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MICROmega - Unaudited Group Results For the six months ended 30 June 2002
MICROmega Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/003821/06
Share code MMG ISIN ZAE000034435
("Micromega" or "the Company")
UNAUDITED GROUP RESULTS
For the six months ended 30 June 2002
Decrease in operating -17%
profit
Decrease in -19%
attributable earnings
6 months 6 months Year ended
ABRIDGED INCOME 30 June 30 June 31 December
STATEMENT
2002 2001 2001
R (`000) R (`000) R (`000)
Gross revenue 49 404 47 784 100 284
Operating profit 15 345 18 491 37 719
Net finance income 1 840 1 455 3 332
Profit before taxation 17 185 19 946 41 051
Taxation (4 795) (4 556) (7 092)
Headline earnings 12 390 15 390 33 959
Write off of associate - (5 142) (5 104)
company
Amortisation of (19 293) (12 777) (24 724)
goodwill
Profit/(Loss) (6 903) (2 529) 4 131
attributable to
shareholders
Headline earnings per 15.73 21.00 45.14
share (cents)
Fully diluted (8.67) (3.09) 4.93
earnings/(Loss) per
share (cents)
Earnings/(Loss) per (8.76) (3.45) 5.49
share (cents)
Weighted average number 78 778 73 282 75 237
of shares
Diluted weighted 79 658 81 784 83 833
average shares in issue
Total number of share 85 878 76 377 76 377
in issue
ABRIDGED BALANCE SHEET 30 June 30 June 31 December
2002 2001 2001
R (` 000) R (` 000) R (` 000)
ASSETS
Non-current assets
Fixed assets 5 603 6 791 6 121
Goodwill 2 80 408 84 529 77 398
Deferred tax 5 065 3 685 6 345
Other loans receivable - - 140
Investments 3 389 3 817 3 331
Current assets
Bank and cash 30 926 35 106 41 333
Accounts receivable 9 363 9 896 8 942
Total assets 134 754 143 824 143 610
EQUITY AND LIABILITIES
Capital and reserves
Shareholders` equity 79 961 75 648 69 273
Non-current liabilities
Long-term borrowings 26 060 44 189 37 268
Current liabilities
Taxation 58 4 027 4 875
Accounts payable 8 223 7 396 8 629
Income received in 9 646 2 317 10 839
advance
Current provisions 3 10 806 10 247 12 726
Total equity and 134 754 143 824 143 610
liabilities
Net asset value per 93.11 99.05 90.70
share (cents)
ABRIDGED Share Share NDR Accumulated Total
STATEMENT OF
CHANGES IN
EQUITY
capital premium loss
R (` 000) R (` 000) R (` 000) R (` 000) R (` 000)
Balance at 1 725 118 930 - (54 458) 65 197
January 2001
Net profit for - - 4 131 4 131
the period -
Foreign currency (185) (185)
translation
reserve
Dividends 36 14 464 (14 500) -
Issue of shares 3 252
249
Share issue (122) (122)
expenses
Balance at 31 133 521 (185) (64 827) 69 273
December 2001 764
Net loss for the (6 903) (6 903)
period
Dividends 11 237 - (16 582) (5 316)
29
Issue of shares 22 909 - 22 974
65 -
Share issue (67) (67)
expenses
Balance at 30 167 600 (185) (88 312) 79 961
June 2002 858
6 months 6 months Year ended
ABRIDGED CASH FLOW 30 June 30 June 31 December
STATEMENT
2002 2001 2001
R (` 000) R (` 000) R (` 000)
Cash generated by 18 024 23 574 44 600
operations
Taxation paid (8 489) (5 245) (7 555)
Dividends - cash portion (5 316) - -
Movement in working (3 622) (8 097) (125)
capital
Net cash from operating 597 10 232 36 920
activities
Net cash from investing (22 706) (12 037) (19 023)
activities
Capital raised 22 907
227 130
Loans (repaid)/raised (11 205) (5 977)
7 401
Net cash from finance 11 702 (5 847)
activities 7 628
Net decrease in bank and (10 407) 12 050
cash 5 823
Represented as follows:
Bank and cash at beginning 41 333 29 283 29 283
of the period
Bank and cash at end of 30 926 35 106 41 333
the period
Net decrease in bank and (10 407) 12 050
cash 5 823
NOTES TO THE FINANCIAL
STATEMENTS
1. Accounting policy
The financial statements are prepared in accordance with South
African Statements of Generally Accepted Accounting Practice. The
accounting policies are consistent with the annual financial
statements at 31 December 2001.
2. Goodwill Carrying Additions Amortization Carrying value
value
1 January 30 June
2002 2002
R`(000) R`(000) R`(000) R`(000)
Goodwill arising 77 398 22 303 (19 293) 80 408
from acquisition
Goodwill represents the excess of the cost of acquisition over the fair value
of net assets of the subsidiaries on acquisition. Goodwill is amortised using
the straight line method over the lesser of the profit warranty period
associate with the specific acquisition or five years. The carrying amount of
goodwill is reviewed annually and written down for any permanent impairment
where considered necessary. The additional goodwill arose as a result of
subsidiaries acquired previously meeting profit warranties.
3. Provisions Carrying Additional Utilised during Carrying value
value
1 January provisions the period 30 June
2002 2002
R`(000) R`(000) R`(000) R`(000)
Provision for 5 800 - ( 2 400) 3 400
deal differences
Provision for 3 664 480 4 144
leave pay
General 2 762 - - 2 762
provisions
Product warranty 500 - - 500
provision
12 726 480 ( 2 400) 10 806
COMMENTARY ON RESULTS
Our three main operating entities namely, Global Credit Ratings, MICROmega
Securities and MICROmega Revenue Management Services have continued to
generate earnings growth ahead of expectation. However our finance and
treasury risk management services have been negatively affected by the
publicity surrounding the dispute between our former CEO and SARS. During the
period we were unable to close pending transactions or to secure new clients
for these services and we have consequently elected to suspend these
activities. The combined impact of the costs incurred and of not receiving a
contribution from these activities has resulted in a reduction in headline
earnings in comparison to previous reported periods.
PROSPECTS
The second half results will also be affected by the negative publicity. We
believe however that the curtailment in our risk management services to the
public sector will allow the remaining businesses to put the group back on an
earnings growth path in 2003. These businesses are underpinned by either
commercial or contractual annuity income streams and have enjoyed organic
growth from the domestic and international markets.
By order of the Board
Directors: J E Newbury (Non - Executive Chairman), A G Fletcher,
M M Ngoasheng, I G Morris (Managing).
Company Secretary: A W Browne
Date: 27/09/2002 07:00:02 AM Produced by the JSE SENS Department
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