Wrap Text
Unaudited Interim Results for the six months ended 30 June 2013
Blackstar Group SE
Incorporated in Malta
(Company number SE 4)
(Registered as an external company with limited liability in the
Republic of South Africa under registration number 2011/008274/10)
Share code: BCK
ISIN: MT0000620113
("Blackstar" or the "Company" or the "Group")
Interim results for the period ended 30 June 2013
HIGHLIGHTS
- Disposal of the Group's remaining investment in Litha Healthcare Group Limited for R196.9 million (GBP12.6 million),
representing an internal rate of return ("IRR") of 47% and 3.57 times return on investment in South African Rand;
- Successful integration of the cash shell New Bond Capital Limited into the Blackstar Group, thereby enhancing the
asset base and reducing the cost base;
- Launch of the Blackstar Global Opportunities Fund focussing on global markets;
- Stake in Times Media Group Limited increased to 19.9%;
- Intrinsic NAV per share of 1,483 cents (93 pence) at 31 August 2013; and
- Interim dividend declared of 8 cents (0.50 pence) per ordinary share.
Intrinsic Net Asset Value ("NAV")
Unaudited Unaudited Unaudited Unaudited
31 August 2013 31 March 2013 31 August 2013 31 March 2013
R'000 R'000 GBP'000 GBP'000
Times Media Group Limited 458,174 312,730 28,840 22,278
Litha Healthcare Group Limited - 260,571 - 18,563
Global Roofing Solutions (Pty) Limited 155,000 155,000 9,756 11,042
Robor (Pty) Limited 109,340 63,931 6,882 4,554
Stalcor (Pty) Limited 32,000 32,000 2,014 2,280
Blackstar Real Estate (Pty) Limited 31,718 30,260 1,996 2,156
Blackstar Special Opportunities Fund 56,320 22,116 3,545 1,576
Blackstar Global Opportunities Fund 51,070 46,181 3,215 3,290
Shoprite Holdings Limited 22,818 20,655 1,436 1,471
Charlemagne Capital (UK) Limited 13,405 5,269 844 375
Other listed - 7,800 - 556
Other unlisted 7,487 7,487 471 533
Cash and cash equivalents 267,709 156,678 16,851 11,233
Intrinsic NAV 1,205,041 1,120,678 75,850 79,907
Actual number of shares in issue net of
treasury shares held ('000) 81,247 76,188 81,247 76,188
Intrinsic NAV per share (in Rands/Pounds
Sterling) 14.83 14.71 0.93 1.05
Ordinary share price on 31 August 2013 (in
Rands/Pounds Sterling) 11.44 11.50 0.71 0.79
Ordinary share price discount to intrinsic NAV 23% 22% 24% 25%
Notes
1 The intrinsic NAV provides a measure of the underlying value of the Group's assets and does not indicate when the investments
will be realised, nor does it guarantee the value at which the investments will be realised.
2 For the purposes of determining the intrinsic values, listed investments on recognised stock exchanges are valued using quoted
bid prices and unlisted investments are shown at directors' valuation, determined using the discounted cash flow methodology.
This methodology uses reasonable assumptions and estimations of cash flows and terminal values, and applies an appropriate
risk-adjusted discount rate that quantifies the investment's inherent risk to calculate a present value. Given the subjective nature
of valuations, the Group is cautious and conservative in determining the valuations and has a track record of selling its unlisted
investments in the ordinary course of business above the levels at which it values them.
3 All amounts have been translated using the closing exchange rates at 31 August 2013 and 31 March 2013. The ZAR/GBP closing
exchange rate at 31 August 2013 was 15.887 (31 March 2013: 14.037).
4 Other unlisted include investments in Navigare Securities (Pty) Limited and Blackstar Fund Managers (Pty) Limited.
5 The intrinsic NAV at 31 March 2013 (being the last publicly announced intrinsic NAV published in the 2012 Annual Report) is
provided as a comparative.
COMMENTARY
Introduction
During 2013, Blackstar increased its stake in Times Media Group Limited ("TMG") to 19.9% and in Robor (Pty) Limited
("Robor") to 11.1%, launched the Blackstar Global Opportunities Fund ("BGOF"), unlocked the maximum amount of
value on integration of New Bond Capital Limited ("NBC") into Blackstar, and successfully realised its investment in Litha
Healthcare Group Limited ("Litha").
The share split and consolidation approved at the last AGM was successfully implemented during the months of June
and July 2013 thereby removing 3,294 shareholders off the shareholder register, an 83% reduction in the total number of
shareholders. Additional cost savings will be achieved going forward as a result of the smaller shareholder base to
administer.
The intrinsic NAV table is a useful tool in analysing the most recent inherent value of each investment held. By 31
August 2013 the intrinsic NAV had increased by 8% to R1.2 billion from the last reported intrinsic NAV at 31 March 2013
of R1.1 billion. In Pounds Sterling this is translated into a decline from GBP79.9 million at 31 March 2013 to GBP75.9 million at
31 August 2013 as a result of currency movement.
The South African Rand weakened significantly during the interim period under review with the closing ZAR/GBP
increasing from 13.77 at 31 December 2012 to 15.06 at 30 June 2013. This has had a significant impact on the Pounds
Sterling reported results of the Group and must be taken into consideration on review and comparison of the year on
year results. Blackstar has managed the effect of the weakening Rand on its cash balances at the centre by holding its
cash resources in Pounds Sterling and US Dollars.
Investment and Market Review
Times Media Group Limited ("TMG")
We are well on our way with regard to the turnaround and repositioning of TMG. TMG generated an EBITDA of R495
million (approximately GBP36 million) before exceptional items for the twelve month period to 30 June 2013. For a full
explanation of TMG, please see TMG's financial results to end June 2013 on their website www.timesmedia.co.za.
The fair value of the Blackstar investment in TMG at 31 August 2013 amounts to R458.2 million (GBP28.8 million) and
represents 38% of the Intrinsic NAV of Blackstar at 31 August 2013. Blackstar's average cost of the shares it currently
owns in TMG is R13.35 (GBP0.84) per share.
Litha Healthcare Group Limited ("Litha")
Post 30 June 2013, Blackstar sold its remaining interest in Litha to Paladin Labs Inc. ("Paladin") for a cash consideration
of R196.9 million (GBP12.6 million), the equivalent of R2.75 (GBP0.18) per share. The proceeds represent an internal rate of
return ("IRR") of 47% and 3.57 times return on investment in South African Rand and in Pounds Sterling, 35% and 2.66
respectively. Litha has been a successful investment for Blackstar and its total investment in Litha has generated an IRR
of 35% and 4.03 times return on investment in South African Rand (35% and 3.62 respectively in Pounds Sterling), over
the 7 year holding period.
In February 2012, Blackstar facilitated and underwrote Litha's acquisition of 100% of Pharmaplan (Pty) Limited from
Paladin, and in the process sold 50% of its shares in Litha to Paladin. Post this initial sale, Blackstar became a minority
investor owning 13% of the ordinary share capital of Litha. Blackstar is not a passive investor and as such decided to sell
the remainder of its shares given it was no longer directly involved in the business. The proceeds from the disposal will
be applied in accordance with Blackstar's investment policy.
Robor (Pty) Limited ("Robor")
During the period under review Blackstar invested R27.4 million (GBP1.9 million) acquiring additional Robor shares from
retiring management. These share purchases increased Blackstar's shareholding in Robor by 82% and it is now the
second largest shareholder owning 11.1% of the total shares in issue.
These shares were acquired at a 44% discount to the conservative fair value of the business. Robor continues to perform
well in a difficult operating environment and has an aligned management team that is focused on creating shareholder
value.
Blackstar's investment in Robor is valued at R109.3 million (GBP6.9 million) at 31 August 2013.
Global Roofing Solutions (Pty) Limited ("GRS")
During the latter part of 2012, GRS consolidated its principal Gauteng-based operations under 'one roof' into its
Boksburg North premises in Gauteng. It is pleasing to report that this strategy has now been implemented and is
yielding meaningful synergistic, cost saving and revenue generating benefits.
Compared to the same six month period last year, GRS's gross revenues have increased by 18% to R319.5 million
(GBP22.5 million), EBITDA increased by 36% to R17.3 million (GBP1.3 million), and profit after tax has increased by 72% to
R7.5 million (GBP0.5 million).
These results are particularly pleasing given the high stocking and sales backlogs required during Q1 as a result of the
raw material supply disruption that arose from the fire at Arcelormittal's Vanderbijlpark works and the construction delays
at Medupi Power Station, both of which GRS largely overcame during Q2.
During the six month period, GRS embarked on an aggressive 'Africa Initiative' aimed at accelerating new market
penetration and attractive margin sales growth. To this end, GRS will have established operations in Namibia, Botswana
and Zambia by Q4 of 2013 with Ghana, Zimbabwe, Mozambique and others following in 2014.
Blackstar also generates a monthly yield from GRS on its loans and monitoring fees, a 150% increase when compared to
the comparative six month period. The GRS investment, which is wholly owned by Blackstar, is valued at R155.0 million
(GBP9.8 million) at 31 August 2013.
Stalcor (Pty) Limited ("Stalcor")
Stalcor's turnaround continues to gather positive momentum. The company successfully negotiated increased trading
facilities from both its suppliers and bankers; improved the composition of its inventories and actively recruited a number
of high profile individuals in the stainless steel and aluminium industry.
Stalcor's performance over the past six months, when compared to the same period in the previous year, reflects a 27%
growth in turnover to R295.9 million (GBP20.8 million); a R4.2 million (GBP0.3 million) increase in EBITDA to R4.9 million (GBP0.3
million) and a R3.6 million (GBP0.3 million) improvement in profit after tax for continuing operations to R7.5 million (GBP0.1
million).
Despite harsh trading conditions, Stalcor continues to concentrate its efforts on market share growth, improved
performance from its coastal operations, and the introduction of higher margin product lines.
Blackstar holds 50.1% in Stalcor and values its investment at R32.0 million (GBP2.0 million) at 31 August 2013.
Fund Management
Blackstar Fund Managers (Pty) Limited ("BFM")
BFM was launched in October 2012. Since then we have made steady progress developing the business having put a
well-respected and complimentary team together. It is our intention to grow this business into other fund management
products as our track record in these funds develops, and where necessary acquire additional skills. We may also
consider selective acquisitions of other fund management businesses where it makes business sense. The fund
management business is highly scalable. It provides for an option to manage Group capital, as well as the opportunity for
significant business value creation for Blackstar. BFM generated management fees of R2.0 million (GBP0.1 million) during
the six month period under review.
The Blackstar Special Opportunities Fund ("BSOF")
BSOF is a flexible fund primarily focused on special mispriced opportunities within the South African market but with a
focus on capital preservation and consistent returns over the long term irrespective of market conditions. Year to
31 August 2013, the fund has generated satisfactory returns of 11.1% through some very volatile markets. BFM, the fund
manager of this fund is already profitable.
Blackstar's investment in BSOF amounted to R56.3 million (GBP3.5 million) at 31 August 2013. Blackstar management
have also invested personally in BSOF.
The Blackstar Global Opportunities Fund ("BGOF")
The BGOF is a global USD multi-strategy fund holding only highly liquid global securities in a combination of longer term
long and short positions, and shorter term trading positions. The core longer term holdings consist of high quality global
businesses as and when valuations allow, whilst the trading portfolio focuses on shorter term catalyst driven
opportunities. Since inception in April to August 2013, the fund has generated a loss of 0.4% in USD. Start-up teething
problems have been settled and management feel they are well positioned to take opportunities that these volatile
markets present. The BGOF Investment Advisor entered into an advisory agreement with a third party investment
manager to manage a fund on their behalf. Positive growth in assets under management is expected in the year ahead.
Included in the intrinsic NAV at 31 August 2013 is Blackstar's direct investment in BGOF amounting to R51.1 million
(GBP3.2 million). Blackstar management are also personally invested in BGOF.
Blackstar Real Estate ("BRE")
Blackstar recently hired a property manager to manage and develop the number of commercial, industrial and retail
properties it currently holds as well as to explore property opportunities in the South African real estate sector. BRE is in
the process of acquiring a small industrial property in Namibia which overall will be cashflow positive. Growth in this
sector of the Group is anticipated in the second half of the year.
The fair value of the investment properties within the BRE sector amounted to R120.2 million (GBP7.6 million) at 31 August
2013 and Blackstar's net equity investment amounted to R31.7 million (GBP2.0 million) as reflected in the intrinsic NAV
table.
New Bond Capital Limited ("NBC")
During Q2 2013, Blackstar's offer to acquire all of the shares in NBC via an issue of Blackstar shares was approved.
Blackstar re-issued 5,808,553 of its treasury shares which it had previously bought back at a cost of R64.3 million (GBP4.3
million) to acquire NBC, a cash shell with a net asset value of R79.2 million (GBP5.2 million). This transaction was
essentially a placing to enable Blackstar to obtain additional cash on an attractive, discounted basis. The cash was
pooled with Blackstar's existing cash resources available for investment by Blackstar. NBC is currently in the process of
being wound down and deregistered.
Charlemagne Capital (UK) Limited ("Charlemagne" or "CCAP")
During the course of the current financial year, Blackstar has purchased 3.0% of Charlemagne, an AIM listed specialist
emerging markets asset manager that currently has approximately $2.4 billion (approximately R24.6 billion, GBP1.6 billion)
of assets under management. We believe the business is very attractive. Charlemagne has a market capitalisation of
GBP33.0 million (R524.3 million) which includes cash on hand of GBP18.0 million (R271.0 million) and the remaining business
is effectively valued at around GBP15.0 million (R238.3 million).
Blackstar currently owns 3.0% of Charlemagne at a fair value of R20.3 million (GBP1.3 million), 238.3 cents (15.0 pence)
per share, acquired at a cost of R15.3 million (GBP1.0 million), an average cost of 180.0 cents (11.3 pence) per share.
Shoprite Holdings Limited ("Shoprite")
In May 2011 Blackstar acquired shares of Shoprite on the Lusaka stock exchange in Zambia. At the time of purchase
these shares traded at a 43% discount to the same shares on the JSE. Blackstar currently holds 180,700 Shoprite
shares and they are held at the closing bid price of the Lusaka stock exchange. At 30 June 2013 that equated to a Rand
equivalent price per share of R114.01 (GBP7.57) compared to the JSE closing share price per share of R185.50 (GBP12.29).
As previously reported, we have been waiting for Shoprite to commence with its litigation against the shareholders in
Zambia. In July 2013 Shoprite commenced proceedings in the High Court of Zambia seeking to effectively reverse
various trades undertaken by investors, including Blackstar. Blackstar has considered the statement of claim served by
Shoprite, in conjunction with its legal advisers, and concluded that those claims are without merit and Blackstar should
be successful in its defence against those claims. Blackstar believes that it has full legal title over its Shoprite shares and
will take all steps necessary to preserve and protect value for its shareholders. Blackstar is working with other investors
who own Shoprite Zambian shares to resolve the impasse with Shoprite.
Financial Review
Total equity attributable to equity holders amounts to R1.1 billion (GBP74.0 million) as at 30 June 2013 and a net asset
value per share of 1,389 cents (92 pence). The Rand decline in the equity attributable to equity holders of R26.0 million
can be attributed to the significant decline in the value of Blackstar's Litha shares during the six month period under
review of R51.8 million and the fact that TMG was equity accounted as an associate and not recognised at fair value. All
other investments fared well during the six months. Had TMG been accounted for at share price instead of being equity
accounted as an associate, then an additional R88.0 million would have been recognised in the statement of
comprehensive income increasing the net asset value from R1.1 billion to R1.2 billion and the net asset value per share
from 1,389 cents to 1,498 cents.
The weakening of the South African Rand has had a significant effect on the results reported in Pounds Sterling due to
the fact that the majority of the Group's assets are based in Rands. As an indication of the effect, the 9.1% devaluation
in the Rand from 13.77 at 31 December 2012 to 15.06 at 30 June 2013 has decreased the equity attributable to equity
holders by GBP7.1 million from GBP81.3 million to the reported GBP74.2 million, and the net asset value per share from 101 pence
per share to 92 pence per share.
The subsidiaries of Blackstar including Blackstar Group (Pty) Limited ("Blackstar SA"), GRS and its subsidiaries, Stalcor,
and Blackstar Real Estate (Pty) Limited ("BRE") and its subsidiaries have been consolidated in accordance with IFRS.
Blackstar's investment in BSOF has also been consolidated due to the fact that Blackstar has a controlling interest in the
General Partner and a beneficial interest in the form of a direct investment in the fund. When Andrew Bonamour was
appointed as operational CEO of TMG in February 2013, it was determined that Blackstar had significant influence and
Blackstar's 12.3% investment in TMG was therefore transferred from investments held at fair value through profit and
loss to investments in associate's category. The other associate Navigare Securities (Pty) Limited ("Navigare") has also
been equity accounted. The remaining investments have been accounted for at fair value or amortised cost.
Blackstar held investments of R260.3 million (GBP17.3 million) at 30 June 2013 which mainly comprises an investment in
Robor of R109.3 million (GBP7.3 million), investment in Shoprite of R20.6 million (GBP1.4 million), R49.1 million (GBP3.3 million)
direct investment in BGOF, and the consolidated fund BSOF's investments of R69.5 million (GBP4.6 million).
Blackstar increased its shareholding in BSOF from 38.4% to 59.5% primarily through its acquisition of NBC which held
an existing investment in BSOF of R31.1 million (GBP2.0 million) on date of acquisition by Blackstar. Blackstar's
shareholding in BSOF (which is equity accounted as a subsidiary) will be diluted as external investors continue to invest
in the fund thereby increasing the non-controlling interest recognised on the statement of financial position.
The results of BGOF are not consolidated as Blackstar acts as an advisor to the fund and does not exercise control over
the fund. At 30 June 2013 Blackstar's investment in the fund amounted to R49.1 million (GBP3.3 million).
Blackstar acquired further TMG shares in the earlier part of the year increasing its shareholding to 12.3% at the end of
January 2013. At this point in time, Blackstar was assessed to have significant influence and the fair value of the
investment of R218.4 million (GBP15.7 million) was reclassified as an investment in associate. From 1 February 2013 until
30 June 2013, TMG's share price has grown from R14.00 to R18.50 (GBP1.01 to GBP1.23). During this period, Blackstar
acquired an additional 8.1 million shares in TMG for an amount of R124.5 million (GBP9.0 million) thereby increasing its
shareholding to 18.3% at 30 June 2013. As TMG is an associate of Blackstar, Blackstar has recognised a share of profits
of TMG amounting to R7.7 million (GBP0.6 million) and the investment in TMG included as an investment in associates
is carried at a value of R350.6 million (GBP23.3 million). The fair value of the investment in TMG at 30 June
2013 amounted to R438.6 million (GBP29.1 million).
Blackstar's investment in Litha has been classified as a non current asset held for sale at 30 June 2013 and is therefore
separately disclosed on the statement of financial position at its fair value less costs to sell of R200.7 million (GBP13.3 million).
Borrowings and other financial liabilities of R225.9 million (GBP15.0 million) at 30 June 2013 comprises of mortgage bonds
of R80.7 million (GBP5.4 million) taken out to finance property acquisitions and R125.3 million (GBP8.3 million) of inventory and
debtors financing facilities held by GRS and Stalcor. All debt is ring-fenced within each subsidiary.
Cash and cash equivalents declined by R207.3 million (GBP14.9 million) to R144.7 million (GBP9.6 million) during the six month
reporting period. Significant cashflow movements during the period include R124.5 million (GBP9.0 million) cash outflow on
acquisition of additional shares in TMG; R80.0 million (GBP5.6 million) cash outflow on acquisition of treasury shares;
R224.3 million (GBP15.8 million) on additions to investments, net cash inflow of R61.6 million (GBP4.1 million) on acquisition of
NBC and R29.9 million (GBP2.1 million) cash inflow as external investors invested further funds into BSOF.
Cash and cash equivalents have increased by R196.9 million (GBP12.6 million) in August 2013 on disposal of the
investment in Litha.
Gross profit of R87.0 million (GBP6.1 million) was generated by the trading business Stalcor and GRS, 27% up from the
prior comparative period.
Other income of R27.6 million (GBP1.8 million) comprises mainly of the following: R4.1 million (GBP0.3 million) of fee income
generated from investments and cost recoveries from TMG; fund management fees generated by BFM of R2.0 million
(GBP0.1 million); dividend income from investments of R2.8 million (GBP0.3 million); negative goodwill of R15.1 million (GBP1.0
million) recognised on acquisition of NBC; R6.4 million (GBP0.5 million) rental income earned on investment properties; and
R15.3 million (GBP1.1 million) net losses on investments.
Net losses on investments mainly include a R7.9 million (GBP0.6 million) gain recognised on the various investments held
by the fund BSOF; R10.7 million (GBP0.7 million) fair value gain recognised on the TMG investment to the end of
January 2013 being the date it was reclassified as an investment in associate; an increase in the fair value of the
investment in Robor of R22.0 million (GBP1.5 million); R3.0 million (GBP0.2 million) unrealised gain on the investment in BGOF;
R2.3 million (GBP0.2 million) gain recognised on fair valuing the investment in Shoprite; and a loss of R51.8 million (GBP3.6
million) on the investment in Litha as a result of the decline in the Litha share price from R3.60 (GBP0.26) at 31 December
2012 to the price at which Blackstar agreed to sell its Litha shares of R2.75 (GBP0.18).
Net finance costs of R8.3 million (GBP0.6 million) include interest of R4.8 million (GBP0.3 million) arising on mortgage bonds
held over properties within the BRE portfolio and R4.8 million (GBP0.3 million) finance costs on financing
facilities utilised by Stalcor and GRS.
The main contributor to the share of profits of associates of R9.6 million (GBP0.7 million) is Blackstar's share of TMG's profit
for the five month period amounting to R7.7 million (GBP0.6 million).
The Group generated a profit from continuing operations of R5.6 million (GBP0.2 million) for the six month reporting period.
The loss from discontinued operations of R0.3 million (GBP0.02 million) reported in the current interim period comprises the
residual costs incurred by Stalcor's discontinued operation.
A dividend of 17 South African cents (1.42 cents in Euros and 1.21 pence in Pounds Sterling) per ordinary share was
paid on 18 June 2013.
The Group reported a profit attributable to equity holders of the parent of R0.3 million (loss of GBP0.1 million), basic and
diluted earnings of 0.35 cents (loss of 0.19 pence) per share and headline losses of 23.69 cents (1.80 pence) per share.
Again, had TMG been accounted for at fair value and not been equity accounted, the Group would have reported a profit
attributable to equity holders of R88.3 million (GBP6.0 million).
Share split and consolidation
The proposed consolidation and sub-division of Blackstar's share capital was approved at the Annual General Meeting
held on 26 April 2013 and implemented effective 28 June 2013.
The Blackstar share capital was consolidated on the basis of 250 existing shares for every one Consolidated Share
("Consolidated Share").
Blackstar shareholders whose number of existing ordinary shares could not be consolidated into one Consolidated Share
("fraction shares") received a cash payment of GBP0.80 per share for shares held on the AIM register or R11.27 per share
for shares held on the JSE register. As a result, a Blackstar Group subsidiary acquired 118,459 fraction shares on AIM at
GBP0.80 per share and 95,201 fraction shares on the JSE at R11.27 from shareholders. These shares were aggregated to
form Consolidated Shares. The proceeds were distributed to the fractional shareholders in proportion to the fractions of
Consolidated Shares held by them. Shareholders holding less than 250 shares were not entitled to receive a
Consolidated Share and these shareholders ceased to be members of the Company.
To be able to effect the share consolidation, it was necessary to issue 78 new Blackstar shares to a subsidiary within the
Blackstar Group, so that the number of shares in issue was divisible by the consolidation factor of 250.
Immediately after the share consolidation, each Consolidated Share was sub-divided into 250 existing shares thereby
ensuring that the NAV per share and the Blackstar share price was not affected by the process of rationalising the
shareholder base.
Treasury shares
Blackstar Group companies held 1,554,988 treasury shares at 30 June 2013, representing 1.9% of the issued share
capital.
During the six month period ended 30 June 2013, Blackstar acquired 5,900,000 treasury shares at a price of R11.08 and
1,250,000 treasury shares at a price of R11.73, off the open market. On conclusion of the NBC acquisition
5,808,553 shares which were held in treasury were issued to NBC shareholders.
As part of the share split and consolidation, a Blackstar Group subsidiary acquired a total of 213,660 fraction shares from
shareholders as well as the additional 78 Blackstar shares issued by the Company. Blackstar's existing treasury shares
were reduced by 197 shares on implementation of the share consolidation.
Of these treasury shares held at the end of the interim period, 791,926 shares have been set aside for issue as an award
by the Management Incentive Scheme (approved by shareholders at the last AGM) for the six month period. A further 78,293
Blackstar shares were acquired off the open market in July 2013.
Interim Dividend
Given the strong performance of the company, the Board has resolved to declare interim gross dividend of 8 South African
cents (0.59 cents in Euros and 0.50 pence in Pounds Sterling) per ordinary share. The exchange rates have been fixed
for the calculation of the Euro and Pounds Sterling equivalents based on the closing exchange rates on Thursday,
26 September 2013 of EUR 1 = ZAR 13.497 and GBP 1 = ZAR 16.021. The Board continues to recognise that regular dividends
are an important part of shareholder wealth creation.
The interim dividend will be paid in accordance with the salient dates and times set out below:
Last day to trade on the South African register Friday, 25 October 2013
Trading ex-dividend commences on the South African register Monday, 28 October 2013
Last day to trade on the UK register Tuesday, 29 October 2013
Trading ex-dividend commences on the UK register Wednesday, 30 October 2013
Record date for shareholders recorded on the UK and South African registers Friday, 01 November 2013
Date of payment Friday, 22 November 2013
Share certificates may not be dematerialized or rematerialized between Monday, 28 October 2013 and Friday, 01
November 2013, both days inclusive, and transfers between the UK register and the South African register may not take
place during that period.
Dividend Tax will be withheld from the amount of the gross dividend of 8 South African cents per share paid to South
African shareholders at the rate of 15% unless a shareholder qualifies for exemption. After the Dividend Tax has been
withheld, the net dividend will be 6.80 South African cents per share. There are no other taxes (foreign or otherwise) to
be withheld from the dividend. The Company had a total of 82,088,500 shares in issue (which includes 841,355 shares
held in treasury) at the date on which the dividend was announced, 30 September 2013. The dividend will be distributed
by Blackstar Group SE (Malta tax registration number 995944033) and is regarded as a foreign dividend. There are no
Secondary Tax on Companies ("STC") credits available for use.
Post balance sheet events
In August 2013, Blackstar disposed of its remaining interest in Litha for a cash consideration of R196.9 million (GBP12.6
million). Subsequent to 30 June 2013, Blackstar acquired an additional 1,577,383 TMG shares for R31.2 million (GBP2.0
million) thereby increasing Blackstar's shareholding in TMG to 19.9%. Blackstar also acquired additional shares in
Charlemagne post 30 June 2013, increasing its shareholding to 3.0%.
Outlook
Blackstar has a strong balance sheet and the necessary resources available to invest in new ventures going forward. An
area of focus will be the development and enhancement of BRE and we believe the next year will see both the BSOF
and BGOF funds continue to develop and grow. TMG is proving to be an exciting opportunity for Blackstar and the
Company will continue to reap the benefits of the turnaround of this media group. Blackstar continues to look for
opportunities to invest.
Andrew Bonamour
Director
30 September 2013
Condensed consolidated statement of financial position
as at 30 June 2013
Audited Unaudited Unaudited Unaudited Unaudited Audited
31 December 30 June 30 June 30 June 30 June 31 December
2012 2012 2013 2013 2012 2012
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
731,695 1,076,584 729,133 Non-current assets 48,426 83,925 53,126
74,631 87,449 72,358 Property, plant and equipment 4,806 6,817 5,418
101,585 88,050 101,585 Investment properties 6,747 6,864 7,375
31,735 72,425 30,463 Goodwill and intangible assets 2,023 5,646 2,306
1,870 1,581 354,346 Investments in associates 23,534 123 136
519,469 825,619 167,296 Investments 11,111 64,361 37,714
2,405 1,460 3,085 Deferred tax assets 205 114 177
736,575 744,149 654,936 Current assets 43,499 57,894 53,475
92,314 133,923 92,974 Investments 6,175 10,440 6,702
917 - 1,093 Other financial assets 73 - 67
143,164 391,395 209,594 Trade and other receivables 13,921 30,529 10,393
148,117 162,149 206,340 Inventories 13,704 12,640 10,753
352,063 56,682 144,935 Cash and cash equivalents 9,626 4,285 25,560
Non-current assets classified as held for
- - 200,748 sale 13,333 - -
1,468,270 1,820,733 1,584,817 Total assets 105,258 141,819 106,601
(110,010) (115,833) (103,169) Non-current liabilities (6,853) (9,030) (7,990)
(92,366) (89,475) (89,156) Borrowings (5,921) (6,976) (6,705)
(4,339) (8,623) (1,978) Other financial liabilities and provisions (131) (671) (316)
(13,305) (17,735) (12,035) Deferred tax liabilities (801) (1,383) (969)
(186,142) (587,616) (331,886) Current liabilities (22,045) (45,678) (13,514)
(4,528) (343,347) (6,935) Borrowings (461) (26,765) (329)
(83,370) (94,966) (127,861) Other financial liabilities and provisions (8,492) (7,403) (6,053)
(98,127) (147,589) (196,843) Trade and other payables (13,076) (11,510) (7,124)
(117) (1,714) (247) Bank overdrafts (16) - (8)
(296,152) (703,449) (435,055) Total liabilities (28,898) (54,708) (21,504)
1,172,118 1,117,284 1,149,762 Total net assets 76,360 87,111 85,097
Equity
574,671 574,671 574,671 Share capital 55,347 55,347 55,347
22,125 22,125 21,677 Share premium 1,944 1,974 1,974
52,173 52,173 52,173 Capital redemption reserve 4,599 4,599 4,599
- - (18,165) Treasury shares reserve (1,529) - -
- - - Foreign currency translation reserve (8,671) 4,232 (2,082)
495,288 474,592 487,944 Retained earnings 22,550 21,452 23,236
1,144,257 1,123,561 1,118,300 Total equity attributable to equity holders 74,240 87,604 83,074
27,861 (6,277) 31,462 Non-controlling interests 2,120 (493) 2,023
1,172,118 1,117,284 1,149,762 Total equity 76,360 87,111 85,097
Net asset value per share (in
1,394 1,369 1,389 cents/pence) 92 107 101
Actual number of shares net of treasury
82,088 82,088 80,534 shares (thousands) 80,534 82,088 82,088
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2013
Audited Unaudited Unaudited Unaudited Unaudited Audited
Year to Six months to Six months to Six months to Six months to Year to
31 December 30 June 30 June 30 June 30 June 31 December
2012 2012 2013 2013 2012 2012
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
Continuing operations
1,063,016 493,825 602,452 Revenue 42,374 39,441 81,676
(909,943) (425,373) (515,491) Cost of sales (36,257) (33,974) (69,915)
153,073 68,452 86,961 Gross profit 6,117 5,467 11,761
291,102 186,142 27,559 Other income 1,837 14,096 22,302
(246,488) (89,408) (112,994) Operating expenses (8,007) (6,793) (18,694)
197,687 165,186 1,526 Operating profit/(loss) (53) 12,770 15,369
(33,741) (23,029) (8,273) Net finance costs (583) (1,841) (2,592)
6,174 1,619 1,413 Finance income 98 129 474
(39,915) (24,648) (9,686) Finance costs (681) (1,970) (3,066)
Share of profit from
490 201 9,571 associates 696 16 38
164,436 142,358 2,824 Profit before taxation 60 10,945 12,815
(262) (2,601) 2,743 Taxation 169 (208) (36)
Profit from continuing
164,174 139,757 5,567 operations 229 10,737 12,779
Discontinued operations
(Loss)/profit from
discontinued operations,
128,198 131,167 (315) net of taxation (22) 7,963 7,741
292,372 270,924 5,252 Profit for the period 207 18,700 20,520
Other comprehensive
- - - (loss)/income: (6,925) 954 (5,274)
Currency translation
differences on translation
of Rand denominated
- - - Group entities (6,925) (1,453) (7,681)
Release of foreign
currency translation
reserve on disposal of
- - - associate/subsidiary - 2,407 2,407
Total comprehensive
income/(loss) for the
292,372 270,924 5,252 period (6,718) 19,654 15,246
Profit/(loss) attributable
to:
292,365 271,669 272 Equity holders of the parent (148) 18,760 20,544
7 (745) 4,980 Non-controlling interests 355 (60) (24)
292,372 270,924 5,252 207 18,700 20,520
Total comprehensive
income/(loss) attributable
to:
292,365 271,669 272 Equity holders of the parent (6,735) 19,714 15,184
7 (745) 4,980 Non-controlling interests 17 (60) 62
292,372 270,924 5,252 (6,718) 19,654 15,246
Earnings/(losses) per
share
Basic and diluted per share
356.16 330.95 0.35 (in cents/pence) (0.19) 22.85 25.03
Basic and diluted from
continuing operations (in
199.99 171.16 0.75 cents/pence) (0.16) 13.15 15.60
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2013
Attributable to Non-controlling Attributable to Non-controlling
equity holders interests Total equity equity holders interests Total equity
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
847,114 (754) 846,360 Balance as at 31 December 2011 67,517 (60) 67,457
Total comprehensive income/(loss)
271,669 (745) 270,924 for the period 19,714 (60) 19,654
Changes in non-controlling
interests arising on part disposal of
4,778 (4,778) - and rights issue by subsidiaries 373 (373) -
1,123,561 (6,277) 1,117,284 Balance as at 30 June 2012 87,604 (493) 87,111
Total comprehensive income/(loss)
20,696 752 21,448 for the period (4,530) 122 (4,408)
Arising on acquisition of
- 7 7 investment in subsidiary - 1 1
- 33,379 33,379 Arising on creation of BSOF - 2,393 2,393
1,144,257 27,861 1,172,118 Balance as at 31 December 2012 83,074 2,023 85,097
Total comprehensive income/(loss)
272 4,980 5,252 for the period (6,735) 17 (6,718)
(80,014) - (80,014) Treasury shares acquired (5,628) - (5,628)
Treasury shares issued to acquire
63,901 - 63,901 NBC 4,235 - 4,235
Effect of share split and
(2,499) - (2,499) consolidation (165) - (165)
Changes in non-controlling
interests arising on investment in
235 (1,397) (1,162) BSOF 12 79 91
Equity settled share based
6,600 - 6,600 payment expense 464 - 464
Reduction in non-controlling
interests arising on acquisition
(123) 18 (105) of further shares in BFM (9) 1 (8)
(14,329) - (14,329) Dividends paid (1,008) - (1,008)
1,118,300 31,462 1,149,762 Balance as at 30 June 2013 74,240 2,120 76,360
Condensed consolidated statement of cash flows
for the six months ended 30 June 2013
Audited Unaudited Unaudited Unaudited Unaudited Audited
31 December 30 June 30 June 30 June 30 June 31 December
2012 2012 2013 2013 2012 2012
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
(74,630) (69,975) (25,550) Cash flow from operating activities (1,645) (5,593) (5,372)
(46,018) (66,935) (22,646) Cash absorbed by operations (1,442) (5,351) (3,048)
(22,514) (1,760) 912 Net finance costs 65 (141) (1,856)
3,537 2,864 - Dividends received - 230 272
(9,635) (4,144) (3,816) Taxation paid (268) (331) (740)
178,582 (458,761) (120,907) Cash flow from investing activities (8,975) (36,975) 14,067
Net expenditure on property, plant and
(14,171) (1,468) (4,577) equipment and investment properties (322) (118) (1,087)
13,918 (457,293) (83,194) Net movement in investments (5,851) (36,857) 1,063
Net movement in investments in
(21,734) - 91,396 subsidiaries, net of cash acquired 6,178 - (1,560)
Acquisition of additional shares in
- - (124,532) associate (8,980) - -
Disposal of discontinued operations,
200,569 - - net of cash disposed - - 15,651
(7,065) 328,645 (60,801) Cash flow from financing activities (4,269) 26,568 (543)
Net movement in borrowings and other
(7,065) 328,645 36,041 financial liabilities 2,532 26,568 (543)
- - (80,014) Treasury shares acquired (5,628) - -
Blackstar shares acquired as part of
- - (2,499) the share split and consolidation (165) - -
Dividends paid to equity holders of the
- - (14,329) parent (1,008) - -
Net (decrease)/increase in cash and
96,887 (200,091) (207,258) cash equivalents (14,889) (16,000) 8,152
Cash and cash equivalents at the
255,059 255,059 351,946 beginning of the period 25,552 20,329 20,329
Exchange losses on cash and cash
- - - equivalents (1,053) (44) (2,929)
Cash and cash equivalents at the end
351,946 54,968 144,688 of the period 9,610 4,285 25,552
Notes to the condensed, unaudited interim financial statements
for the six months ended 30 June 2013
1. Basis of preparation
These condensed financial statements of the Group are prepared in accordance with the recognition and measurement
principles of International Financial Reporting Standards ("IFRSs") published by the International Accounting Standards
Board ("IASB") as endorsed for use by the European Union. They are prepared on the going concern principle, using the
historical cost basis and the accounting policies which are expected to be applied in the preparation of the Group's annual
financial statements for the year ending 31 December 2013. The Group has chosen not to adopt IAS 34 Interim
Financial Statements in preparing the consolidated interim financial statements.
The accounting policies and methods of computation are consistent with those applied in the annual financial statements
for the year ended 31 December 2012.
The financial information in this half-yearly report is unaudited and does not constitute statutory accounts for the purposes
of the Maltese Companies Act, 1985. The half-yearly report should be read in conjunction with the Group's statutory
accounts for the year ended 31 December 2012, which are prepared under IFRS and upon which an unqualified auditors'
report was given. The statutory accounts are available from the Company's website, www.blackstar.lu, or by writing to the
Company Secretary.
The functional currency of the Company is the South African Rand, being the currency of the primary economic
environment in which the Company and its subsidiaries operate.
Blackstar is dual listed with a primary listing on the Alternative Investment Market of the London Stock Exchange ("AIM")
and a secondary listing on the AltX of the JSE Limited ("JSE") in South Africa. As a result, Blackstar has two
presentational currencies being South African Rand ("Rands") and Pounds Sterling ("Pounds").
The principle exchange rates utilised to prepare the interim financial results are as follows:
Closing rate Average rate
31 December Six months to Six months to 30 Year to 31
2012 30 June 2012 30 June 2013 30 June 2013 June 2012 December 2012
13.773 12.828 15.057 GBP/ZAR 14.218 12.521 13.015
11.187 10.447 12.904 EUR/ZAR 12.101 10.282 10.552
0.812 0.805 0.857 EUR/GBP 0.851 0.823 0.810
2. Earnings/(losses) per share
Basic and diluted earnings/(losses) per share
Audited Unaudited Unaudited Unaudited Unaudited audited
Year to Six months to Six months to Six months to Six months to Year to
31 December 30 June 30 June 30 June 30 June 31 December
2012 2012 2013 2013 2012 2012
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
Net profit/(loss) attributable
to equity holders of the
parent from continuing
164,167 140,502 587 operations (126) 10,797 12,803
Net (loss)/ profit attributable
to equity holders of the
parent from discontinued
128,198 131,167 (315) operations (22) 7,963 7,741
Total net profit/(loss)
attributable to equity holders
292,365 271,669 272 of the parent (148) 18,760 20,544
Weighted average number
of shares in issue, net of
82,088 82,088 78,012 treasury shares (thousands) 78,012 82,088 82,088
Basic and diluted
earnings/(losses) per
ordinary share attributable
to equity holders (in
356.16 330.95 0.35 cents/pence) (0.19) 22.85 25.03
Basic and diluted
earnings/(losses) per
ordinary share attributable
to equity holders from
continuing operations (in
199.99 171.16 0.75 cents/pence) (0.16) 13.15 15.60
Basic and diluted
(losses)/earnings per
ordinary share attributable
to equity holders from
discontinued operations (in
156.17 159.79 (0.40) cents/pence) (0.03) 9.70 9.43
Basic and diluted headline (losses)/earnings per share ^
audited Unaudited Unaudited Unaudited Unaudited audited
Year to Six months to Six months to Six months to Six months to Year to
31 December 30 June 30 June 30 June 30 June 31 December
2012 2012 2013 2013 2012 2012
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
Profit/(loss) for the period
attributable to equity holders
292,365 271,669 272 of the parent (148) 18,760 20,544
Adjusted for:
Negative goodwill on
- - (15,042) acquisition of subsidiary (997) - -
Gain on disposal of
(63,152) (63,152) - discontinued operation - (2,531) (2,531)
Impairment of intangible
11,716 - - assets - - 851
30,417 - - Impairment of goodwill - - 2,208
Impairment of property, plant
11,172 - - and equipment - - 853
Impairment of investment
4,050 - - properties - - 311
Non-headline items included
in equity accounted profits of
(53,300) (53,300) (3,518) associates (249) (4,257) (4,257)
(Profit)/loss on disposal of
(1,708) 452 (334) property, plant and equipment (24) 36 (131)
Total tax effects of
(6,674) (127) 94 adjustments 7 (10) (498)
Total non-controlling interests'
(295) - 44 effects of adjustments 3 - (23)
224,591 155,542 (18,484) Headline (losses)/earnings (1,408) 11,998 17,327
Basic and diluted headline
(losses)/earnings per
ordinary share attributable
to equity holders (in
273.59 189.48 (23.69) cents/pence) (1.80) 14.62 21.11
^ Disclosure of headline earnings has been provided in accordance with the JSE Listings Requirements.
3. Segmental information
During the current reporting period a new segment, Media, was added to accommodate the now significant stake in TMG.
Included in the segment report is the investment in TMG accounted for at fair value through profit and loss. Prior year
segmental numbers have also been amended for the Media segment.
The investment in Litha was previously part of the Healthcare segment. As a result of the initial disposal of half of Blackstar's
investment in Litha in June 2012, the remaining investment in Litha was incorporated into the Investment segment for the
current period. Subsequent to 30 June 2013, the remaining interest in Litha was disposed of. All of the remaining segments
have remained consistent from December 2012.
Segmental information
for the six months ended 30 June 2013
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Year to Six months to Six months to Six months to Six months to Year to
31 December 30 June 30 June 30 June 30 June 31 December
2012 2012 2013 2013 2012 2012
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
EBITDA
As reported by segment:
34,230 11,851 21,622 Industrial metals 1,521 947 2,630
166,426 86,063 (50,521) Investment activities (3,573) 6,257 12,661
9,614 2,954 8,778 Property investments 617 237 739
Hedge fund and fund management
(821) - 648 activities 46 - (59)
133,132 133,132 - Healthcare - 8,120 8,121
(14,398) - 106,341 Media 7,475 - (1,106)
328,183 234,000 86,868 Total EBITDA reported by segments 6,086 15,561 22,986
Less EBITDA reported by discontinued
(130,868) (131,581) 315 operations 22 (7,997) (7,947)
Total EBITDA reported by continuing
197,315 102,419 87,183 segments 6,108 7,564 15,039
76,605 80,273 (66,145) Consolidation adjustments (4,767) 6,205 6,011
490 70,855 (86,077) Equity account for associates (6,032) 5,859 38
76,115 9,418 19,932 Other consolidation adjustments 1,265 346 5,973
Consolidated total reported by the Group
273,920 182,692 21,038 for continuing operations 1,341 13,769 21,050
Depreciation, amortisation, impairments
and fair value adjustments on investment
(67,261) (9,710) (7,856) properties (553) (776) (4,989)
(8,482) (7,595) (2,085) Other (145) (207) (654)
(33,741) (23,029) (8,273) Net finance costs (583) (1,841) (2,592)
164,436 142,358 2,824 Profit before taxation reported by the Group 60 10,945 12,815
Total assets
As reported by segment:
359,421 421,911 484,933 Industrial metals 32,207 32,890 26,095
956,866 1,485,735 780,833 Investment activities 53,703 115,996 70,450
121,522 109,417 119,221 Property investments 7,918 8,530 8,823
Hedge fund and fund management
58,452 - 102,965 activities 6,839 - 4,244
194,967 - 438,553 Media 29,127 - 14,155
1,691,228 2,017,063 1,926,505 Total assets reported by segments 129,794 157,416 123,767
(222,958) (196,330) (341,688) Consolidation adjustments (24,536) (15,597) (17,166)
(1,852) (2,140) (87,929) Equity account for associates (5,840) (167) (134)
(221,106) (194,190) (253,759) Other consolidation adjustments (18,696) (15,430) (17,032)
Consolidated total assets reported by
1,468,270 1,820,733 1,584,817 Group 105,258 141,819 106,601
Total liabilities
As reported by segment:
(279,891) (338,794) (397,656) Industrial metals (26,411) (26,411) (20,321)
(3,392) (348,129) (16,596) Investment activities (1,102) (27,005) (246)
(111,327) (107,020) (107,130) Property investments (7,115) (8,343) (8,083)
Hedge fund and fund management
(3,096) - (10,806) activities (718) - (225)
- - - Media - - -
(397,706) (793,943) (532,188) Total liabilities reported by segments (35,346) (61,759) (28,875)
101,554 90,494 97,133 Consolidation adjustments 6,448 7,051 7,371
Consolidated total liabilities reported by
(296,152) (703,449) (435,055) Group (28,898) (54,708) (21,504)
For further information, please contact:
Blackstar Group SE Bryan Moyer +35 (6) 2144 6377
Liberum Capital Limited Chris Bowman / Christopher Britton +44 (0) 20 3100 2222
PSG Capital (Pty) Limited David Tosi / Willie Honeyball +27 (0) 21 887 9602
Date: 30/09/2013 08:30:00 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.
Sharenet Sites 
