| Wed 14 Mar 2001, 0:00 | | Kunene Technology Limited - Interim Results |
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KUNENE TECHNOLOGY LIMITED
Reg. No. 1964/004561/06
INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2000
Results from continuing investments:
Headline Earnings up 60%
Headline Earnings per share up 8%
Group operating results
Unaudited* Unaudited* Audited*
Half-year ended Half-year ended Year ended
31 December 31 December 30 June
Increase/
2000 (Decrease) 1999 2000
R000 % R000 R000
Turnover 612 996 14 539 099 -
Cost of Sales 515 565 13 454 544 -
Gross Profit 97 431 15 84 555 -
Income from investments 6 951 89 3 677 9 608
- interest received 6 843 156 2 674 407
- fees received 108 (89) 1 003 1 819
- dividends received - - - 7 382
Operating expenses 56 783 9 52 266 4 398
Profit before finance costs 47 599 32 35 966 5 210
Finance costs 3 275 (36) 5 131 853
Income from associates 1 045 228 (816) 44 800
Share of Siltek Limited
(loss)/income (2 522) (135) 7 140 -
Profit before taxation 42 847 15 37 159 49 157
Taxation 14 526 67 8 718 8
- current year normal tax 14 526 74 8 371 8
- prior year underprovision - 347 -
Attributable to outside
shareholders of subsidiaries 16 759 34 12 543 -
Headline earnings 11 562 (27) 15 898 49 149
Headline earnings per
share (cents) 22,1 (51) 45,5 140,6
Dividend per share (cents) 4,7 5,6 17,6
- interim 4,7 (16) 5,6 5,6
- final - - 12,0
Weighted average shares in
issue during the period 52 134 969 34 948 696 34 948 696
Shares in issue at end
of period 63 237 520 34 948 696 34 948 696
*Reflects KTL's controlling shareholding in Grintek
Group balance sheets
Unaudited Audited
Half-year ended Year ended
31 December 30 June
2000 1999 2000
R000 R000 R000
ASSETS
Non-current assets 185 837 143 658 170 289
Fixed assets 84 807 96 69
Development projects 26 126 - -
Goodwill 51 583 - -
Listed investments - 140 929 168 232
Unlisted investments 8 241 388 388
Deferred taxation asset 9 021 - -
Loans and long-term receivables 6 059 2 245 1 600
Current assets 765 309 795 508
Inventories 146 652 - -
Trade and other receivables 454 119 613 294
Advance payments 21 891 - -
Deposits and cash 142 647 182 214
Total Assets 951 146 144 453 170 797
EQUITY AND LIABILITIES
Capital and reserves 195 746 132 980 155 491
Minority interests 146 714 - -
Long-term liabilities 25 423 - -
Current liabilities 583 263 11 473 15 306
Interest bearing 4 056 - -
Trade and other payables 344 376 1 647 817
Advance receipts 156 694 - -
Provisions 45 608 - -
Receiver of Revenue 26 467 1 622 3 122
Members for dividend 6 062 1 957 4 257
Overdrafts and short-term
borrowings - 6 247 7 110
Total Equity and Liabilities 951 146 144 453 170 797
Net Asset Value per Ordinary
Share (cents) 310 381 445
Adjustment to reflect listed
investments at market value (cents) - 683 569
Reconciliation of capital
and reserves:
Opening balance 155 491 126 730 126 730
- shares issued 101 065 - -
- write off against investments
in associates (1 798) (7 354) (9 890)
- earnings 7 901 15 561 44 865
- other movements (438) - -
- dividends (66 475) (1 957) (6 214)
Closing balance 195 746 132 980 155 491
Restated to reflect a change in accounting policy
Reconciliation of earnings
Unaudited Unaudited Audited
Half-year ended Half-year ended Year ended
31 December 31 December 30 June
2000 1999 2000
R000 R000 R000
Headline earnings from
continuing investment 14 084 8 758 3 7 794
Share of Siltek Limited
(loss)/income (2 522) 7 140 11 355
Headline earnings 11 562 15 898 49 149
Unbundling costs (1 706) - -
Amortisation of goodwill (653) - -
Tax prior year under
provision (855) - (707)
Interest on under
provision for tax (447) - (1 165)
Share of associated
companies'exceptional
items - (337) (2 430)
Profit on disposal of
fixed assets - - 18
Earnings attributable
to ordinary shareholders 7 901 15 561 44 865
Attributable earnings per
ordinary share (cents) 15,2 44,5 128,4
Attributable headline
earnings per ordinary
share from continuing
investment (cents) 27,0 25,1 108,1
Commentary
In September 2000 Kunene Technology Limited's (KTL) entire shareholding in
Siltek Limited (Siltek) was distributed to shareholders by way of an unbundling
transaction, and further shares in Grintek Limited (Grintek) were acquired,
thereby constituting Grintek a subsidiary of KTL.
In order to reflect these changes the Group's operating results for the six
months ended 31 December 2000 exclude the results of Siltek from September 2000
and consolidate the results of Grintek for the full period. These results,
however, do not reflect a meaningful comparison of the performance of KTL's
only remaining investment, namely its 167,0 million shares (57,9 per cent) in
Grintek.
If Siltek's results are excluded from the period under review and from the
prior comparative period, KTL's headline earnings from the continuing
investment would increase by 60,1 per cent and headline earnings per share
would increase by 7,6 per cent.
Review of Grintek's operations
The telecommunications division continues to perform to expectations
maintaining its profitability under a more diverse product offering. New
partnerships were concluded with Juniper, Clarent and Cienna thereby
positioning the division to participate in the rollout of next generation
network solutions.
The industrial electronics division performed well above expectations expanding
under long-term supply contracts for telecommunications power systems. The
antenna and aviation businesses continue to perform to expectations.
The financial performance of the defence electronics businesses improved
significantly during the review period and this trend is expected to continue.
A record order book as well as an increased acceptance in export markets
provide medium to long-term stability.
Prospects
The exciting opportunities for Grintek are very encouraging particularly as
that company is well placed to gain from the introduction of new technologies
flowing from the deregulation of the telecommunications industry as well as
from the infrastructural rollout associated with the granting of the third
cellular licence. New business opportunities based on established strategic
partnerships in e-commerce, corporate systems and next generation technologies
will also fuel growth in future years.
Grintek is now in a position to enhance its organic growth through the
acquisition of synergistic businesses in the telecom-munications field.
Taxation
In our annual report for the year ended 30 June 2000 it was noted that the
company had a contingent liability to the extent that the Receiver of Revenue
had challenged the apportionment of expenses relating to dividend income which
had a material potential taxation exposure for the group. We are pleased to
report that this matter has been settled in a satisfactory manner with the
Receiver and all the company's tax assessments are now current and up to date.
Directors
It is with regret that we have to report the resignation of Mr K S Kunene, who
resigned as a director and as chairman of the board, effective 16 February 2001
We are pleased to announce that Mr N R (Zoli) Kunene, who is the chairman of
Grintek Limited, has been appointed chairman of KTL.
Strate
Kunene Technology Limited has been notified by the JSE Securities Exchange
South Africa that we have been selected to transfer the company's share capital
to the electronic STRATE "Share Transactions Totally Electronic" environment as
from 23 April 2001. This is the date from which investors' shares can be
converted into an electronic record in order to become eligible to settle in
the STRATE environment. Trading for electronic settlement begins on 14 May 2001
and from this date there is a legal requirement for investors to deposit their
shares with a CSDP or qualifying stockbroker prior to selling them in order for
the trade to settle in STRATE. This means that with effect from 14 May 2001
investors will not be able to sell their Kunene Technology Limited shares
unless they exist in electronic form in the STRATE environment. Electronic
settlement of trades in Kunene Technology Limited shares will take place for
the first time on 21 May 2001. Investors have previously been informed of these
important dates and are urged to convert their shares to the STRATE environment
in the interests of efficiency and security.
Any queries shareholders may have should be referred to STRATE on 0800 004 727.
Declaration of dividend No. 71
Notice is hereby given that interim dividend number 71 of 4,7 cents per share
has today been declared, payable to shareholders of the ordinary shares
registered in the books of the company at the close of business on Friday 30
March 2001. The transfer books and register of members will be closed on 31
March 2001 to 8 April 2001, both dates inclusive, to determine which members
qualify for the dividend. Dividends will be paid by electronic transfer to
members' bank accounts on or about 20 April 2001 or where this method of
payment is not mandated, dividend warrants will be posted.
For and on behalf of the board
N R Kunene
Chairman
14 March 2001
Registered office Transfer secretaries
4th Floor, South Block Mercantile Registrars Limited
Waterview Corner 7th Floor
Cnr. Ernest Oppenheimer Avenue 11 Diagonal Street
and Queen Street
Bruma 2026 Johannesburg 2001
Directorate
N R Kunene (Chairman) M F Kunene G J Royston J R McAlpine* P Moholi*
M Msimang* A N Saulez* *Non Executive
