| Fri 15 Jun 2007, 17:30 | | DEC - Decillion - Reviewed Provisional Results: Ye |
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DEC
DEC
DEC - Decillion - Reviewed Provisional Results: Year Ended 28 February 2007
DECILLION LIMITED
(Registration number: 1998/011692/06)
(Incorporated in the Republic of South Africa)
("Decillion" or "the company" or "the group")
JSE code: DEC & ISIN: ZAE000017612
REVIEWED PROVISIONAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2007
KEY FEATURES
Diluted earnings for the period of 0.3 cents per share (excluding
deconsolidation adjustments) as compared to diluted earnings of 6.6 cents per
share for the comparative period.
All operating divisions and assets have been disposed of, other than the
London operations which have been wound down in an orderly manner.
The Decillion Realisation Trust (Realisation Trust) has been created and has
assumed all the remaining liabilities of the group prior to year end. As at 28
February 2007 Decillion is a cash shell.
Irrevocable undertakings for the approval of the disposals and the creation
of the Realisation Trust have been obtained from a majority of Decillion`s
shareholders.
The directors of Decillion have entered into an agreement for the disposal of
the listed vehicle, subject to regulatory approval.
Following the process as outlined above, a cash distribution will be made to
the shareholders of Decillion, estimated at between 12 and 16 cents per share.
FINANCIAL REVIEW
The group recorded a net profit after tax before deconsolidation entries of
R0.5 million (2006: R10.9 million).
The only operating division for the 2007 financial year was Capital Markets
that was partially disposed of and the remaining businesses closed-down during
the year.
The loss of R5.0 million attributable to the Capital Markets division was
mainly due to the loss incurred in the close down of the operations in London.
The profit on disposal of subsidiary undertakings of R25.1 million is
attributable to the disposal of the business assets of Cedef SA and Decillion
AG in Switzerland, the last remaining operating entities of the group world
wide.
The creation of the Realisation Trust was implemented prior to year-end and
the only remaining asset in Decillion Limited is cash. The deconsolidation of
all the remaining investments in subsidiary companies, as a result of the
transfer thereof to the Realisation Trust, resulted in a negative adjustment in
the income statement of R33.8 million.
SEGMENTAL ANALYSIS
2007 2006
R000`s % R000`s %
Capital Markets (4 996) 19.2 (836) (3.8)
Funds Management - - 16 093 72.6
Corporate and Institutional
Finance - - 15 661 70.6
Head Office and Investments (21 059) 80.8 (8 744) (39.4)
Net (loss) / income before
disposals and goodwill (26 055) 100.0 22 174 100.0
Onshore (10 258) 39.4 32 685 147.4
Offshore (15 797) 60.6 (10 511) (47.4)
Net (loss) / income before
disposals and goodwill (26 055) 100.0 22 174 100.0
REVIEW OF OPERATIONS
Capital Markets
The Capital Markets division comprises all of the group`s trading and
securities distribution activities in the domestic and offshore markets. The
division incurred an operating loss of R5.0 million (2006: R0.8 million loss).
International operations
The international operations contributed a loss of R8.3 million (2006: R18.6
million loss). The loss is mainly attributable to the closing down cost of the
London operations which includes rental cost, employee termination cost, legal
and other external advisory cost. The Swiss operation operated close to
break-even prior to its disposal at the end of May 2006.
Local operations
The local operations contributed a profit of R3.3 million (2006: R17.8 million
profit). By the end of the reporting period all the trading positions were
terminated and/or settled with counter parties or transferred to ABSA Corporate
and Merchant Bank (ABSA) as part of the settlement between Decillion and ABSA.
The group therefore has no remaining proprietary trading positions.
Head Office
Following the disposal of all the operating entities other than Capital Markets
prior to the 28 February 2006 financial year end, all the remaining overheads
and costs were allocated to Head Office. By the end of the reporting period,
the overhead cost structure has been reduced to the level that will be required
for the ongoing maintenance and integrity of historical financing transactions
and the wind-down of the remaining structures in the group.
DISPOSALS
Disposals comprise the disposal of the Cedef SA and Decillion AG assets which
were concluded during the period under review.
GROUP RESTRUCTURING AND STRATEGIC INITIATIVES
In 2005 the group embarked upon a strategy to convert its assets into cash,
following major adjustments and impairments in its previous financial
statements. This process was initiated as a measure of last resort having
regard to the disproportionate risk in its trading book relative to the
diminishing size of the group`s balance sheet and the ongoing losses in its
international operations. Eventualities which came to the knowledge of the
board subsequent to embarking on the process reconfirm that these drastic steps
were the only way to protect the remaining shareholders` interest in the group.
The group has since successfully concluded the disposal of all its operating
divisions.
Although irrevocable undertakings of support have been obtained from a majority
of Decillion`s shareholders for all the disposals and the creation of the
Realisation Trust, the process with regard to the circular has been delayed due
to the late approval by the Exchange Control division of the South African
Reserve Bank for the transfer of the international assets to the Realisation
Trust. All the remaining liabilities within the group have since been
transferred to the Realisation Trust, which has adequate resources to indemnify
Decillion Limited against the remaining liabilities of the group.
The former CEO of the group, Mr. Alwyn Smit has instituted an action against
certain Decillion group companies, which action has prevented the repatriation
of cash to South Africa. Details of the claim by and counter-claim and legal
action against Mr. Smit will be contained in the litigation statement in the
circular to shareholders.
Decillion has entered into an agreement for the disposal of the listed vehicle
following a cash distribution to its shareholders. This transaction is subject
to shareholders and regulatory approval.
Decillion intends to distribute approximately 12 to 16 cents per share to its
shareholders.
ACCOUNTING POLICIES
Accounting policies adopted for purposes of this reporting period comply with
International Financial Reporting Standards (IFRS), as well as with applicable
legislation and are consistent with those adopted in the prior financial year.
REVIEWED RESULTS
The qualified review opinion of Decillion`s auditors, PKF (Jhb) Inc, Chartered
Accountants (SA), on the provisional results is available for inspection at
Decillion`s registered office.
As at the date of this report, the director and auditors of certain companies
in Switzerland, that were subsidiaries of Decillion Limited during the year
under review, have not yet provided the group auditors with signed audit packs.
By order of the Board
11 June 2007
Directors: JF Marais* (Chairman), Dr M Mostert, Prof NI Morgan*, J Molobela*
(*non-executive)
Transfer Secretaries: Computershare Investor Services 2004 (Proprietary)
Limited, 70 Marshall Street, Johannesburg, 2001
Registered office: 5th Floor, Jowell Glyn & Marais House, 72 Grayston Drive,
Sandton, 2196
Company Registration: Decillion Limited (Registration number: 1998/011692/06)
(Incorporated in the Republic of South Africa) ("Decillion" or "the company"
or "the group")
JSE code: DEC ISIN: ZAE000017612
Telephone: +27 11 217 9000 Facsimile: +27 11 783 1687
Company Secretary e-mail: corneb@decillion.net
BALANCE SHEET
AS AT 28 FEBRUARY 2007
Reviewed Audited
2007 2006
R000`s R000`s
ASSETS
Non-current assets - 12 256
Investments - 10 252
Property, plant and equipment - 2 002
Deferred taxation - 2
Current Assets 20 220 269 347
Cash 20 139 96 690
Tradable securities - 1 248
Accounts receivable 81 168 541
Taxation - 2 868
20 220 281 603
EQUITY AND LIABILITIES
Capital and reserves 20 220 47 963
Share capital 2 037 1 649
Share premium 212 432 149 871
Non-distributable reserves - (5 581)
Distributable reserves (194 249) (97 976)
Current liabilities - 233 640
Accounts payable - 177 946
Tradable securities - 53 432
Taxation - 2 262
20 220 281 603
Actual & diluted number of shares (`000) 203 699 164 913
Net asset value & tangible net asset value per share
(cents) 9.9 29.1
Number of shares in issue excluding shares held by
the DRT (`000) 164 913 164 913
INCOME STATEMENT
YEAR ENDED 28 FEBRUARY 2007
Reviewed Audited
2007 2006
R000`s R000`s
Revenue 37 994 204 429
Operating income: Proprietary returns 4 252 35 004
Operating expenses (71 580) (219 205)
Operating (loss) / income (29 334) 20 228
Finance income 3 376 4 196
Finance expense (97) (2 250)
Net (loss) / income before disposals (26 055) 22 174
Disposal of subsidiary undertakings 25 105 11 312
Net (loss) / income after disposals (950) 33 486
Deconsolidation of subsidiaries to the DRT (33 830) -
Net (loss) / income after deconsolidation of
subsidiaries to the DRT (34 780) 33 486
Goodwill amortised, impaired and change in estimate - (16 598)
Net (loss) / income before taxation (34 780) 16 888
Taxation 1 475 (5 938)
Net (loss) / income after taxation (33 305) 10 950
Attributable to:
Equity holders of the company (33 305) 10 950
Determination of headline earnings
(Loss) / income attributable to equity holders of
the company (33 305) 10 950
(Profit) / loss on disposal of property, plant and
equipment (114) 657
Goodwill amortised, impaired and change in estimate - 16 598
Deconsolidation of subsidiaries to the DRT 33 830 -
Disposal of subsidiary undertakings (25 105) (11 312)
Headline (loss) / earnings (24 694) 16 893
Weighted number of shares in issue 171 182 164 913
Before deconsolidation of subsidiaries to the DRT
Basic and diluted earnings per share (cents) 0.3 6.6
Headline and diluted headline (loss) / earnings per
share (cents) (14.4) 10.2
After deconsolidation of subsidiaries to the DRT
Basic and diluted (loss) / earnings per share (cents) (19.5) 6.6
Headline and diluted headline (loss) / earnings per
share (cents) (14.4) 10.2
STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 28 FEBRUARY 2007
Reviewed Audited
2007 2006
R000`s R000`s
Share capital
Opening balance 1 649 1 655
Treasury shares - (6)
Transfer to distributable reserves 388 -
Closing balance 2 037 1 649
Share premium
Opening balance 149 871 149 932
Treasury shares (19) (61)
Transfer to distributable reserves 62 580 -
Closing balance 212 432 149 871
Non-distributable reserves
Opening balance (5 581) (6 200)
Currency translation differences (423) 619
Deconsolidation of subsidiaries to the DRT 6 004 -
Closing balance - (5 581)
Distributable reserves
Opening balance (97 976) (108 926)
Transfer from share capital - treasury shares (388) -
Transfer from share premium - treasury shares (62 580) -
Attributable (loss) / income for the year (33 305) 10 950
Closing balance (194 249) (97 976)
Total shareholders` funds
Opening balance 47 963 36 461
Changes in equity (27 743) 11 502
Closing balance 20 220 47 963
CASH FLOW STATEMENT
YEAR ENDED 28 FEBRUARY 2007
Reviewed Audited
2007 2006
R000`s R000`s
Operating (loss) / income (29 334) 20 228
Elimination of non-cash items (1 115) 151
Increase in working capital (57 413) (32 292)
Cash flows from operating activities (87 862) (11 913)
Finance income 3 376 4 196
Finance expense (97) (2 250)
Taxation received / (paid) 931 (3 461)
Net cash outflow from operating activities (83 652) (13 428)
Cash flows from investing activities
Additions to property, plant and equipment (14) (1 495)
Proceeds on disposal of property, plant and equipment 189 2 079
Additions to goodwill - (10 874)
Disposal of investments 10 252 24 225
Net cash inflow on disposal of subsidiaries 25 615 11 799
Net cash inflow from investing activities 36 042 25 734
Cash flows from financing activities
Decrease in long-term liabilities - (12 077)
Purchase of treasury shares - (66)
Net cash outflow from financing activities - (12 143)
Net (decrease) / increase in cash and cash
equivalents (47 610) 163
Effects of exchange rate changes 2 276 2 598
Cash outflow on deconsolidation of subsidiaries to
the DRT (31 217) -
Cash and cash equivalents at the beginning of the
year 96 690 93 929
Cash and cash equivalents at the end of the year 20 139 96 690
Date: 15/06/2007 17:30:00 Produced by the JSE SENS Department.
