| Thu 28 Aug 2008, 8:08 | | MVG - Mvelaphanda Group - Reviewed results for the year ended 30 June 2008 |
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MVG MVGP
MVG
MVG - Mvelaphanda Group - Reviewed results for the year ended 30 June 2008
Mvelaphanda Group
(Incorporated in the Republic of South Africa)
Registration number 1995/0041553/06
("Mvela Group" or "the group")
Ordinary share code: MVG
Preference share code: MVGP
Ordinary share ISIN: ZAE000060737
Preference share ISIN: ZAE000073540
Reviewed results for the year ended 30 June 2008
Key features
Revenue in line with prior year and increased by 9% on a comparable basis
EBITDA increased by 6% to R394 million or by 18% on a comparable basis
Operating profit increased by 2% to R247 million or by 20% on a comparable basis
Operating margin in line with prior year or 7,5% on a comparable basis
Acquisition of an effective interest of 25,5% in Avusa and 12,3% in Vox Telecom
Further buyback of 26,5 million ordinary shares for a total cost of R260 million
Intrinsic net asset value per ordinary share at 30 June 2008 of R8,68 (2007:
R14,10)
Weighted return on investments of 34% since the merger
Yolanda Cuba, CEO of Mvela Group, commented: "Our results have been impacted by
the decline in market value of our investments, despite the inherent quality in
their underlying operations.
Our portfolio of investments has delivered a return of more than 34% since the
merger in 2004. We have the means and strategies in place to continue to deliver
competitive returns over the medium to long term despite short-term value
adjustments."
Enquiries:
Mvela Group 011 290-4200,
Yolanda Cuba
College Hill 011 447-3030,
Johannes van Niekerk 082 921 9110
Introduction
The year under review has been characterised by dramatic swings in the market
values of Mvela Group`s investments. This has had a negative impact on the
Group`s financial statements, for the year ended 30 June 2008.
The operational performance of the Group for the year under review was in line
with expectations, given the challenging market conditions. We are, however,
particularly proud of the progress we`ve made in streamlining our operations
under the Mvelaserve banner and the improved performance that resulted from our
back-to-basics approach.
To achieve an optimal return for shareholders, Mvela Group seeks to maintain a
balanced exposure through its investments in the following five key growth
sectors (Financial Services; Consumer Services; Construction and Infrastructure;
Non-Mining Resources and Energy; and Telecoms, Media and Technology) of the
South African economy which it believes will outperform the market in the medium
to long term.
The Board and management of Mvela Group conduct regular reviews of the capital
allocation of the Group and the strategies in place to maintain an optimal
return on the capital employed. Capital that is not required or ear-marked for
specific projects or investments is being returned to shareholders in the most
efficient way.
During the year under review we returned R383 million to shareholders through
the repurchase of Mvela Group`s own shares and dividends paid. Acquisitions were
made in the Telecoms, Media and Technology sector with the acquisition of a
25,5% interest in Avusa and a 12,3% interest in Vox Telecom in line with our
long-term investment strategy.
In the year to 30 June 2008 our intrinsic net asset value decreased to R4 034
million from R6 882 million mainly as a result of fair value adjustments in our
listed investment portfolio. Absa Group alone was down by more than R1 billion.
Valuations of our unlisted investments have also been adjusted downwards in line
with the equity market.
We are comfortable with our estimate of the intrinsic values of these
investments based on our due diligence investigations, including the examination
of growth projections and our fundamental valuations.
These short term movements in market value do not detract from our focus of
building shareholder value in the medium to long term.
We have consistently earned returns in excess of our cost of capital, currently
at 15,1%. We will adopt corrective action, including the restructuring of assets
should our targeted return on capital employed be compromised.
Market valuations have improved since year end. At the last practicable date,
being 22 August 2008, the intrinsic net asset value amounted to R9,21 per share
which is 6,1% up from 30 June 2008.
Financial review
Revenue of R3 539 million was 2% ahead of the prior year`s revenue of R3 462
million. Earnings before interest, tax, depreciation and amortisation (EBITDA)
was R394 million compared to R372 million in the prior year, an increase of 6%.
Profit from operations increased by 2% to R247 million from R242 million of the
year ended 30 June 2007.
The Group values its portfolio of investments in accordance with International
Financial Reporting Standards ("IFRS"), specifically IAS39, Financial
Instruments Measurement and Recognition. The write down of certain strategic
investments (Absa Group, Group Five and Vox Telecom) is as a result of the
decrease in share prices of between 17% and 38% on the JSE from 30 June 2007 to
30 June 2008. Accordingly, the fair value adjustment and net loss from
investments for the year ended was R1 620 million.
Net interest received was R57 million for the 2008 year (2007: R81 million). The
decline is as a result of lower cash balances following returning cash to
shareholders.
The amortised cost on the 124 425 055 redeemable option-holding shares ("BEE
shares"), issued during the previous financial year by the Group, relating to
employees, has been recognised in the income statement in accordance with AC
503, Accounting for black empowerment (BEE) transactions at R16,2 million for
the current financial year.
Tax of R190 million was credited to the Income Statement. The current tax
expense was R81 million, with a debit charge to deferred tax of R271 million.
The benefit as a result of the corporate tax rate adjustment was R20 million.
A dividend of R30 million was paid to preference shareholders during the year.
The 54,7 million convertible perpetual cumulative preference shares are
convertible at the instance of the holder into 1,05 ordinary shares for each
preference share held between 4 November 2009 and 4 November 2010 after which
date the preference shares are redeemable either at the instance of Mvela Group
or remain as perpetual preference shares. The reduction in the conversion price
of the preference shares to R9,53 per share from R10,00 per share was published
on SENS (19 December 2007) in line with the terms of the offering circular
issued to Mvela Group shareholders dated 4 November 2005.
The weighted average net number of ordinary shares in issue decreased by 5,7%
from 442 million ordinary shares at 30 June 2007 to 417 million ordinary shares
at 30 June 2008 as a result of the share buy-backs. The 474 million diluted
weighted average net numbers of ordinary shares in issue is calculated on the
basis that all the preference shares will be converted to ordinary shares on 4
November 2009.
Taking the above into account, the loss per share amounted to 368,0 cents
compared to an earnings per share of 280,2 cents in the previous year. The
headline loss per share amounted to 362,6 cents compared to headline earnings
per share of 304,8 cents in the previous year.
Investments in associates increased as a result of our investment in Avusa.
Mvela Group acquired a 25,5% interest in Avusa for R1 294 million. As Mvela
Group has significant influence in Avusa, the investment has been accounted for
as an associate.
Strategic Investments declined to R3 559 million at 30 June 2008 from R4 768
million in the previous year as a result of the downward fair value adjustments.
Vox Telecom was also acquired during the year under review.
As the transfer of shares only occurred after year end for Avusa, the associated
debt was disclosed in short-term interest bearing liabilities. Non-current
liabilities increased by R361 million to R770 million during the year mainly as
the result of debt introduced to finance the acquisition of Vox Telecom.
The Group`s cash position reduced by R481 million to R871 million at 30 June
2008. The reduction in cash is mainly due to R260 million utilised for the share
buy-backs, capital gains tax payment of R61 million in respect of the previous
year and dividends or distributions paid of R123 million.
Intrinsic net asset value
The decline in the share prices of the Group`s listed investments had a
substantial negative effect on the intrinsic net asset value per ordinary share,
which is set out net of capital gains taxation and debt, in the table below:
30 June 30 June
2008 2007
In- In- In-
trin- trin- trinsi
sic sic c
gross
asset net Per net Per
value asset share asset share
(after Debt value value
CGT) (1), (2) (1), (2)
Rm Rm Rm R Rm R
Absa Group 716 0 716 1,54 1 786 3,66
Avusa 569 (948) (379) (0,82) 0 0
Life 1 725 (300) 1 425 3,07 1 502 3,08
Healthcare
Group Five 361 0 361 0,78 465 0,95
Vox Telecom 284 (298) (14) (0,03) 0 0
Other 72 (10) 62 0,13 38 0,08
investments
Mvelaserve 1 506 (132) 1 374 2,96 1 787 3,66
Net cash 539 (50) 489 1,05 1 304 2,67
Total 5 772 (1 738) 4 034 8,68 6 882 14,10
1. Based on the diluted net number of 464 million ordinary shares after share
buy-backs and assuming that all the preference shares will be converted into
ordinary shares after November 2009 (2007: 488 million).
2. The redeemable option-holding shares issued in June 2007 have not been taken
into account in calculating the intrinsic net asset value per ordinary share as
the minimum option strike price of R17,50 is greater than the current Mvela
Group ordinary share price.
The above valuation is based on, inter alia:
a combination of the market value, volatility and expected dividend yields in
the case of investments listed on the JSE;
application of option pricing models in the case of the Absa Group and Group
Five investments;
directors` valuation of other investments, taking into consideration the
economic factors prevailing at 30 June 2008; and
the gross cash position of the Group at 30 June 2008.
Based on the Mvela Group ordinary share price on the JSE of R6,45 on 22 August
2008, the ordinary shares were trading at a discount of 30% to Group`s intrinsic
net asset value per share of R9,21 at that date.
Mvelaserve Limited ("Mvelaserve")
The Group manages its operating subsidiaries under the holding company
Mvelaserve. It is one of the leading providers of outsourced business support
services in South Africa employing over 26 000 people. It offers a breadth of
services including facilities management, security, catering and cleaning, while
also providing unique growth opportunities in the gaming and franchising
markets. The strategy of Mvelaserve is to use its existing revenue base as a
platform to grow higher margin service offerings.
Mvelaserve performed ahead of the prior year, a key feature being the
improvement in the operating performance of the security and the catering and
cleaning business units.
Summary of revenue and operating profit
30 June 2008 30 June 2007
Ope- Ope- Ope- Ope-
rating rating rating rating
Revenue profit margin Revenue profit margin
Rm Rm % Rm Rm %
Facilities 1 014 131 12,9 1 056 148 14,0
management
Security 1 092 20 1,8 937 11 1,2
Catering and 656 24 3,7 644 13 2,0
cleaning
Diversified 777 72 9,3 825 70 8,5
services
Total 3 539 247 7,0 3 462 242 7,0
Revenue for the year increased by 2% to R3 539 million (2007: R3 462 million).
On a comparable basis revenue increased by 9% if the revenue of Rebhold
Distribution Services is excluded from the prior year. Rebhold Distribution
Services is classified as an investment in the current year after 60% of the
business was sold in July 2007.
Operating profit increased to R247 million in the current year from R242 million
in the prior year. If losses of R20 million incurred in the current year
relating to the prior year issues arising from the legacy Coin Security business
are added back, current year operating profit increased by 20% on a comparable
basis. Operating margin of 7,0% was in line with the prior year`s and improved
to 7,5% on a comparable basis.
EBITDA for the year was R394 million, 6% ahead of the prior year EBITDA of R372
million and an increase of 18% on a comparable basis.
Cash generated from operations amounted to R271 million compared to R328 million
generated in the previous year. The reasons for this decrease were that R60
million of trade debtors in Trollope Mining Services were outside of normal
credit terms at year end and R30 million of working capital was tied up in the
legacy Coin cash processing business.
Capital expenditure of property, plant and equipment and manufacturing rights
(net of proceeds from the disposal of property, plant and equipment) amounted to
R288 million for the year (2007: R172 million). This amount includes R110
million utilised for the investment in King Pie. Approximately R100 million of
capital expenditure was attributable to the replacement of assets with the
balance being used to expand and grow Mvelaserve. The net inflows from asset
financing were R75 million with the balance of the capital expenditure funded
from existing cash resources.
Facilities Management
The facilities management business unit is centered on Total Facilities
Management Company ("TFMC") and consists of two divisions, namely the Telkom
Contract and Customised Solutions, which houses a portfolio of smaller
facilities management contracts. Management continued to grow the non-Telkom
business in order to reduce reliance on one customer. This is consistent with
Mvelaserve`s strategy of using its existing contract as a base to diversify
earnings.
The Group remains optimistic that an extension to the Telkom Contract will be
negotiated within the next year, albeit at significantly lower margins as the
Telkom Contract moves into the maturity phase of its life cycle.
Security
The security business unit was formed from the merger of the legacy Coin
Security Group and the legacy Protea Security Services businesses. The new group
was re-branded as Protea Coin Group ("Protea Coin") and has been structured
across four main divisions of assets-in-transit ("AIT"), armed reaction,
physical security and technical security.
The primary challenge of the integration process was to address the legacy Coin
AIT division which was incurring significant losses as a result of its increased
vulnerability to cash heists relative to its competition. The losses in this
division have been reduced to break-even and we expect the division to generate
operating profit in the new financial year.
The current operating margin of 3,6% is some way off the target operating margin
of 7,5%. Action is being taken to improve this operating margin over the next 2-
3 years by using the existing revenue base from the large guarding business as a
platform to grow higher margin offerings such as armed reaction, technical
security and AIT.
Catering and Cleaning
The legacy cleaning and catering businesses were integrated into one business
unit during the year. The rationale for this integration is to develop a single
route-to-market for the catering and cleaning offerings and to rationalise
overheads which are common to both. The business unit consists of three
divisions: RoyalSechaba with its service offerings of contract catering and
infrastructure project support services ("PSS"), Berco Cleaning with its service
offerings of contract and industrialized cleaning and Mediguard, the speciality
healthcare cleaning offering. Our strategy is to use the existing catering and
cleaning revenue base as a platform to grow higher margin offerings such as PSS
and industrial cleaning.
Cost reductions to the overhead base of RoyalSechaba were implemented with the
aim of restoring the operating margin of the division to 5%. The margin for the
year was 3,3%, well ahead of the prior year`s of 1,6%.
Berco Cleaning also delivered an improved result due to a better than expected
performance in its industrial cleaning division and growth in Gauteng. Mediguard
performed in line with expectations and continues to set high standards in the
medical cleaning industry, especially to the private healthcare sector. The
overall success of the cleaning offerings for the year under review is indicated
by the improvement of its operating margin to 4,1% from 3,1% in the prior year.
Diversified Services
The Diversified Services business unit consists of small- to-medium sized
companies across a diverse range of services businesses. The grouping of these
businesses in this unit is primarily because each of the businesses requires
further investment from the Group to grow.
Khuseti Holdings ("Khuseti") is the franchisor of the King Pie and Blacksteer
brands. The substantial investment programme at Khuseti has been concluded. The
objective of the investment programme was to unlock the value in the existing
franchise model by purchasing production rights from existing King Pie
franchisees and investing in a fully mechanised production facility in Midrand,
Gauteng. The full benefits of the new business model started to flow from July
2008.
The performance of Zonke Monitoring Systems ("Zonke") continues to grow from
strength to strength. The number of limited payout machines ("LPM`s") monitored
by Zonke in terms of its contract with the National Gambling Board now stands at
4 400, 40% ahead of the 3 100 machines monitored at 30 June 2007. The
announcement made by the Gauteng Gambling Board in November 2007 inviting
interested parties to apply for LPM operator licences in Gauteng is seen as a
positive development for Zonke.
Novare Holdings ("Novare"), with its principal divisions of Novare Actuaries and
Consulting and Novare Investments, is a niche asset management business. In the
face of difficult market conditions Novare was able to maintain its funds under
management and under administration by delivering returns ahead of the market.
The flagship product in Novare`s stable, the Mayibentsha Fund of Hedge Funds,
continued to generate positive returns.
The disposal of Trollope Mining Services to a consortium of management and BEE
investors will be completed in the new financial year pending approval by the
competition authorities. The decision to dispose of the business was mainly due
to its capital intensive business model which is structurally different to the
other businesses in the Mvelaserve portfolio. Finally, we celebrated the 25th
anniversary of Contract Forwarding the oldest company in the Group, during the
current year.
Investments
Financial Services Sector
The investment in Absa Group has been affected by the general slowdown in
economic activity and the downturn in the equity market. Despite the tough
economic conditions, Absa Group`s results for the six months to 30 June 2008
were satisfactory, with headline earnings increasing by 8,4%. The Absa Group
share price decreased to R82,01 per share at 30 June 2008 from R131,50 per share
at 30 June 2007. This decrease of 38% in the Absa Group share price resulted in
a decrease in the intrinsic value (net of CGT and debt) of Mvela Group`s
effective interest in Absa Group, to R716 million at 30 June 2008 from R1 786
million at 30 June 2007. Mvela Group`s investment in Absa Group comprised 18% of
Mvela Group`s intrinsic net asset value at 30 June 2008.
The Absa Group empowerment entity, Batho Bonke Capital (Pty) Ltd ("Batho
Bonke"), through which Mvela Group owns its interest in Absa Group, is currently
in its option exercise period which commenced on 1 July 2007. This option
exercise period ends on 30 June 2009 with the last day to exercise being 1 June
2009. It is Batho Bonke`s stated intention to exercise the options within this
option period.
Consumer Services Sector
Life Healthcare performed very well operationally for the 9 months ended 30 June
2008. Life Healthcare produced an EBITDA for the rolling 12 months to June 2008
of R1 650 million (2007: 1 390 million). Owing to the significant cash flow
generation abilities of the company, the shareholders have received R500 million
in cash distributions over the past year in the form of repayments of
shareholder loans.
A more conservative approach in the valuation of Life Healthcare, in line with
weaker equity market trends, resulted in a decrease of 5,1% in the intrinsic
value (net of CGT and debt) of Mvela Group`s effective interest in Life
Healthcare to R1 425 million compared to 30 June 2007 (though Life Healthcare
achieved a higher EBITDA). Mvela Group`s investment in Life Healthcare comprises
35% of Mvela Group`s intrinsic net asset value at 30 June 2008.
Construction and Infrastructure Sector
The investment in Group Five continues to deliver satisfactory returns to Mvela
Group owing to the buoyant economic climate relating to infrastructure spend.
The company produced excellent results for the year ended 30 June 2008 with
operating profit before a fair value adjustment increasing by 62% to R636
million. The intrinsic value of Mvela Group`s investment in Group Five shares
decreased to R361 million at 30 June 2008 from R465 million at 30 June 2007 as a
result of a decrease in the Group Five share price to R44,90 at 30 June 2008
from R54,40 at 30 June 2007. Mvela Group`s investment in Group Five comprises 9%
of the Groups intrinsic net asset value at 30 June 2008.
Telecoms, Media and Technology Sector
In line with Mvela Group`s strategy to invest in the Telecoms, Media and
Technology sector, Mvela Group acquired a 12,3% interest in the share capital of
Vox Telecom for a consideration of R293 million. The deliberate approach adopted
by the Mvela Group of acquiring a small interest in an alternative telecom
company is to ensure that the risk to shareholders is minimised yet taking
advantage of opportunities in the sector. The Vox Telecom share price on the JSE
at 30 June 2008 was R2,05 resulting in a negative intrinsic value of R14 million
net of CGT and debt.
Mvela Group completed a transaction with Allan Gray Fund Managers whereby the
Group acquired a 25,5% interest in Avusa for a purchase consideration of R1 294
million which was financed through debt and the Group`s own cash resources.
Following the settlement of the purchase consideration after year end, 26 474
396 shares in Avusa were transferred to Mvela Group. Avusa is a strategic
holding for Mvela Group and provides a platform for participation in the growth
and development of a range of assets that cannot be easily replicated. Mvela
Group`s interest in Avusa has entitled the Group to appoint three directors to
the Avusa board. This will ensure that Mvela Group has sufficient strategic
influence over the future direction of the asset.
Avusa announced their results on 19 June 2008 and their earnings before interest
and tax was R421 million for the year, 10% up on the previous year.
Accounting policies and International Financial Reporting Standards
The reviewed results for the year ended 30 June 2008 have been prepared in
accordance with IFRS, IAS 34 - Interim Financial Reporting and in compliance
with the Listings Requirements of the JSE. The accounting policies used are
consistent in all respects with the accounting policies applied in the financial
statements for the year ended 30 June 2007 other than set out below:
The adoption of IFRS 7 Financial Instruments: Disclosures, which is effective
for the annual reporting period beginning on or after 1 January 2007; IFRIC 11 -
IFRS 2: Group and Treasury Share Transactions and the consequential amendments
to IAS 1 Presentation of Financial Statements.
Restatements of comparatives were not required as these statements deal with
disclosure requirements.
Audit review opinion
These results have been reviewed by Mvela Group`s auditors PKF (Jhb) Inc., and
their unqualified reviewed opinion is available for inspection at the company`s
registered office.
Analyst Presentation
The presentation to investors will be available on the Mvela Group website from
14h00 on 28 August 2008.
Final dividend and special dividend ("Cash distribution")
Ordinary shares
The directors of Mvela Group have resolved to declare a final dividend of 16
cents per ordinary share and a special dividend of 5 cents per share, to
ordinary shareholders. The last day to trade "cum" the cash distribution in
order to participate in the cash distribution is Thursday, 18 September 2008.
The ordinary shares of Mvela Group will commence trading "ex" the cash
distribution from the commencement of business on Friday, 19 September 2008 and
the record date will be Friday, 26 September 2008. The cash distribution will be
paid to ordinary shareholders on Monday, 29 September 2008. Ordinary share
certificates may not be dematerialised or rematerialised between Friday, 19
September 2008 and Friday, 26 September 2008, both days inclusive.
Dividend
Preference shares
The directors of Mvela Group have resolved to declare a cash preference dividend
(No. 6) of 27,27397 cents per preference share, for the six months ending 30
June 2008 to preference shareholders. The last day to trade "cum" the preference
dividend in order to participate in the preference dividend is Thursday, 18
September 2008. The preference shares of Mvela Group will commence trading "ex"
the preference dividend from the commencement of business on Friday, 19
September 2008 and the record date will be Friday, 26 September 2008. The
preference dividend will be paid to preference shareholders on Monday, 29
September 2008. Preference share certificates may not be dematerialised or
rematerialised between Friday, 19 September 2008 and Friday, 26 September 2008,
both days inclusive.
Share Buy-Backs
The board of Mvela Group has approved a share buy-back programme to acquire at
least 10% of the Group`s issued ordinary share capital in terms of the general
authority granted by the shareholders. The Group has thus far bought back 35 765
285 ordinary shares amounting to 8,07% of the issued ordinary share capital.
Prospects
In these challenging times, Mvela Group is focusing on capital preservation and
maximising shareholder returns through optimal capital allocation.
We will continue to assess opportunities in our strategic areas of focus and we
will, with minimal capital outlay, acquire positions that meet our investment
criteria and, where appropriate, ensure that the Group has significant
influence.
In time, this will counteract the volatile impact of fair value adjustments on
the Group`s financial statements. Capital not earmarked for investment purposes
will be returned to shareholders in the most efficient way.
Mvela Group has delivered weighted return of 34% on its investments since the
merger in 2004 and has the means and the strategies in place to continue to
deliver shareholder value over the medium to long term, despite short term
movements in market values.
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2008
The following are the audited results of Mvela Group and its subsidiaries ("the
Group") for the year ended 30 June 2008 with comparative figures.
Summarised group balance sheet
Reviewed Audited
year year
ended ended
30 June 30 June
2008 2007
R`000 R`000
ASSETS
Non-current assets 5 521 050 6 002 052
Property, plant and equipment 268 150 389 618
Intangible assets 851 429 799 591
Investment in associates 779 995 11 215
Strategic investments 3 524 859 4 751 455
Financial asset - derivative financial 3 242 -
instruments
Deferred taxation 93 375 50 173
Current assets 1 546 227 1 997 238
Cash and cash equivalents 870 013 1 355 431
Short-term investments 33 652 16 101
Other current assets 642 562 625 706
Assets in disposal group held for sale 280 295 -
TOTAL ASSETS 7 347 572 7 999 290
EQUITY AND LIABILITIES
Capital and reserves 3 943 488 6 000 490
Share capital and reserves 3 820 259 5 689 390
Minority interests 123 229 311 100
Non-current liabilities 1 161 603 1 038 148
Interest-bearing liabilities 769 541 407 970
Non-interest-bearing liabilities 2 653 1 400
Deferred taxation 389 409 628 778
Current liabilities 2 065 586 960 652
Interest-bearing liabilities 61 545 101 620
Accrued interest-bearing liabilities 1 1 288 943 -
Non-interest-bearing liabilities 715 098 859 032
Liabilities in disposal group held for 176 895 -
sale
TOTAL EQUITY AND LIABILITIES 7 347 572 7 999 290
1.Due to the non-finalisation of the
funding structure of the Avusa
transaction, the debt of R1 289 million
was credited to short-term interest-
bearing liabilities. Subsequent to year-
end, R1 010 million was financed by
financial institutions.
Net number of ordinary shares in issue 406 665 433 178
(000)
Diluted net number of ordinary shares in 464 063 487 878
issue (000)*
Fully diluted net number of ordinary 588 488 612 303
shares in issue (000)**
Net asset value per ordinary share (cents) 823,2 1 166,2
Net tangible asset value per ordinary 619,6 992,0
share (cents)
Fully diluted net asset value per ordinary 649,2 1 284,8
share (cents)
Fully diluted net tangible asset value per 488,6 1 146,0
ordinary share (cents)
*Calculated on the basis that all preference shares will be converted into
ordinary shares after November 2009.
**Calculated on the basis that all preference shares and BEE shares will be
converted into ordinary shares in accordance with their terms.
Summarised group income statement
Reviewed Audited
year year
ended ended
30 June 30 June
2008 % 2007
R`000 change R`000
Revenue 3 538 918 2 3 461 586
Profit from operations 246 747 2 241 625
Impairment of goodwill (11 486) -
Fair value adjustments and net
(loss)/profit from
investments (1 620 105) (208) 1 499 523
(Loss)/profit from associates (526 262) 669
Net interest received 57 128 80 905
Cost of BEE transaction and (16 175) (72 328)
share appreciation rights
Net (loss)/profit before (1 870 153) (207) 1 750 394
taxation
Taxation expense 184 960 (382 943)
Normal, deferred, capital gains 189 850 (378 826)
and foreign tax
Secondary tax on companies (4 890) (4 117)
Net (loss)/profit after taxation (1 685 193) (223) 1 367 451
Attributable to:
Ordinary shareholders (1 532 789) 1 237 092
Other shareholders (152 404) 130 359
- Preference shareholders 30 016 30 085
- Minority interests (182 420) 100 274
(1 685 193) (223) 1 367 451
Weighted average net number of 416 564 441 518
ordinary shares in issue (000)
Diluted weighted average net 473 962 496 218
number of ordinary shares in
issue (000)*
Fully diluted weighted average
net number of ordinary
shares in issue (000)** 598 387 620 643
(Loss)/earnings per ordinary (368,0) (231) 280,2
share (cents)
Headline (loss)/earnings per (362,6) (219) 304,8
ordinary share (cents)
Diluted (loss)/earnings per (317,1) (224) 255,4
ordinary share (cents)
Diluted headline (loss)/earnings (312,4) (213) 277,2
per ordinary share (cents)
Fully diluted (loss)/earnings (228,9) (202) 225,3
per ordinary share (cents)
Fully diluted headline (225,2) (193) 242,8
(loss)/earnings per ordinary
share (cents)
Distribution/dividend per 27,0 22,0
ordinary share (cents)
- Interim 6,0 6,0
- Final 16,0 16,0
- Special 5,0 -
Dividends per preference share 55,0 55,0
(cents)
- Interim 27,7 27,7
- Final 27,3 27,3
*Calculated on the basis that all preference shares will be converted into
ordinary shares after November 2009.
**Calculated on the basis that all preference shares and BEE shares will be
converted into ordinary shares in accordance with their terms.
Summarised group cash flow statement
Reviewed Audited
year year
ended ended
30 June 30 June
2008 2007
R`000 R`000
Profit from operations 246 747 241 625
Non-cash items 144 670 128 578
Working capital changes (120 268) (41 930)
Cash generated from operations 271 149 328 273
Net interest received 73 134 80 905
Investment income 11 263 11 590
Normal taxation paid (85 699) (80 951)
Cash available from operating activities
before the payment of
capital gains tax 269 847 339 817
Capital gains taxation paid (61 044) -
Cash available from operating activities 208 803 339 817
Cash effects of investing activities (1 904 183) 734 420
Cash effects of financing activities 1 244 770 (217 858)
Dividends paid (30 016) (30 085)
Net movement in cash and cash (480 626) 826 294
equivalents
Cash and cash equivalents at the 1 351 706 525 412
beginning of the year
Cash in disposal group held for sale (1 067) -
Cash and cash equivalents at the end of 870 013 1 351 706
the year
Summarised group statement of changes in equity
Reviewed Audited
year year
ended ended
30 June 30 June
2008 2007
R`000 R`000
Balance at the beginning of the year 6 000 490 4 793 810
Disposal/(acquisition) of investment and 445 (480)
businesses
Shares bought back/issued (259 546) (105 177)
Cost of BEE transaction 16 175 65 375
Net (loss)/profit after taxation (1 685 193) 1 367 451
Distribution/dividends (128 883) (120 489)
Balance at the end of the year 3 943 488 6 000 490
Reconciliation between net (loss)/profit attributable to ordinary shareholders
and headline net (loss)/profit attributable to ordinary shareholders
Reviewed Audited
year year
ended ended
30 June 30 June
2008 2007
R`000 R`000
Net (loss)/profit attributable to (1 532 789) 1 237 092
ordinary shareholders
After-tax adjustments:
- Disposal/Impairment of investment and 12 631 109 698
businesses
- Profit on sale of property, plant and (1 994) (1 212)
equipment
Impairment of goodwill 11 486 -
Headline net (loss)/profit attributable (1 510 666) 1 345 578
to ordinary shareholders
Segmental information
Reviewed Audited
year year
ended ended
30 June 30 June
2008 2007
R`000 R`000
NET ASSETS
Operations 1 169 646 946 296
Investments 2 773 842 5 054 194
3 943 488 6 000 490
Revenue
Operations 3 538 918 3 461 586
Investments - -
3 538 918 3 461 586
NET (LOSS)/PROFIT AFTER TAXATION
Operations 162 186 158 857
Investments (1 819 718) 1 280 922
Impairment of goodwill (11 486) -
Cost of BEE transaction and share (16 175) (72 328)
appreciation rights
(1 685 193) 1 367 451
TMG Sexwale YZ Cuba
Chairman Chief Executive Officer
Executive Directors: TMG Sexwale (Executive Chairman),
MSM Xayiya (Executive Deputy Chairman),
YZ Cuba (Chief Executive Officer),
GE Roth (Chief Financial Officer), WV Mavimbela
Non-executive Directors: KD Dlamini*, BD Hopkins*,
OA Mabandla*, D Moshapalo*, MZ Mpofu*, RM Patel*,
CD Stein, MJ Willcox (*Independent)
Registered Office: Hunts End, 36 Wierda Road West, Wierda Valley, Sandton, 2196
Telephone 27 11 290-4200 Telefax 27 11 783-0027
Sponsor: Deutsche Securities SA (Pty) Limited
Transfer Secretaries: Computershare Investor Services (Proprietary) Limited, 70
Marshall Street, Johannesburg, 2001
A copy of these results is available on the Mvelaphanda Group website at
www.mvelagroup.co.za
Sandton
28 August
Sponsor to Mvela Group
Deutsche Securities (SA) (Proprietary) Limited
Date: 28/08/2008 08:08:01 Produced by the JSE SENS Department.
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