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Aquila Growth Limited - Group Audited Results For The Year Ended 29 February
Release Date: 28/05/2004 12:52:10 Code(s): AQL
AQUILA GROWTH LIMITED - GROUP AUDITED RESULTS FOR THE YEAR ENDED 29 FEBRUARY
2004 AND FURTHER CAUTIONARY ANNOUNCEMENT
Aquila Growth Limited
(Registration number 1995/003158/06)
JSE Share code: AQL
ISIN: ZAE000013959
(`Aquila` or `the Company`)
GROUP AUDITED RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2004 AND FURTHER CAUTIONARY
ANNOUNCEMENT
* Headline earnings per share up 701.6%
* Net asset value per share, based on directors` valuation, up 19.2%
* Resolution by the Board, subject to shareholder approval, to wind up Aquila
CONSOLIDATED INCOME STATEMENT
Group
2004 2003
R`000 R`000
Revenue 53 592 58 609
Other operating income 2 388 -
Administrative expenditure (13 647) (13 975)
Operating expenditure (74 628) (88 243)
Operating loss (32 295) (43 609)
Net finance income 3 674 4 403
Net loss (28 621) (39 206)
Share of results of associated companies 38 819 45 072
Profit before taxation 10 198 5 866
Taxation (14 794) (8 173)
Net (loss)/profit after tax (4 596) (2 307)
Minority interests 6 359 2 063
Profit/(loss) 1 763 (244)
Earnings/(loss) per share (cents) 1.19 (0.79)
Headline earnings per share (cents) 14.59 1.82
Company
2004 2003
R`000 R`000
Revenue 8 689 23 077
Other operating income 2 063 -
Administrative expenditure - -
Operating expenditure (31 238) (63 168)
Operating loss (20 486) (40 091)
Net finance income 3 521 3 214
Net loss (16 965) (36 877)
Share of results of associated companies 38 819 45 072
Profit before taxation 21 854 8 195
Taxation (14 794) (7 839)
Net (loss)/profit after tax 7 060 356
Minority interests - -
Profit/(loss) 7 060 356
Earnings/(loss) per share (cents)
Headline earnings per share (cents)
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Group
2004 2003
R`000 R`000
Net cash (outflow)/inflow
from operations (24 489) 8 809
Cash flow from investing activities 60 658 (2 852)
36 169 5 957
Cash flow from financing activities (36 110) 10 560
59 16 517
Cash and cash equivalents at
beginning of year 47 738 34 615
Effects of exchange rate changes 11 399 (3 394)
Cash and cash equivalents
at end of year 59 196 47 738
Company
2004 2003
R`000 R`000
Net cash (outflow)/inflow
from operations 4 245 16 969
Cash flow from investing activities 46 490 1 863
50 735 18 832
Cash flow from financing activities (36 110) (2 701)
14 625 16 131
Cash and cash equivalents at
beginning of year 36 394 20 263
Effects of exchange rate changes - -
Cash and cash equivalents
at end of year 51 019 36 394
RECONCILIATION OF HEADLINE EARNINGS
Group
2004 2003
R`000 R`000
Net profit/(loss) from ordinary activities 1 763 (244)
Adjusted for:
- (profit)/loss on sale of investments (2 173) 4 645
- preference dividend (267) (767)
- deregistration of
Redgwoods Holdings Ltd - (1 064)
- impairment of equipment 1 013 -
- impairment of intellectual property 2 954 999
- impairment of goodwill 505 1 721
- amortisation of goodwill 3 346 -
- exchange loss 11 793 4 627
- write down of value of investments - 6 596
- dividends received (627) -
- increase in option value of associate - (14 184)
- loss on sale of asset 53 -
Headline earnings 18 360 2 329
CONSOLIDATED BALANCE SHEET
Group
2004 2003
R`000 R`000
ASSETS
Non-current assets
Equipment 2 488 6 470
Intangible assets 8 735 15 736
Deferred taxation - 43
Investment in associates 188 080 218 198
Interest in subsidiaries - -
199 303 240 447
Current assets 68 158 59 690
- Cash at bank 59 196 47 738
- Inventories - 74
- Receivables and prepayments 8 962 11 878
Total assets 267 461 300 137
LIABILITIES AND
SHAREHOLDERS` EQUITY
Shareholders` equity
Share capital and premium 66 423 95 559
Foreign currency translation reserve 10 128 1 802
Retained earnings 162 909 161 412
Ordinary shareholders` interest 239 460 258 773
Minority interest 7 590 10 901
Non-current liabilities
Preference shares - 7 000
Current liabilities 20 411 23 463
- Trade and other payables 20 280 22 483
- Provisions 264 360
- Shareholders for preference dividend - 462
- South African Revenue Service (133) 158
Total liabilities and shareholders`
Equity 267 461 300 137
Net asset value per share adjusted
for capital distribution of
20 cents per share (cents) 191.7 183.2
Net asset value per share (cents) 191.7 203.2
Net asset value per share at directors`
valuation adjusted for capital
distribution of 20 cents per share (cents) - -
Company
2004 2003
R`000 R`000
ASSETS
Non-current assets
Equipment 137 188
Intangible assets - -
Deferred taxation - -
Investment in associates 188 080 218 198
Interest in subsidiaries 14 775 28 480
202 992 246 866
Current assets 52 785 39 095
- Cash at bank 51 019 36 394
- Inventories - -
- Receivables and prepayments 1 766 2 701
Total assets 255 777 285 961
LIABILITIES AND SHAREHOLDERS` EQUITY
Shareholders` equity
Share capital and premium 66 423 95 559
Foreign currency translation reserve - -
Retained earnings 187 726 180 934
Ordinary shareholders` interest 254 149 276 493
Minority interest - -
Non-current liabilities
Preference shares - 7 000
Current liabilities 1 628 2 468
- Trade and other payables 1 647 1 940
- Provisions 114 24
- Shareholders for preference dividend - 462
- South African Revenue Service (133) 42
Total liabilities and shareholders`
equity 255 777 285 961
Net asset value per share adjusted
for capital distribution of
20 cents per share (cents) 203.5 197.1
Net asset value per share (cents) 203.5 217.1
Net asset value per share at directors`
valuation adjusted for capital
distribution of 20 cents per share
(cents) 270.1 226,5
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Group
2004 2003
R`000 R`000
Shareholders` funds at
beginning of the year 258 774 260 684
Issue of shares 81 -
Repurchase of shares (4 236) (2 701)
Capital distribution (24 981) -
Net profit/(loss) 1 763 (244)
Foreign currency translation reserve 8 326 1 802
Preference dividend (267) (767)
Shareholders` funds at end of year 239 460 258 774
Company
2004 2003
R`000 R`000
Shareholders` funds at
beginning of the year 276 492 279 604
Issue of shares 81 -
Repurchase of shares (4 236) (2 701)
Capital distribution (24 981) -
Net profit/(loss) 7 060 356
Foreign currency translation reserve - -
Preference dividend (267) (767)
Shareholders` funds at end of year 254 149 276 492
COMMENTARY
NATURE OF BUSINESS
Aquila is a private equity and venture capital fund, listed on the JSE
Securities Exchange South Africa. Aquila`s stated investment philosophy is to
make investments in industrial and commercial companies, operating in high
growth markets with experienced owner management teams. Aquila`s primary
objective is to work with the management of our underlying investment companies
in generating superior returns for our shareholders in the medium to long term
over a 5 to 10 year period.
ACCOUNTING POLICIES AND AUDIT OPINION
Accounting principles and policies used in preparing these financial results
comply with South African Statements of Generally Accepted Accounting Practice
and are consistent with those applied in prior years.
The results for the year ended 29 February 2004 have been audited by
PricewaterhouseCoopers, Inc. The unqualified audit opinion is available for
inspection at the registered office of the Company.
FINANCIAL OVERVIEW
The year under review was a successful one for Aquila. The highlights were:
* Net asset value per share, for the Group, increased 4.6% from 183.2 cents
per share (adjusted for capital distribution of 20 cents per share) to
191.7 cents per share. Net asset value per share, for the Company,
increased 3.2% from 197.1 cents per share (adjusted for capital
distribution of 20 cents per share) to 203.5 cents per share. Net asset
value per share, based on the directors` valuation of investments,
increased 19.2% from 226.5 cents per share (adjusted for capital
distribution of 20 cents per share) to 270.1 cents per share;
* It was announced in the press on the 4th of February 2004 that Aquila had
disposed of an 11.72% interest in Global Resorts SA (Pty) Ltd (`GRSA`) to a
consortium of investors including the management of GRSA, for a
consideration of R123.9 million. The repayment of Aquila`s claims against
GRSA, in the amount of R7.5 million in cash, was also agreed to.
Following the disposal, Aquila will have a remaining 11.71% interest in
GRSA. Aquila has given an irrevocable undertaking to perform all acts
reasonably required to facilitate the listing of GRSA on the JSE Securities
Exchange South Africa;
* GRSA retained its position as a leading player in the gaming industry in
South Africa, growing its market share in Gauteng from 26.6% in 2002 to
27.5% in 2003. Headline earnings increased from R98.9 million in 2001 to
R110 million in 2002 and R131.6 million in 2003, representing a compound
growth of 15% per annum over the period;
* Aquila repurchased 2 558 275 ordinary shares in the Company, in July 2003,
at an average price of 166 cents per share on the open market as part of
its approved share buy back programme. The shares repurchased, comprised
39% of the total shares sold by Mr J. A. Bell, an executive director of
Aquila Growth Limited.
POST BALANCE SHEET EVENTS
* Global Resorts SA (Pty) Ltd
The conditions precedent for the disposal of Aquila`s 11.72% interest in
GRSA were fulfilled on the 14 May 2004. Aquila has received an escalated
purchase consideration of R128.3 million from the purchasers and the
repayment of its claims against GRSA of R7.5 million.
* Forecourt Television Network (Pty) Ltd
With effect from 2 April 2004, Aquila disposed of all of its shares and
loans in Forecourt Television Network (Pty) Ltd (`FTN`) for a net
consideration of (R220 273). In addition to this, there were additional
costs of exiting the business amounting to R779 535. In terms of the
transaction, the sureties given by Aquila to Rentworks (Pty) Ltd and
Nedbank Limited on behalf of FTN, amounting to R4.8 million, were
cancelled.
* Logeco Investments (Pty) Ltd
With effect from 29 April 2004, and subject to the fulfilment of certain
conditions precedent, Aquila has disposed of all of its shares and loans in
Logeco Investments (Pty) Ltd to Andrew Charles Brown for a consideration of
R4.7 million payable in cash.
FURTHER CAUTIONARY ANNOUNCEMENT
Further to the Cautionary Announcement dated 14 May 2004, the Board of Aquila
has re-evaluated the Company`s future strategy in light of the following:
* the disposal by the Company of an 11.72% interest in GRSA. Following the
disposal, Aquila has retained an 11.71% interest in GRSA. Aquila has given
an irrevocable undertaking to perform all acts reasonably required to
facilitate the listing of GRSA on the JSE Securities Exchange South Africa;
* the negative impact on shareholder returns in the future following the
introduction of Capital Gains Tax and STC (Secondary Tax on Companies)
leviable on the distribution of capital profits, with effect from 1 October
2001; and
* has resolved that, subject to shareholder approval, the Company be wound
up. The Company is in the process of taking advice on the procedures to be
adopted to effect the winding up in the most efficient manner. Accordingly,
shareholders are advised to exercise caution when dealing in the Company`s
shares until a further announcement is made.
For and on behalf of the Board
D. H. Bagg P. Papadimitropoulos
Chairman Managing Director
Johannesburg
31 May 2004
Directors:
D. H. Bagg (Chairman), P. Papadimitropoulos (Managing Director),
K. du Preez (Financial Director), J. A. Bell, P. Dawe *, B. Dubb*
*Non-executive British
Company Secretary:
K. du Preez CA (SA)
Private Bag X106,
Bryanston, 2021
Tel: (011) 706-8928
Fax: (011) 706-6312
Website: www.aquilagrowth.com
E-mail: kdupreez@aquilagrowth.com
Sponsor:
Bridge Capital Services (Pty) Ltd
Transfer Secretaries:
Computershare Investor Services 2004 (Pty) Ltd
Auditors:
PricewaterhouseCoopers, Inc.
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