| Mon 3 Dec 2001, 0:00 | | The Laser Group Limited - Interim Report |
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The Laser Group Limited
(Incorporated in the Republic of South Africa)
(Reg No. 1971/010431/06)
Share code: LSR ISIN: ZAE000017166
INTERIM REPORT
for the six months ended 30 september 2001
HIGHLIGHTS
HEADLINE EARNINGS PER SHARE UP 22%
CASH GENERATED BY OPERATIONS UP 14%
ABRIDGED BALANCE SHEET
Unaudited Unaudited Audited
30 Sep 2001 30 Sep 2000 31 Mar
2001
R'000 R'000 R'000
ASSETS
Non-current assets
Fixed assets 95 884 87 099 92 976
Intangible assets 32 579 21 661 28 182
Investments and other assets
(unlisted, at fair value) 742 9 354 6 549
Net cash and cash equivalents 2 519 770 9 640
Current assets 59 990 67 800 54 814
Total assets 191 714 186 684 192 161
EQUITY AND LIABILITIES
Shareholders' interest 100 016 86 100 95 545
Property liabilities 17 724 24 300 22 089
Non-current 15 292 21 341 19 222
Current 2 432 2 959 2 867
Other interest-bearing liabilities 11 040 7 178 7 786
Non-current 6 994 4 405 1 454
Current 4 046 2 773 6 332
Vendor liabilities 17 823 29 082 26 933
Non-current 4 482 12 977 12 428
Current 13 341 16 105 14 505
Other current liabilities 44 862 42 088 40 256
Taxation 249 (2 064) (448)
Total equity and liabilities 191 714 186 684 192 161
Net asset value per share
- tangible assets (cents) 265 240 261
Net asset value per share
- total assets (cents) 392 321 371
Gearing (%) 26.2 35.7 21.2
Current ratio (times) 1.3 1.6 1.4
STATEMENT OF CHANGES IN EQUITY
Six months Six months
ended 30 Sep ended 30 Sep
2001 2000
R'000 R'000
Ordinary shareholders' funds at
beginning of the period 95 545 105 572
Share capital issued 264 -
Net profit for the period 4 207 5 102
Goodwill written off - (24 574)
Ordinary shareholders' funds at
end of the period 100 016 86 100
CASH FLOW STATEMENT
to Sep 2001 to Sep 2000
R'000 R'000
Cash flows from operating activities
Cash generated by operations 15 797 13 826
Working capital changes 1 206 4 240
Net interest paid (3 742) (1 073)
Normal taxation paid (1 184) (254)
Net cash inflow from
operating activities 12 077 16 739
Net cash outflow to
investing activities (5 387) (10 807)
Net cash outflow to
financing activities (13 811) (19 381)
Net decrease in cash and
cash equivalents (7 121) (13 449)
Net cash and cash equivalents at
beginning of period 9 640 14 219
Net cash and cash equivalents at
end of period 2 519 770
INCOME STATEMENT
Restated Restated
(note 2) (note 2)
Six months Six months Twelve
months
ended 30 Sep ended 30 Sep ended 31
Mar
2001 2000 2001
R'000 R'000 R'000
Turnover 183 124 156 358 321 824
Revenue 101 472 83 477 164 958
Disbursements 81 652 72 881 156 866
Other income 6 903 6 185 12 521
Operating expenses (173 171) (147 497) (308 448)
Earnings before interest, depreciation,
amortisation and taxation 16 856 15 046 25 897
Depreciation (2 456) (1 500) (3 782)
Imputed interest on vendor liabilities (1 632) (2 207) (4 722)
Other interest (3 035) (1 732) (3 233)
Operating profit 9 733 9 607 14 160
(Loss)/profit on sale of fixed assets,
property and investments (12) 97 6 330
Amortisation of goodwill, trademarks
and research costs (2 621) (1 079) (1 677)
Write down of loans (244) - -
Profit before exceptional items 6 856 8 625 18 813
Exceptional items - - (946)
Profit before taxation 6 856 8 625 17 867
Taxation charge (2 295) (3 523) (5 847)
Profit after taxation 4 561 5 102 12 020
Loss from associate (354) - (392)
Net profit for the period 4 207 5 102 11 628
Number of shares 25 482 26 830 25 762
Headline earnings per share (cents) 27.4 22.4 52.5
Earnings per share (cents) 16.5 19.0 44.3
Diluted earnings per share (cents) 16.0 19.0 44.3
Headline earnings reconciliation
Net profit for the period 4 207 5 102 11 628
Adjustments:
Amortisation of intangible assets 2 528 1 002 1 473
Loss/(profit) on sale of assets 12 (97) (258)
Other reconciling items 244 - 684
Headline earnings 6 991 6 007 13 527
Notes
1. The accounting policies applied are in compliance with South African
Statements of Generally Accepted Accounting Practice.
2. Subsequent to the annual results to 31 March 2001 being released, the
Group adopted AC 130 "Provisions, Contingent Liabilities and Contingent
Assets" and applied this retrospectively. In terms of AC 130, vendor
liabilities require restatement to present value with the related interest
charge being expensed.
The interim September 2000 figures and the March 2001 figures have been
restated to accord with the current accounting policies.
The restatement of the results for the period has reduced the headline
earnings per share by 6.4 cents to 27.4 cents whilst the results for the
comparable period are reduced by 8.2 cents to 22.4 cents and for the year to
31 March 2001 a reduction of 18.3 cents to 52.5 cents per share.
3. Capital commitments - authorised and contracted for in respect of road
distribution centre R3 million.
4. Fixed assets include R59 million investment properties which are not
depreciated, as the directors are of the opinion that the market value is in
excess of the current book value.
OVERVIEW
Under the current economic climate, the group achieved satisfactory results.
Headline earnings reflected a 22% increase over the comparable period last
year. The cash generated by the group's businesses increased to R15.8
million and has been used to partially settle vendor liabilities and
mortgage bonds. Further investments were made in the group's infrastructure.
Substantial progress was made in developing the two operating divisions,
Laser Logistics Solutions and Laser Human Resource Solutions, to provide
integrated solutions. These integrated services provide the group with the
opportunity to deliver full functional outsourcing solutions to our
customers.
Acquisitions have been successfully integrated and vendors have remained
with the group. Particular emphasis is being placed on identifying and
recruiting top quality management and staff.
Operational strategy and overview
Laser Logistics Solutions has benefited from operational synergies,
efficiencies and cross-selling opportunities in the period. All three
business units, Laser International (Clearing and Forwarding), Laser Express
(Air and Road), and Laser Distribution have contributed significantly to
earnings and operational cash flow. The integration of the road express
businesses and the continued enhancement of management information systems
in each of the business units have enabled the group to improve its market
penetration in the period. The construction of the Johannesburg distribution
hub is scheduled for completion this calendar year. It is anticipated that
this facility will provide further opportunities to expand the business.
Laser Human Resource Solutions has been adversely affected by the fall
off in contingent recruitment and relocation services. Despite this, most of
the HR businesses have contributed to earnings and cash flow, supporting the
group's decision in the latter part of last year to move towards consulting
and product driven services. The operational structures have been
reorganised during the period to facilitate the provision of services and
enhanced relationship management across the HR value chain. During this
reporting period the group increased its effective holding to 50% in
virtuallyHR (previously 35%), by acquiring a 100% share in the holding
company.
Financial results
The group results are, subsequent to the restructuring, directly
comparable to the prior period. Comparative results have been restated as
recorded in note 2 above.
Income statement and earnings per share
The turnover of the group has increased 17% principally through organic
growth. The integration of the businesses has enabled the group to service
its customers nationally and expand on its range of services. Headline
earnings per share increased by 22% to 27.4 cents per share. Operating
margins have been maintained in the Laser Logistics Solutions division and
have been diluted by the negative market conditions in contingent
recruitment and the increased interest costs.
Balance sheet
The balance sheet as at 30 September 2001 reflects the group's continued
focus on cash management. The debt to equity ratio of 0.26 is within
management's gearing objectives.
Prospects
The group is well positioned for sustainable organic growth and continues to
find ways of improving operating efficiencies. A substantial portion of
vendor liabilities will be settled by April 2002 and will impact positively
on future earnings. The group has invested in management and infrastructure
to achieve the growth objectives set.
The Laser Logistics Solutions division continues to benefit from the
integration of operations, creating cross-selling opportunities.
Laser HR Solutions division continues to broaden its range of products
and services. Plans have been implemented to maximise the returns from the
contingent recruitment and relocation services operations.
During the period numerous acquisitions were evaluated. The group will
continue to seek additional avenues to enhance shareholder wealth.
The group is on target to meet its growth objective for the full year.
Dividend policy
In line with the group's current policy to preserve cash for additional
growth opportunities, no dividend has been declared in the period.
By order of the Board
Bill McAdam Michael Fuller
Chairman Chief Executive Officer
3 December 2001
Registered Office Transfer Secretaries
21 Riebeeck Street Mercantile Registrars
Cape Town 11 Diagonal Street
8001 Johannesburg 2001
