Wrap Text
Reviewed interim results for the twelve months ended 31 December 2014
BONATLA PROPERTY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa
(Registration number 1996/014533/06)
Share code: BNT & ISIN code: ZAE000013694
("Bonatla" or "the company")
REVIEWED INTERIM RESULTS FOR THE TWELVE MONTH PERIOD ENDED 31 DECEMBER 2014
Abridged Consolidated Statement of Financial Position
As at As at
31 December 31 December
2014 2013
12 months 12 months
Reviewed Audited
R’000 R’000
ASSETS
Non-Current assets 261 359 300 596
Property, plant and equipment 49 894 49 994
Investment property 93 535 93 385
Goodwill - 38 200
Investments 785 1 016
Prepayments 53 331 53 914
Loans 10 339 9 968
Deferred taxation 3 475 4 119
Deposits 50 000 50 000
Current assets 115 165 102 795
Inventories 540 733
Trade and other receivables 113 857 101 070
Prepayments - current portion 583 583
Cash and cash equivalents 185 409
Assets held for sale and discontinued operations - 13 160
Total assets 376 524 416 551
EQUITY AND LIABILITIES
Equity capital and reserves 247 631 311 970
Share capital 256 070 256 070
Shares to be issued 221 857 221 857
Accumulated loss (241 907) (179 508)
Available-for-sale financial assets reserve (1 311) (1 080)
Equity contribution 18 354 18 354
Non-controlling interests (5 432) (3 723)
Non-current liabilities 59 297 62 924
Borrowings - long term 35 035 39 057
Deferred taxation 24 262 23 867
Current Liabilities 69 596 36 290
Borrowings - short term 23 034 13 163
Trade and other payables 38 248 19 207
Bank overdraft 119 -
Taxation 8 195 3 920
Liabilities associated with assets held for sale
and discontinued operations - 5 367
Total equity and liabilities 376 524 416 551
Cents Cents
Net asset value per share 19.73 24.86
Net tangible asset value per share 19.73 21.81
Ordinary Shares in issue (including to be issued) 1 255 099 285 1 255 099 285
Diluted asset value per share 19.73 24.86
Diluted tangible asset value per share 19.73 21.81
Total shares (ordinary) and including to be issued 1 255 099 285 1 255 099 285
Abridged Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the For the
12 months 12 months
ended ended
31 December 31 December
2014 2013
Reviewed Audited
R’000 R’000
Revenue 7 648 19 459
Cost of sales (8 516) (9 728)
Gross margin (868) 9 731
Other income 1 013 426
Operating costs (17 033) (19 496)
Reversal of impairment – loans 2 052 -
Impairments - loans and claims (4 609) (24 724)
Impairment – goodwill (38 200) (6 800)
Results from operating activities (57 645) (40 863)
Investment revenue 1 775 297
Finance charges (7 048) (8 434)
Loss before taxation (62 918) (49 000)
Taxation (1 040) (2 892)
Loss from continuing operations (63 958) (51 892)
Loss from discontinued operations (150) (11 417)
Loss for the period (64 108) (63 309)
Other comprehensive loss
Items that may be subsequently reclassified to profit or loss
Net change in fair value of available-for-sale financial assets (231) (162)
Total comprehensive loss for the period (64 339) (63 471)
Attributable to:
– owners of the parent – continuing operations (62 480) (47 815)
– discontinued operations (150) (11 417)
(62 630) (59 232)
– non-controlling interest (1 709) (4 239)
Total comprehensive loss for the period (64 339) (63 471)
Loss for the period (64 108) (63 309)
Attributable to:
– owners of the parent – continuing operations (62 249) (47 653)
– discontinued operations (150) (11 417)
(62 399) (59 070)
– non-controlling interest (1 709) (4 239)
Loss for the period (64 108) (63 309)
Cents Cents
Basic loss per share from continuing operations (4.96) (3.80)
Diluted basic loss per share from continuing operations (4.96) (3.80)
Headline loss per share (1.72) (2.76)
Diluted headline loss per share (1.72) (2.76)
Weighted average ordinary shares in issue for basic and headline loss
per share 1 255 099 285 1 255 099 285
Weighted average ordinary and preference shares in issue for diluted
loss per share 1 255 099 285 1 255 099 285
Abridged Consolidated Statement of Cash Flow
As at As at
31 December 31 December
2014 2013
12 months 12 months
Reviewed Audited
R’000 R’000
Cash outflows from operating activities (12 051) (72 558)
Cash outflows from investing activities (713) (3 084)
Cash inflows from financing activities 12 421 77 528
Net (decrease)/increase in cash and cash equivalents (343) 1 886
Cash and cash equivalents at the beginning of the period 409 (1 477)
Cash and cash equivalents at the end of the period 66 409
Abridged Consolidated Statement of Changes in Equity
Share Share Treasury Shares Available Total
Capital Premium Shares To be For sale Retained Equity Non-
Issued Financial Earnings/ Contribution Controlling
Assets (Accumulated Interests
Reserve Loss)
R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000
Balance at
31 December 2012 8 697 247 373 (17 461) 239 318 (918) (100 180) 18 354 (18 354) 376 829
Total comprehensive loss for
the 12 months - - - - (162) (59 070) - (4 239) (63 471)
Increase in investment in
subsidiary - - - - - (20 258) - 18 870 (1 388)
Balance at 31 December
2013 8 697 247 373 (17 461) 239 318 (1 080) (179 508) 18 354 (3 723) 311 970
Total comprehensive loss for
the 12 months - - - - (231) (62 399) - (1 709) (64 339)
Balance at 31 December
2014 8 697 247 373 (17 461) 239 318 (1 311) (241 907) 18 354 (5 432) 247 631
COMMENTARY
The condensed consolidated statements have been prepared by W Voigt, the group's financial director.
1 Basis of preparation
The reviewed condensed consolidated statements have been prepared in accordance with the
framework concepts and the measurement and recognition requirements of International Financial
Reporting Standards ("IFRS"), the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and the Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council and the information as required by IAS 34: Interim Financial Reporting,
the Listings Requirements of the Johannesburg Stock Exchange and the Companies Act of South
Africa (Act 71 of 2008), as amended. The principal accounting policies, which comply with IFRS, have
been consistently applied in all material respects in the current and comparative years.
It should be noted that, as previously announced, JSE and shareholder approval or shareholder
ratification may be required for certain acquisitions and disposals, which have been properly
accounted for in accordance with the Companies Act and IFRS in the above results or in prior years.
This will be sought in due course once the JSE Investigations Division finalises its investigation and
advises the company that it may proceed with its circular to shareholders through the JSE Regulation
Division. Irrevocable undertakings to approve the transactions had been secured from the requisite
percentage of votes of shareholders at the time of the transactions. The shareholder register has not
changed substantially from the date of such undertakings.
The results for the period ended 31 December 2014 have been reviewed by Nolands Incorporated and
their unmodified report is available for inspection at the company's registered office.
2 Change in year end
The group changed its year end from December to March during the period under review.
3 Commentary on results
The revenue decreased by 60.7% in the period under review, cost of sales decreased by 12.5% while
operating costs decreased by 12.6%. The decrease in revenue is mainly attributable to performance
fees charged in the prior period and the decrease in revenue from the production of activated carbon.
The gearing ratio of the company increased from 16.7% to 23.4%.
31-Dec-14 31-Dec-13
R’000 R’000
4 Segment information
The basis of segmentation has remained the same as
used in the last annual financial statements.
Segment assets
Investment property – Leisure 54 219 54 765
Investment property – Industrial 325 325
Investment property - Commercial and retail 151 825 164 884
Manufacturing 64 484 104 438
Head office 105 671 92 139
Consolidated 376 524 416 551
The assets held for sale are reflected in the Investment
property - Commercial and Retail segment.
Segment liabilities
Investment property – Industrial 614 572
Investment property - Commercial and retail 46 578 48 818
Manufacturing 18 561 15 660
Head office 63 140 39 531
Consolidated 128 893 104 581
Segment revenues and results by reportable
segment
Net Net
Segment Segment
Continuing operations Revenue revenue
Investment Property – Industrial - -
Investment Property - Commercial and Retail 7 289 9 024
Manufacturing 359 2 235
Head Office - 8 200
From continuing operations 7 648 19 459
Discontinued operations
Investment Property - Commercial and Retail 1 315 10 147
The Head Office revenue decreased due to a risk and performance fee
being charged in 2013. This fee relates to a risk and performance fee
charged to Ruitersvlei Holdings (Pty) Ltd to assist the company to
avert liquidation and to assist with refinancing the company.
The Manufacturing revenue decreased due to more maintenance
downtime in 2014 with a resultant decrease in production.
Segment results after elimination of inter-segment revenue and
costs
Investment Property – Leisure (583) (583)
Investment Property – Industrial (42) (149)
Investment Property - Commercial and Retail 960 1 263
Manufacturing (6 053) (28 732)
Head Office (13 727) (5 864)
Net results from operating activities (19 445) (34 063)
Impairment of goodwill – manufacturing (38 200) (6 800)
(57 645) (40 863)
Investment revenue 1 775 297
Finance charges (7 048) (8 435)
Loss before tax (62 918) (49 003)
Taxation (1 040) (2 892)
Profit/(loss) from discontinued operations (150) (11 416)
Loss for the period (64 108) (63 311)
Other comprehensive loss (231) (162)
Total comprehensive loss (64 339) (63 473)
5 Investment property
There have been no material changes in investment property.
6 Assets held for sale and discontinued operations
The group disposed of the Madeline Street property.
7 Share capital
Share
capital
and share
premium Number of
Reconciliation R’000 shares
Shares issued – 31 December 2013 8 697 869 724 813
– ordinary share capital 8 697
– share premium 247 373
Total – 31 December 2014 256 070 869 724 813
8 Shares to be issued
Ordinary – 12 Bluezone property acquisitions 231 798 369 969 272
– settle liabilities 7 520 85 250 000
Total number of ordinary shares to be issued 239 318 455 219 272
Less: Treasury shares (17 461) (69 844 800)
Total 221 857 385 374 472
Total issued shares and shares to be issued 1 255 099 285
Weighted average shares in issue for basic and headline loss
per share 1 255 099 285
Weighted average shares in issue for diluted basic and headline
loss per share 1 255 099 285
9 Equity contribution
The equity contribution reflects the group's share of the recapitalisation of Carbon and
Processing Technologies (Pty) Limited by this company's non-controlling shareholders.
10 Borrowings
Total borrowings increased from R52.2 million to R58.1 million at 31 December 2014.
11 Loss from discontinued operations
The net cash outflows from the discontinued operations are as follows:
Cash inflows from operating activities 2 730 4 426
Cash inflows from investing activities 10 432 108 169
Cash outflows from financing activities (13 229) (113 481)
Net decrease in cash and cash equivalents (67) (886)
Cash and cash equivalents at the beginning of the period 67 953
Cash and cash equivalents at the end of the period - 67
The breakdown of the loss from discontinued operations is as
follows:
Revenue 1 315 10 147
Cost of sales (363) (2 327)
Gross margin 952 7 820
Other operating income 3 168 11
Operating expenses (2 782) (522)
Loss on disposal of subsidiaries (17) (17 389)
Results from operating activities 1 321 (10 080)
Investment income - 21
Finance charges (1 135) (1 360)
Profit/(loss) before taxation 186 (11 419)
Taxation (336) 2
Loss after taxation (150) (11 417)
12 Reconciliation of headline loss
Loss attributable to ordinary equity holders of the parent entity (62 399) (59 070)
Fair value adjustment (net of deferred tax) - 191
Impairment – goodwill 38 200 6 800
Loss on disposal of property 2 551 -
Loss on disposal of businesses 17 17 389
Headline loss (21 631) (34 690)
Earnings per share information cents cents
Basic loss per share (cents) (4.97) (4.71)
Basic loss per share from continuing operations (cents) (4.96) (3.80)
Basic loss per share from discontinued operations (cents) (0.01) (0.91)
Diluted basic loss per share (cents) (4.97) (4.71)
Diluted basic loss per share from continuing operations (4.96) (3.80)
(cents)
Diluted basic loss per share from discontinued operations (0.01) (0.91)
(cents)
Headline loss per share (cents) (1.72) (2.76)
Diluted headline loss per share (cents) (1.72) (2.76)
Weighted average shares in issue for basic and headline loss per
share 1 255 099 285 1 255 099 285
Weighted average shares in issue for diluted basic and headline
loss per share 1 255 099 285 1 255 099 285
13 Related party transactions
The immediate parent and ultimate controlling party of the group is
Bonatla Property Holdings Limited (Incorporated in the Republic of
South Africa).
Transactions and balances between the company and its
subsidiaries, which are related parties of the company, have been
eliminated on consolidation.
Balances between the group and other related parties are as
follows:
CDA Property Consultants (Pty) Limited
– loan account balance (27 753) (19 842)
– included in trade and other payables (2 902) (1 156)
Ruitersvlei Holdings (Pty) Ltd
– included in trade and other receivables 37 154 15 866
Buzz Way (Pty) Ltd
– loan account balance (27) (27)
Gemini Moon Trading 177 (Pty) Ltd
– loan account balance (1) (1)
Hail Investments (Pty) Ltd
– loan account balance (6 795) (5 966)
C Douglas
– included in trade and other payables (73) (44)
NG Vontas
– included in trade and other payables (141) (70)
RL Rainier
– included in trade and other payables (3) -
Dusty Moon Trading 225 (Pty) Limited
– loan account balance 10 339 9 968
Karbotech Carbon Technologies (Pty) Limited
– Loan account balance (114) (114)
– included in trade and other payables (2 052) -
Transactions between the group and other related parties are as
follows:
– asset and property management fee 900 1 251
– interest on loan account 3 612 2 316
– raising fee 1 140 125
– expenditure recouped (12) -
– consulting fee 1 320 1 320
Ruitersvlei Holdings (Pty) Ltd
– risk and performance fee - (8 200)
– interest on loan account
(1 775) (291)
Hail Investments (Pty) Ltd
– interest on loan account 829 926
C Douglas
– office rental 286 260
Dusty Moon Trading 225 (Pty) Limited
– impairment - 17 828
Karbotech Carbon Technologies (Pty) Limited
– royalties 100 600
IC MacLean is a director of Carbon and Processing Technologies
(Pty) Limited and a director/shareholder of Dusty Moon Trading 225
(Pty) Limited and Karbotech Carbon Technologies (Pty) Limited.
C Douglas is a director of Bonatla Property Holdings Limited, a
shareholder of Hail Investments (Pty) Limited and Buzz Way (Pty)
Limited and a director and shareholder of CDA Property
Consultants (Pty) Limited, Rara Avis Property Investments (Pty)
Limited and Gemini Moon Trading 177 (Pty) Limited. She has
control over Ruitersvlei Holdings (Pty) Limited through her interest
in and control of CDA Property Consultants (Pty) Limited and Rara
Avis Property Investments (Pty) Limited.
NG Vontas is a director of Bonatla Property Holdings Limited, Hail
Investments (Pty) Limited, Buzz Way (Pty) Limited and Ruitersvlei
Holdings (Pty) Limited.
RL Rainier is a director of Bonatla Property Holdings Limited, Hail
Investments (Pty) Limited and Buzz Way (Pty) Limited.
14 Non-controlling interests in subsidiaries
The information that follows is the aggregate total for all subsidiaries
with a non-controlling interest. The information is presented before
elimination of intra-group transactions and balances.
Names of subsidiary
Carbon and Processing Technologies (Pty) Limited
Principal place of business
Loskop Road, Estcourt, KwaZulu-Natal
Proportion of ownership interest held by non-controlling interest 10% 10%
Summarised financial information about the subsidiary
Statement of financial position
Non-current assets 53 923 53 677
Current assets 832 2 231
Non-current liabilities - -
Current liabilities (24 870) (16 956)
Inter-Group balances (61 198) (53 177)
Net liabilities (31 313) (14 225)
Carrying amount of non-controlling interests (5 432) (3 723)
Statement of profit or loss and other comprehensive income
Revenue 359 2 235
Loss (17 087) (37 223)
Loss allocated to non-controlling interests (1 709) (4 239)
Statement of cash flows
Cash flows from operating activities (7 795) (33 172)
Cash flows from investing activities (118) (113)
Cash flows from financing activities 7 661 36 080
15 Fair value estimation
Goodwill
The recoverable amount of this cash-generating unit is determined
based on a value-in-use calculation which uses cash flow
projections based on financial budgets approved by the directors
and a discount rate of 15% (before tax) per annum.
Due to continuous breakdowns experienced with the carboniser and
the high start-up costs incurred with the reactivation of this unit after
having effected repairs, management decided to cease the
carbonization process for the time being. As a result of this,
management decided to impair the goodwill attached to this cash-
generating unit in its entirety. As the continuous breakdowns
occurred randomly, the company has now decided to completely
overhaul the carboniser and is in the process of identifying suitable
contractors to perform this overhaul. It is expected that, with the
complete overhaul, the carboniser will perform in accordance with
its expected capacity and return the company to profitability.
The impairment of the underlying assets was considered given the
fact that goodwill is impaired. The scrap value of these assets
however is in excess of the carrying value.
Balance at the beginning of the year 38 200 45 000
Impairment (38 200) (6 800)
Balance at the end of the year - 38 200
Financial instruments
The determination of the fair value of financial instruments
measured as such in the statement of financial position is made
using a fair value measurement hierarchy. The fair value hierarchy
is identified in levels as follows:
- Level 1 represents those assets which are measured using
unadjusted quoted prices for identical assets.
- Level 2 applies inputs other than quoted prices that are
observable for the assets either directly (as prices) or indirectly
(derived from prices).
- Level 3 applies inputs which are not based on observable market
data (unobservable input).
The following table shows the group's financial assets and liabilities
that are measured at fair value.
Level 1 Level 2 Level 3 Total
2014 R'000 R'000 R'000 R'000
Financial assets measured at fair value
Investment property - - 93 535 93 535
Unlisted investments - - 785 785
- - 94 320 94 320
2013
Financial assets measured at fair value
Investment property - - 93 535 93 535
Unlisted investments - - 1 016 1 016
- - 94 401 94 401
Valuation techniques
The fair value of the investment properties was arrived at by using
the income method as an appropriate methodology to determine the
fair value of the property transactions for similar types of properties
based on similar methodologies to obtain a fair market value. These
investment properties are included in level 3.
The valuations, which conform to International Valuation Standards,
were arrived at by using the income method as an appropriate
methodology to determine the fair value of the property transactions
for similar types of properties based on similar methodologies to
obtain a fair market value. The capitalised yield method of valuation
at a market related yield after consideration of the tenant profile has
been used. The net income method (majority of the operational
property costs being recovered) used is based on the fact that the
property is substantially let and thus did not require assumptions in
regards to vacancy levels and time delays to complete
refurbishments for existing new tenants. This method is consistent
with the method used in prior years. The directors, in their opinion,
decided that there was no significant change in the value of these
investment properties from the dates of the valuations.
Balance at the beginning of the year 93 385 189 500
Additions 150 385
Disposals - (96 500)
Balance at the end of the year 93 535 93 385
The fair value of financial instruments that are not traded in an
active market is determined by using valuation techniques,
maximising the use of observable market data, where available, and
relying as little as possible on entity-specific estimates. If all
significant inputs are observable the instrument is included as Level
2; if one or more of the significant inputs is not based on observable
market data then the instrument is included as Level 3.
The fair value adjustments are recognised in other comprehensive
losses and transferred to an available-for-sale financial assets
reserve. On the disposal of these investments, the available-for-sale
financial assets reserve will be recycled through profit or loss.
Balance at the beginning of the year 1 016 1 178
Fair value adjustments recognised in other comprehensive losses (231) (162)
Balance at the end of the year 785 1 016
In order to secure the acquisition of certain subsidiaries, Bonatla
purchased a non-controlling share holding in the Investment
Property Holding Companies from certain investors.
The shareholdings in the three Investment Property Holding
Companies vary between 5.17% and 17.6%. The directors are of
the opinion that the investments are fairly valued and that no further
fair value adjustment is required.
The fair value of the investments is based on the net asset value of
the property holding companies.
Management did consider the sensitivity and is of the opinion that
no unobservable inputs used in the fair value measurement is
expected to change and result in a significantly higher of lower fair
values.
16 Significant events and transactions
A sale of shares agreement has been signed between Bonatla
Property Holdings Limited and Namavect Proprietary Limited in
terms of which Bonatla will acquire from Namavect its 75.1% stake
in a special purpose vehicle formed between Namavect and the
Northern Cape Department of Economic Development and Tourism
for the purposes of developing the Kimberley Diamond and
Jewellery Hub.
A sale of shares agreement has been signed between Bonatla
Property Holdings Limited and the Inqaba Trading Trust in terms of
which Bonatla will acquire from Inqaba its 75.1% stake in Lincoln
Meade Park Proprietary Limited who has acquired the rights to
develop 1 214 residential units in Pietermaritzburg through a Land
Availability Agreement that has been concluded with the Msunduzi
Municipality.
Bonatla has received a conditional offer from Fastpace (HK) Limited
for the acquisition of all the shares in Bonatla by way of a share-for-
share transaction equating to ZAR 0.50 (fifty cents) per Bonatla
share. This offer, which details certain conditions, is subject to
limited due diligence.
No estimate of the financial effects of the above can be reasonably
by made at this time.
17 Events after the reporting date
The JSE has imposed a public censure imposed by on the
company. This censure relates the lifting of the suspension of
Bonatla Securities in 2009.
Costs in an amount of R185 746 have been awarded against the
company in a matter between the company and Pamodzi Industrial
Retirement Fund and others.
18 Dividends
No dividends were declared during the period.
19 Management of the property portfolio
There are no appointed asset managers and this function is
managed by the company during the period under review.
The property management function is carried out by CDA Property
Consultants (Pty) Limited, of which the sole shareholder is C
Douglas, who also is an executive director of Bonatla.
20 Board of directors
$ Mr RL Rainier Chairman
# Mr MH Brodie deceased on 15 March 2014
* Mr NG Vontas CEO
* Ms C Douglas
* Mr W Voigt Financial Director
# Mr R Bernstein resigned on 14 April 2015
# Mr M Nurick appointed as director on 12 September 2014
# Mr Q D'Oliveira appointed as director on 21 September 2014
* executive directors
$ non-executive directors
# non-executive and independent directors
21 Contingent liabilities
Claim re: D King
Claim from previous executive director regarding issue of shares.
On the merits of the matter, the directors of Bonatla are of the
opinion that the claimant has little chance of succeeding in the
matter.
The directors are not aware of any further contingent liabilities that,
in their opinion, may have a material effect on Bonatla’s financial
position.
22 Future prospects
Against the tighter economic conditions which continue to prevail
and continue to exert increasing pressures on commercial property
industry, the company has rationalised its property portfolio mainly
composed of B grade properties with short leases and non strategic
locations.
The company is constantly re-evaluating the improvement of its
portfolio through the disposal of underperforming properties and the
acquisition of better quality assets. To that effect it is constantly
considering offers to purchase from third parties.
The company has also entered agreements already announced on
SENS to increase sizeably its portfolio with quality property
investments and developments. 2016 will see the completion of the
initial portfolio acquisitions.
8 May 2015
Johannesburg
Directors
NG Vontas, RL Rainier, C Douglas, W Voigt, M Nurick, Q D'Oliveira
Registered address
31, 8th Street, Houghton, Johannesburg, 2198
Company secretary
Arbor Capital Company Secretarial (Pty) Limited
Transfer secretaries
Computershare Investor Services (Pty) Limited
Auditors
Nolands Inc.
Sponsors
Arbor Capital Sponsors Proprietary Limited
Date: 08/05/2015 12:30:00 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
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