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Provisional Reviewed Summarised Annual Consolidated Financial Statements for the Year Ended 30 September 2020
Indequity Group Limited
Registration number: 1998/015883/06
Incorporated in the Republic of South Africa
Share code: IDQ ISIN: ZAE000016606
(“Indequity” or “the Group” or “the Company”)
SHORT FORM ANNOUNCEMENT: PROVISIONAL REVIEWED SUMMARISED ANNUAL CONSOLIDATED
FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 SEPTEMBER 2020
HIGHLIGHTS
Change 30 September 2020 30 September 2019
R’000 R’000
Total income 3.2% 68 750 66 589
Profit before taxation 18.7% 18 034 15 187
Cents Cents
Capital distribution per share (53.6%) 13.78 29.72
Basic earnings per share 27.2% 122.69 96.47
Headline earnings per share 26.4% 122.65 97.01
COMMENTS ON RESULTS
The 2020 financial year proved to be a challenging year for the Group due to the COVID-19 pandemic and the
related economic recession experienced in South Africa. The weak state of the economy negatively impacted the
Group in several ways, but particularly in relation to its premium growth. This is reflected in the decrease in the
growth in gross written premium from 7.5% in 2019 to 5.0% in the current year.
As the Group focuses mainly on personal lines insurance, a reduction in claims due to the lockdown in April and
May 2020 contributed positively to the year’s profit before tax compared to the prior year. Furthermore, in the
year the Group disposed of all its equity investments in order to improve cash availability and reduce exposure
to market fluctuations. The conversion of foreign currency denominated cash resulted in foreign exchange gains.
In the current year, the impact of the foreign exchange gains amounted to R1 070 000.
The above ensured that profit after tax increased by 15.9% in comparison to the previous financial year. The
difference of 10.9% between gross written premium growth and profit after tax growth, was largely due to the
abovementioned reduction in claims and the realised foreign currency gain.
In addition to the above, further share repurchases made by the Group in terms of its share repurchase program
reduced the weighted average number of shares outstanding at year-end by 8.9%, which contributed to growth
of 26.4% in headline earnings per share.
CONCLUSION
Although the Group’s results showed a gratifying increase in the current year, the lower growth rate in turnover
is a clear indicator of continued difficult trading conditions. The Group is cognisant that the unique circumstances
that contributed to growth in earnings in the current year are not expected to be repeated in future years, and
a prudent approach to strategic business decisions is therefore called for.
PROSPECTS
The insurance industry in South Africa remains exceedingly competitive and the economic climate is desperately
demanding. Achieving growth targets and delivering superior results are therefore expected to remain
challenging.
SUBSEQUENT EVENTS
There were no material adjusting or non-adjusting events of which the directors are aware subsequent to the
reporting date.
CAPITAL REDUCTION OR DIVIDEND
Shareholders are referred to the:
- Firm Intention Announcement released on SENS on 24 August 2020 (and using the terms defined therein
unless otherwise stated) regarding the Ordinary Share Scheme, the General Offer (which will be implemented
only if the Ordinary Share Scheme fails), the Delisting of the Ordinary Shares from the JSE, the A Class
Preference Share Scheme, and the B Class Preference Share Scheme;
- the Distribution of Circular and Notices of General and Schemes meetings released on SENS on 7 October
2020; and
- the Circular to shareholders,
and further thereto are advised hereby that the board of directors of Indequity (“Board”) has considered the
proposed Schemes and subsequent Delisting, and in light thereof, has decided that capital preservation is of
utmost importance. Accordingly, no capital distribution or dividend has been declared for the year ended
30 September 2020.
In the prior corresponding period, the Board declared a capital distribution out of share premium of 13.78 cents
per Indequity Ordinary Share and 2.29 cents per Indequity A Class Preference Share.
SHORT FORM ANNOUNCEMENT
The content of this short form announcement is the responsibility of the directors. Shareholders are advised
that this short form announcement represents a summary of the information contained in the full long form
announcement which is available at https://senspdf.jse.co.za/documents/2020/jse/isse/idq/ye20.pdf and also
published on the Company’s website at http://www.indequity.com/documents. Any investment decisions by
investors and/or shareholders should be based on a consideration of the full announcement as a whole and
investors and shareholders are encouraged to review the full announcement, which is available as detailed
herein.
Copies of the full announcement may also be requested at the Company’s registered office or the office of the
sponsor, Merchantec Capital, at no charge, during office hours. Any investment decision should be based on the
full announcement released on SENS and published on the Company’s website.
The information in this announcement has been extracted from the Condensed Annual Consolidated Financial
Statements, and the short-form announcement itself has not been reviewed or audited by the Company's
auditors. The Reviewed Condensed Annual Consolidated Financial Statements for the year ended 30 September
2020 have been reviewed by the Group’s auditors, KPMG Inc. who expressed an unmodified audit opinion
thereon (the Audit Report). The Audit Report includes the communication of key audit matters which are
disclosed on pages 5 to 10 of the Condensed Annual Consolidated Financial Statements, available on the
Company’s website.
Directors: AV van Jaarsveldt* (British), LJ van Rensburg, G Williamson*, JF Zwarts*, TE Vorster (* independent
non-executive)
Company secretary: W du Preez
Transfer secretary: Link Market Services South Africa Proprietary Limited
Registered address: First Floor, Cascade House, Constantia Office Park, cnr 14 th Avenue and Hendrik Potgieter
Road, Constantia Kloof, Johannesburg, 1709
Postal address: PO Box 5433, Weltevredenpark, 1715
Telephone: (+2711) 475-0816
Fax: (+2711) 475-0877
Website: www.indequity.com
Sponsor: Merchantec Capital
3 November 2020
Date: 03-11-2020 10:00:00
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