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ELE
ELE
ELE - Elementone - Reviewed Condensed Financial Results For The Half Year
Ended 30 September 2008
ELEMENTONE LIMITED
(formerly Avusa Limited, formerly Johnnic Communications Limited) Incorporated
in the Republic of South Africa
Registration number: 1889/000352/06
Share code: ELE
ISIN code: ZAE000115887
American Depositary Receipt (ADR) programme CUSIP no: 47805P102
ADR to ordinary share: 1:1
Reviewed condensed financial results for the half year ended
30 September 2008
Income statement
Reviewed Audited Restated
six months year ended six months
ended 31 March ended
30 September 2008 30 September
2008 Rm 2007
Rm Rm
Continuing operations
Net finance income 17 133 15
Finance income 17 134 26
Finance costs - (1) (11)
Operating expenses (4) (9) (45)
Profit (loss) before exceptional 13 124 (30)
items and taxation
Exceptional items (388) 1 156 1 590
Fair value adjustment (418) 1 156 1 590
Profit on sale of current asset 30 - -
(Loss) profit after exceptional (375) 1 280 1 560
item before taxation
Taxation (Note 2) 51 (139) (144)
(Loss) profit after taxation (324) 1 141 1 416
Profit from discontinued operations - 2 903 333
(net of tax)
Net (loss) profit for the period (324) 4 044 1 749
Attributable to:
Shareholders of ElementOne (324) 4 032 1 743
Minority interest - 12 6
(324) 4 044 1 749
Attributable (loss) earnings per
ordinary share (cents)
Basic (312) 3 883 1 679
Diluted (312) 3 883 1 674
Attributable (loss) earnings per
ordinary share from continuing
operations (cents)
Basic (312) 1 099 1 358
Diluted (312) 1 099 1 354
Attributable earnings per ordinary
share from discontinued operations
(cents)
Basic - 2 784 321
Diluted - 2 784 320
Number of ordinary shares in issue
(`000)
At beginning and end of period 103 821 103 821 103 821
Weighted average for the period 103 821 103 821 104 100
(diluted)
Balance sheet
Reviewed Audited Reviewed
as at as at as at
30 September 31 March 30 September
2008 2008 2007
Rm Rm Rm
ASSETS
Non-current assets 1 745 2 163 3 798
Investments and loans (Note 4) 1 745 2 163 2 682
Other non-current assets - - 1 116
Current assets 41 301 3 183
Cash resources 41 166 825
Investments - 135 158
Other current assets - - 2 200
Total assets 1 786 2 464 6 981
EQUITY AND LIABILITIES
Capital and reserves
Interest of ElementOne shareholders 1 687 2 011 4 423
Minority interest - - 40
Total equity 1 687 2 011 4 463
Non-current liabilities 63 134 606
Deferred taxation liabilities 63 134 174
Other non-current liabilities - - 432
Current liabilities 36 319 1 912
Payables and other current 36 319 1 746
liabilities
Bank overdraft - - 166
Total equity and liabilities 1 786 2 464 6 981
Statement of changes in equity
Share Share Other
capital premium reserves
Rm Rm Rm
Balance at 31 March 2007 10 796 67
Total income and expenses recognised (18)
Income and expenses recognised (21)
directly in equity
Attributable earnings 3
Effect of acquisitions and disposals
Dividends on ordinary shares
Balance at 30 September 2007 10 796 49
Total income and expenses recognised 21
Income and expenses recognised (1)
directly in equity
Attributable earnings 22
Effect of acquisitions and disposals (70)
Dividends in specie (796)
Balance at 31 March 2008 10 - -
Attributable loss
Balance at 30 September 2008 10 - -
Statement of changes in equity (continued)
Accumulated Shareholder Minority Total
profits interest interest equity
Rm Rm Rm Rm
Balance at 1 950 2 823 39 2 862
31 March 2007
Total income and 1 743 1 725 6 1 731
expenses recognised
Income and expenses (21) (21)
recognised directly in
equity
Attributable earnings 1 743 1 746 6 1 752
Effect of acquisitions (5) (5)
and disposals
Dividends on ordinary (125) (125) (125)
shares
Balance at 3 568 4 423 40 4 463
30 September 2007
Total income and 2 289 2 310 6 2 316
expenses recognised
Income and expenses (1) (1)
recognised directly in
equity
Attributable earnings 2 289 2 311 6 2 317
Effect of acquisitions 45 (25) (46) (71)
and disposals
Dividends in specie (3 901) (4 697) (4 697)
Balance at 2 001 2 011 - 2 011
31 March 2008
Attributable loss (324) (324) (324)
Balance at 1 677 1 687 - 1 687
30 September 2008
Cash flow statement
Reviewed Audited Reviewed
six months year ended six months
ended 31 March ended
30 September 2008 30 September
2008 Rm 2007
Rm Rm
Net cash (used in) generated (289) 54 41
from operating activities
Cash generated from (used in) 164 (641) (149)
investing activities
Cash used in financing - (123) (114)
activities
Net decrease in cash resources (125) (710) (222)
Cash resources at beginning of 166 881 881
period
Foreign operations translation - (5) -
adjustment
Cash resources net of overdraft 41 166 659
at end of period
Notes
1.?Basis of preparation and accounting policiesThe condensed interim financial
statements for the six months ended 30 September 2008 have been prepared using
accounting policies compliant with International Financial Reporting Standards
(IFRS) and are in compliance with IAS 34, Interim Financial Reporting, the JSE
Limited`s Listings
Requirements and the South African Companies Act. The accounting policies and
basis of preparation are consistent with those used in prior periods.
Reviewed Audited Reviewed
six months year ended six months
ended 31 March ended
30 September 2008 30 September
2008 Rm 2007
Rm Rm
2.?Taxation
Taxation credit (debit)
comprises:
Normal taxation (3) (14) -
Capital gains taxation (17) - -
Deferred taxation reversal 71 (125) (144)
(charge) on fair value
adjustments
51 (139) (144)
3.?Reconciliation between
attributable and headline
earnings
Attributable (loss) earnings (324) 4 032 1 743
Profit on disposal of Pay - (2 451) -
Television and Naspers N shares
Other - (2) 2
Headline (loss) earnings (324) 1 579 1 745
Headline (loss) earnings per
ordinary share (cents)
Basic (312) 1 521 1 681
Diluted (312) 1 521 1 676
Number of ordinary shares in
issue (000)
At beginning and end of period 103 821 103 821 103 821
Weighted average for the period 103 821 103 821 104 100
(diluted)
4.
Investments
The company`s economic direct and indirect interest in Caxton and CTP Publishers
and Printers Ltd (CAT) is made up as follows:
80 065 330 CAT listed shares equivalent to a direct interest of 16,154% of CAT
and effective 86 421 408 CAT shares held indirectly equivalent to an indirect
interest of 17,437% of CAT
5. Subsequent events
There are no reportable subsequent events.
6. Reviewed results
These condensed interim financial statements have been reviewed by our auditors,
Deloitte & Touche.
A copy of their unmodified review report is available for inspection at the
company`s registered office.
Commentary
Apart from cash, the company now has only one significant asset, being its 33,6%
direct and indirect investment in Caxton and CTP Publishers and Printers Ltd
(CAT). During the period under review, the holding of 1,09 million MTN Group Ltd
shares was sold for R164,4 million, which realised a profit of R29,9 million,
against which a provision for capital gains tax of R16,6 million has been
raised.
For the six months ended 30 September 2008, the company received investment
income comprising dividends and interest of R17,4 million and incurred operating
expenses of R4,2 million. This resulted in a profit before exceptional items and
tax of R13,2 million. Also brought to account as exceptional items were the
profit realised on the sale of the MTN Group Ltd shares of R29,9 million and an
unrealised fair value loss on the CAT investment of R346,8 million. After
providing for normal and capital gains tax of R19,9 million and a reversal of
deferred taxation on the fair value adjustment of R70,9 million, the company has
recorded a loss for the period of R323,6 million.
The comparative income statement figures for the corresponding period in 2007,
which include the operating results of both MNet Supersport and the present
Avusa Ltd, reflected an after tax profit of R1 749 million. To make the income
statement figures for 2007 meaningful, the profit contribution from MNet
Supersport and Avusa are shown in aggregate as being from discontinued
operations, with all other amounts being directly applicable to the activities
of ElementOne.
The cash resources of the company have been significantly reduced after settling
legacy tax liabilities of R301,7 million and at 30 September 2008 amounted to
R40,7 million (31 March 2008 - R166 million). Since that date, R86,6 million has
been received as dividends from the CAT investment.
At 30 September 2008 the net asset value of the company, based on the ruling
price of a CAT share at that date, and after discounting the indirect holding by
20 per cent, which is consistent with past practice, was R16,25 per share. At 26
November 2008 the net asset value was R15,96 per share.
CAT has released its financial results for the year ended 30 June 2008, the
highlights of which were:
-?Turnover grew by 8,4% to R4 342,7 million.
-?Margins remained under pressure for the entire period which resulted in the
profit from operating activities increasing by a lower percentage of 4,3% to
R893,9 million.
-?After taking into account finance income and the contribution to profits made
by associates attributable earnings for the year were R654,9 million compared to
R611,1 million for 2007, an improvement of 7,2%.
-?Earnings per share increased from 127 cents to 139,1 cents. Headline earnings
per share increased from 121,7 cents to 135,2 cents. A dividend for the year of
52 cents (2002 50 cents) per share was declared which was paid on 27 October
2008.
-?Cash and cash equivalents at year end were R1 billion.
Shareholders are also advised that Avusa, which now owns all the operations
previously owned by ElementOne, and which were unbundled as at 31 March 2008,
released interim results on 20 November 2008.
In the light of the JSE Limited delisting ruling of which shareholders have been
advised in the past, the directors continue to carefully consider the immediate
future of the company. As soon as the Board is able to do so, shareholders will
be advised of the options open to the company and the proposed course of action.
Francois van der Merwe Colin Brayshaw
Director Director
For and on behalf of the board
Johannesburg
27 November 2008
Directors: CB Brayshaw, WS Moutloatse, FJ van der Merwe, D Vlok
Company secretary: Probity Business Services (Proprietary) Limited
Address: 3rd Floor, JHI House, 11 Cradock Avenue, Rosebank, Johannesburg
Sponsor: Nedbank Limited
1 December 2008
Date: 01/12/2008 15:00:04 Produced by the JSE SENS Department.
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