Interim results for the six months ended 31 August 2010
-Revenue up 12% to R908,3 million
-Headline earnings per share up 24% to 115 cents
-Cash generated by operations up 13% to R180,1 million
-Operating profit up 22% to R170,1 million
-Interim dividend up 40% to 70 cents
-Net borrowings to equity improved to 16%
Overview
Notwithstanding the difficult operating environment, Famous Brands succeeded in delivering a noteworthy performance in the reporting period ended 31 August 2010. The Group enjoyed a surprisingly buoyant holiday trading period in March and April and benefited materially from strong trading during the FIFA World Cup. However, as anticipated, a marked decline in sales was experienced in the latter part of July and August following the conclusion of World Cup activities.
In South Africa, the six months under review featured constrained consumer spend as the Group's mainstream middle income consumer target market continued to be affected by limited disposable income and tight lending criteria. While interest rate reductions partially offset these conditions, a sustained, meaningful improvement in the economy did not develop.
The sector remained extremely competitive and this, together with the onerous trading environment, indicates that it is not unlikely that there will be further rationalisation of certain brands and individual operators lacking strong consumer equity over the next six to 12 months.
The economic climate in the United Kingdom remained even more subdued than locally, featuring high levels of unemployment, negligible earnings growth and pessimistic consumer sentiment. The performance delivered by Wimpy UK is a direct reflection of these conditions.
The Group's footprint as at 31 August 2010 comprised 1 789 restaurants across South Africa, 16 other African countries and the UK.
Financial results
In the six months under review, the Group's revenue increased 12% to R908,3 million (2009: R811,4 million), while operating profit grew 22% to R170,1million (2009: R139,8 million).
The operating profit margin improved to 18,7% from 17,2%. This higher margin is largely a reflection of the sustained improvement in the manufacturing margin which resulted from enhanced efficiencies in procurement and capacity utilisation, prudent cost control and reduced input costs.
Net interest paid reduced 36% to R7,7 million (2009: R12,0million) due to the Group's strong balance sheet, lower financing rates and the effect of restructuring of foreign debt (Wimpy UK) in the second quarter of 2009.
Headline earnings per share and basic earnings per share both rose 24% to 115cents per share (2009: 93 cents).
Cash generated from operations continued to grow strongly, improving 13% to R180,1 million (2009: R158,8 million). Notwithstanding the increased dividend payment, the Group's robust cash generating ability resulted in net cash retained of R67,8 million after interest and taxation.
Increased capital expenditure of R23,6 million (2009: R11,5 million) was employed to enhance capacity for the take on of new franchise business gained through recent acquisitions. In addition to routine replacement activities,expenditure was incurred on building Meat Processing and Bakery plants in the Western Cape at the new Logistics centre, fleet expansion and bolstering the Group's Information Technology support service.
Net borrowings decreased by R57 million to R103 million during the half year, reducing the net borrowings to equity ratio to an extremely healthy 16% (2009: 22%), providing adequate financial capacity to fund further expansion or investment if required. Interest cover improved to 22,1 times (2009: 11,6 times).
The board has declared an interim dividend of 70 cents (2009: 50 cents), an improvement of 40%. The dividend cover of 1,64 times is sustainable given the Group's cash generative nature.
Operational reviews
Franchising Division - Local
The strong performance of the Group's brands over the World Cup period and the inclusion of Mugg & Bean's revenue for the six months contributed to improved system wide sales and operating profit.
Revenue from franchising grew 21% to R191,7 million (2009: R158,0 million). Operating profit rose 20% to R113,2 million (2009: R94,2 million), whilst the operating margin declined 0,6% on the prior comparative period, to 59,0%.
System wide sales, which include new restaurant openings, increased 13,1%, and like-on-like sales improved 7,4%. The weighted menu price increase across the Group was 3,3%, illustrating real growth achieved by the division.
New restaurant openings over the six months were sluggish as a result of the slow-down in new build activity over the World Cup period. A total of 42 new restaurants were opened and 24 existing stores were revamped.
Brand performance
Product innovation drove a 9% increase in customer count for the Steers brand. This increase is a reflection of the success of Steers' new value burger range, GET REAL BURGERS, in attracting new users and the price conscious mass middle market.
Wimpy continues to extend its penetration into emerging markets and attract new consumers. The brand's solid performance was boosted by the tremendously successful marketing campaign conducted during World Cup 2010 which achieved cult status when its television advert became a viral marketing sensation on a number of social networking sites.
In a first-to-market coup, Debonairs Pizza launched mobile and online ordering via cellphone and the internet respectively, a development which has been extremely well received by consumers. Product innovation is key to this brand's competitive advantage and four new products were successfully launched during the past six months.
Debonairs Pizza has developed an `Express' trading format targeting emerging market areas. These restaurants are smaller than the conventional footprint and feature a limited menu, but offer the same experience.
During the period the brand opened its milestone 300th outlet, with 17 of those restaurants comprising the new Express format. In total, a record 40 outlets will be opened in the current financial year, driven largely by per capita consumption growth in the emerging black market.
During the reporting period Mugg & Bean launched its `Mini' concept on Sandton Drive in Sandton, Gauteng, in partnership with Total Petroleum. The outlet has traded extremely well since opening, and the Group has signed an exclusive agreement with Total to expand this concept further in the forecourt market.
Mugg & Bean is also currently developing a `Metro' trading format for rural areas. The smaller footprint and menu will offer the same experience but require less investment. There is strong potential to roll-out this format on a large scale, which will have important upside for the brand.
FishAways continues to establish growing awareness and gain support from consumers. Evidence of the success achieved in this regard was the brand's top ten position in the Sunday Times' Top Brands survey. In its maiden entry in the competition, FishAways achieved a remarkable 7th position.
tashas opened a new restaurant in Brooklyn, Pretoria, bringing to five the number of stores in the network. The outlet has traded strongly since opening, complementing tashas' already successful business model. A further three restaurants will be opened in Johannesburg, Durban and Cape Town in the current fiscal year. Famous Brands holds a 51% controlling interest in tashas.
The solid like-on-like growth trend delivered by Brazilian Cafe is encouraging and the network continues to expand, in partnership with Shell Petroleum. Management is encouraged that Brazilian Cafe is rapidly becoming a challenger in the forecourt convenience market.
Franchising Division - International
Trading conditions in the UK remained depressed in the review period. Wimpy UK's middle income target market continued to be restrained by high levels of unemployment and limited disposable income.
In this environment, exacerbated by the effect of currency fluctuations and strengthening of the Rand, revenue declined 27% to R56,5 million (2009: R77,8 million), while operating profit decreased to R4,2 million from R7,1 million.
Like-on-like sales expressed in British Pounds were 8% lower than the prior comparative period. A recent report released by Coffer Peach Business Tracker monitored performance across the UK eating-and-drinking-out sector, and concluded that recovery in the industry would be extremely slow. Their expectation is for performance to be in line with the prior year, with no meaningful growth anticipated.
During the reporting period the Group's master license agreement in Ireland was terminated by mutual consent, and Wimpy's presence was withdrawn from that market. In England, the Group closed four non profitable company-owned restaurants and continued with the revamp and repair programme, albeit at a conservative pace given the current economic conditions.
One new turnkey outlet was opened in Basingstoke, in a prime shopping centre. This restaurant's trading format, franchise partner and site will become the blueprint for further new restaurant openings. The outlet is trading well and in line with management's ambitions for the brand.
The adverse economic climate has resulted in a decline in rental rates from previously punitive levels. This trend has encouraged the Group to explore opportunities to launch other brands into the market, including Debonairs Pizza and Steers.
Supply Chain
Manufacturing division
This division delivered another strong performance, reporting a 10% increase in revenue to R330,1 million from R300,3 million and a 44% improvement in operating profit to R36,4 million from R25,2 million. The operating margin grew vigorously from 8,4% to 11,0% based on enhanced production efficiencies, prudent inventory management and better procurement practices.
Significant progress has also been made in improving machine and operating efficiencies, a function of enhanced
planned maintenance and reduced downtime.
The Western Cape operation will be relocated to its new facilities in November 2010, which should afford further improvements. Importantly, the Group has adequate capacity to take on additional business gained from recent acquisitions, without having to incur further investment.
Logistics division
This division performed well to deliver a 14% increase in revenue to R594,9 million from R524,1 million. Operating profit grew 23% to R16,3 million from R13,2 million. The operating margin improved to 2,7% from 2,5%.
The business benefited from the take-on of previously outsourced bakery deliveries to Wimpy restaurants in Gauteng and the Mugg & Bean refrigerated business in KwaZulu Natal, the Eastern Cape, Western Cape and the Free State.
During the reporting period the Group invested in its multi-temp fleet to accommodate the take-on of both these pieces of new business.
The Group's recently launched Black Economic Empowerment owner-driver programme delivered excellent results in productivity improvements. The programme will be extended to the Eastern and Western Cape during the current calendar year and will be rolled out to the Gauteng region early in 2011.
Corporate actions
Giramundo
The Group secured its entry into the mainstream chicken category with the acquisition of a 51% controlling stake in a peri-peri flame grilled chicken offering, Giramundo. The effective date of the transaction was 1 August 2010 and
the Group's investment was R1,2 million.
The business currently comprises four existing restaurants in Gauteng. A complete overhaul of the look and feel of the brand has been concluded and the Group is on track to open its first two new restaurants in Kokstad and Nelspruit on 1 November 2010.
The manufacturing and logistics components of the operation are in the process of being fully integrated into Famous Brands' model. Management is confident of Giramundo's potential to become a leading contender in the category and one of the Group's mainstream brands. Early response to the brand from potential investors and
landlords has exceeded expectations.
Keg and McGinty's
With effect from 1 September 2010, the Group acquired the franchise agreements, trademarks and intellectual property of the Keg and McGinty's franchised pub and restaurant brands for a purchase consideration of R27 million, funded through cash reserves.
The acquisition represents Famous Brands' first foray into the pure leisure category. At acquisition date, the Keg brand comprised 28 outlets, and McGinty's constituted five outlets.
The operations are currently being integrated into the Group's business model, with the intention of taking on thelogistics component by 1 November 2010.
A complete new brand identity and positioning is being developed for both brands and will be launched in March 2011.
The Group has ambitious expansion plans for this business and is confident of the earnings enhancing potential once growth opportunities and synergies have been extracted.
Vovo Telo
Famous Brands acquired a 51% controlling interest in Vovo Telo artisan bakery and cafe business, comprising two outlets in Port Elizabeth and one in Gauteng.The acquisition consideration was not material and the effective date of the transaction was 1 October 2010.
This acquisition represents a further opportunity to implement the Group's strategic intent to grow its best in class
franchised leisure brands, and fills another gap in Famous Brands' franchise portfolio. The operations are currently being integrated into the Group's business model.
The Group is confident that the Vovo Telo brand has strong franchising potential and this belief is supported by the enthusiastic response from landlords seeking tenants offering a point of differentiation.
The Group is in the process of establishing a Vovo Telo Baking Academy aimed at developing artisan baking skills and creating employment. An important rationale for this academy is the potential to produce speciality bread and pastry products for Group brands such as Mugg & Bean and tashas. This business is currently outsourced to third-party contractors.
With regard to the abovementioned transactions, no income was earned or recognised in this set of results.
Prospects
The Group's traditionally strong December trading period should assist in boosting sales in the forthcoming six months, although the second half of the year is expected to be less robust than the first half, which enjoyed the exceptional benefit of World Cup trading.
With only nominal menu price increases planned in the period ahead, tight cost control and innovative product development and marketing will be demanded.
Famous Brands' immediate challenge will be to consolidate its recent acquisitions. This includes the aggressive launch of Giramundo and full integration of the Keg and Vovo Telo businesses.
Management is satisfied that the Group will continue to unlock value for shareholders over the long term.
The healthy balance sheet and strong cash generating ability of the business position it well for further improvements and acquisitions if suitable opportunities are presented.
The excellent management team, growing portfolio of best in class brands and the Group's solid business
model affords strong growth potential.
Management's priority will be to leverage those strategic advantages in the interests of all stakeholders.
Dividend to shareholders
Notice is hereby given that an interim dividend No. 32 of 70 cents (2009: 50cents) per ordinary share, payable out of income, has been declared in respect of the six months ended 31 August 2010.
Payment of dividend Monday, 29 November 2010
Monday, October 25, 2010
Tuesday, September 7, 2010
KWV PERFORMANCE IMPROVES
7 September 2010
KWV’s revenue increased by just more than 5% to R729,0 million in the first year following its unbundling – a challenging year characterised by a strong Rand, prolonged recessionary market pressures, industrial action at a service provider and extensive internal restructuring and transformation following the implementation of a new strategy. The business returned to profitability albeit not at sufficient return on equity.
Net profit from continuing operations attributable to shareholders amounted to R78,1 million while headline earnings amounted to R51,3 million. Headline earnings per share increased from a loss of 68,1 cents to a profit of 82,9 cents.
KWV’s best performing brands for the period under review were Roodeberg - which has been averaging double digit growth for the past 10 years - Café Culture and Cathedral Cellar, which both achieved growth in excess of 20%.
The group succeeded in improving its gross profit margin - from 36,6% for the prior year to 38,0%. This was driven by decisions to protect margins, rather than purely driving volume in markets where consumers are increasingly under economic pressure.
Three focus areas were driving performance at KWV this year: brand growth, cost and culture. The business did not deliver the growth that it was aiming for, but managed to protect margins. All costs were well managed during the year - operational and admin expenses in particular - resulting in significant savings. In terms of culture, there has been improvement in behaviour driving performance, teamwork,flexibility and urgency. Overall, there are some encouraging signs of improved performance, but more is needed to deliver on our strategy.
Highlights for the year include numerous awards for both KWV’s wines and brandies. The Laborie Alambic was crowned best brandy in the world at the International Wine and Spirits challenge, and the KWV The Mentors range excelled both locally and internationally, inter alia at the Concours Mondial de Bruxelles (two golds) and the Trophy Wine Show (trophy and gold medal). The World Cup also had a positive impact in some categories and markets, for example with the KWV 10 Year Old brandy in the local market and Golden Kaan in Germany, but all indications are that the effect will not be sustained.
The most challenging factors that impacted on the business during the past year included the effects of the recession, particularly in Europe and the UK (where KWV had to strategically reduce volumes), the strong Rand and the Transnet strike.
With the strategic repositioning of the business, KWV had the opportunity to buy the Golden Kaan brand – a brand that was returned to profitability very quickly. KWV also divested of several other non-core and surplus assets, which included the grape juice concentrate plant in Upington and properties in Vredendal and Robertson.
In positioning the business for growth, KWV acquired the cream liqueur brand, Wild Africa cream. This fits well into the spirits portfolio - a portfolio which performed much better during the past year. Packed volumes increased by more than 10% and bulk by more than 50%. In the local market, KWV showed very solid performance by managing to grow its market share in a declining brandy category.
During the second part of the year, in line with its growth strategy, KWV restructured its internal structures around four brand portfolios. With the successful recruitment and appointment of four new brand directors, the business is positioned to drive profitable brand growth and innovation. Investment going forward will be brand driven, and has already increased strategically over the period under review.
Considering cash flow from operating activities, the business generated R66,7 million over the year. The company’s net asset value per share was diluted due to the rights offer in 2009, which strengthened the new KWV Holdings’ balance sheet by R150 million. Without the rights offer, the net asset value per share would have increased by 7.2% (170,6 cents per share) for the year.
The board of directors declared a maiden ordinary dividend of 27 cents per share as well as a special dividend of 7 cents per share, based on the profit on sale of non-core assets.*
KWV’s business prospects for 2011 are still subject to economic recovery in most markets, the exchange rate and the performance of the brandy category in the local market. The brand positioning and restructuring in the business has created a strong platform for growth.
Since the unbundling in August 2009, KWV’s share price has increased from 623 cents at the time of the rights issue to 1050 cents with an annual high of 1200 cents.
KWV is one of the five leading wine and brandy producers in South Africa. Its head office is located in Paarl, in the Western Cape region – one of the country’s top wine producing regions. The company sources wines and grapes from the best and most sought after viticultural regions in South Africa. The company owns internationally recognised brands such as Roodeberg, KWV wines,Laborie, Cathedral Cellar, Golden Kaan, Café Culture, the range of KWV 3, 5, 10, 15 and 20 Year Old brandies, Imoya and Wild Africa Cream.
KWV is a founding member of the Industry Association for the Responsible use of alcohol (ARA) and encourages the responsible consumption of its products.
*An ordinary dividend (dividend number 1) of 27 cents per ordinary share as well as a special dividend (special dividend number 1) of 7 cents per ordinary share have been declared for the year under review. The special dividend stems from capital profits from the sale of non core assets.
Last day to trade cum dividend Friday 01 October 2010
Trading ex dividend commences Monday 04 October 2010
Record date Friday 15 October 2010
Dividend payment date Monday 18 October 2010
KWV’s revenue increased by just more than 5% to R729,0 million in the first year following its unbundling – a challenging year characterised by a strong Rand, prolonged recessionary market pressures, industrial action at a service provider and extensive internal restructuring and transformation following the implementation of a new strategy. The business returned to profitability albeit not at sufficient return on equity.
Net profit from continuing operations attributable to shareholders amounted to R78,1 million while headline earnings amounted to R51,3 million. Headline earnings per share increased from a loss of 68,1 cents to a profit of 82,9 cents.
KWV’s best performing brands for the period under review were Roodeberg - which has been averaging double digit growth for the past 10 years - Café Culture and Cathedral Cellar, which both achieved growth in excess of 20%.
The group succeeded in improving its gross profit margin - from 36,6% for the prior year to 38,0%. This was driven by decisions to protect margins, rather than purely driving volume in markets where consumers are increasingly under economic pressure.
Three focus areas were driving performance at KWV this year: brand growth, cost and culture. The business did not deliver the growth that it was aiming for, but managed to protect margins. All costs were well managed during the year - operational and admin expenses in particular - resulting in significant savings. In terms of culture, there has been improvement in behaviour driving performance, teamwork,flexibility and urgency. Overall, there are some encouraging signs of improved performance, but more is needed to deliver on our strategy.
Highlights for the year include numerous awards for both KWV’s wines and brandies. The Laborie Alambic was crowned best brandy in the world at the International Wine and Spirits challenge, and the KWV The Mentors range excelled both locally and internationally, inter alia at the Concours Mondial de Bruxelles (two golds) and the Trophy Wine Show (trophy and gold medal). The World Cup also had a positive impact in some categories and markets, for example with the KWV 10 Year Old brandy in the local market and Golden Kaan in Germany, but all indications are that the effect will not be sustained.
The most challenging factors that impacted on the business during the past year included the effects of the recession, particularly in Europe and the UK (where KWV had to strategically reduce volumes), the strong Rand and the Transnet strike.
With the strategic repositioning of the business, KWV had the opportunity to buy the Golden Kaan brand – a brand that was returned to profitability very quickly. KWV also divested of several other non-core and surplus assets, which included the grape juice concentrate plant in Upington and properties in Vredendal and Robertson.
In positioning the business for growth, KWV acquired the cream liqueur brand, Wild Africa cream. This fits well into the spirits portfolio - a portfolio which performed much better during the past year. Packed volumes increased by more than 10% and bulk by more than 50%. In the local market, KWV showed very solid performance by managing to grow its market share in a declining brandy category.
During the second part of the year, in line with its growth strategy, KWV restructured its internal structures around four brand portfolios. With the successful recruitment and appointment of four new brand directors, the business is positioned to drive profitable brand growth and innovation. Investment going forward will be brand driven, and has already increased strategically over the period under review.
Considering cash flow from operating activities, the business generated R66,7 million over the year. The company’s net asset value per share was diluted due to the rights offer in 2009, which strengthened the new KWV Holdings’ balance sheet by R150 million. Without the rights offer, the net asset value per share would have increased by 7.2% (170,6 cents per share) for the year.
The board of directors declared a maiden ordinary dividend of 27 cents per share as well as a special dividend of 7 cents per share, based on the profit on sale of non-core assets.*
KWV’s business prospects for 2011 are still subject to economic recovery in most markets, the exchange rate and the performance of the brandy category in the local market. The brand positioning and restructuring in the business has created a strong platform for growth.
Since the unbundling in August 2009, KWV’s share price has increased from 623 cents at the time of the rights issue to 1050 cents with an annual high of 1200 cents.
KWV is one of the five leading wine and brandy producers in South Africa. Its head office is located in Paarl, in the Western Cape region – one of the country’s top wine producing regions. The company sources wines and grapes from the best and most sought after viticultural regions in South Africa. The company owns internationally recognised brands such as Roodeberg, KWV wines,Laborie, Cathedral Cellar, Golden Kaan, Café Culture, the range of KWV 3, 5, 10, 15 and 20 Year Old brandies, Imoya and Wild Africa Cream.
KWV is a founding member of the Industry Association for the Responsible use of alcohol (ARA) and encourages the responsible consumption of its products.
*An ordinary dividend (dividend number 1) of 27 cents per ordinary share as well as a special dividend (special dividend number 1) of 7 cents per ordinary share have been declared for the year under review. The special dividend stems from capital profits from the sale of non core assets.
Last day to trade cum dividend Friday 01 October 2010
Trading ex dividend commences Monday 04 October 2010
Record date Friday 15 October 2010
Dividend payment date Monday 18 October 2010
Wednesday, May 26, 2010
Esorfranki Limited - results for the year ended 28 February 2010
HIGHLIGHTS
Revenue up 31,3%
PAT up 37,8%
NAV per share up 23,5%
HEPS up 15,6%
COMMENTARY
The audited summarised consolidated results of Esorfranki for the year ended 28 February 2010 ("the year") demonstrate the group's delivery of promised returns through sustained leadership and continued resilience in a challenging market, with significant year-on-year increases in profit after tax ("PAT") and headline earnings per share ("HEPS").
Revenue of R1,9 billion reflects the group's expansion from a geotechnical leader to a broader civil engineering operation, including the positive contributions of the civil engineering and pipelines acquisitions in 2009.
In a strategic milestone Esorfranki transferred to the `Heavy Construction' sector of the Main Board of the JSE on 25 June 2009, capping three successful years on AltX. The group is now appropriately positioned alongside civil engineering construction peers.
Financial results
Revenue increased 31,3% compared to the previous year with PAT of R197,6 million translating into HEPS of 71,3 cents, 15,6% higher than the previous year.
Earnings before interest, taxation, deprecation, impairments and amortisation ("EBITDA") increased 19,4% to R389 million from R325,9 million. EBITDA includes a R19,3 million amortisation of customer contracts following the acquisition of Esorfranki Civils (formerly Patula Construction (Pty) Limited) and Esorfranki Pipelines (formerly Shearwater Plant Hire (Pty) Limited).
The strengthening of the South African Rand in the second half of the year negatively impacted on the translation of foreign operation income, resulting in a post tax charge of R28,9 million.
Cash generated by operations remained robust at R159,6 million (2009: R161,6 million), after tax payments of R126,9 million following changes to the South African provisional tax regulations which became effective in the year.
Esorfranki met all its loan covenants during the year.
Review of operations
Notwithstanding the negative impact of excessive rain in the second half of the year, contract delays and pressure on margins, the business units achieved pleasing results in a challenging macro-economic environment. Esorfranki Geotechnical (comprising Esor Africa and Franki Africa)
As anticipated, revenue declined 20,6% to R944,8 million from R1,2 billion due to the adverse economic and trading conditions, resulting in a contracting market. Operating margins improved year-on-year by 3,3% to 17,4%. Foreign operations accounted for 27,2% (2009: 24%) of Geotechnical revenue.
The business unit recently won a number of major cross-border projects with a combined value of R55 million. These include pipe-jacking for a Gaborone sewer and piling and dynamic compaction for the Jwaneng Cut 8 project. Current contracts for both Gautrain and the new Kusile Power Station remain ongoing in the short-term.
Esorfranki Civils
Revenue increased 17,4 % to R715 million from R609 million in the previous year. The business unit achieved PAT of R100,5 million and respectable operating margins of 20,2%.
Esorfranki Civils is continuing work on Johannesburg's R21 between the N12 interchange and Pomona Road, and is also progressing with the R174 million contract for the second carriageway from the Modikane interchange to the R512 Brits West interchange on the N4. Esorfranki Pipelines
Esorfranki Pipelines posted year-on-year revenue growth of 13,6% to R229 million. Notwithstanding the negative impact of contract delays in the latter part of the year, the business unit posted operating profits of R31 million equating to operating margins of 13,6%.
The business unit was recently awarded a R240 million contract from Rand Water for the construction of the BG3 Pipeline.
CAPEX
Esorfranki regards fleet maintenance and enhancement as key to growth and a significant differentiator. During the year the group invested R96 million (2009: R188,4 million) in property, plant and equipment ("PPE") to expand and maintain operations. The Geotechnical business unit accounted for R42,8 million of this, with R49,7 million invested in PPE at Esorfranki Civils and R3,0 million at Esorfranki Pipelines.
To accommodate future growth and to maintain its competitive edge, the board hasapproved capital expenditure for Esorfranki of R72,0 million for the 2011 financial year.
Black Economic Empowerment
During the year Esorfranki improved its rating to a `Level 5' contributor (from `Level 6') in terms of the Department of Trade & Industry's B-BBEE Codes of Good Practice. The group has set the short-term target of elevation to `Level 4' and intends to focus on improving all areas of scorecarding to achieve this
objective.
Incorporating retail shareholders on the open market, direct black ownership stands at 29%. Included in this is the 4,4% stake in the company held by black staff through the Esor Broad Based Share Ownership Scheme. More than 85% of the group's 3 225 strong workforce is black and emphasis is placed on skills training and development to accelerate promotion into middle and senior management.
Prospects
The board remains positive that Esorfranki is on track to achieve its targets for the year ahead despite the continued tough trading conditions.
With an order book in hand of approximately R1,6 billion (Geotechnical: R534 million; Esorfranki Civils: R726 million; Esorfranki Pipelines: R314 million) prospects for growth are sufficiently promising to support the board's optimistic outlook.
Esorfranki will continue to focus on Africa and is expected to benefit from an established presence and operating track record in growth nodes on the continent. In the Geotechnical business unit the intention is to significantly escalate the foreign contribution to revenue from 27% to 40% to improve growth.
Esorfranki is therefore actively re-deploying plant and personnel across the continent including to Angola, Botswana, the DRC and Mozambique.
Esorfranki Civils anticipates continued construction projects, with work phases on the Medupi Power Station expected to come back on-stream following the IMF loan award to Eskom. In addition, the business unit is targeting opportunities in the mining sector, particularly in the coal and platinum arenas.
Esorfranki Pipelines is expected to benefit from increasing demand in KwaZulu- Natal, Gauteng and Mpumalanga mainly from municipalities and parastatals including Trans-Caledon Tunnel Authority.
Directorate
During the year Jonathan (Mlungisi) Hlongwane resigned as an independent non- executive director with effect from 26 February 2010. Alternate director to Dr FA Sonn, Johan van Reenen, resigned with effect from 30 November 2009. We thank both Mlungisi and Johan for their contribution.
Dividend declaration
The board has declared a dividend of 15,0 cents per share (2009: 15 cents per share), which equates to 4,75 times dividend cover on HEPS. It remains the policy of the group to review the dividend annually in light of cash flow, gearing and net external debt on the statement of financial position, future availability of credit and the covenants imposed in terms of current financing arrangements.
The salient dates for the dividend are as follows:
Last day to trade cum dividend Thursday, 10 June 2010
Shares trade ex dividend Friday, 11 June 2010
Record date Friday, 18 June 2010
Payment date Monday, 21 June 2010
No share certificates may be dematerialised or rematerialised between Friday, 11 June 2010 and Friday, 18 June 2010, both dates inclusive.
Annual general meeting
The annual general meeting of the company will be held at the company's offices,30 Activia Road, Activia Park, Germiston on Friday, 25 June 2010 at 10h00.
Revenue up 31,3%
PAT up 37,8%
NAV per share up 23,5%
HEPS up 15,6%
COMMENTARY
The audited summarised consolidated results of Esorfranki for the year ended 28 February 2010 ("the year") demonstrate the group's delivery of promised returns through sustained leadership and continued resilience in a challenging market, with significant year-on-year increases in profit after tax ("PAT") and headline earnings per share ("HEPS").
Revenue of R1,9 billion reflects the group's expansion from a geotechnical leader to a broader civil engineering operation, including the positive contributions of the civil engineering and pipelines acquisitions in 2009.
In a strategic milestone Esorfranki transferred to the `Heavy Construction' sector of the Main Board of the JSE on 25 June 2009, capping three successful years on AltX. The group is now appropriately positioned alongside civil engineering construction peers.
Financial results
Revenue increased 31,3% compared to the previous year with PAT of R197,6 million translating into HEPS of 71,3 cents, 15,6% higher than the previous year.
Earnings before interest, taxation, deprecation, impairments and amortisation ("EBITDA") increased 19,4% to R389 million from R325,9 million. EBITDA includes a R19,3 million amortisation of customer contracts following the acquisition of Esorfranki Civils (formerly Patula Construction (Pty) Limited) and Esorfranki Pipelines (formerly Shearwater Plant Hire (Pty) Limited).
The strengthening of the South African Rand in the second half of the year negatively impacted on the translation of foreign operation income, resulting in a post tax charge of R28,9 million.
Cash generated by operations remained robust at R159,6 million (2009: R161,6 million), after tax payments of R126,9 million following changes to the South African provisional tax regulations which became effective in the year.
Esorfranki met all its loan covenants during the year.
Review of operations
Notwithstanding the negative impact of excessive rain in the second half of the year, contract delays and pressure on margins, the business units achieved pleasing results in a challenging macro-economic environment. Esorfranki Geotechnical (comprising Esor Africa and Franki Africa)
As anticipated, revenue declined 20,6% to R944,8 million from R1,2 billion due to the adverse economic and trading conditions, resulting in a contracting market. Operating margins improved year-on-year by 3,3% to 17,4%. Foreign operations accounted for 27,2% (2009: 24%) of Geotechnical revenue.
The business unit recently won a number of major cross-border projects with a combined value of R55 million. These include pipe-jacking for a Gaborone sewer and piling and dynamic compaction for the Jwaneng Cut 8 project. Current contracts for both Gautrain and the new Kusile Power Station remain ongoing in the short-term.
Esorfranki Civils
Revenue increased 17,4 % to R715 million from R609 million in the previous year. The business unit achieved PAT of R100,5 million and respectable operating margins of 20,2%.
Esorfranki Civils is continuing work on Johannesburg's R21 between the N12 interchange and Pomona Road, and is also progressing with the R174 million contract for the second carriageway from the Modikane interchange to the R512 Brits West interchange on the N4. Esorfranki Pipelines
Esorfranki Pipelines posted year-on-year revenue growth of 13,6% to R229 million. Notwithstanding the negative impact of contract delays in the latter part of the year, the business unit posted operating profits of R31 million equating to operating margins of 13,6%.
The business unit was recently awarded a R240 million contract from Rand Water for the construction of the BG3 Pipeline.
CAPEX
Esorfranki regards fleet maintenance and enhancement as key to growth and a significant differentiator. During the year the group invested R96 million (2009: R188,4 million) in property, plant and equipment ("PPE") to expand and maintain operations. The Geotechnical business unit accounted for R42,8 million of this, with R49,7 million invested in PPE at Esorfranki Civils and R3,0 million at Esorfranki Pipelines.
To accommodate future growth and to maintain its competitive edge, the board hasapproved capital expenditure for Esorfranki of R72,0 million for the 2011 financial year.
Black Economic Empowerment
During the year Esorfranki improved its rating to a `Level 5' contributor (from `Level 6') in terms of the Department of Trade & Industry's B-BBEE Codes of Good Practice. The group has set the short-term target of elevation to `Level 4' and intends to focus on improving all areas of scorecarding to achieve this
objective.
Incorporating retail shareholders on the open market, direct black ownership stands at 29%. Included in this is the 4,4% stake in the company held by black staff through the Esor Broad Based Share Ownership Scheme. More than 85% of the group's 3 225 strong workforce is black and emphasis is placed on skills training and development to accelerate promotion into middle and senior management.
Prospects
The board remains positive that Esorfranki is on track to achieve its targets for the year ahead despite the continued tough trading conditions.
With an order book in hand of approximately R1,6 billion (Geotechnical: R534 million; Esorfranki Civils: R726 million; Esorfranki Pipelines: R314 million) prospects for growth are sufficiently promising to support the board's optimistic outlook.
Esorfranki will continue to focus on Africa and is expected to benefit from an established presence and operating track record in growth nodes on the continent. In the Geotechnical business unit the intention is to significantly escalate the foreign contribution to revenue from 27% to 40% to improve growth.
Esorfranki is therefore actively re-deploying plant and personnel across the continent including to Angola, Botswana, the DRC and Mozambique.
Esorfranki Civils anticipates continued construction projects, with work phases on the Medupi Power Station expected to come back on-stream following the IMF loan award to Eskom. In addition, the business unit is targeting opportunities in the mining sector, particularly in the coal and platinum arenas.
Esorfranki Pipelines is expected to benefit from increasing demand in KwaZulu- Natal, Gauteng and Mpumalanga mainly from municipalities and parastatals including Trans-Caledon Tunnel Authority.
Directorate
During the year Jonathan (Mlungisi) Hlongwane resigned as an independent non- executive director with effect from 26 February 2010. Alternate director to Dr FA Sonn, Johan van Reenen, resigned with effect from 30 November 2009. We thank both Mlungisi and Johan for their contribution.
Dividend declaration
The board has declared a dividend of 15,0 cents per share (2009: 15 cents per share), which equates to 4,75 times dividend cover on HEPS. It remains the policy of the group to review the dividend annually in light of cash flow, gearing and net external debt on the statement of financial position, future availability of credit and the covenants imposed in terms of current financing arrangements.
The salient dates for the dividend are as follows:
Last day to trade cum dividend Thursday, 10 June 2010
Shares trade ex dividend Friday, 11 June 2010
Record date Friday, 18 June 2010
Payment date Monday, 21 June 2010
No share certificates may be dematerialised or rematerialised between Friday, 11 June 2010 and Friday, 18 June 2010, both dates inclusive.
Annual general meeting
The annual general meeting of the company will be held at the company's offices,30 Activia Road, Activia Park, Germiston on Friday, 25 June 2010 at 10h00.
Thursday, May 20, 2010
Pan African Resources Plc - Resource upgrade for Phoenix
RESOURCE UPGRADE FOR PHOENIX
HIGHLIGHTS
Total resource increased by 15.8% to 469,000 ounces 4E Platinum Group Metals (`PGM 4E's')
In situ grade increased by 2.6% to 3.15g/t PGM 4E's
THE PHOENIX PROJECT
The Phoenix Project is 100% owned by Phoenix Platinum Mining (Pty) Limited , a wholly owned subsidiary of Pan African.
Phoenix concluded an exclusivity agreement with International Ferro Metals SA (Pty) Limited on 18 February 2010, which agreement sets out the terms and conditions under which Phoenix may construct a Chromite Tailings Retreatment Plant on the IFM property. The site position for the CTRP was agreed on 31 March 2010 and the detailed engineering design of the CTRP is ahead of schedule. Construction is anticipated to commence during the first quarter of 2011 while first production is planned for September 2011.
Metallicon Process Consulting (Pty) Limited was appointed by Pan African to validate and verify all procedures relating to the resource estimate. The estimation process was carried out through a comprehensive drilling, sampling and assaying programme that underpins the resource calculation.
The process resulted in the metal content increasing by 15.8% from 405,000 ounces PGM 4E's reported in the Company's unaudited interim results for the six months ended 31 December 2009, to 469,000 ounces PGM 4E's. The grade increased by 2.6% from 3.07g/t PGM 4E's to 3.15g/t PGM 4E's.
HIGHLIGHTS
Total resource increased by 15.8% to 469,000 ounces 4E Platinum Group Metals (`PGM 4E's')
In situ grade increased by 2.6% to 3.15g/t PGM 4E's
THE PHOENIX PROJECT
The Phoenix Project is 100% owned by Phoenix Platinum Mining (Pty) Limited , a wholly owned subsidiary of Pan African.
Phoenix concluded an exclusivity agreement with International Ferro Metals SA (Pty) Limited on 18 February 2010, which agreement sets out the terms and conditions under which Phoenix may construct a Chromite Tailings Retreatment Plant on the IFM property. The site position for the CTRP was agreed on 31 March 2010 and the detailed engineering design of the CTRP is ahead of schedule. Construction is anticipated to commence during the first quarter of 2011 while first production is planned for September 2011.
Metallicon Process Consulting (Pty) Limited was appointed by Pan African to validate and verify all procedures relating to the resource estimate. The estimation process was carried out through a comprehensive drilling, sampling and assaying programme that underpins the resource calculation.
The process resulted in the metal content increasing by 15.8% from 405,000 ounces PGM 4E's reported in the Company's unaudited interim results for the six months ended 31 December 2009, to 469,000 ounces PGM 4E's. The grade increased by 2.6% from 3.07g/t PGM 4E's to 3.15g/t PGM 4E's.
Tuesday, May 18, 2010
Pan African Resources Plc
UPDATE ON CONDITIONAL ACQUISITION OF A 25% STAKE IN THE RK1 CONSORTIUM AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the announcement released on, 31 March 2010, in which Pan African advised that it had signed a conditional Sale and Purchase Agreement with Ivanhoe Nickel and Platinum Limited to acquire a 25% interest in the RK1 Consortium. RK1 owns a Chromite Tailings Retreatment Plant situated at Kroondal on the Western Limb of the Bushveld Complex in the North West Province of South Africa, which produces Platinum Group Metals concentrate.
The Transaction was subject to, inter alia, the successful completion of a technical and financial due diligence investigation by Pan African. Subsequent to the completion of the Due Diligence, the Company has elected not to proceed with the Transaction.
This decision will not affect the interim Exclusivity and Agreed Terms Agreement entered into on 17 February 2010 between Pan African, its wholly-owned subsidiary Phoenix Platinum Mining (Pty) Limited and International Ferro Metals SA (Pty) Ltd which relates to the siting and construction of the Phoenix CTRP on the IFM Mine Property. This is progressing ahead of schedule and first production is still planned for September 2011.
Withdrawal of cautionary announcement Shareholders are referred to the cautionary announcement first released on 31 March 2010 and subsequently renewed on 30 April 2010, and in terms of the Listings Requirements of JSE Limited are advised that, as the company has elected not to proceed with the Transaction, caution is no longer required to beexercised when dealing in the company`s securities.
Shareholders are referred to the announcement released on, 31 March 2010, in which Pan African advised that it had signed a conditional Sale and Purchase Agreement with Ivanhoe Nickel and Platinum Limited to acquire a 25% interest in the RK1 Consortium. RK1 owns a Chromite Tailings Retreatment Plant situated at Kroondal on the Western Limb of the Bushveld Complex in the North West Province of South Africa, which produces Platinum Group Metals concentrate.
The Transaction was subject to, inter alia, the successful completion of a technical and financial due diligence investigation by Pan African. Subsequent to the completion of the Due Diligence, the Company has elected not to proceed with the Transaction.
This decision will not affect the interim Exclusivity and Agreed Terms Agreement entered into on 17 February 2010 between Pan African, its wholly-owned subsidiary Phoenix Platinum Mining (Pty) Limited and International Ferro Metals SA (Pty) Ltd which relates to the siting and construction of the Phoenix CTRP on the IFM Mine Property. This is progressing ahead of schedule and first production is still planned for September 2011.
Withdrawal of cautionary announcement Shareholders are referred to the cautionary announcement first released on 31 March 2010 and subsequently renewed on 30 April 2010, and in terms of the Listings Requirements of JSE Limited are advised that, as the company has elected not to proceed with the Transaction, caution is no longer required to beexercised when dealing in the company`s securities.
Monday, May 17, 2010
CIC Holdings Limited - Reviewed group results for the year ended 28 February 2010
REVIEWED GROUP RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2010 KEY INFORMATION
- Profit from operations up 49,6% to N$105,1 million.
- Headline earnings up 24,4% to N$58,2 million.
- Headline earnings per share up 24,3% to 25,6 cents.
COMMENTARY
The Group's income streams emanate from three main business segments, being the agency division, sales and merchandising and staffing solutions. Revenue growth has been satisfactory in most markets, given the challenges in African economies and the global financial crisis.
Whilst businesses outside of South Africa fared better for the period, the general trend can be described as positive. The agency divisions remain the largest segment of the Group's business both from a revenue and profit perspective, followed by the sales and merchandising business, and then staffing solutions.
RESULTS
Total revenue for the period increased by 12% to N$2,5 billion. Profit from operations grew a satisfactory 49,6% to N$105,1 million and operating profit margins improved to 4,2% from 3,1%.
This growth was due to a combination of improving category mix in the agency divisions, good margin improvements in staffing solutions, and acquisitions within the sales and merchandising space.
Foreign exchange exposure in the Mozambique operations resulted in a loss of N$9,5 million. This was due to a weakening of the Mozambique Metical against theRand during the period.
Profit before tax improved 37,6% to N$95,2 million. Income tax charges were adversely affected by secondary, withholding and additional taxes that relate mainly to dividend payments by Group companies.
SEGMENTAL REVIEW AGENCY DIVISIONS
All businesses performed to expectation at operating profit level. The performance of this division was marred by the significance of the foreign exchange loss in the Mozambican business.
Namibia enjoyed good top line trading with good additional volumes being generated cross border with Angola for most of the year. Botswana also enjoyed top line growth in many categories with some Zimbabwean cross border upside in the first six months of the year.
Mozambique experienced a difficult year of trading as the local currency played havoc with pricing to the customers as the currency devalued. Consumers resisted price increases and consumption in almost all categories were negatively affected. A number of new categories were added during the year which assisted
in bolstering the basket of sales. Whilst this year has had its challenges there remains a good air of optimism with an expected improvement in the local economy.
STAFFING SOLUTIONS
The staffing solutions business performed well in a tough trading environment. The hospitality division increased its customer base and performed to expectation.
The Botswana division performed particularly well as it expanded its service offering during the year.
SALES AND MERCHANDISING
The Group is now well represented throughout South Africa. CIC increased its shareholding in Vital Merchandising Services Holdings (Pty) Limited ("VMS") by 24,5% during the year. VMS acquired a major shareholding in Peak Instore (Pty) Limited, a brand activations company, during the last quarter.
Profitability was bolstered somewhat by the increase in shareholding in the sales and merchandising business. The business as such performed fairly well in South Africa against the backdrop of a slow economy, high wage increases and trade destocking.
PROSPECT
The fall of published inflation numbers may well be a positive sign for the regional economy. However, higher wage increases and the threat of lingering and persistent high fuel prices will aggravate cost increases and put pressure on margins.
In many instances there are price decreases in the pipeline that merely aggravate margin pressure, whilst consumers remain hawkish regarding increased spending.
Focus will have to be on cost innovation to impact positively on margins, but not affecting service delivery.
It is hoped that there is stability in Mozambique towards the World Cup. In addition the government published salary and wage increases at a new minimum level in May. It is hoped that this will restore some upside to consumer spending, particularly around the World Cup.
Staffing solutions should enjoy some strong upside with the World Cup activity in the hospitality sector in the first six months of the financial year. The Group has a major shareholding in Horizon Distributors Limited, an agency business based in Zambia. This is a start up business and it is an exciting
venture for the Group. A number of Principals have already signed up, with exciting prospects of additions during the year. Whilst the business will achieve profitability for the full year, it is anticipated that meaningful
results will be achieved in the second year of operation.
The Group continues to focus on acquisitions and expansions within the Southern African region. This remains a cornerstone requirement for growth to expand CIC's footprint in Africa.
The Group acquired a further effective 24,5% interest in VMS. As result of the transaction VMS became a subsidiary of CIC and is no longer treated as an Associate. In terms of IFRS 3 (revised) a deemed disposal of the equityaccounted investment took place at fair value when the additional shares were
acquired. This resulted in an accounting loss of R5,4 million which represents the difference between the carrying value and the fair value of the equity accounted investment on the effective date. This loss is excluded from the calculation of Headline Earnings.
Operating lease commitments
The Group has outstanding operating lease commitments totalling N$85,3 million (2009 - N$87,1 million).
Dividend
The directors are pleased to announce that they have declared a final dividend of 7 cents per share on 12 May 2010 (2009 - 5,5 cents). Shareholders are further advised that non-resident shareholders' tax ("NRST") of 10% is deductible by CIC from any dividend distributed by CIC to its shareholders who are non-resident in Namibia and who do not carry on business in Namibia.
The salient dates for the payment of this dividend are set out below:
Last date to trade cum dividend Friday, 25 June 2010
Trading ex dividend commences Monday, 28 June 2010
Record date Friday, 2 July 2010
Payment date Monday, 5 July 2010
- Profit from operations up 49,6% to N$105,1 million.
- Headline earnings up 24,4% to N$58,2 million.
- Headline earnings per share up 24,3% to 25,6 cents.
COMMENTARY
The Group's income streams emanate from three main business segments, being the agency division, sales and merchandising and staffing solutions. Revenue growth has been satisfactory in most markets, given the challenges in African economies and the global financial crisis.
Whilst businesses outside of South Africa fared better for the period, the general trend can be described as positive. The agency divisions remain the largest segment of the Group's business both from a revenue and profit perspective, followed by the sales and merchandising business, and then staffing solutions.
RESULTS
Total revenue for the period increased by 12% to N$2,5 billion. Profit from operations grew a satisfactory 49,6% to N$105,1 million and operating profit margins improved to 4,2% from 3,1%.
This growth was due to a combination of improving category mix in the agency divisions, good margin improvements in staffing solutions, and acquisitions within the sales and merchandising space.
Foreign exchange exposure in the Mozambique operations resulted in a loss of N$9,5 million. This was due to a weakening of the Mozambique Metical against theRand during the period.
Profit before tax improved 37,6% to N$95,2 million. Income tax charges were adversely affected by secondary, withholding and additional taxes that relate mainly to dividend payments by Group companies.
SEGMENTAL REVIEW AGENCY DIVISIONS
All businesses performed to expectation at operating profit level. The performance of this division was marred by the significance of the foreign exchange loss in the Mozambican business.
Namibia enjoyed good top line trading with good additional volumes being generated cross border with Angola for most of the year. Botswana also enjoyed top line growth in many categories with some Zimbabwean cross border upside in the first six months of the year.
Mozambique experienced a difficult year of trading as the local currency played havoc with pricing to the customers as the currency devalued. Consumers resisted price increases and consumption in almost all categories were negatively affected. A number of new categories were added during the year which assisted
in bolstering the basket of sales. Whilst this year has had its challenges there remains a good air of optimism with an expected improvement in the local economy.
STAFFING SOLUTIONS
The staffing solutions business performed well in a tough trading environment. The hospitality division increased its customer base and performed to expectation.
The Botswana division performed particularly well as it expanded its service offering during the year.
SALES AND MERCHANDISING
The Group is now well represented throughout South Africa. CIC increased its shareholding in Vital Merchandising Services Holdings (Pty) Limited ("VMS") by 24,5% during the year. VMS acquired a major shareholding in Peak Instore (Pty) Limited, a brand activations company, during the last quarter.
Profitability was bolstered somewhat by the increase in shareholding in the sales and merchandising business. The business as such performed fairly well in South Africa against the backdrop of a slow economy, high wage increases and trade destocking.
PROSPECT
The fall of published inflation numbers may well be a positive sign for the regional economy. However, higher wage increases and the threat of lingering and persistent high fuel prices will aggravate cost increases and put pressure on margins.
In many instances there are price decreases in the pipeline that merely aggravate margin pressure, whilst consumers remain hawkish regarding increased spending.
Focus will have to be on cost innovation to impact positively on margins, but not affecting service delivery.
It is hoped that there is stability in Mozambique towards the World Cup. In addition the government published salary and wage increases at a new minimum level in May. It is hoped that this will restore some upside to consumer spending, particularly around the World Cup.
Staffing solutions should enjoy some strong upside with the World Cup activity in the hospitality sector in the first six months of the financial year. The Group has a major shareholding in Horizon Distributors Limited, an agency business based in Zambia. This is a start up business and it is an exciting
venture for the Group. A number of Principals have already signed up, with exciting prospects of additions during the year. Whilst the business will achieve profitability for the full year, it is anticipated that meaningful
results will be achieved in the second year of operation.
The Group continues to focus on acquisitions and expansions within the Southern African region. This remains a cornerstone requirement for growth to expand CIC's footprint in Africa.
The Group acquired a further effective 24,5% interest in VMS. As result of the transaction VMS became a subsidiary of CIC and is no longer treated as an Associate. In terms of IFRS 3 (revised) a deemed disposal of the equityaccounted investment took place at fair value when the additional shares were
acquired. This resulted in an accounting loss of R5,4 million which represents the difference between the carrying value and the fair value of the equity accounted investment on the effective date. This loss is excluded from the calculation of Headline Earnings.
Operating lease commitments
The Group has outstanding operating lease commitments totalling N$85,3 million (2009 - N$87,1 million).
Dividend
The directors are pleased to announce that they have declared a final dividend of 7 cents per share on 12 May 2010 (2009 - 5,5 cents). Shareholders are further advised that non-resident shareholders' tax ("NRST") of 10% is deductible by CIC from any dividend distributed by CIC to its shareholders who are non-resident in Namibia and who do not carry on business in Namibia.
The salient dates for the payment of this dividend are set out below:
Last date to trade cum dividend Friday, 25 June 2010
Trading ex dividend commences Monday, 28 June 2010
Record date Friday, 2 July 2010
Payment date Monday, 5 July 2010
Wednesday, February 3, 2010
Pioneer Foods - Announcement Competition Tribunal
Pioneer Foods today received the decision and order of the Competition Tribunal concerning the two complaint referrals brought by the Competition Commission against the Company, known as the Western Cape Bread Complaint and the National Bread Complaint, in which Pioneer Foods' bread baking division was alleged to have colluded with its competitors, amongst others, on bread prices and market division, in the Western Cape and nationally, in contravention of sections 4(1)(b)(i) and (ii) of the Competition Act.
Today the Tribunal ordered Pioneer Foods to pay an administrative penalty of 9.5% of its bread turnover for the Western Cape in the amount of R46 019 954 in respect of the Western Cape Bread Complaint plus an administrative penalty of 10% of Pioneer Foods' total annual bread turnover less the turnover of bread sales in the Western Cape, in the amount of R149 698 660 in respect of the National Bread Complaint, therefore a total administrative penalty of R195 718 614.
The Company will review the findings of the Competition Tribunal and consider its response after which further announcements will be made.
Today the Tribunal ordered Pioneer Foods to pay an administrative penalty of 9.5% of its bread turnover for the Western Cape in the amount of R46 019 954 in respect of the Western Cape Bread Complaint plus an administrative penalty of 10% of Pioneer Foods' total annual bread turnover less the turnover of bread sales in the Western Cape, in the amount of R149 698 660 in respect of the National Bread Complaint, therefore a total administrative penalty of R195 718 614.
The Company will review the findings of the Competition Tribunal and consider its response after which further announcements will be made.
Monday, February 1, 2010
Dimension Data Holdings Plc - Interim management statement
Dimension Data Holdings plc, the specialist global IT services and solution provider, today publishes an interim management statement (IMS), covering the trading period from 1 October 2009 to 31 January 2010
Financial Performance and Position
The Group recorded a sound trading performance for the three months to 31 December 2009. Reported turnover reflected an approximately 6% increase in relation to the three months to 31 December 2008.
Key features of the quarter were a solid performance from the Systems Integration (SI) business, in particular a turnaround in the USA, offset by a poor trading result from Plessey.
On a constant currency basis, turnover for the quarter showed an approximately 9% year on year reduction, although sequentially in relation to the preceding quarter turnover was flat.
The turnover performance is consistent with management's expectations, taking into account that Q1 2009 was a very strong comparative period having enjoyed the benefit of a strong order book from the prior year. As a result, the effects of the global economic downturn were only felt by the Group from Q2 2009. Comparisons are therefore expected to become more favourable in the second quarter of this financial year.
As is the Group's practice, for the remainder of the review reference to growth rates will be on a constant currency basis.
By business, SI product turnover was down year on year, while services continued to show growth. By region, Middle East and Africa, Australia and Europe all recorded improved contributions, with a significant improvement in operating profit in the Americas. Asia's contribution reduced slightly in line with investment in the expansion programme outlined at the year end. SI recorded good sequential growth in order rates in relation to the preceding quarter, and the business remains well positioned going into the second quarter.
Internet Solutions grew turnover and improved operating profit in line with expectations. Express Data reported turnover declines against a backdrop of a very strong Q12009, and a stronger Australian Dollar which impacted unit prices.
Plessey had a very weak quarter, reflecting reduced demand from its mobile service provider clients in Africa. In response, the business reduced its cost base, but expects order rates and trading to improve in the second quarter.
There were no major changes to working capital and the Group's cash position remained strong throughout the period.
Outlook
The Group delivered a sound performance for the first quarter of 2010, benefiting in particular from a resilient performance in the SI business.
Looking forward, we are seeing improved demand in some regions, although the overall demand environment by region and business remains mixed. Order intake in the first quarter reflected sequential growth over Q4 2009.
Management's expectation of flat constant currency turnover in the first half of the financial year, and single digit constant currency turnover growth for the full year, is unchanged from when the Group reported its year end results in mid November 2009. This, together with anticipated stable gross margins, means that the Group remains well positioned to deliver on its internal objectives for the half and for the full year.
Assuming no significant exchange rate movements from current levels, the Group's reported results for the first half will benefit from the strength, relative to the comparative period, of its major trading currencies against the US Dollar.
We remain optimistic about the positioning and prospects for Dimension Data both in the short and medium term and continue to see good opportunities for growth in many parts of the Group. We are committed to continue to invest in our execution capabilities and to enhancing our competitive position to capture opportunities in the markets within which the Group operates.
The Group is scheduled to release its annual results for the 6 months to 31 March 2010 on 12 May 2010.
Financial Performance and Position
The Group recorded a sound trading performance for the three months to 31 December 2009. Reported turnover reflected an approximately 6% increase in relation to the three months to 31 December 2008.
Key features of the quarter were a solid performance from the Systems Integration (SI) business, in particular a turnaround in the USA, offset by a poor trading result from Plessey.
On a constant currency basis, turnover for the quarter showed an approximately 9% year on year reduction, although sequentially in relation to the preceding quarter turnover was flat.
The turnover performance is consistent with management's expectations, taking into account that Q1 2009 was a very strong comparative period having enjoyed the benefit of a strong order book from the prior year. As a result, the effects of the global economic downturn were only felt by the Group from Q2 2009. Comparisons are therefore expected to become more favourable in the second quarter of this financial year.
As is the Group's practice, for the remainder of the review reference to growth rates will be on a constant currency basis.
By business, SI product turnover was down year on year, while services continued to show growth. By region, Middle East and Africa, Australia and Europe all recorded improved contributions, with a significant improvement in operating profit in the Americas. Asia's contribution reduced slightly in line with investment in the expansion programme outlined at the year end. SI recorded good sequential growth in order rates in relation to the preceding quarter, and the business remains well positioned going into the second quarter.
Internet Solutions grew turnover and improved operating profit in line with expectations. Express Data reported turnover declines against a backdrop of a very strong Q12009, and a stronger Australian Dollar which impacted unit prices.
Plessey had a very weak quarter, reflecting reduced demand from its mobile service provider clients in Africa. In response, the business reduced its cost base, but expects order rates and trading to improve in the second quarter.
There were no major changes to working capital and the Group's cash position remained strong throughout the period.
Outlook
The Group delivered a sound performance for the first quarter of 2010, benefiting in particular from a resilient performance in the SI business.
Looking forward, we are seeing improved demand in some regions, although the overall demand environment by region and business remains mixed. Order intake in the first quarter reflected sequential growth over Q4 2009.
Management's expectation of flat constant currency turnover in the first half of the financial year, and single digit constant currency turnover growth for the full year, is unchanged from when the Group reported its year end results in mid November 2009. This, together with anticipated stable gross margins, means that the Group remains well positioned to deliver on its internal objectives for the half and for the full year.
Assuming no significant exchange rate movements from current levels, the Group's reported results for the first half will benefit from the strength, relative to the comparative period, of its major trading currencies against the US Dollar.
We remain optimistic about the positioning and prospects for Dimension Data both in the short and medium term and continue to see good opportunities for growth in many parts of the Group. We are committed to continue to invest in our execution capabilities and to enhancing our competitive position to capture opportunities in the markets within which the Group operates.
The Group is scheduled to release its annual results for the 6 months to 31 March 2010 on 12 May 2010.
Merafe - Ferrochrome production for the twelve months ended 31 December 2009
Shareholders of the Company are advised that ferrochrome production for the Xstrata-Merafe Chrome Venture for the year ended 31 December 2009 decreased by 30% compared to the previous comparative period.
This arose as a result of the suspension of up to 80% of production capacity in late 2008 and early 2009 in response to the rapid decline in market conditions.
Production was progressively increased during the year from 20% of annual capacity in early January to approximately 85% by year end, in line with improving demand.
The strengthening of the Rand against the US Dollar during 2009 continued to exert pressure on margins and together with improving demand, enabled ferrochrome producers to achieve a 30% increase in the ferrochrome price from $0.79 per pound in the first quarter of 2009 to $1.03 per pound in the fourth quarter of 2009.
Ferrochrome production attributable to Merafe for 2009 was as follows:
This arose as a result of the suspension of up to 80% of production capacity in late 2008 and early 2009 in response to the rapid decline in market conditions.
Production was progressively increased during the year from 20% of annual capacity in early January to approximately 85% by year end, in line with improving demand.
The strengthening of the Rand against the US Dollar during 2009 continued to exert pressure on margins and together with improving demand, enabled ferrochrome producers to achieve a 30% increase in the ferrochrome price from $0.79 per pound in the first quarter of 2009 to $1.03 per pound in the fourth quarter of 2009.
Ferrochrome production attributable to Merafe for 2009 was as follows:
Year ended Year ended
Ferrochrome production 31.12.2009 31.12.2008
Attributable production (kt) 203 290
Indicative average published price (USCents 85.0 175.8 (USD)/lb)
Indicative average published price (USCents 85.0 175.8 (USD)/lb)
Friday, January 29, 2010
JD Group Limited - Sales and debtors update for the four months to 15 January 2010
Total sale of merchandise for the first four months of trading was 2,8% down on the corresponding period of the previous year.
The cash division (incorporating Incredible Connection and Hi-Fi Corporation)showed a 7% overall increase in merchandise sales. Incredible Connection showed good top line growth with December sales up a very pleasing 18%. Hi-Fi Corporation grew sales for the period by 3% with a growth in sales of 10% over December. Product margin at Hi-Fi Corporation remained under pressure, driven by the very competitive environment in which it trades.
ABRA, the Group's Polish operation, reflected a 7% decrease in sale of merchandise in Zloty terms. However, the Rand equivalent has been adversely affected by a 24% decline in the average exchange rate for the period, resulting in a 29% decrease in ABRA's sales for the four months in rand terms.
The credit chains experienced a mixed performance in top line sales. While cash sales in this division increased year on year by 9%, credit sales were down by 11% resulting in an overall decline of 5%.
Total debtors costs decreased by 23% over the corresponding period. The decline in debtors costs for the month of December was 28%. The improved collection rates together with the reduced bad debts are ahead of expectation, given that the strategy of separating retail from financial services has only been in place for one year.
The information provided above has not been reviewed or reported on by the Group's auditors.
The cash division (incorporating Incredible Connection and Hi-Fi Corporation)showed a 7% overall increase in merchandise sales. Incredible Connection showed good top line growth with December sales up a very pleasing 18%. Hi-Fi Corporation grew sales for the period by 3% with a growth in sales of 10% over December. Product margin at Hi-Fi Corporation remained under pressure, driven by the very competitive environment in which it trades.
ABRA, the Group's Polish operation, reflected a 7% decrease in sale of merchandise in Zloty terms. However, the Rand equivalent has been adversely affected by a 24% decline in the average exchange rate for the period, resulting in a 29% decrease in ABRA's sales for the four months in rand terms.
The credit chains experienced a mixed performance in top line sales. While cash sales in this division increased year on year by 9%, credit sales were down by 11% resulting in an overall decline of 5%.
Total debtors costs decreased by 23% over the corresponding period. The decline in debtors costs for the month of December was 28%. The improved collection rates together with the reduced bad debts are ahead of expectation, given that the strategy of separating retail from financial services has only been in place for one year.
The information provided above has not been reviewed or reported on by the Group's auditors.
BHP Billiton Approves Funding For Further Growth At Western Australia Iron Ore
Billiton today announced approval for US$1.93 billion (BHP Billiton share US$1.73 billion)of capital expenditure to underpin the further accelerated growth of its Western Australia Iron Ore business.
This investment represents early expenditure for the company's Rapid Growth Project 6 (RGP6). RGP6 is expected to increase installed capacity at the company's Western Australia Iron Ore assets to 240 million tonnes per annum (mtpa) during calendar year 2013.
The funding will allow early procurement of long lead time items and detailed engineering to continue the expansion of the inner harbour at Port Hedland, progress rail track duplication works and expand the Jimblebar mining operation.
BHP Billiton President, Iron Ore, Ian Ashby said "This investment is the continuation of our long-term strategy of adding capacity in our high quality iron ore business to support our confidence in the longer term demand for iron ore globally. By the time RGP6 is completed, we will have more than tripled installed capacity at our Western Australia Iron Ore operations since we first invested in our accelerated growth program in 2002. The approval for the balance of the RGP6 capital will be considered during the second half of the 2010 calendar year".
On 5 June 2009, BHP Billiton and Rio Tinto signed an agreement of core principles to establish a production joint venture covering the entirety of both companies' Western Australian iron ore assets.
BHP Billiton and Rio Tinto concluded binding agreements on 5 December 2009 on the proposed JV that cover all aspects of how the joint venture will operate and be governed. Under the binding agreements, Rio Tinto will have the option to participate in RGP6 by paying its share of invested capital; with this decision being made after the Joint Venture transaction is completed, estimated to occur in the second half of the 2010 calendar year.
This investment represents early expenditure for the company's Rapid Growth Project 6 (RGP6). RGP6 is expected to increase installed capacity at the company's Western Australia Iron Ore assets to 240 million tonnes per annum (mtpa) during calendar year 2013.
The funding will allow early procurement of long lead time items and detailed engineering to continue the expansion of the inner harbour at Port Hedland, progress rail track duplication works and expand the Jimblebar mining operation.
BHP Billiton President, Iron Ore, Ian Ashby said "This investment is the continuation of our long-term strategy of adding capacity in our high quality iron ore business to support our confidence in the longer term demand for iron ore globally. By the time RGP6 is completed, we will have more than tripled installed capacity at our Western Australia Iron Ore operations since we first invested in our accelerated growth program in 2002. The approval for the balance of the RGP6 capital will be considered during the second half of the 2010 calendar year".
On 5 June 2009, BHP Billiton and Rio Tinto signed an agreement of core principles to establish a production joint venture covering the entirety of both companies' Western Australian iron ore assets.
BHP Billiton and Rio Tinto concluded binding agreements on 5 December 2009 on the proposed JV that cover all aspects of how the joint venture will operate and be governed. Under the binding agreements, Rio Tinto will have the option to participate in RGP6 by paying its share of invested capital; with this decision being made after the Joint Venture transaction is completed, estimated to occur in the second half of the 2010 calendar year.
Wednesday, January 27, 2010
Pan African Resources Plc - Trading update
The earnings per share for the six months ended 31 December 2009, denominated in GBP, is expected to be between 45 per cent and 50 per cent higher than those for the previous corresponding period (six months ended 31 December 2008: 0.23 pence per share).
Earnings per share, calculated in South African Rand, using the average ZAR:GBP exchange rate of R12.48 prevailing during the period (six months ended 31 December 2008 average exchange rate of R15.13), is expected to be between 17 per cent and 22 per cent higher than those for the previous corresponding period (six months ended 31 December 2008: 3.53 cents per share).
Headline earnings per share for the six months ended 31 December 2009, denominated in GBP, is expected to be between 1 per cent and 6 per cent higher than those for the previous corresponding period (six months ended 31 December 2008: 0.36 pence per share).
Headline earnings calculated in ZAR is expected to be between 13 per cent and 18 per cent lower than those for the six months ended 31 December 2008 (six months ended 31 December 2008: 5.37 cents per share).
It is anticipated that the interim results for the six months ended 31 December 2009 will be released on Wednesday, 10 February 2010.
Earnings per share, calculated in South African Rand, using the average ZAR:GBP exchange rate of R12.48 prevailing during the period (six months ended 31 December 2008 average exchange rate of R15.13), is expected to be between 17 per cent and 22 per cent higher than those for the previous corresponding period (six months ended 31 December 2008: 3.53 cents per share).
Headline earnings per share for the six months ended 31 December 2009, denominated in GBP, is expected to be between 1 per cent and 6 per cent higher than those for the previous corresponding period (six months ended 31 December 2008: 0.36 pence per share).
Headline earnings calculated in ZAR is expected to be between 13 per cent and 18 per cent lower than those for the six months ended 31 December 2008 (six months ended 31 December 2008: 5.37 cents per share).
It is anticipated that the interim results for the six months ended 31 December 2009 will be released on Wednesday, 10 February 2010.
Thursday, January 14, 2010
Datatec Limited - Interim Management Statement
Datatec, the international Information and Communications Technology group, is today publishing an Interim Management Statement covering the period from 1 September 2009
to 31 December 2009.
Based on trading and profitability during the Period, as anticipated the second half of the current financial year is expected to be sequentially and comparatively better than the first half of the current financial year and the second half of the prior financial year.
The Group has now returned to revenue growth in all its divisions during the second half with the early signs of improvement seen at the end of the second quarter continuing into the second half of the current financial year. Overall gross margins have remained stable.
On 14 May 2009 the Group published a forecast for the financial year ending 28 February 2010 of revenues of between $3.7 billion and $4 billion, profit after tax of approximately $44 million, underlying earnings per share of approximately 29 US cents and earnings* and headline* earnings per share of approximately 23 US cents. Based on current exchange rates and trading conditions, all of these forecasts remain unchanged.
Jens Montanana, Chief Executive Officer said: "We are very pleased to see that all parts of the Group around the world are now showing revenue growth with Logicalis appearing to pass its inflection point at the end of 2009. Our cash generation remains strong and margins are steady. The inherent leverage in our business model is beginning to show through as the cost reductions initiated over a year ago provide a solid basis for capturing the benefits of any revenue growth".
Westcon and Westcon Emerging Markets
Westcon's strong financial performance during the first half of the current financial year continues to improve steadily. Third quarter revenues showed sequential growth over the first two quarters, with stable gross margins, EBITDA margins and improved profitability. Westcon is benefiting strongly from the high operational gearing that exists as a result of its significantly reduced cost base and improved operational efficiencies.
Trading in the Americas, particularly in the US, continued to improve over the first half of the current financial year, with conditions in Europe stable and the Asia Pacific region remaining strong.
Westcon Emerging Markets (Africa, Middle East and India) is continuing to trade well with an improved performance over the prior year. Westcon's strong working capital and operating cash flow management has continued.
Logicalis
Trading improved from the first half of the financial year, although the business continues to be affected by larger projects being delayed with the resultant impact on attached services. However, all operations appear to have recently passed an inflection point.
Particularly pleasing was a very strong performance in the UK in December on the back of the IBM year end and another solid performance in South America. Logicalis is typically a business that improves later in the economic cycle, in part due to the longer term nature of its customer contracts. Logicalis is expected to produce a better second half performance in the current financial year than the first half.
Consulting Services
Trading in the second half is expected to show a sequential improvement over the first half of the financial year, and operating profits have improved after a difficult start to the financial year. Telecommunications operators and service providers reduced discretionary spend significantly through much of 2009, resulting in lower strategy consulting revenues.
Acquisition of NetStar
The acquisition of NetStar Group Holding Limited for $19.8 millionin new Datatec shares, announced on 8 December 2009, is expected to complete shortly. This is expected to be an earnings enhancing acquisition of an established independent provider of network integration and managed services across the Asia-Pacific region, and brings with it an excellent reputation.
It establishes a sizeable presence for Logicalis across South East Asia, China and Australia and in one transaction provides:
- an ideal pan Asia-Pacific platform to develop the business by further acquisitions in the region and to roll-out new services in some of the world's most dynamic economies and markets;
- the ability to meet the growing requirement from many multinational customers to provide them with coverage across the region; and
- a presence in mainland China, the most significant developing market in the world.
The Group expects to release its preliminary results for the year ending 28 February 2010 on Thursday 13 May 2010.
to 31 December 2009.
Based on trading and profitability during the Period, as anticipated the second half of the current financial year is expected to be sequentially and comparatively better than the first half of the current financial year and the second half of the prior financial year.
The Group has now returned to revenue growth in all its divisions during the second half with the early signs of improvement seen at the end of the second quarter continuing into the second half of the current financial year. Overall gross margins have remained stable.
On 14 May 2009 the Group published a forecast for the financial year ending 28 February 2010 of revenues of between $3.7 billion and $4 billion, profit after tax of approximately $44 million, underlying earnings per share of approximately 29 US cents and earnings* and headline* earnings per share of approximately 23 US cents. Based on current exchange rates and trading conditions, all of these forecasts remain unchanged.
Jens Montanana, Chief Executive Officer said: "We are very pleased to see that all parts of the Group around the world are now showing revenue growth with Logicalis appearing to pass its inflection point at the end of 2009. Our cash generation remains strong and margins are steady. The inherent leverage in our business model is beginning to show through as the cost reductions initiated over a year ago provide a solid basis for capturing the benefits of any revenue growth".
Westcon and Westcon Emerging Markets
Westcon's strong financial performance during the first half of the current financial year continues to improve steadily. Third quarter revenues showed sequential growth over the first two quarters, with stable gross margins, EBITDA margins and improved profitability. Westcon is benefiting strongly from the high operational gearing that exists as a result of its significantly reduced cost base and improved operational efficiencies.
Trading in the Americas, particularly in the US, continued to improve over the first half of the current financial year, with conditions in Europe stable and the Asia Pacific region remaining strong.
Westcon Emerging Markets (Africa, Middle East and India) is continuing to trade well with an improved performance over the prior year. Westcon's strong working capital and operating cash flow management has continued.
Logicalis
Trading improved from the first half of the financial year, although the business continues to be affected by larger projects being delayed with the resultant impact on attached services. However, all operations appear to have recently passed an inflection point.
Particularly pleasing was a very strong performance in the UK in December on the back of the IBM year end and another solid performance in South America. Logicalis is typically a business that improves later in the economic cycle, in part due to the longer term nature of its customer contracts. Logicalis is expected to produce a better second half performance in the current financial year than the first half.
Consulting Services
Trading in the second half is expected to show a sequential improvement over the first half of the financial year, and operating profits have improved after a difficult start to the financial year. Telecommunications operators and service providers reduced discretionary spend significantly through much of 2009, resulting in lower strategy consulting revenues.
Acquisition of NetStar
The acquisition of NetStar Group Holding Limited for $19.8 millionin new Datatec shares, announced on 8 December 2009, is expected to complete shortly. This is expected to be an earnings enhancing acquisition of an established independent provider of network integration and managed services across the Asia-Pacific region, and brings with it an excellent reputation.
It establishes a sizeable presence for Logicalis across South East Asia, China and Australia and in one transaction provides:
- an ideal pan Asia-Pacific platform to develop the business by further acquisitions in the region and to roll-out new services in some of the world's most dynamic economies and markets;
- the ability to meet the growing requirement from many multinational customers to provide them with coverage across the region; and
- a presence in mainland China, the most significant developing market in the world.
The Group expects to release its preliminary results for the year ending 28 February 2010 on Thursday 13 May 2010.
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