| Wed 27 Nov 2002, 13:19 | | Sekunjalo Investments Limited - Final Audited Resu |
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August 2002
Sekunjalo Investments Limited
(Incorporated in the Republic of South Africa)
Registration number 1996/006093/06
Share Code: SKJ
ISIN: ZAE000017893
("Sekunjalo")
HIGHLIGHTS
- Group Headline Earnings R16 918m
- Group Turnover R346 013m
- Operating Profit R49 207m
- Headline EPS 19 cents
BALANCE SHEET AT 31 AUGUST 2002
GROUP
2002 2001
R`000 R`000
ASSETS
Non-current assets 140 925 131 858
Investment property 350 -
Property, plant and equipment 61 887 61 779
Deferred expenditure 2 509 3 040
Goodwill 7 859 5 932
Intangible assets 11 192 12 393
Pharmaceutical dossiers 30 600 32 300
Investments 12 741 9 720
Deferred taxation 7 494 1 098
Loans receivable 6 293 5 596
Current assets 162 516 114 630
Inventory 43 174 36 334
Contract work in progress - 7 227
Trade and other receivables 62 921 57 007
Cash and cash equivalents 56 421 14 062
TOTAL ASSETS 303 441 246 488
EQUITY AND LIABILITIES
Capital and reserves 21 700 4 779
Share capital 1 554 1 554
Share premium 126 283 126 283
Non-distributable reserves 39 39
Accumulated loss (106 176) (123 097)
Outside shareholders` interest 46 251 52 140
Non-current liabilities 88 879 84 089
Interest-bearing borrowings 88 430 83 455
Non-interest-bearing borrowings 449 634
Current liabilities 146 611 105 480
Trade and other payables 62 492 53 418
Shareholders for dividends 684 -
Current portion of long-term borrowings 28 805 25 802
Bank overdraft 40 592 20 066
Taxation 14 038 6 194
TOTAL EQUITY AND LIABILITIES 303 441 246 488
TOTAL ASSETS 303 441 246 488
- Continued operations 302 615 244 068
- Discontinued operations 826 2 420
TOTAL LIABILITIES 235 490 189 569
- Continued operations 232 958 187 016
- Discontinued operations 2 532 2 553
INCOME STATEMENT FOR THE YEAR ENDED
31 AUGUST 2002
GROUP
2002 2001
R`000 R`000
REVENUE 346 013 270 125
- continued operations 343 152 266 565
- discontinued operations 2 861 3 560
Cost of sales 186 569 150 472
- continued operations 185 572 149 299
- discontinued operations 997 1 173
GROSS PROFIT 159 444 119 653
Other operating income 20 192 7 589
- continued operations 20 103 7 589
- discontinued operations 89 -
Gross income 179 636 127 242
Administration, distribution and selling
expenses 130 429 108 941
- continued operations 127 278 106 427
- discontinued operations 3 151 2 514
PROFIT / (LOSS) FROM OPERATIONS 49 207 18 301
Loss on investments (continued operations) - 36 270
Finance cost 24 781 19 759
- continued operations 24 477 19 579
- discontinued operations 304 180
PROFIT / (LOSS) BEFORE TAXATION 24 426 (37 728)
Income taxation (expense) / gain (11 317) (1 307)
- continued operations (11 247) (1 377)
- discontinued operations (70) 70
PROFIT / (LOSS) AFTER TAXATION 13 109 (39 035)
Income from associates 4 219 50
Outside shareholders` interest (407) 26 751
NET PROFIT / (LOSS) FOR THE YEAR 16 921 (12 234)
TOTAL NET PROFIT / (LOSS) FOR THE YEAR 16 921 (12 234)
- Continued operations 18 493 (11 997)
- Discontinued operations (1 572) (237)
Weighted average number of shares 88 689 88 689
Headline earnings per share (cents) 19.07 0.21
Earnings / (loss) per share (cents) 19.08 (13.79)
Diluted earnings per share (cents) 18.68 (13.22)
Reconciliation of basic earnings to headline
earnings
Net profit/(loss) for the year 16 921 (12 234)
Amortisation of goodwill and dossiers 528 487
Amortisation and impairment of patents and
trademarks 718 -
Development costs written off 56 -
Profit on disposal of property, plant and
equipment (1 562) -
Loss on permanent dimunition of investment
property 35 -
Loss on write-off of investments 109 11 741
Software development costs written off 113 -
Start-up costs - 190
Headline earnings 16 918 184
ABRIDGED CASH FLOW STATEMENT FOR THE
YEAR ENDED 31 AUGUST 2002
GROUP
2002 2001
R`000 R`000
Cash flows from operating activities 32 372 48 819
- continued operations 32 462 49 635
- discontinued operations (90) (816)
Cash flows from investing activities (16 055) 4 121
- continued operations (16 262) 4 167
- discontinued operations 207 (46)
Cash flows from financing activities 5 516 (39 325)
- continued operations 5 070 (39 920)
- discontinued operations 446 595
Net increase/(decrease) in cash and cash
equivalents 21 833 13 615
Cash and cash equivalents at beginning of year (6 004) (19 619)
Cash and cash equivalents at end of year 15 829 (6 004)
STATEMENT OF CHANGES IN EQUITY FOR
THE YEAR ENDED 31 AUGUST 2002
Share Share Non- Accumulated Total
Capital premium distri- loss
butable
reserves
R`000 R`000 R`000 R`000 R`000
GROUP
Balance at
31 August 2000 1 554 126 283 39 (109 874) 18 002
Fundamental error - - - (402) (402)
Restated balance 1 554 126 283 39 (110 276) 17 600
Net loss from
ordinary activities - - - (12 234) (12 234)
Balance at
31 August 2001 1 554 126 283 39 (122 510) 5 366
Fundamental error - - - (587) (587)
Restated balance 1 554 126 283 39 (123 097) 4 779
Net profit from
ordinary activities - - - 16 921 16 921
Balance at
31 August 2002 1 554 126 283 39 (106 176) 21 700
OVERVIEW
This is the fourth year of Sekunjalo Investments Ltd`s (SIL) listing on the JSE
Securities Exchange South Africa (JSE). The restructuring
plan and growth model, implemented by the Group two years ago, has resulted in a
significant improvement in earnings for the year
under review.
Group Financial Overview
The results show a steady but significant improvement in the group`s
performance:
* Headline earnings for the group were R16,918 million (2001: R184 000)
* Group turnover: R346,013 million (2001: R270,125 million)
* Operating profit: R49,207 million (2001: R18,301 million)
* Headline Earnings per share of 19.07 cents ( 2001: 0.21 cents)
* Earnings per share of 19.08 cents (2001: -13,79 cents)
REVIEW OF INVESTMENTS
Sekunjalo Industrial Investments: Premier Fishing SA (Pty) Ltd
Premier Fishing is the only large major black controlled and managed fishing
company in South Africa. Under MD, Mohamed Kajee, the company has restructured,
resulting in greater operational efficiency and improved earnings.
The allocation of four-year rights has brought welcome stability to the
industry. Premier Fishing has been a significant beneficiary, due to its strong
BEE credentials. The four-year rights allocation, has facilitated further
capital investment and allowed the company to develop a long-term plan for a
sustainable approach to fishing resources. The company`s strong presence in
South and West Coast lobster contributed significantly to export income. The
depreciation of the Rand for most of the last financial year and premium export
prices contributed to the strong financial performance.
The company has a number of strong brands: South Atlantic Lobster as the export
brand, Redro and Pecks Anchovette fish spreads and Seagro organic fertiliser.
Premier Fishing is well positioned to continue with this strong performance due
to the following:
* The allocation of four-year rights;
* The global demand for lobster;
* The increased local demand for canned pilchards;
* The high global demand for fish meal;
* Growth in the fish spreads and organic fertiliser brands; and
* The consolidation of alliances in the industry.
Sustainability
Premier Fishing shares the commitment of government towards a sustainable
approach to fishing resources. The stringent manner in which government has
dealt with companies that illegally exceeded quotas, is positive. Of major
concern is the poaching of abalone, which has resulted in a significant
depletion of this resource. The company is committed to developing the abalone
resource and has invested in an abalone aquaculture farm.
Sekunjalo Health Care Ltd (SHC)
Sekunjalo Health Care, under the leadership of Dr Vincent Msibi, has experienced
challenging times. The health care environment remains a highly competitive one,
due to the dominance of a few major companies. While SHC remains one of the
largest black health care companies in the country, the reluctance of financial
institutions to support black health care companies has limited its growth. This
has affected the ability of SHC to compete effectively in the marketplace with
established health care companies.
Sekpharma (Pty) Ltd
Sekpharma (Pty) Ltd is the pharmaceutical subsidiary of SHC. Its product range
includes well-known dermatological brands such as Dermovate and Betnovate,
asthma medication such as Becotide, Becloforte, Volmax as well as anti-
microbials such as Fortnum.
Sekpharma continues to build on its relationship with multinational
pharmaceutical companies as part of an aggressive expansion strategy aimed at
gaining significant market share in future. The acquisition of 17 pharmaceutical
dossiers from Glaxo Smith Kline has given the company a solid base from which to
grow its pharmaceutical business.
Promex (Pty) Ltd
Promex, one of the largest manufacturers of syringes and needles on the African
continent, remains the dominant supplier to government. Promex is the market
leader in the manufacture and supply of strongly branded hypodermic syringes,
needles and related products. It has developed world-class efficiency at its
plants, that allow it to compete with some of the world`s low-cost producers. Of
concern is the dumping by multinationals of medical consumables on the Southern
African market, potentially reducing employment and job creation.
Rapimed (Pty) Ltd
Rapimed with its branded product, Uricheck, is the market leader in the
manufacture and distribution of rapid diagnostic products. Products include
HIV/AIDS rapid diagnostic kits, pregnancy and malaria diagnostic kits. Rapimed
continues to export to Africa, the Middle East and South America. The
introduction of ISO 9002 certification will provide the opportunity to export
into the European market.
Health System Technologies (Pty) Ltd (HST)
The successful implementation of the health systems information technology
tender in the Provincial Administration of the Western Cape hospitals of Groote
Schuur, Tygerberg and Red Cross Childrens Hospital is an example of the success
of a black company in implementing one of the most sophisticated health
technology systems worldwide. Through this tender, HST, is able to provide the
government with health IT systems to better manage hospitals and assist in the
quality of health care delivery. It is well positioned to obtain further tenders
in the public and private health care sector.
SEKUNJALO INFORMATION TECHNOLOGY
Sekunjalo Enterprise Management Technology (Pty) Ltd (Semtech)
Semtech is a niche software product developer, specialising in manufacturing
workflow and web accounting. The company continues to make progress in
developing software for the agri-chemical industry and warehouse control
management industries.
GROUP PROSPECTS
The growth model implemented by SIL will enable it to consolidate and improve
its performance in the future. The prospects for Premier Fishing as a result of
the four-year rights allocations and the increased focus on pharmaceuticals by
Sekunjalo Health Care will position the group to deliver a good performance in
the year ahead.
Sekunjalo and its advisors are engaged in discussions to recover a substantial
portion of its investment in LeisureNet Ltd.
The audited results have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice. Accounting policies
applied are consistent with those applied in the previous year. These results
have been audited by the group`s auditors, Fisher Hoffman PKF (Newlands)
Incorporated, and their unqualified audit opinion is available for inspection at
the company`s registered office.
APPRECIATION
The solid performance of the group would not have been possible without Dr
Wallace Mgoqi, whose wise counsel is sincerely appreciated, as is the vital
contribution of the directors of SIL and subsidiary companies, the executive
management team and staff.
By order of the Board
Adv WA Mgoqi
Chairman
Dr MI Surv
Chief Executive
Cape Town,
27 November 2002
Directors
Adv WA Mgoqi (Chairman),
Dr MI Surv* (Chief Executive Officer),
MY Kajee CA (SA) (Company Secretary),
F Kahn (Financial Director),
RA Seria,
AJ Snyders,
KC Patel,
Z Kota,
D Case
*Executive Director
Registered Address:
70 Rosmead Avenue,
Kenilworth, 7708
Transfer Secretaries:
Computershare Services Limited
70 Marshall Street
Johannesburg, 2001
Sponsors: Sasfin
Date: 27/11/2002 12:30:00 PM Produced by the JSE SENS Department
