|
CND
CND
Conduit - Unaudited interim results and general issue of shares for cash
Conduit Capital Limited
Incorporated in the Republic of South Africa
(Registration number: 1998/017351/06)
Share code: CND & ISIN: ZAE000073128
("Conduit Capital" or "the group")
Unaudited interim results for the six months ended 31 August 2006 and
general issue of shares for cash
CONSOLIDATED INCOME STATEMENT
Notes Unaudited Unaudited Audited
six months six months year
ended 31 ended 31 ended 28
Aug 2006 Aug 2005 Feb 2006
R"000 R"000 R"000
Revenue 13 445 3 300 6 377
Investment income 2 367 593 2 447
Other income 80 53 168
15 892 3 946 8 992
Depreciation 3.3 (575) (146) (307)
Employee costs (6 558) (1 531) (4 380)
Impairment of financial 3.5 (1) (87) (938)
assets
Operating leases (855) (493) (905)
Interest paid (44) (9) (82)
Other operating expenses (4 794) (2 790) (4 029)
Share of associates" losses (13) (68) (152)
3 052 (1 178) (1 801)
Impairment of goodwill 3.2 - - (22 219)
Profit (Loss) before 3 052 (1 178) (24 020)
taxation
Taxation (1 440) 1 595 2 072
Profit (Loss) for the 1 612 417 (21 948)
period
Attributable to:
Equity holders of the 443 417 (22 083)
parent
Minority interest 1 169 - 135
Profit (Loss) for the 1 612 417 (21 948)
period
Reconciliation of headline
earnings:
Equity holders of the 443 417 (22 083)
parent"s share
Loss on disposal of fixed - 6 6
assets
Impairment of goodwill 3.2 - - 22 219
Headline earnings 443 423 142
Number of shares in issue ("000) 100 649 81 882 94 782
(net of treasury shares)
Weighted average number of ("000) 96 567 81 882 85 901
shares
Fully diluted number of ("000) 131 721 81 882 131 721
shares
Earnings (Loss) per share (cents) 0,46 0,51 (25,71)
Headline earnings (loss) (cents) 0,46 0,52 0,17
per share
Fully diluted earnings (cents) 0,34 0,51 (25,71)
(loss) per share
Fully diluted headline (cents) 0,34 0,52 0,11
earnings per share
SEGMENTAL ANALYSIS OF EARNINGS
Trading E- Credit Head Total
and commerce recovery office R"000
invest- R"000 & call R"000
ments centre
R"000 R"000
Six months ended 31 August 2006
Revenue - 1 434 11 710 301 13 445
Investment income 2 080 20 25 242 2 367
Profit (Loss) 1 598 720 2 838 (2 104) 3 052
before taxation
Profit (Loss) after 1 048 720 1 948 (2 104) 1 612
taxation
Profit (Loss) 1 048 720 779 (2 104) 443
attributable to
ordinary
shareholders
Headline earnings 1 048 720 779 (2 104) 443
(loss)
Six months ended 31 August 2005
Revenue - 784 - 2 516 3 300
Investment income 321 12 - 260 593
Loss before (71) (442) - (665) (1 178)
taxation
Profit (Loss) after (71) (442) - 930 417
taxation
Profit (Loss) (71) (442) - 930 417
attributable to
ordinary
shareholders
Headline earnings (71) (442) - 936 423
(loss)
Year ended 28
February 2006
Revenue - 1 810 1 614 2 953 6 377
Investment income 2 018 24 - 405 2 447
Operating profit 1 220 (110) 320 (3 231) (1 801)
(loss)
Loss before (17 353) (290) (3 146) (3 231) (24 020)
taxation
Loss after taxation (17 071) (290) (3 241) (1 346) (21 948)
Loss attributable (17 071) (290) (3 376) (1 346) (22 083)
to ordinary
shareholders
Headline earnings 1 502 (110) 90 (1 340) 142
(loss)
CONSOLIDATED BALANCE SHEET
Notes Unaudited Unaudited 31 Audited 28
31 Aug 2006 Aug 2005 Feb 2006
R"000 R"000 R"000
ASSETS
Non-current assets 19 517 1 888 16 703
- Property, plant and 3.3 1 493 329 1 315
equipment
- Goodwill 3.2 10 523 - 10 419
- Other intangible 281 206 381
assets
- Deferred tax 65 - 569
- Investments in 146 - 181
associates
- Investments held at 3.4 7 009 1 353 3 838
fair value
Current assets 40 019 8 448 12 928
- Investments held at 3.4 1 319 2 030 1 194
fair value
- Loans receivable 595 838 404
- Trade and other 6 516 2 280 6 064
receivables
- Short term deposits 31 589 3 300 5 266
and cash
Total assets 59 536 10 336 29 631
EQUITY AND LIABILITIES
Total equity 23 362 6 331 21 805
- Share capital 1 006 819 948
- Share premium 13 726 3 529 9 182
- (Accumulated (20 074) 1 983 (20 517)
deficit) Retained
earnings
- Shares to be issued 25 822 - 30 479
to vendors
20 480 6 331 20 092
- Minority interest 2 882 - 1 713
Non-current
liabilities
- Vendors for cash 1 767 - 1 767
Current liabilities 34 407 4 005 6 059
- Trade and other 33 386 3 884 4 624
payables
- Short term 500 - 500
borrowings
- Current tax payable 515 - 910
- Bank overdraft 6 121 25
Total equity and 59 536 10 336 29 631
liabilities
Net asset value per (cents) 15,55 7,73 15,25
share
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited year
six months six months ended 28 Feb
ended 31 Aug ended 31 Aug 2006
2006 2005 R"000
R"000 R"000
Net cash flows from operating 2 443 752 (2 706)
activities
Net cash flows from investing (2 046) 690 (893)
activities
Net cash flows from financing 25 945 - 5 782
activities
Total cash movement for the 26 342 1 442 2 183
period
Cash at the beginning of the 5 241 1 737 1 737
period
Cash acquired - - 1 321
Total cash at the end of the 31 583 3 179 5 241
period
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Non- Retained Shares Minority Total
capital premium distribu- earnings to be interest R"000
R"000 R"000 table (Accumu- issued R"000
reserves lated to
R"000 deficit) vendors
R"000 R"000
Balance at 1 819 3 529 - 1 566 - - 5 914
March 2005,
as restated
As 819 4 956 7 250 (6 977) - - 6 048
previously
stated
- (1 427) (7 250) 8 677 - - -
Transitional
reclassify-
cations
IFRS - - - (134) - - (134)
adjustments
Net income - - - 417 - - 417
for the
period, as
restated
As - - - 452 - - 452
previously
stated
IFRS - - - (35) - - (35)
adjustments
Balance at 31 819 3 529 - 1 983 - - 6 331
August 2005,
as restated
Proceeds from 129 5 713 - - - - 5 842
issue of
shares
Costs of - (60) - - - - (60)
issue of
shares
Acquisition - - - - 30 479 1 578 32 057
of interest
in
subsidiaries
Net loss for - - - (22 500) - 135 (22
the period 365)
Balance at 28 948 9 182 - (20 517) 30 479 1 713 21 805
February 2006
Issue of 58 4 599 - - (4 657) - -
shares to
vendors
Costs of - (55) - - - - (55)
issue of
shares
Net income - - - 443 - 1 169 1 612
for the
period
Balance at 31 1 006 13 726 - (20 074) 25 822 2 882 23 362
August 2006
NOTES TO THE CONSOLIDATED INTERIM RESULTS
1. Basis of preparation
The group reports its financial results in accordance with
International Financial Reporting Standards ("IFRS"). These interim
results have therefore been prepared using accounting policies that
comply with IFRS and with IAS 34: Interim Reporting.
2. Review of operations
2.1 The consolidated results that precede these notes contain the
group"s interim financial results for the six months to 31 August
2006. It should be noted that no earnings from CICL Investment
Holdings (Proprietary) Limited ("CICL") have been consolidated
into the group"s earnings during the period under review.
2.2 The period under review was distinguished by:
2.2.1 the successful conclusion of negotiations to acquire in
excess of 75% of the ordinary shares in CICL ("the CICL
transaction"), the holding company of a diversified
insurer and risk services group;
2.2.2 in the context of the CICL transaction, raising the
capital required to:
2.2.2.1 discharge the cash portion of the purchase
consideration for CICL; and
2.2.2.2 refinance the stake of CICL"s Black Economic
Empowerment partner, Black Ginger 92 (Proprietary)
Limited, in CICL.
R65 million was raised by way of the private
placement of 65 million ordinary shares in Conduit
Capital at 100 cents each ("the private
placement");
2.2.3 obtaining all regulatory and shareholder approvals
(other than FSB approval, which has since been
obtained) required to implement the CICL transaction
and the private placement; and
2.2.4 the solid performance of Anthony Richards & Associates
(Proprietary) Limited ("ARA") and the expansion of
ARA"s call centre activities into outbound sales,
including the sale of insurance products on behalf of
CICL.
3. Effect of adoption of IFRS
In terms of IFRS 1: First Time Adoption of International Financial
Reporting Standards, the group has restated its opening consolidated
balance sheet and reserves as at 1 March 2004 ("the transition date"),
which have in turn resulted in changes to the consolidated balance
sheet and reserves as at 28 February 2005.
The group has elected to utilise the following transitional provisions
on the adoption of IFRS:
- the cumulative translation differences on foreign operations have
been deemed to be zero at the transition date;
- negative goodwill arising from business combinations before the
transition date has been recognised; and
- corresponding adjustments have been made to retained earnings at
the transition date for the aforementioned changes.
Following the aforementioned changes, the portion of the treasury
shares that had previously been set off against non-distributable
reserves has been set off against share premium.
The following changes in accounting policies were made on the adoption
of IFRS and comparative figures have been adjusted accordingly:
3.1 IAS 1: Presentation of Financial Statements
Certain balance sheet and income statement classifications have
been amended after consideration of IAS 1.
3.2 IFRS 3: Business Combinations, IAS 36: Impairment of Assets and
IAS 38: Intangible Assets
Business combinations after the transition date and the related
goodwill arising on the difference between the cost of the
acquisition and the group"s share of the identifiable assets and
liabilities of the acquiree at the date of acquisition, have been
accounted for in terms of IFRS 3, IAS 36 and IAS 38. In terms of
these standards, goodwill is tested annually for impairment and
is carried at cost less accumulated impairment losses. Goodwill
arising prior to the transition date required no adjustment as it
had been fully impaired at 28 February 2005. Negative goodwill at
the transition date has been reclassified as set out above.
3.3 IAS 16: Property, plant and equipment
The useful lives and residual values of property, plant and
equipment have been reassessed in terms of IAS 16 and the related
carrying values and depreciation charges have been restated
accordingly.
3.4 IAS 39: Financial Instruments - Recognition and Measurement
Investments that were previously classified as available for sale
and held for trading have been classified as held at fair value
through profit and loss. As the fair value adjustments on
available for sale and held for trading investments had
previously been recognised in income, this reclassification did
not result in any adjustment to income.
3.5 Other adjustments
IAS 21: The Effects of Changes in Foreign Exchange Rates
In terms of IAS 21, foreign operations that are integral to the
group must be measured in the functional currency of the group
and the effects of any changes in foreign exchange rates must
therefore be recognised in income. These changes were previously
charged directly to equity and the appropriate adjustments have
therefore been made.
Impairment of financial assets
In terms of IAS 39, where there is evidence that loans or
receivables should be impaired, an amount equivalent to the
difference between the asset"s carrying amount and the net
present value of the estimated future cash flows associated with
the asset must be debited against the income statement.
Reconciliations and descriptions of the effect of the transition
from GAAP to IFRS on the group"s assets, liabilities, equity and
profitability for the year ended 28 February 2005 and for the six
months ended 31 August 2005, are provided below:
RECONCILIATION OF ASSETS, LIABILITIES AND EQUITY
Assets R"000 Liabilities Equity
R"000 R"000
28 February 2005 / 1 March
2005
As previously reported 8 566 2 234 6 332
Adjusted for:
- Impairment of loans (339) - (339)
receivable
8 227 2 234 5 993
IFRS restatements:
- IAS 16: Property, plant 55 - 55
and equipment
As initially reported under 8 282 2 234 6 048
IFRS
Adjusted for:
Additional IFRS restatements
- IAS 16: Property, plant (134) - (134)
and equipment
As finally reported under 8 148 2 234 5 914
IFRS
31 August 2005
As initially reported under 10 505 4 005 6 500
IFRS
Adjusted for:
Additional IFRS restatements:
- IAS 16: Property, plant (169) - (169)
and equipment
As finally reported under 10 336 4 005 6 331
IFRS
FINAL IFRS IMPACT ON PROFIT ATTRIBUTABLE TO SHAREHOLDERS
Restated 31
Aug 2005
R"000
Profit attributable to equity holders of the parent
As initially reported under 452
IFRS
Adjusted for:
Additional IFRS restatements:
- IAS 16: Property, plant and equipment (35)
As finally reported under 417
IFRS
4. Contingent liabilities
4.1 As previously reported, a dormant subsidiary of the group
received an assessment from the South African Revenue Services
("SARS"), reflecting an amount payable of R3,63 million relating
to the alleged late payment of 1999 income tax. The group
continues to seek information regarding the outstanding amount
from SARS and the group"s previous management. Records currently
in the group"s possession do not reflect any amounts payable to
SARS.
4.2 In the matter of Uthingo Management (Proprietary) Limited
("Uthingo") and the National Lotteries Board ("the NLB") on one
hand and On Line Lottery Services (Proprietary) Limited
("Lottofun") on the other, in relation to the business of
Lottofun and the use of the word "Lotto", judgement has been
given in favour of Uthingo and the NLB. Whilst Lottofun has
applied for leave to appeal, neither the appeal nor its outcome
will have a material impact on the group"s earnings going
forward.
5. Commitments
At the balance sheet dates, the group had outstanding commitments
under non-cancellable operating leases, which fall due as follows:
31 Aug 2006 31 Aug 2005 28 Feb 2006
R"000 R"000 R"000
- Within one year 736 646 997
- After more than one year 1 241 8 1 732
1 977 654 2 729
6. Post balance sheet events
6.1 The CICL transaction and the private placement of shares for cash
On 10 October 2006, final regulatory approval was obtained for
the acquisition by the group of a significant controlling stake
(in excess of 75%) in CICL. The CICL transaction therefore became
unconditional on that date and it was duly implemented on 16
October 2006, together with the private placement of shares (see
paragraph 3.2.2.1), in accordance with the terms of the various
agreements.
6.2 Change of year-end
On 1 November 2006, Conduit Capital"s board of directors passed a
resolution to change the group"s financial year-end from the last
day of February to 31 August of each year. This will result in
the group publishing:
6.2.1 interim results for the twelve month period ending on
28 February 2007; and
6.2.2 annual financial statements for the eighteen month
period ending on 31 August 2007.
6.3 General issue of shares for cash
Shareholders are referred to the section below that relates to
the general issue of shares for cash.
7. Conclusion
The directors and management of Conduit Capital are satisfied with the
progress made to date. Having integrated ARA into the group and
successfully implemented the acquisition of CICL, the group is well
poised to realise its strategic objectives and deliver significant
profits in the year ahead.
For and on behalf of the Board
Jason D Druian Lourens E Louw
Chief Executive Officer Financial Director
Johannesburg
27 November 2006
GENERAL ISSUE OF SHARES FOR CASH ("the issue")
Under the general authority to issue shares for cash, granted to the
directors at the annual general meeting held on 1 November 2006, Conduit
Capital will on 27 November 2006 raise R19,98 million by issuing 11,1
million shares with a par value of 1 (one) cent each to Investec Securities
(Fund Management) at a price of 180 cents per share, which is not at a
discount to the 30-day weighted average share price.
The table below sets out the pro forma financial effects of the issue on
the historical earnings, headline earnings, net asset value and tangible
net asset value per share, based on the group"s results for the six-month
period ended 31 August 2006. The pro forma financial effects have been
prepared for illustrative purposes only, to provide information on how the
issue may have impacted on the historical results and financial position of
the group. Because of their nature, the pro forma financial effects may not
give a fair reflection of the group"s financial position after the issue,
or the effect of the issue on the group"s future earnings.
The calculation of the pro forma financial effects is the responsibility of
the directors.
Six months Six months Change
historical pro forma after
before the after the the
issue issue issue
(cents) (cents) (%)
Earnings per share 0,46 (1) 0,98 (2) 113,04
Headline earnings per share 0,46 (1) 0,98 (2) 113,04
Net asset value per share 15,55 (3) 28,25 (4) 81,67
Tangible net asset value per 7,35 (3) 20,68 (4) 181,36
share
Notes
1 Earnings per share and headline earnings per share, as set out in the
"Six months historical before the issue" column, are based on the
income statement of Conduit Capital for the six months ended 31 August
2006 and a weighted average number of 96 567 394 shares in issue.
2 Earnings per share and headline earnings per share, as set out in the
"Six months pro forma after the issue" column, are based on the income
statement of Conduit Capital for the six months ended 31 August 2006
and a weighted average number of 107 667 394 shares in issue and
assuming that:
2.1 the issue was effective on 1 March 2006;
2.2 the proceeds of the issue were invested in an interest bearing
account at an after tax rate of 6,25% per annum for the six
months ended 31 August 2006; and
2.3 transaction costs of R20 000 were incurred.
3 Net asset value and net tangible asset value, as set out in the "Six
months historical before the issue" column, are based on the balance
sheet of Conduit Capital at 31 August 2006 and 131 720 555 shares in
issue.
4 Net asset value and net tangible asset value per share, as set out in
the "Six months pro forma after the issue" column, are based on the
balance sheet of Conduit Capital at 31 August 2006, 142 820 555 shares
in issue and assuming that:
4.1 the issue became effective on 31 August 2006; and
4.2 share issue costs of R100 000 were written off against share
premium.
Directors:
Executive directors: Jason D Druian (CEO), Paul Diamond, Lourens E Louw,
Stanley D Shane
Non-executive directors: Reginald S Berkowitz, Scott M Campbell, Megan
Kruger
Company secretaries:
Gruzzet Secretarial and Trust Company (Proprietary) Limited
2nd Floor, 3 Sturdee Avenue, Rosebank, 2196
Registered address:
1st Floor, 3 Melrose Square
Melrose Arch, 2076
PO Box 97, Melrose Arch, 2076
Telephone: (011) 684-1055/6/7
Facsimile: (011) 684-1058
Transfer secretaries:
Computershare Investor Services 2004 (Proprietary) Limited
(Registration number: 2004/003647/07)
Ground Floor, 70 Marshall Street
Johannesburg, 2001
Auditors:
Grant Thornton
Chartered Accountants (SA)
Sponsor:
Merchant Sponsors (Proprietary) Limited
Date: 27/11/2006 08:15:31 AM Produced by the JSE SENS Department
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
