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Interim results for six month period ended 31 August 2013
AFRICAN DAWN CAPITAL LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/020520/06)
JSE code: ADW
ISIN: ZAE000060703
("the Company" or "the Group")
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION FOR THE SIX MONTHS
ENDED 31 AUGUST 2013
Six months Six months Year
ended ended ended
31-Aug-13 31-Aug-12 28-Feb-13
R`000 R`000 R`000
(Unaudited) (Reviewed) (Audited)
(Restated) (Restated)
Non-current assets 4,193 2,327 3,329
Property, plant and equipment 1,145 979 899
Intangible assets 2,410 729 1,792
Other financial assets 638 619 638
Current assets 111,946 120,160 114,084
Property in possession 21,327 25,560 21,335
Other financial assets 300 300 300
Current tax receivable 95 1,639 95
Trade and other receivables 207,078 247,256 208,815
Impairment on trade receivables (125,462) (174,362) (125,475)
Net trade and other receivables 81,616 72,894 83,340
Cash and cash equivalents 8,608 19,767 9,014
Non-current assets held for sale 3,840 - 4,129
Total assets 119,979 122,487 121,542
Capital and reserves 59,172 65,609 63,251
Share capital 284,634 284,634 284,634
Accumulated (loss) (225,462) (219,025) (221,383)
Non-current liabilities 25,635 24,862 22,682
Borrowings 25,338 24,443 22,366
Finance lease obligation 297 419 316
Current liabilities 35,172 32,016 35,609
Finance lease obligation 83 111 77
Operating lease obligation 195 - 195
Borrowings 8,872 4,544 7,292
Current tax payable 18,468 18,148 18,709
Trade and other payables 7,554 9,213 9,336
Total liabilities 60,807 56,878 58,291
Total equity and liabilities 119,979 122,487 121,542
Ordinary shares in issue (`000) 508,184 508,184 508,184
Treasury shares (’000) 3,268 3,268 3,268
Net number of ordinary shares (’000) 504,916 504,916 504,916
Net asset value per share (cents) 11.7 12.9 12.5
Net tangible asset value per share 11.2 12.8 12.2
Condensed Consolidated Statements of Comprehensive Income for the six months
ended 31 August 2013
Six months Six months Year
ended ended ended
31-Aug-13 31-Aug-12 28-Feb-13
R`000 R`000 R`000
(Unaudited) (Reviewed) (Audited)
(Restated) (Restated)
Revenue 18,795 16,342 33,105
Cost of sales (590) (464) (399)
Gross profit 18,205 15,878 32,706
Other income 1,275 1,557 2,770
Operating and other expenses (20,257) (14,838) (32,455)
Operating (loss)/profit (777) 2,597 3,021
Investment revenue 80 348 620
Finance cost (2,230) (990) (2,286)
(Loss)/Profit before taxation (2,927) 1,955 1,355
Taxation (268) (55) (627)
(Loss)/Profit for the period from
continuing operations (3,195) 1,900 728
(Loss)/Profit for the period from
Discontinued operations (884) (1,652) (2,838)
(Loss)/Profit for the period (4,079) 248 (2,110)
Weighted number of shares 508,184 508,184 508,184
Treasury shares 3,268 3,268 3,268
Net weighted number of shares 504,916 504,916 504,916
Total Basic (loss)/earnings per share (0.81) 0.05 (0.42)
Basic (loss)/earnings continued
operations per share (0.63) 0.38 0.14
Basic (loss)/earnings discontinued
operations per share (0.18) (0.33) (0.56)
Total Diluted (loss)/earnings per share (0.56) 0.10 (0.24)
Diluted (loss)/earnings continued
operations per share (0.41) 0.43 0.32
Diluted (loss)/earnings discontinued
operations per share (0.15) (0.33) (0.56)
Total Headline (loss)/earnings per share(0.75) 0.05 (0.40)
Headline (loss)/earnings continued
operations per share (0.57) 0.10 (0.24)
Headline (loss)/earnings discontinued
operations per share (0.18) (0.05) (0.16)
Total Diluted headline (loss)/earnings
per Share (0.52) 0.11 (0.26)
Diluted headline (loss)/earnings
continued operations per share (0.37) 0.10 (0.24)
Diluted headline (loss)/earnings
discontinued operations per share (0.15) 0.01 (0.02)
Reconciliation of headline earnings
Basic (loss)/earnings (4,079) 248 (2,110)
Non-recurring adjustments
Profit/(Loss) on disposal of property
Plant and equipment - 16 (24)
Impairment of property, plant & equipment 289 - 110
Headline (loss)/earnings (3,790) 264 (2,024)
Condensed Consolidated Statements of Comprehensive Income for the six months
ended 31 August 2013
Six months Six months Year ended
ended ended
31-Aug-13 31-Aug-12 28-Feb-13
R`000 R`000 R`000
(Unaudited) (Reviewed) (Audited)
(Restated) (Restated)
(Loss)/Profit for the period (4,079) 248 (2,110)
Other comprehensive income: - - -
Total comprehensive income (4,079) 248 (2,110)
Attributable to
Profit from continuing operations (3,195) 1,900 728
Profit from discontinued operation (884) (1,652) (2,838)
Owners of the parent (4,079) 248 (2,110)
Condensed Consolidated Statements of Changes in Equity for the six months
ended 31 August 2013
Share Share Reserves+ Accum Ordinary
Capital Premium Other NDR Loss Share-
holders
Equity
Balance at 29 Feb 2012 5,074 279,560 97 (219,370) 65,361
Total comprehensive income
for the six months - - - 248 248
Transfer to insurance reserves - - (97) 97 -
Balance at 31 Aug 2012 5,074 279,560 - (219,025) 65,609
Total comprehensive income
for the six months - - - (2,358) (2,358)
Balances at 28 Feb 2013 5,074 279,560 - (221,383) 63,251
Total comprehensive loss
for the six months - - - (4,079) (4,079)
Balance at 31 Aug 2013 5,074 279,560 - (225,462) 59,172
Consolidated Statements of Cash Flows for the six months
ended 31 August 2013
Six months Six months Year
ended ended ended
31-Aug-13 31-Aug-12 28-Feb-13
R`000 R`000 R`000
(Unaudited) (Reviewed) (Audited)
(Restated) (Restated)
Cash inflow/(outflow) from continuing
operating activities (2,245) 5,763 (3,137)
Cash (outflow) from discontinuing
operating activities (614) (1,480) (2,883)
Cash (outflow) from
investing activities (895) (826) (2,443)
Cash inflow/(outflow) from
Financing activities 3,348 859 2,026
Net cash (outflow)/inflow for period (406) 4,316 (6,437)
Cash and cash equivalents at
beginning of period 9,014 15,451 15,451
Cash and cash equivalents at
end of period 8,608 19,767 9,014
Basis of preparation
The condensed interim financial statements are prepared in South African
Rands thousands (‘000) on the historical-cost basis, except for certain
assets and liabilities which are carried at amortised cost, and derivative
financial instruments which are stated at their fair value. The financial
statements have been prepared in accordance with the framework concepts and
measurement and recognition requirements of International Financial
Reporting Standards (IFRS), IAS 34 as well as the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by Financial Reporting Standards Council, the
requirements of the South African Companies Act (Act No 71 of 2008), as
amended, and the JSE Listings Requirements. The group has adopted the
following new standards: Amendment to IFRS 7 – Disclosures – Offsetting
Financial Assets and Financial Liabilities, IFRS 10 – Consolidated
Financial Statements, IFRS 11 – Joint Arrangements, IFRS 12 – Disclosure of
Interests in Other Entities, IFRS 13 – Fair Value Measurement, Amendments
to IAS 1 – Presentation of Items of Other Comprehensive Income, Amendments
to IAS 16- Property, Plant and Equipment, Amendment to IAS 19- Employee
benefits, Revised IAS 27 and 28 – Investments in Associates and Joint
Ventures, Amendments to IAS 32- Financial Instrument Presentation,
Amendments to IAS 34- Interim Financial Reporting. There was no material
impact on the interim financial statements identified based on management’s
assessment of these standards.
In accordance with IFRS 5 (Non-current Assets Held for Sale and
Discontinued Operations) the comparative figures have as indicated been
restated to account for the discontinued operations.
The condensed interim financial information for the six-month period ended
31 August 2013 were not reviewed or audited by the Group`s auditors, Grant
Thornton.
The condensed consolidated interim financial statements were prepared by E
Nel CA(SA) and supervised by the financial director, T Kruger CA(SA).
Notes to the condensed consolidated financial statements
1. Reporting entity:
African Dawn Capital Limited is a Company domiciled in the Republic of South
Africa. The condensed consolidated financial statements of the Company for
the six months ended 31 August 2013 comprise the Company and its
subsidiaries and the Group`s interests in associates and jointly controlled
entities.
2. Statement of compliance:
The consolidated interim financial information for the six months ended 31
August 2013, has been prepared in accordance with International Financial
Reporting Standards (IFRS), the interpretations adopted by the International
Accounting Standards Board (IASB) and the requirements of the South African
Companies Act. These condensed interim financial statements are presented in
compliance with IAS 34 - Interim Financial Reporting as well as SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Pronouncements as issued by the Financial Reporting Standards
Council, and should be read in conjunction with the annual financial
statements for the year ended 28 February 2013. The results were approved by
the Board on 26 November 2013.
3. Significant accounting policies:
The accounting policies adopted in the preparation of the condensed interim
financial information are consistent with those of the annual financial
statements for the year ended 28 February 2013, other than those mentioned
in basis of preparation above. For a full list of standards and
interpretations which have been adopted we refer you to the 28 February 2013
annual financial statements.
4. Accounting Estimates:
The preparation of financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities,
income and expense. Actual results may differ from these estimates. Except
as described below, in preparing these condensed consolidated financial
statements, the significant judgements made by management in applying the
Group`s accounting policies and the key sources of estimation certainty were
the same as those that applied to the consolidated financial statements for
the six months ended 31 August 2012 and year ended 28 February 2013. During
the six months ended 31 August 2013 management reassessed its estimates in
respect of the recoverable amount of investments in subsidiaries, the
recoverable amount of trade and other receivables (in conjunction with the
current economic climate) and deferred tax assets.
5. Impairments of trade and other receivables
The majority of the impairment of trade receivables is based on the
underlying security value at the time of reporting. The security values were
reassessed at 31 August 2013 and provisions were adjusted accordingly.
Impairment
31-Aug-13 31-Aug-12 28-Feb-13
R`000 R`000 R`000
Movement in impairment provision (13) (2,817) (23,486)
6. Property in possession
The Company perfected its security over properties in order to protect its
capital advances in terms of its loans, by taking transfer of ownership. The
properties will be developed, where it is considered economically viable,
and sold when favourable market conditions exist in order to realise the
carrying value thereof.
7. Segmental information
Figures in ZAR thousands
31 Aug 2013 Bridging Personal & Other Total
Finance Short Term
Revenue from continued operations 321 16,037 2,437 18,795
Revenue from discontinued operations 571 - - 571
Net (loss)from continued
operations (313) (122) (2,760) (3,195)
Net (loss) from discontinued
operations (884) - - (884)
Net asset value (35,575) (1,642) 96,389 59,172
31 Aug 2012 Bridging Personal & Other Total
Finance Short Term
Revenue 1,291 12,738 2,313 16,342
Net profit/(loss)from continued
operations (8,690) 2,217 8,372 (1,899)
Net (loss) from discontinued
operations (1,652) - - (1,652)
Net asset value (33,178) (3,687) 102,474 65,609
8. Discontinued operation
Management took the decision to close down a subsidiary African Dawn Debt
Management (Pty) Ltd. This was decided to curtail costs as this unit was
unable to secure viable mandates to generate income.
Afdawn Debt Management Proprietary Limited
Six months Six months Year
ended ended ended
31-Aug-13 31-Aug-12 28-Feb-13
R`000 R`000 R`000
(Unaudited) (Reviewed) (Audited)
Statement of comprehensive income
Revenue 571 - 428
Employee costs (1,209) (1,443) (2,847)
Other expenses (246) (209) (419)
Loss for the Period (884) (1,652) (2,838)
Statement of financial position
Non-Current Assets -
Current Assets 1,087 107 1,000
Trade and other receivables 469 19 487
Intercompany loan receivable 502 - 513
Cash and cash equivalents 116 88 -
Total Assets 1,087 107 1,000
Non Current liabilities
Current liabilities 13,864 11,446 12,894
Intercompany loan payable 13,803 11,396 12,715
Trade and other payables 61 50 179
Total Liabilities 13,864 11,446 12,894
COMMENTS FROM THE BOARD
The past period concentrated effort on transforming and preparing the
company to enable it to execute on the announced change in strategy to
become an active investment holding company, without the legacy of the past
history. The company will focus on acquiring shareholdings in
entrepreneurial companies, with strong innovation drive, which are in proven
growth phases by enhancing the capabilities of these entities to accelerate
long term sustainable growth.
The execution of the said strategy will require the support of our major
stakeholders together with various regulatory approvals. In meeting with
various large shareholders, it was evident that the change in vision and
related corporate actions that underpinned the new vision would be formally
supported. The board of directors of Afdawn will diligently drive certain
short-term actions to propel the strategy forward:
1. Further capabilities will be acquired and institutionalised, which will
include deal sourcing and structuring capabilities, investee mentorship
programmes, the setting up of an investment fund and co-investment
alliances. To this end we draw shareholders attention to the cautionary
announcement dated 18 November 2013.
2. The disposal of non-core legacy assets and conversion thereof into cash
is of paramount importance;
3. The company will disinvest from its exposure to the unsecured lending as
per it's new business model and will actively pursue appropriate buyers for
Elite Group. This decision was made by the board subsequent to 31 August
2013;
4. New permanent capital is a prerequisite in fulfilling our new vision.
Exciting new alliances will drive the investment pipeline. Shareholders will
have the opportunity to participate in the new strategy through a proposed
rights offer; and
5. Afdawn will be rebranded to articulate the vision and strategy in a
visual manner.
During the period the property transfer collection business (“Debt
Management”) was discontinued and outsourced to a third party which includes
management of the discontinued business on a success fee basis. This
initiative will see an estimated net cost savings of R1,7m per annum. The
present cost curtailing programmes will be extended with the company
establishing a very small head office structure.
It is imperative that we unlock shareholder wealth for all stakeholders
through the successful execution of the new vision. We are excited in the
strides we have made thus far.
Changes to the board of directors
The composition of the board has changed significantly since the last year
end as the company embarked on sourcing the appropriate capabilities at
board level to execute the new vision. On 10 April 2013 TF Kruger stepped
down as Chief Executive Officer and was appointed as Financial Director and
on the same date, Mr JS van der Merwe was appointed as executive chairman.
Further changes occurred to the board with the appointments of Ms WN Luhabe,
V Lessing, and JK van Zyl on 29 May 2013. The Board accepted the
resignations of L Taylor (29 May 2013), and CF Wiese (10 June 2013).
Subsequent to the reporting period Ms WN Luhabe (30 September 2013) and Dr
GE Stoop (5 November 2013) resigned.
South African Revenue Services (“SARS”) liability
Afdawn continued to work closely with SARS on all aspects relating to our
tax position in terms of the agreed action plan with SARS. Documentation as
set out in Section 200 of the Income Tax Act, which enables corporate
companies to settle their tax obligations with SARS, has been submitted and
queries raised by SARS answered. We have vigorously explored and consulted
with various independent tax experts to ensure that a beneficial outcome for
Afdawn could be achieved. The SARS liability has been fully provided for in
our accounts with regards to returns that have been assessed, disagreements
were provided for to the extent of the most likely outcome.
Allegro Holdings Proprietary Limited ("Allegro")
Afdawn has concluded a Memorandum of Understanding (28 February 2013) which
will facilitate an amicable conclusion to the matter. Progress has been slow
in this regard. Thus far the company has not become aware of any information
during our deliberations that will alter our conclusion reached previously.
To the date of signing this report no claims have been received by Afdawn,
nor have we been able to establish any basis for a potential claim against
Afdawn and therefore no provisions have been made for any such contingency.
National Housing Financing Corporation (“NHFC”)
In terms of the settlement agreement with the NHFC that was signed on 30 May
2011, Nexus Personnel Finance’s (“Nexus”) (a wholly owned subsidiary of
Afdawn) facility of R5 million became payable in October 2013 subsequent to
reporting date of 31 August 2013. Nexus is currently negotiating extending
the terms with the NHFC.
Prospects
The company has embarked on its journey to execute its new vision with
passion and anticipation that this will create appeal to the investing
community. We remain cognisant of the remaining challenges and believe that
prudently constructed plans will prove sustainable.
Administration
African Dawn Capital Limited
("African Dawn" or "the Company" or "the Group")
Registration number: 1998/020520/06
(Incorporated in the Republic of South Africa)
JSE share code: ADW ISIN code: ZAE000060703
Registered office: 1st Floor, Quadrum 4, Quadrum Office Park, 50 Constantia
Boulevard, Constantia Kloof Ext 28, 1709
Tel: +27 (11) 475 7465 Fax: +27 (11) 475 7413
Directors: JS van der Merwe (executive chairman)(appointed 10 April 2013),
TF Kruger (previous chief executive officer, appointed financial director on
10 April 2013), HH
Hickey (independent non-executive), WJ Groenewald (non-executive), Vanya
Lessing (lead independent non-executive), Keet van Zyl (independent non-
executive)
Company secretary: W Somerville (on behalf of Corporate Statutory Service
Proprietary Limited)
Auditors: Grant Thornton
Transfer secretaries: Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001
29 November 2013
Johannesburg
Designated Advisor:
Sasfin Capital, a division of Sasfin Bank Limited
Date: 29/11/2013 02:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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