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Reviewed Results for the year ended 30 November 2012
GLOBAL ASSET MANAGEMENT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2002/003192/06)
Share Code: GAM ISIN: ZAE000173498
("Global" or “the company”)
REVIEWED RESULTS FOR THE YEAR ENDED 30 NOVEMBER 2012
The Board of Directors of Global are pleased to present the reviewed results of Global and
its Subsidiary (“the Group”) for the year ended 30 November 2012.
Statement of comprehensive Income
Reviewed Audited
2012 2011
Year ended 30 November R’000 R’000
Revenue 247 420 163 493
Cost of sales (197 744) (109 657)
Gross profit 49 676 53 836
Other income 2 499 834
Operating expenses (13 803) (12 251)
Operating profit before interest 38 372 42 419
Interest received 92 325
Finance costs (21 543) (19 869)
Profit before taxation 16 921 22 875
Taxation (6 662) (6 144)
Profit after taxation from continuing business 10 259 16 731
Profit (loss) from discontinued business (307) (80)
Profit for the year 9 952 16 651
Other comprehensive income/(loss) – fair value
adjustment 799 (463)
Total comprehensive Income 10 751 16 188
Attributable earnings 10 751 16 188
Headline earnings reconciliation:
Attributable earnings 10 751 16 188
Other comprehensive income – fair value adjustment (799) 463
Capital gains on the sale of investments (2 554) (5 939)
Headline earnings 7 398 10 712
Per share information:
Headline earnings per share (cents) 295.49 *
Basic earnings per share (cents) 429.44 *
Weighted average number of shares in issue 2 503 660 *
Per share information assuming 35 000 000 shares
in issue:
Pro forma headline earnings per share (cents) 21.14 *
Pro forma earnings per share (cents) 30.72 *
Shares in issue on listing 35 000 000 *
* - information not previously published. Company listed on 14 December 2012.
Condensed consolidated statement of financial position
Reviewed Audited
30 November 30 November
2012 2011
R’000 R’000
Assets
Non-current assets
Property, plant and equipment 378 370 318 526
Goodwill 6 941 6 941
Loans and advances to customers 15 857 10 972
Deferred tax 18 384 25 110
Current assets
Available for sale assets 4 520 3 539
Loans and advances to customers 5 889 4 506
Trade and other receivables 28 160 18 508
Cash and cash equivalents 1 724 7 394
Total assets 459 845 395 496
Equity and liabilities
Equity
Share capital 1 1
Retained earnings 58 629 47 878
Liabilities
Non-current liabilities
Other financial liabilities 234 702 172 589
Deferred tax 47 317 47 543
Current liabilities
Loans from shareholders 10 429 14 677
Other financial liabilities 64 835 68 003
Current tax payable 197 377
Trade and other payables 43 245 44 428
Bank overdraft 490 -
Total equity and liabilities 459 845 395 496
Per share information
Net asset value per share (cents per share) 186.13 47 878.00
Tangible net asset value per share (cents per share) 164.09 40 937.00
Number of shares in issue at year end 31 500 000 1 000
Condensed consolidated statement of cash flows
Reviewed Audited
30 November 30 November
2012 2011
R’000 R’000
Cash generated from operating activities 43 915 45 445
Cash generated from discontinuing operations (307) (80)
Cash used in investing activities (104 120) (56 460)
Cash generated from/(used in) financing activities 54 353 7 912
Total cash movement for the year (6 159) (3 183)
Cash at the beginning of the year 7 394 10 577
Total cash at end of the year 1 235 7 394
Condensed consolidated statement of changes in equity
Non-
Share Retained Attributable to controlling Total share
capital income equity holders interest capital
R’000 R’000 R’000 R’000 R’000
Balance at 1
December 2010 1 32 648 32 649 - 32 649
Changes in equity - (958) (958) - (958)
Profit for the year - 16 188 16 188 - 16 188
Total changes - 16 188 16 188 - 16 188
Balance at 30
November 2011 1 47 878 47 879 - 47 879
Changes in equity
Profit for the year - 10 751 10 751 - 10 751
Total changes - 10 751 10 751 - 10 751
Balance at 30
November 2012 1 58 629 58 630 - 58 630
COMPARISON OF 2012 FORECAST FINANCIAL INFORMATION
In accordance with the JSE Listings Requirements, Global has set out a comparison
between the profit estimate as contained in the Company?s prospectus dated 3 December
2012 and the reviewed results for the year ended 30 November 2012 below.
Reviewed Estimate
Year ended 30 November 2012 2012
Income Statement R’000 R’000
Revenue 247 420 140 057
Cost of sales (197 744) (46 515)
Gross profit 49 676 93 542
Other income 2 499 -
Operating expenses (13 803) (54 091)
Operating profit before interest 38 372 39 451
Interest received 92 -
Finance costs (21 543) (23 494)
Profit before taxation 16 921 15 957
Taxation (6 662) (5 115)
Profit after taxation from continuing business 10 259 10 842
Loss from discontinued business (307) -
Profit for the year 9 952 10 842
Other comprehensive income 799 -
Total Comprehensive Income 10 751 10 842
Attributable earnings 10 751 10 842
Headline earnings reconciliation:
Attributable earnings 10 751 10 842
Other comprehensive income – fair value adjustment (799) -
Capital gains on the sale of investment (2 554) -
Headline earnings 7 398 10 842
Per share information
Fully diluted headline earnings per share (cents) 21.14 30.98
Fully diluted earnings per share (cents) 30.72 30.98
Fully diluted shares (assumed in prospectus) 35 000 000 35 000 000
1. BASIS OF PREPARATION
The board of directors is pleased to present the Group?s reviewed results for the year
ended 30 November 2012. The accounting policies adopted for purposes of this report
comply, and have been consistently applied in all material respects, with International
Financial Reporting Standards (“IFRS”). The abridged financial statements have been
prepared in accordance with the requirements of IAS 34 (Interim Financial Reporting).
The same accounting policies and methods of computation have been followed as
compared to the prior year and as detailed in the Company's prospectus dated
3 December 2012. The results have been reviewed by Horwath Leveton Boner and
their unqualified and unmodified audit review opinion is available for inspection at the
Company's registered office.
The financial results have been prepared by the financial director, Mr W Basson
(CASA).
2. INDUSTRY AND BUSINESS OVERVIEW
Global listed on the Alternative Exchange („AltX?) of the Johannesburg Stock Exchange
(“JSE”) on 14 December 2012.
Global was initially incorporated as a private company on 15 February 2002 and was
converted by way of a special resolution to a public company on 1 November 2012.
Global has focused on project and structured finance since 1992. Under the motto “We
achieve that little extra” Global brings to bear a significant array of skills and experience
into its business ventures, backed by access to a vast network of local and
international financial institutions.
In September 2009 Global became part of the Inshare Proprietary Limited (“Inshare”)
group - a private investment holding enterprise that specialises in identifying
undervalued opportunities and invests in strong and sustainable annuity businesses.
Global is the holding company of Linde Financial Services Proprietary Limited (“LFS”),
a very successful asset finance company, specialising in the financing of Linde forklift
trucks.
LFS was formed to satisfy very specific needs which existed within Linde Material
Handling Proprietary Limited (“LMH”), a South African registered company with
ownership being held by the ultimate manufacturer of Linde forklift trucks, a company
operating out of Germany and owned jointly by Goldman Sachs and Kohlberg Kravis
Roberts & Company, both being investment houses of American origin.
Since its inception in 2005, LFS has financed over 2 000 forklift trucks, with a current
asset book sitting at over R378 million. Linde forklift trucks are considered to be a
quality product and LMH, as the service provider, is responsible for the after sales
services and maintenance so that this aspect of the business is kept in line with the
perception of quality. This function ensures a continued stream of new business as well
as a potentially attractive market for short term pre-owned equipment.
LFS has produced reliable profits for the past 7 years and has delivered an attractive
return on investment for its shareholders. Most of the initial rentals are based on 5
year leasing contracts. However, after 5 years, most of the equipment is in a good
enough condition to be utilised further. The short-term leasing option poses an
attractive opportunity and is projected to generate a substantial portion of future profits.
LFS will initiate the short term rental business during the first half of the new financial
year.
The current consortium of funders to the LFS book includes Rand Merchant Bank,
Standard Bank, Nedbank, Imperial Bank and Mercantile Bank.
3. FINANCIAL RESULTS
Global is pleased to report that the profit performance of the Group was in line with
expectations as set out in the profit estimate contained in the Company?s prospectus.
In accordance with further guidance in terms of IFRS, certain items contained in
operating expenses in the profit estimate have, for the year end financial statements,
been reflected under revenue, cost of sales and operating expenses, although the
impact on the Group?s net profit remains the same. The effect of this disclosure
resulted in revenue and cost of sales being higher by R107.4 million and R151.2 million
respectively and operating expenses being lower by R40.3 million as compared to the
profit estimate.
Shareholders are reminded that the Group removed certain of its non-core operations
in anticipation of the listing. Accordingly a comparison of income and expenditure with
the prior year figures is not considered to be meaningful to shareholders. However, the
main business of the Group has continued to grow with new rental contracts being
signed during the year under review as compared to the prior year.
Operating expenses have been well contained year on year, other than once off costs
that were incurred as part of the listing process.
Taxation increased during the financial year due to an increase in the capital gains tax
inclusion rate. This was not included in the profit estimate as the Company had an
agreement that any increase in capital gains tax arising from the restructuring of the
Group ahead of listing would be recouped from the Holding Company. This
recoupment has been recognised under other comprehensive income. The net effect
on the Group results arising from this increase in capital gains tax is thus neutral.
On the balance sheet, property, plant and equipment increased by 18.8%, primarily as
a result of additional forklift trucks being acquired for the rental book during the year.
Other financial liabilities have similarly increased as a result of the increased business.
It should be noted that the current portion of other financial liabilities reflected on the
balance sheet represents a 12 month accrual for finance associated with the Group's
rental book. On the other side, Trade and Other Receivables only reflects
approximately one month of receivables arising from the matching rental contracts.
The net current liability position of the Group is thus considered to be sound as current
liabilities will be settled by ongoing monthly rental billings.
4. SEGMENTAL REPORTING
No segmental information has been reported as the Group operates principally in one
segment, namely forklift truck financing and associated transactions.
Project management, corporate services and any other income is below the
quantitative threshold set by IFRS for reporting.
5. DIRECTOR CHANGES
The current board is constituted as follows:
Name (Age) Date of appointment Position/title
Niels Penzhorn (40) 1 December 2009 Chief Executive Officer
Werner Petrus Basson (30) 14 November 2012 Chief Financial Officer
Marinus Cornelis Christoffel 13 February 2002 Chief Operating Officer
van Ettinger (65)
Alan Jerome Naidoo (35) 1 November 2012 Non-Executive Director
Andrew Alexander Maren 1 November 2012 Non-Executive Director
(37)
Gabriel Thona Magomola 1 November 2012 Independent Non-
(69) Executive Director
Gordon Kenneth Cunliffe 1 November 2012 Independent Non-
(64) Executive Director and
Chairman
Norbert Bruhin retired from the Company and as a director on 31 October 2012.
6. SHARE CAPITAL AND ISSUE/ REPURCHASE OF SHARES
During the year, Global increased its authorised share capital to 1 000 000 000 shares,
and issued 31 499 000 shares on 1 November 2012, taking the Company's issued
share capital to 31 500 000 ordinary shares. Shareholders are referred to subsequent
events below which details additional shares issued after the year end.
During the year under review, the Company did not repurchase any shares.
7. DIVIDEND
The Company has not declared a dividend for the year ended 30 November 2012
(2011: RNil) in line with its stated intention in the prospectus. The Company will be
considering a dividend payment for the forthcoming year.
8. LITIGATION
There is no litigation pending against the Company or its Subsidiary, which is expected
to have a material impact on the results of the Group.
9. CONTINGENT LIABILITIES
At the balance sheet date the Group does not have any contingent liabilities (2011:
RNil).
10. ANNUAL GENERAL MEETING
Audited results are expected to be finalised during early March and the annual report
will be posted to shareholders in due course. Shareholders are advised that the Annual
General Meeting of the Company will be held on 23 May 2013 at IOM House, 6 St Giles
Street, Randburg, at 09h00.
11. SUBSEQUENT EVENTS
Global listed on the Alternative Exchange of the Johannesburg Stock Exchange on
14 December 2012. The Company issued an additional 3 500 000 shares at R2.00 per
share raising R7 000 000. The equity raised during the listing will primarily be utilised to
develop the second hand rental business.
12. FUTURE PROSPECTS
The directors of the Company believe that the Group has excellent prospects to
significantly expand its operations over the near term. Based on its current pipeline of
projects and initiatives and strong management skills, coupled with an excellent
reputation as well as a proven track record, it is expected that Global will generate solid
returns for its shareholders.
By order of the Board
Chairman Chief Executive Officer
Johannesburg
1 March 2013
Registered Office
Ruimsig Country Office Park
Block E
129 Hole in One Avenue
Ruimsig
Roodepoort
1724
Directors
G.K. Cunliffe*; M.C.C van Ettinger; N. Penzhorn; W.P Basson; G.T Magomola*;
A.A Maren*; A.J Naidoo*
* - independent non-executive
Designated Advisor Transfer Office
Arcay Moela Sponsors Proprietary Limited Link Market Services Proprietary Limited
Date: 01/03/2013 08:27:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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