RNS Number : 1250A
Acertec PLC
29 July 2008
Acertec plc
The following announcement was made today by BRC Asia Limited a subsidiary of Acertec plc. Acertec own 70.28% of BRC Asia Limited which
is listed on the Singapore Stock Exchange.
BRC Asia Limited
Unaudited Half-year and Second Quarter Financial Statement And Dividend Announcement For the Period ended 30 June 2008
PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS
1(a) Group Profit and Loss Account for the half year and second quarter ended 30 June
1st Half 1st Half 2nd Qtr 2nd Qtr
2008 2007 +/(-) 2008 2007 +/(-)
$'000 $'000 % $'000 $'000 %
Sales 120,395 50,186 140 68,038 25,461 167
Cost of sales (111,763) (45,391) 146 (63,637) (22,799) 179
Gross profit 8,632 4,795 80 4,401 2,662 65
Other (loss) / gains (net) [
note (a) ]
- Miscellaneous (624) 1,345 n.m 126 1,345 (91)
Expenses
- Distribution (1,131) (996) 14 (568) (491) 16
- Administrative (2,353) (1,778) 32 (1,310) (931) 41
- Finance (net) (739) (485) 52 (438) (270) 62
- Other (561) (489) 15 (326) (236) 38
Share of profit of joint 248 93 167 199 182 9
venture, net of tax
Profit before income tax [ 3,472 2,485 40 2,084 2,261 (8)
note (b) ]
Income tax expense (580) (218) 166 (339) (162) 109
Net profit 2,892 2,267 28 1,745 2,099 (17)
n.m. denotes not meaningful.
1st Half 1st Half 2nd Qtr 2nd Qtr
2008 2007 +/(-) 2008 2007 +/(-)
$'000 $'000 % $'000 $'000 %
Note (a) - Miscellaneous
Net foreign exchange (loss) / (626) 155 n.m 124 155 (20)
gain
Gain on disposal of - 1,187 n.m - 1,187 n.m
available-for-sale financial
assets
Dividend income from 1 1 - 1 1 -
available-for-sale financial
assets
Interest Income 1 2 (50) 1 2 (50)
Note (b) - Profit before tax
is arrived at after charging
Interest expense on borrowings 739 485 52 438 270 62
Depreciation 811 1,024 (21) 405 515 (21)
Share option expense 200 240 (17) 138 173 (20)
Rental expense - operating 328 316 4 164 158 4
lease
Provision for onerous 3,856 - n.m 3,356 - n.m
contracts
Note
Please refer to Para 8 for an explanation for "Provision for onerous contracts".
1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding
financial year
The Group The Company
Jun 2008 Dec 2007 Jun 2008 Dec 2007
$'000 $'000 $'000 $'000
Current assets
Cash and cash equivalents [1] 10,369 1,541 10,331 1,502
Trade and other receivables [2] 52,251 35,034 52,251 35,034
Inventories [3] 62,178 32,464 62,178 32,464
Other current assets 70 576 27 529
124,868 69,615 124,787 69,529
Non-current assets
Investment in a subsidiary - - 3,670 3,670
Investment in joint venture [4] 7,096 6,848 6,076 6,076
Available-for-sale financial assets 33 39 33 39
Property, plant and equipment 12,398 12,797 12,398 12,797
19,527 19,684 22,177 22,582
Total assets 144,395 89,299 146,964 92,111
Current liabilities
Trade and other payables [5] 70,496 31,956 70,105 31,746
Current income tax liabilities 1,537 1,386 1,537 1,386
Borrowings [6] 31,671 15,197 31,671 15,197
103,704 48,539 103,313 48,329
Non-current liabilities
Trade and other payables [7] - - 3,592 3,592
Borrowings 1,879 1,975 1,879 1,975
Provision for retirement benefits 384 384 384 384
Deferred income tax liabilities 975 975 975 975
3,238 3,334 6,830 6,926
Total liabilities 106,942 51,873 110,143 55,255
Net assets 37,453 37,426 36,821 36,856
Share capital and reserves
Share capital 25,105 24,768 25,105 24,768
Capital reserve 597 597 597 597
Fair value reserve 13 19 13 19
Share option reserve 1,571 1,469 1,571 1,469
Foreign currency translation (550) (364) - -
reserve
Retained earnings 10,717 10,937 9,535 10,003
37,453 37,426 36,821 36,856
Comments on Group Balance Sheet
[1] Cash and cash equivalents of $10.4m were retained to cater for disbursements needed immediately after 30 June 2008.
[2] The higher turnover was the main reason for the increase in receivables of $17.2m.
[3] We hedged the fixed price commitments in our order book by ensuring that our physical inventory and inventory on order is
equivalent to our order book in volume terms. The increase in our order book was the main reason for the increase in inventory by $29.7m.
[4] The increase in our investment in the JV came from equity accounting of our share of its profit.
[5] The higher level of purchases, which was driven by the increase in business volume, was the main reason behind the increase in
payables by $38.5m
[6] The higher bank borrowing of $16.4m was needed to finance the higher level of inventory and receivables.
[7] The payable relates to amount due to wholly owned subsidiary.
1(b)(ii) Aggregate amount of group's borrowings and debt securities
Amount repayable in one year or less, or on demand
30 Jun 2008 31 Dec 2007
Secured $'000 Unsecured $'000 Secured $'000 Unsecured $'000
883 30,788 787 14,410
Amount repayable after one year
30 Jun 2008 31 Dec 2007
Secured $'000 Unsecured $'000 Secured $'000 Unsecured $'000
1,879 0 1,975 0
Details of any collateral
Borrowings of $1,729 K is secured by a mortgage over the factory at 12 Tuas Avenue 5, Singapore 639338 and the balance of $1,033 K
relates to hire purchase financing of machinery.
1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately
preceding financial year
1st Half to Jun 08 1st Half to Jun 07 2nd Qtr to 2nd Qtr to Jun 07
Jun 08
$'000 $'000 $'000 $'000
Cash flows from operating
activities
Total profit 2,892 2,267 1,745 2,099
Adjustments for :
Tax 580 218 339 162
Share of profit of joint (248) (93) (199) (182)
venture
Depreciation of property, 811 1,024 405 515
plant and equipment
Share option expenses 200 240 138 173
Interest expense 739 485 438 270
Interest income (1) (2) (1) (2)
Dividend income (1) (1) (1) (1)
Gain on disposal of - (1,187) - (1,187)
available-for-sale financial
assets
Operating cash flow before 4,972 2,951 2,864 1,847
working capital change
Change in operating assets and
liabilities
Trade and other receivables (17,217) (142) (10,116) (1,192)
Inventories (29,714) (11,516) (10,603) (7,799)
Other current assets 506 (6) 1,814 (4)
Trade and other payables 38,354 (8,117) 29,808 (2,029)
Cash (used in) / provided by (3,099) (16,830) 13,767 (9,177)
operations
Income tax paid (429) (404) (441) (485)
Net cash (used in) / provided (3,528) (17,234) 13,326 (9,662)
by operating activities
Cash flows from investing
activities
Purchases of property, plant (412) (498) (297) (306)
and equipment
Proceeds from sale of - 1,445 - 1,445
available-for-sale financial
assets
Interest received 1 2 1 2
Dividend received 1 1 1 1
Net cash (used in)/ provided (410) 950 (295) 1,142
by investing activities
Cash flows from financing
activities
Net proceeds from bank loan 374 1,792 626 1,891
Net proceeds from / (repayment 266 885 (88) 68
of ) finance lease
Net proceeds from / (repayment 15,738 14,665 (2,833) 7,496
of ) bills payable to banks
Proceed from issuance of 239 732 115 561
ordinary shares
Dividends paid (3,112) (2,990) (3,112) (2,990)
Interest paid (739) (485) (438) (270)
Cash provided by / (used in ) 12,766 14,599 (5,730) 6,756
financing activities
Net increase / (decrease) in 8,828 (1,685) 7,301 (1,764)
cash and cash equivalents
Cash and cash equivalents at 1,541 2,244 3,068 2,323
the beginning of the financial
period
Cash and cash equivalents at 10,369 559 10,369 559
the end of the financial
period
1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those
arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of
the immediately preceding financial year
Statement of changes in Equity - Group
Share capital Capital reserve Fair value reserve Share option reserve Currency translation Retained
earnings Total
reserve
$'000 $'000 $'000 $'000 $'000
$'000 $'000
Balance at 1 January 2008 24,768 597 19 1,469 (364)
10,937 37,426
- Currency translation - - - - (148)
- (148)
differences
Net losses recognised directly - - - - (148)
- (148)
in equity
Net profit - - - - -
1,147 1,147
Total recognised gains / - - - - (148)
1,147 999
(losses)
Employee share option scheme
- Value of employee services - - - 62 -
- 62
Issue of shares 177 - - (53) -
- 124
Balance at 31 March 2008 24,945 597 19 1,478 (512)
12,084 38,611
- Currency translation - - - - (38)
- (38)
differences
Net losses recognised directly - - - - (38)
- (38)
in equity
Net profit - - - - -
1,745 1,745
Total recognised gains - - - - (38)
1,745 1,707
-Fair value losses on - - (6) - -
- (6)
available-for-sale financial
assets
Employee share option scheme
- Value of employee services - - - 138 -
- 138
Issue of shares 160 - - (45) -
- 115
Dividend relating to 2007 paid - - - - -
(3,112) (3,112)
Balance at 30 June 2008 25,105 597 13 1,571 (550)
10,717 37,453
Balance at 1 January 2007 22,885 597 593 1,620 (282)
9,085 34,498
-Fair value gains on
available-for-sale financial - - 415 - -
- 415
assets
- Currency translation - - - - (19)
- (19)
differences
Net gains / (losses) - - 415 - (19)
- 396
recognised directly in equity
Net profit - - - - -
168 168
Total recognised gains / - - 415 - (19)
168 564
(losses)
Employee share option scheme
- Value of employee services - - - 67 -
- 67
Issue of shares 236 - - (65) -
- 171
Balance at 31 March 2007 23,121 597 1,008 1,622 (301)
9,253 35,300
-Fair value gains on
available-for-sale financial - - 229 - -
- 229
assets
- Currency translation - - - - 136
(117) 19
differences
Net losses recognised directly - - 229 - 136
(117) 248
in equity
Net profit - - - - -
2,099 2,099
Total recognised gains - - 229 - 136
1,982 2,347
Transfer to income statement - - (1,187) - -
- (1,187)
on disposal of
available-for-sale financial
assets
Employee share option scheme
- Value of employee services - - - 173 -
- 173
Issue of shares 775 - - (214) -
- 561
Dividend relating to 2006 paid - - - - -
(2,990) (2,990)
Balance at 30 June 2007 23,896 597 50 1,581 (165)
8,245 34,204
Statement of changes in Equity-Company
Share capital Capital reserve Fair value reserve Share option reserve Retained earnings Total
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 2008 24,768 597 19 1,469 10,003 36,856
Net profit - - - - 1,098 1,098
Total recognised gains - - - - 1,098 1,098
Employee share option scheme
- value of employee services - - - 62 - 62
Issue of shares 177 - - (53) - 124
Balance at 31 March 2008 24,945 597 19 1,478 11,101 38,140
-Fair value losses on - - (6) - - (6)
available-for-sale financial
assets
Net losses recognised directly - - (6) - - (6)
in equity
Net profit - - - - 1,546 1,546
Total recognised gains - - (6) - 1,546 1,540
Employee share option scheme
- value of employee services - - - 138 - 138
Issue of shares 160 - - (45) - 115
Dividend relating to 2007 paid - - - - (3,112) (3,112)
Balance at 30 June 2008 25,105 597 13 1,571 9,535 36,821
Balance at 1 January 2007 22,885 597 593 1,620 8,560 34,255
- Fair value gains on
available-for-sale financial - - 415 - - 415
assets
Net gains recognised directly - - 415 - - 415
in equity
Net profit - - - - 257 257
Total recognised gains - - 415 - 257 672
Employee share option scheme
- value of employee services - - - 67 - 67
Issue of shares 236 - - (65) - 171
Balance at 31 March 2007 23,121 597 1,008 1,622 8,817 35,165
-Fair value gains on - - 229 - - 229
available-for-sale financial
assets
Net losses recognised directly - - 229 - - 229
in equity
Net profit 1,919 1,919
Total recognised gains - - 229 - 1,919 2,148
Transfer to income statement - - (1,187) - - (1,187)
on disposal of
available-for-sale financial
assets
Employee share option scheme
- Value of employee services - - - 173 - 173
Issue of shares 775 - - (214) - 561
Dividend relating to 2006 paid - - - - (2,990) (2,990)
Balance at 30 June 2007 23,896 597 50 1,581 7,746 33,870
1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise
of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition
or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion
of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period
of the immediately preceding financial year
The changes to the company's share capital were as follows:-
No of shares $
Share capital as at 01/01/2008 618,760,000 24,767,810
Options exercised by employees pursuant To BRC 2,023,000 177,318
Share Option Scheme 2004
Balance as at 31/03/2008 620,783,000 24,945,128
Options exercised by employees pursuant 1,759,000 159,541
To BRC Share Option Scheme 2004
Balance as at 30/06/2008 622,542,000 25,104,669
The outstanding options as at 30/06/08 were:-
Options Exercise Period Exercise Price
14,856,000 23/08/2006 - 22/08/2009 $0.0657
14,555,000 01/10/2007 - 30/09/2010 $0.0612
20,056,000 21/08/2008 - 20/08/2011 $0.0720
12,940,000 07/09/2009 - 06/09/2012 $0.1710
1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and
as at the end of the immediately preceding year.
30 Jun 08 31 Dec 07
Total number of issued shares (excluding treasury 622,542,000 618,760,000
shares)
1(d)(iv) A statement showing all sales, transfer, disposal, cancellation and/or use of treasury shares as at the end of the
current financial period reported on.
Not applicable.
2. Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910
(Engagements to Review Financial Statements), or an equivalent standard
The figures have not been audited or reviewed.
3. Where the figures have been audited or reviewed, the auditors* report (including any qualifications or emphasis of matter)
N/A
4. Whether the same accounting policies and methods of computation as in the issuer*s most
recently audited annual financial statements have been applied
The Group has applied the same accounting policies and methods of computation in the financial statements for the current financial year as
compared with the most recently audited annual financial statement for the financial year ended 31 December 2007.
5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard,
what has changed, as well as the reasons for, and the effect of, the change
N / A
6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately
preceding financial year, after deducting any provision for preference dividends
The Group.
Earnings per ordinary share 1stHalf to Jun 08 1stHalf toJun 07 2ndQtr toJun 08 2ndQtr toJun 07
(cents)
- Basic 0.465 0.376 0.280 0.345
- Diluted basis 0.450 0.350 0.268 0.260
7. Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a)
current period reported on and (b) immediately preceding financial year
The Group
Net asset value per ordinary share (cents) 30 Jun 08 31 Dec 07
- Basic 6.02 6.05
The Company
Net asset value per ordinary share (cents) 30 Jun 08 31 Dec 07
- Basic 5.91 5.96
8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group*s business. The review
must discuss any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported
on, including (where applicable) seasonal or cyclical factors. It must also discuss any material factors that affected the cash flow,
working capital, assets or liabilities of the group during the current financial period reported on.
Our turnover increased by 140% in the first half of 2008 compared with the first half of 2007. On a quarter by quarter basis, the increase
in the first quarter was 112% whereas the second was 167%. The 140% increase was a result of a volume growth of about 90% and higher selling
prices of about 50%. Volume growth was the result of our strategy to offer a total reinforcing package of mesh, bar and prefabricated
solutions, supported by a buoyant construction market. The increase in selling prices was driven by the higher cost of steel.
Margin in the first half of 2008 was affected by a provision of S$3.9m for onerous contracts. (S$0.5m was provided for in the first quarter
and S$3.4m for the second). On an overall basis, the average selling prices are higher than our inventory cost. However, for accounting
purposes, we have to identify projects where the selling prices are lower than our inventory cost (defined as *onerous contracts*) and
provide for the losses. Out of the total of S$3.9m provided, S$2.4m relates to the Integrated Resorts Project on Sentosa. We are seeking a
court ruling on the latter. Adjustments will accordingly be made to the financial statement in the event of obtaining a favourable outcome.
Please refer to our separate announcement which is being released simultaneously.
Despite the significant increase in volume of about 90%, distribution expenses were well controlled and increased by only 14%.
Administrative expenses increased by 32% caused by the higher headcount needed to service the higher volume. The higher level of inventory,
which was financed by bank borrowings in the form of bills payable, was the main reason for the increase in finance expenses.
Our share of profit of the joint venture in China, net of tax, increased significantly, helped by new orders for the high speed railway
sector.
9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual
results
No forecast or prospect statement has been made or disclosed to shareholders.
10. A commentary at the date of the announcement of the competitive conditions of the industry in which the group operates and any
known factors or events that may affect the group in the next reporting period and the next 12 months
The strong construction industry in Singapore will continue to be the key driver of growth for the reinforcing industry in 2008. The
industry will continue to benefit from the high quantum of contracts awarded in 2007 and capacity utilization should remain high.
Some slowing in growth is expected in Singapore*s economy because of the credit crisis brought about by the sub-prime problems in the US.
Despite this and the Government*s announcement on the scaling back of certain construction projects, the construction market is expected to
continue to be strong in the next 12 months.
11. Dividend
(a) Current Financial Period Reported On
2008
Name of dividend Interim
Dividend type Cash
Dividend rate 0.15 cents per share
(one- tier)
Date payable 28 August 2008
(b) Corresponding Period of the Immediately Preceding Financial Year
2007
Name of dividend Interim
Dividend type Cash
Dividend rate 0.15 cents per share
Tax rate 18%
Date paid / payable 03 October 2007
(c) Date payable
28 August 2008
(d) Books closure date
NOTICE IS HEREBY given that the Share Transfer Books and Register of Members of the Company will be closed on 15 August 2008 for the
preparation of dividend warrants. Duly completed registrable transfers received by the Company*s Share Registrar Tricor Barbinder Share
Registration Services, 8 Cross Street, �11-00 PWC Building, Singapore 048424, up to 5.00 pm on 14 August 2008 will be registered to
determine shareholders* entitlements to the said dividend. In respect of ordinary shares in securities accounts with The Central Depository
(Pte) Limited (*CDP*), the final dividend will be paid by the Company to CDP which will, in turn distribute the entitlements to the final
dividend to CDP account holders in accordance with its normal practice.
12. If no dividend has been declared / recommended, a statement to that effect
N/A
13. Confirmation pursuant to Rule 705(4) of the SGX Listing Manual
We, Lim Siak Meng and Wong Soong Kit, being two directors of BRC Asia Limited, do hereby confirm on behalf the Board of Directors of the
Company that, to the best of our knowledge, nothing has come to the attention of the Board of Directors of the Company which may render the
unaudited financial results for the quarter and half year ended 30 June 2008 to be false or misleading in any material aspects.
On behalf of the Board of Directors
Lim Siak Meng Wong Soong Kit
Executive Director Executive Director
BY ORDER OF THE BOARD
John David Sword
Chairman
29 July 2008
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FKLFLVDBEBBB
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