| Wed 13 Mar 2002, 0:00 | | African Harvest Limited - Announcement |
|
(Registration Number 1997/013827/06)
("African Harvest")
JSE Code : AHV
ISIN Code : ZAE000013538
Announcement
Trading update
Unaudited operating results for the period 1 October 2001 to 28 February
2002 are as follows:
African
African Harvest African Harvest
Centre & Harvest Fund
Investments* Capital Managers Total
R'000 R'000 R'000 R'000
Operating revenue 8 522 22 610 33 893 65 025
Interest income 10 360 4 734 281 15 375
18 882 27 344 34 174 80 400
Operating expenses 10 445 16 315 23 583 50 343
Interest expense 582 681 - 1 263
7 855 10 348 10 591 28 794
Taxation 1 320 1 467 3 067 5 854
6 535 8 881 7 524 22 940
* Comprises the corporate centre and the regional and strategic investment
businesses.
1. Over the past year, African Harvest Limited has concentrated on building
a financial services business focused on fund management and investment
banking. These businesses, African Harvest Fund Managers and African Harvest
Capital, continue to perform satisfactorily. For the five months to 28
February 2002, revenue for African Harvest Fund Managers was R33,9 million
which, pro rated, is above the forecast of R70 million set out in the annual
financial statements for the year ended September 2001. Revenue for African
Harvest Capital was R22,6 million, which is below the annual forecast of R90
million contained in the financial statements. African Harvest Capital's
earnings of R10,3 million were in line with earnings achieved in the
comparable period last year.
2. Interest income of R10,4 million was earned by African Harvest Limited on
its cash holdings. Interest income will, however, decline as a result of the
cash distribution of R281 million to shareholders in February 2002.
3. The Group is beginning to realise the benefits of the cost cutting
exercise which commenced in the latter part of last year.
4. Due to tough operating conditions in the financial markets and in line
with the Group's stated intention to withdraw from the private equity market
and to dispose of certain of its strategic investments, the carrying values
of investments have been re-evaluated. Arising from the review strategic
investments have been written down by R56,9 million, provisions of R10,2
million have been raised against related receivables and other assets have
been impaired by R13,9 million. These impairments will reduce pre- and post-
tax earnings as reported above by R81 million (28,8 cents per share) and
headline earnings by R30,6 million (10,9 cents per share). Subsequent to the
impairments the board is confident that investments are conservatively
valued.
Appointment of Chief Operating Officer
Anthony (Tony) Ruiters (40), Managing Director of African Harvest Fund
Managers, has been appointed as Chief Operating Officer of African Harvest
Limited. In 1998 Tony co-founded African Harvest Fund Managers and together
with his team has grown funds under management to R14 billion at 28
February 2002.
Tony has business, government and trade union experience. He spent seven
years with the trade union movement, holding various executive posts. In
1994 he joined Government, initially as a member of the transformation team,
and later as Deputy Director General of the Western Cape responsible for
Trade and Investment and the Reconstruction and Development Programme.
During 1996 and 1997 he served as a director of Investment South Africa and
of Wesgro.
Tony has played a critical role in growing black business in South Africa
and is well positioned to lead African Harvest into a period of
concentrated, focused growth and profitability.
Appointment of Managing Director of African Harvest Fund Managers
Rowan Williams-Short (39), who currently heads the African Harvest Value and
Fixed Interest teams, will assume the role of Managing Director of Fund
Managers.
Rowan started his career as a fixed interest analyst at Old Mutual and
subsequently became a portfolio manager. He then spent six years, mostly as
Chief Investment Officer at Prudential Portfolio Managers (South Africa)
before joining African Harvest Fund Managers in 1999.
Rowan's role as Managing Director of Fund Managers will include business
development, overall responsibility for the investment functions and general
management of the business.
Prospects
The Groups' ongoing focus will be on fund management and investment banking.
Strategic investments are being disposed of where appropriate.
African Harvest Fund Managers continues to build impressive investment track
records in growth, value and fixed interest mandates. This has resulted in
substantial inflows and funds under management have shown significant growth
from R10 billion at 30 September 2001 to R14 billion at 28 February 2002.
Encouraged by the success achieved over the past year, the investment teams
are stable and committed to their aspiration of becoming the premium multi-
styled investment house in South Africa.
African Harvest Capital has established a brand in a market niche in which
they have a competitive advantage. The Corporate Finance team is profitable
and continues to win significant mandates, although many of these mandates
have long lead times. The Investment Banking team is profitable and growing,
and the Specialised Funds unit is producing good returns, but not at the
same levels as last year. African Harvest Securities continues to trade
profitably in a difficult market environment.
Both African Harvest Fund Managers and African Harvest Capital have built up
a strong base of quality earnings and are well positioned to provide growth
in profitability. African Harvest Limited has a capital base in excess of
R500 million, after the impairments referred to above. The Group is thus
well capitalised in relation to the needs of its underlying businesses. Cash
and cash equivalents at 28 February 2002 amounted to R113 million and will
be deployed in growing the underlying businesses, where appropriate. Trading
and other current assets amounted to a further R261 million. Net asset value
per share is 178 cents.
As announced in January 2002, Coronation Holdings and NE Corporation have
concluded a shareholder agreement in terms of which NE Corp increased its
shareholding in African Harvest Limited to 18%. This has improved the
empowerment credentials of the group, boosting its total empowerment
shareholding to 25% of equity. As significant shareholders, Coronation and
NE Corp remain committed to African Harvest and together provide a stable
platform for future growth.
The above information has been provided to shareholders in the interests of
transparency. A full interim announcement containing the results for the six
months to 31 March 2002 will be published in May 2002, as is the Group's
practice.
Cape Town
12 March 2002
Registered office: African Harvest House, Boundary Terraces, 1 Mariendahl
Lane, Newlands 7700
Postal address: P O Box 23855, Claremont 7735
Tel: +27 21 670 4600
Fax: +27 21 670 4651
Website: www.africanharvest.co.za
Date: 13/03/2002 07:45:20 AM Produced by the JSE SENS Department
