CAFCA Limited (JSE:CAC) News - Audited Abridged Financial Results for the year ended 30 September 2018 Cafca Limited Share Code: CAC ISIN Code: ZW0009011942 Notice To Shareholders Audited Abridged Financial Results for the year ended 30 September 2018 All figures are in United States Dollars 30 SEPT 2018 30SEPT 2017 STATEMENT OF COMPREHENSIVE INCOME Revenue 30,382,348 19,310,457 Operating profit 5,232,656 1,223,077 Finance income 1,364 3,150 Profit before income tax 5,234,020 1,226,227 Income tax expense (1,374,589) (500,014) Profit for the year 3,859,430 726,213 Other comprehensive income: - - Total comprehensive income for the year 3,859,430 726,213 Issued Ordinary Shares (weighted) (number) 33,059,000 33,059,000 Basic Earnings per share (cents) 11.67 2.21 Diluted Earnings per share(number) 33,459,000 33,459,000 Diluted Earnings per share (cents) 11.53 2.17 Headline earnings per share(number) 33,059,000 33,059,000 Headline earnings per share(cents) 11.67 2.18 STATEMENT OF FINANCIAL POSITION AT 31 SEPT 2018 AT 31 SEPT 2017 ASSETS $ $ Non-Current Assets Property ,plant and equipment 2,990,638 3,263,957 Current assets Inventories 8,624,425 8,256,431 Current income tax receivables - 18,540 Trade and other trade receivables 2,035,613 2,389,492 Available for sale financial assets 6,180 18,540 Cash and cash equivalents 8,854,476 4,168,171 Total Assets 22,511,332 18,115,541 Equity attributable to owners of the parent Share Capital 331 328 Share premium 254,701 177,948 Share option reserve 193,600 20,056 Retained earnings 15,648,704 15,260,469 Total Equity 16,097,336 15,458,801 LIABILITIES Non-current liabilities Deferred income tax liabilities 656,692 788,880 Current liabilities Trade and other payables 1,740,628 1,496,132 Provisions 427,288 371,728 Currrent income tax liabilities 118,193 - Dividend payable 3,471,195 - Total liabilities 6,413,996 2,656,740 Total equity and liabilities 22,511,332 18,115,541 STATEMENT OF CHANGES IN EQUITY Share Capital Share Premium Share Option Retained reserve earnings Total $ $ $ $ $ Balance at 1 October 2016 328 169,281 5,300 14,534,256 14,709,165 Transfer of non-distributable reserve Transaction with owners: Issue of shares - 5,200 - - 5,200 Share options - 3,467 14,756 18,223 Total comprehensive income for the year - - - 726,213 726,213 Net profit for the year - - - 726,213 726,213 Other comprehensive income for the year - - - - - Balance at 30 September 2017 328 177,948 20,056 15,260,469 15,458,801 Balance at 1 October 2017 328 177,948 20,056 15,260,469 14,458,801 Transaction with owners: Issue of shares - 40,400 - - 40,400 Share options 3 36,353 173,544 - 209,900 Dividend declared - - - (3,471,195) (3,471,195) Total comprehensive income for the year - - - 3,859,430 3,859,430 Profit for the period - - - 3,859,430 3,859,430 Other comprehensive income for the year - - - - - Balance at 30 September 2018 331 254,701 193,600 15,648,704 16,097,336 STATEMENT OF CASH FLOWS 30 September 2018 30 September 2017 Profit before income tax 5,234,020 1,226,227 Depreciation 361,528 358,763 Non-cash employee share based payment charge 209,900 18,223 Profit on sale of property plant, and equipment (3,770) (14,723) Finance income 1,364 3,150 Provision for slow moving obsolete inventories 1,628 (69,137) (Decrease)/increase in allowance for impairment of trade receivables (24,446) 8,809 Working capital changes: (Increase)/decrease in inventories (369,623) 120,118 Decrease in trade and other receivables 378,326 928,033 Increase in trade and other payables 244,496 760,478 Increase in provision for other liabilities and charges 55,560 42,724 Net cash generated from operations 6,101,342 3,382,665 Tax paid (1,369,633) (328,410) Finance income (1,364) (3,150) Net generated from operating activities 4,730,345 3,051,105 CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property ,plant and equipment (88,209) (376,455) Proceeds from sale of property,plant and equipment 3,770 14,723 Net cash utilised in investing activities (84,439) (361,732) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of share capital 40,400 5,200 Increase in cash and cash equivalents 4,686,305 2,694,573 Cash and cash equivalents at the beginning of the year 4,168,171 1,473,598 Cash and cash equivalents at the end of year 8,854,476 4,168,171 NOTES THE FINANCIAL STATEMENTS For the year ended 30 September 2018 1.CAFCA Limited (the “Company”) manufactures and supplies cables for transmission and distribution of energy and information.It is a public limited company incorporated in Zimbabwe.The Company has its primary listing on the Zimbabwe Stock Exchange and secondary listing on the Johannesburg Stock Exchange. Basis of preparation 2.The financial statements of CAFCA Limited the (the “Company”) have been prepared in accordance with International Financial reporting Standards (“IFRS”) and interpretations issued by IFRS Interpretations Committee.( “IFRS IC”) applicable to companies reporting under IFRS and in the manner required by the Zimbabwe Companies Act(Chapter 24:03).The financial statements have been prepared under the historical cost convention. Audit opinion 3. These financial results should be read in conjunction with the complete set of financial statements for the year ended 30 September 2017,which have been audited by PricewaterhouseCoopers Chartered Accountants (Zimbabwe).The auditors unqualified audit opinion includes a section on key audit matters as defined by ISA 701,’Communicating key audit matters in the independent auditors report, relating to trading conditions and assessment of impairment of property,plant and equipment.This includes both the rationale for determining the key audit matters and how they were addressed during the audit. The key audit matters -Impact of trading conditions on the entity’s operations -Impairment assessment of plant and equipment The auditor’s report on the financial results is available for inspection at the Company’s registered office. 4.The financial statements are presented in United States Dollars which is the functional currency of the Company. 5.Related party transactions Reunert Electrical Engineering (Proprietary)Limited owns 70% of the company and the remaining 30% are widely held. The following transactions were carried out with related parties: 30 September 30 September 2018 2017 (i) Sale of goods Metal Fabricators of Zambia Plc( Zamefa) 18,345 411,365 (ii)Purchases during the period from the holding company: CBI-Electric African Cables-A Division of ATC( Pty) Limited 2,602,046 729,207 CBI-Electric Telecoms Cable(Pty) Limited 23,627 17,336 Metal Fabricators of Zambia Plc(Zamefa) 56,983 1,393,489 (iii)Year end balances arising from purchase of goods/services: a.Amounts due to related parties: CBI-Electric African Cables-A Division of ATC (Pty) Limited 7,950 33,826 CBI-Electric Telecoms (Pty) Limited - 17,336 b.Amounts due from related parties Metal Fabricators of Zambia Plc(Zamefa) - 106,644 (iv)Key management remuneration: Key management includes directors(executive and non-executive) and members of the executive committee Salaries and short term benefits 655,336 582,170 Share options charge 209,336 18,223 Director’ emoluments -Fees 65,058 80,016 Total 930,294 680,409 6.Segmentation information The executive management team is the Company’s chief operating decision maker. Management has determined the operating segments based on reports reviewed by the executive team that are used to make strategic decisions. The Company has one product line, and operates in one industry sector. Revenue is primarily from customers who are domiciled in Zimbabwe and revenue from external customers pertains mainly to customers domiciled in Zambia,Malawi and Mozambique. Revenue analysis 30 September 2018 30 September 2017 Revenue for customers domiciled in Zimbabwe 30,382,345 18,256,550 Revenue from external customers 1,054,457 1,053,907 30,382,348 19,310,457 Revenue from transactions with single and local customers that amount to 10% of more each of the Group’s revenues , equal approximately US$6,583,033(2017 $6,879,764).These revenues are attributable to customers domiciled in Zimbabwe. The breakdown of the major component of the total revenue from three major customers of least 10% is as follows: 30 September 2018 30 September 2017 Energy Transmission 6,583,033 5,879,764 The total of non-current assets located in Zimbabwe is $2,990,638 (2017:$3,263,957) and there are no non-current assets located in other countries. The segment information provided to the executive team for the product reportable segments for the year ended 30 September are as follows: 30 September 2018 30 September 2017 Revenue from customers 30,382,345 19,310,457 Profit before interest and taxation 5,234,020 1,226,227 Net finance income 1,364 3,150 Finance cost 1,374,589 500,013 Total assets 22,511,332 18,115,541 Liabilities 6,413,996 2,656,740 30 September 2018 30 September 2017 8.Property plant and equipment Capital expenditure 88,209 173,684 Depreciation 361,528 358,763 COMMENTARY AND OVERVIEW OF RESULTS Revenue & Volumes An increase in volume together with a change in sales mix from aluminium to copper resulted in turnover increasing 57% year on year. Most of the growth was in the local market resulting mainly from protection by Government of local manufacturers. Profitability Operating profit improved four fold from the previous year of $1,2 million to $5,2 million in the current year. As mentioned in our trading statement: “Profitability has been improved by strong local demand and a change in sales mix from aluminium to copper products. The high level of finished goods brought forward from the previous year has also contributed and allowed us to hold prices throughout the year.” “The prior year was adversely affected by a volume decrease that resulted in breakeven months until the cost base was significantly reduced – this cost base has since been maintained.” Statement of Financial Position and Cashflow Cash balances as at the yearend were $8,9 million of which $3,5 million was set aside for the dividend and $4,0 million retained for capital expenditure. There were no foreign liabilities and no significant trade and other payables. Stocks at the beginning of the year were $8,2 million and closed at $8,6 million as a hedge against hyperinflation and short term availability of foreign exchange. Outlook The economy since the year end has taken a significant down turn as a result of the acute foreign exchange shortage and the market has discounted the (Real Time Gross Transfer Settlement) RTGS bank balances vis-à-vis the value of US dollars. Until such time as the authorities can put in place a more equitable and stable system of foreign currency allocation it will be difficult to predict the fortunes of either the economy or the company. Dividend The Directors approved on the 6th September 2018 a dividend of 10.5 cents per share to shareholders which was paid on the 5th October 2018. By order of Board C Kangara Company Secretary 16 November 2018 Directors: H.P. Mkushi (Chairman) R.N. Webster (Managing) E.T.Z Chidzonga P.E De Villiers G.Eddey A.E. Dickson A. Mabena S.E Mangwengwende G.J.H Steyn T.A Taylor Date: 16/11/2018 08:30:00 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.