Wrap Text
Unaudited results for the six months ended 30 September 2016
Peregrine Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1994/006026/06)
JSE share code: PGR ISIN: ZAE000078127
("Peregrine" or "the Group")
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2016
- Normalised basic earnings up 10% to R270 million
- Normalised headline earnings up 4% to R255 million
- Normalised cash generated from operating activities of R302 million
COMMENTARY
The Group continued to build on its strategy of delivering higher quality, diversified earnings
during the six month period ended 30 September 2016. There was growth in earnings from all
the operating businesses namely Citadel, Peregrine Capital, Peregrine Securities, Stenham
and Java Capital, resulting in a significantly improved Group operating performance. Higher
returns from proprietary investments within the hedge funds were however offset by a
decrease in the value of proprietary listed investments.
Annuity earnings grew across all business segments and account for an increasing majority of
Group earnings with the contribution from offshore continuing to play a meaningful role in
diversifying Group income.
Financial results
Basic profit attributable to shareholders increased by 12% to R268 million
(2015: R240 million) with basic earnings per share amounting to 125.3 cents per share
(2015: 112.6 cents per share). Headline earnings increased by 6% to R242 million (2015: R228 million) with
headline earnings per share increasing by 5% to 118.5 cents per share (2015: 112.5 cents per share).
Consistent with the prior year, the board of directors feels that, in addition to providing the
above disclosed IFRS earnings (which do not accurately reflect the true economic results due
to the accounting treatment relating to share based payments and employee benefits which
resulted in enhanced IFRS earnings), normalised earnings (which more accurately reflect the
true economic results), are disclosed as follows:
- normalised headline earnings increased by 4% to R255 million
(2015: R246 million);
- normalised headline earnings per share increased by 3% to 118.5 cents
(2015: 115.4 cents per share).
Group normalised operating revenue increased by 3% to R1.16 billion (2015: R1.13 billion).
Income from proprietary investing activities increased to R93 million (2015: R45 million)
with income from equity accounted investees decreasing slightly to R48 million
(2015: R49 million). An annexure disclosing IFRS and normalised earnings is available on the
Group's website.
A good indication of the cash generating capacity of the underlying operating businesses is
that normalised total profit before tax, capital items and non-cash amortisations, adjusted for
total minorities, amounted to R332 million (2015: R317 million). Normalised cash generated
from operating activities amounted to R302 million (2015: R306 million), once again
highlighting the cash generative nature of the Group.
Aggregate normalised cash in the Group amounted to R826 million at half year-end
(March 2016: R786 million), of which R11 million (March 2016: R21 million) was available at the
centre, R499 million (March 2016: R451 million) held offshore and the balance of
R316 million (March 2016: R314 million) held by local subsidiaries.
Segmental results
Substantial non-controlling interests, including Nala's shareholding in Peregrine SA
Holdings, exist in many of the Group`s operations. Management believes that headline
earnings per reportable segment (which is the basis for the commentary below) better reflects
and aids in the understanding of each division`s specific economic benefit to the shareholders
of the Group. In addition, operating results are presented before tax and before non-
controlling interests in the financial table below. Management believes this further aids in the
understanding of each division's profitability.
Wealth Management
In a continuingly difficult investment environment, Citadel continued to capitalise on its
position as a leading private client wealth manager in South Africa. Assets under
management as at half year-end were R44.95 billion (March 2016: R44.93 billion) with gross
inflows for the six months amounting to R2.4 billion (September 2015: R1.7 billion). The
client retention rate in the traditional business amounts to 98%.
Notwithstanding significantly lower performance fees earned, headline earnings for the six
months increased by 1% to R83 million (2015: R82 million) with very pleasing annuity
earnings growth, costs controls and healthy inflows.
Asset Management
The Group's Asset Management division comprises a number of fund management
businesses. The largest contributor to the division is the Group's flagship hedge fund
manager, Peregrine Capital. Headline earnings increased to R32 million (2015: R23 million)
as a result of Peregrine Capital's increased management and performance fees earned by
higher returns on a larger asset base. Peregrine Capital's asset base grew to R8.1 billion by
half year-end (March 2016: R7.3 billion) largely as a result of strong inflows.
Peregrine disposed of its minority shareholding in Caveo Fund Solutions Proprietary Limited
and realised a net capital gain of R12.7 million on disposal.
Stenham
Post year-end, further share purchase and repurchase transactions took place in Stenham, the
group's UK and Guernsey based asset management and trust business, subsidiary. As a
result, Peregrine's share in Stenham increased from 85.08% to 88.19%.
Peregrine's share of Stenham's profit increased by 28% to R56 million (2015: R44 million).
Excluding the once off costs of settling a claim which arose in prior periods, Stenham Asset
Management performed reasonably against a backdrop of muted global market returns. Core
revenues in Sterling terms have decreased primarily due to the decrease in assets under
advisory with total assets under management and advice amounting to $3.2 billion
(March 2016: $3.4 billion), with net outflows amounting to $151 million during the period under
review. Operating costs have decreased significantly due to cost savings initiatives.
There was a strong performance from the Stenham property portfolio including significant
dividends received from Stenham's investment in Stenprop Limited, which acquired the
Stenham Property business in exchange for Stenprop Limited shares with effect from
1 October 2014. Despite the effect of the material drop in the market value of Stenprop Limited
in the period under review, earnings were enhanced by the significant gain made on the sale
of certain properties that were retained by Stenham with the intention being to realise the
remaining properties over time.
Stenham Trustees performed satisfactorily in an ever increasing regulatory cost environment
and now incorporates the results of the newly established Bellerive 50% joint venture to
which a portion of the trust business was transferred with effect from 1 April 2016.
Stenham remains strongly cash-flow generative, with no long-term debt and cash available to
augment future growth.
Broking and Structuring
The positioning of Peregrine Securities as one of the few substantial, independent structuring
and broking entities in South Africa enabled the business to once again perform exceptionally
well. It has built several of the industry's leading franchises in the areas of prime broking and
derivative broking and structuring, which have benefited from increased financial market
trading volumes. Earnings for the brokering and structuring segment which now includes an
offshore element grew by 22% to R63 million (2015: R51 million).
Advisory
Java Capital is widely regarded as the premier independent corporate advisory house in South
Africa competing directly, and successfully, for mandates against local and international
banks. It is also the industry leader in the provision of corporate finance services in the listed
property sector.
Java Capital's headline earnings contribution for the six months amounted to almost
R18 million (2015: R12 million) with Java Capital still having a significant amount of unbilled
work in progress and pipeline of new business as at the end of the reporting period.
Group
Despite higher returns generated on the Groups' proprietary investments in hedge funds,
Group investment returns, net of Group costs, decreased to R4 million (2015: R33 million)
primarily as a result of the earnings effect of the material drop in the market value of
Stenprop Limited post year end coupled with the Group's share of associated losses, after tax,
in Nala.
Issued share capital
The Group's shares in issue amounts to 226.066 million and, net of 19.772 million treasury
shares (which includes the 9.288 million Peregrine shares purchased by the Citadel Share
Trust), amounts to 206.294 million.
Directorate
During the period under review, while there have been no changes to the board of directors,
shareholders were notified, in terms of a SENS announcement published on 22 September 2016, that
Jonathan Hertz, the Group CEO, had advised the board of his intention to step down with effect from
30 June 2017.
Conclusion
In continuing difficult and challenging global market conditions, Peregrine has again
managed to deliver a set of results which has capitalised on its strong base of profitable, cash
generative operating businesses and which highlight the diversified nature of the earnings
streams. Whilst certain proprietary returns and performance fees have decreased in an
environment characterised by weak markets, annuity income continues to grow. The Group
continues to focus on growing its businesses organically and driving cross business revenue
synergies and remains well positioned to capitalise on further growth opportunities.
Jonathan Hertz Sean Melnick
Group CEO Non-executive Chairman
Sandton
17 November 2016
Directors: SA Melnick^ (Chairman); J Hertz (CEO); RE Katz (CFO); M Yachad;
BC Beaver*; P Goetsch^; LN Harris#; S Sithole*; SI Stein*
^ Non-executive *Independent non-executive #Lead independent non-executive
Company secretary and registered office: Peregrine Management Services Proprietary
Limited, 6A Sandown Valley Crescent, Sandown, Sandton, 2196 (PO Box 650361, Benmore,
2010), Telephone: +27 11 722 7400 Fax: +27 11 722 7410
Transfer Secretaries: Computershare Investor Services Proprietary Limited, 70 Marshall
Street, Johannesburg, 2001, (PO Box 61051, Marshalltown, 2107)
Joint Sponsor: Java Capital
Joint Independent Sponsor: Deloitte & Touche Sponsor Services Proprietary Limited
Further detail and a print-friendly version of these results are available from the company's
website at www.peregrine.co.za on Thursday, 17 November 2016.
Condensed consolidated statement of comprehensive income
Unaudited for
Unaudited for the the six months
% change six months ended ended 30 Audited for the
2015 to 30 September September year ended 31
2016 2016 2015 March 2016
R'000 R'000 R'000
Operating revenue 5 1,150,898 1,091,125 2,421,874
Investment and other income 35 150,610 111,791 310,107
Total revenue 8 1,301,508 1,202,916 2,731,981
Fair value (loss)/gains on linked financial investments (88,664) (295,374) 268,827
Fair value gains/(loss) on policyholder contract liabilities 88,664 295,374 (268,827)
Operating expenses 2 (909,282) (889,369) (1,877,114)
Profit from operations 25 392,226 313,547 854,867
Net interest received -57 20,632 47,571 86,855
Interest received 50,307 49,173 98,658
Interest paid (29,675) (1,602) (11,803)
Share of profits from equity accounted investees -3 48,104 49,483 70,196
Profit before taxation and capital items 460,962 410,601 1,011,918
Capital items 21,066 502 502
Profit before taxation 17 482,028 411,103 1,012,420
Taxation (102,965) (86,019) (194,324)
Profit for the period 17 379,063 325,084 818,096
Other comprehensive income for the period net of taxation
Items that may be reclassified subsequently to profit or loss:
Currency translation differences (253,583) 215,541 246,790
Total comprehensive income for the period 125,480 540,625 1,064,886
Profit for the period attributable to :
Equity holders of the company 12 267,631 239,854 592,668
Non-controlling interests 31 111,432 85,230 225,428
17 379,063 325,084 818,096
Total comprehensive income for the period attributable to :
Equity holders of the company 44,994 421,962 801,069
Non-controlling interests 80,486 118,663 263,817
125,480 540,625 1,064,886
Basic earnings per ordinary share (cents) 11 125.3 112.6 275.9
Diluted earnings per ordinary share (cents)(1) 12 125.3 111.8 275.9
Reconciliation of headline earnings
Unaudited for Unaudited for
% the six the six months
change months ended ended 30 Audited for the
2015 to 30 September September year ended 31
2016 2016 2015 March 2016
R'000 R'000 R'000
Profit for the period attributable to equity holders 12 267,631 239,854 592,668
Adjustment relating to earnings attributable to participating treasury shares (11,531) (11,260) (31,242)
Profit attributable to ordinary shareholders 12 256,100 228,594 561,426
Gross effect of gain on disposal of investment in equity accounted investee (18,206) (478) (475)
Tax effect of gain on disposal of investment in equity accounted investee 4,078 90 89
Non-controlling interest effect of gain on disposal of investment in equity accounted investee 1,978 171 170
Gross effect of gain on disposal of intangible assets(2) (1,954) - -
Non-controlling interest effect of gain on disposal of intangible assets 391 - -
Headline earnings 6 242,387 228,377 561,210
Headline earnings per ordinary share (cents) 5 118.5 112.5 275.8
Diluted headline earnings per ordinary share (cents)(1) 6 118.5 111.7 275.8
Cash dividend paid per ordinary share in respect of the previous year (cents) 50 150.0 100.0 150.0
Cash dividend per ordinary share declared subsequent to 31 March (cents) 3 155.0 150.0 155.0
Number of ordinary shares in issue ('000) 226,066 223,505 226,066
Treasury shares held ('000) 19,772 20,484 21,848
Weighted average number of ordinary shares in issue ('000) 204,462 203,021 203,465
Diluted weighted average number of ordinary shares in issue ('000)(1) 204,462 204,514 203,465
(1) Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding assuming conversion of all dilutive potential ordinary shares.
At reporting date there were no potentially dilutive ordinary shares still to be issued (2015: 1 520 442).
As at 30 September 2016 7 088 279 (2015: 8 521 281) participating treasury shares were excluded from the diluted weighted-average number of ordinary shares calculation because their
effect would have been anti-dilutive.
(2) No tax effect.
Condensed consolidated statement of financial position
Unaudited as at 30 Audited as at March
September 2016 2016
R'000 R'000
Assets
Non-current assets 7,705,080 8,003,468
Property, plant and equipment 131,112 91,085
Intangible assets 688,783 767,370
Investment in equity accounted investees 324,788 318,969
Investments linked to policyholder investment contracts 5,879,911 5,862,496
Financial investments 556,667 841,305
Loans and receivables 24,610 16,095
Deferred taxation 99,209 106,148
Current assets 23,620,301 20,750,978
Financial investments 689,379 2,499,193
Loans and receivables 83,628 28,871
Trade and other receivables 430,284 910,936
Amounts receivable in respect of stockbroking activities 20,554,920 14,625,911
Taxation 12,276 18,484
Cash and cash equivalents 1,849,814 2,667,583
Total assets 31,325,381 28,754,446
Equity and liabilities
Equity 3,447,407 3,775,534
Equity attributable to equity holders of the company 2,958,473 3,227,760
Non-controlling interests 488,934 547,774
Non-current liabilities 6,232,289 6,422,799
Policyholder investment contract liabilities 5,879,911 5,862,496
Interest-bearing borrowings 202,298 277,288
Loans and other payables 117,100 265,411
Deferred taxation 32,980 17,604
Current liabilities 21,645,685 18,556,113
Interest-bearing borrowings 272,008 49,751
Loans and other payables 161,200 108,506
Financial instrument liabilities 210,993 2,195,876
Trade and other payables 1,309,844 1,442,573
Amounts payable in respect of stockbroking activities 19,653,675 14,721,859
Taxation 37,965 37,548
Total equity and liabilities 31,325,381 28,754,446
Net tangible asset value per ordinary share (cents) 1,061.5 1,156.0
Net asset value per ordinary share (cents) 1,372.3 1,497.2
Condensed consolidated statement of changes in equity
Total capital and Non-controlling
reserves interests Total equity
R'000 R'000 R'000
Unaudited - 2016
Balance at 31 March 2016 3,227,760 547,774 3,775,534
Profit for the period 267,631 111,432 379,063
Other comprehensive income for the period (222,637) (30,946) (253,583)
Transactions with owners recorded directly in equity: (314,281) (139,326) (453,607)
Dividends paid(1) (316,538) (108,553) (425,091)
Share-based payments (19,971) - (19,971)
Disposal of participating treasury shares(2) 22,228 - 22,228
Repurchase and cancellation of shares of subsidiary - (30,773) (30,773)
Balance at 30 September 2016 2,958,473 488,934 3,447,407
Unaudited - 2015
Balance at 31 March 2015 2,660,901 569,382 3,230,283
Profit for the period 239,854 85,230 325,084
Other comprehensive income for the period 182,108 33,433 215,541
Transactions with owners recorded directly in equity: (286,180) (181,462) (467,642)
Dividends paid (304,531) (143,846) (448,377)
Share-based payments 8,021 - 8,021
Disposal of shares in subsidiary to non-controlling shareholders 10,330 5,371 15,701
Repurchase and cancellation of shares of subsidiary - (42,987) (42,987)
Balance at 30 September 2015 2,796,683 506,583 3,303,266
(1) Dividends paid to equity holders of the company relate to the 155 cents per share paid on the 8 August 2016.
(2) During the course of September 2016 2 076 000 shares were disposed of on behalf of the participants in the Citadel 2013 deferred remuneration scheme.
Condensed consolidated statement of cash flow
Unaudited for the Unaudited for the
six months ended six months ended
30 September 30 September
2016 2015
R'000 R'000
Cash flow from operating activities (774,308) (948,214)
Cash flow from operating activities excluding stockbroking activities 323,593 (145,095)
Cash dividends paid (425,091) (438,045)
Cash flow from stockbroking activities (672,810) (365,074)
Cash flow from investing activities (496,166) (158,317)
Cash flow from financing activities 533,320 425,354
Net decrease in cash and cash equivalents (737,154) (681,177)
Cash and cash equivalents at beginning of the period 2,667,583 2,459,337
Effects of exchange rate changes on cash and cash equivalents (80,615) 51,976
Cash and cash equivalents at end of the period 1,849,814 1,830,136
Segmental analysis
Interest and share
of profits from
equity accounted Profit from ordinary % change in headline
Total revenue investees activities(1) Headline earnings earnings
R'000 R'000 R'000 R'000 2015 to 2016
Unaudited for the six months ended 30 September 2016
Wealth and Asset Management 524,881 14,411 208,561 114,747 9
Wealth Management 417,591 6,878 120,246 82,870 1
Asset Management 107,290 7,533 88,315 31,877 38
Broking and Structuring 422,004 24,960 130,874 62,791 22
Stenham 262,706 8,306 79,041 56,259 28
Advisory - 20,338 20,338(2) 17,491 48
Total from operating reportable segments 1,209,591 68,015 438,814 251,288 18
Group 50,509 4,063 25,923 4,164 -88
1,260,100 72,078 464,737 255,452 4
Unaudited for the six months ended 30 September 2015
Wealth and Asset Management 447,100 22,266 177,427 105,178
Wealth Management 370,266 15,893 114,911 82,001
Asset Management 76,834 6,373 62,516 23,177
Broking and Structuring 415,386 25,016 127,438 51,410
Stenham 276,258 361 57,632 43,902
Advisory - 13,768 13,768(2) 11,841
Total from operating reportable segments 1,138,744 61,411 376,265 212,331
Group 38,060 33,458 44,219 33,414
1,176,804 94,869 420,484 245,745
Note : Group funding costs are disclosed as part of "group" and have not been allocated to the underlying operating reportable segments.
(1) Profit from ordinary activities is synonymous with profit before taxation and capital items per reconciliation of segmental analysis to statement of comprehensive income.
(2) Represents 50% of profit after taxation.
Reconciliation of segmental analysis to statement of comprehensive income
Total from
Wealth and operating
Asset Broking and reportable Non-reportable IFRS reported
Management(1) Structuring Stenham(1) Advisory segments Group segments(2) information
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
For the six months ended 30 September 2016
Total revenue per segmental analysis 524,881 422,004 262,706 - 1,209,591 50,509 - 1,260,100
Reconciling items: (37,932) 21,445 - - (16,487) (68,541) 126,436 41,408
Operating revenue - internal (39,794) 23,568 - - (16,226) - - (16,226)
Investment income - internal 1,862 (2,123) - - (261) (68,541) 68,802 -
Investment income of non-reportable segment - external - - - - - - 57,634 57,634
Total revenue per statement of comprehensive income 486,949 443,449 262,706 - 1,193,104 (18,032) 126,436 1,301,508
Profit before taxation and capital items per segmental analysis 208,561 130,874 79,041 20,338 438,814 25,923 - 464,737
Reconciling total revenue items per above (37,932) 21,445 - - (16,487) (68,541) 126,436 41,408
Operating expenses of non-reportable segment - external (1,862) - - - (1,862) - (28,123) (29,985)
Deferred profit participation(3) (6,154) - - - (6,154) - - (6,154)
Share based payment charge(3) (5,702) - - - (5,702) - - (5,702)
Interest paid - internal - 379 - - 379 - - 379
Interest paid - external (3,721) - - - (3,721) - - (3,721)
Profit before taxation and capital items per statement of comprehensive income 153,190 152,698 79,041 20,338 405,267 (42,618) 98,313 460,962
For the six months ended 30 September 2015
Total revenue per segmental analysis 447,100 415,386 276,258 - 1,138,744 38,060 - 1,176,804
Reconciling items: (28,163) (15,199) - - (43,362) (28,543) 98,017 26,112
Operating revenue - internal (27,748) (12,709) - - (40,457) - - (40,457)
Investment income - internal (415) (2,490) - - (2,905) (28,543) 31,448 -
Investment income of non-reportable segment - external - - - - - - 66,569 66,569
Total revenue per statement of comprehensive income 418,937 400,187 276,258 - 1,095,382 9,517 98,017 1,202,916
Profit before taxation and capital items per segmental analysis 177,427 127,438 57,632 13,768 376,265 44,219 - 420,484
Reconciling total revenue items per above (28,163) (15,199) - - (43,362) (28,543) 98,017 26,112
Operating expenses of non-reportable segment - external - - - - - - (30,159) (30,159)
Share based payment charge(3) (8,021) - - - (8,021) - - (8,021)
Interest paid - internal - 2,185 - - 2,185 - - 2,185
Profit before taxation and capital items per statement of comprehensive income 141,243 114,424 57,632 13,768 327,067 15,676 67,858 410,601
(1) The capital item of R21 million disclosed on the statement of comprehensive income pertains partly to the Wealth and Asset Management operating reportable segment (R19 million) and
partly to the Stenham operating reportable segment (R2 million).
(2) Refers to the group's consolidated proprietary hedge investments which do not meet the quantitative thresholds for determining reportable segments.
(3) Management treats the 2013 deferred profit scheme 1 (which is settled in PGR shares) as an expense as profits are earned, but for IFRS purposes, it is a share-based payment arrangement,
in which the grant date fair value is recognised over the vesting period. In addition, management treats the 2015 deferred profit scheme 2 (which is partially settled in PGR shares) as
an expense as profits are earned, but for IFRS purposes it is recognised as an employee benefit in terms of IAS 19 and partially as a share-based payment arrangement under IFRS 2,
in which the liability has been measured using the projected unit method. Service conditions attached to the arrangement were taken into account in measuring the fair value of the liability.
The expense is recognised over the service period.
Notes & Compliance
The condensed consolidated unaudited interim financial statements of the Peregrine Group as at and for the six months ended 30 September 2016 comprise the company
and its subsidiaries ("the Group") results and the Group's interests in equity accounted investees.
Basis of preparation
The condensed consolidated unaudited interim financial statements are prepared in accordance with and containing the information required by IAS 34: Interim Financial
Reporting, as well as the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by Financial
Reporting Standards Council, the JSE Limited Listings Requirements and the requirements of the Companies Act of South Africa. The accounting policies applied in the preparation
of the condensed consolidated financial statements are in terms of International Financial Reporting Standards and are consistent with those applied in the previous consolidated
financial statements as at and for the year ended 31 March 2016.
In preparing these condensed consolidated unaudited interim financial statements management made judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. The significant judgements made
by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial
statements as at and for the year ended 31 March 2016.
The Group's results are prepared under the supervision of R E Katz CA (SA), the Group Chief Financial Officer.
These financial statements have not been reviewed or reported on by the company's auditors, Deloitte & Touche.
The prior year audited results are a summary of the consolidated financial statements as at and for the year ended 31 March 2016, which were prepared under the
supervision of R E Katz CA (SA), the Group Chief Financial Officer. A copy of these financial statements can be obtained from the issuer's registered office.
Auditor's report for the year ended 31 March 2016
The consolidated and separate financial statements of Peregrine Holdings Limited ("Peregrine") for the year ended 31 March 2016 have been audited by the company's
previous auditor, KPMG Inc. In their report dated 12 August 2016, which is available for inspection at the Company's Registered Office, KPMG Inc. state that their audit was
conducted in accordance with the International Standards on Auditing and have expressed an unmodified conclusion on the consolidated and separate financial statements
of Peregrine.
Acquisitions
1. Peregrine's shareholding in Stenham increased from 85.08% to 88.19% in August 2016 following the repurchase and subsequent cancellation of 24 815 Stenham shares.
Disposals
1. Stenham Trust Limited ("Stenham") entered into a final agreement whereby an independent Trust and Fiduciary company and Stenham have formed a 50/50 joint venture
("JV"), with effect from 1 April 2016. Stenham has transferred to the JV, that part of its fiduciary trust business that includes the relationships and engagements with the trusts
and trust structures managed by Stenham that relate to the gaming business and its entire fiduciary trust business relating to certain Family Office clients for a total
aggregate cash consideration of GBP1 million, payable in four equal bi-annual instalments of GBP250 000 over the two years ending 31 March 2018. A non-taxable capital profit of
R2 million (GBP101 471) has been recognised in the Statement of Comprehensive Income.
2. With effect from 1 April 2016, Peregrine SA Holdings Proprietary Limited disposed of its 49.99% shareholding in Caveo Fund Solutions Proprietary Limited for a cash
consideration of R20 million, resulting in a gross capital profit of R19 million which has been recognised in the Statement of Comprehensive Income, of which R18 million is
attributable to ordinary shareholders.
Consolidation of Hedge Funds in terms of IFRS 10
In terms of current International Financial Reporting Standards certain of the group's proprietary hedge fund investments are required to be consolidated due to the fact that
the group has effective control both in terms of kick-out rights and with direct and indirect holdings being greater than 50%. In cases which fall within or along the IFRS 10
marginal zone a reasoned judgement as to whether the fund manager is a principal or an agent is required to be made by management, one such case being the Peregrine
High Growth En Commandite Partnership ("High Growth Fund"), in which the group held an interest as at 31 March 2016 which required consolidation. Following
management's assessment for the six month period ended 30 September 2016, management concluded that control no longer existed as the group currently owns a smaller
percentage of the whole fund and as a result now falls outside the IFRS 10 marginal zone. Thus the High Growth Fund was de-consolidated with effect from 31 August 2016,
the net asset value of which amounted to R2.4 billion (March 2016: R1.9 billion).
Events subsequent to reporting date
The directors are not aware of any matters or circumstances arising since the end of the reporting period which significantly affect the financial position of the Peregrine
Group or the results of its operations.
Applicable exchange rates
Average rates Closing rates
USD:ZAR
30 September 2016 14,53 13,75
31 March 2016 13,78 14,71
30 September 2015 12,55 13,83
GBP:ZAR
30 September 2016 19,98 17,86
31 March 2016 20,72 21,14
30 September 2015 19,33 20,94
This announcement does not include the information required pursuant to paragraph 16A(j) of IAS34. The full interim report is available on the issuer's website, at the
issuer's registered offices and upon request.
Date: 17/11/2016 07:05:00 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
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
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information disseminated through SENS.