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RENTSURE HOLDINGS LIMITED
RESULTS AND CAUTIONARY ANNOUNCEMENT
For the year ended 30 June 2002
Rentsure Holdings Limited Reg no 1946/023539/06
CONSOLIDATED INCOME STATEMENT
2002 2001
R000 R000
for the year ended 30 June Audited Audited
Net premium income 244 526 249 238
Recurring premiums 242 794 243 628
Single premiums 1 732 5 610
Investment income 18 449 30 799
Income 262 975 280 037
Commission 46 951 49 535
Marketing, sales and
administration expenses 96 468 94 805
Taxation 2 400 1 946
Outgo 145 819 146 286
Excess of income
over outgo 117 156 133 751
Claims and policy-
holder benefits (127 588) (131 068)
Transfer (to)/from life
assurance fund (14 850) 6 119
(Loss)/profit on ordinary
activities after taxation (25 282) 8 802
Outside shareholders` interest 6 437 (3 276)
(Headline loss)/earnings
for the year (18 845) 5 526
Amortisation of goodwill (719) (568)
Net (loss)/profit (19 564) 4 958
Net (loss)/profit (19 564) 4 958
(Loss)/earnings per share (cents) (48,4) 12,3
Headline (loss)/earnings (18 845) 5 526
Headline (loss)/earnings
per share (cents) (46,6) 13,7
Dividends per share (cents) - 2,25
Calculated on number of
shares issued (000) 40 438 40 438
CONSOLIDATED CASH FLOW STATEMENT
2002 2001
R000 R000
for the year ended 30 June Audited Audited
Cash retained from operations 45 29 531
Cash from clients 244 526 249 238
Cash paid to suppliers
and employees (271 007) (262 072)
Cash utilised in operations (26 481) (12 834)
Increase in current assets 13 260 15 750
Investment income 18 449 26 953
5 228 29 869
Taxation paid (5 183) (338)
Net cash flow from
investment activities 10 130 (23 164)
Acquisition of property
and equipment 10 701 (14 164)
Increase in investments (2 343) (11 972)
Proceeds on disposal of assets 1 772 2 972
Net cash flow from
financing activities (208) (10 551)
Long-term borrowings 51 (959)
Short-term borrowings (379) (1 152)
Amounts due to bankers 1 290 (6 115)
Dividends paid (910) (2 325)
Outside shareholders (260) -
Net increase in cash 9 967 (4 184)
Cash at the beginning of the year 31 814 35 998
Cash at the end of the year 41 781 31 814
CONSOLIDATED BALANCE SHEET
2002 2001
R000 R000
at 30 June Audited Audited
ASSETS
Non-current assets 260 335 276 498
Investments 108 323 105 980
Fixed property, machinery
and equipment 141 930 159 716
Cost of control arising
on consolidation 10 082 10 802
Current assets 133 160 130 609
Inventories 30 082 24 974
Debtors and deposits 61 297 73 821
Cash 41 781 31 814
Total assets 393 495 407 107
EQUITY AND LIABILITIES
Capital and reserves 68 670 94 930
Share capital 8 394 8 394
Non-distributable reserves 19 272 19 272
Distributable reserve 359 359
Retained income 18 317 37 881
Shareholders` funds 46 342 65 906
Minority shareholders` interest 22 328 29 024
Non-current liabilities 249 829 241 153
Life assurance fund 246 959 238 334
Long-term liabilities 2 870 2 819
Current liabilities 74 996 71 024
Short-term loans 455 834
Amounts due to bankers 4 985 3 695
Creditors and provisions 69 154 63 310
Taxation 402 3 185
Total equity and liabilities 393 495 407 107
Net asset value per
share (cents) 114,6 163,0
Net tangible asset value
per share (cents) 89,7 136,3
Calculated on number of
shares issued (000) 40 438 40 438
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
2002 2001
R000 R000
for the year ended 30 June Audited Audited
Shareholders` funds at the
beginning of the year 65 906 61 858
Changes in retained income (19 564) 4 048
Net (loss)/profit for the year (19 564) 4 958
Dividends - (910)
Shareholders` funds at the
end of the year 46 342 65 906
COMMENT ON RESULTS
- Rentmeester Assurance
Limited ("Rentmeester")
During the period under review, shareholders were kept informed of all
developments regarding the proposed merger with Assupol and the eventual
termination thereof.
The termination of the proposed merger resulted in a material decline in new
individual business written by Rentmeester and causing cost overruns. The
decline in new individual business written was as a result of:
* the termination of certain Rentmeester products;
* the rationalisation of the branch network in anticipation of attaining certain
merger benefits;
* the disruption caused by having to separate certain branches (that had been
combined with Assupol branches) on termination of the proposed merger; and
* the immediate departure of the Assupol management who had been tasked with
general management and distribution responsibilities.
Although premium income from group business showed strong growth, the losses
were mainly incurred due to the decline in individual new business written
during the period and due to a write down in the property values of R12,656
million due to changed market conditions.
- Alnet
During the period under review, Alnet returned to profitability and it is
expected that profitability will further increase in the future.
- Property transaction
Shareholders are referred to the detailed announcement dated 25 September 2002
relating to the agreement that has been concluded between Rentsure`s subsidiary,
Rentmeester and Daisy Street Investments 127 (Pty) Ltd ("Daisy Street") in terms
of which certain of Rentmeester`s properties are to be disposed of to Daisy
Street. This transaction is aimed at improving the asset spread of Rentmeester
and should also result in improved returns.
A circular will be sent to shareholders in due course.
PROSPECTS AND CAUTIONARY ANNOUNCEMENT
Since the termination of the proposed merger, management has taken steps to
restore its operations to profitability.
These steps included:
* the stabilisation of the branch network;
* the development of new products, including electronic quotation products;
* renewed focus on group schemes; and
* restructuring that resulted in personnel retrenchments and associated cost
reductions.
It is envisaged that the implementation of a business plan, developed in
conjunction with the actuaries, will restore Rentmeester to profitability.
The losses discussed above have however placed a strain on the capital
requirements of the company and the directors are exploring alternatives in
order to remedy the situation, which may have a material effect on the price at
which Rentsure shares trade on the JSE Securities Exchange South Africa. As a
result of this shareholders are advised to exercise caution when dealing in
their Rentsure shares until a further announcement is made.
ACCOUNTING POLICIES
The audited results for the year ended 30 June 2002 have been prepared using
accounting policies, which are in conformity with Statements of Generally
Accepted Accounting Practice in South Africa and consistent with those policies
applied in the prior year.
AUDITOR`S REPORT
Jan Erasmus Auditors have audited the group annual financial statements. Their
unqualified audit report is available for inspection at the company`s registered
office.
DIVIDENDS
No dividends were declared for the period.
ANNUAL FINANCIAL STATEMENTS
The annual financial statements for the year ended 30 June 2002, including a
notice
to the annual general meeting, will be posted to shareholders by no later than
13 December 2002.
On behalf of the board
J Vermooten
(Chairman)
11 October 2002
Rentsure Holdings Limited
Registration number 1946/023539/06 ("Rentsure" or "the company")
Share code RNT ISIN number ZAE 000012811
Registered office
106W Rentmeester Park 74 Watermeyer Street Val de Grace Pretoria 0184
Transfer secretaries
Computershare Investor Services Limited 70 Marshall Street Johannesburg 2001
Directors
Joachim Vermooten (Chairman) Johannes Vermooten Dr MI Vermooten
Prof Q Vorster
R de Kock (Company Secretary)
Date: 11/10/2002 04:27:00 PM Produced by the JSE SENS Department
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