| Wed 24 Jul 2002, 0:00 | | Explorer Corporation Holdings Limited - Financial |
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Explorer Corporation Holdings Limited - Financial Report
(Incorporated in the Republic of South Africa)
(Registration number 1997/010950/06)
Share code: EPL ISIN: ZAE000039970
("Explorer" or "the company")
Interim results for the six months ended 30 June 2002
* Earnings per share and net asset value per share increased by more than 100%
year on year
INCOME STATEMENT
Unaudited for Unaudited for Audited for
6 months ended 6 months ended the year ended
30 June 2002 30 June 2001 31 Dec 2001
R`000 R`000 R`000
Revenue 15,958 900 2,219
Abnormal profit - - 5,230
Operating expenses
and cost of financing (2,592) (3,126) (14,641)
Profit/(Loss) before finance
costs and depreciation 13,366 (2,226) (7,192)
Finance costs (5,311) (12) (33)
Depreciation and amortisation (3,814) (344) (673)
Profit/(Loss) before taxation 4,241 (2,582) (7,898)
Taxation (1,578) - -
Net profit/(loss) for period 2,663 (2,582) (7,898)
Earnings per share (cents) 1,03 (2,93) (4,9)
Headline earnings per share (cents) 2,09 (2,80) (3,2)
Reconciliation of headline earnings/(loss):
Headline earnings/(loss) per share has
been calculated in terms of AC306
Attributable earnings for period 2,663 (2,582) (7,898)
Adjusted for:
- Goodwill amortisation 2,720 120 240
- Impairment provision - - 2,492
- Write-down Share Incentive Trust - - 1
Headline earnings/(loss) 5,383 (2,462) (5,165)
BALANCE SHEET
Unaudited for Unaudited for Audited for
6 months ended 6 months ended the year ended
30 June 2002 30 June 2001 31 Dec 2001
R`000 R`000 R`000
Assets
Property, plant and equipment 5,031 940 629
Loans 366 99 2
Intangibles 9,277 13,899 9,736
Goodwill on acquisition 49,400 - -
Current assets 158,392 3,748 2,351
Total assets 222,466 18,686 12,718
Equity and liabilities
Shareholders funds
- Share capital and premium 51,770 47,222 52,222
- Retained earnings (37,501) (35,118) (40,434)
Non-current liabilities
- Long-term loans 28 - -
- Deferred tax 7,790 - -
Current liabilities 125,304 6,582 930
Convertible purchase consideration 75,075 - -
Total equity and liabilities 222,466 18,686 12,718
Weighted average number of
shares (000) 258,000 88,000 161,699
Shares in issue (000) 258,000 88,000 258,000
Net asset value per share (cents) 34,63 13,75 4,57
Net tangible asset value
per share (cents) 11,88 (2,04) 0,79
CASH FLOW STATEMENT
Unaudited for Unaudited for Audited for
6 months ended 6 months ended the year ended
30 June 2001 30 June 2000 31 Dec 2001
R`000 R`000 R`000
Cash flow from
operating activities 44,151 760 (3,883)
Cash flow from
investing activities (54,908) 304 298
Cash flow from
financing activities (425) 11 4,749
Net movement in cash and
cash equivalents for period (11,182) 1,075 1,164
Cash and cash equivalents
at beginning of period 2,339 1,175 1,175
Cash and cash equivalents
at end of period (8,843) 2,250 2,339
STATEMENT OF CHANGES IN EQUITY
Foreign
trans- Accumu-
Share Share lation lated
capital premium reserve loss Total
R`000 R`000 R`000 R`000 R`000
Balance at 1 January 2000 800 46,022 - (2,625) 44,197
Net loss for period - - - (29,911) (29,911)
Issue of share capital 80 320 - - 400
Share issue expense - 1 - - 1
Balance at 31 December 2000 880 46,343 - (32,536) 14,687
Net loss for period - - - (2,582) (2,582)
Balance at 20 June 2001 880 46,343 - (35,118) 12,105
Net loss for period - - - (5,316) (5,316)
Issue of share capital 1,700 3,300 - - 5,000
Balance at 31 December 2001 2,580 49,643 - (40,434) 11,789
Net profit for period - - - 2,663 2,663
Foreign translation reserve - - 270 - 270
Share issue expense - (453) - - (453)
Balance at 30 June 2002 2,580 49,190 270 (37,501) 14,269
COMMENTS
FINANCIAL REVIEW
We are pleased to report a consolidated profit after tax of R2 663 420 for the
six months ended 30 June 2002.
Explorer is a substantially transformed group as a result of the acquisition of
Industrial Credit Company Ltd. ("ICC"), Zambia`s leading provider of lease
finance, with effect from the beginning of the year. This acquisition is
discussed in more detail below.
As a result of this acquisition, net asset value per share increased by 152% to
34,63 cents and net tangible asset value per share rose to 11,88 cents from a
negative 2,04 cents. These values are calculated taking into account the
purchase price paid for ICC with related goodwill on acquisition eliminated
where appropriate.
BASIS OF ACCOUNTING
These consolidated, abridged interim financial statements were drawn up in
compliance with South African Statements of Generally Accepted Accounting
Practices and the company has complied with the requirements of the Companies
Act.
ACCOUNTING POLICIES
The accounting policies as set out in the 2001 Annual Report, except for the
application of AC 112, AC 419 and AC 430, which have been applied for the first
time in the current year in consolidating the foreign entity ("ICC") acquired
during the interim period, have been consistently applied in producing these
results.
CURRENT ACHIEVEMENTS
During the six-month trading period ended 30 June 2002, Explorer has been
restored to profitability after being recapitalised and restructured into an
African financial services group. This follows the conclusion of an agreement
with Mauritius Commercial Bank and Explorer`s major shareholder Loita Capital
Partners International Limited ("Loita"), and the acquisition of ICC.
Mauritius Commercial Bank ("MCB")
MCB is the largest bank in Mauritius and one of the oldest banks operating on
the African continent. The bank was incorporated in Mauritius in 1841 and has
shown consistent growth since inception.
MCB now operates in several countries including France, Reunion, Seychelles,
Madagascar and Mozambique. It has expanded its operations to include MCB Private
Banking, MCB Stockbroking, MCB Registry and Securities and MCB Investment
Management. MCB`s total assets at 31 December 2001 amounted to US$ 2.5 billion.
The agreement with MCB enables Explorer to market credit cards and related
products to clients of banks on the African continent. This represents a major
opportunity for Explorer, given the demand for such products in Africa.
Under an innovative sponsoring arrangement concluded between Explorer, Loita and
MCB, MasterCard and Visa endorsed products can now be issued by banks whose
budgets and infrastructure precluded them from obtaining the required licenses.
Industrial Credit Company Limited ("ICC")
On 15 May 2002 it was announced that Explorer had, subject to certain
conditions, acquired the entire share capital of ICC from Loita, including
Loita`s claims against ICC. The purchase consideration of R75 075 000 will be
settled by the issue of 85 800 000 consolidated shares at a price of 87,5 cents
per share.
In order to give effect to the acquisition, it was necessary to increase the
authorised share capital of Explorer. The directors also proposed a one-for-ten
consolidation of the authorised and issued share capital of Explorer.
ICC is Zambia`s leading provider of lease finance and has been in operation for
over 37 years, never once reporting a loss. This success has been attributed to
ICC`s well-established reputation and corporate branding in Zambia`s banking and
financial services market, a management team of unrivalled experience and a pro-
active and innovative approach to winning and maintaining business.
Some 89% of ICC`s lease book is denominated in US dollars and its major clients
comprise mainly multi-nationals and well-established local corporations,
including reputable exporters. The lease facilities are primarily for the
acquisition of commercial and passenger vehicles and plant, machinery and
equipment.
This transaction furnishes Explorer with the necessary critical mass needed to
expand its presence in the financial services industry while providing an
appropriate platform for accessing new markets on the African continent, which
will create value for Explorer`s shareholders.
The acquisition will also further ICC`s own regional expansion ambitions through
an enhanced profile and ability to raise capital as part of a JSE-listed niche
financial services group. Explorer`s management team, together with ICC, plans
to replicate ICC`s proven Zambian leasing formula in other regional markets,
leveraging Loita`s network and expertise in Africa.
The business model in each territory is to achieve rapid and profitable growth
in new leasing business off a relatively low cost base.
PROSPECTS
Explorer has changed its strategic intent by modifying its business model for
card related products in South Africa to attract high volume, fixed margin
transactions. This will be done in conjunction a major local bank. The group has
also concluded agreements in the normal course of business to provide it with
access to databases of potential card clients.
It is the vision of both Explorer and Loita that Explorer will become the
investment holding company for Loita`s African financial services assets.
It is also intended that Explorer will acquire additional businesses to enable
it to grow further on the African continent.
It is anticipated that application will be made to the JSE, in due course, to
transfer the listing of Explorer from the Venture Capital Market to the
Financial Services sector of the main board.
ANNUAL GENERAL MEETING
The Annual General Meeting of the company for the year ended 31 December 2001,
at which all resolutions were approved and passed, took place during the six
months under review.
GENERAL MEETING
All resolutions to approve the recapitalisation of the company and the
acquisition of ICC were unanimously passed by the shareholders at the General
Meeting held on 28 June 2002.
The special resolutions were registered by the Registrar of Companies on 1 July
2002 and the authorised share capital was accordingly increased and authorised
and issued share capital consolidated into ordinary shares of 10c (ten cents)
each.
DIVIDENDS
The present policy of the company is not to declare or distribute dividends, as
all profits are retained and utilised to fund further growth and expansion.
For and on behalf of the Board
N. Justin Chinyanta C. M. Van Nieuwkerk
Chairman Executive director
24 July 2002
Registered office: Transfer secretaries:
C/o Loita Capital Partners SA Limited Computershare Investor Services
Limited
2nd Floor, East Wing 7th Floor, 11 Diagonal Street
11 Alice Lane JOHANNESBURG
SANDTON 2001
2146
www.explorercorp.com
Explorer direct: 0860 300 600
Directors: N J Chinyanta, Y Bazian, C Van Nieuwkerk,
C Clarke (Non-executive)
Date: 24/07/2002 04:41:22 PM Produced by the JSE SENS Department
