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Close Out Of Derivative Contracts
HUGE GROUP LIMITED
(Registration number 2006/023587/06)
Share code: HUG ISIN: ZAE000102042
(“Huge” or “the Group” or “the Company”)
CLOSE OUT OF DERIVATIVE CONTRACTS
The Company is the holder of various derivative contracts over its own ordinary shares. Any
movement in the price of its own ordinary share (Reference Instrument) has an impact on the value
of the derivative contract.
The Company was the holder of 80 455 single stock futures (SSF) contracts over 8 045 500
ordinary shares of Huge.
Huge Telecom (Pty) Ltd (HugeTel), a wholly owned subsidiary company of the Company, was the
holder of 3 592 SSF contracts over 359 200 ordinary shares of Huge.
HugeTel is the holder of contracts for difference (CFDs) over 3 904 579 ordinary shares of Huge.
On 18 December 2013, the Company closed out 80 455 SSF contracts at a futures price of 54.90
cents per Reference Instrument and HugeTel closed out 3 592 SSF contracts at a futures price of
54.90 cents per Reference Instrument (the Close Out).
Accordingly, the Group is no longer exposed to the movement in the price of SSF contracts over its
own ordinary shares.
The Group remains exposed to the movement in its own ordinary shares as a result of its holding
of CFDs over 3 904 579 ordinary shares.
FINANCIAL EFFECTS OF THE CLOSE OUT
The unaudited pro forma financial effects (the Financial Effects) as set out below have been
prepared to assist shareholders of Huge in assessing the cumulative impact of the Close Out on
the earnings per share and tangible net asset value per share of the Company as at, and for the
six months ended, 31 August 2013.
These Financial Effects have been prepared for illustrative purposes and because of their nature,
may not fairly present Huge?s financial position or financial performance after the Close Out.
The directors are responsible for the preparation of the Financial Effects, which have not been
reviewed by the Company?s auditors.
Unaudited Interim Results Before the Close After the % change
Out Close Out
(cents) (cents)
Basic earnings per share 4.11 3.82 (7.1)
Headline earnings per share 6.07 5.78 (4.8)
Diluted earnings per share 4.11 3.82 (7.1)
Diluted headline earnings per share 6.07 5.78 (4.8)
Net asset value per share 238.63 237.61 (0.4)
Net tangible asset/(liability) value per share (8.81) (9.83) 11.6
Number of shares in issue after deducting
treasury shares („000) 89 255 89 255 -
NOTES AND ASSUMPTIONS
- The figures set out in the “Before the Close Out” column above have been extracted from the
Company?s unaudited interim results for the 6 months ended 31 August 2013 (the Interim
Results).
- The figures set out in the “After the Close Out” column above reflect the Financial Effects of
the Close Out on the Interim Results assuming that the Close Out was implemented on 1
March 2013 for earnings and headline earnings per share purposes. In this regard:
o The after tax effect of the cost of booking fees of R8 110 incurred during 1 March
2013 to 31 August 2013 have been reversed, which has an on-going effect;
o The after tax effect of the cost of implied interest charges of R44 590 incurred
during 1 March 2013 to 31 August 2013 have been reversed, which has an on-going
effect;
o The after tax effect of the cost of mark to market variation margins of R840 470
incurred during 1 March 2013 to 31 August 2013 have been reversed, which has a
once-off effect where there is no change in the price of the Reference Instrument
and an ongoing effect where there is a change in the Reference Instrument;
o The after tax effect of the mark to market variation margins determined by taking the
difference between the price of the Reference Instruments underlying the SSF
contracts on 1 March 2013 of 60 cents and the price of the Reference Instruments
underlying the SSF contracts on the date of the Close Out of 54.9 cents has been
deducted from earnings and headline earnings for the interim period ended 31
August 2013, which has a once-off effect.
- The figures set out in the “After the Close Out” column above reflect the Financial Effects of
the Close Out on the Interim Results assuming that the Close Out was implemented on 31
August 2013 for net asset and tangible asset value per share purposes. In this regard:
o The after tax effect of the mark to market variation margins determined by taking the
difference between the price of the Reference Instruments underlying the SSF
contracts on 31 August 2013 of 70 cents and the price of the reference instruments
underlying the SSF contracts on the date of the Close Out of 54.9 cents have been
deducted from tangible assets and net tangible assets as at 31 August 2013, which
has a once-off effect.
This announcement is made for information purposes only.
Johannesburg
3 February 2014
Designated Advisor
Arcay Moela Sponsors Proprietary Limited
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