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Condensed consolidated interim financial statements for the six months ended 30 September 2015
Nictus Limited
(Nictus or the Company)
(Incorporated in the Republic of South Africa)
Registration number RSA: 81/011858/06
Registration number NAM: 781/11858
JSE share code: NCS
ISIN number: NA0009123481
www.nictuslimited.co.za
Condensed consolidated interim financial statements for the six months
ended 30 September 2015
Group revenue increased by 6,20% to R26,955 million
Group total assets year on year increased by 5,00% to R531,083 million
Profit after taxation increased by 80,55% to R4,873 million
Condensed consolidated statement of financial position
at 30 September 2015
Unaudited Audited
30 Sept 30 Sept 31 March
Figures in R’000 2015 2014 2015
Assets
Non-current assets
Property, plant and
equipment 17 275 17 051 17 294
Intangible assets 480 573 588
Investments 39 658 36 595 38 629
Deferred tax assets 2 457 3 971 2 426
Loans and receivables 4 847 5 540 6 203
64 717 63 730 65 140
Current assets
Current assets 466 366 442 063 435 940
Total assets 531 083 505 793 501 080
Equity and liabilities
Equity
Stated capital 48 668 48 668 48 668
Revaluation reserve 8 170 8 170 8 170
Retained earnings 34 462 27 452 31 577
91 300 84 290 88 415
Liabilities
Non-current liabilities
Deferred tax liabilities 2 584 3 829 2 384
2 584 3 829 2 384
Current liabilities
Trade and other payables 9 819 9 252 12 212
Insurance contract
liabilities 427 380 408 422 398 069
437 199 417 674 410 281
Total liabilities 439 783 421 503 412 665
Total equity and
liabilities 531 083 505 793 501 080
Condensed consolidated statement of comprehensive income
for the six months ended 30 September 2015
Unaudited Audited
Six Six
months months Year
ended ended ended
30 Sept 30 Sept 31 March
Figures in R’000 2015 2014 2015
Revenue 26 955 25 382 55 932
Cost of sales (10 567) (9 194) (21 722)
Gross profit 16 388 16 188 34 210
Other income 2 617 1 033 2 328
Investment income from
operations 13 152 13 560 28 796
Operating and
administrative expenses (29 356) (29 278) (61 635)
Operating profit 2 801 1 503 3 699
Investment income 2 241 2 057 3 037
Profit before taxation 5 042 3 560 6 736
Taxation (expense)/credit (169) (861) 88
Profit after taxation 4 873 2 699 6 824
Other comprehensive income
for the period – – –
Total comprehensive income
for the period 4 873 2 699 6 824
Profit and total
comprehensive income
attributable to:
Owners of the Company 4 873 2 699 6 824
Earnings per share
Basic earnings per share
(cents) 7,35 4,07 10,30
Diluted earnings per share
(cents) 7,35 4,07 10,30
Weighted average number of
shares in issue (000s) 66 270 66 270 66 270
Condensed consolidated statement of cash flows
for the six months ended 30 September 2015
Unaudited Audited
Six
Six months
months ended Year
ended 30 Sept ended
30 Sept 2014 31 March
Figures in R’000 2015 Restated* 2015
Cash flows from operating
activities
Cash (utilised
by)/generated from
operations (34 171) 23 179 (7 130)
Investment income received
from operations 12 340 12 880 23 723
Dividends received 812 680 1 339
Dividends paid (1 988) – –
Interest received – 2 057 –
Net cash (utilised
by)/generated from
operating activities (23 007) 38 796 17 932
Net cash generated
from/(utilised by)
investing activities 20 827 (110 591) (91 630)
Total cash movement for the
period (2 180) (71 795) (73 698)
Cash and cash equivalents
at the beginning of the
period 58 116 131 814 131 814
Total cash and cash
equivalents at the end of
the period 55 936 60 019 58 116
*Refer to note 6 on page 6.
Condensed consolidated statement of changes in equity
for the six months ended 30 September 2015
Revalua-
Share tion Retained Total
Figures in R’000 capital reserve earnings equity
Balance at 1 April 2014 48 668 8 170 24 753 81 591
Total comprehensive
income – – 2 699 2 699
Profit for the period – – 2 699 2 699
Balance at 30 September
2014 48 668 8 170 27 452 84 290
Total comprehensive
income – – 4 125 4 125
Profit for the period – – 4 125 4 125
Balance at 31 March
2015 48 668 8 170 31 577 88 415
Total comprehensive
income – – 4 873 4 873
Profit for the period – – 4 873 4 873
Dividend paid (note 7) – – (1 988) (1 988)
Balance at 30 September
2015 48 668 8 170 34 462 91 300
Reconciliation between earnings and headline earnings
for the six months ended 30 September 2015
Unaudited Audited
Six Six
months months Year
ended ended ended
30 Sept 30 Sept 31 March
Figures in R’000 2015 2014 2015
Profit for the period, net
of taxation 4 873 2 699 6 824
Profit on disposal of
property, plant and
equipment net of taxation (35) – –
Headline earnings 4 838 2 699 6 824
Headline earnings per share
(cents) 7,30 4,07 10,30
Diluted headline earnings
per share (cents) 7,30 4,07 10,30
Condensed segmental report
for the six months ended 30 September 2015
Unaudited Audited
Six Six
months months Year
ended ended ended
30 Sept 30 Sept 31 March
Figures in R’000 2015 2014 2015
Segment assets
Furniture Retail 64 452 50 079 63 782
Insurance and Finance 510 061 488 835 469 363
574 513 538 914 533 145
Head office and
eliminations (43 430) (33 121) (32 065)
531 083 505 793 501 080
Segment revenue
Furniture Retail 18 849 17 954 37 717
Insurance and Finance 8 829 6 292 19 818
27 678 24 246 57 535
Head office and
eliminations (723) 1 136 (1 603)
26 955 25 382 55 932
Profit/(loss) after
taxation
Furniture Retail 446 (1 457) (764)
Insurance and Finance 2 656 4 389 4 564
3 102 2 932 3 800
Head office and
eliminations 1 771 (233) 3 024
4 873 2 699 6 824
Notes to the financial information
for the six months ended 30 September 2015
1. Basis of preparation
The condensed consolidated interim financial statements (“interim
financial statements”) are prepared in accordance with International
Financial Reporting Standards, (IAS) 34 Interim Financial Reporting, the
SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Pronouncements as issued by Financial Reporting
Standards Council and the requirements of the Companies Act of South
Africa. The accounting policies applied in the preparation of these
interim financial statements are in terms of International Financial
Reporting Standards and are consistent with those applied in the
previous annual financial statements.
The interim financial statements are presented in thousands of South
African Rands (R’000s) on the historical cost basis, except for
derivative financial instruments which are measured at fair value and
land and buildings held for administrative purposes which are measured
at revalued amounts.
The interim financial statements for the period ended 30 September 2015,
together with the statements regarding the prospects of the Group, have
not been audited by the Group’s auditors.
The interim financial statements as reported herein have been prepared
by the Group financial director of Nictus Limited, Eckhart Prozesky CA
(SA).
2. Directors’ responsibility
The directors take full responsibility for the preparation of the
interim financial statements.
3. Related parties
During the period, certain companies within the Group entered into
transactions with each other. These intra-Group transactions have been
eliminated on consolidation. Related party information is unchanged from
that reported at 31 March 2015. Refer to the 2015 audited financial
statements for further information, accessible on the Nictus website.
4. Events after reporting date
There were no events after the reporting date and up to the date of
approval of these interim financial statements that affected the
presentation of the interim financial statements for the period ended 30
September 2015.
5. Changes to the board
Philippus J de W Tromp and John D Mandy were re-elected as directors of
Nictus Limited at the annual general meeting on 20 August 2015.
6. Restatement
As disclosed in the annual financial statements for the year ended 31
March 2015 short-term deposits with an original maturity date of more
than three months have been classified as current investments. These
investments were disclosed as cash and cash equivalents at 30 September
2014. To ensure consistency, the Group’s statement of cash flows has
been restated to reflect the cash flows of current investments
activities amounting to R94 061 as at 30 September 2014.
The restatement relates to a reclassification within current assets and
has no effect on the Group’s basic or diluted earnings per share and had
no impact on the Group’s condensed statement of financial position and
the Group’s condensed statement of comprehensive income.
7. Dividend
The board declared a final dividend of 3 cents per ordinary share for
the year ended 31 March 2015 on 30 June 2015, to all ordinary
shareholders recorded in the books of Nictus Limited at the close of
business on Friday, 24 July 2015. The dividend was paid on Monday, 27
July 2015.
No interim dividend has been declared.
8. Determination and disclosure of fair values
Fair values have been determined for measurement and/or disclosure
purposes based on the following methods:
Property, plant and equipment
The fair value of land and buildings is estimated by using the income
capitalisation method. This method requires the net annual income
generated by the property, based on market trends, to be capitalised at
an appropriate rate of return to reflect the risk, specific investment
demands and the overall condition of the structures.
Investments in equity and debt securities
The fair value of financial assets at fair value through profit or loss
is determined by reference to their quoted closing bid price at the
reporting date. The fair value of held-to-maturity investments is
determined for disclosure purposes only.
The fair values of the financial assets were determined as follows:
– The fair values of listed or quoted investments are based on the
quoted market price;
– The fair values of unlisted investments are determined by directors’
valuations at year end. These valuations are based on the net asset
value of each investment. In addition, the performance of the unlisted
investment for the past three years is taken into account to determine
the value of the investments. The performance is measured using
valuation models in the specific industry the investment is made; and
– Debt securities are measured at fair value through profit or loss.
Trade and other receivables
The fair value of trade and other receivables is estimated as the
present value of future cash flows, discounted at the market rate of
interest at the reporting date. The carrying amount of short-term trade
and other receivables is believed to approximate their fair values.
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated
based on the present value of future principal and interest cash flows,
discounted at the market rate of interest at the reporting date. For
finance leases the market rate of interest is determined by reference to
similar lease agreements.
Trade and other payables
All trade and other payables are of a short-term nature and the fair
value of trade and other payables is believed to approximate the
carrying amount.
Cash and cash equivalents
The cash and cash equivalents for the Group is of a short-term nature
and the fair value of bank overdrafts approximates the carrying amount.
8.1 Fair value of land and buildings
Land and buildings, which consist of a business premises situated on erf
2134, Ferndale, Johannesburg, are independently valued every three years.
The Company’s directors value the Group’s land and buildings on an
annual basis. An external, independent valuation company, having
appropriate recognised professional qualifications and recent experience
in the locations and category of property being valued, also provides
supporting information used in the annual directors’ valuation process.
The fair values are based on valuations and other market information
that take into consideration the estimated rental value and replacement
value of the property. A market yield is applied to the estimated rental
value to arrive at the gross property valuation. The directors have
assessed the residual value of the properties at 30 September 2015 and
calculated that the residual value approximates the current carrying
value. No depreciation has therefore been recognised in the current
period in respect of the properties.
Figures in R’000 Level 1 Level 2 Level 3 Total
Land and buildings – – 16 100 16 100
The valuation techniques to fair value assets and liabilities in Level 3.
Assets Method Major assumptions
Land and buildings Income Capitalisation rate
capitalisation
method
Rental per square
metre per Rhode
report
Land and
Figures in R’000 buildings
Reconciliation of land and buildings at
fair value in Level 3
Balance at 1 April 2015 16 100
Total gains or losses in other –
comprehensive income
Fair value measurements –
Balance at 30 September 2015 16 100
Sensitivity analysis
Land and buildings
Presented below is an analysis of the impact on the fair value of the
land and buildings for changes in the key valuation assumptions.
Figures in R’000 Capitalisation rate
Income capitalisation 12,63% 13,63% 14,63%
method
Rental (5% decrease) 16 200 15 600 15 100
Rental (rate per Rhode 16 600 16 100 15 500
report)
Rental (5% increase) 17 100 16 400 15 900
Figures in R’000 Depreciation rate
Depreciated replacement 54% 55% 56%
cost method
Building costs (5% 15 900 15 800 15 700
decrease)
Building costs (rate per 16 200 16 100 16 000
AECOM’s African Property
and Construction Handbook
of 2013)
Building costs (5%
increase) 16 300 16 200 16 100
8.2 Fair value hierarchy of financial assets at fair value through
profit or loss
For financial assets recognised at fair value, disclosure is required of
the fair value hierarchy which reflects the significance of the inputs
used to make the measurements. There were no transfers between the levels
for the reporting period.
Level 1 represents those assets which are measured using unadjusted
quoted prices for identical assets.
Level 2 applies inputs other than quoted prices that are observable for
the assets either directly (as prices) or indirectly (derived from
prices).
Level 3 applies inputs which are not based on observable market data.
Unaudited Audited
Six Six
months months Year
ended ended ended
30 Sept 30 Sept 31 March
Figures in R’000 2015 2014 2015
Level 1
Listed shares 25 044 23 775 24 673
Corporate bonds 1 966 1 960 1 988
Unit trusts 12 648 10 860 11 968
39 658 36 595 38 629
8.3 Financial assets by category
The accounting policies for financial assets have been applied to the
line items below:
Loans Fair
and value
recei- through Held to
vables profit maturity
at or loss at
amortised – held for amortised
Figures in R’000 cost trading cost Total
Group
30 September 2015
Loans and receivables 46 531 – – 46 531
Investments – 37 692 1 966 39 658
Trade receivables 257 656 – – 257 656
Short-term deposit 111 090 – – 111 090
Cash and cash
equivalents 55 936 – – 55 936
471 213 37 692 1 966 510 871
Loans
and Fair value
recei- through Held to
vables profit maturity
at or loss at
amortised – held for amortised
Figures in R’000 cost trading cost Total
30 September 2014
Loans and receivables 34 616 – 34 616
Investments – 34 635 1 960 36 595
Trade receivables 198 435 – – 198 435
Short-term deposit 154 533 – – 154 533
Cash and cash
equivalents 60 019 – – 60 019
447 603 34 635 1 960 484 198
31 March 2015
Loans and receivables 45 484 – – 45 484
Investments – 36 641 1 988 38 629
Trade receivables 192 524 – – 192 524
Short-term deposit 131 881 – – 13 881
Cash and cash
equivalents 58 116 – – 58 116
428 005 36 641 1 988 466 634
The carrying amounts of the financial assets approximate their fair
values.
8.4 Financial liabilities by category
The accounting policies for financial liabilities have been applied to
the line items below:
Financial
liabilities
at
amortised
Figures in R’000 cost Total
Group
30 September 2015
Trade and other payables 9 701 9 701
30 September 2014
Trade and other payables 9 252 9 252
31 March 2015
Trade and other payables 11 281 11 281
The carrying amounts of the financial liabilities approximate their fair
values.
9. Prospects
The Group has historically generated more earnings in the second part of
the financial year than the first. The board is confident that despite
the economic and environmental challenges present within the South
African economy, the various segments are well placed to build on the
positive results achieved in the first six months to ensure sustainable
growth.
On behalf of the board
NC Tromp
HE Prozesky
Randburg
30 November 2015
Directors
Barend J Willemse
Independent non-executive chairman
Gerard Swart
Independent non-executive
John D Mandy
Independent non-executive
Philippus J de W Tromp
Non-executive
Nicolaas C Tromp
Executive Group managing director
Gerard R de V Tromp
Executive deputy Group managing director
Eckhart H Prozesky
Executive Group financial director
Registered office of the Company
Head office
1st Floor, Nictus Building
Corner of Pretoria and Dover Street, Randburg
PO Box 2878, Randburg 2125
Windhoek office
3rd floor, Corporate House
17 Lüderitz Street, Windhoek
Private Bag 13231, Windhoek
Company secretary
Veritas Board of Executors Proprietary Limited
Registration number 1984/007487/07
1st Floor, Nictus Building
Corner of Pretoria and Dover Street, Randburg
PO Box 2878, Randburg 2125
Auditors and reporting accountant
KPMG Inc.
Registration number 1999/021543/21
KPMG Crescent
85 Empire Road, Parktown 2193
Private Bag 9, Parktown 2122
Sponsor
KPMG(Pty)Ltd
1 Albany road
Parktown
2122
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