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INS
Insure - Audited Results for the Year Ended 28 February 2002
INSURANCE OUTSOURCING MANAGERS HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013121/06)
JSE Share code: INS ISIN: ZAE000033221
("INSURE" or "the Group")
AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2002
The audited results for the years ended 28 February 2002 and 2001
are presented below. The results for both periods have been restated
to reflect the effects of the discontinued operations.
Consolidated income statement
Audited Audited
for the for the
year ended year ended
28 February 28 February
R'000 2002 2001
Gross collections 525 961 371 180
Revenue 32 374 31 606
Operating income before
amortisation and taxation
Ongoing operations 4 356 9 969
Discontinued operations (1 089) (669)
Net interest paid (4 618) (4 115)
Net (loss)/income before amortisation (1 351) 5 185
Amortisation of goodwill
and intangibles (1 136) (969)
Exceptional items (6 640) -
Net (loss)/income before taxation (9 127) 4 216
Taxation provision (33) (1 643)
Net (loss)/income after taxation (9 160) 2 573
Outside shareholders' interest (460) (477)
Attributable (loss)/income
retained for the period (9 620) 2 096
Determination of headline
(loss)/earnings
Attributable (loss)/income (9 620) 2 096
Add back: Amortisation of
goodwill and intangibles 8 190 969
Deduct: Outside shareholders'
share of amortisation (239) (86)
Profit on disposal of assets (43) (24)
Headline (loss)/earnings (1 712) 2 955
Effect of compliance with new
Generally Accepted
Accounting Practice
Add back: Normal Taxation
credited to deferred
taxation asset - 440
Comparable headline
(loss)/earnings (1 712) 3 395
Earnings per share
Shares in issue (000's) 111 092 111 092
Fully diluted shares in
issue (000's) 122 201 122 201
(Loss)/earnings per share (cents) (8,7) 1,9
Headline (loss)/earnings
per share (cents) (1,5) 3,1
Fully diluted (loss)/earnings
per share (cents) (7,9) 1,7
Fully diluted headline
(loss)/earnings per share (cents) (1,4) 2,8
Segmental Analysis
A segmental analysis for the years ended 28 February 2002 and 2001 is set
out below.
Audited Audited
12 Months 12 Months
28 February 28 February
R'000 % 2002 % 2001
Revenue
Finance charges earned 31 9 969 49 15 487
Commissions 49 15 954 40 12 642
Service fees 20 6 451 11 3 477
Revenue as reported 100 32 374 100 31 606
Consolidated balance sheet
Audited Audited
28 February 28 February
R'000 2002 2001
ASSETS
Non-current assets 17 485 36 292
Property, plant and equipment 14 448 12 966
Intangible assets - 21 317
Deferred taxation 3 037 2 009
Current assets 66 422 93 865
Accounts receivable 70 387 98 819
Less unearned finance charges (3 965) (6 073)
Cash resources - 1 119
Total assets 83 907 130 157
EQUITY AND LIABILITIES
Capital and reserves 15 664 25 284
Issued capital 53 654 53 654
Non-distributable reserves 2 848 1 423
Distributable reserves (40 838) (29 793)
Outside shareholders' interest - (657)
Non-current liabilities 899 1 654
Long-term liabilities 899 1 654
Current liabilities 67 344 103 876
Accounts payable 58 829 56 120
Loans payable - 11 298
Taxation 268 546
Current portion of long-term
liabilities - 67
Bank overdrafts 8 247 35 845
Total equity and liabilities 83 907 130 157
Net asset value per share (cents) 14,1 22,8
Fully diluted net asset value
per share (cents) 12,8 20,8
Consolidated cash flow statement
Audited Audited
12 Months 12 Months
28 February 28 February
R'000 2002 2001
Cash flow generated by/
(used in) operating activities 38 188 (30 957)
Cash flow used in investing activities (6 180) (34 888)
Cash flow (used in)/generated
by financing activities (5 529) 31 148
Cash inflow/(outflow) for the year 26 479 (34 697)
Cash and cash equivalents
- beginning of year (34 726) (29)
Cash and cash equivalents
- end of year (8 247) (34 726)
Consolidated statement of changes in equity
Non-
Share Share Accumulated distributable
R'000 capital premium loss reserve Total
Balance
at 1 March 2001 11 53 643 (29 793) 1 423 25 284
Loss for the
12-month period
Ongoing operations - - (9 956) 1 425 (8 531)
Discontinued operations - - (1 089) - (1 089)
Balance
at 28 February 2002 11 53 643 (40 838) 2 848 15 664
Accounting policies
The principal accounting policies are consistent with those outlined in
the 2001 Annual Report and have been applied throughout the year under
review. The Annual Financial Statements have been prepared in accordance
with South African Statements of Generally Accepted Accounting Practice.
COMMENTS
Overview
INSURE is continuing its strategy of becoming the preferred independent
outsource financial services provider to the short-term insurance industry.
The termination of loss-making operations and increasing focus on its core
objectives, niche services and operations, have resulted in gross
collections growth of 42%. INSURE is fast becoming recognised as a leader in
short-term insurance premium collections.
Revenue increased by 3% compared to the same period in the previous year.
As reported in our interim release, this was as a result of significantly
reduced banking facilities, adversely affecting INSURE'S financing services.
During the year, INSURE's primary bankers followed a strategic decision to
cease trading in the Republic of South Africa, resulting in restricted
funding and consequential unfavourable trading results for the Group. New
banking facilities could only be secured late in the trading year. INSURE
remains optimistic that lost opportunities will be recovered and the Group
will return to profitability.
In the year under review, INSURE secured major outsource contracts.
Substantial investments in infrastructure and human capital have now been
concluded, enabling considerable capacity to manage the organic growth
experienced during the year. These initiatives provide a foundation for
further efficiencies, improved service levels and ultimately the potential
of procuring more "blue-chip" contracts.
The Group has identified certain under-performing investments that are in
the process of divestment. During this process the Board reviewed all assets
and the methods of measurement, and concluded that goodwill and intangibles
were significantly impaired, with no acceptable method for determining its
current worth. The full outstanding value was therefore written-off in the
current period.
Prospects
INSURE's focus remains on growing organically and to capitalise on its
excess capacity. With its new working capital facilities and investment in
infrastructure, the Board anticipates a continuation of growth and a return
to profitability in all core areas of the business.
Share dilution information
The full effect of the INSURE Share Incentive Scheme dilution has been
reflected in the earnings per share calculation.
Dividend
A dividend will not be declared for the year.
For and on behalf of the board
B B Dunn D M Burns
Chairman Managing Director
31 May 2002
Directors:
B B Dunn (Chairman), D M Burns (Managing),
C J P Cilliers CA (SA) (Financial), D G Eriksson CA (SA)*, A J Dunn*,
K J Gribnitz* (Alternate: J P Nel) (*non-executive)
Secretary and registered office:
Mr J Vogelzang,
6 St Giles Street, Randburg, 2125.
Transfer secretaries:
Computershare Investor Services Limited,
11 Diagonal Street, Johannesburg, PO Box 1053, Johannesburg 2000.
Postal address and E-mail:
PO Box 2867, Randburg, 2125
and "results2002@ioh.co.za"
Sponsors
LPC Manhattan Sponsors (Pty) Ltd Radagast Capital
(Registration number 1999/024792/07)
Date: 31/05/2002 07:15:00 AM Produced by the SENS Department
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