| Fri 30 Mar 2001, 0:00 | | Acuity Group - Audited Results |
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ACUITY GROUP HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/011074/06)
("Acuity")
AUDITED CONSOLIDATED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2000
CONSOLIDATED INCOME STATEMENT
(Audited) (Audited)
12 months 15 months
Group Group
2000 1999
R'000 R'000
Revenue 33 966 30 464
Less: Operating costs 33 496 24 679
Operating income 470 5 785
Less: Amortisation of intangible assets 1 457 680
- Trademarks 745 955
- Goodwill 712 (275)
Net (loss)/income before interest (987) 5 105
Net interest received 1 161 1 838
Net income before
exceptional items 174 6 943
Less: Exceptional items 310 -
Net (loss)/income before taxation (136) 6 943
Tax (155) (2 625)
Net (loss)/income after taxation (291) 4 318
Equity accounted income/(loss)
from associate 20 (90)
Net (loss)/income for period (271) 4 228
Reconciliation to headline earnings:
(Loss)/Earnings (271) 4 228
Plus: Exceptional items 310 -
- Provision against loan arising
on termination of acquisition 100 -
- Costs related to terminated
negotiations 210 -
Plus: Amortisation of goodwill 712 (275)
Plus: Discontinuance loss - 1 781
Headline earnings 751 5 734
Weighted average shares in issue ('000) 102 260 93 286
Fully diluted shares in issue ('000) 102 260 102 496
(Loss)/Earnings per share (cents) (0,3) 4,5
Headline earnings per share (cents) 0,7 6,1*
Fully diluted headline earnings
per share (cents) 0,7 5,6*
*Adjusted for amortisation of goodwill.
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
(Audited) (Audited)
12 Months 15 Months
Group Group
2000 1999
R'000 R'000
Cash effects of operating activities 5,479 3,182
Cash effects of investing activities (8,626) (12,644)
Cash effects of financing activities (767) 20,386
Net cash flow for year (3,914) 10,924
Cash and cash equivalents at
beginning of year 10,924 -
Cash and cash equivalents at
end of year 7,010 10,924
CONSOLIDATED BALANCE SHEET
(Audited) (Audited)
Group Group
2000 1999
R'000 R'000
ASSETS
Non-current assets
Intangible assets 19 402 11 018
Furniture, fittings and equipment 1 408 968
Investment in associate 503 246
21 313 12 232
Current assets
Bank and call deposits 7 010 10 924
Receivables and pre-payments 23 542 14 531
30 552 25 455
Total assets 51 865 37 687
EQUITY AND LIABILITIES
Capital and reserves
Share capital 1 137 933
Share premium 5 047 481
Non-distributable reserves 14 517 7 743
Loans due to vendors - 11 176
Accumulated profits 3 957 4 228
Ordinary shareholders' interest 24 658 24 561
Non-current liabilities
Interest bearing borrowings 79 53
Deferred taxation (187) 436
+ (108) 489
Non-interest bearing debt
Loans due to vendors 5 903 -
5 903 -
Current liabilities
Trade and other payables 21 412 12 637
Total equity and liabilities 51 865 37 687
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Audited) (Audited)
12 Months 15 Months
Group Group
2000 1999
R '000 R '000
Opening balance 24 561 -
Shares issued - 68 758
Share issue costs (230) (4 037)
Shares repurchased (14) -
Goodwill written off - (63 307)
Shares due to vendors - 11 176
Non-distributable reserve arising on
calculation of shares to be issued to
vendors 612 7 743
Net (loss)/profit
for the financial year (271) 4 228
Closing balance 24 658 24 561
Review of operations
At the end of 1999 Acuity management took the critical decision to completely
restructure and refocus the group. A new operating structure was put in place,
new managers were recruited and investment went into the creation of more
viable consulting products and services.
Consequently, the year 2000 was one of investment, the returns from which
should be evident from 2001 onwards.
Summary of financial performance
While revenues are up on the previous period, operating income is substantially
down. Included on the balance sheet is an accounts receivable amount of R23,542
million of which R20,694 million has been collected since year-end. The
accounting policies of the group as stated in the 1999 annual report were
applied consistently.
Divisional performance
It is expected that the operating income picture will change dramatically from
2001 onwards. Acuity Strategy, launched in 2000, has created a powerful
strategy development and implementation process. This new division made a
modest contribution to profit in 2000, and is forecasted to be a significant
contributor in 2001. The Acuity Value Management division has also begun to
generate profit. It's Experiential Marketing unit made a modest contribution in
2000 and will most likely be the group's most profitable business unit in 2001.
The division's Customer Behaviour Management business unit, also launched in
2000, is expected to be the second most profitable business unit in 2001 as a
result of new client acquisitions late last year. The group's 40% stake in
Jagly Intermedia has also begun to pay off, with a modest profit in 2000 after
a loss, due to start-up costs, in 1999. Significant growth is forecasted by
Jagly for this year.
The third division, Acuity Insight, will take somewhat longer to realise a
return on our investment, but those returns are expected to be substantial. The
investment in Acuity Insight is in high technology decision support tools.
These are in four areas: The first is business war gaming. Acuity's first game,
Agile, was successfully brought to market the latter half of 2000 and this
business unit is budgeted to be profitable in 2001. The second area is a
Strategic Alignment and Management (SAM) tool incorporating balance scorecard
principles. The prototype has been positively received and a commercial version
will be launched in mid 2001. Significantly, this tool will greatly enhance the
consulting capabilities of the Acuity Strategy division. Other developments
include processes and systems in the areas of knowledge management and fraud
detection, the latter being a joint development initiative with Standard Bank.
Contingent liabilities
1. A subsidiary of Acuity is involved in a legal dispute with Deloitte & Touche
in respect of professional services rendered by them. The claim amounts to
approximately R500 000 plus interest and legal cost. An amount of R90 000 has
been tendered in respect of settlement. The directors dispute liability for the
balance of the amount.
2. Acuity acquired the remaining 49% of SBBW Holdings (Pty) Ltd with effect
from 1 June 2000. The purchase price is contingent on profit made during the
period 1 January 2001 to 31 December 2001.
Prospects
In summary, fiscal operating performance in 2000 was disappointing, but perhaps
a necessary price to pay. We are positive about the group's prospects for 2001
and extremely bullish about the future of the Acuity Group in fulfiling the
promise reflected in being selected as one of "South Africa's Most Promising
Companies, 2000/2001".
Dividend
No dividend has been declared and none is recommended.
E R Schwartz F P Rossouw
Woodmead
30 March 2001
Registered address
Cedarwood Office Park, Mount Lebanon Road, Woodmead, Sandton, 2128
Tel: (011) 804-5100
Fax: (011) 804-5023
Transfer secretaries
Mercantile Registrars Limited, 11 Diagonal Street, Johannesburg, 2001
Directors
J Bolt, R M R De Bastos2*, E M Mafuna*, F P Rossouw, H Rostowsky*, E R
Schwartz1, H M Serebro, J E H T van Zyl.
1American, 2Portuguese, *Non-executive
