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Quyn - Unaudited interim results for the six months ended 31 March 2002 and
Cautionary Announcement
QUYN HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1998/012245/06)
("Quyn")
(Share code: QUY ISIN: ZAE000017257)
Unaudited interim results for the six months ended 31 March 2002 and
Cautionary Announcement
ABRIDGED GROUP BALANCE SHEET
as at 31 March 2002
31 March 31 March 30 S
2002 2001
R 000`s (unaudited) (unaudited) (
(restated)
ASSETS
Non-current assets
Property, equipment and vehicles 31,965
30,270
Land and development costs 9,293 18, 517
Goodwill and intangibles 605
1,342
Unlisted investments 1,956
3,169
Loans to Joint ventures 2,040 -
Deferred taxation 104
7,689
45,963
60,987
Current assets
Land and development costs 32,096
81,064
Accounts receivable 25,396
29,420
Cash and cash equivalents 6,222
20,003
63,714 130,487
Total assets 109,677
191,474
EQUITY AND LIABILITIES
Capital and reserves 20,318
43,278
Outside shareholders` interest
- 10
Non-current liabilities
Long term liabilities 26,225
33,566
Negative goodwill 4,686 5,065
Provision for onerous contracts 3,882 4,257
34,793
42,888
Current liabilities
Current portion of long term 5,735 47,000
liabilities
Provision for onerous contracts 375 880
Short term loans 17,329
6,213
Accounts payable 19,929
31,992
Taxation 191
32
Bank overdraft 11,007
19,181
54,566
105,298
Total equity and liabilities 109,677
191,474
Net asset value per share (cents) 28.1 59.8
QUYN HOLDINGS LIMITED
ABRIDGED GROUP INCOME STATEMENT
for the six months to 31 March 2002
Six months Six months
ended ended
31 March 31 March 30 Se
2002 2001
R 000`s (unaudited) (unaudited) (a
(restated)
Revenue 45,240 49,333
Operating income/(loss) before 1,439
interest (784)
Net interest received / (paid)
(2,399) (4,604)
Operating income/(loss)
(960) (5,388) (
Income from investments
- 86
Exceptional item - Profit on sale of
subsidiaries - 775
Net income /(loss) before taxation
(960) (4,527) (
Taxation
(477) (561)
Income / (loss) after taxation
(1,437) (5,088) (
Share of associated companies` net - -
income
Outside shareholders` interest -
(10)
Loss attributable to ordinary
shareholders (1,437) (5,098) (
Ordinary shares in issue
End of period 72,391,134 72,391,134
72,
Weighted average 72,391,134 72,391,134
72,
End of period 5,365,682
-
Loss per share (cents) (2.0)
(7.0)
Less: Amortisation of goodwill 0.7 0.6
Profit on sale of investments - (1.1)
Write down of investments - -
Headline loss per share (cents) (1.3)
(7.5)
Ordinary dividends per share (cents) - -
Preference dividends per share (cents) -
-
QUYN HOLDINGS LIMITED
ABRIDGED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 March 2002
Six months Six months
ended ended
31 March 31 March
Se
2002 2001
R 000`s (unaudited) (unaudited) (a
(restated)
SHARE CAPITAL
Balance at beginning of period
778 778
Movement
- -
Balance at end of period
778 778
SHARE PREMIUM
Balance at beginning of period 1,509 1,509
Movement
- -
Balance at end of period 1,509 1,509
RESERVES
Retained income and non-distributable
reserves
Balance at beginning of period 19,468 46,143
Income attributable to ordinary shareholders
(1,437) (5,098) (
Foreign currency translation reserve -
-
Reversal of deferred tax asset -
-
Revaluation of insurance policy -
(54)
Balance at end of period 18,031 40,991
QUYN HOLDINGS LIMITED
ABRIDGED GROUP CASH FLOW
STATEMENT
for the six months ended 31
March 2002
Six months Six months Y
ended ended en
31 March 31 March 30 Septem
2002 2001 2
(unaudited) (unaudited) (audit
R 000`s (restated)
Cash utilised by operating (733)
activities (21,379) (38,4
Investing activities
Proceeds on sale of -
subsidiaries, net cash foregone 18,496 18,
Proceeds on sale of property, 6,985
equipment and vehicles 765 1,
Acquisition of goodwill and - -
intangibles (5
Acquisition of property, (185)
equipment and vehicles (650) (4,1
Disposal of land 1,874
520
Other 2,653
2,353 (4
Cash generated by investing
activities 11,327 21,484 14,
Financing activities
Increase in long-term loans -
4,898 19,
Long-term liabilities repaid (8,777) -
(5,5
Increase in short-term -
borrowings 3,909 11,
Cash (utilised)/generated by
financing activities (8,777) 8,807 25,
Movement in cash and cash
equivalents 1,817 8,912 1,
Cash and cash equivalents at (6,602)
beginning of period (8,090) (8,0
Cash and cash equivalents at end
of period (4,785) 822 (6,6
Review of results
The results of the group for the 6 months under review have been prepared in
accordance with South African statements of generally accepted Accounting
Practice and the group`s accounting policies and reflect a significant
improvement and a turnaround from the loss reported as at 30 September 2001.
The group incurred a loss attributable to ordinary shareholders of R1.4
million in the period under review compared to losses of R19.5 million for
the year ended 30 September 2001 and R5.1 million for the comparable six-
month period of the previous financial year. Operating income before
interest was positive and the interest burden was reduced to R2.4 million
for the period compared to R 9.3 million for the previous financial year.
The actions of the directors to reduce debt and contingent liabilities have
been very successful.
The comparative figures for 31 March 2001 have been restated to include the
"Benoni Lakeside Mall" property and its related liability and other prior
year adjustments. These are fully explained in the annual report for the
year ended 30 September 2001.
Investment property
The investment property known as the "Benoni Lakeside Mall" and its related
liability have been removed from the balance sheet of the group as a result
of the settlement agreement signed on 5 November 2001.
Going concern
The group`s cash position has improved considerably since 30 September 2001
and the directors are confident that the group overdrafts will be eliminated
by 30 September 2002. Interest bearing debt has reduced from R127 million at
30 September 2001 to R60 million at 31 March 2002 and is expected to reduce
further with consequent ongoing benefits to cash flow and profitability.
Contingent liabilities
Contingent liabilities have been reduced by the removal of the suretyship
for R50 million in favour of Standard Corporate and Merchant Bank by Quyn
Holdings Ltd for the "Benoni Lakeside Mall "development. The view of the
directors of Quyn Consulting relating to the unsubstantiated notice of
assessment received from SARS in respect of employees` taxation remains that
the company has minimal exposure. There has been no further development on
this issue.
Review of operations and Segmental Results
Operating income / (losses) have been incurred by the group`s divisions as
follows:
R 000`s Six Months Year ended
ended 31 30 September
March 2002 2001
Property division (415) (15 173)
Advisory services and human (154) 1 714
resource division
Holding company (402) (3 427)
Foreign Operations 11 (2 362)
(960) (19 248)
Property division
The property division produced an operating profit of R 2.6 million for the
6-month period and incurred a net interest charge of R 3.0 million.
The actions taken by the directors of this division during December 2001 and
January 2002 have had the desired effect in that the operating losses for
the previous two six month periods of R3.7 million to 31 March 2001 and R
11.5 million to 30 September 2001 have been reduced significantly with the
division incurring an operating loss of R415 000 for the six month period to
31 March 2002.
Operating costs have been reduced and the operations have been restructured
on a product basis rather than on a geographical basis which will result in
a better service to clients through cross-pollination of skills.
The loss for the six months under review was incurred after accounting for
abnormal retrenchment costs of approximately R 1.4 million. The orderly
disposal of investment properties not related to the core activities of the
group together with the removal of the Lakeside Mall property from the group
balance sheet has resulted in a reduction of R 70 million in interest
bearing debt from non-group sources. This process is scheduled to continue
over the next few months and the division will eliminate its overdraft
completely before 30 September 2002 with the resulting savings in interest
costs. High interest costs together with abnormal expenses and write-offs
relating to these properties were the main reasons for the losses incurred
in prior periods.
The cash inflows resulting from the realisation of property investments will
place Colliers in a position to completely remove the R 4.2 million
provision for onerous contracts raised in September 2001, thereby further
strengthening the balance sheet and reserves of the company. Negotiations in
this regard are currently underway and are expected to be finalised before
September 2002.
The property division has been rebranded as Colliers International in line
with the international practice being adopted by Colliers operations
worldwide. With this and the rejuvenated service orientation of Colliers,
the directors are confident that sustainable earnings growth will be
achieved in the future.
Advisory services and human resource divisions
It is the intention of the group to merge the operations of the Advisory and
Human Resource divisions into an Outsource division to maximize cross-
selling opportunities and service a wider base of quality clients. The
combined divisions reported a small operational loss for the period but have
turned around and are now operating profitably.
Foreign operations
The Mozambique operations were profitable in the period under review due to
a strengthening in the local currency however the business requires further
attention from management to achieve sustained profitability. The Zambian
operation produced a loss in the period but is building up its client base.
Neither operation required further cash support from the holding company
during the period.
Repurchase of shares
A circular to shareholders will be issued shortly requesting approval for
the repurchase of 10 090 308 ordinary shares from former directors of the
company.
Disposal of 50% of Colliers` property and facilities management business.
The accounts for the period under review include all assets, liabilities and
earnings of Colliers` property and facilities management business. In terms
of the agreement signed with a broad based black empowerment consortium for
the sale of 50% of Colliers` property and facilities management business
guarantees for R9 million should have been lodged by the purchasers. These
guarantees, not withstanding full adherence to the terms of the agreement by
Colliers, have not been forthcoming and accordingly the directors have
deemed it prudent to exclude from the results for the period any effect that
the agreement might have on the results of the group.
Circular to shareholders and cautionary announcement
Shareholders are referred to the announcement, dated 15 February 2002, in
which reference was made to a circular to be posted within 28 days of such
announcement. Shareholders are now advised that delays in effecting the
disposal of 50% of Colliers` property and facilities management business
(owing to the guarantees, referred to above, not yet having been furnished)
have resulted in a corresponding delay in despatching the aforementioned
circular. Shareholders are therefore advised to exercise caution when
dealing in their Quyn shares.
Notwithstanding the delays referred to above, the repurchase of shares will
be effected and a related circular will be despatched in due course.
Dividend declaration
No dividend has been declared nor is recommended in respect of the period
under review.
For and behalf of the board
RP Fertig
Chief executive officer
29 May 2002
Directors
RP Fertig (Chairman and CEO), JN Alcock, JA Holland, V Schroeder, JS Wilson
(Non-executive). WP Alcock (Alternate director)
Registered office
36 Fricker Road, Illovo, Sandton
Transfer secretaries
Computershare Services Limited
Edura House, 41 Fox
Street, Johannesburg.
Sponsor
KPMG Services (Pty) Limited
Date: 30/05/2002 07:30:00 AM Produced by the SENS Department
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