Wrap Text
Reviewed Interim Results for six months ended 30 June 2013
SHERBOURNE CAPITAL LIMITED
Incorporated in the Republic of South Africa
(Registration number 2006/030759/06)
Formerly IFCA Technologies Limited
Share code: SHB
("SHB " or ''the company'')
Reviewed interim results for the six months ended
30 June 2013
Condensed Consolidated Statement of Financial
Position
Reviewed Reviewed Reviewed
Assets 30-Jun-13 30-Jun-12 31-Dec-12
R'000 R'000 R'000
Non-Current Assets
Property, plant and equipment
- 77 120
Current Assets - 77 120
Trade and other receivables
Cash and cash equivalents 9,261 7,878 9,261
9,261 7,874 9,261
Total Assets - 4 -
Equity and Liabilities 9,261 7,955 9,381
Equity
Share capital
Accumulated loss 7,683 -14,033 8,404
73,436 70,591 73,436
Current Liabilities -65,753 -84,624 -65,032
Trade and other payables
Bank overdraft 1,578 21,988 977
1,575 21,988 974
Total Equity and Liabilities 3 - 3
9,261 7,955 9,381
Condensed Consolidated statement of Comprehensive Income
Reviewed Reviewed Reviewed
30-Jun-13 30-Jun-12 31-Dec-12
R'000 R'000 R'000
Other income - - 18,578
Operating expenses -721 -8,616 -7,703
Operating profit/ loss -721 -8,616 10,875
Investment revenue - 5 -
Finance costs - -1 -2
Profit on disposal of subsidiary 4,687
Profit/( loss) before taxation -721 -8,612 15,560
Taxation - -
Profit /(loss) from continuing operations -721 -8,612 15,560
Profit /(loss) from discontinued operations - 4,580 -
Profit/ (loss) for the year -721 -4,032 15,560
Attributable to:
Equity holders of the parent
From continuing operations -721 -8,612 15,560
From discontinued operations - 4,580 -
Total comprehensive (loss)/ income -721 -4,032 15,560
Earnings per share (cents)
Basic from continuing operations (cents) -0.09 -0.89 2.91
Diluted basic from continuing operations (cents) -0.09 -0.89 2.91
Basic from all operations (cents) -0.09 -0.89 2.91
Diluted basic from all operations (cents) -0.09 -0.89 2.91
Weighted average number of shares in issue ('000) 781,875 452,869 533,957
Condensed Consolidated Statement of Cash Flows Unaudited Reviewed Reviewed
30-Jun-13 30-Jun-12 31-Dec-12
R'000 R'000 R'000
Cash flows from operating activities - -14,569 -17,376
Cash flows from investing activities - -65 -110
Cash flows from financing activities - 13,931 16,776
Total cash and cash equivalents movement for the period - -703 -710
Cash and cash equivalents at the beginning of the period -3 707 707
Total cash and cash equivalents at end of the period -3 4 -3
Condensed Consolidated Statement of Changes
in Equity
Share
Share capital premium Accumulated Total equity
loss
R'000 R'000 R'000 R'000
Balance at January 01, 2012 302 56,358 -80,592 -23,932
Total comprehensive income for the year - - 15,560 15,560
Issue of shares 480 16,296 - 16,776
Balance at December 31, 2012 782 72,654 -65,032 8,404
Total comprehensive income/( loss) for the period - - -721 -721
Balance at June 30, 2013 782 72,654 -65,753 7,683
Commentary
Basis of presentation and accounting policies
Nolands Inc., the group’s independent auditor, has reviewed the interim financial statements contained in this
interim report and has expressed a modified conclusion on the provisional financial statements. The review report
is available for inspection at the Company’s registered office. The Group’s reviewed provisional results for the six
month period ended 30 June 2013 have been prepared using the accounting policies applied by the Group in its 31
December 2012 reviewed report which are in accordance with International Financial Reporting Standards, IAS 34
Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee, the Companies Act, No. 71 of 2008 of South Africa and the JSE Listings Requirements.
Review opinion
The results for the six month period ended 30 June 2013 have been reviewed by the Company's auditors, Nolands
Inc, and their modified review report is available for inspection at the registered office of the Company, the
address of which is detailed below.
The review report included an emphasis of matter paragraph referring to the going concern note in the interim
financial information. The company has incurred operating losses in the current financial period. The ability of the
company to fund these operational costs moving forward is largely dependent on the ability of the directors to
arrange for alternative sources of funding and the realisation of the income from potential investment
opportunities as more fully described in the note pertaining to going concern.
These conditions, along with the matters set forth in the notes to the accompanying interim financial information,
indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to
continue as a going concern.
Financial overview
The directors wish to report that the results for the six month period ended 30 June 2013 reflect a loss of 0.09
cents per share (30 June 2012: loss of 0.89 cents per share) based on 781 875 000 weighted average shares in
issue (30 June 2012: 452 869 000).
The directors embarked on cost cutting exercises during the course of 2013 to coincide with the Company’s new
vision and restructuring and are pleased to report that operating expenses have decreased to R721 000, for the six
month period ended June 2013, compared with R8.6 million, for the six month period ended June 2012. Further
details pertaining to the restructuring are contained under future prospects and subsequent events.
Earnings per share
The calculation of basic and headline earnings per share is based on the following attributable profits and weighted
average number of shares:
Reviewed Reviewed Reviewed
30-Jun-13 30-Jun-12 31-Dec-12
R'000 R'000 R'000
Continuing operations
Basic profit/(loss) -721 -4,032 15,560
Profit on sale of subsidiary - -4,580 -4,686
Headline profit/(loss) -721 -8,612 10,874
Continuing and discontinued operations
Profit/(loss) attributable to parent shareholders -721 -4,032 15,560
Profit on sale of subsidiary - -4,580 -4,686
Headline profit/(loss) -721 -8,612 10,874
Basic from continuing operations (cents) -0.09 -0.89 2.91
Diluted basic from continuing operations (cents) -0.09 -0.89 2.91
Basic from all operations (cents) -0.09 -0.89 2.91
Diluted basic from all operations (cents) -0.09 -0.89 2.91
Headline earnings per share from continuing operations (cents) -0.09 -1.90 2.04
Diluted headline earnings per share from continuing operations
(cents) -0.09 -1.90 2.04
Headline earnings per share from all operations (cents) -0.09 -1.90 2.04
Diluted headline profit/(loss) per share from all operations (cents) -0.09 -1.90 2.04
Weighted average number of shares in issue (`000) 781,875 452,869 533,957
Total number of shares in issue (`000) 781,875 496,875 781,875
It should be noted that Sherbourne will be issuing new ordinary shares in 2014, for the acquisition of three new
assets, subject to shareholder approval. The number of shares to be issued was not included in the Diluted
earnings per share calculation as it has an anti- dilutive effect. The shares to be issued, for the acquisitions, are as
follows:
Detail Amount
Applemint Properties 116 (Pty) Ltd 70,000,000
Emergent Properties Limited 50,000,000
Siabex (Pty) Ltd 12,500,000
Total 132,500,000
Segmental analysis
The Company does not operate in distinct operating segments and accordingly, no segmental analysis has been
prepared.
Dividends
No dividends were paid or declared for the six month period ended 30 June 2013.
Share capital
No shares were issued during the period under review.
Litigation
There is no litigation pending against the Company.
Directors
The following changes to the board of directors have taken place during the six month period under review and to
the date of this announcement.
Directors Appointed Resigned
ZJ Van Niekerk 14 January 2011 8 April 2013
JPS Bangura 8 April 2013 -
Future prospects and Subsequent events
Shareholders are referred to the quarterly update SENS, dated 22 October 2013, which refers to the three
acquisitions which were made during the course of 2013. The directors are pleased to report that the Company has
successfully acquired, subject to shareholder approval, 100% of the shareholding in:
• Applemint Properties 116 (Pty)Ltd (Applemint)
• Emergent Properties Group Limited (EMG)
• Siabex (Pty) Ltd (Siabex)
The above is in line with the new vision and restructuring which the Company has undergone. The directors
continue to consider possible opportunities and will keep shareholders updated with any future developments in
this regard.
Going concern
The Group reported an operational loss of R720 542 during the period under review, in comparison to the R8.6m
loss suffered by the Group for the six months ended 30 June 2012. The net asset position of the Group was
restored at the reporting date with assets exceeding liabilities by R7.6m in comparison to the shortfall of R14m
reported for the six month period ended 30 June 2012.
The group has not generated revenue for the last two financial years. The reason for such is that the Company
changed its investment strategy and for the last two years has been seeking preferable investment opportunities
that will result in maximizing returns to its shareholders.
.
The directors significantly reduced the Company’s operating expenses and through the collection of a significant
portion of the Company’s trade receivables, is confident that the Company currently has adequate resources to
fund these operating costs however it is vital that either the investment opportunities referred to above
materialise (refer to “Future prospects subsequent events” paragraph) or alternatively the directors find
alternative sources of finance in the short-term.
The success of these investment opportunities is dependent on the following factors:
• Shareholder approval
• Raising of the finance needed for the development of the top structures
Following shareholder approval Sherbourne will own 100% of the shares in the investee companies listed above
and the operating costs of the holding company will be funded via management fees paid by these subsidiaries.
Sherbourne realised that there was a need for student accommodation throughout the country and was provided
with strategically located pieces of property for such developments. The vision is to develop these properties into
“Student Villages” where students are provided with safe, affordable accommodation, close to the establishments
where they are studying together with the development of ancillary services such as fast food outlets, ATM’s and
coffee shops for the students and surrounding neighbourhoods.
The acquisition of EMG allows Sherbourne to gain access to overseas funding, primarily structured for
infrastructure development, as well as a significant local funding line through a major commercial bank. EMG has
the rights to a number of property developments, specifically focused on student accommodation and data
centres. EMG will be providing the funding arm for the top-structure building finance for the Applemint and Siabex
projects.
As Sherbourne is purchasing the land and constructing the additions on said land, the Net Asset Value for
shareholders will increase every year. Each student will be paying a monthly rental to stay in the “Student Village”
and this, along with rental income from the ancillary services, should provide shareholders with strong annuity
earnings per share.
As these deals are largely dependent on shareholder approval and the raising of finance together with the need
for the company to continue to meets its operating expenses from existing cash resources as they fall due, these
conditions give rise to a material uncertainty which may cast significant doubt about the company’s ability to
continue as a going concern and, therefore that it may be unable to realise its assets and discharge its liabilities in
the normal course of business.
The board of directors of the Company are confident that, especially in view of the restructured operational
overheads, as well as the significant progress achieved with the developments as mentioned above, the company
has positioned itself strongly, not only to fund its ongoing operations but also to fund the property developments
which will provide the platform to strong earnings and cash growth.
The financial statements are prepared on the basis of accounting policies applicable to a going concern. This basis
presumes that the realisation of assets and settlement of liabilities will occur in the ordinary course of business.
By order of the Board
CW Clarke
Non- Executive Chairman
19 December 2013
Sandton
Directors:
CW Clarke (Chairman)*, KB Motshabi*, MW Palmer*,
C Whittle* (*Independent non-executive)
Registered office
th
10 Floor, 41 Stanley Avenue, Milpark, South Africa
Transfer office
Link Market Services (Pty) Ltd, P.O. Box 4844, Johannesburg, 2000, South Africa
Company Secretary
Statucor (Pty) Ltd, 22 Wellington Road, Parktown, 2193, South Africa
Designated Adviser
Bridge Capital Advisors (Pty) Ltd, 27 Fricker Road, Illovo, 2196, South Africa
Date: 20/12/2013 09:00:00 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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