| Mon 6 Dec 2004, 15:36 | | Results For The Six Months Ended 30 September 2004 |
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HCI - Group Interim Results For The Six Months Ended 30 September 2004
HOSKEN CONSOLIDATED INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1973/007111/06)
Share code: HCI ISIN: ZAE000003257
(`HCI` or `the company` or `the group`)
GROUP INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2004
The following are the unaudited results of the group for the six months ended
30 September 2004 together with the comparative figures:
ABRIDGED CONSOLIDATED INCOME STATEMENT
Six months ended Year ended
30 September 31 March
2004 2003 2004
R`000 R`000 R`000
(unaudited) (unaudited) (audited)
Revenue 634 859 304 848 862 598
- Continuing operations 634 859 304 848 877 969
- Discontinued - - (15 371)
Operating expenses (572 741) (318 019) (867 877)
- Continuing operations (572 741) (318 019) (850 862)
- Discontinued - - (17 015)
Operating profit/(loss) 62 118 (13 171) (5 279)
Investment income 18 793 11 618 50 062
Finance costs (347) (2 879) (22 621)
Share of associated companies`
profits/(losses) 47 884 (533) 23 047
Negative goodwill released 109 036 - 31 981
Investment surplus 138 673 39 621 16 222
Recoupment of investments and
goodwill 284 73 639 75 000
Profit before taxation 376 441 108 295 168 412
Taxation 8 040 6 101 43 549
Group profit 368 401 102 194 124 863
Attributable to minorities (11 915) (270) 7 159
Profit attributable to ordinary
shareholders 356 486 101 924 132 022
Reconciliation of headline
profit/(loss)
Profit attributable to ordinary
shareholders 356 486 101 924 132 022
Adjusted for:
Investment surplus (138 673) (33 486) (19041)
Recoupment of investments and
goodwill (284) (73 639) (74188)
Revaluation of investment
properties - - (1617)
Negative goodwill released (102 157) - (31981)
Amortisation of goodwill 1 360 4 076 (2328)
(Profit)/loss on sale of assets (19 606) (605) 112
Headline profit/(loss) 97 126 (1 730) 2 979
Earnings/(loss) per share (cents)
- Basic 346,03 101,90 131,26
- Headline 94,28 (1,73) 2,96
Weighted average number of shares
in issue (`000) 103 022 100 023 100 581
Actual number of shares in issue
at end of period (net of treasury
shares) (`000) 104 336 100 023 103 022
Diluted earnings/(loss) per
share (cents)
- Basic 309,16 91,16 117,50
- Headline 84,23 (1,55) 2,65
Weighted average number of shares
in issue (`000) 115 307 111 803 112 361
ABRIDGED CONSOLIDATED BALANCE SHEET
30 September 31 March
2004 2003 2004
R`000 R`000 R`000
(unaudited) (unaudited) (audited)
ASSETS
Non-current assets 719 323 419 625 409 621
Property, plant and equipment 396 734 66 138 121 971
Goodwill and trademark 8 865 - 9 979
Negative goodwill - - (1 492)
Investments 313 724 353 487 279 163
Current assets 1 478 587 628 316 1 743 755
Total assets 2 197 910 1 047 941 2 153 376
EQUITY AND LIABILITIES
Ordinary shareholders` equity 1 022 897 616 372 664 184
Minority shareholders` interest 177 227 157 290 230 142
Non-current liabilities and
preference shares 82 937 29 216 38 619
Net financial liabilities 51 641 - 50 923
Deferred tax 49 514 15 16 857
Current liabilities 813 694 245 048 1 152 651
Total equity and liabilities 2 197 910 1 047 941 2 153 376
Net asset value per share (cents) 980 616 645
Actual number of shares in issue
at end of period (net of treasury
shares) (`000) 104 336 100 023 103 022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share
capital premium NDR
R`000 R`000 R`000
Balances at 1 April 2003 25 005 474 743 624 586
Share capital and premium
Shares issued 750 9 750 -
Current operations
Profit for the year - - -
Currency translation
differences - - (224)
Change in holdings in
subsidiary companies - - -
Transfer fair value
adjustments on realisation - - (15 749)
Revaluation
Other transfers - - (524 542)
Balances at 31 March 2004 25 755 484 493 84 071
Share capital and premium
Shares issued 229 1 161 -
Shares released by
share trust 100 760 -
Share issue costs - (25) -
Current operations
Profit for the period - - -
Currency translation
differences - - 2
Transfer fair value
adjustments on realisation - - (84 031)
26 084 486 389 42
Accumulated
profits Total
R`000 R`000
Balances at 1 April 2003 (602 655) 521 679
Share capital and premium
Shares issued - 10 500
Current operations
Profit for the year 132 022 132 022
Currency translation
differences - (224)
Change in holdings in
subsidiary companies 207 207
Transfer fair value
adjustments on realisation 15 749 -
Revaluation
Other transfers 524 542 -
Balances at 31 March 2004 69 865 664 184
Share capital and premium
Shares issued - 1 390
Shares released by
share trust - 860
Share issue costs - (25)
Current operations
Profit for the period 356 486 356 486
Currency translation
differences - 2
Transfer fair value
adjustments on realisation 84 031 -
510 382 1 022 897
ABRIDGED CONSOLIDATED CASHFLOW STATEMENT
Six months ended Year ended
30 September 31 March
2004 2003 2004
R`000 R`000 R`000
(unaudited) (unaudited) (audited)
Cashflows from operating
activities 29 043 203 286 298 423
Cashflows from investing
activities (84 796) 54 761 (240 790)
Cashflows from financing
activities (19 054) (262 849) (64 291)
(Decrease)/increase in cash and
cash equivalents (74 807) (4 802) (6 658)
Cash and cash equivalents
At beginning of period 404 082 201 492 201 492
On acquisition/disposal of
subsidiaries 210 345 - 209 248
At end of period 539 620 196 690 404 082
SEGMENT REPORT
The following are the summarised results for the various primary group
Segments for the interim period:
Segment Segment Segment Segment
revenues results assets liabilities
R`000 R`000 R`000 R`000
Media and broadcasting 331 150 60 288 655 513 233 190
Financial services 47 197 17 475 709 683 437 439
Gaming and leisure 7 443 32 021 205 158 375
Information technology - 679 18 628 -
Industrial 106 873 466 109 219 95 743
Transport 136 016 20 994 355 677 149 206
Other 6 180 224 563 144 032 81 833
634 859 356 486 2 197 910 997 786
Taxation is included in other as follows:
Assets R2,441 million, liabilities R74,702 million and results R8,040 million.
Included in other segment results is negative goodwill released of R89,38
million and the investment surplus of R138,67 million. No secondary segment
report has been included as the group derives substantially all its revenues
and income from within the Republic of South Africa.
COMMENTARY
REVIEW OF INVESTMENTS
Media and Broadcasting
Midi TV (Pty) Limited (`e-TV`)
e-TV has benefited from improved general economic conditions and favourable
currency markets, with revenue growing significantly and a reduction in
programming costs as compared to the comparative prior period.
e-TV contributed R61,05 million to group headline profits.
Africa-on-Air (Pty) Limited (`Africa-on-Air`)
During the period under review shareholders approved the disposal by the group
of its financial interest in Africa-on-Air for an amount of R180 million.
Shareholders are referred to announcements made and the circular issued by the
company for details of this disposal.
Gaming and Leisure
Vukani Gaming Corporation (Pty) Limited (`Vukani`)
Vukani operates limited payout gambling machines as a route operator under
licence from three provincial gaming boards.
As was previously reported, expansion of trading operations continued at a slow
pace.
It is anticipated that this pace will increase in the coming period.
Vukani will require the injection of significant group cash resources during
this initial roll-out phase. The directors of HCI are confident that once the
business matures it will make a positive contribution to the group.
Tsogo Investment Holding Company (Pty) Limited (`TIH`)
During the period under review the group increased its interest in TIH from
27,77% to 32,07% at a cost of R45 million. TIH owns 51% of Tsogo Sun Holdings
(Pty) Limited (`Tsogo Sun`), thus giving the group an effective 16,35% interest
in Tsogo Sun.
During the period under review TIH`s equity accounted results contributed
R22,62 million to group headline earnings.
Financial Services
Mettle Limited (`Mettle`)
Mettle, which is again profitable after the disposal of the treasury
operations, has performed in line with expectations and has contributed R7,01
million to group headline profit.
Subsequent to the period under review the group made a successful offer, in
terms of Section 440 of the Companies Act, to acquire all of those Mettle
shares not already owned by the group. Shareholders are referred to
announcements made by the group for detailed results of the offer.
Transport
Golden Arrow Bus Services (Pty) Limited (`GABS`)
During the period under review shareholders approved the acquisition by the
group of GABS. Shareholders are referred to announcements made and the circular
issued by the company for details of this acquisition.
The results of GABS, which were consolidated with those of the group for the
second half of the period under review, contributed R21,9 million to group
headline profit.
OPERATIONS AND RESULTS FOR THE PERIOD
Business operations
The business operations of HCI include the making of investments in
opportunities as identified by the board of directors and to add value to these
investments over time.
As such, HCI has consciously established itself and pursued an investment
policy in terms of which it has endeavoured to maintain significant equity and
capital participation in entrepreneurially run companies with significant
growth potential. The investments are constantly reviewed and new ones sought
to complement them. Your directors are confident that the group will deliver
satisfactory growth in the future.
Accounting policies
The interim report to shareholders is prepared on the historical cost basis
modified by the revaluation of investments and conforms with Statements of South
African Generally Accepted Accounting Practice. The accounting policies of the
group have been consistently applied.
Restatement of comparative figures
The group has consolidated the HCI Employee Trust (2001) in accordance with the
JSE Securities Exchange SA`s interpretation of the provisions of AC132.
Accordingly, the comparative figures have been restated where necessary and
fully diluted earnings per share are also presented.
Results for the period
The group reported headline earnings per share of 94,28 cents compared with the
restated headline loss per share of 1,73 cents for the comparative period. This
improvement is largely attributable to the improved performance of e-TV and the
recognition for the first time of income from GABS and TIH. The investment
surplus arose primarily from the disposal of the group`s interest in
Africa-on-Air, while negative goodwill released relates mainly to the
acquisition of GABS.
PROPOSED DELISTING OF HCI AND OFFER TO ALL SHAREHOLDERS
The proposed delisting of the company was being held in abeyance until the
finalisation of an application by a shareholder of HCI, in the High Court of
South Africa.
During the period under review your directors had taken a decision to cause the
company to withdraw its opposition to the litigation. Consequently the company
did not pursue its delisting proposal and instead applied to the JSE for the
lifting of the suspension of the company`s shares. The company`s shares resumed
trading on the JSE on 13 September 2004.
DIRECTORATE
The board is pleased to welcome JG Ngcobo as its newest member.
DISTRIBUTION TO SHAREHOLDERS
On 21 October 2004 the directors declared a dividend of ninety five cents per
share.
In view of the fact that many of the larger businesses that the group is
invested in are now profitable, the board has decided that it will make annual
distributions to shareholders based on the year end audited results of the
group.
For and on behalf of the board of directors.
MJA Golding Chairman
JA Copelyn Chief Executive Officer
Durban
6 December 2004
Sponsor
Nedbank Capital
Registered office: Suite 624
Office Tower
Overport City
430 Ridge Road
Durban, 4001
(PO Box 70874, Overport City, 4067)
Transfer secretaries: Computershare Investor Services 2004 (Pty) Ltd
70 Marshall Street
Johannesburg, 2001
(PO Box 61051, Marshalltown, Johannesburg, 2107)
Directors: MA Golding (Chairman), JA Copelyn (Chief Executive Officer)
VE Mphande, VM Engel*, MF Magugu*, JG Ngcobo*, AM Ntuli*
*(non-executive)
Company secretary: TG Govender
