| Thu 7 Nov 2002, 17:21 | | African Harvest Limited - Reviewed Results For The |
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African Harvest Limited - Reviewed results for the year ended 30 September 2002
African Harvest Limited
Registration number 1997/013827/06
JSE share code: AHV
ISIN number: ZAE000013538
African Harvest Limited posts positive earnings
Background
African Harvest Limited (African Harvest) was listed on the JSE Securities
Exchange South Africa on 1 October 1997. Over the past 5 years African Harvest
has established itself as a credible financial services company with solid fund
management and investment banking businesses.
In May 2002 Business Venture Investments no. 674 (Pty) Ltd (BVI), a company
representing the interests of a consortium, which included Mzi Khumalo and
certain members of African Harvest management, made an offer for the businesses
and a substantial portion of the net assets of African Harvest. A comprehensive
evaluation of the offer was undertaken resulting in a decision, for the
following reasons, that the sale was in the best interests of the company and
its shareholders:
* The company had been negatively affected by speculation concerning the
commitment of its key shareholders and the stability of its staff. The long-term
viability of the company`s business required a clear message regarding a
committed majority empowerment shareholder and a stable staff base. This was
unlikely to be achieved where Coronation Holdings, which had competing
interests, remained as the majority shareholder and where there was little or no
opportunity of introducing meaningful levels of staff ownership at realistic
prices;
* The company`s ability to grow its business and to provide acceptable returns
to shareholders was heavily dependent on its empowerment credentials. This was
unattainable while it was controlled by a non-empowerment shareholder; and
* The returns provided to shareholders over the last 18 months had been poor,
due primarily to a number of large asset impairment charges and difficult market
conditions. To address these issues, African Harvest withdrew from a number of
markets and returned R282 million of capital to shareholders in February 2002.
Despite the return of capital, the company remained over-capitalised, however, a
further return of capital would have reduced African Harvest to a size which was
more appropriate to a private entity than a listed public company.
The sale by African Harvest of its businesses (excluding certain retained assets
and certain retained liabilities) as a going concern to BVI was approved by a
majority of shareholders on 16 September 2002. The assets sold included the
rights to the name "African Harvest" but excluded a number of liquid investments
and certain strategic investments including Namibian Harvest, Optivest and
Finsource.
African Harvest will issue a circular to shareholders in due course recommending
that its name be changed from African Harvest Limited to Nantas Investments
Limited. As this name change has not been approved by shareholders, the company
is still listed as African Harvest Limited and these results have been issued
under that name.
Results
Consolidated financial statements for African Harvest and its subsidiaries at 30
September 2002 have not been presented as African Harvest disposed of its
subsidiary companies and the majority of its net assets on 17 September 2002.
Commentary on the key aspects of the 2002 financial statements is set out below.
The results of the company for the current year differ to those of the prior
year as a result of the decision to withdraw from the private equity market, to
dispose of certain strategic investments and to significantly reduce expenses,
as described in the interim announcement, and the decision to dispose of the
company`s businesses and certain net assets.
Net operating income of R12,5 million for the year represents a significant
improvement over the loss in the prior period. While total income decreased, the
improvement in net income was achieved as a result of significantly reduced
expenditure.
The company made a substantial capital surplus on the disposal of its businesses
and certain net assets. A significant portion of this surplus arose as the
company had previously carried its subsidiary companies at historical cost. Had
group financial statements been prepared at the date of sale, the African
Harvest group surplus on the sale would have been R88 million.
The impairment of non-trading investments of R40,7 million was primarily as a
result of a decision in March 2002 to re-evaluate and to write down the values
of certain of these investments. This was announced in a trading update in March
2002.
Dividend
No dividend has been declared during the year (2001: nil).
Accounting policies
The financial results are prepared in accordance with South African Statements
of Generally Accepted Accounting Practice applicable to interim financial
reporting. The accounting policies applied in the financial statements are
consistent with those applied in the previous year.
Prospects
Steps are being taken to realise the strategic investments retained by the
company, where possible, and to manage the risks retained by the company on
disposal of its businesses.
The board is considering various options regarding the strategic direction of
the company and appropriate information in this regard will be provided to
shareholders in due course.
Review by auditors
The company`s auditors, Deloitte & Touche, have reviewed the results reflected
below. Their unqualified review opinion is available on request from the Company
Secretary.
Cape Town
7 November 2002
Registered office and postal address
Coronation House, The Oval, 1 Oakdale Road, Newlands 7700
PO Box 23796, Claremont 7735
Tel: 27 21 683 3829 Fax: 27 21 683 3892
Transfer secretaries
Computershare Services Limited, 11 Diagonal Street, Johannesburg 2001
Directors
G R Tipper (Chairman), C B Brayshaw, M E Ramano
Company secretary
C Barnes
Balance Sheet
at 30 September 2002
Company
Reviewed Audited
2002 2001
R`000 R`000
Assets
Plant and equipment - 2 328
Investment in subsidiaries - 293 869
Non-trading investments 100 413 208 025
Non-current assets 100 413 504 222
Money market investments 429 427 226 004
Other receivables 12 127 19 554
Funds on call and deposit 138 324 37 543
Current assets 579 878 283 101
Total assets 680 291 787 323
Equity and liabilities
Ordinary shareholders` funds 615 043 701 037
Long-term liabilities 41 344 32 642
Deferred taxation 9 152 9 443
Non-current liabilities 50 496 42 085
Other short-term liabilities 9 996 42 083
Taxation owing 2 985 284
Bank overdraft - 263
Distributions to shareholders 1 771 1 571
Current liabilities 14 752 44 201
Total equity and liabilities 680 291 787 323
Income statement
for the year ended 30 September 2002
Company
Reviewed Audited
2002 2001
R`000 R`000
Fee income 4 925 14 545
Investment income 886 4 429
Net interest income 26 783 23 521
Other income 2 702 7 051
Total income 35 296 49 546
Operating expenses 22 814 66 535
Net operating income/(loss) 12 482 (16 989)
Surplus on disposal of subsidiaries and certain 229 059 -
net assets
Impairment of non-trading investments (40 678) (5 888)
Net income/(loss) before taxation 200 863 (22 877)
Taxation 5 263 (3 024)
Net income/(loss) attributable to shareholders 195 600 (19 853)
Number of shares in issue (`000) 281 872 280 762
Weighted average number of shares in issue (`000) 281 631 280 590
cents cents
Attributable earnings/(loss) per share 69,5 (7,1)
Adjustments for:
- Surplus on disposal of subsidiaries and certain (81,3) -
net assets
- Impairment of non-trading investments 14,4 2,1
Headline earnings/(loss) per share 2,6 (5,0)
NAV per share 218,2 249,7
Abridged cash flow statement
for the year ended 30 September 2002
Company
Reviewed Audited
2002 2001
R`000 R`000
Net cash applied to operating activities (24 348) (56 289)
Net cash generated by investing activities 610 210 131 464
Net cash applied to financing activities (281 (54 290)
395)
Net increase in cash and cash equivalents 304 467 20 885
Cash and cash equivalents at beginning of year 263 284 242 399
Cash and cash equivalents at end of year 567 751 263 284
Statement of changes in ordinary shareholders` funds
for the year ended 30 September 2002 (2002 - reviewed, 2001 - audited)
Company
Share Share Distribu- Total
capital premium table share-
reserves holders`
funds
R`000 R`000 R`000 R`000
Balance at 1 October 2000 70 029 264 196 386 503 720 728
Shares issued 162 - - 162
Net loss attributable to - - (19 853) (19 853)
ordinary shareholders
Balance at 30 September 2001 70 191 264 196 366 650 701 037
Shares issued 277 - - 277
Capital reduction of 100 cents - (264 (17 675) (281 871)
per share 196)
Net income attributable to - - 195 600 195 600
ordinary shareholders
Balance at 30 September 2002 70 468 - 544 575 615 043
Date: 07/11/2002 05:00:00 PM Produced by the JSE SENS Department
