Wrap Text
Reviewed preliminary condensed consolidated financial results for the year ended 31 December 2014
Brimstone Investment Corporation Limited
ISIN Number: ZAE000015277
Share Code: BRT
ISIN Number: ZAE000015285
Share Code: BRN
Company Registration Number: 1995/010442/06 (Incorporated in the Republic of
South Africa) ("Brimstone" or "the Company")
Reviewed preliminary condensed consolidated financial results for the year
ended 31 December 2014
COMMENTARY
Total Assets increased by R1.1 billion to R7.9 billion at 31 December 2014.
Intrinsic Net Asset Value (INAV) increased 16.1% from R4.19 billion in the
previous year to R4.86 billion. Investments in the food sector comprise 40%
of intrinsic gross asset value, followed by healthcare at 29%, financial
services at 11%, infrastructure at 10%, and restricted BEE structures at 7%.
The balance comprises smaller investments across various sectors. The
Company's shares performed well during the year with the Ordinary share
price growing by 21.4% and the "N" Ordinary share price growing by 17.9%
over the year.
Profit for the year under review decreased as a result of losses incurred by
subsidiary Lion of Africa Insurance Company, lower fair value gains on
underlying investments, reduced equity accounted earnings, and an impairment
of an investment in an associate.
The Company declared a final dividend of 30 cents per share, and a special
dividend of 20 cents per share.
Brimstone Portfolio
SUBSIDIARIES
Sea Harvest (58.44%)
Catches for 2014 were 18% ahead of prior year, driven by improved vessel
utilisation and increased catch rates. Both the wet fish and freezer fleets
performed well during the year. Sales were strong both locally and
internationally with continued demand for hake. This resulted in reasonable
price increases being achieved in the local market and prices being
maintained in the low inflationary export markets, which further benefited
from favourable exchange rates. Revenue was 10% higher than last year. Sea
Harvest maintained its position as a market leader in the South African
frozen fish retail segment. Operating profit before interest and exceptional
items increased by 58% to R109 million. Sea Harvest expanded its fleet with
the acquisition of a new vessel, Harvest Atlantic Peace at a cost of R130
million.
Lion of Africa Holdings (100%)
Lion of Africa experienced another year of disappointing results, reporting
a loss from operations of R180 million which included a charge of R86
million arising from the annual impairment review of reinsurance assets. The
investment has been written down to R20 million from R140 million at the end
of the previous year. Remedial action has commenced with a strategic and
operational review of this investment.
House of Monatic (100%)
House of Monatic's turnover increased to R184 million while its operating
profit decreased by 31% to R7.2 million. House of Monatic is continuing to
increase its share of the corporate wear market as well as expanding its C2
retail chain. Employment levels remained stable throughout the year.
ASSOCIATES AND JOINT VENTURES
Oceana (16.81%)
Oceana's share price closed at R104.86 per share, up from R82.00 per share
at 31 December 2013. Brimstone received dividends of R75.8 million from
Oceana during the year under review and recorded R29.8 million in equity
accounted earnings. Oceana made a distribution to its staff share trust
during the year. Brimstone's share amounting to R58.9 million was charged
directly to Retained Earnings.
Aon Re Africa (18%)
Aon Re Africa trading as Aon Benfield, is the leading reinsurance broker
licensed and operating in South Africa and the rest of the continent. Aon Re
Africa successfully secured new business across all divisions with
impressive organic growth specifically in Africa. Brimstone received a
dividend of R7.5 million from Aon Re Africa and recorded R0.6 million in
equity accounted earnings during the year under review.
The Scientific Group (28.2%)
Brimstone, as part of the consortium that owns The Scientific Group, has
entered into an agreement with Ascendis Health Limited in October 2014 for
the disposal of 100% of the diagnostics business of The Scientific Group,
being the majority of The Scientific Group's business. The effects of this
disposal will be accounted for by Brimstone in 2015 as certain conditions
precedent are still outstanding. The consortium will retain the medical
business of The Scientific Group. Brimstone recorded R2.9 million in equity
accounted earnings from The Scientific Group for the year.
Afena Capital (28.79%)
Afena Capital is an investment management firm that offers specialist equity
and balanced portfolios serving the Southern African institutional market.
Brimstone received a dividend of R2.6 million from Afena during the year
under review which exceeded equity accounted earnings from Afena by
R0.8 million. Following the loss of certain assets under management,
Brimstone has impaired its investment in Afena by R28.3 million to
R21 million.
Grindrod (4.97%)
Grindrod has evolved from being primarily focused on shipping into an
operationally integrated company providing end-to-end solutions for the
movement of cargo by road, rail and sea using specialised assets and
infrastructure focused on dry-bulk and liquid-bulk commodities, vehicles and
containers.
In July 2014 Brimstone, via a consortium of investors including Calulo
Investments Proprietary Limited and Solethu Investments Proprietary Limited,
subscribed for 64 million Grindrod ordinary shares at a price of R25.00 per
share, resulting in the Consortium SPV having a shareholding in Grindrod of
approximately 8.4%. Brimstone has a shareholding of 59.2% in the Consortium
SPV, resulting in an effective indirect shareholding in Grindrod of 4.97%.
Due to shared control in the structure, Brimstone accounts for its share of
the results in the Consortium SPV as a joint venture.
Brimstone's share of the consortium losses amounted to R96 million.
Grindrod's share price closed at R22.40 at year end.
Brimstone's share of the losses of the joint venture comprise the following:
Reviewed
Year ended
31 December
2014
R'000
Fair value losses (98 526)
Net finance costs (17 296)
Other net income 1 525
Taxation 18 342
Equity accounted loss (95 955)
INVESTMENTS
Life Healthcare (5.04%)
Life Healthcare's share price closed at R42.76 per share, up from R41.86 per
share at 31 December 2013. The investment was revalued upwards by R47.3
million. Brimstone received dividends amounting to R126.5 million during the
year, which included a special dividend of R52.5 million. Brimstone remains
one of the largest shareholders in Life Healthcare which will continue to
focus on its growth objectives in South Africa, India and Poland.
MTN Zakhele (2.68%)
MTN Zakhele is a Black owned investment company that holds approximately 4%
of MTN Group. The success of MTN Zakhele depends on the share price
performance of MTN Group as well as the dividends paid by MTN Group as MTN
Zakhele uses the dividends received to reduce its funding obligations.
During 2014, MTN Zakhele shares started trading over the counter between
Black individuals and groups. Brimstone acquired a further 1.16 million MTN
Zakhele shares during 2014 at an average price of R99.10 per share. At year
end Brimstone held 2.2 million MTN Zakhele shares, which closed at R108.50
per share. The investment was revalued downwards by a net R11.7 million.
Previously it was valued as an option which was priced at a premium to the
current traded value.
Nedbank (0.46%)
Brimstone's rights to Nedbank shares, accounted for as options, have been
revalued at year end based on the estimated number of unencumbered shares
Brimstone will retain subsequent to the exercise by Nedbank of its call
option, which is expected to be exercised by the end of February 2015. The
valuation was based on a closing price of R249.00 per share, up from
R210.00 per share at 31 December 2013. The investment was revalued upwards
by R151 million and has been included in current assets.
Old Mutual (0.35%)
Brimstone's rights to Old Mutual plc shares, accounted for as options, have
been revalued at year end, based on a closing price of R34.70 per share, up
from R33.79 per share at 31 December 2013. The investment was revalued
upwards by R28.3 million. This investment is included in current assets as
the rights mature on 1 May 2015.
Phuthuma Nathi (4.11%)
Phuthuma Nathi is a Black owned investment company that holds 20% of
MultiChoice South Africa and whose shares trade over the counter.
Multichoice South Africa comprises businesses that operate pay-television
subscriber platforms (DSTV), pay-television channels and internet and mobile
platforms in South Africa. Full-year consolidated revenues and core headline
earnings both grew by 15% for the year ended March 2014. The preference
share funding in Phuthuma Nathi has now been fully repaid. Brimstone
acquired a further 1.1 million Phuthuma Nathi shares in 2014 at an average
price of R126.94 per share. Brimstone received dividends of R 19.8 million
from Phuthuma Nathi. At year end Brimstone held 2.1 million Phuthuma Nathi 1
shares and 0.7 million Phuthuma Nathi 2 shares, which closed at R 131.51 and
R139.95 per share respectively. The investment was revalued upwards by
R81.5 million.
Rex Trueform and African & Overseas Enterprises (Queenspark) (22%)
Brimstone holds a 22% effective economic ownership in Rex Trueform and
African & Overseas Enterprises, which it acquired in 2007. The market price
of all classes of Rex Trueform and African & Overseas Enterprises shares
increased during the year under review resulting in a upward revaluation of
R4.8 million.
Taste Holdings (14.21%)
During 2014, Taste Holdings concluded a Master Franchise Agreement with
Domino's Pizza which enables it to develop the Domino's Pizza brand in seven
Southern African countries. This agreement will allow Taste Holdings to
convert its existing Scooters and St Elmo's outlets into Domino's Pizza
outlets as well as open new Domino's Pizza outlets. Taste Holdings raised
R180 million through a rights issue to partly fund the Domino's Pizza
rollout and to pursue other opportunities. Taste Holdings acquired Arthur
Kaplan Jewellers, a leading luxury watch and jewellery retailer in the
fourth quarter of 2014. Brimstone acquired a further 13.2 million Taste
Holdings shares during 2014 at R3 per share. The share price closed at R3.20,
down from R3.75 per share at
31 December 2013.
Tiger Brands (0.94%)
Brimstone's rights to Tiger Brands shares, accounted for as options, have
been revalued at year end. The independently calculated option valuation was
based on a closing share price of R368.06 per share, up from R266.93 per
share at
31 December 2013. The investment was revalued upwards by R161 million. These
rights mature on 31 December 2017.
HEADLINE EARNINGS PER SHARE
Reviewed Audited
Year ended Year ended
31 December 31 December
2014 2013
Headline earnings per share (cents)
Basic 116.9 188.4
Diluted 99.8 160.9
Headline earnings calculation (R'000)
Net profit attributable to equity holders of
the parent 259 050 464 111
Loss/(profit) on disposal of property, plant,
equipment and vehicles 334 (4 850)
Impairment of investment in associate 28 286 356
Adjustments relating to results of associates (1 937) (456)
Total tax effects of adjustments 505 1 420
Headline earnings 286 238 460 581
Weighted average number of shares on which earnings
and headline earnings per share is based (000's) 244 919 244 414
Weighted average number of shares on which diluted
earnings and diluted headline earnings per share is
based (000's) 286 703 286 172
INTRINSIC NET ASSET VALUE (INAV)
INAV at 31 December 2014 calculated on a line-by-line basis, totalled R4.86
billion, or R19.79 per share (31 December 2013: R4.19 billion or R17.09 per
share), representing an increase of 16.1% from 2013 (an increase of 15.8% on
a per share basis). On a fully diluted basis INAV per share is R18.58 or an
increase of 15% on the R16.16 reported at 31 December 2013.
As at 31 December 2014, Brimstone Ordinary shares were trading at a discount
of 14.1% to INAV (31 December 2013: 18.1%). Brimstone "N" Ordinary shares
traded at a discount of 16.6% to Brimstone's INAV (31 December 2013: 18.1%).
The breakdown of INAV is available on the Company's website at
www.brimstone.co.za.
Subsequent events
There are no significant subsequent events affecting these results.
Dividend and special dividend
Brimstone's board has declared a final dividend of 30 cents per share for
the year ended 31 December 2014 (2013: 30 cents per share) and a special
dividend of 20 cents per share for the year ended 31 December 2014 (2013:
10 cents per share) payable on Monday, 23 March 2015. The final dividend and
the special dividend have been declared out of income reserves.
The special dividend has been declared following the conclusion of the
Nedbank transaction. Therefore, after due consideration and in celebration
of Brimstone's 20 years of existence, the board of Brimstone has decided to
pay a special dividend to its shareholders. Shareholders should note that
the special dividend is subject to Exchange Control approval and an
announcement will be released on SENS once this has been obtained.
In compliance with the requirements of Strate, the Company has determined
the following salient dates for the payment of the final dividend and
special dividend. The last day to trade cum dividend for both the final
dividend and the special dividend is Friday, 13 March 2015.
The final dividend and the special dividend are payable to all shareholders
of Brimstone recorded in the books of the Company at the close of business
on Friday, 20 March 2015. Shares will commence trading ex-dividend from
Monday,
16 March 2015. Shares may not be rematerialised or dematerialised from
Monday, 16 March 2015 to Friday, 20 March 2015, both days inclusive.
The final dividend and the special dividend are subject to dividend tax at
15%. In determining the dividend tax, secondary tax on companies ("STC")
credits must be taken into account. Brimstone has sufficient STC credits to
cover the dividend tax and the STC credits utilised as part of the final and
the special dividend declarations amount to R74 961 605, being 30 cents per
share for the final dividend, and R49 974 403, being 20 cents per share, for
the special dividend, respectively. Consequently, no dividend tax is payable
by shareholders who are normally not exempt from dividend tax. All
shareholders will receive the final dividend of 30 cents per share and the
special dividend of 20 cents per share.
The number of Brimstone Ordinary and "N" Ordinary shares eligible for both
the final dividend and the special dividend at the date of this declaration
is 43 145 435 and 206 726 581 respectively (this excludes 39 140 000 "N"
Ordinary shares held by The Brimstone Black Executives Investment Trust, The
Brimstone General Staff Investment Trust and The Brimstone Broad-Based BEE
Trust which are not eligible to receive dividends) and the Company's tax
reference number is 9397002719.
Prospects
The Group has a proven track record of creating and unlocking shareholder
value, supported by an experienced team with proven deal-making ability. The
Group is defined by bona fide empowerment credentials, and its ability to
enhance NAV and pay dividends. It has proven its ability as a lead
empowerment partner of choice with a capacity to lead broad-based
empowerment consortia.
Brimstone in its 20th year of existence remains well capitalised to pursue
value enhancing transactions based on cash generative, quality assets. The
Group maintains a long-term view and partnership approach to its underlying
investments.
On behalf of the board
F Robertson MA Brey
Executive Chairman Chief Executive Officer
24 February 2015
Directorate and administration
Registered office: Boundary Terraces, 1 Mariendahl Lane, Newlands 7700,
Cape Town
Transfer Secretaries: Computershare Investor Services (Pty) Ltd, 70 Marshall
Street, Johannesburg 2001
Sponsor: Nedbank Capital, 135 Rivonia Road, Sandton 2196
Directorate: F Robertson (Executive Chairman)*, MA Brey (Chief Executive
Officer)*, LZ Brozin (Financial)*,
PL Campher (Lead Independent), M Hewu, N Khan, KR Moloko, MK Ndebele, LA
Parker, FD Roman *Executive
Website: www.brimstone.co.za
E-mail: info@brimstone.co.za
Condensed Statement of Comprehensive Income
Reviewed Audited
Year ended Year ended
31 December 31 December
R'000 2014 2013
Revenue 2 221 054 2 086 376
Sales and fee income 1 968 233 1 930 997
Dividends received 252 821 155 379
Operating expenses (2 119 196) (2 021 990)
Operating profit 101 858 64 386
Fair value gains 463 967 557 402
Exceptional items (28 286) 7 828
Share of (losses)/profits of associates
and joint ventures (65 431) 13 204
Profit before net finance costs 472 108 642 820
Income from investments 23 028 23 037
Net finance costs (188 182) (110 553)
Outside unit holders' interest (449) (507)
Net profit before taxation 306 505 554 797
Taxation (28 712) (81 405)
Profit for the year 277 793 473 392
Other comprehensive income, net of tax 17 991 7 592
Items that may be reclassified subsequently
to profit and loss
Cash flow hedges
Profit/(loss) arising during the year 33 878 (7 711)
Net value (loss)/gain on available-for-sale
financial asset (15 887) 15 303
Total comprehensive income for the year 295 784 480 984
Profit attributable to:
Equity holders of the parent 259 050 464 111
Non-controlling interests 18 743 9 281
277 793 473 392
Total comprehensive income attributable to:
Equity holders of the parent 269 739 468 523
Non-controlling interests 26 045 12 461
295 784 480 984
Earnings per share (cents)
Basic 105.8 189.9
Diluted 90.4 162.2
Condensed Statement of Financial Position
Reviewed Audited
Year ended Year ended
31 December 31 December
R'000 2014 2013
ASSETS
Non-current assets 5 407 395 5 051 016
Property, plant, equipment and vehicles 410 827 278 348
Goodwill 12 140 12 140
Intangible assets 114 400 135 599
Investments in associate companies and
joint ventures 1 067 131 799 029
Investments 3 636 528 3 633 291
Deferred taxation - 21 654
Insurance assets 166 369 161 774
Other financial assets - 9 181
Current assets 2 525 671 1 748 577
Inventories 265 616 250 648
Trade and other receivables 633 801 617 731
Insurance assets 561 516 505 785
Taxation 14 222 9 949
Investments 828 897 103 251
Cash and cash equivalents 221 619 261 213
TOTAL ASSETS 7 933 066 6 799 593
EQUITY AND LIABILITIES
Capital and reserves 3 434 405 3 372 120
Share capital 45 45
Capital reserves 342 032 325 434
Revaluation reserves 14 143 23 223
Cash flow hedging reserve 14 922 (4 847)
Changes in ownership (11 839) (11 839)
Retained earnings 2 965 681 2 905 630
Attributable to equity holders of the parent 3 324 984 3 237 646
Non-controlling interests 109 421 134 474
Non-current liabilities 2 930 119 1 764 025
Long-term interest bearing borrowings 2 040 451 936 765
Long-term provisions 23 103 22 211
Other financial liabilities 3 490 -
Insurance liabilities 223 695 168 749
Deferred taxation 639 380 636 300
Current liabilities 1 568 542 1 663 448
Short-term interest bearing borrowings 130 700 260 770
Bank overdrafts 14 815 49 604
Trade payables 548 646 575 358
Other payables 106 251 92 731
Insurance liabilities 732 794 634 817
Outside unit holders' interest 16 145 18 848
Other financial liabilities 220 14 123
Short-term provisions 18 172 16 992
Taxation 799 205
TOTAL EQUITY AND LIABILITIES 7 933 066 6 799 593
NAV per share (cents) 1 356.3 1 324.0
Shares in issue at end of year (000's) 245 151 244 531
Condensed Statement of Changes in Equity
for the year ended 31 December 2014
R'000 Share Capital Revaluation
capital reserves reserves
Group
Balance at 1 January 2013 - Audited 45 310 132 14 331
Attributable profit for the year
ended 31 December 2013 - - -
Other comprehensive income - - 8 892
Total comprehensive income - - 8 892
Recognition of share-based payments - 10 076 -
Dividend paid - - -
Subsidiary's accrual for preference dividends - - -
Issue of share capital - 2 812 -
Repurchase of trust units - (187) -
Disposal of treasury shares - 49 -
Share of non-distributable reserves of
associates transferred directly to equity - 2 552 -
Balance at 31 December 2013 - Audited 45 325 434 23 223
Attributable profit for the year ended
31 December 2014 - - -
Other comprehensive income - - (9 080)
Total comprehensive income - - (9 080)
Recognition of share-based payments - 10 570 -
Dividend paid - - -
Subsidiary's accrual for preference dividends - - -
Redemption of preference shares by subsidiary - - -
Share of distribution made by associate - - -
Share of distribution made by subsidiary
for change in shareholding - - -
Reduction of subsidiary's share capital - - -
Issue of share capital - 4 597 -
Repurchase of trust units - (744) -
Share of non-distributable reserves of
associates transferred directly to equity - 2 175 -
Balance at 31 December 2014 - Reviewed 45 342 032 14 143
Condensed Statement of Changes in Equity
for the year ended 31 December 2014 (continued)
R'000 Cash flow
hedging Changes in Retained
reserve ownership earnings
Group
Balance at 1 January 2013 - Audited (367) (11 839) 2 502 581
Attributable profit for the year ended
31 December 2013 - - 464 111
Other comprehensive income (4 480) - -
Total comprehensive income (4 480) - 464 111
Recognition of share-based payments - - -
Dividend paid - - (61 062)
Subsidiary's accrual for preference dividends - - -
Issue of share capital - - -
Repurchase of trust units - - -
Disposal of treasury shares - - -
Share of non-distributable reserves of
associates transferred directly to equity - - -
Balance at 31 December 2013 - Audited (4 847) (11 839) 2 905 630
Attributable profit for the year ended
31 December 2014 - - 259 050
Other comprehensive income 19 769 - -
Total comprehensive income 19 769 - 259 050
Recognition of share-based payments - - -
Dividend paid - - (97 939)
Subsidiary's accrual for preference dividends - - -
Redemption of preference shares by subsidiary - - -
Share of distribution made by associate - - (58 945)
Share of distribution made by subsidiary
for change in shareholding - - (42 115)
Reduction of subsidiary's share capital - - -
Issue of share capital - - -
Repurchase of trust units - - -
Share of non-distributable reserves of
associates transferred directly to equity - - -
Balance at 31 December 2014 - Reviewed 14 922 (11 839) 2 965 681
Condensed Statement of Changes in Equity
for the year ended 31 December 2014 (continued)
R'000 Attribu-
table to
equity
holders Non-
of the controlling
parent interests Total
Group
Balance at 1 January 2013 - Audited 2 814 883 115 103 2 929 986
Attributable profit for the year
ended 31 December 2013 464 111 9 281 473 392
Other comprehensive income 4 412 3 180 7 592
Total comprehensive income 468 523 12 461 480 984
Recognition of share-based payments 10 076 - 10 076
Dividend paid (61 062) (1 480) (62 542)
Subsidiary's accrual for preference
dividends - 8 004 8 004
Issue of share capital 2 812 330 3 142
Repurchase of trust units (187) (84) (271)
Disposal of treasury shares 49 - 49
Share of non-distributable reserves
of associates transferred directly
to equity 2 552 140 2 692
Balance at 31 December 2013 - Audited 3 237 646 134 474 3 372 120
Attributable profit for the year
ended 31 December 2014 259 050 18 743 277 793
Other comprehensive income 10 689 7 302 17 991
Total comprehensive income 269 739 26 045 295 784
Recognition of share-based payments 10 570 - 10 570
Dividend paid (97 939) (3 000) (100 939)
Subsidiary's accrual for preference
dividends - 7 611 7 611
Redemption of preference shares
by subsidiary - (26 804) (26 804)
Share of distribution made by associate (58 945) - (58 945)
Share of distribution made by subsidiary
for change in shareholding (42 115) (29 953) (72 068)
Reduction of subsidiary's share capital - (6) (6)
Issue of share capital 4 597 - 4 597
Repurchase of trust units (744) 651 (93)
Share of non-distributable reserves of
associates transferred directly to equity 2 175 403 2 578
Balance at 31 December 2014
- Reviewed 3 324 984 109 421 3 434 405
Condensed Statement of Cash Flows
Reviewed Audited
Year ended Year ended
31 December 31 December
R'000 2014 2013
Operating activities
Net attributable profit 277 793 473 392
Adjustments for:
Share of profits of associates and joint ventures (21 498) (86 919)
Income from investments (188 920) (104 701)
Increase in fair value of investments (463 967) (557 402)
Impairment of investment in associate 28 286 356
Amortisation of intangible assets 22 355 22 368
Net finance costs 188 182 110 553
Taxation 28 712 81 405
Depreciation of property, plant,
equipment and vehicles 71 325 62 483
Share-based payment expense 10 570 10 076
Increase in long and short-term provisions 2 072 2 016
Loss/(profit) on disposal of property,
plant, equipment and vehicles 547 (143)
Operating cash flows before movements in
working capital (44 543) 13 484
Increase in inventories (14 968) (20 422)
Decrease/(increase) in trade and
other receivables 30 983 (221 152)
Outside unit holders' interest (2 703) 4 353
(Decrease)/increase in trade and other payables (13 192) 303 872
Net increase in insurance assets (60 326) (198 603)
Net increase in insurance liabilities 152 923 186 706
Cash generated from operations 48 174 68 238
Interest received 23 028 23 037
Dividends received from associates and joint ventures 86 929 73 715
Dividends received from other equity investments 165 892 81 664
Income taxes paid (17 184) (32 188)
Finance costs (143 509) (68 365)
Net cash from operating activities 163 330 146 101
Investing activities
Loan repayments and recoveries from
associate and investments 3 253 6 163
Proceeds on disposal of investments 48 701 44 602
Proceeds on disposal of property, plant,
equipment and vehicles 542 2 021
Acquisition of property, plant,
equipment and vehicles (204 893) (76 046)
Acquisition of intangible assets (1 156) (5 798)
Acquisition of investments (754 591) (132 000)
Net cash used in investing activities (908 144) (161 058)
Financing activities
Dividends paid by company and subsidiaries (130 892) (62 542)
Repayments of borrowings (342 716) (84 071)
Loans raised 1 275 813 69 672
Shares sold - 49
Proceeds on issue of trust units/shares 4 597 3 142
Shares repurchased by subsidiary (6) -
Redemption of non-controlling shareholder's
preference shares (24 579) -
Share of distribution made by subsidiary (42 115) -
Units/shares repurchased by subsidiaries (93) (271)
(Decrease)/increase in bank overdrafts (34 789) 34 170
Net cash generated from/(used in) financing
activities 705 220 (39 851)
Net decrease in cash and cash equivalents (39 594) (54 808)
Cash and cash equivalents at beginning of year 261 213 316 021
Cash and cash equivalents at end of year
Bank balances and cash 221 619 261 213
Further information
1. Auditor's review report
The preliminary condensed consolidated financial statements for the year
ended 31 December 2014 have been reviewed by the Group's auditors,
Deloitte & Touche. The review was conducted in accordance with ISRE 2410
Review of Interim Financial Information performed by the Independent
Auditor of the Entity. The auditor's unmodified review report does not
necessarily cover all the information in this announcement. Shareholders
are therefore advised that in order to obtain a full understanding of
the nature of the auditor's work they should obtain a copy of that
report together with the accompanying financial information from the
registered office of the Company. Any reference to future financial
performance and Intrinsic Net Asset Value included in this announcement
has not been reviewed or reported on by the Company's auditors.
2. Basis of preparation
The preliminary condensed consolidated financial statements have been
prepared in accordance with the requirements of the JSE Limited Listings
Requirements for preliminary reports and the requirements of the
Companies Act of South Africa. The Listings Requirements require
preliminary reports to be prepared in accordance with the framework
concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS) and the SAICA
Financial Reporting Guides as issued by the Accounting Practices
Committee and the Financial Pronouncements as issued by the Financial
Reporting Standards Council and to also, as a minimum, contain the
information required by IAS 34 Interim Financial Reporting. The
accounting policies applied in the preparation of the preliminary
condensed consolidated financial statements are in terms of IFRS
and with the exception of the disclosure in note 3 are consistent
with those applied in the previous consolidated annual financial
statements.
The preliminary condensed consolidated financial statements were
Prepared under the supervision of the group financial director,
Lawrie Zev Brozin, B.Com B.Acc CA(SA).
3. Significant accounting policies
These preliminary condensed consolidated financial statements for the
year ended 31 December 2014 have been prepared on the historical cost
basis, except for the revaluation of certain financial instruments.
The accounting policies and methods of computation applied in the
presentation of the financial results are consistent with those applied
for the year ended 31 December 2013, except for the following new or
revised standards, amendments thereto and interpretations as issued
by the International Accounting Standards Board, which are effective
for the current reporting period that were adopted:
Amendments to IFRS 10 Investment Entities, and consequential amendments
to IFRS 12 Disclosure of Investments in other Entities and IAS 27
Separate Financial Statements
Amendments to IAS 32 Offsetting Financial Assets and Financial
Liabilities
Amendments to IAS 36 Recoverable Disclosure for Non-Financial Assets
Amendments to IAS 39 Novation of Derivatives and Continuation of Hedge
Accounting
IFRIC 21 Levies
The adoption of these new and revised accounting standards did not have
a material impact on the results and as such there is no change to
comparative information resulting from the adoption of these standards.
Reviewed Audited
Year ended Year ended
31 December 31 December
R'000 2014 2013
4. Income from investments
Interest received on bank deposits and
loans to associates 23 028 23 037
Finance costs/(income)
Interest on borrowings 40 264 38 411
Interest rate swap 10 355 (8 269)
Preference dividends 137 540 80 411
Interest on obligations under
instalment sale agreements 23 -
188 182 110 553
5. Taxation
Current normal and deferred tax expense 26 858 81 062
Dividends tax 652 333
Securities transfer tax 1 202 -
Secondary tax on companies - 10
28 712 81 405
6. Capital commitments
Commitments for the acquisition of
property, plant, equipment and vehicles:
Contracted for but not provided in the
financial statements 10 361 32 050
Authorised by directors but not contracted 3 651 7 471
14 012 39 521
7. Segmental information
Information reported to the Group's operating
decision makers for the purpose of resource
allocation and assessment of segment performance
is specifically focused on the individual entity
in which Brimstone has invested. The Group's
reportable segments under IFRS 8 are therefore
fishing, insurance, clothing and investments.
Investments include investments in associates
and joint ventures, available-for-sale
investments, investments at fair value through
profit or loss and the Group's property portfolio.
Segment revenues and results
Segment revenue
Fishing 1 361 498 1 237 687
Insurance 417 569 505 246
Clothing 183 824 179 600
Investments 258 163 163 843
Total revenue 2 221 054 2 086 376
Segment profit/(loss) from operations
Fishing 109 251 69 062
Insurance (179 718) (120 662)
Clothing 7 202 10 460
Investment management 165 123 105 526
Total profit from operations 101 858 64 386
Fair value gains 463 967 557 402
Exceptional items (28 286) 7 828
Share of (losses)/profits of associates
and joint ventures (65 431) 13 204
Income from investments 23 028 23 037
Finance costs (188 182) (110 553)
Outside unit holders' interest (449) (507)
Profit before taxation 306 505 554 797
R'000
Segment assets and liabilities
Reviewed Audited
31 December 2014 31 December 2013
Segment assets Gross Net Gross Net
Fishing 1 040 101 1 040 101 911 544 911 544
Insurance 1 321 780 1 321 780 1 391 025 1 391 025
Clothing 171 257 171 257 165 658 165 658
2 533 138 2 533 138 2 468 227 2 468 227
Investments 5 839 788 5 399 928 4 742 653 4 331 366
Intergroup balances 439 860 - 411 287 -
Other 5 399 928 5 399 928 4 331 366 4 331 366
Total segment
assets 8 372 926 7 933 066 7 210 880 6 799 593
Segment liabilities
Fishing 944 377 735 697 781 458 530 553
Insurance 1 391 777 1 301 843 1 334 204 1 244 270
Clothing 132 509 61 260 130 479 60 031
2 468 663 2 098 800 2 246 141 1 834 854
Investments 2 029 998 2 029 998 1 181 332 1 181 332
Total segment
liabilities 4 498 661 4 128 798 3 427 473 3 016 186
Reviewed Audited
Year ended Year ended
31 December 31 December
R'000 2014 2013
Other segmental information
Depreciation and amortisation
Fishing 80 735 73 015
Insurance 8 240 8 097
Clothing 4 023 3 111
Investments 682 628
Total segment depreciation and amortisation 93 680 84 851
Additions to non-current assets
Fishing 196 035 63 495
Insurance 2 750 8 287
Clothing 6 408 9 916
Investments 856 146
Total segment additions to non-current assets 206 049 81 844
8. Fair value measurements
This note provides information about how the Group determines fair
Values of various financial assets and financial liabilities.
Fair value of the Group's financial assets and financial liabilities
that are measured on a fair value basis on a recurring basis.
Some of the Group's financial assets and financial liabilities are
measured at fair value at the end of each financial reporting period.
The following table gives information about how the fair values of these
financial assets and financial liabilities are determined (in particular,
the valuation technique(s) and inputs used).
The directors consider that the carrying amounts of financial assets and
financial liabilities not measured at fair value on a recurring basis
(but fair value disclosures are required) recognised in the preliminary
condensed consolidated financial statements approximate their fair
values.
R'000
2014 Level 1 Level 2 Level 3 Total
Financial assets
at FVTPL*
Derivative financial
assets - 1 122 950 - 1 122 950
Listed shares 2 560 195 - - 2 560 195
Unlisted shares
and loan 606 162 6 555 5(1) 612 722
Other investments 105 150 - - 105 150
Available-for-sale
financial assets
Unlisted shares - - 25 265(2) 25 265
Unlisted shares - - 2 218(1) 2 218
Total 3 271 507 1 129 505 27 488 4 428 500
Financial liabilities
at FVTPL
Derivative financial
liabilities - 3 710 - 3 710
2013 Level 1 Level 2 Level 3 Total
Financial assets
at FVTPL
Derivative financial
assets - 918 535 - 918 535
Listed shares 2 456 503 - - 2 456 503
Unlisted shares
and loan 153 442 6 149 5(1) 159 596
Other investments 68 884 - - 68 884
Available-for-sale
financial assets
Unlisted shares - - 44 800(2) 44 800
Unlisted shares - - 2 154(1) 2 154
Total 2 678 829 924 684 46 959 3 650 472
Financial liabilities
at FVTPL
Derivative financial
liabilities - 2 125 - 2 125
*FVTPL = Fair value through profit or loss
The table provided analyses financial instruments that are measured
subsequent to initial recognition at fair value, grouped in Levels 1
to 3 based on the degree to which fair value is observable.
- Level 1 fair value measurements are those derived from quoted prices
(unadjusted) in active markets for identical assets or liabilities.
- Level 2 fair value measurements are those derived from inputs other
than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices).
- Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are
not based on observable market data (unobservable inputs).
Notes
1. At cost or historical valuation.
2. Discounted cash flow method using a discount rate of 15% over
10 years.
Reviewed Audited
Year ended Year ended
31 December 31 December
R'000 2014 2013
Reconciliation of level 3 fair value measures
Unlisted shares and loan
Opening balance 46 959 28 250
Total gains or losses
- in profit or loss - -
- in other comprehensive income (19 535) 18 984
Advances 64 90
Disposals - (365)
Transfer to level 2 - -
Closing balance 27 488 46 959
9. Share Capital
In issue (number)
Ordinary shares 43 145 435 46 775 135
Held as treasury shares (385 611) (4 015 311)
42 759 824 42 759 824
"N" Ordinary shares 245 866 581 267 144 624
Held as treasury shares (43 475 230) (65 373 373)
202 391 351 201 771 251
Total net of treasury shares 245 151 175 244 531 075
Weighted average number of shares on
which earnings and headline earnings per
share is based is 244 918 888
(2013 - 244 413 514)
Weighted average number of shares on
which diluted earnings and diluted
headline earnings per share is based is
286 702 844 (2013 - 286 172 134)
Reconciliation of weighted average
number of shares between basic and
diluted earnings per share and headline
earnings and diluted headline
earnings per share.
Basic 244 918 888 244 413 514
Dilutive share options 41 783 956 41 758 620
Diluted 286 702 844 286 172 134
Share options treated as
anti-dilutive 499 068 (2013 - 703 098)
Closing share price (cents)
Ordinary shares 1 700 1 400
"N" Ordinary shares 1 650 1 400
The following share movements occurred
during the period under review:
Ordinary "N" Ordinary
Shares issued
1 April 2014 - 435 540
5 September 2014 - 184 560
Shares repurchased and cancelled
1 May 2014 (3 629 700) (21 898 143)
Date: 24/02/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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