| Fri 6 Apr 2001, 0:00 | | Explorer - Annual Financial Statements |
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Explorer Corporation Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/010950/07)
("Explorer" or "the Company")
Audited Group Financial results for the 12 months ended 31 December 2000
and further cautionary announcement
Explorer/http://www.explorercorp.com
Explorer Direct: 0860 300 600
Audited Group Income Statement 2000 1999
For the period ended 31 December 2000 R R
Revenue 11,796,619 8,589,589
Cost of sales (1,400,127) (210,076)
Gross Profit 10,396,492 8,379,513
Other operating expenses (34,089,496) (9,005,018)
Loss before finance costs (23,693,004) (625,505)
Finance costs (6,217,767) (123,512)
Loss before taxation (29,910,771) (749,017)
Taxation - -
Loss after taxation (29,910,771) (749,017)
Net loss from ordinary activities (29,910,771) (749,017)
Net loss for the period (29,910,771)
Loss per share (cents) (37,23) (1,05)
Headline loss per share (cents) (31,72) (0,71)
Audited Group Balance sheet 2000 1999
As at 31 December 2000 R R
Assets
Non-current Assets
Property, plant and equipment 1,275,849 6,020,261
Loans 2,295,400 3,396,932
Intangibles 6,861,580 9,010,377
Development expenditure 8,039,547 8,578,612
18,472,376 27,006,182
Current Assets
Trade and other receivables 1,809,038 3,408,638
Cash and cash equivalents 1,174,729 21,941,880
2,983,767 25,350,518
Total Assets 21,456,143 52,356,700
Equity and liabilities
Capital and reserves
Share capital and premium 47,222,391 46,821,553
Accumulated loss (32,535,759) (2,624,988)
Ordinary shareholders' interest 14,689,632 44,196,565
Non-current liabilities
Long-term liabilities 164,713 1,740,633
164,713 1,740,633
Current Liabilities
Short-term portion of
long-term liabilities 85,937 807,766
Trade and other payables 6,518,861 5,498,896
Provisions - 112,840
6,604,798 6,419,502
Total Equity and Liabilities 21,456,143 52,356,700
Audited Group Cash Flow Statement 2000 1999
For the period ended 31 December 2000 R R
Cash Flow from Operating activities (17,598,456) 1 576,306
Cash Flow from Investing activities (1,271,784) (26,281,696)
Cash Flow from Financing activities (1,896,911) 38,303,657
Net movement in cash and
cash equivalents for the period (20,767,151) 13,598,266
Cash and cash equivalents at
beginning of period 21,941,880 8,343,614
Cash and cash equivalents at
end of period 1,174,729 21,941,880
Supplementary information
Weighted average number of
ordinary shares in issue 80,350,684 71,232,877
Total number of ordinary shares
in issue 88,000,000 80,000,000
Net asset value
per ordinary share (cents) 16,68 55,25
Net tangible asset value
per share (cents) (0,24) 33,26
Reconciliation of headline loss
Headline EPS has been calculated
in terms of AC306
Attributable earnings for the period (29,910,771) (749,017)
Adjusted for:
* Write-off of Star investment 1,642,000 -
* Loss on disposal of fixed assets 812,741 3,824
* Goodwill amortisation 240,000 240,000
* Write-down of leasehold improvements 1,729,475 -
Headline loss (25,486,555) (505,193)
Capital expenditure
- Expended during the period 3,636,659 6,001,138
- Authorised or committed at year end - 650,000
Comments
The directors of Explorer Corporation Holdings Limited hereby present the
results of the Group in respect of the year ended 31 December 2000.
Background
Explorer Corporation Holdings Limited ("Explorer") listed on the Johannesburg
Securities Exchange ("JSE") during 1999. Explorer is the holding company of the
Explorer Group of Companies. The company successfully launched South Africa's
first independent, Visa branded credit card during 2000.
Business Review
The year 2000 proved to be a very challenging year for Explorer. The Group was
subjected to material changes in its trading environment, mainly as a result of
funding restrictions consequent to the launch of the credit card.
Explorer's interim results announcement indicated that failure to secure
additional funding for the credit card operation would have a material impact
on the Group's cash resources, as well as on the anticipated growth in income
and card volumes.
During November 2000
The directors requested the JSE to suspend the Company's shares until a
strategic investor was found. Loita Capital Partners (Pty) Ltd ("Loita"), a
Mauritius based company, entered into an investment agreement with Explorer,
also assuming management control.
The investment saw Loita acquiring 34,9% of Explorer through a significant
working capital injection and with a commitment to the continued existence of
Explorer. The Loita investment was perceived as a rescue operation by the JSE
who lifted the suspension of the company's shares on 15 December 2000.
The Board of Directors of Explorer was restructured in February 2001 in the
following manner:
* Aaron Stanger stepped down as Chairman and Chief Executive Officer.
* Justin Chinyanta was appointed as Chairman.
* Colin Clarke and Yousef Bazian, who are Directors of Loita Capital Partners
(Pty) Ltd ("Loita), were appointed joint Chief Executive Officers.
The new management team has immediately commenced with the restructuring of the
Group. This includes:
* Evaluating the assets and liabilities of Explorer and ensuring
recoverability and completeness.
* Retrenchment of staff.
* Reduction of expenditure levels.
* Voluntary liquidation of Explorer Group (Pty) Ltd.
* Moving the core infrastructure and staff to the offices of Loita's South
African operations.
Background on Loita:
Loita, through its affiliate companies, specialises in solutions for financial
institutions.
The group was founded in 1992 by a team of international bankers. Loita has
since grown into a unique pan-African group with a dedicated team of
professionals from around the world. The group originates and completes
transactions across Africa from a network of company and affiliated locations
and relies on this network to share and apply best practices, which take into
account the reality and demands of our African markets.
Loita specialises in providing project and trade finance expertise as well as
corporate finance initiatives and solutions to corporate Africa as well as to
central and commercial banks within the African continent. In addition, through
its affiliate companies, Loita specialises in solutions for financial
institutions and corporations in Africa, having a presence in Zimbabwe, Uganda,
Tunisia, Angola, Rwanda, Kenya and Malawi, and has implemented banking software
for a large number of financial institutions on the continent.
Financial Review
The Group reported a consolidated loss of R29,910,771 for the year ended 31
December 2000. This is due in part to the non-achievement of the plans
established at the start of the year and the subsequent effects of the rescue
and restructuring. The following material adjustments were accounted for:
* Trademarks and Goodwill were being amortised, in line with changes in South
African statements of Generally Accepted Accounting Practices (GAAP).
Comparatives have been adjusted in accordance with the above resulting in a
R818,708 expense in both financial years.
* Fixed Assets of R4,675,750 which included mainly leasehold improvements to
the Benmore premises were written down as that building is no longer being
occupied by the Group.
* Sundry debtors and Goodwill of R2,536,732 arising out of the transaction
with the Star Newspaper during the previous year was written off.
* The shares in the Share Incentive Trust were written down to the Net
Realisable Value of the shares of the Company amounting to R4,672,063.
* Development expenditure capitalised during the first six months of the year,
and now written-down amounted to R4,168,668.
Prospects
Loita has also made available, as part of the investment agreement on loan, R2m
working capital, to ensure that Explorer is in a position to fund planned
business growth.
Loita has recognised the intellectual capital and know-how residing within the
Explorer brand franchise and the opportunities to leverage such potential into
the African market. Such attributes coupled with Loita's expertise, knowledge
and best business practice within African countries provides an exciting
opportunity for both Explorer and Loita to pursue rapid market penetration
within the region.
The new directors of Explorer plan to continue to utilise the brand equity
created by the investment in the Explorer name as well as the various
trademarks.
The directors are currently involved in negotiations with new banking partners
both within South Africa and in the African region.
The directors are optimistic that negotiations will be concluded during the
first part of the year to allow for the continued trading by the group. The
company continues to trade under cautionary while this matter is finalised.
For further information refer to Loita's website at http://www.Loita.com
Dividends
No dividends will be paid in the foreseeable future, as cash generated will be
retained and utilised to grow and expand the business of the Group.
South African Statements of GAAP and Companies Act Requirements
The financial statements were drawn up in compliance with South African
Statements of Generally Accepted Accounting Practices and the company has
complied with requirements of the Companies act regarding the Annual Report.
JSE Requirements
The Directors of the Company ensured compliance with the requirements of the
JSE during the year under review.
Further cautionary announcement
Shareholders are referred to the announcement published on 13 February 2001.
Explorer Corporation Holdings Limited is currently involved in discussions that
if successfully concluded may have a material effect on the share price of the
Company.
Accordingly, shareholders are advised to continue exercicing caution when
dealing in the Company's securities until a further anouncement is made.
For and on behalf of the Board of Directors.
Justin Chinyanta
Chairman
Johannesburg
06 April 2001
Registered Office
C/o Loita Capital Partners (Pty) Ltd
2nd Floor, East Wing,
11 Alice Lane, Sandton
Transfer Secretaries
Mercantile Registrars Limited
Directors
J Chinyanta, Y Bazian, C Clarke, C Van Nieuwkerk,
A Stanger*
