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FINANCIAL INSOURCING SPECIALISTS LIMITED
(Registration number 1998/003821/06)
(the Company)
Headline earnings per share ahead of forecast: 28 cents
Dividend declared per share: 20 cents
AUDITED GROUP RESULTS FOR THE YEAR ENDED 31st DECEMBER 2000
Abridged Income Statement for the year ended 31 December 2000
12 months ended 10 months ended
Dec' 2000 Dec' 1999
R' 000 R'000
Gross revenue 50 353 1 370
Operating profit/(loss) 20 601 (27 659)
Net finance income 3 077 203
Profit/(loss) before taxation 23 678 (27 456)
Taxation (4 468) 5 848
Headline earnings 19 210 (21 608)
Number of shares (000's) 72 500 24 100
Weighted average number of shares 68 605 13 210
Headline earnings/(loss) per share (cents) 28.00 (163.57)
Earnings reconciliation
Headline earnings 19 210 (21 608)
Loss on valuation of fixed assets (55)
Assets written off (287)
Amortisation of intangibles (7 401) -
Profit/(loss) attributable to shareholders 11 809 (21 950)
Attributable profit/(loss) per share (cents) 17.21 (166.16)
Abridged Balance Sheets as at 31 December 2000
Dec' 2000 Dec' 1999
R' 000 R'000
ASSETS
Fixed assets 5 453 472
Intangible assets 80 770 -
Deferred tax 18 881 14 568
Cash and investments 37 784 18 150
Accounts receivable 5 254 277
Total Assets 148 142 33 467
LIABILITIES
Shareholders equity 93 319 32 920
Long term interest free loans 41 343 -
Accounts payable and provisions 13 480 547
Total Liabilities 148 142 33 467
Net asset value per share (cents) 128.7 136.6
Abridged Cash Flow Statement for the year ended 31 December 2000
12 months ended 10 months ended
Dec' 2000 Dec' 1999
R' 000 R'000
Net cash from operating activities 20 053 (3 614)
Net cash flows from investing activities (56 330) 3 404
Net cash flows from financing activities 53 482 11 921
Net increase in cash and cash equivalents 17 205 11 711
Represented as follows:
Cash and cash equivalents at beginning
of the year 12 078 367
Cash and cash equivalents at end
of the year 29 283 12 078
Net increase in cash and cash equivalents 17 205 11 711
Commentary on results
The excellent results were achieved during a period in which management time
was significantly devoted to repositioning the group and complying with the
regulatory requirements necessary to move the company's listing to the Main
Board. The restructuring is now complete. The Board has been strengthened and
active compliance with the latest corporate governance standards has been fully
endorsed throughout all levels within the group. The earnings contribution from
the money broking services was 55% with the balance being generated from
insourcing services and finance income. The municipal elections created a
period of uncertainty within a large segment of our target market and
consequently restricted our ability to grow earnings even faster. We have fully
complied with GAAP while remaining conservative in our income recognition
policy. We believe that conservative income recognition policies are
particularly important in a fast growing business.
Prospects
The money broking operation has had an excellent start to the current year and
is expected to continue to grow its earnings however not at the rate currently
being achieved by our other services. The product range has been extended to
include the provision of working capital management services and treasury
outsourcing services. This allows us to increase our pool of potential clients
to virtually 100% of public sector entities. While we do not believe that there
will be any real demand for the outsourcing service we are excited about the
discussions we are having with potential insourcing and working capital
management clients. Further announcements regarding new business will be made
shortly when we release our first quarter results in April.
Dividend
A dividend of 20 cents per share has been declared by the Board and is payable
to all shareholders recorded in the register of the company at the close of
business on 30th March 2001.
The nature of the group's earnings is such that there is expected to be a high
correlation between reported earnings and cash earnings. The policy therefore
will be to maintain a dividend payout of at least 50%. In this year however it
is deemed necessary to maintain the cash balances at the current level to
provide credit quality when disclosed to potential new clients as part of their
due diligence process. The dividend for this year will consequently be settled
by scrip only however in future years it is expected that any dividend payout
will include a cash alternative.
By order of the Board
Directors: J.E. Newbury (Non-Executive Chairman), D.C. King (Chief Executive),
A.G. Fletcher, I.G. Morris, M.M. Ngoasheng, F.R. Proudfoot
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