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ELE - ElementOne - Unaudited Condensed Financial Results For The Half Year Ended
30 September 2009, Termination Of Listing Of ElementOne And Dividend Declaration
ELEMENTONE LIMITED
Incorporated in the Republic of South Africa
Registration number: 1889/000352/06
Share code: ELE
ISIN code: ZAE000115887
Unaudited condensed financial results for the half year ended 30 September 2009,
termination of listing of ElementOne and dividend declaration
Statement of comprehensive income
for the periods Note Unaudited Reviewed Audited
6 Months 6 Months year
ended ended ended
30 Sept 30 Sept 31 March
2009 2008 2009
R`000 R`000 R`000
Revenue from investments 2 5 101 17 375 110 506
Operating expenses (2 050) (4 151) (6 049)
Profit from operations 3 051 13 224 104 457
Exceptional items - (387 847) (343 085)
Fair value adjustments - (417 753) (372 991)
of investments
Profit on sale of investments - 29 906 29 906
Profit (loss) before taxation 3 051 (374 623) (238 628)
Taxation 3 (935) 50 995 3 970
Profit (loss) for the period 4 2 116 (323 628) (234 658)
Attributable earnings (loss) per
ordinary share (cents)
Basic and diluted 2 (312) (226)
Number of ordinary shares in
issue (`000)
At beginning and end of period 103 821 103 821 103 821
Weighted average for period 103 821 103 821 103 821
(diluted)
Statement of financial position
Unaudited Reviewed Audited
30 Sept 30 Sept 31 March
as at Note 2009 2008 2009
R`000 R`000 R`000
ASSETS
Non-current assets
Investments 5 1 790 469 1 745 706 1790 469
Current assets 110 174 40 918 126 514
Prepayments 180 187 147
Bank balances, deposits and cash 109 994 40 731 126 367
Total assets 1 900 643 1 786 624 1 916 983
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 10 382 10 382 10 382
Retained earnings 1 767 771 1 676 685 1 765 655
Total equity 1 778 153 1 687 067 1 776 037
Non-current liabilities
Deferred taxation liability 107 739 63 363 107 739
Current liabilities 14 751 36 194 33 207
Payables and other liabilities 14 468 16 012 15 077
Taxation liabilities 283 20 182 18 130
1 900 643 1 786 624 1 916 983
Statement of cash flows
Unaudited Reviewed Audited
6 Months 6 Months year
for the periods ended ended ended
30 Sept 30 Sept 31 March
2009 2008 2009
R`000 R`000 R`000
OPERATING ACTIVITIES
Cash flows from operations 2 409 13 260 103 596
Taxation paid (18 782) (302 465) (307 165)
Net cash flows from (16 373) (289 205) (203 569)
operating activities
INVESTING ACTIVITIES
Proceeds on disposal of investments - 164 371 164 371
Net cash flows from investing activities - 164 371 164 371
Net decrease in cash and (16 373) (124 834) (39 198)
cash equivalents
Cash and cash equivalents 126 367 165 565 165 565
at beginning of period
Cash and cash equivalents 109 994 40 731 126 367
at end of period
Statement of changes in equity
Share Retained Total
capital earnings R`000
R`000 R`000
Balance at 30 September 2008 10 382 1 676 685 1 687 067
Profit for the period 88 970 88 970
Balance at 31 March 2009 10 382 1 765 655 1 776 037
Profit for the period 2 116 2 116
Balance at 30 September 2009 10 382 1 767 771 1 778 153
Notes
1. Presentation of financial statements
These unaudited condensed financial statements are presented in South
African Rand since that is the functional and presentation currency of
the company.
These unaudited condensed financial statements have been prepared
using accounting policies consistent with those of the previous
periods and are compliant with International Financial Reporting
Standards (IFRS), IAS 34 Interim Financial Reporting, the JSE
Limited`s Listing Requirements and the South African Companies Act.
Unaudited Reviewed Audited
6 Months 6 Months year
for the periods ended ended ended
30 Sept 30 Sept 31 March
2009 2008 2009
R`000 R`000 R`000
2. Revenue from investments
Interest received - bank deposits 5 101 15 751 22 311
Dividends received - 1 576 88 147
Sundry income - 48 48
5 101 17 375 110 506
3. Taxation
Current taxation
South African normal taxation (935) (3 303) (5 952)
Capital gains taxation - (16 630) (16 630)
Deferred taxation
Current year - reversal on fair value - 70 928 26 552
adjustments
(935) 50 995 3 970
4. Earnings (loss) per ordinary share
The calculation of basic and diluted
attributable and headline earnings
(loss) per ordinary share is based on
the following attributable and
headline earnings (losses) and on
103 821 159 ordinary shares in issue
throughout the three periods:
Attributable earnings (loss) 2 116 (323 628) (234 658)
Headline earnings (loss) 2 116 (323 628) (234 658)
Attributable earnings (loss)
per share
Basic and diluted cents 2 (312) (226)
per share
Headline earnings (loss)
per share
Basic and diluted cents 2 (312) (226)
per share
5. Investments
Non-current investments
Listed investments - at market value 960 784 936 764 960 784
Unlisted investments - at directors` 829 685 808 942 829 685
valuation
Directors` valuation of investments 1 790 469 1 745 706 1 790 469
Valuation
The investments (direct shareholding) in the listed Caxton are valued
at the ruling quoted market price at each reporting date.
The investments in the indirect shareholdings in Caxton have been
valued by applying a 20% discount to the see-through market value of
the shareholding in the listed Caxton, which is consistent with the
discount the directors applied to the directors` valuation in prior
periods.
6. Capital expenditure commitments, contingent liabilities and other
commitments
The company does not have any capital commitments, guarantees or other
contingent liabilities.
7. Financial results
The condensed financial results for the period ending 30 September
2009 have not been audited or reviewed by the company`s auditors.
COMMENTARY
BACKGROUND
The company`s major investment remains its direct and indirect interest in the
listed Caxton and CTP Publishers and Printers Group ("CAT").
Taking into account the 40 million CAT shares held by Caxton Share Scheme (Pty)
Ltd and the 24,2 million treasury shares held by CAT (as per their financial
statements at 30 June 2008), ElementOne`s effective direct and indirect interest
in CAT is now 39,3%.
FINANCIAL RESULTS
The company`s net after-tax profit for the six months ended 30 September 2009
was R2,1 million, compared to a loss of R323,6 million in the same period of the
previous year.
The company`s revenue for the period was R5,1 million (2008: R17,4 million),
which comprised solely interest, as dividends from the direct and indirect stake
in CAT are receivable only in the second half of the financial year. This
revenue is considerably less when compared to that of the corresponding period
in the prior year, when the company had substantial interest-earning cash
resources, mainly from the profitable disposal of its MTN shares. However, a
large portion of those cash resources was utilised on 30 September 2008 in order
to settle the capital gains tax liability that had resulted from this disposal.
With administration costs being well controlled at R2,0 million (2008:
R4.2 million), the profit from operations for the period was R3,1 million (2008:
R13,2 million).
No exceptional items needed to be accounted for in the current period, as there
was no change in the CAT share price between that prevailing at 31 March 2009
and at 30 September 2009. In the corresponding period in the prior year, the
change in the prevailing CAT share price necessitated a negative fair value
adjustment of R417,7 million. This was offset to a certain extent by the profit
of R29,9 million realised on the sale of the MTN shares.
Accordingly, the profit before taxation but after exceptional items remained at
R3,1 million (2008: loss of R374,6 million), which after taxation reduced to
R2,1 million (2008: loss of R323,6 million).
The company`s investment remains its stake in CAT, which based on the market
price of a CAT share at 30 September 2009 of R12,00 and continuing to discount
the indirect holding by 20%, is reflected in the balance sheet at a value of R1
790,5 million. At the period end bank balances and deposits were R110,0 million.
Subsequent to the reporting period, dividends totalling R66,5 million were
received, of which R32,0 million accrued from CAT and R34,5 million from Afmed
(Pty) Ltd and Caxton Ltd.
CURRENT POSITION AND DEVELOPMENTS
The company is not represented on the boards of directors of CAT, Afmed or
Caxton Ltd and does not form part of the Caxton controlling consortium. Its
indirect holdings in CAT are historic in origin and date from the formation and
early history of the Caxton group in the 1970s and 1980s when the Argus group of
media and printing companies, from which the company ultimately heralds, was
party to transactions involving the then Caxton group and its founders.
As has been reported in previous communications to shareholders, attempts by the
company`s board ("the board") to obtain copies of documentation, including
minute books and agreements that may relate to the founding of its indirect and
even direct interests in CAT, have been unproductive. Further attempts during
this reporting period have to date been unsuccessful. The company is continuing
in its endeavours to obtain information that may have a bearing on the valuation
of the company`s direct and indirect investments in CAT.
During 2005, CAT implemented a share incentive scheme through a separate
company, Caxton Share Scheme (Pty) Ltd, using a group company, namely Caxton Ltd
as an intermediary. The beneficiaries of this scheme may, under certain terms
and conditions, sell their entitlement of "B" ordinary shares in CSS to Caxton
Ltd up to 25 January 2015, at which date the scheme terminates. Thereafter the
R400 million preference shares issued by CSS to CAT to fund the scheme would
have to be redeemed. As ElementOne has an effective 47% direct and indirect
interest in Caxton Ltd, the compulsory purchase of the entitlements to the "B"
shares and the redemption of the preference shares place a considerable
potential financial obligation on ElementOne to make its pro-rata contribution
to Caxton Ltd to purchase these entitlements and to enable CSS to redeem the
preference shares. The extent of this financial obligation is dependent to a
large degree on the market value of the underlying CAT shares held by CSS in CAT
at the time when these rights are exercised. Failure to contribute towards these
funds, if required, could result in the dilution of the company`s interest in
CAT.
As indicated below, the board has declared a dividend amounting to R0,75 per
share. The progress and outcomes of the company`s present actions will determine
whether future dividends may be declared.
The board`s objective remains its intention to extract maximum value for
shareholders.
TERMINATION OF THE LISTING OF ELEMENTONE ON THE JSE LIMITED
Shareholders are referred to the announcement dated 15 September 2009 which set
out information regarding the suspension of the listing of ElementOne with
effect from 1 October 2009. Following the aforementioned announcement and for
purposes of compliance with Strate, the following salient dates apply for the
termination of ElementOne`s listing on the JSE Limited:
Last day to trade Thursday, 31 December 2009
Record date Friday, 8 January 2010
Termination of listing Monday, 11 January 2010
Share certificates may not be dematerialised after Thursday, 31 December 2009.
It is the intention of ElementOne to continue as an unlisted company and as a
result of the termination of the company`s listing on the JSE Limited from 11
January 2010, the board has decided to implement an "over-the-counter market" in
the company`s shares. This arrangement will afford shareholders in the company
the opportunity to transact in their shares in a regulated and efficient manner.
Shareholders will be informed of the process and expected time-table for final
implementation of this arrangement, in a separate announcement as soon as
possible.
DECLARATION OF CASH DIVIDEND
Notice is hereby given that a dividend of 75 cents per share has been declared
in respect of the ordinary shares of 10 cents each.
Dates of importance:
Last date to trade in order to Thursday, 31 December 2009
participate in the dividend
Shares trade ex dividend Monday, 4 January 2010
Record date Friday, 8 January 2010
Payment date Monday, 11 January 2010
Share certificates may not be dematerialised after Thursday, 31 December 2009.
Francois van der Merwe Colin Brayshaw
Director Director
For and on behalf of the board
Johannesburg
10 December 2009
Directors: CB Brayshaw, WS Moutloatse, FJ van der Merwe, DJJ Vlok
Company secretary: Probity Business Services (Proprietary) Limited
+27 11 327 7146
Address: 3rd Floor, The Mall Offices, 11 Cradock Avenue, Rosebank, Johannesburg
Investor enquiries: Danie Vlok +27 82 551 4614
Sponsor
Nedbank Capital
Date: 10/12/2009 17:30:03 Supplied by www.sharenet.co.za
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