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Heritage Collection Holdings Limited - Unaudited Interim Report For The Six
Months Ended 30 June 2003
HERITAGE COLLECTION HOLDINGS LIMITED
REGISTRATION NUMBER 1998/07269/06
SHARE CODE: HCL
ISIN CODE: ZAE 000023594
UNAUDITED INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2003
ABRIDGED CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
30 June 2003 30 June 31 Dec
2002 2002
R000"s R000"s R000"s
Revenue 44,006 53,869 110,545
Operating (loss) / profit (7,487) 1,951 3,282
Investment income - 4,600 1,021
(Loss) / Profit on ordinary (7,487) 6,551 4,303
activities before finance costs
Finance costs (1,823) 772 (4,831)
Loss before exceptional items (9,310) 7,323 (528)
Forex loss (3,774) - -
Operating (loss) / profit before (13,084) 7,323 (528)
taxation
Taxation - 3,043 (1,211)
Total profit / (loss) for the year (13,084) 10,366 (1,739)
Headline (loss) / earnings per (14.7) 6.5 (7.6)
share (cents)
(Loss) / earnings per share (14.7) 11.7 (1.9)
(cents)
Weighted number of shares issued 88,912,885 88,912,885 88,912,885
ABRIDGED CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
30 June 2003 30 June
2002
R000"s R000"s R000"s
Assets
Non-current assets 19,455 27,184 20,651
Current Assets 71,190 90,102 82,834
Inventory 11,704 17,484 12,518
Accounts receivable 52,249 69,505 63,443
Cash and cash equivalents 7,237 3,113 6,873
Total assets 90,646 117,286 103,485
Equity and liabilities
Shareholders" interest 25,916 51,794 39,000
Non-current liabilities 8,000 6,016 11,820
Long term liabilities 8,000 6,016 11,820
Current liabilities 56,730 59,476 52,665
Taxation 41 - 41
Accounts payable 34,369 37,061 29,570
Current portion of long term 630 915 1,308
liabilities
Cash and cash equivalents 21,690 21,500 21,746
Total equity and liabilities 90,646 117,286 103,485
Net asset value per share (cents) 29.1 58.3 43.9
ABRIDGED CASH FLOW STATEMENT
Unaudited Unaudited Audited
30 June 2003 30 June
2002
R000"s R000"s R000"s
Cash flows from operating 4,935 (159) 431
activities
Cash generated from operations (11,871) 2,485 3,956
Net change in working capital 16,806 (2,644) (3,525)
Taxation paid - - -
Cash flows from investing (17) 7,189 7,095
activities
Cash flows from financing (4,498) (3,524) (1,229)
activities
Net change in cash and cash 420 3,506 6,297
equivalents
Cash resource at beginning of (14,873) (21,893) (21,170)
period
Cash resource at end of period (14,453) (18,387) (14,873)
STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
30 June 2003 30 June 31 Dec
2002 2002
R000"s R000"s R000"s
Balance at beginning of period 39,000 41,902 42,949
Prior year adjustment
Realisation of temporary - - (2,210)
difference on intangible assets
Restated balance 39,000 41,902 40,739
Realisation of temporary - (474) -
difference on intangible assets
Total net earnings / (loss) for (13,084) 10,366 (1,739)
the period
Balance at end of period 25,916 51,794 39,000
COMMENTS
The results for the six-month period under review reflect the difficult direct
marketing conditions that have been experienced during the period. This has
affected the revenue of the company, which is down by 18,3% compared to the
first six months of the previous year.
The process of consolidation of overheads and review of marketing strategy has
continued.Mailings continue to be more focused, staff levels and overheads more
tightly controlled, and the cost-reduction exercise has continued.
The focus on the collection of debtors continued to receive high priority.
Collection methodologies are continually under review and the results of
initiatives taken have shown results.
The exceptional items include a substantial write-down of the exposure to
Zimbabwe currency.
The focus on cash flow continues and the resources of the business are carefully
managed.
PROSPECTS
It is anticipated that difficult trading conditions will continue in this
industry for the next reporting period. The directors are, however, confident
that losses will be curtailed as a result of initiatives currently receiving
attention.
The directors are currently developing strategic initiatives which, they
believe, will provide additional revenue streams and broaden the customer base.
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 best-selling books and musical titles, which
enhance the business prospects.
ACCOUNTING POLICIES
The unaudited results of the group for the six months ended 30 June 2003 have
been prepared on a basis consistent with the Audited Annual Financial Statements
at 31 December 2002. The principal accounting policies conform with the South
African Statements of Generally Accepted Accounting Practice.
ON BEHALF OF THE BOARD
B L LLOYD J A BESTER
Managing Director Financial Director
Cape Town, 17 September 2003
Registered Address: 10 Mill Street, Newlands, 7708
Transfer Secretaries: Computershare Investor Services Limited
4th Floor, Edura House, 41 Fox Street Johannesburg 2000
Website: www.readersdigest.co.za
Date: 17/09/2003 11:56:32 AM Produced by the JSE SENS Department
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