| Thu 21 Feb 2002, 0:00 | | Glenrand M.i.b - Unaudited Interim Report For The |
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December 2001
Glenrand M.I.B Limited
(Registration number 1997/008001/06)
(`Glenrand M.I.B' or `the company' or `the group')
JSE Share Code GMB
ISIN No. ZAE 000018529
Service Beyond Expectation
Headline EPS up 90% to 11,2 cents
Trading profit up 142% to R51 million
Interim dividend 9 cents per ordinary share
Income statement
for the six months ended 31 December 2001
Unaudited Audited
6 months ended Year ended
31 December 30 June
2001 2000 % 2001
Note R'000 R'000 change R'000
Operating revenue 2 369 335 224 613 +64 594 045
Operating expenses (318 491) (203 569) +56 (494 312)
continuing (318 491) (200 101) (490 844)
discontinuing - (3 468) (3 468)
Trading profit 50 844 21 044 +142 99 733
Interest paid (3 615) (290) (6 619)
Operating profit 47 229 20 754 93 114
Income from associates 1 118 1 545 1 438
Profit before
non-trading
items 48 347 22 299 94 552
Non-operating income 1 058 313 2 308
Headline adjusting
items 4 5 855 (2 218) 2 049
Profit before taxation 55 260 20 394 98 909
Taxation 3 (17 227) (8 593) (34 390)
Profit after taxation 38 033 11 801 64 519
Minority interest (7 401) (927) (3 522)
Profit for the year 30 632 10 874 60 997
Headline earnings
per share, fully
diluted (cents) 4 11,2 5,9 +90 26,7
Earnings per
share, fully
diluted (cents) 13,8 4,9 27,7
Number of shares
- issued (000's) 221 794 221 294 221 294
- weighted average,
fully diluted (000's) 221 669 223 326 220 601
Balance sheet
as at 31 December 2001
Unaudited Audited
31 December 30 June
2001 2000 2001
R'000 R'000 R'000
Assets
Fixed assets 144 035 36 315 140 540
Goodwill and trademarks 32 454 20 254 21 328
Deferred taxation 29 571 16 158 30 831
Investments 28 680 15 648 19 718
Current assets 1 180 089 891 298 1 004 824
Total assets 1 414 829 979 673 1 217 241
Equity and liabilities
Ordinary shareholders' funds 139 975 85 556 112 705
Cost of shares held by subsidiary (2 578) - (2 578)
Minority interest 38 071 6 199 24 068
Deferred taxation 10 661 4 460 10 452
Long-term liabilities 108 471 28 715 99 001
Current liabilities 1 120 229 854 743 973 593
Total equity and liabilities 1 414 829 979 673 1 217 241
Statement of changes in equity
for the six months ended 31 December 2001
Non-
Share Share distribut- Retained
R'000 capital premium able reserves earnings Total
Balance as at
30 June 2000 4 426 - 32 998 53 195 90 619
- As previously
reported 4 426 - 32 998 28 607 66 031
- Prior year
adjustments - - - 24 588 24 588
Preference
shares issued 2 - - - 2
Translation of
foreign
subsidiaries - - 920 - 920
Shared earnings
of associates - - (40) 40 -
Profit for the
year - - - 60 997 60 997
Dividends - - - (39 833) (39 833)
Adjusted
balance as at
30 June 2001 4 428 - 33 878 74 399 112 705
Ordinary shares
issued 10 823 - - 833
Translation
of foreign
subsidiaries - - 17 934 - 17 934
Shared earnings
of associates - - 657 (657) -
Profit for the
year - - - 30 632 30 632
Dividends - - - (22 129) (22 129)
Balance as at
31 December
2001 4 438 823 52 469 82 245 139 975
Cash flow statement
for the six months ended 31 December 2001
Unaudited Audited
6 months ended Year ended
31 December 30 June
2001 2000 2001
R'000 R'000 R'000
Cash generated from operations 59 849 24 702 104 908
continuing 59 849 30 280 110 486
discontinuing - (5 578) (5 578)
Movement in working capital (93 135) 3 443 112 889
Taxation paid (8 656) (5 123) (15 310)
Dividends paid (22 129) (22 129) (39 833)
Cash (utilised by) available from
operating activities (64 071) 893 162 654
Cash generated (utilised) by
investing activities 6 516 (18 797) (91 299)
Cash generated by financing
activities 4 802 195 33 433
Net (decrease) increase in cash
and cash equivalents (52 753) (17 709) 104 788
Cash and cash equivalents
at beginning of year 429 591 324 803 324 803
Cash and cash equivalents
at end of period 376 838 307 094 429 591
Segmental analysis
for the six months ended 31 December 2001
Unaudited Audited
6 months ended Year ended
31 December 30 June
2001 2000 2001
R'000 R'000 R'000
Geographic - revenue from operations
Africa (principally South Africa) 303 692 190 677 506 550
International - United Kingdom 66 200 33 298 87 951
International - other 877 1 331 3 146
370 769 225 306 597 647
Unallocated group treasury costs (1 434) (693) (3 602)
Operating revenue per income
statement 369 335 224 613 594 045
Geographic - segment profits
Africa (principally South Africa) 44 319 20 800 97 171
International - United Kingdom 8 134 3 268 10 116
International - other (175) (2 331) (3 952)
52 278 21 737 103 335
Unallocated group treasury costs (1 434) (693) (3 602)
Trading profit per income
statement 50 844 21 044 99 733
Business group - revenue from
operations
Risk Advisory Services 270 477 196 867 460 045
Benefit Consulting, HMO and
Investment Advisory Services 100 292 28 439 137 602
370 769 225 306 597 647
Unallocated group treasury costs (1 434) (693) (3 602)
Operating revenue per income
statement 369 335 224 613 594 045
Business group - segment profits
Risk Advisory Services 38 330 19 496 76 934
Benefit Consulting, HMO and
Investment Advisory Services 13 948 2 241 26 401
52 278 21 737 103 335
Unallocated group treasury costs (1 434) (693) (3 602)
Trading profit per income
statement 50 844 21 044 99 733
Notes
1. Basis of accounting
The accounting policies as set out in the 2001 Annual Report have been
consistently applied in producing the results except that STC and dividends
declared after 31 December 2001 have not been accrued in terms of AC107:
Events after the Balance Sheet Date.
Certain comparative figures have been restated in order to achieve a more
meaningful presentation.
2. Operating revenue
Unaudited Audited
6 months ended Year ended
31 December 30 June
2001 2000 2001
R'000 R'000 R'000
Includes:
Investment income 15 822 15 849 34 032
3. Taxation
The group's tax charge
comprises the following:
SA normal taxation 11 019 475 13 930
SA deferred taxation 1 469 3 216 10 217
STC 2 067 1 505 5 308
Foreign taxation 2 210 2 859 4 249
Associates' taxation 462 538 686
17 227 8 593 34 390
4. Calculation of headline earnings
Unaudited Audited
6 months ended Year ended
31 December 30 June
2001 2000 2001
R'000 R'000 R'000
Profit for the year 30 632 10 874 60 997
Less: Profit on disposal
of investment (5 672) (78) (589)
Less: Profit on dilution
of investment - - (3 798)
Add: Goodwill amortisation (183) 370 412
Add: Loss on discontinued
operations - 1 926 1 926
Headline earnings 24 777 13 092 58 948
5. Long-term liabilities
Interest bearing 85 442 21 863 76 518
Non-interest bearing 23 029 6 852 22 483
108 471 28 715 99 001
6. Deferred taxation
Glenrand M.I.B Limited has now received an assessment for the 1998 financial
year. SARS, in its assessment, has accepted the valuation of our trademarks
and copyrights and has also allowed the deduction thereof. SARS has,
however, disagreed with our proposed 10-year write-off period and has
indicated that the trademarks and copyrights should be written off over a 20-
year period. Again, on the advice of our professional advisers, we have
objected to this assessment on the basis of the write-off period. No
adjustment has been made to the carrying value of the deferred tax asset
pending clarity on the write-off period; in any case, the value will only be
increased if and when the company is in a position to assess the probability
of sufficient taxable income being available in the longer term.
7. Contingencies
The appeal in the matter between Lappeman Diamond Cutting Works (Pty)
Limited and Glenrand M.I.B Limited took place on 11February 2002 in the
Witwatersrand Local Division of the High Court. The Court reserved judgment.
Operational review
Business review
The group's Risk Advisory Services business achieved exceptional revenue
growth of 37% over the same period in the last financial year. This surge in
revenue includes limited acquisitions made during this six-month financial
period, whilst most of the increase in revenue is due to strong organic
growth being experienced by the majority of business units in this segment.
This organic growth is due to firmer global and local insurance market rates
and strong performances from start-up divisions in our London subsidiary.
The investment in the Protector Group, which was effective 1 January 2001,
means that the group accounts for Protector's results during the six-month
period ended 31 December 2001 for the first time. This investment is
significantly contributing to group revenues and profit. Total revenue
growth in our Benefit Consulting, Investment Advisory and Health Maintenance
Organisation ("HMO") Service business was 253% over the same period in the
last financial year. The acquisition and inclusion of the Protector Group in
this business segment is solely responsible for the revenue growth.
Financial review
Income statement
The group achieved revenues of R369 million (2000: R225 million) for the six-
month period ended 31 December 2001, an overall growth of 64%. In the same
period of the previous financial year, the group's trading margin was
severely impacted by mainly one-off events and start-up costs of new
divisions within our London subsidiary. The directors are pleased to deliver
on their promise of returning to our expected levels of profitability. As a
result, the group's trading profit increased significantly to R51 million
(2000: R21 million), an increase of 142%.
The sharp increase in the outside shareholders charge to R7,4 million (2000:
R1 million) is attributable to the outside shareholdings related to the
Protector Group and the new business units within our London subsidiary.
Overall, the group delivered fully diluted headline earnings per share of
11,2 cents (2000: 5,9 cents), an impressive increase of 90%.
Balance sheet and cash flow
Ordinary shareholders' funds of R140 million (2000: R86 million) have
increased by an amount of R27 million or 24% since 30 June 2001. The long-
term debt to equity ratio fell to 62% from 74% since our financial year
ended 30 June 2001.
Cash generated from operations increased to R60 million, significantly up
from R25 million in the same period last financial year. Our working capital
changes are affected extensively by insurance and reinsurance premiums,
which we collect and pay over to the insurance market. This determines the
amount of premium float we are holding at a particular point in time. The
negative cash flow is due to this factor.
Dividend policy
The group has stated that while it intends to reach a dividend payout ratio
of approximately 50% of headline earnings per share over the next three
years, the group will still aim to increase the actual dividend each year.
The interim dividend declared recognises that earnings in the second half of
the year significantly exceed those in the first half of the year due to
seasonal factors.
Prospects
The group's prospects for the remainder of the financial year remain
positive overall. The directors are confident that the group will achieve
satisfactory growth in headline earnings per share for the full year ending
30 June 2002.
General
Declaration of interim dividend
An interim dividend no. 5 of 9 cents per share (2000: 8 cents per share) has
been declared, payable on 18 March 2002. The last day to trade "cum" the
dividend is Friday, 8 March 2002. "Ex" dividend trading commences on Monday,
11 March 2002 and the record date is Friday, 15 March 2002. Share
certificates may not be dematerialised or rematerialised between 4 March
2002 and 15 March 2002, both days inclusive.
On behalf of the board of directors
A W Mansfield
(Chairman - Non-executive)
D J Harpur
(Chief Executive Officer)
20 February 2002
Registered office: Surrey Place, 291 Surrey Avenue, Randburg 2194. PO Box
2544, Randburg 2125. Tel (011) 329-1111. Fax (011) 329-1333 . E-mail
info@glenrandmib.co.za. website www.glenrandmib.co.za
Registrars: Computershare Services Limited, Edura, 41 Fox
Street, Johannesburg 2001. PO Box 61051, Marshalltown 2107. Tel (011) 370-
7700. Fax (011) 688-7715
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