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PEREGRINE HOLDINGS LIMITED - Reviewed condensed consolidated provisional results for the year ended 31 March 2020

Release Date: 23/06/2020 07:05
Code(s): PGR     PDF:  
Wrap Text
Reviewed condensed consolidated provisional results for the year ended 31 March 2020

PEREGRINE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1994/006026/06)
Share code: PGR
ISIN: ZAE000078127
("Peregrine" or "the Company" or "the Group")
 
SHORT-FORM ANNOUNCEMENT: PROVISIONAL FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2020

KEY INDICATORS

- Assets under management R142 billion (March 2019: R124 billion)
- Basic earnings R266 million (March 2019: R410 million)
- Basic earnings per ordinary share 130.9 cents per share (March 2019: 197.2 cents per share)
- Headline earnings R308 million (March 2019: R439 million)
- Headline earnings per ordinary share ("HEPS") 151.6 cents per share (March 2019: 210.8 cents per share)
- Interim cash dividend of 65.00 cents per share (March 2019: 85.00 cents per share)
  Final cash dividend nil (March 2019: 100.00 cents per share)
- Ongoing(1) Segmental(2) Headline earnings R348 million (March 2019: R326 million)
- Ongoing Segmental HEPS 166.4 cents per share (March 2019: 152.9 cents per share)
- Total revenue from continuing operations R1.7 billion (March 2019: R1.6 billion)
- Profit from ordinary activities from continuing operations (before tax and capital items) R450 million
  (March 2019: R533 million)
- Loss from discontinued operation (net of income tax) R5 million (March 2019: profit R176 million, 
  including gain on disposal of R63 million)
- Net asset value per share 889.0 cents (March 2019: 871.5 cents)

The majority of the financial year was highlighted by the continued uncertainty imposed on the global markets
by the US/China trade dispute and the effect thereof on global growth expectations. The world economy which
was cyclically cooling down into the back end of 2019 elicited central bank responses of stimulating
economies via lowering interest rates and quantitative easing. With dovish central banks as a backstop, risk
appetite returned and equity markets reached new record highs at the end of 2019 and into the beginning of
2020. The first quarter of 2020 however delivered to the world a black swan event in the form of Covid-19.
Once the ramifications of this globally spreading pandemic became apparent to the world, the markets went
into freefall.

The South African landscape was arguably worse as the economy officially tumbled into recession, even
before the Covid-19 turmoil. Moody's eventually downgraded South Africa at the end of March and a new
era of raising funding as a non-investment grade issuer has begun.

The Group's ongoing(1) Segmental(2) headline earnings increased by 7% to R348 million with ongoing segmental
headline earnings per share increasing by 9% to 166.4 cents. The increase in ongoing segmental headline
earnings is due, in the main, to the increase in earnings from Citadel. Annuity earnings, comprising 94% of
total ongoing segmental earnings, increased by 10% year on year. Primarily due to the fact that the
comparative results included a material once off fee earned by Stenham that was not repeated as well as profits
from the Broking & Structuring business which was disposed of effective 1 October 2018, the results for this
year on a total all-inclusive Segmental HEPS were down by 24%. For information on the Divisional
Segmental Results please refer to the full commentary relating to the provisional financial results, which is
included in the Reviewed Condensed Consolidated Provisional Financial Statements which are available for
viewing on the Company's website at http://www.peregrine.co.za.

The continued strategic focus on growing annuity revenue streams continues to reap rewards in a challenging
operating environment, which includes a weak local economy and subdued market sentiment. As the Covid-
19 lockdown reaches its later stages, the economic and social impacts are starting to come to the fore. Whilst
uncertainty prevails as to how this crisis will play out to finality, we are still a long way from returning to
normal. Fiscally, before the Covid-19 crisis South Africa was in a difficult situation, so the ability to create
space for stimulus remains highly limited as business confidence has slumped to an all-time low.

The next six to twelve months are likely to remain a volatile time in the markets as the world continues to
battle this pandemic.

Dividend

As advised in the joint firm intention announcement, one of the provisions applicable to the offer is that a 
termination event will occur if Peregrine declare and/or pay any distribution prior to the offer being 
implemented and a written notice is delivered to the Company by, inter alia, the offerors in respect of the 
offer. Accordingly, the directors have resolved not to declare a final dividend for the financial year ended 
31 March 2020.

Going concern considerations in light of the Covid-19 pandemic

Whilst it seems likely at this point that the travel and tourism, entertainment, automotive, oil and gas, and
health industries will be most affected due to disruptions in supply and demand, the Group has no
concentrated focus on any of these industries and its investments and assets under management are 
well-diversified.

The Group has been classified as essential services by the government during the Covid-19 outbreak and has
been able to continue to operate as business as usual. The businesses were successful in establishing a 
work-from-home policy at no significant additional financial costs.

Management of the underlying operating segments have reassessed and, where appropriate, updated budgets
for the year ending 31 March 2021 given the current economic conditions as a result of Covid-19 and will
continuously assess the impact on a monthly basis. The results of the revised budgets show no material
indication of going concern or cash flow concerns. The directors are therefore satisfied that the Group has
adequate resources to continue in business for the foreseeable future.

Events subsequent to 31 March 2020

The directors have considered all available information at their disposal, including the potential effects of the
Covid-19 pandemic as discussed above, and are not aware of any other significant matters or circumstances
arising since the end of this reporting period and up to the date of this announcement, which would
significantly affect the financial position of the Group or the results of its operations. Covid-19 is a developing
situation with no measurable financial effect and as of the date of these reviewed condensed consolidated
provisional financial statements, the assessment of this situation will need continued attention and will evolve
over time, and as such no adjustment has been made in these reviewed condensed consolidated provisional
financial statements as a result.

For and on behalf of the board

Robert Katz                                                  Sean Melnick
CEO & CFO                                                    Chairman

23 June 2020

Footnotes
(1) Ongoing Segmental headline earnings excludes, in the prior period, the ad hoc performance fee of
R58 million (GBP3 million) and the headline earnings relating to the disposal of Broking & Structuring business
of R77 million.

(2) It needs to be noted that there are small differences between IFRS and Segmental earnings. Annexures
disclosing IFRS and Segmental earnings and the reconciliation between them are available on the Company's
website http://www.peregrine.co.za.

For further information

The full commentary relating to the financial results is included in the Reviewed Condensed Consolidated
Provisional Financial Statements for the year ended 31 March 2020, which contains the unmodified review
conclusion expressed by Deloitte & Touche, and is available for viewing on the Company's website at
http://www.peregrine.co.za and on the JSE website at:

https://senspdf.jse.co.za/documents/2020/jse/isse/PGR/FY2020.pdf

This short-form announcement is the responsibility of the directors. It is only a summary of the information
contained in the full announcement and does not contain full or complete details. Any investment decision
should be based on the full announcement published on the Company's website as well as the JSE's website,
copies of which may be requested by email at pere@peregrine.co.za at no cost.

Company Secretary and registered office: 
Peregrine Management Services Proprietary Limited, 1 Park Lane (Entrance Wierda Rd West), 
Wierda Valley, Sandton, 2196, South Africa 
(PO Box 650361, Benmore, 2010), 
Telephone: +27 11 722 7400 
Fax: +27 11 722 7410

Directors: 
SA Melnick (Non-executive Chairman); 
RE Katz (CEO & CFO); 
AP Moller (Executive);
LN Harris (Lead independent non-executive); 
P Goetsch (Non-executive); 
S Sithole *; 
S Stein *; 
B Tlhabanelo *
*Independent non-executive

Transfer Secretaries:
Computershare Investor Services

Joint Sponsor:
Java Capital

 
Joint Independent Sponsor:
Deloitte & Touche Sponsor Services (Pty) Ltd

Date: 23-06-2020 07:05:00
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