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Fashion Africa Limited
(Reg No 1944/017149/06)
("Fashaf" or "the company")
(ISIN Code ZAE000016473)
(ALFA Code FSH)
SUMMARISED GROUP UNAUDITED RESULTS
FOR THE SIX MONTHS ENDED 31 AUGUST 2001
INCOME STATEMENTS
Unaudited Unaudited Audited
Six months Six months Eight months
ended ended ended
31/08/01 31/08/00 28/02/01
R 000's R 000's R 000's
Revenue 187 010 161 778 291 325
Cost of sales 123 948 119 544 195 770
Operating loss (18 860) (26 634) (15 762)
Net interest paid (2 471) (5 215) (4 992)
Reorganisation costs (1 265) (21 118) (1 745)
Write-off Share Scheme loan - (3 005) -
Provision for onerous lease - - (17 790)
Loss before taxation (22 596) (55 972) (40 289)
Taxation - - (4 765)
Net loss for the period (22 596) (55 972) (45 054)
Loss per share (cents) (2.0) (22.4) (17.9)
Headline loss per share (cents) (2.0) (21.0) (17.9)
BALANCE SHEETS
Unaudited Unaudited Audited
at at at
31/08/01 31/08/00 28/02/01
R 000's R 000's R 000's
ASSETS
Non-current assets
Property plant and equipment 35 676 34 601 36 936
Share Scheme loan 4 139 2 000 2 000
Deferred taxation - 4 765 -
39 815 41 366 38 936
Current assets
Inventories 106 340 109 669 86 515
Bank balance and cash 13 036 - 5 026
Amounts receivable 5 411 3 915 955
124 787 113 584 92 496
Total assets 164 602 154 950 131 432
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 92 906 60 821 59 985
ShareholdersO equity loans - - 25 567
Accumulated deficit (109 624) (52 251) (87 027)
Ordinary shareholdersO (deficit)/interest (16 718) 8 570 (1 475)
Non-current liabilities
Interest bearing borrowings 13 351 42 000 381
Current liabilities
Trade and other payables 125 824 96 419 88 848
Short term borrowings 41 405 6 372 42 449
Current portion of interest
bearing borrowings 221 314 74
Taxation payable 519 1 275 1 155
167 969 104 380 132 526
Total equity and liabilities 164 602 154 950 131 432
CASH FLOW STATEMENTS
Unaudited Unaudited Audited
Six months Six months Eight months
ended ended ended
31/08/01 31/08/00 28/02/01
R 000's R 000's R 000's
Cash utilised in operating activities (1 090) (13 446) (5 405)
Trading activities (13 785) (43 008) (27 953)
Working capital changes 12 695 29 562 22 548
Net interest paid (2 471) (5 215) (4 992)
Taxation paid (636) - (120)
Cash utilised in investing activities (5 081) (12 385) (9 762)
Cash flow from financing activities 18 332 40 356 (16 816)
Change in cash and cash equivalents 9 054 9 310 (37 095)
Cash and cash equivalents at
beginning of period (37 423) (15 682) (328)
Cash and cash equivalents at
end of period (28 369) (6 372) (37 423)
SUPPLEMENTARY INFORMATION
Unaudited Unaudited Audited
Six months Six months Eight months
ended ended ended
31/08/01 31/08/00 28/02/01
R 000's R 000's R 000's
Total ordinary shares in issue (000's) 1 112 746 252 897 252 897
Weighted average shares in issue (000's) 1 112 746 249 991 251 690
Net asset value per share (cents) (1.5) 3.4 (0.2)*
Depreciation 6 444 4 359 7 378
RECONCILIATION OF HEADLINE EARNINGS
Net loss for the period (22 596) (55 972) (45 054)
(Profit)/Loss on sale of fixed assets (103) 385 (34)
Share Scheme loan written off - 3 005 -
Headline loss (22 699) (52 582) (45 088)
RECONCILIATION OF EQUITY MOVEMENT
Shareholders' (deficit)/interest
beginning of period (1 475) 66 186 17 885
Shareholders' equity loans (25 567) - 25 567
Share issues 34 394 - 966
Share expense written off (1 474) (1 644) (839)
Net loss for the period (22 596) (55 972) (45 054)
Shareholders' (deficit)/interest
at end of period (16 718) 8 570 (1 475)
* Assume shares have been issued in respect of shareholders' loans.
COMMENTARY
New business initiatives
The rights offer was concluded during March 2001 in terms of which R31
million was injected into Fashaf. Pursuant to an agreement reached between
Vestacor, Fashaf's controlling shareholder, Vestacor has also agreed to
inject a further R40 million into the company by means of a specific issue
of shares for cash. An announcement in this regard has been published
elsewhere in this newspaper. This transaction is subject to shareholders'
approval. The proceeds of the issue of shares for cash will be deployed to
expand Fashaf's product offering through the development of a home and
personal division and the roll out of the Millers brand. The management of
Fashaf has undertaken extensive research into its market segment and its
customer base and is confident that the servicing of this customer base will
lead to sustainable growth and therefore attractive returns on these
investments should be achieved for shareholders.
Acquisition of the business of Sportshoe World and its re-branding
It was announced in the press on 14 September 2001 that Fashaf would
acquire, as a going concern the fixed assets, stock and lay-bye debtors,
which relate to 33 Sportshoe World stores. These stores are located
primarily in CBD areas of cities and towns throughout South Africa. After
the successful experimentation with a dedicated footwear offering and the
roll out of pilot stores, management was able to execute against the
strategy of developing a focused and carefully positioned footwear chain.
The acquisition was premised on the ability of Fashaf to re-brand these well
located Sportshoe World stores to the Millers retail format.
Change in year end
During the course of the current financial year Fashaf become a subsidiary
of Vestacor. The company accordingly changed its year-end to 28 February.
For this purpose the audited results for the eight months ended 28 February
2001 have also been included as comparative numbers.
Comments on results
The accounting policies applied in the preparation of these summarised
results are consistent with those applied in the previous year.
Consistent with the deteriorating market segment in which Fashaf trades, the
last six months of trading for Fashaf have been challenging. This trading
period is however traditionally weak as the bulk of Fashaf's turnover takes
place during the Christmas period.
Arising from the recent restructuring of head office staff Fashaf has
substantially reduced its fixed cost component of its overhead structure,
that will now adequately service the existing and new business initiatives.
The benefits of this will be realised during the course of the 2003
financial year.
The introduction of fresh capital and the new business initiatives referred
to above
will substantially improve the solvency and liquidity of Fashaf.
30 November 2001
Halfway House
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