| Tue 14 Dec 2004, 16:21 | | Results For The Six Months Ended 30 September 2004 |
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Moneyweb - Unaudited Results For The Six Months Ended 30 September 2004 And
Withdrawal Of Cautionary Announcement
MONEYWEB HOLDINGS LIMITED
(`Moneyweb` or `the Company`)
(Registration No:1998/025067/06)
ISIN code: ZAE000025409
Share code: MNY
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2004 AND WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
Moneyweb Holdings Limited
Consolidated Income Statement
Unaudited Unaudited Audited
Six months Six months % Year
ended ended Change ended
30-Sep-04 30-Sep-03 31-Mar-04
R`000 R`000 R`000
Revenue 8,562 10,256 -17% 20,128
EBITDA (511) 1,506 -134% 3,047
Depreciation & amortisation (410) (464) -12% (955)
Operating (loss)/income (921) 1,042 -188% 2,092
Net investment income 246 280 -12% 477
Income from associates (net of
taxation) 286 324 -12% 577
(Loss)/profit before taxation (389) 1,646 -124% 3,146
Taxation 187 (457) -141% (604)
(Loss)/Profit before goodwill
amortisation (202) 1,189 -117% 2,542
Goodwill amortisation* (7,541) (7,561) 0% (15,081)
Net loss for the period (7,743) (6,372) -22% (12,539)
Basic loss per share (cents) (9,9) (7,8) -27% (15,7)
Fully diluted loss per share (cents)(9,9) (7,8) -27% (15,7)
Headline (loss)/earnings per
share (cents) (0,3) 1,5 -120% 3,2
Fully diluted headline (loss)/
earnings per share (cents) (0,3) 1,4 -121% 3,2
Reconciliation of headline earnings:
Net loss for the period (7,743) (6,372) (12,539)
Goodwill amortisation* 7,541 7,561 15,081
Headline (loss)/earnings (202) 1,189 2,542
*This is a non-operating item. It relates to goodwill arising on acquisitions,
primarily at the listing of the company. The goodwill is written off over 5
years.
Number of shares (000`s)
- issued closing
(net of treasury shares) 78 032 78 032 78 032
- weighted average 78 032 81 274 79 653
- fully diluted weighted
average 78 533 82 074 80 094
Moneyweb Holdings Limited
Consolidated Balance Sheet
Unaudited Unaudited Audited
30-Sep-04 30-Sep-03 31-Mar-04
R`000 R`000 R`000
ASSETS
Non-current assets
Tangible assets 1,083 913 909
Intangible assets 7,331 21,359 14,315
Investment in associates 5,598 7,080 6,587
Other investment 12 9 12
Deferred taxation 238 31 12
14,262 29,392 21,835
Current assets
Trade and other receivables 3,789 4,121 4,382
Income tax prepaid 7 - 28
Cash and cash equivalents 5,075 4,473 7,858
8,871 8,594 12,268
Total assets 23,133 37,986 34,103
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 9,295 10,389 10,543
Accumulated profit 9,781 23,691 17,524
Ordinary shareholders interest 19,076 34,080 28,067
Non-current liabilities
Shareholders` loan 438 438 438
438 438 438
Current liabilities
Trade and other payables 2,524 2,584 3,575
Provisions 129 93 117
Deferred revenue 964 367 1,444
Income tax payable - 422 460
Shareholders for dividend 2 2 2
3,619 3,468 5,598
Total equity and liabilities 23,133 37,986 34,103
Net asset value per share (cps) 24,4 43,7 36,0
Net tangible asset value per share (cps) 15,1 16,3 17,6
Moneyweb Holdings Limited
Consolidated statement of changes
in shareholders` equity
Unaudited Unaudited Audited
Six months Six months Year
to to ended
30-Sep-04 30-Sep-03 31-Mar-04
R`000 R`000 R`000
Balance at beginning of the period 28,067 42,442 42,442
Net loss for the period (7,743) (6,372) (12,539)
Share repurchase in terms of
general authority - (1,990) (1,990)
Disposal of share incentive trust shares - - 154
Capital distribution paid (1,248) - -
19,076 34,080 28,067
Moneyweb Holdings Limited
Consolidated cash flow statement
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30-Sep-04 30-Sep-03 31-Mar-04
R`000 R`000 R`000
Cash flows from operating activities
Cash (absorbed)/generated by operations (992) 1,278 3,894
Movements in working capital (444) (820) (65)
Cash (absorbed)/generated by
operating activities (1,436) 458 3,829
Investment income 246 281 477
Normal taxation paid (479) (458) (576)
Capital distribution paid (1,248) - -
Dividend received 588 - -
Net cash flows (absorbed)/generated
by operating activities (2,329) 281 3,730
Cash flows from investing activities
Acquisition of tangible assets (374) (134) (355)
Acquisition of treasury shares - (1,990) (1,990)
Loan advanced to associate (80) (207) (207)
Disposal of share trust shares - - 154
Proceeds on disposal of fixed assets - - 3
Net cash outflows from investing
activities (454) (2,331) (2,395)
Net movement in cash and cash
equivalents for the period (2,783) (2,050) (1,335)
Cash and cash equivalents at
beginning of period 7,858 6,523 6,523
Cash and cash equivalents at
end of period 5,075 4,473 7,858
COMMENT
These financial results reflect the initial impact of a process at Moneyweb of
restructuring and refocusing. Profitability was affected by the following
developments:
- The company`s broadcasting relationship with Classic FM ended on June 30,
resulting in a substantial negative impact on revenues. Although highly
profitable, the arrangement with this radio station precluded the company
from expanding its radio activities. New delivery channels have been
secured for the flagship Moneyweb Power Hour programme and after the
expected initial reverse, listenership has been growing strongly. As
anticipated, advertising revenues are taking longer to rebuild.
- One of the new broadcast partners, 1485amGold Radio Today, required
considerable financial and other assistance which Moneyweb provided as part
of its longer-term strategy of establishing independence in radio. Among
these was the provision by Moneyweb of a well resourced morning breakfast
show which was subsequently aborted.
- Because of the strategic relevance to the company, a decision was taken to
retain the global resources website Mineweb.com despite advances by an
American buyer. The decision to turn down the approach led to the departure
of some key staff members who had been negotiating the possible sale, with
a direct impact on revenues.
- Shareholders are aware that Moneyweb has been trading under cautionary for
some time. The cautionary announcement pertained to discussions with M&G
Media Limited (M&G), publishers of a weekly national newspaper. These
advanced beyond ideas of co-operation into serious negotiations on a full-
blown merger. This proved to be an expensive exercise for a company with
Moneyweb`s limited resources. Unfortunately the discussions have been
terminated resulting in the withdrawal of the cautionary announcement
referred to below.
- Additional costs were introduced through the company`s move into the
Afrikaans speaking market through a daily one hour business programme on
Radio Sonder Grense - RSG se Geldsake met Moneyweb.
- The company also made a strategic decision to beef up its sales team,
implementation of which had a negative impact on profitability in the short
term.
These actions combined to result in a disappointing reverse for a company which
since its founding in 1997, had only briefly dipped into the red.
G
ENERALLY ACCEPTED ACCOUNTING PRACTICE
These unaudited interim financial statements have been prepared in accordance
with South African Statements of Generally Accepted Accounting Practice. The
accounting policies used in the preparation of the unaudited interim financial
results are consistent with those used in the audited annual financial
statements for the year ended 31 March 2004.
COMPARATIVES
The comparative figures for the six months ended 30 September 2003 have been
restated in accordance with circular 7/2002 issued by SAICA and as a result of
the changes in accounting policies adopted in the year ended 31 March 2004 as
set out in the 2004 Annual Report.
These changes resulted in the consolidation of the group`s employee share
incentive trust, the restatement of gross revenue in order to include gross
revenue from the sale of mailings lists in revenue and the disclosure of
goodwill as a non-current asset.
These adjustments have had a negligible effect on headline earnings per share
and net asset value per share as reported in respect of the 6 months ended 30
September 2003.
PROSPECTS
The current financial year is being devoted to restructuring and putting the
business onto a stronger, more sustainable foundation. All of the actions taken
in the first half and the current restructuring will position the company for a
bright future. Radio advertising revenues are rising; the expensive breakfast
show has been aborted; Mineweb.com has been stabilized through the injection of
highly competent staff under the guidance of former Business Day editor Jim
Jones; and results from the expanded sales team led by radio veteran Gilda de
Araujo are gathering momentum.
However, losses sustained in the latter months of the period under review
continued into the second half. With the proposed merger now aborted,
management`s full focus is on bringing costs into line with the revenue base.
These measures are expected to result in a return to monthly profitability by
February and shareholders will be kept informed in that regard.
DIVIDENDS
In view of the operating performance of the company no dividend is declared.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
As negotiations on a possible merger with M&G have been terminated, shareholders
are accordingly advised that the renewal of cautionary announcement released on
SENS on 16 November 2004 is withdrawn and caution is no longer required when
dealing in their Moneyweb shares on the JSE Securities Exchange South Africa.
AB Hogg EA Jay
Chairman Chief Executive Officer
Rosebank, Johannesburg
14 December 2004
Sponsor
Grant Thornton Corporate Finance (Pty)Ltd
