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HSP - Holdsport Limited - Unaudited pro forma statement of financial

Release Date: 06/10/2011 15:45
Code(s): HSP
Wrap Text

HSP - Holdsport Limited - Unaudited pro forma statement of financial position and statement of comprehensive income of Holdsport Holdsport Limited (Incorporated in the Republic of South Africa) (Registration number 2006/022562/06) JSE share code: HSP ISIN: ZAE000157046 ("Holdsport" or the "Company") UNAUDITED PRO FORMA STATEMENT OF FINANCIAL POSITION AND STATEMENT OF COMPREHENSIVE INCOME OF HOLDSPORT Further to the Company`s interim results, which were announced on SENS on 27 September 2011, the unaudited pro forma statement of financial position at 31 August 2010 and the statement of comprehensive income of Holdsport and its subsidiaries for the six months then ended are set out below. The unaudited pro forma financial information for the six months ended 31 August 2010 has been prepared to show the impact of the conversion of the shareholders` loans and the purchase of the minority shareholder`s interest in a subsidiary of Holdsport (the "Loan Conversions"). The unaudited pro forma statement of financial position and statement of comprehensive income have been prepared for illustrative purposes only and because of its nature may not fairly present Holdsport`s financial position and results of operations, nor the effect and impact of the Loan Conversions going forward. It has been assumed for purposes of the unaudited pro forma consolidated statement of comprehensive income and statement of financial position that the Loan Conversions took place with effect from 1 March 2010 for the purpose of the statement of comprehensive income and at 31 August 2010 for purposes of the statement of financial position. The directors of the Company are responsible for the compilation, contents and preparation of the unaudited pro forma financial information contained in the unaudited interim condensed consolidated results for the six months ended 31 August 2011 and for the financial information from which it has been prepared. Their responsibility includes determining that: the unaudited pro forma financial information has been properly compiled on the basis stated; the basis is consistent with the accounting policies of Holdsport; and the pro forma adjustments are appropriate for the purposes of the unaudited pro forma financial information disclosed in terms of the Listings Requirements. The unaudited pro forma consolidated statement of financial position and the unaudited pro forma consolidated statement of comprehensive income are presented in a manner consistent in all respects with IFRS and with the accounting policies upon which the historical financial information has been prepared. The unaudited pro forma statement of financial position and statement of comprehensive income as set out below should be read in conjunction with the independent reporting accountants` report set out below. The reporting accountants report is available for inspection at the Company`s registered office during normal business hours. UNAUDITED PRO FORMA STATEMENT OF FINANCIAL POSITION OF HOLDSPORT The unaudited pro forma statement of financial position set out below presents the effects of the Loan Conversions on the financial position of Holdsport at 31 August 2010 based on the assumption that the Loan Conversions took place with effect from 31 August 2010: Unaudited pro forma statement of financial position "Before" the Effect of "After" the
Loan the Loan Loan Conversions Conversions2 Conversions Pro forma3 Unaudited1
31 August 31 August R`000 2010 2010 ASSETS Non-current assets 699,731 - 699,731 Plant and equipment 42,817 - 42,817 Goodwill and other intangible 656,914 - 656,914 assets Current assets 276,451 - 276,451 Inventories 214,880 - 214,880 Trade and other receivables 16,959 - 16,959 Taxation 5,535 - 5,535 Cash and cash equivalents 2.2 39,077 - 39,077 Total assets 976,182 - 976,182 EQUITY AND LIABILITIES Share capital 2.1 19 229,293 229,312 Other reserves 110,141 (110,141) - Retained earnings 244,851 70,945 315,796 Equity attributable to owners 355,011 190,097 545,108 of the Company Non-controlling interest 2.2 878 (878) - Total equity 355,889 189,219 545,108 LIABILITIES Non-current liabilities 461,736 (219,219) 242,517 Interest bearing liabilities 163,078 - 163,078 Non-interest bearing 199,642 (199,642) - liabilities 2.1 Deferred taxation 81,072 (19,577) 61,495 Operating lease accrual 17,944 - 17,944 Current liabilities 158,557 30,000 188,557 Trade and other payables 86,948 - 86,948 Derivative instruments 8,654 - 8,654 Current portion of interest bearing liabilities 22,955 - 22,955 Current portion of non-interest bearing 40,000 30,000 70,000 liabilities 2.1 Total liabilities 620,293 (189,219) 431,074 Total equity and liabilities 976,182 - 976,182 Number of ordinary shares in 19,400 23,750 43,150 issue (`000) 2.3 Net asset value per share 1,263 (cents) Net tangible asset value per (91) share (cents) NOTES TO THE UNAUDITED PRO FORMA STATEMENT OF FINANCIAL POSITION 1. The financial position as at 31 August 2010 as per the unaudited interim condensed consolidated results of Holdsport for the six months ended 31 August 2011. 2. Adjustments for the effect of the Loan Conversions reflect the following: 2.1 The shareholder loans at 31 August 2010 totals R239.6 million, net of a fair value adjustment of R59.7 million. The total outstanding shareholders` loans of R299 million will be extinguished by way of a cash settlement of R70.0 million whereafter the balance of R229.3 million will be converted into share capital on the Loan Conversions date through the subscription in Shares in Holdsport as is equal to the face value of each shareholder`s loan at the date of conversion. See also 2.3 below. 2.2 Holdsport acquired the remaining minority stake in one of its subsidiaries, First Ascent, prior to the Loan Conversions Date for a total consideration of R3.1 million. The excess of R2.1 million paid over the minority`s share in the net book value of the assets of the Company has been charged to retained earnings. 2.3 In order to facilitate the listing and for the purpose of converting the shareholders loans described in 2.1 above, the number of issued shares of Holdsport was increased by 23,750,330 shares. The increase will be made by way of issuing 6,844,306 shares for the repayment of the shareholders` loans, and 16,905,914 new shares by means of a share split. 3. The financial position after taking into account the Loan Conversion. UNAUDITED PRO FORMA STATEMENT OF COMPREHENSIVE INCOME OF HOLDSPORT The unaudited pro forma statement of comprehensive income set out below presents the effects of the Loan Conversions on the results of Holdsport for the six months ended 31 August 2010 based on the assumption that the Loan Conversions took place with effect from 1 March 2010: Unaudited pro forma statement of comprehensive income "Before" Effect of "After" the the Loan the Loam Loan
Conversions Conversions Conversions 2 Pro forma3 Unaudited1
6 months 6 months ended 31 ended 31 August 2010 August 2010 R`000 Revenue 509,993 - 509,993 Cost of sales (262,315) - (262,315) Gross profit 247,678 - 247,678 Other income 1,666 - 1,666 Trading expenses (166,720) - (166,720) Operating profit 82,624 - 82,624 Finance income 2,864 - 2,864 Finance cost 2.1 (29,678) 15,725 (13,953) Profit before taxation 55,810 15,725 71,535 Taxation 2.1 (15,918) (4,403) (20,321) Profit for the year 39,892 11,322 51,214 Attributable to: Equity holders of the parent 39,614 11,600 51,214 Non-controlling interest 2.2 278 (278) - Profit for the year 39,892 11,322 51,214 Basic and diluted earnings per 109.1 118.6 ordinary share (cents) 4.1 Headline earnings per ordinary 108.7 118.4 share (cents) 4.2 Core headline earnings per 129.5 130.1 ordinary share (cents) 4.3 NOTES TO THE UNAUDITED PRO FORMA STATEMENT OF COMPREHENSIVE INCOME 1. Statement of comprehensive income of Holdsport as per the unaudited interim condensed consolidated statement of comprehensive income for the six months ended 31 August 2011. 2. Adjustments for the effect of the Loan Conversions reflect the following:
2.1 Imputed interest and fair value adjustments on the interest free shareholders` loans totalling R15.7 million, before a deferred taxation credit of R4.4 million, were expensed in the period. These loans will be converted to share capital as part of the Loan Conversions and will no longer have any effect on the statement of comprehensive income. 2.2 Holdsport purchased the entire minority interest in one of its subsidiaries, First Ascent, prior to the Loan Conversions Date for a total consideration of R3.1 million. The profit attributable to the minority shareholder of R278 000 was therefore reversed. 3. The "After" financial information reflects the financial effects after taking into account the Loan Conversions described above. 4. Basic and diluted earnings per share (EPS), headline EPS and Core headline EPS
4.1 Basic and diluted earnings per share have been calculated using a weighted average number of 36.306 million shares in issue for the period ended 31 August 2010. A weighted average number of shares of 43.150 million was used to calculate basic and diluted EPS for the period ended 31 August 2010 after the Loan Conversions. There is no difference between basic and diluted EPS. 4.2 Reconciliation of headline earnings per share: "Before" the Loan "After" the Loan Conversions Conversions
6 months ended 31 Pro forma 6 August 2010 months ended 31 August 2010 R`000 Profit attributable to 39,614 51,214 equity holders of the parent Adjusted for: Profit on sale of plant and (119) (119) equipment Headline earnings (R`000) 39,495 51,095 Weighted average number of 36,306 43,150 shares (`000) Headline EPS (cents) 108.7 118.4 4.3 Holdsport calculates the measure of core headline earnings per share for management purposes as follows: "Before" the Loan "After" the Loan Conversions Conversions
R`000 6 months ended 31 Pro forma 6 months August 2010 ended 31 August 2010 Headline earnings 39,495 51,095 Adjusted for: Amortisation of 4,519 4,519 intangibles, net of tax Accrual for straight- 546 546 lining of leases, net of tax Fair value adjustment on 11,322 loans Core headline earnings 55,882 56,161 (R`000) Weighted average number 36,306 43,150 of shares (`000) Core headline EPS 130.1 (cents) 129.54.4 4.4 The number of shares in issue for purposes of core headline earnings per share is the number of shares in issue after the Loan Conversions i.e. 43 150 220 shares. Cape Town 6 October 2011 Sponsor: UBS South Africa (Pty) Ltd Date: 06/10/2011 15:45:01 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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