| Mon 26 Feb 2001, 0:00 | | Paragon Business Communications Limited - Interim |
|
PARAGON BUSINESS COMMUNICATIONS LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA
REGISTRATION NUMBER:1995/007711/06)
REVENUE UP 9,5%
OPERATING INCOME DOWN 1%
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited % Audited
6 months 6 months Increase 12 months
ended ended (decrease) ended
R'000 31.12.00 31.12.99 30.6.00
Revenue 134 022 122 342 9.5 246 791
Operating income 8 146 8 206 (1.0) 15 417
Interest and financing costs 1 402 1 264 2 549
Net income before taxation 6 744 6 942 (2.9) 12 868
Taxation 2 519 2 499 5 567
Net income after taxation 4 225 4 443 7 301
Share of earnings of
associate company 344 699 899
Attributable to ordinary
shareholders 4 569 5 142 (11.1) 8 200
Dividend - -
Earnings for the period 4 569 5 142 (11.1) 8 200
Determination of headline
earnings
Earnings 4 569 5 142 8 200
Adjustment for (profit)/
loss disposal of fixed assets (34) 7 12
Amortisation of goodwill 1 537 1 532 3 275
Headline earnings 6 072 6 681 (9.1) 11 487
Weighted average number
of shares in issue (000's) 74 000 74 000 74 000
Earnings per share (cents) 6.2 7.0 11.1
Headline earnings per
share (cents) 8.2 9.0 (9.1) 15.5
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
R'000 31.12.00 31.12.99 30.6.00
Assets
Non-current assets 67 191 65 102 69 134
Property, plant and equipment 39 746 33 885 40 043
Intangible assets 26 055 30 370 28 045
Investments 1 390 847 1 046
Current assets 77 006 67 787 69 387
Cash resources 46 40 41
Other current assets 76 960 67 747 69 346
Total assets 144 197 132 889 138 521
Equity and liabilities
Capital and reserves 76 943 74 127 72 375
Non-current liabilities 13 111 8 877 13 910
Interest-bearing borrowings 11 719 7 222 12 376
Deferred taxation 1 392 1 655 1 534
Current liabilities 54 143 49 885 52 236
Interest-bearing liabilities 13 955 8 292 7 253
Non-interest-bearing liabilities 40 188 41 593 44 983
Total equity and liabilities 144 197 132 889 138 521
Number of shares in issue (000's) 74 000 74 000 74 000
Net asset value per share (cents) 104.0 100.2 97.8
Tangible net asset value
per share (cents) 68.8 59.1 59.9
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
R'000 31.12.00 31.12.99 30.6.00
Cash flow from operations
Cash generated from operations 5 104 14 014 25 760
Finance costs (1 402) (1 264) (2 549)
Taxation paid (2 391) (601) (6 780)
Dividends paid (4 772) (4 650) (4 810)
Net cash (outflow)/inflow from
operating activities (3 461) 7 499 11 621
Net cash outflow from investing
activities (2 909) (7 293) (15 529)
Net cash (outflow)/inflow from
financing activities (492) 6 177 10 676
Cash resources
Net (decrease)/increase (6 862) 6 383 6 768
At beginning of period (3 532) (10 300) (10 300)
At end of period (10 394) (3 917) (3 532)
COMMENT ON RESULTS
The six months' trading period to 31 December was marked by two distinct
trends. Trading volumes from our specialist business communications division,
Afric Mail Advertising, continued to grow at a rate significantly in excess of
management's expectations. These gains, however, were more than offset by lower
volumes and reduced margins from the traditional business forms division.
Disappointing results from the forms division can be attributed partly to the
continuing sluggish performance of the local economy, and partly to a shift of
the business cycle in this market towards the second half of the financial year
While revenue for the 6 months at R134m was 9,5% above that of the previous
period, operating income was 1% below, reflecting the intense price pressures
prevalent in the traditional forms market. This has resulted in earnings
attributable to shareholders falling by 11% as compared to the corresponding
period last year.
PROSPECTS
A significant improvement in the results is expected over the next six months.
This improvement will be achieved because of the shift in the business cycle,
and management's focus on reducing operating expenses and improving
efficiencies.
New computer systems are seen by management as essential for the realisation of
further productivity gains, and the company has embarked on a structured
programme to introduce such systems.
The business forms division remains a large and important part of the business,
and will benefit directly from the new systems. However, management's focus
will be on growing the other aspects of the business and consequently, the new
systems will be selected on their
ability to support sustainable growth which management is confident of
achieving.
Presently under review are a number of exciting business opportunities that
will complement our short- to medium-term business plans and accelerate our
penetration of the fast-growing and profitable business communications market.
On behalf of the Board
DMJ Ncube, Non-executive Chairman
DJ Kidd, Managing Director
23 February 2001
Registered Office: Bofors Circle, Epping Industria 2, Cape Town, 7460
Transfer Secretaries: Ultra Registrars (Pty) Ltd, 11 Diagonal Street,
Johannesburg, P O Box 4844, Johannesburg 2000
Company Secretary: PM Joubert
Directors: DMJ Ncube (Chairman), JJJ Coetzee*(Vice-Chairman), DJ Kidd*
(Managing), MWT Brown (ALT. CR Howell), DR Bulder*(Dutch), KO Fordwor, MD
Macfarlane* (British) and CG McWilliams*
*Executive Directors
PRESS RELEASE
February 26, 2001
PARAGON BOOSTS REVENUE, BUT EARNINGS DROP THROUGH PRICE PRESSURES
Paragon Business Communications Ltd lifted revenue for the six months to
December by 9,5 % to R134 million from R122,3 million, but intense price
pressures in the traditional forms market took their toll on margins, resulting
in interim headline earnings dropping to 8,2 cents a share from 9 cents.
With operating income down 1% to R8,1 million (R8,2 million), and higher
interest (R1,4 million) and tax (R2,5 million), attributable income dropped
11,1% to R4,6 million.
Managing director Dave Kidd said two trends characterised the interim period.
"Trading volumes from our specialist business communications division, Afric
Mail Advertising, continued to grow at a rate significantly in excess of
management's expectations. These gains, however, were more than offset by lower
volumes and reduced margins from the traditional business forms division."
He said disappointing results in the forms division could be attributed partly
to the continuing sluggish performance of the local economy, and partly to a
shift of the business cycle in this market to the second half of the financial
year.
Looking ahead, Kidd said a significant improvement in results was expected
in the next six months because of the shift in the business cycle and
management's focus on reducing operating expenses and improving efficiencies.
"We have embarked on a structured programme to introduce new computer systems,
which we see as being essential to achieving further productivity gains. The
systems will be introduced in conjunction with a restructuring of the
organisation. Our aim is to build on our positioning and ability to provide
world-class business communications solutions through our specialist divisions
- customer communications, fulfilment services and business forms."
Kidd said the new systems would directly benefit the business forms division
which remained a large and important part of group operations.
"Management's focus will also be on growing other aspects of the business and
consequently the new systems will be selected on their ability to support
sustainable growth which we're confident of achieving."
He said several exciting business opportunities were under review.
"These will complement our short- to medium-term business plans and accelerate
our penetration of the fast-growing business communications market."
ends
ISSUED FOR: Paragon Business Communications Ltd
BY: De Kock & Kerkhoff Communication Consultants
INQUIRIES: Dave Kidd, 021 - 507 4111
Rob Bulder, 021 - 507 4111/082 452 0607
Mike Kerkhoff, DeK&K, 021 - 4245280
