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MCU
MCU
MCU - m Cubed Holdings Limited - Abridged report for the year ended 28
February 2011 and notice of annual general meeting
m Cubed Holdings Limited
Incorporated in the Republic of South Africa
Registration number: 1998/014568/06
Share code: MCU ISIN: ZAE000033353
("m Cubed" or "the company" or "the group")
ABRIDGED REPORT FOR THE YEAR ENDED 28 FEBRUARY 2011 AND NOTICE OF ANNUAL
GENERAL MEETING
Shareholders are hereby advised that the Annual Report of m Cubed for the
year ended 28 February 2011 will be posted to shareholders on or before 30
June 2011. This report contains the audited annual financial statements for
the year ended 28 February 2011.
Part A : Condensed audited financial statements
1. Basis of preparation
The results have been prepared in accordance with International Financial
Reporting Standards ("IFRS"), the Companies Act of South Africa, (Act 61 of
1973, as amended ("Companies Act"), and the Listings Requirements of the JSE
Limited ("JSE"). The accounting policies are consistent with those of the
previous financial period.
2. Condensed statement of Financial Position
Audited Audited
Group Group
2011 2010
ASSETS R`000 R`000
Non-current assets
Property, plant and equipment - 9
Financial assets at fair value through 11,000 -
profit and loss
11,000 9
Current assets
Loans and receivables 10,172 186,344
Current taxation 3,071 1,577
Cash and cash equivalents 57,907 108,729
71,150 296,650
Total assets 82,150 296,659
EQUITY
Equity attributable to the owners of the
company
Ordinary shares 7,385 7,385
Share premium 87,668 227,990
Foreign currency translation reserve - 2,353
Accumulated loss
(28,751) (22,978)
Total equity 66,302 214,750
LIABILITIES
Current liabilities
Provisions 8,809 15,553
Employee benefits - 109
Trade and other payables 7,039 66,247
Current taxation - -
15,848 81,909
Total liabilities 15,848 81,909
Total equity and liabilities 82,150 296,659
3. Condensed statement of comprehensive income
Audited Audited
Group Group
2011 2010
R`000 R`000
Continuing operations
Investment income 11,813 32,330
Other income 2,780 (152)
Total Income 14,593 32,178
(Operating expenses)/ recovery of operating (17,634) 16,372
expenses
Exchange rate profit on unbundling of - 8,455
subsidiary
Total (Expenses)/ recovery of expenses (17,634) 24,827
Results of operations (3,041) 57,005
Interest expense - (686)
(Loss)/Profit before tax (3,041) 56,319
Income tax expense (2,732)
(42,464)
(Loss)/Profit from continuing operations (5,773) 13,855
Discontinued operations
Loss from discontinued operations - (260)
(Loss)/Profit for the year (5,773) 13,595
Other comprehensive (loss)/income
Currency translation differences (2,353) (16,781)
Total comprehensive loss for the year, net (8,126) (3,186)
of tax
(Loss)/profit for the year attributable to:
Equity holders of the company (5,773) 13,595
Total comprehensive loss for the year (8,126)
attributable to: (3,186)
Equity holders of the company
4. Condensed consolidated cash flow statement
Audited
Group Audited
Group
2011 2010
R`000 R`000
Cash flows from operating activities (38,114) (127,237)
Continuing operations (38,114) (117,855)
Cash generated from/(utilised by) 92,913 (43,864)
operations
Interest and dividends received 13,521 22,909
Interest expense - (686)
Taxation paid (4,226) (63,674)
STC paid - (3,000)
Payments to shareholders (140,322) (29,540)
Discontinued operations - (9,382)
Cash utilised by operations - (9,382)
Cash flows from investing activities (12,708) 17,480
Continuing operations (12,708) 8,358
Additions to property, plant & equipment - (11)
(Increase)/Decrease in investments (12,708) 8,369
Discontinued operations - 9,122
Decrease in investments - 9,122
Net (decrease)/increase in cash and cash (50,822) (109,757)
equivalents
Cash and cash equivalents at the beginning of 108,729 218,486
the year
Cash and cash equivalents at the end of the 57,907 108,729
year
5. Condensed consolidated statement of changes in equity
2011 audited Share Share Foreign Accumulated Total
capital premium currency profits/
translation (losses)
reserve
R`000 R`000 R`000 R`000 R`000
Group
Balance at 1 March 7,385 227,990 2,353 (22,978) 214,750
2010
Decrease in foreign - - (2,353) - (2,353)
currency translation
reserve
Net loss for the year - - - (5,773) (5,773)
Capital reduction - - -
payment (140,322) (140,322)
Balance at 28 7,385 87,668 - (28,751) 66,302
February 2011
2010 audited Share Share Foreign Total
capital premium currency Accumulated
translation profits/
reserve (losses)
R`000 R`000 R`000 R`000 R`000
Group
Balance at 1 March 7,385 227,990 19,134 (7,033) 247,476
2009
Decrease in foreign - - (16,781) - (16,781)
currency translation
reserve
Net profit for the - - - 13,595 13,595
year
Dividend paid - - - (29,540) (29,540)
Balance at 28 7,385 227,990 2,353 (22,978) 214,750
February 2010
6. Segmental results
Consistent to prior year, no segmental information is provided as the group
was in a winding down phase and no trading took place during the year.
7. Reconciliation of headline (loss)/earnings
Audited Audited
Group Group
2011 2010
R`000 R`000
(Loss)/profit for the (5,773) 13,595
year
Exchange rate profit on unbundling of - (8,455)
subsidiary
Headline (loss)/earnings attributable to
shareholders (5,773) 5,140
8. Net asset value per share
Number of shares in issue (`000) 738 537 738 537
Net asset value per share (cents) 9.0 29,1
Net tangible asset value per share (cents) 9.0 29,1
9. Earnings per share
Number of shares in issue (`000) 738 537 738 537
Headline (loss)/earnings per share (cents) (0.8) 1.8
Diluted headline (loss)/earnings per share (0.8) 1.8
(cents)
Part B : Notes and directors` comments
1. Change in control
In January 2011, m Cubed`s majority shareholder (PSG Group Ltd) received an
offer from Trinity Asset Management to buy its entire 29% stake in the
company. With the life insurance license being cancelled and the issues with
the regulators settled, PSG decided to sell its stake in m Cubed. The
Trinity Asset Management team appointed by the board has now taken over the
responsibility of managing the affairs of the Group.
Quinton George has been appointed CEO together with James Fitzpatrick as
Executive Director and Stephen Black as Financial Director, and the board is
excited with them driving the vision of building m Cubed as a reputable
investment holding company.
2. Nature of business and prospects
m Cubed historically owned a number of focused investment services
businesses. The Group has largely unwound its operations with the primary
objective of converting these assets to cash to unlock maximum value for
shareholders. The Company is now changing its focus to that of investment
holding company. Irrevocable support has been obtained from the majority of
shareholders and we hope to soon provide all shareholders with further
information. This will be done as soon as the relevant regulatory
authorisations have been obtained and all the necessary resolutions can be
tabled at a single shareholders meeting.
The JSE has formally informed the Company that it is deemed to be a cash
shell as defined in terms of the Listings Requirements and that the company
have time until 30 September 2011 to make an announcement relating to the
acquisition of viable assets as set out in section 4 of the Listings
Requirements. Failure to do so may lead to termination of the Company`s
listing by the JSE.
Shareholders will be kept informed of the progress.
3. Review of operations
The outstanding matters with the regulator, various disputes and legal cases
in the group have been mostly resolved. The notable exceptions is m Cubed
Life that has a few remaining legal disputes and m Cubed Specialised Lending
that has outstanding balances with an offshore trust, pending a SARS legal
dispute. During the year the amount due from the regulator has also been
received in cash following implementation of the settlement agreement. All
outstanding matters are dealt with in the annual report.
4. Events subsequent to year-end
Subsequent to year-end the company entered into the following short term
financing transactions to optimise return on available cash while further
investment opportunities are being investigated:
Transaction Amount Terms
Transaction R7m 6 month financing arrangement at prime
1 plus 2% *
Transaction R6.5m 9 month financing arrangement at prime
2 plus 4% *
Transaction R10m 9 month financing arrangement at prime
3 plus 2%.
Transaction R10.9m 2 month financing arrangement at 25% per
4 annum **
The board of directors is satisfied that all of the above financial
arrangements have adequate security and underlying assets in place to
preserve the capital invested.
*Financing arrangements include options that if exercised will result in
equity holdings in listed companies
** Financing arrangements include conversion options that if exercised will
convert the debt into equity holdings.
Subsequent to year-end the company`s subsidiary, m Cubed Specialised
Lending, entered into the following transactions:
Transaction Amount Terms
Purchase of equities R8.2m Convergenet Holdings Ltd (JSE: CVN)
Capital reduction by a subsidiary:
During the year m Cubed Life, a 100% subsidiary, returned R50m capital to m
Cubed Holdings through a share buy-back. Subsequent to year-end, another
share buy-back was completed, thereby distributing a further R15m cash to m
Cubed Holdings.
Part C : Auditors` unqualified opinion
The auditors, PricewaterhouseCoopers Inc., have issued an unqualified
opinion on the Group`s financial statements for the year ended 28 February
2011. The report of the auditor is available for inspection at the company`s
registered office.
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of m Cubed will be
held at Block F, The Terraces, Steenberg Office Park, Tokai, Cape Town on 31
August 2011 at 12h00, to transact the business as stated in the notice of
the Annual General Meeting, which is included as part of the Annual Report
that will be distributed to shareholders on or before 30 June 2011.
Stellenbosch
31 May 2011
Registered office:
Afrasia House, Block F, The Terraces, 1 Silverwood close, Steenberg, Tokai
Telephone 021 700 4880 Facsimile 021 702 2429
Transfer offices:
Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg
2000
PO Box 61051, Marshalltown, 2107
Telephone: 011 370 5000, Facsimile: 011 370 5487
Directors: AM Louw* (Chairman), W Roux*, Q George (CEO), SJ Black (FD), J
Fitzpatrick
*Non-executive
Auditors: PricewaterhouseCoopers Inc.
Company secretary: Russell Turner
Unit 24 Draper Square, Draper Street, Claremont, 7740
Telephone: 086 599 0077
Bankers: The Standard Bank of South Africa Limited
Sponsors: PSG Capital (Pty) Limited
Attorneys: Werksmans Inc.
Date: 01/06/2011 08:17:00 Produced by the JSE SENS Department.
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