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Reviewed condensed consolidated preliminary financial results for the year ended 30 June 2015
PINNACLE HOLDINGS LIMITED
(Registration number 1986/000334/06)
Share code: PNC
ISIN: ZAE000184149
(“Pinnacle” or “the Group” or “the Company”)
www.pinnacleholdings.co.za
REVIEWED CONDENSED CONSOLIDATED PRELIMINARY FINANCIAL RESULTS for
the year ended 30 June 2015
HIGHLIGHTS
REVENUE UP 12% to R8.0 billion
HEPS UP 10% to 182.9 cents
CASH GENERATED UP 33% to R509 million
DEBT TO EQUITY IMPROVED from 77% to 50%
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Full year
Full year 30 Jun
30 Jun 2014
2015 Restated^
Reviewed Audited
R’000 R’000
Revenue 7 987 636 7 152 444
Cost of sales (6 870 002) (6 082 151)
Gross profit 1 117 634 1 070 293
Operating expenses (653 666) (615 314)
Selling expenses (71 705) (61 860)
Employees expenses (491 520) (478 689)
Administration expenses (97 214) (85 266)
Gain on discounting of finance
lease agreements 2 069 778
Profit on foreign exchange 4 704 5 377
Reclassification of fair value
adjustment on derecognition of asset – 4 346
EBITDA * 463 968 454 979
Depreciation and amortisation (31 509) (23 926)
Impairment of goodwill (5 592) (2 169)
Operating profit before interest 426 867 428 884
Net finance costs (91 445) (78 180)
Investment income 7 767 11 297
Interest paid (99 212) (89 477)
Share of equity accounted
associate income 37 915 20 747
Profit before taxation 373 337 371 451
Taxation (93 233) (98 394)
Net profit for the year 280 104 273 057
Owners of the Company 279 849 272 580
Non-controlling interests 255 477
Other comprehensive income
Items that will not be reclassified
into profit or loss: 17 181 (21 510)
Profit/(loss) on revaluation
of property 22 542 (28 075)
Tax relating to items that will
not be reclassified (5 361) 6 565
Items that can be reclassified into
profit or loss: 6 936 (11 132)
Exchange differences from translating
foreign operations 946 1 011
Profit on acquisition of non-controlling
interest 1 254 –
Cash flow hedge 4 736 (12 143)
Total comprehensive income for
the year 304 221 240 415
Attributable to:
Owners of the Company 303 966 239 938
Non-controlling interests 255 477
* Earnings before interest, taxation, depreciation and
amortisation.
^ Refer restatement/reclassification of prior reporting periods
note.
RECONCILIATION OF HEADLINE EARNINGS
Full year Full year
30 Jun 30 Jun
2015 2014
Reviewed Audited
R’000 R’000
Net profit for the period
attributable to ordinary
shareholders 279 849 272 580
Impairment of goodwill 5 592 2 169
Reclassification of fair value
adjustment on derecognition of asset
after taxation – (3 738)
Reclassification of fair value
adjustment on derecognition of asset – (4 346)
Less: Taxation thereon – 608
Profit on sale of property, plant and
equipment net of taxation (270) (8 533)
Profit on sale of property, plant and
equipment (375) (11 851)
Less: Taxation thereon 105 3 318
Headline earnings 285 171 262 478
Total number of shares in issue (‘000)
– Total issued less treasury shares 155 922 155 922
– Weighted average 155 922 157 638
FINANCIAL REVIEW
Full year
Full year 30 Jun
30 Jun 2014
2015 Restated^
Reviewed Audited
Performance per share (cents)
Basic and diluted earnings per share 179.5 172.9
Headline and diluted headline
earnings per share 182.9 166.5
Returns (%)
Gross profit 14.0 15.0
Operating expenses (8.2) (8.6)
EBITDA * 5.8 6.4
Operating profit before interest
and taxation 5.3 6.0
Effective tax rate ** 27.8 28.1
Net profit 3.5 3.8
Return on equity 20.2 23.4
* Earnings before interest, taxation, depreciation and
amortisation.
** Based on profit before taxation excluding share of equity
accounted associate income.
^ Refer restatement/reclassification of prior reporting periods
note.
CONDENSED SEGMENTAL ANALYSIS
Full year
Full year 30 Jun
30 Jun 2014
2015 Restated^
Reviewed Audited
R’000 R’000
Revenue
ICT Distribution 7 769 806 6 984 069
IT Projects and Services 184 491 169 047
Financial Services 120 157 93 394
Group Central Services – –
Less: Intra-segmental revenue (86 818) (94 066)
7 987 636 7 152 444
Net profit before taxation
ICT Distribution 285 768 294 669
IT Projects and Services 9 740 17 181
Financial Services 47 862 36 020
Group Central Services 29 967 23 581
373 337 371 451
Net profit after taxation
ICT Distribution 203 158 213 485
IT Projects and Services 6 115 13 444
Financial Services 34 461 25 880
Group Central Services 36 370 20 248
280 104 273 057
Net operating assets
ICT Distribution 1 091 575 862 488
IT Projects and Services 39 533 24 521
Financial Services 111 958 60 202
Group Central Services 302 055 287 631
1 545 121 1 234 842
^ Refer restatement/reclassification of prior reporting periods
note.
CONDENSED ANALYSIS OF GOODWILL
Full year Full year
30 Jun 30 Jun
2015 2014
Reviewed Audited
R’000 R’000
Opening balance 116 517 114 940
Business combination acquisitions * – 3 746
Goodwill re-allocated to assets
held-for-sale (2 759) –
Impairments (5 592) (2 169)
Closing balance 108 166 116 517
Business combination acquisitions *
DSP – 1 995
Pacific – 1 751
– 3 746
Impairments
E-Secure (3 597) (883)
Pinnacle Micro – (1 286)
DSP (1 995) -
(5 592) (2 169)
* There were no business combination acquisitions in the current
reporting period, for details of prior period business
combinations refer to the annual financial statements.
ASSETS CLASSIFIED AS HELD-FOR-SALE
1. LAND AND BUILDINGS
During the year, the Group entered into agreements to sell
its Land and Buildings as follows:
Port Elizabeth Property – Situated at 59 Newton Street,
Newton Park for R15 030 000;
Bloemfontein Property – Situated at Unit 9, Quagga Industrial
Park, 38 Eland Street, Quaggafontein, Bloemfontein for
R9 300 000; and
Midrand Property – Situated at 269 Sixteenth Road,
Randjespark, Midrand for R73 750 000.
The above properties are used as branch offices and
warehouses for some of the distribution subsidiaries in Port
Elizabeth, Bloemfontein and Midrand. The Group will continue
to use these properties under long-term lease arrangements
entered into with the purchaser. In total the disposals will
realise R96 216 480 after commission.
2. LAND
Stand 853, 854, 855, 856, 857, 858, 881, 882, 883, 859, 876,
Kosmosdal ext.11, for R52 000 000.
The disposal will realise R50 960 000 after commission.
The above property was vacant land earmarked for future use
as warehousing and offices.
3. INFRASOL PROPRIETARY LIMITED AND ITS SUBSIDIARY MERQU
COMMUNICATIONS PROPRIETARY LIMITED
During the year, the Group has entered into an agreement with
Datacentrix Proprietary Limited, a wholly-owned subsidiary of
Datacentrix Holdings Limited, to dispose of 100% of the
issued share capital of the Group's wholly-owned subsidiary,
Infrasol Proprietary Limited.
The disposal to Datacentrix will include Infrasol’s
subsidiary, Merqu Communications Proprietary Limited as one
indivisible transaction, for a maximum cash consideration of
R85 million. The agreement became unconditional on 30 July
2015.
Full year Full year
30 Jun 30 Jun
2015 2014
Reviewed Audited
R’000 R’000
1. Land and buildings
Property plant and equipment 93 228 –
Assets classified as held-for-sale 93 228 –
2. Land
Property plant and equipment 49 769 –
Assets classified as held-for-sale 49 769 –
3. Infrasol Proprietary Limited and
its subsidiary Merqu Communications
Proprietary Limited
Property plant and equipment 2 968 –
Intangible assets and goodwill 2 759 –
Deferred taxation 554 –
Inventories on hand 3 104 –
Trade and other receivables 48 550 –
Taxation receivable 2 579 –
Cash and cash equivalents 5 102 –
Assets classified as held-for-sale 65 616 –
Trade and other payables (24 513) –
Interest-bearing liabilities (1 381) –
Deferred revenue (189) –
Liabilities associated with assets
classified as held-for-sale (26 083) –
Net assets classified as
held-for-sale 39 533 –
NET ASSETS CLASSIFIED AS
HELD-FOR-SALE 182 530 –
1. Land and buildings 93 228 –
2. Land 49 769 –
3. Infrasol Proprietary Limited and
its subsidiary Merqu
Communications Proprietary
Limited 65 616 –
Assets classified as
held-for-sale 208 613 –
1. Land and buildings – –
2. Land – –
3. Infrasol Proprietary Limited and
its subsidiary Merqu
Communications Proprietary
Limited (26 083) –
Liabilities associated with
assets classified as
held-for-sale (26 083) –
NET ASSETS CLASSIFIED AS
HELD-FOR-SALE 182 530 –
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Full year Full year
30 Jun 30 Jun
2015 2014
Reviewed Audited
R’000 R’000
ASSETS
Non-current assets 850 660 913 787
Property plant and equipment 67 315 176 028
Intangible assets and goodwill 129 824 135 406
Investment in associate 314 678 284 144
Long-term loans – 28 795
Finance lease receivables 311 108 257 957
Deferred taxation 27 735 31 457
Current assets 2 716 198 2 432 892
Inventories on hand 781 900 894 866
Inventories in transit 144 455 76 870
Assets classified as held-for-sale 208 613 –
Short-term loans 21 217 –
Trade and other receivables 1 375 275 1 328 964
Finance lease receivables 146 452 105 758
Taxation receivable 2 161 1 171
Cash and cash equivalents 36 125 25 263
Total assets 3 566 858 3 346 679
EQUITY AND LIABILITIES
Capital and reserves 1 545 121 1 234 842
Share capital and premium 1 680 1 680
Treasury shares (72 856) (41 766)
Non-distributable reserves 57 806 8 589
Cash flow hedge reserve (7 407) (12 143)
Accumulated profits 1 565 523 1 274 822
Non-controlling interests 375 3 660
Non-current liabilities 20 831 519 138
Interest-bearing liabilities 437 487 455
Derivative financial liability – 18 083
Deferred taxation 20 394 13 600
Current liabilities 2 000 906 1 592 699
Trade and other payables 1 193 012 1 129 699
Interest-bearing liabilities 486 388 17 944
Derivative financial liability 21 958 –
Short-term loans 151 078 151 048
Deferred revenue 5 261 12 412
Taxation payable 7 736 4 357
Bank overdrafts 109 390 277 239
Liabilities associated with assets
classified as held-for-sale 26 083 –
Total equity and liabilities 3 566 858 3 346 679
Capital management
Net asset value per share (cents) 990.7 789.6
Net tangible asset value per
share (cents) 907.5 702.8
Working capital management
Investment in working
capital (R'000) 1 103 357 1 158 589
Days inventory outstanding
(excluding in transit) 31.1 44.0
Days sales outstanding 50.7 53.0
Days purchases outstanding 46.9 50.0
Liquidity and solvency
Debt to equity (%) 49.8 77.1
– Attributable to Distribution
and Holdings 5.8 29.9
– Attributable to the Datacentrix
Investment 20.4 23.1
– Attributable to Finance Assets
(Centrafin) 23.6 24.1
Current ratio (excluding stock in
transit) 1.39 1.54
Acid test (excluding stock in transit) 0.96 0.95
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Full year
Full year 30 Jun
30 Jun 2014
2015 Restated^
Reviewed Audited
R’000 R’000
EBITDA * 463 968 454 979
Changes in working capital 28 280 (74 021)
Non-cash flow items 16 492 2 616
Cash generated by operating
activities 508 740 383 574
Net finance costs (91 445) (78 180)
Finance income received 7 767 11 297
Finance expenses paid (99 212) (89 477)
Taxation paid (88 822) (104 247)
Dividends received from equity
accounted investment 12 026 –
340 499 201 147
Cash flows from investing activities
Property, plant and equipment acquired (44 871) (58 725)
Proceeds on disposals of property,
plant and equipment 6 787 34 559
Acquisition of intangible assets (10 529) (8 675)
Net Investment in finance leases
receivable (93 455) (113 584)
Acquisition of subsidiaries – (2 580)
Acquisition of shares in Datacentrix
(including deposit) – (321)
Additional costs incurred on equity
accounted investment (4 645) –
Acquisition of non-controlling
interests – (2 939)
(146 713) (152 265)
Cash flows from financing activities
Interest-bearing liabilities raised 444 68 707
Interest-bearing liabilities repaid (17 995) (28 087)
Non-interest-bearing liabilities
raised – 14
Repurchase of shares – (29 059)
Decrease/(increase) in trust loans 7 578 (106)
Dividends paid – (64 787)
(9 973) (53 318)
Increase/(decrease) in net cash,
cash equivalents and overdrafts 183 813 (4 436)
Net overdraft acquired from business
combinations – (994)
Net cash movements related to assets
classified as held-for-sale (5 102) –
Net overdraft at beginning of year (251 976) (246 546)
Net overdraft at end of year (73 265) (251 976)
* Earnings before interest, taxation, depreciation and
amortisation.
^ Refer restatement/reclassification of prior reporting periods
note.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Full year Full year
30 Jun 30 Jun
2015 2014
Reviewed Audited
R’000 R’000
Opening balance 1 234 842 1 088 059
Shares issued – 14
Shares acquired and cancelled – (29 059)
Comprehensive income for the period 280 104 273 057
Other comprehensive income 18 127 (20 499)
Cash flow hedge reserve 4 736 (12 143)
Acquisition of non-controlling
interest (2 286) (9 398)
Equity-based compensation reserve 9 598 9 598
Dividends paid – (64 787)
Closing balance 1 545 121 1 234 842
Attributable to:
Owners of the Company 1 544 746 1 231 182
Non-controlling interests 375 3 660
RESTATEMENT/RECLASSIFICATION OF PRIOR REPORTING PERIODS
BACKGROUND OF THE RESTATEMENT/RECLASSIFICATION:
CENTRAFIN REVENUE RESTATEMENT
The restatement in the financial records of the Group relates to
the accounting classification of the interest income earned in
terms of the finance lease assets of Centrafin (Proprietary)
Limited (“Centrafin”). Centrafin is mainly involved in the
supply of financing in various forms to customers in relation
to the purchase of ICT equipment. The interest received in terms
of the finance lease assets has been disclosed under the
“interest received” line item below the EBITDA line in the
previous reporting periods. This line item has been reclassified
and is included under the “revenue” line item above the EBITDA
line.
This resulted in the restatement of the comparative figures
presented in terms of the condensed consolidated Statement of
Comprehensive Income, the condensed consolidated Statement of
Cash Flows, the condensed Segmental Analysis and Financial Review
as indicated below.
The justification for the reclassification can be summarised as
follow:
IAS 18 par 7 defines “revenue” as the gross inflow of economic
benefits during the period arising in the course of the ordinary
activities of an entity when those inflows result in increases in
equity, other than increases relating to contributions from
equity participants. From this, it is clear that revenue arises
from the ordinary business activities of the entity, which in the
instance of Centrafin, is its financing and related activities.
Revenue earned from the ordinary activities of the entity should
be faithfully represented according to the nature of the
transactions under the “revenue” line item.
Accordingly, interest earned on finance lease assets, should be
faithfully represented according to the nature of these
transactions as “interest received” as a subsection under the
“revenue” line item as it depicts the main operating activities
of the entity.
Effect on the financial statements of the restatement
The effect of the restatement is set out below for all related
periods:
Full year Full year
30 Jun 30 Jun
2015 2014
Reviewed Audited
R’000 R’000
CENTRAFIN REVENUE RESTATEMENT
Consolidated Statement of
Comprehensive Income
Increase in revenue – 49 416
Decrease in interest received – (49 416)
Consolidated Statement of Cash Flows
Increase in cash generated by operating
activities – 49 416
Decrease in finance income received – (49 416)
Condensed Segmental Analysis
Revenue
Increase in revenue from Financial Services – 49 416
Increase in interest received and
discounted leases within financial
services revenue – (49 416)
Financial review
Returns (%)
Increase in gross profit – 0.6
Increase in EBITDA * – 0.7
Increase in operating profit before
interest and taxation – 0.7
* Earnings before interest, taxation, depreciation and
amortisation.
As the restatement is a pure reclassification between line items
in the Consolidated Statement of Comprehensive Income, it has no
taxation implication and did not result in a restatement of the
opening retained income of the current and prior financial
periods.
COMMENTARY
GROUP FINANCIAL PERFORMANCE
The Board is pleased to announce the financial results for the
year ended 30 June 2015. Revenue increased by 12% to R8.0 billion
and headline earnings per share increased by 10% to 182.9 cents
(2014: 166.5 cents). Increased focus on working capital paid off
with cash generated from operating activities increasing by 33%
to R509 million (2014: R384 million) and a net increase in cash
and cash equivalents of R183 million versus a net decrease of R4
million in 2014.
Inventory on hand decreased by R113 million from June 2014. Much
emphasis has been put on this side of the business and some hard
decisions were taken during the year to manage slow moving lines.
With an increased last half revenue, and lower inventory
holdings, stock days reduced impressively from 44 days to 31
days.
Trade receivables are by and large well controlled. Daily Sales
Outstanding (“DSOs) was at 51 days compared to 53 at the end of
June 2014. The continued growth in our Africa business requires
more diligent controls, and puts pressure on the DSOs because of
longer payment terms taken in those areas.
Daily Purchases Outstanding (“DPOs”) decreased to 47 days (50 in
June 2014) largely as a result of the improvement in stock
management, although still in an acceptable range.
These actions resulted in the Group’s debt to equity ratio
reducing by an impressive 27% from 77% in 2014 to 50% at the end
of June 2015. Of this, the most notable is the reduction in
borrowing in the core distribution and holdings cluster, where
the gearing has reduced from 30% to 6%. The improvement in the
Group’s debt to equity ratio was before any of the announced
corporate actions were finalised, with management of the view
that the ratio will stabilise at these levels once all
transactions are implemented and taking into account further
capital needed for future growth initiatives.
The stated objective of increasing the Group’s overall gross
margins did not materialise, with margins decreasing to 14%
(2014: 15%). However, good progress has been made in two of the
three main business entities, with both Pinnacle Africa and
Centrafin showing increased margins in the second half of 2015.
The increased contribution from AxizWorkgroup, especially in the
second half of 2015, has resulted in the group margin decreasing.
Management is satisfied though that the continual focus will
ensure that the respective clusters operate at the appropriate
gross margins.
Operating expenses were well controlled throughout the period
with an increase of 6% over 2014, again mainly due to the impact
of AxizWorkgroup’s low cost of operation.
The annual assessment of goodwill resulted in an impairment
charge of R5.6 million.
Interest paid increased by R13.3 million and was entirely
attributable to the further investment of R93 million into
Centrafin’s financial assets, as it continues to build its
finance lease book (R458 million) and its leased asset base (R25
million after depreciation), and to the cost of the investment
into Datacentrix Holdings Limited (“Datacentrix”) for the whole
year (2014: 8 months).
The income of R37.9 million (2014: R20.7 million) from
Datacentrix, calculated in accordance with IAS 28, meant that,
after accounting for the finance charges on the funds applied to
its purchase, this investment showed a R12.6 million (2014: R4.1
million) positive effect on earnings for the year.
DIVISIONAL PERFORMANCE
The Distribution division increased revenue by 11%. The ongoing
improvement of this division, after the disruptions experienced
during 2014, is evident in the improved second half numbers, and,
although there were no significant deals during the period, the
revenue for the second half was up on the first half by 20% and
headline earnings by 28%. The investment into new focus areas,
such as the high end storage and server offerings, the large data
and security practice, the infrastructure products (mainly copper
and fibre) and the security and retail solutions products, is now
delivering on its promise with substantial growth, replacing the
revenue declines in the client computing products. Pinnacle
Business Solutions, the Managed Print Services unit, continued to
be a drain on the division’s profitability, albeit in small
numbers. At the year-end, the investment into the unit, though,
had reduced by R22 million since June 2014 and we are confident
that we should be able to reduce this further.
During the early part of 2015, it was decided that Infrasol, the
IT Projects and Services division, would be better positioned
operating under the Group’s substantial investment in the
Services segment. Consequently, Infrasol was sold after the year-
end for a net R82.5 million to Datacentrix. Initial indications
are that significant synergies will be forthcoming from this
move.
Centrafin was the star performer of the Group with revenue growth
of 29% and a net profit after tax growth of 33%. Centrafin
continues to grow the book in a controlled manner (now at R483
million from R382 million a year ago). The management of the book
remains of the highest order with delinquent debtors remaining
well below industry norms. This can be attributed to the
application of strict credit control policies, the specific
selection of assets to fund and a well experienced credit
collection team.
CORPORATE ACTIVITY
Infrasol and Merqu: Towards the end of the financial year,
Pinnacle advised shareholders that it had entered into an
agreement with Datacentrix to dispose of its entire holding in
Infrasol and Merqu for a maximum cash consideration of R85
million. This transaction became unconditional on 30 July 2015
and so the assets of Infrasol and Merqu have been reclassified as
“assets classified as held-for-sale” and are shown at the
carrying value of the net assets.
Sale of land and properties: At the beginning of April 2015,
Pinnacle entered into separate agreements to dispose of its owned
properties and the land that it had held for development of its
new offices in Samrand. The consideration for the land disposal
was received in early August 2015 and it is anticipated that the
proceeds on the disposal of the properties will be received
before the end of October 2015. These assets were valued at the
end of June 2015, in line with the Group’s accounting policy, at
the estimated present value of the disposal proceeds and have
been reclassified as “assets classified as held-for-sale”.
Application of funds: The funds from the disposal of Infrasol,
the land and the properties will be used to repay debt and allow
Pinnacle to restructure its funding of Centrafin. The total
proceeds of R232 million will be applied to repay the Investec
facility of R150 million, the bond held over the land of R33
million, and the balance to reduce the Nedbank preference share
facility. This will bring net borrowings down to approximately
R540 million, and, although the distribution overdrafts vary
during the year, management is confident that it will be able to
remain within the Board’s debt to equity target of 50%.
Corporate bond: The 3 year corporate bond expires on 30 April
2016. The Group has received several firm proposals to replace
the bond, either with a new issuance into the Debt Capital
Markets, or through a securitisation structure financed by one of
the leading South African banks. The new structure will be ring
fenced for the benefit of Centrafin to ensure that the planned
growth of the leased book does not impact on the liquidity
requirements of the rest of the Group.
CHANGE IN DIRECTORATE
On 27 October 2014, Ms D Mashile-Nkosi resigned as Chairperson of
the Board and Mr A Tugendhaft was subsequently appointed as Non-
executive Chairman. In accordance with King III requirements,
when the Chairman is considered not to be independent, a Lead
Independent Director is required to be appointed. Consequently,
Mr B Sibiya was appointed as Lead Independent Director on 10
March 2015.
Ms N Medupe was appointed as an independent Non-executive
director on 29 August 2014 and Mr HMP Ferreira stepped down from
the Board on 27 October 2014.
In order to improve the efficiency and effectiveness of the
Board, it was decided to reduce the size of the Board to comprise
only two Executive directors, being the Chief Executive Officer
and the Chief Financial Officer. Messrs TAM Tshivhase and RN
Nkuna therefore stepped down from the Board on 10 March 2015.
SUBSEQUENT EVENTS
No other events material to the understanding of this report
occurred in the period between the financial period-end date and
the date of issue of this report.
DIVIDENDS
The Company’s policy had been to declare a dividend of 20% of
HEPS (and since the introduction of dividend tax, a gross
dividend of 20% of HEPS before deducting dividend tax). After
careful consideration, the Board has decided to maintain its
suspension of this policy and that, as with the prior year, no
dividend be declared for the current year. This suspension of the
dividend will be reviewed during the 2016 financial year given
the good progress that the Group is making towards its overall
recovery plan.
PROSPECTS
The overall economy faces challenging times ahead, with the
consumer becoming more financially constrained than ever before
and the manufacturing and resources sector under pressure due to
low commodity prices, power disruptions and labour issues.
Nonetheless, the IT sector has demonstrated its resilient nature
due to the increasing importance technology plays in modern day
life, and it is envisaged that it will continue to remain so.
After a year of strategic alignment, during which a lot of work
was performed to contribute to the sustainable financial well-
being of the Group, the Group is keen to rigorously pursue all
commercial opportunities to take advantage of its efficient
infrastructure and broad offerings in the distribution and
services cluster. The efforts of the Group to expand its
offerings into the rest of Africa are paying off, with year on
year revenue growth into the region reaching 28% for the year to
June 2015. The revenue contribution from outside South Africa’s
borders is now 15% of total distribution revenue.
With a rejuvenated balance sheet in place, the Group is keen to
expand its offering through acquisition opportunities of suitable
targets.
STATEMENT OF COMPLIANCE, BASIS OF PREPARATION AND ACCOUNTING
POLICIES
The reviewed condensed consolidated financial statements for the
year ended 30 June 2015 have been prepared in accordance with the
Group’s accounting policies under the supervision of the Chief
Financial Officer, RD Lyon CA, and complies with IAS 34: Interim
Financial Reporting, the framework concepts and the measurement
and recognition requirements of International Financial Reporting
Standards (“IFRS”), SAICA financial reporting guides as issued by
the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by the Financial Reporting Standards
Council, the Listings Requirements of the JSE Limited and the
requirements of the Companies Act of South Africa (Act 71 of
2008), as amended. All new standards and interpretations that
came into effect during the year were assessed and adopted with
no material impact to the reviewed condensed consolidated
financial statements. The accounting policies, inclusive of
reasonable judgements and assessments, applied in the reviewed
condensed consolidated financial statements, are consistent with
those applied in the preparation of the audited consolidated
annual financial statements for the year ended 30 June 2014
except for the change due to the restatement of prior year
figures as disclosed above. This change relates to the
reclassification of interest income from interest received to
revenue. The accounting policies applied are consistent to the
accounting policies applied in the consolidated annual financial
statements for the Group and comply with IFRS.
The Board of directors of Pinnacle Holdings Limited (“the Board”)
take full responsibility for the preparation of this preliminary
report and that the financial information has been correctly
extracted from the underlying consolidated annual financial
statements.
The reviewed condensed consolidated financial statements comprise
the condensed Statement of Financial Position at 30 June 2015 and
the condensed Statements of Comprehensive Income, Changes in
Equity and Cash Flows for the year then ended.
The reviewed condensed consolidated financial statements of the
Group are prepared as a going concern on a historical basis
except for certain financial instruments, which are stated at
fair value as applicable.
REVIEW
The condensed consolidated financial statements and this SENS
announcement have been reviewed by the Group’s auditors,
SizweNtsalubaGobodo Incorporated. The review has been conducted
in terms of International Standards on Review Engagements. A copy
of the unmodified review report is available for inspection at
the Company’s registered office. This auditor’s review report
does not necessarily report on all the information contained in
this announcement. Shareholders are therefore advised that in
order to obtain a full understanding of the nature of the
auditor’s engagement, they should obtain a copy of this auditor’s
review report together with the accompanying financial
information from the Company’s registered office. Any reference
to future financial performance included in this announcement has
not been reviewed nor reported on by the Group’s auditors.
For and on behalf of the Board
A Tugendhaft AJ Fourie
Chairperson Chief Executive Officer
Midrand
9 September 2015
PINNACLE HOLDINGS LIMITED
Directors:
A Tugendhaft * (Chairperson), AJ Fourie (Chief Executive
Officer), RD Lyon CA (Chief Financial Officer), SH Chaba*^,
N Medupe *^, B Sibiya *^, E van der Merwe*^
* Non-executive ^ Independent non-executive
Registered Office:
The Summit, 269, 16th Road, Randjespark, Midrand, 1685
Preparer of results: RD Lyon CA
Company Secretary: JV Parkin (BCompt(Hons), CTA)
Transfer Secretaries:
Computershare Investor Services (Pty) Ltd, Ground Floor, 70
Marshall Street, Johannesburg, 2001
Auditors:
SizweNtsalubaGobodo Inc., Registered Auditors, Summit Place
Office Park, Building 4, Garsfontein Road 221, Menlyn, 0081
Sponsor:
Deloitte & Touche Sponsor Services (Pty) Ltd, Building 8,
Deloitte Place, The Woodlands, 20 Woodlands Drive, Woodmead, 2196
Date: 09/09/2015 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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