APPENDIX 4E PRELIMINARY FINAL REPORT GIVEN TO THE ASX UNDER LISTING RULE 4.3A PPK GROUP LIMITED ABN 65 003 964 181 FINANCIAL YEAR ENDED 30 JUNE 2013
HIGHLIGHTS OF RESULTS FOR ANNOUNCEMENT TO THE MARKET (figures are in A$000s) June June 2013 2012 Change Change $000s % SALES REVENUE 5,002 7,711 (2,709) -35% RENTAL INCOME FROM INVESTMENT PROPERTIES 3,060 2,211 849 38% REALISED GAINS FROM INVESTING 264 157 107 68% PROFIT BEFORE INCOME TAX 3,455 1,968 1,487 76% PROFIT BEFORE INCOME TAX ATTRIBUTABLE TO OWNERS OF PPK GROUP LTD 3,034 1,960 1,074 55% PROFIT AFTER INCOME TAX ATTRIBUTABLE TO OWNERS OF PPK GROUP LTD 2,383 1,543 840 54% EARNINGS PER SHARE 4.7 2.9 1.8 59% Current Year Previous Year Interim Dividend 1.50 cents 1.00 cent Final Dividend 2.00 cents nil 3.50 cents 1.00 cent The Directors have resolved that a fully franked final dividend of 2.00 cents per share will be paid this year. Record Date for determining entitlement to Dividend 11 October 2013 Payment date of Dividend 18 October 2013 The company's Annual General Meeting will be held on Tuesday 26th November 2013 at 3.00pm Venue: The Grace Hotel, 77 York Street Sydney NSW, Australia.
COMMENTARY ON RESULTS PPK Group Limited (PPK) has recorded a profit after tax attributable to members of $2.383 million for FY 2013 compared to $1.543 million in FY 2012 (up 54%). Industrial Properties All three PPK owned industrial properties, Arndell Park, Dandenong South and Seven Hills are now fully leased to strong established tenants and provide a full rental return and a steady cash flow. Property Development PPK Southport Pty Ltd atf the Nerang Street Southport Project Trust (Trust) in which PPK currently has a 25% interest will this week complete the acquisition of an adjoining property for a part cash and part equity consideration. This will reduce PPK's interest in the Trust entity to 18.74% but provide the Trust with a larger development site in a key location with improved development potential. The Kiah Willoughby Project continues to progress very well. All 16 Stage 2 homes are scheduled for completion by the builder and settlement of their sales prior to 31 December 2013 with a consequent flow through of profit to PPK. The Bundaberg and Elizabeth Vale retirement villages continue to provide strong and regular rental income and are currently the subject of approaches by prospective purchasers of both villages on an in-line basis at prices which are receiving serious consideration by the PPK directors. Financing The secured mortgage loans provided by PPK Finance Pty Ltd to a retirement village operator and a mining services industry operator are both scheduled for repayment, and will be repaid, in the first half of FY 2014. Until repaid these loans provide an ongoing interest income stream at premium rates. Rambor The Rambor mining services business had an improved second half in FY 2013 and contributed $707,000 in pre-tax profit for the full year. This is well down on FY 2012 but remains a positive contribution in a difficult environment for all mining services industry businesses. Generally Present indications are for a continuing steady improvement in earnings in FY 2014. This combined with a strong and regular cash flow means that the directors have resolved to pay a final fully franked dividend of 2 cents per share payable on 18 October 2013. This represents a total dividend of 3.5 cents per share fully franked for FY 2013. 137007721/v1
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME REVENUES Mining equipment manufacture 5,002 7,711 Investment properties 3,060 2,211 Investment activities 38 65 Interest receivable 2,173 1,337 TOTAL REVENUE 10,273 11,324 OTHER INCOME 667 820 EXPENDITURE Mining equipment manufacture (4,301) (6,265) Investment properties (812) (653) Investment activities (53) (98) Administrative expenses (1,514) (1,759) Finance costs (1,298) (1,410) TOTAL EXPENDITURE (7,978) (10,185) Share of profit / (loss) from associated entities 493 9 PROFIT / (LOSS) BEFORE INCOME TAX EXPENSE 3,455 1,968 Income tax (expense) (707) (417) PROFIT / (LOSS) AFTER INCOME TAX 2,748 1,551 PROFIT / (LOSS) IS ATTRIBUTABLE TO: Owners of PPK Group Limited 2,383 1,543 Non-controlling interest 365 8 OTHER COMPREHENSIVE INCOME 2,748 1,551 Changes in value on available-for-sale financial assets (180) 84 Provision for income tax thereon 54 (25) Realised gain on sale of available-for-sale financial assets transferred to the income statement from the asset revaluation reserve (36) (163) Provision for income tax thereon 10 49 OTHER COMPREHENSIVE INCOME NET OF INCOME TAX (152) (55) TOTAL COMPREHENSIVE INCOME FOR THE YEAR 2,596 1,496 TOTAL COMPREHESIVE INCOME IS ATTRIBUTABLE TO: Owners of PPK Group Limited 2,231 1,488 Non-controlling interest 365 8 2,596 1,496 EARNINGS PER SHARE Continuing operations 4.7 cents 2.9 cents Diluted Earnings per share 4.7 cents 2.9 cents
CONSOLIDATED STATEMENT OF FINANCIAL POSITION Current Assets Cash 1,345 9,079 Trade and other receivables 8,850 2,696 Inventories 1,017 1,162 Other current assets 312 323 Financial assets at fair value through profit or loss - 327 Total Current Assets 11,524 13,587 Non Current Assets Trade and other receivables 10,700 6,276 Financial assets 2,259 756 Investments in associated entities 265 9 Investment properties 30,430 27,276 Other property plant & equipment 993 1,273 Intangibles 1,985 1,413 Deferred tax assets 1,310 1,589 Total non current assets 47,942 38,592 Total Assets 59,466 52,179 Current Liabilities Trade and other payables 493 695 Interest bearing liabilities 6,720 925 Current tax liabilities 58 422 Provisions 520 311 Total Current Liabilities 7,791 2,353 Non Current liabilities Interest bearing liabilities 18,080 20,500 Trade and other payables 2,881 - Deferred tax liabilities 170 29 Provisions 89 89 Total Non Current liabilities 21,220 20,618 Total Liabilities 29,011 22,971 Net Assets 30,455 29,208 Equity Contributed equity 28,673 29,016 Reserves (85) 67 Retained earnings / (accumulated losses) 1,741 123 Capital and reserves attributable to owners of PPK Group Ltd 30,329 29,206 Non-controlling interests 126 2 Total Equity 30,455 29,208
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Total Attributable to Non- Issued Retained Other Owners of controlling Total Capital Earnings Reserves PPK Group Ltd Interests Equity CONSOLIDATED ENTITY At 1 July 2011 29,782 (122) 122 29,782-29,782 Total comprehensive income for the year (Loss) for the year - 1,543-1,543 8 1,551 Other comprehensive income Realised gain on available-for-sale financial asset - - (163) (163) - (163) less deferred tax impact - - 49 49-49 Fair value adjustment on available-for-sale financial assets - - 84 84-84 less deferred tax impact - - (25) (25) - (25) Total comprehensive income for the year - 1,543 (55) 1,488 8 1,496 Transactions with owners in their capacity as owners Dividends paid - (1,298) - (1,298) - (1,298) Trust distributions (8) Shares repurchased (766) - - (766) - (766) Change in holding of non-controlling interest in subsidiaries 2 (766) (1,298) - (2,064) (6) (2,064) At 30 June 2012 29,016 123 67 29,206 2 29,208 Total comprehensive income for the year Profit for the year 2,383 2,383 365 2,748 Other comprehensive income Realised gain on available-for-sale financial asset - - (36) (36) - (36) less deferred tax impact - - 10 10-10 Fair value adjustment on available-for-sale financial assets - - (180) (180) - (180) less deferred tax impact - - 54 54-54 Total comprehensive income for the year - 2,383 (152) 2,231 365 2,596 Transactions with owners in their capacity as owners Dividends paid - (765) - (765) - (765) Trust distributions - (241) (241) Shares repurchased (343) - - (343) - (343) Change in holding of non-controlling interest in subsidiaries - - - (343) (765) - (1,108) (241) (1,349) At 30 June 2013 28,673 1,741 (85) 30,329 126 30,455
CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended Year Ended Cash flows related to operating activities Receipts from customers 8,320 11,476 Payments to suppliers and employees (6,368) (7,762) Other Revenue 57 219 Payments for financial assets at fair value through profit or loss - (2,562) Proceeds from sale of financial assets at fair value through profit or loss 360 2,301 Interest received 987 537 Dividends received 38 65 Income taxes paid (586) (42) Interest and costs of borrowings (1,298) (1,410) Net Operating Cash Flows 1,510 2,822 Cash flows related to investing activities Payment for purchases of property, plant and equipment (194) (384) Payment for purchase of investment property (3,438) (3,100) Proceeds from sale of plant and equipment - 9 Distribution received from associated entities 228 - Proceeds from redemption of convertible notes - 2,169 Proceeds from sale of available-for-sale financial assets 2,530 - Payments for available for sale-financial-assets (2,912) (618) Payment for intangibles (584) (697) Net Investing cash flows (4,370) (2,621) Cash flows related to financing activities Loans Advanced (9,781) (1,184) Payment for buyback of shares (343) (766) Proceeds from Bank loans 3,150 1,850 Proceeds from other loans 3,625 642 Loans repaid (335) 600 Dividends paid (765) (1,298) Transactions with non-controlling interest - 2 Net financing cash flows (4,449) (154) Net increase (decrease) in cash held (7,309) 47 Cash at beginning of period 8,654 8,607 Cash at end of period 1,345 8,654 Reconciliation of cash Reconciliation of cash at the end of the period (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. Continuing operations Cash on hand and at bank 1,345 9,079 Bank Overdraft - (425) Total cash at end of period 1,345 8,654 Non Cash Financing and Investing Activities during the year Fair value adjustments in Derivatives - (decrease) / increase in value - -
NOTES TO THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME REVENUE, OTHER INCOME & EXPENSES FROM OPERATIONS REVENUE Sale of goods 5,002 7,711 Rental income from investment properties 3,060 2,211 Dividends received - other parties 38 65 Interest receivable 2,173 1,337 10,273 11,324 OTHER INCOME Net gain on disposal of investment properties - - Net gain on sale of available-for-sale financial assets 264 157 Net gain on sale of financial assets at fair value through profit or loss - 66 Net gain on disposal of plant and equipment - 9 Proceeds from rental property dispute resolution - 192 Reversal of doubtful debts - other receivables - 64 Received on redemption of convertible note impaired prior year - 169 Value of available-for-sale financial asset received on redemption of convertible notes 47 101 Fair value adjustment on available-for-sale non longer classified as an associate 322 35 Sundry income 34 27 667 820 INTEREST INCOME Other persons 1,230 404 Associated entities 943 933 SHARE OF PROFIT (LOSS) FROM ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD 2,173 1,337 Share profit (loss) from associates accounted for under the equity method 493 9 EXPENSES Profit / (loss) before income tax has been determined after: 493 9 Amortisation of intangibles 12 26 Cost of sales - mining equipment manufacture (2,815) 4,612 Depreciation - investment properties 309 310 - plant and equipment 391 523 700 833 Foreign currency translation losses 1 8 Impairment of available-for-sale financial assets - Listed investments 22 60 Interest paid - other 1,298 1,410 Doubtful debts - trade receivables 4 20 Defined contribution superannuation expense 223 270 Employee benefit expenses 2,377 2,629 Rental expense on operating leases 174 233
NOTES TO THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME COMPARISON OF HALF-YEAR PROFITS Consolidated profit / (loss) after tax attributable to members reported for the 1st half-yearly report 862 957 Consolidated profit / (loss) after tax attributable to members for the 2nd half-yearly report 1,521 586 Profit / (loss) after income attributable to members reported for the year 2,383 1,543 BUSINESS COMBINATIONS PPK Group Limited holds 50% or more of the units in three Unit Trusts. These three Unit Trusts are controlled entities of PPK Group Limited and the relevant details are set out in the "Details of Investments in Controlled Entities" below. DETAILS OF INVESTMENTS IN CONTROLLED ENTITIES Ownership Units Held Ownership Units Held Interest $1 each Interest $1 each The Easy Living Unit Trust 50.00% 500 50.00% 500 The Easy Living (Bundaberg) Trust 50.00% 500 50.00% 500 The Slot Loan Trust 51.43% 1,800 51.43% 1,800 2,800 2,800 DETAILS OF INVESTMENTS IN ASSOCIATES Fair value of investments in associates Ownership Ownership Interest Interest Investments in associated unit trust Units Held Units Held $1 each $1 each Nerang Street Southport Project Trust 25.00% 275 25.00% 275 PPK Willoughby Funding Unit Trust 22.86% 40 22.86% 40 Carrying value in the Financial Statements 315 315 Nerang Street Southport Project Trust 1 9 PPK Willoughby Funding Unit Trust 264-265 9 Aggregate share of associates' profit or (loss) Profit (loss) before income tax 493 9 Income tax expense or (credit) (148) (3) Net profit (loss) after income tax 345 6
NOTES TO THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Earnings per security (EPS) Details of basic and diluted EPS reported separately in accordance with paragraph 9 and 18 of AASB 133 Earnings per share are as follows: Earnings used in the calculation of basic EPS 2,383 1,543 Earnings used in the calculation of diluted EPS 2,383 1,543 Weighted average number of ordinary shares outstanding During the year used in the calculation of: Number Number Basic EPS 51,084,022 52,322,800 Diluted EPS 51,084,022 52,322,800 Cents Cents Basic EPS - Cents 4.7 2.9 Diluted EPS - Cents 4.7 2.9 Net Tangible Asset Backing Net tangible asset backing per share 55.7 53.8 DIVIDENDS Interim Dividend 1.50 cents 1.00 cent Final Dividend 2.00 cents nil 3.50 cents 1.00 cent The amount of retained profits and reserves that could be distributed as fully franked dividends from franking credits that exist or will arise after payment of income tax in the next year in respect to the 2013 year is $1,656,000. Amount of final dividend payable - fully franked 1,015 - Both current and prior year dividends were fully franked.
NOTES TO THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME CONSOLIDATED RETAINED PROFITS Retained profits / (accumulated losses) at the beginning of the financial year 123 (122) Net profit attributable to members 2,383 1,543 Dividends paid (765) (1,298) Retained profits at the end of the financial year 1,741 123 ORDINARY SHARES ON ISSUE NUMBER NUMBER Number of securities on issue at beginning of year 51,625,430 53,812,779 Shares repurchased through approved buyback scheme (860,654) (2,187,349) OPTIONS Number of securities on issue at end of year 50,764,776 51,625,430 There were no options outstanding at balance date POST BALANCE DATE EVENTS No matter or circumstances have arisen since the end of the financial year which will significantly affected the operations of the economic entity, the results of those operations or the state of affairs of the economic entity in subsequent periods. AUDIT STATUS The accounts are currently in the process of being audited