| Thu 5 Apr 2001, 0:00 | | Escher Group Limited - Results Announcement |
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Escher Group Limited
* Net revenue increases by 124%
* Net attributable profit increases by 68%
* Headline EPS increases by 53%
* Assets under management reach R17,8 billion*
Escher Group exceeds expectations
Audited preliminary results for the year ended 28 February 2001
Highlights
Audited Pro forma
Notes 2001 2000 %
Headline earnings per
share (cents) 4 7,5 4,9 53
Earnings per share (cents) 7,0 4,9 43
Dividend per share (cents) 3,0 2,1 43
Net asset value per share (cents) 25,6 10,3 149
Net tangible asset value
per share (cents) 21,3 10,3 107
Assets under management (Rbn) 17,8 11,3 58
Net revenue (R'000) 102 231 45 598 124
Net attributable profit (R'000) 20 164 12 018 68
Summarised group income statement
for the year ended 28 February Audited Pro forma
2001 2000
Notes R'000 R'000
Net revenue 2 102 231 45 598
Operating expenditure (81 571) (31 460)
Operating profit before
net finance income 20 660 14 138
Net finance income 8 869 3 999
Share of associate's loss (149) -
Net profit before tax 29 380 18 137
Taxation (9 813) (6 119)
Net profit after tax 19 567 12 018
Minority interest 597 -
Earnings attributable to
ordinary shareholders 20 164 12 018
Note 1
The pro forma income statement and balance sheet at 29 February 2000 is a
combination of the financial statements of PSG Escher Investments (Pty) Limited
and PSG Escher Life Limited as at 29February 2000, as set out in the
pre-listing statement, and has been provided to make meaningful comparison.
2001 2000
Note 2 R'000 R'000
Revenue 5 945 834 10 777 690
Transfer to provision for
linked liabilities (5 843 603) (10 732 092)
Net revenue 102 231 45 598
*Note 3
Assets held on balance sheet 16 576 10 732
Assets held off balance sheet 1 278 585
17 854 11 317
Note 4
Headline earnings per share
Net profit attributable
to shareholders 20 164 12 018
Abnormal item 421 -
Goodwill amortised 926 -
Headline earnings 21 511 12 018
Weighted average number of
ordinary shares in issue ('000) 288 534 242 965
Summarised group balance sheet
at 28 February Audited Pro forma
2001 2000
R'000 R'000
ASSETS
Fixed assets 4 386 3 631
Assets held to cover
linked liabilities 16 575 752 10 732 149
Goodwill 13 032 -
Investment in associate 51 -
Non-current receivables 1 160 -
Intergroup investments 4 671 14 733
Current assets 82 719 26 479
Total assets 16 681 771 10 776 992
EQUITY AND LIABILITIES
Ordinary shareholders' funds 76 793 26 519
Minority interest 707 -
Provision for linked liabilities 16 575 752 10 732 149
Current liabilities 28 519 18 324
Total shareholders' funds
and liabilities 16 681 771 10 776 992
Consolidated statement of changes in equity
for the year ended 28 February 2001
Ordinary Revaluation
share Share and other Retained
capital premium reserves earnings Total
R'000 R'000 R'000 R'000 R'000
Balance at 1 March 2000 1 - - - 1
Issue of share capital 2 999 65 368 - - 68 367
Share issue expenses - (2 869) - - (2 869)
Currency translation
difference - - 217 - 217
Net profit - - - 20 164 20 164
Ordinary dividends - - - (9 087) (9 087)
Balance at 28
February 2001 3 000 62 499 217 11 077 76 793
Summarised group cash flow statement
for the year ended 28 February 2001
R'000
Net cash inflows of linked policyholder premiums 5 843 603
Purchase of investments for linked policyholders (5 843 603)
Net cash inflow from operating activities 24 125
Net cash outflow from shareholders' investing
activities (7 630)
Net cash inflow from financing activities 38 980
Net increase in cash and cash equivalents 55 475
Cash and cash equivalents at end of year 55 475
Highlights
At the end of February 2000, the Escher Group could look back on a year of
spectacular growth in assets under management - from a mere R200 million to
R11,3 billion. One year later and we have built further on this foundation,
increasing after-tax profits by 68% and delivering on our pre-listing promises.
Headline earnings have increased to 7,5cents per share, which is slightly
better than profit forecasts. Additionally, assets under management within
Escher have increased by 58% to R17,8 billion, exceeding the pre-listing
expectation of R16 billion.
Review of operations
Escher Investments (Pty) Limited
Escher Investments has firmly established itself as one of the leading,
independent multi-managers in the South African market, and despite difficult
financial markets, assets under management have steadily increased. Escher
Investments has attracted over 50 new corporate clients during the financial
year under review. The development and implementation of a state-of-the-art
administration system that enables all investment transactions to be received,
processed and monitored electronically on a "straight through basis" has
undoubtedly contributed to this success.
PSG Escher Life Limited
PSG Escher Life was established in 1999 with the primary objective of pooling
the assets of Escher Investments' clients. PSG Escher Life has grown in stature
and importance, successfully developing and marketing local and international
products directly, as well as through white labelling for other organisations.
PSG Escher Life currently has R2,3 billion invested in its range of products
for retail and institutional clients. The life assurer plans to continue to
develop products independently and in conjunction with other organisations.
Opportunities abound for a life office that has diverse skills within its small
focused team and the flexibility to react quickly to market changes.
Escher Structured Products (Pty)Limited
Escher Structured Products was acquired in July 2000 as a wholly owned
subsidiary of the Escher Group. This acquisition significantly enhanced the
Group's product development capabilities, particularly in the area of providing
guaranteed products to retirement funds and their members. The eight-month
period since acquisition has seen a significant number of structures
implemented.
EscherWise (Pty)Limited
EscherWise provides retirement solutions for the small to medium size
enterprise and for individuals seeking alternative investments solutions. The
company was acquired in July 2000 with the objective of offering individuals
access to the Escher Investments range of portfolios. EscherWise has expanded
its client base significantly, with new business assets in respect of
individual and umbrella client's funds increasing by 55%.
Escher UK Asset Management Limited
Escher UK, established in July 2000 as a multi-manager in the UK, currently has
R704 million under management. The company has firmly established itself in the
conservative UK market, with their current product line perfectly positioning
them to be a preferred business supplier to the UK's "stakeholder" market.
Under new legislation, everybody in the UK should have access to a portable
individual pension plan which has a legislated maximum total cost per annum.
Future prospects
During the year under review, the multi-manager industry has grown
substantially, attracting significant asset volumes. The multi-manager market
segment is currently at R65 billion, while the whole retirement fund market is
in excess of R600billion. Going forward we believe multi-managers will continue
to make significant inroads into the retirement fund market by implementing
product and approach variations that consistently add value. In particular
Escher Group is poised to capitalise on the foundation built over the last few
years, and maximise opportunities presented.
Declaration of dividend
The directors of Escher Group have declared a dividend of 3 cents per share for
the year ended 28February 2001. The dividend will be payable to shareholders
registered as such at the close of business on Friday, 20 April 2001. The
dividend will be payable on or about 30 April 2001.
Cautionary
Further to the cautionary announcement published on 27 February 2001,
negotiations with m Cubed Capital Holdings Limited are continuing and
shareholders are advised to continue to exercise caution when dealing in their
shares until a further announcement is made.
For and on behalf of the board of directors
L de Wit P J Croeser
Chairman Chief Executive Officer
4 April 2001
Directors: L de Wit (Chairman), P J Croeser (Chief Executive Officer), C K
Foord (Financial Director),
TM Ledger, G C le Roux, J F Mouton, J M Pieterse, A B la Grange, CAOtto
(Alternate)
Company secretary: R Rossouw
www.escher.co.za
Transfer secretaries: Computershare Services Limited, Edura House, 41 Fox
Street, Johannesburg, 2001
Registered office: Escher House, 9 Gordon Hill Road, Parktown, 2041. Telephone
(011) 645-6700
Registration number 1998/014568/06
