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ABO
ABO
ABO - Absolute Holdings - Unaudited Interim Results For The Six Month Period
Ended 31 December 2009 And Renewal Of Cautionary Announcement
ABSOLUTE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
Share code: ABO ISIN: ZAE000062998
("Absolute" or "the company")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTH PERIOD
ENDED 31 DECEMBER 2009 AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
GROUP BALANCE SHEETS
Unaudited Audited Unaudited
31 Dec 2009 30 June 2009 31 Dec
R`000 R`000 2008
ASSETS R`000
Non-current assets 51 875 46 394 39 888
Property, plant and equipment
1 30 365 25 987 23 221
Investment in associates 1 510 - -
Investments in financial
assets 20 000 20 000 16 667
Long term receivables - 407 -
Current assets 3 110 3 455 2 338
Inventories 1 553 2 015 1 581
Trade and other receivables
942 985 264
Short term receivables 330 142 32
Cash and cash equivalents 285 313 461
Assets held for sale - - 684
Total assets 54 985 49 849 42 910
EQUITY AND LIABILITIES
Capital and reserves 28 338 24 115 26 545
Non-current liabilities 19 426 18 138 13 032
Long-term liabilities 18 904 17 616 13 032
Rehabilitation liability 522 522 -
Current liabilities 7 221 7 596 2 649
Trade and other payables 4 225 4 199 2 649
Other financial liabilities - 521 -
Bank overdraft 2 996 2 876 -
Liabilities associated
with assets held for sale - - 684
Total equity and
liabilities 54 985 49 849 42 910
Number of shares in issue
(`000) 1 601 185 1 403 716 1 403 716
Net asset value per share
(cents) 1.77 1.72 1.89
Net tangible asset value
per share (cents)1 1.77 1.72 1.89
Mineral Rights have being reclassified as Property, Plant and Equipment and thus
comparatives figures in respective of 31 December 2008 have being restated.
GROUP INCOME STATEMENTS
Unaudited Unaudited
Six months Audited Six months
ended Year ended
31 Dec 2009 ended 31 Dec 2008
R`000 30 Jun 2009 R`000
R`000
Revenue 602 956 38
Profit on sale of
subsidiary - 250 -
General and administrative
expenses (3 002) (7 110) (2 460)
Loss from operations (2 400) (5 904) (2 422)
Finance charges (538) (44) -
Interest income 13 55 -
Net loss for the period
from continuing operations (2 925) (5 893) (2 422)
Discontinued operations
Loss for the year from
discontinued operations - (2 331) (780)
Net loss for the period (2 925) (8 224) (3 202)
Weighted average shares in
issue (`000) 1 532 545 1 223 294 987 012
Earnings per share
information:
Loss per share for period
(cents) (0.19) (0.69) (0.32)
Loss per share from
continuing operations
(cents) (0.19) (0.49) (0.25)
Headline loss per share for
period (cents) (0.19) (0.71) (0.32)
ABRIDGED CASH FLOW STATEMENTS
Unaudited Unaudited
Six months Audited Six months
ended Year ended
31 Dec 2009 ended 31 Dec 2008
R`000 30 Jun 2009 R`000
R`000
Net cash outflow from
operating activities (1 776) (5 327) (1 942)
Net cash (outflow) /
inflow from investing
activities (4 764) (5 092) (2 773)
Net cash outflow from
discontinued activities - (2 331) (756)
Net cash from financing
activities 6 392 14 721 10 466
Net increase in cash and
cash equivalents (148) 1 971 4 995
Cash and cash equivalents
- beginning of period (2 563) (4 534) (4 534)
Cash and cash equivalents
at end of period (2 711) (2 563) 461
STATEMENT OF CHANGES IN EQUITY
Share Share Accumulated Total
capital premium losses
R`000 R`000 R`000 R`000
Balance at
1 July 2008 8 563 80 769 (88 587) 745
Shares issued 5 474 24 034 - 29 508
Costs offset against - (506) - (506)
share premium
Net loss for the
period - (3 202) (3 202)
Balance at
31 December 2008 14 037 104 297 (91 789) 26 545
Shares premium - 3 333 - 3 333
adjustment
Costs offset against - (741) - (741)
share premium
Net loss for the
period - - (5 022) (5 022)
Balance at
30 June 2009 14 037 106 889 (96 811) 24 115
Shares issued 1 974 5 524 - 7 498
Costs offset against - (350) - (350)
share premium
Net loss for the
period - - (2 925) (2 925)
Balance at
31 December 2009 16 011 112 063 (99 736) 28 338
HEADLINE EARNING RECONCILIATION
Unaudited Audited Unaudited
Six months Year Six months
ended ended ended
31 Dec 2009 30 Jun 2009 31 Dec 2008
Reconciliation between loss R`000 R`000 R`000
and headline loss
Net loss for the year (2 925) (8 224) (3 202)
Profit on disposal of
subsidiary - (250) -
Loss on disposal property,
plant and Equipment - 57 -
Headline loss (2 925) (8 417) (3 202)
Headline loss per share
(cents) (0.19) (0.71) (0.32)
COMMENTARY
The directors present the unaudited results for the six month period ended 31
December 2009 in accordance with IAS 34 - Interim Financial Reporting. The
accounting policies adopted for purposes of this report comply, and have been
consistently applied in all material respects, with International Financial
Reporting Standards and the Companies Act. These interim results have not been
audited or reviewed by the Company`s auditors.
The directors have continued to adopt the `going concern` basis for the
preparation of the financial statements. As is common with many junior mining
companies, the company raises money resources for exploration and capital
projects as and when required. However, the availability of these resources is
dependent on new shareholder funding and revenue streams from investments, and
there can be no certainty in relation to these matters. There can be no
assurance that the Group`s projects will be fully developed in accordance with
current plans or completed on time or to budget. Future work on the development
of these projects, the levels of production and financial returns arising there
from may be adversely affected by factors outside the control of the Group.
RESULTS
The group has found the current market conditions rather challenging as the
constructions industry continues to contract. As at the date of this report, the
group employs 4 employees, 2 of whom is in the mining division and the remainder
in the corporate head office. Any employees required at the mining operations
will be contracted as and when required.
In the first half of the last financial year mining activities at the Diamond
Quartzite Quarry did not achieve the required levels of output to warrant the
operations being classified to be in commercial production and thus all costs
net of revenue have been capitalised. Production plans will be dictated by
market demand and various options are being considered including a joint venture
with other dimension stone related operations.
Mining operations at the Picture Stone deposits have been delayed, pending the
conclusion of a suitable off take agreement. The company is in discussion with
various parties but no final agreements have been reached as yet.
Operating expenses have been incurred mainly on corporate activities and head
office costs and these have been partially covered from dividend income streams
generated from Absolute`s shareholding in Qinisele Resources.
Exploration activities at the Limestone rights have been limited to date but a
full program is being developed in conjunction with the technical advisors, The
Mineral Corporation. The coal prospecting rights held by Dikopane, of which
Absolute is a 49% shareholder, are vast and as such the company is evaluating
both a focused exploration programme linked to the most value accretive options
for resource. Several entities have approached the company around jointly
developing this coal resource and the discussions are ongoing.
SEGMENTAL ANALYSIS
Segmental
Information Continuing operations
Corporate Mining Invest- Total
ment
R`000s R`000s R`000s R`000s
31 December 2009
Revenues from - - 602 602
external customers
Interest expense 538 - - 538
Net profit/(loss) (3 536) 9 602 (2 925)
Assets 295 32 800 21 890 54 985
Liabilities 13 827 12 820 - 26 647
Capital expenditure - 4 980 - 4 980
30 June 2009
Revenues from - - 956 956
external customers
Interest expense 44 - - 44
Depreciation and 6 - - 6
amortisation
Net profit/(loss) (6 697) (152) 956 (5 893)
Assets 852 28 997 20 000 49 849
Liabilities 10 420 15 314 - 25 734
Capital expenditure 34 5 491 20 000 25 525
31 December 2008
Revenues from - 38 - -
external customers
Interest expense - - - -
Depreciation and - 91 - 91
amortisation
Net profit/(loss) (1 207) (1 215) - (2 422)
Assets 476 25 083 16 667 42 226
Non-current assets - - - -
classified as held
for sale
Liabilities 6 591 9 090 - 15 681
Capital expenditure - 2 773 16 667 19 440
Dis-
Continued
Segmental operations
Information (Cont)
Trading
R`000s
31 December 2009
Revenues from -
external customers
Interest expense -
Net profit/(loss) -
Assets -
Liabilities -
Capital expenditure -
30 June 2009
Revenues from 4 673
external customers
Interest expense 188
Depreciation and 42
amortisation
Net profit/(loss) (2 331)
Assets -
Liabilities -
Capital expenditure -
31 December 2008
Revenues from 4 044
external customers
Interest expense 185
Depreciation and 53
amortisation
Net profit/(loss) (780)
Assets 684
Non-current assets 684
classified as held
for sale
Liabilities 684
Capital expenditure -
SUBSEQUENT EVENTS
Share consolidation and odd lot offer
On 26 January 2010 Absolute announced the proposed consolidation of the
company`s share capital. The directors are of the opinion that the number of
shares and the share price of the company is of such a level that it elicits
little interest in the market, accordingly, the consolidation has been proposed.
In order to reduce the substantial administration costs associated with this
number of shareholders, the directors of Absolute propose the implementation of
an odd lot offer to reduce the number of odd lot shareholdings.
At a General meeting of shareholders held on 17 February 2010 shareholders
approved the necessary resolutions whereby:
the share capital of Absolute will be consolidated on the basis of 1-for-100
ordinary shares, from an authorised share capital of 2 500 000 000 ordinary
shares of R0.01 each to 25 000 000 ordinary shares of R1.00 each and an issued
share capital of 1 601 184 758 ordinary shares of R0.01 each to 16 011 848
ordinary shares of R1.00 each; and
to make an odd lot offer and any associated repurchase of securities. As at 30
October 2009, approximately 1 115 out of 2 416 registered shareholders held
9 949 or less shares in the company, which after the consolidation on a 100:1
basis in terms of this circular, would equate to 99 or less shares in the
company. These shareholders collectively held a total of approximately 2 141 405
shares, representing only 0.13% of the issued ordinary share capital of the
company. The offer price is R4.00 per share post consolidation, which equates
to 4 (four) cents per share (pre-consolidation), which has been calculated using
the volume weighted average traded price of Absolute on the JSE over the five
trading days commencing on 16 November 2009 and ending on 23 November 2009, plus
a premium of 8.63%.
Detailed cautionary announcement in relation to the proposed transformation of
Absolute into a new Platinum exploration company
In line with Absolute`s strategic objective of procuring, acquiring and
developing junior mining and exploration projects, the Company has entered into
a company transforming binding agreement with Hlabirwa Mining Investments (Pty)
Limited ("Hlabirwa"), Highland Trading Investments Limited ("Highland") and the
shareholders of Ndarama Mineral Resources (Pty) Limited ("Ndarama"), whereby
Absolute will acquire an effective 60% direct and indirect participation in
Bauba A Hlabirwa Mining Investments (Pty) Limited ("Bauba").
The Proposed Transaction provides Absolute with:
the potential to create a formidable and sustainable force in the junior South
African platinum mining and exploration sector, and the opportunity to be
ideally positioned to participate in further sector consolidation;
an experienced senior management team with excellent credentials, to be
spearheaded by Pine Pienaar (former Mvelaphanda Resources CEO) as CEO of the
enlarged Absolute; and
a value adding relationship with the Bapedi Nation, who through the retention of
their participation in the Bauba Project will be able to contribute to the
project`s development and thereby increase the involvement by Historically
Disadvantaged South Africans ("HDSA`s") in the platinum mining sector.
Absolute has agreed, with effect from the date of successful fulfilment of the
conditions precedent, to acquire from Hlabirwa, Highland and the Ndarama
shareholders (collectively hereinafter referred to as "the Sellers") an
effective 60% direct and indirect participation in the share capital ("the Asset
Shares") of Bauba in exchange for 68,124,600 new ordinary Absolute shares at an
issue price of R5.00 per Absolute share (post the 100:1 consolidation), in an
asset for share transaction in terms of section 42 of the Income Tax Act. This
represents an effective 81% direct participation by the Sellers in the share
capital of Absolute. The Proposed Transaction is subject to the fulfilment of
specific Conditions Precedent.
DIVIDENDS PAID AND RECOMMENDED
No dividends were paid or declared during the accounting period under review and
none are recommended at this stage (2008: nil).
SHARE ISSUES IN PERIOD
A total of 197 468 468 shares have been issued for the period under review in
relation to the acquisition of a 49% interest in Dikopane, which holds coal
prospecting rights in the Sasolburg area, and the issue for cash in August 2009
for the purposes of funding the exploration on the Limestone and Coal
prospecting rights.
ACQUISITIONS AND DISPOSALS
There were no disposals during the period under review. However, shareholders
are referred to the Subsequent Events section above.
FUTURE PROSPECTS
The subsequent commencement of mining operations is expected to return the
company to profitability and enhance the prospects of the group going forward.
The Qinisele Resources acquisition has resulted in the further expansion of the
company`s mining operations. The Limsestone and Coal exploration properties lend
themselves to further growth as the resources markets return to normality.
TRANSFER TO MAIN BOARD
The company is in the process of motivating to the JSE Limited a move from the
Development Capital Market to the Main Board and details will be published
shortly.
CHANGE OF NAME
To mark the beginning of a new era for Absolute`s entrance into the platinum
industry, Absolute will undergo a rebranding exercise which will include a
change of the company`s name post the conclusion of the Bauba agreement.
DIRECTORS
There have been no new directors elected since the date of the last annual
report.
By order of the board
MK Diale MW Rosslee
8 March 2010
Company Secretary and Registered Office
Arcay Client Support (Proprietary) Limited (Registration
number 1998/025284/07)
Arcay House, Number 3 Anerley Road, Parktown,
Johannesburg (PO Box 62397, Marshalltown, 2107)
Directors
MK Diale* Chairman, AM Sher* Deputy Chairman, MW Rosslee,
JJ Serfontein*, GP Sequeira
(* Non-executive)
Sponsor Transfer Office
Arcay Moela Sponsors Computershare Investor
(Proprietary) Limited Services (Proprietary)
Limited
Date: 08/03/2010 12:41:01 Produced by the JSE SENS Department.
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