| Thu 12 Sep 2002, 17:23 | | New Africa Investments Limited - Financial Report |
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New Africa Investments Limited - Financial Report
NEW AFRICA INVESTMENTS LIMITED
Interim Report of the Group for the six months ended 30 June 2002
* Headline earnings per share 25,9 cents - up 14,2%
* Headline earnings R31,4 million - up 14,2%
* Net asset value per share 1 195 cents - down 10,6%
Consolidated income statement
Continuing Operations (Excluding New Africa Capital)
Unaudited Unaudited Audited
6 months 6 months 12 months
30 June 30 June 31 December
2002 2001 2001
R`000 R`000 R`000
Revenues 256 396 183 176 451 691
EBITDA 22 535 (9 749) 24 773
Amortisation and depreciation (13 875) (10 863) (37 426)
Net finance income 30 526 50 753 79 215
Income before exceptional items 39 186 30 141 66 562
Income from associates 8 403 5 964 16 282
Exceptional items (74 035) (120 999) (241 658)
Loss before taxation (26 446) (84 894) (158 814)
Taxation 15 466 10 880 28 354
Loss after taxation (41 912) (95 774) (187 168)
Minority interest (700) 2 483 3 409
Loss attributable to ordinary shareholders (42 612) (93 291) (183 759)
HEADLINE EARNINGS
Loss attributable to ordinary shareholders (42 612) (93 291) (183 759)
Exceptional items net of minority portion 74 035 120 799 241 008
31 423 27 508 57 249
Headline earnings per share (cents) 25,9 22,6 47,1
Loss per share (cents) (35,1) (76,8) (151,3)
Number of shares taken into
account in calculating EPS (`000) 121 479 121 479 121 479
Consolidated balance sheet
Continuing Operations (Excluding New Africa Capital)
Unaudited Unaudited Audited
6 months 6 months 12 months
30 June 30 June 31 December
2002 2001 2001
R`000 R`000 R`000
Assets
Property, plant and equipment 105 358 162 019 103 260
Intangible assets 231 259 243 152 222 664
Investments 474 194 513 558 547 357
Long-term loans 36 736 23 541 40 340
Deferred taxation 23 499 24 282 21 151
Current assets 756 488 907 210 738 267
Total assets 1 627 534 1 873 762 1 673 039
Total equity and liabilities
Share capital and premium 841 049 841 049 841 049
Reserves 635 730 719 801 678 342
Minority interest 45 673 33 572 42 077
Long-term liabilities 8 677 60 293 1 221
Deferred taxation 775 3 505 775
Current liabilities 95 630 215 542 109 575
Total equity and liabilities 1 627 534 1 873 762 1 673 039
Listed investments at market
value and unlisted investments
at directors` valuation (R`000) 1 451 880 1 623 820 1 494 046
Net asset value (cents) 1 195,2 1 336,7 1 229,9
Number of shares in issue at
end of period (`000) 121 479 121 479 121 479
Directors` valuation for 30 June 2002 is based on the valuation performed at
31 December 2001, and no material fact has arisen to change this view.
Consolidated cash flow
(Including NAC)
Unaudited Unaudited Audited
6 months 6 months 12 months
30 June 30 June 31 December
2002 2001 2001
R`000 R`000 R`000
Cash retained from operating activities 43 801 1 222 405 (183 750)
Cash effects of investing activities (20 301) (1 456 093) (248 969)
Cash effects of financing activities 13 598 121 167 (41 717)
Net increase in cash and cash equivalents 37 098 (112 521) (474 436)
Cash held by unbundled companies - - (197 000)
Cash and cash equivalents
at beginning of period 565 318 1 124 233 1 236 754
Cash and cash equivalents at end of period 602 416 1 011 712 565 318
Contribution to headline earnings
Continuing Operations
6 months 6 months 12 months
30 June 30 June 31 December
2002 2001 2001
R`000 R`000 R`000
Media
Publishing 3 124 (1 374) 2 882
Radio 6 537 4 851 14 197
Outdoor 3 642 - -
Film and television 1 658 (190) 751
Exhibitions (228) (409) (1 027)
Total Media 14 733 2 878 16 803
Other
Financial services 7 089 - 5 635
Hertz (4 115) (4 727) (11 113)
Head Office 13 716 29 357 45 924
Total Group 31 423 27 508 57 249
Statement of changes in equity
Share capital
and premium Reserves Total
R`000 R`000 R`000
Restated 31 December 2000 3 558 603 1 325 377 4 883 980
Unbundle New Africa Capital (2 717 554) (495 865) (3 213 419)
Net loss for year - (151 170) (151 170)
Balance at 31 December 2001 841 049 678 342 1 519 391
Net loss for period - (42 612) (42 612)
841 049 635 730 1 476 779
Exceptional items
Continuing Operations
6 months 6 months 12 months
30 June 30 June 31 December
2002 2001 2001
R`000 R`000 R`000
Write-down investment in Johnnic (5 883) (71 000) (91 283)
Write-down of New Africa Capital (61 803) - (60 221)
Provision for write-down of UAH - - (24 592)
Net profit on sale of other investments 150 1 300 1 234
Restraint of trade payments - (200) (350)
Restructuring fees - (45 117) (53 957)
Amortisation of goodwill (6 499) (5 782) (11 839)
(74 035) (120 799) (241 008)
Commentary
DIRECTORS` STATEMENT
Your directors take pleasure in presenting the interim results of the Group
for the six months ended 30 June 2002. These results comply in all material
respects with the requirements of AC 127 of the South African Statements of
Generally Accepted Accounting Practice, as well as the South African Companies
Act of 1973, as amended.
The principal accounting policies are consistent with those applied at
31 December 2001.
PRESENTATION OF FINANCIAL RESULTS
Effective 21 September 2001, a distribution in specie to Nail ordinary and
"N" ordinary shareholders was made of approximately 90% or 320 million
shares held in New Africa Capital. In order to present a meaningful
comparison the continuing operations only (i.e. excluding New Africa
Capital) have been disclosed in the income statement and balance sheet. The
unaudited consolidated income statement for the six months to 30 June 2001
and unaudited consolidated balance sheet at 30 June 2001 exclude New Africa
Capital and have been extracted from the pro forma interim results of the
Group for the 6 months ended 30 June 2001. The audited consolidated income
statement for the 12 months to 31 December 2001 excludes New Africa Capital
and has been extracted from the Group`s 2001 Annual Report.
NON EXECUTIVE CHAIRMAN
Mr A S Mabogoane has been appointed non-executive chairman with effect from
1 March 2002.
ACQUISITIONS AND DISPOSALS DURING PERIOD UNDER REVIEW
* Effective 1 January 2002 Nail acquired 100% of Natanya Outdoor and 70% of
Natanya Africa, as its entry into the outdoor advertising business. These
businesses have been rebranded Nail Outdoor and Nail Outdoor Africa.
* New Africa Exhibitions was closed during the period.
POST-BALANCE SHEET EVENTS
* Effective 1 July 2002 Nail Outdoor acquired the assets of Randata and
Significant Signs.
SEASONALITY
The media investments results are subject to seasonal factors where the
second six months of the year traditionally attract higher advertising revenues.
CONTINGENT LIABILITIES
Nail is a partner together with New Africa Capital and BoE for the
management, collection and funding of the African Bank debtors` book which was
excluded from the sale of The African Bank Limited to African Bank Investment
Limited.
Nail`s contingent liability in respect of the additional funding required in
the event that the total debtors` book was uncollectable amounts to R116,3
million (31 December 2001 - R125,7 million).
REVIEW OF OPERATIONS
Media
Radio
The radio assets continue to perform well posting a 35% increase in headline
earnings over the comparable period last year.
Kaya FM has achieved a breakeven position in the six-month period to 30 June
2002 and is set to make a positive contribution for the rest of the year.
Listenership across all the Nail owned radio stations increased according to the
Radio Audience Measurement Survey figures released for the year to 30 June 2002.
Jacaranda FM is the largest regional radio station in South Africa and KFM is
now the largest radio station in the Western Cape according to the latest radio
listenership figures.
Radio advertising revenues remain strong across all radio stations and this
should result in increased profitability for the full year.
Radmark, the radio sales house, has produced an impressive set of results on the
back of the increased advertising revenues generated for the radio stations.
Print
In the period under review Mr John Dludlu was appointed as editor of the
Sowetan and the newspaper underwent a repositioning.
The establishment of an internal sales house, Thengisa Media, has paid dividends
with, strong advertising revenue for the Sowetan, up 28% over the comparable
period last year.
Sowetan Sunday World reported a 54% circulation growth in the January to June
2002 ABC circulation figures. This should result in attracting more advertisers
to the publication. The circulation footprint is being extended to the Eastern
Cape. Mr Thabo Leshilo has been appointed as the new editor of the Sowetan
Sunday World.
Leadership has grown its circulation 74%, from a low base, according to the
ABC circulation figures for January to June 2002.
Film and television
Urban Brew continues to produce the highly successful Road 2 Riches Tv show
and Live Lotto Draw and has expanded the YOTV youth show. New shows and improved
margin control has resulted in the improved performance over the comparable
period for last year.
New Africa Media Films has completed its first full length feature, Slash.
Slash premiered at Cannes and attracted considerable interest. Distribution
deals have been signed with Universal and First Look. Initial indications are
that the release of Slash will provide an acceptable return for the investors,
Nail and the IDC.
Outdoor
Nail Outdoor contributed to the results for the first time. The acquisitions
of Randata and Significant Signs brings critical mass to the existing business
and an increased number of landmark sites. The next phase of expansion will be
organic, having secured sites on the national roads and with the Airports
Company of South Africa.
Expansion into Africa is being driven through Nail Outdoor Africa, a 70%
owned subsidiary.
Exhibitions
This operation was closed during the period under review.
Other investments
Hertz
This year has seen the company making a concerted effort to increase revenues
which has resulted in revenues increasing by 70% over the same period last year.
Inflation in the car industry, rising interest rates and aggressive selling have
had a negative effect on margins. The second half of the year should show an
improvement as a larger share of the revenues is generated from higher priced
inbound tourism.
Head Office
The interest income has reduced due to the cash outflows resulting from the
payment of the special dividend in May 2001 of R243 million and the close out of
the Johnnic Put Options of R240 million in December 2001.
PROGRESS SINCE UNBUNDLING
Since the unbundling of New Africa Capital, a number of media acquisitions
were pursued. The acquisition of Kagiso Media was not approved by ICASA. Three
acquisitions in the Outdoor business have resulted in the creation of Nail
Outdoor, which has made a significant contribution to earnings in this period.
The Group continues to pursue acquisitions in media that are designed to create
critical mass in certain areas of the business.
Nail has also focused on the operational performance of its underlying
business. That focus has resulted in significant improvement in the performance
of these businesses.
DIVIDEND
The directors have decided that no interim dividend will be declared and that
a dividend will be considered at the time of the release of the preliminary
results in March 2003.
A S Mabogoane S Macozoma
Non-Executive Chairman Chief Executive Officer
11 September 2002
Directors: A S Mabogoane (Non-Executive Chairman), S Macozoma (Chief Executive
Officer), T Curtis, Prof M M Katz, J T Mdlalose, G T Serobe,
G Snelgar, Prof G Williams, R Kevan, K Setzin, G Chadwick, L Mojela,
M Ngoasheng
Company Secretary: D Qwelane
(Incorporated in the Republic of South Africa)
(Registration number 1993/002467/06) ("Nail")
Date: 12/09/2002 04:48:27 PM Produced by the JSE SENS Department
