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Provisional Audited Condensed Annual Consolidated Financial Statements for Year Ended 31 March 2015 and Cash Dividne
MICROmega Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1998/003821/06)
JSE Share code: MMG ISIN: ZAE000034435
(“MICROmega” or “the company” or “the group”)
PROVISIONAL AUDITED CONDENSED ANNUAL CONSOLIDATED FINANCIAL STATEMENTS FOR YEAR ENDED
31 MARCH 2015 AND CASH DIVIDEND
AUDITED CONDENSED GROUP STATEMENT OF PROFIT AND LOSS
Audited Audited Reviewed
12 months 15 months 12 months
ended ended ended
31 March 31 March 31 December
2015 2014 2013
R’000 R’000 R’000
Revenue 1 035 683 907 532 731 716
Cost of sales (576 068) (549 241) (457 987)
Gross profit 459 615 358 291 273 729
Other net income/(expenses) 16 590 119 237 36 058
Distribution expenses (4 170) (5 692) (4 280)
Administration expenses (306 093) (304 337) (230 299)
Results from operations 165 942 167 499 75 208
Finance income 5 041 6 450 4 993
Finance cost (1 767) (5 026) (4 187)
Share of profit of equity accounted associate 1 978 1 392 1 336
Profit before tax 171 194 170 315 77 350
Tax expense (44 823) (33 051) (22 495)
Profit for the period 126 371 137 264 54 855
Profit attributable to:
Owners of the parent 110 653 134 135 51 190
Non-controlling interest 15 718 3 129 3 665
126 371 137 264 54 855
Attributable earnings per share (cents)
Basic 101.27 130.44 48.88
Diluted 99.45 128.37 48.08
Headline 101.30 62.91 49.29
AUDITED CONDENSED GROUP STATEMENT OF OTHER COMPREHENSIVE INCOME
Audited Audited Reviewed
12 months 15 months 12 months
ended ended ended
31 March 31 March 31 December
2015 2014 2013
R’000 R’000 R’000
Profit for the period 126 371 137 264 54 855
Other comprehensive income:
Foreign currency translation differences 1 461 1 175 592
Revaluation of property (2 500) - -
Reversal of deal difference reserve (1 000) - -
Income tax on other comprehensive income 465 - -
Total comprehensive income for the period 124 797 138 439 55 447
Total comprehensive income attributable to:
Owners of the parent 109 079 135 310 51 782
Non-controlling interest 15 718 3 129 3 665
124 797 138 439 55 447
Reconciliation of headline earnings:
Profit attributable to owners of the parent 110 653 134 135 51 190
(Profit)/loss on disposal of property, plant and equipment (68) 24 (228)
Loss on disposal of investments in subsidiaries - 653 653
Impairment of loans receivable - 1 405 -
Reversal of impairment of loans receivable - (3 504) -
Bargain purchase - (68 023) -
Impairment of intangible assets 95 - -
Headline earnings 110 680 64 690 51 615
Weighted average number of shares (000s) 109 265 102 830 104 727
Diluted weighted average number of shares (000s) 111 270 104 493 106 492
Total number of shares in issue (000s) 111 504 105 184 100 817
AUDITED CONDENSED GROUP STATEMENT OF FINANCIAL POSITION
Audited Audited Reviewed
As at As at As at
31 March 31 March 31 December
2015 2014 2013
R’000 R’000 R’000
ASSETS
Non-current assets 540 579 414 081 208 523
Property, plant and equipment 58 711 47 718 47 231
Intangible assets 432 242 305 760 103 141
Investments in associates 12 857 10 879 10 000
Other investments 283 208 192
Other financial assets - 9 167 -
Deferred tax assets 36 486 40 349 47 959
Current assets 439 629 279 842 252 339
Inventories 28 377 13 292 2 607
Trade and other receivables 239 225 142 581 110 428
Income tax receivable 8 251 7 455 -
Other financial assets 15 891 7 668 12 619
Cash and cash equivalents 147 885 108 846 126 685
TOTAL ASSETS 980 208 693 923 460 862
EQUITY AND LIABILITIES
EQUITY 671 673 504 269 329 798
Share capital and share premium 266 203 207 666 167 578
Other reserves 6 261 5 590 6 319
Retained earnings 330 218 240 863 155 930
Non-controlling interest 68 991 50 150 (29)
LIABILITIES
Non-current liabilities 73 125 57 227 18 154
Other financial liabilities 11 371 11 491 10 898
Deferred vendor payments 13 333 3 484 3 484
Deferred tax liabilities 48 421 42 252 3 772
Current liabilities 235 410 132 427 112 910
Trade and other payables 166 674 117 364 64 315
Other financial liabilities 3 101 4 351 4 610
Income tax payable 9 688 6 863 18 925
Deferred vendor payments 55 947 3 849 25 060
TOTAL LIABILITIES 308 535 189 564 131 064
TOTAL EQUITY AND LIABILITIES 980 208 693 923 460 862
Net asset value per share (cents) 540.50 431.74 327.15
Net tangible asset value per share (cents) 152.86 141.05 224.85
AUDITED CONDENSED GROUP STATEMENT OF CASH FLOW
Audited Audited Reviewed
12 months 15 months 12 months
ended ended ended
31 March 31 March 31 December
2015 2014 2013
R’000 R’000 R’000
Cash flow from operating activities excluding working capital 151 541 74 129 64 563
changes
Movement in working capital (47 845) (7 249) (41 795)
Cash flow from investing activities (70 981) (46 837) (11 669)
Cash flow from financing activities 6 324 (18 924) 7 859
Increase in cash and cash equivalents 39 039 1 119 18 958
Cash and cash equivalents at the beginning of the period 108 846 107 727 107 727
Cash and cash equivalents at the end of the period 147 885 108 846 126 685
AUDITED CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Share Share Revaluation Foreign Deal difference Share Retained Total Non-controlling Total equity
capital premium reserve currency reserve based earnings interest
translation payment
reserve reserve
R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000 R’000
Balance at 31 December 2012 928 178 241 9 970 128 1 000 3 736 95 392 289 395 18 654 308 049
Total comprehensive income for the period
Profit for the period - - - - - - 134 135 134 135 3 129 137 264
Other comprehensive income - - (75) 1 175 - - 75 1 175 - 1 175
Foreign currency translation differences - - - 1 175 - - - 1 175 - 1 175
Realisation of revaluation reserve through depreciation - - (75) - - - 75 - - -
Transactions with owners recorded directly in
equity 124 28 373 (9 406) - - (938) 11 541 29 694 28 970 58 664
Capitalisation issue 124 (124) - - - - - - - -
Treasury shares purchased (45) (12 098) - - - - - (12 143) - (12 143)
Share based payment transactions 3 2 503 - - - (938) 2 135 3 703 - 3 703
Dividends paid to non-controlling interest - - - - - - - - (10 566) (10 566)
Acquisition of subsidiaries 42 38 092 - - - - - 38 134 52 433 90 567
Derecognition of subsidiary - - (9 406) - - - 9 406 - (12 897) (12 897)
Changes in ownership interest in subsidiaries
Acquisitions on non-controlling interest without a change
in control - - - - - - (280) (280) (603) (883)
Balance at 31 March 2014 1 052 206 614 489 1 303 1 000 2 798 240 863 454 119 50 150 504 269
Total comprehensive income for the period
Profit for the period - - - - - - 110 653 110 653 15 718 126 371
Other comprehensive income - - (2 035) 1 461 (1 000) - - (1 574) - (1 574)
Foreign currency translation differences - - - 1 461 - - - 1 461 - 1 461
Revaluation of property - - (2 035) - - - - (2 035) - (2 035)
Realisation of revaluation reserve through depreciation - - (3) - - - 3 - - -
Realisation of deal difference reserve - - - - (1 000) - - (1 000) - (1 000)
Transactions with owners recorded directly in
equity 63 58 474 - - - 2 248 (21 301) 39 484 3 123 42 607
Treasury shares purchased (14) (22 492) - - - - - (22 506) - (22 506)
Share issue 52 51 412 - - - - - 51 412 - 51 412
Share based payment transactions 9 7 176 - - - 2 248 (133) 9 300 - 9 300
Acquisition of subsidiaries 16 22 378 - - - - - 22 394 6 699 29 093
Dividends paid - - - - - - (21 168) (21 168) - (21 168)
Dividends paid to non-controlling interest - - - - - - - - (3 576) (3 576)
Balance at 31 March 2015 1 115 265 088 (1 549) 2764 - 5 046 330 28 602 682 68 991 671 673
NOTES TO THE GROUP FINANCIAL INFORMATION
1. Basis of preparation
These provisional audited condensed annual consolidated financial statements for the year ended 31 March 2015 are
prepared in accordance with the framework concepts and the recognition and measurement criteria of International Financial
Reporting Standards (IFRS), its interpretations adopted by the International Accounting Standards Board (IASB), the
presentation and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Reporting Pronouncements as issued by Financial Reporting Standards Council, IAS 34 – Interim Financial Reporting, the
Listings Requirements of the JSE Limited and the requirements of the Companies Act of South Africa (Act 71 of 2008), as
amended. The provisional audited condensed annual consolidated financial statements are prepared in accordance with the
going concern principle under the historical cost basis as modified by the fair value accounting of certain assets and liabilities
where required or permitted by IFRS. The provisional audited condensed annual consolidated financial statements have
been prepared under the supervision of Russell Dick, CA (SA), the Financial Director and have been audited by the
company’s auditors.
The provisional audited condensed annual consolidated financial statements are extracted from audited information and are
available for inspection at the company’s registered office.
The directors take full responsibility for the preparation of the report and confirm the financial information has been correctly
extracted from the underlying audited annual consolidated financial information.
All financial information presented in South African Rand has been rounded to the nearest thousand.
2. Significant accounting policies
These provisional audited condensed annual consolidated financial statements have been prepared using accounting
policies that comply with IFRS. The accounting policies used are consistent with those used in the audited consolidated
financial statements for the period ended 31 March 2014.
3. Audit opinion
The annual consolidated financial statements were audited by the group’s auditors, Nexia SAB&T, and their unqualified audit
report is available for inspection at the group’s registered office.
4. Business combinations
Mubesko Africa Proprietary Limited
On 1 June 2014, the group acquired a 50% interest in Mubesko Africa Proprietary Limited for a consideration of R27.4
million. Goodwill to the value of R20.7 million was accounted for. The net assets acquired amounted to R13.4 million and a
non-controlling interest of R6.7 million was recognised
Action Training Academy Proprietary Limited and Action Training Consulting Proprietary Limited
On 1 September 2014, the group acquired 100% interest in Action Training Academy Proprietary Limited and Action Training
Consulting Proprietary Limited for a consideration of R28.9 million. Goodwill to the value of R25.6 million was accounted for.
The net assets acquired amounted to R3.3 million.
R-Data Proprietary Limited
On 1 October 2014, the group acquired 100% interest in R-Data Proprietary Limited for a consideration of R12.9 million.
Goodwill to the value of R9.8 million was accounted for. The net assets acquired amounted to R3.1 million.
Aspirata Auditing Testing and Certification Proprietary Limited
On 1 March 2015, the group acquired 100% interest in Aspirata Auditing Testing and Certification Proprietary Limited for a
consideration of R41.8 million. Goodwill to the value of R21.5 million was accounted for. The net assets acquired amounted
to R20.3 million.
The fair value of assets acquired and liabilities assumed relating to the above business combinations are subject to change
should additional information become available within the 12 month re-measurement period from date of acquisition.
5. Segment information
Audited Audited Reviewed
12 months 15 months 12 months
ended ended ended
31 March 31 March 31 December
2015 2014 2013
R’000 R’000 R’000
SEGMENT REVENUE
Occupational health and safety 333 253 330 426 274 807
Labour supply 264 071 340 431 279 645
Information technology 399 605 205 215 144 863
Financial services 38 378 33 162 28 152
Holdings and consolidated 376 (1 702) 4 249
Total revenue 1 035 683 907 532 731 716
SEGMENT PROFIT / (LOSS)
Occupational health and safety 65 545 59 303 45 042
Labour supply 2 125 11 988 10 035
Information technology 59 123 24 701 17 547
Financial services 5 672 1 750 2 960
Holdings and consolidated (21 812) 36 393 (24 394)
Total profit 110 653 134 135 51 190
SEGMENT ASSETS
Occupational health and safety 409 512 358 769 186 100
Labour supply 60 566 67 605 59 440
Information technology 283 969 183 433 123 776
Financial services 71 914 61 426 59 495
Holdings and consolidated 154 247 22 690 32 051
Total assets 980 208 693 923 460 862
6. Corporate Governance
MICROmega has embraced the recommendations of the King III Report on governance and strives to provide reports to
shareholders that are timely, accurate, consistent and informative.
7. Subsequent events
No other significant events have occurred in the period between the reporting date and the date of this report.
8. Commentary on results
We are pleased to have delivered another year of well above market growth in earnings and dividends. Our ongoing strategy
of substantially investing in our own intellectual product continues to benefit us in our chosen market segments. This has
greatly enhanced our client retention and the preservation of strong margins.
It is especially gratifying to have increased our cash flow from operations at an even greater rate than the more than doubling
of headline earnings. This enabled us to increase our dividend by 75%. Cash based earnings are the holy grail for any
business and it is a great testimony to the group operational executives that they have been able to achieve this while
simultaneously meeting the demanding growth targets that have been set.
At this time, in the new financial year, we have some visibility into our likely performance. We are confident that we will
generate above average growth in headline earnings and dividends again this year.
9. Cash dividend
Notice is hereby given that the directors have declared a final gross cash dividend of 35 cents for the financial year ended 31
March 2015, which is adjusted for withholding tax. The final dividend has not been included as a liability in these provisional
condensed annual consolidated financial statements as it was declared subsequent to year end.
The final dividend for March 2015 is payable to all shareholders on the Register of Members on Friday, 19 June 2015. In
terms of the dividends tax, effective 1 April 2012, the following additional information is disclosed:
- This is a dividend as defined in the Income Tax Act, 1962;
- the local dividend tax rate is 15%;
- the dividends will be payable from income reserves;
- the dividend tax to be withheld by the company amounts to 5.25 cents per share;
- therefore the net dividend payable to shareholders who are not exempt from dividends tax amounts to 29.75 cents per
share, while the gross dividend payable to shareholders who are exempt from dividends tax amounts to 35 cents per
share; and
- the issued share capital of the company at the declaration date comprises 114 915 089 ordinary shares; and the group´s
income tax reference number is 9457/323/84/9
The salient dates will be as follows:
Declaration date: Thursday, 28 May 2015
Last day to trade: Thursday, 11 June 2015
Shares trade ex-dividend: Friday, 12 June 2015
Record date: Friday, 19 June 2015
Payment date: Monday, 22 June 2015
Share certificates may not be dematerialised or rematerialised between Friday, 12 June 2015 and Friday, 19 June 2015, both
days inclusive.
By order of the board
28 May 2015
Directors: DC King (Executive Chairman); IG Morris (Chief Executive Officer); RB Dick (Financial Director); DSE Carlisle
(Executive Director); DA Di Siena (Independent Non–Executive Director); PH Duvenhage (Non-Executive Director); TW
Hamill (Non–Executive Director); GE Jacobs (Independent Non–Executive Director); RC Lewin (Non–Executive Director); AB
Swan (Lead Independent Non–Executive Director)
Company Secretary: RJ Viljoen
Auditors: Nexia SAB&T
Transfer Secretaries: Computershare Investor Services Proprietary Limited
Sponsor: Merchantec Capital
Attorneys: Di Siena
Note: No forward looking statements in this announcement have been reviewed or reported on by MICROmega’s auditors.
Date: 28/05/2015 01:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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