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DNA Supply Chain Investments Limited -Results
(Incorporated in the Republic of South Africa)
(Registration number 1987/004875/06)
Share code: DNA ISIN: ZAE000022794
(`DNA` or `the Group`)
Reviewed Preliminary Results for the year ended 30 June 2002
We have invested in integrating our acquisitions and capabilities. The
result is a distinctive competence that is adding considerable value to
new and existing clients.
Financial Performance
Although the overall financial performance of the Group for this
reporting period and particularly the second half of the year has been
disappointing, our strategic businesses have achieved satisfactory
growth in market share and revenues. Our margins have, however, been
adversely affected by the following factors:
* Strategic Investments
- Our offshore investments, the objectives of which are to position
DNA to take advantage of international opportunities, were not
expected to yield a return in the first year.
- Investment in technology and the development of client solutions;
the benefits of which have not accrued this year.
- Investment to integrate acquisitions.
* Sensormatic failed to achieve its stated objectives as a result of the
loss of a major contract.
* The provisional liquidation of CNA resulted in lost revenues and a R5
million provision has been made. This is regarded by the board to be
adequate
Strategic Review
In previous financial reports we highlighted the activities on which
future growth would take place. These included integration of
acquisitions and existing businesses. Today these activities have
resulted in a distinctive competence that is adding considerable value
to our existing clients and is attracting new clients who are seeking
the advantages of a partnership-based supply chain management service,
both locally and internationally.
We have:
* Developed expertise and delivery capability in the technology
required for supply chain integration
* Improved internal operating processes, resulting in more
integrated and effective solutions for clients
* Worked with our strategic equity partners to leverage our
offshore investments
* Entered into an agreement with a black empowerment company who may
become a controlling shareholder of DNA Micor, the freight and bulk
materials handling specialists of DNA. This is based on the original
agreement between DNA and Letsema Holdings, our black empowerment
partner since 1998. By introducing empowerment shareholders, DNA Micor
will be assuming a leadership position in an industry where customers
and strategic partners are becoming increasingly sensitive to the
empowerment profile of their business associates. A circular containing
full details of the above transaction will be posted to shareholders
shortly.
Prospects
We believe we have positioned DNA to provide a valuable and distinctive
supply chain management offering.
Our objectives for the year ahead include:
* Introducing new, and converting existing clients to our integrated
service offering.
* Strengthening a leadership position in our chosen markets.
* Continuing to develop opportunities with our international strategic
partners.
We expect growth to come from our existing client base and new clients.
Consequently, the year ahead is expected to show an improvement in
margins as benefits begin to flow from our investments in technology,
solutions and structure.
Review by Auditors
The results have been reviewed by DNA Supply Chain Investments
Limited`s, auditors, Deloitte & Touche. Their review opinion is
available for inspection at DNA`s registered office.
Consolidated Income Statement for the year ended 30 June 2002
Year ended Year ended
30 June 2002 30 June 2001
R`000s R`000s
Turnover 2 385 878 1 700 098
Revenue 1 028 712 586 087
Operating income before amortisation
and depreciation 64 288 84 746
Depreciation 10 385 10 830
Amortisation of goodwill 22 032 11 313
Net income before finance charges 31 871 62 603
Net finance charges 3 601 1 814
Losses from associated companies 3 535 -
Income before taxation 24 735 60 789
Taxation 8 527 12 877
Income after taxation 16 208 47 912
Outside shareholders` interest 3 991 4 061
Attributable income 12 217 43 851
Earnings per share (cents) 1.8 8.1
Headline earnings per share
(cents) 5.3 10.5
Diluted earnings per share (cents) 1.8 7.9
Diluted headline earnings
per share (cents) 5.3 10.3
Weighted average number of
shares (000s) 660 576 543 915
Diluted number of shares (000s) 660 576 554 317
Headline earnings reconciliation
Attributable income 12 217 43 851
Discontinued operations - 2 111
Loss (profit) disposal of
property, plant and equipment 517 (154)
Amortisation of goodwill 22 032 11 313
Headline earnings 34 766 57 121
Notes to the Consolidated Income Statement
and Balance Sheet
1. These Financial Statements have been prepared in accordance with
South African Statements of Generally Accepted Accounting Practice.
2. The accounting policies used in the preparation of the Financial
Statements are consistent with those used in the Annual Financial
Statements for the year ended 30 June 2001, except for the change in
accounting policy relating to leave pay which has been changed so as to
comply with AC 116. The prior year comparatives have been restated
accordingly.
3. Depreciation and amortisation of goodwill for the group amounts to
R10.4 million and R22.0 million (June 2001: R10.8 million and R11.3
million)
4. The Group has approved capital expenditure for the development of a
wide area network and enterprise reporting software of R3.8 million.
This will be funded through a lease.
5. Revenue is calculated by deducting statutory and other
disbursements, made on behalf of clients, from gross billings.
6. Included in current assets is an amount of approximately R116
million, representing amounts owed by trade debtors for statutory and
other disbursements (June 2001: R134 million). A similar amount is
reflected in current liabilities
7. The increase in goodwill arises mainly as a result of the
acquisition of Streamworks and the minority interest in Transafrica
Logistics.
8. The increase in shares in issue arises principally from the
acquisition of Streamworks.
9. All South African bank accounts participate in the benefits of a
cash management set-off system, but are shown separately as gross bank
balances and overdrafts in order to comply with AC 125.
Consolidated Balance Sheet at 30 June 2002
30 June 2002 30 June 2001
R`000s R`000s
ASSETS
Non-current assets 198 142 125 489
Property, plant and
equipment 39 672 21 692
Trademarks 1 380 1 384
Goodwill 119 031 78 562
Deferred taxation 9 842 2 955
Investments and loans 28 217 20 896
Current assets 545 336 422 501
Development expenditure 7 900 7 796
Inventories 38 199 26 783
Accounts receivable 390 758 293 942
Bank and cash 108 479 93 980
743 478 547 990
EQUITY & LIABILITIES
Share capital and premium 166 849 144 627
Non distributable
reserves 2 567 2 567
Distributable reserves 91 849 79 632
Total shareholders` interest 261 265 226 826
Outside shareholders`
interest 1 296 2 036
Long-term borrowings 15 146 2 477
Current liabilities 465 771 316 651
Accounts payable 336 331 241 105
Current portion of
long-term borrowings 15 266 10 144
Vendors for businesses
acquired - 3 920
Bank overdraft 108 719 51 853
Taxation 5 455 9 629
743 478 547 990
Net asset value per share
(cents) 39.3 36.0
Net tangible asset value per
share (cents) 21.2 23.3
Number of shares
at year end (000s) 664 288 630 020
Segmental Report
Total Sourcing Logistics Risk Integrated
AND Services Management Supply
Procurement Chain
Services
R`000`s R`000`s R`000`s R`000`s R`000`s
Turnover 2 385 878 187 183 1 268 284 80 306 850 105
Revenue 1 028 712 187 183 437 236 80 306 323 987
Headline
Earnings 34 766 17 357 18 358 (2 555) 1 606
Total Assets 743 478 119 726 188 421 38 895 396 436
Total Liabilities 480 917 40 061 105 381 25 749 309 726
Statement of Changes in Equity for the year ended 30 June 2002
Share Non Retained Total
Capital distributable income equity
& premium reserves
R`000s R`000s R`000s R`000s
Opening balance -
1 July 2001 144 627 2 567 81 740 228 934
Change in accounting policy for
leave pay - - (2 108) (2 108)
Restated opening
balance - 1 July 2001 144 627 2 567 79 632 226 826
Issue of new shares 22 361 - - 22 361
- -
Share issue expenses (139) (139)
Attributable income for the
year ended 30 June 2002 - - 12 217 12 217
Closing balance -
30 June 2002 166 849 2 567 91 849 261 265
Consolidated Cash Flow Statement for the year ended 30 June 2002
30 June 2002 30 June 2001
R`000s R`000s
Cash flows from operating
activities
Cash flows from operations 71 191 85 613
Increase in working capital (6 684) (1 360)
Net finance costs (3 601) (1 814)
Taxation paid (16 384) (13 987)
Dividends paid to minority
shareholders (616) (3 499)
Net cash inflow from
operating activities 43 906 64 953
Cash flows from investing
activities
Net additions to property
plant and equipment (27 463) (12 996)
Additions to trademarks (336) -
Development expenditure (6 209) (7 796)
Purchase of businesses (76 738) (90 725)
Decrease in vendors for
businesses acquired (3 920) (31 660)
Investments and loans (10 586) (16 780)
Net cash outflow from
investing activities (125 252) (159 957)
Cash flows from financing activities
Increase in ordinary share
capital 3 15
Increase in share premium 22 358 112 829
Share issue expenses (139) (510)
Decrease in redeemable
preference shares - (2)
Increase in
interest-bearing borrowings 16 757 3 540
Net cash inflow from
financing activities 38 979 115 872
Net (decrease) increase in cash
and cash equivalents (42 367) 20 868
Cash and cash equivalents
at beginning of the year 42 127 21 259
Cash and cash equivalents
at end of the year (240) 42 127
Directors
SA Conradie (Chairman), MJ Kaplan (CEO), PM Baker,
Dr. NA Binedell*, L Brenner, AG Dandridge, R Krishnasamy*,
H Pieterman* (Alternate C Stein*), RC Pople,
AB Rubenstein*, I Shongwe, V Tchenquiz* (Alternate J Parente*)
* non-executive
For and on behalf of the Board 11 September 2002
Stephen Conradie ( Chairman )
Mark Kaplan ( Chief Executive Officer )
Registered Office
The Woodlands
Building 16
1st Floor
Cnr Kelvin and Woodlands Drive
Woodmead
2199
Transfer Secretaries
Computershare Investor Services Limited
Edura 41 Fox Street
Johannesburg
2001
PO Box 61051
Marshalltown
2107
Date: 12/09/2002 07:00:03 AM Produced by the JSE SENS Department
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