| Thu 25 Jul 2002, 0:00 | | Spectrum Shipping Limited - Interim Results |
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INTERIM RESULTS
for the six months ended 30 June 2002
INCOME STATEMENT 30 June 30 June 31 Dec
2002 2001 2001
R`000 R`000 R`000
Turnover 13 315 196 255
Gross billings 288 939 196 255
Gross disbursements (275 624) - -
Operating income 5 705 (363) (943)
Gain on compromise settlement - 6 566 6 566
Negative goodwill 169 - -
Depreciation (165) - -
Net interest paid (1 246) - -
Profit before taxation 4 463 6 203 5 623
Share of profit of Spectrum
Shipping Company (Pty) Limited - - 1 762
Taxation (1 159) (1 861) (2 215)
Net profit after taxation 3 304 4 342 5 170
Shares in issue (000`s) 850 000 150 000 450 000
Earnings per share (cents) 0,39 2,89 1,15
Headline earnings per share (cents) 0,37 (0,17) 0,14
Reconciliation between earnings
and headline earnings
Profit after taxation 3 304 4 342 5 170
S311 compromise offer with creditors - (6 566) (6 566)
Loss on sale of fixed assets - - 106
Negative goodwill (169) - -
Taxation effects - 1 971 1 938
Headline (loss)/profit after taxation 3 135 (253) 648
BALANCE SHEET 30 June 30 June 31 Dec
2002 2001 2001
R`000 R`000 R`000
ASSETS
Non-current assets 7 206 7 319 6 334
Property, plant and equipment 984 427 -
Investments 607 3 -
Negative goodwill (843) - -
Employee share trust - 10 10
Deferred taxation 6 458 6 879 6 324
Current assets 89 964 422 2 146
Cash and investments - 350 9
Inventory - 51 -
Trade and other receivables 89 964 21 2 137
Total assets 97 170 7 741 8 480
EQUITY AND LIABILITIES
Capital and reserves 23 478 6 449 7 744
Share capital and premium 106 152 93 722 93 722
Retained income (82 674) (87 273) (85 978)
Liabilities
Long-term loans
Long-term portion 83 - 415
Taxation 1 193 - -
Trade and other payables 58 452 1 292 321
Bank overdraft and short-term loans 13 964 - -
Total equity and liabilities 97 170 7 741 8 480
CASH FLOW STATEMENT 30 June 30 June 31 Dec
2002 2001 2001
R`000 R`000 R`000
Cash generated from operations
before working capital changes 5 410 (11) (630)
Changes in working capital (7 551) - -
Cash generated from
operating activities (2 141) (11) (630)
Interest paid (1 246) - -
Net cash flow from operating
activities (3 387) (11) (630)
Cash flow from investing activities (22 615) - 263
Cash flow from financing activities 12 029 - 344
Net increase/(decrease) in cash
and cash equivalents (13 973) (11) (23)
Balances of subsidiaries acquired (10 504) - -
Current period movement (3 469) (11) (23)
STATEMENT OF Share Share Retained
CHANGES IN EQUITY capital premium earnings Total
Balance at 1 January 2002 150 93 572 (85 977) 7 744
Issue of shares due to
purchase of subsidiaries 700 11 730 - 12 430
Net profit for the period - - 3 304 3 304
Balance at 30 June 2002 850 105 302 (82 673) 23 478
COMMENTS
The board of Spectrum Shipping Limited is pleased to announce the inaugural
maiden results for the six-month period ended 30 June 2002. Spectrum Shipping,
with offices in Durban, Cape Town, Port Elizabeth and Johannesburg, is an
established clearing and forwarding service provider to local exporters and
importers. It is an independent operator with a formidable track record and
diversified client base. Keeping to its core services, Spectrum Shipping
outsources its warehousing and transport services requirement.
Significant barriers to entry in the clearing and forwarding market exist that
shield Spectrum Shipping`s position as a medium-sized non-aligned player. These
include the need for substantial working capital for the funding of
disbursements; proper information systems; proper communication systems to
customs and intellectual capital where the skills and expertise base required is
industry-specific.
ACQUISITIONS
Spectrum reverse listed on the JSE utilising the Micrologix Limited vehicle.
Shareholder approval for the transaction was given on 19 March 2002 with the
effective date being 1 July 2001. Spectrum then announced on 9 April 2002 the
acquisition of the business of CSS Logistics (Pty) Limited as a going concern
effective from 1 January 2002.
The current results reflect the trading activities of Spectrum Shipping Company
(Pty) Limited and CSS Logistics (Pty) Limited. The merger of the two businesses
and cultures of Spectrum Shipping Company and CSS Logistics has proceeded well.
Both operations now trade as Spectrum Shipping Limited with all customers and
suppliers having been included in the change process.
FINANCIAL AND OPERATIONAL REVIEW
The interim result of R3,3 million after tax represents a pleasing performance.
The trading environment has been assisted by good grape exports, increased wine
exports, increased use of duty credit certificates for textile imports,
additional working capital funding and a focused marketing drive. The marketing
has been assisted by the profile created through Spectrum Shipping being
publicly quoted. Taxation (deferred) has been provided for at 30%. Return on
equity is pleasing at 32%. The headline earnings per share at 0,37 cents
represent a turnaround from the prior year loss of 0,17 cents. The prior year
results are, however, not comparable. The cash flow statement reflects the net
assets of subsidiaries acquired as part of the R22,6 million from investing
activities. The movement in cash for the year of R13,9 million includes
subsidiary overdrafts acquired of R10,5 million. The current period cash
utilisation is therefore R3,4 million, which was used to fund growth.
PROSPECTS
The devaluation of the Rand assists results by increasing the Rand value of both
in and outbound trade. Wine exports are showing good growth and are expected to
continue. Textile imports could also increase with a further decrease in textile
duties by at least 5%. The local content initiatives in the motor industry have
seen this industry grow which presents opportunities. Earnings are reasonably
evenly balanced with the first and second six-month periods being evenly
weighted. The accreditation of clearing and forwarding agents by SARS could see
the consolidation of the industry with smaller firms losing out on service
levels. Great scope exists to further develop the forwarding opportunities that
exist in the industry.
Further expansion opportunities include broadening of the geographical exposure
to the lucrative Johannesburg market. This will enable Spectrum to leverage the
growth in its volume of shipments and its existing relationships with vessel
owners and road transporters, as well as to facilitate in the negotiation of
transport and freight rates on behalf of customers.
ACCOUNTING POLICIES
The accounts has been prepared in conformity with South African Statements of
Generally Accepted Accounting Practice and on a basis consistent with the prior
years.
DIVIDENDS
In line with the company`s policy, no interim dividend has been declared.
For and on behalf of the board
T Tomaszewski ML Dollan
Chief Executive Officer Company Secretary
26 July 2002
REGISTERED OFFICE AND POSTAL ADDRESS
Building 1, Gleneagles Park, 10 Flanders Drive, Mount Edgecombe
(PO Box 47643, Greyville 4023)
TRANSFER SECRETARIES
Computershare Investor Services Limited
11 Diagonal Street, Johannesburg 2001
Tel: (011) 370-5000
Directors: T Tomaszewski (CEO), DC Kelly (CFO), R Singh, MR Walwyn,
JP Nel*, KJ Gribnitz*, AAG Nairn* *Non-executive
Date: 25/07/2002 01:12:50 PM Produced by the JSE SENS Department
