| Mon 7 Oct 2002, 14:25 | | Cycad Financial Holdings Limited - Group Audited R |
|
Cycad Financial Holdings Limited - Group Audited Results for the year ended 30
June 2002
Cycad Financial Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/008637/06)
JSE Share code: CYD ISIN: ZAE000017729)
("Cycad" or "the group")
GROUP AUDITED RESULTS for the year ended 30 June 2002
NET ASSET VALUE PER SHARE (Cents)
Pro forma
Post rights
Audited issue Audited
2002 2001 2001
Notes R`000 R`000 R`000
Net asset value adjusted for
2001 post balance sheet
investment provision 17,5 24 58
The calculation of net asset values
per share is based on the following:
Net asset value prior to
rights issue 1.3/1.4 51 163 53 343 53 343
Net cash generated by
rights issue 2.4 - 17 103 -
Net asset value 51 163 70 446 53 343
No. of shares in issue (`000) 1.1 291 796 291 796 91 796
Note: The pro forma 2001 comparative figures have been adjusted to take into
account the cash raised by the rights issue and the 2001 post balance sheet
investment provision. The audited 2001 comparative figures have been adjusted to
include the 2001 post balance sheet investment provision (note 1.3).
GROUP BALANCE SHEETS
Audited Audited
2002 2001
Notes (R`000) (R`000)
Assets
Non-current assets
Investments 62 200 29 587
Associate companies 2.2 - 40 963
Goodwill 2.2 - 45 381
Total investment portfolio 62 200 115 931
Current assets
Cash and short term deposits 7 278 -
Net other assets 1 708 748
64 186 116 679
Capital, reserves and liabilities
Shareholders` funds 51 163 100 326
Interest bearing non-current liabilities 3 186 4 581
Provisions - 294
Current liabilities 9 837 11 478
- Bank overdraft - 2 530
- Interest bearing (other) 8 830 7 897
- Non-interest bearing 1 007 1 051
64 186 116 679
GROUP INCOME STATEMENTS
Audited Audited
2002 2001
Notes (R`000) (R`000)
Net interest paid (3 094) (387)
Net operating costs 1.6 (5 062) (6 014)
Loss on disposal of subsidiary company 1.6 (1 392) -
Amounts written off investments (56 718) (37 440)
- September 2001 post balance sheet
investment provision 1.2/1.3 (53 343) -
- Net current year write-downs 1.4 (3 375) (37 440)
Loss before and after taxation (66 266) (43 841)
Share of retained income from
associate companies 2.2 - 142
Attributable loss (66 266) (43 699)
Attributable loss per ordinary share (cents) 1.3 (49) (62)
Headline loss per ordinary share (cents) 1.3 (48) (62)
Note: The headline loss per share excluding
the September 2001 post balance sheet
provision is 10 cents per share.
The calculation of attributable and headline
loss per share is based on the following:
Attributable loss (66 266) (43 699)
Add: Loss on disposal of subsidiary company 1 392 -
Headline loss (64 874) (43 699)
Weighted average number of shares in issue (`000) 135 084 70 060
STATEMENT OF CHANGES IN EQUITY
Non-
Preference distri- Accu-
Share Share share butable mulated
Capital premium capital reserve loss Total
Balance at
1 July 2001 918 148 887 1 1 390 (50 870) 100 326
Shares issued at
10 cents per share
on 12 April 2002
(note 1.1) 2 000 18 000 20 000
Share issue expenses
written-off against
share premium (2 897) (2 897)
Equity accounted
earnings transferred
to retained earnings
(note 2.2) (1 390) 1 390 -
Loss for the year
after taxation (66 266) (66 266)
Balance at
30 June 2002 2 918 163 990 1 - (115 746) 51 163
GROUP CASH FLOW MOVEMENTS
Audited Audited
2002 2001
(R`000) (R`000)
Cash generated by rights issue 20 000 -
(Decrease)/Increase in long-term borrowings (1 395) 2 859
Cash (utilised)/generated by operations and
short-term funding (8 171) 2 148
Net cash invested (4 729) (21 129)
Loss on disposal of subsidiary and restructuring
amounts paid (1 748) -
Acquisition of investments (2 981) (21 015)
Net acquisition of fixed assets - (114)
Options redeemed - (140)
Share issue expenses written-off against share
premium (2 897) (203)
Balance at beginning of year (2 530) 13 935
Balance at end of year 278 (2 530)
COMMENTARY
1. Overview
1.1 A rights issue was completed in April 2002 which raised R20 million
through the issue of a further 200 million ordinary shares at 10 cents each. The
proceeds were utilised to reduce borrowings, to meet investment commitments to
the portfolio companies and to finance operations.
1.2 The group`s investment focus is in the technology sector which has
generally experienced a material downturn in value.
1.3 In finalising the financial statements at 30 June 2001, and after the
events of 11 September 2001, a post balance sheet provision of 50% of the value
of the investments was created amounting to R53 million to reflect a value shift
in markets. This provision has been justified by the continued deterioration in
world market values and has thus now been applied to specific investments. This
provision was reported on as part of the net asset value calculation in the
financial statements at 30 June 2001 but it was not included in the accounts as
it was a post balance sheet event. The provision was reflected in the interim
results at 31 December 2001.
1.4 A further net R3,4 million has also been provided against certain
investments in the current year. The reduction in net asset value of 27% in
relation to the "Post Rights Issue" net asset value for 2001, can be benchmarked
against a 64% decline in the JSE Securities Exhange South Africa technology
sector over the same period and reflects the significant downturn in IT business
market values.
1.5 The substance of the net asset value is underpinned by sound performance
from the investments in Absolute Systems and Coresource, as well as the
Securities Regulation Panel`s ruling relating to EC-Hold Limited in which 5
million shares are held.
1.6 At the time of the rights issue, Cycad`s management acquired the group`s
management company, assumed its liabilities and entered into an agreement to
manage its investments. This has resulted in the capping of group costs. The
full benefits of the associated cost savings are expected to be reflected in the
financial year ending 30 June 2003.
2. Accounting
2.1 These summarised financial statements are prepared in accordance with the
group`s accounting policies which comply in all material respects with South
African Statements of Generally Accepted Accounting Practice. As the group is
now in the realisation phase of its investments, the associate companies have
been accounted for in terms of Accounting Standard AC133, and not in terms of
Accounting Standard AC110 (Accounting for investments in associate companies) as
in prior reporting periods. AC133 has thus been adopted prior to the statement
becoming effective.
2.2 The classification of the associate companies as investments has resulted
in goodwill being capitalised to the cost of the related investments (prior to
the determination of their fair values) and prior years` equity accounted
earnings being reversed to retained income. Had the group equity accounted its
share of retained earnings for the current year, equity accounted earning of
approximately R2,5 million would have been reflected in the Income Statement.
2.3 The directors` valuations are comprehensively reviewed every six months
in accordance with the group`s accounting policies whereby investments are
valued at cost for the first two reporting periods during which they are held
(with provision being made for any permanent impairment of value) and thereafter
they are revalued to fair value.
2.4 The "Post Rights Issue" net asset value for 2001 was calculated taking
the cash raised in the rights issue in April 2002 (note 1.1) into account.
2.5 No taxation has been provided for, as the group has accumulated tax
losses.
3. Capital Commitments
At the date of this announcement, the group had potential investment
commitments of R590 000 (2001: R3 250 000).
4. Dividends
No dividend was declared or paid during the year.
5. Directorate
Following the restructuring of Cycad the constitution of the board has
changed. Messrs. Parker, Cohen and Cachalia resigned since the interim results
announcement and are thanked for their contribution.
6. Report of the independent auditors
The Annual Financial Statements have been audited by Fisher Hoffman PKF
(Jhb) Inc. and their unqualified audit report is available for inspection at
Cycad`s registered office.
7. Prospects
Cycad is now a closed-end fund, seeking to deliver value to shareholders
by realising the investment portfolio over the next two years. The group`s
working capital requirements have been reduced by the restructuring discussed
above. In the future the group will generate cash through asset realisation and
in the short term the fund managers have made arrangements for banking
facilities.
By order of the board
L H Fine L Klaff
Executive Chairman Executive
Johannesburg
7 October 2002
Transfer secretaries: Registered office:
Computershare Investor Services Limited 15 Girton Road
70 Marshall Street Parktown 2193
Johannesburg, 2001 Tel: (011) 507-2000
(PO Box 1053, Johannesburg, 2000) Fax: (011) 507-2004
email: cycadfinhold@cycadfinhold.co.za Website: www.cycadfinhold.co.za
Directors:
L H Fine (Executive Chairman), A J Frost* (alt. L Klaff),
J M Kahn*, W Y N Luhabe*, P G Joubert*
*Non-executive
Date: 07/10/2002 11:30:16 AM Produced by the JSE SENS Department
