Wrap Text
Unaudited Consolidated Interim Results for the Six Months Ended 31 December 2016
COGNITION HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1997/010640/06)
Share code: CGN ISIN: ZAE000197042
(“Cognition” or “the Group” or “the Company”)
UNAUDITED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS
ENDED 31 DECEMBER 2016
COMMENTARY
The board of directors of Cognition (“the board”) present the unaudited
condensed consolidated interim financial results for the six months
ended 31 December 2016 (“the interim period”), which should be read
in conjunction with the audited annual financial statements for the
year ended 30 June 2016.
The unaudited condensed consolidated interim financial results are
available to be viewed on the Company’s website: www.cgn.co.za.
The Group’s revenue for the interim period compared to the previous
corresponding period increased by 47.5% from R82 million to R121 million.
This is primarily due to increased business activity within the
Knowledge Creation and Management segment of the business which now
constitutes 77% of the Group’s revenue and 64% of the gross profit.
The historical core business of the Group (Active Data Exchange Services
which includes Fax2Email) is still delivering good margins. Revenue
has declined from R39 million to R28 million, a 29% decline when compared
to the same period last year, however the decline in gross profit was
only 14%. The combined gross profit of the Group increased from R40.4
million to R48.2 million, a 20% increase.
Profit before tax increased by 20% from R12 million to R14.5 million
and profit after tax increased by 27.1% from R8.8 million in the previous
corresponding period to R11.2 million in this reporting period.
During the period under review, the Group used its cash resources to:
- develop new products;
- pay-out R11 million in dividends; and
- increase its working capital to fund the additional revenue of the
Group.
The cash resources of the Group remain healthy at R74.2 million.
The net asset value per share of the Group remained steady at 104.88
cents per share.
OPERATIONAL OVERVIEW
The Group has made positive strategic and operational inroads to
re-invent itself as an important player in the Knowledge Economy.
Whilst our historical heritage in Active Data Exchange Services (SMS,
USSD, IM and faxing solutions) continues to provide good annuity income,
we have spent the last two years developing new and exciting products
to establish new sources of revenue and open up previously unexplored
markets in order to facilitate growth.
Active Data Exchange Services
In simple terminology, these incorporate a wide range of bearer services
such as SMS, Interactive Voice Response, USSD, Instant Messaging, email
services and the like. These services are all provided via our contracts
with the mobile networks (Vodacom, MTN, Cell C and Telkom) on the basis
that the Group generates traffic on the networks and, in return, the
networks provide the Group with a volume-driven rebate for the traffic.
This varies per network based on volume thresholds.
For the Group to “generate the traffic”, we engage with businesses,
digital agencies and players within the Fast Moving Consumer Goods
environment to create “data pull” strategies or Call2Action campaigns
via:
- brands directly;
- advertising agencies; and
- digital platforms.
We have refined this offering via our MediaWorx division which provides
three core solutions:
Media Infotainment (“MI”)
MI has a niche market providing media and production outlets with a
technical platform to engage with viewers (television) or listeners
(radio) for instant interaction in the form of comment lines, voting
services or snap polls.
These services are offered to well-known game shows such as Idols, The
Voice SA, Big Brother Africa, X-Factor and Strictly Come Dancing.
The collection of this data is basic and incorporates minimalistic
demographic data which is typically not used for any further analytics
or insights.
Retail Promotions (“RP”)
Generally brands promote their products or services via a competition
or promotion which we call “Consumer Engagement”.
We have successfully developed a methodology with these brands to, in
addition to promoting the product, also establishing basic communities
around these competitions and promotions, through the collection of
minimal yet meaningful data in order to facilitate an ongoing
interaction with the consumer. To this end we collect, store and
normalise demographic and psychographic data for future insights and
interactions.
An example of clients operating within this framework include Caxton
(publications and magazines), Unilever, Huletts, Pep, Imana and over
100 other well-known brands.
Data Investment (“DI”)
We have focussed our energies on enhancing our DI initiatives (as these
fall within the realm of “Big Data”) and the leverage that can be achieved
with insights into and around such data. DI applications are applied
to clients who are serious about building granular databases to better
understand their customers.
Due to the fact that data forms an essential foundation to our Knowledge
Economy strategy, we have developed a Business Intelligence (“BI”)
capability of collecting, normalising, storing and reflecting clients’
data in the form of visual representation or topology. This
visualisation makes the data instantly meaningful to management in the
shortest possible time.
Clients utilising this framework include SAB (all brands), Pep, DStv,
Ackermans and Caxton.
Faxing Solutions
As previously reported, our Fax2Email volumes have declined over the
last three years as a natural evolution of changing technology and
innovation. While we currently have an active database of over 150 000
subscribers, the average rate per user (“ARPU”) has declined. Fax2Email
continues to provide annuity income and positive cash flows, and
requires minimal resources given that the process is fully automated.
Email2Fax, being the opposite to Fax2Email, which enables the sending
of a fax from a PC, continues to grow by approximately 8% year on year,
albeit off a low base. This is a prepaid service with no risk of bad
debt.
Whilst faxing is showing a decline, there is still a need for companies,
SMMEs, professionals and individuals to send documents securely in the
digital environment.
An evaluation of the market reflects a number of sectors, including
medical, insurance, financial and legal, that require secure transfer
of documents with authentication and irrefutable audit trails.
To service these markets, the Group has, over the last year, developed
a new platform called SecurDox which embraces Blockchain encryption
technology, enabling both the sender and receiver to extract a
certificate that contains an authenticated audit trail of “send” and
“receive” and other key metadata.
The SecurDox platform is cloud-based with a choice of three security
features, being Lite, Premium or Platinum, the latter being the most
secure with private keys being required on the sender’s and receiver’s
devices to access a document. All options incorporate Blockchain
encryption. SecurDox was fully launched in February 2017, post this
six month reporting period. Accordingly, revenue for this new product
is only anticipated in the second half of this financial year. We expect
to replace the declining revenue from Fax2Email with SecurDox revenue.
Knowledge Creation and Management
Any forward-thinking business, especially in the new digital economy,
needs to use data to maximise returns. Our philosophy is to place our
clients in a position where they can have “a single source of truth”
of their aggregated consumer data. This involves collecting raw data
and adding context and meaning via normalisation so that the client
can extract insights and have the ability to communicate on a one-to-one
basis with their customers.
This is a journey and requires clients to have a paradigm shift around
engaging in a new digital economy to boost revenue.
To provide this “single source of truth” we have developed complementary
routes to market, incorporating:
- Research capabilities;
- Channel incentive programmes; and
- mibubble, incorporating Knowledge 350°.
Research Capabilities
These are executed via four distinct brands: BMi Research Proprietary
Limited (“BMi Research”), BMi Sport Proprietary Limited (“BMi Sport”),
Livingfacts Proprietary Limited (“Livingfacts”) and Cognition
Insights, a division of Cognition.
BMi Research performed extremely well in the six months under review
under the strong leadership of the CEO, Gareth Pearson. The company
represents exceptionally strong brands in its service delivery and
continues to make inroads into new markets in both South Africa and
Africa. BMi Research provides the following services:
- Category Quantifications
- Commissioned
- Consumer
- Eye Tracking
- In-Store Observations
- Mystery Shopping
- Shopper Insights
- Print Ads
Under the guidance of the CEO, Dave Sidenberg, BMi Sport has undergone
a number of operational and strategic changes during the period under
review. The company has positioned itself to be a leader in niche markets
such as:
- Sports tracking & sponsorship evaluation
- Strategic advertising evaluation
- Socio-economic & sporting impact valuation
- PR & clippings (Radio/TV/Print/Digital)
The strategic and operational changes undertaken in the last six months
are expected to yield positive results going forward.
Livingfacts provides strategic and personal services to a broad range
of blue chip clients under the strong leadership of the CEO, Marylou
Kneale. The services offered by Livingfacts include:
- Qualitative Research
- Quantitative Research
- Customer differentiation strategies
- Desk research
- Data, Information, Knowledge
Cognition Insights, headed by Laurie Cunningham, provides a niche
service around building communities of individuals who share common
interests. A bespoke platform (MyPoint) has been developed by the Group
to facilitate surveys to community members.
All divisions within the Group embrace the services of the extensive
internal research capabilities to assist clients in achieving the
journey towards a single source of truth and to provide empirical data
services.
With highly focussed management teams, we anticipate continued growth
from all of these businesses.
Channel Incentive Programmes
Channel Incentive Programmes is a new division, discipline and route
to market which the Group has developed over the last 16 months. During
this period, we have built and refined an incentive platform for clients
which now offers huge potential going forward. The incentive platform
is a proprietary platform with a defined set of business rules to
accommodate various clients operating in different sectors of the
economy.
Our proprietary incentive offering incorporates:
- A registration platform;
- FICA platform;
- Card logistics platform;
- Moderation platform; and
- Financial settlement platform.
The underlying philosophy is a platform designed to provide our clients
with:
- Motivation tools;
- Staff or agent behaviour modification;
- Morale enhancement;
- Recognition and reward for effort; and
- Recognition and reward.
Having developed the platform with a number of small clients, we
concluded an agreement with a large well-known mobile phone brand which
has enabled us to issue over 10 000 bank cards as the methodology for
agents of the client to receive rewards. The incentive platform has
moderated over 300 000 claims in the last six months exceeding R45.4
million in value.
Subsequent to this interim reporting period, we have concluded an
agreement with our second client, a large appliance company, to provide
them with a nationwide incentive programme.
We have identified this platform as an important strategic growth pillar
for the Group and our focus is to grow this division aggressively.
mibubble Incorporating Knowledge 350°
The world has developed “Exchanges” or “Clearing Houses” for a number
of asset classes such as stocks/shares, foreign currency, commodities
and futures. These exchanges act as an interface between “buyers” and
“sellers”.
The World Economic Forum has referred to Personal Data as the New Asset
Class. Individuals are producers, creators and owners of their digital
activities (data), yet there are no rules, norms, structures or
frameworks for an equitable exchange of the data between buyers
(businesses) and sellers (individuals).
Based on expansive research in the USA and Europe, there is a clear
need for a platform to establish a framework to launch an “Exchange
Platform Clearing House” for personal data. mibubble is such a platform
and, via its structure, philosophy and framework, establishes a trusted
framework for:
- Transparency;
- Trust;
- Control; and
- Value.
In addition, its structure creates an important forensic oversight
element to enable the four key elements (transparency, trust, control
and value) to be assessed on an ongoing basis.
mibubble provides the platform for consumers to store, manage and share
their personal data (demographic, psychographic and ethnographic),
documents, medical information etc with businesses of their choice.
mibubble is a trusted infomediary that acts as a “Clearing House” to
manage the exchange of value and never owns the consumers’ data. mibubble
is a “custodian” for the data and a facilitator for the exchange.
mibubble, which is available as an App for Android and Apple, is also
a fully integrated website. The solution is an intricate integration
of 16 modules incorporating documents, medical, passwords, extended
profiles, loyalty cards, payment gateways, e-wallets, financial
indicators, community surveys, credit reports, supplier interaction
and a fully-fledged loyalty programme.
The solution is managed with the proprietary mibubble platform which
incorporates:
- an Administration Portal;
- a Finance Engine;
- a Vendor Management Portal;
- a Loyalty Partner Portal;
- a Marketing Engine/Portal; and
- a Knowledge 350°TM BI tool for insights.
The platform was built over a twelve month period and the IP is owned
by Cognition.
The solution and platform are designed to operate in any geographic
location or country-specific ecosystem.
mibubble has been patented and will be launched during the second quarter
of 2017.
Our proprietary Data Management Platform (“DMP”) within mibubble is
a radical paradigm shift as it enables consumers to self-curate their
own demographic, psychographic and ethnographic data and then share
categories of this data with businesses of their choice for reward.
Once subscribers have completed their extended profiles the data is
stored in the DMP and then visually displayed in our proprietary
Knowledge 350° BI tool in visual format.
Our clients can then communicate directly with each and every customer
on a one-to-one basis via the mibubble marketing platform.
mibubble, via its patented process, enables businesses (our clients)
to access consumers’ data, using data obfuscation and anonymisation,
thereby avoiding the need to comply with the Protection of Personal
Information Act (Act 4 of 2013) and General Data Protection Regulation.
We believe that mibubble is extremely innovative and will be a game
changer, particularly when regulation and privacy legislation becomes
a reality in South Africa and the rest of the world.
Acquisition of an interest in Tysflo
The group acquired a 17% interest in Tysflo, an embryonic hardware and
software platform which is an online TV solution comprising linear TV,
VOD clips, events, branded channels and user generated content.
PROSPECTS
Over the last six months the Group has taken the appropriate strategic
and operational steps required to transform into the “Knowledge Economy”
and to proactively move onto a new growth trajectory.
Our historical Active Data Exchange services continue to provide good
annuity income and the necessary stability to enable us to develop our
new, innovative platforms (SecurDox, Channel Incentives and mibubble).
Our energy is now focussed on the marketing and deployment of the
aforementioned new and exciting platforms, opening new markets and
opportunities for the Group. We believe that the products which we are
introducing are disruptive technologies to the industry.
Despite difficult trading conditions within South Africa, we are
confident that our new platforms will open up new revenue streams and
complementary opportunities.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited Unaudited Audited
Growth as at as at as at
31-Dec 31-Dec 30-Jun
2016 2015 2016
R'000 R'000 R'000
ASSETS
Non-current assets 5.8% 70 949 67 061 68 169
Property, plant and
equipment -8.5% 17 311 18 916 18 036
Intangible assets 18.8% 16 827 14 165 14 740
Goodwill 24.5% 30 332 24 362 30 332
Investment in associates 43.7% 5 633 3 919 4 221
Loans receivable -100.0% - 4 496 -
Investments -100.0% - 176 -
Deferred tax asset -17.6% 846 1 027 840
Current assets 20.8% 126 390 104 660 120 322
Inventory -34.8% 275 422 300
Current tax receivable 514 - -
Trade and other receivables 40.9% 51 359 36 461 40 500
Cash and cash equivalents 9.5% 74 242 67 777 79 522
Total assets 197 339 171 721 188 491
EQUITY AND LIABILITIES
Capital and reserves 6.8% 147 247 137 821 146 907
Share capital 0.0% 137 137 137
Share premium -0.3% 55 806 55 973 55 806
Accumulated profits 10.0% 94 524 85 959 95 171
Change in ownership (6 135) (5 844) (6 135)
Attributable to the
equity holders of the
parent 6.0% 144 332 136 225 144 979
Non-Controlling
interests 2 915 1 596 1 928
Non-current liabilities 42.2% 11 562 8 128 12 270
Interest bearing
liabilities -72.7% 861 3 150 1 813
Other Financial
Liabilities 321.5% 7 022 1 666 7 022
Deferred tax liability 11.1% 3 679 3 312 3 435
Current liabilities 49.5% 38 530 25 772 29 314
Trade and other payables 64.6% 34 412 20 910 24 358
Provisions 26.9% 1 656 1 305 1 997
Tax payable - 869 154
Unclaimed dividends 7.2% 149 139 150
Current portion of non-
current liabilities -9.3% 2 313 2 549 2 655
Total equity and
liabilities 197 339 171 721 188 491
Net asset value per share
(cents) 6.02% 104.95 98.99 105.42
Net tangible asset value
per share (cents) -0.47% 70.66 70.99 72.76
Number of shares in issue -0.06% 137 527 659 137 615 798 137 527 659
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months 12 months
Growth ended ended ended
31-Dec 31-Dec 30-Jun
2016 2015 2016
R'000 R'000 R'000
Revenue 47.5% 121 050 82 079 173 893
Cost of Sales 74.6% (72 780) (41 686) (92 439)
Gross profit 19.5% 48 270 40 393 81 454
Other operating income -50.3% 391 787 2 228
Staff costs 15.0% (24 122) (20 968) (43 154)
Depreciation and
amortisation expense 8.3% (3 186) (2 942) (6 486)
Other operating expenses 18.0% (9 747) (8 261) (16 524)
Finance costs -16.3% (210) ( 251) ( 518)
Income from associates 11.1% 431 388 631
Investment income -9.4% 2 599 2 868 5 158
Profit before tax 20.1% 14 427 12 013 22 789
Income tax expense 0.8% (3 223) (3 198) (4 207)
Profit for the period 27.1% 11 204 8 815 18 582
Other comprehensive
income
Total comprehensive
income for the year 27.1% 11 204 8 815 18 582
Profit attributable to:
Non-controlling interest 54.8% 843 544 355
Owners of the parent 25.3% 10 361 8 272 18 227
Weighted average number
of shares in issue -0.1% 137 527 659 137 615 798 137 565 088
Basic earnings per share
(cents) 25.3% 7.53 6.01 13.25
Headline earnings per
share (cents) 25.3% 7.53 6.01 13.25
Diluted earnings per
share(cents) 25.3% 7.53 6.01 13.25
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Total
Share Share Change in Share
Capital Premium ownership Capital
R’000 R’000 R’000 R’000
Audited balance at 1 July 2015 137 55 973 - 56 110
Changes in equity
Total comprehensive income for
the period - - - -
Dividends - - - -
Non-Controlling interest as a
result of acquisition - - - -
Changed in ownership in
subsidiary - - (5 844) (5 844)
Total changes - - (5 844) (5 844)
Audited balance at 1 January
2016 137 55 973 (5 844) 50 266
Changes in equity
Total comprehensive income for
the period - - - -
Purchase of own/treasury shares - ( 167) - ( 167)
Dividends - - - -
Changed in ownership in
subsidiary - - ( 291) ( 291)
Non-controlling interest as
result of purchase price
allocation -
Non-controlling interest as
result of acquisition - - - -
Total changes - ( 167) ( 291) ( 458)
Audited balance at 1 July 2016 137 55 806 (6 135) 49 808
Changes in equity
Total comprehensive income for
the period - - - -
Non-controlling interest as
result of purchase price
allocation - - - -
Changed in ownership in
subsidiary - - - -
Dividends - - - -
Total changes - - - -
Unaudited balance at
31 December 2016 137 55 806 (6 135) 49 808
Attri- Non-
Retained butable Control- Total
Income to Equity ling Equity
Holders Interest
R’000 R’000 R’000 R’000
Audited balance at 1 July
94 200 150 310 1 467 151 777
2015
Changes in equity
Total comprehensive income
8 815 8 815 544 9 359
for the period
Dividends (17 057) (17 057) - (17 057)
Non-Controlling interest as
- - 4 761 4 761
a result of acquisition
Changed in ownership in
- (5 844) (5 176) (11 020)
subsidiary
Total changes (8 242) (14 086) 129 (13 957)
Audited balance at 1 January
85 958 136 224 1 596 137 820
2016
Changes in equity
Total comprehensive income
9 411 9 411 ( 189) 9 222
for the period
Purchase of own/treasury
- ( 167) - ( 167)
shares
Dividends ( 199) ( 199) - ( 199)
Changed in ownership in
- ( 291) 291 -
subsidiary
Non-controlling interest as
result of purchase price - - 408 408
allocation
Non-controlling interest as
- - ( 178) ( 178)
result of acquisition
Total changes 9 212 8 754 332 9 086
Audited balance at 1 July
95 170 144 978 1 928 146 906
2016
Changes in equity
Total comprehensive income
10 361 10 361 843 11 204
for the period
Non-controlling interest as
result of purchase price - - 144 144
allocation
Changed in ownership in
- - - -
subsidiary
Dividends (11 008) (11 008) - (11 008)
Total changes ( 647) ( 647) 987 340
Unaudited balance at 31
December 2016 94 523 144 331 2 915 147 246
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31-Dec 31-Dec 30-Jun
2016 2015 2016
R'000 R'000 R'000
Cash flow from operating activities 12 399 4 909 21 107
Net cash generated from operations 13 672 3 893 22 705
Finance costs ( 210) ( 251) ( 261)
Investment income 2 599 2 868 5 158
Normal tax paid (3 662) (1 602) (6 495)
Cash flow from investing (5 377) (16 695) (19 291)
activities
Purchase of property, plant and
equipment ( 100) (3 350) (3 660)
Purchase of intangible
(1 385) - ( 733)
asset
Business combination - 898 898
Purchase of additional equity in
- (11 019) (11 019)
Subsidiary
Increase in investment - ( 176) -
(Increase) / Decrease Investment in
(1 412) 184 ( 880)
Associate
Normal Product Development costs (2 480) (3 232) (3 897)
Cash flow from financing activities (1 294) 1 467 ( 188)
Dividends paid (11 008) (17 043) (17 245)
Net (decrease) in cash and cash
equivalents (5 280) (27 362) (15 617)
Cash and cash equivalents at 79 522 95 139 95 139
beginning of the period
Cash and cash
equivalents at
end of the period 74 242 67 777 79 522
BASIS OF PREPARATION
The unaudited condensed consolidated interim results for the six months
ended 31 December 2016 have been prepared in accordance with
International Financial Reporting Standards (“IFRS”) and are presented
in terms of the disclosure requirements set out in International
Accounting Standards (“IAS”) 34, as well as the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and
the Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council, the Listings Requirements of the JSE
Limited and the requirements of the Companies Act 2008 (Act 71 of 2008),
as amended. The unaudited condensed consolidated interim financial
information should be read in conjunction with the audited annual
financial statements for the year ended 30 June 2016.
Accounting policies and computations are consistently applied as in
the annual financial statements for the year ended 30 June 2016.
During the interim period, the Group adopted those standards and
interpretations in issue and effective for the interim period. The
adopting of these new and amended standards and interpretations has
not had a significant impact on the Group’s adopted accounting policies.
These financial statements have been compiled under the supervision
of the Financial Director, Pieter Scholtz.
The unaudited condensed consolidated interim results for the six months
ended 31 December 2016 have not been reviewed by the Group’s auditor.
CASH GENERATED (USED IN) OPERATIONS
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31-Dec 31-Dec 30-Jun
2016 2015 2016
R'000 R'000 R'000
A RECONCILIATION OF PROFIT BEFORE
TAXATION TO CASH GENERATED FROM
OPERATIONS
Profit before taxation 14 427 12 013 22 789
Adjustments for: 25 ( 78) 235
Depreciation 3 186 2 942 6 486
Provisions ( 341) ( 15) 677
Finance costs 210 251 518
(Profit) / Loss on disposal of
property, plant and equipment - - ( 1)
Reversal of impairment - - 10
Contingent Consideration - - (1 666)
Income in associates ( 431) ( 388) ( 631)
Investment income (2 599) (2 868) (5 158)
Operating profit before working
capital changes
Working capital changes ( 780) (8 042) ( 319)
Decrease / (Increase) in
inventory 25 ( 11) 110
Decrease / (increase) in trade and
other receivables (10 858) (9 794) (2 712)
(Decrease) / Increase in trade and
other payables 10 053 1 763 2 283
Cash generated from
operations 13 672 3 893 22 705
SEGMENTAL REPORTING
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision makers (the “CODM”).
The CODM has been identified as the executive committee members who
make strategic decisions. The CODM have organised the operations of
the Company based on its brands and this has resulted in the creation
of the following reportable segments:
•Active Data Exchange Services
•Knowledge Creation and Management
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31-Dec 31-Dec 30-Jun
2016 2015 2016
R'000 R'000 R'000
Revenue
Active Data Exchange
Services 27 893 38 967 73 574
Knowledge Creation and
Management 93 157 43 112 100 319
121 050 82 079 173 893
Cost of sales
Active Data Exchange
Services (10 893) (19 037) (35 073)
Knowledge Creation and
Management (61 887) (22 649) (57 366)
(72 780) (41 686) (92 439)
Gross Profit
Active Data Exchange
Services 17 000 19 930 38 501
Knowledge Creation and
Management 31 270 20 463 42 953
48 270 40 393 81 454
The accounting policies applied to the operating segments are the same
as those described in the basis of preparation paragraph above. Active
Data Exchange Services are provided within South Africa as well as in
36 African countries (“Africa sales”). Within the period under review,
5.5% (2015: 3.6%) of the Company’s revenue can be attributed to Africa
sales. The Company allocates revenue to each country based on the
relevant domicile of the client. All of the Company’s assets are located
in South Africa.
Active Data Exchange Services currently generates 62.5% (2015: 64.3%)
of its revenue through three large network service providers and
Knowledge Creation and Management derived 53.3% (2015: 18.9%) from one
client. The reconciliation of the gross profit to profit before taxation
is provided in the statement of comprehensive income. The CODM reviews
these income and expense items on a Group basis and not per individual
segment. All assets and liabilities are reviewed on a Group basis by
the CODM.
RECONCILIATION BETWEEN EARNINGS AND HEADLINE EARNINGS
Unaudited Unaudited Audited
6 months 6 months 12 months
Ended ended as at
31-Dec 31-Dec 30-Jun
2016 2015 2016
R'000 R'000 R'000
The calculation of
earnings per share is based
on profits of R10.3 million
attributable to equity
holders of the parent
(2015: R8.3 million) and a
weighted average of 137 527
659 (2015: 137 615 798)
ordinary shares in issue 7.53 6.01 13.25
during the period. cents cents cents
The calculation of
headline earnings per
share is based on profits
of R10.3 with no
adjustments in the current
period (2015: R8.3 million
with no adjustments) and a
weighted average of 137 527
659 (2015:137 615 798)
ordinary shares in issue 7.53 6.01 13.25
during the period. cents cents cents
Reconciliation between earnings and
headline earnings
Profit attributable to equity
holders of parent 10 362 8 272 18 227
After Tax effect on profit on
disposal of property, plant and
equipment: - - -
Headline earnings 10 362 8 272 18 227
The calculation of diluted earnings
per share is based on profits of
R10.3 million attributable to
equity holders of the parent (2015:
R8.3 million) and a weighted average
of 137 527 659 (2015: 137 615 798)
ordinary shares in issue during the 7.53 6.01 13.25
period. cents cents cents
There were no instruments issued during
the current period that have a dilutive impact.
DIVIDEND POLICY
As the Group has traditionally paid annual dividends, the board has
accordingly decided that no interim dividend be declared.
DIRECTORATE
There were no changes to the board during the interim period.
SUBSEQUENT EVENTS
The board is not aware of any material events that have occurred between
the end of the interim period and the date of this report.
APPRECIATION
We would like to thank our customers, partners, dealers, staff and other
service providers for their continued support, loyalty and dedication.
For and on behalf of the board
Ashvin Mancha
Chairman
Mark Smith
Chief Executive Officer
Pieter Scholtz
Financial Director
Johannesburg
22 March 2017
Directors: Ashvin Mancha#* - Chairman,
Mark Smith – Chief Executive Officer, Pieter Scholtz - Financial
Director, Gaurang Mooney* (Botswana), Graham Groenewaldt – Sales
Director, Paul Jenkins#*, Roger Pitt#*, Marc du Plessis#, Piet Greyling#
# Non-executive
* Independent
Website: www.cgn.co.za
Company Secretary: Stefan Kleynhans
Sponsor: Merchantec Capital
Transfer Secretaries: Computershare Investor Services Proprietary
Limited
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