| Fri 9 Mar 2001, 0:00 | | Sail - Financial Results |
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Financial highlights
* Headline earnings up 56%
* Net asset value up 205%
* Headline earnings per share up 28%
* Net asset value per share up 131%
Audited Group Results
for the year ended 31 December 2000
BALANCE SHEET
31 December 31 December
2000 1999
R'000 R'000
ASSETS
Non-current assets
Deferred taxation 4 499 3 149
Investments and loans 475 2 424
Goodwill 27 158 10 647
Leasehold right 31 462 31 793
Trademarks 34 506 36 536
Property, plant and equipment 43 984 35 323
Investments in associates 50 265 36 691
Investments in joint ventures 7 697 3 602
200 046 160 165
Current assets 112 286 40 372
Total assets 312 332 200 537
EQUITY AND LIABILITIES
Capital and reserves 184 305 60 310
Minority interest 4 344 1 519
Total shareholders' interest 188 649 61 829
Non-current liabilities
Interest bearing borrowings 71 254 72 634
Non-interest bearing borrowings 4 375 11 306
Income received in advance 2 823 3 992
78 452 87 932
Current liabilities 45 231 50 776
Total equity and liabilities 312 332 200 537
Net asset value per share (cents) 76.95 33.29
Shares in issue 245 168 386 185 708 927
STATEMENT OF CHANGES IN EQUITY
Non-
Share Accumulated distributable Total
capital profit reserve
R'000 R'000 R'000 R'000
Balance at 1 January 1999
- previously reported 69 328 6 894 225 76 447
- adjusted for change in
accounting policy - (1 759) - (1 759)
Goodwill written off
against stated capital (49 255) - - (49 255)
Issue of share capital 24 900 - - 24 900
Share issue expenses
written off (79) - - (79)
Net profit for the year
- previously reported - 13 053 - 13 053
- adjusted for change in
accounting policy - (2 997) - (2 997)
Balance at
31 December 1999 44 894 15 191 225 60 310
Issue of share capital 110 000 - - 110 000
Share issue expenses
written off (860) - - (860)
Net profit for the year - 14 855 - 14 855
Transferred to non-
distributable reserve - (3 516) 3 516 -
Balance at
31 December 2000 154 034 26 530 3 741 184 305
INCOME STATEMENT
31 December 31 December
2000 1999
R'000 R'000
Revenue 72 883 63 883
Other income 8 153 6 597
Operating expenses (63 231) (43 724)
Profit from operations 17 805 26 756
Finance costs (14 001) (15 236)
Income/(loss) from associates and
joint ventures 11 106 (569)
Profit before tax 14 910 10 951
Taxation 112 (905)
Profit after tax 15 022 10 046
Minority interest (167) 10
Net profit for the year 14 855 10 056
Earnings per share (cents)
after restatement 7.23 5.95
Headline earnings per share (cents)
after restatement 8.01 6.25
Weighted average shares in issue 205 528 746 169 117 856
Effect of restatement due to:
(see restatement)
Change in accounting policy in respect of intangible assets
Earnings per share (cents) (1.83) (1.77)
Headline earnings per share (cents) (0.71) (0.87)
CASHFLOW STATEMENT
31 December 31 December
2000 1999
R'000 R'000
Cash inflow/(outflow) from operating activities 4 090 (5 241)
Cash outflow from investing activities (24 828) (22 172)
Cash inflow from financing activities 86 394 8 493
Reconciliation of cash and cash equivalents
Net increase/(decrease) in cash and cash equivalents 65 656 (18 920)
Cash and cash equivalents beginning of year 7 853 26 773
Cash and cash equivalents at end of year 73 509 7 853
SEGMENT REPORT
for the year ended 31 December 2000
Sports Brands: Other Online Adjustments Total
Rugby, Soccer investments and
Cricket and Golf media
R'000 R'000 R'000 R'000 R'000
Revenue 60 994 10 568 2000 (679) 72 883
Segment result 13 768 (3 018) (417) (679) 9 654
Interest earned 1 418 3 339 195 - 4 952
Finance costs (14 001)
Profit on
dilution of shareholding 87
Profit on
maturing endowment 3 105 - - - 3 105
Profit on sale of
fixed assets 7
Income/(loss) from associates
and joint ventures 9 010 (843) 2 939 - 11 106
Minority interest (167)
Income tax 112
Net profit for the year 14 855
Other information
Segment assets 121 708 91 642 4 152 (880) 216 622
Investment in associates 39 044 5 620 5 601 - 50 265
Investment in joint ventures 7 697 - - - 7 697
Other investments 6 091
Goodwill 27 158
Deferred taxation 4 499
Total assets 312 332
Segment liabilities 16 094 8 178 469 (880) 23 861
Long-term borrowings 75 629
Current portion of
long-term borrowings 23 445
Taxation 748
Total liabilities 123 683
Capital expenses 9 350 1 128 20 - 10 498
Depreciation 1 112 1 951 19 - 3 082
Overview
SAIL is pleased to report strong growth in the year under review. Headline
earnings per share grew by 28% from 6,25 cents to 8,01 cents per share. Net
asset value per share grew by 131% from 33,29 cents to 76,95 cents per share.
Effective 1 September 2000, Luna Corporation injected a further R110 million
capital into SAIL, as part of a restructuring of SAIL and Luna Corporation
(SAIL's holding company). The remaining capital is earmarked for further
expansion as detailed under the "looking forward" section below.
SAIL's R9.3 million increase in cash generated by operations, is pleasing, and
with SAIL focussing on this aspect, further improvements are expected.
In the past year, SAIL expanded its Sports Brands business both organically and
through acquisitions. SAIL improved the operational effectiveness of its sports
brands businesses, and further entrenched a bottom-line focussed culture. SAIL
extended its core Sports Brands investment portfolio by acquiring its first
cricket brand and extending its investments in golf.
SAIL further extended its investments in businesses associated to Sports
Brands. In particular, through the investment in Sportal Australia (an
Australian sports Internet portal) and subsequent to year-end, the acquisition
of TicketWeb SA (an online and box office ticketing company).
RESTATEMENT
Due to the introduction, on 1 January 2000, of Accounting Statement AC 129,
SAIL has changed its accounting policy relating to Trademarks and Goodwill.
Whereas these items were not previously amortised they are now being amortised
over a 20-year period.
For the purpose of simplicity, SAIL has changed its accounting policy in
respect of Joint Ventures, from the benchmark proportionate consolidation
method to, the allowed alternative equity method.
The comparative figures have been restated for both changes in accounting
policy. The change in accounting policy relating to Joint Ventures has no
effect on SAIL's income statement. The effect of the change in accounting
policy relating to AC 129 is disclosed at the base of the income statement.
Highlights
Sports Brands
* Western Province Rugby's spectacular Currie Cup victory, in SAIL's first year
as a shareholder in the brand
* The popularity of the Super 12, Tri-Nations, World 7's competitions, and the
resurgence of Northern Hemisphere competition, providing a base for future
opportunities in the rugby industry
* The acquisition of a 50% stake in Border Bears Cricket - our first investment
in cricket
* The successful opening of four new golf practice centres, two in Gauteng, and
one in Cape Town and East London respectively
* The launch of Pro Range Golf - the "on range" golf retail division.
Associated Businesses
* The joint venture investments with Johnnic eVentures in Sportal SA, and
subsequent to year-end, in TicketWeb SA
* The successful launch and operation of sarugby.net - the official website of
SARFU - by Sportal SA
* The success of Sportal Australia - which SAIL embarked on as a "toe in the
international waters" is now the top multi sport portal in Australia
Business Strategy and Vision
SAIL's strategy remains firmly focused on a clear vision to grow its Sport
Brands into quality businesses and to build brand loyal relationships between
its Sports Brands and their consumers.
A prerequisite to this strategy, is Market Leadership, which provides SAIL with
the critical mass necessary to make meaningful commercial improvements to the
entire industry. If SAIL cannot achieve Market Leadership, within a specified
time frame, its strategy is to exit from the investment.
The growth of SAIL's Sports Brands into quality businesses with brand loyal
customer relationships will be achieved by:
* Dedicated management focusing on effective financial control, innovative
marketing, human resource development, and building strong, trusting
relationships with our partners in each of the brands
* Investing in new business opportunities that will enhance the quality of the
Sports Brands, adding both value and profitability
* Accessing the sports consumer by electronic means
Dedicated management
SAIL is adapting its management structures in order to better service its
Sports Brands. The restructuring separates the Sports Brands operational and
management functions, from the marketing, acquisition and associated business'
divisions.
As in the past, SAIL will continue to provide its financial and operational
input into the brands. In addition, SAIL will become more involved in other
operational aspects of the brands, in partnership with its Sports partners, to
advance the quality of its Sports Brands product.
New business opportunities
SAIL's direct interests in various sports brands presents and creates various
business opportunities that are, in themselves, potentially profitable, and
furthermore enhance the quality, significance and profile of the sports brands
themselves. These include opportunities to commercially interact on various
fronts with the spectator and supporter base.
Accessing the Sports Consumer Electronically
While television still plays the major role in servicing the electronic sports
consumer, new technological advances are continually generating additional
opportunities for our sport brands to communicate directly with their customer
base. We believe that this holds important revenue growth opportunities for the
Sports Brands.
SAIL is investigating the opportunities presented by broadband and 3G
technologies as alternative distribution channels. These and other
opportunities will be pursued with SAIL's capital and technology partners.
Looking Forward
During the year under review, SAIL's issued share capital was increased by 59
459 459 shares, pursuant to a restructuring of SAIL and its holding company
Luna Corporation.
Cash from operations and the abovementioned share issue resulted in SAIL, the
company, having R59,44 million cash available for the expansion plans listed
below.
Sports Brands
In the year ahead, SAIL plans to expand its pioneering and leadership role in
the Sports Brands market, both locally and internationally. The emphasis will
be on the quality of the performance and better packaging of the sports brands'
products. SAIL is considering investments in other sporting codes, which have
broad consumer appeal.
Pro Range
Pro Range will continue to expand in South Africa. International market
research confirms the unique qualities of its commercial golf practice centre
formula. Pro Range will expand internationally once it has achieved a
sufficient level of critical mass locally.
Pro Range will also expand on its successful start in the golf retail division,
adhering to its success formula of linking golf retail sales to Pro Range Golf
Practice Centres.
Media
New Media
In the wake of the global Internet reality check, SAIL will continue bedding
down Sportal SA in terms of traditional business principles. Opportunities of
expanding internationally from our Sportal Australia base will also be pursued.
Traditional Media
In the current year, SAIL plans to extend its brands' reach by moving into the
traditional media arena, beyond its current limited magazine publication base.
SAIL sees the group's strategic partners as allies in building extended media
delivery platforms for its Sports Brand's products.
International
SAIL is cautiously investigating opportunities to expand internationally,
particularly in the rugby, cricket and golf markets. These investments will be
both strategically and financially significant.
APPRECIATION
SAIL wishes to express its sincere appreciation to the board members of SAIL,
the board members at the various sport brands, management and staff, sponsors,
governing bodies, its strategic partners and, most of all, to the loyal sports
fans, supporters and customers for their contribution to another successful
year.
SAIL would like to take this opportunity to welcome Jannie Durand, Paul
Leaf-Wright and Cobus Kotze as new members of the Board for the year ahead.
For and on behalf of the board
K.S.E Troskie
Company Secretary
Cape Town
9 March 2001
Registered office
28th Floor, No 1 Thibault Square,
Long Street, 8001, Cape Town
PO Box 4755, 8000, Cape Town
Tel: (021) 425 2288
