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ended 30 June 2011
MICROmega Holdings Limited
(incorporated in the Republic of South Africa)
Registration number 1998/003821/06
Share code MMG ISIN ZAE000034435
("MICROmega" or "the Company")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2011
Increase In Revenue 10%
Increase In Attributable Earnings Per Share 81%
Increase In Headline Earnings Per Share 79%
Increase In Net Asset Value Per Share 8%
Increase In Net Tangible Asset Value Per Share 10%
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2011 2010 2010
R(`000) R(`000) R(`000)
Revenue 359 809 326 993 682 314
Revenue from continuing operations 359 809 326 922 681 925
Revenue from discontinued operations - 71 389
Cost of sales (228 228) (219 836) (451 437)
Gross profit 131 521 107 157 230 877
Gross profit from continuing operations 131 521 107 229 239 496
Gross loss from discontinued operations - (72) (8 619)
Other income 1 678 1 310 7 037
Distribution expenses (3 264) (2 876) (6 068)
Administrative expenses (111 347) (95 096) (217 052)
Results from operations 18 588 10 495 14 794
Results from continuing operations 18 588 11 808 24 102
Results from discontinued operations - (1 313) (9 308)
Finance income 3 619 7 793 8 468
Finance cost (1 905) (5 269) (10 794)
Net finance income / (cost) 1 714 2 524 (2 326)
Share of loss in equity
accounted associates (630) (287) (724)
Profit before tax 19 672 12 732 11 744
Profit before tax from continuing
operations 19 672 14 598 22 510
Loss before tax from discontinued
operations - (1 866) (10 766)
Taxation expense (4 927) (3 748) (3 936)
Profit for the period 14 745 8 984 7 808
Profit from continuing operations 14 745 10 576 15 547
Loss from discontinued operations - (1 592) (7 739)
Other comprehensive income:
Foreign currency translation differences - 12 12
Revaluation of property, plant and
equipment 1 064 - 16 099
Realisation of revaluation reserve - (378) (49)
Income tax on other comprehensive income (298) 53 (4 507)
Other comprehensive income for the period 766 (313) 11 555
Total comprehensive income for the period 15 511 8 671 19 363
Profit attributable to:
Owners of the company 14 125 7 858 5 673
Non-controlling interests 620 1 126 2 135
Profit for the period 14 745 8 984 7 808
Total comprehensive income attributable
to:
Owners of the company 14 891 7 545 11 432
Non-controlling interests 620 1 126 7 931
Total comprehensive income for the period 15 511 8 671 19 363
Reconciliation of headline earnings:
Profit attributable to ordinary
shareholders 14 125 7 858 5 673
(Loss) / profit on disposal of property,
plant and equipment 157 (429) (25)
Impairment of property, plant and
equipment - - 2 520
Profit on disposal of intangible assets (1 073) - -
Impairment of goodwill and intangible
Assets - - 7 758
Headline earnings 13 209 7 429 15 926
Earnings per share:
Headline earnings per share (cents) 13.72 7.66 16.46
Basic earnings per share (cents) 14.67 8.10 5.86
Diluted earnings per share (cents) 14.58 8.06 5.83
Continuing operations
Basic earnings per share (cents) 14.67 9.75 13.85
Diluted earnings per share (cents) 14.58 9.69 13.78
Weighted average number of shares (000) 96 274 96 953 96 783
Diluted weighted average shares in
issue (000) 96 889 97 495 97 266
Total number of shares in issue (000) 96 061 96 948 96 462
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2011 2010 2010
R(`000) R(`000) R(`000)
ASSETS
Non-current assets 275 014 174 604 262 828
Property, plant and equipment 144 767 55 915 141 332
Intangible assets 66 770 66 468 62 902
Investments in associates 1 085 3 584 2 476
Other investments 6 650 6 693 6 695
Loans receivable 24 959 20 557 24 677
Deferred tax assets 30 783 21 387 24 746
Current assets 254 432 253 017 242 036
Inventories 58 741 55 559 51 631
Retirement benefit surplus 26 797 18 797 26 844
Trade and other receivables 122 835 124 563 113 330
Current portion of loans receivable 5 776 6 732 3 539
Cash and cash equivalents 16 551 18 946 20 963
Income tax receivable - - 1 043
Non-current assets classified as held
for sale 23 732 28 420 24 686
Total assets 529 446 427 621 504 864
EQUITY AND LIABILITIES
EQUITY 314 960 287 924 299 676
Share capital and premium 190 325 191 409 190 797
Non-distributable reserves 15 363 8 008 14 410
Retained earnings 92 463 80 198 78 280
Total equity attributable to owners
of the company 298 151 279 615 283 487
Non-controlling interests 16 809 8 309 16 189
LIABILITIES
Non-current liabilities 75 487 25 799 69 877
Borrowings 60 898 17 919 56 576
Deferred tax liabilities 14 589 7 880 13 301
Current liabilities 138 999 113 898 135 311
Bank overdraft 6 061 5 978 11 844
Current portion of borrowings 30 679 20 077 31 886
Trade and other payables 94 094 85 908 82 286
Deferred vendor payments 789 703 789
Provisions 6 391 312 8 506
Taxation payable 985 920 -
TOTAL EQUITIES AND LIABILITIES 529 446 427 621 504 864
Net asset value per share (cents) 310.38 288.42 293.88
Net tangible asset value per share
(cents) 240.87 219.86 228.68
CONDENSED GROUP STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2011 2010 2010
R(`000) R(`000) R(`000)
Cash flows from operating activities
Cash generated by operating activities 23 378 15 524 38 799
Movement in working capital (4 805) (11 093) 446
Finance income 3 619 7 793 8 468
Finance cost (1 905) (5 269) (10 794)
Tax paid (7 946) (9 046) (14 817)
Net cash inflows / (outflows) from
Operating activities 12 341 (2 091) 22 102
Cash flows from investing activities
Expenditure to maintain operating capacity
Property, plant and equipment acquired (8 294) (2 901) (68 820)
Intangible assets acquired - (16) (101)
Proceeds on disposals of property, plant
and equipment 736 1 098 1 528
Expenditure for expansion
Acquisition of subsidiaries - (318) (7 812)
Internally generated intangible assets (4 307) (5 290) (9 368)
Proceeds on investments sold 45 5 51
Loans receivable (granted) / repaid (1 758) 99 1 757
Net cash outflows from investing
activities (13 578) (7 323) (82 765)
Cash flows from financing activities
Treasury shares repurchased (507) (33) (644)
Dividends paid to non-controlling
interests - (580) (780)
Borrowings raised / (repaid) 3 115 (2 843) 45 537
Deferred vendor payments repaid - (168) (337)
Net cash inflows / (outflows) from
financing activities 2 608 (3 624) 43 776
Increase / (decrease) in cash and
cash equivalents 1 371 (13 038) (16 887)
Cash and cash equivalents at beginning
of the period 9 119 26 006 26 006
Cash and cash equivalents at end of
the period 10 490 12 968 9 119
GROUP STATEMENT OF CHANGES IN EQUITY
Share Share Share- Revalu- Foreign Deal
capital premium based ation currency differ-
payment reserve transla- ence
reserve tion reserve
reserve
R(`000) R(`000) R(`000) R(`000) R(`000) R(`000)
Balance as at 1 January
2010 970 190 470 3 191 3 984 21 1 000
Total comprehensive
income for the period
Profit for the period - - - - - -
Other comprehensive income - - - (325) 12 -
Foreign currency translation
differences - - - - 12 -
Realisation of revaluation
Reserve - - - (325) - -
Total comprehensive income
for the period - - - (325) 12 -
Transactions with owners
recorded directly in equity - (31) 125 - - -
Share-based payment
transactions - 2 125 - - -
Dividends paid to non-
controlling interests - - - - - -
Treasury shares purchased - (33) - - - -
Changes in ownership interests
in subsidiaries that do not
result in a loss of control
Business combinations - - - - - -
Total transactions with owners - (31) 125 - - -
Balance as at 30 June
2010 970 190 439 3 316 3 659 33 1 000
Total comprehensive
income for the period
Loss for the period - - - - - -
Other comprehensive income - - - 5 701 - -
Foreign currency translation
differences - - - - - -
Revaluation of property - - - 5 796 - -
Realisation of revaluation
reserve - - - (95) - -
Total comprehensive income
for the period - - - 5 701 - -
Transactions with owners
recorded directly in equity (5) (607) 701 - - -
Treasury shares purchased (5) (606) - - - -
Share-based payment
transactions - (1) 701 - - -
Dividends paid to non-
controlling interests - - - - - -
Changes in ownership interests
in subsidiaries that do not
result in a loss of control
Business combinations - - - - - -
Total transactions
with owners (5) (607) 701 - - -
Balance as at 31 December
2010 965 189 832 4 017 9 360 33 1 000
Total comprehensive
income for the period
Profit for the period - - - - - -
Other comprehensive income - - - 708 - -
Revaluation of property - - - 706 - -
Realisation of revaluation
reserve - - - (58) - -
Total comprehensive income
for the period - - - 708 - -
Transactions with owners
recorded directly in equity (4) (468) 245 - - -
Treasury shares purchased (4) (503) - - - -
Share-based payment
transactions - 35 245 - - -
Total transactions with
owners (4) (468) 245 - - -
Balance as at 30 June
2011 961 189 364 4 262 10 068 33 1 000
Non-
Retained earnings Total controlling Total
interests equity
R(`000) R(`000) R(`000) R(`000)
Balance as at 1 January
2010 66 959 266 595 13 455 280 050
Total comprehensive
income for the period
Profit for the period 7 858 7 858 1 126 8 984
Other comprehensive income - (313) - (313)
Foreign currency translation
differences - 12 - 12
Realisation of revaluation
reserve - (325) - (325)
Total comprehensive income
for the period 7 858 7 545 1 126 8 671
Transactions with owners
recorded directly in equity - 94 (580) (486)
Treasury shares purchased - (33) - (33)
Share-based payment
transactions - 127 - 127
Dividends paid to non-
controlling interests - - (580) (580)
Changes in ownership interests
in subsidiaries that do not
result in a loss of control
Business combinations 5 381 5 381 (5 692) (311)
Total transactions with owners 5 381 5 475 (6 272) (797)
Balance as at 30 June
2010 80 198 279 615 8 309 287 924
Total comprehensive
income for the period
Loss for the period (2 185) (2 185) 1 009 (1 176)
Other comprehensive income 371 6 072 5 796 6 072
Revaluation of property - 5 796 5 796 11 592
Realisation of revaluation
Reserve 371 276 - 276
Total comprehensive income
for the period (1 814) 3 887 6 805 10 692
Transactions with owners
recorded directly in equity - 89 (200) (111)
Treasury shares purchased - (611) - (611)
Share-based payment
transactions - 700 - 700
Dividends paid to non-
controlling interests - - (200) (200)
Changes in ownership interests
In subsidiaries that do not
Result in a loss of control
Business combinations (104) (104) 1 275 1 171
Total transactions
with owners (104) 15 1 075 1 060
Balance as at 31 December
2010 78 280 283 487 16 189 299 676
Total comprehensive
income for the period
Profit for the period 14 125 14 125 620 14 745
Other comprehensive income 58 766 - 766
Revaluation of property - 766 - 766
Realisation of revaluation
reserve 58 - - -
Total comprehensive income
for the period 14 183 14 891 620 15 511
Transactions with owners
recorded directly in equity - (227) - (227)
Treasury shares purchased - (507) - (227)
Share-based payment
transactions - 280 - 280
Total transactions with
owners - (227) - (227)
Balance as at 30 June
2011 92 463 298 151 16 809 314 960
NOTES TO THE FINANCIAL STATEMENTS
1. Basis of preparation
These unaudited summarised consolidated interim 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 disclosure requirements of IAS 34 Interim Financial
Reporting, the AC 500 standards as issued by the Accounting Practices Board, the
Listings Requirements of the JSE Limited and the requirements of the South
African Companies Act 71 of 2008. The summarised 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. These
interim results have not been reviewed or audited by the Company~s auditors,
KPMG Incorporated.
2. Significant accounting policies
These unaudited summarised consolidated interim 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 annual financial statements for the year ended 31 December
2010, except for the adoption of the following new or revised standards and
interpretations which are now effective: Improvements to IFRS 2010
3.Segment information
SEGMENT REVENUE
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2011 2010 2010
R(`000) R(`000) R(`000)
Financial services
-External sales 20 166 14 752 44 229
Support services
-External sales 172 437 152 490 324 269
Information technology
-External sales 51 423 49 908 107 820
Automotive components
-External sales 119 958 108 677 232 621
Property investments
-Internal sales 5 484 1 166 11 208
Adjustments and eliminations (9 659) - (37 833)
Total revenue 359 809 326 993 682 314
SEGMENT PROFIT/(LOSS)
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2011 2010 2010
R(`000) R(`000) R(`000)
Financial services 3 583 2 489 6 734
Support services 12 504 9 444 10 571
Information technology 3 582 619 4 885
Automotive components 1 021 (801) (7 761)
Property investments 1 938 697 9 139
Adjustments and eliminations (8 503) (4 590) (17 895)
Total profit 14 125 7 858 5 673
SEGMENT ASSETS
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2011 2010 2010
R(`000) R(`000) R(`000)
Financial services 325 576 232 990 321 701
Support services 122 641 68 173 102 868
Information technology 132 018 86 349 132 391
Automotive components 197 564 162 565 185 827
Property investments 121 837 27 552 119 657
Adjustments and eliminations (370 190) (150 008) (357 550)
Total assets 529 446 427 621 504 864
Commentary on results
The results were pleasing although caution is warranted when reviewing the year
on year comparison against what was a particularly poor prior year.
Other than Deltec Batteries, the group~s automotive businesses continue to
struggle and there is no visibility of an improved performance in the balance of
the year. Market activity in our financial services business remains flat and
there is also no sign of improved market conditions in the immediate or
intermediate future.
The support services division performed reasonably well thanks mainly to the
continued growth and acceptance of the NOSA brand by the South African health
and safety community. Our restructured IT division is also showing signs of
improvement under its new management structure and it is anticipated that this
will continue.
All in all, the group is in a stronger position than a year ago but we continue
to face challenges in key markets. We certainly do not have sufficient market
visibility to make sensible predictions for the next 6 months.
By order of the board
19 July 2011
Directors:
D C King (Chairman)
I G Morris (Chief Executive Officer)
D S E Carlisle (Managing Director)
D J Case (Financial Director)
P V Henwood (Lead Independent Non-executive)
R C Lewin (Non-executive)
Company Secretary: T de Mendonca
Auditors: KPMG
Transfer Secretaries: Computershare Investor Services
Sponsor: Java Capital
Attorneys: Eversheds
Date: 19/07/2011 12:34:01 Supplied by www.sharenet.co.za
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