| Wed 3 Jun 2009, 14:42 | | EUR - Eureka Industrial Limited - Reviewed results for the year ended 28 |
|
EUR
EUR
EUR - Eureka Industrial Limited - Reviewed results for the year ended 28
February 2009 and notice of a general meeting
Eureka Industrial Limited
("Eureka" or "the Company")
(Registration number: 1938/010958/06)
JSE share code: EUR
ISIN code: ZAE000002523
REVIEWED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2009
2009 2008
Reviewed Audited
R`000s R`000s
GROUP INCOME STATEMENT
Revenue 103,171 82,027
Turnover 57,771 48,132
Cost of Sales (34,162) (31,005)
Profit before other income and expenses 23,609 17,127
Other Income 9,941 31,400
Operating expenditure (47,443) (28,803)
Profit on sale of tangible assets 12 19
Net (deficit)/surplus on revaluation of
long-term investments (22,514) 476
Profit on disposal of long-term investments 32,354 -
Profit on disposal of investment property - 1,274
Finance income 3,105 1,221
Finance costs (4,965) (4,802)
(Loss)/profit before tax (5,901) 17,912
Taxation (10,531) (1,699)
(Loss)/profit attributable to equity
shareholders (16,432) 16,213
GROUP BALANCE SHEET
ASSETS
Non-current assets 16,152 71,587
- Property, plant and equipment 2,581 2,468
- Equity investments 13,571 69,119
Current assets 166,308 146,347
- Inventories 8,602 8,752
- Trade and other receivables 23,473 36,643
- Cash and cash equivalents 97,897 66,286
- Equity investments 36,336 34,666
Total assets 182,460 217,934
EQUITY
Capital and reserves 133,247 195,542
- Share capital 220 250
- Reserves 133,027 195,292
LIABILITIES
Non-current liabilities 2,082 141
- Interest bearing borrowings 2,082 141
Current liabilities 47,131 22,251
- Trade and other payables 12,248 9,587
- Provisions 977 427
- Current tax payable 6,343 2,735
- Interest bearing borrowings 27,563 9,502
Total equity and liabilities 182,460 217,934
GROUP STATEMENT OF CHANGES IN EQUITY
Share capital 220 250
- Ordinary shares
- Balance at beginning of the year 150 150
- Treasury shares purchased during the year (30) -
- Balance at end of the year 120 150
- Preference shares 100 100
Retained income
- Balance at beginning of the year 186,010 188,997
- Net (loss)/profit for the year (16,432) 16,213
- Ordinary dividend paid - (19,200)
- Treasury shares purchased during the year (45,833) -
- Balance at end of the year 123,745 186,010
Non-distributable reserve 9,282 9,282
Total capital and reserves at end of year 133,247 195,542
GROUP CASH FLOW STATEMENT
Cash flows from operating activities 31,504 (25,928)
Cash flows from investing activities (19,914) 107,902
Cash flows from financing activities 20,021 (18,588)
Net increase in cash & cash equivalents 31,611 63,386
Cash and cash equivalents at the beginning year 66,286 2,900
Cash and cash equivalents at end of year 97,897 66,286
RECONCILIATION OF EARNINGS TO
HEADLINE EARNINGS
(Loss)/profit attributable to equity
Shareholders (16,432) 16,213
Net deficit/ (surplus) on revaluation of
long-term investments 22,514 (476)
Profit on disposal of long-term investments (32,354) -
Profit on disposal of tangible assets (12) (19)
Profit on disposal of investment property - (1,274)
Headline earnings (26,284) 14,444
ORDINARY SHARES
Number of shares in issue at year end (`000s) 1,920 2,400
Weighted average number of shares in
issue (`000s) 2,297 2,400
Treasury shares held at year end (`000s) 480 -
Earnings per share (cents) (715.4) 675.5
Diluted earnings per share (cents) (715.4) 675.5
Headline earnings per share (cents) (1144.3) 601.8
Diluted headline earnings per share (cents) (1144.3) 601.8
Net tangible asset value per share (cents) 6,935 8,143
BASIS OF PREPARATION
The board of directors present the financial statements for the year ended 28
February 2009.These results have been prepared in accordance with International
Financial Reporting Standards (IFRS) and in compliance with IAS 34. The Group`s
auditors, Levenstein and Partners, have reviewed the Group`s results and their
review opinion will be available at the registered office of Eureka in due
course.
REVIEWED RESULTS
The Group operates substantially as an investment trust with most of its
investments being in equities listed on the JSE. It is currently underinvested
because it believes that market conditions will be volatile and difficult for
much longer than most analysts predict.
In anticipation of a substantial downturn in markets, Eureka sold the majority
of its listed investments in the previous financial year, before the worldwide
collapse of share prices. Some of its remaining shares were sold during the
current year, but at less than their market value reported at 29 February 2008
and therefore, although meaningful profits were realised on actual cost, a
trading loss is reflected for the current financial year. This loss was
increased by the capital gains tax payable on the actual profits realised.
The electrical engineering division, in which the Group has a 45% interest,
achieved yet another record year in turnover and profits. The machine tool and
leasing divisions experienced very difficult markets and the breadth of their
activities were further reduced.
During the year the Group purchased 480,000 of its own shares, being the 20%
maximum that it was allowed to purchase, and these shares are currently held as
`Treasury Shares`.
DELISTING OF EUREKA`S SHARES
The rules and regulations of the JSE, provide a framework for the relationship
between Eureka and its shareholders. It is understandable that, over a period of
time, changes to the rules that are appropriate for the majority do not
necessarily take into account the unique set of circumstances of a small handful
of listed companies, such as Eureka. For these companies compliance with some of
the new regulations is difficult to implement and imposes excessive costs
without any discernable benefits. After nearly 70 years as a JSE-listed company,
Eureka now finds itself in this position.
More than 99% of the shares of Eureka are owned by five independent entities of
the Price family. Only 18,889 of the issued shares, spread among 73 individual
shareholders, are not in the hands of these five shareholders. Most of the
owners of these 18,889 shares are untraceable and only eight aside from the
Price family, have more than 500 shares.
The directors of Eureka have decided that the cost of compliance, for its small
number of minority shareholders, is no longer viable and that its shares should
be delisted.
The JSE has indicated that it intends to take a co-operative approach regarding
some of its stringent requirements, so that Eureka can achieve a cost effective
delisting of its shares.
OFFER TO MINORITY SHAREHOLDERS
It is commonly accepted that an investment trust will trade at a discount to
its tangible net asset value of at least 10%, and in a case like Eureka`s at a
discount of between 20% and 25%.
Eureka intends to make an offer to shareholders for their shares, at 100% of net
tangible asset value, as reflected in the financial statements for the year
ended on 28 February 2009. This represents a premium of between 11% and 33% on
the price at which its shares would normally trade. The major shareholders have
indicated that they will accept that Eureka can make an offer to minority
shareholders based on such a value.
It is intended that meetings to vote on this proposal, and thereafter the
timetable for implementing the decisions and processes that are approved, will
be proceeded within the shortest timeframe possible.
NOTICE OF GENERAL MEETING OF SHAREHOLDERS
Notice is hereby given that a general meeting of shareholders will be held at 65
Elm Drive, Inanda, Sandton, on 24 June 2009 at 14h00 to consider and vote on:
"Special Resolution number 1:
1. "Resolved that Eureka Industrial Limited "Eureka" and its subsidiaries be and
are hereby authorised in terms of sections 85(2) and 85(3) of the Companies Act
of South Africa 1973, and the JSE Listings Requirements, from time to time to
acquire the ordinary shares in the issued share capital of Eureka from such
shareholder/s, at such price, in such manner and subject to such terms and
conditions as the directors may deem fit, but subject to the Articles of
Association of Eureka, the Act and the JSE Listing Requirements, and provided
that:
1.1 the authority hereby granted will be valid for 15 (fifteen) months from the
date of registration of this special resolution;
1.2 acquisitions may not be made at a price greater than 10% (ten percent) above
the weighted average of the market value for the shares determined over the 5
(five) business days prior to the date that the price for the acquisition is
effected;
1.3 acquisitions in the aggregate in any one financial year shall not exceed 20%
(twenty percent) of that class of the Company`s issued share capital;
1.4 Eureka will only appoint one agent to effect the repurchases on its behalf;
1.5 neither Eureka nor its subsidiaries may repurchase securities during a
prohibited period unless a repurchase program is in place where the dates and
quantities of securities to be traded during the relevant period are fixed and
where full details of the program have been disclosed in an announcement over
SENS prior to the commencement of the prohibited period;
1.6 an announcement complying with Section 11.27 of the JSE Listings
Requirements will be published by Eureka when the it and/or its subsidiaries
over any twelve month period have cumulatively repurchased 3% (three percent) of
Eureka`s issued ordinary share capital and for each 3% (three percent) in
aggregate thereafter"
Statement by the Board of Directors
In accordance with the JSE Listings Requirements, the directors state that:
a) The intention of the directors is to utilise the authority at a future date,
provided that the cash resources of Eureka are in excess of its requirements. In
this regard, the directors will take into account, inter alia, an appropriate
capitalisation structure for Eureka and its long-term cash needs, and will
ensure that any such utilisation is in the interests of the shareholders of
Eureka;
b) After having considered the effect of the maximum number of ordinary shares
that may be acquired pursuant to the authority and the date upon which such
acquisition/s will take place;
"Ordinary resolution number 1:
"Resolved that Eureka Industrial Limited is hereby authorised to make an offer
to shareholders, in accordance with the JSE Listings Requirements, in order for
it to delist its shares from the Johannesburg Stock Exchange."
For and on behalf of the board
Ronald S Price
Non-executive chairman
Sandton
31 May 2009
Date: 03/06/2009 14:42:09 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
