| Fri 2 Nov 2001, 0:00 | | Unifer Holdings Limited - Unaudited Consolidated |
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(Registration number 1997/010061/06)
UNAUDITED CONSOLIDATED RESULTS
FOR THE six months ENDED 30 September 2001
ISIN CODE : ZAE000027504
SHARE CODE : UNF
Balance Sheet
As at As at As at
30 Sept 30 Sept 31 March
Rand Thousands 2001 2000 2001
Assets
Property and equipment 56 322 46 465 63 131
Investments 75 348 54 942 58 579
Intangible assets 81 267 20 567 84 548
Deferred taxation 158 243 104 833 142 631
Advances (note 1,2) 5 565 752 3 412 990 4 338 885
Other assets 174 849 176 312 222 028
Negotiable securities 255 334 174 806 179 967
Cash and short-term
funds 357 758 513 661 323 638
Total assets 6 724 873 4 504 576 5 413 407
shareholders' funds 1 051 362 944 594 1 002 734
Ordinary shareholders'
equity 1 031 467 928 592 984 237
Minority interest 3 895 2 2 497
Debentures 16 000 16 000 16 000
Liabilities 5 673 511 3 559 982 4 410 673
Deposits and current
accounts (note 3) 5 125 243 3 202 935 3 818 413
Taxation payable 155 217 93 867 112 568
Other liabilities 393 051 263 180 479 692
Total equity and
liabilities 6 724 873 4 504 576 5 413 407
income statement
Six months Six months
ended % ended Year ended
Rand Thousands 30 Sept 2001 Change Sept 2000 March 2001
Interest income 655 316 478 054 996 406
Interest expense (297 143) (216 616) (443 833)
Net interest
income 358 173 37 261 438 552 573
Provision for
bad and doubtful
advances (222 312) 208 (72 239) (313 062)
Net interest income
after provisions 135 861 28 189 199 239 511
Non-interest income 350 502 172 128 913 432 179
Operating income 486 363 53 318 112 671 690
Operating
expenditure (310 321) 95 (159 033) (345 696)
Net income before
taxation 176 042 11 159 079 325 994
Taxation (60 317) (39 648) (90 729)
Net income after
taxation 115 725 (3) 119 431 235 265
Minority interest (3 236) - (2 517)
Discontinued
operations
- insurance - (7 141) (17 948)
Attributable
earnings 112 489 112 290 214 800
* Comparative figures have been adjusted taking into account the prior year
adjustment and are regrouped where necessary in accordance with current year
classifications.
reconciliation of earnings and headline earnings
Six months Six months
ended % ended Year ended
Rand Thousands 30 Sept 2001 Change Sept 2000 March 2001
Attributable
earnings 112 489 112 290 214 800
Intangible assets
amortisations 7 905 2 318 11 917
Headline earnings 120 394 5 114 608 226 717
Continuing
operations 120 394 121 749 244 665
Discontinued
operations - (7 141) (17 948)
Number of ordinary
shares in issue 1 305 1 305 1 305
Weighted number of shares
in issue (million) 1 275 1 305 1 284
Earnings per share
(cents) 8.8 3 8.6 16.7
Headline earnings per
share (cents) 9.4 8 8.8 17.7
Dividend per
share (cents) 5.0 - 4.5 4.5
statement of changes in shareholders' Equity
Six months ended Six months ended Year ended
Rand Thousands Sept 2001 Sept 2000 31 March 2001
Ordinary shareholders'
equity at beginning
of the period 984 237 875 613 859 023
Movement in share
capital and premium
Share capital and
premium raised - 144 145
Share issue expenses
applied against
share premium - (722) -
Treasury shares
arising from repurchase - - (31 837)
- (578) (31 692)
Movement in non-distributable
reserve
Insurance companies'
transfer (to)/from
distributable reserve (5 710) 1 198 4 523
(5 710) 1 198 4 523
Movement in distributable
reserves
Attributable earnings for
the year as
previously reported
Attributable earnings
for the period 112 489 112 290 214 800
Transfer (to)/from
non-distributable
reserve 5 710 (1 198) (4 523)
Dividends (65 259) (58 733) (57 894)
52 940 52 359 152 383
Ordinary shareholders'
equity at end of
the period 1 031 467 928 592 984 237
summarised cash flow statement
Six months Six months Year
ended ended ended
Rand Thousands September 2001 September 2000 31 March 2001
Cash generated
from operations 356 376 188 560 748 335
Dividends paid (65 259) (58 733) (57 897)
Increases in advances
and securities (1 524 545) (92 706) (1 157 887)
Increases/(decrease)
in deposits 1 319 089 (64 804) 547 524
Normal taxation (37 413) (20 007) (87 304)
Net cash generated/
(utilised in)
operating activities 48 248 (47 690) (7 229)
Net cash utilised in
investment activities (1 869) (35 682) (228 970)
Net cash utilised in
financing activities - (578) (31 692)
Net increase/(decrease)
in cash and
cash equivalents 46 379 (83 950) (267 891)
Cash and equivalents
at beginning
of period 311 379 597 611 579 270
Cash and cash
equivalents at
end of period 357 758 513 661 311 379
Segmental report
Six months Six months Year
ended ended ended
Rand Thousands Sept 2001 Sept 2000 March 2001
Net income before
taxation
Banking and
distribution 154 688 155 528 317 503
Insurance 21 354 3 551 8 491
176 042 159 079 325 994
Attributable earnings
Banking and distribution 92 851 109 633 209 716
Insurance 19 638 2 657 5 084
112 489 112 290 214 800
financial notes
As at As at As at
30 September 30 September 31 March
Rand Thousands 2001 2000 2001
1. Advances and loans
Category analysis:
Emerging market
term loans 4 896 884 2 417 407 3 495 891
Personal loans 175 020 275 940 165 926
Mortgage bonds 269 167 326 717 282 821
Card activities 188 419 204 820 173 542
Asset based finance 598 307 466 057 651 942
Gross advances 6 127 797 3 690 941 4 770 122
Provision for bad and
doubtful advances (562 045) (277 951) (431 237)
5 565 752 3 412 990 4 338 885
2. Provision for bad and
doubtful advances
Balance at
beginning of period 431 237 263 655 263 655
Provisions held by
subsidiaries
at acquisition - 8 951 7 004
Charged to the income
statement 222 312 72 239 313 062
Amounts written
off (net) (91 504) (66 894) (152 484)
Provision, end of
period 562 045 277 951 431 237
Analysis:
Specific provision 502 528 248 677 356 619
General provision 59 516 29 274 74 618
Total provisions 562 045 277 951 431 237
3. Deposit accounts
Call deposits 1 161 358 755 435 1 047 525
Term deposits 3 963 885 2 447 500 2 770 888
5 125 243 3 202 935 3 818 413
financial ratio's
As at As at As at
30 September 30 September 31 March
Rand Thousands 2001 2000 2001
Return on average
equity (%) 23.6 25.4 24.4
Return on average
assets (%) 4.0 5.1 4.6
Provision for doubtful
debts as a %
of advances 9.2 7.5 9.0
Cost-to-income ratio (%) 44 41 35
Non-interest income as a % of
operating income 49.5 33.0 43.9
Capital adequacy -
Unibank (%) 13.0 19.7 18.5
Net assets value per
share (cents) 80.9 71.2 76.7
commentary
Results review
For the reporting period UniFer showed advances growth in excess of budgets.
Total advances grew by 63% from R3.4bn to R5.6bn of which term loans
increased by 85% from R 2.4bn to R4.9bn.
Non-interest income contributed 50% to operating income and increased by
172%. This increase can mainly be attributed to improved performance by the
insurance operations and growth in advances. The trading environment over
the reporting period was impacted by the protracted implementation of the
agreement reached with government regarding payroll deductions on the Persal
system.
The bad and doubtful expense increased from R72,2m to R222,3m resulting in a
moderate growth in headline earnings of 5% from R114.6m to R120.4m. The
increase in the provisions in the income statement is as a result of the
following:
- The high growth in advances
- The effect of implementation of new collection mechanisms
- The delay in the implementation of the agreement between government with
respect to payroll deductions (Persal)
Whilst interest income grew by 37% the net interest margin declined from
9,0% to 7,2%. The lower margin is due to the regulatory changes,
consolidation of loans onto alternative collection mechanisms and the
implementation of the government's distressed borrower loan consolidation
process. Cost-to-income ratio increased from 41% to 44%. This is in excess
of our target ratio of 40%, and can be attributed to the enhancement of the
infrastructure to handle the larger loan volumes and costs associated with
the implementation of alternative collection mechanisms.
Performance Measurement of our core business
Given the fact that operational efficiencies were not fully optimised in the
changed business environment, we examined our core business and put in
place:
- a strengthened management team
- a new operational structure with the emphasis on defined efficiencies
- a single business platform comprising the three key areas- of:
distribution, operations and collections
For the remaining six months of the year we will focus on margin management,
operational efficiencies and improved collections.
unique opportunities
There is undoubtedly a growing and sustainable market at the low end of
banking. The top end will continue to be occupied by the major banks, while
the lower end of the market is open for a few choice operators of which
UniFer is already a leading player. We see having Absa as a majority
shareholder being a sustainable competitive advantage. The growth in
advances led to utilisation of the Absa funding facility, now standing at
R2.4 billion.
Absa as a growth partner not only provides solid balance sheet backing but
also contributes specific banking expertise that UniFer can call upon.
There's a powerful message in this association - it is the beginning of
bringing the informal and formal banking sectors together. A key focus for
the group will be to explore synergies in the competencies of both
organisations and meld them into a formidable force in the emerging markets.
We are able to extract systems value, transaction revenue, margin income and
non-funded income without having to replicate a costly infrastructure. These
opportunities for strong growth, retail lending and non-funded income, fit
neatly into UniFer's core business and defined market.
Strategic positioning
We are now ready to transform UniFer and take it forward - from a micro
financier to a provider of financial services and community banking
solutions in the emerging market.
Together with Absa we will jointly develop the low end of the financial
market where it converges with traditional retail banking, but UniFer will
continue to build on its own identity and enhance its reputation in the
emerging economic community.
In line with our broadened strategy in the emerging market the group aims to
become self-funded through a broader product base and an optimal product
mix. We believe this is achievable in the short-to-medium term.
The next six months will take the UniFer team into the new environment we
are creating in the micro financing industry, one that will provide a
community banking solution and into which few other micro-lenders will be
able to follow. This fact, together with our innovation, will be the key
that unlocks the value waiting in our tightly defined market. Over the next
three years UniFer will continue to claim more ground at the low end of the
banking environment on behalf of our senior partner, for the mutual good of
all stakeholders.
Prospects
As a result of the high level of growth in advances and the uncertainties of
the Persal situation, we are adopting a conservative view on provisions for
bad and doubtful advances for the 2002 financial year end. We therefore,
foresee headline earnings for the 2002 financial year to be in line with
that of 2001.
STRATE
The dematerialisation period applicable to UniFer commenced on 29 October
2001 with trading for electronic settlement on 19 November 2001 after which
no paper script will be accepted for settlement in respect of trades. We
therefore urge shareholders to dematerialize their shares as soon as
possible.
Accounting policies
The accounting policies adopted for purposes of this interim report comply,
in all material respects, with South African Statements of Generally
Accepted Accounting Practice as well as with applicable legislation, and is
consistent with the prior period.
Dividends
In line with our policy a dividend will be declared and paid once per annum
in approximately July of each year.
On behalf of the board
Dr. L Lipschitz GL Kretzschmar
Chairman Chief Executive
1 November 2001
Registered office: 27 Impala Road, Chislehurston, Sandton, 2146, Private Bag
X9941, Sandton, 2146
Contact details:
Tel: 27 11 259 7030
Website: www.unifer.co.za
Transfer Secretaries: Mercantile Registrars Limited, 8th Floor, 11 Diagonal
Street, Johannesburg, 2000
Directors: Dr L Lipschitz (Chairman), GL Kretzschmar* (CE), CJ Ferreira*, WD
Nel*, RJN Ballentine, M Bloom, ER Bosman, FJ du Toit, AM Griesel, A Maraney,
EW Tomlinson.
Group Secretary: KPE Davies *Executive
