| Tue 8 May 2001, 0:00 | | Equinox Holdings Results For 6 Months Ended 31 Mar |
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EQUINOX HOLDINGS
Results for 6 Months Ended 31 March 2001
INCOME STATEMENTS for the period ended 31 March 2001
Unaudited Unaudited Audited
2001 2000 2000
R'000 R'000 R'000
6 months ended 6 months ended 12 months ended
31/3/2001 31/3/2000 30/9/2000
Operating income 11,664 19,454 35,024
Dividends received 760 1,567 3,103
Net interest (paid) received
(569) 908 1,386
Total operating income and net interest (paid) received
11,855 21,929 39,513
Operating expenditure
10,038 9,683 27,870
Depreciation 351 - 159
Marketing costs 69 56 4,786
Other operating expenditure
2,680 2,630 10,075
Staff costs 6,938 6,997 12,850
Write down of unlisted investments
- - 5,414
Losses on fair value remeasurements
- - 5,414
Profit before taxation
1,817 12,246 6,229
Taxation 1,251 525 (1,623)
Loss from associate company
- 301 808
Net profit for the period
566 11,420 7,044
Basic and fully diluted earnings per share (cents)
0.48 9.74 6.01
Basic and fully diluted headline earnings per share (cents)
0.48 10.00 6.70
STATEMENT OF CHANGES IN EQUITY for the period ended 31 March 2001
Unaudited Unaudited Audited
2001 2000 2000
R'000 R'000 R'000
6 months ended 6 months ended 12 months ended
31/3/2001 31/3/2000 30/9/2000
Equity at the beginning of the period
88,560 81,516 81,516
Changes in share capital and share premium
(137) - -
Reduction in share capital
(2) - -
Reduction in share premium
(135) - -
Changes to retained income
566 11,517 7,044
Net profit for the period
566 11,420 7,044
Prior period pro forma adjustment
- 97 -
Equity at the end of the period
88,989 93,033 88,560
BALANCE SHEETS as at 31 March 2001
Unaudited Unaudited Audited
31/3/2001 31/3/2000 30/9/2000
R'000 R'000 R'000
Assets
Non-current assets 22,432 28,396 26,379
Unlisted investments
20,468 28,321 23,124
Deferred taxation 713 75 1,808
Fixed assets 1,251 - 1,447
Current assets 138,727 96,476 126,498
Trading securities 101,566 58,482 94,377
Accounts receivable 553 1,081 1,052
Bank and cash 36,569 36,913 30,882
Taxation 39 - 187
Total assets 161,159 124,872 152,877
Equity and liabilities
Capital and reserves
88,989 93,033 88,560
Share capital 1,170 1,172 1,172
Share premium 50,777 50,912 50,912
Retained income 37,042 40,949 36,476
Non-current liabilities
Long-term liabilities - 2,412 1,119
Current liabilities
72,170 29,427 63,198
Trading liabilities
69,440 28,890 56,046
Current portion of long-term liability
2,693 - 3,001
Overdraft - - 4,120
Provision for taxation 37 537 31
Total equity and liabilities
161,159 124,872 152,877
Net Asset Value per Share (cents)
76.08 79.37 75.55
SUMMARISED CASH FLOW STATEMENTS for the period ended 31 March 2001
Unaudited Unaudited Audited
2001 2000 2000
R'000 R'000 R'000
6 months ended 6 months ended 12 months ended
31/3/2001 31/3/2000 30/9/2000
Cash retained from operations
8,562 13,233 7,117
Cash effects of investing activities
2,501 5,978 3,347
Cash effects of financing activities
(1,256) (1,708) (3,112)
Increase in bank and cash
9,807 17,503 7,352
Bank and cash beginning of period
26,762 19,410 19,410
Bank and cash end of period
36,569 36,913 26,762
SUMMARISED SEGMENT INFORMATION for the period ended 31 March 2001
Equinox Exchange Equinox Specialised
Systems and Fund
Equinox.co.za Management
R'000 R'000
2001 2001
Income statement
Operating income 104 11,315
Dividends received - 599
Net operating (loss) income before interest and taxation
(4,955) 7,582
GROUP STRUCTURE
FINANCIAL RESULTS
The same accounting policies and methods of computation are followed in the
interim financial statements as compared with the most recent annual financial
statements.
HIGHLIGHTS
Equinox reports attributable earnings of R0,57 million (0,48 cents per share)
for the 6 months ended 31 March 2001. In the prior period, Equinox reported
attributable earnings of R11,42m (9,74 cents per share) for the 6 months ended
31 March 2000.
The profits from proprietary fund management continue to be invested in the
development of the group's e-commerce activities. As required by GAAP, Equinox
expenses these costs as they are incurred.
Equinox continues however to streamline its operations and reduce its cost base
SPECIALISED FUND MANAGEMENT
Equinox has its roots in proprietary fund management and continues to operate
successfully in this area.
The USA division, running a long/short proprietary hedge fund, focussed on
capital preservation during the difficult market conditions. As a result, the
fund is well positioned to take advantage of future investment opportunities.
South African market conditions have not been conducive to a long/ short
portfolio strategy. The South African division has successfully focussed on its
event-driven arbitrage strategies.
E-COMMERCE*
*Equinox formerly referred to its e-commerce activities under the company name
Equinox Financial Solutions.
Equinox Exchange Systems (EES) continues its development of a proprietary
e-commerce enabled system for the investment products industry. The software
enables retail and wholesale buying and selling of financial instruments by
individual investors or their advisers on a straight through basis. In
addition, the software manages the relationship between the parties involved in
the investment process such as financial advisers and their individual clients.
The software also automates the administrative processes of an asset custodian.
The system is entirely browser based with no off-line components.
The technology will be provided to clients either on a license basis or on an
application service provider (ASP) basis. Equinox.co.za is currently testing an
early release of the first phase of the system, which caters for unit trust
supermarkets.
The technology being developed by EES may have spin-off applications,
potentially including offshore.
STRUCTURED PRODUCTS
Consistent with its previously stated objective, Equinox has now ceased its
structuring activities and is taking steps to minimise any residual ongoing
involvement in transactions to which it was formerly party.
PRIVATE EQUITY
Equinox continues to exit its private equity investments. The most material
remaining investment is Mineral Water Developments, with a value in Equinox's
books of approximately R15,3m. A cash sale of the shares in this company is
expected to have been concluded prior to Equinox's current year-end (30
September 2001) to net Equinox approximately its book value. Should this sale
not eventuate, a provision against this investment may be required.
PROSPECTS
Equinox remains adequately capitalised, with net assets of approximately R
88,9m, including cash of R36m. Most of the remainder of Equinox's assets are
relatively liquid, with the exception of Mineral Water Developments, the
private equity investment referred to above. Under current market
circumstances, Equinox aims to utilise its capital and resources
conservatively. The e-commerce developments will however continue to require
funding until 31 March 2002, after which they are expected to be self-funding.
Equinox's earnings for the year to 30 September 2001 are expected to depend
substantially if not entirely on the performance of its specialised fund
management activities in SA and the USA. Being primarily proprietary in nature,
the earnings from these operations are volatile and unpredictable, although
appropriate risk management procedures are in place. In addition, as required
by GAAP, development expenditure incurred within the e-commerce activities will
be expensed as incurred.
Equinox will not pay a dividend this financial period. Cash generated will be
utilised to fund the e-commerce developments. Surplus cash may be used to buy
back Equinox shares if available at attractive prices below NAV. Within the
reporting period, Equinox bought back 250 000 of its own shares at 55c per
share.
For and on Behalf of the Board
Heiko van Wyngaarden Stewart Truswell
Chief Executive Officer Director
May 2001
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