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Command Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/014759/06)
("Command" or "the company")
Unaudited financial results for the year ended 31 December 2000
Group consolidated income statement for the year ended 31 December 2000
Unaudited
31 Dec 2000
R'000
Revenue 119 057
Attributable income/(loss)
earned from trade (5 596)
Borrowing costs (1 564)
Investment income 142
Attributable income/(loss) (7 018)
Amortisation of intangibles (2 658)
Business development costs
- new business (393)
Capital expenditures (16)
Capital gains 970
Re-branding costs (482)
Restructuring and
staff rationalisation costs (969)
Net income/(loss) before taxation (10 566)
Taxation 3 387
Net income/(loss) for the year (7 179)
Share of associated company losses (19)
Outside shareholders' interests 41
Net income attributable to
ordinary shareholders (7 157)
Retained income
at the beginning of the year -
Reserves available for distribution (7 157)
Dividends -
Retained income at the end of the year (7 157)
Number of shares in issue 101 848
Weighted average
number of shares ('000) 101 386
Headline earnings/(losses)
per share (cents) (5,98)
Earnings/(losses) per share (cents) (7,06)
Fully diluted earnings/(losses)
per share (cents) (7,03)
Group consolidated cash flow statement for the year ended 31 December 2000
R'000
Cash generated from trading
Cash generated from operations 6 085
Restructuring, re-branding and business
development expenses (1 711)
Company taxation paid (328)
Cash utilised to service and repay debt (2 024)
Cash flows for investing activities
Cash flows from investments and loans (3 638)
Cash flows from acquired and
sold businesses (4 065)
Cash flows: asset sales and
acquisitions to maintain operations 160
Cash exchanges with shareholders
Proceeds from share issue 4 997
Listing costs (4 203)
Net increase/(decrease)
in cash resources (4 727)
Cash resources
at the beginning of the year -
Cash resources
at the end of the year (4 727)
Group consolidated balance sheet for the year ended 31 December 2000
Unaudited Audited
31 Dec 2000 31 Dec 1999
R'000 R'000
Shareholders' funds
Share capital 1 1
Share premium net of
listing costs 7 953 5 309
Accumulated deficit (7 157) -
Outside shareholders'
interests 1 826 -
2 623 5 310
Deferred liabilities
Tenants' deposits 574 -
Income received in advance 498 -
Other deferred liabilities 29 -
1 101 -
Interest bearing liabilities
Long-term borrowings 2 579 2 203
Taxation 366 -
Short-term borrowings
repayable in the forthcoming year 2 117 1 281
Short-term borrowings -
overdrafts 6 135 -
11 197 3 484
Total funds employed 14 921 8 794
Non-current assets
Tangible assets 5 614 5 386
Deferred taxation 3 615 -
Intangible assets 5 483 -
Investments in associated
companies 62 -
Investments, loans and
interest bearing rental debtors 3 717 -
18 491 5 386
Current assets
Inventories 2 370 91
Work-in-progress 2 423 -
Non-trade receivables 2 026 -
Trade receivables 13 079 3 745
Prepaid expenditure 709 -
Cash resources 1 408 -
22 015 3 836
Interest free liabilities
Non-trade payables (411) -
Trade payables (21 014) -
(21 425) -
Provisions (4 160) (428)
Net assets 14 921 8 794
Group consolidated statement of changes in equity
Share Share Accumulated Unaudited
Capital Premium deficit Total
R'000 R'000 R'000 R'000
Balance at the beginning of the period 1 5 309 - 5 310
Issue of share capital-ordinary shares - 6 847 - 6 847
Preliminary and listing costs written off - (4 203) - (4 203)
Retained income for the period - - (7 157) (7 157)
Balance at the end of the period 1 7 953 (7 157) 797
NOTES:
1. Comparatives
There are no comparative figures for the income and cash flow statements as the
group only commenced trading on 1 January 2000.
2. Capital expenditure
Capital expenditure for the period amounted to R2 191 000.
3. Lease commitments
Operating lease commitments amount to R3 054 498.
4. Depreciation
Depreciation for the year amounted to R1 597 000.
5. Year 2000 ("Y2K")
No Y2K operational processing problems were encountered.
6. Contingent liabilities
The company has furnished a suretyship for a rental agreement concluded by
Aludie Limited in the amount of R1 830 000 payable in 52 instalments.
7. Audited financial statements
The Group audit for the 2000 financial year is nearing completion and full
audited financial statements will be issued in June 2001.
GENERAL REVIEW
Nature and history of business
The Group commenced trading on 1 January 2000 having acquired various
businesses operating in the security industry on 31 December 1999. The company
listed on the JSE Securities Exchange South Africa ("JSE") in the services
sector on 9 February 2000. The company's two main subsidiaries are wholly-owned
Command Security Services (Proprietary) Limited and Aludie Limited ("Aludie")
in which the Group has a 47,7% stake. The former company provides physical
guarding services and alarm installation services and Aludie trades in the
security systems and parking management industry. The results of Aludie have
been included for the period 1 June 2000 to year end, that being the period
during which effective control was exercised.
Results
The Group has reported poor trading results as a result of the following
factors:
1. The Group experienced unexpected problems in restructuring the acquired
companies and in implementing effective management information systems.
2. Turnover did not meet forecasts due partly to the Group's failure to
conclude a partnership arrangement with a Black Empowerment entity.
3. The Group's infrastructure was established in order to manage a business
with a much higher turnover and the benefits of downsizing have not been felt
during this period, contributing to excessive overheads.
4. New business expenditure, particularly expenditure on the business of
electronic monitoring of offenders, may only yield revenue in the forthcoming
year.
5. Substantial losses (R3 922 000) were incurred at the Witbank and Pretoria
branches as a result of pressures on the margins and bad debt. Further losses
were incurred at the Worcester Branch (R590 000) for similar reasons. The
failure of the Group to meet forecasts included in the prospectus arose largely
as a result of the inability of these branches to meet prospectus projections.
6. Aludie contributed R601 000 to headline earnings before tax during the
period from 1 June 2000 to 31 December 2000.
Prospects
The Group expects to report a return to profitability during the 2001 financial
year based on the following actions taken and/or currently in progress:
1. The recapitalisation of the group.
2. Substantial reductions in overheads largely through the rationalisation of
branch operations recently completed and the non-renewal of certain service
contracts.
3. The disposal of the Witbank and Pretoria branches which incurred trading
losses of R3 922 000 for the 2000 year. This disposal has been agreed to in
principle and announcements in this regard will be included in the circular
arising from negotiations referred to in the cautionary announcement.
4. The disposal of the Worcester branch which incurred trading losses of R590
000 for the 2000 year.
5. The implementation of better management information systems expected to be
completed by June 2001.
Dividends
No dividends will be declared for the year in the light of the poor trading
results.
Further cautionary announcement
Further to the cautionary announcement dated 6 April 2001, shareholders are
advised that negotiations are still in progress which, if successfully
concluded, may have an effect on Command's share price. Shareholders are thus
advised to exercise caution in dealing in the company's shares until further
notice.
Directors
The following directors resigned from the board:
I Epstein (Non-executive director) (5/2000)
G Kaplan (Non-executive director) (5/2000)
R J Biesman-Simons (Executive financial director).(11/2000)
P D Wharton-Hood (Non-executive director) (11/2000).
Messrs T E Nxumalo (executive) and Mr J L Tsotsetsi (non-executive) were
appointed to the board and Mr M W Reynolds was appointed as executive director
(previously non-executive) in December 2000.
Messrs Z J Sithole (Chairman), J Imerman, S Imerman and H J Bruyn served as
directors throughout the year.
By order of the board
H J Bruyn M W Reynolds
Chief executive officer Financial director
J C Kaufmann
Company secretary
Cape Town
8 May 2001
Transfer secretaries Registered office
Mercantile Registrars Ltd Building 2, De Tijger Office Park
11 Diagonal Street Cnr McIntyre/Hannes Louw Streets
Johannesburg Parow
2000 7500
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