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Unaudited results for the six month period ended 31 may 2014
GLOBAL ASSET MANAGEMENT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2002/003192/06)
Share Code: GAM ISIN: ZAE000173498
("Global" or “the company”)
UNAUDITED RESULTS FOR THE SIX MONTH PERIOD ENDED 31 MAY 2014
The Board of Directors of Global are pleased to present the unaudited results of Global and its
Subsidiaries (“the Group”) for the six month period ended 31 May 2014.
Statement of comprehensive Income
Restated
6 months 12 months 6 months
Unaudited Audited Unaudited
31 May 30 November 31 May
2014 2013 2013
R’000 R’000 R’000
Revenue 89 530 177 217 85 748
Cost of sales (57 215) (112 497) (58 385)
Gross profit 32 315 64 720 27 363
Other income 33 639 107
Operating expenses (11 465) (22 895) (7 746)
Operating profit before interest 20 883 42 464 19 724
Interest received 32 7 6
Finance costs (12 460) (24 408) (12 434)
Profit before taxation 8 455 18 063 7 296
Taxation (2 448) (4 811) (2 048)
Profit for the year 6 007 13 252 5 248
Other comprehensive income - - -
Total comprehensive Income 6 007 13 252 5 248
Attributable earnings/(loss) to:
Parent 6 331 13 252 5 248
Minority (324) - -
Headline earnings reconciliation:
Attributable earnings 6 007 13 252 5 248
Impairment (Net of Taxation) - 2 792 -
Headline earnings 6 007 16 044 5 248
Per share information:
Headline earnings per share (cents) 13.2 45.5 15.1
Basic earnings per share (cents) 13.2 37.6 15.1
Weighted average number of shares in
issue 45 351 166 35 220 790 34 730 769
Condensed consolidated statement of financial position
Unaudited Audited Restated
31 May 30 November Unaudited
2014 2013 31 May 2013
R’000 R’000 R’000
Assets
Non-current assets
Property, plant and equipment 432 387 409 072 402 003
Intangible assets 1 000 1 000 -
Investment in other financial assets 560 - -
Loans and advances to customers 16 943 16 991 14 911
Deferred tax 21 061 18 430 21 032
Current assets
Available for sale assets - - 4 520
Loans and advances to customers 5 855 5 129 3 859
Other financial assets 467 - -
Trade and other receivables 35 451 31 175 28 212
Cash and cash equivalents 18 212 18 410 5 730
Disposal group held for sale 4 889 4 889 -
Total assets 536 825 505 096 480 267
Equity and liabilities
Equity
Share capital 34 141 31 942 11 279
Retained earnings 73 121 66 767 58 763
Liabilities
Non-current liabilities
Other financial liabilities 230 086 224 218 258 440
Deferred tax 55 825 50 845 51 452
Current liabilities
Loan from holding company 3 017 1 352 4 731
Other financial liabilities 88 951 86 123 60 878
Current tax payable 827 558 197
Trade and other payables 50 115 42 532 34 527
Disposal group held for sale 742 759 -
Total equity and liabilities 536 825 505 096 480 267
Per share information
Net asset value per share (cents per 234.9 220.8 200.1
share)
Tangible net asset value per share 232.7 218.6 200.1
(cents per share)
Number of shares in issue at period end 45 654 961 44 699 113 35 000 000
Condensed consolidated statement of cash flows
Unaudited Audited Restated
31 May 30 November 31 May
2014 2013 2013
R’000 R’000 R’000
Cash generated from operating 39 501 67 558 36 074
activities
Cash used in investing activities 11 801 23 808 13 368
Cash generated from/(used in) (51 500) (74 190) (44 946)
financing activities
Total cash movement for the year (198) 17 176 4 496
Cash at the beginning of the year 18 410 1 234 1 234
Total cash at end of the year 18 212 18 410 5 730
Condensed consolidated statement of changes in equity
Availabl Commo Attributable Non-
Share e for sale n Control Retained to equity controlling Total
capital reserve reserve income holders interest equity
R’000 R’000 R’000 R’000 R’000 R’000 R’000
Balance at 30
November 2012 4 279 799 (6 941) 59 657 57 794 - 57 794
Share issue 29 308 - - - 29 308 - 29 308
Share issue
expense (1 645) - - - (1 645) - (1 645)
Changes in
equity
Total
comprehensive
income - 13 252 13 252 - 13 252
Total changes 27 663 - - 13 252 40 915 - 40 915
Balance at 30
November 2013 31 942 799 (6 941) 72 909 98 709 - 98 709
Share issue 2 199 - - - 2 199 - 2 199
Change in
ownership (26)
interest - - (26) - (26)
Total
comprehensive
income - - 6 331 6 331 49 6 380
Total changes 2 199 - - 6 331 8 504 49 8 553
Balance at 31
May 2014 34 141 799 (6 967) 79 240 107 213 49 107 262
Restated
Prior year 6
months
Balance at 1 Dec
2012 4 279 799 (6 941) 59 657 57 794 - 57 794
Share issue 7 000 - - - 7 000 - 7 000
Total
comprehensive
income - - - 5 248 5 248 - 5 248
Total changes 7 000 - - 5 248 12 248 12 248
Balance at 31
May 2013 11 279 799 (6 941) 64 905 70 042 - 70 042
1. BASIS OF PREPARATION
The board of directors is pleased to present the Group?s unaudited results for the six
month period ended 31 May 2014. The accounting policies adopted for purposes of this
report comply, and have been consistently applied in all material respects, with
International Financial Reporting Standards (“IFRS”). The abridged financial statements
have been prepared in accordance with the requirements of IAS 34 (Interim Financial
Reporting). The results are presented in Rand and the going concern principal has been
adopted in the preparation of the results.
The same accounting policies and methods of computation have been followed as
compared to the prior audited period namely 30 November 2013 as detailed in the results
announcement published on SENS on 14 March 2013.
The financial results have been prepared by the financial director, Mr W Basson CA (SA).
2. INDUSTRY AND BUSINESS OVERVIEW
Global listed on the Alternative Exchange ("AltX") of the Johannesburg Stock Exchange
(“JSE”) on 14 December 2012.
The company focuses on 5 distinct industry sectors, namely renewable energy,
agribusiness, industrial, infrastructure and financial services. During the second half of
2014, Global intends to finalise various transactions in the renewable energy and
agribusiness sectors. These transactions will be incorporated in Global and are expected
to have a positive impact on revenues, margins and cash flows.
Global is the holding company of LFS Assets Proprietary Limited (“LFS”), a very
successful asset finance company, specialising in the financing of Linde forklift trucks.
As a recent development and as an expansion of Global?s asset finance operations,
Global has recently raised additional capital and established a fund in which it currently
owns 100% called Energy Efficiency Company Proprietary Limited (“EEC”), which assists
with provision of funding to corporate clients of electricity supply companies (“Esco's”) that
are accredited with Eskom, whereby the new electrical installations are funded over a
three year period. This business has started to grow rapidly in the first six months under
review and good growth is expected in the second half of the year with a solid pipeline of
projects.
3. FINANCIAL RESULTS
Global is pleased to report that the profit performance of the Group approximates
expectations in comparison to the profit performance of the Group for the 6 months ending
31 May 2013, with steady growth being experienced.
The main business of the Group has continued to grow with new rental contracts being
signed during the year under review as compared to the prior year. This is evident with
the growth in operating profit before interest.
Operating expenses have been well contained since June 3013 and have increased in
line with expectation.
Since November 2013, property, plant and equipment on the balance sheet increased by
5.6%, primarily as a result of additional forklift trucks being acquired for the primary rental
book during the year. Other financial liabilities including trade and other payables have
similarly increased as a result of the increased business.
Share capital has increased due to the issue of shares, which has reduced the earnings
and headline earnings per share. The projects into which the additional funds will be
invested are still at an early stage and profits in relation to the new projects will only start
flowing through over the next twelve months.
It should be noted that the current portion of other financial liabilities reflected on the
balance sheet represents a 12 month accrual for finance associated with the Group?s
rental book. On the other side, Trade and Other Receivables only reflect approximately
one month of receivables arising from the matching rental contracts. The net current
liability position of the Group is thus considered to be sound as current liabilities will be
settled by ongoing monthly rental billings.
4. RESTATEMENTS
The comparative interim results have been restated in line with the 30 November 2013
year end results where applicable.
5. SEGMENTAL REPORTING
Segmental information has been reported by the Group in the following segments, namely
forklift truck rentals and fork truck maintenance transactions.
May 2014 May 2014 Nov 2013 Nov 2013
% R’000 % R’000
Revenue
Rental income 68 60 880 65 114 279
Maintenance income 23 20 960 25 43 912
Other revenue 9 7 690 10 19 025
income
100 89 530 100 177 217
Rental income Maintenance Other income
GROUP R’000 income R’000 Consolidation
May 2014 R’000 R’000
Sales 60 880 20 960 7 690 89 530
Cost of sales (27 698) (21 137) (8 380) (57 215)
Gross profit 33 182 (177) (690) 32 315
Operating expense (20 623) - (3 237) (23 860)
Taxation (3 597) 50 1 099 (2 448)
Profit after tax 8 962 (127) (2 828) 6 007
Depreciation and
impairment (28 050) - (40) (28 090)
Additional information
Segment assets 445 458 - 91 367 536 825
Deferred tax assets 20 714 - 347 21 061
Deferred tax liability (48 016) - (7 809) (55 825)
Segment liability (416 613) - (12 950) (429 563)
Rental income Maintenance Other income
GROUP R’000 income R’000 Consolidation
November 2013 R’000 R’000
Sales 114 279 43 912 19 025 177 217
Cost of sales (50 362) (43 904) (18 231) (112 497)
Gross profit 63 917 8 794 64 719
Operating expense (41 009) - (5 647) (46 656)
Taxation (6 643) (2) 1 834 (4 811)
Profit after tax 16 265 6 (3 019) 13 251
Depreciation and
impairment (52 921) - (1 451) (54 372)
Additional information
Segment assets 427 955 - 77 141 505 096
Deferred tax assets 18 430 - - 18 430
Deferred tax liability (43 044) - (7 801) (50 845)
Segment liability (395 046) - (11 341) (406 387)
Project management, corporate services and any other income is below the quantitative
threshold set by IFRS for reporting.
6. RELATED PARTY TRANSACTIONS
Relationships:
Holding company: Inshare (Pty) Ltd
Subsidiaries: GAM Industrial (Pty) Ltd
LFS Assets (Pty)Ltd
GAM New Energy (Pty) Ltd
Energon SA (Pty)Ltd
GAM Business Solutions (Pty) Ltd
Energy Efficiency Company (Pty) Ltd
GAM Infrastructure (Pty) Ltd
GAM AgriBusiness (Pty) Ltd
Fellow subsidiaries: Inshare Asset Finance Holdings (Pty) Ltd
Inshare Asset Finance Green Technologies
(Pty)Ltd
Ocean Crest Trading 11 (Pty) Ltd
E B M Project (Pty) Ltd
Arcay Equity (Pty) Ltd
Related party transactions were as follows:
GROUP GROUP
MAY 2014 NOV 2013
R’000 R’000
Related party balances
Loan account owing (to) by related parties
Inshare (Pty) Ltd (3 017) (1 352)
The loans are unsecured, does not bear interest and is
payable on demand. There was no evidence of
impairment for the period end 31 May 2014, thus the fair
value approximates the carrying value at cost.
Trade and other receivables
E B M Project (Pty)Ltd 2 750 1 250
Related party transactions – at arm’s length
Loan received from (repay/advanced to)
Inshare (Pty) Ltd 1 665 (4 799)
Rent paid to (received from) related parties
Ocean Crest Trading 11 (Pty) Ltd 399 726
Management fee paid to (received from)
Inshare (Pty) Ltd 420 840
Inshare Asset Finance Holdings (Pty) Ltd 318 604
Purchase of investment in other financial assets
Inshare Asset Finance Green Technologies (Pty) Ltd 400 -
Consulting fee paid to (received by)
EBM Project (Pty) Ltd (1 500) (1 250)
Arcay Equity (Pty) Ltd 300 534
7. DIRECTOR CHANGES
The current board is constituted as follows:
Name (Age) Date of Position/title
appointment/resignation
Niels Penzhorn (41) 1 December 2009 Chief Executive Officer
Werner Petrus Basson (32) 14 November 2012 Chief Financial Officer
Marinus Cornelis Christoffel 13 February 2002 Chief Operating Officer
van Ettinger (66)
Alan Jerome Naidoo (36) 1 November 2012 Non-Executive Director
Andrew Alexander Maren 1 November 2012/30 June Non-Executive Director
(38) 2014
Gabriel Thono Magomola 1 November 2012 Independent Non-
(70) Executive Director
Gordon Kenneth Cunliffe 1 November 2012 Independent Non-
(65) Executive Director and
Chairman
There have been no changes to the board of directors in the period under review. Andrew
Maren resigned after the period end on 30 June 2014.
8. SHARE CAPITAL AND ISSUE/ REPURCHASE OF SHARES
During the period presented, the Company raised R 2 198 437 through the issue of
955 842 new shares in Global at an issue price of R2.30 per share as part of the
Company?s capital raising initiative.
The company intends raising further capital to grow its renewable energy and energy
efficiency businesses and thus intends placing an additional 10 500 000 shares at 230
cents per share over a period of time as well as undertaking a claw back offer at R2.30 for
6 500 000 Shares, which shares will be subscribed for by INSURE and will be offered to
existing shareholders on a pro rata basis. Further details will be announced in due course.
Global did not repurchase any shares during the period under review.
9. DIVIDEND
The Company has not declared a dividend for the interim period ended 31 May 2014
(2013: R Nil) in line with its stated intention in the prospectus at the time of listing.
10. LITIGATION
There is no litigation pending against the Company or its Subsidiaries, which is expected
to have a material impact on the results of the Group.
11. CONTINGENT LIABILITIES
At the balance sheet date the Group does not have any contingent liabilities (2013: R Nil).
12. SUBSEQUENT EVENTS
Global has secured a firm letter of intent from Futuregrowth to act as an investment
partner for its newly formed subsidiary Plastic Green Energy (PTY) Ltd (“PGE”) which
subsidiary will house the plastic conversion plant (“the Project”).
Futuregrowth, a member of Old Mutual Investment Group, has agreed to acquire a 45%
interest for R20.25 million in the Project, of which R12 million will be invested in the first
reactor and R8.25 million for another three reactors.
Futuregrowth?s equity investment is subject to a list of agreed conditions precedent, which
PGE is scheduled to have complied with by the end of August 2014. During this period,
Futuregrowth has been granted exclusivity on the transaction.
The company will be exercising its option to increase its shareholding in Earthwize from
5% to 51% in due course, as previously announced.
There are no other major events subsequent to 31 May 2014 that require disclosure.
13. FUTURE PROSPECTS
The directors of the Company believe that the Group has excellent prospects to
significantly expand its operations over the near term. Based on its current pipeline of
projects and initiatives and strong management skills, coupled with an excellent reputation
as well as a proven track record, it is expected that Global will generate solid returns for
its shareholders.
By order of the Board
GK Cunliffe N Penzhorn
Chairman Chief Executive Officer
Johannesburg
29 August 2014
Registered Office
Ruimsig Country Office Park
Block E
129 Hole in One Avenue
Ruimsig
Roodepoort
1724
Directors
G.K. Cunliffe*; M.C.C van Ettinger; N. Penzhorn; W.P Basson; G.T Magomola*;
A.J Naidoo*
* - independent non-executive
Designated Advisor Transfer Office
Arcay Moela Sponsors Proprietary Limited Link Market Services Proprietary Limited
Date: 29/08/2014 05:00:00 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,
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