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GLOBAL VILLAGE HOLDINGS LIMITED - AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED
29 FEBRUARY 2004
Global Village Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1997/017632/06)
(`Glovill` or `the company`)
JSE Share Code: GLL
ISIN: ZAE000015426
AUDITED FINANCIAL RESULTS FOR YEAR ENDED 29 FEBRUARY 2004
INCOME STATEMENT
for the year ended 29 February
2004 2003
R`000 R`000
Revenue 36,993 35,194
Operating profit before 1,398 2,544
amortisation and abnormal
items
Amortisation of goodwill (463) (458)
Impairment loss (194) (193)
Loss on abandonment - (211)
Operating profit 741 1,682
Interest received 381 376
Finance costs (158) (74)
Profit before taxation 964 1,984
Taxation (376) (757)
Net profit for the year 588 1,227
Earnings per share (cents) 0.67 1.31
Headline earnings per share 1.48 2.71
(cents)
Weighted average number of 87,909 94,000
shares in issue (`000)
Reconciliation of headline
earnings
Net profit for the year 588 1,227
Amortisation of goodwill 463 458
Impairment loss 194 193
Write downs 60 -
Loss on abandonment - 211
Deferred tax - prior years - 454
Headline earnings 1,305 2,543
Note 1:
The comparative headline earnings per share has been adjusted to comply with
current year disclosure in accordance with AC104.
BALANCE SHEET
as at 29 February
2004 2003
R`000 R`000
Assets
Non-current assets 34,298 32,961
Property, plant and equipment 19,287 17,322
Intangible assets 13,151 14,274
Loans receivable 472 -
Loan to share incentive scheme 1,388 1,365
Current assets 4,540 5,813
Inventories 81 59
Accounts receivable 1,072 1,183
Bank balances 3,387 4,571
Total assets 38,838 38,774
EQUITY AND LIABILITIES
Capital and reserves 28,300 33,568
Issued capital 33,760 39,616
Distributable reserve (5,460) (6,048)
Non-current liabilities 5,789 1,638
Long term liabilities
Long term liabilities 4,369 978
Deferred tax 1,420 660
Current liabilities 4,749 3,568
Accounts payable 2,812 2,608
Vendors` claims
Taxation 73 881
Current portion of long term 1,864 79
liabilities
Total equity and liabilities 38,838 38,774
Net asset value per share 32,19 35,71
(cents)
Tangible net asset value per 17,23 20,53
share (cents)
Weighted average number of 87,909 94,000
shares in issue(`000)
CASH FLOW STATEMENT
for the year ended 29 February
2004 2003
R`000 R`000
Cash flow from operating 4,342 7144
activities
Cash (utilised in)/generated
from operations
Cash flow from investing (4,846) (3,797)
activities
Acquisition of intangible fixed
assets
Cash flow from financing (680) 129
activities
(Decrease)/increase in
borrowings
Net (decrease)/increase in cash and (1,184) 3,476
cash equivalents
Cash and cash equivalents at beginning 4,571 1,095
of year
Cash and cash equivalents at 3,387 4,571
the end of year
STATEMENT OF CHANGES IN EQUITY
for the year ended 29 February
2004
Share Share Distribut
able
Capital Premium Reserves Total
R`000 R`000 R`000 R`000
Balance at 28 February 2002 940 38,676 (7,275) 32,341
Net profit for the year 1,227 1,227
Balance at 28 February 2003 940 38,676 (6,048) 33,568
Net profit for the year 588 588
Reduction of share capital (156) (3,740) - (3,896)
Acquisition of treasury shares (78) (1,882) - (1,960)
Balance at 29 February 2004 (5,460) 28,300
706 33,054
Chief Executive`s Comments
On behalf of the board of directors of Global Village, the audited results for
the year ended 29 February 2004 are presented.
You will notice that our net profit and headline earnings for the year are
significantly lower than last year`s results and also in fact lower than our
interim results.
This is almost completely a result of a conscious senior management decision to
sacrifice short term profits in favour of investing in senior management payroll
and new product development and acquisition. A few unusual expenses have
exacerbated what would otherwise have been a superb set of financial results.
With respect to executive payroll we have added a director of New Business
Development Faruk Waja and headhunted Dewald Van Staden to the similarly new
position of Chief Operating Officer at a combined cost of approximately
R750 000.
Unusual costs foisted upon us included our having to write off R620 000 in bad
debt from just two traders and an unassociated series of legal actions amounting
to R250 000 with respect to 3 misguided traders. All of these first time
occurrences in our six year history.
The closure of the loss making Emporium at Tygervalley in April 2004 resulted in
a rapid decline in performance through the latter end of the financial year
culminating in a R1.9 million loss for the year.
With respect to new products and projects which cost us significantly;
a) we bid for the Cape Town Fresh Produce Market, from government, an R800
million business. We believe we were by far the leading contender. In spite
of being one of 3 finalists we lost out to existing management. In spite
of our certainty that we should have succeeded we have decided not to
proceed against the government legally. We spent an estimated R750 000 on
the bid.
b) We failed to obtain timeously the correct zonings for the property in
Fourways that we had paid for an option on, with the intention of
developing a second Bruma Style leisure retail development, and withdrew
at a cost of about R250 000.
c) Having launched the Fashion Fair magazine in November/December 2003 we have
written off start up costs and losses of R650 000 in the financial year.
d) Founding partner Gary Israelsohn and his consortium`s 23 425 140 Glovill
shares were acquired and the first tranch of their settlement amounting to
R2 million was paid. Consulting fees on this share repurchase transaction
alone were R250 000. The repurchased shares are being eliminated in terms
of the share repurchase agreement which will eventually reduce our issued
share capital by 24.9%.
e) The final significant development was the building of the state of the art
Kids World alongside Bruma Market World. Since then Bruma`s attendance has
increased on average over 20%.
Unusual unexpected to recur expenditure, and executive payroll growth
consciously undertaken to be spent therefore amounted to approximately
R5 420 000.
Future Prospects
Having completed adding to the executive infrastructure and filling the
functions of group operations, sales and new business we began to look outward
for the first time in years.
We have already concluded leases and agreements to undertake a Market in
Fourways on William Nichol at the Garden Shop site, as well as to launch the
International Fashion Sale in Cape Town in August 2004 at the Cape Town Fashion
Week.
A Special Note
Unlike many public companies which focus on short term profits at the expense of
longer term sustainability we have chosen to act with complete integrity to the
business vision we committed to some years ago and which we still believe in.
Everything we did this year aligned with our vision and in spite of our week
financial performance we remain as confident as ever that our perseverance will
deliver a positive outcome.
Dividends
No dividend have been declared or recommended.
Accounting Policies
The consolidated financial statements for the year under review are prepared on
the historical cost basis in accordance with the South African Statements of
Generally Accepted Accounting Practice and incorporates accounting policies
which are consistent with those of the previous year.
The results have been audited by Horwath Leveton Boner and copy of their
unqualified report is available at the companies registered office.
On behalf of the board of directors
Marc Israelsohn Carel van Reenen
(Chief Executive Officer) (Chief Financial Officer)
31 May 2004
Company Secretary and Registered Office
CA Van Reneen.
164 Louis Botha Avenue
Lower Houghton,
Johannesburg 2001
Transfer Secretaries
Computershare Investor Services 2004 (Pty) Limited
Ground Floor,
70 Marshall Street
Johannesburg 2001
Sponsor
Sasfin Corporate Finance
A Division of Sasfin Bank Limited
13-15 Scott Street,
Waverly, 2090
P O Box 95104,
Grant Park, 2051
Directorate
Marc Israelsohn
Eric Goodman (Non-executive)
Carel van Reenen
Faruk Waja
Date: 28/05/2004 02:15:07 PM
Produced by the JSE SENS Department
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