| Tue 6 Dec 2005, 8:57 | | Cyberhost - Audited Results For The Year Ended 30 |
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Cyberhost - Audited Results For The Year Ended 30 June 2005, The 18 Months Ended
30 June 2004 And Acquisitions Of Top Restaurants Holdings (Proprietary) Limited
"Top Restaurants" And Intranet It Platform "Intranet"
CYBERHOST LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013649/06)
Share code: CYB ISIN Code: ZAE000017471
("Cyberhost" or "company")
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2005, THE 18 MONTHS ENDED 30 JUNE
2004 AND ACQUISITIONS OF TOP RESTAURANTS HOLDINGS (PROPRIETARY) LIMITED "TOP
RESTAURANTS" AND INTRANET IT PLATFORM "INTRANET"
RESULTS
Balance Sheets
Audited Audited Audited as
as at as at at
30 June 30 June 31 December
2005 2004 2002
R"000 R"000 R"000
ASSETS
Non-current assets 81 81 82
Plant, equipment and vehicles 1 1 2
Long-term receivable 80 80 80
Current assets 108 46 184
Accounts receivable trade and 100 33 181
other
Cash resources 8 13 3
Total assets 189 127 266
EQUITY AND LIABILITIES
Capital and reserves (144) (247) (2 848)
Shareholders" funds (144) (247) (2 848)
Non-current liabilities 210 210 --
Long-term liabilities 210 210 --
Current liabilities 123 164 3 114
Accounts payable and 123 164 2 840
provisions
Current portion of long term 274
borrowings
Total equity and liabilities 189 127 266
Ordinary shares in issue
(000"s)
At period end 101 388 101 388 83 815
Net asset value per share
information
Net asset value per share (0.14) (0.24) (3.40)
(cents)
Net tangible asset value per (0.14) (0.24) (3.40)
share (cents)
Income Statements
Audited for Audited for Audited for
the year the 18 the year
ended months ended
30 June ended 31 December
2005 30 June 2002
R"000 2004 R"000
R"000
Revenue 70 2 96
Cost of sales 1 3 (4)
Gross profit 68 (1) 92
Operating expenses (8) (222) (461)
Operating profit/(loss) 60 (223) (369)
Other income 43 2 648 73
Finance cost -- -- (23)
Net profit/(loss) from 103 2 424 (319)
activities before and after
tax
Calculation of headline
earnings
Net profit for the period 103 2 424 (319)
Adjustments for:
Loss on disposal of -- -- (68)
intangible assets
Compromise offer in terms of -- (2 646) --
section 311
103 (222) (387)
Tax effect of adjustments -- -- --
Headline profit/(loss) for 103 (222) (387)
the period
Earnings per share
information
Weighted average shares in 101 388 85 489 83 816
issue (000"s)
Attributable earnings/(loss) 0.10 2.84 (0.38)
per ordinary share (cents)
Headline earnings/(loss) per 0.10 (0.26) (0.46)
share (cents)
Abridged Cash Flow Statements
Audited Audited Audited
30 June 30 June 31 December
2005 2004 2002
R"000 R"000 R"000
Net cash inflow/(outflow) (6) (102) 43
from operating activities
Net cash inflow from -- 2 240
investing activities
Net cash inflow/(outflow) -- 110 (286)
from financing activities
Net increase/(decrease) in (6) 10 (3)
cash and cash equivalents
Cash and cash equivalents at 13 3 6
beginning of period
Cash and cash equivalents at 8 13 3
end of period
Statement of Changes in Equity
Share Share Accumulated Total
Capital premium loss
R"000 R"000 R"000 R"000
Balance at 01 January 2003 84 20 323 (23 255) (2 848)
Shares issued for cash in lieu 6 56 -- 62
of fees
Shares issued to in lieu of 11 102 -- 113
directors" emoluments for the
years ended 31 December 2001
and 31 December 2002
Net profit for the period 2 425 2 425
Balance at 30 June 2004 101 20 481 (20 830) (248)
Profit for the year -- -- 103 103
Balance at 30 June 2005 101 20 481 (20 727) (145)
COMMENTARY
The directors of Cyberhost announce the results for the year ended 30 June 2005
and the 18 months ended 30 June 2004. The accounting policies adopted for
purposes of this report comply, and have been consistently applied in all
material respects, with South African Statements of Generally Accepted
Accounting Practice (GAAP). The same accounting policies and methods of
computation have been followed as compared to the prior year. The results have
been audited by Lubbes Chartered Accountants and the detailed financial
statements and unqualified audit reports are available at their offices.
Shareholders are advised that the company adopted IFRS with effect from 1 July
2005.
Overview
Cyberhost"s operations are focussed on software, information technology,
communications, web hosting and internet connectivity.
Due to protracted delays in the finalisation of the section 311 settlement with
creditors the sellers of the business and assets of Mosaix Africa Technologies
trading as C-Tech cancelled the heads of agreement, which was subject to a
successful compromise offer.
On 3 December 2004 the company has completed the formal settlement with its
creditors in terms of the Companies Act. The result of the compromise offer is
that the company has regained its solvent position. Following the finalisation
of the compromise offer, the company has continued limited trading through the
licensing of re-sellers, the first being Exteq Realtime Systems.
During the last quarter of the year ended 30 June 2005, the company was
approached to acquire the Mabili Group of companies, in which the chairman, Mr
JC Human holds a significant interest. At the stage where negotiations reached
heads of agreement, the company was approach by Sekunjalo Capital for an
alternative acquisition of Top Restaurants and Intranet. The directors have
decided to cancel the proposed transaction with Mabili in favour of the Top
Restaurants and Intranet transactions, which, inter alia, offers Cyberhost
access to web-based software specific to the restaurant industry with hosting
possibilities and an initial client base. Shareholders are referred to the
acquisition announcement below.
Results
The results for the period ended 30 June 2005 reflect attributable earnings of
0.10 cents per share (2004: 2.84 cents per share). The company achieved headline
earnings of 0.10 cents per share (2004: headline loss of 0.26 cents per share).
The completion of the section 311 compromise with creditors resulted in a relief
of liabilities to the company of R 2 647 946 and has been recognised as sundry
income in the income statement for the 18 months ended 30 June 2004.
Issue of shares
0n 5 May 2004, the company issued 6 286 188 shares at 1 cent per share to Arcay
Client Support (Pty) Ltd in settlement of fees for services rendered. Similarly
9 286 187 shares were issued to MH Weetman and 2 000 000 to JC Human at 1 cent
per share in lieu of directors fees, which issue was approved by shareholders at
the annual general meeting held on 30 April 2004.
Subsequent events
Subsequent to 30 June 2005 the company entered into an agreement to acquire the
shares in Top Restaurants and Intranet. Shareholders are referred to the
acquisition announcement below.
Director changes
V Stoliarov was removed from the board on 11 July 2005. LM Wright was appointed
to the board on 19 November 2005.
Dividends
No dividend has been declared for the periods ended 30 June 2004 and 30 June
2005.
ACQUISITION ANNOUNCEMENT
1. Introduction
Following the signing of an agreement dated 29 November 2005, the board of
directors of Cyberhost are pleased to announce the acquisition by Cyberhost of
the shares and claims in Top Restaurants and Intranet with effect from 1
September 2005, subject to the conditions precedent set out in paragraph 4
below.
The purchase consideration for Top Restaurants is R60 325 304.60, comprising R31
710 589.60 for the 100% effective shareholding held by the Queensgate Leisure
Holdings (Proprietary) Limited and R28 614 715 for the shareholders loan which
will be paid by the issue of 634 211 792 ordinary shares at 5 cents each for
shareholding and 143 073 575 cumulative redeemable preference shares at 20 cents
each for the shareholders loan. The preference shares will be convertible to
ordinary shares at a ratio of 1 preference share to 1 ordinary share.
The purchase consideration for Intranet is R950 000 which will be paid by the
issue of 19 000 000 ordinary at 5 cents each to Top Restaurant Brands
(Proprietary) Limited.
The Intranet IT platform is a web-based complete management information and
control system. The system allows management to draw down into the information
of each restaurant, anywhere in the world through the internet. This software
will be hosted to the restaurant industry. Top Restaurants is currently the
holding company for 21 company owned restaurants as well as 4 franchised
operations. Management information and control over the operations are mainly
exercised via the Intranet IT platform.
Top Restaurants caters for upmarket dining, with the exception of RJ"s family
restaurants which caters for family casual dining. The restaurant brands include
Famous Butchers Grill, Upstairs Asian Fusion , Amici"s, The Cape Fish Company
and RJ"s.
2. Rationale for the acquisitions
The rationale for the acquisitions of Top Restaurants and Intranet is to create
a captive client base for the internet and web-hosting products of Cyberhost and
to diversify its operations into the leisure industry, which is seen by the
directors as a growth industry in South Africa. Intranet forms an integral part
of the strategy forward to expand the brands and the Group as a whole.
3. Financial Effects of the acquisitions
The table below summarises the pro forma financial effects of the acquisitions
of Top Restaurants and Intranet on the audited results of Cyberhost as published
in this announcement for the year ended 30 June 2005 as though the acquisition
had been in effect from 01 July 2004 and is the responsibility of the directors.
The pro forma financial effects have been prepared for illustrative purposes
only and due to their nature, may not give a fair reflection of Cyberhost after
the acquisition.
Published Pro forma Percenta Pro forma Percentage
30 June 2005 30 June ge 30 June 2005 change
2005 change After
Before1 Acquisition
After (%) of Top (%)
acquisiti Restaurants and
on Intranet6
of Top
Restauran
ts
Attributable 0.10 (0.51)2 (611.6)% (0.49)3 (587.5)%
earnings/(lo
ss) per
share
(cents)
Headline 0.10 (0.51)2 (611.6)% (0.49)3 (587.5)%
earnings/(lo
ss) per
share
(cents)
Net asset 0.14 15.1 10 15.0 10 7605.0%
value 710.6%
(cents)
Tangible net 0.14 10.1 7 127.3% 10.1 7 116.8%
asset value
per share
(cents)
Weighted 85 489 781 000 670.3% 800 000 000 689.0%
average no.
of shares in
issue (`000)
Shares in 101 388 781 000 670.3% 800 000 000 689.0%
issue at
year end
(`000)
Notes:
The Before column is based on extracts from the audited financial information as
published by Cyberhost for the year ended 30 June 2005.
The net income before taxation for Top Restaurants for the year ended 28
February 2005, after an adjustment for notional tax of 30%, has been used to
calculate earnings and headline earnings per share as though the acquisition had
been implemented for a 12-month period.
Depreciation on Intranet has been calculated over an expected useful lifetime of
7 years.
Circular costs of R400 000 and an adjustment for 30% notional taxation has been
assumed.
Goodwill arising from the acquisition has not been amortised.
A coupon rate of 6% has been taken into account
4. Conditions precedent
The acquisitions are subject to the normal conditions precedent that would be
applicable to transactions of this nature, which conditions are indivisible and
include, inter alia, the following:
- Approval of the JSE Limited;
- the Securities Regulation Panel (SRP);
- the completion of a due dillegence by the Vendors of Top Restaurants on
- Cyberhost on or before 15 December 2005;
- and the approval by shareholders in a general meeting.
Shareholders are advised that approval of the acquisition will result in a
change of control and application will be made to the SRP for the waiver of an
offer to minority shareholders. Application will be made for the lifting of the
suspension of trade in the company"s securities, following the approval of the
acquisitions. Shareholders are however further advised that the lifting of the
suspension is at the discretion of the JSE and contingent upon the JSE"s
assessment of the suitability for listing of the company after the proposed
acquisition.
5. Documentation
A circular containing full details of the acquisitions, the change in control,
revised listing particulars and a notice of general meeting of Cyberhost
shareholders is in the process of being prepared and will be posted to
shareholders. Following the acquisitions, new articles of association will be
adopted for Top Restaurants Holdings (Pty) Ltd for the subsidiary company to
conform with Schedule 10 of the JSE Listing Requirements.
By order of the Board
Colin Human
Chairman
06 December 2005
Johannesburg
Company Secretary and Registered Office
Arcay Client Support (Pty) Ltd (Registration number
1998/025284/07)
Arcay House, Number 3 Anerley Road, Parktown, 2193
PO Box 62397, Marshalltown, 2107
Directors
JC Human Chairman*, MH Weetman, MS Langman, LM Wright*
(*Non-executive)
Sponsor Transfer Office
Arcay Corporate Services Computershare
ARCAY BUSINESS INCENTIVES
Tel : +27 12 349 1088
Fax : +27 12 349 2100
Cell : +27 83 419 8582
Email : snymw@arcay.co.za
This document is for the personal and private attention of the addressee and
should be read by the addressee only. Arcay Group Limited, its subsidiaries
and/or any of its associate companies accepts no liability and/or
responsibility whatsoever for all and any consequences arising out of but
not limited to the receipt by a party, other than the addressee, of this
communication. If you have received this communication in error, please
notify us immediately thereof by telephone. Kindly destroy this
communication immediately. Any form of reproduction, dissemination, copying,
disclosure, modification, distribution and/or publication of this
communication is strictly prohibited.
Date: 06/12/2005 08:58:25 AM Produced by the JSE SENS Department
