| Thu 5 Sep 2002, 0:00 | | Glenrand M I B - Reviewed Year-End Results for the |
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Glenrand M I B Limited (Registration number 1997/008001/06)
(`Glenrand MIB` or `the company` or `the group`)
JSE Share Code GMB ISINNo. ZAE 000018529
Service Beyond Expectation
REVIEWED YEAR-END RESULTS for the YEAR ended 30 JUNE 2002
Income Statement
for the year ended 30 June 2002
Reviewed Audited
2002 % 2001
Note R`000 change R`000
Operating revenue 3 832 333 +40 594 045
Operating expenses (699 061) +41 (494 312)
- continuing (699 061) (490 844)
- discontinuing - (3 468)
Trading profit 133 272 +34 99 733
Interest paid (8 243) (6 619)
Operating profit 125 029 93 114
Income from associates 5 464 1 438
Profit before non-trading items 130 493 94 552
Non-operating income 3 330 2 308
Headline adjusting items 4 4 961 2 049
Profit before taxation 138 784 98 909
Taxation 5 (38 852) (34 390)
Profit after taxation 99 932 64 519
Minority interest (21 496) (3 522)
Profit for the year 78 436 60 997
Headline earnings per share,
fully diluted (cents) 32,8 +23 26,7
Earnings per share, fully
diluted (cents) 34,9 27,7
Number of shares
- issued (000`s) 236 546 221 294
- weighted average,
fully diluted (000`s) 224 538 220 601
Balance Sheet
as at 30 June 2002
Reviewed Audited
Note R`000 R`000
Assets
Fixed assets 196 742 140 540
Goodwill and trademarks 32 957 21 328
Deferred taxation 6 41 970 30 831
Investments 23 927 19 718
Current assets 1 348 908 1 004 824
Total assets 1 644 504 1 217 241
Equity and liabilities
Ordinary shareholders` funds 174 276 112 705
Cost of shares held by subsidiary (2 084) (2 578)
Minority interest 52 676 24 068
Deferred taxation 7 991 10 452
Long-term liabilities 7 78 390 99 001
Current liabilities 1 333 255 973 593
Total equity and liabilities 1 644 504 1 217 241
Statement of Changes in Equity
for the year ended 30 June 2002
Non-
distribut-
Share Share able- Retained
R`000 capital premium reserves earnings Total
Balance as at
30 June 2000 4 426 - 32 998 53 195 90 619
- As previously
reported 4 426 - 32 998 28 607 66 031
- Prior year
adjustments - - - 24 588 24 588
Preference shares
issued 2 - - - 2
Translation of foreign
subsidiaries - - 920 - 920
Shared earnings of
associates - - (40) 40 -
Profit for the year - - - 60 997 60 997
Dividends - - - (39 833) (39 833)
Adjusted balance
as at 30 June 2001 4 428 - 33 878 74 399 112 705
Ordinary shares issued 305 32 136 - - 32 441
Preferred shares
redeemed (1) - - - (1)
Translation of foreign
subsidiaries - - (7 222) - (7 222)
Shared earnings of
associates - - 3 884 (3 884) -
Profit for the year - - - 78 436 78 436
Dividends - - - (42 083) (42 083)
Balance as at
30 June 2002 4 732 32 136 30 540 106 868 174 276
Headline EPS up 23% to 32,8 cents
Trading profit up 34% to R133 million
Total dividend up 11% to 20 cents per ordinary share
Cash Flow Statement for the year ended 30 June 2002
Reviewed Audited
2002 2001
R`000 R`000
Cash generated from operations 151 669 104 908
- continuing 151 669 110 486
- discontinuing - (5 578)
Movement in working capital (66 984) 112 889
Taxation paid (22 037) (15 310)
Dividends paid (42 083) (39 833)
Cash available from operating activities 20 565 162 654
Cash utilised by investing activities (47 252) (91 299)
Cash generated by financing activities 15 196 33 433
Net (decrease) increase in cash and
cash equivalents (11 491) 104 788
Cash and cash equivalents at
beginning of year 429 591 324 803
Cash and cash equivalents at end of year 418 100 429 591
Segmental Analysis
for the year ended 30 June 2002
Reviewed Audited
2002 2001
R`000 R`000
Segmental revenues
Risk advisory services 536 690 402 027
Africa 376 372 314 076
United Kingdom 156 740 87 951
International - other 3 578 -
Risk management and technology 79 864 56 657
Africa 78 447 53 511
International - other 1 417 3 146
Benefit consulting, healthcare and
medical services 215 779 135 361
Africa 215 779 135 361
Total segmental revenues 832 333 594 045
Segmental profits
Risk advisory services 92 512 70 272
Africa 79 992 62 461
United Kingdom 12 496 10 116
International - other 24 (2 305)
Risk management and technology 3 555 3 275
Africa 3 691 4 922
International - other (136) (1 647)
Benefit consulting, healthcare
and medical services 37 205 26 186
Africa 37 205 26 186
Total segmental profits 133 272 99 733
Notes
1. Basis of accounting
The accounting policies as set out in the 2001 Annual Report have been
consistently applied in producing the results except that STC and dividends
declared after year-end have not been accrued in terms of AC107: Events after
the Balance Sheet Date.
Certain comparative figures have been restated in order to achieve a more
meaningful presentation.
2. REVIEW OPINION
The group results have been reviewed by KPMG Inc. who have substantially
completed their audit and intend issuing an unqualified opinion on the annual
report due for publication in the near future.
Their unqualified review report is available for inspection at the company`s
registered office.
3. Operating revenue
Reviewed Audited
Year ended Year ended
30 June 30 June
2002 2001
R`000 R`000
Includes:
Investment income 37 301 34 032
4. CALCULATION OF HEADLINE Reviewed Audited
EARNINGS Year ended Year ended
30 June 30 June
2002 2001
R`000 R`000
Profit for the year 78 436 60 997
Less: Profit on disposal of investment (6 185) (589)
Less: Profit on dilution of investment - (3 798)
Add: Administration fee relating
to prior year 1 370 -
Add: Goodwill amortisation (2 536) 412
Add: Provision for impairment
of investment 2 593 -
Add: Loss on discontinued operations - 1 926
Headline earnings 73 678 58 948
5. TAXATION
The group`s tax charge comprises
the following:
SA normal taxation 23 086 13 930
SA deferred taxation 3 893 10 217
STC 5 192 5 308
Foreign taxation 4 865 4 249
Associates` taxation 1 816 686
38 852 34 390
6. DEFERRED TAXATION
Glenrand M.I.B Limited has resolved with SARS the queries relating to the
deductibility of our trademarks. SARS has accepted the full value of our
trademarks (R168 million) and Glenrand M.I.B Limited has accepted SAR`s offer to
claim the deduction thereof over 15 years. Whilst restating the value of the
deferred tax asset to take into account the 15-year write-off period, we have
not recognised the full value of the deferred tax asset as this would imply
certainty of there being sufficient taxable income over the full period
involved.
The increase of the deferred tax asset to R42 million (2001:R31 million) is
mainly attributable to the recognition of a deferred tax asset relating to the
group`s leave pay provision and the adjustment related to the accepted
amortisation period of the trademarks between Glenrand M.I.B Limited and SARS.
7. LONG-TERM LIABILITIES Reviewed Audited
Year ended Year ended
30 June 30 June
2002 2001
R`000 R`000
Interest bearing 64 097 76 518
Non-interest bearing 14 293 22 483
78 390 99 001
Operational Review
Business review
Our business
Glenrand MIB is a leading financial services group focused on providing risk
advisory services and solutions, employee benefits and investment advisory
services and solutions and selected financial products and full healthcare
maintenance organisation (HMO) services and products.
Financial review
Income statement
The directors are pleased to announce a 23% increase in fully diluted headline
earnings per share of 32,8 cents (2001: 26,7 cents). Since listing in 1998, the
group has achieved an annual compound growth rate of 20% over this four-year
period.
Total revenue growth of 40% to R832 million (2001: R594 million) was underpinned
by a solid 23% growth relating to existing businesses, whilst acquisitions
account for the other 17%.
Group trading profit increased to R133 million (2001: R100 million), up 33%.
This increase was driven by strong performances in our Africa Risk Advisory
Services division which increased their total trading profit 28% to R80 million
(2001: R62 million), as well as the inclusion of the HMO (Protector), for a full
twelve-month period.
The group`s overall trading margin decreased marginally to 16% (2001: 16,8%).
Lower than expected trading profits from our UK and Benefit Consulting
operations contributed to the fall in group trading margin.
Excellent performances in a number of our associated investments increased
their contribution by 286% during the financial period to R5,4 million (2001:
R1,4 million).
The group benefited from an overall enhancement in the effective tax rate which
dropped to 28% from 34% in the previous year.
Minority charges increased sharply mainly as a result of the inclusion of
Protector for a full year, the sale during this period of an equity stake in our
UK operation to management as well as other smaller acquisitions in which
minorities have a participation.
Balance sheet and cash flow
Total interest bearing long-term liabilities as a percentage of shareholder
equity has decreased significantly to 29% (2001: 57%). The lower gearing level
is attributable to the issue of approximately 14,7 million new ordinary shares
to Kunene Finance Company (Pty)Limited during the period, a 44% increase in net
retained earnings and the decrease in interest bearing long-term liabilities to
R64 million (2001: R77 million).
Cash generated from operations increased to R152 million, a significant increase
from R105 million in the last financial year. Our working capital changes are
affected extensively by insurance and reinsurance premiums, which we collect and
pay over to the insurance market. This determines the amount of premium float we
are holding at a particular point in time. The negative cash flow is due to this
factor.
STRATEGIC DEVELOPMENT AND GROWTH
Locally the group is considering a number of opportunities within the Benefit
Consulting industry. This business segment, we believe, offers our group
significant growth and expansion potential. Recent new business wins arising
from the group`s cross-sell initiatives are confirmation that our restructuring
and new administration system are starting to bear fruit.
Internationally, our UK operation has lifted its revenues by 78% to R157 million
(2001:R88 million). Despite this rapid growth in revenues, the operation
suffered losses in two of its divisions, both of them in the area of reinsurance
broking. The events of 11 September 2001 caused major capacity problems in the
international reinsurance markets which directly impacted on the results of
these two divisions. The group expects to see a significantly increased
contribution to trading profit from our UKoperation during F2003.
Prospects
All areas of our business are well set to achieve real growth in the F2003
financial year. Despite turmoil in the insurance and reinsurance markets as
regards rates and capacity as well as increasingly fierce market competition in
all our industries, the board expects to achieve satisfactory growth in headline
earnings per share for the year ending 30 June 2003.
The directors wish to point out that although satisfactory growth in headline
earnings per share is expected for the full year ending
30 June 2003, expected half-year headline earnings per share will be lower than
that reported for the period ended 31 December 2001, due to a change in timing
of expected revenues and costs between the first and second six-month period.
General
STRATE
Shareholders who have not yet dematerialised their shares are advised to do so
by surrendering all share certificates to their Central Securities Depository
Participant (CSDP) or broker prior to 29 September 2002. On 29 September 2002
the insurance cover provided by Lloyd`s of London to the Dispossessed Members
Fund (DMF) terminates. The DMF was put in place to cover loss or claims arising
from any tainted certificates (tainted scrip) that may exist in the market
place. Shareholders are therefore placing themselves at risk should share
certificates not be dematerialised prior to the deadline and they are later
found to be invalid or tainted.
Declaration of FINAL dividend
Notice is hereby given that a final dividend (No. 6) of 11 cents per share
(2001: 10 cents) has been declared. The following are the salient dates:
Last day to trade in order to participate in the final dividend
Friday, 27 September 2002
Trading on or after this date will be ex the final dividend
Monday, 30 September 2002
Record date Friday, 4 October 2002
Payment date Monday, 7 October 2002
On payment date, if so mandated, dividends due to shareholders of certificated
securities will either be transferred electronically to bank accounts or,
alternatively, cheques will be posted to their registered addresses.
Dividends in respect of dematerialised shareholdings will be credited to
shareholders` accounts with their Central Securities Depository Participant
(CSDP) or broker.
Shareholders may not dematerialise or rematerialise their holdings of ordinary
shares between Monday, 30 September 2002 and Friday,
4 October 2002, both dates inclusive.
On behalf of the board of directors
A W Mansfield D J Harpur
(Chairman - Non-executive) (Chief Executive Officer)
4 September 2002
DIRECTORATE
AWMansfield (Chairman), D JHarpur (Chief Executive Officer),
GCBeaver, RGCottrell, GTFerreira, GRGeorge, MPHutton,
CWKeey, JHHenderson, Dr MFKunene, MDWRyan, MBMartin (Alt), BHSearch, GMunro
(Alt). Group secretary: EPrice.
Registered office
Surrey Place 291 Surrey Avenue Randburg 2194 PO Box 2544
Randburg 2125 Tel (011) 329-1111 Fax (011) 329-1333
e-mail info@glenrandmib.co.za website www.glenrandmib.co.za
Registrars
Computershare Services Limited Edura 41 Fox Street
Johannesburg 2001 PO Box 61051 Marshalltown 2107
Tel (011) 370-7700 Fax (011) 688-7715
Date: 05/09/2002 08:55:00 AM Produced by the JSE SENS Department
