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EXCELLERATE HOLDINGS LIMITED - AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2004
EXCELLERATE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1997/009884/06
Share code: EXL ISIN: ZAE000026092 EXLD ISIN: ZAE000044145
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2004
Condensed Group Income
Statements
for the year ended 30 June
Audited Audited
2004 2003
R`000 R`000
Revenue
393,370 371,778
Operating profit
17,355 24,710
Income/(loss) from associates
1,181 (60)
Impairment of
goodwill/investment (3,436) (18,853)
Amortisation of goodwill
(3,073) (4,105)
Revaluation of compulsory
convertible debentures 2,864 -
liability
Profit from operations
14,891 1,692
Net interest paid
(4,357) (6,402)
Profit/(loss) before taxation
10,534 (4,710)
Taxation
(2,411) (5,774)
Profit/(loss) after taxation
8,123 (10,484)
Attributable to minority
shareholders (105) (162)
Profit/(loss) attributable to
ordinary shareholders 8,018 (10,646)
Earnings/(loss) per share
(cents) 4.5 (5.9)
Fully diluted basic
earnings(loss) per share 3.1 (4.8)
(cents)
Headline earnings per share
(cents) 8.1 6.9
Fully diluted headline earnings
per share (cents) 5.9 6.4
Earnings per share and headline earnings
per share
The calculation of earnings per share is based on earnings of R8
018 000 (2003 - (R10 646 000)) and a weighted average of 178 642
162 (2003 - 179 299 738) shares in issue for the year.
The calculation of headline earnings per share is based on
headline earnings of R14 541 000 (2003 - R12 248 000) and a
weighted average of 178 642 162 (2003 - 179 299 738) shares in
issue. The following adjustments to income attributable to
shareholders were taken into account in the calculation of
headline earnings:
Audited Audited
2004 2003
R `000 R `000
Attributable to ordinary shareholders
8,018 (10,646)
- Amortisation of
goodwill 3,073 4,105
- Impairment of goodwill/investments
3,436 18,853
- Net loss/(profit) on sale of fixed assets
20 (92)
- Taxation effect of adjustments
(6) 28
Headline earnings
14,541 12,248
Condensed Group Balance Sheets
at 30 June Audited Audited
2004 2003
R`000 R`000
ASSETS
Non-current assets 85,235 88,110
Fixed assets 16,292 16,719
Investment in associates 4,034 716
Intangible assets 51,066 56,508
Deferred taxation 13,843 14,167
Current assets 133,403 119,037
Other current assets 125,278 110,226
Bank and cash 8,125 8,811
Total assets 218,638 207,147
EQUITY AND LIABILITIES
Capital and reserves
Ordinary shareholders` interest 117,810 111,683
Outside shareholders` interest 604 489
Total shareholders` interest 118,414 112,172
Non-current liabilities 9,478 11,477
Long-term liabilities 9,478 11,477
Current liabilities 90,746 83,498
Other current liabilities 85,713 71,903
Amount due to vendors - 5,118
Current portion of long-term 4,182 3,470
liabilities
Bank overdrafts 851 3,007
Total equity and liabilities 218,638 207,147
Condensed Group Cash Flow Statements
for the year ended 30 June
Audited Audited
2004 2003
R`000 R`000
Cash flows from operating activities 14,917
8,955
Cash generated by operations 29,198
20,244
Net interest paid
(6,576) (6,402)
Taxation paid
(7,705) (4,887)
Cash flows from investing activities
(12,505) (33,142)
Cash flows from financing activities
(942) 26,977
Net increase in cash and cash equivalents 1,470
2,790
Cash and cash equivalents at beginning of 5,804
year 3,014
Cash and cash equivalents at end of year 7,274
5,804
Condensed Group Statements of Changes in Equity
for the year ended 30 June
Audited Share Share Compulsory Non- Retained Total
capital premium convertible distributable earnings
debentures reserves
R`000 R`000 R`000 R`000 R`000 R`000
Balance at 30
June 2002 1,811 55,050 - 17,322 30,597 104,780
Repurchase of
shares (25) (735) (760)
Compulsory
convertible 18,641 18,641
debentures
issued
Compulsory
convertible (710) (710)
debenture
issue expenses
Share based 378
payment 378
transactions
Net loss for
the year (10,646) (10,646)
Balance at 30
June 2003 1,786 53,605 18,641 17,700 19,951 111,683
Share based
payment 315 315
transactions
Derivative
portion of (2,206) (2,206)
compulsory
convertible
debentures
Net profit for
the year 8,018 8,018
Balance at 30
June 2004 1,786 53,605 16,435 18,015 27,969 117,810
Condensed Group Segmental Report
for the year ended 30
June
Audited Audited
2004 2003
R`000 R`000
Revenue
393,370 371,778
Services
124,894 126,710
Trading -
Distribution 268,476 245,068
Operating profit
17,355 24,710
Services
6,997 12,602
Trading -
Distribution 10,358 12,108
Capital expenditure
6,835 7,651
Services
4,115 3,663
Trading -
Distribution 2,720 3,988
Cash flow from
operating activities 14,917 8,955
Services
11,117 7,896
Trading -
Distribution 2,542 3,004
Corporate
1,258 (1,945)
FINANCIAL AND OPERATIONAL OVERVIEW
Overview
On 2 July 2004, Excellerate issued a trading update and cautionary announcement
indicating that the group`s earnings per share and headline earnings per share
for the year ended 30 June 2004 will be substantially and materially lower,
respectively, than that of the prior comparative period.
The group embarked upon a major restructuring exercise during the financial year
under review and the effects of the restructuring are evident in these financial
results. Results for the year were adversely affected by set-backs in the
group`s food trading business as well as by the once-off costs related to the
restructuring of the organization. The restructuring exercise saw the departure
of the former executive chairman, the moving of the two former divisional
chairmen into operational roles and various other efforts to reduce costs in the
group. The group now has a strong management team in place to take the group
forward on a new path of growth.
Operational review
The group`s revenue increased by 6% to R393,4 million. Operating profits reduced
to R17,3 million due mainly to the food trading losses. The group underwent a
process of assessing its goodwill in terms of accounting statement AC128 and
found that the goodwill should have been impaired at the end of the 2003
financial year. This resulted in the restatement of 2003 results by reducing
that year`s profits by R18,5 million and a further R1,8 million has been
impaired in the current year. Several other adjustments to the comparative
information have been made as more fully disclosed in the group`s annual
financial statements.
Trading - distribution
The non-food trading division comprising Goldenmarc, Hypertrade, Louis Smiedt
and Ferrengi performed exceptionally well and outperformed management`s
expectations for the year. Foodserv also performed exceptionally well this year
and more than doubled the expected results. In the food trading business, the
strengthening of the rand saw increased competition in the market with new
entrants being attracted by the lower cost of importation. In addition, Alpine
Importers experienced several set-backs while trying to regain its listing
status with key retailers. These other adjustments did not have a material
effect on the group`s results.
Services
The parking business of Interpark focused on right-sizing and rationalizing the
business. Sterikleen together with Autoclenz maintained a steady performance and
grew on the previous years` profits to a satisfactory level. Levingers continues
to grow at a steady pace with new store openings in Pretoria and Johannesburg.
Prospects
The outlook is good for all the businesses, with the highest growth expected in
the trading segment. The group has set for itself a growth strategy with
acquisitive growth focused on trading-distribution, while the services
businesses will continue to grow organically.
Accounting policies
The financial information contained in this announcement for the year ended 30
June 2004 has been prepared in accordance with South African Statements of
Generally Accepted Accounting Practice and includes the effect of consolidating
the Excellerate Employee Share Trust. The accounting policies used are
consistent with those of the previous year.
This financial information has been audited by the group`s auditors, Grant
Thornton. The unqualified audit opinion is available for inspection at the
company`s registered office.
For and on behalf of the Board
C Hall
Chief Executive Officer
Sandton
7 September 2004
Directors
Christopher Hall (CEO), Harold Bloch, Peter Kramer, Alan Lipchin,
Athol Stewart, Rudi Stumpf*, Clive Howell*, Graham Davel*
*(Non-executive directors)
Registered office
Pin Mill Farm, 164 Katherine Street, Sandown 2169
PO Box 785448, Sandton 2146
Tel: (+27 11) 444 0474 Fax: (+27 11) 262 0360
E-mail: kim@excellerate.co.za
Company secretary
ER Goodman Secretarial Services CC (represented by E Goodman)
2nd Floor, North Block, Thrupps Centre, Illovo 2196
Tel: (+27 11) 268 0562 Fax: (+27 11) 268 0564
Transfer secretaries
Computershare Investor Services 2004 (Pty) Ltd
70 Marshall Street, Johannesburg 2001
P O Box 61051, Marshalltown 2107
Tel: (+27 11) 370 5000 Fax: (+27 11) 688 7721
Sponsor
Nedbank Capital
Date: 17/09/2004 03:24:14 PM
Produced by the JSE SENS Department
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