Wrap Text
Unaudited Interim Group Results for the Six Months Ended 31 August 2017
Spanjaard Limited
(Incorporated in the Republic of South Africa)
Registration number 1960/004393/06
Share code: SPA ISIN: ZAE000006938
("Company" or "Group")
UNAUDITED INTERIM GROUP RESULTS
FOR THE SIX MONTHS ENDED
31 AUGUST 2017
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months to Six months to
31 August 31 August
2017 2016
R'000 R'000
Revenue 56 181 60 703
Cost of sales (36 149) (36 267)
Gross profit 20 032 24 436
Other income 485 191
Operating expenses (23 570) (23 360)
Operating (loss)/profit (3 053) 1 267
Finance costs (432) (462)
(Loss)/profit before tax (3 485) 805
Taxation 684 (311)
(Loss)/profit for the period (2 801) 494
Other comprehensive income
Movement in foreign currency translation reserve 24 87
Total comprehensive (loss)/income for
the period (2 777) 581
(Loss)/profit per ordinary share
- basic and diluted (cents) (34,39) 6,07
Headline (loss)/profit per ordinary share
- basic and diluted (cents) (35,48) 6,07
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at As at
31 August 28 February
2017 2017
R'000 R'000
Assets
Non-current assets 32 550 33 157
Property, plant and equipment 30 753 31 098
Goodwill 437 437
Intangibles 1 360 1 622
Current assets 37 094 35 595
Inventories 18 926 17 051
Trade receivables and other receivables 17 854 16 419
Amount due by ultimate holding company 5 95
Current income tax receivable - 207
Cash and cash equivalents 309 1 823
Total assets 69 644 68 752
Equity and liabilities
Total shareholders' equity 42 660 45 485
Ordinary shares and premium 6 871 6 871
Reserves 35 789 38 614
Liabilities
Non-current liabilities 5 111 5 478
Borrowings 714 386
Deferred tax liabilities 4 397 5 092
Current liabilities 21 873 17 789
Trade and other payables 13 001 11 831
Borrowings 525 1 130
Shareholders for dividends 8 8
Bank overdraft 8 339 4 820
Total equity and liabilities 69 644 68 752
Net asset value per share 523,9 558,6
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six months to Six months to
31 August 31 August
2017 2016
R'000 R'000
Cash flows from operating activities (4 137) 3,482
Cash flows from investing activities (697) (502)
Cash flows from financing activities (188) (4 365)
Net decrease in cash and cash equivalents (5 022) (1 385)
Cash and cash equivalents at beginning of period (2 997) (2 909)
Effect of exchange rate movement on cash balances (11) (26)
Cash and cash equivalents at end of period (8 030) (4 320)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months to Six months to
31 August 31 August
2017 2016
R'000 R'000
Ordinary shares 407 407
Share premium 6 464 6 464
Share-based payment compensation reserve 1 906 1 906
Foreign currency translation reserve (7) 44
Opening balance 17 131
Movement for the period (24) (87)
Revaluation reserve 8 193 6 315
Opening balance 8 536 6 457
Movement for the period (343) (142)
Retained earnings 25 697 28 136
Opening balance 28 155 27 500
Total (loss)/profit for the period (2 801) 494
Movement in reserves 343 142
Total shareholders' equity 42 660 43 272
SUPPLEMENTARY INFORMATION
Six months to Six months to
31 August 31 August
2017 2016
R'000 R'000
Capital expenditure 967 331
DIVIDENDS
Dividend declared per ordinary share (cents)
- interim - -
OPERATING SEGMENTS
Six months to Six months to
31 August 31 August
2017 2016
R'000 R'000
Segment revenue
Special lubricants and allied chemicals 56 567 61 388
External customers 9 356 14 635
Local customers 47 211 46 753
Anti-friction powders 964 1 016
External customers 435 757
Local customers 529 259
Other 1 200 1 200
External customers 1 200 1 200
Reconciling items (2 550) (2 901)
External customers (1 308) (1 651)
Local customers (1 242) (1 250)
56 181 60 703
Six months to Six months to
31 August 31 August
2017 2016
R'000 R'000
Segment result
Special lubricants and allied chemicals (3 125) 1 487
Anti-friction powders (370) (248)
Other 563 388
Reconciling items (121) (360)
(3 053) 1 267
As at As at
31 August 28 February
2017 2017
R'000 R'000
Segment assets
Special lubricants and allied chemicals 57 806 56 475
Anti-friction powders 11 136 11 256
Other 19 945 19 965
Reconciling items (19 243) (18 944)
69 644 68 752
Segment liabilities
Special lubricants and allied chemicals 30 115 26 205
Anti-friction powders 2 806 2 543
Other 11 882 12 132
Reconciling items (17 819) (17 613)
26 984 23 267
RECONCILIATION OF HEADLINE EARNINGS
Six months to Six months to
31 August 31 August
2017 2016
R'000 R'000
(Loss)/profit attributable to shareholders (2 801) 494
Profit on disposal of property, plant and equipment (123) -
Income tax effect on disposal 36 -
Headline (loss)/earnings (2 888) 494
Weighted average number of ordinary
shares in issue ('000) 8 143 8 143
Headline (loss)/earnings per ordinary share
- basic and diluted (cents) (35,48) 6,07
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The condensed consolidated interim financial statements for the six months ended
31 August 2017 have been prepared in accordance with International Financial Reporting
Standards (IFRS), IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee and the Financial Pronouncements as issued
by the Financial Reporting Standards Council, as well as the requirements of the South African
Companies Act and the JSE Listings Requirements.
The condensed consolidated interim financial statements do not include all the disclosures
required for a full set of financial statements prepared in accordance with International
Accounting Standards (IFRS) as issued by the International Accounting Standards Board.
The condensed consolidated interim financial statements appearing in this announcement are
the responsibility of the directors and the directors take full responsibility for the preparation
thereof. Ian Saunders CA(SA), Financial Director, is responsible for this set of condensed
consolidated interim financial statements.
The accounting policies applied in the preparation of these condensed consolidated interim
financial statements are in terms of IFRS and are consistent with those applied in the
consolidated annual financial statements for the year ended 28 February 2017. The condensed
consolidated interim financial statements have not been reviewed or audited by the Group's
auditors.
COMMENTARY
POINTS OF INTEREST
- Group revenue is down by 7,4%
- Operating loss of R3,05 million
- Net asset value decreased from 558,6 to 523,9 cents per share
STATEMENT BY THE ACTING CEO
Lower export sales as well as lower than expected sales in our food division have contributed
enormously to a disappointing first half of the financial year. While our two main sales divisions
Consumer/Automotive and Industrial/Marine experienced growth in turnover of 12,9% and
10,6% respectively compared to the comparative period in the prior year, our large distributors
in the Far East being overstocked as well as structural changes at our largest food distributor
negatively impacted our revenue.
The restructuring of our pricing model in March 2017 was successful in that it resulted in volume
growth of 18,1% (Consumer/Automotive Division) and 16,1% (Industrial/Marine Division).
We have been proactive in our export division by appointing our own international sales
representative in Hong Kong from the beginning of August 2017. We expect to see the fruits
of this investment during the next financial year. In our food division, we are diversifying our
customer base to minimise the risk of large customers not performing. We are also introducing
new products to complement the existing range and grow the market.
We have an improved pipeline of export orders for the second half of the year and our food
product sales have normalised after a challenging first quarter. To this end, we are working
extremely hard to make sure that we have a substantially better 2nd half of the year and look
forward to reporting such in the future.
We are investing in new aerosol equipment which should arrive towards the end of the current
financial year. This will assist in production improvements as well as a reduction in down-time
and maintenance expenditure. It is vital that we keep investing in equipment to replace our
aging infrastructure.
It is with great sadness we report that our founder and CEO, Mr Robert Spanjaard fell critically ill at the start
of the 2nd quarter, and regretfully passed away on 25 September 2017. On behalf of the board,
we send our sincerest condolences to his family, friends and colleagues that were fortunate
enough to share his life with him.
The Company is in the capable hands of the existing management team and we are all looking
forward to preserving the founder's legacy while at the same time implementing new ideas and
modernising the way in which we do business.
INTERIM DIVIDEND
The Board has resolved that no interim dividend will be declared for the review period (2016: Rnil).
By order of the board
Prof DP van der Nest K Welgemoed I Saunders
Independent Non-executive Chairman Acting CEO Financial Director
19 October 2017
COMPANY INFORMATION
Directors
Prof DP van der Nest* (Independent Non-executive Chairman), K Welgemoed CA(SA) (Acting
Chief Executive Officer), I Saunders CA(SA) (Financial Director), GF Cort, CKT Palmer MSc MBA,
TN Stewart, S Hari*, BL Montgomery* *Independent Non-Executive
Registered office
748-750 Fifth Street, Wynberg, Sandton, 2090
Company Secretary
Levitt Kirson Business Services Proprietary Limited, 4th Floor, Aloe Grove, Houghton Estate
Office Park, 2 Osborn Road, Houghton, 2198
Transfer Secretaries
Computershare Investor Services Proprietary Limited, Rosebank Towers, 15 Biermann Avenue,
Rosebank, Johannesburg, 2196
Sponsors
Arbor Capital Sponsors Proprietary Limited, 20 Stirrup Lane, Woodmead Office Park, Corner
Woodmead Drive and Van Reenens Avenue, Woodmead, 2191
E-mail: info@spanjaard.biz
Website: www.spanjaard.biz
Date: 19/10/2017 05:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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