| Tue 1 Oct 2002, 16:39 | | Sasani Limited - Audited Annual Financial Statemen |
|
Sasani Limited - Audited Annual Financial Statements for the Group
SASANI LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 1955/00259/06)
Share Code: SSA ISIN Code: ZAE000017851
("the Company" or "Group")
Audited Annual Financial Statement for the Group for the year ended 30
June 2002
Note Consolidated Company
2002 2001 2002 2001
R`000 R`000 R`000 R`000
Revenue 237,058 303,221 0
Cost of Sales (103,384) (111,787) 0
Gross profit 133,674 191,434 0 0
Operating expenses (125,730) (179,483) 125 1,035
Operating Profit of 936
Associate
Operating profit before 8,880 11,951 125 1,035
exceptional items
Exceptional items 2 (4,809) (1,958) 3,860 0
Exceptional items
Attributable to Associate (1,695) 0
Operating profit 2,376 9,993 3,985 1,035
Net interest (paid)/received (1,720) (5,621) (490) 194
Net profit before taxation 656 4,372 3,495 1,229
Taxation (91) (586) (198)
Taxation Attributable to
Associate (430)
Net profit after taxation 135 3,786 3,495 1,031
Outside shareholders`
interest (613) (4,666) 0
Net (Loss) / profit
attributable to ordinary
shareholders (478) (880) 3,495 1,031
Earnings per ordinary share
(cents)
Headline earnings 1
13.9 14.0
Earnings attributable to 1
ordinary shareholders -0.7 -1.3
SASANI LIMITED and its subsidiaries
BALANCE SHEETS at 30 June 2002
Consolidated Company
2002 2001 2002 2001
R`000 R`000 R`000 R`000
ASSETS
Non-current assets
Property, plant and equipment
81,798 94,075 - -
Investments and loans
3,799 4,179 141 429
Investment in associate
(4,336) (3,147) - -
Trademarks and copyrights
50,713 65,409 - -
Deferred taxation
444 1,858 - -
Interest in Subsidiaries
- - 115,148 123,106
Joint ventures
- - - -
132,418 162,374 115,289 123,535
Current assets
Inventories
5,430 5,024 - -
Accounts receivable
36,000 43,159 11 695
Intragroup receivables
- 4,823
Bank and cash balances
30,620 25,622 10,171 4,027
72,050 73,805 15,005 5,249
Total assets
204,468 236,179 130,294 128,784
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 111,818 111,818 111,818 111,818
Non-distributable reserves 225 225 225 225
Retained income 40,996 41,474 10,538 7,043
Shareholders` Funds 153,039 153,517 122,581 119,086
Non-current liabilities
Outside shareholders` interests
in subsidiaries 0 1,470 0 0
Long-term liabilities 12,833 19,960 0 0
Deferred taxation 5,002 7,339 0 0
17,835 28,769 0 0
Current liabilities
Accounts payable and provisions 25,099 32,029 84 268
Intragroup payables 0 0 47 0
Taxation 661 5,146 24 430
Bank overdrafts 0 92 0 0
Dividends to minorities 0 647 0 0
Short term liabiities 7,834 15,979 7,558 9,000
33,594 53,893 7,713 9,698
Total equity and liabilities 204,468 236,179 130,294 128,784
Net asset value per share (cents)
Including intangible assets
232.7 233.4
Excluding intangible assets
155.6 134.0
SASANI LIMITED and its subsidiaries
CASH FLOW STATEMENTS for the year ended 30 June 2002
Consolidated Company
2002 2001 2002 2001
R`000 R`000 R`000 R`000
Cash flow from operating
activities
Cash receipts from customers 244,217 336,601
Cash paid to suppliers and (203,257) (277,255)
employees
Cash generated from/(utilised in) 40,960 59,346 6,084 (25,573)
trading activities
Interest received 1,807 3,675 43 265
Interest paid (3,527) (9,296) (533) (71)
Taxation paid (4,178) (3,127) (406) 0
Cash flow from operations 35,062 50,598 5,188 (25,379)
Dividends received 0 1,489
Dividends paid (6,642) 0
35,062 43,956 5,188 (23,890)
Cash flow from investing
activities
Fixed assets acquired to expand
operations (20,563) (39,669) 0 0
Proceeds on disposals of fixed
assets 2,699 1,237 0 0
Net receipts/(payments) for
businesses 5,101 18,407 5,101 18,752
Loans from/(to) subsidiaries and
joint ventures 0 17,159
Other investments 1,569 (246) 803 1,763
(11,194) (20,271) 5,904 37,674
Cash injected from financing
activities
(Decrease)/increase in short term
loans (8,145) (3,852) (1,442) (8,000)
Long term advances net of
repayments (7,127) 10,613 0 0
Loans from outside shareholders 0 (433) 0 0
(15,272) 6,328 (1,442) (8,000)
Net increase/(decrease) in cash
and cash equivalents 8,596 30,013 9,650 5,784
Cash and cash equivalents at the
beginning of the year 25,530 5,106 4,027 (1,757)
Cash and cash equivalents of
businesses sold (3,506) (9,589) (3,506) 0
Cash and cash equivalents at the
end of the year 30,620 25,530 10,171 4,027
Cash flow per share (cents) 53.3 38.8
SASANI LIMITED and its subsidiaries
STATEMENT OF CHANGES IN EQUITY for the year ended 30 June 2002
Consolidated Company
2002 2001 2002 2001
R`000 R`000 R`000 R`000
SHARE CAPITAL
Ordinary shares
Balance at beginning of the year 111,818 111,818 111,818 111,818
Reclassification (111,160) 0 (111,160) 0
Balance at end of the year 658 111,818 658 111,818
Share premium
At beginning of the year 0 0 0 0
Share premium reclassified, 111,160 0 111,160 0
change in Par Value
At end of the year 111,160 0 111,160 0
Total Share capital at end of the
year 111,818 111,818 111,818 111,818
Non-distributable Reserves
At beginning and end of the year 225 225 225 225
Retained earnings
At beginning of the year 41,474 36,253 7,043 6,012
Net (loss)/profit for the year (478) (880) 3,495 1,031
Minorities share of Goodwill of
associate previously written off 0 6,101 0
At end of the year 40,996 41,474 10,538 7,043
Total ordinary shareholders`
interest 153,039 153,517 122,581 119,086
Notes
Note 1
Earnings per ordinary share
The calculation of the earnings per ordinary share is based on the
consolidated (loss) / earnings attributable to ordinary shareholders of
(R478 000) (2001: (R880 000)) and a weighted average of 65,775,500 (2001:
65,775,500) ordinary shares in issue.
The calculation of the headline earnings per share is based on earning of
R 9 140 000 (2001: R 9 205 000) and a weighted average of 65,775,500
(2001: 65,775,500) ordinary shares in issue.
Reconciliation between earnings and headline earnings:
Operating Taxation Outside Attributable Attributable
profit shareholders` income income
interest
2,002 2,002 2,002 2,002 2,001
R`000 R`000 R`000 R`000 R`000
Per the financial 656 (521) (613) (478) (880)
statements
Adjustments:
Amortisation of 7,832 0 0 7,832 10,085
trademarks
Capital profit 521 0 0 521 0
on sale of
businesses /
Investement write
backs /
impairments
Loss / 1,807 (542) 0 1,265 0
scrapping of
assets /
impirment
Headline earnings 10,816 (1,063) (613) 9,140 9,205
Headline earnings adjustments are not made for profits or losses arising
on the realisation of equipment acquired for purposes of hire and
subsequent disposal in the ordinary course of facility and equipment
rental business.
Note 2
Exceptional items
Consolidated Company
2002 2001 2002 2001
R`000 R`000 R`000 R`000
Capital (loss)/profit on (521) 3,620 0
sale of business /
investments / investment
writedowns
Loss / scrapping of assets (1,808)
Rationalisation Costs (2,480) (1,958) 240 0
As per income statement (4,809) (1,958) 3,860 0
Tax effect 1,286 (72)
(3,523) (1,958) 3,788 0
Note 3
Sasani Limited herewith presents the Audited results of the group for the
year ended 30 June 2002. The results have been prepared in compliance with
the South African Statement of Generally Accepted Accounting Practice
(GAAP) in South Africa and are consistent with the accounting policies
applied in the prior year.
The accounts were audited by PricewaterhouseCoopers Inc and the report is
available for inspection at the companies registered address.
Directors` report
The year to end June 2002 was one of consolidation for the Sasani Group.
Non-core businesses were sold and remaining companies re-focused into
Sasani`s key area of expertise - the provision of facilities and services
to support the broader film industry.
From a trading perspective - Sasani continued to generate significant cash
from its operations. Profits, however, remained disappointing,
particularly in terms of the return on capital and return on assets
Looking forward, the business seems well positioned to better leverage the
significant opportunities opening up to the film industry in South Africa.
There has been a significant rearrangement of the management team and
there is a positive and enthusiastic approach to these opportunities.
From an industry perspective, prospects would seem to be quite varied
depending on whether the perspective is local or international. On the
local front, commercial production, features and television commissions
remain flat. More and more commercials are being globally produced and
then dubbed into multiple languages for use in different countries around
the world. At the same time, the proliferation of channels and resultant
reduced ARs have resulted in commercials budgets being systematically
reduced.
In the area of television production, local broadcasters remain under
significant pressure. As a result, less new work is being commissioned
and production budgets continue to be under pressure.
In contrast, the international opportunities are already significant and
seem likely to grow further. The Western Cape is now firmly established
as one of the premier filming locations for international commercials and
South Africa is attracting significant interest for foreign feature film
production.
The continued devaluation of the rand, together with the benefits of an
established industry, excellent and diverse locations, and good climate,
are some of the major reasons supporting this renewed interest.
For Sasani, the prospect of increased foreign feature film work is
particularly important. The benefit to Sasani coming out of foreign
commercials made in the Cape is typically limited to rental of cameras and
lighting equipment and negative processing. The majority of post-
production work is done overseas.
Foreign feature work, in contrast, generally utilizes a much greater range
of Sasani facilities and our ability to position South Africa as an
attractive film destination will significantly affect Sasani`s future
prospects. Previous initiatives to increase the availability of funding
support and to develop co-production treaties have not resulted in much
success and these areas will need concerted focus in the future.
While there may be some further consolidation and re-arrangement in the
current areas of operation, Sasani is not expected to acquire new
operations or divest itself of existing ones in the immediate future.
The current focus is very specifically around the film industry and
includes the following :-
* Rental of cameras, lighting and associated equipment
* Rental of studios for television and commercial production
* Film processing
* Post production editing, animation and special effects
Each of these areas are briefly covered below:
Rentals:- The Movie Camera Company Logical Designs (Pty) Limited (MCC
Logical) (Johannesburg and Cape Town)
MCC is the rental business of Sasani providing cameras, lighting and
associated equipment. MCC operates out of Johannesburg and Cape Town and
has been through a very difficult period for the past 2 years.
This was partially as a result of a former key employee and director
starting up in opposition to MCC Logical in the key Cape region and
partially as a result of the general proliferation of competition in the
rentals business.
MCC also holds the important Kodak agency for the provision of film stock
into the film industry into South Africa.
Post- production, editing, animation, special effects and audio:-
The Video Lab (Johannesburg and Cape Town)
The Video Lab is the largest provider of post production services in South
Africa. This includes editing, animation, special effects and audio
recording.
Historically, The Video Lab`s primary business was in support of the local
commercial business. In the Cape, the processing and transfer of
negative on international commercials is an important part of The Video
Lab`s business. The balance of business in both Johannesburg and Cape
Town is made up of television and feature work.
Over the last few years, this business has been affected by the move to
cheaper digital technologies. While The Video Lab remains well
positioned at the leading edge, a multitude of small entrepreneurs has
emerged. Using simple desktop computer hardware, these new entrants
continue to erode market share in the less sophisticated bottom end of the
post-production area.
ZSE
ZSE is a division that provides a one-stop shop for post production and
sound facilities. It includes small studios, control rooms and
broadcasting capability and focuses largely on the bottom end of the
market. ZSE is almost totally reliant on work derived out of the local
market and has, as a result, been most negatively affected by the
difficult conditions in this market
The Film Labs (Johannesburg and Cape Town)
Sasani currently owns the only two processing laboratories in Southern
Africa. These continue to process almost all the 35mm and 16mm film stock
shot in the region. The increase in foreign commercial and feature
activity in the region has seen a continuous and quite significant
increase in film footage over the past few years.
In addition, positive reproduction equipment is available in the
Johannesburg Laboratory. This laboratory prints some of the features for
the SA market as well as the commercials used in theatres at the start of
a movie. The latter market is being eroded through the use of secondary
digital projectors for commercial projection. These are currently in use
at 60 out of the 1100 screens in South Africa.
Sasani Studios (Johannesburg and Cape Town)
Sasani currently controls and manages 8 studios with a combined floor
space of 4000m2. These are rented out for television productions and on
occasion, for commercial shoots.
Currently, the main productions using Sasani Studios are "Egoli" (M-Net),
"The Breakfast Show", (e-tv) and "Sesame Street" (SABC). "Backstage" (e-
tv), was moved from the Cape Town facility in early 2002 to Global Access
in which Sasani holds an effective 30% interest.
As a result of the roof height and size of the current Sasani Studios,
they are not suitable for major feature film work. This is currently the
topic of much discussion as it is broadly felt that the availability of a
suitable soundstage would significantly increase South Africa`s
attractiveness as a feature film production destination.
Global Access (Pty) Limited
Sasani has an effective 30% stake in Global Access. Global Access is
primarily focused on corporate broadcasting. In addition, it manages
studios in the old Broadcast House building in Johannesburg.
During the year to end June 2002, Global Access incurred a once-off
exceptional loss of R5.9 million. This resulted from the discontinuance
of the QTV network operation and the disposal of the related assets to
ABSA. The effect of this on Sasani`s earnings before tax amounted to
R1.69m.
The company is expected to revert to its normal performance levels in the
coming year.
Date: 01/10/2002 04:08:00 PM Produced by the JSE SENS Department
