| Fri 1 Jun 2001, 0:00 | | Amb Holdings Limited - Group Interim Results |
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(Incorporated in the Republic of South Africa)
(Registration number 1995/0033054/06)
GROUP INTERIM RESULTS
for the 6 months ended 31 march 2001
HIGHLIGHTS
Profit before tax up 34%
Attributable income up 13%
Fully diluted headline earnings per share up 10%
Net asset value per share up 10% to R10,40
INCOME STATEMENTS
6 months
6 months ended Year
ended 31 March ended
31 March 2000 30 Sept.
2001 (Unaudited) 2000
% (Unaudited) Restated* (Audited)
change R'000 R'000 R'000
Non-banking revenue 144 218 79 549 142 617
Banking revenue 47 620 64 642 130 391
Total revenue 33,0 191 838 144 191 273 008
Provision for bad/doubtful debts:
- Specific provision - - (7 332)
- General provision - (3 000) (1 854)
Insurance premiums paid - - (11 858)
Net operating revenue 35,9 191 838 141 191 251 964
Operating expenses
- recurring (69 697) (54 223) (100 917)
- non-recurring - - (10 217)
- new business units (5 567) - (11 968)
Net income before taxation 34,0 116 574 86 968 128 862
Taxation
- current (6 589) (18 586) (16 916)
- deferred 7 230 - 3 486
Net income after taxation 71,4 117 215 68 382 115 432
Income from associate companies (7 122) 28 397 28 708
Attributable to outside shareholders 1 853 1 964 4 782
Net income attributable to
ordinary shareholders 13,4 111 946 98 743 148 922
Earnings per share (cents) 10,0 92,5 84,1 126,8
Fully diluted headline earnings
per share (cents) 10,1 91,5 83,1 124,8
Weighted average number of shares
in issue ('000) 121 013 117 415 117 415
ABRIDGED CASH FLOW STATEMENTS
6 months 6 months Year
ended ended ended
31 March 31 March 30 Sept.
2001 2000 2000
(Unaudited) (Unaudited) (Audited)
R'000 R'000 R'000
Cash flows from trading activities 366 152 (386 612) (332 592)
Cash flows from investment activities 103 584 738 69 269
Cash flows from financing activities (7) - (3 015)
Net increase/(decrease) in cash and
short-term equivalents 469 729 (385 874) (266 338)
Cash and short-term equivalents at
beginning of period 850 113 1 116 451 1 116 451
Cash and short-term equivalents at
end of period 1 319 842 730 577 850 113
BALANCE SHEETS
As at
As at 31 March As at
31 March 2000 30 Sept.
2001 (Unaudited) 2000
(Unaudited) Restated* (Audited)
R'000 R'000 R'000
Assets
Cash and short-term advances 1 319 842 730 577 850 113
Trading securities 424 525 671 167 365 812
Term advances 1 005 499 1 025 112 971 065
Investments 305 683 334 608 347 357
Accounts receivable 135 594 144 620 127 115
Deferred tax asset 10 716 - 3 486
Fixed assets 6 523 7 719 7 055
Intangible assets 8 335 25 109 12 409
Total assets 3 216 717 2 938 912 2 684 412
Liabilities
Debentures 178 249 152 200 164 746
Deposits 1 706 240 1 608 672 1 286 621
Accounts payable 69 845 38 390 80 748
Total liabilities 1 954 334 1 799 262 1 532 115
Shareholders' funds
Share capital and premium 807 893 810 618 807 900
Retained income 439 513 299 338 323 033
Non-distributable reserve 11 030 18 864 15 564
Foreign currency translation reserve - 2 211 -
Shareholders' interest 1 258 436 1 131 031 1 146 497
Outside shareholders' interest 3 947 8 619 5 800
Total shareholders' funds 1 262 383 1 139 650 1 152 297
Total liabilities and
shareholders' funds 3 216 717 2 938 912 2 684 412
Net asset value per share (cents) 1 040 935 947
Total number of shares in issue ('000) 121 013 121 013 121 013
CONDENSED STATEMENTS OF CHANGES IN ORDINARY SHAREHOLDERS' FUNDS
6 months 6 months Year
ended ended ended
31 March 31 March 30 Sept.
2001 2000 2000
(Unaudited) (Unaudited) (Audited)
R'000 R'000 R'000
Ordinary shareholders' funds
At the beginning of the period 1 146 497 942 644 942 644
Net increase as a result of
shares issued - 87 704 87 704
Shares repurchased (7) - (2 718)
Net exchange rate adjustments - 1 940 (271)
Attributable earnings for the period
under review 111 946 98 743 148 922
Dividend - - (29 784)
At the end of the period 1 258 436 1 131 031 1 146 497
The accounting policies in these group interim results are consistent with
those applied in the 2000 annual financial statements.
*The unaudited comparative figures for the six months ended 31 March 2000
have been restated to reflect the change in accounting policy as disclosed
in the annual report for the year ended 30 September 2000.
COMMENTARY
Introduction
The AMB Holdings Limited (AMB) group offers a broad range of merchant and
investment banking services to its domestic and international clients.
Through its associate company, AMB Private Equity Partners Limited (AMB
Partners), AMB invests in leveraged buy-outs and select empowerment
transactions.
Review of results
Income statement
Against extremely difficult market conditions characterised by weak equity
markets, low levels of economic and corporate activity and intense
competition, profit before tax for the six months ended 31 March 2001
increased by 34% to R116,6 million from R87,0 million. This performance was
materially impacted by the realisation of the interest in AMB-DLJ Securities
(Proprietary) Limited to the Credit Suisse First Boston Group. For details
of this disposal shareholders are referred to the circular published on 10
January 2001 which can be accessed from our website.
Attributable earnings for the period under review were adversely impacted by
the decline in value of AMB Partners' portfolio, primarily as a result of a
lower valuation for indirect investments in Dimension Data Holdings plc and
M-Cell Limited. For more information on AMB Partners, shareholders are
referred to the results announcement published by AMB Partners on 1 June
2001. Consequently, attributable earnings increased by 13,4% to R111,9
million from R98,7 million and fully diluted headline earnings per share
(EPS) increased to 91,5 cents, representing growth of 10,1%.
Balance sheet
The balance sheet as at 31 March 2001 reflects our increased focus on
investment banking activities with assets and liabilities reflecting
liquidity generated for specific investment banking opportunities. This is
likely to be a continuing feature of AMB's balance sheet funding in the
short-term. Progress was made in reducing the structured finance term asset
book which remains an underperforming asset class dampening our overall
return on equity. While no realisations were made in the review period, we
are confident that a significant portion of the term assets will be realised
by the year-end. With the resultant increase in cash resources, AMB will be
well positioned to maintain liquidity and take advantage of attractive
investment banking opportunities. AMB's net asset value (NAV) has risen to
R10,40 and at current share price levels, AMB will pursue share buy-backs as
a means of enhancing both EPS and NAV.
New business initiatives
Despite difficult market conditions, AMB continued to invest in new business
areas in line with our organic growth strategy. These initiatives include
AMB International which was formed towards the end of the 2000 financial
year with the objective of expanding AMB's activities into the rest of the
African continent. In September 1999, Ten50Six Holdings Limited was formed
to concentrate on the administration of retirement funds. This business is
gaining market acceptance and is anticipated to attain break-even on a
monthly basis by the end of the current financial year.
Risk management
AMB continues to focus on markets it understands, combining a conservative
approach with stringent risk management processes. This is reflected in our
conservative attitude and approach to market, credit and liquidity risk. In
February 2001, AMB had its investment rating reconfirmed by internationally
recognised rating agency, Fitch Southern Africa, as a short-term A2, and
long-term BBB+. AMB is one of the few mid-sized banks in South Africa to
have achieved this long-term rating, reflecting the quality of our credit
and risk management policies.
Shareholding structure
During the review period, progress was made in securing an increasingly
meaningful stake in AMB for Pamodzi Investment Holdings Limited (Pamodzi), a
majority black-owned company that is the strategic empowerment partner of
AMB. During the next six months, we expect to make further progress in
securing additional equity for both Pamodzi as well as management and staff
to bring AMB more in line with its peers in the merchant banking industry.
Empowerment
In addition to the Pamodzi shareholding, AMB has other investors from the
black community including, directly and indirectly, approximately 25 000
individual shareholders.
AMB's commitment to empowerment was a cornerstone of its foundation and we
remain committed to this fundamental national imperative, which is suitably
reflected in the composition of AMB's executive directors. This commitment
is further reflected in both our customer base and investment activities.
Since AMB's inception in 1995, AMB and AMB Partners (the AMB group) have
directly invested approximately R450 million of their combined capital in
empowerment-related transactions. As at 31 March 2001, the total invested
in empowerment transactions by the AMB group amounted to approximately R360
million. Our track record was built on adding value to empowerment
transactions and positions AMB well for opportunities in both the public and
private sectors.
Dividend policy
AMB has an annual dividend policy and the Board will declare a dividend
following the end of the 2001 financial year.
Prospects
Current market conditions require continued focus on liquidity, market and
credit risk management policies. Earnings for the remainder of the financial
year are expected to reflect market conditions and our stated intention to
reduce exposure to term assets and deploy more of our capital in selected
investment banking opportunities.
AMB will also continually look to strengthen its positioning in the market
and expand the suite of services offered in line with its approach of
identifying suitable areas for expansion and recruiting and incentivising
highly talented teams to implement AMB's vision.
On behalf of the Board
1 June 2001
Dave Winckler B Peter Vundla Rob Dow
Chairman Executive Deputy Chief Executive
Chairman Officer
Registered address
9th Floor, The Forum, Cnr Maude and Fifth Streets, Sandton South Africa
P O Box 786833, Sandton, 2146, South Africa
Tel: (+2711) 302-2000
Transfer secretaries
Mercantile Registrars Limited,
8th Floor, 11 Diagonal Street
Johannesburg, 2001
South Africa
to register to receive shareholder circulars online, go to: www.amb.co.za
