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Abridged Pre-Listing Statement Of Deneb Regarding The Listing Of Deneb On The Main Board Of The JSE Limited
DENEB INVESTMENTS LIMITED
(previously K2013091290 (Proprietary) Limited)
(Incorporated in the Republic of South Africa)
Registration number 2013/091290/06
Share Code: DNB
ISIN ZAE000197398
(“Deneb” or “the Company” or “the Group”)
ABRIDGED PRE-LISTING STATEMENT OF DENEB REGARDING THE LISTING OF
DENEB ON THE MAIN BOARD OF THE JSE LIMITED (“JSE”)
1. INTRODUCTION
The abridged pre-listing statement set out below (“Abridged Pre-
listing Statement”), is not an invitation to the public to
subscribe for shares in Deneb, but is issued in compliance with
the Listings Requirements of the JSE for the purpose of
providing information to the public and investors in respect of
Deneb.
2. OVERVIEW OF DENEB
Deneb is a wholly-owned subsidiary of Seardel Investment
Corporation Limited (“Seardel”).
Deneb is a diversified business that has four focus areas,
namely:
i. Properties – management of the Group’s property portfolio;
ii. Branded Product Distribution – sourcing and distribution of
branded products;
iii. Industrials – manufacturing of specialised industrial
products for the building, agriculture, mining and
automotive industries; and
iv. Textiles – manufacturing of quality fabric and household
textiles.
Deneb will be unbundled to Seardel shareholders (“Unbundling”)
and listed on the main board of the JSE on Monday, 1 December
2014 (“Listing”).
This will be a new listing by way of introduction of the
Company’s entire issued share capital. Deneb does not intend to
raise capital as part of the Listing.
3. RATIONALE FOR LISTING
Seardel has taken a strategic decision to be a focussed media
investment company allowing it to concentrate its resources on
growing Seardel’s media businesses while providing Seardel
shareholders direct access to the underlying media investments.
The Listing and Unbundling of Deneb will have the following
positive outcomes:
i. it will provide Seardel shareholders with the flexibility
to maintain, increase or decrease their investments in
Seardel’s media and non-media assets, based on their
specific investment preferences;
ii. it will enable Deneb to develop a shareholder base that has
an appetite for the non-media assets of Seardel, being
property, branded products and manufacturing assets;
iii. Deneb management will be allowed to pursue a focused
strategy without having to consider the impact on Seardel’s
media business; and
iv. the management of Deneb can be appropriately incentivised
given the characteristics of its industry.
4. KEY FINANCIAL INFORMATION
The information presented below is an extract of the
consolidated carve-out historical financial information of the
Group which is contained in Annexure 1 of the pre-listing
statement. The summary consists of key financial highlights of
the last three years, reflecting the financial performance of
the Group on a consolidated basis:
31 March 31 March 31 March
2014 2013 2012
Audited Reviewed Reviewed
R'000 R'000 R'000
Revenue 2 221 246 1 909 351 1 782 592
Cost of sales (1 669 585) (1 450 100) (1 350 476)
Gross profit 551 661 459 251 432 116
Other Income 58 478 52 602 68 229
Property valuations 20 726 (2 161) (8 372)
Selling and (231 993) (213 412) (207 200)
distribution expenses
Administrative and (227 358) (212 557) (240 920)
other expenses
Operating profit before 171 514 83 723 43 853
once off income and
impairments
Profit after taxation 133 973 66 489 207 132
Gross profit margin 24.8% 24.1% 24.2%
Operating profit margin 7.7% 4.4% 2.5%
(before once off income
and impairments)
Earnings per share (in 24.82 12.32 38.37
cents)
Headline earnings per 21.07 8.65 40.16
share (in cents)
Earnings /(loss) per 17.33 12.32 (3.31)
share adjusted for legal
settlement (in cents)
Headline earnings / 13.58 8.65 (1.52)
(loss) per share adjusted
for legal settlement (in
cents)
Net asset value per share 290 261 248
(in cents)
Tangible net asset value 285 260 247
per share (in cents)
5. STRATEGIES FOR GROWTH AND FUTURE PROSPECTS
5.1. As a diversified investment holding company, Deneb’s
underlying investments operate in various areas of the
South African economy. Activities include property
letting, branded product distribution and manufacturing of
chemical, agriculture, mining, textile, and automotive
products.
5.2. Although somewhat of a diversified portfolio, the
underlying businesses are independently managed with
specialist skills at an individual entity level. The
diversity allows the Group’s management greater
flexibility with regard to capital allocation. The
diversity, coupled with a stable and supportive major
shareholder, also allows the Company to take longer term
views on businesses operating in volatile environments.
This allows management to make incremental changes for
long term value enhancement.
5.3. Deneb’s intention is to focus on growing and developing
its existing investments whilst opportunistically looking
for new investment opportunities. The Group’s existing
investments comprise a range of businesses in various
stages of development including start-ups, turnarounds,
growth and mature businesses.
Potential future value will be created by:
i. Optimising the value of existing businesses;
ii. Organic expansion; and
iii. Growth through strategic acquisition.
6. LISTING ON JSE
The JSE has granted Deneb a listing by way of introduction of
all its issued ordinary shares on the JSE main board under the
abbreviated name “Deneb”, share code “DNB” and ISIN ZAE000197398
with effect from the commencement of trade on Monday, 1 December
2014. Deneb will be listed in the “Specialty Finance” sector.
7. SHARE CAPITAL
As at the Listing date, the total authorised share capital of
Deneb will comprise 10 000 000 000 ordinary no par value shares.
On the Listing date the issued share capital of Deneb will
consist of 557 892 317 ordinary no par value shares, while the
stated capital of Deneb will amount to approximately R1.62
billion. As at the Listing date, no shares will be held in
treasury.
On the Listing date all shares in issue will rank pari passu
with each other in all respects, including in respect of voting
rights and dividends.
8. DENEB DIRECTORS
The full names, ages, business addresses and capacities of the
directors of Deneb are provided below:
Full name Age Capacity Business Address
Mohamed Haroun 50 Lead 52 Intersite Avenue
Ahmed independent Umgeni Business Park
non-executive Durban
Director
John Anthony 64 Chairman and Suite 801
Copelyn non-executive 76 Regent Street
Director Sea Point
8005
David Duncan 59 Chief Operating 124 Escom Road
Officer New Germany
Durban
3610
Theventheran 44 Non-executive Suite 801
Govindsamy Director 76 Regent Street
Govender Sea Point
8005
Naziema Jappie 54 Independent 433 Musgrave Road
non-executive Durban
Director 4000
Amon Malencane 56 Executive 124 Escom Road
Ntuli Director New Germany
3610
Stuart 42 Chief Executive 1 Moorsom
Alexander Officer Avenue
Queen Epping Industria II
Cape Town
7460
Yunis Shaik 57 Non-executive Suite 801
Director 76 Regent Street
Sea Point
8005
Rachel Doreen 55 Non-executive Fernando Building
Watson Director Mark Street
Atlantis
7349
Gysbert Du Toit 40 Financial 1 Moorsom
Wege Director Avenue
Epping Industria II
Cape Town
7460
9. POSTING OF PRE-LISTING STATEMENT
Deneb will today post a pre-listing statement to Seardel
shareholders regarding the Listing and containing detailed
information regarding the Company (“Pre-listing Statement”).
The Pre-listing Statement will also be available on the
Company’s website at www.deneb.co.za and Seardel’s website at
www.seardel.co.za.
10. SALIENT DATES RELATING TO THE LISTING
The salient dates relating to the Listing and the Unbundling are
set out below:
Abridged Pre-listing Statement Friday, 21 November 2014
published on SENS
Pre-listing Statement posted to Friday, 21 November 2014
shareholders
Abridged Pre-listing Statement Monday, 24 November 2014
published in the press
Last day to trade for Seardel Friday, 28 November 2014
shareholders to be entitled to
participate in the Unbundling
Listing of Deneb Shares under share Monday, 1 December 2014
code “DNB” and ISIN ZAE000197398 on
the JSE expected at commencement of
trade on
Commencement of trading of Deneb Monday, 1 December 2014
shares
Seardel shares commence trading “ex” Monday, 1 December 2014
their entitlement to Deneb shares
Record date for Unbundling of Deneb Friday, 5 December 2014
Accounts at CSDPs/brokers updated in Monday, 8 December 2014
respect of dematerialised
shareholders
Share certificates posted to Monday, 8 December 2014
certificated shareholders by
registered post
11. COPIES OF THE PRE-LISTING STATEMENT
Copies of the Pre-listing Statement will be available for
inspection during normal office hours from Friday, 21 November
2014 until Monday, 1 December 2014 at the registered office of
Deneb at 1 Moorsom Avenue, Cnr Bofors Circle and Moorsom Avenue,
Epping Industria II, 7460, at the offices of Deneb’s appointed
transfer secretaries, Computershare, at Ground Floor, 70
Marshall Street, Johannesburg, 2001, and at the offices of
Deneb’s transaction adviser and sponsor, PSG Capital, at 1st
Floor, Ou Kollege, 35 Kerk Street, Stellenbosch, 7600 and 1st
Floor, Building 8, Inanda Greens Business Park, 54 Wierda Road
West, Wierda Valley, Sandton.
Cape Town
21 November 2014
Transaction adviser and sponsor
PSG Capital (Proprietary) Limited
Auditors and independent reporting accountants
KPMG Incorporated
Independent property valuers
David Newham Property Management Co
Date: 21/11/2014 08:00:00 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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