| Mon 17 May 2004, 12:33 | | INTERIM RESULTS FOR THE PERIOD ENDED 29 FEB 2004 |
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SEKUNJALO INVESTMENTS LIMITED - SEKUNJALO UNAUDITED INTERIM RESULTS FOR THE
PERIOD ENDED 29 FEBRUARY 2004
SEKUNJALO INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1996/006093/06
Share Code: SKJ ISIN: ZAE000017893
("Sekunjalo")
SEKUNJALO UNAUDITED INTERIM RESULTS FOR THE PERIOD ENDED 29 FEBRUARY 2004
FINANCIAL HIGHLIGHTS
* GROUP HEADLINE EARNINGS R1,785m
* GROUP TURNOVER R129.5m
* EARNINGS PER SHARE 6.30 cents
* HEADLINE EPS 1.50 cents
GROUP BALANCE SHEET
Unaudited Unaudited Audited
6 months to 6 months to to
29 February 28 February 31 August
2004 2003 2003
R"000 R"000 R"000
ASSETS
Non-current assets 119 625 121 297 125 247
Property, plant and equipment 56 418 66 916 63 768
Goodwill and intangible assets 12 291 15 895 12 523
Pharmeceutical dossiers 28 050 29 750 28 900
Biological assets 5 370 - 6 370
Investments (including associate companies) 13 109 6 250 6 986
Loans receivable 4 386 2 486 6 700
Current assets 137 770 159 505 142 298
Inventories 57 333 47 508 31 859
Trade and other receivables 60 221 59 084 74 739
Bank and cash on hand 20 216 52 913 35 700
TOTAL ASSETS 257 395 280 802 267 545
EQUITY AND LIABILITIES
Capital and reserves
Issued capital 214 212 127 837 135 812
Non-distributable reserves 39 39 39
Accumulated loss (103 719) (120 071) (111 218)
110 533 7 805 24 633
Non-current liabilities
Interest-bearing borrowings 71 310 109 157 139 454
Non-interest-bearing borrowings 465 1 842 914
Deferred taxation 2 231 (12 041) 2 248
Minority shareholders" interest (1 555) 52 540 2 151
Current liabilities 74 412 121 499 98 145
Trade and other payables 51 242 76 424 68 905
Bank overdraft 21 711 41 140 26 308
Receiver of revenue 1 459 3 935 2 932
TOTAL EQUITY AND LIABILITIES 257 395 280 802 267 545
ABRIDGED CASH FLOW STATEMENT FOR THE PERIOD ENDED 29 FEBRUARY 2004
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
29 February 28 February 31 August
2004 2003 2003
R"000 R"000 R"000
Cash flows from operating activities (23 879) (17 913) 5 069
Cash utilised by investing activities 757 (14 552) (7 256)
Cash flows from financing activities 12 235 28 409 (4 250)
Net decrease in cash and cash
equivalents (10 887) (4 056) (6 437)
Cash and cash equivalents at beginning
of period 9 392 15 829 15 829
Cash and cash equivalents at end of period (1 495) 11 773 9 392
GROUP INCOME STATEMENT
Unaudited Unaudited Audited
6 months to 6 months to to
29 February 28 February 31 August
2004 2003 2003
R"000 R"000 R"000
REVENUE 129 514 176 801 356 664
Operating income 9 217 12 754 38 009
Finance cost (4 149) (9 258) (24 956)
Profit before tax 5 068 3 496 13 053
Taxation (215) (1 362) (10 521)
Income after tax 4 853 2 134 2 532
Income from associates - - 80
Income 4 853 2 134 2 612
Minority shareholders" interest 2 646 (798) 9 671
Net Income for the period 7 499 1 336 12 283
Headline earnings
Attributable Income 7 499 1 336 12 283
Amortisation of goodwill 95 98 190
Amortisation of dossiers 276 165 330
Amortisation and impairment of patents
and trademarks 139 205 685
Profit on disposal of property, plant
and equipment - - (155)
Loss on sale of division - - 2 396
Loss on sale of property, plant and equipment - - 242
Software development costs written-off 76 - 74
Unrealised profit on loan acquired (6 299) - -
Headline earnings 1 785 1 804 16 045
- - -
Number of shares in issue 234 143 393 8 688 848 88 688 848
Headline earnings per share (cents) 1.50 2.03 18.09
Earnings per share (cents) 6.30 1.51 13.85
Diluted earnings per share (cents) 6.24 1.47 13.57
NOTE:
1. The calculation of earnings per share is based on a profit of R7 499 000
(2003: R1 336 000) and a weighted number of 119 058 478 (2003: 88 688 848)
ordinary shares in issue throughout the year.
2. The calculation of headline earnings per share is based on a headline
profit of R1 785 000 (2003: R1 804 000) and a weighted number of 119 058
478 (2003: 88 688 848) ordinary shares in issue throughout the year.
3. The calculation of diluted earnings per share is based on a profit of R7
499 000 (2003: R1 336 000) and a diluted number of 120 141 081 (2003: 90
527 760) ordinary shares in issue, assuming all the share options in
existence at balance sheet date were issued.
GROUP STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 29 FEBRUARY 2004
Non-
distri- Accu-
Share Share butable mulated
capital premium reserves CRRF loss Total
R"000 R"000 R"000 R"000 R"000 R"000
Balance at 31 August 2002 1 554 126 283 39 - (106 176) 21 700
Fundamental error - - - - (523) (523)
Transfer to capital
redemption reserve
fund (CRRF) - - - 16 802 (16 802) -
Premium on redemption of
preference shares - - - (8 827) - (8 827)
Net profit from ordinary
activities - - - - 12 283 12 283
Balance at 31 August 2003 1 554 126 283 39 7 975 (111 218) 24 633
Increase in share premium - 78 399 - - - 78 399
Issue of shares 2 - - - - 2
Net profit from ordinary
activities - - - - 7 499 7 499
Balance at 28 February 2004 1 556 204 682 39 7 975 (103 719) 110 533
OVERVIEW
The interim results have been prepared on the historical cost basis in
accordance with South African Statements of Generally Accepted Accounting
Practice. Accounting policies which have been applied are consistent in all
material respects with those applied in the previous year.
COMMENTARY
Sekunjalo Investments Ltd has produced satisfactory interim results for the
period ended 29 February 2004. The results have been achieved despite the
significant strengthening of the rand, which has influenced the revenue and
margins of the group"s three major businesses in the fishing, healthcare and IT
sectors. As in the past, the interim results of Sekunjalo are impacted upon by
the seasonal fluctuation in the fishing and health care industries. The group
expects to deliver a much stronger performance in the second half of the
financial year.
Significantly, the group has strengthened its balance sheet by retiring debt of
R80 million resulting in reduced finance costs by 50%, thereby positioning
itself for strong growth in the year ahead.
The earnings of the group increased to R7.499 million from R1.336 million for
the comparable period in 2003. Similarly earnings per share increased
substantially from 1.51 cents to 6.30 cents per share. Headline earnings have
decreased marginally from R1.804 million to R1.785 million. The decrease in
headline earnings is mainly attributed to the strengthening of the rand by
approximately 40% in the last financial year.
Review of investments
Premier Fishing SA (Pty) Ltd
Premier Fishing, one of South Africa"s major exporters of lobster, squid and
hake has seen a substantial decline in revenue and margins owing to the
strengthening of the rand. An alternative strategy of joint ventures in African
countries has helped set off rand strength. The company"s growth in the cold
storage and organic fertiliser businesses continues to add value and profits to
the group"s bottom line. Branded products of Pecks, Redro, Seagro and South
Atlantic Lobster continue to enjoy a pre-eminent position in the market place.
As part of Premier Fishing"s strategy to support external quota holders and its
commitment to gender empowerment, it has appointed a black female executive to
head the transformation portfolio of the company.
Sekunjalo Health Care
Sekunjalo Health Care, which now consists of independent, autonomous business
units Rapimed, Sekpharma, New Promex Corporation and Health System Technologies,
continues to compete in an environment of regulatory uncertainty and industry
turmoil. Sekunjalo Health Care is currently reviewing a number of potential
investments which could add value to its underlying subsidiaries.
Sekpharma (Pty) Ltd
Sekpharma continues to market branded generic products such as Betnovate,
Dermovate, asthma medication such as Becotide, Becloforte and Volmax, as well as
anti-microbial such as Fortum. The company has entered into a number of joint
ventures with multinationals and is seeking to add to its product portfolio
through acquisitions in the next 18 to 24 months. Sekpharma is concerned about
the impact of the regulatory uncertainty on its underlying core business and as
such the company is working closely in private partnerships and is engaging
government to achieve a satisfactory outcome.
Rapimed
Rapimed"s consistent focus on the public sector has been rewarded with a two-
year contract to supply Rapid Urine Diagnostics to the government. It has
implemented a strategy to increase its market share in the private sector aimed
at increasing the profit margin of the business. An important development is the
awarding of ISO 9000 accreditation which will allow Rapimed to market more
aggressively into international markets.
New Promex Corporation
New Promex Corporation (NPC), in line with the group"s previously stated
employee ownership and empowerment strategy, sold 50% of the business to
management resulting in the formation of NPC. Although NPC continues to be a
market leader in branded hypodermic needles and syringes it has struggled to
cope with the adverse impact of the strengthening of the Rand. This has resulted
in significantly cheaper imports from China and India putting pressure on
revenues and margins. Furthermore, the strength of the Rand has made it
difficult to compete with exports into the African countries.
Health System Technologies (HST)
HST is currently successfully completing the provision of hospital information
systems to the tertiary hospitals such as Groote Schuur Hospital, Tygerberg and
Red Cross Children"s Hospital. The implementation of the system in secondary
hospitals has commenced with the Provincial Administration of the Western Cape
benefiting substantially from the successful roll-out of the HST
system.
Prospects
Sekunjalo, with a strengthened balance sheet and a transformative empowerment
business model, is ready for substantial growth and acquisitions. Its
sustainable, broad-based and genuine empowerment approach will ensure that it is
well positioned for the long-term allocation of fishing rights as well as
public/private partnerships in the health care sector. Sekunjalo continues to
seek the recovery of a substantial portion of its LeisureNet investment from
Deloitte & Touche, their auditors, at the time of the liquidation.
The Sekunjalo empowerment share options have been extended by a further year to
31 May 2005.
By order of the Board
Dr WA Mgoqi Dr MI Surve
Chairman Chief Executive
Cape Town
17 May 2004
Directors
Dr WA Mgoqi (Chairman), Dr MI Surve* (Chief Executive Officer), MY Kajee*, F
Kahn* (Financial Director), AJ Snyders, KC Patel*, Z Kota, D Case, MJ Ramatlhodi
*Executive Directors
PR Phillips (Company Secretary)
Registered Address: Transfer Secretaries:
5th Floor, Protea Place Computershare Limited
Protea Road, Claremont 70 Marshall Street
Johannesburg, 2001
Sponsors: Nedbank Capital
Date: 17/05/2004 10:00:11 AM Produced by the JSE SENS Department
