| Tue 1 Nov 2005, 17:52 | | Purple Capital Limited - Audited Financial Results |
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Purple Capital Limited - Audited Financial Results for the year ended 31 August
2005
Purple Capital Limited
(formerly AVASA Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1998/013637/06)
Share code: PPE ISIN: ZAE000071411
("Purple Capital" or "the Company")
Audited Financial Results for the year ended 31 August 2005
Abridged Income Statement
For the year ended 31 August 2005 2004
R"000 R"000
Revenue 560 (9 328)
Transaction and corporate action expenses (1 350) (3 183)
Operating expenses (4 791) (7 606)
Operating loss before financial income (5 581) (20 117)
Financial income 362 373
Financial expenses (163) (1)
Share of profit of associates 1 647 -
Loss before taxation (3 735) (19 745)
Taxation 2 652 (550)
Loss for the year (1 083) (20 295)
Weighted number of shares in issue
at 31 August (pre-share consolidation) 992 112 580 750
Basic attributable loss per share (cents) (0.11) (3.49)
Headline loss per share (cents) (0.11) (3.49)
Diluted attributable loss per share (cents) (0.11) (3.47)
Abridged Cash Flow Statement
For the year ended 31 August 2005 2004
R"000 R"000
Cash flow from operating activities (4 256) (10 378)
Cash flow from investing activities (1 652) 373
Cash flow from financing activities 25 312 (408)
Net increase in cash and cash equivalents 19 403 (10 413)
Cash and cash equivalents at beginning of year (335) 10 078
Cash and cash equivalents at end of year 19 068 (335)
Abridged Balance Sheet
As at 31 August 2005 2004
R"000 R"000
Fixed assets 328 274
Interests in associate companies 20 038 -
Other investments 672 9 090
Deferred taxation 2 652 -
Total non-current assets 23 690 9 364
Trade and other receivables 294 477
Cash and cash equivalents 19 068 150
Non-current assets held for sale 9 272 -
Total current assets 28 634 627
Total assets 52 324 9 991
Issued capital and premium 82 889 40 379
Retained earnings (35 226) (32 496)
Other reserves 3 386 -
Total equity 51 049 7 883
Bank overdraft - 485
Trade and other payables 1 275 1 623
Total current liabilities 1 275 2 108
Total equity and liabilities 52 324 9 991
Net asset value per ordinary share (cents)
# pre-share consolidation 3.52 1.36
# post-share consolidation 35.2
Statement of Changes in Equity
For the year ended 31 August 2005 2004
R"000 R"000
Balance at beginning of year 7 883 28 178
Loss for year (1 083) (20 295)
Share based payments 1 739 -
Shares issued 42 510 -
51 049 7 883
COMMENTARY
Financial review
We are pleased to report that the loss for the year has been reduced to R1,083
million from R20,295 million last year and shareholders" funds have increased
from R7,9 million in 2004 to R51,0 million in 2005.
The Company currently has approximately R26,5 million in cash on hand
(including post-balance sheet receipts of R8,6 million) compared to being in a
net borrowed position in the prior year.
Operational review
During the 2004/2005 financial year, and the two months thereafter, the
Company has seen significant changes and activities:
- Mark Barnes joined the Board as Executive Chairman;
- the Company was recapitalised through a rights issue and a specific issue of
shares for cash to Mark Barnes raising a total of R8 million;
- the Company changed its name to Purple Capital Limited;
- the Company acquired 30% of Bridge Capital, an independent corporate finance
house and 20% of acsis, an independent asset consulting and financial
planning group;
- Purple Capital and Bridge Capital each acquired a 20% stake in Umnombo, a
group of black professionals;
- the Company concluded an empowerment transaction led by DENOSA, the biggest
nurses union in Africa;
- a further amount of approximately R18 million was raised by way of a general
issue of shares for cash;
- Purple Capital"s listing was moved from the "Venture Capital" sector to the
Main Board of the JSE Limited in the "Financials - Investment Entities"
sector;
- the investment in Sage Group Limited was realised for cash;
- the Company"s shares were consolidated on a 1-for-10 basis.
We are now on a sound footing, well placed for the future.
With regard to the Blackstar Equity Fund referred to in our March
announcement, we can now announce that Blackstar Investors PLC ("Blackstar")
is in the process of listing on the Alternative Investment Market ("AIM"),
operated by the London Stock Exchange. Blackstar"s strategy will be to provide
funding for Black Economic Empowerment ("BEE") transactions in South Africa
and it expects to be one of the first foreign pools of capital to participate
in this opportunity. This will be supplemented by local capital in due course.
Blackstar Managers will be an independently operated company where management,
led by Andrew Bonamour will hold 50,1% and Purple Capital 49,9%. Blackstar
Managers will have a management agreement to invest Blackstar"s funds in South
Africa.
We expect that the Blackstar model will work well for us as a first step in
international investor BEE awareness. We hope to raise further funds (both
locally and offshore) in the wake of its success.
Andrew Bonamour will take up the reigns at Blackstar Managers as its full time
CEO and as a result will resign his position at Purple Capital. We wish him
and his team every success and thank him for the contribution enthusiastically
made whilst he was with the Company.
We intend to strengthen the team at Purple Capital at both an executive and
non-executive level. We are in discussions with a number of people and teams in
financial services - particularly debt structured products and treasury.
Our associate investments, Bridge Capital and acsis, are both performing well
and growth prospects are good. Next year we will account for a full year"s
earnings from our associates whereas only five months were brought in at 31
August 2005.
Our relationships with Umnombo and DENOSA have already formed a platform for
significant deal flow and although no significant deals have yet been brought
to book, we believe the alliance will prove to be a source of deal flow and
influence for the group.
Over the last nine months the executive team have examined a large number of
additional transactions, ranging from strategic acquisitions of substance to
deals more of an investment banking nature, including private equity on-
balance sheet investments. Naturally, most of these deals have centred around
BEE structured participation.
Our approach towards investing shareholders" money will remain opportunistic
in outlook and yet conservative in evaluation - always guided by returns on
capital and strategic fit. There are many opportunities currently under
consideration, both large and small. To the best of our ability we intend to
consider them wisely and rather not invest in haste. We have sufficient
capital and a significantly reduced ongoing cost base which together afford us
the latitude to bide our time, in anticipation of doing the right deals, at
the right time, at the right price and for the right reasons.
Our strategic mandate remains clear "...to build an independent South African
financial services group in partnership with black business leaders". In
essence you are investing in our ability to manifest the foundations of that
strategy in the short term.
Our thanks to colleagues on the board and individual shareholders for their
support and advice.
We look forward, with all of you, to a year of great opportunity for our
Company.
Accounting principles
The financial statements have been prepared in accordance with International
Financial Reporting Standards ("IFRS"), the interpretations adopted by the
International Accounting Standards Board and the requirements of the South
African Companies Act. These are the Company"s first consolidated financial
statements prepared in accordance with IFRS, and IFRS 1 has been applied.
In addition, IFRS 2 "Share-Based Payments" has been applied. This standard
requires an expense to be recognised in the income statement based on the fair
value of share option awards, measured at the date of the grant. Previously,
no expense was recognised. The main impact on the Company is the expensing of
employees" and directors" share options by using an option-pricing model.
KPMG Incorporated has audited the annual financial statements for the year
ended 31 August 2005 and a copy of their unqualified audit opinion is
available for inspection at the Company"s registered office.
Annual general meeting
The annual general meeting of shareholders will be held at the registered
office of the Company, 1st Floor, Eastwood, 57 Sixth Road, Hyde Park, Sandton,
at 10:00 on Thursday, 8 December 2005.
On behalf of the board
Mark Barnes Andrew Bonamour
Chairman Chief Executive Officer
Johannesburg
1 November 2005
Registered office: Transfer secretaries:
1st Floor Eastwood Ultra Registrars (Pty) Limited
57 Sixth Road 11 Diagonal Street
Hyde Park, 2196 Johannesburg, 2001
(PO Box 411449, Craighall, 2024) (PO Box 4844, Johannesburg, 2000)
Independent auditors: Sponsor:
KPMG Incorporated Bridge Capital Services (Pty) Limited
Chartered Accountants (SA) 1st Floor Building 22A
Registered Accountants and Auditors The Woodlands
KPMG Crescent Woodlands Drive
85 Empire Road, Parktown, 2193 Woodmead, Sandton, 2196
(Private Bag 9, Parkview, 2122) (PO Box 651010, Benmore, 2010)
Directors:
Executive: Mark Barnes (Chairman), Andrew Bonamour, Craig Carter
Non-executive: Thembeka Gwagwa, Julian Treger (British)
Date: 01/11/2005 05:52:58 PM Produced by the JSE SENS Department
