| Mon 14 May 2001, 0:00 | | Million Air Charter Audited Consolidated Results F |
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ended 28 February 2001
Million Air Charter Limited
(Registration number 1993/000092/06)
("Million Air" or "the company")
Audited consolidated results for the financial year ended 28 February 2001
INCOME STATEMENTS
for the year ended 28 February 2001
2001 2000
R R
Income
Gross revenue 37 877 308 38 676 306
Other operating income (407 646) 129 271
Staff costs (3 056 640) (3 180 136)
Depreciation and amortisation expense (5 900 337) (3 287 692)
Other operating expenses (29 677 907) (24 263 394)
Operating (loss)/profit (1 165 222) 8 074 353
Interest received 133 687 767 010
Finance costs (2 725 890) (1 824 887)
(Loss)/Profit before taxation (3 757 425) 7 016 478
Taxation 1 047 973 (1 440 331)
(Loss)/profit after taxation (2 709 452) 5 576 147
Earnings per share (cents) (4,93) 8,85
Note: The figures of the 2000 year are restated to be classified by nature
(and not by function as published in the prior year). The difference of
R2,00 is due to rounding.
BALANCE SHEETS
at 28 February 2001
2001 2000
R R
Assets
Non-current assets 40 018 518 45 807 297
Property, plant and equipment 40 017 518 45 532 297
Intangible assets 1 000 275 000
Current assets 6 860 022 7 668 209
Trade and other receivables 4 909 346 4 684 404
Taxation 134 999 134 999
Bank balances 1 815 677 2 848 806
Total assets 46 878 540 53 475 506
Equity and liabilities
Capital and reserves 18 977 402 22 283 795
Issued capital 9 975 248 9 975 231
Distributable reserve 9 002 154 12 308 564
Non-current liabilities 18 379 503 27 322 377
Long-term liabilities 14 613 754 23 109 107
Deferred taxation 3 765 749 4 213 270
Current liabilities 9 521 635 3 869 334
Taxation 423 423
Trade and other payables 4 892 872 3 238 691
Current portion of long-term
liabilities 4 163 048 501 263
Bank overdraft 465 292 128 957
Total equity AND liabilities 46 878 540 53 475 506
Cash flow statementS
for the year ended 28 February 2001
2001 2000
R R
Cash flow from operating activities 2 957 419 3 179 866
Cash receipts from customers 35 840 574 37 543 703
Cash paid to suppliers and employees (30 290 952) (32 820 046)
Cash generated by operating activities 5 549 622 4 723 657
Interest received 133 687 767 010
Interest paid (2 725 890) (1 824 887)
Taxation paid - (485 914)
CASH FLOW FROM INVESTING ACTIVITIES 506 668 (23 201 260)
Expenditure to maintain operating capacity
Property, plant and equipment acquired (4 123 357) (13 918 760)
Proceeds of disposals of property,
plant and equipment 4 630 025 9 075 507
Expenditure for expansion
Property, plant and equipment acquired - (18 083 007)
Subsidiaries acquired - (275 000)
CASH FLOW FROM FINANCING ACTIVITIES (4 833 551) 15 929 446
Capital raised 17 31
Loans raised 3 661 785 501 263
Loans repaid (8 495 353) 15 428 152
Decrease in cash and cash equivalents (1 369 464) (4 091 948)
Cash and cash equivalent at
beginning of year 2 719 849 6 811 797
Cash and cash equivalents at
end of year 1 350 385 2 719 849
NOTE TO THE CASH FLOW STATEMENTS
Cash generated by operating activities
Net (loss)/profit before taxation (3 757 425) 7 016 478
Adjustments for:
Depreciation 5 900 337 3 287 692
Interest received (133 687) (767 010)
Finance costs 2 725 890 1 824 887
Profit on disposals of property,
plant and equipment (892 226) (518 701)
Other non-cash items 277 494 (37 581)
4 120 383 10 805 765
Movements in working capital
Increase in trade and other receivables (224 942) (1 132 604)
Increase/(decrease) in trade and
other payables 1 654 181 (4 949 504)
5 549 622 4 723 657
RECONCILIATION OF CASH AND
CASH EQUIVALENTS
AT 29 FEBRUARY 2000
Cash and cash equivalents
- as reported last year - 2 848 806
Outstanding cheques at year-end
- were reported as part of operating
activities (trade and other payables) - (128 957)
Cash and cash equivalents at
end of year - 2 719 849
COMMENTS
1. General review of directors
The audited results have been issued without qualification of opinion.
The company's business and operations and the results thereof are
reflected in the attached financial statements. No material transaction
other than the acquisition detailed in paragraph 2 below has occurred
between the accounting date and the date of this report.
Million Air is an aircraft outsourcing company to airlines, with a charter
and helicopter division in general aviation.
The past year has been difficult due to regional circumstances beyond our
control. We took a number of cost cutting actions to ensure the viability of
the company and vigorously pursued the reduction of debt. We also structured
our maintenance program to a more cost effective "time and materials" basis,
once both aircraft were fresh out of major "C" checks (service checks").
In spite of this, the results for the year have been disappointing and
have fallen short of expectations largely due to a loss on foreign exchange
and instability in the region. The invasion of farms in Zimbabwe has not
bode well for tourism and business confidence in the whole Southern African
region. Our two airliners were primarily servicing the booming tourist
industry into Zimbabwe (Victoria Falls), through a lease contract with
Zimbabwe Express Airlines and supplementary flights for Air Zimbabwe.
Regrettably the former has ceased to operate, resulting in a large bad debt
and the latter cutting back on flight frequencies due to a reduction in
tourism in the region, producing low utilisation of our aircraft. The net
effect was that new markets had to be found for the aircraft in West and
Central Africa, taking a number of months to establish, culminating in us
flying for Kenya Airways and Ghana Airways.
Although the company has been under tremendous pressure this past year, it
has still maintained its high standard of service excellence and quality,
which has been rewarded by again winning the prestigious "Year 2000 Diners
Club/Asata" award, as the Best Charter Company in South Africa, for the
third time since its inception four years ago.
2. RECENT ACQUISITION
In an announcement made on 26 April 2001, shareholders were advised that a
consortium ("the consortium") had acquired control of the company and in
terms of the securities regulation panel code, the consortium would be
making an offer to shareholders to acquire their shares at 19 cents per
share ("the offer"). Full details of the offer are contained in a circular
to shareholders dated 14 May 2001.
3. FINANCIAL EFFECTS OF THE OFFER
The table below sets out a comparison of the financial effects on a
shareholder of one Million Air share accepting the offer or remaining a
shareholder of Million Air:
Percentage
Not change if
Accepting accepting the offer
the offer Notes the offer Notes is accepted
(cents) (cents)
Earnings 1,14 1 (4,93) 2 123,12
Net asset value 19 3 28,28 4 (48,84)
Market value 19 3 16 5 18,75
Notes:
1. The cash proceeds of accepting the offer invested at 6% after tax.
2. Loss per Million Air share for the year ended 28 February 2001.
3. Cash offer per Million Air share.
4. Net asset value per Million Air share at 28 February 2001.
5. Market value per Million Air share on 17 April 2001.
4. FUTURE PROSPECTS
The consortium has considerable experience in the charter business and
propose to review Million Air's business model, concentrating primarily on
the following aspects of the business:
* ensuring that the infrastructure of the business is compatible with the
nature of Million Air's business;
* exploit the significant opportunities in the local charter business
particularly between the larger hubs in South Africa;
* use the revamped Lanseria airport as a convenient base from which to
service its clients; and
* expand the existing charter business into Africa.
5. DIVIDENDS
In view of the need to retain working capital for an anticipated increase in
future revenue and resulting levels of accounts receivable, no dividend has
been declared and none is recommended.
Johannesburg
14 May 2001
DIRECTORS
The board of directors has been reconstituted as follows:
G J R Clarke - appointed 25 April 2001 (Joint Managing Director), C M R
Talevi - appointed 25 April 2001 (Joint Managing Director), K Geldenhuis*, J
J Botha, M C v Buuren, S Geldenhuis, J A Geldenhuis - resigned 25 April
2001, S Young - resigned 8 May 2000, C Artemides - resigned 26 April 2001,
*K Geldenhuis has resigned as Managing Director but remains a director of
the board.
SECRETARY
The secretary of the company is J J Botha, whose business and postal
addresses are:
22, 11th Avenue, Rivonia. PO Box 6119, Rivonia 2128.
AUDITOR
Nico van der Smit, who has subsequently merged with De Wet Auditors.
PO Box 158, Krugersdorp 1740. (011) 660-6600.
TRANSFER SECRETARIES
Mercantile Registrars Limited; 8th Floor, 11 Diagonal Street, Johannesburg
2001.
PO Box 1053, Johannesburg 2000. (011) 370-5000.
SPONSOR
Sasfin Bank Limited, 13-15 Scott Street, Waverley.
PO Box 95104, Grantpark 2051. (011) 809-7500
