Wrap Text
Unaudited results for the six months ended 28 February 2015.
PURPLE GROUP LIMITED
(Incorporated in the Republic of
South Africa)
(Registration number 1998/013637/06)
Share code: PPE ISIN: ZAE000185526
UNAUDITED RESULTS
for the six months ended 28 February 2015
CLIENT EARNINGS
FUNDS ACTIVE REVENUE PER SHARE DIVIDEND
R791.6m CLIENTS R62.6m 2 cents PER SHARE
47.3% INCREASE up 71% 28% INCREASE 94% INCREASE 1 cent
CHAIRMAN'S REPORT
The Executive of the Group set out some two years ago to build an integrated business
that would cover investing and trading solutions for everyone. Our range now covers
the full spectrum - from short term to long term, from novice investor to sophisticated
day trader.
The momentum that has been established now will underpin growth into the future.
As the number of clients and the funds under management increase, the benefits of
scale and operating leverage will flow through into profits for shareholders.
The Board is delighted to declare its first dividend out of cash earnings.
CEO'S REPORT
I am grateful to our shareholders and team for their ongoing support and commitment
to the plan.
These results build on the significant progress already made over the last two years in
the Group's strategic focus and the diversity and resilience of our sources of revenue.
Group Highlights for the six months ended 28 February 2015 compare to the prior
period, as follows:
- Revenue increased by 28% to R62.6 million;
- Client funds increased by 47.3% to R791.6 million, comprising:
– Emperor Asset Management – R522.2 million (increase of 34.8%);
– GT247.com – R55.1 million (increase of 5.6%);
– GT Private Broking – R152.2 million (increase of 55.2%); and
– Easy Equities – R62.1 million (business launched on 27 October 2014); and
- Earnings per Share and Headline Earnings per share increased by 94% to 2 cents
per share.
The Group now reports an increased profit before tax and fair value adjustments of
R23.6 million compared to R15.0 million generated during the same period last year.
This 57% increase demonstrates the group's leverage achieved over its operating cost
structure together with the increased strategic focus.
GT247.com
GT247.com posted revenue growth of 35%, driving revenue up to R48.3 million
(R35.8 million for 2014) for the period. Nominal value traded by self-directed clients
increased 47% to R156.3 billion, supported by an 11% increase in volatility over
the period and our increased revenue contribution from services rendered to asset
management clients.
GT Private Broking
Revenue grew by 2% in our private client division during the six months ended
28 February 2015, increasing to R10.8 million (R10.6 million for 2014).
Whilst this was a satisfactory result, the strategic focus is on providing high levels
of professional service, ensuring high levels of client retention whilst growing
key client accounts. The team has done well maintaining and growing client funds by
46% since year-end to R152.2 million at 28 February 2015, which bodes well for
future revenue prospects.
Easy Equities
Easy Equities is a secure, share investing platform for everyone. Over sophistication
resulted in stockbrokers raising the barriers to entry to the point where the majority
of South Africans feel intimidated and excluded from investing in shares.
Ease of use, affordability and knowledge sharing through social engagement are the
pillars of the platform experience. The purchase process focuses on brand recognition
and not share prices, on what you want to spend and not how many shares you would
like, allowing clients to invest as much as they can afford in the brands they love.
This is made possible by Fractional Share Rights, a copyright of GT247.com, which
confer all of the economic benefits of share ownership, other than voting rights.
Also, having the cheapest cost structure means that 99.35% is invested, putting the
maximum capital to work towards generating returns.
Integration to social media platforms allows for sharing of ideas at the point of
purchase and client communication is delivered in a fun, friendly, engaging, educational
and easy way.
Launched on 27 October 2014, Easy Equites has already opened 4 086 accounts and
attracted R62.1 million of client funds. To date the Group has incurred net trading costs
of R1.1 million, through subsidising client transaction costs on the online platform.
Emperor Asset Management (EAM)
The group's asset management division posted another year of impressive growth
at 97%, increasing asset management fees to R4.6 million (R2.3 million in 2014) for
the period.
Active clients increased by 25% to 1 733, with a resultant increase in client funds of
34.8%, totalling R522.2 million at 28 February 2015.
With the launch of its first Unit Trust on 1 September 2014 and Hedge Fund on
1 November 2014, EAM is expanding its offering on the asset management front.
Our roadmap remains to identify investment excellence and deliver market beating
returns, whilst building on a user experience that instils confidence and
understanding through complete transparency and a high degree of client engagement.
FINANCIAL DIRECTOR'S REVIEW
The Group generated a 28% increase in half year revenue for the six months ended
28 February 2015, building on the 35% increase in revenue during the prior half year.
Operating expenses increased by 16%, primarily due to additional staff being
employed at the front end of the business and legal expenses incurred in establishing
the various new asset management products and the launch of the Easy Equities
investment platform.
The Group recorded an after tax profit of R16.3 million for the six months ended
28 February 2015, compared to a profit of R8.4 million for the same period last year,
a 94% increase.
The Group made a direct investment in Real People Investment Holdings (Pty) Ltd
during January 2015, totalling R26 million (as announced on SENS on 15 December
2014). This investment was funded by short term banking facilities of R20 million and
the Group's own cash resources.
SUBSEQUENT EVENTS
The directors are not aware of any other matters or circumstances arising since
28 February 2015 up to the date of this announcement, not otherwise dealt with in
this announcement.
ACCOUNTING POLICIES
The unaudited condensed group interim financial statements are prepared in accordance
with the recognition and measurement requirements of International Financial Reporting
Standards (IFRS), the presentation and disclosure requirements of IAS 34 – Interim
Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council, the Listing Requirements of the JSE Limited and in the
manner required by the South African Companies Act, 71 of 2008.
Accounting policies which comply with IFRS have been applied consistently by all
entities in the group and are consistent with those applied in the previous financial year.
The preparation of these unaudited condensed group interim financial statements for
the six months ended 28 February 2015 was supervised by the Financial Director,
Gary van Dyk CA (SA).
Any forward looking statements contained in this announcement have not been
reviewed or reported on by the Company's auditors.
CASH DIVIDEND TO SHAREHOLDERS
Notice is hereby given that the Board has declared a gross interim cash dividend,
for the six months ended 28 February 2015 from income reserves, of 1 cent per
share, payable to shareholders recorded in the register on Friday, 24 April 2015.
The dividend will be subject to Dividends Tax. The local Dividend Tax rate is 15%.
The Company has no secondary tax on companies credits available. The gross
dividend amount is 1.00 cent per ordinary share for shareholders exempt from the
Dividend Tax; the net local dividend amount is 0.85 cents per ordinary share for
shareholders liable to pay the Dividend Tax. The issued share capital at the declaration
date is 860 105 723 ordinary shares (which includes 2 300 000 treasury shares).
Shareholders are advised that the last date to trade cum distribution will be Friday,
17 April 2015.
As from commencement of business on Monday, 20 April 2015 all trading in Purple
Group shares will be ex dividend. Payment will be made on Tuesday, 28 April 2015.
Share certificates may not be dematerialised or rematerialised between Monday,
20 April 2015 and Friday, 24 April 2015, both days inclusive. The Company's tax
reference number is 9552/065/642.
On behalf of the board
Mark Barnes (Executive Chairman)
Charles Savage (Chief Executive Officer)
Gary van Dyk (Chief Financial and Operations Officer)
Johannesburg
27 March 2015
CONDENSED GROUP STATEMENT OF PROFIT AND LOSS
for the six months ended 28 February 2015
Unaudited Unaudited Audited
Change 6 months 6 months 12 months
2014 to 28 February 28 February 31 August
2015 2015 2014 2014
% R'000 R'000 R'000
Continuing operations
Revenue 28 62 622 48 857 93 897
Trading expenses 57 (5 087) (3 239) (7 814)
Operating expenses 16 (34 358) (29 561) (65 491)
Net income 44 23 177 16 057 20 592
Other income 604 1 810 257 218
Earnings before interest, depreciation
and amortisation 53 24 987 16 314 20 810
Interest income – 197 208
Interest expense (384) (600) (1 075)
Depreciation and amortisation (957) (893) (1 982)
Profit before fair value adjustments and tax 57 23 646 15 018 17 961
Fair value adjustments – – (31 624)
Profit/(loss) before tax 57 23 646 15 018 (13 663)
Current and deferred tax (7 376) (4 444) (1 379)
Profit/(loss) from continuing operations 54 16 270 10 574 (15 042)
Discontinued operations
Loss from discontinued operations, net of tax – (2 172) (2 027)
Profit/(loss) for the period 94 16 270 8 402 (17 069)
Profit/(loss) attributable to:
Owners of the company 16 270 8 402 (17 069)
Non-controlling interest – – –
16 270 8 402 (17 069)
Weighted number of shares in issue
at end of period (‘000) 815 576 817 211 815 576
Earnings per share
Basic profit/(loss) per share (cents) 94 2.00 1.03 (2.09)
Diluted profit/(loss) per share (cents) 78 1.82 1.02 (2.00)
Earnings per share – continuing operations
Basic profit/(loss) per share (cents) 55 2.00 1.29 (1.84)
Diluted profit/(loss) per share (cents) 42 1.82 1.28 (1.76)
Earnings per share – discontinued operations
Basic loss per share (cents) – (0.27) (0.25)
Diluted loss per share (cents) – (0.26) (0.24)
Headline profit per share
Profit/(loss) for the period 16 270 8 402 (17 069)
Headline profit for the period 16 270 8 402 (16 366)
Headline profit/(loss) per share (cents) 94 2.00 1.03 (2.01)
Diluted profit/(loss) per share (cents) 78 1.82 1.02 (1.91)
CONDENSED GROUP STATEMENT OF OTHER COMPREHENSIVE INCOME
For the six months ended 28 February 2015
Unaudited Unaudited Audited
6 months 6 months 12 months
28 February 28 February 31 August
2015 2014 2014
R'000 R'000 R'000
Profit/(loss) for the period 16 270 8 402 (17 069)
Other comprehensive income
Items that may be reclassified subsequently to profit/loss
Foreign currency translation reserve (145) (181) 140
Tax effect – – –
Total comprehensive profit/(loss) 16 125 8 221 (16 929)
Total comprehensive profit/(loss) attributable to:
Owners of the company 16 125 8 221 (16 929)
Non-controlling interest – – –
16 125 8 221 (16 929)
CONDENSED GROUP STATEMENT OF CASH FLOWS
For the six months ended 28 February 2015
Unaudited Unaudited Audited
6 months 6 months 12 months
28 Febuary 28 February 31 August
2015 2014 2014
R'000 R'000 R'000
Cash flow generated by operating activities 178 017 28 030 18 355
Cash flow utilised in investing activities (26 571) (1 700) (2 848)
Cash flow utilised in financing activities (12 044) – (3 670)
Net increase in cash and cash equivalents 139 402 26 330 11 837
Cash and cash equivalents at the beginning of the period 131 362 119 525 119 525
Cash and cash equivalents at the end of the period 270 764 145 855 131 362
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
As at 28 February 2015
Unaudited Unaudited Audited
6 months 6 months 12 months
28 February 28 February 31 August
2015 2014 2014
R'000 R'000 R'000
ASSETS
Equipment 2 819 2 617 2 716
Intangible assets and goodwill 208 007 206 815 207 560
Other investments 25 999 36 230 3 628
Long-term receivables 740 598 3 156
Deferred tax assets 29 375 22 695 28 645
Total non-current assets 266 940 268 955 245 705
Trade and other receivables 10 262 5 578 4 448
Cash and cash equivalents 293 610 150 237 134 111
Total current assets 303 872 155 815 138 559
Total assets 570 812 424 770 384 264
EQUITY AND LIABILITIES
Share capital and premium 450 474 458 704 458 704
Accumulated Loss (216 994) (207 793) (233 264)
Other reserves 20 370 17 534 19 259
Equity attributable to owners 253 850 268 445 244 699
Bank overdraft 22 846 4 382 2 749
Tax payable 6 150 1 598 –
Loans and borrowings – 7 505 3 844
Trade and other payables 287 966 142 840 132 972
Total current liabilities 316 962 156 325 139 565
Total equity and liabilities 570 812 424 770 384 264
Net asset value per ordinary share (cents) 31.12 32.91 30.00
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
For the six months ended 28 February 2015
Unaudited Unaudited Audited
6 months 6 months 12 months
28 February 28 February 31 August
2015 2014 2014
R'000 R'000 R'000
Balance at beginning of period 244 699 276 028 276 028
Profit/(loss) for the period 16 270 8 402 (17 069)
Share based payments 1 256 501 1 905
Foreign currency translation reserve (145) (181) 140
Dividends paid (8 230) (16 305) (16 305)
Balance at end of period 253 850 268 445 244 699
Operating Segments
The results by operating segments are as follows:
Continuing operations Discontinued
Inter-
GT247.com Purple segment
and EAM Group Voltbet revenues Total
R'000 R'000 R'000 R'000 R'000
For the six months ended 28 February 2014
Revenue 48 857 2 075 – (2 075) 48 857
Trading expenses (3 239) – – – (3 239)
Operating expenses (28 372) (3 264) (2 659) 2 075 (32 220)
Earnings before interest, tax, depreciation and amortisation 17 246 (1 189) (2 659) – 13 398
Fair value adjustments and other income 257 – – – 257
Interest income – 197 – – 197
Interest expense (97) (503) – – (600)
Depreciation (885) (8) – – (893)
16 521 (1 503) (2 659) – 12 359
Tax (4 713) 269 487 – (3 957)
Profit/(loss) for the period 11 808 (1 234) (2 172) – 8 402
For the six months ended 28 February 2015
Revenue 62 622 2 032 – (2 032) 62 622
Trading expenses (5 087) – – – (5 087)
Operating expenses (32 947) (3 443) – 2 032 (34 358)
Earnings before interest, tax, depreciation and amortisation 24 588 (1 411) – – 23 177
Other income 1 810 – – – 1 810
Interest expense (94) (290) – – (384)
Depreciation (955) (2) – – (957)
25 349 (1 703) – – 23 646
Tax (7 795) 419 – – (7 376)
Profit/(loss) for the period 17 554 (1 284) – – 16 270
Directors: Mark Barnes Executive Chairman, Charles Savage Chief Executive Officer, Gary van Dyk Chief Financial and Operations Officer,
Dennis Alter Non-executive Director, Craig Carter Non-executive Director, Thembeka Gwagwa Independent Non-executive Director,
Ronnie Lubner Non-executive Director
Registered office
Block B,
The Offices of Hyde Park
Strouthos Place,
Hyde Park, 2196
Independent auditors
BDO South Africa Inc. Chartered
Accountants Registered Auditors
22 Wellington Road, Parktown, 2193
Private Bag X60500, Houghton, 2041
Transfer secretaries
Link Market Services South Africa (Pty) Ltd
13th Floor, Rennie House
19 Ameshoff Street Braamfontein, 2001
Sponsor
Deloitte & Touche Sponsor Services (Pty) Ltd
Building 8 Deloitte Place The Woodlands
20 Woodlands Drive Woodmead, 2196
Private Bag X6 Gallo Manor, 2052
Date: 27/03/2015 07:05:00 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,
information disseminated through SENS.
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