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Unaudited Group Interim Results for the six months ended 30 September 2012
Niveus Investments Limited
Reg. no: 1996/005744/06
Incorporated in the Republic of South Africa
JSE share code: NIV
ISIN code: ZAE000169553
UNAUDITED GROUP INTERIM RESULTS
for the six months ended 30 September 2012
ABRIDGED CONSOLIDATED INCOME STATEMENT
Six months ended Year ended
30 September 31 March
2012 2011 2012
R'000 R'000 R'000
(Unaudited) (Unaudited) (Audited)
Revenue 92 542 3 300 6 982
Net gaming win 292 742 196 065 417 982
Group revenue 385 284 199 365 424 964
Other income 977
Other operating expenses (303 833) (136 085) (292 984)
EBITDA 81 451 63 280 132 957
Depreciation and amortisation (31 376) (23 129) (47 597)
EBIT 50 075 40 151 85 360
Investment income 1 132 166 559
Finance costs (10 447) (11 839) (21 529)
Share of losses of associates (16 305) (2 252)
Impairment of goodwill (757)
Profit before taxation 23 698 28 478 62 138
Taxation (14 070) (8 361) (20 743)
Profit for the year from continuing operations 9 628 20 117 41 395
Discontinued operations (105)
Profit for the year 9 523 20 117 41 395
Attributable to:
Equity holders of the parent 8 791 20 741 40 323
Non-controlling interests 732 (624) 1 072
9 523 20 117 41 395
Six months ended Year ended
30 September 31 March
2012 2011 2012
R'000 R'000 R'000
(Unaudited) (Unaudited) (Audited)
Reconciliation of headline earnings Gross Net Gross Net Gross Net
Earnings attributable
to equity holders of the parent 8 791 20 741 40 323
IAS 16 (gains)/losses
on disposal of plant
and equipment 1 186 1 096 (84) (60) (331) (238)
IAS 16 impairment of plant and
equipment 361 260
IFRS 3 Impairment of goodwill 757 757
Re-measurements included in equity-
accounted earnings of associates (136)
Headline profit 10 508 20 681 40 345
Six months ended Year ended
30 September 31 March
2012 2011 2012
(Unaudited) (Unaudited) (Audited)
Earnings per share (cents)
Basic and diluted 10.60 35.37 68.77
Continuing operations 10.73 35.37 68.77
Discontinued operations (0.13)
Headline and diluted headline 12.68 35.27 68.81
Continuing operations 12.81 35.27 68.81
Discontinued operations (0.13)
Basic and diluted 10.60 35.37 68.77
Headline and diluted headline 12.68 35.27 68.81
Weighted average number of shares in
issue ('000) 82 876 58 633 58 633
Actual number of share in issue at end of
period ('000) 107 119 58 633 58 633
ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 September 31 March
2012 2011 2012
R'000 R'000 R'000
(Unaudited) (Unaudited) (Audited)
ASSETS
Non-current assets 660 420 200 577 507 614
Property, plant and equipment 290 940 132 399 150 019
Investment properties 3 700 3 700 3 700
Goodwill 49 730 48 240 48 230
Interest in associates 294 122 284 670
Other intangible assets 5 423 2 587 5 596
Deferred taxation 9 412 11 401 9 649
Non-current receivables 7 093 2 250 5 750
Current assets 265 777 41 172 49 643
Other 127 265 33 420 38 504
Cash and cash equivalents 138 512 7 752 11 139
Non-current assets held for sale 1 982
Total assets 928 179 241 749 557 257
EQUITY AND LIABILITIES
Equity 475 724 5 388 24 879
Equity attributable to equity holders of the
parent 500 645 5 752 25 409
Non-controlling interests (24 921) (364) (530)
Non-current liabilities 263 385 619 185 856
Deferred taxation 37 28 37
Borrowings 262 676 185 166
Operating lease equalisation liability 672 591 653
Current liabilities 185 301 235 742 346 522
Non-current liabilities held for sale 3 769
Total equity and liabilities 928 179 241 749 557 257
Net asset value per share (cents) 467 10 43
Net tangible asset value per share (cents) 416 (77) (48)
ABRIDGED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Six months ended Year ended
30 September 31 March
2012 2011 2012
R'000 R'000 R'000
(Unaudited) (Unaudited) (Audited)
Profit for the period 9 523 20 117 41 395
Other comprehensive income:
Foreign currency translation differences 30 170
Total comprehensive income 9 553 20 117 41 565
Attributable to:
Equity holders of the parent 8 821 20 741 40 493
Non-controlling interest 732 (624) 1 072
9 553 20 117 41 565
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Six months ended Year ended
30 September 31 March
2012 2011 2012
R'000 R'000 R'000
(Unaudited) (Unaudited) (Audited)
Balance at beginning of year 24 879 (14 729) (14 729)
Share capital and premium
Shares issued 673 958
Current operations
Total comprehensive income 9 553 20 117 41 565
Common control reserve (207 543)
Effects of changes in holding (10)
Minority interest on acquisition of subsidiaries (25 123)
Capital reductions and dividends (1 947)
Balance at end of period 475 724 5 388 24 879
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
30 September 31 March
2012 2011 2012
R'000 R'000 R'000
(Unaudited) (Unaudited) (Audited)
Cash flows from operating activities 96 074 50 380 84 371
Cash flows from investing activities (66 661) (47 887) (57 614)
Cash flows from financing activities 97 942 (20 877)
Increase in cash and cash equivalents 127 355 2 493 5 880
Cash and cash equivalents
At beginning of period 11 139 5 259 5 259
Foreign exchange difference 18
At end of period 138 512 7 752 11 139
SEGMENTAL ANALYSIS
Six months ended Year ended
30 September 31 March
2012 2011 2012
R'000 R'000 R'000
Revenue (Unaudited) (Unaudited) (Audited)
Vehicle component manufacturing 85 073
Other 7 469 3 300 6 982
Total 92 542 3 300 6 982
Net gaming win
Gaming and Entertainment 292 742 196 065 417 982
Total 292 742 196 065 417 982
EBITDA
Gaming and Entertainment 86 134 63 309 132 987
Vehicle component manufacturing (2 920)
Other (1 763) (29) (30)
Total 81 451 63 280 132 957
Profit before taxation
Gaming and Entertainment 48 849 40 344 81 625
Vehicle component manufacturing (7 177)
Beverages (16 305) (2 252)
Other (1 669) (11 866) (17 235)
Total 23 698 28 478 62 138
NOTES TO THE ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS
Basis of preparation and accounting policies
The results for the six months ended 30 September 2012 have been prepared in accordance with
International Financial Reporting Standards ("IFRS"), specifically IAS 34: Interim Financial
Reporting, the AC 500 series of interpretation as issued by the Accounting Practices Board,
the requirements of the South African Companies Act, 2008 and the Listings Requirements of the
JSE Limited. The accounting policies of the group are consistent with those applied for the
year ended 31 March 2012. As required by the Listings Requirements of the JSE Limited, the
group reports headline earnings in accordance with Circular 3/2012: Headline Earnings as
issued by the South African Institute of Chartered Accountants. The interim financial
statements have not been audited or independently reviewed and were prepared under the
supervision of the Chief Financial Officer, Ms Muriel Loftie-Eaton CA(SA).
Acquisitions
During the period under review, Niveus acquired a 100% interest in the Galaxy Bingo Group and
a 90% interest in Formex Industries with effect from 1 July 2012. As the acquisitions were
made from Niveus' holding company, Hosken Consolidated Investments ("HCI") Limited,
acquisitions were accounted for as common control acquisitions. The transactions were made at
nominal values and therefore resulted in debit entries of R84m and R226m to the common
control reserve for Galaxy Bingo and Formex respectively due to their negative equity
positions at the date of acquisition. Furthermore, a R102,5m shareholders' loan to Formex was
acquired from HCI at a nominal value due to the loan being impaired to zero. This resulted in
a credit to the common control reserve of R102,5m.
The acquired entities contributed revenue of R128,3m and loss before tax of R6,7m since the
date of acquisition. If these acquisitions occurred on 1 April 2012 the contribution to
revenue would have been R253,8m and to loss before tax R4,3m.
Shares issued
The company issued 8,98m shares at R13,90 per share for the acquisition of a R124,8m loan
claim against Galaxy Bingo at face value, issued 22,48m shares at R13,90 per share for the
acquisition of a R312,5m loan claim against HCI-KWV Holdings at face value and 17,02m shares
at R13,90 per share for R236,6m cash. All of the aforementioned share issues were done in
terms of the group restructuring as preparation for the listing. On 10 September 2012 the
company listed its 107m issued shares on the main board of the JSE Limited under the
Investment Entities sector.
Comparative figures
The comparative figures are not comparable to the results for this period due to the
acquisition of interest in Galaxy Bingo and Formex. Furthermore, KWV Holdings Limited was
equity accounted from December 2011 and there was a further increase in shareholding from
35,5% to 39,9% effective July 2012.
COMMENTARY ON RESULTS
The shares commenced trading on 10 September 2012 and the interim results contain six months
trading for Vukani, six months for KWV and the trading results for Galaxy Bingo and Formex for
three months from July 2012. The KWV results, accounted for as an associate, are for the
period 1 January 2012 to 30 June 2012.
Vukani
EBITDA for the six months was R82,5m (12 months ended March 2012 R133m). This is a pleasing
performance with gross gambling revenue ("GGR") for the six months increasing to R252,6m from
R196m for the six months ending September 2011. The year-to-date average GGR per machine per
month amounted to R15 679 (R13 606 in 2011) with a closing number of machines of 4 293.
Machines rolled out remains disappointing, especially in Gauteng where the gaming board was
dismissed in March and still has not been replaced. In Limpopo progress is also frustratingly
slow despite numerous discussions with the board and the executive. The group is considering
other options to resolve the slow progress in this province.
Galaxy Bingo
The business continues to improve on a month-to-month basis with the group producing a
positive EBITDA of R3,6m for the three months ending September 2012. Had the business been
acquired on 1 March, the EBITDA would have amounted to R6,7m. The improvement is driven by
better management practices and by an increased number of electronic bingo terminals ("EBTs").
The group opened its first site in KwaZulu-Natal where it will only offer paper bingo and
limited payout machines ("LPMs"). The roll-out of EBTs in provinces other than Gauteng has not
been approved and the respective gaming boards appear to be waiting for the National Gaming
Board to make a policy decision on the regulation of EBTs.
KWV
The results reflect the group's last published results for the year ended June 2012, of which
the last six months were reflected in Niveus as losses from associates, amounting to R16,3m.
Formex
The business remains under pressure producing a negative EBITDA of R2,9m for the three months
its results were included. The negative EBITDA mainly resulted from inventory provisions and
provisions for bad debts. Had the business been consolidated from 1 March, the EBITDA would
have amounted to R3,9m. The automotive industry, especially in the component supply sector,
remains under pressure as cost-cutting initiatives from the brand owners are forced down the
supply chain with limited ability to recover margin erosion by the component manufacturers.
Financing costs
Financing costs mainly reflects borrowing costs of subsidiaries. Formex incurred interest
costs of R2,1m for the three months and Vukani R7,8m for the six months.
Cash resources
The group ended the period with R138,5m in cash.
André van der Veen
Monday 19 November 2012
Cape Town
Niveus Investments Limited
Incorporated in the Republic of South Africa
JSE share code: NIV
ISIN code: ZAE000169553
Directors: JA Copelyn**, MJA Golding**, MM Loftie-Eaton*, ML Molefi#, JG Ngcobo#,
Y Shaik#, A van der Veen*
(* executive ** non-executive # independent non-executive)
Company Secretary: HCI Managerial Services Proprietary Limited
Block B, Longkloof Studios, Darters Road, Gardens 8001
PO Box 5251 Cape Town 8000
Transfer secretaries: Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg 2001
PO Box 61051, Marshalltown 2107
Sponsor: Investec Securities Limited
Website: www.niveus.co.za
Date: 19/11/2012 07:42:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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