| Tue 28 Nov 2006, 10:21 | | Esor Limited - Interim results for the period 31 A |
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ESR
ESR
Esor Limited - Interim results for the period 31 August 2006
Esor Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1994/000732/06)
Share Code: ESR
ISIN Code: ZAE000078408
INTERIM RESULTS FOR THE PERIOD ENDED 31 AUGUST 2006
HIGHLIGHTS
Headline Earnings up 33%
HEPS up 13%
NTAV up 115%
Cash balance of R35 million
Acquisition of Franki Africa successfully concluded
Consolidated balance sheet
31 31 28 February
August(Revie August(Review (Audited)
wed)2006 ed)2005 2006
R"000 R"000 R"000
Assets
Property, plant and equipment 26 994 9 989 20 463
Investment property - 56 -
Investments - 12 -
Current assets 71 620 42 860 40 723
Total assets 98 614 52 917 61 186
Equity and liabilities
Capital and reserves 64 031 24 834 36 940
Non-current liabilities 7 101 5 229 4 797
Current liabilities 27 482 22 854 19 449
Total equity and liabilities 98 614 52 917 61 186
Number of shares in issue 120 000 000 100 000 00 100 000 000
Net asset value per share 53.36 24.83 36.94
(cents)
Tangible net asset value per 53.36 24.83 36.94
share (cents)
Consolidated income statement
6 months ended Year ended
31 August 31 August Change 28 February
(Reviewed) (Reviewed) % (Audited)
2006 2005 2006
R"000 R"000 R"000
Revenue 76 858 77 687 (1) 125 393
Gross profit 17 791 14 117 26 26 622
Other income 184 146 1 057
Operating costs (3 892) (3 366) (7 061)
Earnings before 14 083 10 897 20 618
interest, tax,
depreciation and
amortisation
Depreciation (994) (704) (2 650)
Profit before interest 13 089 10 193 17 968
and taxation
Interest paid (267) (191) (489)
Interest received 1 319 432 982
Profit before taxation 14 141 10 434 18 461
Taxation (4 118) (2 830) (5 122)
Profit for the period 10 023 7 604 32 13 339
Reconciliation of
headline earnings
Profit attributable to 10 023 7 604 13 339
ordinary shareholders
Adjusted for profit on (28) (100) (653)
disposal of property,
plant and equipment
Headline earnings 9 995 7 504 33 12 686
attributable to ordinary
shareholders
Weighted average number 118 478 261 100 000 000 99 992 667
of shares in issue (1)
Basic earnings per share 8.46 7.61 11 13.3
(cents)
Headline earnings per 8.44 7.51 13 12.7
share (cents)
Dividends per share - - -
(cents)
Note:
1) The reviewed weighted number of shares in issue is also used for the
comparative figures in order to reflect a more meaningful comparative
by taking into account the effect of the capital restructurings
undertook during the listing in March 2006 on the earnings per share
calculations.
Statement of changes in equity
Share Share Accumulated Total
capital premium profit R"000
R"000 R"000 R"000
Balance at 1 March 2005 1 - 17 229 17 230
Share Issue - 6 854 - 6 854
Share issue expenses - (483) - (483)
Capitalisation issue 99 (99) - -
Profit for the year - - 13 339 13 339
Balance at 28 February 100 6 272 30 568 36 940
2006
Shares issued 23 22 977 - 23 000
Treasury shares (3) (2 997) - (3 000)
Share issue expenses - (2 932) - (2 932)
Profit for the period - - 10 023 10 023
Balance at 31 August 120 23 320 40 591 64 031
2006
Consolidated cash flow statement
6 months ended Year ended
31 August 31 August 28 February
(Reviewed) (Reviewed) (Audited)
2006 2005 2006
R"000 R"000 R"000
Cash flows from operating 11 774 449 4 779
activities
Cash receipts from 68 712 69 597 120 827
customers
Cash paid to suppliers and (53 825) (68 452) (114 131)
employees
Cash generated from 14 887 1 144 6 696
operations
Interest received 1 319 432 982
Interest paid (267) (191) (489)
Taxation paid (4 165) (936) (2 409)
Cash flows from investing (7 497) (380) (807)
activities
Acquisition of property, (7 567) (733) (2 229)
plant and equipment
Proceeds on disposal of 70 114 572
property plant and
equipment
Proceeds on disposal of - - 850
investment property
Change in associated - 239 -
company loans
Cash flows from financing 18 305 (514) 1 880
activities
Net movement in borrowings (1 695) (514) 1 878
Shares issued 20 000 - -
Cash flows for the period 22 582 (445) 5 853
Cash and Cash equivalents 12 636 6 783 6 783
at beginning of period
Cash and Cash equivalents 35 218 6 338 12 636
at end of period
INTRODUCTION
The directors are pleased to present the maiden interim financial results of
the company for the six months ended 31 August 2006 ("the interim period").
The results reflect Esor"s continuing profitability in an active period that
saw the company announce the acquisition of Franki Africa (Pty) Limited
(`Franki") on 23 August 2006.
After conclusion of the interim period and further to the announcement dated
23 November 2006 the Franki acquisition has become unconditional, at the
same time boosting Esor"s black ownership and directorship ahead of the
construction sector"s charter requirements and expanding its services
offering and footprint. As a result Esor has upwardly revised its revenue
forecasts for the 12 months to 28 February 2007as set out in the pre-listing
prospectus. The group is forecasting revenue of R254,5 million compared to
R130,2 million and earnings and headline earnings per share of 14,64 cents
per share respectively compared to 12,48 cents per share..
Franki operates throughout South Africa, sub-Saharan Africa and the Indian
Ocean Islands providing specialist geotechnical services including
laboratory testing, piling, underpinning and soil improvement, as well as a
full range of services for the marine construction market. The company
employs 600 people in Johannesburg, Cape Town and Durban, of which around
80% are HDIs.
REVIEW OF OPERATIONS
Notwithstanding the unduly late award of certain key contracts due to a slow
rate of government spend which caused a slower than anticipated start to the
new financial year, Esor"s strategic focus on high-value projects has driven
a significant increase in the company"s profit margins. Profitability for
the interim period therefore increased significantly from the previous
corresponding interim period despite a static revenue line.
BLACK ECONOMIC EMPOWERMENT ("BEE")
Following the conclusion of the Franki acquisition, a BEE consortium
comprising private investors and the Esor-Franki staff forum has agreed to
subscribe for 54% of the new shares in the company issued on completion of
the acquisition, which will translate into an aggregate 26% black
shareholding in the company.
FINANCIAL RESULTS
While revenue generation remained constant at R77 million, profit for the
period increased 33% from R7,6 million to R10,0 million. This translated
into headline earnings per share (HEPS) of 8,46 cents up by 12,7% from
7,51%. The group saw an increase in its cash holdings to R35 million, with
a resultant increase in net tangible asset value per share of 118,2 %.
During the period the group purchased capital equipment to the value of R7,6
million.
PROSPECTS
Prospects remain optimistic to February 2007 and beyond. This optimism is
underpinned by the recent award of R80 million worth of contracts for the
Gautrain project coupled with, for instance, a R35 million remediation
contract in Durban for the extraction of sub-surface heavy metal pollutants
and a R5,5 million pedestrian culvert and pipejacking project on the multi-
storey parkade at OR Tambo International Airport. The anticipated imminent
award of piling contracts for three of the 2010 World Cup stadia and related
building, as well as Kwa-Zulu Natal expansion projects, further offer Esor
opportunity for growth.
Esor has to date secured R180 million of new contracts for its order book,
of which R110 million will be carried into the 2008 financial year. The
inclusion of Franki in the group has added an approximate R250 million
pipeline of secured work, of which approximately R150 million worth of
contracts are in hand for 2008.
DIVIDEND POLICY
No interim dividend has been declared. However, following the Franki
acquisition, Esor has adopted an annual dividend policy of 40% of after tax
profits from the effective date of the Franki acquisition.
BASIS OF PREPARATION
The interim results have been prepared in accordance with IAS 34 (Interim
Financial Reporting). The accounting policies applied in preparing these
interim financial statements are consistent with those applied in the prior
interim period and at previous year-end and are in accordance with
International Financial Reporting Standards.
This announcement has been prepared in accordance with the Listings
Requirements of the JSE Limited.
CHANGES TO THE BOARD OF DIRECTORS
Subsequent to the interim period, at the general meeting convened on 23
November 2006 the following changes to the board of directors were approved:
* IG Jefferiss resigned with immediate effect;
* RP McLintock was appointed as an executive director and
* W van Houten was appointed as an executive director.
APPRECIATION
We thank our loyal staff, the majority of whom have remained with the group
for more than 15 years, for their commitment and hard work which contributed
to Esor"s achievement of its milestone listing on AltX . We also thank our
business partners, advisors and suppliers, and most importantly our
shareholders, for their ongoing support and faith in the group.
By order of the Board
28 November 2006
Bernard Krone Mauro L Trevisani
Chief Executive Officer Financial Director
CORPORATE INFORMATION
Non executive directors: I G Jefferiss
D M Thompson
Executive directors: M L Barber
A M Field
B Krone
M L Trevisani
Registration number: 1994/000732/06
Registered address: 130 Aberdare Drive
Phoenix Industrial Park
Durban
4051
Postal address: P.O. Box 40096
Red Hill
4071
Company secretary: M L Trevisani
Telephone: 031 507 1051
Facsimile: 031 507 5709
Transfer secretaries: Computershare Investor Services 2004
(Pty) Limited
Designated Adviser: Exchange Sponsors (Pty) Limited
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: 28/11/2006 10:21:11 AM Produced by the JSE SENS Department
