Delays trim Aqua's payout

By Iain Scott, ITWeb group consulting editor

Johannesburg, 02 Oct 2003

Aqua Online's initial distribution to shareholders will be less than initially expected as a result of delays and unforeseen costs related to the group's plan to delist from the JSE.

The delisting proposal, which is still awaiting regulatory approval, involves a series of transactions to dispose of the underlying gaming and enablement businesses as going concerns.

CEO Brent Shahim says while deals have been secured, the implementation of the proposed transaction has been delayed by Aqua's inability to receive certain regulatory approvals. However, he says the board is confident the approvals are imminent.

The delays and unforeseen costs mean the group is no longer able to make an initial distribution of 14c a share as originally expected. "The board expects the revised distribution dividend to be at least 12c per share," he says.

The group's revenue for the year to 30 June plunged to R29.75 million from a previous R65.67 million although the loss before interest, taxation, depreciation and amortisation improved from R11.77 million to R3.46 million. The headline loss per share was flat at 4.46c.

Shahim says Aqua experienced stronger second-half results. "We have spent a great deal of time on cutting costs and focusing the strategy of the business over the last year and this has started to pay some dividends. The group's divisions have turned cash positive, although growth has been flat. This has managed to reduce the group's operational risk."

He says that despite the reduced risk, the board does not expect short- to medium-term conditions to improve materially and believes that the proposed delisting is the best strategic alternative to allow shareholders to maximise and protect value in the short- to medium-term.