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MICROmega Holdings Limited
Registration Number 1998/003821/06
Incorporated in the Republic of South Africa
ISIN Code: ZAE000034435
Share Code: MMG
(`MICROmega` or `the company`)
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2004
ABRIDGED INCOME STATEMENT Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2004 2003 2003
Note R (`000) R (`000) R (`000)
Gross revenue 39 620 46 880 92 495
Operating profit 4 637 5 931 11 891
Net finance income 1 875 2 075 3 609
Income from associates - - (124)
Profit before taxation 6 512 8 006 15 376
Taxation (1 868) (2 329) (2 800)
Headline earnings 4 644 5 677 12 576
Reconciliation of attributable
profit/(loss)
Amortisation of goodwill 2 (1 601) (25 710) (50 415)
Capital profit on disposal of - - 13 858
subsidiaries
Deferred tax credit - - 7 328
Exceptional item - - 4 270
Profit/(loss) attributable to 3 043 (20 033) (12 383)
shareholders
Headline earnings per share (cents) 5.39 6.61 14.76
Earnings/(loss) per share (cents) 3.53 (23.32) (14.53)
Fully diluted earnings/(loss) per share 3.39 (23.32) (14.06)
(cents)
Weighted average number of shares 86 215 85 905 85 210
Diluted weighted average shares in issue 89 683 85 905 88 084
Total number of shares in issue 88 394 85 905 85 433
ABRIDGED BALANCE SHEET Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2004 2003 2003
Note R (`000) R (`000) R (`000)
ASSETS
Non-current assets
Property, plant and equipment 4 330 4 573 3 905
Goodwill 2 7 623 24 973 -
Deferred taxation 10 865 4 499 10 682
Investment in associates 77 904 77
Long-term investments 252 1 703 353
Loans receivable 8 543 2 840 8 569
Current assets
Short-term investments - - 1 574
Accounts receivable 12 955 10 958 7 427
Current portion of loans receivable 3 117 - 3 117
Taxation 187 - 407
Bank and cash 44 624 36 493 49 850
Total assets 92 573 86 943 85 961
EQUITY AND LIABILITIES
Capital and reserves
Shareholders` equity 67 498 41 985 62 275
Non-current liabilities
Borrowings 3 7 420 10 536 400
Current liabilities
Taxation - 188 -
Accounts payable 7 526 14 465 12 834
Current portion of borrowings 267 - 468
Income received in advance - 1 454
Provisions 9 862 18 315 9 984
Total equity and liabilities 92 573 86 943 85 961
Net asset value per share (cents) 76.36 48.87 72.89
Net tangible asset value per share 67.74 19.80 72.89
(cents)
ABRIDGED STATEMENT Share Share NDR Accumulated Total
OF CHANGES
IN EQUITY capital premium loss
R (` 000) R (` 000) R (` 000) R (` 000) R (` 000)
Balance at 1 859 167 600 (1 479) (99 522) 67 458
January 2003
Net loss for the (12 383) (12 383)
year
Foreign currency 1 479 1 479
translation
reserve
Issue of shares 2 8 559 8 561
Reduction in share (7) (2 833) (2 840)
capital
Balance at 31 854 173 326 - (111 905) 62 275
December 2003
Net profit for the 3 043 3 043
period
Issue of shares 30 2 183 2 213
Share issue - (33) (33)
expenses
Balance at 30 June 884 175 476 - (108 862) 67 498
2004
ABRIDGED CASH FLOW STATEMENT Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2004 2003 2003
Cash generated by operations 4 879 3 777 11 126
Movement in working capital (9 306) 4 156 (276)
Net investment income 1 875 2 075 3 485
Taxation paid (1 812) (3 742) (4 292)
Cash utilised in operating (4 364) 6 266 10 043
activities
Net cash used in investing (9 931) (380) 16 333
activities
Capital raised 2 180 - 5 721
Loans raised 7 089 - 727
Loans repaid (200) (8 262) (21 843)
Net cash used in finance 9 069 (8 262) (15 395)
activities
Net (decrease)/increase in bank (5 226) (2 376) 10 981
and cash
Represented as follows:
Bank and cash at beginning of 49 850 38 869 38 869
the year
Bank and cash at end of the 44 624 36 493 49 850
period
Net (decrease)/increase in bank (5 226) (2 376) 10 981
and cash
NOTES TO THE FINANCIAL STATEMENTS
1. Accounting policy
The financial statements have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice. The accounting policies
are consistent with those of the previous year, except as otherwise indicated.
2. Goodwill
Carrying value Additions/ Amortisation Carrying
value
1 January Disposals 30 June
2004 2004
R`(000) R`(000) R`(000)
Goodwill arising from - 9 224 (1 601) 7 623
acquisitions
Goodwill represents the excess of the cost of acquisition over the fair value
of net assets acquired. Goodwill is amortised over the lessor of the profit
warranty period associated with the specific acquisition of five years. In an
event of a permanent impairment in the value of the subsidiary, the relevant
unamortised balance is written off.
3. Borrowings
Borrowings represents amount due to vendors in respect of acquisitions. The
vendors loans are settled through the issue of shares and cash resources over
the profit warranty periods.
Commentary on results
The results for the period under review reflect the impact of a slow down in
income generated by MICROmega Securities from broking activities.
We are pleased to report that the group enjoyed strong growth in both the
revenue management and technology solutions businesses however this growth was
insufficient to support the material decline in brokerage that was a direct
result of the stability and consequent decline in volatility in both the
interest rate and currency markets.
The board has adopted an aggressive growth strategy which has initially
resulted in an acquisition in July 2004 and the restructuring of the revenue
management business to address growth in the changing market conditions under
which this business operates. The board intends to continue to pursue
acquisitions that add both strategic and economic value to the group.
By order of the Board
Directors: I G Morris (Chairman) W E Rosenberg (CEO) R Lewin (Executive) F J
Pretorius (Executive) A Vercueil (Executive) S Mpanza (Non-
Executive) H Seabi (Non-Executive)
Company Secretary: C J Holroyd
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Ltd
Sponsor: LPC Manhattan Sponsors (Pty) Ltd
(Incorporated in the Republic of South Africa)
(Registration number 1998/003821/06)
Share code MMG
ISIN ZAE000034435
Date: 17/09/2004 05:34:08 PM Produced by the JSE SENS Department
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