VUNANI LIMITED (Incorporated in the Republic of South Africa by monkey6

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									VUNANI LIMITED (Incorporated in the Republic of South Africa) (Registration number 1997/020641/06) JSE code: VUN ISIN: ZAE000110359

(“Vunani” or “the company” or “the group”)

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2009

“We are pleased with our improved performance, which is mainly due to the higher valuations in our empowerment investments. Our financial services business produced a solid result despite the difficult economic conditions. We are well on the path to concluding the company’s recapitalisation which will be a major step forward and we continue to invest in our business, having finalised two acquisitions in the last six months, in order to build a platform for sustainable future growth” said Ethan Dube (Chief Executive Officer).

SALIENT FEATURES

Signed Heads of Agreement with funders which will include the capitalisation of R313,6m debt. Vunani's empowerment investments turn in positive fair values. Financial Services attributable profit was down 23%, due to difficult

economic conditions.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the 6 months ended 30 June 2009

Figures in R'000s

Notes

Unaudited 6 months 30 Jun 2009

Unaudited 6 months 30 Jun 2008

Audited 12 months 31 Dec 2008

Revenue Other income Cost of property developments sold Operating expenses

1

74,785 14,399

105,177 1,284 (34,097) (46,925)

223,065 18,765 (52,097) (116,599)

1

(18,032) (57,249)

Operating profit Investment revenue Fair value adjustments Income from associates (before tax) Finance cost 2

13,903 8,533 (9,132) 6,952 (108,001)

25,439 6,593 (338,919) 1,248 (88,334)

73,134 17,552 (854,915) 26,539 (201,505)

Net loss before taxation Taxation Net loss for the period

(87,745) 32,900 (54,845)

(393,973) 76,302 (317,671)

(939,195) 155,073 (784,122)

Net loss for the period Other comprehensive income Total comprehensive for the period loss net of tax

(54,845) (54,845)

(317,671) (317,671)

(784,122) (784,122)

(Loss) / profit attributable to: Equity holders of Vunani Limited Minority interest 49,872 4,973 54,845 (319,679) 2,008 (317,671) (707,845) (76,277) (784,122)

Total comprehensive (loss)/income : Equity holders of Vunani Limited Minority interest Total comprehensive period loss for the 54,845 (317,671) (784,122) 49,872 4,973 (319,679) 2,008 (707,845) (76,277)

Earnings per share

Basic (loss)/earnings per share (cents) Diluted (loss)/earnings per share (cents) Headline (loss)/earnings per share (cents) Diluted headline (loss)/earnings per share (cents)

(4.24) (4.24) (3.18) (3.18)

(26.04) (26.54) (26.04) (26.54)

(60.7) (60.7) (58.8) (58.8)

Dividends Dividends per share -

CONDENSED CONSOLIDATED BALANCE SHEET As at 30 June 2009

Figures in R'000s ASSETS Non current assets Investment property Property and equipment Goodwill Investments in associates Other investments Deferred tax Other non current assets Other intangible assets

Notes

Unaudited 6 months 30 Jun 2009

Restated unaudited 6 months 30 Jun 2008

Audited 12 months 31 Dec 2008

793,078 8,065 75,948 192,862 3 614,535 59,602 2,556 5,142 1,751,788

881,606 5,416 104,550 155,191 1,431,967 1,480 2,580,210

817,132 5,540 75,596 206,077 488,828 24,517 1,891 10,284 1,629,865

Current assets Other investments 3 180,531

Inventory Loans to group companies Trade and other receivables Accounts receivable from trading activities Trading securities Cash and cash equivalents

8,362 7,258 196,861 854 5,910 219,245

23,863 33,387 201,040 327 26,194 284,811 2,865,021

6,406 4,890 161,066 456 37,588 390,937 2,020,802

Total assets

1,971,033

EQUITY Share capital Non-distributable reserve Accumulated loss / retained earnings Equity attributable to equity holders Minority interest 250,263 128,312 (274,790) 103,785 89,755 251,144 211,082 84,361 546,587 170,693 250,263 180,524 (277,130) 153,657 94,728

Total equity LIABILITIES Non current liabilities Other financial liabilities Deferred tax 3

193,540

717,280

248,385

1,476,681 44,874 1,521,555

1,744,292 103,406 1,847,698

1,003,335 48,930 1,052,265

Current liabilities Other financial liabilities Receiver of revenue Trade and other payables 3 6,999 63,606 32,551 7,440 63,227 486,659 3,258 79,797

Accounts payable from trading activities

185,333 255,938

196,825 300,043 2,147,741 2,865,021 1,227,636 1,204,502 43.5 35.0

150,438 720,152 1,772,417 2,020,802 1,176,444 1,166,516 13.1 5.8

Total liabilities Total equity and liabilities Shares in issue (adjusted for treasury shares held by the company) (000's) Weighted average number of shares in issue (000's) Net asset value per share (cents) Net tangible asset value per share (cents)

1,777,493 1,971,033 1,176,444 1,176,444 8.8 2.4

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the 6 months ended 30 June 2009

Figures in R'000s Balance as at 31 December 2007 (restated) Comprehensive (loss)/income for the period Issue of shares Purchase of treasury shares Other change in equity Total changes Balance as at 30 June 2008 (restated) Comprehensive (loss)/income for the period Purchase of treasury shares Dividends paid to minorities Total changes Balance as at 31 December 2008 Comprehensive (loss)/income for the period

Total attributable to equity holders 809,257 (319,679) 57,184 (4,067) 3,892 (262,670) 546,587 (392,056) (874) (392,930) 153,657 (49,872)

Minority interest 171,204 2,008 (2,519) (511) 170,693 (75,766) (199) (75,965) 94,728 (4,973)

Total equity 980,461 (317,671) 57,184 (4,067) 1,373 (263,181) 717,280 (467,822) (874) (199) (468,895) 248,385 (54,845)

Total changes Balance as at 30 June 2009

(49,872) 103,785

(4,973) 89,755

(54,845) 193,540

CONDENSED CONSOLIDATED CASH FLOW STATEMENT For the 6 months ended 30 June 2009

Figures in R'000s Cash (outflows)/inflows from operating activities Cash inflows/(outflows) from investing activities Cash (outflows)/inflows from financing activities Decrease in cash and cash equivalents

Unaudited 6 months 30 Jun 2009 (27,335) 27,637 (31,980) (31,678)

Unaudited 6 months 30 Jun 2008 15,928 (361,441) 284,303 (61,210)

Audited 12 months 31 Dec 2008 56,144 (298,022) 192,062 (49,816)

Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

37,588 5,910

87,404 26,194

87,404 37,588

SEGMENTAL REPORTING For the 6 months ended 30 June 2009

Figures in R'000s Revenue Financial Services Investment Services

Unaudited 6 months 30 Jun 2009

Unaudited 6 months 30 Jun 2008

Audited 12 months 31 Dec 2008

86,637 (9,132) 77,505

80,205 (338,919) (258,714)

233,824 (854,915) (621,091)

Attributable (loss) / profit for the year Financial Services Investment Services 22,520 (77,365) (54,845) Total assets Financial Services 296,765 402,437 294,041 29,241 (346,912) (317,671) 88,514 (872,636) (784,122)

Investment Services

1,674,268 1,971,033

2,462,584 2,865,021

1,726,761 2,020,802

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL RESULTS

1. Revenue includes the gross amount of property sales, the costs of which are disclosed separately in the income statement 2. Fair value adjustments

Figures in R'000s Investment property Financial assets and liabilities designated at fair value through profit and

Unaudited 6 months 30 Jun 2009 (27,000) 17,868 (9,132)

Unaudited 6 months 30 Jun 2008 (2,855) (336,064) (338,919)

Audited 12 months 31 Dec 2008 (72,713) (782,202) (854,915)

3. Vunani uses an independent valuer to determine the fair values of funded listed investments and their connected liabilities. The value of the listed investments is determined with reference to the market value of

the share price at the relevant period end. Both the listed and unlisted investments are designated at fair value through profit and loss

("FVTPL"). In 2007 the fair value of liabilities, relating to the above investments were added to the value of the respective investments. These amounts were reclassified in 2007 to be included in the fair value of the liability. The 2008 figures have been correctly classified. The debt related to the investments is stated at fair value. Debt covenants

breached during 2008 led to the value of the sureties being provided in current liabilities. On 30 June 2009 the company entered into a Heads of Agreement with its funders which will result in these sureties being severed or limited value thereby of the reducing sureties group and risk and reversing subject to the the

breaches.

The

guarantees

breach, and disclosed as current liabilities in December 2008, have now been disclosed as non-current liabilities in compliance with the Heads of Agreement.

OVERVIEW

The directors of Vunani present the unaudited interim financial results for the six months ended 30 June 2009 (“the interim period”). Vunani is a black-owned and managed financial services enterprise with a balance sheet underpinned by various investments in equities and property assets.

During the first six months of this financial year markets stabilised and then rallied resulting in a share price recovery. In general, the listed shares showed the beginnings of a recovery and therefore an improvement in asset values. The decrease in interest rates that commenced in December 2008 also contributed favourably to the results. The positive influence of these factors was, however negated by the slow recovery in property

valuations, which normally lag market recoveries. This resulted in some fair value losses, but to a far lesser degree than experienced during the same period last year.

Subsequent to the six months ended June 2009 the company concluded the acquisition of an indirect 20.4% equity investment in Civils 2000 Holdings (Proprietary) Limited ("Civils"). The Civils transaction became The

unconditional on 9 July 2009 as all the conditions precedent was met.

"agterskot" in respect of the Edge Holding Company (Proprietary) Limited acquisition concluded in March 2008 was paid via the issue of 114 367 925 Vunani shares on 27 July 2009.

FINANCIAL RESULTS

Revenue decreased during the interim period by 28.9% to R74.8 million (30 June 2008: R105.2 million) mainly as a result of the slow down in the financial markets and our scheduled cutback in property developments in response to the decline in property markets. Operating profit decreased by 45.3% to R13.9 million (30 June 2008: R25.4 million) mainly due to the amortisation of intangible assets on the acquisition of Vunani Corporate Finance in 2008. The increase in expenses was largely due to the

acquisition of new businesses in the second half of 2008, included for the full interim period in 2009. The fair value adjustments after tax of R9.1 million (30 June 2008: R338.9 million) was an improvement from last year. This was largely due to the recovery in share prices during the six months ended 30 June 2009. Finance costs increased to R108 million (30 June 2008: R88.3 million) due to increased borrowings in the second half of 2008.

Vunani’s total assets decreased to R1.97 billion (31 December 2008: R2.02 billion) as a result of fair value adjustments. The increase in Accounts receivable from trading activities is off-set by a similar increase in Accounts payable from trading activities. Cash resources decreased as a result of the deterioration in trading conditions and the shortfall in the financing of investing activities from prior periods.

BASIS OF PRESENTATION

The interim results have been prepared in accordance with the recognition and measurement requirements of International Financial Reporting Standards

(IFRS), the Companies Act (Act 61 of 1973), as amended, and the presentation and disclosure requirements of International Accounting Standards (IAS 34 : Interim Financial Reporting). The accounting policies as set out in the audited financial statements for the year ended 31 December 2008 have been consistently applied.

These consolidated interim financial statements incorporate the financial statements of the company, its subsidiaries and special purpose entities that, in substance, are controlled by the group. Results of subsidiaries are included from the effective date of acquisition or up to the effective date of disposal. All significant transactions and balances between group

enterprises are eliminated on consolidation.

STATEMENT ON GOING CONCERN

In terms of an announcement dated 20 March 2009, Vunani shareholders were advised that the decline in the share prices of certain of Vunani’s

empowerment investments resulted in a breach of certain of the debt covenant ratios with a number of financial institutions which funded Vunani’s

participation in such investments. Vunani's ability to continue as a going concern is dependent on the restructuring of its debt. Vunani and its lenders entered into a Heads of Agreement on 30 June 2009, to restructure Vunani’s existing debt and recapitalise Vunani to the extent of R313.6 million, to ensure the continued sustainability of Vunani and its subsidiaries. The

detailed implementation of this restructure is currently under way and is expected to result in a formal circular being sent to shareholders.

SEGMENT RESULTS

The

Financial and

Services

businesses Revenues

comprise increased

Asset to

Management,

Investment R80.2

Banking

Properties.

R86.6million

(2008:

million) however profits after tax declined to R22.5 million (2008: R29.2 million) due to increased operating expenses largely resulting from the

inclusion of businesses acquired in the second half of the 2008 financial year, the expenses of which are now included for a full year for the first time. Financing costs also contributed materially to this decline. The Asset Management business has continued to show growth as expected – net profit after tax grew to R4,8 million (2008: R0.4 million). The Investment Banking sector was the worst effected by the downturn in the economy with the net profit after tax declining to a loss of R9.5 million (2008: profit R2.4 million). Properties held their performance at a net profit after tax of R27.0 million (2008: R26.5 million).

Investment

Services

continued

to

feel

the

decline

in

global

market

conditions. The sector delivered R77.4 million (2008: R346.9 million) net loss after tax. The decline in markets, however, appears to be slowing which

bodes well for the group’s investments.

AUTHORISED AND ISSUED SHARE CAPITAL

The authorised share capital was increased from 2,000,000,000 ordinary shares of R 0.0001 each to 10,000,000,000 ordinary shares of R 0.0001 each on 22 July 2009. At 30 June 2009 there were 1,234,250,000 (30 June 2008:

1,227,636,477) ordinary shares in issue.

DIVIDENDS

No dividends were declared or paid to shareholders during the 6 months ended 30 June 2009 (2008: R nil).

PROSPECTS

The recovery in the equity markets experienced since March this year has had a positive impact on the economy; however the full impact of this recovery has not yet been fully felt in the Vunani businesses. Vunani remains

committed to deliver on its vision to become the pre-eminent medium sized black-owned and managed financial services business. The directors expect trading conditions to remain volatile in the short to medium term and will

use

this

as

an

opportunity

to

continue

to

build

a

platform

for

the

sustainable future growth in the core businesses.

CHANGE TO THE BOARD OF DIRECTORS

Mr AF Pieterse, who was due to retire by rotation at the company’s annual general meeting held on 20 August 2009, decided not to make himself available for re-election and accordingly his appointment as a non-executive director of the company terminated on that date. There were no other changes to the Board of Directors during the interim period ended 30 June 2009.

EG Dube (Chief Executive Officer)

WG Frawley (Chief Financial Officer)

10 September 2009

CORPORATE INFORMATION

EXECUTIVE DIRECTORS
E Dube WG Frawley BM Khoza NM Anderson CE Chimombe-Munyoro

NON-EXECUTIVE DIRECTORS WC Ross (Chairman) (Independent) BA Khumalo (Independent) NS Mazwi (Independent)

Registration number: 1997/020641/06 Registered address: Vunani House, Athol Ridge Office Park, 151 Katherine Street, Sandown, Sandton, 2196 Postal address: PO Box 652419, Benmore 2010 Company secretary: WG Frawley CA(SA) Telephone: +2711 263 9500 Facsimile: +2711 784 3095 Transfer secretaries: Computershare Investor Services (Proprietary) Limited Lead Designated Adviser: Grindrod Bank Limited

Joint Designated Adviser: Vunani Corporate Finance


								
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