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MICROmega - Unaudited Group Results For the six months ended 30 June 2002

Release Date: 27/09/2002 07:03
Code(s): MMG
Wrap Text

MICROmega - Unaudited Group Results For the six months ended 30 June 2002 MICROmega Holdings Limited (Incorporated in the Republic of South Africa) (Registration number 1998/003821/06 Share code MMG ISIN ZAE000034435 ("Micromega" or "the Company") UNAUDITED GROUP RESULTS For the six months ended 30 June 2002 Decrease in operating -17% profit Decrease in -19% attributable earnings 6 months 6 months Year ended ABRIDGED INCOME 30 June 30 June 31 December STATEMENT 2002 2001 2001
R (`000) R (`000) R (`000) Gross revenue 49 404 47 784 100 284 Operating profit 15 345 18 491 37 719 Net finance income 1 840 1 455 3 332 Profit before taxation 17 185 19 946 41 051 Taxation (4 795) (4 556) (7 092) Headline earnings 12 390 15 390 33 959 Write off of associate - (5 142) (5 104) company Amortisation of (19 293) (12 777) (24 724) goodwill Profit/(Loss) (6 903) (2 529) 4 131 attributable to shareholders Headline earnings per 15.73 21.00 45.14 share (cents) Fully diluted (8.67) (3.09) 4.93 earnings/(Loss) per share (cents) Earnings/(Loss) per (8.76) (3.45) 5.49 share (cents) Weighted average number 78 778 73 282 75 237 of shares Diluted weighted 79 658 81 784 83 833 average shares in issue Total number of share 85 878 76 377 76 377 in issue ABRIDGED BALANCE SHEET 30 June 30 June 31 December 2002 2001 2001 R (` 000) R (` 000) R (` 000) ASSETS Non-current assets Fixed assets 5 603 6 791 6 121 Goodwill 2 80 408 84 529 77 398 Deferred tax 5 065 3 685 6 345 Other loans receivable - - 140 Investments 3 389 3 817 3 331 Current assets Bank and cash 30 926 35 106 41 333 Accounts receivable 9 363 9 896 8 942 Total assets 134 754 143 824 143 610 EQUITY AND LIABILITIES Capital and reserves Shareholders` equity 79 961 75 648 69 273 Non-current liabilities Long-term borrowings 26 060 44 189 37 268 Current liabilities Taxation 58 4 027 4 875 Accounts payable 8 223 7 396 8 629 Income received in 9 646 2 317 10 839 advance Current provisions 3 10 806 10 247 12 726 Total equity and 134 754 143 824 143 610 liabilities Net asset value per 93.11 99.05 90.70 share (cents) ABRIDGED Share Share NDR Accumulated Total STATEMENT OF CHANGES IN EQUITY capital premium loss R (` 000) R (` 000) R (` 000) R (` 000) R (` 000) Balance at 1 725 118 930 - (54 458) 65 197 January 2001 Net profit for - - 4 131 4 131 the period - Foreign currency (185) (185) translation reserve Dividends 36 14 464 (14 500) - Issue of shares 3 252 249
Share issue (122) (122) expenses Balance at 31 133 521 (185) (64 827) 69 273 December 2001 764 Net loss for the (6 903) (6 903) period Dividends 11 237 - (16 582) (5 316) 29
Issue of shares 22 909 - 22 974 65 - Share issue (67) (67) expenses Balance at 30 167 600 (185) (88 312) 79 961 June 2002 858 6 months 6 months Year ended ABRIDGED CASH FLOW 30 June 30 June 31 December STATEMENT 2002 2001 2001 R (` 000) R (` 000) R (` 000) Cash generated by 18 024 23 574 44 600 operations Taxation paid (8 489) (5 245) (7 555) Dividends - cash portion (5 316) - - Movement in working (3 622) (8 097) (125) capital Net cash from operating 597 10 232 36 920 activities Net cash from investing (22 706) (12 037) (19 023) activities Capital raised 22 907 227 130 Loans (repaid)/raised (11 205) (5 977) 7 401 Net cash from finance 11 702 (5 847) activities 7 628 Net decrease in bank and (10 407) 12 050 cash 5 823 Represented as follows: Bank and cash at beginning 41 333 29 283 29 283 of the period Bank and cash at end of 30 926 35 106 41 333 the period Net decrease in bank and (10 407) 12 050 cash 5 823 NOTES TO THE FINANCIAL STATEMENTS 1. Accounting policy The financial statements are prepared in accordance with South African Statements of Generally Accepted Accounting Practice. The accounting policies are consistent with the annual financial statements at 31 December 2001. 2. Goodwill Carrying Additions Amortization Carrying value value 1 January 30 June 2002 2002 R`(000) R`(000) R`(000) R`(000)
Goodwill arising 77 398 22 303 (19 293) 80 408 from acquisition Goodwill represents the excess of the cost of acquisition over the fair value of net assets of the subsidiaries on acquisition. Goodwill is amortised using the straight line method over the lesser of the profit warranty period associate with the specific acquisition or five years. The carrying amount of goodwill is reviewed annually and written down for any permanent impairment where considered necessary. The additional goodwill arose as a result of subsidiaries acquired previously meeting profit warranties. 3. Provisions Carrying Additional Utilised during Carrying value value 1 January provisions the period 30 June
2002 2002 R`(000) R`(000) R`(000) R`(000) Provision for 5 800 - ( 2 400) 3 400 deal differences Provision for 3 664 480 4 144 leave pay General 2 762 - - 2 762 provisions Product warranty 500 - - 500 provision 12 726 480 ( 2 400) 10 806 COMMENTARY ON RESULTS Our three main operating entities namely, Global Credit Ratings, MICROmega Securities and MICROmega Revenue Management Services have continued to generate earnings growth ahead of expectation. However our finance and treasury risk management services have been negatively affected by the publicity surrounding the dispute between our former CEO and SARS. During the period we were unable to close pending transactions or to secure new clients for these services and we have consequently elected to suspend these activities. The combined impact of the costs incurred and of not receiving a contribution from these activities has resulted in a reduction in headline earnings in comparison to previous reported periods. PROSPECTS The second half results will also be affected by the negative publicity. We believe however that the curtailment in our risk management services to the public sector will allow the remaining businesses to put the group back on an earnings growth path in 2003. These businesses are underpinned by either commercial or contractual annuity income streams and have enjoyed organic growth from the domestic and international markets. By order of the Board Directors: J E Newbury (Non - Executive Chairman), A G Fletcher, M M Ngoasheng, I G Morris (Managing).
Company Secretary: A W Browne Date: 27/09/2002 07:00:02 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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