| Tue 26 Jun 2001, 0:00 | | Brimstone Investments Corporation Limited - Result |
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Unaudited Results for the 6 months ended 31 March 2001Group Income Statements
Unaudited Unaudited Audited 6 Months 6
Months 12 Months ended ended
endedR'000 31 Mar 2001 31 Mar 2000 30 Sept 2000Revenues
131 121 9 522 9 522 13 665Cost of sales (85 420) -
-Gross profit 45 701 9 522 13 665Selling and
administration
expenses (34 627) (1 890) (7 055)Operating profit
11 074 7 632 6 610 Income from
investments 1 759 - 868 Finance costs
(4 450) (2 369) (5 488) Goodwill write-down (914) -
-Net profit before
exceptional items 7 469 5 263 1 990 Exceptional items
(12 112) 1 011 (10 203)Net (loss)/profit
before taxation (4 643) 6 274 (8 213)Taxation
(3 918) (193) -(Loss)/profit after
taxation (8 561) 6 081 (8 213)Equity accounted
(losses)/ earnings (2 102) 3 675 9 310Net attributable
(loss)/profit (10 663) 9 756 1 097Earnings/(loss) per
share (cents) Headline 1.2 4.5 5.8 Net
attributable (5.5) 5.0 0.6 Comparable headline
earnings 1.2 4.5 7.5Number of shares used
incalculation (`000): 195 628 195 628 195 628Headline earnings
calculation: Net attributable
profit (10 663) 9 756 1097 Exceptional items
12 112 (1 011) 10 203 Goodwill write-down 914 -
- Headline earnings 2 363 8 745 11 300Comparable headline
earnings calculation: Headline earnings 2 363 8 745 11
300 Incentive fee on
investment disposals - - 3 315
Comparable headline
earnings 2 363 8 745 14 615Group Balance Sheets
Unaudited Unaudited AuditedR'000 31 Mar 2001 31 Mar
2000 30 Sept 2000ASSETSNon-current assets 127 977 199 903 169
545Property, plant and
equipment 41 893 23 725 22 300Goodwill in associate
8 230 - -Interest in non-consolidated subsidiaries
- - 23 017Interest in associate
companies 58 182 76 359 73 644Investments and loans
19 672 99 819 50 584Current assets 115 024 1 119
17 903 Trading investments - 270 50 Inventory
50 067 - - Trade and other
receivables 52 559 480 17 841 Cash resources
12 398 369 12TOTAL ASSETS 243 001 201 022
187 448EQUITY AND LIABILITIESCapital and reserves 138 900 158 317
149 658Share capital and
premium 152 371 152 371 152 371Distributable
reserves (13 471) 5 946 (2 713)Non-current liabilities 17 095
14 850 14 769Long-term interest-bearing borrowings 16 126
14 850 14 769Deferred taxation 969 - -
Current liabilities 87 006 27 855 23 021Trade and other
payables 39 325 2 513 4 535Taxation
3 325 1 644 1 452Bank overdraft 8 552 -
431Current portion of interest-bearing
borrowings 35 804 23 698 16 603TOTAL EQUITY AND
LIABILITIES 243 001 201 022 187 448NAV per share (cents) 71.0
80.9 76.5Shares in issue at end of period (`000) 195 628
195 628 195 628
Group Cash Flow Statements Unaudited Unaudited
Audited 6 Months 6 Months 12 Months
ended ended endedR'000 31 Mar 2001 31 Mar 2000
30 Sept 2000Cash generated from
trading 13 739 1 163 3 516Movement in working
capital 15 952 (1 410) (16 670)Cash generated from/
(utilised in) operating activities 29 691 (247) (13
154)Investment income 1 759 - 868Finance costs
(4 450) (2 369) (5 184)Taxation paid (5 578) (4 777)
(4 777)Cash retained from/
(utilised in) operations 21 422 (7 393) (22 247)Cash
flows from investing
activities (13 489) 5 480 26 641 Net investments
(acquired)/disposed of (5 602) 5 480 26 641Net additions to
property, plant and equipment (7 887) - -Net cash inflow/
(outflow) 7 933 (1 913) 4 394Cash flows from
financing
activities 3 668) 2 720 (4 375) Net (repayment)/
raising of long-term liabilities (502) - - Net
(repayment)/raising of short-term liabilities (3 166) 2 720 (4
375)Net increase/(decrease) in
net cash resources 4 265 807 19Net cash resources at
beginningof period (419) (438) (438)Closing net
cash
resources 3 846 369 (419)Statement of changes in
equity for the 6 months ended 31 March 2001
Distri- Share Share butable
Capital Premium Reserves TotalBalance at 30 September 1999:As previously
stated 42 152 329 (5 233) 1 47 138Change in accounting
policy - - 1 423 1 423Restated balance 42
152 329 (3 810) 148 561
Attributable profit for the six months ended 31 March 2000
- - 9 756 9 756Balance at 31 March 2000 42 152
329 5 946 158 317Attributable loss for the six months ended 30
September 2000 - - (8 659) (8
659)Balance at 30 September 2000 As previously stated 42 152 329
(2 713) 149 658 Change in accounting policy
on consolidation of subsidiaries - - (95)
(95)Restated balance 42 152 329 (2 808) 149
563Attributable loss for the six months ended 31 March 2001
- - 10 663) (10 663)Balance at 31 March 2001 42
152 329 (13 471) 138 900Segmental information for the 6 months ended 31
March 2001 Operating Headline Impairment
Revenue Profit Earnings Losses Assets LiabilitiesBrimEquity private
equity fund 60 005 7594 4 394 (914 70 075 (36 036)Short
term insurance
- - (3 854) - 2 658 -
"Investments in transition"
71 104 4621 2 797 (12 112) 169 659 (62 795)
Corporate 12 (1141) (974) - 1 109 (5
270)Total 31 121 11 074 2 363 (13 026) 243 501 (104
101)Comments on ResultsAccounting PoliciesBrimstone changed its accounting
policy relating to thenon-consolidation of certain of its subsidiary
companies during the period.The Registrar of Companies has granted consent in
terms of Section 291 of the Companies Act to the non-consolidation of the two
companies concerned. The companies were not consolidated in either the 1999
or 2000 financial years. During the review period the requirements of
Accounting Statement number 132 of the South African Statements of Generally
Accepted Accounting Practice (GAAP) came into effect. The Statement no longer
allows for non-consolidation on the basis previously applied by Brimstone.
The results of Brimstone Clothing Corporation (Proprietary) Limited and
Brimbrands(Proprietary) Limited have accordingly been consolidated in thesix
months ended 31 March 2001.Besides this change and the fact that the results
of theBrimEquity joint venture, which was formalised at 30 September2000,
have been proportionately consolidated in the review period, the financial
statements were prepared on the same basis and utilising the same accounting
policies as the financial statements at 30 September 2000. The accounting
policies of Brimstone and its subsidiaries are in accordance with GAAP.Focus
and DirectionDue, amongst other issues, to the complexity of Brimstone's
partnership arrangements, the formalising of its new structure is taking
longer than anticipated to implement. Final implementation of the Peoples
Bank transaction has been delayed by matters beyond the control of Nedcor,
Brimstone and the consortium members, but these are close to being
resolved.Aside from its investments in financial services, Brimstone'sother
investments will be in 2 or a maximum of 3, focusedprivate equity funds into
which its alliance partners will inject other investments, capital or
both.Results for the YearIncome StatementAs stated above, Brimstone has
consolidated the results of Brimstone Clothing Corporation (Pty) Ltd ("House
of Monatic") and proportionately consolidated those of the BrimEquity private
equity fund. House of Monatic continues to be classified under the
"Investments in transition" category. Recently published results oflisted
clothing manufacturers and clothing retailers, beartestimony to just how
difficult it has been in this sector of the market. For all the reasons
mentioned in the reports of these companies and, indeed companies in many
other sectors, consumer spending, already under pressure, has been severely
diluted. House of Monatic has remained profitable despite this.Of the other
more significant investments in this segment ofBrimstone's business, Nando's
has performed extremely well.African Harvest Limited, held via NECorp
Holdings (Pty) Limited and equity accounted, reported profits more than 50%
below those of the previous period. Of the investments in the BrimEquity
fund, Sea Harvest performed credibly in South African waters but was affected
by the upheavals in the fishing industry in Namibia. The bottom line was also
affected by STC on the special dividend paid post de-listing. The Scientific
Group had a difficult six months during which turnovers did not reach
expectations leading to restructuring, which had once off cost consequences.
The result was a small loss for the period. Turnover has however picked up
since and prospects are looking more positive. A&D Spitz continued to trade
well despite difficult trading conditions and contributed positively to group
results.Lion of Africa suffered growing pains both by way of costs and the
need to establish new statutory reserves and provisions. Itcontinues to
secure business however and should attain critical mass ahead of schedule.The
finance costs figure is a factor of the consolidating andproportional
consolidating of results as is taxation.The largest single factor in
exceptional items resulted from accounting for the impairment in value of the
indirect African Harvest shareholding.Exceptional Items
6 Months ended 6 Months ended Year ended
31 March 2001 31 Sept 2000 31 March 2000
Realised gains/
(losses):On disposal of
listed investments - 1 011 3 416On disposal of
unlisted investments 307 - 15 881Recovery on
unlisted
investment previously
written off - - 2 000On disposal of
subsidiary - - 2Total realised
307 1 011 21 299Unrealised gains/
(losses)Revaluation/(write-
down) of listed
investments 1 594 - (375)Write-downs of
unlisted
investments (14 013) - 29 702Write-down of
investment property - - (1 425)Total
unrealised (12 419) - (31 502)Net Exceptional
Items (12 112) 1 011 (10 203)Balance
SheetBalance sheet net asset value per share has been reduced to 71 cents
per share by the exceptional items above. The increase in interest-bearing
borrowings to R60.5 million reflects againconsolidation of Brimstone
Clothing and proportional consolidating of BrimEquity. Relative to total
assets of R243.5 million and shareholders'equity of R139.4 million, the
figure remains acceptable.Certain investment disposals are being actively
pursued which will reduce borrowings.ProspectsImproved performance is
expected from all investments in the second six months but it is unlikely
that forecast growth in earnings and net asset value will be
achieved.DividendsNo dividend is proposed at this time.By order of the
BoardProf GJ Gerwel MA BreyChairman Deputy
ChairmanCape Town, 27 June 2001
