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BARNARD JACOBS MELLET HOLDINGS LIMITED - CONSOLIDATED INCOME STATEMENT FOR THE
YEAR ENDED 31 MARCH 2004
Barnard Jacobs Mellet Holdings Limited
Reg no: 1995/004798/06
ISIN: ZAE000014262
JSE Share Code: BJM
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 MARCH 2004
Year ended Year ended
31 March 31 March
2004 2003
Audited Audited Change
R `000 R `000 %
GROSS REVENUE 252,416 289,513 (12.8)
Operating costs (222,620) (257,790) (13.6)
OPERATING INCOME BEFORE FINANCE 29,796 31,723 (6.1)
COSTS
Finance costs (24,817) (24,249) 2.3
OPERATING INCOME BEFORE INCOME 4,979 7,474
FROM INVESTMENTS
Investment income 1,983 540 267.2
Share of results of associate (1,035) (184)
company
INCOME BEFORE TAXATION 5,927 7,830 (24.3)
Taxation (992) (6,150)
NET PROFIT ATTRIBUTABLE TO 4,935 1,680 193.8
SHAREHOLDERS
Weighted average number of shares 110,246 99,993
in issue (`000)
Headline earnings per share 5.00 2.17 130.4
(cents)
Fully diluted headline earnings 5.00 2.16 131.5
per share (cents)
Basic earnings per share (cents) 4.48 1.68 166.7
Fully diluted earnings per share 4.48 1.68 166.7
(cents)
Net asset value per share (cents) 311 328 (5.2)
Reconciliation of headline
earnings per share
Year ended Year ended
31 March 31 March
2004 2003
Audited Audited Change
R `000 R `000 %
Headline earnings 5,512 2,167 154.4
Goodwill amortisation (577) (487)
Basic earnings 4,935 1,680 193.8
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2004
31 March 31 March
2004 2003
Audited Audited
ASSETS R `000 R `000
NON-CURRENT ASSETS
Furniture and equipment 4,964 5,685
Investments 123,318 75,957
Interest in associate company - 2,603
Goodwill 3,692 360
Deferred taxation 23,398 22,909
155,372 107,514
CURRENT ASSETS 2,853,843 1,638,949
3,009,215 1,746,463
EQUITY AND RESERVES
CAPITAL AND RESERVES
Share capital 1,102 1,002
Share premium 182,093 156,494
Non-distributable reserves 15,602 29,533
Retained income 144,330 141,430
343,127 328,459
NON-CURRENT LIABILITIES 121,569 210,897
CURRENT LIABILITIES 2,544,519 1,207,107
3,009,215 1,746,463
GROUP STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2004
Share Share Non Retained Total
capital premium distributable income
reserves
Balance at 1,067 172,151 71,723 143,945 388,886
1 April 2002
Foreign - - (42,344) - (42,344)
currency
translation
reserve
Net profit for - - - 1,680 1,680
the year
Issue of 8 1,807 - - 1,815
ordinary
shares
Treasury stock (73) (17,464) - - (17,537)
Transfer to - - 154 (154) -
accumulated
profit
Dividends paid - - - (4,041) (4,041)
Opening 1,002 156,494 29,533 141,430 328,459
balance
restated for
change in
accounting
policy
Balance as 1,035 165,047 29,533 141,430 337,045
previously
reported at
1 April 2003
Change in (33) (8,553) 0 0 (8,586)
accounting
policy
Recomputation - - - (586) (586)
of deferred
tax asset
Effect of - - - (1,449) (1,449)
adopting AC
133
Restated 1,002 156,494 29,533 139,395 326,424
opening
balance at
1 April 2003
Foreign - - (13,931) - (13,931)
currency
translation
reserve
Net profit for - - - 4,935 4,935
the year
Treasury stock 100 25,599 - - 25,699
Balance at 1,102 182,093 15,602 144,330 343,127
31 March 2004
CONSOLIDATED CASHFLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2004
Year ended Year ended
31 March 31 March
2004 2003
R `000 R `000
Cash generated utilised in operations (41,287) (55,643)
Cash generated from investing activities (52,727) (11,880)
Cash flows from financing activities 23,739 51,138
Net decrease in cash and cash (70,275) (16,385)
equivalents
Cash and cash equivalents at the 267,639 326,619
beginning of the year
Foreign currency translation reserve (13,637) (42,595)
Cash and cash equivalents at the end of 183,727 267,639
the year
SEGMENTAL ANALYSIS (R`000) March 2004
South Africa International Total
R `000 R `000 R `000
Revenue 172,648 79,768 252,416
Assets 2,705,951 303,264 3,009,215
Liabilities 2,393,315 272,773 2,666,088
March 2003
South Africa International Total
R `000 R `000 R `000
Revenue 187,662 101,851 289,513
Assets 1,583,373 163,090 1,746,463
Liabilities 1,298,686 119,318 1,418,004
Year In Review
The year under review proved to be another difficult one characterised by
ongoing geopolitical uncertainty and turmoil; currency volatility and depressed
financial market volumes, notwithstanding the improvement in market valuation.
Market volume in the South African equity markets actually declined by 9% over
this period and was accompanied by an increase in proprietary trading in the
industry which implies that agency commission business, the core constituent of
Group activity, declined by more than 9% in relative terms. Margins in our
industry remain under pressure as a result of ongoing consolidation in the
revenue base and the relative fixed nature of our cost base, the bulk of which
lies in highly skilled, and scarce, human capital.
Gross revenue, including investment income, declined over the period by 12% to
R254 million and is largely attributable to the decline in market volume and to
the strength of the Rand, which understates foreign office contribution relative
to the previous year. Costs, inclusive of finance costs and BJM`s share of
losses relating to an associate company, declined by a similar margin of 12% to
R249 million. This reduction in costs is partly attributable to management`s
success and ongoing commitment to reducing layers of management and bureaucracy
whilst increasing the ratio of revenue generating staff to administrative staff,
and partly attributable to Rand strength.
Profit before tax declined by 24% to R5.9 million while a favourable tax
dispensation resulted in net attributable profit rising by 194% to R4.9 million.
Management appreciates that this is a similar result to that of the previous
year but is encouraged by two facts: firstly, that only two of the Group`s eight
business units were loss-making during this period as compared to the previous
year when only two business units were profitable. Secondly, the one-off
transaction costs of the BEE transaction exceeded R2,25 million and were fully
absorbed during this period. Fully diluted earnings per share have risen by 166%
to 4.48c from 1.68c.
The 5% decline in net asset value per share to R3.11 is fully attributable to
the impact of a stronger Rand on the valuation of foreign assets held by the
Group. It should be noted that these foreign assets were all acquired at more
favourable rates of exchange than the current Rand strength represents thereby
implying that this decline in net asset value remains lower than the increase
that was purely attributable to foreign exchange translation.
The Group`s empowerment transaction with the Mazwai Consortium was successfully
concluded during the course of the year and reflects the Group`s commitment to
transformation in South Africa and to the opportunity that embracing the
National Agenda represents. We are particularly proud of this transaction and of
the seamless manner in which the new shareholders, all of whom are now also
employees of the firm, have become part of one greater whole.
Management And Board Changes
Kevin Jacobs succeeded Paul Barnard as Group CEO on May 30, 2003 and Lionel
Wilson was appointed CFO on the same date. Andile Mazwai who was appointed a non
executive director on June 1, 2002 was appointed an executive director and Group
Co-CEO with Kevin Jacobs on January 22, 2004 following shareholder approval for
the empowerment transaction.
The Chairman, Sandile Zungu, who served as Chairman since June 2002, resigned
from the Board after the financial year-end due to potential conflict with
pending business ventures. The Board appointed John Bester, a non-executive
director since June 1st, 2002, as Chairman with effect from June 28th 2004,
after having filled the role of Acting Chairman following the resignation of
Sandile Zungu. Paul Barnard, a co-founder of BJM, retired from the Group in June
of this year after 19 years of valued service and resigned from the Board at the
same time. Management and the Board wish to thank both gentlemen for their
contribution to the Group during their tenure.
Prospects
Market valuations have improved over the last year but have not been accompanied
by a corresponding increase in market volumes. Investor sentiment remains
clouded by uncertainty on the global front and this fragility makes a reliable
forecast of prospects for the coming year difficult. We are satisfied that a
significant restructuring has occurred within the Group during the past year and
that it is well positioned and poised to benefit from improved market conditions
whilst minimising the downside that deteriorating market conditions will imply.
Dividends
Notice is hereby given that the Board has declared a final dividend of 1.5 cents
per ordinary share in respect of the year ended 31 March 2004. The dividend will
be paid on Monday, 26 July 2004.
The last day to trade in the shares for purposes of entitlement to the dividend
will be Friday, 16 July 2004. The shares will commence trading ex dividend on
Monday, 19 July 2004 and the record date will be Friday, 23 July 2004.
Share certificates may not be dematerialised or rematerialised between Monday,
19 July 2004 and Friday, 23 July 2004, both days inclusive.
Accounting Policies
The financial statements and Group financial statements are prepared in
conformity with and comply with South African Statements of Generally Accepted
Accounting Practice and the Listings Requirements of the JSE Securities Exchange
South Africa (JSE) and Schedule 4 of the South African Companies Act. With the
exceptions noted below, the accounting policies and methods of computation used
in the preparation of the results are consistent in all material respects with
those adopted in the financial statements for the year ended 31 March 2003. The
following exceptions should be noted:
* Accounting statement AC133 dealing with the recognition and measurement of
financial instruments, has been applied in preparation of the results for
the year.
* The Barnard Jacobs Mellet Share Incentive Trust has been consolidated in
accordance with the requirements of the JSE.
These financial statements have been audited by KPMG Inc. and their unqualified
audit report is available for inspection at the registered office.
Kevin Jacobs Andile Mazwai
Co-Chief Executive Officer Co-Chief Executive Officer
Johannesburg
28 June 2004
Directors:
JA Bester (Chairman) HSC Bester KG Jacobs*(Co-CEO) AM Mazwai* (Co-CEO) SM Mellet
ATM Mokhobo L Wilson*
* Executive
Company Secretary:
A de Villiers
Registered Office:
Barnard Jacobs Mellet House
5 Sturdee Avenue
Rosebank, 2196
Transfer secretaries:
Ultra Registrars (Pty) Ltd
11 Diagonal Street
Johannesburg, 2000
Sponsors:
Deloitte & Touche Sponsor Services (Pty) Limited
Barnard Jacobs Mellet Corporate Finance (Pty) Limited
Date: 29/06/2004 08:08:22 AM Produced by the JSE SENS Department
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