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CAP
CAP
CAP - Cape Empowerment Limited - Reviewed Provisional Results for the year
ended 31 December 2011
CAPE EMPOWERMENT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/001807/06)
(Share code CAP ISIN: ZAE000145066)
("CEL" or "the company")
REVIEWED PROVISIONAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2011
* TANGIBLE NAV PER SHARE +18% TO 60,0 CENTS
REVIEWED PROVISIONAL GROUP STATEMENT OF COMPREHENSIVE INCOME
for the year ending 31 December 2011
Reviewed Audited
31 December 31 December
R`000 Note 2011 2010
Revenue 1 213 728 155 670
Cost of sales (151 505) (115 016)
Gross profit 62 223 40 654
Other income 2 146 806
Operating expenses (74 655) (53 736)
Operating loss (10 286) (12 276)
Investment revenue 13 115 9 316
Profit/(loss) on sale of capital (10 771) 36
items
Impairments 2 (8 865) (6 571)
Fair value adjustments 3 60 985 25 329
Gain on bargain purchase - 45 701
Profit on deconsolidation of 4 2 876 4 058
subsidiary
Finance costs (2 432) (4 630)
Profit before taxation 44 622 60 963
Taxation (17) 7 445
TOTAL COMPREHENSIVE INCOME FOR THE 44 605 68 408
YEAR
Non-controlling interest 789 346
PROFIT ATTRIBUTABLE TO OWNERS OF THE 45 394 68 754
PARENT
Earnings per share (cents) 8,7 11,8
Headline earnings per share (cents) 8,1 3,3
Fully diluted earnings per share 8,2 11,2
(cents)
Fully diluted headline earnings per 7,7 3,1
share (cents)
REVIEWED PROVISIONAL GROUP STATEMENT OF FINANCIAL POSITION
as at 31 December 2011
Reviewed Audited
31 December 31 December
R`000 Note 2011 2010
Non-current assets 178 396 85 560
Investment property 3 640 3 420
Property, plant and equipment 7 673 11 142
Other financial assets 167 083 70 322
Deferred tax assets - 676
Current assets 257 143 326 040
Inventory 5 92 432 102 517
Other financial assets 89 599 152 635
Current tax receivable 669 704
Trade and other receivables 41 097 39 907
Cash and cash equivalents 33 346 30 277
TOTAL ASSETS 435 539 411 600
EQUITY AND LIABILITIES
Equity
Share capital and share premium 266 314 266 314
Treasury shares (40 197) (40 197)
Share-based payment reserve 2 447 1 350
Retained income 83 406 38 012
Non-controlling Interests 3 619 4 408
TOTAL EQUITY 315 589 269 887
LIABILITES
Non-current liabilities 5 188 97 033
Other financial liabilities 2 238 90 549
Instalment sale agreements 1 973 2 885
Deferred tax 977 3 599
Current liabilities 114 762 44 680
Other financial liabilities - current 6 71 744 -
portion
Instalment sale agreements - current 1 021 1 236
portion
Current tax payable 7 918 6 637
Shareholders for dividend 197 197
Trade and other payables 33 882 36 610
TOTAL LIABILITIES 119 950 141 713
TOTAL EQUITY AND LIABILITES 435 539 411 600
TNAV per share 60,0 51,0
NAV per share 60,0 51,0
REVIEWED PROVISIONAL GROUP STATEMENT OF CASH FLOWS
for the year ending 31 December 2011
Reviewed Audited
31 December 31 December
R`000 Note 2011 2010
Cash flow from operating activities (2 852) 7 046
Cash generated by operations (12 418) 3 430
Interest received 11 880 6 313
Dividends received 1 235 3 003
Interest paid (2 432) (4 630)
Taxation paid (1 117) (1 070)
Cash flow from investing activities 23 615 28 645
Purchase of property, plant and (3 236) (2 605)
equipment
Proceeds from sale of property, plant 1 061 587
and equipment
Business combinations - 22 502
Sale/(purchase) of financial assets 7 355 9 214
Deconsolidation of subsidiaries 18 435 (1 053)
Cash flow from financing activities (17 694) (33 624)
Proceeds on issue of shares - 114
Purchase of treasury shares - (17 505)
Proceeds/(repayment) of financial (16 567) (15 118)
liabilities
Proceeds/(repayment) of shareholder - (1 831)
loans
Proceeds/(repayment) of instalment (1 127) 716
sale obligations
Net increase in cash and cash 3 069 2 067
equivalents
Cash resources at the beginning of 30 277 28 210
the year
Cash resources at the end of the year 33 346 30 277
REVIEWED PROVISIONAL STATEMENT OF CHANGES IN EQUITY
for the year ending 31 December 2011
Total
Share Share share Treasury
R`000 capital premium capital shares
Balance 1 January 2010 332 280 073 280 405 (42 599)
Total comprehensive income for - - - -
the year
Issue of shares 29 85 114 -
Purchase of own/ treasury shares - - - (37)
Cancellation of shares (3 974) (29 681) (33 655) 9 620
Deemed cost of reverse 33 377 (13 927) 19 450 -
acquisition
Share based payments - - - -
Change in ownership interest - - - - -
control not lost
Business combinations - - - (7 181)
Balance at 31 December 2010 29 764 236 550 266 314 (40 197)
Total comprehensive income for - - - -
the year
Share based payments - - - -
Balance at 31 December 2011 29 764 236 550 266 314 (40 197)
REVIEWED PROVISIONAL STATEMENT OF CHANGES IN EQUITY (continued)
Total
Share- attributable Non-
based to owners control-
payment Retained of the ling
R`000 reserve income parent interests Total
Balance 1 January 2010 401 (30 207 523 5 052 212 575
684)
Total comprehensive - 68 754 68 754 (346) 68 408
income for the year
Issue of shares - - 114 - 114
Purchase of - - (37) - (37)
own/treasury shares
Cancellation of shares - - (24 035) - (24 035)
Deemed cost of reverse - - 19 450 - 19 450
acquisition
Share based payments 949 - 949 - 949
Change in ownership - (58) (58) (298) (356)
interest - control not
lost
Business combinations - - (7 181) - (7 181)
Balance at 31 December 1 350 38 012 265 479 4 408 269 887
2010
Total comprehensive - 45 394 45 394 (789) 44 605
income for the year
Share based payments 1 097 - 1 097 - 1 097
Balance at 31 December 2 447 83 406 311 970 3 619 315 589
2011
OPERATING SEGMENTS
for the year ending 31 December 2011
Gaming
Property Property and
R`000 Development Other Leisure
Total assets 85 025 221 977 34 234
Total liabilities (64 359) (784) (6 425)
Total net assets 20 666 221 193 27 809
Percentage of total net assets 7% 70% 9%
Revenue - - -
Profit/ (loss) before tax (7 911) 68 149 (9 544)
OPERATING SEGMENTS (continued)
for the year ending 31 December 2011
Security
and
R`000 Services Dynamic Other Total
Total assets 27 590 26 996 39 717 435 539
Total liabilities (14 250) (13 090) (21 042) (119 950)
Total net assets 13 340 13 906 18 675 315 589
Percentage of total net 4% 4% 6% 100%
assets
Revenue 102 458 111 270 - 213 728
Profit/ (loss) before tax 1 159 3 839 (11 070) 44 622
SUPPLEMENTARY INFORMATION
for the year ending 31 December 2011
Reviewed Audited
31 December 31 December
R`000 2011 2010
Number of shares in issue - consolidated (`000) 520 283 520 283
Fully diluted number of shares in issue - 550 283 550 283
consolidated (`000)
Weighted number of shares in issue (`000) 520 283 582 364
Fully diluted weighted number of shares in issue 550 283 612 364
(`000)
Reconciliation of headline earnings (R`000)
Profit for the year 45 394 68 754
Profit/ (loss) on the sale of shares and assets 49 (28)
Gain on bargain purchase - (45 701)
Impairments - 273
Gain on deconsolidation of subsidiary (2 876) (4 058)
Fair value adjustments on investment property (220) (200)
Tax effect - 63
Headline earnings for the year 42 347 19 103
NOTES TO THE RESULTS
1. Revenue
The increase in revenue is mainly attributable to the inclusion of
Dynamic for only seven months in 2010, but for the full year in 2011,
other than the Cables business that was included for 10 months in 2011.
The Cables business was disposed of with effect of 31 October 2011.
Revenue in the Security & Services segment increased by 9%.
2. Impairments R`000
Impairment of capitalised borrowing & other cost on 7 826
development land
Impairment of other financial assets 1 039
8 865
3. Fair value adjustments
Ascension Properties Limited 58 574
Grand Parade Investments Limited 1 608
Investment property 220
Other 583
60 985
4. Profit on deconsolidation of subsidiary
The profit of R2,8 million resulted from the sale of the Cables business
to Nexans Participations (France) on 31 October 2011.
5. Inventories
Inventories include development land at R85,0 million (2010: R85,7
million) of CEL`s 85% subsidiary, Lions Hill Development Company
(Proprietary) Limited.
6. Other financial liabilities - current portion
Current financial liabilities include R64,0 million of existing bond
finance in Lions Hill, that was classified as non-current in the previous
year. The facility is due for renewal on 30 September 2012.
Also included in current financial liabilities is the medium term loan
from Standard Bank of R7,7million rand that was settled in January 2012
on expiry of the facility.
COMMENTARY
1. INTRODUCTION
Cape Empowerment Limited is a black-owned and managed diversified
investment holding company with strong broad-based empowerment
credentials. We hold substantial investments in various sectors of the
economy including, Property, Security and Services and Information and
Communication Technologies.
2. BASIS OF PREPARATION
The reviewed provisional results for the year ended 31 December 2011 have
been prepared in accordance with IAS 34 - Interim Financial Reporting,
AC500 standards, the South African Companies Act 2008 and in compliance
with the Listings Requirements of the JSE Limited. The financial
information has been prepared based on the requirements of International
Financial Reporting Standards (IFRS). The accounting policies and methods
of computation used in the preparation of these results are consistent
with those applied in the preparation of the Group`s annual financial
statements for the year ending 31 December 2010.
The group`s independent auditor, Grant Thornton, have reviewed the
results contained in this provisional report and their unmodified review
report is available for inspection at the company`s registered office.
3. OVERVIEW
3.1 Results
The Group ended the year with attributable profit of R45,4 million
or 8.7 cents per share (2010: R68,8 million and 11.8 cents per
share).
Net asset value and tangible net asset value per share improved to
60,0 cents per share form 51,0 cents per share in 2010.
These results reflect the implementation of the groups investment
focus, as previously communicated with shareholders, as can be seen
from the impact of the disposal of the bulk of our Grand Parade
Investments Limited ("GPI") shares and the increased value resulting
from our investment in Ascension Properties Limited.
3.2 Subsequent events
As contained in a circular to shareholders dated 5 March 2012, the
Group has disposed of it remaining shares in GPI for a total
consideration of R25,1 million. This disposal is after the group
received a special dividend form GPI of 60 cents per share in
January 2012.
3.3 Investment strategy and prospects
The disposals above were implemented as part of the Group`s
investment focus on the property sector. The Group will continue to
pursue investment opportunities in this sector that satisfy its
criteria of undervalued assets with good cash flow generation.
For and on behalf of the board
AC Nissen SL Rai
Chairman Chief Executive Officer
Cape Town
29 March 2012
Board of Directors:
AC Nissen** (Chairman), TD Rai (Deputy Chairman), SL Rai (Chief Executive
Officer), J de Villiers (Managing Director), HB Dednam (Financial Director),
PB Hesseling*, E Tshabalala**, H Takolia**
* Non-Executive ** Independent Non-Executive
Company secretary: HB Dednam
Registered office:
2nd Floor, Sunclare Building, 21 Dreyer Street, Claremont 7700
Sponsor:
SASFIN CAPITAL, a division of Sasfin Bank Limited
Date: 29/03/2012 17:00:01 Produced by the JSE SENS Department.
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