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CNL
CNL
CNL - Control Instruments Group Limited - Update regarding the sale by Control
Instruments
Control Instruments Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1964/003987/06)
Share code: CNL & ISIN: ZAE000001665
("ControI Instruments" or "the Company" or "the Group")
Update regarding:
the sale by Control Instruments of its shares in Control Instruments
OmniBridge (Proprietary) Limited ("CI OmniBridge") and Sunstore Limited
("OmniBridge Cyprus") to TeliMatrix Limited ("TeliMatrix") in return for shares
in TeliMatrix; and
the unbundling to shareholders, of the shares in TeliMatrix held by
Control Instruments at the time of the listing (in a ratio of two TeliMatrix
shares for every one share held in Control Instruments) subject to the listing
of TeliMatrix, in terms of the provisions of section 46 of the Income Tax Act,
No. 58 of 1962, or any successor to that provision, to be implemented in terms
of section 90 of the Companies Act, 1973, (No. 61 of 1973) as amended and
the articles of association of the Company,
("the transaction").
This announcement should be read in conjunction with Control Instruments`
circular ("the circular") to shareholders and the TeliMatrix pre-listing
statement, (both dated 13 September 2007).
1. INTRODUCTION
Shareholders are referred to the announcement dated 23 May 2007, wherein
Control Instruments announced that it had signed an agreement with TeliMatrix
whereby CI OmniBridge, OmniBridge Cyprus and Tripmaster Corporation would be
merged with Matrix Vehicle Tracking (Proprietary) Limited in TeliMatrix.
It was subsequently agreed to exclude Tripmaster Corporation from the
agreement.
Control Instruments will receive shares in TeliMatrix in consideration for the
sale of its shareholding in CI OmniBridge and OmniBridge Cyprus ("Control
Instruments` fleet and vehicle management businesses").
Implementation of the sale will result in the receipt by Control Instruments of
320 000 000 TeliMatrix shares as well as a cash amount which may be payable to
or by Control Instruments in respect of the movement in the net working capital
of CI OmniBridge and OmniBridge Cyprus.
Subject to the implementation of the sale and a listing being granted by the
JSE Limited ("JSE") for the shares of TeliMatrix, Control Instruments will
unbundle 278 873 508 of the consideration shares, which will be all the shares
it holds at the time of the listing and represents approximately 87% of the
consideration shares received, to Control Instruments shareholders qualifying
to participate in the unbundling. Thus, each Control Instruments shareholder
will receive two TeliMatrix shares for every one share held in Control
Instruments.
2. RATIONALE FOR THE TRANSACTION
Control Instruments develops, manufactures and distributes products and
services into niche sectors of the worldwide automotive industry.
Towards the end of 2004, in an environment of major change in the South African
automotive industry, the Group`s directors set three major strategic objectives
for the Group, viz: (i) to globalise the Group; (ii) to increase the critical
mass of each of the businesses and (iii) to continue to invest in the
development of products in which the Group owns the Intellectual Property.
The acquisitions made by Control Instruments since 2005 have been in pursuit of
these objectives. The globalisation and accelerated growth of the Group created
two distinct businesses, each focusing on a different sector in the automotive
industry.
This presented the directors with an opportunity to separate the businesses. By
selling its fleet and vehicle management businesses to
TeliMatrix and unbundling the shares it holds in TeliMatrix at the time of the
listing to Control Instruments shareholders, the board believes it achieves a
number of objectives. The sale should unlock some of the underlying value in
the business, which the directors have felt has not been reflected in the
Group`s share price. In addition, it will give shareholders the opportunity to
choose for themselves where they would like to be invested - in fleet and
vehicle management; in automotive components and products; or in both.
The "post-transaction" Control Instruments will focus on automotive components
and products and will continue to design, manufacture and distribute products
and services to specialised niche markets in the global automotive industry.
3. THE MERGED ENTITY
3.1 Nature of business
The merged entity will comprise:
3.1.1 Control Instruments` fleet and vehicle management businesses, viz. CI
OmniBridge and the Datatrak business (a wholly-owned subsidiary of OmniBridge
Cyprus).
Together, these businesses have offices in the United Kingdom, Germany and
South Africa; employ approximately 250 people; have an installed base of over
300 000 onboard computers worldwide and over 30 000 current subscriber
connections on the FM-Web and Datatrak services.
3.1.2 Matrix
Matrix is one of the largest vehicle tracking and recovery businesses in South
Africa. With over 135 000 active subscribers, it has the largest GSM tracking
subscriber base in the country.
3.2 Features of business
(i) A combined subscriber base of over 165 000 vehicles of which in excess
of 145 000 are connected to GSM networks worldwide, making it one of the
largest GSM subscriber bases worldwide.
(ii) An established global distribution network, developed over the past ten
years, which operates in over 70 countries (on six continents).
(iii) Operations in South Africa, the United Kingdom and Germany.
(iv) Predictable cash flows and foreign income streams (Rand hedge).
(v) Strong international growth opportunities.
(vi) Prominent brands, including VDO FM, Matrix and Datatrak.
4. THE TRANSACTION
4.1 Transaction steps
(i) Post implementation of the sale, TeliMatrix will be the holding company
of operating companies undertaking businesses constituted by:
- Control Instruments` fleet and vehicle management businesses;
- Matrix`s vehicle tracking and recovery business.
(ii) On the effective date, Control Instruments will receive the
consideration shares as consideration for the shares in CI OmniBridge and
OmniBridge Cyprus.
(iii) Application will be made by the advisers of TeliMatrix to the JSE to
list all of the issued shares in TeliMatrix on the Main Board of the JSE.
(iv) Subject to the listing, 278 873 508 consideration shares will be
unbundled to shareholders.
4.2 Purchase consideration
As consideration for the sale, Control Instruments will receive 320 000 000
consideration shares in respect of the shares in CI OmniBridge and OmniBridge
Cyprus, which shares will represent 50% of the issued share capital of
TeliMatrix; as well as a cash amount which may be payable to or by Control
Instruments in respect of the movement in the net working capital of CI
OmniBridge and OmniBridge Cyprus.
At the last practicable date, being 28 August 2007, the estimated value of the
merged entity upon listing is anticipated to be approximately R1.311 billion.
4.3 Listing of TeliMatrix
The TeliMatrix shares are expected to list on the JSE on or about 12 November
2007.
5. CONDITIONS PRECEDENT TO THE TRANSACTION
5.1 At the last practicable date, the major conditions precedent to the
transaction that have been fulfilled are as follows:
(i) Control Instruments and TeliMatrix conducted their due diligence
investigations and both confirmed that they were satisfied with the outcome of
their investigations;
(ii) South African Reserve Bank approval has been received; and
(iii) Competition authority for the implementation of the transaction has been
received.
5.2 At the last practicable date, the major outstanding conditions precedent
to the transaction are as follows:
5.2.1 The sale
(i) The Control Instruments shareholders approving and ratifying the sale in
general meeting in accordance with section 228 of the Companies Act.
(ii) The disclosure schedule referred to in the warranty agreement be
delivered and accepted by the parties.
(iii) The approval by TeliMatrix shareholders of the sale.
5.2.2 The unbundling
(i) The Control Instruments shareholders passing the requisite resolution at
the general meeting in terms of section 90 of the Companies Act to implement
and effect the unbundling;
(ii) the JSE approving the listing and unbundling;
(iii) the listing of TeliMatrix shares; and
(iv) the fulfilment of the conditions precedent referred to in paragraph
5.2.1, to which the sale is subject.
It should be noted that the sale is not conditional on the listing and the
unbundling. However, the unbundling is conditional on the implementation of the
sale and the listing.
All resolutions required to be passed at the general meeting or the alternative
general meeting are contained in the notice of general
meeting and the notice of alternative general meeting, both of which are
attached to and form part of the circular dated 13 September 2007. (See
paragraph 10 below)
6. THE UNBUNDLING
Subject to fulfilment of the conditions precedent set out in paragraph 5.2.2,
278 873 508 shares will be unbundled.
At the last practicable date, it is expected that the last day to trade
will be Friday, 9 November 2007 and the record date Friday, 16 November 2007.
6.1 Unbundling entitlement
The unbundling will take place in respect of 139 436 754 Control Instruments
shares. This is the number of Control Instruments shares at the last
practicable date and takes account of the shares in The Control Instruments
Share Incentive Scheme.
Accordingly, based on 139 436 754 Control Instruments shares in issue at the
last practicable date, and the unbundling of 278 873 508 consideration shares,
the entitlement to be received by eligible shareholders will take place in the
ratio of two TeliMatrix shares for every Control Instruments share held on the
record date.
6.2 Regulations
The unbundling will be carried out in terms of the provisions of section 46 of
the Income Tax Act, No. 58 of 1962, or any successor to that provision, and
will be implemented in terms of section 90 of the Companies Act.
Secondary Tax on Companies is not payable.
6.3 Settlement of unbundling entitlement to shareholders
Subject to the fulfilment of the conditions precedent referred to in paragraph
5.2.2, issuing of the unbundling entitlement to eligible shareholders is
expected to be made on or about Monday, 19 November 2007.
Shareholders are advised to consult their professional advisers about
their personal tax position particularly with reference to the unbundling.
7. LISTING OF THE SHARES OF TELIMATRIX ON THE JSE
The listing on the JSE of the TeliMatrix shares is expected to commence on
Monday, 12 November 2007.
Accordingly, subject to the fulfilment of the conditions precedent to which the
transaction is conditional, it is expected that shareholders will be able to
trade in the TeliMatrix shares from the commencement of trade on the JSE on
Monday, 12 November 2007.
The expected above dates are subject to amendment. Any such amendment
will be released on SENS and published in the press.
8. CONTROL INSTRUMENTS POST THE TRANSACTION
Assuming the implementation and completion of the transaction, the following
information is pertinent to Control Instruments, post the transaction:
8.1 the remaining business in Control Instruments will focus on automotive
components and products and will continue to design, manufacture and distribute
products and services to specialised niche markets in the global automotive
original equipment manufacture market and aftermarket industries;
and
8.2 Control Instruments will continue to qualify for its listing on the JSE
in accordance with Section 4.28 of the JSE Listings Requirements.
9. SALIENT DATES AND TIMES
2007
Circular posted to shareholders on Thursday, 13 September
Last day to lodge forms of proxy for the
general meeting, by 09:00 on Thursday, 27 September
General meeting held at 09:00 on Friday, 28 September
Results of general meeting expected to be
released on SENS on Friday, 28 September
Results of general meeting expected to be
published in the press on Monday, 1 October
Last day to lodge forms of proxy for the
alternative general meeting, by 09:00 on Thursday, 4 October
If required, alternative general meeting
held at 09:00 on Friday, 5 October
Results of alternative general meeting, if held,
expected to be released on SENS on Friday, 5 October
Results of alternative general meeting, if held,
expected to be published in the press on Monday, 8 October
Expected last day to trade in Control Instruments
shares to be entitled to receive the unbundling
entitlement on Friday, 9 November
Shares trade ex the unbundling on Monday, 12 November
Shares in the name of TeliMatrix commence
trading under the JSE code MIX and ISIN ZAE000104683 on Monday, 12 November
Expected record date for shareholders to be
recorded in the register in the books of Control
Instruments to be entitled to receive the unbundling
entitlement on Friday, 16 November
Expected date for settlement of the
unbundling entitlement to be credited to dematerialised
shareholders` accounts or posted to certificated
shareholders on Monday, 19 November
Notes:
1. All or any of the above dates or dates and times associated therewith as
provided for in this announcement are subject to amendment. Any such amendment
will be released on SENS and published in the press.
2. No dematerialisation or rematerialisation of documents of title may take
place between Monday, 12 November 2007 and Friday, 16 November 2007, both days
inclusive.
3. Unbundling entitlements to certificated shareholders will be effected by
way of registered post to:
- the address of the shareholder as set forth in the books of the company;
or
- in the case of joint registered shareholders, the registered address of
the shareholder who is first named in the books of the company in respect of
those shares; or
- such other address as may be designated in writing by the shareholder by
no later than Friday, 26 October 2007.
4. Issuing of the unbundling entitlement in terms of Note 3 above shall be
a complete discharge by the company of its relevant obligations in terms of the
unbundling.
5. Unbundling entitlements to dematerialised shareholders will be effected
to the relevant account at the dematerialised shareholder`s CSDP or broker in
accordance with the terms of the agreement entered into between the
dematerialised shareholder and his CSDP or broker. Settlement of unbundling
entitlements to the CSDP or broker as contemplated herein shall be a complete
discharge by the company of its relevant obligations in terms of the
unbundling.
10. NOTICE OF GENERAL MEETING
10.1 In order to obtain approval for the sale and the unbundling, a general
meeting of shareholders will be held in the boardroom, Blaauwklip Office
Park 2, corner Strand and Webersvallei Roads, Stellenbosch, South Africa on
Friday, 28 September 2007 at 09:00.
The requisite notice of general meeting is attached to and forms part of the
circular dated 13 September 2007.
In the event that the Corporate Laws Amendment Act No 24 of 2006 comes into
effect subsequent to the date of issue of the circular, but prior to the
holding of this general meeting on Friday, 28 September 2007, an alternative
general meeting of shareholders convened for 09:00 on Friday, 5 October 2007,
notice of which is also attached to the circular dated 13 September 2007, will
replace this general meeting convened for Friday, 28 September 2007 and this
general meeting convened for Friday, 28 September 2007 will not take place.
11. POSTING OF THE CONTROL INSTRUMENTS CIRCULAR AND TELIMATRIX PRE-LISTING
STATEMENT
The Control Instruments circular together with the TeliMatrix pre- listing
statement was posted to shareholders on 13 September 2007.
The circular should be read in conjunction with the TeliMatrix pre- listing
statement, which has been prepared and issued in terms of the JSE Listings
Requirements in relation to the listing of the ordinary shares of TeliMatrix in
the Electronic & Electrical Equipment - Electronic Equipment sector of the Main
Board of the JSE.
The circular and the pre-listing statement are available on the Control
Instruments` website (www.ci.co.za).
Copies of the circular and the pre-listing statement may be obtained from
Control Instruments, telephone: (021) 876 3738 or e-mail: info@ci.co.za
21 September 2007
UNAUDITED PRO FORMA FINANCIAL EFFECTS OF THE TRANSACTION
UNAUDITED PRO FORMA BALANCE SHEET
Acquisitions
Share Consideration/
Before1 issue2 Datatrak3 Consolidation4
R000 R000 R000 R000
ASSETS
Non-current assets 518 405 - 90 279 -
Property, plant and equipment 229 748 - 13 822 -
Goodwill 71 660 - - -
Intangible assets 209 459 - 64 560 -
Investment in joint ventures 2 178 - - -
Financial assets - - 6 794 -
Non -current receivables 366 - - -
Deferred tax assets 4 994 - 5 103 -
Current assets 403 601 179 920 113 666 (115 094)
Inventory 176 656 - 29 831 -
Trade and other receivables 212 888 - 64 619 -
Loans to subsidiaries - - -
South African Revenue
Services 5 675 - - -
Cash and cash equivalents 8 382 179 920 19 216 (115 094)
Total assets 922 006 179 920 203 945 (115 094)
EQUITY
Capital and reserves 350 231 179 920 53 173 (53 173)
Share capital 5 472 1 500 - -
Share premium 221 066 178 500 - -
Treasury shares (10 282) - 51 715 (51 715)
Fair value and other reserves 17 933 - (306) 306
Retained earnings 116 042 (80) 1 764 (1 764)
LIABILITIES
Non -current liabilities 304 099 - 17 321 -
Borrowings 221 764 - 2 391 -
Retirement benefit
obligations 600 - - -
Deferred tax liability 81 169 - - -
Provisions 566 - 14 930 -
Current liabilities 267 676 - 133 451 (61 921)
Trade and other payables 154 748 - 46 991 -
South African Revenue
Services 6 857 - 3 616 -
Derivative financial
liabilities 466 - - -
Borrowings 93 842 - 1 196 -
Loans from subsidiaries - 61 921 (61 921)
Provisions 11 763 - 19 727
Total liabilities 571 775 - 150 772 (61 921)
Total equity and liabilities 922 006 179 920 203 945 (115 094)
Shares in issue (000) 100 434 30 000 - -
Net asset value per share
(cents) 348.7 - - -
Net tangible asset value
per share (cents) 68.8 - - -
Disposal6
Pro forma
Before the CI CI
Merger5 OmniBridge Datatrak Development
R000 R000 R000 R000
ASSETS
Non-current assets 608 684 (59 183) (90 279) (131)
Property, plant and
equipment 243 570 (36 680) (13 822) -
Goodwill 71 660 (2 338) - -
Intangible assets 274 019 (20 165) (64 560) -
Investment in joint
ventures 2 178 - - -
Financial assets 6 794 - (6 794) -
Non-current
receivables 366 - - -
Deferred tax assets 10 097 - (5 103) (131)
Current assets 582 093 (78 862) (113 666) (20 790)
Inventory 206 487 (17 560) (29 831) -
Trade and other
receivables 277 507 (31 059) (64 619) (4 251)
Loans to subsidiaries - (19 621) - (6 889)
South African Revenue
Services 5 675 - - -
Cash and cash
equivalents 92 424 (10 622) (19 216) (9 650)
Total assets 1 190 777 (138 045) (203 945) (20 921)
EQUITY
Capital and reserves 530 151 (8 206) (53 173) (15 146)
Share capital 6 972 (740) - (1 000)
Share premium 399 566 - - -
Treasury shares (10 282) - (51 715) -
Fair value and other
reserves 17 933 (33 055) 306 (1 593)
Retained earnings 115 962 25 589 (1 764) (12 553)
LIABILITIES
Non-current
liabilities 321 420 (26 002) (17 321) -
Borrowings 224 155 (22 456) (2 391) -
Retirement benefit
obligations 600 - -
Deferred tax liability 81 169 (3 546) - -
Provisions 15 496 (14 930) -
Current liabilities 339 206 (103 837) (133 451) (5 775)
Trade and other
payables 201 739 (21 755) (46 991) (1 328)
South African Revenue
Services 10 473 (1 495) (3 616) (699)
Derivative financial
liabilities 466 - - -
Borrowings 95 038 (63 867) (1 196) -
Loans from
subsidiaries - (13 279) (61 921) (3 748)
Provisions 31 490 (3 441) (19 727) -
Total liabilities 660 626 (129 839) (150 772) (5 775)
Total equity and
liabilities 1 190 777 (138 045) (203 945) (20 921)
Shares in issue (000) 130 434 - - -
Net asset value per
share (cents) 406.5 - - -
Net tangible asset
value
per share (cents) 141.4 - - -
Pro forma
Consideration/ Before Unbundling/ Pro forma
Consolidation unbundling7 Sale8 After9
R000 R000 R000 R000
ASSETS
Non-current assets 658 717 1 117 808 (65 5 556) 462 252
Property, plant and
equipment - 193 068 - 193 068
Goodwill - 69 322 - 69 322
Intangible assets 3 161 192 455 - 192 455
Investment in joint
ventures - 2 178 - 2 178
Financial assets 655 556 655 556 (655 556) -
Non-current receivables - 366 - 366
Deferred tax assets - 4 863 - 4 863
Current assets 45 975 414 750 - 414 750
Inventory 2 438 161 534 - 161 534
Trade and other
receivables 17 027 194 605 - 194 605
Loans to subsidiaries 26 510 - - -
South African Revenue
Services - 5 675 - 5 675
Cash and cash equivalents - 52 936 - 52 936
Total assets 704 692 1 532 558 (655 556) 877 002
EQUITY
Capital and reserves 623 045 1 076 671 (576 304) 500 367
Share capital 1 740 6 972 - 6 972
Share premium - 399 566 - 399 566
Treasury shares 51 715 (10 282) - (10 282)
Fair value and other
reserves 34 342 17 933 - 17 933
Retained earnings 535 248 662 482 (576 304) 86 178
LIABILITIES
Non-current liabilities (28 949) 249 148 (84 252) 164 896
Borrowings (28 949) 170 359 (84 252) 86 107
Retirement benefit
obligations - 600 - 600
Deferred tax liability - 77 623 - 77 623
Provisions - 566 - 566
Current liabilities 110 596 206 739 5 000 211 739
Trade and other payables 26 510 158 175 - 158 175
South African Revenue
Services 5 138 9 801 5 000 14 801
Derivative financial
liabilities - 466 - 466
Borrowings - 29 975 - 29 975
Loans from subsidiaries 78 948 - - -
Provisions - 8 322 - 8 322
Total liabilities 81 647 455 887 (79 252) 376 635
Total equity and
liabilities 704 692 1 532 558 (655 556) 877 002
Shares in issue (000) - 130 434 - 130 434
Net asset value per
share (cents) - 825 - 383.6
Net tangible asset value
per share (cents) - 625 - 182.9
Notes:
1. Extracted from the annual financial statements of Control Instruments at
31 December 2006.
2. Represents the issue of shares for cash during May 2007, which issue was
concluded to fund, inter alia, the consideration for the acquisition of
Datatrak.
3. Extracted from the reviewed management accounts of the Datatrak business at
31 July 2007.
4. Represents effect of consideration on acquisition of the Datatrak business
and consolidation adjustments.
5. Represents the pro forma balance sheet of Control Instruments before the
disposal of the Control Instruments` fleet and vehicle management businesses
to TeliMatrix.
6. Represents the disposal of the Control Instruments` fleet and vehicle
management businesses to TeliMatrix, as follows:
- CI OmniBridge extracted from report of historical financial information on
CI OmniBridge for the year ended 31 December 2006, presented in Appendix 1.1 to
the circular;
- Datatrak business extracted from the reviewed management accounts of Control
Instruments OmniBridge Limited ("OmniBridge UK"), a wholly-owned subsidiary of
OmniBridge Cyprus, at 31 July 2007;
- Control Instruments Development (Proprietary) Limited ("CI Development")
extracted from report of historical financial information on CI Development for
the year ended 31 December 2006, presented in Appendix 1.3 to the circular;
- debt is raised within CI OmniBridge to a net debt position on disposal of
R95 million;
- Control Instruments` 50% interest in the merged entity after its acquisition
of Control Instruments` fleet and vehicle management businesses from Control
Instruments is recorded as an asset held for sale, at an assumed value of
R655 556 000. The value of the transaction will be determined on the effective
date and may differ from that presented in these pro forma financial effects;
and
- The cash received on the net debt raised within CI OmniBridge and paid as a
dividend to Control Instruments is utilised to settle interest bearing debt at
an average after-tax interest rate of 8.5% per annum.
7. Represents the pro forma balance sheet of Control Instruments after the
transaction with TeliMatrix and before the proposed unbundling of shares in
TeliMatrix.
8. Represents the effect of the unbundling of 278 874 000 shares in TeliMatrix
at an assumed value of R2.05 per share and the disposal of 41 126 000 shares in
TeliMatrix at R2.05 per share. Capital gains tax arising on the disposal of
shares is based on the assumed value of R2.05 per share.
9. Represents the pro forma balance sheet of Control Instruments, after the
unbundling.
Unaudited Pro forma income statement
Acquisitions
Pro forma
Before the
Before1 Datatrak2 Merger3
R000 R000 R000
Revenue 772 155 151 609 923 764
Cost of sales (511 470) (42 736) (554 206)
Gross profit 260 685 108 873 369 558
Other operating income 86 113 4 565 90 678
Other operating expenses (96 327) (58 085) (154 412)
Administrative expenses (127 329) (30 999) (158 328)
Marketing and selling costs (41 779) (20 465) (62 244)
Operating profit 81 363 3 889 85 252
Profit from discontinued operation - - -
Interest received 10 475 677 11 152
Interest paid (29 973) - (29 973)
Net profit from joint ventures 1 939 - 1 939
Profit before taxation 63 804 4 566 68 370
Taxation (7 085) (4 345) (11 430)
Net profit for period 56 719 221 56 940
Reconciliation of headline earnings:
Net profit 56 719 219 56 938
Profit on sale of property, plant
and equipment (1 227) - (1 227)
Negative goodwill on acquisitions (59 539) (1 881) (61 420)
Impairment of available-for-sale
financial assets 3 208 - 3 208
Impairment of development costs 282 - 282
Headline loss (557) (1 660) (2 217)
Number of shares in issue (000) 93 247 - 123 247
Earnings per share (cents) 60.8 - 46.2
Headline loss per share (cents) (0.6) - (1.8)
Disposal4
CI CI Consideration/
OmniBridge Datatrak Development Consolidation5
R000 R000 R000 R000
Revenue (139 571) (151 609) (11 593) 58 278
Cost of sales 66 224 42 736 8 291 (49 907)
Gross profit (73 347) (108 873) (3 302) 8 371
Other operating income (4 977) (4 565) (386) -
Other operating expenses - 58 085 - -
Administrative expenses 45 457 30 999 235 (6 314)
Marketing and selling
costs 4 633 20 465 -
Operating profit (28 234) (3 889) (3 453) 2 057
Profit from discontinued
operation - - - 551 657
Interest received (930) (677) - -
Interest paid 2 979 - 63 3 474
Net profit from joint
ventures - - - -
Profit before taxation (26 185) (4 566) (3 390) 557 188
Taxation 7 838 4 345 1 156 (6 145)
Net profit for period (18 347) (221) (2 234) 551 042
Reconciliation of
headline earnings:
Net profit (18 347) (221) (2 234) 551 042
Profit on sale of
property, plant and
equipment 16 - - (551 657)
Negative goodwill on
acquisitions - 1 881 - -
Impairment of
available-for-sale financial
assets - - - -
Impairment of
development costs - - - -
Headline loss (18 331) 1 660 (2 234) (615)
Number of shares in
issue (000) - - - -
Earnings per share
(cents) - - - -
Headline loss per share
(cents) - - - -
Pro forma
Before Unbundling/ Pro forma
unbundling6 Sale7 After8
R000 R000 R000
Revenue 679 269 - 679 269
Cost of sales (486 862) - (486 862)
Gross profit 192 407 - 192 407
Other operating income 80 750 - 80 750
Other operating expenses (96 327) - (96 327)
Administrative expenses (87 951) - (87 951)
Marketing and selling costs (37 146) (37 146)
Operating profit 51 733 - 51 733
Profit from discontinued operation 551 657 - 551 657
Interest received 9 545 - 9 545
Interest paid (23 457) - (23 457)
Net profit from joint ventures 1 939 - 1 939
Profit before taxation 591 417 - 591 417
Taxation (4 236) (5 000) (9 236)
Net profit for period 587 181 (5 000) 582 181
Reconciliation of headline
earnings:
Net profit 587 181 (5 000) 582 181
Profit on sale of property, plant
and equipment (552 868) - (552 868)
Negative goodwill on acquisitions (59 539) - (59 539)
Impairment of available -for-sale
financial assets 3 208 - 3 208
Impairment of development costs 282 - 282
Headline loss (21 736) (5 000) (26 736)
Number of shares in issue (000) 123 247 - 123 247
Earnings per share (cents) 476.4 - 472.4
Headline loss per share (cents) (17.6) - (21.7)
Notes:
1. Extracted from the annual financial statements of Control Instruments for
the year ended 31 December 2006.
2. Based on the annualised reviewed results of the Datatrak business for the
two months ended 31 July 2007. The purchase consideration for Datatrak was
settled in cash raised through the issue of shares in May 2007 (Refer Note 2 to
pro forma balance sheet above).
3. Represents pro forma income statement of Control Instruments before the
disposal of the Control Instruments fleet and vehicle management businesses to
TeliMatrix.
4. Represents the disposal of the Control Instruments` fleet and vehicle
management businesses to TeliMatrix, as follows:
- CI OmniBridge extracted from report of historical financial information of
CI OmniBridge for the year ended 31 December 2006, presented in Appendix 1.1 to
the circular;
- Datatrak represents the annualised results of the Datatrak business extracted
from the reviewed results of OmniBridge UK for the two months ended 31 July
2007; and
- CI Development extracted from report of historical financial information on
CI Development for the year ended 31 December 2006, presented in Appendix 1.3
to the circular.
5. Represents:
- consolidation adjustments;
- profit on disposal of the Control Instruments` fleet and vehicle management
businesses based on an assumed value of R655 556 000. The actual profit on
disposal will be determined on the effective date of the transaction;
- reversal of interest on the additional debt to be sold with the Control
Instruments` fleet and vehicle management businesses in order to meet the
agreed net debt of R95 million.
6. Represents the pro forma income statement of Control Instruments, after the
transaction with TeliMatrix.
7. Represents capital gains tax arising on the disposal of TeliMatrix shares at
an assumed value of R2.05 per share. Actual capital gains tax will be
determined on the effective date of the sale of the shares.
8. Represents the pro forma income statement of Control Instruments, after the
unbundling.
Transactional sponsor
PRICEWATERHOUSECOOPERS
PricewaterhouseCoopers Inc
Corporate Finance (Pty) Ltd
(Registration number 1970/003711/07)
Independent adviser
ERNST & YOUNG
Advisory Services Ltd
(Registration number 2006/018260/06)
Legal advisers
JAN S. DE VILLIERS
ATTORNEYS
Auditors
PRICEWATERHOUSECOOPERS
PricewaterhouseCoopers Inc
Chartered Accountants (SA)
Registered Accountants and Auditors
Registration no 1998/012055/21)
Sponsor
Investec
Bank Limited
Investec Bank Limited
(Registration number 1969/004763/06)
Independent reporting accountants
PRICEWATERHOUSECOOPERS
PricewaterhouseCoopers
Advisory Services (Pty) Ltd
(Registration number 1999/024417/07)
Date: 21/09/2007 13:34:26 Produced by the JSE SENS Department.
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