Wrap Text
Audited Results for the year ended 30 November 2016
GLOBAL ASSET MANAGEMENT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2002/003192/06)
Share Code: GAM ISIN: ZAE000173498
(“Global” or “the Company” or “the Group”)
AUDITED RESULTS FOR THE YEAR ENDED 30 NOVEMBER 2016
The Board of Directors of Global (“Board”) is pleased to present the audited results of Global and its
subsidiaries for the year ended 30 November 2016.
Condensed consolidated statement of comprehensive income
Audited Audited
2016 2015
Note R R
Revenue 197 100 747 204 514 110
Cost of Sales 145 794 963 147 255 250
Gross Profit 51 305 784 57 258 860
Other income 1 186 166 410 815
Operating expenses (22 768 657) (19 275 503)
Income from operations 29 723 293 38 394 172
Investment income 307 559 323 582
Finance costs (31 164 902) (29 505 016)
Loss before taxation (1 134 050) 9 212 738
Taxation 304 888 (2 428 212)
Loss for the year (829 162) 6 784 526
Total loss attributable to:
Equity holders of the parent (619 911) 6 784 526
Non-controlling interest (209 251) -
Total comprehensive income (829 162) 6 784 526
Total comprehensive income attributable to:
Equity holders of the parent (619 911) 6 784 526
Non-controlling interest (209 251) -
Earnings per share (cents) 5 (1.2) 14.7
Condensed consolidated statement of financial position
Audited Audited
2016 2015
Notes R R
ASSETS
Non-current assets 496 113 916 457 031 448
Property, plant and equipment 2 440 275 371 439 970 378
Goodwill 3 37 959 099 -
Intangible asset 1 075 074 1 075 074
Investment in financial asset - 2 250 000
Investment in associate 49 49
Loans and advances to customers 13 681 578 12 082 221
Deferred tax asset 3 122 745 1 653 726
Current assets 56 381 072 67 217 432
Trade and other receivables 43 839 909 55 037 346
Loans receivable 1 322 983 470 468
Cash and cash equivalents 8 220 776 11 673 217
Inventories 2 997 404 36 401
Total assets 552 494 988 524 248 880
EQUITY AND LIABILITIES
Equity
Ordinary share capital 4 57 207 811 34 795 085
Reserves 89 688 390 84 057 473
Total equity attributable to equity holders of the parent 146 896 201 118 852 558
Non-controlling interest 1 461 073 -
Total equity 148 357 274 118 852 558
Liabilities
Non-current liabilities 248 725 075 280 111 805
Loans payable 204 683 798 239 932 294
Contingent consideration payable 2 551 152 -
Deferred tax liability 41 490 125 40 179 511
Current liabilities 155 412 639 125 284 517
Trade and other payables 30 672 467 28 873 013
Loans payable 109 458 309 95 966 981
Other financial liabilities 15 235 663 251 841
Taxation 46 200 192 682
Total equity and liabilities 552 494 988 524 248 880
Net asset value per share (cents) 271.2 258.1
Shares in issue at year end 54 157 575 46 046 266
Condensed consolidated statement of changes in equity
Shareholders’
interest before
Common non Non-
Share control Retained controlling controlling
capital reserve earnings interest interest Total equity
R R R R R R
Balances at 30
November 2014 34 795 085 (6 941 028) 84 213 975 112 068 032 - 112 068 032
Total
comprehensive - - 6 784 526 6 784 526 - 6 784 526
income
Total changes - - 6 784 526 6 784 526 - 6 784 526
Balances at 30
November 2015 34 795 085 (6 941 028) 90 998 501 118 852 558 - 118 852 558
Shares issued
related to business
combination 23 236 966 - - 23 236 966 - 23 236 966
Acquisition of non-
controlling interest - - - - 1 900 000 1 900 000
Additional non-
controlling interest in
subsidiaries - - 229 676 229 676 (229 676) -
Surplus on partial
disposal of
subsidiary - - 6 021 152 6 021 152 - 6 021 152
Share issue
expenses (824 240) - - (824 240) - (824 240)
Total
comprehensive
income - - (619 911) (619 911) (209 251) (829 162)
Total changes 22 412 726 - 5 630 917 28 043 643 1 461 073 29 504 716
Balances at 30
November 2016 57 207 811 (6 941 028) 96 629 418 146 896 201 1 461 073 148 357 274
Condensed consolidated statement of cash flows
Audited Audited
2016 2015
R R
Cash flows from operating activities
Cash generated from operations 136 015 908 120 654 531
Interest income 307 559 323 582
Finance costs (30 780 737) (29 505 016)
Taxation 385 366 1 085 066
Net cash from operating activities 105 928 096 92 558 163
Cash flows from investing activities
Property, plant and equipment additions (14 338 973) (13 885 890)
Investment in associate - (49)
Cash inflow on acquisition of subsidiary 12 809 -
Amount advanced to a related party (1 032 099) -
Net cash from investing activities (15 358 263) (13 885 939)
Cash flows used in financing activities
Payment of share issue expenses (824 240) -
Repayment of loans payable (102 946 193) (84 289 137)
Proceeds from loans receivable - 1 271 845
Repayment of other financial liabilities 9 748 159 (361 213)
Net cash used in financing activities (94 022 274) (83 378 505)
Total cash movement for the year (3 452 441) (4 706 281)
Cash at the beginning of the year 11 673 217 16 379 498
Cash at the end of the year 8 220 776 11 673 217
1. BASIS OF PREPARATION
The Board of Directors is pleased to present the Group’s audited results for the year ended
30 November 2016 in accordance with the JSE Limited (“JSE”) Listings Requirements, International
Financial Reporting Standards (“IFRS”) and are consistent with the prior year and IAS 34 on interim
reporting, and its interpretations issued by the International Accounting Standards Board (“IASB”), the
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by Financial Reporting Council, and the Companies Act of South Africa.
The results have been audited by Horwath Leveton Boner. Their unmodified audit report is available
for inspection at the Company’s registered office.
The financial results have been prepared by the financial director, Mr W Basson CA (SA).
These summarised audited consolidated financial statements have been derived from the Global
Group’s annual financial statements. The contents of this announcement are extracted from audited
information, although the announcement is not itself audited. The directors take full responsibility for
the preparation of the provisional report and the financial information has been correctly extracted
from the underlying annual financial statements.
The auditor’s report does not necessarily report on all the information contained in this announcement.
Shareholders are therefore advised that, in order to obtain a full understanding of the nature of the
auditor’s engagement, they should obtain a copy of the auditor’s report together with the
accompanying financial information from the Company’s registered office.
2. PROPERTY, PLANT AND EQUIPMENT
Accumulated
Cost depreciation Carrying value
2016 R R R
Forklifts 673 797 487 (248 768 448) 425 029 039
Furniture and Fittings 97 019 (94 800) 2 219
IT equipment 367 472 (338 641) 28 831
Motor vehicles 158 500 (42 267) 116 233
Plant under construction 15 099 049 - 15 099 049
Total 689 519 527 (249 244 156) 440 275 371
Accumulated
Cost depreciation Carrying value
2015 R R R
Forklifts 669 836 932 (234 658 550) 435 178 382
Furniture and Fittings 209 606 (202 103) 7 503
IT equipment 328 938 (315 637) 13 301
Motor vehicles 158 500 (10 567) 147 933
Plant under construction 4 623 259 - 4 623 259
Total 675 157 235 (235 186 857) 439 970 378
Carrying amounts of Property, plant and equipment can be reconciled as follows:
Carrying value Transfers to Carrying
opening Transfers to trading value closing
balance Additions Impairment inventories operations Depreciation balance
2016 R R R R R R R
Forklifts 435 178 382 87 403 891 (1 161 384) (2 593 022) (27 978 201) (65 820 627) 425 029 039
Furniture and Fittings 7 503 - - - - (5 284) 2 219
IT equipment 13 301 31 394 - - - (15 864) 28 831
Motor vehicles 147 933 - - - - (31 700) 116 233
Plant under
construction 4 623 259 10 475 790 - - - - 15 099 049
Total 439 970 378 97 911 075 (1 161 384) (2 593 022) (27 978 201) (65 873 475) 440 275 371
Carrying value Transfers to Carrying
opening trading value closing
balance Additions Impairment operations Depreciation balance
2015 R R R R R R
Forklifts 441 936 990 96 784 995 - (40 137 476) (63 406 127) 435 178 382
Furniture and Fittings 18 067 - - - (10 564) 7 503
Office equipment 5 832 - (3 998) - (1 834) -
IT equipment 42 168 - - - (28 867) 13 301
Tank containers 309 920 - (309 920) - - -
Motor vehicles - 158 500 - - (10 567) 147 933
Plant under
construction - 4 623 259 - - - 4 623 259
Total 442 312 977 101 566 754 (313 918) (40 137 476) (63 457 959) 439 970 378
3. BUSINESS COMBINATION
Acquisition of a controlling interest in Earthwize Energy Holdings (Pty) Ltd
In the 2015 financial year the Group held a 5% interest in Earthwize Energy Holdings (Pty) Ltd, a
plastic to oil proprietary technology developer. In December 2015, in two separate agreements Global
increased their interest by 5% and 85.25% respectively resulting in a total interest of 95.25%.
Consideration transferred:
2016 2015
R R
8 111 309 shares 23 236 966 -
Cash consideration 2 368 055 -
Contingent consideration 2 551 152 -
Shares in a subsidiary transferred to vendors 6 021 152 -
Acquisition of 5% in a separate agreement 2 000 000 -
Previously held interest of 5% 2 000 000 -
Less acquisition of loans acquired (1 164 952) -
37 012 373 -
Identifiable assets and liabilities acquired:
2016 2015
R R
Property, plant and equipment 2 113 966 -
Loans and borrowings (1 173 501) -
Cash and cash equivalents 12 809 -
Total net identifiable assets 953 274 -
Goodwill recognised as a result of the acquisition:
2016 2015
R R
Investment in Earthwize Energy Holdings
Consideration paid 37 012 373 -
Non-controlling interest 1 900 000 -
Less, fair value of assets acquired (953 274) -
Goodwill 37 959 099 -
4. SHARE CAPITAL
2016 2015
R R
Authorised:
1 000 000 000 ordinary shares at no par value - -
1 000 000 000 Class A (fixed rate), 1 000 000 000 Class B (zero
rate), 1 000 000 000 Class C (variable rate), five year,
redeemable, convertible, non-voting, non-participating
preference shares at no par value - -
There are 945 842 425 (2015: 953 953 734) unissued ordinary shares in terms of the memorandum of
incorporation.
2016 2015
R R
Issued:
Opening balance 34 795 085 34 795 085
Issued 22 412 726 -
Closing balance 57 207 811 34 795 085
Issued share capital consists of 54 157 575 (2015: 46 046 266) ordinary shares at no par value.
5. EARNINGS PER SHARE (CENTS)
Basic and headline earnings
2016 2015
R R
Basic earnings (619 911) 6 784 526
Adjusted for:
Impairment on used forklift trucks 1 161 384 -
Loss on the disposal of assets - 313 918
Loss on the disposal of investment in joint venture - 380 470
Tax effect (325 188) (87 897)
Headline earnings 216 285 7 391 017
2016 2015
Weighted average number of ordinary shares 53 647 848 46 046 266
Basic earnings per share (cents) (1.2) 14.7
Headline earnings per share (cents) 0.4 16.1
There are no instruments in issue that would cause a dilutive effect.
6. BUSINESS OVERVIEW
The drive towards cleaner and greener technologies has established itself as an irreversible trend in
the energy sector since the turn of the century. Having identified attractive opportunities aligned with
this trend. Global intends to build a multinational renewable energy business, focussing on waste-to-
energy solutions as well as solar energy. Below follows a brief overview of the various subsidiaries
within Global, focussing on renewable and clean energy.
Enviroprotek (Pty) Ltd is in the process of establishing a commercial waste tyre recycling plant, which
converts waste rubber into industrial fuel oil, carbon black and steel. Cashflows are expected to turn
positive during the 3rd quarter of 2017, once a second reactor has been added to the current
operations. The Company has secured a supply contract with REDISA (Recycling and Economic
Development Initiative of South Africa) and is in the process of finalising the supply of waste mining
tyres from various mining companies.
Plastics Green Energy (Pty) Ltd (“PGE”), has finalised the construction of the plastic pilot plant at its
Springs recycling site and will commence with the construction of its first commercial plant during the
second quarter of 2017. Making use of its own proprietary technology, PGE will recover the latent
energy inherent in waste plastic by converting it into liquid fuel aimed at the industrial fuel oil market.
Heliosek (Pty) Ltd has completed the design for its initial pilot plant to be established during 2017. The
technology allows for the highly efficient exploitation of the unlimited solar resource base of Southern
Africa and creates an opportunity for expansion into other international jurisdictions. The technology
offers an alternative to existing solar energy and other renewable energy solutions at a lower
comparative cost.
LFS Assets (Pty) Ltd (“LFS”), the main subsidiary of Global focussing on asset financing in the
logistics sector, has experienced some headwinds during 2016, as the market for forklift sales was
subdued due to the difficult economic environment prevalent in South Africa. LFS will employ its
current funding base to assist in the funding of renewable energy assets being established in its fellow
subsidiaries. Significant growth opportunities exist in this area. Margins are also expected to be more
attractive than in the forklift asset finance operations.
7. FINANCIAL RESULTS
Points of Interest:
- The gross profit is down by approximately 12% compared to the prior period due to a higher than
expected cost of sale. This was mainly due to pressure on margins.
- Global recorded a loss for 2016 of R0.8 million, due to incurring operating and development costs
on its early-stage renewable energy businesses in the Group in line with Global’s long term
strategy. Revenue in relation to these businesses are expected to be generated over the next six
to eighteen months.
- Property, plant and equipment in the statement of financial position remained consistent
compared to the previous financial year. Additional forklift trucks acquired for the primary rental
book and the plant under construction approximated the transfer of used forklift trucks to trading
operations.
- The Group has acquired the majority share in Earthwize Energy Holdings (Pty) Ltd.
- The recoverability of trade and other debtors improved considerably compared to the prior period
ending 30 November 2015.
- The net asset value per share has increased by 5,1% from 258,1 cents per share to 271,2 cents
per share.
- Loans payable, other financial liabilities and trade and other payables decreased marginally
compared to the same period last year.
It should be noted that the current portion of loans payable reflected in the statement of financial
position represents a 12 month period. Under current assets, the trade and other receivables reflect
approximately one month of receivables arising from the rental contracts. The net current liability
position of the Group is considered sound as current liabilities will be settled by ongoing monthly rental
billings.
8. SEGMENTAL REPORTING
Segmental information has been reported by the Group in the following segments, namely rentals and
maintenance, sale of forklifts, renewable energy and other income.
Rentals and Sale of Renewable
maintenance forklifts energy Other Intergroup Total
2016 R R R R R R
Revenue 197 419 648 25 704 224 - 3 473 996 (29 497 121) 197 100 747
Cost of sales (142 560 798) (27 978 201) - - 24 744 036 (145 794 963)
Gross profit 54 858 850 (2 273 977) - 3 473 996 (4 753 085) 51 305 784
Operating
expenses, finance
costs and other
income (48 039 109) - (6 150 426) (3 003 384) 4 753 085 (52 439 834)
Taxation (1 833 479) 611 355 1 653 535 (126 523) - 304 888
Profit after tax 4 986 262 (1 662 622) (4 496 891) 344 089 - (829 162)
Depreciation and
impairment (66 982 011) - - (52 848) - (67 034 859)
Additional
information
Segment assets 485 254 857 - 14 389 123 135 599 194 (82 748 186) 552 494 988
Additions to
property plant and
equipment 87 403 891 - 10 475 790 31 394 - 97 911 075
Deferred tax asset - - 3 122 745 - - 3 122 745
Deferred tax liability (50 789 865) - - - 9 299 740 (41 490 125)
Segment liability (349 355 559) - (21 176 786) (26 054 603) 33 939 359 (362 647 589)
Rentals and Sale of Renewable
maintenance forklifts energy Other Intergroup Total
2015 R R R R R R
Revenue 194 106 685 31 489 857 - 6 394 916 (27 477 348) 204 514 110
Cost of sales (127 566 839) (40 137 476) - (3 752 995) 24 202 060 (147 255 250)
Gross profit 66 539 846 (8 647 619) - 2 641 921 (3 275 288) 57 258 860
Operating
expenses, finance
costs and other
income (43 579 535) - (3 826 419) (3 915 456) 3 275 288 (48 046 122)
Taxation (6 051 676) 2 279 263 1 008 534 335 667 - (2 428 212)
Profit after tax 16 908 635 (6 368 356) (2 817 885) (937 868) - 6 784 526
Depreciation and
impairment (63 406 127) - - (51 832) - (63 457 959)
Additional
information
Segment assets 502 080 242 - 6 667 606 94 532 298 (79 031 266) 524 248 880
Additions to
property plant and
equipment 96 784 995 - 1 970 606 2 811 153 - 101 566 754
Deferred tax asset - - 1 557 831 95 895 - 1 653 726
Deferred tax liability (47 672 129) - - 65 736 7 426 882 (40 179 511)
Segment liability (430 798 241) - (461 816) (3 670 028) 29 533 763 (405 396 322)
9. DIRECTORS
During the year under review, the Board of directors was constituted as follows:
Name Position/title
Niels Penzhorn Chief Executive Officer
Werner Petrus Basson Chief Financial Officer
Marinus Cornelis Christoffel (“Koos”) van Ettinger Chief Operating Officer
Alan Jerome Naidoo Independent Non-Executive Director
Gabriel Thono Magomola Independent Non-Executive Director
Gordon Kenneth Cunliffe Independent Non-Executive Director and Chairman
10. SHARE CAPITAL / REPURCHASE OF SHARES
During the period presented, the Company issued 8 111 309 Global shares with the acquisition of a
controlling interest in Earthwize Energy Holdings (Pty) Ltd. The consideration of the shares at date of
issue was R 23 236 966. Global did not repurchase any shares during the period under review.
11. DIVIDEND
The Company did not declare a dividend for the year ended 30 November 2016 (2015: R Nil).
12. LITIGATION
As at year end, there was no litigation pending against the Company or its Subsidiaries, which is
expected to have a material impact on the results of the Group.
13. CONTINGENT LIABILITIES
At the financial year end the Group did not have any contingent liabilities (2015: R Nil).
14. COMMITMENTS
The commitment for software development at 30 November 2016 was R424 926 (2015: R424 926).
15. SUBSEQUENT EVENTS
There are no other major events subsequent to 30 November 2016 that require disclosure.
16. FUTURE PROSPECTS
The Global Group will continue to build on its formidable platform of assets and skills, linking financial
management prowess and structuring expertise within the Group, to become the investment vehicle
and financing partner of choice for investors, business owners and clients. Being listed on the
Johannesburg Stock Exchange provides Global with an enhanced standing and visibility in the market,
allowing the Company to access an increased set of funding options.
The Board believes that the Group has excellent prospects to significantly expand its operations over
the near term. Based on its current pipeline of projects and initiatives and strong management skills,
coupled with an excellent reputation and proven track record.
This prospect statement has not been review or audited by the Company’s auditors.
By order of the Board
GK Cunliffe N Penzhorn
Chairman Chief Executive Officer
Johannesburg
01 March 2017
Registered Office
Ruimsig Country Office Park
Block E, 129 Hole in One Avenue
Ruimsig North
Roodepoort, 1724
Directors
GK Cunliffe*; MCC van Ettinger; N Penzhorn; WP Basson; GT Magomola*; AJ Naidoo*
* - independent non-executive
Designated Advisor Transfer Office
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