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PLC
PLC
PLC - Placecol - Financial Announcement And Renewal Of Cautionary
PLACECOL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2003/025374/06)
JSE code: PLC
ISIN: ZAE000102307
("Placecol" or "the company" or "the group")
ANNOUNCEMENT RELATING TO:
- THE WITHDRAWAL AND RE-ISSUE OF THE AUDITED RESULTS FOR THE YEAR ENDED 29
FEBRUARY 2008;
- THE REPURCHASE OF FURTHER SHARES FROM THE PLACECOL VENDORS;
- UPDATE ON THE PROFIT FORECAST FOR THE YEAR ENDING 28 FEBRUARY 2009; AND
- RENEWAL OF THE CAUTIONARY ANNOUNCEMENT
1. WITHDRAWAL AND RE-ISSUE OF THE AUDITED RESULTS FOR THE YEAR ENDED 29
FEBRUARY 2008
Shareholders are referred to the announcements, dated 21 November 2008, 9
January 2009 and 2 February 2009 and are advised as follows:
Adjustments to the audited results for the year ended 29 February 2008:
The audited annual financial statements for the year ended 29 February 2008
contained various re-allocations and adjustments when compared to the reviewed
results for that year. Shareholders were advised that further adjustments, which
could result in a decrease in profit after tax, may be necessary, mainly as a
result of an increase in liabilities and a decrease in inventories. The Board
addressed the shortcomings of the financial department and initiated a thorough
investigation which produced the following results:
- Trade and other payables increased by R940k, mainly as a result of the
corrections made to various creditors` accounts which were previously not
accrued.
- Other financial liabilities increased by R620k due to corrections of
interest calculations.
- Inventories decreased by R838k, mainly as a result of the impairment of
certain inventory categories which amounted to R222K, as well as a write-
off of R616K which related to franchises which were sold during the year
ended February 2008, without the recording of the associated costs thereof.
- Trade and other receivables and other financial assets decreased by R196k,
mainly as a result of adjustments passed to correct accounting errors.
- Headline earnings decreased by R1.9 million, mainly as a result of
additional costs which were previously not expensed due to certain trade
and other payables which had not been recorded; associated costs related to
franchise stores which were not recoverable as well as the correction of
accounting entries.
- A further specific repurchase and cancellation of 19 806 322 ordinary
shares from the original Placecol vendors at an aggregate amount of R1.00
as set out below ("prior year adjustments").
The directors have accordingly withdrawn the annual financial statements for the
year ended 29 February 2008 and will issue revised annual financial statements
to all shareholders.
2. REVISED AUDITED RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2008
Revised Condensed Group Income Statement
Year ended 29 February 2008 Revised Withdrawn
Audited Audited
annual annual
financial financial
statements statements
R`000 R`000
Revenue 115 268 115 286
Cost of sales (35 618) (33 988)
Gross profit 79 650 81 298
Operating expenses (70 116) (69 790)
Operating profit 9 534 11 508
Other income 1 256 1 256
Investment revenue 984 984
Finance costs (2 063) (1 443)
Profit before taxation 9 711 12 305
Taxation (2 972) (3 683)
Profit for the period 6 739 8 622
Reconciliation of headline
earnings:
Profit attributable to 6 739 8 622
ordinary shareholders
Adjusted for loss on 97 97
disposal of property, plant
and equipment
Profit on sale of (1 074) (1 074)
intellectual property
5 762 7 645
Weighted average number of 118 349 658 118 349 658
shares in issue on which
earnings are based
Weighted average number of (11 893 (11 893
shares cancelled in terms of 332) 332)
specific repurchase approved
by shareholders on 2 October
2008 (1)
Further number of shares to (19 806 322) -
be cancelled in terms of a
specific repurchase due to
the adjustments made to the
financial results in the
revised financial statements
(2)
86 650 004 106 456 326
Weighted average number of
shares to be in issue after
the implementation of the
specific repurchases of
ordinary shares
Earnings per share (cents) 5.7 7.3
Headline earnings per share 4.9 6.5
(cents)
Earnings per share after the 7.8 8.1
implementation of the
specific repurchases of
ordinary shares (cents)
Headline earnings per share 6.7 7.2
after the implementation of
the specific repurchases of
ordinary shares (cents)
Notes:
1. The repurchase and cancellation of 11 893 332 shares and the 2 400 000
Share Incentive Scheme shares treated as treasury shares, which was
approved on 2 October 2008 by the shareholders as detailed in paragraph 3
below and which will be cancelled outside the company`s closed period.
2. The Revised Annual financial statements will necessitate the implementation
of a further repurchase of 19 806 322 ordinary shares from the Placecol
vendors as detailed in paragraph 3 below.
3. Changes to the income statement relate to balance sheet adjustments which
are detailed in the Notes to the Balance Sheet.
Revised Condensed Group Balance Sheet
At 29 February 2008 Revised Withdrawn
Audited Audited
financial annual
Notes statements financial
R`000 statements
R`000
ASSETS
NON CURRENT ASSETS 31 192 34 472
Property, plant and 8 018 8 018
equipment
Goodwill and intangible 6 17 643 21 010
assets
Finance lease 69 69
receivables
Deferred tax asset 5 2 228 2 141
Other financial assets 3 234 3 234
CURRENT ASSETS 53 576 54 610
Inventories 1 22 360 23 198
Loans to directors 188 188
Other financial assets 2 2 289 2 319
Finance lease 32 32
receivables
Trade and other 2 17 775 17 941
receivables
Cash and cash 10 932 10 932
equivalents
TOTAL ASSETS 84 768 89 082
EQUITY AND LIABILITIES
EQUITY 51 652 56 902
Share capital 6 44 084 47 451
Retained income 7 568 9 451
LIABILITIES 33 116 32 180
NON CURRENT LIABILITIES 11 224 10 604
Other financial 3 9 544 8 924
liabilities
Finance lease 663 663
obligations
Operating lease 1 004 1 004
liability
Deferred tax 13 13
CURRENT LIABILITIES 21 892 21 576
Other financial 4 003 4 003
liabilities
Current tax payable 5 4 390 5 014
Finance lease obligation 175 175
Trade and other payables 4 11 223 10 283
Income received in 2 101 2 101
advance
TOTAL EQUITY AND 84 768 89 082
LIABILITIES
Number of shares in 132 504 132 504
issue at period end 976 976
Number of shares to be (14 293 (14 293
cancelled in terms of 332) 332)
specific repurchase
approved by shareholders
on 2 October 2008 (6)
Further number of shares (19 806 -
to be cancelled in terms 322)
of a specific repurchase
due to the prior year
adjustments (6)
Number of shares to be 98 405 322 118 211
in issue after the 644
implementation of the
specific repurchases of
ordinary shares
Net asset value per 38.9 42.9
share (cents)
Net tangible asset value 25.7 27.1
per share (cents)
Net asset value per 52.5 48.1
share after the
implementation of the
specific repurchases of
ordinary shares (cents)
Net tangible asset value 34.6 30.4
per share after the
implementation of the
specific repurchases of
ordinary shares (cents)
Notes:
The commentary below comprises a brief description of the changes to the balance
sheet items:
1. Inventories of R838k were written off mainly as a result of franchises
which were sold during the year ended February 2008, without the recording
of the associated costs.
2. Trade and other receivables and other financial assets were adjusted by
R166k and R30k, respectively, mainly as a result of an adjustment to
correct accounting entries and a reclassification of other financial
assets.
3. Other financial liabilities increased by R620k, as a result of a correction
to an instalment sale contract.
4. Trade and other payables increased by R940k mainly due to the correction of
certain marketing creditors. The necessary corrective actions have been
implemented by management to ensure that trade and other payables are
complete.
5. Current tax payable and deferred taxation were amended as a consequence of
the adjustments required above.
6. The decrease in share capital and goodwill relates to the repurchase of
shares from the vendors and cancellation thereof as set out in paragraph 3
below.
Revised Condensed Group Statements of Changes in Equity
Year ended 29 February 2008 Revised Withdrawn
Audited Audited
annual annual
financial financial
statements statements
R`000 R`000
Balance at beginning of period 20 815 24 182
(1)
Issue of share capital 24 098 24 098
Net profit for the period 6 739 8 622
Balance at end of period 51 652 56 902
Note:
1. The reduced balance at the beginning of the year relates to the adjustment
pertaining to the business combination due to the repurchase and
cancellation of shares as set out in paragraph 3 below.
Revised Condensed Group Cash Flow Statement
Year ended 29 February 2008 Revised Withdrawn
Audited Audited
annual annual
financial financial
statements statements
R`000 R`000
Net cash from operating (16 671) (16 051)
activities
Net cash from investing 326 326
activities
Net cash from financial 21 174 20 554
activities
Net increase in cash and cash 4 829 4 829
equivalents
Cash and cash equivalents at 6 103 6 103
beginning of period
Total cash at end of period 10 932 10 932
There have been changes to the cash flow statement as a result of the changes to
the income statement and balance sheet.
Revised Segmental Information
Revised Withdrawn
Year ended 29 February 2008 Audited Audited
annual annual
financial financial
statements statements
R`000 R`000
Revenue
Brands 84 851 84 869
Supply chain support 30 417 30 417
115 268 115 286
Profit before Taxation
Brands 4 286 6 880
Supply chain support 5 426 5 425
9 712 12 305
Depreciation
Brands 1 874 1 874
Supply chain support 567 567
2 441 2 441
There have been changes to the segmental information as a result of the changes
to the income statement.
3. REPURCHASE OF FURTHER SHARES FROM THE ORIGINAL PLACECOL VENDORS
The company`s Prospectus incorporated details of the restructuring of the
company and the requirement to repurchase shares from the original vendors
should the consolidated net profit after tax for the year ended 29 February 2008
be less than R9.2 million. Shareholders are referred to the announcement, dated
5 September 2008, which contained details of the repurchase and cancellation of
11 893 332 shares from such original Placecol vendors, which repurchase was
approved by shareholders at the annual general meeting on 2 October 2008.
Having regard to the aforementioned, it will be necessary to repurchase and
cancel a further 19 806 322 ordinary shares for an aggregate amount of R1.00.
4. UPDATE ON THE PROFIT FORECAST FOR THE YEAR ENDING 28 FEBRUARY 2009
With reference to the announcements, dated 21 November and 9 January 2009,
shareholders are advised that the Board does not believe that it would be
meaningful at this late stage to release a revised detailed profit forecast for
the year ending 28 February 2009.
The company has sold certain franchises, the funding for which has been approved
by certain financial institutions. The company expects to receive payment in
respect thereof in the very near future however the directors believe it prudent
not to release a trading update until such time as it has received payment for
these franchise sales. A trading update will therefore be released as soon as
the company is reasonably certain, in terms of the Listings Requirements, of its
results in respect of the 2009 financial year.
5. BASIS OF PREPARATION OF THE REVISED AUDITED RESULTS
Statement of compliance
The condensed revised financial statements comprise a consolidated balance sheet
at 29 February 2008, a consolidated income statement, consolidated statement of
changes in equity, summarised consolidated cash flow statement and segmental
report for the 12 months ended 29 February 2008. The condensed revised
financial statements have been prepared in accordance with the recognition and
measurement criteria of International Financial Reporting Standards and the
presentation and disclosure requirements of IAS 34, Interim Financial Reporting,
the JSE Listings Requirements and the South African Companies Act. The
accounting policies applied for the year are consistent with those of the
previous year with the exception of the adoption of IFRS 7.
Basis of measurement
The revised financial statements have been prepared on the historic cost basis
except for certain financial instruments measured at fair value.
6. REVISED AUDITED RESULTS
The auditors, RSM Betty & Dickson`s (Tshwane), have audited these revised
results and their unmodified audit opinion is available for inspection at the
company`s registered office.
7. RENEWAL OF CAUTIONARY ANNOUNCEMENT
Until such time as a trading update is released relating to the year ending 28
February 2009, shareholders are advised to continue to exercise caution when
dealing in their Placecol shares.
Midrand
20 February 2009
Designated Adviser
Vunani Corporate Finance
Date: 20/02/2009 16:38:03 Produced by the JSE SENS Department.
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