MONEYWEB HOLDINGS LIMITED - Audited Condensed Results for the 12 months ended 30 June 2013

Release Date: 12/09/2013 14:05
Code(s): MNY
Wrap Text
Audited Condensed Results for the 12 months ended 30 June 2013

Moneyweb Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration No: 1998/025067/06)
(JSE code: MNY     ISIN code: ZAE000025409)
("Moneyweb" or "the company" or "the group")

30 JUNE 2013

Condensed Group Statement of Comprehensive Income
                                                                   Audited    Audited
                                                                 12 months  15 months
                                                                 30-Jun-13  30-Jun-12
                                                                     R'000      R'000

Revenue                                                             34 341     44 851

Profit / (loss) before investment income,
fair value adjustments, depreciation,
amortisation, impairments and exchange gains/(losses)                2 690     (4 413)

Depreciation and amortisation                                       (1 312)    (1 886)
Investment income                                                    1 371      1 871
Finance costs                                                            -        (78)
Fair value adjustment of other investment and other
financial asset                                                        (85)       191
Impairment of financial assets                                         (10)      (117)
Impairment of joint venture investment                                (520)      (355)
Foreign exchange gains                                                 312         31
Loss on write-off of tangible assets                                  (121)         -
Loss on write-off of intangible assets                              (1 363)         -
Exchange differences reversed on disposal of foreign
operations                                                            (676)         -
Net profit / (loss) before taxation                                    286     (4 756)
Taxation                                                              (375)       181
Profit from joint ventures                                               -        496
Net loss for the period                                                (89)    (4 079)

Other comprehensive income
Exchange differences on translation of foreign operations                -        235
Total comprehensive loss for the period                                (89)    (3 844)

Reconciliation of headline loss
Net loss for the period                                                (89)    (4 079)
Loss on write-off of tangible assets                                   121          -
Loss on write-off of intangible assets                               1 363          -
Impairment of joint venture investment                                 520        355
Exchange differences reversed on disposal of foreign
operations                                                             676          -
Headline earnings / (loss)                                           2 591     (3 724)

Basic and diluted loss per share (cents)                             (0.08)     (3.83)
Basic and diluted headline earnings / (loss) per share (cents)        2.43      (3.49)

Number of shares in issue (000's)
- issued closing (net of treasury)                                 106 575     106 575
- weighted average                                                 106 575     106 575

Condensed Group Statement of Financial Position

                                                                   Audited     Audited
                                                                 30-Jun-13   30-Jun-12
Assets                                                               R'000       R'000
Non-current assets
Tangible fixed assets                                                1 081       1 263
Intangible assets                                                        -       2 001
Investment in joint ventures                                            13         533
Other investment                                                        24          20
Deferred taxation                                                      258         554
                                                                     1 376       4 371
Current assets
Trade and other receivables                                          3 694       4 096
Investment in collective investment scheme                          17 533      16 533
Cash and cash equivalents                                            8 314      11 711
Income tax paid in advance                                           1 106       1 006
                                                                    30 647      33 346

Total assets                                                        32 023      37 717

Equity and liabilities
Capital and reserves
Share capital and premium                                           32 732      32 732
Foreign currency translation reserve                                     -        (676)
Accumulated loss                                                    (4 609)     (4 520)
Ordinary shareholders’ interest                                     28 123      27 536

Current liabilities
Trade and other payables                                             3 325       4 956
Deferred revenue                                                       575       5 225
                                                                     3 900      10 181
Total equity and liabilities                                        32 023      37 717

Net asset value per share (cents)                                     26.4        25.8
Net tangible asset value per share (cents)                            26.4        24.0

Condensed Group Statement of Changes in Equity          Share        Share            Foreign         Accumulated         Total
                                                      capital      premium           currency              profit
                                                       R'000         R'000              R'000               R'000         R'000

Balance at 1 April 2011                                  107        32 625               (911)               (441)       31 380
Total comprehensive loss for the period ended
30 June 2012                                               -             -                235              (4 079)       (3 844)
Balance at 30 June 2012                                  107        32 625               (676)             (4 520)       27 536
Total comprehensive loss for the period ended
30 June 2013                                               -             -                676                 (89)          587
Balance at 30 June 2013                                  107        32 625                  -              (4 609)       28 123

Condensed Group Statement of Cash Flow
                                                                                    Audited                            Audited
                                                                                  12 months                          15 months
                                                                                  30-Jun-13                          30-Jun-12
                                                                                      R'000                              R'000

Net cash (outflows) / inflows from operating activities                              (2 784)                             3 388

Net cash outflows from investing activities                                            (613)                              (886)

Cash and cash equivalents at beginning of period                                     11 711                              9 209
Cash and cash equivalents at end of period                                            8 314                             11 711

Executive chairman’s overview
The year under review has brought a number of challenges, as well as some significant successes. Moneyweb has been
rationalised and re-focused, and is set to strengthen its relationship with the SABC as an independent content provider to it.
A new in-house advertising team has been deployed to take the place of United Stations, which served Moneyweb well for
some seven years. The LookLocal project, and its associated team, was returned to Caxton and CTP Publishers and Printers
Limited (“Caxton”). Mineweb has maintained its status as a leading purveyor of mining news. Moneyweb’s radio
programmes enjoy wide support and the Moneyweb internet offering continues to meet the needs of its community.

After a short 7 month return to the helm of Moneyweb following an extended semi-sabbatical, the Moneyweb founder, Mr
Alec Hogg, resigned in October 2012 on 12 months’ notice, citing differences in his and controlling shareholder, Caxton’s
value systems. The primary dispute with Mr Hogg related to his handling of the migration of the advertising sales function,
and the short-term destruction of Moneyweb’s advertising revenue stream. His resignation meant that his radio presenter
duties had to be taken over by Mr Hilton Tarrant at short notice. I assumed the position of executive chairman. The
transition was seamless and our staff went beyond the call of duty to ensure the business did not suffer from Mr Hogg’s
departure. Our audiences have since shown their loyalty to the Moneyweb brand. We are most grateful for their ongoing

Financial Results
Moneyweb’s primary revenue is derived from advertising sales. In the financial year, Moneyweb went through a transition
from using an external advertising sales agency to building an in-house sales team to work in conjunction with SABC sales.
This transition caused a decline in advertising revenue during the financial year. Revenue for the year includes a net
R3,256m contract termination fee received from Caxton for the termination of the Looklocal contract. This fee ensured
Moneyweb remained in a profit before tax position as at year end. Moneyweb has reflected a net profit before tax of R286k
and headline earnings of R2,6m.

Shareholders are reminded that Moneyweb changed its year end to June from last year and thus the results for the year are
compared to the prior 15 month period.

Moneyweb impaired its intangible assets by R1,36m as these assets related to software development that had become
redundant and therefore of no value. There was also a full impairment of R520k of Moneyweb’s 50% share in Gist
Publications (Pty) Ltd.

Moneyweb has remained debt free. Cash reserves and investments are at a healthy R25,8m. Current assets exceed current
liabilities by a factor of 7.86.

The Company has incurred un-budgeted expenditure in protecting its rights.
Significant progress has been made in prosecuting Mr Danie Wessels, a previous Moneyweb Financial director appointed by
prior management, for fraud. It is anticipated that Mr Wessels may avoid a custodial sentence, as he has made proposals to
repay a portion of the stolen funds to Moneyweb.

During the year, Mr Hogg misappropriated a client database belonging to Moneyweb, which he then used to send mailers to
persons he wished to direct to his own website. Initially Mr Hogg falsely asserted that he owned the intellectual property in
the database. Moneyweb launched an application to interdict Mr Hogg. On receipt of the papers, Mr Hogg capitulated and a
court order against Mr Hogg was obtained.

A grave concern at Moneyweb in the last year has been the repeated use of Moneyweb’s copyright protected material by
competitor Fin24 and its owner, Media24 Proprietary Limited. Subsequent to year end, a court application has been
launched by Moneyweb to declare the copying of the articles to be unlawful and to interdict the continuing publication of
these articles by Fin24 on its website. At the heart of this litigation is the contention by Moneyweb that Fin24 is engaged in
systematic plagiarism on an industrial scale, as part of its business model, to gain a commercial advantage for itself. The
case has a significant public interest component, as Moneyweb has asked the court to determine the boundaries of acceptable
copying of other’s works on the internet, under the guise of content aggregation and fair dealing in copyright.

Moneyweb will look to further grow its relationship with its customers and search for opportunities to provide premium
business and financial content to various SABC radio stations. Moneyweb has as its goal the provision of up to date business
and financial content that speaks to audiences from all walks of life. Moneyweb aims to enhance its current content offerings
with in-depth, relevant, current content to grow audiences and provide the public with insight into South Africa’s business
and financial world.

Moneyweb is revising its strategy on apps as it has not obtained the revenues anticipated. This revision will involve devising
new ways of monetising the apps and at the same time providing value to clients and users.

Moneyweb remains focussed on providing excellent independent business and financial content to its community on its
various platforms. There will be further research into monetising content and establishing strategic partnerships for future

Dividend policy
No dividend has been declared.

Post balance sheet events
There are no material events subsequent to the end of the year that have not been reflected in the audited financial results or
that require further disclosure.

Basis of preparation
Statement of compliance
The audited condensed financial statements for the period ended 30 June 2013 have been prepared in accordance with the
framework concepts and the recognition and measurement requirements of International Financial Reporting Standards
(“IFRS”), the financial reporting guides issued by the South African Institute of Chartered Accountants (SAICA’s)
Accounting Practises Committee (APC) and contains the information required by IAS34: Interim Financial Reporting, and is
in compliance with the requirements of the Companies Act of South Africa and the Listing Requirements of the Johannesburg
Stock Exchange.

The principal accounting policies used in the preparation of the results for the period ended 30 June 2013 are consistent with
those applied for the 15 months ended 30 June 2012 and are in terms of IFRS. International Financial Reporting Standard 8:
Operating Segments is not applicable as the group is a single segment business.

The results have been prepared by Mr P Meyer, the Financial Director of Moneyweb.

Basis of measurement
The audited condensed financial statements for the year ended 30 June 2013 have been prepared on the historical cost basis
with the exception of certain financial instruments that are stated at fair value.

Going concern
The audited condensed financial statements for the year ended 30 June 2013 have been prepared on the going-concern basis
since the directors have every reason to believe that the company has adequate resources in place to continue in operation for
the foreseeable future.

Audit opinion
The annual financial statements, from which these condensed results have been extracted, have been audited by the group’s
auditors BDO South Africa Inc and their unmodified audit opinion is available for inspection at the company’s registered

Changes to the board and committees
On 01 July 2012 Mr P Meyer was appointed financial director, Mr N Sooka as the company secretary and Mr S Masie as an
independent non-executive director.

On 25 October 2012 Mr A Hogg resigned as CEO and Mr P Jenkins took on the role of executive chairman. On 13
November 2012 Mr A Hogg resigned his position as a non-executive director.

On Behalf of the Board
PM Jenkins
Executive Chairman
12 September 2013

Corporate Information

Non-executive directors: LW Sipoyo*; T Ncube*; TD Moolman; PG Greyling; WP van der Merwe*; SC Masie*
*Independent director
Executive directors: PM Jenkins (Executive chairman); P Meyer (Financial Director)
Registered address: 20 The Piazza, Second Floor, Melrose Arch, 2196
Postal address: PO Box 8, Melrose Arch, 2076
Company secretary: N Sooka
Telephone: (011) 344 8600
Facsimile: (011) 344 8601
Transfer secretaries: Computershare Investor Services (Pty) Limited
Auditors: BDO South Africa Incorporated
Designated Adviser: Arcay Moela Sponsors Proprietary Limited

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