Reviewed Consolidated Financial Results for the year ended 28 February 2021 and Updated Opinion and Recommendation
Value Group Limited
(Incorporated in the Republic of South Africa)
Registration number 1997/002203/06
ISIN number: ZAE000016507 Share code: VLE
REVIEWED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2021
AND UPDATED OPINION AND RECOMMENDATION STATEMENT IN RESPECT OF THE SCHEME
OF ARRANGEMENT AND GENERAL OFFER
C D Stein* (Chairman),
S D Gottschalk (CEO),
C L Sack, N M Phosa*,
V W Mcobothi*,
Sponsor: Investec Bank Limited
Fluidrock Advisory (Pty) Ltd
Services (Pty) Ltd
49 Brewery Road,
PO Box 778,
Tel: (011) 570 2000
Revenue UP 2% R2,94bn
Headline earnings per share UP 11% 102,4 cents
Earnings per share UP 12% 99,9 cents
Net asset value per share up 11% 627,9 cents
Cash generated by operations UP 4% R621m
Value Group Limited and its subsidiaries ("the Group") provide a comprehensive range of tailored logistical solutions
throughout southern Africa. On 1 May 2021, the Group celebrated its 40th year anniversary milestone since its early
beginnings of providing truck rental services.
The Group has had to navigate its way as a result of challenges brought about by the poor economic climate and the
imposition of the initial highly restrictive lockdowns in order to contain the spread of the COVID-19 pandemic.
In particular, the implementation of level 5 lockdown from 27 March 2020 to 30 April 2020, resulted in a material
reduction in revenue. The Group was designated as an essential service provider and was permitted to provide services
to a limited number of customers supplying essential goods. Accordingly, April 2020 revenue was 32,6 % below that of
April 2019. As lockdown restrictions eased to level 4 in May 2020, more of the Group's customers were permitted to
trade which resulted in a material increase in revenue compared to April 2020. As a result, revenue in May 2020 was
5.3% less than that in May 2019. From 1 June 2020 onwards, with the shift to less restrictive lockdown levels, the
Group eventually returned to normal operational capacity.
Despite these challenges, the Group (and particularly the retail logistics division) has been successful in growing
its customer base by on boarding a number of new customers during this unprecedented time. In addition, the Group
experienced an unprecedented extended peak period in December 2020 and into January 2021 where volumes were
extraordinarily high resulting from the availability of products that were previously unavailable during the
restrictive lockdown periods and thereafter. This tempered the reduction in revenue during the lockdown periods with
revenue increasing by 2% from R2,88 billion to R2,94 billion.
The combination of the extended peak period, together with improvements in trading and various cost saving
initiatives, contributed to gross profit margins being maintained at 33% with gross profit increasing by R24,5 million
to R972,3 million. In addition, these measures resulted in substantial savings with operating expenses increasing by
only 2,9% or R21 million to R739,8 million. The effect of reduced other income and increased operating costs were
insufficient to improve operating profits which reduced by 3% from R257,7 million to R249,5 million.
Net profit before tax however increased mainly due to a R14,4 million net finance cost reduction which arose due to
reductions in asset base funding costs and IFRS 16 (lease) funding costs. The Group also benefitted from a reduction
in the effective tax rate from 24,3% to 23,3%.
The board is thus pleased to advise that the Group produced an 11% increase in headline earnings for the year ended
February 2021 from 92,2 cents to 102,4 cents per share.
Increases in goods and vehicles for sale inventory levels in addition to increases in receivable balances from growth
in the customer base have been offset by increased payables. In addition, continued focus on working capital
management yielded improved cash flow results. Notwithstanding the financial difficulties that affected many
businesses during this extraordinary period, collections were better than expected. In addition, proceeds on disposal
of rental assets were very high with disposals generating R76,6 million. Consequently, cash generated by operations
increased by 4% to R620,9 million.
OFFER TO MINORITY SHAREHOLDERS AND POSSIBLE DELISTING FROM THE JSE
Shareholders are referred to the Firm Intention Announcement released on SENS on Friday, 26 February 2021 and the
Offer Circular distributed to Shareholders on Thursday 25 March 2021 pertaining to:
- An offer by Value Group Ltd to Eligible Shareholders to repurchase by way of a Scheme of Arrangement ("the scheme")
all their shares in Value Group Ltd for a cash consideration of R6.75 per share ("the Scheme Consideration"); and
- Separate but concurrently with the scheme, a conditional General Offer by Value Group Ltd to Eligible Shareholders
("the general offer"), to repurchase all of their shares in Value Group Ltd for a cash consideration of R6.75 per
share ("the General Offer Consideration"). The general offer will only be implemented should the scheme fail; and
- The subsequent delisting of all of Value Group Ltd's Ordinary Shares from the JSE, in terms of paragraph 1.17(b) of
the Listings Requirements, pursuant to the implementation of the scheme or, if the scheme fails, pursuant to the
implementation of the general offer subject to the required delisting resolution being approved.
Shareholders are reminded of the salient dates and times as contained in the SENS announcement dated 25 March 2021 and
the Offer Circular. The salient dates for Shareholders to vote on the above-mentioned corporate actions are as
Last day to trade to be eligible to vote Tuesday, 18 May 2021
Record date Friday, 21 May 2021
General meeting convened electronically Thursday, 27 May 2021
UPDATED OPINION AND RECOMMENDATION
The Independent Expert, Mazars Corporate Finance (Pty) Ltd, has considered the contents of these Reviewed Results and
have confirmed there is no change to its opinion that the Scheme Consideration and General Offer Consideration are
fair and reasonable to Eligible Shareholders. The full substance of the Independent Expert's report in connection with
the scheme and general offer is set out in the Offer Circular.
The Independent Board, taking into account the above confirmation and the contents of the Reviewed Results, has
unanimously confirmed there is no change to their opinion that the terms and conditions of the scheme and the general
offer are fair and reasonable to Shareholders and, accordingly, unanimously recommends that Shareholders vote in
favour of the Resolutions to be tabled at the general meeting.
No final dividend has been recommended or declared due to the pending cash outflows required to fund the offer to
ABOUT THIS ANNOUNCEMENT
This short form announcement is the responsibility of the directors and is only a summary of the information in the
full announcement. The full announcement was released on SENS at
https://senspdf.jse.co.za/documents/2021/jse/isse/VLE/YE21.pdf on 4 May 2021 and is also available on the Group's
website at www.value.co.za. The Group's auditor, SVG has reviewed the full announcement. Copies of the full
announcement and the unmodified review report of the auditors are available for inspection and may be requested at the
company's registered office, at no charge, during office hours. Any investment decision must be based on the full
For and on behalf of the board
C D Stein S D Gottschalk
Chairman Chief Executive Officer
4 May 2021
Date: 04-05-2021 01:26:00
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