| Wed 15 Aug 2001, 0:00 | | Cch - Audited Results For The Year Ended 30 June 2 |
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COMPUTER CONFIGURATIONS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1996/013764/06)
("CCH")
Audited results for the year ended 30 June 2001
SUMMARISED GROUP INCOME STATEMENT
June June
R'000 2001 2000
Revenue 421 545 618 044
Operating profit (21 016) 32 356
Exceptional items 104 985 (55 791)
Net interest (paid)/received (781) 5 158
Profit/(loss) before taxation 83 188 (18 277)
Taxation 4 074 (9 896)
Profit/(loss) after taxation 87 262 (28 173)
Attributable to outside shareholders 362 (405)
Attributable earnings/(loss) 87 624 (28 578)
Weighted average number of shares
in issue ('000) 103 472 101 648
Fully diluted weighted average number
of shares in issue ('000) 103 914 102 789
Headline earnings per share (cents) (16,8) 17,8
Earnings per share (cents) 84,7 (28,1)
Fully diluted earnings
per share (cents) 84,3 (27,8)
Note:
The exceptional items relate to the disposal of subsidiaries. The profit on
sale of Infracom (Proprietary) Limited ("Infracom") was calculated by using
the minimum purchase consideration of R165 125 million. The possible
increase in the selling price of up to R44,875 million is subject to future
earnings (refer to commentary below).
SUMMARISED GROUP CASH FLOW STATEMENT
June June
R'000 2001 2000
Cash flows from operating activities
Net cash utilised in
operating activities (18 193) (16 885)
Cash flows from investing activities
Net cash utilised in
investing activities (10 457) (418 565)
Cash flows from financing activities
Net cash generated from
financing activities 75 805 367 000
Net (decrease)/increase in cash and
cash equivalents 47 155 (68 450)
Cash and cash equivalents at
beginning of year 33 350 101 800
Cash and cash equivalents at
end of year 80 505 33 350
SUMMARISED GROUP BALANCE SHEET
June June
R'000 2001 2000
ASSETS
Non-current assets - 104 042
Fixed assets - 97 378
Development expenditure - 5 672
Investments - 992
Current assets 89 018 322 627
Inventories - 48 681
Accounts receivable 108 237 756
Normal taxation receivable 8 405 2 840
Bank and cash balances 80 505 33 350
Total assets 89 018 426 669
EQUITY AND LIABILITIES
Capital and reserves 65 600 165 919
Shareholders' equity 65 600 164 927
Outside shareholders' interest - 992
Non-current liabilities - 48 676
Interest bearing borrowings - 45 075
Deferred taxation - 3 601
Current liabilities 23 418 212 074
Accounts payable 2 203 194 464
Amounts due to vendors - 10 457
Current position of
long-term liabilities - 7 153
Claims: MGX 10 800 -
Normal taxation payable 10 415 -
Total equity and liabilities 89 018 426 669
STATEMENT OF CHANGES IN EQUITY
R'000 Group
Balance at 1 July 2000 164 927
Issued share capital and premium 1 597
Reserves for payments due to vendors
transferred to current liabilities (34 843)
Reduction in reserves for reduction
in investment (5 056)
Reduction in foreign currency
translation reserves (2 683)
Retained income for the period 87 624
Reduction on unbundling of MGX shares (145 966)
Balance as at 31 December 2000 65 600
COMMENTARY
Background
For the period under review the financial statements of Computer
Configurations Holdings Limited ("CCH") incorporated the following:
* Eight months of the information technology component of CCH. An e-business
systems integrator providing full service insourced and outsourced business
solutions, comprising information technology and professional services. On 1
March 2001 this business was disposed of to MGX Holdings Limited ("MGX");
and
* Five months of the infrastructure services component of CCH. This
component focused on full life-cycle infrastructure management and
establishes and manages infrastructure and facilities on behalf of clients.
On 1 December 2000 this business was disposed of to Tilca Infrastructure
Corporation (Pty) Limited, previously known as Lisianthus (Pty) Limited
("Tilca").
During the period under review turnover, as compared to the 12 months
period, reduced by 31,8% to R421,5 million, resulting in an operating loss
of R21,0 million. This resulted from reduced trading periods and also
reflects the market uncertainty arising from the sale of the CCH businesses.
The fully diluted headline loss per share is 16,8 cents as compared to
the fully diluted earnings per share of 84,3 cents. The difference
represents the profit on sale of subsidiaries.
After the distribution of 24,5 MGX shares per 100 CCH shares to CCH
shareholders the net tangible asset value per share declined by 60% to 63,4
cents. Assuming a share price of 810 cents per MGX share and on the
assumption that the unbundling has not occurred, the net tangible asset
value per CCH share increased by 66% to 261,9 cents. On a share price of 1
300 cents per MGX share at the time of writing of this announcement and on
the assumption that the unbundling has not occurred, the net tangible asset
value per CCH share increased by 142% to 382,0 cents. These can be compared
to the closing CCH share price of 251 cents on 24 January 2001, the date
prior to the issue of the circular concerning the disposal of certain CCH
businesses to MGX.
Disposal of certain businesses to MGX
CCH, in terms of Section 228 of the Companies Act, (Act 61 of 1973) as
amended ("the Act") disposed of all of the shares and claims it held and
beneficially owned (directly or indirectly) in each of the CCH subsidiary
companies other than Infracom (Proprietary) Limited ("Infracom"), plus R86
million in cash and interest thereon from 1 December, 2000 ("the debt
amount"), in exchange for 25 458 930 MGX shares ("the CCH disposal").
Details of the CCH disposal were contained in a circular to shareholders
dated 26 January 2001.
Shareholders approved the CCH disposal on Wednesday, 21 February 2001 and
all conditions precedent to the CCH disposal have been met. The
aforementioned MGX shares were unbundled during March 2001 to qualifying CCH
shareholders.
CCH has, as a first charge against the purchase consideration it received
from the disposal of the Infracom business (see right hand column),
discharged the debt amount, together with the interest thereon, in favour of
MGX.
Disposal of the Infracom business
Infracom, a wholly-owned subsidiary of CCH, disposed of the business of
Infracom, as a going concern, to Tilca in terms of Section 228 of the Act
("the Infracom disposal"). Details of the Infracom disposal were contained
in a circular to shareholders dated 12 February 2001.
Subject to the adjustments below, the maximum purchase consideration for
the Infracom disposal is R210 million. The purchase consideration will be
discharged by:
* the payment in cash of R165,125 million, together with interest thereon
from 1 December 2000 ("the effective date"), on 15 March 2001; and
* the payment of a further R44,875 million, together with interest thereon
from the effective date if the aggregated earnings of Infracom before
interest and tax ("EBIT") for the 2001 and 2002 financial years, ending June
of each year, ("aggregated EBIT") are greater than, or equal to R135
million. Should aggregated EBIT be greater than R86 million, but less than
R135 million, a proportionate payment, calculated in accordance with the
agreement, will be due. In the event that aggregated EBIT is less than R86
million no further payment will be due. Any payment due in terms of this
paragraph will be paid in cash within five days of the final determination
of the aggregated EBIT.
Shareholders approved the Infracom disposal on Wednesday, 28 February
2001 and all suspensive conditions to the Infracom disposal have been met.
Post Balance Sheet Event
Subsequent to the balance sheet date, MGX and CCH have agreed, against
the payment of R10,8 million, to settle MGX warranty claims against CCH
arising from the CCH disposal. The payment of R10,8 million is in full and
final settlement of all claims of whatever nature, known and unknown, MGX
may have against CCH. The CCH Board has obtained independent advice prior to
settling this matter.
Cash company
Pursuant to the CCH disposal and the Infracom disposal, the assets of CCH
comprised mostly cash. The listing of CCH on the JSE Securities Exchange
South Africa ("JSE") has been transferred to the "cash companies" sector of
the JSE Lists with effect from Monday, 19 March 2001.
It is the intention of the board of CCH to distribute all excess cash in
the CCH group to CCH shareholders. The balance of the purchase consideration
payable for the Infracom disposal, which is subject to earn outs, will be
paid into a trust account of which the CCH shareholders will be registered
as beneficiaries.
A circular containing details of the distribution of excess cash and
winding-up of CCH, will be forwarded to CCH shareholders in the near future.
For and on behalf of the board
A E Ling
(Chief Executive Officer)
15 August 2001
Directors: A E Ling, R T Dalais, E Gutierrez Garcia, R Shirley
