| Mon 28 Jun 2004, 8:50 | | RESULTS FOR THE YEAR ENDED 31 MARCH 2004 |
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HOSKEN CONSOLIDATED INVESTMENTS LIMITED - REVIEWED GROUP RESULTS FOR THE YEAR
ENDED 31 MARCH 2004
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1973/007111/06)
ISIN: ZAE00003257 Share code: HCI
(`HCI`)
REVIEWED GROUP ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2004
ABRIDGED CONSOLIDATED BALANCE SHEET
Year ended 31 March
2004 2003
R`000 R`000
Reviewed Audited
ASSETS
Non-current assets 409,621 430,184
Property, plant and equipment 121,971 60,051
Goodwill 9,979 -
Negative goodwill (1,492) -
Investments 279,163 370,133
Current assets 1,743,755 644,158
Total assets 2,153,376 1,074,342
EQUITY AND LIABILITIES
Ordinary shareholders` equity 664,184 521,679
Minority shareholders` interest 230,142 42,591
Non current liabilities and 38,619 276,728
preference shares
Net financial liabilities 50,923 -
Deferred tax 16,857 108
Current liabilities 1,152,651 233,236
Total equity and liabilities 2,153,376 1,074,342
Net asset value per share (cents) 645 522
ABRIDGED CONSOLIDATED INCOME STATEMENT
Year ended 31 March
2004 2003
R`000 R`000
Reviewed Audited
Revenue 862,598 508,559
- Continuing operations 877,969 508,559
- Discontinued (15,371) -
Operating expenses (867,877) (630,348)
- Continuing operations (850,862) (630,348)
- Discontinued (17,015) -
Operating (loss) (5,279) (121,789)
Investment income 50,062 53,310
Finance costs (22,621) (82,623)
Share of associated companies` 23,047 30,711
profits
Negative goodwill released 31,981 -
Investment surplus/(loss) 16,222 (698,591)
Recoupment/(impairment) of 75,000 (50,185)
investments & goodwill
Profit/(loss) before taxation 168,412 (869,167)
Taxation 43,549 5,509
- Continuing operations 5,036 5,509
- Discontinued 35,813 -
Group profit/(loss) 124,863 (874,676)
Attributable to minorities 7,159 (1,832)
Profit/(loss) attributable to 132,022 (876,508)
ordinary shareholders
Reconciliation of headline
profit/loss
Profit/Loss attributable to 132,022 (876,508)
ordinary shareholders
Adjusted for:
Investment (surplus)/loss (19,041) 698,591
(Recoupment)/impairment of (74,188) 50,185
investments & goodwill
Revaluation of investment (1,617) -
properties
Negative goodwill released (31,981) -
Amortisation of goodwill (2,328) 9,873
Profit on sale of assets 112 19,567
Headline Profit/loss 2,979 (98,292)
Earnings/(loss) per share (Cents)
- Basic 131.26 (286.57)
- Headline 2.96 (32.14)
Weighted average number of shares 100,581 305,859
in issue (`000)
Actual number of shares in issue
at end
of period (net of treasury 103,022 100,022
shares) (`000)
Diluted earnings/(loss) per share
(Cents)
- Basic 117.50 (285.53)
- Headline 2.65 (32.02)
Weighted average number of shares 112,361 306,975
in issue (`000)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Non
Share Share Distribu- Accumulated
table (loss)/
capital premium reserves profits To
R`000 R`000 R`000 R`000 R`
Balances 1 April 91,882 1,036,426 1,644,600 (721,056) 2,
2002
Share capital &
premium
Shares issued 2,607 26,032 - - 28
Shares repurchased (69,935) (594,121) - - (6
and cancelled
Share issue and (1,626) - - (1
cancellation costs
Treasury shares sold 2,396 29,427 - - 31
by subsidiary
Shares acquired by (1,945) (21,395) (2
share trust
Current operations
Loss for the year - - - (876,508) (8
Transfer on - - (994,909) 994,909 -
realisation of
investments
Revaluation
Current revaluation - - (25,105) - (2
deficit
Balances at 31 March 25,005 474,743 624,586 (602,655) 52
2003
Share capital &
premium
Shares issued 750 9,750 - - 10
-
Current operations -
Profit for the year 132,022 13
Currency translation (224) (2
differences
Change in holdings in 207
subsidiary companies
Transfer of fair (15,749) 15,749 -
value adjustments on
realisation
Revaluation -
Other transfers (524,542) 524,542 -
25,755 484,493 84,071 69,865 66
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 March
2004 2003
R`000 R`000
Reviewed Audited
Cashflows from operating activities 298,423 (262,174)
Cashflows from investing activities (240,790) 1,382,025
Cashflows from financing activities (64,291) (1,017,651)
(Decrease)/increase in cash and cash equivalents (6,658) 102,200
Cash and cash equivalents
At beginning of period 201,492 99,292
On acquisition/disposal of subsidiaries 209,248 -
At end of period 404,082 201,492
SEGMENT REPORT
The following are the summarised results for the various primary group
segments:
Segment Segment Segment Segment
Revenues Results Assets Liabilit
R`000 R`000 R`000 R`000
Media & broadcasting 520,403 32,279 634,535 338,055
Financial services- 132,911 44,064 237,901 120,758
continuing operations
Financial services-discontinued (15,371) (50,436) 889,123 889,248
operations
Gaming 16,446 (15,163) 123,269 5,272
Information technology - 3,820 31,186 -
Industrial 207,448 2,796 86,689 85,666
Other 761 114,662 150,673 50,193
862,598 132,022 2,153,376 1,489,19
Taxation is included in other as follows : Assets R1.598 million, Liabilities
R24.317 million and results R43.549 million.
No secondary segment report has been included as the group derives
substantially all
its revenues and income from within the Republic of South Africa.
COMMENTARY
REVIEW OF INVESTMENTS
Media and Broadcasting
Midi TV (Pty) Limited (`e-TV`)
As reported in the interim report to shareholders, the restructuring of the
capital of Sabido Investments (Pty) Limited, e-TV`s holding company, has been
completed and HCI now effectively owns approximately 66% of e-TV.
Continued growth in revenue during the year and stable operating costs have
enabled the station to record its first profit since inception. The station
had contributed R21,02 million to the group headline profit.
In an ever increasingly competitive market, the key challenge facing the
station will be to increase market share and revenue while maintaining an
efficient cost structure.
Redpepper Pictures (Pty) Limited (`Redpepper`)
During the year the group disposed of its 80% interest in Redpepper.
Africa-on-Air (Pty) Limited (`Africa-on-Air`)
Subsequent to year end shareholders approved the disposal by the group of its
financial interest in Africa-on-Air for an amount of R180 million.
Shareholders are referred to announcements made and the circular issued by the
company for details of this disposal.
Gaming
Vukani Gaming (Pty) Limited (`Vukani`)
During the year under review the group increased its interest in Vukani to
96%.
Expansion of trading operations in the route business in Mpumalanga has
continued at a slow pace. During the year applications were lodged for limited
payout route operating licenses in the Western Cape, Eastern Cape and Kwa-Zulu
Natal provinces. The Western Cape bid was successful, with Vukani being
granted a license to roll out 1000 limited payout gambling machines. The
Eastern Cape bid is at an advanced stage while the Kwa-Zulu Natal bid is still
at the initial stage. Bids will be made for licenses in other regions, as
these are made available.
During this initial roll-out phase Vukani will require the injection of
significant group cash resources. The directors of HCI are however confident
that once the business matures it will make a positive contribution to the
group.
Tsogo Investment Holding Company (Pty) Limited (`TIH`)
During the year under review the group increased its interest in TIH to
27,66%. TIH owns 51% of Tsogo Sun Holdings (Pty) Limited (`Tsogo Sun`) thus
giving the group an effective 14,1% interest in Tsogo Sun. Shareholders are
referred to announcements made by the company for details of the above
acquisitions.
Financial Services
Mettle Limited (`Mettle`)
Mettle was delisted from the JSE Securities Exchange SA on 19 June 2003.
Mettle had continued to repurchase its own shares subsequent to the delisting
resulting in HCI increasing its interest in Mettle to 66% at year end. The
results, assets and liabilities of Mettle have, for the first time, been fully
consolidated with those of the group.
Mettle reported a headline loss of R43,3 million for the year due to a R68,2
million loss incurred by the now discontinued, treasury division.
Information technology
IQ Business Group (Pty) Limited (`IQ`)
During the year under review the capital of IQ was restructured with the group
increasing its investment to approximately 22% by injecting R15 million of
funding.
Other
Seardel Investment Corporation Limited (`Seardel`)
During the year under review the group disposed of its interest in Seardel for
an amount of R47,4 million to the Southern African Clothing and Textile
Workers Union. Shareholders are referred to the announcements made and the
circular issued by the company for details of this disposal.
Golden Arrow Bus Services (Pty) Limited (`GABS`)
Subsequent to year end, shareholders approved the acquisition of GABS for a
purchase consideration of R250 million. Shareholders are referred to
announcements made and the circular issued by the company for details of this
acquisition.
OPERATIONS AND RESULTS FOR THE YEAR
Business operations
The business operations of HCI include the making of investments in
opportunities as identified by the board of directors and to add value to
these investments over time. As such, HCI has consciously established itself
and pursued an investment policy in terms of which it has endeavoured to
maintain significant equity and capital participation in entrepreneurially run
companies with significant growth potential. The investments are constantly
reviewed and new ones sought to complement them. The directors are confident
that the group will deliver satisfactory growth in the future.
Accounting policies
The provisional report to shareholders is prepared on the historical cost
basis modified by the revaluation of investments and conforms with Statements
of South African Generally Accepted Accounting Practice. The accounting
policies of the group have been consistently applied.
Restatement of comparative figures
The group has consolidated the HCI Employee Share Trust (2001) in accordance
with the JSE Securities Exchange SA`s interpretation of the provisions of AC
132. Accordingly, the comparative figures have been restated where necessary
and fully diluted earnings per share are also presented.
Results for the yearThe group reported headline earnings per share of 2,96
cents compared with the restated headline loss per share of 32,14 cents for
the prior year. This improvement is largely attributable to the performance of
e-TV which is now profitable and the reduced finance costs resulting from the
reduction of group debt. The investment surplus and the recoupment of
investments and goodwill arose primarily from the restructuring of the group`s
interest in e-TV following the conversion of minority debt to equity and a
recoupment of losses previously absorbed by the group. The discontinued
operation relates to the disposal of the treasury division of Mettle.
DIRECTORATE
The board is pleased to welcome Mrs VM Engel as its newest member.
PROPOSED DELISTING OF HCI AND OFFER TO ALL SHAREHOLDERS
The proposed delisting of the company remains in abeyance until the
finalisation of an application by a shareholder of HCI, in the High Court of
South Africa.
AUDITORS REVIEW
The abridged balance sheet, income statement, cashflow statement and statement
of changes in equity have been reviewed by the company`s auditors, Fisher
Hoffman PKF (Jhb) Inc., and a review opinion is available for inspection at
the company`s registered office.
DISTRIBUTIONS TO SHAREHOLDERS
The directors have decided not to declare a dividend for the year ended 31
March 2004.For and on behalf of the board of directors
MA Golding
Chairman
JA Copelyn
Chief Executive Officer
Durban
28 June 2004
Sponsor
Nedbank Capital
Date: 28/06/2004 07:00:14 AM
Produced by the JSE SENS Department
