To view the PDF file, sign up for a MySharenet subscription.

Letshego Holdings Limited - Consolidated Audited Financial Results For The Year Ended 31 January 2013 - Debt Instruments LHL01, LHL02 and LHL03

Release Date: 18/04/2013 15:00
Code(s): LHL01 LHL02 LHL03     PDF:  
Wrap Text
Consolidated Audited Financial Results For The Year Ended 31 January 2013 - Debt Instruments LHL01, LHL02 and LHL03

LETSHEGO HOLDINGS LIMITED
Incorporated in the Republic of Botswana Co. 98/442

PRELIMINARY REPORT

The Board of Directors of Letshego Holdings Limited are pleased to present an extract from the consolidated audited financial results for the year ended 31 January 2013

FINANCIAL HIGHLIGHTS

*   Profit after tax up 14%
*   Advances up 10%
*   Profit before tax up 18%
*   Earnings per share up 12%
*   Impairment of advances down 7%
*   Dividend of 4.0 thebe per share

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                                            31 January     31 January
                                                                  2013           2012
                                                              (Audited)      (Audited)    Change
                                                                 P'000          P'000          %
ASSETS
Cash and cash equivalents                                     807   254       73   612
Short term investments                                         12   143       24   187
Advances to customers                                       3 336   204    3 034   639        10
Other receivables                                              26   206       18   730
Long term receivables                                          11   468       11   120
Property, plant and equipment                                  14   559        9   513
Intangible assets                                              12   457        3   291
Goodwill                                                       49   948       27   824
Deferred taxation                                               8   939        9   809
Total assets                                                4 279   178    3 212   725        33
LIABILITIES AND EQUITY
Liabilities
Trade and other payables                                       78   828       70 732
Cash collateral                                                34   185            -
Income tax                                                     28   327       14 275
Borrowings                                                  1 277   395      802 864          59
Total liabilities                                           1 418   735      887 871
Shareholders' equity
Stated capital                                                689   243      669   876
Foreign currency translation reserve                          (45   982)     (32   521)
Share based payment reserve                                    19   173       15   654
Retained earnings                                           2 112   485    1 617   969
Total equity attributable to equity holders of the parent
company                                                     2 774   919    2 270   978        22
Minority interest                                              85   524       53   876
Total shareholders' equity                                  2 860   443    2 324   854
Total liabilities and equity                                4 279   178    3 212   725        33

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME



                                                                                          31 January    31 January
                                                                                                2013          2012
                                                                                            (Audited)     (Audited)   Change
                                                                                               P'000         P'000         %

Interest income                                                                           1 074 822       900 514        19
Interest expense                                                                           (108 807)      (65 395)       66
Net interest income                                                                         966 015       835 119        16
Premium income                                                                               86 992        64 243
Insurance fees                                                                              (8 008)        (5 708)
Net interest and insurance income                                                         1 044 999       893 654
Fee and commission income                                                                   127 646        87 198
Other operating income                                                                       11 479        10 107
Operating income                                                                          1 184 124       990 959        19
Employee benefits                                                                          (123 086)     (100 297)       23
Other operating expenses                                                                   (157 395)     (113 367)       39
Insurance claim expense                                                                     (25 853)      (21 268)
Claim mitigation reserve movement                                                            (1 306)        (686)
Net income before impairment and taxation                                                   876 484       755 341        16
Impairment of advances                                                                      (35 097)      (44 109)      (20)
Profit before taxation                                                                      841 387       711 232        18
Income taxation                                                                            (181 750)     (133 433)
Profit for the period                                                                       659 637       577 799        14
Attributable to:
Equity holders of the parent company                                                        628 084         555 944
Minority interest                                                                            31 553          21 855
Profit for the period                                                                       659 637         577 799

Other comprehensive income, net of tax
Foreign currency translation differences arising from foreign operations                    (15 833)        (27 160)
Total comprehensive income for the period                                                   643 804         550 639


Attributable to:
Equity holders of the parent company                                                        614 623         533 197
Minority interest                                                                            29 181          17 442

Total comprehensive income for the period                                                   643 804         550 639      17

Weighted average number of shares in issue during the period (millions)                       1 995           1 953
Dilution effect - number of shares (millions)                                                   195             189
Number of shares in issue at the end of the period (millions)                                 1 999           1 985
Basic earnings per share (thebe)                                                               33.1            29.6      12
Diluted earnings per share (thebe)                                                             30.1            27.0


NOTE: The diluted EPS has been calculated based on shares that may vest in terms of
the Group's long term staff incentive scheme and a convertible loan in issue.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                                                           31 January     31 January
                                                                 2013           2012
                                                             (Audited)      (Audited)
                                                                P'000          P'000
Operating activities
Profit before taxation                                       841 387         711 232
Add : Amortisation and depreciation                            5 417           3 772
    : Impairment of advances                                   1 670          (8 771)
    : Loss on disposal of non current assets including
       subsidiaries                                              -                2
Movement in working capital and other changes               (255 336)      (782 565)
Cash from operations                                         593 138        (76 330)
Taxation paid                                               (166 828)      (178 775)

Net cash from/(used in) operating activities                 426 310       (255 105)
Investing activities
Net cash used in investing activities                        (33 631)        (20 821)

Financing activities
Dividends paid                                              (133 568)            -
Net receipts on borrowings                                   474 531         297 690
Net cash from financing activities                           340 963         297 690


Net movement in cash and cash equivalents                    733 642         21 764
Cash and cash equivalents at the beginning of the period      73 612         51 848
Cash and cash equivalent at the end of the period            807 254         73 612

RATIOS

                                                                             31 January           31 January
                                                                                   2013                 2012
                                                                               (Audited)            (Audited)
                                                                                  P'000                P'000

Annualised Return on average assets (%)                                            17.6                   20.5
Annualised Return on average equity (%)                                            25.4                   28.7
Cost to income ratio (%)                                                           26.0                   23.8
Debt to equity (%)                                                                 46.0                   35.4

                                                                                                                                      Foreign
                                                                                                                  Shared based       exchange
                                                                                                                      payments    translation   Minority
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY                  Stated capital      Retained earnings           reserve        reserve   interest       Total

                                                                                P'000                     P'000         P'000          P'000      P'000        P'000
Balance at 1 February 2012
                                                                              669 876                 1 617 969        15 654        (32 521)    53 876    2 324 854
Total comprehensive income for the period
Profit for the period                                                                  -                628 084               -             -     31 553     659 637
Other comprehensive income, net of income tax
Foreign currency translation reserve                                             -                        -               -             (13 461)           (2 372)             (15 833)
Transactions with owners, recorded directly in equity
New shares issued from long term incentive scheme                          19 367                      -            (19 367)                  -                 -                 -
Allocation of subsidiary net assets to NCI at time of acquisition               -                      -                  -                   -             2 467             2 467
Allocation to share based payment reserve                                       -                      -             22 886                   -                 -             22 886
Dividend to equity holders                                                      -               (133 568)                 -                   -                 -           (133 568)
Balance at 31 January 2013                                                689 243              2 112 485             19 173             (45 982)           85 524          2 860 443

Balance at 1 February 2011                                                412 814              1 334 016            12 545                  (9 774)       38 155           1 787 756
Total comprehensive income for the period
Profit for the period                                                            -               555 944                  -                      -         21 855               577 799
Other comprehensive income, net of income tax
Foreign currency translation reserve                                             -                        -               -             (22 747)           (4 413)              (27 160)
Transactions with owners, recorded directly in equity
Sale of minority interest in subsidiaries                                       -                  1 656                  -                   -                1 619              3 275
New shares issued from long term incentive scheme                          19 744                      -            (19 744)                  -                                       -
Allocation to share based payment reserve                                       -                      -             22 853                   -                 -             22    853
Dividend paid by subsidiary                                                     -                      -                  -                   -            (3 340)            (3    340)
Dividend to equity holders                                                237 318               (273 647)                 -                   -                 -            (36    329)
Balance at 31 January 2012                                                669 876              1 617 969             15 654             (32 521)           53 876          2 324    854

SEGMENTAL REPORTING
Regional geographical segments
                                                                        Southern Africa*          East Africa**                     Elimination                                     Group
                                                                       31 Jan       31 Jan      31 Jan      31 Jan             31 Jan          31 Jan                 31 Jan             31 Jan
                                                                         2013         2012        2013        2012               2013            2012                   2013               2012
                                                                        P'000        P'000       P'000       P'000              P'000           P'000                  P'000              P'000
Operating income                                                      926 085      855 351     258 039     135 608                  -               -              1 184 124            990 959

Segment profit before tax (before management and
guarantee fees)                                                       692 812        631 480   148 575         79 751                   -                 -         841 387                711 231
Taxation - consolidated                                                                                                                                            (181 750)              (133 433)
Profit for the period - consolidated                                                                                                                                659 637                577 798

Gross advances to customers                                         2 713 097    2 680 341     640 203        369 724                   -                 -        3 353 300             3 050 065
Impairment provisions                                                  (7 937)     (11 062)     (9 159)        (4 365)                  -                 -          (17 096)              (15 427)
Net advances                                                        2 705 160    2 669 279     631 044        365 359                   -                 -        3 336 204             3 034 638

Total segment assets                                                5 255 430    4 682 469     713 181        383 415     (1 689 433)            (1 853 159)      4 279 178           3 212 725

Borrowings                                                          1 092 101        680 222    185 293       122 642               -                     -        1 277 395               802 864

Total segment liabilities                                           2 575 759    2 425 600     532 409        315 430        (1 689 433)         (1 853 159)      1 418 735               887 871

Ratio analysis on regional geographic segments

                                                                        Southern Africa                   East Africa                                                            Group
                                                                       2013             2012      2013            2012                                                  2013                2012
Impairment charge to average advances (annualised)                     0.9%            1.4%       3.4%            1.7%                                                  1.3%                1.7%
Advances to total assets                                              51.5%           57.0%      88.5%           95.3%                                                 78.0%               94.5%
% of book on deduction code model                                     95.3%           97.6%      78.1%          100.0%                                                 97.8%               99.0%
Customers employed by government (%)                                  96.6%           96.5%      78.1%          100.0%                                                 94.4%               96.0%
Customers employed by parastatal or private sector (%)                 3.4%            3.5%      21.9%            0.0%                                                 5.6%                 4.0%
Debt to equity (%) (Includes intercompany borrowings)                 42.4%           28.0%      34.8%           38.9%                                                 46.0%               35.4%
Cost to income ratio (%)                                                24%              22%       36%             32%                                                 26.0%               24.0%

* Southern Africa includes: Botswana, Lesotho, Mozambique, Namibia, Swaziland and Zambia
** East Africa includes: Kenya, Rwanda, South Sudan, Tanzania and Uganda

COMMENTARY

Highlights
The Board of Directors is pleased to present an extract of the audited
consolidated financial results of the Letshego Holdings Limited Group ("the Group")
for the year ended 31 January 2013. Highlights for the year include:

  -   Advances to customers increased by 10% to P3.3 billion (2012: P3.0
      billion)
  -   Profits before tax increased by 18% to P841.3 million (2012: P711.2
      million)
  -   Impairment charges of 1.3% on the average advances book (2012: 1.6%)
  -   40% of profits before tax generated outside of Botswana (2012: 35%)
  -   Micro Africa Limited ("MAL") acquisition completed and contributed P6.7
      million to profit before tax for the seven months since acquisition
  -   ZAR700 million raised from the maiden issue of Letshego's JSE listed
      medium term note programme in December 2012
  -   Dividend declared during the year equates to 25% of profit after tax.

Financial performance
During a challenging year, a satisfactory performance was still achieved in terms
of growth in the advances book. Despite the planned decline in Botswana assets
there was compensating growth from Mozambique and Tanzania and to a lesser
extent Namibia and Uganda. MAL contributed P146 million in net
advances to customers which also impacted on the overall increase of 10% on
2012 advances book.

The quality of the advances book was within target levels with an impairment
charge of 1.3% for the year as compared to 1.6% in the prior year.

The Group remains well capitalised and has cash resources of over P800 million
which are available to further growing the business.

Profitability was creditable with an 18% increase in profit before tax and a 12%
increase in earnings per share. Margins were consistent despite the competitive
environment and our average cost of borrowings also remaining unchanged
relative to prior years.

Operating and staff costs increased significantly (by 31% to P280 million) mainly
due to the higher cost structure and personnel levels brought about by the MAL
acquisition, new regulatory fees in Botswana for a full year, a full year
operating a larger branch network in Mozambique and costs associated with
Group-wide ICT projects and transformation activities. If these costs were
removed from the operating and staff costs, the attributable year on year
increase would have been 11%.

The increase in profit after tax is lower than the increase in profit before tax due
to the tax credit impact of the once off scrip dividend recorded in the prior year.

Regulatory environment
Central Registries continue to operate effectively in   Botswana, Namibia,
Swaziland and Uganda. The Group strongly supports any   efforts by regulators
and industry players to regularise lending practices,   protect consumers and
ensure a sustainable industry. We continue to promote   the establishment of
independent Central Registries in all countries where   we have a presence.

Certain Group operations are regulated by Central Banks, either as a non-
deposit taking financial institution or a deposit taking one. This is in line with the
strategic objectives of the Group to transform into a broader financial services
entity and license applications have been submitted in certain territories in
this regard.

Funding
The Group has sufficient funding in place for existing operations for the year
ahead and continues to explore the most effective methods of funding
operations and growth.

Post year end developments
The remaining shares (37.48% of voting rights and ordinary shares) in Micro
Africa Limited were acquired during March 2013 for a consideration of USD1.9
million making MAL a 100% subsidiary of Letshego.

Rebranding of MAL to Letshego has commenced in Kenya with a change of the name to
Letshego Kenya.

Lending in Zambia was discontinued during February 2013 and efforts will be
directed at administering and collecting the remaining advances book.

Convertible Loan Note
In terms of the Convertible Loan Note Subscription Agreement entered into with
ADP I Holding 2 and which was approved by shareholders on 12 April 2010, notice
has been received from ADP I Holding 2 that they will convert the loan and
accrued interest of P252,969,373 into ordinary shares in the company using the
shareholder approved conversion price of P1.60 per share. The conversion is
expected to take place on or before 26 April 2013 and will result in 158,105,858
new ordinary shares being issued in terms of the agreement and bringing the total
number of ordinary shares in issue to 2,156,744,472 with a value of P942,213,373.

Prospects
   - The Group continues to actively explore new regions in Africa, new
      business streams, both through acquisitive and "green fields" methods
   - Prospects in existing operations remain positive and we continue to take
      a cautious approach to the market in Botswana and Swaziland as
      previously communicated to Shareholders
   - Applications for banking and/or deposit-taking licences are underway in
      certain territories within the Group

Given prevailing economic conditions, the Directors expect continued growth in
the advances book during the financial year to 31 January 2014 and continued
profitability.

Dividends
Notice is hereby given that the board has declared a final dividend of 4.0 thebe
per share for the year ending 31 January 2013. This brings the total dividends
declared during the current financial period to 8.2 thebe (P170 million).


In terms of the Botswana Income Tax Act (Cap:50:01) as amended, withholding
tax at the rate of 7.5% or any other currently enacted tax rate will be deducted
from the final gross dividend for the year ended 31 January 2013.

Important dates pertaining to this dividend are:
Declaration date                   17 April 2013
Last date to register              3 May 2013
Dividend payment date              10 May 2013

For and on behalf of the Board of Directors.

J A Burbidge                                             J A Claassen
Chairman                                                 Managing Director

GABORONE, 18 April 2013

NON EXCUTIVE DIRECTORS: J A Burbidge (Chairman) (GB), M Dawes (RSA), G Hassam (Malawi), J de Kock (RSA), I M Mohammed (USA), S Price (GB), L E Serema (Botswana), R Thornton (USA)
                        R N Alam (alternate to I M Mohammed) (USA), Gerrit van Heerde (alternate to M Dawes) (RSA)

EXCUTIVE DIRECTORS: J A Claassen (Managing Director) (RSA), D Ndebele (Director: Risk and Compliance) (Botswana)

TRANSFER SECRETARIES: PricewaterhouseCoopers (Pty) Limited, Plot 50371, Fairground Office Park, Gaborone, Botswana

REGISTERED OFFICE: Plot 50371, Fairground Office Park, Gaborone, Botswana

www.letshego.com

Debt sponsor in South Africa
Rencap Securities (Pty) Ltd

Sponsoring broker in Botswana
Stockbrokers Botswana Limited

Date: 18/04/2013 03:00:00 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.

Share This Story