| Thu 28 Apr 2005, 15:23 | | Results And Dividend Declaration |
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Mcubed Holdings limited - Audited Group Results And Dividend Declaration For The
Year Ended 28 February 2005
Mcubed Holdings limited
Share code: MCU
Isin: ZAE000033353
Solid numbers and cash to shareholders
m Cubed reports stable earnings in line with market and analysts expectations
while the merger and launching of a joint venture of its asset management
business unlocked value for shareholders.
Milestones:
R100m returned to shareholders in 13.33c per share capital reduction
Sale of m Cubed and Momentum`s domestic multi manager businesses to form new 50%
held entity
Financial highlights:
Earnings per share of 10.4 cents (2004: 2.4 cents)
Headline earnings increased marginally to R40.3m (2004: R40.2m)
Net finance income grew by 37%, due to increased cash reserves even post capital
reduction
Operating expenditure fell 7% as a result of cost containment efforts
Core businesses perform
With the sale of m Cubed Asset Management, the R72m in cash demonstrated to the
market the value in this mature investment, while the new joint venture offered
the opportunity to shareholders to share the fruits of the combined multi
manager`s potential going forward.
`Not only did we unlock value, but we also created a new business that we have a
50% stake in, with income opportunities going forward.`
`The board decided that return on equity improvement was a key consideration,
and hence the decision to pay a dividend of 13.3c per share. It doesn`t stop
there. The board will continue reviewing the capital requirements of the
business and adjust where and when it is necessary,` explains John Storey, group
MD at m Cubed Holdings. `A share buy-back has been approved at current price
levels`.
`Despite major corporate activity, the group has again delivered satisfactory
results. Our performance for the year ending 28 February 2005 is in line with
last year`s performance, in spite of the fact that there was a substantially
reduced base from last year with a major investment maturing, provisioning
against a potential liability, little foreign investment allowance and difficult
conditions for our traded policy business,` says Storey.
The part sale of the institutional asset management businesses has provided m
Cubed with the opportunity to further develop the core wealth, group benefits
and specialised investment businesses where it has developed a strong reputation
for innovation and service levels among the larger private clients, medium size
corporates and pension fund trustees.
`We are streamlining our operations and exiting our non-core businesses,` says
Storey. `This is evidenced by the recent announcement that we have sold our
spare life licence. The new structure should better position m Cubed to pursue
its core wealth management business and enhance returns on equity going forward.
Storey says that the Wealth business has shown good growth, particularly in the
employee benefits and the life investment products area, which showed pleasing
inflows. `Annuity revenue has grown strongly across our remaining core wealth
and group benefit businesses.`
Turning back to the issues that affected the business Storey explains: that
these included the fact that very little international investments could be sold
as foreign investment allowance was not available to the group. Added to which
the rand strength hurt our offshore business.`
In the absence of tradable stock in pre-owned endowment policies, their policy
trading business made a small loss (2004: R4m profit), and according to Storey
the results also exclude a large transaction in their Specialised Investments
division which matured in February 2004.
`Should investment conditions hold, prospects for the next financial reporting
period are favourable,` says Storey. The company has entered a new era and
repositioned itself in two distinct and clearly focused areas: `The growth in
our group benefit and life investment offerings will make a substantial
contribution to our results next year, while exiting from non-core businesses
will continue to unlock value for all stakeholders.` T
The Advantage asset managers business should have a good year. Synergies include
joint negotiating power, large cost reductions, and better distribution
capacity.`
Ends/
Released by Channel Communications.
Contact m Cubed Holding group CEO John Storey on 083-675-2664 for further
information.
Notes:
m Cubed Holdings Limited is a focused investment services business. It provides
a flexible range of best of breed group benefits to employees through their
employers complemented by risk-adjusted investment solutions supplied through
its Wealth Management business.
The Wealth business provides a range of innovative investment, retirement and
employee benefit products, and also offers other fund managers` `best of breed`
products on our platform. The businesses have shown good growth, particularly in
the employee benefits and the life investment products area, which are already
showing pleasing inflows.
Its Specialised Investments business provides customised financial solutions and
innovative lending and treasury services.
