| Wed 1 Nov 2006, 9:40 | | Sanyati - Reviewed interim results for the six mon |
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SAN
SAN
Sanyati - Reviewed interim results for the six months ended 31 August 2006
Sanyati Holdings Limited
Incorporated in the Republic of South Africa
Registration number 1988/002538/06
JSE code: SAN ISIN: ZAE000081055
"Sanyati" or "the company"
REVIEWED INTERIM RESULTS
For the six months ended 31 August 2006
CONSOLIDATED BALANCE SHEET
Six months Year
ended ended
31 August 28 February
2006 2006
R"000 R"000
Reviewed Audited
ASSETS
Non-current assets 29 258 14 100
Property, plant and equipment 22 735 9 046
Investments 1 800 331
Goodwill 4 723 4 723
Current assets 129 667 82 599
Inventories 9 134 6 002
Work in progress 24 663 18 593
Accounts receivable 65 693 46 093
Contract retentions 13 555 9 822
Cash and cash equivalents 16 622 2 089
Total assets 158 925 96 699
EQUITY AND LIABILITIES
Capital and reserves 67 763 23 013
Share capital 33 438 1
Non-distributable reserves 3 111 3 186
Retained income 31 214 19 826
Non-current liabilities 9 743 5 275
Deferred taxation 4 754 4 754
Long-term liabilities 4 989 521
Current liabilities 81 419 68 411
Accounts payable 52 181 35 399
Current portion of long-term liabilities 4 331 17 305
Gross amount due for contract work 12 844 7 590
Provisions 1 489 1 757
Taxation payable 10 574 6 360
Total equity and liabilities 158 925 96 699
Number of ordinary shares in issue 215 000 100
Weighted average number of shares 197 310 180 000
Net asset value (cents) 34,3 12,8
Net tangible asset value (cents) 31,9 10,2
CONSOLIDATED INCOME STATEMENT
Revenue 192 544 258 958
Gross profit 29 531 29 048
Other income 6 682 9 200
Operating expenses (16 969) 13 401
EBITDA 19 244 24 847
Depreciation (2 717) (1 551)
Profit before interest and taxation 16 527 23 296
Net interest received/(paid) (594) (1 041)
Profit before taxation 15 933 22 255
Taxation (4 620) (6 456)
Net profit for the year 11 313 15 799
Minority Interest - (360)
Profit attributable to shareholders 11 313 15 439
Weighted average shares 197 310 180 000
Earnings per share (cents) 5,73 8,78
Headline earnings per share (cents) 5,73 8,78
Dividend per share (cents) - 0,55
CONSOLIDATED CASH FLOW STATEMENT
Cash (utilised)/generated by operations
Cash (utilised)/generated from operations (4 497) 12 556
Interest received 529 1 268
Dividends paid (1 000)
Interest paid (1 123) (2 309)
Taxation paid (406) (1 652)
Net cash flows from operating activities (5 497) 8 863
Cash flows from operating activities
Acquisition of property, plant and equipment (16 406) (6 292)
Proceeds from disposal of property,
plant and equipment - 1 747
(Increase) in investments (1 469) -
Net cash outflow from investing activities (17 875) (4 545)
Cash outflow from investing activities
Increase in shares issued 33 437 -
Decrease in shareholders" loans - (4 096)
Increase/(decrease) in long-term liabilities 4 468 (764)
Net cash flows from financing activities 37 905 (4 860)
Net increase/(decrease) in cash and
cash equivalents 14 533 (542)
Cash and cash equivalents at
beginning of period 2 089 2 631
Cash and cash equivalents at
end of period 16 622 2 089
SEGMENT REPORT
Revenue 192 544 258 958
Construction division 171 937 213 595
Property division 20 607 45 363
Investment division - -
Operating Profit 16 527 23 296
Construction division 10 742 17326
Property division 6 232 4 933
Investment division (447) 1 037
Total Assets 158 925 96 699
Construction division 109 293 69 907
Property division 34 025 26 045
Investment division 15 607 747
Total Liabilities 91 162 73 686
Construction division 81 542 61 222
Property division 9 298 4 845
Investment division 322 7 619
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Non-distributable Share Retained
reserve capital income Total
R"000 R"000 R"000 R"000
Balance at 28 February 2004 3 111 1 2 251 5 363
Dividend declared - - (1 000) (1 000)
Transfer to reserve 200 - 200
Net profit for the year - - 4 180 4 180
Balance at 28 February 2005 3 311 1 5 431 8 743
Net profit for the year - - 15 439 15 439
Revaluation of investment 75 - - 75
Loss on disposal of subsidiaries - - (244) (244)
Dividend declared - - (1 000) (1 000)
Realisation of non-distributable
reserves (200) - 200 -
Balance at 28 February 2006 3 186 1 19 826 23 013
Net profit for the period - - 11 313 11 313
Share issue - 33 437 - 33 437
Realisation of non-distributable
reserves (75) - 75 -
Balance at 31 August 2006 3 111 33 438 31 214 67 763
COMMENTARY
INTRODUCTION
During the interim period, on 2 June 2006, Sanyati successfully listed on Altx
as the largest construction-related company by revenue on the exchange. The
group has begun to reap the positive benefits of this listing and enhanced
profile.
While the interim period reflects mainly pre-listing trading conditions and
activities, the directors are confident that future contracts with increased
margins should yield improved returns.
The acquisition of Nyanga Roads, effective 1 March 2006, has been included in
the group"s interim results.
OPERATIONAL REVIEW
Unseasonal weather conditions, coupled with the late award of certain key
contracts and the sluggish rollout of the Zambian cellphone infrastructural
contract led to a slower than anticipated start to the year, with group turnover
accordingly slightly below forecast levels.
While Afriscan Construction remains the primary contributor to the group
turnover and profitability, most other divisions also performed well and
contributed strongly to group results. The Road Surfacing Division, after
achieving record production tonnage during June 2006, was adversely affected by
the delays in the anticipated annual re-award of tenders due to changes at the
KwaZulu-Natal Department of Transport. However, this has been offset by
Sanprop"s higher than anticipated profit margins on commercial property
developments in light of the national boom in this sector.
The operational restructure of the group in anticipation of the listing is now
bedded down and should yield greater efficiencies moving forward.
Sanyati continues to invest in training its core staff with the skills to grow
the company into a major player on equal footing with larger industry
competitors.
FINANCIAL REVIEW
The group has achieved interim profitability of R11,3 million in line with
forecast, 47% higher than the previous corresponding interim period,
notwithstanding turnover of R192,5 million, being slightly below forecast.
Turnover nevertheless reflected a 49% increase over the previous corresponding
interim period. EBITDA increased to 10,0%, from the 8,4% forecast and the 9,6%
achieved for the corresponding interim period last year. These figures compare
favorably against the turnover of R259 million and profitability of R15,8
million for the full 12 months of the previous financial year.
Headline earnings per share of 5,73 cents for the interim period, which
represent an increase of 34% over the previous corresponding interim period, is
well on track to achieving the full year forecast of 11,09 cents as set out in
the listing prospectus.
OUTLOOK
The directors are confident that present healthy order books in the group"s
divisions, further supported by upcoming awards to suppliers of major
infrastructure and road projects including King Shaka International Airport,
should enable Sanyati to meet its forecasts for the 2007 financial year. Order
books have been strategically managed to still enable the divisions to take
advantage of these opportunities at improved margins.
Investor confidence in civils, infrastructure and road construction remains
high, as reflected in an average increase of 29% over the past 12 months.
Current inflationary pressure is not expected to have a major impact with
continued growth likely to be driven by substantial government spending over the
next five years.
The directors remain confident that the forecasts for the full financial year
will be achieved.
BASIS OF PREPARATION
The interim financial statements have been prepared in accordance with IAS 34
(Interim Financial Reporting). The accounting policies used to prepare these
interim financial statements are consistent with those applied at previous year-
end and are in accordance with International Financial Reporting Standards.
No comparative figures for the six months have been shown as these have not
previously been prepared due to the listing as a consolidated group only on 2
June 2006. (For the purposes of comparatives in the commentary of this
announcement the results for the 12 months ended February 2006 have been halved
to provide an approximate interim comparative).
REVIEW OPINION
The interim financial results for the six months ended 31 August 2006 ("the
interim period") have been reviewed by Sanyati"s auditors PKF Durban. Their
unqualified report is available for inspection at the company"s registered
office.
DIVIDEND
In line with the company"s policy, no interim dividend has been declared.
Issued for and on behalf of the board on 1 November 2006.
RD Jackson MI Krouse
CEO Financial Director
Warning: The listing of the ordinary shares in the company is on Altx.
Shareholders are advised of the risks of investing in a company listed on Altx.
Shareholders are advised that the JSE does not guarantee the viability or the
success of a company listed on Altx. In terms of the JSE Listings Requirements a
designated advisor has to be retained by the company. The designated advisor is
required to, inter alia, attend all board meetings held by the company to ensure
that all JSE Listings Requirements and applicable regulations are complied with,
approve the financial director of the company and guide the company in a
competent, professional and impartial manner. If the company fails to retain the
designated advisor it must make arrangements to appoint a new designated advisor
within 10 business days, failing which the company faces suspension of trading
of its securities. If a designated advisor is not appointed within 30 days of
its suspension the company faces the termination of its listing without an offer
to minority shareholders.
Registered office and postal address
Bridelia Sanyati Park, 3 Abrey Road, Kloof, KwaZulu-Natal, 3610.
PO Box 1055 Kloof, KwaZulu-Natal, 3640
Directors
RD Jackson (CEO), MI Krouse (Financial Director), K Ramkissoon, MJ Sangweni
HM Dlamini*, N Khambule* (*Non-executive)
Company secretary
MI Krouse
Transfer secretaries
Computershare Investor Services 2004 (Pty) Limited, 70 Marshall Street,
Marshalltown, 2107
Auditors
PKF Chartered Accountants (SA)
Designated advisor
Exchange Sponsors (Pty) Limited
Date: 01/11/2006 09:40:14 AM Produced by the JSE SENS Department
