Loss-making Spicer pins hopes offshore

Johannesburg, 22 Sept 2000

Spicer Holdings, which has reported a headline loss of R17.1 million for the year to 30 June 2000, is pinning its hopes on its two offshore operations after disposing of all its local interests.

"This has been a very disappointing period for the management team and for shareholders," says executive chairman Sas du Toit.

"But we have repositioned the group and we are now entirely focused offshore, and we are positioning ourselves for a return to positive trading in the medium term."

The group has disposed of all its local operations in a debt-reducing exercise and in line with what it says is a change in focus.

The remaining assets are Inter IT-Konsult in Sweden and MIS-CDS in the UK.

Although Inter had a successful year, MIS-CDS, where gross mismanagement was uncovered in February, reported "very disappointing" results.

"As a result, I have made the necessary moves at management level and have been acting MD from February," says Du Toit. "I spend 80% of my time managing this operation and helping it reach its potential. It should soon be able to compete successfully in the rapidly growing IT security market."

Total revenue fell 34.7% to R160.3 million (1999: R245.4 million). Continued operations contributed R56.2 million to this figure.

An operating loss of R12.6 million compares with a previous profit of R36 million. Depreciation and a negative finance income figure contributed to a pretax loss of R21.3 million (R39.2 million profit).

The R17.1 million headline loss compares with earnings of R36 million the previous year. This translates to a headline loss per share of 4.2c (10.3c earnings).

The balance sheet shows an increase in accounts receivable, from R26.2 million to R87.7 million. Du Toit says this includes an amount of R70 million, which was due on the sale of Spicer Specialised Services, and which was received after the year-end.

Bank and cash balances at the year-end totalled R26 million (R25.6 million). Current liabilities rose to R113.6 million (R57.7 million).

Du Toit says Spicer's focus in the next 12 months is to grow MIS-CDS, retain key personnel and unlock the underlying value of its assets for shareholders. Various options are being investigated and announcements will be made in due course, he adds.

Spicer's share price was unchanged at 12c by midmorning today.