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Spectrum - Interim results for the six months ended 30 June 2005 and renewal of
cautionary announcement
Spectrum Shipping Ltd
Registration no: 1998/018118/06
Share Code: SUM
ISIN NO: ZAE000037446
Interim results for the six months ended 30 June 2005 and renewal of cautionary
announcement
INCOME STATEMENT
Reviewed Unaudited Audited
6 months 6 months Year ended
ended ended 31 December
30 June 2005 30 June 2004 2004
R`000 R`000 R`000
Turnover 14 778 12 618 29 149
Gross billings 225 803 208 282 495 701
Cost of billings (211 025) (195 664) (466 552)
Operating income 2 606 406 5 147
Amortisation of
intangible assets - (133) (266)
Depreciation (464) (282) (709)
Net interest paid (1 282) (926) (3 273)
Profit before taxation 860 (935) 899
Taxation (258) 280 (269)
Net profit after
taxation 602 (655) 630
Shares in issue (000`s) 850 000 850 000 850 000
Earnings per share
(cents) 0.1 (0.1) 0.1
Headline earnings per
share (cents) 0.1 (0.1) 0.1
Reconciliation between
earnings
and headline earnings
Profit after taxation 602 (655) 630
Profit on sale of fixed
assets - - (31)
Impairment losses - - 18
Taxation effects - - 4
Headline profit after
taxation 602 (655) 621
CASH FLOW STATEMENT
Reviewed Unaudited Audited
6 months 6 months Year ended
ended ended 31 December
30 June 2005 30 June 2004 2004
R`000 R`000 R`000
Cash generated by
operations
before working capital
changes 2 606 407 5 108
Changes in working
capital 5 711 475 (3 520)
Cash generated from
operating activities 8 317 882 1 588
Net interest paid (1 282) (926) (3 273)
Cash flows from
operating activities 7 035 (44) (1 685)
Cash flows from
investing activities (299) (423) (1 217)
Cash flows from
financing activities (15) (28) (28)
Net increase/(decrease)
in cash
and cash equivalents 6 721 (495) (2 930)
Cash and cash
equivalents
at the beginning of the
period (38 772) (35 843) (35 842)
Cash and cash
equivalents
at the end of the period (32 051) (36 338) (38 772)
BALANCE SHEET
Reviewed Unaudited Audited
6 months 6 months Year ended
ended ended 31 December
30 June 2005 30 June 2004 2004
R`000 R`000 R`000
ASSETS
Non-current assets 5 343 6 068 5 765
Property, plant and
equipment 1 868 1 656 2 034
Intangible assets 265 398 265
Investments 3 - 1
Deferred taxation 3 207 4 014 3 465
Current assets 97 036 86 128 107 093
Trade and other
receivables 86 187 86 125 94 620
Cash and cash
equivalents 10 849 3 12 473
Total assets 102 379 92 196 112 858
EQUITY AND LIABILITIES
Capital and reserves 30 362 28 475 29 760
Share capital and
premium 107 795 107 795 107 795
Accumulated loss (77 433) (79 320) (78 035)
Non-current liabilities
Interest bearing
borrowing - 37 -
Current liabilities 72 017 63 684 83 098
Trade and other payables 26 300 24 515 28 970
Current portion of
borrowing 10 - 25
Bank overdraft 42 900 36 341 51 245
Provisions 2 807 2 828 2 858
Total equity and
liabilities 102 379 92 196 112 858
STATEMENT OF CHANGES IN EQUITY
Share Share Accumulated
capital premium loss Total
R`000 R`000 R`000 R`000
Balance at 1 January 2005 850 106 945 (78 035) 29 760
Net profit for the period - - 602 602
Balance at 30 June 2005 850 106 945 (77 433) 30 362
COMMENTARY
OPERATIONAL REVIEW
The six month period ended 30 June 2005 has been a positive one for the
company. Strategic initiatives introduced over the past year have enabled the
business not only to hedge itself against the prevailing strong rand, but also
to generate revenue far more representative of a supply chain logistics
service provider. Essentially, it was activities resulting from the strategic
initiatives referred to above - such as forwarding, road freight and foreign
exchange - that have shown significant growth, rather than the traditional
customs clearing activities.
Furthermore, the intellectual capital within the company has provided the
business with an ability to offer `solutions` rather than `products`. This
has resulted in improved earnings, whilst at the same time ensuring that the
improved rate at which new accounts are being acquired, as reported in the
2004 Annual Report, is being maintained.
FINANCIAL REVIEW
As a result of new client gains, gross billings for the period were 8% up on
the prior year, despite the rand being on average 5% stronger over the six
month period under review.
Operating income has improved significantly due to both revenue increases and
operating cost decreases. Revenue increases are attributable to increased
forwarding category revenue, as well as revenue generated from new clients.
Fixed cost decreases have occurred mainly in the payroll, where certain
selective retrenchments took place in the second half of 2004, together with a
tightening up of procedures resulting in a decrease in interest reversals to
clients.
Better management of debtors since the December 2004 year end has resulted in
a positive cash inflow for the period of R6.7 million, but also in higher net
interest paid for the same period as a result of a reduction in interest
received on arrear debtor balances.
OUTLOOK FOR THE NEXT SIX MONTHS
With the continued successful implementation of the company`s strategic
initiatives, the earnings of the company should continue to show a marked
improvement over the prior year. Furthermore, now that the business is well
established and accustomed to a strong rand environment, acquisitions and
`intelligent deal making` will be the focus of the company in the months
ahead.
The interim results have been reviewed by our auditors, Marwick and Company
Inc, and a copy of their unmodified review report is available for inspection
at the company`s registered office.
ACCOUNTING POLICIES
The condensed interim financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS). The annual financial
statements published for the year ended
31 December 2004 were prepared in accordance with South African Statements of
Generally Accepted Accounting Policies, which differ in some areas from IFRS.
Therefore in preparing these interim financial statements certain
reclassifications were applied to comply with IFRS. The comparative figures in
respect of 2004 have been restated to reflect these adjustments.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement dated
27 May 2005 and the statement that negotiations are in advanced stages to
complete a significant transaction. If successfully concluded, this may have a
material effect on the price of Spectrum Shipping Limited`s securities on the
JSE Limited and shareholders are accordingly advised to continue exercising
caution when dealing with the company`s securities until a further
announcement is made.
DIRECTORS
Mr JP Nel, a non-executive director, resigned on 21 April 2005, and Mr S
Donner was appointed as a non-executive director.
DIVIDENDS
In line with the company`s policy, no interim dividend has been declared.
For and on behalf of the board
SMD Zungu GH Gerber
Chairman Chief Executive Officer
4 August 2005
REGISTERED OFFICE AND POSTAL ADDRESS
5th Floor, MSC House, 54 Winder Street, PO Box 6148, Durban, 4000
TRANSFER SECRETARIES
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Marshalltown, 2107
AUDITORS
Marwick and Company Inc.
EXECUTIVE DIRECTORS
GH Gerber (CEO), DC Kelly (CFO), R Singh
NON-EXECUTIVE DIRECTORS
SDM Zungu (Chairman), S Donner, FE Lediga, M Tembe, T Tomaszewski
COMPANY SECRETARY
JA Lupton, ACIS
Sponsors
River Group
www.spectrum-shipping.co.za
Date: 05/08/2005 08:05:33 AM
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