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WBO
WBO
WBO - WBHO - Unaudited Financial Statements: Six Months Ended 31 December 2006
WILSON BAYLY HOLMES-OVCON LIMITED - Civil Engineering and Building Contractors
(Registration No. 1982/011014/06)
ISIN No: ZAE000009932 & Share code: WBO
UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2006
Website: www.wbho.co.za Email: wbhoho@wbho.co.za
39% Revenue
40% Operating profit
Registered office and contact details: 53 Andries Street, Wynberg, Sandton PO
Box 531 Bergvlei 2012 Tel: 011 321 7200
Fax: 011 887 4364
Transfer secretaries: Computershare Investor Services 2004
(Pty) Limited 70 Marshall Street, Johannesburg 2001
PO Box 61051 Marshalltown 2107
Tel: 011 370 5000 Fax: 011 370 5271
Directors: MS Wylie (Chairman), JW Abbott, BG Holmes*,
MW McCulloch*, MJ Ngobeni*, NS Maziya*, NS Mjoli-Mncube*
* Non-executive
Company secretary: MF Simpson
GROUP INCOME STATEMENT
Unaudited Unaudited Audited
31 December % 31 December 30 June
2006 increase/ 2005 2006
R`000 (decrease) R`000 R`000
Revenue 4 031 860 38,6 2 908 134 5 795 118
Operating profit 172 554 40,0 123 281 261 839
Impairment of - - (4 928)
goodwill
Fair value
adjustment to
concession 1 201 6 250 18 130
investment
Share-based (30 206) - -
payments expense
Profit before 143 549 129 531 275 041
finance income
Finance income 18 601 11 033 36 245
Profit before 162 150 15,4 140 564 311 286
finance costs
Finance costs (3 208) (1 856) (13 860)
Profit before 158 942 14,6 138 708 297 426
associate income
Income from
associates
- trading 7 081 2 734 5 596
Income from
associates
- fair value of
concession
investment 836 9 362 1 592
Profit before 166 859 150 804 304 614
taxation
Taxation (55 726) (34 734) (75 343)
Net profit 111 133 (4,3) 116 070 229 271
Attributable to
Equity
shareholders of
WBHO Limited 96 466 96 596 197 668
Minority interests 14 667 19 474 31 603
111 133 (4,3) 116 070 229 271
Reconciliation of
headline
earnings
Net profit 96 466 96 596 197 668
Adjustments:
Impairment of - - 4 928
goodwill
Profit on sale of
property, plant
and equipment (net (1 386) (1 442) (7 437)
of tax)
Headline earnings 95 080 95 154 195 159
BEE share scheme 30 206 - -
expense
Adjusted headline 125 286 31,7 95 154 195 159
earnings
Ordinary shares
Issued ordinary 66 000 55 491 55 491
shares (`000)
Weighted average
number
of shares (`000) 56 011 55 491 55 491
Fully diluted
weighted average
number of shares 56 872 55 491 55 491
(`000)
Earnings per share 172,2 174,1 356,2
(cents)
Fully diluted
earnings
per share (cents) 169,6 174,1 356,2
Headline earnings 169,8 171,5 351,7
per share (cents)
Adjusted headline
earnings
per share (cents) 223,7 171,5 351,7
Dividend per share 36,0 27,0 81,0
(cents)
GROUP BALANCE SHEET
Unaudited Unaudited Audited
31 December 31 December 30 June
2006 2005 2006
R`000 R`000 R`000
ASSETS
Non-current assets 831 529 610 260 671 967
Property, plant and equipment 547 280 440 887 513 177
Goodwill 92 624 51 825 76 220
Investment in associates 85 596 37 326 25 865
Investment in securities 25 390 13 703 37 410
Long-term receivables 80 639 66 519 19 295
Current assets 2 332 632 1 780 593 2 336 322
Inventories 209 295 129 501 201 897
Contracts in progress 1 189 037 993 798 1 252 820
Non-current asset classified
as held-for-trade - - 17 810
Short-term receivables 233 791 147 605 225 473
Cash and cash equivalents 700 509 509 689 638 322
Total assets 3 164 161 2 390 853 3 008 289
EQUITY AND LIABILITIES
Total equity 874 133 620 029 762 778
Shareholders` equity 828 773 553 750 702 467
Minority interests 45 360 66 279 60 311
Non-current liabilities 183 618 190 980 191 332
Long-term financial liabilities 144 574 130 933 157 736
Deferred taxation 39 044 60 047 33 596
Current liabilities 2 106 410 1 579 844 2 054 179
Short-term portion of long-term 34 908 16 367 54 819
financial liabilities
Provisions 194 483 62 557 244 172
Short-term financial liabilities 1 714 250 1 413 977 1 626 369
Taxation 134 157 70 390 116 500
Bank overdrafts 28 612 16 553 12 319
Total equity and liabilities 3 164 161 2 390 853 3 008 289
Net tangible asset value
per share (cents) 1 314 905 1 129
GROUP STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
31 December 31 December 30 June
2006 2005 2006
R`000 R`000 R`000
Shareholders`s equity at the 702 467 522 155 522 155
beginning of the period
Issue of ordinary shares 26 047 - -
Net profit for the period 111 133 116 070 229 271
Attributable to minority (14 667) (19 474) (31 603)
interests
Translation of foreign entities 9 227 (41 695) 16 268
Share-based payments reserve 30 206 - 314
Movement in other reserves - - 4 350
Dividend paid (35 640) (23 306) (38 288)
Shareholders`s equity at the end 828 773 553 750 702 467
of the period
GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
31 December 31 December 30 June
2006 2005 2006
R`000 R`000 R`000
Cash generated from operations 297 677 107 304 239 965
Finance income 18 601 11 033 36 245
Finance costs (3 208) (1 856) (13 860)
Taxation paid (32 621) (42 765) (55 218)
Dividend paid (35 640) (23 306) (38 288)
Cash retained from operations 244 809 50 410 168 844
Net cash flow from investing
activities (191 889) (154 468) (191 026)
Net cash flow from financing (7 026) 63 673 111 835
activities
Net increase in cash and cash 45 894 (40 385) 89 653
equivalents
Cash and cash equivalents at the
beginning of the
year 626 003 539 333 539 333
Overdraft acquired on - (5 812) (2 983)
acquisition of subsidiary
Cash and cash equivalents at end 671 897 493 136 626 003
of year
SEGMENTAL INFORMATION
Unaudited Unaudited Audited
31 31 30 June
December December
2006 2005 2006
% R`000 % R`000 % R`000
PRIMARY SEGMENTS
Revenue
- Building, civil
and
property 73,4 2 961 701 78,7 2 291 298 76,2 4 412 484
development
- Roads and 22,8 918 505 20,1 583 101 20,1 1 166 416
earthworks
- Industrial and
concessions 3,8 151 654 1,2 33 735 3,7 216 218
4 031 860 2 908 134 5 795 118
Operating profit
- Building, civil
and
property 68,3 117 804 73,6 90 680 60,0 157 070
development
- Roads and 25,6 44 111 22,4 27 554 27,3 71 392
earthworks
- Industrial and
concessions 6,1 10 639 4,0 5 047 12,7 33 377
172 554 123 281 261 839
GEOGRAPHICAL
SEGMENTS
Revenue
- Local 68,7 2 769 888 56,4 1 867 952 69,2 4 012 234
- International 31,3 1 261 972 43,6 1 040 182 30,8 1 782 884
4 031 860 2 908 134 5 795 118
Operating profit
- Local 61,2 105 603 49,8 66 186 66,7 174 755
- International 38,8 66 951 50,2 57 095 33,3 87 084
172 554 123 281 261 839
ACCOUNTING POLICIES
The consolidated interim financial statements have been prepared in
accordance with IAS34: Interim Financial Reporting, the International
Financial Reporting Standards (IFRS) and Schedule 4 of the South African
Companies Act. The accounting policies adopted in the preparation of these
financials are consistent with those used to prepare the comparative interim
financial statements and the annual financial statements for the year ended
30 June 2006.
IFRS 2: "Share-based payments" has been applied to the shares issued to
external black individuals and the group`s employees. The cost of R30
million arising from the issue has been charged to the income statement.
COMMENTARY
Overview of results The group has produced good results for the six months
to 31 December 2006. Headline earnings before taking into account the cost
of issuing BEE shares increased by 31,7%. Revenue has increased by 39% to R4
billion, and operating profit increased by 40% from R123 million to R172
million. The group has slightly increased its operating profit margin to
4,28% (December 2005: 4,24%).
The effective tax rate for the six months has increased from 26,2% to 29,6%
largely as a result of working in countries where the tax rate is higher
than that ruling in South Africa.
Cash balances have increased by R46 million to R671 million since June 2006.
This is despite an increase in investing activities and a decrease in cash
from financing activities.
A dividend of 36 cents per ordinary share has been declared which is 33%
higher than the previous interim dividend of 27 cents.
Building, Civil and Property Development Activity in the building division
is at an all-time high and the division starts 2007 with an order book of
R5,3 billion. All the regions within South Africa are operating at close to
capacity. The Gauteng region has a number of large contracts coming to an
end but these will be replaced by some exciting new projects. In KwaZulu-
Natal the group is part of the joint venture which was awarded the contract
for the King Senzangakhona Stadium. The company is also a member of the
joint ventures which are the preferred bidders for the King Shaka Airport
and the Green Point Stadium.
I
n Australia, the construction industry has been very active in Brisbane and
Perth but quiet in Melbourne and Sydney. Towards the end of the year
conditions started to improve in Melbourne and Probuild Constructions will
commence work on two large contracts in the new year. Significant work has
also been obtained in Perth and Probuild`s order book at the end of the year
was R1,5 billion. The group`s interest in Probuild increased from 53% to 60%
with effect from 1 July 2006. The results in Australia are expected to be
slightly better than those achieved last year.
As predicted last year, the civil sector has become more buoyant. Turnover
has more than doubled since last year and the outlook for this sector
remains positive.
Sales at the group`s two golf course estate developments have been in line
with expectations but delays continue to be experienced in transferring
ownership in KwaZulu-Natal.
Roads and Earthworks The division has also been very busy during the
period and has produced results which exceeded both its revenue and profit
budgets. Work in Tanzania has come to an end but has been replaced with
contracts in Zambia and the DRC. The division has an order book of R1,7
billion.
Manufacturing and Concessions Capital Africa Steel, as a supplier of steel
to both the construction and mining industries is trading at better than
budget, a trend which is expected to continue for the rest of the year.
Activity regarding concessions remains quiet and teams have been diverted to
preparing bids for projects related to the World Cup Soccer.
Capital Commitments The group has spent R85 million on property, plant and
equipment, with R124 million of capital expenditure authorised and committed
for the remainder of the financial year.
Black Economic Empowerment In October last year the group successfully
completed its black economic empowerment (BEE) transaction whereby shares
were allocated to three individuals and 1 600 employees. This initiative
resulted in 15% of the company`s shareholding being held by Akani Investment
Holdings, a SPV created for BEE. As the Charter applies only to South
African operations this shareholding ramps up to over 25% for score card
accreditation purposes.
At the annual general meeting in October 2006 our three new black partners
were appointed to the board as non-executive directors.
Prospects The order book has grown to R8,5 billion (June 2006: R6,1
billion). This figure does not include the Greenpoint Stadium and King Shaka
Airport contracts which should be awarded imminently to our respective joint
ventures. The industry remains buoyant and growth prospects into the future
remain positive.
Dividend declaration Notice is hereby given that the directors have
declared an interim dividend of 36 cents per share (2006: 27 cents) in
respect of the year ended 30 June 2007 payable to shareholders.
The following dates have reference:
Last day to trade cum-dividend Friday, 13 April 2007
Trading ex-dividend commences Monday, 16 April 2007
Record date Friday, 20 April 2007
Payment date Monday, 23 April 2007
Shares may not be dematerialised or rematerialised between Monday, 16 April
2007 and Friday, 20 April 2007, both dates inclusive.
By order of the board
MS Wylie JW Abbott
Chairman Director
8 March 2007
Sponsor
Investec Bank
Date: 08/03/2007 15:59:55 Produced by the JSE SENS Department.
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