| Wed 30 May 2001, 0:00 | | Wiphold - Audited Results |
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WOMEN INVESTMENT PORTFOLIO HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1996/001291/06)
("Wiphold")
WOMEN INVESTMENT PORTFOLIO HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1996/001291/06)
("Wiphold")
AUDITED RESULTS
for the year ended 28 February 2001
INCOME STATEMENTS
Group
2001 2000
R'000 R'000
Fee income 29 028 3 274
Gain/(Loss) from disposal and
revaluation of investment securities 32 077 (26 902)
Write-down in value of loans (6 149) -
Net loss from bond broking and
trading activities (785) -
Income/(Loss) from operations 54 171 (23 628)
Interest received 22 087 39 903
Interest paid (9) (948)
Dividends received 24 535 10 307
Other income 120 10
Staff costs (30 202) (10 592)
Depreciation (982) (388)
Other operating expenses (16 307) (7 809)
Profit before amortisation and
exceptional item 53 413 6 855
Amortisation of intangibles (16 718) (5 893)
Write-down in value of associate (2 597) -
Profit before taxation 34 098 962
Taxation (2 308) (8 713)
Profit/(Loss) after taxation 31 790 (7 751)
Net loss from associates (966) (434)
Minority interest - 43
Net profit/(loss) for year 30 824 (8 142)
Earnings per share (cents):
- Basic 24,3
- Headline 2,9
BALANCE SHEETS
Group
2001 2000
R'000 R'000
Assets
Non-current assets
Intangible assets 52 857 53 207
Fixed assets 5 568 3 262
Deferred tax assets 3 883 -
Associate companies 18 113 15 539
Investment securities 645 108 740 651
Loans 20 879 20 804
746 408 833 463
Current assets
Trading securities 12 057 -
Trade and other receivables 37 501 2 960
Cash and cash equivalents 189 516 191 551
239 074 194 511
985 482 1 027 974
Equity and liabilities
Equity and reserves
Issued capital 557 119 660 282
Reserves 171 267 185 852
728 386 846 134
Minority interest 181 600 169 045
Non-current liabilities
Non-interest bearing borrowing 1 774 1 777
Deferred tax liability 10 -
Investment securities 28 650 -
30 434 1 777
Current liabilities
Trading securities 12 761 -
Trade and other payables 26 126 2 584
Taxation payable 6 175 8 434
45 062 11 018
985 482 1 027 974
GROUP STATEMENT OF CHANGES IN EQUITY Revalu Accumu
Share Share ation lated
capital premium reserve profit/ Total
loss
R'000 R'000 R'000 R'000 R'000
Balance at 1 March 1999 - 669 377 262 664 7 406 939 447
Net loss for year (8 142) (8 142)
WIPHOLD shares acquired
by subsidiary company (9 095) (9 095)
Deficit on revaluation of listed and
unlisted investments (34 539) (34 539)
Prior year adjustment to correct
redemption valuation of WIP BV
Induserv minority interest (41 537) (41 537)
Balance at 29 February 2000 - 660 282 186 588 (736) 846 134
Net profit for year 30 824 30 824
Preference dividend paid
by subsidiary (1 916) (1 916)
WIPHOLD shares acquired
by subsidiary company (26 178) (26 178)
Issue of B ordinary shares - 6 208 6 208
Cash distribution (83 193) (83 193)
Surplus on revaluation of listed and
unlisted investments 4 887 4 887
Transfer from revaluation reserve on
disposal of investment (48 380) (48 380)
Balance at 28 February 2001 - 557 119 143 095 28 172 728 386
SUMMARY CASH FLOW STATEMENTS
Group
2001 2000
R'000 R'000
Cash flow from operations 4 415 24 238
Cash flow from investing activities 70 538 (154 775)
Cash flow from financing activities (76 988) (4)
Net (decrease) in cash and cash equivalents (2 035) (130 541)
Cash and cash equivalents at beginning of year 191 551 322 092
Cash and cash equivalents at end of year 189 516 191 551
GENERAL REVIEW
WIPHOLD's strategy remains unchanged and, by April 2002, it should have
realised its non-core listed and unlisted investments with the intention of
utilising the proceeds to make acquisitions in or achieve consolidation with
financial services businesses whose activities are complementary with those
of the group. Any such material acquisition will require the approval of
shareholders and should no suitable acquisition have been made, cash will be
returned to shareholders. This does not preclude the possibility that cash,
surplus to that required for approved acquisitions, might be returned to
shareholders prior to April 2002.
The planned restructuring from an investment holding company into an
operational financial services business is on track and the group is
intensifying its efforts to find complementary acquisitions. The ongoing
rationalisation of the listed portfolio has left Alexander Forbes and
Bidvest as the only significant investments on hand at 28 February 2001.
Disposals during the year realised an aggregate consideration of R114,9
million at a profit of R37,2 million.
The group's major subsidiary, Wipcapital, generated R29,0 million of fee
income during the year with contributions from all advisory divisions.
Wipcapital has made satisfactory progress in the establishment of its funds
management business and it continues to develop its profile and presence in
the markets in which it operates.
The restructuring and the way forward outlined below have been supported in
the recommendations made by JP Morgan as part of its recent consultation to
WIPHOLD on creating shareholder value.
PORTFOLIO REVIEW
The investments in African Media Entertainment, Specialised Outsourcing,
Brait, African Bank and OSI Holdings were disposed of during the year. Beige
continues to be suspended from trading and its value has been written-down
to R nil.
Restrictions, which expire in November 2001 and April 2002, apply to the
group's investments in Bidvest and Alexander Forbes respectively. In the
event that these restrictions can be lifted earlier steps may be taken to
realise the investments prior to these dates.
Capitalised interest amounting to R6,2 million on loans advanced to Rubico
Holdings SA (Pty) Ltd and to the WIPHOLD Investment Trust (in respect of its
investment in Africa on Air (Pty) Ltd via WIP Media (Pty) Ltd), has been
written-off. The investment in Wipam has been written-down to its fair value
of R9,5 million.
In terms of pre-existing commitments WIPHOLD made additional investments in
the Brait Technology and Innovation Fund I and in Afrisun Leisure
Investments.
The valuations of all the investments have been assessed individually and
each is considered to be held at its fair value at this time.
The investment in Infrastructure Finance Corporation ("INCA") is currently
considered to be a core investment and WIPHOLD is considering opportunities
to leverage this investment as part of its financial services strategy.
The Corporate Finance division of Deloitte & Touche have commenced an
exercise to value three unlisted investments in preparation for their
disposal. The other unlisted investments will remain in the group's private
equity portfolio until such time as their value can be realised.
COMPOSITION OF NET ASSETS 28 February 29 February
2001 2000
R'm R'm
Listed investments
Alexander Forbes 299,4 249,2
Bidvest (net of minority interest) 11,9 51,7
Other investments 0,4 129,3
Listed shares - short position (28,7) -
283,0 430,2
Unlisted investments
Afrisun Leisure Investments 8,1 4,0
Brait Technology and Innovation Fund I 6,5 4,4
Ericsson SA 10,1 10,1
INCA 14,6 14,6
Preference shares 100,0 100,0
Zonwabise Ltd 4,2 -
Rubico Holdings 6,5 6,6
150 139,7
Loans 20,9 20,8
Cash and cash equivalents 189,5 191,5
Other net assets 84,9 64,0
Net assets 728,3 846,2
INVESTMENT RETURNS
28 February 29 February Change
2001 2000
cps cps
WIPHOLD net asset value ("NAV") 582 585(1) (2) (0,0%)
WIPHOLD share price 355 385(1) (7,8%)
JSE Financial & Industrial Index (8,3%)
JSE Financial Index 9,4%
Notes:
NAV at 29 February 2000 was previously reported as 679 cps. For comparative
purposes this figure has been adjusted as follows:
(1) Reduced by 62 cps for the cash distribution paid to shareholders in June
2000.
(2) Reduced by 32 cps for the prior year adjustment related to an error in
valuing the minority interest in Bidvest.
The NAV of 582 cps at 28 February 2001 is slightly lower than the
comparative NAV of 585 cps of a year ago.
* The current year's NAV was positively affected by 18 cps through the buy
back of 7 747 744 WIPHOLD shares, purchased at an average price of 338 cps.
* The net increase in the value of the listed portfolio added 4 cps to the
NAV.
* The income statement profit of R30,8 million includes a gain of R48,4
million relating to the disposal of African Bank and which was included in
the revaluation reserve and NAV, at 29 February 2000. Excluding this gain,
the income statement reflects a loss of R17,6 million which had the effect
of reducing NAV by 14 cps in the current year.
WIPCAPITAL REVIEW
Wipcapital has established a credible profile in the financial services
sector in the first year and a half of its operation. Its activities
comprise an integrated advisory business and a specialised funds management
business.
The advisory business generated fees of R29,0 million in difficult markets
characterised by regulatory changes and low domestic corporate activity. A
number of significant mandates were concluded by the derivatives structuring
and debt products teams and, as part of the JP Morgan consortium,
Wipcapital's corporate finance team is participating in the joint mandate to
advise the South African Government on the Initial Public Offering and
listing of Telkom shares.
Progress has been made and strategic alliances secured for several of the
funds. Trading on a limited scale has commenced in the Hedge Fund and
further investments by the Private Equity Fund are imminent. Research into
and innovation of new fund opportunities are ongoing. The key objective for
the next six months will be to accelerate the development of the specialised
funds management business.
Wipcapital acquired a 49,9% shareholding in Legae in March 2000. As an
empowerment profiled stock broking firm Legae is increasingly acting as a
bridge between the public sector and the institutional investment community.
Through its ability to facilitate this interaction and its niche research,
Legae is able to add value to its clients.
In September 2000 Wipcapital commenced a bond broking business in
partnership with Legae. In the latter part of last year Wipcapital acquired
100% interests in two small, established treasury outsourcing businesses.
These two have been combined and are marketed under the WIP Treasury
Solutions banner.
Summary of Wipcapital results (which are incorporated in the group income
statement)
28 February 29 February
2001 2000
R'000 R'000
Advisory fee income 29 028 3 274
Net trading loss and
scrip borrowing expenses (1 645) -
Interest and preference dividends 31 820 15 269
Operating costs (34 759) (9 782)
Amortisations (7 314) (1 493)
Operating income before taxation 17 130 7 259
Taxation (3 319) (2 065)
Income after taxation 13 811 5 194
Intra-group fees, loss from associate and loss on WIPHOLD share buy back
have been excluded.
WIPAM
The past 12 months were characterised by extreme market volatility affecting
bonds, equity and currency markets. It is pleasing to report that even under
such difficult conditions Wipam's portfolios performed well. In particular
the branded gilt fund was ranked in the top quartile over the year. In a
sector where consolidation has become an industry phenomenon and is
affecting both large and small asset managers, Wipam managed not only to
retain all its mandates but grew assets under management by R277 million to
R703 million.
EMPOWERMENT
WIPHOLD continues to support empowerment at a shareholder level, at an
employee level and at a procurement level. WIPHOLD remains committed to its
core principle of economically empowering women while actively striving
towards maximising shareholder value. Empowerment at all levels constitutes
the critical factor for companies to demonstrate their commitment towards
enabling previously disadvantaged people the opportunity to participate in
the economy. Short-term strategies that fail to recognise the need for
companies to advance the wider interests of their societies and stakeholders
will have only a limited lifespan.
In line with the group's empowerment philosophy the WIPHOLD Investment Trust
has allocated 20% of its earnings to projects assisting women and children.
The four areas identified for assistance are: HIV/Aids, domestic violence,
child welfare and women self-help projects. During the year the
beneficiaries of the Trust participated in a cash distribution of R4,3
million.
At an employee level, the WIPHOLD group's professional staff composition is
44% black and 49% female.
Finally, the WIPHOLD group has an aggressive procurement policy whereby it
actively seeks out empowerment suppliers.
SHARE CAPITAL
During the year, a further 2 254 558 "B" ordinary shares were issued to the
WIPHOLD Employee Share Incentive Trust at an average price of 279 cps.
GENERAL REPURCHASE OF "B" ORDINARY SHARES
In terms of the general authority granted to directors for the repurchase of
"B" ordinary shares, Wipcapital acquired an additional 7 747 744 shares to
bring the total number of shares held to 9 739 144 shares. This represents
7,8% of the total "B" ordinary shares in issue. In the group financial
statements the repurchased WIPHOLD shares are treated as treasury shares and
are set-off against share premium as required by Generally Accepted
Accounting Practice.
PRIOR YEAR ADJUSTMENT
On 5 February 2001 WIPHOLD announced to its shareholders that there was an
error in its audited financial statements for the years ended 28 February
1998, 28 February 1999 and 29 February 2000.
The error occurred in the calculation of the redemption value of the "B"
preference shares in WIP BV Induserv (Pty) Ltd, the vehicle used to house
WIPHOLD's interest in Bidvest. The error resulted in an incorrect allocation
between the minority interest and revaluation reserve on the respective
balance sheets. This caused the NAV of WIPHOLD to be overstated by R41 537
000 (equivalent to 32 cps) at 29 February 2000. There was no impact on the
income statement.
The minority interest and revaluation reserve balances at 29 February 2000
have been restated to correct this error.
COMMITMENTS AND CONTINGENT LIABILITIES
In terms of an agreement between Wipcapital and The Standard Bank of South
Africa Limited ("SBSA"), Wipcapital has guaranteed cheque marking and
overdraft facilities for Legae with SBSA to the amount of R23 000 000.
Wiphold has the following investment commitments:
28 February 29
February
2001 2000
R'000 R'000
Brait Technology and Innovation Fund I 2 422 5 628
Afrisun Leisure Investments (Pty) Ltd 6 467 10 566
The group has entered into property rental
agreements which commit it to the following rentals:
Within one year 2 846 1 252
Thereafter 18 981 947
In terms of an agreement between Wipcapital and SBSA, Wipcapital has
provided surety for one of its subsidiaries at 28 February 2001. The surety
was for an amount of R50 000 000 and was given in respect of the
subsidiary's scrip borrowing activities. Subsequent to the year-end SBSA
released Wipcapital from this obligation.
EARNINGS PER SHARE
Historically WIPHOLD has presented only the change in NAV as a measure of
the group's financial performance. Earnings per share for the full year are
presented for the first time as WIPHOLD transforms into an operational
financial services group. As it is still in a transition phase, neither eps
nor NAV are truly reflective measurements of the group's current
performance.
Eps of 24,3 cents and headline earnings per share of 2,9 cents are
calculated on a weighted average number of shares in issue for the year of
126 793 000.
DIVIDENDS
A cash distribution of 62 cps was paid to shareholders on 26 June 2000. This
was charged to share premium.
No dividends have been declared.
THE WAY FORWARD
WIPHOLD is committed to play a significant role in creating the leading
empowerment financial services group in the industry and this will require
critical mass. Efforts are been intensified to achieve consolidation within
the industry and find acquisitions that are compelling financially, are
synergistic with the existing activities of the group and that have a strong
empowerment appeal.
Wipcapital will seek to expand its advisory business from its existing
corporate and public sector client base into both the investor and private
sector markets. Significant effort will continue to be made to implement a
wider range of specialist funds.
For and on behalf of the board
Gloria Serobe (Chairman)
Louisa Mojela (Chief Executive Officer)
Johannesburg
30 May 2001
BOARD OF DIRECTORS
Executive: Louisa Mojela, Nomhle Canca
Non-executive: Gloria Serobe (Chairman), Charmaine Mabuza, Nomsa Mazwai,
Dolly Mokgatle, Fazila Montsi, Sindi Zilwa
COMPANY SECRETARY
Excelsior Management Services
REGISTERED ADDRESS
61 Central Street, Houghton, 2041
Postnet Suite 169, Private Bag X2600, Houghton 2041
Telephone : (011) 715 3600 Fax : (011) 715 3612
www.wiphold.com
