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EC Hold Limited
Registration number 1998/020093/06
("EC-Hold" or "the company")
Unaudited group results
for the six months ended 30 June 2001
Consolidated income statement
Unaudited Audited
6 months to 16 months to
30 June 31 December
2001 2000
R'000 R'000
Revenue 53 788 72 439
Operating income/(loss)
before depreciation 2 972 (3 080)
Depreciation (611) (1 744)
Operating income/(loss) 2 361 (4 824)
Net finance income 677 3 126
Net income/(loss) before taxation 3 038 (1 698)
Taxation (912) 491
Income/(loss) attributable to ordinary
shareholders 2 126 (1 207)
Weighted average number of ordinary
shares
in issue (thousands) 104 040 104 040
Headline earnings/(loss) per
ordinary share (cents) 2,0 (1,2)
Earnings/(loss) per ordinary share
(cents) 2,0 (1,2)
Summarised consolidated balance sheet
Unaudited Audited
30 June 31 December
2001 2000
R'000 R'000
Assets
Non-current assets 38 888 34 008
Fixed assets 1 112 1 397
Research and development 4 611 3 669
Deferred tax 27 747 28 659
Financial assets 5 418 283
Current assets 47 494 52 351
Cash resources 19 936 26 990
Other current assets 27 558 25 361
Total assets 86 382 86 359
Equity and liabilities
Shareholders' equity 50 214 48 088
Vendor loan 7 600 7 600
Non-current liabilities:
Interest bearing 8 728 8 018
Current liabilities 19 840 22 653
Total equity and liabilities 86 382 86 359
Number of ordinary shares
in issue (thousands) 104 040 104 040
Net tangible asset value per
ordinary share (cents) 16,9 14,9
Summarised consolidated cash flow statement
Unaudited Audited
6 months to 16 months to
30 Jun 31 December
2001 2000
R'000 R'000
Cash generated from operations
before working
capital changes 2 973 (3 104)
Working capital changes (4 498) 6 537
Net finance income 677 3 126
Cash flow from operating activities (848) 6 559
Cash flow from investing activities (6 404) (24 960)
Cash flow from financing activities 710 (851)
Taxation paid (512)
Net (decrease)/increase in cash and
cash equivalents (7 054) (19 252)
Cash and cash equivalents at the
beginning of the period 26 990 46 242
Cash and cash equivalents at the end
of the period 19 936 26 990
Statement of changes in equity
Non- Outside
Distrib- distrib- share-
Share Share utable utable holders'
capital premium reserve reserve interest Total
Balance
1 January
2001 1 040 11 118 6 768 28 923 239 48 088
Attributable
earnings 2 126 2 126
Balance
30 June
2001 1 040 11 118 8 894 28 923 239 50 214
Commentary
Operational review
In our report on the results for the sixteen month period to 31 December
2000 we stated that following the loss for the period the businesses in the
group had been restored to a satisfactory level of profitability. This is
reflected in the results for the six month period to 30 June 2001.
All the businesses have shown growth which we believe to be sustainable
following the re-organisation and re-focus of their operations.
Investments
As reported previously EC Hold acquired a 16% interest in Correlate and owns
22% of Connect One. The development of these businesses has been hampered by
current market sentiment around IT investments, but management is satisfied
that adequate progress is being made and is optimistic that these
investments will perform as expected. During the period under review
additional bridging finance was provided for Correlate pending further
investor funding rounds.
The recent investment in Intervate Solutions is progressing according to
plan and the operation has met all its milestones to date.
MGX
Shareholders are referred to the cautionary announcement published by the
company and the announcement by MGX Holdings Ltd ("MGX") on 2 August 2001 in
which it was announced that MGX acquired additional shares in EC Hold to
take its interest in the company to 72,5%. MGX also expressed its intention
to buy out the balance of the minorities on terms that are subject to the
outcome of its appeal against the ruling of the Securities Regulation Panel
as disclosed in our announcement published on 10 August 2001.
EC-Hold and MGX have commenced discussions to more closely align the
operations of the two companies and enable both companies to more
effectively leverage off the synergies that exist between them.
Prospects
The company is expected to continue to operate profitably despite difficult
trading conditions. Its trade investments are expected to provide
satisfactory returns over the medium term.
Dividends
Following consultations with its major shareholders, the directors have
decided that the interests of the shareholders are best served if the
company does not pay a dividend. Cash generated will be re-invested in the
group.
Amir Lubashevsky, Chief executive officer
15 August 2001
Directors
A Lubashevsky, T H Appel, R Brickhill, RShirley*
* Non-executive
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