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Summarised audited consolidated results of eXtract group limited for the 12 months ended 31 August 2018
EXTRACT GROUP
(Incorporated in the Republic of South Africa)
(Registration number: 1998/011672/06)
JSE share code: EXG ISIN: ZAE000246013
SUMMARISED AUDITED CONSOLIDATED RESULTS OF EXTRACT GROUP LIMITED FOR THE 12 MONTHS ENDED 31 AUGUST 2018
FINANCIAL REVIEW
- The Group reported a loss for the year of R161 million (including
profit on sale of subsidiary of R9 million) compared to a loss of
R2 013 million in the prior period.
- R753 million of mining assets sold during the year
- All mining contracts being exited in order to monetise
asset base
SALIENT FEATURES
- enX restructuring implemented on 12 October 2017
- Debt conversion of R1 877 million effective in October 2017
- Net asset value at the end of the year of R179 million
INTRODUCTION
During the year under review eXtract Group Limited ("eXtract" or
the "Group") has continued to focus on exiting the remaining mining
contracts in a responsible manner and stabilising the remaining
business while the downsizing continues.
All the remaining mining contracts were exited during the financial
year (Mogalakwena, Tharisa and Aganang, which ceased at the
end of November 2017, and Mozambique, which ceased during
December 2017).
As previously communicated, the following key events took place
during the financial year:
- Repayment of all bank debt;
- enX Group Limited ("enX") debt to equity conversion of
R1 877 million implemented on 12 October 2017;
- Repayment of the R250 million enX debt;
- Sale of interest in the Last Mile Fund at face value of R25 million,
receivable over a three-year period;
- Sale of assets to Tharisa, Mogalakwena and Aganang as going
concerns;
- Resolution of the Eqstra Botswana liquidation process and
sanctioning by the High Court in Botswana;
- Significant reduction of eXtract's overhead costs, including a
reduction in headcount;
- Materially reduced head office structure;
- Disposal of further excess assets (R753 million for the year under
review); and
- Changes to the board of directors ("Board") and management
of eXtract.
SUBSEQUENT EVENTS
Subsequent to the year-end, the following material events occurred:
- Disposal of further excess assets of R11 million to end November 2018;
- Announcement of the proposed delisting of eXtract, subject to the
approval from shareholders and the JSE; and
- Cash offer of R6.00 per eXtract share at delisting date, in
compliance with the JSE Listings Requirements.
FUTURE STRATEGY
Pursuant to the strategic review undertaken in the prior year, a number
of key outcomes have been identified and the implementation is on
track. The ultimate goal remains to protect the remaining shareholder
value. The Board will in parallel look to further transform the Group
should any attractive opportunities arise. The Board believes this
strategy could be best achieved in a delisted environment.
SOLVENCY AND LIQUIDITY
The Board is satisfied that after the conversion of the enX mezzanine
debt and preference share instruments into equity during the
financial year, the Group is solvent at the reporting year-end and for
the foreseeable future.
The Board is further satisfied that the strategies to address the liquidity
risks are on track and are being effectively addressed and the Group
has the ability to settle liabilities as they become due and payable.
DIVIDEND
The Board has not declared a dividend given the Group's
performance and change in strategy.
LOOKING AHEAD
As previously communicated, eXtract will continue to focus on these
commitments in the short to medium-term:
- Monetisation of assets held for sale;
- Improving the efficiencies of existing leasing contracts; and
- Further transform the Group should any attractive opportunities arise.
GOING CONCERN
The results presented for the Group have been prepared on the
assumption that the Group, as a whole, will continue to operate as
a going concern.
DIRECTOR CHANGES
The following directors resigned on 23 February 2018:
- Bernard Swanepoel - Executive chairman
- Clinton Halsey - Interim chief executive officer and chief
investment officer
- Sipho Nkosi - Lead independent non-executive director
- Octavia Matloa - Independent non-executive director
- Khetiwe McClain - Independent non-executive director
The following directors were appointed on 23 February 2018:
- Frank Davidson - Lead independent non-executive director and on
19 November 2018 appointed as Audit and Risk Committee chair
- Nelis Leonard - Non-executive director
- Fedja Basic - Independent non-executive director
Further changes were executed during the year:
- Fedja Basic resigned as an independent non-executive director
with effect from 30 July 2018
- Andrew Hannington was appointed as an independent
non-executive director effective 21 August 2018 and Board chair
from 19 November 2018
The following director's function was changed as announced on
SENS on 3 May 2018:
- Jannie Serfontein - is Chief executive officer and Chief
financial officer
By order of the Board
JL Serfontein
Chief executive officer and Chief financial officer
11 December 2018
AUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31 August 31 August
2018 2017
as at Rm Rm
ASSETS
Non-current assets 17 -
Loans 17 -
Current assets 203 1 267
Inventories - 15
Trade and other receivables 65 313
Cash and cash equivalents 61 109
Assets held for sale(2) 77 830
Total assets 220 1 267
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 3 768 1 891
Other reserves 308 325
Accumulated loss (3 897) (3 736)
Equity/(deficit) attributable to owners
of the parent 179 (1 520)
Non-controlling interests - -
Total equity/(deficit) 179 (1 520)
Non-current liabilities 1 1 891
Interest-bearing borrowings(3) - 1 877
Deferred tax liabilities 1 14
Current liabilities 40 896
Trade and other payables 19 226
Provisions 20 -
Current tax liabilities 1 -
Liabilities associated with assets held
for sale(2) - 670
Total equity and liabilities 220 1 267
AUDITED SUMMARISED CONSOLIDATED STATEMENT OF OTHER
COMPREHENSIVE INCOME
for the for the
12 months 14 months
ended ended
31 August 31 August
2018 2017
Rm Rm
Loss for the period (161) (2 013)
Total other comprehensive gain/(loss)
for the period, net of taxation
Items that may be reclassified
subsequently to profit or loss 16 (72)
Exchange differences on translation
of foreign subsidiaries 16 (76)
Net fair value gain on cash flow
hedges and other fair value reserves - 4
Total comprehensive loss for the
period, net of taxation (145) (2 085)
Attributable to:
Owners of the parent (145) (2 087)
Non-controlling interests - 2
(145) (2 085)
AUDITED SUMMARISED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME - DISCONTINUED OPERATIONS
for the 12 for the 14
months months
ended ended
31 August 31 August
2018 2017
Rm Rm
Revenue 999 5 418
(Loss)/profit from operations before
depreciation and amortisation (230) 635
Depreciation and amortisation - (330)
Operating (loss)/profit (230) 305
Net foreign exchange losses (4) (36)
Fair value gains recycled from equity 46 44
Net reversal of impairment/
(impairment) of assets(6) 7 (1 494)
IFRS 5 impairment (30) (448)
Loss before net finance costs (211) (1 629)
Net finance costs (1) (340)
Finance costs (6) (353)
Finance income 5 13
Loss before taxation (212) (1 969)
Income tax 42 22
Loss for the period (170) (1 947)
Profit/(loss) on sale of subsidiaries(7) 9 (3)
Deconsolidation of subsidiary - (63)
Total loss for the period from
operations (161) (2 013)
Attributable to: (161) (2 013)
- Owners of the parent (161) (2 015)
- Non-controlling interest - 2
Loss for the period (161) (2 013)
Cents Cents
Loss per share from operations(11)
- Basic and diluted loss per share (818.5) (84 630.7)
* Prior year adjusted for the effect of the share consolidation of 200:1.
AUDITED SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
for the for the
12 months 14 months
ended ended
31 August 31 August
2018 2017
Rm Rm
Cash flows from operating activities
Cash (utilised by)/generated from
operations before working capital
movements (173) 740
Working capital movements 67 594
Cash (utilised by)/generated from
operations (106) 1 334
Finance income 4 13
Finance costs (6) (353)
Taxation paid (2) (45)
Net cash flows from operating
activities (110) 949
Cash flows from investing activities
Disposal of businesses (11) (11)
Net capital proceeds on disposals 716 (211)
Movement in finance lease
receivables - 36
Loans provided (25) -
Net cash flows from investing activities 680 (186)
Cash flows from financing activities
Issue of shares - 37
Conversion of treasury shares - 15
Dividends paid to minorities - (2)
Net decrease in interest-bearing
borrowings (625) (995)
Net cash flows from financing activities (625) (945)
Net decrease in cash and cash
equivalents (55) (182)
Effect of exchange rate translation on
cash and cash equivalents - (20)
Derecognition of cash and cash
equivalents 7 (23)
Cash and cash equivalents at
beginning of period 109 334
Cash and cash equivalents at end
of period 61 109
AUDITED SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Stated Total Retained Non-controlling
capital other reserves (loss)/income interest Total
Rm Rm Rm Rm Rm
Balance at 1 July 2016 1 839 449 (688) 29 1 629
Total comprehensive loss for the period - (72) (2 015) 2 (2 085)
Loss for the period - - (2 015) 2 (2 013)
Other comprehensive loss for the period, net of taxation - (72) - - (72)
Vesting of share incentive scheme - (4) - - (4)
New issue of stated capital 37 - - - 37
Conversion of treasury shares 15 - - - 15
Dividend paid - - - (2) (2)
Dividend in specie - - (1 022) - (1 022)
Realisation of translation reserve - (44) - - (44)
Reversal of share-based payment reserve - 12 - - 12
Taxation on realisation of translation reserve - (17) 17 - -
Transfer within categories of reserves - 23 (23) - -
Disposal of subsidiary - (27) - (29) (56)
Deferred taxation directly in equity - 5 (5) - -
Balance at 31 August 2017 1 891 325 (3 736) - (1 520)
Total comprehensive loss for the year - 16 (161) - (145)
Loss for the year - - (161) - (161)
Other comprehensive gain for the year, net of taxation - 16 - - 16
New issue of stated capital* 1 877 - - - 1 877
Realisation of foreign currency translation on loan - (46) - - (46)
Taxation on realisation of translation reserve - 13 - - 13
Balance at 31 August 2018 3 768 308 (3 897) - 179
* 3 755 171 985 (2017: 101 400 000) shares were issued at fair value of 50 cents per share (2017: 37 cents per share).
(1) Basis of preparation
The audited summarised consolidated financial statements for
the 12 months ended 31 August 2018 have been prepared in
accordance with the framework concepts, measurement and
recognition requirements of International Financial Reporting
Standards ("IFRS"), the SAICA Financial Reporting Guides, as
issued by the Accounting Practices Committee and the Financial
Reporting Pronouncements as issued by the Financial Reporting
Standards Council and contains information required by IAS 34:
Interim Financial Reporting, the JSE Limited Listings Requirements
and the South African Companies Act. The accounting policies
and their application are consistent, in all material respects, with
those detailed in eXtract's 2017 annual financial report, except
for the adoption on 1 September 2017 of those new, revised and
amended standards and interpretations detailed therein. These
financials were audited and reported on by eXtract's auditors
and prepared by eXtract's CFO, JL Serfontein.
The adoption of the new and amended statements of generally
accepted accounting practice, interpretations of statements of
generally accepted accounting practice, and improvements
project amendments did not have a material impact on eXtract.
31 August 31 August
2018 2017
(2) Assets and liabilities held for sale
ASSETS
Property plant and equipment 58 52
Leasing assets (net of selling costs) 19 778
Total assets held for sale 77 830
LIABILITIES
Interest-bearing borrowings
(net of contract mining debt) - 375
Mezzanine loan with enX - 250
Operating liabilities - 625
Current tax liabilities - 45
Total liabilities associated to
assets held for sale - 670
Excess assets
Assets held for sale comprise assets in South Africa of R50 million
(August 2017: R696 million) and assets in Mozambique of
R27 million (August 2017: R134 million). Management believe
that the sales of the remainder of the assets are highly probable
within the next 12 months.
(3) Interest-bearing borrowings
On 12 October 2017 enX converted R1 877 million debt to equity.
eXtract repaid all bank debt as well as R250 million due to enX
during the year from proceeds of asset sales resulting in a cash
positive position at year-end, with no debt remaining.
31 August 31 August
2018 2017
Capital commitments and
(4) contingent liabilities
Capital commitments contracted - -
Capital commitments authorised by directors
but not contracted - -
Contingent liabilities 3 -
(5) Fair value hierarchy disclosures
R47 million of the assets held for sale were valued at fair value based
on independent valuators valuation.
R30 million of the assets held for sale were valued using sales contracts
that were entered into subsequent to year end.
Period Period
ended ended
31 August 31 August
2018 2017
Rm Rm
(6) Net reversal of impairment/
(impairment) of assets
Impairment of leasing assets - (1 411)
Impairment of intangible assets - (32)
Impairment of restricted cash - (18)
Impairment of property, plant and
equipment - (33)
Reversal of impairment of cash 7 -
Total impairments 7 (1 494)
(7) Profit/(loss) on sale of subsidiaries
Analysis of assets and liabilities
disposed of:
Trade and other receivables (77) -
Cash and cash equivalents (11) -
Assets held for sale (1) (3)
Trade and other payables 90 -
Provision for liabilities 8 -
Net liabilities disposed of at no
consideration, resulting in a profit/
(loss) on sale 9 (3)
On 29 August 2018 the Group disposed of PTT MCC Extraction
Solutions Indonesia Limited for no consideration. As the liabilities
exceeded the assets the Group reported a net profit on disposal.
During the 2017 financial period the Group disposed of the
Eqstra Fleet Management and Logistics and Industrial Equipment
divisions to enX Group Limited at a loss of R3 million.
(8) Segmental disclosures
The 2018 results consist of one segment being the Contract
Mining division, hence no separate segmental analysis had
been prepared. The 2017 financial period comprised the
Contract Mining division and as discontinued the corporate
disposal group being the previous Eqstra entities (Eqstra Fleet
Management and Eqstra Industrial Equipment).
(9) Discontinued operations
All operations have been classified as discontinued in line with
the Group strategy.
Audited Audited
31 August 31 August
2018 2017
Cents Cents
(10) Net asset/(deficit) value per share
attributable to owner of the parent 840.0 (59 972)
(11) Headline loss per share
Reconciliation of discontinued
headline loss per share
Basic and diluted loss per share (818.5) (84 630.7)
Net impairments of assets (35.6) 62 748.5
IFRS 5 fair value adjustment 152.5 18 816.2
(Profit)/loss on sale of subsidiaries (45.7) 126.0
Deconsolidation of subsidiary - 2 646.0
Taxation effect - (2 646.0)
Headline loss per share (747.3) (2 940.0)
Audited Audited
31 August 31 August
2018 2017
Million Million
(12) Weighted average number of
shares in issue for the period
Number of ordinary shares
- in issue 21.3 2.5
- in issue (net of treasury shares) 21.2 2.5
Weighted average number of
ordinary shares in issue during
the period 19.7 2.4
- opening shares (net of treasury
shares) 2.5 2.0
- additional shares issued 17.2 0.4
- disposal of treasury shares - -
Basic and diluted weighted
average number of ordinary
shares 19.7 2.4
(13) Significant judgements and estimates
There are no significant accounting judgements and estimates
other than the valuation of assets held for sale and assessment
of recoverability of receivables. Asset held for sale were valued
by an independent valuator which was updated at 31 August
2018 and adjustments processed as required. Receivables were
assessed for recoverability based on expected future cashflows.
(14) Summarised report
The summarised audited consolidated financial statements have
been derived from and are consistent in all material respects
with the consolidated annual financial statements for the year
ended 31 August 2018 and an unmodified opinion has been expressed
thereon.
The directors take full responsibility for
the preparation of these audited summarised consolidated
31 August 2018 financial results and confirm that the financial
information has been correctly extracted from the underlying
audited consolidated annual financial statements.
The auditor's report does not necessarily report on all of the
information continued in this announcement/financial results.
Shareholders are advised that, in order to obtain a full
understanding of the nature of the auditor's engagement,
they should obtain a copy of that report together with
the consolidated and separate audited consolidated annual
financial statements as at 31 August 2018.
(15) The auditors
Deloitte & Touche has audited the consolidated annual financial
statements for the 12 months ended 31 August 2018 and have issued
an unmodified opinion thereon. The audit was conducted in accordance
with International Standards on Audit Engagements.
Any reference to future financial performance included in
this announcement has not been audited or reported on by eXtract's auditors.
NAME AND REGISTRATION NUMBER EXECUTIVE DIRECTORS
EXTRACT GROUP LIMITED JL Serfontein (CEO and CFO)1 CA(SA)
(1Preparer of financial results)
(Registration number 1998/011672/06)
JSE share code: EXG
ISIN: ZAE000246013 COMPANY SECRETARY
Fusion Corporate Secretarial Services Proprietary
REGISTERED OFFICE AND BUSINESS Limited
ADDRESS
61 Maple Street, Pomona, Kempton Park, TRANSFER SECRETARIES
1619 PO Box 1050, Bedfordview, 2008 Computershare Investor Services
Proprietary Limited
NON-EXECUTIVE DIRECTORS Rosebank Towers, 15 Biermann Avenue Rose-
bank, 2196
F Davidson*(Lead independent director), PO Box 61051, Marshalltown, 2107
A Hannington* (Chairman)
N Leonard*
(*Independent) SPONSOR
Java Capital
SENS Release date: 11 December 2018
Date: 11/12/2018 04:25:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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