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JCI LIMITED - REVIEWED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2004,
PRO FORMA FINANCIAL EFFECTS ON THE PROPOSED DISPOSALS, AND WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
JCI LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1894/000854/06)
Share code: JCD ISIN: ZAE000039681
Debenture code: JCDD ISIN: ZAE000039699
(`JCI` or `the Group` or `the Company`)
REVIEWED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2004,
PRO FORMA FINANCIAL EFFECTS ON THE PROPOSED DISPOSALS,
AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
CONSOLIDATED INCOME STATEMENTS (ABRIDGED)
Reviewed
period ended
Notes 30-Sep-04
R`000
Revenue 223 154
(Loss)/profit for the period (90 816)
Investment income 1 688
Finance costs (76 497)
Share of (losses)/earnings from associates (79 871)
Net (loss)/profit for the period before
taxation (245 496)
Taxation 1 4 565
Net (loss)/profit for the period after
taxation (240 931)
Profit/(loss) attributable to outside
shareholders 3
Net (loss)/profit for the period (240 934)
(Loss)/earnings per share (cents) 2
Headline (12.1)
Attributable (12.1)
Diluted headline (9.6)
Diluted attributable (9.6)
Notes to the income statements
1. Taxation
- normal taxation
- current period -
- prior periods (4 565)
- deferred taxation -
- foreign normal taxation -
(4 565)
2. (Loss)/earnings per share
The calculation of attributable (loss)/earnings
per share is based on a (loss)/profit of (240 934)
and a weighted average number of 1 988 275 237
shares in issue
The calculation of headline (loss)/earnings
per share is based on a (loss)/profit of (240 934)
and a weighted average number of 1 988 275 237
shares in issue
The headline (loss)/earnings is calculated
as follows:
Net (loss)/profit for the period (240 934)
Profit on liquidation and sale of subsidiaries -
Unclaimed dividends written back -
Profit on sale of investments -
Additional costs in terms of the restructuring
of JCI Gold Limited effective 1 July 1998 -
Goodwill amortised -
Goodwill impaired -
Profit on sale of property, plant and equipment -
Gross (240 934)
Taxation effect -
Headline (loss)/earnings (240 934)
The calculation of the diluted attributable
(loss)/earnings per share is based on an
adjusted (loss)/profit of (219 331)
being the (loss)/profit of (240 934)
adjusted for interest on debentures of 21 603
and a weighted average number of 2 295 575 261
shares in issue on the assumption that all the
debentures are converted into ordinary shares
The calculation of the diluted headline
(loss)/earnings per share is based on
an adjusted headline(loss)/profit of (219 331)
being the headline (loss)/profit of (240 934)
adjusted for interest on debentures of 21 603
and a weighted average number of 2 295 575 261
shares in issue on the assumption that all the
debentures are converted into ordinary shares
Unaudited Audited
period ended year ended
30-Sep-03 31-Mar-04
R`000 R`000
Revenue 55 111 227 790
(Loss)/profit for the period 37 703 (100 788)
Investment income 10 785 5 956
Finance costs (42 752) (131 521)
Share of (losses)/earnings from associates 61 854 184 325
Net (loss)/profit for the period before
taxation 67 590 (42 028)
Taxation (48) (13 350)
Net (loss)/profit for the period after
taxation 67 542 (55 378)
Profit/(loss) attributable to outside
shareholders - (95)
Net (loss)/profit for the period 67 542 (55 283)
(Loss)/earnings per share (cents)
Headline 3.1 (10.6)
Attributable 3.9 (3.1)
Diluted headline 3.8 (7.0)
Diluted attributable 4.5 (0.6)
Notes to the income statements
1. Taxation
- normal taxation
- current period - 12 50 0
- prior periods - -
- deferred taxation - 850
- foreign normal taxation 48 -
48 13 350
2. (Loss)/earnings per share
The calculation of attributable
(loss)/earnings
per share is based on a (loss)/profit of 67 542 (55 283)
and a weighted average number of 1 730 215 003 1 793 477 247
shares in issue
The calculation of headline (loss)/earnings
per share is based on a (loss)/profit of 53 170 (189 313)
and a weighted average number of 1 730 215 003 1 793 477 247
shares in issue
The headline (loss)/earnings is calculated
as follows:
Net (loss)/profit for the period 67 542 (55 283)
Profit on liquidation and sale of
subsidiaries - (42 088)
Unclaimed dividends written back - (425)
Profit on sale of investments - (170 292)
Additional costs in terms of the
restructuring
of JCI Gold Limited effective 1 July 1998 - 15 000
Goodwill amortised (14 361) 24 957
Goodwill impaired - 27 143
Profit on sale of property, plant and
equipment (11) (825)
Gross 53 170 (201 813)
Taxation effect - 12 500
Headline (loss)/earnings 53 170 (189 313)
The calculation of the diluted attributable
(loss)/earnings per share is based on an
adjusted (loss)/profit of 87 536 (13 077)
being the (loss)/profit of 67 542 (55 283)
adjusted for interest on debentures of 19 994 42 206
and a weighted average number of 1 932 515 027 2 100 777 271
shares in issue on the assumption that all
the debentures are converted into
ordinary shares
The calculation of the diluted headline
(loss)/earnings per share is based on
an adjusted headline(loss)/profit of 73 164 (147 107)
being the headline (loss)/profit of 53 170 (189 313)
adjusted for interest on debentures of 19 994 42 206
and a weighted average number of 1 932 515 027 2 100 777 271
shares in issue on the assumption that all
the debentures are converted into ordinary
shares
PRO FORMA FINANCIAL EFFECTS ON THE PROPOSED DISPOSALS AND WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the announcement published on 9 December 2004
pertaining to the terms of the disposal by JCI of a portfolio of black economic
joint venture investments to Orlyfunt Holdings (Proprietary) Limited. The
financial effects of the proposed transaction are set out below.
The pro forma financial effects of the transactions on JCI are presented below
for illustrative purposes only based on the reviewed interim results of JCI for
the 6-month period ended 30 September 2004 and on the assumptions that:
- for balance sheet purposes, the transactions were effective on
30 September 2004; and
- for income statement purposes, the transactions were implemented on
1 April 2004.
Change
Before After %
Net asset value per share (cents) 27,4 63,8 132,8
Net tangible asset value per share (cents) 22,4 62,3 178,1
Loss per share (cents) (12,1) (14,0) -
Headline loss per share (cents) (12,1) (14,0) -
Number of shares in issue (`000) 1 990,3 1 990,3 -
Notes:
(1) Extracted from the reviewed interim results of JCI for the 6-month period
ended 30 September 2004 as set out herein.
(2) Prepared on the basis that JCI accounts for its resultant 40% interest in
OrlyFunt as an investment at the disposal consideration and based on the income
attributable to JCI in respect of the investments for the 6 months ended 30
September 2004 and on the pro forma earnings of OrlyFunt after the
implementation of the transactions.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
With the publication of these results and the pro forma financial effects set
out above, the cautionary is now withdrawn.
CONSOLIDATED BALANCE SHEETS (ABRIDGED)
Reviewed Unaudited Audited
period ended period ended year ended
Notes 30-Sep-04 30-Sep-03 31-Mar-04
R`000 R`000 R`000
ASSETS
Non-current
assets
- Property,
plant and
equipment 103 900 64 284 58 411
- Investment
proper ties 60 565 60 565 60 565
- Development
proper ties 131 081 - 107 589
- Mineral rights 136 259 1 584 122 623
- Goodwill 98 582 155 387 42 900
- Investments 2 1 290 337 1 025 837 1 047 787
- Loans 368 173 449 684 416 896
- Deferred tax 691 - 691
2 189 588 1 757 341 1 857 462
Current assets
- Cash resources 214 093 54 618 127 420
- Other 352 282 533 966 522 889
566 375 588 584 650 309
Total assets 2 755 963 2 345 925 2 507 771
EQUITY AND
LIABILITIES
- Capital and
reserves 584 494 915 754 740 935
- Treasury
shares (39 200) (54 452) (39 200)
- Outside
shareholders - 23 -
545 294 861 325 701 735
Non-current
borrowings
- Interest
bearing 3 686 345 310 724 677 078
- Non-interest
bearing 70 450 2 649 5 844
- Deferred tax 494 - 649
757 289 313 373 683 571
Current
liabilities
- Interest
bearing 1 236 093 968 781 901 133
- Non-interest
bearing 217 287 202 446 221 332
1 453 380 1 171 227 1 122 465
Total equity
and liabilities 2 755 963 2 345 925 2 507 771
Number of
shares in issue 2 102 303 652 1 914 664 803 2 089 503 652
Less: Treasury
shares 112 000 000 133 705 854 112 000 000
Net shares
issued 1 990 303 652 1 780 958 949 1 977 503 652
Net asset value
per share
(cents) 27 48 35
NOTES TO THE BALANCE SHEETS
1. Basis of accounting
These results are prepared in accordance with South African Statements of
Generally Accepted Accounting Practice and Schedule 4 of the Companies
Act, as amended, 1973. These accounting policies are consistent with
those used in the annual financial statements for the year ended 31 March
2004, except as noted below.
- During the year the Group adopted AC 140: Business Combinations, in terms
of which:
- goodwill is no longer amortised but is instead reviewed for impairment in
terms of AC 128: Impairment of Assets
- negative goodwill is immediately recognised in the income statement.
In accordance with the adoption provisions of AC 140 the balance of the
negative goodwill at the beginning of the period has been derecognised as an
adjustment to the opening accumulated losses and no adjustment has been made
to prior period figures.
Reviewed Unaudited Audited
period ended period ended year ended
30-Sep-04 30-Sep-03 31-Mar-04
R`000 R`000 R`000
2. Investments
Investments at carrying
value:
Listed investments
- associated companies 824 769 690 159 608 480
- other 55 983 65 483 85 013
Unlisted investments
- associated companies 210 020 168 697 197 668
- other 199 564 140 698 156 626
Market value of listed
investments
- associated companies 1 324 310 2 083 072 1 508 497
- other 55 983 65 483 85 013
Directors` valuation of
unlisted investments
- associated companies 252 174 169 000 229 113
- other 199 564 140 698 156 626
3. Debentures
Included in non-current
interest bearing borrowings
is an amount of 384 125 252 875 384 125
which relates to the
convertible redeemable 50%
secured debentures issued at
R1.25 each
(`the debentures`) 307 300 024 202 300 024 307 300 024
The terms of the debentures are set out in the debenture certificate attached
as Annexure 19 to the JCI circular dated 4 June 2002. Sasfin Bank Limited (`the
Trustee`) herein provides further clarification of the security provision
relating to the debentures.
The debenture trust deed required JCI to pledge as security for its obligations
in respect of the debentures, securities that are listed on the JSE Securities
Exchange South Africa (`JSE`) with an aggregate value at the time of pledge of
50% of the nominal value of the debentures. The number of listed securities to
be pledged was to be calculated with reference to the traded price of the
listed securities on the JSE at the closing of the market on the business day
immediately preceding the pledge date.
In the JCI provisional results announcement published on SENS on 14 July 2004
debenture holders were advised that JCI and the Trustee had agreed that JCI`s
obligations in terms of the debenture trust deed will be re-assessed on 15
September and 15 March of each year, based on the value of the listed securities
held in pledge as calculated with reference to its preceding 15-day weighted
average trading price on the JSE. Should the security ratio at that time be
calculated at less than 50%, additional listed securities will be pledged to
increase the security ratio to a minimum of 50%. Should the security ratio at
that time exceed 55%, the listed securities held in pledge will be reduced to a
level such that the security ratio at that time remains equal to or greater than
52,5%.
Debenture holders are advised that the value of the current listed securities
pledged, based on the closing prices on the JSE at 20 December 2004 was
R175 124 563, representing a security ratio of 45,6%. The listed
securities pledged include Randgold & Exploration Company Limited
(7 195 900 shares), Simmer and Jack Mines, Limited
(85 540 655 shares) and Western Areas Limited (3 050 000 shares).
4. Contingent liabilities
The Company and its subsidiaries are defendants in the following legal actions,
all of which are being defended:
- Durban Roodepoort Deep Limited and its associated companies have served
summons on the Company as co-defendant together with Messrs R A R Kebble,
J Stratton and H C Buitendag, claiming payment jointly and severally from
the
Company, and co-defendants of R77 800 000 and AUS$6 000 000. The trial date
has been set for 4 August 2005.
- The Company is the defendant in a case in which the plaintiff is claiming
an amount of R1 050 000 in respect of the refund and reduction of the
penalty stipulated in a land sale agreement.
- The Company is the defendant in a case relating to a ferro-nickel project
in which the plaintiff is claiming a success fee equal to 1% of the value
of the project and 2% of the equity of the project. The amounts claimed
have not been quantified in monetary terms.
- The Company is a defendant in a case in which the plaintiff is claiming
R52 000 000 from the Company in respect of a surety agreement signed by the
Company. Judgement in favour of the plaintiff was hand- ed down on 3
December 2004. It is the intention of the defendants to appeal the
judgement.
- A subsidiary company is the defendant in a case in which the plaintiffs
are claiming AUS$2 500 000 relating to the acquisition of shares by the
subsidiary.
CASH FLOW STATEMENTS (ABRIDGED)
Reviewed Unaudited Audited
period ended period ended year ended
30-Sep-04 30-Sep-03 31-Mar-04
R`000 R`000 R`000
Cash flows from operating
activities 32 389 (358 749) (363 962)
Cash flows from investing
activities (289 018) (64 866) (166 578)
cash flows from financing
activities 342 674 465 446 641 963
Net movements in cash and cash
equivalents 86 045 41 831 111 423
Cash and cash equivalents of
acquired subsidiaries - 1 488 18 709
Cash and cash equivalents at
beginning of period 127 420 (2 712) (2 712)
Cash and cash equivalents at
end of period 213 465 40 607 127 420
STATEMENTS OF CHANGES IN EQUITY
Share Share distributable
capital premium reserves
R`000 R`000 R`000
Balance on 31 March 2003 17 506 1 498 097 247 612
Change in accounting policy
AC 133 restated opening
balances 17 506 1 498 097 247 612
Issued during the year 3 389 211 647
Share issue expenses written-off (323)
Transfer from non-distributable
reserves to accumulated loss (8 764)
Net loss for the year
Dilution of holding in associated
companies
Share of recycling of and fair
value adjustments of associated
companies
Disposals
Opening balances 20 895 1 709 421 238 848
Change in accounting policy
AC 140 restated opening
balances 20 895 1 709 421 238 848
Issued during the period 128 8 271
Net loss for the period
Dilution of holding in associated
companies
Share of recycling of and fair
value adjustments
of associated companies
21 023 1 717 692 238 848
Non-
Accumulated Treasury
loss shares Total
R`000 R`000 R`000
Balance on 31 March 2003 (940 693) (54 416) 768 106
Change in accounting policy (46 657) (46 657)
AC 133 restated opening
balances (987 350) (54 416) 721 449
Issued during the year 215 036
Share issue expenses written-off (323)
Transfer from non-distributable
reserves to accumulated loss 8 764
Net loss for the year (55 283) (55 283)
Dilution of holding in associated
companies 32 128 32 128
Share of recycling of and fair
value adjustments of associated
companies (226 488) (226 488)
Disposals 15 216 15 216
Opening balances (1 228 229) (39 200) 701 735
Change in accounting policy 57 831 57 831
AC 140 restated opening
balances (1 170 398) (39 200) 759 566
Issued during the period 8 399
Net loss for the period (240 934) (240 934)
Dilution of holding in associated
companies 2 817 2 817
Share of recycling of and fair
value adjustments
of associated companies 15 446 15 446
(1 393 069) (39 200) 545 294
COMMENTARY
As indicated in the 2004 JCI annual financial statements, JCI`s interests in
various empowerment joint ventures are being sold to OrlyFunt, a BEE company.
The full details of this transaction were announced in the press on 10
December 2004. This transaction results in the establishment of a new BEE
capital base to partner JCI in similar future ventures, and importantly,
creates the mechanism for JCI to reduce its level of gearing incurred primarily
in establishing these business ventures as a consequence of the subsequent
listing of OrlyFunt.
The R90.8 million operating loss for the period compared to an operating profit
of R37.7 million for the corresponding period last financial year, stems mainly
from the fair value adjustment for various investments held by JCI, in
accordance with accounting standard AC 133 - `Financial Instruments:
Recognition and Measurement`. Finance costs increased for the period under
consideration as a consequence of the financing of the empowerment joint
ventures referred to above, and will reduce significantly once the OrlyFunt
deal is consummated.
The strength of the Rand adversely impacted on the earnings reported by
associates Randgold & Exploration and Western Areas, as reflected in the R79.9
million loss from associates as compared to the R61.9 million profit for the
same period ended 30 September 2003. As the Angolan diamond concessions owned
by Randgold & Exploration star t producing economically and production
commences in July 2005 at Randgold Resources` Loulo mine, the Randgold &
Exploration earnings in the current year will improve. With the commencement of
operations from the new South Deep Twin Shaft in November 2004, Western Areas
will star t to show the earnings potential envisaged from this investment
reversing the negative trend despite the Rand strength.
Going concern
The future cash requirements of the Group will be satisfied by a combination of
facilities raised and in the longer term by income from investments,
particularly from mining operations that are coming on stream.
Audit review
The interim results have been reviewed by the Group`s auditors, Charles Orbach
& Company. In their review report, they have included an emphasis of matter
paragraph drawing attention to the directors` statement in the commentary
relating to going concern. A copy of their report is available for inspection
at the Company`s registered office.
For and on behalf of the board
R A R Kebble R B Kebble
Non-Executive Chair man Chief Executive Officer
Johannesburg
23 December 2004
Registered office: Investor relations:
28 Harrison Street, Johannesburg, 2001 George Poole
(PO Box 11165, Johannesburg, 2000) 28 Harrison Street, Johannesburg, 2001
(PO Box 11165, Johannesburg, 2000)
Tel: +27 11 688 5100
Fax: +27 11 836 3757
London secretaries:
JCI (London) Limited
6 St James`s Place, London, SW1A 1NP
Tel + 020 7491 1889
Fax + 020 7491 1989
Transfer secretaries:
Computershare Investor Ser vices 2004 (Pty) Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2017)
Sponsor
SASFIN
CORPORATE FINANCE
A Division of Sasfin Bank Limited
Corporate Advisor to JCI
NEWFOUND
Date: 23/12/2004 05:30:17 PM
Produced by the JSE SENS Department
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