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PRESS RELEASES

 

VenFin POSTS STRONG RESULTS

VenFin Limited (VenFin), the technology and telecommunications investment holding company, today announced strong results for the 15-month period ended 30 June 2002. VenFin changed its year-end from 31 March to 30 June to allow the group's service company, M&I Group Services (Proprietary) Limited (M&I), to deal with the results of both VenFin and Remgro Limited without incurring additional management costs.

Headline earnings on a pro forma basis for the fifteen months increased by 20.5% to 117.5 cents (31 March 2001 - 12-month period: 97.5 cents) per share. The group's main sources of earnings were from Vodacom Group (Proprietary) Limited (Vodacom), which contributed approximately 54% to group headline earnings, the associated company R&V Holdings Limited (R&V), which contributed in excess of 33% to headline earnings, and the interest received from other cash resources.

Vodacom showed a 38.0% increase in headline earnings to R2 438 million and an EBITDA margin of 34.9% for its year ended 31 March 2002.

Hosken Consolidated Investments Limited (HCI) and VenFin published cautionary statements on 30 August 2002. The cautionary relates to a pre-emptive right that VenFin has over the 5% Vodacom shareholding sold to HCI in 1996. In the event of the satisfactory conclusion of negotiation, VenFin's shareholding in Vodacom would increase to 18.5%.

The income of R&V consists mainly of interest earned on cash and on the Alexander Forbes Limited convertible bond. The decrease in the earnings of R&V is attributable to lower international interest rates, reduced cash, and non-recurring income earned in the prior year.

Other investments performed as expected in difficult market conditions, with a pro forma headline loss of R91 million (31 March 2001 - 12-month period: (R76 million)). The majority of these investments is in early development stage and only expected to contribute to earnings over the medium to long term.

During the period, VenFin invested R457 million comprising R96 million in new investments and R361 million in existing investments.

Existing investments include an interest-bearing loan of R280 million to HCI to assist in funding the exit of Warner Bros. from the shareholding of e-tv. The group awaits a ruling from ICASA for the conversion of the loan to equity, which will result in VenFin holding 26% in e-tv.

In spite of the redeployment of cash into new investments, net interest received on cash in South Africa and abroad amounted to R112 million (31 March 2001 - 12-month period: R60 million).

A provision of R267 million was made for impairment of goodwill and investments for Camus, iTouch, eCompany and Fundamo to reflect potential risks associated with these investments in an early phase. This is consistent with VenFin's prudent approach and is in keeping with the belief that above-average returns will be enjoyed and sustained in the long term.

"We have a strong cash position and are well placed to continue investing in businesses that show strong potential. We are confident that our strategy of taking a long-term view on investments will continue to serve us well." (Dillie Malherbe)

No dividend was declared.
-ends-

Notes to editors:

Subsidiary companies (South Africa)

  • VenFin Finance Corporation provides short-term investments of surplus cash in South Africa (100%)
  • VenFin Financial Investments provides corporate services to the group members through M&I Management Services (Pty) Limited (100%)
  • Fibalogic, a hot water cylinder company (99.2%)

Subsidiary companies (international)

  • RGH Holdings provides short-term investments of surplus cash abroad and other portfolio investments (100%).
    • iTouch - 2.5%
    • Veritas - $0.15 million

Associated companies (South Africa)

  • Telecommunication
    • Vodacom - 13.5%
    • Psitek - 33.1%
    • Inala - 32.3%
  • Technology
    • FRS - 41.4%
    • Intervid - 17.4%
    • Fundamo - 37.6%
    • eCompany - 14.4%
    • Tracker - 32.1%
  • Other
    • SAIL - 19.5%
    • e-tv (loan) - R282 million

Associated companies (international)

  • Corporate
    • R&V Holdings - 33.3%
    • Alexander Forbes (bond) - (pounds) 100 million
    • Intervid International (bond) - CHF 84.7 million
    • Camus - 18.6%
    • VHF Technologies SA (bond) CHF 1.5 million
  • Technology
    • GenuOne - 25.1%

Issued by:
Brunswick SA 011 442 8803
Heidi Geldenhuys 083 325 8924
Taryn Proksch 083 273 1301

Enquiries:
Jannie Durand 021 888 3200
Dillie Malherbe 021 888 3200