Wrap Text
Audited Summary Financial Results for the year ended 31 March 2016 and Cash Dividend Declaration Announcement
Prescient Limited
(Incorporated in the Republic of South Africa)
(Registration number 1936/008278/06)
Share code: PCT
ISIN: ZAE000163531
("Prescient" or "the Company" or "the Group")
SUMMARY AUDITED FINANCIAL RESULTS
For the year ended 31 March 2016 and cash dividend
declaration announcement
KEY HIGHLIGHTS
- Growth in total income for the Group of 9% to R910.4 million
(2015: R835.9 million)
- Headline Earnings per share of 6.79 cents per share (2015: 7.54 cents per share)
- Final dividend declared of 1.9 cents per share for a total dividend for the
year of 4.75 cents per share (2015: 5.75 cents per share)
- Increase of 13% in assets under management in Prescient Investment
Management to R74.2 billion (2015: R65.5 billion)
- Growth in local third party assets under administration for Prescient Fund
Services of 39% to R67.6 billion (2015: R48.6 billion)
- Strong investment performance across mandates, highlighted by Prescient
Income Provider receiving the Raging Bull Award for the Best South
African Interest-bearing Fund
- Launch of the Prescient Evolution Clean Energy and Infrastructure
Debt Fund
- Continued enhancement to the fund services offerings to local and
offshore clients
- The launch of Prescient Fund Services' hedge fund administration capability
- Another set of strong ratings for Prescient Securities in the Financial
Mail analyst ratings
- Solvency and Assessment Management (SAM) and Retirement Reform-
readiness for Prescient Life
- Total income growth for the PBT Group
COMMENTARY
Introduction
Prescient is a multinational business whose operations
in financial services and information management
services span several continents.
Financial performance
Prescient Limited achieved total income growth
of 9% to R910.4 million(2015: R835.9 million), headline
earnings of 6.79 cents per share (2015: 7.54 cents per share)
and declared a cash dividend per share of 4.75 cents for the year
(2015: 5.75 cents per share).
The increase in total income was due to growth
in assets under management (AUM) of 13% from
R65.5 billion to R74.2 billion, a growth in local third
party assets under administration (AUA) of 39% from
R48.6 billion to R67.6 billion and a 10% increase in
total income for information management services
through a continuing strong demand for their services
locally and into Africa and Australia.
Total income growth was tempered to a degree as a
result of the decline in the Chinese market, reducing
the levels of AUM on which those fees were earned
in the prior year. This impacted management and
performance fees earned as well as fund services
fees earned on these assets under administration.
Furthermore, total income was impacted by
reduced returns on financial assets, particularly the
shareholder assets held in Prescient Life Limited.
Prescient Securities also operated under difficult
trading circumstances with reduced margins, resulting
in a lower profit contribution than in the prior year.
Profit before tax declined by 9% to R166.3 million
(2015: R182.1 million) with profit after tax down
by 13% to R119.1 million (2015: R136.5 million).
The decline in profit before tax was due to a
combination of a number of factors on the expense
side. These included an increase in staff costs
in financial services in order to accommodate
for increased growth, particularly in assets under
administration; increased technology costs, mainly
as a function of the depreciation in the rand against
currencies in which the majority of technology costs
are invoiced; a number of once-off costs in investment
management; a substantial increase in costs of
information management services as a result of the
depreciation of the rand, as many of these costs are
denominated in dollars; a loss on forward exchange
contracts taken out on dollar denominated invoicing
in information management services and a loss
on the sale of Greenfields Institute of Business
("Greenfields").
Basic earnings per share in 2016 was 6.69 cents per
share (2015: 8.07 cents per share). Headline earnings
per share decreased by 10% from 7.54 cents per
share to 6.79 cents per share. Headline earnings
was adjusted, in total, by an amount of R1.7 million,
which included the impact of the upward revaluation
of the Irish property by an amount of R3.4 million
(2015: R2.6 million), the loss on sale of Greenfields by
an amount of R5.8 million and the gain on the partial
sale of an equity-accounted investee of R0.7 million.
Further detail on the results of the individual operating
segments is included below.
Financial Services
Total income from financial services increased by 7%
from R352.9 million to R378.0 million.
The increase in total income was driven primarily from
two sources, being the growth in AUM for Prescient
Investment Management and a growth in assets under
administration for Prescient Fund Services. Growth
was muted as a result of difficult trading conditions
for Prescient Securities and flat returns for Prescient
Life on their shareholder assets. There was also a
reduction of fee income generated from the China
mandates as a result of the marked decline in the
China stock exchange from June 2015 onwards.
Operating costs for the segment were also higher as
a result of an increased staff complement across the
board and further expenditure to bolster capability
across the technology platforms.
Prescient Investment Management had a decent
financial performance for the year with a steady growth
in AUM from R65.5 billion in 2015 to R74.2 billion in
2016 which would have flowed through to stronger
profitability; however, there were a number of once-
off expenses that had a negative impact on its
performance.
The 2017 financial year is set to be a stronger one with
an increasing interest in mandates as performance
has been enhanced.
Prescient Investment Management continues to
entrench itself in the retail space with good growth
seen in this area. This was highlighted by Prescient
Income Provider winning the Raging Bull Award for
the Best South African Interest-bearing Fund. This
is a great achievement given the highly competitive
nature of the category. In addition, it was also awarded
certificates for the top performance by a domestic
collective investment scheme in the sub-category
of South African multi-asset income and for top-
performance on the basis of risk-adjusted returns by
a domestic collective investment scheme in the sub-
category of South African multi-asset income. In the
index space, we have reinforced our position as a
front runner with good performance in SA property and
equity mandates.
Prescient Investment Management, however, has a
broader mandate base and with the appointment of
Raphael Nkomo during the year, together with the
investment team, there has been a focus on other
areas where investment excellence will be emerging,
resulting in stronger performance across all mandates.
Prescient Investment Management, together with
its joint venture partner in Evolution Africa, also
launched the Prescient Evolution Clean Energy and
Infrastructure Debt Fund, during the current year. This
mandate seeks to provide an alternative investment
class for institutional and retail investors through
the strong investment management experience and
discipline brought by Prescient and the knowledge of
the Renewable Energy space brought by Evolution
Africa. This fund has made some very strong
investments, currently earning inflation plus 7.5%,
which is significantly above the benchmark of inflation
plus 4.5%.
Furthermore, we launched the Prescient Optimised
Income Fund, with significant demand expected for
this fund delivering tax-efficient returns.
Prescient China, which manages the Prescient China
Balanced Fund, has relocated some staff to Shanghai
and the fund continues to be one of the top three
performers despite the volatility of the Chinese market.
The joint venture which Prescient has with our
Namibian counterparties has turned profitable whilst
we are actively seeking business within Lesotho.
Prescient Fund Services continued to grow at an
extremely pleasing rate in terms of total income and
AUA. Local third party AUA grew from R48.6 billion in
2015 to R67.6 billion in 2016. This significant growth
has been built on a very strong reputation in the
industry, high levels of efficiency and accuracy in
delivery and with minimal spend on marketing and
advertising. The growth has been across a number
of offerings including segregated administration and
reporting, the co-name fund offering on the Prescient
Management Company licence (where the number
of co-name partners has grown from 19 to 29 and
the number of co-name funds has increased from
47 to 60) as well as a comprehensive new offering
for hedge fund administration where the Prescient
Management Company was registered in April 2016
to offer a regulated space for the hedge fund industry.
This approval includes licensing for Qualified and
Retail hedge funds. This latter offering would not have
added significant income to the 2016 results, but it is
likely to be a very strong growth component in 2017
where a number of clients are already committed by
way of mandates and are currently being brought
onto book and generating income.
The increased AUA for Prescient Fund Services
has required an increase in head count; however,
economies of scale have started to come through
and the margins have increased. There is always
pressure on these margins as a result of a technology
cost base that is largely denominated in offshore
currency, and the weakening of the rand during the
current year has made this margin pressure more
pronounced. We do believe, though, that it is an
important strategy to contract with the best of breed
service providers for the various components of our
technology platform, and we are confident that the
efficiencies gained through these systems will justify
the expense attached to them.
Prescient Fund Services is still in a strong growth
phase where quality fund services are in high demand.
One of the major challenges the company faces will be
finding the appropriate skill set in staff that can operate
at the high level expected of the business. There will
also always be the need to find more efficient ways to
deliver the services and this may require continuing
expenditure on the most appropriate systems.
Prescient Fund Services Ireland, our UCITS-approved
Manager in Dublin, also continues to leverage off the
efficiencies gained in South Africa; however, there
is a need to grow the client base more significantly.
There was decent growth in the third party AUA from
EUR481.4 million (R6.3 billion) in 2015 to EUR515.8 million
(R8.8 billion) in 2016. The company is still strongly
profitable and represents a sound base for future
offshore client growth.
Despite an overall increase in policyholder assets from
R9.8 billion in 2015 to R11.0 billion in 2016, Prescient
Life Limited operated in difficult circumstances during
the current year. Most disappointingly, significant effort
was put in by the business to be pro-active to the
changes proposed under Retirement Reform, which
were due to be implemented in March 2015, and which
were then delayed by government at the eleventh
hour. This resulted in a delay of client take-on into the
innovative products and services offered by Prescient
Life in accommodating Retirement Reform and therefore
a delay in the positive income stream associated with
these products. The business is confident that the
offering is still ahead of industry competitors and will
be easy to implement as the changes are fully brought
on line.
Further difficult conditions were experienced in the
performance of the markets, affecting the returns on
shareholder assets. The net investment returns were
relatively flat and well below the CPI-plus requirements
in keeping up with the growing policyholder base.
An increase in the administrative capabilities meant
additional staff take-on and the rigorous demands
placed on linked life companies in the context of
Solvency and Assessment Management (SAM) meant
a higher staff expense and accounting and actuarial
fees. Comprehensive work has been performed by
Prescient Life in being SAM-ready and this should
put the business in a very good position with taking
on new clients. There are concerns, however, that
the goal posts for the capital requirements for linked
licences are continually changing and we have
actively engaged with the regulator to understand the
reasons for these changes.
From an operational perspective, platform offerings
have been well received by a number of institutional
clients who have signed mandates with Prescient Life;
however, implementation has also been slow as a
result of long lead times with institutional clients selling
to their client base.
A highlight of the current period has been an extension
of Prescient Life's offering to include in-house umbrella
fund administration. This was always an area that
was outsourced to third party providers and which
reduced our ability to expand the client base. From
the 1st of April 2016 we have taken over this service
offering from the outsourced providers and the capacity
in-house has been built far more comprehensively
than we have ever had before. Several clients are now
live on our in-house system and the process has been
relatively seamless in its implementation.
Further product and service enhancements have
come through a strategic partnership with an
insurance provider allowing Prescient Life the ability
to offer group and individual risk products alongside
the linked investment products. These risk products
will be underwritten on a separate cell captive so there
has been no requirement to change the nature of the
Prescient Life linked licence. This further expansion
of the range of financial products available from
Prescient will be a long-term benefit to the growth of
the client base.
Prescient Securities continued to experience top-
line pressure, with income declining during the period.
Costs also increased and these two factors combined
for a resultant negative impact on operating profit.
The decline in Prescient Securities' revenue came
from declines in derivative and equity revenues – the
two largest underlying divisions.
The derivatives division was negatively impacted by
the loss of a significant hedge fund client, but did
well to replace the bulk of lost revenue from other
institutional clients.
The equities trading environment remains extremely
competitive and challenging. Pressure points include
changes to BEE legislation, lower brokerage fees
(industry pressures) and Commission Sharing
Agreements (CSAs) resulting in trade and research
allocations coming under pressure.
The Research team is working hard to expand its
coverage. The lead time to get recognition is around
12-18 months, which is merely a function of the
industry. We remain positive on our research initiative
prospects.
At the 2016 Financial Mail Rating the Analysts (equities
and derivatives) Awards, Prescient Securities was
recognised in the following categories:
#2 – Derivatives Research
#2 – Derivatives Dealing
#3 – Innovative Research
#3 – Financial and Industrial Small and Medium
Market Cap Companies
#3 – Hotels, Travel and Leisure
#3 – Computing and Electronics
#5 – Risk Management
#5 – Resources Small and Medium Market Cap
The Spire Awards is an initiative of the JSE and gives
recognition to participants in the Fixed Income and
Forex markets (spot and derivatives). In October 2015
Prescient Securities received recognition in the
categories below:
#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
Given the work Prescient Securities continues to do to
strategically reposition its research offering, this year's
survey sets a good base to build on.
After year-end Prescient Securities concluded two
BEE ownership deals. This positions the company
well for the impending changes in the BEE legislation
as Prescient Securities is now regarded as a black
broker as defined in the draft FSC legislation.
Prescient Wealth Management had an improved year
compared to 2015, however it remains in a building
phase but is making steady progress towards break-
even, with a growth in AUM and the appointment of
Richard Vine-Morris as the new CEO.
PBT Group continued its unbroken trend of growing its
income year on year since its inception. Revenue grew
by 10% from R482.9 million in 2015 to R532.6 million
in 2016.
Profit after tax has also grown every year since
inception, with the exception of the 2016 financial
year, dropping from R41.1 million in 2015 to
R27.6 million in 2016. This decline was partially due
to the severe depreciation of the rand during this
period which resulted in a net foreign currency loss
of R9.3 million as the company entered into Forward
Exchange Contracts for approximately half of its
anticipated income from the Africa/Middle East region
and, additionally, anticipated income for this region
fell short of expectation as there were delays in the
purchase orders for certain components of this large
scale project. This has subsequently been restored.
Dividend
The directors consider the payment of a dividend
on a bi-annual basis 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.
As per the subsequent events note below, the
company is under cautionary as a result of discussions
with Stellar Capital Partners. In the context of these
ongoing discussions the resultant capital base of the
Group has to be considered in terms of any potential
transaction and therefore the directors have applied
a prudent approach in the determination of the
distribution of a dividend to shareholders.
Furthermore, the Company will not be declaring a
substantial dividend from information management
services as cash will be retained to fund the operations
of the business.
In this context, the Company declared a final dividend
of 1.9 cents per share on 29 June 2016, which meant
a total dividend for the year of 4.75 cents per share
(2015: 5.75 cents per share) and a dividend cover of
1.4 times (2015: 1.5 times).
There are 1 669 250 950 shares in issue at the
dividend declaration date, of which 30 383 292 are
held as treasury shares. The total dividend amount
payable is R31.7 million (March 2015: R49.5 million).
The dividend is payable from income reserves.
The cash dividend is likely to have tax implications
for both resident and non-resident shareholders.
Shareholders are therefore encouraged to consult
their professional tax advisers should they be in any
doubt as to the appropriate action to take.
In terms of the Income Tax Act, the cash dividend will,
unless exempt, be subject to dividend withholding
tax (DWT). South African resident shareholders that
are liable for DWT will be subject to DWT at a rate
of 15% of the cash dividend and this amount will
be withheld from the cash dividend. Non-resident
shareholders may be subject to DWT at a rate of less
than 15% depending on their country of residence
and the applicability of any double tax treaty between
South Africa and their country of residence. The net
amount payable to shareholders who are not exempt
from dividend tax is 1.615 cents per share, while it is
1.9 cents per share to those shareholders who are
exempt. Prescient's income tax reference number is
9725/148/71/3.
In compliance with the Listings Requirements of the
JSE, the following dates are applicable:
Last day to trade cum dividend Monday, 8 August 2016
Shares trade ex dividend Wednesday, 10 August 2016
Record date Friday, 12 August 2016
Payment date Monday, 15 August 2016
Share certificates may not be dematerialised or
rematerialised between Wednesday, 10 August 2016
and Friday, 12 August 2016; both dates inclusive.
Prospects for the 2017 financial year
Although 2016 was a difficult year for the Prescient
Group there are a lot of positives to consider in
looking forward. AUM and AUA have increased
steadily towards the end of the financial year thereby
bolstering the base for the commencement of 2017.
In investment management, performance continues
to improve across most mandates and a much larger
presence in the retail market will form the basis for
good growth. Our offerings are very well priced in an
industry that is currently focused on cost-effective
solutions.
Our fund services offerings continue to expand and
the addition of our hedge fund capability will enhance
our ability to provide all the necessary services for
investment managers that offer traditional and
alternative investments to their clients. We have also
continued to enhance the reporting capabilities in the
fund services space which will continue reducing our
clients' burden when it comes to their reporting to
their clients.
Prescient Life Limited is well poised for the take up
of its broader product range. The products have
been steadily refined, administrative capability has
been expanded and the regulatory framework under
SAM has been carefully considered in terms of the
Company's growth.
For Prescient Securities, the industry remains
challenging and very competitive, but management
remains positive about its research offering, trading
capabilities and improved BEE credentials.
Information management services also had a difficult
year with tough trading conditions in Africa with
increased costs due to a weakening in the rand and
the gains in total income being offset partially by losses
on forward cover contracts. Demand for our services
remains high and we are expecting continued income
growth. New portfolios have been added to current
service offerings and customer interest has exceeded
our expectations. The latter should also enhance our
current income streams. Profitability in 2017 should
return to the levels that we are accustomed to.
Staff and management of the group have, once
again, worked extremely hard at operating at high
levels of efficiency and integrity with a continual focus
on service excellence and innovative thinking in
delivering to our clients.
Basis of preparation
The abridged audited consolidated financial statements
are prepared in accordance with the requirements of
the JSE Limited Listings Requirements for abridged
reports, and the requirements of the Companies Act
applicable to summary financial statements. The
Listings Requirements require abridged 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 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 consolidated financial statements,
from which the abridged audited consolidated financial
statements were derived, are in terms of International
Financial Reporting Standards and are consistent with
the accounting policies applied in the preparation of
the previous consolidated annual financial statements.
The abridged audited consolidated financial
statements have been extracted from audited
information but have not, in themselves, been audited.
The auditor's unqualified audit report and the audited
financial statements are available for inspection at the
Company's registered office in terms of 3.18 (F) of the
Listings Requirements.
Judgements and estimates
Preparing the abridged audited consolidated 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 expenses. Actual
results may differ from these estimates.
In preparing these abridged audited consolidated
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 previous
annual financial statements as at and for the year
ended 31 March 2015.
Related party transactions
The Group entered into various inter-company
transactions with related parties in the ordinary course
of business.
Subsequent events
The Company issued a joint cautionary announcement
on 19 April 2016, followed by a renewed announcement
on 2 June 2016, relating to a proposed transaction
with Stellar Capital Partners Limited. As at the
date of finalising the audited consolidated financial
statements the proposed transaction steps relating
to Prescient's Financial Services operating segment
had not been finalised and so no further information
is available.
As mentioned in the operational report, Prescient
Securities concluded two separate BEE transactions
subsequent to 31 March 2016, that will have a positive
impact on Prescient Securities' Black Economic
Empowerment ownership scorecard. There are no
aspects of these transactions that materially affect the
financial performance of the Group for the year ended
31 March 2016, or the financial position of the Group
as at that date.
There were no other material events subsequent to
the reporting date.
These abridged audited consolidated financial
statements were prepared under the supervision
of Michael Buckham, CA (SA) CFA (Financial
Director) and approved by the Board of Directors on
29 June 2016.
Posting of the Audited Consolidated
Financial Statements
The audited consolidated financial statements for
the year ended 31 March 2016 have been issued
and are available on the Company's website at
www.prescient.co.za.
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 auditor.
Cape Town
29 June 2016
Sponsor
Consolidated statement of profit or loss and other comprehensive income
for the year ended 31 March 2016
2016 2015
R'000 R'000
Total income 910 400 835 861
Service fees 884 877 803 169
Interest and dividend income 22 304 19 442
Other investment income 3 219 13 250
Cost of information management services (405 573) (352 768)
Operating expenses (329 751) (296 310)
Share-based payment expense (1 867) (754)
Profit from operations 173 209 186 029
Other income 3 190 8 576
Share of profit/(loss) of equity-accounted investees (net of tax) 757 (3 261)
Finance costs (10 862) (9 212)
Profit before tax 166 294 182 132
Income tax expense (47 202) (45 671)
Profit for the year 119 092 136 461
Other comprehensive income
Items that are or may be reclassified to profit or loss
Foreign currency translation differences – foreign operations 17 398 (4 599)
Tax on other comprehensive income – –
Other comprehensive income for the year, net of tax 17 398 (4 599)
Total comprehensive income for the year 136 490 131 862
Profit attributable to:
Owners of the Company 109 004 129 103
Non-controlling interests 10 088 7 358
Profit for the year 119 092 136 461
Total comprehensive income attributable to:
Owners of the Company 123 489 124 504
Non-controlling interests 13 001 7 358
Total comprehensive income for the year 136 490 131 862
Earnings per shares (cents)
– Basic 6.69 8.07
– Diluted 6.69 8.07
Notes to the statement of comprehensive income
Headline earnings per shares (cents)
– Basic 6.79 7.54
– Diluted 6.79 7.54
Dividends per share (cents)
– Interim 2.85 2.75
– Final 1.90 3.00
Consolidated statement of financial position
as at 31 March 2016
2016 2015
R'000 R'000
Assets
Non-current assets 11 667 621 10 517 632
Property and equipment 29 241 26 357
Investment property 35 728 24 911
Goodwill and intangible assets 397 960 414 048
Deferred tax asset 14 197 7 483
Long-term loans and other receivables 54 186 51 874
Investment in equity-accounted investees 9 658 14 906
Financial assets at fair value through profit or loss 151 439 157 925
Linked investments backing policyholder funds 10 975 212 9 820 128
Current assets 1 077 824 906 102
Inventory 35 688 22 154
Trade and other receivables 214 959 210 924
Amounts owing by clearing houses 192 777 36 575
Amounts owing by clients 429 186 525 215
Taxation receivable 13 623 14 262
Cash and cash equivalents 191 591 96 972
Total assets 12 745 445 11 423 734
Equity
Stated capital 667 660 664 702
Reserves 7 066 (7 287)
Retained income 152 451 138 578
Total equity attributable to owners of the Company 827 177 795 993
Non-controlling interests 24 064 14 139
Total equity 851 241 810 132
Liabilities
Non-current liabilities 11 018 427 9 842 927
Deferred tax liability 13 548 11 237
Policyholder investment contract liabilities 10 974 330 9 817 582
Loans payable 30 549 14 108
Current liabilities 875 777 770 675
Trade and other payables 106 393 98 363
Amounts owing to clearing houses 16 134 4 060
Amounts owing to clients 604 668 554 685
Current tax payable 9 377 9 405
Loans payable 44 126 56 458
Bank overdraft 95 079 47 704
Total liabilities 11 894 204 10 613 602
Total equity and liabilities 12 745 445 11 423 734
Condensed consolidated statement of changes in equity
Share-based Non-
Stated Translation Treasury payment Retained controlling Total
capital reserve shares reserve income Total interests equity
R'000
Balance at 1 April 2014 637 062 11 013 (11 854) – 96 367 732 588 8 461 741 049
Total comprehensive income for the year
Profit for the year – – – – 129 103 129 103 7 358 136 461
Total other comprehensive income – (4 599) – – – (4 599) – (4 599)
Total comprehensive income for the year – (4 599) – – 129 103 124 504 7 358 131 862
Transactions with owners recognised
directly in equity
Contributions by and distributions to
owners of the Company
Equity-settled share-based payments – – – 801 – 801 – 801
Dividends declared during the year – – – – (86 892) (86 892) (2 205) (89 097)
Issue of ordinary shares 27 640 – (2 648) – – 24 992 – 24 992
Total contributions by and distributions to
owners of the Company 27 640 – (2 648) 801 (86 892) (61 099) (2 205) (63 304)
Changes in ownership interests in
subsidiaries
Acquisition of subsidiary – – – – – – 166 166
Loss of control – – – – – – 359 359
Total changes in ownership interests in
subsidiaries – – – – – – 525 525
Total transactions with owners of the
Company 27 640 – (2 648) 801 (86 892) (61 099) (1 680) (62 779)
Balance at 31 March 2015 664 702 6 414 (14 502) 801 138 578 795 993 14 139 810 132
Share-based Non-
Stated Translation Treasury payment Retained controlling Total
capital reserve shares reserve income Total interests equity
R'000
Balance at 1 April 2015 664 702 6 414 (14 502) 801 138 578 795 993 14 139 810 132
Total comprehensive income for the year
Profit for the year – – – – 109 004 109 004 10 088 119 092
Total other comprehensive income – 14 485 – – – 14 485 2 913 17 398
Total comprehensive income for the year – 14 485 – – 109 004 123 489 13 001 136 490
Transactions with owners recognised
directly in equity
Contributions by and distributions to
owners of the Company
Treasury shares purchased – – (2 074) – – (2 074) – (2 074)
Equity-settled share-based payments – – – 1 942 – 1 942 – 1 942
Dividends declared during the year – – – – (95 131) (95 131) (2 548) (97 679)
Issue of ordinary shares 2 958 – – – – 2 958 – 2 958
Total contributions by and distributions
to owners of the Company 2 958 – (2 074) 1 942 (95 131) (92 305) (2 548) (94 853)
Changes in ownership interests in
subsidiaries
Acquisition of NCI without a change
in control – – – – – – 5 950 5 950
Disposal of subsidiary – – – – – – (6 478) (6 478)
Total changes in ownership interests in
subsidiaries – – – – – – (528) (528)
Total transactions with owners of the
Company 2 958 – (2 074) 1 942 (95 131) (92 305) (3 076) (95 381)
Balance at 31 March 2016 667 660 20 899 (16 576) 2 743 152 451 827 177 24 064 851 241
Consolidated statement of cash flows
for the year ended 31 March 2016
2016 2015
R'000 R'000
Cash flows from operating activities
Profit for the year 119 092 136 461
Income tax expense 47 202 45 671
Non-cash movements and adjustments to profit before tax (970 453) (2 280 795)
Cash generated from policyholder activities 981 892 2 269 055
Contributions and investment income 3 495 961 3 845 889
Withdrawals by policyholders (2 514 069) (1 576 834)
Changes in working capital (10 470) (9 231)
Dividends received 2 946 2 820
Dividends paid (97 679) (89 097)
Interest received 19 358 16 622
Interest paid (10 862) (9 212)
Taxation paid (50 998) (50 702)
Net cash inflow from operating activities 30 028 31 592
Cash flows from investing activities
Acquisition of equipment (8 040) (4 349)
Acquisition of intangible assets (8 382) (3 161)
Disposal of intangible assets – 3 256
Gain/(loss) on loss of control of subsidiary, net of cash disposed of 2 155 (3 296)
Disposal of/(investment in) equity-accounted investees 3 064 (3 104)
(Acquisition)/disposal of financial assets at fair value through profit or loss 6 026 (41 455)
(Extension)/repayment of long-term loans receivable (2 313) 18 414
Cash outflow from investing activities (7 490) (33 695)
Cash flows from financing activities
Acquisition of own shares 2 074 –
Increase in loans payable 4 499 18 517
Cash inflow from financing activities 6 573 18 517
Net increase in cash and cash equivalents 29 111 16 414
Effect of exchange rate fluctuations on cash held 18 133 (190)
Cash and cash equivalents at beginning of the year 49 268 33 044
Cash and cash equivalents at end of the year 96 512 49 268
Condensed consolidated segment report
for the year ended 31 March 2016
Information
Financial services management services Group
31 March 31 March 31 March 31 March 31 March 31 March
2016 2015 2016 2015 2016 2015
R'000 R'000 R'000 R'000 R'000 R'000
Segment external revenue 377 807 352 931 532 593 482 930 910 400 835 861
Segment profit before tax 123 280 124 382 43 014 57 750 166 294 182 132
Earnings per share
31 March 31 March
2016 2015
Shares
Actual number of shares in issue at the end of the period 1 669 250 950 1 648 655 093
Weighted average number of shares in issue at the end of the period 1 659 494 187 1 628 097 724
Weighted average number of treasury shares (29 671 862) (27 639 777)
Weighted average number of forfeitable plan shares (29 666 090) (10 790 672)
Earnings
Earnings attributable to shareholders 119 092 136 461
Non-controlling interests (10 088) (7 358)
Earnings attributable to FSP shareholders (1 949) (819)
Earnings attributable to ordinary shareholders 107 055 128 284
Headline earnings adjustments
– Change in fair value of investment property (3 342) (2 605)
– Loss/(gain) on loss of control of subsidiary 5 714 (5 832)
– Gain on partial sale of equity-accounted investee (736) –
Headline earnings attributable to ordinary shareholders 108 691 119 847
Sponsor
Bridge Capital Advisors (Proprietary) Limited
Corporate information
Registered office of Prescient
Prescient House
Westlake Business Park
Otto Close
Westlake
7945
(PO Box 31142, Tokai, 7966)
Directors
Murray Louw (Non-executive Chairman)
Herman Steyn (Chief Executive Officer)
Michael Buckham (Financial Director)
Zane Meyer (Lead Independent Non-executive)
Keneilwe Moloko (Independent Non-executive)
Ronell van Rooyen (Non-executive)
Heather Sonn (Independent Non-executive)
Company Secretary
Bianca Pieters
Prescient House
Westlake Business Park
Otto Close
Westlake
7945
(PO Box 31142, Tokai, 7966)
Auditor
KPMG Inc.
MSC House
1 Mediterranean Street
Foreshore
Cape Town
8001
Sponsor
Bridge Capital Advisors (Proprietary) Limited
27 Fricker Road
Illovo Boulevard
Illovo
2196
Transfer Secretary
Link Market Services South Africa (Proprietary)
Limited
PO Box 4844
Johannesburg
2000
19 Ameshoff Street
Braamfontein
2001
29 June 2016
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