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Glovil - Interim Results, Results Of General Meeting, Acquisition And Withdrawal
Release Date: 10/10/2003 17:31:20 Code(s): GLL
Glovil - Interim Results, Results of General Meeting, Acquisition and Withdrawal
of Cautionary
GLOBAL VILLAGE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/017632/06)
("Glovil " or "the company")
Share Code: GLL
ISIN: ZAE000015426
- Interim Results for the period ended 31 August 2003
- Results of general meeting relating to a share repurchase
- Acquisition of properties
- Withdrawal of cautionary announcement
ABRIDGED CONSOLIDATED INCOME STATEMENT
Unaudited Audited
Six months ended Year ended
31 August 31 August % 28 February
2003 2002 Change 2003
R"000 R"000 R"000
TURNOVER 17,293 17,036 1,5% 35,194
Earnings before interest, tax
depreciation and amortisation 2,792 2,421 15,3% 5,004
Depreciation (1,099) (1,232) 10,8% (2,393)
Amortisation (465) (444) -4,7% (929)
Net interest received 249 131 90,0% 302
Net income before taxation 1,477 876 68,6% 1,984
Taxation - normal (560) - -100,0% (98)
- deferred (154) - -100,0% (659)
Net income for period 763 876 -12,9% 1,227
Dividends - - - -
Retained income for period 763 876 -12,9% 1,227
-
Earnings per share (cents) 0.8 0.9 - 1,31
Headline earnings per share (cents) 1,3 1.4 - 3,21
Number of shares ("000) 94,000 94,000 94,000
HEADLINE EARNINGS ARE DETERMINED AS FOLLOWS:
Attributable to ordinary
Shareholders 763 876 - 1,227
Amortisation of Intangible assets 465 444 - 929
Impairment loss - - - 193
Loss on Abandonment Note 1 - - - 211
Deferred tax - prior years Note 2 - - - 454
HEPS 1,228 1,320 -7,0% 3,014
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.
ABRIDGED CONSOLIDATED BALANCE SHEET
Unaudited Audited
Six months ended Year ended
31 August 31 August 28 February
2003 2002 2003
R"000 R"000 R"000
ASSETS
Non-current assets 32,252 33,068 32,955
Property, plant and equipment 16,990 16,796 17,322
Intangible assets 13,814 14,951 14,274
Loan to share incentive scheme 1,448 1,321 1,359
Current assets 8,903 4,504 5,813
Inventory 108 179 59
Accounts receivable 2,153 2,049 1,183
Bank and call balances and cash 6,642 2,276 4,571
TOTAL ASSETS 41,155 37,572 38,768
EQUITY AND LIABILITIES
Capital and reserves 34,331 33,217 33,568
Issued capital 39,616 39,616 39,616
Accumulated loss (5,285) (6,399) (6,048)
Non-current Liabilities 1,691 1,018 1,632
Defferred Tax 813 - 660
Long term liabilities 878 1,018 972
Current Liabilities 5,133 3,337 3,568
Accounts payable 4,116 2,266 2,687
Taxation 1,017 1,071 881
Total Equities and Liabilities 41,155 37,572 38,768
Number of ordinary shares issued 94,000 94,000 94,000
Net asset value per share (cents) 36.52 35.34 35,71
ABRIDGED CONSOLIDATED CASH FLOW
STATEMENT
Cash flow from operating activities 3,026 2,111 7,144
Cash effects of investing activities (861) (1,075) (3,797)
Cash effects of financing activities (94) 145 129
Net increase /(decrease) in cash and
cash flow equivalents 2,071 1,181 3,476
Cash and cash equivalents at
beginning of period 4,571 1,095 1,095
Cash and cash equivalents at the
end of year 6,642 2,276 4,571
STATEMENT OF CHANGES IN EQUITY
For the six-month period ended 31 August 2003
Share Share Distributable
capital premium reserves Total
R"000 R"000 R"000 R"000
Balance at 1 March 2003 940 38,676 (6,048) 33,568
Net profit for the period 763 763
Balance at 31 August 2003 940 38,676 (5,285) 34,307
COMMENTS
Operating results
The directors are pleased to announce the results for the first half of the year
ended 31 August 2003.
These consolidated interim financial statements were drawn up in compliance with
South African Statements of Generally Accepted Accounting Practice and the
company has complied with the requirements of the Companies Act, 1973 (Act 61 of
1973), as amended.
The accounting policies as set out in the 2003 annual report have been
consistently applied in producing these results.
Chairman"s Comments
The most notable improvement in our financial performance is the 191.8% growth
in our cash and cash equivalents due to our tight financial management and
effects of the group"s consolidation.
EBITDA has also increased by 15.3% reflecting far better operating efficiencies
in spite of our turnover having increased only marginally (due to the closure of
the market at Montecasino and due to us now only earning commissions at the
Homeworks / Emporium site).
Although net income before tax increased by 68.6% we have now used up our
assessed loss and the resulting tax charge has slightly reduced HEPS. The half-
year was notable for the many improvements in our executive and second level
management team, that has now put us in a position that we feel confident to
grow again while we continue to improve existing business operations.
Business performances were particularly strong from the International Fashion
Sale, which produced record results and from our Carbin and Durban Point
Waterfront markets.
We concluded an agreement to acquire a consortium"s shares (led by ex cofounder
GSR Israelsohn) as detailed in the results of general meeting paragraph below.
We acquired property subject to certain suspensive conditions of 50 000sqm of
land in Fourways on which to create a leisure retail precinct and we are in the
rezoning phase. Details of this property acquisition are included below.
Prospects
The second half of the year generally makes up the majority of the group"s year-
end profit. The largest event in the second half of the year is for the
renovation of Bruma Market World with a massive extension of the Kids World.
These changes are expected to raise the public attendance and stall days sold.
Chief Executive"s Note
Perhaps we have been reticent in growing, having resisted the temptation while
we focused on finding and placing better people in our business and tightening
the disciplines of our management systems and processes. Having hopefully
completed this process we are looking confidently forward to dynamic innovative
growth. By the way I am now certain that Glovil is the Coolest Company on the
JSE Securities Exchange South Africa ("JSE").
Results of general meeting to approve the share repurchase
Shareholders are referred to the announcement published on SENS on 15 August
2003 and the circular posted to shareholders on 17 September 2003, where it was
advised that Glovil and its wholly-owned subsidiary, Global Village Leisure
Retail (Pty) Ltd ("Glovil Retail"), had entered into an agreement to repurchase
23 425 140 ordinary shares in the company ("the repurchased shares") from a
consortium of shareholders led by GSR Israelsohn at a repurchase price of R5 856
285 or 25 cents per share ("the share repurchase"). Shareholders are now advised
that at the general meeting of Glovil shareholders held on Friday, 10 October
2003, the requisite majorities of shareholders approved the ordinary and special
resolutions to affect the share repurchase. It is expected that the registration
of the special resolutions by the Registrar of Companies, being the only
outstanding suspensive condition, will take place on Monday, 13 October 2003. 15
585 140 of the repurchased shares will thereafter be cancelled on Wednesday, 15
October 2003.
Property acquisition
The board of directors has resolved to establish a new value added leisure
retail environment market ("the new market"). The directors have considered the
current operating model of the company and believe that it will create value for
shareholders to own the property on which the new market will operate, rather
than rent and on-sell the space to its traders.
Further to the Acquisition of Properties and Further Cautionary Announcement
published on SENS on 28 July 2003, Glovil Retail has entered into an agreement
to purchase the following properties: Holding 39 Craigavon Agricultural
Holdings, held under deed of transfer T21482/1971 and Portion 108 of the farm
Witkoppen 194 IQ ("the property acquisition") for R 11 000 000 ("the property
consideration") from Peter Henry Regel ("the seller"). The property acquisition
will be settled in cash. The company is currently considering various methods of
raising the cash to fund the property acquisition, details of which will be
contained in a circular to shareholders referred to below. Occupation will be
given to Glovil Retail one month after the date that the property has been
transferred to Glovil Retail. The
property acquisition was subject to the rezoning of the properties being
successfully completed by 30 September 2003. If the rezoning was not completed
by this date, a three-month extension was to be allowed by the seller, provided
that it could be shown that the rezoning was probable and imminent. Such
extension has now been received.
The pro forma financial effects of the property acquisition on Glovil"s earnings
per share, headline earnings per share, net asset value per share and tangible
net asset value per share for the year ended 28 February 2003 are set out below.
These financial effects have been prepared for illustrative purposes only on the
basis stated, and because of their nature, may not give a true picture of the
company"s financial position and results of operations.
Notes Before(1) After % Change
(Cents) (Cents)
Earnings per share 2 & 3 1.31 0.08 -94.13%
Headline earnings 2 & 3 3.21 1.98 -38.32%
per share
Net asset value per 2 & 3 35.71 34.48 -3.44%
share
Tangible net asset 2 & 3 20.53 19.30 -5.99%
value per share
Number of shares in 94 000 000 94 000 000
issue
Notes:
1. Extracted from the audited financial statements of Glovil for the year ended
28 February 2003
2. Assumed that the property consideration has been financed by new debt at an
after tax interest rate of 10.5% and implemented on 1 March 2002
3. No assumption of revenue has been forecast in terms of the property
acquisition and attributed to these financial effects
Should the acquisition become unconditional, the transaction will result in a
category 1 acquisition in terms of the JSE Listings Requirements. In this
regard, a circular will prepared and posted to shareholders convening a general
meeting to approve the property acquisition. Shareholders will be kept informed
of the status of the property acquisition.
Withdrawal of cautionary announcement
As the details of the property acquisition have now been announced, shareholders
are advised that caution is no longer required when dealing in the company"s
securities.
On behalf of the board of directors
MARC ISRAELSOHN
Executive Chairman
10 October 2003
Accountants:
Horwath Leveton Boner
Sponsor:
Sasfin Corporate Finance
A division of Sasfin Bank Limited
