| Thu 1 Nov 2001, 0:00 | | Hicor Limited - Summary Of Provisional Results |
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Summary of Provisional Results
for the six months ended 30 September 2001
Hicor Limited (Registration number: 1981/011496/06)
Abridged Group income (Unaudited) (Unaudited) (Audited) 12
statement 6 months 6 months months ended
R'000 ended 30 ended 30 31 March
September September 2001
2001 2000
Gross Revenue 17,235 24,067 40,992
Continuing operations 17,235 10,471 22,305
Discontinuing - 13,596 18,687
operations
Gross income 9,463 11,569 18,159
Operating expenses (9,133) (11,503) (19,097)
Net operating 330 66 (938)
income/(loss)
Continuing operations 330 279 673
Discontinuing - (213) (1,611)
operations
Losses on discontinued - (928) (4,438)
operations
Net finance costs (667) (1,926) (4,074)
Exceptional items (134) - (636)
Pre-tax profit/(loss) (471) (2,788) (10,086)
Income tax expense (435) 532 (283)
Profit/(loss) after (906) (2,256) (10,369)
taxes
Outside shareholders' - 38 -
interest
Net attributable (906) (2,218) (10,369)
income/(loss)
Headline earnings per 0.1 (0.4) 0.7
share (cents)
Earnings per share (0.9) (2,5) (10)
(cents)
Weighted shares in 100,000 90,000 100,000
issue (thousand)
Earnings before 2,347 1,541 885
interest, taxation and
amortisation (EBITA)
Abridged Group balance (Unaudited) (Unaudited) (Audited) 31
sheet 30 September 30 March 2001
R'000 2001 September
2000
Non-current assets
Fixed assets 662 1,465 847
Intangible assets 18,594 13,045 19,014
Investments - 7,085 -
Non-current 435 1,065 429
receivables
Current assets 18,273 29,406 16,999
Total assets 37,964 52,066 37,289
Capital and reserves
Shareholders' interest 759 8,114 1,977
Outside shareholders' - 86 -
interest
759 8,200 1,977
Non-current 26,384 13,793 25,763
liabilities
Current liabilities 10,821 30,073 9,549
Total equity and 37,964 52,066 37,289
liabilities
Net asset value per 0.8 9.1 2.1
share (cents)
Shares in issue 100,000 90,000 100,000
(thousand)
Abridged Group (Unaudited) 6 months (Audited) 12
cashflow statement ended 30 September 2001 months ended
R'000 31 March
2001
Cash (absorbed) /
generated from
operating activities 2,212 (12,648)
Continuing operations 2,212 (468)
Discontinuing - (12,180)
operations
Net finance costs (667) (4,074)
Tax paid - (16)
Working capital change (2,083) 6,276
Net cash (absorbed) / (538) (10,462)
generated
Cash flow from (930) 2,483
investing activities
Cash flow from 519 10,040
financing activities
Net movement in cash (949) 2,061
resources
Opening cash resources 653 (1,408)
Closing cash resources (296) 653
Additional information 6 months 6 months 12 months
R'000 ended 30 ended 30 ended 31
September September March 2001
2001 2000
Included in operating
income
Depreciation 171 256 356
Amortisation 1,846 1,219 1,467
Headline earnings
reconciliation
Net attributable (906) (2,218) (10,369)
income
Losses on discontinued - 928 6,049
operations
Exceptional item 134 - 636
Interest related to - - 3,860
discontinued
operations
Amortisation of 889 858 476
goodwill
Headline earnings on 117 (432) 652
continuing operations
Comments:
Results: Gross revenue from continuing activities increase by 64,6% from R
10,5 million to R 17,2 million compared to the same period last year. This
is attributable to the Group concentrating on core business after the major
restructuring which was discussed in the Annual Report as at 31 March 2001.
The Group continued to operate under difficult corporate and commercial
circumstances. The results include a negligible amount generated by the e-
commerce services which only started realising income in the latter part of
the last quarter. A reduction in operating expenses of R 2,4 million or
20,6% was due to managements' continuing efforts to identify and reduce cost
rationalisations.
Net finance costs incurred represent the servicing of the debts attributable
to the ongoing IT and telephone distribution. The decrease from R 1,9
million to R 0,7 million is the result of managements' endeavours in
renegotiating borrowings to the Group's benefit.
Taxation charges are relatively high when compared to profit before tax, but
this is as a result of the high amortisation charge levied on the intangible
assets. The Group's accounting policy in respect of the intangible assets is
conservative and the result is that the amortisation for the 6 month period
under review is higher than the total amount provided in the previous year.
The charge to the income statement is for the whole period under review,
whereas the prior year figure was not for the whole 12 month period.
Deferred tax assets are not recognised or provided for.
The Group's cash generation capabilities as measured by the earnings before
interest, taxation and amortisation (EBITA) has improved to R 2,3 million
from R 1,5 million in the same period last year. When compared to the
previous financial year, EBITA has practically tripled in the 6 month period
when compared to the whole 12 month period last year.
Balance Sheet: The current balance sheet reflects the continuing endeavours
of management to renegotiate, and where possible, to settle the debts and
commitments of the Group and it's previous subsidiaries which contributed
largely to the serious debt issues arising during last year.
The total capital and reserves reflect the impact that the discontinued
operations had on the Group in the previous financial year. The current
period's reduction is largely attributable to the non financial effect that
the Group's stringent amortisation policy had on the attributable profits.
Whilst this may appear excessive, management is still of the opinion that a
conservative approach to the accounting for intangibles should be followed.
Management remains committed to assessing and implementing viable
alternative solutions to the recapitalisation and restructuring of the
Group's balance sheet. It is expected that progress in this regard will be
noted at the forthcoming Annual General Meeting of shareholders to be held
on 23 November 2001.
Contingent Liabilities: The Group is currently in the process of defending a
claim from a group of individuals that transacted for the sale of their
business with a previous subsidiary for which this company bound its self as
co-principal debtor. The original case was successfully defended some years
ago, but has now been escalated to the Appeal Court and Hicor intends
resisting the possible claim. Further details are available in the
financial statements for the period ending March 2001.
Cross guarantees to a financial institution exist between group companies
and Phonetech (Pty) Ltd which has been placed into liquidation. However it
is expected that the amounts will be covered by the proceeds from the
collection of the outstanding debtors.
Prospects: Our core business going forward is healthy and our prospects are
excellent. The company has a blue chip client base, particularly in the
finance and telecommunications sectors and are becoming strategic partners
for many of our clients in terms of their IT infrastructures and business
services. Our products and services address high growth industries and are
also able to compete with major international IT players.
Errata : Your attention is drawn to the errata which is published herewith,
in respect of the period ending March 2001.
HICOR
Annual Report 2001
Additional information relating to discontinued operations.
The directors of Hicor Limited believe that the following
information, related to Phonetech (Pty) Ltd (a former subsidiary)
subsequent to the release of the Annual Report, will be of benefit
to all interested parties. This errata should be read in conjunction
with the Annual Report that was sent to shareholders on 28 September
2001
1. Discontinued operations
The results for the year includes a loss of R6,793,000 that relates
to the telecommunication business that was discontinued during the
year. This amount represents the total exposure that the group had
in terms of its investment in and its loan accounts to the company.
In the published results that were sent to shareholders on 28
September 2001, the total loss
was included under the following line items in the income statement:
R'000
Operating profit 1307
Exceptional items -6793
Finance cost -1307
-6793
The following table sets out the detailed results of the
discontinued operation:
Sales 18687
Cost of sales -15162
Operating expenses -5136
Operating loss from normal -1611
operations
Exceptional items - loss on -2777
discontinuance
Finance cost -2405
Net loss -6793
The effect of the above on the Income Statement and related notes to
the financial statements is as follows:
Income statement for the 12 Group Group
months ended 31 March 2001 2001 2001
R'000 R'000
Before After
Sales 34864 39955
Continuing operations 21268 21268
Discontinued operations 13596 18687
Cost of sales 21267 22833
Continuing operations 11730 7671
Discontinued operations 9537 15162
Gross profit 13597 17122
Other operating income 1037 1037
Operating expenses -12244 -19097
Operating profit/(loss) 2390 -938
from normal operations
Continuing operations 2603 673
Discontinued operations -213 -1611
Exceptional items -9500 -5074
Finance costs -2976 -4074
Loss before tax -10086 -10086
Tax -283 -283
Net loss after tax -10369 -10369
Outside shareholders' 0 0
interest
Earnings attributable to -10369 -10369
ordinary shareholders
Earnings per share in cents (10.4) (10.4)
Headline earnings per share (0.4) (4.8)
im cents
Continuing operations 2.4 0.7
Discontinued operations (2.8) (5.5)
Notes Group Group
2001 2001
R'000 R'000
Before After
21. Exceptional
items
Expenses relating
to discontinuance
of:
Consumer electronic 2071 1661
business during
2000
Retail 6793 2777
telecommunications
business during
2001
Interest on loans 2762 3860
related to
discontinued
operations
Impairment charges: 636 636
Share incentive
trust
Provision against 0 0
investment in
subsidiaries
Less: Interest -2762 -3860
transferred to
continuing
operations
9500 5074
22. Finance cost
Interest paid
Continuing
operations
Finance lease 54 153
Factoring charges 727
Bank loans and 102 347
overdrafts
Other 200 227
Discontinuing
operations
Loans 2762 2762
3118 4216
Interest received
Continuing
operations
Bank 8 8
Other 134 134
142 142
Net finance costs 2976 4074
Interest paid on
loans relate to
financing obtained
by discontinued
operations. Due to
surety provided by
Hicor Limited,
interest expense
accruing from the
loans will in
future be included
in operating
activities.
24. Earnings per
share
The calculation of
earnings per share
is based on:
Earnings -10369 -10369
attributable to
shareholders
Weighted average 100000 100000
number of shares in
issue ('000)
Earnings per share (10.4) (10.4)
in cents
Headline earnings
for continued
operations is based
on:
Earnings -10369 -10369
attributable to
shareholders
Exceptional items 9500 5074
Goodwill write-off 476 476
Headline earnings -393 -4819
for the year
Operating profit 0 1611
from discontinued
operations
Interest related to 2762 3860
discontinued
operations
Headline earnings 2369 652
for continued
operations
Weighted average 100000 100000
number of shares in
issue ('000)
Headline earnings
per share in cents
Continuing 2.4 0.7
operations
Discontinued (2.8) (5.5)
operations
(0.4) (4.8)
2. Receivables and Prepayments
The last sentence in Note 7 to the Financial Statements
should read :
Trade debtors to the amount of R 3,685,000 has been
ceded as security for banking facilities.
3. Contingencies
Cross guarantees to a financial institution exist
between group companies and Phonetech (Pty) Limited
which has been placed into liquidation. However it is
expected that the amounts will be covered by the
proceeds from the collection of the outstanding
debtors.
