| Fri 30 Nov 2001, 0:00 | | Edutech: Interim Results |
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NOVA EDUCATION AND TECHNOLOGY HOLDINGS LIMITED
(Formerly Contlan Holdings Limited ("Contlan"))
(Incorporated in the Republic of South Africa)
(Registration number 1998/006957/06)
Share code: ETH ISIN: ZAE000033270
("Edutech" or "the Company")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2001
INCOME STATEMENT
for the period ended 31 August 2001
Unaudited Unaudited Audited
Six months Six months 12 months
Aug 2001 Aug 2000 Feb 2000
R R R
Revenue 2 870 750 8 891 391 11 439 757
Continued 2 870 750 - -
Discontinued - 8 891 391 11 439 757
Operating profit/(loss) 1 669 613 (18 494 248) (27 495 391)
Continued 1 669 613 - -
Discontinued - (18 494 248) (27 495 391)
Net interest paid (1 172 337) - -
Continued (1 172 337) - -
Discontinued - - -
Operating profit/(loss)
before taxation 497 276 (18 494 248) (27 495 391)
Continued 497 276 - -
Discontinued - (18 494 248) (27 495 391)
Taxation (152 062) (43 227) (43 227)
Continued (152 062) - -
Discontinued - (43 227) (43 227)
Net profit/(loss) after taxation 345 214 (18 537 475) (27 538 618)
Abnormal items (27 727 504) - (392 000)
Amortisation of goodwill (1 936 139) - -
Net loss for period (29 318 429) (18 537 475) (27 930 618)
Headline earnings per share (cents) 0,25 (26,11) (38,79)
Earnings per share (cents) (21,37) (26,11) (39,34)
Number of shares in issue 137 222 200 71 000 000 71 000 000
BALANCE SHEET
at 31 August 2001 Unaudited Unaudited Audited
Six months Six months 12 months
Aug 2001 Aug 2000 Feb 2000
R R R
ASSETS
Non-current assets 27 015 361 7 940 350 257 812
Goodwill - 7 256 198 -
Debtors 26 727 390 - -
Fixed assets 91 171 492 152 61 012
Employee Share Incentive Trust 196 800 192 000 196 800
Current assets 424 082 4 478 760 1 298 382
Cash and cash equivalents 191 483 309 670 490 706
Accounts receivable and other debtors 163 599 4 169 090 807 676
Pre-paid expenses 69 000 - -
27 439 442 12 419 110 1 556 194
EQUITY AND LIABILITIES
Capital and reserves 10 021 033 10 042 395 649 252
Share capital 13 722 7 100 7 100
Share premium 40 867 571 29 416 668 29 416 668
Retained loss (30 860 260) (19 381 373) (28 774 516)
Non-current liabilities 16 778 404 25 543 -
Interest bearing loans 16 752 154 25 543 -
Deferred tax 26 250 - -
Current liabilities 640 005 2 351 172 906 942
Accounts payable 372 346 2 099 857 873 801
Bank account 66 - -
Receiver of Revenue 267 593 89 872 -
Current portion of interest
bearing borrowings - 161 443 33 141
27 439 442 12 419 110 1 556 194
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the period ended 31 August 2001
Share Share Retained
capital premium income Total
R R R R
Balance beginning of period 7 100 29 416 668 (28 774 516) 649 252
Net loss for period - - (29 318 429) (29 318 429)
Sale of investment -
Contlan Consulting (Pty) Ltd - - 27 232 685 27 232 685
Share capital movement 6 622 11 450 903 - 11 457 525
Balance end of period 13 722 40 867 571 (30 860 260) 10 021 033
Balance beginning of period 7 100 29 416 668 (843 898) 28 579 870
Net loss for period - - (27 930 618) (27 930 618)
Balance end of period 7 100 29 416 668 (28 774 516) 649 252
SHORTENED CASH FLOW STATEMENT
at 31 August 2001 Unaudited Unaudited Audited
Six months Six months 12 months
Aug 2001 Aug 2000 Feb 2000
R R R
Cash flows from operating activities 2 044 756 (2 101 703) (1 686 251)
Cash flows from investing activities (28 770 394) 1 032 289 2 473 037
Cash flows from financing activities 26 426 349 1 310 679 (364 485)
Net decrease/(increase) in cash and
cash equivalents at end of period (299 289) 241 265 422 301
Cash and cash equivalents at beginning
of period 490 706 68 405 68 405
Cash and cash equivalents
at end of period 191 417 309 670 490 706
COMMENTARY
Introduction
Edutech's core strategy is to optimise business opportunities in the
education environment. The Group is committed to provide the best available
services and products on an accountable and cost-effective basis.
Restructuring, change of name and re-constitution of the board
During March 2001 Contlan announced the acquisition of Financial Services of
South Africa (Pty) Ltd ("Finsa"), Edutech Curriculum Services (Pty) Ltd
("ECS") and Education Internet Portal (Pty) Ltd ("EIP"). The acquisitions
caused a change of control in Contlan, with the South African Development
Foundation becoming the new controlling shareholder of Contlan. Details of
the acquisitions were sent to shareholders in a circular dated 19 July 2001
and a shareholders' meeting was held on 13 August 2001 where the required
majority of shareholders voted in favour of the following resolutions:
* the acquisitions of Finsa, ECS and EIP;
* the change of name from Contlan to Edutech; and
* the re-constitution of the board of directors.
Edutech issued a pre-listing statement dated 19 July 2001 in compliance with
the listings requirements of the JSE Securities Exchange South Africa.
Management
The management structure comprises those persons on the executive level as
reported in the pre-listing statement. With the exception of Mr C van Wyk,
the former chairman of Contlan, the previous management of Contlan has not
been involved in any managerial and/or operational issue since the
restructuring.
Financial review
Edutech reported total income of R2 870 750 and net operating profit before
abnormal items and goodwill amortisation of R345 213 for the period.
The abnormal loss of R27 727 504 relates to losses sustained in closing
down the former Contlan subsidiaries as outlined in the pre-listing
statement.
Headline earnings per share showed a turn around and increased to 0,25
cent per share from a loss of 26,11 cents for the corresponding period.
Earnings per share has been calculated for the period on number of shares in
issue of 137 222 200.
The most significant change in the financial results of the Group is the
increase in the tangible net asset value from 0,91 cent per share at 28
February 2001 to 7,30 cents per share at 31 August 2001.
The accounting policies of the group remain unchanged and are consistent
with those disclosed in the annual financial statements.
Operational review
The interim period has been characterised by challenging business
conditions. An unfortunate extension of negotiations contributed to a delay
in the establishment of certain business units that have been envisaged. The
contemporaneous development of additional income sources and the leveraging
of Edutech's profile in the education environment have contributed to
significant progress. Edutech has entered into a school textbook publishing
joint venture with a leading publishing house through Bateleur Books (Pty)
Ltd, in which Edutech holds a 50% interest. Bateleur will deliver the first
batch of Grade 8 text books for public schools during January 2002 in terms
of the national Department of Education's New Curriculum Statement. The
prospects of Bateleur Books are extremely positive.
Futureteacher (Pty) Ltd was also established as joint venture with
Futurekids (SA) (Pty) Ltd, a leading school curriculum software provider,
during the period and will focus primarily on the in-service training of
educators with regard to Information Technology. Discussions with a leading
university to accredit such training courses are in process.
A dedicated call centre was established on a joint venture basis with
Care Assist (Pty) Ltd (trading as "Teacher Online") with the aim to provide
on a cost to client basis, telephonic advisory services to parents and
school pupils on the school curriculum for grades 0 to 12, including the
latest National Curriculum Statement.
Prospects
The next 12 months will be critical for Edutech as it rolls out further
business units that will position the Company to maximise the various
business opportunities. When these initiatives are successfully completed,
it will dramatically enhance the revenue possibilities of the Group.
Edutech's unique combination of its ability to leverage the intellectual
assets of the education community and its close relationship with educators,
in particular, ensure that it is strategically placed to become a leading
niche player in education and the peripheral business opportunities.
Prospects for the future are positive and Edutech is ideally positioned to
take advantage of the opportunities that have emanated, as well as future
opportunities.
For and on behalf of the board
C J Booyens (Non-executive Chairman)
J C Klopper (Chief Executive Officer)
Pretoria
29 November 2001
Board of directors
Executive: J C Klopper (CEO), E H Davies, C J H van Wyk
Non-executive: C J Booyens (Chairman), A Lianos, L M Maree, J F Steyn,
M J van Staden
Company secretary
J C Klopper
Registered address
278 Serene Street, Garsfontein, 0042
Private Bag 90120, Garsfontein, 0042
Telephone: (012) 348-9641 Fax: (012) 365-1977
