| Mon 27 Sep 2010, 17:00 | | CAP - Cape Empowerment Limited - Condensed Unaudited Results for the six months |
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CAP
CAP
CAP - Cape Empowerment Limited - Condensed Unaudited Results for the six months
ended 30 June 2010
Cape Empowerment Limited
(previously Dynamic Cables RSA Limited)
(Incorporated in the Republic of South Africa)
Registration number: 1987/001807/06
Share code: CAP ISIN: ZAE0001450066
("Cape Empowerment" or "CEL" or "the company")
Condensed Unaudited Results for the six months ended 30 June 2010
- NAV per share + 22% to 44.1 cents
Condensed unaudited group statement of comprehensive income
Unaudited Unaudited Audited
6 months 6 months 12 months
30 June 30 June 31 December
2010 2009 2009
R`000 R`000 R`000
Revenue 52 880 28 405 57 928
Gross profit 11 302 7 832 10 229
Operating loss before capital items (6 362) (16 589) (24 617)
Profit/(loss) on sale of capital assets 28 127 (1 810)
Impairments (3 862) (14 584) (13 532)
Operating loss after capital items (10 196) (31 046) (39 959)
Investment revenue 1 109 7 396 14 457
Fair value adjustments (9 428) (7 099) 628
Gain on bargain purchase 45 248 7 550 7 644
Finance costs (1 841) (3 324) (7 129)
Profit/(loss) before taxation 24 892 (26 523) (24 359)
Taxation 7 473 18 619 17 145
Profit/(loss) for the period 32 365 (7 904) (7 214)
Non-controlling interest (620) 291 (141)
Profit/(loss) attributable to owners of 32 985 (8 195) (7 073)
the parent
Basic earnings/(loss) per share (cents) 5.1 (1.2)* (1.1)*
Headline loss per share (cents) (1.8) (1.4)* (1.5)*
Fully diluted earnings/(loss) per share 4.9 (1.2)* (1.1)*
(cents)
Fully diluted headline loss per share (1.7) (1.4)* (1.4)*
(cents)
* Note: Per share earnings and headline earnings for the comparative periods
have been restated based on the weighted average number of shares during the
comparable period multiplied by the exchange ratio of two CEL shares for every
one Cape Empowerment Trust Limited ("CET") share in terms of the reverse
takeover by CET of CEL (previously Dynamic Cables RSA Ltd).
Condensed unaudited group statement of financial position
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2010 2009 2009
R`000 R`000 R`000
ASSETS
Non-current assets 187 226 198 319 200 856
Investment property 2 900 - -
Property, plant and equipment 11 589 5 701 3 142
Goodwill 6 029 5 868 5 957
Other financial assets 166 708 186 750 191 757
Current assets 197 893 78 129 155 432
Inventories 103 374 - 85 371
Other financial assets 22 167 29 271 22 630
Trade and other receivables 39 172 22 081 19 221
Cash and cash equivalents 33 180 26 777 28 210
Total assets 385 119 276 448 356 288
EQUITY AND LIABILITIES
Equity
Share capital 266 199 301 735 280 405
Share-based payment reserve 782 - 401
Treasury shares (40 161) (62 799) (42 599)
Retained income 2 301 (30 722) (30 684)
Non-controlling interests 4 280 4 682 5 052
Total equity 233 401 212 896 212 575
LIABILITIES
Non-current liabilities 35 713 34 879 52 271
Borrowings 32 368 27 559 42 436
Deferred tax 3 345 7 320 9 835
Current liabilities 116 005 28 673 91 442
Loans from shareholders - 4 083 1 831
Borrowings 64 518 1 989 64 376
Trade and other payables 51 290 22 402 25 038
Dividend payable 197 199 197
Total liabilities 151 718 63 552 143 713
Total equity and liabilities 385 119 276 448 356 288
Net asset value (NAV) per share +22% 44.1 35.9* 36.2*
(cents)
Net tangible asset value (TNAV) +22% 42.9 34.9* 35.1*
per share (cents)
* Note: Per share NAV and TNAV for the comparative periods have been restated
based on the number of shares outstanding at the respective balance sheet dates
of the comparable periods, multiplied by the exchange ratio of two CEL shares
for every one CET share in terms of the reverse takeover by CET of CEL.
Condensed unaudited group statement of cash flows
Unaudited Unaudited Audited
6 months 6 months 12 months
30 June 30 June 31 December
2010 2009 2009
R`000 R`000 R`000
Cash flow from operating activities (11 040) 26 283 23 908
Cash flow from investing activities 35 346 (27 190) (20 200)
Cash flow from financing activities (19 336) (74 776) (77 958)
Net increase/(decrease) in cash and cash 4 970 (75 683) (74 250)
equivalents
Cash resources at the beginning of the 28 210 102 460 102 460
period
Cash resources at the end of the period 33 180 26 777 28 210
Condensed unaudited group statement of changes in equity
Total share Share- Retained Non- Total
capital based income controlling R`000
(net of payment R`000 interests
treasury reserve R`000
shares) R`000
R`000
Balance at 1 263 882 - (23 611) 79 629 319 900
January 2009
(audited)
Total - (7 073) (141) (7 214)
comprehensive
loss for the year
Share-based - 401 - 401
payments
Purchase of own (26 214) - - (26 214)
shares
Deconsolidation 138 - - (34 070) (33 932)
of subsidiary
Business - - - (40 366) (40 366)
combinations
Balance at 31 237 806 401 (30 684) 5 052 212 575
December 2009
Total - - 32 985 (620) 32 365
comprehensive
income for the
six months
Business (7 182) - - (152) (7 334)
combinations
Share-based - 381 - - 381
payments
Deemed cost of 19 449 - - - 19 449
reverse
acquisition
Cancellation of (24 035) - - - (24 035)
shares
Balance at 30 226 038 782 2 301 4 280 233 401
June 2010
Segmental information
Property Security Gaming Other Total
and and
services leisure
Total assets 168 292 33 194 94 050 89 583 385 119
Total liabilities 64 976 21 420 24 029 41 293 151 718
Net assets 103 316 11 774 70 021 48 290 233 401
Percentage of 44% 5% 30% 21% 100%
total net assets
Revenue - 42 892 - 9 988 52 880
Profit/(loss) (3 161) 1 734 (15 904) 42 223 24 892
before tax
Supplementary information
Unaudited Unaudited Audited
6 months 6 months 12 months
30 June 30 June 31 December
2010 2009 2009
Number of shares in issue - net of 519 903 580 482* 574 060*
treasury shares (`000)
Fully diluted number of shares in 549 903 580 482* 604 060*
issue - net of treasury shares (`000)
Weighted number of shares in issue 645 680 677 452* 626 832*
(`000)
Fully diluted weighted number of 675 680 677 452* 642 284*
shares (`000)
Reconciliation of headline
earnings/(loss) (`000)
Profit/(loss) for the period 32 985 (8 195) (7 073)
(Loss)/profit on sale of capital (28) (87) 809
assets
Gain on bargain purchase (45 248) (7 550) (7 644)
Impairments 744 12 882 13 532
Gain on deconsolidation of subsidiary - (8 199) (8 834)
Other adjustments - 1 702 -
Tax effect - 25 -
Headline loss for the period (11 547) (9 422) (9 210)
* The number of shares reflected is the number of CET shares as previously
reported multiplied by the exchange ratio of two CEL shares for every one CET
share in terms of the reverse takeover by CET of CEL.
Commentary
1. Introduction
Cape Empowerment Limited is a black-owned and managed diversified investment
holding company with strong broad-based empowerment credentials. We hold
substantial investments in various sectors of the economy, including Property,
Gaming and leisure, Security and services, and Information and Communications
Technologies.
2. Basis of preparation
The unaudited condensed consolidated interim financial statements for the six
months to 30 June 2010 ("interim results") have been prepared in accordance with
IAS 34 - Interim Financial Reporting and the AC 500 standards issued by the
Accounting Practices Board and in compliance with the Listings Requirements of
the JSE Limited. The interim results do not include all the information required
in annual financial statements in accordance with IFRS and should be read in
conjunction with the consolidated financial statements of the group for the year
ended 31 December 2009.
The interim results have been prepared in accordance with the accounting
policies adopted in the last annual financial statements for the year ended 31
December 2009.
These interim results have not been audited or reviewed by the group`s auditors.
3. Basis of consolidation
With effect from 1 June 2010 the company acquired all the issued shares in CET
by way of a scheme of arrangement and CET became a wholly-owned subsidiary of
the company. This transaction is a reverse takeover in terms of IFRS 3 -
Business Combinations. These interim results are therefore the continuation of
the group consolidated financials of CET and its subsidiaries, including that of
the legal parent, Cape Empowerment Limited.
4. Interim review
- CET concluded the reverse takeover of CEL (previously Dynamic Cables RSA
Limited) with effect from 1 June 2010. These results therefore include the
trading results of the Dynamic Cables businesses for the month of June 2010
only.
The reverse takeover of CEL by CET has been accounted for as required by IFRS 3
and is summarised below:
R`000
Fair value of net assets and liabilities acquired 64 697
Total cost of acquisition 19 449
Deemed cost of acquisition by CET in terms of IFRS 3 12 962
Plus: fair value of existing interest in CEL at acquisition 6 487
Gain on bargain purchase 45 248
CEL contributed revenue of R9.9 million and profit after tax of R0.5 million to
the group for June 2010.
- A total of 79 479 249 ordinary shares (representing 13% of the issued share
capital of the company) were cancelled and restored to the status of authorised
but unissued with effect from 1 June 2010. The details of these shares were set
out in the circular to shareholders dated 31 March 2010.
- The fair value gains/(losses) consist of:
R`000
Dynamic Cables RSA Ltd (prior to reverse takeover) 2 595
Command Holdings Ltd 2 939
Grand Parade Investment Ltd (14 795)
Other (167)
Total (9 428)
- The development land owned by 85%-held group subsidiary Lions Hill Development
Company (Pty) Ltd is included in inventories at its fair value of R85 million.
The corresponding mortgage debt of R64 million, which is rolled over on an
annual basis in March each year, is reflected in borrowings under current
liabilities. In terms of the debt funding structure the group has a net exposure
of R11.7 million by way of a suretyship provided to the bank. In accordance with
IAS 23 the borrowing cost during the period of R3.2 million was capitalised to
the land and impaired.
5. Prospects
Following the successful completion of the reverse takeover the group will
continue to focus on reducing costs and work towards achieving positive
operating cash flows. Although market conditions is expected to remain subdued
for the remainder of the year we believe that these conditions may present a
number of attractive and net asset value enhancing investment opportunities.
A C Nissen S L Rai J de Villiers
Chairman Chief Executive Officer Managing Director
Cape Town
27 September 2010
Board of directors:
A C Nissen** (Chairman), T D Rai (Deputy Chairman), S L Rai (Chief Executive
Officer), J de Villiers (Managing Director), H B Dednam (Financial Director), P
B Hesseling*, E Tshabalala**, H Takolia**
* Non-executive ** Independent non-executive
Company Secretary:
H B Dednam
Registered Office:
2nd Floor Sunclare Building, 21 Dreyer Street, Claremont 7700
Sponsor: Sasfin Capital
A division of Sasfin Bank Limited
Date: 27/09/2010 17:00:01 Produced by the JSE SENS Department.
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