| Tue 9 Oct 2001, 0:00 | | M Cubed Holdings Limited - Unaudited Financial Res |
|
Financial Highlights
(formerly Escher Group Limited)
Registration number: 1998/014568/06
Share code: MCU ISIN: ZAE000033353
UNAUDITED FINANCIAL RESULTS
FINANCIAL HIGHLIGHTS
for the six months ended 31 August 2001
Headline earnings doubled to R12,8 million
Headline earnings per share up 42%
Assets under management: R33,4 billion
Assets under administration: R40 billion
Group Income Statement
Forecast* Unaudited** Unaudited Audited
12 months six months six months 12 months
ended ended ended ended
28 February 31 August 31 August 28 February
2002 2001 % 2000 2001
R'000 R'000 change R'000 R'000
254 501 Net revenue 75 933 93 39 361 102 231
(112 366) Cost of revenue (38 910) (20 204) (48 522)
142 135 Gross profit 37 023 93 19 157 53 709
(82 179) Operating expenses (23 961) (13 179) (31 702)
Operating profit before
59 956 net finance income 13 062 119 5 978 22 007
10 739 Net finance income 3 759 31 2 875 8 869
70 695 Profit before
taxation 16 821 90 8 853 30 876
(20 141) Taxation (4 299) (2 536) (9 813)
50 554 Profit after
taxation 12 522 98 6 317 21 063
400 Share of profit/(loss)
of associate (6) (52) (149)
Attributable to outside
252 shareholders 269 139 597
Headline earnings
51 206 attributable to 12 785 100 6 404 21 511
shareholders
(15 037) Amortisation of
goodwill (2 304) (240) (926)
Lease termination
payment
- arising from merger (3 000) - -
- Impairment charge - - (421)
Earnings attributable
36 169 to shareholders 7 481 21 6 164 20 164
Weighted number of
562 500 shares in issue
('000) 375 000 272 100 288 534
6,4 Earnings per share
(cents) 2,0 (13) 2,3 7,0
Headline earnings
9,1 per share (cents) 3,4 42 2,4 7,5
*Forecast as contained in the combined circular
*to shareholders dated 16 August 2001.
**Six months of Escher and one month of m3
Abridged Group Balance Sheet
Unaudited Unaudited Audited
31 August 31 August 28 February
2001 2000 2001
R'000 R'000 R'000
ASSETS
Non-current assets
Fixed assets 24 054 4 809 4 386
Investments 20 455 486 12 043 990 16 600 395
Goodwill 203 462 14 251 13 032
Investment in associates 775 48 51
Loans and advances 11 056 340 -
Deferred taxation 6 760 - -
Total non-current assets 20 701 593 12 063 438 16 617 864
Current assets 81 860 15 637 8 432
Cash and cash equivalents 45 150 26 297 55 475
Total assets 20 828 603 12 105 372 16 681 771
EQUITY AND LIABILITIES
Equity
Ordinary shareholders' funds 362 656 71 738 76 793
Outside shareholders' interest 448 1 378 707
363 104 73 116 77 500
Non-current liabilities
Provision for policyholder liabilities 20 416 334 12 020 383 16 575 752
Current liabilities
Trade and other payables 37 749 3 833 20 580
Taxation 11 416 8 040 7 939
49 165 11 873 28 519
Total equity and liabilities 20 828 603 12 105 372 16 681 771
Number of shares in issue ('000) 750 000 300 000 300 000
Net asset value per share (cents) 48,4 23,9 25,6
Net tangible asset value per share (cents) 21,2 19,2 21,3
Unaudited Group Statement of Changes in Equity
Non-
distri- Distri-
Share Share butable butable
capital premium reserve reserves Total
R'000 R'000 R'000 R'000 R'000
Balance at 1 March 2001 3 000 62 499 217 11 077 76 793
Issue of share capital 4 500 279 000 - - 283 500
Share issue expenses - (5 306) - - (5 306)
Increase in non-distributable
reserves - - 188 - 188
Attributable earnings - - - 7 481 7 481
Balance at
31 August 2001 7 500 336 193 405 18 558 362 656
Abridged Group Cash Flow Statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28 February
2001 2000 2001
R'000 R'000 R'000
Net cash flow from operating activities 3 790 539 1 287 365 5 867 727
Net cash outflow from
investing activities (3 800 864) (1 300 114) (5 851 233)
Net cash inflow from
financing activities - 39 046 38 980
Net (decrease)/ increase in cash and
cash equivalents (10 325) 26 297 55 474
Cash and cash equivalents
at beginning of period 55 475 - 1
Cash and cash equivalents at end of period 45 150 26 297 55 475
Introduction
m Cubed Holdings Limited ("m3 Holdings"), the product of the successful
merger of m Cubed Capital Holdings Limited ("m3") and Escher Group Limited
("Escher"), is pleased to announce results for the six months ended 31
August 2001.
The business has five complementary core competencies: institutional
asset management, investments for individuals, specialised investments,
structured products and outsourced administration services for third
parties.
The merger has brought substantial benefits for both organisations. m3
acquired enhanced critical mass in its asset management business and a
listing on the JSE Securities Exchange South Africa, while Escher gained an
individual investments and operations business with a more diversified
revenue mix. Both groups share similar investment philosophies and
complementary skills, providing synergies and economies of scale and a
number of opportunities in the local and international financial services
markets have opened up.
Financial Commentary
The results for the six months ended 31 August 2001 include six months of
Escher and one month of m3. The results for the comparative period are for
Escher only.
The results have been prepared using the same accounting policies as were
used in Escher's annual financial statements, in accordance with Statements
of Generally Accepted Accounting Practice.
Income Statement
Headline earnings attributable to shareholders increased to R12,8 million,
while headline earnings per share increased from 2,4 cents to 3,4 cents.
Balance Sheet and Cash Flow Statement
Shareholders' funds have increased to R363 million with cash reserves of R45
million, providing a platform for organic growth and further strategic
acquisition. Assets under management at 31 August 2001 were R33,4 billion
and assets under administration totalled some R40 billion.
Operational Review
The merger of m3 and Escher became effective on 1 August 2001. The group has
adapted its name to m3 Holdings Limited. A new group structure has been
implemented and all staff have moved into the same premises. An extensive
project has been undertaken to integrate the asset management businesses of
the two companies. At time of writing the new investment process was being
implemented and manager selection was close to completion.
The group has seen strong performance across most of its businesses. The
business units should begin realising synergies in the second half of the
financial year. Some major business was won during the period under review.
The life and asset management businesses were both ahead of budget at 31
August 2001, enjoying strong performance on the back of good product
offerings combined with sound investment performance. The individual
investment and international businesses have seen increased inflows. The
structured products division performed on budget, while Escher (UK), which
has yet to achieve critical mass, performed as expected. Assets under
administration in the administration outsourcing business reached R40
billion.
Because the results only reflect one month of m3, segmental reporting for
this period would be meaningless. However, we will provide segmental
reporting at year-end.
Prospects
On the back of its recent merger, m3 Holdings is now the largest independent
local multi-manager. Although the next six months are expected to be
challenging for investments and the markets generally, at the time of
writing the group is on track to achieve its forecast results for 2002,
unless there is a further deterioration in the investment environment.
Dividend
In line with group policy, no interim dividend has been declared. As stated
in the combined circular to shareholders dated 16 August 2001, the board of
m3 Holdings will be assessing the dividend policy of the new group.
For and on behalf of the board
Charles Bothner John Storey
Non-executive chairman Managing director
9 October 2001
Directors:
C M Bothner* (Chairman), J C Storey (Managing director), A Cabot-
Alletzhauser (American), P J Croeser, M M Dawes, L de Wit*, J F Mouton*, C A
Otto*, W Roux*, Alternate R M Budge* (Scottish), I H S Sinton*, T M van der
Heijden (*Non-executive)
Company secretary:
J Steyn
Registered office:
The Cube, Investment Place, 10th Road (off 2nd Avenue), Hyde Park 2024.
Telephone: (011) 340-2300; Telefax: (011) 880-8844
Transfer secretaries:
Computershare Services Limited, Edura House, 41 Fox Street, Johannesburg,
2001.
PO Box 61051 Marshalltown, 2107. Telephone: (011) 370-7700; Telefax: (011)
836-0792
Website: www.mcubed.co.za
--------------------------------------------------------------------------------
