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RANDGOLD & EXPLORATION COMPANY LTD - Reviewed results for the six months ended 30 June 2012

Release Date: 17/08/2012 15:00
Code(s): RNG     PDF:  
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Reviewed results for the six months ended 30 June 2012

RANDGOLD & EXPLORATION COMPANY LIMITED
Randgold & Exploration Company Limited
(Incorporated in the Republic of South Africa)
(Registration number 1992/005642/06)
Share code: RNG
ISIN: ZAE000008819
(“R&E” or “the company” or “the group”)



COMMENTARY TO THE CONDENSED CONSOLIDATED REVIEWED INTERIM FINANCIAL
STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2012

General
The board of Randgold & Exploration Company Limited (R&E) is pleased to
announce the interim results for the six months ended 30 June 2012.

Income
The majority of the income recognised in the period under review was a
result of a legal settlement, profit realised on the disposal of
prospecting rights and finance income.

Financial position
R&E is liquid with no interest-bearing debt. R&E’s total assets consist
primarily of cash. R&E had a net asset value per share of R2.48 at 30
June 2012.

Cash flow
R&E started the period under review with a cash balance of R211 million.
Operating activities generated cash of R0.5 million, primarily as a
result of a legal settlement of R15.5 million and interest received of
R5.6 million offsetting operating expenses of R19.9 million, which
includes legal and forensic costs of R11.6 million.

Investing activities yielded cash inflows of R5 million received from
the sale of prospecting rights.

R&E remains in a healthy cash position with R217 million in cash and
cash equivalents at 30 June 2012.

Outlook
On 11 July 2012 the company announced the withdrawal of the cautionary
announcement under which it was trading, as negotiations regarding a
possible investment opportunity were terminated. The negotiations were
conducted under a confidentiality agreement. Management continues to
review investment opportunities for the benefit of R&E and its
shareholders.

The group’s current asset base, comprising primarily of net cash
reserves, provides the critical mass for the ongoing pursuit of civil
claims for the recovery of allegedly misappropriated assets. It is the
board’s opinion that R&E’s management, forensic and legal teams have the
necessary experience and resilience to prosecute the legal claims. As in
the past, a pragmatic commercial approach will be adopted in dealing with
the outstanding legal claims.
DC Kovarsky         Marais Steyn
Chairman            Chief Executive Officer

Johannesburg
6 August 2012

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
                                                   For the six months ended
                                                  30 June 2012 30 June 2011
                                                  Reviewed       Reviewed
                                           Notes R’000           R’000
Revenue                                           –                  1 826
Profit on disposal of prospecting rights 6        5 037          9 963
Profit on distribution of Investments             –              52 474
Recoveries                                 7      15 521         –
Foreign exchange gains                            532            1 513
Other income                                      2 041              8
Other operating expenses                          (19 879)           (14 505)
Results from operating activities                 3 252              51 279
Finance income                                    5 597              3 073
Profit before taxation                            8 849              54 352
Taxation                                          –                  954
Profit for the period                             8 849              55 306
Other comprehensive income
Change in fair value of available-for-
sale investments                                  –                  (9 537)
Realised gain reclassified to profit or
loss                                              –              (52 474)
Total comprehensive income                        8 849              (6 705)


Profit attributable to:
Owners of the company                             8 849              55 306
Total comprehensive income
attributable to:
Owners of the company                             8 849              (6 705)
Basic and diluted earnings per share
(cents)                                    8      12                 77

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
                                                             As at
                                               30 June 2012 31 December 2011
                                             Reviewed         Audited
                                             R’000            R’000
Assets
Non-current assets                           697              734
Plant and equipment                          223              260
Intangible assets                            474              474
Current assets                               218 250          213 258
Trade and other receivables                  1 289            1 788
Cash and cash equivalents                    216 961          211 470


Equity and liabilities
Shareholders’ equity                         177 875          169 026
Issued capital                               746              746
Retained earnings                            177 129          168 280

Liabilities
Non-current liabilities
Post-retirement medical benefit
obligation                                   39 361           39 142

Current liabilities
Trade and other payables                     1 711            5 824
Total equity and liabilities                 218 947          213 992



CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
                                                   For the six months ended
                                                   30 June 2012 30 June 2011
                                                   Reviewed         Reviewed
                                                   R’000            R’000
Share capital balance at the beginning and end
of the period                                  746                  748


Investment fair value reserve                      –                –
Balance at the beginning of the period             –                62 011
Change in fair value of available-for-sale
investments                                        –                (9 537)
Realised gain reclassified to profit or loss       –                (52 474)


Retained earnings                                  177 129          176 539
Balance at the beginning of the period             168 280          111 696
Profit for the period                            8 849          55 306
Remeasurement of shareholders for dividend       –              9 537

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
                                                  For the six   months ended
                                                 30 June 2012   30 June 2011
                                                 Reviewed       Reviewed
                                                 R’000          R’000
Profit before taxation                           8 849           54 352
Adjusted for:
 Profit on distribution of Investments           –              (52 474)
 Profit on disposal of prospecting rights        (5 037)        (9 963)
 Other non-cash items                            256              (277)
 Interest received                               (5 597)          (3 073)
 Dividends received                              –                (1 826)
 Working capital changes                         (3 614)          (178)
Cash flows from operations                       (5 143)          (13 439)
Interest received                                5 597            3 073
Taxation paid                                    –                (10 450)
Cash flows from operating activities             454              (20 816)
Cash flows from investing activities             5 037            11 757
Dividends received                               –                1 826
Proceeds on disposal of prospecting rights       5 037          9 963
Acquisition of plant and equipment               –                (39)
Proceeds from disposal of plant and equipment    –              7
Cash flow from financing activities              –              (64 633)
Dividends paid                                   –              (64 633)
Net increase/(decrease) in cash and cash
equivalents                                      5 491           (73 692)
Cash and cash equivalents at the beginning of
the period                                       211 470         291 797
Cash and cash equivalents at the end of the
period                                           216 961         218 105



NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE SIX
MONTHS ENDED 30 JUNE 2012


1.   Reporting entity
R&E is a company domiciled and incorporated in the Republic of South
Africa. The condensed consolidated interim financial statements of the
company for the six months ended 30 June 2012 include the company and its
subsidiaries (together referred to as “the group”).

2.   Statement of compliance
The condensed consolidated interim financial statements for the six months
ended 30 June 2012 have been prepared in compliance with the Listings
Requirements of the JSE Limited, IAS 34 Interim Financial Reporting, the
AC 500 series as issued by the Accounting Practices Board or its successor
and the South African Companies Act, 71 of 2008, as amended. These
condensed consolidated interim financial statements were approved by the
board of directors on 6 August 2012.

Mr Van Zyl Botha CA(SA), financial director, is responsible for these
interim financial statements and has supervised the preparation thereof in
conjunction with the group accountant, Ms Marleen Schalkwijk.

3.   Significant accounting policies
The accounting policies applied by the group in these condensed
consolidated interim financial statements are the same as those applied by
the group in its consolidated financial statements as at and for the year
ended 31 December 2011.

4.   Independent review by the auditor
The condensed consolidated interim financial statements of R&E were
reviewed by KPMG Inc. The unmodified review report is available for
inspection at the company’s registered office.

5.   Segment reporting
The group operates in a single operating segment as an investment holding
company with assets in the mining industry.

6.   Profit on disposal of prospecting rights
R&E disposed of certain of its prospecting rights which had a nil carrying
value for R5 million.

7.   Recoveries
R&E entered into a settlement agreement with Paul Main in terms of which
USD4 million is payable by Paul Main to R&E. The settlement relates to the
group’s claim against him for damages in respect of two million Randgold
Resources Limited shares. Shareholders are referred to the announcements
made by the company on 23 May and 6 July 2012 relating to this settlement.
R&E recognised only R15.5 million (USD2 million) of the settlement
received in cash at 30 June 2012 and will recognise the remaining USD2
million on receipt or when the company is virtually certain of receipt
thereof.

8.   Earnings per share
                                                  For the six months ended
 Basic earnings and diluted earnings per         30 June 2012 30 June 2011
 ordinary share                                  Reviewed     Reviewed
 Basic and diluted earnings for the period
 (R’000)                                         8 849        55 306
 Weighted average number of ordinary shares in
 issue                                           71 585 172   71 813 235
 Earnings per share (cents)                       12             77
 Headline and diluted headline earnings
 per ordinary share


 Headline and diluted headline earnings/(loss)
 for the period (R’000)                           3 812         (7 131)
 Weighted average number of ordinary shares in
 issue                                            71 585 172    71 813 235
 Headline earnings/(loss) per share (cents)       5              (10)


 Reconciliation between basic and headline
 earnings for the period                          R’000         R’000
 Profit for the period attributable to the
 equity holders of the company                    8 849          55 306
 Adjusted for:
 Profit on distribution of available-for-sale
 investments                                      –              (52 474)
 Profit on disposal of prospecting rights         (5 037)        (9 963)
                                                  3 812          (7 131)


 Tax effect of adjustments                        –              –
 Headline earnings/(loss) for the period
 attributable to equity holders of the company 3 812             (7 131)

9.   Net asset and tangible net asset value per share
The net asset value per share is calculated using the following variables:

                                                 30 June 2012 30 June 2011
                                                 Reviewed      Reviewed
 Net asset value (R’000)                         177 875       177 287
 Ordinary shares outstanding                     71 585 172    71 813 235
 Net asset value per share (cents)               248           247
 Net tangible asset value per share (cents)      247           246

The number of shares outstanding at 30 June 2012 and 30 June 2011 has been
adjusted for the 2,999,893 treasury shares held.

10. Material changes
The settlement with Paul Main is material in its totality but as only 50%
of the settlement amount has been received and the other 50% is payable by
31 August 2012, the payments are viewed as two separate transactions.

11. Related party transactions
There were no related party transactions during the period under review
other than in    the   normal   course    of   business,    i.e.     key   management
remuneration.

12. Events after reporting date
There were no significant events         between   the   reporting    date   and   the
approval date of these results.

Directors: DC Kovarsky (Chairman)**, M Steyn (CEO)*, V Botha*,
MB Madumise#, JH Scholes** (*Executive, **Independent non-executive,
#
 Resigned 23 March 2012 independent non-executive)

Secretary and Registered officer: V Botha CA(SA)

Transfer secretaries: Computershare Investor Services (Pty) Ltd
(Registration number 2004/003647/07), 70 Marshall Street, Johannesburg,
2001

Sponsor: PSG Capital, 1st Floor, Ou Kollege Building, 35 Kerk Street,
Stellenbosch, 7600

17 August 2012

Date: 17/08/2012 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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