| Mon 14 May 2001, 0:00 | | Interim Results For The Six Months Ended 31 March |
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* Headline and attributable earnings of 328 cents per share
* Operating income, including net interest, of R531 million
* Net asset value of R44,56 per share
Results
The Coronation group recorded net income attributable to shareholders of
R309 million for the 6 months ended 31 March 2001. Headline earnings per
share for the period were 328,4 cents (2000: 440,3 cents). As projected in
the profit comment to shareholders of 7 March 2001, this is a reduction in
headline earnings of 25% compared to the same period last year.
The past 6 months have been characterised by weak and volatile financial
markets, which impacted negatively on local and international trading
activities of the Group. Attributable income from investments also declined,
primarily due to lower income from the Group's investment in African Harvest
Limited.
Coronation Fund Managers
The period under review has been difficult for South African asset managers.
The industry, and particularly the unit trust industry, experienced
significant movement of capital offshore, poor local equity market returns
and a declining South African savings rate. Despite this difficult operating
environment, Coronation Fund Managers has consolidated its position as a
global asset management company and produced attributable earnings of R58
million. This is a decrease of 11% compared to the same period last year. We
expect a subdued local market environment for the balance of 2001 but will
continue to focus on generating strong investment performance for clients.
Coronation Fund Managers is developing its international business, and
further resources will be dedicated to achieving this goal.
Business highlights
* Solid investment performance Our segregated institutional portfolios are
ranked 4th for the year, 3rd over 3 years and 2nd over 5 years to 31 March
2001 in the Alexander Forbes Large Manager Watch Survey. The Coronation
Managed Portfolio, our aggressive pooled product, is 4th in its category for
the year, and 2nd over both 3-year and 5-year periods as at 31 March 2001;
* Our unit trust company, Coronation Management Company, was awarded the
Raging Bull Award, an industry accolade, for the 2nd best Management Company
in South Africa for 2000. In 5 years, Coronation Management Company has
become the 4th largest unit trust company in South Africa;
* Coronation Fund Managers now offers a broadly diversified range of funds
including a property fund and structured products.
Coronation Capital
Coronation Capital, the investment banking and financial services business
of Coronation, produced strong financial results, increasing its
contribution to earnings by 21% over the same period last year. The
contribution of R130 million was achieved despite highly volatile local and
international markets. Return on equity remained in excess of 35% per annum.
Current market conditions are expected to continue for the remainder of the
financial year with fewer opportunities anticipated.
Business highlights
*Positive contributions from all of the operating divisions and
subsidiaries;
* The successful integration of the fixed income agency and derivative
trading teams into Coronation Capital;
* Coronation Properties significantly increased its profitability and
established itself as a manager of the largest listed property loan stock
company in South Africa and a major listed property unit trust.
Coronation Global
Coronation Global contributed earnings of R94 million, a decrease of 23%
over the same period last year. Staff numbers have increased to 30 as a
result of the expansion of the underlying global businesses.
Business highlights
* Growth in international equity and convertible arbitrage operations;
* Continued excellent investment performance D The Coronation Global Equity
Fund has outperformed its benchmark, the MSCI World Index, by 11,6% in
dollar terms for the year ended 31 March 2001;
The Coronation International Active Fund of Funds was the top performing
rand-based foreign fund with a return of 28,6%, compared to its benchmark,
the MSCI World Index's return of 16,6%, over the 3-year period ended 31
March 2001;
* The strengthening of the London-based international active management and
the alternative strategy (hedge funds) multi-management operations ensures
that the Group's asset management business is well positioned to deliver
superior returns and appropriate products to both South African and
international investors;
* The establishment of Coronation Energy, a company that will manage and
invest in offshore projects specialising in the generation of electricity
from gas.
Investments
The contribution to Group income from investments, including income from
African Harvest was R27 million, a decrease of 65% compared to the same
period last year. African Harvest Capital had a slower than budgeted 6
months but anticipates revenue will pick up in the 2nd half of this year.
African Harvest Fund Managers increased revenue compared to the same period
last year and all indications are that budgets will be exceeded for the full
year. Investment performance for clients was solid, as evidenced by the
number of awards received in this period. Given African Harvest's strategy,
which is to build own businesses, income from strategic investments will be
substantially down from last year. We believe African Harvest has built
sound businesses with talented people, which will generate satisfactory
earnings over the longer term.
Strate
Coronation is to commence trading within the Share Transaction Totally
Electronic (STRATE) environment with effect from 22 October 2001. A notice
to this effect will be posted to shareholders in due course.
Directorate
We are pleased to announce that Mr Malcolm Rutherford has joined the Board
as a non-executive director. Mr Rutherford is the Financial Director of
Dimension Data Holdings Plc.
Looking Forward
Coronation has established itself as a major Group in the South African
financial services and asset management sectors. We have one of the most
stable teams in the industry and are encouraged by the fact that we have not
lost any key employees. This is indicative of the depth and commitment of
our people. The Group continues to make solid profits and our focused teams
will continue to build international businesses and expand domestic
activities. We will also focus, inter alia on growing our trading activity
while adhering to strict risk management guidelines and procedures.
Coronation's healthy balance sheet places us in a strong position to
withstand the volatility and instability in financial markets. The profits
for the full year will be dependent on market conditions and Coronation's
success in trading.
For and on behalf of the Board
GMC Ryan DL Barnes P Vogel
Chairman Chief Executive Officer Company Secretary
Group INCOME STATEMENT
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months ended
31 Mar 2001 31 Mar 2000 30 Sept 2000
R million % change R million R million
Operating income 451,9 (8) 492,8 983,7
Fee income 173,5 188,7 401,0
Trading income 29,6 158,3 256,1
Arbitrage and
structures 159,5 81,0 160,0
Investment
income and
capital profits 89,3 64,8 166,6
Operating
expenses 179,6 116,6 300,7
Net interest
income 79,4 47,2 130,5
Net income
before taxation 351,7 423,4 813,5
Taxation 39,6 60,7 87,6
Net income
after taxation 312,1 (14) 362,7 725,9
Share of
Associates'
income -
attributable
to continuing
operations 24,9 (62) 64,9 98,4
Net income
contributed
before
outside
shareholders 337,0 427,6 824,3
Outside
Shareholders'
interest 28,0 14,9 31,1
Headline
earnings 309,0 (25) 412,7 793,2
Share of
Associates'
loss -
attributable
to discontinued
operations
of Mobile/Trencor - (40,7) (40,7)
Profit on sale
of subsidiary - - 12,2
Net income
attributable to
shareholders 309,0 (17) 372,0 764,7
Shares in issue:
(millions)
Ordinary shares 30,3 30,3 30,3
N ordinary shares 63,8 63,4 63,7
Total number
of shares 94,1 93,7 94,0
Weighted
average number
of shares
(millions) 94,1 93,7 93,8
Attributable
earnings
per share
(cents) 328,4 (17) 396,9 814,8
Headline
earnings
per share (cents) 328,4 (25) 440,3 845,2
Group cash flow statement
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months ended
31 Mar 2001 31 Mar 2000 30 Sept 2000
R million R million R million
Operating income
before changes
in operating assets 458,3 442,2 787,0
Net increase in operating
assets
and liabilities (630,8) (660,2) (345,5)
Cash (absorbed)/generated
by operations (172,5) (218,0) 441,5
Dividends paid (151,4) (95,4) (82,9)
Taxation paid (66,5) (40,0) (54,1)
Net cash (outflow)/
inflow from
operating activities (390,4) (353,4) 304,5
Net cash inflow from
investing activities 67,3 846,5 198,3
Net cash inflow from
financing activities 97,1 42,4 81,6
Net (decrease)/increase
in cash and
cash equivalents (226,0) 535,5 584,4
Net cash and cash
equivalents at
beginning of period 1 927,7 1 352,2 1 352,2
Exchange rate
adjustments 103,0 (22,1) (8,9)
Net cash and cash
equivalents at
end of period 1 804,7 1 865,6 1 927,7
Net income attributable to ordinary shareholders by business segment
2001 2000
% of % % of
R million total change R million total
Coronation Fund Managers 58,3 19 (11) 65,3 17
Coronation Capital 129,5 42 21 107,0 29
Coronation Global 94,3 30 (23) 122,3 33
Investments 26,9 9 (65) 77,4 21
309,0 100 372,0 100
Group Balance sheet
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months ended
31 Mar 2001 31 Mar 2000 30 Sept 2000
R million % change R million R million
ASSETS
Non-current assets
Business equipment 14,2 12,0 12,5
Investment in associates 523,2 391,0 576,0
Investments and long-term
Receivables 1 151,9 911,1 1 154,7
Deferred taxation
asset 4,4 - -
1 693,7 1 314,1 1 743,2
Current assets
Liquid and trading
assets 2 726,0 1 439,6 1 396,4
Other receivables 554,1 247,2 579,1
Cash and cash
equivalents 1 804,7 1 865,6 1 927,7
5 084,8 3 552,4 3 903,2
Total assets 6 778,5 39 4 866,5 5 646,4
EQUITY AND LIABILITIES
Equity
Ordinary shareholders'
funds 4 191,6 3 506,5 3 775,0
Outside shareholders'
interest 156,0 71,8 80,0
4 347,6 3 578,3 3 855,0
Non-current liabilities
Long-term liabilities 292,0 287,1 256,3
Deferred taxation 36,3 39,2 38,6
328,3 326,3 294,9
Current liabilities
Trading liabilities 1 448,8 495,0 778,9
Other payables 653,8 466,9 717,6
2 102,6 961,9 1 496,5
Total equity and
liabilities 6 778,5 4 866,5 5 646,4
Net asset value per
share 44,56 19 37,41 40,15
Group statement of changes in equity
Non-
Share distri- Accu-
capital and butable mulated
R million premium reserves profit
TotalOpening balance 1 October
1999 2 248,4 320,4 748,9 3 317,7
Exchange differences on translation
of foreign entities - (22,1) - (22,1)
Net gains recognised directly
in equity - 1,3 - 1,3
Net result of unbundling and
acquisition of associates (167,6) - - (167,6)
Net income attributable
to shareholders - - 372,0 372,0
Transfer associates' retained
income to
accumulated profit - (266,8) 266,8 -
Issue of share capital 5,2 - - 5,2
Closing balance 31 March 2000 2 086,0 32,8 1 387,7 3 506,5
Opening balance 1 October 2000 2 106,0 52,7 1 616,3 3 775,0
Exchange differences on
translation of
foreign entities - 117,5 (14,5) 103,0
Net income attributable
to shareholders - - 309,0 309,0
Issue of shares in subsidiaries
to outside
shareholders - 14,6 (14,6) -
Issue of share capital 4,6 - - 4,6
Closing balance 31 March 2001 2 110,6 184,8 1 896,2 4 191,6
Directors: G M C Ryan Chairman, D L Barnes Chief Executive Officer, C B
Brayshaw, P L Campher, M T Rutherford
Registered office: Ground Floor, The Bridle, 38 Wierda Road West, Wierda
Valley, Sandton Postal address: PO Box 652643, Benmore 2010 Transfer
secretaries: Mercantile Registrars Limited, 6th Floor, 94 President Street,
Johannesburg 2001 Registration number: 1902/001739/06
