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Unaudited interim results for the period ended 28 February 2014
Sekunjalo Investments Limited
(Incorporated in the Republic of South Africa)
Registration number 1996/006093/06
Share code: SKJ and ISIN: ZAE000017893
("Sekunjalo" or "the Group" or "the Company")
Unaudited interim results for the period ended 28 February 2014
Condensed Group Statement of Comprehensive Income
Unaudited Unaudited Audited
Group to Group to Group to
28 February 28 February 31 August
2014 2013 2013
6 months 6 months 12 months
R'000 R'000 R'000
Revenue 242 047 225 339 569 198
Cost of sales (164 475) (149 271) (390 711)
Gross profit 77 572 76 068 178 487
Other income 3 661 3 834 3 949
Other operating expenses (64 809) (63 103) (181 513)
Fair value adjustments 22 498 16 074 66 193
Investment revenue 7 808 4 768 19 935
Loss from equity accounted investments (4 005) (4 350) (8 039)
Finance cost (9 985) (9 048) (20 347)
Profit before taxation 32 740 24 243 58 665
Taxation (13 220) (8 094) (28 313)
Profit for the period 19 520 16 149 30 352
Total comprehensive income 19 520 16 149 30 352
Total comprehensive income
attributable to:
Equity holders of the parent 18 217 16 134 29 734
Non-controlling interest 1 303 15 618
19 520 16 149 30 352
Basic and diluted earnings per ordinary
share (cents) 3.72 3.30 6.08
Weighted (and fully diluted) average number
of ordinary shares in issue (000s) 489 339 489 339 489 339
Condensed Group Statement of Financial Position
Unaudited Unaudited Audited
Group to Group to Group to
28 February 28 February 31 August
2014 2013 2013
R'000 R'000 R'000
Assets
Non-current assets 750 219 723 636 726 285
Property, plant and equipment 129 239 139 792 126 890
Goodwill 37 325 34 191 37 325
Intangible assets 11 868 14 573 12 783
Investments in associates 108 377 116 606 112 382
Other loan receivables 46 597 61 969 38 763
Other financial assets 403 143 330 525 380 644
Deferred tax 13 742 23 556 17 498
Operating lease asset - 2 424 -
Current assets 207 297 174 275 174 818
Inventory 30 024 25 234 17 765
Biological assets 42 101 38 787 41 798
Other financial assets 1 575 939 2 275
Current tax receivable 174 157 174
Trade and other receivables 96 909 73 477 70 497
Cash and cash equivalents 36 514 35 681 42 309
Assets of disposal groups classified as
held for sale 1 990 - 2 127
Total assets 956 578 897 911 903 230
Equity and liabilities
Equity
Equity attributable to equity holders of parent
Share capital and share premium 403 177 403 177 403 177
Reserves 121 194 121 194 121 194
Accumulated losses (33 920) (65 415) (52 137)
490 451 458 956 472 234
Non-controlling interest 6 065 8 230 4 762
496 516 467 186 476 996
Liabilities
Non-current liabilities 299 649 272 113 282 594
Other financial liabilities 159 116 147 490 149 239
Operating lease liability 1 120 454 598
Deferred tax 138 947 123 830 132 721
Other non-current liabilities 466 339 36
Current liabilities 163 413 158 612 143 640
Trade and other payables 93 645 73 867 77 848
Other financial liabilities 11 316 24 323 38 864
Current tax payable 4 395 5 849 4 009
Provisions 18 054 16 670 21 369
Other current liabilities 109 - 336
Bank overdraft 35 894 37 903 1 214
Total equity and liabilities 956 578 897 911 903 230
Net asset value per share (cents) 100.23 93.79 96.50
Tangible net asset value per share (cents) 90.17 83.83 86.26
Condensed Group Statement of Cash Flows
Unaudited Unaudited Audited
Group to Group to Group to
28 February 28 February 31 August
2014 2013 2013
R'000 R'000 R'000
Cash flows from operating activities (5 697) 2 432 42 959
Cash flows from investing activities (7 385) (13 369) (13 487)
Cash flows from financing activities (27 394) (30 971) (28 063
Total cash movement for the period (40 476) (41 908) 1 409
Cash and cash equivalent at the
beginning of the period 41 095 39 686 39 686
Cash and cash equivalents at the end of
the period 619 (2 222) 41 095
Condensed Group Statement of Changes in Equity
For the period ended 28 February 2014
Attributable Non-
to controlling Total
Parent interest equity
R'000 R'000 R'000
Balance at 1 September 2012 442 823 9 041 451 864
Profit for the period 29 734 618 30 352
Dividends paid - (2 218) (2 218)
Change in ownership control not lost (323) (2 580) (2 903)
Business combinations - (99) (99)
Balance at 31 August 2013 472 234 4 762 476 996
Profit for the period 18 217 1 303 17 168
Balance at 28 February 2014 490 451 6 065 494 164
Condensed Group Segmental Report
Information
Technology Fishing Healthcare
Unaudited Unaudited Unaudited
Group to Group to Group to
28 February 28 February 28 February
2014 2014 2014
R'000 R'000 R'000
Revenue 88 492 119 020 11 547
External sales 88 492 119 020 11 547
Segment results
Operating profit/(loss) 14 713 15 064 (2 072)
Carrying amount of assets 77 170 249 082 37 739
Carrying amount of liabilities 39 919 129 341 9 138
Biotechnology Corporate Group
Unaudited Unaudited Unaudited
Group to Group to Group to
28 February 28 February 28 February
2014 2014 2014
R'000 R'000 R'000
Revenue - 22 988 242 047
External sales - 22 988 242 047
Segment results
Operating profit - 11 217 38 922
Included in segment results:
Fair valuation of investments - 22 498 22 498
Carrying amount of assets 154 180 441 407 956 686
Carrying amount of liabilities 24 909 259 755 462 522
Loss from associate (4 005) - (4 005)
Information
Technology Fishing Healthcare
Unaudited Unaudited Unaudited
Group to Group to Group to
28 February 28 February 28 February
2013 2013 2013
R'000 R'000 R'000
Revenue 103 686 89 404 8 984
External sales 103 686 89 404 8 984
Segment results
Operating profit/(loss) 26 625 3 430 (3 868)
Carrying amount of assets 68 283 250 705 31 622
Carrying amount of liabilities 33 541 124 498 11 888
Biotechnology Corporate Group
Unaudited Unaudited Unaudited
Group to Group to Group to
28 February 28 February 28 February
2013 2013 2013
R'000 R'000 R'000
Revenue - 23 265 225 339
External sales - 23 265 225 339
Segment results
Operating profit/(loss) (4) 6 690 32 873
Included in segment results:
Fair valuation of investments - 16 074 16 074
Carrying amount of assets 177 435 369 866 897 911
Carrying amount of liabilities 24 909 235 889 430 725
Loss from associate (4 350) - (4 350)
Notes
The Media division is managed under the corporate office for the first six months as the bulk of the
revenue is generated in the second half of the year.
Determination of headline earnings
Unaudited Unaudited Audited
Group to Group to Group to
28 February 28 February 31 August
2014 2013 2013
R'000 R'000 R'000
Earnings attributable to ordinary
equity holders of parent entity IAS 33 18 217 16 134 29 734
Adjusted for:
Loss on disposal of property,
plant and equipment IAS 36 9 85 95
Headline earnings 18 226 16 219 29 829
Headline earnings per ordinary
share (cents) 3.72 3.31 6.10
Basis of preparation
The condensed consolidated financial statements are prepared in accordance with the JSE Limited ("JSE") Listings
Requirements and the requirements of the Companies Act of South Africa, 2008 as amended, applicable to summarised
financial statements. The JSE Listings Requirements require financial reports to be prepared in accordance with
the framework concepts, the measurement and recognition requirements of International Financial Reporting Standards
("IFRS"), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and also that they,
as a minimum, contain the information required by IAS 34 `Interim Financial Reporting'. The accounting policies
applied in the preparation of the summarised consolidated financial statements from which the summary consolidated
financial statements were derived are in terms of IFRS and are consistent with the accounting policies applied in
the preparation of the previous consolidated annual financial statements.
The unaudited interim financial results were prepared by Natasha September BCom (Hons), CA(SA).
Commentary
Sekunjalo Group posts excellent financial performance due to the underlying divisions achieving better than
expected results in the first half of the 2014 financial year. Sekunjalo Investments Limited is a JSE-listed subsidiary
of Sekunjalo Investment Holdings (Pty) Ltd and part of the Sekunjalo Investments Group.
Net asset value (“NAV”) of the Group increased to R496m (2013: R467m) as a result of an excellent operational
performance and the improved value in the investments.
Key financial highlights
Group revenue increased by 7% compared to the prior interim period from R225m to R242m mainly due to the improved
revenues achieved from the fishing division.
Profit before taxation for the period increased by 35% to R32,7m (2013: R24,2m) with increased performance from the
underlying investments.
The headline earnings per share increased from 3.31c in 2013 to 3.72c and earnings per share also increased by 0.42c
from 3.30c in 2013 to 3.72c for the current interim period.
Cash from operations for the interim period was utilised for additional working capital requirements of R9m for the
underlying divisions which impacted the current reporting period.
The Group’s asset base increased by R61m to R959m (2013:R898m) for the period under review. The major reasons for the
increase are the additional working capital in current assets and the increase in the value of the strategic
investments during the interim period.
NAV per share increased from 93.79c in the prior period to 100.23c, while tangible NAV per share increased from 83.83c
to 90,17c for the current period.
Financial liabilities decreased to R170m from R188m in 2013 mainly due to the reduction in preference liabilities on the
strategic investments.
Strategic investments
The investment in the listed Pioneer Food Group consistently shows increased value since its acquisition in March 2012.
The British Telecommunication Services SA investment also delivered another dividend.
Fishing
Interim results show a strong revenue contribution of R119m (2013:R89m) for Premier Fishing SA group and its divisions.
The fishing division achieved an operating profit for the period of R15m with the major contributors being the south
coast rock lobster and abalone division due to better pricing and greater volumes.
Aquaculture
The abalone division produced excellent results in the first half of the year.
Information communication technology
The information communication technology ("ICT") division focuses on the acquisition and development of niche-market
information and communication technology companies.
The ICT division performed satisfactorily, with subsidiaries performing well against budgets. The division achieved an
operating profit of R14,7m (2013:R26,6m) with the expected completion of the implementation of the hospital information
systems (“HIS”).
Health System Technologies (Pty) Ltd (“HST”), a HIS, laboratory information system and pharmacy information
system integrator and provider, has continued to meet its contractual obligations to roll out the centralized HIS and
Pharmacy solution to the Provincial Government of the Western Cape hospitals and the National Health Laboratory Services.
Saratoga Software (Pty) Ltd, a software development company which builds custom software solutions for corporate
customers, has grown consistently over the past few years and is performing ahead of expectations.
Healthcare
The healthcare division’s revenue improved by 29% from R8,9m to R11,5m in comparison to the prior interim period. The
natural chemical product range in Healthcare is starting to show traction.
Biotechnology
Genius Biotherapeutics (formerly Bioclones), South Africa’s largest medical biotechnology company has continued with its
development of the dendretic cells vaccine project and the preclinical work is showing good results.
Ribotech (Pty) Ltd, a subsidiary of Bioclones, has a production facility for the manufacturing of
Granulocyte-Colony Stimulating Factor, a product used in the oncology market. The Ribotech research and
development activities are starting to show tangible results.
Media
espAfrika (Pty) Ltd, a Group subsidiary, has hosted the Cape Town International Jazz Festival for the 15th year which
was a great success. The company’s performance for the six months is an expected operating loss as espAfrika has most
of its events during the second half of the financial year.
Prospects
The Group will continue its focus to grow the ICT and fishing divisions organically as well as by acquisition as the
operations continue to produce satisfactory results.
The ICT division has built a strong platform for further organic growth and has positioned itself well to increase
its investments by acquisition.
AmetHst (Pty) Ltd – Parallel arbitration negotiations to resurrect the Gauteng Department of Health and Social
Development Hospital Information System and Electronic Health Record contracts are on-going.
As an investment holding company, we expect a challenging year and believe that our businesses will grow steadily
from the successes of the past.
The Group’s auditors have not reviewed nor reported on any comments relating to future prospects.
Dividends
No dividends have been declared for the current period. The board continues to work towards the payment of dividends
in the foreseeable future.
Changes to the board of directors
Mr Takudzwa Hove was appointed as a non-executive director on 4 September 2014.
Appreciation
We wish to acknowledge the support of our staff, Group executives, management, our board of directors as well as
our stakeholders and business partners for their loyalty and dedication to the Group in producing these satisfactory
results.
Dr MI Survé Mr Khalid Abdulla
Executive chairman Chief executive officer
Cape Town
22 April 2014
Directors
Dr M Iqbal Survé* (Executive chairman); Khalid Abdulla* (Chief executive officer); Rev. Dr Vukile Mehana;
Johannes Mihe Gaomab; Salim Young; Aziza Amod; Takudzwa Hove; Cherie Felicity Hendricks*; Chantelle Ah Sing*
*Executive directors
Company secretary: Cherie Felicity Hendricks
Registered address: Quay 7, East Pier, Victoria and Alfred Waterfront, Cape Town 8001
Email: cherieh@sekunjalo.com
Transfer secretaries: Link Market Services South Africa (Pty) Ltd, 19 Ameshoff Street,13th Floor, Rennie House,
Braamfontein, Johannesburg 2000
Auditors: Grant Thornton Cape
Sponsor: PSG Capital
Date: 22/04/2014 12:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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