Wrap Text
Unaudited Interim Results For The Six Months Ended 31 December 2016
Tiso Blackstar Group SE
Unaudited Interim Results
For the six months ended 31 December 2016
Incorporated in Malta Company number SE 4
Registered as an external company with limited liability in the
Republic of South Africa under registration number
2011/008274/10
Share code: TBGR or TBG
ISIN: MT0000620113
("Tiso Blackstar" or the "Company" or the "Group")
Highlights for the interim period ended 31 December 2016
- Results presented on a consolidated basis for the first time due to change in status from being an
Investment Entity
- Significant progress made in implementation of new strategy as a media focussed business
including renaming of Times Media Group to Tiso Blackstar Group
- In December 2016, announcement of sale of 22.9% interest in Kagiso Tiso Holdings for R1.5
billion (GBP90 million) - expected to close May 2017
- Consolidated turnover increased to R4.5 billion (GBP253 million) from R4.3 billion (GBP206 million)
- Consolidated EBITDA increased to R270 million (GBP15 million) from R249 million (GBP12 million)
- Times Media acquisition finance reduced from R730 million (GBP43 million) to R669 million (GBP39
million) over the period
- Tiso Blackstar head office acquisition finance reduced from R414 million (GBP24 million) to R395
million (GBP23 million)
- Interim dividend of 4.47275 cents (0. 28465 pence) per share
- Proposed special dividend of R40 million (GBP2.5 million) on successful closure of KTH sale
- From 1 July 2016 to date, Tiso Blackstar bought back R13 million (GBP0.7 million) worth of shares,
currently held in treasury
- Approval received to transfer the listing from Altx to the JSE Main Board subject to shareholder
approval of the Company's Articles of Association amendments to comply with JSE Regulations
- Tiso Blackstar Group is a global media company with roots in Africa, operating market-leading
newspaper, broadcast, digital and mobile properties focused on providing quality content and
services to its varied audiences. The Group has strong exposure to the rapidly growing digital,
broadcast and mobile markets, with a leading position in South Africa and a broad footprint across Kenya,
Ghana and Nigeria.
Overview
The business has made significant progress in implementing the strategy of becoming a media and
related services group and these results reflect the positive effects of this new focus. The interim
results mark the first time that Tiso Blackstar has reported results on a consolidated basis.
Our core media operations were able to grow their earnings for the period despite difficult trading
conditions. This is the result of the repositioning of the business by reducing the legacy cost base and
implementing a more commercial, efficient and multi-platform business model.
During the period, we also announced the sale of our non-core 22.9% interest in Kagiso Tiso Holdings
Proprietary Limited ("KTH") for R1.5 billion (GBP90 million) which is expected to close in May 2017. The
Group's acquisition finance was reduced substantially over the period under review, and we envisage
repaying all of the Tiso Blackstar head office debt in May 2017.
The move to our new premises in Johannesburg in April 2017 will facilitate a far more integrated news
gathering and production process, resulting in further savings. The new newsroom will also allow for
the integration of other digital and print functions.
Performance review
Effective 1 July 2016, there was a change in the Group's status from an Investment Entity as defined
in IFRS 10 and the subsidiaries Times Media Group Proprietary Limited ("TMG"), Consolidated Steel
Industries Proprietary Limited ("CSI"), Robor Proprietary Limited ("Robor"), and the property
subsidiaries are no longer carried at fair value but rather accounted for as deemed acquisitions of
subsidiaries on 1 July 2016 and consolidated from this date forward. The net identifiable assets of
these subsidiaries have been recognised on balance sheet at fair value on 1 July 2016 resulting in
goodwill being recognised. Investments in associates, Radio Africa Limited ("RAG" or "Radio Africa
Group"), Multimedia Group Limited ("MMG" or "Multimedia Group") and Cooper Communications
Limited ("Coopers"), which were previously held at fair value have been equity accounted from 1 July
2016.
In accordance with IFRS, the comparative periods ended 31 December 2015 and 30 June 2016 have
not been restated and are disclosed on a fair value basis as has been previously reported. For this
reason the comparative financial statements are separately disclosed from the current interim
statements.
Segmental review
To assist shareholders in assessing the Group's performance over a period of time, pro forma
information in the form of consolidated comparatives have been prepared for the segmental analysis
on the assumption that Tiso Blackstar's holdings in these subsidiaries and associates was the same
in the comparative periods as for the current reporting period ended 31 December 2016.
Unaudited Pro forma Pro forma
Six months Six months Twelve months
ended ended ended
31 December 31 December 30 June
2016 2015 2016
R'000 R'000 R'000
Revenue
Media 1,304,728 1,408,456 2,699,294
Retail Solutions 865,148 904,753 1,628,806
CSI 1,249,706 972,248 1,928,257
Robor 1,114,768 992,319 2,271,893
4,534,350 4,277,776 8,528,250
EBITDA
Media 91,759 86,395 155,614
Retail Solutions 136,714 128,459 206,606
CSI 45,883 39,374 58,959
Robor 3,012 14,439 87,648
Other (7,832) (20,078) (31,134)
269,536 248,589 477,693
Media
Media reflected the positive effects of the restructuring of the business over the past 18 months, with
half-year EBITDA up 6.2% on the prior interim period to R91.8 million (GBP5.1 million).
The traditional media business (Newspapers, Magazines, Digital and Distribution) grew EBITDA
earnings by 16.7% to R86.9 million (GBP4.9 million) from the prior six month comparative period. The
combination of cost reductions and the introduction of new innovative revenue streams helped drive
significant growth in earnings in flagship titles such as Sunday Times and Business Day, while
magazines, supplements, events, digital and mobile all helped broaden the revenue base.
The growth in earnings came at the same time as a significant investment in digital, which reflected
the audience growth required to deliver significant future revenues. The company's large and high
quality digital audience is well placed to capture a greater share in a growing digital advertising
market. The focus on maintaining EBITDA margins during the restructuring and transition phase has
paid off, with a 1.6% improvement in the six month period.
The group's newspapers continued to grow their advertising market share rising to 25.9% in 2016
from 25.4% the year before. These products recorded declines in circulation, largely due to a
managed reduction in unprofitable or lower yielding distribution into non-core markets. Circulation has
stabilised in core markets and in some areas is now showing growth.
Magazines produced almost 40% earnings growth off the back of a 7% increase in revenues,
supported by new subscriber products. The business is also significantly more agile and able to
respond quickly to market changes.
The Broadcast and Content businesses produced solid improvement across most sectors, specifically
in television and radio, although films distribution was impacted by difficult market conditions and
dragged overall earnings lower. Music continues to trade profitably in a fast changing market.
TV production business Ochre showed strong growth having built a solid pipeline of contracts for
various broadcasters, while channels business One Africa Television performed well in all areas
except its motoring channel which was impacted by the weak motoring sector.
The company's two fledgling local stations, Vuma in KZN and Rise in Mpumalanga, both improved on
prior year performance, with revenue increasing by 25% and 54% respectively.
The majority-held investment Smartcall Technology Solutions Proprietary Limited ("STS"), one of SA's
biggest mobile content providers, grew revenues 34.0% and EBITDA 61.2% compared to the
previous six month period, building its presence in the Southern African region and producing
consistent earnings growth.
Retail Solutions
The Hirt & Carter Group ("H&C") continues to offer a strong value proposition to customers who are
looking to reduce their overall cost of marketing through the addition of technology, innovation and
leveraging the underlying efficiencies created.
During the period, H&C grew earnings and improved margins. H&C Software has been implementing
new clients during the period delivering a 40% growth in billings. H&C is in the process of setting up a
new division called Hive Digital, which will focus on delivering digital solutions to customers.
Economic pressures continue to affect customers, which in turn affects our core retail clients.
Uniprint, performed well in the six month period despite very difficult trading conditions, including
volatility of the currency and reduced volume experienced by Uniprint customers due to lower
consumer demand. However, despite the trading conditions, Uniprint grew its EBITDA slightly over
the prior period.
Uniprint acquired Triumph Printing and Packaging, a folding carton specialist business, in October 2016.
This, consolidated with Uniprint's smaller Packaging business will result in cost savings and create economies of scale.
The folding carton market is a growth segment and will enhance our product offering.
African Investments (investments in associates)
Our interests in East and West Africa Radio investments include market leading TV and radio
interests in Ghana and Kenya, two of the most exciting growth markets north of South Africa. Tiso
Blackstar holds a 49% interest in Radio Africa Group in Kenya which operates three of the top five
radio stations in Nairobi and has a Digital Terrestrial Television ("DTT") operation with strategic
partners. Multimedia Group, in which the Group holds a 32.2% interest, is situated in Ghana and
operates three of the top six radio stations and a broad reaching free-to-air ("FTA") television platform
and channels.
Multimedia Group produced strong earnings growth of over 200% in its full year to December 2016,
driven principally by a strong turnaround in its TV operations. Radio Africa Group reported a 25%
decline in EBITDA at half-year as a result of its investment into TV and economic uncertainty ahead of
national elections this year.
In 2016, Tiso Blackstar invested in Coopers which includes a newly launched Nigerian radio station
called Lagos Talks on 91.3 FM. Lagos Talks operates in the Talk Format and is focused on creating
and encouraging conversations about issues that affect all residents of Lagos. The station also holds
the Audio rights for the English Premier League. The launch of the station has been a huge success.
Tiso Blackstar holds an effective 36.5% shareholding in Lagos Talk.
Robor
Tough economic conditions resulted in EBITDA declining despite revenue growing to R1.1 billion (GBP0.6 million).
Anticipated completion of delayed project work should improve results in the second half of the financial year.
Consolidated Steel Industries
CSI performed particularly well in an exceptionally tough operating environment. Revenue grew to
R1.2 billion (GBP0.1 billion) mainly through market share growth through strategy execution.
Financial review
Tiso Blackstar generated a profit of R39.8 million (GBP2.2 million) for the six months ended 31 December
2016.
Other gains (losses) of R23.0 million (GBP1.3 million) mainly comprise of the following: a R30.0 million
(GBP1.7 million) profit on disposal of property, plant and equipment; a R12.2 million (GBP0.7 million) gain
arising on step up acquisitions from associates to subsidiaries; a R8.2 million (GBP0.5 million) foreign
exchange loss arising on translation of foreign investments and intergroup loans fixed in foreign
currency; and exceptional non recurring expenses of R9.2 million (GBP0.5 million).
Share of profit of associates of R1.0 million (GBP0.05 million) comprises the Group's share of profits in
RAG, MMG and Coopers. Profit from discontinued operations, net of taxation of R12.1 million (GBP0.7
million) includes the KTH dividend received as well KTH directors' fees earned.
Other comprehensive loss of R45.5 million (GBP0.4 million) recognised directly to equity (namely the
Foreign Currency Translation Reserve) arose on translation of CSI's African subsidiaries and the
Group's African based associates to Rands.
The investment in KTH held at fair value less costs to sell of R1.5 billion (GBP90 million) is disclosed as
an asset held for sale. The related acquisition debt of R395.0 million (GBP23.3 million) which will be
settled on receipt of the proceeds on disposal in May 2017, is separately disclosed under current
liabilities.
Bank overdrafts and other short term borrowing facilities of R895.5 million (GBP52.8 million) include the
working capital facilities held by trading subsidiaries. Tiso Blackstar generated cash from operations
of R281.3 million (GBP15.7 million) during the reporting period.
Cash out flow of R611.3 million (GBP31.6 million) on acquisition of subsidiaries mainly comprises the net
cash balances and other short term borrowing facilities of the subsidiaries (TMG, CSI and Robor) of
R589.2 million (GBP30.2 million) on 1 July 2016. Borrowings of R190.0 million (GBP10.6 million) were repaid
(including repayment of finance leases and instalment sale liabilities) during the current reporting
period.
During the current reporting period, the Company repurchased a total of 1,153,589 Tiso Blackstar
shares in the open market at a total cost of R10.7 million (GBP0.6 million). At 31 December 2016, the
Company held 2,221,514 treasury shares representing 0.8% of the issued share capital. A dividend
of R12.0 million (GBP0.7 million) was paid to shareholders in January 2017 in respect of the prior
financial year.
Dividends
The Company places emphasis on making dividend payments on an interim and final basis and the
Tiso Blackstar Board has approved an interim dividend of 4.47275 South African cents (0.28465 pence) per
share. The exchange rates have been fixed for the calculation of the Euro and Pounds Sterling
equivalents based on the closing exchange rates on Thursday, 16 March 2017 of EUR1=ZAR13.704
and GBP1=ZAR15.713.
The interim dividend will be paid from income reserves in accordance with the salient dates and times
set out below:
Last day to trade on the South African register Tuesday, 4 April 2017
Trading ex-dividend commences on the South African register Wednesday, 5 April 2017
Trading ex-dividend commences on the UK register Thursday, 6 April 2017
Record date for shareholders recorded on the UK and South African
registers Friday, 7 April 2017
Date of payment Monday, 8 May 2017
Share certificates may not be dematerialised or rematerialised between Wednesday, 5 April 2017
and Friday, 7 April 2017, both days inclusive, and transfers between the UK register and the South
African register may not take place between Monday, 20 March 2017 and Friday, 7 April 2017, both
days inclusive. Dividend tax will be withheld from the amount of the gross dividend of 4.47275 South
African cents per share paid to South African shareholders at the rate of 20% unless a shareholder
qualifies for exemption. After the dividend tax has been withheld, the net dividend will be 3.57820
South African cents per share. There are no other taxes (foreign or otherwise) to be withheld from the
dividend.
The Company had a total of 268,291,260 shares in issue (which includes 2,221,514 shares held in
treasury) at the date on which the dividend was announced, 20 March 2017. The dividend will be
distributed by Tiso Blackstar Group SE (Malta tax registration number 995944033) and is regarded
as a foreign dividend from a South African perspective.
In addition to the above, a special dividend of R40.0 million (GBP2.5 million*) has been approved by the
Board to be paid to shareholders conditional on completion of the KTH sale, and in due course
shareholders will receive the relevant information regarding the special dividend.
* Pounds sterling equivalent provided for disclosure purposes determined using the closing exchange rates on Thursday,
16 March 2017 as noted above. Special dividend per share to be determinded on declaration date based on the number of
shares in issues.
Black Economic Empowerment
Tiso Blackstar remains committed to transformation. TMG was proud to obtain a Level Three
Contributor status and more than 51% black ownership with the revised Broad-Based Black Economic
Empowerment Codes of Good practice ("B-BBEE") which came into effect on 1 May 2015. Refer to the
detailed investor presentation available on the website for further information.
Transfer of listing to the Main Board of the JSE Limited
The Company has received approval from the JSE Limited ("JSE") to transfer its listing from a
secondary listing on the Alternative Exchange of the JSE ("Altx") to a dual primary listing on the Main
Board of the JSE. The approval is subject to the Company's Articles of Association being amended
to comply with the JSE Regulations and the successful migration of the Company to the United
Kingdom.
This will result in the Company having a dual primary listing on both AIM and the JSE Main Board,
which the Board believes will widen the Company's potential investor base, develop the Company's
governance framework and facilitate the Company's longer term growth ambitions.
An Extraordinary General Meeting ("EGM") will be requisitioned in order for shareholders to approve
these amendments to the Articles of Association. At the same EGM, the Company will propose a
long-term incentive scheme for employees of the Group. This scheme will aim to incentivise, attract
and retain key employees and align their interests with that of shareholders.
It is anticipated that the migration, the EGM and the Main Board listing will be completed before the
end of June 2017. Further information will be announced in relation to these matters in due course.
Outlook
The Company has laid a solid foundation for sustainable growth, with new diversified revenues and
stabilised core businesses well set to take advantage of any improvements in the South African
economy. Once Tiso Blackstar receives the proceeds from the sale of the KTH shareholding, the
balance sheet will be significantly strengthened and interest costs will reduce substantially.
The core businesses have performed satisfactorily to date in 2017 with key revenue streams above
prior year and earnings growth continuing. The transformation of the business into a multi-platform
diversified media company is proving successful and our market-leading brands continue to provide
strong cash flows to support future growth.
Highlights so far in 2017 include the successful launch and take-up of a paywall for our business titles
Business Day and Financial Mail, continued growth in advertising in our key products, and growth in
contractual income for our Retail Solutions business.
The Group intends to pay a special dividend of R40 million (GBP2.5 million*) once KTH sale proceeds
have been received.
We are currently looking at acquisition opportunities both in South Africa and internationally that
should add to the earnings of the Group.
Shareholders are advised that Tiso Blackstar has a detailed investor presentation which will be available
on the Company's website www.tisoblackstar.com from 22 March 2017.
AD Bonamour DKT Adomakoh
Non-executive Director Non-executive Chairman
20 March 2017
Interim condensed consolidated statements of income and other comprehensive income
Six months Six months
ended ended
31 December 31 December
2016 2016
Unaudited Unaudited
R'000 Notes GBP'000
4,534,350 Revenue 253,334
(3,684,806) Cost of sales (205,870)
849,544 Gross profit 47,464
(605,633) Operating expenses (33,836)
(117,017) Depreciation, amortisation and straight - lining of leases charge (6,536)
19,534 Other income 1,092
146,428 Operating profit 8,184
23,047 Other gains (losses) 1,279
169,475 Net profit 9,463
4,211 Finance income 235
(118,327) Finance costs 3 (6,611)
995 Share of profit of associates and joint ventures 56
56,354 Profit before taxation 3,143
(28,679) Taxation (1,602)
27,675 Profit from continuing operations 1,541
12,136 Profit from discontinued operation, net of taxation 4 678
39,811 Profit for the period 2,219
Profit (Loss) for the period attributable to:
46,745 Equity holders of the Group 2,606
(6,934) Non-controlling interest (387)
39,811 2,219
39,811 Profit for the period 2,219
Other comprehensive (loss) income, net of taxation - items that may
(45,522) subsequently be reclassified to profit and loss: 5 25,825
(45,522) Currency translation differences on the translation of foreign operations 418
Currency translation differences on the translation of Rand denominated
- Group entities to presentational currency 25,407
(5,711) Total comprehensive (loss) income for the period 28,044
Total comprehensive (loss) income attributable to:
1,223 Equity holders of the Group 26,870
(6,934) Non-controlling interest 1,174
(5,711) 28,044
17.50 Basic and diluted earnings per share (in cents/pence) 6 0.98
Basic and diluted earnings per share from continuing operations (in
12.95 cents/pence) 6 0.72
3.05 Basic and diluted headline earnings per share (in cents/pence) 6 0.17
267,175 Weighted average number of shares (net of treasury shares, in thousands) 267,175
Interim condensed consolidated statement of financial position
31 December 31 December
2016 2016
Unaudited Unaudited
R'000 Notes GBP'000
ASSETS
3,866,350 Non-current assets 228,103
904,632 Property, plant and equipment 53,371
17,617 Investment properties 1,039
1,139,846 Goodwill 67,247
1,296,419 Other intangible assets 76,485
392,172 Investments in associates and joint ventures 23,137
34,530 Other investments, loans and receivables 2,037
81,134 Deferred taxation 4,787
2,750,488 Current assets 162,271
1,057,827 Inventory 62,409
1,419,448 Trade and other receivables 83,743
273,213 Cash and cash equivalents 7 16,119
1,520,000 Assets held for sale 4 89,676
8,136,838 TOTAL ASSETS 480,050
EQUITY AND LIABILITIES
3,465,863 Capital and reserves attributable to the Group's equity holders 204,477
3,255,248 Share capital and premium 203,564
(20,494) Treasury shares (1,066)
443 Other reserves (22,033)
230,666 Retained earnings 24,012
200,936 Non-controlling interest 11,854
3,666,799 TOTAL EQUITY 216,331
LIABILITIES
1,274,855 Non-current liabilities 75,213
801,377 Borrowings 47,279
54,088 Other liabilities 3,191
71,837 Post-retirement benefits liabilities 4,238
347,553 Deferred taxation 20,505
2,800,184 Current liabilities 165,202
1,609,776 Trade and other payables 94,972
179,866 Borrowings 10,611
105,532 Other liabilities 6,226
9,518 Post-retirement benefits liabilities 562
895,492 Bank overdrafts and other short term borrowing facilities 7 52,831
395,000 Liability associated with non-current assets held for sale 4 23,304
4,470,039 TOTAL LIABILITIES 263,719
8,136,838 TOTAL EQUITY AND LIABILITIES 480,050
Interim condensed consolidated statement of changes in equity
Twelve months Six months Six months Six months Six months Twelve months
ended ended ended ended ended ended
30 June 31 December 31 December 31 December 31 December 30 June
2016 2015 2016 2016 2015 2016
Audited Unaudited Unaudited Unaudited Unaudited Audited
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
4,402,314 4,402,314 3,493,549 Balance at the beginning of the period 179,223 230,416 230,416
Changes in share capital and premium
18,025 18,025 - Shares issued for investment acquisition - 863 863
Changes in reserves
(906,869) 813 1,223 Total comprehensive income for the period 26,870 (37,446) (51,121)
(11,090) (9,469) (10,697) Movement in treasury shares (598) (454) (530)
1,293 1,293 - Shares issued for investment acquisition - 62 62
(445) (445) (6,208) Effect of acquisitions and disposals of subsidiaries (347) (19) (19)
(10,013) - (12,004) Dividends payable (671) - (466)
Total equity attributable to the Group's equity
3,493,215 4,412,531 3,465,863 holders 204,477 193,422 179,205
Changes in non-controlling interest
- - (6,934) Total comprehensive income for the period 1,174 - -
334 334 214,627 Effect of acquisitions and disposals of subsidiaries 11,058 18 18
- - (6,757) Dividends paid to non-controlling shareholders (378) - -
3,493,549 4,412,865 3,666,799 Balance at the end of the period 216,331 193,440 179,223
Comprising:
3,255,248 3,255,248 3,255,248 Share capital and premium 203,564 203,564 203,564
(9,797) (8,176) (20,494) Treasury shares reserve (1,066) (392) (468)
52,173 52,173 443 Other reserves (22,033) (74,547) (45,950)
195,925 1,113,620 230,666 Retained earnings 24,012 64,815 22,077
- - 200,936 Non-controlling interest 11,854 - -
3,493,549 4,412,865 3,666,799 216,331 193,440 179,223
An interim dividend of R10.0 million (GBP0.5 million) was declared in respect of the interim period ended 31 December 2015 and paid on 13 June 2016.
A final dividend of R12.0 million (GBP0.7 million) was declared in respect of the year ended 30 June 2016 and paid on 19 January 2017.
Interim condensed consolidated statement of cash flows
Six months Six months
ended ended
31 December 31 December
2016 2016
Unaudited Unaudited
R'000 Notes GBP'000
Cash flows from operating activities
281,291 Cash generated from operations 15,742
18,695 Dividend income received from investments 1,044
(115,001) Net finance costs paid (6,425)
1,200 Taxation refund received 67
(12,740) Taxation paid (712)
173,445 Net cash generated by operating activities 9,716
Cash flows from investing activities
(176,056) Acquisitions of tangible assets (9,836)
102,957 Proceeds on disposal of tangible assets 5,752
(17,634) Acquisitions of investments (980)
2,676 Proceeds on disposal of investments 150
(3,774) Acquisitions of intangible assets (211)
(611,268) Acquisitions of subsidiaries/businesses 8 (31,627)
(703,099) Net cash utilised by investing activities (36,752)
Cash flows from financing activities
101,653 Borrowings raised 5,679
(189,910) Borrowings repaid (10,589)
(10,697) Purchase of treasury shares (598)
(6,757) Dividends paid to non-controlling shareholders (378)
(105,711) Net cash utilised by financing activities (5,886)
(635,365) Net decrease in cash and cash equivalents (32,922)
13,086 Net cash and cash equivalents at the beginning of the period 671
- Exchange losses on cash and cash equivalents (4,461)
(622,279) Net cash and cash equivalents at the end of the period 7 (36,712)
Interim condensed consolidated statement of comprehensive income
Comparatives provided for the six months ended 31 December 2016
* As restated * As restated
Twelve months Six months Six months Twelve months
ended ended ended ended
30 June 31 December 31 December 30 June
2016 2015 2015 2016
Audited Unaudited Unaudited Audited
R'000 R'000 Notes GBP'000 GBP'000
422,952 400,366 Investment-related income 19,199 19,696
(1,036,271) (453,250) Net fair value and foreign exchange (losses) gains (21,735) (48,258)
(63,877) (37,477) Operating expenses (1,797) (2,976)
(677,196) (90,361) Operating loss (4,333) (31,538)
(48,865) (24,452) Net finance costs (1,173) (2,276)
1,251 465 Finance income 22 58
(50,116) (24,917) Finance costs (1,195) (2,334)
(726,061) (114,813) Loss before taxation (5,506) (33,814)
(955) (33) Taxation (2) (45)
(727,016) (114,846) Loss from continuing operations (5,508) (33,859)
Discontinuing operations
(179,853) 115,659 Profit (Loss) from discontinued operation, net of taxation 4 5,546 (8,375)
(906,869) 813 Profit (Loss) for the period 38 (42,234)
Other comprehensive loss - items that may
subsequently be reclassified to profit and loss:
Currency translation differences on the translation of
- - Rand denominated Group entities (37,484) (8,887)
Total other comprehensive loss recognised directly
- - in equity (37,484) (8,887)
(906,869) 813 Total comprehensive income (loss) for the period (37,446) (51,121)
Profit (Loss) for the period attributable to:
(906,869) 813 Equity holders of the parent 38 (42,234)
- - Non-controlling interests - -
(906,869) 813 38 (42,234)
Total comprehensive income (loss) attributable to:
(906,869) 813 Equity holders of the parent (37,446) (51,121)
- - Non-controlling interests - -
(906,869) 813 (37,446) (51,121)
Basic and diluted earnings (losses) per share (in
(339.40) 0.30 cents/pence) 6 0.01 (15.81)
Basic and diluted losses per share from continuing
(272.09) (43.00) operations (in cents/pence) 6 (2.06) (12.67)
Basic and diluted headline earnings (losses) per share
(339.12) 0.49 (in cents/pence) 6 0.02 (15.79)
Weighted average number of shares (net of treasury
267,199 267,093 shares, in thousands) 267,093 267,199
* Restated for discontinued operation - refer note 4
Interim condensed consolidated statement of financial position
Comparatives provided for the six months ended 31 December 2016
30 June 31 December 31 December 30 June
2016 2015 2015 2016
Audited Unaudited Unaudited Audited
R'000 R'000 GBP'000 GBP'000
Assets
2,343 2,514 Deferred tax assets 110 120
4,331 4,559 Equipment 200 222
2,369,958 4,800,693 Financial assets at fair value through profit and loss 210,442 121,581
1,955,133 2,792,192 Net investments in subsidiaries 122,398 100,300
399,697 1,993,699 Net investments in associates 87,395 20,505
15,128 14,802 Financial assets held for trading 649 776
1,520,000 - Assets held for sale - 77,978
198 228 Current tax assets 10 10
4,008 3,820 Trade and other receivables 167 206
13,086 29,208 Cash and cash equivalents 1,280 671
3,913,924 4,841,022 Total assets 212,209 200,788
Liabilities
(84) - Deferred tax liabilities - (4)
(1,195) (663) Other financial liabilities (29) (61)
(413,766) (421,573) Borrowings (18,480) (21,227)
(160) - Current tax liabilities - (8)
(5,170) (5,921) Trade and other payables (260) (265)
(420,375) (428,157) Total liabilities (18,769) (21,565)
3,493,549 4,412,865 Total net assets 193,440 179,223
Equity
2,554,036 2,554,036 Share capital 164,201 164,201
701,212 701,212 Share premium 39,363 39,363
52,173 52,173 Capital redemption reserve 4,599 4,599
(9,797) (8,176) Treasury shares reserve (392) (468)
- - Foreign currency translation reserve (79,146) (50,549)
195,925 1,113,620 Retained earnings 64,815 22,077
3,493,549 4,412,865 Total equity attributable to equity holders 193,440 179,223
- - Non-controlling interests - -
3,493,549 4,412,865 Total equity 193,440 179,223
Interim condensed consolidated statement of cash flows
Comparatives provided for the six months ended 31 December 2016
Twelve months Six months Six months Twelve months
ended ended ended ended
30 June 31 December 31 December 30 June
2016 2015 2015 2016
Audited Unaudited Unaudited Audited
R'000 R'000 GBP'000 GBP'000
Cash flow from operating activities
(43,599) 3,883 Cash generated (absorbed) by operations 186 (2,033)
(16,864) (45,824) Additions to investments (2,198) (759)
55,840 33,109 Proceeds from investments 1,589 2,588
99,469 74,691 Dividend and interest income received 3,582 4,632
(1,603) (332) Taxation paid (16) (75)
93,243 65,527 Cash generated by operating activities 3,143 4,353
Cash flow from investing activities
(3,698) (3,698) Purchase of equipment (177) (172)
25 - Proceeds on disposal of equipment - 1
1,251 465 Finance income received 22 58
(9) - Disposal of subsidiary, net of cash received - -
(2,431) (3,233) Cash absorbed by investing activities (155) (113)
Cash flow from financing activities
(26,234) (18,427) Borrowings repaid (884) (1,222)
(50,116) (24,917) Finance costs paid (1,195) (2,334)
(11,090) (9,469) Purchase of treasury shares (454) (530)
(10,013) - Dividends paid to equity holders of the parent - (466)
(97,453) (52,813) Cash absorbed by financing activities (2,533) (4,552)
Net increase (decrease) in cash and cash
(6,641) 9,481 equivalents 455 (312)
Cash and cash equivalents at the beginning of
19,727 19,727 the period 1,032 1,032
- - Exchange losses on cash and cash equivalents (207) (49)
Cash and cash equivalents at the end of the
13,086 29,208 period 1,280 671
Notes to the condensed consolidated interim financial statements
For the six months ended 31 December 2016
1. Basis of preparation
These condensed financial statements of the Group are prepared in accordance with the recognition and
measurement principles of International Financial Reporting Standards ("IFRSs") published by the International
Accounting Standards Board ("IASB") as endorsed for use by the European Union. They are prepared on the
going concern principle, using the historical cost basis, except for financial assets and financial liabilities held at
fair value through profit and loss that have been measured at fair value, and the accounting policies which are
expected to be applied in the preparation of the Group's annual financial statements for the year ending 30 June
2017. The Group has chosen not to adopt IAS 34 Interim Financial Statements in preparing the consolidated
interim financial statements.
The accounting policies and methods of computation are consistent with those applied in the annual financial
statements for the year ended 30 June 2016 with the exception of the changes adopted as a result of the Group's
change in status as an Investment Entity as detailed in note 2 below.
The financial information in this half-yearly report is unaudited and does not constitute statutory accounts for the
purposes of the Maltese Companies Act, 1995. The half-yearly report should be read in conjunction with the
Group's statutory accounts for the year ended 30 June 2016, which are prepared under IFRS and upon which an
unqualified auditors' report was given. The statutory accounts as at 30 June 2016 are available from the
Company's website, www.tisoblackstar.com, or by writing to the Company Secretary.
The functional currency of the Company is the South African Rand, being the currency of the primary economic
environment in which the Company and its subsidiaries operate. Tiso Blackstar is dual listed with a primary listing
on the AIM market of the London Stock Exchange ("AIM") and a secondary listing on the Altx of the JSE Limited
("JSE") in South Africa. As a result, Tiso Blackstar has two presentational currencies being South African Rand
("Rand") and Pounds Sterling ("Pounds Sterling").
2. Change in status as an Investment Entity
Effective 1 July 2016, there was a change in the Group's status as an Investment Entity as defined in IFRS 10
Consolidated Financial Statements. IFRS 10 specifies that an entity that ceases to be an Investment Entity shall
account for the change in its status prospectively from the date at which the change in status occurred. Further
guidance from IFRS 10 specifies that when an entity ceases to be an Investment Entity, it shall apply IFRS 3
Business Combinations to any subsidiary that was previously measured at fair value through profit or loss. The
date of the change of status shall be the deemed acquisition date. The fair value of the subsidiary at the deemed
acquisition date (being the carrying value of the investment as at 30 June 2016) shall represent the transferred
deemed consideration when measuring any goodwill or gain from a bargain purchase that arises from the deemed
acquisition. All subsidiaries are consolidated in accordance with IFRS 10 from the date of change of status.
Effective 1 July 2016, Tiso Blackstar no longer accounted for its net investments in subsidiaries and associates as
investments held at fair value through profit and loss but rather consolidated its subsidiaries and equity accounted
for its investments in associates. Subsidiaries which are no longer carried at fair value but rather consolidated
comprise TMG, CSI, Robor and the property subsidiaries. Details of the impact of the consolidation of these
subsidiaries are provided in note 8. Investments in associates RAG, MMG and Coopers have been equity
accounted from 1 July 2016.
In accordance with IFRS 10, the comparative periods ended 31 December 2015 and 30 June 2016 have not been
restated (with the exception of the discontinued operation, refer note 4) and are disclosed on a fair value basis. Due
to the significant change in the nature of the statements, the comparatives are provided as separate statements
and are not included as additional columns within the current year's statements.
3. Finance costs
Finance costs for the current reporting period can be analysed as follows:
Six months Six months
ended ended
31 December 31 December
2016 2016
Unaudited Unaudited
R'000 GBP'000
49,426 TMG 2,761
20,908 CSI (non-core subsidiary) 1,168
16,831 Robor (non-core subsidiary) 940
31,162 Other: 1,742
25,281 Finance cost on acquisition debt to be settled on completion of KTH sale 1,413
Finance cost within the property subsidiaries relating to investment
5,881 properties, the majority of which were sold during the period 329
118,327 6,611
4. Discontinued operation
In the prior year, Tiso Blackstar announced its change in strategy to focus on investments in media and related
industries, and to therefore dispose of its non-core assets. In line with this, Tiso Blackstar commenced
negotiations to dispose of its interest in KTH during the previous reporting period and subsequently concluded an
agreement of sale which is expected to be completed in May 2017.
In the prior year ended 30 June 2016, KTH was disclosed as a discontinued operation, and classified and
disclosed as a non-current asset held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations. Comparatives for the six months ended 31 December 2015 have been restated for this
discontinued operation and for the current reporting period relating income and expenses associated with the
investment in the associate have been disclosed under the discontinued operation. At 31 December the investment
in KTH (carried at fair value less costs to sell) remains disclosed as a non-current asset held for sale on the
consolidated statement of financial position. As Tiso Blackstar is required to use the sale proceeds to settle the
relating acquisition debt on conclusion of the sale (and has disclosed its intention to do so), the relating acquisition
debt is separately disclosed as a Liability associated with non-current assets held for sale.
5. Other comprehensive (loss) income, net of taxation
Other comprehensive (loss) income comprises of the foreign currency translation adjustments recognised in the
Foreign Currency Translation Reserve. These currency adjustments arise on restatement of the Group's
investments in its African based associates RAG, MMG and Coopers as well as the African based foreign
operations held by CSI and TMG to the Group's functional currency Rands at the closing rate at 31 December
2016. An additional charge to other comprehensive income arises in the Pounds Sterling statement of
comprehensive income as a result of the translation of the Group's results from its functional currency Rands to its
presentational currency Pounds Sterling.
Currency translation differences recognised in other comprehensive (loss) income comprises of the following:
Six months Six months
ended ended
31 December 31 December
2016 2016
Unaudited Unaudited
R'000 GBP'000
(45,522) On translation of the following foreign operations and associates: 418
(2,757) Foreign operations held by CSI and TMG (154)
(16,126) Investment in associate RAG 641
(24,929) Investment in associate MMG (50)
(1,710) Investment in associate Coopers (19)
- On translation of the Group's results from Rands to Pounds Sterling 25,407
Other comprehensive (loss) income, net of taxation per the
(45,522) statement of comprehensive income 25,825
6. Basic and diluted headline earnings (losses) per share^
* As restated * As restated
Twelve months Six months Six months Six months Six months Twelve months
ended ended ended ended ended ended
30 June 31 December 31 December 31 December 31 December 30 June
2016 2015 2016 2016 2015 2016
Audited Unaudited Unaudited Unaudited Unaudited Audited
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
Profit (Loss) for the period attributable to equity holders of the
(727,016) (114,846) 34,609 Group from continuing operations 1,928 (5,508) (33,859)
Profit (Loss) for the period attributable to equity holders of the
(179,853) 115,659 12,136 Group from the discontinued operation 678 5,546 (8,375)
Profit (Loss) for the period attributable to equity holders of
(906,869) 813 46,745 the Group 2,606 38 (42,234)
- - (36,808) Gains on investment properties (2,056) - -
- - (12,183) Revaluation gain on acquisition of controlling interest (681) - -
- - (1,745) Gain on bargain purchase (90) - -
- - 2,411 Loss on disposal of investments 135 - -
3 4 (697) (Profit) Loss on disposal of equipment (39) - -
Impairment of loans designated at fair value through profit and
737 697 - loss - 33 34
(1) (196) 10,434 Total tax effects of adjustments 583 (9) -
(906,130) 1,318 8,157 Headline earnings (losses) 458 62 (42,200)
Weighted average number of shares in issue (net of
267,199 267,093 267,175 treasury shares, in thousands) 267,175 267,093 267,199
(339.40) 0.30 17.50 Basic and diluted earnings (losses) per share (in cents/pence) 0.98 0.01 (15.81)
Basic and diluted earnings (losses) per share from continuing
(272.09) (43.00) 12.95 operations (in cents/pence) 0.72 (2.06) (12.67)
Basic and diluted headline earnings (losses) per share (in
(339.12) 0.49 3.05 cents/pence) 0.17 0.02 (15.79)
^ Disclosure of headline earnings has been provided in accordance with the JSE Listing Requirements
* Restated for discontinued operation - refer note 4
7. Net cash and cash equivalents
Net cash and cash equivalents for the current reporting period can be analysed as follows:
31 December 31 December
2016 2016
Unaudited Unaudited
R'000 GBP'000
(14,347) TMG (846)
(289,838) CSI (non-core subsidiary) (17,100)
(330,811) Robor (non-core subsidiary) (19,517)
12,717 Other 751
(622,279) (36,712)
273,213 Cash and cash equivalents 16,119
(895,492) Bank overdrafts and other short term borrowing facilities (52,831)
(622,279) Net cash and cash equivalents per the statement of cash flow (36,712)
8. Business combinations
Per note 2, effective 1 July 2016, there was a change in the Group's status as an Investment Entity as defined in
IFRS 10 and from this date, the Group applied IFRS 3 Business Combinations to any subsidiary that was
previously measured at fair value through profit or loss. The fair value of the subsidiary as at 1 July 2016
("Deemed Acquisition Date") represents the transferred "Deemed Consideration" when measuring any goodwill or
gain from a bargain purchase that arises from the deemed acquisition. All subsidiaries were consolidated in
accordance with IFRS 10 from the date of change of status.
Subsidiaries which are no longer carried at fair value but rather consolidated ("the Deemed Acquisitions") comprise
TMG, CSI, Robor and the property subsidiaries. Details of the significant classes of assets and liabilities
recognised as a result of the Deemed Acquisitions are provided below. During the period ended 31 December
2016, other, less significant acquisitions of subsidiaries and businesses took place ("Other Business Acquisitions").
The initial accounting for some of the business acquisitions has only been provisionally determined at the reporting
date. At the date of finalisation of these condensed consolidated interim financial statements, the necessary
market valuations and other calculations for certain Other Business Acquisitions had not been finalised and they
have therefore only been provisionally determined based on the directors' best estimate of the likely values. If new
information obtained within one year of the date of any of the acquisitions about facts and circumstances that
existed at the date of acquisition, identifies adjustments to the above amounts, or any additional provisions that
existed at the date of acquisition, then the accounting for the acquisition will be revised.
Six months ended Six months ended
31 December 31 December
2016 2016
Other Other
Deemed Business Business Deemed
Acquisitions Acquisitions Total Total Acquisitions Acquisitions
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
872,187 40,785 912,972 Tangible assets 47,020 2,277 44,743
1,316,242 8,184 1,324,426 Intangible assets 67,982 457 67,525
Investments in associates, joint ventures and other investments and loan
64,333 - 64,333 receivables 3,301 - 3,301
1,147,278 16,642 1,163,920 Inventory 59,786 929 58,857
1,452,004 117,398 1,569,402 Trade and other receivables 80,675 6,186 74,489
129,859 36,654 166,513 Cash and cash equivalents 8,542 1,880 6,662
385 - 385 Non-controlling interests 20 - 20
(262,954) (3,706) (266,660) Net deferred taxation (13,706) (216) (13,490)
(1,217,288) (19,447) (1,236,735) Borrowings and other liabilities (63,536) (1,087) (62,449)
(42,601) - (42,601) Contingent liabilities (2,185) - (2,185)
(1,684,389) (130,112) (1,814,501) Trade and other payables (93,165) (6,754) (86,411)
(719,086) (11,894) (730,980) Bank overdrafts and other short term borrowing facilities (37,555) (665) (36,890)
Identifiable assets and liabilities at fair value at acquisition/Deemed
1,055,970 54,504 1,110,474 Acquisition Date 57,179 3,007 54,172
(204,679) (3,951) (208,630) Non-controlling interests (10,703) (202) (10,501)
1,105,587 34,261 1,139,848 Goodwill 58,478 1,759 56,719
(1,745) - (1,745) Gain on bargain purchase (90) - (90)
1,955,133 84,814 2,039,947 Total 104,864 4,564 100,300
Less Deemed Consideration on change in status as an Investment Entity and fair
(1,955,133) (38,013) (1,993,146) value of existing shareholding on step up acquisitions (102,250) (1,950) (100,300)
- 46,801 46,801 Purchase consideration paid in cash 2,614 2,614 -
Cash flow
- (46,801) (46,801) Cash consideration paid for Other Business Acquisitions (2,614) (2,614) -
(589,227) 24,760 (564,467) Consolidated cash from acquisitions (29,013) 1,215 (30,228)
(589,227) (22,041) (611,268) Cash flow on acquisition (31,627) (1,399) (30,228)
9. Segmental analysis
As a result of its change in status from an Investment Entity, the Group has reviewed its segments and
identified its operating segments based on the nature of the operating segment. The reportable segments are
as follows:
- Media: the division houses the Group's interest in the distribution of knowledge and content via print, online
and radio assets and other platforms;
- Retail Solutions: the division includes the activities on retail advertising production systems and related
database management and development, and retail print via H&C and Uniprint;
- African investments: includes the Group's interests in the associates RAG in Kenya, MMG in Ghana and
Coopers in Nigeria;
- CSI: a wholly owned subsidiary comprising of Stalcor which is a processor, distributor and stockist of carbon
steel, stainless steel and aluminium in the form of high quality sheet, plate and coil as well as structural and
other long product profiles, and GRS which is a steel roofing and cladding company;
- Robor: in which the Group holds a 51% interest is a manufacturer and supplier of welded steel tube and pipe
and cold formed steel profiles; and
- Other: comprising of investments that are not deemed to be material to the Group including the property
subsidiaries, assets held for sale (KTH), and other consolidated Group companies.
*Refer to the Directors' statement for the detailed segmental analysis for the current financial period.
A reconciliation of the EBITDA per segmental analysis to the net profit for the period per the statement of
comprehensive income is provided below:
Six months
ended
31 December
2016
Unaudited
R'000
EBITDA 269,536
Depreciation (63,119)
Amortisation (35,909)
Straight -lining of leases (17,989)
Net profit (loss) on disposal of assets 30,204
Exceptional/non recurring net gains (losses) (13,248)
Net profit per the statement of comprehensive income 169,475
10. Results presentation
Shareholders are advised that Tiso Blackstar has a detailed investor presentation which is available on the
Company's website www.tisoblackstar.com.
20 March 2017
For further enquiries, please contact:
Tiso Blackstar Group SE Leanna Isaac + 356 2137 3360
Northland Capital Partners Tom Price, Gerry Beaney,
Margarita Mitropoulou + 44 (0) 203 861 6625
PSG Capital Proprietary Limited David Tosi +27 (0) 21 887 9602
Date: 20/03/2017 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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