| Wed 15 Dec 2004, 9:59 | | RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2004 |
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Indequity - Abridged report on the annual financial statements for the year
ended 30 September 2004 and notice to members of annual general
meeting
Indequity Group Limited
Registration number: 1998/015883/06
Incorporated in the Republic of South Africa
`Indequity` or `the Group` or `the company`
Share code: IDQ
ISIN: ZAE000016606
ABRIDGED REPORT ON THE ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30
SEPTEMBER 2004 AND NOTICE TO MEMBERS OF ANNUAL GENERAL MEETING
ABRIDGED GROUP INCOME STATEMENT for the year ended
30 Sep 2004 30 Sep 2003
Audited Audited
R R
Investment income 1 275 949 987 960
Investment banking and private equity
income 1 069 023 1 543 554
Insurance income 4 819 268 6 628 387
Total revenue 7 164 240 9 159 901
Expenses attributable to cell captive
underwriting 743 969 5 287 174
Net underwriting expenses and claims 2 166 125 835 197
incurred - proprietary underwriting
Finance charges 292 602 230 633
Depreciation 220 792 267 044
Operating expenses 5 553 757 6 968 800
Total expenses 8 977 245 13 588 848
Loss before taxation (1 813 005) (4 428 947)
Taxation 592 352 1 035 304
Outside shareholders` interest in
private equity investments` losses 113 716 159 201
Basic earnings (1 106 937) (3 234 442)
Headline earnings per share (cents) (9,10) (26,76)
Basic earnings per share (cents) (9,10) (26,76)
Fully diluted headline earnings per (9,10) (26,76)
share (cents)
Number of shares
- in issue 12 170 000 12 170 000
- weighted average 12 170 000 12 086 667
- fully diluted 12 170 000 12 086 667
ABRIDGED GROUP BALANCE SHEET as at
30 Sep 2004 30 Sep 2003
Audited Audited
R R
ASSETS
Non-current assets 1 333 183 1 612 713
Current assets 9 806 450 11 268 085
Receivables 464 037 739 039
Deferred tax 1 924 332 1 379 350
Current tax asset 674 3 024
Inventory 36 472 89 019
Cash and cash equivalents 7 380 935 9 057 653
Total assets 11 139 633 12 880 798
EQUITY AND LIABILITIES
Share capital and premium 14 109 766 14 109 766
Contingency reserve 832 731 116 859
(Accumulated loss)/Retained income (7 876 816) (6 560 525)
Ordinary shareholders` funds 7 065 681 7 666 100
Preference shareholder`s interest 3 830 520 3 848 716
Minority shareholders` interest (1 542 111) (1 428 395)
Non-current liabilities 869 907 1 076 891
Technical insurance provisions 534 736 747 874
Current liabilities 380 900 969 612
Trade payables 285 165 558 430
Provisions 95 735 49 471
Bank overdraft - 361 711
Total equity and liabilities 11 139 633 12 880 798
Net asset value per ordinary share 58,06 62,99
(cents)
ABRIGED STATEMENT OF CHANGES IN EQUITY for the year ended
30 Sep 2004 30 Sep 2003
Audited Audited
R R
Balance at the beginning of the year
7 666 100 10 903 062
Net loss for the year (1 106 937) (3 234 442)
Ordinary share issued - 500 000
Purchase of treasury shares - (502 520)
Transfer to contingency reserve 506 518 -
Balance at end of year 7 065 681 7 666 100
ABRIDGED CASH FLOW STATEMENT for the year ended
30 Sep 2004 30 Sep 2003
Audited Audited
R R
Cash flows relating to operating
activities (1 603 846) (4 341 860)
Cash flows relating to investing
activities 514 018 2 841 425
Cash flows relating to financing
activities (225 179) (52 054)
Net decrease in cash and cash
equivalents (1 315 007) (1 552 489)
Cash and cash equivalents - beginning
of year 8 695 942 10 248 431
Cash and cash equivalents - end of
year 7 380 935 8 695 942
ACCOUNTING POLICIES
The accounting policies followed in preparing these financial statements comply
in all material respects with South African Statements of Generally Accepted
Accounting Practice and are consistent with those of the previous financial
year.
AUDIT OPINION
The annual financial statements have been audited by Dannhauser Inc. Their
unqualified audit opinion is available for inspection at the registered office
of Indequity.
COMMENTS ON RESULTS
As anticipated during the previous year, Indequity Group recorded a net loss of
R1,106,937 for the year to September 2004. This represents a significant
improvement over the prior year when a loss of R3,234,442 was incurred.
This marked improvement can largely be attributed to the growing contribution
from proprietary insurance underwriting whilst efforts to reduce operating
expenses have bourne fruit.
DIVISIONAL RESULTS
INSURANCE OPERATIONS
We are once again pleased to report that the sacrifices made in the past in
launching the group`s personal lines insurance product, have been worthwhile.
Premium earned increased by 200% to R3,3 million whilst underwriting expenses
and claims incurred have been restricted to R2,2 million. The net result is that
the net contribution to profits from proprietary underwriting has increased from
R258,928 in 2003 to R1,148,778 for the current year.
Premium income received from a cell captive facility continued to decline
sharply which impacted negatively on net income. The remaining contribution is
immaterial and is expected to decrease even further.
The group is extremely satisfied with the progress made by its insurance
operations and expects continued significant growth in the contribution to
income from this division.
ASSET MANAGEMENT
Income from asset management operations remained largely constant during our
second year in this industry. Management`s focus has been directed at
establishing a comprehensive product range whilst continuing to deliver results
for clients. It is gratifying to report that funds under management have
increased to over R100 million by year-end.
It is also noteworthy that all our Wrap Funds performed in line with their
benchmarks whilst the Dynamic Fund exceeded expectations to record an
outstanding return of 32,4% for the year to September 2004.
Management is pleased to report that approval has been obtained from the
Financial Services Board subsequent to year end, to launch the group`s own
series of unit trusts. These will comprise three fund of funds, an equity fund
as well as a money market/dividend yielding fund, which will all be launched on
15 December 2004.
The group expects that these initiatives will enable this division to become a
meaningful and consistent contributor to income over the next 2 to 5 years.
ALEXECOVET (PTY) LTD
Alexecovet continues to operate profitably and delivered an after cash return of
14,65% on invested capital over the past year. The group is extremely satisfied
with this performance. Once again, it is gratifying that the investment and
efforts of the past are now delivering the expected results.
PROSPECTS
Following the sacrifices made in the past in order to broaden the group`s income
base and to establish a company which is able to deliver solid annuity income
annually, the group is pleased with the progress it has made and the positive
results it is witnessing. The group has again taken significant strides in
meeting its strategic objectives.
Although the group is still anticipating short-term negative results, it expects
that it will continue to operate with increasing profitability.
DIVIDEND
No dividend has been declared for the year under review.
TRADING STATEMENT
Due to an oversight no Trading Statement has been published.
NOTICE TO MEMBERS OF ANNUAL GENERAL MEETING
Notice is hereby given that the annual general meeting of members of Indequity
Group Limited will be held at the registered office, First Floor, Cascade House,
corner 14th Avenue and Hendrik Potgieter Road, Constantia Kloof, at 15:00 on 25
January 2005.
ON BEHALF OF THE BOARD
A V van Jaarsveldt L J van Rensburg Johannesburg
Chairman Chief Executive Officer 15 December 2004
Directors: AV van Jaarsveldt* (British), LJ van Rensburg, TC Meyer, BJ
Slabbert*, JF Zwarts* (* non-executive)
Company secretary: S le Roux
Registered address: First Floor, Cascade House, Constantia Office Park, cnr
14th Avenue and Hendrik Potgieter Road, Constantia Kloof, 1709
Postal address: PO Box 5433, Weltevredenpark, 1715
Telephone: (+2711) 475-0816 Fax: (+2711) 475-0877
Website: www.indequity.com
Date: 15/12/2004 09:53:05 AM
Produced by the JSE SENS Department
