| Thu 27 Mar 2003, 12:37 | | New Africa Investments Limited - Preliminary Resul |
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New Africa Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/002467/06)
Share codes: NAI and NAN
ISIN: ZAE000012134 and ZAE000011946
("Nail" or "the Group")
Preliminary Results for the year ended 31 December 2002
* Media headline earnings increase 61%
* Radio headline earnings increase 34%
Consolidated income statement
Unbundled Enterprise
Continuing operations operations as a whole
Audited Audited Audited Audited
year ended year ended year ended year ended
31-Dec-02 31-Dec-01 31-Dec-01 31-Dec-01
R000 R000 R000 R000
Revenues 580 641 451 691
EBITDA 50 624 24 773
Amortisation and depreciation (37 873) (37 426)
Finance income 62 094 79 215
Income before exceptional
items 74 845 66 562 486 800 553 362
Income from associates 23 827 16 407 - 16 407
Exceptional items (97 088) (241 783) (143 425) 241 783
Income/(Loss) before taxation 1 584 (158 814) 343 375 184 561
Taxation 32 792 28 354 145 000 173 354
(Loss)/Income after taxation (31 208) (187 168) 198 375 11 207
Minority interest (2 537) 3 409 (165 786) (162 377)
(Loss)/Income attributable to
ordinary shareholders (33 745) (183 759) 32 589 (151 170)
HEADLINE EARNINGS
(Loss)/Income attributable to
ordinary shareholders (33 745) (183 759) 32 589 (151 170)
Restructuring costs (2 354) 53 957 - 53 957
Loss/(Profit) on sale of
fixed assets 11 (63) - (63)
Profit on sale of business (348) (1 300) - (1 300)
Amortisation of goodwill 13 691 11 964 143 425 (11 964)
Minority portion and tax effect 7 24 (15 808) (15 784)
(22 738) (119 177) 160 206 41 029
Headline earnings per
share (cents) (18,7) (98,1) 131.9 33,8
(Loss)/Earnings per share(cents) (27,8) (151,3) 26,8 (124,4)
No. of shares taken into account
in calculating EPS (000) 121 479 121 479 121 479 121 479
Consolidated cash flow
Audited Audited
31-Dec-02 31-Dec-01
R000 R000
Cash retained from operating activities 83 347 (183 750)
Cash effects of investing activities (75 012) (248 969)
Cash effects of financing activities 64 274 (41 717)
Net increase in cash and cash equivalents 74 609 (474 436)
Cash held by unbundled companies - (197 000)
Cash and cash equivalents at beginning of year 565 318 1 236 754
Cash and cash equivalents at end of year 639 927 565 318
Statement of changes in equity
Share capital
and premium Reserves Total
R000 R000 R000
Restated 31 December 2000 3 558 603 1 325 377 4 883 980
Unbundle New Africa Capital (2 717 554) (495 865) (3 213 419)
Net loss for year - (151 170) (151 170)
Restated 31 December 2001 841 049 678 342 1 519 391
Net loss for year - (33 745) (33 745)
Land and building revaluation
reserve - 721 721
Foreign currency translation reserve - (1 076) (1 076)
Balance at 31 December 2002 841 049 644 242 1 485 291
Consolidated balance sheet
Audited Audited
31-Dec-02 31-Dec-01
R000 R000
Assets
Property, plant and equipment 105 894 103 260
Intangible assets 239 722 220 712
Investments 460 868 549 309
Other non-current assets 45 900 61 491
Current assets 831 241 738 267
Total assets 1 683 625 1 673 039
Equity and Liabilities
Share capital and premium 841 049 841 049
Reserves 644 242 678 342
Minority interest 77 151 42 077
Non-current liabilities 11 230 2 312
Current liabilities 109 953 109 259
Total equity and liabilities 1 683 625 1 673 039
Listed investments at market value and unlisted
investments at directors" valuation (R000) 1 510 921 1 494 046
Net asset value (cents) 1 243,8 1 229,9
No. of shares in issue at the end of year (000) 121 479 121 479
Contribution to headline earnings
Continuing operations
12 months 12 months
31-Dec-02 31-Dec-01
R000 R000
Media
Publishing 2 189 2 884
Radio 18 964 14 136
Film and TV 1 544 96
Outdoor 3 430 -
Exhibitions (228) (1 027)
Total Media 25 899 16 089
Other
Financial services 13 452 5 635
Hertz (6 070) (11 072)
African Bank Debtors Book (3 115) -
Write-down of investments (86 099) (176 162)
Head Office 33 195 46 333
Total Group (22 738) (119 177)
Exceptional items
Continuing operations
12 months 12 months
31-Dec-02 31-Dec-01
R000 R000
Net profit on sale of investments 348 1 300
Net loss on sale of investments - (66)
Provision for write-down of P4 Loans (7 000) -
Provision for write-down of Saccawu Investments (5 000) -
Provision for write-down AMB Pep (2 320) -
Provision for write-down Johnnic (3 046) (91 283)
Provision for write-down New Africa Capital (69 077) (60 221)
Provision for write-down of UAH - (24 592)
Investments written-off recovered 344 -
Restraint of trade payments - (1 000)
Restructuring fees 2 354 (53 957)
Amortisation of goodwill (13 691) (11 964)
(97 088) (241 783)
Commentary
DIRECTORS" STATEMENT
Your directors take pleasure in presenting the audited preliminary report of the
Group for the year ended 31 December 2002.
BASIS OF PREPARATION
The consolidated financial statements are prepared in accordance with South
African Statements of Generally Accepted Accounting Practice, the South African
Companies Act, as amended, and the disclosure requirements of the JSE Securities
Exchange South Africa.
The consolidated financial statements are prepared on the fair value and
going concern basis. The principal accounting policies are consistent with those
applied in the annual financial statements for the year ended 31 December 2001.
CORPORATE GOVERNANCE
The Group adheres to locally accepted corporate governance practices.
Additional governance recommendations, as set out in the second King Report, are
currently being addressed.
DIRECTORSHIP CHANGE
Mr A S Mabogoane was appointed Chairman of the Group with effect from 1 March
2002.
HEADLINE EARNINGS
The Group implemented an accounting policy in 2001 whereby available for sale
assets are marked to fair value and the difference is taken through the income
statement and is therefore included in earnings but was excluded from headline
earnings. The South African Institute of Chartered Accountants issued a circular
07/02 in December 2002 for immediate implementation, which requires such fair
value adjustments to be included in headline earnings. This definition differs
from the treatment used in previous reporting periods.
CONTINGENT LIABILITIES
Nail is a partner together with New Africa Capital and BoE for the
management, collection and funding of the African Bank Debtors Book which was
excluded from the sale of the African Bank to African Bank Investment Limited.
Nail"s contingent liability in respect of additional funding required in the
event that the total debtors book was uncollectable amounts to R109,9 million
(2001: R125,7 million). Operating losses of R4,4 million have been expensed in
the current year.
OPERATING PERFORMANCE
* Radio
The radio assets continue to be the star performers. Jacaranda 94.2 FM
continues to be the largest regional radio station by audience and Kfm 94.5
remains the market leader in the Western Cape. Kaya FM has achieved a breakeven
position and advertising revenues continue to show strong growth.
Radio advertising revenues remain strong across all radio stations and this
has resulted in a 34% increase in headline earnings.
Radmark, the radio sales house, has produced an impressive set of results as
a result of the increased advertising revenues generated for the radio stations.
* Publishing
The Sowetan increased its net income by 38,5% compared to last year in spite
of increased competition in its target market and consequent circulation
decline. In the year under review Mr John Dludlu was appointed editor of the
Sowetan. The paper has been repositioned to attract a higher LSM readership.
Mr Thabo Leshilo was appointed editor of the Sowetan Sunday World.
Circulation continues to increase which should result in increased advertising
revenues.
New Africa Books is positioning itself as a major educational publisher. New
titles have been produced for the new outcomes-based education curriculum.
* Film and TV
Urban Brew continues to produce the highly successful Road 2 Riches TV show
and the Live Lotto Draw and has expanded the YOTV youth show. New shows and
improved margin control has resulted in improved performance over last year.
New Africa Media Films completed its first full-length feature film, Slash,
which premiered at Cannes. Distribution deals have been concluded with Universal
and First Look. Initial indications are that the release will provide an
acceptable return for the investors, Nail and the IDC.
* Outdoor
Nail acquired 100% of Natanya Outdoor and 70% of Natanya Outdoor Africa
effective 1 January 2002. These companies have been rebranded Nail Outdoor and
Nail Outdoor Africa. During the year the businesses of Randata and Significant
Signs were acquired which brings critical mass to the existing business and an
increased number of landmark sites. The Africa expansion covers Nigeria,
Democratic Republic of the Congo, Botswana and Ghana. The strengthening of the
Rand towards the end of last year had a negative impact on the results from
Africa.
* Exhibitions
This operation was closed during the year.
* Hertz
This year has seen the company making a concerted effort to increase
revenues, which has resulted in revenues increasing 26,7% over the same period
last year. Inflation in the motor industry, high interest rates and aggressive
selling have had a negative effect on margins.
* Head Office
The interest income received has reduced due to cash outflows during the
previous year. The outflows were the payment of a special dividend in May 2001
of R243 million and the close out of the Johnnic put options of R240 million in
December 2001.
POST-BALANCE SHEET EVENTS
There are no material items, which have occurred post the year-end.
STRATEGY
Although the media assets are performing well the Board is of the view that
they lack critical mass in key strategic areas. Thus organic growth will not be
sufficient to take the Group to new heights. The acquisition route that has been
followed in the past year has not been successful due to the regulatory
constraints on the radio side and absence of appropriately priced assets on the
print side.
The Board meets in two weeks in order to chart a new course for Nail. The
thrust of the strategy will be to unlock value for shareholders.
DIVIDEND
The directors decided that no dividend would be declared for the current
financial year. A dividend will be considered once the comprehensive strategy
has been formulated.
AUDIT OPINION
The annual financial statements have been audited by PricewaterhouseCoopers
and SizweNtsaluba VSP and their unqualified audit opinion can be viewed at New
Africa Investments Limited"s head office.
A S Mabogoane S Macozoma
Non-Executive Chairman Chief Executive Officer
26 March 2003
Directors: A S Mabogoane (Non-Executive Chairman), S Macozoma
(Chief Executive Officer), T Curtis, Prof M M Katz, J T Mdlalose,
G T Serobe, G Snelgar, Prof G Williams, R Kevan, K Setzin,
G Chadwick, L Mojela, M Ngoasheng
Company Secretary: D Qwelane
(Incorporated in the Republic of South Africa)
(Registration number 1993/002467/06)
("Nail" or "the Group")
