| Wed 28 Sep 2005, 9:28 | | ICC - UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS |
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ICC - UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2005
INDUSTRIAL CREDIT COMPANY AFRICA HOLDINGS LIMITED
(`ICC` or `the Company`)
(Incorporated in the Republic of South Africa)
(Registration Number: 1997/010950/06)
Share Code: ICC
ISIN Code: ZAE000053203
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2005
CONSOLIDATED GROUP Unaudited Unaudited Audited
INCOME STATEMENT for the 6 restated for Restated for
months ended the 6 months the year
30 June 2005 ended ended
R`000 30 June 2004 31 Dec 2004
R`000 R`000
Revenue 14 992 13 325 30 114
Staff costs (1 841) (1 922) (3 865)
Depreciation and amortisation (457) (371) (962)
of goodwill
Other operating expenses (4 636) (3 741) (12 652)
- Impairment of loans (666) (775) (1 747)
extended to discontinued
operations
- Impairment of loan extended
to Lengana Technologies - - (20)
(Proprietary) Limited
- Normal operating (3,970) (2 966) (10 885)
expenditure
Total operating expenses (6 934) (6 034) (17 479)
Profit before finance costs 8 058 7 291 12 635
Finance Costs (5 882) (5 216) (11 144)
Profit before taxation 2 176 2 075 1 491
Taxation (2 126) (867) (2 058)
Net profit/(loss) for the 50 1 208 (567)
period
Earnings/(loss) per share 0.04 1.03 (0.48)
(cents)
Headline earnings/(loss) per 0.04 1.03 (0.48)
share (cents)
CONSOLIDATED GROUP BALANCE Unaudited Unaudited Audited
SHEET for the 6 restated for restated for
months ended the 6 months the year
30 June 2005 ended 30 ended
R`000 June 2004 31 Dec 2004
R`000 R`000
Assets
Property, plant and equipment 11 256 3 610 4 740
Loans 2 54 2
Goodwill on acquisition of 38 388 38 388 38 388
ICC Zambia
Net investment in finance 111 293 90 391 90 220
leases
Current assets 121 511 98 921 81 720
Total assets 282 450 231 364 215 070
Equity and liabilities
Shareholders funds 50 346 49 305 47 192
- Share capital and premium 132 297 132 297 132 297
- General risk reserve 2 620 2 620 2 620
- Foreign translation (20 002) (22 768) (23 106)
reserve
- Accumulated loss (64 569) (62 844) (64 619)
Non-current liabilities 102 177 100 392 84 638
- Long-term loans 94 833 93 592 78 346
- Deferred taxation 7 344 6 800 6 292
Current Liabilities 129 927 81 667 83 240
Total equity and liabilities 282 450 231 364 215 070
Weighted average number of 116 667 116 667 116 667
shares (`000)
Shares in issue (`000) 116 667 116 667 116 667
Net asset value per share 42.05 42.26 40.45
(cents)
Net tangible asset value per 9.14 9.36 7.55
share (cents)
CONSOLIDATED GROUP CASH FLOW Unaudited Unaudited Audited
STATEMENT for the 6 restated for restated for
months ended the 6 months the year
30 June 2005 ended 30 ended 31 Dec
R`000 June 2004 2004
R`000 R`000
Cash Flow from Operating (26 083) (4 607) (29 703)
activities
Cash Flow from Investing (6 639) (8 476) (3 569)
activities
Cash Flow from Financing 27 563 19 018 34 253
activities
Net movement in cash and cash (5 159) 5 935 981
equivalents for the period
Cash and cash equivalents at (1 245) (1 830) (1 830)
beginning of period
Foreign exchange movements on (752) 414 (396)
cash and cash equivalents
Cash and cash equivalents at (7 156) 4 519 (1 245)
end of period
CONSOLIDATED Share Share Foreign General Accumu- Total
GROUP STATEMENT Capital Premium Transla- Reserve lated
OF CHANGES IN tion Loss
EQUITY R`000 R`000 Reserve R`000 R`000
R`000 R`000
Balance at 1
January 2004 - as 11 667 120 630 (19 2 620 (59 55 748
previously 639) 530)
reported
Correction of - - - - (4 522) (4 522)
error
Adjusted opening 11 667 120 630 (19 2 620 (64 51 226
balance 639) 052)
Net profit for the - - - - 1 208 1 208
period - restated
As previously - - - - (1 006) (1 006)
reported
Correction of (185) (185)
error
Transitional
adjustment in - - - - 2 399 2 399
terms of IFRS
Foreign - - (3 129) - - (3 129)
translation
reserve
Balance at 30 June 11 667 120 630 (22 2 620 (62 49 305
2004 768) 844)
Net loss for the - - - - (1 775) (1 775)
period - restated
As previously - - -- - (4 174) (4 174)
reported
Transitional -
adjustment in - - -- 2 399 2 399
terms of IFRS
Foreign - - (338) - - (338)
translation
reserve
Balance at 31 11 667 120 630 (23 2 620 (64 47 192
December 2004 106) 619)
Net profit for the - - - - 50 50
period
Foreign - - 3 104 - - 3 104
translation
reserve
Balance at 30 June 11 667 120 630 (20 2 620 (64 50 346
2005 002) 569)
COMMENTS
The Board of Directors are pleased to present the interim financial
results of the Group for the period ended 30 June 2005.
NATURE OF THE BUSINESS
The primary business of the Group is the financing of secured structured
leases to clients. ICC Africa Holdings is the holding company for the ICC
Group of companies and is listed on the JSE Limited under share code ICC.
BUSINESS REVIEW
2005 saw the Group planning to expand its successful leasing model into
other African countries. The management of ICC has extensive knowledge of
trading patterns in Africa, which has enabled it to take advantage of
beneficial investment opportunities. This has resulted in a large capital
investment at period end, which is expected to significantly increase the
revenue of the Group over the next six months.
In addition, ICC has been able to expand its product line in respect of
operating leases. The market in Zambia continued to be buoyant but due to
ICC`s dominant position (75% market share), little incremental impact was
seen.
The South African Rand weakened against the US Dollar during the period
under review and has traded in a broad band between R5.86 and R6.67. The
fluctuation is largely due to the instability of the US Dollar. The
stability of the Rand is important for shareholders to draw comparatives
as the major trading currency of the Group is USD and Zambian Kwatcha,
before consolidation of the figures into South African Rand.
ICC South Africa (`ICC SA`) generated a profit before tax and management
fees of R263k, which represents a 63% increase in revenues from the
comparable period in 2004. The contribution of ICC SA to the group
results, however, still remains immaterial.
FINANCIAL REVIEW
The ICC group reported a profit before taxation of R2,2 million for the
six months under review, compared to a restated profit before taxation of
R2,1 million in the prior year. Revenue has remained consistent with the
prior year as a result of the appreciation of the USD against the South
African Rand. Normal operating expenditure has increased as a result of
the increase in revenue.
Property, plant and equipment increased significantly due to the expansion
of the product line to incorporate operating leases. Net investment in
finance leases and current assets, which represent mainly outstanding
leasing debtors, have increased as a result of the increased revenues and
the expansion as mentioned above. The large increase in current assets is
mainly due to the increase in the short term portion of the Net investment
in finance leases.
Current liabilities increased significantly by R48 million during the six
month period as a result of additional customer deposits being held as a
result of the foreclosure of new leases. In addition, there was a
significant increase in the bank overdraft which was required to finance
the capital expansion.
The Group reported negative cash balances of R7,1 million in comparison to
negative cash balances of R1,2 million as at 31 December 2004. This was as
a result of the increased capital expansion required to finance operating
leases negotiated during the period.
Foreign translation reserves decreased by a R1,8 million profit as a
result of the exchange rate fluctuations and the pricing of the Kwatcha
against the Rand during the period under review.
Directors have become aware of a potential obligation associated with the
unbundled entity, of approximately R500,000, which could result in a
liability being raised in ICC Africa Holdings for the current financial
year.
TAXATION
The taxation charge in the income statement can be analysed as follows;
Unaudited for the Unaudited Audited restated
6 months ended 30 restated for the for the year
June 2005 6 months ended 30 ended 31 Dec 2004
June 2004
R`000 R`000 R`000
Foreign taxation 807 867 811
Witholding tax 1,093 - 1,202
paid on dividend
(Zambia)
Current taxation 59 - 3
- SA Norma
Current year 9 -
Underprovision 50 - 3
i.r.o. prior
years
Deferred taxation 167 42
- SA
Current year 72 - 30
Underprovision 95 - 12
i.r.o. prior
years
Total tax charge 2,126 867 2,058
PRIOR YEAR ADJUSTMENT - FUNDAMENTAL ERROR
The prior year numbers have been restated to reflect the effect of
adjustments in respect of ICC, whereby certain liabilities of ICC, which
were previously included at subsidiary level, were included as liabilities
of previously discontinued operations in error. The effect of the
adjustments was to increase accumulated losses and liabilities of the
Group by R4,4 million.
In addition, ICC Zambia incorrectly included operating leases as part of
Net investment in finance leases in 2003, instead of capitalising these
assets to property, plant and equipment. This was corrected in 2004 as
well as the depreciation raised in the prior year in respect of these
reclassified assets. The adjustment to the profit for the period ended 30
June 2004 relates to the additional depreciation provided on these assets
for the six month period.
The effect of the errors was disclosed in detail in the 2004 Annual
report.
TRANSITIONAL ADJUSTMENT IN TERMS OF IFRS
The prior year numbers have been restated to reflect the transition from
South African Statements of Generally Accepted Accounting Practice, to
International Financial Reporting Standards. The adjustment represents
The reversal of amortisation of goodwill which arose on the acquisition of
ICC Zambia, as goodwill is not required to be amortised in terms of IFRS
3: Business combinations. The effect of the adjustment has been disclosed
in the transitional reconciliations presented below.
The adoption of the new interpretation of IAS17 (AC 105) - Operating
leases, which include fixed rental increases. The rental expense
pertaining to the Zambian subsidiary is not currently covered by a lease
agreement, as the contract is being re-negotiated with the landlord and
therefore there was no commitment at period end. The two South African
subsidiaries have entered into a month-to-month rental contract, with no
fixed escalation clauses, which results in no material adjustment
required.
INTERNATIONAL FINANCIAL REPORTING STANDARDS AND COMPANIES ACT REQUIREMENTS
The unedited interim financial statements were prepared in compliance with
International Financial Reporting Standards (IFRS) for the first time, as
well as the Companies Act. The disclosures required by IFRS1 concerning
the transition from South African Statements of Generally Accepted
Accounting Practice to IFRS are as follows:
Reconciliation of equity at 1 January 2004 (date of transition to IFRS)
No adjustment was required at 1 January 2004.
Reconciliation of equity at 31 December 2004
Effect of
SA GAAP transition IFRS
to IFRS
Property, plant and equipment 4 740 - 4 740
Loans 2 - 2
Goodwill on acquisition of ICC 33 590 4 798 38 388
Zambia
Net investment in finance 90 220 - 90 220
leases
Current assets 81 720 - 81 720
Total assets 210 272 4 798 215 070
Shareholders funds 42 394 4 798 47 192
Share capital and premium 132 297 - 132 297
General risk reserve (23 106) - (23 106)
Foreign translation reserve 2 620 - 2 620
Accumulated loss (69 417) 4 798 (64 619)
Non-current liabilities 84 638 - 84 638
Long term loans 78 346 - 78 346
Deferred taxation 6 292 - 6 292
Current liabilities 83 240 - 83 240
Total equity and liabilities 210 272 4 798 215 070
Reconciliation of profit for year ended 31 December 2004
Effect of
SA GAAP transition IFRS
to IFRS
Revenue 30 114 - 30 114
Operating expenses (22 277) 4 798 (17 479)
Profit before finance costs 7 837 4 798 12 635
Finance costs (11 144) - (11 144)
(Loss)/Profit before taxation (3 307) 4 798 1 491
Taxation (2 058) - (2 058)
Net loss for the year (5 365) 4 798 (567)
Earnings per share (cents) (4.60) (0.48)
The adjustment is as a result of Goodwill no longer being amortised
commencing on the date of transition.
CORPORATE GOVERNANCE
The group fully subscribes to the principles of, and implements where
possible, the recommendations of the King II Code on Corporate Governance.
DIVIDENDS
Dividends will not be paid in respect of the current financial year. Cash
generated will be retained and utilised to grow and expand the business of
the ICC group.
For and on behalf of the Board
N. Justin Chinyanta
Chairman
30 September 2005
Registered Office: Transfer Secretaries:
C/o Loita Capital Partners SA Computershare Investor Services 2004
Limited (Proprietary) Limited
2nd Floor, East Wing 70 Marshall Street
11 Alice Lane JOHANNESBURG
SANDTON 2001
Directors: Sponsor
N J Chinyanta*, Y Bazian, C Van Arcay Corporate Services
Nieuwkerk, A Fletcher*, A Karrim*, Number 3 Anerley Road
N Molver* Parktown
*Non-Executive JOHANNESBURG
Date: 28/09/2005 09:02:18 AM
