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ABO
ABO
Absolute - Reviewed results, issue of new order mining rights and renewal
of cautionary announcement
ABSOLUTE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1986/004649/06)
Share code: ABO & ISIN: ZAE000062998
("Absolute" or "the company")
Reviewed results for the year period ended 30 June 2006, issue of new
order mining rights and renewal of cautionary announcement
GROUP BALANCE SHEETS
Reviewed Unaudited Audited
30 Jun 31 Dec 30 Jun
ASSETS 2006 2005 2005
R"000 R"000 R"000
Non-current assets 16 693 21 714 22 166
Property, equipment and 1 101 5 305 6 212
vehicle
Mineral rights 9 545 9 901 9 504
Goodwill 6 047 6 047 6 047
Deferred taxation - 461 403
Current assets 6 613 9 882 9 709
Cash and cash equivalents 22 40 18
Inventories 6 678 8 204 7 532
Short term receivables 104 139 199
Trade and other receivables 2 809 1 499 1 960
Assets held for sale 3 780 - -
Total assets 30 086 31 596 31 875
EQUITY AND LIABILITIES
Capital and reserves 10 812 12 685 12 953
Non-current liabilities 2 122 5 087 5 622
Interest bearing long-term 2 107 5 087 5 622
liabilities
Deferred taxation 15 - -
Current liabilities 13 801 13 824 13 300
Short-term loans 101 464 339
Bank overdraft 4 262 3 884 4 458
Trade and other payables 9 433 8 720 8 218
Provisions - 471 -
Taxation payable 5 285 285
Liabilities associated with 3 351 - -
held for sale assets
Total equity and liabilities 30 086 31 596 31 875
Net asset per share
information 739 708 739 708 739 708
Number of shares in issue
(`000)
Net asset value per share 1.46 1.71 1.74
(cents)
Tangible net asset value per (0.64) (0.44) (0.35)
share (cents)
Fully diluted number of 739 708 739 708 739 708
shares (`000)
Diluted net asset value per 1.46 1.71 1.74
share (cents)
Diluted tangible net asset (0.64) (0.44) (0.35)
value per share (cents)
GROUP INCOME STATEMENTS
Reviewed Unaudited Audited
Year Six Year
ended months ended
30 Jun ended 30 Jun
2006 31 Dec 2005
R"000 2005 R"000
R"000
Revenue 28 126 15 823 32 345
Cost of sales and operating 28 635 15 526 33 512
expenses
Net operating (loss)/profit (509) 297 (1 167)
(Loss)/Profit on sale of (14) 5 -
fixed assets
Recovery of losses on 39 - -
disposal of subsidiary
Over provision for guarantee - - 3 853
Fair value adjustment of (320) - (455)
investment property
(Loss)/profit from operations (804) 302 2 231
Finance charges (919) (479) (1 042)
(Loss)/profit before taxation (1 723) (177) 1 189
Taxation (418) 15 338
Net (loss)/profit for the (2 141) (162) 1 527
period
Reconciliation of headline
earnings/(loss)
Net (loss)/profit for the (2 141) (162) 1 527
period
Loss/(profit) on disposal of 14 (5) 12
fixed assets
Recovery of losses on (39) - -
disposal of subsidiary
Impairment in value of 320 - 455
investment property
Reversal of provision for - - (3 853)
guarantee
Headline loss (1 846) (167) (1 859)
Earnings per share
information
Weighted average shares in 739 708 739 708 677 608
issue (`000)
(Loss)/earnings per share for (0.29) (0.02) 0.23
period (cents)
Headline loss per share for (0.25) (0.02) (0.27)
period (cents)
Fully diluted weighted 739 708 739 708 628 597
average shares in issue
(`000)
Diluted (loss)/earnings per (0.29) (0.02) 0.24
share for period (cents)
Diluted headline loss per (0.25) (0.02) (0.30)
share for period (cents)
ABRIDGED CASH FLOW STATEMENTS
Reviewed Unaudited Audited
30 Jun 31 Dec 30 Jun
2006 2005 2005
R"000 R"000 R"000
Net cash inflow/(outflow) (24) 489 (1 201)
from operating activities
Net cash inflow/(outflow) 492 457 (786)
from investing activities
Net cash from financing (268) (350) 1 226
activities
Net increase/(decrease) in 200 596 (761)
cash and cash equivalents
Cash and cash equivalents - (4 440) (4 440) (3 679)
beginning of period
Cash and cash equivalents at (4240) (3844) (4 440)
end of period
STATEMENT OF CHANGES IN EQUITY
Share Share Shares Accumu- Total
capital premium to be lated
R"000 R"000 issued losses R"000
R"000 R"000
Balance at 30 June 6 286 69 096 -- (74 003) 1 379
2004 as previously
stated
Restatement for IFRS -- -- -- 46 46
adjustments
Restated at 30 June 6 286 69 096 -- (73 957) 1 425
2004
Restated net profit -- -- -- 1 527 1 527
for the year
Issue of shares for 1 000 8 000 -- -- 9 000
the acquisition of
51% of Absolute
Coleccion
Issue of shares for 111 889 -- -- 1 000
cash
Balance at 30 June 7 397 77 985 -- (72 429) 12 952
2005
Net loss for the -- -- -- (2 141) (2 141)
year
Balance at 30 June 7 397 77 985 -- (74 571) (10 811)
2006
COMMENTARY
The directors present the reviewed results for the year ended 30 June
2006. The accounting policies adopted for purposes of this report
comply, and have been consistently applied in all material respects, with
South African Statements of GAAP, International Financial Reporting
Standards ("IFRS") IAS 34 - Interim Financial Reporting and the JSE
Listings Requirements. The group has adopted and applied IFRS for the
first time for the year ending 30 June 2006 with the transition date
being 01 July 2004. However, where possible, the group took a decision
to early adopt certain accounting standards in terms of transitional
provisions within GAAP, in order to align the company"s reporting with
IFRS, within the financial statements for the year ended 30 June 2005.
Accordingly there are no major adjustments to the group"s opening IFRS
balance sheet at the transition date and the comparative results for the
reported period other than for IAS 16.
The results have been reviewed by the company"s auditors, TAG Inc. and
their unqualified review report is available for inspection at the
registered address of the company.
RESULTS
The Absolute Group has as a whole stabilised over the reporting period
with headline loss marginally better than the prior year. Profit from
the retail operations declined slightly over the prior period, evident
from a softening in the top-end retail market as well as increased
working capital requirements following the weakening of the Rand to the
Euro in the latter half of the year. Tighter fiscal controls and the
results of the rationalisation exercise concluded last year have
contributed to lower operating expenses, which benefit is expected to
flow through into the forthcoming year, although cost of imported product
is expected to rise. Cash generated from operations has also
demonstrated a turnaround over the prior year following the restructuring
and tightening of controls.
The company has accepted an offer for the disposal of Stand 315, the
property held in Pretoria, for an amount of R4.2 million. The offer is
subject to certain conditions being fulfilled by 31 October 2006,
including the approval of financing and the application for the
subdivision of the property, which application has already been
submitted. A deposit of R150 000 has been received in trust. The value
of the property has been impaired to net realisable value after
accounting for commissions and other selling expenses and has been
recategorised on the balance sheet to non-current assets held for sale.
The bond over the property has similarly been categorised as a liability
relating to non-current assets held for sale, in anticipation of the sale
proceeding.
During the year, The Absolute Coleccion (Pty) Ltd, a 100% held subsidiary
and the holding company of Lubtalk Investments (Pty) Ltd ("Lubtalk"), the
diamond quartzite mining company, disposed of 10% of its shares and
claims in Lubtalk to Richtersveld Ontwikkeling Maatskappy Beperk, a
company representing over 2,700 residents of the Richtersveld Community
in Namaqualand, for an amount of R90,169.47. The transaction results in
the total BEE shareholding of Lubtalk Investments exceeding 26%, as
required by the Mineral and Petroleum Resources Development Act.
Shareholders are referred to subsequent event below regarding the issue
of the mining licence after year end.
SUBSEQUENT EVENTS
Issue of Mining Rights
The directors are pleased to announce that the issue of the mineral
rights for the quartzite deposit at Lekkersing in the Northern Cape has
been granted on 16 October 2006. In addition, the company has also just
received the mining rights for the mining of its picture stone deposit.
Intended Rights Offer
As a result of the above, the company will now seek to raise funding for
its mining operations and capital commitments and thus will be
undertaking a rights offer in this regard. Details of the quantum and
terms of the rights offer will be announced in due course.
MEDIA LIAISON
The company advises that Ms Zakhali Tshabalala acts as media liaison and
shareholder relations officer for the group. Interested parties are
encouraged to contact her via e-mail on zakhali@absoluteholdings.com for
any assistance.
DIVIDENDS PAID AND RECOMMENDED
No dividends were paid or declared during the accounting period under
review and none are recommended at this stage (2005: nil).
SHARE CAPITAL
There have been no shares issues during the period under review.
CHANGES TO THE BOARD OF DIRECTORS
As previously announced, MR AM Janse van Vuuren resigned from the board
on 28 October 2005. The company has not appointed a new Managing
Director pending the issue of its mining licences, which position will
now be reviewed.
CHANGE IN AUDITORS
Subsequent to the year end, the company has appointed TAG Inc as the
holding company auditor. TAG Inc is the existing auditor of the groups"
subsidiaries, through which the main operations are conducted.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
Shareholders are advised that the company is still in negotiations and
should continue to exercise caution when dealing in their securities
until such time as an announcement is made.
By order of the board
M Diale AM Sher
18 October 2006
Company Secretary and Registered Office
Arcay Client Support (Pty) Ltd (Registration number 1998/025284/07)
Arcay House, Number 3 Anerley Road, Parktown, Johannesburg (PO Box
62397, Marshalltown, 2107)
Directors
MK Diale* Chairman, AM Sher* Deputy Chairman, JJ Serfontein*, GP
Sequeira
(* Non-executive)
Sponsor Transfer Office
Arcay Corporate Services Computershare Investor Services 2004
(Pty) Ltd
Date: 18/10/2006 11:34:14 AM Produced by the JSE SENS Department
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