| Mon 17 Sep 2001, 0:00 | | Chester - Interim Unaudited Results For The Six Mo |
|
Chester Investment Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1983/005300/06)
Share code: CES ISIN code: ZAE 0000 13348
("Chester" or "the Company")
Interim unaudited results for the six months ended 30 June 2001
Consolidated Income Statement
Six months Six months Year
ended Ended ended
30 June 01 30 Jun 00 31 Dec 00
R'000
Revenue 144,823 - -
Net operating
income 4,920 2,057 4,502
Attributable share
of income of
associates 5,111 4,676 11,702
- Recurring retained
equity earnings 4,978 4,393 9,087
- Dividends received 133 283 2,615
Minority
shareholders'
interest (1,605) - -
Profit before
taxation 8,426 6,733 16,204
Taxation 1,587 617 1,349
Profit after
taxation 6,839 6,116 14,855
Exceptional items 2,752 4,266 12,470
Investment surplus 2,495 247 8,451
Amortisation of
goodwill 257 - -
Prior year
adjustment - 4,019 4,019
Retained income for
the period 9,591 10,382 27,325
Number of shares in
issue (`000) 147,969 166,631 148,417
Weighted average
shares in issue(`000) 147,969 165,631 166,262
Earnings per share
(cents) 6,5 6,3 16,4
Headline earnings
per share (cents) 4,6 3,7 8,9
Consolidated Balance Sheet
R'000 30 June 01 30 June 00 31 Dec 00
Assets
Non-current assets 93,352 83,907 78,782
Investments 63,161 82,390 77,283
Tangible fixed
assets 23,172 102 84
Deferred tax 5,604 - -
Chester Share
Incentive Trust 1,415 1,415 1,415
Current assets 147,034 53,658 67,467
Accounts and loans
receivable 76,405 7,256 24,147
Inventory 38,610 - -
Prepaid taxation 1,247 1,127 865
Bank balances and
call deposits 30,772 45,175 42,455
Total assets 240,386 137,465 146,249
Equity and
Liabilities
Capital and reserves 183,442 137,401 146,062
Issued capital and
premium 37,775 46,503 38,222
Retained income 117,431 90,898 107,840
Non-distributable
reserves 4,891 - -
Minority
shareholders'
interest 23,345 - -
Current liabilities 56,944 64 187
Accounts payable 48,630 64 95
Bank overdraft 7,596 - -
Taxation payable 518 - 92
Total equity and
liabilities 240,386 137,465 146,249
Net asset value
per share (cents) 108,2 83,0 98,4
Consolidated Abridged Cash Flow Statement
Six Six Year
months months ended
ended ended
R'000 30 June 01 30 June 00 31 Dec 00
Cash flows from
operating activities 7,219 (2,518) 1,337
Cash outflows from
investing activities (26,051) (1,650) 3,424
Cash outflows from
financing activities (447) - (11,649)
Net movement in cash
resources (19,279) (4,168) (6,888)
Cash resources at
beginning of period 42,455 49,343 49,343
Cash resources at end
of period 23,176 45,175 42,455
Consolidated Statement of Changes in Equity
Share Share Non- Distri- Total
R'000 Capital Premium Distri- butable
butable reserve
reserve
Balance at
1 January 2000 17,403 32,468 - 80,515 130,386
Shares
repurchased
and
cancelled (2,561) (9,088) - - (11,649)
Net profit for
the period - - - 27,325 27,325
Balance at 31 14,842 23,380 - 107,840 146,062
December 2000
Discount on
acquisition
of subsidiary - - 4,891 - 4,891
Net profit for
the period - - - 9,591 9,591
Shares
repurchased
and
cancelled (45) (402) - - (447)
14,797 22,978 4,891 117,431 160,097
Nature of business
The Group's strategy to own operating subsidiaries and make material
investments in businesses in the manufacturing and distribution of consumer
goods, continued to unfold. The results for the period reflect this and
include for the first time the consolidated results of Chet Industries
Limited ("Chet").
Review of operations
The principal operating business is currently Chet, which became a 61,3%,
held subsidiary in March of this year as a result of Chester's mandatory
offer to Chet shareholders.
As Chet is now a subsidiary of Chester, its year end has been changed to
December. The reporting periods have now been brought into line at 30 June
2001 in Chester's consolidated group results. The abridged results of Chet
for the 10 months ended 30 June 2001 are contained in a separate
announcement by Chet today.
Shareholders of both Chester and Chet are referred to the cautionary
announcement dated 13 September 2001 advising that proposals regarding the
possible delisting of Chet are being considered. It is anticipated that an
announcement will be made shortly.
Your company also purchased additional shares in Brandcorp Holdings Limited
("Brandcorp"), which necessitated Chester then making a mandatory offer at
73c per share to all Brandcorp shareholders. The result is that Chester now
holds 37,9% of the voting issued share capital of Brandcorp. It is your
board's intention to increase this stake as circumstances permit.
Brandcorp has recently reported its results for its year ended 30 June 2001.
As these are now being published prior to the results of Chester, it is now
possible properly to align the reporting periods of the two groups.
Previously, Chester was incorporating the results of Brandcorp six months in
arrear and therefore a six month period must be brought to account. The
result is a prior year adjustment at 1 January 2000 amounting to additional
income of R4,019,000. Comparative earnings for both the six months to 30
June 2000 and the year ended 31 December 2000 have been restated
accordingly.
Consolidated net asset value per Chester share is now reflected at
consolidated book value without any revaluation of investments to market
prices.
The investment surplus of R2,495,000 arose on the unbundling of the
Santronics SA (Pty) Ltd investment and the resultant receipt of both cash
and shares in the JSE listed Amalgamated Appliance Holdings Limited. This is
not considered a long-term investment.
The only remaining private equity investments are those in the Polo Group
and Medical Distributors (Pty) Ltd. These investments, which are not
material, will be sold when suitable arrangements can be made at realistic
prices.
Change of Sector
The strategic nature of Chester's business has changed. It is no longer
investing in private equity. It is the group's strategy to own operating
subsidiaries and make material investments in businesses trading in the
retail sector. Accordingly application will be made to the JSE to transfer
the listing of Chester from the "Private Equity" to the "Retail" sector.
Review of results
Although income for the current reporting period is not strictly comparable
with last year because of the consolidation of an operating business,
earnings have increased by 11,6% to R6,839,000. In view of the reduced
number of shares in issue, headline earnings per share have increased by
24,3% to 4,6 cents per share for the half year.
The consolidated balance sheet remains strong, with low gearing and minimal
interest bearing liabilities. This solid base can support long-term
sustained growth.
Treasury shares
Shareholders are advised that the directors have resolved to cancel
17,400,000 shares in Chester Investment Holdings Limited held as treasury
shares by Chester Industries Limited, a wholly owned subsidiary of the
company. Application will be made for the cancellation and delisting of
these shares. This will have no effect on the net asset value or earnings
per share.
Dividends
No dividend has been declared for the half year. It is your board's
intention to consider a dividend for the full year.
By order of the board
Michael Dennill C.A. (S.A.)
Secretary
17 September 2001
Directors: M.Z. Levine (Chairman), L. Freidus (Managing), C.S. dos Santos
(Non-executive), L. Levine (Non-executive)
Registered office: 2nd Floor Thrupps Illovo Centre, Oxford Road, Illovo,
Johannesburg
Tel: (011) 442-4571 Fax (011) 442-3126
Email: lewisf@chesterfin.co.za
