| Mon 29 Mar 2010, 16:00 | | AND - Andulela Investment Holdings Limited - Reviewed Abridged Results for the |
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AND - Andulela Investment Holdings Limited - Reviewed Abridged Results for the
Six Months Ended 31 December 2009
ANDULELA INVESTMENT HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1950/037061/06)
Share code: AND & ISIN: ZAE000125894
("Andulela" or "the company")
REVIEWED ABRIDGED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2009
Statement of financial position Reviewed Reviewed Audited
6 Months 6 Months Year
ended ended ended
31 December 31 December 30 June
2009 2008 2009
Notes (R`000) (R`000) (R`000)
Assets
Non-current assets
Investment in associates 1 195,499 159,245 171,975
Current assets 2,116 902 2,073
Trade and other receivables 314 - 1,546
Cash at bank 1,802 902 527
Total assets 197,615 160,147 174,048
Equity and liabilities
Capital and reserves 108,133 78,162 86,558
Share capital and share premium 378,750 378,714 378,750
Accumulated loss (270,617) (300,552) (292,192)
Non-current liabilities 81,066 77,276 80,334
Redeemable preference share 75,000 75,000 75,000
capital
Long term loan 2 6,066 2,276 5,334
Current liabilities 8,416 4,709 7,156
Taxation 321 19 19
Trade and other payables 8,095 4,690 7,137
Total equity and liabilities 197,615 160,147 174,048
Net asset value per share 25.8 18.7 20.7
(cents)
Statement of comprehensive
income
Gross revenue - - -
Loss from operations (4,524) (3,890) (8,597)
Investment income 5,868 273 13,033
Profit/(loss) from associates 2,128 (3,912) (5,407)
Proportionate share of loss net (3,890) (3,912) (9,251)
of dividends
Dividends received 6,018 - 3,844
Reversal of 21,561 (286,843)
impairment/(impairment) of (281,505)
investment in associates
Finance costs (3,156) (1,646) (5,182)
Profit/(loss) before taxation 21,877 (296,018)
(287,658)
Taxation (302) - -
Net profit/(loss) for the 21,575 (296,018) (287,658)
period/year
Ordinary shares in issue 419 419 419
(millions)
Weighted average number of 419 256 338
ordinary shares in issue
(millions)
Headline earnings / (loss) 14 (9,175) (6,153)
- Attributable net profit / 21,575 (296,018)
(loss) for the period/year (287,658)
- Add back: (Reversal of (21,561) 286,843 281,505
impairment)/impairment of
investments
Earnings / (loss) per ordinary 5.1 (115.6) (85.2)
share (cents) (a)
Headline earnings / (loss) per 0.0 (3.6) (1.8)
ordinary share (cents) (a)*
Dividends per ordinary share - - -
(cents)
(a) The earnings/(loss) and headline earnings/(loss) per ordinary share is
calculated by dividing the earnings/(loss) and headline earnings/(loss) by
the weighted average number of ordinary shares in issue during the
period/year, which was 419 000 000 (31 December 2008: 256 364 130 and 30
June 2009: 337 794 521).
Shareholders are referred to the interim financial results of the company
for the six months ended 31 December 2008 as published on SENS on 30 March
2009 and are advised that the headline loss per share of (115.6) cents
published in the aforementioned results has been restated to be a headline
loss of (3.6) cents per share. This is calculated by adding back the
impairment of investment in associates to the attributable loss as
previously reported and dividing it by the weighted average number of
ordinary shares in issue for the period. The impairment of investment in
associates was not taken into account in the previously reported headline
loss per share for the comparative interim period ended 31 December 2008.
* Less than 0.01 cents per share for the current period
Abridged statement of cash flows Reviewed Reviewed Audited
6 Months 6 Months Year
ended ended ended
31 December 31 December 30 June
2009 2008 2009
(R`000) (R`000) (R`000)
Cash flows from:
Operating activities (5,476) (1,160) (8,472)
Investing activities 6,018 (365,000) (1,157)
Financing activities 733 356,870 (37)
Change in cash and equivalents 1,275 (9,290) (9,666)
Opening cash and equivalents 527 10,193 10,193
Closing cash and equivalents 1,802 903 527
Abridged statement of changes in equity
Opening balances 86,558 94,587 94,587
Net profit / (loss) for the period 21,575 (296,018)
(287,658)
Shares issued net of expenses - 354,593 279,629
Closing balances 108,133 153,162 86,558
Basis of preparation
The company has complied with International Financial Reporting Standards
(IFRS) for the six months ended 31 December 2009. The accounting policies
have been consistently applied for all periods and are consistent with those
used in the preparation of the latest audited financial statements. These
financial results have been prepared in accordance with the requirements of
the JSE Listings Requirements with regard to provisional and abridged
results reports, including those relating to IAS 34: Interim Financial
Reporting.
Notes to the reviewed financial Reviewed Reviewed
results 6 Months Reviewed Year
ended 6 Months ended
31 December ended 30 June
2009 31 December 2009
2008
(R`000) (R`000) (R`000)
1. Investment in associates
Opening carrying value at cost 450,000 450,000 450,000
Shares at cost 335,679 335,679 335,679
Loan receivable at acquisition 114,321 114,321 114,321
Loan receivable subsequent to 18,585 - 12,730
acquisition (b)
Share of net loss from associate (13,141) (3,912) (9,251)
net of dividends received
Brought forward from prior year (9,251) - -
Current year (3,890) (3,912) (9,251)
- Share of associate 2,128 (3,912) (5,407)
income/(loss) - current year
- Less : Dividend received (6,018) - (3,844)
Less : Impairment (c) (259,945) (286,843)
(281,504)
Balance brought forward from (281,505) - -
prior year
Current period 21,560 (286,843)
reversal/(impairment) (281,504)
-
Carrying value 195,499 159,245 171,975
(b) These loans represent the interest accrued and not paid on the
acquisition loans from the date of acquisition to the reporting date.
These loans are unsecured, bear interest at prime bank overdraft rates
less 1%, and have no fixed terms of repayment.
(c) Based on fair value of investments as per competent persons` report
dated 31 December 2009
2. Long term loan
The loan due to Newshelf 1005 (Pty) Limited is unsecured, bears interest
at prime overdraft rate payable quarterly in arrears.
Review opinion
These results have been reviewed by the company`s auditors, PKF (Jhb) Inc.,
whose unmodified review opinion is available for inspection at the company`s
registered office.
Nature of the business
The company is an investment holding company.
Going concern
The financial statements have been prepared on the going concern basis.
Directorate
The current directors of the company and changes in directorate during the
period under review and to the date of this report are as follows:
Name Change in appointment
M J Husain(Chairman) # Appointed as Chairman 26 February 2010
A Kaka(CEO) Appointed as CEO 26 February 2010
D A S Currie Appointed February 2010
G Rosenthal # Appointed 26 February 2010
P C de Jager(CFO) Appointed 14 November 2008
P Vallet * Resigned 26 February 2010
J P Barton-Bridges Resigned 26 February 2010
S E Jonah * Resigned 26 February 2010
R K Jonah * Resigned 26 February 2010
D N Rosen * Retired by rotation 11 February 2010
V D Rubin # Resigned 26 February 2010
* Non-executive; # Independent non-executive
Pursuant to the acquisition by Newshelf 1005 (Pty) Limited ("Newshelf") of a
majority shareholding in the company, the board of directors was
reconstituted on 26 February 2010.
Commentary
Introduction
During the six months ended 31 December 2009 Andulela continued to receive
dividends from its 50% shareholding in each of Abalengani Mining Investments
(Pty) Limited ("AMI") and JB Platinum Holdings (Pty) Limited ("JBPH"). AMI
and JBPH effectively own a combined 83.6% stake in Kilken Platinum (Pty)
Limited ("Kilken"), a platinum group metals tailings retreatment operation,
thus giving the company an effective 41.8% stake in Kilken.
Kilken
The R25 million capital expenditure incurred during the latter part of 2008
has successfully increased the capacity of the tailings retreatment
facility, improving the opportunity to increase the volumes of platinum
group metals concentrate delivered to Rustenburg Platinum Mines (Pty)
Limited ("RustPlat").
Financial review
Dividends from the associate companies totalling R6,0 million were declared
and paid during the six months ended 31 December 2009.
Preference dividends due to Newshelf totalling R2,6 million for the period
have not been paid but have been accrued and expensed as finance costs in
the financial results for the period. Total preference dividends payable in
the amount of R7,4 million are included in current liabilities.
With effect from 20 November 2009, Jonah Capital (Pty) Limited sold all of
its claims on a working capital facility with the company to Newshelf. As at
the reporting date the outstanding loan due to Newshelf amounted R6,1
million (including interest) and is included in long term loans.
Based on the recent improved demand for and increase in the price of
platinum, management is pleased to report the improvement in overall
profitability of the investment in Kilken and subsequent dividend cash
inflows.
In accordance with IAS and IFRS, management recognised a reversal of
impairment of R21,6 million to the carrying value of the indirect investment
in Kilken in the statement of comprehensive income to reflect fair value
based on a valuation presented in a competent person`s report dated 31
December 2009.
AMI and JBPH options
On 27 October 2009 Abalengani Platinum Holdings (Proprietary) Limited
("Abalengani Platinum") exercised each of the put options granted to
Abalengani Platinum to sell to the company the remaining 50% of the issued
share capital in and all of Abalengani Platinum`s claims on loan account
against each of AMI and JBPH (collectively "the option equity").
As stated in the announcement released on SENS on 29 October 2009, the
company elected to settle the purchase price of the option equity, being in
aggregate R425 000 000, by way of the allotment and issue of ordinary shares
in the company at an issue price equal to the volume weighted average
("VWAP") traded price at which the company`s shares traded on the JSE over
the 30 trading days immediately prior to the date on which the option notice
was furnished to the company.
The purchase price of the option equity will be settled by the issue of
3,531,660,296 Andulela shares at a VWAP traded price of 12.034 cents each
The settlement shares required an increase in the authorised share capital
of the company, which was approved by special resolution at the annual
general meeting of the company convened on 11 February 2010.
The special resolutions are in the process of being registered by the
Companies Intellectual Property and Registration Office ("CIPRO").
The transaction will be perfected after the new shares have been issued and
delivered to Abalengani Platinum. When the transaction is perfected, AMI and
JBPH will become wholly owned subsidiaries of Andulela and consequently the
company`s effective shareholding in Kilken will increase to 83.6% from
41.8%. These changes will result in Kilken, AMI and JBPH being consolidated
into the results of Andulela in future reporting periods.
Events subsequent to the interim reporting date
Results of offer to minority shareholders
Newshelf announced on SENS on 20 November 2009 and in the press on 23
November 2009 that it had acquired 144 576 717 Andulela shares equating to
34.51% of the issued ordinary share capital of the company from Jonah Mining
(Proprietary) Limited, at a price of 12 cents per Andulela share (the "sold
shares").
Prior to the acquisition of the sold shares, Newshelf had advised that it
owned 144 575 374 Andulela shares representing 34.50% of the issued share
capital of the company. Thus at the time of the said announcements Newshelf
owned 69.01% of the issued ordinary share capital of Andulela.
As Newshelf was the holder of more than 35% of the issued ordinary share
capital of Andulela it was obliged in terms of the Securities Regulation
Code on Takeovers and Mergers ("the Code") to extend a mandatory cash offer
to the other shareholders of Andulela to acquire their shares.
A firm offer was made by Newshelf in its offer circular to Andulela
shareholders dated Monday, 18 January 2010. The offer was made by way of an
unconditional cash offer by Newshelf to the shareholders of Andulela other
than Newshelf to acquire their ordinary shares at an offer price of 12 cents
per Andulela share ("the offer").
The Andulela board issued a circular dated 9 February 2010 regarding the
views of the Andulela board on the offer and containing the substance of the
advice to the Andulela board by its external advisor, Java Capital
(Proprietary) Limited.
The offer closed on Friday, 26 February 2010 and acceptances in respect of
68,611,593 Andulela shares, comprising 16.38% of the issued share capital of
Andulela, were received by Newshelf.
Accordingly, at the closing date of the offer, Newshelf`s shareholding in
Andulela has increased from 289,152,091 Andulela ordinary shares (equal to
69.01% of the issued ordinary share capital of Andulela) to 357,763,684
Andulela ordinary shares (equal to 85.39% of the issued ordinary share
capital of Andulela).
Strategic review and outlook
Kilken is a low-cost producer of platinum group metals. Andulela indirectly
acquired the Kilken asset to participate in the positive growth outlook for
platinum in the long term. Market expectations are that platinum prices
will continue to strengthen and world demand will increase in the medium to
long term. No material capital expenditure is contemplated by Kilken for
the next financial year and it is anticipated that the company will continue
to receive regular dividend payments from AMI & JBPH.
Appreciation
The board of Andulela wishes to thank the outgoing directors for their
valued service to the company.
For and on behalf of the board
M J Husain A Kaka
Independent Non-Executive Chairman Chief Executive Officer
Sandton
29 March 2010
Directors
Mohamed J Husain (Chairman); Ashruf Kaka (CEO); David Currie; Graham
Rosenthal; Pieter de Jager (CFO) ( Independent non-executive)
Registered Office Company Secretary
108 4th Street, Parkmore, Sandton, 2196 J R Jones (Mrs)
Transfer Secretaries Sponsor
Link Market Services South Africa (Pty) Limited Java Capital (Pty) Limited
Date: 29/03/2010 16:00:05 Produced by the JSE SENS Department.
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