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Jigsaw Holdings Limited -
Jigsaw Holdings Limited
(Registration No:1987/00011/06)
("Jigsaw" or "the company")
JSE CODE: JGS - ISIN CODE: ZAE000018370
PROVISIONAL UNAUDITED REVIEWED FINANCIAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY
2003
INCOME STATEMENTS
2003 2002 2003 2002
R"000 R"000 R"000 R"000 R"000 R"000
Contin- Discon- Contin- Discon-
uing tinuing uing tinuing
Opera- Opera- Opera- Opera- Total Total
tions tion tions tion
Revenue
52,484 25,192 47,428 39,785 77,676 87,213
(Loss)/Profit
from operations (13,131) (10,071) (370) 617 (23,202) 247
Net finance costs
(7,008) 865 (3,145) 213 (6,143) (2,932)
(Loss)/Profit
before taxation (20,139) (9,206) (3,515) 830 (29,345) (2,685)
Taxation
4,850 (243) (556) (42) 4,607 (598)
(Loss)/Profit
after taxation (15,289) (9,449) (4,071) 788 (24,738) (3,283)
Attributable to
outside
shareholders in
subsidiaries 166 (250) - (1) (84) (1)
Preference share
dividends (883) - (846) - (883) (846)
(Loss)/profit for
the year (16,006) (9,699) (4,917) 787 (25,705) (4,130)
attributable to
ordinary
shareholders
Reconciliation to Headline Earnings (R"000)
Loss for the year
(25,705) (4,130)
Less (Profit)/ loss on sale of fixed assets -
455
Less (Profit)/ loss on sale of subsidiaries
4,795 (88)
Impairment of fixed assets - tangible and 709
intangible -
Plus Goodwill amortisation 1,633
1,819
Impairment on Loan to Share incentive scheme trust
1,763 1,694
Headline loss for the year
(16,350) (705)
Weighted average number of shares (`000)
46,386 46,386
Basic loss per share (cents)
(55.42) (8.90)
Headline loss per share (cents)
(35.25) (1.52)
BALANCE SHEET
2003 2002
R"000 R"000
ASSETS
Non-current assets
22,471 34,909
Property, Plant and Equipment
4,075 6,883
Deferred Tax
5,297 -
Goodwill and other intangibles 10,403 24,231
Investments and loans
2,696 3,795
Current assets
57,421 70,063
Inventory and Development projects 4,471 4,870
Accounts receivable
51,688 64,302
Taxation
- -
Cash and cash equivalents
1,262 891
Total assets 104,972
79,892
EQUITY AND LIABILITIES
Capital and reserves
(8,449) 25,256
Share capital and premium 16,101 24,101
Distributable reserves
(24,550) 1,155
Minority interests
209 13
Non-current liabilities
5,158 6,361
Interest-bearing liabilities
4,907 6,036
Interest-free liabilities
251 325
Current liabilities
82,974 73,342
Accounts payable & provisions 34,138 58,079
Amounts owing on purchase
- -
Consideration of subsidiaries acquired
- -
Interest-bearing liabilities
332 629
Bank overdraft
48,504 14,634
Total equity and liabilities 104,972
79,892
GROUP STATEMENTS OF CHANGES IN EQUITY
Share Distri- Total
Capital butable
and reserves
premium
R"000 R"000 R"000
Balance 1 March 2000 re-
established 381 2,510 40,498
Balance at 01 March 2000
previously stated 381 6,454 44,442
Prior year adjustment
- (3,944) (3,944)
Net profit for the year
- 2,775 2,775
As previously stated
- 5,159 5,159
Minority interest
- (245) (245)
Prior year adjustment
- (1,619) (1,619)
Dividends
- (520) (520)
Issue of share capital
47 - 6,667
Premium on acquisition of
subsidiary written off - - (26,500)
Balance at 28 February 2001 18,155
5,285 23,440
- (4,130) (4,130)
Net loss for the 2002 year
- (3,283) (3,283)
Minority interest (1)
- (1)
Dividends
- (846) (846)
Issue of share capital 5,946
- 5,946
Balance at 28 February 2002 24,101
1,155 25,256
Balance previously stated
1,522 1,522
Prior year adjustments
(367) (367)
- (25,705) (25,705)
Net loss for the 2003 year
- (24,738) (24,738)
Minority interest
- (84) (84)
Dividends
- (883) (883)
Cancellation of share capital
due to rebate from profit (8,000) - (8,000)
warranty on Machaus
(Proprietary) Limited
Balance at 28 February 2003 16,101
(24,550) (8,449)
GROUP CASH FLOW STATEMENTS 2003 2002
`R000 `R000
Cash (utilised)/retained from operating (32,347)
activities 1,121
Cash flow from investing activities
(182) (6,625)
Cash effects of financing activities
(970) 928
Net increase in cash and cash (33,499)
equivalents (4,576)
Cash and cash equivalents at the (13,743)
beginning of the year (9,167)
Cash and cash equivalents at end of (47,242)
year (13,743)
BASIS OF PREPARATION
The results presented have been prepared in compliance with South African
Statements of Generally Accepted Accounting Practice and on a basis consistent
with the accounting policies applied in the previous year.
REVIEW OF THE PAST YEAR
The 2003 financial year proved to be a disappointing and traumatic period for
Jigsaw. It is now evident that the impact of events over a number of years was
far greater than originally anticipated.
These events included acquisitions at purchase considerations in excess of
sustainable levels of earnings.
Another compounding factor was the unsuccessful implementation of several
initiatives that impacted negatively on profits and cash flow throughout the
year.
Certain members of the previous management team were replaced with strategic
management consultants in August 2002. The consultants" services were in turn
prematurely terminated in February 2003.
CORRECTIVE ACTION
Since mid February 2003, new management has implemented a comprehensive
corrective action plan. This intervention, fully supported by the major
shareholders included:
- the implementation of improved and centralised financial controls;
- the impairment of investments that were either closed, liquidated
or disposed of;
- the introduction of a more cost effective management and reporting
system throughout the group; and
- the downsizing of head-office operations and associated costs
structure.
This management team has introduced a new pro-active, results orientated
approach towards effective management with specific emphasis on transparency,
communication, the HR function and budget disciplines.
OPERATIONAL REVIEW
The residential real estate networks performed satisfactorily.
The financial services division of Ascendant Cashflow Solutions performed
exceptionally well posting results above expectations.
During the year it was decided to outsource the mortgage origination business,
resulting in the discontinuation of that operation.
Both of the property development and home warranty operations have continued to
incur trading losses, primarily due to low volumes. The longer-term prospects
still remain sound and a turnaround is expected within the present financial
year.
Home Inspecting Services performed much better during the last 6 months of the
financial year. This improvement is mainly attributable to a contract to provide
inspection services for the National Home Builders Registration Council.
FINANCIAL REVIEW
The losses attributable to discontinued operations emanate from the impairment
of the investments in the Yellow Button group and the losses sustained by the
Ascendant Mortgage operation.
The losses incurred by continuing operations include:
- the diminution in the value of the shares held by the Share Trusts;
- severance packages and consultancy fees;
- high interest charges; and
- non-recurring items arising from previous management control
deficiencies.
During the year certain short term banking facilities were switched from bankers
acceptances to overdraft facilities at prime overdraft rates.
Capital and reserves reflects the reduction in the number of shares in issue as
a result of Machaus not meeting its profit warranties.
THE WAY FORWARD
The primary strategy for Jigsaw will be to focus on its core business of Real
Estate Franchising and providing cash advances of estate agent"s commission and
transfer duty.
The management team is confident that it will be able to re-establish the Group
as a leader within the real estate industry through efficient and effective
management.
In addition we expect prospects to improve on a declining interest rate trend.
GOING CONCERN
A major shareholder has agreed to subordinate a portion of its loans in order to
ensure solvency in the Group.
AUDITORS
BDO Spencer Steward (Johannesburg) Incorporated continue to act as auditors to
the company.
A provisional audit review report is available for inspection.
FOR AND ON BEHALF OF THE BOARD
N McINTYRE
CHIEF EXECUTIVE OFRFICER
17 June 2003
DIRECTORS
Executive: Piet Joubert, Neville McIntyre.
Non-executive: Johan Nel, Pieter van der Merwe
Registered address
1st Floor, 1 St Andrews Street, Birdhaven
TRANSFER SECRETARIES:
Computershare Investor Services Limited, 70 Marshall Street, Johannesburg, 2001
(PO Box 1053, Johannesburg, 2003)
AUDITORS
BDO Spencer Steward (Johannesburg) Inc
SPONSOR
The Janus Corporation (Pty) Ltd
Date: 17/06/2003 04:27:16 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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