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IMR Investments Limited -
IMR INVESTMENTS LIMITED
(formerly The Appleton Group Limited known as TAG Limited)
Incorporated in the Republic of South Africa
Reg No. 1998/017351/06
Share code: IMR
ISIN: ZAE000044004
INTERIM RESULTS FOR THE PERIOD ENDED 31 AUGUST 2003
Group Income Statement
Unaudited Reviewed Audited
Six Months Six months Year
Ended Ended Ended
31 Aug 2003 31 Aug 2002 28 Feb 2003
R"000 R"000 R"000
Revenue 613 361 2 214
Net interest received 374 248 417
Dividends received 111 87
Realised profit on investment 124 1 710
Other income 115 2 -
Operating expenses (3 205) (1 248) (3 615)
Operating expenses (2 585) (1 248) (3 615)
Provisions (620)
(Loss)/profit for the period (2 592) (887) (1 401)
Goodwill amortised - (851) (1 701)
Unrealised (loss)/profit
on investment (1 489) 1 700 1 140
Loss before taxation (4 081) (38) (1 962)
Taxation (3) (4) (4)
Attributable loss for the period (4 084) (42) (1 966)
Reconciliation of headline loss
Attributable loss for the period (4 084) (42) (1 966)
Goodwill amortised 851 1 701
Unrealised profit/(loss) on
investments 1 489 (1 700) (1 140)
Headline earnings/(loss) (2 595) (891) (1 405)
Basic and fully diluted
(loss)/earnings per
share (cents) (13.8) (0.14) (6.4)
Headline (loss)/earnings
per share (cents) (8.8) 2.6 (0.9)
Headline loss per share (cents)
as restated* (8.8) (2.9)* (4.5)*
Tangible net asset value
per share 15.3 30.4 27.8
Net Asset Value per share
(cents) 15.3 33.2 27.8
*Restated in terms of the
SAICA Circular 7/2002 on
headline earnings.
ABRIDGED CASH FLOW STATEMENT
Unaudited Reviewed Audited
31 Aug 2003 31 Aug 2002 28 Feb 2003
R"000 R"000 R"000
Cash flows from operating
activities (1 912) (174) (681)
Cash flows from investing
activities (441) (1 305) 2 438
Cash flows from financing
activities 1 650 (115) (362)
Net (decrease)/increase cash
and cash equivalents (703) (1 594) 1 395
Cash and cash equivalents at
beginning of the period 6 831 5 436 5 436
Cash and cash equivalents at
end of the period 6 128 3 842 6 831
GROUP BALANCE SHEET
Unaudited Reviewed Audited
Six Months Six months Year
Ended Ended Ended
31 Aug 2003 31 Aug 2002 28 Feb 2003
R"000 R"000 R"000
Loans receivable 3 666 452 730
Share trust loan - 1 000 1 175
Fixed assets 502 128 240
Goodwill - 850 -
Current assets 9 901 16 243 14 941
Current receivables 284 867 426
Investments 3 489 11 486 7 684
Short-term deposits and cash 6 128 3 890 6 831
14 069 18 673 17 086
EQUITY AND LIABILITIES
Capital and reserves 4 187 10 093 8 450
Share capital and premium 3 175 3 038 3 205
Non-distributable reserves 7 016 6 882 7 165
Distributable reserves (6 004) 173 (1 920)
Current liabilities 9 882 8 580 8 636
Loans payable 1 961 1 630 1 380
Current payables 7 921 6 902 7 256
Bank overdraft - 48 -
14 069 18 673 17 086
ABRIDGED STATEMENT OF CHANGES IN EQUITY
Unaudited for six months ended 31 August 2003
Share Non-
Capital and Distributable Distributable
Premium Reserves Reserves Total
R"000 R"000 R"000 R"000
Balance at
28 February 2002 3 100 7 165 46 10 311
Movement for
the period (62) (283) 127 (218)
Balance at
31 August 2002 3 038 6 882 173 10 093
Movement for
the period 167 283 (2 093) (1 643)
Balance at
28 February 2003 3 205 7 165 (1 920) 8 450
Treasury stock
cancelled
during the period (30) (30)
Net loss for
the period (4 084) (4 084)
Share premium
adjustment to
NDR on treasury
stock (149) (149)
Balance at
31 August 2003 3 175 7 016 (6 004) 4 187
CHIEF EXECUTIVE OFFICER"S REPORT
The period under review marked a significant change in the strategic direction
of IMR (the company).
At an operational level the company has increased its staff complement from 3 to
8 individuals. Whilst the South African macro-economic environment continued to
exhibit volatility, the company continued its strategy both in an advisory
capacity and as a principal investor, in pursuing investment opportunities
offering growth potential.
IMR"s main focus is to develop and implement sound processes around the
financial, administrative and sales components of its businesses.
Consistent with the stated strategy, the company continued to convert its assets
into cash, which was applied to the development of its operating capacity and
intellectual resources. We are confident that this will produce worthwhile
benefits in the future.
The company completed its head office move and is well positioned to achieve
maximum operating efficiencies without incurring significant infrastructural
expenditure.
REVIEW OF OPERATIONS
A. NET ASSET VALUE (NAV)
NAV declined in the period by approximately R4.0 million. This was largely as a
result of an unrealised loss on listed investments (R1.5 million), the
allocation of cash to expanding infrastructure (R800 000) and accounting
provisions relating to legal matters (R600 000) and listing related costs (R250
000). The balance relates to cash utilised in operations and investing
activities from which future benefits should accrue.
Revenue consists of interest and dividends as well as realised and unrealised
profit on the disposal and write up of investments.
Tangible net asset value decreased to 15 cents per share (2002: 33 cents) and is
detailed in the balance sheet.
As a result of the realisation of certain investments, cash balances were higher
at R6.1 million (2002: R3.8 million).
B. CONTINGENT LIABILITIES
The board has consistently disclosed the progress of certain outstanding
litigation against the company.
It is important to note that the litigation in question arose out of activities
undertaken by a subsidiary of Appleton Asset Management which was subsequently
purchased by the company while it traded as TAG Limited. The matters have been
ongoing for four years and were a legacy issue inherited by the current
management of IMR.
Subsequent to the period under review one of the matters outstanding was
successfully settled at a cost of R500 000. Suitable provisions were raised in
relation to this amount and are reflected in the income statement.
In the opinion of the board of directors, other potential claims are adequately
covered by provisions and possible counterclaims.
C. LISTED INVESTMENTS
1. IMR has a significant interest in Labat Holdings Limited (Labat). The
diminution of the Labat share price contributed significantly to the unrealised
loss on investments discussed above. The closing share price of Labat was 30
cents as at 31 August 2003 (2002: 60 cents). IMR owns approximately 5% of the
issued share capital (9.5 million shares) of Labat Holdings Limited.
2. IMR owned approximately 32 million shares in Appleton Limited. These shares
were realised at 9 cents per share and contributed R3 million of cash inflows
during the period under review.
D. UNLISTED INVESTMENTS
1. As disclosed in the annual report, the company"s involvement
with two premier online gaming sites namely: Lottfun.co.za and
LottoManager.co.za is progressing as anticipated.
2. The company"s involvement in point-of-sale software business, Icon Retail has
performed adequately.
3. IMR"s involvement with the Umzimgazi Mining Consortium is progressing
according to budget.
E. OTHER DEVELOPMENTS
1. As previously disclosed, a circular to shareholders, dated
29 September 2003 (incorporating revised listing particulars) details the
following: A renouncable Rights offer by IMR of 82 million shares at a
subscription price of 6 cents per share, in the ratio of 3 new shares for every
1 share held in IMR. The Rights offer commenced on Monday,
29 September 2003 and closes on Friday, 17 October 2003.
The JSE Securities Exchange South Africa has granted a listing for
82 million letters of allocation with effect from the commencement of trading on
Friday, 19 September 2003 to the close of trading on Friday, 10 October 2003
(both dates inclusive).
2. The company envisages raising between R2 million and R5 million before costs.
3. The staff and management of IMR have been occupied with a number of
investment and advisory opportunities during the period under review.
Significant resources have been allocated to the assessment of these
opportunities.
F. PROSPECTS AND OUTLOOK
The board will continue to pursue strategies to generate maximum benefit and
extraction of wealth for shareholders.
The board continues to maintain a positive, but cautious outlook on the
potential performance of the company for the remainder of the financial year.
The board expresses its appreciation to staff, attorneys, auditors and advisers
for their efforts.
G. ACCOUNTING POLICIES
The interim financial statements have been prepared in accordance with the South
African Statements of Generally Accepted Accounting Practice and are consistent
with the accounting policies used in the previous period.
These results are available for inspection at the company"s registered office.
By order of the Board
W Rosenberg
Chairman
S D Shane
Financial Director
J Schmulian
Chief Executive
Johannesburg
10 October 2003
Registered Address:
1st Floor, 3 Melrose Square, Melrose Arch 2132
PO Box 97, Melrose Arch 2076
Telephone: (011) 684-1055/6/7
Facsimile: (011) 684-1058
Directors:
Executive: Stanley D Shane (CEO), Jason Schmulian (Financial),
Armin H Diem* (Austria), Scott M Campbell* (New Zealand),
Wayne Rosenberg (Chairman)
*Non-executive
Transfer Secretaries
Computershare Limited,
70 Marshall Street,
Johannesburg
2001
Date: 10/10/2003 02:04:26 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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