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Abridged Prospectus Relating to the Listing of Pembury Lifestyle Group Limited
PEMBURY LIFESTYLE GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/205899/06)
(“PL Group” or “the Company”)
ISIN Code: ZAE000222949 JSE Code: PEM
ABRIDGED PROSPECTUS RELATING TO THE LISTING OF PEMBURY LIFESTYLE GROUP LIMITED
1. BACKGROUND ON THE PROSPECTUS
The board of directors of PL Group (“the Directors”) are pleased to announce the issue of a
Prospectus prepared and issued in terms of the JSE Listings Requirements and the Companies Act,
2008 (No. 71 of 2008), as amended (“the Act”), relating to a Private Placement for subscription of PL
Group ordinary Shares by way of:
- an offer by the Company by way of a Private Placing of 100 000 000 shares at 100 cents each
and a Preferential Offer for subscription of 40 000 000 shares at 100 cents each, totalling
140 000 000 ordinary no par value Shares in the issued share capital of the Company at an
issue price of 100 cents per ordinary Share; and
- the subsequent listing of up to 353 000 000 ordinary no par-value shares at 100 cents each in
PL Group on the Alternative Exchange (“AltX”) of the JSE in the Specialised Consumer
Services Sector.
Opening date of the Private Placement (comprising the Private Placing Thursday, 9 March 2017
and Preferential Offer) and announced on SENS at 09h00 on
Closing date of the Private Placement (comprising the Private Placing Friday, 24 March 2017
and Preferential Offer) at 12h00 on*
Anticipated listing date on AltX at commencement of trade at 9h00 on Friday, 31 March 2017
*Shareholders wishing to subscribe for ordinary Shares in dematerialised form must advise their
Central Securities Depository Participant (“CSDP”) or broker of their acceptance of the Private
Placement of Shares in the manner and within the cut -off time stipulated by their CSDP or broker.
In the event of an over-subscription in terms of the Private Placement, the Directors will adjust the
allocation of applicants on an equitable basis in accordance with paragraph 5.18 of the JSE
Listings Requirements. The Shares placed in terms of the Prospectus will rank pari passu with the
existing ordinary Shares in PL Group and rank equally as to voting, share in profits, dividends and
distributions.
At the date of closing of the Private Placement and assuming that the Private Placement i s fully
subscribed, PL Group share capital will comprise 1 000 000 000 authorised ordinary Shares of no par
value and 353 000 000 issued ordinary Shares of no par value with stated capital of R146.9 million
(before write off of share issue expenses). There will be no convertible or redeemable shares issued.
In the opinion of the Directors, an overall minimum subscription of R140 000 000 is required in terms
of the Private Placement. The listing will also be subject to meeting the minimum spread
requirements for companies listing on the AltX as detailed in the Prospectus.
The Company is required to meet the minimum spread requirement of at least 10% to be held by
the general public as defined in the JSE Listings Requirements in order to ensure reasonable
liquidity, which will amount to approximately R35 000 000 or 35 000 000 shares at 100 cents per
share. In the event that this is not achieved, monies will be refunded to all applicants.
The JSE has granted PL Group a listing in respect of up to 353 000 000 ordinary Shares on the AltX
under the abbreviated name “PL Group”, share code “PEM” and ISIN ZAE000222949. It is
anticipated that the listing of the Shares on AltX will become effective from the commencement of
business on or about Friday, 31 March 2017 or such later date as granted by the JSE.
The Private Placement has not been underwritten.
The Company does not have any Treasury Shares or debentures in issue.
Applications for ordinary Shares in PL Group must be for a minimum of 2 000 ordinary Shares at 100
cents per share, amounting to R2 000, and in multiples of 100 ordinary Shares thereafter. Fractions
of Shares in PL Group will not be issued.
The Shares in PL Group will be tradable on the JSE in dematerialised form only and, as such, all
investors who elect to receive their ordinary Shares in PL Group in certificated form, will have to
dematerialise their certificated Shares should they wish to trade therein.
The Directors, whose names are given in paragraph 1.2 of the Prospectus issued by the Company,
collectively and individually accept full responsibility for the accuracy of the information given and
certify that to the best of their knowledge and belief there are no facts that have been omitted
which would make any statement false or misleading, that all reasonable enquiries to ascertain
such facts have been made and that the Prospectus contains all information required by law and
the JSE Listings Requirements.
The Designated Advisor, Auditors and Reporting Accountants, Attorney, Commercial Banker and
Transfer Secretaries, whose names are set out in the Prospectus, have given and have not, prior to
registration, withdrawn their written consents to the inclusion of their names in the capacities stated.
An English copy of the Prospectus, accompanied by the documents referred to under “Registration
of Prospectus” in paragraph 4.2 of the Prospectus, was registered by the Commissioner on 8 March
2017 in terms of Regulation 52(5) of the Companies Act, 2008 (No. 71 of 2008), as amended.
2. INCORPORATION AND NATURE OF BUSINESS
PL Group was incorporated as a public company on 5 November 2013 and remained dormant
until PLG Schools commenced operations during 2015. PL Group currently focuses mainly on
providing accessible, affordable, private education through its schools, with an intention to own
the properties from which the schools operate. In due course, the group will explore the acquisition
of retirement accommodation and services, subject to shareholder approval.
The Company operates as a holding com pany to three subsidiaries, namely:
- PLG Schools, the education segment;
- PLG Properties, the company which will own the group properties; and
- PLG Retirement Villages, the retirement segment (currently dormant).
As the holding company, PL Group centrally manages the administration of the Group subsidiaries
and is responsible for the strategic direction thereof. Currently, the main revenue driver of the
group is the education segment, primarily comprising school and boarding fees.
The Company will list on the Alternative Exchange in the Specialised Consumer Services sector of
the JSE lists.
3. PURPOSE OF THE OFFER
The rationale for the listing of PL Group on the AltX is set out below:
- to raise capital to use for:
o the settlement of property vendor obligations of approximately R87 million;
o the reduction of debt, such as the back-to back funding with DBSA through the
Hartbeespoort Acquisition;
o working capital; and
o planned capital expenditure on school sites over the 2017 year;
- to have access to additional capital for future growth and acquisitions;
- to acquire new sites;
- to afford investors a further opportunity to invest in the education sector and, in due course to
invest in the retirement sector;
- to provide the Group with a platform to improve its business profile and visibility;
- to increase the liquidity of the shares of the Company and widen our investor base;
- to grow into new markets in South Africa and the rest of Africa; and
- to offer shares option and incentives to employees and future employees.
In addition, PLG Schools operates in a demand driven market and listed competitors in the
Education Sector are considered desirable investments. It is thus envisaged that the listing of PL
Group will attract considerable investor appetite upon the Company’s listing.
The Group as it stands as an education business before acquiring the various properties does not
immediately need working capital and does not have current funding requirements as the Group,
through its founder, has secured the various properties over the past two years through which the
current school operations are conducted and he has continued to fund the improvements and
operations. However, it is the intention to raise as much capital as possible on listing in order to fast
track the transfer of the Acquisition Properties as well as the acquisition and roll out of additional
educational facilities, thereby reducing the reliance on the founder. Loan funding of R24 000 000
has also been secured by the Group as part of the Willow View Acquisition Agreement and the
Northriding Acquisition Agreement.
A minimum capital amount will be raised in order to ensure that the Company meets the
shareholder spread requirements of the JSE. In addition to the above, the Company aims to secure
the transfer of the Acquisition Properties, despite underlying lease agreements or agreements for
monthly payments or occupational rent being in place.
This minimum amount has been set at R140 000 000, as certain Acquisition Property Vendors have
contracted to provide vendor loans for a portion of the purchase consideration, in the amount of
R24 000 000. A minimum subscription of R140 000 000 has accordingly been set as further detailed in
paragraph 2.4 of the Prospectus.
As at the date of the Prospectus, PL Group is not listed on any Stock Exchange.
4. FINANCIAL INFORMATION
Historical Financial Information
An extract of the consolidated historical financial information for the six months ended 31 August
2016 and the year ended 29 February 2016 is set out below. The company expects to publish its
consolidated results for the 10 months ended 31 December 2016 on or about 31 March 2017.
Consolidated Statement of Financial Position
Figures in Rand Six months ended Year ended
31 August 2016 29 February 2016
ASSETS
Non-Current Assets 48 399 453 30 949 318
Property, plant and equipment 45 707 439 26 215 560
Goodwill 2 692 014 2 692 014
Deferred tax 2 041 744
Current Assets 3 513 514 1 468 062
Trade and other receivables 3 506 297 1 446 152
Cash and cash equivalents 7 217 21 910
Total Assets 51 912 967 32 417 380
EQUITY AND LIABILITIES
Equity 6 780 176 (5 483 531)
Stated capital 100 100
Reserve 14 660 332 -
Accumulated loss (7 880 256) (5 483 431)
Liabilities
Non-Current Liabilities 33 706 471 28 425 909
Financial liability 747 017 777 017
Finance lease liabilities 20 054 597 20 079 638
Loan from related party 11 163 596 7 569 254
Deferred tax 1 741 261 -
Current Liabilities 11 426 320 9 474 902
Financial liability 619 807 1 082 431
Finance lease liabilities 899 581 1 055 715
Trade and other payables 9 906 932 7 336 756
Total Liabilities 45 132 791 37 900 811
Total Equity and Liabilities 51 912 967 32 417 380
Number of shares in issue (Post sub-division) 100 100
Net asset value per share (cents) 6 780 176 (5 483 531)
Net tangible asset value per share (cents) 4 088 162 (8 175 545)
Number of shares in issue (post sub-division) 200 000 000 200 000 000
Net asset value per share (cents) 3.39 (2.74)
Net tangible asset value per share (cents) 2.04 (4.08)
Consolidated Statement of Comprehensive Income
Six months ended Year ended
Figures in Rand 31 August 2016 29 February 2016
Revenue 20 635 210 12 836 116
Other income 5 910 -
Operating Expenses (21 871 131) (19 840 494)
Loss before interest, taxation, depreciation and
amortisation (1 230 011) (7 004 378)
Depreciation (202 274) -
Interest (1 414 394) (520 897)
Interest received 2 903 2 001
Finance costs (1 417 297) (522 898)
Loss before taxation (2 846 679) (7 525 275)
Taxation 449 954 2 041 744
Net loss after taxation (2 396 725) (5 483 531)
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Gains and losses on property revaluation 18 892 181 -
Income tax relating to items that will not be reclassified (4 231 849) -
Total items that will not be reclassified to profit or loss 14 660 332 -
Other comprehensive income for the period net of
taxation 14 660 332 -
Total comprehensive income/(loss) for the period 12 263 607 (5 483 531)
Total comprehensive income/(loss) for the period
attributable to: 12 263 607 (5 483 531)
Owners of the parent 12 263 607 (5 483 531)
Non-controlling interest - -
Net loss for the period attributable to: (2 396 725) (5 483 531)
Owners of the parent (2 396 725) (5 483 531)
Non-controlling interest - -
Loss per share (cents)
Basic loss per share (2 396 725) (5 483 531)
Diluted loss per share (2 396 725) (5 483 531)
Basic loss per share (post sub-division) (1.19) (2.74)
Headline loss per share (cents)
Basic headline loss per share (2 396 725) (5 483 531)
Diluted headline loss per share (2 396 725) (5 483 531)
Basic headline loss per share (post sub-division) (1.19) (2.74)
Weighted average number of shares in issue 100 100
Weighted average number of shares in issue
(post sub-division) 200 000 000 200 000 000
Profit Forecast
The profit forecasts of PL Group are presented for the years ending 31 December 2017 and
31 December 2018. The full set of assumptions relating to the profit forecast are contained in
Annexure 7 of the Prospectus.
31 December 2017 31 December 2018
Revenue 68 558 960 135 617 381
Operating expenses (69 161 737) (106 644 002)
(Loss)/Profit before interest, taxation depreciation and
amortisation (602 778) 28 973 379
Amortisation - -
Depreciation (765 968) (1 459 631)
(Loss)/Profit before interest and tax (1 368 745) 27 513 748
Interest received - -
Interest paid (4 986 268) (9 518 011)
(Loss)/Profit before taxation (6 355 103) 17 995 737
Taxation 1 779 404 (5 038 806)
Net (loss)/profit after taxation (4 575 610) 12 956 931
Other comprehensive income 33 678 400 -
Revaluation of properties to fair value 43 400 000 -
Deferred taxation (9 721 600) -
Total comprehensive income 29 102 790 12 956 931
Total comprehensive loss for the year attributable to:
Owners of the parent 29 102 790 12 956 931
Non-controlling interest - -
Net (loss)/profit for the year attributable to:
Owners of the parent (4 575 610) 12 956 931
Non-controlling interest - -
Net (loss)/profit after taxation (4 575 610) 12 956 931
Headline earnings adjustment – impairment of property 1 500 000 -
Headline (loss)/earnings (3 075 610) 12 956 931
Share in issue (assuming fully diluted) 353 000 000 353 000 000
(Loss)/Earnings per share (cents) (1.30) 3.67
Headline (loss)/earnings per share (cents) (0.87) 3.67
5. PROSPECTS
The Directors of the Company believe that the Group has excellent prospects based on the
following:
- PL Group has an experienced, well-balanced, innovative and well-motivated management
team;
- Difficulties in the public education sector provides opportunity for growth in private
education;
- Executive team has proven project management and execution skills to deliver on the
expansion of the business;
- Research indicates that there is adequate market demand for quality and affordable
schooling in South Africa;
- PLG Schools is experiencing high growth rates off a low occupancy base and a number of
approaches relating to excellent properties, well suited for conversion into schools;
- PLG Schools aims to have 40 schools by 2020 and is focussed on delivering quality, affordable
education in well located areas, addressing a real need in South Africa;
- The business is centrally managed and the head office function controls the finances, with
the schools being able to focus on education;
- PLG Properties has been able to source properties at prices well below the traditional cost of
establishing or acquiring a private school and PLG Schools is nimble, able to roll out new
schools within a year of securing properties;
- The listing will provide additional access to capital to enable the group to grow more quickly
than remaining private or having to rely on bank funding.
6. AUTHORISED AND ISSUED SHARE CAPITAL
The authorised and issued share capital of the Company as at the last practicable date is as
follows:
Authorised share capital
1 000 000 000 ordinary Shares of no par value
Issued stated capital
203 000 000 ordinary Shares of no par value
The authorised and issued share capital of the Company on the date of listing, assuming that the
Private Placement of 140 000 000 new Shares is fully subscribed and noting that a portion of the
shareholder loan will be capitalised through the issue of 10 000 000 Shares at an issue price of 100
cents per share, will be as follows:
Authorised share capital
1 000 000 000 ordinary Shares of no par value
Issued stated capital
353 000 000 ordinary Shares of no par value
The remaining authorised and unissued Shares, after the Private Placing, will be under the control of
the Directors of the Company, subject to the provisions of the MOI, the Act and the JSE Listings
Requirements.
There are no treasury Shares held as at the last practicable date. All of the authorised and unissued
Shares (including those to be issued in terms of the Prospectus) are of the same class and rank
equally in every respect, including rights to dividends, profits or capital, rights on liquidation or
distribution of capital assets. In accordance with the Act, issued Shares must be fully paid up and
the securities to be listed are freely transferable.
Any variation of rights attaching to the ordinary Shares will require the consent of shareholders in
general meeting in accordance with the MOI of PL Group. There have been no previous offers of
Shares by PL Group to members of the public.
7. DIRECTORS
Executive
Andrew McLachlan (50)
Nationality South African
Business address 111 9th Street, Fairland, Randburg, 2030
Appointment date 5 November 2013
Qualifications B.Sc Construction Management UOFS
Occupation Group CEO
Position in Company Chief Executive Officer
Riaan van Jaarsveld (54)
Nationality South African
Business address 111 9th Street, Fairland, Randburg, 2030
Appointment date 1 October 2016
Qualifications B. Com; B Com Hons CTA; CA (SA)
Occupation Financial Director
Position in Company Group Financial Director
Non-Executive
Lou Brits (70)
Nationality South African
Business address 111 9th Street, Fairland, Randburg, 2030
Appointment date 7 October 2016
Qualifications BA
Occupation Businessman
Position in Company Independent Non-Executive Chairman
Christo Hechter (52)
Nationality South African
Business address 111 9th Street, Fairland, Randburg, 2030
Appointment date 5 November 2013
Qualifications B.Proc
Occupation Businessman
Position in Company Non-Executive Director
Grant Waters (51)
Nationality South African
Business address 111 9th Street, Fairland, Randburg, 2030
Appointment date 7 October 2016
Qualifications D.E. (S.P) HDE (Ac.Spec.) Rhodes University
Occupation Educator
Position in Company Independent Non-Executive Di
Barry Moyo (64)
Nationality South African
Business address 9 Jukskei Road, Kelland, Randburg, 2194
Appointment date 7 October 2016
Qualifications M.A. Accounting and Finance-Lancaster University (United Kingdom), B.
A. Economics (Honours)-Ealing College (United Kingdom), CA
(Zimbabwe)
Occupation Financial and business consultant
Position in Company Independent Non-Executive Director
8. SALIENT DATES
2017
Date on which the Private Placement (comprising the Private Placing and
Preferential Offer) contemplated in the Prospectus will be open at 09h00
on Thursday, 9 March
Date on which the Private Placement (comprising the Private Placing and
Preferential Offer) contemplated in the Prospectus will close at 12h00 on Thursday, 9 March
Date on which shareholders will be advised of their allocations Friday, 24 March
Date on which funds will be debited from shareholders’ accounts or
payments made into the Company’s bank account Monday, 27 March
Date on which the results of the Private Placement will be released on SENS Tuesday, 28 March
Date on which shares will be allocated to shareholders’ accounts Wednesday, 29 March
Listing of securities on the JSE at 9h00 on Friday, 31 March
A copy of the prospectus can be obtained from :
- the head office of the company in Johannesburg; or
- the Designated Advisor in Johannesburg; or
- on the company’s website at www.plgschools.co.za.
By order of the Board
Johannesburg
9 March 2017
Designated Advisor Auditor and Reporting Accountants
Arbor Capital Sponsors Moore Stephens FRRS Incorporated
Attorney Independent Property Valuer
Paul Barnard Incorporated Johan Bosman Valuers and Appraisers
Date: 09/03/2017 12:06:00 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,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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