loss (29 673) (54 648)
Other reserves 4508 2 917
Non-current liabilities 24 045 33 521
Interest bearing borrowings 22 808 33 189
Deferred taxation 1237 332
Current liabilities 209 399 161 746
Trade and other accounts payable 184 027 101 766
Provisions 1833 4 191
Current portion of interest bearing borrowings 23 539 17 892
Bank overdraft - 37 897
266 829 201 800
STATEMENT OF CHANGES IN EQUITY
Reviewed
12 months 12 months
31 December 31 December
2005 2004
R"000 R"000
Issued capital
Ordinary share capital at beginning and end of
year 58 550 58 264
Accumulated (loss)/profit
GAAP reported balance at beginning of year (54 842) 29 778
IFRS transition 194 1 992
IFRS balance at beginning of year (54 648) 31 770
Net profit/(loss) for the year 24 975 (42 338)
As previously reported 24 975 (40 540)
IFRS transition - (1 798)
(29 673) (10 568)
Ordinary dividend paid during the year - (44 080)
Balance at end of year (29 673) (54 648)
Other reserves
Foreign currency translation reserve
Balance at end of year 4 508 2 917
Balance at beginning of year 2 917 2 671
Movement for the year 1 591 246
4 508 2 917
SUMMARISED CONSOLIDATED SEGMENT REPORT
Civil engineering
Plant and and opencast Building and
Total head office mining structures
R"000 R"000 R"000 R"000
Revenue 617 332 - 497 449 119 883
Operating
profit/(loss) 37 303 (7 028) 41 123 3 208
RECONCILIATION OF ASSETS, LIABILITIES AND EQUITY - IFRS
ASSETS LIABILITIES
31 December 1 January 31 December 1 January
2004 2004 2004 2004
R"000 R"000 R"000 R"000
GAAP reported 201 606 349 571 195 267 259 581
IAS 16 adjustments for
property, plant
and equipment 194 1 992 - -
IFRS reported 201 800 351 563 195 267 259 581
EQUITY
31 December 1 January
2004 2004
R"000 R"000
GAAP reported 6 339 89 990
IAS 16 adjustments for
property, plant
and equipment 194 1 992
IFRS reported 6 533 91 982
RECONCILIATION OF PERFORMANCE INDICATORS - IFRS
12 months
31 December
2004
cents
Loss per share
GAAP reported (73,58)
IAS 16 adjustments (3,26)
IFRS reported (76,84)
Headline loss per share
GAAP reported (179,41)
IAS 16 adjustments (0,31)
IFRS reported (179,72)
ADDITIONAL INFORMATION TO THE ANNUAL FINANCIAL STATEMENTS
Reviewed
12 months 12 months
31 December 31 December
2005 2004
Number of shares in issue ("000) 55 304 55 100
Headline earnings/(loss) per share (cents) 42,71 (179,72)
Fully diluted headline earnings/(loss) per
share (cents) 42,60 (179,72)
Reconciliation of basic earnings to headline
earnings R"000 R"000
Basic earnings/(loss) 24 975 (42 338)
Adjusted by
- Profit on sale of subsidiaries - (54 780)
- Profit on sale of associate (877) (1 793)
- Profit on sale of property, plant and
equipment (129) (2 525)
- Impairment loss on plant and equipment - 2 772
- Fair value gain - investment properties (427) (360)
Headline earnings/(loss) 23 542 (99 024)
Reconciliation between weighted
average number of shares and
diluted average number of shares "000 "000
Weighted average number of shares 55 126 55 100
Adjusted by - Share Incentive Scheme 140 -
Diluted weighted average number of shares 55 266 55 100
Net asset value per share (cents) 60,37 11,86
Capital expenditure for the year (R"000) 33 024 22 648
Depreciation and impairment for the year (R"000) 19 570 34 451
COMMENTARY
BASIS OF PRESENTATION
This reviewed preliminary report for the year ended 31 December 2005 complies
with IAS 34. The financial statements for the year ended 31 December 2005 have
been prepared on the basis of all International Financial Reporting Standards
("IFRS") and interpretations effective on 31 December 2005 and in the manner
required by the fourth schedule of the Companies Act of South Africa and are in
compliance with the Listings Requirements of the JSE Limited. The principal
accounting policies used in the preparation of the reviewed results for the
year ended 31 December 2005 are consistent with those applied for the year
ended 31 December 2004 in terms of IFRS. The unaudited review opinion is
available for inspection at the group"s registered office.
RESTATEMENT OF FINANCIAL INFORMATION FOR THE YEAR ENDED 31 DECEMBER 2004 UNDER
INTERNATIONAL FINANCIAL
REPORTING STANDARDS
For the year ended 31 December 2004, the Basil Read Group ("the 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 Limited, the group is required to prepare
its consolidated financial statements in accordance with IFRS for the year
ended 31 December 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 applicable at 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 decided to measure certain
individual items of property, plant and equipment at their 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 impairment losses. Under IFRS,
property, plant and equipment is still stated at cost less accumulated
depreciation and accumulated impairment losses, however the useful lives and
residual values of certain assets have been re-assessed.
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
After a number of difficult years for the group, largely as a result of the
difficult trading conditions in Africa and the decrease in value of government
projects in South Africa, the board is proud to report that 2005 was a
turnaround year for Basil Read. Profitability has been restored with a post tax
profit of R25.0 million being reported (2004: loss R42.3 million). The group"s
turnover increased by 32%, from R469 million in 2004 to R617 million at the end
of the period under review. Cash on hand grew to R91 million at year end.
The group was awarded new contracts during the period under review in excess of
R1 billion (2004: R160 million) and has a healthy order book of R1.3 billion
(2004: R640 million) at year end, which provides a favourable outlook for
future sustainable growth.
The group"s strategy to limit cross border activities due to the increasing
workload in South Africa and the risks associated with difficult conditions
when contracting outside the borders of South Africa has contributed favourably
to the profitability of the group. The group will, however, continue to work
for selected private clients in Africa.
As part of the realignment and rationalisation of the group"s asset base,
substantial non-strategic plant in the amount of R18 million was disposed of in
the year under review. New equipment to the value of R32 million was purchased
in support of new contracts and in anticipation of further awards and the group
continued with its preventative maintenance programme, in support of the
containment of costs.
In line with the streamlining of the business and the continued focus on core
activities, the group disposed of its minority interests in Ilima Projects
(Pty) Ltd and Mesure Facilities Management (Pty) Ltd during the year, which
resulted in an inflow of cash as outstanding debts with these entities were
settled.
The group successfully renewed its certification with ISO 9001:2000 and
OHSAS 18001:1999.
At the end of the year under review the group had issued guarantees in the
amount of R175 million, R110 million for the same period last year. It is not
expected that any loss will arise out of the issue of these guarantees.
With reference to the cautionary announcement dated 26 July 2005, the group is
pleased to report the successful conclusion of a black economic empowerment
("BEE") deal with Amabubesi Investments (Pty) Ltd and Metallon Ventures (Pty)
Ltd, thus making the group a black controlled company with 51.4% of the issued
share capital owned by BEE partners. The choice of partner was carefully
evaluated as the board was looking for synergies between the potential partners
and Basil Read. The group is proud of its new association with Amabubesi
Investments (Pty) Ltd and Metallon Ventures (Pty) Ltd and looks forward to a
prosperous future together.
OPERATIONAL REVIEW
Buildings
Given the difficulties and lack of work that the building division has
experienced in prior years, the growth experienced during the 3rd and 4th
quarters bodes well for the future. The new management team introduced into the
division managed to secure work at reasonable margins. Major contracts awarded
during the period include the additions and alterations to Chris Hani
Baragwanath Hospital valued at R330 million in a joint venture with Sivukile
Contractors.
Cosmo City, the mixed housing development outside Johannesburg, eventually got
the go ahead this year. Phase one of the infrastructure and housing development
is complete and sold out. Work on phase two has also commenced. Codevco (Pty)
Ltd, the development company setup for the Cosmo City development received the
National Developer of the Year award from the Institute for Housing of Southern
Africa.
Roads and civils
The roads and civils division produced outstanding results for the year. Their
focus on infrastructure development projects for both public and private
clients within South Africa has paid off. The division operates nationally in
association with two empowerment companies, namely BR Tsima (Pty) Ltd and
Newport Construction (Pty) Ltd. The division is awaiting a number of new awards
in 2006 and is expecting to continue producing good results. The progress on
the expansion to Berth 306 Richards Bay Coal Terminal is going well and is
expected to finish ahead of schedule.
Opencast mining
The division successfully concluded the contract with Debswana in Botswana and
is currently tendering on further contracts with the diamond giant. The
division continues to mine for Lonmin Platinum outside Brits.
The contract with Gallery Gold, the Australian mining house, in Botswana
continued to perform to expectations. The division has successfully
renegotiated the contract for a further two years.
PROSPECTS
The favourable economic environment in South Africa, coupled with the current
upswing in the construction industry should translate into real growth for
Basil Read. Several major projects are expected to commence in 2006, and
through the reorganisation of the group, Basil Read is well positioned to take
advantage of future opportunities.
The announcement of government"s `Infrastructure Development Programme", in
which it is anticipated that over the next 5 years government will spend in
excess of R400 billion on infrastructure development, should further improve
the industry"s prospects.
Bouygues Travaux Publics SA, a partner in the Bombela Consortium that has been
announced as preferred bidder on the Gautrain project, is still a major
shareholder in Basil Read. Our relationship with them will continue to grow and
should provide significant leverage in the coming years.
It is anticipated that the growth in the retail, light industrial and
commercial sector will continue for some time, which should further increase
turnover for 2006 and beyond.
Notwithstanding the above a major stumbling block is the current shortage of
skills experienced within the industry. In light of this the group continues
with its training program and has embarked on a recruitment drive to alleviate
any shortfall.
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 Listing
Requirements of the JSE Limited.
In line with the conclusion of our BEE deal, Non-Executive Directors Messrs P
Boiraud, C J Gazaignes, C Teresa and J M Kiviatkowski resigned from the board
and were replaced by Messrs L B Dyosi, A J Reve and Mrs N H Maliza. Mr B T
Ngcuka was appointed Non-executive Director and replaces Mr C Teresa as
Chairman.
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.
During the period under review Ultra Registrars Ltd were appointed as the
group"s transfer secretaries.
DIVIDENDS
The board has reviewed the current year"s results together with the forecasts
for 2006/7 and has decided not to declare a dividend but rather to retain the
cash reserves for future growth and expansion.
POST BALANCE SHEET EVENT
No material events have occurred between the balance sheet and the date of
these results that would have a material effect on the financial statements of
the group.
On behalf of the Board
M L HEYNS
2 February 2006
Directors: M L Heyns (Chief Executive Officer), B T Ngcuka*
(Chairman), L B Dyosi*,N H Maliza*, A J Reve*
(*Non-executive)
Group Secretary: E Kruger
Registered office: 388 Gild Road
Lilianton
Boksburg
1459
Transfer secretaries: Ultra Registrars Limited
Sponsor: Bridge Capital Services (Pty) Limited
Auditors: PricewaterhouseCoopers Inc.
Date: 02/02/2006 05:24:22 PM Produced by the JSE SENS Department
