| Wed 14 Jul 2004, 17:55 | | LIMITED - REVIEWED PROVISIONAL RESULTS FOR THE YEA |
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JCI LIMITED - REVIEWED PROVISIONAL RESULTS FOR THE YEAR ENDED 31 MARCH 2004
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
JCI Limited
(Incorporated in the Republic of South Africa)
(Registration number 1894/000854/06)
Share code: JCD ISIN: ZAE000039681
Debenture code: JCDD ISIN: ZAE000039699
(`JCI` or `the Group` or `the Company`)
REVIEWED PROVISIONAL RESULTS FOR THE YEAR ENDED 31 MARCH 2004
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
CONSOLIDATED INCOME STATEMENTS (ABRIDGED)
Reviewed Audited
year ended year ended
31 March 31 March
Notes 2004 2003
R`000 R`000
Revenue 171 082 219 486
Net loss for the year 1 (250 568) (11 667)
Share of earnings of associated
companies 2 184 337 43 895
Exceptional items 3 94 384 164 758
Net profit before taxation 28 153 196 986
Taxation 4 13 350 186
Net profit after taxation 14 803 196 800
Loss attributable to outside
shareholders (95) (194)
Net profit for the year 14 898 196 994
(Loss)/Earnings per share - (cents) 5
- headline earnings (4,8) 5,8
- attributable earnings 0,8 15,1
- diluted earnings 2,6 15,1
Headline (loss)/earnings are calculated
as follows:
Net profit for year 14 898 196 994
Exceptional items (113 959) (161 257)
Items of a capital nature:
- goodwill amortised 20 965 40 547
- profit on disposal of investments (6 766) -
- profit on sale of property, mineral
rights, plant and equipment (1 660) (284)
(86 521) 76 000
Notes to the income statements
1. Income is stated after taking into account the following:
- Interest received 4 889 1 713
- Goodwill amortised (20 965) (40 547)
- Finance costs 100 179 113 061
2. Share of earnings of associated companies
- Income from ordinary activities 198 297 184 749
- Loss from non-recurring activities (13 960) (140 792)
184 337 43 957
3. Exceptional items
- Provision against and write-down
of investments (19 575) (9 550)
- Profit on liquidation of subsidiary company 8 558 -
- Unclaimed dividends written-back 425 -
- Reversal of provision against loans - 13 051
- Translation profit - 65 779
- Profit on disposal of investments
and mining assets 104 976 83 052
- Restructuring costs - (9 327)
- Reversal of interest - 21 753
94 384 164 758
4. Taxation
- Normal taxation 13 350 -
- Foreign normal taxation - 186
13 350 186
5. (Loss)/Earnings per share
(Loss)/Earnings per share calculation
is based on the weighted number of shares in
issue of 1 815 166 874 1 303 631 894
Diluted earnings per share calculation is based
on the adjusted profit of (R`000) 57 104 227 191
and the weighted number of shares in issue on
the assumption that all the debentures are converted
into ordinary shares, of 2 188 066 001 1 505 931 918
CASH FLOW STATEMENTS (ABRIDGED)
Reviewed Audited
year ended year ended
31 March 31 March
2004 2003
R`000 R`000
Cash flows from operating activities (325 900) (26 055)
Cash flows from investing activities (13 089) (13 599)
Cash flows from financing activities 450 412 61 703
Net movement in cash and cash equivalent 111 423 22 049
Cash and cash equivalents:
- at beginning of period (2 712) (25 132)
- subsidiaries acquired 18 709 371
Cash and cash equivalents at end of year 127 420 (2 712)
STATEMENT OF CHANGES IN EQUITY
Non-
distri-
Share Share butable Accumulated
capital premium reserves loss Total
R`000 R`000 R`000 R`000 R`000
Balance on
31 March 2002 7 117 1 046 278 285 588 (1 068 598) 270 385
Issued during the year 10 389 457 084 - - 467 473
Share issue expenses
written-off - (5 265) - - (5 265)
Transfer from
non-distributable
reserve to
accumulated loss - - (37 976) 37 976 -
Net profit for the year - - - 196 994 196 994
Share of fair value
adjustment of
associated companies - - - (107 065) (107 065)
Balance at 31 March 2003 17 506 1 498 097 247 612 (940 693) 822 522
Change in accounting
policy - AC 133 - - - (55 863) (55 863)
Restated opening
balances 17 506 1 498 097 247 612 (996 556) 766 659
Issued during the year 3 389 211 648 - - 215 037
Share issue expenses
written off - (324) - - (324)
Transfer from
non-distributable
reserve to
accumulated loss - - (32 228) 32 228 -
Net profit for the year - - - 14 898 14 898
Share of fair
value adjustments
of associated
companies - - - (194 361) (194 361)
20 895 1 709 421 215 384 (1 143 791) 801 909
CONSOLIDATED BALANCE SHEETS (ABRIDGED)
Reviewed Audited
31 March 31 March
Notes 2004 2003
R`000 R`000
Assets
Non-current assets
- Property, mineral rights,
plant and equipment 349 453 105 569
- Goodwill 46 892 71 746
- Investments 2 1 101 939 1 023 805
- Loans 97 866 255 855
1 596 150 1 456 975
Current assets 3 986 653 357 137
Total assets 2 582 803 1 814 112
Equity and liabilities
Capital and reserves 4 801 909 822 522
Shares held by subsidiaries and
share incentive trust (39 200) (54 416)
Outside shareholders 3 22
762 712 768 128
Non-current borrowings
- interest bearing 5 677 078 327 977
- non-interest bearing 6 493 1 502
683 571 329 479
Current liabilities
- interest bearing 6 827 298 513 030
- non-interest bearing 309 222 203 475
1 136 520 716 505
Total equity and liabilities 2 582 803 1 814 112
Number of shares in issue 1 977 503 622 1 638 566 255
Net asset value per share - cents 38,6 46,9
NOTES TO THE BALANCE SHEETS
Notes to the balance sheets
1. Basis of accounting
These consolidated provisional results are prepared in accordance with
South African Statements of Generally Accepted Accounting Practice (`GAAP`)
and Schedule 4 of the Companies Act. These accounting policies are consistent
with those used in the annual financial statements for the year ended 31 March
2003, except as noted below:
- During the year the Group adopted AC 133: Financial Instruments:
Recognition and Measurement. In accordance with the adoption provisions of AC
133, an adjustment has been made to the Group`s accumulated losses at the
beginning of the year and no adjustment has been made to prior year figures.
- The Group changed its accounting policy with respect to the treatment of
its Share Incentive Trust. In accordance with the JSE Securities Exchange
South Africa (`the JSE`) Listings Requirements, the Group has now consolidated
its Share Incentive Trust. The comparative amounts have been appropriately
restated.
2. Investments in associated companies are accounted for on the equity
accounting method and carrying values are disclosed after the amortisation of
any goodwill arising on the acquisition of the investments.
Reviewed Audited
31 March 31 March
2004 2003
R`000 R`000
Investments at carrying value:
Listed investments
- associated companies 608 482 710 662
- other 90 806 4 714
Unlisted investments
- associated companies 298 526 167 731
- other 104 126 140 698
Market value of listed investments:
- associated companies 1 508 497 1 508 177
- other 90 806 4 362
Directors` valuation of unlisted investments:
- associated companies 323 736 167 731
- other 104 126 140 698
3. Current assets include deposits and cash of R127 420 000 (2003: R32 414
000).
4. During the period under review, the Company`s authorised share capital
remained unchanged at R27 000 000 divided into 2 700 000 000 ordinary shares
of 1 cent each. The following issues of shares took place during the period:
- 23 June 2003 - 32 598 578 ordinary shares at 54 cents each as repayment
of a loan raised by the Company.
- 21 July 2003 - 131 500 000 ordinary shares at 60 cents each for the
acquisition of a 34% interest in Startrack Communications Africa (Pty) Limited
and some listed shares.
- 14 October 2003 - 105 000 000 ordinary shares at 65 cents per share for
the acquisition of all the shares in Barnato Exploration Limited (`Barnex`) in
terms of a scheme of arrangement proposed by JCI between Barnex and its
shareholders. The balance of the purchase price for the shares in Barnex was
paid by the issue of 105 000 000 convertible redeemable 50% secured debentures
of R1,25 each.
- 1 February 2004 - 69 838 819 ordinary shares at 72 cents per share for
the acquisition of all the linked units in Rand Leases Properties Limited
(`Rand Leases`), in terms of a scheme of arrangement proposed by the Company
between Rand Leases and the holders of linked units, other than those already
held by the Company.
5. Debentures
Included in non-current interest bearing borrowings is an amount of R384
125 000 (2003: R252 875 000) which relates to the 307 300 024 (2003: 202 300
024) convertible redeemable 50% secured debentures issued at R1,25 each (`the
debentures`), the terms of which were set out in the debenture certificate
attached as Annexure 19 of the JCI circular dated 4 June 2002. Sasfin Bank
Limited (`the Trustee`) herein provides clarification of the security
provisions relating to the debentures.
The debenture trust deed required JCI to pledge as security for 50% of its
obligations in respect of the debentures, securities that are listed on the
JSE with an aggregate value at the time of pledge of 50% of the nominal value
of the debentures. The number of listed securities to be pledged was to be
calculated with reference to the traded price of the listed securities on the
JSE at the closing of the market on the business day immediately preceding the
pledge date.
The value of the listed securities pledged (in terms of the Debenture Trust
Deed), based on the closing prices on the JSE on 8 July 2004 was R204 651 113,
representing a security ratio of 53,3% relative to the nominal value of the
JCI debentures. The listed securities pledged included Randgold & Exploration
Company Limited (`Randgold`) (+/-11,2 million shares), Simmer and Jack Mines,
Limited (+/-94,5 million shares) and Western Areas Limited (+/-0,5 million
shares).
JCI and the Trustee have agreed that the security ratio for 50% of JCI`s
obligations in terms of the debentures will be re-assessed on 15 September
and 15 March of each year, based on the value of the listed securities held in
pledge as calculated with reference to its preceding 15-day weighted average
trading price on the JSE. Should the security ratio at that time be calculated
at less than 50%, additional listed securities will be pledged to increase the
security ratio to a minimum of 50%. Should the security ratio at that time
exceed 55%, the listed securities held in pledge will be reduced to a level
such that the security ratio at that time remains equal to or greater than
52,5%. Debenture holders will be advised of any changes as a result of the
above in the interim, preliminary and financial year-end results announcements
to be published by JCI.
6. Current liabilities - interest bearing include bank overdrafts of R Nil
(2003: R35 126 000).
7. Contingent liabilities
- The Group has guaranteed the liabilities of certain third parties to an
amount of R5 850 000 (2003: R47 900 000).
- In the latter half of April 2002, Durban Roodepoort Deep, Limited (`DRD`)
served summons on the Company as a co-defendant together with JCI Gold Limited
(`JCI Gold`) claiming payment from the Company of R6 462 000, payment from JCI
Gold of R1 119 000 and payment jointly and severally from the Company and JCI
Gold of R24 650 000. During July 2003, DRD and its associated companies served
summons on the company as a co-defendant together with Messrs RAR Kebble, M
Prinsloo, J Stratton and H C Buitendag claiming payment jointly and severally
from the Company, and co-defendants of R77 861 158 and AUS$9 328 232. In the
alternative to the joint claim of R77 861 158, DRD is claiming payment from
the Company of R19 685 198. Not only are the actions being defended but the
Company has a counter-claim against DRD well in excess of the amount claimed.
- The Company has subordinated a loan of R38 822 000 (2003: R32 854 000)
owing by an associated company. The agreement remains in effect until that
company`s assets, fairly valued, exceed its liabilities.
- The Group has signed suretyships for facilities of R14 000 000 (2003: R5
000 000) granted to associated companies.
- The Company has agreed to underwrite the subscription of a rights offer
by Western Areas Limited (`WAL`) to an amount of R300 000 000. WAL has offered
its shareholders shares at 30,50 cents each in the ratio of 12,5 new ordinary
shares for every 100 shares held.
8. Post-balance sheet event
Subsequent to year-end, the Company issued a further 12 800 000 shares at
66 cents per share, for cash in order to fund an empowerment transaction.
COMMENTARY
The Company has advanced significant amounts of money to empowerment entities
in circumstances where the Company will benefit from equity partnerships in
such ventures. The strategy of the Company is to participate with empowerment
entities so as to create new independent capital bases, until such entities
are able to stand-alone. Shareholders are advised that a significant part of
such empowerment funding is attributable to assets held in partnership with
one particular consortium, which intends listing itself during the next four-
month period. This listing will result in a significant reduction in the debt
levels of the Company as well as a very meaningful increase in its equity
holdings. This transaction will lay to rest any going concern issues that may
have arisen as a result of such funding.
While the balance sheet net asset value (`NAV`) per share of the Company is
constrained by the restrictions of GAAP, it is important to note that applying
a directors` valuation to all investments results in a NAV of 114 cents per
share, 84 cents per share of which relates to the market value of listed
investments held by the Company.
Withdrawal of cautionary announcement
Shareholders are referred to the cautionary announcement that accompanied the
recent trading update released on the JSE Securities Exchange South Africa
News Service on 2 July 2004. With the publication of these provisional
results, the cautionary is hereby withdrawn.
Audit review
The provisional results have been reviewed by the Group`s auditors, Charles
Orbach & Company.
In their review report, they have included an emphasis of matter paragraph
drawing attention to the directors` statement in the commentary relating to
going concern. A copy of their review report is available for inspection at
the Company`s registered office.
For and on behalf of the board
R A R Kebble R B Kebble
Non-Executive Chairman Chief Executive Officer
Johannesburg
14 July 2004
Registered office: Investor relations:
28 Harrison Street, Johannesburg, 2001 George Poole
(PO Box 11165, Johannesburg, 2000) 28 Harrison Street, Johannesburg, 2001
(PO Box 11165, Johannesburg, 2000)
London secretaries: Tel: +27 11 688 5100
JCI (London) Limited Fax: +27 11 836 3757
6 St James`s Place, London, SW1A 1NP
Tel + 020 7491 1889
Fax + 020 7491 1989
Transfer secretaries:
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61051,Marshaltown, 2017)
Sponsor
Sasfin
Corporate Finance
A Division of Sasfin Bank Limited
Date: 14/07/2004 05:50:18 PM Produced by the JSE SENS Department
