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Unaudited Condensed Consolidated Interim Results for the Six Months Ended 30 September 2016
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 2016
UNAUDITED CONDENSED GROUP STATEMENT OF PROFIT AND LOSS
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2016 2015 2016
R’000 R’000 R’000
Revenue 697 106 564 372 1 193 921
Cost of sales (329 128) (288 670) (619 783)
Gross profit 367 978 275 702 574 138
Other net income/(expenses) 4 557 8 018 22 773
Distribution expenses (3 942) (2 634) (7 384)
Administration expenses (228 431) (174 755) (374 779)
Results from operations 140 162 106 331 214 748
Finance income 885 2 050 3 279
Finance cost (4 826) (840) (5 245)
Share of profit of equity accounted associate 881 762 1 811
Profit before tax 137 102 108 303 214 593
Tax expense (31 524) (30 595) (55 856)
Profit for the period 105 578 77 708 158 737
Profit attributable to:
Owners of the parent 84 859 69 067 145 433
Non-controlling interest 20 719 8 641 13 304
105 578 77 708 158 737
Attributable earnings per share (cents)
Basic 75.08 61.86 129.64
Diluted basic 73.55 60.98 126.07
Headline 74.80 61.81 123.43
Diluted headline 73.27 60.93 120.03
AUDITED CONDENSED GROUP STATEMENT OF OTHER COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months 12 months
Ended ended ended
30 September 30 September 31 March
2016 2015 2016
R’000 R’000 R’000
Profit for the period 105 578 77 708 158 737
Other comprehensive income:
Foreign currency translation differences 3 660 4 044 3 347
Total comprehensive income for the period 109 238 81 752 162 084
Total comprehensive income attributable to:
Owners of the parent 88 519 73 111 148 780
Non-controlling interest 20 719 8 641 13 304
109 238 81 752 162 084
Reconciliation of headline earnings:
Profit attributable to owners of the parent 84 859 69 067 145 433
Loss/(profit) on disposal of property, plant and equipment (324) (60) 116
Profit on disposal of investment in subsidiaries - - (7 365)
Loss on disposal of investments - - 283
Headline earnings 84 535 69 007 138 467
Weighted average number of shares (000s) 113 021 111 646 112 185
Diluted weighted average number of shares (000s) 115 379 113 254 115 360
Total number of shares in issue (000s) 113 439 112 034 112 833
UNAUDITED CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
As at As at As at
30 September 30 September 31 March
2016 2015 2016
R’000 R’000 R’000
ASSETS
Non-current assets 775 002 606 695 691 877
Property, plant and equipment 55 279 68 091 53 558
Intangible assets 661 478 480 554 581 276
Investments in associates 14 529 12 600 13 648
Other investments - 291 -
Other financial assets 175 704 5 063
Deferred tax assets 43 541 44 455 38 332
Current assets 515 615 410 989 440 440
Inventories 42 347 47 633 41 851
Trade and other receivables 368 926 257 214 300 563
Income tax receivable 6 750 4 375 6 575
Other financial assets 6 535 9 378 2 024
Cash and cash equivalents 91 057 92 389 89 427
TOTAL ASSETS 1 290 617 1 017 684 1 132 317
EQUITY AND LIABILITIES
EQUITY 825 669 685 426 766 508
Share capital and share premium 271 787 270 792 266 852
Other reserves 11 117 11 983 12 333
Retained earnings 448 083 333 103 411 651
Non-controlling interest 94 682 69 548 75 672
LIABILITIES
Non-current liabilities 105 142 73 667 103 991
Other financial liabilities 5 998 13 578 4 998
Deferred vendor payments 19 607 15 153 27 343
Deferred tax liabilities 79 537 44 936 71 650
Current liabilities 359 806 258 591 261 818
Trade and other payables 239 303 167 623 161 646
Other financial liabilities 3 210 4 201 3 347
Income tax payable 21 974 32 473 11 879
Deferred vendor payments 26 741 54 294 35 409
Bank overdraft 68 578 - 49 537
TOTAL LIABILITIES 464 948 332 258 365 809
TOTAL EQUITY AND LIABILITIES 1 290 617 1 017 684 1 132 317
Net asset value per share (cents) 644.39 549.72 624.20
Net tangible asset value per share (cents) 61.27 120.79 109.07
UNAUDITED CONDENSED GROUP STATEMENT OF CASH FLOW
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2016 2015 2016
R’000 R’000 R’000
Cash flow from operating activities excluding working capital changes 122 387 105 466 202 450
Movement in working capital 4 966 (33 696) (76 004)
Cash flow from investing activities (89 351) (45 558) (130 294)
Cash flow from financing activities (55 413) (81 708) (104 147)
Decrease in cash and cash equivalents (17 411) (55 496) (107 995)
Cash and cash equivalents at the beginning of the period 39 890 147 885 147 885
Cash and cash equivalents at the end of the period 22 479 92 389 39 980
UNAUDITED CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended Ended
30 September 30 September 31 March
2016 2015 2016
R’000 R’000 R’000
Balance at the beginning of the period 766 508 671 673 671 673
Profit for the period 105 578 77 708 158 737
Other comprehensive income 3 660 4 044 3 347
Transactions with owners, recorded directly in equity (49 656) (41 315) (41 665)
Changes in ownership interest in subsidiaries (421) (26 684) (25 584)
Balance at the end of the period 825 669 685 426 766 508
NOTES TO THE GROUP FINANCIAL INFORMATION
1. Basis of preparation
These condensed consolidated financial statements for the six months ended 30 September 2016 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 of South Africa (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.
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 IFRS and
are consistent with those used in the audited annual consolidated financial statements for the year ended 31 March 2016.
3. Segment information
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 September 30 September 31 March
2016 2015 2016
R’000 R’000 R’000
SEGMENT REVENUE
Occupational health and safety 287 826 223 554 452 594
Labour supply 74 225 99 197 217 726
Information technology 316 055 220 334 494 221
Financial services 29 364 20 739 46 821
Holdings and consolidated (10 364) 538 (17 441)
Total revenue 697 106 564 372 1 193 921
SEGMENT PROFIT / (LOSS)
Occupational health and safety 39 634 40 998 72 582
Labour supply 1 866 578 4 057
Information technology 54 401 34 588 87 184
Financial services 6 713 3 350 8 176
Holdings and consolidated (17 755) (10 447) (26 566)
Total profit 84 859 69 067 145 433
SEGMENT ASSETS
Occupational health and safety 448 967 377 349 406 843
Labour supply 41 717 45 459 59 535
Information technology 507 554 333 673 421 999
Financial services 18 609 56 107 52 048
Holdings and consolidated 273 770 205 096 191 892
Total assets 1 290 617 1 017 684 1 132 317
4. Corporate Governance and changes to the board of directors of MICROmega (“board”)
MICROmega has embraced the recommendations of the King III Report on governance and strives to provide reports to
shareholders that are timely, accurate, consistent and informative.
5. Subsequent events
No significant events have occurred in the period between the reporting date and the date of this report.
6. Commentary on results
The financial performance for the period under review is pleasing given the continuance of the poor economic conditions
referred to in the recently published annual report.
This economic malaise directly affected our health & safety businesses due to the ongoing training needs of our large corporate
clients, with both public and private sector declining for the first time in 10 years. This was solely due to reductions in
employment that have been witnessed across most business sectors over the last 2 years. This resultant decline in high margin
revenue was mitigated by our decision to add new products and services under our premium NOSA brand. Under the
circumstances, the overall modest decline in profitability for these businesses is acceptable for the period under review during
which the new opportunities had to be introduced and integrated. Going forward, we expect our health and safety group to
resume its historical growth pattern.
Our information technology businesses produced a growth in profitability of almost 60%. This performance would have been
even more impressive if the local government elections had not delayed the receipt of new business until after the close of the
reporting period. This particularly affected our proprietary software and our proprietary water technology businesses. There is
no indication that the rapid growth in profitability of our technology businesses will not continue in the foreseeable future.
Our financial services businesses are a relatively small contributor to group profitability however, they performed exceptionally
well with a growth in profitability of a little over 100%. This was mainly as a result of the financial market volatility caused by
international concerns around the global economy, Brexit and the USA elections.
Our labour supply business is a high value, low margin business that has experienced a managed slow-down in its business
due to our unwillingness to allocate further capital to this industry sector. Because of this reduction in activity, short-term
profitability grew by over 200% off a very low base and it remains a minor contributor to group profit.
By order of the board
3 November 2016
Directors: DC King (Executive Chairman); IG Morris (Chief Executive Officer); RB Dick (Financial Director); DSE Carlisle
(Executive Director); DA Di Siena (Independent Non–Executive Director); PH Duvenhage (Non-Executive Director); TW Hamill
(Non–Executive Director); GE Jacobs (Independent Non–Executive Director); RC Lewin (Non–Executive Director); and D
Passmore (Independent Non-Executive Director)
Company Secretary: RJ Viljoen
Auditors: Nexia SAB&T
Transfer Secretaries: Singular Systems Proprietary Limited
Sponsor: Merchantec Capital
Attorneys: Di Siena Attorneys
Note: No forward looking statements in this announcement have been reviewed or reported on by MICROmega’s auditors.
Date: 03/11/2016 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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