| Mon 28 Aug 2006, 17:45 | | WBHO - Unaudited financial results for the year en |
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WBO
WBO
WBHO - Unaudited financial results for the year ended 30 June 2006
WILSON BAYLY HOLMES OVCON LIMITED
Building and Civil Engineering contractors
(Registration number 1982/011014/06)
ISIN: ZAE000009932
Share code: WBO
UNAUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2006
* +22% Revenue
* +40% Operating profit
* +40% Headline earnings
* +45% Net profit
Group Income Statement
Unaudited Audited
Year to Year to
30 June % 30 June
2006 increase/ 2005
R"000 (decrease) R"000
Revenue 5 795 118 21,6 4 765 342
Operating profit 261 839 40,0 187 061
Impairment of goodwill (4 928) (47,2) (9 341)
Fair value adjustments of
financial assets 18 130 100,0 -
Fair value of associate"s
investment 1 592 100,0 -
Profit before finance income 276 633 55,7 177 720
Finance income 36 245 62,7 22 275
Profit before finance costs 312 878 56,4 199 995
Finance costs (13 860) 289,5 (3 558)
Profit before taxation 299 018 52,2 196 437
Taxation (75 343) 87,8 (40 126)
Profit after taxation 223 675 43,1 156 311
Income from associates 5 596 220,0 1 749
Net profit 229 271 45,1 158 060
Attributable to
Equity shareholders of the parent 197 668 43,9 137 376
Minority interests 31 603 52,8 20 684
229 271 45,1 158 060
Reconciliation of headline earnings
Net profit 197 668 137 376
Adjustments
Impairment of goodwill 4 928 9 341
Profit on sale of property,
plant and equipment (net of tax) (7 437) (7 147)
Headline earnings 195 159 39,8 139 570
Shares in issue ("000s) 55 491 55 491
Earnings per share (cents) 356,2 43,9 247.6
Headline earnings per share (cents) 351,7 39,8 251.5
Group Balance Sheet
Unaudited Audited
Year to Year to
30 June 30 June
2006 2005
R"000 R"000
ASSETS
Non-current assets 674 486 513 104
Property, plant and equipment 513 177 387 332
Goodwill 76 220 38 874
Investment in associates 22 567 22 739
Financial assets 19 295 1 113
Held-for-trade financial assets 43 227 63 046
Current assets 2 333 803 1 778 075
Inventories 201 897 91 079
Contracts in progress 1 253 615 939 658
Other financial assets 239 969 192 644
Cash and cash equivalents 638 322 554 694
Total assets 3 008 289 2291 179
EQUITY AND LIABILITIES
Capital and reserves 762 778 562 774
Ordinary share capital and reserves 702 467 522 155
Minority interests 60 311 40 619
Non-current liabilities 194 485 111 036
Long-term financial liabilities 160 889 50 503
Deferred taxation 33 596 60 533
Current liabilities 2 051 026 1 617 369
Current portion of long-term
financial liabilities 51 666 16 192
Provisions 215 011 137 470
Other financial liabilities 1 655 530 1 379 622
Taxation 116 500 68 724
Bank overdrafts 12 319 15 361
Total equity and liabilities 3 008 289 2 291 179
Net tangible asset value per share (cents) 1 129 871
Group Cash Flow Statement
Unaudited Audited
Year to Year to
30 June 30 June
2006 2005
R"000 R"000
Cash flow from operations
Operating profit before working capital
changes 409 518 278 511
Working capital changes (165 492) (11 958)
Cash generated by operations 244 026 266 553
Finance income 36 245 22 275
Finance costs (13 860) (3 558)
Taxation paid (55 218) (38 572)
Dividend paid (38 288) (30 520)
Cash retained from operations 172 905 216 178
Cash flow from investing activities
Change in financial assets (9 786) 3 367
Change in held-for-trade financial assets 19 819 8 142
Acquisition of subsidiary (50 805) (17 000)
Investment in associates 3 792 (11 850)
Purchase of property, plant and equipment (200 372) (173 550)
Proceeds from the sale of property,
plant and equipment 25 997 23 519
Foreign currency translation reserve 16 268 18 658
Cash flow after investing activities (22 182) 67 464
Cash flow from financing activities
Long term financial liabilities raised 111 835 27 823
Net increase in cash and cash equivalents 89 653 95 287
Cash and cash equivalents at the beginning
of the year 539 333 323 421
(Overdraft)/cash acquired on acquisition
of subsidiary (2 983) 120 625
Cash and cash equivalents at the end
of the year 626 003 539 333
Segmental Information
Unaudited Audited
Year to Year to
30 June 30 June
2006 2005
R"000 R"000
PRIMARY SEGMENTS
Revenue
- Building, civil and
property development 76,2 4 412 484 80,4 3 829 266
- Roads and earthworks 20,1 1 166 416 19,6 936 076
- Industrial and
concessions 3,7 216 218 0,0 -
100,0 5 795 118 100,0 4 765 342
Operating profit
- Building, civil and
property development 60,0 157 070 63,8 119 364
- Roads and earthworks 27,3 71 392 36,2 67 697
- Industrial and
concessions 12,7 33 377 0,0 -
100,0 261 839 100,0 187 061
SECONDARY SEGMENTS
Revenue
- Local 69,2 4 012 234 55,6 2 648 195
- International 30,8 1 782 884 44,4 2 117 147
100,0 5 795 118 100,0 4 765 342
Operating profit
- Local 66,7 174 755 44,1 82 412
- International 33,3 87 084 55,9 104 649
100,0 261 839 100,0 187 061
Statement of Changes in Equity
Unaudited Audited
Year to Year to
30 June 30 June
2006 2005
R"000 R"000
Capital and
reserves at the
beginning of the
year 522 155 396 641
Net profit for the
year 229 271 158 060
Attributable to
minority interests (31 603) (20 684)
Movement in foreign
currency translation
reserve 16 268 18 658
Movement in other reserves 4 350
Employee share scheme
reserve (IFRS2) 314
Dividend paid (38 288) (30 520)
Capital and reserves
at the end of the
year 702 467 522 155
Comments
Financial review
We are pleased to report that WBHO has recorded increased earnings for the 13th
consecutive year. The group achieved headline earnings per share of 351,7
cents, an increase of 39,8% over the previous year. This was partly due to an
increase of R20 million in the fair value of our concessions and investments.
If this amount was eliminated, earnings per share from operations would be 320
cents per share, an increase of 29% over the previous year.
Revenue reached a level of R5,8 billion, an increase of R1 billion compared to
last year. This year the growth has been mainly in South Africa with foreign
revenue showing a 19% decrease.
Cash balances have increased by R86 million over the year despite increased
capital spend and a higher working capital demand due to the increased revenue
levels.
A final dividend of 54 cents per share has been declared, giving a total
dividend for the year of 81 cents per share, an increase of 28,6% compared to
2005.
Building, civil engineering divisions and property development
The local building market has been exceptionally busy and this has resulted in
increased revenue and higher profit margins. All the regions performed well for
the year with the exception of KwaZulu-Natal where a long-term contract tendered
at a low margin incurred losses.
Probuild Constructions (Aust) Pty Limited, our Australian subsidiary, recorded
an increase in profits despite a decrease in revenue. There has been no common
trend in the Australian construction industry; Melbourne and Sydney have been
quiet and therefore competitive whilst both Brisbane and Perth experienced boom
conditions.
As predicted last year the civil engineering division has done well this year
with increased revenue and profit. The number of capital projects launched by
the mining industry has improved during the year and this trend should continue
in the medium term.
The property development division"s main focus has been on the development of
its two residential estates, Simbithi Eco-Estate in Ballito, KwaZulu-Natal, and
the St Francis Links Golf Estate in the Eastern Cape. The infrastructure for
both estates will be completed by the end of this year. Transfers of property
have taken longer than expected and this has delayed the recognition of profit
from these ventures as well as negatively affecting our gearing and cash flow.
Roads and earthworks division
Both the South African and overborder operations increased their revenue and
contract profits compared to last year. Profit margins would have been higher
were it not for the Zandamela contract in Mozambique which produced substantial
revenue but broke even as the expected losses were written off last year. In
March this year the division acquired a 51% share in Matkovich and Hayes (Pty)
Limited, a company specialising in golf course construction.
Industrial and concessions
Capital Africa Steel (Pty) Limited (CAS), a wholly-owned subsidiary of the
group, has performed well ahead of its profit and revenue budgets for the year
and is budgeting for further increases in 2007. CAS has interests in Reinforced
Mesh Solutions group of companies, which manufactures reinforcing steel and
mesh, primarily for the construction industry and in Dywidag Systems
International (Pty) Limited, which manufactures steel roof bolts and anchors for
the mining industry.
During the year our concession division has completed an office complex adjacent
to the dti Campus in Pretoria. This office complex was fully let on long-term
leases and we have exited this project by selling our share to our co-developers
at a satisfactory return. Our significant ongoing BOT projects are the N4
Platinum Highway, which is currently performing in line with our original
forecasts, and the Matola Gas Company in Mozambique where we hold a stake
through our investment in Gigajoule International (Pty) Limited. This project is
running well and prospects for increasing gas sales are good.
Black economic empowerment (BEE)
The Construction Charter has been finalised and is currently under third-party
review by the Department of Trade and Industry. We are in the final stages of
negotiating our BEE ownership structure. The details of this initiative will be
announced in September. Other aspects of the scorecard, such as employment
equity, training, enterprise development and procurement, continue to be
addressed by management.
Prospects
We start the next financial year with an order book of R6,1 billion (2005: R4,2
billion). The construction industry is very active at present and we believe
this trend will continue for the next few years. The infrastructure spend by
government and state-owned enterprises is hampered by slow delivery but we
expect that this will accelerate in the near future. This spend has begun with
work coming from ACSA and Eskom, and the Soccer World Cup work is becoming a
reality. Civil works for the mines looks promising with an increase in capital
projects coming from that sector. The risks facing the industry are shortages
of skills and the supply of certain materials. Increases in interest rates could
also affect growth in the commercial building sector. Nevertheless, we believe
that there should still be good construction opportunities until at least 2010.
Accounting policy and consistency
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS), the South African Companies
Act of 1973, as amended, and the JSE Listings Requirements. The principal
accounting policies used in the preparation of the unaudited results for the
year ended 30 June 2006 are consistent with those applied for the unaudited
interim report for the six months ended 31 December 2005 in terms of IFRS. In
adopting the exemption allowed in terms of IFRS 1, the cumulative translation of
gains and losses recognised as Foreign Currency Translation Reserve (FCTR) in
the statement of movements in equity at 30 June 2004 was set to zero.
The group makes estimates and assumptions concerning the future, particularly as
regards construction profit recognition, provisions, arbitrations, claims and
fair values of financial assets. The resulting accounting estimates can, by
definition, only approximate the actual results. Estimates and judgments are
continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under
the circumstances.
Dividend declaration
Notice is hereby given that a final dividend of 54 cents per share 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, 20 October 2006, the record
date. The last day to trade cum dividend will be Friday, 13 October 2006 and
the shares will trade ex divided on Monday, 16 October 2006. Payment of the
dividend will be made on Monday, 23 October 2006.
Share certificates may not be dematerialised or rematerialised between Monday,
16 October 2006 and Friday, 20 October 2006, both dates inclusive.
On behalf of the board
M S Wylie J W Abbott
Chairman Director 29 August 2006
Date: 28/08/2006 05:45:55 PM Produced by the JSE SENS Department
