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AQUILA GROWTH LIMITED
Registration number 1995/03158/06
("Aquila or "the company")
-.Net asset value per share up 22.2%
-.R54.8 million returned to shareholders
Summarised Income Statement
Year ending Year ending
28 Feb 2001 29 Feb 2000
R'000 R'000
Operating income 124 230 13 388
Operating expenditure (5 436) (4 388)
Exceptional items (3 062) (3 918)
Net income before taxation
and finance costs 115 732 5 082
Net finance income/(costs) 549 (1 219)
Net income before taxation 116 281 3 863
Taxation (87) (102)
Net income after taxation,
before (shortfall)/ surplus
arising on revaluation of
investments 116 194 3 761
Unrealised (shortfall)/surplus
arising on revaluation of
investments (65 749) 18 262
- Directors' valuation of
investments held at year end 325 386 341 812
- Directors' valuation of
- investments held at year
end plus cost of additional
investments (391 135) (323 550)
50 445 22 023
Earnings per share (cents) 32.02 13.44
Summarised Cash Flow Statement
Net cash inflow from operations 227 300 7 838
Cash flow from investing
Activities (160 381) (723)
66 919 7 115
Cash flow from financing
Activities (65 032) (13 013)
1 887 (5 898)
Cash and cash equivalents at
beginning of period 311 6 209
Cash and cash equivalents at
end of period 2 198 311
Summarised Balance Sheet
28 Feb 2001 29 Feb 2000
R'000 R'000
Capital employed
Share capital and premium 125 140 190 173
Non-distributable reserves 76 922 142 671
Retained income/(accumulated loss) 113 662 (1 840)
Ordinary shareholders' interest 315 724 331 004
Preference share capital and premium 7 000 7 000
Current liabilities 5 689 4 596
Shareholders' funds 328 413 342 600
Employment of capital
Equipment 249 213
Investments in investee companies 325 386 341 812
Current assets 2 778 575
328 413 342 600
Fully diluted net asset value per share
adjusted for capital reduction of 35 cents
per share (cents) 208.7 170.8
Fully diluted net asset value per share
(cents) 208.7 205.8
Statement of Changes in Shareholder's
Equity
Shareholder's funds at beginning of the year 331 004 302 807
Issue of shares 2 003 9580
Repurchase of shares (12 207) (1 411)
Cancellation of shares - (1 182)
Reduction in share premium (54 829) -
Net profit 50 445 22 023
Preference dividend (692) (813)
Shareholder's funds at end of year 315 724 331 004
BASIS OF VALUATION OF INVESTMENTS
1.Non-distributable reserves
Unrealised surpluses / (shortfalls) arising during the year on the
revaluation of investments are transferred (to) / from non-distributable
reserves.
2.Valuation policy
- Unlisted investments are stated at directors' valuation following
prescribed international guidelines for private equity funds. The
directors value the unlisted investments at cost until the availability of
the first set of audited accounts post completion of the investment.
- Listed investments are stated at market value at the financial year end
unless there has been a subsequent fall in value which, in the directors'
opinion, constitutes a permanent diminution in value.
ANALYSIS OF INVESTMENT PORTFOLIO
Company Business Investment %
Activities Date Owned
Global Resorts Casino Resorts 31-Jan-98 23.25
RetCorp Specialist retailer of toy and
baby goods 1-Mar-95 100.00
Rewards Customer
relationship management 12-Dec-97 26.53
House of Coffees Coffee manufacturing
and distribution 1-Mar-98 28.00
Just Fun Wholesale distributor of toy
and educational products 5-Jan-98 30.00
AquiTec Group Supply chain management software 1-Sept-00 87.00
FTN Media 1-Mar-00 72.56
AquiTec South
Africa Payroll Software 1-Sept-00 87.00
Gerber Global Business Communications 30-June-00 42.50
Company Directors' Directors' Cost of Basis of
Valuation Valuation Investment Valuation
28 Feb 29 Feb 28 Feb 2001 (R'000)
2001 2000
(R'000) (R'000)
Global Resorts 220 875 195 302 139 153 P/e multiple
RetCorp 6 500* 110 000 10 000* Discount to Nav
Rewards 24 510 24 510 24 510 Cost
House of Coffees 11 200 7 000 6 720 P/e multiple
Just Fun 6 000 5 000 11 780 P/e multiple
AquiTec Group 32 062 - 32 062 Cost
FTN 16 851 - 16 851 Cost
AquiTec South Africa 2 828 - 2 828 Cost
Gerber Global 4 560 - 4 560 Cost
Total 325 386 341 812 248 464
* The investment in RetCorp was written down from R120.9 million to R10
million as a result of the realisation of the majority of assets within
FINANCIAL OVERVIEW
The directors are satisfied with the performance of Aquila's investee
companies for the year ended 28 February 2001 as reflected by the increase
in net asset value per share from 170.8 cents to 208.7 cents and the return
to shareholders of R54.8 million by way of a capital reduction of 35 cents
per share.
Earnings per share increased from 13.44 cents to 32.02 cents as a result of
the net dividend received of R123.8 million following the realisation of the
majority of assets within RetCorp.
A total of R56.3 million was invested in new acquisitions as follows:
- R16.9 million into Forecourt Television Network (Pty) Ltd;
- R32.1 million into AquiTec Group Limited;
- R2.8 million into AquiTec South Africa (Pty) Ltd; and
- R4.5 million into Gerber Global Investments Limited.
Despite a difficult trading environment Aquila's investee companies
delivered pleasing results for the period under review. The highlights were:
- Global Resorts reinforced its position, as a leading player in the gaming
industry in South Africa, with the successful opening of its permanent
facilities. At the time of writing Caesars Gauteng had en estimated 28%
share of the Gauteng Gambling market;
- RetCorp completed the sale of the business of Appliance City, as a going
concern, to Relyant Retail Limited. This has resulted in RetCorp becoming a
focused toy and baby goods retailer operating under the Toy's "R" Us and
Reggie's brands;
- House of Coffees, and Just Fun delivered pleasing results in difficult
trading environments.
FOCUS FOR THE YEAR AHEAD
The board of Aquila remains committed to its stated investment philosophy of
acquiring investments in predominantly unlisted industrial and commercial
companies operating in high growth markets with experienced owner management
teams. The board of Aquila is also committed to the unlocking of long-term
value for its shareholders as demonstrated by the return of R54.8 million in
cash to shareholders and the buy back and cancellation of 12.8 million
shares for the period under review.
In terms of a specific repurchase offer to all shareholders, approved by the
general meeting of shareholders held on 11 April 2001, Aquila has acquired
26 815 656 ordinary shares at a price 125 cents per share for a total
consideration of R33.5 million.
For and on behalf of the Board
DH Bagg P Papadimitropoulos
Chairman Managing Director
Johannesburg
31 May 2001
Directors: DH Bagg * (Chairman)
P Papadimitropoulos (Managing Director)
JA Bell
P Dawe * +
B Dubb *
Company Secretary:
Karen du Preez CA(SA)
Private Bag X106
Bryanston, 2021
Tel: (011) 706-8928 Fax: (011) 706-6312
Website: www.aquilagrowth.com
E-mail:kdupreez@aquilagrowth.com
* Non-executive
+ British
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