Wrap Text
Provisional Condensed Consolidated Results for the year ended 28 February 2018
VUNANI LIMITED ("Vunani" or "the company" or "the group")
Incorporated in the Republic of South Africa
Registration number: 1997/020641/06
JSE code: VUN ISIN: ZAE000163382 Listed on AltX on the JSE Limited ("JSE")
PROVISIONAL CONDENSED CONSOLIDATED RESULTS
for the year ended 28 February 2018
The Reviewed Provisional Condensed Consolidated Results have been prepared under
the supervision of the Chief Financial Officer, Tafadzwa Mika CA(SA).
SALIENT FEATURES
REVENUE OF
R350.9 million
compared to R184.2 million
at 28 February 2017
PROFIT FOR THE YEAR OF
R45.6 million
compared to R40.0 million at
28 February 2017
HEADLINE EARNINGS
PER SHARE OF
25.2c
compared to 19.2c at
28 February 2017
NET ASSET VALUE
PER SHARE OF
242.5c
Compared to 221.2c at
28 February 2017
Condensed consolidated statement
of comprehensive income
for the year ended 28 February 2018
*Re-presented
Reviewed Audited
28 February 28 February
Figures in R'000 Note 2018 2017
Continuing operations
Revenue 1 350 889 184 192
Other income 2 518 4 717
Investment revenue 5 421 1 624
Interest received from investments 137 1 646
Net profit on disposal of assets - 12 200
Fair value adjustments and impairments 2 41 242 9 247
Equity-accounted earnings (net of income tax) (10 823) 23 305
Operating expenses (327 957) (187 348)
Results from operating activities 61 427 49 583
Finance income 3 592 2 784
Finance costs (11 055) (3 866)
Net finance costs (7 463) (1 082)
Profit before income tax 53 964 48 501
Income tax expense (7 139) (8 648)
Profit from continuing operations 46 825 39 853
Discontinued operations
(Loss)/profit from discontinued operations (net of
income tax) 3 (1 269) 185
Profit for the year 45 556 40 038
Other comprehensive income
Items that are or may be reclassified to profit or
loss
Exchange differences on translating foreign operations (1 192) (2 243)
Total comprehensive income for the year 44 364 37 795
Profit from continuing operations attributable to:
Equity holders of Vunani Limited 42 330 37 896
Non-controlling interest 4 495 1 957
46 825 39 853
Profit for the year attributable to:
Equity holders of Vunani Limited 41 061 38 081
Non-controlling interest 4 495 1 957
45 556 40 038
Total comprehensive income for the period
attributable to:
Equity holders of Vunani Limited 40 477 36 793
Non-controlling interest 3 887 1 002
44 364 37 795
Basic and diluted earnings per share (cents) 26.0 30.1
Basic and diluted earnings per share from continuing
operations (cents) 26.8 30.0
Basic and diluted (loss)/earnings per share from
discontinued operations (cents) (0.8) 0.1
Basic and diluted headline earnings per share
(cents) 4 25.2 19.2
Basic and diluted headline earnings per share from
continuing operations (cents) 26.7 20.8
Basic and diluted headline loss per share from
discontinued operations (cents) (1.5) (1.6)
* Comparatives on the statement of comprehensive income have been re-presented to show the effect of the
discontinued operations (refer to note 3).
Condensed consolidated statement of financial position
at 28 February 2018
Reviewed Audited
28 February 28 February
Figures in R'000 Note 2018 2017
Assets
Property, plant and equipment 10 404 10 535
Goodwill 139 766 139 766
Intangible assets 87 388 98 613
Investments in and loans to associates 75 495 84 242
Other investments 5 50 720 38 109
Deferred tax asset 47 010 47 280
Other non-current assets 54 127 29 802
Total non-current assets 464 910 448 347
Other investments 5 575 4 291
Other current assets - 1 712
Taxation prepaid 1 462 1 343
Trade and other receivables 73 680 52 702
Accounts receivable from trading activities 689 510 693 427
Trading securities 435 183
Cash and cash equivalents 51 584 82 284
Total current assets 817 246 835 942
Total assets 1 282 156 1 284 289
Equity
Stated capital 6 706 572 700 022
Treasury shares (14 842) (15 915)
Share-based payments reserve 21 646 16 100
Foreign currency translation reserve (3 105) (2 521)
Accumulated loss (310 368) (340 886)
Equity attributable to equity holders of Vunani Limited 399 903 356 800
Non-controlling interest (566) (4 021)
Total equity 399 337 352 779
Liabilities
Other financial liabilities 5 64 062 107 714
Deferred tax liabilities 25 955 31 311
Total non-current liabilities 90 017 139 025
Other financial liabilities 5 34 667 35 580
Taxation payable 8 006 8 327
Trade and other payables 60 022 57 615
Accounts payable from trading activities 687 659 688 819
Trading securities 86 1 934
Bank overdraft 2 362 210
Current liabilities 792 802 792 485
Total liabilities 882 819 931 510
Total equity and liabilities 1 282 156 1 284 289
Shares in issue (000s) 6 164 897 161 296
Net asset value per share (cents) 242.5 221.2
Net tangible asset value per share (cents) 104.8 73.4
Net asset value per share (cents)
Net asset value per share is the equity attributable to equity holders of Vunani Limited, utilising all shares in issue,
including treasury shares.
Net tangible asset value per share (cents)
Net tangible asset value per share is the equity attributable to equity holders of Vunani Limited, (excluding goodwill
and intangible assets) utilising all shares in issue, including treasury shares.
Condensed consolidated statement of changes in equity
for the year ended 28 February 2018
Total
Share- Foreign attribu-
based currency table Non-
Stated Treasury payment translation Accumulated to equity controlling Total
Figures in R'000 capital shares reserve reserve loss holders interest equity
Balance as at 29 February 2016 - Audited 624 888 (15 571) 12 871 (1 233) (365 474) 255 481 1 670 257 151
Total comprehensive income for the period
Profit for the year - - - - 38 081 38 081 1 957 40 038
Other comprehensive income for the period - - - (1 288) - (1 288) (955) (2 243)
Total comprehensive income for the period - - - (1 288) 38 081 36 793 1 002 37 795
Issue of shares 68 332 - - - - 68 332 - 68 332
Share-based payments - - 3 229 - - 3 229 - 3 229
Dividends paid - - - - (503) (503) - (503)
Capitalisation share issue award 6 802 (344) - - (6 458) - - -
Acquisition of non-controlling interests - - - - (6 532) (6 532) 1 082 (5 450)
Business combination - - - - - - (7 775) (7 775)
Total transactions with owners, recorded directly
in equity 75 134 (344) 3 229 - (13 493) 64 526 (6 693) 57 833
Balance as at 28 February 2017 - Audited 700 022 (15 915) 16 100 (2 521) (340 886) 356 800 (4 021) 352 779
Total comprehensive income for the year
Profit for the year - - - - 41 061 41 061 4 495 45 556
Other comprehensive income for the year - - - (584) - (584) (608) (1 192)
Total comprehensive income for the period - - - (584) 41 061 40 477 3 887 44 364
Transactions with owners, recorded directly in
equity
Issue of shares 7 188 - - - - 7 188 - 7 188
Share-based payments - - 5 546 - 435 5 981 - 5 981
Dividends paid - - - - (8 241) (8 241) (538) (8 779)
Delisted shares (638) 638 - - - - - -
Transfer between reserves - 435 - - (435) - - -
Acquisition of non-controlling interests - - - - (2 302) (2 302) 106 (2 196)
Total transactions with owners, recorded directly
in equity 6 550 1 073 5 546 - (10 543) 2 626 (432) 2 194
Balance as at 28 February 2018 - Reviewed 706 572 (14 842) 21 646 (3 105) (310 368) 399 903 (566) 399 337
DIVIDENDS
Reviewed Audited
28 February 28 February
Figures in R'000 2018 2017
Ordinary dividend
Ordinary dividend number 3 of 5.2 cents (4.16 cents net of dividend withholding tax) per share was paid to ordinary
shareholders on 28 July 2017 (net of treasury shares) 8 241 -
Capitalisation share issue award (with cash alternative)
A scrip dividend of 4 shares for every 100 shares held (4.3 million shares) was issued on 26 August 2016
(net of treasury shares) - 6 458
As an alternative to the capitalisation share issue award, shareholders were able to elect to receive a gross dividend
of 6c per share. For those shareholders electing to receive cash the dividend was paid to ordinary shareholders on
29 August 2016 (net of treasury shares held). - 503
8 241 6 961
Condensed consolidated statement of cash flows
for the year ended 28 February 2018
Reviewed Audited
28 February 28 February
Figures in R'000 Note 2018 2017
Cash flows from operating activities
Net cash generated/(utilised) by operating activities 7 28 488 (161)
Investment revenue received 5 421 1 624
Finance income received 3 592 2 784
Finance costs paid (9 627) (1 220)
Dividends paid to shareholders (8 241) (503)
Dividends paid to non-controlling interest (538) -
Income tax paid (12 214) (10 278)
Net cash generated/(utilised) by operating activities 6 881 (7 764)
Cash flows from investing activities
Proceeds on disposal of business 1 500 494
Acquisition of property, plant and equipment (4 245) (2 161)
Proceeds on disposal of property, plant and equipment - 6
Proceeds from repayment of loans to associates 1 186 606
Advances in investment and loans to associates (7 592) (1 664)
Dividends received from associates 741 -
Proceeds from repayment of other non-current assets 1 712 8
Acquisition of other investments (2 590) (298)
Proceeds on disposal of other investments 10 292 6 990
Net cash inflow from investing activities 1 004 3 981
Cash flows from financing activities
Proceeds on issue of shares 2 772 51 066
Advances of other financial liabilities 30 305 70
Repayments of other financial liabilities (73 814) (2 064)
Net cash (outflow)/inflow from financing activities (40 737) 49 072
Net (decrease)/increase in cash and cash equivalents (32 852) 45 289
Cash acquired in business combination - 20 013
Cash disposed of during the year - (323)
Cash and cash equivalents at the beginning of the year 82 074 17 095
Total cash and cash equivalents at end of the year 49 222 82 074
Segmental reporting
for the year ended 28 February 2018
The fund management, advisory services and other investments segments are geographically located in South Africa and, on a smaller scale, in
Zimbabwe and Malawi. The institutional securities broking, mining and private wealth and investments segments are geographically located in South
Africa.
Reportable
segment
profit/(loss) Total Total
Revenue after tax assets liabilities
Reviewed Reviewed Reviewed Reviewed
28 February 28 February 28 February 28 February
Figures in R'000 2018 2018 2018 2018
Fund management 64 683 4 284 66 651 (15 635)
Asset administration 124 781 6 714 234 151 (106 632)
- Advisory services 4 895 (1 450) 3 321 (1 122)
Investment banking -
- Institutional securities broking 63 686 1 376 717 873 (706 319)
Mining 92 344 41 153 85 400 (22 453)
Private equity*
Other investments 500 (5 252) 174 620 (30 540)
350 889 46 825 1 282 016 (882 701)
Discontinued operations
Private wealth and investments** 344 (1 269) 140 (118)
Total 351 233 45 556 1 282 156 (882 819)
Re-presented
Reportable
segment
profit/(loss) Total Total
Revenue after tax assets liabilities
Audited Audited Audited Audited
28 February 28 February 28 February 28 February
Figures in R'000 2017 2017 2017 2017
Continuing operations
Fund management 64 452 6 049 60 735 (15 636)
Asset administration 22 909 16 595 245 887 (150 682)
- Advisory services 5 236 (525) 2 239 (1 741)
Investment banking -
- Institutional securities broking 67 955 2 585 721 258 (713 466)
- Mining 23 640 8 873 43 431 (10 403)
Private equity* -
- Other investments - 6 276 209 967 (38 753)
184 192 39 853 1 283 517 (930 681)
Discontinued operations
Private wealth and investments** 4 421 185 772 (829)
Total 188 613 40 038 1 284 289 (931 510)
* In the current year, the Private equity segment has been refined into two segments namely Mining and Other investments as a result of the increased
mining processing activities. Comparative figures have been re-presented to reflect the impact of the change.
** The Private wealth and investments segment has been represented as a discontinued operation as a result of the disposal of the client book.
Notes to the condensed consolidated financial statements
(all figures in R´000)
BASIS OF PREPARATION
The condensed consolidated financial statements are prepared in accordance with the requirements of the JSE Limited Listings Requirements for
provisional reports and the requirements of the Companies Act of South Africa. The Listings Requirements require provisional reports to be prepared
in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS)
and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial
Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The accounting policies
applied in the preparation of the condensed consolidated financial statements are in terms of IFRS and are consistent with those applied in the previous
consolidated annual financial statements.
The reviewed condensed consolidated provisional financial statements have been presented on the historical cost basis, except for other investments
and certain other financial liabilities, which are fair valued. These condensed consolidated financial statements are presented in South African Rand,
rounded to the nearest thousand, which is the group's presentation currency.
These reviewed condensed consolidated provisional financial statements incorporate the financial statements of the company, its subsidiaries and
entities that, in substance, are controlled by the group and the group's interest in associates. Results of subsidiaries and associates are included from
the effective date of acquisition up to the effective date of disposal. All significant transactions and balances between group enterprises are eliminated
on consolidation.
Comparatives on the statement of comprehensive income have been re-presented to show the effect of the discontinued operations (refer to note 3).
NOTES
1. Revenue
Revenue includes trading revenue and fees earned from advisory services, brokerage, fund management fees, asset administration fees and
client service fees.
2. Fair value adjustments and impairments
Reviewed Audited
28 February 28 February
Figures in R'000 2018 2017
Fair value adjustment on financial assets and liabilities designated at fair value through profit or loss 43 714 8 639
Impairment reversal/(loss) of loans in other non-current assets - 8
Impairment reversal/(loss) on loans to associates (2 472) 600
41 242 9 247
3. Discontinued operations
A strategic decision was made in June 2017 to dispose of the group's private wealth and investments business. This culminated in the group
disposing of the client book that was held in Vunani Wealth and Investments Proprietary Limited ("VWI"). The sale of the business included the
transfer of VWI's executive management's employment contracts to the purchaser. As the disposal related to a separate line of the group's
business, the related activities have been presented as a discontinued operation.
The comparative information in the February 2017 consolidated statement of comprehensive income has been re-presented to disclose the
discontinued operations separately from continuing operations.
Reviewed Audited
28 February 28 February
2018 2017
Revenue 344 4 421
Profit on disposal of assets 1 500 2 806
Operating expenses (3 103) (7 052)
Profit before income tax (1 259) 175
Income tax expense (10) 10
Profit for the year (1 269) 185
Profit for the period attributable to:
Equity holders of Vunani Limited (1 269) 185
Effect on basic and diluted earnings per share (cents) (0.8) 0.1
Effect on basic and diluted headline loss per share (cents) (1.5) (1.6)
Cash flows from discontinued operations
Net cash (utilised)/generated by operating activities (64) 128
Net cash inflow from investing activities 1 500 -
Net cash outflow from financing activities (1 500) -
Net cash (outflow)/inflow for the year (64) 128
4. Reconciliation of headline earnings for the year
Reviewed Audited
28 February 28 February
Figures in R'000 2018 2017
Profit for the year attributable to equity holders of Vunani 41 061 38 081
Adjusted for:
Associates
Gross revaluation of investment property (31) 888
Deferred taxation on revaluation 9 (249)
Non-controlling interest 5 (141)
Disposal of businesses
Profit on disposal (1 500) (2 806)
Taxation 336 629
Business combination
Fair value adjustment on stepped up acquisition - (12 153)
Disposal of assets
Profit on disposal - (47)
Taxation - 11
39 880 24 213
Headline earnings per share (cents) 25.2 19.2
Basic and diluted headline earnings per share from continuing operations 26.7 20.8
Basic and diluted headline earnings per share from discontinued operations (1.5) (1.6)
5. Other investments and other financial liabilities
Unlisted investments are fair valued annually by the directors. Listed investment prices are determined with reference to the share price at
period-end.
Both listed and unlisted investments are designated at fair value through profit or loss. Financial liabilities are either accounted for at amortised
cost or designated at fair value through profit or loss. The group designates certain financial liabilities at fair value through profit or loss upon initial
recognition.
Ring-fenced special purpose entities have historically been used to house the group's geared equity investments and any financial liabilities that
relate to such investments. Financial assets and liabilities that arise in terms of these ring-fenced structures are both fair valued through profit or
loss in terms of IAS 39 Financial instruments: Recognition and measurement.
For additional information on the fair values of other investments and other financial liabilities, please refer to note 8 of these financial results.
6. Authorised and issued stated capital
The authorised stated capital at 28 February 2018 was 500 million ordinary shares of no par value (2017: 200 million ordinary shares of no par
value). 164 896 943 shares were in issue at 28 February 2018 (2017: 161 296 081).
Reviewed Audited
28 February 28 February
Weighted average number of ordinary shares (000s) 2018 2017
Issued ordinary shares at the beginning of the year 161 296 114 665
Effect of share issue 1 899 17 203
Effect of own shares held (5 219) (5 473)
Weighted average number of shares in issue during the year 157 976 126 395
Number of shares in issue at the end of the year (000s) 164 897 161 296
Dilutive weighted average number of ordinary shares (000s)
Issued ordinary shares at the beginning of the year 161 296 114 665
Effect of share issue 1 899 17 203
Effect of own shares held (5 219) (5 473)
Effect of dilutive shares 2 061 669
Diluted weighted average number of shares in issue during the year 160 037 127 064
Number of shares in issue at the end of the year (000s) 164 897 161 296
The shares issued as part of the employee share incentive scheme could potentially dilute basic earnings in the future. The employee
shares have a dilutive effect. The impact of the potential dilutive shares is immaterial.
7. Net cash utilised by operating activities
Re-presented
Reviewed Audited
28 February 28 February
Figures in R'000 2018 2017
Profit before income tax expense from continuing operations 53 964 48 501
(Loss)/income before income tax expense from discontinued operations (1 269) 185
Adjusted for:
Depreciation of property, plant and equipment 3 722 1 297
Profit on disposal of subsidiaries - (2 806)
Profit on disposal of associates - (12 153)
Profit on disposal of discontinued operations (1 500) -
Equity-accounted loss/(earnings) (net of income tax) 10 823 (23 305)
Profit on disposal of fixed assets - (47)
Fair value adjustments and impairments (41 242) (9 247)
Derecognition of deferred payment - (3 580)
Movement in impairment allowance 369 1 097
Amortisation of intangible assets 11 224 2 055
Share-based payments expense 5 981 3 229
Foreign currency translation loss 362 541
Lease straight-line adjustment (432) (301)
Interest received from investments and finance income (3 729) (4 430)
Investment revenue (5 421) (1 624)
Finance costs 11 055 3 866
Changes in working capital:
(Decrease)/increase in trading securities (2 100) 1 882
Increase in trade and other receivables (22 080) (22 944)
Increase in trade and other payables 5 523 18 139
Decrease/(increase) in accounts receivable and payable from trading activities 3 238 (516)
Cash generated/(utilised) by operating activities 28 488 (161)
8. Financial instruments carried at fair value
The fair value of a financial instrument is the price that would be received for the sale of an asset or paid for the transfer of a liability in an orderly
transaction between market participants at the measurement date. Underlying the definition of fair value is a presumption that an entity is a going
concern without any intention or need to liquidate, to curtail materially the scale of its operations or to undertake a transaction on adverse terms.
Fair value is not, therefore, the amount that an entity would receive or pay in a forced transaction, involuntary liquidation or distressed sale.
The existence of published price quotations in an active market is the best evidence of fair value and, where they exist, they are used to measure
the financial asset or financial liability. A market is considered to be active if transactions occur with sufficient volume and frequency to provide
pricing information on an ongoing basis. Financial instruments fair valued using quoted prices would generally be classified as level 1 in terms of
the fair value hierarchy.
Where a quoted price does not represent fair value at the measurement date or where the market for a financial instrument is not active, the
group establishes fair value by using valuation techniques. These valuation techniques include reference to the value of the assets of the
underlying business, earnings multiples (e.g. unlisted investments), discounted cash flow analysis (e.g. unlisted investments, loans and advances)
and various option pricing models.
Inputs typically used in valuation techniques for loans and advances, other investments, investments in associates and other financial liabilities,
include discount rates, expected future cash flows, dividend yields, earnings multiples, volatility, equity prices and commodity prices.
Valuation methodologies and techniques applied for level 3 financial instruments include a combination of discounted cash flow analysis,
application of earnings multiples on sustainable after tax earnings and current and projected net asset values to determine overall reasonability.
The valuation technique applied to specific financial instruments depends on the nature of the financial instrument and the most appropriate
valuation technique is determined on that basis.
After the valuations of the unlisted financial assets and liabilities are performed, these are presented to the group's investment committee for
independent review. All significant valuations are approved by the investment committee.
The valuation methodologies, techniques and inputs applied to the fair value measurement of the financial instruments have been applied in a
manner consistent with that of the previous financial period.
Reviewed Audited
28 February 28 February
2018 2017
Fair values Carrying Carrying
Figures in R'000 amount Fair value amount Fair value
Financial assets measured at fair value
Designated at fair value through profit or loss on initial recognition 101 739 101 739 68 520 68 520
Trading securities 435 435 183 183
Financial assets not measured at fair value
Loans to associates 27 387 21 949 22 953 20 761
Loans in other non-current assets 3 683 3 909 5 394 5 168
133 244 128 032 97 050 94 632
Financial liabilities measured at fair value
Designated at fair value through profit or loss on initial recognition (5 084) (5 084) (6 610) (6 610)
Trading securities (86) (86) (1 934) (1 934)
Financial liabilities not measured at fair value
Other financial liabilities (93 645) (94 016) (136 684) (139 172)
(98 815) (99 186) (145 228) (147 716)
Total 34 429 28 846 (48 178) (53 084)
The carrying amounts of cash and cash equivalents, accounts receivable from trading activities, trade and other receivables, bank overdraft,
accounts payable from trading activities and trade and other payables reasonably approximate their fair values and are therefore not included in
the table above.
Fair value hierarchy
The table below analyses recurring fair value measurements for financial assets and financial liabilities. These fair value measurements are
categorised into different levels in the fair value hierarchy based on inputs to the valuation techniques used.
The different levels are defined as follows:
- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
- Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Reviewed 28 February 2018
Figures in R'000 Level 1 Level 2 Level 3 Total
Financial assets designated at fair value through profit or loss 19 951 - 81 788 101 739
Financial assets measured at fair value 435 - - 435
Financial assets at amortised cost - - 25 858 25 858
Financial liabilities designated at fair value through profit or loss (86) - (5 084) (5 170)
Financial liabilities at amortised cost - - (94 016) (94 016)
20 300 - 8 546 28 846
Audited 28 February 2017 Level 1 Level 2 Level 3 Total
Financial assets designated at fair value through profit or loss 33 910 - 34 610 68 520
Financial assets at amortised cost - - 25 929 25 929
Financial liabilities designated at fair value through profit or loss (1 934) - (6 610) (8 544)
Financial liabilities at amortised cost - - (139 172) (139 172)
31 976 - (85 243) (53 267)
Reviewed Audited
28 February 28 February
Figures in R'000 2018 2017
Level 3 comprises:
Balance at beginning of year 28 000 23 314
Total gains or losses in profit or loss 40 536 4 686
Purchases, transfers, sales, issues and settlements 8 168 -
Balance at end of the year 76 704 28 000
A change of 10% in the unobservable inputs of the investment and liability at the reporting date would have increased/(decreased) equity and
profit or loss by the amount shown below. This analysis assumes that all other variables remain constant.
Reviewed Audited
28 February 28 February
Effect on statement of comprehensive income (profit/(loss)) and equity before taxation 2018 2017
Net asset value
10% increase 1 399 666
10% decrease (1 308) (1 492)
Free cash flow
10% increase (2 182) (6 477)
10% decrease 167 6 850
Foreign exchange movement
10% increase 868 1 333
10% decrease (868) (190)
9. Events after reporting date
There have been no material events between the period end and the date of the signing of the results.
10. Dividends
A dividend of 5.2 cents (4.16 cents net of dividend withholding tax) per share was paid to ordinary shareholders on 28 July 2017. Total cash of
R8.2 million (net of treasury shares held) was paid to ordinary shareholders.
Dividend declared
Notice is hereby given that a gross ordinary dividend of 6.2 cents per share (2017: 5.2 cents per share) has been declared out of income reserves
on 25 April 2018 and are payable to ordinary shareholders in accordance with the following timetable.
In terms of dividend tax effective since 1 April 2012, the following additional information is disclosed:
- The local Dividend Withholding Tax rate is 20%
- 164 896 943 shares are in issue
- The gross ordinary dividend is 6.20000 cents per share for shareholders exempt from paying Dividend Withholding Tax
- The net ordinary dividend is 4.96000 cents per share for ordinary shareholders who are not exempt from Dividend Withholding Tax
- Vunani Limited's tax reference number is 9841003032
Timetable 2018
Declaration and finalisation date announcement Wednesday, 25 April
Last day to trade cum dividend Tuesday, 24 July
Shares commence trading ex-dividend Wednesday, 25 July
Record date Friday, 27 July
Dividend payment date Monday, 30 July
No dematerialisation or rematerialisation of shares will be allowed for the period from Wednesday, 25 July 2018 to Friday, 27 July 2018, both
dates inclusive.
Dividends are declared in the currency of the Republic of South Africa. The directors have confirmed that the company will satisfy the liquidity and
solvency requirements immediately after the payment of the dividend.
11. Going concern
The directors have made an assessment of the ability of the company and its subsidiaries to continue as going concerns and have no reason to
believe the businesses will not continue as going concerns for the foreseeable future.
REVIEW OPINION
The condensed consolidated financial statements for the year ended 28 February 2018 have been reviewed by KPMG Inc., who expressed an
unmodified review conclusion. The auditor's report does not necessarily report on all of the information contained in this announcement/financial results.
Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditors engagement they should obtain a copy of the
auditor's report together with the accompanying financial information from the issuers registered office.
Overview and Prospects
The reporting period was dominated by heightened volatility in the
Rand-exchange rate in the run-up to, and aftermath of the ANC elections,
exacerbated by the further sovereign rating downgrades - to below
investment grade by two ratings agencies. The fourth quarter numbers
of 2017 indicate further recovery of the economy driven by private
consumption and fixed investment. The change in leadership of the ANC
and the country has resulted in improved confidence in the economy
amongst consumers and business. The change in the direction of
economic policies, reshuffling of cabinet and the budget which increased
tax helped the country avoid further downgrades. The current prices of
commodities will help growth in the mining sector. Globally the potential
trade wars between China and the USA threaten to dampen growth in
the global economy as several countries could be impacted directly or
indirectly. The impact on South Africa is expected to be minimal as the
country's exports to the USA are less than 2% of GDP and the exposure
of the JSE-listed shares to the USA economy is very low. Business
conditions are looking more favourable and as a result domestic real
economic growth performance for 2018 is expected to be 1.8%.
Vunani's performance for the 12 months to 28 February 2018, has shown
improvement when compared to the prior period to 28 February 2017.
Vunani generated total comprehensive income for the year of
R44.4 million (2017: R37.8 million), while total comprehensive income
attributable to equity holders of the company amounted to R40.5 million
(2017: R36.8 million).
The group's reportable segments are as follows:
- Fund management
- Asset administration
- Advisory services
- Investment banking -
- Institutional securities broking
- Other investments
- Private equity -
- Mining
- Private wealth and investments
Fund management
The fund management segment includes the group's investments in
Vunani Fund Managers Proprietary Limited ("VFM"), Purpose Vunani
Asset Management (Private) Limited ("PVAM") and Alliance Capital
Limited ("Alliance"). The segment reported revenue of R64.7 million for
the year ended 28 February 2018 (2017: R64.5 million), which is a slight
increase from prior year. The reportable segment profit amounted to
R4.3 million for the year compared to R6.0 million at 28 February 2017.
VFM's performance slowed down during the year, due to lower
performance fees being earned. Despite this VFM won new assets under
management, which increased from R15.9 billion at 28 February 2017 to
R20.9 billion at 28 February 2018. The increase in assets under
management is key to improving the profitability of VFM.
PVAM's performance improved during the year due to increased
revenue being earned from trading treasury bills. PVAM's assets under
management decreased to $24.2 million at 28 February 2018 from
$31.1 million at 28 February 2017.
Alliance contributed R1.4 million in equity accounted earnings for the
year. Dividends amounting to R0.7 million were received from the
investment during the year.
Asset administration
The asset administration segment includes the group's investment
in Fairheads Benefit Services Proprietary Limited ("Fairheads")
which is held through Mandlalux Proprietary Limited ("Mandlalux").
Fairheads contributed revenue of R124.8 million to February 2018.
The segment reported a profit of R6.7 million compared to R16.6 million
in 2017. The prior year included a once off R12.2 million gain on the
step-up acquisition of Fairheads. Fairheads' assets under administration
amounted to R6.2 billion at 28 February 2018 (2017: R6.2 billion).
Advisory services
The segment generated revenue of R4.9 million compared to R5.2 million
for the year ended 28 February 2017. The decrease in performance is
due to deals taking longer to complete. The segment reported a loss of
R1.5 million (2017: R0.5 million) during the year.
Institutional securities broking
This segment includes equity, derivative and capital market trading
services to institutional clients. The segment generated revenue
of R63.7 million to February 2018 compared to R68.0 million in
2017. The decrease in revenue is due to the decrease in trading volumes
in the market. The segment reported profit for the year of R1.4 million
(2017: R2.6 million) despite the challenging economic conditions. With
a stable team and closely managed cost base for both the institutional
equity, derivative and capital markets businesses, the focus will be on
revenue growth through the expansion of the client base and exploring
diversified products.
Private equity
The private equity segment has been refined into two segments, namely
other investments and mining. The other investments segment holds the
group's listed, unlisted investments and property investments. The mining
segment is focused primarily on coal processing and mining investments
that are considered in partnership with well-capitalised and strategic
associates.
Other investments
The other investments segment generated revenue of R0.5 million (2017: R nil)
during the year. The segment reported a loss of R5.3 million for the
year (2017: profit of R15.2 million). The loss is attributable to negative fair
value adjustments on the equity accounted investments.
Mining
The mining segment includes the group's investment in Vunani
Resources Proprietary Limited ("VR"), Vunani Mining Proprietary
Limited ("VM") and certain equity accounted investments. The segment
generated revenue of R92.3 million (2017: R23.6 million) and contributed
R41.2 million (2017: 8.9 million) in profit to the group. The improved
performance is attributable to increased coal processing activities within
VR and the positive fair value adjustments on the mining investments that
are carried at fair value through profit and loss.
Discontinued operations - Private wealth and
investments
During the year, the private wealth and investments business was
disposed of to a third party. As a result, the segment is now accounted
for as a discontinued operation. The segment reported a loss of
R1.3 million for the year ended 28 February 2018 (2017: profit of
R0.2 million).
Financial performance
Revenue for the group increased by 90% to R350.9 million
(2017: R188.6 million) for the year ended 28 February 2018. The increase is due
to the consolidation of Fairheads' full year's results and the increased
revenue from the mining segment.
Other income comprised mainly once-off income that was realised
during the year and would consequently not be expected to be repeated
in subsequent financial periods. Other income for the current year has
decreased by 47% from R4.7 million to R2.5 million in February 2018.
Investment income is received in the form of dividends. Total
investment income for the year amounted to R5.2 million compared to
R1.6 million for the year ended 28 February 2017. The improvement is as
result of an increase in dividend declarations from investee companies.
Positive fair value adjustments and impairments of R41.2 million
(2017: R9.2 million) relate to a net increase in the value of the groups'
listed and unlisted investment portfolio that has been designated at fair
value through profit or loss.
Equity-accounted loss for the year amounted to R10.8 million
(2017: R23.3 million). The group's investment in Fairheads was classified as an
associate until 31 December 2016 and as such, its earnings were equity
accounted until that date. Furthermore, Vunani's investment in Workforce
Holdings Limited ("Workforce") is structured such that Vunani's interest
is a joint venture and accordingly, the fluctuations in the fair value of
Workforce are equity accounted.
Operating expenses increased by 75% from R187.3 million to
R328.0 million. The consolidation of Fairheads has resulted in an increase
in operating expenses. The share based payment expenses have
increase as a result of the issue of additional shares to staff, have also
contributed to the increase in expenses. The devaluation of the Rand
during the year resulted in increases in information and technology costs,
which are typically dollar denominated. The group remains focused on
cost containment and monitors spending on an ongoing basis.
Finance income increased to R3.6 million for the year compared to
R2.8 million to 28 February 2017. Interest from investments decreased
from R1.6 million to R0.1 million as a result of less interest being charged
on loans. Finance costs increased from R3.9 million for the year ended
28 February 2017 to R11.1 million for the current year, as result of the
consolidation of Fairheads.
The increase in other investments and other non-current assets
was mainly due to positive fair value adjustments on the listed and
unlisted investments.
The issue of shares resulted in an increase in stated capital of
R6.6 million. The share-based payments reserve movement of
R5.9 million (2017: R3.2 million) is attributable to the current year
IFRS 2 charge. The profit for the year attributed to non-controlling
interest amounted to R4.5 million.
Prospects
Vunani's executive believe that a continued recovery in business and
consumer confidence will have a positive effect on the group's ability to
further grow the business and enhance shareholder value. The group
will continue its focus on improving the performance of its operating
businesses as well as improving synergies amongst them as these
will form a solid platform to ensure the long-term success of Vunani.
Vunani is cautiously optimistic that the performance of the last twelve
can be maintained and that it can fuel growth in the immediate and
long-term future.
FORWARD-LOOKING STATEMENTS AND
DIRECTORS' RESPONSIBILITY
Statements made throughout this announcement regarding the future
financial performance of Vunani have not been reviewed or audited by
the company's external auditors. The company cannot guarantee that
any forward-looking statement will materialise and accordingly, readers
are cautioned not to place undue reliance on any forward-looking
statements. The company disclaims any intention and assumes no
obligation to update or revise any forward-looking statement even if new
information becomes available as a result of future events or for any other
reason, other than as required by the JSE Listings Requirements.
The directors take full responsibility for the preparation of the condensed
consolidated provisional financial statements.
Signed on behalf of the board of directors by E Dube and T Mika
25 April 2018.
CORPORATE INFORMATION
Executive directors
E Dube (Chief Executive Officer)
T Mika (Chief Financial Officer)
BM Khoza
NM Anderson
Non-executive directors
LI Jacobs - independent chairman
XP Guma - independent
NS Mazwi - independent
G Nzalo - independent
JR Macey - independent
S Mthethwa
M Golding
Company secretary
CIS Company Secretaries Proprietary Limited
Designated adviser
Grindrod Bank Limited
Financial communications adviser
Singular Systems Proprietary Limited
Transfer secretaries
Computershare Investor Services Proprietary Limited
Rosebank Towers
15 Biermann Avenue
Rosebank
2196
RESULTS PRESENTATION
Vunani will be hosting the interim results presentation by CEO Ethan Dube
and CFO Tafadzwa Mika, followed by a question and answer session, on
Wednesday, 25 April 2018, at 11:00 via a web/audio cast. The web/audio
cast link is as follows: http://www.corpcam.com/Vunani25042018.
These results are available on our website
Date: 25/04/2018 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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