| Thu 11 Apr 2002, 0:00 | | Explorer - Audited Group Results For The Year |
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EXPLORER CORPORATION HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/010950/06)
JSE Share code: EPL ISIN: ZAE000017489
("Explorer")
Audited group results for the year ended 31 December 2001
Audited Group Income Statement
for the period ended 31 December 2001
2001 2000
R'000 R'000
Revenue 2 219 5 976
Cost of sales - (1 400)
Gross profit 2 219 4 576
Abnormal profit 5 230 -
Other operating expenses (15 314) (34 090)
Loss before finance costs (7 865) (29 514)
Finance costs (33) (397)
Loss before taxation (7 898) (29 911)
Taxation - -
Net loss for the year (7 898) (29 911)
Basic and diluted loss
per share (cents) (4,9) (37,23)
Headline loss per share (cents) (3,2) (25,91)
Audited Group Balance sheet
at 31 December 2001
2001 2000
R'000 R'000
ASSETS
Non-current assets 10 367 18 472
Property, plant and equipment 629 1 276
Loans 2 2 295
Intangibles 4 869 6 862
Development expenditure 4 867 8 039
Current assets 2 351 2 984
Trade and other receivables 12 1 809
Cash and cash equivalents 2 339 1 175
Total assets 12 718 21 456
EQUITY AND LIABILITIES
Capital and reserves 11 788 14 686
Share capital and premium 52 222 47 222
Accumulated loss (40 434) (32 536)
Non-current liabilities
Long-term liabilities - 165
Current liabilities 930 6 605
Short-term borrowings - 86
Trade and other payables 930 6 519
Total equity and liabilities 12 718 21 456
Statement of changes in equity
for the year ended 31 December 2001
Share Share Accumulated
R'000 capital premium Loss Total
Balance at
1 January 2000 800 46 022 (2 625) 44 197
Issue of Share Capital 80 320 - 400
Share issue expenses - 1 - 1
Net loss for the year
to December 2000 - - (29 911) (29 911)
Balance at
31 December 2000 880 46 343 (32 536) 14 687
Net loss for the year - - (7 898) (7 898)
Issue of share capital 1 700 3 300 - 5 000
Balance at
31 December 2001 2 580 49 643 (40 434) 11 789
Audited Group Cash Flow Statement
for the period ended 31 December 2001
2001 2000
R'000 R'000
Net cash flows from operating activities (3 883) (18 417)
Net cash flows from investing activities 298 (453)
Net cash flows from financing activities 4 749 (1 897)
Net increase/(decrease) in cash
and cash equivalents for period 1 164 (20 767)
Cash and cash equivalents
at beginning of period 1 175 21 942
Cash and cash equivalents at end of period 2 339 1 175
Supplementary information
2001 2000
Weighted average number of
ordinary shares in issue ('000) 161 699 80 351
Total number of ordinary
shares in issue ('000) 258 000 88 000
Net asset value
per ordinary share (cents) 4,57 16,68
Net tangible asset value per
share (cents) 0,79 (0,24)
Reconciliation of headline loss R'000 R'000
Headline loss per share has
been calculated in terms of AC 306
Attributable loss for period (7 898) (29 911)
Adjusted for:
- Write-off of Star investment - 1 642
- Loss on disposal of fixed assets - 813
- Goodwill amortisation 240 240
- Write-down of leasehold improvements - 1 729
- Impairment provision 2 492 -
- Write-down of Share
Incentive Trust 1 4 672
Headline loss (5 165) (20 815)
Capital expenditure
- Extended during the period - 3 637
- Authorised or committed at year-end - -
Comments
The directors of Explorer hereby present the results of the Group in respect
of the year ended 31 December 2001.
Background
Explorer listed on the JSE Securities Exchange South Africa ("JSE")
during 1999. Explorer is the holding company of the Explorer Group of
Companies. The company launched South Africa's first independent Visa
branded credit card during 1999.
Business review
The main focus during the current year under review was to strategically
lay the foundations for re-establishment of the business. The directors are
finalising agreements regarding African card-related businesses on the
continent as well as such agreements that relate to similar products being
issued in South Africa. While 2001 was a year of relative inactivity from a
trading perspective, it is believed that 2002 will reflect an improvement in
results and value to shareholders.
Financial review
The Group reported a consolidated loss of R7,898 million for the year
ended 31 December 2001.
The company has continued to accrue for income due from the credit card
debtors' book that is housed at its current banking partner. As no new
credit cards had been issued, no cost of sales had been generated. The
directors have decided on a prudent approach to revenue recognition and have
provided for non-recoverability of such revenue as part of other operating
expenses.
Other operating expenses include a write-off of the loan due by the Share
Incentive Trust as well as non-recoverable loans from subsidiaries.
The abnormal profit arose out of reversal of over provisions raised in
the prior year pertaining to the liquidated subsidiary. Finance costs have
been substantially reduced due to the settling of the company's overdraft
early in the current financial year.
Loss per share improved from 37,23 cents in 2000 to 4,9 cents in 2001 and
headline loss per share of 25,91 cents in 2000 to 3,2 cents in 2001.
At the annual general meeting of the company held in June 2001, the
further issue of shares to Loita Capital Partners International ("Loita")
was approved, as part of a conversion of funding loans to shares. A further
170 000 000 shares were issued with 120 000 000 shares issued at 2,5 cents
per share and 50 000 000 shares at 4 cents per share. This had the result of
increasing share capital and premium by R5 million.
Long-term liabilities and trade payables decreased as a result of settlement
of such liabilities and refer to liabilities incurred in the normal line of
business.
Loans due to the company, which were not recoverable from investments, of
R1,9 million, were written-down. Intangible assets and development
expenditure were amortised per the company's accounting policies. Such
assets with no potential of generating revenue were provided for as part of
an impairment provision.
Trade and other receivables reduced as a result of the company's prudent
approach to revenue recognition in providing fully against the amounts due
from its current banking partner.
The cash position remained sufficient to fund operating overheads as a
result of Loita's continued funding of the Group.
Prospects
Loita has recognised the intellectual capital and know-how residing
within the Explorer brand and the opportunities to leverage such potential
into the African market. Such attributes coupled with Loita's expertise,
knowledge and best business practice within African countries provides an
exciting opportunity for both Explorer and Loita to pursue rapid market
penetration within the region.
The directors of Explorer envisage a roll out of specifically identified
financial services products for both regional African as well as South
African markets, through the utilisation of existing Loita structures.
Financial services include short-term providers of financial services and
banking products as well as tailored card and loyalty products across the
continent.
Short-term financing currently focuses on Zambia with the largest percentage
of earnings being US dollar-based. The directors envisage a rapid expansion
into Malawi, Botswana, Mozambique and Tanzania as well as South Africa.
Card and related products are to be issued in Malawi, Zambia, Angola, Rwanda
and several other identified countries.
Dividends
No dividends will be paid in the foreseeable future, as cash generated
will be retained and utilised to grow and expand the business of the Group.
South African Statements of GAAP and Companies Act requirements
The financial statements were drawn up in compliance with South African
Statements of Generally Accepted Accounting Practices ("GAAP") and the
company has complied with requirements of the Companies act.
This release has been prepared on a going concern basis. The report of
the Independent Auditors, Ernst & Young Chartered Accountants SA, will
emphisize the following:
The directors are in the process of finalising agreements which will,
together with Loita's ongoing funding, ensure continuing operations in the
foreseeable future.
The report of the Independent Auditors will be available at the company's
registered office for inspection.
JSE requirements
The directors of the company ensured compliance with the requirements of
the JSE during the year under review.
For and on behalf of the board.
Justin Chinyanta
Chairman
10 April 2002
Registered office
C/o Loita Capital Partners SA
2nd Floor, East Wing
11 Alice Lane, Sandton, 2194
Transfer secretaries
Mercantile Registrars Limited
8th Floor, 11 Diagonal Street, Johannesburg, 2001
Directors
N J Chinyanta, Y Bazian, C Clarke, C Van Nieuwkerk, A Stanger*
*Non-executive
