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ABO
ABO
ABO - Absolute Holdings - Audited Results For The Year Ended 30
June 2007
ABSOLUTE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
Share code: ABO ISIN: ZAE000062998
("Absolute" or "the company")
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2007
GROUP BALANCE SHEETS 30 June 2007 30 June 2006
R R
Assets
Non-current assets 16 245 297 16 693 304
Property, equipment and 480 745 1 100 623
vehicles
Mineral rights 9 717 241 9 545 370
Goodwill 6 047 311 6 047 311
Current assets 4 630 845 9 820 713
Inventory 3 327 286 6 677 637
Cash and cash equivalents 238 013 229 788
Trade and other receivables 958 638 2 809 359
Short term receivables 106 908 103 929
Assets held for sale 3 710 000 3 780 000
Total assets 24 586 142 30 294 017
Equity and liabilities
Capital and reserves 4 816 845 10 811 839
Share capital 7 397 083 7 397 083
Share premium 77 985 319 77 985 319
Accumulated loss (80 565 557) (74 570 563)
Non-current liabilities 6 216 648 2 121 738
Long-term liabilities 6 201 895 2 106 985
Deferred taxation 14 753 14 753
Current liabilities 9 954 690 14 009 818
Trade and other payables 4 908 138 9 433 846
Short-term loans 32 508 101 431
Taxation 4 600 4 600
Bank overdraft 5 009 444 4 469 941
Liabilities associated with 3 597 959 3 350 622
assets held for sale
Total equity and liabilities 24 586 142 30 294 017
Net asset value per share
information:
Net asset value per share 0.65 1.46
(cents)
Net tangible asset value per (1.48) (0.64)
share (cents)
Shares in issue at year end 739 708 208 739 708 208
GROUP INCOME STATEMENTS 30 June 2007 30 June 2006
R R
Revenue 13 934 382 24 954 937
Cost of sales (9 550 659) (14 985 310)
Gross Profit 4 383 723 9 969 627
Other income 621 450 -
Selling and (8 525 662) (10 074 013)
administrative expenses
Net operating loss (3 520 489) (104 386)
Impairment loss of Non- (70 000) (320 000)
current assets held for
sale
Recovery of losses on - 38 913
sale of subsidiaries
Loss from operations (3 590 489) (385 473)
Finance charges (1 427 135) (919 124)
Interest income 27 942 8 616
(4 989 682) (1 295 981)
Loss before taxation
Taxation - (418 076)
Net loss for the year (4 989 682) (1 714 057)
from continuing
operations
Discontinued operations
Net loss for the year (1 005 312) (427 041)
from discontinued
operations
Net loss for the year (5 994 994) (2 141 098)
Reconciliation between
Net Loss and Headline
Loss
Net loss for the year (5 994 994) (2 141 098)
Recovery of losses on - (38 913)
sale of subsidiary 70 000 320 000
Decrease in the value of 215 040 14 132
investment property
Loss on disposal of
fixed assets
Headline Loss (5 709 954) (1 845 879)
Earnings per share
information:
Loss per share (cents) (0.81) (0.29)
Headline loss per share (0.77) (0.25)
(cents)
Weighted average shares 739 708 208 739 708 208
in issue
GROUP STATEMENT OF CHANGES IN EQUITY
Share Share Total
capital premium Accumulated
loss
R R R R
Balance at 7 397 083 77 985 319 (72 429 465) 12 952 937
1 July
2005
Net loss - - (2 141 098) (2 141 098)
for the
year
Balance at 7 397 083 77 985 319 (74 570 563) 10 811 839
30 June
2006
Net loss - - (5 994 994) (5 994 994)
for the
year
(80 565 557)
Balance at
30 June
2007 7 397 083 77 985 319 4 816 845
GROUP CASH FLOW STATEMENTS 30 June 2007 30 June 2006
R R
Net cash (outflow)/inflow (4 717 471) 14 275
from operating activities
Net cash (outflow)/ inflow (84 152) 587 367
from investing activities
Net cash inflow/(outflow) 4 270 346 (401 820)
from financing activities
Net (decrease)/ increase in (531 277) 199 822
cash and cash equivalents
Cash and cash equivalents at (4 240 153) (4 439 975)
beginning of year
Cash and cash equivalents at (4 771 430) (4 240 153)
end of year
COMMENTARY
The directors present the abridged audited results for the year
ended 30 June 2007. The results have been audited by TAG
Incorporated whose audit report is available for inspection at the
registered office of the company. The accounting policies adopted
for purposes of this report comply with, and have been
consistently applied in all material respects in accordance with
International Financial Reporting Standards.
RESULTS
Absolute Tiles (Proprietary) Limited ("Absolute Tiles")
Of the group`s operating loss for the year of approximately R3,5m,
half can be attributed to the losses incurred at the retail
outlets as a result of the reduced level of activity in the latter
half of the year. In accordance with the directors stated intent
of obtaining the necessary specialist retail skills, the company
concluded a management and supply agreement with Union Tiles, a
well established national retailer, which was implemented
subsequent to the year end. In terms of the agreement, Union Tiles
shall exclusively manage and supply the retail outlets in Pretoria
and Fourways. The Cape Town branch was closed earlier this year,
resulting in the losses from discontinued operations of R1m. Union
Tiles have further secured an option for 12 months to acquire a
50% equity stake in Absolute Tiles. The directors are particularly
pleased at Union Tiles` approach in continuing the Absolute brand
in the premium sector of the market. The revenue in the first full
month after the implementation of the agreement suggests that
operations are slowly returning to previous levels with the
potential for further growth. The integration of procurement and
sales functions with those of Union Tiles has also resulted in
cost savings for the company.
Group Restructure
With effect from 30 June 2007, the group restructured its retail
and mining assets so as to accurately reflect the group`s two
areas of operations. Absolute Tiles sold its holding in The
Absolute Colleccions (Pty) Ltd (to be renamed "Lenopodi") to
Absolute Holdings Ltd on loan account. Refer to press announcement
for a summary of the new structure.
Lenopodi (Proprietary) Limited
Preparatory mining activities have commenced at Lekkersing, (held
90% by Lenopodi through Lubtalk), involving inter alia the
rehabilitation of the quarry mining areas and beneficiation
factory, the employment of staff and contractors and the
finalisation of agreements with the local authorities. As
previously announced, mining rights for Lekkersing were recently
formally received. Revenues should accrue before the end of the
calendar year with full scale mining activities to commence in
January 2008.
The remaining 10% of Lubtalk is held by Richtersveld Ontwikkelings
Maatskappy Beperk, a company representing over 2,000 residents of
the Richtersveld Community in Namaqualand.
RIGHTS OFFER
Shareholders are reminded of the announcement released on SENS on
1 August 2007 where it was indicated that it is the intention of
the company to raise capital by way of a renounceable rights offer
of new Absolute shares to shareholders on the basis of a
subscription price of 6 cents per rights offer share, in the ratio
of one rights offer share for every 3 Absolute shares held. The
proceeds of the rights offer are to be applied to the initial
mining activities, the retirement of long term debt as well as the
provision of working capital for the group. Calulo Resources (Pty)
Ltd ("Calulo Resources"), being the principal BEE shareholder of
the company, intends to fully underwrite the rights offer in order
to guarantee its success, on the condition that, at the upcoming
Annual General Meeting to be held on Wednesday 7 November 2007,
eligible shareholders approve a waiver from making a mandatory
offer to minority shareholders in accordance with Section 8.7 of
the Securities Regulation Code, in the event of Calulo Resources`
shareholding increasing to over 35% of the company`s share capital
as a result of the underwriting of the rights offer. Calulo
Resources believes that it is in the company`s interest to ensure
that any new funding be provided directly to the company to
restore its liquidity and fund its turnaround. An offer to
minorities would be an unintended consequence of Calulo Resources`
support of the company and failing the granting of the waiver,
Calulo Resources would have to reconsider the full underwriting of
the rights offer. Shareholders will be advised of the salient
dates of the rights offer and the circular shall be posted to
shareholders in due course.
SUBSEQUENT EVENTS
Other than the conclusion of the management agreement referred to
above, there have been no significant events after the period end.
The proceeds on the disposal of the asset held for sale, namely
Stand 315, have been received subsequent to year end.
DIVIDENDS PAID AND RECOMMENDED
No dividends were paid or declared during the accounting period
under review and none are recommended at this stage (2006: nil).
SHARE CAPITAL
There have been no shares issues during the period under review.
DIRECTORS
There were no changes to the board during the period.
By order of the board
M Diale AM Sher
4 October 2007
Company Secretary and Registered Office
Arcay Client Support (Pty) Ltd
(Registration number 1998/025284/07)
Arcay House, Number 3 Anerley Road, Parktown, Johannesburg (PO Box
62397, Marshalltown, 2107)
Directors
MK Diale* Chairman
AM Sher* Deputy Chairman
JJ Serfontein*
GP Sequeira
* Non-executive)
Sponsor Transfer Office
Arcay Moela Sponsors Computershare Investor Services 2004
(Proprietary) Limited (Pty) Ltd
Date: 04/10/2007 16:36:14 Produced by the JSE SENS Department.
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employees and agents accept no liability for (or in respect of) any direct,
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howsoever arising, from the use of SENS or the use of, or reliance on,
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