|
Heritage Collection Holdings Limited - Announcement
Heritage Collection Holdings Limited
Registration number: 1998/007269/06
Share code: HCL
ISIN ZAE000023594
`Hercol` or `the company`
ANNOUNCEMENT
Introduction
Shareholders are referred to the cautionary announcements published on 6 May, 20
June and 24 August 2005. Hercol is pleased to announce that it has successfully
renegotiated the renewal and extension of its franchise agreement (`the new
franchise agreement`) with Readers Digest Inc. USA, which would have expired in
2007.
Terms of the new franchise agreement
In terms of the new franchise agreement, Hercol will continue to distribute
Readers Digest books, music, videos and home entertainment products for three
and a half years, plus a two year renewal period - a total of five and a half
years. In terms of the new franchise agreement, Hercol will no longer publish
and distribute Readers Digest magazine, which will allow the company to
concentrate on its direct marketing business, which has historically been its
focus.
The disposal
As a consequence of the new franchise agreement, Hercol has also sold its
magazine subscriber list to Readers Digest Inc. USA for R3,2 million, payable in
cash (`the disposal`). The effective date of the disposal is 15 September 2005.
Rationale
The proceeds from the disposal will be used to reduce the company`s gearing and
to expand its direct mail marketing activities. The directors anticipate that by
the end of September 2005 the company will have completely repaid all its bank
overdrafts, which stood at R9,87 million at 31 December 2004.
The pro forma financial effects of the disposal for the year ended 31 December
2004 are set out below. The following table has been prepared for illustrative
purposes only and is based on the published financial results of the company for
the year ended 31 December 2004.
Before the Afterthe Percentage
disposal disposal change
(cents) (cents) (%)
Earnings per
share (3.44) 15.31 545
Headline earnings
per share (12.67) (10.05) 21
Net asset value
per share 14.12 27.83 97
Net tangible asset
Value per share 5.51 5.51 -
Notes:
The following assumptions have been made in arriving at these financial effects:
1. with regard to headline earnings and earnings per share, that the
transaction was concluded on 1 January 2004; and
2. with regard to net asset value and tangible net asset value per share, that
the transaction was concluded on 31 December 2004.
3. that the proceeds were applied to reduce debt and an interest saving of
R368,000 was made.
Director`s opinion
The directors are confident that the new franchise agreement and the disposal
will, after the appropriate restructuring, reduce the company`s overheads and
simplify the business which will be to the long term benefit of the company and
result in an increase in profitability.
Withdrawal of cautionary announcement
Shareholders are advised that a circular containing details of the disposal will
be posted to them shortly and caution is no longer required when dealing in
their Hercol shares.
7 September 2005
Cape Town
Sponsor
Sasfin Corporate Finance
a division of Sasfin Bank Limited
Date: 07/09/2005 04:01:07 PM
Produced by the JSE SENS Department
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
