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Interim financial statements for the six months ended 30 September 2012
Nictus Limited
Incorporated in the Republic of South Africa
Registration number: 1981/001858/06
JSE share code: NCS
NSX share code: NCT
ISIN code: NA0009123481
(“Nictus”)
Interim financial statements for the six months ended 30 September 2012
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Sept 12 30 Sept 11 31 Mar 12
Note R'000 R'000 R'000
Continuing operations
Revenue 21,586 21,168 45,902
Cost of sales (10,211) (10,541) (2,622)
Claims incurred (12) (495) (1,625)
Gross profit 11,363 10,132 21,655
Other income 216 881 1,621
Investment income from operations 7,775 6,469 13,410
Operating and administrative expenses 5 (25,530) (17,986) (39,026)
Operating loss (6,176) (504) (2,340)
Investment income 1,209 1,012 2,280
Operating (loss) / profit before financing costs (4,967) 508 (60)
Financing costs (91) (115) (601)
(Loss) / profit before taxation (5,058) 393 (661)
Taxation 1,014 133 2,286
(Loss) / profit from continuing operations (4,044) 526 1,625
Discontinued operations 7
Profit from discontinued operations, net of tax 2,032 9,754 21,403
(Loss) / profit for the period (2,012) 10,280 23,028
Other comprehensive income for the period, net of tax - 7,426 39,182
Continuing operations - Loss on property revaluation - - (719)
Discontinued operations - Gains on property revaluation - 7,426 39,901
Total comprehensive (loss) / income for the period (2,012) 17,706 62,210
Total comprehensive (loss) / income attributable to:
Owners of the Company (2,012) 17,706 62,210
Earnings per share
Basic (loss) / earnings per share (cents) (3.76) 19.24 43.09
Diluted (loss) / earnings per share (cents) (3.76) 19.24 43.09
Number of shares in issue (000's) 53,443 53,443 53,443
Earnings per share - continuing operations
Basic (loss) / earnings per share (cents) (7.57) 0.98 3.04
Diluted (loss) / earnings per share (cents) (7.57) 0.98 3.04
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 Sept 12 30 Sept 11 31 Mar 12
Note R'000 R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 17,665 99,216 138,474
Intangible assets and goodwill - 1,858 380
Investments 23,876 44,473 29,629
Loans and receivables 119,567 248,251 300,614
Deferred tax assets 4,693 13,190 7,924
165,801 406,988 477,021
Current assets 154,551 541,380 618,483
Non-current assets held for sale - 18,849 -
Total assets 320,352 967,217 1,095,504
EQUITY
Share capital 26,722 26,722 26,722
Revaluation reserve 7,675 37,857 53,918
Contingency reserve - 15,659 9,196
Retained income 32,028 43,869 78,731
Total equity 66,425 124,107 168,567
LIABILITIES
Non-current liabilities
Interest bearing loans and borrowings 7,500 4,776 4,819
Deferred tax liabilities 1,812 15,583 11,570
9,312 20,359 16,389
Current liabilities* 244,615 822,751 910,548
Insurance contract liability 235,176 715,224 788,052
Other current liabilities 9,439 107,527 122,496
Total liabilities 253,927 843,110 926,937
Total equity and liabilities 320,35 967,217 1,095,504
* Included in current liabilities is the insurance contract liability. Premiums received under
this liability are invested in terms of the insurance act enacted in South Africa with the
result that certain investments are of a long-term nature.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Sept 12 30 Sept 11 31 Mar 12
Note R'000 R'000 R'000
Cash flow from operating activities
Cash generated from operations 7 11,749 759 6,719
Investment income from operations received 7 9,779 6,844 16,530
Interest paid 7 (1,860) (1,948) (4,406)
Ordinary dividends received 7 4,265 13,106 17,850
Taxation (paid) / received 7 (223) (394) 1,785
Net cash flow generated from operating activities 7 23,710 18,367 38,478
Net cash flow utilised by investing activities 7 (63,441) (2,901) (13,782)
Net cash generated from / (utilised by) financing
activities 7 11,562 (24,561) (195)
Net (decrease) / increase in cash and cash equivalents 7 (28,169) (9,095) 24,501
Cash and cash equivalents at beginning of period 7 297,834 273,333 273,333
Cash and cash equivalents at end of period 7 269,665 264,238 297,834
CONDENSED SEGMENT REPORT Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Sept 12 30 Sept 11 31 Mar 12
Note R'000 R'000 R'000
Continuing operations
Segment assets
Motor retail - - -
Furniture retail 61,429 51,266 54,496
Insurance & Finance 248,758 199,963 218,119
310,187 251,229 272,615
Head office and eliminations 10,165 3,738 2,606
320,352 254,967 275,221
Segment revenue
Motor retail - - -
Furniture retail 18,966 18,980 41,278
Insurance & Finance 2,727 2,186 13,144
21,693 21,166 54,422
Head office and eliminations (107) 2 (8,520)
21,586 21,168 45,902
Operating (loss) / profit after taxation - - -
Motor retail - - -
Furniture retail (1,988) 402 (355)
Insurance & Finance 2,050 594 4,919
62 996 4,564
Head office and eliminations (4,106) (470) (2,939)
(4,044) 526 1,625
Discontinued operations 7
Segment assets
Motor retail - 207,025 245,546
Furniture retail - 68,500 131,900
Insurance & Finance - 618,190 630,537
- 893,715 1,007,983
Head office and eliminations - (181,465) (187,700)
- 712,250 820,283
Segment revenue
Motor retail 150,159 197,761 414,817
Furniture retail 26,213 27,821 58,909
Insurance & Finance 24,706 27,088 56,743
201,078 252,670 530,469
Head office and eliminations (20,257) (801) (7,548)
180,821 251,869 522,921
Operating profit after taxation
Motor retail 909 1,420 2,661
Furniture retail 647 827 1,375
Insurance & Finance 5,108 11,129 17,711
6,664 13,376 21,747
Head office and eliminations (4,632) (3,622) (344)
2,032 9,754 21,403
RECONCILIATION BETWEEN EARNINGS & HEADLINE EARNINGS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Sept 12 30 Sept 11 31 Mar 12
Note R'000 R'000 R'000
Continuing operations
(Loss) / profit for the period, net of taxation (4,044) 526 1,625
Loss on disposal of property, plant and equipment - 20 -
Headline (loss) / earnings (4,044) 546 1,625
Headline (loss) / earnings per share (cents) (7.57) 1.02 3.04
Diluted Headline (loss) / earnings per share (cents) (7.57) 1.02 3.04
Discontinued operations
Profit for the period, net of taxation 2,032 9,754 21,403
Goodwill impairment loss - - 1,647
Fair value adjustment on investment property - - (7,025)
Headline earnings 2,032 9,754 16,025
Headline earnings per share (cents) 3.80 18.25 29.99
Diluted Headline earnings per share (cents) 3.80 18.25 29.99
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Revaluation Contingency Retained Total
capital reserve reserve income equity
R'000 R'000 R'000 R'000 R'000
Balance at 1 April 2011 26,722 30,431 17,083 37,198 111,434
Total comprehensive income - - - 10,280 10,280
Profit for the period - - - 10,280 10,280
Other comprehensive income - 7,426 - - 7,426
Revaluation of land and buildings, net of tax - 7,426 - - 7,426
Transfers to retained earnings - - (1,424) 1,424 -
Transfer from contingency reserve - - (1,424) 1,424 -
Contributions by and to the owners of the Group - - - (5,033) (5,033)
Dividends to equity holders - - - (5,033) (5,033)
Balance at 30 September 2011 26,722 37,857 15,659 43,869 124,107
Total comprehensive income - - - 12,748 12,748
Profit for the period - - - 12,748 12,748
Other comprehensive income - 31,756 - - 31,756
Revaluation of land and buildings, net of tax - 31,756 - - 31,756
Transfers to retained earnings - (15,695) (6,463) 22,158 -
Transfer from contingency reserve - - (6,463) 6,463 -
Revaluation of land and buildings sold during the
year, net of tax - (15,695) - 15,695 -
Contributions by and to the owners of the Group - - - (44) (44)
Dividends to equity holders - - - (44) (44)
Balance at 31 March 2012 26,722 53,918 9,196 78,731 168,567
Total comprehensive income - - - (2,012) (2,012)
Loss for the period - - - (2,012) (2,012)
Transfers to retained earnings - (46,243) (9,196) 55,439 -
Transfer from contingency reserve - - (2,106) 2,106 -
Transfer from reserves for disposal group as "held for
distribution to owners" * - (46,243) (7,090) 53,333 -
Contributions by and to the owners of the Group - - - (100,130) (100,130)
Dividends to equity holders - - - (7,615) (7,615)
Distribution to shareholders - unbundling * - - - (92,515) (92,515)
Balance at 30 September 2012 26,722 7,675 - 32,028 66,425
* - Refer to Note 7 Discontinued Operation for more details
NOTES TO THE FINANCIAL INFORMATION
1. BASIS OF PREPARATION
The condensed consolidated interim financial statements have been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards (IFRSs), the presentation and disclosure requirements of IAS 34:
Interim Financial Reporting, the Companies Act of 2008 (No.71 of 2008), as amended and the AC 500 series issued by the
Accounting Policies Board (APB). The accounting policies are consistent with those applied for the year ended 31 March 2012.
There are no new standards and interpretations effective for the six months ended 30 September 2012. These consolidated interim
financial results have been prepared under the supervision of the Group Financial Director, Mr. Wilmar Fourie CA (SA). The
condensed consolidated interim financial results are unaudited and have not been reviewed by the auditors.
2. FOREIGN CURRENCY
Subsequent to the unbundling effective 31 August 2012, the Group's functional and presentation currency is the South African
Rand. Prior to the unbundling, the functional and presentation currency was the Namibian Dollar. As the Company's primary listing
is on the JSE Limited ("JSE"), the interim financial statements have been presented in South African Rands being the Group's
functional and presentation currency. The Namibia Dollar and the South African Rand are translated on a one-to-one basis.
3. COMPARATIVE FIGURES
The comparative information for the six months ended 30 September 2011 is consistent with the accounting policies and basis of
presentation applied to both the current interim financial period and the previous financial year ended 31 March 2012. IFRS 5: Non-
current Assets Held for Sale and Discontinued Operations, requires the comparative figures in the Statement of Comprehensive
Income to be restated, to only reflect the continuing operations. In the Statement of Financial Position, there is no such requirement
and comparative figures include the assets of the Namibian operations.
4. RELATED PARTIES
During the period under review, certain companies within the Group entered into transactions with each other. These intra-Group
transactions have been eliminated on consolidation. Related party information remains unchanged from that reported at 31 March
2012 other than the Namibian operations which no longer form part of the Group, as a result of the unbundling. Refer to the annual
report of Nictus for the year ended 31 March 2012 for further information.
5. REVIEW OF OPERATIONS
Continuing operations
· Group revenue increased by 2% to R21.6 million.
· The Group's asset base increased by 26% to R320 million.
· Gross profit increased by 12% to R11.4 million.
· Profit for the period decreased by R4.5 million resulting in a loss of R4 million.
· Operating and administrative expenses increased by 42% to R25.5 million.
The increase in operating and administrative expenses of 42% was partly due to the costs incurred in respect of the unbundling.
These costs amounted to approximately R3 million and were incurred during the six months ended 30 September 2012. These
costs will not have a continuing effect on the financial results of Nictus.
In addition, operating and administrative expenses increased by R2.7 million, relating to personnel costs in support of the growth
within both the furniture and insurance segments. The majority of this increase, compared to the prior interim period, is the
additional personnel appointed during the latter part of the financial year ended 31 March 2012, with appointments of senior
personnel in the administrative office. These costs were included in the second part of the financial year ended 31 March 2012.
The remainder of the increase is due to normal growth of expenses associated with the growing segments.
Overview of first six months
The unbundling of the Group was finalised during the six months ended 30 September 2012. The effective date of the unbundling
was 31 August 2012 when shareholders approved the unbundling transaction at a general meeting constituted for that purpose.
Shares traded ex the Namibian operations from 21 September 2012 when Nictus Holdings Limited ("Nictus Namibia"), the entity
which holds the Namibian operations, was listed separately on the Namibian Stock Exchange. Further details relating to the
unbundling can be obtained in the circular issued to shareholders on 1 August 2012.
The profit for the period under review decreased significantly compared to the first six months ended 30 September 2011. A major
contributor to the loss for the first six months ended 30 September 2012 was the costs relating to the unbundling, included in these
interim results. What is important to note, is that during the first six months under review, all costs attributable to the unbundling
were accounted for. The benefits of the unbundling as well as the return on additional inflow of the R52.4 million in capital will only
be reflected in the second part of the current financial year.
The turmoil in the South African economy resulting from the initial strikes in the mining sector and spreading throughout other
sectors of the economy, did have a negative effect on consumer spending. The full impact will however only be visible in the second
half of the Group's current financial year. The loss in income for such a large number of people within the economy, some without
income for up to six weeks, will negatively impact the economy in general.
6. SEGMENT RESULTS
There has been a change in the segments within the Group since the financial year ended 31 March 2012. After the unbundling, the
Group no longer has a Motor retail segment. The motor vehicle segment only operated in Namibia.
Furniture retail: Revenue from the furniture retail segment remained consistent in comparison to revenue for the six months ended
30 September 2011. Revenue, however, remains under pressure, as the full effect of the employees unrest throughout South Africa
will negatively impact on consumer spending. The furniture retail segment is operating slightly worse compared to the same period
of last year.
The restructuring due to the unbundling resulted in R35 million of additional capital. This capital was injected into the furniture
segment during August 2012. The segment was able to redeem the majority of its interest bearing loans with this capital injection
and the benefits of this will be visible in the future.
Organised crime in South Africa remains a serious problem within the furniture trade business. The Group has had encounters
during the past six months with organised crime syndicates, resulting in losses at certain branches. Additional controls have already
been implemented in these areas in order to limit possible future losses.
Insurance and finance: The premium income for the six months ended 30 September 2012 increased by 25% as compared to the
comparable period. Investment income was higher than in the previous period, resulting in a good performance for the first six
months for the insurance and finance segment. The performance of equities on the JSE remains highly unpredictable and is
monitored constantly to ensure returns are maximised.
New capital will also be invested in this segment, arising from the unbundling. The effect of the new capital will assist in compliance
with changes in regulations as well as profitability of the segment.
Discontinued operations: Discontinued operations are represented by the Group's Namibian operations and is set out in Note 7.
Further detail regarding the unbundling transaction is available in the circular distributed to shareholders dated 1 August 2012.
NOTES TO THE FINANCIAL INFORMATION
7. DISCONTINUED OPERATION
On 31 August 2012, the Group unbundled its Namibian operations. The Namibian operations were not classified as held for
sale or as a discontinued operation at 31 March 2012, and the comparative condensed consolidated statement of
comprehensive income has been re-presented to show the discontinued operation separately from continuing operations. The
Namibian Group will release separate interim financial results for 30 September 2012 as required by the Namibian Stock
Exchange.
For the six months ended 30 September 2012
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Sept 12 30 Sept 11 31 Mar 12
R'000 R'000 R'000
Results of discontinued operation
Revenue 180,821 251,869 522,921
Expenses (179,873) (240,682) (500,176)
Operating profit 948 11,187 22,745
Taxation 1,084 (1,433) (1,342)
Profit for the period 2,032 9,754 21,403
Basic earnings per share (cents) 3.80 18.25 40.05
Diluted earnings per share (cents) 3.80 18.25 40.05
Number of shares in issue (000's) 53,443 53,443 53,443
Cash flows from / (used in) discontinued operation
Cash generated from / (utilised by) operations 44,158 (26,292) (42,380)
Investment income from operations received 3,899 1,294 5,851
Interest paid (1,562) (1,833) (4,265)
Ordinary dividends received - 12,187 -
Taxation paid (1,317) (652) (201)
Net cash flow generated from / (utilised by) operating activities 45,178 (15,296) (40,995)
Net cash (utilised by) / generated from investing activities (64,492) 1,691 2,655
Net cash (utilised by) / generated from financing activities (20,682) (19,528) 55,332
Net (decrease) / increase in cash and cash equivalents (39,996) (33,133) 16,992
Cash and cash equivalents at beginning of period 209,696 192,704 192,704
Cash and cash equivalents at end of period 169,700 159,571 209,696
Effect of disposal on the financial position of the Group
Property, plant and equipment (124,834)
Intangible assets and goodwill (302)
Investments (13,238)
Loans and receivables (91,905)
Inventories (87,460)
Trade and other receivables (297,712)
Cash and cash equivalents (169,700)
Trade and other payables 36,549
Insurance contract liability 572,783
Interest bearing borrowings 77,789
Deferred tax liability 5,515
Net assets and liabilities (92,515)
Consideration received, satisfied in cash * -
Cash and cash equivalents disposed of (169,700)
Net cash outflow (169,700)
* - No cash consideration was received since Nictus shareholders received the same proportion of shares held in Nictus
Limited in the Namibian Group in terms of the unbundling transaction. Further detail regarding the unbundling transaction is
available in the circular distributed to shareholders dated 1 August 2012.
8. HEADLINE EARNINGS
For the six month period ended 30 September 2012, there were no items that impacted the headline earnings calculation.
9. BASIC EARNINGS PER SHARE
Continuing operations: Loss per share based on profit or loss for the six months ended 30 September 2012 was 7.57
cents (30 September 2011: earning per share 0.98 cents), compared to a headline loss per share of 7.57 cents (30
September 2011: earning per share 1.02 cents).
Discontinued operations: Earnings per share based on profit or loss for the six months ended 30 September 2012 was
3.8 cents (30 September 2011: 18.25 cents), compared to a headline earnings per share of 3.8 cents (30 September
2011: 18.25 cents).
10. INTERIM DIVIDEND
No interim dividend has been proposed by the Board of directors.
11. UNBUNDLING DIVIDEND
An unbundling dividend of 173.11 cents per share was declared to shareholders. Nictus shareholders are referred to the
announcement that was published on the Securities Exchange News Service of the JSE on Tuesday, 9 October 2012
setting out the South African taxation considerations regarding the unbundling.
12. DIRECTORS
P J de W Tromp was appointed as executive director of the Group during April 2012. The designations of F R van Staden,
P J de W Tromp and J J Retief changed from executive to non-executive directors with effect from 31 August 2012, as a
result of the unbundling.
13. PROSPECTS
The unbundling transaction has been fully implemented, with the last step in the process being the issue of shares to
Nictus Namibia to the value of R22.4 million on 1 October 2012. The additional capital that will be available for the
remaining six months of the current financial year will be used to support the growth of the Group, and is expected to have
a positive effect on the Group's financial results. Costs relating to Nictus Namibia are no longer carried within the South
African operations from effect of 31 August 2012. This will have an additional positive effect on the operating results of the
Group.
Historically the majority of the Group's earnings are earned in the second part of the financial year. However, with the
current economic conditions in South Africa, the Board of Directors of Nictus are expecting the remaining six months of
the financial year to be challenging.
On behalf of the board:
N C Tromp
W O Fourie
Johannesburg, 30 November 2012
Randburg
30 November 2012
Sponsor on the JSE Sponsor on the NSX
KPMG Services (Pty) Limited Simonis Storm Securities (Pty) Ltd
(Member of the NSX)
Date: 30/11/2012 05:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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