| Wed 29 Aug 2001, 0:00 | | Appleton: Final Results For The Sixteen Month Peri |
|
Appleton Limited
Registration No: 1999/004031/06
Sharecode: ALE ISIN number: ZAE000027488
("Appleton")
* Successful integration of Appleton, UTrade and RAD-AFC
* Headline earnings of R13,2 million
* Assets under management increase by 15% to exceed R3,9 billion
* Continued international expansion
FINAL RESULTS FOR THE SIXTEEN MONTH PERIOD ENDED 30 JUNE 2001
GROUP BALANCE SHEETS
Audited Audited
30 June 29 February
2001* 2000
R'000 R'000
ASSETS
Non-current assets 52 202 2 664
Fixed assets 26 168 804
Loan receivable 2 866 -
Investments 11 816 1 860
Goodwill and intangible asset 9 048 -
Deferred taxation 2 304 -
Current assets 118 446 32 002
Accounts receivable 73 007 30 445
Cash resources 45 439 1 557
Total assets 170 648 34 666
EQUITY AND LIABILITIES
Capital and reserves 112 160 24 187
Shareholders' funds 90 344 24 187
Outside shareholders' interest 12 275 -
Long-term liabilities 9 541 -
Current liabilities 58 488 10 479
Total equity and liabilities 170 648 34 666
* The company changed its year end to June during the period.
GROUP INCOME STATEMENTS
Unaudited Audited Audited
12 Months Year 16 months
Ended Ended ended
30 June 29 February 30 June
2001 2000 2001
R'000 R'000 R'000
Gross revenue 143 308 7 885 146 133
Operating income 16 398 2 617 16 625
Financing costs (2 567) (65) (2 659)
Income before taxation 13 831 2 552 13 966
Taxation 253 (365) 213
Net income after taxation 14 084 2 187 14 179
Income from associate 54 - 54
Attributable to outside shareholders (2 290) - (2 290)
Net attributable earnings 11 848 2 187 11 943
Number of shares in issue ('000) 1 096 538 200 000 1 096 538
Weighted average number of shares
in issue ('000) 1 127 304 190 000
895 002
Headline earnings per share (cents) 1,18 0,96 1,49
Earnings and fully diluted earnings
per share (cents) 1,05 1,15 1,33
NAV per share (cents) 8,24 12,09 8,24
RECONCILIATION OF HEADLINE EARNINGS
Unaudited Audited Audited
12 months year 16 months
ended ended ended
30 June 29 February 30 June
2001 2000 2001
R'000 R'000 R'000
Net attributable earnings 11 848 2 187 11 943
Amortisation of goodwill 4 391 - 4 391
Retrenchment costs 1 160 - 1 160
Fair value adjustment (4 134) (360) (4 134)
Headline earnings 13 265 1 827 13 360
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' FUNDS
Audited sixteen months ended 30 June 2001
Share Non-dis Reverse
capital tributable Take Over Retained
and premium reserves Adjustments Income
R'000 R'000 R'000 R'000
Balance at beginning
of period 22 000 - - 1 827
Change in accounting
policy to fair valuation
of long-term investments 360
Issue of share capital 944
Share premium
on shares issued 117 056
Share issue expenses (295)
Treasury stock held
by subsidiary company (5 702)
Foreign currency
translation reserve (430)
Reverse take over
adjustment (57 359)
Transfer to retained
income (18 757) 18 757
Retained income for
the period 11 943
Balance at end
of period 134 003 (430) (76 116) 32 887
COMMENT
Appleton is pleased to announce improved headline earnings of R13,2 million
for the year ended 30 June 2001, an increase of R7,0 million on the interim
results.
GROUP PROFILE
Appleton has three primary divisions which are illustrated as follows:
APPLETON LIMITED - Appleton International Asset Management
- Appleton Asset Management and
Investment Services (South Africa)
- Appleton Securities
GROUP STRUCTURE
Appleton International Asset Management focuses as a Global Multi Management
and Trading Advisor fund management business with offices in London, Dublin,
Guernsey and representation in New York. Clients' assets under management
currently exceed $260 million (R2,1 billion).
Appleton Asset Management and Investment Services (South Africa). The
asset management team currently manage R1,8 billion of assets for
institutional, retail and private clients. Investment Services provide
financial planning and fiduciary services to predominantly private clients.
Appleton Securities is a fully integrated stockbroking business,
providing traditional and online stockbroking and corporate broking services
to private and institutional clients. Additional activities include
arbitrage, proprietary trading and corporate finance.
OPERATIONAL REVIEW
The year under review was characterised by a difficult financial services
operating environment. This is particularly true in respect of the "smaller"
capitalised companies, which continued to be derated during the period.
Extreme volatility and low volumes on the JSE Securities Exchange South
Africa ("JSE") also had a general impact on the profitability of the company
and the securities division in particular. It is therefore pleasing to
report headline earnings per share of 1,18 cents (a 15% increase on interim
earnings of 0,55 cents).
The corporate structure of Appleton underwent substantial changes as a
result of the UTrade and
RAD-AFC transaction concluded at the beginning of the year. This
transaction has been accounted for as a reverse take over in terms of AC131
and has resulted in certain Reverse Take Over Adjustments as detailed in the
Condensed Statement of Changes in Shareholders' Funds.
At the time of the release of the interim results the directors had
proposed writing off goodwill resulting from the transaction in one year.
However, on the advice of the auditors, and in accordance with GAAP,
Appleton will write off the goodwill over a period of three years.
The segmental analysis of headline earnings is as follows:
* Appleton International Asset Management
- R4,0 million (30%);
* Appleton Asset Management and Investment Services (South Africa) - R4,5
million (34%);
* Appleton Securities - R4,7 million (36%).
Internationally, Appleton manages in excess of $260 million out of its
Guernsey, Dublin and London offices. Significant resources (R7 million) have
been utilised in the expansion of the international division during the
year. Appleton London has been awarded an IMRO license which will enable it
to expand into niche areas of the UK market.
Several of Appleton's Guernsey registered funds continue to achieve top
quartile performance and have done so since inception in 1997. During the
period, the administrative and trustee functions of these funds were changed
to ING Barings and Bordeaux, respectively.
Appleton Capital Management (Dublin) had a very successful year and has
surpassed all expectations. Significant inflows were awarded to this
operation which specialises in the management of alternative strategy hedge
funds and currency management advisory services. Appleton's international
operations generate annuity income in the form of asset management fees and
also have the ability to earn performance fees.
Highlights within the local asset management and investment services
operation include the consolidation of the five Johannesburg offices into
one central office and the successful integration of the institutional asset
management team of RAD-AFC, which has consistently achieved top quartile
performance over the past five years.
The local asset management operation generates annuity income from asset
management fees, which are received monthly based on the R1,8 billion of
assets managed on behalf of third parties.
The Securities operation is highly geared to market activity on the JSE.
This, together with significant cost increases in JSE-related charges,
impacted on the profitability of this division. Notwithstanding this,
increasing amounts of clients are switching to the internet-based trading
facilities offered by Appleton. This has enabled the online business to make
a positive contribution to group earnings.
ASSETS UNDER MANAGEMENT
Third party assets under management at the end of the period amounted to
R3,9 billion. Assets managed on behalf of South African clients represent
R1,8 billion (46% of total assets under management) while assets under
management internationally total R2,1 billion (54% of total assets under
management). In addition, Appleton acts as custodian for approximately R1,0
billion of client assets.
DECLARATION OF MAIDEN DIVIDEND
Notice is hereby given that a maiden dividend of 0,3 cents per share has
been declared.
Last day to trade cum dividend 14 September 2001
Last day to trade ex dividend 17 September 2001
Record date 21 September 2001
Date of payment 25 September 2001
Share certificates may not be dematerialised from Monday 10 September 2001
to Friday 21 September 2001, both days inclusive.
PROSPECTS
Appleton will continue to follow its strategy of growing assets under
management. Significant efforts and resources will be directed into the
expansion of the offshore operations. Locally, Appleton will continue to
realise the synergies which exist between the asset management and
securities divisions. The directors would like to extend their gratitude to
the loyal staff and clients of Appleton, without whom these results could
not have been achieved.
On behalf of the Board
C HULTZER B SNEDDON
Chairman Financial Director
Cape Town
29 August 2001
Directors:
C Hultzer (Chairman)*, S M Campbell, A H Diem, W Rosenberg, S D Shane, B
Sneddon
*non-executive
Following the PSG acquisition of RAD, it is anticipated that PSG will
appoint two non-executive directors to the board.
Group secretary:
D G Hunter
Registered office:
T.A.G House, Alphen Park, Constantia Road, Constantia, 7806
Appleton offices:
Cape Town, Dublin, Durban, Johannesburg, Guernsey, London, Port Elizabeth
Transfer secretaries:
Mercantile Registrars Ltd, 10th Floor, 11 Diagonal Street, Johannesburg,
2001
Website address: www.appleton.com
