| Tue 15 Jun 2004, 10:35 | | GROUP AUDITED RESULTS FOR THE TWELVE MONTHS ENDED |
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STRATCORP LIMITED - GROUP AUDITED RESULTS FOR THE TWELVE MONTHS ENDED
29 FEBRUARY 2004
Stratcorp Limited
(Registration number: 2000/031842/06)
(Incorporated in the Republic of South Africa)
JSE Share Code: STA
ISIN Code: ZAE000034294
ANNUAL REPORT GROUP
CONSOLIDATED
Group audited results for the twelve
months ended
29 February 2004 were as follows:
Abridged Income Statements Twelve Twelve months
months ended ended
29 February 28 February
2004 2003
(Audited) (Audited)
R`000 R`000
Income 11,261 3,350
Operating profit/(loss) before
interest 3,276 -2,174
Net interest paid 94 75
Operating profit/(loss) before taxation 3,182 -2,099
Taxation 670 -760
Net profit/(loss) after taxation 2,512 -1,338
Accumulated loss brought forward -3,212 -1,874
Accumulated loss carried forward -700 -3,212
Number of ordinary shares in issue 75,075 19,815
(`000)
Weighted average number of
ordinary shares in issue (`000) 71,005 17,747
Headline Profit/(Loss) per ordinary 3.58 -6.50
share (cents)*
Headline Profit/(Loss) per ordinary 3.78 -7.54
share (cents) (Weighted average)*
Dividends per ordinary share (cents)* - -
* Only the ordinary shares share in
profits until 28
February 2003. Only from there on the
preference
shares start sharing in profits.
Reconciliation of Headline Earnings
Net Profit(Loss)
2,512 -1,338
Amortisation of Goodwill
175 187
Headline profit/(loss) / earnings
2,687 -1,151
Abridged Balance Sheet Twelve Twelve months
months ended ended
29 February 28 February
2004 2003
(Audited) (Audited)
R`000 R`000
Investments/fixed assets 7,110 5,324
Current assets 8,678 3,778
Employment of capital 15,788 9,102
Shareholders` funds 9,027 5,152
Non-current liabilities 2,162 493
Current liabilities 4,599 3,457
Capital employed 15,788 9,102
Number of ordinary shares in issue 75,075 19,815
Number of preference shares in issue 51,000
Total number of shares in issue 75,075 70,815
Net asset value per ordinary share 12.0 26.0
Net asset value per total number of 12.0 7.3
shares in issue
Abridged Statement of Changes in Equity Twelve Twelve months
months ended ended
29 February 28 February
2004 2003
(Audited) (Audited)
R`000 R`000
Balance at beginning of period 5,152 5,973
Share capital issued 1,362 517
Net profit/(loss) for the period 2,512 -1,338
Balance at end of period 9,026 5,152
Abridged Cash Flow Statement Twelve Twelve months
months ended ended
29 February 28 February
2004 2003
(Audited) (Audited)
R`000 R`000
Cash flow from operating activities -473 300
Net interest paid -94 75
Cash flow from investing activities -859 1,157
Cash flow from financing activities -368 600
Net (decrease)/increase in cash and cash -1,794 2,132
equivalents
Cash and cash equivalents at beginning
of the period 2,367 235
Cash and cash equivalents at end
of the period 573 2,367
COMMENTS ON RESULTS
In the 2003 Annual Report, the board stated that the Company would conduct its
operations for the 2004 financial year based on a conservative approach. This
was due to the continued uncertainty in the equity segment of the market. The
equity investment sector of the group`s activities is the largest component
contributor to earnings and income is directly affected by this sector.
This approach was adhered to and the board has spent the majority of the past
year consolidating operations to focus on its core operations: investments and
financial services.
SUBSIDIARY COMPANIES (PAST AND FUTURE PROSPECTS)
StratEquity is still the largest contributor to the Company`s earnings. A huge
amount of energy and time were invested to ensure that its business model is
streamlined in order to ensure a predictable future income stream, and
ultimately to be highly profitable. A referral-marketing program to market
StratEquity`s `Wealth Creator Subscription Plan` product was implemented on
10 February 2003. At year-end, 29 February 2004, a total of 4,873 active monthly
subscribers, with a total monthly premium of R 889,000 were attracted.
Subsequent to year-end, this figure has increased to 10,400 subscribers whereof
8,537 are active subscribers with a total monthly premium of R 1,502,000.
Currently the subscriber base is increasing by more than a 1,000 new subscribers
every month.
The affect of this is that StratEquity is earning a monthly income based on
administration and membership fees and when the accumulated investment portions
of the members are invested in developing companies, additional fees are earned.
This product is well accepted by the market and the board is optimistic as to
StratEquity`s future contribution to the group`s earnings.
StratFund was established in 2001 and is licensed by the Financial Services
Board (FSB) to operate as a Portfolio Manager. It was always the strategy not to
compete in the traditional retail market of Portfolio Management, but rather
offer a specific separate service to the StratEquity client base. With the
previous `non-subscriber` profile type of investor client base and the type of
projects these clients invested in (medium to long term), the intended service
could not be implemented. With the client profile type changing to that of
predominantly subscription based, the strategy of StratEquity is to offer
projects to its investor clients that are already established with a profit
history, and in most cases already listed. The intended service of StratFund, to
keep safe those clients` shares in electronic format (3rd party agreement) and
to trade with and manage their portfolios, has now become viable. This service
will be offered to the already existing critical mass of clients. Software and
systems are currently being developed and the objective is to implement this
service in the 3rd quarter of the current financial year. As in StratEquity`s
case, the income is fee based; therefore future income will be predictable.
StratCorp Solutions was established during October 2003, with the intention to
provide the listed company environment with a service to profile their
shareholders and to facilitate their corporate actions. To date the process of
implementation was and is still slow (a result of the low activity levels of
these companies with relation to corporate actions), but the board is confident
that this subsidiary can contribute positively towards the group`s future
earnings.
INVESTMENTS AND OPTIONS
Apart from the income generated from its operating subsidiaries, the Company
also holds various shareholdings and share options in different companies.
Significant future profits can be realised from these investments and options,
and the board will make decisions as and when required in this regard.
During the period under review the Company held the following shares and
options:
Supertow International Ltd: 18% shareholding (Long Term).
Mobile Events Marketing Ltd: 53% shareholding. This holding was acquired
in May 2003.
StratCol (Pty) Ltd: 40% shareholding. This holding was acquired
in October 2003 and the Company has a long-
term dividend view on this investment.
Beget Holdings Ltd: 20 million share option @ 10 cents renewed to
expire on 31/12/2004
APMI Holdings Ltd: 10 million share option @ 75 cents to expire
on 31/12/2004.
FINANCIAL RESULTS
The consolidated turnover of the group increased from R 3.35 million in 2003 to
R 11.261 million in 2004. The total consolidated profit for the full year was
R 2.512 million after tax.
PROSPECTS
The board is satisfied that the company`s business model is well structured and
its products are well accepted in the market. The past 3 years were difficult
due to market conditions, but the board is of the opinion that future
profitability is imminent. The Company successfully progressed from a start-up
operation to a predictable income-generating group focussed on its core
operations.
ACCOUNTING POLICIES
The financial statements have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practices and are based on approved
accounting policies, which have been consistently applied. The unqualified audit
report issued by Fisher Hoffman PKF Chartered Accountants (SA) is available at
the company`s registered offices.
DIVIDENDS
No dividends have been declared.
On behalf of the board
D B Harington
CEO
15 June 2004
Registered Offices:
Suite 1001
267 West Avenue
Centurion
Pretoria
Transfer Secretaries:
Ultra Registrars (Pty) Ltd
11 Diagonal Straat
Johannesburg, 2001
Directors:
P J de Jongh (Non Executive Chairman); D B Harington (CEO); P de W Louw;
WA Pieters
Company Secretary:
PH van Zyl
Date: 15/06/2004 10:27:06 AM Produced by the JSE SENS Department
