| Mon 15 Nov 2004, 8:42 | | IMR - Interim Results 31 August 2004 |
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IMR - Interim Results For The 6 Month Period Ended 31 August 2004
IMR INVESTMENTS LIMITED
Incorporated in the Republic of South Africa
(Registration Number: 1998/017351/06)
Share code: IMR ISIN: ZAE000044004
INTERIM RESULTS FOR THE 6 MONTH PERIOD ENDED 31 AUGUST 2004
GROUP INCOME STATEMENTS
Unaudited
Unaudited Restated Audited
Six Months Six Months Year
Ended Ended Ended
31 Aug 2004 31 Aug 2003 29 Feb 2004
R`000 R`000 R`000
Group Revenue 1 676 1 077 3 573
Revenue - IMR 794 622 1 554
Interest received 222 506 895
Dividends received 253 5 183
Other income 319 111 476
Revenue - On-line Lottery Services 691 - 712
Realised profit on investment sold 191 455 979
Unrealised profit on investment - - 328
Group Operating Expenses (5 862) (4 074) (8 419)
Operating expenses - IMR (2 865) (2 580) (4 638)
Unrealised loss on revaluation of investment (2 280) (733) (1 490)
On-line Lottery Services (607) - (1 058)
Non-recurring expenses (109) (727) (1 199)
Interest paid (1) (34) (34)
Loss from normal operations (4 186) (2 997) (4 846)
Goodwill written off (107) (2) (217)
Loss before taxation (4 293) (2 999) (5 063)
Taxation - (3) (3)
Net loss for the period before minority
interest and associate share of loss (4 293) (3 002) (5 066)
Minority interest - - 56
Share of associate companies` loss (279) - (614)
Net loss for the periods (4 572) (3 002) (5 624)
Reconciliation of headline loss
Attributable loss for the period (4 572) (3 002) (5 624)
Goodwill written off 107 2 217
Headline loss (4 465) (3 000) (5 407)
Basic and fully diluted loss per
share (cents) 5,6 10,5 11,9
Headline loss per share (cents) 5,4 10,5 11,4
Net asset value per share (cents) 2,0 22,5 7,6
GROUP BALANCE SHEETS
Unaudited Unaudited Audited
31 Aug 2004 31 Aug 2003 29 Feb 2004
R`000 R`000 R`000
ASSETS
Non-current assets 2 273 3 991 4 332
Investments available for sale 1 345 3 489 3 184
Property, plant and equipment 820 502 933
Intangible assets 108 - 215
Current assets 7 670 10 711 9 960
Current receivables 293 284 174
Loans receivable 1 032 3 728 627
Loans to associates 1 133 - 1 219
Investments held for trading 1 140 - 1 775
Short-term deposits and cash 4 072 6 699 6 165
9 943 14 702 14 292
EQUITY AND LIABILITIES
Capital and reserves 1 647 5 922 6 230
Share capital 819 263 820
Share premium 4 956 2 659 4 966
Non-distributable reserves 7 165 7 165 7 165
Distributable reserves (11 293) (4 165) (6 721)
Current liabilities 8 296 8 780 8 062
Loans payable - 774 -
Current payables 8 293 8 006 7 842
Bank overdraft 3 - 220
9 943 14 702 14 292
ABRIDGED CASH FLOW STATEMENT
Unaudited Unaudited Audited
31 Aug 2004 31 Aug 2003 29 Feb 2004
R`000 R`000 R`000
Cash flows from operating activities (1 469) (1 891) (5 490)
Cash flows from investing activities 357 2 237 1 259
Cash flows from financing activities (764) (1 187) 2 636
Net decrease cash and cash equivalents (1 876) (841) (1 595)
Cash and cash equivalents at
beginning of the period 5 945 7 540 7 540
Cash and cash equivalents at
end of the period 4 069 6 699 5 945
ABRIDGED STATEMENT OF CHANGES IN EQUITY
Unaudited for Six Months Ended 31 August 2004
Share Non-
Capital Distri- Distri-
and butable butable
Premium Reserves Reserves Total
R`000 R`000 R`000 R`000
Balance at 28 February 2003 3 205 7 165 (2 646) 7 724
Restatement due to consolidation
of Share Trust (102) - 1 549 1 447
Balance at 28 February 2003 as restated 3 103 7 165 (1 097) 9 171
Movement for the period (181) - (3 002) (3 183)
Share Trust movement (66) (66)
Balance at 31 August 2003 as restated 2 922 7 165 (4 165) 5 922
Movement for the period 2 864 - (2 556) 308
Balance at 29 February 2004 5 786 7 165 (6 721) 6 230
Treasury stock set off (11) - - (11)
Net loss for the period (4 572) (4 572)
Balance at 31 August 2004 5 775 7 165 (11 293) 1 647
COMMENTS
General
The interim period under review reflects certain activities that, although
negatively impacting the income statement, do not reflect the other operational
activities of the Group. The major unrealised loss (R2,28m), which has no cash
flow impact, was a result of the diminution in the market value of the Group`s
substantial investment in Labat Holdings Limited (`Labat`), which share price
reduced from 32 cents to 13 cents during the period.
Operating income and expenditure increased marginally when compared to the
previous six months.
Significant investment and Black Economic Empowerment (`BEE`) advisory activity
took place, some of which was concluded after the interim period. The balance of
these activities is still ongoing.
Review of operations
A. Net Asset Value
Assets were R9,9 million (February 2004: R14,3 million). The decline was due
largely to the revaluation of the JSE Securities Exchange South Africa-listed
securities as detailed above, as well as the operating shortfall.
Cash and liquid investments attributable to the Group has declined from R7,5
million to R5,2 million.
B. Investments
1. Listed Investments
IMR holds 9.7 million Labat shares which comprise approximately 5% of the issued
share capital of Labat. The share price of Labat declined from 32 cents to 13
cents. This decline contributed significantly to the decrease in the value of
investments.
IMR`s management, together with other minority shareholders actively engaged
with Labat`s management to address the continued diminution in the value of the
investment. Shareholders` attention is drawn to the following developments:
a. Labat announced a number of cautionary notices relating to the disposal of
its retail business.
b. On 13 October 2004 Labat announced that Labat Card Technologies (formerly
Africard Data Systems acquired from Allied Technologies), a division of Labat,
concluded a `significant` joint venture with Bundesdruckerei, a German company,
in relation to its smart card business.
c. Since the end of August, Labat`s share price has recovered to
approximately 30 cents per share.
2. Unlisted Investments
a. Notwithstanding certain legal issues, On-line Lottery Services
(Proprietary) Limited has performed satisfactorily during the period under
review.
b. The retail software solution business, Icon Retail Information
Systems (Proprietary) Limited, which develops and markets the `IRIS` point of
sale software, successfully concluded a distribution agreement with Accpac, SA`s
leading accounting software house.
Both businesses have benefited from the management, infrastructure and
administrative input of IMR`s management team. Both companies have also reported
substantial increases in revenue, whilst containing costs. The focus going
forward will be continued growth in revenue within the same infrastructure.
Post balance sheet events and other developments
1. During the period under review, IMR advised a BEE consortium on the purchase
of a 27,5% stake in the Constantia Insurance Company Limited (`CICL`). Although
only successfully concluded after the reporting period, IMR advised the
consortium on all aspects of the transaction. IMR is a 10% shareholder in the
BEE consortium which is led by Mr Dassie Molemela.
2. IMR hopes to conclude a number of additional transactions, some of which are
currently under negotiation. Although not material to the cash flow of the Group
in the short term, it is believed that these transactions will have a
significant impact on the balance sheet in the future.
Prospects and outlook
1. BEE Initiatives
The Group is continuing to explore BEE ventures that are progressing
satisfactorily. These include:
1.1 Mining, mining supply and procurement - The Umzingazi Minerals Consortium
1.2 Financial services and insurance - CICL
1.3 Pharmaceuticals and Allied - DENOSA Investment Holdings (Proprietary)
Limited (`DIHOLD`)
2. Other Initiatives
IMR, together with Umnombo Investments Limited has secured a mandate from the
Democratic Nurses Organisation of South Africa (`DENOSA`). DENOSA is the largest
nurses` union/professional grouping in Africa with 80 000 members. The mandate
will allow the BEE investment company (DIHOLD) to make investments in the
medical, pharmaceutical and allied sectors. This initiative is progressing and
we anticipate a meaningful benefit from this transaction in the near future.
Accounting policies
The interim financial statements has been prepared in accordance with the South
African Statements of Generally Accepted Accounting Practice and are consistent
with the accounting policies used in the previous period.
These results are available for inspection at the Group`s registered office.
Conclusion
The Board continues to explore various options to unlock shareholder value.
On behalf of the Board
S D Shane
Chief Executive Officer
Johannesburg
15 November 2004
Registered Address
1st Floor, 3 Melrose Square,
Melrose Arch 2076
PO Box 97, Melrose Arch 2076
Telephone: (011) 684-1055/6/7
Facsimile: (011) 684-1058
Directors:
Executive Chairman: Wayne Rosenberg
Executive Directors: Stanley D Shane (CEO), Jason Schmulian (Financial)
Non-executive Directors: Scott M Campbell (New Zealand),
Armin H Diem (Austria)
Transfer Secretaries
Computershare Investor Services 2004 (Proprietary) Limited
(Registration Number: 2004/003647/07)
Ground Floor, 70 Marshall Street,
Johannesburg 2001
Date: 15/11/2004 07:00:13 AM
Produced by the JSE SENS Department
