| Thu 20 Sep 2001, 0:00 | | Fedsure Holdings - Interim Report |
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FEDSURE HOLDINGS
SHARE CODE: FDS
ISIN CODE: ZAE00002622
Interim report for the six months ended 30 June 2001
Basis of preparation
Fedsure is in the process of winding up its activities. Accordingly these
accounts have been prepared on a break-up basis. Full provision has been
made for both current and future liabilities and asset impairments. These
provisions and asset impairments were taken into account in the unbundling
circular dated 30 March 2001.
Following the disposal of the financial services and insurance businesses to
Investec as at the end of 2000, the corresponding figures at 30 June 2000
and 31 December 2000 bear no meaningful comparison to figures for the
current period.
Summarised consolidated income statement
Six months Year
ended ended
30 June 31 Dec
(unaudited) 2000
2001 2000 (audited)
Rm Rm Rm
NET INCOME 50 308 508
Fedsure Holdings Limited 73 - -
Dividend received from Investec
(Note 1) 85 - -
Interest paid (6) - -
Expenses (6) - -
Discontinued operations (23) 308 508
Healthcare (23) 26 12
Life insurance - 220 421
Financial services and
international - 62 75
EXCEPTIONAL ITEMS (407) (428) 2245
Provision for guarantees
(Note 2.1) (29) - (41)
(Loss)/profit on disposal
of businesses, realisation
of assets and closure
costs (Note 2.2) (374) - 4072
Other (Note 2.3) (4) (428) (1786)
(LOSS)/EARNINGS ATTRIBUTABLE
TO ORDINARY SHAREHOLDERS (357) (120) 2753
Weighted average number
of ordinary shares in
issue (millions) 175,1 171,5 172,7
ATTRIBUTABLE EARNINGS PER
SHARE (cents) (203,9) (70,0) 1594,1
Notes
1. Dividend received from Investec
The Investec final dividend of 440 cents per share for the year ended 31
March 2001 was received by Fedsure on 27 June. The Fedsure board declared a
dividend equal to the Investec dividend in respect of the entire 19 212 204
Investec shares received by Fedsure ("the consideration shares") in terms of
the Investec transaction. This amounted to R84,5 million in aggregate or
48,27 cents per Fedsure share, and was paid paid on 27 June to Fedsure
shareholders registered as such at the close of business on 15 June.
2. Exceptional items
2.1 A further provision of R29 million (31 December 2000: R41
million) has been made for guarantees Fedsure has given relating to funds
administered by TMA, giving a total provision of R70 million.
2.2 This exceptional item includes losses on disposal of the
Healthcare businesses, closure costs, the writedown of fixed assets to
market value and the cession of the Fedsure Holdings current account with
Fedsure Investments to Investec.
2.3 Other exceptional items relate to:
Six months Year
ended ended
30 June 31 Dec
2001 2000 2000
Rm Rm Rm
Write-off of goodwill
relating to
Healthcare businesses (4) (8) (397)
Net adjustment to
shareholders' assets
of Fedsure Life in respect
of immediate
annuities and non-unitised
market
movements on shareholders'
assets - (420) (1 310)
Adjustment to fair
value of Norwich Life
on acquisition - - 152
Rebate on administration
fees charged
to the Fedsure Health
open
medical scheme - - (231)
(4) (428) (1 786)
Summarised consolidated balance sheet
30 June 31 Dec
(unaudited) 2000
2001 2000 (audited)
Rm Rm Rm
Assets
Non-current assets 52 37 695 426
Investment assets 12 36 834 98
Fixed assets 40 516 306
Goodwill - 345 22
Current assets 2 174 7 481 5 156
Consideration shares (Note 1) 1 762 - 4 592
Receivables (Note 2) 182 2 349 418
Cash and cash equivalents 230 5 132 146
Total assets 2 226 45 176 5 582
Equity and liabilities
Capital and reserves 1 458 1 643 4 480
Outside shareholders' interest - 266 -
Non-current liabilities
Insurance funds - 39 830 1
Current liabilities and provisions 768 3 437 1 101
Total equity and liabilities 2 226 45 176 5 582
Notes
1. Consideration shares
30 June 31 Dec
2001 2000 2000
Consideration shares represent
proceeds received on sale of
insurance and financial
services assets
Total shares received (31 December
2000: receivable) from Investec
19 212 204 - 19 212 204
Initial unbundling (11 415 437) - -
Retention shares 7 796 767 - 19 212 204
Rm Rm Rm
Valued at 30 June 2001 at R226 per
share (31 December 2000:
R226) 1 762 - 4 342
Cash consideration receivable - - 250
1 762 - 4 592
Please also refer to note 4 (Post-balance sheet events).
2. Receivables
Receivables at 30 June 2001 include an amount owing by Netcare of
R128 million relating to the disposal of Medicross by Fedsure Healthcare.
The suspensive conditions relating to this transaction have now been met.
3. Contingent liabilities
Investec has intimated claims against Fedsure with an aggregate value
of R120 million. Also, shareholders have been previously advised that a
claim of R98 million has been lodged against NMA Corporate Fund Managers
(Pty) Limited ("NMA"), a wholly-owned subsidiary of Fedsure Healthcare, by
Eskom. No provision has been made in the accounts for these claims.
4. Post-balance sheet events
The 7 796 767 Investec shares held by Fedsure at 30 June 2001 were
valued at R226 (31 December 2000: R226), being the Investec share price
prevailing at the time of the initial negotiations. At the date of this
report the Investec share price is approximately R170.
Summarised consolidated statement of changes in equity
Six months Year
ended ended
30 June 31 Dec
(unaudited) 2000
2001 2000 (audited)
Rm Rm Rm
Share capital and share premium 1 048 1 007 1 048
Balance at beginning of year 1 048 923 923
Arising from issue of shares - 84 125
Non-distributable reserves - 78 1
Balance at beginning of year 1 73 73
Disposal of subsidiaries (1) - (73)
General - 5 1
Retained earnings 410 558 3431
Balance at beginning of year 3 431 817 817
Loss attributable to ordinary
shareholders (357) (120) 2 753
Dividends (2 664) (139) (139)
Paid (85) (139) (139)
In specie (Investec shares) (2 579) - -
1 458 1643 4 480
Summarised consolidated cash flow statement
Six months Year
ended ended
30 June 31 Dec
(unaudited) 2000
2001 2000 (audited)
Rm Rm Rm
Cash flow from operating activities (110) 1172 1375
Cash flow from investing activities 86 (618) (1126)
Cash flow from financing activities 133 84 154
Net movement in cash and cash
equivalents 109 638 403
Cash and cash equivalents at
beginning of year 146 4494 222
Cash and cash equivalents of subsidiaries
disposed (25) - (479)
Cash and cash equivalents at end
of period 230 5132 146
Accounting policies
General
The accounting policies adopted for the purposes of this report comply, in
all material aspects, with South African Statements of Generally Accepted
Accounting Practice, as well as with applicable legislation.
Comparative figures
Where necessary, comparative figures have been adjusted to conform to
changes in presentation in the current year.
Sale of businesses to Investec Group Limited ("Investec")
Shareholders have been previously advised that Fedsure sold its financial
services and insurance businesses to Investec with effect from 31 December
2000 for a purchase consideration of 19 212 204 Investec shares and R250
million in cash. The conditions precedent to the disposal were fulfilled by
1 June 2001, on which date the disposal became unconditional.
Second unbundling of Investec shares
Details of a further unbundling of Investec shares is contained in an
announcement to shareholders dated 20 September 2001.
For and on behalf of the Board
J A BARROW
Chairman
Johannesburg
20 September 2001
Registered office Transfer secretaries
Fedsure House Mercantile Registrars Limited
1 De Villiers Street First National House
Johannesburg, 2001 11 Diagonal Street
Johannesburg, 2001
Directors
J A Barrow (Chairman), D H Mitchell (Deputy Chairman),
A I Basserabie (Executive Director), D G Barrow, H S Herman,
Dr A P H Jammine, M E King, S Koseff, D M Nurek, M I Sacks
Fedsure Holdings Limited
Reg No 1969/012384/06
Share Code: FDS ISIN Code: ZAE000002622
