| Thu 27 Feb 2003, 10:23 | | Wooltru Limited - Interim Results For The Six Mont |
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Wooltru limited - Interim results for the six months ended 31 December 2002
Wooltru Limited
(Registration number: 1936/008278/06)
Share Code: WLO ISIN Code: ZAE000007993 A11B67DCAAC97C32EB8A1CC1D03FF7A8
Share Code: WLN ISIN Code: ZAE000008744 A11B67DCAAC97C32EB8A1CC1D03FF7A8
Share Code: WLOP ISIN Code: ZAE000008009 A11B67DCAAC97C32EB8A1CC1D03FF7A8
Share Code: WLP1 ISIN Code: ZAE000008017 A11B67DCAAC97C32EB8A1CC1D03FF7A8
Interim results for the six months ended 31 December 2002
Unbundling
As disclosed in Wooltru`s annual report for the year ended 30 June 2002,
Wooltru`s entire holding in Massmart shares, Truworths shares and Woolworths
shares was distributed in specie to the company`s Ordinary and "N" Ordinary
shareholders on 26 June 2002.
With this distribution, the principal objective of the Wooltru unbundling was
successfully concluded. However, the smooth passage to the ultimate winding up
of Wooltru has been interrupted by the liquidation of companies in the CNA
group, the implications of which will be dealt with in greater detail below.
Investment update
As shareholders have been previously advised, the value of Wooltru can no longer
be determined with regard to its earnings potential, but is a function of the
net realisable value of its remaining assets. The board accordingly considers it
more relevant to shareholders for the focus of this report to be on the value of
the remaining assets in Wooltru, the anticipated costs to be incurred, and any
liabilities to be settled, before Wooltru can finally be wound up.
Wooltru`s remaining assets comprise properties, net proceeds from the disposal
of shares still held by the Share Purchase Trust, cash and amounts due to
Wooltru relating to the sale of CNA. Wooltru`s position in relation to CNA is
explained more fully below.
Property
Property holdings, as at 18 February 2003, were valued by the directors at R27,8
million. Of this amount, signed sales agreements for R14,9 million have been
entered into and the properties in question are at various stages in the
transfer process. R12,9 million is expected to be received by 30 April 2003, and
R2,0 million by 31 December 2003.
Jet Park, an industrial warehouse situated in Benoni, is the only unsold
property. Jet Park is in the process of being let and will subsequently be sold
and will realise at least the directors` valuation.
Share Purchase Trust
Due to Wooltru being limited by the restrictions imposed upon it by the JSE
Securities Exchange South Africa Listings Requirements arising from trading
under a cautionary announcement, it has been unable to sell the remaining 3 949
995 Wooltru Ordinary shares and 1 087 150 Wooltru "N" Ordinary shares. At
current market prices their value amounts to R1,2 million.
Cash balances
As at 18 February 2003, cash balances on hand amounted to R149,9 million.
The value of Wooltru`s remaining assets being property sold and to be sold, the
shares in the Share Purchase Trust and cash balances on hand at 18 February
2003, therefore total R178,9 million.
Estimated net cash outflows
Estimated cash flows to the date of the final winding-up, or voluntary
liquidation, of Wooltru, which is expected to be by 30 June 2004, are budgeted
at R12,7 million. This will be offset by interest that will be earned on cash
balances and which has not been accounted for. Should the cash on hand be
invested until the final voluntary liquidation of Wooltru in June 2004, interest
of R29 million could be earned.
The key components for which cash flows have been budgeted are as follows:
Rm
Property related 7,5
Capital gains tax 1,0
Advisors 3,0
Employment costs (1) 5,9
Administration costs (2) 2,7
Tax refund (8,9)
Preference share redemption 1,5
Total net cash outflow 12,7
(1) This figure consists of salaries, termination benefits for general staff and
leave pay.
(2) This figure includes listing costs, audit fees, tax consulting, travel,
communication and VAT.
CNA
It is common knowledge that the main operating companies in the CNA group have
been placed in provisional liquidation. Wooltru is still owed R73,8 million from
the sale, in February 2001, of Consolidated News Agencies Holdings (Pty) Limited
("CNA Holdings") to Gordon Kay & Associates (Pty) Ltd. This amount was due at
the end of May 2002 and remains outstanding.
The recoverability of the outstanding claim for R73,8 million depends on the
final result of the liquidation. No recovery value has been attributed to the
Wooltru claim in the investment update reflected earlier in this report.
Wooltru`s claim will, however, be pursued with the liquidators.
The Commission of Enquiry that was called to investigate the circumstances
surrounding the liquidation of companies in the CNA group has issued its report.
In the report, the Commissioner concluded that there was no contravention of
Section 38 of the Companies Act and that no basis exists for any claim against
Wooltru.
Wooltru has proved claims against the liquidators of CNA amounting to R76,0
million, which claims arise out of a Deed of Suretyship entered into by CNA in
favour of Wooltru. In addition, Wooltru has, through the ability to exercise
certain pledges of shares, a potential controlling interest in CNA Holdings
(which is not in liquidation) and is involved in negotiations to dispose of this
company for maximum value. Any proceeds that could arise from these transactions
have not been brought to account in the cash flows reported on earlier.
Arising out of the liquidation of CNA, certain approaches have been made to
Wooltru claiming that a liability exists on Wooltru`s part for the post-
retirement medical aid contributions of former employees of CNA. The actuarial
valuation of these liabilities amounts to approximately R20 million. This claim
is disputed.
Due to the uncertainties referred to above, no account has been taken of any
potential proceeds to be derived by Wooltru or any claims against Wooltru in the
balance sheet and cash flows accompanying this report.
GROUP RESULTS
The results of the group cannot be compared with the results of prior periods
due to the distribution of the shares in Massmart, Truworths and Woolworths to
Wooltru shareholders on 26 June 2002 and the disposal of Topics during April
2002 and Affinity Logic during June 2002. In addition, the rental base of the
property portfolio has been reduced through the realisation of properties and
the proceeds from these realisations have been added to the group cash balance.
In the current period, Wooltru`s remaining assets have recorded an attributable
profit of R2,4 million compared to the December 2001 loss of R30,6 million.
PROSPECTS
It is not possible to predict what impact the issues surrounding CNA may have on
the timing of the proposed voluntary liquidation of Wooltru itself. Should the
liquidation of the CNA companies proceed to finalisation without any calls upon
Wooltru, it is expected that the Wooltru group will be finally wound up within
the next sixteen months. In order to ensure that adequate resources are in place
during this period, the company has entered into employment agreements with key
staff that will be required for this purpose.
Once certainty has been reached, the board will consider whether to declare any
further interim dividends. On the winding-up of Wooltru, the preference shares
will be redeemed and all remaining cash will be distributed to shareholders.
JB Rabb JD Newton
Managing director Finance director
Directorate and administration
Wooltru Limited (Registration number: 1936/008278/06)
Chairman: LA Tager*
Directors: JB Rabb (Managing), DM Lubner*, JD Newton, JC van der Horst*
Non-executive
Company secretary: RJ McWilliams
Registered office: 5 Corporation Street, Cape Town 8001, South Africa
Postal address: PO Box 671, Cape Town 8000, South Africa
Website: http://www.wooltru.co.za
Transfer secretaries:
Computershare Investor Services Limited
70 Marshall Street, Johannesburg 2001, South Africa
PO Box 61051, Marshalltown 2107, South Africa
Transfer Secretaries (Pty) Limited
Shop 12, Kaiserkrone Centre, Post Street Mall, Windhoek, Namibia
PO Box 2401, Windhoek, Namibia
Income statement
Audited
Unaudited
Six months ended
31 December
Year ended
30 June
2002 2001 2002
Notes Rm Rm Rm
Revenue 4 18,5 1 188,6 2 396,9
Cost of sales (6,5) (547,2) (1 099,7)
Gross profit 12,0 641,4 1 297,2
Depreciation and amortisation (0,1) (32,9) (65,4)
Occupancy costs (0,1) (101,1) (193,1)
Employment costs (4,2) (182,8) (370,1)
Other operating costs (3,3) (111,7) (232,1)
Profit from operations 4,3 212,9 436,5
Finance costs (0,9) (16,0) (19,8)
Share of associates and
joint venture profit - 152,1 323,2
Net profit before
exceptional items 3,4 349,0 739,9
Exceptional items 5 3,5 (189,4) (325,4)
Net profit before taxation 6,9 159,6 414,5
Taxation (4,5) (67,8) (189,1)
Net profit after taxation 2,4 91,8 225,4
Minority interests - (60,5) (133,7)
Net profit attributable to
ordinary shareholders 2,4 31,3 91,7
Number of shares
issued (millions) 475,9 475,9 475,9
Weighted average number
of shares (millions) 475,9 475,9 475,9
Earnings per share (cents) 0,5 6,6 19,3
Diluted earnings per
share (cents) 0,5 6,0 17,9
Headline (loss)/earnings
per share (cents) 6 (0,4) 46,5 90,5
Dividend per share (cents) - 15,0 15,0
Group analysis
Segment revenue * 18,5 1 188,6 2 396,9
Properties 6,4 11,6 73,5
Wooltru (includes interest received) 12,4 10,8 29,1
Truworths International - 969,2 1 985,9
Topics - 154,4 217,0
Interest and dividends received
and consolidation adjustments (0,3) 42,6 91,4
Segment result ** 4,3 365,0 759,7
Properties (0,6) 2,5 0,1
Wooltru (includes interest
received and paid) (0,6) (13,4) (44,6)
Truworths International - 154,4 362,7
Topics - 8,0 2,3
Woolworths - associate company - 83,8 192,1
Massmart - associate company - 73,3 145,3
Affinity Logic - joint venture - (5,0) (14,2)
Interest and dividends received,
interest paid and consolidation 5,5 61,4 116,0
adjustments
* Excludes interest and dividends received except where indicated.
** Excludes interest and dividends received and interest paid except where
indicated.
Cash flow statement
Audited
Unaudited
Six months ended
31 December
Year
ended
30 June
2002 2001 2002
Rm Rm Rm
Cash flow from operating activities
Cash (utilised by)/generated from
operations (50,1) 185,5 250,5
Net investment income 8,9 84,7 198,7
Taxation paid (0,7) (68,6) (195,6)
Dividends paid - (16,0) (106,6)
Net cash (outflow)/inflow from operations (41,9) 185,6 147,0
Cash flow from investing activities
Net acquisition of property, plant
and equipment (22,9) (22,6) (32,9)
Net loans and other investments 73,5 108,9 114,8
Net outflow on disposal of subsidiaries - (24,4) (159,3)
Proceeds from discontinued
operation - Sportsgirl - 0,3 5,3
Proceeds from the sale of CNA - - 94,8
Payment to Affinity Logic on behalf of CNA - - (20,0)
Net proceeds from the disposal of
Affinity Logic - - 40,3
Net cash inflow from investing activities 50,6 62,2 43,0
Cash flow from financing activities
Shares issued - - 20,3
Share repurchased - (29,6) (66,8)
Net cash outflow from financing activities - (29,6) (46,5)
Net increase in cash and cash equivalents 8,7 218,2 143,5
Cash and cash equivalents at
beginning of period 163,4 19,9 19,9
Cash and cash equivalents at end of period 172,1 238,1 163,4
Balance sheet
Audited
Unaudited Year
Six months ended ended
31 December 30 June
2002 2001 2002
Rm Rm Rm
ASSETS
Non-current assets 15,8 2 216,9 5,4
Property, plant and equipment 15,5 315,6 5,0
Investment in associates - 1 620,6 -
Other investments - 36,6 -
Loans 0,3 242,9 0,4
Deferred tax - 1,2 -
Current assets 197,9 1 310,3 262,8
Inventories 10,7 217,2 16,5
Trade and other receivables 2,9 753,4 69,0
Taxation 12,2 10,4 12,4
Bank balances and cash equivalents 172,1 329,3 164,9
Total assets 213,7 3 527,2 268,2
EQUITY AND LIABILITIES
Equity 172,8 2 901,0 170,4
Ordinary shareholders` interest 171,3 2 459,5 168,9
Preference share capital 1,5 1,5 1,5
Minority interests - 440,0 -
Non-current liabilities 0,1 160,8 0,1
Retirement benefit obligations - 36,5 -
Deferred tax 0,1 124,3 0,1
Current liabilities 40,8 465,4 97,7
Short-term liabilities:
interest-bearing - 21,9 1,5
Trade, other payables
and provisions 15,9 311,8 74,9
Amount owing to associate
and joint venture - 69,3 -
Taxation 24,9 62,4 21,3
Total equity and liabilities 213,7 3 527,2 268,2
Net asset value per share (cents) 36 517 35
Statement of changes in ordinary shareholders` interest
Audited
Unaudited Year ended
Six months ended
31 December
30 June
2002 2001 2002
Rm Rm Rm
Ordinary shareholders` interest 168,9 2 359,0 2 359,0
Movements for the period:
Distribution in specie of share premium - - (650,6)
Recognised gains and losses
Accumulated profit/(loss) 2,4 118,1 (843,7)
Change in accounting policy - 43,3 43,3
Net profit attributable to ordinary
shareholders 2,4 31,3 91,7
Distribution to ordinary
shareholders - - (1 659,7)
Net unrealised gains on hedging
instruments - 23,4 7,1
Transfer from non-distributable
reserves - 20,1 673,9
Non-distributable reserves - (17,6) (695,8)
Change in accounting policy - (43,3) (43,3)
Exchange difference on translation
of foreign entities - 45,8 39,9
Revaluation of trademark - - (15,5)
Disposal of subsidiary - - (3,0)
Transfer to accumulated loss - (20,1) (673,9)
Ordinary shareholders` interest at
end of period 171,3 2 459,5 168,9
Notes
1. The basis of preparation of the financial information complies with South
African Generally Accepted Accounting Practice and the accounting policies used
are consistent with those applicable for the 30 June 2002 financial statements.
As required, AC133 Financial instruments: recognition and measurement was
adopted in the current period. The adoption of this statement has had no impact
on current or prior period figures.
2. The shares in Massmart, Truworths International and Woolworths were
distributed in specie to the shareholders on 26 June 2002. The investment in
Topics, Affinity Logic, inthebag, Wooltru Insurance Brokers and the major
portion of the land and buildings had been disposed of by 30 June 2002. The
current period consists of the activities of Wooltru head office, Wooltru
Finance and the remaining portion of land and buildings.
3. The annual financial statements continue to be prepared on the going concern
basis as the directors consider this to be the most appropriate basis, although
it is the stated intention to wind up the company in due course.
Audited
Unaudited Year
Six months ended ended
Dec 2002 Dec 2001 June 2002
Rm Rm Rm
4. Revenue
Sales, royalties and franchise fees - 1 122,3 2 200,7
Interest income 11,4 50,6 110,8
Property development 6,4 - 56,4
Dividends received - 3,6 10,2
Rental 0,7 11,2 16,3
Other - 0,9 2,5
18,5 1 188,6 2 396,9
Audited
Unaudited Year
Six months ended ended
Dec 2002 Dec 2001 June 2002
Rm Rm Rm
5. The exceptional items relate to:
Profit on sale of land and
buildings 5,7 12,8 17,7
Unbundling expenses (3,3) (3,6) (8,5)
Property developments impairment (0,7) - (4,1)
Reversal of prior impairment of
assets 1,9 - -
Impairment of assets
(December 2002 - Jet Park) (19,6) - (2,2)
Reversal of/(provision for)
Jet Park onerous contract 19,5 - (19,5)
Impairment of group investment
in discontinuing
operation - Topics - (141,7) -
Disposal of Topics - - (135,1)
Massmart promissory note unwind - (34,1) (34,1)
CNA disposal price adjustment - 14,8 14,8
Early realisation of CNA
proceeds guarantee - (5,2) (5,5)
Unwind of lease agreements
suretyships - (2,1) (1,3)
Disposal of Wooltru
Insurance Brokers - (3,4) (3,4)
Disposal of inthebag - 18,2 18,2
Distribution from discontinuing
Operation - Sportsgirl - 0,3 5,3
Net decrease in attributable
shareholders` funds on issue
and repurchase of shares by
subsidiary and associates - (17,1) (41,5)
Reversal of impairment of loan
to share incentive scheme trust - 19,3 34,3
Provision for CNA proceeds - - (73,8)
Reversal of CNA cost provision - - 1,2
Disposal of Affinity Logic - - 18,0
Distribution from share
incentive scheme trust - - (9,7)
Other - 1,2 -
Total 3,5 (140,6) (229,2)
Share of associates and joint venture
exceptional items
Discontinuance of Country
Road`s US operation - (47,8) (52,4)
Makro Woodmead fire and the
CCW Maseru riots - 8,6 10,8
Restructuring of operations - (3,2) (3,2)
Impairment of assets - (2,2) (16,8)
Loss on disposal of Sip `n Save - (4,2) (2,9)
Disposal of listed investment - - (2,2)
Bad debt relating to VAT settlement - - (4,5)
Goodwill impairment - - (23,1)
Onerous contract - - (2,4)
Distribution from share
purchase trust - - 1,1
Provision for impairment of
loan to share incentive scheme - - (1,2)
Other - - 0,6
3,5 (189,4) (325,4)
Taxation 0,1 - (20,7)
Minorities - (0,2) (3,4)
3,6 (189,6) (349,5)
6. Headline (loss)/earnings per
share are calculated as follows:
Net profit attributable to
ordinary shareholders 2,4 31,3 91,7
Net exceptional items (note 5) (3,6) 189,6 349,5
Re-inclusion of:
Property developments
impairment (0,7) - (4,1)
Certain restructuring costs - (3,2) (3,2)
Bad debt relating to VAT
settlement - - (4,5)
Onerous contract - - (2,4)
Associate`s goodwill impairment - 8,4 -
Associate`s restraint of trade - - 3,2
(Profit)/loss on sale of
moveable assets - (4,7) 0,7
Headline (loss)/earnings (1,9) 221,4 430,9
Headline (loss)/earnings
per share (cents) (0,4) 46,5 90,5
7. Commitments in respect of
capital expenditure - 45,8 32,4
8. Unutilised banking facilities
amount to - 2 043,8 -
There is no limit on the group`s
authority to raise interest-bearing
debt.
9. Future minimum operating lease
commitments were as follows: 0,2 1 622,6 0,3
Contingent liabilities: guarantees 1,2 286,8 38,6
The current period guarantees are to
the City of Johannesburg in
respect of the Kensington
development and are in the process
of being released.
10. In the current period there is no material seasonal variation between
trading for the first six months and the second six months. In prior
periods, other than for Massmart, there was no material seasonal
variation.
11. Certain comparative figures have been regrouped and restated.
Date: 27/02/2003 09:47:19 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
