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ADW
ADW
ADW - African Dawn - Audited Results for the year ended 28 February 2007
African Dawn Capital Limited
(Incorporated in the Republic of South Africa)
(Registration Number: 1998/020520/06)
Share Code: ADW
ISIN Code: ZAE000060703
Audited Results for the year ended 28 February 2007
Audited 28 Audited 28 Feb
Feb 2007 2006
BALANCE SHEETS R`000 R`000
ASSETS
Non current assets 33 533 33 610
Fixed Assets 4 225 2 029
Available-for-sale - 516
investments
Goodwill 10 897 4 518
Financial receivables 18 411 26 547
Current assets 101 134 18 010
Trade and other receivables 16 152 5 492
Financial receivables 80 016 11 184
Cash and cash equivalents 4 967 1 334
Total assets 134 667 51 620
EQUITY AND LIABILITIES
Shareholders Funds 102 688 27 983
Share capital and premium 74 261 27 107
Accumulated profit 28 427 876
Non current liabilities 12 567 15 943
Borrowings 10 951 14 963
Lease liability 1 616 980
Current liabilities 19 412 7 694
Trade and other payables 1 485 3 003
Taxation 4 454 594
Borrowings 12 664 3 444
Lease liability 809 653
Total equity and liabilities 134 667 51 620
NAV per share (cents) 70,34 30,51
Shares in issue at year end 145 997 91 730
Audited Audited
28 Feb 2007 28 Feb 2006
INCOME STATEMENTS R`000 R`000
Revenue 52 375 19 038
Operating expenses (17 959) (11 551)
Profit before finance costs 34 416 7 487
and depreciation
Finance costs (2 800) (581)
Depreciation (487) (272)
Profit before taxation 31 129 6 634
Taxation (3 578) (596)
Net profit for the period 27 551 6 038
Headline earnings 27 551 6 038
Basic and diluted earnings 21,2 9,4
per share (cents)
Weighted average number of 129 806 64 465
shares
Headline earnings per share 21,2 9,4
(cents)
Audited Audited
28 Feb 2007 28 Feb 2006
CASH FLOW STATEMENTS R`000 R`000
Cash flows from operating 20 223 8 076
activities
Cash flows from investing (32 747) (4 825)
activities
Capital raised by way of 44 334 13 722
share issue
Increase in financial (68 535) (12 611)
receivables
Increase in other assets (8 546) (5 936)
Cash flows from financing 5 527 (3 761)
activities
Net movement in cash and cash 3 662 (510)
equivalents
Cash and cash equivalents at 1 334 1 844
beginning of year
Cash and cash equivalents at 4 966 1 334
end of year
STATEMENT OF CHANGES IN EQUITY
Share Share Acc
Capital Premium Profit Total
R`000 R`000 R`000 R`000
Balance as at 28 563 12,823 (5,162) 8,223
February 2005
Net profit for the - - 6,038 6,038
period
Issue of share 355 13,367 - 13,722
capital
Balance as at 28 918 26 190 876 27 983
February 2006
Net profit for the - - 27 551 27 551
period
Issue of share 542 46 611 - 47 153
capital
Balance as at 28 1 460 72 801 28 427 102 688
February 2007
COMMENTS
The Board of Directors are pleased to present
the audited financial results of the Group
for the year ended 28 February 2007.
NATURE OF THE BUSINESS
African Dawn is a specialist financial services
group focusing on the following five
operational areas -
- Short term secured financing activities
- Home improvement finance
- Financial literacy education
- Marketing of financial products on behalf of
major banks
- Pam Golding Estate Agencies
HIGHLIGHTS
February February
% Increase 2007 2006
Headline Earnings + 356% R27,6m R6,0m
Headline Earnings + 125% 21,2 c 9,4 c
Per Share
Net Asset Value +248% 70,34 c 30,51 c
Per Share
Total Assets +161% R134,7 m R51,6 m
BUSINESS REVIEW AND PROSPECTS
African Dawn has continued its strong earnings
growth of the last few years.
Financial literacy education and short term
secured financing activities having exceeded
expectations, in the past year. This is
illustrated in graphs 1 and 3.
FINANCIAL REVIEW
The African Dawn Group has realised earnings in
the amount of R27,6 million for the year
ended 28 February 2007.
During the financial year the group has
broadened its capital base by raising R44,3
million through share issues for cash.
An increase in borrowings will enable the group
to continue to enhance the effect of gearing,
thereby improving its return on equity.
The analysis below, details the contribution of
the two main divisions within the group;
Financial
Financing literacy
Total activities education
Revenue 52 375 40 097 12 278
Net profit for the 27 551 21 213 6 338
period
Net Asset Value 102 688 95 182 7 506
Financial receivables (short and long term)
increased by R60,7 million, as a result
mainly of increased activity in short term
secured financing.
The effective tax rate in the current year, is
reduced to 11% as a result of assessed losses
utilised.
Trade and other receivables increased primarily
due to financial literacy education
initiatives to selected employer groups,
which is also reflected in the increase in
revenue in this division.
Goodwill increased as a result of the second
payment in shares and cash to the
shareholders of Bhenka Financial Services
(Pty) Ltd, on the fulfillment by Bhenka of
their agreed performance undertakings. This
acquisition was concluded during the previous
financial year.
PROSPECTS
Financial literacy education - Due to the
changes implemented by the National Credit
Regulator, with effect from 1 June 2007,
grantors of credit are obliged to educate its
clients, the directors expect the demand to
increase for its products.
Short term secured financing activities - The
group have secured niche clientele as well as
sufficient financing to significantly
increase the advances book.
Housing related activities - Sales in the R300
000 to R700 000 housing market are growing at
40% per year, with the growth therefore
expected to be significant in this division.
INTERNATIONAL FINANCIAL REPORTING STANDARDS AND
COMPANIES ACT REQUIREMENTS
The audited abridged financial statements were
prepared in compliance with International
Financial Reporting Standards (IFRS) as well
as the Companies Act.
CORPORATE GOVERNANCE
The group subscribes to the principles of, and
implements where possible, the
recommendations of the King II Code on
Corporate Governance.
DIVIDENDS
The group will continue to retain and utilise
cash generated within the business, to
maximise returns to the shareholders. The
Board reviews the dividend policy annually.
AUDIT OPINION
The annual financial statements have been
audited by Van Dyk & Associates. The
auditors` unqualified audit report is
available for inspection at the company`s
registered office.
For and on behalf of the Board
JM van Tonder
Chief Executive Officer
CM van Nieuwkerk
Financial Director
20 March 2007
Registered office Transfer secretaries
1st Floor Computershare Investor Services 2004 (Pty) Limited
Dunkeld Place 8th Floor
12 North Road 11 Diagonal Street
Dunkeld West Johannesburg
Directors
SW de Bruyn*, LI Mophatlane* (Chairman), C
Odams, MN Ramasehla, CM van Nieuwkerk, JM van
Tonder (CEO), C de W Vivier*
* Non-executive
Date: 20/03/2007 12:25:01 Produced by the JSE SENS Department.
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