| Tue 23 Apr 2002, 0:00 | | African Harvest Limited - Unaudited Interim Finan |
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Months Ended 31 March 2002
African Harvest Limited
(Registration No: 1997/013827/06)
(ISIN Code: ZAE000013538)
(Share Code: AHV)
UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2002
AFRICAN HARVEST FUND MANAGERS CONTINUED TO PERFORM WELL AND, AFRICAN HARVEST
CAPITAL PERFORMED SATIFACTORILY. THE GROUP MADE A HEADLINE LOSS OF
R2 276 000, AFTER EXCEPTIONAL OPERATING WRITE OFFS OF R31 374 000.
FURTHERMORE, SUBSTANTIAL WRITE OFFS WERE MADE ON THE REGIONAL AND STRATEGIC
PORTFOLIOS RESULTING IN AN ATTRIBUTABLE LOSS OF R54 496 000. THESE RESULTS
ARE IN LINE WITH THE TRADING UPDATE* ISSUED ON 13 MARCH 2002.
As indicated in the trading update, the carrying values of certain
strategic, regional and private equity investments were re-evaluated and the
carrying values of these investments were impaired. It is the Group's
stated intention to withdraw from the private equity market and to dispose
of certain of its strategic investments. Subsequent to the impairments, the
board is confident that investments are conservatively valued.
Although the Group's financial results are less than satisfactory, the
underlying fund management and investment banking businesses continue to
perform well and the benefits of concentrating on these businesses are
becoming evident. Cost levels are still high, but the benefits of the cost-
cutting exercise undertaken by management should start to be realised during
the second half of the financial year.
On 25 February 2002 African Harvest made a cash distribution to shareholders
of R281 million, amounting to 100 cents per share. In its five-year history
the Group has returned capital of 620 cents per share to shareholders after
an initial capitalisation of 500 cents per share. After the latest
decapitalisation, the net asset value of the Group is still in excess of 180
cents per share, with a substantial portion of this value in the form of
cash or liquid investments.
AFRICAN HARVEST CAPITAL
In line with previous years African Harvest Capital had a slow start for the
period under review in an environment where opportunities were limited.
Results were, however, in line with budget and reflect the continuing focus
on investment banking, corporate advisory services, structured finance,
specialised fund management and stock broking. The Corporate Finance team
has built a strong brand in its targeted market niche and continues to win
significant mandates, although certain of these mandates have long lead
times. The investment banking team is growing and African Harvest
Securities has continued to expand its client base.
It is anticipated that African Harvest Capital will continue to trade
profitably in a difficult market environment.
AFRICAN HARVEST FUND MANAGERS
African Harvest Fund Managers has produced substantial growth in assets
under management over the last three years. In particular, the business
recorded large positive inflows in the six-month period under review. The
investment teams are stable and are building impressive track records.
Underlying the investment performance, the growth, value and fixed-interest
teams have developed innovative products that bode well for future growth
and profitability. Focus is being placed on reducing the level of costs in
this area.
As detailed below a number of management changes have been made that will
increase the investment focus and should lead to further performance
enhancements for our clients.
AFRICAN HARVEST REGIONAL AND STRATEGIC INVESTMENTS
Where appropriate, regional and strategic investments are being disposed of.
Where the Group continues to hold investments, they have been written down
to their net realisable values and are being managed to generate positive
returns.
MANAGEMENT APPOINTMENTS
Tony Ruiters was appointed chief operating officer of African Harvest
Limited on 7 March 2002, after the retirement of Leon Campher due to ill-
health. Tony was the managing director of African Harvest Fund Managers and
deputy chief operating officer of African Harvest Limited before this
appointment. This move necessitated a restructuring of the management team
at African Harvest Fund Managers. Rowan Williams-Short was appointed
managing director of Fund Managers with Simon Hudson-Peacock and Heather
Jackson being appointed as chief investment officers for African Harvest
Value Managers and African Harvest Fixed Interest Managers respectively.
Tony Ruiters, Rowan Williams-Short and Ethan Dube, managing director of
African Harvest Capital, have joined the African Harvest Limited board.
LOOKING FORWARD
The Group's focus will be on the fund management, investment banking and
stock-broking businesses and the capital available will be deployed in
growing these businesses. There will be a strong focus on improving the
Group's return on equity (ROE) and bringing down costs. Both African
Harvest Fund Managers and African Harvest Capital are well positioned to
provide sustainable growth in profitability.
Market conditions have been tough and will remain so in the foreseeable
future. The Group has been restructured and has very good people. We are
committed to our businesses and believe that we are well positioned to
produce satisfactory returns for our clients and shareholders.
ACCOUNTING POLICIES
The interim financial statements are prepared in accordance with South
African statements of Generally Accepted Accounting Practice. The
accounting policies applied in the interim financial statements are
consistent with those applied in the annual financial statements for the
year ended 30 September 2001.
GROUP BALANCE SHEET
as at 31 March 2002
Unaudited Unaudited Audited
6 months 6 months 12 months
31-Mar-02 31-Mar-01 30-Sep-01
R'000s R'000s R'000s
ASSETS
Property, plant and equipment 2,879 5,898 4,925
Investments in associates 56,449 133,224 56,424
Financial investments 162,067 351,830 348,770
Goodwill 4,104 - 10,945
Deferred taxation 16,560 9,136 20,229
Other non-current assets 4,202 25,268 10,325
Non-current assets 246,261 525,356 451,618
Trading investments and
receivables 213,483 192,003 703,944
Other receivables 119,038 86,740 63,459
Cash and cash equivalents 101,859 260,293 285,377
Current assets 434,380 539,036 1,052,780
Total assets 680,641 1,064,392 1,504,398
EQUITY AND LIABILITIES
Ordinary shareholders' funds 510,688 875,063 846,796
Outside shareholders' interest 296 2,500 296
Total shareholders' fund 510,984 877,563 847,092
Long-term liabilities 40,250 67,145 32,642
Deferred taxation 14,478 12,908 11,955
Non-current liabilities 54,728 80,053 44,597
Trading account liabilities 57,666 4,020 517,183
Other liabilities 37,404 34,965 86,537
Taxation owing 1,928 - 2,168
Bank overdraft 16,363 38,317 5,089
Shareholders for dividends 1,568 29,474 1,732
Current liabilities 114,929 106,776 612,709
Total equity and liabilities 680,641 1,064,392 1,504,398
GROUP INCOME STATEMENT
for the six months ended 31 March 2002
Unaudited Unaudited Audited
6 months 6 months 12 months
31-Mar-02 31-Mar-01 30-Sep-01
R'000s R'000s R'000s
Fee and commission income 43,715 35,439 82,113
Investment income 22,076 36,376 82,892
Net interest income 15,124 12,232 30,710
Other income 6,760 5,112 8,450
Total income 87,675 89,159 204,165
Operating expenses 53,688 53,469 129,482
33,987 35,690 74,683
Impairment of operating
investments 31,374 - -
Operating income 2,613 35,690 74,683
Impairment of other assets 49,561 - 60,700
Net income / (loss) before
taxation (46,948) 35,690 13,983
Taxation 7,548 6,799 12,046
Net income / (loss) after
taxation (54,496) 28,891 1,937
Share of associates' retained income /
(accumulated losses) - 2,876 (803)
Net income / (loss) before minority
interest (54,496) 31,767 1,134
Minority interest - 2,500 296
Net income / (loss) attributable to
ordinary shareholders (54,496) 29,267 838
Headline earnings adjustments
- Impairment of investments in
associates 41,829 - 60,700
- Profit on sale of associates - (14,579) (14,579)
- Impairment of property, plant and
equipment 1,428 - -
- Impairment on sale of property,
plant and equipment (77) - -
- Goodwill impairment 4,104 - -
- Goodwill amortisation 2,736 - 38
- Impairment of film scheme
investment 2,200 - -
Headline earnings / (loss) (2,276) 14,688 46,997
Weighted average number of shares
in issue ('000) 281,387 280,447 280,590
Earnings per share
- attributable (cents) (19.37) 10.44 0.30
- headline (cents) (0.81) 5.24 16.75
Financial performance ratios
Return on average
shareholders' funds (%) (7.94) 6.70 0.10
Non-interest income to
total income (%) 82.75 86.28 84.96
Share performance
Share price high (cents) 310 550 550
Share price low (cents) 130 250 250
Capital reduction per
share (cents) (100) - -
Market capitalisation (R'000) 366,434 1,095,000 729,982
Net asset value per
share (cents) 182 313 302
Total shareholders' funds (R'000) 510,984 877,563 847,092
ABRIDGED GROUP CASH FLOW STATEMENT
for the six months ended 31 March 2002
Unaudited Unaudited Audited
6 months 6 months 12 months
31-Mar-02 31-Mar-01 30-Sep-01
R'000s R'000s R'000s
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash received before changes to
operating assets and liabilities 30,887 13,851 51,111
Net cash applied to operating assets
and liabilities (82,571) (408,798) (288,991)
Cash applied to operations (51,684) (394,947) (237,880)
Taxation paid (3,033) (4,202) (4,844)
Net cash applied to operating
activities (54,717) (399,149) (242,724)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash received on acquisition of
subsidiaries - 175 15,373
Cash received from / (applied to)
associates (10,000) 85,392 96,407
Cash received from / (applied to)
other investments 152,912 (44,385) (122,083)
Net cash received from / (applied to)
investing activities 142,912 41,182 (10,303)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of
share capital 260 - 162
Cash payments to shareholders (282,037) (40,175) (67,917)
Reduction of long-term liabilities (1,210) (18,331) (37,379)
Net cash applied to financing
activities (282,987) (58,506) (105,134)
NET DECREASE IN CASH AND CASH
EQUIVALENTS (194,792) (416,473) (358,161)
Cash and cash equivalents at the
beginning of the period 280,288 683,449 683,449
Cash and cash equivalents at the
end of the period 85,496 221,976 280,288
STATEMENT OF CHANGES IN ORDINARY SHAREHOLDERS' FUND
for the six months ended 31 March 2002
Total
Share Share Retained s/holders'
capital Premium income funds
R'000 R'000 R'000 R'000
Balance at 1 October 2000 70,029 264,196 511,571 845,796
Net income attributable to
ordinary shareholders - - 29,267 29,267
Balance at 31 March 2001 70,029 264,196 540,838 875,063
Issue of shares to the Executive
Share Incentive Scheme 162 - - 162
Net loss attributable to
ordinary shareholders - - (28,429) (28,429)
Balance at 30 September 2001 70,191 264,196 512,409 846,796
Issue of shares to the Executive
Share Incentive Scheme 260 - - 260
Capital reduction of 100 cents
per share - (264,196) (17,676) (281,872)
Net loss attributable to
ordinary shareholders - - (54,496) (54,496)
Balance at 31 March 2002 70,451 - 440,237 510,688
SEGMENTAL ANALYSIS
for the six months ended 31 March 2002
(1) (2) (3) (4) (5)
(6) (7) (8)
Operating income 36,581 22,704 26,144 32,621 9,826
21,602 72,551 76,927
Net interest income 1,023 1,474 4,204 (4,595) 9,897
15,353 15,124 12,232
Total income 37,604 24,178 30,348 28,026 19,723
36,955 87,675 89,159
Operating expenses 24,298 20,756 17,620 11,911 11,770
20,802 53,688 53,469
13,306 3,422 12,728 16,115 7,953
16,153 33,987 35,690
Impairment of operating
investments - - 4,104 - 27,270
- 31,374 -
Operating income / (loss)
before taxation 13,306 3,422 8,624 16,115 (19,317)
16,153 2,613 35,690
Taxation 3,828 1,100 2,367 4,328 1,353
1,371 7,548 6,799
Operating income / (loss)
after taxation 9,478 2,322 6,257 11,787 (20,670)
14,782 (4,935) 28,891
Fund Management - 2002
Fund Management - 2001
Investment banking & stockbroking 2002
Investment banking & stockbroking 2001
Centre & investments 2002
Centre & investments 2001
Total 2002
Total 2001
BY ORDER OF THE BOARD
MASHUDU ELIAS RAMANO
NON-EXECUTIVE CHAIRMAN
ANTHONY CHARLES RUITERS
CHIEF OPERATING OFFICER
RUCHSANA BHAYAT
COMPANY SECRETARY
23 APRIL 2002
COMPANY REGISTRATION No: 1997/13827/06
TRANSFER SECRETARIES: COMPUTERSHARE SERVICES LIMITED
REGISTERED ADDRESS: AFRICAN HARVEST HOUSE, BOUNDARY TERRACES, 1 MARIENDAHL
LANE, NEWLANDS, CAPE TOWN 7700
POSTAL ADDRESS: P.O. BOX 23855, CLAREMONT, 7735. TEL: +27-21-670 4600 FAX:
+27-21-670 4651, www.africanharvest.co.za
DIRECTORS: M.E. Ramano (non-executive chairman), C.B. Brayshaw, E.G. Dube,
F.J. Robertson, A.C. Ruiters, G.R. Tipper, R.J. Williams-Short
*Trading update available on the African Harvest website
