| Tue 30 Sep 2008, 9:01 | | CAE - Cape Empowerment Trust Limited - Unaudited condensed consolidated interim |
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CAE
CAE
CAE - Cape Empowerment Trust Limited - Unaudited condensed consolidated interim
results for the six months ended 30 June 2008 and renewal of cautionary
announcement
Cape Empowerment Trust Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/014606/06);
Share code: CAE ISIN: ZAE000016952
("Cape Empowerment Trust" or "the Group" or "the company")
Unaudited Condensed Consolidated Interim Results
for the six months ended 30 June 2008 and Renewal of Cautionary Announcement
NET ASSET VALUE PER SHARE - 113.3 CENTS
Abridged Group Income Statement
for the period ended 30 June 2008 Restated
Unaudited Unaudited Audited
6 months 6 months 12 months
30 June 30 June 31 December
2008 2007 2007
R`000 R`000 R`000
Turnover 79 548 76 692 154 155
Gross profit 23 377 22 883 52 586
Operating profit/ (loss) (net) (9 828) (695) (9 770)
Finance costs (net) (34 475) (2 203) (10 340)
Negative goodwill - 3 743 19 695
Investment income 25 981 863 9 737
Fair value adjustments/ impairments (205 530) 87 614 198 420
Profit/(loss) before taxation (223 852) 89 321 207 742
Income tax expense 30 739 (7 810) (47 146)
Profit/( loss) for the period (193 113) 81 511 160 596
Attributable to:
Equity holders of the company (156 573) 76 453 145 002
Minority interest (36 540) 5 058 15 594
(193 113) 81 511 160 596
Earnings per share for profit
attributable to the equity
holders of the Group during the
period (expressed as cents per share)
Basic (47.0) 30.9 53.3
Headline (46.5) 28.5 43.9
Fully diluted earnings per share
(cents) (45.0) 28.9 50.4
Abridged Group Balance Sheet
as at 30 June 2008 Restated
Unaudited Unaudited Audited
30 June 30 June 31 December
2008 2007 2007
R`000 R`000 R`000
ASSETS
Non-current assets 877 694 382 784 1 091 061
Investment property 2 609 - 2 609
Property, plant and equipment 15 153 19 313 16 577
Goodwill 36 302 24 426 29 603
Intangible assets 9 235 9 234 9 235
Other financial assets 814 395 329 811 1 033 037
Current assets 139 541 120 499 139 555
Inventories 24 047 23 091 23 253
Other financial assets 44 684 6 676 20 894
Trade and other receivables 43 272 41 762 23 853
Cash and cash equivalents 27 538 48 970 71 555
Non-current assets held for sale 17 755 - 17 734
Total assets 1 034 990 503 283 1 248 350
EQUITY AND LIABILITIES
Equity
Share capital and premium 245 011 120 424 230 107
Retained earnings 129 984 228 703 297 252
Minority interest 114 682 35 415 157 784
Total equity 489 677 384 542 685 143
Liabilities
Non-current liabilities 367 268 28 010 409 720
Borrowings 331 669 19 223 340 670
Deferred tax liability 35 599 8 787 69 050
Current liabilities 178 045 90 731 153 487
Trade and other payables 49 701 51 782 51 079
Current income tax liabilities 32 451 16 754 29 030
Borrowings 94 177 21 744 72 795
Operating lease liability - 433 -
Bank overdraft 1 503 18 583
Dividends payable 213 - -
Total liabilities 545 313 118 741 563 207
Total equity and liabilities 1 034 990 503 284 1 248 350
Abridged Group Cash Flow Statement
for the period ended 30 June 2008 Restated
Unaudited Unaudited Audited
6 months 6 months 12 months
30 June 30 June 31 December
2008 2007 2007
R`000 R`000 R`000
Cash flow from operating activities (36 510) 57 276 20 541
Operating profit/(loss) before working
capital changes (7 288) 60 028 7 095
Working capital changes (21 591) 1 447 18 493
Cash (utilised)/generated by
operations (28 879) 61 475 25 588
Interest received 25 861 621 8 126
Interest paid (34 475) (2 203) (10 340)
Dividends received 120 242 1 611
Taxation paid 863 (2 859) (4 444)
Cash flow from investing activities (25 917) (111 809) (535 233)
Purchase of property, plant and
equipment (2 702) (2 835) (3 658)
Purchase of subsidiary (7 090) - 10 486
Proceeds from sale of PPE 1 845 - 1 591
Purchase of investment property - - (2 609)
Profit on sale of shares - - 6 741
Sale/(purchase) of financial assets (17 950) (117 842) (513 064)
Non-current assets held for sale (20) - (17 734)
Loss on sale of financial asset - - (16 986)
Other non-cash item - 8 868 -
Cash flow from financing activities 17 491 90 643 572 822
Proceeds/(repayment) of instalment
sale obligations 201 (252) (566)
Repayment of other financial
liabilities 14 663 - 2 160
Proceeds/(repayment) of borrowings (1 787) 11 332 384 327
Proceeds from shareholders loan - 8 764 6 419
Dividends paid (10 491) - -
Proceeds on share issue 14 905 70 800 180 482
Net (decrease)/increase in cash (44 936) 36 110 58 130
Cash surplus at the beginning of
the period 70 971 12 842 12 842
Cash resources at the end of the
period 26 035 48 951 70 972
Supplementary Information
for the period ended 30 June 2008 Restated
Unaudited Unaudited Audited
6 months 6 months 12 months
30 June 30 June 31 December
2008 2007 2007
Number of shares in issue -
consolidated (000`s) 331 015 272 429 325 125
Fully diluted number of shares in
issue - consolidated 346 119 - 354 998
Shares in issue - weighted (000`s) 332 837 247 499 272 056
Diluted number of shares - weighted
(000`s) 347 623 264 823 287 847
Net asset value per share (cents) 113.3 128.2 162.2
Depreciation, amortisation and
impairment charge (R`000) 1 272 1 440 3 446
Profit attributable to ordinary
shareholders (R`000) (156 570) 76 453 145 002
Earnings per share (cents) (47.0) 30.9 53.3
Fully diluted earnings per share
(cents) (45.0) 28.9 50.4
Headline earnings per share (cents) (46.5) 28.5 43.9
Fully diluted headline earnings per
share - (cents) (44.5) 26.6 41.5
Reconciliation of headline earnings
Profit attributable to ordinary
shareholders (R`000) (156 570) 76 453 145 002
Loss/(profit) on sale of shares and
assets 933 (2 603) (6 741)
Other adjustments 1 086 - -
Tax effect (152) 378 833
Negative goodwill - (3 743) (19 695)
Headline earnings (R`000) (154 703) 70 484 119 399
Reconciliation of diluted number of
shares
Number of shares in issue -
weighted (`000) 332 837 247 499 272 056
Dilutive shares (`000) 14 786 17 324 15 791
Number of shares to be cancelled
(`000) - - -
Diluted number of shares (`000) 347 623 264 823 287 847
Statement of changes in equity
for the period ended 30 June 2008
Share Share Treasury
capital premium shares
Unaudited R`000 R`000
Balance at
1 January 2007 (Audited) 231 49 393 -
Profit for the year - - -
Issue of shares 96 184 500 (4 113)
Business combinations - - -
Balance at
31 December 2007 327 233 893 (4 113)
Loss for the period - - -
Issue of shares 31 53 136 (8 868)
Consolidation of share trust - (29 376) -
Business combinations - - -
Dividends - - -
Balance at 30 June 2008 339 257 653 (12 981)
Retained Minority Total
earnings interest
Unaudited R`000 R`000 R`000
Balance at
1 January 2007 (Audited) 152 262 24 532 226 418
Profit for the year 144 999 15 594 160 593
Issue of shares - - 180 483
Business combinations - 117 659 117 659
Balance at
31 December 2007 297 261 157 785 685 153
Loss for the period (156 573) (36 540) (193 113)
Issue of shares - - 44 299
Consolidation of share trust - - (29 376)
Business combinations - (6 563) (6 563)
Dividends (10 704) - (10 704)
Balance at 30 June 2008 129 984 114 682 489 677
Segmental information
for the period ended 30 June 2008
Property Security and Gaming
Services Leisure
Segmental information R`000 R`000 R`000
Turnover - 22 174 -
Assets 531 308 33 965 293 974
Financial Other Total
Services
Segmental information R`000 R`000
Turnover - 57 373 79 548
Assets 23 638 152 104 1 034 990
Business segments
The company has diversified investments across five main categories, namely
Property, Security and Services, Gaming and Leisure, Financial Services and
Other. These are managed independently to a large degree.
1. BASIS OF ACCOUNTING
The unaudited condensed consolidated financial statements for the six months
ended 30 June 2008 were prepared in accordance with IAS 34 - Interim Financial
Reporting and in compliance with the Listings Requirements of the JSE Limited.
The financial information has been prepared on the basis of the recognition
and measurement requirements of International Financial Reporting Standards
(IFRS). The accounting policies of the group have been prepared with those
previously reported in the 2007 audited annual financial statements.
Shareholders are reminded of the change in accounting policy during 2007
regarding the treatment of investments in associate companies from the equity
accounted basis to financial assets held at fair value through profit and loss,
to better reflect the nature of the group`s investment activities and to
provide more accurate and meaningful information to shareholders. This approach
does, however, result in greater volatility in earnings in times of market
volatility.
2. INTERIM REVIEW AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
The period under review was marked by extreme global and local market
volatility and, in most instances, dramatic upward pricing of risk followed by
the corresponding downward adjustment of asset prices. This has resulted in
significant downward fair value adjustments mainly on the group`s listed
investments, as can be seen by the following table:
Investment Adjustment (R`000) % adjustment
Ambit Properties Ltd (60 873) (15)
Grand Parade Investments Ltd (152 713) (36)
Command Holdings Ltd (8 406) (43)
Purple Capital Ltd (11 402) (47)
Fixed interest rate hedge 27 864 -
The above adjustments must be reviewed against the backdrop of relevant market
movements on the JSE during the period under review, including a drop in the SA
Listed Property Index of 31% and the share prices of GPI peers Gold Reef and
Sun International losing 54% and 40% respectively. In the case of Ambit market
values has since recovered substantially, although the GPI share price remains
under pressure for the time being.
Shareholders are referred to the announcement published on SENS on 29 August
and are reminded that the group intends disposing of its interests in Grand
Parade Investments Ltd (GPI) by way of a competitive disposal process. As a
result shareholders should continue to exercise caution when trading in the
company`s shares until a further announcement is made in this regard.
3. PROSPECTS
Global events during the period under review have resulted in increased cost of
credit and capital and have caused ripple effects across most sectors of the
economy. However, central banks and governments around the world have for the
most part acted swiftly and decisively to restore relative calm to the markets.
The success of these actions is yet to be tested and, for the time being,
investors appear to remain risk averse. Asset pricing in two of the group`s
biggest areas of investment, namely Property and Gaming & Leisure, is largely
dependent on the cost of capital and credit, and the outlook on inflation and
economic growth.
As management we constantly review our portfolio mix of investments. We believe
that the group is well positioned to benefit substantially when the current
cycle turns. We will remain focused on investments over which we can exert
significant influence or control in sectors where we have core competencies,
such as property, security and services. We remain committed to the path that
we embarked on at the beginning of the year to balance growth with risk and to
increasingly focus on cash generation.
4. ISSUE OF ORDINARY SHARES FOR CASH
Shareholders are advised that, in terms of a general authority granted by
shareholders at the annual general meeting held on 30 August 2007, the company
has issued, at the relevant 30-day weighted average prices, the following
ordinary shares to public shareholders in order to settle existing
scrip-lending obligations:
16 493 221 ordinary shares at 137 cents per share on 23 April 2008,
15 104 257 ordinary shares at 95 cents per share on 4 September 2008.
The financial effects of the share issues are not material and are reflected in
the accompanying results and supplementary information.
For and on behalf of the board
SL Rai Jeremy de Villiers
Executive Chairman Managing Director
Cape Town
30 September 2008
Board of Directors:
S L Rai (Executive Chairman), T D Rai (Deputy Chairman*), J de Villiers
(Managing Director),
R McGregor, P B Hesseling*, O Valley*, H Takolia*, F Calana*, M Barnes*
* Non-Executive
Date: 30/09/2008 09:01:01 Produced by the JSE SENS Department.
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completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
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