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Corpcapital - Estimated Group Realisation Statement And Reviewed Results For The
Release Date: 28/11/2003 07:18:16 Code(s): CPA
CORPCAPITAL - ESTIMATED GROUP REALISATION STATEMENT AND REVIEWED RESULTS FOR THE
YEAR ENDED 31 AUGUST 2003
CORPCAPITAL
(Share code CPA ISIN code ZAE 000033965)
ESTIMATED GROUP REALISATION STATEMENT AND
REVIEWED RESULTS FOR THE YEAR ENDED
31 AUGUST 2003
Estimate of group realisation and distribution
Net Actual Net Distri- Net
assets at and assets at bution assets at
August 2003 estimated estimated estimated
movements realisation realisation
values values
before after
distribution distribution
Rm
Ordinary shareholders"
equity reflected on the
balance sheet at
31 August 2003 567,1 567,1 567,1
Estimated cash flow
before 27 November 2003 (6,0) (6,0) (6,0)
Provision for estimated
future net income,
expenditure and taxation
after 27 November 2003 (107,8) (107,8) (107,8)
Expected proceeds from
options exercised
at less than 140
cents per share 20,7 20,7 20,7
Realised gains 206,4 206,4 206,4
Estimate of gains
still to be realised 71,7 71,7 71,7
Proposed distribution (483,0) (483,0)
567,1 185,0 752,1 (483,0) 269,1
Made up as follows:
Cash and cash equivalents
(including proceeds from
share options exercised
at less than 140 cents
per share and excluding
cash held by Proprietary
Consolidated Investments
and Corpcapital Life) 93,9 98,1 192,0 (129,9) 62,1
Listed investments
at market value 167,4 241,5 408,9 (353,1) 55,8
Debtors for
investments realised 114,6 (0,5) 114,1 114,1
Assets not yet realised 633,6 (270,9) 362,7 362,7
1 009,5 68,2 1 077,7 (483,0) 594,7
Interest bearing
liabilities (336,4) 179,8 (156,6) (156,6)
Non-interest bearing
liabilities (106,0) 44,8 (61,2) (61,2)
567,1 292,8 859,9 (483,0) 376,9
Estimated future net
income, expenditure and
taxation after
November 2003 (107,8) (107,8) (107,8)
567,1 185,0 752,1 (483,0) 269,1
Shares in issue
excluding consolidated
entities ("000) 331 091 331 091 331 091
Employee share options
under 140 cents ("000) 16 437 16 437 16 437
Expected shares in issue
for the purposes of
the distribution ("000) 347 528 347 528 347 528
Distribution per share (cents) 139,0
Balance of employee options ("000) 39 173
Fully diluted shares in issue ("000) 386 701
Balance of option proceeds adjusted for the
distribution (Rm) 27,6
Fully diluted net asset value per share after
distribution (cents) 76,7
Note:Contingent liabilities are not accounted for in the estimated
realisation.
The column "net assets at estimated realisation values after distribution" in
the above table provides estimated realisation values for the company"s assets
and constitutes a forecast on which Fisher Hoffman PKF ( Jhb) Inc, the
company"s auditors, have reported in the manner prescribed by the Listings
Requirements. The unqualified report is available for inspection at the
company"s registered office. The timing and success of realisation
transactions, the method by which realisation proceeds are distributed to
shareholders and the impact, if any, of the company"s contingent liabilities
are all assumptions underlying the estimated net realisation values. Variations
in these assumptions would affect the estimated values.
REVIEWED RESULTS FOR THE YEAR ENDED 31 AUGUST 2003
Consolidated balance sheet as at 31 August
Rm 2003 2002
Assets
Cash and cash equivalents 148,6 490,3
Trading securities and liquid assets 54,7 180,1
Advances and other accounts receivable 311,0 513,8
Inventories 254,7 214,2
Financial products assets 250,5 311,6
Investments 278,0 331,8
Preference shares 616,2
Deferred taxation 23,0
Associates and joint ventures 187,5 214,5
Property, plant, equipment and intangibles 76,4 87,0
1 561,4 2 982,5
Equity
Share capital and premium 365,7 598,3
Retained earnings and reserves 400,0 638,7
Shares held by consolidated entities (198,6) (229,8)
Ordinary shareholders" equity 567,1 1 007,2
Minority shareholders" interest 10,4 10,0
Total shareholders" equity 577,5 1 017,1
Compulsorily convertible loan 304,1
Total capital employed 577,5 1 321,3
Policy holders" interests in
Corpcapital Life
Investments, interest bearing securities
and deposits 3 142,5 1 697,8
Life fund 3 142,5 1 697,8
Liabilities 983,9 1 661,2
Long-term debt 305,0 274,8
Deferred taxation 39,7 38,4
Convertible loan interest 339,8
Financial products liabilities 250,5 289,6
Deposits and short-term debt 59,8 300,9
Trading liabilities 35,9 139,0
Accounts payable and taxation 293,0 278,7
1 561,4 2 982,5
Analysis of headline earnings adjustments
Rm 2003 2002
Attributable losses (197,4) (68,0)
Headline earnings adjustments 113,5 204,9
Headline (losses)/earnings (83,9) 136,9
Headline (losses)/earnings per share (cents) (25,0) 36,5
Goodwill written-off 113,5 223,4
Goodwill amortisation 56,3 105,0
Share of associates" and joint ventures" goodwill 13,0
Goodwill impairment 57,3 94,1
Negative goodwill 11,3
Exceptional items 48,7
Share of associates" and joint ventures"
exceptional items 9,1
Losses on discontinuance of activities
asset impairments and losses 28,5
closure costs 11,1
Minority shareholders" share of exceptional items
Taxation on goodwill and exceptional items (67,2)
Total headline earnings adjustments 113,5 204,9
Consolidated income statement
for year ended 31 August
Rm 2003 2002
Revenue 1 452,9 1 531,5
(Loss)/profit before taxation and
exceptional items (23,8) 146,4
Goodwill written-off (113,5) (223,4)
Exceptional items (48,7)
Loss before taxation (137,3) (125,7)
Taxation 56,3 (64,3)
Normal 56,3 2,9
Reversal of deferred taxation for goodwill
and exceptional items (67,2)
Loss after taxation (193,6) (61,4)
Attributable to minority shareholders 3,8 6,6
Attributable losses (197,4) (68,0)
Attributable loss per share (cents) (58,8) (18,1)
Weighted average number of shares in
issue ("000) 335 930 375 431
Consolidated cash flow statement
for the year ended 31 August
Rm 2003 2002
Cash (utilised)/generated from operations (9,5) 116,4
Taxation and dividends paid (233,0) (79,2)
Reduction in net banking assets (85,8) (104,5)
Investing activities (30,3) 67,6
Shares bought back (27,4) (65,8)
Financing activities 44,3 83,5
Net movement in cash and cash
equivalents (341,7) 18,0
Opening cash and equivalents 490,3 472,3
Closing cash and equivalents 148,6 490,3
Consolidated statement of changes in
equity for the year ended
31 August
Rm 2003 2002
Ordinary shareholders" equity at
beginning of year 1 007,2 1 357,9
Attributable losses (197,4) (68,0)
Dividend (41,5) (52,8)
Distribution of capital (173,8)
Treasury shares (bought back) (27,4) (65,8)
Changes in holding of consolidated
entities (164,1)
567,1 1 007,2
COMMENTARY
During the year Corpcapital announced and began to implement its strategy to
realise its assets and return capital to shareholders. Consequently, any
comparison of the results for the year with those of the previous year will be
misleading.
The results need to be viewed in the context of the strategy of the company to
unlock shareholder value communicated to shareholders on 28 February 2003 and
the timing of the Corpbuild and Vestacor disposals. The progress in the
implementation of the realisation process was communicated to shareholders on
29 August 2003. In these circumstances earnings are less relevant than the
amount and timing of distributions to shareholders dealt with below.
The disposal by the group of Corpbuild (which disposal became unconditional on
23 September 2003) and Vestacor (which disposal is anticipated to become
unconditional during December 2003) will result in the company earning a profit
in an amount of approximately R160 million based on the carrying value of these
investments as at 31 August 2003. In addition the company has earned income on
these assets from the effective date of their disposal until 31 August 2003.
The profit on disposal is not taken into account for the purposes of the 31
August 2003 financial results given that the relevant disposals were not
unconditional as at 31 August 2003.
In addition, the company has been operating off a lower capital base as a
result of the cash distributions to shareholders in an aggregate amount of R215
million (based on 331 091 744 shares in issue at 31 August 2003 excluding
shares held by consolidated entities) equivalent to 65 cents per share that
were effected within the last 12 months.
The strategy aims to bring the group"s business activities to an end within the
foreseeable future with the result that operations are regarded as
discontinuing notwithstanding that the company"s investments which are to be
realised or distributed to shareholders are in businesses that remain going
concerns. The accounting policies adopted for the period are in accordance with
the historic cost convention, except for the re-valuation of certain
investments to fair value and are, unless noted, consistent with the previous
year. The policies comply in all respects with South African Statements of
Generally Accepted Accounting Practice.
All investments including those in subsidiaries, joint ventures and associates
have been reflected at the lower of their carrying value after goodwill
amortisation and fair value.
Provision has been made for all onerous contracts which bind the company based
on the present value of the expected payments under those contracts less
expected benefits and recoveries.
The realisation statement which forms part of the directors" report reflects
the current estimate of eventual proceeds from the company"s remaining assets
and liabilities after providing for estimated revenues, costs and taxes still
to accrue or to be incurred.
Shareholders are referred to the announcement dated 13 November 2003 regarding
a proposed distribution by the company of 139,7 cents per share, subject to
approval of shareholders at the annual general meeting. Since that
announcement, the company has established that the number of shares in issue
will be increased by 16 437 000 shares as a result of the exercise of employee
share options and the cash to be distributed will be increased by the aggregate
strike price of the options in an amount of R20,7 million.
The result is that the company will distribute cash of R129,9 million. In
addition, as previously announced, the company will distribute 46 million Iliad
shares and 50 million Redefine units. The distribution per share will comprise
cash of 37,4 cents, 0,13236 Iliad shares and 0,14387 Redefine units. Valuing
these shares and units on the same basis as previously announced, the
distribution will be equivalent to 139 cents per share.
The salient dates for the distribution, revised to meet the JSE"s requirements,
are now as follows:
2004
Last date to lodge proxy forms Tuesday, 20 January
Annual General Meeting at 10:00 Thursday, 22 January
Last day to trade in order to qualify for
the distribution Friday, 30 January
Ordinary shares trade ex-distribution Monday, 2 February
Record date for distribution Friday, 6 February
Distribution paid out to shareholders Monday, 9 February
Share certificates may not be dematerialised or rematerialised between Monday,
2 February 2004 and Friday, 6 February 2004, both days inclusive.
Withdrawal of cautionary
Shareholders are referred to the cautionary announcement dated 13 November 2003
and are advised that caution is no longer required to be exercised by
shareholders when dealing in their securities.
The Ministerial investigation into the affairs of the company continues. The
board does not expect it to jeopardise the implementation of the company"s
strategy.
The company will continue to keep shareholders informed of developments
regarding the implementation of the strategy.
Eric Ellerine Benji Liebmann
Chairman Director
27 November 2003
Review report
The financial information set out under "Reviewed Results" has been reviewed by
Fisher Hoffman PKF ( JHB) Inc. The report is available for inspection at the
company"s registered office.
CORPCAPITAL LIMITED (1983/011384/06) 2 ARNOLD ROAD ROSEBANK JOHANNESBURG 2196
PO BOX 471917 PARKLANDS 2121 SOUTH AFRICA
TELEPHONE +27 11 283 0000 TELEFAX +27 11 283 0088 EMAIL info@corpcapital.com
DIRECTORS: E ELLERINE* (NON-EXECUTIVE CHAIRMAN) D BROOKING** E GROLMAN*
N N LAZARUS G B LIEBMANN W H TRENGOVE**
M H SACKS* T A WIXLEY** (*NON-EXECUTIVE) (**INDEPENDENT NON-EXECUTIVE)
(Share code CPA ISIN code ZAE 000033965)
