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ICC - UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2004
INDUSTRIAL CREDIT COMPANY AFRICA HOLDINGS LIMITED
(Formerly Explorer Corporation Holdings Limited)
(`ICC` or `the Company`)
(Incorporated in the Republic of South Africa)
(Registration Number: 1997/010950/06)
Share Code: ICC
ISIN Code: ZAE000053203
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2004
CONSOLIDATED GROUP Unaudited Reviewed Restated audited
INCOME STATEMENT for the 6 for the for the year ended
months 6 months 31 December 2003
ended ended R`000
30 June 30 June
2004 2003
R`000 R`000
Continuing Discontinued Total
Revenue 13 325 12 968 29 616 514 30 130
Staff costs (1 922) (1 887) (3 290) (2 019) (5 309)
Depreciation and (2 585) (2 983) (5 244)
amortisation of (165) (5 409)
goodwill
Other operating (8 747) (8 240) (23 855) (5 435) (29
expenses 290)
- Impairment of (775) - (15 242) - (15
loans extended to 242)
discontinued
operations
- Normal operating (7 972) (8 240) (8 613) (5 435) (14
expenditure 048)
Total operating (13 254) (13 110) (32 389) (7 619) (40
expenses 008)
Profit/(loss) 71 (142) (2 773) (7 105) (9 878)
before finance
costs
Finance Costs (210) (51) (10 426) (30) (10
456)
Loss before (139) (193) (13 199) (7 135) (20
taxation 334)
Taxation (867) (264) (1 173) - (1 173)
Net loss for the (1 006) (457) (14 372) (7 135) (21
period 507)
Gain on
discontinuance of - - - 7 234 7 234
card business
Net (loss)/profit (1 006) (457) (14 372) 99 (14
for the period 273)
Earnings/(loss) per (0.86) (0.40) (12.56) 0.09 (12.47)
share (cents)
Headline
earnings/(loss) per 1.19 1.99 (8.37) (3.52) (11.66)
share (cents)
Reconciliation of
headline
(loss)/earnings:
Headline
(loss)/earnings per
share has been
calculated in terms
of Circular 7 of
2002
Attributable (1 006) (457) (14 372) 99 (14
(loss)/earnings for 273)
the period
Adjusted for:
- Goodwill 2 399 2 720 4 798 - 4 798
amortisation
- Impairment
provision against - - - 1 708 1 708
development costs
- Impairment
provision against - - - 1 395 1 395
trademarks
- Gain on
discontinuance of - - - (7 234) (7 234)
card business
Headline 1 393 2 263 (9 574) (4 032) (13
earnings/(loss) 606)
CONSOLIDATED GROUP BALANCE Unaudited Reviewed Restated
SHEET for the 6 for the audited
months 6 months for the
ended ended year
30 June 30 June ended
2004 2003 31 Dec
R`000 R`000 2003
R`000
Assets
Property, plant and equipment 2 307 4 125 2 727
Loans 54 2 2
Intangibles - 4 554 -
Goodwill on acquisition of 35 989 40 466 38 388
ICC Zambia
Net investment in finance 91 975 65 811 61 429
leases
Current assets 99 199 94 370 114 657
Total assets 229 524 209 328 217 203
Equity and liabilities
Shareholders funds 49 133 72 112 53 268
- Share capital and premium 132 297 132 297 132 297
- General risk reserve 2 620 1 836 2 620
- Foreign translation (22 768) (14 611) (19 639)
reserve
- Accumulated loss (63 016) (47 410) (62 010)
Non-current liabilities 100 392 - 57 514
- Long-term loans 93 592 - 50 760
- Deferred taxation 6 800 - 6 754
Current Liabilities 79 999 137 216 106 421
Total equity and liabilities 229 524 209 328 217 203
Weighted average number of 116 667 113 570 114 404
shares (`000)
Shares in issue (`000) 116 667 116 667 116 667
Net asset value per share 42.11 61.81 45.66
(cents)
Net tangible asset value per 11.27 23.22 12.75
share (cents)
CONSOLIDATED GROUP CASH FLOW Unaudited Reviewed Restated
STATEMENT for for audited
6 months 6 months for the
ended ended year
30 June 30 June ended
2004 2003 31 Dec
R`000 R`000 2003
R`000
Cash Flow from Operating (4 607) (69) (10 103)
activities
Cash Flow from Investing (8 476) (559) (6 094)
activities
Cash Flow from Financing 19 018 - 22 885
activities
Net movement in cash and cash 5 935 (628) 6 688
equivalents for the period
Cash and cash equivalents at (1 830) (11 503) (11 503)
beginning of period
Foreign exchange movements on 414 239 2 985
cash and cash equivalents
Cash and cash equivalents at 4 519 (11 892) (1 830)
end of period
CONSOLIDATED Share Share Foreign General Accumulate Total
GROUP STATEMENT Capital Premium Translatio Reserve d
OF CHANGES IN n Reserve Loss
EQUITY R`000 R`000 R`000 R`000 R`000
R`000
Balance at 1 11 160 116 137 (12 451) - (46 953) 67 893
January 2003 - as
previously
reported
AC133 adjustment
to opening
balance
- Reversal of - 1 836 1 836
impairment of
debtors
- 1 836 (1 836) -
Reclassification
to general risk
reserve
Adjusted opening 11 160 116 137 (12 451) 1 836 (46 953) 69 729
balance
Net loss for the - - - - (457) (457)
period
Foreign - - (2 160) - - (2 160)
translation
reserve
Issue of shares 507 4 493 - - - 5 000
Balance at 30 11 667 120 630 (14 611) 1 836 (47 410) 72 112
June 2003
Net loss for the - - - - (13 816) (13 816)
period - restated
As previously - - - - (11 336) (11 336)
reported
Correction of - - - - (2 480) (2 480)
fundamental error
Foreign - - (5 028) - - (5 028)
translation
reserve
Transfer to - - - 784 (784) -
general risk
reserve
Balance at 31 11 667 120 630 (19 639) 2 620 (62 010) 53 268
December 2003
Net loss for the - - - - (1 006) (1 006)
period
Foreign - - (3 129) - - (3 129)
translation
reserve
Balance at 30 11 667 120 630 (22 768) 2 620 (63 016) 49 133
June 2004
COMMENTS
The Board of Directors are pleased to present the interim financial results of
the Group for the period ended 30 June 2004.
NATURE OF THE BUSINESS
The primary business of the Group is the financing of secured structured leases
to clients. ICC Africa Holdings is the holding company for the ICC Group of
companies and is listed on the JSE Securities Exchange South Africa under share
code ICC.
BUSINESS REVIEW
The restructuring of the group is complete and the group is beginning to see the
benefits from this exercise, resulting in a R1,4 million headline profit for the
first 6 months of 2004. The 6 months results now reflect a more accurate
performance of the core business of ICC, namely that of structured leasing and
asset based finance.
The Zambian subsidiary has continued to perform well during the period under
review and continues to be the major contributor to the Group. A number of new
initiatives were embarked on during the latter part of 2003 including the
establishment of another subsidiary in South Africa namely ICC South Africa.
This subsidiary is performing well and its contribution to the Group is growing
in line with expectations.
The Zambian economy has performed as expected during the period under review and
the IMF have agreed the terms and conditions of further funding into the
economy. The pressures being brought by the international financing community on
the Zambian government should have a positive effect of the economy as a whole.
These agencies are forcing more stringent fiscal policies and governance within
government as part of conditions of the funding exchange.
The South African Rand has remained strong during the period under review and
has traded in a narrow band between R6 and R6.50. The relative stability of the
Rand is important for shareholders to draw comparatives as the major trading
currency of the Group is USD and Zambian Kwatcha, before consolidation of the
figures into South African Rand.
A number of new initiatives are underway within the ICC Group to expand the
successful leasing model into other areas in Africa. ICC is currently engaged in
a number of discussions in various countries with the aim of expanding the
business. The management of ICC has extensive knowledge of trading in Africa and
are adopting a cautious approach relating to any investing opportunities. It is
of strategic importance to ICC to replicate the leasing model into other areas
of opportunities in order to create additional revenue streams within the group.
FINANCIAL REVIEW
The ICC group reported a headline profit of R1,4 million for the six months
under review, compared to a restated headline loss of R9,6 million in the prior
year. This is in line with expectations as published in previous announcements
regarding the restructuring of the group. Revenue increased year-on-year mainly
due to an expansion in the profile of products offered in Zambia.
Net investment in finance leases and current assets, which represent mainly
outstanding leasing debtors, have increased as a result of the increased
revenues. Long-term loans increased as a result of the activation of the
Development Bank of South Africa (DBSA) facility which was extended to assist
with the gearing of the book and for provision of new loans. Current liabilities
decreased by R26 million during the six month period as a result of more
favourable structuring of loan terms.
The Group reported positive cash balances of R4,5 million in comparison to
negative cash balances of R1,8 million as at 31 December 2003.
Foreign translation reserves deteriorated by a further R3,1 million loss as a
result of the exchange rate fluctuations and the pricing of the Kwatcha against
the Rand during the period under review.
PRIOR YEAR ADJUSTMENT - FUNDAMENTAL ERROR
The prior year numbers have been restated to reflect the effect of adjustments
in respect of ICC, whereby certain liabilities of ICC, which were previously
included at subsidiary level, were included as liabilities of the discontinued
operations in error. The effect of the adjustments was to increase accumulated
losses and liabilities of the continuing operations by R2,4 million, while
reducing the previously reported gain on discontinuance of card operations by
the same amount.
SOUTH AFRICAN STATEMENTS OF GAAP AND COMPANIES ACT REQUIREMENTS
The unaudited interim financial statements were prepared in compliance with
South African Statements of Generally Accepted Accounting Practice and the
Companies Act. The accounting policies for the period are consistent with those
applied for the year ended 31 December 2003, including the implementation of AC
133 on financial instruments, recognition and measurement.
CORPORATE GOVERNANCE
The group fully subscribes to the principles of, and implements where possible,
the recommendations of the King II Code on Corporate Governance.
DIVIDENDS
Dividends will not be paid in respect of the current financial year. Cash
generated will be retained and utilised to grow and expand the business of the
ICC group.
DIRECTOR CHANGES
K Jones has resigned from the board of ICC with effect from 15 October 2004.
For and on behalf of the Board
N. Justin Chinyanta
Chairman
22 November 2004
Registered Office: Transfer Secretaries:
C/o Loita Capital Partners SA Limited Computershare Investor Services 2004
2nd Floor, East Wing (Proprietary) Limited
11 Alice Lane 70 Marshall Street
SANDTON JOHANNESBURG
2001
Directors: Sponsor
N J Chinyanta*, Y Bazian, C Van Arcay Corporate Services
Nieuwkerk, A Fletcher*, A Karrim*, N
Molver*
*Non-Executive
Date: 23/11/2004 08:30:25 AM
Produced by the JSE SENS Department
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