| Wed 28 Dec 2011, 10:30 | | CPN - Capricorn Investment Holdings Limited - Reviewed results for the year |
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CPN
CPN
CPN - Capricorn Investment Holdings Limited - Reviewed results for the year
ended 28 February 2011
CAPRICORN INVESTMENT HOLDINGS LIMITED
(formerly Cenmag Holdings Limited)
(Registration Number 1987/004821/06)
("Capricorn" or "the Company")
Share code: CPN ISIN: ZAE000149951
REVIEWED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2011
CONDENSED STATEMENTS OF FINANCIAL POSITION
Company Group
Reviewed Audited
28 February 2011 28 February 2010
ASSETS R`000 R`000
Non-current assets 15 7 633
Property, plant and equipment - 7 405
Deferred tax 15 228
Current assets 5 743 13 585
Total assets 5 758 21 218
EQUITY AND LIABILITIES
Capital and reserves 5 639 16 298
Non-Controlling Interest - 482
Interest free liabilities 120 4 438
Total equity and liabilities 5 758 21 218
Number of shares in issue (000`s) 59 886 96 000
Net assets value per share information *
Net asset value per share (cents) 9.42 17.00
Net tangible asset value per share (cents) 9.42 17.00
*The shares were sub-divided on the basis of 10:1 on 15 November 2010.
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
Group Company Group
Disclaimed Reviewed Audited
Six months Year ended Year ended
ended 31 28 February 28 February
August 2010 2011 2010
R`000 R`000 R`000
Gross Revenue 20 062 - 34 615
Cost of sales -13 678 - -23 944
Gross profit 6 384 - 10 671
Operating costs -4 773 -1 097 -8 268
Operating income 1 611 - -
Depreciation 232 - -
Operating profit/(loss) 1 379 -1 097 2 403
Finance income/(Finance costs) -132 45 826
Loss on sale of investments in - -1 081 -
subsidiary companies
Dividends received - 6 730 -
Profit before tax 1 511 4 597 3 229
Taxation -519 -31 -658
Profit after tax 992 4 567 2 571
Minority interest 14 - 30
Profit attributable to 978 4 567 2 541
shareholders
Headline earnings 978 5 648 2 541
Earnings per share information
Weighted average number of shares 96 000 85 611 96 000
in issue (000`s)*
Attributable earnings per share 1.02 5.33 2.65
(cents)
Headline earnings per share 1.02 6.60 2.65
(cents)
*The shares were sub-divided on the basis of 10:1 on 15 November 2010.
CONDENSED STATEMENTS OF CASH FLOWS
Group Company Group
Disclaimed Reviewed Audited
Six months Year ended Year ended
ended 31 28 February 28 February
August 2010 2011 2010
Cash flows from operating 103 3 963 2 440
activities
Cash flows from investing - (4 094) -758
activities
Cash effects of financing - 4 473 -2 309
activities
Net (decrease)/increase in cash 103 4 342 -627
and cash equivalents
Cash at beginning of period 8 266 1 430 8 893
Cash at the end of period 8 369 5 772 8 266
CONDENSED STATEMENT OF CHANGES IN EQUITY- COMPANY
Share Share Other non- Retained Total
capital premium distribut- income
able
reserves
R`000 R`000 R`000 R`000
Balance at 01 96 7 581 76 1 603 9 356
March 2009
Total - - - (4 114) (4 114)
comprehensive
income for the
year
Transfer non- - - (76) - (76)
investable
reserves
Balance at 01 96 7 581 - (2 511) 5 166
March 2010
Net profit for the - - 4 567 4 567
year
Repurchase of (34) (4 060) - - (4 094)
shares
Balance at 28 62 3 521 - 2 056 5 639
February 2011
SEGMENTAL REPORTING
Group Company Group
Disclaimed Reviewed Audited
Six months Year ended Year ended
ended 31 28 February 28 February
August 2010 2011 2010
Revenue
Manufacturing and Service 10 107 - 13 864
Wholesaling 9 955 - 20 751
Total 20 062 - 34 615
Profit from operating activities
Manufacturing and Service 1 192 - 1 744
Wholesaling 186
659
Total 1 378 - 2 403
RECONCILIATION OF HEADLINE
EARNINGS
Profit attributable to 978 4 567 2 541
shareholders
Adjustments for:
Loss on sale of investments in - 1 081 -
subsidiary companies
Headline (loss)/earnings 978 5 648 2 541
COMMENTARY
RESULTS
The board presents its reviewed results for the Company for the year ended 28
February 2011 in accordance with IAS 34: Interim Financial Reporting. The
Company was previously an investment holding company and its subsidiaries were
involved in the manufacture and servicing of electromagnets and motor rewinding
and the wholesaling of electrical and related equipment which businesses were
disposed of during 2010 and accordingly the Company was deemed a cash shell with
effect from 20 December 2010.
The Company no longer holds any subsidiaries and the Statement of Financial
Position presented has been reviewed and presented without qualification.
However, pursuant to the disposal of the various subsidiaries as described
below, the acquirer was not prepared to make the results available to the
Company in order for Group financial statements to be prepared. Accordingly the
auditors have disclaimed an opinion on the Group financial statements with
particular regard to Statement of Comprehensive Income and Statement of Changes
in Equity. This disclaimer will not impact on the results of the Company in
forthcoming year.
Accordingly, it is not considered meaningful to present group results for the
current year and only company results have been presented.
ACCOUNTING POLICIES
The financial results have been prepared in accordance with IAS 34 - Interim
Financial Reporting in with accounting policies that comply with International
Financial Reporting Standards ("IFRS") and JSE Listings Requirements of the JSE
Limited. The accounting policies and methods of measurement and recognition are
consistent with those applied in the previous financial period. The results have
been reviewed by the external auditors, Horwath Leveton Boner, whose unqualified
review report on the Company results and the disclaimer of conclusion on the
Group results is available for inspection at the registered office of the
Company.
BUSINESS OVERVIEW
Due to the business being a cash shell, no revenue was generated for the year
ended 28 February 2011. The Company did however report non-operational income in
the form of R45K finance income and R6.7 million in dividends received. In
addition there was a R1.1. million loss on sale of investment subsidiary
companies. This resulted in headline earnings per share of 6.60 cents per share
compared to 2.65 cents per share in the prior period. The Company repurchased
approximately 37.62% of the issued capital and subsequently subdivided the share
capital from a par value of R0.01 to R0.001, which therefore had a dilutive
effect on the earnings per share information. The details of the repurchase are
clarified below.
ISSUE AND REPURCHASE OF SHARES AND SUB-DIVISION OF SHARE CAPITAL
During the period under review, the Company underwent a specific repurchase of 1
009 293 Capricorn shares from Blaf Investments CC and 2 402 105 shares from
Victor Farkas, both deemed related parties of the Company in terms of the JSE
Listings Requirements. These repurchases were done at a repurchase price of 120
cents per share (prior to the sub-division of shares) for which shareholder
approval was received in general meeting on 15 November 2010. No new shares were
issued during the year under review.
In addition to requesting approval for the above-mentioned repurchase of shares,
the Company requested shareholders to approve a sub-division of the issued and
authorised share capital on a 10-1 basis as well as the cancellation of Cenmag`s
(former name of Capricorn) Share Incentive Trust 200 000 shares, which were also
approved on 15 November 2010 (2 000 000 shares post the sub-division).
At the end of the year, the issued share capital of the Company was 59 886 020
ordinary shares and the authorised share capital was 1 000 000 000.
SUBSEQUENT EVENTS AND FUTURE PROSPECTS
As announced on 15 December 2011, a sale and purchase agreement has been agreed
between the Company, Water Utilities Ltd and Watermark Global PLC ("Watermark")
regarding the acquisition of 100% of the shares and claims in Western Utilities
Corporation (Proprietary) Limited ("WUC"), a wholly-owned subsidiary of
Watermark, for a purchase consideration of GBP4.50 million.
WUC has procured a water treatment technology and commercialisation entity which
has developed a Long Term Self Sustainable Solution for Acid Mine Drainage
("AMD") in South Africa as well as developed proprietary technology in respect
of a coal briquetting project ("Briquetting Project"). The Briquetting Project
is currently at the development stage but is expected to be in production within
12 months. Off take agreements are already in place in order to secure the
income streams of the Briquetting Project. The agreement is held with the mine
where the coal fines are generated.
Following receipt of all required approvals for the AMD project, it is also
envisaged that there will be off take agreements with the mines for the
Industrial Quality water and that Potable water will be incorporated into a Bulk
Water Distributor network. It has been proposed that revenue will be generated
for services rendered through the implementation of the technology, for the
water distribution, and through the sale of by-products generated from the AMD
Project.
The terms and conditions of this acquisition and associated transactions are
detailed in a separate announcement.
AUDITORS REVIEW OPINION ON THE COMPANY RESULTS
The auditors have issued an unmodified and unqualified review opinion on the
Company results as presented.
Basis for Disclaimer of Conclusion on the Group Annual Financial Statements
Group financial statements for the year ended 28 February 2011 have not been
presented as the accounting records of the former subsidiaries were not made
available and consequently the external auditors were not engaged by the
directors to carry out a review.
Disclaimer of Conclusion on the Group Annual Financial Statements
Because of circumstances described in the Basis of Disclaimer of Opinion on the
Group Annual financial statements for the year ended 28 February 2011 the
external auditors are unable to make a conclusion as required for a review
engagement.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
The review report contains two reportable irregularities relating to the late
finalisation and posting of the annual financial statements, which will only be
rectified on signing of the annual financial statements and posting of the
annual report and calling of the annual general meeting.
DIRECTORS
During the period under review Messrs V Farkas, C Roux and J Farkas resigned
with effect from 29 November 2010. Messrs J Herbst, S Tredoux, B McQueen and K
Jarvis were appointed to the board with effect from 30 November 2010. Subsequent
to year end, Mr C Pettit was appointed to the board as an independent non-
executive director with effect from 19 July 2011.
COMPANY SECRETARY
After 29 November 2010, Arcay Client Support (Proprietary) Limited was appointed
the company secretary to Capricorn.
DIVIDENDS
No dividends were recommended or declared for the period.
SPECIAL RESOLUTIONS
At the general meeting of shareholders held on 15 November 2010, the following
special resolutions were presented and approved:
Specific repurchase of 3 411 398 shares in terms of Section 85 of the old
Companies Act;
Disposal of the Capricorn businesses as per Section 228 in terms of the old
Companies Act;
Change of name from Cenmag Holdings Limited to Capricorn Investment Holdings
Limited;
Increase in authorised share capital to 1 000 000 000 shares (post the sub-
division);
Sub-division of issued and authorised share capital on a 10-1 basis from 1 cent
to 0.1 cent shares; and
Cancellation of the Cenmag Share Incentive Trust shares.
POSTING OF ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING
The annual report is expected to be posted to shareholders during January 2012
and the details of the date and venue of the annual general meeting will be
posted to shareholders and announced on SENS in due course.
28 December 2011
Johannesburg
B McQueen Prepared by: J Herbst
Directors: B McQueen* (Chairman), J Herbst (Chief Executive Officer), S Tredoux
(Financial Director), K Jarvis*, E Greenblatt, C Pettit* (* Independent Non-
Executives)
Company Secretary: Arcay Client Support (Proprietary) Limited
Registered Office: Number 3, Anerley Road, Parktown, Johannesburg
Transfer Secretaries: Computershare Investor Services (Pty) Limited, 70 Marshall
Street, Marshalltown 2001, PO Box 61051, Marshalltown 2107
Auditors: Horwath Leveton Boner
Sponsor: Arcay Moela Sponsors (Pty) Limited
Date: 28/12/2011 10:30:01 Produced by the JSE SENS Department.
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