| Mon 13 Nov 2006, 7:46 | | Moneyweb - Unaudited results for the six months en |
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MNY
MNY
Moneyweb - Unaudited results for the six months ended 30 September 2006
MONEYWEB HOLDINGS LIMITED
("Moneyweb" or "the Company")
(Registration No: 1998/025067/06)
ISIN code: ZAE000025409
Share code:MNY
Unaudited results for the six months ended 30 September 2006
- 23% improvement in EBITDA
- Strong growth in core online audience
- Significant improvement in cash flow
- Headline earnings maintained despite loss of major sponsor
- Offshore operations restructured and profitable
- Outsourcing of sales function starting to bear fruit
Moneyweb Holdings Limited
Consolidated Income Statements
Restated
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30-Sep-06 30-Sep-05 31-Mar-06
R"000 R"000 R"000
Revenue 9,538 9,991 19,268
EBITDA 764 620 1,634
Depreciation & amortisation (232) (251) (495)
Income before investment income,
income from associates, fair value
adjustment and impairment 532 369 1,139
Impairment of goodwill 0 (347) (347)
Investment income 9 28 40
Fair Value adjustment of investment 3 0 6
Profit before taxation 545 50 838
Income tax expense (178) (28) (404)
Basic profit for the period 367 22 434
Basic Earnings per share(cents) 0,55 0.03 0.65
Fully diluted earnings per
share (cents) 0,55 0.03 0.64
Headline earnings per
share (cents) 0,54 0.55 1.14
Fully diluted headline earnings
per share (cents) 0,54 0.54 1.14
Reconciliation of headline earnings:
Basic profit for the period 367 22 434
Impairment 0 347 347
Fair value adjustment on investments (3) 0 (6)
Headline earnings 364 369 775
Number of shares (000"s)
- issued closing
(net of treasury shares) 67 000 66 950 66 950
- weighted average 66 992 66 950 67 923
- fully diluted weighted average 67 057 68 962 68 000
Moneyweb Holdings Limited
Consolidated Balance Sheets
Restated
Unaudited Unaudited Audited
30-Sep-06 30-Sep-05 31-Mar-06
R"000 R"000 R"000
ASSETS
Non-current assets
Tangible assets 1,014 1,366 1,168
Other investment 24 3,016 21
Deferred taxation 499 1,049 676
1,537 5,431 1,865
Current assets
Trade and other receivables 2,956 2,908 3,894
Cash and cash equivalents 4,191 1,669 4,077
7,147 4,577 7,971
Total assets 8,683 10,008 9,836
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 5,383 5,380 5,383
Accumulated profit 1,313 916 1,324
Ordinary shareholders interest 6,695 6,296 6,707
Current liabilities
Trade and other payables 1,441 2,815 2,362
Provisions 117 118 216
Deferred revenue 309 695 431
Income tax payable 118 82 118
Shareholders for dividend 2 2 2
1,988 3,712 3,129
Total equity and liabilities 8,683 10,008 9,836
Net asset value per share (cps) 10,0 9,1 10,0
Net tangible asset value per share (cps) 10,0 9,1 10,0
Moneyweb Holdings Limited
Statement of changes in shareholders" equity
Share Capital Share Premium Accumulated Total
Profit
Balance at 1 April 2005 69 6,188 891 7,148
Net profit for the
year ended 31 March 2006 0 0 433 433
Treasury shares
Purchased (2) (872) 0 (874)
Balance at 1 April 2006 67 5,316 1,324 6,707
Net profit for the six
Months ended 30 Sep 2006 0 0 366 366
Ordinary dividend 0 0 (377)
(377)
Balance at 30 September 2006 67 5,316 1,313 6,696
Moneyweb Holdings Limited
Consolidated cash flow statements
Restated
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30-Sep-06 30-Sep-05 31-Mar-06
R"000 R"000 R"000
Cash flows from operating activities
Cash generated by operations 639 670 1,555
Movements in working capital (81) (472)
(2,010)
Cash generated by operating activites 559 198
(455)
Investment income 9 28 40
Normal taxation paid 0 (114)
(22)
Dividend paid (377) 0 0
Net cash flows from operating activities 191 112
(437)
Cash flows from investing activities
To expand operations
Acquisition of tangible assets (79) (104)
(150)
Proceeds on disposal of associate
Company - Classic FM 0 0 3,000
Proceeds on disposal of tangible assets 2 0 0
Net cash flows from investing
activities (77) (104) 2,850
Cash flows from financing activities
Acquisition of treasury shares 0 (877)
(874)
Net cash flows from financing
Activities 0 (877)
(874)
Net movement in cash and cash
equivalents for the period 114 (869) 1,539
Cash and cash equivalents at
beginning of period 4,077 2,538 2,538
Cash and cash equivalents at
end of period 4,191 1,669 4,077
Moneyweb Holdings Limited
Supplementary notes to the adoption of International Financial Reporting
Standards (IFRS)
Reconciliation of equity
31-Mar-05 30-Sep-04 31-Mar-04
Equity previously reported 7,285 19,075 28,067
Equity adjustments
Impairment of goodwill 0 (6,775) 0
Correction of expensing of
operating lease payments (196) (159) (124)
Deferred tax adjustment 59 48 37
Equity reported under IFRS 7,148 12,189 27,980
Reconciliation of profit
Net Loss Previously reported (16,496) (7,743)
(12,539)
Impairment of goodwill 0 (6,775) 0
Correction of expensing of
Operating lease payments (72) (36)
(124)
Deferred tax adjustment 22 11 37
Net Loss reported under IFRS (16,546) (14,543)
(12,626)
COMMENTS
Moneyweb"s EBITDA rose 23% in the six months to end September as the
company reacted timeously to the loss of its biggest advertiser. An
aggressive cost-cutting programme helped EBITDA margins improve from
6,2% to 8%, ensuring that headline earnings were maintained. Basic
earnings rose exponentially.
The 5% decline in revenue reflects a termination by the headline sponsor
of its support on Moneyweb"s major radio programmes. Because of
complaints from other advertisers about being crowded out and the
vulnerability of the company to a single revenue source, no replacement
headline sponsor was sought.
Despite this reverse, which accounted for a fifth of overall income last
year, the modest drop in revenues reflects the offsetting effect of
higher demand for Internet advertising, particularly on the company"s
flagship www.moneyweb.co.za website. The local online audience is
growing strongly, primarily because of South Africa"s belated
introduction of Broadband - fast, always on Internet access.
The initial impact of the Broadband revolution is reflected in the 35%
year-on-year expansion of Moneyweb"s core local audience (home page
unique visitors). This is the fastest rate of growth the company"s
flagship website has enjoyed since its early years.
One-off costs were incurred in the restructuring of www.mineweb.com and
relocating its base to London. But more efficient utilization of the
Moneyweb.co.uk website address and strong growth in revenue from the
partnership with Google.com ensured a positive contribution from
offshore operations.
In September, the company"s advertising sales function was outsourced to
United Stations, a subsidiary of commercial radio station company AME.
The new relationship is off to a good start. Budgets were achieved
within the first two months.
On November 8, the company"s listing was transferred from the main board
of the JSE to AltX, a section of the exchange that better reflects the
attributes and ambitions of the company. Deloitte has been appointed as
the company"s designated advisor.
Prospects:
Moneyweb is budgeting for improved sales and a double digit EBITDA
margin during the second half of the financial year. This is expected to
come from three sources:
Continued growth in Internet advertising revenues as the higher
audiences translate into better online revenues.
A deepening of the partnership with the SA Broadcasting Corporation by
the launch of new relationships with other stations in the national
broadcaster"s portfolio.
A strengthening of the partnership with publishers Caxton through joint
ventures in selected local newspapers.
The company has commissioned Cambrient Internet to design, build and
maintain a customized Content Management System for Moneyweb. The
project is progressing smoothly, with the switch over to the new
platform scheduled for February 1. This new system will provide the
platform from which the company can introduce new content offerings to
take advantage of the rapid growth being enjoyed by the South African
Internet market.
In the 2006 annual report, Moneyweb reported that because of costs
associated with the major projects, it would be targeting a break-even
profit position for the year to end March 2007. In the light of
subsequent developments, the company now expects real growth to be
achieved on the earnings reported last year.
ACCOUNTING POLICIES
The results for the period ended 30 September 2006, and comparative
information, have been prepared in terms of International Financial
Reporting Standards (IFRS). An explanation of how the transition to IFRS
has affected the accounting policies adopted by the group together with
the exemptions of which the group has taken advantage, is provided
below:
IFRS2 - Share-based Payments: the group has elected not to apply IFRS2
to share options granted before 7 November 2002. As all options
outstanding were granted before that date no adjustments have been
necessary.
IFRS3 - Business Combinations: the group has elected to not restate
acquisitions made prior to the date of transition to IFRS. Under the
previous accounting policy goodwill was amortised over a period of 5
years, and the remaining unamortised balance was tested for impairment.
The carrying amount of goodwill at the transition date becomes the
deemed cost for the purposes of IFRS3 and is tested annually for
impairment.
IAS36 - Impairment of Assets: Substantially all of the remaining
unamortised balance of goodwill that arose on acquisition of the
subsidiary was amortised during the year ended 31 March 2005 and the
small remaining balance was at the time considered to have not been
impaired. Therefore the results for the financial year ended 31 March
2005 do not require adjustment and the remaining goodwill has been
impaired during the year ended 31 March 2006.
Other Adjustments
Straight-lining of Operating Lease Payments
Payments made under operating leases are recognised in the income
statement on a straight-line basis over the term of the lease.
Previously operating lease payments were expended on a payments basis,
which was an interpretation that was generally accepted and applied in
South Africa. The new interpretation, with which the group is obliged to
comply, is that operating lease payments must be recognised on a
straight line basis over the term of the lease. The resulting adjustment
has been accounted for in terms of IAS8 with the necessary restatement
of comparative figures.
Dividend
In line with prior year, no interim dividend is declared. This policy
will be reviewed at year end.
Andrew Smith Alec Hogg
Chairman Chief Executive Officer
Rosebank, Johannesburg
10 November 2006
Designated advisor
Deloitte and Touche Sponsor Services (Pty) Ltd
Warning: The listing of ordinary shares in the company is on AltX.
Investors are advised of the risks of investing in a company listed on AltX.
Investors are advised that the JSE does not guarantee the ability or the
success of a company listed on AltX. In terms of the Listings Requirements,
the company is obliged to appoint and retain a Designated Adviser, which is
required to, inter alia, attend all board meetings held by the company to
ensure that all the 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 Adviser, it must make arrangements to appoint a new Designated
Adviser within 10 business days, failing which the company faces suspension
of trading of its securities.
If a Designated Adviser is not appointed within 30 days of its suspension,
the company faces the termination of its listing without the prospect of an
appropriate offer to minority shareholders.
Date: 13/11/2006 07:46:53 AM Produced by the JSE SENS Department
