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Unaudited Condensed Consolidated Interim Results for the Six Months Ended 30 September 2014
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 SEPTEMBER 2014
CONDENSED GROUP STATEMENT OF PROFIT AND LOSS
Unaudited Unaudited Audited
6 months 6 months 15 months
ended ended ended
30 September 30 June 31 March
2014 2013 2014
R’000 R’000 R’000
Revenue 484 165 372 264 907 532
Cost of sales (253 555) (232 950) (549 241)
Gross profit 230 610 139 314 358 291
Other income 8 677 16 750 119 237
Distribution expenses (1 851) (2 167) (5 692)
Administration expenses (162 000) (119 800) (304 337)
Results from operations 75 436 34 097 167 499
Finance income 2 660 2 199 6 450
Finance cost (1 179) (3 073) (5 026)
Share of profit of equity accounted associate 649 123 1 392
Profit before tax 77 566 33 346 170 315
Tax expense (20 278) (7 693) (33 051)
Profit for the period 57 288 25 653 137 264
Profit from continuing operations 57 288 18 550 137 264
Profit from discontinued operations - 7 103 -
Profit attributable to:
Owners of the parent 48 821 24 062 134 135
Non-controlling interest 8 467 1 591 3 129
CONDENSED GROUP STATEMENT OF OTHER COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months 15 months
ended ended ended
30 September 30 June 31 March
2014 2013 2014
R’000 R’000 R’000
Profit for the period 57 288 25 653 137 264
Other comprehensive income:
Foreign currency translation differences 4 817 718 1 175
Total comprehensive income for the period 62 105 26 371 138 439
Total comprehensive income attributable to:
Owners of the parent 53 638 24 780 135 310
Non-controlling interests 8 467 1 591 3 129
Reconciliation of headline earnings:
Profit attributable to owners of the parent 48 821 24 062 134 135
(Profit)/Loss on disposal of property, plant and equipment (5) (30) 24
Loss on disposal of investments in subsidiaries - - 653
Impairment of loans receivable - - 1 405
Reversal of impairment of loans receivable - - (3 504)
Bargain purchase on acquisition - - (68 023)
Headline earnings 48 816 24 032 64 690
Earnings per share:
Headline earnings per share (cents) 45.96 22.57 62.91
Basic earnings per share (cents) 45.96 22.60 130.44
Diluted earnings per share (cents) 45.06 22.35 128.37
Weighted average number of shares (000’s) 106 214 106 463 102 830
Diluted weighted average number of shares (000’s) 108 342 107 637 104 493
Total number of shares in issue (000’s) 110 311 104 962 105 184
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
As at As at As at
30 September 30 June 31 March
2014 2013 2014
R’000 R’000 R’000
ASSETS
Non-current assets 497 463 231 102 414 081
Property, plant and equipment 52 867 124 049 47 718
Intangible assets 369 674 52 241 305 760
Investments in associates 11 528 161 10 879
Other investments 208 163 208
Loans receivable 3 779 4 339 9 167
Deferred tax assets 59 407 50 149 40 349
Current assets 415 988 257 399 279 842
Inventories 19 506 3 218 13 292
Trade and other receivables 224 512 119 915 142 581
Tax receivable 7 033 - 7 455
Loans receivables 12 656 14 399 7 668
Cash and cash equivalents 152 281 119 867 108 846
TOTAL ASSETS 913 451 488 501 693 923
EQUITY AND LIABILITIES
EQUITY 601 920 319 301 504 269
Share capital and share premium 257 349 174 265 207 666
Non-distributable reserves 11 327 15 408 5 590
Retained earnings 268 548 119 902 240 863
Non-controlling interests 64 696 9 726 50 150
LIABILITIES
Non-current liabilities 89 504 68 061 57 227
Borrowings 13 245 59 272 11 491
Deferred vendor payments 18 484 - 3 484
Deferred tax liabilities 57 775 8 789 42 252
Current liabilities 220 027 101 139 132 427
Trade and other payables 169 915 63 977 117 364
Bank overdraft - 23 821 -
Borrowings 3 204 2 679 4 351
Tax payable 16 656 10 296 6 863
Deferred vendor payments 32 252 366 3 849
TOTAL EQUITY AND LIABILITIES 913 451 488 501 693 923
Net asset value per share (cents) 487.42 294.94 431.74
Net tangible asset value per share (cents) 152.30 245.17 141.05
CONDENSED GROUP STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
6 months 6 months 15 months
ended ended ended
30 September 30 June 31 March
2014 2013 2014
R’000 R’000 R’000
Cash flows from operating activities 71 133 21 982 74 129
Movement in working capital 19 641 (26 540) (7 249)
Cash flows from investing activities (74 643) 15 150 (46 837)
Cash flows from financing activities 27 304 (22 273) (18 924)
Increase/(Decrease) in cash and cash equivalents 43 435 (11 681) 1 119
Cash and cash equivalents at the beginning of the period 108 846 107 727 107 727
Cash and cash equivalents at the end of the period 152 281 96 046 108 846
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Share Share Revaluation Foreign Deal difference Share Retained Total Non-controlling Total equity
capital premium reserve currency reserve based earnings interest
translation payment
reserve reserve
R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000
Balance at 1 January 2013 928 178 241 9 970 128 1 000 3 736 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 - - 73 718 - 718
Foreign currency translation differences - - - 718 - - - 718 - 718
Realisation of revaluation reserve through depreciation - - (73) - - - 73 - - -
Transactions with owners recorded directly in
equity (19) (4 885) - - - (71) 147 (4 828) (10 291) (15 119)
Treasury shares purchased (19) (4 885) - - - - - (4 904) - (4 904)
Share based payment transactions - - - - - (71) 147 76 - 76
Dividends paid to non-controlling interest - - - - - - - - (10 291) (10 291)
Changes in ownership interest in subsidiaries
Acquisitions on non-controlling interest without a change
in control - - - - - - 228 228 (228) -
Balance at 30 June 2013 909 173 356 9 897 846 1 000 3 665 119 902 309 575 9 726 319 301
Total comprehensive income for the period
Profit for the period - - - - - - 110 073 110 073 1 538 111 611
Other comprehensive income - - (2) 457 - - 2 457 - 457
Foreign currency translation differences - - - 457 - - - 457 - 457
Realisation of revaluation reserve through depreciation - - (2) - - - 2 - - -
Transactions with owners recorded directly in
equity 143 33 258 (9 406) - - (867) 11 394 34 522 39 261 73 783
Capitalisation issue 124 (124) - - - - - - - -
Treasury shares purchased (26) (7 213) - - - - - (7 239) - (7 239)
Share based payment transactions 3 2 503 - - - (867) 1 988 3 627 - 3 627
Dividends paid to non-controlling interest - - - - - - - - (275) (275)
Acquisition of subsidiaries 42 38 092 - - - - - 38 134 52 433 90 567
Derecognition of subsidiary - - (9 406) - - - 9 406 - (12 897) (12 897)
Changes in ownership interest in subsidiaries
Acquisitions on non-controlling interest without a change
in control - - - - - - (508) (508) (375) (883)
Balance at 31 March 2014 1 052 206 614 489 1 303 1 000 2 798 240 863 454 119 50 150 504 269
Total comprehensive income for the period
Profit for the period - - - - - - 48 821 48 821 8 467 57 288
Other comprehensive income - - (32) 4 817 - - 32 4 817 - 4 817
Foreign currency translation differences - - - 4 817 - - - 4 817 - 4 817
Realisation of revaluation reserve through depreciation - - (32) - - - 32 - - -
Transactions with owners recorded directly in
equity 51 49 632 - - - 952 (21 168) 29 467 6 079 35 546
Treasury shares purchased (5) (6 707) - - - - - (6 712) - (6 712)
Treasury shares sold 48 49 237 - - - - - 49 285 - 49 285
Share based payment transactions 1 359 - - - 952 - 1 312 - 1 312
Acquisition of subsidiaries 7 6 743 - - - - - 6 750 6 699 13 449
Dividends paid - - - - - - (21 168) (21 168) - (21 168)
Dividends paid to non-controlling interest - - - - - - - - (620) (620)
Balance at 30 September 2014 1 103 256 246 457 6 120 1 000 3 750 268 548 537 224 64 696 601 920
NOTES TO THE GROUP FINANCIAL INFORMATION
1. Basis of preparation
These condensed consolidated 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 SAICA Financial Reporting Guides as issued
by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by Financial Reporting
Standards Council, IAS 34 – Interim Financial Reporting, the Listings Requirements of the JSE Limited and the requirements
of the Companies Act, 2008 (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.
The condensed consolidated financial results have been prepared under the supervision of Russell Dick, CA(SA), the
Financial Director, and have not been reviewed by the Company’s auditors.
All financial information presented in South African Rand has been rounded to the nearest thousand.
2. Significant accounting policies
These condensed consolidated 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
audited annual financial statements for the year ended 31 March 2014.
3. Segment information
Unaudited Unaudited Audited
6 months 6 months 15 months
ended ended ended
30 September 30 June 31 March
2014 2013 2014
R’000 R’000 R’000
SEGMENT REVENUE
NOSA 158 816 120 562 330 426
MECS 124 477 163 495 340 431
IT Group 184 394 54 015 205 215
Securities Group 16 840 17 808 33 162
Holdings and consolidated
- Internal (3 084) (6 523) (15 610)
- External 2 722 22 907 13 908
Total revenue 484 165 372 264 907 532
SEGMENT PROFIT / (LOSS)
NOSA 32 600 22 719 59 303
MECS 766 6 078 11 988
IT Group 32 877 5 346 24 701
Securities Group 1 410 2 387 1 750
Holdings and consolidated (18 832) (12 468) 36 393
Total profit 48 821 24 062 134 135
SEGMENT ASSETS
NOSA 405 181 159 898 358 769
MECS 73 125 68 584 67 605
IT Group 272 923 71 576 183 433
Securities Group 75 231 64 465 61 426
Holdings and consolidated 86 991 123 978 22 690
Total assets 913 451 488 501 693 923
4. Business combinations
Mubesko Africa (Pty) Ltd
On 1 June 2014, the Group acquired a 50% interest in Mubesko Africa (Pty) Ltd for a consideration of R27 million. Goodwill
to the value of R20.3 million was accounted for. The amount of net assets acquired amounted to R13.4 million and a non-
controlling interest of R6.7 million was recognised.
Action Training Academy (Pty) Ltd & Action Training Consulting (Pty) Ltd
With effect from 1 September 2014, the Group acquired 100% interest in Action Trading Academy (Pty) Ltd & Action Trading
Consulting (Pty) Ltd for a consideration of R30 million. The amount of net assets acquired amounted to R3.0 million and
goodwill to the value of R26.9 million.
The fair value of assets acquired and liabilities assumed relating to the above business combinations are subject to change
should additional information become available within the 12 month re-measurement period from date of acquisition.
5. Subsequent events
No other significant events have occurred in the period between the reporting date and the date of this report.
6. Changes to the board of directors of MICROmega (“Board”)
There were no changes to the Board during the period under review.
7. Commentary on results
The Board is pleased that the strong growth in profitability that the Group delivered to shareholders in the last financial year
has carried forward into the first six months of this financial year with headline earnings per share having more than doubled
to 45.96 cents per share, when compared to the first six months of the prior year. It is also pleasing that the earnings growth
was fully translated into cash receipts. That is the ultimate test of the quality of any company’s earnings.
Due to the change in our year end the results are not directly comparable however what is clear is that, following on from the
commentary in our year end results, the Group continues to demonstrate that it is at the early stage of a rapid growth period.
We have reasonable visibility into the remainder of this year and anticipate further growth in the second half of the year
despite it including the seasonally low months of December and January.
By order of the Board
29 October 2014
Directors: DC King (Executive Chairman); IG Morris (Chief Executive Officer); RB Dick (Financial Director); DSE Carlisle
(Executive Director); AW Swann (Lead Independent Non-Executive Director); RC Lewin (Independent Non-Executive
Director); PH Duvenhage (Independent Non-Executive Director); GE Jacobs (Independent Non-Executive Director); DA
Di Siena (Independent Non-executive Director); TW King (Non-Executive Director)
Company Secretary: Acorim Proprietary Limited
Auditors: Nexia SAB&T
Transfer Secretaries: Computershare Investor Services Proprietary Limited
Sponsor: Merchantec Capital
Attorneys: Di Siena Inc
Date: 29/10/2014 01:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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