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Spectrum Shipping - Reviewed interim results and further cautionary
Spectrum Shipping Limited
(Registration number 1998/018118/06)
(Share code: SUM & ISIN number: ZAE000037446)
REVIEWED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006AND FURTHER
CAUTIONARY
INCOME STATEMENT
REVIEWED REVIEWED REVIEWED
6 months ended 6 months ended 6 months ended
30 June 2006 30 June 2006 30 June 2005
Group Company Group
R"000 R"000 R"000
Turnover 16 609 16 413 14 778
Gross billings 295 512 270 807 225 803
Cost of billings (278 903) (254 394) (211 025)
Operating income 2 936 3 063 2 606
Depreciation (473) (473) (464)
Net finance costs (1 602) (1 514) (1 282)
Profit before taxation 861 1 076 860
Income tax expense (336) (322) (258)
Profit for the period 525 754 602
Shares in issue (000"s) 834 000 900 000 850 000
Earnings per share
(cents) 0.1 0.1 0.1
Headline earnings
per share (cents) 0.1 0.1 0.1
Diluted earnings
per share (cents) 0.1 0.1 0.1
Reconciliation
between earnings and
headline earnings
Profit for the period 525 754 602
Profit on sale of
fixed assets (38) (38) -
Taxation effects 11 11 -
Headline profit after
taxation 498 727 602
REVIEWED AUDITED AUDITED
6 months ended Year ended Year ended
30 June 2005 31 Dec 2005 31 Dec 2005
Company Group Company
R"000 R"000 R"000
Turnover 14 778 31 009 30 979
Gross billings 225 803 552 436 545 453
Cost of billings (211 025) (521 427) (514 474)
Operating income 2 606 6 629 6 620
Depreciation (464) (927) (927)
Net finance costs (1 282) (3 532) (3 524)
Profit before taxation 860 2 170 2 169
Income tax expense (258) (787) (787)
Profit for the period 602 1 383 1 382
Shares in issue (000"s) 850 000 849 000 900 000
Earnings per share (cents) 0.1 0.2 0.2
Headline earnings
per share (cents) 0.1 0.2 0.1
Diluted earnings
per share (cents) 0.1 0.2 0.2
Reconciliation
between earnings and
headline earnings
Profit for the period 602 1 383 1 382
Profit on sale of fixed assets - (54) (54)
Taxation effects - 16 16
Headline profit after taxation 602 1 345 1 344
BALANCE SHEET
REVIEWED REVIEWED REVIEWED
6 months ended 6 months ended 6 months ended
30 June 2006 30 June 2006 30 June 2005
Group Company Group
R"000 R"000 R"000
ASSETS
Non-current assets 4 707 9 451 5 343
Property, plant and
equipment 1 793 1 793 1 868
Investments - 2 3
Intangible assets 265 265 265
Loans receivable 293 5 035 -
Deferred taxation 2 356 2 356 3 207
Current assets 111 174 109 388 97 036
Trade receivables 101 561 99 875 86 187
Cash and cash
equivalents 9 613 9 513 10 849
Total assets 115 881 118 839 102 379
EQUITY AND LIABILITIES
Capital and reserves 30 620 35 162 30 362
Share capital and
premium 106 747 111 061 107 795
Accumulated loss (76 127) (75 899) (77 433)
Current liabilities 85 261 83 677 72 017
Provisions 2 795 2 795 2 807
Trade and other
payables 26 206 26 315 26 300
Current portion of
borrowing - - 10
Current tax payable 15 - -
Short-term borrowings 56 245 54 567 42 900
Total equity and
liabilities 115 881 118 839 102 379
REVIEWED AUDITED AUDITED
6 months ended Year ended Year ended
30 June 2005 31 Dec 2005 31 Dec 2005
Company Group Company
R"000 R"000 R"000
ASSETS
Non-current assets 5 343 5 724 9 094
Property, plant and equipment 1 868 1 759 1 759
Investments 3 - 2
Intangible assets 265 265 265
Loans receivable - 1 022 4 390
Deferred taxation 3 207 2 678 2 678
Current assets 97 036 145 369 140 708
Trade receivables 86 187 125 219 120 570
Cash and cash equivalents 10 849 20 150 20 138
Total assets 102 379 151 093 149 802
EQUITY AND LIABILITIES
Capital and reserves 30 362 31 039 34 408
Share capital and premium 107 795 107 691 111 061
Accumulated loss (77 433) (76 652) (76 653)
Current liabilities 72 017 120 054 115 394
Provisions 2 807 2 670 2 670
Trade and other payables 26 300 36 468 34 334
Current portion of borrowing 10 - -
Current tax payable - - -
Short-term borrowings 42 900 80 916 78 390
Total equity and liabilities 102 379 151 093 149 802
CASH FLOW STATEMENT
REVIEWED REVIEWED REVIEWED
6 months ended 6 months ended 6 months ended
30 June 2006 30 June 2006 30 June 2005
Group Company Group
R"000 R"000 R"000
Cash generated by
operations before
working capital changes 3 131 3 258 2 606
Changes in working
capital 13 328 12 194 5 711
Cash generated
from /(utilised in)
operating activities 16 459 15 452 8 317
Net finance costs (1 602) (1 514) (1 282)
Net cash flows from
operating activities 14 857 13 938 7 035
Cash flows from
investing activities (723) (740) (299)
Cash flows from
financing activities - - (15)
Net increase/(decrease)
in cash and cash
equivalents 14 134 13 198 6 721
Cash and cash
equivalents
at the beginning
of the period (60 766) (58 252) (38 772)
Cash and cash
equivalents
at the end
of the period (46 632) (45 054) (32 051)
REVIEWED AUDITED AUDITED
6 months ended Year ended Year ended
30 June 2005 31 Dec 2005 31 Dec
Company Group Company
R"000 R"000 R"000
Cash generated by
operations before
working capital changes 2 606 6 387 6 378
Changes in working capital 5 711 (23 100) (20 587)
Cash generated
from /(utilised in)
operating activities 8 317 (16 713) (14 209)
Net finance costs (1 282) (3 532) (3 524)
Net cash flows from
operating activities 7 035 (20 245) (17 733)
Cash flows from
investing activities (299) (598) (598)
Cash flows from
financing activities (15) (1 151) (1 149)
Net increase/(decrease)
in cash and cash
equivalents 6 721 (21 994) (19 480)
Cash and cash equivalents
at the beginning
of the period (38 772) (38 772) (38 772)
Cash and cash equivalents
at the end
of the period (32 051) (60 766) (58 252)
STATEMENT OF CHANGES IN EQUITY
Share Share Accumulated Total
capital premium loss
R"000 R"000 R"000 R"000
Balance at
01 January
2006
brought
forward 849 106 842 (76 652) 31 039
Profit for
the period - - 525 525
Treasury
shares (15) (929) - (944)
Balance at
30 June
2006 834 105 913 (76 127) 30 620
COMMENTARY
OPERATIONAL REVIEW
The period under review was characterised by continued re-investment in and
implementation of strategic operational activities, which resulted in a
positive contribution by the Group. Whilst the strength of the currency,reduced
export activity levels and the decision to cease trading with clients
with unacceptable risk profiles, continued to contain revenue, earnings
generated from "solutions" (supply chain management logistics) rather than
"product" (customs clearing) showed significant growth. These achievements were
as a result of the ability of the Group to leverage off its infrastructure and
intellectual capital.
In this regard, highlights of the last six months include the opening of an
office in Hong Kong, giving access to mainland China, and the acquisition of
Impson Freight (Pty) Limited (Impson), both of which are expected to bring
stability and profitability to the Group once the merger of the two entities
(Spectrum and Impson) has been completed. The synergies both locally and
internationally will impact favourably on the structures already established by
Spectrum, the benefits of "optimised size", in terms of the consolidated volume
of goods shipped by route will be materially enhanced. This presents an
opportunity for serious growth and development through the new offices in Hong
Kong and Mainland China.
FINANCIAL REVIEW
The increased Group gross billings of 31%, compared to our last interims, have
resulted in an increase in debtors of 18%, which was funded in main by our
bankers. This resulted in a 12% increase in turnover and 13% increase in
operating income, with the increase in net interest paid resulting in a similar
net profit before tax achieved in our prior interims.
The Group balance sheet itself has remained relatively constant when compared
to the last interims, besides a slight slip (4%) in both the quick and asset to
liability ratios. The composition of the balance sheet has therefore remained
in providing the working capital requirements for the increased Group trade.
The 111% increase in net cash flows from Group operating activities comes on
the back of an aggressive debtors collection drive over the last six months,
this has had the effect of increasing our net interest paid by 25% due to the
reduction of interest received on certain overdue accounts.
The results of the Company itself need to be analysed in conjunction with the
subsidiaries, as the Group starts to take shape. This will be particularly
relevant in the next interim statements, where the effect of Impson Freight
(Pty) Limited will start to be felt.
A further 15 million shares were purchased by the Share Trust in January 2006.
OUTLOOK FOR THE NEXT SIX MONTHS
The forthcoming six months will be largely focused on the integration of the
businesses of Spectrum and Impson. This will incorporate exciting re-engineered
organisational structures that will be far more representative of the newly
merged entity and its operational activities. Whilst the Group recognises the
importance of not "interrupting" the continued growth in earnings, it
acknowledges the complexities and potential consequences associated with the
merging of two large organisations. The successful integration of the
capabilities and intellectual capital of both companies will "fast track"
systematic innovation and, most importantly, successful implementation thereof.
ACCOUNTING POLICIES
The condensed interim financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS).
DIRECTORS
Mr FE Lediga resigned as a director on 19 July 2006 and Mr SDM Zungu and Mr DC
Kelly on 15 August 2006. Prince Sifiso Zulu was appointed a non-executive
director and Chairman of the board and Mr Sean Chisholm CA(SA) as Financial
Director on 15 August 2006. Mr MF Impson and Mr TR Mezher, both directors of
Impson Freight (Pty) Limited, were appointed to the board of Spectrum Shipping
Limited on 1 September 2006.
REVIEW
The results have been reviewed by the company"s auditors, a copy of which can
be obtained from the company"s registered office.
TRANSFER TO ALTX
Shareholders were advised in the announcement made on 26 June 2006 that the
company"s listing was transferred from the DCM board to the AltX board of the
JSE from commencement of business on 27 June 2006.
FINANCIAL YEAR END
The financial year end of the company has been changed from 31 December to 28
February in each year. The next accounting period will therefore run for
fourteen months from 1 January 2006 to 28 February 2007.
DIVIDENDS
In line with the company"s policy, no interim dividend has been declared.
FURTHER CAUTIONARY
Further to the cautionary announcement dated 11 August 2006, shareholders are
advised that the company is still involved in discussions which may have a
material effect on the price of the company"s shares. Accordingly, shareholders
are advised to continue exercising caution when dealing in Spectrum shares
until a further announcement is made.
For and on behalf of the board
S Zulu GH Gerber
Chairman Chief Executive Officer
01 September 2006
SPECTRUM SHIPPING LIMITED
(Registration number 1998/018118/06)
(Share code: SUM ISIN number: ZAE000037446)
REGISTERED OFFICE AND POSTAL ADDRESS
5th Floor, MSC House, 54 Winder Street, PO Box 6148, Durban, 4000
TRANSFER SECRETARIES
Computershare Investor Services 2004 (Pty) Limited, 70 Marshall Street,
Marshalltown, 2107
DESIGNATED ADVISOR AUDITORS
River Group Marwick & Company Inc.
EXECUTIVE DIRECTORS
SJ Chisholm (FD), S Donner, GH Gerber (CEO), MF Impson, TR Mezher, R Singh
INDEPENDENT NON-EXECUTIVE DIRECTORS
S Zulu (Chairman), M Tembe
COMPANY SECRETARY
JA Lupton, ACIS
In accordance with the AltX Listings Requirements, shareholders are advised of
the risks of investing in a company listed on the AltX. Shareholders are
advised that the JSE does not guarantee the viability or the success of a
company listed on the AltX. In terms of the JSE Listings Requirements a
designated advisor has to be retained by the company. The designated advisor is
required to, inter alia, attend all board meetings held by the company to
ensure that all JSE Listings Requirements and applicable regulations are
complied with, approve the financial director of the company and guide the
company in a competent, professional and impartial manner. If the company fails
to retain a designated advisor it must make arrangements to appoint a new
designated advisor within 10 business days, failing which the company faces
suspension of trading of its securities. If a designated advisor is not
appointed within 30 days of its suspension the company faces the termination of
its listing without an offer to minority shareholders.
www.spectrum-shipping.co.za
8 September 2006
Date: 08/09/2006 07:54:37 AM Produced by the JSE SENS Department
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