Wrap Text
Summarised audited results for the year ended 31 December 2016 and declaration of dividend number 6
ANCHOR GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2009/005413/06)
(“Anchor” or “the Company”)
ISIN Code: ZAE000193389
JSE share code: ACG
SUMMARISED AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2016 AND DECLARATION OF DIVIDEND NUMBER 6
HIGHLIGHTS
• Adjusted HEPS up 12% to 64.7 cents per share (57.7 cents to 31 December 2015).
• Adjusted Headline Earnings up 34% to R115 million (R86 million to 31 December 2015).
• Assets under management and advice grew by 35% to R45.9 billion (R34.1 billion at 31 December 2015).
• Total dividends for the year up 18.5% to 32 cents per share (27 cents in 2015).
• Launch of new Stockbroking division.
COMMENTARY
Anchor began managing assets in 2012 and has grown rapidly to reach Group-wide assets under management and advice at 31 December 2016 of R45.9
billion, up by 35% from R34.1 billion on 31 December 2015. Anchor has three primary divisions – Asset Management, Private Clients and Stockbroking.
The long term strategy of Anchor is to become a major player in South African asset management, with an increasing focus on offshore investment. This
will be achieved by both organic and acquisitive growth.
RESULTS
Anchor grew the scale of its business materially in 2016 with a combination of organic and acquisitive growth. The turnover of the Group grew by 85%
to R419 million (2015: R226.3 million). The yield on average assets (R40 billion) for the period was 1.01% (2015: 1.06%), due to a change in asset
class mix.
Costs grew by 73% to R252 million (2015: R145 million) which is primarily as a result of:
1. Variable costs growing in line with turnover;
2. The consolidation of the costs of newly acquired businesses;
3. New distribution staff and partnerships throughout the country to accelerate future growth; and
4. Operations, compliance and system costs to enhance the client experience.
Turnover grew faster than costs, resulting in an operating margin of 40% (2015: 35.5%). This resulted in operating profits growing by 108% to R167.2
million (2015: R80.3 million).
Profits were negatively impacted by the low return on balance sheet assets, primarily comprising seed investments in Anchor unit trusts and equities.
This was due to the mediocre returns generated in the SA equity market and the Rand/US$ exchange rate strengthening by 11.5% from 1 January 2016
to 31 December 2016. The impact of this was felt in the other income line of the income statement which reduced from R36.5 million in 2015 to R8.6
million in 2016. Other income was also impacted by lower interest income due to lower average cash balances.
The share of profits from equity accounted associates was R8 million (2015: R0.6 million). The increase is due to the share of profits from CFM Malta
Limited (“CFM Malta”).
Total comprehensive income grew by 106% to R173.1 million (2015: R84.3 million).
Adjusted headline earnings per share grew 12% to 64.7 cents (2015: 57.7 cents). Adjusted headline earnings are calculated by the Group in order
to reflect the sustainable cash-flow earnings of the Group. This number is used as the basis to determine the dividend cover of the Group. The fair
value gain on conversion of associate to subsidiary, the bargain purchase gain on acquisition of Capricorn Fund Managers Proprietary Limited (“CFM
SA”), and amortisation of acquired investment books are excluded from the calculation as they are once off, and / or non-cash flow items. In 2016
we excluded share based-payment expenses, which are an IFRS requirement but are not a cash flow expense. We have adjusted the published comparative
number in 2015 from 55.1 cents per share to 57.7 cents per share to make the numbers comparable. This had no impact on the adjusted headline earnings
per share growth rate of 12%.
The business is highly cash generative and 93% of profits were generated in cash (2015: 87%). The sharp increase in turnover saw an increase in
working capital, although the nature of the business is such that payments by trade debtors are generally received within 10 days of month end.
Shareholders’ equity grew to R1 073 million (2015: R713 million), as a result of the profit generated and the issue of new shares. The net asset value
per share is 557 cents. Cash and other liquid instruments were R169 million at 31 December 2016.
OPERATIONAL REVIEW
Asset Management and Private Clients
The fund management business was restructured during the year into two distinct operations – Asset Management and Private Clients. Each business has
its own management head and will focus on its respective client base.
Anchor is proceeding well, with the growth in assets previously outlined. Assets under management at year-end were R33.7 billion (2015: R22.5
billion) and assets under advice R12.1 billion (2015: R11.6 billion). The business welcomed a record number of new clients and Group net inflows
remain strong. We are particularly pleased with the following:
• Anchor Capital began marketing to pension funds and other institutional clients and the initial signs are positive. A number of institutional
mandates were awarded.
• Offshore managed assets grew by 59% to just under R10 billion, in spite of the Rand strengthening by 11.5% against the US$.
• We received encouraging support from the financial advisor community and investments in Group CIS (Collective Investment Scheme, or more commonly
known as unit trusts) assets under management increased by 88% to R13 billion from R6.9 billion at 31 December 2015. R1.8 billion of this is in
offshore CIS schemes.
• Anchor’s fixed income business was launched late in 2015 and showed promising growth in 2016, growing to R1.4 billion in assets under management by
31 December 2016 with excellent investment performance.
Group marketing initiatives are proving effective and Anchor has achieved net inflows of over R500 million per month in 2016. The profile created by
the listing of the business has had a material positive impact on the number of new clients joining Anchor Capital.
The investment performance of the Group has been excellent since inception. The majority of assets are managed in segregated portfolios. Anchor
Capital is relatively new to the CIS space, with two of its Anchor-branded funds now having a three year track record. The Anchor BCI Equity Fund,
was the top performing CIS in its category (out of 157 funds) over three years (at 28 February 2017). The Anchor BCI Worldwide Flexible Fund is third
in its category (out of 29) for the same period (source: MoneyMate). The performance of the Capricorn GEMS fund for the period under review was
disappointing, after award-winning performances in the prior eight years. Capricorn is focused on leveraging off its emerging market expertise to
grow its global business and product range over the medium term.
Investment markets delivered mediocre returns in 2016: the SA All Share total return was 2.6%, the MSCI World was up 5.3% and the Rand strengthened
by 11.5% against the US$. Anchor Capital’s 12-month performance was below these benchmarks and this had a negative impact on growth in assets under
management. As Anchor increases in size, so it becomes increasingly sensitive to market returns and exchange rates. To counter this, Anchor is
focused on growing annuity revenue streams and increasing the mix of asset classes.
Anchor has a long term strategy of being a material South African asset management company and places a great deal of emphasis on fundamental
research. Accordingly it has built a large investment team relative to its size. The Group has 17 CA(SA)’s, 12 CFA charter holders, 16 CFA-candidates
and a 20-strong investment team.
Stockbroking
Anchor started a stockbroking division late in 2016 and anticipates growing this meaningfully. Anchor Securities Stockbroking was granted a JSE
stockbroking license in September 2016 and is already generating meaningful turnover. The acquisition of 50% of AG Capital Proprietary Limited (“AG
Capital”), an intermediary prime broker (in December 2016), will supplement the profitability of this division. This division was immaterial from an
income statement perspective in 2016 and will be disclosed separately in 2017.
Acquisitions
With effect from 1 March 2016 Anchor acquired 47.4% of the issued share capital of Capricorn Fund Managers (CFM SA and CFM Malta). The initial
purchase price was R348 million, settled by way of R256 million in cash and 7.7 million Anchor shares. The purchase price was subsequently reduced by
Anchor’s pro-rata share of dividends for the period 1 July 2015 to 28 February 2016 of R48 million.
With effect from 1 September 2016, Anchor acquired the remainder of the shares in Anchor Securities Holdings Proprietary Limited (“Anchor
Securities”), with the result that Anchor has increased its holding from just over 22% to 100%. Anchor Securities is a specialist private client
wealth business, with a focus on segregated portfolios, and manages and advises on over R5 billion in client funds. This was settled by way of the
issue of 7.2 million shares.
With effect from 1 December 2016, Anchor acquired 50% of AG Capital. Only one month of earnings are consolidated in these results. This was settled
by way of R27.6 million in cash and the issue of 5.4 million shares.
STRATEGY AND NEW INITIATIVES
Anchor is in its sixth year of existence and continues to make excellent progress. Anchor is a young and dynamic asset management business, which
maintains its focus on quality and investment excellence, but also aims to do things differently and challenge the status quo. The private client
market in South Africa has shown a strong appetite to support a relatively new player, but to penetrate other segments of the market, longer track
records are required. The company now has a four year track record in its current form and some of its CIS products have three year track records.
As the track record lengthens and the asset base grows, we become a viable asset management alternative for bigger pools of assets. This is an
industry where size begets size and we are encouraged by the early successes in winning mandates with bigger clients. Our critical mass has enabled
us to conclude deals with South Africa’s major LISP’s (linked investment service providers), which increases access to a broader set of potential
investors.
Anchor Capital has taken a non-traditional approach to building an asset management business by investing heavily in marketing and distribution
capabilities from inception, which is bearing fruit through the growth of assets under management, and consequent financial leverage.
The Anchor Group’s strategy is as follows:
1. To build a world-class investment product range across asset classes and geographies:
• This is now close to complete and Anchor now has a CIS product range which will service all investment needs, managed by a now well-established,
extremely competent and strongly performing investment process.
• Anchor hired a fixed income team in 2015 and has built further capacity and capability in the hedge and offshore categories, both organically and
acquisitively. The focus now is to leverage off this product offering by increasing assets under management.
• There is a strong focus on offshore, both for funds which are Rand-based and for funds which have been externalised.
2. To build distribution capacity and capability to generate growth in assets under management. This will be achieved in two ways:
• Marketing to traditional channels who outsource the asset management function to third party asset managers. This includes financial advisors,
institutional investors, multi-managers and fund-of-funds. We continue to add high quality personnel in this pursuit.
• Marketing directly to clients, primarily in the private client space. We continue to employ individuals who can attract assets and have over 45
high quality investment professionals who have distribution responsibilities. We will also pursue partnerships and acquisitions of businesses which
have a distribution capability and existing client base. This strategy will continue in 2017.
PROSPECTS
The key driver for the business is assets under management, which averaged R40 billion for the 2016 financial year. The 2017 financial year began with
R45.9 billion of assets under management. The results for the forthcoming year will also be influenced by:
• The performance of local and global markets and Anchor’s relative performance;
• The impact on assets under management from a larger distribution force;
• The exchange rate between the Rand and other currencies (we estimate across the business, including Capricorn Fund Managers, that the Rand hedge
component is approximately 50-60%);
• The growth of the new stockbroking division, and
• An increase in shares in issue. The average shares in issue for 2016 were 179.9 million and the starting shares in issue at 1 January 2017 are
193.4 million.
A presentation on the results under review is available on www.anchorgroup.co.za.
CHANGES TO THE BOARD OF DIRECTORS
As previously reported, during the period, the following director changes occurred:
• Mr David Rosevear retired on 1 April 2016 and;
• Mr Omair Khan was permanently appointed as the new Chief Financial Officer with effect from 9 June 2016.
The board of directors would like to thank Mr Rosevear for his contribution to Anchor. There were no other changes to the board of directors during
the period under review.
CHANGES TO THE DESIGNATED ADVISOR AND COMPANY SECRETARY
Anchor changed its designated advisor and company secretary mandate from Arbor Capital Sponsors Proprietary Limited (“Arbor”) to Java Capital
Trustees and Sponsors Proprietary Limited (“Java Capital”) as its designated advisor. CIS Company Secretaries Proprietary Limited was appointed as
its company secretary. Both with were effect from 1 August 2016.
Summarised condensed audited consolidated statement of comprehensive income
% Audited Audited
Figures in R’000 change 31-Dec-16 31-Dec-15
Revenue 85% 419 331 226 347
Operating Expenses 73% -252 096 -145 991
Operating profit 108% 167 235 80 356
Other Income -76% 8 643 36 527
Gain on bargain purchase 1 661
Fair value gain on acquisition
of former associate
of former associate 30 645
Finance Costs -1% -973 -984
Share of profits from associates 7 763 596
Profit before taxation 85% 214 974 116 495
Taxation expense 33% -42 994 -32 253
Profit for the period 104% 171 980 84 242
Foreign currency translation 1 159 8
Total Comprehensive Income 106% 173 139 84 250
Profit for the period attributable to:
Owners of the parent 69% 138 346 82 028
Non-controlling interest 33 634 2 214
104% 171 980 84 242
Total comprehensive income attributable to:
Owners of the parent 70% 139 505 82 036
Non-controlling interest 33 634 2 214
106% 173 139 84 250
Earnings per share (cents) 41% 77,7 55,1
Diluted earnings per share (cents) 39% 75,9 54,5
Headline earnings per share (cents) 8% 59,5 55,1
Diluted headline earnings per share (cents) 7% 58,1 54,5
Adjusted headline earnings per share (cents) 12% 64,7 57,7
Diluted adjusted headline
earnings per share (cents) 11% 63,2 57,1
Earnings and headline earnings per share
Earnings attributable to shareholders 104% 171 980 84 242
Non-controlling interest 33 634 2 214
Earnings attributable to
ordinary shareholders 69% 138 346 82 028
Gain on bargain purchase -1 661
Fair Value gain on
acquisition of former associate -30 645 0
Headline earnings attributable
to ordinary shareholders 29% 106 040 82 028
Amortisation on Intangible
Asset net of tax 3 578 0
Equity settled share option costs 5 656 3 951
Adjusted headline earnings
attributable to ordinary shareholders 34% 115 274 85 979
Number of shares in issue 16% 193 455 166 163
Weighted average number of shares in issue 20% 178 120 148 967
Employee share incentive scheme 251% 4 253 1 211
Contingent purchase consideration 393
Diluted weighted average number
of shares in issue 21% 182 374 150 571
Summarised condensed audited consolidated statement of financial position
% Audited Audited
Figures in R’000 Change 31-Dec-16 31-Dec-15
Assets
Non-Current Assets
Equipment 103% 7 806 3 847
Goodwill 81% 520 710 288 440
Intangible assets 109% 67 677 32 402
Investments in associates 341 764 30 716
Other financial assets 10 744 796
Deferred tax 2 075 48
167% 950 776 356 249
Current Assets
Current tax receivable 49% 6 107 4 093
Cash and cash equivalents -75% 78 184 314 487
Other financial assets -21% 139 837 115 341
Trade and other receivables 89% 81 602 43 237
-35% 305 730 477 158
Total Assets 51% 1 256 506 833 407
Equity
Share capital 42% 904 008 635 945
Reserves 148% 11 395 4 588
Retained income 104% 144 145 70 673
Equity Attributable to
Equity Holders of Parent 49% 1 059 548 711 206
Non-controlling interest 13 222 2 423
Total Equity 50% 1 077 491 713 629
Liabilities
Non Current Liabilities
Other financial liabilities 48% 74 820 50 394
Deferred Tax 84% 16 974 9 216
54% 91 794 59 610
Liabilities
Current Liabilities
Other financial liabilities 31 305 2 816
Trade and other payables 9% 49 760 45 690
Current tax payable -7% 10 877 11 662
53% 91 942 60 168
Total Liabilities 53% 183 736 119 778
Total Equity and Liabilities 51% 1 256 506 833 407
Net asset value per share (cents) 555 429,48
Net tangible asset value per share (cents) 250 236
Summarised condensed audited consolidated statement of cash flows
% Audited Audited
Figures in R’000 change 31-Dec-16 31-Dec-15
Cash flows from operating activities
Cash generated from / (used)
from operations 54% 157 260 102 131
Interest income -15% 6 748 7 939
Finance costs -1% (973) (984)
Tax paid 250% (85 620) (24 487)
Net cash from operating activities -8% 77 415 84 599
Cash flows utilised in investing activities
Purchase of equipment -49% (4 121) (2 762)
Cash inflow / (outflow) on business combinations -107% 2 254 (179 623)
Proceeds on sale of associate 5 200
Net movement in financial assets 67% (34 444) (105 739)
Increase in investments in associates (237 057) (20 549)
Increase in investments in associates (217 830) (20 549)
Net cash utilised in investing activities -16% (258 168) (308 673)
Cash flows from financing activities
Increase in stated capital / share capital -96% 10 829 269 418
Increase of other financial liabilities 44 976 (1 185)
Dividends paid 235% (110 994) (33 141)
Net Cash from financing activities -103% (55 139) 235 092
Total cash and cash equivalents
movement for the year (235 893) 11 018
Cash and cash equivalents
at the beginning of the year 4% 314 486 303 109
Effect of exchange rate
movement on cash balances 214% -410 359
Total cash and cash equivalents
at end of the year -75% 78 184 314 486
Summarised condensed audited consolidated statement of changes in equity
Figures in R’000 Share Foreign Equity Total
Capital currency Shares to reserve attributable
translation be issued due to Share to equity
Reserve reserve change in based holders of Non-
control of payment Total Retained the group controlling Total
interest reserve reserves Income / company interest equity
Balance at 01 January 2015 317 164 - 14 760 - 629 15 389 20 535 353 089 - 353 088
Profit for the year - - - - - - 82 028 82 028 2 214 84 242
Other comprehensive income - 8 - - - 8 - 8 - 8
Total Comprehensive
income for the year - 8 - - - 8 82 028 82 036 2 214 84 250
Issue of shares 304 022 - - - - - - 304 022 - 304 022
Acquisition of subsidiary
Portfolio Bureau - - - - - - - - 1 459 1 459
Shares to be issued 14 760 - (14 760) - - (14 760) - - - -
Share based payments - - - - 3 951 3 951 - 3 951 - 3 951
Dividends - - - - - - (31 891) (31 891) (1 250) (33 141)
Total contributions by
and distributions to owners
of company recognised
directly in equity 318 782 - (14 760) - 3 951 (10 809) (31 891) 276 082 209 276 291
Balance at 01 January 2016 635 946 8 - - 4 580 4 588 70 673 711 207 2 423 713 629
Profit for the year - - - - - - 138 346 138 346 33 634 171 980
Other comprehensive income - 1 151 - - - 1 151 - 1 151 - 1 151
Total Comprehensive income
for the year - 1 151 - - - 1 151 138 346 139 497 33 634 173 131
Issue of shares for
Acquisitions of subsidiaries 269 289 - - - - - - 269 289 - 269 289
Acquisition of CFM SA - 3 239 3 239
Acquisition of AG Capital - 1 816 1 816
Share buyback CFM Malta (4 800) (4 800) (4 800)
Share buyback CFMSA (1 225) (581) (1806) (644 ) (2450)
Share based payments - - - - 5 656 5 656 - 5 656 - 5 656
Dividends - - - - - - (59 493) (59 493) (27 246) -86 739
Total contributions by and
distributions to owners of
company recognised
directly in equity 268 064 - - - 5 656 5 656 64 874 208 846 22 835 186 011
Balance at 01 January 2016 904 026 1 159 - - 10 236 11 395 144 145 1 059 550 13 222 1 072 772
Summarised audited consolidated segmental information (R’ 000)
31 December 2016 Anchor Anchor
Group Capital
Limited Proprietary
and non Limited
asset and other
management asset
associates management
businesses Eliminations Total
Revenue 90 883 407 906 (79 457) 419 332
Operating expense (32 883) (234 886) 15 673 (252 096)
Operating profit 58 000 173 020 (63 784) 167 235
Other Income 24 095 39 966 (23 112) 40 949
Share of profit from associate 8 012 329 (578) 7 763
Finance costs -347 (626) -973
Profit before tax 89 760 212 689 (87 474) 214 974
31 December 2015 Anchor Anchor
Group Capital
Limited and other
and non- asset
asset management
management businesses Ripple
associates Effect 4 Eliminations Total
Revenue 21 464 220 090 4 690 (19 897) 226 347
Operating expenses (11 736) (151 316) (2 836) 19 897 (145 991)
Operating profit 9 728 68 744 1 854 - 80 356
Other Income 19 594 16 929 4 - 36 527
Share of profits from associates 335 261 - - 596
Finance Costs (708) (272) (4) - (984)
Profit before tax 28 949 85 692 1 854 - 116 495
Assets 673 770 159 786 2 694 (2 843) 833 407
Non-Current Assets 353 107 5 938 207 (3 003) 356 249
Current Assets 320 663 153 848 2 487 160 477 158
Liabilities (56 962) (60 656) (600) (1 560) (104 478)
Non-Current Liabilities (53 120) (5 090) - (1400) (59 610)
Current Liabilities (3 842) (55 566) (600) (160) (60 168)
Equity 616 808 99 130 2 094 (4 403) 713 629
Anchor Anchor
Group Capital
Limited Proprietary
and non Limited
asset and other
management asset Inter-
associates management company
businesses Eliminations Total
31 December 2016
Assets 1 027 598 458 706 (229 798) 1 256 506
Non current assets 893 234 252 001 (194 459) 950 776
Current assets 134 364 206 705 (35 339) 305 730
Liabilities (94 448) (154 851) 70 285 (179 014)
Non current liabilities (44 572) (84 801) 37 579 (91 794)
Current liabilities (49 876) (70 050) 32 706 (87 221)
Equity 933 150 303 855 (159 513) 1 077 491
Ripple Effect 4 was removed from the segmental information in 2016 as these are not material amounts.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The accounting policies and method of measurement and recognition applied in the preparation of these condensed consolidated financial results are in
terms of International Financial Reporting Standards (“IFRS”) and are consistent with those applied in the audited annual financial statements for the
previous year ended 31 December 2015 except for the adoption of new standards and interpretations which became effective in the current year.
The summary consolidated financial statements are prepared in accordance with the requirements of the JSE Listings Requirements for summary reports
and the requirements of the Companies Act of South Africa. The summarised consolidated financial results have been prepared in accordance with
International Financial Reporting Standards (“IFRS”) and are presented in terms of the minimum disclosure requirements set out in International
Accounting Standards (“IAS”) 34 – Interim Financial Reporting, as well the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council.
The Chief Financial Officer, Omair Khan CA(SA), was responsible for the preparation of the condensed consolidated financial results, which process was
overseen by the CEO, Mr Peter Armitage CA(SA).
Any reference to future financial performance included in this announcement has not been reviewed or reported on by the Group’s external auditors.
The consolidated financial statements for the year ended 31 December 2016 have been audited by Grant Thornton Johannesburg Partnership, who expressed
an unmodified opinion. A copy of the auditor’s report is available for inspection at the company’s registered office.
These summary audited consolidated financial statements have been derived from the Anchor Group’s annual financial statements. The contents of this
announcement are extracted from audited information, although the announcement is not itself audited. The directors take full responsibility for the
preparation of this report and the financial information has been correctly extracted from the underlying annual financial statements.
The auditor’s report does not necessarily report on all the information contained in this announcement. Shareholders are therefore advised that, in
order to obtain a full understanding of the nature of the auditor’s engagement, they should obtain a copy of the auditor’s report together with the
accompanying financial information from the Company’s registered office.
BUSINESS COMBINATIONS
AG Capital
Anchor has acquired with effect from 01 December 2016, 50% of the issued share capital of AG Capital. AG Capital is an intermediate prime broker,
providing broking services and facilities to a broad range of clients. The majority of its revenue is of an annuity nature and it has excellent
growth prospects.
Although Anchor has 50% of the issued share capital of AG Capital, it consolidates this investment as Anchor has the casting vote on the decision to
move Key Contracts, and hence has effective control. In the Prime Broking industry, the casting vote on the decision to move Key Contracts is the
ultimate indicator of control, as all returns are generated via Broking activities, whose contracts can be moved by Anchor.
Provisional fair value of assets acquired and liabilities assumed
Equipment 3 231
Cash and cash equivalents 4 588
Trade and other receivables 6 864
Current tax payable (5 180)
Trade and other payables (5 871)
Total identifiable net assets 3 632
Non-controlling interest (1 816)
Purchase consideration paid in Shares (56 632)
Cash 27 600
Contingent purchase consideration 18 500
104 548
Acquisition date fair value of consideration paid
Cash (27 600)
Shares issued (56 632)
Contingent consideration (18 500)
Non-controlling Interest (1 816)
(104 548)
Capricorn Fund Managers SA Proprietary Limited
Anchor has acquired with effect from 29 February 2016, 47.41% of the issued share capital of Capricorn Fund Managers SA Proprietary Limited.
Capricorn Fund Managers is a leading global emerging markets hedge fund business, and was one of the pioneers of the South African hedge fund
industry and has been active in managing hedge funds since 2003.
Although Anchor has 47, 41% of the issued share capital of Capricorn Fund Managers SA, it consolidates this investment as Anchor has the casting
vote on the Investment committee, and hence has effective control. In the Hedge Fund industry, the casting vote on the investment committee is the
ultimate indicator of control, as all returns are generated via investment activities decided by the Investment Committee.
Provisional fair value of assets acquired and liabilities assumed
Equipment 287
Cash and Cash equivalents 76 022
Trade and other receivables 30 058
Current tax payable (29 212)
Trade and other payables (15 996)
Total identifiable net assets 61 159
Non-controlling interest (32 164)
Purchase consideration paid in shares (8 338)
Purchase consideration paid in cash (18 996)
Gain on bargain purchase 1 661
Anchor Securities Holdings (Pty) Ltd
Anchor Group has acquired the remainder of the shares effective 1 September 2016 in Anchor Securities Holdings (Pty) Ltd (“Anchor Securities”) with
the result that Anchor Group has increased its holding from just over 22% to 100%. Anchor Securities is a specialist private client wealth business,
with a focus on segregated portfolios, and manages over R3 billion in client funds.
Anchor has 100% of the issued share capital, and therefore has effective control.
Provisional fair value of assets acquired and liabilities assumed
Equipment 646
Cash and Cash equivalents 6 200
Investments 1 431
Trade and other receivables 2 484
Current tax payable (990)
Total identifiable net assets 9 771
Fair value of equity interest held
before the business combination -30 645
Purchase consideration paid in shares (110 446)
Goodwill (131 320)
FAIR VALUE HIERACHY
The following items in the Statement of Financial Position are carried at fair value through Profit and Loss:
Level 1 Level 2 Level 3
Other financial assets 87064 3843 10 744
Other financial asset are listed and unlisted investments.
Level 3 is an unlisted investment, The value in use of the unlisted investment was determined by discounting the future cash flows generated fom
the continuing use and was based on the cash flows that were projected on actual operating results and a 5 year forecast. Cash flows beyond this
were extrapolated using a constant growth rate of 8%, which does not exceed the long term average growth rate of the industry. The cash flows are
discounted using a rate between 15% - 20%, which represent the range of weighted average cost of capital.
EVENTS AFTER THE REPORTING PERIOD
Anchor has no events after reporting period to report on.
DIVIDEND
As stated, the company has an intention of paying out approximately half of its earnings as a dividend going forward as a listed business.
For the first six month period ended 30 June 2016 the company declared an interim gross dividend (Number 5) of 17 cents per share (2015: 11 cents).
The dividend was declared out of income reserves.
For the year ended 31 December 2016, the company has declared a gross dividend (Number 6) of 15 cents per share (2015: 16 cents). The dividend was
declared out of income reserves. Thus the total dividend declared for the year amounts to 32 cents (2015: 27 cents).
The dividend will be subject to a dividend withholding tax rate of 20% or 3 cents per ordinary share and accordingly the net dividend amount is 12
cents, while the dividend payable to shareholders who are exempt from dividend withholding tax is 15 cents.
Anchor’s tax reference number is 9527/450/16/8. There are 193 434 041 ordinary shares in issue at the declaration date.
The salient dates for the dividend are as follows:
Last date to trade ‘cum’ dividend Tuesday, 9 May 2017
Shares commence trading ‘ex’ dividend Wednesday, 10 May 2017
Record date (date shareholders recorded in share register) Friday, 12 May 2017
Payment date Monday, 15 May 2017
Shareholders may not dematerialise or rematerialise their share certificates between Wednesday, 10 May 2017 and Friday, 12 May 2017, both dates
inclusive. The dividend will be transferred to shareholders’ CSDP accounts/broker accounts on 15 May 2017. Certificated shareholders’ dividend
payments will be paid to certificated shareholders’ bank accounts on or about 15 May 2017.
For and on behalf of the Board
Peter Armitage Mike Teke
Chief Executive Officer Chairman
22 March 2017
DIRECTORS
Executive Directors: Peter Armitage (Chief Executive Officer), Todd Kaplan (Chief Operating Officer), Omair Khan (Chief Financial Officer)
Non-executive directors: Mike Teke (Chairman), Paul Nkuna (Lead independent), Alastair Adams (Independent), Nick Dennis (Independent), Kajal
Bissessor (Independent)
DESIGNATED ADVISOR
Java Capital
TRANSFER SECRETARIES
Link Market Services South Africa Proprietary Limited
(Registration number 2000/007239/07)
11 Diagonal Street, Johannesburg, 2001
(PO Box 4844, Johannesburg, 2000)
REGISTERED OFFICE
25 Culross Road, Bryanston, Sandton, 2191
POSTAL ADDRESS
PO Box 1337, Gallo Manor, 2052
WEBSITE: www.anchorgroup.co.za
Date: 22/03/2017 05:25:00 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.
Sharenet Sites 
