| Fri 25 Apr 2008, 15:51 | | ICC - ICC - Reviewed abridged provisional results |
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ICC
ICC
ICC - ICC - Reviewed abridged provisional results for the year ended 31 December
2007 and renewal of cautionary announcement
Industrial Credit Company Africa Holdings Limited
("ICC" or "the Company")
(Incorporated in the Republic of South Africa)
(Registration number: 1997/010950/06)
Share Code: ICC
ISIN Code: ZAE000053203
REVIEWED ABRIDGED PROVISIONAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2007 AND
RENEWAL OF CAUTIONARY ANNOUNCEMENT
BALANCE SHEET Reviewed Audited
AT 31 DECEMBER 2007 2006
R`000 R`000
ASSETS
Non current assets 53 442 107 144
Property, plant and equipment 22 481 14 869
Loans receivable - 1 246
Goodwill on acquisition - 32 000
Net investment in finance leases 30 961 59 029
Current assets 74 187 93 252
Due from related companies 19 895
Inventories - 461
Net investment in finance leases 48 745 43 700
Loans receivable 44 93
Trade and other receivables 18 416 45 842
Cash and cash equivalents 6 963 2 261
Total assets 127 629 200 396
EQUITY AND LIABILITIES
Shareholders Funds (49 667) 36 186
Share capital and premium 132 297 132 297
General risk reserve 2 620 2 620
Revaluation reserve 1 542 148
Accumulated loss (169 328) (78 548)
Foreign currency translation reserve (16 798) (20 331)
Non current liabilities 93 425 83 916
Long term loans 82 730 74 491
Deferred tax 10 695 9 425
Current liabilities 83 871 80 294
Short term borrowings 62 417 64 671
Due to related companies 2 879 1 122
Taxation 120 149
Trade and other payables 10 486 7 333
Cash and cash equivalents 7 969 7 019
Total equity and liabilities 127 629 200 396
Shares in issue at year end (`000) 116 667 116 667
Net asset value per share (cents) (49,7) 31,0
Net tangible asset value per share (49,7) 3,6
(cents)
INCOME STATEMENTS Reviewed Audited
FOR THE YEAR ENDED 31 DECEMBER 2007 2006
R`000 R`000
Revenue 21 687 36 082
Staff costs (5 750) (4 382)
Depreciation (3 239) (3 152)
Other operating expenses (85 926) (25 564)
- Impairment of loans extended to (1 457) (207)
discontinued operations
- Impairment of Goodwill (32 000) (6 388)
- Normal operating expenditure (52 470) (18 969)
Total operating expenses (94 916) (33 098)
(Loss)/profit from operating activities (73 229) 2 984
Finance costs (17 696) (17 998)
Loss before taxation (90 925) (15 014)
Taxation 145 1 264
Net loss for the year (90 780) (13 750)
Basic and diluted loss per share (cents) (77,81) (11,79)
Headline loss per share (cents) (50,38) (6,31)
Weighted average number of shares (`000) 116 667 116 667
CASH FLOW STATEMENTS Reviewed Audited
FOR THE YEAR ENDED 31 DECEMBER 2007 2006
R`000 R`000
Cash flow generated from operating 20 575 33 601
activities
Cash flow utilised in investing activities (4 840) (6 343)
Cash flow utilised in financing activities (11 281) (17 270)
Net movement in cash and cash equivalents 4 454 9 988
Cash and cash equivalents at beginning of (4 758) (15 968)
year
Foreign exchange movements on cash and cash (702) 1 222
equivalents
Cash and cash equivalents at end of year (1 006) (4 758)
(net)
STATEMENT OF CHANGES IN EQUITY
Foreign
Share Share trans- General Reva Acc Total
Capital Premium lation reserves -luation Loss
reserve reserve
R`000 R`000 R`000 R`000 R`000 R`000 R`000
Balance 11 667 120 630 (18 603) 2 620 - (65 576) 50 738
at 1
January
2006
Net loss - - - - - (13 750) (13 750)
for the
year
Foreign - - (1 728) - - - (1 728)
currency
translati
on
reserve
Revaluati - - - - 1 091 - 1 091
on of
buildings
Transfer - - - - (778) 778 -
to
accumula
-ted loss
Deferred - - - - (165) - (165)
tax
movement
on reva
-luation
reserve
Balance 11 667 120 630 (20 331) 2 620 148 (78 548) 36 186
at 31
December
2006
Net loss - - - - - (90 780) (90 780)
for the
year
Foreign - - 3 533 - - - 3 533
currency
trans-
lation
reserve
Reva`luat - - - - 1 394 - 1 394
ion of
buildings
Balance 11 667 120 630 (16 798) 2 620 1 542 (169 (30 707)
at 31 328)
December
2007
COMMENTS
The Board of Directors presents the reviewed provisional financial results for
the Group for the year ended 31 December 2007 which have been prepared in
accordance with IAS34: Interim Financial Reporting.
NATURE OF THE BUSINESS
The primary business of the Group is the financing of secured structured leases
to clients. Industrial Credit Company Africa Holdings Limited, is the holding
company of Industrial Credit Company Zambia "ICC Zambia", which in turn owns all
the shares in Industrial Credit Company South Africa (Proprietary) Limited "ICC
South Africa".
BUSINESS REVIEW
The Group focus during 2007 was to maintain leasing products and markets, and to
further develop and expand its product line in respect of operating leases.
The South African Rand weakened against the US Dollar during the period under
review and has traded in a broad band between R6,42 and R7,59. The fluctuation
is largely due to the instability of the US Dollar. The stability of the Rand
is important for shareholders to draw comparatives as the major trading currency
of the Group is US Dollars and Zambian Kwacha, before translation of the figures
into South African Rand.
ICC South Africa`s contribution towards Group revenues remains immaterial.
FINANCIAL REVIEW
ICC reported a net loss for the year of R90,78 million, which incorporates the
following:
Revenue decreased by 39% from the prior year, due to the company focusing on
improving its cash flow and re-negotiating its borrowings, thus few new finance
leases were written during the year. However the revenue attributable to
operating leases increased by 31% resulting from assets purchased during the
year. The revenue from operating leases contributed 33% towards the total
revenue of ICC Zambia, compared to 19% in the prior year.
The carrying value of goodwill arising upon consolidation of ICC Zambia, was
totally impaired due to the large losses incurred in ICC Zambia.
A large increase was required in the provision for doubtful debts of ICC Zambia
(equivalent to R36,6 million), due to a very conservative approach to the
provisioning policy to incorporate suspended leases.
Finance costs remained consistent with the previous year.
Normal operating expenditure can be further analysed as follows:
Reviewed Audited
2007 2006
R`000 R`000
Provision for bad and 36 678 8 270
doubtful debts
Foreign exchange loss 3 800 16
Other operating 11 992 10 683
expenditure
Total normal operating 52 470 18 969
expenditure
The other operating expenditure increased by 12,25% which is considered
reasonable. This excludes the exceptional provision for bad and doubtful debts
and foreign exchange loss.
The high foreign exchange loss was due to the leases being raised in US Dollars,
which depreciated against the Zambian Kwacha during the year, resulting in a
loss upon conversion to Zambian Kwacha.
Property, plant & equipment increased during the year due to net additions of
R7,2 million. This was required to expand the operating lease product line.
ICC Zambia`s leasehold buildings were revalued by Anderson & Anderson,
independent registered valuation surveyors, on 15 October 2007 on the basis of
open market values for existing use. This resulted in a revaluation surplus of
R1,394 million.
The decrease in loans receivable resulted from the impairment of loan due by a
related company. The large decrease in net investment in finance leases, and
increase in lease debtors resulted from few new leases being written during
2007, as well as the exceptional provision for doubtful debts. In addition to
this, the appreciation of the Zambian Kwacha against the US Dollar had a
negative effect on the lease book during the year.
Borrowings increased during the year as a result of the renegotiation of loans
and lines of credit.
Foreign translation reserves decreased by a R3,5 million profit as a result of
the exchange rate fluctuations.
HEADLINE EARNINGS PER SHARE
The calculation of headline earnings per share is based on a loss of R58,780
million (2006: R7,362 million), and a weighted average of 116 666 753 shares.
2007 2006
R`000 R`000
Reconciliation of headline
loss:
Net loss for the year (90 780) (13 750)
Adjusted for:
Impairment of Goodwill 32 000 6 388
Headline loss (58 780) (7 362)
BASIS OF PREPARATION OF THE REVIEWED RESULTS
Statement of Compliance
The provisional financial statements comprise a consolidated balance sheet at 31
December 2007, a consolidated income statement, consolidated statement of
changes in equity and summarized consolidated cash flow statement for the year
ended 31 December 2007. The provisional financial statements have been prepared
in accordance with the recognition and measurement criteria of International
Financial Reporting Standards ("IFRS") and the presentation and disclosure
requirements of IAS34, Interim Financial Reporting, JSE Listings Requirements
and the South African Companies Act.
The accounting policies applied for the year are consistent with those of the
previous year.
The provisional financial statements were approved by the board on 25 April
2008.
Basis of measurement
The provisional financial statements have been prepared on the historical cost
basis.
AUDIT OPINION
The provisional results have been reviewed by the company`s auditors Van Dyk &
Associates. The review opinion is available for inspection at the company`s
registered office.
CORPORATE GOVERNANCE
The group subscribes to the principles of, and where possible, the
recommendations of the King II code on Corporate Governance.
DIVIDENDS
No dividends will be paid for the foreseeable future.
SUBSEQUENT EVENTS AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement dated 17 March 2008 in
which shareholders were advised that an offer has been received and accepted by
the board of directors of ICC from Vehicle Finance Limited, a Zambian registered
company, for the purchase of 100% of the shares in Zambia. If successfully
concluded it may have a material effect on the price of the company`s
securities. Accordingly, shareholders are advised to exercise caution when
dealing in the company`s securities until a full announcement is made.
For and on behalf of the board of directors
N. Justin Chinyanta
Chairman
25 April 2008
Registered office: 2nd Floor, East Wing, 11 Alice Lane, Sandton
Transfer secretaries: Computershare Investor Services (Pty) Limited, Ground
Floor, 70 Marshall Street, Johannesburg
Sponsor: Arcay Moela Sponsors (Pty) Ltd, Number 3 Anerley Road, Parktown,
Johannesburg
Directors: J Chinyanta*, Y Bazian, CM Van Nieuwkerk, A Fletcher*, A Karrim*, N
Molver*
*Non-executive
Date: 25/04/2008 15:51:01 Produced by the JSE SENS Department.
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