| Fri 22 Jun 2001, 0:00 | | Hci Group Annual Results For The Year Ended 31 Mar |
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Hosken Consolidated Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1973/007111/06)
("HCI" or "the company")
Group annual results for the year ended 31 March 2001
The following are the audited results of the group for the year ended 31
March 2001 together with comparative figures:
ABRIDGED CONSOLIDATED INCOME STATEMENTS
Year ended
31 March
2001 2000
R'000 R'000
Operating loss (11 707) (2 431)
Investment income 8 494 27 113
Share of profits/(losses) (125 595) (86 934)
Non-consolidated subsidiaries (155 858) (99 372)
Associated companies 30 263 12 438
Investment surplus 10 946 428 935
(Loss)/Profit before taxation (117 862) 366 683
Taxation 9 860 7 909
(Loss)/Profit before preference
dividends (127 722) 358 774
Attributable to minorities (59) -
Preference dividends payable (75 647) (11 224)
(Loss)/Profit attributable to
ordinary shareholders (203 428) 347 550
Reconciliation of headline earnings/(loss)
Basic (loss)/earnings -
(loss)/profit for year (203 428) 347 550
Adjusted for:
Goodwill amortised 4 907 -
Investment surplus (10 496) (428 935)
Headline loss (209 017) (81 385)
Earnings (loss) per share (cents)
- Headline (54,9) (21,9)
- Basic (53,3) 93,7
Weighted average number of shares
in issue ('000) 381 724 371 039
Actual number of shares in issue
at end of year ('000) 389 588 371 039
ABRIDGED CONSOLIDATED BALANCE SHEETS
31 March 31 March
2001 2000
R'000 R'000
Assets
Non-current assets 3 486 049 3 599 609
Investments 3 485 950 3 599 456
Equipment 99 153
Current assets 14 167 11 548
Total assets 3 500 216 3 611 157
Equity and liabilities
Ordinary shareholders' equity 2 865 181 3 399 389
Minority shareholder interest and
preference shares 467 610 75 375
Non-current liabilities - 25 785
Current liabilities 167 425 110 608
Total equity and liabilities 3 500 216 3 611 157
Net asset value per share at
market/directors' valuation
at 22 June 2001 (cents) 755 965
ABRIDGED CONSOLIDATED CASH FLOW STATEMENTS
Year ended
31 March
2001 2000
R'000 R'000
Cash flows from operating activities (1 176) (186 589)
Cash flows from investing activites
Fixed assets acquired (5) (57)
Investments and loans made (147 257) (376 922)
Proceeds on disposal of investments 68 024 780 491
Cash flows from financing activities
Ordinary capital raised 98 444 14 243
Preference share capital and term
funding 10 609 (252 193)
Repayment of non-current liabilities (25 785) -
Increase in cash and cash equivalents 2 854 (21 027)
Cash and cash equivalents
At beginning of year (66 064) (45 037)
At end of year (63 210) (66 064)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Revaluation Investment Equity Retained
capital premium surplus surplus reserves income
R'000 R'000 R'000 R'000 R'000 R'000
Balances
1 April 1999 91,330 1 002 543 1 816 581 112 194 3 205 (31 188)
Share capital
and premium
Shares issued 1 430 12 866
Share issue
expenses (53)
Current
operations
Profit
attributable
to ordinary
shareholders 347 550
Transfer on
realisation
of investments 372 543 (3 205) (369 338)
Revaluation
Current
revaluation
surplus 1 379 556
Unbundling
dividend (1 336 625)
Balances
31 March 2000 92 760 1 015 356 1 859 512 484 737 - (52 976)
Share capital
and premium
Shares issued 4 637 94 131
Share issue
expenses (324)
Current
operations
Loss
attributable
to ordinary
shareholders (203 428)
Transfer on
realisation
of investments 10 946 (10 946)
Revaluation
Current
revaluation
deficit (429 224)
Balances
31 March 2001 97 397 1 109 163 1 430 288 495 683 - (267 350)
COMMENTARY
EVENTS AND DEVELOPMENTS
Vodacom Group (Pty) Ltd
The group continues to hold its 5% interest in unlisted Vodacom Group (Pty)
Ltd ("Vodacom"). Despite the recent downturn in global telecommunications
shares, Vodacom has continued its exceptional performance having reached its
five millionth subscriber in March this year. The company continues to
remain the leading cellular network operator on the African continent with a
major share of its revenues from the South African market. Your directors
remain confident that this investment will continue to deliver satisfactory
returns in the future.
Midi TV (Pty) Ltd ("e-TV")
e-TV continued its satisfactory progress over the last year. Its audience
share has expanded to a point making it the largest English medium station
in the country, ahead of both M-NET and more recently SABC 3. Revenues have
increased significantly over the year and are in line with the company's
business plan.
The recently announced intention of Warner Bros. to dispose of its 12%
interest in e-TV is not expected to have any material adverse affect on the
business and will not affect either the control of the business or the
content of its programmes.
Difficulties in resolving regulatory issues concerning shareholding remain,
however HCI and the major shareholders in the station remain committed to
resolving this matter with the Independent Communications Authority of
South Africa.
As indicated in our interim profit announcement in December 2000, the
station is expected to become profitable in 12 to 18 months' time.
Gaming
The progress towards the commencement of route operator licences remains on
track and operations in Vukani Gaming Corporation (Pty) Ltd in Mpumalanga
are expected to commence by year-end.
The group has decided to convert its preference shareholding in Online
Gaming Systems Ltd ("OGAM") to ordinary equity. This conversion will give
HCI an effective 51% shareholding in the company. We are continuing to fund
OGAM's losses in 2001 but believe the company will turn profitable in 2002.
OGAM recently announced the conclusion of a joint venture with Station
Casinos to effectively provide lawful on-line betting in the USA and, over
time, your directors believe this will prove to be of major significance to
the group.
Mettle Limited
The Greenwich Group Ltd ("Greenwich") acquired 100% of the issued share
capital of Mettle Ltd ("Mettle") resulting in the group selling its entire
interest in Mettle in exchange for a 33% interest in Greenwich. Greenwich
subsequently changed its name to Mettle Limited. This transaction resulted
in Mettle being reverse-listed on the JSE Securities Exchange South Africa
("JSE").
Mettle has performed exceptionally well during the year showing strong
growth in headline earnings.
The merger will result in the group diversifying the sources of its earnings
as well as providing access to a significant offshore base from which to
grow future earnings.
OPERATIONS AND RESULTS FOR THE YEAR
The business operations of HCI entail the making of investments in
opportunities as identified by the board of directors and to add value to
these investments over time. As such, HCI has consciously established itself
and pursued an investment policy in terms of which it has endeavoured to
maintain significant equity and capital participation in entrepreneurially-
run companies with significant growth potential. The investments are
constantly reviewed and new ones sought to complement them. Your directors
are confident that the group will continue to deliver satisfactory growth.
Earnings per share incorporates only the results of those companies equity
accounted together with interest and dividends received from investments.
Accordingly, earnings per share is not indicative of the performance of all
the underlying companies in which investments are held.
The group has decided not to consolidate certain subsidiaries that are held
either for purposes of resale or in which the group's interests are to be
diluted over the next year. It is anticipated that the group's 50,02%
indirect interest in e-TV will dilute over time as new shareholders are
introduced. Accordingly, the results of the group's share of the profits and
losses of its non-consolidated subsidiaries have been accounted for using
the equity method. The investment surplus arose as a result of the sale of
certain of the group's non-core investments.
DISTRIBUTIONS TO SHAREHOLDERS
The directors have decided not to declare a dividend for the year ended
31 March 2001. The company requires its cash resources for further
investments. Payment of a dividend will be considered in future years out of
dividends received by the company from its investments when circumstances
warrant it.
STRATE
In accordance with the new Listings Requirements of the JSE, HCI will
convert to the STRATE (Share Transactions Totally Electronic) system with
effect from 13 August 2001. From this date, shareholders will not be able to
sell their shares in HCI unless they exist in electronic format in the
STRATE environment. Shareholders will receive further communication in this
regard in due course.
PROSPECTS FOR THE FUTURE
The prospects for the group over the next year remain concentrated on the
expansion and consolidation of its interests in the various sectors
invested. The group has also invested in certain start-up businesses that
have significant blue-sky potential. Your directors are confident that the
group will continue to deliver satisfactory returns in the near future.
For and on behalf of the board of directors
M A Golding Chairman J A Copelyn Chief Executive Officer
Durban
25 June 2001
Registered office: 3rd Floor, MB House, 641 Ridge Road, Durban, 4001 (PO Box
18881, Dalbridge, 4014)
Transfer secretaries: Mercantile Registrars Limited, 8th Floor, 11 Diagonal
Street, Johannesburg, 2001, (PO Box 1053, Johannesburg, 2000)
Directors: M A Golding (Chairman), J A Copelyn (Chief Executive Officer), M
F Magugu, V E Mphande
Company secretary: M H Ahmed
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