| Mon 12 Nov 2001, 0:00 | | African Harvest Limited Audited Results For The Ye |
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Isin:ZAE000013538
Share Code: AHV
Key elements of the results for the past financial year are:
- Investment write-offs of R 80 million. Included in these were write-
offs on -
Associate companies: R61 million
Significant write-offs included Namibian Harvest Limited
(R36,2 million), Taita (Pty) Ltd (R9,0 million) and Risa Fund Managers
LLC (R7,0 million).
Private equity investments: R19 million
This included write-offs of the investments in Push SA (R6,0 million) and
Africam (R8,5 million).
- Unacceptably high expense levels.
- Substantial costs relating to the acquisition of teams that will not
recur.
- Attributable earnings for the year of approximately R1 million.
- Headline earnings of R47 million.
- Net asset value of 302 cents per share.
- Cash and near cash of R457 million. This translates into 163 cents
per share.
- Strong performance from the operating subsidiaries, particularly
from Fund Managers.
FINANCIAL REVIEW
for the year ended 30 September 2001
Group Group
2001 2000
R'000s R'000s
INCOME FROM OPERATIONS AND ASSOCIATES
(after impairments) 111,952 211,380
African Harvest Fund Managers 55,869 26,859
African Harvest Capital 63,536 63,895
African Harvest Regional Investments (39,803) 12,839
African Harvest Strategic Investments 32,350 107,787
Net interest income 30,710 27,449
Attributable earnings 838 135,598
Headline earnings 46,997 135,598
Weighted average number of shares in issue 280,590,005 280,115,913
Number of shares in issue 280,762,157 280,115,913
EARNINGS PER SHARE (cents)
- Attributable 0.30 48.41
- Headline 16,75 48,41
DIVIDEND PER SHARE (cents)
- Ordinary - 20.00
OTHER PERFORMANCE RATIOS
Total assets 1,504,236 1,664,795
Total shareholders' funds 846,930 845,796
Net asset value per share (cents) 302 302
Stock market capitalisation (R'000s) 729,982 1,400,580
Price high (cents) 550 1,250
Price low (cents) 250 475
Assets under management - total (R'billion) 10.0 7.6
Operating expenses (excl bonuses) to non-interest
income (%) 66.8% 25.8%
Operating expenses (excl bonuses) to non-
interest income (%)* 43.4% 25.8%
* Operating income adjusted for impairment of
investments in associated companies
AFRICAN HARVEST CAPITAL HOLDINGS
Investment Banking
The investment banking division had a satisfactory year generating good
profits on various low-risk transactions.
Specialised Fund Management
In spite of a poor first half this division ended the year strongly,
generating good profits.
Corporate Advisory
The team continues to acquire mandates and build their profile. Fees on
most of these mandates as well as on some significant work in progress will
however only accrue in 2002.
Private Equity
The otherwise good performance of African Harvest Capital was negatively
impacted by the impairment of various private equity investments. All
private equity investments other than Auction Alliance and Uthingo (the
lottery company) have been sold or written down to zero. The group has
withdrawn from the private equity market.
African Harvest Securities
In a tough trading environment where stock broking margins were under
pressure this business was able to increase revenue substantially. It has
broadened its client base, which has resulted in new relationships with a
substantial number of institutions and a growing market share. Income for
the year was R 23,1 million.
The African Harvest Capital Group generated income, before impairments, of
R 72,4 million, up from R63,9 million for 2000.
AFRICAN HARVEST FUND MANAGERS HOLDINGS
The business continues to grow strongly. Assets under management at 30
September 2001 were R10 billion, up from R 7,6 billion at the same date,
last year. Currently, assets under management are at the R 11,5 billion
mark.
During the year various investment performance awards were received and the
unit trust management company was one of the few in the country that
attracted positive inflows in very tight trading conditions.
The value team continues to generate very good investment performance and as
a result, has acquired significant mandates. The fixed-interest team has
established itself and is now gaining assets. The Rainmaker Unit Trust Fund
continues to perform exceptionally well and has attracted large inflows.
Income for the year was R 55,9 million, up from R 26,9 million for the
previous financial year.
AFRICAN HARVEST REGIONAL INVESTMENTS
Namibia
Namibian Harvest acquired a 65% stake in City and Savings Investment Bank
(CSIB). The bank held a book of advances which proved to be of far lower
quality than anticipated and with no recourse to the vendors. This resulted
in a write down of Namibian Harvest of R 36,2 million. CSIB is now being
merged with South West African Building Society (SWABO), which will create a
bank of significant size and viability.
Namibian Asset Management has R 2,5 billion of assets under management and
continues to trade profitably. Harvest Re-Insurance is the only local
reinsurer and is generating acceptable levels of profit.
African Harvest's stake in Namibian Harvest is carried at R12 million.
Tanzania
Vertex Financial Services continues to trade profitably. As a measure of
prudence this investment was however written down to its underlying net
asset value.
AFRICAN HARVEST STRATEGIC INVESTMENTS
The group disposed of its holding in Airports Company of South Africa (ACSA)
and acquired units in the Transformation Fund. A portion of this holding
will be realised over the ensuing financial year.
The group's ongoing focus will be on its operating subsidiaries and pending
significant changes in the market, it will no longer be making strategic
investments.
AFRICAN HARVEST REMUNERATION POLICY
The group's policy remains one of low basic packages and performance-related
bonuses. In the areas that generated acceptable profits, bonuses were
paid. Where losses were incurred, no bonuses were paid.
FUTURE PROSPECTS:
The following are being addressed:
- Expense levels, especially at head office, have been radically reduced.
The group's focus will be exclusively on the operating subsidiaries
rather
than on strategic or regional investment activities.
- An increase in the beneficial shareholding by empowerment parties is
being addressed.
- In light of the focus on operating subsidiaries and hence the existence
of
surplus capital, the board is considering returning R280 million of
capital to shareholders.
- The board has in principle approved a Staff Share Purchase Scheme. This
will have the effect that eligible staff acquire a 10% stake in the
business at or about net asset value.
DIVIDEND DECLARATION
No dividend will be declared or paid.
STRATE/DEMATERIALISATION
African Harvest Limited moved to the STRATE system on 9 July 2001.
JSE SECURITIES EXCHANGE SECTOR MOVE
The JSE Securities Exchange approved the transfer of the listing of African
Harvest from the Re-development sector to the main board under the Financial
Services sector on 25 June 2001.
INCOME STATEMENT
for the year ended 30 September
Group Group
2001 2000
R'000s R'000s
Fees and commission income 82,113 83,624
Net investment income 82,892 106,062
Interest income 42,832 34,061
Sundry income 8,450 4,185
TOTAL INCOME 216,287 227,932
Operating expenses 129,445 71,034
OPERATING INCOME 86,842 156,898
Interest expenses 12,122 6,612
NET OPERATING INCOME 74,720 150,286
Impairment of investments in associates 60,700 -
Goodwill amortised 38 -
NET INCOME BEFORE TAXATION 13,982 150,286
Taxation 12,045 32,197
NET INCOME AFTER TAXATION 1,937 118,089
Share of associates' retained (losses)/
income (803) 17,509
NET INCOME 1,134 135,598
Minority interest 296 -
NET INCOME ATTRIBUTABLE TO SHAREHOLDERS 838 135,598
Add: Goodwill amortised 38 -
Impairment of investments in
associates 60,700 -
Less: Profit on sale of associates 14,579 -
HEADLINE EARNINGS 46,997 135,598
BALANCE SHEET Group Group
at 30 September
2001 2000
R'000s R'000s
ASSETS
Business equipment 4,925 5,464
Investment in associate companies 56,424 201,161
Non-trading investments 348,770 282,241
Long-term loans 8,205 7,230
Goodwill 10,945 -
Deferred taxation 20,229 14,013
Other non-current assets 2,120 2,875
TOTAL NON-CURRENT ASSETS 451,618 512,984
Trading investments 122,740 82,521
Money market instruments 128,871 156,312
Trading account receivables 581,204 295,010
Other receivables 63,297 135,829
Funds on call and deposit 156,506 482,139
CURRENT ASSETS 1,052,618 1,151,811
TOTAL ASSETS 1,504,236 1,664,795
EQUITY AND LIABLITIES
Share capital 70,029 70,029
Share premium 264,196 264,196
Retained income 512,409 511,571
ORDINARY SHAREHOLDERS' FUNDS 846,634 845,796
Outside shareholders' interests 296 0
TOTAL SHAREHOLDERS' FUNDS 846,930 845,796
Long-term liability 40,155 80,004
Net liability in respect of structured
investments 1,305 2,980
Deferred taxation 11,955 13,510
Other non-current liabilities 162 -
NON-CURRENT LIABILITIES 53,577 96,494
Trading account liabilities 517,183 549,153
Provisions 1,222 1,065
Other liabilities 76,335 100,658
Taxation owing 2,168 1,978
Bank overdraft 5,089 2
Shareholders for dividends 1,732 69,649
CURRENT LIABILITIES 603,729 722,505
TOTAL EQUITY AND LIABILITIES 1,504,236 1,664,795
STATEMENT OF CHANGES IN ORDINARY SHAREHOLDERS' FUNDS
for the year ended 30 September
2000
R'000s R'000s
OPENING BALANCE 845,796 2,229,593
Capital reduction of 500 cents per share - (1,400,580)
Write-off of Goodwill - (62,792)
Net income 838 135,598
Dividend - (56,023)
CLOSING BALANCE 846,634 845,796
CASH FLOW STATEMENT Group Group
for the year ended 30 September
2001 2000
R'000s R'000s
Cash (utilised)/generated by operations (238,054) 377,092
Taxation paid (4,843) (40,914)
CASH (APPLIED TO)/GENERATED BY
OPERATING ACTIVITIES (242,897) 336,178
Net acquisiton of business (1,869) (941)
Other investment activities 2,262 392,638
CASH FROM INVESTING ACTIVITIES 393 391,697
Payment to shareholders (67,917) (811,353)
Cash (applied to)/generated from long-term
liabilities (47,740) 27,270
CASH APPLIED TO FINANCING ACTIVITIES (115,657) (784,083)
NET DECREASE IN CASH AND CASH EQUIVALENTS (358,161) (56,208)
Cash and cash equivalents at beginning
of year 638,449 694,657
Cash and cash equivalents at end of year 280,288 638,449
BUSINESS SEGMENTAL ANALYSIS - INCOME
(before impairments)
for the year ended 30 September
2001 2000
R'000s % of total R'000s % of total
Asset Management 55,869 32.2 26,859 13.7
Investment Banking and
Stock Broking 72,429 41.7 63,895 33.0
Regional - - 3,125 1.6
Strategic investments 45,157 26.1 99,992 51.7
173,455 100.0 193,871 100.0
BY ORDER OF THE BOARD
Mashudu E Ramano Philip Leon Campher Ruchsana Bhayat
Executive Chairman Chief Operating Officer Company Secretary
CAPE TOWN: 12 NOVEMBER 2001
This report is available on the African Harvest website:
http:/www.africanharvest.co.za
African Harvest House, Boundary Terraces, 1 Mariendahl lane, Newlands, Cape
Town, 7700. P.O. Box 23855 Claremont 7735. Tel: +27-21-670 4600 Fax: +27-
21-670 4651.
Directors: M.E. Ramano (Executive Chairman), F.J. Robertson (Deputy
Chairman), D.L. Barnes, C.B. Brayshaw, P.L. Campher, M.S. Dondolo, A.K.
Peer, G.R. Tipper Company Registration No: 1997/13827/06
Transfer Secretaries: Computershare Services Limited
