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Labat Africa Limited - Interim results for the six months ended 31 August 2005
Labat Africa Limited
Incorporated in the Republic of South Africa
Registration number 1986/001616/06
Share code: LAB & ISIN: ZAE000018354
("Labat" or "the Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2005
GROUP CONSOLIDATED INCOME STATEMENT Unaudited Unaudited-restated
Audited
6 months 6 months 12 months
31 August 2005 31 August 200428
February 2005
(R"000) (R"000) (R"000)
Revenue 83 015 97 343 193 867
Continuing operations 71,855 97,343 130,814
Discontinued operations 11,161 0 63,053
Operating income before
depreciation and amortisation 34 219 5 517 (3 328)
Continuing operations 33,402 5,517 3,189
Discontinued operations 817 0 -6,517
Depreciation and amortisation (11 684) (10 177) (22 693)
Continuing operations -11,212 -10,177 -20,613
Discontinued operations -472 0 -2,080
Operating profit/(loss) before
interest and taxation 22 535 (4 660) (26 021)
Continuing operations 22,190 -4,660 -17,424
Discontinued operations 345 0 -8,597
Interest paid (2 473) (5 236) (9 503)
Continuing operations -2,468 -5,236 -6,501
Discontinued operations -6 -3,002
Interest received 63 139 541
Continuing operations 63 139 430
Discontinued operations 0 0 111
Profit/(Loss) before taxation,
sale and fair value adjustments 20 125 (9 757) (34 983)
Continuing operations 19,785 -9,757 -23,495
Discontinued operations 339 0 -11,488
Sale of investments and fair
value adjustments 2 310 - (27 650)
Profit/(Loss) before taxation 22 435 (9 757) (62 633)
Taxation (8 070) 3 957 4 109
Continuing operations -7,968 3,957 -4,966
Discontinued operations -102 9,075
Profit/(Loss) after taxation
for the period 14 365 (5 800) (58 524)
Attributable to:
Equity holders 5 488 (8 650) (62 947)
Minority interest 8 877 2 850 4 423
14 365 (5 800) (58 524)
Shares in issue throughout
the period (`000) 184 415 184 415 184 415
Basic earnings/loss per share (cents) 3,0 (4,7)
(34,1)
Headline earnings/(loss) per
share (cents) 1,7 (5,9) (19,3)
check 5,487
Notes to the financial statements
1) Taxation
Normal taxation 0 1,689 1,689
Deferred taxation liability 0 325 325
Deferred tax asset raised 0 -8,910 -8,910
0 -6,896 -6,896
1) Reconciliation of basic to headline earnings
Basic earnings 5,488 (8,650) (62,947)
Amortisation of goodwill - 76
Profit on sale of fixed assets (299) (321)
Negative goodwill (1,943) (1,943)
Loss on sale of investment 11,010 - 2,343
Impairment of investments and assets- - 30,156
Profit on sale of Africard (13,320)
Revaluation of property (2,906)
Headline earnings 3,178 (10,816) (35,618)
Note
Reconciliation of Basic Earnings to headline earnings
Basic earnings 5,488 -13,646 -13,646
Amortisation of goodwill 133 133 133
Headline earnings 5,621 -13,513 -13,513
Reconciliation of basic to headline earnings
Basic earnings 5 488 (8 650) (62 947)
Amortisation of goodwill - 76
Profit on sale of fixed assets (299) (321)
Negative goodwill (1 943) (1 943)
Sale of investments (2 310) - 2 343
Impairment of investments and assets- - 30 156
Revaluation of property (2 906)
Headline earnings 3 178 (10 816) (35 618)
GROUP CONSOLIDATED BALANCE SHEET Unaudited Unaudited-restated
Audited
6 months 6 months 12 months
31 August 2005 31 August 200428
February 2005
(R"000) (R"000) (R"000)
ASSETS
Property, plant and equipment 45 347 48 391 53 726
Intangible assets 31 733 47 733 34 984
Intangible assets 31,733 47,733 34,984
Investments 10,539 4,457 2,032
Other investments 10 539 4 457 2 032
Deferred taxation 21 980 26 493 22 492
Non-current assets 109 599 127 074 113 234
Cash 10 413 10 722 3 295
Inventories 15 003 22 262 22 196
Accounts receivables 62 629 122 812 89 933
Instalment sale debtors 0 84,430 56,702
Trade and other receivables 62,629 38,382 33,231
Current assets 88 045 155 796 115 424
Total assets 197 644 282 870 228 658
EQUITY AND LIABILITIES
Share capital and reserves 75,366 121,824 69,878
Share capital 1,844 1,844 1,844
Share premium 48,855 48,855 48,855
Non Distributable Reserves 2,420 0 2,420
Distributable reserves 22,247 71,125 16,759
Share capital and reserves 75 366 121 824 69 878
Outside shareholders 17 641 7 947 8 584
Total shareholders" funds 93 007 129 771 78 462
Long-term liabilities 28 134 25 873 22 665
Deferred taxation 1 784 10 153 2 835
Non-current liabilities 29 918 36 026 25 500
Bank overdraft 5 698 66 560 64 879
Bank overdraft 5,698 29,345 27,664
Instalment sale bank finance 0 37,215 37,215
Account payable 69 021 50 513 59 817
Short-term debt 7,796 10,145 12,431
Trade creditors and other payables 52,184 36,435 42,162
Provisions for Impairment of assets 0 0
Taxation 9,042 3,933 5,224
Current liabilities 74,719 117 073 124 696
Total equity and liabilities 197 644 282 870 228 658
Number of shares in issue ("000) 184 415 184 415 184 415
Total net asset value per
share (cents) 40,9 66,1 37,9
Tangible Net asset value
per share (cents) 23.7 52.3 52.3
check 0 0 0
Audited
CASH FLOW STATEMENT Unaudited Unaudited 12 months
31 August 2005 31 August 200428
February 2005
(R"000) (R"000) (R"000)
Net flow from operating activities 16 889 9 341 10 071
Net flow from investing activities (8 575) (17 831) (21 639)
Net flow from financing activities (1 196) 13 861 9 512
Net increase/(decrease) in cash 7 118 5 371 (2 056)
Cash at beginning of period 3 295 5 351 5 351
Cash at end of period 10 413 10 722 3 295
check 10,413 10,722
Difference -1
STATEMENT OF CHANGES IN EQUITY
Share Capital Share Premium Non-
Distributable Distributable Capital and
Reserves Reserves Reserves
(R"000) (R"000) (R"000) (R"000) (R"000)
Balance at
1 March 2005 1 844 48 855 2 420 16 759 69 878
Profit for
the period 5 488 5 488
Balance at
31 August 2005 1 844 48 855 2 420 22 247 75 366
Reconciliation of Equity at 31 August 2004
Share Capital Share Premium Non-
Distributable Distributable Capital and
Reserves Reserves Reserves
(R"000) (R"000) (R"000) (R"000) (R"000)
Balance at
29 February 2004 1 844 48 855 - 79 775 130 474
Loss for the
period as
previously
reported (9 974) (9 974)
Adjusted for
IFRS implementation
- negative goodwill
- taken to income 1 943 1 943
-operating leases (137) (137)
Other adjustments
Amortisation of intangibles (197)
(197)
Loss due to subsidiary
previously not consolidated (198)
(198)
Exchange rate adjustment (87) (87)
Balance at
31 August 2004 1 844 48 855 - 71 125 121 824
Effect of the adoption of IFRS
on the group"s net loss. 31 August 2004
Loss as previously reported (9 974)
Adjusted for implementation of IFRS
- Negative goodwill taken to loss 1 943
- Operating leases (137)
Other Adjustments
Amortisation of intangibles (197)
Loss due to subsidiary
previously not consolidated (198)
Exchange rate adjustment (87)
Net loss as restated (8 650)
Segmental Analysis
31 August 2005 31 August 2004
Revenue by Segment 83 015 97 343
Technology 80 800 62 418
Retail - 25 254
Services 2 215 9 671
Profit from operations
before finance costs and
sale of investments 22 535 (4 660)
Technology 8 297 (2 696)
Retail - (1 880)
Services* 15 739 739
Other operations** (1 501) (823)
* Includes restructuring gain of R15,9 million
** Other operations incorporate the company, group adjustments and elimination
Commentary
The Group returned to profitability in the first six months of the financial
year and looks set to continue generating good profits and cashflow for the
second half of the year and into 2006. Group debt has been reduced
substantially, group overdrafts have reduced by R59,2 million from R64,9 million
to R5,7 million in the period. These overdrafts have by 2nd November 2005 been
fully repaid.
Sale of Acme Stores
The sale of Acme Stores has been completed with shareholders approving the
transaction at the shareholders" general meeting held on Monday, 10 October
2005. The results of the general meeting were posted on SENS on Monday, 10
October 2005 and published in the press on Tuesday, 11 October 2005.
Consequently, the Group has been released from any cross guarantees relating to
Acme Stores.
Sale of Africard
Shareholders are referred to the announcement, which was published in the press
on Friday, 30 September 2005 regarding the disposal of Africard to Oberthur Card
Systems S.A., and to the circular sent to shareholders on 8 November 2005. At
the general meeting of shareholders, which was held on 23 November 2005 to
approve the transaction, all the resolutions were passed by the requisite
majority of shareholders present.
Restructuring
Shareholders are advised that the entire interest bearing overdraft debt owed by
Labat, Labat Africa Management Consulting and SAMES has been settled in full. As
a result of restructuring of debt, the Group has realised a gain of R15,9
million in operating income.
The board is continuing with its restructuring of the Group to further cut costs
by streamlining the operations. This process will be finalised early in the New
Year. This will leave Labat with two core businesses, SAMES and Labat Traffic
Solutions.
Loans and sureties provided to Labat
Mr Brian van Rooyen, the Labat Chairman who provided sureties in his personal
capacity to the Group bankers on behalf of Labat, has been released from these
obligations. Mr van Rooyen and fellow shareholders provided personal loans to
the Group in order to eliminate bank debt. The shareholders provided the funds
in order for Labat to fulfil its obligations.
SAMES
The business is now back on track and is almost at break even and projecting
profits for 2007. A substantial new project, which will see SAMES improving its
technology to the .8 micron level, is well on track. This project is accompanied
by a Euro22 million revenue contract over the next five years. Funding for the
project has been sourced via the DTI Industrial Participation programme.
Labat Traffic Solutions
Labat Traffic Solutions continues to record excellent year-on-year growth in
revenue and profit and continues to grow its technology base and business. The
business now has proven technology and a business model that is expected to
deliver enhanced earnings as a result of the implementation of new contracts.
Negotiations are at an advanced stage with various municipalities who have seen
the benefits of Labat Traffic"s superior technology and business model.
Summary
Labat is now well on the way to a substantial recovery and is projecting profits
for the year ahead. The board of Labat would like to thank those who have
supported us through our recent difficult times; our management, staff,
shareholders and especially our bankers, suppliers and customers.
Accounting Policies
The interim results have been prepared in accordance with the Groups accounting
policies which have been consistently applied and comply with IFRS and IAS34
(Interim Financial Reporting). The following accounting policies were applied
for IFRS reporting:
AC 140 (IFRS 3 revised 2004) Business Combinations - goodwill on consolidation
is no longer amortised but is tested annually for impairment as from the 1 March
2004. Negative goodwill is recognised immediately in profit and loss.
AC 105 (IAS 17) Operating leases are recognised as an expense on a straight line
basis over the lease term.
The results for the comparative six month period ended 31 August 2004 have been
re-stated to reflect the adoption of the above statements and the effect of the
statements is detailed in the reconciliation of equity at 31 August 2004.
For and on behalf of the board
B G VAN ROOYEN
Chairman
25 November 2005
Registered Office
Island House
Constantia Park Centre
Corner 14th Avenue and Hendrik Potgieter Road.
Weltevreden Park, 1709
Private Bag X09-248
Weltevreden Park, 1715
Auditors
RAIN
3rd Floor
30 Melrose Boulevard
Melrose Arch
Melrose, 2196
Transfer secretaries
Computershare Investor Services 2004 (Proprietary) Limited
70 Marshall Street
Johannesburg, 2001
PO Box 61051
Marshalltown, 2107
Sponsors
Merchant Sponsors (Proprietary) Limited
Date: 28/11/2005 05:00:18 PM Produced by the JSE SENS Department
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