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RAUBEX GROUP LIMITED – Unaudited interim results for the six months ended 31 August 2016

SENS announcement for JSE listed company: RBX
                        

RBX 201611070002A
Unaudited interim results for the six months ended 31 August 2016

Raubex Group Limited
(Incorporated in the Republic of South Africa)
Registration number 2006/023666/06
Share Code: RBX
ISIN Code: ZAE000093183
(‘Raubex’ or the ‘Group’)

Unaudited interim results for the six months ended 31 August 2016

Highlights
Revenue up 22,5% to R4,76 billion (H1 2016: R3,89 billion)
Operating profit up 19,9% to R394,7 million (H1 2016: R329,3 million)
HEPS up 22,1% to 130,6 cents per share (H1 2016: 107,0 cents per share)
Cash flow from operations up 44,4% to R541,4 million (H1 2016: R375,0 million)
Capex spend of R234,9 million (H1 2016: R278,5 million)
Order book of R8,2 billion (H1 2016: R8,2 billion)
Interim dividend of 45 cents per share declared

Rudolf Fourie, CEO of Raubex Group, said:
‘The Group has delivered a solid all round performance for the first half of the year
supported by optimum conditions in terms of bitumen supply, weather and order book
quality.

The Materials Division reported good results contributing nearly half of the Group’s
operating profit for the period. The Road Construction Division continued to execute well
on its current contracts. However, very tough competitive conditions persist and
management’s focus is now on order book replacement. The Infrastructure Division has
grown its order book and the renewable energy sector offers encouraging prospects for
further work.

From an industry perspective, we are pleased to have reached the settlement agreement
with the Government which paves the way for a healthy working relationship and affirms
our commitment to the transformation of the construction sector.’

Commentary
Financial overview
Revenue increased 22,5% to R4,76 billion and operating profit increased 19,9% to
R394,7 million from the corresponding prior period. These results were supported by a
consistent supply of bitumen that enabled a strong recovery by the Road Surfacing and
Rehabilitation Division, which includes the Group’s asphalt operations. The Road
Construction and Earthworks Division continued to execute on its quality order book,
while the Infrastructure Division saw increased activity in construction works related to
solar energy projects and in the affordable residential housing market. Operating
conditions continued to favour the Materials Division’s overall performance although a
depreciating foreign currency in Mozambique, and a reduction in iron-ore material
handling activities in the Northern Cape, resulted in a slightly softer margin.

Profit before tax increased 23,2% to R373,6 million (H1 2016: R303,2 million) with the
effective tax rate increasing slightly to 29,5% (H1 2016: 29,2%).

Earnings per share increased 22,9% to 132,7 cents (H1 2016: 108,0 cents) with headline
earnings per share increasing 22,1% to 130,6 cents (H1 2016: 107,0 cents).

Group operating margin decreased slightly to 8,3% (H1 2016: 8,5%).

Net finance costs decreased to R22,2 million (H1 2016: R26,0 million) due mainly to higher
cash balances during the period and slightly lower interest-bearing debt. Total non-cash
finance costs amounted to R1,6 million for the period.

Cash generated from operations increased 44,4% to R541,4 million (H1 2016:
R375,0 million) before finance charges and taxation.

Trade and other receivables increased by 21,1% to R1,82 billion (H1 2016: R1,51 billion).
This was mainly due to the increase in revenue as a result of the consistent bitumen supply
as well as the increased activities in the Infrastructure Division. Payment delays from the
Roads Development Agency in Zambia continue to be experienced. No payment was
received during the period and an amount of R160,2 million was outstanding at 31 August
2016 and recorded in accounts receivable.

Inventories increased 5,9% to R585,4 million (H1 2016: R552,7 million).

Construction contracts in progress decreased by 18,8% to R343,9 million (H1 2016:
R423,4 million) mainly due to contract milestone achievements on the solar projects, a
higher percentage of certified revenue and collection of retentions.

Trade and other payables increased 25,7% to R1,56 billion (H1 2016: R1,24 billion), mainly
due to the increase in cost of sales as a result of the consistent bitumen supply as well as
the increased activities of the Infrastructure Division.

Borrowings decreased 3,5% to R1,04 billion (H1 2016: R1,07 billion).

Capital expenditure on property, plant and equipment decreased 15,7% to R234,9 million
(H1 2016: R278,5 million) and is mainly related to the replacement of assets to maintain
current operations.

The Group’s net cash outflow for the period was R60,3 million with total cash and cash
equivalents at the end of the period of R896,0 million. The Group’s healthy cash balance
and improving net debt position allowed for a specific repurchase of 7,5 million Raubex
shares on 20 July 2016 for a total consideration of R120 million. These shares were
subsequently cancelled and the weighted average number of shares in issue during the
period adjusted accordingly.

Operational review
Materials Division
The Materials Division, which includes the Raumix operations, comprises three main
disciplines including commercial quarries, contract crushing and materials handling and
processing for the mining industry.

The division reported good results for the period, contributing 48,4% towards the Group’s
total operating profit. Favourable operating conditions were experienced in the commercial
quarry operations as well as the material handling and processing operations. Contract
crushing operations in Mozambique were completed during the period and the depreciation
of the Mozambique Metical resulted in a R10,3 million foreign exchange loss being realised.
While conditions remained healthy where the division is exposed to the copper, diamond
and gold commodities, reduced iron-ore handling operations in the Northern Cape
contributed to the softer margin being reported.

Revenue for the division increased 7,2% to R1,28 billion (H1 2016: R1,20 billion) while
operating profit decreased by 13,2% to R191,2 million (H1 2016: R220,3 million).

The divisional operating profit margin decreased to 14,9% (H1 2016: 18,4%).

The division incurred capital expenditure of R136,7 million during the period
(H1 2016: R171,6 million).

The division has a secured order book of R1,75 billion (H1 2016: R1,72 billion).

Construction Divisions
Road surfacing and rehabilitation
This division specialises in the manufacturing and laying of asphalt, chip and spray,
surface dressing, enrichments and slurry seals and includes the operations of Tosas, a
company specialising in the manufacture and distribution of value added bituminous
products.

The division reported good results supported by a stable order book and healthy road
maintenance spend at both National and Local Government level. The severe bitumen
supply shortage that affected the prior period as a result of unplanned refinery shut
downs was resolved and a consistent supply of bitumen during the current period led to
a more normalised level of work and strong recovery in the results.

Revenue for the division increased 41,7% to R1,91 billion (H1 2016: R1,35 billion) and
operating profit increased 189,0% to R116,3 million (H1 2016: R40,2 million).

The divisional operating profit margin increased to 6,1% (H1 2016: 3,0%).

The division incurred capital expenditure of R43,2 million during the period
(H1 2016: R55,8 million).

The division has a secured order book of R3,04 billion (H1 2016: R2,83 billion).

Road construction and earthworks
This division includes the road and civil infrastructure construction operations focused on
the key areas of new road construction and heavy road rehabilitation.

The division has continued to perform well under very tough competitive conditions. The
results for the period were supported by a quality order book and the efficient execution
of work, with no problem contracts being reported. Work on the Zambia Link 8000
contracts has been suspended pending the payment of overdue accounts receivable and
these construction teams have been redeployed on South African earthworks contracts.

Revenue for the division increased 1,8% to R792,4 million (H1 2016: R778,5 million),
while operating profit decreased 7,7% to R52,8 million (H1 2016: R57,2 million).

The divisional operating profit margin decreased to 6,7% (H1 2016: 7,3%).

The division incurred capital expenditure of R35,7 million during the period
(H1 2016: R29,4 million).

The division has a secured order book of R2,0 billion (H1 2016: R2,74 billion), with
R865 million relating to the Link 8000 contracts in Zambia.

Raubex Infrastructure
The Infrastructure Division specialises in disciplines outside of the road construction
sector, including energy (with a specific focus on renewable energy), rail,
telecommunications, pipeline construction and housing infrastructure projects.

The division reported good results supported by increased construction works related to
solar energy projects as well as in the affordable residential housing market.

Revenue for the division increased 37,9% to R773,5 million (H1 2016: R561,0 million) and
operating profit increased 199,4% to R34,5 million (H1 2016: R11,5 million).

The divisional operating profit margin increased to 4,5% (H1 2016: 2,1%).

The division incurred capital expenditure of R19,3 million during the period
(H1 2016: R21,7 million).

The division has a secured order book of R1,40 billion (H1 2016: R945,9 million).

International
Outside of South Africa operations in Namibia continued to perform well with a balanced
work flow from both the Materials Division and Construction Division.

As indicated above, work on the Link 8000 contracts in Zambia was suspended due to
non-payment from the Zambian Roads Authority. The Group did not recognise any profit
on these contracts during the period and a solution that will allow for works to resume is
being sought. The Infrastructure Division was active in Zambia on a fibre optic cable
project and the building of concrete structures for private clients.

In Botswana, commercial quarry operations at Belabela Quarries are ongoing and the
operations of National Asphalt and Tosas support the Group’s presence in the country.

Contract crushing operations in Mozambique were completed during the period in the
midst of a depreciating Mozambique Metical which affected the profitability of this work.

International revenue increased 4,8% to R643,7 million (H1 2016: R614,3 million) and
operating profit increased by 19,5% to R105,7 million (H1 2016: R88,4 million).

Operating profit margins increased to 16,4% (H1 2016: 14,4%).

The international order book stands at R2,15 billion (H1 2016: R2,31 billion), and is
included in the Materials and Construction Division’s order book.

Prospects
The Group has a secured order book of R8,19 billion (H1 2016: R8,24 billion) with 26,2%
of the order book representing contracts outside of South Africa in the rest of Africa. The
Zambia Link 8000 contracts account for R865 million of the order book and given the
current funding impasse it is unlikely that any further work will commence in the current
financial year. Negotiations with the client regarding the future of these projects, and the
settlement of outstanding accounts receivable, are ongoing.

The Group’s road construction operations have a quality short-term order book and are
executing well with no problem contracts. The Road Surfacing and Rehabilitation Division
has been successful in securing a number of resurfacing contracts during the period to
replace their order book. Weather and bitumen supply permitting, they will be working
near full capacity in the summer months ahead.

SANRAL has continued to bring a healthy volume of work out for tender but conditions in
the road construction sector remain competitive. The replacement of the Road
Construction and Earthworks order book and the available margin are key to securing this
division’s prospects over the medium term.

In the Materials Division, favourable operating conditions are expected to remain for the
commercial quarry operations and the Group will continue to look for acquisitions to
expand its geographical footprint. The acquisition of OMV Kimberley quarry has bedded
down well. The material handling and processing operations, where the major exposures
are to copper, diamond and gold mining operations, are expected to remain stable given
current commodity price levels. In the contract crushing market, conditions remain
competitive in line with the construction industry. Work needs to be secured in the period
ahead to replace the completed Mozambique crushing contract.

The Infrastructure Division order book is growing and the renewable energy sector offers
encouraging prospects for further work. The division is also gaining momentum in the
affordable housing market with the roll out of Woodwind Estate in Midrand and
opportunities to participate in the Lufhereng Integrated Urban Development Project to the
west of Soweto.

The solid first half results, diversified revenue streams and quality short-term order book
position the Group well for the period ahead. The settlement agreement reached with the
Government of the Republic of South Africa affirms the Group’s commitment to the
transformation of the construction industry and sets the stage for a healthy working
relationship with Government as they roll out their plans for the much needed infrastructure
development in South Africa.

Dividend declaration
The directors have declared a gross interim cash dividend from income reserves of
45 cents per share on 7 November 2016 for the six-month period ended
31 August 2016. The salient dates for the payment of the dividend are as follows:

Last day to trade cum dividend Tuesday, 29 November 2016
Commence trading ex dividend Wednesday, 30 November 2016
Record date Friday, 2 December 2016
Payment date Monday, 5 December 2016

No share certificates may be dematerialised or rematerialised between Wednesday,
30 November 2016 and Friday, 2 December 2016, both dates inclusive.

In terms of Dividends Tax (‘DT’), the following additional information is disclosed:
– The local DT rate is 15%.
– The number of ordinary shares in issue at the date of this declaration is 181 750 036.
– The dividend to utilise for determining the DT due is 45 cents per share.
– The DT amounts to 6,75 cents per share.
– The net local dividend amount is 38,25 cents per share for shareholders liable to pay the DT.
– Raubex Group Limited’s income tax reference number is 9370/905/151.

In terms of the DT legislation, the DT amount due will be withheld and paid over to the
South African Revenue Service by a nominee company, stockbroker or Central Securities
Depository Participant (collectively ‘Regulated Intermediary’) on behalf of shareholders.
All shareholders should declare their status to their Regulated Intermediary, as they may
qualify for a reduced DT rate or exemption.

Group income statement
Unaudited Unaudited Audited
six months six months 12 months
31 August 31 August 29 February
2016 2015 2016
R’000 R’000 R’000
Revenue 4 763 620 3 887 747 7 925 754
Cost of sales (4 128 161) (3 338 640) (6 800 882)
Gross profit 635 459 549 107 1 124 872
Other income 16 421 6 502 27 966
Other gains/(losses) – net (3 078) 3 197 12 695
Administrative expenses (254 076) (229 555) (454 970)
Operating profit 394 726 329 251 710 563
Finance income 27 486 17 670 41 872
Finance costs (49 649) (43 705) (91 116)
Share of profit of investments
accounted for using the equity method 1 002 – 324
Profit before income tax 373 565 303 216 661 643
Income tax expense (110 230) (88 559) (192 240)
Profit for the period 263 335 214 657 469 403
Profit for the period attributable to:
Owners of the parent 245 510 204 322 445 308
Non-controlling interest 17 825 10 335 24 095
Basic earnings per share (cents) 132,7 108,0 236,9
Diluted earnings per share (cents) 131,9 107,1 234,3

Group statement of comprehensive income
Unaudited Unaudited Audited
six months six months 12 months
31 August 31 August 29 February
2016 2015 2016
R’000 R’000 R’000
Profit for the period 263 335 214 657 469 403
Other comprehensive income
for the period, net of tax
Currency translation differences 1 535 (5 639) (2 069)
Actuarial gain/(loss) on post-
employment benefit obligations – – 149
Total comprehensive income
for the period 264 870 209 018 467 483
Comprehensive income
for the period attributable to:
Owners of the parent 247 045 198 683 443 388
Non-controlling interest 17 825 10 335 24 095
Total comprehensive income
for the period 264 870 209 018 467 483

Calculation of diluted earnings per share
Unaudited Unaudited Audited
six months six months 12 months
31 August 31 August 29 February
2016 2015 2016
R’000 R’000 R’000
Profit attributable to owners
of the parent entity 245 510 204 322 445 308
Weighted average number of
ordinary shares in issue (‘000) 184 948 189 250 187 961
Adjustments for:
Shares deemed issued for no
consideration (share options) (‘000) 1 150 1 607 2 085
Weighted average number of
ordinary shares for diluted
earnings per share (‘000) 186 098 190 857 190 046
Diluted earnings per share (cents) 131,9 107,1 234,3

Calculation of headline earnings per share
Unaudited Unaudited Audited
six months six months 12 months
31 August 31 August 29 February
2016 2015 2016
R’000 R’000 R’000
Profit attributable to owners
of the parent entity 245 510 204 322 445 308
Adjustments for:
Profit on sale of property, plant
and equipment (5 544) (2 580) (6 527)
Total tax effects of adjustments 1 552 723 1 827
Basic headline earnings 241 518 202 465 440 608
Weighted average number of shares (‘000) 184 948 189 250 187 961
Headline earnings per share (cents) 130,6 107,0 234,4
Diluted headline earnings per share (cents) 129,8 106,1 231,8

Group statement of financial position
Unaudited Unaudited Audited
six months six months 12 months
31 August 31 August 29 February
2016 2015 2016
R’000 R’000 R’000
Assets
Non-current assets
Property, plant and equipment 2 385 347 2 271 755 2 335 748
Intangible assets 845 403 829 814 829 283
Investment in associates and joint ventures 49 314 42 907 50 682
Deferred income tax assets 46 017 49 993 42 478
Non-current inventories 77 434 86 355 81 954
Non-current trade and other receivables 106 091 122 178 114 438
Total non-current assets 3 509 606 3 403 002 3 454 583
Current assets
Inventories 507 954 466 372 482 162
Construction contracts in progress
and retentions 343 919 423 362 369 184
Trade and other receivables 1 717 542 1 384 204 1 423 371
Current income tax receivable 29 669 33 159 27 593
Cash and cash equivalents 895 959 789 484 969 736
Total current assets 3 495 043 3 096 581 3 272 046
Total assets 7 004 649 6 499 583 6 726 629
Equity
Share capital 1 817 1 892 1 892
Share premium 2 059 688 2 179 613 2 179 613
Treasury shares (23 664) – (46 599)
Other reserves (1 173 528) (1 162 390) (1 148 951)
Retained earnings 2 892 720 2 544 038 2 718 123
Equity attributable to owners of the parent 3 757 033 3 563 153 3 704 078
Non-controlling interest 139 761 124 118 128 764
Total equity 3 896 794 3 687 271 3 832 842
Liabilities
Non-current liabilities
Borrowings 624 629 696 880 682 027
Provisions for liabilities and charges 74 383 60 384 65 741
Deferred income tax liabilities 301 138 308 233 310 041
Other financial liabilities 60 972 79 282 59 385
Total non-current liabilities 1 061 122 1 144 779 1 117 194
Current liabilities
Trade and other payables 1 563 019 1 242 967 1 323 782
Borrowings 411 453 377 194 411 411
Current income tax liabilities 49 327 47 372 18 466
Other financial liabilities 22 934 – 22 934
Total current liabilities 2 046 733 1 667 533 1 776 593
Total liabilities 3 107 855 2 812 312 2 893 787
Total equity and liabilities 7 004 649 6 499 583 6 726 629

Group statement of cash flows
Unaudited Unaudited Audited
six months six months 12 months
31 August 31 August 29 February
2016 2015 2016
R’000 R’000 R’000
Cash flows from operating activities
Cash generated from operations 541 410 375 002 1 050 461
Finance income 27 486 17 670 41 872
Finance costs (48 062) (41 685) (84 522)
Dividend received – 2 699 –
Income tax paid (98 867) (72 674) (190 449)
Net cash generated from
operating activities 421 967 281 012 817 362
Cash flows from investing activities
Purchases of property, plant
and equipment (234 904) (278 491) (549 535)
Proceeds from sale of property,
plant and equipment 45 205 26 586 48 825
Acquisition of subsidiaries (18 233) (46 638) (47 049)
Loan repayment from/(granted to)
associates and joint ventures 2 370 (32 200) (39 650)
Net cash used in investing activities (205 562) (330 743) (587 409)
Cash flows from financing activities
Proceeds from borrowings 190 488 247 872 502 667
Repayment of borrowings (261 496) (274 295) (509 725)
Proceeds from shares issued – 19 19
Dividends paid to owners
of the parent (78 913) (68 130) (135 623)
Dividends paid to non-controlling
interests (6 828) (3 210) (6 281)
Disposal of interest in a subsidiary – 200 200
Acquisition of interest in a subsidiary – – (5 600)
Share buy-back transaction (120 000) – –
Issue/(acquisition) of treasury shares 13 – (46 599)
Net cash used in financing activities (276 736) (97 544) (200 942)
Net (decrease)/increase in cash
and cash equivalents (60 331) (147 275) 29 011
Cash and cash equivalents at
the beginning of the period 969 736 937 275 937 275
Effects of exchange rates on cash
and cash equivalents (13 446) (516) 3 450
Cash and cash equivalents at the
end of the period 895 959 789 484 969 736

Group statement of changes in equity
Share Share Treasury Other
capital premium shares reserves
R’000 R’000 R’000 R’000
Balance at 1 March 2015 1 873 2 179 613 – (1 140 762)
Shares issued in terms of
equity-settled share option scheme 19 – – (25 995)
Share option reserve – – – 10 006
Non-controlling interest arising
on business combination – – – –
Disposal of interest to
non-controlling interest – – – –
Total comprehensive income
for the period – – – (5 639)
Dividends paid – – – –
Balance at 31 August 2015 1 892 2 179 613 – (1 162 390)
Share option reserve – – – 9 869
Acquisition of non-controlling interest – – – –
Acquisition of treasury shares
during the period – – (46 599) –
Total comprehensive income
for the period – – – 3 570
Dividends paid – – – –
Balance at 29 February 2016 1 892 2 179 613 (46 599) (1 148 951)
Share option reserve – – – 4 810
Share buy-back transaction (75) (119 925) – –
Treasury shares issued in terms of
equity-settled share option scheme – – 22 935 –
Share option reserve utilised
during the period – – – (30 922)
Total comprehensive income
for the period – – – 1 535
Dividends paid – – – –
Balance at 31 August 2016 1 817 2 059 688 (23 664) (1 173 528)

Total
attributable
to owners of Non-
Retained the parent controlling Total
earnings company interest equity
R’000 R’000 R’000 R’000
Balance at 1 March 2015 2 381 905 3 422 629 110 788 3 533 417
Shares issued in terms of
equity-settled share option
scheme 25 995 19 – 19
Share option reserve – 10 006 – 10 006
Non-controlling interest arising
on business combination – – 5 951 5 951
Disposal of interest to
non-controlling interest (54) (54) 254 200
Total comprehensive income
for the period 204 322 198 683 10 335 209 018
Dividends paid (68 130) (68 130) (3 210) (71 340)
Balance at 31 August 2015 2 544 038 3 563 153 124 118 3 687 271
Share option reserve – 9 869 – 9 869
Acquisition of non-controlling
interest 443 443 (6 043) (5 600)
Acquisition of treasury shares
during the period – (46 599) – (46 599)
Total comprehensive income
for the period 241 135 244 705 13 760 258 465
Dividends paid (67 493) (67 493) (3 071) (70 564)
Balance at 29 February 2016 2 718 123 3 704 078 128 764 3 832 842
Share option reserve – 4 810 – 4 810
Share buy-back transaction – (120 000) – (120 000)
Treasury shares issued in terms
of equity-settled share option
scheme (22 922) 13 – 13
Share option reserve utilised
during the period 30 922 – – –
Total comprehensive income
for the period 245 510 247 045 17 825 264 870
Dividends paid (78 913) (78 913) (6 828) (85 741)
Balance at 31 August 2016 2 892 720 3 757 033 139 761 3 896 794

Group segmental analysis
Road
Road construction
surfacing and and
Materials rehabilitation earthworks
R’000 R’000 R’000
Operating segments
31 August 2016
Revenue 1 284 154 1 913 560 792 441
Operating profit 191 163 116 267 52 776
Margin 14,9% 6,1% 6,7%
31 August 2015
Revenue 1 197 363 1 350 888 778 507
Operating profit 220 325 40 224 57 174
Margin 18,4% 3,0% 7,3%
29 February 2016
Revenue 2 332 083 3 048 219 1 400 823
Operating profit 399 823 172 682 102 989
Margin 17,1% 5,7% 7,4%

Infrastructure Consolidated
R’000 R’000
Operating segments
31 August 2016
Revenue 773 465 4 763 620
Operating profit 34 520 394 726
Margin 4,5% 8,3%
31 August 2015
Revenue 560 989 3 887 747
Operating profit 11 528 329 251
Margin 2,1% 8,5%
29 February 2016
Revenue 1 144 629 7 925 754
Operating profit 35 069 710 563
Margin 3,1% 9,0%

Local International Consolidated
R’000 R’000 R’000
Geographical information
31 August 2016
Revenue 4 119 930 643 690 4 763 620
Operating profit 289 028 105 698 394 726
Margin 7,0% 16,4% 8,3%
31 August 2015
Revenue 3 273 497 614 250 3 887 747
Operating profit 240 825 88 426 329 251
Margin 7,4% 14,4% 8,5%
29 February 2016
Revenue 6 725 552 1 200 202 7 925 754
Operating profit 492 253 218 310 710 563
Margin 7,3% 18,2% 9,0%

Employee benefit expense
Unaudited Unaudited Audited
six months six months 12 months
31 August 31 August 29 February
2016 2015 2016
R’000 R’000 R’000
Employee benefit expense in the
income statement consists of:
Salaries, wages and contributions 1 077 169 909 433 1 911 428
Share options granted to employees 4 810 10 006 19 875
Total employee benefit expense 1 081 979 919 439 1 931 303

Capital expenditure and depreciation
Unaudited Unaudited Audited
six months six months 12 months
31 August 31 August 29 February
2016 2015 2016
R’000 R’000 R’000
Capital expenditure for the period 234 904 278 491 549 535
Depreciation for the period 180 101 183 313 371 306
Amortisation of intangible assets
for the period 335 140 671

Notes

Basis of preparation
These condensed consolidated interim financial statements have been prepared under
the supervision of the Financial Director, JF Gibson CA(SA), 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 Financial
Pronouncements as issued by the Financial Reporting Standards Council and the
requirements of the South African Companies Act 71 of 2008 and the JSE Listings
Requirements. The principal accounting policies used in the preparation of the unaudited
results for the period ended 31 August 2016 are consistent with those applied for the year
ended 29 February 2016 and for the unaudited results for the six months ended 31 August
2015 in terms of IFRS.

Share capital and premium
Ordinary
Number share Share
of shares capital premium Total
in issue R’000 R’000 R’000
At 1 March 2015 187 330 165 1 873 2 179 613 2 181 486
Shares issued in terms
of equity-settled share
option scheme 1 919 871 19 – 19
At 29 February 2016 189 250 036 1 892 2 179 613 2 181 505
Share buy-back transaction (7 500 000) (75) (119 925) (120 000)
At 31 August 2016 181 750 036 1 817 2 059 688 2 061 505

On 4 August 2016, the Company cancelled and delisted 7 500 000 ordinary shares. These
shares were acquired as part of a specific repurchase from an associate of a non-executive
director of the Company in terms of the authority to repurchase the shares approved by the
shareholders of the company at the general meeting held on 20 July 2016.

Following the cancellation, the issued share capital of the Company comprises 181 750 036
ordinary shares of 1 cent each.

Treasury shares
During the period 1 320 328 treasury shares were utilised to settle share options that
vested in terms of the employee share option scheme for an amount of R22,9 million. The
related weighted average share price at the time of exercise was R17,37. The weighted
average share price of the remaining treasury shares held is R17,37.

Analysis of movement in treasury shares
Number Value
of shares R’000
At 1 March 2015 – –
Acquisition of treasury shares by Raubex (Pty) Ltd 2 682 662 46 599
At 29 February 2016 2 682 662 46 599
Treasury shares issued in terms of equity-settled
share option scheme (1 320 328) (22 935)
Total treasury shares held by Raubex (Pty) Ltd at
31 August 2016 1 362 334 23 664

Business combinations
OMV Kimberley (Pty) Ltd and OMV Kimberley Mining (Pty) Ltd (‘OMV Kimberley’)
On 9 March 2016, the Group effectively acquired 100% of OMV Kimberley for a purchase
price of R37,5 million to be settled in cash. OMV Kimberley is a commercial quarry
operating in the Northern Cape province supplying aggregates to the construction industry.
The revenue included in the consolidated income statement since 9 March 2016
contributed by OMV Kimberley was R18,6 million with a net profit contribution of
R2,1 million over the same period.

Details of the net assets acquired, purchase consideration and goodwill are set out below:

R’000
Consideration
Cash 27 500
Deferred consideration* 10 000
Total consideration 37 500
Property, plant and equipment 35 347
Intangible asset – mining right 10 000
Inventories 1 387
Trade receivables 2 452
Current income tax receivable 1 944
Cash and cash equivalents 9 267
Other financial assets 1 607
Deferred tax asset 2 824
Borrowings (13 654)
Deferred tax liability (10 226)
Trade and other payables (3 556)
Rehabilitation provision (6 346)
Total identified net assets 31 046
Goodwill attributable to owners of the parent 6 454
Total 37 500
Purchased consideration settled in cash 27 500
Less: Cash and cash equivalents in the business combination acquired (9 267)
Cash outflow on acquisition for cash flow statement 18 233
* The deferred consideration is an amount of R10 million payable to the previous
shareholders of OMV Kimberley once transfer of the mining right into the name of the
Group has been successfully completed. The deferred consideration is included in the
cost of the business combination at the fair value date of the acquisition.

Events after the reporting period
Settlement agreement concluded with the South African Government
Shareholders are referred to the announcement released on SENS on 11 October 2016 in
which shareholders were advised that Raubex had entered into a settlement agreement
(the ‘Settlement Agreement’) with the Government of the Republic of South Africa (the
‘Government’), together with other construction companies (collectively, the ‘Construction
Companies’), in an effort to address the Construction Companies’ exposure to potential
claims for damages from certain identified public entities arising primarily from the fast
track settlement process launched by the South African Competition Authorities in
February 2011, as well as to significantly advance the transformation of the South African
construction sector.

The Settlement Agreement inter alia stipulates that:
Over the next 12 years, the Construction Companies will be required to make a collective
annual payment into a fund (‘Fund’). In the case of Raubex, the annual payment amounts
to R15 million. The Fund will be constituted as a trust (‘Trust’). The first of such annual
payments by Raubex of R15 million will be structured so that 25% thereof is payable within
five (5) business days following the effective date of the Settlement Agreement and the
remainder shall be paid no later than 90 days following the effective date. Thereafter, each
subsequent instalment will be payable annually on 1 July.

Any claims or potential claims for damages that certain identified public entities have
made, or may be entitled to make, against the Construction Companies, in relation to
projects primarily arising from the fast track settlement process, will be settled. With
respect to Raubex this includes the claim received on 19 April 2016 from the South African
National Roads Agency SOC Limited (‘SANRAL’).

The Construction Companies have also individually undertaken to either:
(i) launch development initiatives with the aim of identifying, developing and mentoring up
to three emerging contractors (‘Emerging Contractors’), to ensure that the Emerging
Contractors will have the necessary skills and quantity of work required to generate a
cumulative combined annual turnover equal to at least 25% of the annual South African
civil engineering and general building construction works turnover of the relevant
Construction Company within seven years. Aligned to this obligation are fixed interim
period transformation targets on each Construction Company as well as penalties
calculated in accordance with a formula, for a failure to meet such targets; or
(ii) dispose of not less than a 40% economic interest in its South African civil engineering
and general building construction business, to an enterprise that is more than 51%
black owned, managed and controlled, in which case it is released from (i) above.

It is the intention of Raubex to launch development initiatives as set out in (i) above. Raubex
believes that the fixed transformation targets are achievable.

The Settlement Agreement signifies the Government and Construction Companies’
commitment in promoting sustainability, transformation and development in the
construction sector.

On behalf of the Board

JE Raubenheimer
Chairman

RJ Fourie
Chief Executive Officer

JF Gibson
Financial Director

7 November 2016

Company information
Directors
JE Raubenheimer#
RJ Fourie
JF Gibson
F Kenney#
LA Maxwell*
BH Kent*
NF Msiza*
# Non-executive
* Independent non-executive

Company secretary
Mrs HE Ernst

Registered office
Building No 1
The Highgrove Office Park
50 Tegel Avenue
Centurion
0046
South Africa

Transfer secretaries
Computershare Investor Services (Pty) Ltd
70 Marshall Street
Johannesburg
2001
South Africa

Auditors
PricewaterhouseCoopers Inc.

Sponsor
Investec Bank Limited

www.raubex.com

Date: 07/11/2016 07:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (‘JSE’).
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.

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