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Audited Summary Financial Results for the year ended 31 March 2015 and cash dividend declaration announcement
PRESCIENT LIMITED
Incorporated in the Republic of South Africa
Registration number 1936/008278/06
Share code: PCT
ISIN: ZAE000163531
"Prescient" or "the Group"
Abridged audited consolidated financial results
For the year ended 31 March 2015 and cash dividend
declaration announcement
Key highlights
- Growth in total income for the Group of 26% to R835.9 million
(2014: R664.6 million)
- Growth in Headline Earnings per share for continuing operations of
12% to 7.78 cents per share (2014: 6.96 cents per share)
- Final dividend declared of 3.0 cents per share
- Growth in annual dividend per share of 12.7% to 5.75 cents per share
(2014: 5.10 cents per share)
- Increase of 11% in assets under management in Prescient Investment
Management to R65.5 billion (2014: R59.1 billion)
- Growth in third-party assets under administration for Prescient Fund
Services of 56% to R48.6 billion (2014: R31.1 billion)
- Strong investment performance across mandates
- Diversification and performance benefit to clients invested in the
China Balanced Fund
- Launch of the Prescient Balanced and China Conservative Funds
- Expansion in service offering of Prescient Fund Services, locally
and globally
- Another set of strong ratings for Prescient Securities in the Financial
Mail analyst ratings
- SAM and Retirement Reform-readiness for Prescient Life
- Pleasing total income growth for the PBT Group
COMMENTARY
Introduction
Prescient is a multinational business whose operations in financial services and information
management services span several continents.
Financial performance
Prescient Limited, in its second full year as a listed entity, continued to deliver a solid performance in the
year to 31 March 2015. The Group achieved total income growth from continuing operations of 26%
to R835.9 million (2014: R664.6 million), headline earnings growth from continuing operations of
14% to R124.5 million (2014: R109.0 million) and declared a cash dividend per share of 5.75 cents for
the year (2014: 5.10 cents per share).
The increase in total income was due to a growth in assets under management of 11% as well as
strong investment performance coming through, which resulted in higher performance fees. This is
particularly relevant for the China Balanced Fund which significantly outperformed its benchmark
and generated a robust performance fee flow as a result. There was also strong growth in total
income in Prescient Fund Services as an increase in the third-party client base grew assets under
administration by 56%. Information Management Services also reflected a strong growth in total
income on the back of a weaker rand and a high
demand for consulting services.
Profit before tax from continuing operations was up 22% to R186.0 million (2014: R152.2 million) with
profit after tax from continuing operations up by 25% to R140.4 million (2014: R112.6 million).
Basic earnings per share from continuing operations in 2015 were 8.31 cents per share
(2014: 7.15 cents per share). Headline earnings per share from continuing operations increased by
12% from 6.96 cents per share to 7.78 cents per share. Headline earnings were adjusted by the
upward revaluation of R2.6 million relating to the property held in Ireland and the gain arising from a
change in investment holding of a subsidiary of PBT Australia to an associate, amounting to R5.9 million.
Headline earnings were therefore lower than basic earnings by R8.5 million.
Total income from Financial Services increased by 23% from R287.1 million to R352.9 million.
The increase in total income was driven largely by the improved performance on mandates that
generate performance fees and, in addition, there was also the strong contribution from the
China Balanced Fund in the latter half of the financial year. The China Balanced Fund significantly
outperformed its benchmark and generated a robust performance fee flow as a result. Prescient
Fund Services also grew from a strong platform from the previous year.
The PBT Group performed well during the 2015 financial period with strong growth in total income
coming through from all operating units. At least 50% of total income is received in foreign currency
where the client base in Africa is invoiced mostly in US dollars and PBT Australia generates Australian
dollar income.
Dividend
The directors consider the payment of a dividend on a biannual basis taking into account prevailing
circumstances and future cash and capital requirements of the Group in order to determine
the appropriate dividend in respect of a particular financial reporting period.
The Group declared a final dividend of 3.0 cents per share on 24 June 2015 which meant a total dividend
for the year of 5.75 cents per share (2014: 5.10 cents per share) and a dividend cover of 1.5 times
(2014: 1.4 times).
There are 1 648 655 093 shares in issue at the dividend declaration date, of which 28 661 114
are held as treasury shares. The total dividend amount payable is R49.5 million (March 2014:
R40.0 million). The dividend is payable from income reserves.
The cash dividend is likely to have tax implications for both resident and non-resident shareholders.
Shareholders are therefore encouraged to consult their professional tax advisers should they be in any
doubt as to the appropriate action to take.
In terms of the Income Tax Act, the cash dividend will, unless exempt, be subject to dividend withholding
tax (DWT). South African resident shareholders that are liable for DWT will be subject to DWT at a rate
of 15% of the cash dividend and this amount will be withheld from the cash dividend. Non-resident
shareholders may be subject to DWT at a rate of less than 15% depending on their country of
residence and the applicability of any double tax treaty between South Africa and their country of
residence. The net amount payable to shareholders who are not exempt from dividend tax is 2.55 cents
per share, while it is 3.0 cents per share to those shareholders who are exempt.
In compliance with the Listings Requirements of the JSE, the following dates are applicable:
Last day to trade cum Friday, 31 July 2015
dividend
Shares trade ex dividend Monday, 3 August 2015
Record date Friday, 7 August 2015
Payment date Tuesday, 11 August 2015
Share certificates may not be dematerialised or rematerialised between Monday, 3 August 2015 and
Friday, 7 August 2015; both dates inclusive.
Prospects for the 2016 financial year
We believe that the Prescient Group is very well positioned for growth into the future. We have
diversified our earnings base significantly over the last few years, not only in terms of our product
range, but also in terms of the currency in which we earn our fees. This change bodes well for the
future. The staff and management at Prescient have worked extremely hard at continuing to deliver
the highest levels of service to our clients. Top quality client service has become a mantra within
each operational unit, and so has the continuous development of new ideas and ways of thinking that
will allow us to take advantage of the fast-changing environment that we operate in.
Basis of accounting
The abridged audited consolidated financial information has been prepared in accordance with
IAS 34 Interim Financial Reporting, as well as the AC 500 standards as issued by the Accounting
Practices Board, the requirements of the South African Companies, Act No. 71 of 2008 and the
Listings Requirements of the JSE. The abridged audited consolidated financial statements do
not include all of the information required for full financial statements. The abridged audited
consolidated financial statements have been prepared in accordance with the historical cost
basis except for certain financial instruments and investment property which are stated at fair
value. The abridged audited consolidated financial statements are presented in rand, rounded to
the nearest thousand. The accounting policies applied in the presentation of the abridged audited
consolidated financial statements are in accordance with International Financial Reporting Standards
and are consistent with those presented in the previous financial statements.
The abridged audited consolidated financial statements have been extracted from audited
information but have not, in themselves, been audited. The auditor's unqualified audit report and
the audited financial statements are available for inspection at the Company's registered office in
terms of 3.18 (F) of the Listings Requirements.
Judgements and estimates
Preparing the abridged audited consolidated financial statements requires management to
make judgements, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets and liabilities, income and expenses. Actual results may differ from
these estimates.
In preparing these abridged audited consolidated financial statements significant judgements made
by management in applying the Group's accounting policies and key sources of estimation uncertainty
were the same as those that applied to the previous financial statements for the year ended
31 March 2014.
Related party transactions
The Group entered into various inter-company transactions with related parties in the ordinary
course of business.
During the current year a loan of R24.4 million was extended to Fisc Investment Management
Proprietary Limited, a related party, for the purpose of purchasing shares in Prescient Limited.
Subsequent events
There were no material events subsequent to the reporting date.
These abridged audited consolidated financial statements were prepared under the supervision
of Michael Buckham, CA (SA) CFA (Financial Director), and approved by the Board of Directors
on 24 June 2015.
Posting of the Integrated Report and
Notice of Annual General Meeting
The Integrated Report for the year ended 31 March 2015, including a Notice of the Annual General
Meeting has been issued and posted to shareholders today and is available on the Company's website at
www.prescient.co.za.
The Annual General Meeting will be held at 11:00 on Tuesday, 11 August 2015, at Prescient
House, Westlake Business Park, Otto Close, Westlake, 7945.
The record date on which shareholders must be registered in the Company's share register in order
to attend, participate and vote at the Annual General Meeting is Friday, 7 August 2015.
The last day to trade in order to be entitled to vote at the Annual General Meeting will therefore be Friday,
31 July 2015.
Forward-looking statements
This announcement contains certain forward-looking statements with respect to the financial
condition and results of the operations of Prescient Limited that, by their nature, involve risk and
uncertainty because they relate to events and depend on circumstances that may or may not occur
in the future. These may relate to future prospects, opportunities and strategies. If one or more of these
risks materialise, or should underlying assumptions prove incorrect, actual results may differ from those
anticipated. By consequence, none of the forward-looking statements have been reviewed or reported
on by the Group's auditors.
Cape Town
24 June 2015
Sponsor
Bridge Capital Advisors Proprietary Limited
Corporate information
Registered office of Prescient
Prescient House
Westlake Business Park
Otto Close
Westlake
7945
(PO Box 31142, Tokai, 7966)
Directors
Murray Louw (Non-executive Chairman)
Herman Steyn (Chief Executive Officer)
Michael Buckham (Financial Director)
Zane Meyer (Lead Independent Non-executive)
Keneilwe Moloko (Independent Non-executive)
Ronell van Rooyen (Non-executive)
Heather Sonn (Independent Non-executive)
Company Secretary
Bianca Pieters
Prescient House
Westlake Business Park
Otto Close
Westlake
7945
(PO Box 31142, Tokai, 7966)
Auditor
KPMG Inc
MSC House
1 Mediterranean Street
Foreshore
Cape Town
8001
Sponsor
Bridge Capital Advisors Proprietary Limited
27 Fricker Road
Illovo Boulevard
Illovo
2196
Transfer Secretary
Link Market Services South Africa Proprietary
Limited
PO Box 4844
Johannesburg
2000
19 Ameshoff Street
Braamfontein
2001
Reconciliation of earnings and diluted earnings per share to headline and diluted headline earnings per share
2015 2014
Cents Cents
R'000s per share R'000s per share
Profit for the year 136 461 63 865
Non-controlling interests (7 358) (777)
Earnings attributable to FSP shareholders (819) –
Earnings attributable to ordinary shareholders 128 284 8.07 63 088 4.03
Headline earnings adjustments
Loss on sale of discontinued operation: – 10 967
Goodwill impairment – 31 143
Change in fair value of investment property (2 622) (2 909)
Gain on loss of control of subsidiary (5 869) –
Headline and diluted headline earnings attributable to
ordinary shareholders for continuing operations 119 847 7.54 102 290 6.53
Weighted average number of shares (thousands) 1 589 707 1 565 528
Audited consolidated statement of profit or loss and other comprehensive income
for the year ended 31 March 2015
2015 2014
R'000 R'000
Continuing operations
Total income 835 861 664 626
Service fees 803 169 638 013
Interest and dividend income 19 442 15 970
Other investment income 13 250 10 643
Net fair value gains on linked investments backing policyholder funds – –
Cost of information management services (352 768) (286 599)
Operating expenses (292 431) (231 720)
Share-based payment expense (754) –
Profit from operations 189 908 146 307
Other income 8 576 10 652
Share of loss of equity-accounted investees (net of tax) (3 261) (573)
Finance costs (9 212) (4 155)
Profit before tax 186 011 152 231
Income tax expense (45 671) (39 592)
Profit from continuing operations 140 340 112 639
Discontinued operation
Loss for the period from discontinued operation (3 879) (48 774)
Profit for the year 136 461 63 865
Other comprehensive income
Items that are or may be reclassified to profit or loss
Foreign currency translation differences – foreign operations (4 599) (1 383)
Tax on other comprehensive income – –
Other comprehensive income for the year, net of tax (4 599) (1 383)
Total comprehensive income for the year 131 862 62 482
Profit attributable to:
Owners of the Company 129 103 63 088
Non-controlling interests 7 358 777
Profit for the year 136 461 63 865
Total comprehensive income attributable to:
Owners of the Company 124 504 61 705
Non-controlling interests 7 358 777
Total comprehensive income for the year 131 862 62 482
Earnings per share (cents)
Basic earnings per share 8.07 4.03
Diluted earnings per share 8.07 4.03
Headline earnings per share (cents)
Headline earnings per share 7.54 6.53
Diluted headline earnings per share 7.54 6.53
Earnings per share – continuing operations (cents)
Basic earnings per share 8.31 7.15
Diluted earnings per share 8.31 7.15
Headline earnings per share – continuing operations (cents)
Headline earnings per share 7.78 6.96
Diluted headline earnings per share 7.78 6.96
Audited consolidated statement of financial position
as at 31 March 2015
2015 2014
R'000 R'000
Assets
Non-current assets 10 517 632 7 331 567
Property and equipment 26 357 11 210
Investment property 24 911 24 724
Goodwill and intangible assets 414 048 423 361
Deferred tax asset 7 483 4 841
Long-term loans and other receivables 51 874 70 288
Investment in equity-accounted investees 14 906 1 493
Financial assets at fair value through profit or loss 157 925 105 842
Linked investments backing policyholder funds 9 820 128 6 689 808
Current assets 906 102 527 764
Inventory 22 154 10 506
Trade and other receivables 210 924 171 692
Amounts owing by clearing houses 36 575 –
Amounts owing by clients 525 215 287 082
Taxation receivable 14 262 3 398
Cash and cash equivalents 96 972 55 086
Total assets 11 423 734 7 859 331
Equity
Stated capital 664 702 637 062
Reserves (7 287) (841)
Retained income 138 578 96 367
Total equity attributable to owners of the Company 795 993 732 588
Non-controlling interests 14 139 8 461
Total equity 810 132 741 049
Liabilities
Non-current liabilities 9 842 927 6 732 401
Deferred tax liability 11 237 5 480
Policyholder investment contract liabilities 9 817 582 6 685 086
Loans payable 14 108 41 835
Current liabilities 770 675 385 881
Trade and other payables 98 363 57 594
Amounts owing to clearing houses 4 060 138 738
Amounts owing to clients 554 685 147 916
Current tax payable 9 405 6 726
Loans payable 56 458 12 865
Bank overdraft 47 704 22 042
Total liabilities 10 613 602 7 118 282
Total equity and liabilities 11 423 734 7 859 331
Abridged audited consolidated segment report
as at 31 March 2015
Financial Services
Audited Audited
31 March 31 March
2015 2014
R'000 R'000
Continuing Discontinued Continuing Discontinued
Segment external revenue 352 931 – 287 124 94 905
Segment profit/(loss) before tax 128 261 (3 879) 108 081 (48 775)
Information Management Services
Segment external revenue 482 930 – 377 502 –
Segment profit/(loss) before tax 57 750 – 44 151 –
Group
Segment external revenue 835 861 – 664 626 94 905
Segment profit/(loss) before tax 186 011 (3 879) 152 231 (48 775)
Audited consolidated statement of changes in equity
for the year ended 31 March 2015
Share-based
Stated Translation Treasury payment Retained Non-controlling Total
R'000 capital reserve shares reserve income Total interests equity
Balance at 1 April 2013 637 062 12 396 (12 116) – 93 595 730 937 9 781 740 718
Total comprehensive income for
the year
Profit for the year – – – – 63 088 63 088 777 63 865
Total other comprehensive income – (1 383) – – – (1 383) – (1 383)
Total comprehensive income for
the year – (1 383) – – 63 088 61 705 777 62 482
Transactions with owners recognised
directly in equity
Contributions by and distributions to
owners of the Company
Treasury shares sold – – 262 – – 262 – 262
Dividends declared during the year – – – – (60 316) (60 316) (2 180) (62 496)
Total contributions by and distributions to
owners of the Company – – 262 – (60 316) (60 054) (2 180) (62 234)
Changes in ownership interests
in subsidiaries
Acquisition of subsidiary – – – – – – 83 83
Total changes in ownership interests
in subsidiaries – – – – – – 83 83
Total transactions with owners of
the Company – – 262 – (60 316) (60 054) (2 097) (62 151)
Balance at 31 March 204 637 062 11 013 (11 854) – 96 367 732 588 8 461 741 049
Balance at 1 April 2014 637 062 11 013 (11 854) – 96 367 732 588 8 461 741 049
Total comprehensive income for
the year
Profit for the year – – – – 129 103 129 103 7 358 136 461
Total other comprehensive income – (4 599) – – – (4 599) – (4 599)
Total comprehensive income for
the year – (4 599) – – 129 103 124 504 7 358 131 862
Transactions with owners recognised
directly in equity
Contributions by and distributions
to owners of the Company
Equity-settled share-based payments – – – 801 – 801 801
Dividends declared during the year – – – – (86 892) (86 892) (2 205) (89 097)
Issue/(repurchase) of ordinary shares 27 640 – (2 648) – – 24 992 – 24 992
Total contributions by and distributions
to owners of the Company 27 640 – (2 648) 801 (86 892) (61 099) (2 205) (63 304)
Changes in ownership interests in
subsidiaries
Loss of control – – – – – – 525 525
Total changes in ownership interests in
subsidiaries – – – – – – 525 525
Total transactions with owners of the
Company 27 640 – (2 648) 801 (86 892) (61 099) (1 680) (62 779)
Balance at 31 March 2015 664 702 6 414 (14 502) 801 138 578 795 993 14 139 810 132
Audited consolidated statement of cash flows
for the year ended 31 March 2015
2015 2014
R'000 R'000
Cash flows from operating activities
Profit for the year 136 461 63 865
Income tax expense 45 671 39 592
Non-cash movements and adjustments to profit before tax (2 280 795) (62 825)
Cash generated from policyholder activities 2 269 055 98 935
Contributions and investment income 3 845 889 1 794 917
Withdrawals by policyholders (1 576 834) (1 695 982)
Changes in working capital (9 231) (54 374)
Dividends received 2 820 272
Dividends paid (89 097) (62 496)
Interest received 16 622 15 698
Interest paid (9 212) (10 233)
Taxation paid (50 702) (45 920)
Net cash inflow/(outflow) from operating activities 31 592 (17 486)
Cash flows from investing activities
Acquisition of equipment (4 349) (1 892)
Acquisition of subsidiary, net of cash acquired – (313)
Acquisition of intangible assets (3 161) (5 021)
Disposal of intangible assets 3 256 –
Loss in control of subsidiary (3 296) –
Investment in equity-accounted investees (3 104) (811)
Dividends from equity-accounted investees – 143
(Acquisition)/disposal of financial assets at fair value through profit or loss (41 455) 496
Repayment of long-term loans receivable 18 414 3 455
Disposal of discontinued operation, net of cash disposed of – (8 029)
Cash outflow from investing activities (33 695) (11 972)
Cash flows from financing activities
Acquisition of own shares – (263)
Increase/(decrease) in loans payable 18 517 (47 481)
Cash inflow/(outflow) from financing activities 18 517 (47 744)
Net increase/(decrease) in cash and cash equivalents 16 414 (77 202)
Effect of exchange rate fluctuations on cash held (190) 9 605
Cash and cash equivalents at beginning of the year 33 044 100 641
Cash and cash equivalents at end of the year 49 268 33 044
Website: www.prescient.co.za
Date: 24/06/2015 05:41:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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