| Mon 27 Feb 2006, 17:06 | | WBHO Unaudited Interim Results For The Six Months |
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WBO
WBO
WBHO Unaudited Interim Results For The Six Months Ended 31 December 2005
WILSON BAYLY HOLMES - OVCON LIMITED Building & civil engineering contractors
(Registration No. 1982/011014/06)
ISIN No: ZAE 000009932 Sharecode: WBO
WBHO UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2005
Net income up 50%
Headline earnings up 43%
Distribution to shareholders up 29%
GROUP INCOME STATEMENT
UNAUDITED AUDITED
Six months to Six months to Year to
31 December 31 December 30 June
2005 2004 2005
R"000 R"000 R"000
Gross revenue 2 908 134 2 236 873 4 765 342
Operating income 123 281 95 510 187 061
Investment income 11 033 10 515 22 275
Income before finance costs 134 314 106 025 209 336
Finance costs (1 856) (709) (3 558)
Income before taxation 132 458 105 316 205 778
Taxation (34 734) (29 375) (40 126)
Income after taxation 97 724 75 941 165 652
Impairment of goodwill - (4 021) (9 341)
Fair value of concessions 6 250 - -
Income from associates -
trading 2 734 909 1 749
Income from associates -
fair value of concession 9 362 - -
Income attributable to
ordinary shareholders 116 070 72 829 158 060
Outside shareholders"
interest (19 474) (8 215) (20 684)
Net income 96 596 64 614 137 376
Reconciliation of headline
earnings
Net income 96 596 64 614 137 376
Add back:
Impairment of goodwill - 4 021 9 341
Profit on sale of property,
plant and equipment (net
of tax) (1 442) (1 954) (7 147)
Headline earnings 95 154 66 681 139 570
Shares in issue ("000) 55 491 55 491 55 491
Earnings per share (cents) 174,1 116,4 247,6
Headline earnings per share
(cents) 171,5 120,2 251,5
Dividend per share (cents) 27,0 21,0 63,0
GROUP STATEMENT OF CHANGES IN EQUITY
UNAUDITED AUDITED
Six months to Six months to Year to
31 December 31 December 30 June
2005 2004 2005
R"000 R"000 R"000
Capital and reserves at
beginning of period 522 155 396 641 396 641
Net income for the period 96 596 64 614 137 376
Foreign currency translation
reserve (41 695) (2 390) 18 658
Dividend paid (23 306) (18 867) (30 520)
Capital and reserves at end
of period 553 750 439 998 522 155
GROUP CASH FLOW STATEMENT
UNAUDITED AUDITED
Six months to Six months to Year to
31 December 31 December 30 June
2005 2004 2005
R"000 R"000 R"000
Cash flow from operating
activities
Operating income before
working capital changes 173 327 110 333 278 511
Working capital changes (66 023) 24 572 (11 958)
Cash generated from
operations 107 304 134 905 266 553
Investment income 11 033 10 515 22 275
Finance costs (1 856) (709) (3 558)
Taxation paid (42 765) (24 330) (38 572)
Dividend paid (23 306) (18 867) (30 520)
Cash retained from
operations 50 410 101 514 216 178
Net cash flow from investing
activities (154 468) (58 878) (148 714)
Net cash flow from financing
activities 63 673 17 783 27 823
Net (decrease)/increase in
cash and cash equivalents (40 385) 60 419 95 287
Cash and cash equivalents at
beginning of the period 539 333 323 421 323 421
(Overdraft)/cash acquired on
acquisition of subsidiary (5 812) 120 186 120 625
Cash and cash equivalents at
end of the period 493 136 504 026 539 333
SEGMENTAL REPORT
Six months to Six months to Year to
31 December 31 December 30 June
% 2005 % 2004 % 2005
R"000 R"000 R"000
Primary
segments
Gross revenue
- Building,
Civil and
Property
Development 78,8 2 291 298 79,1 1 769 093 80,4 3 829 266
- Roads and
Earthworks 20,0 583 101 20,9 467 780 19,6 936 076
- Manufacturing
and
Concessions 1,2 33 735 - - - -
100,0 2 908 134 100,0 2 236 873 100,0 4 765 342
Operating
income
- Building,
Civil and
Property
Development 73,6 90 680 58,4 55 793 63,8 119 364
- Roads and
Earthworks 22,3 27 554 41,6 39 717 36,2 67 697
- Manufacturing
and
Concessions 4,1 5 047 - - - -
100,0 123 281 100,0 95 510 100,0 187 061
Secondary
segments
Gross revenue
- Local 64,2 1 867 952 56,4 1 261 725 55,6 2 648 195
- Interna-
tional 35,8 1 040 182 43,6 975 148 44,4 2 117 147
100,0 2 908 134 100,0 2 236 873 100,0 4 765 342
Operating
income
- Local 53,7 66 186 49,8 47 572 44,1 82 412
- Interna-
tional 46,3 57 095 50,2 47 938 55,9 104 649
100,0 123 281 100,0 95 510 100,0 187 061
GROUP BALANCE SHEET
UNAUDITED AUDITED
Six months to Six months to Year to
31 December 31 December 30 June
2005 2004 2005
R"000 R"000 R"000
ASSETS
Non-current assets 610 260 439 730 513 104
Property, plant and equipment 440 887 305 659 387 332
Investments in associates 37 326 14 609 22 739
Investments and loans 80 222 81 826 64 159
Intangible assets - goodwill 51 825 37 636 38 874
Current assets 1 780 593 1 247 775 1 778 075
Inventories 129 501 25 722 91 079
Contracts in progress 993 798 553 219 939 658
Accounts receivable and
prepayments 147 605 127 121 192 644
Cash and cash equivalents 509 689 541 713 554 694
Total assets 2 390 853 1 687 505 2 291 179
EQUITY AND LIABILITIES
Capital and reserves 620 029 470 629 562 774
Ordinary share capital and
reserves 553 750 439 998 522 155
Outside shareholders"
interest 66 279 30 631 40 619
Non-current liabilities 190 980 98 934 111 036
Long-term borrowings 130 933 27 905 50 503
Deferred tax 60 047 71 029 60 533
Current liabilities 1 579 844 1 117 942 1 617 369
Current portion of long-term
borrowings 16 367 11 364 16 192
Accounts payable and
provisions 1 476 534 1 007 750 1 517 092
Bank overdrafts 16 553 37 687 15 361
Taxation 70 390 61 141 68 724
Total equity and liabilities 2 390 853 1 687 505 2 291 179
Net tangible asset value
per share (cents) 904,5 725,1 870,9
ACCOUNTING POLICIES
With effect from 1 July 2005 the group adopted the International Financial
Reporting Standards (IFRS). The group has applied certain exemptions allowed
under IFRS 1 "First-time Adoption of IFRS". The consolidated interim financial
statements of the group have thus been prepared in accordance with IFRS and the
requirements of the Companies Act in South Africa.
On adoption of IAS 21 "The Effects of Changes in Foreign Exchange Rates", the
group applied the exemption allowed under IFRS1 whereby IAS 21 is applied
prospectively and cumulative foreign currency translation gains or losses at 30
June 2005 are set at zero.
The residual values of plant and equipment (IAS 16 "Property, Plant and
Equipment") have been assessed at each reporting date in terms of the group"s
accounting policy. As a result thereof it has not been necessary to restate
figures for the comparative periods.
IFRS 2 "Share-based Payments" has been applied to the group share scheme. There
has been no material impact from the application of this statement on the
interim financial statements.
COMMENTS
Overview of results The group has achieved good results for the six months ended
31 December 2005. Headline earnings have increased by 43% and earnings per share
are up by 50%. A dividend of 27 cents has been declared, a 29% increase compared
to December 2004. Revenue increased by 30% to R2 908 million.
Income from the concession assets was generated for the first time during the
period. Consequently the concession assets have been fairly valued in accordance
with IAS 39: Financial Instruments: Recognition and Measurement and a fair value
adjustment of R15,6 million was recognised in income during the period. This
contributed an additional 28 cents to the earnings per share for the period
under review.
Operating income increased to R123,3 million, an increase of 29% compared to
December 2004. The operating margin achieved for the period was 4,2% compared to
3,9% in June 2005. Margins should show a further increase during the next six
months.
The cash position has reduced from R539 million in June 2005 to R493 million in
December 2005, due mainly to the additional working capital required arising
from the increase in revenue. The additional activity also required an
investment of R87 million in property and equipment during the period. This was
an increase of R27 million compared to the previous period.
Roads and Earthworks The division achieved both its revenue and profit budgets
for the period. It starts the second half of the year with an order book of R1,1
billion and despite widespread rains during January and February, it should
nevertheless achieve its targets for the full year. The division"s major road
contracts in Swaziland and the Eastern Cape are progressing according to plan
and the EN1 road contract in Mozambique should be completed in July without
affecting current earnings. Further into Africa the division is constructing a
tailings dam for a gold mine in Ghana, and in Tanzania the open cast mining
operation will continue well into the next financial year. Negotiations are
currently taking place to increase the division"s activity in both these
countries as well as Zambia.
Building, Civil and Property Development Building activity is at an all-time
high and the division has an order book of R4,6 billion. The Gauteng and Western
Cape regions continue to operate at full capacity. The Eastern Cape also has a
full order book and is expected to more than double its revenue this year. The
group has also been operating at full capacity in KwaZulu-Natal, but
unfortunately profits have not kept pace with the increase in contracting
revenue. This has been mainly due to the performance of a large long-term
contract awarded to the division in more competitive times.
Despite a downturn in its major markets, our Australian subsidiary, Probuild
Constructions (Probuild), has managed to achieve its targets which are similar
to those for the previous period. However, the strong rand has adversely
affected these results on translation.
Work on civil projects has shown an increase in tempo over the period and
budgets have been exceeded. However, the contribution from this sector is small
at present but should start to become more significant in the future.
The group"s two golf course developments are proceeding well, but transfers to
individual buyers have taken longer than anticipated, pushing out the expected
profit stream further into the future.
The division expects to achieve its targeted revenues and profits for the year
ended June 2006.
Manufacturing and Concessions Capital Africa Steel (Pty) Limited became a
wholly-owned subsidiary in August 2005 and is currently trading at better than
budget, a trend which should continue for the rest of the year.
Black Economic Empowerment The final draft of the Construction Industry"s
charter has been agreed and is expected to be signed in March 2006. In addition,
the final draft codes from the Department of Trade and Industry have been
published and consequently the group is now in a position to determine its own
BEE ownership strategy and this should be finalised by the end of the year.
Prospects The order book has grown to R5,7 billion (June 2005: R4,2 billion) of
which R1,2 billion is attributable to Probuild and the group expects to achieve
higher growth in the next six months after excluding the fair value adjustments
made in this period.
Dividend declaration Notice is hereby given that an interim dividend of 27
cents per share (2005: 21 cents) in respect of the year ended 30 June 2006 has
been declared payable to all shareholders recorded in the register of the
company on Friday, 21 April 2006, the record date. The last day to trade cum
dividend will be on Wednesday, 12 April 2006 and the shares will trade ex
dividend on Thursday, 13 April 2006. Payment of the dividend will be made on
Monday, 24 April 2006. Shares may not be dematerialised or rematerialised
between Thursday, 13 April 2006 and Friday, 21 April 2006, both days inclusive.
By order of the board
MS Wylie JW Abbott
Chairman Director 27 February 2006
WILSON BAYLY HOLMES - OVCON LIMITED Building & civil engineering contractors
(Registration No. 1982/011014/06) ISIN No: ZAE 000009932 Sharecode: WBO
Date: 27/02/2006 05:06:37 PM Produced by the JSE SENS Department
