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Randgold & Exploration Company Limited
(Incorporated in the Republic of South Africa)
(Registration number 1992/005642/06)
Share Code: RNG & ISIN: ZAE000008819

(“R&E” or “the company”)

 

Reviewed results for the six months ended 30 June 2011

Commentary to the condensed consolidated interim financial statements for the six months ended 30 June 2011

General
The board of Randgold & Exploration Company Limited (R&E) is pleased to announce the interim results for the six months ended 30 June 2011.

Dividend in specie and special cash dividend
The distribution of the company’s remaining investment in Gold Fields Limited (GFI) as well as a special cash dividend of 90 cents per R&E share, as approved by shareholders on 30 November 2010, was effected on 17 January 2011. Refer to the notes to these condensed consolidated interim financial statements for further details.

Income
The majority of the income recognised in the period under review was a result of profit realised on the distribution of the investments held for distribution and profit from the sale of prospecting rights.

Financial position
R&E is liquid with no interest-bearing debt. R&E’s total assets consist primarily of cash. R&E had a net asset value per share of R2.47 at 30 June 2011.

Cash flow
R&E started the period under review with a cash balance of R291.8 million. Operating activities utilised cash of R20.8 million during the period under review, primarily as a result of taxation paid and operating expenses.

Investing activities yielded cash inflows of R11.8 million resulting from dividends received and proceeds from the sale of prospecting rights.

The major cash outflow from financing activities for the period under review was the special cash dividend paid of R64.6 million.

R&E remains in a strong cash position with R218.1 million in cash and cash equivalents at 30 June 2011.

Outlook
Given R&E’s liquidity and position in the resources industry, management will continue to focus on seeking new opportunities, where appropriate, for the benefit of R&E and its shareholders. As in the past, a pragmatic commercial approach will be adopted in dealing with the outstanding legal claims.

DC Kovarsky                 Marais Steyn
Chairman                    Chief Executive Officer

Johannesburg
2 August 2011

 

Condensed consolidated interim statement of comprehensive income

 

 

For the six months ended

 

 

30 June 2011

30 June 2010

 

 

Reviewed

Reviewed

 

Notes

R’000

R’000

Revenue

 

1 826

12 048

Recoveries – JCI

 

783 549

           – Other

 

25 205

Profit on sale of prospecting rights

7

9 963

Profit on distribution of investments

6

52 474

Foreign exchange gains

 

1 513

Other income

 

8

10 353

Other operating expenses

 

(14 505)

(38 592)

Profit from operating activities

 

51 279

792 563

Finance income

 

3 073

1 320

Profit before taxation

 

54 352

793 883

Taxation

 

954

(1 052)

Profit for the period

 

55 306

792 831

Other comprehensive income

 

 

 

Change in fair value of available-for-sale investments

6

(9 537)

11 618

Realised gain reclassified to profit or loss

 

(52 474)

Total comprehensive (loss)/income

 

(6 705)

804 449

 

 

 

 

Profit attributable to:

 

 

 

Non-controlling interest

 

628

Owners of the company

 

55 306

792 203

Profit for the period

 

55 306

792 831

 

 

 

 

Total comprehensive (loss)/income attributable to:

 

 

 

Non-controlling interest

 

628

Owners of the company

 

(6 705)

803 821

Total comprehensive (loss)/income

 

(6 705)

804 449

 

 

 

 

Basic and diluted earnings per share (cents)

8

77

1 103

Dividend per share (cents)

8

1 101

 

Condensed consolidated interim statement of financial position

 

 

As at

 

 

30 June
2011

31 December 2010

 

 

Reviewed

Audited

 

Notes

R’000

R’000

Assets

 

 

 

Non-current assets

 

776

782

Plant and equipment

 

302

308

Intangible assets

 

474

474

Current assets

 

220 586

568 291

Trade and other receivables

 

2 481

2 649

Investments held for distribution

6

273 845

Cash and cash equivalents

 

218 105

291 797

Total assets

 

221 362

569 073

 

 

 

 

Equity and liabilities

 

 

 

Shareholders’ equity

 

177 287

174 455

Issued capital

 

748

748

Share premium

 

Reserves

 

62 011

Retained earnings

 

176 539

111 696

 

 

 

 

Liabilities

 

 

 

Non-current liabilities

 

 

 

Post-retirement medical benefit obligation

 

36 114

36 429

 

 

 

 

Current liabilities

 

7 961

358 189

Tax liabilities

 

11 220

Shareholders for dividend

 

338 477

Trade and other payables

 

7 961

8 492

Total equity and liabilities

 

221 362

569 073

 

Condensed consolidated interim statement of changes in equity

 

 

For the six months ended

 

 

30 June 2011

30 June 2010

 

 

Reviewed

Reviewed

 

Notes

R’000

R’000

Share capital

 

 

 

Balance at the beginning and end of the period

 

748

748

Share premium

 

162 612

Balance at the beginning of the period

 

986 054

Distribution dividend

 

(823 442)

 

 

 

 

Investment fair value reserve

 

23 755

Balance at the beginning of the period

 

62 011

12 137

Change in fair value of available-for-sale investments

 

(9 537)

11 618

Realised gain reclassified to profit or loss

 

(52 474)

 

 

 

 

Retained earnings

 

176 539

316 518

Balance at the beginning of the period

 

111 696

(514 787)

Transaction with non-controlling shareholders

 

6 079

Profit for the period

 

55 306

792 203

Distribution dividend

 

33 023

Remeasurement of shareholders for dividend

6

9 537

 

 

 

 

Non-controlling interest

 

9 396

Balance at the beginning of the period

 

250 378

Transaction with non-controlling shareholders

 

(168 034)

Dividends paid to non-controlling shareholders

 

(73 576)

Profit for the period

 

628

 

Condensed consolidated interim statement of cash flows

 

For the six months ended

 

30 June 2011

30 June 2010

 

Reviewed

Reviewed

 

R’000

R’000

Profit before taxation

54 352

793 883

Adjusted for:

 

 

Recoveries not settled in cash

(808 754)

Profit on distribution of investments

(52 474)

Profit from sale of prospecting rights

(9 963)

Other non-cash items

(277)

5 277

Interest received

(3 073)

(1 320)

Dividends received

(1 826)

(12 048)

Working capital changes

(178)

38 727

Cash flows from operations

(13 439)

15 765

Interest received

3 073

478

Taxation paid

(10 450)

(329)

Cash flows from operating activities

(20 816)

15 914

Cash flows from investing activities

11 757

85 534

Dividends received

1 826

12 048

Proceeds from disposal of recovered assets

27 344

Proceeds on disposal of prospecting rights

9 963

Acquisition of plant and equipment

(39)

(288)

Proceeds from disposal of plant and equipment

7

Loan payments received

46 430

Cash flow from financing activities

(64 633)

(73 576)

Dividends paid

(64 633)

Dividends paid to non-controlling shareholders

(73 576)

Net (decrease)/increase in cash and cash equivalents

(73 692)

27 872

Cash and cash equivalents at the beginning of the period

291 797

294 806

Cash and cash equivalents at the end of the period

218 105

322 678

 

Notes to the condensed consolidated interim financial statements for the six months ended 30 June 2011

1. Reporting entity
R&E is a company domiciled and incorporated in the Republic of South Africa. The condensed consolidated interim financial statements of the company for the six months ended 30 June 2011 include the company and its subsidiaries (together referred to as “the group”).

2. Statement of compliance

The condensed consolidated interim financial statements for the six months ended 30 June 2011 have been prepared in compliance with the Listings Requirements of the JSE Limited, International Financial Reporting Standards (IFRS) (in particular International Accounting Standard 34 Interim Financial Reporting) and the AC 500 Standards as issued by the Accounting Practices Board or its successor.

 

These condensed consolidated interim financial statements were approved by the board of directors on 2 August 2011.

3. Significant accounting policies
The accounting policies applied by the group in these condensed consolidated interim financial statements are the same as those applied by the group in its consolidated financial statements as at and for the year ended 31 December 2010, except for the following standards and interpretations adopted on 1 January 2011:

Revised IAS 24

Related Party Disclosures

IFRIC 14

Amendment: Prepayments of minimum funding requirements

Various improvements to IFRSs 2010

Excluding amendments to IFRS 3 Business Combinations, IAS 27 Consolidated and Separate Financial Statements

There was no significant impact on these condensed consolidated interim financial statements as a result of adopting these standards and interpretations.

4. Independent review by the auditor
The condensed consolidated interim financial statements of R&E were reviewed by KPMG Inc. The individual auditor assigned to perform the review is Mr CH Basson. The unmodified review report is available for inspection at the company’s registered office.

5. Segment reporting
The group operates in a single operating segment as an investment holding company with assets in the mining industry.

6. Distribution of 2 270 687 GFI shares and special cash dividend of 90 cents per R&E share

On 30 November 2010, R&E shareholders approved the distribution of R&E’s remaining listed investment in GFI (amounting to 3.16193 GFI shares per 100 R&E shares held), as well as a cash dividend of 90 cents per share. These distributions were effected on 17 January 2011. STC was paid on the portion of the distribution not made out of share premium.

As a result of this distribution, the investment fair value reserve at 17 January 2011 of R52.4 million was reclassified to profit or loss.

 

R’000

Investment held for distribution – 1 January 2011

273 845

Value of GFI shares at distribution date – 17 January 2011

(264 308)

Decrease in fair value of investment held for distribution recognised in other comprehensive income

9 537

Investment fair value reserve – 1 January 2011

(62 011)

Realised gain reclassified to profit or loss

52 474

 

R’000

Shareholders for dividend – 1 January 2011

338 477

Remeasurement – 17 January 2011

(9 537)

Distribution

328 940

GFI Shares

264 307

Cash

64 633

7. Profit on sale of prospecting rights
During the period under review, R&E disposed of certain of its prospecting rights which had a nil carrying value to a third party for R10 million (refer to note 10).

8. Earnings per share and dividend per share

 

For the six months ended

Basic earnings and diluted earnings per ordinary share

30 June 2011 Reviewed

30 June 2010 Reviewed

Basic and diluted earnings for the period (R’000)

55 306

792 203

Weighted average number of ordinary shares in issue

71 813 235

71 813 128

Earnings per share (cents)

77

1 103

Headline and diluted headline earnings per ordinary share

 

 

Headline and diluted headline (loss)/earnings for the period (R’000)

(7 131)

805 717

Weighted average number of ordinary shares in issue

71 813 235

71 813 128

Headline (loss)/earnings per share (cents)

(10)

1 122

Reconciliation between basic and headline earnings for the period

R’000

R’000

Profit for the period attributable to the equity holders of the company

55 306

792 203

Adjusted for:

 

 

Profit on distribution/disposal of investments held for distribution/available-for-sale investments

(52 474)

(2 139)

Profit on disposal of prospecting rights

(9 963)

Impairment of investment held for distribution

15 653

 

(7 131)

805 717

Tax effect of adjustments

Portion attributable to non-controlling interest

Headline (loss)/earnings for the period attributable to equity holders of the company

(7 131)

805 717

Dividend per share

 

 

Total dividend declared (R’000)

790 419

Eligible shares in issue

71 813 235

71 813 128

Dividend per share (cents)

1 101

Total dividend payable from R&E’s share premium (R’000)

823 442

Dividend payable to group entities recognised in retained earnings (R’000)

(33 023)

Shareholders for dividend per statement of financial position (R’000)

790 419

9. Net asset and tangible net asset value and per share
The net asset value per share is calculated using the following variables:

 

30 June 2011 Reviewed

31 Dec 2010 Audited

Net asset value (R’000)

177 287

174 455

Ordinary shares outstanding

71 813 235

71 813 235

Net asset value per share (cents)

247

243

Net tangible asset value per share (cents)

246

242

The number of shares outstanding at 31 December 2010 and 30 June 2011 has been adjusted for the 3 million treasury shares held.

10. Material changes
There have been no material changes to the information contained in the independent mineral asset valuation reports that were disclosed to shareholders in the settlement circular, however, two prospecting rights over various farms (collectively known as the Jeanette Prospecting Right and Weltevreden Prospecting Right) were disposed of during the reporting period (refer to note 7).

11. Related party transactions
There were no related party transactions during the period under review.

12. Events after reporting date
There were no significant events between the reporting date and the approval date of these results.

Directors: DC Kovarsky (Chairman)**, M Steyn (CEO)*, V Botha*, MB Madumise**, JH Scholes** (*Executive, **Independent non-executive)
Secretary and Registered office: RP Pearcey FCIS, 7th Floor Fredman Towers, 13 Fredman Drive, Sandown, 2196
Transfer secretaries: Computershare Investor Services (Pty) Ltd (Registration number 2004/003647/07) 70 Marshall Street, Johannesburg, 2001
Sponsor: PSG Capital