| Tue 13 Feb 2001, 0:00 | | Appleton - Interim Results |
|
APPLETON LIMITED
(Incorporated in the Republic of South Africa)
(Formerly U-Trade Limited)
(Registration number 1999/004031/06)
("Appleton" or "the Company")
INTERIM RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2000
* Assets under management exceed R3,4 billion
* International earnings represent 71% of headline earnings
* Headline earnings of R6,2 million
GROUP BALANCE SHEETS
Unaudited Unaudited Audited
as at as at year ended
31 Dec 2000* 31 Aug 1999 29 Feb 2000
R'000 R'000 R'000
CAPITAL EMPLOYED
Share capital and premium 140 000 22 000 22 000
Non-distributable reserves 107 - -
Retained (loss)/income (55 990) 1 963 1 827
Ordinary shareholders' funds 84 117 23 963 23 827
Outside shareholders' interests 8 504 - -
Long term liabilities 10 612 - -
103 233 23 963 23 827
EMPLOYMENT OF CAPITAL
Fixed assets 28 846 896 804
Loans receivable 3 064 - -
Financial investments 7 248 1 500 1 500
Net current assets 64 075 21 567 21 523
Current assets 126 306 21 876 32 002
Cash resources 42 066 3 468 30 445
Other current assets 84 240 18 408 1 557
Current liabilities (62 231) (309) (10 479)
103 233 23 963 23 827
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' FUNDS
Unaudited as at 31 December 2000
Non-
Share capital distributable Retained
and premium reserves (loss)/income
R'000 R'000 R'000
Balance at the beginning of
period 22 000 - 1 827
Issue of share capital 944
Share premium on new shares
issues 117 056
Foreign currency translation
reserve 107
Net attributable earnings (57 817)
Balance at the end of period 140 000 107 (55 990)
GROUP INCOME STATEMENTS
Unaudited Unaudited Unaudited
six months six months Audited ten months
ended ended year ended ended
31 Dec 2000* 31 Aug 1999 29 Feb 2000 31 Dec 2000*
R'000 R'000 R'000 R'000
Gross revenue 59 763 3 416 7 425 62 047
Income before interest and
taxation 5 095 2 229 1 797 4 781
Net interest received 2 457 449 395 2 906
Loss from associate (82) - - (82)
Income before taxation 7 470 2 678 2 192 7 605
Taxation (897) (715) (365) (937)
Net income after taxation 6 573 1 963 1 827 6 668
Attributable to outside
shareholders (330) - - (330)
Headline earnings 6 243 1 963 1 827 6 338
Write-off of intangibles (64 155) - - (64 155)
Net attributable earnings (57 912) 1 963 1 827 (57 817)
Weighted average number of
shares in issue ("000) 1 144 000 180 000 190 000 767 634
Headline earnings
per share (cents) 0,55 1,09 0,96 0,83
Earnings and fully diluted
earnings per share (cents) (5,06) 1,09 0,96 (7,53)
NAV per share (cents) 7,4 12,0 11,9 7,4
* The Company changed its year end to June during the period.
COMMENT
Appleton Limited (formerly U-Trade Limited) is pleased to announce positive
headline earnings for the period ended 31 December 2000.
GROUP PROFILE
Appleton is a composite international and local asset management, stockbroking
and investment management Group. Following the approval of shareholders and the
required regulatory authorities in December 2000, Appleton acquired the asset
management and securities businesses of IMR Investments Limited ("IMR")
(formerly The Appleton Group Limited) as well as the asset management business
of RAD-AFC. The Securities business acquired from IMR was merged with the
existing online stockbroking business of Appleton. These transactions were
effective 1 July 2000.
Appleton has three primary divisions which are illustrated as follows:
APPLETON LIMITED
| | |
Appleteon International Appleton Asset Management Appleton Securities
Asset Management (South Africa)
GROUP STRUCTURE
Appleton International Asset Management focuses as a Global Multi Management
and Trading Advisor fund management business with offices in London, Dublin,
Guernsey and representation in New York.
Appleton Asset Management (South Africa) services both institutional and
private clients.
Appleton Securities is a fully integrated stockbroking business, providing
traditional stockbroking and corporate broking services to private and
institutional clients as well as providing online stockbroking services.
OPERATIONAL REVIEW
The period under review was characterised by a very difficult financial
services market. The corporate structure of Appleton also underwent substantial
changes as a result of the acquisitions concluded during the period. The
Company is therefore pleased to report headline earnings per share of 0,55
cents.
Changes to GAAP have required all companies to amortize intangibles through the
income statement. The period of amortization directly affects attributable
profit whilst headline earnings remain unaffected. Your Directors believe that
even though the acquisitions concluded during the period will result in
significant benefits in future years, they have elected to write off the
intangible assets arising from the acquisitions in order to simplify the
Group's Balance Sheet. Net attributable earnings were affected as a result of
this write-off during the period.
ASSETS UNDER MANAGEMENT
Third party assets under management at the end of the period amounted to R3,4
billion. Assets managed on behalf of South African clients represent R1,9
billion (56% of total assets under management) while assets under management
internationally total R1,5 billion (44% of total assets under management). This
is particularly pleasing and is in line with the Company's stated strategy of
increasing assets under management.
SEGMENTAL ANALYSIS OF HEADLINE EARNINGS
The segmental analysis of headline earnings is as follows:
* Appleton International Asset Management - R4 521 000 (71,3%);
* Appleton Asset Management (South Africa) - R659 000 (10,4%);
* Appleton Securities - R1 158 000 (18,3%).
The performance of the international asset management division has surpassed
expectations contributing 71,3% of headline earnings during the period thus
fulfilling the company's expectations of operating as an integrated
international company with hard currency earnings. Assets under management grew
to US$200 million or R1,5 billion during the period. Several of Appleton's
international funds continue to achieve top quartile performance and have done
so since inception in 1997. Internationally, Appleton operates out of Guernsey,
Dublin, London and New York.
Total assets managed by the South African division grew to R1,9 billion in the
period to December 2000, of which R0,5 billion represented Institutional
assets. Institutional portfolios managed by Appleton have benefited from the
enviable track record of the asset management team acquired with RAD-AFC, who
have consistently achieved top quartile performance over the last five years.
Both the South African and International Asset Management divisions generate
annuity income from asset management fees. These fees are received monthly
based on the value of portfolios managed on behalf of third parties.
Performance fees are also currently earned internationally.
The stockbroking division is highly sensitive to market activity on the JSE
Securities Exchange SA ("JSE"). The period under review has been characterised
by extreme volatility and low volumes, which have impacted on the profitability
of this business. An increasing number of new clients have chosen to avail
themselves of the internet based JSE trading facilities offered by the Group.
This has enabled the on-line business to make a positive contribution to
earnings during the period. Clients have also been migrating to asset
management products and the envisaged synergies between the Asset Management
and Securities divisions are being realized.
PROSPECTS
The Directors are confident that Appleton will be able to realize significant
synergies, notably so in the form of material cost savings and the realisation
of additional revenue opportunities, from the acquisitions concluded during the
period. Tremendous opportunity exists to grow the international business off a
relatively low cost base and accordingly significant expansion in Appleton's
International Division is anticipated. It is the Directors intention to declare
an annual dividend. Appleton is well capitalised and has strong cash reserves,
which should enable it to follow its stated strategy of growing assets under
management.
On behalf of the Board
C HULTZER (Chairman)
Cape Town
13 February 2001
Directors: C Hultzer (Chairman)*, D Andre*, M Bolton*, S M Campbell, A H Diem,
W Rosenberg,
S D Shane, D B Sneddon *non-executive
Group Secretary: J R Reid
Registered Office: T.A.G House, Alphen Park, Constantia Road, Constantia, 7806
Appleton Offices: Cape Town, Dublin, Durban, Johannesburg, Guernsey, London,
Port Elizabeth
Transfer Secretaries: Mercantile Registrars Ltd, 10th Floor, 11 Diagonal
Street, Johannesburg, 2001
Web-site address: www.appleton.com
