| Fri 29 Sep 2006, 8:00 | | IFS - Consolidated reviewed results for the year e |
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IND
IND
IFS - Consolidated reviewed results for the year ended 30 June 2006
INDEPENDENT FINANCIAL SERVICES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1950/037061/06)
Share code: IND & ISIN: code: ZAE000025300
("IFS")
CONSOLIDATED REVIEWED RESULTS FOR THE YEAR ENDED 30 JUNE 2006
INCOME STATEMENT
Reviewed Audited
12 months 12 months
30 June 2006 30 June 2005
(R"000) (R"000)
Gross revenue - 2,783
Operating profit before taxation 3,639 9,440
Intangible assets written off - (5,712)
Profit before taxation 3,639 3,728
Taxation (266) (1,574)
Net profit 3,373 2,154
Share in issue (millions) 34 34
Earnings per share (cents) 9.9 6.3
Capital items eliminated (cents) (15.2) (17.1)
Intangible assets written offs (cents) - 16.8
Headline earnings per share (cents) (5.3) 6.0
Dividends per share (cents) 6.3 14.0
CASH FLOW STATEMENT
Cash flows from:
Operating activities (1,449) (9,401)
Investing activities 5,014 14,629
Financing activities (8,991) 154
Change in cash and equivalents (5,426) 5,382
Opening cash and equivalents 7,377 1,995
Closing cash and equivalents 1,951 7,377
STATEMENT OF CHANGES IN EQUITY
Opening balances 11,940 14,164
Net profit 3,373 2,536
Share premium write off (8,619) -
Dividends (2,125) (4,760)
Dividends in specie (2,813) -
Closing balances 1,756 11,940
BALANCE SHEET
Assets
Non-current assets 14 5,028
Tangible 14 1,009
Intangible - 4,019
Current assets 2,008 7,521
Receivables - 64
Taxation 57 80
Cash resources 1,951 7,377
Total assets 2,022 12,549
Equity and liabilities
Capital and reserves 1,756 11,940
Share capital 340 340
Share premium 1 8,620
Non distributable reserve - 372
Retained income 1,415 2,608
Current liabilities 266 609
Payables 141 609
Shareholders for dividend 106 -
Taxation 19 -
Total equity and liabilities 2,022 12,549
Net asset value per share (cents) 5.2 35.1
Net tangible asset value per share 5.2 23.3
(cents)
Accounting policies
The group has adopted International Financial Reporting Standards (IFRS) for
the year ending 30 June 2006.
The financial statements for the year ending 30 June 2006 will be the
group"s first consolidated IFRS compliant financial statements and hence
IFRS 1 first time adoption of IFRS has been applied in preparing this
financial report.
An explanation of how the transition of IFRS has affect the previously
reported financial position and performance of the group is provided below.
The company"s auditors, PKF (Jhb) Inc., have reviewed these annual financial
statements and their unqualified review report is available for inspection
at the company"s registered office.
Significant changes to the group"s accounting policies as a result of the
adoption of IFRS
Goodwill
All business combinations are accounted for by applying the "purchase
method". Goodwill represents amounts arising on acquisition of subsidiaries.
In respect of business combinations that have occurred since the IFRS
transition date, 1 July 2004, goodwill represents the difference between the
cost of the acquisition and the fair value of the net identifiable assets
and the fair value of the net identifiable assets and contingent liabilities
acquired.
The group has made an election in terms of IFRS 1 that IFRS 3 will only be
applied from 1 July 2004. In respect of acquisitions prior to this date,
goodwill is included as at 1 March 2004 at the amount previously recorded
under SA GAAP. The classification and the accounting treatment of business
combinations that occurred prior to 1 March 2004 has not been reconsidered
in preparing the group"s IFRS balance sheet at 1 July 2004.
From 1 July 2004, goodwill is stated at cost less accumulated impairment
losses. Goodwill is allocated to cash-generating units and is no longer
amortised but tested annually for impairment.
Previously, goodwill arising on each acquisition was amortised over its
useful life on a straight-line basis and subjected to annual impairment
testing
Comments
Introduction
During the year ended 30 June 2006, IFS successfully completed its stated
intention of finalizing the disposals of its operating entities and
declaring a cash dividend, a special dividend and a dividend in specie of
the shares in IFS Insurance Brokers (Proprietary) Limited. This strategy
resulted in IFS becoming a cash shell.
The majority shareholders subsequently sold their shares in IFS to a
consortium led by Des Rosen of DNR Capital, resulting in the consortium
controlling approximately 78% of the issued shares in IFS.
It was announced in the press on 17 January 2006 that in terms of the
circular dated 20 December 2005, an offer to IFS shareholders by the
consortium at a price of 8.82c per share to acquire all of the ordinary
shares in IFS that it did not already own, was accepted in respect of
113,362 shares representing 0,3% of the issued share capital of IFS.
Subsequent to the offer, the consortium owns 26,753,362 shares in IFS
representing 79% of the issued shares in IFS.
In February 2006 the board of directors of IFS was reconstituted. All of the
previous directors resigned and D Castle, I Dlamini, S Medalie, D N Rosen, P
Vallet and S Zungu were appointed.
Post Balance Sheet Events - Associated with the change in control
It was announced in the press on 22 June 2006 that IFS through its wholly
owned subsidiary Fluxrab Investments No. 135 (Proprietary) Limited had
entered into an agreement subject to the fulfillment of certain conditions
precedent to acquire the shares in and shareholders" claims against Allcare
Administrators (Proprietary) Limited. Furthermore, IFS would offer for
subscription by way of renounceable rights offer to IFS shareholders and /
or their renouncees a total of 51 million new IFS shares at a subscription
price of 8,82c per rights share, in the ratio of 1,5 rights shares for every
share held by shareholders.
The rights offer was intended to raise working capital for the company and
to introduce Zungu Investments Company (Proprietary) Limited ("ZICO") as a
key strategic empowerment shareholder. The consortium would have renounced
25 million shares in favour
of ZICO.
On 18 September 2006, IFS announced that certain of the conditions precedent
relating to the Allcare transaction were not fulfilled by their due date for
fulfillment and accordingly the Allcare transaction would not be implemented
and the company would not be proceeding with the rights offer at this time.
Prospects
IFS remains a cash shell for the time being and your directors are currently
exploring acquisition opportunities to enhance value for all shareholders.
For and on behalf of the board.
Phillip Vallet Des Rosen
Non Executive Chairman Chief Executive Officer
Bryanston
29 September 2006
Directors
D Castle*, I Dlamini*, S Medalie*, D N Rosen, P Vallet*, S Zungu*
* Non- Executive
Registered Office
168 Eccleston Crescent Bryanston 2125
Company Secretary
J Jones
Transfer Secretaries
Link Market Services South Africa (Pty) Ltd
5th Floor, 11 Diagonal Street, Johannesburg
P.O Box 4844, Johannesburg,2000)
Sponsor
Java Capital (Proprietary) Limited
Date: 29/09/2006 08:00:07 AM Produced by the JSE SENS Department
