Wrap Text
Unaudited interim results for the six months ended 30 June 2014
Blackstar Group SE
Incorporated in Malta
Company number SE 4
Registered as an external company with limited liability in the
Republic of South Africa under registration number 2011/008274/10
Share code: BCK or BLCK
ISIN: MT0000620113
("Blackstar" or the "Company" or the "Group")
Unaudited interim results
For the six months ended 30 June 2014
HIGHLIGHTS
Growth in revenue, earnings, NAV and dividend
- Intrinsic net asset value of R1.4 billion (GBP75.1 million) as at 30 June 2014;
- External debt of R175.0 million (GBP9.8 million) raised to finance investment acquisition reduced to R77.6
million (GBP4.5 million) as at the date of this announcement;
- Interim dividend declared of 9 cents (0.49 pence) per ordinary share
Intrinsic Net Asset Value ("NAV") as at 30 June 2014
Unaudited Unaudited
30 June 2014 30 June 2014
R'000 GBP'000
Times Media Group Limited 895,474 49,267
Global Roofing Solutions (Pty) Limited 225,000 12,379
Robor (Pty) Limited 109,340 6,016
Stalcor (Pty) Limited 40,000 2,201
Blackstar Real Estate (Pty) Limited 38,228 2,103
Other listed 96,278 5,297
Other unlisted 42,851 2,358
Cash and cash equivalents 59,081 3,250
Net assets of consolidated companies (11,833) (651)
Access facility (128,606) (7,076)
Intrinsic NAV 1,365,813 75,144
Actual number of shares in issue net of treasury shares held (‘000) 80,755 80,755
Intrinsic NAV per share (in Rands/Pounds Sterling) 16.91 0.93
Ordinary share price on 30 June 2014 (in Rands/Pounds Sterling) 13.35 0.70
Ordinary share price discount to intrinsic NAV 21.05% 24.73%
Notes
1. The intrinsic NAV provides a measure of the underlying value of the Group's assets and does not indicate when the investments will
be realised, nor does it guarantee the value at which the investments will be realised.
2. For the purposes of determining the intrinsic values, listed investments on recognised stock exchanges are valued using quoted bid
prices and unlisted investments are shown at Directors' valuation, determined using the discounted cash flow methodology. This
methodology uses reasonable assumptions and estimations of cash flows and terminal values, and applies an appropriate risk-
adjusted discount rate that quantifies the investment's inherent risk to calculate a present value. Given the subjective nature of
valuations, the Group is cautious and conservative in determining the valuations and has a track record of selling its unlisted
investments in the ordinary course of business above the levels at which it values them.
3. All amounts have been translated using the closing exchange rates at 30 June 2014. The ZAR/GBP closing exchange rate at 30 June
2014 was 18.176.
4. Other unlisted include, amongst other things, the investments in Navigare Securities (Pty) Limited, Blackstar Fund Managers (Pty)
Limited and the loan to Robor (Pty) Limited.
COMMENTARY
Introduction
Blackstar is pleased to announce a strong set of results for the six months ended 30 June 2014. During the
period profit attributable to equity holders for the period amounted to R77.3 million (GBP4.3 million) and its
reported NAV attributable to equity holders increased by 4.3% in Rand terms from R1.3 billion at 31 December
2013 to R1.4 billion as at 30 June 2014 (in Sterling terms, due to a weakening Rand, NAV attributable to equity
holders only increased by 0.1%).
Blackstar increased its stake in Times Media Group Limited ("TMG") from 25.2% to 32.5% which was funded by
external debt of R175.0 million (GBP9.8 million). At the date of this announcement, this debt has been reduced
to an amount of R77.6 million (GBP4.5 million).
Both Global Roofing Solutions (Pty) Limited ("GRS") and Stalcor (Pty) Limited ("Stalcor") have performed
exceptionally well in the last 6 months. Compared to the same six month period last year, GRS's EBITDA
increased by 31.4% to R22.7 million (GBP1.2 million) and profit after tax has increased by 66.0% in Rand terms to
R12.5 million (GBP0.7 million). In Rand terms, Stalcor has grown turnover by 28.4% and EBITDA by 106.2% when
compared to the comparative period. A merger of these two steel businesses was also implemented which
will result in improved efficiencies and increased profitability going forward.
The intrinsic net asset value ("NAV") table is a useful tool in analysing the most recent inherent value of each
investment held. At 30 June 2014, the intrinsic NAV amounted to R1.4 billion (GBP75.1 million).
Philosophy
The cornerstone of Blackstar's philosophy is based on a focus on return on capital employed, rational
allocation of capital and a tightly controlled cost base. We are entrepreneurial and rapidly responsive in
nature. We work hard on instilling this philosophy into our investments and subsidiaries and strive to work
with like-minded management. This approach has lead to the success in TMG, GRS and Stalcor over the last
year.
Currency
The South African Rand continued to weaken in the period with the closing ZAR/GBP exchange rate increasing
to 18.176 at 30 June 2014 compared to 15.057 at 30 June 2013 and, to 17.431 at 31 December 2013. As the
majority of the Group's assets are based in Rands, once again, this has had a significant impact on the Pounds
Sterling reported results of the Group. Blackstar continues to manage its currency risk by holding the Group's
cash resources in Pounds Sterling and US Dollars.
Investment and Market Review
Investments
Times Media Group Limited
Blackstar increased its stake in TMG from 25.2% to 32.5% during the reporting period and at 30 June 2014
Blackstar's investment in TMG was valued at R895.5 million (GBP49.3 million) based on a closing bid share price
on 30 June 2014 of R21.80 per share. TMG released their year end results on 23 September 2014 which
included the following highlights:
- Final dividend declared of 35 cents per ordinary share;
- Profit from continuing operations before exceptional items 21% up on prior year;
- Operating costs from continuing operations down 16%; and
- Further R406 million of acquisition finance repaid - term debt reduced to R292 million.
TMG successfully expanded its reach into East Africa during the first half of 2014 and is continuously
investigating new opportunities on the African continent. For full details of their performance, refer to TMG's
website www.timesmedia.co.za.
Steel Investments
As a result of GRS and Stalcor's strong performance over the past six months, their combined fair value was
increased by R62.5 million (GBP3.5 million) to R265.0 million (GBP14.6 million) at 30 June 2014. We still believe that
its conservatively valued.
In the coming year, Stalcor management intend on taking advantage of the synergies that exist between it and
GRS particularly in its expansion into African countries, improved access to affordable working capital funding
and joint product procurement. The combined operations are expected to result in improved profitability as a
result of a shared management team, cross-selling opportunities, and reduced operational and financing costs.
Blackstar's net investment in Robor (Pty) Limited ("Robor") was valued at R109.3 million (GBP6.0 million) as at 30
June 2014.
Robor completed a second round Management Buy In ("MBI") through the sale and lease back of its main
property in Elandsfontein, Johannesburg. The business did not take on any additional debt for the MBI as
management believe that they can achieve operational efficiencies equal to or greater than the rental charge
incurred following the property sale. This transaction became effective post 30 June 2014 and, on
conclusion, Blackstar realised R59.4 million (GBP3.4 million) of its total investment in Robor and increased its
stake from 10.7% to 17.5%. In addition to this, in July 2014, Robor repaid the R22.0 million (GBP1.2 million)
Blackstar shareholder loan. Robor is a strong business with a positive outlook for the year, with the intention
of further developing its footprint in the African market.
Property
At 30 June 2014, Blackstar valued its property investments (net of financing) at R38.2 million (GBP2.1 million) and
the gross fair value of properties before debt, current assets and non-controlling interests amounted to
R127.1 million (GBP7.0 million).
The purchase of the new property acquired for R27.7 million (GBP1.5 million) is anticipated to be finalised in
October 2014 and has been largely funded by third party debt. The property is located in a good office and
retail node of Cape Town and Blackstar Real Estate (Pty) Limited ("BRE") has secured a long term lease with a
multi-national tenant.
In October 2014, BRE will commence development of light industrial warehousing on the land owned in Imbonini,
the cost of which will be funded by third party debt. The development is expected to be completed in May 2015 after
which it will be let out to third parties. This is prime real estate as it is situated near to King Shaka (Durban)
airport and thus capital appreciation is expected on this development.
Funds
The Group's investment in the Blackstar Special Opportunities Fund ("BSOF") including its SA Alpha Blackstar
Special Opportunities US Dollar Fund was valued at R67.4 million (GBP3.7 million) at 30 June 2014.
BSOF has gained momentum with two big inflows during the current reporting period thereby doubling the
size of the fund to R250.0 million (GBP13.8 million), despite the fact that market conditions have been challenging
during the period. As a result we believe the fund is well placed to pursue future opportunities.
In respect of the Blackstar Global Opportunities Fund ("BGOF"), due to the lack of scale and ability to raise
suitable capital to run the fund, a decision was taken during the period to end Blackstar's provision of advisory
services to the fund. At 30 June 2014, the Group still had an investment of R8.0 million (GBP0.4 million) in BGOF,
which has subsequently been realised.
Financial Review
In 2013, Blackstar early adopted IFRS 10, IFRS 12, and the revised version of IAS 27 including all amendments
to Investment Entities. As a result, Blackstar measures investments including certain subsidiaries and
associates at fair value through profit and loss as opposed to consolidating and equity accounting as was done
previously. The following subsidiaries, which provide services that relate to the Company's own investment
activities, continue to be consolidated: Blackstar Cyprus (Investors) Limited ("Blackstar Cyprus"); Blackstar
Group (Pty) Limited ("Blackstar SA"); and Blackstar Fund Managers (Pty) Limited ("BFM"). The December 2013
year end results were reported under these new accounting policies and the restated opening balance sheet as
at 1 January 2012 can be found in the Blackstar Annual Report and Accounts 2013. The 30 June 2013 results
have been restated accordingly (refer note 2).
Total equity attributable to equity holders of the parent amounted to R1.4 billion as at 30 June 2014, a 4.3%,
or R56.5 million, increase since 31 December 2013. The same figures in Pounds Sterling reflect a decline of
0.1%, or GBP0.1 million, to GBP74.8 million at 30 June 2014 which can be attributed to the fact that the Rand
weakened during the reporting period as has been previously mentioned.
Total assets increased from R1.3 billion as at 31 December 2013 to R1.5 billion as at 30 June 2014 mainly as a
result of the new investment in TMG and growth in this underlying investment as well as an increase in the fair
value of the combined GRS/Stalcor business during the current period. In Pounds Sterling, an increase in total
assets of only GBP7.1 million to GBP82.8 million has been recorded due to the weakening of the Rand against the
Pound Sterling.
An access facility was opened with Rand Merchant Bank to finance R175.0 million (GBP9.8 million) of the TMG
share purchases made in February 2014. By 30 June 2014, Blackstar had already reduced the outstanding debt
to R128.6 million (GBP7.1 million) and, as at the date of this announcement, the debt had been reduced even
further to an amount of R77.6 million (GBP4.5 million). The debt repayments were largely funded by the
proceeds received from Robor. The debt is interest bearing with interest repayable quarterly and a bullet
capital repayment in 2017.
During the period, cash and cash equivalents declined by R63.5 million (GBP3.8 million) during the first half
of 2014 to an amount of R59.4 million (GBP3.3 million). Significant cash flow movements during the year
included R205.3 million (GBP11.5 million) cash outflow as a result of investment activity; R54.6 million (GBP3.1
million) cash inflow on realisation of investments including repayments of loan receivables; R128.6 million
(GBP7.1 million) net cash inflow from the access facility obtained to finance the acquisition of TMG shares; R20.5
million (GBP1.1 million) cash out flow on treasury share purchases; and R11.2 million (GBP0.6 million) paid out in
cash dividends to shareholders.
Income for the six months ended 30 June 2014 amounted to R116.1 million (GBP6.5 million) which includes the
following: R13.6 million (GBP0.7 million) generated from investments in the form of performance and monitoring
fees, dividends and interest income; R101.1 million (GBP5.7 million) net gains on investments; and R1.4 million
(GBP0.1 million) net foreign exchange gains.
The net gains on investments of R101.1 million (GBP5.7 million) mainly comprises fair value gains of R54.5 million
(GBP3.1 million) recognised on the net investment in GRS, R8.0 million (GBP0.4 million) on the net investment in
Stalcor and unrealised fair value gains of R41.6 million (GBP2.3 million) on the TMG investment as a result of an
increase in the share price over the reporting period.
For the current six month reporting period, operational costs to run the daily Blackstar operations (before the
long term Management Incentive Scheme) amounted to 0.8% of the reported NAV at 30 June 2014.
Operational costs are closely monitored and action is taken wherever possible to cut any excess expenditure in
order to improve the profitability of the Group.
The shareholder approved long term Management Incentive Scheme, calculates an incentive pool (which is
split 50/50 between Blackstar shares and cash) based on the growth in the intrinsic NAV of the Company. The
award is performance based and no award is made if there is a decline in the value of the NAV per share.
Senior management are now largely paid on performance via the long term Management Incentive Scheme.
Net finance costs increased by R4.2 million (GBP0.2 million) when compared to the prior six month reporting
period mainly as a result of the interest cost arising on the access facility utilised to acquire further TMG
shares. The finance costs for the second half of the 2014 year will reduce due to the fact that a significant
amount of the debt has now been settled.
The Board declared a final gross dividend of 14 South African cents (0.96 cents in Euros and 0.80 pence in
Pounds Sterling) per ordinary share for the year ended 31 December 2013 which was paid on 30 May 2014.
Share buy backs and treasury
During the current reporting period, Blackstar repurchased a total of 1,735,000 Blackstar shares off the open
market at an average price per share of R11.79 (GBP0.67) and a total cost of R20.4 million (GBP1.2 million).
These shares are held in treasury. At 30 June 2014, Blackstar held 2,194,730 treasury shares, representing 2.7% of
the issued share capital.
Interim Dividend
As a result of the continued strong performance of the Company, the Board has resolved to declare an interim
gross dividend of 9 South African cents (0.63 cents in Euros and 0.49 pence in Pounds Sterling) per ordinary
share for the six months ended 30 June 2014. The exchange rates have been fixed for the calculation of the
Euro and Pounds Sterling equivalents based on the closing exchange rates on Tuesday, 23 September 2014 of
EUR 1 = ZAR 14.320 and GBP 1 = ZAR 18.222. The Board recognises that regular dividends are an important part
of shareholder wealth creation.
The interim dividend will be paid in accordance with the salient dates and times set out below:
Last day to trade on the South African register Friday, 10 October 2014
Trading ex-dividend commences on the South African register Monday, 13 October 2014
Trading ex-dividend commences on the UK register Thursday, 16 October 2014
Record date for shareholders recorded on the UK and South African registers Friday, 17 October 2014
Date of payment Monday, 10 November 2014
Share certificates may not be dematerialised or rematerialised between Monday, 13 October 2014 and Friday,
17 October 2014, both days inclusive, and transfers between the UK register and the South African register
may not take place during that period.
Dividend tax will be withheld from the amount of the gross dividend of 9 South African cents per share paid
to South African shareholders at the rate of 15% unless a shareholder qualifies for exemption. After the
dividend tax has been withheld, the net dividend will be 7.65 South African cents per share. There are no other
taxes (foreign or otherwise) to be withheld from the dividend. The Company had a total of 82,088,500 shares
in issue (which includes 1,333,876 shares held in treasury) at the date on which the dividend was announced,
26 September 2014. The dividend will be distributed by Blackstar Group SE (Malta tax registration number
995944033) and is regarded as a foreign dividend. There are no Secondary Tax on Companies ("STC") credits
available for use.
Outlook
The Blackstar balance sheet remains strong with a balanced investment portfolio, and the Group continues to
generate good revenue and satisfying results. The cost base has been considerably reduced in both the South
African and Maltese operations and any additional cash generated from investments will continue to be
utilised to repay the financing.
Blackstar remains focussed on identifying potential investments which, consistent with its investment policy,
will increase its income streams and facilitate the growth of the balance sheet.
Andrew Bonamour
Non-executive Director
26 September 2014
Condensed consolidated statement of financial position
for the six months ended 30 June 2014
*Restated *Restated
Audited Unaudited Unaudited Unaudited Unaudited Audited
31 December 30 June 30 June 30 June 30 June 31 December
2013 2013 2014 2014 2013 2013
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
Assets
875 875 875 Goodwill 48 58 51
1,524 1,810 710 Deferred tax assets 39 120 87
1,364 1,355 1,280 Equipment 70 90 78
Financial assets at fair value through
1,180,472 1,092,307 1,410,091 profit and loss 77,580 72,547 67,721
312,014 269,989 366,081 Net investments in subsidiaries 20,141 17,932 17,899
677,138 443,557 900,474 Net investments in associates 49,542 29,459 38,846
191,320 378,761 143,536 Financial assets held for trading 7,897 25,156 10,976
Investments classified as loans and
8,174 1,540 31,381 receivables 1,727 102 469
188 156 160 Current tax assets 9 10 12
4,065 5,877 1,339 Trade and other receivables 73 391 233
122,893 98,938 59,356 Cash and cash equivalents 3,266 6,571 7,050
1,319,555 1,202,858 1,505,192 Total assets 82,812 79,889 75,701
Liabilities
(60) - (183) Deferred tax liabilities (10) - (3)
(201) (225) (167) Other financial liabilities (9) (15) (12)
- (83) (128,606) Borrowings (7,076) (6) -
(469) (967) (684) Current tax liabilities (38) (64) (28)
(14,890) (10,370) (15,550) Trade and other payables (856) (693) (854)
(4) - - Bank overdrafts - - -
(15,624) (11,645) (145,190) Total liabilities (7,989) (778) (897)
1,303,931 1,191,213 1,360,002 Total net assets 74,823 79,111 74,804
Equity
574,672 574,672 574,672 Share capital 55,347 55,347 55,347
21,468 21,677 21,506 Share premium 1,932 1,944 1,930
52,173 52,173 52,173 Capital redemption reserve 4,599 4,599 4,599
(18,848) (18,166) (25,738) Treasury shares reserve (1,634) (1,532) (1,248)
- - - Foreign currency translation reserve (29,457) (13,059) (26,331)
674,101 560,904 737,476 Retained earnings 44,041 31,815 40,485
Total equity attributable to equity
1,303,566 1,191,260 1,360,089 holders 74,828 79,114 74,782
365 (47) (87) Non-controlling interests (5) (3) 22
1,303,931 1,191,213 1,360,002 Total equity 74,823 79,111 74,804
Net asset value per share (in
1,620 1,479 1,702 cents/pence) 94 98 93
Actual number of shares in issue (net of
80,447 80,534 79,894 treasury shares, in thousands) 79,894 80,534 80,447
*Comparatives have been restated for changes in the accounting policy - refer to note 2.
Condensed consolidated statement of comprehensive income
for the six months ended 30 June 2014
*Restated *Restated
Audited Unaudited Unaudited Unaudited Unaudited Audited
31 December 30 June 30 June 30 June 30 June 31 December
2013 2013 2014 2014 2013 2013
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
261,025 107,377 116,074 Income 6,506 7,552 17,287
(76,541) (40,174) (34,425) Operating expenses (1,929) (2,826) (5,070)
184,484 67,203 81,649 Operating profit 4,577 4,726 12,217
(208) 821 (3,415) Net finance income/(costs) (191) 58 (14)
3,156 980 713 Finance income 40 69 209
(3,364) (159) (4,128) Finance costs (231) (11) (223)
184,276 68,024 78,234 Profit before taxation 4,386 4,784 12,203
222 1,005 (1,370) Taxation (77) 71 15
184,498 69,029 76,864 Profit for the period 4,309 4,855 12,218
Other comprehensive income/(loss) –
items that may subsequently be
reclassified to profit and loss:
Currency translation differences on the
translation of Rand denominated Group
- - - entities (3,126) (7,023) (20,297)
Release of foreign currency translation
- - - reserve - - 1,425
Total other comprehensive
income/(loss) recognised directly in
- - - equity (3,126) (7,023) (18,872)
Total comprehensive income/(loss) for
184,498 69,029 76,864 the period 1,183 (2,168) (6,654)
Profit for the period attributable to:
183,857 68,800 77,341 Equity holders of the parent 4,337 4,839 12,175
641 229 (477) Non-controlling interests (28) 16 43
184,498 69,029 76,864 4,309 4,855 12,218
Total comprehensive income/(loss)
attributable to:
183,857 68,800 77,341 Equity holders of the parent 1,211 (2,186) (6,697)
641 229 (477) Non-controlling interests (28) 18 43
184,498 69,029 76,864 1,183 (2,168) (6,654)
Basic and diluted earnings per ordinary
share attributable to equity holders (in
231.34 88.19 95.91 cents/pence) 5.38 6.20 15.32
*Comparatives have been restated for changes in the accounting policy - refer to note 2.
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2014
Share Capital redemption Treasury shares Retained Attributable to equity Non-controlling
Share capital premium reserve reserve earnings holders interests Total equity
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Balance as at 1 January 2013 574,671 22,125 52,173 - 495,288 1,144,257 27,861 1,172,118
Change in accounting policies * - - - - 4,668 4,668 (28,155) (23,487)
Balance as at 1 January 2013 (*restated) 574,671 22,125 52,173 - 499,956 1,148,925 (294) 1,148,631
Total comprehensive income for the period - - - - 68,800 68,800 229 69,029
Income for the period - - - - 68,800 68,800 229 69,029
Other comprehensive income for the period - - - - - - - -
Purchase of treasury shares - - - (80,014) - (80,014) - (80,014)
Effect of share split and consolidation 1 (1) - (2,499) - (2,499) - (2,499)
Treasury shares issued to acquire New Bond Capital
Limited - (447) - 64,347 - 63,900 - 63,900
Reduction in non-controlling interests arising on
acquisition of further shares in Blackstar Fund
Managers (Pty) Limited - - - - (123) (123) 18 (105)
Equity settled share based payment - - - - 6,600 6,600 - 6,600
Dividend paid - - - - (14,329) (14,329) - (14,329)
Balance as at 30 June 2013 (*restated) 574,672 21,677 52,173 (18,166) 560,904 1,191,260 (47) 1,191,213
Total comprehensive income for the period - - - - 115,057 115,057 412 115,469
Income for the period - - - - 115,057 115,057 412 115,469
Other comprehensive income for the period - - - - - - - -
Purchase of treasury shares - - - (9,896) - (9,896) - (9,896)
Equity settled share based payment - - - - 13,687 13,687 - 13,687
Treasury shares issued during the year as part of the
long term Management Incentive Scheme - (209) - 9,214 (9,005) - - -
Dividend paid - - - - (6,542) (6,542) - (6,542)
Balance as at 31 December 2013 574,672 21,468 52,173 (18,848) 674,101 1,303,566 365 1,303,931
Total comprehensive income/(loss) for the period - - - - 77,341 77,341 (477) 76,864
Income/(loss) for the period - - - - 77,341 77,341 (477) 76,864
Other comprehensive income for the period - - - - - - - -
Purchase of treasury shares - - - (20,514) - (20,514) - (20,514)
Reduction in non-controlling interests arising on
acquisition of further shares in Blackstar Fund
Managers (Pty) Limited - - - - (176) (176) 25 (151)
Equity settled share based payment - - - - 11,068 11,068 - 11,068
Treasury shares issued during the year as part of the
long term Management Incentive Scheme - 38 - 13,624 (13,662) - - -
Dividend paid - - - - (11,196) (11,196) - (11,196)
Balance as at 30 June 2014 574,672 21,506 52,173 (25,738) 737,476 1,360,089 (87) 1,360,002
*Comparatives have been restated for changes in the accounting policy - refer to note 2.
Condensed consolidated statement of changes in equity
for the six months ended 30 June 2014
Capital Treasury Foreign currency
redemption shares translation reserve Retained Attributable to Non-controlling
Share capital Share premium reserve reserve (FCTR) earnings equity holders interests Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1 January 2013 55,347 1,974 4,599 - (2,082) 23,236 83,074 2,023 85,097
Change in accounting policies * - - - - (3,952) 4,293 341 (2,045) (1,704)
Balance as at 1 January 2013 (*restated) 55,347 1,974 4,599 - (6,034) 27,529 83,415 (22) 83,393
Total comprehensive income/(loss) for the
period - - - - (7,025) 4,839 (2,186) 18 (2,168)
Income for the period - - - - - 4,839 4,839 16 4,855
Other comprehensive income/(loss) for the
period - - - - (7,025) - (7,025) 2 (7,023)
Purchase of treasury shares - - - (5,628) - - (5,628) - (5,628)
Effect of share split and consolidation - - - (166) - - (166) - (166)
Treasury shares issued to acquire New Bond
Capital Limited - (30) - 4,262 - - 4,232 - 4,232
Reduction in non-controlling interests arising on
acquisition of further shares in Blackstar Fund
Managers (Pty) Limited - - - - - (9) (9) 1 (8)
Equity settled share based payment - - - - - 464 464 - 464
Dividend paid - - - - - (1,008) (1,008) - (1,008)
Balance as at 30 June 2013 (*restated) 55,347 1,944 4,599 (1,532) (13,059) 31,815 79,114 (3) 79,111
Total comprehensive income/(loss) for the
period - - - - (13,272) 8,761 (4,511) 25 (4,486)
Income for the period - - - - - 7,336 7,336 27 7,363
Other comprehensive income/(loss) for the
period - - - - (13,272) 1,425 (11,847) (2) (11,849)
Purchase of treasury shares - - - (327) - - (327) - (327)
Equity settled share based payment - - - - - 880 880 - 880
Treasury shares issued during the year as part
of the long term Management Incentive
Scheme - (14) - 611 - (597) - - -
Dividend paid - - - - - (374) (374) - (374)
Balance as at 31 December 2013 55,347 1,930 4,599 (1,248) (26,331) 40,485 74,782 22 74,804
Total comprehensive income/(loss) for the
period - - - - (3,126) 4,337 1,211 (28) 1,183
Income/(loss) for the period - - - - - 4,337 4,337 (28) 4,309
Other comprehensive loss for the period - - - - (3,126) - (3,126) - (3,126)
Purchase of treasury shares - - - (1,149) - - (1,149) - (1,149)
Reduction in non-controlling interests arising on
acquisition of further shares in Blackstar Fund
Managers (Pty) Limited - - - - - (10) (10) 1 (9)
Equity settled share based payment - - - - - 621 621 - 621
Treasury shares issued during the year as part
of the long term Management Incentive
Scheme - 2 - 763 - (765) - - -
Dividend paid - - - - - (627) (627) - (627)
Balance as at 30 June 2014 55,347 1,932 4,599 (1,634) (29,457) 44,041 74,828 (5) 74,823
*Comparatives have been restated for changes in the acco ounting policy - refer to note 2.
Condensed consolidated statement of cash flows
for the six months ended 30 June 2014
*Restated *Restated
Audited Unaudited Unaudited Unaudited Unaudited Audited
31 December 30 June 30 June 30 June 30 June 31 December
2013 2013 2014 2014 2013 2013
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
(103,859) (144,264) (160,257) Cash absorbed by operating activities (8,980) (10,146) (6,731)
(532) (599) (171) Cash absorbed by investing activities (9) (43) (37)
Cash generated/(absorbed) by financing
(113,407) (96,886) 96,895 activities 5,430 (6,815) (7,511)
Net decrease in cash and cash
(217,798) (241,749) (63,533) equivalents (3,559) (17,004) (14,279)
Cash and cash equivalents at the
340,687 340,687 122,889 beginning of the period 7,050 24,735 24,735
Exchange losses on cash and cash
- - - equivalents (225) (1,160) (3,406)
Cash and cash equivalents at the end of
122,889 98,938 59,356 the period 3,266 6,571 7,050
*Comparatives have been restated for changes in the accounting policy - refer to note 2.
Notes to the condensed unaudited interim financial statements
for the six months ended 30 June 2014
1. Basis of preparation
These condensed financial statements of the Group are prepared in accordance with the recognition and measurement
principles of International Financial Reporting Standards ("IFRSs") published by the International Accounting Standards
Board ("IASB") as endorsed for use by the European Union. They are prepared on the going concern principle, using the
historical cost basis and the accounting policies which are expected to be applied in the preparation of the Group's annual
financial statements for the year ending 31 December 2014. The Group has chosen not to adopt IAS 34 Interim Financial
Statements in preparing the consolidated interim financial statements.
The accounting policies and methods of computation are consistent with those applied in the annual financial statements for
the year ended 31 December 2013.
The financial information in this half-yearly report is unaudited and does not constitute statutory accounts for the purposes
of the Maltese Companies Act, 1985. The half-yearly report should be read in conjunction with the Group's statutory
accounts for the year ended 31 December 2013, which are prepared under IFRS and upon which an unqualified auditors'
report was given. The statutory accounts as at 31 December 2013 are available from the Company's website,
www.blackstar.eu, or by writing to the Company Secretary.
The functional currency of the Company is the South African Rand, being the currency of the primary economic environment
in which the Company and its subsidiaries operate. Blackstar is dual listed with a primary listing on the Alternative
Investment Market of the London Stock Exchange ("AIM") and a secondary listing on the AltX of the JSE Limited ("JSE") in
South Africa. As a result, Blackstar has two presentational currencies being South African Rand ("Rands") and Pounds
Sterling ("Pounds").
2. Changes in accounting policies
The accounting policies and methods of computation are consistent with those applied in the annual financial statements for
the year ended 31 December 2013. For the financial year ended 31 December 2013, the Group adopted the following new
and revised accounting standards for the first time:
- IAS 1 Presentation of Financial Statements (revised)
- IFRS 10 Consolidated Financial Statements (early adoption)
- IFRS 11 Joint Arrangements (early adoption)
- IFRS 12 Disclosure of Interest in Other Entities (early adoption)
- IFRS 13 Fair Value Measurement
- IAS 27 Separate Financial Instruments (revised – early adoption)
- IAS 28 Accounting for Investments in Associates (revised – early adoption)
- Investment Entities (amendments to IFRS 10, IFRS 12 and the revised version of IAS 27 - early adoption)
Of the above standards, only IFRS 10 (including the investment entities amendments) made a significant impact to the
financial performance and position of the Group as its adoption required the restatement of results previously presented.
IFRS 10 includes an exception from consolidation for entities, which meet the definition of an investment entity, and
requires such entities to recognise all investments at fair value through profit and loss. The adoption of IFRS 10 has resulted
in the Group treating certain investments in subsidiaries and associates as investments held at fair value through profit and
loss. Subsidiaries which provide services that relate only to the Company's own investment activities are continued to be
consolidated.
Under the transitional provisions of IFRS 10, this change in accounting policies was required to be accounted for
retrospectively and thus the comparative figures for the six months ended 30 June 2013 have been restated.
A summary of the impact of these changes on the consolidated statement of financial position as at 30 June 2013, and the
impact on the consolidated statement of comprehensive income for the six months ended 30 June 2013 are shown
below. Further detail is provided within the notes to the Group's consolidated financial statements for the year ended 31
December 2013 which are available on the Company website www.blackstar.eu.
Impact on the consolidated statement of financial position
Increase/(decrease) to net assets:
Unaudited Unaudited
30 June 30 June
2013 2013
R'000 GBP'000
(381,959) Total assets (25,369)
423,410 Total liabilities 28,120
41,451 Total net assets 2,751
41,451 Total equity 2,751
Impact on the consolidated statement of comprehensive income
Increase/(decrease)to profits:
Unaudited Unaudited
30 June 30 June
2013 2013
R'000 GBP'000
65,677 Operating profit 4,779
9,094 Net finance costs 641
(9,571) Share of profit from associate (696)
65,200 Profit before taxation 4,724
(1,738) Taxation (98)
63,462 Profit from continuing operations 4,626
315 Profit from discontinued operations, net of taxation 22
63,777 Profit for the period 4,648
Profit for the period attributable to:
68,528 Equity holders of the parent 4,987
(4,751) Non-controlling interests (339)
63,777 4,648
87.84 Basic earnings per ordinary share attributable to equity holders (in cents/pence) 6.39
3. Basic and diluted earnings and headline earnings per share
*Restated *Restated
Audited Unaudited Unaudited Unaudited Unaudited Audited
31 December 30 June 30 June 30 June 30 June 31 December
2013 2013 2014 2014 2013 2013
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
Net profit for the period attributable to equity
183,857 68,800 77,341 holders of the parent 4,337 4,839 12,175
- - - Headline earning adjustments - - -
183,857 68,800 77,341 Headline earnings 4,337 4,839 12,175
Weighted average number of shares (net of
79,476 78,012 80,636 treasury shares, in thousands) 80,636 78,012 79,476
Basic and diluted earnings per ordinary share
attributable to equity holders (in
231.34 88.19 95.91 cents/pence) 5.38 6.20 15.32
Basic and diluted headline earnings per
ordinary share attributable to equity holders
231.34 88.19 95.91 (in cents/pence) ^ 5.38 6.20 15.32
*Comparatives have been restated for changes in the accounting policy - refer to note 2.
^ Disclosure of headline earnings has been provided in accordance with the JSE Listings Requirements.
26 September 2014
For further information, please contact:
Blackstar Group SE Leanna Isaac +356 2137 3360
Liberum Capital Limited Chris Bowman / Christopher Britton +44 (0) 20 3100 2222
PSG Capital (Pty) Limited David Tosi / Willie Honeyball +27(0) 21 887 9602
Date: 26/09/2014 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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