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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
Date: 04/03/2013 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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