| Wed 20 Mar 2002, 0:00 | | Alacrity Financial Services Limited - Audited Gro |
|
The Year Ended 31 December 2001
ALACRITY FINANCIAL SERVICES LIMITED
(Registration number 1994/000078/06)
(Share Code: ALY ISIN Code: ZAE000023966)
AUDITED GROUP FINANCIAL RESULTS for the year ended 31 December 2001
Consolidated income statement
for the year ended 31 December 2001
Group
2001 2000
R'000 R'000
Revenue 125 792 121 267
Other income 1 181 36
126 973 121 303
Administrative expenses (7 981) (5 729)
Operating expenses (117 995) (114 722)
Abnormal items (19 291) 1 700
Operating profit (18 294) 2 552
Finance (cost) / income 965 -204
Share of results of associates - -147
Profit / (loss) before tax (17 329) 2 201
Taxation (279) -
Profit / (loss) after tax (17 608) 2 201
Net profit / (loss) (17 608) 2 201
Earnings per share (cents)
Basic (12.98) 1.70
Diluted (12.66) 1.64
Headline earnings per share (cents)
Basic 1.24 0.39
Diluted 1.21 0.37
Group
2001 2000
R'000 R'000
Profit / (loss) after taxation (17,608 ) 2,201
Reversal of over provision from 624 (1,700 )
previous years
Share Incentive Trust write off 1,839 -
Write off of loans 1,800 -
Loss on sale of subsidiaries 3,136 -
IT expense write off 10,260 -
Provisions for contingent liabilties 1,633 -
Headline profit / (loss) 1,684 501
Headline earnings / (loss) per share
(cents)
Headline profit / (loss) 1,684 501
Weigted average number of ordinary 135,631 129,670
shares
Headline earnings / (loss) per share 1.24 0.39
(cents)
Fully diluted headline earnings per
share
Weigted average number of ordinary 1,684 501
shares
Weigted average number of ordinary 135,631 129,670
shares
Shares awaiting issue 3,460 4,359
139,091 134,029
Fully diluted earnings per share 1.21 0.37
Earnings / (loss) per share (cents)
Profit / (loss) after taxation (17,608 ) 2,201
Weigted average number of ordinary 135,631 129,670
shares
Earnings / (loss) per share (cents) -12.98 1.70
Fully diluted earnings per share
Profit / (loss) after taxation (17,608 ) 2,201
Weigted average number of ordinary 135,631 129,670
shares
Shares awaiting issue 3,460 4,359
139,091 134,029
Fully diluted earnings per share -12.66 1.64
Consolidated balance sheet
as at 31 December 2001
Group
2001 2000
R'000 R'000
Assets
Non-Current Assets 22 875 16 830
Property, Plant and Equipment 11 198 5 670
Intangible assets 419 697
Goodwill 9 041 5 485
Investments in associates - 922
Other investments 2 217 4 056
Current Assets 79 177 79 706
Receivables and prepayments 36 672 69 169
Receiver of revenue 424 423
Cash and cash equivalents 42 081 10 114
Total Assets 102 052 96 536
Equity and liabilities
Capital and reserves 828 17 059
Ordinary shares 1 376 1 340
Share premium 13 081 11 740
Retained earnings (13 629) 3 979
Non-Current liabilities 32 996 29 528
Interest bearing borrowings 32 996 1 022
Deferred income - 28 506
Current liabilities 68 228 49 949
Trade and other payables 62 363 37 176
Bank overdraft - 7 973
Current tax liabilities 279 -
Current portion of borrowings 2 497 3 013
Provision for liabilities 3 089 1 787
Total liabilities 101 224 79 477
Total equity and liabilities 102 052 96 536
Consolidated cash flow statement
for the year ended 31 December 2001
Group
2001 2000
R'000 R'000
Cash flow from operating activities
Cash generated from / (utilised in) operations 19 664 (46 600)
Financing (costs) / earnings 965 (204)
Taxation paid (279) (91)
Net cash generated from / (utilised in) operating 20 350 (46 895)
activities
Cash generated from / (utilised in) investing activities
Acquisition of subsidiaries (3 101) 1 274
Purchase of broking business (1 505) (949)
Net tangible and intangible assets acquired (9 821) (3 749)
Proceeds from disposal of tangible and intangible 1 181 2 762
assets
Net cash utilised in investing activities (13 (662)
246)
Cash flow from financing activities
Increase / (Decrease) in long-term liabilities 4 361 (2 841)
Net ordinary shares issued 1 377 -
Net preference shares issued 27 613 -
(Decrease) / increase in short-term loans (515) 2 454
Net cash from financing activities 32 836 (387)
Net increase / (decrease) in cash and cash equivalents 39 940 (47 944)
Cash and cash equivalents at beginning of the year 2 141 50 085
Cash and cash equivalents at end of the year 42 081 2 141
Statement of changes in equity
for the year ended 31 December 2001
Share Share Retained
Capital Premium Earnings Total
R'000 R'000 R'000 R'000
Balance at 1 January 2000 1 211 5 411 1 778 8 400
Net profit - - 2 201 2 201
Issue of share capital - 129 6 329 - 6 458
acquisitions
Balance at 31 December 2000 1 340 11 740 3 979 17 059
Balance at 1 January 2001 1 340 11 740 3 979 17 059
Net loss - - (17 608) (17 608)
Issue of share capital - 36 1 341 - 1 377
acquisitions
Balance at 31 December 2001 1 376 13 081 (13 629) 828
Commentary
Financial performance
Alacrity's performance for the year ended 31 December 2001 was adversely
affected by the write off of abnormal items totaling R19.3 million. The
resultant loss before tax of R17.3 million was disappointing as group
subsidiaries improved operating profits which saw headline earnings rising
from R501 thousand last year to R1.684 million this year.
Renegotiated outsourcing contract
At the end of the year the group renegotiated the terms and conditions of
the outsourcing arrangements with its major information technology supplier.
Future processing rates will be substantially more favourable than the
prohibitively high costs that would have applied had the deal not been
renegotiated. The new dispensation did not come without cost and the new
contract resulted in a net abnormal write off of R10.3 million. This
comprised deferred income and certain prepaid expenses carried forward in
last year's balance sheet, which as a result of the new agreement are no
longer relevant.
Other abnormal items
The balance of abnormal items of R9 million are made up as follows:
Post disposal claims on sale of subsidiary R4.0 million
Write down of investments R3.6 million
Other non-operational items R1.4 million
R9.0 million
Cash flow
Cash flow from operating activities remained positive as R16,1 million of
the R19,3 million abnormal items was non cash flow in nature.
Client retention
A strong focus during the past year has been service delivery and customer
retention. The level of loyalty that operating companies have enjoyed from
their long-standing client bases is therefore most encouraging and a major
contributor to improved headline earnings. Client retention levels are
amongst the best in the industry and remain a strength of the group that it
will continue to build upon in the future.
New management
The recent appointment of Malcolm Lobban as chief executive officer and Tony
Dixon as group financial director forms part of the board's strategy of
strengthening the existing executive team by adding corporate and commercial
expertise to the acknowledged insurance expertise and experience of the
current executive.
Prospects
After resolving a number of issues that were adversely affecting
performance, Alacrity is now able to focus on its core activities and to
build on its solid client base. New management, supported by a committed
team of highly trained staff, is well poised to deliver improved results and
return the group to profitability in the 2002 financial year.
Notes
These results have been compiled in accordance with statements of Generally
Accepted Accounting Practice in South Africa.
The same accounting policies and methods of computation have been used in
the preparation of these audited statements as were used in the preparation
of the audited financial statements to 31 December 2001.
By order of the board
N A Ntsele M H Lobban
Chairman Chief Executive Officer
Johannesburg
20 March 2002
Executive directors
M H Lobban (Chief Executive Officer), A D Dixon, B D James,
S D Levitt, M H Muller, Z B H Nkosi.
Non-executive directors
N A Ntsele (Non-executive Chairman), J J du Plooy, A Hayward, L Keel, D
Masson,
H B Mkhize, S A Msibi.
Transfer secretaries
Mercantile Registrars Limited
11 Diagonal Street
Johannesburg 2001
Registered office
Fifth Floor
The Towers
28 Plein Street
Johannesburg 2001
