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Audited results for the year ended 30 June 2013 and Notice of annual general meeting
CAPEVIN HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 1997/020857/06
JSE share code: CVH
ISIN number: ZAE000167714
("Capevin Holdings" or "the company" or "the group")
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2013 AND NOTICE OF ANNUAL GENERAL MEETING
- Normalised headline earnings per share increased by 15,6% to 43,8 cents
- Headline earnings per share increased by 12,3% to 34,6 cents
- Intrinsic value per share increased by 15,1% to R8,13
- Final dividend per share increased by 20,6% to 11,7 cents
SUMMARY CONSOLIDATED INCOME STATEMENT
Audited Audited
30 June 30 June
2013 2012
R'000 R'000
Share in profits of associate 317 249 281 167
Gain on dilution of interest in associate 2 644 1 496
Investment income 527 413
Administrative expenses (2 476) (6 583)
Profit before taxation 317 944 276 493
Taxation (3 335) (122)
Profit for the year 314 609 276 371
Attributable to:
Owners of the parent 292 208 138 582
Non-controlling interests 22 401 137 789
314 609 276 371
Earnings per share (cents)
- Attributable (basic and diluted) 35,2 30,9
Number of shares (thousands)
- In issue 880 103 447 923
- Weighted average 829 189 447 923
SUMMARY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Audited
30 June 30 June
2013 2012
R'000 R'000
Profit for the year 314 609 276 371
Items that may be reclassified subsequently
to profit or loss:
Tax charge relating to available-for-sale
financial asset (12)
Share of other comprehensive income of associate
Fair value adjustments - available-for-sale
financial assets 2 396 1 487
Currency translation differences 84 568 7 964
Items that will not be reclassified to
profit or loss:
Share of other comprehensive income of associate
Actuarial gains and losses 66 930 6 573
Other equity movements of associate 5 415 5 337
Total comprehensive income for the year 473 918 297 720
Attributable to:
Owners of the parent 453 173 149 464
Non-controlling interests 20 745 148 256
473 918 297 720
SUMMARY CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
30 June 30 June
2013 2012
R'000 R'000
ASSETS
Non-current assets 2 095 530 1 794 697
Investment in associate 2 095 280 1 794 447
Available-for-sale financial asset 250 250
Current assets
Cash and cash equivalents 2 641 3 445
Total assets 2 098 171 1 798 142
EQUITY AND LIABILITIES
Equity
Ordinary shareholders' interest 2 092 976 911 698
Non-controlling interests - 879 328
Total equity 2 092 976 1 791 026
Non-current liabilities
Deferred taxation 47 47
Current liabilities 5 148 7 069
Trade payables 606 2 769
Unclaimed dividends 4 037 4 245
Income tax payable 505 55
Total equity and liabilities 2 098 171 1 798 142
Net asset value per share (cents) 237,8 203,5
Net tangible asset value per share (cents) 237,8 203,5
SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Audited
30 June 30 June
2013 2012
R'000 R'000
Ordinary shareholders' equity at
beginning of year 911 698 842 531
Total comprehensive income 453 173 149 464
Unclaimed dividends written back 1 412 777
Shares issued 2 485 035
Dividends paid (173 380) (81 074)
Transactions with non-controlling interest (1 584 962)
Ordinary shareholders' equity at end of year 2 092 976 911 698
Non-controlling interests' equity at
end of year - 879 328
Beginning of year 879 328 809 184
Total comprehensive income 20 745 148 256
Unclaimed dividends written back 71
Dividends paid (78 183)
Transactions with non-controlling interest (900 073)
Total equity at end of year 2 092 976 1 791 026
Dividend per share (cents)
- Interim 10,0 9,4
- Final 11,7 9,7
SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
30 June 30 June
2013 2012
R'000 R'000
Cash flows from operating activities
Administrative expenses (2 476) (6 583)
Decrease in trade and other receivables 5
(Decrease)/increase in trade and other
payables and unclaimed dividends (959) 3 979
Cash utilised in operations (3 435) (2 599)
Interest received 519 406
Taxation paid (2 885) (142)
Dividends paid (173 380) (159 257)
Dividends received 178 377 161 361
Net decrease in cash and cash equivalents (804) (231)
Cash and cash equivalents at beginning of year 3 445 3 676
Cash and cash equivalents at end of year 2 641 3 445
NOTES TO THE SUMMARY CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES
The summary consolidated financial statements have been prepared in accordance
with the recognition and measurement principles of International Financial Reporting
Standards ("IFRS"), including IAS 34 Interim Financial Reporting; the SAICA
Financial Reporting Guides, as issued by the Accounting Practices Committee; the
Financial Reporting Pronouncements as issued by the Financial Reporting Standards
Council; the requirements of the South African Companies Act of 2008, as amended;
and the Listings Requirements of the JSE Ltd. The accounting policies applied
in the preparation of these summary consolidated financial statements are consistent
with those used in the previous financial year. The only amendment that is effective
for the first time in the current financial year is:
- Amendments to IAS 1 - Presentation of Financial Statements (effective 1 July 2012)
The adoption of these amendments has had no material impact on the consolidated
results of either the current or prior years.
2. GROUP STRUCTURE
The sole investment of Capevin Holdings is an effective interest of 28,90% (30 June
2012: 14,78%) in the issued share capital of Distell Group Ltd ("Distell"), held
via its 50% interest in Remgro-Capevin Investments Ltd.
3. RELATED PARTY TRANSACTIONS
During the year the group received dividends from Remgro-Capevin Investments Ltd
(an associate) of R178 369 000, and the group paid administrative fees of R810 000
(2012: R1 244 000) and a sponsor fee of R33 000 (2012: R31 000) to PSG Corporate
Services (Pty) Ltd (a fellow subsidiary of an investor with significant influence
over the group at the time of the expenses being incurred).
4. SEGMENT REPORT
Capevin Holdings is an investment holding company with its sole investment being
an effective interest in Distell. The directors have not identified any other
segment to report on.
Audited Audited
30 June 30 June
2013 2012
R'000 R'000
5. HEADLINE EARNINGS
Profit for the year attributable to owners
of the parent 292 208 138 582
Non-headline items
Interest in adjustments of associate (3 135) 180
Gain on dilution of interest in associate (2 644) (763)
Taxation effect of non-headline items 130 (50)
Headline earnings 286 559 137 949
Abnormal excise and interest provision
and the impact of new business acquisitions,
net of taxation 76 417 31 686
Normalised headline earnings * 362 976 169 635
Headline earnings per share (cents) 34,6 30,8
Normalised headline earnings per share (cents) * 43,8 37,9
* Normalised headline earnings excludes the impact of an additional excise duty and
interest provision and the impact of new business acquisitions by Distell.
Normalised headline earnings and normalised headline earnings per share are not
included in IFRS and are therefore not audited.
6. CONTINGENCY
In the prior year Distell received an assessment from the South African Revenue Service
with regards to additional employees tax relating to the Distell group's share incentive
scheme. During the year under review, Distell was successful in its objection to the
assessment and therefore no contingent liability exists.
7. BLACK ECONOMIC EMPOWERMENT (BEE) AND DILUTION OF INTEREST IN ASSOCIATE
In October 2005 Distell entered into a broad-based black economic empowerment transaction.
As part of this transaction, options on Distell shares were issued to the BEE consortium
and have been accounted for in terms of IFRS 2, Share Based Payments.
The cost of this transaction to Distell's shareholders, calculated by using an option
pricing model, equated to R122,3 million. R67,2 million of this amount related to
non-employees and has been expensed in full in the 2006 financial year. The remaining
R55,1 million relates to Distell employees' portion and is being expensed over a vesting
period of 8 years.
In terms of the transaction Distell will issue ordinary shares to the BEE consortium,
between 30 June 2013 and 30 June 2015. This will result in a dilution of Capevin
Holdings Ltd's interest (through it's shareholding in Remgro-Capevin Investments Ltd)
in Distell. The extent of the eventual dilution of Distell's shareholders will depend on
a number of factors, but it will not exceed the maximum limit of 15%.
When these shares are issued to the BEE consortium, Capevin Holdings Ltd will recognise a
dilution of up to 15% against its investment in its associate (currently carried at R2,1
billion). At the same time its interest in Distell's earnings will decrease by up to 15%.
To take cognisance of the above, Distell's 2013 financial statements disclose diluted
headline earnings per share that is 8,3% (2012: 6,6%) less than the headline earnings per
share.
Although there has been no real dilution of Capevin Holdings Ltd's interest yet, this is
viewed as a realistic indication of the extent to which the rights that will lead to the
eventual dilution, have already vested.
If the basis on which Distell has calculated its diluted headline earnings per share is
applied to the group's results, Capevin Holdings' headline earnings for the year would
decrease by R23,7 million (2012: R9,2 million) to 31,7 cents (2012: 28,7 cents) per share.
COMMENTARY
SCHEME OF ARRANGEMENT
On 13 August 2012 a scheme of arrangement was implemented in terms of which
Capevin Holdings acquired the remaining ordinary shares in Capevin Investments Ltd
("Capevin Investments") not already held by Capevin Holdings, being 20 580 000 shares
representing 49% of Capevin Investments' issued share capital. Capevin Investments'
shareholders received 21 Capevin Holdings shares for each share disposed of. Capevin
Investments was delisted following the listing of Capevin Holdings on the JSE on
3 August 2012. All the assets and liabilities of Capevin Investments were subsequently
distributed to Capevin Holdings in terms of section 47 of the Income Tax Act, 58 of 1962.
FINANCIAL RESULTS
Distell reported a 12,0% increase in headline earnings to R1 086 million, with headline
earnings per share increasing by 11,7%. Capevin Holdings' headline earnings per share for
the year ended 30 June 2013 consequently increased by 12,3% to 34,6 cents per share.
The company's intrinsic value increased by 15,1% to R8,13 per share - based on Distell's
last traded share price of R121,94 at 30 June 2013 (excluding capital gains tax).
Following the restructuring detailed above, Capevin Holdings' discount to intrinsic value
has narrowed from 23,4% at 30 June 2012 to 17,6% at 30 June 2013. Recurring administration
costs for the year under review decreased by 29,1% due to simplification of the group structure.
PROSPECTS
Distell believes challenging trading conditions will persist in the year ahead. However,
the strength, appeal and diversity of its brands, its enhanced capacity to trade across a
spectrum of markets and the security of its financial position will allow it to continue
pursuing its strategic course.
Refer to www.distell.co.za for Distell's comprehensive results.
AUDITED FINANCIAL STATEMENTS
PricewaterhouseCoopers Inc. has audited the results for the year ended 30 June 2013 and
their unmodified audit opinions on the annual financial statements and the summarised financial
statements contained herein, are available for inspection at the company's registered office.
These summarised consolidated financial statements, together with the consolidated annual
financial statements from which they have been derived, were compiled under the supervision
of Mr A Mellet, a Chartered Accountant (SA) and an employee of the company's appointed manager,
PSG Corporate Services (Pty) Ltd.
The consolidated annual financial statements, including the unmodified audit opinion, is
available on Capevin Holdings' website www.capevin.com or may be requested and obtained in
person, at no charge, at the registered office of the company during office hours.
DIVIDEND
In terms of the dividend policy of Capevin Holdings, dividends received from its indirect
interest in Distell, after providing for administrative expenses, will be distributed to
shareholders. The directors have consequently resolved to declare a final gross ordinary
dividend (dividend number 18) of 11,7 cents (2012: 9,7 cents) per share for the year ended
30 June 2013.
The dividend has been declared from income reserves.
There are no STC credits available for utilisation. The dividend is subject to a local
dividend tax rate of 15% or 1,755 cents per share, resulting in a net dividend of 9,945
cents per share, unless the shareholder is exempt from paying dividend tax or is entitled to
a reduced rate in terms of the applicable double-tax agreement. The number of issued
ordinary shares is 880 103 265 at the date of this declaration. The company's income tax
reference number is 9599656718.
The salient dates of this dividend distribution are:
Last day to trade cum dividend Friday, 6 September 2013
Trading ex dividend commences Monday, 9 September 2013
Record date Friday, 13 September 2013
Date of payment Monday, 16 September 2013
Share certificates may not be dematerialised or rematerialised between Monday, 9 September
2013, and Friday, 13 September 2013, both days inclusive.
ANNUAL GENERAL MEETING
The company's annual general meeting will be held at PSG Group's office situated at 1st Floor,
Ou Kollege, 35 Kerk Street, Stellenbosch on Thursday, 17 October 2013, at 10:00.
Shareholders are hereby advised that the company's annual report, containing the notice of the
annual general meeting and the audited summarised financial statements for the year ended
30 June 2013, will be dispatched to shareholders on or about, 16 September 2013. The annual
report will then also be available at www.capevin.com.
Signed on behalf of the board of directors
Chris Otto Andries Mellet
Chairman Financial director
Stellenbosch
23 August 2013
ADMINISTRATIVE INFORMATION
Directors: CA Otto (Chairman)^, A Mellet*, AEvZ Botha^, N Celliers#, JJ Durand#, RM Jansen^,
LC Verwey# (* Executive, # Non-executive, ^ Independent non-executive)
Secretary: PSG Corporate Services (Pty) Ltd
Registered office: 1st Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600;
PO Box 7403, Stellenbosch, 7599
Transfer secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall Street,
Johannesburg, 2001; PO Box 61051, Marshalltown, 2107
Auditor: PricewaterhouseCoopers Inc.
Sponsor: PSG Capital
Date: 23/08/2013 04:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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