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Condensed Consolidated Interim Report for the six months ended 30 September 2013
Nictus Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1981/011858/06)
JSE share code: NCS, NSX Share code: NCT
ISIN number: NA0009123481
("Nictus" or "the Group")
Condensed Consolidated Interim Report for the six months ended
30 September 2013
- Group revenue increased by 5% to R22,7 million
- The Group’s asset base increased by 15% to R369 million
- Net profit after taxation for the period increased by
R5,3 million
- Operating and administrative expenses decreased by 24% to
R19,2 million
Condensed consolidated statement of comprehensive income
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 Mar
2013 2012 2013
Notes R’000 R’000 R’000
Revenue 22 743 21 586 40 156
Cost of sales (10 374) (10 211) (21 535)
Claims incurred (2 223) (12) (693)
Gross profit 10 146 11 363 17 928
Other income – 216 4 300
Investment income from
operations 8 164 7 775 14 064
Operating and
administrative expenses 4 (19 245) (25 530) (51 458)
Operating loss (935) (6 176) (15 166)
Investment income 2 634 1 209 2 005
Operating profit/(loss)
before financing costs 1 699 (4 967) (13 161)
Financing costs – (91) (524)
Profit/(loss) before
taxation 1 699 (5 058) (13 685)
Taxation (428) 1 014 (33)
Profit/(loss) from
continuing operations 1 271 (4 044) (13 718)
Discontinued operations
Profit/(loss) from
discontinued operations,
net of tax – 2 032 (1 411)
Profit/(loss) for the
period 1 271 (2 012) (15 129)
Total comprehensive income
for the period 1 271 (2 012) (15 129)
Profit and total
comprehensive income
attributable to:
Owners of the Company 1 271 (2 012) (15 129)
Earnings per share
Basic earnings/(loss) per
share (cents) 1,92 (7,57) (22,92)
Diluted earnings/(loss)
per share (cents) 1,92 (7,57) (22,92)
Weighted average number of
shares in issue (000’s) 66 270 53 443 59 839
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
At At At
30 Sept 30 Sept 31 Mar
2013 2012 2013
R’000 R’000 R’000
Assets
Non-current assets
Property, plant and equipment 17 415 17 665 17 681
Investments 28 415 23 876 26 058
Loans and receivables 7 232 119 567 10 944
Deferred tax assets 2 741 4 693 3 124
55 803 165 801 57 807
Current assets 313 927 154 551 276 202
Total assets 369 730 320 352 334 009
Equity
Stated capital 48 668 26 722 48 668
Revaluation reserve 5 905 7 675 5 905
Retained earnings 22 747 32 028 21 476
Total equity 77 320 66 425 76 049
Liabilities
Non-current liabilities
Interest bearing loans and
borrowings – 7 500 –
Deferred tax liabilities 5 483 1 812 5 045
5 483 9 312 5 045
Current liabilities 286 927 244 615 252 915
Insurance contract liability 278 040 235 176 244 698
Other current liabilities 8 887 9 439 8 217
Total liabilities 292 410 253 927 257 960
Total equity and liabilities 369 730 320 352 334 009
Condensed consolidated statement of cash flow
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 Mar
2013 2012 2013
R’000 R’000 R’000
Cash flow from operating activities
Cash generated from/(utilised by)
operations 35 163 11 749 (227 387)
Investment income received from
operations 6 653 9 779 12 902
Interest paid – (1 860) (524)
Ordinary dividends received 717 4 265 1 162
Taxation paid – (223) (401)
Net cash flow from operating
activities 42 533 23 710 (214 248)
Net cash outflow from investing
activities (27 886) (63 441) (160)
Net cash inflow from financing
activities – 11 562 37 032
Net increase/(decrease) in cash
and cash equivalents 14 647 (28 169) (177 376)
Cash and cash equivalents at
beginning of period 120 458 297 834 297 834
Cash and cash equivalents at end
of period 135 105 269 665 120 458
Condensed segmental report
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 Mar
2013 2012 2013
R’000 R’000 R’000
Segment assets
Furniture retail 57 639 61 429 53 627
Insurance and finance 347 352 248 758 304 684
404 991 310 187 358 311
Head office and eliminations (35 261) 10 165 (24 302)
369 730 320 352 334 009
Segment revenue
Furniture retail 19 985 18 966 37 887
Insurance and finance 5 033 2 727 2 980
25 018 21 693 40 867
Head office and eliminations (2 275) (107) (711)
22 743 21 586 40 156
Profit/(loss) after taxation
from continuing operations
Furniture retail 303 (1 988) (12 265)
Insurance and finance 2 461 2 050 2 833
2 764 62 (9 432)
Head office and eliminations (1 493) (4 106) (4 286)
1 271 (4 044) (13 718)
Reconciliation between earnings and headline earnings
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 Mar
2013 2012 2013
R’000 R’000 R’000
Profit/(loss) for the period 1 271 (4 044) (13 718)
Profit on disposal of property,
plant and equipment, net of
taxation – – (2)
Headline earnings/(loss) 1 271 (4 044) (13 720)
Headline earnings/(loss) per
share (cents) 1,92 (7,57) (22,93)
Diluted headline earnings/(loss)
per share (cents) 1,92 (7,57) (22,93)
Condensed consolidated statement of changes in equity
Share Stated Revaluation
capital capital reserve
R’000 R’000 R’000
Balance at 1 April 2012 26 722 – 53 918
Total comprehensive income – – –
Loss for the period – – –
Transfers to retained earnings – – (46 243)
Transfer from contingency reserve – – –
Transfer from reserves for
disposal group as “held for
distribution to owners” – – (46 243)
Contributions by and distributions to the owners of
the Group – – –
Dividends to equity holders – - -
Distribution to shareholders –
unbundling – – –
Balance at 30 September 2012 26 722 – 7 675
Total comprehensive income – – –
Loss for the period – – –
Transfers to retained earnings – – (1 770)
Transfer from revaluation reserve
on distribution to ordinary
shareholders - – (1 770)
Contributions by and distributions
to the owners of the Group (26 722) 48 668 –
Issue of new ordinary shares – 21 946 –
Conversion of shares (26 722) 26 722 –
Distribution to shareholders –
unbundling – – –
Balance at 31 March 2013 – 48 668 5 905
Total comprehensive income – – –
Profit for the period – – –
Balance at 30 September 2013 – 48 668 5 905
Contingency Retained Total
reserve earnings equity
R’000 R’000 R’000
Balance at 1 April 2012 9 196 78 731 168 567
Total comprehensive income – (2 012) (2 012)
Loss for the period – (2 012) (2 012)
Transfers to retained earnings (9 196) 55 439 –
Transfer from contingency reserve (2 106) 2 106 –
Transfer from reserves for
disposal group as “held for
distribution to owners” (7 090) 53 333 –
Contributions by and distributions
to the owners of the Group – (100 130) (100 130)
Dividends to equity holders - (7 615) (7 615)
Distribution to shareholders –
unbundling – (92 515) (92 515)
Balance at 30 September 2012 – 32 028 66 425
Total comprehensive income – (13 117) (13 117)
Loss for the period – (13 117) (13 117)
Transfers to retained earnings – 1 770 –
Transfer from revaluation reserve
on distribution to ordinary
shareholders – 1 770 –
Contributions by and distributions
to the owners of – 795 22 741
Issue of new ordinary shares – – 21 946
Conversion of shares – – –
Distribution to shareholders –
unbundling – 795 795
Balance at 31 March 2013 – 21 476 76 049
Total comprehensive income – 1 271 1 271
Profit for the period – 1 271 1 271
Balance at 30 September 2013 – 22 747 77 320
Notes to the financial statements
1. Statement of compliance
These condensed consolidated interim financial statements have
been prepared in accordance with the measurement and recognition
requirements of International Financial Reporting Standards (“IFRS”),
the presentation and disclosure requirements of IAS 34
Interim Financial Reporting, the SAICA Financial Reporting Guides
as issued by the Accounting Practices Committee and the Financial
Reporting Pronouncements as issued by the Financial Reporting
Standards Council, the Listings Requirements of the JSE Limited
(“JSE”) and the Companies Act of South Africa.
The financial information for the year ended 31 March 2013 has been
extracted from audited annual financial information, however the
Condensed Consolidated Interim Report (“the Interim Report”) has
itself not been audited or reviewed. The directors take full
responsibility for the preparation of the Interim Report and the
correct extraction of the financial information included therein from
the underlying annual financial statements for the year ended
31 March 2013. The annual financial statements and the audit report
thereon is available for inspection at the Company’s registered
office.
The preparation of the group’s condensed consolidated financial
results was supervised by the group financial director, WO Fourie,
CA(SA).
2. Basis of measurement
The condensed consolidated interim financial statements are presented
in thousands of South African Rands (R’000s) on the historical cost
basis, except for derivative financial instruments which are measured
at fair value and property measured at market value. The accounting
policies presented in the annual financial statements for the year
ended 31 March 2013 have been applied consistently to all of the
periods presented in these condensed consolidated interim financial
statements by all Group entities. The accounting policies are in
terms of IFRS.
3. Related parties
During the six month period ended 30 September 2013, certain
companies within the Group entered into transactions with each other.
These intra-Group transactions have been eliminated on consolidation.
Related party information is unchanged from that reported at
31 March 2013. Refer to the 2013 annual report for further information,
accessible on Nictus’ website www.nictuslimited.co.za.
4. Review of operations
The revenue and profit for the period under review increased compared
to the six months ended 30 September 2012. The major contributing
factor to the success is attributed to intensified management focus
on the utilisation of the additional capital injected in the prior
year. It is also important to note that once off costs of R3 million
incurred in the prior period relating to the unbundling were not
incurred in the current period.
Despite the turmoil in the South African economy resulting in strikes
and labour unrest across all sectors, the equity markets have
performed reasonably well. It remains to be seen what effect rising
inflation will have on consumer spending in the second half of the
Group’s current financial year.
Segmental results
Furniture retail: Revenue increased by 5% compared to the six
months ended 30 September 2012. The revenue was effectively achieved
in only three branches compared to four in the prior period,
following the closure of the Maponya Mall branch. Revenue
however remains a focus point in the light of the uncertain impact of
rising inflation on consumer spending and buying power. However
profitability has increased significantly compared to the same period
last year due to intensified management focus and specific actions
taken to improve profitability. The positive effect of the additional
capital injected in the prior year is becoming evident.
Insurance and finance: The premium income increased, and
investment income was higher than in the previous period as a
result of the additional capital resulting in a 20% increase in net
profit compared to the comparative six month period ended
30 September 2012 for the segment. The performance of equities on the
JSE remains highly unpredictable and is monitored constantly to
ensure returns are maximised.
The regulatory environment in the insurance industry is rapidly
changing with an uncertain outcome at this point in time; the
segment management is intensely involved keeping up to date with
changes and keeping the board of directors (“the Board”) informed.
Headline earnings
For the six month period ended 30 September 2013 there were no items
that impacted the headline earnings calculation.
Basic earnings per share
Earnings/(loss) per share based on profit or loss for the six
months ended 30 September 2013 was 1,92 cents (30 September 2012:
loss 7,57 cents), and a headline earnings/(loss) per share of 1,92
cents (30 September 2012: loss 7,57 cents).
Dividend
No interim dividend has been proposed by the Board of directors.
Directors
FR van Staden and JJ Retief resigned as directors with effect from
30 August 2013. JL Olivier resigned on 15 October 2013. Gerard
Swart was appointed as an independent non-executive director on 15
October 2013.
Prospects
The Group has historically generated the majority of its earnings in
the second part of the financial year. The Board is confident that
the various segments are well placed to utilise the capital injection
that resulted from the unbundling and build on the positive results
achieved in the first six months to sustain the Group profitability.
On behalf of the Board:
NC Tromp (Managing Director)
WO Fourie (Financial Director)
Randburg
28 November 2013
Directors
BJ Willemse (Chairman – Non-executive) G Swart (Non-executive)
NC Tromp (Managing Director)
WO Fourie (Financial Director) JD Mandy (Non-executive)
PJ de W Tromp (Non-executive).
Transfer secretaries
Computershare Investor Services Proprietary Limited
PO Box 61051, Marshalltown 2107
Company secretary
Veritas Board of Executors Proprietary Limited Corner of Pretoria and
Dover Street Randburg (PO Box 2878, Randburg 2125) RSA
Registered office
Nictus Building
corner of Pretoria and Dover Street, Randburg
(PO Box 2878, Randburg 2125)
Namibia registered office
3rd Floor, Corporate House, 17 Lüderitz Street, Windhoek
(PO Box 755, Windhoek 9000)
Sponsor on the JSE
KPMG Services Proprietary Limited
Sponsor on the NSX
Simonis Storm Securities Proprietary Limited
www.nictuslimited.co.za
Date: 28/11/2013 11:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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