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AFP
AFP
AFP - Alexander Forbes Preference Share Investments Limited - Unaudited interim
results for the six months ended 30 September 2009
Alexander Forbes Preference Share Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number: 2006/031561/06)
Share code: AFP
ISIN code: ZAE000098067
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2009
REVIEW OF ACTIVITIES
Alexander Forbes Preference Share Investments Limited ("AF Pref") was
incorporated on 10 October 2006. The sole purpose of the company is to serve as
a special purpose vehicle through which existing shareholders of Alexander
Forbes Limited could remain invested following the private equity buyout of the
Alexander Forbes group.
AF Pref holds 26.5% of the ordinary shares in Alexander Forbes Equity Holdings
(Proprietary) Limited ("AFEH"). In addition AF Pref also holds 31,8% of the
preference shares in AFEH and 100% of the Pay-in-Kind ("PIK") debentures issued
by a subsidiary of AFEH, Alexander Forbes PIK Funding (Proprietary) Limited ("AF
PIK"), the latter investment forming part of the financing arrangement of the
private equity transaction. Subsequent to the balance sheet date, AF Pref also
acquired 26.5% of the High Yield Term Loan issued by Alexander Forbes Funding
(Proprietary) Limited and other relevant assets.
This results announcement should be read in conjunction with the results
announcement of AFEH which is made available to all AF Pref preference
shareholders.
AF Pref has issued two instruments, namely redeemable participating preference
shares and unsecured fixed rate debentures, which together constitute a linked
unit listed on the JSE Limited. The preference shares give the holder the see-
through economic and voting rights in the pro rata underlying investment in the
equity of AFEH and the debentures give the holder the see-through economic
rights in the underlying PIK debentures investment in AF PIK.
AF Pref does not anticipate receiving any dividends in the foreseeable future
from its investment in AFEH. AF Pref therefore does not intend to declare any
dividends for the foreseeable future.
Subsequent events
You are referred to the circular to shareholders issued on the 9th of November
with regards to the various transactions including a capitalisation issue, a
capital distribution and a rights issue which has recently been concluded and
the results of which were recently published on SENS. The results presented in
this announcement are historical and do not incorporate the effect of these
subsequent transactions.
S Gaskell T J Fearnhead
Director Director
3 December 2009
INCOME STATEMENT
for the six months ended 30 September 2009
30 Sep 30 Sep 12
months
31 Mar
2009 2008 2009
Note Rm Rm Rm
s
Operating expenses (1) - (1)
Trading results (1) - (1)
Impairment of investment in 7 - (162) -
associate
Operating loss (1) (162) (1)
Finance income 2 89 74 168
Finance cost 3 (86) (73) (151)
Share of net loss of associates (29) (123) (125)
(net of income tax)
Loss before taxation (27) (284) (109)
Income tax expense 4 (1) - (3)
Loss for the period (28) (284) (112)
Loss attributable to:
Ordinary shareholder equity 5 - - -
Preference shareholders 5 (28) (284) (112)
Loss for the period (28) (284) (112)
Headline loss per share (cents)
- per ordinary share 6 - - -
- per preference share 6 (38) (190) (20)
Basic loss per share (cents)
- per ordinary share 6 - - -
- per preference share 6 (28) (284) (112)
STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 September 2009
Loss for the period (28) (284) (112)
share of other comprehensive (55) - (44)
loss of associates
share of purchase price allocation - - (1)
adjustment of associate
Other comprehensive loss for the (55) - (45)
period (net of income tax)
Total comprehensive loss for the (83) (284) (157)
period
Total comprehensive loss
attributable to:
Ordinary shareholder equity - - -
Preference shareholders (83) (284) (157)
Total comprehensive loss for the (83) (284) (157)
period
STATEMENT OF FINANCIAL POSITION
at 30 September 2009
30 Sep 30 Sep 12
months
31 Mar
2009 2008 2009
Note Rm Rm Rm
s
ASSETS
Investment in associate 7 740 700 824
Investment in PIK debentures 8 1 077 913 991
Accounts receivable - - 1
Cash and cash equivalents 99 94 96
Total assets 1 916 1 707 1 912
EQUITY AND LIABILITIES
Ordinary shareholders` equity - - -
Preference shareholders` 1 122 1 122 1 122
interest*
Non-distributable reserve (99) - (44)
Accumulated loss (185) (328) (157)
Total equity 838 794 921
Debentures* 1 077 913 991
Taxation payable 1 - -
Total liabilities 1 078 913 991
Total equity and liabilities 1 916 1 707 1 912
Total equity per above 838 794 921
Number of ordinary shares in 1 1 1
issue
Net asset value per ordinary 838 794 921
share
*these two instruments combined
make up the linked units listed
on the JSE Limited.
CONDENSED STATEMENT OF CASH FLOWS
for the six months ended 30 September 2009
12
months
30 Sep 30 Sep 31 Mar
2009 2008 2009
Rm Rm Rm
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations 1 9 15
Interest income 2 1 -
Taxation paid - - (3)
Net cash inflows from operating 3 10 12
activities
CASH FLOWS FROM INVESTING ACTIVITIES
Repayment/(advance) of BEE and - 83 83
management underwrite
Net cash inflow from investing - 83 83
activities
Net movement in cash and cash 3 93 95
equivalents
Cash and cash equivalents at 96 1 1
beginning of period
CASH AND CASH EQUIVALENTS AT END OF 99 94 96
PERIOD
CONDENSED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2009
Ordina Prefere Non- Accumu- Total
ry nce distribu lated equity
share- share- table loss
holder holders reserve
s` `
equity interes
t
Rm Rm Rm Rm
At 31 March 2008 - 1 122 - (44) 1 078
Loss for the period - - - (284) (284)
Other comprehensive - - - - -
loss
Total comprehensive - - - (284) (284)
loss
At 30 September 2008 - 1 122 - (328) 794
Profit for the - - - 172 172
period
Other comprehensive - - (44) (1) (45)
loss
Total comprehensive - - (44) 171 127
(loss) /income
At 31 March 2009 - 1 122 (44) (157) 921
Loss for the period - - - (28) (28)
Other comprehensive - - (55) - (55)
loss
Total comprehensive - - (55) (28) (83)
loss
At 30 September 2009 - 1 122 (99) (185) 838
NOTES
1. Basis of preparation
These interim results have been prepared in accordance with, and
comply with, International Financial Reporting Standards
("IFRS"), including IAS 34 (Interim Financial Reporting), and
the South African Companies Act No 61 of 1973, as amended.
The accounting policies applied in the preparation of these
results are consistent with those detailed in the financial
statements issued by AF Pref for the year ended 31 March 2009,
except for the changes required by IAS 1 (Presentation of
financial statements) and Circular 3/2009 (Headline earnings).
30 Sep 30 Sep 12
months
31 Mar
2009 2008 2009
Rm Rm Rm
2. Finance income
Income in respect of BEE and - - 8
management underwrite
Interest income on held-to-maturity 86 73 151
financial assets (PIK Debentures)
Interest on cash balances 3 1 9
89 74 168
3. Finance costs
Interest cost on financial liability (86) (73) (151)
held at amortised cost (debentures)
4. Taxation
South African income tax
Current tax (1) - (3)
The standard South African income tax
rate for companies is reconciled to
the company`s actual tax rate as
follows:
Income tax rate for companies 28.0% 28.0% 28.0%
Adjusted for the effect of:
Share of net loss of associate (net (30.2% (28.0%) (30.8%)
of income tax) )
Effective tax rate (2.2%) - (2.8%)
5. Earnings attributable to equity holders and preference
shareholders
The economic rights to return of capital and dividends for
equity holders and preference shareholders are detailed in
section 5 of the pre-listing statement issued by AF Pref on 10
July 2007.
6. Earnings per share
The preference shareholders have the economic rights to return
of capital and dividends and as such earnings and headline
earnings per share are all attributable to preference
shareholders only and are nil for equity holders. Basic and
headline earnings per share for equity holders is therefore not
provided.
12
months
30 Sep 30 Sep 31 Mar
2009 2008 2009
Rm Rm Rm
6. Earnings per share (continued)
6.1 Basic loss per preference share
Basic loss per share is calculated by dividing the loss for the
year attributable to equity holders be the weighted average
number of preference shares in issue during the period.
6.2 Headline loss per preference share
Headline loss per share is calculated by excluding all
impairment charges and capital gains and losses from the loss
attributable to shareholders and dividing the resultant headline
earnings by the weighted average number of preference shares in
issue during the period. Headline earnings are defined in
Circular 3/2009 issued by the South African Institute of
Chartered Accountants.
6.3 Calculation of loss per share for preference shareholders
Loss for the period (a) (28) (284) (112)
Adjusting items:
Share of impairment charge (10) 94 92
and other capital items of
associate
Headline earnings (b) (38) (190) (20)
attributable to preference
shareholders
Weighted average number of (c) 100 100 100
preference shares in issue
(millions)
Basic loss per preference (a)/(c) (28) (284) (112)
share (cents)
Headline earnings per (b)/(c) (38) (190) (20)
preference share (cents)
7. Investment in associate
Cost 1 038 1 121 1 026
Equity underwrite repaid - (92) -
Subscription for shares in respect - - 12
of management underwrite
Share of cumulative post - (99) - (44)
acquisition movement in equity
Share of cumulative post - (199) (167) (170)
acquisition losses
Impairment of investment in - (162) -
associate
Carrying value in balance sheet 740 700 824
Directors` valuation of associate 928 700 895
In terms of the South African Companies Act No. 61 of 1973
directors are required to provide a valuation of the associate
investment in Alexander Forbes Equity Holdings (Proprietary)
Limited. At 30 September 2009, the directors are of the opinion
that the value of the investment in AFEH is R928 million. In the
prior year the director`s valuation incorporated the significant
decline in market conditions, resulting in a valuation lower
than the carrying value. By the financial year end, most of
these indicators had recovered to such an extent that a write
down from carrying value, which by then also included further
equity accounted losses, was no longer required.
12
months
30 Sep 30 Sep 31 Mar
2009 2008 2009
Rm Rm Rm
8. Investment in PIK dbenture
Capital balance 750 750 750
Interest accrued 327 163 241
1 077 913 991
Independent directors: S Gaskell, T J Fearnhead
Company secretary & Investor Relations: J E Salvado
Transfer secretaries:
Computershare Investor Services (Pty) Limited.
Ground Floor, 70 Marshall Street, Johannesburg
PO Box 61051, Marshalltown, 2107
Registered office:
5th Floor, The Terraces, 25 Protea Road
Claremont, 7708
Sponsor:
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
1 Merchant Place, corner Fredman Drive and Rivonia Road, Sandton, 2196
Date: 02/12/2009 13:40:01 Produced by the JSE SENS Department.
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