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New Africa Investments Limited - Results for the year ended 31 December 2004
New Africa Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1993/002467/06)
(Share codes: NAI and NAN)
(ISIN: ZAE000033338 and ZAE000033346)
(`Nail` or `the Group`)
Results for the year ended 31 December 2004
R1 538 million returned to shareholders
Disposal process nears completion
Commentary
DIRECTORS` STATEMENT
Your directors take pleasure in presenting the reviewed provisional results
of the Group for the year ended 31 December 2004.
BASIS OF PREPARATION
The condensed consolidated financial statements are prepared in accordance
with South African Statements of Generally Accepted Accounting Practice, the
South African Companies Act, as amended, and the disclosure requirements
of the JSE Securities Exchange South Africa.
The condensed consolidated financial statements are prepared on a going
concern basis, using historical cost basis of accounting except for available
for sale investments, which are stated at fair value. The principal
accounting policies are consistent with those applied in the annual financial
statements for the year ended 31 December 2003.
CORPORATE GOVERNANCE
The Group adheres to locally accepted corporate governance practices, as
embraced by the King II Report, where practical.
DIRECTORSHIP CHANGES
The following changes were effected during the year:
With the disposal process well advanced, Mr Macozoma in consultation with the
board resigned as Chief Executive Officer on 31 May 2004, but remains a non-
executive director of NAIL. The board is grateful to Mr Macozoma for his role
and leadership as Chief Executive Officer.
Mr F Titi was appointed to the board on 3 March 2004.
Mdms L Mojela and G Serobe and Messrs T Curtis, M Katz, J Mdlalose,
M Ngoashengand G Williams resigned from the board on 29 September 2004. The
company takes the opportunity to thank all departing board members for their
invaluable contribution.
The board consists of Messrs A Mabogoane (Chairma n), S Macozoma, F Titi, G
Chadwick, G Snelgar, K Setzin and R Kevan.
CONTINGENT LIABILITIES
Nail is a partner together with Metropolitan Life Limited and Nedbank Limited
for the management, collection and funding of the African Bank Debtors Book
which was excluded from the sale of the African Bank to African Bank
Investment Limited.
Nail`s contingent liability in respect of additional funding required in the
event that the total debtors book was uncollectable, at 31 December 2004
amounts to R61,9 million (2003: R71,9 million).
ASSET DISPOSAL PROCESS
The disposal process of NAIL assets started after the Competition Commission
approved the Tiso Consortium`s acquisition of NAIL during February 2004.
The following assets, which represent all of Nail`s interests, were disposed
of:
7 756 917 MTN shares realising R232,4 million
2 451 052 Johnnic shares realising R39 million
50,1% of Urban Brew Studios realising R21,5 million
31,7% of Radmark realising R14,3 million
93,3% of New Africa Books realising R9 million
90,5% of New Africa Publications realising R70 million
42,5% of Jacaranda FM realising R141 million
100% of Nail Outdoor realising R10,1 million
100% of New Africa Media realising R197,5 million
The following assets, which represent a portion of NAIL`s interests were
disposed of:
Kaya FM funding structures over 22% of Kaya FM realising
R16,5 million, leaving funding structures over 24,9% of Kaya FM
RETURN OF CASH TO SHAREHOLDERS
The following distributions to shareholders were made during the year under
review:
Nature Per share Total
R R000
Capital reduction 6.86 869 575
Metropolitan shares 2.16 273 353
Dividend 1.12 141 972
Dividend 2.00 253 521
Total 12.14 1 538 421
PRIMEDIA LIMITED (`PRIMEDIA`) OFFER
NAIL announced on 17 December 2004 that it had received a firm intention to
make an offer from Primedia to acquire all the issued ordinary and `N`
ordinary shares (`NAIL share`) in NAIL as one indivisible transaction.
Shareholders are referred to the announcement for the full terms of that
offer.
The salient terms of the offer are:
The offer price is R0,356 per NAIL share in cash. NAIL will have no
assets except 24,9% of Kaya
FM (Pty) Ltd, the various loans to P4 Radio Cape Town (Pty) Ltd and P4 Radio
Durban (Pty) Ltd (`P4 Loans`) and various claims and preference shares in
Motsami (Pty) Ltd and Makana SPV (Pty) Ltd (`the SPV interest`) which hold
24,9% of Kaya FM.
The offer price is reduced by R0,146 per NAIL share if the SPV
interests have been sold or recovered and R0,059 per NAIL share if
the P4 Loans have been sold or repaid.
Interest in the event NAIL has not disposed the SPV interest and P4
loans will amount to 0,228 cents per month from 1 April 2005.
Conditions precedent
NAIL`s disposal of Hertz.
Regulatory approvals, to the extent required, including but not
limited to the JSE Securities Exchange South Africa, the Securities
Regulation Panel and the Competition Authority
.
REVIEW OF RESULTS
The results reflect the disposal process that is being undertaken. The
operating results for businesses sold during the year are reflected for the
period until their disposals.
The Group is in a disposal process so all the assets are classified as
discontinuing operations. The performances are not comparable with previous
years where assets ha ve been sold during the year.
RADIO
The results include Kaya FM for the full year. Radmark,
Jacaranda 94.2
FM and Kfm 94.5 were sold during the year.
PUBLISHING
New Africa Publications and New Africa Books were sold during the
year.
FILM AND TV
Urban Brew was sold during the year.
New Africa Media Films has ceased production of films.
OUTDOOR
Nail Outdoor was sold during the year.
HERTZ
The reduced losses are as a result of the reduced costs of the fleet
resulting from lower interest rates and lower inflation on new
vehicles.
HEAD OFFICE AND INTEREST
Finance income has decreased from the impact of lower interest rates
and the return of cash to shareholders.
POST- BALANCE SHEET EVENTS
Negotiations are in progress to dispose Hertz and exit the contingent
liability that exists for the African Bank
Debtors book.
REVIEW OPINION
PricewaterhouseCoopers Inc and SizweNtsaluba vsp`s review report on the
condensed consolidated financial statements contained in this provisional
report is available for inspection at the company`s registered office.
A S MABOGOANE K SETZIN
Non- executive Chairman Executive Director
30 March 2005
Consolidated income statement
Reviewed Audited
year ended year ended
31- Dec- 04 31- Dec- 03
R000 R000
Revenues 357 082 617 903
Operating profit before the following items: 12 791 30 967
Amortisation and depreciation (21 996) (47 263)
Net profit on sale of subsidiaries
and investments 209 620
Fair value gains 8 213 168 843
Net write up/(down) of investments
and loans 7 500 (11 525)
Impairments of goodwill (28 658) (57 600)
Provision against Hertz and
Wild Coast Film assets (58 641)
Operating profit 128 829 83 422
Finance income 32 240 67 732
Income from associates 8 468 20 728
Profit before taxation 169 537 171 882
Taxatio n 67 458 74 650
Profit after taxation 102 079 97 232
Minority interest 2 287 9 511
Profit attributable to ordinary shareholders 104 366 106 743
HEADLINE EARNINGS
Profit attributable to ordinary shareholders 104 366 106 743
Profit on sale of subsidiaries and associates (162 342)
Provision against Hertz and
Wild Coast Film assets 58 641
Amortisation of goodwill 6 794 13 961
Impairment of goodwill 28 658 57 600
Restructuring costs 8 478
Loss/(Profit) on sale of fixed assets 239 (366)
Minority port ion and tax effect 20 111
Total 36 376 186 527
Headline earnings per share (cents) 28,7 151,9
Earnings per share (cents) 82,3 86,9
Number of shares taken into account in
calculating EPS (000) 126 760 122 808
Segmental analysis of headline earnings
Reviewed Audited
year ended year ended
31- Dec- 04 31- Dec- 03
R000 R000
Media
Publishing 3 399 2 182
Radio 17 880 26 276
Film and Tv 709 3 736
Outdoor (1 103) (4 646)
Total Media 20 885 27 548
Other
Financial services 13 997
Hertz (831) (9 777)
African Bank Debtors Book (15 259)
Head Office 16 322 170 018
Total Group 36 376 186 527
Net profit on sale of subsidiaries and
investments
New Africa Media 45 795
New Africa Publications 4 638
Philo Films 989
Jacaranda 125 174
Radmark 10 720
Kaya SPV`s 6 391
Metropolitan 22 950
Johnnic/Mtn 17 937
Nail Outdoor (18 764)
New Africa Books (5 041)
Urban Brew (1 169)
209 620
Consolidated balance sheet
Reviewed Audited
31- Dec- 04 31- Dec- 03
R000 R000
Assets
Property, plant and
equipment 6 783 87 419
Intangible assets 162 044
Investments 30 608 633 653
Other non- current assets 20 567
Current assets 59 501 178 507
Cash at bank and on deposit 132 895 707 218
TOTAL ASSETS 229 787 1 789 408
Total equity and liabilities
Share capital and premium 4 814 874 389
Reserves 186 896 753 320
Minority interest (3 908) 40 662
Non- current liabilities 9 172 28 206
Current liabilities 32 493 92 401
Bank overdraft 320 430
TOTAL EQUITY AND LIABILITIES 229 787 1 789 408
Net asset value per share
(cents) 151 1 284
Number of shares in issue
at end of year (000) 126 760 126 760
Consolidated cash flow
Cash (utilized in)/retained
from operating
activities (410 981) 36 787
Cash effects of investing
activities 706 594 (4 109)
Cash effects of financing
activities (871 960) 31 848
Foreign currency translation 2 134 2 335
(Decrease)/Increase in cash
and cash
equivalents (574 213) 66 861
Cash and cash equivalents
at beginning of year 706 788 639 927
Cash and cash equivalents
at end of year 132 575 706 788
Fair value gains
Provision for write up
Johnnic/MTN 141 576
Provision for write up
Metropolitan 27 267
Provision for write up Kaya
FM SPVs 8 213
8 213 168 843
Net write up/(down) of investments and loans
Provision for write
up/(down) of P4 Loans 7 500 (6 967)
Provision for write down
African Bank
Debtors Book (4 558)
7 500 (11 525)
Statement of changes in equity
Share capital
and premium Reserves Total
R000 R000 R000
Balance 31 December 2002 841 049 644 242 1 485 291
Net income for year 106 743 106 743
Foreign currency translation
reserve 2 335 2 335
Shares issued 33 340 33 340
Balance at 31 December 2003 874 389 753 320 1 627 709
Net income for year 104 366 104 366
Foreign currency translation
reserve (1 259) (1 259)
Land and building revaluation
reserve (685) (685)
Dividend: Metropolitan
distribution (273 353) (273 353)
Dividend: R1.12 per share (141 972) (141 972)
Dividend: R2,00 per share (253 521) (253 521)
Capital reduction (869 575) (869 575)
Balance at 31 December 2004 4 814 186 896 191 710
Directors: A S Mabogoane (Non-executive Chairman), S Macozoma, G Snelgar,
R Kevan, K Setzin, G Chadwick, F Titi
Company Secretary: R Kevan
(Incorporated in the Republic of South Africa)
(Registration number 1993/002467/06) (Share codes: NAI and NAN)
(ISIN: ZAE000033338 and ZAE000033346) (`Nail` or `the Group`)
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