| Mon 15 Sep 2003, 16:41 | | RESULTS for the year ended 31 May 2003 |
|
PRELIMINARY REVIEWED RESULTS FOR LYONS FINANCIAL SOLUTIONS HOLDINGS LIMITED
LYONS FINANCIAL SOLUTIONS HOLDINGS LIMITED ("LYONS")
(Incorporated in the Republic of South Africa)
(Registration number 1997/022117/08)
(Share Code: LYS ISIN: ZAE000024709)
CONSOLIDATED INCOME STATEMENT
for the year ended 31 May 2003
Reviewed Audited
2003 2002
R"000"s R"000"s
Fee income 12 038 32 457
Depreciation (406) (235)
Impairment of goodwill (8 524) (924)
Discontinued operations (3 261) -
Other operating costs (34 060) (25 594)
Net (loss)/profit before (34 213) 5 704
interest and taxation
Net interest paid (3 924) (458)
Share of associate company (6 602) 11 403
attributable (loss)/earnings
Net (loss)/profit before (44 739) 16 649
taxation
Taxation 186 4 281
Attributable (loss)/earnings (44 925) 12 368
Headline (loss)/earnings
reconciliation
Attributable (loss)/earnings (44 925) 12 368
Share of associate company fair 4 787 (13 723)
value adjustment
Impairment of investment - 616
Profit on sale of subsidiary (532) -
Impairment of goodwill 8 524 924
Discontinued operations 3 261 -
Headline (loss)/earnings (28 885) 185*
*Restated in terms of Circular
7/2002 - Headline Earnings
(Loss)/earnings per share (11.81) 3.26
(cents)
Headline (loss)/earnings per (7.59) 0.05
share (cents)
Number of shares in issue 380 419 380 419
350 350
CONSOLIDATED BALANCE SHEET
31 May 2003
Reviewed Audited
2003 2002
R"000"s R"000"s
ASSETS
Non-current assets
Property, plant and equipment 1 435 1 944
Investment in associate company 8 913 21 100
Employee share trust loan 811 1 080
Intangible assets 139 8 663
Total non-current assets 11 298 32 787
Current assets 3 211 15 985
Total assets 14 509 48 772
EQUITY AND LIABILITIES
Capital and reserves (13 314) 31 611
Non-current liabilities
Long-term liabilities 10 630 3 210
Current liabilities
Current portion of long-term 2 216 1 370
liabilities
Other current liabilities 14 977 12 581
Total current liabilities 17 193 13 951
Total equity and liabilities 14 509 48 772
Net (liability)/asset value per (3.50) 8.31
share (cents)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 May 2003
Non-
Share Share distributable Accumulated
capital premium reserve profit/(los Total
s)
R"000"s R"000"s R"000"s R"000"s R"000"s
Balance at 31 May 2001 33 315 1 332 13 426 15 106
(audited)
Additional business - - (33) - (33)
sale costs
Surplus listing - 8 - - 8
provisions
Issue of shares to 5 4 157 - - 4 162
acquire business
Attributable net - - - 12 368 12 368
profit for the year
Balance at 31 May 2002 38 4 480 1 299 25 794 31 611
(audited)
Transfer of reserve - - (1 299) 1 299 -
Attributable net loss - - - (44 925) (44 925)
for the year
Balance at 31 May 2003 38 4 480 - (17 832) (13 314)
(reviewed)
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 May
2003
Reviewed Audited
2003 2002
R"000"s R"000"s
Operating activities (19 384) 10 608
Investing activities 5 856 (10 660)
Financing activities 5 766 4 456
Net cash (applied)/generated (7 762) 4 404
THE PRELIMINARY FINANCIAL RESULTS HAVE BEEN PREPARED IN ACCORDANCE WITH SOUTH
AFRICAN STATEMENTS OF GENERALLY ACCEPTED ACCOUNTING PRACTICE. THERE HAVE BEEN
NO CHANGES IN ACCOUNTING POLICIES DURING THE YEAR ENDED 31 MAY 2003. LYONS"
AUDITORS, DELOITTE & TOUCHE, HAVE REVIEWED THE PRELIMINARY RESULTS AND THEIR
REVIEW OPINION IS AVAILABLE FOR INSPECTION AT LYONS" REGISTERED OFFICE.
INDEPENDENT AUDITORS" REVIEW OPINION
The following paragraph represents an emphasis of matter included in the review
opinion of the independent auditors:
"Without qualifying our review opinion on the preliminary results of Lyons, we
draw attention to the paragraph headed "going concern" in the commentary to the
preliminary financial statements, which indicates that the group incurred a net
loss of R45 million for the year ended 31 May 2003 and that liabilities exceed
assets by R13 million at this date. These conditions, along with other matters
disclosed as "subsequent events" in the commentary to the preliminary financial
statements, indicate the existence of a material uncertainty that may cast doubt
on the ability of Lyons to continue as a going concern in the foreseeable
future."
Operational Review and Prospects
The 12 months under review reflects a turbulent period in the history of Lyons.
Gross revenue from operations decreased mainly to the closing down by management
of the Structured Finance division and the downsizing of operations, which
resulted in fewer deals being consummated. In addition, the rationalisation
program increased staff costs due to retrenchment packages paid in order to
close down various operations. Lyons" investment in the Lyons Corporate Lease
Fund ("LCLF") sustained a loss primarily due to the LCLF fair value adjustment
representing a loss in the current year as opposed to a gain in the previous
year.
GOING CONCERN
Lyons incurred an attributable loss for the year of R45 million, which has
resulted in a net equity deficit of R13 million at 31 May 2003. The directors
consider Lyons to be a going concern subject to the fulfilment of the offer
conditions discussed below.
SUBSEQUENT EVENTS
On Friday, 11 July 2003, Icarus Nominees (Proprietary) Limited ("Icarus")
acquired from Corpcapital Investments (Proprietary) Limited and Corpcapital
Investments Two (Proprietary) Limited collectively, 64,057,703 Lyons shares,
representing 16.8% of the issued share capital of Lyons for a cash consideration
of 5 cents per Lyons share.
Consequently, the Securities Regulation Panel ("SRP") has ruled that Icarus is
required to extend a mandatory offer to Lyons minority shareholders, in
accordance with the Securities Regulation Panel Code on Takeovers and Mergers.
Lyons minority shareholders were advised on:
Monday, 4 August 2003, that the Lyons board had received an offer in writing
from Icarus to acquire the following Lyons assets for a total cash consideration
of R 17,45 million ("the asset offer"):
45% of the shares in and claims against LCLF, directly held by Lyons; and
100% of the shares in and shareholders" claims against all the subsidiaries and
associates of Lyons and LCLF.
In addition, Icarus offered to acquire the 35% of the LCLF owned by The
Rainmakers Investment Trust for a cash consideration of R 13,6 million.
Tuesday, 5 August 2003, that the Lyons board had, subject to the conditions
precedent as set out in the asset offer announcement accepted the asset offer.
It was the intention of the Lyons board to make a cash distribution of
approximately 5 cents per Lyons
share to Lyons minority shareholders, pursuant to the successful conclusion of
the asset offer.
On Tuesday, 19 August 2003 Icarus announced its firm intention to make an offer
to Lyons minority shareholders in terms of section 440 of the Companies Act,
1973 (Act 61 of 1973) to acquire the balance of the issued shares (cum any
distributions) in Lyons that it does not already own at an offer price of 5
cents per share subject to the approval of the relevant regulatory authorities
being received, including but not limited to the JSE Securities Exchange South
Africa ("JSE"), SRP and the Competition Authorities.
If the asset offer is successful, Lyons anticipates de-listing from the JSE.
Icarus will in all likelihood inject fresh capital into the business to secure
the business as a going concern and to grow the operations in future.
Subsequent to 31 May 2003, the Lyons Board of Directors changed significantly
due to various resignations and the appointments of two new Executive Directors
and one new Non - Executive Director. In addition, the operational management
comprising Mr I Hewett, Mrs C Hewett and Mr J Tannenberger were placed on
suspension pending an enquiry and investigation. Mr R Mortimer was appointed as
acting Chief Executive Officer and Mr D Magua was appointed as Chief Operating
Officer.
Signed on behalf of the Board of Directors:
D Magua
15 September 2003
Registered address: Lyons Place, 10 Benmore Road, Morningside, Sandton
Postal address: PO Box 87621, Houghton, 2041
Telephone: +27 11 3242000
Fax: +27 11 3242001
www.lyons.so.za
Transfer Secretaries: Computershare Limited, Ground Floor, 70 Marshall Street,
Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107)
Board of Directors: M Judin* (Chairman) D Cuzen* R Mortimer I Pearce* D Magua I
Hewett -
* : non-executive
Date: 15/09/2003 04:30:07 PM Produced by the JSE SENS Department
