| Mon 25 Mar 2002, 0:00 | | Dynamic - Unaudited Results For The Year Ended 31 |
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Dynamic Cables RSA Limited
(Registration number 1987/001807/06)
Share code: DYM
ISIN: ZAE000028270
("Dynamic" or "the Company")
Unaudited results for the year ended 31 December 2001
Abridged income statement
2001 2000
R000's R000's
Turnover 73,418 106,265
Cost of sales (42,880) (92,251)
Gross profit 30,538 14,014
Other operating costs (22,934) (51,888)
Operating profit 7,604 (37,874)
Abnormal items 2,274 48,896
Results from operating activities 9,878 11,022
Income from investments 1,274 -
Finance charges (2,004) (2,729)
Profit before taxation 9,148 8,293
Taxation (3,670) (5)
Net profit for the year 5,478 8,288
Cents Cents
Earnings/(loss) per share 12.3 15.7
Fully diluted earnings / (loss)
per share 5.4 15.4
Headline earnings / (loss) per share 14.8 (76.9)
Fully diluted headline
earnings / (loss) per share 6.5 (75.5)
Earnings per share after potential
Reduction 12.3 -
'000 '000
Number of shares in issue 46,734 53,778
Weighted number of shares in issue 44,575 52,387
Fully diluted number of shares
(note 1) 101,734 53,778
Number of shares after potential
reduction (note 2) 18,100 -
Reconciliation of headline earnings
per share
Net profit / (loss) for the period 5,478 8,288
Abnormal items (2,274) (48,896)
Goodwill amortised 3,392 -
Headline earnings 6,596 (40,608)
Note 1
Caclulated on the basis of ordinary shares in issue on 31 December 2001,
further diluted by the potential ordinary shares to be issued on the
settlement of the purchase price of Dynamic Cables SA (Pty) Ltd.
Note 2
Caclulated on the basis of ordinary shares in issue on 31 December 2001,
adjusted for the potential reduction of approximately 28 million shares,
pending the outcome of current legal proceedings.
ABRIDGED balance sheet
2001 2000
R000's R000's
ASSETS
Non-current assets 58,569 41
Tangible assets 8,691 41
Intangible assets 44,565 -
Investments - -
Other financial assets 2,118 -
Deferred taxation 3,195 -
Current assets 38,358 31,298
Loans 1,455 -
Inventories 14,942 -
Trade and other receivables 11,570 27,712
Forward exchange contracts 2,048 -
Cash and cash equivalents 8,343 3,586
Total assets 96,927 31,339
EQUITY AND LIABILITIES
Equity capital and reserves 27,499 24,839
Share capital and premium 67,207 70,025
Accumulated loss (39,708) (45,186)
Non-current liabilities 4,182 -
Long-term borrowings 3,201 -
Deferred taxation 981 -
Current liabilities 65,246 6,500
Current portion of long-term liabilities 37,811 -
Taxation 7,747 -
Trade and other payables 19,659 6,500
Bank overdraft 29 -
Total equity and liabilities 96,927 31,339
abridged statement of changes in equity
Share Distributable
Capital Shares reserve/
and share to be (Accumulated
premium issued loss) Total
R000's R000's R000's R000's
Balance at 1 January 2000 74,449 3,642 (53,474) 24,617
Shares issued during
the period 3,642 (3,642) -
Reduction of share capital (8,066) (8,066)
Net profit for the year 8,288 8,288
Balance at 1 January 2001 70,025 - (45,186) 24,839
Shares issued during
the period 4,000 4,000
Shares reacquired (6,818) (6,818)
Net profit for the year - 5,478 5,478
Balance at 31 December 2001 67,207 - (39,708) 27,499
ABRIDGED cash flow statement
2001 2000
R000's R000's
CASH FLOWS FROM OPERATING ACTIVITIES 30,887 (40,848)
Cash receipts from customers 97,851 123,716
Cash paid to suppliers (66,234) (160,902)
Cash generated / (absorbed) from
operations (note 1) 31,617 (37,186)
Interest received 1,274 -
Interest paid (2,004) (2,729)
Normal taxation paid - (933)
CASH FLOWS FROM INVESTING ACTIVITIES (21,103) 89,632
Purchase of tangible assets (3,438) (1,414)
Proceeds on disposal of tangible assets 54 25,097
Net proceeds on disposal of business - 65,949
Purchase of financial assets (3,573) -
Purchase of subsidiary (14,151) -
Cash flow on sale of subsidiary 5 -
CASH FLOWS FROM FINANCING ACTIVITIES (5,056) (20,112)
Reduction of share premium - (8,066)
Payment of short-term borrowings - (5,660)
Payment of long-term borrowings - (6,386)
Proceeds from long-term borrowings 1,762 -
Shares reacquired (6,818) -
NET INCREASE / (DECREASE) IN CASH AND
CASH EQUIVALENTS 4,728 28,672
Cash and cash equivalents at the beginning
of the year 3,586 (25,086)
Cash and cash equivalents at the end
of the year 8,314 3,586
Note 1: Reconciliation of profit before
taxation for the year
Profit before taxation 9,148 8,293
Adjustments 5,951 (43,727)
- (Profit) / Loss on disposal of
tangible assets (40) -
- Depreciation 7,567 2,440
- Profit on disposal of Satellite Data
Networks (Pty) Ltd - (792)
- Profit on disposal of the business of
Conlog (Pty) Ltd - (48,104)
- FEC profit (1,919) -
- Investment income (1,274) -
- Finance charges 2,004 2,729
- Abnormal items (374) -
- Other non-cash items (13) -
Operating profit before working capital
changes
(Increase) / Decrease in working capital 16,518 (1,752)
- (Increase) / Decrease in inventories (8,838) 33,802
- Decrease in trade and other receivables 24,433 17,454
- Increase / (Decrease) in trade and
other payables 923 (53,008)
Cash generated from operations 31,617 (37,186)
Commentary
The draft unaudited results of the Company and the state of its affairs are
as set out in the following statements.
Review of results
The major trading operation Dynamic Cables SA (Pty) Ltd and its subsidiaries
have delivered sound results and strong cashflows. Turnover has decreased
from R106 million in the old business to R73 million in the new business,
and the prior year loss before tax and abnormal items of
R41 million was converted to a profit before tax and abnormal items of R7.6
million. The new direction and focus has restored the earnings base and
future viability of the group.
17 million shares were repurchased during the year at 40c per share
resulting in a reduction of share capital. 10 million new shares were
subsequently issued to Cape Empowerment Trust for cash at 40c per share to
maintain solid empowerment credentials, as insufficient shareholders
participated in the share repurchase.
As reported previously, the accelerated settlement for the sale of the
prepayment metering business referred to in the annual report was
successfully concluded during the year and Dynamic Cables SA (Pty) Ltd was
purchased effectively 1 January 2001 which gave rise to the name change.
Consequently, the shell company which previously housed the Conlog business,
was placed in voluntary provisional liquidation after year-end as it was
deemed unnecessary to retain the shell as part of the group. During the
conduct of proceedings relating to this provisional liquidation, possible
irregularities regarding the issue of shares in Dynamic in previous years
became apparent to the current board, who are of the opinion that up to 28
million shares may be cancelled. At the request of the Company, the trading
of shares listed on the JSE Securities Exchange have been suspended, pending
full investigation of these concerns.
Following from the suspension, the option for the Company to settle its
outstanding obligation to the vendor of Dynamic Cables SA (Pty) Ltd in
shares, is not available to the Company at present, and therefore the full
outstanding purchase price of Dynamic Cables SA (Pty) Ltd has been reflected
as a vendor creditor. In determining the quantum of this creditor, the
directors have assumed a total consideration of R54 million based on the
amount agreed between the parties in an addendum to the original agreement
accelerating the acquisition. At the time of the suspension a circular was
being prepared, dealing with this matter.
Both the seller and the purchaser regard a share price of 60 cents per share
to be fair in determining the settlement of the vendor debt should this be
done by way of shares at a later date.
Notwithstanding the fact that the shell company formerly used to house the
Conlog business was placed in provisional liquidation only after year-end,
the directors are of the opinion that it would be misleading to consolidate
a deficit in a company in the process of being liquidated. Full provision
has been made against group loans to Capital Options (Pty) Ltd.
Goodwill
Goodwill of R34 million is expected to arise on acquisition of Dynamic
Cables SA (Pty) Ltd being the consideration paid in excess of the net asset
value of the Company and its subsidiaries. In terms of the group's policy to
amortise intangible assets over 10 years, a charge of
R3.4 million is included in operating profit for the year.
Abnormal Items
The abnormal items reflected on the income statement comprise the following
charges and releases:
Provision for restructuring costs R2.7 million
Provisions for automotive division sale, provident fund
contributions and unclaimed dividends no longer required (R4.6 million)
Write off of loan to Capital Options (Pty) Ltd R4.5 million
Group gain arising on non-consolidation of
Capital Options (Pty) Ltd (R4.9 million)
Total abnormal items (R2.3 million)
Dividends
The directors have resolved not to declare a final dividend. This issue will
receive consideration as soon as the share register has been correctly
stated.
Prospects
The Company has successfully implemented the first step in the creation of a
new empowerment telecommunications company and has begun to realise the
synergies that the board believes exist between the operating subsidiaries.
The strong earnings of these subsidiaries will allow the Company to grow
from a stable base and augment Dynamic with cash positive businesses. The
Company will continue to adopt a conservative approach in considering any
future acquisitions to ensure that its cash positive base is preserved.
On behalf of the board
Shaun Rai Rorden McGregor
Acting Chairman Company Secretary 25 March 2002
DYNAMIC CABLES RSA LIMITED
4th Floor, Swiss-Re Building, 5 Protea Street, Claremont
Directors: S L Rai (Acting chairman), M J I Brown, R F Haywood,
A F Pheiffer, T D Rai
