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HomeChoice Ltd - Interim report for the six months ended 30 June 2002
HomeChoice Limited
Registration number 1991/005430/06
JSE share code: HCH ISIN number: ZAE000011409
Interim report for the six months ended 30 June 2002
Group income statement
Restated
Unaudited unaudited Audited
Six months six months twelve months
ended ended ended
30 June 2002 30 June 2001 31 December 2001
R`000 R`000 R`000
Revenue 240 383 310 380 604 130
Gross profit 93 301 146 677 263 896
Expenses (113 244) (110 685) (325 905)
Operating (loss)/profit (19 943) 35 992 (62 009)
Interest paid (10 058) (9 210) (18 831)
Interest received 209 800 1 663
Operating (loss)/ profit
after interest (29 792) 27 582 (79 177)
Taxation 8 909 (8 333) 22 626
Attributable (loss)/profit (20 883) 19 249 (56 551)
Weighted average shares
in issue (`000) 135 577 135 577 135 577
Headline (loss)/earnings
per share (cents) (15,4) 14,2 (39,5)
(Loss)/earnings per share
(cents) (15,4) 14,2 (41,7)
Diluted (loss)/earnings
per share (cents) (15,4) 14,2 (41,7)
R`000 R`000 R`000
Headline (loss)/earnings is
determined as follows:
Attributable (loss)/profit (20 883) 19 249 (56 551)
Adjusted for:
Employee share trust loan
written down - - 3 064
Headline (loss)/earnings (20 883) 19 249 (53 487)
Group balance sheet
Restated
Unaudited unaudited Audited
30 June 2002 30 June 2001 31 December 2001
R`000 R`000 R`000
Assets
Fixed and other
non-current assets
Property, plant and equipment 14 536 16 306 15 320
Intangible assets 1 165 1 456 1 310
Loan to Employee Share Trust 1 328 4 392 1 328
17 029 22 154 17 958
Current assets
Inventory 49 439 87 818 51 071
Trade receivables 396 263 516 118 426 454
Other receivables
and prepayments 10 442 20 050 9 799
Bank 113 12 107
Taxation - 2 614 -
456 257 626 612 487 431
Total assets 473 286 648 766 505 389
Equity and liabilities
Capital and reserves 278 687 375 370 299 570
Non-current liabilities
Interest bearing long-term
Liabilities 928 883 863
Deferred tax 16 568 56 433 25 476
17 496 57 316 26 339
Current liabilities
Interest bearing current
Liabilities 104 261 123 655 122 242
Non-interest bearing
current liabilities 72 842 92 425 57 238
177 103 216 080 179 480
Total liabilities 194 599 273 396 205 819
Total equity and liabilities 473 286 648 766 505 389
Statement of changes in equity
R`000
Share Share Distributable
Capital premium reserves Total
R`000 R`000 R`000 R`000
Balance at 31 December 2000 1 356 214 619 140 091 356 066
Balance at 31 December 2000
As previously reported 1 356 214 619 146 515 362 490
Prior year adjustment - - (6 424) (6 424)
Net profit for the six months
ended 30 June 2001 - - 19 249 19 249
As previously reported - - 22 431 22 431
Prior year adjustment - - (3 182) (3 182)
Goodwill adjustment - - 55 55
Balance at 30 June 2001 1 356 214 619 159 395 375 370
Balance at 30 June 2001
as previously reported 1 356 214 619 169 002 384 977
Prior year adjustment - - (9 607) (9 607)
Net loss for the six months
ended 31 December 2001 - - (75 800) (75 800)
Balance at 31 December 2001 1 356 214 619 83 595 299 570
Net loss for the six
months ended 31 June 2002 - - (20 883) (20 883)
Balance at 30 June 2002 1 356 214 619 62 712 278 687
Abridged cash flow statement
Restated
Unaudited six unaudited six Audited twelve
months ended months ended months ended
30 June 2002 30 June 2001 31 December 2001
R`000 R`000 R`000
Cash generated/(utilised)
by operations 29 550 (16 514) (9 428)
Net interest paid (10 286) (8 219) (17 835)
Taxation (paid)/refund (6) 5 2 505
Net cash inflow/(outflow)
from operating activities 19 258 (27 728) (24 758)
Net cash outflow from
investing activities (894) (4 380) (2 749)
Net cash outflow from
financing activities (570) (99) (377)
Net increase/(decrease)
in cash and cash equivalents 17 794 (29 207) (27 884)
Bank overdraft at beginning
of period (121 309) (93 425) (93 425)
Bank overdraft at
end of period (103 515) (122 632) (121 309)
Other financial information
Restated
Unaudited six unaudited six Audited twelve
months ended months ended months ended
30 June 2002 30 June 2001 31 December 2001
R`000 R`000 R`000
Debt/equity ratio (:1) 0,38 0,33 0,41
Depreciation - property,
plant, equipment and
intangible assets (R`000) 2 317 3 749 6 132
Capital expenditure (R`000) 1 449 3 757 11 274
Capital commitments (R`000)
- authorised 900 3 147 305
- authorised and contracted for 71 - 594
Shares in issue at end
of period (`000) 135 577 135 577 135 577
Net asset value
per share (cents) 205,6 276,9 221,0
Notes:
1. The borrowing powers of the group are not limited in terms of the
articles of association of the group companies.
2. The restatement is in respect of the change in accounting policy with
regards to customer returns as set out in the December 2001 financial
statements.
3.The group`s accounting policies comply with South African statements
of Generally Accepted Accounting Practice which are consistent with
those of the previous period.
Commentary
Trading results
As advised, HomeChoice is focusing on cash generation in conjunction
with a cost reduction and consolidation process. For the first six
months this resulted in a planned 22,6% reduction of revenue to R240,3
million.
Gross profit has been negatively influenced by the rand`s depreciation
and various costs associated with the ongoing restructuring of the
business.
The mass market consumer credit environment continues to be very
challenging and consequently collection costs and required conservative
provisioning for delinquency continue to negatively impact expenses.
The net result is an operating loss for the six month period of R19,9
million.
Cash flow and banking facilities
As planned the group produced a positive operating cash flow for the six
month period of R19,2 million, after gearing costs.
It is the directors stated intention to continue to generate cash to
reduce borrowings and it is therefore anticipated that during the next
six months the business will generate similar cash flows.
These cash flows are well ahead of the agreed repayment amounts
negotiated with the group`s bankers.
Contingent liability
We are awaiting judgment by the Pretoria Supreme Court regarding our
application to set aside the South African Revenue Service 1999 claim
for customs duty on VAT of R10 million, and forfeiture of R21 million.
The board remains confident that the claim is invalid.
Directorate
Ms J Whitehouse and Mr J Hubbard have resigned from the board with
effect from 1 June 2002 and 16 August 2002, respectively.
Prospects
The group will continue the process of consolidation, reduction of costs
and generation of cash.
It is anticipated that revenues will continue to decline and that the
second six months will produce a financial loss, but positive operating
cash flow.
The positive cash flow will be applied to further reduce borrowings and
creditors.
On behalf of the board
RE Garratt
Executive chairman
Cape Town
15 August 2002
Registered address
200 Main Road, Claremont 7708
Private Bag X150, Claremont 7735
Tel: 021 680 1000 Fax: 021 680 1001
Transfer secretaries
Mercantile Registrars Limited
11 Diagonal Street, Johannesburg 2001
Directors
RE Garratt, MY Guttler, JC Hubbard, WG Morrissey, DA Walker, AGW
Williamson*
(Non executive)
This information is also available on our website at
http://www.homechoice.co.za
Date: 15/08/2002 05:05:36 PM Produced by the JSE SENS Departme
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