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Fintech Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/010524/06)
Share code : FIN
ISIN code : ZAE000015244
Unaudited consolidated interim financial results for the six months ended 31
August 2001
Income statement
Six months
ended
31 August Six months ended Year ended
2001 31 August 2000 28 February 2001
Continuing Continuing
Figures in R000 operations Total operations Total
Revenue 95 838 75 988 712 908 177 253 1 525 849
Operating
income 30 363 34 593 66 502 57 097 148 938
Amortisation
of goodwill - (1 263) (3 486) (1 263) (14 839)
Interest paid
to outside
shareholders - - (1 804) - (2 764)
Exceptional
items - - - - 180 177
Income before
taxation 30 363 33 330 61 212 55 834 311 512
Taxation 9 108 9 997 16 175 8 514 26 270
21 255 23 333 45 037 47 320 285 242
Attributable
to outside
shareholders 962 398 8 401 2 224 30 462
Attributable
to ordinary
share-
holders 20 293 22 935 36 636 45 096 254 780
Weighted average
number of
ordinary shares
in issue
for the
year (000) 125 666 124 454 124 454 125 548 125 548
Basic earnings
per share
(cents) 16.1 18.4 29.2 35.9 202.9
Headline
earnings per
share (cents)
(note 1) 16.1 19.4 32.0 36.9 71.2
Notes
1. Attributable earnings is reconciled to headline earnings as follows:
Attributable
earnings 20 293 22 935 36 636 45 096 254 780
Goodwill
amortised - - - - 14 839
Net surplus on
disposal of
subsidiaries
and businesses - - - - (180 177)
Headline
earnings 20 293 22 935 36 636 45 096 89 442
2. As a result of the restructure of the group and the unbundling of its
interests in Bytes Technology Group Limited, by way of a dividend in specie,
the group's cash resources were depleted by R176 million. Had a similar
gearing structure been in place for the six months ended 31 August 2000,
headline earnings per share would have been 13.7 cents for that period and
not 19.4 cents as reported.
3. The accounting policies and methods of computation followed in this
interim report are consistent with the annual financial statements for the
year ended 28 February 2001, and take into account statements of Generally
Accepted Accounting Practice.
4. No dividend has been declared for the period under review.
5. Diluted earnings per share and diluted headline earnings per share are
not materially different from basic earnings per share and headline earnings
per share.
Balance sheet
Six months Six months Year
ended ended ended
31 August 31 August 28 February
Figures in R000 2001 2000 2001
Assets
Non-current assets 973 435 860 962 855 791
Fixed assets 2 887 55 674 3 966
Goodwill - 41 661 -
Advances to rental
finance customers 966 028 731 931 845 792
Deferred taxation 4 520 31 696 6 033
Current assets 72 595 517 523 166 915
Inventories - 147 975 1 951
Accounts receivable 72 595 287 983 138 467
Net cash and cash
equivalents - 81 565 26 497
Total assets 1 046 030 1 378 485 1 022 706
Equity and liabilities
Ordinary shareholders'
equity 172 496 422 978 164 770
Outside shareholders'
interests 18 990 69 959 18 028
Non-current liabilities 717 450 526 192 621 498
Long-term liabilities 672 227 490 406 585 681
Deferred taxation 45 223 35 786 35 817
Current liabilities 137 094 359 336 218 410
Short-term borrowings
and bank overdrafts 94 153 - 138 202
Other current
liabilities 42 941 359 336 80 208
Total equity and
liabilities 1 046 030 1 378 465 1 022 706
Shares in issue at end
of period (000) 125 666 125 609 125 666
Net asset value
per share (cents) 137.3 336.7 131.1
Supplementary information
Six months Six months Year
ended ended ended
31 August 31 August 28 February
Figures in R000 2001 2000 2001
Capital expenditure 2 112 6 943 46 462
Depreciation 630 13 375 37 828
Operating lease
commitments 2 960 108 468 3 480
Summarised cash flow statement
Six months Six months Year
ended ended ended
31 August 31 August 28 February
Figures in R000 2001 2000 2001
Operating activities 52 951 50 014 64 380
Cash generated by
operations 72 059 95 873 163 545
Interest paid to outside
shareholders - (1 804) (2 764)
Taxation (6 541) (11 612) (63 958)
Cash available from
operating activities 65 518 82 457 96 823
Net dividends paid (12 567) (32 443) (32 443)
Investing activities (121 945) (184 575) (473 938)
Advances to rental
finance customers (120 236) (107 932) (221 813)
Acquisition of interests
in subsidiaries and
operations - (71 930) (213 730)
Disposal of subsidiaries
and operations - - (52 915)
Net other investing
activities (1 709) (4 713) 14 520
Financing activities 86 546 35 474 117 201
Net funds generated/
(utilised) in period 17 552 (99 087) (292 357)
(Net borrowings)/cash
and cash equivalents
- at beginning of period (111 705) 180 652 180 652
- (Net borrowings)/cash
and cash equivalents
at end of period (94 153) 81 565 (111 705)
Statement of changes in equity
Six months Six months Year
ended ended ended
31 August 31 August 28 February
Figures in R000 2001 2000 2001
Ordinary shareholders'
interest at beginning
of period 164 770 386 227 386 227
Change in accounting
policy - 33 849 33 849
Restated balance 164 770 420 076 420 076
Share issues - 115 177
Attributable earnings 20 293 36 636 254 780
Ordinary dividend (12 567) (33 849) (33 849)
Unbundling of group's
interest in Bytes Technology
Group Limited - - (476 414)
- unbundling dividend - - (242 119)
- reduction in share
premium account - - (234 295)
Ordinary shareholders'
interest at end of
period 172 496 422 978 164 770
Message to stakeholders
General
This report covers the first six months of trading since the unbundling and
the establishment of Fintech as a focused financial services business
concentrating on financing office automation and information technology
equipment and security systems.
Shareholders will appreciate that the current period results are not
comparable with those of prior periods due to the significant restructuring
carried out both during and at the end of the financial year ended 28
February 2001. The restructure involved the distribution, in specie, to
Fintech's shareholders of the shares held in Bytes Technology Group Limited
("BTG") which were acquired from the sale of the group's former non-
financial services subsidiaries together with the shares received from the
underwriting of the BTG rights offer. This distribution of approximately
3.18 billion shares was valued at approximately R476 million and the net
result of the restructure was a R176 million reduction in the group's cash
resources.
This gearing increase has left the group with a capital structure more
appropriate to a focused rental and lease financing business.
Operations
The momentum started three years ago in expanding the business into a
broader customer base has been sustained with capital financed increasing by
14.2% during the period under review.
Technologies Acceptances, which focuses mainly on the Altron Group customer
base, increased its capital financed to R691 million from R648 million at 28
February 2001, with earnings slightly down on last year.
Corporate Finance Solutions and Spartan Computer Rentals (the 50/50 joint
venture with arivia.kom) both achieved exceptional growth in capital
financed, revenue and earnings. The latter company benefited from new
systems and processes introduced in the last financial year enabling it to
more aggressively pursue new financing opportunities. The broad range of
offerings provided by Spartan Computer Rentals creates exciting
opportunities for continued growth by this company.
In the light of recent high level of business failures, it is pleasing to
report that bad debts remain well below industry standards. Prudent credit
advance policies and appropriate credit enhancement procedures remain the
cornerstone on which the business's success has been created. Despite an
aggressive growth strategy there is no intention to depart from these firmly
established principles.
Financial
As discussed earlier, comparison to the prior year has been complicated by
the unbundling and restructuring of the group. On an equivalent gearing
structure to that currently employed, headline earnings per share increased
from 13.7 cents to 16.1 cents, an improvement of 18%.
Gearing at 4,4:1 still provides the business with the opportunity to further
increase its borrowings, thereby enabling it to continue with its planned
aggressive growth. This growth plan is possible to achieve, given the
impeccable advances profile and performance history of the company and is
well supported by its traditional providers of funds.
Prospects
The directors are currently evaluating the strategic direction and
consequent capital structure of the group.
Growth in capital financed in the second half of the year is not expected to
be at the same rate as in the first half of the year, given the current
uncertainty in market conditions. A further improvement in earnings is
expected in the second six months. However, this should be seen against the
potential effect that the recent tragedy in the United States may have on
global economies.
On behalf of the Board
David Redshaw Ian Pennel
Chairman Chief Executive Officer
2 October 2001
These results are available on the Internet at http://www.fintech.co.za
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