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Heritage Collection Holdings Ltd - Unaudited Interim Report For The Six Months
Ended 30 June 2002
HERITAGE COLLECTION HOLDINGS LIMITED
REGISTRATION NUMBER 1998/07269/06
Share Code: HCL
ISIN Code: ZAE000023594
UNAUDITED INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2002
ABRIDGED CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
30 June 2002 30 June 2001 31 Dec 2001
R000`s R000`s R000`s
Revenue
53,869 68,479 137,081
Operating profit / (loss)
1,951 2,632 (7,286)
Net interest received /
(paid) 772 (1,623) 280
Operating profit / (loss)
before exceptional items 2,723 1,009 (7,006)
Exceptional items:Surplus on
realisation of property 4,600 - -
Bad debt write-offs - (44,554) (44,554)
Inventory write-off - (1,094) (1,094)
Share trust write-off - (2,772) (3,150)
Litigation settlements - (656) (656)
Operating profit / (loss)
before taxation 7,323 (48,067) (56,460)
Taxation
3,043 14,666 (5,517)
Total profit / (loss) for
the year 10,366 (33,401) (61,977)
Headline earnings / (loss)
per share (cents) 6.5 1.1 (65.7)
Earnings / (loss) per share
(cents) 11.7 (36.5) (69.7)
Weighted number of shares
issued 88,912,885 88,912,885 88,912,885
ABRIDGED CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
30 June 2002 30 June 2001 31 Dec 2001
R000`s R000`s R000`s
Assets
Non-current assets
27,184 50,401 27,894
Current Assets
90,102 90,218 91,247
Inventory
17,484 23,010 16,752
Accounts receivable
69,505 64,687 69,821
Cash and cash equivalents
3,113 2,521 4,674
Total assets
117,286 140,619 119,141
Equity and liabilities
Shareholders` interest
51,794 71,109 41,902
Long Term Liabilities
6,016 10,052 9,789
Current liabilities
59,476 59,458 67,450
Taxation
- - 431
Accounts payable
37,061 37,575 39,287
Current portion of long
term liabilities 915 1,218 1,165
Cash and cash equivalents
21,500 20,665 26,567
Total equity and liabilities
117,286 140,619 119,141
Net asset value per share
(cents) 58.3 80.0 47.1
ABRIDGED CASH FLOW STATEMENT
-
Unaudited Unaudited Audited
30 June 2002 30 June 2001 31 Dec 2001
R000`s R000`s R000`s
Cash flows from operating
activities (159) 1,928 (1,146)
Cash generated from
operations 2,485 1,165 2,162
Net change in working
capital (2,644) 784 (3,800)
Taxation paid
- (21) 492
Cash flows from investing
activities 7,189 (713) (1,072)
Cash flows from financing
activities (3,524) (1,139) (1,455)
Net change in cash and cash
equivalents 3,506 76 (3,673)
Cash resource at beginning
of period (21,893) (18,220) 18,220
Cash resource at end of
period (18,387) (18,144) (21,893)
STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
30 June 2002 30 June 2001 31 Dec 2001
R000`s R000`s R000`s
Balance at beginning of
period 41,902 105,144 105,144
Prior year adjustment
Realisation of temporary
difference on intangibles - (634) (1,265)
Restated balance
41,902 104,510 103,879
Realisation of temporary
difference on intangibles (474) - -
Total net earnings / (loss)
for the period 10,366 (33,401) (61,977)
Balance at end of period
51,794 71,109 41,902
COMMENTS
The results for the six-month period under review reflect the difficult retail
conditions that have been experienced during the period. This has affected the
revenue of the company, which is down by 21,3% compared to the first six months
of the previous year and is the result of cautious and precise marketing
activity.The operating profit before exceptional items is considerably better
than the comparative operating profit for the first six months of the prior
year. The process of consolidation and review of all aspects of the business has
continued and cost reductions have contributed to the earnings for the period,
showing an improvement over the earnings published at the end of the prior year.
During the period, one of the subsidiary companies in the group sold a building
which was no longer being used by the group, realising a surplus on sale.
Mailings continue to be more focussed, staff levels and overheads controlled and
the previously mentioned cost-reduction exercise has continued with a constant
review of costs and the reduction and removal of unnecessary overheads.
The focus on the collection of debtors continues to receive high priority.
Collection methodologies are continually under review and the results of
initiatives taken at the present time should manifest in the latter six months
of the year.
The focus on cashflow continues and the resources of the business are being
carefully managed.
The non-current assets do not include any intangible value attributed to the
cost of acquiring the licence of the Reader`s Digest trademark in South Africa.
Reader`s Digest Incorporated continues to provide up-to-date material at
competitive prices in the form of bestselling books and musical titles which
enhance the business prospects. The association with Reader`s Digest enables the
company to expand its market without significantly increasing costs.
PROSPECTS
It is anticipated that difficult conditions will continue in this industry in
the next six months, but notwithstanding this fact, the directors are confident
that the group will make a further modest operating profit before exceptional
items for the current financial year.
The attention on a more focussed mailing plan and more effective and efficient
operations in various areas of the business will continue.
ACCOUNTING POLICIES
The unaudited results of the group for the six months ended 30 June 2002 have
been prepared on a basis consistent with the Audited Annual Financial Statements
at 31 December 2001. The principal accounting policies conform with the South
African Statements of Generally Accepted Accounting Practice.
ON BEHALF OF THE BOARD
B L LLOYD
Managing Director
J A BESTER
Financial Director
CAPE TOWN, 16 August 2002
Registered Address: 10 Mill Street, Newlands, 7708
Transfer Secretaries: Computershare Investor Services Limited, 4th Floor,
Edura House, 41 Fox Street, Johannesburg, 2001
Website: www.readersdigest.co.za
Date: 16/08/2002 03:26:55 PM Produced by the JSE SENS Department
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