ACE - Accentuate Limited - Reviewed results for the six months ended
ACE
ACE
ACE - Accentuate Limited - Reviewed results for the six months ended
31 December 2011
Accentuate Limited
(Incorporated in the Republic of South Africa)
(Registration number 2004/029691/06)
Share code: ACE
ISIN: ZAE000115986
("Accentuate" or "the group" or "the company")
REVIEWED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2011
HIGHLIGHTS
- HEPS increase by 99% to 6.86 cents per share
- Revenue up 12.21%
- Successful disposal of Centurion Glass and Aluminium
Consolidated Abridged Financial Statements for the six months ended
31 December 2011
Consolidated abridged statement of financial position
Reviewed 6 months Audited Reviewed 6 months
ended 31 December 30 June ended 31 December
2011 2011 2010
R`000 R`000 R`000
Assets
Non-current assets 89 022 87 385 103 025
Property, plant and equipment 46 487 48 348 35 311
Goodwill 34 928 34 928 62 424
Intangible assets 729 1 169 1 778
Other financial assets 3 938 - -
Deferred taxation 2 940 2 940 3 512
Current assets 109 069 95 022 107 490
Inventories 41 788 41 360 42 230
Other financial assets 6 186 368 368
Current tax receivables 4 092 2 647 3 115
Trade and other receivables 41 732 34 918 61 324
Cash and Bank 15 271 15 729 453
Assets of disposal group - 16 281 -
Total assets 198 091 198 688 210 515
Equity and liabilities
Equity
Equity attributable to
Equity holders of parent
Capital and reserves
Share capital 125 384 125 555 125 713
Reserves 23 924 23 924 10 557
Accumulated (loss) / earnings (27 175) (32 428) 11 433
122 133 117 051 147 703
Non-current liabilities
Other financial liabilities 5 700 8 550 11 498
Finance lease obligations - - 432
Deferred taxation 5 247 5 247 2 915
10 947 13 797 14 845
Current liabilities
Other financial liabilities 5 797 6 007 6 006
Finance lease obligations 160 269 292
Trade and other payables 30 380 31 999 34 488
Operating lease liability 973 794 427
Current tax payable 2 472 551 1 268
Cash and Bank 25 229 21 496 5 486
65 011 61 116 47 967
Liabilities of disposal group - 6 724 -
Total equity and liabilities 198 091 198 688 210 515
Number of shares in issue 111 108 109 111 108 109 111 108 109
Net asset value per
share (cents) 110 105 133
Tangible net asset
value per share (cents) 78 73 75
Consolidated abridged statement of comprehensive income
Reviewed 6 months Audited Reviewed 6 months
ended 31 December 30 June 2011 ended 31 December
2011 R`000 2010
R`000 R`000
Revenue 143 341 249 390 127 744
Cost of sales (66 373) (113 556) (61 349)
Gross profit 76 968 135 834 66 395
Other income 636 415 139
Other operating expenses (64 513) (114 351) (55 189)
Earnings before interest,
tax, depreciation and
amortisation 13 091 21 898 11 345
Depreciation and amortisation (3 198) (6 435) (3 203)
Goodwill impairment - (70 836) (33 866)
Profit before interest
and taxation 9 893 (55 373) (25 724)
Interest received 125 - 4
Finance costs (909) (2 942) (1 642)
Profit / (loss)
before interest and tax 9 109 (58 315) (27 362)
Income taxation expense (1 921) (3 738) (964)
Profit / (loss) for
the period from
continuing operations 7 188 (62 053) (28 326)
Profit / (loss) for
the period from
discontinuing operations (1 935) (12 554) (2 003)
Profit / (loss) for the period 5 253 (74 607) (30 329)
Other comprehensive
income for the period
net of taxation - 417 -
Total comprehensive
income / (loss) for the period
Attributable to: 5 253 (74 190) (30 329)
Equity holders of the parent 5 253 (74 190) (30 329)
Reconciliation of
headline earnings 5 253 (74 190) (30 329)
Net profit / (loss)
for the period 5 253 (74 607) (30 329)
Adjusted for (profit)
/ loss on disposal of
property, plant and equipment - 111 (20)
Impairment of goodwill - 70 836 33 866
Loss on disposal group sold 2 247 - -
Tax effect of adjustments (315) - -
Headline earnings /
(loss) attributable
to the equity
holders of the parent 7 185 (3 660) 3 517
Weighted average
number of shares in issue 104 809 755 104 231 138 101 854 248
Earnings (loss) per share
from continuing operations(cents) 6.86 (59.53) (27.81)
Earnings / (loss) per share from
Combined operations (cents) 5.01 (71.58) (29.78)
Diluted earnings /(loss) per share
(cents) 5.01 (71.58) (29.78)
Headline earnings per
share (cents) 6.86 (3.72) 3.45
Diluted headline earnings
per share (cents) 6.86 (3.72) 3.45
Consolidated abridged statement of cash flows
Reviewed 6 months ended Audited Reviewed 6 months
31 December 30 June ended 31 December
2011 2011 2010
R`000 R`000 R`000
Cash flows from operating
activities 2 351 9 881 5 459
Cash generated from operations 4 164 15 667 7 469
Interest received 422 163 4
Taxation paid (1 326) (3 000) (323)
Finance costs (909) (2 949) (1 691)
Cash flows from
investing activities (3 374) (2 623) (671)
Proceeds on sale of
property, plant and 4 384 563
equipment
Acquisition of property,
plant and equipment (878) (2 834) (1 220)
Acquisition of
intangible assets (42) (173) (14)
Proceeds on sale of investments 20 - -
Increase in financial assets
Cash flow from
discontinued operations (975) - -
(1 503) - -
Cash flows from
financing activities (3 169) (8 438) (5 235)
(Decrease) in financial
liabilities (3 060) (6 002) (3 020)
(Decrease) in finance
lease liabilities (109) (228) (13)
Dividends paid - (2 208) (2 202)
Net decrease in cash
and cash equivalents (4 192) (1 180) (447)
Cash and cash equivalents
at the beginning of (5 766) (4 586) (4 586)
the period
Cash and cash equivalents
at the end of the period (9 958) (5 766) (5 033)
Consolidated abridged statement of changes in equity
Attributable to equity holders of the parent
Share capital Share premium Reserves for
R`000 R`000 own shares
R`000
Balance at 1 July 2010 1 124 915 139
Total comprehensive loss
for the period - - -
Revaluation of property,
plant and equipment - - -
Share options exercised - 639 -
Dividends - - -
Balance at 30 June 2011 1 125 554 139
Total comprehensive income
for the period - - -
Purchase of own / - (171) -
treasury shares
Balance at 31 1 125 383 139
December 2011
Revaluation Retained
reserve earnings / (loss) Total
R`000 R`000 R`000
Balance at 1 July 2010 10 418 43 984 179 457
Total (354) (74 190) (74 544)
comprehensive loss
for the period
Revaluation of 13 721 13 721
property, plant and equipment
Share options exercised 639
Dividends (2 222) (2 222)
Balance at 30 June 2011 23 785 (32 428) 117 051
5 253 5 253
Total comprehensive
income for the period
Purchase of own / (171)
treasury shares
Balance at 31 23 785 (27 175) 122 133
December 2011
Segment Report
Reviewed Reviewed Reviewed
31 Dec 2011 31 Dec 2011 31 Dec 2011
R`000 R`000 R`000
Infrastructure Supplies Division Environmental
Solutions Division
Flooring Glass and Environmental
Aluminium Solutions
Discontinued
Revenue
External sales 105 603 6 286 32 689
Intersegment sales 3 392
Total segment 105 603 6 286 36 081
revenue
Results
Segment result 10 385 (1 935) 1 907
before depreciation and
amortisation
Depreciation and (1 889) - (691)
amortisation
Segment 8 496 (1 935) 1 216
operating result
Discontinued operations
Income taxation expense
Profit from
ordinary activities
Other information
Capital expenditure 463 - 379
Statement of
financial position
Assets
Segment assets
excluding goodwill 129 239 - 24 724
Goodwill 4 499 - -
Consolidated 133 738 - 24 724
total assets
Liabilities
Segment liabilities 31 750 - 16 925
Consolidated 31 750 - 16 925
total liabilities
Reviewed Reviewed
31 Dec 2011 31 Dec 2011
R`000 R`000
Corporate and Total
eliminations
Revenue
External sales (1 237) 143 341
Intersegment sales (3 392)
Total Segment (4 629) 143 341
Revenue
Results
Segment result 1 950 12 307
before depreciation, amortisation
Depreciation and (618) (3 198)
amortisation
Segment 1 332 9 109
operating result
Discontinued (1 935)
operations
Income taxation expense (1 921)
Profit from
ordinary activities 5 253
Other information
Capital expenditure 78 920
Statement of Financial Positiont
Assets
Segment assets
excluding goodwill 9 202 163 165
Goodwill 30 427 34 926
Consolidated 39 629 198 091
total assets
Liabilities
Segment liabilities 27 283 75 958
Consolidated 27 283 75 958
total liabilities
Segment report
Reviewed Reviewed Reviewed
31 Dec 2010 31 Dec 2010 31 Dec 2010
R`000 R`000 R`000
Infrastructure Supplies Division Environmental
Solutions Division
Flooring Glass and Environmental
Aluminium Solutions
Discontinued
Revenue
External sales 96 180 20 785 26 530
Intersegment sales 3 236
Total Segment 96 180 20 785 29 766
Revenue
Results
Segment result 6 413 (1 244) 1 766
before depreciation,
amortisation
Depreciation and (1 626) (404) (737)
amortisation
Segment 4 787 (1 648) 1 029
operating result
Discontinued operations
Income taxation expense
(Loss) from
ordinary activities
Other information
512 446 127
Capital expenditure
Statement of
financial position
Assets
Segment assets
excluding goodwill 97 328 37 162 24 007
Goodwill 4 499 - -
Consolidated 101 827 37 162 24 007
total assets
Liabilities
Segment 27 633 19 429 16 905
liabilities
Consolidated 27 633 19 429 16 905
total liabilities
Reviewed Reviewed
31 Dec 2010 31 Dec 2010
R`000 R`000
Corporate and Total
eliminations
Revenue
External sales (15 751) 127 744
Intersegment sales (3 236)
Total segment (18 987) 127 744
revenue
Results
Segment result (31 094) (24 159)
before depreciation and amortisation
Depreciation and (436) (3 203)
amortisation
Segment (31 530) (27 362)
operating result
Discontinued (2 003)
operations
Income taxation expense (964)
(Loss) from (30 329)
ordinary activities
Other information
135 1 220
Capital expenditure
Statement of
financial position
Assets
Segment assets excluding
goodwill (10 406) 148 091
Goodwill 57 925 62 424
Consolidated 47 519 210 515
total assets
Liabilities
Segment liabilities (1 155) 62 812
Consolidated (1 155) 62 812
total liabilities
Commentary
INTRODUCTION
Accentuate is a group of world-class companies serving the construction and
infrastructure development markets in South Africa and essentially operates in
two segments: an Infrastructure Supplies Division comprising of flooring and an
Environmental Solutions Division which houses Safic, a specialist chemical
blending business. The company is a market leader in the supply of products and
services to both the public and private sectors in most floor covering materials
with majority of the revenue contribution coming from this segment. The chemical
blending business is positioning itself to become a significant supplier in the
public and private sectors, through the supply of chemical cleaning and related
products. Safic is also a manufacturer of screeding and products supplied to the
flooring business and in this way the two segments of Accentuate extract intra-
group synergies.
HIGHLIGHTS
The period under review has seen a dramatic turnaround within Accentuate Limited
resulting in an increase in HEPS from 3.45 cents per share to 6.86 cents per
share in December 2011. This as a result of effective strategic interventions
coupled with increased activity within the market niche within which Accentuate
operates. The reporting period also saw the following:
- The effective disposal of CGA Fenestrations (Pty) Limited and minimising
further losses associated with this division.
- A return to the core competencies that brought Accentuate to the market.
- Earnings per share increase to 5.01 cents from a loss of 29.78c for the
corresponding period.
- An exceptional performance by FloorworX.
- General increase in activity within the sectors within which Accentuate
operates.
- Increased market share within the resilient flooring market while maintaining
and even increasing margins.
THE OPERATING ENVIRONMENT
The interim reporting period ending 31 December 2011 are presented within the
context of a macro-economic environment that has yet to show any significant
activity within the industry.
As mentioned in the results commentary for the year ended 30 June 2011, the
construction and construction supply industries have seen a dramatic
deterioration in demand in the post "world cup" period. Once again there has
been no meaningful pick up in private project driven construction activity
during the period under review. Generally the view from a macro-economic
perspective remains largely negative. In addition to the relative weakness of
private construction spend, South Africa still experiences a situation where
national departments and provincial and local governments continue to hand back
unspent capital budgets to Treasury.
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