| Mon 20 Dec 2004, 15:56 | | REPORT FOR THE 12 MONTHS ENDED 30 SEPTEMBER 2004 |
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MATHOMO - PRELIMINARY REPORT FOR THE 12 MONTHS ENDED 30 SEPTEMBER 2004
MATHOMO GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1995/004783/06)
Share code: MTO ISIN: ZAE000037214
(`Mathomo` or `Group` or `the Company`)
PRELIMINARY REPORT FOR THE 12 MONTHS ENDED 30 SEPTEMBER 2004
CONSOLIDATED INCOME STATEMENT
Reviewed Audited
Period ended Year ended
30 September 30 September
2004 2003 %
R000`s R000`s Change
Revenue 295 484 271 034 9
Operating profit before
finance costs 5 915 21 389 (72)
Net finance costs (6 405) (8 092) (21)
Interest received 274 1 459 (81)
Interest paid (5 257) (7 831) (33)
Preference dividend (1 422) (1 720) (17)
Net (loss) profit before
exceptional items (490) 13 297
Exceptional items 2 056 197
Net profit before taxation 1 566 13 494 (88)
Taxation (3 576) (259)
(Loss) Profit attributable
to ordinary shareholders (2 010) 13 235
Reconciliation of net (loss)
profit for the period to
headline (deficit) earnings:
Net (loss) profit for the period (2 010) 13 235
Add back:
Exceptional items:
- Recoveries from previously
discontinued operations - (197)
- Profit on sale of trademark (1 363) -
Closure of the Freezerwear factory 624 -
Headline (loss) earnings (2 749) 13 038
Number of shares in issue 47 179 214 47 179 214
Weighted number of shares
in issue 47 179 214 47 179 214
Headline (loss) earnings
per share (cents) (5,8) 27,6
(Loss) Profit per share (cents) (4,3) 28,1
SEGMENTAL ANALYSIS
Distribution of
PPE Retail Other Total
R000`s R000`s R000`s R000`s
Revenue 2004 230 932 64 552 - 295 484
Revenue 2003 201 495 69 539 - 271 034
Operating profit before
finance cost 2004 3 912 5 537 (3 534) 5 915
Operating profit before
finance cost 2003 16 936 4 735 (282) 21 389
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Reviewed Audited
Period ended Year ended
30 September 30 September
2004 2003
R000`s R000`s
Cash generated from operating activities 9 455 9 001
Cash utilised in investing activities (4 895) (835)
Cash (utilised in) generated from
financing activities (12 215) 1 617
Net movement in cash (7 655) 9 783
Net cash resources at beginning of the year (25 179) (34 962)
Net cash inflow for the period (32 834) (25 179)
CONSOLIDATED BALANCE SHEET
Reviewed Audited
Period ended Year ended
30 September 30 September
2004 2003
R000`s R000`s
ASSETS
Non-current assets 18 807 16 485
Property 10 072 9 650
Plant and equipment 8 735 6 835
Current assets 98 385 98 289
Inventories 48 278 52 049
Accounts receivable 50 107 46 240
Total assets 117 192 114 774
EQUITY AND LIABILITIES
Capital and reserves 12 290 14 300
Ordinary share capital 472 472
Share premium 122 763 122 763
Non distributable reserve 2 325 2 325
Accumulated loss (113 270) (111 260)
Non-current liabilities 22 751 34 663
Interest bearing liabilities 2 751 4 663
Preference shares 20 000 30 000
Current liabilities 82 151 65 811
Accounts payable 44 596 39 681
Bank overdrafts 32 834 25 179
Interest bearing liabilities 435 738
Taxation 4 286 213
Total equity and liabilities 117 192 114 774
Net asset value per share (cents) 26,0 30,3
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Reviewed Audited
Period ended Year ended
30 September 30 September
2004 2003
R000`s R000`s
Balance at beginning of the year 14 300 1 065
(Loss) Profit for the period (2 010) 13 235
Balance at end of the period 12 290 14 300
INTRODUCTION
During the period under review, Mathomo initiated a restructuring process. The
Board decided to make certain management and structural changes to create a
single national trading company and eliminate duplication.
These changes were necessitated by the ongoing losses in certain of the
divisions.
GOING CONCERN
As mentioned above, over the past six months the Mathomo directors have
initiated a restructuring process in order to restore certain divisions to
profitability and to strengthen the Group`s financial position. The effects of
the restructuring process continue to yield positive results. Accordingly, the
directors have adopted the going concern basis in preparing the preliminary
results.
ACCOUNTING POLICIES
These preliminary results have been prepared in accordance with the South
African Statements of Generally Accepted Accounting Practice applicable to
interim financial reporting. The accounting policies used in its preparation are
consistent with those adopted for the audited financial statements to 30
September 2003.
OPERATIONAL REVIEW
Mathomo consists of:
* Alsafe - a distributor of personal protective equipment and clothing (`PPE`)
to industry generally;
* Select PPE - an onsite supplier and issuer of PPE, with a particular focus on
the mining industry;
* M Stores - a workplace retailer with a particular focus on the mining
industry; and
* Select Corporate - a supplier of corporate gifts and apparel.
Alsafe had a challenging time in the period under review, primarily due to an
increased cost base that did not result in increased sales, while margins were
continually under pressure.
Select PPE had a sound trading period, continually winning new contracts that
led to an increased store base.
M Stores and Select Corporate performed well under difficult retail trading
conditions on the mines. However, they did not produce any real growth in
earnings during the period.
EXCEPTIONAL ITEMS
2004 2003
R000`s R000`s
Recoveries from previously discontinued
operations 693 197
Profit on sale of trademarks 1 363 -
2 056 197
OTHER SIGNIFICANT EVENTS DURING THE PERIOD UNDER REVIEW
* At the Board meeting held on 25 June 2004 Leslie Matuson was appointed as
Interim Chief Executive Officer with immediate effect.
* On 3 December 2004 Deloitte & Touche were appointed as the new auditors in
line with the requirements of the Mineworker`s Investment Company (Proprietary)
Limited (`MIC`).
* The following restructuring steps have been undertaken:
- the closure of the Freezerwear factory in Cape Town;
- the discontinuation of the CMT operations in Durban;
- the retrenchment of certain national and regional management, sales
representatives and manufacturing staff; and
- making sufficient provisions against the Group`s stockholding based on the
directors` assessment of excess and slow moving stock. These provisions will be
subject to ongoing review.
TAXATION
As noted in last year`s financial statements, Mathomo had gross estimated tax
losses of R82.7 million at 30 September 2003 available for set-off against
future income. Tax assessments received from SARS to the year ended
30 September 2001 allowed the losses incurred by Mathomo. Subsequently, SARS
has raised assessments on Mathomo, which are currently being reviewed by the
company`s consultants.
To the extent that assessments have been received, tax has been fully provided
for in the year under review.
A deferred tax asset has not been raised presently, and this shall be reviewed
at the time the annual report is published when greater certainty is had to the
resolution of the above tax matters.
RESULTS OF THE MANDATORY OFFER
During the period under review MIC made an offer to all the remaining
shareholders of Mathomo. MIC, which is a broad based black empowerment company,
has increased its holding to 58.63% of the issued share capital of Mathomo.
CHANGE OF FINANCIAL YEAR-END
Due to Mathomo becoming a subsidiary of MIC which has a reporting year-end of 28
February, it is required to change its financial year-end to be co-terminous
with that of MIC. The results for the next financial year-end, being the 17
months to 28 February 2005 will be published during May 2005.
BOARD CHANGES
On 4 August 2004, Larry Serman resigned as Chief Executive Officer from the
board of directors and all sub committees on which he served. The board has
initiated a process to review its composition which will include the
identification and appointment of independent directors.
DEBT REDUCTION PROGRAMME
The debt reduction plan was set out in the 2002 Annual Report. Further success
has been achieved in effecting the debt reduction and the progress made in the
period under review was the redemption of R10 million of preference share
capital out of existing Group cash resources.
The Group continues to examine methods of furthering the repayment of debt and
the restructuring of its balance sheet and activities. Further announcements in
this regard will be made in due course.
PROSPECTS
The Group continues to face considerable challenges. The repositioning will be
achieved by continuing to grow the existing businesses organically, while
simultaneously investigating suitable new business opportunities.
The restructuring process has resulted in a more stable Group. The Board is
confident that Mathomo`s restructured cost base and renewed focus provides the
Group with a solid foundation for future growth.
However the Mathomo Board is committed to taking further steps, if required, to
assist with the ongoing restructuring process of the Group.
REVIEW OPINION
The Group`s auditors, Deloitte & Touche, have reviewed the results. Their
unqualified review report is available for inspection at Mathomo`s registered
office.
POST BALANCE SHEET EVENTS
No material facts or circumstances have occurred between balance sheet date and
date of this report.
DIVIDENDS
No interim dividend has been declared (2003: nil).
By order of the Board
Johannesburg
14 December 2004
Sponsor
Java Capital (Pty) Limited
Date: 20/12/2004 03:51:06 PM
Produced by the JSE SENS Department
