Wrap Text
Unaudited Condensed Consolidated Interim Results
for the Six Months Ended 30 September 2016
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")
Unaudited Interim Results
for the Six Months Ended 30 September 2016
Highlights
- Shareholders Approved the Proposed Transaction with Stellar Capital
Partners on 28 October 2016
- Local assets under management of R77.0 billion (September 2015: R67.4 billion)
- Local third party assets under administration of R83.0 billion
(September 2015: R64.1 billion) and offshore assets under administration of
EUR673.3 million (September 2015: EUR481.4 million)
- Earnings attributable to ordinary shareholders from continuing
operations of R15.2 million (September 2015: R12.7 million) with earnings
attributable to ordinary shareholders from discontinued operations of
R38.3 million (September 2015: R48.9 million)
- Headline earnings per share from continuing operations of 0.95 cents per
share (September 2015: 0.80 cents per share)
- Headline earnings per share from discontinued operations of 2.39 cents per
share (September 2015: 3.05 cents per share)
- Interim gross dividend of 2.25 cents per share (September 2015: 2.85 cents per
share)
Notes to the unaudited condensed consolidated interim
financial statements
Basis of preparation and accounting policies
Statement of compliance
The interim financial statements are prepared in accordance with
International Financial Reporting Standard (IFRS), IAS 34 Interim Financial
Reporting, the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued
by the Financial Reporting Standards Council, the requirements of the
Companies Act 71 of 2008 of South Africa and the JSE Listings
Requirements. The unaudited condensed consolidated interim financial
statements do not include all of the information required for full annual
financial statements. These unaudited condensed consolidated interim
financial statements have been prepared in accordance with the historical
cost basis except for certain financial instruments and investment property
which are stated at fair value. The unaudited condensed consolidated interim
financial statements are presented in Rand, rounded to the nearest thousand.
The accounting policies applied in the presentation of the unaudited
condensed consolidated financial statements are in accordance with
International Financial Reporting Standards and are consistent with those
presented in the previous annual financial statements.
These unaudited condensed consolidated interim financial statements were
prepared under the supervision of the financial director, Michael Buckham,
CA (SA), and have not been audited or reviewed by Prescient's external
auditors. The Board of Directors approved these financial statements on
13 December 2016.
Judgements and estimates
Preparing the unaudited condensed consolidated interim 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 expense. Actual results may differ from
these estimates.
In preparing these unaudited condensed consolidated interim 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 consolidated financial statements as at
and for the year ended 31 March 2016.
Related party transactions
Prescient Limited and its subsidiaries ("the Group" or "the Company"), in the
ordinary course of business, entered into various intercompany transactions
with related parties. There were no additional significant related party
transactions during the interim period. The Company has related party
relationships with subsidiaries, associates and with its key management
personnel. There were no significant changes to these relationships, as
disclosed at 31 March 2016, during the interim period reported on at
30 September 2016.
Subsequent events
On 28 October 2016, a General Meeting of shareholders, followed by a
Scheme Meeting, approved the proposed transaction with Stellar Capital
Partners, subject to certain conditions precedent. Shareholders will be
appropriately advised once these conditions have been met. Further
information relating to the approval of the proposed transaction is included
under the review of operations.
With the exception of the item above, there were no material events
subsequent to the reporting date.
Review of operations
During the period under review, Prescient Limited shareholders approved the
proposed transaction with Stellar Capital Partners, as set out in the circular
posted on 30 September 2016. This shareholder approval was obtained at
the General Meeting of shareholders and Scheme Meeting held on 28 October
2016. Following this approval by shareholders the transaction is expected to
be completed once all conditions precedent are satisfied and the transaction
becomes unconditional. These conditions mostly include regulatory
approvals for group entities that require approval for change in shareholdings.
All these applications are currently being assessed by the respective
regulators, which include, but are not limited to, the Central Bank of Ireland,
the Financial Services Board and the Jersey Financial Services Commission.
Approvals already granted, which were conditions precedent to the
transaction, included Competition Commission approval and the successful
registration of the relevant company documents with the Companies and
Intellectual Properties Commission. Although we do acknowledge that this
has been a lengthy process for the Company and its shareholders, we strongly
believe that these approvals will be achieved in the short term and the
completion of the transaction will follow soon thereafter.
The proposed transaction includes a subscription of Prescient Holdings
Proprietary Limited ("Prescient Holdings") "B" ordinary shares by Stellar
Capital to an amount of R1.427 billion. Following the subscription, Prescient
will declare a distribution of the same amount to its shareholders. The
application of the distribution will be implemented by way of a scheme with
Prescient shareholders in terms of the Companies Act. Upon implementation
of the scheme, the Prescient distribution will be applied on behalf of Prescient
shareholders, based on their elections, to either receive the distribution in
cash, subscribe for Stellar Capital shares or reinvest into Prescient Holdings
and its subsidiaries ("PFH") by purchasing "B" ordinary shares from Stellar
Capital. Subsequent to the completion of the transaction, PFH will no longer
form part of Prescient Limited. Prescient Limited will be renamed to PBT
Group Limited to better reflect the ongoing operations and strategic vision of
the Company.
From an accounting point of view, the proposed transaction results in an
effective disposal of PFH and, in terms of IFRS 5 Non-current assets held for
sale and discontinued operations, it was determined that the requirements of
this standard have been satisfied in order to reclassify PFH in the consolidated
statements of financial position as a non-current asset held for sale and in the
consolidated statements of profit or loss and other comprehensive income as
a discontinued operation. The disposal of PFH is considered to be highly
probable following the approval by the Company's shareholders and only
regulatory approval remains as outstanding conditions precedent.
Consequently the assets and liabilities of PFH are disclosed as assets and
liabilities held for sale under current assets in the consolidated statement of
financial position, and the income and expenses associated with PFH are
disclosed as profits from discontinued operations in the consolidated
statement of profit or loss and other comprehensive income. The comparative
profit from PFH for the prior year has been restated to reflect as profits from
discontinued operations in the prior year.
The corresponding earnings per share and headline earnings per share have
also been reflected as a split between continuing and discontinued operations.
Total income from continuing operations for the period was R297.3 million
(September 2015: R264.5 million) with profit before tax from continuing
operations being R23.4 million (September 2015: R24.3 million). Headline
earnings per share was 3.34 cents per share (September 2015: 3.85 cents
per share) whilst headline earnings per share from continuing operations was
0.95 cents per share (September 2015: 0.80 cents per share) and headline
earnings per share from discontinued operations was 2.39 cents per share
(September 2015: 3.05 cents per share).
The decrease in headline earnings in comparison to the September 2015
interim period can be attributed to significant performance fee income earned
on the Prescient China Balanced Fund in the prior reporting period as well as
an increase in expenditure associated with the restructure of the Group in
relation to the transaction with Stellar Capital.
The weighted average number of shares in issue for the six months ended
30 September 2016 was 1 601 763 111 (September 2015: 1 600 060 980)
Information Management Services
Total revenue for the six months ended 30 September 2016 amounted to
R292.6 million compared to R258.8 million for the corresponding period
ending 30 September 2015. Profit before tax amounted to R23.3 million
(September 2015: R23.3 million). The business continues to operate well
despite the general challenging environment. Except for the Africa/ Middle-
East component of the business, all segments showed solid growth in both
revenue and profitability. The demand for our services remains strong and this
should continue for the foreseeable future. The Africa/ Middle-East operation
produced satisfactory revenue, but profitability is still negatively affected by
the challenges experienced in a fixed price environment. A substantial interest
expense resulted from the ongoing negative payment culture in this region.
Repatriation of funds to South Africa remains problematic in some areas.
Financial Services
The Financial Services segment results are recognised in profit from
discontinued operations of R36.6 million (September 2015: R56.9 million),
aside from an immaterial component of profits derived from Prescient Capital
Proprietary Limited. Headline earnings per share from discontinued operations
was 2.39 cents per share (September 2015: 3.05 cents per share).
Refer to the note on Discontinued Operations for further information.
The focus in the most recent interim period in Prescient Investment
Management ("PIM") has been on improving performance across all
mandates. Prescient Income Provider Fund continued to perform well against its
benchmark and peers and this reflected in the significant growth achieved in
this mandate in the retail and institutional space. This was a core driver of the
growth in AUM over the period from R74.2 billion at 31 March 2016 to R77.0
billion at 30 September 2016. There has been focus, however, on other
mandates and this was reflected in strong performance in the Prescient
Positive Return Fund. Refinement of the equity process continues and this is
expected to supplement the balanced mandates in the near future.
PIM continued to seek opportunities in the renewable energy space with a
number of initiatives getting closer to fruition in the fuller investment of the
Prescient Evolution Clean Energy and Infrastructure Debt Fund. The AUM of
the fund has grown and many of the projects should come on line in the latter
half of the financial year.
As has been communicated in various SENS announcements during the most
recent period, PIM continues to make good progress in structuring a
meaningful BEE transaction. No agreements have been concluded with
respect to a BEE transaction but the various options are being explored to
ensure that it is value-enhancing.
The Prescient Optimised Income Fund has also started gaining traction after
a low-key introduction in the market. The growth in the fund has been steady,
although it is expected to contribute strongly as we believe it should enhance
our clients' overall portfolio, particularly in the retail space.
Prescient Investment Management China Limited continued to operate
well from a performance perspective, achieving extremely strong peer
comparative returns in a very competitive space. The Shanghai-based team
has adapted well to the new environment and the close proximity to the
relevant market will provide a strong base for the future. The fund has been
marketed well in Europe and, although this has resulted in a high level of
expenditure in that division, it is important that wider markets are sought for
the future growth of the fund.
EMHPrescient in Namibia continues to work hard at growing its client base in
a competitive, yet small market. The business is growing beyond break-even
but it still requires a significant growth in AUM before it contributes
meaningfully to group profitability.
Prescient Fund Services ("PFS") continues to grow organically at an
encouraging rate. The local third party assets under administration ("AUA")
have grown from R67.6 billion at 31 March 2016 to R83.0 billion at
30 September 2016.
The growth in AUA can be mostly attributed to new segregated administration
mandates signed, however a very strong growth area is the alternative
administration area that focuses on regulated and unregulated hedge fund
administration and private equity administration. The growth in AUA in this
business unit has been very strong and that should continue as new mandates
representing additional AUA are yet to be implemented.
The traditional asset accounting and transfer agency work has also grown at
a good pace and the white label unit trust business continues to grow as new
funds are launched and white label clients grow their own portfolios
organically.
There is always a requirement for the service offerings to expand into a more
comprehensive range and this is always associated with additional consulting
and staff costs. Positive operating leverage, however, has resulted in
increased profitability.
Prescient Fund Services Ireland has also grown its AUA and a strong
feature has been the growth in offshore offerings from local white label clients
in South Africa. This is a good example of the business opportunities that
exist from cross selling opportunities within the group.
The Prescient Life team continues to work extremely hard at sourcing new
business across the full range of life and retirement products, however the
long lead time for these new lines has resulted in disappointing growth in
policyholder assets. There are many initiatives that are close to finalisation,
however the delay in implementation has created pressure on earnings.
Furthermore, the higher regulatory and compliance demands that have been
brought on by the SAM environment have resulted in an allocation of
resourcing to these reporting requirements. The new lines have also required
substantial system development time and resources which has created
pressure on the expense line.
Despite these challenges in Prescient Life the company remains very well
capitalised with a suite of products that is comprehensive and compelling.
Prescient Securities has regained traction in terms of both revenue and
profitability. This revenue growth is associated with a rejuvenated focus on
bolstering its research offering as well as supporting execution capabilities
across all asset-classes. Prescient Securities continues to box well-above its
weight in both respects, by design.
Prescient Securities concluded two BEE transactions during the period under
review placing it in the position of being one of the only rated full-service BEE
stockbrokers in South Africa.
These transactions resulted in 51% of the ordinary equity of Prescient
Securities being held by third party black shareholders, with effect from 1 July
2016. Although this is a significant transaction for Prescient Securities in
terms of its ongoing strategy to become empowered, there were no material
accounting consequences to be recorded in the current interim reporting
period.
The transaction is encouraging in terms of the additional opportunities the
partners bring to the business of stockbroking. On the back of the transaction
and improved empowerment credentials, Prescient Securities was admitted
to the prestigious ASISA Equity Broking programme.
Prescient Securities also continued to achieve positive ratings in the Spire
Awards, held in Johannesburg in October. The awards give recognition to
participants in the fixed income and forex markets.
Here, they received recognition in the following categories:
- #3 - Best Agency Broker House - Bonds
- #1 - Best Agency Broker House - Listed interest rate derivatives
- #2 - Best Agency Broker House - Listed FX derivatives
Prescient Wealth has turned the corner under new leadership and we are
confident that 2017 will produce an improved performance.
Dividend
An interim gross dividend of 2.25 cents per share, in respect of the six months
ended 30 September 2016, was declared on 13 December 2016.
Biannually, the directors consider the payment of a dividend, 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.
There are 1 669 250 950 shares in issue at the dividend declaration date, of
which 30 583 292 are held as treasury shares. The total dividend amount
payable is R37.6 million (30 September 2015: R47.5 million).
This is a dividend as defined in the Income Tax Act, 1962, and is payable from
income reserves. Dividends are subject to a 15% Dividends Tax (DT) which
is a withholding tax levied on non-exempt shareholder recipients of the
dividend. The net dividend payable to shareholders who are subject to
dividend tax is 1.9125 cents per share, while it is 2.25 cents per share to those
shareholders who are exempt from dividend tax. Prescient's income tax
reference number is 9725/148/71/3.
In compliance with the listing requirements of the JSE Limited, the following
dates are applicable:
EVENT Date
Last day to trade cum-dividend Tuesday, 10 January 2017
Shares trade ex-dividend Wednesday, 11 January 2017
Record date Friday, 13 January 2017
Payment date Monday, 16 January 2017
Share certificates may not be dematerialised or re-materialised between
Wednesday, 11 January 2017 and Friday, 13 January 2017, both dates
inclusive.
Prospects
Financial Services
A significant portion of the Financial Services segment will be distributed to
shareholders by way of a distribution. Because of the transactions set out
in the circular, PFH will no longer be part of Prescient Limited and therefore
it will be held as an unlisted entity by Stellar Capital, Prescient staff and
management, Prescient Empowerment Trust and other minority
shareholders. The ultimate holding percentages of each of the parties listed
above will be dependent on the elections made prior to the completion of the
transaction.
Apart from the change in shareholding as contemplated above, the day to
day management of PFH will remain the same as it was before. The unlisted
entity will be strengthened by a new shareholder in Stellar Capital which will
result in access to new markets. Importantly, PFH will continue to advance
the current discussions relating to a BEE transaction at PIM level.
Information Management Services
The distribution of PFH will result in the remaining holdings of the listed entity
being Information Management Services operations and private equity and
property assets in Prescient Capital. The listed entity will be renamed PBT
Group Limited to more accurately reflect the changed nature of the dominant
services offered by the remaining businesses.
It is intended that the assets held by Prescient Capital will be realised for
cash, which will be utilised to recapitalise PBT Group Limited for the ongoing
funding of the Information Management Services' operations as they grow
and seek new opportunities.
This rationalisation of the business will ensure that PBT Group Limited
continues to operate efficiently within the listed environment and allows the
business to generate appropriate returns for its shareholders.
Changes to Management and the Board of Directors
There were a number of changes to the Board during the period and
subsequent to the end of the period under review.
Heather Sonn resigned as a member of the Board and as an Audit Committee
member on 31 July 2016.
Furthermore, Michael Buckham resigned from his position of Financial
Director with effect from 1 February 2017. Murray Louw, the current
Chairman of Prescient Limited, has been appointed as the Financial Director
with effect from 1 February 2017.
The Board is pleased to announce the appointment of Willem Venter as the
Chief Executive Officer of PFH. Willem has 10 years of service in the
Prescient Group and with his positive energy and strategic thinking he will
add growth and scalability to PFH. The Board wishes him well in his new
role.
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 auditors.
Company information
Directors: AM Louw (Chairman), H Steyn (CEO),
M Buckham (Financial Director), Z Meyer
(Lead Independent Non-executive), K Moloko
(Independent non-executive),
R van Rooyen (Non-executive)
Registered office: Prescient House, Westlake Business Park,
Otto Close, Westlake, 7945, South Africa
Postal address: PO Box 31142, Tokai, 7966
Registration number: 1936/008278/06
Auditors KPMG Inc.
Sponsor Bridge Capital Advisors Proprietary
Limited
Transfer secretaries: Link Market Services
JSE share code: PCT
ISIN: ZAE000163531
Website: www.prescient.co.za
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Six months
Six months unaudited
unaudited 30 Sep 15
30 Sep 16 % Restated
Continuing operations Notes R'000 Change R'000
Total income 297,316 12 264,533
Expenses (271,268) 14 (238,088)
Profit from operations 26,048 (2) 26,445
Other income 505 851
Share of loss of equity-accounted investees (net of tax) - (1,116)
Finance costs (3,116) (1,846)
Profit before taxation 23,437 (4) 24,334
Income tax expense (5,174) (8,621)
Profit from continuing operations 18,263 16 15,713
Discontinued operations
Profit from discontinued operations, (net of tax) 1.1 36,576 56,941
Profit for the period 54,839 (25) 72,654
Other comprehensive income
Items that are or may be reclassified to profit or loss
Foreign currency translation differences - foreign operations (11,011) 15,353
Other comprehensive income for the period, net of tax (11,011) 15,353
Total comprehensive income for the period 43,828 (50) 88,007
Profit attributable to:
Owners of the Company 54,632 (12) 62,391
Non-controlling interests 207 10,263
Profit for the period 54,839 (25) 72,654
Total comprehensive income attributable to:
Owners of the Company 46,549 (40) 77,744
Non-controlling interests (2,721) 10,263
Total comprehensive income for the period 43,828 (50) 88,007
Earnings per share (cents)
- Continuing operations 0.95 19 0.80
- Discontinued operations 2.39 (22) 3.05
Diluted earnings per share (cents)
- Continuing operations 0.95 19 0.80
- Discontinued operations 2.39 (22) 3.05
Notes to the statement of comprehensive income
Headline earnings per share (cents)
- Continuing operations 0.95 19 0.80
- Discontinued operations 2.39 (22) 3.05
Diluted headline earnings per share (cents)
- Continuing operations 0.95 19 0.80
- Discontinued operations 2.39 (22) 3.05
Dividend per share (cents)
Interim 2.25 (21) 2.85
EARNINGS PER SHARE
Unaudited
Unaudited 30 Sep 2015
30 Sep 2016 Restated
Shares
Actual number of shares in issue at the end of the period 1,669,250,950 1,667,461,093
Weighted average number of shares in issue at the end of the period 1,601,763,111 1,600,060,980
Weighted average number of treasury shares 30,424,957 29,137,952
Weighted average number of forfeitable share plan shares 37,062,882 21,779,756
Reconciliation of headline earnings R'000 R'000
Continuing operations
Earnings attributable to shareholders 18,263 15,713
Non-controlling interests (2,784) (2,770)
Earnings attributable to forfeitable share plan shareholders (328) (224)
Earnings attributable to ordinary shareholders 15,151 12,719
Headline earnings attributable to ordinary shareholders 15,151 12,719
Discontinued operations
Earnings attributable to shareholders 36,576 56,941
Non-controlling interests 2,577 (7,493)
Earnings attributable to forfeitable share plan shareholders (885) (599)
Earnings attributable to ordinary shareholders 38,268 48,849
Headline earnings attributable to ordinary shareholders 38,268 48,849
Unaudited condensed consolidated segment report
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 Sep 2016 30 Sep 2015 31 Mar 2016
Notes R'000 R'000 R'000
Assets
Non-current assets 408,422 10,822,375 11,667,621
Property and equipment 24,617 27,877 29,241
Investment property 32,612 29,953 35,728
Goodwill and intangible assets 320,918 414,622 397,960
Deferred tax asset 7,746 10,937 14,197
Long-term loans and other receivables 497 52,386 54,186
Investment in equity-accounted investees 289 13,811 9,658
Financial assets at fair value through profit or loss 21,743 159,704 151,439
Linked investments backing policyholder funds - 10,113,085 10,975,212
Current assets 12,900,339 491,949 1,077,824
Inventory 45,106 41,025 35,688
Trade and other receivables 144,210 224,744 214,959
Amounts owing by clients and clearing houses - 73,565 621,963
Taxation receivable 24,278 25,840 13,623
Cash and cash equivalents 14,753 126,775 191,591
Assets held-for-sale 1.3 12,671,992 - -
Total assets 13,308,761 11,314,324 12,745,445
Equity
Stated capital 748,130 665,969 667,660
Reserves 601 8,466 7,066
Retained income 173,060 151,507 152,451
Total equity attributable to owners of the Company 921,791 825,942 827,177
Non-controlling interests 21,445 22,932 24,064
Total equity 943,236 848,874 851,241
Liabilities
Non-current liabilities 21,979 10,138,570 11,018,427
Deferred tax liability 13,240 13,946 13,548
Policyholder investment contract liabilities - 10,113,085 10,974,330
Loans payable 8,739 11,539 30,549
Current liabilities 12,343,546 326,880 875,777
Trade and other payables 39,209 112,556 106,393
Amounts owing to clients and clearing houses - 71,712 620,802
Loans payable 1,157 62,943 9,377
Current tax payable 3,023 6,921 44,126
Bank overdraft 36,493 72,748 95,079
Liabilities held-for-sale 1.3 12,263,664 - -
Total liabilities 12,365,525 10,465,450 11,894,204
Total equity and liabilities 13,308,761 11,314,324 12,745,445
UNAUDITED CONDENSED CONSOLIDATED SEGMENT REPORT
Financial Services
Six months unaudited Six months unaudited
30 Sep 16 30 Sep 15
R'000 R'000
Continuing Discontinued Continuing Discontinued
Segment external total income 4,730 200,894 5,727 187,104
Segment profit before tax 186 53,192 1,004 69,112
Segment assets * 74,620 12,604,668 10,686,121 -
Segment liabilities (8,537) (12,263,664) (10,359,980) -
Information Management Services
Six months unaudited Six months unaudited
30 Sep 16 30 Sep 15
R'000 R'000
Continuing Discontinued Continuing Discontinued
Segment external total income 292,586 - 258,806 -
Segment profit before tax 23,251 - 23,330 -
Segment assets * 253,854 - 235,093 -
Segment liabilities (93,324) - (105,470) -
Group
Six months unaudited Six months unaudited
30 Sep 16 30 Sep 15
R'000 R'000
Continuing Discontinued Continuing Discontinued
Group external total income 297,316 200,894 264,533 187,104
Group profit before tax 23,437 53,192 24,334 69,112
Segment assets * 328,474 12,604,668 10,921,214 -
Segment liabilities (101,861) (12,263,664) (10,465,450) -
* Goodwill is not managed as part of segment assets, and has therefore been excluded
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share-
based Non-
Stated Translation Treasury Payment Retained Controlling Total
R'000 capital reserve shares reserve income Total interests equity
Balance at 1 April 2014 664,701 6,414 (14,501) 801 138,576 795,991 14,140 810,131
Total comprehensive income
for the period
Profit for the period - - - - 62,391 62,391 10,263 72,654
Total other comprehensive
income - 15,353 - - - 15,353 - 15,353
Total comprehensive income
for the period - 15,353 - - 62,391 77,744 10,263 88,007
Transactions with owners
recognised directly in equity
Contributions by and
distributions to owners of the
Company
Treasury shares bought - - (203) - - (203) - (203)
Dividends declared during the
period - - - - (49,460) (49,460) (1,471) (50,931)
Issue of ordinary shares 1,268 - - - - 1,268 - 1,268
Equity-settled share-based
payments - - - 602 - 602 - 602
Total contributions by and
distributions to owners of the
Company 1,268 - (203) 602 (49,460) (47,793) (1,471) (49,264)
Total transactions with
owners of the Company 1,268 15,353 (203) 602 12,931 29,951 8,792 38,743
Balance at 30 September 2015 665,969 21,767 (14,704) 1,403 151,507 825,942 22,932 848,874
Balance at 1 April 2016 667,660 20,899 (16,576) 2,743 152,451 827,177 24,064 851,241
Total comprehensive income
for the period
Profit for the period - - - - 54,632 54,632 207 54,839
Total other comprehensive
income - (8,083) - - - (8,083) (2,928) (11,011)
Total comprehensive income
for the period - (8,083) - - 54,632 46,549 (2,721) 43,828
Transactions with owners
recognised directly in equity
Contributions by and
distributions to owners of the
Company
Treasury shares bought - - 160 - - 160 - 160
Dividends declared during the
period - - - - (31,716) (31,716) (2,205) (33,921)
Issue of ordinary shares 80,470 - - - - 80,470 - 80,470
Equity-settled share-based
payments - - - 1,458 - 1,458 - 1,458
Total contributions by and
distributions to owners of the 80,470 - 160 1,458 (31,716) 50,372 (2,205) 48,167
Company
Changes in ownership
interest in subsidiaries
Acquisition of NCI without a
change in control - - - - (2,307) (2,307) 2,307 -
Total changes in ownership
interest in subsidiaries - - - - (2,307) (2,307) 2,307 -
Total transactions with
owners of the Company 80,470 - 160 1,458 (34,023) 48,065 102 48,167
Balance at 30 September 2016 748,130 12,816 (16,416) 4,201 173,060 921,791 21,445 943,236
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six months Six months
unaudited unaudited
30 Sep 2016 30 Sep 2015
R'000 R'000
Cash flows from operating activities
Profit for the period 54,839 72,654
Income tax expense 21,789 20,792
Non-cash movements and adjustments to profit before tax (297,590) (445,430)
Changes in working capital (6,748) (11,156)
Cash generated from policyholder activities 301,564 449,466
Dividends received 2,487 1,283
Dividends paid (33,921) (50,931)
Interest received 13,295 9,499
Interest paid (6,937) (4,297)
Tax paid (45,156) (35,599)
Net cash inflow from operating activities 3,622 6,281
Cash flow from investing activities
Acquisition of property and equipment (10,275) (3,830)
Acquisition of intangible assets (1,709) (4,427)
Investment in equity-accounted investee - (11)
Advance of long-term loans receivable (9,788) (512)
Acquisition of financial assets at fair value (79,349) (369)
Net cash outflow from investing activities (101,121) (9,149)
Cash flow from financing activities
(Sale)/acquisition of own shares (160) 203
Issue of shares 80,470 -
Increase/(decrease) in loans payable 5,710 (318)
Cash inflow/(outflow) from financing activities 86,020 (115)
Net decrease in cash and cash equivalents (11,479) (2,983)
Effect of exchange rate fluctuations on cash held (9,916) 7,742
Net cash and cash equivalents at the beginning of the period 96,512 49,268
Net cash and cash equivalents at the end of the period 75,117 54,027
Comprising
Cash and cash equivalents 167,842 126,775
Bank overdraft (92,725) (72,748)
Net cash and cash equivalents at the end of the period 75,117 54,027
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Discontinued operations
In October 2016 shareholders approved the distribution of Prescient Holdings Proprietary Limited and all its subsidiaries ("PFH") to shareholders as per the
proposed transaction with Stellar Capital as communicated to shareholders in the Circular posted on 30 September 2016. This approval constituted a
decision to effectively sell the PFH businesses out of Prescient Limited and therefore required the disclosure of PFH as discontinued operations. The
details of the results of the discontinued operations are included in this note.
PFH was not previously classified as held-for-sale or as a discontinued operation. The comparative condensed consolidated statement of profit or loss and
other comprehensive income has been restated to show discontinued operations separately from continuing operations.
For the six months
ended 30 September
2016 2015
1.1 Results of discontinued operations R'000 R'000
Revenue 201,800 187,700
Expenses (148,608) (118,588)
Results from operating activities 53,192 69,112
Income tax (16,616) (12,171)
Results from operating activities, net of tax 36,576 56,941
Profit for the period from discontinued operations of R39.15 million (2015: R49.45 million) was attributable to the owners of the Company. Of the profit
from continuing operations of R18.26 million (2015: R15.71 million), an amount of R15.48 million was attributable to the owners of the company
(2015: R12.94 million).
For the six months
ended 30 September
2016 2015
1.2 Cash flows from/(used in) discontinued operations R'000 R'000
Net cash from operating activities 49,996 18,424
Net cash (used in)/from investing activities (84,812) 16,163
Net cash from/(used in) financing activities 23,478 (31,221)
Net cash flow for the period (11,338) 3,366
2016
1.3 Major classes of assets and liabilities classified as held for sale R'000
Property and equipment 7,719
Goodwill and intangibles 75,333
Deferred tax assets 8,856
Long-term loans and other receivables 63,477
Investment in equity-accounted investees 3,005
Financial assets at fair value through profit or loss 221,078
Linked investments backing policyholder funds 11,250,580
Trade and other receivables 75,624
Amounts owing by clients and clearing houses 809,360
Taxation receivable 3,871
Cash and cash equivalents 153,089
Assets held-for-sale 12,671,992
Deferred tax liability 910
Policyholder investment contract liabilities 11,250,580
Loans payable 70,489
Trade and other payables 76,508
Amounts owing to clients and clearing houses 806,421
Current tax payable 2,524
Bank overdraft 56,232
Liabilities held-for-sale 12,263,664
2. Fair value disclosure and hierarchy
The table below analyses financial instruments carried at fair value by valuation method. Fair values are determined according to the following hierarchy
based on the requirements in IFRS 13 Fair Value Measurement.
Level 1 Unadjusted quoted market prices: financial assets and liabilities with quoted prices for identical instruments in active markets that the company
can access at the measurement date.
Level 2 Valuation techniques using observable inputs: quoted prices (other than those included in level 1) for similar instruments in active markets or
quoted prices for identical or similar instruments in markets that are less than active and financial assets and liabilities valued using models
where all significant inputs are observable directly or indirectly from market data.
Level 3 Valuation techniques using significant unobservable inputs: financial assets and liabilities valued using valuation techniques where one or more
inputs are unobservable and have a significant effect on the instrument's valuation.
R´000 Level 1 Level 2 Level 3 Total
2016 September
Financial assets
Financial assets at fair value through profit or loss 21,093 650 - 21,743
Linked investments backing policyholder contract funds - - - -
Total financial assets measured at fair value 21,093 650 - 21,743
Financial liabilities
Policyholder investment contract liabilities - - - -
Total financial liabilities measured at fair value - - - -
R´000 Level 1 Level 2 Level 3 Total
2015 September
Financial assets
Financial assets at fair value through profit or loss 138,021 21,683 - 159,704
Linked investments backing policyholder contract funds 9,167,795 945,290 - 10,113,085
Total financial assets measured at fair value 9,305,816 966,973 - 10,272,789
Financial liabilities
Policyholder investment contract liabilities - 10,113,085 - 10,113,085
Total financial liabilities measured at fair value - 10,113,085 - 10,113,085
R´000 Level 1 Level 2 Level 3 Total
2016 March
Financial assets
Financial assets at fair value through profit or loss 112,716 38,723 - 151,439
Linked investments backing policyholder contract funds 10,244,977 730,235 - 10,975,212
Total financial assets measured at fair value 10,357,693 768,958 - 11,126,651
Financial liabilities
Policyholder investment contract liabilities - 10,974,330 - 10,974,330
Total financial liabilities measured at fair value - 10,974,330 - 10,974,330
Date: 14/12/2016 03:12:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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