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Abridged audited annual financial results for the year ended 28 February 2014
HUGE GROUP LIMITED
(Registration number 2006/023587/06)
Share code: HUG ISIN: ZAE000102042
("Huge" or "the Group" or "the Company")
ABRIDGED AUDITED ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 28
FEBRUARY 2014
Shareholders are referred to the Provisional Reviewed Consolidated
Results for the year ended 28 February 2014 which were released on
SENS on Friday, 30 May 2014 and the Change Statement and Notice of
Annual General Meeting announcement released on SENS on Wednesday,
30 July 2014. The Audited Results for the year ended 28 February
2014 differ from the provisional published results, as detailed in
notes 1 and 2 below.
The impact of this restatement of the results is not material and
the adjustment to Earnings per Share (EPS) and (Headline Earnings
per Share (HEPS) is a reduction from 13.80 cents per share to 13.54
cents per share and 13.92 cents per share to 13.66 cents per share
respectively or 0.26 cents per share. This announcement provides
further clarification with regard to the announcement released on 30
July 2014.
AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Audited Reviewed Difference Unaudited Audited
28 February 28 February 31 August 28 February
2014 2014 2013 2013
(12 months) (12 months) (6 months) (12 months)
R R R R R
Total revenue 203 577 908 203 577 908 - 106 698 288 266 321 277
Gross profit 94 239 784 94 239 784 - 46 234 498 79 049 591
Other income 1 541 967 1 541 967 - 1 420 948 1 181 983
Operating
expenses (77 817 551 (77 817 551) - (39 367 791) (81 453 815)
Operating
profit (loss) 17 964 200 17 964 200 - 8 287 655 (1 222 241)
Investment
income 1 021 159 1 021 159 - 327 800 1 311 007
Net change in
fair value of
financial
instruments (804 304) (804 304) - (1 341 444) (6 076 548)
Share of
earnings
(loss) from
equity
accounted
investments 73 170 73 170 - (10 251) 67 063
Finance costs (2 293 002) (2 293 002) - (1 209 546) (3 705 033)
Profit (loss)
before
taxation 15 961 223 15 961 223 - 6 054 214 (9 625 754)
Income tax
expense (4 628 565) (4 628 565) - (2 843 006) (2 263 838)
Net profit
(loss) for
the period 11 332 658 11 332 658 - 3 211 208 (11 889 590)
Owners of the
parent 11 852 636 12 081 447 (228 811) 3 664 838 (9 871 164)
Non- (Note 1)
controlling
interest (519 978) (748 789) 228 811 (453 630) (2 018 426)
(Note 1)
11 332 658 11 332 658 - 3 221 208 (11 889 592)
Basic and
diluted
earnings
(loss) per
share (cents) 13.54 13.80 (0.26) 4.11 (11.01)
(Note 1)
Adjusted for:
Impairment of
non-current
assets 0.15 0.15 - - -
Impairment of
fixed assets - - - 0.01 -
Profit on
disposal of
property,
plant and
equipment (0.03) (0.03) - - -
Impairments
of intangible
assets and
associate
company 6.9
Legal
settlement - - - 1.95 -
Basic and
diluted
headline
earnings
(loss) per
share (cents) 13.66 13.92 (0.26) 6.07 (4.07)
(Note 1)
Total number
of shares in
issue (‘000) 80 255 80 255 - 89 255 89 255
Weighted
number of
shares in
issue (‘000) 87 530 87 530 - 89 255 89 672
AUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Reviewed Difference Unaudited Audited
28 February 28 February 31 August 28 February
2014 2014 2013 2013
(12 months) (12 months) (6 months) (12 months)
R R R R R
ASSETS
Non-Current
Assets
Property,
plant and
equipment 34 450 565 34 450 565 - 33 604 828 32 489 579
Goodwill 215 153 482 215 153 482 - 215 153 482 215 153 482
Intangible
assets 2 808 534 2 808 534 - 5 693 057 3 243 525
Investment
in joint
venture 702 463 702 463 - 674 467 629 293
Other
financial
assets - - - - 298 630
Deferred tax 11 302 734 11 302 734 - 12 287 244 15 755 915
264 417 778 264 417 778 - 267 413 078 267 570 424
Current
Assets
Inventories - - - 4 747 177 5 742 244
Trade and
other
receivables 69 220 149 69 220 149 - 67 935 275 70 823 341
Loans to
associate
companies - - - 366 830 -
Current tax
receivable 164 404 164 404 - - 164 404
Deferred
Discretionary
Incentive
Bonuses 3 766 635 3 766 635 - - -
Other
financial
assets 3 400 079 3 400 079 - 7 147 375 8 120 747
Cash and
cash
equivalents 4 173 099 4 173 099 - 4 638 173 9 963 189
80 724 366 80 724 366 - 85 641 093 94 813 925
Total assets 345 142 144 345 142 144 - 353 242 285 362 384 349
EQUITY AND
LIABILITIES
Equity
Share
capital 208 410 530 208 410 530 - 213 361 060 213 361 060
Reserves (482 456) (482 456) - (1 074 561) (1 074 561)
Retained
earnings 11 888 288 12 117 099 (228 811) 4 292 597 627 759
Attributable (Note 1)
to equity
holders of
parent 219 816 362 220 045 173 (228 811) 216 579 095 212 914 258
Non- (3 888 711) (Note 1) (3 593 552) (3 139 922)
controlling
interest (3 659 900) 228 811
216 156 462 216 156 462 (Note 1) 212 985 543 209 774 336
Liabilities
Non-current
liabilities
Finance
lease
obligations 458 920 458 920 - 182 038 308 582
Deferred tax 7 771 325 7 771 325 - - 7 595 942
Provision
for losses
in associate - - - 55 274 -
8 230 245 8 230 245 - 237 312 7 904 524
Current
liabilities
Loans from
shareholders 1 345 961 1 345 961 - - 410 664
Other
financial
liabilities 1 167 946 1 167 946 - - 903 725
Finance
lease
obligations 359 732 359 732 - 219 393 213 163
Trade and
other
payables 107 881 153 107 881 153 - 127 128 086 128 350 547
Bank
overdraft 10 000 645 10 000 645 - 12 671 951 14 827 390
120 755 437 120 755 437 - 140 019 430 144 705 489
Total
liabilities 128 985 682 128 985 682 - 140 256 742 152 610 013
Total equity
and
liabilities 345 142 144 345 142 144 - 353 242 285 362 384 349
Number of
shares in
issue (‘000) 80 255 80 255 - 89 255 89 255
Net asset
value per
share
(cents) 269.34 269.34 - 238.63 235.0
Net tangible
asset value
per share
(cents) (2.25) (2.25) - (8.81) (9.66)
AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Audited Reviewed Difference Unaudited Audited
28 February 28 February 31 August 28 February
2014 2014 2013 2013
(12 months) (12 months) (6 months) (12 months)
R R R R R
Balance at
the
beginning of
the period 209 774 334 209 774 334 - 209 774 334 222 707 448
Total
comprehensive
income /
(loss) for
the period 11 332 658 11 332 658 - 3 211 208 (11 889 592)
Purchase of
own shares (4 950 530) (4 950 530) - - (1 043 522)
Balance at
the end of
the period 216 156 462 216 156 462 - 212 985 542 209 774 334
AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Reviewed Difference Unaudited Audited
28 February 28 February 31 August 28 February
2014 2014 2013 2013
(12 months) (12 months) (6 months) (12 months)
R R R R R
Cash flows
from
operating
activities 11 583 219 11 583 219 - 1 561 436 10 368 769
Cash flows
from
investing
activities (9 092 459) (9 092 459) - (2 900 710) (2 812 683)
Cash flows
from
financing
activities (3 454 105) (3 454 105) - (1 830 303) (5 551 115)
Net cash
movement for
the period (963 345) (963 345) - (3 169 577) 2 004 971
Cash at the
beginning of
the period (4 864 201) (4 864 201) - (4 864 201) (6 869 172)
Total cash
at the end
of the
period (5 827 546) (5 827 546) - (8 033 778) (4 864 201)
SEGMENTAL REPORT – PROVISIONAL
Inter-
Telecom Corporate segment
Grouping MTS Grouping Office transactions Total
R R R R
Total
revenue 288 329 922 6 426 319 - (91 178 333) 203 577 908
Cost of
sales (194 492 453) - - 85 154 329 (109 338 124)
Gross profit 93 837 469 6 426 319 - (6 024 004) 94 239 784
Other income 5 976 939 - 563 346 (4 997 409) 1 541 967
Operating
expenses (82 774 080) (3 309 854) (2 755 030) 11 021 413 (77 817 551)
Impairment
of Eyeballs
intangible –
at company
level - (239 747) - - (239 747)
Operating
profit
(loss) 23 063 423 (2 907 539) (2 191 684) - 17 964 200
Investment
income 718 845 - n 378 364 (76 050) 1 021 159
Net change
in fair
value of
financial
instruments 531 447 - (1 335 751) - (804 304)
Income from
equity
accounted
investments 73 170 - - - 73 170
Finance
costs (2 036 593) (30 960) (301 499) 76 050 (2 293 002)
Profit
(loss)
before
income tax 22 350 292 (2 938 499) (3 450 570) - 15 961 223
Income tax
(expense) (4 202 241) (1 358 637) 932 313 - (4 628 565)
Profit
(loss) after
income tax 12 124 047 1 726 868 (2 518 257) 11 332 658
(Note 2)
SEGMENTAL REPORT - AUDITED
Inter-
Telecom Corporate segment
Grouping MTS Grouping Office transactions Total
R R R R
Total
revenue 288 329 922 6 426 319 - (91 178 333) 203 577 908
Cost of
sales (194 492 453) - - 85 154 329 (109 338 124)
Gross profit 93 837 469 6 426 319 - (6 024 004) 94 239 784
Other income 5 976 030 - 563 346 (4 997 409) 1 541 967
Operating
expenses (82 821 349) (3 262 585) (2 755 030) 11 021 413 (77 817 551)
Impairment
of Eyeballs
intangible –
at company
level - (239 747) - - (239 747)
Operating
profit
(loss) 16 992 150 3 163 734 (2 191 684) - 17 964 200
Investment
income 718 845 - 378 364 (76 050) 1 021 159
Net change
in fair
value of
financial
instruments 531 447 - (1 335 751) - (804 304)
Income from
equity
accounted
investments 73 170 - - - 73 170
Finance
costs (2 036 593) (30 960) (301 499) 76 050 (2 293 002)
Profit
(loss)
before
income tax 16 279 019 3 132 774 (3 450 570) - 15 961 223
Income tax
(expense) (4 202 241) (1 358 637) 932 313 - (4 628 565)
Profit
(loss) after
income tax 12 076 778 1 774 137 (2 518 257) 11 332 658
Note 1:
In the Statement of Financial Performance, the Net profit after
taxation attributable to the Owners of the parent has been reduced
by R228 811 and the share of profits attributable to the Non-
controlling interests has been increased by the same amount due to a
an entry in Cost of sales being reallocated from Ambient Mobile
Proprietary Limited, a 49.9% held subsidiary of Huge Telecom
Proprietary Limited (Huge Telecom)to Huge Telecom. As a
consequence, EPS and HEPS reduced by 0.26 cents per share.
This adjustment resulted in a reduction in the Retained Earnings
attributable to Owners of the parent in the amount of R228 811 and
an increase in the Non-controlling interests of the same amount as
reflected in the Statement of Financial Position.
The adjustment has no impact on either the Statement of Changes in
Equity or the Cash Flow Statement.
Note 2:
The reviewed Segmental Report published on 30 May 2014 differs from
the audited Segmental Report in respect of certain Operating
Expenses which have been reclassified between the Telecom and MTS
segments.
This has had no impact on the Statement of Comprehensive Income or
EPS and HEPS.
COMMENTARY
BASIS OF PREPARATION
The Abridged Audited Annual Financial Results have been prepared in
accordance with the recognition and measurement principles of
International Financial Reporting Standards and are presented in
accordance with the minimum content, including disclosures, as
prescribed by IAS 34: Interim Financial Reporting applied to year
end reporting, the Companies Act of South Africa, and the
Johannesburg Stock Exchange Listings Requirements. In addition,
these Abridged Audited Annual Financial Results have been prepared
in accordance with SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Reporting
Pronouncements as issued by the Financial Reporting Standards
Council. The accounting policies used in preparation of these
Abridged Audited Annual Financial Results are consistent with those
applied in the most recent six month period, as well as those
applied in the preparation of the Annual Financial Results of the
Group for the year ended 28 February 2013.
These Abridged Audited Annual Financial Results were prepared
internally under the supervision of the Group Financial Director,
David Deetlefs CA(SA).
The Integrated Annual Report of Huge for the year ended 28 February
2014 has been posted to shareholders as was advised in the
announcement of 30 July 2014.
AUDIT OPINION
These results have been audited by the Group auditors, BDO South
Africa Inc, and their unqualified and unmodified audit report is
available for inspection at the Company’s registered office.
Johannesburg
3 September 2014
Further investor and shareholder information is available at
www.hugegroup.com.
Designated Advisor
Arcay Moela Sponsors Proprietary Limited
One Health Building, 54 Maxwell Drive, Woodmead, 2191
Auditors
BDO South Africa Incorporated
22 Wellington Road, Parktown, 2193
Registered office:
1st Floor, East Wing, 146a Kelvin Drive, Woodmead, Johannesburg, 2191
(PO Box 16376, Dowerglen, 1610)
Transfer Secretaries
Computershare Investor Services Proprietary Limited
Ground Floor, 70 Marshall Street, Johannesburg
Directors:
VM Mokholo* (Chairman), SP Tredoux* (Lead Independent Director), DR
Gammie*, AD Potgieter*, JC Herbst (CEO), D Deetlefs (Group Financial
Director)
*Non-executive
Date: 03/09/2014 02:53:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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