Sectors Shares

MICROMEGA HOLDINGS LIMITED - Audited Provisional Condensed Annual Financial Statements For The Fifteen Month Period Ended 31 March 2014

Release Date: 12/06/2014 14:54
Code(s): MMG
 
Wrap Text
Audited Provisional Condensed Annual Financial Statements For The Fifteen Month Period Ended 31 March 2014

MICROmega Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1998/003821/06)
JSE Share code: MMG ISIN: ZAE000034435
(“MICROmega” or “the Company” or “the Group”)

Audited Provisional Condensed Consolidated Financial Statements For The
Fifteen Month Period Ended 31 March 2014

CONDENSED GROUP STATEMENT OF PROFIT AND LOSS
                                                       Audited        Audited
                                                     15 months      12 months
                                                         Ended          Ended
                                                      31 March    31 December
                                                          2014           2012
                                                         R’000          R’000
Revenue                                                907 532        746 030
Revenue from continuing operations                     907 532        694 907
Revenue from discontinuing operations                        -         51 123
Cost of sales                                        (549 241)      (473 937)
Gross profit                                           358 291        272 093
Gross profit from continuing operations                358 291        264 497
Gross profit from discontinuing operations                   -          7 596
Other income                                           119 237          9 694
Distribution expenses                                  (5 692)        (4 481)
Admin expenses                                       (304 337)      (263 619)
Results from operations                                167 499         13 687
Results from continuing operations                     167 499          5 410
Results from discontinuing operations                        -          8 277
Finance income                                           6 450          6 754
Finance cost                                           (5 026)        (6 074)
Share of profit of equity accounted associate            1 392          2 060
Profit before tax                                      170 315         16 427
Profit before tax from continuing operations           170 315         10 694
Profit from discontinuing operations                         -          5 733
Tax expense                                           (33 051)        (7 753)
Profit for the period                                  137 264          8 674
Profit from continuing operations                      137 264          3 757
Profit from discontinuing operations                         -          4 917

Profit attributable to:
Owners of the parent                                   134 135         11 603
Non-controlling interest                                 3 129        (2 929)

Attributable earnings per share (cents)
Basic                                                   130.44          10.77
Diluted                                                 128.37          10.65

CONDENSED GROUP STATEMENT OF OTHER COMPREHENSIVE INCOME
                                                       Audited         Audited
                                                     15 months       12 months
                                                         Ended           Ended
                                                      31 March     31 December
                                                          2014            2012
                                                         R’000           R’000
Profit for the period                                  137 264           8 674
Other comprehensive income
Foreign currency translation differences                 1 175              99
Revaluation of property                                      -         (2 320)
Income tax on other comprehensive income                     -             432
Other comprehensive income for the period                1 175         (1 789)
Total comprehensive income for the period              138 439           6 885
Total comprehensive income attributable to:
Owners of the parent                                   135 310          10 758
Non-controlling interests                                3 129         (3 873)
Total comprehensive income for the period              138 439           6 885

Reconciliation of headline earnings:
Profit attributable to ordinary shareholders           134 135          11 603
Loss/(Profit) on disposal of property, plant
and equipment                                               24           (235)
Impairment of intangible assets                              -          18 684
Loss/(Profit) on disposal of investments in
subsidiaries                                               653         (6 893)
Impairment of loans receivable                           1 405           5 778
Impairment of investments in associates                      -             230
Impairment of property, plant and equipment                  -             271
Impairment of other investments                              -           1 080
Reversal of impairment of loans receivable             (3 504)               -
Bargain purchase on acquisition                       (68 023)               -
Headline earnings                                       64 690          30 518
Headline earnings per share (cents)                      62.91           28.32

Weighted average number of shares (000’s)              102 830         107 772
Diluted weighted average number of shares
(000’s)                                                104 493         108 947
Total number of shares in issue (000’s)                105 184          92 765

CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
                                                       Audited          Audited
                                                         As at            As at
                                                      31 March      31 December
                                                          2014             2012
                                                         R’000            R’000
ASSETS
Non-current assets                                     414 081          237 998
Property, plant and equipment                           47 718          143 910
Intangible assets                                      305 760           48 471
Investments in associates                               10 879               27
Other investments                                          208              163
Loans receivable                                         9 167            2 188
Deferred tax assets                                     40 349           43 239
Current assets                                         279 842          240 493
Inventories                                             13 292            2 542
Retirement benefit surplus                                   -            1 881
Trade and other receivables                            142 581          109 725
Tax receivable                                           7 455                -
Loans receivable                                         7 668           18 618
Cash and cash equivalents                              108 846          107 727
TOTAL ASSETS                                           693 923          478 491

EQUITY AND LIABILITIES
EQUITY
Share capital and share premium                        207 666          179 169
Non-distributable reserves                               5 590           14 834
Retained earnings                                      240 863           95 392
Total equity attributable to owners of the
group                                                  454 119          289 395
Non-controlling interests                               50 150           18 654
Total equity
LIABILITIES                                            504 269          308 049
Non-current liabilities                                 57 227           69 835
Borrowings                                              11 491           55 960
Deferred vendor payments                                 3 484                -
Deferred tax liabilities                                42 252           13 875
Current liabilities                                    132 427          100 607
Borrowings                                               4 351           12 901
Deferred vendor payments                                 3 849              534
Trade and other payables                               117 364           80 369
Provisions                                                   -            5 904
Income tax payable                                       6 863              899
TOTAL EQUITY AND LIABILITIES                           693 923          478 491

Net asset value per share (cents)                       431.74           311.97
Net tangible asset value per share (cents)              141.05           259.71

CONDENSED GROUP STATEMENT OF CASH FLOWS
                                                       Audited          Audited
                                                     15 months        12 months
                                                         Ended            Ended
                                                      31 March      31 December
                                                          2014             2012
                                                         R’000            R’000
Cash flows from operating activities                    74 129           55 503
Movement in working capital                            (7 249)            9 725
Cash flows from investing activities                  (46 837)           46 955
Net cash generated/(used) in financing                (18 924)         (19 133)
activities
Increase in cash and cash equivalents                    1 119           93 050
Cash and cash equivalents at the beginning of
the period                                             107 727           14 677
Cash and cash equivalents at the end of the
period                                                 108 846          107 727

CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY

                                   Share      Share    Revaluat       Foreign         Deal     Share   Retained    Total           Non-     Total
                                 capital    premium         ion      currency   difference     based   earnings             controlling    equity
                                                        reserve   translation      reserve   payment                           interest
                                                                      reserve                reserve
                                   R’000      R’000       R’000         R’000       R’000      R’000     R’000      R’000        R’000       R’000
Balance at 1 January 2012            943    186 079      11 099            29       1 000      4 525    83 014    286 689       24 303     310 992
Total comprehensive income for
the period
Profit for the period                  -           -         -             -            -          -    11 603    11 603       (29 29)       8 674
Other comprehensive income             -           -   (1 129)            99            -          -       185     (845)         (944)    ( 1 789)
Foreign currency translation
differences                            -           -          -           99            -          -         -        99             -          99
Revaluation of property                -           -      (944)            -            -          -         -     (944)         (944)     (1 888)
Realisation of revaluation
reserve through depreciation           -           -      (185)            -            -          -       185         -              -         -
Total comprehensive income for
the period                             -           -    (1 129)           99            -          -    11 788    10 758       (3 873)      6 885
Transactions with owners
recorded directly in equity         (15)     (7 838)          -            -            -      (789)       361    (8 281)      (1 406)     (9 687)
Treasury shares purchased
                                    (15)     (8 451)          -            -            -          -         -    (8 466)             -    (8 466)
Share based payment
transactions                           -         613          -            -            -      (789)       361       185              -       185
Dividends paid to non-
controlling interest                   -           -          -            -            -          -         -         -       (1 406)     (1 406)
Changes in ownership interest
in subsidiaries                        -           -          -            -            -          -       229       229         (370)      (141)
Acquisitions on non-
controlling interest without a
change in control                      -           -          -            -            -          -       229       229         (370)      (141)
Total transactions with owners
                                    (15)    (7 838)           -            -            -      (789)       590    (8 052)      (1 776)     (9 828)
Balance at 31 December 2012          928    178 241       9 970          128        1 000      3 736    95 392    289 395       18 654     308 049
Balance at 1 January 2013            928    178 241       9 970          128        1 000      3 736    95 392    289 395       18 654     308 049
Total comprehensive income for
the period
Profit for the period                  -           -          -            -            -          -   134 135    134 135        3 129     137 264
Other comprehensive income             -           -       (75)        1 175            -          -        75      1 175            0       1 175
Foreign currency translation
differences                            -           -          -        1 175            -          -         -     1 175              -     1 175
Realisation of revaluation
reserve through depreciation           -           -       (75)            -            -          -        75         -              -         -
Total comprehensive income for
the period                             -           -       (75)        1 175            -          -   134 210    135 310        3 129     138 439
Transactions with owners
recorded directly in equity          124     28 373    (9 406)             -            -      (938)    11 541    29 694        28 970     58 664
Capitalisation issue                 124      (124)           -            -            -          -         -         -             -          -
Treasury shares purchased                                                                                            (12
                                    (45)   (12 098)           -            -            -          -         -      143)             -    (12 143)
Share based payment
transactions                           3      2 503           -            -            -      (938)     2 135     3 703             -      3 703
Dividends paid to non-
controlling interest                   -          -           -            -            -          -         -         -      (10 566)    (10 566)
Acquisition of subsidiaries           42     38 092           -            -            -          -         -    38 134        52 433      90 567
Derecognition of subsidiary           -           -     (9 406)            -            -          -     9 406         -      (12 897)    (12 897)
Changes in ownership interest
in subsidiaries
Acquisitions on non-
controlling interest without a
change in control                     -           -           -            -            -          -      (280)     (280)        (603)       (883)
Total transactions with owners      124      28 373     (9 406)            -            -      (938)     11 261    29 414       28 367      57 781
Balance at 31 March 2014          1 052     206 614         489        1 303        1 000      2 798    240 863   454 119       50 150     504 269
NOTES TO THE GROUP FINANCIAL INFORMATION

1. Basis of preparation
These audited provisional condensed consolidated financial statements for
the fifteen months ended 31 March 2014 are prepared in accordance with the
framework concepts and the recognition and measurement criteria of
International Financial Reporting Standards (IFRS), its interpretations
adopted by the International Accounting Standards Board (IASB), the
presentation and the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Reporting Pronouncements as
issued by Financial Reporting Standards Council, IAS 34 – Interim Financial
Reporting, the Listings Requirements of the JSE Limited and the requirements
of the Companies Act of South Africa (Act 71 of 2008), as amended. The
audited provisional condensed consolidated financial results are prepared in
accordance with the going concern principle under the historical cost basis
as modified by the fair value accounting of certain assets and liabilities
where required or permitted by IFRS. The financial statements have been
prepared under the supervision of Russell Dick, CA(SA), the Financial
Director.

The audited provisional condensed consolidated financial statements are
extracted from audited information and is available for inspection at the
Company’s registered office.

The directors take full responsibility for the preparation of the
provisional report and the financial information has been correctly
extracted from the underlying audited consolidated financial information.

All financial information presented in South African Rand has been rounded
to the nearest thousand.

2. Significant accounting policies
These audited provisional condensed consolidated financial statements have
been prepared using accounting policies that comply with International
Financial Reporting Standards (“IFRS”).  The accounting policies used are
consistent with those used in the audited annual financial statements for
the year ended 31 December 2012.

3. Audit opinion
The provisional consolidated financial statements were audited by the
Company’s auditors, Nexia SAB&T, and their unqualified audit report is
available for inspection at the company’s registered office.


4. Segment information

                                                    Audited       Audited
                                                  15 months     12 months
                                                      Ended         Ended
                                                  31 March    31 December
                                                      2014           2012
SEGMENT REVENUE
NOSA                                               330 426        228 689
MECS                                               340 431        296 056
Deltec Power Distributors                                -         47 732
IT Group                                           205 215        106 690
Securities Group                                    33 162         38 453
Holdings and consolidated
 - Internal                                       (15 610)        (2 405)
 - External                                         13 907         30 815
Total revenue                                      907 531        746 030

SEGMENT PROFIT / (LOSS)
NOSA                                                59 303         28 486
MECS                                                11 988            188
Deltec Power Distributors                                -          9 251
IT Group                                            24 701          5 760
Securities Group                                     1 750          9 225
Holdings and consolidated                           36 393       (41 307)
Total profit                                       134 135         11 603

SEGMENT ASSETS
NOSA                                               358 769         95 561
MECS                                                67 605         39 240
Deltec Power Distributors                                -         39 837
IT Group                                           183 433         65 517
Securities Group                                    61 426         56 636
Holdings and consolidated                           22 690        181 700
Total assets                                       693 923        478 491

5. Business combinations

Amanzi Meters (Pty) Ltd
On 1 September 2013, the Group acquired a 51% interest in Amanzi Meters
(Pty) Ltd. Goodwill to the value of R0.7 million was accounted for. The
amount of net liabilities acquired amounted to R1.4 million and non-
controlling interest of R0.7 million was recognised.

NOSA Global Holdings Ltd
On 1 October 2013, the Group acquired 100% interest in NOSA Global Holdings
Ltd for a consideration of R35 million which constitutes a small related
party transaction and has been concluded in line with the JSE Listings
Requirements. NOSA Global Holdings has a 70% shareholding NOSA Shenzhen, an
operating company in the People’s Republic of China. The fair value of NOSA
Global Holdings has been valued at R181.3 million. This resulted in
a bargain purchase of R68.0 million in profit and loss.
Freshmark Systems (Pty) Ltd
On 1 December 2013, the Group acquired a 55% interest in Freshmark Systems
(Pty) Ltd for a consideration of R10.4 million. The fair value of net assets
acquired   amounted  to   R3.5  million,  which   resulted  in   goodwill of
R8.5 million and a non-controlling interest of R1.6 million being
recognised.

USC Metering (Pty) Ltd
On 1 January 2013, the Group acquired a 83.3% interest in    USC Metering (Pty)
Ltd for a consideration of R58.5 million. The fair value     of the net assets
acquired amounted to    R44.0 million,   which   resulted     in  goodwill   of
R21.7 million and non-controlling interest of R7.3 million   being recognised.


The fair value of assets acquired and liabilities assumed relating to the
above business combinations is subject to change should additional
information become available within the 12 month re-measurement period from
date of acquisition.

6. Disposal of interest in Kyostax (Pty) Ltd
On 18 July 2013 the group disposed of 20% of the interest in Kyostax (Pty)
Ltd for a consideration of R4.1 million, which resulted in a loss of control
and Kyostax (Pty) Ltd now being accounted for as an associate. This event
resulted in a loss of R0.6 million recorded in profit and loss and the re-
cycling of R9.4 million relating to the revaluation reserve accumulated in
equity.

7. Corporate Governance
MICROmega has embraced the recommendations of the King Report on Governance
and strives to provide reports to shareholders that are timely, accurate,
consistent and informative.

8. Capitalisation Issue
A capitalisation issue on 1 November 2013 was done in the ratio of 14 shares
per 100 shares held. In terms of the appropriate accounting treatment it was
necessary to retrospectively adjust the weighted average number of shares in
issue.

9. Changes to the board of directors of MICROmega (“the Board”)
The following appointments were made to the Board during the period under
review:
- Grant Earl Jacobs (Independent non-executive)
- Deborah Alicia Di Siena (Independent non-executive)
- Tracey Wardle King (Non-executive)

10. Subsequent events
No other significant events have occurred      in   the   period   between   the
reporting date and the date of this report.
11. Commentary on results
On any comparative basis the results, by all measures, are excellent.
However, investors should exercise caution when assessing the Group’s
performance based on the comparative figures. We have completed the
previously announced change in year-end and, in addition, the prior period
results were impeded by the long-standing dispute between our main
shareholder and the South African authorities. Attributable earnings have
been substantially boosted by one-off benefits from the acquisition of
related international businesses that arose as a result of this settlement.
Furthermore, HEPS for the period being reported upon benefited from 6 months
of unfettered trading and corporate activity following the successful
conclusion of this settlement.

What is of importance is that the Board has good visibility into the
anticipated Group performance for the coming year and is pleased with the
business climate that the Group companies are presently enjoying. All Group
companies are strategically positioned to take advantage of changes and
developments within our customer base- both locally and internationally.
Strong growth will continue.

The Group’s financial health has allowed the Board to declare a gross
dividend of 20 cents per share while still retaining a level of funding that
comfortably meets the growth requirements for the present financial year.

A major focus of the Board going forward will be on diversifying and
expanding the shareholder base and, in the process, increasing the liquidity
of the share. It plans to achieve this by issuing additional shares as part
of our ongoing acquisition strategy.

12. Cash dividend
Notice is hereby given that the directors have declared a final gross cash
dividend of 20 cents for the financial year ended 31 March 2014, which is
based on the dividend policy and adjusted for withholding tax. The final
dividend has not been included as a liability in these provisional condensed
consolidated financial statements as it was declared subsequent to year end.
The final dividend for March 2014 is payable to all shareholders on the
Register of Members on Friday, 4 July 2014. In terms of the dividends tax,
effective 1 April 2012, the following additional information is disclosed:

-   the local dividend tax rate is 15%;
-   the dividends will be payable from income reserves;
-   no STC credits have been utilised. Accordingly, the dividend to utilise
    in determining the dividends tax is 20 cents per share;
-   the dividend tax to be withheld by the Company amounts to 3 cents per
    share;
-   therefore the net dividend payable to shareholders who are not exempt
    from dividends tax amounts to 17 cents per share, while the gross
    dividend payable to shareholders who are exempt from dividends tax
    amounts to 20 cents per share;
-   the issued share capital of the Company at the declaration date
   comprises 114 915 089 ordinary shares; and
   the Group’s income tax reference number is 9457/323/84/9

Declaration date:                       Thursday, 12   June   2014
Last day to trade:                        Friday, 27   June   2014
Shares trade ex-dividend:                 Monday, 30   June   2014
Record date:                               Friday, 4   July   2014
Payment date:                              Monday, 7   July   2014

Share certificates may not be dematerialised or rematerialised between
Monday, 30 June 2014 and Friday, 4 July 2014, both days inclusive.


By order of the Board

12 June 2014

Directors: DC King (Executive Chairman); IG Morris (Chief Executive
Officer); RB Dick (Financial Director); DSE Carlisle (Executive Director);
AW Swann (Lead Independent Non-Executive Director); RC Lewin (Independent
Non-Executive Director); PH Duvenhage (Independent Non-Executive Director);
GE Jacobs (Independent Non-Executive Director); DA Di Siena (Independent
Non-executive Director); TW King (Non-Executive Director)
Company Secretary: Acorim Proprietary Limited
Auditors: Nexia SAB&T
Transfer Secretaries: Computershare Investor Services Proprietary Limited
Sponsor: Merchantec Capital
Attorneys: Di Siena Inc

Date: 12/06/2014 02:54:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Email this JSE Sens Item to a Friend.

Share This Story