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PRESCIENT LIMITED - Interim Results for the Six Months Ended 30 September 2015

Release Date: 30/11/2015 17:37
Code(s): PCT     PDF:  
Wrap Text
Interim Results for the Six Months Ended 30 September 2015

PRESCIENT LIMITED
Incorporated in the Republic of South Africa
Registration number 1936/008278/06
Share code: PCT
ISIN: ZAE000163531
"Prescient" or "the Group"

Unaudited Interim Results
For the Six Months Ended 30 September 2015

Highlights

     * Assets under management of R67.4 billion (September 2014: R60.4 billion)
     * Local third party assets under administration of R64.1 billion (September 2014: R52.0 billion) and offshore assets
       under administration of EUR957.1 million (September 2014: EUR812.5 million)
     * Profit after tax for the period of R72.7 million (September 2014: R56.4 million)
     * Headline earnings per share of 3.85 cents per share (September 2014: 3.59 cents per share)
     * Interim gross dividend of 2.85 cents per share (September 2014: 2.75 cents per share) 

Unaudited condensed consolidated statement of financial position

                                                               Unaudited    Unaudited      Audited
                                                             30 Sep 2015  30 Sep 2014  31 Mar 2015
                                                                   R'000        R'000        R'000
Assets
Non-current assets                                            10 822 375    9 457 779   10 517 632
Property and equipment                                            27 877       26 724       26 357
Investment property                                               29 953       24 279       24 911
Goodwill and intangible assets                                   414 622      411 061      414 048
Deferred tax asset                                                10 937        7 589        7 483
Long-term loans and other receivables                             52 386       30 586       51 874
Investment in equity-accounted investees                          13 811        8 523       14 906
Financial assets at fair value through profit or loss            159 704      144 374      157 925
Linked investments backing policyholder funds                 10 113 085    8 804 643    9 820 128
Current assets                                                   491 949      637 915      906 102
Inventory                                                         41 025       17 764       22 154
Trade and other receivables                                      224 744      189 142      210 924
Amounts owing by clients and clearing houses                      73 565      354 213      561 790
Taxation receivable                                               25 840        2 676       14 262
Cash and cash equivalents                                        126 775       74 120       96 972
Total assets                                                  11 314 324   10 095 694   11 423 734
Equity
Stated capital                                                   665 969      660 600      664 702
Reserves                                                           8 466      (2 266)      (7 287)
Retained income                                                  151 507      111 593      138 578
Total equity attributable to owners of the Company               825 942      769 927      795 993
Non-controlling interests                                         22 932        4 019       14 139
Total equity                                                     848 874      773 946      810 132
Liabilities
Non-current liabilities                                       10 138 570    8 857 635    9 842 927
Deferred tax liability                                            13 946        7 402       11 237
Policyholder investment contract liabilities                  10 113 085    8 802 649    9 817 582
Loans payable                                                     11 539       47 584       14 108
Current liabilities                                              326 880      464 113      770 675
Trade and other payables                                         112 556       83 770       98 363
Amounts owing to clients and clearing houses                      71 712      352 219      558 745
Loans payable                                                     62 943            –       56 458
Current tax payable                                                6 921       10 803        9 405
Bank overdraft                                                    72 748       17 321       47 704
Total liabilities                                             10 465 450    9 321 748   10 613 602
Total equity and liabilities                                  11 314 324   10 095 694   11 423 734

Unaudited condensed consolidated segment report

                                        Financial Services                  Information Management Services                       Group

                            Six months unaudited  Six months unaudited  Six months unaudited  Six months unaudited  Six months unaudited  Six months unaudited
                                 30 Sep 2015           30 Sep 2014           30 Sep 2015            30 Sep 2014          30 Sep 2015           30 Sep 2014

                                     R'000                  R'000                 R'000                 R'000                R'000                 R'000
Segment external revenue           192 831                151 117               258 806               238 253              451 637               389 370
Segment profit before tax           70 116                 55 841                23 330                23 744               93 446                79 585

Unaudited condensed consolidated statement of profit or loss and other comprehensive income

                                                                  Six months            Six months
                                                                   unaudited             unaudited
                                                                 30 Sep 2015       %   30 Sep 2014
                                                                       R'000  Change         R'000

Total income                                                         451 637      16       389 370   
Expenses                                                           (354 235)      15     (306 762)   

Profit from operations                                                97 402      18        82 608   
Other income                                                           1 447                 2 601
Share of loss of equity-accounted investees (net of tax)             (1 106)               (1 223)
Finance costs                                                        (4 297)               (4 401)
Profit before taxation                                                93 446      17        79 585   
Income tax expense                                                  (20 792)              (23 169)
Profit for the period                                                 72 654      29        56 416   
Other comprehensive income
Items that are or may be reclassified to profit or loss
Foreign currency translation differences – foreign operations         15 353                 (702)    
Other comprehensive income for the period, net of tax                 15 353                 (702)
Total comprehensive income for the period                             88 007      58        55 714    
Profit attributable to:
Owners of the Company                                                 62 391      10        56 708    
Non-controlling interests                                             10 263                 (292)
Profit for the period                                                 72 654      29        56 416    
Total comprehensive income attributable to:
Owners of the Company                                                 77 744      39        56 006    
Non-controlling interests                                             10 263                 (292)
Total comprehensive income for the period                             88 007      58        55 714    
Earnings per share (cents)
- Basic                                                                 3.85       7          3.59    
- Diluted                                                               3.85       7          3.59
Notes to the statement of comprehensive income
Headline earnings per share (cents)
- Basic                                                                 3.85       7          3.59    
- Diluted                                                               3.85       7          3.59
Dividend per share (cents)
Interim                                                                 2.85       4          2.75

Unaudited condensed consolidated statement of cash flows
                                                                                        Six months
                                                                         Six months      restated* 
                                                                          unaudited      unaudited
                                                                        30 Sep 2015   30 Sep 2014 
                                                                              R'000          R'000
Cash flows from operating activities
Profit for the period                                                        72 654         56 416
Income tax expense                                                           20 792         23 169
Non-cash movements and adjustments to profit before tax                   (445 430)   (1 810 792)* 
Changes in working capital                                                 (11 156)         17 212
Cash generated from policyholder activities                                 449 466     1 806 170* 
Dividends received                                                            1 283          1 288
Dividends paid                                                             (50 931)       (42 460)
Interest received                                                             9 499          8 371
Interest paid                                                               (4 297)        (4 401)
Tax paid                                                                   (35 599)       (18 838)
Net cash inflow from operating activities                                     6 281         36 135
Cash outflow from investing activities                                      (9 149)        (6 039)
Cash outflow from financing activities                                        (115)        (6 278)
Net (decrease)/increase in cash and cash equivalents                        (2 983)         23 818
Effect of exchange rate fluctuations on cash held                             7 742           (63)
Net cash and cash equivalents at the beginning of the period                 49 268         33 044
Net cash and cash equivalents at the end of the period                       54 027         56 799
Comprising
Cash and cash equivalents                                                   126 775         74 120
Bank overdraft                                                             (72 748)       (17 321)
Net cash and cash equivalents at the end of the period                       54 027         56 799

* The above cash flow comparatives include the policyholder activities which were previously excluded. These cash flows represent net contributions and
withdrawals by policyholders and the related investing activities. Non-cash movements and adjustments to profit before tax amounting to R4.6 million, as
previously stated, has been restated to R1.8 billion, and resulted in the inclusion of cash generated from policyholder activities. The net effect on the
statement of cash flows for the Group is nil.

Earnings per share
                                                                          Unaudited      Unaudited
Shares                                                                  30 Sep 2015    30 Sep 2014
Actual number of shares in issue at the end of the period             1 667 461 093  1 645 915 093
Weighted average number of shares in issue at the end of the period   1 600 060 980  1 579 783 732
Weighted average number of treasury shares                               29 137 952     26 710 245
Weighted average number of forfeitable share plan shares                 21 779 756              –
Earnings                                                                      R'000          R'000
Earnings attributable to shareholders                                        72 654         56 416
Non-controlling interests                                                  (10 263)            292
Earnings attributable to FSP shareholders                                     (823)              –

Earnings attributable to ordinary shareholders                               61 568         56 708
Headline earnings attributable to ordinary shareholders                      61 568         56 708

Unaudited condensed consolidated statement of changes in equity
                                                                                                    Share-based                            Non-
                                                                     Stated  Translation  Treasury      payment  Retained           controlling      Total
R'000                                                               capital      reserve    shares      reserve    income     Total   interests     equity
Balance at 1 April 2014                                             637 062       11 013  (11 854)            –    96 367   732 588       8 461    741 049
Total comprehensive income for the period
Profit for the period                                                     –            –         –            –    56 708    56 708       (292)     56 416
Total other comprehensive income                                          –        (702)         –            –         –     (702)           –      (702)
Total comprehensive income for the period                                 –        (702)         –            –    56 708    56 006       (292)     55 714
Transactions with owners recognised directly in equity
Contributions by and distributions to owners of the Company
Treasury shares bought                                                    –            –     (837)            –         –     (837)           –      (837)
Dividends declared during the period                                      –            –         –            –  (41 482)  (41 482)       (978)   (42 460)
Issue of ordinary shares                                             23 538            –         –            –         –    23 538           –     23 538
Equity-settled share-based payments                                       –            –         –          114         –       114           –        114
Total contributions by and distributions to owners of the Company    23 538            –     (837)          114  (41 482)  (18 667)       (978)   (19 645)
Changes in ownership interests in subsidiaries
Loss of control                                                           –            –         –            –         –         –     (3 172)    (3 172)
Total changes in ownership interests in subsidiaries                      –            –         –            –         –         –     (3 172)    (3 172)
Total transactions with owners of the Company                        23 538            –     (837)          114  (41 482)  (18 667)     (4 150)   (22 817)
Balance at 30 September 2014                                        660 600       10 311  (12 691)          114   111 593   769 927       4 019    773 946
Balance at 1 April 2015                                             664 701        6 414  (14 501)          801   138 576   795 992      14 140    810 132
Total comprehensive income for the period
Profit for the period                                                     –            –         –            –    62 391    62 391      10 263     72 654
Total other comprehensive income                                          –       15 353         –            –         –    15 353           –     15 353
Total comprehensive income for the period                                 –       15 353         –            –    62 391    77 744      10 263     88 007
Transactions with owners recognised directly in equity
Contributions by and distributions to owners of the Company
Treasury shares bought                                                    –            –     (203)            –         –     (203)           –      (203)
Dividends declared during the period                                      –            –         –            –  (49 460)  (49 460)     (1 471)   (50 931)
Issue of ordinary shares                                              1 268            –         –            –         –     1 268           –      1 268
Equity-settled share-based payments                                       –            –         –          602         –       602           –        602
Total contributions by and distributions to owners of the Company     1 268            –     (203)          602  (49 460)  (47 794)     (1 471)   (49 265)
Total transactions with owners of the Company                         1 268            –     (203)          602  (49 460)  (47 794)     (1 471)   (49 265)
Balance at 30 September 2015                                        665 969       21 767  (14 704)        1 403   151 507   825 942      22 932    848 874

Notes to the unaudited condensed consolidated interim financial statements

Basis of preparation and accounting policies

Statement of compliance

The unaudited condensed consolidated interim 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 or its successor, the
requirements of the South African Companies Act, Act 71 of 2008, and the Listings Requirements of the JSE. The unaudited
condensed consolidated interim financial statements do not include all of the information required for full annual
financial statements. These unaudited condensed consolidated interim 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 unaudited condensed consolidated interim financial statements are presented in Rand, rounded
to the nearest thousand. The accounting policies applied in the presentation of the unaudited condensed consolidated
interim financial statements are in accordance with International Financial Reporting Standards and are consistent with
those presented in the previous annual financial statements.

These unaudited condensed consolidated interim financial statements were prepared under the supervision of Michael
Buckham, CA(SA), and approved by the Board of Directors on 27 November 2015, and have not been reviewed or audited by
the Company's auditors, KPMG Inc.

Judgements and estimates

Preparing the unaudited condensed consolidated interim 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 expense. Actual results may differ from these estimates.

In preparing these unaudited condensed consolidated interim 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 consolidated financial statements as at and for the year ended 31 March 2015.

Related party transactions

The Group, in the ordinary course of business, entered into various intercompany transactions with related parties.

Subsequent events

With the exception of the items disclosed in this report there were no material events subsequent to the reporting date.

Review of operations

Revenue for the period was R451.6 million (September 2014: R389.4 million) with profit before tax of R93.4 million
(September 2014: R79.6 million).

Headline earnings per share for the period increased by 7.2% from 3.59 cents per share to 3.85 cents per share. The
weighted average number of shares in issue for the six months ended 30 September 2015 was 1 600 060 980 (September 2014:
1 579 783 732).

Financial Services

The Financial Services segment continued to focus on broadening the client base across the various operating units as
well as broadening the services offered. The segment as a whole performed well, however certain divisions operated under
difficult trading circumstances. This has been highlighted in the relevant sections below.

Revenue for the segment was R192.8 million for the period (30 September 2014: R151.1 million) and profit before tax was
R70.1 million (30 September 2014: R55.8 million).

The core driver of earnings in the Financial Services segment continues to be Prescient Investment Management.

We were delighted to welcome Raphael Nkomo to Prescient Investment Management ("PIM") in August as our newly appointed
Chief Investment Officer, stepping into the shoes that had been so ably filled by Eldria Fraser for many years. Raphael
has only been with us for a few months but he is already taking responsibility for the investment philosophy at
Prescient and will manage the performance of the mandates, the strengthening of the investment team as well as
continuing relationship-building with our clients. We look forward to a successful future for PIM with Raphael at the
helm of investments.

We would like to take this opportunity to thank Eldria for her many years of tireless commitment to Prescient and we
wish her well in her quieter time with her family. We are sure she will stay close to Prescient and we look forward to
working with her in the future when circumstances arise. Eldria remains as a director of PIM.

The performance of all our mandates against benchmarks has been maintained and this has reflected in the growth in
assets under management ("AUM"). 

The retail team has generated significant interest in our offering and the recent months have seen strong retail flows
into Prescient's mandates. The net flows for the period amounted to R2.1 billion and this has continued the positive
momentum achieved in prior periods.

The Prescient China Balanced Fund also contributed to Group earnings during the period. The strong performance from the
prior year continued into the current year before the downturn on the China exchange during June. Although these very
strong returns will not likely be seen in the near term, it is an initiative that continues to provide opportunities for
the group with the full China team relocating to Shanghai in the next few months where they will establish a local
office to ensure closer access to the markets and to an expanded client base. Although the market has had a difficult
time over the last few months, the performance of the China Balanced Fund has been very strong relative to benchmark.

The China initiative has generated strong cash flow for the Group and this will be retained in our offshore domicile to
ensure that we are able to fund the venture into the future.

Other activities during the quarter included a conversion of the local Prescient Africa Equity Fund to a fund domiciled
in our Global Scheme in Ireland. This was a difficult transition for the team given the variable liquidity constraints
throughout the markets in which the fund is invested, but it was handled very successfully, allowing for the fund to be
exposed to a far larger market in Europe. The fund continues to be accessible to local investors through a
rand-denominated feeder fund.

Another very exciting launch for Prescient during the most recent reporting period was the seeding of the Prescient
Evolution Clean Energy and Infrastructure Debt Fund. This Fund is the culmination of the collaborative work between
Prescient and Evolution Africa Capital. The fund invests in renewable energy assets, spanning solar and wind energy
projects, and provides investors with well-secured real returns. We are excited about this initiative and expect to see
an increased demand for this mandate from an institutional base.

PIM had AUM of R67.4 billion at 30 September 2015 (September 2014: R60.4 billion).

Prescient Fund Services ("PFS") continued to grow significantly during the period. The expanded range of services has
given the division access to a much broader base of clients and this is highly relevant for the hedge fund
administration team. This team has staffed up during the period as the volumes of work will increase in the coming
months. The deadline for submissions for registered hedge funds passed during the most recent period and, once the funds
are approved, PFS will be taking on many new clients in this specialist outsourced service.

The growth hasn't only been in the hedge fund team. Additionally, several co-name clients have been added to the
Management Company over the last six months. This is in addition to the enhanced AUA that has been generated through the
take-on of third party segregated clients.

Prescient Global Execution Services has continued to grow its revenue line and its services are expanding to third party
clients where it offers trade efficiency and trade execution services. The growing third party base in PFS has provided
a good pipeline of potential clients for Global Execution Services.

Through the rollout of these additional services we have seen a considerable growth in the external revenue generated by
PFS and this will continue to diversify our earnings.

During the current period significant expenditure was incurred in improving the technology backbone of PFS. Many of
these costs are associated with the long-term technology base that PFS utilises and these costs have been capitalised to
match the useful life. The division is also exposed to foreign-denominated system costs and this is definitely a factor
to consider in an environment where the rand has depreciated so markedly.

The division has prepared for the ongoing growth through a number of appointments in the different teams and, whilst
head count growth has been quite high during the period, the margins are likely to increase as the revenue streams
strengthen through the enhanced client base.

Our Irish domiciled administration business, Prescient Fund Services (Ireland) ("PFSI"), continues to mirror the
services we offer locally. We are seeing an increase in growth of third party clients in offshore domiciles seeking
efficient, well-priced administration services. The increase in the regulatory burden in the offshore market has created
opportunities for our Irish business and the hard work put into building the operations is starting to deliver results.
PFSI continued to contribute to Group profitability.

Third party assets under administration ("AUA") were R64.1 billion at 30 September 2015 (September 2014: R52.0 billion)
whilst PFSI had assets under administration of EUR957.1 million (September 2014: EUR812.5 million).

The Prescient Life team has been kept extremely busy by many new business initiatives, as well as by the higher
regulatory and compliance demands that have been brought on by the SAM environment.

The new business is coming from a number of client types with a growing demand for the retirement product offerings,
licence rental, seamless transition, white labelling and platform services. Third party clients have access to a range
of life portfolios on the platform as well as living annuities, retirement annuities, preservation funds and endowment
product structures.

As a result Prescient Life has seen a significant growth in its policyholder assets from R8.8 billion at 30 September
2014 to R10.1 billion at 30 September 2015. The company is also well capitalised to accommodate the growth that is
expected to come through in the next financial period.

Revenue growth for the period arising from client fees has been strong, however this has been offset to a degree by weak
markets which have impacted the returns on the shareholder assets held for capital purposes.

The SAM process has been a focus of the team's attention from a regulatory point of view and the company is well placed
for the challenges that the market is facing in adapting to far more rigorous demands from the regulator.

Prescient Securities ("P-Sec") experienced a decline in revenue over the past six months putting a strain on
profitability.

Downward pressure on brokerage rates, changes in fund management brokerage models and rising JSE costs being the main
pressure points.

Notwithstanding short-term headwinds, P-Sec continues to grow its client base and is positioning itself to participate
in new forms of business, the details of which will be communicated over the coming months.

P-Sec's response has been to increase its research offering across asset classes. The business has been reorganised to
integrate and refine P-Sec's current research and execution offerings across asset classes (Equities, Derivatives and
Fixed Income). The team remains intact, and over recent months the research team has expanded to number 10. 

The company recently performed extremely well in the Spire Awards which is the benchmark awards for Agency brokers. The
results of the awards were as follows:

#1 – Best Agency Broker House – Bonds

#1 – Best Agency Broker – Listed Interest Rate Derivatives 

#2 – Best Agency Broker – Spot Bonds 

#2 – Best Agency Broker – Listed FX Derivatives 

#3 – Best Team – Inflation Bonds

Prescient Wealth has struggled to substantially increase its client base over the most recent period, although the
Corporate Advisory division has generated strong revenue through a number of deals that have been concluded during the
period.

Information Management Services

Total revenue for the six months ended 30 September 2015 amounted to R258.8 million compared to R238.3 million for the
corresponding period ending 30 September 2014. Profit before tax amounted to R23.3 million (September 2014: R23.7
million). The severe decline in the Rand from R12.15/$ to R13.88/$ since the previous reporting period, impacted profit
negatively as PBT entered into forward exchange contracts for approximately 50% of its anticipated Dollar revenue for
the current financial year. Revenue for the second half of this financial year will be positively impacted because of
the higher base value of these contracts. The strong revenue growth in Australia relating to a large scale project at
Medibank in the previous financial year was reversed in this financial period, resulting in a lacklustre performance for
this interim period. However, a solid performance is expected in the second half of the financial year.

The Information Management Services segment continues to cement its position as data specialists and as the foremost
provider of professional services in this area. Increased focus on our traditional services is continuing to result in
recurring contracts and stable revenue. Demand for these services remains very high and all indications are that this
trend will continue for an extended period of time.

Dividend

An interim dividend of 2.85 cents per share, in respect of the six months ended 30 September 2015, was declared on 30
November 2015. The Company is offering its shareholders an election of a Capitalisation Distribution instead of the Cash
Dividend. The Capitalisation Distribution will be determined by reference to the Shareholder's ordinary shareholding in
Prescient (at the close of business on the Record Date, being Friday, 5 February 2016) in relation to the ratio that
2.85 cents bears to the volume weighted average price ("VWAP") of an ordinary Prescient share traded on the JSE during
the five-day trading period ending on Friday, 27 November 2015. The details of the Capitalisation Distribution will be
included in a circular that will be distributed to Shareholders on or about 7 December 2015. 

Biannually, the directors will consider the payment of a dividend, 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.

There are 1 667 461 093 shares in issue at the dividend declaration date, of which 30 009 292 are held as treasury
shares. The total dividend amount payable is R47.5 million (30 September 2014: R45.3 million).

The Cash Dividend is a dividend as defined in the Income Tax Act, 1962, and is payable from income reserves. Dividends
are subject to a 15% Dividends Tax (DT) which is a withholding tax levied on non-exempt shareholder recipients of the
dividend. The net dividend payable to shareholders who are subject to dividend tax is 2.4225 cents per share, while it
is 2.85 cents per share to those shareholders who are exempt from Dividend Tax. Prescient's income tax reference number
is 9725/148/71/3.

The Capitalisation Distribution is not subject to DWT in terms of the Income Tax Act, but the subsequent disposal of
shares obtained as a result of the Capitalisation Issue is likely to have Income Tax or Capital Gains Tax ("CGT")
implications. Where any future disposals of shares obtained as a result of the Capitalisation Distribution falls within
the CGT regime, the base cost of such shares will be regarded as nil in terms of the Income Tax Act (or the value at
which such shares will be included in the determination of the weighted average base cost method will be zero).

In compliance with the Listings Requirements of the JSE Limited, the following dates for the Cash Dividend and
Capitalisation Distribution are applicable:

EVENT                                                                                                                                                        Date
Announcement released on the Stock Exchange News Service ("SENS") relating to the Cash Dividend and the Capitalisation Distribution      Monday, 30 November 2015
election
Circular and Form of Election posted to Shareholders                                                                                      Monday, 7 December 2015
Finalisation announcement released on SENS                                                                                                Friday, 22 January 2016
Last day to trade in order to be eligible for the Cash Dividend or, alternatively, the Capitalisation Distribution                        Friday, 29 January 2016
Ordinary shares trade "ex" the Cash Dividend/Capitalisation Distribution                                                                  Monday, 1 February 2016
Listing of maximum possible number of ordinary shares from the commencement of business                                                   Monday, 1 February 2016
Last day to elect to receive the Capitalisation Distribution instead of the Cash Dividend, Forms of Election to reach the Transfer        Friday, 5 February 2016
Secretaries by 12:00 
Record Date in respect of the Cash Dividend and the Capitalisation Distribution                                                           Friday, 5 February 2016
Share certificates posted on or about, and Cash Dividend payments made/Cash Dividend cheques posted, CSDP/broker accounts updated         Monday, 8 February 2016
Announcement relating to the results of the Cash Dividend and the Capitalisation Distribution released on SENS                            Monday, 8 February 2016
Listing of ordinary shares adjusted at the commencement of business on or about                                                       Wednesday, 10 February 2016
Share certificates may not be dematerialised or rematerialised between Monday, 1 February 2016 and Friday, 5 February
2016, both dates inclusive.

Prospects

Financial Services

The Financial Services segment continues to focus on service excellence to clients across all business units. Our
entrepreneurial culture and innovative teams will seek opportunities in areas that we believe will deliver the best
possible solutions for those clients.

In Prescient Investment Management, the team has been strengthened and we are looking to grow the institutional and
retail AUM through strong performance and ensuring we provide the correct product mix to the market. Our China Balanced
Fund has performed extremely well against its benchmark despite the market correction and the move by the team will tap
into new markets and provide a strong foundation for generating continuing performance. The retail team has also
strengthened and the work is focused on introducing the market to a wider range of our products. The alternative
investments are bolstered through the addition of the Prescient Evolution Clean Energy and Infrastructure Debt Fund and
we believe that this is a very good proposition for investment by an institutional client base that is looking for
stable real returns against inflation.

Prescient Fund Services has spent valuable time and resourcing on expanding its offering to ensure we have the most
comprehensive suite of services available in the market. We strongly believe that none of our competitors are able to
provide a service as complete as ours. The hedge fund initiative has been extremely well timed to coincide with the
regulatory changes and this will pay dividends in the next 12 to 18 months as we transition many new clients onto our
licence. The team has also worked extremely hard at diversifying the client base and we feel that much of this has been
achieved.

Prescient Life has been in demand from clients with new interest in our product offering and it is an exciting time for
the company as we have provided the market with innovative products that embrace the principles of Retirement Reform.
The lead time on signing clients on is always longer than anticipated but the AUM has started to flow and this should
translate into improved profitability. We have also ensured that we have remained extremely current with the changes
brought about by SAM and this has also provided us with a clear path for competing in this market.

Cheree Dyers has taken over as CEO of Prescient Securities, effective from 1 October 2015. Willem Venter will be
concentrating on deepening the research base whilst Daniel Polakow joined the company in May as an Executive Director
where he is co-head of research and responsible for the investment strategy. 

Through a range of new initiatives, Prescient Securities is aiming to become a noteworthy contributor to the South
African financial services industry. P-Sec's Excel™ financial toolkit for practitioners (P-Sec GEARS) is expanding and
is poised to become the South African industry standard, now encompassing a suite of proprietary research tools. The
research team is additionally bolstered by an experienced and highly rated execution team. Prescient Securities is
therefore well positioned to continue to deliver a mature value-add and novel offering to our clients in the face of a
changing stock broking industry.

Information Management Services 

Traditional services continue to form the basis of stable revenue and earnings and this focus will continue into the
future, however, new services, as an extension of our current successful service offering, have been launched with
satisfying results, paving the way for additional revenue streams over the next two years. Furthermore, PBT is exploring
an opportunity to expand its services to the United Kingdom and entered into a small scale agreement with a UK services
company, specialising in IBM software. Favourable profit margins on this venture are expected as a large portion of the
cost will be ZAR based. 

Changes to the Board of Directors

There were no changes to the Board of Directors during the period under review.

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.

Company information

Directors:           AM Louw (Chairman), H Steyn (CEO), M Buckham (Financial Director), Z Meyer (Lead Independent Non-executive), H Sonn (Independent
                     non-executive), K Moloko (Independent non-executive), R van Rooyen (Non-executive)

Registered office:   Prescient House, Westlake Business Park, Otto Close, Westlake, 7945, South Africa

Postal address:      PO Box 31142, Tokai, 7966

Registration         1936/008278/06
number:

Auditors             KPMG Inc.

Sponsor              Bridge Capital Advisors Proprietary Limited
Transfer             Link Market Services
secretaries:

JSE share code:      PCT
ISIN:                ZAE000163531
Website:             www.prescient.co.za
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