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Abridged report for the year ended 31 March 2019, notice of AGM and the availability of the B-BBEE report
Nictus Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1981/011858/06)
JSE Share code: NCS
ISIN Code: NA0009123481
("Nictus" or "the company" or "the group")
Abridged report relating to the audited financial results for
the year ended 31 March 2019, details of the notice of the annual
general meeting and availability of the B-BBEE annual compliance report
Abridged consolidated statement of financial position as at 31 March 2019
Figures in R'000 2019 2018
Assets
Property, plant and equipment 18 026 18 051
Intangible assets 1 201 118
Investments 28 640 11 340
Deferred tax assets 3 253 3 020
Loans and receivables 4 485 5 387
Non-current assets 55 605 37 916
Inventories 10 119 10 993
Loans and receivables 38 085 44 226
Trade and other receivables 401 190 358 645
Investments 93 156 98 809
Cash and cash equivalents 64 640 89 717
Current tax receivable 70 -
Current assets 607 260 602 390
Total assets 662 865 640 306
Equity and liabilities
Stated capital 25 969 48 668
Revaluation reserve 7 983 7 983
Retained earnings 65 147 46 076
Equity 99 099 102 727
Liabilities
Deferred tax liabilities 2 633 2 400
Non-current liabilities 2 633 2 400
Trade and other payables 11 478 10 974
Insurance contract liability 549 655 524 193
Current tax payable - 12
Current liabilities 561 133 535 179
Total liabilities 563 766 537 579
Total equity and liabilities 662 865 640 306
Abridged consolidated statement of profit or loss and other comprehensive
income for the year ended 31 March 2019
Figures in R'000 2019 2018
Revenue 50 752 47 361
Cost of sales (25 468) (26 470)
Gross profit 25 284 20 891
Other income 734 2 259
Investment income from operations 44 190 42 505
Operating expenses (50 594) (48 258)
Administrative expenses (17 263) (17 128)
Results from operating activities 2 351 269
Investment income 4 192 4 601
Profit before taxation 6 543 4 870
Taxation credit - 542
Profit for the year 6 543 5 412
Other comprehensive income - -
Total comprehensive income for the
year 6 543 5 412
Profit attributable to:
Owners 6 543 5 412
Total comprehensive income attributable to:
Owners 6 543 5 412
Basic earnings per share (cents) 10,60 8,17
Diluted basic earnings per share
(cents) 10,60 8,17
Abridged consolidated statement of cash flows for the year
ended 31 March 2019
Figures in R'000 2019 2018
Cash flows from operating activities
Cash utilised by operations (57 908) (23 070)
Investment income received from operations 42 958 40 709
Dividends received 1 232 1 796
Dividends paid (1 988) (1 988)
Tax paid (82) (1 109)
Net cash (utilised by)/generated from
operating activities (15 788) 16 338
Cash flows from investing activities
Acquisition of property, plant and
equipment (629) (875)
Proceeds on sale of property, plant and
equipment 169 -
Acquisition of intangible assets (1 353) (145)
Acquisition of investments (51 666) (35 126)
Investment income received 4 192 4 601
Short-term funds disinvested 42 081 46 781
Loans repaid by related party 6 141 540
Net cash (utilised by)/generated from
investing activities (1 065) 15 776
Cash flows from financing activities
Repurchase of company shares: Specific
buy-back from shareholder (8 224) -
Net cash utilised by financing activities (8 224) -
Total cash movement for the year (25 077) 32 114
Cash and cash equivalents at the beginning
of the year 89 717 57 603
Total cash and cash equivalents at the end
of the year 64 640 89 717
Abridged consolidated statement of changes in equity for the year
ended 31 March 2019
Stated Revaluation Retained Total
Figures in R'000 capital reserve earnings equity
Balance as at
1 April 2017 48 668 7 983 42 652 99 303
Profit for the year - - 5 412 5 412
Total comprehensive
income for the year - - 5 412 5 412
Transactions with the
owners of the company
Distributions to the
owners of the company
Dividends paid - - (1 988) (1 988)
Total transactions with
the owners of the company - - (1 988) (1 988)
Balance as at
31 March 2018 48 668 7 983 46 076 102 727
Profit for the year - - 6 543 6 543
Total comprehensive
income for the year - - 6 543 6 543
Transactions with the
owners of the company
Distributions to the
owners of the company
Dividends paid - - (1 988) (1 988)
Prescribed dividends - - 41 41
Shares repurchased from
the owners of the company
Specific repurchase -
ordinary shares# (22 699) - 14 475* (8 224)
Total transactions with
the owners of the company (22 699) - 12 528 (10 171)
Balance as at
31 March 2019 25 969 7 983 65 147 99 099
# During the year, the company successfully completed a specific repurchase
transaction, in terms of sections 4, 48(8)(b) and 114 of the Companies Act
of South Africa No. 71 of 2008 ("Companies Act"), read together with sections
115 and 164 of the Companies Act, the JSE Listings Requirements and Nictus'
Memorandum of Incorporation of 12 826 440 ordinary shares (constituting 19,35%
of the company's total ordinary shares in issue) from Nictus Holdings Limited,
a related party, for a consideration of R7,471 million, being a price of
58,25 cents per share.
* This amount represents the gain on the specific repurchase of ordinary shares.
Abridged segmental report for the year ended 31 March 2019
Figures in R'000 2019 2018
Segment assets
Furniture retail 51 756 70 391
Insurance 617 081 609 636
Sub-total 668 837 680 027
Head office and eliminations (5 972) (39 721)
Total segment assets 662 865 640 306
Segment revenue
Furniture retail 42 716 43 543
Insurance 9 235 5 150
Sub-total 51 951 48 693
Head office and eliminations (1 199) (1 332)
Total segment revenue 50 752 47 361
Net profit for the year
Furniture retail 842 1 168
Insurance 3 293 1 896
Sub-total 4 135 3 064
Head office and eliminations 2 408 2 348
Total net profit for the year 6 543 5 412
Accounting policies
Basis of preparation
The abridged consolidated financial statements for the year ended
31 March 2019 ("Abridged Financial Statements") are prepared in accordance
with the requirements of the JSE Limited ("JSE") Listings Requirements
("Listings Requirements") for abridged reports, and the requirements of the
Companies Act applicable to Abridged Financial Statements.
The Abridged Financial Statements are 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
Reporting Pronouncements as issued by the Financial Reporting Standards Council
and also, as a minimum, contain the information required by IAS 34:
Interim Financial Reporting. This announcement does not include the information
required pursuant to paragraph 16A(j)and 16A(l) of IAS 34. The accounting
policies applied in the preparation of the audited consolidated financial
statements for the year ended 31 March 2019 ("Audited Financial Statements"),
from which the Abridged Financial Statements were derived, are in terms of
International Financial Reporting Standards and are consistent with the
accounting policies applied in the preparation of the previous audited
consolidated financial statements, except as indicated otherwise on pages 65
and 66 of the Audited Financial Statements, in the case of new accounting
standards implemented effective 1 April 2018. The adoption of the new accounting
standards and interpretations had no material impact on the results of the group.
Mr Eckhart H Prozesky (financial director, CA (SA)) was responsible for
supervising the preparation of the Abridged Financial Statements.
The full Audited Financial Statements are available on our website, at our
registered office and upon request.
Related parties
During the period, certain companies within the group entered into transactions
with each other. These intra-group transactions have been eliminated on
consolidation. Related party information is unchanged from that reported at
31 March 2019. Refer to the Audited Financial Statements for further information.
Reconciliation between earnings and headline earnings for the year
ended 31 March 2019
Profit on Non-
ordinary controlling Net
Figures in R'000 activities Taxation interest profit
2019
Profit for the year 6 543 - - 6 543
Adjustments for:
Profit on disposal of
property, plant and
equipment (70) 20 - (50)
Headline earnings 6 473 20 - 6 493
2018
Profit for the year 4 870 542 - 5 412
Adjustments for:
Loss on disposal of
property, plant and
equipment 6 (2) - 4
Headline earnings 4 876 540 - 5 416
2019 2018
Headline earnings per share (cents) 10,52 8,17
Diluted headline earnings per share (cents) 10,52 8,17
Responsibility for Audited Financial Statements
The Audited Financial Statements have been audited by KPMG Inc., and their
unqualified audit opinion is available for inspection at the registered
office of the company. The auditor's opinion does not necessarily report
on all of the information contained in this Abridged Financial Statements
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 opinion together with the accompanying Audited
Financial Statements from the issuer's registered office or website.
The Abridged Financial Statements have been extracted from the Audited Financial
Statements, but is not itself audited. The directors of Nictus are solely
responsible for the preparation of the Abridged Financial Statements and for its
correct extraction from the underlying Audited Financial Statements.
Events after reporting date
There were no material events after the reporting date and up to the date of
approval of the Abridged Financial Statements that required adjustment to or
disclosure in the Audited Financial Statements, other than that a dividend of
3,75 cents per share was declared by the board of directors ("board") subsequent
to year end, payable to all shareholders recorded in the company's shareholder
register at close of business on 19 July 2019. A separate announcement will
follow containing details of the dividend.
Changes to the board and board committees
Mr John D Mandy, an independent non-executive director of the company retired
with effect from 31 January 2019.
Mr Cornelius J de Vrye (Ronnie), an independent non-executive director of the
company, replaced Mr John D Mandy as chairman of the audit and risk committee
and member of the remuneration and nomination committee, with effect from
31 January 2019.
Mr Gerard Swart, an independent non-executive director of the company, resigned
as a member of the social and ethics committee with effect from 20 November 2018
and Mr Stephanus J Gerber (Ion), a prescribed officer of the insurance segment
of the company, replaced Mr Gerard Swart on the same date.
Chairman's report - Barend J Willemse (Johan)
South Africa's economic growth slowed further during 2018 and is part of a
declining trend since 2009/10. The economic growth rate for 2018 was published
at 0,8% by the South African Reserve Bank (SARB), with household consumption
spending growing by only 1,8% during 2018 and official unemployment increasing
towards the 28% level.
Corruption and corporate scandals continue with a lot of pressure to improve
corporate governance throughout the South African business sector and government
entities. Hopefully, we will see several prosecutions during 2019 and a slight
improvement in South Africa's economic and business confidence.
The challenges with electricity supply and fuel price increases continue with
further tax increases expected and a reduction in household disposable income.
The SARB expects that we will only see an improvement in growth in household
spending by late 2019 and into 2020. Consumer and business confidence declined
further and, in early 2019, reached comparable levels to the world recessionary
period in 2008/09.
The board continues to focus on its long-term strategy to maintain profitability
amid a weak economic environment and deteriorating consumer and business
confidence.
Management continues to adapt to a difficult trading environment in both the
furniture retail and insurance sectors. The board is of the opinion that we will
remain profitable during the current economic slowdown through continued
improvements and innovation as well as the maintenance of profit levels. Costs
have been well managed within the budget and profit levels were maintained.
We are making progress in maintaining a more stable profit level and the board
has also adopted an approach to deliver a steady dividend payment to shareholders
in the current economic down-cycle. We are of the opinion, that as we build this
record, it will translate into better support for the share price. The board has
also embarked on a strategy to employ capital more profitably and has adopted a
strategy that we believe will support the share price and increase
profits/dividends into the future. The share buy-back from Nictus Holdings
Limited (a Namibian company), has not only consolidated shareholding but has
also reduced the number of shares in issue. The strategy remains to employ
capital optimally and improve profitability (and dividends) to a more desirable
level. We envisage new actions during the financial year that will further
improve the efficiency of capital employed and improve profitability within the
current capital structure.
Continued focus on our customers and target market will remain a priority to
improve our client offering and client base and will continue to build the
business in a sustainable manner. Given the fact that the new Solvency
Assessment and Management (SAM) regulations have been legislated within the
insurance industry, regulatory uncertainty has been reduced, but the burden
continues to add costs to doing business.
While the country slipped into a mode of corporate scandal and corruption on a
broad basis, the board and management remain very focused in maintaining our
values and integrity and fulfilling our fiduciary duties to the shareholders.
In this regard, I want to thank John Mandy, who fulfilled his role as an
independent non-executive director and the chairman of the audit and risk
committee, for his dedication and due diligence.
A word of thanks to the board of directors for their dedication and focus in
fulfilling their roles as directors and for safeguarding our shareholders'
interests.
I also want to welcome Ronnie de Vrye as an independent non-executive director
and chairman of the audit and risk committee and thank him for the contribution
he is making to our corporate governance and strategy.
My thanks also to the managing director, financial director and staff for their
enthusiasm and dedication with which they implement the company's strategy and
values to improve profitability on an ethical basis.
Group managing director's report - Gerard R de V Tromp
It is once again a privilege to present and report on the financial results of
the group. Although challenging, it was an exciting year where we were forced to
be creative and competitive to build on our long-term strategy to sustainably
grow our earnings and asset base to create wealth for all our stakeholders.
A great milestone that was achieved this year was the share buy-back transaction
from Nictus Holdings Limited which resulted in an increase in the net asset
value per share, which, in turn, created intrinsic value for our shareholders.
We are proud to maintain a constant ordinary dividend payment and have aligned
our strategies to enhance and maintain a sustainable dividend payment to reward
our shareholders, especially in these challenging, yet interesting, times in the
South African political and economic environments.
We are privileged to welcome Ronnie de Vrye to our board and look forward to
appreciating the wealth of experience and skills he will contribute to the
group. We wish John Mandy well for his retirement and we are thankful for his
contribution during his term as director.
Insurance segment
We experienced a steady growth in insurance premiums this year and are delighted
with the success and value that our product is contributing to our clients
within their different operations. We remain focused on tailormade
client-specific solutions. One of our success factors remains the service and
turnaround time to our clients and potential clients. We have aligned our
investment strategy to challenge the grim investment environment and we are
satisfied with the results achieved where no significant fluctuations were
experienced that impacted earnings. We are excited to approach the coming years
and look forward to opportunities where we can, together with our clients,
create opportunities to identify risks and convert them into sustainable wealth.
Furniture segment
Furniture retail will always be one of the most challenging, yet rewarding,
operations in the retail industry. Quality and value for money cannot be
separated from the success of furniture retail and we are thankful that we can
report on the profitability of this segment. Although profit margins are
increasingly under pressure, we applaud the support from our suppliers for their
combined efforts in satisfying customer needs and preferences. We have had
success in identifying and delivering unique product lines to our devoted
customers and look forward to building and improving on this in the coming
years. It is rewarding that we have had few nonperforming debtors and that bad
debts and the provision therefore were far below industry norms, as well as our
expectations.
Corporate governance
Nictus is proud to promote the highest standards of corporate governance and
transparency. We value the integrity of our extremely committed employees in the
effort to endorse a sound internal control environment. We remain committed to
conforming to all rules and regulations we are exposed to across the group to
assist in improving and building on a better South Africa and fighting corrupt
practices.
Outlook
Nictus is committed to creating wealth for its stakeholders and will continue to
build on this strategy. Our customers remain our core focus and we will
persevere in providing them with innovative and exclusive products and solutions
with unsurpassed levels of customer service.
Improvements of systems and ongoing focus on all aspects of the group will be a
priority in order to be efficient in our operations and effective in maximising
returns and optimising all capital structures.
We have hope in the new leadership of the country and take pride in being a
South African corporate citizen contributing to the process of restoring
South Africa to economic prosperity.
Appreciation
I would like to bring tribute and all glory to our loving God as without his
love and grace this group would have no success.
I would like to express a warm thank you to our chairman and all board members
for their exceptional value add to the group as well as their commitment and
support to achieve the desired outcomes. Thank you to each and every employee
and their families for their commitment and assistance on the journey to achieve
our ideal future. Thank you to all of our clients and customers for their
unqualified support and belief in the group and lastly, I would like to thank
my family for their unreserved and unconditional support and for being the
cornerstone on which we can build this group.
Integrated annual report and notice of annual general meeting
The Integrated Annual Report contains a notice convening the annual general
meeting of Nictus shareholders for the year ended 31 March 2019 ("the AGM"). The
AGM will be held in the boardroom at the Nictus Building, corner of Pretoria
and Dover Streets, Randburg, Gauteng on Wednesday, 21 August 2019 at 12h00.
The notice of AGM and the summarised version of the Audited Financial
Statements, are to be posted to Nictus shareholders today, 28 June 2019. These
documents and the full Integrated Annual Report are also available on the
company's website at: http://www.nictuslimited.co.za/wp-
content/uploads/2019/06/Nictus-Limited_IAR-2019.pdf.
Availability of the Broad-Based Economic Empowerment annual compliance report
The company's annual compliance report prepared pursuant to section
13(G)(2) of the Broad-Based Economic Empowerment Act No.53 of 2003 is available
on the company's website at: http://www.nictuslimited.co.za/wp-
content/uploads/2019/06/Nictus-Limited_BEE-Certificate-2019.pdf.
Barend J Willemse (Johan)
Chairman
28 June 2019
Sponsor:
One Capital
Registered office of the Company
Head office
1st Floor, Nictus Building
Corner of Pretoria and Dover Streets, Randburg
PO Box 2878, Randburg 2125
Windhoek office
Nictus Building, 1st Floor
140 Mandume Ndemufayo Avenue, Windhoek
Private Bag 13231, Windhoek
Company secretary
Veritas Board of Executors Proprietary Limited
Registration number: 1984/007487/07
1st Floor, Nictus Building
Corner of Pretoria and Dover Streets, Randburg
PO Box 2878, Randburg 2125
Auditors and reporting accountant
KPMG Inc.
Registration number: 1999/021543/21
KPMG Crescent
85 Empire Road, Parktown 2193
Private Bag 9, Parktown 2122
Date: 28/06/2019 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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