| Mon 3 Sep 2001, 0:00 | | Unihold - Interim Results |
|
UNIHOLD LIMITED
(Incorporated in the Republic of South Africa)
Share code: UHS ISIN code: ZAE000007589
(Registration number 1968/000216/06)
INTERIM RESULTS
FOR THE 12 MONTH PERIOD ENDED 30 JUNE 2001
INCOME STATEMENTS
Unaudited Unaudited Audited
(Rands in thousands except 12 months to 6 months to 12 months
to
where otherwise stated) 30 Jun 01 31 Dec 00 30 Jun 00
Revenue
Continuing operations 759 420 385 875 692 138
759 420 385 875 692 138
Operating income 26 058 20 901 48 863
Total operating income 26 058 20 901 48 863
Exceptional items 9 224 19 008 (1 588)
Operating income before interest 35 282 39 909 47 275
Net interest (paid)/received (12 128) (6 039) (6 801)
Income before taxation 23 154 33 870 40 474
Taxation (1 833) (4 240) (12 026)
Net income after taxation 21 321 29 630 28 448
Equity accounted retained earnings 3 762 3 021 2 609
Net income 25 083 32 651 31 057
Net income attributable to
outside shareholders (13 831) (5 638) (3 884)
Net income attributable to
ordinary shareholders 11 252 27 013 27 173
Ordinary dividends - - -
Transfer to non-distributable reserves - - -
Retained income for the year 11 252 27 013 27 173
Retained income/
(accumulated loss) at
- beginning of the year 58 752 58 752 28 997
- change in accounting policies (5 546) 5 2 582
- end of the year 64 458 85 770 58 752
Weighted headline earnings per
share (cents) 2,2 8,7 31,2
Weighted earnings
per ordinary share (cents) 12,1 29,3 29,5
Dividends per share (cents) - - -
Ordinary shares in issue 93 549 92 080 88 699
Weighted average 92 815 92 080 92 080
CASH FLOW STATEMENTS
Unaudited Unaudited Audited
(Rands in thousands except 12 months to 6 months to 12 months
to
where otherwise stated) 30 Jun 01 31 Dec 00 30 Jun 00
Cash flow from operations
before working capital changes 3 567 20 007 45 215
Working capital changes 15 054 (51 260) (74 676)
Cash (utilised in)/generated
from operations 18 621 (31 253) (29 461)
Net cash (outflow)/inflow from
investing activities (121 032) 87 079 (20 741)
Net cash flows from
financing activities 91 481 (13 055) (10 256)
Net decrease in cash and
Cash equivalents (10 930) 42 771 (60 458)
Cash and cash equivalents
at the beginning of period (8 513) (51 284) 9 174
Cash and cash equivalents at the
end of the period (19 443) (8 513) (51 284)
BALANCE SHEETS
(Rands in thousands except Unaudited Unaudited Audited
where otherwise stated) 30 Jun 01 31 Dec 00 30 Jun 00
Capital Employed
Capital and reserves 107 137 148 399 116 733
Outside shareholders' interest in
subsidiary companies 60 818 72 530 6 585
Total shareholders' interest 167 955 220 929 123 318
Deferred tax liabilities 1 306 955 445
Vendors for business acquisition 37 010 24 258 51 922
Long-term liabilities 81 023 5 602 837
287 294 251 744 176 522
Employment of capital
(Property plant and equipment) 29 424 33 158 35 789
Investments in subsidiary companies
Goodwill 81 042 29 572 50 927
Intangible assets 6 258 7 405
Investments and loans 83 214 57 604 60 677
Deferred taxation 19 424 6 880 5 745
Net current assets 74 190 118 272 15 979
Current assets 290 472 342 161 344 794
Inventories 58 530 64 805 65 117
Accounts receivable 173 615 222 505 231 615
Taxation 2 416 1 476
Bank balances and cash 55 911 53 375 48 062
Current liabilities 216 282 223 889 328 815
Accounts payable 136 680 159 957 207 637
Taxation 1 107 12 633
Short-term borrowings 4 248 937 9 199
Bank overdrafts 75 354 61 888 99 346
287 294 251 744 176 522
Net asset value per ordinary
share (cents) 180 240 139
Debt equity ratio (%) 62 6,8 49,7
SEGMENTAL REPORTING
Unaudited Unaudited Audited
(Rands in thousands except 12 months to 6 months to 12 months
to
where otherwise stated) 30 Jun 01 31 Dec 00 30 Jun 00
Turnover
Information Technology 395 298 201 420 350 218
Communications and other 364 122 184 455 341 920
Corporate
Group turnover 759 420 385 875 692 138
Operating Income
Information Technology 23 818 15 432 38 282
Communications and other 12 458 6 521 16 833
Corporate (10 218) (1 052) (6 252)
Group operating income 26 058 20 901 48 863
PBIT
Information Technology 18 831 13 378 38 270
Communications and other 8 699 6 665 16 787
Corporate 7 752 19 866 (7 782)
Group profit before
interest and taxation 35 282 39 909 47 275
GROUP STATEMENT OF CHANGES IN EQUITY
Total
(Rands in thousands *Ordinary Ordinary Non-dis Dis- share-
except where shares share Share tributable tributable
holders'
otherwise stated) in issue capital premium reserves reserves equity
Balance at
30 June 2000 92 080 46 278 1 903 9 800 58 752 116
733
Write-off
of goodwill
Attributable profit 27 013 27 013
Translation reserve
movement (523) (523)
NDR arising from
disposal of
operations 5 881 5 881
Share accrual for
business acquired (272) (433) (705)
Balance at
31 December 2000 92 080 46 006 1 470 15 158 85 765 148
399
Write-off of goodwill -
Attributable profit (21 307) (21
307)
Translation reserve
movement (24 206) (24
206)
NDR arising from
disposal of
operations 1 726 1 726
Share accrual for
business acquired 1 469 768 1 757 2 525
Balance at
31 June 2001 93 549 46 774 4 953 (9 048) 64 458 107
137
Basis of preparation:
The second interim results have been prepared on the same basis as the
annual financial statements for the year ended 30 June 2000, with the
exception of the impact of Act129 - intangible assets. In terms of Act129
the group has written off, as an adjustment to opening retained income,
intangible assets relating to the development of a subscriber base.
COMMENTARY
Overview
Unihold Limited reports on a challenging and exciting period. During the
period under review, the group has continued to evaluate and evolve its
strategy. Strategic initiatives include the merger of the group's South
African Information Technology ("IT") interests with Siemens Business
Services ("SBS"), with Unihold retaining a 40% interest in the merged
entity.
Poor trading conditions in the South African IT and communications
sectors have continued to impact significantly on the reported earnings of
Unihold's local operations. The group's international operation, Pecaso
Limited ("Pecaso"), has continued to perform well above expectations.
Earnings per share and headline earnings per share amounted to 12,1
cents and 2,2 cents respectively for the 12-month period. These earnings,
which reflect the impact of economic conditions in South Africa over the
last 12 months, and the rationalisation steps taken to return all business
units to profitability, accord with the profit warning dated 8 June 2001.
The group's gearing at 62% will improve significantly over the next three
to six months on receipt of the proceeds of the sale of the Unihold Business
Solutions business to SBS and the intended flotation of Pecaso. Thereafter
the group will have a positive cash balance and a significantly enhanced
equity position resulting from the capital profits earned from the above
transactions.
Change in year-end
Unihold has changed its year-end from 30 June to 30 September, in order to
align with SBS's year-end. The group will thus report on a 15-month period
ending 30 September 2001.
International
Pecaso, the group's primary international investment based in the United
Kingdom and Germany, has embarked on a successful expansion programme,
establishing new operations in the USA, Spain and the Netherlands. As
previously reported, it is the group's intention to list Pecaso on the
London Stock Exchange at a time appropriate to market conditions. Further
detailed announcements will be made to shareholders in due course.
Unihold Business Solutions ("UBS")
The results of UBS were impacted by declining revenues in the second half of
the year, primarily as a result of delays in the award of a number of major
contracts that have been under negotiation. During the period, an extensive
cost rationalisation project was undertaken, with the division incurring a
once-off restructuring cost of R8,6 million. These steps were executed prior
to the conclusion of the merger transaction between UBS and SBS. The merger
transaction is currently subject to two outstanding conditions precedent,
being, shareholder approval and approval from the Competition Commission. It
is expected that these will be fulfilled by the end of September 2001. The
merged entity will trade under the SBS banner.
The merger through, the combination of UBS's eBusiness expertise and
SBS's outsourcing proficiency, backed by the capabilities and resources of
the world-wide Siemens group, will create an organisation with the requisite
critical mass to compete meaningfully in the local market. The new SBS will
be positioned to become one of the five major companies operating in the
South African IT services industry within the next two years. The merged
entity will employ more than 500 people with an annual turnover of
approximately R500 million, over 60% of which will be recurring annuity
income.
TaxbreakTM, one of the five eFiling service providers recently appointed
by the South African Revenue Services, is now operational after having
passed all technical trials. Taxbreak is developing an extensive and growing
subscriber base. This business does not form part of the SBS merger.
(TM - Trade Mark pending)
Knowledge Objects, an artificial intelligence solutions developer, which is
also not part of the SBS merger, continues to make progress in the
development of its ClaimPowerTM application which targets the healthcare
industry. Pilot sites with medical aid administrators are presently in
operation and initial results have been encouraging. (TM - Trade Mark
pending)
Unihold Communications ("UC")
During the period under review, UC disposed of Protea Data Systems to a
management-led consortium, in line with the group's intention to dispose of
certain non-core businesses in the communications division. The remaining
electronics and technology operations within UC are being refocused to
exploit export-led proprietary technology opportunities.
Future prospects
Having re-evaluated its strategy, Unihold concluded that, as a small
capitalisation player in the present market, its current strategy yields sub-
optimum value to its stakeholders. Following the listing of Pecaso and the
SBS/UBS merger, Unihold will hold material investments in two significant IT
businesses, namely Pecaso and SBS, with controlling interest in Taxbreak and
Knowledge Objects. A more detailed announcement will be made shortly
regarding Unihold's future strategy.
Dividend declaration
In accordance with present group policy, no dividend has been declared.
R J Khoza G D Harlow
Chairman Group Chief Executive
3 September 2001
