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MMG - MICROmega Holdings Limited - Unaudited interim results for the six months

Release Date: 31/08/2010 13:42
Code(s): MMG
Wrap Text

MMG - MICROmega Holdings Limited - Unaudited interim results for the six months ended 30 June 2010 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 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2010 Decrease In Revenue -17% Decrease In Attributable Earnings Per Share -29% Decrease In Headline Earnings Per Share -34% Increase In Net Asset Value Per Share 8% Increase In Net Tangible Asset Value Per Share 11% CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME Unaudited Unaudited Audited six months six months year
ended ended ended 30 June 30 June 31 December 2010 2009 2009 R(`000) R(`000) R(`000)
Revenue 326 993 394 532 747 307 Revenue from continuing operations 326 922 375 236 721 900 Revenue from discontinued operations 71 19 296 25 407 Cost of sales (219 836) (282 972) (517 175) Gross profit 107 157 111 560 230 132 Gross profit from continuing operations 107 229 116 719 227 428 Gross (loss)/ profit from discontinued operations (72) (5 159) 2 704 Other income 1 310 4 001 9 109 Distribution expenses (2 876) (3 549) (5 578) Administration expenses (95 096) (89 981) (196 616) Results from operations 10 495 22 031 37 047 Results from continuing operations 11 808 28 907 43 947 Results from discontinued operations (1 313) (6 876) (6 900) Finance income 7 793 1 169 9 479 Finance cost (5 269) (4 521) (16 995) Net finance income / (cost) 2 524 (3 352) (7 516) Share of (loss) / profits in equity accounted associates (287) 586 (768) Profit before tax 12 732 19 265 28 763 Profit before tax from continuing operations 14 598 27 017 36 346 Loss before tax from discontinued operations (1 866) (7 752) (7 673) Taxation expense (3 748) (5 397) (11 084) Profit for the period 8 984 13 868 17 679 Profit from continuing operations 10 576 19 450 23 768 Loss from discontinued operations (1 592) (5 582) (6 089) Other comprehensive income Foreign currency translation differences 12 61 42 Revaluation of property, plant and equipment - - 2 230 Realisation of revaluation on disposal of property, plant and equipment (378) - - Income tax on other comprehensive income 53 - (634) Other comprehensive income for the period (313) 61 1 638 Total comprehensive income for the period 8 671 13 929 19 317 Profit attributable to: Owners of the company 7 858 10 991 16 362 Non-controlling interest 1 126 2 877 1 317 Profit for the period 8 984 13 868 17 679 Total comprehensive income attributable to: Owners of the company 7 545 11 052 18 000 Non-controlling interest 1 126 2 877 1 317 Total comprehensive income for the period 8 671 13 929 19 317 Reconciliation of headline earnings Profit attributable to owners of the company 7 858 10 991 16 362 Profit on disposal of property, plant and equipment (429) (117) (1 786) Impairment of property, plant and equipment - 297 - Profit on disposal of other investments - - (1 995) Impairment of goodwill - - 7 540 Headline earnings 7 429 11 171 20 121 Headline earnings per share (cents) 7.66 11.52 20.75 Basic earnings per share (cents) 8.10 11.34 16.88 Diluted earnings per share (cents) 8.06 11.26 16.77 Continuing operations Basic earnings per share (cents) 9.75 17.10 23.16 Diluted earnings per share (cents) 9.69 16.98 23.01 Weighted average number of shares (000) 96 953 96 930 96 958 Diluted weighted average shares in issue (000) 97 495 97 579 97 561 Total number of shares in issue (000) 96 948 96 845 96 966 CONDENSED GROUP STATEMENT OF FINANCIAL POSITION Unaudited Unaudited Audited
six months six months year ended ended ended 30 June 30 June 31 December 2010 2009 2009
R(`000) R(`000) R(`000) ASSETS Non-current assets 174 604 174 612 168 880 Property, plant and equipment 55 915 54 822 58 871 Intangible assets 66 468 66 494 61 434 Investments in associates 3 584 5 321 3 747 Other investments 6 693 6 742 6 698 Loans receivable 20 557 23 374 21 891 Deferred tax assets 21 387 17 859 16 239 Current assets 253 017 252 954 251 906 Inventories 55 559 62 069 45 200 Retirement benefits 18 797 17 971 18 877 Trade and other receivables 124 563 112 603 123 976 Current portion of loans receivable 6 732 5 716 5 497 Cash and cash equivalents 18 946 26 508 29 936 Non-current assets classified as held for sale 28 420 28 087 28 420 Total assets 427 621 427 566 420 786 EQUITY AND LIABILITIES Equity 287 924 274 107 280 050 Share capital and premium 191 409 191 229 191 440 Non-distributable reserves 8 008 6 075 8 196 Retained earnings 80 198 61 588 66 959 Total equity attributable to equity holders of the company 279 615 258 892 266 595 Non-controlling interests 8 309 15 215 13 455 Liabilities Non-current liabilities 25 799 26 508 27 530 Loans and borrowings 17 919 19 115 19 467 Deferred tax liabilities 7 880 7 393 8 063 Current liabilities 113 898 126 951 113 206 Bank overdraft 5 978 16 572 3 930 Current portion of loans and borrowings 20 077 21 167 21 372 Trade and other payables 85 908 80 961 86 055 Deferred vendor payments 703 1 539 871 Provisions 312 - 36 Taxation payable 920 6 712 942 Total equity and liabilities 427 621 427 566 420 786 Net asset value per share (cents) 288.42 267.33 274.94 Net tangible asset value per share (cents) 219.86 198.67 211.58 CONDENSED GROUP STATEMENT OF CASH FLOWS Unaudited Unaudited Audited six months six months year
ended ended ended 30 June 30 June 31 December 2010 2009 2009 R(`000) R(`000) R(`000)
Cash flows from operating activities Cash generated by operations 15 524 27 575 50 157 Movement in working capital (11 093) 4 096 14 771 Finance income 7 793 1 169 9 479 Finance cost (5 269) (4 510) (16 995) Tax paid (9 046) (12 744) (22 589) Net cash inflows from operating activities (2 091) 15 586 34 823 Cash outflow from investing activities Expenditure to maintain operating capacity Property, plant and equipment acquired (2 901) (4 361) (12 212) Intangible assets acquired (16) (138) (213) Proceeds of disposals on property, plant and equipment 1 098 2 342 5 656 Proceeds on disposal of intangible assets - - 19 Expenditure for expansion Acquisition of subsidiaries (318) (676) (1 578) Internally generated intangible assets (5 290) (1 419) (4 956) Investments sold / (acquired) 5 (44) 2 359 Loans receivable repaid / (granted) 99 (27 117) (25 338) Net cash used in investing activities (7 323) (31 413) (36 263) Cash flows from financing activities Treasury shares repurchased (33) (419) (224) Dividends paid to non-controlling interests (580) - (200) Borrowings (repaid) / raised (2 843) 10 901 12 857 Deferred vendor payments repaid (168) (2 059) (2 327) Net cash (used) / generated by finance activities (3 624) 8 423 10 106 (Decrease) / increase in cash and cash equivalents (13 038) (7 404) 8 666 Cash and cash equivalents at beginning of year 26 006 17 340 17 340 Cash and cash equivalents at end of the period 12 968 9 936 26 006 GROUP STATEMENT OF CHANGES IN EQUITY Share Share Share- Revalu- Foreign Deal capital premium based ation currency differ- payment reserve transla- ence reserve tion reserve
reserve R(`000) R(`000) R(`000) R(`000) R(`000) R(`000) Balance as at 1 January 2009 971 190 678 2 297 2 388 (21) 1 000 Total comprehensive income for the period Profit for the period - - - - - - Other comprehensive income - - - - 61 - Foreign currency translation differences - - - - 61 - Total comprehensive income for the period - - - - 61 - Transactions with owners recorded directly in equity (3) (417) 350 - - - Treasury shares purchased (3) (417) - - - - Share-based payment transactions - - 350 - - - Balance as at 30 June 2009 968 190 261 2 647 2 388 40 1 000 Total comprehensive income for the period Profit for the period - - - - - - Other comprehensive income - - - 1 596 (19) - Foreign currency translation differences - - - - (19) - Revaluation of property, plant and equipment - - - 1 596 - - Total comprehensive income for the period - - - 1 596 (19) - Transactions with owners recorded directly in equity 2 209 544 - - - Dividends paid by subsidiary to non-controlling interests - - - - - - Treasury shares sold 2 194 - - - - Share-based payment transactions - 15 544 - - - Balance as at 31 December 2009 970 190 470 3 191 3 984 21 1 000 Total comprehensive income for the period Profit for the period - - - - - - Other comprehensive income - - - (325) 12 - Foreign currency translation differences - - - - 12 - Realisation of revaluation reserve on disposal of property, plant and equipment - - - (325) - - Total comprehensive income for the period - - - (325) 12 - Transactions with owners recorded directly in equity - (31) 125 - - - Dividends paid by subsidiary to non-controlling interests - - - - - - Treasury shares purchased - (33) - - - - Share-based payment transactions - 2 125 - - - Changes in ownership interests in subsidiaries that do not result in a loss of control Business combinations - - - - - - Total transactions with owners - (31) 125 - - - Balance as at 30 December 2010 970 190 439 3 316 3 659 33 1 000 Non- Retained earnings Total controlling Total interest equity R(`000) R(`000) R(`000) R(`000)
Balance as at 1 January 2009 50 597 247 910 12 338 260 248 Total comprehensive income for the period Profit for the period 10 991 10 991 2 877 13 248 Other comprehensive income - 61 - 61 Foreign currency translation differences - 61 - 61 Total comprehensive income for the period 10 991 11 052 2 877 13 929 Transactions with owners recorded directly in equity - (70) - (70) Treasury shares purchased - (420) - (420) Share-based payment transactions - 350 - 350 Balance as at 30 June 2009 61 588 258 892 15 215 274 107 Total comprehensive income for the period Profit for the period 5 371 5 371 (1 560) 3 811 Other comprehensive income - 1 577 - 1 577 Foreign currency translation differences - (19) - (19) Revaluation of property, plant and equipment - - - - Total comprehensive income for the period 5 371 6 948 (1 560) 5 388 Transactions with owners recorded directly in equity - 755 (200) 555 Dividends paid by subsidiary to non-controlling interests - - (200) (200) Treasury shares sold - 196 - 196 Share-based payment transactions - 559 - 559 Balance as at 31 December 2009 66 959 266 595 13 455 280 050 Total comprehensive income for the period Profit for the period 7 858 7 858 1 126 8 984 Other comprehensive income - (313) - (313) Foreign currency translation differences - 12 - 12 Realisation of revaluation reserve on disposal of property, plant and equipment - (325) - (325) Total comprehensive income for the period 7 858 7 545 1 126 8 671 Transactions with owners recorded directly in equity - 94 (580) (486) Dividends paid by subsidiary to non-controlling interests - - (580) (580) Treasury shares purchased - (33) - (33) Share-based payment transactions - 127 - 127 Changes in ownership interests in subsidiaries that do not result in a loss of control Business combinations 5 381 5 381 (5 692) (311) Total transactions with owners 5 381 5 475 (6 272) (797) Balance as at 30 December 2010 80 198 279 615 8 309 287 924 NOTES TO THE FINANCIAL STATEMENTS 1. Basis of preparation This condensed consolidated interim financial statements have been prepared in compliance with International Accounting Standard 34 - Interim Financial Report as well as with Schedule 4 of the South African Companies Act and the disclosure requirements of the JSE Limited`s Listing Requirements. 2. Significant accounting policies This condensed consolidated interim financial statements have been prepared using accounting policies that comply with International Financial Reporting Standards (IFRS). The accounting policies used are consistent with those used in the annual financial statements for the year ended 31 December 2009, except for the adoption of the following new or revised standards and interpretations which are now effective: Improvements to IFRS 2009 IAS 27 amendments 3.Segment information SEGMENT REVENUE Unaudited Unaudited Audited six months six months year ended ended ended 30 June 30 June 31 December
2010 2009 2009 R(`000) R(`000) R(`000) Financial services -External sales 14 752 16 215 36 619 Support services -External sales 152 490 184 274 365 123 Information technology -External sales 49 908 87 380 164 931 Automotive components -External sales 109 843 106 663 218 563 Adjustments and eliminations - - (37 929) Total revenue 326 993 394 532 747 307 SEGMENT PROFIT/(LOSS) Unaudited Unaudited Audited six months six months year ended ended ended
30 June 30 June 31 December 2010 2009 2009 R(`000) R(`000) R(`000) Financial services 2 489 3 343 5 387 Support services 9 444 7 283 6 911 Information technology 619 12 680 14 093 Automotive components (104) (6 664) (8 672) Adjustments and eliminations (4 590) (5 651) (1 357) Total profit 7 858 10 991 16 362 SEGMENT ASSETS Unaudited Unaudited Audited six months six months year
ended ended ended 30 June 30 June 31 December 2010 2009 2009 R(`000) R(`000) R(`000)
Financial services 232 990 188 424 243 511 Support services 68 173 62 109 75 644 Information technology 89 884 116 110 148 255 Automotive components 186 582 210 636 199 213 Adjustments and eliminations (150 008) (149 173) (245 837) Total assets 427 621 427 566 420 786 COMMENTARY ON RESULTS Whilst the diverse nature of the group`s earnings has provided a level of protection to the corporate performance for the 6 month period to June 2010, attributable earnings per share were down 29% when compared to the corresponding period in 2009. Overall the group has not seen a material improvement in the economic climate, with both the information technology and automotive sectors reporting disappointing results for the 6 months. The support services sector`s results were in line with expectations and we are confident that both NOSA and MECS Africa will continue to grow and remain key drivers from both an earnings and revenue perspective going forward. Despite the decline in liquidity in the foreign currency, bond and derivative markets, Micromega Securities performed relatively well during the period under review. The group has been successful at mitigating foreign currency exposure, particularly given the foreign currency loss incurred in 2009. As has been the cyclical trend over the past few years, the group`s results for the second half of the year have historically outperformed the first half and we anticipate this trend to continue. Any reference to future financial performance included in this announcement, has not been reviewed or reported on by the Company`s auditors. By order of the board 31 August 2010 Directors: I G Morris (Chairman) D S E Carlisle (Managing Director) D J Case (Financial Director) P V Henwood (Non-executive) R C Lewin (Non-executive) Company Secretary: T de Mendonca Transfer Secretaries: Computershare Investor Services 2004 (Pty) Ltd Sponsor: Investec Bank Limited Auditor: KPMG Inc Date: 31/08/2010 13:42:30 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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