| Fri 14 Dec 2001, 0:00 | | Nictus Limited - Interim Report |
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Nictus Limited
Share Code: NCS
ISIN Code: NA000912481
Interim report for the six months ended 30 September 2001
Six Months Ended Changes% Year ended
Unaudited Unaudited Audited
30 Sept 01 30Sept 01 31 March 01
R'000 R'000 R'000
Group Income Statement
Turnover 101,315 56,502 79 112,029
Operating income 4,177 2,342 78 4,403
Depreciation (384) (200) 92 (387)
Interest paid (1,201) 1,227) -2 (2,476)
Preference Dividend
Paid - (51) -100 (102)
NET OPERATING INCOME 2,592 864 200 1,438
Income from associate 104 - 100 -
NET PROFIT before
taxation 2,696 864 -212 1,438
Taxation (773) 747 2,948
PROFIT ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS 1,923 1,611 -19 4,386
Dividend - - -
RETAINED PROFIT - - -
FOR THE PERIOD 1,923 1,611 -19 4,386
ABRIDGED GROUP BALANCE SHEET
ASSETS
Property, Plant and
Equipment 10,000 8,207 22 8,599
Investments 8,206 1,848 344 825
Investments in
Associate 107 - 100 -
Negative goodwill
on acquisition of
subsidiary 1,579) - -100 (106)
Deferred tax 1,989 - 100 2,300
Current assets 85,874 27,441 213 28,647
104,597 37,496 179 40,265
SHAREHOLDERS' FUNDS AND LIABILITIES
Ordinary shareholders'
Equity 30,549 5,848 422 8,623
Redeemable
preference shares - 1,000 -100 2,000
Long term
liabilities 2,425 1,584 53 2,544
Deferred taxation - 8 -100 -
Current liabilities 71,623 29,056 146 27,098
Interest bearing 15,812 15,912 -1 14,541
Other 16,435 13,144 25 12,557
Provision for claims 39,376 - 100 -
ABRIDGED GROUP STATEMENT OF CHANGES IN EQUITY
OPENING BALANCE 8,623 4,237 104 4,237
Ordinary shares issued 12,502 - 100 -
Increase in share
Premium 7,501 - 100 -
Net profit for
the period 1,923 1,611 19 4,386
CLOSING BALANCE 30,549 5,848 422 8,623
ABRIDGED GROUP CASH FLOW STATEMENT
Net cash (outflow)
inflow from operating
activities 1,157 (2,092) -155 (2,303)
Net cash (outflow)
inflow from investing
activities (11,329) (552) 1952 319
Net cash (outflow)
inflow from financing
activities 20,768 391 5212 2,879
NET MOVEMENT IN
CASH AND CASH
EQUIVALENTS 10,596 (2,253) -570 895
CASH AND CASH
EQUIVALENTS AT
BEGINNING OF PERIOD (3,781) (4,676) -19 (4,676)
CASH AND CASH
EQUIVALENTS AT
END OF PERIOD 6,815 (6,929) -198 (3,781)
RATIOS
Number of ordinary
shares issued 33,232,956 8,228,956 8,228,956
Earnings per
ordinary share
(cents) 5,79 19,58 53.30
Headline earnings
per share (cents) 5,79 10,01 14.85
Preference dividend
per share (cents) - 5,10 10.20
Net worth (cents) 92 71 105
Borrowings ratio 0,64 2,55 2.05
Interest cover 3,16 1,75 1.62
Accounting Polices
The accounting policies used in preparing the interim financial statements
are consistent with those used in preparing the annual financial statement.
During 2001 the accounting policies regarding deffered tax were changed and
the interim financial statements for September 200 have accordingly been
restated.
Comments
As reported previously, the directors have entered into negotiations to
broaden the activities of the Group. These negotiations were successfully
concluded in October 2001, whereby Nictus acquired the entire share capital
of Corporate Guarantee Limited with effect from 1 April 2001. The purchase
consideration was settled by the issue of 25 million ordinary shares.
Corporate Guarantee Limited operates in a niche market in the short-term
insurance industry providing unique solutions to risk management. An
important factor in the success of its approach to risk management is a
sound return on the funds underpinning risk cover provided. Corporate
Guarantee is regulated under the Namibian Short-term Insurance Act, and its
risk management, investment limits and solvency margin, are stipulated in
the Act and its Regulations.
The acquisition of Corporate Guarantee is congruent with Nictu's prime
objective of excelling as a services and products group, and results in the
group being able to offer a wider range of financial and insurance products
in support of the durable products offered through its retail and wholesale
outlets in Nambian and South Africa.
Group Performance
The increase of 79% in turnover was achieved through significant increases
in all divisions of our retail operations, as well as with the acquisition
of Corporate Guarantee. We are pleased to report an increase of 212% in
profit before tax. Operating profit increased from R864 000 to R2,7 million
for the period under review. This increase is mainly attributable to a
significant improvement in our furniture operations and an increase in the
earning of our motor retailing operations as well as our property division.
The acquisition also had a significant impact on the operating income with a
contribution of R1,418 million. Although this acquisition is promising
regarding the additional revenue stream and the positive impact on interest
paid, the dilutionary impact of the 25 million additional shares negates any
immediate value to shareholders. Headline earnings per share decreased from
10.01 cents to 5.79 cents per share for the comparative period. The
acquisition of Corporate Guarnatee will provide the necessary impectus to
group profitability to sustain a steady increase in earnings per share, and
will provide a hedge against fluctuation in profitability owing to the
diversification and broadening of the group's asset base.
The acquisition furthermore resulted in an increase in the net asset value
per share from 71 cents to 92 cent for the comparative period. The
borrowing ratio has been reduced from 2.55 times to 64 times for the period
under review.
At a shareholders meeting held on 5 November 2001 it was resolved, that the
company creates debentures which will be issued at a later stage, in order
to provide flexibility in the company's funding arrangements. The creation
of the debentures will give Nictus an additional source of capital to
finance its retail operations.
Strate
Nictus has been given notice by STRATE Limited that the company will
commence dematerialisation on Monday 26 November 2001. The first trade
within the electronic environment will commence on Thursday, 18 December
2001. Shareholders have been advised accordingly.
Dividend
No interim dividend is proposed. A final dividend will however be paid soon
after publication of the annual result for the year ended 31 March 2002.
Capitalisation issue
The directors have resolved to award capitalisation shares to ordinary
shareholders registered on 25 January 2002 from the reserves of the company.
These shareholders will be entitled to receive one new ordinary share for
every two ordinary shares held.
Prospects
The global economic outlook deteriorated significantly over the past two
months as the impact of the attacks on the USA spread through the world's
economies. Major central banks around the globe cut interest rate in an
effort to cushion their economies and to provide additional liquidity at a
time of uncertainty and instability. On the local front, GDP figures have
in the second quarter pointed to a relatively weak domestic economy. The
most growth emanating from the services sector. Gross domestic expenditure
dropped sharply in the second and third quarters, with consumer spending
declining somewhat.
As a results of the weakening of the Rand Southern Africa will become
increasingly dependant on its internal growth dynamic to keep the economy
afloat. This will most certainly result in higher inflation, which will in
turn directly impact on spending patterns, especially in the demand for
durable goods. To achieve it inflation targets the SA Reserve Bank may have
no alternative but to increase interest rates.
In the light of the aforementioned, management has put mechanisms in place
to actively manage its risk exposure to various types of risk, with specific
focus on interest rate risk, currency risk, liquidity risk and credit risk.
The directors are confident of achieving profit targets for March 2002.
Board of Directors
Mr JJ Fourie was appointed as a director of Nictus after the successful
acquisition of Corporate Guarantee, of which he is the managing director.
On behalf of the board:
N C Tromp F R Van Staden.
Windhoek, 7 December 2001
