Wrap Text
Unaudited Condensed Consolidated Results For The Six Months Ended 28 February 2019
PURPLE GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013637/06)
Share code: PPE
ISIN: ZAE000185526
("Purple Group" or "the Company" or "the Group")
UNAUDITED CONDENSED CONSOLIDATED RESULTS
FOR THE SIX MONTHS ENDED 28 FEBRUARY 2019
LETTER FROM THE BOARD
GROUP HIGHLIGHTS
- Loss per share improved by 63% from a loss per share of 1.89 cents in the prior year
to a loss of 0.69 cents per share for the six months ended 28 February 2019.
- Group revenue increased by 41.9%.
- Group expenses increased by 0.7%.
- Group net loss from operations decreased by 82.4%.
EASYEQUITIES HIGHLIGHTS
- EasyEquities revenue increased by 53.9%.
- Platform assets increased by 34.1% to R3.85 billion.
- Funded investment accounts increased by 58.5% to 92 731 accounts.
- RISE has been appointed as the fund administrator and investment manager of five
retirement funds with assets under management of circa R4.2 billion. The on-boarding
of these funds commenced on 1 March 2019. This would increase platform assets by
R4.2 billion.
GT247.COM HIGHLIGHTS
- GT247.com revenue increased by 43.5%;
- GT247.com costs decreased by 17.9%; and
- Net income from operations increased by 485% to R17.3 million.
MESSAGE FROM THE CEO
An admirable set of half year results has set the tempo for an exciting 2019 for the Purple
Group. To the ever-increasing loyal shareholders who support our dreams to democratise
all things investing, these results should come as no surprise.
The resilience of our strategies and the determination of our team to deliver, despite the
difficult economic climate, is commendable and the rising tide of everyday South Africans
taking up investing for the very first time continues to lift the group.
The challenges of scaling a business are a part of every disruptive digital success story
and they are very much a part of our story too. If you look at companies like Facebook
or Amazon, their journeys haven't been without challenges either. Why? Because like us,
they're constantly pushing to drive scale and exponential growth in their business. This
means adding new features, bringing on new partners and supporting a customer base
whose trajectory is anything but horizontal.
Every day is our biggest day, every month new records are broken and each quarter we
climb our very own Everest. There is never a moment to so sit back and relax? and we
are grateful for that. In fact, we love every moment of it. It's what gets us all out of bed
early - knowing that we are increasing participation in investing in the stock market and
making investing fun for everyone is an exciting endeavour.
We are scaling for a future where millions of customers are investing billions of Rands
every single day, and we are getting there faster than we could ever have dreamed. We
take your security of assets, data and the integrity of our systems very, very seriously
whilst balancing the need to deliver faster, easier, cheaper, better financial services.
We are very grateful to all our stakeholders for being a part of this incredible journey
and are extremely proud of the ever increasing role of partners that continue to join us
in our cause.
The next 6 months are full of more challenges and ever greater opportunities, we look
forward to sharing the outcomes with you.
EXECUTING ON OUR STRATEGY
EasyEquities
EasyEquities has continued to leverage its innovative investment platform and technology
stack through its established distribution channels in South Africa, primarily including:
- EasyEquities Direct: Customers are acquired directly by EasyEquities through various
marketing initiatives and more importantly through referrals from existing customers
(40% of clients are acquired through referrals);
- SatrixNow: EasyEquities has white-labelled its core platform to SatrixNow, who
utilises the platform to attract customers to invest in Satrix's ETFs and Unit Trusts;
- Bidvest Bank Grow Account: EasyEquities has provided customers of the recently
launched Bidvest Bank Grow Account the opportunity to invest seamlessly through
the Bidvest Bank Grow Account App, into the various investment products offered on
the EasyEquities platform; and
- RISE: EasyEquities has been appointed by RISE to provide execution services in
respect of investment mandates secured by RISE and offer members, of Retirement
Funds administered by RISE, various savings accounts.
EasyEquities will continue to investigate and assess new partnership opportunities
with institutions that provide significant distribution opportunities for the EasyEquities
product offering.
In addition, EasyEquities is continuously investigating and developing additional products
and services for its existing clients to consume.
As far as international expansion is concerned, EasyEquities plans to launch, on the
ground, in Australia during June 2019.
RISE
Retirement Investments and Savings for Everyone Proprietary Limited ("RISE"), a 50/50
joint venture between EasyEquities and NBC Fund Administration Services ("NBC"):
- Is an integrated retirement fund administration and investment fund management
business.
- Through its administration and investment management system, coupled with a first-
of-its-kind members savings portal ("RISE System") (which has been developed and
licensed to RISE by EasyEquities), RISE is equipped to reduce the cost of retirement
fund administration and provide unparalled efficiency and transparency to all
stakeholders.
- Retirement fund members are provided with real-time, online access to view their
retirement savings and the ability to complement their retirement savings through
various investment accounts. This includes a Rand-based Investment Account,
a US Dollar Investment Account and a Tax-Free-Savings Account with no minimum
investment amounts or prescribed investment periods.
RISE is targeting the Retirement Fund industry through a dedicated sales force and
through leveraging off the networks that have been established in the retirement fund
space by NBC over the past 20 years.
GT247.com
GT247.com is the trading destination for active derivative traders. GT247.com is an
important complementary service for traders who require market leverage at competitive
rates. The platform provides traders with access to trade equity CFDs (listed on the JSE)
and derivatives in respect of over 60 currency pairs, all major international indices,
commodities and cryptocurrencies using Rands.
GT247.com offers the lowest commission rates in the market for retail investors,
being 10 basis points. This coupled with the Meta Trader 5 trading platform provides
a compelling offering for our clients.
Emperor Asset Management
The strategy for Emperor Asset Management is to broaden its client base through
offering managed portfolios on the EasyEquities platform and securing institutional asset
management and consulting mandates.
CONDENSED GROUP STATEMENT OF PROFIT OR LOSS
for the six months ended 28 February 2019
Unaudited Unaudited Audited
six months six months 12 months
Change 28 February 28 February 31 August
2018 to 2019 2019 2018 2018
% R'000 R'000 R'000
Continuing operations
Revenue 42 48 625 34 264 70 216
Commissions and research (31) (1 660) (2 414) (3 982)
Operating expenses 2 (49 951) (48 828) (94 045)
Net loss from operations (82) (2 986) (16 978) (27 811)
Other income 25 3 444 4 069
Deficit before interest,
depreciation and
amortisation (78) (2 961) (13 534) (23 742)
Interest income (56) 593 1 339 2 687
Finance costs 7 (4 026) (3 779) (7 003)
Depreciation and amortisation 40 (4 677) (3 342) (8 500)
Loss before fair value,
impairment adjustments
and tax (43) (11 071) (19 316) (36 558)
Fair value, impairments and
guarantee adjustments (95) (396) (8 113) (6 540)
Share of net loss of equity-
accounted investee (336) (195) (483)
Loss before tax (57) (11 803) (27 624) (43 581)
Income tax benefit (72) 2 152 7 784 10 443
Loss for the period (51) (9 651) (19 840) (33 138)
Loss attributable to:
Owners of the company (63) (6 162) (16 828) (26 667)
Non-controlling interest 16 (3 489) (3 012) (6 471)
(9 651) (19 840) (33 138)
Weighted number of shares in
issue at end of period ('000) 898 089 890 953 905 972
Loss per share
Basic loss per share (cents) (63) (0.69) (1.89) (2.94)
Headline loss per share
Loss for the period (63) (6 170) (16 828) (26 667)
Headline loss for the period (63) (6 170) (16 828) (27 148)
Headline loss per share (cents) (63) (0.69) (1.89) (3.00)
The Group recorded a loss for the six months ended 28 February 2019 of R6.2 million
compared with a loss of R16.8 million in comparative period in the prior year. The basic
and headline loss of 0.69 cents per share compares with a basic and headline loss of
1.89 cents per share in the prior comparative period.
OPERATING SEGMENT REVIEW
EasyEquities condensed statement of profit or loss
HY2019 HY2018
R'000 R'000 % move
Revenue 11 928 7 789 53.9
Commissions and research expenses (355) (557) (36.3)
Operating expenses* (24 314) (21 442) 13.4
Net loss from operations (12 741) (14 210) (10.8)
Other income 25 - -
Profit before interest, depreciation and
amortisation (12 716) (14 210) (15.1)
Interest income 593 1 339 (55.7)
Finance costs - (195) (100.0)
Depreciation and amortisation (4 183) (2 776) 50.7
Loss before fair value, impairments and
guaranteed adjustments (16 306) (15 842) (1.2)
Share of net profit of joint ventures
accounted for using the equity method (336) (195) 72.3
Loss before tax (16 642) (16 037) (0.3)
Current and deferred tax 4 230 2 123 99.2
Loss after tax (12 412) (13 914) (15.5)
- EasyEquities revenue was up 53.9%.
- Total expenses increased by 12.1% primarily due to higher employment related costs
and marketing expenses. The increase in employment costs relates to additional
resources employed during the second half of FY2018 to support new products
launched and the increased volumes experienced by the business, as employment
costs during the last six months remained flat. The higher marketing expense resulted
from a radio campaign conducted during September/October 2018.
- Management is focused on containing the cost base currently and working on
initiatives to decrease costs where possible.
GT247.com condensed statement of profit or loss
HY2019 HY2018
R'000 R'000 % move
Revenue 34 820 24 273 43.5
Trading revenue 33 127 23 425 41.4
Asset management execution revenue 1 673 743 125.2
Other revenue 20 105 (81.0)
Commissions and research expenses (1 052) (1 543) (31.8)
Operating expenses* (16 447) (19 771) (16.8)
Net income from operations 17 321 2 959 485.3
Profit before interest, depreciation and
amortisation 17 321 2 959 485.3
Finance costs - (114) (100.0)
Depreciation and amortisation (464) (533) (12.9)
Profit before tax 16 857 2 312 629.1
Current and deferred tax (4 334) (314) 1 280.3
Profit after tax 12 523 1 998 526.7
- Trading revenue is up 41.4% compared to the prior comparative period, driven by
increased market volatility, specifically for the first four months of the financial year.
- Total expenses are 17.9% lower due to various cost saving initiatives implemented
over the past 24 months. Compared to the six months ended 28 February 2016, total
costs in respect of this business have decreased by 31%.
Emperor Asset Management condensed statement of profit or loss
HY2019 HY2018
R'000 R'000 % move
Revenue 1 822 2 144 (15.0)
Trading expenses (224) (314) (28.7)
Operating expenses* (2 052) (2 952) (30.5)
Net loss from operations (454) (1 122) (59.5)
Other income - - -
Loss before depreciation and amortisation (454) (1 122) (59.5)
Depreciation and amortisation (16) (10) 60.0
Loss before fair value, impairments and
guaranteed adjustments (470) (1 132) (58.5)
Fair value adjustments (396) - -
Loss before tax (866) (1 132) (23.5)
Current and deferred tax 497 152 227.0
Loss after tax (369) (980) (62.3)
- With lower revenue levels than previous periods, due to a decrease in client funds
invested in its leveraged strategies, Emperor is focused on building its distribution
through the EasyEquities platform and targeting institutional asset management
mandates with its range of new portfolios, which cater to the full risk/reward
spectrum.
- Emperor has increased its assets under management on the EasyEquities platform by
150% (to R35 million) compared to the prior comparative period.
Purple Group head office and investments condensed statement of profit or loss
HY2019 HY2018
R'000 R'000 % move
Revenue 55 58 (5.2)
Commissions and research expenses (29) - -
Operating expenses (7 137) (4 663) 53.1
Net loss from operations (7 111) (4 605) 54.4
Other income - 3 444 (100.0)
Loss before interest, depreciation and
amortisation (7 111) (1 161) 512.5
Finance costs (4 026) (3 470) 16.0
Depreciation and amortisation (14) (23) (39.1)
Loss before fair value, impairments and
guaranteed adjustments (11 151) (4 654) 139.6
Fair value, impairments and guarantee
adjustments - (8 113) (100.0)
Loss before tax (11 151) (12 767) (12.7)
Current and deferred tax 1 759 5 823 (69.8)
Loss after tax (9 392) (6 944) 35.3
- Operating expenses have increased by 53.1% (R2.5 million), which includes capital-raising
fees and corporate advisory fees totalling R2.9 million, which are of a non-recurring nature.
- Other income in the prior period includes a profit of R3.4 million realised by Purple Group
in respect of its investment in Misty Sea Trading.
- The fair value, impairments and guarantee adjustment in the prior period related to
Purple Group increasing the estimated value of its liability to the Industrial Development
Corporation of South Africa ("IDC") by R8.1 million, after final agreement in this regard had
been agreed with the IDC.
Segmental balance sheets
Purple
GT247.com Group and 2019
and EAM EasyEquities Investments Total
R'000 R'000 R'000 R'000
As at 28 February 2019
Segment asset
Non-current assets 9 554 53 225 271 607 334 386
Current assets 57 397 55 770 1 816 114 983
Total assets 66 951 108 995 273 423 449 369
Segment liabilities
Non-current liabilities - - 37 922 37 922
Current liabilities 49 617 53 509 21 220 124 346
Total liabilities 49 617 53 509 59 142 162 268
SUBSEQUENT EVENTS
The directors are not aware of any other matter or circumstances arising since
28 February 2019 up to the date of this announcement, not otherwise dealt with in this
announcement.
Basis of preparation of the unaudited results
The unaudited condensed Group interim financial statements are prepared in accordance
with the recognition and measurement requirements of International Financial Reporting
Standards ("IFRS"), the presentation and disclosure requirements of IAS 34 - Interim
Financial Reporting, the 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 of the JSE Limited and the
requirements of the South African Companies Act, 71 of 2008.
This announcement does not include the information required pursuant to
paragraph 16A(j) of IAS 34, however, the areas that include significant judgements made
by management in applying the Group's accounting policies and key sources of estimation
uncertainty were the same as those that were identified in the audited consolidated
annual financial statements as at and for the year ended 31 August 2018, and which are
available on the Company's website, at its registered office and upon request.
Accounting policies which comply with IFRS have been applied consistently by all entities
in the Group and are consistent with those applied in the previous financial year except
for the adoption of IFRS 9 and IFRS 15. The preparation of these unaudited condensed
Group interim financial statements for the six months ended 28 February 2019 was
supervised by the Financial Director, Gary van Dyk CA (SA) and have not been reviewed or
reported on by the company's external auditors.
Any forward-looking statements contained in this announcement have not been reviewed
or reported on by the Company's external auditors.
The directors take full responsibility for the preparation of the unaudited consolidated
results for the six months ended 28 February 2019.
On behalf of the board
Happy Ntshingila (Independent Non-executive Chairman)
Charles Savage (Chief Executive Officer)
Gary van Dyk (Chief Financial and Operations Officer)
Johannesburg
17 April 2019
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
For the six months ended 28 February 2019
Unaudited Unaudited Audited
six months six months 12 months
28 February 28 February 31 August
2019 2018 2018
R'000 R'000 R'000
ASSETS
Equipment 3 753 2 620 3 944
Intangible assets and goodwill 253 947 240 607 248 838
Other investments 13 781 12 208 13 781
Investment in Joint Venture 1 154 - 631
Other financial assets 2 867 1 013 2 824
Deferred tax assets 58 884 53 629 56 289
Total non-current assets 334 386 310 077 326 307
Trade and other receivables 12 451 13 897 23 645
Tax receivable 2 540 2 831 2 983
Other investments 3 546 3 439 3 942
Other financial assets 742 1 919 742
Cash and cash equivalents 95 704 205 249 107 333
Total current assets 114 983 227 335 138 645
Total assets 449 369 537 412 464 952
EQUITY AND LIABILITIES
Share capital and premium 464 023 464 022 464 023
Accumulated loss (238 879) (222 931) (232 717)
Equity component of compound instrument 3 496 - 3 496
Other reserves 35 877 30 935 33 614
Equity attributable to owners 264 517 272 026 268 416
Non-controlling interest 22 584 29 532 26 073
Total equity 287 101 301 558 294 489
Financial guarantee - 20 500 -
Borrowings 37 922 - 40 284
Total non-current liabilities 37 922 20 500 40 284
Bank overdraft 12 796 14 499 4 080
Financial guarantee - 16 499 -
Trade and other payables 35 571 40 419 22 061
Client position liability 68 004 138 937 79 716
Borrowings 7 975 5 000 24 322
Total current liabilities 124 346 215 354 130 179
Total equity and liabilities 449 369 537 412 464 952
Net asset value per ordinary share (cents) 31.97 33.58 32.51
CONDENSED GROUP STATEMENT OF CASH FLOWS
For the six months ended 28 February 2019
Unaudited Unaudited Audited
six months six months 12 months
28 February 28 February 31 August
2019 2018 2018
R'000 R'000 R'000
Cash flow generated/(utilised) by operating
activities 12 096 (195) (77 310)
Cash flow generated/(utilised) in investing
activities (10 453) 68 656 (19 846)
Cash flow generated/(utilised) in financing
activities (21 954) (4 889) 73 642
Net decrease in cash and cash
equivalents (20 311) 63 572 (23 514)
Effect of foreign exchange on cash (34) - (411)
Cash and cash equivalents at the beginning
of the period 103 253 127 178 127 178
Cash and cash equivalents at the end
of the period 82 908 190 750 103 253
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
for the six months ended 28 February 2019
Unaudited Unaudited Audited
six months six months 12 months
28 February 28 February 31 August
2019 2018 2018
R'000 R'000 R'000
Balance at beginning of the period 268 416 238 312 238 312
Shares issued - - -
Profit/(loss) for the period (6 162) (16 828) 40 789
Share-based payments 2 297 2 999 5 528
Foreign currency translation reserve (34) (562) (411)
Own shares purchased - (19 299) (19 298)
Reserve generated from minority share
of subsidiary - 67 404 -
Equity component of compound instrument - - 3 496
Attributable to owners of the parent 264 517 272 026 268 416
Balance at beginning of the period (26 073) - -
Loss for the period (3 489) (3 012) (6 471)
Reserve generated from sale of minority
share of subsidiary - 32 544 32 544
Non-controlling interest 22 584 29 532 26 073
Total equity 287 101 301 558 294 489
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 28 February 2019
Unaudited Unaudited Audited
six months six months 12 months
28 February 28 February 31 August
2019 2018 2018
R'000 R'000 R'000
Loss for the period (9 651) (19 840) (33 138)
Other comprehensive income
Items that may be reclassified subsequently
to profit/loss
Foreign currency translation reserve (34) (562) (411)
Available-for-sale assets sold - - -
Tax effect - - -
Total other comprehensive loss (34) (562) (411)
Total comprehensive loss (9 685) (20 402) (33 549)
Total comprehensive loss attributable to:
Owners of the company (6 196) (17 390) (27 078)
Non-controlling interest (3 489) (3 012) (6 471)
(9 685) (20 402) (33 549)
Registered office
16th Floor, 25 Owl Street, Braamfontein Werf, 2092
Independent auditors
BDO South Africa Incorporated
Chartered Accountants (SA)
Registered Auditors
22 Wellington Road, Parktown, 2193, Private Bag X60500, Houghton, 2041
Group secretary and transfer secretaries
4 Africa Exchange Registry Proprietary Limited
Ballywoods Office Park
33 Ballyclare Dr
Bryanston
Sponsor
Deloitte & Touche Sponsor Services Proprietary Limited
Building 8, Deloitte Place, The Woodlands, 20 Woodlands Drive, Woodmead, 2196
Private Bag X6, Gallo Manor, 2052
Directors
Mark Barnes Non-executive Director
Charles Savage Chief Executive Officer
Gary van Dyk Chief Financial and Operations Officer
Craig Carter Independent Non-executive Director
Happy Ntshingila (Chairman) Independent Non-executive Director (appointed: 7/2/2019)
Bonang Mohale Non-executive Director (appointed: 7/2/2019)
Arnold Forman Independent Non-executive Director (appointed 7/2/2019)
Ronnie Lubner Non-executive Director (deceased: 27/12/2018)
Denise Alter Independent Non-executive Director (resigned: 7/2/2019)
These unaudited results are available on the Company's website:
http://www.purplegroup.co.za
Date: 17/04/2019 03:16:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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