| Fri 2 Mar 2001, 0:00 | | Sasani Limited Unaudited Results |
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SASANI LIMITED
Registration number 1955/000259/06
UNAUDITED RESULTS for the six months ended 31 December 2000
REVIEW
Continued satisfactory performance was experienced amongst Sasani's companies
with the exception of the camera and lighting rental businesses, MCC/Logical
Designs. The drop in turnover and profitability negatively impacted the group's
results and masks the performance of the other companies in the Sasani group,
all of which are profitable and have performed well.
While the relative dearth of feature film work continued in the review period,
several group companies benefited from a substantial increase in local
television production and from the continued buoyancy in foreign television
commercial work, particularly during the final quarter of the calendar year.
The Film Lab Cape Town and The Video Lab Cape Town have demonstrated their
abilities to satisfy local and international demand and as such reflect
excellent year-on-year growth. The group as a whole has also benefited from the
local content conditions applicable to South Africa's broadcasters.
In keeping with the strategy to re-focus Sasani's activities in the media
services sector, initiated last year, the group is in the process of divesting
from non-core businesses. Negotiations are currently underway with several
interested parties.
RESULTS
The profit warning published on January 19 indicated that earnings for the
period are substantially below the prior period. Turnover at
R152 million declined by 3,6% compared to the previous period. Operating income
before depreciation dropped by 18,9%, reflecting the adverse performance
recorded by the group's camera and lighting rental business during the period
under review.
Headline earnings at R5,2 million are 57,6% down on the same period last year,
reflected in a decline in headline earnings per share to 7,9 cents.
Outside shareholders interest's include the outside shareholders portion of
Sasani Communications for the first time due to Sasani acquiring a further 3%
in the company effective 1 July 2000. Previously the company was
proportionately consolidated.
Despite the group's profit decline, the net debt position continued to improve,
primarily as a result of the net receipt of R14,2 million on the sale of ESPM.
Further reductions are expected by year-end.
OUTLOOK
The decline in business levels at MCC/Logical Designs is expected to continue
in the short-term, such that annual group earnings are likely to be
substantially lower than in the prior year. While the group's other businesses
are performing satisfactorily and consistently exceed last year's actuals and
current budgets, this will not be sufficient to compensate for the reduced
profitability of MCC/Logical Designs.
Plans have been implemented to stimulate renewed growth in this business. This
includes substantial restructuring of the MCC/Logical Designs operations in
Johannesburg and Cape Town, leading to a reduction in fixed overheads; enhanced
sales and marketing efforts; and the strengthening of the management team. The
restructuring costs are partially reflected in these interim results under
exceptional items.
Sasani remains committed to developing its core competencies within South
Africa's moving picture industry to their full potential. The group is involved
in industry-level discussion and action groups and has implemented content
creation initiatives throughout the group. These initiatives will also improve
control over revenue. Efforts to attract foreign investment into a film studio
infrastructure and communication with relevant Government and private sector
groupings involved in a regeneration of the film and video industry continue.
Following the success of Sasani's first venture into the carefully constructed
co-financing of a feature length film, the group is currently involved in a
second multi-national co-production, which is scheduled for release mid-2001.
DIVIDEND
In line with our policy to consider payment of annual dividends, no interim
dividend has been declared.
CHANGES TO THE BOARD OF DIRECTORS
M George and MJ Smit left the Sasani board of directors during the period under
review.
STRATE
The JSE Securities Exchange has advised that Sasani Limited has been selected
to transfer to the STRATE settlement and custody system on 4 June 2001. Trading
for electronic settlement begins on 25 June 2001 and from this date
shareholders will not be able to sell their Sasani shares unless they exist in
electronic form in the STRATE environment i.e. unless the shares have been
deposited with a Central Securities Depositary Participant (CSDP) or qualifying
stockbroker. Paper share certificates will not lose their value once the
company moves to the STRATE system, but they will no longer be acceptable for
purposes of settlement.
On behalf of the board
28 February 2001
NJ Frangos SJ Gordon PT Slater
Non-executive Chairman Chief Executive Officer Group Financial Director
Registered office Transfer office
2 Johannesburg Road Mercantile Registrars Limited
Highlands North Ext. 6 11 Diagonal Street
Lyndhurst 2192 Johannesburg 2001
28 February 2001
UNAUDITED RESULTS for the six months ended 31 December 2000
GROUP INCOME STATEMENT
UnAudited UnAudited Audited
6 months ended 6 months ended 12 months ended
31 December '00 31 December '99 30 June '00
R'000 R'000 R'000
Revenue 152 269 157 879 319 340
Operating profit before
depreciation (EBITDA) 29 446 36 312 75 669
Depreciation (15 932) (14 220) (30 303)
Amortisation of trademarks (4 972) (4 972) (9 944)
Operating profit before
exceptional items 8 542 17 120 35 422
Exceptional items (1 699) (1 735) 19 476
Operating profit 6 843 15 385 54 898
Net interest paid (2 748) (3 733) (7 533)
Profit before taxation 4 095 11 652 47 365
Taxation - this year (1 668) (4 758) (10 073)
Taxation - previous years (505) - (396)
Profit after taxation 1 922 6 894 36 896
Outside shareholders'
interest (2 869) (1 320) (8 773)
Earnings attributable to
ordinary shareholders (947) 5 574 28 123
Headline earnings reconciliation
Earnings attributable
to ordinary shareholders (947) 5 574 28 123
Add: Amortisation of
trademarks 4 972 4 972 9 944
Exceptional items (net of
taxation and minorities): 1 184 1 735 (14 285)
- Rationalisation costs
and profit on sale
of businesses 1 184 1 735 (15 176)
- Loss/scrapping of
assets - - 628
- Restraint of trade - - 263
Headline earnings 5 209 12 281 23 782
Number of shares (000's)
Issued and weighted
average 65 776 65 776 65 776
Earnings per ordinary share (cents)
Headline earnings 7,9 18,7 36,2
Earnings attributable to
ordinary shareholders (1,4) 8,5 42,8
EBITDA (%) 19,3 23,0 23,7
Operating income before
exceptional items (%) 5,6 10,8 11,1
Effective rate of taxation
% (this year) 40,7 40,8 21,3
Interest cover (times)
- Operating profit
before exceptional items 3,1 4,6 4,7
GROUP BALANCE SHEET
UnAudited UnAudited Audited
31 December '00 31 December '99 30 June '00
R'000 R'000 R'000
ASSETS
Non-current assets 181 871 201 596 192 469
Property, plant and
equipment 105 754 116 925 112 833
Trade marks and
copyrights 70 567 80 901 75 208
Other assets 5 550 3 770 4 428
Current assets 83 147 95 568 83 269
Inventories 11 156 8 618 9 585
Trade and other
receivables 66 240 75 995 49 099
Proceeds from sale of
ESPM Legends
(net of intercompany
loan) 3 466 - 19 479
Cash and cash equivalents
net of bank overdrafts 2 285 10 955 5 106
Total assets 265 018 297 164 275 738
EQUITY AND LIABILITIES
Capital and reserves
Share capital and non-
distributable reserves 112 043 112 043 112 043
Distributable reserves 35 306 13 704 36 252
Issued capital and
reserves 147 349 125 747 148 295
Minority interests 23 469 20 557 19 722
Deferred taxation 9 900 7 764 10 376
Non-current liabilities 21 083 23 755 22 006
Interest bearing
borrowings 21 083 23 755 22 006
Current liabilities 63 217 119 341 75 339
Trade and other payables 42 984 71 880 39 513
Taxation payable 3 669 6 507 4 726
Interest bearing
borrowings 16 338 35 903 24 561
Non-interest bearing
borrowings 226 5 051 6 539
Total equity and
liabilities 265 018 297 164 275 738
Gearing percentage 21,9 40,8 27,7
Capital expenditure 8 965 19 632 35 546
Net asset value per share (cents)
Including intangible assets 224,0 191,2 225,5
Excluding intangible assets 116,7 68,2 111,1
GROUP CASH FLOW STATEMENT
UnAudited UnAudited Audited
6 months ended 6 months ended 12 months ended
31 December '00 31 December '99 30 June '00
R'000 R'000 R'000
Cash generated by
operations 27 747 34 122 70 785
Net interest paid (2 748) (3 733) (7 533)
Increase in working
capital (14 075) (4 044) (1 954)
Taxation paid (4 228) (6 063) (8 838)
Dividends paid to
minorities (750) - -
Cash available from
operations 5 946 20 282 52 460
Net receipts/(payments)
for businesses 15 793 (24 627) (29 678)
Net fixed assets acquired (8 965) (19 552) (33 327)
Other investing activities (1 122) (2 520) (2 516)
Cash flow before financing
activities 11 652 (26 417) (13 061)
Financing activities (15 459) 19 895 9 244
Net movement in cash and
cash equivalents (3 807) (6 522) (3 817)
Cash and cash equivalents
at beginning of the period 5 106 17 477 11 790
Cash and cash equivalents
of business acquired/(sold) 986 - (2 867)
Cash and cash equivalents
at end of the period 2 285 10 955 5 106
LOCAL TELEVISION CONTENT QUOTAS BOOST SASANI
A substantial increase in local television production in the latter six months
of 2000, together with continued buoyancy in foreign television commercial
work, facilitated a profitable performance for most of the core businesses
within listed media services group Sasani Limited ("Sasani") during the same
period. Of particular benefit across the group was the enforcement of local
content conditions applicable to South Africa' broadcasters, while growth in
local and international demand enabled The Film Lab Cape Town and The Video Lab
Cape Town to produce exceptional growth, year-on-year.
However, an adverse performance over the same six-month period from camera and
lighting rental business, MCC/Logical Designs, effectively negated this growth.
In consequence, the group's interim results for the six months to 31 December
2000, published today, reveal a 3,6% decline in turnover to R152 million and an
18,9% drop in operating income before depreciation. Headline earnings at R5,2
million are 57,6% lower than the same period last year, yielding a decline in
headline earnings per share to 7,9 cents.
Commenting on the results, Sasani CEO Sandra Gordon says, "Without exception,
our other businesses are profitable and have performed well.
Regrettably, this has not been sufficient to compensate for the reduced
profitability of MCC/Logical Designs."
Going forward, Gordon says that the decline in business levels at MCC/Logical
Designs is expected to continue in the short-term, such that annual group
earnings are also likely to be lower than in the prior year.
She advises that the group has implemented plans to stimulate renewed growth in
this business, with a view to achieving a turnaround in the medium term.
The plans include substantial restructuring of the MCC/Logical Designs
operations in Johannesburg and Cape Town, leading to a reduction in fixed
overheads; enhanced sales and marketing efforts; and the strengthening of the
management team.
Gordon adds that the group's net debt position has continued to improve despite
the profit decline, and that further reductions are expected by year-end.
Likewise, the currently high debtors balance as at 30 December 2000 has
improved substantially and should be in line with the previous year's balance
sheet by 30 June 2001.
"The prospects for growth within our core businesses remain good," continues
Gordon. "We remain committed to developing our core competencies within South
Africa's moving picture industry to their full potential and to growing the
industry as a whole. To this end, we have implemented content creation
initiatives throughout the group and are in communication with public and
private sector groupings whose objectives include regenerating the South
African film and video industry and attracting foreign investment into a film
studio infrastructure. In addition, Sasani is currently involved in
co-financing a second multi-national feature length film, which is scheduled
for release mid-2001."
ENDS
Issued by: On behalf of:
Bronwyn Coppola Sandra Gordon
Channel. Sasani Limited
Tel: + 27 11 803 0382 Tel: +27 11 719 4000
Cell: + 27 83 450 9111
Email: bronwyn@channelpr.co.za Email: sandrag@sasani.co.za
