| Mon 8 Dec 2003, 9:23 | | FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003 |
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NICTUS LIMITED - INTERIM REPORT - FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
NICTUS LIMITED
("Nictus")
Registration number 1981/001858/06
JSE Code: NCS
NSX Code: NCT
ISIN: NA0009123481
INTERIM REPORT - FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
The Nictus group has been very successful in change initiatives. Now the
challenge is to further improve the ordering mechanism to reach a top level of
EXCELLENCE, manageable throughout the organisation. The grand strategy and core
focus of the group will be to drive excellence in every aspect of the
organisation and through this establish the Nictus group as a leading entity in
the new economy.
Six months ended Change Year ended
Unaudited Unaudited % Audited
30 Sept "03 30 Sept "02 31 March "03
R"000 R"000 R"000
GROUP INCOME STATEMENT
Revenue 100,504 108,666 -8 241,397
Cost of sales (55,393) (55,802) -1 (116,613)
Claims paid and provided (25,631) (32,577) -21 (83,476)
Gross profit 19,480 20,287 -4 41,308
Net selling and
administrative expenses (15,767) (14,644) 8 (29,902)
Operating profit 3,713 5,643 -34 11,406
Interest paid (2,449) (1,277) 92 (2,954)
Net profit before taxation 1,264 4,366 -71 8,452
Taxation (309) (1,142) -73 (2,127)
Net profit for the period 955 3,224 -70 6,325
ABRIDGED GROUP BALANCE SHEET
Assets
Property, Plant and
Equipment 24,616 18,542 33 19,109
Goodwill on acquisition
of subsidiary 1,369 (340) 503 (226)
Investments 12,819 16,044 -20 14,086
Deferred tax 2,348 2,551 -8 2,052
Current assets 158,458 119,871 32 150,047
199,610 156,668 27 185,068
Equity and liabilities
Capital and reserves 38,526 37,677 2 40,778
Long-term liabilities 16,423 1,449 1033 11,413
Deferred taxation 3,395 2,857 19 3,149
Current liabilities 141,266 114,685 23 129,728
Interest bearing 19,003 17,234 10 20,059
Other 16,082 24,479 -34 16,216
Provision for claims 106,181 72,972 46 93,453
199,610 156,668 27 185,068
ARBRIDGED GROUP STATEMENT OF
CHANGES IN EQUITY
OPENING BALANCE 40,778 37,125 10 37,125
Net profit for the period 955 3,224 -70 6,325
Dividend paid (3,207) (2,672) 20 (2,672)
CLOSING BALANCE 38,526 37,677 2 40,778
ARBRIDGED GROUP CASH FLOW STATEMENT
Net cash (outflow)/inflow
from operating activities (15,806) 5,020 -414 12,378
Net cash (outflow)/inflow
from investing activities (7,546) (9,393) -20 (8,875)
Net cash inflow/(outflow)
from financing activities 2,848 1,406 102 13,719
NET MOVEMENT IN CASH AND CASH
EQUIVALENTS (20,504) (2,967) 591 17,222
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 36,583 19,361 89 19,361
CASH AND CASH EQUIVALENTS AT
END OF PERIOD 16,079 16,394 -2 36,583
SEGMENTAL REPORTING
Motor retail 194 1,006 -81 1,170
Furniture and carpet retail 847 670 26 3,997
Short-term insurance 2,481 3,692 -33 6,291
Finance and other 191 275 -31 (52)
Operating profit 3,713 5,643 -34 11,406
RATIOS
Number of ordinary shares issued 53,443,500 53,443,500 53,443,500
Earnings per ordinary share (cents) 1.79 6.03 11.83
Headline earnings per share (cents) 1.88 5.80 11.35
Net worth (cents) 72.09 70.50 76.30
Borrowings ratio 0.90 0.49 0.75
Interest cover 1.52 4.42 3.86
ACCOUNTING POLICIES
The statements have been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice. The accounting policies used in
preparing the interim financial statements are consistent with those used in
preparing the annual financial statements. Please take note that due to the
strategic nature of our group"s properties, our segmental analysis are now
restated to include the different properties under the various segments, which
utilise and manage them.
COMMENTS
Following on, the group"s previous two years, which were characterised with the
very successful restructuring of the Nictus group, the expected results for this
period were negatively affected by the adverse economic conditions, especially
in Namibia.
Management focused on the implementation of the necessary systems and controls
required, in order to sustain and uphold the immense growth and profitability
experienced in the previous two years. Furthermore, the group focused on the
upgrading and maintenance of their premises at Auas Delta Windhoek, the
administrative building in Randburg (RSA) and the administrative Head Office
namely Corporate House in Windhoek. During this time, the group"s Head Office,
insurance and finance sector were also relocated to Corporate House.
The retail sector continued experiencing the low buying power of the consumer,
which is attributed to the prevailing high interest rates still experienced.
Consumer sales did not respond as quickly as expected in line with the recent
cut in interest rates, however consumer sales are improving all the time.
The strengthening of the Rand and Namibian Dollar and the concurrent deflation
scenario impacted negatively on the group"s stock holding. Management is fully
aware of these changing economic conditions and strives to adopt a proactive
management philosophy.
GROUP PERFORMANCE
Results for the first six months compared to the corresponding period:
- Group turnover decreased by 8%
- Operating profit before taxation and interest decreased by 34%
- Interest paid increased by 92% due to the increase in long term
loans
- Net profit for this period decreased by 70%
- Net worth per share increased by 2.26% to 72.09 cents per share
The downtrend in the consumer market and the lack of buying power directly
impacted on our furniture and carpet retail segment, which is predominantly cash
sales related. The restructuring in the retail market in Namibia is still
continuing and with the recent interest rate cuts management remain optimistic
of better trading conditions for the next period.
The motor segment still experiences negative trading conditions, which directly
results from the high interest rates experienced until quite recently. In
relation to the RSA, the effect of the latest interest rate cuts in our local
market appears to have a slower positive impact on new vehicle sales. For
example; the light commercial vehicle market declined by 19% and the Namibian
market, as a whole declined by 8%, in comparison to an increase in the RSA
market. While vehicle prices declined with deflation, which impacted negatively
on stock holding and profitability, other divisions of the motor trade
strengthened considerably, which resulted in this segment remaining profitable.
The recent interest rates cuts negatively impacted on our insurance and finance
segment, with the direct result of affecting our investment income. The general
negative economic conditions and the drought experienced in Namibia also brought
the premium income under pressure. However, Management remains confident that
annual budget premium income objectives will be achieved with focused marketing
started in the period of consideration.
BORROWINGS
Borrowings increased to 90% of share capital and reserves, due to a structured
finance facility obtained, amounting to N$ 10 million, to finance property
improvements and operating activities.
Debentures of R5 million were issued for the acquisition of Corporate House. The
direct interest charge on these facilities impacted negatively on earnings and
headline earnings, amounting to 1,92 cents per share.
EARNINGS PER SHARE
Earnings per share for the six months were 1,79 cents (2002 - 6,03 cents),
compared to headline earnings per share of 1,88 cents (2002 - 5,8 cents).
Headline earnings have been determined by adjusting the net profit for the
period by R 51 000 for goodwill written off.
DIVIDEND
In accordance with our announcement in the annual financial statements a
dividend of 6 cents per share was paid on Monday the 21st of July 2003. The
Board proposes no interim dividend.
DIRECTORS
Due to health reasons WJ Kuhn resigned as director. Prof. SS Loubser was
appointed in his stead.
PROSPECTS
Management is anticipating improved forecasted economic conditions as well as
improved spending patterns of the consumer. With a stabilised economic
environment, management can focus on core business and profitability. Management
will continue to focus on key issues with specific emphasis on the Group"s risk
exposure in all key areas and placing mechanisms in place to limit the effect of
negative trading conditions and for all sectors to adhere to groups performance
criteria.
Directors and management are determined to improve the trading results in the
next period.
On behalf of the board:
N.C. Tromp
F.R. Van Staden
Windhoek, 24 November 2003
DIRECTORS
NC Tromp (Executive Chairman), JJ Fourie, Prof. SS Loubser,
JL Olivier, F R van Staden
TRANSFER SECRETARIES
Computershare Ltd
70 Marshall Street
Johannesburg 2001, South Africa
P.O. Box 61051
Marshalltown
2107, South Africa
R.S.A. REGISTERED OFFICE
27 Church Street
Pretoria, 0002, South Africa
P/Bag X947
Pretoria, 0001, South Africa
NAMIBIA REGISTERED OFFICE
5th Floor
Corporate House
17 Luderitz Street
Windhoek, Namibia
Private Bag 13231
Windhoek, Namibia
Reg. No. 81/011858/06 (RSA) F81/11858 (Namibia)
Date: 08/12/2003 07:00:08 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
