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Glovill - Audited Financial Results For Year Ended 28 February 2003 And
Release Date: 29/05/2003 17:58:51 Code(s): GLL
Glovill - AUDITED FINANCIAL RESULTS FOR YEAR ENDED 28 FEBRUARY 2003 AND
CAUTIONARY ANNOUNCEMENT
GLOBAL VILLAGE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/017632/06)
("Glovill" or "the company")
Share Code: GLL
ISIN: ZAE000015426
AUDITED FINANCIAL RESULTS FOR YEAR ENDED 28 FEBRUARY 2003 AND CAUTIONARY
ANNOUNCEMENT
INCOME STATEMENT
for the year ended 28 February
2003 2002
R"000 R"000
Revenue 35,194 37,926
Operating profit before amortisation and 3,015 3,010
abnormal items
Amortisation of intangible assets (929) (1,050)
Impairment loss (193) (2,142)
Loss on abandonment Note 1 (211) -
Write downs - (4,036)
Operating profit/(loss) 1,682 (4,219)
Interest received 376 329
Finance costs (74) (70)
Profit/loss) before taxation 1,984 (3,960)
Taxation (757) 751
Net profit /(loss) for the year 1,227 (3,209)
Earnings / (Loss) per share (cents) 1.31 (3.41)
Headline earnings per share (cents) 3.21 4.28
Weighted average number of shares in issue ("000) 94,000 94,000
Reconciliation of headline earnings
Net profit/(loss) for the year 1,227 (3,209)
Amortisation of intangible assets 929 1,050
Impairment loss 193 2,142
Write downs - 4,036
Loss on abandonment Note 1 211 -
Deferred tax - prior years Note 2 454 -
Headline earnings 3,014 4,020
Note 1
The loss arises as a result of the closure
of the Montecasino Market.
Note 2
Deferred tax arising from timing
differences in prior years. This amount
was not accounted for as the company
utilized computed and assessed losses.
BALANCE SHEET
as at 28 February
2003 2002
R"000 R"000
Assets
Non-current assets 32,961 33,669
Property, plant and equipment 17,322 17,183
Intangible assets 14,274 15,395
Loan to share incentive scheme 1,365 1,091
Current assets 5,813 2,980
Inventories 59 152
Accounts receivable 1,183 1,733
Bank balances 4,571 1,095
Total assets 38,774 36,649
EQUITY AND LIABILITIES
Capital and reserves 33,568 32,341
Issued capital 39,616 39,616
Distributable reserve (6,048) (7,273)
Non-current liabilities 1,638 873
Long term liabilities
Long term liabilities 978 873
Deferred tax 660 -
Current liabilities 3,568 3,435
Accounts payable 2,608 2,059
Vendors" claims
Taxation 881 1,321
Current portion of long term liabilities 79 55
Total equity and liabilities 38,774 36,649
Net asset value per share (cents) 35,71 34,41
Tangible net asset value per share (cents) 20,53 18,03
CASH FLOW STATEMENTS
for the year ended 28 February
2003 2002
R"000 R"000
Cash flow from operating activities 7144 3,130
Cash flow from investing activities (3,797) (4,370)
Cash flow from financing activities 129 (18)
Net increase/(decrease) in cash and cash 3,476 (1,258)
equivalents
Cash and cash equivalents at beginning of 1,095 2,353
year
Cash and cash equivalents at the end of 4,571 1,095
year
STATEMENT OF CHANGES IN
EQUITY
for the year ended 28
February 2002
Share Share Distributable
Capital Premium Reserves Total
R"000 R"000 R"000 R"000
Balance at 1 March 2001 940 38,676 (4,066) 35,550
Loss for the year (3,209) (3,209)
Balance at 28 February 2002 940 38,676 (7,275) 32,341
Net profit for the year 1,227 1,227
Balance at 28 February 2003 940 38,676 (6,048) 33,568
Chief Executive"s Comments
On behalf of the board of directors of Global Village, the audited results for
the year ended 28 February 2003 are presented.
The last financial year represents the first full year of Global Village"s
existence in which it operated with the positive culture of a public listed
company.
The year was dominated by the group restructuring itself in form and process
while we reengineered our corporate culture infusing it with a new corporate
professionalism. While this was sometimes painful the results were pleasing as
we reduced our staff complement by approximately 40%, and improved productivity
significantly. A culture of accountability now dominates the executive and ranks
of senior management, 35% of which was also changed.
We spent the year working on strengthening our back of house efficiency and
effectiveness at the financial, administrative and operating coalfaces. We
upgraded our technology, introduced a national wide area network and introduced
improved operating software systems.
We closed down the loss making Market at Montecasino and reengineered the
Emporium into Homeworks, which now compromises a fourth party logistics home
merchandise platform.
We therefore at present have only one loss making operation whose performance is
improving trend wise.
Much of the effect of these improvements would not be felt in this financial
year due to the high costs of retrenching over 100 staff members.
Shareholders in general meeting voted against the payment of a severance package
to cofounder Gary Israelsohn whom resigned from the board on 17 July 2002. In
the same general meeting shareholders approved the purchase by Global Village of
its head office property from a related party.
No new businesses were started up.
Operating Results
Although revenue declined by 7% this was due to the disposal early in the
financial year of our non-core food business and the closure in June 2002 of the
loss making Montecasino Market. In spite of the reduced turnover we improved
net profit before taxation by R5.9 million from a loss of R3.9million to a
profit of R1.98 million. By shifting from an assessed loss position to a
taxable one we incurred a tax charge R1.5 million higher than last year, which
reduced our comparable headline earnings by 25%. If we eliminated the tax
structure changes to compare headline earnings on a like basis we would have
improved our headline earnings by 12.5%. The business"s "health" improved
dramatically with cash and cash equivalents increasing by 317% and the liquidity
ratio on our balance sheet improving from 0.8 to 1.6 in spite of a 31% decline
in debtors and 26% increase in creditors reflecting excellent cash management
and controls.
Impairment and abandonment losses were significantly reduced this year.
Future Prospects
This next financial year will see Global Village prioritise a focus on its
"front of house" marketing and sales areas. This means that we hope to see a
leveraging off of existing businesses to produce improvements in sales and
growth in operating margin efficiency.
We don"t expect to launch any new business in the current financial year but
have already begun to plan to be ready to launch further core business
activities in 2004.
These will include a new market world and a fashion platform marketplace.
Significant renovations and structural improvements are being introduced to our
flagship Bruma Market World including upgrades of the Kids World into the
county"s leading secured child leisure facility, perimeter upgrades and
additional weekend lock up stalls.
The extension of share incentive options to senior management and a staff
provident fund has already been introduced since the year-end.
Finally a politically and economically correct trader share option incentive
scheme is being contemplated which will fully comply with any applicable
legislation including the JSE Securities Exchange South Africa ("JSE") Listings
Requirements. It is expected to be introduced to the top group of our traders
creating a stakeholders marketplace for our stock but which is expected to align
Global Village and its most important customers in a mutually supportive
empowerment relationship. Greater levels of trader motivation and loyalty are
expected as an outcome of this stock option marketplace.
Cautionary Announcement
Shareholders are advised that the company has entered into negotiations, which
if successfully concluded may have a material effect on the price at which
Glovil shares trade on the JSE. Accordingly, shareholders are advised to
exercise caution when dealing in the company"s securities until a detailed
announcement is made.
A special note
Global Village remains one of the coolest companies operating on the JSE. While
our primary motive is to create shareholder wealth by improving financial
performance we provide a spiritually enriching service, developing and managing
leisure retail platforms utilising third and fourth party logistics innovatively
and fearlessly to create economic empowerment as a dominant raison de etre to
our existence.
Dividends
No dividend has been declared or recommended.
Accounting Policies
The consolidated financial statements for the year under review are prepared on
the historical cost basis in accordance with the South African Statements of
Generally Accepted Accounting Practice and incorporates accounting policies
which are consistent with those of the previous year.
The results have been audited by Horwath Leveton Boner and copy of their
unqualified report is available at the companies registered office.
On behalf of the board of directors
Marc Israelsohn Carel van Reenen
(Chief Executive Officer) (Chief Financial Officer)
29 May 2003
Company Secretary and Registered Office
CA Van Reenen. 164 Louis Botha Avenue
Lower Houghton, Johannesburg 2001
Transfer Secretaries
Computershare Investor Services Limited
Ground Floor, 70 Marshall Street
Johannesburg
Sponsor
Sasfin Corporate Finance
A Division of Sasfin Bank Limited
13-15 Scott Street, Waverly, 2090
P O Box 95104, Grant Park, 2051
Directorate
Marc Israelsohn
Eric Goodman (Non-executive)
Carel van Reenen
Faruk Waja (appointed, 25 July 2002)
