| Thu 11 Jul 2002, 0:00 | | ACUITY GROUP HOLDINGS LIMITED: ABRIDGED AUDITED FI |
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ACUITY GROUP HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/011074/06)
JSE Share code ACY ISIN ZAE000018149
("Acuity" or "the company" or "the group")
ABRIDGED AUDITED FINANCIAL STATEMENTS
for the 15 months ended 31 March 2002
ABRIDGED AUDITED INCOME STATEMENTS
Group for the Group for the
15 months to 12 months to
31 March 31 December
2002 2000
R'000 R'000
Revenue 8 226 33 966
Operating costs (14 640) (34 953)
Operating loss (6 414) (987)
Restructuring costs (18 137) -
Loss after restructuring costs (24 551) (987)
Net interest received/(paid) (174) 1 161
Net profit/(loss) before exceptional items (24 725) 174
Exceptional items - (310)
Net profit/(loss) before taxation (24 725) (136)
Taxation (133) (155)
Net loss after taxation (24 858) (291)
Equity accounted income from associate - 20
Net loss for the period (24 858) (271)
Loss per share (cents) (22,4) (0,3)
Headline earnings/(loss) per share (cents) (5,5) 0,7
Weighted average number of shares
in issue ('000) 111 000 102 260
Reconciliation between loss and
headline loss
Net loss (24 858) (271)
Amortisation of intangible assets 614 712
Intangible assets written-off 7 977 -
Loans written-off 6 356 -
Loss on subsidiaries 3 804 -
Loss on sale of fixed assets 2 -
Exceptional item - 310
Headline earnings/(loss) (6 105) 751
ABRIDGED AUDITED STATEMENTS OF CHANGES IN EQUITY
Group for the 15 months to 31 March 2002
Non-
Share Share distributable
capital Premium Reserve
R'000 R'000 R'000
Balance at
1 January 2000 933 481 7 743
Issue of share capital 218 4 796 -
Share buy back (14) - -
Share issue expenses written-off - (230) -
Settlement of vendor liabilities - - -
Gains on cancellation of
acquisitions and settlement of
vendor liabilities - - 6 774
Net loss for the period - - -
Balance at 1 January 2001 1 137 5 047 14 517
Net loss for the period - - -
Share buy back (54) - -
Balance at 31 March 2002 1 083 5 047 14 517
Accu- Shares
mulated due to
profit vendors Total
R'000 R'000 R'000
Balance at
1 January 2000 4 228 11 176 24 561
Issue of share capital - - 5 014
Share buy back - - (14)
Share issue expenses written-off - - (230)
Settlement of vendor liabilities - (11 176) (11 176)
Gains on cancellation of
acquisitions and settlement of
vendor liabilities - - 6 774
Net loss for the period (271) - (271)
Balance at 1 January 2001 3 957 - 24 658
Net loss for the period (24 858) - (24 858)
Share buy back (54) - - (54)
Balance at 31 March 2002 (20 901) - (254)
ABRIDGED AUDITED BALANCE SHEETS
Group as at Group as at
31 March 31 December
2002 2000
R'000 R'000
ASSETS
Non-current assets 404 21 500
Fixed assets 385 1 408
Intangible assets - 19 402
Deferred taxation - 187
Investment in subsidiaries 19 503
Current assets 4 530 30 552
Accounts receivable 4 424 23 542
Taxation 100 -
Cash and cash equivalents 6 7 010
Total assets 4 934 52 052
EQUITY AND LIABILITIES
Capital and reserves (254) 24 658
Share capital 6 130 6 184
Non-distributable reserve 14 517 14 517
Accumulated profits/(losses) (20 901) 3 957
Non-current liabilities 1 688 5 982
Interest bearing liabilities and loans 169 79
Amounts due to group companies 1 269 -
Amounts due to vendors 250 5 903
Current liabilities 3 500 21 412
Accounts payable and provisions 3 444 20 283
Taxation - 1 129
Bank overdraft 56 -
Total equity and liabilities 4 934 52 052
Net asset value per share (cents) (0,2) 21,7
Tangible net asset value per share (cents) (0,2) 4,6
Number of issued shares at period-end ('000) 108 315 113 685
ABRIDGED AUDITED CASH FLOW STATEMENT
Group for the Group for the
15 months to 12 months to
31 March 31 December
2002 2000
R'000 R'000
Cash flows from operating activities (2 959) 5 161
Cash receipts from customers 6 960 24 955
Cash paid to suppliers and employees (9 374) (19 648)
Net interest received/(paid) (174) 1 161
Taxation paid (371) (1 307)
Cash flows from investing activities (317) (8 308)
Furniture, fittings and equipment
acquired (net) (298) (1 018)
Shares repurchased - (14)
Acquisitions and advances (19) (7 276)
Cash flow from financing activities (3 789) (767)
Capital raised/(repurchased) - (230)
Loans raised/(repaid) (3 789) (537)
Increase/(Decrease) in cash and
cash equivalents (7 065) (3 914)
Cash and cash equivalents at the
beginning of the year 7 010 10 924
Cash and cash equivalents at the end
of the year (55) 7 010
COMMENTARY
COMMENT BY THE BOARD OF DIRECTORS
Review of operations and restructuring activities
Acuity Group Holdings Limited is an investment management and holding company
and is listed in the "Support Services" sector of the JSE Securities Exchange
South Africa. At the end of 1999, the then-management of Acuity initiated a
complete restructuring of the group. The restructure included the opening of new
divisions and the acquisition of what was regarded as complementary operations.
However, it proved unsuccessful and resulted in many of the group operations
realising heavy losses.
As reported in an announcement dated 18 March 2002 on SENS and in the
financial press, corporate restructuring specialists, Gandalf Trust took over
control of the company on 16 March 2002 and completely reconstructed the board
of directors. The announcement directly addressed the fact that the company was
experiencing "severe financial problems", as was evidenced by the four largest
shareholders agreeing to sell the majority of their shares at 0,001 cents per
share. It was also expressly stated in the announcement that "in certain
instances it may be necessary to seek Section 311 compromise agreements with
creditors while, in other instances, alternative action might be more
appropriate".
Since the new board of directors took control of the company, it has been
investigating the ongoing viability of the intermediary holding companies and
operating subsidiaries in the group. This culminated in a complete scaling down
of the "head-office" function and the decision by the members that the following
subsidiaries are to be either liquidated or compromised: Acuity Investments
(Pty) Ltd, Acuity Media Africa (Pty) Ltd, Acuity Knowledge Management
Consultants (Pty) Ltd, Acuity Alpha (Pty) Ltd, Acuity Value Management (Pty)
Ltd, Jagly Intermedia (Pty) Ltd and Massive Management (Pty) Ltd. An application
for voluntary liquidation has already been brought against Acuity Value
Management (Pty) Ltd. Continuing operations are mainly focused on specialised
"below-the-line" advertising activities, which are expected to be cash-
generative.
Financial treatment of the restructuring
Due to the insolvent financial position of the above companies, the board
decided not to consolidate these subsidiaries in terms of the group financial
statements. This was done on the grounds that it would be misleading and that it
would entail expense or delay out of proportion to the value to members of the
company. In accordance with Section 291 of the Companies Act, approval for this
course of action has been obtained from the Registrar of Companies. The
liquidation of the subsidiaries will not result in the creation of any
contingent liabilities for Acuity.
Consistent with the directors' conservative approach to dealing with the
restructuring, it was decided to write off all goodwill, trademarks and other
intangible assets remaining in the group companies, as well as inter-company
loans in cases where these were considered irrecoverable. The combination of
amortisation of intangible assets, the writing-off of intangible assets,
investments and loans, as well as losses provided for on subsidiaries, explains
the difference between the group's attributable loss of 22,4 cents per share
("cps") and its headline loss of 5,5 cps.
Ongoing restructuring
The restructuring of the group continues as further information comes to
light. The board expects the process to be completed within approximately six to
nine months. Although it is still reasonably early days, we have already begun
the process of considering new opportunities for Acuity and are confident that
we will be able to successfully refocus the business and unlock value for
shareholders. Shareholders, though, should be under no disillusionment as to the
extent of the financial problems of a majority of the existing businesses. We
regard the fact that the share price has maintained a stable trading range since
the take-over by Gandalf Trust in mid-March as a vote of confidence that the new
board will succeed in delivering value to shareholders.
Share capital and dividend
During the year, 5 370 000 ordinary shares were repurchased at par value in
terms of a specific authority granted by shareholders at the annual general
meeting held on 23 July 2001. No dividends are declared or recommended.
Audit opinion
Compendium Incorporated, the company's auditors, have issued an unqualified
audit opinion on the group. The audit report is available for inspection at the
company's registered address.
Accounting policies
The Annual Financial Statements were prepared in accordance with Generally
Accepted Accounting Practice. The accounting policies are consistent with those
used during the previous financial period.
For and on behalf of the board
K J Gribnitz M Botha
Director Company Secretary
Pretoria
10 June 2002
Corporate Advisor Sponsor
Gandalf Trust LPC Manhattan
Transfer secretaries Registered address
Computershare Mirkwood Estate
Services Ltd Klipkop - JR 396
Gauteng
Date: 11/07/2002 05:02:00 PM Produced by the JSE SENS Department
