<B>Salient figures</B>
VenFin results for the six months to 31 December 2002.
Figures for the six months to 30 September 2001 in parentheses:
Revenue: R163m (R94m)
Operating profit: -R13m (-R23m)
Net interest income: R75m (R61m)
Share of net profit of associated companies: R350m (R276m)
Exceptional items: R362m (-R18m)
Profit before tax: R711m (R37m)
Net profit: R588m (-R32m)
Headline earnings: R302m (R243m)
Cash generated from operations: -R58m (R145m)
Current assets: R1.46b (R1.2b)
Cash and equivalents: R1.4b (R1.17b)
Current liabilities: R61m (R39m)
NAV per share (book value): R17.72 (R15.32)
The profit for the six months to December represents a substantial turnaround from the R32 million loss incurred at the previous interim stage, although the two periods are not directly comparable because of a change in year-end. The previous interim period covered the six months to 30 September 2001.
During the accounting period VenFin owned a 13.5% stake in Vodacom, although it increased it to 15% later. Vodacom accounted for R165 million or about 55% of the group`s headline earnings.
The other main contributor to headline earnings was the 33.3% stake in R&V Holdings, whose subsidiary R&V Technology subscribed for a $100 million seven-year convertible bond issued by Dimension Data. R&V contributed R94 million or about 31% to group headline earnings.
CEO Josua Malherbe says the group`s other investments, which include technology and telecommunications companies such as Psitek, Intervid and Tracker, performed as expected in difficult market conditions.
Overall, the investments outside Vodacom and R&V incurred a headline loss of R5 million, compared with a R3 million profit at the end of September 2001.
"The majority of these investments are in an early development stage and expected to contribute to the group`s earnings over the medium- to long-term," Malherbe says. VenFin`s Investments include Fundamo, eCompany and iTouch.
Malherbe says VenFin invested R2.5 million in Idion Technology Holdings in November. At the end of the year its interest in Idion was 2.2%.
Unresolved issue
An issue relating to a loan to the parent of free-to-air broadcaster e-tv has yet to be resolved. During April 2000 VenFin granted an indirect, interest-free loan of R281.8 million to Sabido, while an additional R38.6 million was advanced to Hosken Consolidated Investments (HCI) for e-tv in the 2002 financial period.
During January last year, VenFin advanced a further interest-bearing and fully secured loan of R280 million to HCI.
In September last year R199.4 million of this interest-bearing loan was converted into an interest-free loan to HCI for e-tv. The balance of the loan was repaid on 31 December.
If the interest-free loans to Sabido and HCI were to be converted into equity in Sabido on that date, VenFin`s indirect interest in e-tv would be 33.1%.
However, uncertainty surrounds the matter since the Independent Communications Authority of SA has not yet approved the conversion of the loan to equity.
Exceptional items on the income statement consist mainly of the net capital surplus on the disposal of Richemont depositary receipts.
The VenFin share was trading at R15.90 on the JSE this morning, 10c or 0.63% down from yesterday`s close.
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