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CADIZ HOLDINGS LIMITED - Unaudited condensed consolidated interim results for the period ended 30 September 2013

Release Date: 18/11/2013 08:00
Code(s): CDZ     PDF:  
Wrap Text
Unaudited condensed consolidated interim results for the period ended 30 September 2013

Cadiz Holdings Limited
(Incorporated in the Republic of South Africa)
("Cadiz", Cadiz Holdings Limited)
(Incorporated in the Republic of South Africa)
("Cadiz", "the group" or "the company")
Registration number: 1997/007258/06
JSE share code: CDZ
ISIN: ZAE000017661
KEY FEATURES
Turnaround plan progressing well
Costs well contained
Earnings per share from continuing operations up 25%
Market leading unit trust performance


UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS
For the six months ended 30 September 2013


CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
                                                                Restated*      Restated*
                                                  Unaudited    Unaudited        Audited
                                             %     6 months     6 months      12 months
(R thousands)                           Change    30 Sep 13    30 Sep 12      31 Mar 13
Continuing operations
Gross operating revenue                    (2)       73 312       74 852       147 504
Interest income                             24       13 989       11 280        21 954
Net investment income                     (31)       19 657       28 541        55 124
Net income from investments                          19 785       28 485        55 010
Foreign exchange (losses)/gains                       (128)           56           114
Income attributable to linked assets       162        3 257        1 245         4 560
Net fair value gains on linked financial
instruments                                         259 063      256 299        510 794
Linked liability adjustment                       (255 806)    (255 054)      (506 234)
Fair value adjustment on third party
mutual fund interests                     (16)     (15 332)     (18 209)       (37 694)
Operating expenses                         (0)     (86 015)     (86 049)      (171 037)
Operating profit                          (24)        8 868       11 660         20 411
Finance costs                                         (105)        (276)          (154)
Share of loss of associates               (43)      (4 017)      (7 026)       (11 345)
Profit before taxation                       9        4 746        4 358          8 912
Taxation                                            (1 304)      (1 469)        (3 803)
Total comprehensive income from
continuing operations                       19        3 442        2 889         5 109
Discontinued operation
Loss from discontinued operation                    (1 904)            -            -
Total comprehensive income                (47)        1 538        2 889         5 109

Earnings/(Loss) per share (cents)
Basic - from continuing operations         25            1.5            1.2          2.2
Basic - from discontinued operation                    (0.8)              -            -
                                         (42)            0.7            1.2          2.2
Diluted - from continuing operations       25            1.5            1.2          2.2
Diluted - from discontinued operation                  (0.8)              -            -
                                         (42)            0.7            1.2          2.2
NOTES TO THE CONDENSED CONSOLIDATED
INTERIM STATEMENT OF COMPREHENSIVE INCOME
Reconciliation of headline earnings:
Profit attributable to equity holders
of the company                                         1 538        2 889        5 109
Deficit/(surplus) on disposal of plant
and equipment                                            285         (70)         (70)
Taxation impact                                         (80)           20           20
Headline earnings                         (39)         1 743        2 839        5 059
Headline earnings per share (cents)
Basic                                    (42)             0.7           1.2          2.2
Diluted                                  (42)             0.7           1.2          2.2
Share information:
Issued number of shares ('000)                      252   911     253   228    253   276
Consolidated number of shares ('000)                232   593     232   909    232   957
Weighted average number of shares ('000)            232   945     232   834    232   878
Diluted weighted average number of shares ('000)    233   006     233   546    233   238


CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
                                                                  Restated*    Restated*
                                                   Unaudited     Unaudited      Audited
(R thousands)                                      30 Sep 13     30 Sep 12    31 Mar 13
ASSETS
Intangible assets                                   238 733       237 220      238 423
Plant and equipment                                   5 207         4 606        5 161
Investment in associates                            60 300         68 636          64   317
Deferred taxation                                   26 305         16 783          24   575
Investments backing linked funds                 5 263 023        4 080 0     4   915   417
Financial assets - at fair value                 3 014 989      3 413 322     3   586   177
Receivables                                         11 782         12 534          19   095
Investment property                                179 227         57 768         153   372
Cash and cash equivalents                        2 057 025        596 381     1   156   773
Financial assets - at amortised cost                94 808         77 635          87   752
Financial assets - at fair value                   476 093        316 551         412   004
Receivables and prepayments                         53 771         46 809          66   649
Taxation                                               254          9 001           1   888
Cash and cash equivalents                          137 690        209 171         179   675
Total assets                                     6 356 184      5 066 417     5   995   861
EQUITY
Capital and reserves
Ordinary share capital and premium                  25 198        25 562        25 644
Treasury shares                                   (52 880)      (52 875)      (52 893)
Share-based payment reserve                         37 146        36 245        36 173
Retained earnings                                  649 300       661 793       663 985
Total equity                                       658 764       670 725       672 909
LIABILITIES
Deferred taxation                                    8 604          3 321         7 694
Linked investment contract liabilities           5 196 010      4 056 889     4 846 601
Third party financial liabilities arising on
consolidation of mutual funds                      453   823      268   117     405     801
Provisions                                           2   245        2   261       4     759
Trade and other payables                            31   034       61   239      51     092
Taxation                                             5   704        3   865       7     005
Total liabilities                                5 697   420    4 395   692   5 322     952
Total equity and liabilities                     6 356   184    5 066   417   5 995     861
Net asset value (cents per share)                        283            288             289
Net tangible asset value (cents per share)               173            180             179


CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOW
                                                                 Restated*     Restated*
                                                 Unaudited      Unaudited       Audited
                                                  6 months       6 months     12 months
(R thousands)                                    30 Sep 13      30 Sep 12     31 Mar 13
Cash flow from operating activities                996 802        199 266       815 815
Cash generated from operations                   1 014 412        318 072       930 097
Taxation (paid)/refunded                           (1 303)        (2 430)         2 094
Dividends paid                                    (16 307)      (116 376)     (116 376)
Cash flow from investing activities                138 185        145 420     (231 188)
Cash flow from financing activities                  (350)             49           164
Net change in cash and cash equivalents            858 267         53 895       584 791
Cash and cash equivalents at beginning of year   1 336 448        751 657       751 657
Cash and cash equivalents at end of year         2 194 715        805 552     1 336 448
Attributable to the group                          137 690       209 171        179 675
Attributable to policyholders                    2 057 025       596 381      1 156 773
The cash flow includes a cash outflow from discontinued operations of R1.9 million in
cashflow from operating activities for 30 September 2013.


CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
                                                  Unaudited     Unaudited       Audited
                                                   6 months      6 months     12 months
(R thousands)                                     30 Sep 13     30 Sep 12     31 Mar 13
Share capital, share premium and treasury shares
Opening balance                                    (27 249)     (27 592)      (27 592)
(Cancellation)/Issue of shares                        (446)          285           355
Issues/(Repurchases) of A ordinary shares                13          (6)          (12)
                                                   (27 682)     (27 313)      (27 249)
Reserves
Opening balance                                     700 158      811 755          811 755
Net premium on issue/(cancellation) of equity
settled share appreciation rights                        83          (45)          (73)
Employee scheme - value of services provided            973         (185)         (257)
Total comprehensive income                            1 538         2 889         5 109
Dividends paid                                     (16 307)     (116 376)     (116 376)
                                                    686 445       698 038       700 158
Total shareholders' equity                          658 763       670 725       672 909


CONDENSED CONSOLIDATED INTERIM SEGMENT REPORT
(R thousands)                                         Asset Investments
                                                 Management and Advisory           Total
Unaudited 6 months to 30 September 2013
Segment revenue                                     70 439        17 635          88 074
Segment costs                                       72 490         6 206          78 696
Segment profit                                        (2 051)     11 429        9 378
Corporate costs                                                               (2 956)
Loss before taxation on discontinued operation                                  2 341
Share of loss of associates                                                   (4 017)
Profit before taxation                                                          4 746
Gross operating revenue (external)                    61 292      12 020       73 312

Restated unaudited 6 months to 30 September 2012*
Segment revenue                                       68 950      20 836       89 786
Segment costs                                         67 318       6 254       73 572
Segment profit                                         1 632      14 582       16 214
Corporate costs                                                               (4 830)
Share of loss of associates                                                   (7 026)
Profit before taxation                                                          4 358
Gross operating revenue (external)                    61 587      13 265       74 852
Year-on-year % segment revenue                            2%       (15%)         (2%)
Year-on-year % segment costs                              8%        (1%)           7%
Year-on-year % segment profit                         (226%)       (22%)        (42%)

Restated audited 12 months to 31 March 2013*
Segment revenue                                       140 219     38 054      178 273
Segment costs                                         134 823     14 586      149 409
Segment profit                                          5 396     23 468       28 864
Corporate costs                                                               (8 607)
Share of loss of associates                                                  (11 345)
Profit before taxation                                                          8 912
Gross operating revenue (external)                    120 602     26 902      147 504

* The audited March 2013 annual results and unaudited September 2012 interim results
  were restated due to a change in accounting policy which has been disclosed in the
  notes below. The restatements to the comparative information have not been audited.


NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS
BASIS OF PRESENTATION
These results have been prepared in terms of International Financial Reporting
Standards ("IFRS") and comply with IAS 34 - Interim Financial Reporting, the Listings
Requirements of the JSE Limited and the Companies Act No. 71 of 2008. The condensed
interim financial statements do not include all of the information required for full
annual financial statements.

The condensed consolidated interim financial results have been prepared under the
supervision of the chief financial officer Mr R Jahnig (CA) SA.

ACCOUNTING POLICIES
The accounting policies applied are in terms of IFRS and consistent with those applied
in the annual financial statements for 31 March 2013, except as described below:

-   IFRS 10, 'Consolidated Financial Statements': Under IFRS 10, subsidiaries are all
    entities (including structured entities) over which the group has control. The
    group controls an entity when the group has power over an entity, is exposed to, or
    has rights to, variable returns from its involvement with the entity and has the
    ability to affect these returns through its power over the entity. Subsidiaries are
    fully consolidated from the date on which control is transferred to the group. They
    are deconsolidated from the date that control ceases.

    The financial effects of the change in accounting policy are shown in the "Adoption
    of IFRS 10" note.

-   IFRS 12, Disclosure of Interests in Other Entities: Additional disclosures are
    required to enable users of the financial statements to evaluate the nature of, and
    risks associated with, the group's interest in other entities; and the effects of
    those interests on its financial position, financial performance and cash flows.
    The group will assess the required disclosures for the year ended 31 March 2014.

-   IFRS 13 'Fair Value Measurement': IFRS 13 measurement and disclosure requirements
    are applicable for the March 2014 year-end. The group has included the disclosures
    required by IAS 34 paragraph 16A(j). See "Financial risk management" note.

1. RECLASSIFICATION OF COMPARATIVE FIGURES
   The following reclassifications were made to the 30 September 2012 figures in line
   with the changes made in our 31 March 2013 financial statements in order to provide
   more reliable and relevant information:

    - The order of presentation of its statement of financial position was changed from
      a current/non-current classification to a liquidity-based statement of financial
      position. This has had no financial impact;
    - Cash flows related to the investments backing linked funds and the linked
      investment contract liabilities of R113.8 million which were previously excluded
      from the group's statement of cash flows, have been included in net cash generated
      from operations;
    - Provisions of R2.3 million previously included within trade and other payables
    have been separated and disclosed in the statement of financial position;
  - Financial assets of R221.5 million were split out into "at amortised cost"
    (R77.6 million) and "at fair value" (R143.9 million) on the face of the statement
    of financial position; and

  - The cash flow presentation was changed from the direct method to the indirect
    method.
  All of the above reclassifications were only changes in presentation.


2. ADOPTION OF IFRS 10
   The adoption of IFRS 10 has resulted in the consolidation of the Cadiz Stable Fund,
   the Cadiz Protected Income Fund, the Cadiz Inflation Plus Fund and the Cadiz
   Property Investment Trust. The group has applied IFRS 10 retrospectively in
   accordance with the transition provisions of IFRS 10.

  The tables below show the effect on the Statement of comprehensive income,
  Statement of financial position, Statement of cash flow and segment report.
  There was no effect on the Statement of changes in equity.
                                                         As     IFRS 10
                                                 previously     adjust-
  (R thousands)                                    reported*      ments     Restated
  STATEMENT OF COMPREHENSIVE INCOME
  30 September 2012
  Gross operating revenue                           80 481      (5 629)         74 852
  Interest income                                    8 929        2 351         11 280
  Net income from investments                       15 559       12 926         28 485
  Net fair value gains on linked financial
  instruments                                      255 054        1 245      256 299
  Fair value adjustment on third party mutual
  fund interests                                   (4 280)     (13 929)     (18 209)
  Operating expenses                              (89 085)        3 036     (86 049)

  31 March 2013
  Gross operating revenue                          156 130      (8 626)      147 504
  Interest income                                   14 746        7 208       21 954
  Net income from investments                       26 275       28 735       55 010
  Net fair value gains on linked financial
  instruments                                      506 234        4 560      510 794
  Fair value adjustment on third party mutual
  fund interests                                   (6 776)     (30 918)     (37 694)
  Operating expenses                             (170 078)        (959)    (171 037)


                                                         As     IFRS 10
                                                 previously     adjust-
  (R thousands)                                    reported*      ments     Restated
  STATEMENT OF FINANCIAL POSITION
  30 September 2012
  Assets
  Investments backing linked funds               4 056 889       23 116    4 080 005
  Financial assets - at fair value               3 466 122     (52 800)    3 413 322
  Receivables                                        2 118       10 416       12 534
  Investment property                                    -       57 768       57 768
  Cash and cash equivalents                        588 649        7 732      596 381
  Financial assets - at fair value                 143 862      172 689      316 551
  Receivables and prepayments                       46 029          780       46 809
  Cash and cash equivalents                        189 183       19 988      209 171
  Liabilities
  Third party financial liabilities arising on
  consolidation of mutual funds                     51 544      216 573      268 117

  31 March 2013
  Assets
  Investments backing linked funds               4 846 601        68 816   4 915 417
  Financial assets - at fair value               3 747 716     (161 539)   3 586 177
  Receivables                                            -        19 095      19 095
  Investment property                                    -       153 372     153 372
  Cash and cash equivalents                      1 098 885        57 888   1 156 773
  Financial assets - at fair value                 251 158       160 846     412 004
  Receivables and prepayments                       54 943        11 706      66 649
  Cash and cash equivalents                         66 081       113 594     179 675
  Liabilities
  Third party financial liabilities arising on
  consolidation of mutual funds                     50 839      354 962      405 801

                                                         As     IFRS 10
                                                 previously     adjust-
  (R thousands)                                    reported*      ments     Restated
  STATEMENT OF CASH FLOWS
  30 September 2012
  Cash flow from operating activities              (6 111)      205 377      199 266
  Cash flow from investing activities               32 237    (177 657)    (145 420)
  31 March 2013
  Cash flow from operating activities              491 654      324 161      815 815
  Cash flow from investing activities             (78 509)    (152 679)    (231 188)

                                                        As      IFRS 10
                                                previously      adjust-
  (R thousands)                                   reported*       ments        Restated
  SEGMENT REPORT
  30 September 2012
  Gross operating revenue (external)
  - Asset Management                                67 216      (5 629)         61 587

  31 March 2013
  Gross operating revenue (external)
  - Asset Management                               129 228      (8 626)        120 602
  * After adjusting for the reclassifications made as a result of changes made to
    the 31 March 2013 annual financial statements referred to above.

3. FINANCIAL RISK MANAGEMENT
   The group is exposed to a variety of financial risks which include credit risk,
   market risk (including currency, price and interest rate risk) and liquidity risk.
   The group's risk management programme focuses on the unpredictability of financial
   markets and seeks to limit potential adverse effects on the group, while operating
   within a framework that ensures alignment with the group's overall strategy and
   risk appetite.
  The condensed interim financial statements do not include all financial risk
  management information and disclosures required in the annual financial statements;
  they should be read in conjunction with the group's annual financial statements
  as at 31 March 2013. There have been no changes in the risk management department
  or in any risk management policies since the year-end.
  FAIR VALUES
  The carrying amounts and the fair values of the group's financial assets and
  liabilities are the same. Where assets are held at amortised cost, the fair values
  approximate the carrying values as these have floating rates.
  Fair value measurements recognised in the statements of financial position
  The following table provides an analysis of the financial instruments that are
  measured subsequent to initial recognition at fair value, grouped into levels 1
  to 3 based on the degree to which the fair value is observable:
  -   level 1 fair value measurements are those derived from quoted prices
      (unadjusted) in active markets for identifiable assets or liabilities;

  -   level 2 fair value measurements are those derived from inputs other than quoted
      prices included within level 1 that are observable for the asset or liability,
      either directly or indirectly; and
  -   level 3 fair value measurements are those derived from valuation techniques that
      include inputs for the asset or liability that are not based on observable
      market data.
  Valuation techniques and assumptions applied for the purposes of measuring fair value
  The fair values of financial assets and financial liabilities are determined as
  follows:

  For level 1:
  - the fair values of financial assets and financial liabilities with standard terms
     and conditions and traded on active liquid markets are determined with reference
     to quoted market prices.
  For level 2:
  - the fair values of other financial assets and financial liabilities (excluding
     derivative instruments) are determined in accordance with generally accepted
     pricing models based on discounted cash flow analysis using prices from
     observable current market transactions and dealer quotes for similar instruments;
  -   observable inputs generally used to measure the fair value of securities
      classified as level 2 include benchmark yields, reported secondary trades,
      broker-dealer quotes, issuer spreads, benchmark securities, bids, offers and
      reference data;
  -   the fair values of derivative instruments are calculated using quoted prices.
      Where such prices are not available, discounted cash flow analysis is performed
      using the applicable yield curve for the duration of the instruments for
      non-optional derivatives, and option pricing models for optional derivatives.
      Foreign currency forward contracts are measured using quoted forward exchange
      rates and yield curves derived from quoted interest rates matching maturities of
      the contracts. Interest rate swaps are measured at the present value of future
      cash flows estimated and discounted based on the applicable yield curves derived
      from quoted interest rates; and
  -   the fair value of financial guarantee contracts is determined using option
      pricing models where the main assumptions are the probability of default by the
      specified counterparty extrapolated from the market-based credit information and
      the amount of loss, given the default.
  For level 3
  - determinations to classify fair value measures within level 3 of the valuation
     hierarchy are generally based on the significance of the unobservable factors
     when compared to the overall fair value measurement. The group applies various
     due diligence procedures, as considered appropriate, to validate the underlying
     information used in the valuations.
  Group
  (R thousands)                          Level 1      Level 2      Level 3       Total
  2013
  Investments backing linked funds
  Financial assets - at fair value
  - collective investment schemes              -      696 404            -     696   404
  - debentures - listed                  129 241            -            -     129   241
  - debentures - unlisted                      -      530 844            -     530   844
  - domestic equities - listed           418 751            -            -     418   751
  - fixed interest securities - listed   360 868            -            -     360   868
  - international investments
  - debentures                            12 357            -            -      12   357
  - equities - listed                    108 411            -            -     108   411
  - equities - unlisted                        -      758 112            -     758   112
  Investment property                          -            -      179 227     179   227

  Financial assets - at fair value
  Private equity investments                  -             -        7 581       7 581
  Unit trusts and life products               -        99 686            -      99 686
  Seed capital investments                  293             -            -         293
  Seed capital - listed equities         12 554             -            -      12 554
  Financial assets - at fair value
  Conversion option
  - related conversion option
  at fair value                               -             -        6 101        6 101
  Listed investments                    349 878             -            -      349 878
                                      1 392 354     2 085 046      192 909    3 670 309


                                                                  Financial
                                                   Investment   assets - at
  Level 3 reconciliations                            property    fair value      Total
  Balance at beginning of year
  - as previously stated                             102 201        15 953     118 154
  IFRS 10 adjustment                                  51 171             -      51 171
  Balance at beginning of year - restated            153 372        15 953     169 325
  Additions                                           25 546             -      25 546
  Net investment income - unrealised                     309           729       1 038
  Capital repayment                                        -       (3 000)     (3 000)
  Balance at end of year                             179 227        13 682     192 909
  There were no transfers between the various levels during this reporting period.
  All investment properties are valued by an independent valuator on a three-year
  rolling cycle and are sensitive to the property market.

  In determining the fair value of the option included in the financial assets at
  fair value the Vandermark valuation model was used. Significant inputs into the
  model were the exercise price, current market price of Makana based on a valuation
  of the underlying investments, standard deviation of expected returns of 19.8%,
  risk-free rate of 6.3% and a dividend yield of 0%. If the current market price of
  the Makana option was 10% less than management's estimate, the fair value would
  have been reduced by R610 098.
  The only fair value liabilities in the group are the linked investment contract
  liabilities which are all grouped into level 2.

  POST-BALANCE SHEET EVENTS
  The directors are not aware of any post-balance sheet events that materially
  affect the financial results or the financial position of the group as presented
  in the condensed consolidated interim results.


COMMENTARY
Financial performance - Cadiz Holdings has made significant progress in implementing
its turnaround plan over the past six months. However, the group encountered a
difficult trading period, with performance being impacted by lower than expected fee
income from asset management, reduced returns from the group's investment portfolio
and increased costs of the asset management staff equity and retention scheme.
Gross operating revenue was 2% lower at R73.3 million. Investment income, after
deducting third party mutual interests, declined by 15% to R18.3 million off a lower
capital base.
Group operating costs were in line with the previous period despite the inclusion of
the asset management staff equity and retention scheme expense for the first time.
Excluding the impact of this scheme, group operating costs decreased by 4%. The staff
head count was 13% lower at 100 (March 2013: 115).

The share of associate loss of R4.0 million is higher than expected and reflects the
costs of integrating the securities business into BNP Paribas and the delay in
generating revenue from international clients.
Operating profit from continuing operations of R8.9 million (2012: R11.7 million) is
24% lower than the prior year. Total comprehensive income from continuing operations
for the period increased by 19% from R2.9 million to R3.4 million.
Total comprehensive income for the period after taking into account the loss of
R1.9 million from discontinued operations decreased from R2.9 million to R1.5 million.
Earnings per share from continuing operations increased by 25% to 1.5 cent per share,
and earnings per share were 42% lower at 0.7 cents per share.
Headline earnings totalled R1.7 million, with diluted headline earnings per share
42% lower at 0.7 cents. This is in line with the earnings guidance provided to
shareholders in the trading statement issued on SENS on 29 October 2013.
Asset management - Cadiz has continued to focus on building an independent asset
management company which aims to enrich lives through investment excellence and is
therefore committed to delivering strong investment performance relative to its peers
and benchmarks.
Revenue increased by 2% to R70.4 million while expenses of R72.5 million were 8%
higher. This includes the cost of the staff alignment and retention scheme introduced
in 2013. The business incurred a loss of R2.1 million compared to a profit of
R1.6 million in the corresponding period last year.
Total assets under management declined by R5.9 billion from March 2013 to
R28.8 billion (September 2012: R34.8 billion). The net change in the asset base
represents a gain from market movement of R560 million offset by net outflows of
R6.5 billion, mainly as a result of a single client withdrawal of R5.5 billion.
While net cash flows have been negative, Cadiz Asset Management has benefited from
improving margins resulting from the acquisition of higher yielding mandates during
the period. While assets under management have declined by 17%, it is pleasing that
revenue has increased off this reduced asset base. At 30 September assets under
management within Cadiz Collective Investments were R8.7 billion (30% of total
assets under management) and Cadiz Life were R5.2 billion (18% of total assets
under management).
Investment performance remains competitive across most funds with particularly strong
performance in unit trust funds. Highlights include:
-   The Cadiz Money Market Fund is either best or second best fund over all measurement
    periods;
-   The Cadiz Absolute Yield Fund is in the top quartile of all South African - Multi
    Asset Income funds over all periods;
-   The Cadiz Managed Flexible Fund ranked fifth out of 65 South African - Multi Asset
    Class High Equity funds over five years; and
-   The Cadiz Inflation Plus Fund is comfortably ahead of its rolling three-year CPI+5%
    benchmark.
Investments and advisory - At year-end the group's investment portfolio totalled
R320.0 million. Revenue from the investment and advisory business declined by 15% to
R17.6 million as a result of lower returns on the investments and a lower capital base.
At the end of the period the capital was invested as follows:

-   R53.4 million invested in liquid assets for regulatory capital adequacy;
-   R12.1 million invested in liquid assets for short-term commitments;
-   R50.0 million for working capital requirements for the asset management business;
-   R8.0 million loan to BNP Paribas Cadiz Securities for capital adequacy purposes;
-   R84.5 million invested in Makana, our strategic empowerment partner;
-   R16.1 million invested in strategic unlisted investments; and
-   R95.9 million held as a prudent operational buffer.
Cadiz Corporate Solutions, the group's advisory business, successfully concluded a
number of cross-border investments into South Africa and other African countries, and
continues to be recognised for its independence and relationships in the corporate
market, as well as in China and India.
Corporate costs - The group is nearing completion of the structural changes relating
to the turnaround plan and as a result corporate costs have been reduced by 39% to
R3.0 million.
BNP Paribas Cadiz Securities - Cadiz's share of the associate losses from BNP Paribas
Cadiz Securities, which provides South African equity market access to local and
international institutional investors, was R4.0 million which is 43% lower than last
year. The cash equities and structured products offerings continue to gain market
traction with both local and international clients. The research team comprises
18 analysts, including 13 fundamental analysts covering 54% of the JSE. The
non-fundamental analysts provide economic, political and quantitative research.
Share capital and treasury shares - During the period the company repurchased and
cancelled 0.4 million (2012: Nil) shares at an average purchase price of 122 cents
per share. No shares were issued during the period.
Prospects - As a result   of the turnaround plan, Cadiz is a leaner, more focused
business. Key staff are   aligned with the interests of stakeholders as partners in
the business, costs are   well managed and the group is well positioned to deliver
growth in the medium to   long-term.
Cadiz Asset Management remains committed to delivering excellence in investment
performance and client service across its product range. The focus created through
the turnaround plan can be expected to generate long-term value for clients.
The integration of BNP Paribas Cadiz Securities is nearing completion, with the final
phase being the implementation of the Algo and Direct Market Access systems over the
next six months. The team will continue to focus on increasing its penetration with
local and international institutional clients.

Cadiz Corporate Solutions has a healthy deal pipeline and will continue to focus on
the resources sector with renewed attention on local investors, and will also seek
out further opportunities in the hospitality, infrastructure and renewable energy
sectors. The team is well positioned, through its strategic partnerships with leading
international business advisory firms, The Beijing Axis (China) and Eternus Capital
(India), to capitalise on the appetite of foreign investors to gain African exposure.
The group is currently implementing an equity ownership scheme for the Corporate
Solutions staff.
The group will continue to retain a prudent capital base and intends to distribute
annual profits, excluding the non-cash impact of the associates, to shareholders.

On behalf of the board of directors

Peter-Paul Ngwenya                Fraser Shaw
Chairman                          Chief executive officer
Cape Town
18 November 2013

Registered office: The Terraces, 4th Floor, 25 Protea Road, Claremont, 7700
PO Box 44547, Claremont, 7735
Directors: S P Ngwenya (Chairman)*, R F G Cadiz*, G W Fury*#, B H Kent*#,
A N Matyumza*#, B J Memela-Khambula*#, S J Saunders*#, F C Shaw (Chief executive
officer) (* Non-executive directors) (# Independent)
Company secretary: C Schmahl
Transfer secretaries: Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001; PO Box 61051, Marshalltown, 2107
Sponsor: Investec Bank Limited
www.cadiz.co.za

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