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Audited condensed consolidated financial statements for the year ended 30 April 2023
ELLIES HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 2007/007084/06
JSE share code: ELI
ISIN: ZAE000103081
("Ellies" or "the Company")
SHORT-FORM ANNOUNCEMENT - AUDITED CONDENSED CONSOLIDATED FINANCIAL
RESULTS FOR THE YEAR ENDED 30 APRIL 2023
2023 AT A GLANCE
REVENUE decreased by 7,7% to R993,0 million (F2022: R1 076,4
million)
EBITDA LOSS increased by 26,6% to a loss of R46,9 million (F2022:
loss of R37,1 million)
LOSS AFTER TAX ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
increased by 94,7% to a loss of R85,0 million (F2022: loss of
R43,7 million)
TOTAL COMPREHENSIVE LOSS increased by 95,9% to a loss of R85,4
million (F2022: loss of R43,6 million)
LOSS PER SHARE increased by 77,2% to a loss of 10,56 cents (F2022:
loss of 5,96 cents)
HEADLINE LOSS PER SHARE increased by 51,2% to a headline loss of
10,78 cents (F2022: loss of 7,13 cents)
NET ASSET VALUE PER SHARE decreased by 63,9% to 6,0 cents (F2022:
16,6 cents)
NET TANGIBLE ASSET VALUE PER SHARE decreased by 63,9% to 6,0 cents
(F2022: 16,6 cents)
No dividend declared
OVERVIEW OF RESULTS
The Ellies Group, as reported in the trading statement, posted
disappointing results for the year ended 30 April 2023. Revenue
decreased by 7,7% on the prior year. Demand for Ellies' satellite
installation and a portion of its retail offering came under
pressure due to difficulties facing the consumer, with rising
inflation and interest rates. The Group saw an increase in demand
for its products related to power due to the continual load
shedding, being UPS backup solutions, generators, solar and surge
protection products. Unfortunately, the constrained working
capital limited the Group's ability to capitalise on the surge in
demand.
The Group's EBITDA loss increased from R37,1 million to a loss for
the current year of R46,9 million. The loss, as reported, includes
once-off separation costs as a result of the restructuring of the
business of R18 million. Ellies expects to see the benefits of the
restructuring in the form of reduced operating costs, estimated at
R30 million per annum.
Depreciation was flat year-on-year with the prior financial year
amounting to R19,1 million compared to the current year's R19,6
million. Interest, however, increased from R14,7 million to R21,3
million, a consequence of the increase in the prime rate as well
as an increase in the Group's average borrowings over the year.
The prior year results also included a profit from discontinued
operations of R14 million compared to the current year of only
R1,9 million. The profit is attributable to the distribution from
the liquidation of Ellies Industries as well as the deregistration
of Botjheng Water. Both these matters have now been concluded and
are not expected to have any further impact on the results of the
Group.
Deferred tax assets were created in previous years in respect of
assessable losses and other temporary differences and are
reflected in the Statement of Financial Position at R36,6 million.
Based on the forecasts, the Group expects to utilise this asset in
the foreseeable future, usually three years. The directors decided
not to raise a further tax asset in the amount of R20,4 million as
the realisation of the asset would likely extend beyond three
years. In the prior year, the impact of the recognition of the
temporary differences improved the loss by R13,1 million.
The loss after tax for the current year was R85 million compared
to R43,7 million for the prior year, an increase of 94,7%. The
loss per share increased from 5,96 to 10,78 for the current year,
with net asset value per share decreasing by 64,1% to 6,0 cents
per share.
As reported in the trading statement released on 25 July 2023,
Ellies is happy to report that the restructuring is now
substantially complete, and the Group has begun to see the
benefits of a reduced operating expense base. The second objective
was to diversify away from the traditional satellite business
toward a smart home infrastructure business, including
comprehensive solutions for alternative energy, water storage,
connectivity and the connected home.
The Group is finalising an agreement with its bankers both for an
extension to the Group's term loan currently due on 30 April 2024
as well as an increased working capital facility in order to
capitalise on the increased demand in its power-related products
noted above. Management expects this to be finalised during August
2023.
As reported to the market on 1 February 2023, the Group has signed
an agreement to acquire Bundu Power. To finance the initial
payment to the sellers of Bundu Power, the Group plans to
undertake a fully underwritten renounceable rights offer, aiming
to raise R120 million at an issue price of 7 cents per share. This
acquisition represents a pivotal step in the Group's strategy to
expand its offering into alternative power, and is further
expected to bolster the balance sheet and enhance earnings.
The Board and management believe that with the acquisition of
Bundu Power, the expected increase in working capital facilities
and benefits from the restructuring, the Group will be well
positioned for the next year.
Any forward-looking statements have not been reviewed or reported
on by the Group's auditors, BDO South Africa Incorporated.
SHORT-FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the
directors. It is only a summary of the information contained in
the audited Annual Financial Statements and does not contain full
or complete details.
These condensed consolidated financial results have not been
audited by the Company's auditors but are derived from the audited
Annual Financial Statements.
Any investment decision by investors and/or shareholders should be
based on the published audited Annual Financial Statements.
The Annual Financial Statements including the audit opinion of the
external auditor, BDO South Africa Incorporated, which sets out
the key audit matters and the basis for its unmodified opinion
with an emphasis of matter relating to the Group's going concern,
are available on the Company's website at
https://ellies.co.za/AFS2023.pdf and the JSE link is
https://senspdf.jse.co.za/documents/2023/JSE/ISSE/ELI/AFS23.pdf.
The Annual Financial Statements are also available at the
Company's registered office (for inspection, at no charge, during
office hours on any business day) and at the offices of the
sponsor, Java Capital, from Tuesday, 1 August 2023 to Tuesday,
8 August 2023, both days inclusive. Copies of the Annual Financial
Statements may be requested by email to
investorrelations@ellies.co.za.
1 August 2023
ELLIES HOLDINGS LIMITED
DIRECTORS: Mr Timothy Fearnhead (Chairperson)*, Dr Shaun
Prithivirajh (CEO), Mr Guy Moretti (CFO), Mr Darren Kramer*,
Mr Martin Kuscus*, Mr Edick Lehapa*, Ms Maya Makanjee*,
Ms Sedzani Mudau*, Mr Francois Olivier*, Mr Edward Raff*
* Independent Non-Executive
PREPARER: Prepared by Mr Jacques Liebenberg (BCompt (Hons),
AGA(SA)), Group Reporting Financial Manager, under the supervision
of Mr Guy Moretti (BCompt (Hons), CA(SA)), Financial Director and
CFO
COMPANY SECRETARY: Acorim (Pty) Ltd
REGISTERED OFFICE: Brooklyn Place, 3 Centex Close, Kramerville,
Sandton, 2090 (PO Box 57076, Springfield, 2137)
SPONSOR: Java Capital, 6th Floor, 1 Park Lane, Wierda Valley,
Sandton, 2196
AUDITORS: BDO South Africa Incorporated
TRANSFER SECRETARIES: Computershare Investor Services (Pty) Ltd
http://www.ellies.co.za
Date: 01-08-2023 05:36:00
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