| Wed 6 Jun 2001, 0:00 | | Monex Limited - Group Audited Results For The Year |
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MONEX LIMITED
A MEMBER OF THE MONEX GROUP OF COMPANIES
Registration number 1968/010805/06
Group audited results for the year ended 31 March 2001
Summarised Consolidated Income Statement
for the year ended 31 March 2001
Year ended Year ended
31 March 31 March
2001 2000
Audited Audited
R'000 R'000
Turnover 152 474 300 819
- Continuing operations 152 474 248 080
- Discontinued operations - 52 739
Operating profit/(loss) 38 785 (6 967)
Financing costs (36 545) (33 300)
Profit/(loss) before share of
earnings of associates 2 240 (40 267)
- Continuing operations 2 240 (32 389)
- Discontinued operations - (7 878)
Earnings of associates 6 738 -
Profit/(loss) before abnormal items 8 978 (40 267)
Abnormal items (273 245) -
Loss after abnormal items and
before taxation (264 267) (40 267)
Taxation 12 757 (2 984)
Loss for the year (251 510) (43 251)
Weighted average number of shares
in issue (000's) 111 544 111 898
Loss per ordinary share (cents) (225,5) (38,6)
Headline earnings/(loss)
per ordinary share (cents) 19,5 (11,5)
Statement of Changes in Equity
Year ended Year ended
31 March 31 March
2001 2000
Audited Audited
R'000 R'000
Share capital at start of year 261 361 251 812
Issue of 4 170 000 shares of 229 cents - 9 549
Conversion of 114 131 643 ordinary
shares of 229 cents to ordinary
shares of 1 cent on 1 August 2000 (260 220) -
Reduction in share capital by
repurchase of 5 175 200 ordinary
shares of 1 cent from the Monex
Share Incentive Trust (51) -
1 090 261 361
Share premium and reserves at
start of year 241 548 238 852
Premium on shares issued
during the year - 2 727
Share issue expenses written off - (31)
Increase in premium due to conversion
of ordinary shares from 229 cents
to 1 cent 260 220 -
Decrease in premium due to repurchase
of 5 175 200 shares from the Monex
Share Incentive Trust (14 997) -
486 771 241 548
Retained earnings at
the start of the year 68 746 111 997
Net loss for the year (251 510) (43 251)
Accumulated (losses)/retained earnings
at the end of the year (182 764) 68 746
Total share capital and reserves 305 097 571 655
Summarised Consolidated Balance Sheet
at 31 March 2001
Year ended Year ended
31 March 31 March
2001 2000
Audited Audited
R'000 R'000
ASSETS
Non-current assets 395 182 679 802
Property, plant and equipment 141 615 378 042
Investment in associates 250 938 280 000
Loans, investments and intangibles 2 629 21 760
Current assets 236 739 177 575
Inventories 219 753 120 937
Receivables and pre-payments 16 048 55 804
Cash and cash equivalents 938 834
Total assets 631 921 857 377
EQUITY AND LIABILITIES
Share capital and reserves 305 097 571 655
Non-current liabilities 169 432 155 694
Deferred income - 17 452
Deferred taxation 9 996 22 753
Long-term liabilities 159 436 115 489
Current liabilities 157 392 130 082
Trade and other payables 24 717 35 346
Short-term borrowings 94 360 65 817
Provisions 3 040 3 150
Current portion of
interest-bearing borrowings 35 275 25 715
631 921 857 377
Shares in issue (000's) 108 956 114 131
Net asset value per share (cents) 280,0 500,9
Abridged Summarised Cash Flow Statement
for the year ended 31 March 2001
Year ended Year ended
31 March 31 March
2001 2000
Audited Audited
R'000 R'000
Net cash inflow from
operating activities 4 731 2 470
Net cash inflow/(outflow) from
investing activities 5 300 (32 403)
Net cash outflow from
financing activities (38 469) (4 279)
Net decrease in cash and
cash equivalents (28 438) (34 212)
Cash and cash equivalents at
beginning of year (64 983) (30 771)
Cash and cash equivalents at
end of year (93 422) (64 983)
COMMENTS
Headline earnings for the year to 31 March 2001 were 19,5c a share against a
headline loss per ordinary share of 11,5c the previous year. Of the earnings
of 19,5c a share, 11,4c relates to a reversal of deferred tax.
The improved performance of the Group on an operating level for the year
under review follows the disposal of non-core operations and a major
restructuring of continuing operations, in particular the leisure division.
These measures saw turnover for the Group down at R152,5m from R300,8m the
previous year.
The Canal Walk shopping centre, which opened in October 2000, contributed
R7,2m to earnings of associates, which together with a small loss from the
Express by Holiday Inn at Century City, resulted in earnings from associates
amounting to R6,7m.
Primarily as a result of the reacquisition from Tsogo Sun of 10ha of land
previously designated as a casino site for R72,9m, Group borrowings
increased to R289,1m from R207,0m the previous year.
The performance of Ratanga Junction improved considerably during the year
under review. However, as previously reported, the directors reviewed the
carrying value of the investment in the park in the first half of the year
and an initial impairment of R153,8m was recorded. Following a further
review it has been decided to write down the investment by an additional
R78,1m to R100m.
As a result of certain amendments to the Income Tax Act, a portion of the
investment in Canal Walk, which related to the exchange of land for shares
in Century City Centre Limited, would be taxable in the event of the sale of
the aforementioned shares or the conversion of the company into a variable
loan stock structure. The directors have therefore written down the
investment by the potential tax liability of R37,8m from R280m to R242,2m.
The write-downs, combined with the operating results for the year, have
resulted in a 221c reduction in net asset value per share from 501c to 280c
and a reduction in ordinary shareholders funds from R571,7m to R305,1m.
OPERATIONAL REVIEW
Leisure
The restructuring of the leisure operations of the Group has successfully
reduced the operating overhead of Ratanga Junction to R33,7m from R111m the
previous year. In spite of turnover being down at R40,5m (R87,8m) the
reduction in operating overheads enabled the park to almost break even on an
operating level for the year to end March 2001 with an operating loss,
before depreciation and interest, of R1,1m against R22,7m the previous year.
After depreciation of R7,2m and interest of R1,1m, the loss for the full
year was R9,4m against a loss of R74,4m the previous year, which included
the write-off of pre-opening expenses of R22,8m.
In December 2000, Ratanga Junction introduced a new ride, The Tarantula. A
second new ride is to be launched ahead of the July school holidays.
The first hotel at Century City, the 147-room the Express by Holiday Inn,
which is a joint venture between Tsogo Sun and Monex, opened on 15 December
2000. Monex has a 40% shareholding in this Southern Sun operated hotel which
was developed at a cost of R38,5 million. The company's share of the
budgeted loss for the start-up period was R482 000. Occupancies, which have
averaged 49,3% since opening, are continuing to improve and the hotel is
budgeted to make a small profit in the year ahead.
Property Sales
Land sales at Century City totalled R37,8m for the year compared to R111,5m
the previous year. The sale of land for the shopping centre has been
accounted for over the development period with R50,4m accruing in the prior
financial year against R25,4m during the year under review.
Residential property sales for the year totalled R8,3m against R12,5m the
previous year and included the first sale for more than R1 million of a home
at Water's Edge, an upmarket development within Century View adjacent to
Century City.
Canal Walk
A highlight of the reporting period was the successful completion of the
Canal Walk shopping and entertainment centre at Century City on time and
R121m under budget. Included in the operating profit for the year is an
amount of R41m in professional fees arising from Monex's role as developer
of the shopping centre. Monex will now benefit from fees to be derived from
the ongoing management of Canal Walk.
Notwithstanding the difficult retail environment, the shopping centre has
performed according to expectations attracting 9,98 million visitors in the
first six months with a total turnover for tenants for this period of R589
million.
Leasing of the shopping centre proceeds steadily with a net 54 new leases
having been signed since the centre opened. In total, 399 shops representing
110 000 square metres of the 124 000 square metres of gross leasable area,
have been let.
It was announced in December 2000 that Richway Retail Properties Limited
proposed acquiring 58 % of Century City Centre Limited (CCCL), owner of
Canal Walk shopping centre from BoE Limited (48%) and Monex (14%). The
disposal would have realised approximately R100m in cash for Monex but the
deal fell through in May this year when Richway was unable to raise
sufficient financing.
The investment in CCCL, which delivered an initial contribution to earnings
for the reporting period, is expected to contribute positively to Group
earnings in the medium term. However, no material contribution is expected
in the year ending 31 March 2002 as the centre consolidates its position in
the market.
A new road giving direct access from the N1 Freeway to Century City and the
shopping decks of Canal Walk was completed within budget and on time for the
opening of the shopping centre.
RECAPITALISATION, POTENTIAL DELISTING AND FURTHER CAUTIONARY ANNOUNCEMENT
In the results for the year to 31 March 2000, the directors stated that the
company was considering a rights offer, for purposes of reducing the
company's borrowings. Subsequently, the rights offer was postponed in favour
of disposing of the portion of Canal Walk referred to above.
BoE Limited, the majority shareholder in Monex, advised shareholders on 10
May 2001 that it was considering making an offer to minority shareholders
with a view to delisting the company. A formal announcement in this regard
is expected to be made shortly, and further to the cautionary announcement
dated 10 May 2001, Monex shareholders are advised to continue to exercise
caution when dealing in their shares until a further announcement is made.
Should BoE Limited not proceed with an offer to minority shareholders, the
directors will consider pursuing a rights offer to reduce the level of
borrowings.
BOARD OF DIRECTORS
Keith Charles Watkins resigned from the Board of Directors with effect from
5 February 2001 but remains as managing director of Monex Homes (Pty) Ltd
and Monex Construction (Pty) Ltd. The directors would like to take this
opportunity in thanking him for his invaluable contribution over the past
six years.
DIVIDENDS
No dividend will be paid for the period under review.
PROSPECTS
Progress was made in the year under review in returning the Group to an
operating profit. Management's focus in the year ahead will be to build on
these efforts and to reduce borrowings.
Signed on behalf of the Board
M Rose-Innes (Chairman) JM Wragge (Chief Executive Officer)
Cape Town
6 June 2001
Registered Office Transfer Secretaries
No. 1 Waterford Place Computer Share Services Limited
Century City Edura House, 41 Fox Street
Milnerton 7441 Johannesburg 2000
Directors: M Rose-Innes, JM Wragge, CJ Harvie, PS Leaf-Wright, JP McCance-
Price, CR van Horen
