| Wed 5 Jan 2005, 8:37 | | RESULTS AND CAUTIONARY |
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GILBOA PROPERTIES LIMITED - AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2004,
SETTLEMENT WITH THE INDUSTRIAL DEVELOPMENT CORPORATION OF SOUTH AFRICA (`IDC`)
AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
GILBOA PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
Share code: GLB ISIN No: ZAE000010286
(`Gilboa` or `the company`)
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2004, SETTLEMENT WITH THE INDUSTRIAL
DEVELOPMENT CORPORATION OF SOUTH AFRICA (`IDC`) AND RENEWAL OF CAUTIONARY
ANNOUNCEMENT
GROUP BALANCE SHEETS
Audited Reviewed Audited
30 Jun 31 Dec 30 Jun
ASSETS 2004 2003 2003
R`000 R`000 R`000
Non-current assets 12 885 12 739 6 363
Investment property, 7 040 5 941 6 363
equipment and vehicle
Goodwill 5 845 6 487 --
Deferred taxation -- 6 --
Unsecured loans -- 305 --
Current assets 11 238 6 279 580
Cash and cash equivalents 27 431 7
Inventories 9 187 4 818 --
Short term receivables 49 -- 571
Trade and other receivables 1 975 1 030 2
Total assets 24 123 19 018 6 943
EQUITY AND LIABILITIES
Capital and reserves 1 379 3 536 (7 429)
Non-current liabilities 3 955 4 763 6 221
Interest bearing long-term 3 954 3 794 6 221
liabilities
Interest free long term- -- 969 --
liabilities
Deferred taxation 1 -- --
Current liabilities 18 789 10 719 8 151
Short-term loans 1 781 653 280
Bank overdraft 3 706 1 327 --
Accounts and other payables 8 303 3 535 3 006
Provisions 4 353 4 353 4 353
Taxation payable 646 851 512
Total equity and liabilities 24 123 19 018 6 943
Number of shares in issue 628 597 301 191 301 191
(`000)
Net asset value per share 0.22 1.17 (2.5)
(cents)
Tangible net asset value per (0.71) (0.98) (2.5)
share (cents)
Fully diluted shares in 628 597 628 597 354 523
issue (`000)
Diluted net asset value per 0.22 0.56 (2.1)
share (cents)
Diluted tangible net asset (0.71) (0.47) (2.1)
value per share (cents)
GROUP INCOME STATEMENTS
Audited Reviewed Audited
Year Six Year
ended months ended
30 Jun ended 30 Jun
2004 31 Dec 2003
R`000 2003 R`000
R`000
Revenue 22 340 10 561 2 358
Operating expenses (24 (10 746) (3 829)
831)
Net operating loss (2 491) (185) (1 471)
Profit on disposal of 2 120 2 173 --
subsidiaries
Loss on disposal of assets --* (109) --
Amortisation of goodwill --* (282) --
Provision for guarantee -- -- (4 353)
Impairment loss -- -- (303)
Mining rights written off -- -- (7 485)
(Loss)/profit before finance (371) 1 597 (13
charges 612)
Finance charges (844) (342) (1 315)
(Loss)/profit before taxation (1 215) 1 255 (14
927)
Taxation 23 (290) (205)
Net (loss)/profit for the (1 192) 965 (15
period 132)
* Included in operating
expenses
Reconciliation between loss
and headline loss
Net (loss)/profit for the (1 192) 965 (15
period 132)
Profit on disposal of (2 120) (2 173) --
business/subsidiary
Loss on disposal of assets 90 109 --
Amortisation of goodwill -- 282 --
Mining rights written off -- -- 7 485
Guarantee called up -- -- 4 353
Decrease in the value of -- -- 630
investment property
Headline loss (3 222) (817) (2 664)
Weighted average shares in 584 132 301 191 298 423
issue (`000)
(Loss)/earnings per share for (0.20) 0.32 (5.07)
period (cents)
Headline loss per share for (0.55) (0.27) (0.89)
period (cents)
Fully diluted weighted average 628 597 628 597 351 755
shares in issue (`000)
Diluted (loss)/earnings per (0.19) 0.15 (4.28)
share for period (cents)
Diluted headline loss per (0.51) (0.13) (0.73)
share for period (cents)
ABRIDGED CASH FLOW STATEMENTS
Review Review Audite
ed ed d
30 Jun 31 Dec 30 Jun
2004 2003 2003
R`000 R`000 R`000
Cash outflows from operating (4 (4 (1 924
activities 449) 038) )
Cash inflows from investing 4 894 5 790 --
activities
Cash flows from financing (3 (2 1 908
activities 483) 008)
Net decrease in cash and cash (3 (256) (16)
equivalents 038)
Cash and cash equivalents - 8 8 23
beginning of period
Cash and cash equivalents (648) (648) --
acquired in subsidiary
Cash and cash equivalents at (3 (896) 7
end of period 678)
STATEMENT OF CHANGES IN EQUITY
Share capital Share Shares to Accumulated Total
R`000 premium be issued losses
R`000 R`000 R`000 R`000
Balance 30 June 2002 2 846 56 024 -- (57 680) 1 190
Net loss for the -- -- -- (15 131) (15 131)
year
Issue of share 166 1 013 -- -- 1 179
capital
Capitalisation of
loans through the
issue of 53 331 990 -- -- 5 333 -- 5 333
new shares after
year end at 10 cents
per share
Balance 30 June 2003 3 012 57 037 5 333 (72 811) (7 429)
Net profit for the -- -- -- (1 192) (1 192)
year
Shares issued for
capitalisation of 533 4 800 (5 333) -- --
loans
Shares issued for 2 741 7 259 -- -- 10 000
acquisitions
Balance 30 June 2004 6 286 69 096 -- (74 003) 1 379
COMMENTARY
The directors are pleased to present the audited results for the year ended 30
June 2004. The accounting policies adopted for purposes of this report comply,
and have been consistently applied in all material respects, with South African
Statements of GAAP. The results were audited by KPMG Inc. and reported on
without qualification. Their report is available for inspection at the
registered office of the company.
RESULTS
The results presented for the year under review show a much improved situation
from the prior year following the acquisition of Absolute Tiles (Pty) Ltd
(`Absolute Tiles`), which company`s results are incorporated with effect from
August 2003. The substantial increase in revenue is primarily as a result of
revenue derived from the wholesale and retail of tiles, both locally and
internationally. Absolute Tiles imports and sells tiles to contractors and the
general public from three retail outlets. These outlets are situated in the
east of Pretoria, Fourways in Johannesburg with the third outlet opened in Cape
Town in April 2004. The majority of the costs of the launch of the Cape Town
branch have been expensed and the branch moved through its break-even position
in June 2004, whereafter it has also become profitable.
Various options have been continually considered for the development or disposal
of Stand 315 Waterkloof Ridge (Proprietary) Limited (`Stand 315`), which is
incurring holding costs at present. Subsequent to year end, the directors have
agreed, in principle, to dispose of Stand 315 as detailed under subsequent
events below. In addition, significant costs have been incurred in the holding
company over the past year in relation to corporate action and efforts to get
the company back to a solvent and viable position. These costs are not expected
to be as high going forward.
Sale of Gilboa House
At the general shareholders meeting held on 13 November 2003, Gilboa
shareholders unanimously approved the sale of Gilboa House to BOE Bank as
settlement of all Gilboa`s debts to the bank.
Acquisition of Stand 315
Gilboa acquired 100% of the shares and loans in Stand 315 for R3 674 000 from
one of the Gilboa directors, Ms EJF de Beer, with effect from 30 June 2003.
This transaction was fully described in a circular to shareholders dated
28 October 2003 and unanimously approved by shareholders at the general meeting
held on 13 November 2003. The purchase consideration has been settled by a cash
payment of R200 000, a loan owing of R1 474 000 payable from proceeds of the
development of Stand 315 and the issue and allotment of 74 074 074 Gilboa
shares.
Acquisition of Absolute Tiles (Pty) Ltd (`Absolute Tiles`)
On the 04 August 2003 Gilboa acquired 100% of the shares and loan accounts of
Absolute Tiles from Mr. J Serfontein, a Gilboa non-executive director and four
other parties. This transaction was also fully described in a circular to
shareholders dated 28 October 2003 and unanimously approved by shareholders at
the general meeting held on 13 November 2003. The purchase consideration was
settled by the issue of 200 000 000 Gilboa shares at 4 cents a share.
The Absolute Coleccion (Proprietary) Limited (`Absolute Coleccion`)
Absolute Tiles has a 49% shareholding in Absolute Coleccion. The controlling
share of 51% is held by the BEE Company, Calulo Investments (Proprietary)
Limited (`Calulo`). The 51% share was sold to Calulo at par value in return for
a commitment from Calulo to provide funding for certain prospecting and mining
operations for slate, dimensional stone and/or quartzite mining opportunities.
Shareholders are also referred to subsequent events below.
Sale of Prime Address (Proprietary) Limited and Hillcrest Village (Proprietary)
Limited
Gilboa sold its subsidiaries Prime Address and Hillcrest Village to Future
Minerals Investments (Proprietary) Limited. Both these companies` liabilities
exceed its assets and all risks relating to such liabilities were taken over by
the purchaser on 14 November 2003. This resulted in the profit on disposal of
subsidiaries.
General
The balance sheet of the group at 30 June 2004 indicates that the current
liabilities exceed the current assets by an amount of R7 551 945. Of this
amount R4 353 355 relates to a guarantee provided to the IDC in relation to a
former subsidiary, which matter has been settled subsequent to year end as
detailed below.
FUTURE PROSPECTS AND SUBSEQUENT EVENTS
With the acquisition of Absolute Tiles now fully integrated, the group is also
experiencing growth and generating profits on a monthly basis. Additional
developments are detailed below.
Acquisition of remaining 51% of Absolute Coleccion
Calulo have sold their 51% stake in Absolute Coleccion for a purchase
consideration of R12 000 000 to be settled by the issue of 100 000 000 shares in
Gilboa at 12 cents per share. This transaction is subject to shareholder
approval and a separate circular has been sent to shareholders for approval at a
general meeting of shareholders to be held on 20 January 2005.
Absolute Coleccion has, in association with Calulo, secured a cession of mineral
rights to a diamond quartzite mine at Lekkersing, on which a Competent Persons
Report has been prepared and details of which are included in the circular to
shareholders.
In addition, Absolute Coleccion is awaiting approval of mining licences at two
slate quarries, has secured an option on a marble deposit and has secured an
interest in picture stone. All quarried stone will be beneficiated at the mines
and will be distributed through Absolute Tiles as well as sold into export
markets.
Change of name and intended application to the Alternative Exchange (`AltX`)
The company intends changing its name to Absolute Holdings Limited, details of
which are included in the circular to shareholders mentioned above. The company
is also considering applying for the transfer of the company`s listing to AltX
within the next year.
Settlement of IDC suretyship
Subsequent to year end, the directors and major shareholders have reached
settlement with the IDC regarding the judgment relating to a guarantee provided
in relation to a former subsidiary, whereby major shareholders will purchase the
IDC claim against the former subsidiary from the IDC through the transfer of
existing shares in Gilboa and Gilboa will make payment of R500 000 in settlement
of its suretyship. This will have a positive impact on the income statement and
balance sheet of Gilboa for the year ending 30 June 2005. The directors will be
issuing shares for cash in order to, inter alia, meet the cash flow requirement
for the IDC. Despite this settlement with the IDC, a decision has been made by
the directors of Gilboa to institute criminal proceedings against the former
subsidiary`s directors.
Disposal of Stand 315
The directors have reached an agreement with related parties, namely Mr ER de la
Pierre a former director of Gilboa and Mr J Serfontein, an existing director of
Gilboa, for the disposal of Stand 315 at its acquisition price as the company
has decided to focus on mining and the wholesaling and retailing of tiles in the
future. In addition, the board no longer has property development expertise on
it board following the resignation of Ms EJF de Beer due to health problems. A
formal agreement is in the process of being drafted and a formal announcement
will be made in due course.
ANNUAL GENERAL MEETING
The annual general meeting of Gilboa will be held at Arcay House II, Number 3
Anerley Road, Parktown, Johannesburg at 15h00 on 13 January 2005. Shareholders
are advised that the special resolution regarding authority for the general
repurchase of securities has been withdrawn in its entirety.
DIVIDENDS PAID AND RECOMMENDED
No dividends were paid or declared during the accounting period under review and
none are recommended at this stage (2003: nil).
SHARE CAPITAL
During the year shares for the capitalisation of shareholder and director loan
accounts amounting to R5 333 199 through the issue of 53 331 990 shares at 10
cents each, as approved at the annual general meeting held on 29 May 2003, were
issued, as well as the shares for the acquisitions of Absolute Tiles and Stand
315 as detailed above, which acquisitions were approved at a general meeting of
shareholders on 13 November 2003.
DIRECTORS AND COMPANY SECRETARY
Mr AM Janse van Vuuren was appointed to the Board on 20 August 2003 as Chief
Executive Officer. He replaced Mr ER de la Pierre who later resigned from the
Board on 13 November 2003. Ms R Storbeck was appointed as an interim financial
director from 05 February 2004 to 12 May 2004 and Mr G Sequeira, the financial
director of Calulo, was appointed as financial director on 14 May 2004. Ms EJF
de Beer resigned from the Board with effect from 01 October 2004.
Arcay Client Support (Pty) Ltd was appointed as company secretary with effect
from 13 November 2003.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Further to the cautionary announcement dated 15 October 2004, shareholders are
advised that the negotiations referred to therein are still in progress. If
successfully concluded, these negotiations may have a material effect on the
price at which the company`s securities trade on the JSE Securities Exchange
South Africa and shareholders should accordingly continue to exercise caution
when dealing in the company`s securities until a further announcement is made in
this regard.
By order of the board
AM Janse van Vuuren
31 December 2004
Company Secretary and Registered Office
Arcay Client Support (Pty) Ltd (Registration number
1998/025284/07)
Arcay House, Number 3 Anerley Road, Parktown,
Johannesburg (PO Box 62397, Marshalltown, 2107)
Directors
AM Sher* Chairman, AM Janse van Vuuren Chief Executive
Officer, JJ Serfontein*, GP Sequeira
(* Non-executive)
Sponsor Transfer Office
Arcay Corporate Computershare Investor Services 2004
Services (Pty) Ltd
