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ALACRITY FINANCIAL SERVICES LIMITED
(Registration number 1994/000078/06)
HIGHLIGHTS
- Recapitalised Balance Sheet
- Improved Profitability
- Introduction of Pamodzi as Empowerment Partner
UNAUDITED GROUP INTERIM RESULTS for the six months ended 30 June 2001
Consolidated income statement
Unaudited Unaudited Audited
six months six months year
ended ended ended
30/6/2001 30/6/2000 31/12/2000
R000 R000 R000
Revenue from operations 51 131 48 881 121 303
Less operating expenses 49 405 49 066 119 119
Operating profit 1 726 (185) 2 184
Finance (cost)/earnings (612) 356 (204)
Share of losses from
associates - (54) (147)
Profit before tax 1 114 117 1 833
Taxation - - -
Profit after tax 1 114 117 1 833
Headline earnings/(loss)
per ordinary share (cents) 1.23 (1.22) 1.41
Earnings per ordinary
share (cents) 0.82 0.09 1.70
Fully diluted earnings per
ordinary share (cents) 0.82 0.09 1.64
Net asset value per
ordinary share (cents) 13.91 8.15 13.15
Dividends per ordinary
share (cents) - - -
Consolidated balance sheet
Unaudited Unaudited Audited
six months six months year
ended ended ended
30/6/2001 30/6/2000 31/12/2000
R000 R000 R000
Assets
Non-current assets 61 286 58 538 64 805
Property, plant and
equipment 4 239 7 431 5 670
Intangible assets 728 431 697
Goodwill 5 192 - 5 485
Share incentive trust 4 056 4 056 4 056
Pre-paid Information
technology expenses 45 555 46 228 47 975
Non-current receivables 1 516 392 922
Current assets 67 699 65 064 31 731
Receivables and
prepayments 27 138 35 493 21 617
Taxation 423 - -
Cash and cash
equivalents 40 138 29 571 10 114
Total assets 128 985 123 602 96 536
Equity and liabilities
Capital and reserves 46 759 10 568 17 058
Ordinary shares and
premium 14 054 8 624 13 080
Preference shares 27 613 - -
Retained earnings 5 092 1 944 3 978
Non-current liabilities 27 051 36 069 29 528
Interest bearing
borrowings 100 6 009 1 022
Deferred income 26 951 30 060 28 506
Current liabilities 55 175 76 965 49 950
Trade and other payables 52 847 69 820 36 510
Bank overdraft 62 7 145 7 973
Current portion of
borrowings 2 266 - 5 467
Total liabilities 82 226 113 034 79 478
Total equity and
liabilities 128 985 123 602 96 536
Consolidated cash flow statement
Unaudited Unaudited Audited
six months six months year
ended ended ended
30/6/2001 30/6/2000 31/12/2000
R000 R000 R000
Cash flow from operating
activities
Cash generated from/
(utilised in) operations 15 517 (27 319) (46 600)
Financing (costs)/earnings (612) 347 (204)
Taxation paid - - (91)
Preference dividends paid - - -
Net cash generated from/
(utilised in)/operating
activities 14 905 (26 972) (46 895)
Cash (utilised in) investing
activities
Acquisition of subsidiaries - - 1 274
Purchase of broking
business (404) - (949)
Tangible and intangible
assets acquired (1 030) (1 875) (3 749)
Proceeds from disposal
of tangible and
intangible assets - 1 381 2 762
Net cash (utilised in)
investing activities (1 434) (494) (662)
Cash flow from financing
activities
(Decrease) in long-term
liabilities (922) (1 421) (2 841)
Net ordinary shares issued 974 - -
Net preference shares
issued 27 613 - -
(Decrease)/Increase in
short-term loans (3 201) 1 227 2 454
Net cash from financing
activities 24 464 (194) (387)
Net increase/(decrease)
in cash and cash
equivalents 37 935 (27 659) (47 944)
Cash and cash equivalents
at beginning of the year 2 141 50 085 50 085
Cash and cash equivalents
at end of period 40 076 22 426 2 141
Statement of change in equity
Retained
Capital earnings Total
Balance at 30 June 2000 8 624 1 944 10 568
Net profit 2 034 2 034
Ordinary shares 4 456 4 456
Preference shares - -
Balance at 31 December
2000 13 080 3 978 17 058
Net profit 1 114 1 114
Ordinary shares and premium 974 974
Preference shares 27 613 27 613
Balance at 30 June 2001 41 667 5 092 46 759
Commentary
Restructuring Programme
The final stage of Alacrity's restructuring programme was completed in March
this year with the issue of 26 862 500 redeemable cumulative preference
shares of 1 cent each to Gensec Bank and the acquisition by Pamodzi
Investment Holdings Limited of 34.99% of the issued share capital of
Alacrity. In addition the re-instatement of the Intermediary Guarantee
Facility of the Group in February 2001 strengthened the financial stability
of Alacrity. The raising of additional capital through the issue of
preference shares allows Alacrity to actively pursue its growth strategy and
to prosper through strategic acquisitions. The significance of Pamodzi as
our largest single shareholder places Alacrity at the forefront of black
empowerment in the Short-term Insurance industry and as such gives us a
unique marketing edge going forward. We are increasingly experiencing the
value and advantages of this association.
Profitability
Alacrity is pleased to report a significant increase in profitability for
the six months ending 30 June 2001. Profit for the six months is R 1.1
million or 0.82 cent per share, which is considerably better than the profit
of R 0.1 million or 0.09 cent per share recorded in the same period last
year.
This result is especially gratifying in that it was a particularly difficult
trading period which included a costly move of a substantial portion of the
company's personal lines book from one insurer to another. The company
initiated this move after discovering a serious breach of confidentiality by
our original supplier. The resultant disruption to our business was the main
reason for the modest 5% increase in trading income. The improved
profitability arises primarily through streamlining of operations as part of
the restructuring and increased management focus on cost control.
Headline Earnings
After adjusting for the amortisation of Goodwill arising from acquisitions,
headline earnings have increased from a R 1.5 million loss last year to R
1.6 million profit this year. The increase in headline earnings achieved
during the period under review is proof that the restructuring program
achieved the goals set originally.
Net Asset Value
Net asset value has increased from 8.15 cents per share to 13.91 cents per
share, an improvement of 71%.
Prospects
With the backing and support of Pamodzi and the recently announced
acquisition of a company providing employee benefits, consultancy and
advisory services, the Group is now well placed to offer the full range of
financial service solutions to a broader client base. This together with
numerous other initiatives we are currently pursuing should see the Group
well positioned to deliver significant growth and improved profitability in
the future.
By order of the board
Ndaba Ntsele Jan Erasmus
Chairman Group Chief Executive Officer
Johannesburg
26 July 2001
Directors
N A Ntsele (Chairman), J M D Erasmus* (Group Chief Executive Officer), D
Masson, M H Muller* B D James*, S D Levitt* (British), A Hayward, J J du
Plooy, S A Msibi, A D Dixon*, |
L Keel (Swiss), Z B H Nkosi*.
* Executive
Transfer secretaries
Mercantile Registrars Limited
11 Diagonal Street
Johannesburg 2001
Registered office
The Towers
28 Plein Street
Johannesburg 2001
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