| Thu 28 Aug 2003, 15:42 | | Audited group results for the year ended 30 June 2 |
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Wooltru Limited - Audited group results for the year ended 30 June 2003
Wooltru Limited
Audited group results for the year ended 30 June 2003
Share Code: WLO ISIN Code: ZAE000007993
Share Code: WLN ISIN Code: ZAE000008744
Share Code: WLOP ISIN Code: ZAE000008009
Share Code: WLP1 ISIN Code: ZAE000008017
Unbundling
During the past year, the directors and executive staff of Wooltru have been
actively involved in resolving the remaining issues that stand in the way of a
final distribution of the assets of Wooltru to its shareholders. These include
numerous administrative tasks such as the collapsing of corporate structures and
the de-registration or liquidation of companies within the group. Good progress
has been made in these endeavours. The process of finalising the liquidation of
companies in the CNA group has, however, resulted in ongoing uncertainties
which, until such time as they can be resolved to the satisfaction of the board,
will delay the ultimate winding-up of Wooltru.
Investment update
At the date of this report, Wooltru"s remaining assets consist of the balances
payable in respect of the sale of properties, cash on hand and any amounts
recoverable from the liquidation of CNA.
Property
All of the group"s properties have now been disposed of, with the exception of a
small interest in a share block development, valued at R0,5 million and which is
currently being marketed.
A final amount of approximately R4,9 million of the proceeds is still
outstanding and is expected to be received within the next six months.
Since the date of the interim report, Jet Park, the industrial warehouse
situated in Benoni and valued by the directors at R12,9 million, was sold for
R15,0 million, payment of which has been received.
The remaining moveable assets are estimated to realise at least R0,6 million.
Share Purchase Trust
At the meetings of shareholders, held in Cape Town on 15 April 2003, the company
was authorised to purchase from the Wooltru 1982 Executive Share Purchase Trust
the remaining shares held by the Trust in Wooltru Limited. Accordingly, 3 974
617 Wooltru Ordinary shares at a price of 25,85 cents per share and 1 087 150
Wooltru "N" Ordinary shares at a price of 23,90 cents per share were acquired.
This transaction realised an amount of R1,3 million, for the Share Purchase
Trust which has subsequently been distributed to Wooltru. The Share Purchase
Trust is, accordingly, in the process of being wound up.
Cash balances
As at 26 August 2003, cash on hand amounted to R191,8 million.
The value of Wooltru"s cash balances and remaining assets at this date totalled
R197,8 million.
Estimated cash outflows
Estimated outflows 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 R15,9 million. This will, to a significant degree, 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 R17,5 million could be earned.
The key components for which cash flows have been budgeted are as follows:
Rm
Property related (1) 6,2
Taxation 0,5
Advisors 2,3
Employment costs (2) 3,5
Administration costs (3) 1,9
Preference share redemption 1,5
Total cash outflow 15,9
(1) This figure includes outstanding development costs (R2,6m), performance
bonuses in the Wooltru Properties Group (R2,4m), and other costs (R1,2m).
(2) This figure consists of salaries, termination benefits for general staff and
leave pay.
(3) This figure includes listing costs, audit fees, tax consulting, travel,
communication and VAT.
CNA
Shareholders have previously been advised that the main operating companies in
the CNA group have been placed under provisional liquidation. The recoverability
of Wooltru"s claim of R73,8 million against Gordon Kay & Associates (Pty) Ltd,
the purchasers from Wooltru of CNA Holdings (Pty) Ltd, for the balance of the
purchase price of CNA Holdings (Pty) Ltd will, accordingly, depend on the final
result of the liquidation.
Wooltru has proved claims against CNA amounting to R76,0 million, which claims
arise out of a Deed of Suretyship entered into by CNA in favour of Wooltru for
the balance of the purchase price plus some interest thereon.
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 accordingly no basis existed to make a claim
against Wooltru in terms of this section.
However, despite these findings, the liquidators of Consolidated News Agencies
(Pty) Ltd (Consolidated), and certain of its creditors, have alluded to claims
against Wooltru and have indicated that they may seek approval from the High
Court to take actions which could expunge Wooltru"s claim of
R76,0 million and recover part or all of the R115,0 million received by Wooltru
for the sale of CNA.
Whilst the company"s legal advisors are of the opinion that the liquidators
would be unsuccessful with the contemplated litigation, it would have the
undesirable effect of incurring legal costs in resisting the claims and delaying
the wind-up of Wooltru.
A claim has been made against Wooltru by Johnnic Book Retail Ltd ("Johnnic")
(formerly CNA Gallo Ltd). Johnnic contends that Wooltru contractually bound
itself, when it acquired the business of Consolidated from CNA Gallo Ltd, as
surety and co-principal debtor for the due and proper compliance by the
substituted purchaser, being Consolidated (formerly National Bazaars (Pty) Ltd).
Pursuant to the guarantee, Johnnic contends that Wooltru is liable for 75% of
the medical aid contributions which Johnnic contractually agreed to pay to
Consolidated"s employees from the date of their respective retirement to date of
death. It has been intimated that this obligation amounts to some R20 million. A
former employee of Consolidated has instituted proceedings against Johnnic for
payment of 75% of his post-retirement medical aid payments and for a declarator
by the court that Johnnic is liable to pay the contribution until his death. The
claim is regarded as a test case for the other former employees of Consolidated.
Johnnic has defended the action and has joined Wooltru as third party in the
proceedings seeking an order that in the event that it is found that Johnnic is
obliged to pay the medical aid contributions, Wooltru is, by virtue of its
surety, liable to do so. Acting on advice, Wooltru is defending the claim.
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 restructuring that has resulted from the unbundling process and the
sale of group assets.
In the current period, Wooltru"s remaining assets have generated an attributable
profit of R20,4 million.
Prospects
Concurrent with the disposal of assets, management has been working to finalise
all outstanding administrative issues to enable the voluntary liquidation of
Wooltru to take place as soon as possible. Good progress has been made in this
regard.
The final liquidation of CNA, which falls outside of Wooltru"s control, will,
however, determine whether the target date of June 2004 for the voluntary
liquidation of Wooltru is achievable. When certainty has been reached, the board
will consider declaring further dividends.
On the winding-up of Wooltru, the preference shares will be redeemed and all
remaining cash will be distributed to shareholders.
Staff
In order to ensure that adequate resources are in place until the group is
finally wound up, employment agreements have been entered into with the few
remaining key staff that will be required for this purpose. The board
appreciates the uncertainties under which the staff work and thanks them for
their contribution and ongoing commitment.
JB Rabb JD Newton
Managing director Finance director
Cape Town
27 August 2003
Balance sheet
Audited
Year ended 30 June
2003 2002
Rm Rm
ASSETS
Non-current assets 5,5 5,4
Property, plant and equipment 5,3 5,0
Loans 0,2 0,4
Current assets 195,9 262,8
Inventories 0,5 16,5
Trade and other receivables 4,3 1,7
Share incentive scheme trust - 67,2
Prepayments - 0,1
Taxation 0,6 12,4
Bank balances and cash equivalents 190,5 164,9
Total assets 201,4 268,2
EQUITY AND LIABILITIES
Capital and reserves 188,0 168,9
Ordinary share capital 9,9 10,1
Share premium 620,1 621,2
Non-distributable reserves 8,1 8,1
Accumulated loss (450,1) (470,5)
Preference share capital 1,5 1,5
Total equity 189,5 170,4
Non-current liabilities
Deferred tax - 0,1
Current liabilities 11,9 97,7
Short-term liabilities: interest bearing - 1,5
Trade and other payables 9,1 50,7
Share incentive scheme trust 1,9 -
Provisions - 24,2
Taxation 0,9 21,3
Total equity and liabilities 201,4 268,2
Net asset value per share (cents) 40 35
Income statement
Audited
Year ended 30 June
2003 2002
Notes Rm Rm
Revenue 4 43,0 2 396,9
Cost of sales (16,7) (1 099,7)
Gross profit 26,3 1 297,2
Depreciation and amortisation (0,2) (65,4)
Occupancy costs (0,3) (193,1)
Employment costs (7,9) (370,1)
Other operating costs (4,3) (232,1)
Profit from operations 13,6 436,5
Finance costs (0,5) (19,8)
Share of associates and joint venture profit 5 - 323,2
Net profit before exceptional items 13,1 739,9
Exceptional items 6 12,6 (325,4)
Net profit before taxation 25,7 414,5
Taxation (5,2) (189,1)
Net profit after taxation 20,5 225,4
Minority interests - (133,6)
Preference dividends (0,1) (0,1)
Net profit attributable to ordinary
shareholders 20,4 91,7
Earnings per share (cents) 4,3 19,3
Diluted earnings per share (cents) 4,3 17,9
Headline earnings per share (cents) 7 1,5 90,5
Dividend per share (cents) - 15,0
Number of shares issued (millions) 470,9 475,9
Weighted average number of shares (millions) 475,0 475,9
The 2002 dividend per share is the special dividend of 15 cents per share
declared on 4 March 2002.
The above results are attributable to discontinuing operations.
Cash flow statement
Audited
Year ended 30 June
2003 2002
Rm Rm
Cash flow from operating activities
Cash flow from trading (15,0) 347,3
Working capital movements (30,1) (96,8)
Cash (utilised in)/generated by operating activities (45,1) 250,5
Interest received 21,5 108,2
Interest paid (0,5) (22,3)
Income from investments 1,6 112,8
Taxation paid (15,7) (195,6)
Cash (utilised in)/generated by operations (38,2) 253,6
Dividends paid, including to minority shareholders (0,1) (106,6)
Net cash (outflow)/inflow from operations (38,3) 147,0
Cash flow from investing activities
Investment to maintain operations (32,4) (21,9)
Investment to expand operations - (227,2)
Proceeds on sale of property, plant and equipment 24,9 216,2
Increased investment in subsidiaries - (1,4)
Net outflow on disposal of subsidiaries - (157,9)
Loans and other investments 74,2 114,8
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
Proceeds from discontinued operation - Sportsgirl - 5,3
Net cash inflow from investing activities 66,7 43,0
Cash flow from financing activities
Subsidiary shares issued to minorities - 20,3
Shares repurchased (1,3) (66,8)
Net cash outflow from financing activities (1,3) (46,5)
Net increase in cash and cash equivalents 27,1 143,5
Cash and cash equivalents at beginning of period 163,4 19,9
Cash and cash equivalents at end of period 190,5 163,4
Statement of changes in ordinary shareholders" interest
Audited
Year ended 30 June
2003 2002
Rm Rm
Ordinary shareholders" interest at beginning of
period 168,9 2 359,0
Movements for the period:
Share capital and share premium (1,3) (650,6)
Distribution in specie - (650,6)
Share buy-back (1,3) -
Recognised gains and losses
Accumulated profit/(loss) 20,4 (843,7)
Change in accounting policy - 43,3
Net profit attributable to ordinary shareholders 20,4 91,7
Distribution to ordinary shareholders - (1 659,7)
Net unrealised gains on hedging instruments - 7,1
Transfer from non-distributable reserves - 673,9
Non-distributable reserves - (695,8)
Change in accounting policy - (43,3)
Exchange difference on translation of foreign
of foreign entities - 39,9
Revaluation of trademark - (15,5)
Disposal of subsidiary - (3,0)
Transfer to accumulated profit - (673,9)
Ordinary shareholders" interest at end of period 188,0 168,9
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.
During the year the company adopted AC133: Financial Instruments - Recognition
and Measurement. The adoption of this statement had no impact on the financial
statements.
2. The shares in Massmart, Truworths International and Woolworths were
distributed in specie to the shareholders on 26 June 2002. The investments 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.
2003 2002
Rm Rm
4. Revenue
Sales, royalties and franchise fees - 2 200,7
Property rentals 2,2 16,3
Dividends received 1,6 10,2
Interest income 22,6 110,8
Property development 16,5 56,4
Other 0,1 2,5
5. Share of associates and joint venture
profit includes dividends received
from associates of - 102,7
6. The exceptional items relate to:
Profit on sale of land and buildings 8,4 17,7
Unbundling expenses (4,6) (8,5)
Sale of investment 0,3 -
Distribution from share incentive
scheme trust 4,6 (9,7)
Property developments impairment (0,5) (4,1)
Reversal of impairment/(impairment of) assets 1,8 (2,2)
Revaluation of property 2,6 -
Disposal of Topics - (135,1)
Provision for CNA proceeds - (73,8)
CNA disposal price adjustment - 14,8
Early realisation of CNA proceeds guarantee - (5,5)
Reversal of CNA cost provision - 1,2
Massmart promissory note unwind - (34,1)
Disposal of inthebag - 18,2
Disposal of Affinity Logic - 18,0
Disposal of Wooltru Insurance Brokers - (3,4)
Unwind of lease agreement suretyships - (1,3)
Onerous contract - (19,5)
Reversal of impairment of loan to share - 14,8
incentive scheme trust - 34,3
Distribution from discontinuing
operation - Sportsgirl - 5,3
Net decrease in attributable shareholders"
funds on issue and repurchase of shares
by subsidiary and associates - (41,5)
12,6 (229,2)
Share of associates and joint venture
exceptional items
Discontinuance of Country Road"s US operation - (52,4)
Net insurance proceeds received on assets
destroyed in the Makro Woodmead fire
and the CCW Maseru riots - 10,8
Restructuring of operations - (3,2)
Impairment of assets - (16,8)
Disposal of listed investment - (2,2)
Loss on disposal of Sip "n Save - (2,9)
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 trust - (1,2)
Other - 0,6
12,6 (325,4)
Taxation - (20,7)
Minorities - (3,4)
12,6 (349,5)
2003 2002
Rm Rm
7. Headline earnings per share are
calculated as follows:
Net profit attributable to ordinary
shareholders 20,4 91,7
Net exceptional items (note 6) (12,6) 349,5
Reversal of property development
impairment in exceptional items (0,5) (4,1)
Re-inclusion of restructuring costs
in exceptional items - (3,2)
Re-inclusion of VAT settlement in
exceptional items - (4,5)
Re-inclusion of onerous contract in
exceptional items - (2,4)
Associate"s restraint of trade - 3,2
Loss on sale of movable assets - 0,7
Headline earnings 7,3 430,9
Headline earnings per share (cents) 1,5 90,5
8. Commitments in respect of capital
expenditure - 32,4
2002 - This related to the purchase of the Jet Park property to unwind the
guarantees in respect of lease agreements of third parties, set out in note 10.
The minimum recoverable value of the property was estimated at R12,9 million.
The difference was provided for as an onerous contract as set out in note 6. The
property was purchased and sold during the current period.
9. The group no longer requires any borrowing facilities, although there is no
limit on the group"s authority to raise interest-bearing debt.
10. The group leases a small amount of equipment under operating leases.
At the period end, the group"s future minimum operating lease commitments were
as follows:
Expiring within one year 0,1 0,2
Expiring between two and five years 0,1 0,1
Contingent liabilities: guarantees* 0,6 38,6
Contingent liabilities: Post-retirement
medical aid for CNA pensioners** 20,0 -
** The current period guarantees are to the City of Johannesburg in respect of
the Kensington development and are in the process of being released.
** The 2002 guarantee fell away when the Jet Park property was purchased for
R32,4 million as set out in note 8.
** Approaches have been made to Wooltru claiming a liability exists on Wooltru"s
part for the post-retirement medical aid contributions of former employees of
CNA. A best estimate of these liabilities is shown. This claim is disputed.
11. Ernst & Young has provided an unqualified audit opinion on the June 2003
annual financial statements, which have been abridged for the purposes of this
report. The unqualified audit opinion is available for inspection at the
company"s registered office.
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: Credit Management Solutions Group (Pty) Ltd
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 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
These results are also available on our website: www.wooltru.co.za
Date: 28/08/2003 03:37:59 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
