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Unaudited condensed consolidated interim results for the six months ended 30 June 2013
MICROmega Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/003821/06)
JSE share code MMG
ISIN: ZAE000034435
(“MICROmega” or “the Company” or “the Group”)
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30
JUNE 2013
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
R(‘000) R(‘000) R(‘000)
Revenue 372 264 385 241 746 030
Revenue from continuing operations 372 264 385 241 694 907
Revenue from discontinued operations - - 51 123
Cost of sales (232 950) (243 212) (473 937)
Gross profit 139 314 142 029 272 093
Gross profit from continuing operations 139 314 142 029 264 497
Gross profit from discontinued operations - - 7 596
Other income 16 750 9 471 9 694
Distribution expenses (2 167) (2 009) (4 481)
Administrative expenses (119 800) (107 999) (263 619)
Results from operations 34 097 41 492 13 687
Results from continuing operations 27 018 41 492 5 410
Results from discontinued operations 7 079 - 8 277
Finance income 2 199 2 445 6 754
Finance cost (3 073) (3 681) (6 074)
Net finance (cost) / income (874) (1 236) 680
Share of profit / (loss) in equity
accounted associates 123 (201) 2 060
Profit before tax 33 346 40 055 16 427
Profit before tax from continuing
operations 26 269 40 055 10 694
Profit before tax from discontinued
operations 7 077 - 5 733
Taxation expense (7 693) (10 560) (7 753)
Profit for the period 25 653 29 495 8 674
Profit from continuing operations 18 550 29 495 3 757
Profit from discontinued operations 7 103 - 4 917
Other comprehensive income:
Foreign currency translation differences 718 3 99
Revaluation of property, plant and
equipment - - (2 320)
Income tax on other comprehensive income - - 432
Other comprehensive income for the period 718 3 (1 789)
Total comprehensive income for the period 26 371 29 498 6 885
Profit attributable to:
Owners of the company 24 062 28 483 11 603
Non-controlling interests 1 591 1 012 (2 929)
Profit for the period 25 653 29 495 8 674
Total comprehensive income attributable
to:
Owners of the company 24 780 28 486 10 758
Non-controlling interests 1 591 1 012 (3 873)
Total comprehensive income for the period 26 371 29 498 6 885
Reconciliation of headline earnings:
Profit attributable to owners of the
company 24 062 28 483 11 603
Profit on disposal of property,
plant and equipment (30) (257) (235)
Impairment of property plant and
equipment - - 271
Impairment of intangible assets - 3 300 18 684
Profit on disposal of business - (7 289) -
Profit on disposal of investments in
subsidiaries - - (6 893)
Impairment of other investment - - 1 080
Impairment of loan receivable - - 5 778
Impairment of investment in associates - - 230
Headline earnings 24 032 24 237 30 518
Earnings per share:
Headline earnings per share (cents) 26.02 25.72 32.58
Basic earnings per share (cents) 26.05 30.23 12.39
Diluted earnings per share (cents) 25.73 29.64 12.24
Continuing operations
Basic earnings per share (cents) 18.36 30.23 7.14
Diluted earnings per share (cents) 18.13 29.64 7.06
Weighted average number of shares (000) 92 351 94 217 93 660
Diluted weighted average shares in
issue (000) 93 525 96 094 94 835
Total number of shares in issue (000) 90 850 94 006 92 765
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
R(‘000) R(‘000) R(‘000)
ASSETS
Non-current assets 231 102 270 515 237 998
Property, plant and equipment 124 049 145 188 143 910
Intangible assets 52 241 70 979 48 471
Investments in associates 161 1 777 27
Other investments 163 1 582 163
Loans receivable 4 339 16 174 2 188
Deferred tax assets 50 149 34 815 43 239
Current assets 257 399 245 532 240 493
Inventories 3 218 6 863 2 542
Retirement benefit surplus - 21 381 1 881
Trade and other receivables 119 915 166 710 109 725
Current portion of loans receivable 14 399 14 734 18 618
Cash and cash equivalents 119 867 35 764 107 727
Non-current assets classified as held
for sale - 80 -
Total assets 488 501 516 047 478 491
EQUITY AND LIABILITIES
EQUITY 319 301 339 708 308 049
Share capital and premium 174 265 186 321 179 169
Non-distributable reserves 15 408 16 575 14 834
Retained earnings 119 902 111 775 95 392
Total equity attributable to owners
of the company 309 575 314 671 289 395
Non-controlling interests 9 726 25 037 18 654
LIABILITIES
Non-current liabilities 68 061 72 072 69 835
Borrowings 59 272 60 328 55 960
Deferred tax liabilities 8 789 11 744 13 875
Current liabilities 101 139 104 267 100 607
Bank overdraft 23 821 - -
Current portion of borrowings 2 679 14 910 12 901
Trade and other payables 63 977 76 152 80 369
Deferred vendor payments 366 534 534
Provisions - 5 906 5 904
Taxation payable 10 296 6 765 899
TOTAL EQUITIES AND LIABILITIES 488 501 516 047 478 491
Net asset value per share (cents) 340.75 334.74 311.97
Net tangible asset value per share
(cents) 283.25 259.23 259.71
CONDENSED GROUP STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
R(‘000) R(‘000) R(‘000)
Cash flows from operating activities
Cash generated by operating activities 32 923 41 582 70 621
Movement in working capital (26 540) (14 254) 9 725
Finance income 2 199 2 445 6 754
Finance cost (3 073) (3 681) (6 074)
Tax paid (10 067) (6 877) (15 798)
Net cash inflows from operating
Activities (4 558) 19 215 65 228
Cash flows from investing activities
Expenditure to maintain operating capacity
Property, plant and equipment acquired (8 323) (6 275) (14 230)
Intangible assets acquired - - (446)
Proceeds on disposals of property, plant
and equipment 23 939 1 961 3 996
Proceeds on disposals of assets
classified as held for sale - 6 512 6 592
Acquisition of non-controlling interest
without a change in control (228) - -
Expenditure for expansion
Acquisition of subsidiaries - - 1
Disposal of business / subsidiaries - 4 942 46 442
Internally generated intangible assets (4 187) (7 693) (7 376)
Acquisition of investments - (9) (90)
Loans receivable repaid 3 949 6 297 12 066
Net cash inflows from investing
activities 15 150 5 735 46 955
Cash flows from financing activities
Treasury shares repurchased (4 904) (701) (8 466)
Dividends paid to non-controlling
interests (10 291) (278) (1 406)
Borrowings repaid (7 078) (2 884) (9 261)
Net cash outflows from financing
activities (22 273) (3 863) (19 133)
Increase in cash and cash equivalents (11 681) 21 087 93 050
Cash and cash equivalents at beginning
of the period 107 727 14 677 14 677
Cash and cash equivalents at end of
the period 96 046 35 764 107 727
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Share Share Share– Revalu- Foreign Deal
capital premium based ation currency differ-
payment reserve transla- ence
reserve tion reserve
reserve
R(‘000) R(‘000) R(‘000) R(‘000) R(‘000) R(‘000)
Balance as at 1 January
2012 943 186 079 4 525 11 099 29 1000
Total comprehensive
income for the period
Profit for the period - - - - - -
Other comprehensive income - - - (62) 3 -
Foreign currency translation
Differences - - - - 3 -
Realisation of revaluation
reserve - - - (62) - -
Total comprehensive income
for the period - - - (62) 3 -
Transactions with owners
recorded directly in equity (3) (698) (19) - - -
Treasury shares purchased (3) (698) - - - -
Share-based payment
transactions - - (19) - - -
Total transactions with
owners (3) (698) (19) - - -
Balance as at 30 June
2012 940 185 381 4 506 11 037 32 1 000
Total comprehensive
income for the period
Loss for the period - - - - - -
Other comprehensive income - - - (1 067) 96 -
Foreign currency translation
differences - - - - 96 -
Realisation of revaluation
Reserve - - - (123) - -
Total comprehensive income
for the period - - - (1 067) 96 -
Transactions with owners
recorded directly in equity (12) (7 140) (770) - - -
Treasury shares purchased (12) (7 753) - - - -
Share-based payment
transactions - 613 (770) - - -
Dividends paid to non-
controlling interests - - - - - -
Changes in ownership interests
in subsidiaries that do not
result in a loss of control
Total transactions with
owners (12) (7 140) (770) - - -
Balance as at 31 December
2012 928 178 241 3 736 9 970 128 1 000
Total comprehensive
income for the period
Profit for the period - - - - - -
Other comprehensive income - - - (73) 718 -
Foreign currency translation
differences - - - - 718 -
Realisation of revaluation
reserve - - - (73) - -
Total comprehensive income
for the period - - - (73) 718 -
Transactions with owners
recorded directly in equity (19) (4 885) (71) - - -
Treasury shares purchased (19) (4 885) - - - -
Share-based payment
transactions - - (71) - - -
Dividends paid to non-
controlling interests - - - - - -
Total transactions
with owners (19) (4 885) (71) - - -
Balance as at 30 June 2013 909 173 356 3 665 9 897 846 1 000
Non-
Retained earnings Total controlling Total
interests equity
R(‘000) R(‘000) R(‘000) R(‘000)
Balance as at 1 January
2012 83 014 286 689 24 303 310 992
Total comprehensive
income for the period
Profit for the period 28 483 28 483 1012 29 495
Other comprehensive income 62 3 - 3
Foreign currency translation
differences - 3 - 3
Realisation of revaluation
reserve 62 - - -
Total comprehensive income
for the period 28 545 28 486 1012 29 498
Transactions with owners
recorded directly in equity 216 (504) (278) (782)
Treasury shares purchased - (701) - (701)
Share-based payment
transactions 216 197 - 197
Dividends paid to non-
Controlling interest - - (278) (278)
Total transactions with owners 216 (504) (278) (782)
Balance as at 30 June
2012 111 775 314 671 25 037 339 708
Total comprehensive
income for the period
Loss for the period (16 880) (16 880) (3 941) (20 821)
Other comprehensive income 123 (848) (944) (1 792)
Foreign currency translation
differences - 96 - 96
Realisation of revaluation
reserve 123 - - -
Total comprehensive income
for the period (16 757) (17 728) (4 885) (22 613)
Transactions with owners
recorded directly in equity 145 (7 777) (1 128) (8 905)
Treasury shares purchased - (7 765) - (7 765)
Share-based payment
transactions 145 (12) - (12)
Dividends paid to non-
controlling interests - - (1 128) (1 128)
Changes in ownership interests
in subsidiaries that do not
result in a loss of control
Business combinations 229 229 (370) (141)
Total transactions
with owners 374 (7 548) (1 498) (9 046)
Balance as at 31 December
2011 95 392 289 395 18 654 308 049
Total comprehensive
income for the period
Profit for the period 24 062 24 062 1 591 25 653
Other comprehensive income 73 718 - 718
Foreign currency translation
differences - 718 - 718
Realisation of revaluation
reserve 73 - - -
Total comprehensive income
for the period 24 135 24 780 1 591 26 371
Transactions with owners
recorded directly in equity 147 (4 828) (10 291) (15 119)
Treasury shares purchased - (4 904) - (4 904)
Share-based payment
transactions 147 76 - 76
Dividends paid to non-
controlling interests - - (10 291) (10 291)
Changes in ownership interests
in subsidiaries:
Acquisitions on non-controlling
interests without a change
in control 228 228 (228) -
Total transactions with
owners 375 (4 600) (10 519) (15 119)
Balance as at 30 June
2013 119 902 309 575 9 726 319 301
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation
These condensed consolidated interim financial statements are
prepared in accordance with the framework concepts and the recognition and
measurement criteria of International Financial Reporting Standards (IFRS),
its interpretations adopted by the International Accounting Standards Board
(IASB), the presentation and the 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 Financial Reporting Standards Council, the Listings Requirements of
the JSE Limited and the requirements of the South African Companies Act 71 of
2008. The condensed consolidated financial results are prepared in
accordance with the going concern principle under the historical cost basis
as modified by the fair value accounting of certain assets and liabilities
where required or permitted by IFRS. The financial statements have been
prepared under the supervision of Russell Dick, CA(SA), the financial
director.
2. Significant accounting policies
These financial results have not been audited/reviewed by the company’s
auditors, Nexia SAB&T Inc. These unaudited condensed consolidated interim
financial statements have been prepared using accounting policies that comply
with International Financial Reporting Standards (“IFRS”). The accounting
policies used are consistent with those used in the annual financial
statements for the year ended 31 December 2012.
3.Segment information
SEGMENT REVENUE
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
R(‘000) R(‘000) R(‘000)
NOSA
-external sales 120 562 103 771 228 689
MECS Africa
-external sales 163 495 153 050 296 056
Deltec Power Distributors
-external sales - 47 732 47 732
Sebata Municipal Solutions
-external sales 54 015 47 262 106 690
MICROmega Securities
-external sales 17 808 19 908 38 453
Holding company and consolidation
elimination
-external sales 22 907 12 527 30 815
-internal sales (6 523) 991 (2 405)
Total revenue 372 264 385 241 746 030
SEGMENT PROFIT/(LOSS)
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
R(‘000) R(‘000) R(‘000)
NOSA 22 719 17 874 28 486
MECS Africa 6 078 5 840 188
Deltec Power Distributors (59) 9 690 9 251
Sebata Municipal Solutions 5 346 5 656 5 760
MICROmega Securities 2 387 4 814 9 225
Holdings company and consolidation (12 409) (15 391) (41 307)
Total profit 24 062 28 483 11 603
SEGMENT ASSETS
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2013 2012 2012
R(‘000) R(‘000) R(‘000)
NOSA 159 898 92 748 95 561
MECS Africa 68 584 72 980 39 240
Deltec Power Distributors 86 41 855 39 837
Sebata Municipal Solutions 71 576 86 448 65 517
MICROmega Securities 64 465 66 551 56 636
Holding company and consolidation 123 892 155 465 181 700
Total assets 488 501 516 047 478 491
4.Commentary
This is the last time that the Group will report to shareholders
under the negative impact of the now resolved long-standing dispute
between SARS and our executive chairman. There is a heightened
energy and excitement throughout the Group that augurs well for all
stakeholders- and in particular shareholders. The Group has changed
its financial year-end to March and will report on a 15 month period
to March 2014. The 6 months period from October 2013 to March 2014
will be included in the year-end results and will be the first
period to fully benefit from this new beginning for all Group
companies.
The results for the period under review were achieved under
difficult circumstances that have now fallen away. Revenue was
slightly below that of the 6 months of the prior year however strict
comparison is not appropriate. The Deltec business was disposed of
last year but contributed R48 million of revenue to June 2012.
Additionally, NOSA benefited from approximately R8 million in once-
off revenue in the period to June 2012 due to a major upgrade at one
of its clients. Consequently, a truer measure is that the core
sustainable operations reflected revenue growth of 13% when compared
to the same period last year. Attributable profit is 18% down when
compared to the prior period however, after stripping out the
abovementioned impact of Deltec and NOSA, the growth in attributable
profit would have been 43% compared to the prior period.
5. Capitalisation issue
It has not been the Group’s policy to pay dividends during the
recent prolonged period of uncertainty. This policy is being
reviewed and a further announcement will be made in this regard when
we publish our results for the financial year-end.
In the interim and to reward our long-standing shareholders for
their patience and perseverance, the board has resolved to issue and
allot fully paid ordinary shares of 1 cent each (“ordinary shares”)
as a capitalisation issue to MICROmega shareholders pro rata to
their current shareholding at a ratio of 14 (fourteen) ordinary
shares for every 100 (one hundred)ordinary shares held. Where a
shareholder’s entitlement to the capitalisation issue gives rise to
a fraction of a share, such fraction will be rounded up to the
nearest whole number, where the fraction is greater than 0.5 and
rounded down to the nearest whole number where the fractions is less
than 0.5.
The capitalisation issue may have tax implications on shareholders,
both South African and non-resident and shareholders are advised to
obtain appropriate advice from their professional advisors in this
regard.
The capitalisation issue will be made from MICROmega’s share
premium.
The salient dates of the capitalisation issue are as follows:
2013
Last day to trade: Friday 18 October
List date: Monday 21 October
Record date: Friday 25 October
Issue date, being the date on which shareholder accounts with CSDP’s
or brokers are credited or the issue of new share certificates is
effected: Monday 28 October
Share certificates may not be dematerialised or rematerialised
between Monday, 21 October 2013 and Friday, 25 October 2013, both
dates inclusive. The above dates and times are subject to change.
Any changes will be released on SENS.
Shareholders are advised of the following additional information:
- there are no Secondary Tax on companies credits being utilised;
- the issued share capital of MICROmega is 100 802 677 ordinary
shares of 1 cent each; and
- MICROmega’s tax reference number is 9457323849.
- The closing price of MICROmega shares on Friday, 22 September
2013 was R7.74 per share.
6. Prospects
The profitability for the 2012 financial year was significantly
skewed in favour of the first 6 months to June 2012. We are
presently compiling latest forecasts for the balance of the year
and, while it is premature to give specific guidance at this time,
the board is comfortable with the current performance of the group
companies.
By order of the board
Johannesburg
30 September 2013
Directors:
D C King (Executive Chairman)
I G Morris (Chief Executive Officer)
R D Dick (Financial Director)
D S E Carlisle (Executive Director)
A B Swan (Lead Independent Non-executive)
R C Lewin (Independent Non-executive)
P H Duvenhage (Independent Non-executive)
There were no changes to the board during the year.
Company Secretary: Acorim
Auditors: Nexia SAB&T
Transfer Secretaries: Computershare Investor Services
Sponsor: Java Capital
Attorneys: Eversheds
Date: 30/09/2013 05:47:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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