Sharenet Sites 
Sharenet Sites
AUDITED GROUP RESULTS ARE ANNOUNCED AS FOLLOWS: RESULTS FOR THE 15 MONTHS ENDED 30 SEPTEMBER 1997 CULLINAN HOLDINGS LIMITED REG NO 01/01808/06 GROUP INCOME STATEMENTS
15 MONTHS 12 MONTHS
1997 1996
R000 R000
TURNOVER 317 588 342 346
OPERATING (LOSS)/INCOME - CONTINUING (6 511) (6 222)
- DISCONTINUED (17 591) 13 923
EXCEPTIONAL ITEMS (59 231) (63)
INTEREST PAID 15 532 8 679
LOSS BEFORE TAXATION (98 865) (1 041)
TAXATION 29 360
NET LOSS AFTER TAXATION (98 894) (1 401)
PREFERENCE DIVIDENDS 27 1 200
NET ATTRIBUTABLE LOSS (98 921) (2 601) ORDINARY SHARES (000'S)
- IN ISSUE 620 526 14 578 - USED TO CALCULATE LOSS AND HEADLINE LOSS
PER ORDINARY SHARE (WEIGHTED AVERAGE) 32 486 14 561
LOSS PER ORDINARY SHARE (CENTS) 304,5 17,9
HEADLINE LOSS PER ORDINARY SHARE (CENTS) 122,2 17,4 EXPLANATORY NOTES RECONCILIATION BETWEEN NET ATTRIBUTABLE LOSS AND HEADLINE LOSS:
NET ATTRIBUTABLE LOSS 98 921 2 601
EXCEPTIONAL ITEMS (59 231) (63)
HEADLINE LOSS 39 690 2 538 GROUP BALANCE SHEETS
30 SEPTEMBER 30 JUNE
1997 1996
R000 R000
FIXED ASSETS 31 683 70 084
INVESTMENTS AND LOANS 180 2 848
CURRENT ASSETS 160 448 147 567
TOTAL ASSETS 192 311 220 499
CURRENT LIABILITIES (91 078) (89 859)
NET TRADING ASSETS 101 233 130 640 FINANCED BY:
ORDINARY SHAREHOLDERS' FUNDS 82 616 54 500
PREFERENCE SHAREHOLDERS' FUNDS 1 050 1 050
OUTSIDE SHAREHOLDERS' INTEREST 1 070 -
INTEREST-BEARING LIABILITIES 16 497 75 090
101 233 130 640 FINANCIAL STATISTICS
GEARING (%) 21,0 139,7
CURRENT RATIO 1,5 0,9
NET ASSET VALUE PER SHARE (CENTS) 13,3 374 SUMMARISED GROUP CASH FLOW STATEMENTS
15 MONTHS 12 MONTHS
1997 1996
R000 R000
OPERATING CASH FLOW (21 184) 15 722
MOVEMENT IN WORKING CAPITAL 8 822 (11 660)
INTEREST PAID (15 532) (8 679)
TAXATION PAID (61) (560)
DIVIDENDS PAID (27) (1 200)
CASH UTILISED BY OPERATING ACTIVITIES (27 982) (6 377) CASH GENERATED FROM/(UTILISED IN)
INVESTING ACTIVITIES 4 119 (6 634) CASH FLOWS FROM FINANCING ACTIVITIES
- CASH FLOWS RESULTING FROM SHARE ISSUE 40 025 105
- LONG-TERM LIABILITIES REPAID (10) (330) - PROCEEDS ON DISPOSAL OF FIXED ASSETS IN
DISCONTINUED OPERATIONS 42 678 -
- PREFERENCE SHARES REDEEMED - (15 000) NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS 58 830 (28 236) COMMENTS
THESE RESULTS FOR THE 15 MONTH PERIOD ENDED 30 SEPTEMBER 1997 INCLUDE THE ACQUISITION OF MIDMACOR INDUSTRIES LIMITED, EFFECTIVE FROM 30 SEPTEMBER 1997. THEREFORE, THE BALANCE SHEET INCLUDES THE MIDMACOR GROUP, WHILE THE INCOME STATEMENT DOES NOT INCLUDE ANY RESULTS FROM MIDMACOR. HIGHLIGHTS
THE CULLINAN GROUP WENT THROUGH A MAJOR TRANSFORMATION DURING THE PERIOD UNDER REVIEW, AND THE HIGHLIGHTS ARE:
- A MAJOR PROGRAMME OF BUSINESS UNIT RESTRUCTURING AND DISPOSALS. THIS PROCESS HAS NOW EFFECTIVELY BEEN COMPLETED AND THIS HAS RESULTED IN EXCEPTIONAL LOSSES. - ALL POTENTIAL LOSSES HAVE BEEN FULLY PROVIDED FOR.
- ALL REMAINING BUSINESS UNITS ARE NOW PROFITABLE.
- THE ACQUISITION OF MIDMACOR INDUSTRIES LIMITED, EFFECTIVE 30 SEPTEMBER 1997. - A POSITIVE CASH FLOW OF R58,8 MILLION. - GEARING REDUCED FROM 139% TO 21%. OPERATIONAL REVIEW
THE PERIOD COMMENCED WITH THE COMPANY BEING BURDENED BY EXCESSIVE GEARING (139,7%), AND THEREFORE A PROGRAMME OF DISPOSALS AND RESTRUCTURING WAS EMBARKED UPON BY THE PREVIOUS BOARD OF DIRECTORS. THIS PROGRAMME WAS CONTINUED BY THE NEW MANAGEMENT TEAM THAT TOOK OVER IN JULY 1997, AND HAS NOW EFFECTIVELY BEEN COMPLETED. THE ONE-OFF COST OF THIS DISMANTLING AND RESTRUCTURING PROCESS HAS BEEN SUBSTANTIAL, AND IS REFLECTED IN THE FINANCIAL RESULTS INCLUDED IN THIS ANNOUNCEMENT. HOWEVER, THIS RESTRUCTURING HAS ACHIEVED THE DESIRED RESULT OF REDUCING GROUP BORROWINGS FROM R75,1 MILLION IN JUNE 1996 TO R16,5 MILLION IN SEPTEMBER 1997. THE PERIOD'S RESULTS REFLECT THE CONSEQUENCES OF THE FOLLOWING BUSINESSES EITHER BEING SOLD OR CLOSED DURING THE YEAR:
- CULLINAN BRICKWORKS SOLD TO COROBRICK (AUGUST 1997)
- CLAYVILLE BRICK SOLD TO PARKIN MINE ENTERPRISES (OCTOBER 1997) - BODY & WHITE (A DIVISION OF CPE) SOLD TO ABB (MAY 1997) - CULLINAN ELECTRICAL CLOSED (NOVEMBER 1997)
- SAG CERAMICS SOLD TO MANAGEMENT (AUGUST 1997)
ONLY CULLINAN PRECISION ENGINEERING (CPE), DENGE AND CULLINAN INDUSTRIAL PORCELAIN (CIP) REMAIN OF THE OLD CULLINAN. NEGOTIATIONS ARE UNDER WAY TO DISPOSE OF DENGE, AND AN OPTION HAS BEEN GRANTED FOR THE PURCHASE OF CIP BEFORE MARCH 1999. FULL PROVISIONS FOR ANY POTENTIAL LOSSES ON THESE TRANSACTIONS HAVE BEEN MADE, AND THE CPE BUSINESS ON ITS OWN IS NOW PROFITABLE. CONCLUSION AND FUTURE PROSPECTS
THE ONE-OFF COSTS OF TRANSFORMING THE CULLINAN GROUP HAVE BEEN ENORMOUS. HOWEVER, THESE RECONFIGURATION LOSSES HAVE NOW BEEN TAKEN AND THE DEBT PROBLEM HAS BEEN SOLVED.
THE ACQUISITION OF MIDMACOR INDUSTRIES LIMITED ESTABLISHES A STABLE AND RELIABLE EARNINGS STREAM AND HAS INTRODUCED A NEW MANAGEMENT TEAM. THIS NEW STABLE PLATFORM WILL BE USED AS A SPRINGBOARD TO EXTEND THE CULLINAN'S ACTIVITIES OFF A BASE OF SIGNIFICANT PROFITS. FINAL DIVIDEND NO DIVIDEND HAS BEEN DECLARED. ON BEHALF OF THE BOARD SJ NASH QA SOUTHEY EXECUTIVE CHAIRMAN FINANCIAL DIRECTOR 8 DECEMBER 1997 DIRECTORS
SJNASH (EXECUTIVE CHAIRMAN), QA SOUTHEY (FINANCIAL DIRECTOR),DN CARSTENS, NO DAVIES, PRA FERGUSON REGISTERED OFFICE
THE HONDA BUILDING, 104 NORTH REEF ROAD, SUNNYROCK EXT 4, GERMISTON TRANSFER SECRETARIES MERCANTILE REGISTRARS LIMITED
2ND FLOOR, MERCANTILE BUILDING, 94 PRESIDENT STREET, JOHANNESBURG 2001 (POBOX 1053, JOHANNESBURG 2000)
