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Preliminary Reviewed Condensed Consolidated Financial Results For The Year Ended 30 June 2018
ALVIVA HOLDINGS LIMITED
(incorporated in the Republic of South Africa)
Registration number: 1986/000334/06
ISIN: ZAE000227484
Share code: AVV
“Alviva” or “the Group” or “the Company”
PRELIMINARY REVIEWED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR
THE YEAR ENDED 30 JUNE 2018
and final cash dividend
AT A GLANCE
REVENUE at R14 billion UP 6%
ATTRIBUTABLE PROFIT at R422 million UP 4%
HEPS at 273,2 cents UP 12%
CORE EPS at 302,2 cents UP 18%
DIVIDEND DECLARED of 27 cents UP 8%
CASH GENERATED of R1 billion
COMMENTARY
INTRODUCTION
The Board of Directors of Alviva is pleased to present the
preliminary reviewed condensed consolidated financial results for
the year ended 30 June 2018.
OVERVIEW
Alviva produced a satisfactory performance for the year in spite
of the market and economic conditions that were, and remain,
prevalent. As we had cautioned in the interim reporting, the
tougher trading conditions continued into the second half.
Notwithstanding, the Group has delivered reasonable returns to
shareholders. The results are predominantly attributable to the
performance of the ICT Distribution segment and Alviva’s recent
investments, mainly the acquisition of the balance of Datacentrix
Holdings Limited (“Datacentrix”) in February 2017 along with the
investment into Alviva’s share repurchase programme.
The Group is well diversified and most divisions performed well,
showing encouraging growth throughout the year with the exception
of our three infrastructure businesses namely: Datanet, Infrasol
and Solareff.
Further acquisitions have been finalised during the year, as
detailed below, and these will start to contribute more
meaningfully in the ensuing reporting periods.
FINANCIAL RESULTS
Income statement
Revenue for the year increased by 6% to R13,6 billion (2017:
R12,8 billion), largely attributable to the additional revenue
from growth in the ICT Distribution segment and acquired
companies.
The Group performed reasonably well in all areas, except for the
businesses exposed to what we refer to as infrastructure
businesses namely our manufacturing, cabling, contractual cabling
and infrastructure work, and solar photovoltaic installations.
The combined effect of the performance of these businesses was a
reduction in net profit before tax of approximately R127 million
from the previous year. Additionally, expenses, although well
controlled, increased at a greater rate than revenue due to our
diversification strategy and investment into certain key areas of
the business from which future growth is expected. This left the
Group’s EBITDA marginally down at R820 million (2017: R824
million). Amortisation charges related to intangible assets
recognised on business combinations increased by R34 million.
The average weighted number of shares, from which earnings per
share and headline earnings per share are derived, at the end of
June 2018 was 154 million shares (2017: 166 million). This has
been due to share repurchases and treasury shares purchases for
the Group’s share incentive scheme.
Earnings per share increased by 12% to 273,5 cents per share
(2017: 244,2 cents per share) and headline earnings per share
were up by the same percentage to 273,2 cents per share (2017:
243,9 cents per share).
Statement of financial position
Intangible assets and goodwill, which includes the intangibles
related to the business combinations, amounted to R847 million
(2017: R463 million). Intangible assets and goodwill acquired in
the business combinations for the financial year amounted to
R439 million. Apart from the annual amortisation, there were no
further impairments recognised in profit or loss.
Working capital remains a key focus and continued to be well
controlled throughout the Group during the year and ended on
R789 million (2017: R933 million). This ensured that the Group
had significant cash resources of R691 million (2017: R390
million) at its disposal. Interest-bearing liabilities
principally comprise the asset-backed senior loan from Nedbank on
the Centrafin receivables of R436 million and preference share
funding from Absa of R340 million.
Cash flow statement
Cash generated by operating activities for the year ended 30 June
2018 was a healthy R1,0 billion (2017: R1,3 billion).
The purchase consideration paid on business combinations during
the year was R243 million and share repurchases (including
treasury shares acquired in support of the Group’s share
incentive scheme) amounted to R254 million.
SEGMENT PERFORMANCE
ICT Distribution
The ICT Distribution segment increased revenue by 9% and EBITDA
by 8%. The segment has traded well in a difficult market. Working
capital was well managed throughout the year, resulting in
reduced finance costs. Margins were improved due to the improved
deal management, optimised product mix and more consistent
inventory management.
Services and Solutions
The Services and Solutions segment increased revenue by 4% but
EBITDA decreased by 13%. The segment experienced delayed projects
and were unable to repeat some of the large projects executed in
the prior year, even though the activity levels and quote
registers have increased over the year. The effect of the
infrastructure businesses of Infrasol and Solareff had a marked
impact on its performance.
Financial Services
Centrafin (the Financial Services segment) increased revenue by
2% and EBITDA was marginally lower by 1%. The segment continued
to manage its book very well in tougher market conditions. The
recent brand refresh, combined with a move to new premises, had a
short-term diminution in the returns of the entity, but Alviva
remains confident that the business is being positioned for
growth in the longer term.
CORPORATE ACTIVITY
Gridcars Proprietary Limited (“Gridcars”)
On 31 August 2017, Alviva, through its 51%-held subsidiary
Solareff Proprietary Limited, subscribed for shares in Gridcars
to the value of R3 million, representing 75% of the total issued
equity. Gridcars is a Pretoria-based developer of electric
vehicle charge-point software management systems and supplier of
charge points. Alviva believes that growing a network of charge
points in South Africa will be the enabler of a carbon-free
transport system. This acquisition forms part of the Group’s
renewable energy business strategy.
Sintrex Integration Services Proprietary Limited (“Sintrex”)
Effective 31 October 2017, Alviva, through its subsidiary company
DCT Holdings Proprietary Limited (“DCT”), entered into an
agreement to acquire 51% of the shareholding in Sintrex for R102
million, and has an option to acquire a further 24% within a two-
year period following the effective date of the transaction.
Sintrex is an infrastructure management company, based in South
Africa, providing end-to-end IT solutions and services. Sintrex
develops IT products, services and solutions that, along with
global partnerships, provide clients with the visibility and
performance insight into IT infrastructure management, network
management and monitoring solutions.
The Sintrex acquisition will not only add a specialised products
and services offering, but also a higher margin business to the
Group.
VH Fibre Optics Proprietary Limited (“VH Fibre”)
Effective 30 November 2017, Alviva, through its subsidiary
company DCT, acquired 100% of the equity of VH Fibre for a total
purchase consideration of R110 million. VH Fibre specialises in
supplying fibre-to-the-home and fibre-to-the-building passive
network solutions to its customers and has the exclusive Prysmian
Group distribution agreement for South Africa.
This acquisition will give the Group access to the fibre
infrastructure business that it had not really addressed properly
and will enhance the margin in these product sets.
Obscure Enterprises Proprietary Limited (“Obscure”)
With effect from 1 February 2018 Alviva, through its subsidiary
company DCT, acquired 72% of the equity of Obscure for a purchase
consideration of R72 million based on future earnings. Obscure
specialises in brokering best-of-breed security solutions to
market, creating a channel for vendor and customers through its
offering of information security products and concepts. The
Obscure acquisition will enhance the cybersecurity product
offering in Alviva’s distribution cluster.
DG Store (SA) Proprietary Limited (“DG”)
With effect from 1 March 2018 Alviva, through its subsidiary
company Datacentrix Holdings Proprietary Limited, acquired 70% of
the equity of DG for a purchase consideration of R118 million. DG
is a leading provider of custom-made ICT business solutions,
designed to unlock and maximise the full lifecycle value of ICT
products, services and infrastructure for businesses in both the
public and private sectors. Its world-class products and
solutions range from the sourcing and supply of end-user
equipment like mobile devices, laptops and desktop PCs to the
provision and setup of high-end servers and networks, as well as
comprehensive infrastructure design and implementation and full
data centre solutions delivered on-premises, in the cloud or via
hybrid systems. The DG acquisition will enhance the services
offering to Alviva and adds to the Group’s exposure to enterprise
customers.
CHANGES TO THE BOARD
Resignation and appointment of new Chairperson
Following the resignation of Mr AJ Fourie, the Board announced
that Mr A Tugendhaft, the then current Deputy Chairperson, had
been appointed as the new Non-Executive Chairperson of Alviva.
The appointment was effective 3 October 2017. Mr Tugendhaft has
had a long-standing association with the Company, having served
the Board in various capacities including non-executive director,
Deputy Chairperson and member of the Remuneration Committee. The
Board thanks Mr Fourie for his phenomenal contribution to the
Group over the past twenty-five years and wishes him all of the
best in his future endeavours. The succession planning process,
that started two years ago, has therefore been successfully
implemented.
Appointment of a Lead Independent Director
Following the annual general meeting held on 23 November 2017, Mr
B Sibiya, the Lead Independent Director, opted not to stand for
re-election as a director. Ms P Natesan (38) was appointed as an
independent non-executive director and Lead Independent Director
with effect from 6 December 2017. Ms Natesan was also appointed
as a member of the Audit and Risk Committee and the Social and
Ethics Committee.
Ms Natesan holds the following qualifications – BCom (Cum Laude),
BCom (Honours), Chartered Accountant (SA). She joined the
Institute of Directors in Southern Africa (“IoDSA”) in 2010 as
senior governance specialist and has served as an executive
director of the IoDSA since September 2014. She serves on various
committees and holds various memberships including: member of the
South African Institute of Chartered Accountants, King Committee
on Corporate Governance, King IVTM Task Team, the Institute of
Directors in Southern Africa and the Institute of Directors UK.
SHARE REPURCHASES
At the AGM held on 25 November 2016, which authority was renewed
at the AGM held on 23 November 2017, shareholders gave the Board
general approval in terms of sections 46 and 48 of the Companies
Act, by way of special resolution, to acquire shares in the
Company. The Board exercised this authority and mandated the
repurchase of issued ordinary shares of the Company, to a maximum
of 32 993 583 shares. In the financial year, 11 020 717 ordinary
shares have been repurchased and cancelled.
DIVIDEND
The Company’s policy is to declare a dividend of 10% of HEPS (and
since the introduction of Dividends Tax, a gross dividend of 10%
of HEPS before deducting Dividends Tax). To this end, the Board
has declared a final dividend of 27 cents (2017: 25 cents) per
ordinary share for the financial year ended 30 June 2018.
Notice is hereby given that a final dividend of 27 cents per
ordinary share for the year ended 30 June 2018 has been declared
by the Board of Directors of the Company.
The salient dates applicable to the final dividend are as
follows:
DATE
Last day of trade “cum” dividend Tuesday, 13 November 2018
First day to trade “ex” dividend Wednesday, 14 November 2018
Record date Friday, 16 November 2018
Payment date Monday, 19 November 2018
No share certificates may be dematerialised or rematerialised
between Wednesday, 14 November 2018 and Friday, 16 November 2018,
both days inclusive.
Dividends are to be paid out of distributable reserves. Dividends
Tax of 20% will be withheld in terms of the Income Tax Act for
those shareholders who are not exempt from dividend tax. In
accordance with paragraphs 11.17(a)(i) to (ix) and 11.17(c) of
the JSE Listings Requirements, the following additional
information is disclosed:
– The gross local dividend amount is 27 cents per ordinary share
for shareholders exempt from Dividends Tax;
– The net local dividend amount is 21,6 cents per ordinary share
for shareholders liable to pay Dividends Tax;
– Alviva Holdings Limited has 157 217 917 ordinary shares in
issue (which includes 11 285 000 treasury shares of which
4 785 000 are FSP shares); and
– Alviva Holdings Limited’s income tax reference number is
9675/146/71/7.
Where applicable, payment in respect of certificated shareholders
will be transferred electronically to shareholders’ bank accounts
on the payment date. In the absence of specific mandates, payment
cheques will be posted to certificated shareholders at their risk
on the payment date. Shareholders who have dematerialised their
shares will have their accounts at their Central Securities
Depository Participant or broker credited on the payment date.
PROSPECTS
The outlook for the year to 30 June 2019 remains uncertain with
the South African economy facing significant challenges. As the
Group is primarily exposed to this market, it is of concern to
us.
Notwithstanding, we are confident that we will see a positive
impact from the recent acquisitions and the diversification
strategies implemented throughout the year in Centrafin and
investments made into cybersecurity, outsourcing and managed
services. The renewable energy outlook is more positive and the
order book in this division has improved significantly. In
addition, market demand is providing the Fibre division with good
opportunities and is performing ahead of expectations.
The Group is well positioned to take advantage, with sufficient
cash resources and facilities available, of any commercial
opportunities that may arise locally or outside the borders of
South Africa.
For and on behalf of the Board
A Tugendhaft P Spies
Chairperson Chief Executive Officer
5 September 2018
Midrand
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
for the year ended 30 June 2018
2018 2017
Reviewed Audited
R’000 R’000
Revenue 13 628 916 12 811 498
Cost of sales (11 219 810) (10 538 710)
Gross profit 2 409 106 2 272 788
Operating expenses (1 588 623) (1 448 670)
Selling expenses (95 923) (103 738)
Employee benefit expenses (1 273 532) (1 156 831)
Administration expenses (237 749) (187 361)
Profit on disposal of property,
plant and equipment 634 858
Gain on discounting of finance
lease agreements 2 656 3 702
Gain/(loss) on foreign exchange 15 291 (5 300)
EBITDA * 820 483 824 118
Depreciation and amortisation (130 354) (90 594)
Operating profit before interest 690 129 733 524
Net finance costs (121 257) (107 037)
Investment income 39 909 39 453
Finance costs (161 166) (146 490)
Profit before tax 568 872 626 487
Income tax expense (151 548) (182 494)
Net profit for the year 417 324 443 993
– Owners of the Company 421 707 405 277
– Non-controlling interests (4 383) 38 716
Other comprehensive income
– Items that can be reclassified to
profit or loss net of tax: 1 136 3 028
Exchange differences from translating
foreign operations 1 684 758
Cash flow hedge (548) 2 270
Total comprehensive income for
the year 418 460 447 021
– Owners of the Company 422 843 408 305
– Non-controlling interests (4 383) 38 716
Earnings per ordinary shares (cents)
– Basic earnings per ordinary share 273,5 244,2
– Diluted basic earnings per
ordinary share 269,4 243,5
* Earnings before interest, tax, depreciation and amortisation.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2018
2018 2017
Reviewed Audited
R’000 R’000
ASSETS
Non-current assets 1 554 618 1 079 064
Property, plant and equipment 120 697 104 661
Intangible assets and goodwill 847 153 462 703
Investment in equity-accounted
investee 62 077 –
Finance lease receivables 449 930 434 581
Deferred tax 74 761 77 119
Current assets 4 271 704 3 670 358
Inventory (Note 6) 774 111 751 702
Derivative financial asset – 3 287
Trade and other receivables 2 537 275 2 304 629
Finance lease receivables 230 508 210 972
Income tax receivable 38 352 10 008
Cash and cash equivalents 691 458 389 760
Total assets 5 826 322 4 749 422
EQUITY AND LIABILITIES
Capital and reserves 2 227 404 2 020 223
Stated capital 1 584 43 359
Treasury shares (129 090) (98 492)
Other equity reserves 54 268 41 436
Cash flow hedge reserve – 548
Retained earnings 2 211 329 2 010 921
Non-controlling interests 89 313 22 451
Non-current liabilities 943 016 585 642
Interest-bearing liabilities 749 636 510 145
Non-interest-bearing liabilities 98 635 –
Deferred revenue 11 327 39 320
Deferred tax 83 418 36 177
Current liabilities 2 655 902 2 143 557
Trade and other payables 2 364 929 1 974 752
Interest-bearing liabilities 42 019 5 572
Non-interest-bearing liabilities 68 850 –
Deferred revenue 157 235 148 818
Income tax payable 22 869 14 415
Total equity and liabilities 5 826 322 4 749 422
ADDITIONAL INFORMATION
Capital management
Net asset value per share (cents) 1 453,6 1 251,2
Net tangible asset value per
share (cents) 877,7 961,4
Working capital management
Investment in working capital (R’000) 789 222 932 761
Liquidity and solvency
Debt to equity (%) 37,0 25,8
Current ratio (excluding inventory
in transit and work in progress) 1,64 1,74
Acid test (excluding inventory in
transit and work in progress) 1,39 1,42
This information does not form part of the statement of financial
position but is disclosed as additional information for the user.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2018
2018 2017
Reviewed Audited
R’000 R’000
Profit before tax 568 872 626 487
Adjusted for:
Investment income (39 909) (39 453)
Finance costs 161 166 146 490
Non-cash flow items 140 087 89 845
– Profit on disposal of
fixed assets (included in EBITDA) (634) (858)
– Depreciation and amortisation 130 354 90 594
– Equity-based share-based
payment expense 11 222 4 570
– Other non-cash flow items (855) (4 461)
Changes in working capital 218 884 436 434
Cash generated by operating
activities 1 049 100 1 259 803
Net finance costs (121 257) (107 037)
Interest income received 39 909 39 453
Finance costs paid (161 166) (146 490)
Tax paid (186 364) (202 484)
741 479 950 282
Cash flows from investing
activities
Property, plant and equipment
acquired (47 394) (29 778)
Proceeds on disposals of property,
plant and equipment 5 059 8 398
Acquisition of intangible assets (26 447) (9 044)
Advances of loans to equity-
accounted investee (62 077) –
Acquisition of subsidiaries (243 069) –
Net investment in finance leases
receivables (34 111) (58 870)
(408 039) (89 294)
Cash flows from financing activities
Interest-bearing liabilities raised 235 619 150 000
Interest-bearing liabilities repaid – (4 007)
Repurchase of shares (254 084) (209 433)
Non-controlling interest acquired – (598 107)
Dividends paid to shareholders (39 662) (33 347)
(58 127) (694 894)
Increase in net cash, cash
equivalents and overdrafts 275 313 166 094
Net cash acquired from business
combinations 24 701 –
Net cash, cash equivalents at
beginning of the year 389 760 222 908
Effects of exchange rate changes on
the balance of cash held in
foreign currencies 1 684 758
Net cash, cash equivalents at
end of the year 691 458 389 760
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2018
2018 2017
Reviewed Audited
R’000 R’000
Opening balance 2 020 223 2 409 517
Ordinary shares repurchased
and cancelled (223 486) (150 231)
Treasury shares purchased * (30 598) (59 201)
Net profit for the year 417 324 443 993
Other comprehensive income 1 136 3 028
– Foreign currency translation
reserve movements 1 684 758
– Cash flow hedge reserve movements (548) 2 270
Net movements in non-controlling
interest ** 71 245 (598 106)
Equity-accounted share-based payment
reserve movements 11 222 4 570
Dividend paid (39 662) (33 347)
Closing balance 2 227 404 2 020 223
Attributable to:
Owners of the Company 2 138 091 1 997 772
Non-controlling interests 89 313 22 451
* These transactions include ordinary shares purchased and not
cancelled to service the forfeitable share plan.
** Excluding net profit attributable to non-controlling
interests.
SEGMENT ANALYSIS
for the year ended 30 June 2018
2018 2017
Reviewed Audited
R’000 R’000
Revenue
ICT Distribution 10 440 627 9 537 040
Services and Solutions 3 685 842 3 539 563
Financial Services 175 315 172 237
Less: Intra-segmental revenue (672 868) (437 342)
13 628 916 12 811 498
EBITDA *
ICT Distribution 458 509 422 636
Services and Solutions 235 673 271 979
Financial Services 115 926 116 831
Group Central Services 10 375 12 672
820 483 824 118
Reconciliation of profit
Segment EBITDA 820 483 824 118
Depreciation and amortisation (130 354) (90 594)
Net finance costs (121 257) (107 037)
Profit before tax 568 872 626 487
Net operating assets
ICT Distribution 1 144 079 1 019 142
Services and Solutions 611 195 499 213
Financial Services 193 429 197 254
Group Central Services 278 701 304 614
2 227 404 2 020 223
* Earnings before interest, tax, depreciation and amortisation.
The segments of the entity are based on the information reported
to the chief operating descision maker (CEO) and has not changed
from the prior reporting period.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL RESULTS
for the year ended 30 June 2018
1. SALIENT FEATURES OF THE PRELIMINARY REVIEWED CONDENSED
CONSOLIDATED FINANCIAL RESULTS
The preliminary reviewed condensed consolidated financial
statements comprise the condensed consolidated statement of
financial position at 30 June 2018, the condensed
consolidated statements of profit or loss and other
comprehensive income, changes in equity and cash flows and
notes for the year then ended. When reference is made to the
“Group” in the accounting policies, it should be interpreted
as referring to the Company, where the context requires,
unless otherwise noted.
RESPONSIBILITY FOR ANNUAL RESULTS
The Board takes full responsibility for the preparation of
this preliminary report.
BASIS OF PREPARATION AND STATEMENT OF COMPLIANCE
The preliminary reviewed condensed consolidated financial
statements for the year ended 30 June 2018 have been prepared
in accordance with the Group’s accounting policies under the
supervision of the Group Financial Director, Richard Lyon CA,
and complies with the framework concepts and the measurement
and recognition requirements of International Financial
Reporting Standards (“IFRS”), SAICA financial reporting
guides as issued by the Accounting Practices Committee and
Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council, the Listings Requirements for
preliminary reports of the JSE Limited, the requirements of
the Companies Act of South Africa (Act 71 of 2008), as
amended and to also as a minimum, contain all of the
information required by IAS 34: Interim Financial Reporting.
The preliminary reviewed condensed consolidated financial
statements of the Group are prepared as a going concern on a
historical basis except for certain financial instruments,
which are stated at fair value as applicable.
ACCOUNTING POLICIES, ESTIMATES AND JUDGEMENTS
The accounting policies, inclusive of reasonable judgements
and assessments, applied in the preliminary reviewed
condensed consolidated financial statements, are consistent
with those applied in the preparation of the audited
consolidated annual financial statements as at and for the
year ended 30 June 2017. The accounting policies applied are
consistent to the accounting policies applied in the
consolidated annual financial statements for the Group and
comply with IFRS.
The preparation of the consolidated annual financial
statements in conformity with IFRS requires management to
make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. The estimates
and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable
under the circumstances, the results of which form the basis
of making the judgements about carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised
and in any future periods affected.
PRESENTATION CURRENCY
The preliminary reviewed condensed consolidated financial
statements are presented in South African Rands, the
functional currency of the Group. All amounts are rounded to
the nearest thousand, except where another rounding measure
had been indicated in the condensed consolidated annual
financial statements.
NEW STANDARDS AND INTERPRETATIONS
All new standards and interpretations that came into effect
during the year were assessed and adopted with no material
impact to the preliminary reviewed condensed consolidated
financial statements.
The Group embarked on an extensive review programme of the
impact of the adoption of new standards and interpretations
that become effective in the next reporting period.
IFRS 9: Financial Instruments
The majority of financial assets held by the Company include
debt instruments namely trade and other receivables.
These debt instruments are currently classified as loans and
receivables and are measured at amortised cost. Trade and
other receivables continue to qualify for measurement at
amortised cost under this standard because they are held to
collect contractual cash flows comprising principal and
interest and held within the same business model, therefore
there is no change to the accounting for these assets.
Accordingly, the Company does not expect the new guidance to
affect the classification of these financial assets.
There will be no impact on the Group’s accounting for
financial liabilities. The new requirements only affect the
accounting for financial liabilities that are designated at
fair value through profit or loss but the nature of the
liabilities of the Group classified in this category, is not
dependent on the credit rating of the Group but represents a
loan commitment. The derecognition rules have been
transferred from IAS 39: Financial Instruments: Recognition
and Measurement and have not been changed.
Simplified impairment approach
The Group primarily holds trade and other receivables which
qualify for the simplified impairment approach under this
standard i.e. the recognition of lifetime expected credit
losses, as none of these items exceed 12 months under normal
trading conditions. The impact of the future recognition of
impairment losses will not change materially, in future
periods for the Group, in relation to trade and other
receivables which qualifies for the simplified impairment
approach.
Impairment matrix and forward-looking approach
The Group is currently in the process of assessing the impact
of this standard using the provision matrix approach with
reference to all financial instruments within the scope of
the impairment assessment criteria of the new standard. The
impact of the future recognition of impairment losses will
not change materially in future periods as the Group’s
current impairment assessment includes forward-looking
information, as required by the new standard, in the
assessment models applied to all financial instruments.
IFRS 15: Revenue from Contracts with Customers
Management has extensively reviewed all revenue streams
within the company. Due to the nature of the business, the
timing of recognition is not expected to materially impact
the revenue number for the reporting period commencing 1 July
2018.
This standard introduces expanded disclosure requirements and
changes in presentation. These are expected to change the
nature and extent of the Group’s disclosures about its
revenue particularly in the year of the adoption of this
standard. Disclosures shall include the disaggregation of
revenue by key categories.
IFRS 16: Leases
The Group has completed a detailed assessment of the
potential impact on its annual financial statements. The
detailed assessment was performed adopting an interest rate
implicit to the lease of 8,8% based on the incremental
borrowing interest rate. Furthermore, the assessment is based
on the active leases of the Group, the current lease amount
(exclusive of any variable lease elements i.e. parking,
cleaning and similar items) and the current assessment of the
reasonable certainty in relation to the lease term.
The most significant impact identified is that the Group will
recognise new assets and liabilities for its operating leases
of premises. As at 30 June 2018, the Group’s discounted
future minimum lease payments under non-cancellable operating
leases will result in a right of use asset of R250,01 million
with a corresponding lease liability of R250,01 million in
the statement of financial position.
The lease assessment indicated a net liability position
impact on the statement of financial position over the period
of the lease until the expiry of the lease period.
Management assessed all the standards and interpretations and
is of the opinion that none of these standards and
interpretations will have a material impact on the results of
the Group in future periods.
COMPARATIVE FIGURES
Unless otherwise indicated, comparative figures refer to the
12 months ended 30 June 2017.
FINANCIAL RISK MANAGEMENT
The Group’s financial risk management objectives and policies
are consistent with those disclosed in the audited
consolidated annual financial statements as at and for the
year ended 30 June 2017.
REVIEW CONCLUSION
The condensed consolidated financial statements and this
preliminary announcement have been reviewed by the Company’s
auditors, SizweNtsalubaGobodo Grant Thornton Incorporated.
The review has been conducted in terms of International
Standards on Review Engagements ISRE 2410: Review of Interim
Financial Information performed by the Independent Auditor of
the Entity. A copy of the unmodified review report is
available for inspection at the Company’s registered office.
This auditor’s review report does not necessarily report on
all the information contained in this announcement.
Shareholders are therefore advised that in order to obtain a
full understanding of the nature of the auditor’s engagement,
they should obtain a copy of this auditor’s review report
together with the accompanying financial information from the
Company’s registered office.
Any reference to future financial performance included in
this announcement has not been reviewed nor reported on by
the Company’s auditor.
2. FINANCIAL REVIEW
2018 2017
Reviewed Audited
Performance per ordinary
share (cents)
Basic and diluted earnings per
ordinary share
– Basic earnings per
ordinary share 273,5 244,2
– Diluted basic earnings per
ordinary share 269,4 243,5
Headline basic and headline
diluted earnings per ordinary share
– Headline earnings per
ordinary share 273,2 243,9
– Diluted headline earnings per
ordinary share 269,1 243,2
Core and diluted core earnings
per ordinary share
– Core earnings per ordinary share 302,2 256,3
– Diluted core earnings per
ordinary share 297,7 255,6
Dividend cover 10,6 12,2
Returns (%)
Gross profit 17,7 17,7
Operating expenses (11,7) (11,3)
EBITDA * 6,0 6,4
Operating profit before
interest and tax 5,1 5,7
Effective tax rate 26,6 29,1
Attributable net profit 3,1 3,2
Return on equity 20,4 19,9
* Earnings before interest, taxation, depreciation and
amortisation.
3. RECONCILIATION OF HEADLINE AND CORE EARNINGS
2018 2017
Reviewed Audited
R’000 R’000
Earnings attributable to
ordinary shareholders 421 707 405 277
Profit on sale of property,
plant and equipment net of tax (456) (618)
Profit on sale of property,
plant and equipment (634) (858)
Less: Tax thereon 178 240
Headline earnings 421 251 404 659
Acquisition costs net of tax 2 869 2 598
Amortisation of intangible assets
net of tax 41 910 17 997
Core earnings ** 466 030 425 254
Number of ordinary shares
in issue ('000)
– Total number of shares
in issue * 147 087 159 673
– Weighted average number of
shares in issue * 154 192 165 944
– Weighted average number of
shares in issue for purpose
of dilution* 156 536 166 417
* Adjusted for treasury shares.
** Core earnings per ordinary share is considered a meaningful
additional measure of evaluating the performance of the
Group’s operations. It is based on the headline earnings
measure and adjusted to exclude the amortisation cost of
intangible assets recognised in terms of business
combinations and related business combination acquisition
costs. This is not an IFRS measure.
4. BUSINESS COMBINATIONS
GridCars Proprietary Limited (“Gridcars”)
On 31 August 2017, the Group, through its 51%-held subsidiary
Solareff Proprietary Limited, obtained control of Gridcars by
acquiring a 75% interest in the issued stated capital and
voting rights of the company.
Gridcars is a developer of electric vehicle charge-point
software management systems and supplier of charge points.
The operations of Gridcars are aligned to the renewable
energy strategy adopted by the Group.
In the 10 months to the reporting date, Gridcars contributed
revenue of R900 000 and a loss of R1,6 million to the Group’s
results. Due to Gridcars being a start-up company, the
contributed revenue and profit would have remained unchanged
if the acquisition had occurred at the beginning of the
reporting period.
The total consideration was settled in cash by way of
electronic transfer during August 2017.
The transaction meets the definition of a business
combination as set out in IFRS 3: Business Combinations.
The fair value of the identifiable assets and liabilities
included in the consolidated results of Alviva Holdings
Limited on the date of acquisition, compared to the carrying
amounts of the identifiable assets and liabilities recognised
in the accounting records of the acquiree immediately before
the acquisition, were as follow:
Previously
Fair value recognised
recognised at carrying
acquisition amounts by
date acquiree
R’000 R’000
Property, plant and equipment 1 211 1 211
Intangible assets: software 2 789 2 789
Total assets 4 000 4 000
Total liabilities – –
Identifiable net assets 4 000 4 000
Non-controlling interest (1 000)
Acquirer's interest 3 000
Purchase consideration 3 000
Goodwill on acquisition –
The fair values have been determined on a provisional basis.
If any new information obtained within a year from the
acquisition date about the facts and circumstances that
existed at the acquisition date identifies adjustments to the
above amounts, or any additional provisions that existed at
the acquisition date then the acquisition accounting will be
revised.
The goodwill of this business combination will have no impact
on the tax asset or liability of the acquirer or acquiree.
No contingent liabilities were recognised as a result of the
business combination.
Sintrex Integration Systems Proprietary Limited (“Sintrex”)
On 31 October 2017, the Group, through its subsidiary DCT
Holdings Proprietary Limited, obtained control of Sintrex by
acquiring a 51,03% interest in the issued stated capital and
voting rights of the company.
Sintrex is an infrastructure management company providing
end-to-end IT solutions and related services.
In terms of the strategy adopted by the Group, the Board of
Directors identified the solutions offering of Sintrex as a
complementary service line offering to current and future
customers as well as synergistic end-to-end solutions within
the current spectrum of services of the Group.
In the eight months to the reporting date, Sintrex
contributed revenue of R59,5 million and profit of R6,4
million to the group’s results. If the acquisition had
occurred at the beginning of the reporting period`, Sintrex
would have contributed revenue of R88,1 million and a profit
of R4,8 million to the Group’s results.
The total consideration was settled in cash by way of
electronic transfer during November 2017.
The transaction meets the definition of a business
combination as set out in IFRS 3: Business Combinations.
The fair value of the identifiable assets and liabilities
included in the consolidated results of Alviva Holdings
Limited on the date of acquisition, compared to the carrying
amounts of the identifiable assets and liabilities recognised
in the accounting records of the acquiree immediately before
the acquisition, were as follow:
Previously
Fair value recognised
recognised at carrying
acquisition amounts by
date acquiree
R’000 R’000
Property, plant and equipment 5 443 5 443
Intangible assets 87 531 1 395
Investments 774 774
Inventories on hand 74 74
Deferred tax 2 008 2 008
Trade and other receivables 9 273 9 273
Cash and cash equivalents 12 190 12 190
Total assets 117 293 31 157
Loan payable (380) (380)
Deferred tax on intangible
assets: customer relationship (24 429) –
Trade and other payables (9 821) (9 821)
Current tax liabilities (332) (332)
Deferred tax (2 708) (2 708)
Total liabilities (37 670) (13 241)
Identifiable net assets 79 623 17 916
Non-controlling interest (38 991)
Acquirer's interest 40 632
Purchase consideration 102 058
Goodwill on acquisition 61 426
Cash flow information
Cash and cash equivalents
acquired 12 190
The total intangible assets acquired are classified as
customer relationships due to the fact that the Sinteligent
system, although being separately identifiable, has no
reliable determinable fair value. The customised software is
continuously updated to meet the requirements of specific
customers which is indicative of a close relationship between
the customer relationship intangible asset and the software.
Due to the fact that no active market exists for the
customised internally developed software, no reliable basis
for the separate measurement of the components could be
determined by management.
The fair values have been determined on a provisional basis.
If any new information obtained within a year from the
acquisition date about the facts and circumstances that
existed at the acquisition date identifies adjustments to the
above amounts, or any additional provisions that existed at
the acquisition date then the acquisition accounting will be
revised.
The fair value of the trade and other receivables acquired
represents the future contractual amounts receivable due to
the fact that none of the trade and other receivables extends
beyond the contract term. Management is of the opinion that
all outstanding trade and other receivables are recoverable.
The non-controlling interest related to the business
combination was measured at the proportionate share of the
recognised amounts of the acquiree’s net identifiable assets.
The goodwill of this business combination will have no impact
on the tax asset or liability of the acquirer or acquiree.
No contingent liabilities were recognised as a result of the
business combination.
DCT Holdings Proprietary Limited has a call option to
purchase an additional 24,28% interest in the issued share
capital of Sintrex. The intrinsic value of the call option
was determined at 30 June 2018 in terms of a discounted cash
flow model of which the following inputs were used:
– Discount rate: 13,20%
– Risk factor: 2%
– Growth rate: 5,37%
– Terminal growth rate: 6%.
The determined intrinsic value approximates the purchase
consideration to be paid in terms of the option agreement.
VH Fibre Optics Proprietary Limited (“VH Fibre”)
On 30 November 2017, the Group, through its subsidiary DCT
Holdings Proprietary Limited, obtained control of VH Fibre by
acquiring a 100% interest in the issued stated capital and
voting rights of the company.
VH Fibre is an infrastructure management company providing
end-to-end IT solutions and related services. In terms of the
strategy adopted by the Group, the Board of Directors
identified the solutions offering of VH Fibre as a
complementary service line offering to current and future
customers as well as synergistic end-to-end solutions within
the current spectrum of services of the Group.
In the seven months to the reporting date, VH Fibre
contributed revenue of R157,9 million and profit of R18,2
million to the Group’s results. If the acquisition had
occurred at the beginning of the reporting period, VH Fibre
would have contributed revenue of R256,8 million and profit
of R27 million to the Group’s results.
R46 million of the total consideration was settled in cash by
way of electronic transfer in December 2017, with the
remaining consideration payable over the next two years based
on the audited results of the company for the 2018 and 2019
reporting periods. The consideration due has been recorded as
a loan payable. The portion of the contingent consideration
based on the 2018 financial results will be settled within
the next 12 months and the portion relating to the 2019
financial results will be settled during the 2020 financial
period. These amounts have been recognised as a current and
non-current liability, respectively, in the statement of
financial position.
The transaction meets the definition of a business
combination as set out in IFRS 3: Business Combinations.
The fair value of the identifiable assets and liabilities
included in the consolidated results of Alviva Holdings
Limited on the date of acquisition, compared to the carrying
amounts of the identifiable assets and liabilities recognised
in the accounting records of the acquiree immediately before
the acquisition, were as follow:
Previously
Fair value recognised
recognised at carrying
acquisition amounts by
date acquiree
R’000 R’000
Property, plant and equipment 3 305 3 305
Intangible assets 44 535 –
Deferred tax 130 130
Trade and other receivables 46 053 46 053
Inventory 20 836 20 836
Cash and cash equivalents 14 14
Total assets 114 873 70 338
Other financial liabilities (5 649) (5 649)
Deferred tax on intangible
assets: customer relationship (12 470) –
Trade and other payables (29 758) (29 758)
Bank overdraft (2 202) (2 202)
Current tax (3 635) (3 635)
Total liabilities (53 714) (41 244)
Identifiable net assets 61 159 29 094
Non-controlling interest –
Acquirer's interest 61 159
Purchase consideration 110 000
Goodwill on acquisition 48 841
Cash flow information
Cash and cash equivalents
acquired (2 189)
The fair values have been determined on a provisional basis.
If any new information obtained within a year from the
acquisition date about the facts and circumstances that
existed at the acquisition date identifies adjustments to the
above amounts, or any additional provisions that existed at
the acquisition date then the acquisition accounting will be
revised.
The fair value of the trade and other receivables acquired
represents the future contractual amounts receivable due to
the fact that none of the trade and other receivables extends
beyond the contract term. Management is of the opinion that
all outstanding trade and other receivables are recoverable.
The goodwill of this business combination will have no impact
on the tax asset or liability of the acquirer or acquiree.
No contingent liabilities were recognised as a result of the
business combination.
Obscure Enterprises Proprietary Limited (“Obscure”)
With effect from 1 February 2018, the Group, through its
subsidiary DCT Holdings Proprietary Limited, obtained control
of Obscure by acquiring a 72% interest in the issued stated
capital and voting rights of the company.
Obscure serves as a valued channel for vendors and customers
through the promotion and distribution of information
security products. In terms of the strategy adopted by the
Group, the Board of Directors identified the solutions
offering of Obscure as a complementary distribution line
offering to current and future customers as well as
synergistic end-to-end solutions within the current spectrum
of services of the Group.
In the five months to the reporting date, Obscure contributed
revenue of R73,5 million and profit of R500 000 to the
Group’s results. If the acquisition had occurred at the
beginning of the reporting period, Obscure would have
contributed revenue of R138 million and profit of R1,1
million to the Group’s results.
The purchase price is capped at R72 million and, due to
Obscure still being in its infancy stages, it is payable in
three tranches, based on the company’s audited results for
the years ending from 2019 to 2022. The consideration due has
been recorded as a non-current loan payable and has been
valued at fair value.
The transaction meets the definition of a business
combination as set out in IFRS 3: Business Combinations.
The fair value of the identifiable assets and liabilities
included in the consolidated results of Alviva Holdings
Limited on the date of acquisition, compared to the carrying
amounts of the identifiable assets and liabilities recognised
in the accounting records of the acquiree immediately before
the acquisition, were as follow:
Previously
Fair value recognised
recognised at carrying
acquisition amounts by
date acquiree
R’000 R’000
Property, plant and equipment 1 175 1 175
Intangible assets: customer
relationship 42 302 –
Trade and other receivables 9 978 9 978
Inventory 142 142
Other financial assets 403 403
Cash and cash equivalents 311 311
Total assets 54 311 12 008
Deferred tax on intangible
assets: customer relationship (11 845) –
Other financial liabilities (4 906) (4 906)
Trade and other payables (7 560) (7 560)
Bank overdraft (589) (589)
Total liabilities (24 900) (13 055)
Identifiable net assets 29 411 (1 047)
Non-controlling interest (8 235)
Acquirer's interest 21 176
Purchase consideration 60 872
Goodwill on acquisition 39 696
Cash flow information
Cash and cash equivalents
acquired (278)
The fair values have been determined on a provisional basis.
If any new information obtained within a year from the
acquisition date about the facts and circumstances that
existed at the acquisition date identifies adjustments to the
above amounts, or any additional provisions that existed at
the acquisition date then the acquisition accounting will be
revised.
The fair value of the trade and other receivables acquired
represents the future contractual amounts receivable due to
the fact that none of the trade and other receivables extends
beyond the contract term. Management is of the opinion that
all outstanding trade and other receivables are recoverable.
The non-controlling interest related to the business
combination was measured at the proportionate share of the
recognised amounts of the acquiree’s net identifiable assets.
The goodwill of this business combination will have no impact
on the tax asset or liability of the acquirer or acquiree.
No contingent liabilities were recognised as a result of the
business combination.
DG Stores (SA) Proprietary Limited (“DG”)
With effect from 1 March 2018, the Group, through its
subsidiary Datacentrix Holdings Proprietary Limited, obtained
control of DG by acquiring a 70% interest in the issued
stated capital and voting rights of the company.
DG is a provider of custom-made and highly specified ICT
equipment and business models, according to specific customer
requirements. The company sells and distributes to major
players within the financial services provider industry, such
as major banks, as well as major retailers, the telecoms
industry, South African municipalities and government
institutions. In terms of the strategy adopted by the Group,
the Board of Directors identified the solutions offering of
DG as a complementary service line offering to current and
future customers as well as synergistic end-to-end solutions
within the current spectrum of services of the Group.
In the four months to the reporting date, DG contributed
revenue of R326 million and profit of R6,6 million to the
Group’s results. If the acquisition had occurred at the
beginning of the reporting period, DG would have contributed
revenue of R893,7 million and profit of R14,2 million to the
Group’s results.
The total purchase consideration amounted to R117,9 million.
R92,4 million was settled in cash via electronic transfer in
March 2018, and the balance of R25,5 million will be settled
during the 2019 reporting period. The consideration due has
been recognised as a current loan in the statement of
financial position.
The transaction meets the definition of a business
combination as set out in IFRS 3: Business Combinations.
The fair value of the identifiable assets and liabilities
included in the consolidated results of Alviva Holdings
Limited on the date of acquisition, compared to the carrying
amounts of the identifiable assets and liabilities recognised
in the accounting records of the acquiree immediately before
the acquisition, were as follow:
Previously
Fair value recognised
recognised at carrying
acquisition amounts by
date acquiree
R’000 R’000
Property, plant and equipment 7 995 7 995
Intangible assets: customer
relationship 49 163 –
Tax receivable 58 58
Trade and other receivables 118 079 120 189
Inventory 23 285 23 285
Cash and cash equivalents 14 978 14 978
Total assets 213 558 166 505
Other financial liabilities (13 700) (13 700)
Deferred tax (237) (237)
Deferred tax on intangible
assets: customer relationship (13 766) –
Trade and other payables (107 474) (107 474)
Dividend withholding taxation (4 000) (4 000)
Current tax (847) (847)
Total liabilities (140 023) (126 258)
Identifiable net assets 73 535 40 247
Non-controlling interest (22 060)
Acquirer's interest 51 474
Purchase consideration 117 900
Goodwill on acquisition 66 426
Cash flow information
Cash and cash equivalents
acquired 14 978
The fair values have been determined on a provisional basis.
If any new information obtained within a year from the
acquisition date about the facts and circumstances that
existed at the acquisition date identifies adjustments to the
above amounts, or any additional provisions that existed at
the acquisition date then the acquisition accounting will be
revised.
The fair value of the trade and other receivables acquired
represents the future contractual amounts receivable due to
the fact that none of the trade and other receivables extends
beyond the contract term. Management is of the opinion that
all outstanding trade and other receivables are recoverable.
The non-controlling interest related to the business
combination was measured at the proportionate share of the
recognised amounts of the acquiree’s net identifiable assets.
The goodwill of this business combination will have no impact
on the tax asset or liability of the acquirer or acquiree.
No contingent liabilities were recognised as a result of the
business combination.
5. ANALYSIS OF GOODWILL
2018 2017
Reviewed Audited
R’000 R’000
Opening balance 347 846 347 846
Business combinations 216 389 –
Impairments – –
Closing balance 564 235 347 846
Analysis of goodwill per
business combination
Sintrex 61 426 –
VH Fibre 48 841 –
Obscure 39 696 –
DG Store 66 426 –
216 389 –
6. INVENTORY ANALYSIS
2018 2017
Reviewed Audited
R’000 R’000
Inventory on hand 635 285 669 125
Inventory in transit 112 729 58 119
Work in progress 26 097 24 458
774 111 751 702
7. FAIR VALUE ESTIMATION
Financial instruments measured in the statement of financial
position at fair value require disclosure. The following is
the fair value measurement hierarchy:
Level 1 – fair value is determined from quoted prices
(unadjusted) in active markets for identical assets or
liabilities.
Level 2 – fair value is determined through the use of
valuation techniques based on observable inputs, either
directly or indirectly.
Level 3 – fair value is determined through the unobservable
inputs for the asset or liability.
The following table presents the Group’s assets and
liabilities that are measured at fair value:
2018 2017
Reviewed Audited
Level R’000 R’000
Financial assets:
Derivative financial
asset 2 – 3 287
Financial liabilities:
Contingent consideration * 3 161 889 –
* The contingent consideration is classified as part of the
non-interest-bearing liabilities in the statement of
financial position.
The fair value of financial instruments traded in active
markets is based on quoted market prices, which represent
actual and regularly occurring market transactions between
market participants at the reporting date. A market is
regarded as active if quoted prices are readily and regularly
available from an exchange, dealer, broker or industry group,
pricing market transactions on an arm’s length basis, while
transactions occur regularly.
The fair value of financial instruments that are not traded
in an active market (for example, over-the-counter
derivatives) is determined by using valuation techniques.
These valuation techniques maximise the use of observable
market data where it is available and rely as little as
possible on entity-specific estimates. If all significant
inputs required to fair value an instrument are observable,
the instrument is included in level 2.
If one or more of the significant inputs are not based on
observable market data, the instrument is included in level
3. The fair value of the contingent consideration was
determined at the reporting date in terms of the discounted
cash flow method. The inputs into the model included the
expected cash flows in terms of the performance conditions of
the acquirees, based on internally prepared budget and
forecasted estimates, discounted at a rate of 8,8%, which
represents the intrinsic borrowing rate of the treasury
function of the Group. Based on the expected timing of the
cash flows related to the contingent consideration and the
respective acquisition dates of the respective entities, the
fair value at the reporting date approximates the contingent
consideration recognised on the acquisition dates of the
business combinations.
For all other financial assets and liabilities, the carrying
value approximates the fair value.
There were no other financial instruments measured at fair
value that were individually material at the end of the
current reporting period.
8. EVENTS AFTER THE REPORTING DATE
Specific Repurchase Tranche 2
Shareholders are referred to the announcement released on
SENS on 29 August 2018 relating to the specific repurchase of
treasury shares (“the Tranche 2 Shares”) by Alviva from
Alviva Treasury Services Proprietary Limited (“Alviva
Treasury Services”), to be implemented in terms of the JSE
Listings Requirements and sections 48(8)(b), 114 and 115 of
the Companies act and the subsequent delisting of the Tranche
2 Shares from the JSE and the cancellation thereof.
The impact of the Specific Repurchase Tranche 2 on the issued
share capital of the Company is that the ordinary shares in
issue will be reduced by 6 500 000 to 150 717 917. The
Company’s share capital account will be reduced by
R65 000,00, being the 6 500 000 ordinary shares with a par
value of 1 (one) cent per ordinary share. The Company’s
reserves will be reduced by the difference between the
purchase price and the par value of the ordinary shares,
being 1 (one) cent per ordinary share, as the Company will
elect to make payment of the Specific Repurchase Tranche 2
considerations out of distributable reserves, which will
constitute a “dividend” as per the Income Tax Act no 58 of
1962.
The Specific Repurchase Tranche 2 consideration will be paid,
in full, in accordance with the terms of the Specific
Repurchase Tranche 2 without regard to any lien, right of
set-off, counterclaim or other analogous right to which
Alviva may otherwise be, or claim to be, entitled against any
Alviva Treasury Services.
The Board resolved to repurchase, delist and cancel the
specific repurchase shares in order to:
– simplify the Group structure;
– eliminate accounting and regulatory complexities arising
from treasury shares in general; and
– save additional costs of administration.
The circular, containing full details of the Specific
Repurchase Tranche 2, as well as the salient dates and times
of the AGM, will be incorporated in the 2018 integrated
annual report. The notice of AGM, to form part of the 2018
integrated annual report, will include a special resolution
relating to the Specific Repurchase Tranche 2 and will be
posted to shareholders on or about Friday, 28 September 2018.
General repurchase of shares
Subsequent to the year-end, the Company repurchased and
cancelled an additional 1 153 937 shares under the authority
granted by shareholders at the AGM on 23 November 2017.
Forfeitable Share Plan (“FSP 3”)
FSP 3, along with its participants and share allocation, was
approved by the Board of Directors on 12 June 2018. A total
of 1 610 000 shares were allocated to FSP 3 and all
participants accepted the shares granted to them. FSP 3
became effective after the end of the reporting period.
Acquisition of Tricon Services
Alviva has completed the acquisition of the Services Division
of Tri Continental Limited (“Tri Continental”) on 3 September
2018 for a cash consideration of approximately R70 million.
Tri Continental is an IT-based company in London and has
operated in the African market for over 30 years. Alviva has
been granted the right to use the naming rights to “Tricon
Services” and it will operate as a division within the Group.
Tricon Services has developed a services operation, with a
resource complement of 200 multi-disciplined certified IT
resources, that spans 37 countries in Central, East and West
Africa (CEWA) and Southern Africa. It services an extensive
network of IT partners, customers and integrators through its
long-term relationship with a number of major international
IT vendors and suppliers.
The transaction meets the definition of a business
combination as set out in IFRS 3: Business Combinations.
Management is in the process of finalising the acquisition
method of recognition in terms of the business combination as
the transaction still falls within the allowable measurement
period as permitted by IFRS 3: Business Combinations.
5 September 2018
Midrand
ALVIVA HOLDINGS LIMITED
(incorporated in the Republic of South Africa)
Registration number: 1986/000334/06
ISIN: ZAE000227484
Share code: AVV
“Alviva” or “the Group” or “the Company”
DIRECTORS:
A Tugendhaft * (Chairman), P Spies (Chief Executive Officer),
SH Chaba *^, RD Lyon (Chief Financial Officer), N Medupe *^,
P Natesan *^ (Lead Independent Director)
* Non-executive ^ Independent
REGISTERED OFFICE:
The Summit, 269 16th Road, Randjespark, Midrand, 1685
PREPARER OF RESULTS: RD Lyon CA
COMPANY SECRETARY: Ms SL Grobler CA(SA)
TRANSFER SECRETARIES:
Computershare Investor Services (Pty) Ltd, Rosebank Towers, 15
Biermann Avenue, Rosebank, 2196
AUDITORS:
SizweNtsalubaGobodo Grant Thornton Incorporated, Registered
Auditors, Summit Place Office Park, Building 4, Garstfontein Road
221, Menlyn, 0081
SPONSOR:
Deloitte & Touche Sponsor Services (Pty) Ltd, Building 8,
Deloitte Place, The Woodlands, 20 Woodlands Drive, Woodmead,
2196
www.alvivaholdings.com
Date: 05/09/2018 03:39:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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