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DENEB INVESTMENTS LIMITED - Condensed consolidated results for the year ended 31 March 2015

Release Date: 22/05/2015 07:14
Code(s): DNB     PDF:  
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Condensed consolidated results for the year ended 31 March 2015

DENEB INVESTMENTS LIMITED
Registration number: 2013/091290/06 (Incorporated in the Republic of South Africa)
JSE share code: DNB     ISIN: ZAE000197398
("Deneb" or "the Group" or "the company")


Provisional condensed consolidated results
for the year ended 31 March 2015


STATEMENT OF FINANCIAL POSITION
as at 31 March
Rand thousands                                               Reviewed         Audited 
                                                                 2015            2014
ASSETS
Non-current assets                                          1 723 603       1 544 389 
Plant and equipment                                           312 365         286 364 
Owner-occupied property                                       283 566         335 718 
Investment property                                           766 804         669 619 
Intangible assets                                              23 761           9 197 
Goodwill                                                       17 271          14 204 
Other investments                                               3 644          43 709 
Long-term receivables                                         182 040         126 840 
Deferred tax assets                                           134 152          58 738 
Current assets                                              1 310 204       1 122 528 
Non-current assets held for sale                               57 933          54 536 
Inventories                                                   610 214         536 471 
Trade and other receivables                                   640 855         527 838 
Current tax assets                                                765             103 
Cash and cash equivalents                                         437           3 580 
Total assets                                                3 033 807       2 666 917 

EQUITY AND LIABILITIES
Total equity                                                1 868 727       1 488 169 
Stated capital/Share capital and share premium              1 716 713       1 496 346 
Reserves                                                      154 266          (8 177)
Equity attributable to owners of the company                1 870 979       1 488 169 
Non-controlling interest                                       (2 252)              - 
Non-current liabilities                                       109 428         149 757 
Deferred tax liabilities                                        3 009           6 047 
Post-employment medical aid benefits                          102 694          91 180 
Share-based liabilities                                             -          35 631 
Interest-bearing liabilities                                    2 800          16 658 
Operating lease accruals                                          925             241 
Current liabilities                                         1 055 652       1 028 991 
Current tax liabilities                                           868             151 
Post-employment medical aid benefits                            6 413           6 280 
Interest-bearing liabilities                                   45 063           3 193 
Trade and other payables                                      473 429         458 467 
Provisions                                                          -          23 116 
Bank overdraft                                                529 879         537 784 
Total liabilities                                           1 165 080       1 178 748 
Total equity and liabilities                                3 033 807       2 666 917 
Net asset value                                             1 870 979       1 488 169 
Net asset value per share (cents)                                 334             276


CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
for the year ended 31 March
Rand thousands                                               Reviewed         Audited
                                                                 2015            2014*
Continuing operations
Revenue                                                     2 665 399       2 140 324 
Cost of sales                                              (2 059 555)     (1 596 652)
Gross profit                                                  605 844         543 672 
Other income                                                  130 291         122 792 
Selling and distribution expenses                            (271 297)       (226 139)
Administrative and other expenses                            (271 313)       (220 483)
Operating profit before impairment reversal                   193 525         219 842 
Net impairment reversal of assets                               5 554               - 
Operating profit before finance costs                         199 079         219 842 
Finance income                                                 11 271           2 080 
Finance expenses                                              (58 158)        (49 094)
Profit before taxation                                        152 192         172 828 
Income tax income                                              72 405           4 899 
Profit from continuing operations                             224 597         177 727 
Discontinued operations
Loss from discontinued operations, net of tax                 (17 284)       (165 053)
Profit for the year                                           207 313          12 674 
Other comprehensive income, net of related tax
Items that will not be reclassified to profit or loss 
Revaluation of land and buildings                               7 095          19 193 
Post-employment medical aid benefits - actuarial loss          (6 875)         (4 295)
Items that are or may be reclassified to profit or loss
Fair value adjustment on available-for-sale financial assets    3 370          12 260 
Other comprehensive income, net of tax                          3 590          27 158 
Total comprehensive income for the year                       210 903          39 832 
Profit attributable to:
Owners of the company                                         208 750          12 674 
Non-controlling interest                                       (1 437)              - 
                                                              207 313          12 674 
Total comprehensive income attributable to:
Owners of the company                                         212 340          39 832 
Non-controlling interest                                       (1 437)              - 
                                                              210 903          39 832
* Restated (see note 2).


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 March
Rand thousands                                               Reviewed         Audited*
                                                                 2015            2014
Net cash flows from operating activities                     (154 926)         28 521 
Net cash flow from investing activities                       (58 930)        (50 921)
Net cash flow from financing activities                       218 618          (9 356)
Net change in cash and cash equivalents                         4 762         (31 756)
Cash and cash equivalents at the beginning of the year       (534 204)       (502 448)
Cash and cash equivalents at the end of the year             (529 442)       (534 204)
* Restated (see note 2).


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Rand thousands                 Stated 
                              capital/
                                Share                          Common
                          capital and           Other         control        Retained
                                share        reserves         reserve          income
Balance at 31 March 2013*   1 477 489         307 741          (7 452)       (316 947)
Total comprehensive income          -          31 453               -           8 379 
Profit                              -               -               -          12 674 
Other comprehensive income          -          31 453               -          (4 295)
Fair value adjustment on 
available-for-sale 
financial assets                    -          12 260               -               - 
Revaluation of land 
and buildings                       -          19 193               -               - 
Post-employment medical 
aid benefits - actuarial loss       -               -               -          (4 295)
Transfers to other reserves         -          (1 950)              -           1 580 
Reclassification of revaluation 
surplus                             -          (1 950)              -           1 580 
                                        
Transactions with owners of 
the company                     1 749               -               -         (22 531)
Share scheme - expense              -               -               -           4 511 
Share scheme - recharge 
revaluation                         -               -               -         (19 878)
Loan capitalisation             1 749               -               -               - 
Dividends paid                      -               -               -          (7 164)
Changes in ownership 
interest                       17 108               -          (8 450)              - 
Acquisition of subsidiary with 
non-controlling interests      17 108               -          (8 450)              - 
Reviewed
Balance at 31 March 2014    1 496 346         337 244         (15 902)       (329 519)
Total comprehensive income          -          10 465               -         201 875 
Profit                              -               -               -         208 750 
Other comprehensive income          -          10 465               -          (6 875)
Fair value adjustment on 
available-for-sale financial assets -           3 370               -               - 
Revaluation of land and buildings   -           7 095               -               - 
Post-employment medical aid benefits 
- actuarial loss                    -               -               -          (6 875)
Transfers to other reserves         -         (82 339)              -          82 339 
Reclassification of 
revaluation surplus                 -         (82 339)         82 339 
Transactions with owners of 
the company                   220 367               -               -         (49 897)
Share scheme - expense              -               -               -          (1 140)
Share scheme - recharge revaluation -               -               -             (94)
Share scheme - options 
exercised                       5 229               -               -          (5 229)
Loan capitalisation           140 577               -               -               - 
Share issue                    50 029               -               -               - 
Share incentive receivable 
capitalised                    24 532               -               -               - 
Dividends paid                      -               -               -         (43 434)

Changes in ownership interest       -               -               -               - 
Acquisition of subsidiary 
with non-controlling interests      -               -               -               - 
Balance at 31 March 2015    1 716 713         265 370         (15 902)        (95 202)
* Restated (see note 2).


Rand thousands                                                   Non-
                                                          controlling
                                                Total        Interest          Total
Audited
Balance at 31 March 2013*                   1 460 831               -       1 460 831 
Total comprehensive income                     39 832               -          39 832 
Profit                                         12 674               -          12 674 
Other comprehensive income                     27 158               -          27 158 
Fair value adjustment on available-
for-sale financial assets                      12 260               -          12 260 
Revaluation of land and buildings              19 193               -          19 193 
Post-employment medical aid 
benefits - actuarial loss                      (4 295)              -          (4 295)
Transfers to other reserves                      (370)              -            (370)
Reclassification of revaluation surplus          (370)              -            (370)
Transactions with owners of the company       (20 782)              -         (20 782)
Share scheme - expense                          4 511               -           4 511 
Share scheme - recharge revaluation           (19 878)              -         (19 878)
Loan capitalisation                             1 749               -           1 749 
Dividends paid                                 (7 164)              -          (7 164)
Changes in ownership interest                   8 658               -           8 658 
Acquisition of subsidiary with 
non-controlling interests                       8 658               -           8 658
Reviewed
Balance at 31 March 2014                    1 488 169               -       1 488 169 
Total comprehensive income                    212 340          (1 437)        210 903 
Profit                                        208 750          (1 437)        207 313 
Other comprehensive income                      3 590               -           3 590 
Fair value adjustment on available
-for-sale financial assets                      3 370               -           3 370 
Revaluation of land and buildings               7 095               -           7 095 
Post-employment medical aid benefits
 - actuarial loss                              (6 875)              -          (6 875)
Transfers to other reserves                         -               -               - 
Reclassification of revaluation surplus             -               -               - 
Transactions with owners of the company       170 470               -         170 470 
Share scheme - expense                         (1 140)              -          (1 140)
Share scheme - recharge revaluation               (94)              -             (94)
Share scheme - options exercised                    -               -               - 
Loan capitalisation                           140 577               -         140 577 
Share issue                                    50 029               -          50 029 
Share incentive receivable capitalised         24 532               -          24 532 
Dividends paid                                (43 434)              -         (43 434)
Changes in ownership interest                       -            (815)           (815)
Acquisition of subsidiary with 
non-controlling interests                           -            (815)           (815)
Balance at 31 March 2015                    1 870 979          (2 252)      1 868 727 
* Restated (see note 2).


CONDENSED CONSOLIDATED SEGMENTAL REPORT
                                                                  Operating
                                          Inter-               profit/(loss)
                                Gross    segment    External         before    Segment      Segment
Rand thousands                revenue    revenue     revenue  finance costs     assets  liabilities
Reviewed
2015
Continued operations 
Property                      129 114    (33 595)     95 519        153 082  1 129 952       15 219 
Branded Product 
Distribution                1 408 968       (863)  1 408 105         19 576    811 109      224 406 
Textiles                      718 310     (7 568)    710 742         40 614    521 469      150 593 
Industrials                   451 033          -     451 033         24 618    266 329       64 201 
Head office and centralised 
services                            -          -           -        (38 811)   300 275      708 600 
Total continued operations  2 707 425    (42 026)  2 665 399        199 079  3 029 134    1 163 019 
                                                            
Discontinued operations                                                            
Clothing                        9 581          -       9 581        (17 284)     4 673        2 061 
Total discontinued operations   9 581          -       9 581        (17 284)     4 673        2 061 
Total                       2 717 006    (42 026)  2 674 980        181 795  3 033 807    1 165 080 
                                                            
Audited                                                            
2014*                                                            
Continued operations                                                            
Property                      118 926    (47 379)     71 547        103 769  1 075 261       10 777 
Branded Product Distribution  957 545     (3 622)    953 923         37 359    550 763      174 271 
Textiles                      736 920    (46 767)    690 153         35 306    478 092      218 251 
Industrials                   424 701          -     424 701         35 115    271 467       89 953 
Head office and centralised 
services                            -          -           -          8 293    125 816      607 280 
Total continued operations  2 238 092    (97 768)  2 140 324        219 842  2 501 399    1 100 532
                                                           
Discontinued operations                                                            
Clothing                      627 651          -     627 651       (151 305)   165 518       78 216 
Total discontinued 
operations                    627 651          -     627 651       (151 305)   165 518       78 216 
Total                       2 865 743    (97 768)  2 767 975         68 537  2 666 917    1 178 748 
                                                            
* Restated (see note 2).                                                            


Statistics per share
In cents, where applicable                                   Reviewed         Audited
                                                                 2015            2014*
Number of shares in issue ('000)                              560 812         539 776
Weighted average number of shares in issue ('000)             547 315         539 776
Diluted weighted average number of shares in issue ('000)     553 242         539 776
                    
Basic earnings                                                  38,14            2,35
Continued operations                                            41,30           32,93
Discontinued operations                                         (3,16)         (30,58)
Headline earnings                                              (27,55)           4,36
Continued operations                                            30,35           29,37
Discontinued operations                                          (2,8)         (25,01)
Diluted earnings                                                37,74            2,35
Continued operations                                            40,86           32,93
Discontinued operations                                         (3,12)         (30,58)
Diluted headline earnings                                       27,26            4,36
Continued operations                                            30,03           29,37
Discontinued operations                                         (2,77)         (25,01)
Reconciliation between profit and headline earnings 
(net of taxation)                     
Profit attributable to equity holders of the parent ('000)    208 750          12 674 
Impairment of assets ('000)                                     7 102           3 324 
Reversal of impairment of assets ('000)                        (9 195)              - 
Insurance claim for capital asset ('000)                            -             (73) 
Remeasurement of investment property ('000)                   (56 449)        (16 861) 
Surplus on disposal of property, plant and equipment ('000)      (253)         (2 639)
Loss on disposal of property, plant and equipment ('000)          368          26 994 
Loss on disposal of investment property ('000)                    489              81 
Headline earnings ('000)                                      150 812          23 500
                    
* Restated (refer to note 2).                    


Notes to the reviewed condensed consolidated results for the year ended 31 March 2015
1  BACKGROUND
   On 1 December 2014 Deneb Investments Limited ("Deneb", "the Group" or "the company") 
   unbundled and listed on the JSE Limited (JSE) under the Financial Services - 
   Speciality Finance sector.

   Prior to the unbundling and listing, Deneb was a wholly-owned subsidiary of Seardel 
   Investment Corporation Limited (Seardel) and on 1 October 2014 acquired all of 
   Seardel's non-media businesses.

2  BASIS OF PREPARATION
   The reorganisation of Deneb represents a common control transaction as Hosken 
   Consolidated Investments Limited is the ultimate controlling entity before and after 
   the transaction. Common control transactions fall outside the scope of IFRIC 17 and 
   is not specifically addressed in IFRS. Accordingly, the financial results are presented 
   as if the restructuring had taken place at the start of the first reporting period 
   presented. The current year and comparative figures were prepared on a carve-out basis 
   by extracting the historical assets, liabilities, revenues and expenses reflected in 
   the consolidated financial statements of Seardel for the period prior to 1 October 2014.

   The provisional reviewed condensed consolidated results presented in this publication 
   have been prepared:
   -  on the basis that the current year and the prior year comparatives have been 
      restated on the assumption that the unbundling and business combination had occurred 
      at the start of the prior year reporting period in accordance with IAS 8; and
   -  in accordance with and containing the information as required by International 
      Accounting Standard (IAS) 34: Interim Financial Reporting, the SAICA Financial 
      Reporting Guides as issued by the Accounting Practices Committee, the Financial 
      Reporting Pronouncements as issued by the Financial Reporting Accountants Council 
      and are in compliance with the Listings Requirements of the JSE and the Companies 
      Act, No 71 of 2008, as amended.

     These results do not include all the information required for a complete set of 
     IFRS financial statements. However, selected explanatory notes are included to explain 
     events and transactions that are significant to an understanding of the changes in 
     the Group's financial position and performance since the carve-out historical financial 
     information that was published in the Deneb Pre-listing Statement for the year ended 
     31 March 2014. 

     These results have been prepared under the supervision of the Financial Director, 
     Gys Wege (CA)SA and have been reviewed by the Group's auditors, KPMG Inc.

3  SIGNIFICANT ACCOUNTING POLICIES, ASSUMPTIONS AND ESTIMATES
   The Group results have been prepared under the historical cost convention, except 
   for the revaluation of certain properties and financial instruments. The accounting 
   policies adopted are in terms of IFRS and are consistent with those followed in the 
   preparation of the Group's carve-out historical financial information for the year 
   ended 31 March 2014, except for the adoption of new standards and interpretations 
   effective as at 1 April 2014 and as contained in this note. The new standards have 
   no impact on the financial information.

   Taxation 
   The directors have considered the future profitability of the entities which contain 
   computed tax losses and to the extent that the entities are projected to produce 
   taxable income in the foreseeable future, a deferred tax asset has been recognised. 
   It is assumed that Seardel Group Trading Proprietary Limited (SGT), a wholly-owned 
   subsidiary of Deneb, will comprise mainly of the Group's property investments and 
   therefore the directors are of the view that the deferred tax asset is fully recoverable. 

   Share incentive
   With effect from 1 October 2014 the participants of the Seardel Share Incentive Scheme 
   (scheme) have no further rights under the Scheme and all unvested share options issued 
   in terms of the scheme have lapsed. This is as a result of the change in control of 
   the relevant employer company which came about as a result of an internal restructure. 
   The Deneb Investments Long Term Incentive Plan was established on 10 October 2014 and 
   adopted by the company and the employer companies on 13 October 2014. An initial tranche 
   of first allocation Deneb options totalling 22 351 660 have been granted to selected 
   participants who were holders of unvested Seardel share options at 30 September 2014. 

   Discontinued operations
   Operations classified as discontinued operations in the consolidated financial statements 
   consist of the clothing factory stores and the apparel manufacturing businesses, the 
   latter of which was disposed to a related party (an associated company of SACTWU), as 
   a going concern.

   The results of the discontinued operations have been separately disclosed on the face 
   of the statement of comprehensive income. Where practical, the prior year results have 
   been restated accordingly, in accordance with IAS 8.

4  INDEPENDENT REVIEW
   The provisional consolidated statement of financial position at 31 March 2015, the 
   condensed consolidated statement of profit or loss and other comprehensive income, 
   the consolidated statement of changes in equity, the condensed consolidated statement 
   of cash flows, the condensed consolidated segmental report and statistics per share 
   for the year then ended have been reviewed by KPMG Inc. Their unmodified report is 
   available for inspection at the registered office of the company. The board of directors
   take responsibility for the content of the provisional condensed consolidated results.

5  CAPITAL EXPENDITURE AND COMMITMENTS
   Rand thousands               Capital expenditure           Contractual commitments
                             Reviewed         Audited        Reviewed         Audited
                                 2015            2014            2015            2014
   Investment property         42 387          37 499          39 435           2 152 
   Land and buildings               -             196               -               - 
   Plant and equipment         57 189          29 255               -          14 578 
   Business combinations        1 400          26 500               -               - 
   Intangible assets           19 608           5 071               -          21 000
   Total                      120 584          98 521          39 435          37 730

   The above include amounts acquired through business combinations (refer note 6). 
   The capital commitments are expected to be incurred during the remainder of the 
   financial year ending 31 March 2016.

6  BUSINESS COMBINATIONS
   For the year ended 31 March 2015
   Subsidiaries acquired during the period
                                                                                                Net profit/
                                                                                     Revenue        (loss)
                                                    % voting                     contributed   contributed
                         Acquisition                interest                    to the Group  to the Group
   Subsidiary name       date          Segment      acquired   Description             R'000         R'000
                                                               Provider of
                                                               access security
                                                               solutions, 
   Limtech Biometric                   Branded                 specialising in 
   Solutions Proprietary               Product                 biometric fingerprint 
   Limited               1 April 2014  Distribution     100%   recognition            4 458            198 
                                                            
   Deneb Invest 141                    Branded
   Holdco Proprietary                  Product                 Distributor
   Limited               1 August 2014 Distribution      51%   of stationery          1 913           (680)

   Consideration transferred
   The following table summarises the consideration paid for the entities and the amount 
   of the assets acquired and liabilities assumed recognised at the acquisition date.

   Rand thousands                             Branded
                                             products     Industrials           Total 
   Cash                                             -               -               -
   Contingent consideration                         -           1 400           1 400
   Own shares issued                                -               -               -
   Total consideration                              -           1 400           1 400

   Identifiable assets acquired and liabilities assumed
   The following table summarises the recognised amounts of assets acquired and 
   liabilities assumed.

   Rand thousands                                                     Branded Product
                                                                        Distribution
   Recognised amounts of identifiable assets acquired and 
   liabilities assumed          
   Property, plant and equipment                                                   93
   Inventories                                                                    701
   Trade and other receivables                                                  3 211
   Cash and cash equivalents                                                      256
   Trade and other payables                                                    (6 673)
   Bank overdrafts                                                                (70)
   Total identifiable net assets                                               (2 482)
   Less: Non-controlling Interest                                                 815
   Goodwill                                                                     3 067
   Goodwill directly to equity as transaction with owners                           -
   Total consideration                                                          1 400
          
   Cash flow from this investing activity          
   Cash consideration transferred                                                   -
   Add: Cash and cash equivalents in the business acquired                        256
   Less: Overdraft in the business acquired                                       (70)
   Net cash inflow from investing operations                                      186

   For the year ended 31 March 2014
   Subsidiaries acquired during the period
                                                                                                Net profit/
                                                                                     Revenue        (loss)
                                                    % voting                     contributed   contributed
                         Acquisition                interest                    to the Group  to the Group
   Subsidiary name       date          Segment      acquired   Description             R'000         R'000
                                       Branded                 Online
   Clever Little Monkey                Product                 furniture
   Proprietary Limited   1 August 2013 Distribution     100%   and décor               2 898          (318) 

                                                               Extrusion and
   Custom Extrusion                                            weaving of
   Proprietary Limited   1 July 2013   Industrial       100%   polypropylene          66 888          6 637

   Consideration transferred
   The following table summarises the consideration paid for the entities and the amount 
   of the assets acquired and liabilities assumed recognised at the acquisition date.

   Rand thousands                             Branded
                                             products     Industrials           Total 
   Cash                                           500               -             500
   Contingent consideration                       786           8 106           8 892
   Own shares issued                                -          17 108          17 108
   Total consideration                          1 286          25 214          26 500

   Identifiable assets acquired and liabilities assumed
   The following table summarises the recognised amounts of assets acquired and 
   liabilities assumed.

   Rand thousands                             Branded
                                             products
                                         distribution     Industrials           Total 
   Recognised amounts of identifiable 
   assets acquired  and liabilities assumed                              
   Property, plant and equipment                   11          11 905          11 916
   Long-term receivables                            -              93              93
   Inventories                                     96           8 305           8 401
   Trade and other receivables                     48          13 002          13 050
   Cash and cash equivalents                       58               -              58
   Deferred liabilities                             -          (3 707)         (3 707)
   Deferred tax liability                           -          (1 023)         (1 023)
   Trade and other payables                      (111)        (11 506)        (11 617)
   Interest bearing liability                       -          (8 626)         (8 626)
   Bank overdrafts                                  -          (4 697)         (4 697)
   Total identifiable net assets                  102           3 744           3 846
   Common control reserve                           -           8 450           8 450
   Goodwill                                     1 184          13 020          14 204
   Total consideration                          1 286          25 214          26 500
                              
   Cash flow from this investing activity                              
   Cash consideration transferred                (500)              -            (500)
   Less: Cash and cash equivalents in the 
   business acquired                               58               -              58
   Add: Overdraft in the business acquired          -          (4 697)         (4 697) 
   Net cash inflow from investing operations     (442)         (4 697)         (5 139)

7  DISCONTINUED OPERATIONS
   During the prior year the directors resolved to dispose of the Group's apparel 
   manufacturing business to an associated company of SACTWU. The sale consisted of 
   all plant, equipment and inventory within the business. As a consequence the results 
   of the Group's apparel manufacturing and clothing factory stores are reported as 
   discontinued operations. The effect of the discontinued operations on the financial 
   results is disclosed as follows:

   Rand thousands                                                2015            2014
   Revenue                                                      9 581         627 651 
   Cost of revenue                                            (15 903)       (548 154)
   Gross loss                                                  (6 322)         79 497 
   Other income                                                   150           3 806 
   Distribution costs                                          (4 740)       (108 953)
   Administrative and other expenses                           (3 725)        (45 918)
   Operating loss before impairments and restructuring 
   and retrenchment costs                                     (14 637)        (71 568)
   Impairment of assets                                        (2 647)         (4 617)
   Restructuring and retrenchment costs                             -         (43 860)
   Loss on sale of plant, equipment and inventory                   -         (31 260)
   Operating loss before finance costs                        (17 284)       (151 305)
   Finance income                                                   -              66 
   Finance expenses                                                 -         (13 814)
   Loss before taxation                                       (17 284)       (165 053)
   Income tax expense                                               -               - 
   Loss for the period from discontinued operations           (17 284)       (165 053)

8  RELATED PARTIES
   The note below is an explanation of transactions and balances with related parties 
   that have significantly changed from note 30 in the carve-out historical financial 
   information in the Deneb Pre-listing Statement for the period ending 31 March 2014.

   Transactions with Hosken Consolidated Investments Limited (HCI) (ultimate holding 
   company), entities in which HCI has an interest and SACTWU (shareholder in Deneb 
   and HCI)
                                               Income/(expenses)         Balances receivable/(owing)
                                              Transaction values              Balance outstanding
   Rand thousands                             2015            2014            2015            2014
   Loan to SACTWU at prime: relating 
   to the disposal of the apparel 
   manufacturing operation                   7 508         (31 260)         68 070         107 588 
   Loan from SACTWU at prime: advance 
   relating to the disposal of the apparel 
   manufacturing operation                       -            (957)              -         (30 957)
   Loan from HCI at prime, repayable 
   on demand                                     -          (2 499)              -               - 
   Loan to HCI at prime, repayable on demand 2 040               -          21 083               - 
                                        
   During the prior year period the Group disposed of its South African apparel manufacturing 
   operations and advanced on loan account an amount equal to the purchase price to SACTWU. 
   No repayment period has been determined and as security SACTWU has ceded and assigned 
   in favour of Deneb its rights to receive payments and distributions from HCI and Seardel.

9  DILUTED WEIGHTED AVERAGE NUMBER OF SHARES
   The difference between the weighted average number of shares and the diluted weighted 
   average number of shares is due to the impact of the unexercised options under the 
   Group's share incentive scheme.

10  POST-PERIOD-END EVENTS
    There have been no reportable post-year-end events.

11  CHANGES TO THE BOARD
    Mr L Govender has been appointed as an independent non-executive director of the 
    company with effect from 11 March 2015.

12  RECONCILIATION BETWEEN ASSUMPTIONS USED IN THE PRE-LISTING STATEMENT AND THE COMPARATIVE 
    RESULTS OF DENEB FOR THE YEAR ENDED 31 MARCH 2015
    Deneb did not prepare financial statements in the normal course of business up to 
    and including 31 March 2014.

    Accordingly carve-out historical information was prepared for the Pre-listing Statement 
    published on 21 November 2014 on a basis of extracting historical assets, liabilities, 
    revenue and expenses reflected in the consolidated financial statements of Seardel.

    The financial statements of Deneb as presented was prepared on book value accounting 
    as the reorganisation presented a common control transaction due to HCI being the 
    ultimate controlling entity before and after the transaction.
    
    Book value accounting requires the assets acquired and the liabilities assumed through 
    the reorganisation to be accounted for using the book values in the financial statements 
    of the transferor, Seardel.

    The following assumptions were used in the basis of preparing the Pre-listing Statement:

    Taxation
    Carve-out historical information in the Pre-listing Statement assumed that the deferred 
    tax asset in Seardel Group Trading is fully recoverable. This assumption was applied 
    retrospectively from 31 March 2011 as noted in the basis of preparation.

    The assets acquired through the reorganisation was accounted for at the book value in 
    the financial statements of Seardel and the deferred tax asset in Seardel Group Trading 
    was assessed as fully recoverable in the current period in the financial statements.

    Financial effect:
                                                                                Deneb
                                                          Pre-listing       financial
                                                            Statement      statements
                                                        31 March 2014   31 March 2014
    Rand thousands
    Statement of financial position Dr/(Cr)
    Deferred tax asset                                        141 399          58 738
    Statement of profit or loss and other 
    comprehensive income
    Income/(expenses)                                         (15 506)         21 228

    Discontinued operations
    Operations classified as discontinued operations on 31 March 2014 in the consolidated 
    financial statements of Seardel consisted of the apparel manufacturing businesses which 
    was disposed of to a third party as a going concern during the period ending 31 March 2014.

    For the purpose of the preparation of the carve-out historical financial information 
    of the Pre-listing Statement it was assumed that the sale of the apparel businesses 
    took place on 31 March 2011. Accordingly also no discontinued operations were disclosed 
    in the statement of profit or loss and other comprehensive income in the Pre-listing Statement.

    Assets and liabilities of the business that were not part of the sale were disclosed 
    as "Net receivables from discontinued operations" in the Pre-listing Statement 
    (refer to note 35 of the Pre-listing Statement).

    Deneb's financial statements used book value accounting and therefore the sale occurred 
    during the 2014 financial period and the assets and liabilities were disclosed on the line 
    items as per Seardel's financials.
                                                                                
    Financial effect:
                                                                                Deneb
                                                          Pre-listing       financial
                                                            Statement      statements
                                                        31 March 2014   31 March 2014
    Rand thousands
    Statement of financial position Dr/(Cr)
    Loans receivable from SACTWU                                    -          76 631
    Trade and other receivables                                     -          56 777
    Trade and other payables                                        -         (57 712)
    Provisions                                                      -         (23 309)
    Net receivable from discontinued operations                52 387               -
    Net assets and liabilities                                 52 387          52 387
                                                                                
    Statement of profit or loss and other comprehensive income
    Loss from discontinued operations, net of tax                   -        (159 901)
                                                                                
    Furthermore, the factory shops of the apparel manufacturing business was discontinued 
    during the period ending 31 March 2015 and accordingly the comparative figures in the 
    March 2014 financial statements were restated. At the period the Pre-listing Statement 
    were issued the factory shops were still considered continued operations.
                                                                                
    Financial effect:
                                                                                Deneb
                                                          Pre-listing       financial
                                                            Statement      statements
                                                        31 March 2014   31 March 2014
    Rand thousands  
    Statement of profit or loss and other comprehensive income
    Revenue                                                    23 195               -
    Gross profit                                                6 268               -
    Net loss                                                   (5 151)              -
    Loss from discontinued operations, net of tax                   -          (5 151)
                                                                                
    Share-based benefits
    With effect from 1 October 2014 the participants of the Seardel Share Incentive 
    Scheme had no further rights under the scheme and all unvested share options issued 
    in terms of the scheme have lapsed. This is as a result of the change in control of 
    the relevant employer company which came about as a result of the disposal of 
    shareholding by Seardel to Deneb.

    The Deneb Share Incentive Scheme was established on 10 October 2014.

    Seardel required the subsidiaries to make payment of the rights. This type of 
    intra-group payment arrangement is commonly referred to as a "recharge arrangement".

    The Pre-listing Statement assumed that Deneb company already received the receivable 
    owing by the subsidiaries of the Group from the recharge arrangement.

    In the financial statement of Deneb this share-based liability is shown separately on 
    the face of the balance sheet as at 31 March 2014 as it was only transferred from 
    Seardel to Deneb on 1 October 2014.

    Financial effect:
                                                                                Deneb
                                                          Pre-listing       financial
                                                            Statement      statements
                                                        31 March 2014   31 March 2014
    Rand thousands   
    Statement of financial position Dr/(Cr)
    Share-based liability                                           -          35 631
                                                                                
    Shares in Seardel Investment Corporation held by Seardel Group Trading
    All shares held by Seardel Group Trading in Seardel were disclosed as treasury shares 
    in the Seardel consolidated financial statements.
                                                                                
    In the Deneb financial statements these shares were disclosed as investment and revalued 
    to fair value through equity each period-end.

    The shares were given as dividend in specie to Seardel on 10 November 2014 at value 
    of R43,43 million.

    Financial effect:
                                                                                Deneb
                                                          Pre-listing       financial
                                                            Statement      statements
                                                        31 March 2014   31 March 2014
    Rand thousands 
    Statement of financial position Dr/(Cr)
    Investments                                                     -          40 065
    Statement of profit or loss and other comprehensive income
    Fair value adjustment on available for sale, net of tax                    12 260
                                                                                
    Reconciliation between the Pre-listing Statement and the Deneb financials for the 
    period ending 31 March 2014 based on the above assumptions
                                                                                
                                  Statement of profit        Weighted       Earnings/
                                    or loss and other         average        loss per
                                 comprehensive income       number of           share
                                                R'000          shares          (cents)
    Pre-listing Statement profit              133 973         539 776           24,82
    Continued operations                      133 973                           24,82
    Discontinued operations                         -                               -
                                                                                
    Taxation                                   36 734                            6,81
    Discontinued operations 
    - apparel manufacturing business         (159 901)                         (29,62)
    Easywear restated as discontinued 
    operations                                      -                               -
    Deferred tax through income statement 
    due to fair value of investments            1 868                             ,35
                                                                                
    Deneb financial statement profit           12 674                            2,35
    Continued operations                      177 727                           32,93
    Discontinued operations                  (165 053)                         (30,58)

13  DISTRIBUTION
    Notice is hereby given that a final distribution of three cents (gross) per ordinary 
    share in respect of the 12 months ended 31 March 2015 has been declared out of capital 
    reserves through the reduction of contributed tax capital (distribution).

    In compliance with the requirements of Strate and the JSE Limited, the following dates 
    are applicable:
    -  Distribution declared                    Thursday, 22 May 2015
    -  Last day to trade cum distribution         Friday, 5 June 2015
    -  Shares trade ex distribution               Monday, 8 June 2015
    -  Record date                               Friday, 12 June 2015
    -  Payment date                              Monday, 15 June 2015

    Share certificates may not be dematerialised or rematerialised between Monday, 
    8 June 2015 and Friday, 12 June 2015, both days inclusive. 

Signed for and on behalf of the board


Stuart Queen                    Gys Wege          
Chief Executive Officer          Financial Director

Cape Town
22 May 2015


Commentary
The businesses that comprise Deneb are the non-media businesses that were unbundled out 
of Seardel Investment Corporation Limited (Seardel) and separately listed on the JSE Limited 
(JSE) effective 1 December 2014. Although the Deneb Group has only been in existence in its 
current form for a few months the common control principle allows us to report the numbers 
for the 12 months ended 31 March 2015 and the comparative period as if the Group had been in 
its current form for the entire period. We believe that reporting the numbers in this way 
will be the most meaningful for users of the information. 

The results to March 2015 reflect the two main themes that have been recurring in the results 
for the past few years. 

-   The first is that the economic environment, particularly for the manufacturing businesses, 
    remains challenging. Indeed the past financial year, with the industrial action that took 
    place within our own businesses as well as those of our customer and supplier bases coupled 
    with inconsistent electricity supply, has proven to be particularly challenging.
-   The second is that we have been working diligently to make incremental changes to the 
    businesses so that they become more resilient to adversity. These incremental changes take 
    the form of discontinuing unprofitable businesses or product lines whilst, on the other hand,
    looking to enter new growth areas and diversify and deepen quality revenue streams. 

The above factors have meant that we were able, despite the tough conditions, to report an 
attributable profit of R209 million.

Although details of the underlying factors affecting the results are dealt with in the 
commentary under the various segments, it should be noted that the attributable profit as 
reported contains the following notable items:

1  R72 million of tax income was recorded in the current year through the recognition of a 
   deferred tax asset arising from historic assessed losses;
2  Investment properties were revalued up by R70 million in the current period against 
   R21 million in the prior period;
3  R17 million of losses from discontinued operations were recorded relating to the closure 
   of the Group's factory stores. This business was the last remnant of the Group's apparel 
   manufacturing business which was disposed of in the prior financial period; and
4  The comparative financial results included R38 million of once-off income relating to the 
   settlement of a legal claim.

Overall we view the current year's results as mixed. On the one hand, we are pleased to report 
the strong attributable profit, however, as is explained in the segmental commentary below, 
the year was not without its challenges. That being said, the fact that the Group is quite 
strongly profitable in a challenging year is testament to the improving resilience of the various 
businesses. 

Much work has gone into improving the balance sheet over the past few years. To this end, 
interest-bearing debt stands at 19% of total asset value at year-end, down from 21% a year ago. 
We believe that the quality of assets reflected on the balance sheet has also improved over the 
last few years with properties now representing 37% of the R3 billion total asset value, 
whilst plant and equipment comprises a little over 10%. 

We are pleased to be in a position to recommence dividend payments to our long-suffering and, 
mercifully, patient shareholders. A three cents per share distribution has been declared. 

Property segment
The value of Deneb's total property portfolio increased by 4% to just over R1.1 billion. 
This growth is after accounting for R68 million of disposals during the period, countered by 
development expenditure of R43 million. 

Revenue increased by 9% to R129 million, whilst revenue from external tenants increased by 34% 
to R96 million and now represents 74% of the total revenue for this segment. 

Operating profit before finance costs increased by 48% to R153 million, up from R104 million in 
the prior period. However, it should be noted that the current year's profit number includes a 
R70 million upwards revaluation of investment properties against R21 million in the prior period. 
The upward revaluations are testament to the success of the New Germany and Mobeni Industrial Park 
developments.

Branded Product segment
The Branded Product segment recorded revenue growth of 47% to R1,4 billion however operating 
profit before finance costs declined 52% to R20 million.

The performance of this segment was affected by our decision to invest heavily in Seartec, 
our office automation and electronics distribution business. This investment included 
strengthening the management structures, expanding the product profile, improving the facilities 
by moving into higher-profile properties in a number of the major centres, spending on the 
IT backbone of the business and increasing its exposure by upping the marketing spend. 
These interventions increased the cost base quite significantly, but we are confident that 
the investments made will see enduring benefits over the medium term. 

The performance of this segment was also affected by challenges in the toy business 
notwithstanding continued turnover growth. The rapid depreciation of the Rand leading up to 
the busy Christmas season put pressure on margins and this, coupled with an increased level 
of returns post Christmas, saw operating profits fall below those achieved in the prior period. 

On the positive side, the distribution of interactive gaming delivered a strong performance, 
with operating profits up year on year on the back of securing the rights to distribute 
Electronic Arts games. 

In addition, the acquisition of the sports brands, mentioned in the prior year report, 
saw Brand ID's performance improve markedly. This start-up business has now reached breakeven, 
in line with expectation, and we anticipate that it will become a contributor going forward. 

As a more general point on this segment, we have previously mentioned that we were continuing 
to invest in marketing and distribution platforms, with much of this investment being ahead of 
expected future revenue growth. In the main, these investments have been completed and we would 
anticipate that, in the absence of any new acquisitions, the operating cost base will remain more 
stable over the next few years. Should the anticipated turnover growth materialise, we should see 
an improvement in operating margins. 

Textile segment
Trading conditions for the businesses within this sector remained challenging throughout the period under review. 

Although operating profit is up 15% this year's profit includes an impairment reversal of 
R13 million. Adjusting for this non-recurring item sees operating profit fall by 21% to 
R28 million. The performance of this segment was influenced by a reduction in the value of public 
procurement tenders awarded, which directly affected revenues resulting in a reduction of 3%. 
Rising energy costs, downtime as a result of loadshedding and a strike at one of the operations 
in this segment, as well as industrial action in the customer and supplier base, all combined to 
negatively affect the result. 

Having said that, given the problems experienced, we are pleased at how well the textile 
businesses withstood the tough year and this reflects the work that the management teams within 
these entities have done to improve the quality of revenue and operating efficiencies. 

Operating margins remain wafer-thin and are weighed down by the last of the loss-making 
businesses in our manufacturing space. Progress is being made on a number of new initiatives 
that will look to address the margin concern. 

Industrial segment
Although revenue was up 6%, operating profit was down 30% to R25 million. However, the current 
year's profit includes an asset impairment of R3 million relating to an asset that is surplus to 
requirements and is to be sold to free up property space for external rental. Adjusting for the 
once-off impairment sees operating profit falling by 20%. 

The decline in profitability within this segment is for the same reasons as those mentioned for 
the textile segment. As with the textile businesses, we are pleased that the initiatives taking 
place within this segment resulted in relatively stable results in spite of the headwinds 
experienced. 

Sponsor: PSG Capital

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