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LAB
LAB
Labat Africa Limited - Reviewed Results For The Year Ended 28 February 2006
LABAT AFRICA LIMITED
(Incorporated in the Republic of South Africa)
Share code: LAB & ISIN: ZAE000018354
(Registration number 1986/001616/06)
("Labat" or "the group")
REVIEWED RESULTS FOR THE YEAR ENDED 28 February 2006
GROUP CONSOLIDATED INCOME Reviewed Audited
STATEMENT
12 months 12 months
28 February 28 February
2006 2005
(R"000) (R"000)
Revenue 156 059 193 867
Continuing operations 144 899 130 814
Discontinued operations 11 160 63 053
Operating income before 42 929 (3 328)
depreciation and
amortisation
Continuing operations 42 112 3 189
Discontinued operations 817 (6 517)
Depreciation and (20 161) (22 693)
amortisation
Continuing operations (19 689) (20 613)
Discontinued operations (472) (2 080)
Operating profit/(loss) 22 768 (26 021)
before interest and taxation
Continuing operations 22 423 (17 424)
Discontinued operations 345 (8 597)
Interest paid (5 957) (9 503)
Continuing operations (5 951) (6 501)
Discontinued operations (6) (3 002)
Interest received 213 541
Continuing operations 213 430
Discontinued operations - 111
Profit/(loss) before 17 024 (34 983)
taxation, sale and fair
value adjustments
Continuing operations 16 685 (23 495)
Discontinued operations 339 (11 488)
Sale of investments and fair (7 299) (27 650)
value adjustments
Loss on sale of a subsidiary (19 159) (2 343)
Negative goodwill on 1 943
acquisition of subsidiary
Impairment on discontinuing - (30 156)
operations
Revaluation surplus on - (2 906)
property
Profit on sale of a 11 860 -
subsidiary
Profit/(loss) before 9 725 (62 633)
taxation
Taxation (12 829) 4 109
Continuing operations (12 727) (4 966)
Discontinued operations (102) 9 075
Loss after taxation (3 104) (58 524)
Attributable to
Minority interest 15 805 4 423
Equity holders (18 909) (62 947)
Loss attributable to (3 104) (58 524)
shareholders
Shares in issue throughout 184 415 184 415
the period (000)
Basic loss per share (cents) (10.3) (34.1)
Headline loss per share (6.3) (19.3)
(cents)
Reconciliation of basic to
headline loss
Basic earnings (18 909) (62 947)
Profit on sale of fixed (99) (321)
assets
Negative goodwill - (1 943)
Loss on sale of subsidiary 19 159 2 343
Impairment of investments - 30 156
and assets
Profit on sale of (11 860) -
subsidiary
Revaluation of property - (2 906)
Headline earnings (11 709) (35 618)
GROUP CONSOLIDATED BALANCE Reviewed Audited
SHEET
28 February 28 February
2006 2005
(R"000) (R"000)
ASSETS
Property, plant and 43 463 53 726
equipment
Intangible assets 31 076 34 984
Investments 2 2 032
Deferred taxation 21 247 22 492
Non-current assets 95 788 113 234
Cash 12 398 3 295
Inventories 13 454 22 196
Accounts receivable 50 961 89 933
Instalment sale debtors - 56 702
Trade and other 50 961 33 231
receivables
Current assets 76 813 115 424
Total assets 172 601 228 658
EQUITY AND LIABILITIES
Share capital and reserves 49 124 69 878
Share capital 1 844 1 844
Share premium 48 855 48 855
Non-distributable reserves 2 420 2 420
Distributable reserves (3 995) 16 759
Share capital and reserves 49 124 69 878
Outside shareholders 16 512 8 584
Total shareholders" funds 65 636 78 462
Long-term liabilities 35 020 22 665
Deferred taxation 1 232 2 835
Non-current liabilities 36 252 25 500
Bank overdraft 5 64 879
Bank overdraft 5 27 664
Instalment sale bank finance - 37 215
Accounts payable 70 708 59 817
Short-term debt 13 693 12 431
Trade creditors and other 50 499 42 162
payables
Taxation 6 516 5 224
Current liabilities 70 713 124 696
Total equity and liabilities 172 601 228 658
Number of shares in issue 184 415 184 415
("000)
Total net asset value per 27 38
share (cents)
CASH FLOW STATEMENT Reviewed Audited
28 February 28 February
2006 2005
(R"000) (R"000)
Net flow from operating (2,096) 10 071
activities
Net flow from investing 5 297 (21 639)
activities
Net flow from financing 5 897 9 512
activities
Net increase/(decrease) in 9 098 (2 056)
cash
Cash at beginning of year 3 295 5 351
Cash at end of year 12 393 3 295
STATEMENT OF CHANGES IN EQUITY
Share Share Non- Distributable Capital
Distributable and
(R"000) Capital Premium Reserves Reserves Reserves
Balance at 1 1 844 48 855 2 420 16 759 69 878
March 2005
Loss for the - - - (18 909) (18 909)
year
Prior year - - - (1 845) (1 845)
adjustments
Balance at 28 1 844 48 855 2 420 (3 995) 49 124
February 2006
COMMENTARY
The group has continued with its restructuring programme including its disposal
of non-core assets. This has resulted in a return to profitability and has left
the group with a more streamlined business which is well placed to take
advantage of the upswing in the economy.
INCOME STATEMENT
Revenue
The various disposals have led to a R37,808 million reduction of group revenue
to R156,059 million from R193,867 million in the previous year.
EBITDA
There has been a huge turnaround of R46,257 million in the EBITDA from a loss of
R3,328 million in the previous year to a profit of R42,929 million in the
current year.
Profit Before Income Tax, Sales and Fair Value Adjustments
This has improved by R52,007 million from a loss of R34,983 million in the
previous year to a profit of R17,024 million in the current year.
Disposals
The impairment on the disposals of discontinued operations has now been fully
realised and has resulted in a once off loss of R7,299 million.
Interest
Interest paid has been reduced by R3,546 million due to the elimination of bank
overdraft and instalment finance debt.
BALANCE SHEET
The most significant change to the Balance Sheet during the past year has been
the total turnaround in the group"s cash position. Bank overdrafts and
Instalment sale finance have been reduced from R64,879 million to R5,000. Group
cash resources have increased by R9,103 million from R3,295 million to R12,398
million.
Restructuring
The restructuring/disposal process is now almost complete, leaving the group
with two main core businesses, Labat Traffic Solutions and SAMES .
Labat Traffic Solutions
Labat Traffic Solutions continues to record excellent year on year growth in
revenue and profits and continues to grow its technology base, its service
offering and its business. The business now has proven technology and a business
model that is expected to deliver enhanced earnings as a result of the
implementation of many new contracts. Negotiations are at an advanced stage with
various municipalities who have seen the benefits of Labat Traffic Solutions"s
superior technology and business model and we are projecting similar growth in
the years ahead. The business is launching new services to enhance its offering
to our existing client base which should result in good future profits.
SAMES
The business is now back on track and is almost at break even and projecting
profits for 2007. A substantial new project, which will see SAMES improving its
technology to the 0.8 micron level is well on track. This project is accompanied
by a Euro22 million revenue contract over the next few years. Funding for the
project has been sourced via the DTI Industrial Participation Programme. New
equipment has been sourced for this project and the technology transfer has
taken place. Production will start in the second half of the year.
Conclusion
Labat is now well on the way to a substantial recovery and is projecting profits
for the year ahead. The board of Labat would like to thank those who have
supported us through our recent difficult times; our management, staff,
shareholders and especially our bankers, suppliers and customers.
Accounting Policies
The results have been prepared in accordance with the group"s accounting
policies which have been consistently applied with International Financial
Reporting Standards ("IFRS"). The following accounting policies were applied for
IFRS reporting:
AC 140 (IFRS 3 revised 2004) Business Combinations - Goodwill on consolidation
is no longer amortised but is tested annually for impairment as from 1 March
2004. Negative goodwill is recognised immediately in profit and loss.
AC 105 (IAS 17) Operating Leases are recognised as an expense on a straight line
basis over the lease term.
Reviewed opinion
The results for the year ended 28 February 2006 have been reviewed by the
group"s auditors, RAIN, and their unqualified review opinion is available for
inspection at the group"s registered office.
Renewal of cautionary
Further to the cautionary announcement dated 4 May 2006, shareholders are
advised that Labat is involved in negotiations which, if successfully concluded,
may have a material effect on the price at which Labat"s shares trade.
Accordingly, shareholders are advised to continue to exercise caution when
trading in Labat shares on JSE Limited until a further announcement is made.
For and on behalf of the board
B G VAN ROOYEN
31 May 2006
Directors: B.G. van Rooyen (Chairman); D. M. Asmal (Financial Director) D. J.
O"Neill (Non executive);
V. J. Labat (Non executive); M. J. Shabangu (Executive); R. C. I. Serobe (Non
Executive)
Registered Office Auditors
Island House RAIN
Constantia Office Park 3rd Floor
Corner 14th Avenue and Hendrik 30 Melrose Boulevard
Potgieter Road Melrose Arch
Weltevreden Park, 1709 2196
Private Bag X09-248
Weltevreden Park, 1715 Sponsor
Merchant Sponsors (Proprietary)
Transfer Secretaries Limited
Computershare Investor Services
(Proprietary) Limited
70 Marshall Street
Johannesburg, 2001
P O Box 61051
Marshalltown, 2017
Date: 31/05/2006 05:15:20 PM Produced by the JSE SENS Department
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