Wrap Text
Reviewed preliminary condensed consolidated results for the year ended 31 December 2015 and changes to the board
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")
Reviewed preliminary condensed consolidated financial results for the year
ended 31 December 2015 and changes to the board of directors
SIGNIFICANT EVENTS
- Strong dividend income from investments
- Old Mutual and Nedbank transactions matured and successfully realised
- Resilient NAV despite volatile market conditions
- Operating losses at subsidiary Lion of Africa Insurance Company
- Final dividend - 35 cents
COMMENTARY
The Company reported a loss for the year under review of R668.1 million
compared to a profit of R277.8 million in the prior year. 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.
Total assets decreased to R7.7 billion from R7.9 billion at 31 December 2014.
Intrinsic Net Asset Value decreased to R4.2 billion from R4.9 billion at
31 December 2014.
Brimstone Portfolio
SUBSIDIARIES
Sea Harvest (58.44%)
Sea Harvest delivered a solid financial performance for the year with
operating profit before interest increasing by 10% to R121.6 million, and
EBITDA up 9% to R205 million. Revenue was 1% higher than prior year despite
a 5% reduction in catch volumes. Fishing conditions were very challenging
especially in the second half of the year. Prices for hake remained strong,
in addition to a 10% volume growth in the export market where demand was
high. Sea Harvest continued with its capital investment programme by
converting an existing trawler to a freezer trawler as well as upgrading its
fresh fish plant. In the last two years over R200 million has been invested
in vessels and plant upgrades. In December 2015, Sea Harvest acquired a
19.9% stake in Mareterram Limited, a vertically integrated agri-business
which listed on the ASX in Australia thereby securing its route to this
critical market and providing a platform for future international growth.
Lion of Africa Holdings (100%)
Lion of Africa's poor performance continued during the year under review,
reporting a loss from operations of R179 million (2014: loss of R180
million). This loss is directly attributable to the following factors:
- A significant decrease in premium income due to:
- the credit rating downgrade adversely affecting the amount of corporate
business written;
- the discontinuation of personal lines business; and
- the introduction of stricter underwriting parameters which have been
introduced to reduce claims going forward.
- Large claims and one-off charges incurred.
A new management team has been put in place. In addition to the remedial
action already commenced during the year, management has developed a focused
strategy to return the company to profitability over the next few years.
Brimstone introduced R200 million in capital during the year under review in
order to maintain statutory solvency while the turnaround strategy is taking
effect. The investment is carried at R40 million (2014: R20 million) in the
books of Brimstone.
House of Monatic (100%)
Revenue increased by 17% to R214 million while net profit increased to R6.4
million. Most of this increase is attributable to the growth of the
corporate and retail business.
Another three retail stores were opened during the year with two more
planned in 2016. R6 million of new plant and machinery was acquired during
the year funded by way of the DTI capital subsidy to improve productivity
and quality. Employment levels remained stable throughout the year.
ASSOCIATES AND JOINT VENTURES
Oceana (16.90%)
Brimstone subscribed for an additional 2.8 million shares in a rights offer
for R211 million at R75 per share. During the year Oceana acquired
Louisiana-based Daybrook Fisheries for $450 million further diversifying its
business portfolio. Oceana's share price closed at R117.00 per share, up
from R104.86 per share at 31 December 2014. Brimstone received dividends of
R80.6 million from Oceana during the year under review and recorded
R35.1 million in equity accounted earnings.
Aon Re Africa (18%)
Aon Re Africa successfully secured new business across all divisions with
impressive organic growth specifically in Africa. Brimstone received
dividends of R12.9 million (2014: R4.5 million) from Aon Re Africa and
recorded R0.4 million in equity accounted losses during the year under
review.
Afena Capital (28.79%)
Brimstone recorded R0.4 million in equity accounted earnings from Afena
Capital. Following the reduction in assets under management, Brimstone has
impaired its investment in Afena Capital by R12 million to R9.7 million.
The Scientific Group/Obsidian Health (25.07%)
During the period under review Brimstone disposed of its investment in The
Scientific Group realising a profit on disposal of R44.8 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 (6.62%)
During the year Brimstone increased its shareholding in the Grindrod
Consortium SPV, which holds 64 million shares, from 59.2% to 72.4%. Due to
the shared control in the structure, Brimstone, in its consolidated
financial results, accounts for its share of the results in the Consortium
SPV as a joint venture. Brimstone also acquired 4.2 million Grindrod shares
directly. Grindrod's share price closed at R11.29 at year end.
INVESTMENTS
Equites (10%)
During the year Brimstone subscribed for 28 million shares in Equites
Property Fund Limited at R12.50 per share at a total cost of R350 million,
representing a 10.0% shareholding. Equites is a specialist logistics
property developer and landlord which is listed on the JSE as a REIT.
Life Healthcare (5.01%)
Life Healthcare's share price closed at R35.07 per share, down from
R42.76 per share at 31 December 2014. The investment was revalued downwards
by R403.8 million. Brimstone received dividends amounting to R80.9 million
during the year. Brimstone remains one of the largest shareholders in Life
Healthcare which will continue to focus on its growth objectives in India
and Poland.
MTN Zakhele (2.71%)
The share price of MTN Zakhele is affected by the share price performance of
MTN Group as well as the dividends paid by MTN Group as MTN Zakhele uses the
dividends received to reduce its funding obligations.
At year end Brimstone held 2.2 million MTN Zakhele shares, which closed at
R73.90 per share, down from R108.50 at 31 December 2014. The investment was
revalued downwards by R75.7 million.
Nedbank
Following the maturity of the Nedbank transaction Brimstone held 2.3 million
Nedbank shares. Brimstone sold all of these shares realising R568.5 million.
Old Mutual (0.08%)
The Old Mutual transaction matured on 1 May 2015. After settlement of debt
in terms of the contract, Brimstone held 7.4 million Old Mutual plc shares.
Brimstone sold 3.4 million of these shares, realising R131.4 million. The
remaining 4 million shares were valued at the closing market price of
R41.45 per share and are carried in the books at R165.8 million at
31 December 2015.
Subsequent to the year end, Brimstone sold the remaining 4 million shares,
realising R148.3 million.
Phuthuma Nathi (7.02%)
Full-year consolidated revenues and core headline earnings grew by 15% and
12% respectively for the year ended March 2015.
Brimstone acquired a further 1.96 million Phuthuma Nathi shares in 2015 at
an average price of R161.55 per share and received dividends of
R65.0 million from Phuthuma Nathi. At year end Brimstone held 3 million
Phuthuma Nathi 1 shares and 1.7 million Phuthuma Nathi 2 shares, which
closed at R165 and R163 per share respectively. The investment was revalued
upwards by R96 million.
Rex Trueform and African & Overseas Enterprises (Queenspark) (22%)
The market price of all classes of Rex Trueform and African & Overseas
Enterprises shares decreased during the year under review resulting in a
downward revaluation of R5.1 million.
Taste Holdings (15.22%)
During 2015 Taste Holdings concluded an exclusive development agreement to
roll out Starbucks Coffee outlets in South Africa. For the first time in
sub-Saharan Africa, Starbucks Coffee will open full-format stores bringing
the entire range of its food and beverages, including its ethically sourced
Arabica coffee, to South African consumers.
Taste Holdings raised R226 million through a rights issue to partly fund the
Starbucks Coffee development and to pursue other opportunities. Brimstone
acquired a further 19.7 million Taste Holdings shares during 2015 at an
average price of R3.02 per share. The share price closed at R2.95, down from
R3.20 per share at 31 December 2014.
Tiger Brands (0.94%)
Brimstone's rights to Tiger Brands shares, accounted for as options, have
been revalued at year end. The independently calculated option valuation was
based on a closing share price of R316.44 per share, down from R368.06 per
share at 31 December 2014. The investment was revalued downwards by
R91.7 million. These rights mature on 31 December 2017.
HEADLINE (LOSS)/EARNINGS PER SHARE
Reviewed Audited
Year ended Year ended
31 December 31 December
2015 2014
Headline (loss)/earnings per share (cents)
Basic (295.3) 116.9
Diluted (295.3) 99.8
Headline (loss)/earnings calculation
Net (loss)/profit attributable to equity
holders of the parent (698 978) 259 050
(Profit)/loss on disposal of property,
plant, equipment and vehicles (2 119) 334
Realised profit on disposal of associate (44 841) -
Impairment of investment in associate 11 994 28 286
Adjustments relating to results of associates 65 (1 937)
Total tax effects of adjustments 9 338 505
Headline (loss)/earnings (724 541) 286 238
Weighted average number of shares on which
(loss)/earnings and headline (loss)/earnings
per share is based (000's) 245 392 244 919
Weighted average number of shares on which diluted
(loss)/earnings and diluted headline
(loss)/earnings per share is based (000's) 245 392 286 703
INTRINSIC NET ASSET VALUE (INAV)
INAV at 31 December 2015 calculated on a line-by-line basis, totalled R4.23
billion, or R17.41 per share (31 December 2014: R4.86 billion or R19.79 per
share), representing a decrease of 13% from 2014 (a decrease of 12.0% on a
per share basis). On a fully diluted basis INAV per share is R16.48
representing a decrease of 11.3% on the R18.58 reported at 31 December 2014.
As at 31 December 2015, Brimstone Ordinary shares were trading at a discount
of 22.5% to INAV (31 December 2014: 14.1%). Brimstone "N" Ordinary shares
traded at a discount of 27.1% to Brimstone's INAV (31 December 2014: 16.6%).
The breakdown of INAV is available on the Company's website at
www.brimstone.co.za.
SHARE REPURCHASES
Specific 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.
Acquisition of treasury shares
During November and December 2015, Brimstone acquired, via a wholly-owned
subsidiary, 3.95 million Brimstone Ordinary shares and 0.05 million
Brimstone "N" Ordinary shares in the open market for an aggregate
consideration of R52.3 million at an average price of R13.06 per share
including costs. These shares have been accounted for as treasury shares.
SUBSEQUENT EVENTS
There are no significant subsequent events affecting these results.
DIVIDEND DECLARED
Brimstone's board has declared a final dividend of 35 cents per share for
the year ended 31 December 2015 (2014: 30 cents per share) payable on Monday,
25 April 2016. The final dividend has been declared out of income reserves.
In compliance with the requirements of Strate, the Company has determined
the following salient dates for the payment of the final dividend:
Last day to trade cum dividend Friday, 15 April 2016
Shares commence trading ex dividend Monday, 18 April 2016
Record date Friday, 22 April 2016
Payment date Monday, 25 April 2016
Shares may not be rematerialised or dematerialised from Monday, 18 April
2016 to Friday, 22 April 2016, both days inclusive.
The final dividend is subject to a local Dividends Tax at 15%. The net local
dividend amount is 29.75 cents per share for shareholders liable to pay
Dividends Tax and 35 cents per share for shareholders exempt from paying
Dividends Tax.
The number of Brimstone Ordinary and "N" Ordinary shares eligible for the
final dividend at the date of this declaration is 42 757 604 and 204 963 200
respectively (this excludes 39 140 000 "N" Ordinary shares held by The
Brimstone Black Executives Investment Trust, The Brimstone General Staff
Investment Trust and The Brimstone Broad-Based BEE Trust which are not
eligible to receive dividends) and the Company's tax reference number is
9397002719.
PROSPECTS
The Group has a 20 year track record of creating and unlocking shareholder
value in a sustainable way and has the team with the skills and experience
to conclude value adding deals. The Group is defined by bona fide
empowerment credentials, and its ability to enhance NAV and pay dividends.
Brimstone has over the years demonstrated its resilience to withstand tough
economic conditions and remains well capitalised to pursue value enhancing
transactions based on cash generative quality assets. The Group maintains a
long-term view and partnership approach to its underlying investments.
CHANGES TO THE BOARD OF DIRECTORS
Shareholders are advised of the following changes to the Board of Directors
of Brimstone
Mr Lawrie Brozin, currently Financial Director of Brimstone will not be
standing for re-election at the Company's upcoming Annual General Meeting on
9 May 2016 and will retire as Financial Director on that day. Lawrie joined
the Company in 1996 and has played a valuable role in the growth of
Brimstone. The Board of Directors wish to thank Lawrie for his unwavering
commitment and dedication to the Company and wish him well for the future.
The following new appointments will be made, effective 9 May 2016
Mr Geoffrey Fortuin (BCom (Acc) Cum Laude BCom (Acc)(Hons) CA(SA)) will be
appointed as Financial Director. Geoff was previously a partner of Deloitte
& Touche for 15 years during which time he was responsible for a number of
South African listed companies, including the audit of Brimstone up to
31 December 2012. He was also a member of the Deloitte South Africa Board.
Geoff is a non-executive director of Quantum Foods Holdings Limited a
company listed on the JSE and is currently the Managing Executive (Finance)
of Brimstone.
Mr Iqbal Khan (BCompt(Hons) CA(SA)) will be appointed as Chief Operating
Officer and Executive Director. Iqbal qualified as a chartered accountant in
1992 and worked at SAA for five years before re-joining the audit profession.
He was a partner at EY for 11 years. He has worked at Brimstone in various
roles over 7 years which was interrupted by a two year period as Chief
Operating Officer of Old Mutual Investment Group. He serves on a number of
Brimstone group company boards and is an independent non-executive director
of Cricket South Africa.
Brimstone wishes Geoffrey Fortuin and Iqbal Khan well in their new roles at
the Company.
On behalf of the board
F Robertson MA Brey
Executive Chairman Chief Executive Officer
29 February 2016
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 Corporate and Investment Banking, 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 INCOME STATEMENT
Reviewed Audited
Year ended Year ended
31 December 31 December
R'000 2015 2014
Revenue 2 208 137 2 221 054
Sales and fee income 1 899 954 1 968 233
Dividends received 308 183 252 821
Operating expenses (2 022 394) (2 119 196)
Operating profit 185 743 101 858
Fair value (losses)/gains (429 562) 463 967
Exceptional items 32 846 (28 286)
Share of losses of associates and joint ventures (341 545) (65 431)
(Loss)/profit before net finance costs (552 518) 472 108
Income from investments 30 991 23 028
Finance costs (224 237) (188 182)
Outside unit holders' interest - (449)
Net (loss)/profit before taxation (745 764) 306 505
Taxation 77 625 (28 712)
(Loss)/profit for the year (668 139) 277 793
(Loss)/profit attributable to:
Equity holders of the parent (698 978) 259 050
Non-controlling interests 30 839 18 743
(668 139) 277 793
(Loss)/earnings per share (cents)
Basic (284.8) 105.8
Diluted (284.8) 90.4
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Reviewed Audited
Year ended Year ended
31 December 31 December
R'000 2015 2014
(Loss)/profit for the year (668 139) 277 793
Other comprehensive income, net of tax 188 17 991
Items that may be reclassified subsequently
to profit or loss
Cash flow hedges
(Loss)/profit arising during the year (98 115) 33 878
Share of non-distributable reserve of associates 89 171 -
Net value loss on available-for-sale financial asset - (15 887)
Items that will not be reclassified subsequently
to profit or loss
Share of non-distributable reserve of associates 9 132 -
Total comprehensive (loss)/income for the year (667 951) 295 784
Total comprehensive (loss)/income attributable to:
Equity holders of the parent (657 955) 269 739
Non-controlling interests (9 996) 26 045
(667 951) 295 784
CONDENSED STATEMENT OF FINANCIAL POSITION
Reviewed Audited
Year ended Year ended
31 December 31 December
R'000 2015 2014
ASSETS
Non-current assets 5 996 570 5 407 395
Property, plant, equipment and vehicles 499 942 410 827
Goodwill 12 140 12 140
Intangible assets 92 455 114 400
Investments in associate companies and
joint ventures 1 114 419 1 067 131
Investments 4 044 276 3 636 528
Deferred taxation 25 489 -
Insurance assets 204 057 166 369
Other financial assets 3 792 -
Current assets 1 656 025 2 525 671
Inventories 258 831 265 616
Trade and other receivables 604 366 633 801
Insurance assets 532 498 561 516
Other financial assets 2 456 -
Taxation 8 500 14 222
Investments - 828 897
Cash and cash equivalents 249 374 221 619
TOTAL ASSETS 7 652 595 7 933 066
EQUITY AND LIABILITIES
Capital and reserves 2 626 972 3 434 405
Share capital 41 45
Capital reserves 427 049 342 032
Revaluation reserves 14 143 14 143
Cash flow hedging reserve (42 414) 14 922
Changes in ownership (11 839) (11 839)
Retained earnings 2 143 330 2 965 681
Attributable to equity holders of the parent 2 530 310 3 324 984
Non-controlling interests 96 662 109 421
Non-current liabilities 3 387 466 2 930 119
Long-term interest bearing borrowings 2 624 018 2 040 451
Long-term provisions 25 427 23 103
Other financial liabilities - 3 490
Insurance liabilities 270 525 223 695
Deferred taxation 467 496 639 380
Current liabilities 1 638 157 1 568 542
Short-term interest bearing borrowings 174 003 130 700
Bank overdrafts 21 644 14 815
Trade payables 508 884 548 646
Other payables 226 484 106 251
Insurance liabilities 685 787 732 794
Outside unit holders' interest - 16 145
Other financial liabilities - 220
Short-term provisions 19 180 18 172
Taxation 2 175 799
TOTAL EQUITY AND LIABILITIES 7 652 595 7 933 066
NAV per share (cents) 1 044.0 1 356.3
Shares in issue at end of year (000's) 242 371 245 151
CONDENSED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 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 (loss)/income - - (9 080)
Total comprehensive (loss)/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 profit for the year
ended 31 December 2015 - - -
Other comprehensive income/(loss) - 98 359 -
Total comprehensive income/(loss) - 98 359 -
Recognition of share-based payments - 11 615 -
Dividend paid - - -
Subsidiary's accrual for preference
dividends - - -
Non-controlling interest arising on
recognition of subsidiary - - -
Acquisition of non-controlling
interest in subsidiary - - -
Issue of share capital - 11 526 -
Sale of trust units - - -
Treasury shares acquired (4) (51 958) -
Share of non-distributable
reserves of associates transferred
directly to equity - 15 475 -
Balance at 31 December 2015
- reviewed 41 427 049 14 143
CONDENSED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2015 (CONTINUED)
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 (loss)/income 19 769 - -
Total comprehensive (loss)/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 profit for the year
ended 31 December 2015 - - (698 978)
Other comprehensive income/(loss) (57 336) - -
Total comprehensive income/(loss) (57 336) - (698 978)
Recognition of share-based payments - - -
Dividend paid - - (123 373)
Subsidiary's accrual for preference
dividends - - -
Non-controlling interest arising on
recognition of subsidiary - - -
Acquisition of non-controlling
interest in subsidiary - - -
Issue of share capital - - -
Sale of trust units - - -
Treasury shares acquired - - -
Share of non-distributable
reserves of associates transferred
directly to equity - - -
Balance at 31 December 2015
- reviewed (42 414) (11 839) 2 143 330
CONDENSED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2015 (CONTINUED)
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 (loss)/income 10 689 7 302 17 991
Total comprehensive (loss)/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 profit for the year
ended 31 December 2015 (698 978) 30 839 (668 139)
Other comprehensive income/(loss) 41 023 (40 835) 188
Total comprehensive income/(loss) (657 955) (9 996) (667 951)
Recognition of share-based payments 11 615 - 11 615
Dividend paid (123 373) (27 767) (151 140)
Subsidiary's accrual for preference
dividends - 7 983 7 983
Non-controlling interest arising on
recognition of subsidiary - 123 078 123 078
Acquisition of non-controlling
interest in subsidiary - (108 343) (108 343)
Issue of share capital 11 526 1 748 13 274
Sale of trust units - 538 538
Treasury shares acquired (51 962) - (51 962)
Share of non-distributable
reserves of associates transferred
directly to equity 15 475 - 15 475
Balance at 31 December 2015
- reviewed 2 530 310 96 662 2 626 972
CONDENSED STATEMENT OF CASH FLOWS
Reviewed Audited
Year ended Year ended
31 December 31 December
R'000 2015 2014
Operating activities
Net attributable (loss)/profit (668 139) 277 793
Adjustments for:
Share of losses/(profits) of associates
and joint ventures 231 397 (21 498)
Income from investments (229 026) (188 920)
Decrease/(increase) in fair value of investments 429 562 (463 967)
Impairment of investment in associate 11 994 28 286
Amortisation of intangible assets 23 396 22 355
Finance costs 214 279 188 182
Taxation (77 625) 28 712
Depreciation of property, plant,
equipment and vehicles 80 741 71 325
Share-based payment expense 11 615 10 570
Realised profit on disposal of associate (44 841) -
Increase in long and short-term provisions 3 332 2 072
(Profit)/loss on disposal of property,
plant, equipment and vehicles (4 464) 547
Operating cash flows before movements in
working capital (17 779) (44 543)
Decrease/(increase) in inventories 6 785 (14 968)
(Increase)/decrease in trade and other receivables (6 031) 30 983
Outside unit holders' interest (16 145) (2 703)
Decrease in trade and other payables (20 334) (13 192)
Net increase in insurance assets (8 670) (60 326)
Net (decrease)/increase in insurance liabilities (177) 152 923
Cash (used in)/generated from operations (62 351) 48 174
Interest received 30 991 23 028
Dividends received from associates and joint ventures 110 148 86 929
Dividends received from other equity investments 198 035 165 892
Income taxes paid (77 979) (17 184)
Finance costs (173 877) (143 509)
Net cash from operating activities 24 967 163 330
Investing activities
Loan repayments and recoveries from
associate and investments 21 756 3 253
Proceeds on disposal of investments 955 628 48 701
Proceeds on disposal of property,
plant, equipment and vehicles 7 080 542
Acquisition of property, plant,
equipment and vehicles (172 472) (204 893)
Acquisition of intangible assets (1 451) (1 156)
Acquisition of investments (1 209 785) (754 591)
Net cash used in investing activities (399 244) (908 144)
Financing activities
Dividends paid by company and subsidiaries (151 140) (130 892)
Repayments of borrowings (689 879) (342 716)
Loans raised 1 274 372 1 275 813
Shares repurchased (51 962) -
Proceeds on issue of trust units/shares 13 812 4 597
Shares repurchased by subsidiary - (6)
Redemption of non-controlling shareholder's
preference shares - (24 579)
Share of distribution made by subsidiary - (42 115)
Units/shares repurchased by subsidiaries - (93)
Increase/(decrease) in bank overdrafts 6 829 (34 789)
Net cash generated from financing activities 402 032 705 220
Net increase/(decrease) in cash and cash equivalents 27 755 (39 594)
Cash and cash equivalents at beginning of year 221 619 261 213
Cash and cash equivalents at end of year
Bank balances and cash 249 374 221 619
FURTHER INFORMATION
1. Auditor's review report
The preliminary condensed consolidated financial statements for the year
ended 31 December 2015 have been reviewed by the Company's auditors,
Deloitte & Touche. The review was conducted in accordance with ISRE
2410 Review of Interim Financial Information performed by the
Independent Auditor of the Entity. The auditor's unmodified review
conclusion does not necessarily cover all the information in this
announcement. Shareholders are therefore advised that in order to obtain
a full understanding of the nature of the auditor's work they should
obtain a copy of the review conclusion together with the accompanying
financial information from the registered office of the Company. Any
reference to future financial performance and Intrinsic Net Asset Value
included in this announcement has not been reviewed or reported on by
the Company's auditors.
2. Basis of preparation
The preliminary condensed consolidated financial statements have been
prepared in accordance with the requirements of the JSE Limited Listings
Requirements for preliminary reports and the requirements of the
Companies Act of South Africa. The Listings Requirements require
preliminary reports to be prepared in accordance with the framework
concepts and the measurement and recognition requirements of
International Financial Reporting Standards (IFRS) and the SAICA
Financial Reporting Guides as issued by the Accounting Practices
Committee and the Financial Pronouncements as issued by the Financial
Reporting Standards Council and to also, as a minimum, contain
the information required by IAS 34 Interim Financial Reporting. The
accounting policies applied in the preparation of the preliminary
condensed consolidated financial statements are in terms of IFRS and are
consistent with those applied in the previous consolidated annual
financial statements.
The preliminary condensed consolidated financial statements were
prepared under the supervision of the group financial director,
Lawrie Zev Brozin, B.Com B.Acc CA(SA).
3. Significant accounting policies
These preliminary condensed reviewed consolidated financial statements
for the year ended 31 December 2015 have been prepared on the historical
cost basis, except for the revaluation of certain financial instruments.
The accounting policies and methods of computation applied in the
presentation of the financial results are consistent with those applied
for the year ended 31 December 2014.
Reviewed Audited
Year ended Year ended
31 December 31 December
R'000 2015 2014
4. Income from investments
Interest received on bank deposits and
loans to associates 30 991 23 028
Finance costs
Interest on borrowings 36 059 40 264
Interest rate swap - 10 355
Preference dividends 188 038 137 540
Interest on obligations under instalment
sale agreements 140 23
224 237 188 182
5. Taxation
Current normal and deferred tax (credit)/expense (81 286) 26 858
Dividends tax 417 652
Securities transfer tax 3 244 1 202
(77 625) 28 712
6. Capital commitments
Commitments for the acquisition of property,
plant, equipment and vehicles:
Contracted for but not provided in the
financial statements 9 989 10 361
Authorised by directors but not contracted 18 716 3 651
28 705 14 012
7. Segmental information
Information reported to the Group'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 Group'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 Group's property portfolio.
Segment revenues and results
Segment revenue
Fishing 1 373 457 1 361 498
Insurance 310 303 417 569
Clothing 214 778 183 824
Investments 309 599 258 163
Total revenue 2 208 137 2 221 054
Segment profit/(loss) from operations
Fishing 121 653 109 251
Insurance (178 676) (179 718)
Clothing 10 707 7 202
Investment management 232 059 165 123
Total profit from operations 185 743 101 858
Fair value (losses)/gains (429 562) 463 967
Exceptional items 32 846 (28 286)
Share of losses of associates and joint ventures (341 545) (65 431)
Income from investments 30 991 23 028
Finance costs (224 237) (188 182)
Outside unit holders' interest - (449)
(Loss)/profit before taxation (745 764) 306 505
R'000
Segment assets
and liabilities Reviewed Audited
31 December 2015 31 December 2014
Segment assets Gross Net Gross Net
Fishing 1 117 341 1 117 341 1 040 101 1 040 101
Insurance 1 300 444 1 300 444 1 321 780 1 321 780
Clothing 193 775 193 775 171 257 171 257
2 611 560 2 611 560 2 533 138 2 533 138
Investments 5 854 165 5 041 035 5 839 788 5 399 928
Intergroup balances 813 130 - 439 860 -
Other 5 041 035 5 041 035 5 399 928 5 399 928
Total segment
assets 8 465 725 7 652 595 8 372 926 7 933 066
Segment liabilities
Fishing 1 064 334 838 091 944 377 735 697
Insurance 1 525 085 1 260 151 1 391 777 1 301 843
Clothing 148 628 76 317 132 509 61 260
2 738 047 2 174 559 2 468 663 2 098 800
Investments 2 287 576 2 287 576 2 029 998 2 029 988
Total segment
liabilities 5 025 623 4 462 135 4 498 661 4 128 788
Reviewed Audited
Year ended Year ended
31 December 31 December
R'000 2015 2014
Other segmental information
Depreciation and amortisation
Fishing 89 761 80 735
Insurance 3 089 8 240
Clothing 4 640 4 023
Investments 721 682
Total segment depreciation and amortisation 98 211 93 680
Additions to non-current assets
Fishing 152 488 196 036
Insurance 3 160 2 750
Clothing 10 140 6 408
Investments 8 136 856
Total segment additions to non-current assets 173 924 206 050
8. Fair value measurements
This note provides information about how the Group determines fair
values of various financial assets and financial liabilities.
Fair value of the Group's financial assets and financial liabilities
that are measured on a fair value basis on a recurring basis.
Some of the Group'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.
R'000
2015 Level 1 Level 2 Level 3 Total
Financial assets
at FVTPL*
Derivative financial
assets - 256 231 - 256 231
Listed shares 2 752 591 - - 2 752 591
Unlisted shares
and loan 940 466 - 5(1) 940 471
Other investments 73 748 - - 73 748
Available-for-sale
financial assets
Unlisted shares - - 25 265(2) 25 265
Unlisted shares - - 2 218(1) 2 218
Total 3 766 805 256 231 27 488 4 050 524
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
*FVTPL: Fair value through profit or loss
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).
Notes
1. At cost or historical valuation.
2. Discounted cash flow method using a discount rate of 15% over 10
years.
Reviewed Audited
Year ended Year ended
31 December 31 December
R'000 2015 2014
Reconciliation of level 3 fair value measurements
Unlisted shares and loan
Opening balance 27 488 46 959
Total gains or losses
- in other comprehensive income - (19 535)
Advances - 64
Closing balance 27 488 27 488
9. Share capital
In issue (number)
Ordinary shares 42 757 604 43 145 435
Held as treasury shares (3 953 087) (385 611)
38 804 517 42 759 824
"N" Ordinary shares 244 103 200 245 866 581
Held as treasury shares (40 536 751) (43 475 230)
203 566 449 202 391 351
Total net of treasury shares 242 370 966 245 151 175
Weighted average number of shares on which earnings and headline
earnings per share is based is 245 392 252 (2014: 244 904 211)
Weighted average number of shares on which diluted earnings and diluted
headline earnings per share is based is 245 392 252 (2014: 286 885 361)
Reconciliation of weighted average number of shares between basic and
diluted earnings per share and headline earnings and diluted headline
earnings per share.
Basic 245 392 252 244 904 211
Dilutive share options - 41 981 150
Diluted 245 392 252 286 885 361
Share options and unvested forfeitable shares
treated as anti-dilutive 41 748 046
(2014: 499 068)
Closing share price (cents)
Ordinary shares 1 350 1 700
"N" Ordinary shares 1 270 1 650
10. Acquisition of subsidiary during the year
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: 29/02/2016 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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