| Thu 31 Mar 2005, 10:31 | | Results for the twelve months ended 31 December 04 |
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Heritage Collection - Audited results of the group for the twelve months ended
31 December 2004
Heritage Collection Holdings Limited
Registration number: 1998/007269/06
Share code: HCL
ISIN ZAE000023594
Audited results of the group for the twelve months ended 31 December 2004
ABRIDGED CONSOLIDATED INCOME STATEMENT
Audited Unaudited Audited
31 Dec 2004 30 Jun 2004 31 Dec 2003
R000`s R000`s R000`s
Revenue 96,364 43,492 99,748
Operating profit / (loss) 1,923 (1,679) (11,754)
Investment income 480 62 811
Profit/(Loss) on ordinary activities 2,403 (1,617) (10,943)
before finance costs
Finance costs (3,915) (1,593) (4,558)
Loss before exceptional items (1,512) (3,210) (15,501)
Realisation of subsidiary 8,826 (2,352) -
Loss on sale of assets (578) (632) -
Additional provision on / write down (7,648) (3,481) -
of historical debtors
Operating profit / (loss) before (912) (9,674) (15,501)
taxation
Taxation (2,143) - 3,671
Total profit / (loss) for the year (3,055) (9,674) (11,830)
Headline earnings / (loss) per share (12.7) (10.2) (13.3)
(cents)
Earnings / (loss) per share (cents) (3.4) (10.9) (13.3)
Weighted number of shares issued 88,912,885 88,912,885 88,912,885
Reconciliation of earnings and
headline earnings:
Total earnings / (loss) for the year (3,055) (9,674) (11,830)
(Profit) / loss on sale of assets 578 632 (10)
Impairment of investments 42 - -
Realisation of subsidiary (8,826) - -
Headline earnings / (loss) for the (11,261) (9,042) (11,840)
year
ABRIDGED CONSOLIDATED BALANCE SHEET
Audited Unaudited Audited
31 Dec 2004 30 Jun 2004 ___________
R000`s R000`s R000`s
Assets
Non-current assets 15,322 18,746 17,926
Current Assets 39,921 51,118 70,507
Inventory 11,375 10,841 10,350
Accounts receivable 26,605 35,435 56,173
Taxation 138 - -
Cash and cash equivalents 1,803 4,842 3,984
Total assets 55,243 69,864 88,433
Equity and liabilities
Shareholders` interest 12,557 16,375 26,049
Non-current liabilities 7,520 6,094 9,523
Long term liabilities 7,520 6,094 9,523
Current liabilities 35,166 47,395 52,861
Accounts payable 23,987 31,861 30,908
Current portion of long term 351 67 1,333
liabilities
Cash and cash equivalents 10,828 15,467 20,620
Total equity and liabilities 55,243 69,864 88,433
Net asset value per share (cents) 14.1 18.4 29.3
ABRIDGED CASH FLOW STATEMENT
Audited Unaudited Audited
31 Dec 2004 30 Jun 2004 ___________
R000`s R000`s R000`s
Cash flows from operating activities 9,427 7,943 (151)
Cash generated from operations (9,041) (9,177) 2,534
Net change in working capital 19,786 17,680 (2,685)
Taxation paid / (received) (1,318) (560) -
Cash flows from investing activities (929) (757) 556
Cash flows from financing activities (887) (1,175) (2,168)
Net change in cash and cash 7,611 6,011 (1,763)
equivalents
Cash resource at beginning of period (16,636) (16,636) (14,873)
Cash resource at end of period (9,025) (10,626) (16,636)
STATEMENT OF CHANGES IN EQUITY
Audited Unaudited Audited
31 Dec 2004 30 Jun 2004 31 Dec 2003
R000`s R000`s R000`s
Balance at beginning of period 26,049 26,049 39,000
Prior year adjustment
Realisation of temporary difference - - (1,121)
on intangible assets
Restated balance 26,049 26,049 37,879
Realisation of intangible assets (2,570) - -
Sale of subsidiary (7,867) - -
Total net earnings / (loss) for the (3,055) (9,674) (11,830)
period
Balance at end of period 12,557 16,375 26,049
COMMENTS
The results for the year reflect a continued positive trend from the planned
refocusing and restructuring of the group.
Cost of sales and operating costs were reduced by more than over R7 million
during the year, resulting in an operating profit in excess of R2 million
(before finance charges).
As a result of the group`s focus on improving cash flow, the overdraft has
been reduced by over R9 million during the year under review.
The group has continued its strategy of stricter and more intensive management
of debtors. During the year under review the number of debtors paying cash was
substantially increased, consequently improving the bad debt profile.
All avenues of cost-cutting continue to be explored in order to further reduce
the group`s cost base.
Included in the taxation charge of R2 143 000 is a prior year deferred tax
adjustment of R1 390 000. This adjustment is as a result of a reduction in the
company`s prior year assessed tax loss, which is under dispute.
PROSPECTS
The group continues to explore alliances in the media sector in terms of its
group strategy.
Positive initiatives taken in cost-cutting and marketing should ensure that
the group return to profitability within the next fiscal period.
The group continues to develop its own product range but is simultaneously
exercising caution in such long-term investment during this period of
strengthening cash flow and consolidation.
Reader`s Digest Inc continue to provide up-to-date material in the form of
best-selling books, videos and music titles.
ACCOUNTING POLICIES
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.
The audited results of the group for the twelve months ended 31 December 2004
have been prepared on a basis consistent with the prior year.
The principle accounting policies applied in the preparation of these
financial results, conform with the South African statements of Generally
Accepted Accounting Practice.
The financial results have been audited by BDO Spencer Steward (Cape Town)
Inc. and their unqualified audit opinion is available for inspection at the
company`s registered office.
BL LLOYD
Managing Director
30-Mar-05
Date: 31/03/2005 10:22:11 AM
Produced by the JSE SENS Department
