| Tue 31 Jul 2001, 0:00 | | Taufin Holdings Limited - Preliminary Financial Re |
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Taufin Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/019584/06)
("Taufin" or "the company")
Preliminary Financial Results
Shareholders are advised that the results for the period under review have
not been reviewed by the auditors and shareholders are advised to exercise
caution in share dealing until further notification.
Unaudited results for the year ended 31 March 2001
CONSOLIDATED INCOME STATEMENTS
for the 13-month
year ended period ended
31 March 2001 31 March 2000
(Unaudited) (Audited)
R R
Interest received 11 646 638 11 194 962
Interest paid (refer Note 2) 6 523 035 5 152 710
Net interest income 5 123 603 6 042 252
Fees and commission income 1 853 534 647 631
Total income 6 977 137 6 689 883
Provision for doubtful debts 12 098 476 1 508 700
General 9 900 000 1 058 700
Specific 2 198 476 450 000
Operating expenses 5 869 000 1 756 353
Amortisation of debenture
issue costs 266 666 368 464
Net (loss)/income before
exceptional item (11 257 005) 3056 366
Exceptional item 879 655 -
Net (loss)/income before
Taxation (10 377 350 3 056 366
Taxation 1 358 277
Current - 1 223 603
Deferred - 134 674
Loss attributable to
ordinary shareholders (10 377 350) 1 698 089
Accumulated profit/(loss) at
beginning of period 1 697 139 (950)
Accumulated (loss)/retained
income at end of period (8 680 211) 1 697 139
(Loss)/earnings per share
(cents)
Headline (refer Note 3) (18,06) 2,72
Undiluted
(before AC125 adjustment) (14,36) 4,87
Undiluted (16,65) 2,72
Diluted (refer Note 1) Anti-dilutive Anti-dilutive
Ordinary shares in issue
Undiluted 62 340 000 62 340 000
Notes: 1. In terms of the conversion terms included in the debenture trust
deed, each debenture will be automatically converted into 1 (one) fully paid
share subject to certain conditions. The anti-dilutive effect has been
calculated based on such conversions taking place and 40 800 000 shares
being issued.
2. See commentary: Compliance with AC125.
3. Reconciliation of loss per share to headline loss per share:
Loss attributable to ordinary shareholders R 10 377 350
Exceptional items: Profit on
repurchase of debentures R 879 655
Headline loss R 11 257 005
CONSOLIDATED BALANCE SHEETS
year ended as at
31 March 2001 31 March 2000
(Unaudited) (Audited)
R R
Funds employed
Share capital and share
Premium 20 734 859 20 734 859
Convertible debentures
- equity portion 4 272 812 4 272 812
Accumulated (loss)/retained
Income (8 680 211) 1 697 139
Distributable reserves (5 920 057) 3 032 679
AC125 interest adjustment (2 760 154) (1 335 540)
Total shareholders' equity 16 327 460 26 704 810
Convertible debentures
- liability portion 37 909 718 37 329 393
Long term liabilities 8 142 463 -
Deferred tax 134 674 134 674
Accounts payable 4 034 966 3 794 687
66 549 281 67 963 564
Employment of capital
Fixed assets 27 369 290 201 092
Advances 33 351 488 66 594 146
Accounts receivable 5 632 495 891 564
Short-term deposits and cash 196 008 276 762
66 549 281 67 963 564
CONSOLIDATED CASH FLOW STATEMENTS
for the 13-month
year ended period ended
31 March 2001 31 March 2000
(Unaudited) (Audited)
R R
Cash (utilised)/retained from
operating activities (29 392) 7 931 263
Operating profit 4 471 260 5 029 090
Net decrease/(increase) in
working capital (4 500 652) 2 902 173
Cash flow from investing
Activities (29 106 707) (286 512)
Investment into fixed assets in
business activities (30 686 707) (286 512)
Proceeds on disposal of fixed
Assets (1 580 000) -
Cash flow from banking
Activities 21 144 182 (68 102 846)
Funds (repaid by)/advanced
to customers 21 144 182 (68 102 846)
Cash flow from financing
Activities 7 911 163 60 693 817
Proceeds on issue of ordinary
Shares - 21 300 000
Listing expenses paid - (606 183)
Proceeds from instalment
sale finance 8 142 463 -
Repurchase of convertible
Debentures (231 300) -
Proceeds on issue of convertible
Debentures - 40 000 000
Net (decrease)/increase in
cash and
short-term deposits (80 754) 235 722
Cash and short-term deposits
at beginning of period 276 762 41 040
Cash and short-term deposits
at end of period 196 008 276 762
Note:
Earnings attributable to ordinary
shareholders (10 377 350) 1 698 089
AC125 financial liability
adjustment 1 424 614 1 335 540
Provision for doubtful debts 12 098 476 1 508 700
Depreciation 1 609 134 85 420
Deferred tax - 134 674
Amortisation of debenture
issue costs 266 666 266 667
Profit on repurchase of
debentures (879 655) -
Loss on disposal of fixed
Assets 329 375 -
4 471 260 5 029 090
Commentary
Operating performance
The Group recorded a loss of 16,65 cents (2000: earnings of 2,72 cents) per
share for the year under review. The loss is a result of an increase in the
provision for doubtful debts of R9,9 million.
Exceptional items
The company has recorded a profit of R879 655 on the repurchase of
debentures during the year under review.
Industry focus
Taufin provides commercial asset-based finance and related financial
products to a niche market in the distribution industry. During the year
under review the Group extended the range of its products and now also rents
distribution assets to distributors. This division has assets valued at R27
million. Certain of these assets have been acquired from Taufin Finance
(Pty) Ltd in cases where the debtors have surrended their assets as a result
of them not being able to service their lease agreements.
Credit risk management
While strict credit granting criteria are in place, adverse conditions in
the distribution industry has resulted in a deteriation in the advances
book. The directors have, accordingly, raised the level of specific and
general provisions against non-performing advances to a total of R11,4
million. The Group was also severely affected by trading conditions in sub-
Saharan Africa which resulted in a bad debt write-off of R2,2 million. The
directors feel that this level of provision is prudent in view of the fact
that Taufin's niche market is the previously disadvantaged community,
together with the fact that certain of the owner driver contracts with their
principles were cancelled due to non-performance.
Dividends
No dividend has been declared for the period under review and none is
recommended.
Prospects
The directors have reviewed their policy of extended advances in view of the
liquidity risk associated with the pending repayment of the convertible
debentures in April 2002.
Accounting policies
All accounting policies adopted are prepared in accordance with the
statements of South African Generally Accepted Accounting Practice and are
consistent with those which were adopted for the entire financial period and
as disclosed in the prospectus.
Terms of debentures
During the previous financial period, convertible redeemable debentures were
issued at 100 cents with a coupon floating at 7% below the prime rate of
interest payable on the first working day of April and October. The
debentures are redeemable if the average volume weighted share price over
the immediately preceding 25 trading days of ordinary shares ("average share
price") is less than 146 cents on the Last date of Registration ("LDR")
preceding 1 April 2002 will be automatically converted into ordinary shares.
Where the average share price is over 300 cents on a LDR, the company has
the option to convert the debentures early. Each debenture will be converted
into one fully paid share in the company upon the payment of 46 cents if the
average share price is above 146 cents but below 275 cents, or 46 cents
(plus the excess of the average share price over 275 cents) if the average
share price is above 275 cents at the date of conversion.
Compliance with AC125
The convertible debentures issued have been split between the equity portion
and the liability portion in compliance with AC125 ("financial instruments:
disclosure and presentation"). In accordance with AC125, interest paid
includes an amount of R1 424 614 for disclosure purposes, to amortise the
financial liability portion of the debentures over their term to their
redeemable amount. This has no effect on the retained reserves of the Group.
For and on behalf of the board
Derrick van Rooyen (Chairman)
31 July 2001
Directors:
Graeme Inggs Derrick van Rooyen Kathleen St. Cloud.
Transfer secretaries:
Computershare Services Limited, PO Box 61051, Marshalltown, 2107
Registered office:
6 St Marys Road, Kloof, 3610
Auditors:
Deloitte & Touche, PO Box 243, Durban, 4000
Secretary:
Graeme Inggs, 6 St Marys Road, Kloof, 3610,
