| Thu 28 Mar 2002, 0:00 | | Sail Audited Group Results For The Year Ended |
|
Southern African Investments Limited: Incorporated in the Republic of South
Africa
Registration number: 1941/014601
Share code: sil
ISIN Code: ZAE 000013041
("SAIL")
INCOME STATEMENT
for the year ended 31 December 2001 31-Dec 31-Dec
2001 2000
R 000's R 000's
Revenue 108,882
Operating profit 20,387 21,252
Amortisation of intangible assets -3,976 -3,426
Profit from operations before abnormal items 16,411 17,826
Loss on sale of investments and write down of -4,420 -21
loans
Profit from operations 11,991 17,805
Finance costs -13,384 -14,001
Income from associates and joint ventures 11,136 11,106
Profit before taxation 9,743 14,910
Taxation 2,724 112
Profit after taxation 12,467 15,022
Minority interest -210 -167
Net profit for the year 12,257 14,855
Earnings per share (cents) 4.81 7.23
Headline earnings per share (cents) 8.07 8.01
RECONCILIATION OF HEADLINE EARNINGS
The calculation of earnings per share is based on earnings attributable to
ordinary shareholders of R12 257 169 (2000: 14 854 698) and weighted average
shares in issue of 254 776 229 (2000: 205 528 746).
The calculation of headline earnings per share is based on earnings
attributable to ordinary shareholders of R 20 562 987(2000: R 16 462 807)
and weighted average shares in issue of 254 776 229 (2000: 205 528746).
Reconciliation of Headline Profit Taxation Minority Net
Earnings per share: before
taxation share- Income
holders
31-Dec-01 interest
Per the income statement 9,743 2,724 -210 12,257
Adjustments
Goodwill - associates, joint 4,035 - -97 3,938
ventures and subsidiaries
Intercompany profit on sale -40 - - -40
of division realised
Profit on sale of property, -21 - - -21
plant and equipment
Loss on sale of property, 10 - -1 9
plant and equipment
Loss on sale/write down of 4,420 - - 4,420
businesses and shares
Headline Earnings 18,147 2,724 -308 20,563
BALANCE SHEET
at 31 December 2001
31-Dec 31-Dec
2001 2000
R 000's R 000's
ASSETS
Non-current assets
Deferred taxation 9,535 4,499
Investments and loans 12,267 6,091
Intangible assets 94,572 93,126
Property, plant and equipment 53,810 43,984
Investments in associates and joint 163,869 57,962
ventures
334,053 205,662
Current assets
Other current assets 86,452 104,592
Short-term investments and loans 5,651 2,078
92,103 106,670
Total assets 426,156 312,332
EQUITY AND LIABILITIES
Ordinary shareholders interest 238,945 184,305
Minority interest 4,988 4,344
Non-current liabilities
Interest bearing borrowings 108,589 71,254
Non-interest bearing borrowings 4,500 4,375
Deferred taxation 414 -
Income received in advance 4,324 2,823
117,827 78,452
Current liabilities
Current portion of interest bearing 19,788 14,980
borrowings
Current portion of non-interest 2,034 8,465
bearing borrowings
Other current liabilities 42,574 21,786
64,396 45,231
Total equity and liabilities 426,156 312,332
Net asset value per share (cents) 89.03 76.95
Shares in issue 273,991,915 245,168,386
STATEMENT OF CHANGES IN
EQUITY
for the year ended 31
December 2001
Non-
Stated Distribut distributab
able le
capital reserves reserves Total
R 000's R 000's R 000's R 000's
Balance at 1 January 2000 44,894 15,191 225 60,310
Issue of share capital 110,000 - - 110,000
Share issue expenses written -860 - - -860
off
Net profit for the year - 14,855 - 14,855
Transferred to non- - -3,516 3,516 -
distributable reserve
Balance at 31 December 2000 154,034 26,530 3,741 184,305
Issue of share capital 43,235 - - 43,235
Share issue expenses written -900 - - -900
off
Net profit for the year - 12,257 - 12,257
Foreign currency translation - - 48 48
reserve
Transferred to non- - -2,245 2,245 -
distributable reserve
Balance at 31 December 2001 196,369 36,542 6,034 238,945
CASH FLOW STATEMENT
for the year ended 31
December 2001
31-Dec 31-Dec
2001 2000
R 000's R 000's
Cash flow from operating 10,933 4,090
activities
Cash outflow from investing -42,124 -24,828
activities
Cash flow from financing -9,330 86,394
activities
Reconciliation of cash and
cash equivalents
Net increase / (decrease) in -40,521 65,656
cash and cash equivalents
Cash and cash equivalents at 73,509 7,853
the beginning of the year
Cash and cash equivalents at 32,988 73,509
the end of the year
SEGMENT REPORT
for the year
ended 31 December
2001
Sports SAIL Other Total
Brands: Sport Adjustments
Rugby, and
cricket
and Entertai
golf nment
R 000's R 000's R 000's R 000's R 000's
Revenue
External sales 82,967 9,851 19,284 112,102
Inter-segment -3,220 -3,220
sales
Total revenue 82,967 9,851 19,284 -3,220 108,882
Segment results 5,039 2,638 -6,204 - 1,473
Other income 3,863 89 6,566 - 10,518
Finance costs -13,384
Income from 11,572 2,578 -3,014 - 11,136
associates and
joint ventures
Minority interest -210
Taxation 2,724
Net profit for the 12,257
year
Other information
Segment assets 131,706 19,958 58,361 -5,635 204,390
Investment in 51,658 99,846 5,204 - 156,708
associates
Investment in 7,161 - - - 7,161
joint ventures
Investments and 17,918
loans
Goodwill 30,444
Deferred taxation 9,535
Total assets 426,156
Segment 30,188 12,604 9,331 -5,635 46,488
liabilities
Long-term interest 108,589
bearing borrowings
Current portion of 19,788
interest bearing
borrowings
Long-term non- 4,500
interest bearing
borrowings
Current portion of 2,034
non-interest
bearing borrowings
Deferred taxation 414
Taxation 410
Total liabilities 182,223
Capital 13,011 29 1,410 - 14,450
expenditure
Depreciation 2,368 1,826 725 - 4,919
RESTATED SEGMENT REPORT
for the year ended 31
December 2000
Revenue
External sales 60,992 6,595 5,538 73,125
Inter-segment - - -242 -242
sales
Total revenue 60,992 6,595 5,538 -242 72,883
Segment results 13,766 1,178 -5,050 -242 9,652
Other income 4,611 272 3,270 - 8,153
Finance costs -14,001
Income from 9,010 -842 2,938 - 11,106
associates and
joint ventures
Minority interest -167
Taxation 112
Net profit for the 14,855
year
Other information
Segment assets 121,708 21,665 74,266 -3,095 214,544
Investment in 39,044 5,620 5,601 - 50,265
associates
Investment in 7,697 - - - 7,697
joint ventures
Investments and 8,169
loans
Goodwill 27,158
Deferred taxation 4,499
Total assets 312,332
Segment 16,094 7,398 3,464 -3,095 23,861
liabilities
Long-term interest 71,254
bearing borrowings
Current portion of 14,980
interest-bearing
borrowings
Long term non- 4,375
interest bearing
borrowings
Current portion of 8,465
non-interest
bearing borrowings
Taxation 748
Total liabilities 123,683
Capital 9,350 1 1,147 10,498
expenditure
Depreciation 1,112 1,636 334 - 3,082
During the year under review there were no changes in SAIL's accounting
policies.
OVERVIEW
SAIL is pleased to report solid growth in headline earnings, up by 25%, and
cash flow from operations, up by 167%. However, headline earnings per share
was flat at 1% growth, whilst earnings per share was down by 33%, due to
write off's and losses on disposal of non-performing assets.
The year 2001 will be remembered as challenging, with a recessionary
environment compounded by the 11 September attack on the World Trade
Centre.Reduced adspend seriously affected the bottom lines of most major
media groups. Major corporate failures during the year impacted on already
negative business and consumer confidence levels. The failed business models
of the dot com era and doubts regarding the short-term viability of
expensive 3G mobile licences also influenced the capital markets.
The global sports industry is not immune, as evidenced by the failure of
industry stalwart ISL, and industry profit warnings in a broader context. In
line with the changing environment SAIL disposed of non-performing assets in
the yearunder review.
In the year under review, SAIL's ability to grow in spite of the current
environment reflects a strong business with an entrepreneurial management
team who concentrated on enhancing and creating new revenue streams,
controlling costs and further applying its' business formulae domestically
and internationally. The decline of the Rand against major currencieshad a
postive impact on SAIL's performance, as a large portion SAIL's revenue is
earned in foreign currencies.
HIGHLIGHTS
The 167% improvement in cash generated by operations, which is a key
performance area for management.Acquisition of Vodacom Sport and
Entertainment, with its positive impact on SAIL's management depth,
corporate client base, and cash flow generation.
The emergence of Sportal Australia as the leading sports Internet business
in Australia, including the launch of AFL.com.au and 15 AFL (Aussie Rules)
franchise multimedia sites in partnership withTelstra.
The on-field success of our various Sports Brands, in particular particular
Western Province Rugby winning the prized Currie Cup for the second
consecutive year.
The merger of Ticketweb and Computicket, thereby consolidating the industry
and improving client service capacity.
The establishment of SA Rugby (Pty) Ltd by the South African Rugby Football
Union, which should contribute to the future commercialviability of rugby in
South Africa, in which SAIL is a stakeholder via its interests in the
provinces.
The conclusion of an empowerment transaction with AKA Capital(Pty) Ltd,
chaired by Mr Reuel Khoza, improving the equity of black empowerment groups
in SAIL to above 20%, subsequent to year-end.
BUSINESS STRATEGY
SAIL is focused on the sports industry and conducts its
business via four independent business units:
SAIL Sport and Entertainment
Complete sponsorship and event management services to
corporates
SAIL Sports Brands
Equity investments in Sports Brands and facilities
Managing and enhancing the commercial performance of Sports Brands
and facilities
SAIL Capital
Financial, business and media solutions to the sports industry
SAIL Global
Exporting of SAIL's intellectual capital and sports business
formulae to the global market to earn hard currency
SAIL'S GROWTH STRATEGY IS TARGETED AT:
The Domestic Sports Market
The strategy is to grow the sports industry as a whole through
SAIL's market leadership position, to exploit synergies between the
independent business units and to increase SAIL'S market share
of the total sports industry spend.
The Global Sports Market
The strategy is to export SAIL's intellectual capital into
international markets and earn the majority of the group's revenue
in hard currency. SAIL's formula is to joint venture with major
local partners in each geographical market and to acquire equity
stakes in global Sports Brands. SAIL will further market its
further market its "one stop" Sports Business Formulae into
international markets in return for fees and equity claw-ups.
ELECTRONIC SPORTS CONTENT MARKET
The strategy is to package quality content for electronic
distribution to the sports brands customer base, via sports
channel partnerships in broadcasting and telecommunications.
VODACOM SPORT AND ENTERTAINMENT (PTY) LTD (VSE)
100% of VSE was acquired effective 1 September 2001 for
R 88,2 million of which R 45 million was settled in cash and the
remainder with SAIL shares at R 1,50 per share. The shares were
issued in the 2002-year after Competition Commission approval was
granted (22 February 2002). During the period leading up to
Competition Commission approval SAIL was not allowed to control
VSE, however the terms of the acquisition gave SAIL a significant
influence and consequently VSE was treated as an associate from
1 September and the weighted average shares were adjusted
accordingly.
APPRECIATION
On behalf of our shareholders, I wish to thank our board members
(at group, subsidiary and associate level), management and staff
for their contribution during the year. In particular, I wish
to thank prominent business associates such as Clive Hirschon,
Stuart McDonald and Corder Tilney who excelled in their roles as
non-executive chairpersons at Sports Brand level.
A special word of welcome to Rod Macqueen who who has come on
board as Chairperson of SAIL Australia.
For and on the behalf of the Board
BC Esterhuyzen
Chairperson
KSE Troskie
Company Secretary
Registered Office
28th Floor
No 1 Thibault Square
Long Street
Cape Town 8001
P.O.Box 4755
Cape Town 8000
27-Mar-02
