Explorer Corporation Holdings saw its cash and cash equivalents fall from R21.94 million to R2.41 million in the six months to 30 June 2000 as a result of development expenditure.
Revenue for the period more than doubled to R5.91 million (R1999: R2.3 million). A profit of R1.97 million (R352 000) before finance costs and depreciation was recorded.
The deduction of finance costs and depreciation left the company with a net profit of R126 000 (R167 000).
The balance sheet shows an increase in intangibles from R8.67 million to R30.08 million, which CE Aaron Stanger says is the result of additional development expenditure on loyalty programmes, the brand, and new publications.
Loans rose to R7.22 million (R1.33 million) due to additional purchases into the share incentive trust.
The cash flow from operating activities increased to R496 000 from a previous outflow of R482 000. A negative cash flow from investing activities of R16.38 million compares with an outflow of R9.48 million, while the cash flow from financing activities changed from R36.12 million to a negative R3.65 million.
"The six-month trading period ended 30 June 2000 produced income in line with previous results, mainly due to the fact that restrictions were placed on the funding of the credit card debtors book by Mercantile Bank in the first quarter of this financial year," says Stanger.
He says the group`s brand has gained "phenomenal" customer recognition and acceptance, and is seeking a third-party investor for future funding of the credit card debtors book.
Mercantile Bank and Explorer are to consolidate their respective card processing and back office administrative activities associated with the Explorer Visa credit card.
Stanger says Explorer will continue to share in revenue streams associated with the credit card and the consolidation will not have a material effect on the returns of the credit card book.
He adds that the future prospects of the company are dependent on discussions underway with various potential investors.
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