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Summary of the audited consolidated results of the Mettle Group for the year ended 28 February 2019
METTLE INVESTMENTS LIMITED
(Registration Number: 2008/002061/06)
Incorporated in the Republic of South Africa
JSE share code: MLE ISIN: ZAE000257622
("Mettle" or "the Company")
SUMMARY OF THE AUDITED CONSOLIDATED RESULTS OF THE METTLE GROUP
FOR THE YEAR ENDED 28 FEBRUARY 2019
HIGHLIGHTS
- Reward Investments (No.2) Limited ("Reward") and Mettle Solar Africa Limited ("Mettle Solar Africa")
acquired by Mettle from Tradehold Limited ("Tradehold") as part of a group restructure ("the
Restructure")
- Mettle unbundled from Tradehold and listed on the JSE on 23 May 2018 with stated capital of R545.8
million
- Net asset value per share increased by 55% from 128 cents to 198 cents
- Reward contributed R37.1m profit for a nine and a half month period
- South African results depressed by once-off Restructure costs and an impairment of an associate
investment
DETAILS OF THE RESTRUCTURE
As detailed in Mettle's pre-listing statement dated 14 May 2018 ("PLS"), Tradehold invested a further R445.2
million in Mettle in May 2018 as part of the Restructure.
These funds were utilised as follows:
- R42 million as settlement of related party borrowings due to Tradehold;
- R389.5 million investment in Reward; and
- R13.7 million purchase of a loan claim against Mettle Solar Africa from Tradehold Africa Limited (wholly
owned subsidiary of Tradehold).
The Company now owns 90% of Reward (based in Leeds and Manchester in the UK). Reward owns 75% of Reward Finance
Group Limited ("Reward Finance Group") which has two 100% owned operating companies, namely Reward Capital Limited
and Reward Invoice Finance Limited.
OVERVIEW OF BUSINESS AND FINANCIAL PERFORMANCE
The consolidated results of Mettle and its subsidiaries ("the Group") include the South African businesses for the
year and Reward for only nine and a half months.
Revenue increased to R227 million for the year ended 28 February 2019 (2018: R44.2 million), while profit
attributable to shareholders decreased to R15.4 million (2018: R15.8 million). Earnings per share decreased by
57% from 16.44 cents to 7.14 cents while headline earnings per share decreased by 9% to 14.69 cents (2018:
16.11 cents). The reconciliation between basic earnings and headline earnings is detailed in note 5.
Reward recorded strong growth and contributed R179.5 million (GBP9.9 million) to revenue and R37.1 million (GBP2.1
million) to profit attributable to shareholders. Had Reward been consolidated for the full year, the Group
revenue and profit attributable to shareholders would have been R268.8 million and R23.9 million, respectively.
Reward's loan and invoice discounting book increased to R1.2 billion (GBP63.1 million) by 28 February 2019 from
R1 billion (GBP55.5 million) at date of acquisition by Mettle while it still has an unutilised GBP12 million external
funding facility.
Reward has benefited from the continued uncertainty in the UK which has resulted in banks being hesitant to
lend to smaller businesses. This demise of the traditional bank overdraft product has continued to drive
demand for Reward's funding. Whatever the Brexit outcome, we do not expect the main banks to re-enter this
space as they continue to drive costs down by forcing customers to solely use digital banking. Reward's
business model is to use the traditional method of lending money by way of meeting the customer, getting to
know them and fully assessing the customer's needs and the quality of the security. This methodology
continues to be Reward's unique selling proposition. In addition, the alternative finance and fintech markets
continue to evolve both regionally and nationally.
The Group's performance for the year was negatively impacted by once-off Restructure costs of R4 million, new
recurring listing related costs of R2 million and an impairment of R12.8 million in the investment in associate,
Lendcor Proprietary Limited ("Lendcor").
Lendcor provides unsecured loans for home improvements to the lower LSM market through a network of
building supply merchants. During the financial year certain changes to the collection methodology relating to a
segment of its lending book were imposed. Lendcor adjusted its business rules to address these changes.
However, this has had a negative impact on the collectability of this portion of its lending book. As a result,
Lendcor incurred a R0.4 million loss for the year ended 28 February 2019 (2018: R12 million profit).
Mettle concluded the acquisition of 49% ordinary shares in, and a R7.5 million loan claim against, Christopher
Finance Proprietary Limited ("Christopher Finance") for a total consideration of R27.4 million in early November
2018. Christopher Finance provides working capital finance to selected firms of attorneys. The finance is
secured by claims for costs the attorneys have against reputable third parties. Christopher Finance contributed
R1.9 million of equity accounted income for the four-month period.
The remaining South African businesses have performed in line with budget.
The Rand has depreciated against the Pound since the acquisition of Reward by Mettle and ended the year at
R18.60 (from R16.88 at acquisition date). This resulted in a foreign currency translation reserve of R28.6
million.
Net asset value per share has increased by 55% to 198 cents (2018: 128 cents), while tangible net asset value
per share has increased by 63% to 196 cents (2018: 120 cents).
SHARE ISSUES
Mettle converted its ordinary shares from par value to no par value and increased its authorised ordinary share
capital from 200 million to 500 million shares in April 2018.
On 14 May 2018 Mettle issued 40.2 million ordinary shares to Tradehold in settlement of borrowings due to
related parties amounting to R42 million.
On 15 May 2018 Mettle issued 110.7 million ordinary shares to Tradehold for a consideration of R403.2 million.
ORDINARY DIVIDEND
The board has decided not to declare a final dividend.
PROSPECTS
The results for the year under review contain several once-off items that will not recur in future periods. In
addition, the results of Reward have only been included for nine and a half months. As such, the board of
directors of the Company ("the Board") expect the results for the year ended 29 February 2020 to more
accurately reflect the true operational potential of the Group's business.
Any reference to future financial performance included in this statement has not been reviewed or reported on
by the Group's external auditors and does not constitute an earnings forecast.
BASIS OF PRESENTATION AND ACCOUNTING POLICIES
The summary consolidated financial statements are prepared in accordance with the requirements of the JSE
Limited Listings Requirements (the "Listings Requirements") for provisional reports, and the requirements of the
Companies Act, No 71 of 2008 applicable to summary financial statements.
The Listings Requirements require provisional reports to be prepared in accordance with the framework
concepts and the measurement and recognition requirements of International Financial Reporting Standards
(IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and
Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum,
contain the information required by IAS 34 Interim Financial Reporting. The accounting policies applied in the
preparation of the consolidated financial statements from which the summary consolidated financial statements
were derived are in terms of IFRS and are consistent with those accounting policies applied in the preparation of
the previous consolidated financial statements, except for the adoption of the following new standards that
became effective for the current reporting period beginning on 1 March 2018:
- IFRS 9 Financial Instruments
From 1 March 2018, the Group assesses the expected credit losses associated with its debt instruments
carried at amortised cost, on a forward-looking basis. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
For trade receivables, the Group applies a combination of the staging model and simplified approach
permitted by IFRS 9, which requires expected credit losses to be recognised based on the stage of the
debt, within the general model, or on expected lifetime losses from initial recognition of the receivables.
This had an immaterial impact on Group retained income at 1 March 2018. The loss allowance on the
receivables acquired as part of the acquisition of Reward in May 2018 was calculated in terms of IFRS 9.
- IFRS 15 Revenue from Contracts with Customers
The standard required that companies recognise revenue to depict the transfer of goods or services to
customers in an amount that reflects the consideration to which the company expects to be entitled in
exchange for those goods or services.
The standard had no impact on the manner in which the Group recognised its various revenue streams.
Additional disclosure on these different revenue streams and the timing of their recognition is presented in
note 4.
Certain new accounting standards and interpretations have been published that are not mandatory for the 28
February 2019 reporting period and have not been early adopted by the Group. The Group's assessment of the
impact of these new standards and interpretations is set out below:
- IFRS 16 Leases
IFRS 16 will result in almost all leases being recognised on the balance sheet by lessees, as the distinction
between operating and finance leases is removed. Under the new standard, an asset (the right to use the
leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term and
low-value leases.
The Group expects to recognise right-of-use assets of R4.9 million on 1 March 2019 and lease liabilities of
R5.4 million. Retained income at 1 March 2019 will reduce by approximately R0.5 million.
There are no other standards and interpretations that are not yet effective and that would be expected to
have a material impact on the Group in the current or future reporting periods and on foreseeable future
transactions.
The Group's reportable segments reflect those components of the Group that are regularly reviewed by the
chief executive officer and other senior executives who make strategic decisions.
Tangible net asset value per share
Tangible net asset value per share excludes goodwill and intangible assets from the calculation of the Group's
net asset value, being the same manner in which tangible net asset value was calculated in the PLS. This is not
a defined term under IFRS and may not be comparable with similar measures disclosed by other companies.
The Board takes full responsibility for the preparation of this provisional report.
AUDIT OPINION
These summary consolidated financial statements for the year ended 28 February 2019 have been audited by
PricewaterhouseCoopers Inc., who expressed an unmodified opinion thereon. The auditor also expressed an
unmodified opinion on the consolidated financial statements from which these summary consolidated financial
statements were derived.
A copy of the auditor's report on the summary consolidated financial statements and of the auditor's report on
the consolidated financial statements are available for inspection at the Group's registered office, together with
the financial statements identified in the respective auditor's reports.
The auditor's report does not necessarily report on all of the information contained in this announcement.
Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor's
engagement they should obtain a copy of the auditor's report together with the accompanying financial
information from the Group's registered office.
PREPARATION OF FINANCIAL RESULTS
The preparation of the financial results was supervised by the Group financial director, Justin Rookledge
BBusSci Finance (Hons), CA (SA).
CHANGES TO BOARD AND COMPANY SECRETARY
The following changes to the Board and Company Secretary took place during the financial year:
JA Aitken Resigned on 19 April 2018
WD Marais Resigned on 19 April 2018
W Maree Resigned on 19 April 2018
IHJ Visagie Resigned on 19 April 2018
BA Chelius Appointed on 19 April 2018
TM Flannery Appointed on 19 April 2018
HRW Troskie Appointed on 19 April 2018 and resigned on 12 September 2018
MVZ Wentzel Appointed on 19 April 2018
RD Fenner Appointed on 18 September 2018
RD Fenner is the lead independent non-executive director and chairman of the audit and risk committee.
Mettle Corporate Finance Proprietary Limited was appointed as Company Secretary on 19 April 2018.
FH Esterhuyse HF Prinsloo
Chairman CEO
31 May 2019
STATEMENT OF FINANCIAL POSITION
Audited Audited
2019 2018
R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 1 693 592
Goodwill 5 595 7 475
Deferred taxation 1 644 1 142
Financial assets at fair value through profit or loss 10 932 31 234
Investments in joint ventures 29 020 7 073
Investments in associates 37 111 53 123
Loans due from joint ventures 24 768 -
Loans due from associates 47 647 32 390
Loan receivables 36 421 18 285
Total non-current assets 194 831 151 314
Current assets
Tax asset 11 1
Loans due from associates 21 8 189
Loan receivables 25 991 21 467
Trade and other receivables 1 209 389 35 826
Cash and cash equivalents 109 648 6 278
Total current assets 1 345 060 71 761
Total assets 1 539 891 223 075
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 545 828 100 622
Retained income 38 765 22 198
584 593 122 820
Foreign currency translation reserve 28 572 -
Common control reserve (123 560) -
Capital and reserves attributable to the owners 489 605 122 820
Non-controlling interest 60 317 -
Total equity 549 922 122 820
Non-current liabilities
Deferred taxation 771 309
Borrowings 731 099 43 757
Borrowings due to related parties 194 824 -
Other financial liability 2 611 -
Total non-current liabilities 929 305 44 066
Current liabilities
Borrowings 2 658 8 107
Borrowings due to related parties - 42 000
Bank overdrafts 19 241 1 355
Taxation 7 800 82
Provisions 4 885 329
Trade and other payables 26 080 4 316
Total current liabilities 60 664 56 189
Total equity and liabilities 1 539 891 223 075
Net asset value per share (cents) 198 128
Tangible net asset value per share (cents) 196 120
STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
2019 2018
R'000 R'000
Revenue 226 977 44 190
Other income 12 708 8 665
Loss allowance (11 565) (99)
Operating expenses (95 409) (28 385)
Profit from operations 132 711 24 371
Interest expense (56 975) (6 905)
Fair value loss on other financial liability (2 611) -
Impairment of goodwill (1 880) -
Impairment of equity accounted investments (15 201) -
(Loss)/profit from equity accounted investments (6 735) 3 054
Profit before taxation 49 309 20 520
Taxation (17 270) (4 686)
Profit after taxation before non-controlling interest 32 039 15 834
Other comprehensive income
Items that may be subsequently reclassified to profit
Exchange difference on translation of foreign operation 33 807 -
Total comprehensive income 65 846 15 834
Attributable to:
Equity holders of the company 15 417 15 834
Non-controlling interest 16 622 -
32 039 15 834
Total comprehensive income attributable to:
Equity holders of the parent 43 989 15 834
Non-controlling interest 21 857 -
65 846 15 834
Earnings per share (cents):
- basic 7.14 16.44
- diluted 7.14 16.44
Dividends per share - -
STATEMENT OF CHANGES IN EQUITY
Foreign
currency Common Non-
Stated Retained translation control controlling
capital income reserve reserve interest Total
R'000 R'000 R'000 R'000 R'000 R'000
Equity at 28 February 2017 100 622 6 364 106 986
Profit after taxation 15 834 15 834
Equity at 28 February 2018 100 622 22 198 - - - 122 820
Issue of ordinary shares 445 206 445 206
Acquisition of subsidiary (123 560) 48 557 (75 003)
Profit after taxation 15 417 16 622 32 039
Profit on purchase of loan claim from
related party 1 150 1 150
Other comprehensive income 28 572 5 235 33 807
Dividends paid to non-controlling
interest (10 097) (10 097)
Equity at 28 February 2019 545 828 38 765 28 572 (123 560) 60 317 549 922
STATEMENT OF CASH FLOWS
Audited Audited
2019 2018
R'000 R'000
Cash flows from operating activities
Profit from operations 132 711 24 371
Non-cash items (132 826) (17 457)
Changes in working capital (133 600) (9 242)
Cash utilised in operations (133 715) (2 328)
Interest received 140 860 14 806
Preference dividends received - 192
Interest paid (53 161) (4 065)
Taxation paid (15 640) (2 909)
Net cash (outflow)/inflow from operating activities (61 656) 5 696
Cash flows from investing activities
Acquisition of property, plant and equipment (1 053) (119)
Proceeds on disposal of property, plant and equipment 94 -
Cash outflow on acquisition of subsidiaries (318 096) -
Cash outflow on disposal of subsidiary (1 853) -
Acquisition of investments in joint ventures (19 919) (4 000)
Acquisition of loans to joint ventures (21 250) -
Additional investment in associate - (7 260)
Investment in preference shares - (24 750)
Proceeds on redemption of preference share investment - 84
Purchase of financial assets at fair value through profit or loss - (30 001)
Proceeds on disposal of financial assets at fair value through
profit or loss 20 500 -
Loans recovered from associates 28 951 15 215
Loans advanced to associates (43 975) -
Loans advanced to joint venture (430) -
Loan receivables advanced (45 843) (39 411)
Loan receivables recovered 51 598 46 773
Dividend received from associate 2 000 -
Dividend received from joint venture 124 -
Proceeds on disposal of asset held for sale - 6 626
Net cash outflow from investing activities (349 152) (36 843)
Cash flow from financing activities
Issue of ordinary shares 403 206 -
Repayment of borrowings (11 255) (35 560)
Receipt of borrowings 72 336 62 000
Repayment of borrowings due to related parties (19 934) (2 631)
Receipt of borrowings due to related parties 54 252 1 650
Dividends paid to non-controlling interest (10 097) -
Net cash inflow from financing activities 488 508 25 459
Net increase/(decrease) in cash and cash equivalents 77 700 (5 688)
Effect of changes in exchange rate 7 784 -
Cash and cash equivalents at beginning of the year 4 923 10 611
Cash and cash equivalents at end of the year 90 407 4 923
As presented on the statement of financial position
Cash and cash equivalents 109 648 6 278
Bank overdrafts (19 241) (1 355)
90 407 4 923
SUPPLEMENTARY INFORMATION
1. BUSINESS COMBINATIONS
Acquisition of Reward
Mettle acquired 90% of Reward on 15 May 2018 via a subscription for shares which diluted the existing
shareholding of Tradehold. Reward owns 75% of Reward Finance Group. IFRS 3 Business Combinations was
not applicable as this transaction was a combination of businesses under common control due to the
common shareholding of the Company and Tradehold.
Reward had the following assets and liabilities on acquisition date: Audited
2019
R'000
Recognised amounts of identifiable net assets
Equipment 844
Loan receivables 30 435
Trade and other receivables 936 705
Cash and cash equivalents 70 001
Borrowings (558 357)
Borrowings due to related parties (144 408)
Deferred taxation (68)
Trade and other payables (14 332)
Provisions (826)
Taxation (5 486)
314 508
Non-controlling interest (48 557)
265 951
Fair value of consideration transferred
Consideration settled in cash 389 511
Common control reserve 123 560
Cash flow on acquisition of subsidiary
Cash and cash equivalents acquired with the subsidiary 70 001
Consideration settled in cash (389 511)
(319 510)
The Group has included revenue of R179.5 million and profit attributable to equity holders of the parent
of R37.1 million relating to Reward (refer to note 7). Had Reward been consolidated for the full year,
the Group revenue and the profit attributable to shareholders would have been R268.8 million and
R23.9 million, respectively.
Audited Audited
2019 2018
R'000 R'000
2. TRADE AND OTHER RECEIVABLES
Trade receivables
South Africa 35 126 34 519
Reward Capital 977 631 -
Reward Invoice Factoring 222 721 -
Loss allowance
South Africa (1 262) (82)
Reward Capital (13 068) -
Reward Invoice Factoring (13 663) -
1 207 485 34 457
Other receivables 1 904 1 369
1 209 389 35 826
Audited Audited
2019 2018
R'000 R'000
3. BORROWINGS
Non-current
Small Enterprise Finance Agency SOC Limited ("SEFA") 46 683 43 757
Foresight Group ("Foresight") 684 415 -
731 098 43 757
Related parties
Sandy Limited ("Sandy") 55 813 -
Tradegro S.ar.l. ("Tradegro") 139 011 -
194 824 -
Current
SEFA 2 658 5 547
FirstRand Bank Limited ("FirstRand") - 2 560
2 658 8 107
Bank overdrafts
Nedbank Limited ("Nedbank") 8 313 1 355
FirstRand 10 928 -
19 241 1 355
947 821 53 219
The borrowings from SEFA accrue interest at prime plus 1%. Interest is payable semi-annually with
capital repayable in March 2020. The borrowings are secured by Group cash balances and loan and
trade receivables of R71.1 million (2018: R63.9 million). The R50 million facility has been fully
drawn down.
The borrowings from Foresight accrue interest at a fixed rate which is payable quarterly. The
current facility limit is GBP50 million. The repayment date is four years from each individual draw
down with the first repayment due in August 2021. Foresight has a debenture over all assets
of Reward Finance Group (including shares in its subsidiaries). The carrying value of these
assets (equipment, loan receivables, trade and other receivables and cash and cash
equivalents) amount to R1.3 billion at year-end. The amounts owed by Reward Finance
Group to Reward (R432.1 million) and Sandy (R55.8 million) are subordinated in favour of
Foresight.
The borrowings from Sandy are unsecured and accrue interest at a fixed rate of 7% which is
payable monthly. The borrowings are repayable on 31 January 2023. The availability period
for the remaining GBP3 million of this facility ends on 30 September 2019.
The borrowings from Tradegro are unsecured, accrue interest at sterling three-month Libor
plus 6.5%. The capital and capitalised interest are repayable on 28 May 2020. The sterling
three-month Libor rate was 0.9% at year-end.
The R33 million facility from FirstRand accrued interest at prime less 1% and expired on 31
August 2018.
The unsecured R10 million (2018: R5 million) overdraft facility from Nedbank accrues interest
at prime which is settled monthly. This facility is reviewed annually.
The R15 million overdraft facility from FirstRand accrues interest at prime plus 1% which is
settled monthly. This facility is secured by the financial assets at fair value through profit or
loss (unit trust investment) of R10.9 million and is reviewed annually.
Audited Audited
2019 2018
R'000 R'000
4. REVENUE
Fee income
- Administration and management 7 718 5 177
- Corporate finance 4 824 6 598
- Fundraising 5 750 2 728
- Secretarial and sponsor services 669 1 311
Service fee income 50 299 -
Discounting income 16 066 14 333
Interest income 141 651 14 043
226 977 44 190
Timing of revenue recognition
- At a point in time 21 140 7 395
- Over time 205 837 36 795
226 977 44 190
Revenue is split in geographical regions in note 7.
5. EARNINGS PER SHARE
Basic earnings per share (cents) 7.14 16.44
Diluted earnings per share (cents) 7.14 16.44
Headline earnings per share (cents) 14.69 16.11
Diluted headline earnings per share (cents) 14.69 16.11
Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the parent with the weighted
average number of ordinary shares in issue for the period.
Profit attributable to equity holders of the parent 15 417 15 834
Weighted average number of ordinary shares ('000) 215 868 96 292
Diluted earnings per share
The Group has no dilutive potential ordinary shares.
Headline earnings per share
Headline earnings per share is calculated by dividing the headline
earnings with the weighted average number of ordinary shares in
issue for the period.
Profit attributable to equity holders of the parent 15 417 15 834
Bargain purchase gain on acquisition of subsidiary (823) -
Loss on disposal of subsidiary 85 -
Impairment of goodwill 1 880 -
Impairment of equity accounted investments 15 201 -
Profit on asset held for sale - (326)
Profit on disposal of property, plant and equipment (81) -
Tax impact of adjustments 22 -
Headline earnings 31 701 15 508
Weighted average number of ordinary shares ('000) 215 868 96 292
6. FAIR VALUE DISCLOSURES
The Group's financial instruments are measured at amortised cost besides the financial assets at fair
value through profit or loss of R10.9 million and other financial liability of R2.6 million.
These financial assets are unit trust investments measured at quoted prices (level 1).
The other financial liability is an option contract whereby the remaining shareholder in Lendcor Holdings
Proprietary Limited can put their 50.1% shares to Mettle. The exercise price is the greater of a proportional
share of six times the profit after tax for the year ending 28 February 2021 of Lendcor and R12.9 million and
can only be exercised during the period from 1 June 2021 to 31 August 2021. The valuation of the put option
considers the exercise period, exercise price and current net asset value and future profitability of
Lendcor (level 3).
The carrying value of all other financial instruments approximate fair value.
7. SEGMENT INFORMATION
The Group has two reportable segments at 28 February 2019 (after the acquisition of Reward).
Audited Audited
United South Audited
Kingdom Africa Total
R'000 R'000 R'000
Revenue 179 462 47 515 226 977
Profit/(loss) attributable to equity holders of the parent 37 115 (21 698) 15 417
Total assets 1 304 529 235 362 1 539 891
Total liabilities 912 573 77 396 989 969
There were no transactions between the segments. The Group only had one reportable segment at 28
February 2018.
8. RELATED PARTIES
Certain Group companies concluded transactions with each other in the ordinary course of business.
These intergroup transactions and balances are eliminated on consolidation.
Related party balances and transactions for the current year are similar to those disclosed in the
Group's annual financial statements for the year ended 28 February 2018 besides for those that took
place as part of the Restructure and those detailed below:
Audited
2019
R'000
Loan to EAF Investments Limited ("EAF") 16 249
Reward Finance Group advanced GBP1.2 million to EAF in April 2017. EAF is a
shareholder in Reward Finance Group and is controlled by Nick
Smith who is also a director of Reward Finance Group. The loan is repayable
after 10 years and accrues interest at sterling three-month Libor plus 2.5%.
Dividends payable to EAF are used to repay the loan. EAF received dividends
of R4 million during the period from 15 May 2018 to year-end. The loan is
secured by its 10% shareholding in Reward Finance Group. The sterling
three-month Libor rate was 0.9% at year-end.
Loan to JE&K Limited ("JE&K") 12 665
Reward Finance Group advanced GBP0.76 million to JE&K in April 2018. JE&K is a
shareholder in Reward Finance Group and is controlled by David
Harrop who is also a director of Reward Finance Group. The loan is repayable
after 10 years and accrues interest at sterling three-month Libor plus 2.5%.
Dividends payable to JE&K are used to repay the loan. JE&K received dividends
of R2 million during the period from 15 May 2018 to year-end. The loan is secured
by its 5% shareholding in Reward Finance Group. The sterling three-month Libor
rate was 0.9% at year-end.
The terms of the related party borrowings due to Tradegro and Sandy are disclosed in note 3.
9. EVENTS AFTER THE REPORTING DATE
The Company has provided a guarantee for the Rand equivalent of USD3.1 million to Investec Bank
(Mauritius) Limited (via Investec Bank Limited) for its USD5 million funding facility provided to
Mettle Solar Africa (the Company's 55% owned joint venture) in May 2019. The Company had to place
the required funds on deposit at Investec Bank Limited. A 35% shareholder of Mettle Solar Africa
has provided a similar guarantee for the remaining USD1.9 million. This facility funds the construction
of Mettle Solar Africa's solar projects in Kenya and the Seychelles.
Cape Town
31 May 2019
Designated Advisor
Questco Corporate Advisory Proprietary Limited
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