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SEKUNJALO INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1996/006093/06
JSE Share Code: SKJ ISIN: ZAE000017893
("Sekunjalo")
HIGHLIGHTS
* Major turnaround in results
* Group turnover up 40%
* Operating income R10,4 m
* Headline EPS 1,55 cents
* Headline EPS up 9,68 cents
INTERIM RESULTS
for the period ended 28 February 2002
GROUP INCOME STATEMENT
Unaudited Unaudited
6 months 6 months Audited
Group Group Group
to 28 Feb to 28 Feb to 31 Aug
2002 2001 2001
R'000 % R'000 R'000
Revenue 151 788 40% 108 489 270 125
Operating income/(loss) 10 398 (2 054) 18 301
Finance (cost)/income (9 478) (6 930) (19 759)
Profit/(Loss) before tax 920 (8 985) (1 458)
Income (expense)/tax gain (136) 237 (1 307)
Income/(loss) after tax 784 (8 747) (2 765)
Loss on disposal of subsidiaries - (33 523) (36 270)
Income from associates 26 1 358 50
(Loss)/income 810 (40 913) (38 985)
Minority shareholders interest 293 24 640 26 751
Net Income/(loss) for the period 1 103 (16 273) (12 234)
Headline earnings
Attributable Income/(loss) 1 103 (16 273) (12 234)
Goodwill written off/Amortisation
of dossiers 274 180 487
Disposal of subsidiaries - 8 883 11 741
Start-up costs written off - - 190
Headline earnings 1 377 (7 210) 184
Number of shares in issue 88 688 848 88 688 848 88 688 848
Headline Earnings/(loss)
per share (cents) 1.55 (8.13) 0.21
Earnings/(loss)/ per share (cents) 1.24 (18.35) (13.79)
GROUP BALANCE SHEET
Unaudited Unaudited
6 months 6 months Audited
Group Group Group
to 28 Feb to 28 Feb to 31 Aug
2002 2001 2001
R'000 R'000 R'000
ASSETS
Non current assets 135 940 119 914 131 858
Property, plant & equipment 64 837 66 116 64 819
Goodwill & intangible assets 21 696 15 312 18 325
Pharmaceutical dossiers 31 450 29 711 32 300
Investments (incl. Associate co's) 9 744 11 882 9 720
Loans receivable 4 381 772 5 596
Deferred taxation 3 832 (3 879) 1 098
Current Assets 129 409 102 478 113 992
Inventories 45 707 37 342 36 334
Trade & other receivables 55 508 52 246 63 596
Bank & cash on hand 28 194 12 890 14 062
TOTAL ASSETS 265 349 222 392 245 850
EQUITY & LIABILITIES
Capital & Reserves
Issued capital 127 837 127 837 127 837
Non distributable reserves 39 49 39
(Accumulated loss)/retained income (121 407) (126 147) (122 510)
6 470 1 739 5 366
Non Current Liabilities
Interest bearing borrowings 93 113 94 504 83 455
Shareholders loans 22 468 (2 492) 634
Minority shareholders interest 49 910 58 042 50 915
Current Liabilities 93 388 70 599 105 480
Trade & other payables 63 057 43 661 79 220
Bank overdraft 29 269 24 037 20 066
Receiver of revenue 1 062 2 901 6 194
TOTAL EQUITY & LIABILITIES 265 349 222 392 345 850
GROUP STATEMENT OF CHANGES IN EQUITY
Non-
Distri- Accumulated
Share Share butable Profit/
Capital Premium Reserves (loss) Total
R'000 R'000 R'000 R'000 R'000
Balance at 31 August 2000 1 554 126 283 39 (109 874) 18 002
Net profit/(loss)
from ordinary activities - - - (402) (402)
Restated balance 1 554 126 283 39 (110 276) 17 600
Net profit/(loss)
from ordinary activities - - - (12 234) (12 234)
Balance at 31 August 2001 1 554 126 283 39 (122 510) 5 366
Net profit/(loss)
from ordinary activities - - - 1 103 1 103
Increase in non distributable
reserves - - - - -
Balance at 28 February 2002 1 554 126 283 39 (121 407) 6 470
ABRIDGED CASH FLOW STATEMENT
Unaudited Unaudited
6 months 6 months Audited
Group Group Group
to 28 Feb to 28 Feb to 31 Aug
2002 2001 2001
R'000 R'000 R'000
CASH FLOWS FROM OPERATING ACTIVITIES (12 924) 16 221 52 326
CASH UTILISED BY INVESTING ACTIVITIES (13 638) (26 439) 7 376
CASH FLOWS FROM FINANCING ACTIVITIES 31 491 18 690 (46 087)
Net increase/(decrease)
in cash and cash equivalents 4 929 8 472 13 615
Cash and cash equivalents
at beginning of year (6 004) (19 619) (19 619)
Cash and cash equivalents
at end of year (1 075) (11 147) (6 004)
COMMENTS
Financial
Sekunjalo Investments Limited is pleased to announce greatly improved
interim results for the six months ended 28 February 2002. The group
undertook an extensive restructure which focused on the generation of
increased cash from its operating subsidiaries, which contributed to the
improved performance.
Group turnover for the six month period has increased by 40% from R108,49
million to R151,79 million; operating income has increased from a loss of
R2,054 million to a profit of R10,398 million and headline earnings per
share is up from a loss of 8,3 cents earnings per share to a profit of 1,55
cents earnings per share. This is due to increased operating efficiencies,
consistent cost reductions, strong export earnings and increased margins on
branded product lines. There were decreased operating expenses due to more
cost effective sourcing opportunities and improved procurement policies.
The Group's strategy of consolidating its businesses for this period and
achieving greater efficiencies within them, has contributed to the solid
performance for the period under review.
Management is exceptionally pleased with the results since they reflect
an actual improvement of the operating subsidiaries since the previous
reporting period.
Group Profile
Sekunjalo Investments Ltd is a black-owned investment holding company
which listed on the JSE Securities Exchange S.A. in May 1999. It manages and
controls its investments in Health Care, Information Technology and the
Industrial sectors (primarily in the fishing industry).
The Group's operating subsidiaries are leading companies in their
sectors. Sekunjalo Health Care is the largest empowerment health care
company in South Africa. It is focussed on the manufacture of branded
medical consumables and the provision of health care services, principally
to the public sector. Within the Industrial portfolio, Premier Fishing is
well established as one of the largest fishing companies in the country. It
is competitive in the lobster, pelagic and squid markets, locally and
internationally.
Sekunjalo's Information Technology interests in Health System
Technologies (HST) and Sekunjalo Enterprise Management Technology (Pty) Ltd
(Semtech) are in niche areas, with synergies between HST and the health care
businesses and between Semtech and the manufacturing businesses.
Review of Investments
Sekunjalo Industrials- Premier Fishing
Premier Fishing has performed well. The granting of four-year quotas in
2001 has brought much needed stability to the fishing industry. Premier
Fishing has built strong alliances within the industry allowing it to
achieve significant synergies and optimising returns. The decline of the
rand against the dollar as well as increased exports to Asia, Europe and
USA, significantly benefited Premier Fishing. The company continues to
focus on strongly branded products (Redro, Pecks Anchovette, Seagro and
South Atlantic Lobster) for the local and export markets.
A decision to invest in the mariculture industry (abalone) has served as
an effective means of reducing dependency on the natural resource, which has
come under increased pressure in recent years. The abalone exports of the
company have increased substantially in the period under review.
Sekunjalo Health Care (SHC)
Sekunjalo Health Care is undergoing extensive restructuring with the
support of leading management consultants, Bain and Company. A new CEO has
been appointed which has brought a strong focus to bear on cash flow
generation and the creation of shareholder value. Promex and Rapimed
continue to obtain public sector business in medical consumables and
diagnostics, while engaging in expanding exports. Sekunjalo Health Care has
recently engaged in a process to strengthen its relationship with Becton &
Dickinson, the global leader in medical consumables.
Health System Technologies (HST) recently celebrated the successful
implementation of the Health Information Systems (HIS) project with the
Western Cape Provincial Health Department, which is a contract valued at
R150 million over a number of years. The HIS system will provide leading
edge software technology to government within the academic and regional
hospitals and clinics.
Information Technology - Sekunjalo Enterprise Management Technology (Pty)
Ltd (Semtech)
Semtech, the software product developer, is positioned well in the niche
agri-chemical distribution sector.
Semtech's web-based multi accounting system has been successfully
implemented at a number of major agri-chemical manufacturers.
Prospects
The prospects for the second half of the financial year are encouraging
since the Group's businesses are cyclical in nature with a stronger second
half performance expected as in past years.
The Group will continue to focus on improved operating efficiencies, the
reduction of operating costs, additional branded products for export,
increased margins on manufactured product lines and strengthening the
management teams in subsidiaries, in order to drive the growth of these
businesses.
The Group will seek further opportunities for growth while building its
current businesses. The empowerment credentials of Sekunjalo's operating
subsidiaries, position them well to benefit from government legislation
which will support black economic empowerment.
Discussions between Sekunjalo Investments Holdings (Pty) Limited (the
holding company of Sekunjalo Investments Limited) and a broad based black
empowerment consortium, continue. The Group is trading under a cautionary in
this regard.
Sekunjalo is still in discussion with its advisors regarding plans to
recover a substantial portion of its investment in LeisureNet.
Following a period of consolidation in this financial year, management is
looking forward to a period of growth in the forthcoming year.
By order of the Board
Adv WA Mgoqi Dr MI Surve'
Chairman Chief Executive
Cape Town
2 May 2002
Directors
Adv WA Mgoqi* (Chairman), Dr MI Surve' (Chief Executive Officer),
MY Kajee CA (SA) (Company Secretary), RA Seria*, AJ Snyders*,
KC Patel*, Z Kota*, D Case* *Non-executive Directors
Registered Address: Transfer Secretaries:
70 Rosmead Avenue Computershare Services Limited
Kenilworth Edura House, 41 Fox Street
7708 Johannesburg 2001
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