Wrap Text
Unaudited interim results for the six months ended 30 June 2016
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" or "the Group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016
Highlights
- Operating profit increased by 103%
- Increased stake in Sea Harvest to 85%
- Rationalisation of portfolio with further disposals
- Turnaround at Lion of Africa Insurance Company
Commentary
The Company reported a profit for the period under review of R48.3 million
compared to a loss of R480.1 million in the comparative period. The main
contributors to this improvement were:
- Operating subsidiary Lion of Africa Insurance Company's improved
performance resulting in a small loss of R3.4 million compared to a loss
of R105.2 million in the comparative period;
- The increase in the fair value of investments, in particular Life
Healthcare and Tiger Brands; and
- No further equity accounted losses in the Grindrod structure arising
from fair value movements in the Grindrod share price.
Further rationalisation of the investment portfolio resulted in the disposal
of the entire interest in Taste Holdings for R143.4 million and the entire
interest in Rex Trueform and African & Overseas Enterprises for R76.9
million during the period.
Brimstone acquired an additional 26.6% interest in Sea Harvest increasing
its stake to 85% for R274 million, of which R158 million was debited to
equity as "changes in ownership" as required by IFRS. Sea Harvest increased
its stake in Australian ASX listed Mareterram to a controlling interest of
56% subsequent to the period end.
Intrinsic Net Asset Value (INAV) of R4.2 billion (R17.69 per share) remained
materially the same as at 31 December 2015, despite providing for R169
million of additional Capital Gains Tax due to the increase in the inclusion
rate from 66.6% to 80% of the corporate tax rate.
Brimstone Portfolio
SUBSIDIARIES
Sea Harvest (85%)
In line with its strategy of strongly supporting its investee companies,
Brimstone increased its interest in Sea Harvest to 85% during the period,
acquiring Kagiso Tiso's interest for R274 million.
Sea Harvest delivered strong results for a third consecutive year. Total
catches during the first six months were 5% better than the prior year,
benefiting from improved catch rates and vessel availability. Sales volumes
grew by an average of 2%, with strong growth of 15% in exports, where
continued firm international demand for hake was supported on the supply
side by the introduction of the Atlantic Hope into the freezer fleet. Local
sales volumes were under pressure due to a continued stagnant economic
environment and strong competitor activity. Revenue was 23% higher as a
result of price increases and a weaker Rand.
Reported EBITDA increased by 13% to R143 million for the period, this after
taking into account R51 million of hedge losses for the period arising from
the sudden weakening of the Rand in the first half of 2016.
During the period, Sea Harvest made an offer for a controlling interest in
Australian ASX listed agri-business Mareterram, in which it already held a
19.9% stake. The offer closed successfully on 22 July 2016, with Sea Harvest
increasing its stake in Mareterram to 56% at a cost of R203 million.
Lion of Africa Insurance Company (Lion of Africa) (100%)
Lion of Africa reported a net loss for the six months ended 30 June 2016 of
R3.4 million compared to a loss of R105.2 million for the same period last
year. This loss includes once-off reorganisation costs and legacy claims.
The results of the company have improved significantly due to the remedial
action and strategic changes made in the business. These include more
stringent risk acceptance procedures to clearly define the acceptance of
risks being covered and the deployment of a completely new experienced
executive team. Lion of Africa's balance sheet has strengthened
significantly with solvency at 1.88 at 30 June 2016 compared to 1.02 at
31 December 2015.
House of Monatic (Monatic) (100%)
Revenue remained flat at R104 million for the first six months while net
profit declined from R2.8 million in the comparative period to R0.3 million
in the current period. This is mainly due to the poor retail climate
affecting Monatic's own retail outlets as well as sales to independent
retailers. Monatic opened a new C2 store in the Mall of Africa increasing
its retail footprint to seven stores.
ASSOCIATES and joint ventures
Oceana (19.7%)
Brimstone increased its shareholding in Oceana to 23 007 113 shares with a
market value of R2.6 billion. Oceana's share price closed at R113.10 per
share, down from R117.00 per share at 31 December 2015. Brimstone accrued
R25.8 million in dividends during the period under review and recorded R26.1
million in equity accounted earnings based on Oceana's reported six month
earnings to 31 March 2016. An amount of R47.6 million was recorded as
Brimstone's share of Oceana's non-distributable reserve, which is largely
attributable to the increase in Oceana's foreign currency translation
reserve.
Grindrod (6.7%)
Brimstone accounts for its share of the results in the Consortium SPV as a
joint venture. Brimstone wrote its investment in the consortium down to nil
at 31 December 2015, which position has remained unchanged at 30 June 2016.
Grindrod's share price closed at R11.47 on 30 June 2016, up from R11.29 per
share at 31 December 2015.
Aon Re Africa (18%)
Aon Re Africa is a leading reinsurance broker licensed and operating in
South Africa and the rest of Africa. Aon Re Africa continued to successfully
secure new business across all divisions which resulted in solid organic
growth, especially outside of South Africa. Brimstone received a dividend of
R14.3 million from Aon Re Africa and recorded R3.5 million in equity
accounted earnings during the period under review.
South African Enterprise Development (SAED) (25%)
SAED is an investment vehicle providing equity growth capital to high
potential small and medium sized enterprises. As at 30 June 2016, SAED was
invested in two businesses, High Duty Castings, an iron foundry supplying
the automotive and industrial sectors and Tombake, a provider of turnkey
bakery and catering equipment solutions. SAED made a positive contribution
to earnings during the period under review. Subsequent to the reporting
period SAED concluded investments in Decision Inc. (Pty) Ltd, a business
intelligence and data analytics solutions provider to companies in various
industries, and The ASG Group, involved primarily in the wholesale
distribution of cycling products and brands.
INVESTMENTS
Equites (10%)
Equites' share price closed at R14.25 per share, up from R12.75 per share at
31 December 2015. The investment was revalued upwards by R42.0 million to
R399.0 million at period end.
Life Healthcare (4.7%)
Life Healthcare's share price closed at R36.20 per share, up from R35.07 per
share at 31 December 2015. Brimstone disposed of 2.35 million Life
Healthcare shares during the period, realising R88.3 million. The investment
was revalued upwards by R62.6 million to R1 815.7 million. Brimstone
received a dividend of 73 cents per share resulting in total dividend
receipts from Life Healthcare of R36.6 million, up from R35.7 million for
the comparative period.
MTN Zakhele (2.7%)
The MTN Zakhele share price closed at R77.50 per share, up from R73.90 per
share at 31 December 2015. The investment was revalued upwards by R7.9
million to R169.9 million. The MTN Zakhele scheme is expected to mature in
November 2016.
Phuthuma Nathi (7%)
The Phuthuma Nathi 1 shares and Phuthuma Nathi 2 shares closed at R156.25
and R153.22 per share (R165 and R163 per share at 31 December 2015)
respectively. The investment was revalued downwards by R43.2 million to
R735.2 million. Phuthuma Nathi has recommended a dividend that, if approved
by shareholders, will be payable in September 2016. This dividend amounts to
R91.3 million for Brimstone.
Tiger Brands (0.9%)
Brimstone's rights to Tiger Brands shares, accounted for as options, have
been revalued at period end. The independently calculated option valuation
was based on a closing share price of R362.53 per share, up from R316.44 per
share at 31 December 2015. The investment was revalued upwards by R74.9
million to R324.9 million.
Basis of preparation
The condensed consolidated interim financial statements are prepared in
accordance with International Financial Reporting Standard, IAS 34: Interim
Financial Reporting, the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Reporting Pronouncements as
issued by the Financial Reporting Standards Council, the JSE Listings
Requirements and the requirements of the Companies Act of South Africa. The
report has been prepared using accounting policies that comply with
International Financial Reporting Standards which are consistent with those
applied in the financial statements for the year ended 31 December 2015. The
condensed financial information was prepared under the supervision of the
Group Financial Director, Geoffrey George Fortuin BCom(Acc) Cum Laude,
BCom(Acc)(Hons), CA(SA).
The results have not been audited or reviewed by the Group's auditors,
Deloitte & Touche.
Dividend
In line with previous years, no interim dividend is declared for the half
year.
Prospects
The Group will continue to maintain its positive long-term view on its
investments and pursue value accreting opportunities.
On behalf of the board
F Robertson MA Brey
Executive Chairman Chief Executive Officer
23 August 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 CIB, 135 Rivonia Road, Sandton 2196
Directorate: F Robertson (Executive Chairman)*, MA Brey (Chief Executive
Officer)*, GG Fortuin (Financial)*, MI Khan (Chief Operating Officer)*, 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 Consolidated Income Statement
for the 6 months ended 30 June 2016
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
R'000 2016 2015 2015
Revenue 1 181 134 1 073 333 2 208 137
Sales and fee income 1 086 569 960 695 1 899 954
Dividends received 94 565 112 638 308 183
Operating expenses (1 057 949) (1 012 689) (2 022 394)
Operating profit 123 185 60 644 185 743
Fair value gains/(losses) 103 188 (213 201) (429 562)
Exceptional items - 31 087 32 846
Share of profits/(losses) of
associates and joint ventures 39 615 (275 170) (341 545)
Profit/(loss) before net finance costs 265 988 (396 640) (552 518)
Income from investments 13 092 9 237 30 991
Finance costs (116 488) (98 370) (224 237)
Outside unit holders' interest - (440) -
Net profit/(loss) before taxation 162 592 (486 213) (745 764)
Taxation (114 336) 6 139 77 625
Profit/(loss) for the period 48 256 (480 074) (668 139)
Profit/(loss) attributable to:
Equity holders of the parent 29 605 (503 021) (698 978)
Non-controlling interests 18 651 22 947 30 839
48 256 (480 074) (668 139)
Earnings/(loss) per share (cents)
Basic 12.2 (204.7) (284.8)
Diluted 10.4 (175.4) (284.8)
Condensed Consolidated Statement of Other Comprehensive Income
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
R'000 2016 2015 2015
Profit/(loss) for the period 48 256 (480 074) (668 139)
Other comprehensive income/(loss),
net of tax 91 232 (7 661) 188
Items that may be reclassified
subsequently to profit and loss
Cash flow hedges
Profit/(loss) arising during the period 47 041 (7 661) (98 115)
Share of non-distributable reserves
of associates 44 191 - 89 171
Items that will not be reclassified
subsequently to profit and loss
Share of non-distributable reserves
of associates - - 9 132
Total comprehensive income/(loss)
for the period 139 488 (487 735) (667 951)
Total comprehensive income/(loss)
attributable to:
Equity holders of the parent 102 318 (507 497) (657 955)
Non-controlling interests 37 170 19 762 (9 996)
139 488 (487 735) (667 951)
Condensed Consolidated Statement of Financial Position
as at 30 June 2016
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
R'000 2016 2015 2015
ASSETS
Non-current assets 5 411 601 5 287 517 5 996 570
Property, plant, equipment
and vehicles 508 684 403 996 499 942
Goodwill and intangible assets 97 286 117 054 104 595
Investments in associate companies
and joint ventures 1 220 921 808 349 1 114 419
Investments 3 530 910 3 708 078 4 044 276
Deferred taxation 17 871 - 25 489
Insurance assets 35 729 250 040 204 057
Other financial assets 200 - 3 792
Current assets 1 903 935 2 288 149 1 656 025
Inventories 263 372 253 420 258 831
Trade and other receivables 522 829 732 205 604 366
Insurance assets 416 955 660 023 532 498
Other financial assets 6 338 - 2 456
Taxation 45 53 8 500
Investments 85 667 84 109 -
Cash and cash equivalents 608 729 558 339 249 374
TOTAL ASSETS 7 315 536 7 575 666 7 652 595
EQUITY AND LIABILITIES
Capital and reserves 2 386 123 2 966 107 2 626 972
Share capital 41 45 41
Capital reserves 435 704 373 478 427 049
Revaluation reserves 14 143 14 143 14 143
Cash flow hedging reserve (13 892) 10 446 (42 414)
Changes in ownership (170 033) (11 839) (11 839)
Retained earnings 2 087 144 2 339 287 2 143 330
Attributable to equity holders
of the parent 2 353 107 2 725 560 2 530 310
Non-controlling interests 33 016 240 547 96 662
Non-current liabilities 3 431 590 2 699 204 3 387 466
Long-term interest bearing borrowings 2 819 245 1 817 584 2 624 018
Long-term provisions 25 427 23 103 25 427
Other financial liabilities - 2 274 -
Insurance liabilities 40 076 317 078 270 525
Deferred taxation 546 842 539 165 467 496
Current liabilities 1 497 823 1 910 355 1 638 157
Short-term interest bearing borrowings 195 698 198 907 174 003
Bank overdrafts 65 017 19 142 21 644
Trade payables 403 258 695 371 508 884
Other payables 155 582 96 906 226 484
Insurance liabilities 627 867 805 558 685 787
Outside unit holders' interest - 17 907 -
Other financial liabilities - 425 -
Short-term provisions 22 321 21 592 19 180
Taxation 28 080 54 547 2 175
TOTAL EQUITY AND LIABILITIES 7 315 536 7 575 666 7 652 595
NAV per share (cents) 986.0 1 107.3 1 044.0
Shares in issue at end of
period (000's) 238 651 246 135 242 371
Condensed Consolidated Statement of Changes in Equity
R'000 Revalu-
Share Capital ation
capital reserves reserves
Balance at 1 January 2015 - 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 - Audited 41 427 049 14 143
Attributable profit for the six months
ended 30 June 2016 - - -
Other comprehensive income - 44 191 -
Total comprehensive income - 44 191 -
Recognition of share-based payments - 6 589 -
Dividend paid - - -
Subsidiary's accrual for preference
dividends - - -
Acquisition of non-controlling interest
in subsidiary - - -
Redemption of preference shares by
subsidiary - - -
Issue of share capital - 4 451 -
Treasury shares acquired - (49 900) -
Share of non-distributable reserves
of associates transferred directly
to equity - 3 324 -
Balance at 30 June 2016 - Unaudited 41 435 704 14 143
1 January 2015 to 30 June 2015
- Unaudited
Balance at 1 January 2015 - Audited 45 342 032 14 143
Attributable (loss)/profit for the
six months ended 30 June 2015 - - -
Other comprehensive loss - - -
Total comprehensive (loss)/income - - -
Recognition of share-based payments - 5 749 -
Dividend paid - - -
Subsidiary's accrual for preference
dividends - - -
Non-controlling interest arising on
recognition of subsidiary - - -
Repayment of capital by subsidiary - - -
Issue of share capital - 7 313 -
Change in equity of subsidiary - 2 458 -
Share of non-distributable reserves of
associates transferred directly
to equity - 15 926 -
Balance at 30 June 2015 - Unaudited 45 373 478 14 143
Condensed Consolidated Statement of Changes in Equity
R'000 Cash flow Changes
hedging in Retained
reserve ownership earnings
Balance at 1 January 2015 - 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 - Audited (42 414) (11 839) 2 143 330
Attributable profit for the six months
ended 30 June 2016 - - 29 605
Other comprehensive income 28 522 - -
Total comprehensive income 28 522 - 29 605
Recognition of share-based payments - - -
Dividend paid - - (85 791)
Subsidiary's accrual for preference
dividends - - -
Acquisition of non-controlling interest
in subsidiary - (158 194)1 -
Redemption of preference shares by
subsidiary - - -
Issue of share capital - - -
Treasury shares acquired - - -
Share of non-distributable reserves
of associates transferred directly
to equity - - -
Balance at 30 June 2016 - Unaudited (13 892) (170 033) 2 087 144
1 January 2015 to 30 June 2015
- Unaudited
Balance at 1 January 2015 - Audited 14 922 (11 839) 2 965 681
Attributable (loss)/profit for the
six months ended 30 June 2015 - - (503 021)
Other comprehensive loss (4 476) - -
Total comprehensive (loss)/income (4 476) - (503 021)
Recognition of share-based payments - - -
Dividend paid - - (123 373)
Subsidiary's accrual for preference
dividends - - -
Non-controlling interest arising on
recognition of subsidiary - - -
Repayment of capital by subsidiary - - -
Issue of share capital - - -
Change in equity of subsidiary - - -
Share of non-distributable reserves of
associates transferred directly
to equity - - -
Balance at 30 June 2015 - Unaudited 10 446 (11 839) 2 339 287
1. Acquisition of non-controlling interest in Sea Harvest, being the excess
of the cash consideration over the net asset value of the equity
interest acquired.
Condensed Consolidated Statement of Changes in Equity
R'000 Attribu-
table to
equity
holders Non-
of the controlling
parent interests Total
Balance at 1 January 2015 - 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 - Audited 2 530 310 96 662 2 626 972
Attributable profit for the six months
ended 30 June 2016 29 605 18 651 48 256
Other comprehensive income 72 713 18 519 91 232
Total comprehensive income 102 318 37 170 139 488
Recognition of share-based payments 6 589 - 6 589
Dividend paid (85 791) (5 725) (91 516)
Subsidiary's accrual for preference
dividends - 3 238 3 238
Acquisition of non-controlling interest
in subsidiary (158 194) (8 968) (167 162)
Redemption of preference shares by
subsidiary - (88 994) (88 994)
Issue of share capital 4 451 - 4 451
Treasury shares acquired (49 900) - (49 900)
Share of non-distributable reserves
of associates transferred directly
to equity 3 324 (367) 2 957
Balance at 30 June 2016 - Unaudited 2 353 107 33 016 2 386 123
1 January 2015 to 30 June 2015
- Unaudited
Balance at 1 January 2015 - Audited 3 324 984 109 421 3 434 405
Attributable (loss)/profit for the
six months ended 30 June 2015 (503 021) 22 947 (480 074)
Other comprehensive loss (4 476) (3 185) (7 661)
Total comprehensive (loss)/income (507 497) 19 762 (487 735)
Recognition of share-based payments 5 749 - 5 749
Dividend paid (123 373) (20 679) (144 052)
Subsidiary's accrual for preference
dividends - 3 804 3 804
Non-controlling interest arising on
recognition of subsidiary - 147 805 147 805
Repayment of capital by subsidiary - (21 258) (21 258)
Issue of share capital 7 313 - 7 313
Change in equity of subsidiary 2 458 1 748 4 206
Share of non-distributable reserves of
associates transferred directly
to equity 15 926 (56) 15 870
Balance at 30 June 2015 - Unaudited 2 725 560 240 547 2 966 107
Condensed Consolidated Statement of Cash Flows
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
R'000 2016 2015 2015
Operating activities
Net attributable profit/(loss) 48 256 (480 074) (668 139)
Adjustments for non-cash items 47 063 490 805 650 360
Operating cash flows before movements
in working capital 95 319 10 731 (17 779)
(Increase)/decrease in inventories (4 541) 12 196 6 785
Decrease/(increase) in trade and
other receivables 94 534 (109 043) (6 031)
Outside unit holders' interest - 1 762 (16 145)
(Decrease)/increase in trade and
other payables (124 190) 137 380 (20 334)
Net decrease/(increase) in
insurance assets 283 871 (182 178) (8 670)
Net (decrease)/increase in
insurance liabilities (288 369) 166 147 (177)
Cash generated from/(utilised in)
operations 56 624 36 995 (62 351)
Interest received 13 092 9 237 30 991
Dividends received from associates
and joint ventures 40 105 32 349 110 148
Dividends received from other
equity investments 54 460 80 288 198 035
Income taxes paid (11 306) (23 180) (77 979)
Finance costs (114 452) (60 605) (173 877)
Net cash generated from operating
activities 38 523 75 084 24 967
Investing activities
Loan repayments and recoveries from
associate and investments - 21 756 21 756
Proceeds on disposal of investments 531 180 728 454 955 628
Proceeds on disposal of property,
plant, equipment and vehicles 3 530 159 7 080
Acquisition of property, plant,
equipment and vehicles (61 522) (32 101) (172 472)
Acquisition of intangible assets (700) (820) (1 451)
Acquisition of investments (20 032) (113 010) (1 209 785)
Net cash generated from/(utilised in)
used in investing activities 452 456 604 438 (399 244)
Financing activities
Dividends paid by Company and
subsidiaries (91 516) (144 052) (151 140)
Repayments of borrowings (54 796) (292 494) (689 879)
Loans raised 272 920 99 156 1 274 372
Further investment in subsidiary (167 162) - -
Shares repurchased (49 900) - (51 962)
Proceeds on issue of trust
units/shares 4 451 7 313 13 812
Issue of shares by subsidiary - 4 206 -
Repayment of capital by subsidiary - (21 258) -
Redemption of non-controlling
shareholder's preference shares (88 994) - -
Increase in bank overdrafts 43 373 4 327 6 829
Net cash (utilised in)/generated
from financing activities (131 624) (342 802) 402 032
Net increase in cash and cash
equivalents 359 355 336 720 27 755
Cash and cash equivalents at
beginning of period 249 374 221 619 221 619
Cash and cash equivalents
at end of period
Bank balances and cash 608 729 558 339 249 374
HEADLINE EARNINGS/(LOSS) PER SHARE
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2016 2015 2015
Headline earnings/(loss) per share (cents)
Basic 11.5 (213.2) (295.3)
Diluted 9.8 (182.7) (295.3)
Headline earnings/(loss) calculation
(R'000)
Net profit/(loss) attributable to
equity holders of the parent 29 605 (503 021) (698 978)
Loss on disposal of property, plant,
equipment and vehicles (1 670) (87) (2 119)
Realised profit on disposal of associate - (36 087) (44 841)
Impairment of investment in associate - 5 000 11 994
Adjustments relating to results
of associates (1 217) 2 108 66
Total tax effects of adjustments 1 140 8 288 9 337
Headline earnings/(loss) 27 858 (523 799) (724 541)
Weighted average number of shares
on which earnings/(loss)
and headline earnings/(loss)
per share is based (000's) 242 527 245 726 245 392
Weighted average number of shares on
which diluted earnings/(loss)
and diluted headline earnings/(loss)
per share is based (000's) 283 875 286 708 245 392
Intrinsic Net Asset Value (INAV)
Unaudited Unaudited Change since
30 June 31 December 31 December
2016 2015 2015
INAV of Brimstone (R'm) 4 231 4 229 0.0%
INAV per share (cents) 1 769 1 741 1.6%
Fully diluted INAV per share (cents) 1 673 1 648 1.5%
Market price per share (cents)
Ordinary shares 1 350 1 350 0.0%
"N" Ordinary shares 1 180 1 270 -7.1%
Discount to INAV
Ordinary shares 23.7% 22.5%
"N" Ordinary shares 33.3% 27.1%
The breakdown of INAV is available
on the Company's website at www.brimstone.co.za.
Further information
Unaudited Unaudited Audited
6 months 6 months year
ended ended ended
30 June 30 June 31 December
R'000 2016 2015 2015
1. 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: Operating Segments,
are therefore fishing, insurance,
clothing, and investments.
Investments include investments
in associates, joint ventures,
available-for-sale investments,
investments at fair value
through profit or loss (FVTPL)
and the Group's property portfolio.
Segment revenues and results
Segment revenue
Fishing 844 515 688 795 1 373 457
Insurance 138 469 158 613 310 303
Clothing 104 162 104 205 214 778
Investments 93 988 121 720 309 599
Total revenue 1 181 134 1 073 333 2 208 137
Segment profit/(loss) from operations
Fishing 77 233 89 339 121 653
Insurance (9 696) (110 422) (178 676)
Clothing 2 949 4 808 10 707
Investment management 52 699 76 919 232 059
Total profit from operations 123 185 60 644 185 743
Fair value gains/(losses) 103 188 (213 201) (429 562)
Exceptional items - 31 087 32 846
Share of profits/(losses) of
associates and joint ventures 39 615 (275 170) (341 545)
Income from investments 13 092 9 237 30 991
Finance costs (116 488) (98 370) (224 237)
Outside unit holders' interest - (440) -
Net profit/(loss) before taxation 162 592 (486 213) (745 764)
2. Fair value measurements
This note provides information about how the Company determines fair
values of various financial assets and financial liabilities.
Fair value of the Company's financial assets and financial liabilities
that are measured on a fair value basis on a recurring basis
Some of the Company'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
30 June 2016 Level 1 Level 2 Level 3 Total
Financial assets
at FVTPL
Derivative financial
assets - 331 393(3) - 331 393
Listed shares 2 458 562 - - 2 458 562
Unlisted shares 735 244 - 5(1) 735 249
Other investments 70 428 - - 70 428
Available-for-sale
financial assets
Unlisted shares - - 25 265(2) 25 265
Unlisted shares - - 2 218(1) 2 218
Total 3 264 234 331 393 27 488 3 623 115
30 June 2015 Level 1 Level 2 Level 3 Total
Financial assets
at FVTPL
Derivative financial
assets - 197 442(3) - 197 442
Listed shares 2 665 980 - - 2 665 980
Unlisted shares
and loan 803 465 6 555(4) 5(1) 810 025
Other investments 91 257 - - 91 257
Available-for-sale
financial assets
Unlisted shares - - 25 265(2) 25 265
Unlisted shares - - 2 218(1) 2 218
Total 3 560 702 203 997 27 488 3 792 187
Financial liabilities
at FVTPL
Derivative financial
liabilities - 2 699(3) - 2 699
31 December 2015 Level 1 Level 2 Level 3 Total
Financial assets
at FVTPL
Derivative financial
assets - 256 231(3) - 256 231
Listed shares 2 914 598 - - 2 914 598
Unlisted shares
and loan 778 459 - 5(1) 778 464
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
Notes
1. At cost or historical valuation.
2. Discounted cash flow method using a discount rate of 15% over
10 years.
3. Comprised of the Tiger Brands option valued using the Monte Carlo
method and interest rate swaps valued on the discounted cashflow
method using forward interest rates and contract interest rates.
4. Unit valuation of interest in a Trust holding Santam shares.
2. Fair value measurements (continued)
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). There were no transfers from Level 2 to
Level 1 during the period.
- 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).
Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
3. Share capital (number)
In issue (number)
Ordinary shares 42 757 604 42 757 604 42 757 604
Held as treasury shares (4 253 087) - (3 953 087)
38 504 517 42 757 604 38 804 517
"N" ordinary shares 246 330 843 243 864 308 244 103 200
Held as treasury shares (46 184 634) (40 486 751) (40 536 751)
200 146 209 203 377 557 203 566 449
Total net of treasury shares 238 650 726 246 135 161 242 370 966
Weighted average number
of shares on which earnings
and headline earnings per
share is based: 242 526 545 245 725 869 245 392 252
Weighted average number
of shares on which diluted
earnings and diluted headline
earnings per share is based: 283 874 851 286 708 049 245 392 252
Reconciliation of weighted
average number of shares
between basic and diluted
earnings per share and headline
earnings and diluted headline
earnings per share.
Basic 242 526 545 245 725 869 245 392 252
Dilutive instruments 41 348 306 40 982 540 -
Diluted 283 874 851 286 708 409 245 392 252
Number of instruments
treated as anti-dilutive 1 826 519 513 692 41 786 046
Closing share price (cents)
Ordinary shares 1 350 1 600 1 350
"N" ordinary shares 1 180 1 495 1 270
The following share movements occurred during the period under review:
Shares issued (number) Ordinary "N" ordinary
10 March 2016 (including
forfeitable share plan shares
of 1 647 883) - 2 017 923
25 April 2016 - 33 000
14 June 2016 - 176 720
Shares repurchased (number)
27 May 2016 300 000 -
29 June 2016 - 4 000 000
Total cost of shares repurchased was R49 900 000.
Date: 23/08/2016 03:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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