| Tue 25 Feb 2003, 9:10 | | Appleton - Interim Results For The Period Ended 31 |
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Appleton Limited
Registration No: 1999/004031/06
Share code: ALE ISIN: ZAE000027488
* Recovery strategy being implemented
* Headline loss R10,2 million
* International assets under
* Total assets under management US$266,4 million management R3,76 billion
INTERIM RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2002
GROUP BALANCE SHEETS
Unaudited Unaudited Audited
as at as at Year Ended
31 Dec 31 Dec 30 June
2002 2001 2002
R`000 R`000 R`000
ASSETS
Non-current assets 44 366 57 036 47 695
Property and equipment 24 242 28 790 26 094
Loans 939 6 093 664
Non-trading investments 8 684 13 046 8 991
Goodwill and intangible asset 3 685 6 715 6 067
Deferred taxation 6 816 2 392 5 879
Current assets 192 304 119 694 233 736
Trading investments 4 344 9 577 8 161
Accounts receivable 158 232 64 091 165 644
Bank balances and cash 29 728 46 026 59 931
Total assets 236 670 176 730 281 431
EQUITIES AND LIABILITIES
Capital and reserves 71 006 94 911 86 887
Outside shareholders` interest 3 364 13 345 7 010
Non-current liabilities 2 068 7 578 4 126
Borrowings 1 651 6 897 3 149
Deferred taxation 417 681 977
Current liabilities 160 232 60 896 183 408
Accounts payable and provisions 158 525 49 131 165 896
Bank overdraft 1 707 11 765 17 512
Total equity and liabilities 236 670 176 730 281 431
GROUP INCOME STATEMENTS
Unaudited Six Unaudited Six Audited
Months Ended Months Ended Year Ended
31 Dec 31 Dec 30 June
2002 2001 2002
R`000 R`000 R`000
Gross revenue 53 353 73 183 166 730
Net fee, trading and other income/(loss) (4 632) 6 820 12 021
Net unrealised foreign exchange (loss)/gain (4 218) 8 425 7 835
(Loss)/income from operations (8 850) 15 245 19 856
Fair value adjustment - non-trading
investments 454 - (3 761)
Corporate activity professional fees (930) - -
Restructuring and relocation costs - - (2 717)
Restraint of trade amortisation and impairment - - (866)
Goodwill amortisation (2 383) (2 195) (5 044)
Operating (loss)/income before financing
costs (11 709) 13 050 7 468
Finance costs (1 602) (1 972) (4 426)
Income/(loss) before taxation (13 311) 11 078 3 042
Taxation 1 319 (3 342) 791
Net income/(loss) after taxation (11 992) 7 736 3 833
Income from associate - 3 -
Attributable to outside shareholders (142) (1 069) (2 868)
Net attributable (loss)/earnings (12 134) 6 670 965
Number of shares in issue (`000) 1 088 903 1 088 903 1 088 903
Weighted average number of shares in
issue (`000) 1 088 903 1 092 071 1 090 500
(Loss)/earnings per share (cents)
- Headline (0,94) 0,35 0,98
- Basic and fully diluted (1,11) 0,55 0,09
NAV per share (cents) 6,52 7,74 7,98
RECONCILIATION OF HEADLINE (LOSS)/EARNINGS
Unaudited Six Unaudited Six Audited
Months Ended Months Ended Year Ended
31 Dec 31 Dec 30 June
2002 2001 2002
R`000 R`000 R`000
Net attributable (loss)/earnings (12 134) 6 670 965
Amortisation of goodwill 2 383 2 195 5 042
Retrenchment costs - - 880
Fair value adjustment - non-trading
investments (454) - 3 761
Headline (loss)/earnings (10 205) 8 865 10 648
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS` FUNDS
Unaudited Six months ended 31 December 2002
Non-
distri- Reverse
Share capital butable Take Over Retained
and premium reserves Adjustments Income/(Loss)
R`000 R`000 R`000 R`000
Balance at 30 June 2002 133 282 227 (76 116) 29 494
Dividend paid (2 944)
Foreign currency
translation reserve (803)
Net attributable (loss)/earnings (12 134)
Balance at 31 December 2002 133 282 (576) (76 116) 14 416
ABRIDGED GROUP CASH FLOW STATEMENTS
Unaudited Six Unaudited Six Audited
Unaudited Six Unaudited Six Audited
Months Ended Months Ended Year Ended
31 Dec 31 Dec 30 June
2002 2001 2002
R`000 R`000 R`000
Net cash (outflows)/inflows from
operating activities (8 324) 35 869 9 551
Net cash outflows from investing
activities (587) (94 605) (8 658)
Net cash (outflows)/inflows from
financing activities (5 487) 99 245 (372)
Net (decrease)/increase in cash
and cash equivalents (14 398) 40 509 521
Cash and cash equivalents at the
beginning of the period 42 419 1 557 41 898
Cash and cash equivalents at the
end of the period 28 021 42 066 42 419
Basis of accounting
The financial information has been presented in accordance with South African
Statements of Generally Accepted Accounting Practice. The accounting policies
applied are consistent with those of the prior reporting period with the
exception of buildings which are now being depreciated. This has not had a
material effect on the group results.
SEGMENTAL ANALYSIS OF HEADLINE (LOSS)/EARNINGS
Unaudited Six Unaudited Six
Months Ended Months Ended
31 Dec 31 Dec
2002 2001
R`000 R`000
Appleton International Asset Management 3 941 2 289
Appleton Asset Management (South Africa)
and Private Wealth (2 562) 2 934
Appleton Securities (642) 2 140
Total segmental (loss)/earnings 737 7 363
Group infrastructure costs (8 185) (6 923)
Net operational (loss)/earnings (7 448) 440
Net unrealised forex (loss)/gain after taxation (2 757) 8 425
Headline (loss)/earnings (10 205) 8 865
OPERATIONAL REVIEW
Shareholders were advised in a trading update on 8 January 2003 that
continued difficult market conditions, coupled with the recent strengthening of
the Rand, would have an adverse effect on the company`s financial results for
the interim period ended 31 December 2002.
In the corresponding period in the previous financial year Appleton showed an
unrealised after tax forex gain of R8,4 million against an unrealised forex loss
this financial period of R2,8 million. In addition new fund inflows, both
locally and internationally, have been disappointing. Together with adverse
market movements this has impacted negatively on the group`s funds under
management and concomitant net fee income.
Funds under management in South Africa have declined since 30 June 2002 by
9,0% from R1 639 million to R1 491 million, while offshore funds under
management have declined by 7,0% from R2 437 million to R2 267 million, mainly
due to local currency appreciation. In addition, the results of Appleton
Securities have been poor, owing to significantly lower trading volumes and the
previously announced decision to curtail the group`s proprietary trading
activities in order to reduce the group`s risk profile, which resulted in
retrenchment costs.
On 30 December 2002, shareholders were advised of the salient terms of the
proposed restructure of Appleton`s Dublin operations which comprise a 70% share
in Beacon Systems Limited and a 70% share in Appleton Capital Management
Limited. The implementation of this proposed transaction is conditional upon
various regulatory approvals. Therefore the deconsolidation of Appleton`s
interest in the Dublin business and recognition of Appleton`s preference
shareholding in this business will only be implemented once the conditions
precedent have been fulfilled.
During the period under review a bonus provision in respect of the Dublin
operations was reversed which enhanced Appleton`s International Asset Management
income by R2,1 million.
Due to the uncertainty of Appleton`s future profitability on a stand-alone
basis, a decision was taken not to raise an additional deferred tax asset on the
trading losses sustained during the period under review. A deferred tax asset on
the reversal of the unrealised exchange gain recognised in the previous
financial period was however raised.
A recovery strategy is in the process of being implemented, in order to
restore profitability of Appleton. In addition, as previously announced, the
proposed acquisition by PSG Investment Services (Proprietary) Limited ("PSGIS")
will, once the transaction has been approved, allow management of the combined
group to unlock significant synergies and rationalisation benefits which will
enhance the profitability of the combined group.
ACQUISITION BY PSGIS
On 3 December 2002 the Appleton board accepted an offer that will, subject to
regulatory and statutory approval, result in PSGIS acquiring Appleton. PSGIS is
a 95% owned subsidiary of the JSE Securities Exchange listed PSG Group, which
currently has a 30,8% interest in Appleton.
In terms of the scheme of arrangement ("the scheme") proposed by PSGIS
between Appleton and its shareholders (other than PSG Group and/or its
subsidiaries and any subsidiaries of Appleton), scheme participants will, if the
scheme is implemented, receive a scheme consideration of 9c per share. At the
date of this announcement the implementation of the scheme is subject only to
regulatory and statutory approvals.
Shareholders are advised that a circular will be posted during the course of
the next fortnight setting out the details of this transaction as well as the
restructuring of Appleton`s investment in the Dublin operation.
BOARD OF DIRECTORS
During the period under review the following changes were made to the board
of directors:
Mr Jannie Mouton, Chairman of PSG Group, and Mr Jaap du Toit, Chief Executive
Officer of PSG Investment Services, were appointed to the Appleton Board as
non-executive directors on 31 October 2002.
PSGIS assumed management control of Appleton with effect from 6 January 2003
(subject to the overall control and supervision of the Appleton Board) and
consequently Mr Jaap du Toit was appointed interim Chief Executive Officer of
Appleton on 24 January 2003.
Mr Bruce Sneddon, Chief Executive Officer, and Mr Wayne Rosenberg, Deputy
Executive Chairman, relinquished their executive positions, but have agreed to
continue to serve on the board as non-executive directors. The board expresses
its thanks to Messrs Sneddon and Rosenberg for the invaluable roles they have
played in the leadership and management of the group in recent years. In
addition Mr Theo Biesenbach, Chief Operating Officer of PSGIS, was appointed as
an alternate non-executive director to Mr Jannie Mouton.
DIVIDENDS
Appleton`s policy is to declare a single annual dividend at the end of each
financial year. A dividend of R2,9 million (0,27 cents per share) in respect of
the financial year ended June 2002, was paid to shareholders during September
2002.
On behalf of the Board
C HULTZER Cape Town
Chairman
24 February 2003
Directors: Executive: J du Toit (Acting CEO), M I F Smith (Financial), A H Diem
Non-Executive: C Hultzer (Chairman), D de Klerk, J F Mouton, S D Shane,
W Rosenberg, D B Sneddon, B Biebuyck (Alternate),
T Biesenbach (Alternate)
Company secretary and registered office: C M Mason, Appleton Limited,
T.A.G House, Alphen Park,
Constantia Road,
Constantia, 7806
Registration No: 1999/004031/06
Share code: ALE ISIN: ZAE000027488
Appleton offices: Cape Town, Dublin, Durban, Johannesburg, Guernsey, London,
Port Elizabeth
Transfer secretaries: Computershare Investor Services Limited,
70 Marshall Street,
Johannesburg, 2001
Website address: www.appleton.com
www.appletonglobal.com
www.appletononline.co.za
Date: 25/02/2003 09:00:01 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
