Wrap Text
Unaudited interim results for the six months ended 30 June 2015
Brimstone Investment Corporation Limited
ISIN Number: ZAE000015277
Share Code: BRT
ISIN Number: ZAE000015285
Share Code: BRN
Company Registration Number: 1995/010442/06
(Incorporated in the Republic of South Africa)
("Brimstone" or "the Company")
Brimstone Unaudited Interim Results for the Six Months Ended 30 June 2015
Significant events
- Strong dividend income from investments
- Old Mutual and Nedbank transactions concluded
- Reduction of debt
- Downward revaluation of Grindrod, Life Healthcare and Tiger Brands
- Losses at subsidiary Lion of Africa Insurance Company
Commentary
The company reported a loss for the period under review of R480.1 million
compared to a profit of R309.7 million in the comparative period. The
significant contributor to this reduction in earnings was the downward
revaluation of investments, the effect of which can be found in both fair
value adjustments and equity accounted losses of associates and joint
ventures. This was compounded by poor results from operating subsidiary Lion
of Africa Insurance Company.
Gross assets decreased to R7.6 billion, from R7.9 billion at 31 December
2014. Intrinsic Net Asset Value decreased to R4.1 billion from R4.9 billion
at 31 December 2014.
Brimstone Portfolio
SUBSIDIARIES
Sea Harvest (58.44%)
Catches during the first six months of the year were 8% lower than the prior
period as a result of challenging fishing conditions which was partly offset
by improved vessel utilisation across the fleet.
Sales volumes grew by 6% on average, with particularly strong growth in
export markets, where firm international demand for hake was supported on
the supply side by the successful integration into the fleet of a new
freezer vessel, the Atlantic Peace. Local sales volumes were under pressure
due to a stagnant economic environment, pricing action and competitive
activity. Revenue was 2% higher than last year, with volume growth and
strong price increases being partly offset by weaker foreign exchange rates.
Operating profit before interest increased by 35% to R89.3 million
benefiting from price increases, efficient cost control and the lower fuel
price.
Lion of Africa Insurance Company (100%)
Lion of Africa reported an underwriting loss at 30 June 2015 of R102.5
million. Net loss for the six months is reported as R105.2 million. While
the results are disappointing the specific program of remedial action is
expected to yield positive results. Operational reform has commenced in all
key business areas under a turnaround team. Lion of Africa has secured a
commercial arrangement with Zurich Insurance Company South Africa Limited in
respect of Corporate and Local Authority business. Lion of Africa was
further capitalized by Brimstone with R150 million during the period under
review.
House of Monatic (100%)
Turnover increased to R104.2 million for the six months mainly as a result
of increased sales from company owned branded retail stores and corporate
business. Net profit increased to R2.8 million and employment levels
increased to 840 permanent staff. House of Monatic is continuing to expand
its retail presence with two further C2 branded stores, including one
franchised store, being opened.
ASSOCIATES AND JOINT VENTURES
Oceana (16.81%)
Oceana's share price closed at R97.00 per share, down from R104.86 per share
at 31 December 2014. Brimstone received dividends of R21.3 million from
Oceana during the period under review and recorded R24.9 million in equity
accounted earnings based on its reported six month earnings to 31 March 2015.
Oceana announced that it would be acquiring 100% of the share capital of the
processing operations of US-based Daybrook Fisheries Inc. and 25% of
Westbank LLC, its related marine operations. Brimstone has signed
irrevocable letters of commitment to follow its rights to 2.8 million shares
at R75 per share in the proposed rights offer resulting from this
transaction.
Brimstone is pleased to report that subsequent to the period end the company
has repaid all debt in the Oceana SPV structure. Brimstone owns 20.1 million
Oceana shares of which 11.6 million are now debt free.
Aon Re Africa (18%)
Aon Re Africa is the leading reinsurance broker licensed and operating in
South Africa and the rest of Africa. Aon Re Africa continued to successfully
secure new business across all divisions which resulted in solid organic
growth, especially outside of South Africa. Brimstone received a dividend of
R11 million from Aon Re Africa and recorded R4.3 million in equity accounted
losses during the period under review.
Afena Capital (28.79%)
Afena Capital is an investment management firm that offers specialist equity
and balanced portfolios serving the South African and Botswana institutional
markets. Afena made a small contribution to earnings.
Obsidian Health (25.07%)
During the period under review Brimstone disposed of its investment in The
Scientific Group realising a profit on disposal of R36.1 million. As part
of the transaction, the medical division of The Scientific Group was
transferred to a new company Obsidian Health in which Brimstone holds a
25.07% interest.
Grindrod (4.97%)
Grindrod is an operationally integrated company providing end-to-end
solutions for the movement of cargo by road, rail and sea using specialised
assets and infrastructure focused on dry-bulk and liquid-bulk commodities,
vehicles and containers.
Brimstone accounts for its share of the results in the Consortium SPV as a
joint venture.
Brimstone's share of the consortium losses amounted to R288.5 million.
Grindrod's share price closed at R13.45 down from R22.40 per share at
31 December 2014.
Brimstone's share of the losses of the joint venture comprise the following:
R'000 Unaudited
6 months
ended
30 June 2015
Dividends received 7 579
Fair value losses (340 134)
Net finance costs (19 091)
Other net expenses (54)
Taxation 63 239
Equity accounted loss (288 461)
From 1 July 2015 to 12 August 2015 Brimstone acquired an additional 1 567
136 Grindrod shares directly in the market. This is in addition to its
existing 4.97% indirect shareholding in Grindrod. At 12 August 2015
Brimstone held an effective 5.2% in Grindrod.
INVESTMENTS
Life Healthcare (5.04%)
Life Healthcare's share price closed at R37.53 per share, down from R42.76
per share at 31 December 2014. The investment was revalued downwards by
R274.6 million to R1 970.6 million. Brimstone received a dividend of 68
cents per share resulting in total dividend receipts from Life Healthcare of
R35.7 million, down from R85.6 million last year which included a special
dividend of R52.5 million.
MTN Zakhele (2.71%)
Brimstone acquired a further 24 304 MTN Zakhele shares during the period
under review at an average cost of R102.86 per share. The share price closed
at R121.50, up from R108.50 per share at 31 December 2014. The investment
was revalued upwards by R28.6 million to R266.4 million. Brimstone now holds
2 192 249 MTN Zakhele shares.
Nedbank (0.11%)
Following the conclusion of the Nedbank transaction Brimstone held 2 334 539
Nedbank shares. Brimstone sold 1 806 233 of these shares realising R444.9
million. The remaining 528 306 shares were valued at the closing market
price of R241.80 per share and are carried in the books at R127.7 million at
30 June 2015.
Old Mutual (0.11%)
The Old Mutual transaction concluded on 1 May 2015. After settlement of debt
in terms of the contract, Brimstone held 7 385 781 Old Mutual plc shares.
Brimstone sold 1 821 431 of these shares, realising R73.4 million. The
remaining 5 564 350 shares were valued at the closing market price of R38.70
per share and are carried in the books at R215.3 million at 30 June 2015.
Phuthuma Nathi (5.13%)
Brimstone acquired a further 685 432 Phuthuma Nathi shares at an average
cost of R143.63 per share during the period under review. The Phuthuma Nathi
1 shares and Phuthuma Nathi 2 shares closed at R155.02 and R155.50
respectively. The investment was revalued upwards by R67.7 million to R537.1
million. Phuthuma Nathi has declared a dividend payable to shareholders in
September 2015. Based on the number of shares held at 30 June 2015,
Brimstone is expected to receive a total dividend of R63.6 million.
Rex Trueform and African & Overseas Enterprises (Queenspark) (22%)
The Rex Trueform and African & Overseas Enterprises N shares were revalued
downwards by R4.7 million.
Taste Holdings (13.08%)
Taste Holdings' share price closed at R4.30 per share, up from R3.20 per
share at 31 December 2014. The investment was revalued upwards by R41.5
million to R162.3 million. On 2 July 2015 in terms of a specific issue of
shares for cash approved by Taste Holdings shareholders, Brimstone acquired
a further 8 196 722 Taste Holdings shares at R3.05 per share. Brimstone now
holds an effective 15.5% in Taste Holdings.
Tiger Brands (0.94%)
Brimstone's rights to Tiger Brands shares, accounted for as options, have
been revalued at period end. The independently calculated option valuation
was based on a closing share price of R283.49 per share, down from R368.06
per share at 31 December 2014. The investment was revalued downwards by
R144.2 million to R197.4 million.
Basis of preparation
The condensed consolidated interim financial statements are prepared in
accordance with International Financial Reporting Standard, IAS 34: Interim
Financial Reporting, the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Reporting Pronouncements as
issued by the Financial Reporting Standards Council, and the requirements of
the Companies Act of South Africa. The report has been prepared using
accounting policies that comply with International Financial Reporting
Standards which are consistent with those applied in the financial
statements for the year ended 31 December 2014.
The condensed financial information was prepared under the supervision of
the group financial director, Lawrie Zev Brozin, B.Com B.Acc CA(SA).
Share repurchase
During the review period Brimstone repurchased 387 831 Brimstone ordinary
shares at R17.00 per share for a total consideration of R6 593 127 and 3 835
621 Brimstone "N" ordinary shares at R16.50 per share for a total
consideration of R63 287 747. This specific repurchase of shares was from
the Brimstone Investment Corporation Limited Share Trust, a trust controlled
by Brimstone and as such was done intra-group with no cash flow implications,
except for related expenses. The repurchased shares were listed as treasury
shares in Brimstone's last annual financial statements and the Company
applied to the JSE for the cancellation of these shares, which were duly
cancelled and delisted on 12 March 2015.
Dividend
In line with previous years, no interim dividend is declared for the half
year.
Prospects
The Group's assets are characterised by strong underlying businesses with
positive dividend paying ability. Whilst the current results were subject to
significant fair market value losses, the Group maintains its positive long
term view on its investments.
On behalf of the board
F Robertson MA Brey
Executive Chairman Chief Executive Officer
18 August 2015
Directorate and administration
Registered office: Boundary Terraces, 1 Mariendahl Lane, Newlands 7700, Cape Town
Transfer Secretaries: Computershare Investor Services (Pty) Ltd,
70 Marshall Street, Johannesburg 2001
Sponsor: Nedbank CIB, 135 Rivonia Road, Sandton 2196
Directorate: F Robertson (Executive Chairman)*, MA Brey (Chief Executive
Officer)*, LZ Brozin (Financial)*, PL Campher (Lead Independent), M Hewu,
N Khan, KR Moloko, MK Ndebele, LA Parker, FD Roman *Executive
Website: www.brimstone.co.za
E-mail: info@brimstone.co.za
Condensed Consolidated Statement of Comprehensive Income
for the 6 months ended 30 June 2015
Unaudited Unaudited Audited
6 Months 6 Months Year
ended ended ended
30 June 30 June 31 Dec
R'000 2015 2014 2014
Revenue 1 073 333 1 092 346 2 221 054
Sales and fee income 960 695 968 172 1 968 233
Dividends received 112 638 124 174 252 821
Operating expenses (1 012 689) (988 342) (2 119 196)
Operating profit 60 644 104 004 101 858
Fair value (losses)/gains (213 201) 334 137 463 967
Exceptional items 31 087 - (28 286)
Share of (losses)/profits of
associates and joint ventures (275 170) 31 204 (65 431)
(Loss)/profit before net finance costs (396 640) 469 345 472 108
Income from investments 9 237 9 429 23 028
Finance costs (98 370) (86 544) (188 182)
Outside unit holders' interest (440) (970) (449)
Net (loss)/profit before taxation (486 213) 391 260 306 505
Taxation 6 139 (81 575) (28 712)
(Loss)/profit for the period (480 074) 309 685 277 793
Other comprehensive (loss)/income,
net of tax (7 661) 14 450 17 991
Items that may be reclassified
subsequently to profit and loss
Cash flow hedges
(Loss)/profit arising during the period (7 661) 14 450 33 878
Net value loss on
available-for-sale financial asset - - (15 887)
Total comprehensive (loss)/income
for the period (487 735) 324 135 295 784
(Loss)/profit attributable to:
Equity holders of the parent (503 021) 295 818 259 050
Non-controlling interests 22 947 13 867 18 743
(480 074) 309 685 277 793
Total comprehensive (loss)/income
attributable to:
Equity holders of the parent (507 497) 305 619 269 739
Non-controlling interests 19 762 18 516 26 045
(487 735) 324 135 295 784
(Loss)/earnings per share (cents)
Basic (204,7) 120,9 105,8
Diluted (175,4) 103,1 90,4
Condensed Consolidated Statement of Financial Position
as at 30 June 2015
Unaudited Unaudited Audited
30 June 30 June 31 Dec
R'000 2015 2014 2014
ASSETS
Non-current assets 5 287 517 4 800 506 5 407 395
Property, plant, equipment
and vehicles 403 996 288 933 410 827
Goodwill and other intangible assets 117 054 136 730 126 540
Investments in associate companies
and joint ventures 808 349 772 775 1 067 131
Investments 3 708 078 3 303 845 3 636 528
Deferred taxation - 33 568 -
Insurance assets 250 040 258 520 166 369
Other financial assets - 6 135 -
Current assets 2 288 149 2 430 958 2 525 671
Inventories 253 420 284 719 265 616
Trade and other receivables 732 205 516 112 633 801
Insurance assets 660 023 552 547 561 516
Taxation 53 11 14 222
Investments 84 109 924 343 828 897
Cash and cash equivalents 558 339 153 226 221 619
TOTAL ASSETS 7 575 666 7 231 464 7 933 066
EQUITY AND LIABILITIES
Capital and reserves 2 966 107 3 459 883 3 434 405
Share capital 45 45 45
Capital reserves 373 478 333 752 342 032
Revaluation reserves 14 143 24 424 14 143
Cash flow hedging reserve 10 446 3 753 14 922
Changes in ownership (11 839) (11 839) (11 839)
Retained earnings 2 339 287 3 006 320 2 965 681
Attributable to equity holders
of the parent 2 725 560 3 356 455 3 324 984
Non-controlling interests 240 547 103 428 109 421
Non-current liabilities 2 699 204 2 214 639 2 930 119
Long-term interest bearing borrowings 1 817 584 1 231 183 2 040 451
Long-term provisions 23 103 22 211 23 103
Other financial liabilities 2 274 - 3 490
Insurance liabilities 317 078 242 314 223 695
Deferred taxation 539 165 718 931 639 380
Current liabilities 1 910 355 1 556 942 1 568 542
Short-term interest bearing borrowings 198 907 171 681 130 700
Bank overdrafts 19 142 26 974 14 815
Trade payables 695 371 571 458 548 646
Other payables 96 906 61 832 106 251
Insurance liabilities 805 558 677 616 732 794
Outside unit holders' interest 17 907 21 390 16 145
Other financial liabilities 425 645 220
Short-term provisions 21 592 20 384 18 172
Taxation 54 547 4 962 799
TOTAL EQUITY AND LIABILITIES 7 575 666 7 231 464 7 933 066
NAV per share (cents) 1 107,3 1 370,2 1 356,3
Shares in issue at end of
period (000's) 246 135 244 967 245 151
Condensed Consolidated Statement of Changes in Equity
for the six months ended 30 June 2015
R'000 Share Capital Revaluation
capital reserves reserves
Balance at 1 January 2014 - Audited 45 325 434 23 223
Attributable profit for the year
ended 31 December 2014 - - -
Other comprehensive income - - (9 080)
Total comprehensive income - - (9 080)
Recognition of share-based payments - 10 570 -
Dividend paid - - -
Subsidiary's accrual for preference dividends - - -
Redemption of preference shares by subsidiary - - -
Share of distribution made by associate - - -
Share of distribution made by subsidiary
for change in shareholding - - -
Reduction of subsidiary's share capital - - -
Issue of share capital - 4 597 -
Repurchase of trust units - (744) -
Share of non-distributable reserves
of associates transferred directly to equity - 2 175 -
Balance at 31 December 2014 - Audited 45 342 032 14 143
Attributable (loss)/profit for
the six months ended 30 June 2015 - - -
Other comprehensive loss - - -
Total comprehensive (loss)/income - - -
Recognition of share-based payments - 5 749 -
Dividend paid - - -
Subsidiary's accrual for preference dividends - - -
Non-controlling interest arising on
recognition of subsidiary - - -
Repayment of capital by subsidiary - - -
Issue of share capital - 7 313 -
Change in equity of subsidiary - 2 458 -
Share of non-distributable reserves
of associates transferred directly to equity - 15 926 -
Balance at 30 June 2015 - Unaudited 45 373 478 14 143
1 January 2014 to 30 June 2014 - Unaudited
Balance at 1 January 2013 - Audited 45 325 434 23 223
Attributable profit for the six months
ended 30 June 2014 - - -
Other comprehensive income - - 1 201
Total comprehensive income - - 1 201
Recognition of share-based payments - 5 205 -
Dividend paid - - -
Subsidiary's accrual for preference dividends - - -
Redemption of preference shares by subsidiary - - -
Share of distribution made by associate - - -
Share of distribution made by subsidiary
for change in shareholding - - -
Issue of share capital - 3 519 -
Repurchase of trust units - (185) -
Change in shareholding in subsidiary - - -
Share of non-distributable reserves
of associates transferred directly to equity - (221) -
Balance at 30 June 2014 - Unaudited 45 333 752 24 424
Condensed Consolidated Statement of Changes in Equity (continued)
for the six months ended 30 June 2015
R'000 Cash flow
hedging Changes in Retained
reserve ownership earnings
Balance at 1 January 2014 - Audited (4 847) (11 839) 2 905 630
Attributable profit for the year
ended 31 December 2014 - - 259 050
Other comprehensive income 19 769 - -
Total comprehensive income 19 769 - 259 050
Recognition of share-based payments - - -
Dividend paid - - (97 939)
Subsidiary's accrual for preference
dividends - -
Redemption of preference shares by
subsidiary - - -
Share of distribution made by associate - - (58 945)
Share of distribution made by subsidiary
for change in shareholding - - (42 115)
Reduction of subsidiary's share capital - - -
Issue of share capital - - -
Repurchase of trust units - - -
Share of non-distributable reserves
of associates transferred directly
to equity - - -
Balance at 31 December 2014 - Audited 14 922 (11 839) 2 965 681
Attributable (loss)/profit for the six
months ended 30 June 2015 - - (503 021)
Other comprehensive loss (4 476) - -
Total comprehensive (loss)/income (4 476) - (503 021)
Recognition of share-based payments - - -
Dividend paid - - (123 373)
Subsidiary's accrual for preference
dividends - - -
Non-controlling interest arising on
recognition of subsidiary - - -
Repayment of capital by subsidiary - - -
Issue of share capital - - -
Change in equity of subsidiary - - -
Share of non-distributable reserves
of associates transferred directly
to equity - - -
Balance at 30 June 2015 - Unaudited 10 446 (11 839) 2 339 287
1 January 2014 to 30 June 2014 - Unaudited
Balance at 1 January 2013 - Audited (4 847) (11 839) 2 905 630
Attributable profit for the six months
ended 30 June 2014 - - 295 818
Other comprehensive income 8 600 - -
Total comprehensive income 8 600 - 295 818
Recognition of share-based payments - - -
Dividend paid - - (97 939)
Subsidiary's accrual for preference
dividends - - -
Redemption of preference shares by subsidiary - - -
Share of distribution made by associate - - (58 995)
Share of distribution made by subsidiary
for change in shareholding - - (38 194)
Issue of share capital - - -
Repurchase of trust units - - -
Change in shareholding in subsidiary - - -
Share of non-distributable reserves of
associates transferred directly to equity - - -
Balance at 30 June 2014 - Unaudited 3 753 (11 839) 3 006 320
Condensed Consolidated Statement of Changes in Equity (continued)
for the six months ended 30 June 2015
R'000 Attribu-
table to
equity
holders Non-
of the controlling
parent interests Total
Balance at 1 January 2014 - Audited 3 237 646 134 474 3 372 120
Attributable profit for the year
ended 31 December 2014 259 050 18 743 277 793
Other comprehensive income 10 689 7 302 17 991
Total comprehensive income 269 739 26 045 295 784
Recognition of share-based payments 10 570 - 10 570
Dividend paid (97 939) (3 000) (100 939)
Subsidiary's accrual for preference
dividends - 7 611 7 611
Redemption of preference shares by
subsidiary - (26 804) (26 804)
Share of distribution made by associate (58 945) - (58 945)
Share of distribution made by subsidiary
for change in shareholding (42 115) (29 953) (72 068)
Reduction of subsidiary's share capital - (6) (6)
Issue of share capital 4 597 - 4 597
Repurchase of trust units (744) 651 (93)
Share of non-distributable reserves
of associates transferred directly
to equity 2 175 403 2 578
Balance at 31 December 2014 - Audited 3 324 984 109 421 3 434 405
Attributable (loss)/profit
for the six months ended
30 June 2015 (503 021) 22 947 (480 074)
Other comprehensive loss (4 476) (3 185) (7 661)
Total comprehensive (loss)/income (507 497) 19 762 (487 735)
Recognition of share-based payments 5 749 - 5 749
Dividend paid (123 373) (20 679) (144 052)
Subsidiary's accrual for
preference dividends - 3 804 3 804
Non-controlling interest arising
on recognition of subsidiary - 147 805 147 805
Repayment of capital by subsidiary - (21 258) (21 258)
Issue of share capital 7 313 - 7 313
Change in equity of subsidiary 2 458 1 748 4 206
Share of non-distributable reserves
of associates transferred directly
to equity 15 926 (56) 15 870
Balance at 30 June 2015 - Unaudited 2 725 560 240 547 2 966 107
1 January 2014 to
30 June 2014 - Unaudited
Balance at 1 January 2013
- Audited 3 237 646 134 474 3 372 120
Attributable profit for the
six months ended 30 June 2014 295 818 13 867 309 685
Other comprehensive income 9 801 4 649 14 450
Total comprehensive income 305 619 18 516 324 135
Recognition of share-based payments 5 205 - 5 205
Dividend paid (97 939) (3 000) (100 939)
Subsidiary's accrual for
preference dividends - 3 936 3 936
Redemption of preference shares
by subsidiary - (26 804) (26 804)
Share of distribution made by
associate (58 995) - (58 995)
Share of distribution made by subsidiary
for change in shareholding (38 194) (23 967) (62 161)
Issue of share capital 3 519 - 3 519
Repurchase of trust units (185) (77) (262)
Change in shareholding in subsidiary - (53) (53)
Share of non-distributable reserves
of associates transferred
directly to equity (221) 403 182
Balance at 30 June 2014 - Unaudited 3 356 455 103 428 3 459 883
Condensed Consolidated Statement of Cash Flows
for the six months ended 30 June 2015
Unaudited Unaudited Audited
6 months 6 months Year ended
30 June 30 June 31 Dec
R'000 2015 2014 2014
Operating activities
Net attributable (loss)/profit (480 074) 309 685 277 793
Adjustments for non-cash items 490 805 (276 248) (322 336)
Operating cash flows before movements
in working capital 10 731 33 437 (44 543)
Decrease/(increase) in inventories 12 196 (34 071) (14 968)
(Increase)/decrease in trade and
other receivables (109 043) 121 688 30 983
Outside unit holders' interest 1 762 2 542 (2 703)
Increase/(decrease) in trade and
other payables 137 380 (34 799) (13 192)
Net increase in insurance assets (182 178) (143 508) (60 326)
Net increase in insurance liabilities 166 147 116 364 152 923
Cash generated from operations 36 995 61 653 48 174
Interest received 9 237 9 429 23 028
Dividends received from associates
and joint ventures 32 349 34 420 86 929
Dividends received from other
equity investments 80 288 89 754 165 892
Income taxes paid (23 180) (1 782) (17 184)
Finance costs (60 605) (52 231) (143 509)
Net cash from operating activities 75 084 141 243 163 330
Investing activities
Loan repayments and recoveries from
associates and investments 21 756 2 236 3 253
Proceeds on disposal of investments 728 454 21 155 48 701
Proceeds on disposal of property,
plant, equipment and vehicles 159 105 542
Acquisition of property, plant,
equipment and vehicles (32 101) (45 305) (204 893)
Acquisition of intangible assets (820) (356) (1 156)
Acquisition of investments (113 010) (182 255) (754 591)
Net cash from/(used in)
investing activities 604 438 (204 420) (908 144)
Financing activities
Dividends paid by company and
subsidiaries (144 052) (124 906) (130 892)
Repayments of borrowings (292 494) (88 274) (342 716)
Loans raised 99 156 225 990 1 275 813
Proceeds on issue of trust units/shares 7 313 3 519 4 597
Issue of shares by subsidiary 4 206 - -
Shares repurchased by subsidiary - - (6)
Repayment of capital by subsidiary (21 258) - -
Redemption of non-controlling
shareholder's preference shares - - (24 579)
Share of distribution made by subsidiary - (38 194) (42 115)
Units/shares repurchased by subsidiaries - (315) (93)
Increase/(decrease) in bank overdrafts 4 327 (22 630) (34 789)
Net cash (used in)/from financing
activities (342 802) (44 810) 705 220
Net increase/(decrease) in cash
and cash equivalents 336 720 (107 987) (39 594)
Cash and cash equivalents at
beginning of period 221 619 261 213 261 213
Cash and cash equivalents at
end of period
Bank balances and cash 558 339 153 226 221 619
HEADLINE EARNINGS PER SHARE
Unaudited Unaudited Audited
6 Months 6 Months Year
ended ended ended
30 June 30 June 31 Dec
R'000 2015 2014 2014
Headline (loss)/earnings per share (cents)
Basic (213,2) 120,9 116,9
Diluted (182,7) 103,1 99,8
Headline (loss)/earnings
calculation (R'000)
Net (loss)/profit attributable
to equity holders of the parent (503 021) 295 818 259 050
(Profit)/loss on disposal of property,
plant, equipment and vehicles (87) 177 334
Realised profit on disposal of
associate (36 087) - -
Impairment of investment in associate 5 000 - 28 286
Adjustments relating to results
of associates 2 108 (63) (1 937)
Total tax effects of adjustments 8 288 (37) 505
Headline (loss)/earnings (523 799) 295 895 286 238
Weighted average number of shares
on which (loss)/earnings and
headline (loss)/earnings per
share is based (000's) 245 726 244 750 244 919
Weighted average number of
shares on which diluted
(loss)/earnings and diluted
headline (loss)/earnings per
share is based (000's) 286 708 286 953 286 703
Intrinsic Net Asset Value (INAV)
Unaudited Unaudited Change since
30 June 31 Dec 31 Dec
2015 2014 2014
INAV of Brimstone (Rm) 4 137 4 862 -14.9%
INAV per share (cents) 1 671 1 979 -15.6%
Fully diluted INAV per share (cents) 1 577 1 858 -15.1%
Market price per share (cents)
Ordinary shares 1 600 1 700 -5.9%
"N" Ordinary shares 1 495 1 650 -9.4%
Discount to INAV
Ordinary shares 4.3% 14.1%
"N" Ordinary shares 10.5% 16.6%
The breakdown of INAV is available
on the company's website at www.brimstone.co.za.
Further information
1. Taxation
The tax charge is disproportionate to the loss before taxation
because of the tax treatment of income and expenditure included in
the result. Non-taxable items include dividends received, equity
accounted gains or losses of associates, preference dividends included
in finance costs and the non-recognition of a deferred tax asset for
Lion of Africa losses. Fair value gains or losses and gain on
disposal of associate are included at the CGT rate.
2. Segmental information
Information reported to the Company's operating decision makers for
the purpose of resource allocation and assessment of segment performance
is specifically focused on the individual entity in which Brimstone has
invested. The Company's reportable segments under IFRS 8 are therefore
fishing, insurance, clothing and investments. Investments include
investments in associates, available-for-sale investments, investments
at fair value through profit or loss and the Company's property
portfolio.
Segmental information for the six months ended 30 June 2015
Profit/
(loss) Headline
from Profit/
R'000 Revenue Operations (loss) Assets Liabilities
Fishing 688 795 89 339 23 175 1 039 720 688 341
Insurance 158 613 (110 422) (105 215) 1 737 428 1 672 341
Clothing 104 205 4 808 2 804 189 061 73 180
Investment
management 121 720 76 919 (444 563) 4 609 457 2 175 697
Total -
Unaudited 1 073 333 60 644 (523 799) 7 575 666 4 609 559
Segmental information for the six months ended 30 June 2014
Profit/
(loss) Headline
from Profit/
R'000 Revenue Operations (loss) Assets Liabilities
Fishing 677 504 66 151 29 601 871 366 581 863
Insurance 203 116 (59 543) (31 822) 1 467 531 1 327 591
Clothing 82 689 2 601 796 169 494 63 108
Investment
management 129 037 94 795 297 320 4 723 073 1 799 019
Total -
Unaudited 1 092 346 104 004 295 895 7 231 464 3 771 581
Segmental information for the year ended 31 December 2014
Profit/
(loss) Headline
from Profit/
R'000 Revenue Operations (loss) Assets Liabilities
Fishing 1 361 498 109 251 23 598 1 040 101 944 377
Insurance 417 569 (179 718) (176 825) 1 321 780 1 391 777
Clothing 183 824 7 202 3 569 171 257 132 509
Investments 258 163 165 123 435 896 5 399 928 2 029 998
Total -
Audited 2 221 054 101 858 286 238 7 933 066 4 498 661
2. Segmental information (continued)
Unaudited Unaudited Audited
6 Months 6 Months ended
ended ended Year
30 June 30 June 31 Dec
R'000 2015 2014 2014
Segment (loss)/profit from operations
Fishing 89 339 66 151 109 251
Insurance (110 422) (59 543) (179 718)
Clothing 4 808 2 601 7 202
Investment management 76 919 94 795 165 123
Total profit from operations 60 644 104 004 101 858
Fair value (losses)/gains (213 201) 334 137 463 967
Exceptional items 31 087 - (28 286)
Share of (losses)/profits
of associates and joint ventures (275 170) 31 204 (65 431)
Income from investments 9 237 9 429 23 028
Finance costs (98 370) (86 544) (188 182)
Outside unit holders' interest (440) (970) (449)
(Loss)/profit before taxation (486 213) 391 260 306 505
3. Fair value measurements
Fair value of the Company's financial assets and financial liabilities
that are measured on a fair value basis on a recurring basis.
Some of the Company's financial assets and financial liabilities are
measured at fair value at the end of each financial reporting period.
The following table gives information about how the fair values of
these financial assets and financial liabilities are determined
(in particular, the valuation technique(s) and inputs used).
The directors consider that the carrying amounts of financial assets
and financial liabilities not measured at fair value on a recurring
basis (but fair value disclosures are required) recognised in the
consolidated financial statements approximate their fair values.
30 June 2015 Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Derivative financial assets - 197 442 - 197 442
Listed shares 2 665 980 - - 2 665 980
Unlisted shares and loan 803 465 6 555 5(1) 810 025
Other investments 91 257 - - 91 257
Available-for-sale
financial assets
Unlisted shares - - 25 265(2) 25 265
Unlisted shares - - 2 218(1) 2 218
Total 3 560 702 203 997 27 488 3 792 187
Financial liabilities
at FVTPL
Derivative financial
liabilities - 2 699 - 2 699
30 June 2014 Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Derivative financial assets - 992 851 - 992 851
Listed shares 2 452 760 - - 2 452 760
Unlisted shares and loan 594 701 6 149 5(1) 600 855
Other investments 140 903 - 140 903
Available-for-sale
financial assets
Unlisted shares - - 44 800 44 800
Unlisted shares - - 2 154(1) 2 154
Total 3 188 364 999 000 46 959 4 234 323
Financial liabilities
at FVTPL
Derivative financial
liabilities - 645 - 645
31 December 2014 Level 1 Level 2 Level 3 Total
Financial assets at FVTPL
Derivative financial assets - 1 122 950 - 1 122 950
Listed shares 2 560 195 - - 2 560 195
Unlisted shares and loan 606 162 6 555 5(1) 612 722
Other investments 105 150 - - 105 150
Available-for-sale
financial assets
Unlisted shares - - 25 265(2) 25 265
Unlisted shares - - 2 218(1) 2 218
Total 3 271 507 1 129 505 27 488 4 428 500
Financial liabilities
at FVTPL
Derivative financial
liabilities - 3 710 - 3 710
The table provided analyses financial instruments that are measured
subsequent to initial recognition at fair value, grouped in
Levels 1 to 3 based on the degree to which fair value is observable.
- Level 1 fair value measurements are those derived from quoted prices
(unadjusted) in active markets for identical assets or liabilities.
- Level 2 fair value measurements are those derived from inputs other
than quoted prices included within Level 1 that are observable for
the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
- Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are
not based on observable market data (unobservable inputs).
(1) At cost or historical valuation.
(2) Discounted cash flow method using a discount rate of 15% over 10 years.
Unaudited Unaudited Audited
6 Months 6 Months Year
ended ended ended
30 June 30 June 31 Dec
2015 2014 2014
Reconciliation of level
3 fair value measurements
Opening balance 27 488 46 959 46 959
Total gains or losses
- in other comprehensive income - - (19 535)
Advances - - 64
Closing balance 27 488 46 959 27 488
Unaudited Unaudited Audited
30 June 30 June 31 Dec
2015 2014 2014
4. Share Capital
In issue (number)
Ordinary shares 42 757 604 43 145 435 43 145 435
Held as treasury shares - (385 611) (385 611)
42 757 604 42 759 824 42 759 824
"N" ordinary shares 243 864 308 245 682 021 245 866 581
Held as treasury shares (40 486 751) (43 475 230) (43 475 230)
203 377 557 202 206 791 202 391 351
Total net of treasury shares 246 135 161 244 966 615 245 151 175
Weighted average number
of shares on which
(loss)/earnings and headline
(loss)/earnings per share
is based: 245 725 869 244 750 048 244 918 888
Weighted average number
of shares on which diluted
(loss)/earnings and diluted
headline (loss)/earnings per
share is based: 286 708 049 286 952 571 286 702 844
Reconciliation of weighted
average number of shares
between basic and diluted
(loss)/earnings per share and
headline and diluted headline
(loss)/earnings per share.
Basic 245 725 869 244 750 048 244 918 888
Dilutive share options 40 982 540 42 202 523 41 783 956
Diluted 286 708 409 286 952 571 286 702 844
Share options treated
as anti-dilutive: 513 692 259 195 499 068
Closing share price (cents)
Ordinary shares 1 600 1 500 1 700
"N" ordinary shares 1 495 1 525 1 650
The following share movements occurred during the period under review
Ordinary "N" ordinary
Shares issued
9 March 2015 - 1 715 748
30 April 2015 - 62 160
17 June 2015 - 55 440
Shares repurchased and cancelled
12 March 2015 387 831 3 835 621
5. Acquisition of subsidiary during the six months ended 30 June 2015
With effect from 1 May 2015, Brimstone acquired control over a 67%
shareholding in Brimstone Mtha UK SPV Limited. Prior to the completion
of the transaction with Old Mutual plc, Old Mutual plc controlled
Brimstone Mtha UK SPV Limited and therefore, even though Brimstone owned
67% of the company, it was not permitted to consolidate the company. Old
Mutual plc's control was removed on 1 May 2015 following Brimstone and
its partner's fulfilment of their obligations in terms of the contract.
Before the settlement of the obligations in terms of the contract,
Brimstone accounted for its share of the investment as an option.
On settlement, Brimstone converted its option asset into an investment
in a subsidiary. No goodwill arose on conversion to an investment in a
subsidiary. The non-controlling interest of 33% is measured at its
proportionate share of the aquiree's identifiable net assets.
Date: 18/08/2015 07:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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