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KDV
KDV
KDV - Kaydav Group Limited - Audited results for the year ended 31 December 2009
KAYDAV GROUP LIMITED
Incorporated in the Republic of South Africa
Registration Number: 2006/038698/06
JSE code: KDV * ISIN: ZAE000108940
("KayDav" or "the Group")
Audited results for the year ended 31 December 2009
- Revenue R461 million (up 5%)
- Headline earnings per share 2.3 cents (down 66%)
- Tangible net asset value per share 47.2 cents (up 13%)
Consolidated statement of comprehensive income
Audited year ended 31 December 2009 2008
R R
Revenue 461 236 347 440 446 378
Cost of sales (316 385 280) (304 878 293)
Gross profit 144 851 067 135 568 085
Other income 500 486 464 062
Operating expenses (131 307 258) (105 004 236)
Goodwill impairment - (119 233 190)
Operating profit/(loss) 14 044 295 (88 205 279)
Interest received 807 565 1 037 795
Interest paid (2 043 334) (2 508 493)
Profit/(loss) before taxation 12 808 526 (89 675 977)
Taxation (6 303 138) (9 392 892)
Profit/(loss) for the year 6 505 388 (99 068 869)
Other comprehensive income - -
Total comprehensive income/(loss)
attributable to equity holders of the
parent 6 505 388 (99 068 869)
Reconciliation between earnings and
headline earnings
Profit/(loss) for the year 6 505 388 (99 068 869)
Loss/(profit) on disposal of
plant and equipment 50 034 (4 607)
Taxation on (loss)/profit on disposal of
property, plant and equipment (14 009) 1 290
Goodwill impairment - 119 233 190
Headline earnings attributable to equity
holders 6 541 413 20 161 004
Weighted average number of shares in issue 279 416 077 295 232 716
Basic and diluted earnings/(loss) per
share (cents) 2.3 (33.6)
Headline earnings per share (cents) 2.3 6.8
Consolidated statement of financial position
Audited at 31 December 2009 2008
R R
ASSETS
Non-current assets 52 291 161 52 210 613
Plant and equipment 35 542 939 35 914 574
Goodwill 14 302 804 14 302 804
Deferred taxation 2 445 418 1 993 235
Current assets 142 731 681 162 232 239
Inventories 62 177 403 87 454 624
Trade and other receivables 69 506 096 67 956 516
Cash and cash equivalents 9 491 221 6 821 099
Taxation 1 556 961 -
Total assets 195 022 842 214 442 852
EQUITY AND LIABILITIES
Capital and reserves 125 842 799 137 186 672
Share capital 236 295
Share premium 211 628 350 229 477 552
Accumulated loss (85 785 787) (92 291 175)
Non-current liabilities 6 535 603 10 494 405
Instalment sale liabilities 6 018 822 9 195 960
Deferred taxation 516 781 1 298 445
Current liabilities 62 644 440 66 761 775
Trade and other payables 50 664 350 53 197 846
Current portion of instalment sale
liabilities 2 552 466 3 501 529
Bank overdraft 7 689 783 7 248 796
Taxation - 269 085
Provisions 1 737 841 2 544 519
Total equity and liabilities 195 022 842 214 442 852
Shares in issue at year-end 236 186 273 295 232 716
Net asset value per share (cents) 53.3 46.5
Net tangible asset value per share (cents) 47.2 41.6
Condensed consolidated statement of cash flows
Audited year ended 31 December 2009 2008
R R
Cash flows from operating activities 28 102 830 10 237 158
Cash flows from investing activities (3 898 234) (16 507 360)
Cash flows from financing activities (21 975 461) 3 018 355
Net increase/(decrease) in cash and
cash equivalents 2 229 135 (3 251 847)
Cash and cash equivalents at beginning
of year (427 697) 2 824 150
Cash and cash equivalents at end of year 1 801 438 (427 697)
Condensed statement of changes in equity
Audited year ended 31 December 2009 2008
R R
Balance at the beginning of the year 137 186 672 236 255 541
Repurchase of shares (17 849 261)
Total comprehensive income/(loss) for the
year 6 505 388 (99 068 869)
Balance at the end of the year 125 842 799 137 186 672
Goodwill reconciliation
Goodwill at the beginning of the year 14 302 804 133 535 994
Impairment - (119 233 190)
Goodwill at the end of the year 14 302 804 14 302 804
Segmental analysis
Audited year ended 31 December 2009 2008
R R
Segmental revenue
Board distribution 429 014 760 430 638 584
Manufacturing 51 597 968 32 935 490
Internal revenue (19 376 381) (23 127 696)
Net revenue 461 236 347 440 446 378
Segmental results
Board distribution 19 393 767 32 898 267
Manufacturing (5 348 830) (1 870 356)
Other (642) -
Operating profit before goodwill
impairment and interest 14 044 295 31 027 911
Goodwill impairment - (119 233 190)
Operating profit/(loss) 14 044 295 (88 205 279)
Commentary
Introduction
KayDav specialises in the distribution and adding of value to wood-based panels,
which are products manufactured through the compression of wood waste into a
solid panel. Wood-based panels are used for a variety of purposes in the
construction, furniture manufacturing and shopfitting industries.
Financial results
The Group experienced difficult trading conditions throughout the financial year
due to the general decrease in residential construction, home improvement and
retail activity. A decrease in sales activity, selling price deflation,
increased bad debts expense and the impact of the derecognition of a deferred
taxation asset resulted in headline earnings of 2.3 cents per share, well below
headline earnings of 6.8 cents per share for the year ended 31 December 2008.
Excluding sales from businesses opened during the second half of 2008, revenue
for the year ended 31 December 2009 was 8% below that of the previous
corresponding period. Including sales from these new businesses, revenue was 5%
higher than that of the year ended 31 December 2008.
The deterioration of the debtors` book resulted in an increase in the impairment
allowance of R9 670 615 (2008: R1 562 727). In addition, bad debts of R6 027 188
(2008: R3 648 175) were written off during the year. Consequently, the bad debt
expense for 2009 of R15 697 803 was R10 486 901 more than that of the previous
year.
Applying IFRS in respect of deferred taxation assets, a previously recognised
deferred taxation asset of R934 079 relating to one of the Group`s manufacturing
businesses was derecognised. This deferred taxation asset, if recognised, would
have increased to R2 102 964. As a result of not recognising the potential
deferred taxation asset, profit for the period was reduced by R2 102 964.
The Group`s balance sheet reflects a net tangible asset value of R111.5 million
(2008: R122.9 million) after the repurchase of 59 046 443 shares on the open
market at a cost of R17 849 261. Net interest-bearing borrowings, after
adjusting for cash resources, was 6% of net tangible asset value at
31 December 2009.
There has been a significant reduction in the level of inventories carried
compared to 31 December 2008 due to improved working capital management.
Consequently, reduced purchasing activity has led to the reduction in the level
of creditors at 31 December 2009.
The board is of the opinion that while the recession, in particular residential
construction and consumer spending, has impacted severely on the Group`s
headline earnings, its solid financial structure will allow it to weather the
tough trading conditions.
Prospects
Management believes that as bank lending and residential construction activity
resumes we can expect moderate sales growth and improved profitability in the
ensuing financial year.
The Group will continue to focus on increasing its market share and
profitability while maintaining and improving working capital efficiency.
While the global and local economic environment remains uncertain, we believe
that the worst is behind us and that steady economic growth will continue beyond
2010.
Changes to capital structure
As mentioned above the Group acquired 59 046 443 KayDav shares on the open
market during the 2009 financial year. These shares were acquired at 30 cents
per share and were cancelled resulting in the total number of shares in issue
decreasing to 236 186 273.
As set out in the circular to shareholders dated 1 March 2010, KayDav has
reached agreement with Stanlib Asset Management Limited and Peregrine Equities
(Proprietary) Limited to repurchase 51 600 000 KayDav shares at 30 cents per
share in terms of a specific buy-back. Full details on the repurchase and the
general meeting of shareholders being held on 23 March 2010 to vote on this
transaction are contained in the circular.
Dividends
No dividends were declared during the year under review.
Basis of preparation
These financial statements have been prepared in accordance with International
Financial Reporting Standards, the requirements of IAS 34 (Interim Financial
Reporting) and in compliance with the JSE Listings Requirements and the
Companies Act of South Africa.
The accounting policies applied in preparing these annual financial statements
are consistent with those presented in the annual financial statements for the
year ended 31 December 2008 except for the application of IAS 1 and IFRS 8 which
is applicable from years commencing 1 January 2009 and require additional
disclosure.
The consolidated financial statements have been audited by the Group`s auditors
PKF (Jhb) Incorporated whose unqualified audit report is available for
inspection at Kaydav`s registered office.
Appreciation
The board extends its appreciation to our management and staff for their efforts
during the year under review. We also thank our customers and suppliers for
their continued support.
On behalf of the board
I H Stern G F Davidson
Chairman Chief Executive Officer
Cape Town
19 March 2010
Corporate information
Executive Directors: G F Davidson (CEO), G Davidson, M Slier (CFO), J Katz
Non-executive Directors: I H Stern (Chairman), J Hertz
Registration Number: 2006/038698/06
Registered Address: 105 Bamboesvlei Road, Ottery, 7800
Postal Address: PO Box 272, Ottery, 7808
Telephone: 021 704 7060 Facsimile: 021 704 2082
Company Secretary: Probity Business Services (Pty) Limited
Transfer Secretaries: Link Market Services South Africa (Pty) Limited
Sponsor: Java Capital (Pty) Limited
Date: 19/03/2010 12:42:01 Produced by the JSE SENS Department.
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