| Tue 14 Oct 2008, 17:29 | | ABO - Absolute Holdings - Reviewed Results For The Year Ended 30 June 2008, |
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ABO
ABO
ABO - Absolute Holdings - Reviewed Results For The Year Ended 30 June 2008,
Change In Control, Withdrawal From Negotiations With Mvuzo Mining (Pty)
Ltd And Renewal Of Cautionary Announcement
ABSOLUTE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
Share code: ABO & ISIN: ZAE000062998
("Absolute" or "the company")
REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2008, CHANGE IN CONTROL,
WITHDRAWAL FROM NEGOTIATIONS WITH MVUZO MINING (PTY) LTD AND RENEWAL OF
CAUTIONARY ANNOUNCEMENT
30 June 30 June
2008 2007
GROUP BALANCE SHEETS R`000s R`000s
Assets
Non-current assets 20 536 16 245
Property, plant & equipment 970 481
Mineral rights 19 566 9 717
Goodwill - 6 047
Current Assets 861 4 631
Inventory 462 3 327
Cash and cash equivalents 335 238
Trade and other receivables 31 959
Short-term receivables 33 107
Disposal group held for sale 1 016 3 710
Total assets 22 413 24 586
Equity and liabilities
Capital and reserves 878 4 817
Share capital 8 563 7 397
Share premium 80 769 77 985
Accumulated loss (88 454) (80 566)
Non-current liabilities 14 903 6 216
Long-term liabilities 14 903 6 201
Deferred taxation - 15
Current liabilities 5 616 9 955
Trade and other payables 747 4 908
Short-term loans - 33
Taxation - 5
Bank overdraft 4 869 5 009
Liabilities associated with disposal 1 016 3 598
group held for sale
Total equity and liabilities 22 413 24 586
Net asset value per share
information:
Net asse4t value per share (cents) 0.10 0.65
Net tangible asset value per share (2.18) (1.48)
(Cents)
Shares in issue at year end 856 374 874 739 708 208
30 June
30 June 2007
2008 R`000s
GROUP INCOME STATEMENTS R`000s (Restated)
Revenue - -
Cost of sales - -
Gross profit - -
Selling and administrative expenses (2 139) (703)
Net operating loss (2 139) (703)
Impairment loss of Non-current - (70)
assets held for sale
Loss from operations (2 139) (773)
Finance charges (79) (761)
Interest income 37 28
Loss before taxation (2 181) (1 506)
Taxation 15 -
Net loss for the year from (2 166) (1 506)
continuing operations
Discontinued operations
Net loss for the year from (5 723) (4 489)
discontinued operations
Net loss for the year (7 889) (5 995)
Attributable to:
Equity holders (7 889) (5 995)
Minority interest - -
Reconciliation between Net loss and
Headline Loss
Net loss for the year (7 889) (5 995)
Decrease in the value of investment - 70
property
(Profit)/Loss on disposal of fixed (150) 215
assets
Headline Loss (8 039) (5 710)
Earnings per share information:
Loss per share (cents) (1.05) (0.81)
Loss per share from continuing (0.29) (0.20)
operations (cents)
Headline loss per share (cents) (1.07) (0.77)
Weighted average shares in issue 749 329 212 739 708 208
Share Share Accumulat
capital premium ed Total
GROUP STATEMENT OF CHANGES R`000s R`000s loss R`000s
IN EQUITY R`000s
Balance at 1 July 2006 7 397 77 985 (74 570) 10 812
Net loss for the year - - (5 995) (5 995)
Balance at 30 June 2007 7 397 77 985 (80 565) 4 817
Shares issued 1 166 2 784 - 3 950
Net loss for the year - - (7 889) (7 889)
Balance at 30 June 2008 8 563 80 769 (88 454) 878
30 June 30 June
2008 2007
GROUP CASH FLOW STATEMENTS R`000s R`000s
Net cash outflow from operating (7 825) (4 717)
activities
Net cash inflow / (outflow) from 2 923 (84)
investing activities
Net cash inflow from financing 5 145 4 270
activities
Net increase / (decrease) in cash and 243 (531)
cash equivalents
Cash and cash equivalents at (4 771) (4 240)
beginning of the year
Cash transferred to disposal group (6) -
held for sale
Cash and cash equivalents at end of (4 534) (4 771)
year
COMMENTARY
The directors present the abridged reviewed results for the year ended 30
June 2008(prepared in accordance with IAS 34 - Interim Financial Reporting).
The results have been reviewed by TAG Incorporated whose unmodified review
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 and with those applied in
previous periods.
RESULTS
Group Restructure
In the prior year, the group restructured its retail and mining assets so as
to accurately reflect the group`s two areas of operations. The mining
operations are conducted through Lenopodi (Proprietary) Limited ("Lenopodi")
and the retail operations are conducted through Absolute Tiles (Proprietary)
Limited ("Absolute Tiles").
The group has effectively completed its transition to a mining company as the
tile retail operation is being disposed of and the focus moves to the mining
activities of the group. As at the date of this report, the group employs
approximately 80 employees, 67 of which are in the mining division and the
remainder in the retail operations.
Full scale mining activities commenced at the Diamond Quartzite Quarry in the
second quarter of the financial year following the granting of the mining
rights, with revenues expected before the end of December this year due as
products are exported to Europe following the marketing and conclusion of
supply agreements. A second mining operation will commence before the end of
the financial year, as elaborated further in the Picture Stone announcement
below.
Lenopodi
Mining rights for Lekkersing, (held 90% by Lenopodi through Lubtalk
Investments (Proprietary) Limited ("Lubtalk"), were received in the first
half of the year and preliminary mining activities commenced 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. Commencement of mining operations began in the
second quarter in order to build up stock levels.
The value ascribed to goodwill in respect of the Quartzite project has been
reclassified to Mining Rights in the current year following the awarding of
the mining licence for the project. A Competent Persons Report ("CPR") has
been prepared, indicating resources with a value in excess of R100 million.
The full CPR and valuation will be included in the circular to shareholders
detailing the Qinisele transaction referred to below.
The remaining 10% of Lubtalk is held by Richtersveld Ontwikkelings Maatskappy
Beperk, a company representing over 2,700 residents of the Richtersveld
Community in Namaqualand. The total BEE shareholding of Lubtalk exceeds 26%,
as required by the Mineral and Petroleum Resources Development Act.
Lenopodi acquired the entire issued share capital of Niemoller Marmer (Edms)
Beperk ("Niemoller Marmer") on 31 March 2008 from R G Niemoller (Proprietary)
Limited. Niemoller Marmer holds a valid mining and prospecting right over a
sandstone deposit in the Northern Cape Province, known as Picture Stone. The
majority of the product to be mined is earmarked for the export market.
Absolute Tiles (Proprietary) Limited ("Absolute Tiles")
Included in the overall loss for the year of R7,9 million of the Group and
reflected as Discontinued operations is a loss of R5,7 million of which R4,7
million is attributable to the losses incurred by Absolute Tiles in the
financial year. The balance represents an impairment of the assets being held
for sale as the company is actively engaged in disposing of the business to
be able to focus on its core mining assets. The losses incurred are mainly
due to the very competitive market the business operates within and is also
due to limited focus and working capital to realise its full potential.
RIGHTS OFFER AND CHANGE IN CONTROL
The company has issued a rights offer circular 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 4.0016 Absolute shares held. The proceeds of
the rights offer will 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, had fully underwritten the rights
offer in order to guarantee its success. At the Annual General Meeting held
on Wednesday 7 November 2007, eligible shareholders approved a waiver from
making a mandatory offer to minority shareholders in accordance with Section
8.7 of the Securities Regulation Code ("the 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. Pursuant to the closing
of the rights offer, Calulo`s shareholding in Absolute has increased to 43%,
representing a change in control as defined in the Code.
APPOINTMENT OF CHIEF EXECUTIVE OFFICER AND EXECUTIVE DIRECTOR
In view of the group`s increased focus on becoming a junior miner, the
company has employed a Chief Executive Officer, namely Mark Rosslee, to head
up the company going forward. Mark has a wealth of mining experience and his
appointment is regarded as a strategic step in the right direction.
SEGMENTAL ANALYSIS
31 December 2008
Head
R`000 Retail Office Property Mining Total
Revenue - - - - -
Net loss (5 723) (1 217) (21) (928) (7 889)
Mining costs are no longer capitalised as mining operations have commenced,
however development and stripping costs are capitalised and amortised over
the useful life of the mine.
SUBSEQUENT EVENTS AND WITHDRAWAL FROM NEGOTIATIONS WITH MVUZO MINING (PTY)
LTD
Other than the rights offer and the proposed acquisition of 25.1% of
Qinisele, which is still subject to shareholder approval, there have been no
significant events after the year end. The purchase price of R20 000 000.04
will be settled through the issue of 333 333 334 new ordinary shares in
Absolute at an issue price of 6 cents per share. A full circular is planned
for release in November whereby shareholders will be notified of the details
of the transaction, its impact on the results of the company as well as
requesting shareholders to approve the transaction. A summary of the recently
completed Competent Persons Report prepared on the resource of the Diamond
Quartzite at Lekkersing will be included in the circular.
Shareholders are advised that the company has decided not to continue
negotiations to acquire two coal mine deposits from Mvuzo Mining, however,
the company continues to evaluate potential acquisitions in the mining
sector.
CONTINGENT LIABILITIES
There has been no change in the status of the contingent liabilities since
the 30 June 2007.
DIVIDENDS PAID AND RECOMMENDED
No dividends were paid or declared during the accounting period under review
and none are recommended at this stage (2007: nil).
SHARE CAPITAL
As at 30 June 2008 there were 856 374 875 ordinary issued shares of one cent
each and 643 625 125 unissued ordinary shares.
During the year under review the following shares were issued:
- 5 000 000 shares were issued to WP Boshoff in settlement of obligations
at 3 cents per share; 66 666 667 vendor shares were issued to RG
Niemoller (Pty) Ltd at 3 cents per share for the acquisition of
Niemoller Marmer; 45 000 000 vendor shares were issued for the
acquisition of the businesses of prospecting and mining quartzite in the
Richtersveld region from Allied Quartzite (Pty) Ltd and Richtersveld
Quartzite (Pty) Ltd at 4 cents per shares. Through the acquisition of
the vendor shares, Calulo Resources has increased its BEE shareholding
in Absolute.
The authorised share capital of 1 000 000 000 shares of 1 cent each was
increased by 500 000 000 shares to 1 500 000 000 shares of 1 cent each.
The shareholders will be asked to place the unissued ordinary shares under
the control of the directors at the forthcoming annual general meeting.
FUTURE PROSPECTS
As the company focuses its attention to develop the existing mining
opportunities and evaluate potential acquisitions, the company is currently
under cautionary and it should be in a more equitable and cash generative
position this time next year. With the planned acquisition of Qinisele and
rights offer the company will be suitably placed to enhance the return to all
shareholders. However with the current turmoil in global equity and debt
markets, the achievement of these objectives is subject to a return to
normality of these markets in the upcoming financial year.
DIRECTORS
Save for the appointment of the chief executive officer as well his
appointment to the board as executive director with effect from 1 September
2008, there were no other changes to the board during the year under review.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised that the company is still in negotiations which, if
successfully concluded, may have a material impact on the price at which the
company`s securities trade. Accordingly, shareholders are advised to
continue to exercise caution when dealing in the company`s securities.
By order of the board
M K Diale AM Sher
14 October 2008
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
MW Rosslee
JJ Serfontein*
GP Sequeira
(* Non-executive)
Sponsor
Arcay Moela Sponsors (Pty) Ltd
Transfer office
Computershare Investor Services (Proprietary) Limited
Date: 14/10/2008 17:29:01 Produced by the JSE SENS Department.
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