| Fri 28 Sep 2007, 17:00 | | STA - Stratcorp - Reviewed abridged consolidated i |
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STA
STA
STA - Stratcorp - Reviewed abridged consolidated interim financial results
STRATCORP LIMITED
(Registration number 2000/031842/06)
(Incorporated in the Republic of South Africa)
Share Code: STA & ISIN: ZAE000034294
("StratCorp" or "the Company" or "the Group")
REVIEWED ABRIDGED CONSOLIDATED INTERIM FINANCIAL RESULTS
for the six months ended 31 August 2007
Revenue UP R22.2 million to R42.5 million
Operating profit UP R10.9 million to R15.3 million
Headline earnings per share UP 212%
Client Base UP 86%
Net asset value per share UP 135%
Income Statements
Six months Six months Year
ended ended ended
31 August 31 August 28 February
2007 2006 2007
(reviewed) (reviewed) (audited)
Figures in R thousand restated
Revenue 42 479 20 251 50 192
Profit from operations 15 332 4 411 19 271
Other income 253 7 137
Fair value adjustments (27) (5)* 2 636
Net interest 462 395 738
Profit before taxation 16 020 4 808* 22 782
Taxation 4 624 1 383* 5 251
Net profit for the period 11 396 3 425* 17 531
Attributable to:
- Minority shareholders - - -
- StratCorp equity holders 11 396 3 425* 17 532
11 396 3 425* 17 532
Weighted average number of:
Ordinary shares in issue (`000) 111 761 102 348# 103 425
Treasury shares in issue (`000) (3 932) (1 356)@ (1 641)
Total weighted average number of
shares in issue (`000) 107 829 100 992@ 101 784
Basic earnings per share (cents) 10.57 3.39*@ 17.22
Headline earnings per share
(cents) 10.57 3.39*@ 17.22
Dividend per share (cents) - - -
Reconciliation between earnings
and headline earnings
Basic earnings 11 396 3 425 17 532
Non-recurring adjustments
(net of tax)
Adjustments net of tax - - -
Headline earnings 11 396 3 425 17 532
* Restated due to change in accounting policy - refer comments
@ Restated - shares held by Management Performance Trust incorrectly shown as
treasury shares
# Restated - share buy back WANOS correction
Statements of Changes in Equity
Share Ordinary
Share repurchase Retained shareholders`
Figures in R thousand capital reserve earnings equity
Balance at 28
February 2006 12 805 3 033 (197)* 15 641
Issue of share capital 4 987 (3 033) - 1 954
Treasury shares (27) - - (27)
Attributable earnings - - 3 425* 3 425
Balance at
31 August 2006 17 765 - 3 228* 20 993
Treasury shares (541) - - (541)
Attributable earnings - - 14 106 14 106
Balance at 28
February 2007 17 224 - 17 334 34 558
Issue of share capital 11 981 - - 11 981
Treasury shares (2 359) - - (2 359)
Attributable earnings - - 11 396 11 396
Balance at 31 August
2007 26 846 - 28 730 55 576
*Change in accounting policy - refer note
Cash Flow Statements
Six months Six months Year
ended ended ended
31 August 31 August 28 February
2007 2006 2007
Figures in R thousand (reviewed) (reviewed) (audited)
Cash flows - operating activities 2 503 (7 887) (737)
Net finance income 474 395 760
Taxation paid (5 915) (156) (156)
Cash flow from investing
activities (15 909) 858 533
Cash acquired through business
combinations - 5 594 5 594
Cash flow from financing
activities 13 573 3 081 3 207
Net cash flow for period (5 274) 1 885 9 201
Cash and cash equivalents at
beginning of period 11 641 2 440 2 440
Cash and cash equivalents at end
of period 6 367 4 325 11 641
Balance Sheets
Six months Six months Year
ended ended ended
31 August 31 August 28 February
2007 2006 2007
(reviewed) (reviewed) (audited)
Figures in R thousand restated
Non-current assets 21 526 4 773 7 162
Property, plant and equipment 6 021 1 028 1 446
Goodwill 3 532 1 318 3 532
Intangible assets 1 308 1 440 1 455
Investments and loans 9 798 818 -
Deferred tax assets 867 169 729
Current assets 61 684 34 200* 51 260
Investments and loans 12 488 8 388* 11 530
Construction contracts 20 010 8 797 13 578
Inventories 825 210 323
Trade and other receivables 21 276 12 480 14 188
Current tax receivable 717 - -
Cash and cash equivalents 6 367 4 325 11 641
Total assets 83 210 38 973 58 422
Capital and reserves 55 576 20 993 34 558
Issued capital 26 846 17 765 17 224
Distributable reserves 28 730 3 228 17 334
Non-current liabilities 17 105 11 446 13 330
Compound instruments 10 139 10 139 10 139
Term loans 1 017 - -
Finance leases 2 806 213 156
Deferred tax liabilities 3 143 1 094* 3 035
Current liabilities 10 529 6 534 10 534
Compound instruments 1 130 1 130 371
Trade and other payables 7 486 4 178 8 002
Finance leases 333 - 38
Taxation 1 580 1 226 2 123
Total equity and liabilities 83 210 38 973 58 422
Ordinary shares in issue (`000) 123 005 104 601@ 104 601
Treasury shares in issue (`000) (6 097) (1 437) (2 605)
Total number of shares in issue 116 908 103 164@ 101 996
Net asset value per share (cents) 47 20* 34
Net tangible asset value per
share (cents) 43 18* 29
@ Restated - share buy back - 89 076 shares correction
* Change in accounting policy - refer note
Comments on results
The board is satisfied with the financial performance achieved during the
interim period. Historically, the group`s financial performance has always been
better in the second half of the financial year and this year should be no
different. In essence, the group should achieve its forecast for the full year
as published during July 2007.
Wholly owned subsidiaries
StratEquity (Pty) Ltd
StratEquity`s subscription client base has increased from 28 808 to 53 595
(86%) over the reporting period. The monthly premium has increased from R4.998
million to R7.969 million (59.44%).
ICI Marketing (Pty) Ltd
ICI is the marketing company for StratEquity`s products. This subsidiary is
continuing to expand its business model across the country and neighbouring
countries and is directly responsible for StratEquity`s growth in client base.
Other consumer products have been added to the product range of the company
that should result in higher revenues and profitability.
Citadin Holdings Ltd ("Citadin")
Citadin is a residential property development group and concentrates its
activities in the lower to middle end of the buyers` market. Citadin is
currently engaged in various property development projects totalling a sale
value of approximately R320 million until 2010.
Other land and development opportunities have been identified to ensure
continuity in the operations of Citadin and its subsidiaries beyond 2010.
Prospects
Traditionally the operations from StratEquity and ICI Marketing perform much
better in the second half of the year. The bulk of Citadin`s forecast will also
realise over the next six months. The group should post excellent results by
year-end.
Financial Results
The consolidated turnover of the group increased by 110% to R42.479 million
over the reporting period (August 2006: R20.251 million). The total
consolidated profits after tax for the reporting period increased by 233% to
R11.396 million. (August 2006: *R3.425 million) (*restated due to change in
accounting policy).
Basis of preparation
The results of the Group for the six months ending 31 August 2007 have been
prepared in accordance with the Group`s accounting policies which comply with
International Financial Reporting Standards (IFRS) and IAS 34 - Interim
Financial Reporting. The standards are subject to ongoing review and may
change.
The accounting policies applied are consistent with those applied during the
comparative periods, except for the change in accounting policy below.
Change in accounting policy *
The interim group financial statements have been prepared in accordance with
International Financial Reporting Standards on a basis consistent with the
prior year except for the adoption of the following new or revised standards:
- IAS32 Financial Instruments: Disclosure and Presentation
- IAS39 Financial Instruments: Recognition and Measurement
Investments held for trading
During the year, the company changed its accounting policy with respect to the
treatment of unlisted investments held for trading. Since the company adopted
International Financial Reporting Standards, the directors used the discounted
cash flow method, IPO placement values and OTC trading prices to determine the
fair value of unlisted investments. Although the treatment was correct as per
IAS39 (Financial Instruments: Recognition and Measurement), the directors are
of the opinion that there are too many unknown variables in using the
discounted cash flow model for new venture capital companies during the first
five years of operations. The company now uses only the lower of cost or the
net asset valuation of its investments in unlisted companies as per IAS39.
The effect on the comparative results for the six months ended 31 August 2006
was as follow:
Restated Previously reported
Income Statement effects R`000 R`000
Fair value adjustments (5) 6 745
Profit before tax 4 808 11 558
Taxation 1 383 2 362
Profit after tax 3 425 9 196
Earnings per share (cents) 3.39 10.73
Balance Sheets
Investments and loans 8 388 27 937
Opening retained earnings (197) 10 740
Deferred tax liabilities 1 094 3 929
Net asset value/share (cents) 20 37
Corporate Governance
The Group is committed to maintaining the high standards of governance as
embodied in the King Report on Corporate Governance.
The report has been reviewed by the company`s auditors, PKF (Pretoria) Inc.
Their review report is available for inspection at the company`s registered
office.
Financial liabilities
In order to finance the expansion and reallocation of the company`s head office
in Centurion, the company acquired financing from ABSA Bank to the value of
R4,156 million. Undrawn facilities amount to R10 million as at 31 August 2007.
Other matters
StratCorp issued 18 403 531 shares to the StratCorp personnel incentive trust
at 65.10 cents per share in July 2007.
Dividends
It is the Group`s usual policy for dividends to be declared after the financial
year. Special dividends can be declared on an ad hoc basis. No interim
dividends have been proposed.
On behalf of the board
DB Harington (CEO)
27 September 2007
Registered Offices Transfer Secretaries
3rd Floor, Lakeside Building A Computershare Investor Services 2004
2004 Gordon Hood Drive (Pty) Ltd
Centurion Ground Floor, 70 Marshall Street
Pretoria Johannesburg, 2001
Directors: P J de Jongh* (Chairman); D B Harington (CEO); J N de Beer (CFO);
H J van der Merwe (COO); I M Wright (CIO); M M Tshishonga*
(*Non-executive)
Company Secretary: P H van Zyl
www.stratcorp.co.za
email: johan@stratcorp.co.za
Sponsor
Exchange Sponsors (Pty) Ltd
28 September 2007
Date: 28/09/2007 17:00:07 Produced by the JSE SENS Department.
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