Wrap Text
Audited results for the year ended 31 May 2014
Blue Label Telecoms Limited
(Incorporated in the Republic of South Africa)
(Registration number 2006/022679/06)
JSE Share code: BLU
ISIN:ZAE000109088
(“Blue Label” or “BLT” or “the Company” or “the Group”)
Audited results for the year ended 31 May 2014
- Increase in gross profit of R78 million to R1,35 billion
- Increase in gross profit margins from 6,70% to 6,96%
- Increase in EBITDA of 10% to R788 million
- Increase in headline earnings of 6% to R451 million
- Increase in headline earnings per share of 6% to 67,98 cents
- Increase in dividend per share of 8% to 27 cents
- Cash flows from operating activities R907 million
COMMENTARY
EBITDA increased by 10% to R788 million, emanating from revenue growth of 2% to R19,4 billion, an increase in gross
profit margins of 0,26% and limiting additional overheads to 3%. Headline earnings per share increased to 67,98 cents.
Revenue generated on “pinless top ups” increased from R997 million to R1,7 billion. As only the commission thereon is
accounted for, the effective growth in Group revenue equated to 6%.
The gross profit margin increase was mainly attributable to the application of cash resources to bulk inventory
purchases at favourable rebates and early supply settlement discounts. Further growth was attributable to increases in
commissions earned on the distribution of prepaid electricity, with turnover generated on behalf of the utilities, escalating
to R8,8 billion.
The share of net losses of R57 million from associates and joint ventures was mainly attributable to Blue Label Mexico
(“BLM”), negatively impacting headline earnings by 9 cents per share. Expenditure incurred by Blue Label Mexico on the
roll out of point of sale devices on a national scale is in line with its strategy to enhance its product and service
offerings, the benefits of which are expected to materialise in the future.
In April 2014, the Group acquired Retail Mobile Credit Specialists Proprietary Limited, (“RMCS”), an enhanced service
provider of telecommunication products and services, content, data and allied activities, via physical and virtual
mediums. This acquisition will afford the Group access to new channels for the distribution of both RMCS and Blue Label
products and services.
Cash resources accumulated to R1,2 billion of which R907 million was generated from operating activities.
BASIS OF PREPARATION
The summarised Group annual financial statements have been derived from the Group annual financial statements and were
prepared in accordance with the requirements of Section 8.57 of the JSE Limited Listings Requirements, the presentation
and disclosure requirements of IAS 34 - Interim Financial Reporting and the SAICA Financial Reporting Guides as issued
by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting
Standards Council. The Group annual financial statements have been prepared in accordance with International Financial
Reporting Standards (“IFRS”) and the requirements of the Companies Act, No. 71 of 2008. A copy of the Group annual financial
statements can be obtained from the Company’s registered office at no charge.
This financial information has been prepared in accordance with the going concern principle, under the historical cost
convention, except for certain financial and equity investments which have been measured at fair value. The accounting
policies and methods of computation are consistent with those used in the comparative financial information for the year
ended 31 May 2013, with the exception of the standards that are effective for the first time in the current year. These
have been disclosed in note 1 to the Group annual financial statements for the year ended 31 May 2014. These standards
have not had a significant impact on the financial information.
In addition, the Group uses core net profit as a non-IFRS measure in evaluating its performance. This supplements the
IFRS measures disclosed. Core net profit is calculated by adjusting net profit for the year with the amortisation of
intangible assets that arise as a consequence of the purchase price allocations completed in terms of IFRS 3(R): Business
Combinations.
The summarised Group annual financial statements should be read in conjunction with the Group annual financial
statements which include details of all related party transactions.
SEGMENTAL REPORT
South African distribution
2014 2013 Growth Growth
R’000 R’000 R’000 %
Revenue 19 103 652 18 712 080 391 572 2%
Gross profit 1 180 376 1 121 747 58 629 5%
EBITDA 821 310 796 439 24 871 3%
Core net profit 558 996 570 766 (11 770) (2%)
Gross profit margin 6,18% 5,99%
EBITDA margin 4,30% 4,26%
Although the South African distribution segment continues to dominate contribution to Group profitability, growth in
EBITDA was confined to 3% due to costs incurred for future growth in its distribution channel as well as margin
compression caused by competitive forces.
The increase in revenue of 2%, effectively equating to 6% on imputing the gross revenue generated from “pinless top
ups”, and gross profit margin increases, resulted in the growth in EBITDA by 3% to R821 million. These earnings were
inclusive of extraneous costs of R19 million that were incurred in the settlement of a contractual dispute and the early
termination of a profit share agreement. EBITDA margins increased from 4,26% to 4,30%.
Net commissions earned on the distribution of prepaid electricity increased by R20 million to R133 million (17%) on
revenue generated on behalf of the utilities that increased from R7,2 billion to R8,8 billion.
Core net profit declined by 2% primarily due to a reduction in net finance income of R15 million net of taxation. This
was congruent with the application of cash resources to bulk purchasing transactions, early settlement discounts and
the cost of funding acquisitions.
International distribution
2014 2013 Growth Growth
R’000 R’000 R’000 %
EBITDA (13 961) (31 000) 17 039 55%
Share of (losses)/profits from associates and (56 249) (49 036) (7 213) (15%)
joint ventures
- Ukash 14 089 7 291 6 798 93%
- Oxigen Services India (3 259) (565) (2 694) (477%)
- Blue Label Mexico (60 844) (51 124) (9 720) (19%)
- Other (6 235) (4 638) (1 597) (34%)
Core net loss (59 987) (73 294) 13 307 18%
- Equity holders of the parent (47 862) (50 685) 2 823 6%
- Non-controlling interests (12 125) (22 609) 10 484 46%
The positive movement in EBITDA was attributable to a decline in legal fees incurred by Africa Prepaid Services
Nigeria from R31 million to R20 million and foreign exchange movements of R6 million.
The share of net losses from associates and joint ventures comprised the following:
Ukash
The Group’s share of profits in Ukash, after the amortisation of intangible assets, increased from R7,3 million to
R14,1 million. Of this growth, R2,1 million was attributable to foreign exchange gains and a consolidation adjustment of
R3,2 million. Organic growth resulted from increases in revenue of 14%, gross profit of 20% and EBITDA of 7%, all reported
in their local currency.
Oxigen Services India
Although revenue increased by 27% at static margins, the Group’s share of losses increased by R2,7 million to R3,2 million.
Expenditure increased in line with the strategy to focus on the growth of financial services transactions, facilitated
by its vast network of points of presence. Implementation of this strategy requires working capital, improvements in IT
infrastructure along with additional personnel and other resources.
Oxigen Services India aims to become India’s first non-banked mobile wallet that empowers the unbanked masses to
instantly transfer and receive cash across the entire country.
Its money transfer services are currently transacting at USD2,3 million per day, increasing exponentially through its
connectivity with the National Payment Corporation of India. This provides instantaneous services to its retail network
in India.
Blue Label Mexico
In the comparative year, BLM incurred losses to the equivalent of R113 million of which the Group’s share equated to
R51 million after the amortisation of intangible assets. In the current year, BLM’s losses increased to an equivalent of
R131 million, of which the Group’s share equated to R61 million. Of this amount, R9 million was attributable to foreign
exchange movements.
Although revenue in local currency increased by 43%, increases in expenditure and depreciation, necessitated by an
aggressive roll out of point of sale devices and ancillary support required thereon, were the fundamental causes for the
increase in losses.
At the end of the financial year, 91 409 point of sale devices had been installed.
Mobile
2014 2013 Growth Growth
R’000 R’000 R’000 %
Revenue 152 618 151 420 1 198 1%
Gross profit 109 756 95 134 14 622 15%
EBITDA 34 273 37 055 (2 782) (8%)
Core net profit 24 904 24 787 117 -
This segment comprises Cellfind, Panacea Mobile, Blue Label Engage, Simigenix and Blue Label One. Of the revenue
growth of R1,2 million, Panacea, Blue Label Engage and Cellfind contributed R18 million. This was off-set by a decline of R13
million in revenue generated by the projects and media divisions of Blue Label One. A further R4 million was
attributable to the disposal of Content Connect Africa during the comparative year.
The negative performance of Blue Label One manifested itself in neutral growth in core net profit for this segment.
Positive growth contributions of R7 million to core net profit by the other companies within this segment were entirely
offset by movement in losses incurred by Blue Label One. As a result, the latter has been restructured in order to avoid
repetition of its negative performance.
Solutions
2014 2013 Growth Growth
R’000 R’000 R’000 %
Revenue 145 396 120 710 24 686 20%
Gross profit 59 402 54 364 5 038 9%
EBITDA 29 257 24 703 4 554 18%
Core net profit 12 547 13 190 (643) (5%)
The Solutions segment houses Blue Label Data Solutions (“BLDS”), Velociti, Forensic Intelligence Data Solutions,
Datacision, Blue Label Call Centre and CNS Call Centre. BLDS contributed R26 million to EBITDA translating to R13 million at
core net profit level.
Corporate
2014 2013 Growth Growth
R’000 R’000 R’000 %
EBITDA (82 886) (113 575) 30 689 27%
Core net loss (87 983) (120 542) 32 559 27%
The decline in losses was directly attributable to the forfeiture of executive bonuses.
Depreciation, amortisation and impairment charges
Depreciation, amortisation and impairment charges declined by R2,8 million.
The amortisation of intangible assets in terms of purchase price allocations declined by R2,5 million in line with the
expiration of useful tenure. Depreciation and impairment charges to the remainder of the Group’s assets decreased by
R0,3 million.
Net finance income
Finance costs
Finance costs totalled R167 million, of which R23 million related to interest paid on borrowed funds and R144 million
to imputed IFRS interest adjustments on credit received from suppliers. On a comparative basis, interest paid on
borrowed funds amounted to R24 million and the imputed IFRS interest adjustment equated to R143 million. Interest paid was
attributable to the cost of financing bulk inventory purchase transactions and early settlement payments attracting
discounts, for which facilities were utilised and repaid during the current year.
Finance income
Finance income totalled R156 million, of which R39 million was attributable to interest received on cash resources and
R117 million to IFRS interest adjustments on credit provided to customers. On a comparative basis, interest received on
cash resources amounted to R45 million and the imputed IFRS interest adjustment to R128 million. The decline in
interest received was attributable to the partial utilisation of funds on hand for bulk inventory purchase transactions, early
settlement discounts as well as for the funding of the acquisitions of RMCS and a distribution channel.
Statement of financial position
Total assets increased by R782 million to R6,5 billion, of which growth in non-current assets accounted for R458 million
and current assets for R324 million.
The increase in non-current assets was mainly attributable to a net growth in intangible assets and goodwill of R300 million,
capital expenditure net of depreciation of R9 million and to investment in associates and joint ventures of R74 million.
The increase in intangible assets and goodwill was mainly attributable to the acquisition of RMCS, of which goodwill
equated to R206 million and intangibles R104 million. A further R84 million was incurred for the purchase of a
distribution channel. Amortisation of intangibles amounted to R95 million.
The increase in investment in associates and joint ventures was predominantly due to an additional R89 million capital
contribution to Blue Label Mexico, movement in loans of R11 million, unrealised foreign exchange gains of R16 million
and a positive impact of R26 million in foreign currency translation reserves, off-set by a dividend received from Ukash
of R11 million and share of net losses incurred of R57 million.
The net movement in current assets mainly comprised growth in cash resources of R243 million, an increase in accounts
receivable of R643 million, off-set by a decline in inventories of R552 million.
The debtors collection period extended from 38 days reported at the interim reporting date to 40 days.
In line with the decline in inventory, the stock turn improved from 33 days reported at the interim reporting date to
26 days.
The net profit attributable to equity holders of R450 million, less a dividend of R169 million, resulted in an
accumulation of retained earnings to R2,2 billion.
Trade and other payables increased by R476 million with credit terms averaging 55 days.
Statement of cash flows
Cash flows from operating activities totalling R907 million, the dividend received of R11 million from Ukash and loans
recovered of R29 million were applied to investing activities relating to the purchase of intangible assets to the
extent of R103 million, acquisitions of R273 million, additional funding of R86 million to Blue Label Mexico and capital
expenditure of R46 million.
A further R197 million was applied to financing activities, of which R11 million was expended on the acquisition of
treasury shares, dividends paid of R169 million and the acquisition of non-controlling interests totalling R16 million.
The net increase in cash and cash equivalents amounted to R243 million, resulting in cash resources accumulating to
R1,2 billion.
Forfeitable share scheme
Forfeitable shares totalling 2 782 541 (2013: 3 496 103) were issued to qualifying employees. During the year
1 074 880 (2013: 1 285 962) shares were forfeited and 3 629 922 (2013: 2 700 513) shares vested.
Dividend No 5
The Group’s current dividend policy is to declare an annual dividend. On 19 August 2014, the board approved a gross
ordinary dividend (number 5) of 27 cents per ordinary share (22,95 cents per ordinary share net of dividend withholding
tax) for the year ended 31 May 2014. This dividend of R182 117 441, inclusive of withholding tax, equates to a 2,48 cover
on headline earnings. The dividend for the year ended 31 May 2014 has not been recognised in the financial statements as
it was declared after this date.
The dividend has been declared from income reserves. The Company has no secondary tax on companies credits available.
The issued share capital at the declaration date was 674 509 042 ordinary shares. The Company’s income tax reference
number is 9062246179.
The salient dates are as follows:
Last date to trade cum dividend Friday, 5 September 2014
Shares commence trading ex dividend Monday, 8 September 2014
Record date Friday, 12 September 2014
Payment of dividend Monday, 15 September 2014
Share certificates may not be dematerialised or rematerialised between Monday, 8 September 2014 and Friday, 12 September 2014,
both days inclusive.
Before declaring the final dividend the board applied the solvency and liquidity test on the Company and reasonably
concluded that the Company will satisfy the solvency and liquidity test immediately after payment of the final divided.
The final dividend will be paid 26 days after the directors have performed the solvency and liquidity testing.
Dividend Tax is provided for at 15% of the amount of any dividend paid by Blue Label Telecoms, subject to certain
exemptions. The Dividend Tax is a tax borne by the beneficial owner of the dividend and will be withheld by either the
issuer of the dividend or by regulated intermediaries.
Prospects
The recent acquisitions of RMCS and Via Media Proprietary Limited will enhance Group profitability and will afford the
Group access to new channels of distribution.
The Group’s propensity to generate positive cash flows from operating activities will facilitate opportunities both on
an acquisitive and trading basis as well as the distribution of dividends to shareholders.
The growth in prepaid electricity meter roll-outs, is likely to continue and improve future Group revenue.
TicketPros, a ticketing provider and proud partner of premium sporting events in South Africa, continues to expand its
service offering to a myriad of events and activities.
The Group’s distribution footprint is perfectly positioned to offer a money transfer solution that provides reach across
all sectors of the South African economic landscape. Accessibility and convenience are the driving factors in our goal to
fulfil the needs of consumers.
Oxigen Services India’s mobile wallet, which facilitates instant money transfers, is expected to gain momentum, given
its monthly compounded growth that was evident towards the end of the financial year. Its historical investment in
infrastructure has created a solid foundation and credibility with banks, to enable it to provide high volume services of
this nature.
Blue Label Mexico will continue with the objectives of expanding its footprint and increasing the range of its product
and service offerings.
Subsequent events
Subsequent to year end, dividend number 5 was declared and approved by the board.
In August 2014, Blue Label completed a transaction in which it acquired 75% of Via Media Proprietary Limited. The
purchase consideration is for an initial sum of R144,4 million plus additional amounts totalling up to R103,1 million if
warranted profits are achieved by Via Media during the forthcoming 36 months. If the warranted profits are not achieved,
the above additional payments will be abated on a pro rata basis. A further R112,5 million or part thereof will be payable
if stretched targets over and above the warranted accumulated profits over the next three years are achieved.
Litigation update
In December 2008 Africa Prepaid Services Proprietary Limited (“APS”), a subsidiary of Blue Label concluded a super
dealer agreement with Multi-Links Telecommunications Limited (“MLT”), a wholly owned subsidiary of Telkom, at the time, in
terms of which APS was appointed for a period of 10 years to market and distribute a range of products and services for
MLT in Nigeria (“the agreement”).
In 2009 APS ceded and assigned all its rights and obligations in terms of the agreement to Africa Prepaid Services
Nigeria Limited (“APSN”), a subsidiary of APS and Blue Label. On 26 November 2010 APSN cancelled the agreement on the basis
of MLT’s wrongful repudiation of the agreement.
In June 2011 APSN launched arbitration proceedings in South Africa against MLT (“the arbitration proceedings”). APSN
claims payment of USD457 million against MLT and MLT has counterclaimed for payment of the sum of USD123 million.
Telkom sold its shareholding in MLT to Hip Oils Topco Limited on 3 October 2011. In terms of an indemnity contained in
the sale and purchase agreement, Telkom is liable for all amounts in excess of USD10 million in respect of APSN’s claim
against MLT.
Telkom and MLT instituted an action in the High Court against Blue Label, APS, APSN and certain individuals, including
a former senior executive of Telkom in the High Court for payment of an aggregate amount of USD724 million (“the
action”).
The claim in the action is based, inter alia, on an alleged breach of the duty of care and alleged misrepresentations
made by Blue Label together with alleged breaches of fiduciary duties on the part of the former senior Telkom executive,
at the time the agreement was concluded, in respect of which it is alleged Blue Label was a party to.
On 6 September 2013 Telkom and MLT obtained an order from the High Court which had the effect of preventing the
arbitrators from determining whether the agreement is valid and enforceable. APSN decided not to appeal against the order and
submitted itself to the jurisdiction of the High Court for the purposes of defending the allegations made against it,
Blue Label and the other defendants and for the purpose of proceeding with its claim against MLT for payment of the sum of
USD457 million arising out of MLT’s wrongful repudiation of the agreement.
At the same time and in the same action, APSN has advanced a claim against Telkom for payment of the sum of USD457
million arising out of Telkom’s wrongful interference with APSN’s contractual rights against MLT. To the extent that APSN
is unable to recover its losses from MLT, APSN aims to recover such losses from its claim against Telkom.
Blue Label and the other defendants vehemently deny the allegations made against them by Telkom and MLT and maintain
that they are not liable. A trial date has not as yet been allocated.
Independent audit
PricewaterhouseCoopers Inc.’s unqualified audit reports on the Group annual financial statements and the summarised
Group annual financial statements for the year ended 31 May 2014 are available for inspection at the Company’s registered
office. Any reference to future financial performance in this announcement has not been audited or reported on by
PricewaterhouseCoopers Inc.
Appreciation
The board of Blue Label Telecoms would once again like to express its appreciation to its suppliers, customers,
business partners and staff for their ongoing support and loyalty.
For and on behalf of the board
LM Nestadt BM Levy and MS Levy DA Suntup* CA(SA)
Chairman Joint Chief Executive Officers Financial Director
19 August 2014
*Supervised the preparation and review of the Group’s audited year end results.
SUMMARISED GROUP STATEMENT OF FINANCIAL POSITION
2014 2013
As at 31 May R’000 R’000
ASSETS
Non-current assets 1 798 307 1 340 410
Property, plant and equipment 97 200 88 125
Intangible assets and goodwill 1 005 934 706 018
Investment in and loans to associates and joint ventures 598 109 524 162
Loans receivable 18 501 1 000
Starter pack assets 2 307 2 573
Trade and other receivables 51 604 -
Deferred taxation assets 24 652 18 532
Current assets 4 704 580 4 380 137
Inventories 1 306 206 1 858 511
Loans receivable 27 850 36 431
Starter pack assets 1 010 1 115
Trade and other receivables 2 181 973 1 539 365
Current tax assets 3 410 3 433
Cash and cash equivalents 1 184 131 941 282
Total assets 6 502 887 5 720 547
EQUITY AND LIABILITIES
Capital and reserves 3 523 989 3 242 853
Share capital, share premium and treasury shares 3 945 832 3 939 891
Restructuring reserve (1 843 912) (1 843 912)
Other reserves 138 798 113 139
Share-based payment reserve 33 660 39 496
Transaction with non-controlling interest reserve (957 230) (931 125)
Retained earnings 2 222 685 1 941 082
Non-controlling interest (15 844) (15 718)
Non-current liabilities 92 400 11 942
Deferred taxation liabilities 41 510 11 942
Trade and other payables 50 178 -
Provisions 712 -
Current liabilities 2 886 498 2 465 752
Trade and other payables 2 818 898 2 393 222
Provisions 23 777 19 029
Current tax liabilities 28 733 39 504
Current portion of interest-bearing borrowings 2 653 1 980
Current portion of non-interest-bearing borrowings 12 437 12 017
Total equity and liabilities 6 502 887 5 720 547
SUMMARISED GROUP STATEMENT OF COMPREHENSIVE INCOME
2014 2013
For the year ended 31 May R’000 R’000
Revenue 19 401 666 18 984 210
Other income 26 692 16 137
Change in inventories of finished goods (18 052 132) (17 712 965)
Employee compensation and benefit expense (332 542) (332 901)
Depreciation, amortisation and impairment charges (65 137) (67 951)
Other expenses (255 691) (240 859)
Operating profit 722 856 645 671
Finance costs (166 876) (167 096)
Finance income 156 250 173 260
Share of loss from associates and joint ventures (56 873) (47 326)
Net profit before taxation 655 357 604 509
Taxation (206 442) (196 404)
Net profit for the year 448 915 408 105
Other comprehensive income:
Exchange profits on translation of foreign operations 25 637 87 888
Other comprehensive profit for the year, net of tax 25 637 87 888
Total comprehensive income for the year 474 552 495 993
Net profit for the year attributable to: 448 915 408 105
Equity holders of the parent 450 230 424 841
Non-controlling interest (1 315) (16 736)
Total comprehensive income for the year attributable to: 474 552 495 993
Equity holders of the parent 475 889 512 441
Non-controlling interest (1 337) (16 448)
Earnings per share for profit attributable to equity holders (cents)
Basic earnings per share (cents) 67,88 64,22
Diluted earnings per share** (cents) 66,86 63,19
Dividend per share (cents) 25,00 23,00
Weighted average number of shares 663 298 476 661 577 847
Diluted weighted average number of shares 672 311 571 672 304 611
Number of shares in issue 674 509 042 674 509 042
Headline earnings per share (cents) 67,98 64,17
Diluted headline earnings per share** (cents) 66,96 63,14
Reconciliation between net profit and core net profit for the year:
Net profit for the year attributable to equity holders of the parent 450 230 424 841
Amortisation on intangible assets raised through business combinations
net of tax and net of non-controlling interest 10 372 12 675
Core net profit for the year 460 602 437 516
- Core earnings per share (cents)* 69,44 66,13
* Core earnings per share is calculated after adding back the amortisation of intangible assets as a consequence
of the purchase price allocations completed in terms of IFRS 3(R): Business Combinations.
** Diluted earnings per share and diluted headline earnings per share are calculated by adjusting the weighted average
number of ordinary shares outstanding for the number of shares that would be issued on vesting under the employee
forfeitable share plan.
SUMMARISED GROUP STATEMENT OF CHANGES IN EQUITY
Share capital,
share premium Transaction with Share-based Non-
and treasury Retained Restructuring Other non-controlling payment controlling Total
shares earnings reserve reserves* interest reserve reserve** interest equity
R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000
Balance as at 1 June 2012 3 941 316 1 671 378 (1 843 912) 25 539 (909 572) 38 915 (9 278) 2 914 386
Net profit for the year - 424 841 - - - - (16 736) 408 105
Other comprehensive profit - - - 87 600 - - 288 87 888
Total comprehensive income - 424 841 - 87 600 - - (16 448) 495 993
Dividends paid - (155 137) - - - - (3 515) (158 652)
Treasury shares purchased (17 223) - - - - - - (17 223)
Equity compensation benefit
scheme shares vested 15 798 - - - - (15 559) (239) -
Equity-based compensation movements - - - - - 16 063 117 16 180
Share of equity movement in associates - - - - - 77 - 77
Transaction with non-controlling
interest reserve movement - - - - (21 553) - 7 553 (14 000)
Non-controlling interest acquired
during the year - - - - - - 6 092 6 092
Balance as at 1 June 2013 3 939 891 1 941 082 (1 843 912) 113 139 (931 125) 39 496 (15 718) 3 242 853
Net profit for the year - 450 230 - - - - (1 315) 448 915
Other comprehensive profit - - - 25 659 - - (22) 25 637
Total comprehensive income - 450 230 - 25 659 - - (1 337) 474 552
Dividends paid - (168 627) - - - - (1 805) (170 432)
Treasury shares purchased (11 120) - - - - - - (11 120)
Equity compensation benefit
scheme shares vested 17 061 - - - - (16 792) (269) -
Equity-based compensation movements - - - - - 10 792 277 11 069
Share of equity movement in associates - - - - - 164 - 164
Transaction with non-controlling
interest reserve movement - - - - (26 105) - 3 760 (22 345)
Non-controlling interest movement - - - - - - (752) (752)
Balance as at 31 May 2014 3 945 832 2 222 685 (1 843 912) 138 798 (957 230) 33 660 (15 844) 3 523 989
* Included in other reserves is the foreign currency translation reserve and the non-distributable reserve.
** Includes employee compensation benefit reserve.
SUMMARISED GROUP STATEMENT OF CASH FLOWS
2014 2013
For the year ended 31 May R’000 R’000
Cash flows from operating activities 907 332 (439 794)
Cash flows from investing activities (467 220) (406 336)
Cash flows from financing activities (196 892) (188 066)
Increase/(decrease) in cash and cash equivalents 243 220 (1 034 196)
Cash and cash equivalents at the beginning of the year 941 282 1 975 242
Translation difference (371) 236
Cash and cash equivalents at the end of the year 1 184 131 941 282
HEADLINE EARNINGS
2014 2013
For the year ended 31 May R’000 R’000
Net profit attributable to equity holders of the parent 450 230 424 841
Net profit on disposal of property, plant and equipment (207) (562)
Profit on disposal of subsidiaries - (120)
Profit on disposal of associates and joint ventures - (2 107)
Impairment of intangible assets and property, plant and equipment 866 2 454
Headline earnings 450 889 424 506
Headline earnings per share (cents) 67,98 64,17
Acquisition of subsidiaries
Effective date
Shares in the following subsidiaries were acquired during the year: of acquisition % acquired
Subsidiaries
Simigenix Proprietary Limited 23 August 2013 100
Retail Mobile Credit Specialists Proprietary Limited 7 April 2014 100
Details of the total net assets acquired and the resulting goodwill
as at the date of acquisition are as follows:
Total
R’000
Total purchase consideration 313 818
Fair value of net assets acquired 108 069
Goodwill 205 749
The assets and liabilities acquired through acquisition are as follows:
Acquirer’s
carrying
Fair value at amount on
acquisition date acquisition date
R’000 R’000
Cash and cash equivalents 25 444 25 444
Property, plant and equipment 727 727
Intangible assets 104 177 3 004
Goodwill 205 749 -
Loans receivable 18 632 18 632
Receivables 24 272 24 272
Deferred tax (26 002) 2 327
Current tax liability (3 726) (3 726)
Payables (35 455) (35 455)
313 818 35 225
Total purchase consideration 313 818
Contingent consideration (15 132)
Cash and cash equivalents in subsidiary acquired (25 444)
Cash outflow from acquisitions 273 242
SEGMENTAL SUMMARY
South African International
Total distribution distribution Mobile Solutions Corporate
Year ended R’000 R’000 R’000 R’000 R’000 R’000
31 May 2014
Total segment revenue 25 354 475 24 837 763 - 350 783 165 929 -
Internal revenue (5 952 809) (5 734 111) - (198 165) (20 533) -
Revenue 19 401 666 19 103 652 - 152 618 145 396 -
Operating profit/(loss) before depreciation,
amortisation and impairment charges 787 993 821 310 (13 961) 34 273 29 257 (82 886)
Net profit/(loss) for the year attributable
to equity holders of the parent 450 230 552 926 (51 176) 23 916 12 547 (87 983)
Amortisation on intangibles raised through
business combinations net of tax and
non-controlling interest 10 372 6 070 3 314 988 - -
Core net profit for the year attributable to
equity holders of the parent 460 602 558 996 (47 862) 24 904 12 547 (87 983)
At 31 May 2014
Total assets 6 502 887 5 651 680 556 376 96 420 136 090 62 321
Net operating assets/(liabilities) 1 818 082 1 871 469 (16 065) (20 543) 23 840 (40 619)
Year ended
31 May 2013
Total segment revenue 24 720 865 24 363 215 - 220 393 137 257 -
Internal revenue (5 736 655) (5 651 135) - (68 973) (16 547) -
Revenue 18 984 210 18 712 080 - 151 420 120 710 -
Operating profit/(loss) before depreciation,
amortisation and impairment charges 713 622 796 439 (31 000) 37 055 24 703 (113 575)
Net profit/(loss) for the year attributable
to equity holders of the parent 424 841 562 824 (54 861) 24 268 13 152 (120 542)
Amortisation on intangibles raised through
business combinations net of tax and
non-controlling interest 12 675 7 942 4 176 519 38 -
Core net profit for the year attributable to
equity holders of the parent 437 516 570 766 (50 685) 24 787 13 190 (120 542)
At 31 May 2013
Total assets 5 720 547 4 950 040 481 712 94 581 145 989 48 225
Net operating assets/(liabilities) 1 914 385 1 981 975 (15 567) 3 313 16 904 (72 240)
Directors: LM Nestadt (Chairman)*, BM Levy, MS Levy, K Ellerine*, GD Harlow*, NN Lazarus SC*,
JS Mthimunye*, MV Pamensky, DA Suntup, J Vilakazi* (*Non-executive)
Company Secretary: J van Eden
Sponsor: Investec Bank Limited
Auditors: PricewaterhouseCoopers Inc.
American Depository Receipt (ADR) Programme:
Cusip No.: 095648101 Ticker name: BULBY ADR to ordinary share: 1:10
Depository: The Bank of New York, 101 Barclay Street, New York NY. 10286, USA
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