| Fri 15 Mar 2002, 0:00 | | Vestacor - Audited Annual Results For The Year End |
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VESTACOR LIMITED
("VESTACOR" or "the Company")
Reg No 1996/017285/06
Share code: VTR ISIN: ZAE000018412
AUDITED ANNUAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2002
SALIENT FINANCIAL INDICATORS
YEAR ENDED 28 FEBRUARY 2002
2002 2001
Cents Cents
Net asset value per share 191 171
Earnings per share 26.4 54.6
Headline earnings per share 26.8 54.6
Net increase/(decrease) in cash per share 13.6 (41.2)
Number of shares in issue (`000) 173 962 163 747
Weighted number of shares in issue (`000) 168 003 163 747
BALANCE SHEET
AS AT 28 FEBRUARY 2002
Note 2002 2001
R'000 R'000
Assets
Equipment 373 185
Goodwill 7 704 -
Share option scheme loan 16 158 23 301
Deferred tax - 2 558
Investments 1 249 805 219 141
Loans to investments 45 459 42 438
Receivables 9 070 5 011
Taxation 279 280
Cash & cash equivalents 25 907 1 447
Total assets 354 755 294 361
Equity and Liabilities
Capital and reserves 2 332 699 279 284
Share capital 17 396 16 375
Share premium 155 585 147 460
Non-distributable reserve 59 364 59 364
Accumulated profits 100 354 56 085
Non current liabilities
Deferred tax 10 733 4 345
Current liabilities 11 323 10 732
Payables 10 824 9 855
Short term loans - 500
Taxation 499 377
Total equity and liabilities 354 755 294 361
INCOME STATEMENT
YEAR ENDED 28 FEBRUARY 2002
Note 2002 2001
R'000 R'000
Revenue 7 038 5 343
Other operating income 3 26 129 4 897
Net profit on investments 4 49 150 99 495
Operating expenses (29 035) (17 837)
Profit from operations 53 282 91 898
Finance costs (77) (299)
Profit before taxation 53 205 91 599
Taxation (8 936) (2 260)
Net profit for the year 44 269 89 339
ABRIDGED CASH FLOW STATEMENT
YEAR ENDED 28 FEBRUARY 2002
2002 2001
R'000 R'000
Cash flows generated from/(utilised by)
Operating activities 10 254 (3 951)
Cash flows generated by/(utilised in)
investing activities 4 702 (64 063)
Cash flows generated from financing activities 8 646 500
Net increase/(decrease) in cash & cash
equivalents 23 602 (67 514)
Cash & cash equivalents
- at beginning of year 1 447 68 961
- of subsidiary acquired 858 -
Cash & cash equivalents at end of year 25 907 1 447
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 28 FEBRUARY 2002
Percentage 2002 2001
Interest R'000 R'000
1. Summary of investments
Listed
Fashion Africa 62%/26% 20 753 9 448
Richway s 19%/25% 19 395 1 169
DNA -/8% - 29 866
Renaissance -/6% - 8 857
40 148 49 340
Unlisted*
Look & Listen 34% 7 500 2 216
Adcheck - 330 -
Moresport 100% 201 827 166 315
Retail Africa** 100%/20% - 1 164
Other - - 106
209 657 169 801
249 805 219 141
s Indirectly held
* Directors' valuation
** Retail Africa has been consolidated in 2002
2. Changes in capital and reserves Non
Total Share Share distributable Accumulated
capital premium reserves profits
Balance at 1 March
2001 279 284 16 375 147 460 59 364 56 085
Acquisition of
Remaining interest
in Retail Africa 9 146 1 021 8 125 - -
Accumulated profit
for the year ended
28 February 2002 44 269 - - - 44 269
Balance at
28 February 2002 332 699 17 396 155 585 59 364 100 354
2002 2001
R'000 R'000
3. Other operating income
Other operating income includes the following:
- Interest received 1 096 2 105
- Dividends received 25 033 2 686
4. Unrealised profit on investments
Moresport 48 763 97 207
Fashaf (13 878) (9 870)
Look & Listen 4 974 1 267
Renaissance - 1 357
IT Investments (4 379) (2 000)
Richway 18 226 -
DNA - 10 214
Property Investments 181 1 320
53 887 99 495
Realised loss on investments
Renaissance (3 357) -
DNA (1 333) -
Other (47) -
(4 737) -
Net profit on investments 49 150 99 495
2002 2001
Cents Cents
5. Reconciliation of earnings per share
to headline earnings per share
Earnings per share 26.4 54.6
Amortisation of goodwill 0.4 -
Headline earnings per share 26.8 54.6
COMMENTARY
Shareholders should take cognisance of the fact that Vestacor's value and
growth is best evaluated by its net asset value and not by earnings or a
multiple thereof. The earnings shown are therefore solely attributable to
Vestacor and Retail Africa. Vestacor's net asset value has increased by 20
cents per share from 171 cents per share at 28 February 2001 to 191 cents
per share.
As was explained in Vestacor's annual financial statements for the year
ended 28 February 2001, Vestacor accounts for its investments in terms of
AC133. Vestacor therefore revalues its investments every six months with the
increase or decrease in value brought to account through the unrealised
profit or loss line in the income statement. Vestacor's accounting policies
for the year ended 28 February 2002 are consistent with those applied to the
2001 financial year and this report has been prepared in terms of South
African Statements of Generally Accepted Accounting Practice.
The 2002 financial year saw Vestacor deliver on its objective of growing the
net asset value of the Company by acquiring, adding-value and exiting
certain of its retail and related businesses. The portfolio of investments
was altered considerably during the year with the disposal of Vestacor's
stakes in DNA and Renaissance, the sale of Richway's core assets to Primegro
and the sale of the Sportshoe World high street stores by Moresport, a
wholly owned subsidiary of Vestacor, to Fashaf.
Arising from the above transactions and the performance delivered by
Sportsmans Warehouse, The Pro Shop and Outdoor Warehouse, Vestacor has cash
and cash equivalents of R25.9 million at year-end. In addition, Vestacor
will realise an estimated R25 million by way of a dividend from the sale of
Richway's core properties to Primegro.
In October 2001, Vestacor increased its stake in Retail Africa from 20% to
100% by the issue to Retail Africa shareholders of 10.2 million shares at 90
cents per share. Accordingly, Retail Africa has been consolidated.
Vestacor indicated in its half-year report to shareholders that an extensive
review was being undertaken on Fashaf with the objective of expanding the
product offering of the business. We are pleased to report that The Millers
shoe chain was successfully launched and the format is trading well, the
Dunns stores performed well over the Christmas period and the development of
the Home & Personal division is well underway.
Report back from major investments
Moresport, which comprises Sportsmans Warehouse, The Pro Shop, Outdoor
Warehouse and Sportshoe World value mart stores, performed ahead of budget
for the 2002 financial year. The group dominates the sports retail market in
South Africa and saw strong
store-on-store growth for the 2002 financial year. Moresport has continued
in its focused store-opening programme with the opening of a 1000m2
Sportsmans Warehouse store in the Pavillion shopping centre in Durban, with
this store exceeding its trading budgets. The management of Moresport is
pleased with the results of the progress made in staff training which has
resulted in positive customer feedback to the service levels. Moresport
comprises some 60% of Vestacor's net asset value.
Fashaf underwent further restructuring during the year under review. The
business has now been divisionalised and consists of the following four
divisions: Apparel & Footwear, Home & Personal, Support Products and Shared
Services. The repositioning of the Dunns clothing chain has yielded good
results and the new Millers footwear chain is also exceeding performance
expectations. The sale of music and cellular products through the Support
Products Division holds promise and the first Home & Personal store will be
opened in the 2003 financial year.
Despite a difficult year for the South African music industry, Look & Listen
managed to show organic growth, thereby increasing market share. This was
largely attributable to the successful bedding down of the new store format
and an aggressive marketing campaign. With its new format, Look & Listen has
also positioned itself to take advantage of the explosive growth which has
been seen in the DVD market. The stores have been designed to accommodate
the fast growing range of titles which will enable Look & Listen to continue
to be a premier range retailer of DVD together with music and video. Look &
Listen Express, a kiosk concept that was developed to take advantage of the
fast growing local music industry, has also proven to be a success and the
roll out of a store-in-store concept within Fashaf will continue throughout
the next year.
Retail Africa has increased its market profile in the retail property market
with sole mandates awarded for the leasing of ten convenience shopping
centres. The Retail Africa brand has become respected in the specialist
retail development sector and is seeing considerable growth and
opportunities in major South African towns.
Adcheck collects and distributes critical marketing, promotional and
operational information to retailers and manufacturers using a proprietary
reporting tool. Vestacor controls 17.5% of Adcheck and has an option to
increase its stake to 27.5%. The business has a client list of blue chip
South African corporates and an annuity based revenue model. The reporting
technology developed for the information business has itself received
worldwide interest.
Prospects
Vestacor has reached a stage in its development where operating cash flow
generated from its investments is being utilised for further acquisitions
and additional investments.
Given this strong cash flow and coupled with the current opportunities and
initiatives being presented to Vestacor, the Vestacor board is optimistic
that superior growth levels will continue to be achieved.
Directorships
Mr JMP Desmidt has retired and accordingly resigned as a non-executive
director of Vestacor with effect from 28 February 2002. The board of
Vestacor would like to thank him for his input and support and wish him
well.
Messrs DP Kennealy and BM Jerling have been appointed as non-executive
directors of the Company with effect from 4 February 2002.
AB Rubenstein M Nielsen
Chief Executive Officer Chief Operating Officer
Johannesburg
15 March 2002
Directors
GB Rubenstein (Chairman), AB Rubenstein (CEO), M Nielsen (COO), KG Hodgson*
BM Jerling*, MJ Kaplan*, DP Kennealy*s, JA Mackay, LG Rapp*, CF Turner*
*non-executive
s Irish
