| Tue 29 May 2001, 0:00 | | Kairos Industrial Holdings Limited - Audited Resul |
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KAIROS INDUSTRIAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/002927/06)
Audited results for the financial year ended 28 February 2001
CONSOLIDATED INCOME STATEMENT
Year Year
ended ended
28 February 29 February
R'000 2001 2000
Turnover 45 218 23 253
- on continuing operations 45 218 13 630
- on operations sold/discontinued - 9 623
Operating profit/(loss) 2 431 (5 277)
- on continuing operations 2 431 (3 585)
- on operations sold/discontinued - (1 692)
Interest on loan to joint venture 1 026 2 673
Depreciation (3 036) (1 153)
Finance costs (1 817) (1 281)
- on continuing operations (1 817) (978)
- on operations sold/discontinued - (303)
Exceptional items - revenue
- Retrenchment costs - (646)
Dividend received 1 682 -
Profit/(loss) before taxation
and equity accounted profit 286 (5 684)
Taxation - (277)
Profit/(loss) after taxation and
before equity accounted profit 286 (5 961)
Equity accounted profit/(loss)
of joint venture - (1 189)
Headline profit/(loss) after
taxation and equity accounted
profit/(loss) 286 (4 772)
Exceptional items - capital
- Net profit/(loss) on
deregistration and
disposal of subsidiaries - (5 006)
- Section 311 compromise benefit 1 071 -
Net profit/(loss) attributable to
ordinary shareholders 1 357 (9 778)
Number of shares on which
profit/(loss) per share is based
(000's) 252 085 98 224
Headline profit/(loss) per ordinary
share (cents) 0.11 (4.86)
Earnings/(loss) per ordinary
share (cents) 0.54 (9.95)
STATEMENT OF CHANGES IN EQUITY
for the year ended 28 February 2001
Non- Total
Retained distributable Stated shareholders'
R'000 losses reserves capital funds
Balance as at
1 March 2000 (185 505) 1 203 187 219 2 917
Shares issued in
terms of Section
311 of the
Companies Act - - 10 046 10 046
Conversion of debt
to equity - - 12 875 12 875
Earnings attributable
to shareholders 1 357 - - 1 357
Balance as at
28 February 2001 (184 148) 1 203 210 140 27 195
CONSOLIDATED BALANCE SHEET
28 February 29 February
R'000 2001 2000
Capital employed
Stated capital and reserves 27 195 2 917
Suppliers for share issue - 9 943
Interest-bearing debt
- long-term 976 1 200
- short-term 3 562 19 884
31 733 33 944
Employment of capital
Patents and intangibles 3 204 -
Fixed assets 11 453 9 083
Investment in joint venture - 7 487
Investments 17 837 16 062
Other non-current assets 790 5 341
Current assets 12 908 5 015
Non interest-bearing current liabilities (14 459) (9 044)
31 733 33 944
Shareholders' funds per share (cents) 10.8 3.0
CONSOLIDATED CASH FLOW
Year Year
ended ended
28 February 29 February
R'000 2001 2000
Net cash flow generated by operations 11 197 1 186
Cash utilised by operations 8 624 (72)
Investment income received 2 709 2 673
Interest paid (136) (1 281)
Taxation paid - (134)
Net cash flow generated by
investing activities (7 629) 10 506
Purchases of intangibles and
fixed assets (7 816) (2 266)
Proceeds on disposal of assets 187 16 495
Net proceeds received from disposal
of subsidiaries - (3 723)
Net cash flow from financing activities (2 350) (8 835)
Capital raised 22 920 -
Net decrease in interest-bearing loans (25 270) (8 835)
Change in cash and cash equivalents 1 218 1 408
Cash and cash equivalents at the
beginning of year 626 (782)
Cash and cash equivalents at the
end of year 1 844 626
COMMENTARY
The group has continued to pursue its consolidation and restructuring during
the year under review. As was previously reported, the full restoration of
the company's fortunes will be a lengthy process and the first signs will
become apparent as a far leaner group edges back into profitability. It is a
source of pride therefore, that for the first time in 11 years the group has
shown a profit.
OVERVIEW OF RESULTS
GENERAL
The offer of compromise made by Kairos Mining (Pty) Ltd, a wholly-owned
subsidiary, to its creditors in terms of section 311 of the Companies Act,
was finalised.
An interest-bearing debt conversion to equity was approved at a general
meeting of shareholders held on 28 February 2001. This conversion was done
by way of the issue of 128745360 new Kairos ordinary shares in settlement of
the R12.9 million of debt. This issue of new shares resulted in a change of
control. The shareholders in general meeting also unanimously approved the
resolution that the offer to minorities in terms of article 8.1 of the
Securities Regulation Code be waived.
The financial results for the 2001 financial period of the Joint Venture
have been proportionately consolidated as opposed to the equity accounting
basis applied in the previous reporting periods.
BASIS OF PRESENTATION
The financial statements are presented on a going concern basis.
INCOME STATEMENT
The group's cost structure has been further reduced thanks to efficient
supervision and control of its affairs and it has as a result, realised a
profit in the current financial year. Ongoing material savings are being
achieved.
Turnover for the year was R45.2 million and a net profit of R1.357 million
was achieved in the year under review.
BALANCE SHEET
Share Capital
The issued share capital was increased from 98 224 239 no par value shares
to 252 085 399 no par value shares, as a result of:
- shares issued relating to a compromise reached in terms of Section 311 of
the Companies Act 25 115 800
- conversion of R12.9 million debt into equity 128 745 360
The stated share capital increased from R187 million to R210 million.
Investments
After conducting appropriate procedures the directors are satisfied that the
values of the group's investments are fairly stated.
REVIEW OF ACTIVITIES OF OPERATIONAL SUBSIDIARIES
MAJOR OPERATIONS
(a) Witbank Brickworks(1961) (Pty)Limited
As predicted, performance exceeded expectations with increased market share
and profits
Strong management and improved productivity increased profits over the past
year, and prospects for further improvement in the coming year appear good.
(b) BroKrew (Pty)Limited
BroKrew continues to supply ventilation equipment to the local mining
industry. Specific emphasis has been placed on the development of general
industrial applications, as well as the expansion of the export market.
BroKrew has already made significant inroads into various southern African
developing countries, including Mozambique, Tanzania and Zambia, which hold
exhilirating prospects for the future. It is the directors' and management's
view that this company should again produce acceptable results in the coming
year.
SECONDARY OPERATIONS
(c) Construction & Mining Equipment Company (Pty)Limited
The successful marketing of the "Survivair" refuge chambers and oxygen
candles to the mining industry locally and abroad continues with exports to
Australia being a significant contributor to earnings. Given the current
drive for safety in our mines, the prospects for this product range in the
coming financial year are very exciting.
(d) Ten Cradock Avenue (Pty)Limited - Witbank coal reserve
Recent surveys of the reserve indicate that the coal seams consist of high-
quality low phosphate coal that can be economically mined.
Management is currently negotiating with a reputable consortium to mine the
coal reserve.
CONTINGENT LIABILITIES AND SUBSEQUENT EVENTS
Further to an announcement to shareholders dated 5 July 2000 and subsequent
to the financial year end, the contingent liability of R8.861 million in
respect of suretyships issued by certain subsidiary companies in favour of
The Standard Bank Group has been amicably settled with no further exposure
for Kairos.
STRATEGY AND PROSPECTS
The group's strategy is simple. Short term, management will focus on its
core revenue-producing businesses until the group's financial position is
considerably strengthened. Medium term, management, with the support of
highly skilled advisors, will focus more and more on turnaround business
opportunities.
By order of the board
L Jonker
Pretoria
Secretary
29 May 2001
Directors: WL van Deventer (Executive Chairman), JJ de W Mulder, L Jonker,
CWJ Milligan* *British
Registered office: 1111 Church Street, Hatfield 0083, Pretoria
Transfer secretaries: Mercantile Registrars Limited, 11 Diagonal Street,
Johannesburg 2001
Sponsor: Bridge Capital Services (Pty) Limited, The Woodlands, Woodmead,
Sandton.
