| Mon 28 Jan 2002, 0:00 | | Genbel South Africa Limited - Volatile Markets Res |
|
GENBEL SOUTH AFRICA LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1949/032379/06)
Share code: GBL
ISIN No: ZAE 000010054
* Volatile markets * Restructuring initiatives
INTERIMRESULTSFORTHESIX MONTHSTO31 DECEMBER 2001
REVIEW
MARKETS
The events of 11 September have impacted on the global investment markets.
In order to minimise the effect of the terrorist attacks on the global
economy, central banks across the world lowered interest rates. The US has
cut interest rates four times since the tragedy, and has also reduced income
tax rates in an effort to support the American economy, which was already in
decline before the September 11 attacks.
The economic stimuli caused the NASDAQ to rally from 1 423 points on 21
September 2001 to 1 950 points on 31 December 2001, and the Dow Jones
Industrial Index to rise from 8 236 to 10 022 over the same period.
Nevertheless, the effects on the global business cycle will be felt for many
years to come.
Emerging market economies have derated as a result of the flight to quality
and the impact of the US economic downturn.
In South Africa, the most notable economic feature was the sharp and
prolonged decline of the rand. The currency depreciated by 32,7% against the
US dollar for the period under review.
Various sectors of the JSE reacted differently to these events. Resources
have benefited from rand weakness, while the financial and industrial
sectors reacted negatively.
Interest rate concerns caused by the possibility of South Africa not meeting
its inflation rate targets, may postpone a possible economic recovery. This
uncertainty caused industrial shares with no foreign earnings to
underperform.
GENBEL'S PERFORMANCE
Genbel's net asset value (NAV) declined by 14,9% to 1 738 cents per share
for the six months under review, while its benchmark, the FINDI, achieved a
negative return of 7,1%. The underperformance of Genbel's NAV relative to
the FINDI can be ascribed to Genbel's exposure to the Telecommunication-
Media-Technology (TMT), retail and financial sectors. The Genbel share price
of 1610 cents on 31 December 2001 reflected a 7,4% discount to net asset
value. Genbel's net asset value reached the highest value for the period of
2054 cents a share on 2 July 2001 and a lowest value of 1612 cents on 21
September 2001. The Genbel share price fluctuated between a high of 1770
cents a share and a low of 1405 cents per share.
GENBEL SHAREPLAN
Over the period under review, there has been a marked outflow from the
SharePlan. As at 31 December 2001, 3,5 million shares were held through the
SharePlan by just more than 7 950 participants, in comparison to more than
10 700 participants holding 4,7 million shares at the end of June 2001.
GENBEL'S PORTFOLIO
No debt was used during the period as management felt that conditions were
too uncertain. In view of the uncertainty regarding Genbel's future and
unstable markets, cash levels were raised through the sale of shares across
the portfolio. As at 31 December 2001, Genbel's cash holdings stood at
R161million.
INVESTMENT RETURNS TO 31 DECEMBER 2001
3 year return 5 year return
1 year return per annum per annum
% % %
Genbel South Africa
(net asset value) (18,3) (4,7) (2,0)
Genbel South Africa
(share price excluding
dividends) (3,3) (6,2) (0,6)
JSE Financial &
Industrial Index
(excluding dividends) (7,5) 5,6 1,9
OFFSHORE INVESTMENT STRATEGY
We have invested in the Gensec Region Active Equity Fund. In rand terms, the
fund delivered 36,2% growth over the six-month period ending 31December.
This investment has proved to be prudent, due to the weakness of the rand,
and it has added value to the portfolio.
Share buy-backs
During the period under review, no further shares were repurchased.
STRATE
The conversion of the company's shares onto the STRATE system commenced on
18 December 2001 with dematerialisation of the shares. Electronic trading
was implemented on 14 January 2002 with the electronic settlement occurring
from 21 January 2002.
DIVIDEND
A cash dividend of 70 cents was paid to the holders of ordinary shares
registered at the close of business on 24 August 2001. The dividend was paid
on 4 October 2001.
RESTRUCTURING
The board continues to investigate the need for restructuring as commented
upon in the annual report.
CAUTIONARY
Shareholders are reminded that the company is still trading under
the cautionary announcement issued on 27 December 2001. The negotiations
that warranted the cautionary are still ongoing. Shareholders are advised to
continue exercising caution when trading in Genbel shares until a further
announcement is made.
OUTLOOK
Low interest rates in developed economies should have a positive effect on
global economic growth during 2002. Forecasts indicate that the US should be
out of recession in the second half of the year. Economic growth in Europe
should continue to increase off a low base. This is expected to provide a
more positive investment environment.
South Africa's macro-economic fundamental position is sound, yet growth has
disappointed. Government remains committed to reducing the fiscal deficit
and achieving inflation targets. Despite these efforts, rand volatility is
expected to continue and economic growth will be subdued. The investment
environment will remain uncertain. In view of this, the portfolio has been
positioned more defensively.
APPRECIATION
Jaco Fouch , a board member since 20 August 1987, will be reaching the
company's compulsory retirement age on 26 February 2002. We would like to
thank Jaco for his dedicated service to the company. We will miss his wise
counsel, clear thinking and attention to detail and wish him all the best in
his retirement.
Finally, we want to thank you, our shareholders, for your support and
patience during this period of uncertainty.
Johannesburg 28 January 2002
TL de Beer AD Botha
Chairman Managing Director
The full text of this announcement can be viewed on www.genbel.com.
NOTESTOTHEINTERIMFINANCIALSTATEMENTS
1. ACCOUNTING POLICIES
Accounting policies and methods of computation, used in the preparation of
these interim financial statements, are consistent with those adopted in the
preparation of the audited annual financial statements for the year ended 30
June 2001. The interim financial statements comply with the requirements of
AC127.
2. TAXATION
A deferred tax asset, in respect of timing differences, assessed and
assessable tax losses of R90 million at 31 December 2001 in a wholly owned
subsidiary of the company, has not been recognised, as uncertainty exists
regarding its realisation, given the possible restructuring of the group.
3. DIVIDENDS
Dividends are accounted for in the period in which they are declared.
Johannesburg 28 January 2002
Directors: TL de Beer (Chairman), ADBotha (Managing Director),
PJCook, JHFouch , Dr D Konar, R Masson, RWMay, Dr KDKMokhele,
DK Smith.
Company secretary: EYates
BALANCE SHEETS
31 December 31 December 30 June
2001 2000 2001
R million Unaudited Unaudited Audited
ASSETS
Non-current assets
Investments available for sale 256 348 525
256 348 525
Current assets
Trading assets 271 416 267
Receivables and prepayments - 14 11
Cash and cash equivalents 161 31 104
432 461 382
Total assets 688 809 907
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 108 147 108
Revaluation reserve 71 - 246
Retained earnings 505 375 450
684 522 804
Current liabilities
Trading liabilities - 273 80
Current tax liabilities 2 - 11
Trade and other payables 2 13 11
Money market liabilities - 1 1
4 287 103
Total equity and liabilities 688 809 907
Net asset value (R million) 684 887 804
Net asset value per share (cents) 1 738 2 126 2 043
Number of shares (000) 39 355 41 718 39 355
Number of shares in issue (000) 43 892 46 255 43 892
Treasury shares (000) (4 537) (4 537) (4 537)
CASH FLOW STATEMENTS
6 months ended Year ended
31 December 30 June
2001 2000 2001
R million Unaudited Unaudited Audited
Cash flow from operating
activities 58 146 257
Cash flow from financing
activities (1) (125) (163)
Net increase in cash and
short-term funds 57 21 94
Cash and short-term funds
at beginning of period 104 10 10
Cash and short-term funds
at end of period 161 31 104
INCOME STATEMENTS
6 months to Year to
31 December 30 June
2001 2000 2001
R million Unaudited Unaudited Audited
INCOME
Dividend income 5 6 14
Interest received 7 1 3
Net investment gains 78 17 235
90 24 252
EXPENSES
Financing costs 2 1 1
Administration fee 1 1 2
Other expenses 3 3 8
6 5 11
Profit before tax 84 19 241
Taxation 2 - 11
Net profit 82 19 230
Weighted average number of
shares in issue (000) 39 355 44 892 42 588
Earnings and headline earnings
per share (cents) 208 42 540
Dividends per share (cents) 70 70 70
STATEMENTS OF CHANGES IN EQUITY
Share Revalu- Share
capital Treasury ation election Retained
R million premium shares reserve reserve earnings Total
Unaudited six
months ended
31 December 2001
Balance at
30 June 2001 192 (84) 246 - 450 804
Dividends (30) (30)
Dividends
attributable to
treasury shares 3 3
Decrease in
revaluation reserve (175) (175)
Net profit 82 82
Balance at
31 December 2001 192 (84) 71 - 505 684
Unaudited six
months ended
31 December 2000
Balance at
30 June 2000 268 (50) 22 356 596
Shares
cancelled (54) (54)
Capitalisation
award 17 17
Purchase of
treasury shares (34) (34)
Reversal of share
election reserve (22) (22)
Net profit 19 19
Balance at
31 December 2000 231 (84) - 375 522
Audited year ended
30 June 2001
Balance at
30 June 2000 268 (50) 22 356 596
Effect of
adopting AC133 551 (136) 415
Effect of adopting
AC107 in relation
to dividends (22) 32 10
Dividends (34) (34)
Dividends
attributable to
treasury shares 2 2
Capitalisation
award 17 17
Shares cancelled (93) (93)
Decrease in
revaluation
reserve (305) (305)
Purchase of
treasury shares (34) (34)
Net profit 230 230
Balance at
30 june 2001 192 (84) 246 - 450 804
FOR INFORMATION ABOUT GENBEL SOUTH AFRICA OR THE SHAREPLAN PLEASE CONTACT:
Genbel SharePlan Helpdesk at 0800 00 49 35,
GENBEL SOUTH AFRICA LIMITED, 3A Summit Road, Dunkeld West, Sandton 2196
PO Box 411420, Craighall 2024, Telephone: +27 (11) 778 6000, Facsimile: +27
(11) 778 6990
Toll-free numbers available within South Africa
Telephone: 0800 00 49 35 Facsimile: 0800 00 49 36
Internet address: www.genbel.com E-mail address: moreinfo@genbel.com
Toll-free line for daily NAV estimates call 0800 11 56 50
LONDON OFFICE
Project Consultants Limited, Walnut House, Walnut Gardens, Claydon
Banbury, Oxon OX17 1NA, United Kingdom, Telephone: +44 (1295) 690180/1
