CCI Holdings says its future depends on the success of talks aimed at restructuring its long-term debt.
<B>Salient figures</B>
CCI Holdings results for the year to 31 December 2002.
Figures for the 10 months to 31 December 2001 in parentheses:
Revenue: R10.12m (R7.82m)
Operating profit: -R0.95m (R2.25m)
Profit before tax: -R2.45m (-R5.83m)
Attributable profit: -R2.45m (-R5.83m)
HEPS: -0.5c (1.05c)
EPS: -0.73c (-2.88c)
Current assets: R2.34m (R5.08m)
Cash and equivalents: R0.11m (R1.24m)
Current liabilities: R5.28m (R7.35m)
Cash inflows from operating activities: -R21 469 (R754 895)
The group, formerly Y2KTec, has not been meeting its commitments with regard to long-term debt repayments and auditor KPMG has warned of a material uncertainty regarding CCI`s ability to continue as a going concern.
CCI provides a range of professional business services to mainly small and medium enterprises: monthly accounting, administration, payroll and pension administration, company secretarial, taxation compliance, business consulting and sourcing of finance, payroll and human resources software.
CCI`s latest financial results, for the year to 31 December 2002, show an operating loss of R0.95 million, compared with a R2.25 million profit for the 10 months to end-December 2001.
A headline loss of 0.5c a share compares with headline earnings of 1.05c a share in the previous 10-month period.
CEO Michael Purves says a number of significant changes were made at the group over the past year.
"Loss-making divisions were closed and by 31 December the group comprised three operating units. These are all performing satisfactorily and first quarter 2003 results are as forecast.
"The three divisions closed were responsible for trading losses of R542 000. The remaining divisions reflect trading profits of 1.56 million."
The acquisition of MMJ has not been a success and the deal is in the process of being "partially reversed".
"The current-year attributable loss of R2.4 million as well as R5.8 million in the previous year has obviously placed significant pressure on the group`s cash flow. As a result the group has not been meeting its commitments regarding repayments on long-term interest-bearing debt."
Purves says talks to restructure the debt are at an advanced stage and the board is confident that an agreement will be reached soon.
"The restructuring of the group`s business units has created three operating units which forecast both profit and positive cash flow for the 2003 financial year. It is clear, however, that the success of these business units will depend on the successful finalisation of the debt restructure."
He says the costs of being a listed holding company are "excessive" and talks with several parties are focused on a "combination of opportunities in which this hurdle can be overcome".
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