Brikor dis­closes ‘re­portable ir­reg­u­lar­i­ties’ in re­sults

The Star Early Edition - - COMPANIES -

THE AU­DI­TORS of Brikor, the AltX-listed clay brick and ag­gre­gates man­u­fac­turer, have re­ported “re­portable ir­reg­u­lar­i­ties” by the com­pany to the In­de­pen­dent Reg­u­la­tory Board of Au­di­tors (IRBA).

Brikor dis­closed in its fi­nan­cial re­sults state­ment for the year to Fe­bru­ary last year, re­leased yes­ter­day, that the “re­portable ir­reg­u­lar­i­ties” re­lated to non-com­pli­ance with the In­come Tax Act and the Min­eral and Petroleum Re­sources Roy­al­ties Act and were re­ported to the IRBA last Novem­ber.

The com­pany said they re­lated to the non-sub­mis­sion of an­nual tax re­turns and late pay­ments of pro­vi­sional tax as re­quired by the In­come Tax Act and the non-reg­is­tra­tion for Roy­alty Tax and/or sub­mis­sion of re­turns and/or pay­ment of Roy­alty Tax due to the SA Rev­enue Ser­vice as re­quired by the Petroleum Re­sources Roy­al­ties Act.

It said these “re­portable ir­reg­u­lar­i­ties” re­sulted in penal­ties and in­ter­est be­ing charged to the group but did not dis­close the quan­tum of the penalty and in­ter­est charged.

At­tempts to get com­ment from Brikor chief ex­ec­u­tive Gar­nett Parkin and fi­nan­cial di­rec­tor An­dre Hanekom were un­suc­cess­ful.

Brikor in its fi­nan­cial state­ments at­trib­uted the non­com­pli­ance instances to the pro­vi­sional liq­ui­da­tion of the com­pany and cash flow con­straints on the group.

The com­pany went into pro­vi­sional liq­ui­da­tion in Au­gust 2013 when it ex­pe­ri­enced fi­nan­cial dis­tress. This fol­lowed the con­clu­sion of two ac­qui­si­tions in 2008, the year of the global fi­nan­cial cri­sis-in­duced mar­ket col­lapse, which re­sulted in a pro­tracted strike at the com­pany.

It came out of pro­vi­sional liq­ui­da­tion in Oc­to­ber 2015, sav­ing more than 1 000 jobs and cre­at­ing about a fur­ther 250 jobs.

Im­prove­ment

The group said yes­ter­day its over­all fi­nan­cial in­di­ca­tors im­proved sub­stan­tially in a com­pet­i­tive trad­ing en­vi­ron­ment in the year to Fe­bru­ary last year through ef­fec­tive cost man­age­ment ini­tia­tives and a con­certed ef­fort to main­tain and im­prove sus­tain­able work­ing cap­i­tal lev­els.

It said con­trol of in­put costs in pro­duc­tion, through the wholly-owned min­ing sub­sidiary Ilangabi In­vest­ments 12 and the ad­di­tional rev­enue gen­er­ated through the sale of the ad­di­tional coal de­rived through the min­ing process, pro­vided the nat­u­ral syn­ergy that con­tin­ued to grow ex­ter­nal rev­enues and re­duce pro­duc­tion in­put costs.

Brikor yes­ter­day re­ported a 107.4 per­cent growth in head­line earn­ings a share from con­tin­u­ing op­er­a­tions to 5.6 cents from 2.7c in the pre­vi­ous year.

Rev­enue fell marginally to R317.0 mil­lion from R318.2m.

Op­er­at­ing profit be­fore in­ter­est and tax­a­tion im­proved by 91.8 per­cent to R48.6m.

Ef­forts to keep ex­penses to a min­i­mum re­sulted in op­er­at­ing ex­penses falling by 8 per­cent to R43.7m. The group’s to­tal debt fell by 37.8 per­cent to R184m.

The group said its di­rec­tors had pre­pared their bud­gets and cash flow fore­casts for the year ahead based on rea­son­able and sup­port­able as­sump­tions, with the cash flow fore­cast and cur­rent man­age­ment re­ports in­di­cat­ing the group would op­er­ate as a go­ing con­cern “for the fore­see­able fu­ture”.

Trad­ing in Brikor’s shares on AltX is still sus­pended.

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