| Thu 23 Sep 2004, 15:13 | | UNAUDITED INTERIM RESULTS AS AT 30 JUNE 2004 |
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KOLOSUS HOLDINGS LIMITED - UNAUDITED INTERIM RESULTS AS AT 30 JUNE 2004
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Kolosus Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 1978/000181/06
Share code: KOS
ISIN: ZAE000050258
NSX Share code: KOL (`the company`)
Unaudited interim results as at 30 June 2004 Withdrawal of cautionary
announcement
COMMENTARY ON RESULTS
Results
Management is pleased with the progress made during the period under review
which resulted from a continuing focus on cost control and working capital
management.
Feltex Automotive Leathers (FAL)
(Previously Kolosus Automotive Leathers)
Although market conditions for 2004 were difficult, FAL has continued to
generate an operating profit during the period. Management expects these
difficult market conditions to continue for the balance of the year. However the
necessary action, including cost reductions, has been taken to ensure that FAL
remains profitable. Together with our new technical partner, Leder Fabrik Vogl
GmbH, we will continue to pursue new marketing opportunities.
Mossop Western Leathers (MWL)
Attention to efficiencies in procurement and production coupled with excellent
service, good customer relations and buoyant retail sales have produced pleasing
results for the first half of the year despite a significant increase in shoe
imports. The focus going forward is strict control over costs improved customer
service and the maintenance of world class quality standards. The outlook for
the rest of the year is positive and management is confident of delivering good
results.
Bull Brand Foods (BBF)
BBF has remained profitable for the period despite difficult trading conditions.
Favourable meat prices came under pressure during the second quarter as a result
of cheaper imported proteins which resulted in a devaluation of agricultural
assets in accordance with AC137 Agriculture. The canned meat division continued
with its satisfactory performance for the year to date and has secured exciting
export opportunities. Cost and performance efficiencies remain critical and will
together with new marketing opportunities, continue to remain focus areas.
Accounting policies and presentation
The basis of preparation of the interim financial statements and the accounting
policies applied are consistent with those published in our annual financial
statements for the period ended 31 December 2003 and are in accordance with the
South African Statement of Generally Accepted Accounting Practice applicable to
interim reporting.
Proposed acquisitions
Shareholders are referred to the detailed announcement dated 20 August 2004
regarding the proposed acquisition of certain entities from Daun et Cie AG and
KAP Beteiligungs AG (`the target companies`). The consideration payable for the
acquisitions amounts to R375,9 million which will be satisfied by the issue of
250,6 million ordinary shares at 150 cents per share.
Set out below are the unaudited pro forma financial effects of the proposed
acquisitions, based on the unaudited consolidated financial results of Kolosus
and the target companies for the six months ended 30 June 2004. The pro forma
financial effects are presented for illustrative purposes only and because of
their nature may not give a fair reflection of Kolosus`s financial position nor
of the effect on future earnings after the proposed acquisitions.
Pro forma
Before the after the
proposed proposed percentage
acquisitions(1) acquisitions (2)(3) change
(cents) (cents) (%)
Earnings per share 9,74 (11,48) (218)
Headline earnings per share 7,97 1,73 (78)
Adjusted headline earnings
per share (4) 5,89 7,15 21
Net asset value per share 131,46 187,79 43
Net tangible asset value
per share 131,46 184,38 40
Shares in issue - millions 168,12 418,72
(1) The earnings, headline earnings and net asset value figures in the `Before
the proposed acquisitions` column have been extracted from the unaudited
financial results of Kolosus for the six months ended 30 June 2004.
(2) The earnings and headline earnings per share figures in the `Pro forma
after the proposed acquisitions` column have been calculated on the basis that
the proposed acquisitions were effected on 1 January 2004.
(3) The net asset value and net tangible asset value per share figures in the
`Pro forma after the proposed acquisitions` column have been calculated on the
basis that the proposed acquisitions were effected on 30 June 2004.
(4) Adjusted headline earnings per share is calculated after adjusting for the
after tax abnormal non-trading items listed below:
Pro forma
Before the after the
proposed proposed
acquisitions acquisitions
(cents) (cents)
Headline earnings per share 7,97 1,73
Legal settlement claim (1) (2,08) (0,84)
Abnormal maintenance costs (2) - 2,60
Abnormal restructuring costs (3) - 1,68
Post retirement medical benefit costs (4) - 1,13
Inventory & debtors impairments (5) - 0,85
Adjusted headline earnings 5,89 7,15
(1) Legal settlement received from a 3rd party in Kolosus for R3,5 million.
(2) Abnormal maintenance costs incurred in Hosaf of R10,9 million.
(3) Abnormal restructuring costs provided for in Feltex of R7,0 million.
(4) Change in assumptions relating to the obligation for post retirement
medical benefits of R4,7 million.
(5) Abnormal inventory and debtors impairments in Feltex and Hosaf of R3,5
million.
Prospects
The proposed acquisitions will improve the future earnings and profitability of
the company. Group synergies and the optimisation of technical skills and
resources will further add to the future profitability of the company. The focus
on cost reduction and operational efficiencies will continue.
Documentation and withdrawal of cautionary announcement
The cautionary announcement regarding both the proposed acquisitions as well as
the trading update are hereby withdrawn. Further details of the proposed
acquisition will be included in a circular, incorporating a notice of a general
meeting of shareholders, which will be posted to shareholders on or about
Friday, 8 October 2004.
Registered office
3 Condale Road
Krugersdorp, 1739
Company Secretary
GS Phillips
Board of Directors
PCT Schouten, RD Radford, AZ Keyser,
CL Campher, CE Daun (Non-executive) (German)
Notes to the interim results
1) The interim results for the 6 months ending 30 June 2004 presented above
are unaudited.
2) The principal accounting policies adopted are consistent with the previous
annual financial statements. The financial information has been prepared in
accordance with and complies with the South African Statement of Generally
Accepted Accounting Practice applicable to interim reporting and the Companies
Act in South Africa.
3) During the 8 months period ended 31 December 2003 the company consolidated
its share capital on a 1 for 20 basis. All the comparative financial statistics
have been restated to include the above and the effect of the clawback rights
issue.
4) Sale of subsidiaries
During the period the following subsidiaries were sold:
Leather segment
Kaftan NV, Manzini Hide Collectors (Pty ) Ltd, GH Hackmann (Pty) Ltd, African
Hide Trading (Namibia) (Pty) Ltd, Oudtshoorn Ostrich Processors (Pty) Ltd,
Kolosus Leather Africa, Velskin Products (Pty) Ltd.
Investment segment
Exotan (Pty) Ltd, Matsapa Hides and Stores (Pty) Ltd, Border Export (Pty) Ltd,
Bregin & Co (Cape) (Pty) Ltd, Cape Produce Export Co (Pty) Ltd, OSB Export (Pty)
Ltd
2004 2003 2003
Proceeds on disposal of subsidiaries R`000 R`000 R`000
Net asset value of assets disposed 2 123 - -
Profit on sale of subsidiaries 2 444 - -
Proceeds on disposal of subsidiaries 4 567 - -
Bank overdrafts sold 161 - -
Net proceeds on sale of subsidiaries 4 728 - -
Net outflows due to repayments of loan accounts from the subsidiaries sold
amounted to R2 097 000.
5) Sale of associates
During the period the investment in Camdeboo Meat Processors (Pty) Ltd was sold
at book value.
6) Reversal of impairments
During the period certain property was sold which resulted in a release of the
impairment provision amounting to R375 000.
7) Legal settlements
As mentioned in the Group Annual Financial Statements for the year ended 31
December 2003, the claim against a third party for R5 million has been received
during the reporting period. Subsequent to this settlement, the group no longer
has any pending litigation.
Financial statistics
Unaudited Reviewed Audited
6 months 6 months 8 months
30 June 31 October 31 December
2004 2003 2003
(Note 3)
Number of shares in issue (million) 168,1 28,0 168,1
Weighted average number of shares in
issue - basic (million) 168,1 28,0 34,9
Weighted average number of shares in
issue - diluted (million) 168,5 28,4 35,3
EPS including discontinued operations:
Earnings/(loss) per share basic (cents) 9,74 (40,00) 23,13
Earnings/(loss) per share diluted (cents) 9,72 (39,40) 22,89
EPS excluding discontinued operations:
Earnings/(loss) per share basic (cents) 9,74 (40,00) 53,26
Earnings/(loss) per share diluted (cents) 9,72 (39,40) 52,70
Headline EPS:
Earnings/(loss) per share headline (cents) 7,97 (63,40) 24,85
Earnings/(loss) per share headline
diluted (cents) 7,96 (62,40) 24,59
Net asset value per share 131,46 158,73 121,17
Reconciliation of headline earnings
Unaudited Reviewed Audited
6 months 6 months 8 months
30 June 31 October 31 December
2004 2003 2003
R`000 R`000 R`000
Net profit/(loss) 16 371 (11 206) 8 068
Impairment of investments - 250 -
Impairment of property released (6) (375) - -
(Profit)/loss on sale of subsidaries (4) (2 444) 148 148
Impairment on African Hide Trading loan - 1 252 1 252
Restructuring costs, discontinued and
other abnormal costs - - 1 450
Profit on sale of property,
plant & equipment (149) (8 186) (2 250)
Headline earnings/(loss) 13 403 (17 742) 8 668
Condensed Group Income Statement
Sales 427 142 474 824 616 524
- continuing operations 427 142 395 613 539 276
- discontinued operations - 79 211 77 248
Cost of sales (379 826) (419 012) (544 131)
Gross profit 47 316 55 812 72 393
Other operating income 3 169 2 929 19 735
Distribution costs (7 377) (11 911) (8 375)
Administrative expenses (18 639) (23 813) (33 561)
Other operating expenses (13 820) (18 086) (30 288)
Reversal/(charge) of impairments of
assets (6) 375 (250) -
Profit on sale of subsidiaries (4) 2 444 - -
Abnormal items (7) 5 000 (3 197) (1 650)
Restructuring costs - - (1 450)
Seton claim provision - - 5 900
Operating profit 18 468 1 484 22 704
- continuing operations 18 468 14 043 30 532
- discontinued operations - (12 559) (7 828)
Finance costs (2 761) (17 470) (22 618)
Income from investments 2 426 5 031 9 983
Share of associates losses - - (1 964)
Profit/(loss) before taxation 18 133 (10 955) 8 105
Taxation (1 696) (251) (9)
Profit/(loss) from ordinary
Activities 16 437 (11 206) 8 096
Minority interest (66) - (28)
Net profit/(loss) attributable to
ordinary shareholders 16 371 (11 206) 8 068
Condensed Group Statement of Changes in Equity
Share capital 33 622 5 604 33 622
Share premium 626 235 515 718 626 235
Non-distributable reserves 13 488 13 488 13 488
Currency translation differences
Opening balance (682) (1 461) (1 461)
Movement for the period 920 818 779
Closing balance 238 (643) (682)
Accumulated loss (452 585) (489 692) (468 956)
Balance at beginning of period (468 956) (478 486) (477 024)
Profit/(loss) for the period 16 371 (11 206) 8 068
220 998 44 475 203 707
Condensed Group Cash Flow Statement
Unaudited Reviewed Audited
6 months 6 months 8 months
30 June 31 October 31 Dec
2004 2003 2003
R`000 R`000 R`000
Operating profit 18 468 1 484 22 704
Depreciation 6 038 1 944 9 322
(Profit)/loss on sale of property,
plant and equipment (149) 8 186 (2 250)
Impairment release of property,
plant and equipment (6) (375) - -
(Profit)/loss on sale of subsidiaries (4) (2 444) - 148
Impairment of investments - - 455
AC133 fair value adjustment to long
term debtors (949) - 2 739
AC137 revaluation/(devaluation) of
agricultural inventory 754 - (1 222)
Adjustments to fixed assets - - (84)
Increase in post retirement medical
aid provision - - 1 296
Increase in warranty provision 518 - -
Foreign exchange differences (117) (643) (9 045)
21 744 10 971 24 063
Changes in working capital (350) (21 747) (5 820)
Finance costs (2 761) (17 470) (22 618)
Taxation paid (2 026) (249) (199)
Net cash flow from operating activities 16 607 (28 495) (4 574)
Proceeds on disposal of subsidiaries (4) 4 728 - -
Repayment of loans from
subsidiaries sold (4) (2 097) - -
Proceeds on disposal of associates (5) 350 - -
Investment income 2 426 5 031 9 226
Net cash flow from other investing activities(2 596) (15 760) 10 799
Total flows from operating and investing
activities 19 418 (39 224) 15 451
Proceeds on rights issue - - 138 693
(Decrease)/increase in interest bearing
borrowings (32 823) 41 712 (134 386)
(Decrease)/increase in interest free
borrowings (116) - 8 512
Net cash (outflows)/inflows from
financing activities (32 939) 41 712 12 819
Net (decrease)/increase in cash and
cash equivalents (13 521) 2 488 28 270
Cash and cash equivalents at beginning
of year 37 245 8 975 8 975
Cash and cash equivalents at end of year 23 724 11 463 37 245
Condensed Group Balance Sheet
Assets
Non-current assets 60 766 76 355 71 653
Fixed assets 46 617 50 898 50 333
Investment and loans 12 353 362
Long term debtors 14 137 25 104 20 958
Current assets 300 603 261 419 285 545
Inventories 80 975 64 231 72 415
Agricultural assets 86 342 94 706 80 144
Receivables and prepayments 109 562 91 019 95 741
Cash and cash equivalents 23 724 11 463 37 245
Total assets 361 369 337 774 357 198
Equity and liabilities
Capital and reserves 220 998 44 475 203 707
Share capital 33 622 5 604 33 622
Share premium 626 235 515 718 626 235
Reserves (438 859) (476 847) (456 150)
Minority interest 138 44 72
Non-current liabilities 10 107 8 811 10 107
Long term interest free borrowings 185 185 185
Retirement benefit obligation 9 922 8 626 9 922
Current liabilities 130 126 284 444 143 312
Trade and other payables 84 496 67 982 64 766
Bank overdrafts and short term
interest bearing borrowings 30 201 188 868 63 024
Short term interest free borrowings 6 755 8 350 6 871
Provisions 3 910 13 620 3 392
Taxation liabilities 4 764 5 624 5 259
____________________________
Total equity and liabilities 361 369 337 774 357 198
Group Segmental Report - Business segments
Unaudited Reviewed Audited
6 months 6 months 8 months
30 June 31 October 31 December
2004 2003 2003
R`000 R`000 R`000
Revenue
Foods 293 755 256 044 260 977
Leather 133 387 218 780 355 547
Investments - - -
Other - - -
Total 427 142 474 824 616 524
Operating profit
Foods 3 443 6 576 11 713
Leather 21 849 (6 307) 525
Investments 1 023 (1 540) 3 078
Other (7 847) 2 755 7 388
Total 18 468 1 484 22 704
Assets
Foods 225 138 200 163 193 250
Leather 130 391 139 823 135 308
Investments 6 956 7 941 9 165
Other 736 811 515 492 737 763
Intergroup (737 927) (525 645) (718 288)
Total 361 369 337 774 357 198
Liabilities
Foods 188 857 167 763 157 898
Leather 330 224 370 669 358 128
Investments 62 549 66 413 63 251
Other 296 668 214 099 85 205
Intergroup (737 927) (525 645)(510 991)
Total 140 371 293 299 153 491
Date: 23/09/2004 03:00:12 PM Produced by the JSE SENS Department
