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Zenith Concessions Limited - Abridged Unaudited Financial Results For The Six
Months Ended 31 December 2003
Zenith Concessions Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1994/009012/06)
Share code: ZNT ISIN: ZAE000009064
("Zenith" or "the company")
ABRIDGED UNAUDITED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2003
BALANCE SHEETS
(Figures in R"000) Unaudited Unaudited Audited
as at as at as at
31 Dec 31 Dec 30 Jun
2003 2002 2003
ASSETS
Non-current assets 401 2,742 1,765
Fixed assets 251 1,865 1,615
Intangible assets 150 877 150
Current assets 561 30 561
Trade and other 529 5 530
receivables
Cash and cash equivalents 32 25 31
Total assets 962 2,772 2,326
EQUITY AND LIABILITIES
Capital and reserves 593 (740) (1,391)
Issued capital 8,262 8,262 8,262
Accumulated loss (7,669) (9,002) (9,653)
Non-current liabilities
Loans payable 48 3,040 3,381
Current liabilities
Accounts payable 321 472 336
Total equity and 962 2,772 2,326
liabilities
Net asset value per share 0.2 (0.3) (0.5)
(cents)
Net tangible asset value 0.2 (0.6) (0.6)
per share (cents)
Shares in issue (`000) - 265,552 265,552 265,552
closing
INCOME STATEMENTS
(Figures in R"000) Unaudited Unaudited Audited
Six Six Year to
months to months to 30 Jun
31 Dec 31 Dec 2003
2003 2002
Revenue and other income 2,444 1 150
Operating costs (460) (1,434) (2,136)
Operating profit/(loss) 1,984 (1,433) (1,986)
Net finance costs - (41) (140)
Net profit/(loss) for the 1,984 (1,474) (2,126)
period
Profit/(loss) per share 0.7 (0.6) (1.1)
(cents)
Gains on loans written- (0.8) - -
off
Profit on sale of fixed (0.1) - -
assets
Headline loss per share (0.2) (0.6) (1.1)
(cents)
Shares in issue (`000) - 265,552 265,552 191,771
weighted
STATEMENTS OF CHANGES IN EQUITY
(Figures in R"000) Share Share Accumulated Total
capital premium loss
Balance at 442 5,357 (7,527) (1,728)
1 Jul 2002
Net loss for the - - (2,126) (2,126)
period
Issue of share 2,213 250 - 2,463
capital
Balance at 2,655 5,607 (9,653) (1,391)
30 Jun 2003
Net profit for the - - 1,984 1,984
period
Balance at 2,655 5,607 (7,669) 593
31 Dec 2003
CASH FLOW STATEMENTS
(Figures in R"000) Unaudited Unaudited Audited
Six Six Year to
months to months to 30 Jun
31 Dec 31 Dec 2003
2003 2002
Cash flows from operating 1,750 (1,337) (1,918)
activities
Cash generated 1,750 (1,296) (1,779)
by/(utilised in)
operating activities
Net finance cost - (41) (139)
Cash flows from investing 1,584 (2,166) (1,465)
activities
Plant and equipment - (1,789) (1,315)
acquired
Intangible assets - (377) (150)
acquired
Plant and equipment 1,584 - -
disposed of
Cash flows from financing
activities
Loans raised/(repaid) (3,333) 3,499 3,386
Increase in cash and cash 1 (4) 3
equivalents
Cash and cash equivalents 31 29 28
at beginning of period
Cash and cash equivalents 32 25 31
at end of period
REVIEW OF OPERATIONS
A number of major events, which materially changed the operations and prospects
of Zenith, took place during the period under review:
It was announced on 4 August 2003 that corporate restructuring specialists,
Gandalf Trust ("Gandalf"), had acquired control of Zenith and reconstituted the
board of directors.
Gandalf, on behalf of the company, negotiated for shareholders" loans amounting
to R2 million to be written off, which effectively recapitalised the balance
sheet and restored the company to solvency.
At an operational level (and as detailed in the 2003 annual report), the
company"s diamond recovery operations had been suspended at the end of
February 2003 due to a lower than anticipated grade of stone, weaker than
expected diamond prices and the strength of the Rand against the US dollar.
These unfavourable conditions continued after year-end and, given the cash flow
strain created by the financing of the plant and equipment in the absence of
sustainable revenue, it was decided to sell the plant and equipment. The
company still owns the diamond recovery rights to the tailings dumps acquired
from Mafikeng Diamonds (Pty) Ltd and market conditions are continually being
assessed in this regard.
It was announced, on 3 September 2003, that Zenith had acquired the entire
issued share capital of Jigmining (Pty) Ltd ("Jigmining") subject to certain
conditions and, on 12 December 2003, that the conditions precedent (other than
regulatory and shareholder approval) have been fulfilled. The effective date of
the proposed transaction, which will result in a change of name to Jigmining
Holdings Ltd and a change in financial year-end to February, is 31 October 2003.
These developments, excluding the proposed Jigmining acquisition, have resulted
in the company"s net asset value being restored to 0.2 cents per share ("cps")
as at 31 December 2003. These events also explain the difference between the
company"s attributable profit of 0.7 cps and headline loss of -0.2 cps during
the period under review.
PROSPECTS
The future prospects of the company are closely tied to the proposed Jigmining
acquisition. With forecast profits (as detailed in the 12 December 2003
announcement) of 3.4 cps for the twelve months to February 2005, the board is
optimistic that the company"s fortunes will be restored by the Jigmining
acquisition. Transaction delays have, however, been experienced as a
consequence of uncertainties relating both to the imminent change in status of
the Venture Capital Market of the JSE Securities Exchange South Africa ("the
JSE"), as well as to the listing process of the Alternative Exchange ("AltX") of
the JSE. These uncertainties have now been largely resolved and further
documentation for submission to the JSE is currently being prepared.
Shareholders will be advised as soon as a decision has been made by the JSE as
to the company"s eligibility for listing on AltX.
COMMENT ON LEGAL ACTION
Further to the comment included in the announcement of 15 October 2003,
shareholders are advised of a recent decision by the High Court of South Africa
(Transvaal Provincial Division) in terms of which the company was ordered to pay
the amount of R2 million to the Lutzkie Familie Trust ("Lutzkie") subsequent to
a cheque issued by the company in 1997 not being honoured. The cheque was
issued as part payment of the purchase price for the acquisition of a mine from
Lutzkie. The company has requested leave to appeal against the decision of the
High Court. Any costs incurred in proceeding with the matter will be covered by
Gandalf in terms of the warranty referred to in the 15 October 2003
announcement. There exists some uncertainty as to the continued existence of
the agreement for the purchase of the mine as well as to Lutzkie"s ability to
deliver the asset forming the subject matter of the agreement. Once the
continued existence of the agreement and the deliverability of the mine have
been established, the company shall consider its position in the matter.
ACCOUNTING POLICIES
The accounting policies of the company comply in all material respects with
South African Statements of Generally Accepted Accounting Practice and Schedule
4 of the Companies Act of 1973. These policies are consistent with those
adopted during the previous financial year.
DIVIDENDS
No dividends were declared or recommended for the period.
For and on behalf of the board
KJ Gribnitz
Chairman
Pretoria, 15 April 2004
Directors: KJ Gribnitz (Executive), JP Nel*, PE du Preez*, PA Byrne* (*Non-
executive)
Corporate advisor Sponsor
Radagast Capital (Proprietary) Limited LPC Manhattan Sponsors (Pty) Ltd
Transfer secretaries Registered address
Computershare Limited Mirkwood Estate, Klipkop - JR 396, Gauteng
Date: 15/04/2004 04:53:05 PM Produced by the JSE SENS Department
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