NEW BOND CAPITAL LIMITED - Unaudited results for the six months ended 31 December 2012

Release Date: 04/03/2013 08:30
Code(s): NBC
 
Wrap Text
Unaudited results for the six months ended 31 December 2012

NEW BOND CAPITAL LIMITED (previously Mvelaphanda Group Limited)
(Incorporated in the Republic of South Africa)  
Registration number 1995/004153/06  
Ordinary share code: NBC  
Ordinary share ISIN: ZAE000170726
(New Bond Capital, the Company or the Group)

Unaudited results for the six months ended 31 December 2012

- Realisation and unbundling strategy largely concluded 
- R1,110 billion proceeds on realisation of investment in Batho Bonke 
- Times Media Group shares unbundled to shareholders at R13.50 per share and 
- Cash distribution of 211 cents per share representing 93% of the remaining net asset value of the Group

 
NEW BOND CAPITAL LIMITED
SIX MONTHS ENDED 31 DECEMBER 2012
Summarised Group statement of comprehensive income 
                                                                     UNAUDITED                                  UNAUDITED                 AUDITED
                                                                   31 DECEMBER                                31 DECEMBER                 30 JUNE
                                                                          2012          % change                     2011                    2012

                                                                         R000                                      R000                   R000	

Continuing operations	 	 	 	 	 	 	 	 
 	 	 	 	 	 	 	 	 
Revenue                                                                      -                                          -                       -
 	 	 	 	 	 	 	 	 
Loss from operations                                                   (31 172)          (148.7%)                 (12 532)                (25 502)

Loss from operations pre-exceptional items                             (31 172)                                    (9 390)                (25 502)
Exceptional items                                                            -                                     (3 142)                      -
 	 	 	 	 	 	 	 	 
Net interest income/(expense)                                            5 818                                     (7 691)	 	  (14 398)

Interest income                                                         11 709                                      4 788                  13 722
Interest expense                                                        (5 891)                                   (12 479)                (28 120)
 	 	 	 	 	 	 	 	 
Share of income/(loss) from associate                                        -                                      7 317                (104 044)
Dividend income                                                              -                                     13 631                  16 316
Net gain on unbundling of Times Media Group Limited 
shares to shareholders                                                  39 341                                          -                       -
Net loss on realisation of investment in Batho Bonke                   (12 143)                                         -                       -
Other fair value adjustments and net profit/(loss) on disposal of 
investments                                                                  -                                     93 080                 (96 061)

 	 	 	 	 	 	 	 
Profit/(loss) before taxation from continuing operations                 1 844            (98.0%)                  93 805                (223 689)
 	 	 	 	 	 	 	 	 
Taxation                                                                (5 126)                                     3 657                    (182)

Normal, deferred, capital gains and securities transfer tax             (5 126)                                     3 657                     625
Secondary tax on companies                                                   -                                          -                    (807)
 	 	 	 	 	 	 	 	 
(Loss)/profit for the period                                            (3 282)          (103.4%)                  97 462                (223 871)
 	 	 	 	 	 	 	 	 
Total comprehensive (loss)/income for the period                        (3 282)          (103.4%)                  97 462                (223 871)


NEW BOND CAPITAL LIMITED 
SIX MONTHS ENDED 31 DECEMBER 2012
Summarised Group statement of comprehensive income

                                                                      UNAUDITED                                 UNAUDITED                 AUDITED
                                                                    31 DECEMBER                               31 DECEMBER                 30 JUNE
                                                                           2012          % change                    2011                    2012	
 	 
                                                                          R000                                     R000                   R000

Total comprehensive (loss)/income for the period attributable to:
	 	 	 	 	 	 	 	 
Owners of the parent                                                     (1 751)                                   88 218                (203 975)
Other shareholders                                                       (1 531)                                    9 244                 (19 896)

- Preference shareholders                                                     -                                       197                     197
- Non-controlling interests                                              (1 531)                                    9 047                 (20 093)
 	 	 	 	 	 	 	 	 
Total comprehensive (loss)/income for the period                         (3 282)                                   97 462                (223 871)
 	 	 	 	 	 	 	 	 
Weighted average net number of ordinary shares in issue (000)           520 708                                   529 426                 527 106
 	 	 	 	 	 	 	 	 
Basic (loss)/earnings per ordinary share (cents)                           (0.3)          (102.0%)                   16.7                   (38.7)
Basic headline (loss)/earnings per ordinary share (cents)                  (5.8)          (135.0%)                   16.7                   (13.2)
 	 	 	 	 	 	 	 	 
Dividends per preference share (cents)                                        -           (100.0%)                   74.2                    74.2 

Interim                                                                       -                                      38.1                    36.1 
Arrear                                                                        -                                      36.1                       -   
Final                                                                         -                                         -                    38.1 
 	 	 	 	 	 	 	 	 
Dividends and distributions per ordinary share (cents)                    214.5            100.0%                       -                       -  
Distribution of Times Media Group Limited shares to 
shareholders 	                                                            3.5                                         -                       -   

Interim cash dividend                                                     211.0                                         -                       -   
 
NEW BOND CAPITAL LIMITED
SIX MONTHS ENDED 31 DECEMBER 2012
Summarised Group statement of financial position

                                                                      UNAUDITED                                 UNAUDITED                AUDITED              
                                                                    31 DECEMBER                               31 DECEMBER                30 JUNE
                                                                           2012                                      2011                   2012
	 					
                                                                          R'000                                     R'000                  R'000
ASSETS	 	 	 	 	 	 
 	 	 	 	 	 	 
Non-current assets                                                          146                                   644 566                    444

Property, plant and equipment                                               146                                     1 099                    444
Investment in associate                                                       -                                   642 702                      -
Deferred taxation                                                             -                                       765                      -
 	 	 	 	 	 	 
Current assets                                                        1 193 245                                 2 178 711              2 415 700

Investment in associate                                                       -                                         -                531 341
Other investments                                                        30 000                                 1 979 503              1 363 995
Other current assets                                                        467                                     5 966                  6 669
Cash and cash equivalents                                             1 162 778                                   193 242                513 695
 	 	 	 	 	 	 
TOTAL ASSETS                                                          1 193 391                                 2 823 277              2 416 144
 	 	 	 	 	 	 
EQUITY AND LIABILITIES	 	 	 	 	 	 
 	 	 	 	 	 	 
Capital and reserves                                                     80 593                                 2 451 935              2 099 224

Owners of the parent                                                     80 593                                 2 245 807              1 922 235
Non-controlling interests                                                     -                                   206 128                176 989
 	 	 	 	 	 	 
Non-current liabilities                                                       -                                   329 569                      -

Financial liability                                                           -                                   292 189                      -
Deferred taxation                                                             -                                    37 380                      -
 	 	 	 	 	 	 
Current liabilities                                                   1 112 798                                    41 773                316 920

Interest-bearing liabilities                                                  -                                    35 000                310 143
Dividend payable                                                      1 098 695                                         -                      -
Other current liabilities                                                14 103                                     6 773                  6 777
 		 	 	 	 	 
TOTAL EQUITY AND LIABILITIES                                          1 193 391                                 2 823 277              2 416 144
 	 	 	 	 	 	 
Net number of ordinary shares in issue (000)                            520 708                                   529 708                520 708
Net asset value per ordinary share (cents)                                   15                                       424                    369
Net tangible asset value per ordinary share (cents)                          15                                       424                    369


 
NEW BOND CAPITAL LIMITED
SIX MONTHS ENDED 31 DECEMBER 2012
Summarised Group statement of cash flows

	 	                                                       UNAUDITED                                UNAUDITED                AUDITED           
                                                                     31 DECEMBER                              31 DECEMBER                30 JUNE
                                                                            2012                                     2011                   2012
	 					
                                                                           R'000                                    R'000                  R'000

Profit/(loss) before taxation                                              1 844                                  (12 532)              (223 689)
Non-cash items                                                           (32 721)                                     154                198 768
Working capital                                                            8 265                                   17 776                 20 557

Cash (utilised)/generated by operations                                  (22 612)                                   5 398                 (4 364)
Interest income received                                                  11 709                                    4 788                 13 722
Interest expense paid                                                        (87)                                    (241)                  (852)
Investment income received                                                     -                                   11 192                 11 191
Normal taxation (paid)/refunded                                                -                                     (103)                   577

Cash (utilised)/generated by operating activities before the 
payment of capital gains tax                                             (10 990)                                  21 034                 20 274
Capital gains tax paid                                                         -                                   (6 034)               (47 801)

Cash effects of operating activities                                     (10 990)                                  15 000                (27 527)
 	 	 	 	 	 	 
Cash effects of investing activities                                     976 020                                  139 721                561 734
 	 	 	 	 	 	 
Cash effects of financing activities                                    (315 947)                                 (25 398)               (84 234)
 	 	 	 	 	 	 
Dividends paid                                                                 -                                        -                   (197)
 	 	 	 	 	 	 
Net increase in cash and cash equivalents                                649 083                                  129 323                449 776
Cash and cash equivalents at the beginning of the period                 513 695                                   63 919                 63 919

Cash and cash equivalents at the end of the period                     1 162 778                                  193 242                513 695
 

NEW BOND CAPITAL LIMITED
SIX MONTHS ENDED 31 DECEMBER 2012
Summarised Group statement of changes in equity
	 
                                                                       UNAUDITED                                UNAUDITED                AUDITED
                                                                     31 DECEMBER                              31 DECEMBER                30 JUNE
                                                                            2012                                     2011                   2012

                                                                           R'000                                    R'000                  R'000

Balance at the beginning of the period                                 2 099 224                                2 357 323              2 357 323

Release of non-controlling interests share on realisation 
of Batho Bonke investment                                               (175 458)                                       -                      -
Issued share capital*                                                          -                                        1                      -
Treasury shares disposed                                                       -                                        -                      1
Buy-back of ordinary shares                                                    -                                        -                (31 102)
Redemption of perpetual preference shares                                      -                                   (2 654)                (2 654)
Redeemable option-holding shares lapsed                                        -                                        -                   (276)
Total comprehensive (loss)/income for the period                          (3 282)                                  97 462               (223 871)
Dividends and distributions                                           (1 839 891)                                    (197)                  (197)

Balance at the end of the period                                          80 593                                2 451 935              2 099 224

* Sale of New Bond Capital ordinary shares held in share 
incentive trust 	 	 	 	 	 	 

NEW BOND CAPITAL LIMITED
SIX MONTHS ENDED 31 DECEMBER 2012
Reconciliation between (loss)/earnings attributable to 
owners of the parent and headline (loss)/earnings 
attributable to owners of the parent                                    
                                                                       UNAUDITED                                UNAUDITED                AUDITED           
                                                                     31 DECEMBER                              31 DECEMBER                30 JUNE
                                                                            2012                                     2011                   2012
	 					
                                                                           R'000                                    R'000                  R'000
 	 	 	 	 	 	 
(Loss)/earnings attributable to owners of the parent                      (1 751)                                  88 218               (203 975)
 	 	 	 	 	 	 
Net gain on realisation of investments                                   (27 198)                                       -                      -
Non-headline items of associate companies                                      -                                        -                 (4 684)
Impairment to investment in associate                                          -                                        -                138 108
Loss on disposal and impairments of property, plant and 
equipment                                                                    108                                        -                    113
Non-controlling interest effects                                          (1 531)                                       -                      -
Tax effects                                                                    -                                        -                    607
 	 	 	 	 	 	  
Headline (loss)/earnings attributable to owners of the parent            (30 372)                                  88 218                (69 831)


NEW BOND CAPITAL LIMITED
SIX MONTHS ENDED 31 DECEMBER 2012
Segmental information
                                                                       UNAUDITED                                UNAUDITED                AUDITED             
                                                                     31 DECEMBER                              31 DECEMBER                30 JUNE
                                                                            2012                                     2011                   2012
		
                                                                           R'000                                    R'000                  R'000
 	 	 	 	 	 	 
NET ASSETS	 	 	 	 	 	 
Financial activities                                                      50 593                                        -              1 365 278
Consumer services                                                              -                                  387 145                      -
Financial services                                                             -                                1 532 011                      -
Construction and infrastructure                                           30 000                                   51 607                 30 000
Telecoms, media and technology                                                 -                                  481 172                703 946
                                                                          80 593                                2 451 935              2 099 224


(LOSS)/PROFIT FOR THE PERIOD	 	 	 	 	 	 
Financial activities                                                      (3 282)                                       -                (56 718)
Consumer services                                                              -                                   36 262                      -
Financial services                                                             -                                   94 391                      -
Construction and infrastructure                                                -                                  (32 039)               (53 646)
Telecoms, media and technology                                                 -                                   (1 152)              (113 507)

                                                                          (3 282)                                  97 462               (223 871)
Commentary

Introduction

During the interim period the Group implemented the final stages of its investment strategy, and realised the majority of its remaining assets
thereby unlocking shareholder value.  

The Company changed its name from Mvelaphanda Group Limited to New Bond Capital Limited to avoid any further confusion with other companies who 
also incorporate the name Mvela.

In September 2012, New Bond Capital acquired the entire issued ordinary share capital of Times Media Group Limited (TMG) (previously Avusa) and 
immediately unbundled all of its shares in TMG to its shareholders at a share price of R13.50 per share, representing a total capital distribution 
of R741.2 million. This allowed New Bond Capital shareholders to hold a direct interest in a leading media entertainment company. 

In November 2012, the Group realised its investment in Batho Bonke for R1,110 billion, which was received in cash.  Subsequent to this, New Bond 
Capital declared a cash dividend of R1,098 billion (211,0 cents per share) which was paid to shareholders on 14 January 2013.

In January 2013, New Bond Capital realised its remaining investment when it sold its entire stake in Group Five for a cash consideration of R30.0 million.

The Groups remaining funds will be used for administrative expenses required to complete the complex and extensive task of settling outstanding 
liabilities and unwinding structures in the various Group subsidiaries. This is expected to be a lengthy process as the Group has had a long operating 
history and there are a number of unresolved queries relating to prior years which need to be resolved. 
 
Financial overview

Financial performance

The loss for the six month period attributable to holders of equity in the parent amounted to R3.3 million, which translates to a loss per share of 0.3 cents. 
This arose mainly due to the costs incurred in finalising the aforementioned transactions, provisions raised for employee retirement benefits arising from 
past commitments made by the Group, as well as the underprovision for taxation in prior years.

A net gain of R39.3 million arose on the unbundling of TMG shares to its shareholders, following the Groups acquisition of the entire issued ordinary share 
capital of Avusa (now TMG) that it did not already own.

A net loss of R12.1 million was recognised on the realisation of the Groups investment in Batho Bonke. This mainly arose as the cash received on realisation 
of the investment was less than the fair value of the investment at 30 June 2012 (both of which were impacted by the Absa share price).   

Interest income of R11.7 million was earned on cash balances, and the interest expense of R5.9 million arose on the TMG preference debt. This debt 
was subsequently settled upon the unbundling of TMG.


Financial position

Investment overview

The Group realised two of the three investments held at 30 June 2012, namely its investment in Batho Bonke and its investment in TMG.  

At 30 June 2012, the Group owned an effective 47.3% (after deducting minorities interests) in the unlisted entity Batho Bonke, of which 21.3% was a direct 
interest in Batho Bonke and the remaining 26% was an effective interest (net of minorities interests) held through special-purpose vehicles (SPVs).  
Batho Bonke held Absa ordinary shares in the open market, which it disposed of by way of a private placement during the latter part of 2012. In November 2012, 
Batho Bonke distributed its entire net asset value in the form of a cash dividend to its shareholders. Thereafter the SPVs immediately distributed their net 
cash balances after settling all liabilities. Subsequent to this transaction, New Bond Capital impaired its remaining interest in Batho Bonke to nil as in 
effect the investment has been fully realised.  

New Bond Capital realised its investment in Avusa, (now renamed TMG) by acquiring the remaining ordinary shares in TMG that it did not already own and 
subsequently unbundling all of its shares in TMG to its shareholders.  

At 31 December 2012, the Groups strategic investments comprised an investment in Group Five carried at its fair value of R30.0 million. In January 2013 the 
sale of this investment generated cash proceeds of R30.0 million.  

The Groups net cash position increased by R649.1 million to R1,163 billion of which R1,110 billion was received on realisation of the Batho Bonke investment. 
Of the cash balance of R1,163 billion, R1,098 billion was returned to shareholders in January 2013 in the form of a cash dividend which was declared in December 2012.

Other current liabilities of R14.1 million comprise provisions for employee retirement benefits arising from past commitments made by the Group, as well as 
outstanding tax liabilities. 

Capital structure

There was no change to authorised share capital during the current year. The ordinary shares in issue decreased to 520,708,365, following the Company's 
repurchase of 35,765,285 of its own ordinary shares from its wholly owned subsidiary, Mvelaphanda Treasury and Financial Services (Pty) Limited. 
These shares were cancelled. All issued shares have been fully paid up. 

Intrinsic net asset value

The Groups intrinsic net asset value at 31 December 2012 is equal to its consolidated net asset value of R80.6 million.Based on New Bond Capitals ordinary share price
listed on the JSE of 219 cents on 31 December 2012 (trading at an ex-dividend price of 8 cents), the ordinary shares were trading at a discount of 53% to the Group's
intrinsic net asset value per ordinary share of 15 cents at that date.


Changes to the board

As at 31 December 2012, the board comprised three executive directors and one independent non-executive director. 

Mr Kuseni Dlamini and Mr Oyama Mabandla, both non-executive directors, resigned from the board with effect from 5 December 2012. The board wishes to thank both 
Mr Dlamini and Mr Mabandla for their insight, contributions and years of loyal service to the board and Company during their tenure.

Outlook going forward 

Now that the Groups underlying investments have been realised for the benefit of its shareholders, New Bond Capital will focus on settling outstanding liabilities 
and winding up all of the entities within the Group. Given the nature of this process, the directors are unable to determine the timing of its completion.

Accounting policies and international financial reporting standards

The unaudited summarised consolidated financial statements for six months ended 31 December 2012 have been prepared in accordance with International Financial 
Reporting Standards (IFRS),including IAS 34,the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, JSE Listings Requirements, and 
in the manner required by the Companies Act of South Africa, as amended.

The accounting policies adopted are consistent with the accounting policies in terms of IFRS and are consistent with accounting policies applied in the audited 
annual financial statements for the previous year ended 30 June 2012. The unaudited financial results for the six months ended 31 December 2012 were compiled 
under the supervision of William Marshall-Smith, interim Financial Director.

Events subsequent to the reporting date

On 17 January 2013, the sale of the investment in Group Five for R30.0 million was effected as the remaining conditions of sale were fulfilled and the proceeds 
received in cash.

MSM Xayiya
Executive Chairman
4 March 2013

Executive directors:            MSM Xayiya (Executive Chairman), AD Bonamour (Interim CEO), W Marshall-Smith (Interim FD) 
Non-executive directors:        ZP Ntshalintshali (independent)
Registered office:              2nd Floor, 11 Crescent Drive, Melrose Arch, 2076
Sponsor:                        PSG Capital (Pty) Limited, 1st Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600
Transfer secretaries:           Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001

www.newbondcapital.co.za





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