Wrap Text
Unaudited Consolidated Interim Results for the Six Months Ended 31 December 2015
COGNITION HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1997/010640/06)
Share code: CGN ISIN: ZAE000197042
(“Cognition” or “the Group” or “the Company”)
UNAUDITED CONSOLIDATED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2015
COMMENTARY
The board of directors of Cognition (“the board”) present the
unaudited condensed consolidated interim financial results for the
six months ended 31 December 2015 (“the interim period”), which
should be read in conjunction with the audited annual financial
statements for the year ended 30 June 2015.
The unaudited condensed consolidated interim financial statements
are available to be viewed on the Company’s website:
www.cgn.co.za.
The Group’s revenue for the interim period compared to the
corresponding period increased by 63% from R50.4 million to
R82.0 million. This is primarily due to the acquisition of the
remaining BMi Research Proprietary Limited (“BMi Research”) shares
and subsequent consolidation of their financial results into the
Group’s results. However, only five months of BMi Research’s
results were included.
In terms of our core business, faxing solutions, which is part of
Active Data Exchange Services, and has been in existence for over
19 years, now constitutes 33% of the Group’s revenue as per the
six month period under review and 48% of the Group’s historical
business which excludes revenue from acquisitions. Currently
faxing solutions only comprises 22% of total revenue. Active Data
Exchange Services, excluding faxing solutions, is well poised for
good growth.
The decrease in earnings for the period under review is primarily
due to a further decline in faxing volumes. Whilst the number of
fax subscribers remained constant, the average rate per user
(ARPU) for Fax2Email declined. Our statistics indicate that the
number of pages being transmitted has reduced. Although this trend
was anticipated, giving rise to the development of the Group’s new
products and services, the decline was greater than the increased
revenue from new services being introduced to the market. For the
same six months under review, Email2Fax grew by 15%, albeit off a
lower base.
Profit before tax decreased by 32.2% from R17.7 million to
R12.0 million and profit after tax for the period decreased by
31.3% from R12.8 million in the previous corresponding period to
R8.8 million in this reporting period.
Earnings before Interest, Tax, Depreciation and Amortisation (“EBITDA”)
decreased by 27.3% to R12 million, down from R16.5 million.
During the period under review, the Group used its cash resources
to:
• acquire the remaining shares in BMi Research;
• pay out R17 million in dividends; and
• increase its working capital to fund the additional revenue of
the Group.
The net result is that cash resources reduced by 32.3% from
R100 million to R67.7 million compared to the corresponding
period.
The net asset value per share of the Group remained steady at
98.99 cents (2014: 98.50 cents).
Active Data Exchange Services
Active Data Exchange Services incorporates MediaWorx and Faxing
Solutions. MediaWorx provides clients with the technology and
strategic input to interact with customers of their brands by
using single or multiple bearer services developed and hosted on
the Group’s proprietary technical platform.
OPERATIONAL OVERVIEW
These bearer services include: SMS, USSD, Instant Messaging and
MMS, to mention a few. In line with this strategy, the Group has,
during the period under review:
• renewed the majority of contracts with existing clients;
• signed up a number of new clients;
• extended its service offering to existing clients with
additional offerings;
• increased its sales and back-office support from 8 to 11 staff;
and
• launched new services under its newly formed incentive
and loyalty division.
MEDIAWORX HAS THREE CORE DIVISIONS
Media Infotainment (“MI”)
MI focusses on providing media and production houses with the
know-how and technology platform for consumer interaction
incorporating voting services, competitions and comment lines.
These services are provided to well-known television and game show
brands such as: Idols, Big Brother, X-Factor, Strictly Come
Dancing, Noot vir Noot and similar shows.
These services are offered in South Africa and throughout Africa
in over 39 countries. MediaWorx Africa remains one of the most
successful companies to offer services of this nature into Africa.
We anticipate exceptionally good growth into Africa for the 2016
calendar year.
Retail Promotions (“RP”)
Whilst the primary purpose of RP is to assist clients in promoting
brands via competitions, its secondary objective is to accumulate
demographic, psychographic and geospatial data about customers
using the brands. This data is then used for community building
and panels and is the precursor to broader knowledge management.
We have made positive strides in unlocking the potential to build
communities for our clients and believe this is a great foundation
for our Knowledge Creation & Management division. A sample of
clients involved in RP include: Huletts, Caxton, Unilever,
Kellogg’s, Imana, Pep, Spier, Bokomo, SAB and Robertsons.
Data Investment (“DI”)
DI strategically adopts Call-2-Action campaigns to collect
demographic, psychographic and ethnographic data, using technology
such as USSD, SMS, panels and surveys. DI is a strategic and
operational tool for Knowledge Creation & Management. DI offers
great potential for the Group as its strategy and execution
enables clients to easily migrate to Knowledge 350 in developing
a granular database of customers for personalised marketing and
data monetisation.
A sample of clients in DI include: Nine brands of SAB, Pep, Flash,
DStv, Ackermans and Samsung.
Faxing Services
An overview of faxing has been provided in the introduction to the
operational overview. Whilst we have seen the decline in Fax2Email
and a growth in Email2Fax, we do believe that a market does exist
for secure document exchange without the incorporation of fax as a
receipt of delivery platform. There are a number of industries
like: medical, insurance and legal that require authentication,
audit trails and security to comply with regulation, legislation
or defined industry protocols. To this end we are currently
investigating this opportunity and have deployed research to
obtain market feedback. Our existing client base of over 300 000
Fax2Email subscribers could be a sound base for the launch of
Secure Document Exchange.
Knowledge Creation & Management
The Group’s strategy of extending its service offering to existing
Active Data Exchange Services clients into community and then into
its Knowledge 350 (“K350”) solution has gained momentum and the
response has been positive. The market for the Knowledge Economy,
including data analytics and insights, is huge and provides great
opportunities for the Group. The Group has successfully started a
number of community builds and K350 initiatives.
In order to provide focus and specialised services under the
banner of Knowledge Management & Creation, it has been decided to
create three distinct channels to market:
• K350;
• Incentive & Loyalty Programmes; and
• Vendor Relationship Management (“VRM”).
The first two channels effectively focus on “data pull
strategies”, which entails using various touchpoints or data
sources to collect, store and visualise demographic, psychographic
and ethnographic data (personal data) of consumers.
The last channel (VRM) embraces “data push strategies”, enabling
consumers to share personal data with businesses of their choice
in exchange for value.
K350
Knowledge granularity in the context of K350 represents
structured data with the ability of interpretation and
monetisation. When data is turned into knowledge, clients are
better positioned to respond and innovate in all phases of their
operations so as to gain competitive advantages and even to build
entirely new business models.
K350 as a strategic and software solution, is offered in four
blends: Bronze, Silver, Gold and Platinum. Clients pay a monthly
fee for the service which enables them to collect and store
personal data in a logical data warehouse (LDW) connected to our
Visual Knowledge BI tool using MicroStrategy either as a cloud or
deployment on site.
Our 15 step journey will ultimately enable our clients to:
- enhance marketing efforts by using narrow cast marketing
- enhance their balance sheet by self-creating intangible
assets
- improve customer loyalty, brand affiliation, customer
satisfaction and retention
- tailor-make offerings and personalisation
We have seen a distinct shift in the market whereby companies are
starting to grasp the need to better understand their customers
beyond basic demographics and have started to embrace the need for
structured, organised data with visualisation tools, coupled with
communication portals enabling companies to communicate on a one-
to-one basis with consumers. We anticipate this momentum to grow
and foresee the potential to enhance our annuity income in this
division.
Incentive and Loyalty Programmes (“ILP”)
ILP is a critical data source identified by the Group for
collecting personal data. We have identified this as an
opportunity for both a service offering and a source of data
collection.
During the period under review, we accordingly researched, built
and implemented a channel incentive programme that can be used by
corporates for:
• Motivation
• Behaviour modification
• Morale enhancement
• Loyalty and retention
• Recognition and reward
We deployed the application with our first client, being a large
well-known cell phone brand, and to date have successfully issued
5 600 cards to agents of the client, moderated over 50 000
transactions and paid rewards to the cardholders in excess of
R12 million.
This programme has clearly demonstrated our ability to collect
valuable data and offer our client meaningful insights around such
data.
We are now in a position to market this service to a broad range
of corporates. We have also been approached by the same
aforementioned cell phone brand to evaluate the deployment of the
service in Kenya, Tanzania and the DRC.
Vendor Relationship Management (“VRM”)
Whilst this is a complementary strategy to K350, it is the
juxtaposition for data collection. K350 collects data from
consumers (“pull strategy”), whilst VRM enables consumers to share
or push data to businesses from their own personal information
management system (PIMS).
There is mounting international pressure from consumers who want
to exercise greater control over the data companies hold about
them and have realised the actual value of their data. Consumers
want to have the ability to exchange their personal data for
value.
To explore this growing trend, we have been developing a PIMS
platform under the brand “mibubble”. We anticipate launching this
service via a website and mobile app at the end of May 2016.
Investment Updates
BMi Sport Group (“BMi Sport”)
The Group owns 63% of BMi Sport. The relocation of BMi Sport to
our head office has been successful and the company’s technical
infrastructure has been upgraded and hosted in our state-of-the-
art hosting environment.
Upgrades were made to all personal computers, scanners and
television and radio feeds enabling an enhanced throughput of
research.
Dave Sidenberg has been appointed as the Managing Director to
replace Johan Grobler who will be retiring at the end of
March 2016. Dave has been with the business for 14 years and has a
solid understanding of the industry and clients.
New technical staff with MicroStrategy expertise have been
deployed to enhance the Group’s reporting capabilities and to gear
BMi Sport to enter the African market where we anticipate great
opportunities.
BMi Sport provides the following services:
• Media tracking and audience analysis
• Sponsoring tracking
• Sport demographics and trend analysis
• Advertising evaluation
• Strategic consulting
• Media research
• Sponsorship evaluations
BMi Sport has developed long-term relationships with blue-chip
brands such as: Sasol, Nike, Telkom, Toyota, Blue Bulls, Standard
Bank, Vodacom, Coca-Cola, Discovery, ABSA, MTN, Nedbank, Cell C
and Cricket SA.
BMi Sport has remained at the forefront of the sporting industry
for the past 25 years and is recognised as a leader in the field.
Our intention is to replicate the service offering in South Africa
to the rest of the African continent and internationally.
LivingFacts Proprietary Limited (“LivingFacts”)
LivingFacts develops specialised research capabilities that help
their clients understand stakeholders’ and customers’ needs,
perceptions and realities.
LivingFacts offers both qualitative and quantitative research for
blue-chip clients within selected consumer segments including:
financial, health, retail and logistics.
BMi Research Proprietary Limited (“BMi Research”)
The Group acquired 100% of the equity in BMi Research during
December 2015.
BMi Research is a turnkey service house, specialising in
qualitative and quantitative research solutions, with multi-sector
experience which understands industrial and manufacturing
research, wholesale to retail intelligence and shopper insights.
The services offered by BMi Research include:
• Annual category quantifications
• Client commissioned reports
• Consumer insights
• In-store observation services
• Mystery shopping
• Print ad evaluations
Dashboards and advanced analytics
These services are offered in South Africa and throughout the
African continent.
PROSPECTS
We anticipate that trading conditions in general will be difficult
for the foreseeable future and expect a plateauing or slight
decline in faxing volumes.
However, we believe that our Active Data Exchange Services will
continue to grow as we have a number of positive prospects in our
pipeline. We will increase the size of our sales team and
anticipate growing the number of clients.
We furthermore remain optimistic about our K350, Incentive and
Loyalty Programmes and Vendor Relationship Management as these
bring new revenue streams to the Group.
It is important to note that although the aforementioned services
and channels to market are new from a revenue perspective, they
are mainly an extension of the service offering to our existing
clients where we have long-standing relationships.
The Company has also developed a number of new products in the VRM
space which will be launched during May 2016. This is anticipated
to introduce yet another new and distinct revenue stream in an
area that is gaining traction worldwide.
The Company has adopted a six point strategy that provides focus,
structure and the ability to open new markets which will enable
solid future growth.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Restated*
Unaudited Unaudited Audited
as at as at as at
31 Dec 31 Dec 30 Jun
2015 2014 2015
Growth R’000 R’000 R’000
ASSETS
Non-current
assets 12.7% 67 061 59 504 60 867
Property,
plant and
equipment 20.7% 18 916 15 672 15 715
Intangible
assets 22.0% 14 165 11 613 11 735
Goodwill 100.0% 24 362 - 16 535
Investment
in
associates (66.6%) 3 919 11 723 12 180
Loans
receivable - 4 496 4 496 4 496
Investments (98.9%) 176 16 000 -
Deferred tax
asset 1 027 - 206
Current
assets (12.4%) 104 660 119 433 122 217
Inventory (66.8%) 422 1 270 411
Current tax
receivable (100.0%) - 520 -
Trade and
other
receivables 107.0% 36 461 17 611 26 667
Cash and
cash
equivalents (32.2%) 67 777 100 032 95 139
Total assets 171 721 178 937 183 084
EQUITY AND
LIABILITIES
Capital and
reserves 0.2% 137 821 137 484 151 777
Share
capital - 137 137 137
Share
premium - 55 973 55 972 55 973
Accumulated
profits 5.6% 85 959 81 375 94 201
Change in
ownership (5 844) - -
Attributable
to the
equity
holders of
the parent (0.9%) 136 225 137 484 150 311
Non-
controlling
interests 100.0% 1 596 - 1 466
Non-current
liabilities 32.9% 8 128 6 115 8 017
Interest
bearing
liabilities (8.8%) 3 150 3 454 2 499
Other
Financial
Liabilities 1 666 - 1 666
Deferred tax
liability 24.5% 3 312 2 661 3 852
Current
liabilities (27.1%) 25 772 35 338 23 290
Trade and
other
payables (36.4%) 20 910 32 876 19 147
Provisions 14.0% 1 305 1 145 1 320
Tax payable 869 - 951
Unclaimed
dividends 31.1% 139 106 139
Current
portion of
interest
bearing
liabilities 110.5% 2 549 1 211 1 733
Total equity
and
liabilities 171 721 178 937 183 084
Net asset
value per
share
(cents) 0.5% 98.99 98.50 109.23
Net tangible
asset value
per share
(cents) (9.9%) 70.99 78.80 88.68
Number of
shares in
issue - 137 615 798 137 615 798 137 615 798
*as announced on SENS on 26 February 2016, the results for the six
month period ended 31 December 2014 were restated to reflect the
effective date of the BMi Sport acquisition as 1 March 2015 which
is the date of control for IFRS purposes.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Restated*
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2015 2014 2015
Growth R’000 R’000 R’000
Revenue 62.8% 82 079 50 413 102 604
Cost of Sales 104.9% (41 686) (20 343) (40 706)
Gross profit 34.3% 40 393 30 070 61 898
Other
operating
income 143.6% 787 323 774
Staff costs 121.3% (20 968) (9 475) (18 902)
Depreciation
and
amortisation
expense 43.3% (2 942) (2 053) (4 118)
Other
operating
expenses 72.2% (8 261) (4 797) (10 334)
Finance costs 27.4% (251) ( 197) (390)
Income from
associates (39.7%) 388 643 1 099
Investment
income (9.0%) 2 868 3 151 6 158
Profit before
tax (32.0%) 12 014 17 665 36 185
Income tax
expense (34.5%) (3 198) (4 884) (9 777)
Profit for
the period (31.0%) 8 816 12 782 26 408
Other
comprehensive
income - - - -
Total
comprehensive
income
for the
period (31.0%) 8 816 12 782 26 408
Profit
attributable
to:
Non-
controlling
interest 544 - 801
Owners of the
parent (35.3%) 8 272 12 782 25 607
8 816 12 782 26 408
Weighted
average
number
of shares in
issue 0.2% 137 615 798 137 282 522 137 448 249
Basic
earnings per
share (cents) (35.4%) 6.01 9.31 18.63
Headline
earnings per
share (cents) (35.2%) 6.01 9.27 18.56
Diluted basic
earnings per
share(cents) (35.4%) 6.01 9.31 18.63
*as announced on SENS on 26 February 2016, the results for the six
month period ended 31 December 2014 were restated to reflect the
effective date of the BMi Sport acquisition as 1 March 2015 which
is the date of control for IFRS purposes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Change
in- Total
Share Share owner Share
Capital Premium ship Capital
R’000 R’000 R’000 R’000
Audited balance at
1 July 2014 136 52 488 - 52 624
Changes in equity
Total
comprehensive
income for
the period - - - -
Issue of shares 1 3 485 - 3 486
Dividends - - - -
Total changes 1 3 485 - 3 486
Unaudited balance
at
1 January 2015 137 55 973 - 56 110
Changes in equity
Total
comprehensive
income for
the period - - - -
Non-controlling
interest as
result
of acquisition - - - -
Total changes - - - -
Audited balance
at 1 July 2015 137 55 973 - 56 110
Changes in equity
Total
comprehensive
income for
the period - - - -
Non-controlling
interest
as a result
of acquisition - - - -
Change in
ownership
in subsidiary - - (5 844) (5 844)
Dividends - - - -
Total changes - - (5 844) (5 844)
Unaudited balance
at 31 December 2015 137 55 973 (5 844) 50 266
Attribu-
table Non-
Retained to Equity controlling Total
Income Holders Interest Equity
R’000 R’000 R’000 R’000
Audited balance
at
1 July 2014 85 107 137 731 - 137 731
Changes in equity
Total
comprehensive
income for
the period 12 781 12 781 - 12 781
Issue of shares - 3 486 - 3 486
Dividends (16 514) (16 514) - (16 514)
Total changes (3 733) ( 247) - ( 247)
Unaudited balance
at
1 January 2015 81 374 137 484 - 137 484
Changes in equity
Total
comprehensive
income for
the period 12 826 12 826 802 13 628
Non-controlling
interest as
result
of acquisition - - 665 665
Total changes 12 826 12 826 1 467 14 293
Audited balance
at 1 July 2015 94 200 150 310 1 467 151 777
Changes in equity
Total
comprehensive
income for
the period 8 816 8 816 544 9 360
Non-controlling
interest
as a result
of acquisition - - 4 761 4 761
Change in
ownership
in subsidiary - (5 844) (5 177) (11 021)
Dividends (17 057) (17 057) - (17 057)
Total changes (8 241) (14 085) 128 ( 13 957)
Unaudited balance
at 31 December
2015 85 959 136 225 1 595 137 820
CONSOLIDATED STATEMENT OF CASH FLOWS
Restated*
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2015 2014 2015
R’000 R’000 R’000
Cash flow from operating
activities 4 910 26 173 17 161
Net cash generated from
operations 3 894 27 447 18 609
Finance costs (251) (197) (391)
Investment income 2 868 3 151 6 158
Normal tax paid (1 602) (4 229) (7 215)
Cash flow from investing (16 695) (28 523) (24 005)
Activities
Purchase of property,
plant and equipment (3 350) (668) (1 618)
Proceeds on disposal of
property,
plant and equipment - 77 335
Business combination (7 179) - (13 824)
Purchase of additional
equity in Subsidiary (11 019) - -
Increase in investment (176) (16 000) -
Increase in loans
receivable - (4 496) -
Decrease / (Increase)
Investment in Associate 8 261 (4 514) (4 514)
Normal Product Development
costs (3 232) (2 922) (4 384)
Cash flow from financing
activities 1 467 (246) (678)
Dividends paid (17 043) (16 514) (16 481)
Net decrease in cash and
cash equivalents (27 362) (19 110) (24 003)
Cash and cash equivalents
at
beginning of the period 95 139 119 142 119 142
Cash and cash equivalents
at end of the period 67 777 100 032 95 139
*as announced on SENS on 26 February 2016, the results for the six
month period ended 31 December 2014 were restated to reflect the
effective date of the BMi Sport acquisition as 1 March 2015 which
is the date of control for IFRS purposes.
BASIS OF PREPARATION
The unaudited condensed consolidated interim results for the six
months ended 31 December 2015 have been prepared in accordance
with International Financial Reporting Standards (“IFRS”) and are
presented in terms of the disclosure requirements set out in
International Accounting Standards (“IAS”) 34, as well as the
SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and the Financial Reporting Pronouncements as
issued by the Financial Reporting Standards Council, the JSE
Listings Requirements and the requirements of the Companies Act,
No. 71 of 2008. The unaudited condensed consolidated interim
financial information should be read in conjunction with the
audited annual financial statements for the year ended
30 June 2015.
Accounting policies and computations are consistently applied as
in the annual financial statements for the year ended
30 June 2015.
During the interim period the Group adopted those standards and
interpretations in issue and effective for the interim period. The
adopting of these new and amended standards and interpretations
has not had a significant impact on the Group’s adopted accounting
policies.
These financial statements have been compiled under the
supervision of the Financial Director, Pieter Scholtz.
The unaudited consolidated interim results for the six months
ended 31 December 2015 have not been reviewed by the Group’s
auditors.
CASH GENERATED (USED IN) OPERATIONS
Restated*
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2015 2014 2015
R’000 R’000 R’000
A RECONCILIATION OF PROFIT
BEFORE TAXATION TO CASH
GENERATED FROM OPERATIONS
Profit before taxation 12 014 17 665 36 185
Adjustments for: (78) (6 791) (7 892)
Depreciation and
amortisation 2 942 2 053 4 118
Provisions (15) (5 178) (5 003)
Finance costs 251 197 391
(Profit) on disposal of
property,
plant and equipment - (69) (141)
Income in associates (388) (643) (1 099)
Investment income (2 868) (3 151) (6 158)
Operating profit before
working
capital changes
Working capital changes (8 042) 16 572 (9 684)
Decrease / (Increase) in
inventory (11) (810) 49
Decrease / (increase) in
trade and
other receivables (9 794) 1 333 (8 945)
(Decrease) / Increase in
trade
and other payables 1 763 16 049 (788)
Cash generated from
operations 3 894 27 447 18 609
SEGMENTAL REPORTING
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision makers
(the “CODM”). The CODM has been identified as the executive
committee members who make strategic decisions. The CODM have
organised the operations of the Company based on its brands and
this has resulted in the creation of the following reportable
segments:
• Active Data Exchange Services
• Knowledge Creation and Management
Restated*
Unaudited Unaudited Audited
six months six months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2015 2014 2015
R’000 R’000 R’000
Revenue
Active Data Exchange 38 967 49 171 88 744
Services
Knowledge Creation and 43 112 1 242 13 860
Management
82 079 50 413 102 604
Cost of sales
Active Data Exchange (19 037) (20 343) (37 862)
Services
Knowledge Creation and (22 649) - (2 844)
Management
(41 686) (20 343) (40 706)
Gross Profit
Active Data Exchange 19 930 28 828 50 882
Services
Knowledge Creation and 20 463 1 242 11 016
Management
40 393 30 070 61 898
*as announced on SENS on 26 February 2016, the results for the six
month period ended 31 December 2014 were restated to reflect the
effective date of the BMi Sport acquisition as 1 March 2015 which
is the date of control for IFRS purposes.
The accounting policies applied to the operating segments are the
same as those described in the basis of preparation paragraph
above. Active Data Exchange Services are provided within South
Africa as well as in 36 African countries (“Africa sales”). Within
the period under review, 3.6% (2014: 1.1%) of its revenue can be
attributed to Africa sales. The Company allocates revenue to each
country based on the relevant domicile of the client. All of the
Company’s assets are located in South Africa.
Active Data Exchange Services currently generates 64.3%
(2014: 59.2%) of its revenue through three large network service
providers. The reconciliation of the gross profit to profit before
taxation is provided in the statement of comprehensive income. The
CODM reviews these income and expense items on a Group basis and
not per individual segment. All assets and liabilities are
reviewed on a Group basis by the CODM.
The new business combinations are reported within the Knowledge
Creation and Management segment. The related operational cost of
these new business combinations are R3.1 million (2014: nil) and
staff costs are R11.5 million (2014: nil).
All assets and liabilities are reviewed on a Group basis by the
CODM.
Acquisition of remaining equity in subsidiary
The Group acquired the remaining 60.30% of BMi Research with the
effective date of the acquisition of the remaining shares being 31
July 2015. The fair values of the identifiable net assets and
liabilities of BMi Research as at the date of acquisition of the
remaining shares were:
R’000
Acquisition of new business
Cash and Cash Equivalents 2 247
Trade and other receivables 5 944
Property Plant and Equipment 2 471
Total Assets 10 662
Trade creditor (2 993)
Non-controlling interest in subsidiaries (319)
Taxation (422)
Net fair value of assets 6 928
Non-controlling Interest (4 442)
Net fair value held by Group 2 486
Goodwill 6 940
Purchase consideration 9 426
Cash and Cash equivalent received (2 247)
7 179
Reconciliation between earnings and headline earnings
Restated*
Unaudited Unaudited Audited
12
six months six months months
ended ended ended
31 Dec 31 Dec 30 Jun
2015 2014 2015
R’000 R’000 R’000
The calculation of earnings
per share is based on
profits of R8.3 million
attributable to equity
holders of the parent
(2014: R12.7 million) and a
weighted average of 137 615
798 (2014: 137 282 522)
ordinary shares in issue
during the period. 6.01 cents 9.31 cents 18.63 cents
The calculation of headline
earnings per share is based
on profits of R8.3 million
with no adjustments in the
current period (2014
adjusted: R12.7 million)
and a weighted average of
137 615 798 (2014: 137 282
522) ordinary shares in
issue during the period. 6.01 cents 9.27 cents 18.56 cents
Reconciliation between
earnings and headline
earnings
Profit attributable to
equity holders of parent 8 272 12 782 25 607
After Tax effect on profit
on disposal of property,
plant and equipment: - (50) (102)
Headline earnings 8 272 12 732 25 505
The calculation of diluted
earnings per share is based
on profits of R8.3 million
attributable to equity
holders of the parent
(2014: R12.7 million) and a
weighted average of 137 615
798 (2014: 137 282 522)
ordinary shares in issue
during the period. 6.01 cents 9.31 cents 18.63 cents
There were no instruments issued during the current period that
have a dilutive impact.
*as announced on SENS on 26 February 2016, the results for the six
month period ended 31 December 2014 were restated to reflect the
effective date of the BMi Sport acquisition as 1 March 2015 which
is the date of control for IFRS purposes.
DIVIDEND POLICY
As the Group has traditionally paid annual dividends, the board
has accordingly decided that no interim dividend be declared.
DIRECTORATE
There were no changes to the board during the interim period.
SUBSEQUENT EVENTS
The board is not aware of any material events that have occurred
between the end of the interim period and the date of this report.
APPRECIATION
We would like to thank all our management teams, staff, business
partners, customers, suppliers, business advisers and shareholders
for their invaluable support.
For and on behalf of the board
Ashvin Mancha
Chairman
Mark Smith
Chief Executive Officer
Pieter Scholtz
Financial Director
Johannesburg
24 March 2016
Directors: Ashvin Mancha#* - Chairman,
Mark Smith – Chief Executive Officer, Pieter Scholtz - Financial
Director, Gaurang Mooney#* (Botswana), Graham Groenewaldt – Sales
Director, Paul Jenkins#*, Roger Pitt#*, Marc du Plessis#, Piet
Greyling#
# Non-executive
* Independent
Website: www.cgn.co.za
Company Secretary: Stefan Kleynhans
Sponsor: Merchantec Capital
Transfer Secretaries: Computershare Investor Services Proprietary
Limited
Date: 24/03/2016 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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