| Thu 16 Nov 2006, 11:33 | | SAFIC Holdings Limited - Abridged prospectus |
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JSE
SIC
SAFIC Holdings Limited - Abridged prospectus
This abridged prospectus is not an invitation to the public to subscribe
for shares in SAFIC Holdings, but is issued in compliance with the Listings
Requirements of the JSE for information purposes only. The information in
this abridged prospectus has been extracted from a full prospectus issued
by SAFIC Holdings on 15 November 2006 ("the detailed prospectus"), which is
available as set in paragraph 8. At the date of listing the authorised
share capital of SAFIC Holdings comprises 500 000 000 ordinary shares with
a par value of 0.001 cent each, of which, after a private placement of 15
million ordinary shares at 100 cents per share ("the placement"), 75 186
521 shares will be in issue.
SAFIC Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2004/029691/06)
(JSE code: SIC ISIN: ZAE000088068)
("SAFIC" or "the company")
ABRIDGED PROSPECTUS
Listing of SAFIC Holdings ordinary shares ("shares") on JSE Limited ("the
JSE").
1. INCORPORATION AND HISTORY
1.1 SAFIC (`SA Fine & Industrial Chemicals") was started in October
1981 by the founder members as a manufacturer, provider and
marketer of chemical cleaning and maintenance solutions for the
engineering, mining, hospitality sectors and government
departments. SAFIC launched a proprietary range of
environmentally acceptable chemical products in 1995, and the
company has been ISO 9002 compliant since 1997. The company
earned numerous awards such as winning the Chemical Safety
category of the Mail & Guardian"s `Environmental, Greening the
Future" competition in 2005 and 2006. Its accreditations include
becoming the first African company to simultaneously receive the
ISO ("International Standards Organisation") 9001:2000, ISO 14001
and OHSAS 18001 certifications from KPMG.
1.2 SAFIC researches and develops its own range of cleaning and
maintenance chemical products and materials that are
environmentally acceptable. With a strategy of in-house
development enhanced by partnerships, it is SAFIC"s vision to
provide innovative, cost effective solutions that supports the
sustainable development programs of its customer base.
1.3 Through its empowerment subsidiary, EFIC ("Empowerment Financial
Investment Company (Pty) Ltd."), SAFIC acquired 32.3% of the
shareholding in Marley Flooring, a company well known as the
leading provider of resilient flooring, in 2004. The company,
renamed FloorworX Africa t/a Marley FloorworX, provides
comprehensive resilient flooring solutions for the commercial,
healthcare, education and corporate sectors. Subsequently, SAFIC
Holdings obtained 100% shareholding in FloorworX as part of the
listing on Altx.
1.4 SAFIC Holdings was incorporated on 13 October 2004. The company
converted to a public company on 7 November 2006.
2. NATURE OF THE COMPANY"S BUSINESS AND INDUSTRY
2.1 SAFIC is a manufacturer, provider and marketer of chemical
cleaning and flooring solutions for the engineering, mining,
hospitality sectors and government departments. SAFIC currently
services a range of customers that include government,
parastatals and blue chip companies as well as small and medium
size enterprises.
2.2 The company"s directors are the major shareholders of SAFIC
Holdings, with most of the directors having spent more than 10
years in the company"s executive management team. The company"s
head office is located at its factory in Steeledale, with the
FloorworX factory located in East London. An extensive sales and
distributions network provides coverage in South Africa and
neighboring states.
2.3 SAFIC has supported government"s empowerment initiatives since
1999. Through the implementation of a proprietary smme (small
micro and medium enterprise) development model, SAFIC was
instrumental in the development of over 200 black owned and
managed small businesses. The company not only supplies cleaning
materials to the young start-up enterprises, but also provides
SETA accredited training and support with the support contracts
signed between these enterprises and their customers. SAFIC"s
approach has resulted in the founding and growth of numerous
micro-enterprises, which resulted in the creation of more than 2
000 jobs within the companies that provide services to prominent
corporates including ESKOM and Telkom.
2.4 Black shareholding in the company after the private placing will
26.7%, with a black held staff trust having purchased 1.9% of the
issued share capital of the Group. The company"s Board of
Directors consists of, amongst others, Dr Motlatla, the chairman
of the Board, and Manne Dipico.
2.5. The Group"s revenue of R 188 million for the year that ended 30
June 2006 are primarily derived from the sale of chemical and
flooring products and the delivery of support services. Product
sales contribute at least 97 percent of the company"s turnover.
2.6 The Group provides the following core products and services:
2.6.1 Products
2.6.1.1 Environmental Solutions:
The division"s product offering includes:
2.6.1.1.1 Chemicals: A comprehensive range of
specifically formulated environmental
cleaning and maintenance solutions are
offered for use in office maintenance, metal
treatment and floorcare. Food approved
products and disinfectants are also offered.
Chemical products contribute approximately 25
% of the Group"s turnover of R188 million,
and 30 % to the profit line.
2.6.1.1.2 Mechanical Products: Mechanical products
offered by SAFIC include floor care and
cleaning machines, dispensing devices and
proportioning equipment, high pressure
washers and oil separators.
2.6.1.2 Facilities Management:
Facilities Management utilises the products and
solutions manufactured and procured by SAFIC.
Products and solutions of SAFIC are sold and
implemented at customer premises, and can be
supported by service companies trained by SAFIC,
as well as SAFIC personnel. SAFIC"s range of non-
chemical services contribute approximately 3% to
the Group"s turnover and 2% to the profit line.
2.6.1.3 Infrastructure Development:
FloorworX manufactures and imports a range of
vinyl products in order to offer the market a
complete basket of hard flooring solutions to its
customers in the governmental, industrial and
educational sectors. Infrastructure Development
contributes approximately 72 % of the group"s
turnover and contributes 68 % to the profit line.
2.6.2 Services
2.6.2.1 Environmental Solutions:
SAFIC, in partnerships with environmental
consultants and research institutions, provide
expertise in the assessment and design and
development phases of a company"s environmental
management plan. The company"s partnerships are
also utilised to support the closure phase of
companies" environmental management plans
(`EMPs").
SAFIC"s position as the leader in environmentally
acceptable chemistry, the company"s link to
leading environmental agencies and research
establishments as well as the ability to identify
and mitigate environmental risks has placed SAFIC
in a position to actively exploit opportunities in
the area of environmental technology and
consulting services. SAFIC is actively involved
in a number of environmental projects with various
government departments and corporates.
2.6.2.2 Facilities Management:
The SAFIC Training Academy is a SETA accredited
training institution that trains the employees of
SAFIC"s customers. Employees are also trained for
BEECA (Black Economic Empowerment Cleaning
Association). Companies with as little as 50
SAFIC trained workers are employed with customers,
providing cleaning and maintenance services that
utilise SAFIC"s range of products. Income derived
from these services will become major contributors
to the income stream in the foreseeable future.
2.6.2.3 Infrastructure Development:
Support by FloorworX focuses on after sales
support at the different sales centres around the
country.
3. PROSPECTS
3.1. South Africa"s chemical industry is of substantial economic
significance to the country, contributing around 5% to GDP and
approximately 25% of its manufacturing sales. South Africa"s
chemical industry is the largest of its kind in Africa.
3.2. As a supplier of chemical products and flooring solutions, SAFIC
is indirectly influenced by the determinants of the expected
growth in the industrial, mining, healthcare and hospitality
sectors:
3.2.1 Mining opportunities in South Africa is focussed on the
opening of platinum mines in the Limpopo province and
new mines opening in the Sishen area. An increase in
the number of operations will increase the demand for
environmental management solutions at new and existing
mines.
3.2.2 Industrial activities in the country and neighbouring
countries are on the increase as reflected by the
booming oil industry in Angola, thereby increasing the
need for the SAFIC range of chemicals. The
construction of new business parks, factories and
warehouses provide new opportunities for the company"s
FloorworX division.
3.2.3 The construction of new educational and health care
facilities provide the company with opportunities for
its FloorworX product range, as well as an opportunity
to tender for the delivery of chemical products and
maintenance contracts with the various government
departments.
4. SUMMARY OF HISTORICAL AND FORECAST INCOME STATEMENTS
4.1 The table below sets out the audited income statements of SAFIC
Holdings for the periods ended 30 June 2004, 30 June 2005 and 30
June 2006 and the forecast income statements for the period 30
June 2007 to 2008.
4.2 Extracts from the historical, audited and forecast income
statements
Safic Safic Safic Safic Safic
Audited Audited Audited Forecast Forecast
Year ended 30 2004 20052 2006 2007 2008
June R`000 R`000 R`000 R`000 R`000
Revenue 48 542 48 786 188 053 199 930 218 759
(Rands)
Gross profit 29 101 31 969 104 193 103 344 112 849
Other income 955 9 714 1 171 360 382
Operating 94 810 88 797 94 550
expenses 27 788 29 747
EBITDA 2 268 11 936 10 554 14 907 18 681
Depreciation 214 280 3 053 2 001 2 115
Profit before 7 501 12 906 16 566
interest and
taxation
2 054 11 656
Net interest 491 416 1 050
received /
(paid) 368 364
Profit before 7 010 12 490 15 516
taxation
1 686 11 292
Taxation 267 701 1 553 3 409 4 500
Earnings 1 419 10 591 5 457 9 081 11 016
attributable
to ordinary
shareholders
Minority 298 0 0
Interest 0 0
Profit 5 754 9 081 11 016
attributable
to
shareholders 1 419 10 591
Pro forma
weighted
average shares
in issue (1) 60 186 521 60 186 521 60 186 521 69 186 521 75 186 521
Pro forma 9.56 13.13 14.65
earnings per
share (cents) 2.36 17.60
Pro forma - - -
dividend per
share (cents) - -
Note:
1. The unaudited pro forma weighted average number of shares in
issue is used in order to reflect the effect of the share capital
restructuring on the earnings per share calculations.
2. SAFIC acquired the flooring interests of Marley SA (Pty) Limited
(FloorworX Africa) during the 2005 financial year through its 32%
shareholding in Empowerment Financial Investment Company
("EFIC"). The acquisition resulted in a R35 million negative
goodwill that was accounted for in terms of IFRS 3, Business
Combinations and written back to the income statement as "Other
income", therefore resulting in the increased profits during
2005.
5. DIRECTORS, COMPANY SECRETARY AND REGISTERED OFFICE
5.1 Full names, nationalities, ages, business addresses and functions
of the board of directors of SAFIC Holdings:
Director Age Occupation Business address
Dr Malesela David 66 Non-executive 32 Steele Street
Clement Motlatla Chairman Steeledale 2197
Frederick Cornelius 39 Managing 32 Steele Street
Platt Director Steeledale 2197
Andreas Jacobus Voogt 40 Financial 32 Steele Street
Director Steeledale 2197
Donald Ernest Platt 47 Executive 32 Steele Street
Director Steeledale 2197
Manne Emsley Dipico 47 Non-executive 32 Steele Street
Director Steeledale 2197
Note: All the above Directors are South African citizens.
5.2 Company secretary and registered office are:
GW Delport - M.Sc IS
32 Steele Street,
Steeledale,
2197
(PO Box 1754, Alberton, 1450)
Telephone: 0860 4 72342
Facsimile: 0861 4 72342
6. THE PLACEMENT
6.1 Salient features
6.1.1 The salient features of the private placement are as
follows:
Offer price per ordinary share (cents) 100
Par value per ordinary share (cents) 0.001
Premium per ordinary share (cents) 99.999
Number of ordinary shares offered in terms of 15 000 000
the private placement
Issue consideration before expenses R 15 million
6.1.2. The opening and closing dates of the private placement
are as follows:
- Opening date of private
placement at 09:00 on Thursday 16 November 2006
- Closing date of private
placement at 12:00 on Friday 17 November 2006
- Anticipated listing date on
ALTx at commencement of business
on Thursday 23 November 2006
Note:
These dates are subject to change at the discretion of the
company. Any changes will be released on SENS.
6.2 SAFIC holds irrevocable undertakings from various selected
investors to subscribe for 20 000 000 shares in terms of the
private placement, amounting to 100% of the private placement
shares.
6.3 The private placement of 20 000 000 ordinary shares have been
fully allocated to the investors who have given irrevocable
undertakings as set out in paragraph 6.2 above.
6.4 The private placement is subject to a minimum subscription,
sufficient to meet the listing requirements of the JSE, being
achieved.
7. LISTING ON THE JSE
Subject to the achievement of the required spread of 100 public
shareholders and public shareholders holding 10% of the ordinary
shares of SAFIC Holdings, the JSE has formally approved the listing of
75 186 521 ordinary shares in the share capital of SAFIC Holdings on
ALTx with effect from commencement of business on Thursday, 23
November 2006. The shares will trade under the abbreviated name
"SAFIC", with the JSE code "SIC" and ISIN ZAE000088068.
8. COPIES OF THE PROSPECTUS
Copies of the prospectus, in English, may be obtained, during business
hours, prior to the closing of the private placement, from the trading
offices of SAFIC, Exchange Sponsors (Pty) Limited and the transfer
secretaries, details of which are set out below:
- the registered office of the company - 32 Steele Street,
Steeldale, 2197
- the offices of Exchange Sponsors (Pty) Limited - 39 First Road,
Hyde Park, 2196;
- the offices of Computershare Investor Services 2004 (Pty) Limited
- Ground Floor, 70 Marshall Street, Johannesburg, 2001;
- the web-site of SAFIC Holdings at www.saficholdings.co.za.
Johannesburg
15 November 2006
Designated Adviser
Exchange Sponsors (Pty) Limited
Auditors and reporting accountants
PKF (Pta) Inc
Attorneys
Knowles Husain Lindsay Inc Attorneys
www.saficholdings.co.za
Warning: The listing of ordinary shares in the company is on ALTx.
Investors are advised of the risks of investing in a company listed on
ALTx. Investors are advised that the JSE does not guarantee the viability
or the success of a company listed on ALTx. In terms of the Listings
Requirements, the company is obliged to appoint and retain a Designated
Adviser, which is required to, inter alia, attend all board meetings held
by the company to ensure that all the 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 a Designated Adviser, it must make
arrangements to appoint a new Designated Adviser within 10 business days,
failing which the company faces suspension of trading of its securities.
If a Designated Adviser is not appointed within 30 days of its suspension,
the company faces the termination of its listing without the prospect of an
appropriate offer to minority shareholders.
Date: 16/11/2006 11:33:32 AM Produced by the JSE SENS Department
