| Fri 1 Jun 2001, 0:00 | | Furnex Capital - Interim Result |
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FURNEX CAPITAL LIMITED
(formerly Frame Group Holdings) (Incorporated in the Republic of South
Africa)
(Registration number 1945/018543/06) ("FurnCap" or "the company")
Group interim results for the six months ended 31 March 2001
Financial highlights
* Attributable earnings per share 10,13 cents, up 15,6%
* Net profit after tax of R7,9m, up 27%
* Throughput R246m
Furnex Capital (Furncap), a value-added hub facilitating the supply of goods
at negotiated bulk discounts, is the market leader in providing trade
finance, instalment credit and financial services to independent furniture
and appliance retailers in South Africa. Furnex has built up a loyal
membership base over the last 40 years, enabling independent retailers to
achieve pricing models in line with major retail chains.
The eighteen months since listing on the JSE has seen Furnex move from away
from a co-operative based buying facility towards a branded, automated e-
business trading hub, leveraging off its membership base to secure a number
of significant new revenue streams. The members will benefit from full
Furnex branding and comprehensive retail promotions and marketing strategy,
whilst Furnex will gain increased income from commissions on sales, supplier
promotions and bulk purchase discounts.
Financial commentary
Net profit after tax for the six months under review increased 27% to R7,9m,
from R6,2m. Attributable earnings per share of 10,13 cents increased by
15,6% on 8,76 cents for the same period last year. Fully diluted earnings
per share increased 27% to 9,03 cents, compared to 7,12 cents earnings per
share for six months ended March 2000.
Throughput, the amount of trade transactions processed on behalf of members,
of R246m increased by 16%, compared to R205 million for the same period last
year.
Furnex Online
The implementation of Furnex Online, the fully operational business-to-
business e-commerce site, has provided a new business channel for Furnex,
significantly increased throughput, improved distribution and reduced costs.
Furnex Online is already used by 258 of the Group's members, enabling
suppliers to trade with members and generating new revenues, with over R5
million worth of transactions to date.
In addition, Furnex Online's advertising sites, booked directly online, have
added further revenue streams and introduced a more efficient buying
process.
Furnex-at-Home
The roll-out of the consumer facing retail trading hub, Furnex at Home,
utilises the Furnex on-line hub to sell to the consumer, allowing customers
to enquire about a promotion or product and the enquiry being fed straight
to the nearest member to conclude the transaction. This provides a cash-
based revenue stream, as well as opportunities for joint promotions, without
the costs involved in owning the process.
Providing finance
Furnex's joint venture with Credcor has shown very strong growth, with an
increase in the monthly turnover of goods financed by Credcor through Furnex
retailers. The recent acquisition of Credcor by BoE has not affected the
Group's joint venture agreement.
Store branding
The Group has begun comprehensive branding with all its member stores. The
Furnex brand will improve the Group-wide efficiency of retail marketing
campaigns and increase turnover for the retailers through Furnex advertising
campaigns.
MTN Alliance
Furnex's strategic alliance with MTN, which enables retailers to provide in-
store cellular concessions, has shown good growth. The MTN alliance provides
retailers with the means to distribute pre-paid airtime on-line, a
significant security advantage. The development of the MTN alliance is a key
priority for the Group.
Prospects
Furnex aims to be the pre-eminent electronic trading hub in the retail
furniture industry. The roll-out of the consumer facing retail trading hub,
Furnex-at-Home, is expected to increase revenue during the remainder of
2001.
The development of the financial services side of the business, with
products such as customer protection insurance, provident funds, medical aid
and funeral benefits, is an area of future growth.
The Group's earnings for the full year are expected to be inline with the
interim results of the six months ended 31 March 2001.
Dematerialisation of Shares
Furnex converted to the STRATE system on 9 April 2001 as part of the JSE's
initiative to progress to an electronic settlement environment for share
transactions.
For and on behalf of the board
David Brouze Mark Stewart
Chief Executive Officer Financial Director
31 May 2001
REGISTERED OFFICE TRANSFER SECRETARIES
19 Girton Road, Parktown, Johannesburg 2001 Mercantile Registrars Limited,
11 Diagonal Street, Johannesburg 2001
Abridged balance sheet
Unaudited Audited Unaudited
Group Group Group
March Sept March
2001 2000 2000
R'000 R'000 R'000
ASSETS
Non-current assets
Associates 21 580 18 865 494
Property, plant and equipment 3 007 2 129 1 869
Current assets 117 736 116 242 120 631
Trade and other receivables 96 149 91 060 88 820
Instalment debtors 15 262 18 296 16 519
Cash resources 6 325 6 886 15 292
Total assets 142 323 137 236 122 994
EQUITY AND LIABILITIES 39 552 31 594 33 190
Capital and reserves
Share capital 23 576 23 576 21 494
Reserves 15 976 8 018 11 696
Non current liabilities
Deferred taxation 1 433 1 114 -
Shares for vendors 8 671 8 671 -
Current liabilities 92 667 95 857 89 804
Trade and other payables 86 845 92 509 87 326
Taxation 5 822 3 348 2 478
Total equity and liabilities 142 323 137 236 122 994
Abridged income statement
Unaudited Audited Unaudited
Group Group Group
March Sept March
2001 2000 2000
6 months 12 months 6 months
R'000 R'000 R'000
Profit from operations 7 338 12 296 7 957
Share of associate
company income 1 520 2 912 494
Net financing revenue 1 896 2 635 302
Profit before taxation 10 754 17 843 8 753
Taxation (2 796) (4 496) (2 478)
Retained profit for the year 7 958 13 347 6 275
Shares in Issue 78 588 78 588 71 644
Attributable earnings
per share (cents) 10,13 16,98 8,76
Fully diluted earnings
per share (cents) 9,03 15,15 7,12
Alliance partners
MTN
CREDCOR
(Formerly Consumer Credit Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1996/010400/06) ("Credcor")
