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Audited Condensed Consolidated Results for the year ended 31 December 2012
MMG MICROmega - Audited Financial Statements For The Year Ended 31 December 2012
MICROmega Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/003821/06)
Share code MMG ISIN ZAE000034435
("MICROmega" or "the Group")
AUDITED CONDENSED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31 DECEMBER 2012
Decrease In Revenue -4%
Increase In Basic earnings Per Share 70%
Increase In Headline earnings Per Share 59%
Increase In Net Asset Value Per Share 2%
SUMMARISED GROUP STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
year year
ended ended
31 December 31 December
. 2012 2011
Restated
R(?000) R(?000)
Revenue 746 030ÿ 775 483
Revenue from continuing operations 694 907 561 477
Revenue from discontinued operations 51 123 214 036
Cost of sales (473 937) (520 318)
Gross profit 272 093 255 165
Gross profit from continuing operations 264 497 208 905
Gross profit from discontinued operations 7 596 46 260
Other income 9 694 7 940
Distribution expenses (4 481) (6 429)
Administration expenses (263 619) (246 701)
Results from operations 13 687 9 975
Results from continuing operations 5 410 36 757
Results from discontinued operations 8 277 (26 782)
Finance income 6 754 5 731
Finance cost (6 074) (7 076)
Net finance cost 680 (1 345)
Share of loss of equity accounted associates 2 060 (628)
Profit before taxation 16 427 8 002
Profit before taxation from continuing operations 10 694 35 830
Profit / (loss) before taxation from discontinued
operations 5 733 (27 828)
Taxation expense (7 753) 3ÿ413
Profit for the year 8 674 11 415
Profit from continuing operations 3 757 31 901
Loss from discontinued operations 4 917 (20 486)
Other comprehensive income:
Foreign currency translation differences 99 (4)
Revaluation of property (2 320) 8 214
Realisation of revaluation reserve - 90
Income tax on other comprehensive income 432 (1 299)
Other comprehensive income for the year (1 789) 7 001
Total comprehensive income for the year 6 885 18 416
Profit attributable to:
Owners of the company 11 603 6 964
Non-controlling interests (2 929) 4 451
Profit for the year 8 674 11 415
Total comprehensive income attributable to:
Owners of the company 10 758 10 105
Non-controlling interests (3 873) 8 311
Total comprehensive income for the year 6 885 18 416
Reconciliation of headline earnings:
Profit attributable to ordinary shareholders 11 603 6 964
Profit on disposal of property,
plant and equipment (235) 872
Profit on disposal of intangible assets - (1ÿ073)
Impairment of intangible assets 18 684 15ÿ291
Impairment of assets classified as held for sale - 1 251
Profit on disposal of investments in subsidiaries (6 893) (6ÿ361)
Impairment of loans receivable 5 778 -
Impairment of investments in associates 230 -
Impairment of property, plant and equipment 271 -
Impairment of other investments 1 080 2 679
Headline earnings 30 518 19 623
Earnings per share
Headline earnings per share (cents) 32.58 20.50
Basic earnings per share (cents) 12.39 7.27
Diluted earnings per share (cents) 12.24 7.20
Continuing operations
Basic earnings per share (cents) 7.14 28.66
Diluted earnings per share (cents) 7.06 28.39
Weighted average number of shares (000?s) 93 660 95 736
Diluted weighted average number of shares (000?s) 94 835 96 674
Total number of shares in issue (000?s) 92 765 94 294
SUMMARISED STATEMENT OF FINANCIAL POSITION
Audited Audited Audited
as at as at as at
31 December 31 December 1 January
2012 2011 2011
Restated Restated
R(000) R(000) R(000)
ASSETS
Non-current assets 237 998 272 305 262 828
Property, plant and equipment 143 910 147 033 141 332
Intangible assets 48 471 67 421 62 902
Investments in associates 27ÿ 2 038 2 476
Other investments 163 1 573 6 695
Loans receivable 2 188 23 606 24 677
Deferred tax assets 43 239 30 634 24 746
Current assets 240 493 244 156 242 036
Inventories 2 542 43 793 51 631
Retirement benefit surplus 1 881 21 381 26 844
Trade and other receivables 109 725 134 467 113 330
Current portion of loans receivable 18 618 13 539 3 539
Cash and other investments 107 727 23 742 20 963
Income tax receivable - 642 1 043
Non-current assets classified as
held for sale - 6 592 24 686
TOTAL ASSETS 478 491ÿ 516 461 504 864
EQUITY AND LIABILITIES
EQUITY
Share capital and share premium 179 169 187 022 190 797
Non-distributable reserves 14 834 16 653 15 888
Retained earnings 95 392 83 014 76 802
Total equity attributable to owners
of the company 289 395 286 689 283 487
Non-controlling interests 18 654 24 303 16 189
Total equity 308 049 310 992 299 676
LIABILITIES
Non-current liabilities 69 835 76 480 69 877
Borrowings 55 960 65 192 56 576
Deferred tax liabilities 13 875 11 288 13 301
Current liabilities 100 607 128 989 135 311
Bank overdraft - 9 065 11 844
Current portion of borrowings 12 901 14 418 31 886
Trade and other payables 80 369 99 066 82 286
Current portion of deferred vendor
payments 534 534 789
Provisions 5 904 5 906 8 506
Income tax payable 899 - -
Total liabilities 170 442 205 469 205 188
TOTAL EQUITY AND LIABILITIES 478 491 516 461 504 864
Net asset value per share (cents) 311.97 304.04 293.88
Net tangible asset value per share (cents) 259.71 232.54 228.68
SUMMARISED GROUP STATEMENT OF CASH FLOWS
Audited Audited
year year
ended ended
31 December 31 December
2012 2011
Restated
R(000) R(000)
Cash generated by operating activities 70 621 45 848
Movement in working capital 9 725 (14 559)
Finance income 6 754 5 731
Finance costs (6 074) (7 076)
Taxation paid (15 798) (13 759)
Net cash inflows from operating activities 65 228 16 185
Cash outflow from investing activities
Expenditure to maintain operating capacity
Property, plant and equipment acquired (14 230) (17 485)
Intangible assets acquired (446) -
Proceeds on disposals of property, plant and equipment 3 996 5 364
Proceeds on disposals of intangible assets - 1 247
Proceeds on disposals of non-current assets held 6 592 16ÿ356
For sale
Expenditure for expansion
Acquisition of subsidiaries 1 -
Disposal of subsidiaries 46 442 16095
Acquisition of non-controlling interests - (2 957)
Internally generated intangible assets (7 376) (20 885)
Proceeds on disposal of investments (90) 6 524
Loans receivable granted - (8003)
Loans receivable repaid 12 066 2 884
Net cash used in investing activities 46 955 (860)
Cash flows from financing activities
Treasury shares repurchased (8 466) (3 810)
Dividends paid to non-controlling interests (1 406) (1 298)
Borrowings (repaid)/raised (9 261) (4ÿ404)
Deferred vendor payments repaid - (255)
Net cash generated by financing activities (19 133) (9 767)
Increase / (decrease) in cash and cash equivalents 93 050 5ÿ558
Cash and other investments at the beginning of
the year 14 677 9 119
Cash and other investments at the end of the year 107 727 14 677
SUMMARISED GROUP STATEMENT OF CHANGES IN EQUITY
Share Share Revalu- Foreign Deal Share Retained
capital premium ation currency diffe- based earnings
reserve transla- rences payme- / (Accum
tion reserve nt re -ulated
reserve serve loss)
R('000) R('000) R('000) R('000) R('000) R('000) R('000)
Balance at 1 965 189 832 9 360 33 1 000 4 017 78 280
January 2011
previously stated
Impact of - - - - - 1 478 (1 478)
Correction of prior
Period error
Balance at 1 965ÿ 189 832 9 360 33 1 000 5 495 76 802
January 2011
restated
Total comprehens-
ive income for
The year
Profit for the - - - - - - 6 964
year
Other comprehens- - - 1 739 (4) - - 1 406
ive income
Foreign currency - - - (4) - - -
translation diff-
erences
Revaluation - - 3 055 - - - -
of property
Realisation of - - (1 316) - - - 1 406
Revaluation reserve
Total comprehens- - - 1 739 (4) - - 8 370
ive income for
the year
Contributions by (22) (3 753) - - - 930 -
and distributions
to owners
Treasury shares (22) (3 788) - - - - -
purchased
Share-based - 35 - - - 930 -
payment transact-
IFRS 3 Business - - - - - - -
combinations
Dividends paid by - - - - - - -
subsidiary company
to non-controlling
interests
Changes in owner- - - - - - (1 900) (2 158)
ship interests in
subsidiaries
Acquisitions on - - - - - (970) (2 158)
non-controlling
interests without
a change in control
Total transact- (22) (3 753) - - - (970) (2 158)
ions with owners
Balance at 31
December 2011 943 186 079 11 099 29 1 000 4 525 83 014
Balance at 1 943 186 079 11 099 29 1 000 4 525 83 014
January 2012
Total comprehens-
ive income for
The year
Profit for the - - - - - - 11 603
year
Other comprehens- - - (1 129) 99 - - 185
ive income
Foreign currency - - - 99 - - -
translation diff-
erences
Revaluation - - (944) - - - -
of property
Realisation of - - (185) - - - (185)
Revaluation reserve
Total comprehens- - - (1 129) 99 - - 11 788
ive income for
the year
Contributions by (15) (7 838) - - - (789) 361
and distributions
to owners
Treasury shares (15) (8 451) - - - - -
purchased
Share-based - 613 - - - (789) 361
payment transact-
IFRS 3 Business - - - - - - -
combinations
Dividends paid by - - - - - - -
subsidiary company
to non-controlling
interests
Changes in owner- - - - - - - 229
ship interests in
subsidiaries
Acquisitions on - - - - - - 229
non-controlling
interests without
a change in control
Total transact- (15) (7 838) - - - (789) 590
ions with owners
Balance at 31
December 2012 928 178 241 9 970 128 1000 3 736 95 392
SUMMARISED GROUP STATEMENT OF CHANGES IN EQUITY CONTINUED
Total Non-con- Total
trolling Equity
interests
R('000) R('000) R('000)
Balance at 1 283 487 16 189 299 676
January 2011
Total comprehens-
ive income for
The year
Profit for the 6 964 4 451 11 415
year
Other comprehens- 3 141 3 860 7 001
ive income
Foreign currency (4) - (4)
translation diff-
erences
Revaluation 3 055 3 860 6 915
of property
Realisation of 90 - 90
revaluation reserve
Total comprehens- 10 105 8 311 18 416
ive income for
the year
Contributions by (2 845) (1 298) (4ÿ143)
and distributions
to owners
Treasury shares (3 810) - (3 810)
purchased
Share-based 965 - 965
payment transact-
Dividends paid by - (1 298) (1 298)
subsidiary company
to non-controlling
interests
Changes in owner- (4 058) 1ÿ101 (2 957)
ship interests in
subsidiaries
Acquisitions on (4 058) 1ÿ101 (2 957)
non-controlling
interests without
a change in control
Total transact- (6 903) (197) (7 100)
ions with owners
Balance at 31 286 689 24 303 310 992
December 2011
Balance at 1 286 689 24 303 310 992
January 2012
Total comprehens-
ive income for
The year
Profit for the 11 603 (2 929) 8 674
year
Other comprehens- (845) (944) (1 789)
ive income
Foreign currency 99 - 99
translation diff-
erences
Revaluation (944) (944) (1 888)
of property
Realisation of - - -
revaluation reserve
Total comprehens- 10 758 (3 873) 6 885
ive income for
the year
Contributions by (8 281) (1 406) (9 687)
and distributions
to owners
Treasury shares (8 466) - (8 466)
purchased
Share-based 185 - 185
payment transact-
Dividends paid by - (1 406) (1 406)
subsidiary company
to non-controlling
interests
Changes in owner- 229 (370) (141)
ship interests in
subsidiaries
Acquisitions on 229 (370) (141)
non-controlling
interests without
a change in control
Total transact- (8 052) (1 776) (9 828)
ions with owners
Balance at 31 289 395 18 654 308 049
December 2012
NOTES TO THE GROUP FINANCIAL INFORMATION
1. Basis of preparation
These audited condensed consolidated annual financial statements have been prepared under the supervision of DJ Case (CA) SA, 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 AC 500 standards as issued by the Accounting
Practices Board, the Listing Requirements of the JSE Limited and the
requirements of the South African Companies Act 71 of 2008, as amended.
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.
All financial information presented in South African Rand has been rounded
to the nearest thousand.
The annual financial statements were audited by the company?s auditors, Nexia SAB & T, and their unqualified audit report is available for inspection at the company?s registered office.
2. Prior period error
In the prior years the group had incorrectly accounted for an employee loyalty scheme. Share options in the equity of a subsidiary were granted to the subsidiary's employees in 2008 and vested over a 3 year period ended August 2011. Due to various conditions that were present upon final vesting and exercising the company purchased the shares from the employees. The group incorrectly recognised the eliminating transaction as an addition to goodwill when the company increased it's investment in subsidiary as opposed to an acquisition of non-controlling interests. Furthermore no amounts had been recognised to profit or loss over the period of vesting of the share options as required by IFRS 2. This has been rectified with retrospective share based payment expenses being allocated to profit or loss and the correction of the eliminating transaction. .
All share options in terms of the loyalty scheme were exercised in 2011 and there are no further amendments that are required.
The cumulative correction of the error in 2011 and 2010 comparative figures are as follows:
December 2010 December 2011 2011 December
2010 Restate- 2010 Move- Restate- 2011
Previously ment Restated ment ment Restated
due to due to
R('000) R('000) R('000) R('000) R('000) R('000)
Statement of
financial
position
Intangible
Assets 62 902 - 62 902 7 416 (2 897) 67 421
Equity
Share capital
And share
Premium 190 797 - 190 797 (3 775) - 187 022
Non-distribu-
Table reserves 14 410 1 478 15 888 2 243 (1 478) 16 653
Retained
earnings 78 280 (1 478) 76 802 7 631 (1 419) 83 014
Statement of
comprehensive
income
Profit for
the year 7 808 (633) 7 175 11 837 (422) 11 415
Total compre-
hensive income
for the year 19 363 (633) 18 730 18 838 (422) 18 416
Earnings per
share (cents) 5.86 (0.65) 5.21 7.72 (0.45) 7.27
Diluted earnings
per share (cents) 5.83 (0.65) 5.18 7.64 (0.44) 7.20
Headline earnings
per share (cents) 16.46 (0.66) 15.80 20.94 (0.44) 20.50
3.Discontinued Operations
The group continues to classify Kolbenco Proprietary Limited and Automobile Radio Dealers Association 1989 Proprietary Limited as discontinued operations, as the process to realise assets is still ongoing.
As at the end of April 2012 the group disposed of the business and trading assets and liabilities of Deltec Power Distributors Proprietary Limited.
The operations of the Deltec segment has been reclassified in the comparative figures from continued operations to discontinued operations due to the sale of the business and its assets and liabilities during the current financial year.
4. Segment information
SEGMENT REVIEW
Audited Audited
year year
ended ended
31 December 31 December
2012 2011
R('000) R('000)
NOSA
External sales 228 689 155 756
MECS Africa
External sales 296 056 255 929
Deltec Power Distributors
External sales 47 732 129ÿ538
Sebata Municipal Solutions
External sales 106 690 100ÿ440
Turrito
External sales 20 640 9 746
MICROmega Securities
External sales 38 453 40 423
Automotive Disposal
External sales 3 390 84 498
Holdings Company and consolidation eliminations
External sale 6 785 4 747
Internal sales (2 405) (5 594)
Total revenue 746 030 775 483
SEGMENT PROFIT / (LOSS)
Audited Audited
year year
ended ended
31 December 31 December
2012 2011
R('000) R('000)
NOSA 28 486 22 763
MECS Africa 188 7 056
Deltec Power Distributors 9 251 8 652
Sebata Municipal Solutions 5 760 8 707
Turrito (6 419) (1 474)
MICROmega Securities 9 225 9 593
Automotive Disposal (4 327) (29 637)
Holdings Company and consolidation eliminations (30 561) (18 696)
Total profit 11 603 6 964
SEGMENT ASSETS
Audited Audited
as at as at
31 December 31 December
2012 2011
R('000) R('000)
NOSA 95 561 72 321
MECS Africa 39 240 62 596
Deltec Power Distributors 39 837 61 230
Sebata Municipal Solutions 65 517 73 496
Turrito 8 335 6 920
MICROmega Securities 56 636 60 383
Automotive Disposal 21 485 62 433
Holdings Company and consolidation eliminations 151 880 117 082
Total assets 478 491 516 461
5. Commentary
Commentary
Shareholders are advised that whilst the year on year growth in earnings
appears satisfactory, 80% of the headline earnings were earned in the
first half of 2012.
By order of the Board
28 March 2013
Directors: DC King (Executive Chairman); IG Morris (Chief Executive Officer); DSE
Carlisle (Managing Director); RB Dick (Financial Director); A Swann (Lead
Independent Non-Executive Director); RC Lewin (Independent Non-Executive
Director); P Duvenhage (Non-Executive Director)
Company Secretary: Acorim Proprietary Limited
Auditors: Nexia SAB & T
Transfer Secretaries: Computershare Investor Services Proprietary Limited
Sponsor: Java Capital
Attorneys: Routledge Modise Attorneys
Date: 28/03/2013 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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