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IMR INVESTMENTS LIMITED - FINAL RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2004
IMR Investments Limited
Incorporated in the Republic of South Africa
(Registration Number: 1998/017351/06)
JSE Share code: IMR
ISIN: ZAE000044004
(`IMR` or `the company`)
FINAL RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2004
INCOME STATEMENT
GROUP
Audited
Reviewed Restated
29 February 28 February
2004 2003
R`000 R`000
Revenue 3 573 3 434
Revenue - IMR 1 554 584
Net interest received 895 417
Dividends received 183 87
Other income 476 80
Revenue - On-line Lottery Services 712 -
Revaluation of investment - realised 979 1 710
- unrealised 328 1 140
Total expenses (8 419) (4 421)
IMR - operating expenses (4 638) (3 615)
On-line Lottery Services (1 058) -
Non-recurring expenses (1 199) -
Revaluation of investments - unrealised (1 490) (806)
Interest paid (34) -
Loss from normal operations (4 846) (987)
Goodwill written off (217) (1 701)
Net loss before taxation (5 063) (2 688)
Taxation (3) (4)
Net loss for the year before minority
interest and associate share of loss (5 066) (2 692)
Minority interest 56 -
Associate companies` share of loss (614) -
Net loss for the year (5 624) (2 692)
Reconciliation of headline loss
Net loss for the year (5 624) (2 692)
Goodwill written off 217 1 701
Headline loss (5 407) (991)
Loss per share (cents) 11,9 6,4
Loss per share as restated (cents) 11,9 9,2
Headline loss per share (cents) 11,4 0,9
Headline loss per share as restated
(cents) 11,4 3,4
BALANCE SHEET
GROUP
Audited
Reviewed Restated
29 February 28 February
2004 2003
R`000 R`000
Assets
Non-current assets 1 148 240
Property, plant and equipment 933 240
Goodwill 215 -
Current assets 13 144 17 971
Investments held for trading 1 775 -
Investments available for sale 3 184 9 275
Loans receivable 1 846 730
Current receivables 174 426
Short-term deposits and cash 6 165 7 540
14 292 18 211
Equity and liabilities
Capital and reserves 6 230 9 171
Ordinary share capital 820 294
Ordinary share premium 4 966 2 809
Non-distributable reserves 7 165 7 165
Distributable reserves (6 721) (1 097)
Current liabilities 8 062 9 040
Loans payable - 1 380
Current payables and provisions 7 842 7 660
Bank overdraft 220 -
14 292 18 211
Net asset value per share (cents) 7,6 27,8
Net asset value per share as restated (cents) 7,6 31,2
Net asset value per share as restated for
rights offer (cents) 7,6 11,2
Number of shares at year-end 81 996 30 381
Weighted average number of shares 47 413 30 692
Weighted average number of shares restated 47 713 29 670
CASH FLOW STATEMENT
GROUP
Audited
Reviewed Restated
29 February 28 February
2004 2003
R`000 R`000
Cash flows from operating activities (5 490) (681)
Cash flows from investing activities 1 259 2 438
Cash flows from financing activities 2 636 (362)
Cash and cash equivalents
Net (decrease)/increase (1 595) 1 395
At beginning of the year 7 540 5 436
Consolidation of share trust - 709
5 945 7 540
RESTATEMENT OF COMPARATIVES
Due to a recent ruling by the GAAP Monitoring Panel the group was required to
changed its accounting policy in respect of its share incentive scheme (`Share
Trust`). The Share Trust is now consolidated to the extent that the unallocated
shares held in the Share Trust form part of the group`s treasury shares. The
prior year`s comparatives have been restated as follows:
As previously
stated Restated
2003 Adjustment 2003
R`000 R`000 R`000
Balance Sheet
Loans receivable 1 905 (1 175) 730
Cash at bank 6 831 709 7 540
Accumulated profit (46) (1 549) (1 595)
Investments 7 684 1 591 9 275
Current payables (7 256) (404) (7 660)
Share capital (304) 10 (294)
Share premium (2 901) 92 (2 809)
Income Statement
Revenue 3 354 80 3 434
Total operating expenses (3 615) (806) (4 421)
STATEMENT OF CHANGES IN EQUITY
GROUP
Share Share Distributable
Capital Premium Reserves
R`000 R`000 R`000
Balance at beginning of the year 294 2 809 (1 097)
Movement in share capital 526 - -
Movement in share premium - 2 157 -
Movement in distributable reserves - - (5 624)
Balance at end of the year 820 4 966 (6 721)
Non-
Distributable
Reserves
R`000 R`000
Balance at beginning of the year 7 165 9 171
Movement in share capital - 526
Movement in share premium - 2 157
Movement in distributable reserves - (5 624)
Balance at end of the year 7 165 6 230
COMMENTS
GENERAL
The company was listed on the JSE Securities Exchange South Africa (`JSE`) five
years ago, and has undergone significant re-engineering during the past two
financial years.
The main measure of value as an investment holding company has been net asset
value (`NAV`). The operating loss should be viewed in light of IMR`s continually
developing strategic initiatives which have brought to the fore opportunities,
specifically in the empowerment arena. However the investment banking/corporate
finance environment continues to be most challenging.
This year IMR focused its efforts both as an adviser in assessing Black Economic
Empowerment (`BEE`) initiatives and as a principal investor developing and
managing specific investment opportunities.
REVIEW OF OPERATIONS
A. NET ASSET VALUE
Assets were R14,3 million (Feb 2003: R18,2 million). The decline of R3,9
million was largely due to the revaluation of JSE listed securities as well
as the final settlement of a contingent liability. Although IMR`s operating
expenses were R4,6 million (Feb 2003: R3,6 million) this increase was as a
result of the infrastructure required to develop and sustain operations.
These costs were partly offset by the proceeds of a R3,0 million rights
issue. As a result of the rights issue, shares in issue significantly
increased. NAV was 7,6 cents per share compared to a restated 11,2 cents
per share for the previous year.
Cash and liquid investments attributable to the group increased from R7,5
million to R7,7 million.
B. SETTLEMENT OF CONTINGENT LIABILITIES
As disclosed in the interim report, and discussed above, the board took the
decision to settle one of the outstanding legal matters relating to the
group while trading as T.A.G Limited. This was a four-year-old legacy issue
inherited by the current management of IMR. The settlement and related
costs amounted to R1 million and are reflected as part of the non-recurring
items in the income statements.
C. INVESTMENTS
A number of developments in relation to the company`s investments have
taken place.
1. Listed investments
IMR holds approximately 5 per cent of the issued share capital of
Labat Holdings Limited (`Labat`) 9,6 million Labat shares. During the
past financial year the price of Labat decreased from 47 cents to 32
cents. This decline made a significant contribution to the loss on
investments reflected above. IMR together with other minority
shareholders is currently engaged in discussions which, hopefully,
will result in the realisation or increase in the value of this
investment.
2. Unlisted investments
2.1 On-line Lottery Services (Pty) Ltd is a web-based site that
provides lottery information and ordering services to the public.
In compliance with AC132, both income and expenditure in respect
of this investment has been consolidated in the group results.
2.2 The retail management business, ICON Retail Information Systems
(Pty) Ltd, has undergone a successful restructuring and is now
poised to pursue local and international opportunities.
D. OTHER DEVELOPMENTS
As previously disclosed, a renounceable rights offer for 82 million shares
at a subscription price of 6 cents per share closed on Friday, 17 October
2003. R3,0 million was raised (after costs) through the subscription of 56
million shares, resulting in 68% of rights being exercised.
E. ACCOUNTING POLICIES
The preliminary financial information has been presented in accordance with
AC127 - Interim Financial Reporting and the accounting policies used in the
current year are consistent with that used in the prior year with exception
AC133. No transactional adjustments were required on the adaptation of
AC133 by the group in the current year.
Deloitte & Touche have reviewed the preliminary results and their opinion
is available for inspection at the registered office. Based on their review
nothing has come to their attention that causes them to believe that the
preliminary financial information is not fairly presented in all material
respects in accordance with South African Statements of Generally Accepted
Accounting Practice and the Companies Act of 1973.
F. SUBSEQUENT EVENTS
No significant events took place subsequent to the financial year-end.
G. PROSPECTS AND OUTLOOK
1. BEE Initiatives
The board has examined strategies to generate maximum benefit and
extraction of wealth for shareholders. The company applied the
majority of its time and effort in advising a number of BEE partners
on various prospective mergers and acquisitions.
Although not completed during the year under review, it is believed
that these ventures are progressing satisfactorily. They include:
1.1 mining activities - the Umzingazi minerals consortium;
1.2 financial services and insurance; and
1.3 retail - proposed formation of an empowerment retail group.
2. Other Initiatives
In addition, management is engaged on an ongoing basis in a number of
advisory projects, the outcome of which is somewhat premature to
predict at this point in time.
The board is hopeful that the time and effort committed to these various
projects will be rewarded in the forthcoming year.
S D Shane W Rosenberg
Chief Executive Chairman
Johannesburg
28 May 2004
Registered Address
1st Floor, 3 Melrose Square,
Melrose Arch 2076
PO Box 97,
Melrose Arch 2076
Telephone: (011) 684-1055/6/7
Facsimile: (011) 684-1058
Directors:
Executive Chairman: Wayne Rosenberg
Executive Directors: Stanley D Shane (CEO), Jason Schmulian (Financial)
Non-executive Directors: Scott M Campbell (New Zealand), Armin H Diem (Austria)
Transfer Secretaries
Computershare Investor Services 2004 (Proprietary) Limited
(Registration Number: 2004/003647/07)
Ground Floor,
70 Marshall Street,
Johannesburg 2001
