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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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