| Wed 28 Mar 2001, 0:00 | | Advtech Limited - Group Results For Year Ended 31 |
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ADVTECH LIMITED
REGISTRATION NUMBER: 1990/001119/06
(FORMERLY ADVTECH EDUCATION HOLDINGS LIMITED)
GROUP RESULTS FOR YEAR ENDED 31 DECEMBER 2000
SEGMENTAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2000
TURNOVER EBITDA
SCHOOLS 27% SCHOOLS 20,6%
TERTIARY 21% TERTIARY 37,5%
PLACEMENT & RECRUITMENT 42% PLACEMENT & RECRUITMENT 41,6%
SKILLS & IT DEVELOPMENT 5% SKILLS & IT DEVELOPMENT -10,4%
OUTSOURCING SERVICES 5% OUTSOURCING SERVICES 10,7%
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2000
AUDITED AUDITED
31 DEC 31 DEC
2000 1999
(R'000) (R'000)
TURNOVER 554 235 206 534
OPERATING PROFIT BEFORE DEPRECIATION
AND AMORTISATION 66 640 34 232
DEPRECIATION AND AMORTISATION 18 378 10 623
OPERATING PROFIT 48 262 23 609
NET DIVIDEND INCOME 3 558 6 005
NET INTEREST (PAID)/RECEIVED (4 298) 8 767
EQUITY ACCOUNTED EARNINGS 937 980
PROFIT BEFORE EXCEPTIONAL ITEMS 48 459 39 361
EXCEPTIONAL ITEMS (18 575) (1 861)
PROFIT BEFORE TAXATION 29 884 37 500
TAXATION (10 922) (7 258)
PROFIT AFTER TAXATION 18 962 30 242
ATTRIBUTABLE TO OUTSIDE SHAREHOLDERS (1 505) -
ATTRIBUTABLE TO ORDINARY SHAREHOLDERS 17 457 30 242
NUMBER OF SHARES IN ISSUE ('000) 392 804 277 075
WEIGHTED AVERAGE NUMBER OF SHARES IN
ISSUE ('000) 392 804 274 234
EARNINGS PER SHARE (CENTS) 4,44 11,0
HEADLINE EARNINGS PER SHARE (CENTS) 9,17 11,6
FULLY DILUTED ORDINARY SHARES ('000) 394 204 275 230
FULLY DILUTED EARNINGS PER SHARE (CENTS) 4,43 11,0
FULLY DILUTED HEADLINE EARNINGS PER
SHARE (CENTS) 9,14 11,5
DETERMINATION OF HEADLINE EARNINGS:
ATTRIBUTABLE TO ORDINARY SHAREHOLDERS 17 457 30 242
ADJUSTED FOR EXCEPTIONAL ITEMS 18 575 1 473
DIVISIONAL RESTRUCTURING COSTS - 1 292
INVESTMENT WRITE OFF - 569
GOODWILL AMORTISATION 14 445 -
DISCONTINUED OPERATIONS 4 130 -
- EXCEPTIONAL ITEMS BEFORE TAXATION 18 575 1 861
- TAXATION - (388)
HEADLINE EARNINGS 36 032 31 715
BALANCE SHEET
AS AT 31 DECEMBER 2000
AUDITED AUDITED
31 DEC 31 DEC
2000 1999
(R'000) (R'000)
ASSETS
FIXED ASSETS 289 664 237 474
INTANGIBLE ASSETS 277 414 450
DEFERRED TAXATION ASSET 29 321 18 783
INVESTMENTS 1 742 21 088
CURRENT ASSETS 118 548 107 024
TOTAL ASSETS 716 689 384 819
EQUITY AND LIABILITIES
ORDINARY SHAREHOLDERS' INTEREST 464 962 281 425
OUTSIDE SHAREHOLDERS' INTEREST 2 167 -
LONG-TERM LIABILITIES 108 567 46 983
CREDITORS FOR ACQUISITION 29 445 10 631
DEFERRED TAXATION - 1 738
CURRENT LIABILITIES 111 548 44 042
TOTAL EQUITY AND LIABILITIES 716 689 384 819
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2000
AUDITED AUDITED
31 DEC 31 DEC
2000 1999
(R'000) (R'000)
CASH FLOWS FROM OPERATING ACTIVITIES 36 925 57 613
CASH FLOWS FROM INVESTING ACTIVITIES (483 561) (85 238)
CASH FLOWS FROM FINANCING ACTIVITIES 356 111 65 463
NET (DECREASE)/INCREASE IN CASH (90 525) 37 838
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 67 999 30 161
ACQUISITION CASH 10 497 -
CASH AT END OF YEAR (12 029) 67 999
SUPPLEMENTARY INFORMATION
CAPITAL EXPENDITURE - CURRENT YEAR 62 912 88 795
CAPITAL COMMITMENTS - CONTRACTED FOR 6 511 -
- APPROVED 16 020 48 383
OPERATING LEASE COMMITMENTS 96 655 88 668
COMMENTS
RESULTS AND OPERATIONAL REVIEW
THE RESULTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2000 REPRESENT THE FIRST
YEAR OF OPERATION FOR THE RESTRUCTURED ADVTECH GROUP. THE THREE LISTED
COMPANIES ADVTECH, ADVED AND ADVSOURCE WERE CONSOLIDATED INTO ADVED (ADVTECH
EDUCATION HOLDINGS LIMITED), IN THE FIRST HALF OF THE YEAR UNDER REVIEW.
ADVED WAS SUBSEQUENTLY RENAMED ADVTECH LIMITED. RESULTS REPORTED IN PREVIOUS
PERIODS FOR ADVED ARE THEREFORE NOT COMPARABLE.
THE 2000 FINANCIAL YEAR PRODUCED VARIED PERFORMANCES FROM OUR OPERATING
DIVISIONS. THE EDUCATION DIVISION PERFORMED WELL AND IN LINE WITH BUDGET. THE
GROWTH EXPERIENCED WITHIN OUR VARIOUS BRANDS SUPPORTS OUR STRATEGIC FOCUS
WITHIN THIS SIGNIFICANT GROWTH INDUSTRY. THE RESOURCING DIVISION, HOWEVER,
PERFORMED BELOW BUDGET IN 2000. CERTAIN BRANDS UNDER-PERFORMED IN THE
POST-WARRANTY PERIOD, EXACERBATED BY ADVERSE MARKET CONDITIONS, SPECIFICALLY IN
THE IT SECTOR.
HEADLINE EARNINGS FOR THE FINANCIAL YEAR ENDING DECEMBER 2000 WERE R36,0
MILLION WHICH TRANSLATED INTO 9.17 CENTS PER SHARE, THIS ON A TURNOVER OF R554
MILLION.
THE VARIANCE BETWEEN HEADLINE EARNINGS PER SHARE AND ATTRIBUTABLE EARNINGS PER
SHARE IS DUE TO A CHANGE IN ACCOUNTING POLICY WHICH HAS BEEN IMPLEMENTED IN
RESPECT OF BOTH DEFERRED TAX AND GOODWILL. IN ACCORDANCE WITH AC102 THE GROUP
HAS RAISED A DEFERRED TAX ASSET OF R29,4 MILLION AS REFLECTED IN THE BALANCE
SHEET AT 31 DECEMBER 2000 AND THE ADVED COMPARATIVES HAVE BEEN ACCORDINGLY
RESTATED. THIS HAS HAD THE EFFECT OF INCREASING THE EFFECTIVE TAX RATE IN
BOTH THESE AND THE COMPARATIVE RESULTS. GOODWILL HAS BEEN WRITTEN OFF IN THE
PREVIOUS YEAR TO SHARE PREMIUM ACCOUNT TO THE EXTENT POSSIBLE. REMAINING
GOODWILL IS BEING AMORTISED OVER 20 YEARS WITH EFFECT FROM JANUARY 2000. THE
IMPACT OF THIS IS REFLECTED AS AN EXCEPTIONAL ITEM OF R14.4 MILLION IN THE
INCOME STATEMENT FOR THE 12 MONTHS ENDED 31 DECEMBER 2000.
AS A RESULT OF THE GENERALLY DEPRESSED STOCK MARKET THE DECISION WAS MADE TO
UTILISE CASH RESOURCES TO SETTLE VENDORS AS OPPOSED TO PLACING SHARES IN THE
MARKET. IN ADDITION CAPITAL EXPENDITURE WAS INCURRED IN THE EDUCATION
DIVISION. THESE TWO FACTORS GAVE RISE TO INCREASED BORROWINGS AND A
CORRESPONDING INCREASE IN INTEREST PAID.
EDUCATION DIVISION
THE MAIN CONTRIBUTOR IN THE EDUCATION DIVISION WAS VARSITY COLLEGE WITH ALL ITS
SEVEN CAMPUSES PRODUCING GOOD RESULTS. CRAWFORD SCHOOLS PERFORMED WELL AND
ARE EXPECTED TO CONTINUE GROWTH IN THE COMING YEARS. A STRONG CONTRIBUTION
WERE MADE BY COLLEGE CAMPUS. ITS NEW CAMPUS IN HATFIELD, PRETORIA, ENJOYED
GOOD ENROLMENT AND PRODUCED PROFIT IN ITS FIRST YEAR OF OPERATION. THE BOND
UNIVERSITY MBA PROGRAMME EXPANDED ITS STUDENT NUMBERS WITH THE PROGRAMME NOW
OFFERED IN JOHANNESBURG, PRETORIA AND CAPE TOWN. JANUARY 2000 SAW THE
EXTREMELY SUCCESSFUL LAUNCH OF THE FIRST BOND UNDERGRADUATE PROGRAMME AT THE
SANDTON CAMPUS. FURTHER POSITIVE CONTRIBUTIONS WERE MADE BY MANY OF OUR OTHER
EDUCATION BRANDS INCLUDING GLOBAL SCHOOL OF BUSINESS, INDUSTRIES EDUCATION, THE
AWARD-WINNING VEGA SCHOOL OF BRAND ADVERTISING AND IMD.
ALL OUR EDUCATION BRANDS MET THE DEPARTMENT OF EDUCATION'S REGISTRATION
REQUIREMENTS. THESE REGISTRATIONS COUPLED WITH POSITIVE INTAKES FOR THE 2001
ACADEMIC YEAR SEE THE GROUP WELL PLACED TO MAKE CONTINUED CONTRIBUTIONS TO
SOUTH AFRICAN EDUCATION, RESULTING IN POSITIVE RETURNS FOR OUR SHAREHOLDERS.
RECRUITMENT DIVISION
DESPITE OUR RECRUITMENT DIVISION PERFORMING BELOW BUDGET, SUBSTANTIAL PROFITS
WERE GENERATED. BRENT PERSONNEL, CASSEL & CO AND THE 3 AUSTRALIAN OPERATIONS
OF CROWE & ASSOCIATES, QANTUM RECRUITMENT AND CHISHOLM ALL PERFORMED WELL
AGAINST BUDGET. THE SUBSTANTIAL PROFITS MADE BY THE COMMUNICATE GROUP THIS
YEAR WERE BOTH BELOW BUDGET AND ITS PREVIOUS YEAR'S PERFORMANCE. THE BRYAN
HATTINGH GROUP PERFORMED PARTICULARLY POORLY AND SAW A 1999 PROFIT TURN INTO A
LOSS FOR THE 2000 FINANCIAL YEAR. CORRECTIVE MEASURES HAVE BEEN TAKEN.
SKILLS AND IT DEVELOPMENT
CONTRIBUTIONS FROM THE OPERATIONS WITHIN THIS DIVISION WERE VARIED. CORPORATE
COLLEGE INTERNATIONAL CONTINUED TO EXPAND ITS OFFERINGS TO MEET THE DEMANDS
CREATED BY THE SKILLS DEVELOPMENT ACT. THE LABOURNET GROUP WHICH SPECIALISES
IN THE AREA OF LABOUR RELATIONS CONTINUED TO GROW IN LINE WITH EXPECTATIONS.
MAST PUBLICATIONS HAD A FURTHER SUCCESSFUL YEAR OF OPERATION AND MAST BOOKSHOP
CONTINUES TO SUPPLY ITS PRODUCTS TO THE EDUCATION DIVISION AND PERFORMED TO
BUDGET.
FOLLOWING INVESTIGATION OF RESULTS REPORTED FOR CERTAIN VENDORS, THE COMPANY
WILL ENTER INTO A CLAIM FOR RECOVERY OF PART OF THE PAYMENT MADE TO THESE
VENDORS. THESE CLAIMS ARE BEING QUANTIFIED AT THE TIME OF WRITING.
PROSPECTS
PROSPECTS FOR THE GROUP FOR THE 2001 FINANCIAL YEAR AND BEYOND REMAIN VERY
POSITIVE. THE EDUCATION DIVISION IN PARTICULAR WITH ITS COMPLETED
INFRASTRUCTURE IS POSITIONED FOR STRONG GROWTH. BOTH SCHOOLS AS WELL AS
TERTIARY BRANDS WITHIN EDUCATION HAVE MET THEIR INTAKE TARGETS FOR THE START OF
THE 2001 ACADEMIC YEAR. THE RESOURCING DIVISION HAS BEEN RESTRUCTURED,
INCLUDING CLOSURE OF SOME SMALLER DIVISIONS THAT WERE NOT CONTRIBUTING TO GROUP
PROFIT AND IMPLEMENTATION OF NEW MANAGEMENT STRUCTURES.
AT THE COMMENCEMENT OF THE 2001 FINANCIAL YEAR AN OFFER WAS RECEIVED FROM A
CONSORTIUM COMPRISING THE CALAJERO GROUP AND JONATHAN BEARE. THIS OFFER HAS
BEEN ACCEPTED BY ADVTECH'S BOARD OF DIRECTORS, SUBJECT TO CONCLUSION OF A
COMPREHENSIVE AGREEMENT, AS WELL AS SHAREHOLDER APPROVAL.
DIVIDEND
NOTICE IS HEREBY GIVEN THAT A DIVIDEND OF 3 CENTS PER SHARE HAS BEEN DECLARED
IN RESPECT OF THE YEAR ENDED 31 DECEMBER 2000, PAYABLE TO SHAREHOLDERS
REGISTERED IN THE BOOKS OF THE COMPANY ON 17 APRIL 2001.
DIVIDEND CHEQUES WILL BE POSTED OR ELECTRONIC DIVIDEND PAYMENTS MADE ON OR
ABOUT 30 APRIL 2001.
ON BEHALF OF THE BOARD
B D BUCKHAM, CHAIRMAN
JNP BOOYENS, GROUP FINANCIAL DIRECTOR
29 MARCH 2001
DIRECTORS:
BD BUCKHAM (CHAIRMAN); RD PLIT (MANAGING); JNP BOOYENS FINANCIAL); CN DUFF; M
WELIHOCKYJ; C BOMELA*; HJ BORKUM*; NO DAVIES*; HR LEVIN*.
*NON-EXECUTIVE
COMPANY SECRETARY: L VERSTER
TRANSFER SECRETARIES: MERCANTILE REGISTRARS, 11 DIAGONAL STREET, JOHANNESBURG
2001
