| Thu 18 May 2006, 17:02 | | Kairos - Abridged audited results for the year end |
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KIR
KIR
Kairos - Abridged audited results for the year ended 28 February 2006
Kairos Industrial Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/02927/06)
Share code: KIR & ISIN: ZAE000011284
("Kairos", "the group" or "the company")
AUDITED CONSOLIDATED INCOME STATEMENT
For the Restated
for the
12 months 12 months
ended ended
28 February 28 February
(R"000) 2006 2005
Revenue 120,883 94,474
Cost of sales (92,688) (67,201)
Gross profit 28,195 27,273
Other
Operating costs (18,476) (13,640)
Operating profit before investment income, 9,719 13,633
depreciation and finance costs
Interest on loan to joint venture 1,115 1,115
Investment revenues 557 338
Profit/(loss) on disposal of fixed assets 988 (48)
Fair value adjustments 731 (656)
Depreciation and amortisation expense (3,049) (1,898)
Finance costs (2,881) (2,088)
Profit before taxation 7,180 10,396
Taxation (1,906) (313)
- Normal (701) (134)
- Capital gains (9) -
- Deferred (1,196) (179)
Net profit attributable to ordinary
Shareholders 5,274 10,083
Determination of headline earnings
Profit after taxation 5,274 10,083
(Profit)/loss on disposal of fixed assets (988) 48
Headline earnings 4,286 10,131
Number of shares on which
earnings per share is based (000"s) 252,107 252,085
Headline earnings per share (cents) 1.70 4.02
Earnings per ordinary share (cents) 2.09 4.00
AUDITED CONSOLIDATED BALANCE SHEET
At Restated at
28 February 28 February
(R"000) 2006 2005
ASSETS
Non-current assets 55,922 35,116
Property, plant and equipment 43,308 32,057
Patents and intangibles 2,815 2,815
Investments 975 244
Other 8,824 -
Current assets 40,068 38,078
Inventories 17,107 17,578
Trade and other receivables 11,680 11,775
Cash and cash equivalents 11,281 8,725
TOTAL ASSETS 95,990 73,194
EQUITY AND LIABILITIES
Stated capital and reserves 56,731 41,669
Non-current liabilities 15,154 14,630
Long-term borrowings 9,525 13,137
Deferred Taxation 2,689 1,493
BBBEE - Share creditors 2,940 -
Current liabilities 24,105 16,895
Trade and other payables 14,816 11,913
Tax liabilities 742 156
Short-term portion of long-term liability 8,547 4,826
TOTAL EQUITY AND LIABILITIES 95,990 73,194
Shares in issue (000"s) 252,107 252,085
Net asset value per share (cents) 22.50 16.53
Net tangible asset value per share (cents) 21.39 15.41
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Stated Revaluation Retained
Capital reserve Losses
1 March 2004
As previously reported under SA GAAP 210,140 - (184,584)
Effect of changes in accounting policies
- Revaluation of plant and equipment - 4,827 -
- Reversal on sale of investment property - - 39
- Deferred tax liability on revaluations - -
-
Profit for the period - - 10,083
Balance as at 28 February 2005 210,140 4,827 (174,462)
- audited IFRS restated
Profit for the period - - 5,274
Reversal on sale of fixed property - - -
Effect of changes in accounting policies
- Share issue with Odd lot offer 7 - -
- Revaluation of plant and equipment - 10,304 -
Balance at 28 February 2006 210,147 15,131 (169,188)
Non- Total
Distributable Shareholders
Reserve Funds
1 March 2004
As previously reported under SA GAAP 1,203 26,759
Effect of changes in accounting policies
- Revaluation of plant and equipment - 4,827
- Reversal on sale of investment property (39) -
- Deferred tax liability on revaluations
Profit for the period - 10,083
Balance as at 28 February 2005 1,164 41,669
- audited IFRS restated
Profit for the period - 5,274
Reversal on sale of fixed property (523) (523)
Effect of changes in accounting policies
- Share issue with Odd lot offer - 7
- Revaluation of plant and equipment - 10,304
Balance at 28 February 2006 641 56,731
Reconciliation of profit for the year ended 28 February 2005
SA GAAP as Effects of IFRS
previously transition restated
reported to IFRS
Turnover 94,474 - 94,474
Cost of Sales (67,201) - (67,201)
Gross profit 27,273 - 27,273
Operating costs (13,728) 88 (13,640)
Operating profit before investment 13,545 88 13,633
income, depreciation and finance costs
Interest on loan to joint venture 1,115 - 1,115
Investment income 338 - 338
Other losses (48) - (48)
Fair value adjustments - (656) (656)
Depreciation (2,356) 458 (1,898)
Finance costs (2,088) - (2,088)
Profit before taxation 10,506 (110) 10,396
Taxation (134) (179) (313)
Net profit attributable to ordinary 10,372 (289) 10,083
shareholders
SEGMENTAL ANALYSIS
For the Audited
12 months Year %
ended ended Change
28 February 28 February
(R"000) 2006 2005
REVENUE
Mining Supplies 52,977 45,128 17.4
Manufacturing - bricks 67,180 48,499 38.5
Property and other 726 847 (14.3)
120,883 94,474 28.0
OPERATING AND INVESTMENT INCOME
Mining Supplies 4,611 1,257 266.8
Manufacturing - bricks 6,314 11,730 (46.2)
Property and other (1,206) 646 (286.7)
Investment income 1,672 1,453 15.1
11,391 15,086 (24.5)
ABRIDGED CONSOLIDATED GROUP CASH FLOW STATEMENT
For the Restated
for the
12 months 12 months
ended ended
R"000 28 February 28 February
2006 2005
Net cash flow from operating activities 11,830 7,135
Net cash flow from investment activities (12,335) (6,373)
Net cash flow from financing activities 3,061 1,631
Net increase in cash 2,556 2,393
Cash and cash equivalents at beginning of 8,725 6,332
period
Cash and cash equivalents at end of the 11,281 8,725
period
OVERVIEW OF RESULTS
Basis of preparation
The group has adopted International Financial Reporting Standards (IFRS) for the
year ended 28 February 2006. The financial statements have been prepared in
accordance with IFRS and in compliance with the Listings Requirements of the JSE
Limited.
The accounting policies, as set out in the 2006 annual report, are consistent
with those applied in the 2005 annual report, except for those which have been
adopted for IFRS. Comparative figures have been restated, where applicable, as
required by IFRS. The group adopted the following new and revised IFRS
standards:
IAS1 Presentation of financial statements
IAS2 Inventories
IAS10 Events after the balance sheet date
IAS24 Related party transactions
IAS31 Interest in joint ventures
IAS32 Financial instruments: disclosure and presentation
IAS33 Earnings per share
IAS39 Financial instruments: recognition and measurement
In terms of paragraph 8.60 of the JSE Listings Requirements shareholders are
advised that the group"s auditors, Burn Reynolds and Company, have audited the
group annual financial statements. A copy of their unqualified audit opinion is
available for inspection at the company"s registered office.
Financial highlights
The revenue of the group for the financial year under review increased by 28% to
R120,883 million compared to R94,474 million the previous year.
The net profit after taxation amounted to R5,274 million compared to R10,083
million in the 2005 financial year. Basic earnings per share were 2.09 cents,
while headline earnings were 1.70 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 to
pursue future growth opportunities.
The company"s growth program with the emphasis on increased production volumes
and market share is on course.
REVIEW OF ACTIVITIES OF OPERATIONAL SUBSIDIARIES
Major operations
(a) Witbank Brickworks (1961) (Pty) Limited
Again this subsidiary performed according to expectation, taking the above
comments into consideration, and should further improve its contribution in the
coming financial year given the current high demand for clay bricks.
Further expansions of production capacity and possible acquisitions are being
investigated on an ongoing basis.
(b) BroKrew (Pty) Limited
Kairos" wholly owned subsidiary, Kairos Mining recently obtained the balance of
the remaining 50% shareholder"s interest in BroKrew, previously held by its
joint venture partner, as was announced in the press and on SENS.
During the year under review, the level of sales increased by 14% compared to
the previous year, due to an increase in commodity prices, and mines as a
result, increasing their development programs. BroKrew remains a major supplier
of ventilation equipment to the mining sector and with control obtained by
Kairos, various expansion strategies are currently investigated which include
organic growth into current markets as well as selective acquisitions. Brokrew
is likely to become a division of Kairos Mining during the 2007 financial year.
Minor operations
(c)Survivair rescue chambers
Marketing of the "Survivair" rescue chambers and oxygen candles to the mining
industry locally and abroad continues. With obtaining control of BroKrew, plans
are that this venture will also become a division of Kairos Mining during the
2007 financial year.
(d) Ten Cradock Avenue (Pty) Limited - Coal reserve
With new rules applying to the mining sector, Kairos applied for a prospecting
permit for the Uitspan Basin, which has a mineable reserve of 10 million tons.
If successful, an application for a mining license will be lodged.
SKILLS DEVELOPMENT
Training and development programs are continuing, providing skills training to
all levels of staff who are thus fully competent and committed to meeting the
needs of the businesses.
EMPLOYMENT EQUITY
The company is complying with the Act and encourages the internal movement and
promotion of employees.
DIVIDEND POLICY
The Board has resolved not to declare any dividends
STRATEGY
The company"s strategy remains unchanged. Its management will remain focused on
its core revenue-producing businesses - Witbank Brickworks (1961) (Pty) Limited
and BroKrew (Pty) Limited and will investigate appropriate acquisitions as they
may be identified. A strong emphasis has also during the last year been placed
on entering the coal mining arena. Further to the activities regarding our
Uitspan Reserves as reported above, Kairos Coal and Exploration (Pty) Limited
was formed with its main focus being to obtain prospecting permits on various
strategic reserves with the aim to further obtain mining licenses. The rationale
for this strategy is Kairos" strong position regarding skills and infrastructure
already at our disposal at our brick making facilities as well as a very strong
demand for coal locally and abroad.
Pretoria
18 May 2006
By order of the Board
Mr WL van Deventer (Chief Executive)
Directors: JB Oosthuizen (non-executive chairman), WL van Deventer (chief
executive), DC de la Roche, VD Mazibuko, JJ de W Mulder
Visit us at www.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
Date: 18/05/2006 05:02:09 PM Produced by the JSE SENS Department
