| Mon 23 Jul 2001, 0:00 | | SPECIALISED OUTSOURCING LIMITED - RESULTS |
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Specialised Outsourcing Limited
Registration number 1995/001603/06
(The "Company" or "Outsors")
Unaudited Interim Financial Statements for the Six months to June 2001
Group & Company Group & Company Group & Company
Six Months to Six Months to Year ended
Jun 2001 Jun 2000 Dec 2000
R 000's R 000's R 000's
Income Statement
Turnover 31,665 51,808 64,693
Operating Profit 18,034 43,051 39,015
Provision for
Unpaid Invoices (2,089) (29,962) (30,151)
Investment Income 6,210 7,956 13,481
22,155 21,045 22,345
S A Normal Taxation 6,390 5,104 11,219
Deferred Taxation (470) (6,784)
Secondary Tax on
companies 536 8,670 8,670
Profit from Continuing
Operations 15,699 7,271 9,240
Profit on realisation
of Subsidiaries/
Investments 54,010 20,113
Net Profit 15,699 61,281 29,353
Earnings adjusted for
Profit on
realisation of Investments (54,010) (20,113)
Profit on Sale of
Non-Current Assets (24) (24)
Headline Earnings 15,699 7,247 9,216
Weighted Average
number of Shares
(000's) 53,482 52,247 52,949
Earnings Per Share
(cents) 29.35 117.29 55.44
Headline Earnings
per Share (cents) 29.35 13.87 17.41
Group & Company Group & Company Group & Company
Six Months to Six Months to Year ended
Jun 2001 Jun 2000 Dec 2000
R 000's R 000's R 000's
Balance
Assets
Non Current Assets 10,173 53,712 9,342
Property, Plant &
Equipment 2,910 2,693 2,549
Investments 9 51,019 9
Deferred Taxation 7,254 0 6,784
Current Assets 151,893 150,097 152,355
Accounts Receivable
& Accruals 28,721 14,269 14,642
Taxation Receivable 2,284
Cash & Cash Equivalents 123,172 135,828 135,429
Total Assets 162,066 203,809 161,697
Equity & Liabilities
Capital & Reserves 154,203 181,391 149,195
Stated Capital 58,947 59,210 58,942
Distributable Reserves 95,256 122,181 90,253
Current Liabilities 7,863 22,418 12,502
Accounts Payable 3,422 2,001 11,243
Taxation 4,106 20,417 (0)
Shareholders for
Dividend 335 1,259
Total Capital &
Liabilities 162,066 203,809 161,697
NAV per Share (cents) 288.32 347.18 281.77
Group & Company Group & Company Group & Company
Six Months to Six Months to Year ended
Jun 2001 Jun 2000 Dec 2000
R 000's R 000's R 000's
Cash Flow Statement
Cash generated from
Operations 16,703 13,808 10,356
Interest Received 3,786 4,537 7,172
Dividends Received 2,424 3,419 6,309
22,912 21,763 23,837
Dividends Paid (11,621) (71,982) (71,982)
Taxation Paid (536) (9,139) (37,955)
10,755 (59,357) (86,099)
(Increase)/Decrease
in Accounts Receivable (14,079) 13,912 13,539
(Decrease) in Accounts
Payable (7,821) (11.754) (1,253)
Net Cash from Operations (11,144) (57,199) (73,814)
Net Cash Flows from
Investing Activities (1,118) 54,489 70,973
Net Cash Flows from
Financing Activities 5 (268)
(Decrease) in Cash
and Cash Equivalents (12,257) (2,710) (3,109)
Cash and Cash
Equivalents at the
beginning of the Period 135,429 138,538 138,538
Cash and Cash
Equivalents at the
end of the Period 123,172 135,828 135,429
Group & Company Group & Company Group & Company
Six Months to Six Months to Year ended
Jun 2001 Jun 2000 Dec 2000
R 000's R 000's R 000's
Statement of Changes in Equity
Stated Capital
Opening Balance 58,942 36,733 36,733
Share Options exercised 5 146
Capitalisation Award 22,477 22,477
Share Issue expenses (414)
Closing Balance 58,947 59,210 58,942
Accumulated Profit
Opening Balance 90,253 156,618 156,618
Net Profit for the Year 15,699 61,281 29,353
Dividends (10,696) (95,718) (95,718)
Closing Balance 95,256 122,181 90,253
Notes to the unaudited interim financial statements at 30 June 2001
Accounting policies
The same accounting policies and methods of computation used in the annual
financial statements at 31 December 2000 have been used in these interim
financial statements.
Application of Accounting Policies
Ernst & Young, the auditors to the Company, have not performed an audit, but
have reviewed the application of the Revenue Recognition accounting policy.
The report of the auditors, regarding this review, is available for
inspection at the Company's registered office.
Restatement of 30 June 2000 Interim comparatives
At 30 June 2000, a pre-tax amount of R29,962 million was included in the
earnings of the Company. Subsequent to this date, the customer who had been
so invoiced (before VAT) refused to pay the amount citing abnormalities in
the Contract. The customer subsequently cancelled the Contract, and this
amount (together with certain further amounts) remains unpaid.
At 30 September 2000, this amount was fully provided for in the published
and reported Income Statements for both the third quarter ended 30 September
2000 and the full year ended 31 December 2000. Consequently, the Board has
decided to restate the 30 June 2000 comparative to account for this event at
the date that the revenue was recognised.
The Company has initiated legal proceedings against this customer in the
amount of some R126 million which has not been accounted for and is a
contingent asset.
The effect of the restatement on the 30 June 2000 results is to reduce
Headline Earnings Per Share (HEPS) and Earnings Per Share (EPS) by 40,14
cents, and to reduce Net Asset Value Per Share (NAV) by 46,55 cents. The
results reported and published for the period ended 30 September 2000 and
the full year ended 31 December 2000 are unaffected as full provision was
made at these dates.
Commentary on the Results
These results are pleasing given the circumstances that the Company has
suffered during the past year. The circumstances referred to are now largely
behind the Company, and the Management and Staff of the Company have been,
and are committed to restoring the earnings base.
Despite the event referred to above, we have managed to grow both the
earnings and product base of the Company. As we have previously anticipated,
our new initiative, being Physical Risk Management, has made a significant
contribution to earnings, and is expected to grow even further.
Prospects
We have been engaged in extensive marketing to prospective customers, and
have made progress in this regard. Concerted and concentrated efforts will
continue to be made to grow the customer base to sustain earnings growth for
2002.
Various other product expansion initiatives are underway, and certain of
them are expected to rollout in the near term. The Company has not suffered
any significant staff turnover, nor does it expect to grow the staff
complement. Operational costs are tightly controlled, and other than legal
costs, are largely within budget. Accordingly, the prospects for the
remainder of the year in terms of earnings and cash generation are
favourable.
Dividend
The Board has resolved to declare a cash dividend to Shareholders registered
as such on Friday 10 August 2001 of 50 (fifty) cents per share, being an
interim dividend of 29 cents per share, and a further dividend of 21 cents
per share. This dividend will be paid to shareholders on or about 15 August
2001.
The Board of Directors has agreed and plans to further investigate the
possibility of returning to shareholders any excess capital that may exist.
Shareholders will be advised of developments in this regard in due course.
Share buy-back
At the Annual General Meeting of the Company, held on 14 June 2001, the
authority for a general buy-back of up to ten percent (10%) of the Company's
equity was extended for one year. No shares have yet been acquired but, upon
the release of these results, the Company can proceed with this general
share buy-back.
By order of the Board
RDD Harrison
Company secretary
Randburg
16 July 2001
Directors BH Adams (Chairman)(ne), DM McLean (CEO), Dr DE Baloyi(ne)(Alt IJ
Pascal(British)), C Buitendag, WJ Kok(ne), G Magomola(ne), PW Schneider, CD
Stein(ne), MRC Walker, JB Zwart(ne)(Alt H Joffe)
Sponsor Mettle Limited
Transfer secretaries Computershare Services (Proprietary) Limited
Registered office 2nd Floor, Oak Place, 264 Oak Ave, Randburg
