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AFG
AFG
AFG - Afgem - Consolidated interim results for the six months ended
30 September 2007
Afgem Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/007292/06)
JSE code: AFG & ISIN: ZAE 000067757
("Afgem" or "the Company")
Consolidated interim results for the six months ended 30 September 2007
INCOME STATEMENTS
for the period ended 30 September 2007
6 months 6 months Audited
ended ended year ended
30 September 30 September 31 March
2007 2006 2007
R`000 R`000 R`000
Continuing operations
Loss with investment written - - (2,413)
off
Operating expenses (1,152) (926) (7,045)
Operating loss (1,152) (926) (9,458)
Net financing income 14 22 140
Loss before tax (1,138) (904) (9,318)
Income tax - - -
Loss for the period/year (1,138) (904) (9,318)
Discontinued operations
Loss for the period/year from
discontinued operations (1,496) (10,015) (23,325)
Loss before tax (2,634) (10,919) (32,643)
Income tax refund - - 2
Loss for the period/year (2,634) (10,919) (32,641)
Weighted average number of
shares in issue (`000) 257,622 233,968 248,161
Basic loss per share (cents) (1.02) (4.67) (13.15)
Diluted loss per share (cents) (0.79) (3.57) (10.11)
Headline loss per share (cents) (1.02) (4.67) (7.35)
BALANCE SHEET
at 30 September 2007
6 months 6 months
ended ended Audited
30 September 30 September 31 March
2007 2006 2007
R`000 R`000 R`000
Assets
Current assets
Short-term loans receivable 2,009 7,074 2,009
Trade and other receivables 11 - 47
Cash and cash equivalents 396 3,428 18
Non-current assets classified as 60,699
held for sale 86,362 60,533
Total current assets 63,115 96,864 62,607
Total assets 63,115 96,864 62,607
Equity
Ordinary share capital 3 2 3
Preference share capital 1 1 1
Share premium 43,414 43,414 43,414
Share options outstanding - 83 -
Retained (loss)/earnings (16,890) 7,466 (14,256)
Total equity 26,528 50,966 29,162
Non-current liabilities
Non interest-bearing borrowings 2,118 - 1,238
Provision for purchase price of 2,083
investment 17,975 2,083
Total non-current liabilities 4,201 17,975 3,321
Current liabilities
Short-term loans payable 1,991 28 647
Trade and other payables 3,328 4,827 3,855
Current liabilities directly 27,067
associated with non-current
assets classified as held for
sale 23,068 25,622
Total current liabilities 32,386 27,923 30,124
Total equity and liabilities 63,115 96,864 62,607
Number of ordinary shares in
issue (`000) 257,622 257,622 257,622
Net asset value per share 10.30 19.78 11.32
(cents)
CASH FLOW STATEMENTS
for the period ended 30 September 2007
6 months 6 months Audited
ended ended year
30 September 30 ended
2007 September 31 March
R`000 2006 2007
R`000 R`000
Cash utilised in operations (6,468) (923) (9,517)
Net financing income 14 22 140
Net cash utilised in operations (6,454) (901) (9,377)
Cash flows from discontinued (166) 2,725
operations 2,280
Net cash from investing
activities (166) 1,824 2,280
Proceeds from the issue of share
capital - 5,677 5,677
Increase in non interest-bearing
borrowings 880 - 1,238
Decrease in environmental
rehabilitation fund - - (883)
Increase in short-term loans 1,344 - 402
Cash flow from discontinued (3,700)
operations 1,445 122
Net cash from financing
activities 3,669 1,977 6,556
Net(decrease)/increase in cash
and cash equivalents (2,951) 2,900 (541)
Cash and cash equivalents at
beginning of period/year 4,079 1,179 1,179
Cash and cash equivalents at end
of period/year 1,128 4,079 638
STATEMENTS OF CHANGES IN EQUITY
for the period ended 30 September 2007
Total
Retained equity
Pre- Share earnings attribu-
Ordinary ference options /(accum- table
share share Share outstan- Ulated to equity
capital capital premium ding loss) holders
R`000 R`000 R`000 R`000 R`000 R`000
Balance at 1
April 2006 2 1 37,737 83 18,385 56,208
Shares issued 1 - 5,677 - - 5,678
Share based
payments - - - (83) - (83)
Loss for the
year - - - - (32,641) (32,641)
Balance at 31
March 2007 3 1 43,414 - (14,256) 29,162
Loss for the
period - - - - (2,634) (2,634)
Balance at 30
September 2007 3 1 43,414 - (16,890) 26,528
6 months 6 months Audited
ended ended year ended
30 September 30 September 31 March
2007 2006 2007
R`000 R`000 R`000
Reconciliation of earnings
to headline earnings
Loss attributable to
ordinary shareholders (2,634) (10,919) (32,641)
Impairment of intangible
assets - - 14,401
Headline loss (2,634) (10,919) (18,240)
Statement of compliance and basis of preparation
The consolidated interim financial statements have been prepared in accordance
with International Financial Reporting Standards and IAS 34 and its
interpretations adopted by the International Accounting Standards Board. These
results have not been reviewed or audited by the Company`s auditors.
Financial results
Operating expenses incurred in continuing operations comprised mainly of audit
and financial reporting costs, legal fees and salaries and wages.
The loss from discontinued operations relates to care and maintenance costs
incurred in the Simolotse mine. These costs are being funded by Meepo Investment
Consortium (Pty) Ltd ("Meepo") in terms of the sale agreement entered into
between Afgem and Meepo as announced on 4 June 2007 whereby Afgem proposed
selling its interest in Simolotse Mine (Pty) Ltd and Afgem Diamonds (Pty) Ltd to
Meepo ("Meepo transaction").
As published on 4 October 2007 the terms of the Meepo transaction were amended
to include the sale of Bokang Mine (Pty) Ltd to Meepo, without altering the
purchase price. In terms of the agreement Afgem received R2 million in cash on
31 May 2007 from Meepo. The consideration in respect of the Meepo transaction is
a cash amount of R5.3 million (less the amount advanced in May 2007 of R2
million) and Euro 2.1 million to be settled through the issue of 4.1 million
Meepo A class shares to be issued at the Rand equivalent of 50 Euro cents per
share.
Non interest bearing borrowings and short term loans payable increased due to
the funding provided to Afgem by Meepo in May 2007 and other creditors providing
unsecured credit facilities.
Loan agreement
In August 2004, Afgem entered into an agreement with Rex Mining Corporation Ltd
("Rex Mining") to lend that company R5 million. To date R3.5 million of this
loan has been repaid to Afgem. The loan was interest free and repayable on five
days notice after 2 August 2005. Rex Mining was placed on terms to repay the
outstanding balance of the loan on 24 November 2005 and from that date interest
has accrued on the loan.
Afgem has secured a judgment against Rex Mining in the High Court of South
Africa (Witwatersrand local division) for the amount of R1.5 million plus
interest from 24 November 2005. In addition, costs of the suit were also awarded
to Afgem. Rex Mining unsuccessfully appealed the judgement on two occasions,
with costs being awarded to Afgem in both instances. In November 2007 the
Sheriff of the Court attached Rex Mining`s right, title and interest in its 20
000 000 Afgem shares and Afgem is awaiting the sale in execution thereof and the
recovery of some of the debt owing to Afgem.
Corporate developments
Given the unforeseen delays in the Meepo transaction, the date for the
fulfilment of the conditions precedent to the Meepo transaction has been
extended to 31 January 2008.
Afgem is in the process of finalising a circular to shareholders to vote on the
Meepo transaction as per the JSE Limited`s Listing Requirements and the
Securities Regulation Panel`s Code. The circular will be mailed to shareholders
early in 2008 and a shareholders` meeting will be convened accordingly to vote
on the proposed transaction.
To date irrevocable letters of consent have been received from 54% of all Afgem
shareholders indicating that they will vote in favour of the Meepo transaction
at the forthcoming shareholders meeting.
For and on behalf of the board
MR Summers
Financial Director
Melrose Arch
14 December 2007
Sponsor
Macquarie First South Corporate Finance (Pty) Ltd
Date: 14/12/2007 17:30:02 Produced by the JSE SENS Department.
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