| Mon 15 Nov 2004, 9:35 | | RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2004 |
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Barnard Jacobs Mellet Holdings Limited - Unaudited Results for the six months
ended 30 September 2004
Barnard Jacobs Mellet Holdings Limited
(Incorporated in RSA)
(Reg no: 1995/004798/06)
ISIN: ZAE000014262
Share Code: BJM
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2004
CONSOLIDATED INCOME STATEMENT
for the six months ended 30 September 2004
Six months ended Six months ended Year ended
30 September 30 September 31 March
2004 2003 2004
Unaudited Unaudited Audited
R`000 R`000 R`000
Operating Income 105,868 108,116 218,399
Interest Income 13,413 18,430 34,017
Operating costs (111,230) (111,668) (222,620)
OPERATING INCOME BEFORE 8,051 14,878 29,796
FINANCE COSTS
Finance costs (8,647) (10,110) (19,233)
Preference dividends (2,792) (2,792) (5,584)
OPERATING (LOSS)/INCOME (3,388) 1,976 4,979
BEFORE INCOME FROM
INVESTMENTS
Investment income 1,319 524 1,983
Capital item - AC133 (2,615) - -
adjustment
Share of results of - (568) (1,035)
associate company
(LOSS)/INCOME BEFORE (4,684) 1,932 5,927
TAXATION
Taxation (145) (1,197) (992)
NET (LOSS)/ PROFIT (4,829) 735 4,935
ATTRIBUTABLE TO SHAREHOLDERS
Weighted average number of 110,224 103,495 110,246
shares in issue (`000)
Headline earnings per share (2.02) 0.89 5.00
(cents)
Fully diluted headline (2.02) 0.89 5.00
earnings per share (cents)
Basic earnings per share (4.40) 0.71 4.48
(cents)
Fully diluted earnings per (4.40) 0.71 4.48
share (cents)
Dividend per share (cents) 1.50 - -
Net asset value per share 307 316 311
(cents)
RECONCILIATION OF HEADLINE EARNINGS PER SHARE
Six months ended Six months ended Year ended
30 September 30 September 31 March
2004 2003 2004
Unaudited Unaudited Audited
R`000 R`000 R`000
Headline earnings (2,214) 923 5,512
Goodwill impairment - (188) (577)
Investment write-down (2,615) - -
Basic earnings (4,829) 735 4,935
CONSOLIDATED BALANCE SHEET
as at 31 March 2004
30 September 30 September 31 March
2004 2003 2004
Unaudited Unaudited Audited
R`000 R`000 R`000
ASSETS
NON-CURRENT ASSETS
Furniture and equipment 5,570 4,326 4,964
Investments 105,533 85,521 123,318
Interest in associate - 2,104 -
company
Goodwill 3,692 172 3,692
Deferred taxation 24,591 22,461 23,398
139,386 114,584 155,372
CURRENT ASSETS
Amounts receivable in
respect of
stockbroking activities 1,288,418 1,955,897 2,134,394
Margin on derivative 9,128 787 3,887
financial instruments
Sundry accounts receivable 53,396 66,757 67,188
Listed securities holdings 321,589 499,379 302,448
Cash and cash equivalents 383,093 439,228 345,926
2,055,624 2,962,048 2,853,843
2,195,010 3,076,632 3,009,215
EQUITY AND RESERVES
CAPITAL AND RESERVES
Share capital 1,097 1,002 1,102
Share premium 181,088 157,705 182,093
Non-distributable reserves 17,405 18,877 15,602
Retained income 137,775 142,163 144,330
337,365 319,747 343,127
NON-CURRENT LIABILITIES - 209,985 121,569
CURRENT LIABILITIES
Amounts payable in respect
of
stockbroking activities 1,320,172 1,824,621 1,975,335
Listed securities sold short 192,608 458,457 241,769
Sundry accounts payable 46,151 48,940 59,454
Current portion of long-term 225,351 17,551 104,919
liabilities
Receiver of revenue 1,325 3,855 715
Shareholders for dividends 149 128 128
Bank overdraft 71,889 193,348 162,199
1,857,645 2,546,900 2,544,519
2,195,010 3,076,632 3,009,215
GROUP STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2004
Non
Share Share distributable Retained
capital premium reserves income Total
Balance at 1 April 1,002 156,494 29,533 139,395 326,424
2003
Foreign currency - - (13,931) - (13,931)
translation
reserve
Net profit for the - - - 4,935 4,935
year
Treasury stock 100 25,599 - - 25,699
Balance at 1 April 1,102 182,093 15,602 144,330 343,127
2004
Foreign currency - - 1,803 - 1,803
translation
reserve
Net loss for the - - - (4,829) (4,829)
period
Treasury stock (5) (1,005) - - (1,010)
Dividends paid - - - (1,726) (1,726)
Balance at 30 1,097 181,088 17,405 137,775 337,365
September 2004
CONSOLIDATED CASHFLOW STATEMENT
for the six months ended 30 September 2004
Six months Six months Year ended
ended ended
30 September 30 September 31 March
2004 2003 2003
R`000 R`000 R`000
Cash generated from/(utilised in) 114,732 (1,611) (41,287)
operations
Cash generated from/(utilised in)
investing
activities 13,124 (8,709) (52,727)
Cash flows from financing (2,147) (912) 23,739
activities
Net decrease in cash and cash 125,709 (11,232) (70,275)
equivalents
Cash and cash equivalents
at the
beginning of 183,727 267,639 267,639
the year
Foreign currency translation 1,767 (10,527) (13,637)
reserve
Cash and cash equivalents
at the
end of the period 311,203 245,880 183,727
SEGMENTAL ANALYSIS
for the six months ended 30 September 2004
Primary Segment South Africa International Total
R`000 R`000 R`000
Revenue 88,172 31,109 119,281
Assets 1,976,811 218,199 2,195,010
Liabilities 1,668,630 189,015 1,857,645
for the six months ended 30
September 2003
Primary Segment South Africa International Total
R`000 R`000 R`000
Revenue 84,441 42,105 126,546
Assets 2,709,847 366,785 3,076,632
Liabilities 2,427,666 329,219 2,756,885
for the twelve months ended March
2004
Primary Segment South Africa International Total
R`000 R`000 R`000
Revenue 172,648 79,768 252,416
Assets 2,705,951 303,264 3,009,215
Liabilities 2,393,315 272,773 2,666,088
REVIEW OF RESULTS
Operating revenue declined by 2% from R108 million to R106 million compared to
the corresponding period last year. This is mainly attributable to a 51% decline
in fixed interest revenue, a 37% decline in revenue derived from arbitrage
activity and the impact of a much stronger Rand on revenue from the Group`s
offshore operations. These declines have been offset by a 38% increase in
domestic equity brokerage, (8% overall inclusive of offshore operations) the
biggest source of revenue for the Group, for the comparable half-year period.
The increase in equity brokerage is a direct result of the considerable
investment made in upgrading research and dealing capability.
Interest revenue declined by 27% as a result of the 250 basis point decline in
interest rates as well as an 18% decline in interest received from securities
lending operations, a direct result of the decline in arbitrage activity. The
Group continued to carry the high fixed-financing costs of a historically
profitable structure that has severely impacted on the net profitability of the
Group for the past year. The negative impact of this burden amounts to
approximately R4m and will be fully repaid by the first week of December 2004.
During this period the Group successfully disposed of its last private equity
investment in Designer Group for R15,4m, realising a pre-tax profit of R5,4m.
This sale completes the Group`s stated intention of divesting itself from all
private equity and non-core investments. Including this gain under operating
income is consistent with prior treatment of all private equity investments.
The Group`s cash position includes R42m generated by transaction settlements and
amounts to R2.84 per share. The value of significant assets within the Group,
most notably the value of BJM Private Client Services and the licenses that
allow the Group to trade on the Nasdaq and The London Stock Exchange, is not
included in the NAV of the Group, the inclusion of which would considerably
boost the R3.07 NAV reflected on the balance sheet.
The requirements of AC133 resulted in a R2,6m impairment of the Group`s unlisted
preference share investment, which is secured by a pledge of BJM shares. This
impairment is purely due to the fact that the closing market price of BJM shares
is at a discount to the price of R2.50 at which the BEE transaction was
concluded.
Continued operational losses in our UK subsidiary more than offset the positive
results from other business units. Management has implemented a significant
restructuring program that includes downsizing and the relocation of all
activity to the London office with the resultant closure of the Edinburgh
office. A return to profitability is expected during the coming half-year
thereby justifying the retention of the deferred tax asset on the balance sheet
of this subsidiary.
Costs declined marginally by 0,4% for the period. Management attention remains
closely focused on tight cost control and some measure of further savings is
expected during the next 6 months. This will be derived from the action taken in
the UK as well as the expiry of the abnormally punitive interest rate of the
loan finance referred to, independent of the impact of exchange rates on the
conversion of the cost base of the offshore operations.
Lastly, we refer to the comment made in the annual report relating to the
ongoing claim with regard to ITI. While this issue remains unresolved at the
time of writing management is cautiously optimistic of a positive outcome.
Prospects
Management is encouraged by the improvement in financial markets and the
enhancements that have been made within its own business and anticipates an
improved set of results for the next six months.
Dividends
No dividend is declared for the interim period.
Accounting policies
The financial statements and Group financial statements are prepared in
conformity with and comply with South African Statements of Generally Accepted
Accounting Practice and the Listings Requirements of the JSE Securities Exchange
South Africa and Schedule 4 of the South African Companies Act. With the
exception noted below, the accounting policies and methods of computation used
in the preparation of these results are consistent in all material respects with
those adopted in the financial statements for the year ended 31 March 2004. The
following exception should be noted:
* Accounting statement AC140 dealing with business combinations has been
applied in the preparation of the results for the period.
These financial statements have not been audited or reviewed by the company`s
auditor KPMG Inc.
Kevin Jacobs Andile Mazwai
(Co-Chief Executive Officer) (Co-Chief Executive Officer)
Johannesburg
15 November 2004
Directors:
JA Bester (Chairman), HSC Bester, KG Jacobs* (Co-CEO),
AM Mazwai* (Co-CEO), AR Martin, SM Mellet, TS Seopa, L Wilson*
* Executive
Company Secretary:
A de Villiers
Registered Office: Transfer secretaries:
Barnard Jacobs Mellet House Ultra Registrars (Pty) Ltd
5 Sturdee Avenue 11 Diagonal Street
Rosebank, 2196 Johannesburg, 2001
Date: 15/11/2004 08:31:01 AM
Produced by the JSE SENS Department
