| Mon 25 Aug 2003, 17:05 | | Interim Results for the six months ended 30 June |
|
Spectrum Shipping Limited -
Spectrum Shipping Limited
(Registration number 1998/018118/06 )
(Share code: SUM ISIN: ZAE000037446)
INTERIM RESULTS
for the six months ended 30 June 2003
INCOME STATEMENT Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 Dec
2003 2002 2002
R"000 R"000 R"000
Turnover 13 619 13 315 29 325
Gross billings 266 992 288 939 628 908
Gross disbursements (253 373) (275 624) (599 583)
Operating income 2 375 5 705 13 281
Amortisation of intangible
assets (338) 169 (965)
Depreciation (190) (165) (280)
Net interest paid (1 188) (1 246) (4 285)
Profit before taxation 659 4 463 7 751
Taxation (200) (1 159) (715)
Net profit after taxation 459 3 304 7 036
Shares in issue (000"s) 850 000 850 000 850 000
Earnings per share (cents) 0,1 0,4 0,8
Headline earnings per share
(cents) 0,1 0,4 0,7
Reconciliation between earnings
and headline earnings
Profit after taxation 459 3 304 7 036
Loss on sale of fixed assets 6 - 9
Amortisation of goodwill 9 (169) 282
Taxation effects (2) - (1 296)
Headline profit after taxation 472 3 135 6 031
BALANCE SHEET Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 Dec
2003 2002 2002
R"000 R"000 R"000
ASSETS
Non-current assets 6 753 7 206 6 804
Property, plant and equipment 1 252 984 1 093
Investments - 607 -
Intangible assets 1 307 (843) 1 317
Deferred taxation 4 194 6 458 4 394
Current assets 111 096 89 964 99 035
Non-interest bearing loans - - 17
Trade and other receivables 96 847 89 964 95 565
Cash and cash equivalents 14 249 - 3 453
Total assets 117 849 97 170 105 839
EQUITY AND LIABILITIES
Capital and reserves 28 114 23 478 27 655
Share capital and premium 107 795 106 152 107 795
Accumulated loss (79 681) (82 674) (80 140)
Non-current liabilities
Interest bearing borrowing 65 83 53
Current liabilities 89 670 73 609 78 131
Provisions 2 132 - 2 399
Loan payable 887 - 874
Trade and other payables 53 233 58 452 44 086
Current portion of borrowings 25 - 23
Taxation - 1 193 -
Bank overdraft 33 393 13 964 30 749
Total equity and liabilities 117 849 97 170 105 839
CASH FLOW STATEMENT Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 Dec
2003 2002 2002
R"000 R"000 R"000
Cash generated from operations
before working capital 2 115 5 410 12 373
changes
Changes in working capital 7 864 (7 551) (25 698)
Cash generated from operating
activities 9 979 (2 141) (13 325)
Net interest paid (1 188) (1 246) (4 285)
Net cash flows from operating
activities 8 791 (3 387) (17 610)
Cash flows from investing
activities (684) (22 615) (343)
Cash flows from financing
activities 44 12 029 549
Net increase/(decrease) in cash
and cash equivalents 8 151 (13 973) (17 404)
Cash and cash equivalents
at the beginning of the year (27 295) 9 9
Cash and cash equivalents
acquired during the year - - (9 900)
Cash and cash equivalents
at the end of the year (19 144) (13 964) (27 295)
STATEMENT OF Share Share Accumu-
CHANGES IN EQUITY capital premium lated loss Total
Balance at 1 January 2003 850 106 945 (80 140) 27 655
Issue of shares - - - -
Net profit for the period - - 459 459
Balance at 30 June 2003 850 106 945 (79 681) 28 114
FINANCIAL REVIEW
The board of Spectrum Shipping Limited wishes to announce the company"s results
for the six-month period ended 30 June 2003. As advised in the trading update
and profit warning issued on 17 July this year, headline earnings reflected an
85% decline when compared to the prior six-month period. Turnover is up
marginally at R13,6 million (2002: R13,3 million), despite a decline in gross
billings from R288,9 million to R267,0 million.
The trading environment has seen declines in perishable exports, with imports
reflecting increased shoe, tiling and textile trade. Activity was influenced by
the Rand, which was on average 26% stronger against the US dollar for each month
ended January to June 2003 versus the prior year. Though Spectrum does not
invoice in foreign currency, its clients sell or purchase goods in foreign
currency, where the substantially lower Rand trade value influences gross
billings. However, Spectrum"s sensitivity to the Rand is diminished due to the
low variable margins at which the clearing and forwarding industry operates.
Operating expenses increased in the current period mainly due to executive
director level, marketing and sales staff increases. The provision for doubtful
debts has also been increased to ensure that a conservative coverage ratio to
gross billings is maintained.
The review period has seen a decline in property rentals due to the merger of
two Durban offices into a single office. The company relinquished control over
its dedicated warehousing facility, outsourcing its requirement to a focused
warehouse operator.
Deferred taxation has been provided for in the current period with the rate of
taxation forecast to remain at current levels.
Cash flow of R8,1 million has been generated as a result of positive credit
management. The financial control function has been consolidated, with all cash
flow, issuing of credit, pricing of client business, system master file
amendments and financial results being controlled from Durban.
Capital expenditure in the period relates to new IT equipment and office
furniture in connection with the Durban office merger, the new Johannesburg
office and additional staffing. Spectrum has also undertaken to implement a wide
area network in order to facilitate the growth of the business and to ensure
greater stability and security of the company"s IT infrastructure across its
internet, e-mail and software connections.
OPERATIONAL REVIEW
Whilst the business is being realigned to generate strong organic growth, it
will also pursue `opportunistic acquisitions" that will enhance earnings. The
acquisition of Infomax, which has an extensive worldwide agency network as well
as over thirteen years of experience in the business of forwarding, illustrates
the strategic intent of the company going forward. Infomax"s integration was the
beginning of an intensive investment programme that will underpin the growth
that the Johannesburg operation has already started experiencing over the last
two months.
In meeting the challenges in reformulating Spectrum"s business model, management
has to invest in quality human, financial and physical resources. Eight Account
Executives have been newly appointed to manage existing clientele and source new
accounts. Already the company has started reaping the benefits of this
investment in that new accounts opened over the period under review are more
than fourfold that of the same period last year.
PROSPECTS
Excluding the vagaries of the Rand, looking forward the company will continue to
consolidate, re-align and invest in infrastructure, projects, acquisitions and
in particular skilled talented people that will ensure the successful
accomplishment of strategic objectives. Our revised business model founded on
innovation, greater value add and `connectivity" among regions should result in
higher client conversion ratios as well as retention over the coming months. By
exploiting our in-house intellectual capital and improved internal
communication, we are now in a position to cease outsourcing the profitable
services of our business. The benefits of this should be visible in the form of
an incremental growth in earnings over the latter part of the financial year
gathering momentum in the following financial year.
ACCOUNTING POLICIES
The accounts have been prepared in conformity with South African Statements of
Generally Accepted Accounting Practice and on a basis consistent with the prior
year.
DIVIDENDS
In accordance with the board"s current desire to re-invest earnings, a dividend
for the current financial period has not been declared.
SECRETARY
Mrs J A Lupton, ACIS, has been appointed Company Secretary of the company in
place of Mr M L Dollan who has resigned due to other commitments.
For and on behalf of the board
G H Gerber K J Gribnitz
Chief Executive Officer Chairman
18 August 2003
REGISTERED OFFICE AND POSTAL ADDRESS
5th Floor, 54 Winder Street, PO Box 6148, Durban, 4000
TRANSFER SECRETARIES
Computershare Limited, 70 Marshall Street, Marshalltown, 2107
AUDITORS
Compendium (Pretoria) Incorporated
EXECUTIVE DIRECTORS
G H Gerber (CEO), D C Kelly (CFO), R Singh, M R Walwyn
NON-EXECUTIVE DIRECTORS
K J Gribnitz, A A G Nairn, J P Nel, T Tomaszewski
Date: 25/08/2003 05:00:13 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
