| Mon 14 Jun 2004, 17:40 | | MONEYWEB HOLDINGS LIMITED - PRELIMINARY AUDITED GR |
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Release Date: 14/06/2004 17:02:12 Code(s): MNY
STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004
MONEYWEB HOLDINGS LIMITED
(`Moneyweb`)
(Registration No:1998/025067/06)
Share code:MNY ISIN:ZAE000025409
PRELIMINARY AUDITED GROUP ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED
31 MARCH 2004
* Revenue increased by 9%
* EBITDA increased by 57%
* Headline earnings increased by 56%
* Headline earnings per share increased by 68%
* Cash inflows from operating activities increased by 218%
* Repurchase of 6,02 million shares
COMMENTARY
OVERVIEW
Further progress was achieved during the year under review from both an
operational and financial perspective.
The company`s core Internet publishing operation now reaches over
250 000 unique users monthly, up 37% in the past year. Almost two thirds of the
audience, primarily from outside South Africa, is served by Mineweb.com which
has consolidated its position as the world`s leading online provider of mining-
related investment information. Moneyweb.co.za remains the dominant online
source of South African investment information.
During the past year, content provision relationships were established with
leading local television broadcaster e.tv and major morning newspaper The
Citizen. These partnerships worked well for both parties, making a positive
contribution to profits.
The editorial team was strengthened through the acquisition of both experienced
talent and graduates of the company`s Internship programmes. Moneyweb now
employs over 20 full-time financial journalists. In the past year, a number of
these journalists were recognised publicly including three of the top four
honours in the Citadel Financial Journalism Awards; with six finalists and two
category winners in the Sanlam Competition.
The sales and support staff were also strengthened and a number of new long-term
sponsorship relationships secured with leading South African companies including
Standard Bank, MTN, Bidvest, Transnet, Arivia.kom, GIBS and Ernst & Young.
FINANCIAL REVIEW
Revenue rose by 9% to R20,128m. This increase is satisfactory considering the
discontinuation of the general news bulletins produced (at a loss) for Classic
FM, and the anticipated decline in revenues from the newsletter operations.
Revenues from new partnerships with The Citizen and e.tv contributed to the
increase in turnover. Operating expenses rose 19% year-on-year, mostly due to
the increased investment in editorial staff.
EBIDTA increased significantly to R3,047m up 57% over the prior year. Headline
earnings per share improved by 68% from 1,9c to 3,2c. Cash generated from
operating activities improved by 218% to R3,730m. During the year, the Group
invested R1,990m through the buy-back of 6,02 million Moneyweb shares in the
open market at an average price of 33c. The Group`s cash position continues to
be sound with the balance sheet reflecting unimpaired cash of R7,858m. The
company has no debt.
Shareholders are reminded that the company`s income statement figures are
affected by accounting regulations relating to the write-off of R66m in goodwill
introduced at the time of Moneyweb`s listing on the JSE in June 1999. This has
resulted in the Company reporting large book entry losses at the attributable
profit line. Because of new accounting regulations to be introduced in 2005,
this may be the last time that losses of this nature will occur in the accounts.
ASSOCIATES
Classic FM`s attributable income decreased by 25%. This was due to the prior
year`s income being boosted by an exceptional tax item. Classic did however
declare a maiden distribution to shareholders post 31 March 2004 of which
Moneyweb`s share is R587 000. This cash was received after the year-end.
Vestact continues to trade ahead of budget and reached break-even on a monthly
basis shortly before the year-end.
OPERATING ACTIVITIES
-Moneyweb.co.za`s revenues have not kept pace with the growth in users, but did
rise modestly in the year.
-Mineweb.com continues to grow impressively. Advertising revenue from the South
African mining community was impacted by the firmer Rand (which hurt local
mining profits). This was offset, however, by strong growth in offshore mining
advertising.
-The Citizen Business, powered by Moneyweb, has shown impressive growth off a
small base.
- Revenues from the weekly joint-venture newspaper Moneyweb Digest fell
slightly. Steps have been taken to invigorate sales in the product.
- The newsletters continue a slow decline. However, cash-flow generation is
still good and the products remain profitable.
- Broadcasting, which includes Classic Business and e.tv, continues to perform
profitably. The Classic Business programme remains a significant revenue
contributor but has limited scope for growth as the advertising time on the show
is fully subscribed and rate increases are not possible off an already premium
level. Other broadcasting opportunities are being aggressively pursued. Ways to
expand the relationship with e.tv are continuously investigated.
- Numerous other opportunities were considered during the year under review,
including the sale of a substantial part of Mineweb.com to a foreign partner.
The transaction was turned down by the Exchange Control authorities at the SA
Reserve Bank.
DISTRIBUTION TO SHAREHOLDERS AND PAYMENT OUT OF THE SHARE PREMIUM ACCOUNT
The board of directors has proposed a capital distribution of 1,6 cents per
share be paid to shareholders out of the company`s share premium account in
terms of Section 90 of the Companies Act, on the basis that approval is given by
shareholders at a general meeting to be convened for this purpose. Further
details of the payment, including the salient dates, will be included in the
circular to shareholders which is in the course of preparation and will be
announced on SENS.
PROSPECTS
Moneyweb will continue to leverage opportunities off its strong base, while
remaining focused in producing high quality, independent business and investment
information. Partnerships have been formed with global satellite radio group
WorldSpace and the Radio Today Community station in Johannesburg. Moneyweb-
produced programming will be broadcast on these platforms from July 1.
Considerable investment, through using existing resources, will be made in
bringing these ventures to profitability in the current financial year. Further
opportunities are being sought in the broadcast arena.
Other new projects to be launched in coming months include a joint venture
publication with empowerment company Mafube Publishing and a series of
investment-focused seminars in association with major life assurer Sanlam.
Globally, after a year of consolidation, fresh impetus will be given to
Mineweb`s expansion strategy. It is also anticipated that Moneyweb.co.za will
secure further partnerships in neighbouring states.
Notwithstanding these growth initiatives, the company is positioned to achieve
satisfactory financial results in the year to March 2005.
AUDIT REPORT
The auditors, Grant Thornton, have issued their opinion on the financial
statements for the group for the year ended 31 March 2004. A copy of their
unqualified report is available for inspection at the company`s registered
office.
AB Hogg EA Jay
Chairman Chief Executive Officer
Rosebank, Johannesburg
14 June 2004
Sponsor
Grant Thornton Corporate Finance (Pty)Ltd
Moneyweb Holdings Limited
Consolidated Income Statements
Audited Audited
31 March 2004 31 March 2003 % Change
R`000 R`000
REVENUE 20,128 18,495 9%
EBITDA 3,047 1,941 57%
Depreciation -444 -499 11%
Amortisation of development costs -511 -914 44%
PROFIT FROM OPERATIONS 2,092 528 296%
Net investment income 477 526 -9%
Net income from associates
(net of taxation) 577 1,033 -44%
Exceptional items - -126 PROFIT
BEFORE GOODWILL
AMORTISATION 3,146 1,961 60%
Goodwill amortisation* -15,081 -15,081
NET LOSS BEFORE TAXATION -11,935 -13,120 9%
Income tax expense -604 -461 -31%
NET LOSS FOR THE YEAR -12,539 -13,581 8%
BASIC LOSS PER SHARE (cents) -15,7 -16,3 4%
FULLY DILUTED LOSS PER SHARE (CENTS) -15,7 -16,1 3%
HEADLINE EARNINGS PER SHARE (cents) 3,2 1,9 68%
FULLY DILUTED HEADLINE EARNINGS
PER SHARE (cents) 3,2 1,9 68%
DIVIDENDS PER ORDINARY SHARE (cents) - 1,0
Reconciliation of headline earnings:
Net loss for the year -12,539 -13,581
Goodwill amortisation* 15,081 15,081
Other items of a capital nature - 126
HEADLINE EARNINGS 2,542 1,626 56%
*This is a non-operating item. It relates to goodwill arising on acquisitions,
primarily at the time of the listing of the company. The goodwill is written
off over 5 years.
Number of shares (000`s)
- issued closing
(net of treasury shares) 78 032 83 539
- weighted average 79 653 83 539
- fully diluted weighted average 80 094 84 328
Moneyweb Holdings Limited
Consolidated Balance Sheets
Audited as at Audited as at
31 March 2004 31 March 2003
R`000 R`000
ASSETS
Non-current assets
Tangible assets 909 1,001
Intangible assets 14,315 28,376
Investment in associates 6,587 7,334
Other investment 12 10
Deferred taxation 12 -
21,835 36,721
Current assets
Trade and other receivables 4,382 3,098
Income tax prepaid 28 49
Cash and cash equivalents 7,858 6,523
12,268 9,670
Total assets 34,103 46,391
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 10,543 12,379
Accumulated profit 17,524 30,063
28,067 42,442
Non-current liabilities
Deferred taxation - 168
Shareholders` loan 438 438
438 606
Current liabilities
Trade and other payables 3,575 2,398
Provisions 117 75
Deferred revenue 1,444 595
Income tax payable 460 273
Shareholders for dividend 2 2
5,598 3,343
Total equity and liabilities 34,103 46,391
Net asset value per share (cps) 36,0 50,8
Net tangible asset value per share (cps) 17,6 16,8
Moneyweb Holdings Limited
Statements of changes in shareholders` equity
Balance as at beginning of period 42,442 57,311
Net loss for the year -12,539 -13,581
Ordinary dividends paid - -850
Treasury shares purchased -1,990 -
Consolidation of the share incentive
trust - -438
Disposal of share incentive trust shares 154 -
28,067 42,442
Moneyweb Holdings Limited
Consolidated Cash Flow Statements
Audited Audited
31 March 2004 31 March 2003
R`000 R`000
Cash flows from operating activities
Cash generated by operations 3,894 2,217
(Increase)/decrease in working capital -65 363
Cash generated by operating activities 3,829 2,580
Net investment income 477 526
Normal taxation paid -576 -979
STC paid - -106
Dividend paid - -848
Net cash inflows from operating
activities 3,730 1,173
Cash flows from investing activities
Acquisition of tangible assets -355 -855
Additions to intangible assets - -585
Acquisition of treasury shares -1,990 -
Loan advanced to associate -207 -
Disposal of share trust shares 154 -
Proceeds on disposal of tangible assets 3 29
Net cash outflows from investing
activities -2,395 -1,411
Net movement in cash and cash
equivalents for the year 1,335 -238
Cash and cash equivalents at
beginning of the year 6,523 6,761
Cash and cash equivalents at
end of the year 7,858 6,523
Moneyweb Holdings Limited
Notes to the Cash Flow Statement
Audited Audited
31 March 2004 31 March 2003
R`000 R`000
Cash generated by operations
Operating profit from operations
before depreciation and
amortisation 3,047 1,941
Adjustments:
Fair value adjustment of investment
included in net investment income -2 -
Re-instatement cost included in
capital losses - -3
Movement in deferred revenue 849 279
3,894 2,217
(Increase)/decrease in working capital
Increase in trade and other
receivables -1,284 -452
Increase in trade and other
payables 1,219 815
-65 363
Taxation paid
Amounts owing at the beginning
of the year -224 -693
Amounts charged per the income
statement -784 -510
Net amounts owing at the end
of the year 432 224
Amounts paid -576 -979
Dividend paid
Amounts owing at the beginning
of the year 2 -
Dividend declared - -850
Amount outstanding at the end
of the year 2 2
Amounts paid - -848
Notes to the financial statements
1. Basis of accounting
The financial information has been prepared on the historical cost basis in
accordance with South African Statements of Generally Accepted Accounting
Practice, except for the fair value adjustments of financial instruments. The
accounting principles used in preparing the financial information are consistent
with those adopted in the previous financial year, except for the following:
- In the prior year, net revenue from the sale of mailing lists was included in
revenue. The group`s policy is now to include gross revenue from the sale of
mailings lists in revenue. The effect is to increase 2003 reported revenue by
R2 994 593. There is no impact on net income.
- The recognition of gross revenues from the sale of mailing lists referred to
above results in an increase in 2003 reported cost of sales of R2 994 593.
There is no impact on net income.
- In 2003, goodwill on acquisition of associates was transferred to goodwill.
In the current year, group policy is not to make this transfer. The effect is
that the investment in associate for 2003, previously reported at R1,208,000 has
been restated at R7,344,000. There is a corresponding reduction in goodwill.
There is no impact on net income.
- In the prior year, goodwill was disclosed as a deduction in arriving at
total capital and reserves. The group`s policy is now to reflect goodwill as a
non-current asset. The effect is to increase 2003 reported non-current assets,
total assets, total capital and reserves and total equity and liabilities by
R33,573,000. There is no impact on net income.
- The group`s policy is now to consolidate the share incentive trust. The
effect on the 2003 financial statements is as follows:
R
Shareholder`s loan (non-current liability) is increased by 438,300
Share capital and premium is reduced by 438,300
The impact on 2003 reported earnings per share is as follows:
As
previously
reported
cents cents
Loss per share (16,3) (16,0)
Headline earnings per share 1,9 1,9
Fully diluted loss per share (16,1) (16,0)
Fully diluted headline earnings per share 1,9 1,9
14 JUNE 2004
