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Unaudited Group Interim Results for the six months ended 30 September 2013
Niveus Investments Limited
Reg. no: 1996/005744/06
Incorporated in the Republic of South Africa
JSE share code: NIV
ISIN code: ZAE000169553
("the Company" or "the Group" or "Niveus")
UNAUDITED GROUP INTERIM RESULTS
for the six months ended 30 September 2013
ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 September 30 September 31 March
2013 2012 2013
R'000 R'000 R'000
ASSETS
Non-current assets 606 309 660 420 569 750
Property, plant and equipment 487 352 289 738 452 170
Investment properties 3 700 3 700 3 700
Goodwill 49 730 49 730 49 730
Interest in associates and joint ventures 15 365 294 122 15 141
Other intangible assets 26 128 6 625 27 229
Deferred taxation 18 403 9 412 15 553
Non-current receivables 5 631 7 093 6 227
Current assets 1 433 409 265 777 1 533 308
Other 1 200 295 127 265 1 273 343
Bank balances and deposits 233 114 138 512 259 965
Non-current assets held for sale 1 982
Total assets 2 039 718 928 179 2 103 058
EQUITY AND LIABILITIES
Equity 1 439 586 475 724 1 444 738
Equity attributable to equity holders of the parent 894 626 500 645 860 241
Non-controlling interests 544 960 (24 921) 584 497
Non-current liabilities 213 685 263 385 229 528
Deferred taxation 28 547 37 34 797
Borrowings 182 691 262 676 192 693
Operating lease equalisation liability 2 447 672 2 038
Current liabilities 386 447 185 301 428 792
Non-current liabilities held for sale 3 769
Total equity and liabilities 2 039 718 928 179 2 103 058
Net asset value per share (cents) 784 467 764
Net tangible asset value per share (cents) 717 416 696
ABRIDGED CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2013 2012 2013
R'000 R'000 R'000
Revenue 443 343 92 542 200 525
Net gaming win 396 988 292 742 655 611
Group revenue 840 331 385 284 856 136
Other income 2 507 9 023
Other operating expenses (764 080) (303 833) (693 632)
EBITDA 78 758 81 451 171 527
Depreciation and amortisation (52 058) (31 376) (71 898)
26 700 50 075 99 629
Investment income 6 514 1 132 5 514
Finance costs (8 634) (10 447) (16 273)
Share of profits of associates and joint ventures 423 (16 305) (14 722)
Gain on bargain purchase 259 781
Other impairment reversals 689 5 539
Asset impairments (1 614) (2 880)
Impairment of goodwill, investments and
receivables (757) (343)
Profit before taxation 24 078 23 698 336 245
Taxation (13 159) (14 070) (30 868)
Profit for the year from continuing operations 10 919 9 628 305 377
Discontinued operations (105) (16 178)
Profit for the year 10 919 9 523 289 199
Attributable to:
Equity holders of the parent 15 396 8 791 290 414
Non-controlling interests (4 477) 732 (1 215)
10 919 9 523 289 199
Unaudited Audited
Six months ended Year ended
30 September 31 March
2013 2012 2013
R'000 R'000 R'000
Reconciliation of headline earnings Gross Net Gross Net Gross Net
Earnings attributable to equity holders
of the parent 15 396 8 791 290 414
IAS 16 (Gains)/losses on disposal of
plant and equipment (807) (532) 1 186 1 096 238 107
IAS 16 Impairment of plant and equipment 1 614 1 162 2 880 2 074
IFRS 3 Impairment of goodwill 757 757 343 343
IFRS 3 Gain on bargain purchase (259 781) (259 781)
IAS 27 Loss from disposal of subsidiary 9 555 9 555
Re-measurements included in equity-
accounted earnings of associates (136) (147) (147)
Headline profit 16 026 10 508 42 565
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2013 2012 2013
Earnings per share (cents)
Basic 13,6 10,6 301,3
Continuing operations 13,6 10,7 318,1
Discontinued operations (0,1) (16,8)
Headline 14,2 12,7 44,2
Continuing operations 14,2 12,8 50,0
Discontinued operations (0,1) (5,8)
Diluted basic 13,6 10,6 301,3
Continuing operations 13,6 10,7 318,1
Discontinued operations (0,1) (16,8)
Diluted headline 14,1 12,7 44,2
Continuing operations 14,1 12,8 50,0
Discontinued operations (0,1) (5,8)
Weighted average number of shares in issue ('000) 112 908 82 876 96 373
Actual number of shares in issue at end of period ('000) 114 132 107 119 112 619
Weighted average number of shares in issue (diluted) ('000) 113 553 82 876 96 373
ABRIDGED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2013 2012 2013
R'000 R'000 R'000
Profit for the period 10 919 9 523 289 199
Other comprehensive income:
Foreign currency translation differences 267 30 96
Total comprehensive income 11 186 9 553 289 295
Attributable to:
Equity holders of the parent 15 430 8 821 290 510
Non-controlling interests (4 244) 732 (1 215)
11 186 9 553 289 295
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2013 2012 2013
R'000 R'000 R'000
Balance at beginning of year 1 444 738 24 879 24 879
Stated capital
Shares issued 19 059 673 958 745 457
Current operations
Total comprehensive income 11 186 9 553 289 295
Equity-settled share-based payments 874
Common control reserve (207 543) (208 304)
Effects of changes in holding (16 000) 7 169
Minority interest on acquisition of subsidiaries (25 123) 588 762
Capital reductions and dividends (20 271) (2 520)
Balance at end of period 1 439 586 475 724 1 444 738
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2013 2012 2013
R'000 R'000 R'000
Cash flows from operating activities (23 285) 96 074 216 908
Cash flows from investing activities (37 737) (66 661) (37 193)
Cash flows from financing activities 286 97 942 69 146
(Decrease)/increase in cash and cash equivalents (60 736) 127 355 248 861
Cash and cash equivalents
At beginning of period 259 965 11 139 11 139
Foreign exchange difference 267 18 (35)
At end of period 199 496 138 512 259 965
Bank balances and deposits 233 114 138 512 259 965
Bank overdrafts included under current liabilities (33 618) - -
Cash and cash equivalents 199 496 138 512 259 965
SEGMENTAL ANALYSIS
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2013 2012 2013
Revenue R'000 R'000 R'000
Gaming and entertainment 13 642 7 469 24 960
Beverages 429 701 175 565
Vehicle component manufacturing 85 073
Total 443 343 92 542 200 525
Net gaming win
Gaming and entertainment 396 988 292 742 655 611
Total 396 988 292 742 655 611
EBITDA
Gaming and entertainment 107 599 86 134 186 070
Vehicle component manufacturing (2 920)
Beverages (7 699) (4 496)
Head office (21 142) (1 763) (10 047)
Total 78 758 81 451 171 527
Profit before taxation
Gaming and entertainment 60 878 48 849 106 541
Vehicle component manufacturing (7 177)
Beverages (17 913) (16 305) (23 873)
Head office (18 887) (1 669) 253 577*
Total 24 078 23 698 336 245
* Profit before tax includes gain on bargain purchase
NOTES AND COMMENTARY TO THE ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS
Basis of preparation and accounting policies
The results for the six months ended 30 September 2013 have been prepared in accordance with International Financial
Reporting Standards (“IFRS”), the disclosure of IAS 34: Interim Financial Reporting, the SAICA Financial Reporting
Guides as issued by the Accounting Practices Board, the Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council, the requirements of the South African Companies Act, 2008 (as amended) and the Listings
Requirements of the JSE Limited. The accounting policies of the group are consistent with those applied for the year
ended 31 March 2013. As required by the Listings Requirements of the JSE Limited, the group reports headline earnings
in accordance with Circular 2/2013: Headline Earnings as issued by the South African Institute of Chartered Accountants.
The interim financial statements have not been audited nor independently reviewed and were prepared under the supervision
of the financial director, Ms Muriel Loftie-Eaton CA(SA).
Vukani
Vukani contributed R87 million to group gaming EBITDA. The EBITDA includes R15 million in share-based payment costs
that are not expected to recur at the same rate in future. EBITDA is in line with budget, with the higher gross gaming
revenue ("GGR") per limited payout machine (“LPM”) compensating for LPM roll-out which is slower than anticipated. While
the number of LPMs has not increased significantly since year-end, the approvals pipeline is better than previous periods.
Additional LPM roll-out remains contingent on gaming and liquor board meetings, with the KwaZulu-Natal (“KZN”) roll-out in
particular being hampered by a significant backlog of applications at the liquor board. The delays previously experienced
in the Gauteng Province, appear to have subsided.
We remain concerned about the number of illegal gaming operations in the country and are engaging with the regulators
to assist in addressing the problem which, if not addressed, will have a negative impact on our business.
The gaming industry has taken notice of the potential of sports betting and our competitors have started to acquire sports
betting licences during the last 12 months. We have been involved in the industry for the last 24 months and have been
operating our own sports betting site for the last 12 months. Plans to participate in the industry are in place and can be
expanded if we are comfortable with our position in the market, the potential returns of the business and our risk management
systems. We have been granted sports-betting licences in the Western Cape.
The number of LPMs at 30 September 2013 were 4 459, with an average GGR per LPM of R16 831 for the six months
ended 30 September 2013. Operational overheads increased by R23 million from R80 million in the comparative period,
mainly due to the provision for share-based payment costs and foreign exchange losses on unhedged foreign payables
for LPM purchases.
Bingo
Trading in the key Gauteng market has exceeded the budget and the prior year's trading, with Gauteng sites continuing to grow
faster than the provincial gaming growth rate. Our integrated product offering, including our Galaxy Grill concept, appears
to be well received by the market and our operational service is improving continuously.
Bingo contributed R18 million to group EBITDA and R7 million to net profit after taxation.
The group was granted two licences in the Eastern Cape, one of which is in Port Elizabeth. It is expected that trading
under these licences will commence in the first quarter of 2014.
We await the finalisation of the licences in KZN where the gaming board has indicated that it intends to reduce the
number of potential Bingo licences by 30%. To date we are the only active operator in KZN, located in Amanzimtoti.
Significant one-off costs are included in the current period that relate to bid costs and lease costs prior to
opening sites. The group benefited from a revised equipment sourcing structure that reduced rental costs in the
current period and will result in lower future costs.
The approval of electronic Bingo terminals (“EBTs”) in KZN and the Eastern Cape has not been finalised by the respective
gaming boards. The industry is actively engaging with the gaming boards to obtain the necessary approvals in this regard.
KWV
The change in year-end for KWV makes comparisons to the prior reported nine-month period difficult. At year-end the
group had returned to profitability, but the interim results show a loss of R12 million. Compared to the six-month
comparable results, volume growth of 5% and revenue growth of 25% were achieved.
The loss includes significant inventory write-offs and foreign exchange losses of R37 million of which approximately
R10 million relates to mark-to-market losses attributable to future periods for which the income has not been received.
The net loss of R27 million represents additional income that the group could have earned had it not elected to hedge
its export sales book. The benefit of the weaker exchange rate is reflected in group turnover.
Costs remain well controlled with most cost centres containing costs below budget.
The group is expected to continue with its hedging policy which will result in mark-to-market losses if the currency
continues to depreciate. A substantial portion of the sales is hedged when pricing with customers is concluded to
ensure that planned margins are achieved. This policy is appropriate given the group’s low aggregate profitability
which impedes the ability to absorb foreign exchange risk. The average hedge rate continues to follow the ZAR
depreciation against key exchange rates, with the average hedge rate now considerably higher than at year-end.
The group will be a net beneficiary if the currency continues to weaken.
During the period the group acquired an additional 2 million shares in KWV at a price of R8 per share, taking the
interest in KWV from 52% to 54%.
Head office
The head office EBITDA comprises mainly costs relating to directors’ emoluments, management salaries and share-based
payment provisions totalling R13 million as well as management fees of R4,3 million paid to the management company.
Dividend and shares issued
On 22 July a gross dividend of 18 cents per ordinary share, with a net dividend of 15,3 cents per share after
dividends withholding tax of 15%, or the option to elect a capitalisation issue alternative of 1 share for every
70 shares held, was declared. A gross cash dividend of R1,2 million was paid and 1,5 million capitalisation shares
were issued on 12 August 2013.
Interim dividend
The directors approved an interim gross ordinary dividend for the six months ended 30 September 2013 of 7 cents
per share on Thursday, 21 November 2013. The dividend will be payable on Tuesday, 17 December 2013. There are
114 131 689 ordinary shares in issue.
The interim dividend meets the definition of a dividend in terms of the Income Tax Act (Act 58 of 1962). The
dividend amount net of South African dividends tax of 15% is 5.95 cents per share to those shareholders that
are not exempt from dividends tax. The distribution is made from income reserves and no STC credits were applied
against the dividend. The Company's tax reference number is 9564/137/84/3.
Last day to trade cum dividend Friday, 6 December 2013
Trading ex dividend commences Monday, 9 December 2013
Record date Friday, 13 December 2013
Payment date Tuesday, 17 December 2013
Share certificates may not be dematerialised or rematerialised between Monday, 9 December 2013 and Friday,
13 December 2013, both days inclusive.
Comparative figures
The comparative figures are not comparable to the results for this period due to the acquisition of interest in the
Galaxy Bingo Group, the acquisition of a controlling interest in KWV and further shares in KWV as well as the
acquisition and disposal of Formex Industries Proprietary Limited.
André van der Veen
21 November 2013
Cape Town
Directors: JA Copelyn†, MM Loftie-Eaton*, KI Mampeule#, ML Molefi#, JG Ngcobo#, Y Shaik#, A van der Veen*
(* executive † non-executive # independent non-executive)
Company Secretary: HCI Managerial Services Proprietary Limited, Block B, Longkloof Studios, Darters Road,
Gardens 8001, PO Box 5251, Cape Town 8000
Transfer secretaries: Computershare Investor Services Proprietary Limited,
70 Marshall Street, Johannesburg 2001, PO Box 61051, Marshalltown 2107
Sponsor: PSG Capital Proprietary Limited
Website: www.niveus.co.za
Date: 21/11/2013 10:43:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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