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Dynamic Cables RSA - PRELIMINARY REPORT FOR THE YEAR ENDED 31 DECEMBER 2002
DYNAMIC CABLES RSA LIMITED
Formerly Conlog Holdings Limited
(Registration number 1987/01807/06)
Share code: DYM ISIN: ZAE000028270
("the company")
INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2002
Group Company
Reviewed Audited Reviewed Audited
2002 2001 2002 2001
R"000 R"000 R"000 R"000
Turnover 99 604 73 478 - -
Cost of sales 74 509 46 153 - -
Gross profit 25 095 27 325 - -
Other operating costs (15 092) (13 955) 868 6 230
Operating profit before
depreciation, amortisation
and abnormal items 10 003 13 370 868 6 230
Depreciation and amortisation (6 704) (7 471) - -
Operating profit before
abnormal items 3 299 5 899 868 6 230
Abnormal items 550 2 263 - (2 573)
Results from operating activities 3 849 8 162 868 3 657
Income from investments 482 1 284 47 -
Finance charges (1 179) (1 473) - -
Profit before taxation 3 152 7 973 915 3 657
Taxation 2 004 2 537 775 (86)
Net profit for the year 1 148 5 436 140 3 743
Basic earnings per share 2,5 12,2 - -
Headline earnings per share 5,0 11,5 - -
Earnings per share (cents) 2,5 12,2
Headline earnings per share (cents) 5,0 11,5
Number of shares in issue ("000) 46 734 46 734
Weighted number of shares in
issue ("000) 46 734 44 575
Reconcilliation of headline
earnings per share
Net profit for the period 1 148 5 436
Abnormal items (550) (3 785)
Profit on sale of fixed assets - (30)
Goodwill amortised 1 733 3 481
Tax effects of adjustments - 465
Headline earnings 2 331 5 102
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2002
Group Company
Reviewed Audited Reviewed Audited
2002 2001 2002 2001
R R R R
Cash flows from operating
activities 4 604 31 354 (5 630) 5 698
Cash receipts from customers 99 447 66 625 - -
Cash paid to suppliers and
employees (94 147) (35 082) (5 677) 5 698
Cash generated from operations 5 300 31 543 (5 677) 5 698
Interest received 483 1 284 47 -
Interest paid (1 179) (1 473) - -
Cash flows from investing
activities (4 786) (20 183) 3 445 1 621
Purchase of tangible assets (4 573) (3 375) - -
- Replacements (113) - - -
- Additions (4 460) (3 375) - -
Proceeds on disposal of
tangible assets 1 055 43 - -
Purchase of intangible assets (240) - - -
Purchase of investment (727) - - (18 014)
Proceeds on disposal of financial
assets 550 - 6 145 -
Purchase of financial assets (851) - (2 700) (3 007)
Proceeds on disposal of financial
assets - (2 845) - -
Acquisition of subsidiary, net of
cash acquired - (14 006) - -
Repayment of loans by subsidiaries - - - 22 642
Cash flows from financing
activities (584) (6 443) - (6 817)
Payment for shares reacquired - (6 817) - (6 817)
Proceeds from long-term borrowings - 374 - -
Payment of long-term borrowings (584) - - -
Net (decrease)/increase in cash
and cash equivalents (766) 4 728 (2 185) 502
Cash and cash equivalents at the
beginning of the year 8 314 3 586 2 398 1 896
Cash and cash equivalents at
the end of the year 7 548 8 314 213 2 398
BALANCE SHEET AT 31 DECEMBER 2002
Group Company
Reviewed Audited Reviewed Audited
2002 2001 2002 2001
R"000 R"000 R"000 R"000
ASSETS
Non-current assets 47 202 57 836 48 029 61 134
Tangible assets 9 405 8 014 - 41
Intangible assets 32 588 45 364 - -
Deferred taxation 785 1 613 - 86
Investments 727 - 47 302 60 280
Financial assets 3 697 2 845 727 727
Current assets 34 693 36 327 213 3 126
Inventories 13 725 13 699 - -
Trade and other receivables 13 420 11 501 - -
Short-term loans - 727 - 727
Forward exchange contracts - 2 048 - -
Short term deposits 8 - - -
Cash and cash equivalents 7 540 8 352 213 2 399
Total assets 81 895 94 163 48 242 64 260
EQUITY AND LIABILITIES
Equity capital and reserves 28 606 27 458 26 516 26 376
Share capital and premium 92 199 92 199 109 133 109 133
Accumulated loss (63 593) (64 741) (82 617) (82 757)
Non-current liabilities
Interest bearing borrowings 1 821 2 406 - -
Current liabilities 51 468 64 299 21 726 37 884
Current portion of long term
liabilities 953 2 310 - -
Vendor loan 20 186 35 986 20 186 35 986
Taxation 7 711 6 535 689 -
Trade and other payables 22 265 18 283 850 748
Forward exchange contracts 353 - - -
Bank overdraft - 37 - -
Provisions - 1 150 - 1 150
Total equity and liabilities 81 895 94 163 48 242 64 260
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2002
Share Share Accumulated
capital premium loss Total
R R R R
Group
Balance at 1 January 2001 2 689 92 327 (70 177) 24 839
Net profit for the year - - 5 436 5 436
Issue of share capital 500 3 500 - 4 000
Shares re-aquired (852) (5 965) - (6 817)
Balance at 1 January 2002 2 337 89 862 (64 741) 27 458
Net profit for the year - - 1 148 1 148
Balance at 31 December 2002 2 337 89 862 (63 593) 28 606
Company
Balance at 1 January 2001 2 689 109 261 (86 500) 25 450
Net profit for the year - - 3 743 3 743
Issue of share capital 500 3 500 - 4 000
Reduction of share capital (852) (5 965) - (6 817)
Balance at 1 January 2002 2 337 106 796 (82 757) 26 376
Net profit for the year - - 140 140
Balance at 31 December 2002 2 337 106 796 (82 617) 26 516
COMMENTARY
The results for the group and the state of its affairs are set out in the
following statement.
REVIEW OF OPERATION
The year ended December 2002 was a year in which many unforeseen problems
arose. The first half of the year was characterised by extremely low turnover
levels. This followed the general trend in the telecoms industry. In the second
half of the year turnover levels rose by 56% and the group seemed set for a
record year, notwithstanding the lack-lustre performance in the first half. We
were thus extremely frustrated to discover that the premises that we were
occupying was zoned only for the purposes of the original owner. The immediate
effect of this was that our working hours were curtailed to one shift only. This
resulted in a greater level of outsourcing at lower margins. The second effect
of this was that we were forced to relocate the plant at great cost during our
busy period. Management believe that the effect of this issue on our bottom line
was in excess of 5 million rand. Finally the last quarter of last year saw
dramatic strengthening of the rand which resulted in foreign exchange losses as
we had bought forward cover in respect of our foreign currency exposure at
higher rates. It is a tribute to the inherent viability of the business as well
as the management teams exceptional efforts that the group managed to avoid
posting a loss for the year.
SUSPENSION OF LISTING
We are pleased to report that we are currently in negotiations with the
representative of the vendor consortium of the original Conlog business with the
view to settling the aspect of the potentially tainted shares. The discussions
are taking place in a very cooperative and constructive manner and we look
forward to resolving this issue in the not too distant future.
REVIEW OPINION
The condensed annual financial statements contained in this preliminary
report have been reviewed by Grant Thornton Kessel Feinstein and they have
modified their review opinion as a result of the uncertainty relating to the
potentially "tainted" share matter referred to in the previous audited annual
financial statements and the commentary above. This matter has also resulted in
a departure from Generally Accepted Accounting Practice in that fully diluted
EPS has not been disclosed due to the abovementioned uncertainty.
The auditors" review report will be available for inspection at the company"s
registered office.
On behalf of the board
Shaun Rai
Acting Chairman
31 March 2003
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