| Thu 25 Jul 2002, 0:00 | | African Media Entertainment Limited - Interim Resu |
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African Media Entertainment Limited - Interim results for the six months ended
30 April 2002
African Media Entertainment Limited
(Incorporated in the Republic of South Africa)
(Registration number 1926/008797/06)
("AME" or "the group")
Interim results for the six months ended 30 April 2002
Abridged group income statement
Unaudited Audited
Six months ended Year ended
30 Apr 30 Apr 31 Oct
2002 2001 2001
R`000 R`000 R`000
Revenue 74 426 122 603 209 999
Continuing operations 71 381 119 617 200 230
Discontinued operations 3 045 2 986 9 769
Operating (loss)/profit before exceptional
items (12 905) 1 970 4 955
Continuing operations (11 745) 3 724 11 909
Discontinued operations (1 160) (1 754) (6 954)
Exceptional items (373) 1 377 601
Operating (loss)/profit (13 278) 3 347 5 556
Net interest paid (2 469) (3 492) (7 273)
Loss before taxation (15 747) (145) (1 717)
Taxation (1 796) 1 207 5 241
(Loss)/profit after taxation (17 543) 1 062 3 524
Outside shareholders` interest 1 074 (1 676) (3 306)
(Loss)/profit attributable to ordinary
shareholders (16 469) (614) 218
(Loss)/earnings per share (cents) (2,11) (0,08) 0,03
Headline (loss)/earnings per share for
continuing operations (cents) (1,77) 0,11 1,1
Number of shares in issue (000`s) 779 524 779 524 779 524
Headline (loss)/earnings reconciliation
continuing operations
(Loss)/profit attributable to shareholders (16 469) (614) 218
Exceptional items 373 (1 377) (601)
(Surplus)/deficit on disposal of business 4 123 (3 123) (3 487)
Restructuring and reorganisational costs - 1 746 2 886
Reversal of vendor liabilities (3 750) - -
Discontinued operations 1 160 1 754 6 954
Amortisation of goodwill 1 127 1 133 2 254
Headline (loss)/earnings for continuing
operations (13 809) 896 8 825
Abridged group balance sheet
Unaudited Audited
30 Apr 30 Apr 31 Oct
2002 2001 2001
R`000 R`000 R`000
Assets
Non-current assets 68 224 71 200 72 524
Equipment and production facilities 10 621 14 180 11 598
Investments and loans 5 820 7 920 7 920
Share Incentive Trust 1 879 1 874 1 879
Trademarks and goodwill 39 437 40 818 40 564
Deferred taxation 10 467 6 408 10 563
Current assets 27 642 63 779 43 101
Inventories 3 227 9 008 10 853
Trade and other receivables 24 415 49 490 32 248
Investments - TMCS - 5 281 -
Total assets 95 866 134 979 115 625
Equity and liabilities
Capital and reserves 7 905 26 260 24 375
Issued capital and reserves
Minority interests 5 596 5 387 7 575
Non-current liabilities 14 154 22 633 16 642
Interest-bearing 11 154 15 089 13 642
Non-interest-bearing - vendors 3 000 7 544 3 000
Current liabilities 68 211 80 699 67 033
Trade and other payables 32 313 37 516 30 173
Current portion of vendor liabilities 5 532 7 840 11 786
Current portion of interest-bearing
borrowings 14 941 19 952 20 463
Taxation payable 4 683 5 822 4 271
Bank overdraft 10 742 9 569 340
Total equity and liabilities 95 866 134 979 115 625
Abridged group cash flow statement
Unaudited Audited
Six months ended Year ended
30 Apr 30 Apr 31 Oct
2002 2001 2001
R`000 R`000 R`000
Cash (utilised by)/generated from
operations (9 000) 3 717 9 021
Net interest paid (2 469) (3 492) (7 273)
Taxation paid (1 288) (183) (1 219)
Decrease/(increase) in working capital 17 600 (15 953) (15 667)
Cash available from/(utilised by) operations 4 843 (15 911) (15 138)
Investing and financing activities (15 245) 2 332 11 145
Net movement in cash and cash equivalents (10 402) (13 579) (3 993)
Cash and cash equivalents at beginning
of period (340) 4 961 4 961
Cash and cash equivalents from acquisitions
and disposals - (951) (1 308)
Cash and cash equivalents at end of period (10 742) (9 569) (340)
Statement of changes in equity
Unaudited Audited
Six months ended Year ended
30 Apr 30 Apr 31 Oct
2002 2001 2001
R`000 R`000 R`000
Issued capital 7 795 7 795 7 795
Balance at beginning of period 7 795 8 000 8 000
Reversed during the period - (205) (205)
Share premium 30 767 30 700 30 768
Balance at beginning of period 30 767 31 921 31 921
Reversed during the period - (1 150) (1 150)
Share issue expenses written off - (71) (3)
Accumulated loss (30 657) (12 235) (14 188)
Balance at beginning of period (14 188) (11 621) (14 406)
Accumulated (loss)/profit for the period (16 469) (614) 218
Total shareholders` interest 7 905 26 260 24 375
Comments
Financial commentary
The period under review has been a difficult one as far as trading conditions
are concerned. Corporate reduction in advertising and marketing expenditure has
had a negative impact, especially on the radio stations, with Radio Algoa being
worst affected. The general lack of consumer and corporate spending continued
during this period, although positive signs of improvement were evident towards
the end of the reporting period.
The two radio stations (OFM and Algoa) and Foghound Studios performed below
expectations for the first six months, but there are indications of industry
specific improvements, which should be sustained for the remainder of the
financial year. Although The Dome has succeeded in increasing the number of
exhibitions, the securing of naming rights still remain a priority for the long-
term success of this business. The Dome is one of the venues chosen for the
World Summit for Sustainable Development in August 2002. The exposure The Dome
will receive will enhance the prospects of securing possible naming rights and
additional revenues from exhibitions. Big Concerts had a tough six months, but
the management is working on a strategy of capitalising on this premier brand,
with more emphasis on local promotions. A provision of R2,1 million was raised
in this period for fireworks acquired by Big Concerts in the 2000 financial
year. Management is of the opinion that these have no realisable value.
Although Golden Gloves performed in line with expectations, their results were
adversely affected by the provision raised in the current period against the
Kushner Promotions debt of R3,8 million. In addition to this, income of
approximately R7 million on fights promoted by Kushner Promotions in the period
under review was not recognised due to the uncertainty surrounding its
recoverability. Legal fees in excess of R2,4 million have been incurred in
pursuance thereof.
The reversal of R1,9 million of deferred tax assets in relation to certain
discontinued operations, as well as the negative net adjustment in the order of
R1 million relating to the outside shareholder`s interest in Golden Gloves
further impacted on the results.
The group is continuing with its turnaround strategy with the disposal of non-
core assets and loss makers. The disposal of Moonlighting will be finalised in
the near future and Exclusive Hire has also been disposed of. Negotiations for
further disposals are in train.
The revenue for the period is R74,4 million (2001: R122,6 million), a 39,3%
reduction. This is mainly due to a combination of tough trading conditions, the
disposal of non-core assets and loss makers as well as the non-recognition of
the amounts owing by Kushner Promotions. As a direct result of these factors the
group has reported an operating loss for continuing operations of R11,7 million
(2001: R3,7 million profit).
Finance costs decreased to R2,5 million (2001: R3,5 million) due to a lower
average level of debt required. Interest-bearing debt reduced from R34,1million
(October 2001) to R26,1 million. The level of gearing is still not desirable,
but this will be further reduced by the proceeds of the Moonlighting disposal
and possible further disposals before the year-end. Certain lenders have also
agreed to extend the tenor of their loans until the financial year-end.
The group has incurred a headline loss of R13,8 million (2001: R0,9 million
profit), and a loss per share of 2,1 cents (2001: loss of 0,1 cents).
Accounting policies
The results have been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice. The accounting policies applied in this
report are consistent with those applied by the group in the previous financial
year.
Prospects
The next six months are critical from the point of view of turning the group
around with particular emphasis on improving both operating profits and
cashflows. This will be achieved by the disposals as mentioned and the focus of
management on improving profitability. The reduction of debt remains a focus
point in an effort to substantially reduce gearing and related finance costs.
Shareholders are reminded that the group is currently trading under a
cautionary.
General
Details of the disposal of Moonlighting and Exclusive Hire are fully set out in
a circular to be sent to shareholders in due course.
By order of the board
K Coyle Johannesburg
Chief executive officer 25 July 2002
Registered office
The Dome, Corner Olievenhout Avenue & Northumberland Road, North Riding
(PO Box 540, North Riding 2162)
Transfer secretaries
Computershare Investor Services Limited, 11 Diagonal Street, Johannesburg
(POBox 1053, Johannesburg 2000)
Directors
K Ngqula (Chairman)*, K Coyle (Chief executive officer), A Stein (Financial), Z
Lacob*, J Makobe*, T Sadik*
*Non-executive
Share code: AME
ISIN number: ZAE000014106
Website: www.ame.co.za
Date: 25/07/2002 03:00:00 PM Produced by the JSE SENS Department
