| Wed 28 Feb 2001, 0:00 | | Fashaf - Unaudited Results |
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Fashion Africa Limited
(Registration number 1944/017149/06)
("Fashaf" or "the company")
SUMMARISED GROUP UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2000
Income Statements
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31/12/00 31/12/99 30/06/00
R 000's R 000's R 000's
Revenue 243 342 253 814 462 083
Operating
profit/(loss) 2 276 3 953 (12 064)
Net interest paid (3 867) (1 046) (3 459)
Reorganisation
costs (1 745) - (21 118)
Cancellation of
Share Scheme loan - - (3 005)
(Loss)/Profit
before taxation (3 336) 2 907 (39 646)
Taxation - 842 320
(Loss)/Profit
before extraordinary
item (3 336) 2 065 (39 966)
Extraordinary item - - (977)
Net (loss)/profit
for the period (3 336) 2 065 (40 943)
(Loss)/Earnings per
share (cents) (1.3) 0.9 (16.8)
Headline (loss)
/earnings per
share (cents) (0.6) 1.0 (6.4)
Balance Sheets
Unaudited at Unaudited at Audited at
31/12/00 31/12/99 30/06/00
R 000's R 000's R 000's
ASSETS
Non-current assets
Fixed assets 37 818 34 600 34 518
Share Scheme loan 2 000 4 040 1 035
Deferred taxation 4 919 664 4 919
44 737 39 304 40 472
Current assets
Inventories 99 694 130 137 77 721
Bank balances
and cash 20 281 34 225 16 842
Amounts receivable 13 314 10 739 5 738
133 289 175 101 100 301
Total assets 178 026 214 405 140 773
EQUITY AND LIABILITIES
Capital and reserves
Share capital and
premium 60 442 66 354 59 858
Accumulated deficit (45 307) 1 037 (41 973)
Ordinary shareholders'
interest 15 135 67 391 17 885
Non-current liabilities
Interest bearing
borrowings 31 604 - 32 000
Deferred taxation 154 - 154
31 758 - 32 154
Current liabilities
Trade and other
payables 119 837 145 739 62 289
Short-term
borrowings - - 17 170
Current portion of
interest bearing
borrowings 10 000 - 10 000
Taxation payable 1 296 1 275 1 275
131 133 147 014 90 734
Total equity and
liabilities 178 026 214 405 140 773
Cash flow Statements
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31/12/00 31/12/99 30/06/00
R 000's R 000's R 000's
Cash flows from
operating
activities 33 547 54 369 (12 617)
Trading
activities 5 548 8 941 (24 196)
Working
capital changes 27 999 45 428 11 579
Net interest paid (3 867) (1 046) (3 459)
Taxation paid 21 - -
Cash flow from
investing
activities (8 316) (12 642) (28 107)
Cash flow from
financing
activities (776) (4 301) 46 010
Change in cash and
cash equivalents 20 609 36 380 1 827
Cash and cash
equivalents at
beginning of
period (328) (2 155) (2 155)
Cash and cash
equivalents at
end of period 20 281 34 225 (328)
Supplementary Information
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31/12/00 31/12/99 30/06/00
R 000's R 000's R 000's
Total ordinary
shares in issue
(000's) 252 897 238 908 243 241
Weighted average
shares in
issue (000's) 251 283 236 810 237 816
Net asset value
per share (cents) 6.0 28.2 7.4
RECONCILIATIONS
OF HEADLINE EARNINGS
Net (loss)/profit
for the period (3 336) 2 065 (40 943)
(Profit)/loss on
sale of fixed
assets (28) 313 738
Reorganisation
costs 1 745 - 21 118
Cancellation of
Share Scheme loan - - 3 005
Extraordinary
item - - 977
Headline (loss)
/earnings (1 619) 2 378 (15 105)
RECONCILIATIONS
OF EQUITY MOVEMENT
Shareholders'
interest at
beginning of
period 17 885 69 498 65 663
Share issues 966 7 600 8 900
Share expenses
written-off (380) (387) (650)
Goodwill
written-off on
acquisition - (11 385) (15 085)
Net (loss)/profit
for the period (3 336) 2 065 (40 943)
Shareholders'
interest at end
of period 15 135 67 391 17 885
Note:
Comparative numbers for the six months ended 31 December 1999 have been
restated to accommodate the change in the method of accounting for lay-bye
sales as was explained in the audited financial statements for the year ended
30 June 2000.
Commentary on results
The ability of the business to generate positive cash flows from operating
activities for this period confirms the effective turnaround in trading
activities. Whilst revenue decreased by 4% over the previous period, due to
some consolidation of the store base, the business returned to profitability
from an operating loss of R12.1m sustained for the year ended 30 June 2000.
This is especially encouraging as the completion of the conversions from
Bergers stores into Dunns stores and the accompanying launch of the new Dunns
only occurred at the end of September 2000.
The operating profit was converted into a net loss due to the high costs of
servicing the debt in the business, as well as reorganisation costs required to
complete the restructuring process.
Rights offer
Management is recapitalizing the business by means
of a renounceable rights offer to shareholders, raising approximately R32m. The
rights offer, which is underwritten by Vestacor Limited closes on Friday,
2 March 2001. The full proceeds, net of costs, will reduce the current gearing
from 275% to approximately 21%
and will also reduce interest paid in future.
Relocation of operations
Fashaf announced in the press on 20 September 2000, its intention to relocate
all its operations to Gauteng. This process of relocation is now complete and
no additional reorganisation costs are foreseen.
Change of financial year end
Depending upon the acceptance by shareholders of their rights under the
renounceable rights offer, Fashaf may change its financial year to the end of
February, should the company become a subsidiary of Vestacor Limited.
It must however be borne in mind that January and February are traditionally
poor trading months and that substantial losses are normally expected to
realise in these months.
Prospects
The new structure will in the opinion of the management be able to compete
effectively in its segment of the market. Despite the downturn in earnings to
be incurred in January and February 2001, management are confident that the
results for the year ending 28 February 2002 will reflect a net profit.
For and on behalf of the board
GB Rubenstein
Chairman
C Claassen
Chief Executive Officer
SAW Nothnagel
Chief Financial Officer
27 February 2001
Halfway House
FASHAF BACK INTO PROFIT TERRITORY
MEDIA RELEASE
27 FEBRUARY 2001
Fashion Africa Limited (Fashaf), the value clothing retail group, has turned
last year's operating loss of R12.1-million into an operating profit of
R2.2-million for the past six months.
This sends a message to the market that the company is turning the corner.
Fashaf CEO Christo Claassen, said he was satisfied that attempts to "re-enegise
and re-direct" the future of the company were on track.
"We are working extremely hard to turn Fashaf around and there are still many
obstacles to cross, but we believe that we are well on our way."
The results were achieved despite a decrease in revenue of some four percent
and the fact that conversions from Bergers stores into Dunns stores were only
completed in September last year.
profit territory two
"We view this in a positive light but are fully aware that we cannot rest on
our laurels. There remains much to be done but my entire team are ready to face
the challenges of the new year," he said.
Debt servicing remains an obstacle. "Management is recapitalising the business
by means of a renounceable rights offer to shareholders, raising about
R32-million. The rights offer, which is underwritten by Vestacor Limited closes
on Friday March 2," he said.
Claassen said he was satisfied that Fashaf faced a bright future and that the
company's move to Gauteng was the opening chapter in a new, more profitable
history for the business.
"The strategic shift of certain national clothing retail chains to the value
end of the market appears to be permanent in nature. Fashaf has geared itself
to cope with this situation."
profit territory three
"Fashaf in its present, restructured format, can undoubtedly compete
effectively in this market and to that end, management is confident that the
results for the year ending 28 February 2002 will reflect a net profit,"
Claassen said.
ENDS
ISSUED BY : Bullion PR and Communications
Contact person: Lola Lazarus
Tel: (011) 803-3615
e-mail: lola@bullionpr.com
ON BEHALF OF : Fashaf
Contact person : Christo Claassen:
Chief Executive Officer
Tel: (011) 541-3026
Cell: 082 330 9671
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