KORVEST LTD Appendix 4D Half-Year Financial Report
Revenues | Down | 14.8% | to | 27,330 |
Net loss after tax for the period attributable to members | Down | 171.0% | to | (88) |
Dividends | Amount per security | Franked amount per security | ||
Interim dividend (#)
| 10.0¢ 17.0¢ | 10.0¢ 17.0¢ | ||
# Interim dividend proposed in respect of the current reporting period. The financial effect of this dividend will be recognised in the next reporting period. | ||||
Record date for determining entitlements to the dividend | 26 February 2016 | |||
Brief explanation of any of the figures reported above and short details of any bonus or cash issue or other item(s) of importance not previously released to the market: Refer Directors' report on pages 2 to 4 of this financial report. | ||||
This financial report is all the half-year information provided to the Australian Stock Exchange under listing rule 4.2A. The report also satisfies the half-year reporting requirements of the Corporations Act 2001.
The Directors present their report together with the financial report of Korvest Ltd ("the Company") and its subsidiaries ("the Group") for the half-year ended 31 December 2015 and the auditor's review report thereon.
Directors
The Directors of the Company at any time during or since the end of the half-year are:
Chairman - appointed 18 December 2014 Independent Non-Executive Director
A Director since May 2013 Director G.U.D. Holdings Limited
Director Clover Corporation Limited Chairman Azure Healthcare Ltd
Non-Independent Non-Executive Director - appointed January 2005 A Director since 1984
Age 60
Independent Non-Executive Director - appointed 11 February 2014 Chairman of Remuneration Committee
Independent Non-Executive Director - appointed 19 November 2014 Chairman of Audit Committee
Managing Director AusGroup Limited
Managing Director
A Director since June 2007 Chairman Austmine Ltd.
Finance Director
A Director since January 2009 Company Secretary since April 2008
Result
The (loss) / profit for the half-year attributable to the members of the Company was:
31 Dec 15 | 31 Dec 14 |
(88) | 124 |
(88) | 124 |
In thousands of AUD
(Loss) / Profit after income tax expense
Net (loss) / profit attributable to members of the Company
Other Ratios
31 Dec 15 | 31 Dec 14 | |
Net tangible asset (NTA) backing | ||
Net tangible assets per ordinary share | $3.00 | $3.17 |
(Loss) / Profit before tax / revenue | (0.5)% | 2.6% |
(Loss) / Profit after tax / equity interests | (0.3)% | 0.4% |
Review of Operations
Revenue from trading operations for the half-year decreased by 14.8% to $27.3 million with the market trend from recent periods of a lack of project work and a noticeable slowing in the day-to-day non-project market continuing.
Industrial ProductsThe EzyStrut business has benefited over recent reporting periods from supplying a large LNG project. That project has continued through the first-half and is expected to be completed during the second half of FY16. Other than that LNG project the activity levels in the markets serviced by EzyStrut have remained subdued throughout the first half with limited mid-to-large project work undertaken. In the prior comparative period some states were completing project work however in the current reporting period similar projects were not supplied. As a result the current year revenue fell short of the prior comparative period in some of the larger geographical markets.
The Power Step and Titan Technologies businesses supply almost exclusively to the resources sector and as a result have experienced very challenging trading conditions for some time. Conditions appear to have plateaued at the bottom of the cycle and the businesses achieved revenues in line with those of the prior comparative period.
ProductionPlant volumes for the Galvanising business in the first half were below those of the prior comparative period however they were in line with those of the second half of FY15 albeit the mix of internal and external work changed with an increase in external work offsetting the reduced internal tonnes.
Group RestructureThe Company is now well placed with a realigned operating structure to gain greater market share by increasing focus on sales and business development in our current domestic and our growing overseas markets. Also the structure offers greater synergies between the EzyStrut and Galvanising businesses resulting in a lower cost base across the group.
As a result a redundancy programme was implemented with a post-tax cost of $248,000. The combination of the redundancies and natural attrition has reduced the employee numbers from 225 in June 2015 to 184 in December 2015.
Review of operations (continued)
As outlined at the AGM, during the first quarter the Group was actively pursuing a significant acquisition opportunity. Negotiations had commenced during FY15 and ceased during the first half when the parties were unable to agree on commercial terms. The protracted nature of the negotiations resulted in $475k of associated costs being included in the net loss after tax.
In summary, the underlying business performed as follows:
$'000 | |
Net loss after tax | (88) |
Restructuring costs | 248 |
Acquisition related costs | 475 |
Underlying net profit after tax | 635 |
This underlying result is 61% down on the comparative period's first half underlying result.
Dividends
The Directors announced a fully franked interim dividend of 10.0 cents per share.
The Dividend Reinvestment Plan (DRP) will operate for the interim dividend with the issue price calculated at a 5% discount to the volume weighted average market price for the period from 24 February 2016 to 1 March 2016. The dividend will be paid on 11 March 2016 and the record date is 26 February 2016.
Events Subsequent to Reporting Date
Events subsequent to the reporting date are included in Note 15 of the Condensed Notes to the Interim Financial Report.
2016 Guidance
Current market conditions continue to make it difficult to provide definitive guidance. On-hand orders for the large LNG project suggest that similar levels of revenue from this project are expected in the second half as were achieved in the first half. General market conditions are expected to remain at a similar level to those experienced recently. Korvest's second half result should benefit from the restructured organisation now in place.
Lead Auditor's Independence Declaration under Section 307C of the Corporations Act 2001
The lead auditor's independence declaration is set out on page 5 and forms part of the Directors' report for the half-year ended 31 December 2015.
Rounding Off
The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and, in accordance with that Class Order, amounts in the financial report and Directors' report have been rounded off to the nearest thousand dollars, unless otherwise stated.
Dated at Kilburn this 29th day of January 2016.
Signed in accordance with a resolution of the Directors:
Director Director
Korvest Limited issued this content on 29 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 01 February 2016 08:16:30 UTC
Original Document: http://www.korvest.com.au/assets/media_releases/App4D_Dec15_final.pdf
