BDM - Buildmax - Unaudited Consolidated Financial Results For The Six
2008/10/30, 15:56:00
 
BDM                                                                             
BDM - Buildmax - Unaudited Consolidated Financial Results For The Six           
                   Months Ended 31 August 2008                                  
Buildmax Limited                                                                
("Buildmax" or "the group")                                                     
(Registration no. 1995/012209/06)                                               
Share Code: BDM & ISIN code: ZAE000011250                                       
UNAUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST     
2008                                                                            
HIGHLIGHTS*                                                                     
-    Revenue up 38%                                                             
-    EBITDA up 91%                                                              
-    PBT up 69%                                                                 
-    HEPS up 64%                                                                
-    Cash generated from operations R209,2 million                              
-    Post-period Brait buys 24%                                                 
* Comparison to pro forma historical results for the comparative period         
ABRIDGED CONSOLIDATED BALANCE SHEET                                             
                              Unaudited    Unaudited         Audited            
                              at           and restated at   at                 
                              31 August    30 September      29 February        
                              2008          2007             2008               
                              R'000        R'000             R'000              
ASSETS                                                                          
Non-current assets                                                              
Property, plant and            1 234 251    12 904            12 288            
equipment                                                                       
Intangible assets              1 225 797    -                 -                 
Prepayments                    -            -                 2 811             
Deferred taxation              1 905        -                 2 186             
                              2 461 953    12 904            17 285             
Current assets                                                                  
Inventories                    92 988       24 098            22 586            
Trade and other receivables    330 109      16 595            18 921            
Bank and cash                  55 928       12 830            16 901            
Taxation receivable            1 080        -                 271               
                              480 105      53 523            58 679             
                              2 942 058    66 427            75 964             
EQUITY AND LIABILITIES                                                          
Share capital and premium      1 536 144    42 266            42 266            
Retained earnings              107 470      8 242             11 560            
Ordinary shareholders'         1 643 614    50 508            53 826            
interests                                                                       
Outside shareholders'          1 106        -                 -                 
interests                                                                       
Total shareholders'            1 644 720    50 508            53 826            
interests                                                                       
Non-current liabilities                                                         
Interest-bearing liabilities   530 302      -                 -                 
Deferred taxation              116 847      440               421               
                              647 149      440               421                
Current liabilities                                                             
Trade and other payables       249 690      14 507            21 481            
Current portion of interest-   307 200      -                 19                
bearing liabilities                                                             
Vendor liabilities             51 764       -                 -                 
Taxation payable               41 535       972               217               
                              650 189      15 479            21 717             
                              2 942 058    66 427            75 964             
Shares in issue and to be      907 366      41 806            41 806            
issued at end of period                                                         
('000)                                                                          
Net asset value per share      181,1        120,8             128,8             
(cents)                                                                         
ABRIDGED CONSOLIDATED INCOME STATEMENT                                          
                                    Unaudited   Unaudited     Audited           
                        Unaudited   Pro-forma   and restated  eleven            
                        six months  six months  six months    months            
                        ended       ended       ended         ended             
                        31 August   31 August   30 September  29 February       
                        2008        2007        2007          2008              
                        R'000       R'000       R'000         R'000             
Revenue                  755 336     548 506     61 078        111 543          
Earnings before          230 838     121 064     5 413         6 012            
interest, taxation,                                                             
depreciation and                                                                
amortisation ("EBITDA")                                                         
Depreciation             (55 273)    (32 591)    (1 154)       (1 894)          
Profit before interest   175 565     88 473      4 259         4 118            
and taxation ("PBIT")                                                           
Interest received        5 834       8 294       516           1 110            
Finance costs            (50 159)    (19 167)    (118)         (247)            
Net profit before        131 240     77 600      4 657         4 981            
taxation ("PBT")                                                                
Taxation                 (35 145)    (22 544)    (1 145)       1 849            
Net profit after         96 095      55 056      3 512         6 830            
taxation                                                                        
Attributable to:                                                                
Equity holders of the    95 910      55 056      3 512         6 830            
parent                                                                          
Outside shareholders'    185         -           -             -                
interest                                                                        
                        96 095      55 056      3 512         6 830             
Supplementary                                                                   
information                                                                     
Basic earnings per       12,6        7,2         8,4           16,3             
share (cents)                                                                   
Headline earnings per    11,8        7,2         8,3           16,2             
share (cents)                                                                   
Shares in issue and to                                                          
be issued ('000)                                                                
-  at end of the period  907 366     907 366     41 806        41 806           
-  weighted              763 106     763 106     41 806        41 806           
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT                                       
                                                Unaudited     Audited           
                                  Unaudited     and restated  eleven            
                                  six months    six months    months            
                                  ended         ended         ended             
                                  31 August     30 September  29 February       
                                  2008          2007          2008              
                                  R'000         R'000         R'000             
Operating activities                                                            
Net profit before taxation         131 240       4 657         4 981            
Non-cash flow items and changes    35 847        (2 071)       1 316            
in working capital                                                              
Net interest paid/(received)       42 131        (398)         (863)            
Cash generated from operations     209 218       2 188         5 434            
Net interest (paid)/received       (42 131)      398           863              
Taxation paid                      (4 811)       (238)         (474)            
Cash flows from operating          162 276       2 348         5 823            
activities                                                                      
Investing activities                                                            
Cash payments on acquisition of    (337 773)     -             -                
businesses, net of cash acquired                                                
Settlement of acquired vendor      (64 012)      -             -                
liabilities in acquired                                                         
businesses                                                                      
Purchase of property, plant and    (351 176)     (391)         (522)            
equipment                                                                       
Proceeds on disposal of property,  23 001        70            70               
plant and equipment                                                             
Cash flow from investing           (729 960)     (321)         (452)            
activities                                                                      
Financing activities                                                            
Net proceeds of shares issued      300 475       -             -                
Net proceeds and payments of       175 658       (18)          709              
interest-bearing liabilities                                                    
Cash flows from financing          476 133       (18)          709              
activities                                                                      
Net (decrease)/increase in cash    (91 551)      2 009         6 080            
and cash equivalents                                                            
Cash and cash equivalents at the   16 901        10 821        10 821           
beginning of the period                                                         
Cash acquired as part of business  130 578       -             -                
combinations                                                                    
Cash and cash equivalents at the   55 928        12 830        16 901           
end of the period                                                               
ABRIDGED STATEMENT OF CHANGES IN EQUITY                                         
                                     Share  Share       Retained  Outside       
                         Total       capit  premium     earnings  Share-        
                                     al                           holders       
                         R'000       R'000  R'000       R'000     R'000         
Restated as at 31 March   46 996      418    41 848      4 730     -            
2007 (*)                                                                        
Net profit for the six    3 512       -      -           3 512     -            
months                                                                          
Restated balance at 30    50 508      418    41 848      8 242     -            
September 2007                                                                  
Net profit for the five   3 318       -      -           3 318     -            
months                                                                          
At 29 February 2008       53 826      418    41 848      11 560    -            
Shares issued and to be   1 493 878   8 656  1 485 222   -         -            
issued                                                                          
Outside shareholders'     921         -      -           -         921          
interests in                                                                    
subsidiaries acquired                                                           
Net profit for the six    96 095      -      -           95 910    185          
months                                                                          
At 31 August 2008         1 644 720   9 074  1 527 070   107 470   1 106        
* Restated as per annual financial statements of 29 February 2008               
RECONCILIATION OF HEADLINE EARNINGS                                             
                                    Unaudited   Unaudited     Audited           
                        Unaudited   Pro-forma   and restated  eleven            
                        six months  six months  six months    months            
                        ended       ended       ended         ended             
                        31 August   31 August   30 September  29 February       
                        2008        2007         2007         2008              
                        R'000       R'000       R'000         R'000             
Equity holders of the    95 910      55 056      3 512         6 830            
parent                                                                          
Adjusted for:                                                                   
Profit on sale of        (6 606)     (115)       (70)          (63)             
property, plant and                                                             
equipment                                                                       
Tax effect of            985         33          20            18               
adjustments                                                                     
Headline earnings        90 289      54 974      3 462         6 785            
attributable to                                                                 
ordinary shareholders                                                           
CARRYING VALUE OF ASSETS AND LIABILITIES ACQUIRED IN TERMS OF BUSINESS          
COMBINATIONS:                                                                   
                                 Total       Diesel Power  Buildco group        
                                 Unaudited   Unaudited     Unaudited            
                                 at          at            at                   
                                 2 April     2 April       2 April              
                                 2008        2008          2008                 
                                 R'000       R'000         R'000                
ASSETS                                                                          
Non-current assets                                                              
Property, plant and equipment     928 635     560 514       368 121             
Intangible assets                 117 155     -             117 155             
Investments in associates         2 925       -             2 925               
                                 1 048 715   560 514       488 201              
Current assets                                                                  
Available for sale properties     13 821      -             13 821              
Inventories                       51 607      4 241         47 366              
Trade and other receivables       209 227     102 402       106 825             
Bank and cash                     132 391     105 238       27 153              
Taxation receivable               1 133       -             1 133               
                                 408 179     211 881       196 298              
Total assets                      1 456 894   772 395       684 499             
Outside shareholders' interests   4 577       -             4 577               
Non-current liabilities                                                         
Interest-bearing liabilities      367 055     132 757       234 298             
Interest-free loans               94 909      2 215         92 694              
Deferred taxation                 87 549      73 479        14 070              
                                 549 513     208 451       341 062              
Current liabilities                                                             
Trade and other payables          125 352     61 953        63 399              
Current portion of interest-      294 723     190 735       103 988             
bearing liabilities                                                             
Vendor liabilities                64 012      -             64 012              
Bank overdraft                    1 813       -             1 813               
Taxation payable                  40 443      26 073        14 370              
                                 526 343     278 761       247 582              
Total liabilities                 1 080 433   487 212       593 221             
Carrying value of net assets      376 461     285 183       91 278              
Dividend paid on acquisition to   (85 000)    (85 000)      -                   
Buildmax                                                                        
Consolidation adjustment of       731         -             731                 
outside shareholders' interests                                                 
Carrying value of net assets      292 192     200 183       92 009              
acquired                                                                        
Purchase consideration of                                                       
business combinations (including                                                
contingent liabilities):                                                        
Cash paid and to be paid at fair  340 027     338 110       1 917               
value                                                                           
Deduct interest-free loan         (94 909)    (2 215)       (92 694)            
accounts acquired                                                               
Fair value of shares issued and   1 194 158    90 597        1 103 561          
to be issued*                                                                   
Total purchase consideration      1 439 276   426 492       1 012 784           
paid and payable (including                                                     
contingent liabilities)                                                         
Goodwill arising from business    1 147 084   226 309       920 775             
combinations (including                                                         
contingent liabilities)                                                         
Number of ordinary shares issued  687 391     50 632        636 759             
and to be issued in terms of                                                    
business combinations (including                                                
contingent liabilities) ('000)                                                  
Average share price (Rand)*       1,74        1,79          1,73                
BUSINESS COMBINATIONS EFFECTED DURING THE PERIOD                                
As disclosed as a post balance sheet event in the annual financial statements   
of Buildmax for the period ended 29 February 2008 and as set out in the         
Revised Listing Particulars of Buildmax, dated 5 March 2008 ("the RLP"),        
Buildmax acquired the following entities on 2 April 2008:                       
-  100% of the shares in and claims on loan account against Diesel Power Open   
Cast Mining (Pty) Limited ("Diesel Power"); and                                 
-  The Buildco group, comprising:                                               
  -  100% of the shares in and claims on loan account against Hollyberry        
Props 41 (Pty) Limited                                                          
  -  100% of the shares in and claims on loan account against Black Ginger      
372 (Pty) Limited                                                               
  -  100% of the shares in and claims on loan account against Clarewick         
Investments (Pty) Limited                                                       
100% of the shares in and claims on loan account against Burnleigh Investments  
(Pty) Limited.                                                                  
SEGMENTAL ANALYSIS                                                              
Business Unit           Revenue                                                 
                                                  Unaudited                     
                               Unaudited          Pro-forma                     
                               six months         six months                    
                               ended              ended                         
                               31 August          31 August                     
                       % of    2008        % of   2007        Increase          
                       total   R'000       total  R'000       %                 
Mining Services         68      512 825     56     307 113     67               
Construction Materials  32      242 511     44     241 393     -                
Group                   100     755 336     100    548 506     38               
Business Unit           EBITDA                                                  
                                                 Unaudited                      
                               Unaudited         Pro-forma                      
                               six months        six months                     
                               ended             ended                          
                               31 August         31 August                      
                       % of    2008        % of  2007        Increase           
                       total   R'000       total R'000       %                  
Mining Services         80      184 080     65    78 832      134               
Construction Materials  20      46 758      35    42 232      11                
Group                   100     230 838     100   121 064     91                
Business Unit           PBIT                                                    
                                                  Unaudited                     
                               Unaudited          Pro-forma                     
                               six months         six months                    
                               ended              ended                         
                               31 August          31 August                     
                       % of    2008        % of   2007       Increase           
                       total   R'000       total  R'000      %                  
Mining Services          79     138 291     59     52 053     166               
Construction Materials  21      37 274      41     36 420     2                 
Group                   100     175 565     100    88 473     98                
Business Unit           PBT                                                     
                                                  Unaudited                     
                               Unaudited          Pro-forma                     
                               six months         six months                    
                               ended              ended                         
                               31 August          31 August                     
                       % of    2008        % of   2007        Increase          
                       total   R'000       total  R'000       %                 
Mining Services         76      100 033     59     45 416      120              
Construction Materials  24      31 207      41     32 184      (3)              
Group                   100     131 240     100    77 600      69               
NOTES TO THE UNAUDITED GROUP INTERIM RESULTS                                    
Basis of Preparation and Accounting Policies                                    
The results for the six months ended 31 August 2008 have been prepared in       
accordance with International Financial Reporting Standards ("IFRS"),           
specifically IAS 34: Interim Financial Reporting, and comply with the           
requirements of the South African Companies Act, 1973 and the Listings          
Requirements of the JSE Limited. The accounting policies of the group are       
consistent with those applied for the period ended 29 February 2008. The        
interim results have not been audited or reviewed by the group's auditors.      
IFRS 3                                                                          
The business combinations were accounted for using provisional figures, an      
alternative allowed in terms of IFRS 3, as provided by the Buildco group and    
by Diesel Power. IFRS 3 allows a company to update these provisional figures    
within 12 months of the business combination date. The detailed assessment of   
the Buildco group and Diesel Power's assets, liabilities and contingent         
liabilities and hence the split and valuation of goodwill and intangibles is    
in the process of being completed by an independent third party and any         
required adjustment, will be made in due course and reflected in the year-end   
results.                                                                        
Contingent Diesel Power Vendor Liability                                        
In terms of the Diesel Power acquisition agreement and as set out in the RLP,   
an amount of up to R37,5 million could become due to the vendor of Diesel       
Power. This amount is contingent on Diesel Power achieving, for the year        
ending 31 August 2009, a profit after taxation target range as set out in the   
acquisition agreement and the RLP.                                              
COMMENTARY                                                                      
Executive Summary                                                               
The directors are pleased to present the first consolidated interim results     
for the recently-enlarged and reconstituted Buildmax for the six months to 31   
August 2008 ("the interim period"). Following the acquisitions of Diesel Power  
Open Cast Mining (Pty) Limited ("Diesel Power") and the Buildco group of        
companies ("Buildco") (collectively "the acquisitions") as well as the          
conclusion of a successful capital raising, Buildmax has been repositioned as   
a leading supplier of open cast mining services and construction materials.     
Effective 29 February 2008 Buildmax changed its year-end from March to          
February. The historical interim results to 30 September 2007 ("the prior       
period") and the audited results for the eleven months to 29 February 2008      
comprise only the historical Building Materials division of Buildmax prior to   
the acquisitions. As the scope and scale of the group has changed               
significantly subsequent to the acquisitions, comparison with the prior period  
of Buildmax is not meaningful.                                                  
The acquisitions became effective on 2 April 2008 and are therefore             
consolidated in these interim results for five months, while the results of     
the historical operations of Buildmax have been included for the full six       
months. To assist in comparison to the prior period on a like-for-like basis,   
unaudited pro forma historical results have been presented ("pro forma          
historical results").                                                           
The results for the interim period show revenue 38% higher at R755,3 million    
(August 2007: R548,5 million), EBITDA up 91% to R230,8 million (August 2007:    
R121,1 million) and PBT increasing by 69% to R131,2 million (August 2007:       
R77,6 million) resulting in headline earnings per share ("HEPS") higher by 64%  
to 11,8 cents (August 2007: 7,2 cents) compared to the pro forma historical     
results.                                                                        
As a result of the acquisitions and capital raising the number of shares in     
issue and to be issued has increased from 41,8 million to 907,4 million, with   
shareholders funds having increased to R1,6 billion. If the effective dates of  
the acquisitions had been at the beginning of the period, the acquisitions      
would have contributed revenue of R778 million and PBIT of R184 million.        
Post the interim period Brait has acquired a strategic stake in Buildmax (see   
details below).                                                                 
Operations                                                                      
Mining Services                                                                 
Eskom's demand for additional coal to replenish its depleted stockpiles and     
demand for thermal coal continue to provide growth opportunities for the        
group. During the interim period the level of general investment in coal        
mining in South Africa increased substantially. This included a number of new   
coal mines recently opened or in the process of being commissioned.             
Due to the repositioning of the group subsequent to the acquisitions, the       
Mining Services business unit was not reported on historically. It is           
therefore reported on in these interim results for five months and compared to  
pro forma historical figures for the operations comprising the business unit.   
Revenue increased by 67% to R512,8 million from the pro forma revenue of        
R307,1 million, EBITDA by 134% to R184,1 million from R78,8 million and PBT by  
120% to R100 million from R45,4 million. Both Diesel Power and Vukuza Earth     
Works (previously a member of Buildco) performed exceptionally well.            
The business unit assumes no geological risk on any of its sites. Further,      
Mining Services has successfully introduced contractual amendments to recover   
from customers certain fluctuations in costs.                                   
The strategy to broaden the customer base and increase the number of contracts  
has proved successful. The number of contract mining customers has increased    
to 12 (2007: 9) and contracts to 21 (2007: 15), which is further expected to    
increase to 26 by February 2009. The group's customers include all the major    
coal mining groups in South Africa.                                             
Capital expenditure                                                             
Unprecedented demand from the open cast coal mining industry has necessitated   
revision of the capital expenditure budget. Buildmax anticipated capital        
expenditure of approximately R360 million for the year ending February 2009 at  
the time of the reverse listing in April 2008, but has subsequently increased   
this forecast to between R600 million and R650 million. Capital expenditure in  
Mining Services for the first six months of the year was R397,9 million. The    
capital expenditure incurred and to be incurred has been secured at favourable  
prices and at exchange rates, prior to the recent devaluation of the Rand       
against major world currencies.  Following the implementation of the Brait      
transaction (see details below), the group expects net debt to be between R800  
million and R900 million at 28 February 2009.                                   
As a result of the delay between acquiring equipment and deploying it into      
use, the full benefit of the additional capital expenditure will only be        
realised in the years ending February 2010 and beyond. Approximately 95% of     
the capital expenditure has been or will be applied to expand coal mining       
operations.                                                                     
Equipment acquired is in use on existing and new contracts and notwithstanding  
the increased capital expenditure the group continues to hire-in additional     
equipment to meet current demand.                                               
Buildmax's strong growth has resulted in a fleet with an average age of less    
than two years and formal preventative maintenance programmes ensure that the   
life of all equipment is extended. This results in longer usability of assets   
without a concomitant decrease in reliability. The level of replacement capex   
is therefore expected to be relatively low in the next three years.             
Furthermore, the high level of expansionary capex incurred during the current   
financial year is not expected to recur.                                        
Cash flow                                                                       
Buildmax has secured term funding from local financial institutions for the     
capital expenditure. The group's operations are highly cash generative with     
cash generated from operations (prior to debt servicing and capex) of R209,2    
million, being 91% of EBITDA.                                                   
Order book                                                                      
At 31 August 2008 the business unit's order book approximated R5 billion.       
Construction Materials                                                          
Public sector expenditure on infrastructure has emerged as one of the key       
drivers of growth in the construction sector, and notwithstanding current       
economic events looks set to continue in the medium term. However private       
sector investment, particularly in the residential component of the             
construction sector, has slowed significantly as a result of successive         
interest rate hikes and the slowdown in the economy. It is doubtful that this   
market will recover before the latter part of 2009.                             
In light of these trading conditions the Construction Materials business unit   
has delivered reasonable results. On a like-for-like basis revenue of R242,5    
million increased marginally from the prior period. However, margins were       
pressured by the slowdown in private sector investment which intensified        
competition. In addition the business unit was adversely affected by the        
successive increases in fuel prices which it was unable to pass on to           
customers. Accordingly on a like-for-like basis (excluding a profit of R6,2     
million on the sale of a property), EBITDA declined to R40,5 million from       
R42,2 million in the prior period and PBT to R25 million from R32,2 million.    
The recent reduction in the price of oil should provide some relief, but        
margins are expected to remain under pressure well into 2009.                   
In the Western Cape unusually high rainfall exacerbated the difficult trading   
conditions above. The Bricks & Blocks division was worst affected, recording a  
13% decline in revenue which necessitated significant restructuring, arising    
from which retrenchments were an unfortunate but necessary consequence.         
Where possible Buildmax has repositioned its businesses to target               
infrastructure projects through the supply of appropriate materials and         
activity levels remain satisfactory. The business unit has recently secured     
contracts to supply materials for the upgrade of the R21 between Johannesburg   
and Pretoria, for the Department of Foreign Affairs in Pretoria and for the     
Greenpoint Stadium in Cape Town.                                                
Capital expenditure                                                             
Capital expenditure for the first six months of the year of R28,4 million was   
primarily deployed to position the `Aggregates & Quarries' division to service  
infrastructure projects. This was financed by internal cash resources and term  
funding. No significant capital expenditure is forecast in this business unit   
in the medium term.                                                             
Black Economic Empowerment                                                      
The acquisition of Buildco and the capital raising undertaken in March 2008     
introduced a significant black empowerment partner to the group. Post the       
subscription by Brait (see details below) the black shareholding in the group   
will be approximately 15% from less than 2% six months ago.                     
Skills Training and Development                                                 
Sourcing suitably qualified candidates with relevant industry experience at     
all levels in the group remains an ongoing challenge. To assist with skills     
development Buildmax currently operates a full time training facility in        
Mpumalanga aimed primarily at operators for the Mining Services business unit.  
In Gauteng the group partners with an independent skills development            
organisation to provide unskilled individuals with the opportunity to gain      
recognised qualifications relevant to Buildmax's operations.                    
600 employees (420 from designated groups) took part in skills enhancement,     
training and development programmes during the interim period.                  
The group currently employs 3 201 people, up from 2 350 at August 2007.         
Safety, Health, Environment & Quality (SHEQ)                                    
Buildmax prides itself on providing a safe working environment for all          
employees and sub-contractors, with no fatalities or disabling injuries         
recorded during the interim period on sites under the control of Buildmax.      
The group has initiated a number of projects to improve SHEQ standards. These   
include an increase in the number of SHEQ inspectors, adopting standard         
reporting protocols and setting performance targets.                            
Prospects                                                                       
Mining Services                                                                 
Eskom's request in January 2008 for an additional 45 million metric tons will   
increase demand for coal by 9% per annum over the next two years. Additional    
export capacity is coming on stream at Richards Bay, Durban and Maputo.  It is  
not anticipated that a drop in the price of coal as a result of the             
international financial crisis will significantly affect local production.      
Despite concerns over emissions, coal is expected to remain the primary source  
of energy for the foreseeable future. Buildmax therefore anticipates strong     
revenue growth for its Mining Services business unit.  Notwithstanding this     
projection of growth, the price of equipment and consumables as well as skills  
shortages remain major ongoing challenges.                                      
A number of optimisation programmes are currently underway and the initial      
results are positive. A major focus is the rationalisation of support services  
and harnessing the group's critical mass to improve margins. To further         
advance these programmes Buildmax is actively looking for a site to             
consolidate the operations of Diesel Power and Vukuza Earth Works.              
Construction Materials                                                          
Despite the slowdown in private and residential expenditure and to the extent   
that it is geographically feasible, the group will continue to participate in   
public sector spend on infrastructure and has increased its product range to    
facilitate this.                                                                
Group                                                                           
The group has continued to trade well post the interim period. Should this      
performance continue Buildmax is on track to meet its forecast HEPS of 22,5     
cents (excluding any amortisation of intangibles) for the year ending 28        
February 2009 (the "February 2009 forecast") as set out in the Revised          
Listings Particulars dated 5 March 2008.                                        
February 2010 forecast                                                          
With the benefit of the expansionary capital expenditure for a full year, a     
strong order book and anticipated future industry conditions, HEPS (excluding   
any amortisation of intangibles) for the year to 28 February 2010 is forecast   
to increase by not less than 40% from the February 2009 forecast. This          
February 2010 forecast financial information has not been reviewed or reported  
on by Buildmax's auditors.                                                      
Investment by Brait IV Investment L.P. and Brait IV SA Partnership ("Brait")    
Shareholders are referred to the announcement released together with this       
announcement and are advised that Brait has agreed to subscribe for 133 333     
333 ordinary Buildmax shares at an aggregate subscription consideration of      
R200 million being R1,50 per Buildmax share. In addition Brait has concluded a  
number of agreements to acquire a further 120 000 000 Buildmax shares from      
existing shareholders at R1,10 per share, which are conditional upon the        
subscription and will take Brait's aggregate shareholding to just over 24% of   
the total issued share capital of Buildmax.                                     
The Brait investment enhances the group's balance sheet and introduces a        
strategically valuable shareholder which will allow Buildmax to pursue organic  
and acquisitive growth opportunities.                                           
Board of Directors                                                              
There were a number of changes to the board of directors and management during  
the interim period. Mrs NR Jansen and Mr JPG Vorster resigned as CEO and CFO    
respectively, and Messrs. MD Smullen and IDP Burger resigned as Chairman and    
non-executive director, respectively, on 28 March 2008.  The board of           
directors thanks them for their service.                                        
Mr PJ de Klerk and Mr HP Fourie have subsequently been appointed as CEO and     
CFO respectively. Further Messrs CB Brayshaw and C Wood were appointed          
independent non-executive directors and Messrs BT Ngcuka, M Matisonn and R      
Munitz non-executive directors, all on 28 March 2008. Mr MD Lamola remains on   
the board as an independent non-executive director (collectively the "Buildmax  
Board").                                                                        
In terms of the Brait transaction, the Buildmax board has resolved to appoint   
Dennis John Mack and Anil Maharaj as non-executive directors of Buildmax with   
effect from the scheduled closing date as defined in the Brait subscription     
agreement.                                                                      
Interim Dividend                                                                
No interim dividend has been declared. It is the group's policy to consider     
the declaration of a dividend annually.                                         
Appreciation                                                                    
The dedication and commitment of our partners, both internal and external, has  
made possible the group's transformation. We would like to thank our fellow     
directors, management teams and employees for their hard work. We also thank    
our customers, suppliers, service providers, shareholders and advisors for      
their invaluable support.                                                       
Paul de Klerk                      Herman Fourie                                
Chief Executive Officer            Chief Financial Officer                      
30 October 2008                                                                 
Directors:                                                                      
PJ de Klerk (Chief Executive Officer); HP Fourie (Chief Financial Officer); CB  
Brayshaw*^; MD Lamola*^;                                                        
M Matisonn*; R Munitz*;  BT Ngcuka*; C Wood*^                                   
*Non-executive director      ^Independent                                       
Registered office:                                                              
Unit 19, 1st Floor East Block, Cambridge Office Park, 5 Bauhinia Street,        
Highveld Park, Centurion                                                        
Postnet Suite 435, Private Bag X108, Centurion 0046                             
Sponsor:                                                                        
Java Capital (Pty) Limited                                                      
Transfer secretaries:                                                           
Computershare Investor Services (Pty) Limited                                   
70 Marshall Street, Johannesburg, 2001                                          
(PO Box 61051, Marshalltown, 2107)                                              
Company secretary:                                                              
Probity Business Services (Pty) Limited                                         
3rd Floor, JHI House, Cradock Avenue, Rosebank, 2196                            
(PO Box 85392, Emmarentia, 2029)                                                
www.buildmax.co.za                                                              
Date: 30/10/2008 15:56:01 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.