| Mon 20 Dec 2004, 13:46 | | RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2004 |
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Falcon - Preliminary Announcement Of Unaudited Results For The Year Ended 30th
September 2004
Falcon Investment Holdings Societe Anonyme
(Incorporated in Luxembourg - R.C. Number B39773)
(`the Company`)
Share code: FLC ISIN number: LU0042254812
Registered Office
6 rue Adolphe Fischer,
L-1520, Luxembourg
20th December 2004
PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS FOR THE YEAR ENDED 30TH SEPTEMBER
2004
I am pleased to be able to report that the protracted process of liquidating our
subsidiary in Chile has finally been completed and all funds have now been
returned from Chile to the parent company and our co-investors. Settlement of
the arbitration process regarding the interpretation of the shareholders
agreement cost US$299,000 including expenses. Additional taxes of US$320,000
were also paid to ensure that the liquidation process was not delayed by the
Chilean tax authorities.
The liquidation of our Chilean subsidiary has dramatically altered our balance
sheet. There were significant cash outflows in the period to settle tax
liabilities and when control passed to the liquidator we ceased to consolidate
its cash balances and minority interests, and now our balance sheet shows as a
receivable the cash subsequently received on completion of the liquidation.
Including the final distributions from Chile received after the year-end, the
Group now has liquid funds in Luxembourg available for re-investment in excess
of US$4 million (US$2.25 per share). We continue to hold the bulk of these
funds in Sterling as we expect the US Dollar to weaken further and we are
looking for investment opportunities in the U.K. The deposits in Pounds
Sterling have generated income in the year of US$122,000 and exchange gains of
US$203,000. These unrealised paper profits on exchange may increase or decrease
in future periods, depending on the movement in exchange rates.
During the year we received US$70,000 for the grant of an exclusivity period to
a potential buyer of one of our subsidiaries. Discussions regarding a sale are
ongoing and shareholders will be advised as soon as there is anything
substantive to report. The exclusivity period has lapsed and so we have
recognised this amount as exceptional income.
In the interim statement Shareholders were advised that negotiations for a
potential acquisition of a new business had been discontinued, as we were unable
to agree satisfactory terms. Costs incurred of US$46,000 were included as
Operating costs in the interim report, but are now shown as part of Exceptional
items.
The Zimbabwe gold mining companies in which we are invested remain in operation,
but the economic situation in Zimbabwe is such that their future continues to be
uncertain. Reserves are being depleted, restricting future gold mining
capabilities. Staff in the mining companies continue to work in very difficult
circumstances and we remain grateful for their ongoing efforts.
We do not consolidate the accounts of our Zimbabwe subsidiaries because of a
lack of effective control over these investments, whose operational viability is
dependent on the manner in which the Government of Zimbabwe chooses to manage
the price for the compulsory purchase of gold. The situation as this review is
being written is critical. Significant back-dated pay increases have been
agreed with unions and the Department of Mines but the Government has not
granted any increase in the gold price to offset the increased operating cost.
The profit generated by the mines last year was insufficient to fund the back-
dated pay awards and increases in working capital requirements due to inflation.
The search continues for a well-established and profitable U.K. business in
which we can re-invest our funds and so give the Company a new future.
David C Marshall
Chairman
NOTICE OF MEETING
The Annual General Meeting will take place on Thursday 24th March 2005 at 3.00
p.m. at the registered office of the Company, 6 rue Adolphe Fischer L-1520
Luxembourg.
Unaudited Consolidated Profit and Loss Account
2004 2003
US$000 US$000
Revenue - -
Operating costs (319) (387)
Operating loss before interest and taxation (319) (387)
Income from investment in Zimbabwean - 65
subsidiary- dividend
Interest received 149 11
Exchange gains 206 89
Profit/(Loss) before exceptional item and 36 (222)
taxation
Exceptional items (Note 2) (275) 10,108
(Loss)/Profit before taxation (239) 9,886
Tax charge (Note 3) (326) (3,199)
(Loss)/Profit on ordinary activities after (565) 6,687
tax
Minority interests 207 (4,341)
(Loss)/Profit attributable to shareholders (358) 2,346
and retained for the year
Reconciliation of headline earnings per share
Basic (loss)/earnings per share (US cents) (19)c 126 c
Less exceptional item, net of tax and 21 c (137)c
minority interests (US cents)
Headline earnings/(loss) per share (US cents) 2 c (11)c
Unaudited Consolidated Statement of Recognised Gains and Losses
2004 2003
US$000 US$000
Exchange differences on translation of the
financial statements of foreign entities and (6) 720
net gains not recognised in the income
statement
Net (loss)/profit for the year (358) 2,346
Total recognised (losses)/gains and movement (364) 3,066
in shareholders` funds
Opening shareholders` funds 4,219 1,153
Closing shareholders` funds 3,855 4,219
Unaudited Consolidated Balance Sheet
2004 2003
US$000 US$000
Assets
Non current assets
Investments 130 130
Current assets
Accounts receivable 703 57
Cash and bank balances 3,166 8,084
3,869 8,141
Current liabilities
Accounts payable (falling due within one (144) (2,477)
year)
Net current assets 3,725 5,664
Total assets less current liabilities 3,855 5,794
Capital and reserves
Called up share capital 2,060 2,060
Legal reserves 402 326
Retained earnings 1,393 1,833
Shareholders` funds 3,855 4,219
Minority interests - 1,575
3,855 5,794
Unaudited Consolidated Cash Flow Statement
2004 2003
US$000 US$000
Cash flows from operating activities
Cash (used)/generated by operations (406) 202
Interest received 149 11
Dividend received from Zimbabwean subsidiary - 65
Taxation paid (1,970) (1,157)
Net cash outflows from operating activities (2,227) (879)
Investment activities
Purchase of tangible assets - (12)
Liquidation of subsidiary (1,914) -
Arbitration settlement (299) -
Net proceeds on disposal of tangible fixed - 11,729
assets
Net cash (outflow)/inflow from investment (2,213) 11,717
activities
Net cash (outflow)/inflow before financing (4,440) 10,838
activities
Financing activities
Dividends paid to outside shareholders (472) (3,705)
Net cash outflow from financing (472) (3,705)
Net (decrease)/increase in funds (4,912) 7,133
Net funds at start of year 8,084 319
Effect of foreign exchange rate changes (6) 632
Net funds at end of year 3,166 8,084
Notes
1.In accordance with the practice adopted in 2002, the earnings, assets and
liabilities of Zimbabwean subsidiary companies have not been consolidated.
Investments have been reflected in accordance with IAS 39. The results for the
year ended 30th September 2004 and the balance sheet at that date, which are
unaudited, have been prepared on the basis of accounting policies adopted for
the year ended 30th September 2003. The financial statements comply with
International Accounting Standards and Luxembourg law in all material respects.
The results, which have been reviewed by the Company`s auditors, AGN Horsburgh &
Co., are unaudited.
2.The exceptional item mainly relates to the cost of settling the arbitrated
dispute in Chile of US$299,000 (2003 - profit realised on sale of the Chilean
iodine project).
3.The tax charge for the current year includes US$320,000 in respect of the
exceptional profit in 2003 on the disposal of Chilean tangible fixed assets.
4.Profit/(Loss) per share is based on the result for the year attributable to
members and the number of shares in issue of 1,864,026.
5.Capital expenditure during the year was equivalent to US$Nil (2003 -
US$12,000). At 30th September 2004, there were no outstanding capital
commitments (2003 - Nil).
SPONSOR
IMARA CORPORATE FINANCE SOUTH AFRICA (PTY) LIMITED
Date: 20/12/2004 01:00:10 PM
Produced by the JSE SENS Department
