| Wed 24 Oct 2001, 0:00 | | Moneyweb Holdings Limited - Unaudited Results For |
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September 2001
ISIN CODE : ZAE000025409
MONEYWEB HOLDINGS LIMITED
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2001
CONSOLIDATED INCOME STATEMENT
30 Sept 2001 30 Sept 2000 % Change
R 000's R 000's
Revenue 7 227 4 735 52,6%
Profit before interest, tax and 2 128 1 185 79,6%
depreciation
Depreciation 725 518 40,0%
Profit before interest and tax 1 403 666 110,7%
Interest received 355 415 -14,5%
Profit before tax 1 758 1 082 62,5%
Taxation 527 172 206,4%
Profit after tax 1 231 909 35,4%
Income from associate 101 0 100,0%
Headline earnings 1 332 909 46,5%
EPS - cents per share 1,57 1,14 37,7%
CONSOLIDATED BALANCE SHEET
Unaudited Audited
30 Sept 2001 31 March
2001
R 000's R 000's
ASSETS
Non-current assets
Fixed assets 3 081 2 914
Investments 8 726 1 563
11 807 4 477
Current assets
Trade and other receivables 3 496 2 208
Cash 6 341 9 127
9 837 11 335
Total assets 21 644 15 812
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 12 817 7 817
Accumulated profit and reserves 51 631 56 789
Goodwill (47 772) (53 331)
Ordinary shareholders' interest 16 676 11 275
Non-current liabilities
Deferred taxation 496 496
Current liabilities
Trade and other payables 2 444 2 096
Deferred revenue 489 446
Short term liabilities 244 779
Receiver of Revenue 1 295 720
4 472 4 041
Total equity and liabilities 21 644 15 812
CASH FLOW STATEMENT
30 Sept 2001 30 Sept 2000
R 000's R 000's
Cash flows from operating
activities
Cash generated by operations 2 123 1 185
Movements in working capital (940) (52)
1 183 1 133
Investment income 355 415
Deferred revenue 43 (235)
Taxation received / (paid) 47 (104)
Net cash flows from operating 1 628 1 209
activities
Cash flows from investing
activities
Acquisition of subsidiary (931) 0
Additions to fixed assets (892) (665)
Acquisition of investment (7 056) 0
0
Net cash flows from investing (8 879) (665)
activities
Cash flows from financing
activities
Amount paid in respect of deferred (535) (406)
payment for subsidiary
Proceeds of share issue 5 000 0
Net cash flows from financing 4 465 (406)
activities
Net movement in cash and cash (2 786) 137
equivalents for the period
Cash and cash equivalents at 9 127 10 133
beginning
Cash and cash equivalents at end 6 341 10 270
of period
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
6 Months to 6 Months to Year to
30 Sept 2001 30 Sept 2000 31 March 2001
R 000's R 000's
Balance at beginning of period 64 606 75 360 75 360
Net profit (loss) for the period (5 158) 909 (10 754)
Issue of ordinary shares 5 0 0
Share premium 4 995 6 597 0
Reduction in share premium 0 (6 597) 0
64 448 76 269 64 606
Financial results
Moneyweb Holdings has delivered a sparkling set of financial results for the
six months to end September with strong growth in its Internet and
Broadcasting activities comfortably offsetting continued decline in the
Newsletters operation. Revenue for the company as a whole rose 52,6% to
R7,2m (R4,7m) with online advertising income up 75% while direct revenue
from broadcasting almost trebled.
The measure which management uses to determine progress, Earnings Before
Interest, Tax and Depreciation (EBITDA) rose 79,6% to R2,1m (R1,2m) during
the six months. As forecast previously, there were significantly higher
depreciation charges due to the aggressive write-back of past investments in
developing the company's websites. This non-cash charge to the income
statement will remain at current levels during the second half, but will
drop sharply in the next financial year.
Despite the impact of lower interest rates and the higher depreciation,
during the six months under review the company's pre-tax profit rose 62,5% -
well above its projected average growth of 35% a year for financial years
2002 through to 2004.
Headline earnings per share, at 1,57c, exceeded by 37,7% the 1,14c reported
in the six months to end September 2000.
Commentary
Excellent progress was achieved once again during the six months to end
September 2001. Strong revenue and profit growth continues to reflect the
underlying strength of the company and its business model.
The Internet publishing operations remain the core of the business, with
advertising revenue growth of 75% ensuring that the online contribution now
exceeds 50% of total revenue. Audited page impressions averaged over 900 000
a month during the period under review compared with 395 000 a year ago.
Total registered users were up from 10 550 to over 15 000 in the same
period, while the company's websites now attract more than 60 000 unique
visitors a month.
Towards the end of the reporting period, after successfully re-negotiating
the original price, the company concluded the acquisition of Moneyweb.co.uk
at a final settlement figure of GBP 76 000 compared with the previously
agreed GBP 130 000. The deal was concluded at an exchange rate of just over
R12 to the Pound. Moneyweb.co.uk provides a suitable foothold into the UK
market, one which will be exploited at an appropriate time.
During the period under review the company also concluded the acquisition of
a 19,6% stake in Classic FM for five million Moneyweb shares and R2,5m cash.
This cements a successful partnership between the parties through the market
leading radio programme Classic Business. A once-a-week phone in programme
Personal Finance Live was launched in August and is already making a small
financial contribution. Classic FM is trading profitably, and made a small
direct contribution in the half year (income from associates). The
relationship with the P4 radio stations in the Cape and KwaZulu-Natal has
been terminated. A new broadcast partner, Fine Music Radio, has been secured
for Cape Town while others are being sought for other parts of the country.
A modest contribution to profit was derived from the joint venture with the
Mail & Guardian newspaper which carries Moneyweb content in its weekly Rands
and Cents section. The company's financial newsletters provide excellent
cash flow, but consistent with global trends, the readership base continues
to contract.
Prospects
The company's cash flow is strongly positive and together with existing
resources and a supportive shareholder base, positions Moneyweb to take
advantage of opportunities emerging from a fragmented and under-performing
media industry. Apart from its financial resources, the company has invested
heavily in building a strong editorial and administrative team, providing
the base from which to address new challenges. Numerous opportunities are
being considered, and although a preference is for partnerships and joint
ventures, outright acquisitions will also be considered. Discussions in this
regard are ongoing, but at early stages.
On the financial front, online advertising already booked for the second six
months for the financial year currently totals R1,8m (Sept 2000: R1,6m)
while broadcasting revenues are also running ahead of the same period a year
ago. As a consequence strong growth is once again anticipated at the EBITDA
level. In spite of higher non-cash depreciation charges, lower interest and
the absence of tax relief, management also expects the company will achieve
real growth in headline earnings per share for the year as a whole. Moneyweb
Holdings is on track to meet its stated pre-tax profit target of exceeding,
on average, 35% a year growth between the 2002 and the 2004 financial years.
Dividends
In the absence of a substantial acquisition, the company as it is currently
structured is positioned to declare a maiden dividend during the 2003
financial year.
AB Hogg TJ Wood
Chief executive Executive director
