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Explorer Corporation Holdings Limited - Interim Results
Release Date: 15/10/2003 07:52:01 Code(s): EPL
Explorer Corporation Holdings Limited - Interim results
for the six months ended 30 June 2003 and withdrawal of
cautionary announcement
EXPLORER CORPORATION HOLDINGS LIMITED
("Explorer" or "the Company")
(Incorporated in the Republic of South Africa)
(Registration Number: 1997/010950/06)
Share Code: EPL
ISIN Code: ZAE 000039970
Interim results for the six months ended 30 June 2003 and
withdrawal of cautionary announcement
CONSOLIDATED GROUP INCOME Unaudited Unaudited Audited
STATEMENT for the 6 for the 6 for the
months months year
ended ended ended
30 June 30 June 31 Dec
2003 2002 2002
R"000
R"000 R"000
Revenue 12 968 15 958 34 337
Operating expenses and (10 127) (7 903) (37
cost of sales 680)
Profit/(loss) before 2 841 8 055 (3 343)
finance costs and
depreciation
Finance Costs (51) - (346)
Depreciation and (2 983) (3 814) (8 099)
amortisation
(Loss)/Profit before (193) 4 241 (3 688)
taxation
Taxation (264) (1 578) (2 830)
Net (loss)/profit for the (457) 2 663 (6 519)
period
(Loss)/earnings per share (0,40) 1,03 (10,4)
(cents)
Headline earnings per 1,99 2,09 2,6
share (cents)
Reconciliation of
headline earnings/(loss):
Headline earnings/(loss)
per share has been
calculated in terms of
AC306
Attributable earnings for (457) 2 663 (6 519)
the period
Adjusted for:
- Goodwill amortisation 2 720 2 720 5 038
- Impairment provision - - 3 103
Headline earnings/(loss) 2 263 5 383 1 622
CONSOLIDATED GROUP Unaudited Unaudited Audited
BALANCE SHEET for the 6 for the 6 for the
months months year
ended ended ended
30 June 30 June 31 Dec
2003 2002 2002
R"000 R"000
R"000
Assets
Property, plant and 4 125 5 031 3 729
equipment
Loans 2 366 2 623
Intangibles 4 554 9 277 2 835
Goodwill on acquisition 40 466 49 400 43 186
of ICC
Development expenditure - - 1 708
Net investment in finance 65 811 - 57 058
leases
Current assets 92 535 158 392 90 940
Total assets 207 493 222 466 202 084
Equity and liabilities
Shareholders funds
- Share capital and 132 298 51 770 127 298
premium
- Foreign translation (14 611) - (12
reserve 451)
- Retained earnings (47 410) (37 501) (46
953)
Non-current liabilities
- Long-term loans - 28 23 991
- Deferred taxation - 7 790 7 198
Current Liabilities 137 216 125 304 103 001
Convertible purchase - 75 075 -
consideration
Total equity and 207 493 222 466 202 084
liabilities
Weighted average number 113 570 258 000 62 851
of shares (`000)
Shares in issue (`000) 116 666 258 000 111 600
Net asset value per share 60,20 34,63 60,83
(cents)
Net tangible asset value 21,60 11,88 19,60
per share (cents)
CONSOLIDATED GROUP CASH Unaudited Unaudited Audited
FLOW STATEMENT for 6 for 6 for the
months months year
ended 30 ended 30 ended
June 2003 June 2002 31 Dec
R"000 R"000 2002
R"000
Cash Flow from Operating (69) 44 151 (45
activities 351)
Cash Flow from Investing (320) (54 908) (7 718)
activities
Cash Flow from Financing - (425) 39 227
activities
Net movement in cash and (389) (11 182) (13
cash equivalents for the 842)
period
Cash and cash equivalents (11 503) 2 339 2 339
at beginning of period
Cash and cash equivalents (11 892) (8 843) (11
at end of period 503)
CONSOLIDATED Share Share Foreign Accumulated Total
GROUP Capital Premium Translation Loss R"000
STATEMENT OF R"000 R"000 Reserve R"000
CHANGES IN R"000
EQUITY
Balance at 1 2 580 49 642 - (40 434) 11
January 2002 788
Net loss for - - - (6 519) (6
the period 519)
Foreign - - (12 451) - (12
translation 451)
reserve
Issue of 8 580 66 495 - - 75
shares 075
Balance at 11 160 116 137 (12 451) (46 953) 67
31 December 893
2002
Net loss for - - - (457) (457)
the period
Foreign - - (2 160) - (2
translation 160)
reserve
Issue of 507 4 493 - - 5 000
shares
Balance at 11 667 120 630 (14 611) (47 410) 70
30 June 2003 277
COMMENTS
BASIS OF ACCOUNTING
These consolidated, abridged interim financial statements
were drawn up in compliance with South African Statements
of Generally Accepted Accounting Practices and the
company has complied with the requirements of the
Companies Act.
ACCOUNTING POLICIES
The accounting policies as set out in the 2002 Annual
Report, with specific reference to AC112, AC419 and
AC430, which were applied for the first time in the
previous year in consolidating the foreign entity,
Industrial Credit Company Limited ("ICC"), have been
consistently applied in the current period.
AC 133 will be applied to the accounts as disclosed, for
the period 31 December 2003.
FINANCIAL REVIEW
The group reported a consolidated headline profit of R 2
263 000 for the period under review.
Revenue from leasing operations has decreased primarily
due to the strengthening of the Rand compared to the US
Dollar. Turnover, in US Dollar terms, has increased
since 2002.
Operating expenses and cost of sales have increased year
on year due to the decrease in foreign exchange gains on
leases (Kwacha to Dollar), as a result of the stabilising
of Zambia"s local currency (Kwacha) to the US Dollar.
This decrease amounted to R 3 273 000. Losses incurred
in the Explorer card business, which business has since
been distributed to shareholders by way of a dividend-in-
specie ("the distribution"), amounted to approximately R5
million.
Current assets include net investment in finance leases
of R 73 478 000 (31/12/2002: R 81 341 000).
BUSINESS REVIEW
The leasing activities as conducted in Zambia through the
wholly owned subsidiary ICC, continued to show good
growth with a number of new dollar based leases being
signed in Zambia. The leasing business in South Africa
was successfully launched with the first leases being
concluded. Based on the proven methodologies adopted, the
leasing business in South Africa is expected to
contribute steadily to the profitability of the group
over time.
ICC has successfully negotiated a further Multi Million
US Dollar facility during September 2003. These
facilities will be used for the gearing of the current
ICC leasing book and will ideally position ICC to expand
its leasing operations.
Shareholders are referred to the announcement dealing
with the distribution to shareholders of the South
African card business from the listed entity. As per the
announcement shareholders will continue to hold shares in
the listed and unlisted entities on a one for one basis.
Arcay Group Limited, have been engaged to explore the
opportunities of the unlisted South African card
business. Further information regarding this will be
distributed to shareholders in the appropriate manner,
and the pro forma financial effects are detailed below.
PRO FORMA FINANCIAL STATEMENTS
On the basis that the distribution had been in effect
from 1 January 2003, the split between operations for the
period ended 30 June 2003 will be as follows:
AS AT 30 JUNE Explorer Results Unbundled
2003 Group After Entity
Consolidated Unbundling R"000
R"000 R"000
Income Statement
Revenue 12 968 12 968 -
Operating (10 178) (5 147) (5 031)
expenses and cost
of sales
Amortisation and (2 983) (2 983) -
depreciation
Net profit/(loss) (193) 4 838 (5 031)
before taxation
Taxation (264) (264) -
(Loss)/profit (457) 4 575 (5 031)
after taxation
Headline earnings
per share:
Add back goodwill 2 720 2 720 -
amortisation
2 263 7 295 (5 031)
Headline earnings 1,99 6,42 -
per share (cents)
Net asset value 60,20 86,20 -
per share (cents)
Balance Sheet
Total current and 207 493 208 407 (914)
non-current
assets
Shareholders" 70 277 117 686 (47 409)
funds (including
accumulated loss)
Total liabilities 137 216 90 721 46 495
On the basis that the distribution had been in effect
from 1 January 2003, the pro forma results indicate a
material positive impact on headline earnings per share
of 6,42 cents (1,99 cents consolidated) and net asset
value per share of 86,20 cents (60,20 cents
consolidated).
ISSUE OF SHARES
The share issue pertained to the purchase of the
shareholding in the business which owned the smart card
technology, whereby 5 066 752 shares were issued at 98,65
cents per share.
TRANSFER OF LISTING
It is anticipated that application will be made to the
JSE to transfer the listing of Explorer from the venture
capital market to the financial services sector of the
main board. This is as a result of the distribution of
the Explorer card business referred to above. The
application to the JSE will be made as soon as the
company meets the requirements for a main board listing,
at which point in time shareholders will be asked to
approve a change in the name of the company.
PROSPECTS FOR THE GROUP
The strategy of the Group is to establish its presence in
sub-Saharan countries, including South Africa, and to
expand its range of products and services.
DIVIDENDS
The present policy of the company is not to declare or
distribute dividends, as all profits are retained and
utilised to fund further growth and expansion.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Following the renewal of the cautionary announcement on
03 October 2003, certain assurances required by the
company were not forthcoming with regard to the
transaction. Accordingly the directors consider that it
is no longer necessary for shareholders to exercise
caution when dealing in their securities and the
cautionary announcement is withdrawn.
For and on behalf of the Board
N. Justin Chinyanta
Chairman
14 October 2003
Registered Office: Transfer Secretaries:
C/o Loita Capital Computershare Limited
Partners SA Limited 70 Marshall Street
2nd Floor, East Wing JOHANNESBURG
11 Alice Lane 2001
SANDTON
2146
www.explorercorp.com
Explorer Direct:
0860 300 600
Directors:
N J Chinyanta*, Y Bazian, C Van Nieuwkerk, K
Jones*, A Fletcher*, A Karrim*, N Molver*
*Non-Executive
Sponsor
Arcay Group Limited
Date: 15/10/2003 07:52:09 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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