Wrap Text
Unaudited interim results for the period ended 28 February 2013
Sekunjalo Investments Limited
(Incorporated in the Republic of South Africa)
Registration number 1996/006093/06
Share code: SKJ and ISIN: ZAE000017893
("Sekunjalo" or "the Group" or "the Company")
Unaudited interim results for the period ended 28 February 2013
Condensed Group Statement of Comprehensive Income
Unaudited Unaudited Audited
Group to Group to Group to
28 February 29 February 31 August
2013 2012 2012
R'000 R'000 R'000
Revenue 225 339 178 090 455 860
Cost of sales (149 271) (110 524) (305 131)
Gross profit 76 068 67 566 150 729
Other income 3 834 1 745 3 700
Other operating expenses (63 103) (53 060) (125 252)
Fair value adjustments 16 074 10 342 30 081
Investment revenue 4 768 3 175 17 334
Loss from equity accounted investments (4 350) (3 628) (9 211)
Finance cost (9 048) (6 798) (19 251)
Profit before taxation 24 243 19 342 48 130
Taxation (8 094) (12 419) (29 931)
Profit for the period 16 149 6 923 18 199
Total comprehensive income 16 149 6 923 18 199
Total comprehensive income/(loss)
attributable to:
Equity holders of the parent 16 134 9 159 17 953
Non-controlling interest 15 (2 236) 246
16 149 6 923 18 199
Basic and diluted earnings per ordinary
share (cents) 3,30 1,87 3,67
Weighted (and fully diluted) average
number of ordinary shares in issue (000s) 489 339 489 339 489 339
Condensed Group Statement of Financial Position
Unaudited Unaudited Audited
Group to Group to Group to
28 February 29 February 31 August
2013 2012 2012
R'000 R'000 R'000
Assets
Non-current assets 723 636 599 223 673 555
Property, plant and equipment 139 792 139 786 135 500
Goodwill 34 191 34 191 34 191
Intangible assets 14 573 19 714 15 642
Investments in associates 116 606 126 564 120 956
Other loan receivables 61 969 45 668 25 322
Other financial assets 330 525 207 991 314 451
Deferred tax 23 556 23 280 25 219
Operating lease asset 2 424 2 029 2 274
Current assets 174 275 184 582 181 748
Inventory 25 234 20 173 17 851
Biological assets 38 787 35 027 38 537
Other financial assets 939 3 886 1 464
Current tax receivable 157 154 209
Trade and other receivables 73 477 93 817 77 434
Cash and cash equivalents 35 681 31 525 46 253
Total assets 897 911 783 805 855 303
Equity and liabilities
Equity
Equity attributable to equity holders
of parent
Share capital and share premium 403 177 403 177 403 177
Reserves 121 194 121 194 121 194
Accumulated losses (65 415) (90 342) (81 548)
458 956 434 029 442 823
Non-controlling interest 8 230 7 959 9 041
467 186 441 988 451 864
Liabilities
Non-current liabilities 272 113 190 455 253 872
Other financial liabilities 147 490 83 683 129 949
Operating lease liability 454 192 734
Deferred tax 123 830 104 739 123 189
Other non-current liabilities 339 1 841 -
Current liabilities 158 612 151 362 149 567
Trade and other payables 73 867 74 237 85 806
Other financial liabilities 24 323 15 636 37 784
Current tax payable 5 849 8 739 2 593
Provisions 16 670 16 782 16 766
Other current liabilities - 71 51
Bank overdraft 37 903 35 897 6 567
Total equity and liabilities 897 911 783 805 855 303
Net asset value per share (cents) 93,79 88,70 90,49
Tangible net asset value per share (cents) 83,83 77,68 80,31
Condensed Group Statement of Cash Flows
Unaudited Unaudited Audited
Group to Group to Group to
28 February 29 February 31 August
2013 2012 2012
R'000 R'000 R'000
Cash flows from operating activities 2 432 2 578 53 302
Cash flows from investing activities (13 369) (4 578) (96 437)
Cash flows from financing activities (30 971) 5 215 90 408
Total cash movement for the period (41 908) 3 215 47 273
Cash and cash equivalent at the
beginning of the period 39 686 (7 587) (7 587)
Cash and cash equivalents at the end of
the period (2 222) (4 372) 39 686
Condensed Group Statement of Changes in Equity
For the period ended 28 February 2013
Attributable Non-
to controlling Total
parent interest equity
R'000 R'000 R'000
Balance at 1 September 2011 424 870 10 195 435 065
Profit for the period 17 953 246 18 199
Dividends paid - (1 400) (1 400)
Balance at 31 August 2012 442 823 9 041 451 864
Profit for the period 16 134 15 16 149
Dividends paid - (827) (827)
Balance at 28 February 2013 458 957 8 230 467 186
Condensed Group Segmental Report
Information
Technology Fishing Healthcare
Unaudited Unaudited Unaudited
Group to Group to Group to
28 February 28 February 28 February
2013 2013 2013
R'000 R'000 R'000
Revenue 103 686 89 404 8 984
External sales 103 686 89 404 8 984
Segment results
Operating profit/(loss) 26 625 3 430 (3 868)
Carrying amount of assets 68 283 250 705 31 622
Carrying amount of liabilities 33 541 124 498 11 888
Biotechnology Corporate Group
Unaudited Unaudited Unaudited
Group to Group to Group to
28 February 28 February 28 February
2013 2013 2013
R'000 R'000 R'000
Revenue - 23 265 225 339
External sales - 23 265 225 339
Segment results
Operating profit/(loss) (4) 6 690 32 873
Included in segment results:
Fair valuation of investments - 16 074 16 074
Carrying amount of assets 177 435 369 866 897 911
Carrying amount of liabilities 24 909 235 889 430 725
Loss from associate (4 350) - (4 350)
Information
Technology Fishing Healthcare
Unaudited Unaudited Unaudited
Group to Group to Group to
29 February 29 February 29 February
2012 2012 2012
R'000 R'000 R'000
Revenue 73 184 76 017 9 219
External sales 73 184 76 017 9 219
Segment results
Operating profit/(loss) 26 436 1 122 (2 592)
Carrying amount of assets 79 711 250 348 35 072
Carrying amount of liabilities 37 785 116 437 10 903
Biotechnology Corporate Group
Unaudited Unaudited Unaudited
Group to Group to Group to
29 February 29 February 29 February
2012 2012 2012
R'000 R'000 R'000
Revenue - 19 670 178 091
External sales - 19 670 178 091
Segment results
Operating profit/(loss) - 1 627 26 593
Included in segment results:
Fair valuation of investments - 10 342 10 342
Carrying amount of assets 172 229 246 385 783 805
Carrying amount of liabilities 18 682 158 010 341 817
Loss from associate (3 628) - (3 628)
Notes
Revenue for the Fishing segment is highly seasonal. The majority of the sales occur in
the second half of the year. During the prior year annual external sales for the segment
amounted to R207m. The corresponding interim sales were R76m.
Determination of headline earnings
Unaudited Unaudited Audited
Group to Group to Group to
28 February 29 February 31 August
2013 2012 2012
R'000 R'000 R'000
Earnings attributable to ordinary
equity holders of parent entity IAS 33 16 134 9 159 17 953
Adjusted for:
Loss on disposal of property,
plant and equipment IAS 36 85 7 122
Impairment of intangible
assets IAS 38 - - 275
Headline earnings 16 219 9 166 18 350
Headline earnings per ordinary
share (cents) 3,31 1,87 3,75
Basis of preparation
The condensed consolidated financial statements are prepared in accordance with the JSE
Limited ("JSE") Listings Requirements for preliminary reports and the requirements of
the Companies Act of South Africa, 2008 as amended, applicable to summarised financial
statements. The JSE Listings Requirements require preliminary reports to be prepared in
accordance with the framework concepts, the measurement and recognition requirements of
International Financial Reporting Standards ("IFRS"), the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and also that they, as a minimum,
contain the information required by IAS 34 'Interim Financial Reporting'. The accounting
policies applied in the preparation of the summarised consolidated financial statements
from which the summary consolidated financial statements were derived are in terms of
IFRS and are consistent with the accounting policies applied in the preparation of the
previous consolidated annual financial statements.
The unaudited interim financial results were prepared by Takudzwa Hove BCom (Hons),
CA(SA)(ACMA).
Commentary
The Sekunjalo Group has delivered a satisfactory set of financial results for the
six-month period under review as the operations have performed in line with the
expectations.
There has been an increase in the net asset value ("NAV") as a result of an increase
in the value of the underlying investments and improving the performance of the
operations.
Key financial highlights
Group revenue has increased by 27% compared to the prior interim period from R178m to
R225m due to the improved operational performance of the underlying businesses.
Profit before taxation for the period has increased by 25% to R24m (2012: R19,3m)
as compared to the prior period which is due to the subsidiaries' consistent
performance as a result of the strategies implemented by management over the past
three years.
As a result, headline earnings have increased by 77% with headline earnings per share
("HEPS") growing by 1,44c from 1,87c in 2012 to 3,31c for the current period. Earnings
per share ("EPS") grew by 1,43c from 1,87c in 2012 to 3,30c for the current period.
If the dividend revenue was not taken into account from the interim prior period,
cash flows from operating activities has increased by R7m since prior period.
The Group's asset base has increased by R114m to R898m from R783m for the period
under review.
Net asset value ("NAV") per share grew to 93,79c from 88,70c in the prior period, while
tangible NAV per share grew to 83,83c from 77,68c for the prior period.
Financial liabilities increased by R72m during the period under review to fund
the growth of the Group's subsidiaries and associates.
The Information Technology Communication Group has achieved operating profits of R26m
which in line with prior interim period. This was obtained through the implementation
and roll-out of the long-term contracts secured during the prior financial years.
Premier Fishing SA (Pty) Ltd ("Premier Fishing") has achieved an operating profit for
the period of R3,4m. The major contributors being the south coast ("SCRL") and the
west coast rock lobster ("WCRL") divisions as well as improved operational
efficiencies.
The fishing sector generally performs better in the second half of the year due to the
seasonal nature of the industry.
Strategic investments
The Pioneer Food Group transaction concluded in the prior year has started to show
increased value at 28 February 2013.
Information technology and communication
Sekunjalo Technology Solutions Group (Pty) Ltd ("Sekunjalo TSG") is a wholly owned
subsidiary of Sekunjalo Investments Limited and focuses on the acquisition and
development of niche-market information and communication technology companies.
The ICT division has performed very well, with subsidiaries performing above targets,
and generating positive cash flow. The division s revenue has increased by 42% compared
to the corresponding interim period from R73m to R103m due to well-performing
businesses and efficiencies.
Saratoga Software (Pty) Ltd, a software development company which builds custom software
solutions for corporate customers, has grown consistently over the past few years and
is performing ahead of expectations.
Digital Matter (Pty) Ltd, an innovative technology company, providing mobile software
solutions for a range of industry applications including industrial plant and
equipment inspection and asset auditing is also performing above expectations.
Health System Technologies (Pty) Ltd ("HST"), a hospital information system ("HIS")
laboratory information system ("LIS") and pharmacy information system integrator and
provider, has continued to deliver steadily on its contract to roll out the centralised
HIS and Pharmacy solution to the Provincial Government of the Western Cape hospitals.
It successfully continues the implementation of the national centralised LIS for the
National Health Laboratory Services with 202 laboratories of the total 267 laboratories
already successfully rolled out.
Fishing
Premier Fishing has steadily maintained its performance with the major contribution
coming from the SCRL and WCRL division with good catching volumes to date and a weaker
rand. Interim results show an operating profit of R3,4m.
Aquaculture
The abalone division has produced good results in the first half of the year.
Management expect this trend to continue in the second half of the year.
Healthcare
The core dermatological range of products in the pharmaceutical division continues to
show improvement in performance, despite significant competition from generic
equivalents.
Biotechnology
Genius Biotherapeutics (formerly Bioclones), South Africa's largest medical biotechnology
company has continued with renovation work at the Centurion plant in order to commence
production.
Ribotech (Pty) Ltd ("Ribotech"), a subsidiary of Bioclones, has a production facility
for the manufacturing of Granulocyte-Colony Stimulating Factor ("G-CSF"), a product
used in the oncology market. The Ribotech facility continues its progress in its
research and development activities.
Media
espAfrika (Pty) Ltd, a Group subsidiary, has hosted the Cape Town International Jazz
Festival for the 13th year. The company's performance for the six months is an expected
operating loss as espAfrika has most of its events during the second half of the
financial year.
Events after reporting date
Subsequent to the reporting date, the Group acquired a 75% stake in World Wide Creative.
World Wide Creative is a digital marketing agency. This new investment will be managed
by Sekunjalo TSG.
Prospects
The Group will continue its focus to grow the ICT and Fishing divisions organically as
well as by acquisition as the operations continue to produce satisfactory results.
The ICT division has built a strong platform for further organic growth and has
positioned itself well to increase its investments by acquisition.
Amethst (Pty) Ltd - Parallel arbitration negotiations to resurrect the Gauteng
Department of Health and Social Development ("GDOHSD") Hospital Information System
("HIS") and Electronic Health Record ("EHR") contracts are ongoing.
As an investment holding group, we expect a challenging year for the global economy and
believe that our businesses will grow steadily from the successes of the past.
The Group's auditors have not reviewed nor reported on any comments relating to
future prospects.
Dividends
No dividends have been declared for the current period. The board continues to work
towards the payment of dividends in the foreseeable future.
Appreciation
We wish to acknowledge the support of our staff, Group executives, management, our board
of directors as well as our stakeholders and business partners for their loyalty and
dedication to the Group in producing these satisfactory results.
Dr MI Surve Mr Khalid Abdulla
Executive chairman Chief executive officer
Cape Town
18 April 2013
Directors
*Dr M Iqbal Surve (Executive chairman); *Khalid Abdulla (Chief executive officer);
Rev. Dr Vukile Mehana; Johannes Mihe Gaomab; Salim Young; Aziza Amod;
*Cherie Felicity Hendricks; *Chantelle Ah Sing
*Executive directors
Company secretary: Cherie Felicity Hendricks
Registered address: Quay 7, East Pier, Victoria and Alfred Waterfront, Cape Town 8001
Email: cherieh@sekunjalo.com
Transfer secretaries: Link Market Services South Africa (Pty) Ltd,
19 Ameshoff Street, 13th Floor, Rennie House, Braamfontein, Johannesburg 2000
Auditors: PKF (Cpt) Inc, Cape Town
Sponsor: PSG Capital, Stellenbosch
Date: 18/04/2013 12:41:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.