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CVS
CVS
Corvus - Abridged, reviewed financial and further cautionary
CORVUS CAPITAL (SA) HOLDINGS LIMITED
(Formerly Zeltis Holdings Limited)
(Registration No:1946/0021141/06)
("Corvus")
JSE CODE: CVS - ISIN CODE: ZAE000075842
Abridged, reviewed financial results for the year ended 30 June 2006 and
further cautionary
CONSOLIDATED, ABRIDEGED BALANCE SHEET at 30 June 2006
GROUP
2006 2005
R"000 R"000
REVIEWED AUDITED
ASSETS
Non-current assets - 298
Fixed assets - 298
Intangible assets - -
Investments - -
Current assets 250 10 501
Accounts receivable 250 6 221
Cash & cash equivalents - 4 280
Total assets 250 10 799
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital 4 102 4 102
Share premium 114 973 114 973
Accumulated losses (119 923) (123 519)
Ordinary shareholders" interest (848) (4 444)
Outside shareholders" interest - 7
Preference share capital - -
(848) (4 437)
Non-current liabilities
Long term liabilities 729 9 615
Current liabilities 369 5 621
Accounts payable 369 5 266
Provisions - 355
Total equity and liabilities 250 10 799
INCOME STATEMENT for the year ended 30 June 2006
GROUP
2006 2005
R"000 R"000
REVIEWED AUDITED
Turnover 49 624 113 983
Gross income 3 370 9 745
Operating (loss)/profit on ordinary (2 112)
activities before investment income
2 614
Gain on disposal of investments 6 914 -
Investment income 8
2 708
Finance costs (1 220) (1 436)
Profit before taxation 3 590
3 886
Taxation - -
Profit before taxation 3 590
3 886
Outside shareholders" share of 7
profits -
Net profit for the period 3 597
attributable to ordinary 3 886
shareholders
Adjustment for headline earnings: (5 944) (8 066)
Gain on investments (6 914) (3 104)
Profit on liquidation of group - (10 333)
companies
Goodwill amortised and impaired - 5 000
Investments and loan written off - 500
Profit on sale of tangible assets - (129)
Expenses relating to corporate 970 -
action
Headline loss for the period 2 347 (4 180)
EARNINGS PER SHARE
Weighted number of ordinary shares 82,044 82,044
in issue (`000)
Profit per share (cents) 4.38 4.74
Adjustment for:
Gain on investments (8.43) (3.78)
Profit on liquidation of group - (12.59)
companies
Goodwill amortised and impaired - 6.09
Investments and loan written off - 0.61
Profit on sale of tangible assets - (0.16)
Expenses relating to corporate 1.18 -
action
(2.86)
Headline loss per share (5.09)
STATEMENTS OF CHANGES IN EQUITY for the year ended 30 June 2005
Group Ordinary Share Preference Outsiders Accumu-
share premium share share of lated Total
capital capital reserves losses
R"000 R"000 R"000 R"000 R"000 R"000
Balance at 4 102 114 973 39 7 (127 405) (8 284)
30 June 2004
(Audited)
Net loss for 3 886 3 886
the year
Write-off of (39) (39)
preference
share
capital
Balance at 4 102 114 973 - 7 (123 519) (4 437)
30 June 2005
(Audited)
Net profit 3 597 3 597
for the year
Outside (7) (7)
shareholders
interest
Balance at 4 102 114 973 - - (119 922) (847)
30 June 2006
(Reviewed)
CASH FLOW STATEMENTS for the year ended 30 June 2006
GROUP
2006 2005
R"000 R"000
REVIEWED AUDITED
Cash flow from operating activities
Cash (used in) / generated from (695) 3 751
operations
Net profit before tax 3 597 3 886
Adjusted for non-operating cash flow
items:
Depreciation and profit and loss on 60 5 194
disposals
Investment income (8) (2 708)
Finance costs 1 220 1 436
Gain on disposal of investments (6 914) -
Adjusted for working capital items:
Accounts receivable (3 389) 7 306
Accounts payable 3 779 (10 439)
Provisions 955 (924)
Investment income 8 104
Finance costs (1 220) (1 436)
Net cash (outflow)/ inflow from (1 912) 2 419
operations
Cash flow from investing activities
Replacement of fixed assets - (119)
Proceeds from disposal of fixed - 377
assets
Proceeds from disposal of investments (39) 3 688
Cash effect of sale of subsidiaries (992) -
Net cash (outflow)/inflow from (1 337)
investing activities 3 946
Cash flow from financing activities
Loans raised 705 -
Loans repaid (2 041) (4 002)
Net cash outflow from financing (1 337)
activities (4 002)
Net change in cash and cash (4 280)
equivalents 2 363
Cash and cash equivalents at 4 280
beginning of year 1 917
Cash and cash equivalents at end of -
year 4 280
Directors Statement
We are pleased to announce the reviewed preliminary results of Corvus
Capital (SA) Holdings ("Corvus" or the "Company") Limited for the year
ended 30 June 2006.
Change in Investment Strategy
On 24 November 2005, Corvus Capital Inc. ("CCI") acquired 50.1% of the
issued share capital in Zeltis Holdings Limited. CCI acquired a further
0.2% as a result of a mandatory offer to all shareholders taking its
aggregate holding to 50.3%.
Following completion of the mandatory offer by CCI the Company changed its
name from Zeltis Holdings Limited to Corvus and a new board was elected at
the general meeting held on 18 January 2006. Mr JP Moore and Mr PJ Williams
were appointed as executive directors and Mr MS Phalatse (Chairman), Mr ER
Middlemis and Mr MBVC Hirschfield were appointed as non-executive
directors. Mr CHD Field and Mr CD Payne resigned from the board, while Mr
RN McLeod has remained on the board to assist the new board in this
transition period.
The new board decided that the existing business of Corvus had become non-
core to its future strategy and it is in this regard that Corvus entered
into an agreement for the sale of all its subsidiaries to Mr RN McLeod with
an effective date of 23 January 2006. The agreement has a resolutive
condition that the sale of the subsidiaries requires shareholder approval
at a general meeting of the Company. There is an irrevocable undertaking by
CCI to vote in favour of the disposal and as such, the results for the year
comprise the results of Corvus"s subsidiaries for the period from 01 July
2005 to 23 January 2006.
A circular containing the detailed information in relation to the disposal
and requesting such approval will be sent to shareholders in due course.
Initial Investment Focus
Following the approval of the disposal Corvus will be a clearly focused
investment holding company which intends to initially focus on making
investments in the resources and commodities sectors. The board believes
that increased investor interest in the resources and commodities sectors
driven in part by the recent high returns achieved in certain areas of the
metals and energy markets has resulted in a climate which is favourable for
making investments in or acquiring entities operating in the resources and
commodities sectors.
It is the board"s intention to pursue investments in (either as principal,
joint venture or other partnership arrangements) or acquire companies
(private or public) which would have some or all of the following
characteristics:
- operations with established producing assets for which
there is either an international market or a buoyant
local market for the underlying resource or commodity;
- operations with early stage assets which can be brought
to the production stage in a relatively short time period
for which there is either is an international market or a
buoyant local market for the underlying resource or
commodity;
- entities which are involved in the brokerage or trading
of resources and/or commodities; and
- entities whose trading strategy or operations compliment
the strategy and business of the CCI group in relation to
the resources and commodities sectors.
Corvus is currently investigating several investment opportunities in the
resources sector, all of which are still in the early due diligence phase.
Should any of these opportunities prove sufficiently attractive to Corvus,
formal negotiations will commence to acquire those assets and full details
will be published in the press and in circulars to shareholders at the
appropriate time.
Summary of Financial Performance over the Period
June 2006 June 2005 Movement
Turnover R 49,624 R 113,983 (56%)
Net profit after tax R 3,597 R 3,886 (7)%
for the year
Headline loss for the R (2,347) R (4,180) 44%
year
Earnings per share 4.38 cents 4,74 cents (7)%
Headline losses per (2.86) cents (5,09) cents 44%
share
Funding requirements
CCI currently provides Corvus with an interest free loan facility of R1.5
million, R0.7 million of which has been drawn down as at 30 June 2006, to
provide Corvus with funds to be utilised for its daily operating costs and
funds with which to investigate potential investment opportunities.
CCI continues to be supportive of the Company and the Board is currently in
discussions with its advisers, CCI and the JSE as to how to best structure
a further injection of capital. The additional capital will be used to
provide the Company with sufficient funds to continue investigating
potential investment opportunities, including the funding of extensive due
diligence investigations and related acquisition costs. The Company will
issue an announcement in due course when such financing is finalised.
Preparation of the annual financial statements
The annual financial statements have been prepared in accordance with
International Financial Reporting Statements. The accounting policies used
are consistent with those used in prior years.
Reviewed accounts
The accounts have been reviewed by the auditors, MMJ Accountants and
Auditors Inc., who have issued an unqualified review opinion. A copy of the
opinion is available form the company"s registered offices at Unit 4, Phase
III, Wedgefiled Office Park, 17 Muswell Road South, Bryanston,
Johannesburg.
Further cautionary announcement
Shareholders are referred to the announcement made on 25 January 2006 and
the further cautionary announcements made on 14 March 2006, 4 May 2006, 21
June 2006 and 14 August 2006 and 02 October 2006. As the salient dates have
still not yet been announced, shareholders are advised to continue to
exercise caution when dealing in their Corvus shares on the JSE until a
further announcement is made.
For an on behalf of the board
Julian Moore
Chief Executive Officer
Rodney McLeod
Executive Director
Sponsor
Imara Corporate Finance South Africa (Pty) Ltd
27 October 2006
Date: 27/10/2006 04:01:42 PM Produced by the JSE SENS Department
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