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enX GROUP LIMITED - Condensed Unaudited Interim Financial Results for the six months ended 28 February 2019

Release Date: 17/04/2019 07:37
Code(s): ENX     PDF:  
 
Wrap Text
Condensed Unaudited Interim Financial Results for the six months ended 28 February 2019

enX GROUP LIMITED 
(Incorporated in the Republic of South Africa) 
(Registration number 2001/029771/06) 
JSE share code: ENX    ISIN: ZAE000222253
("enX" or "the Group")

 
CONDENSED UNAUDITED INTERIM
FINANCIAL RESULTS
for the six months ended 28 February 2019 

NATURE OF BUSINESS
enX is a diversified industrial group that provides quality branded industrial, petrochemical, and fleet
management and logistics products and services. 
enX is organised into the three business segments as follows:

-    enX Equipment ("Equipment"):
     -    Industrial Equipment ("EIE") provides distribution, rental and value added services for industrial
          and materials handling equipment in South Africa, other African countries and the United
          Kingdom and Ireland ("UK");
     -    Power comprise New Way Power which manufactures, installs and maintains diesel generators
          as well as provides temporary power through Genmatics; and
     -    Wood trades through Austro, which distribute professional woodworking equipment, tooling,
          edging, adhesives and the provision of associated services.

-    enX Fleet ("Fleet"):
     -    The Eqstra Fleet Management and Logistics business ("EFML" or "Eqstra") provides a full
          spectrum of passenger vehicle services including leasing, fleet management, outsourcing
          solutions, maintenance, warranty management and vehicle tracking solutions. It also provides
          fleet management solutions.

-    enX Petrochemicals ("Petrochemicals"):
     -    Centlube and African Group Lubricants ("AGL") produce and market oil lubricants and greases
          in South Africa and sub-Saharan Africa. They are the sole distributors of ExxonMobil lubricants
          (excluding marine and aviation) and Houghton International's Advanced Fluids Solutions
          and Services.
     -    West African International ("WAI") distribute plastics, polymers, rubber and
          speciality chemicals into Southern African. They are the sole agents and distributors of
          ExxonMobil chemicals in South Africa.

Overview
enX operates quality industrial assets with strong market positions and represents leading global
brands with committed customer partnerships. We endeavour to drive returns through the disciplined
allocation of capital. 

EIE outperformed expectations, both from a market growth and market share perspective. The EFML
lease book is now increasing, both in units and in value, reflecting the significant progress made in
customer retention rates and winning new business, facilitated by the availability of growth capital.

Petrochemicals continues to develop its relationship with ExxonMobil, reflected in its approvals for
local blending, its investment in Zestcor, an ExxonMobil base oil distributor and the potential for further
growth opportunities with ExxonMobil in Southern Africa.

In terms of transformation, the operating entities have been verified at levels 3, 4 and 5 contributors in
terms of the amended B-BBEE codes of good practice. The board remains committed to transformation
and endeavours to improve the rating. In this regards the operating companies are in the process of
reviewing structures to improve B-BBEE levels.

FINANCIAL RESULTS

Overview
Revenue for the period increased to R3.7 billion (2018: R3.6 billion). Revenue for Petrochemicals
increased to R865.8 million (2018: R778.4 million) following good growth in both the Lubricant and
Chemical businesses. The Group's EBIT improved to R380.2 million (2018: R354.1 million) while PBT
increased to R183.9 million (2018: R182.7 million). Consistent with prior disclosures, management has
elected to disclose adjusted EBIT which provides a more meaningful reflection of sustainable earnings.
Adjusted EBIT increased to R404.6 million (2018: R377.9 million).

The effective tax rate for the period of 29.9% exceeded the South African statutory rate of 28%, primarily
due to higher effective taxation rates in Zambia and Democratic Republic of Congo, offset by a lower
tax rate in the UK. This compares to an effective tax rate of 22.9% in 2018, which was reduced by the
inclusion of non-taxable gains in the prior year.

Earnings
Operating profit increased 6.8% to R378.3 million. As a result of net finance costs having increased to
R196.8 million (2018: 171.4 million), primarily due to deemed interest income in the prior year relating
to the eXtract loan not re-occurring in the current year, and the higher effective tax rate explained
above, headline earnings decreased by 7.7% to R127.4 million (2018: R138.0 million). This translates
into headline earnings per share ("HEPS") of 71.2 cents (2018: 77.4 cents). Adjusted headline earnings
decreased by 6.3% to R146.1 million (2018: R156.0 million) and translated into adjusted HEPS of
81.6 cents (2018: 87.5 cents). The weighted average number of shares (net of treasury shares) in issue
during the current reporting period was 178 939 229 as compared to the previous reporting period's
weighting of 178 332 559.

Capex
Capital expenditure increased by R1 065.0 million (2018: R823.2 million), primarily to maintain and grow
the leasing fleets. When this increase is offset by proceeds from the disposal of assets of Rnil (2018:
R9.2 million) and proceeds from the disposal of leasing assets through inventory of R228.9 million (2018:
R254.8 million), this results in net capital expenditure of R836.1 million (2018: R559.2 million).

Funding
The Group's net interest-bearing debt (including deferred vendor consideration and net of cash)
increased to R4 663.4 million (August 2018: R4 331.0 million). The increase is primarily as a result of the
increased leasing assets and inventories. R325 million of new notes were issued and R178 million of
notes redeemed and repurchased. Bank liquidity facilities of R281 million were utilised in April 2019 to
settle maturing bonds.

Cash flow
Cash generated by operations amounted to R719.8 million. However, bank and cash balances reduced
to R261.8 million due to further investment in working capital and leasing assets to further increase the
lease book. This was offset by proceeds from vehicle sales at the end of term.

OPERATIONAL OVERVIEW 

Equipment
Revenues increased to R1 898.7 million (2018: R1 835.0 million). Adjusted EBIT of R200.7 million (2018:
R183.0 million) and adjusted PBT of R107.9 million (2018: R96.6 million) were achieved. The Wood and
Power businesses reported a combined PBT loss of R3.3 million (2018: R5.3 million loss) off Turnover
of R244.2 (2018: R273.7 million). Leasing assets grew by R86.8 million since August 2018, primarily as a
result of the UK acquisitions. Inventory increases are largely supported by committed customer orders.

Fleet
Revenues of R1 000.8 million (2018: R1 032.3 million), adjusted EBIT of R188.1 million (2018:
R194.9 million) and adjusted PBT of R93.1 million (2018: R103.5 million) were achieved. The six-month
performance was affected by an after tax loss of R5.1 million in Eqstra Zambia, which is being closed
down. The fleet leasing book showed positive growth of R147.2 million since August 2018, which should
manifest in increased turnover going forward. Though this is positive for the long-term sustainability
of the business, a growing lease book has an initial negative impact on profitability as the increase in
depreciation and interest costs exceeds the growth in EBITDA in the earlier part of the lease term. Lower
aftermarket sales at the end of lease term affected revenues in the current year.

Our Quest system continues to show differentiating benefits and will allow scalability to the segment
without a proportionate increase in overhead structure.

Petrochemicals 
Revenues of R865.8 million (2018: R778.4 million), adjusted EBIT of R38.2 million (2018: R36.2 million)
and adjusted PBT of R24.2 million (2018: R26.4 million) were achieved. Increased inventory resulted in
higher interest charges, affecting profitability.

PROSPECTS

Equipment
-    EIE will continue to seek growth in its South African share of the forklift market in line with Toyota's
     aspirations and improve its operational efficiencies through the use of technology. 

-    In addition to the companies acquired in the prior year, EIE will further look to expand its UK market
     share through the acquisition of complementary forklift businesses and strengthen its long-term
     partnership with Mitsubishi, the supplier of Cat Lift Trucks. EIE has also positioned itself with
     products that have lower price points, namely Hangcha and Heli, which allow it to cover more
     segments of the market. This expansion strategy could also include European countries in the
     long term.

-    The Group continues to review its long-term strategic options for the Power business.

-    Wood aims to maintain its leading market share in a declining market. The business has
     implemented various cost cutting initiatives to counter the impact of reduced sales.  Reduced
     construction projects negatively impacted both the Wood and the Power businesses and cost
     reductions have been a key focus.

Fleet
-    EFML is focused on growing revenues derived from VAPs, which are non-capital intensive.
     The business has seen an increase in customer retention rates and winning new business and
     this focus continues. The Quest system continues to present opportunities to offer outsourced
     processing and fleet management services and drive operational efficiencies.

Petrochemicals
-    The Lubricants business will focus on rolling out the blending contract with ExxonMobil and growing
     its distribution and contract manufacturing volumes. It will also seek new product distribution
     opportunities through its relationship with ExxonMobil.

-    The Chemicals business will focus on growing volumes in selected polymer, natural rubber,
     performance polyethylene and speciality chemicals. The business will also seek new
     distributorships to increases volumes through its existing infrastructure.

Outlook
Equipment: We expect EIE to improve on their first half reported performances following further
acquisitions in the UK. The UK operation has increased inventory due to the uncertainty surrounding
BREXIT. The business however anticipates minimal impact no matter which scenario unfolds and is
well prepared. While Power has seen an increase in orders due to recent load shedding, primarily in
the residential market, both Power and Wood remain highly geared to the construction industry and the
overall economy, which the Board does not anticipate improving in the short to medium term.

Fleet: We expect EFML to continue growing its leasing book in line with current performance.
Encouraging progress has been made in the first half with regard to improving customer retention rates
and winning new business.

Petrochemicals will continue to build on its relationship with ExxonMobil and implement the local
blending approvals recently granted by ExxonMobil, thereby reducing input costs. 

The Group will continue to pursue the various corporate actions as set out in cautionary announcements
published on SENS over the past few months.

Key risks to our business are posed by declines in overall levels of economic sentiment, growth rates,
currency volatility and higher interest rates. Whilst recognising this, enX believes its business model and
current portfolio of businesses have defensive characteristics given the annuity generating nature of its
assets, strong market positions, brand partnerships and long-term client commitments.

SUBSEQUENT EVENTS 
The Group raised R130 million bonds and draw on bank liquidity facilities to redeem R281 million of
notes due in April 2019.

The Group, through its UK operations, has purchased Grant Handling Plc, a UK based Heli distributor
for GBP6.5 million. The business model is similar to that of the current operations in the UK with the added
benefit of expanding its footprint and diversifying its product offering.

DIVIDENDS 
In line with the Group policy to reinvest for growth, no cash dividend has been declared for the period.

DIRECTORS
Executive directors:       SB Joffe (Chief Executive Officer), JS Friedman (Financial Director)
Non-executive directors:   PM Makwana* (Chairman), PC Baloyi, SF Booysen*, A Joffe, NV Lila*,
                           LN Molefe*, PS O'Flaherty and AJ Phillips* 
                           (* Independent)

No directors changed during the period.

For and on behalf of the board 

SB Joffe                          JS Friedman
Chief Executive Officer           Financial Director

17 April 2019

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                           Unaudited              Unaudited                Audited
                                                               as at                  as at                  as at
                                                    28 February 2019       28 February 2018         31 August 2018
                                                               R'000                  R'000                  R'000
ASSETS                                                                                                             
Non-current assets                                         7 013 951              6 439 158              6 781 132
Property, plant and equipment                                395 247                387 849                397 055
Leasing assets                                             5 611 832              5 045 852              5 377 858
Goodwill                                                     478 461                530 352                478 746
Intangible assets                                            385 937                415 485                400 245
Trade and other receivables                                   16 899                  5 339                  7 540
Investment in associate                                       56 077                      -                 54 240
Other investments and loans                                   20 279                 19 556                 18 214
Deferred taxation                                             49 219                 34 725                 47 234
Current assets                                             2 900 741              3 138 090              2 928 340
Inventories                                                1 559 177              1 339 986              1 352 939
Trade, other receivables and derivatives                   1 039 047              1 162 666              1 117 551
Other investments and loans                                      741                 73 739                      -
Taxation receivable                                           17 883                 11 576                  6 545
Bank and cash balances                                       283 893                550 123                451 305
                                                                                                                  
Total assets                                               9 914 692              9 577 248              9 709 472
EQUITY AND LIABILITIES                                                                                            
Total shareholders' interests                              2 914 460              2 646 822              2 793 220
Stated capital                                             3 104 893              3 103 366              3 103 455
Other reserves                                             (689 045)              (950 561)              (681 952)
Accumulated profits                                          463 072                460 525                335 715
Equity attributable to equity holders of
the parent                                                 2 878 920              2 613 330              2 757 218
Non-controlling interests                                     35 540                 33 492                 36 002
Non-current liabilities                                    4 972 485              4 573 459              4 420 505
Interest-bearing liabilities                               4 403 944              4 054 000              3 870 081
Deferred vendor consideration                                 12 601                      -                 11 989
Non-current financial liabilities                             12 955                      -                 13 513
Deferred taxation                                            542 985                519 459                524 922
Current liabilities                                        2 027 747              2 356 967              2 495 747
Interest-bearing liabilities                                 496 515                795 517                832 161
Deferred vendor consideration                                 12 179                 25 922                 23 342
Trade, other payables and provisions                       1 445 820              1 477 934              1 548 604
Taxation payable                                              51 148                 37 380                 46 931
Bank overdrafts                                               22 085                 20 214                 44 709
                                                                                                                   
Total equity and liabilities                               9 914 692              9 577 248              9 709 472
                                                                                                                   
Supplementary information:                                                                                         
Number of shares in issue                                181 317 725            181 317 732            181 317 725
Number of shares in issue (net of
treasury shares)                                         178 939 229            179 036 173            179 288 484
Net asset value per share (cents)                            1 608.9                1 459.7                1 537.9
Net tangible asset value per share (cents)                   1 186.2                  993.7                1 110.1


CONDENSED CONSOLIDATED STATEMENT OF PROFIT 
AND LOSS AND OTHER COMPREHENSIVE INCOME
                                                           Unaudited              Unaudited                Audited
                                                         for the six            for the six           for the year
                                                        months ended           months ended                  ended
                                                    28 February 2019       28 February 2018         31 August 2018
                                                               R'000                  R'000                  R'000
Revenue                                                    3 749 868              3 624 391              7 429 294
Net operating expenses                                   (2 765 260)            (2 662 802)            (5 479 869)
Profit from operations before
depreciation and amortisation                                984 608                961 589              1 949 425
Depreciation and amortisation                              (593 362)              (577 152)            (1 141 121)
(Loss)/profit on disposal of property, plant
and equipment                                                   (73)                    524                (1 036)
Share-based payment expense                                  (3 724)                (4 086)               (26 110)
Foreign exchange losses                                      (9 128)               (26 770)               (39 933)
Operating profit                                             378 321                354 105                741 225
Impairment of goodwill                                             -                      -               (56 184)
Profit before interest and taxation                          378 321                354 105                685 041
Net finance costs                                          (196 275)              (171 385)              (377 176)
Interest received                                              4 574                 33 871                 24 423
Interest paid                                              (200 849)              (205 256)              (401 599)
Share of profit from associate                                 1 837                      -                  1 246
Net profit before taxation                                   183 883                182 720                309 111
Taxation                                                    (54 553)               (41 910)               (78 448)
Net profit after taxation                                    129 330                140 810                230 663
Attributable to:                                                                                                 
Equity holders of the parent                                 127 357                138 380                225 722
Non-controlling interests                                      1 973                  2 430                  4 941
Net profit after taxation                                    129 330                140 810                230 663
Other comprehensive income net
of taxation:                                                                                                     
Net profit after taxation                                    129 330                140 810                230 663
Items that may be reclassified
subsequently to profit or loss:                                                                                  
 - Foreign currency translation reserve                      (8 844)               (14 368)                 41 578
Total comprehensive income                                   120 486                126 442                272 241
Attributable to:                                                                                                 
Equity holders of the parent                                 118 513                124 012                267 300
Non-controlling interests                                      1 973                  2 430                  4 941
Total comprehensive income                                   120 486                126 442                272 241
                                                                                                                 
Supplementary information:                                                                                       
Basic earnings per share (cents)                                71.2                   77.6                  126.2
Headline earnings per share (cents)                             71.2                   77.4                  158.0
Adjusted headline earnings per share 
(cents) #                                                       81.6                   87.5                  188.5
Diluted earnings per share (cents)                              70.2                   76.6                  124.7
Diluted headline earnings per
share (cents)                                                   70.3                   76.4                  156.2
EBITDA                                                       978 332                931 257              1 835 568
Adjusted EBIT #                                              404 574                377 937                815 185
Adjusted headline earnings                                   146 081                155 989                337 073
Number of shares in issue                                181 317 725            181 317 732            181 317 725
Weighted average number of shares in  
issue (net of treasury shares)                           178 939 229            178 332 559            178 851 235
Diluted number of shares in issue                        181 317 725            180 614 117            180 968 812


HEADLINE EARNINGS RECONCILIATION
                                                           Unaudited              Unaudited                Audited
                                                         for the six            for the six           for the year
                                                        months ended           months ended                  ended
                                                    28 February 2019       28 February 2018         31 August 2018
                                                               R'000                  R'000                  R'000
Net profit after taxation attributable to
equity holders of the parent                                 127 357                138 380                225 722
Adjusted for:                                                                                                    
Loss/(profit) on disposal of property, plant
and equipment                                                     73                  (524)                  1 036
Impairment of goodwill                                             -                      -                 56 184
Taxation effect on adjustments                                  (20)                    147                  (290)
Headline earnings attributable to
ordinary shareholders                                        127 410                138 003                282 652
Adjusted for:                                                                                                     
IFRS 2 charges                                                 3 724                  4 086                 26 110
Restructuring and
IFRS 3 transaction costs                                       3 899                  2 953                  7 382
Retrenchment costs                                                 -                      -                  5 636
Amortisation of intangible assets                             16 793                 16 793                 33 586
Taxation effect on adjustments                               (5 745)                (5 846)               (18 293)
Adjusted headline earnings attributable
to ordinary shareholders #                                   146 081                155 989                337 073
                                                                                                                      
EBIT RECONCILIATION                                                                                                   
Earnings before interest, taxation,
depreciation and amortisation                                978 332                931 257              1 835 568
Depreciation and amortisation                              (598 174)              (577 152)            (1 149 281)
EBIT                                                         380 158                354 105                686 287
IFRS 2 charges                                                 3 724                  4 086                 26 110
Restructuring and
IFRS 3 transaction costs                                       3 899                  2 953                  7 382
Retrenchment costs                                                 -                      -                  5 636
Amortisation of intangible assets                             16 793                 16 793                 33 586
Impairment of goodwill                                             -                      -                 56 184
Adjusted EBIT #                                              404 574                377 937                815 185
Adjusted EBIT %                                                   11                     10                     11

#   Adjusted headline earnings per share and adjusted EBIT take into account all the profits and losses from
    operational, trading, and funding activities for the period and exclude adjustments in line with those of the
    comparative period.



CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                           Unaudited              Unaudited                Audited
                                                         for the six            for the six           for the year
                                                        months ended           months ended                  ended
                                                    28 February 2019       28 February 2018         31 August 2018
                                                               R'000                  R'000                  R'000
Stated capital                                             3 104 893              3 103 366              3 103 455
Balance at beginning of the period                         3 103 455              3 087 083              3 087 083
Increase through the issue of shares (net
of costs)                                                          -                 16 283                 18 493
Additional treasury shares acquired                                -                      -                (2 121)
Transfer from treasury shares to
issued shares                                                  1 438                      -                      -
Other reserves                                             (689 045)              (950 561)              (681 952)
Balance at beginning of the period                         (681 952)              (725 389)              (725 389)
Foreign currency translation reserve                         (8 844)               (14 368)                 41 578
Share-based payment expense                                    1 751                  1 372                  1 859
Transfer from accumulated
profits (eXtract)                                                  -              (212 176)                      -
Accumulated profits                                          463 072                460 525                335 715
Balance at beginning of the period                           335 715                322 145                322 145
Total comprehensive income for the period                    127 357                138 380                225 722
Dividend in specie                                                 -              (212 176)              (212 152)
Transfer to other reserves (eXtract)                               -                212 176                      -
Non-controlling interests                                     35 540                 33 492                 36 002
Balance at beginning of the period                            36 002                 31 411                 31 411
Total comprehensive income for the period                      1 973                  2 430                  4 941
Dividends paid to minority shareholders                      (2 435)                  (349)                  (350)

Balance at end of the period                               2 914 460              2 646 822              2 793 220


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                                           Unaudited              Unaudited                Audited
                                                         for the six            for the six           for the year
                                                        months ended           months ended                  ended
                                                    28 February 2019       28 February 2018         31 August 2018
                                                               R'000                  R'000                  R'000
Cash flows from operating activities                         719 808                888 013              2 007 418
    Cash generated from operations before    
    working capital movements                                969 028                935 987              1 893 662
    Working capital movements                                (4 484)                177 821                559 935
    Interest received                                          4 272                  6 684                 24 423
    Interest paid                                          (200 849)              (202 151)              (401 022)
    Taxation paid                                           (48 159)               (30 328)               (69 580)
Cash flows from investing activities                     (1 068 601)              (688 629)            (1 656 842)
    Capital expenditure                                  (1 065 000)              (823 217)            (1 781 109)
    Additions to goodwill                                          -                      -               (11 983)
    Proceeds on disposal of assets                                 -                  3 103                  9 177
    Business combinations                                          -               (43 515)               (67 179)
    (Advances)/proceeds from other
    investments and loans                                    (3 601)                175 000                194 252
Cash flows from financing activities                         207 872                 37 367              (248 827)
    Net increase/(decrease) in
    interest-bearing borrowings                              218 121                 47 198              (238 803)
    Deferred vendor consideration paid                      (10 249)                (9 482)                (9 674)
    Payments on transactions with
    non-controlling interests                                      -                  (349)                  (350)

Net (decrease)/increase in cash and cash equivalents       (140 921)                236 751                101 749
Exchange rate translation on cash and cash equivalents       (3 867)                (8 299)                  3 390
Cash and cash equivalents at beginning of the period         406 596                301 457                301 457
Cash and cash equivalents at end of the period               261 808                529 909                406 596

CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS
                                                                 Equipment                                           Fleet                                  Petrochemicals                         Group, financing and consolidation                                   Total
                                                  Unaudited        Unaudited       Audited        Unaudited        Unaudited       Audited        Unaudited        Unaudited       Audited       Unaudited        Unaudited            Audited           Unaudited        Unaudited        Audited
                                                for the six      for the six       for the      for the six      for the six       for the      for the six      for the six       for the     for the six      for the six            for the         for the six      for the six        for the
                                               months ended     months ended    year ended     months ended     months ended    year ended     months ended     months ended    year ended    months ended     months ended         year ended        months ended     months ended     year ended
                                                28 February      28 February     31 August      28 February      28 February     31 August      28 February      28 February     31 August     28 February      28 February          31 August         28 February      28 February      31 August
                                                       2019             2018          2018             2019             2018          2018             2019             2018          2018            2019             2018               2018                2019             2018           2018
                                                      R'000            R'000         R'000            R'000            R'000         R'000            R'000            R'000         R'000           R'000            R'000              R'000               R'000            R'000          R'000
Revenue                                           1 898 740        1 835 005     3 718 995        1 000 827        1 032 268     2 134 020          865 774          778 441     1 624 632        (15 473)         (21 323)           (48 353)           3 749 868        3 624 391      7 429 294
- South Africa                                    1 281 365        1 335 888     2 689 005          883 279          934 159     1 932 375          776 721          717 448     1 477 800          25 977           23 856             47 712           2 967 342        3 011 351      6 146 892
- Rest of world                                     615 962          494 808     1 017 326          105 301           87 545       179 717           87 242           54 543       133 075               -                -                  -             808 505          636 896      1 330 118
- Intercompany                                        1 413            4 309        12 664           12 247           10 564        21 928            1 811            6 450        13 757        (41 450)         (45 179)           (96 065)            (25 979)         (23 856)       (47 716)
EBITDA#                                             531 018          485 699       971 717          430 164          444 506       857 140           44 525           40 806        87 044        (27 375)         (39 754)           (80 333)             978 332          931 257      1 835 568
Depreciation and amortisation                     (331 888)        (304 070)     (622 491)        (243 064)        (251 045)     (482 338)          (6 195)          (4 839)      (10 169)        (17 027)         (17 198)           (34 283)           (598 174)        (577 152)    (1 149 281)
EBIT                                                199 130          181 629       349 226          187 100          193 461       374 802           38 330           35 967        76 875        (44 402)         (56 952)          (114 616)             380 158          354 105        686 287
- South Africa                                      149 861          138 979       270 820          164 955          171 930       335 215           25 949           25 607        53 840        (44 402)         (56 952)          (114 616)             296 363          279 564        545 259
- Rest of world                                      49 269           42 650        78 406           22 145           21 531        39 587           12 381           10 360        23 035               -                -                  -              83 795           74 541        141 028
Adjusted EBIT                                       200 674          182 959       400 660          188 075          194 881       380 210           38 216           36 233        80 434        (22 391)         (36 136)           (46 119)             404 574          377 937        815 185
Net finance costs                                  (92 795)         (86 354)     (177 933)         (95 014)         (91 340)     (183 127)         (13 984)          (9 828)      (24 414)           5 518           16 137              8 298           (196 275)        (171 385)      (377 176)
Adjusted PBT                                        107 879           96 605       222 727           93 061          103 541       197 083           24 232           26 405        56 020        (16 873)         (19 999)           (37 821)             208 299          206 552        438 009
Total assets                                      4 966 372        4 404 417     4 676 400        3 224 355        2 988 357     3 050 455          909 184          825 319       997 906         814 781        1 359 155            984 711           9 914 692        9 577 248      9 709 472
- Goodwill and intangibles                           29 558           27 496        30 077           28 939           22 571        26 543            3 759            3 671         3 295         802 142          892 099            819 076             864 398          945 837        878 991
- Leasing assets                                  2 850 171        2 550 585     2 763 398        2 761 661        2 495 267     2 614 460                -                -             -               -                -                  -           5 611 832        5 045 852      5 377 858
- Inventory                                       1 064 154          868 318       877 462           30 349           30 681        13 918          464 674          440 987       461 559               -                -                  -           1 559 177        1 339 986      1 352 939
- Trade and other receivables                       571 825          574 469       544 970          268 037          314 754       256 029          218 024          278 569       344 446         (1 199)              213           (20 354)           1 056 687        1 168 005      1 125 091
- Other assets                                      450 664          383 549       460 493          135 369          125 084       139 505          222 727          102 092       188 606          13 838          466 843            185 989             822 598        1 077 568        974 593
Total liabilities                                 3 789 255        3 385 100     3 567 297        2 589 016        2 469 371     2 457 554          620 853          591 539       778 819           1 108          484 416            112 582           7 000 232        6 930 426      6 916 252
- Interest-bearing liabilities and overdraft      2 739 193        2 370 268     2 553 820        1 965 472        1 886 450     1 874 605          272 431          224 153       284 609        (54 552)          388 860             33 917           4 922 544        4 869 731      4 746 951
- Deferred vendor consideration                           -            4 695         5 000                -                -             -           24 780           21 227        30 331               -                -                  -              24 780           25 922         35 331
- Trade and other payables and provisions           800 070          799 653       768 342          337 029          304 288       307 696          312 277          338 903       453 553         (3 556)           35 090             19 013           1 445 820        1 477 934      1 548 604
- Other liabilities                                 249 992          210 484       240 135          286 515          278 633       275 253           11 365            7 256        10 326          59 216           60 466             59 652             607 088          556 839        585 366
Capital expenditure net of proceeds                 584 188          400 922       851 287          477 946          400 349       893 843            2 854           18 836        26 768              12                7                 34           1 065 000          820 114      1 771 932
Number of employees                                   1 746            1 857         1 811              551              600           563              136              102           129              11               14                 15               2 444            2 573          2 518
GEOGRAPHICAL SEGMENTATION                                                                                                                                                                                                                                                                         
Total assets                                      4 966 372        4 404 417     4 676 400        3 224 355        2 988 357     3 050 455          909 184          825 319       997 906         814 781        1 359 155            984 711           9 914 692        9 577 248      9 709 472
- South Africa                                    3 376 733        3 166 154     3 155 168        2 825 333        2 639 497     2 674 156          843 875          794 606       952 563         814 781        1 359 155            984 711           7 860 722        7 959 412      7 766 598
- Rest of world                                   1 589 639        1 238 263     1 521 232          399 022          348 860       376 299           65 309           30 713        45 343               -                -                  -           2 053 970        1 617 836      1 942 874
Total liabilities                                 3 789 255        3 385 100     3 567 297        2 589 016        2 469 371     2 457 554          620 853          591 539       778 819           1 108          484 416            112 582           7 000 232        6 930 426      6 916 252
- South Africa                                    2 547 886        2 407 028     2 370 495        2 448 983        2 364 790     2 339 710          582 232          570 981       754 511           1 108          484 416            112 582           5 580 209        5 827 215      5 577 298
- Rest of world                                   1 241 369          978 072     1 196 802          140 033          104 581       117 844           38 621           20 558        24 308               -                -                  -           1 420 023        1 103 211      1 338 954
                                                                                                                                                                                                                                                                                                  
# Excludes intercompany management fees.


NOTES

1.  Basis of preparation
     The condensed unaudited interim financial results for the six months ended 28 February
     2019 have been prepared in accordance with International Financial Reporting Standards ("IFRS")
     and complies with IAS 34 - Interim Financial Reporting, the SAICA Financial Reporting Guides
     as issued by the Accounting Practices Board, the Financial Pronouncements as issued by the
     Financial Reporting Standards Council, the requirements of the Companies Act, No. 71 of 2008 of
     South Africa and the Listings Requirements of the JSE Limited. The accounting policies used in
     the preparation of the condensed unaudited interim financial results for the six months ended
     28 February 2019 are consistent with those applied in the audited financial statements for the year
     ended 31 August 2018. 

     During the current period, the Group adopted those standards and interpretations in issue and
     effective for the period. The adoption of these new and amended standards and interpretations has
     not had a significant impact on the Group's adopted accounting policies.

     These results have been compiled under the supervision of Jarrod Friedman CA(SA), the Financial
     Director. The condensed interim financial results have not been reviewed or reported on by the
     Group auditors.

                                                                                           Unaudited
                                                                                         for the six
                                                                                        months ended
                                                                                    28 February 2019
                                                                                               R'000
2.   Capital commitments                                                                              
     Total capital commitments contracted                                                          -

     Future expenditure will be financed from cash generated from operations and existing banking facilities.                                                                     
     On 13 February 2017 shareholders approved financial assistance in the form of a R15 million enX indemnity 
     with regards to Capleverage Propriety Limited.                    

     There were no contingent liabilities as at 28 February 2019.


                                                    Unaudited            Unaudited             Audited
                                                  for the six          for the six             for the         
                                                 months ended         months ended          year ended
                                             28 February 2019     28 February 2018      31 August 2018
                                                        R'000                R'000               R'000
3.   Interest-bearing borrowings and overdraft                                                                                   
     Medium Term Note Program                       1 252 740            1 210 000           1 106 166
     Bank debt and overdraft - South Africa         2 671 070            2 861 553           2 645 323
     Bank debt and overdraft - Rest of world          998 734              798 178             995 462
     Deferred vendor consideration                     24 780               25 922              35 331
                                                    4 947 324            4 895 653           4 782 282
     Comprising:                                                                                     
     Non-current                                    4 416 545            4 054 000           3 882 070
     Current                                          530 779              841 653             900 212
                                                    4 947 324            4 895 653           4 782 282
                                                          
                                                                                                      
4.   Net finance costs                                                                               
     Interest received                                  4 272                6 684              11 875
     Interest paid                                  (200 849)            (204 653)           (400 728)
     Deemed interest income                               302               26 584              11 677
                                                    (196 275)            (171 385)           (377 176)

5.   Fair value hierarchy disclosures

     Valuation methodology
     Level 1 - Valuations with reference to quoted prices in an active market:
     Financial instruments valued with reference to unadjusted quoted prices for identical assets or
     liabilities in active markets where the quoted price is readily available and the price represents
     actual and regularly occurring market transactions on an arm's length basis.

     Level 2 - Valuations based on observable and unobservable inputs include:
     Financial instruments valued using inputs other than quoted prices as described above for
     level 1 but which are observable for the asset or liability, either directly or indirectly, such as a
     quoted price for similar assets or liabilities in an active market; a quoted price for identical or
     similar assets or liabilities in inactive markets; a valuation model using observable inputs; and a
     valuation model using inputs derived from/corroborated by observable market data.

     Level 3 - Valuations based on unobservable inputs include:
     Financial instruments are valued using significant inputs which are not based on observable
     market data.

     The table below shows the Group's financial asset and liabilities that are recognised and
     subsequently measured at fair value, analysed by valuation technique.

                                                      Level 2              Level 3          Fair value
     28 February 2019                                   R'000                R'000               R'000
     Financial assets                                                                               
     Other investments and loans                            -               21 020              21 020
     Designated as fair value
     through profit and loss                                                                          
     - Derivative financial assets                          -                    -                   -
                                                            -               21 020              21 020
     Financial liabilities                                                                            
     Financial liabilities designated as fair
     value through profit and loss                                                                   
     - Derivative financial liabilities                 1 100                    -               1 100
                                                        1 100                    -               1 100

Registered office:
202D 11 Crescent Drive, Melrose Arch, Johannesburg, 2196

Postal address:
PostNet Suite X86, Private Bag X7, Aston Manor, 1630

Sponsor:
The Standard Bank of South Africa Limited

Company secretary:
L Moller

Transfer secretaries:
Computershare Investor Services Proprietary Limited

Release date:
17 April 2019



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