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Reviewed Provisional Consolidated Results for the 10 Month Period ended 31 December 2016
PEMBURY LIFESTYLE GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/205899/06)
(“PL Group” or “the Company”)
ISIN Code: ZAE000222949 JSE Code: PEM
REVIEWED PROVISIONAL CONSOLIDATED RESULTS FOR THE TEN MONTH PERIOD ENDED
31 DECEMBER 2016
COMPANY AND FINANCIAL HIGHLIGHTS:
- Revenue has grown 148% for the 10 months ended 31 December 2016 compared to
the first year of operations ended 29 February 2016, with an increase in operating costs
of 112% for the same period
- Increase of 64% in number of pupils from 1 100 to 1 809 at the beginning of 2017
- Movement from net liability of (2.75) cents per share to a net asset value of 8.42 cents
per share
- Subsequent to year end, PL Group successfully raised R140 million by way of a private
placing of 140 000 000 shares at 100 cents each
- The Company was granted a listing on the Alternative Stock Exchange (“AltX”) of the
JSE with effect from 31 March 2017
Consolidated Statement of financial position
Figures in Rand Reviewed Restated
Ten months Year
ended ended
31 December 29 February
2016 2016
ASSETS
Non-Current Assets 52 133 696 31 409 318
Property, plant and equipment 47 689 789 26 215 560
Goodwill 3 152 014 3 152 014
Deferred tax 1 291 893 2 041 744
Current Assets 5 396 070 1 468 062
Trade and other receivables 5 395 970 1 446 152
Cash and cash equivalents 100 21 910
Total Assets 57 529 766 32 877 380
EQUITY AND LIABILITIES
Equity
Stated capital 400 100 100
Reserves 14 683 409 -
Accumulated loss (14 746 843) (5 503 531)
336 666 (5 503 431)
Related party loan 16 528 691 -
16 865 357 (5 503 431)
Liabilities
Non-Current Liabilities 19 965 463 28 505 909
Other financial liabilities - 777 017
Finance lease liabilities 19 965 463 20 079 638
Loans from related parties - 7 649 254
Current Liabilities 20 698 946 9 874 902
Other financial liabilities 2 875 024 1 482 431
Finance lease liabilities 761 144 1 055 715
Operating lease liability 95 578 -
Trade and other payables 16 911 168 7 336 756
Bank overdraft 56 032 -
Total Liabilities 40 664 409 38 380 811
Total Equity and Liabilities 57 529 766 32 877 380
Number of shares in issue 203 000 000 200 000 000(1)
Net asset (liability) value per share (cents) 8.42 (2.75)
Net tangible asset (liability) value per share (cents) 6.75 (4.33)
Note 1 - assumes the sub-division of 100 shares at 29 February 2016 to 200 000 000 shares
ahead of the listing on 28 November 2016 was effective in the prior year for purpose of
comparison.
Note 2 – the fair value of the financial liabilities equates their carrying values due to their
short- term nature.
Consolidated Statement of Comprehensive Income
Reviewed Restated
Ten months Year
ended ended
31 December 29 February
Figures in Rand 2016 2016
Revenue 31 776 743 12 836 116
Other operating income 75 203 -
Operating expenses (42 025 270) (19 860 494)
Loss before interest, taxation, depreciation and
amortisation (10 173 324) (7 024 378)
Interest (2 551 986) (520 897)
Investment income 3 802 2 001
Finance costs (2 555 788) (522 898)
Loss before taxation (12 725 310) (7 545 275)
Taxation 3 481 998 2 041 744
Net loss after taxation (9 243 312) (5 503 531)
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Gains on property revaluation 18 892 181 -
Income tax (4 231 849) -
Other comprehensive income for the period net of
taxation 14 660 332 -
Total comprehensive profit/(loss) for the period 5 417 020 (5 503 531)
Headline earnings Reconciliation:
Net loss after taxation (9 243 312) (5 503 531)
Adjusted for:
- Impairment of fixed assets after taxation 269 793 -
Headline loss (8 973 519) (5 503 531)
Per share information:
Weighted average shares in issue 200 271 232 200 000 000(1)
Loss per share (cents)
Basic loss per share (4.61) (2.75)
Diluted loss per share (4.61) (2.75)
Headline loss per share (cents)
Basic headline loss per share (4.48) (2.75)
Diluted headline loss per share (4.48) (2.75)
Note 1 - assumes the sub-division of 100 shares at 29 February 2016 to 200 000 000 shares
ahead of the listing on 28 November 2016 was effective in the prior year for purpose of
comparison.
Consolidated Statement of Changes in Equity
Total equity
attributable
Share-based to equity
Stated Revaluation payment Total Accumulated holders of Related
Figures in Rand capital reserve reserve reserves loss the Group party loan Total equity
Loss for the period – restated - - - - -
Total comprehensive loss for the
period – as previously stated - - - - (5 483 531) (5 483 531) - (5 483 531)
Restatement for prior period
error (20 000) (20 000) (20 000)
Issue of shares 100 - - - - 100 - 100
Total contributions by and
distributions to owners of Group
recognised directly in equity 100 - - - - 100 100
Balance at 01 March 2016 -
restated 100 - - - (5 503 531) (5 503 431) - (5 503 431)
Loss for the period - - - - (9 243 312) (9 243 312) - (9 243 312)
Other comprehensive income - 14 660 332 - 14 660 332 - 14 660 332 - 14 660 332
Total comprehensive
profit/(loss) for the period - 14 660 332 - 14 660 332 (9 243 312) 5 417 020 - 5 417 020
Issue of shares 400 000 - - - - 400 000 - 400 000
Shares-based payment reserve - - 23 077 23 077 - 23 077 - 23 077
Convertible related party loan - - - - - - 16 528 691 16 528 691
Total contributions by and
distributions to owners of
company recognised directly in
equity 400 000 - 23 077 23 077 - 423 077 16 528 691 17 004 422
Balance at 31 December 2016 400 100 14 660 332 23 077 14 683 409 (14 746 843) 336 666 16 528 691 16 865 357
Consolidated Statement of Cash Flows
Reviewed Restated
Ten months Year
ended ended
Figures in Rand 31 December 2016 29 February 2016
Cash flows from operating activities
Cash receipts from customers 32 112 596 10 751 549
Cash paid to suppliers and employees (35 822 372) (11 737 849)
Cash used in operations (3 709 776) (986 300)
Interest income 3 802 2 001
Finance costs (2 555 788) (522 898)
Net cash from operating activities (6 261 762) (1 507 197)
Cash flows from investing activities - -
Cash flows from financing activities
Proceeds on share issue - 100
Proceeds of other financial liabilities 1 040 576 -
Repayment of other financial liabilities (425 000) (25 048)
Proceeds from related party loans 5 977 090 1 554 055
Finance lease payments (408 746) -
Net cash from financing activities 6 183 920 1 529 107
Total cash movement for the period (77 842) 21 910
Cash at the beginning of the period 21 910 -
Total cash at end of the period, comprising: (55 932) 21 910
- Cash and cash equivalents 100 21 910
- Overdrawn bank account 56 032 -
Segmental information
The reportable segments, which represent the structures used by the chief operating
decision maker, to make key operating decisions and assess performance are set out
below:
Reportable segment
The reportable segments identified and reported on are PLG Properties, head office and the
individual schools namely:
- PLG Ballito Academy
- PLG Hartbeespoort Academy
- PLG Mellow Oaks Academy
- PLG Northriding Academy
- PLG Willow View Academy,
The Company’s operating segments are determined by reference to the level of operating
results regularly reviewed by the Chief Operating Decision Makers, being the Executive
Directors, to make decisions about resources to be allocated and for which discrete
financial information is available. Operating segments which exhibit similar long-term
financial performance and have similar economic characteristics are amalgamated. The
revenue earned by the Schools segments are derived from educational services. Each
school is identified to be an operating segment. The major sources of revenue are school
fees, boarding fees, aftercare fees, registration fees and sundry income. Taxation is assessed
by the Chief Operating Decision Makers at a Group level and not considered separately at
a segmental level. There was no inter-segmental revenue.
Segmental revenue, total assets, total liabilities and results
The Executive Directors assess the performance of the operating segments based on the measure of operating profit.
The segment information provided to the Executive Directors is presented below:
Ten month period ended 31 December 2016
PLG Willow PLG PLG Mellow PLG PLG Allens PLG PLG Head PLG
Total Ballito View Hartbeesboort Oaks Northriding View Raslouw Springs Office Properties
Revenue 31 776 743 7 131 210 5 171 554 8 446 477 5 882 007 4 681 695 70 300 301 000 92 500 - -
Other income 75 203 - 60 44 143 - - - - - 31 000 -
Operating
expenses (41 281 894) (7 968 307) 5 045 762) (8 492 415) (4 088 837) 5 099 857) 602 957) (576 792) 353 970) (9 052 997) -
EBITDA (9 429 948) (837 097) 125 852 (1 795) 1 793 170 (418 162) (532 657) (275 792) (261 470) (9 021 997) -
Depreciation
and
amortisation (743 376) (455 271) (81 298) (113 426) (31 926) (41 969) (5 668) (5 224) (8 594) - -
Interest
received 3 802 93 81 1 376 1 062 1 056 27 74 33 - -
Finance cost (2 555 788) (43 273) (52 834) (2 454 550) (1 306) (3 825) - - - - -
Profit/(Loss)
before tax (12 725 310) (1 335 548) (8 199) (2 568 395) 1 761 000 (462 900) (538 298) (280 942) (270 031) (9 021 997) -
Total assets 57 529 766 850 347 1 473 063 45 376 020 1 011 716 1 639 327 633 304 507 135 738 923 1 454 897 3 845 034
Total liabilities (40 664 409) (3 192 687) (1 330 673) (25 105 175) (1 296 248) (1 203 985) (417 215) (598 534) (259 310) (7 260 582) -
Year-ended 29 February 2016
PLG PLG PLG Mellow PLG Head
Total Ballito Willow View Hartbeesboort Oaks Northriding Office
Revenue 12 836 116 5 341 718 2 549 032 1 972 289 1 721 790 1 251 287 -
Operating expenses (17 288 242) (7 660 479) (4 077 401) (1 588 959) (1 482 078) (1 859 685) (619 639)
Pre-incorporation expenses (2 424 777) (836 621) (1 209 857) - - (3 570) (374 729)
EBITDA (6 876 903) (3 155 383) (2 738 225) 383 330 239 711 (611 968) (994 368)
Finance costs (522 899) (1 348) (1 079) (518 161) (699) (1 613) -
Interest income 2 001 91 73 702 588 546 -
Depreciation and amortisation (147 474) (68 987) (41 481) (23 745) (5 414) (7 847) -
Profit/(Loss) (7 545 275) 3 225 626) (2 780 711) (157 874) 234 186 (620 882) (994 368)
Total assets 32 877 380 1 910 102 1 468 931 25 842 475 447 647 1 166 479 2 041 744
Total liabilities 38 380 811 (4 018 483) (3 037 095) (25 145 792) (606 305) (1 436 897) (4 136 042)
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The accounting policies and method of measurement and recognition applied in the
preparation of these provisional condensed reviewed consolidated provisional 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 29 February
2016.
The reviewed consolidated provisional results are prepared in accordance with the
requirements of the JSE Limited Listings Requirements for provisional reports and the requirements
of the Companies Act, 71 of 2008. The reviewed consolidated provisional results are presented in
terms of the 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 Reporting Pronouncements as issued by the
Financial Reporting Standards Council.
The Financial Director, Riaan van Jaarsveld, was responsible for the preparation of the reviewed
consolidated provisional results. Any reference to future financial performance included in this
announcement has not been reviewed or reported on by the group’s external auditors. The
directors of PL Group (“the Board”) take full responsibility for the preparation of the provisional
results.
During 2016, the Company changed its financial year end from February to December. The
group results for the ten months ended 31 December 2016 have been reviewed by Moore
Stephens FRRS Incorporated. A copy of the auditor’s unmodified review opinion is available for
inspection at the Company’s registered office.
COMPANY PROFILE
PL Group currently focuses mainly on providing accessible, affordable, private education
through its schools, with an intention to own the properties from which the schools operate. In
due course, the group also aims to expand into providing retirement accommodation and
services. The Company operates as a holding company to three subsidiaries, namely:
- PLG Schools Proprietary Limited, the education business which was operational for 8
months of the year ended 29 February 2016;
- PLG Properties Proprietary Limited, the company which will own the group properties; and
- PLG Retirement Villages Proprietary Limited, the retirement segment (currently dormant).
COMMENTARY
The directors of PL Group are pleased to present the Company’s results for the ten months
ended 31 December 2016, which represents the second period of operations as a group.
Revenue has grown 148% for the 10 months ended 31 December 2016 to R31.8 million
compared to the first year of operations ended 29 February 2016, with growth in pupil numbers
at the campuses launched in 2015, two new campuses opened in 2016 and the acquisition of
PLG Hartbeespoort in early 2016.
Operating costs increased by 112% for the same period to R42.0 million, which increase is
primarily associated with the expansion of the group. The operating costs also include a portion
of costs associated with the listing of the company, including an IFRS 2 charge of R400 000,
which was settled through the issue of 3 000 000 shares before the year end, being a share-
based payment. Costs are centrally monitored closely and management is investing in an
aggressive marketing campaign to increase pupil numbers.
During the period under review, in order to remove uncertainty for parents and pupils, early in
2016 the Company took the decision to close down its school in Ballito following protracted
negotiations and incurring of legal costs to try to obtain special consent from the local town
council. This led to the once-off impairment of leasehold and other assets amounting to
R374 713.
The increase in finance costs is attributed to the acquisition of the Hartbeespoort property by
way of a finance lease in the year ended 29 February 2016, being in place for the full 10 month
period. During the period under review, the Hartbeespoort property was independently valued
on a depreciated replacement cost basis at R40 million, which resulted in a once off gain
recognised in Other Comprehensive Income, net of deferred taxation at the capital gains
taxation rate. The revaluation gain resulted in a Total comprehensive profit for the period of R5.4
million compared to a loss of R5.5 million in the prior year.
At 31 December 2016, the group had accumulated losses of R14 746 843. A related party loan
(Pembury Services) of R16 528 691 has been recognised as equity due to the decision to
capitalise a portion of the loan being taken before year end, which was quantified and
capitalised subsequent to the year end as part of the offer and listing of the Company on the
JSE, increasing equity to R16 865 357.
Currently, the group is operating with no overdraft facilities in place. Management is of the view
that short term or bond facilities can be secured on short notice should the need arise. In the
interim, the company has obtained a letter of support from its sister company, Pembury Services
Proprietary Limited, a company which is wholly owned by the founder and majority shareholder
for at least the next twelve months from the date of the financial statements.
In the period under review, the group took a conservative approach to its accounts receivable
and provided for doubtful debts in the amount of R3 268 878 (Feb 2016: R951 843), the majority
of which relates to PLG Ballito, which was closed during the period under review. Management
has implemented strict controls over the debtors and has started with a debtor recovery plan,
which includes hiring debt recovery agents for older debt, while a stringent policy on
attendance for short term defaulters are enforced. New procedures have been implemented
for new pupils, with debit orders being put in place.
Trade and other payables were R9.5 million higher than 29 February 2016 primarily due to a
higher number of schools in existence in the period under review and costs incurred ahead of
the 2017 school year relating to the acquisition, establishing and opening three new schools in
January 2017 leading to an increase of R4.2 million in trade payables. Additionally costs were
incurred in connection with the establishment of the head office and preparation of the listing of
the company, leading to an increase in holding company trade payables to R1.5 million from
zero in the prior year and an increase in accruals by R4.6 million to R6.7 million.
The PLG Hartbeespoort property was acquired by way of a finance lease at a discounted price
of R22 000 000 and was independently revalued during the year to R40 million, which increases
the reserves of the entity, after tax, by R14 660 332. Property, plant and equipment also
increased due to additions during the period amounting to R3.3 million.
The group's land and buildings are stated at revalued amounts, being the fair value at the date
of revaluation. The fair value measurements as of 20 August 2016, were performed by Johan
Bosman Valuators. Mr J.S. Bosman is an independent valuator and appraiser for the Master of
the Supreme Court (Pretoria) and has the appropriate qualifications and recent experience in
the fair value measurement of properties in the relevant locations.
The depreciated replacement method of revaluation was applied to value the buildings as a
result of its unique nature. The land was valued by the discounted cash flow method of
valuation. The carrying value of the revalued assets under the cost model would have been:
31 December 2016 29 February 2016
R R
Land 5 539 327 5 539 327
Buildings 15 568 492 15 568 492
21 107 819 21 107 819
Subsequent to year end and as part of the listing, additional properties have been acquired and
are in the process of being transferred into PLG Properties. These properties have also been
independently valued above the cost of acquisition. This will further strengthen the balance
sheet position.
RESTATEMENT OF PRIOR YEAR-END RESULTS
The prior year audited results were contained in the Company’s prospectus issued on 9 March
2017 and represented the Group’s first year of operations. During the December 2016 audit, it
was discovered that a nursery school called Dimples was purchased for R480 000 as part of the
Northriding property acquisition on deferred payment terms. The acquisition date was with
effect from 7 January 2016.
This triggers a business combination for the year ended 29 February 2016, resulting in an expense
of R20 000 in the Statement of Comprehensive Income and the recognition of goodwill of
R460 000 and a liability of R480 000 in the Statement of Financial Position, which liability has been
split between related party loans of R80 000 for amounts paid before 29 February 2016 and an
increase in other financial liabilities of R400 000. The goodwill was tested for impairment at year
end and no impairment was indicated.
As the results for 29 February 2016 represented the Group’s first year of trading, the balance
sheet has only been restated for the year ended 29 February 2016.
PROSPECTS AND PROFIT FORECAST
In addition to the Group prospects published in the Company’s prospectus dated 9 March 2016,
the directors are of the view that the group’s growth prospects are good, which is supported by
the increase in number of pupils to 1 809 at the beginning of 2017.
The cash flow forecast indicates that the schools will have positive cash flows in the next two
years based on the current occupancy levels and expected growth in pupil numbers in 2018.
The segmental report for the 10 months ended 31 December 2016 shows that PLG Hartbeespoort
and PLG Mellow Oaks are already breaking even or profitable at an EBITDA level for the second
period under review , with PLG Willow View also showing a positive EBITDA for the first time. The
higher student numbers in 2017 at these campuses will further enhance this profitability and
positive cash flows.
Furthermore, the company has opened three new campuses in January 2017 and the number
of new registrations of students has already met management’s expectations as included in
their profit and cash flow forecasts. Of these three new campuses, PLG Allens View Academy
and PLG Springs Academy are expected to break-even or show a small profit at an EBITDA level
due to the low operating costs.
The company also expects to open a further three campuses in January 2018 as detailed in the
Prospectus issued on 9 March 2017. Two of the required properties have already been acquired
for two new campuses, namely PLG Greenhills Academy in Randfontein and PLG Carswald
Academy in Midrand.
The Company issued its prospectus on 9 March 2017 ahead of its listing on the AltX of the JSE.
The prospectus contains the following profit forecast for the years ending 31 December 2017
and 31 December 2018. For details of the assumptions behind the profit forecast, shareholders
are referred to the Company’s prospectus which can be found on the Company’s website at
www.plgschools.co.za.
31 December 2017 31 December 2018
Revenue 68 558 960 135 617 381
Operating expenses (69 161 737) (106 644 002)
(Loss)/Profit before interest, taxation depreciation and
amortisation (602 778) 28 973 379
Amortisation - -
Depreciation (765 968) (1 459 631)
(Loss)/Profit before interest and tax (1 368 745) 27 513 748
Interest received - -
Interest paid (4 986 268) (9 518 011)
(Loss)/Profit before taxation (6 355 103) 17 995 737
Taxation 1 779 404 (5 038 806)
Net (loss)/profit after taxation (4 575 610) 12 956 931
Other comprehensive income 33 678 400 -
Revaluation of properties to fair value 43 400 000 -
Deferred taxation (9 721 600) -
Total comprehensive income 29 102 790 12 956 931
Total comprehensive loss for the year attributable to:
Owners of the parent 29 102 790 12 956 931
Non-controlling interest - -
Net (loss)/profit for the year attributable to:
Owners of the parent (4 575 610) 12 956 931
Non-controlling interest - -
Net (loss)/profit after taxation (4 575 610) 12 956 931
Headline earnings adjustment – impairment of property 1 500 000 -
Headline (loss)/earnings (3 075 610) 12 956 931
Per share information (assuming fully diluted) 353 000 000 353 000 000
(Loss)/Earnings per share (cents) (1.30) 3.67
Headline (loss)/earnings per share (cents) (0.87) 3.67
ACQUISITIONS AND DISPOSALS
There were no acquisitions or disposals during the 10 month period ended 31 December 2016.
COMMITMENTS AND SUBSEQUENT EVENTS
During the period under review, the Company had on-going agreements to purchase various
properties from which PLG Schools operate, which were concluded subsequent to year end.
Details of these agreements are set out below:
- the acquisition of unregistered portions of remainder of Portion 163 of the Farm Elandsvlei
249 IQ Elandsvlei frail, being the current location of PLG Randfontein Academy, which will
open in 2018, for R5 500 000;
- the acquisitions of Portion 2 of Holding 54 for R13 150 000, excluding VAT and the remainder
of Holding 54, Raslouw Agricultural Holdings for R3 500 000, being the current location of PLG
Raslouw College which opened in January 2017;
- the acquisition of ERF 1729, Strubenvale EXT. 2, Springs, being the current location of PLG
Springs Academy which opened in January 2017, for a purchase consideration of
R3 500 000, including VAT;
- the acquisition of Portion 8 of the Farm Rietfontein 31 IR, Bredell Kempton Park, being the
current location of Willow View Academy, for a purchase consi deration of R34 000 000,
excluding VAT;
- the acquisition of ERF 640, Allensnek EXT. 35, Roodepoort being the current location of PLG
Allens View Academy which opened in January 2017, for a purchase consideration of
R7 500 000;
- the acquisition of Portion 480 (a portion of portion 12) of the Farm Wilgespruit 190-IQ,
Roodepoort being the current location of PLG Mellow Oaks Academy for a purchase
consideration of R12 250 000, excluding VAT;
- the acquisition of ERF 630, Xanadu EXT, 12 being the current location of PLG Hartbeespoort
Academy for a purchase consideration of R22 000 000, which purchase price will increase
by 8% per annum in the event that the purchase consideration is not settled by 1 April each
year commencing from 1 April 2017; and
- the acquisition of ERF 612, Portion 0, Northwold EXT. 13, Randburg, being the current location
of PLG Northriding Academy for a purchase consideration of R35 000 000, excluding VAT.
Subsequent to year end, PL Group successfully raised R140 million by way of a private p lacing of
140 000 000 shares at 100 cents each and the Company was granted a listing on the Alternative
Stock Exchange (“AltX”) of the JSE with effect from 31 March 2017. The Company is proceeding
with the lodging of the above properties for transfer, wit h the exception of PLG Hartbeespoort,
which will remain held by way of a finance lease.
The Group’s listing on the JSE AltX on 31 March 2017 has improved the prospects and cash flow
position and also facilitated the acquisition of a number of properties. The offer ahead of listing
resulted in the issue of 140 million shares at R1.00 per share, including the abovementioned
capitalisation of loan. This results in the company having a strong balance sheet position
subsequent to year end.
The Directors are confident with the future profitability of the group as the occupancy levels
continue to grow, with at least 4 of the 7 campuses (Hartbeespoort, Mellow Oaks, Springs and
Allens View) through, or expected to go through, the “J-Curve” during 2017.
SHARE ISSUES AND REPURCHASES
The Company has issued 3 000 000 shares to its Designated Advisor, Arbor Capital Sponsors
Proprietary Limited on 28 November 2016 for R400 000 in settlement of services rendered in
connection with the listing of the Group in terms of the letter of appointment, of which 50% of
the shares are to be held in trust in accordance with paragraph 21.3(g) of the JSE Listings
Requirements.
There have been no repurchases of shares by the Company or any of its subsidiaries during the
period under review.
The ordinary share capital of the Company was subdivided on 28 November 2016 in anticipation
of the listing, resulting in a total issued share capital of 203 000 000 shares prior to the AltX Listing.
RELATED PARTY DISCLOSURE
The following related party information is disclosed:
Relationships:
Controlling shareholder and Chief Andrew McLachlan
Executive Officer
Subsidiaries PLG Schools Proprietary Limited
PLG Properties Proprietary Limited
PLG Retirement Villages Proprietary Limited
Shareholders and directors in common Pembury Services Proprietary Limited
Group Company
Ten months Year Ten months Year
ended ended ended ended
31 December 29 February 31 December 29 February
2016 2016 2016 2016
Related party balances
Loan accounts – Owing (to) by related
parties
Pembury Services Proprietary Limited - (7 649 254) - -
PLG Schools Proprietary Limited - - 12 387 204 -
PLG Properties Proprietary Limited - - 3 844 934 -
Related party loan capitalised at year
end
Pembury Services Proprietary Limited 16 528 691 - 16 528 691 -
Related party transactions
Rent paid to (received from) related
parties
Pembury Services Proprietary Limited 5 307 868 2 697 295 - -
Commission fees paid to directors
Christo Hechter 250 000 - - -
Lou Brits 250 000 - - -
Pre-incorporation costs
Pembury Services Proprietary Limited - 2 424 778 - -
Compensation to directors and other
key management
Short-term employee benefits 575 521 - 575 521 -
The above related party loans did not bear interest during the period under review and there
are no fixed terms of repayment.
GOING CONCERN
The ability of the company to continue as a going concern is dependent on a number of
factors. The most significant of these is that the directors continue to procure funding for the on-
going operations for the company and to achieve profitability.
As a result of the above and the events subsequent to 31 December 2016 as well as the
continued support from the controlling shareholder, the directors believe that the group has
adequate financial resources to continue in operation for the foreseeable future and
accordingly, the financial statements have been prepared on a going concern basis. The
directors have satisfied themselves that the group is in a sound financial position and that it has
access to sufficient borrowing facilities to meet its foreseeable cash requirements.
The directors are not aware of any new material changes that may adversely impact the group.
The directors are also not aware of any material non-compliance with statutory or regulatory
requirements or of any pending changes to legislation which may affect the group.
The financial statements have been prepared on the basis of accounting policies applicable to
a going concern. This basis presumes that funds will be available to finance future operations
and that the realisation of assets and settlement of liabilities, contingent obligations and
commitments will occur in the ordinary course of business.
Management is confident that there is no uncertainty in terms of the going concern assumption.
CHANGES TO THE BOARD OF DIRECTORS
The composition of the Board was restructured in anticipation of the listing in order to align the
Board and its Sub-Committees to comply with the requirements of the Companies Act, JSE
Listings Requirements and King Code of Corporate Governance. Raphael Rakarasika resigned
as a director during the period under review effective 13 October 2016 as part of this restructure
but remains employed in the group.
Accordingly, the following new directors were appointed:
Director Date of appointment
Riaan van Jaarsveld 1 October 2016
Lou Brits 7 October 2016
Grant Waters 7 October 2016
Barry Moyo 7 October 2016
As at 31 December 2016, the Board was composed of two executive directors, and four non-
executive directors, of which three are independent.
DIVIDEND
The Company has not historically declared interim and final dividends and does not have a
formal dividend policy as at the date of this report.
From the year ended 31 December 2018, the Board will consider a formal dividend pay-out
policy of at least 10% of headline earnings of the consolidated group of companies, unless the
Board is of the opinion that a lower dividend is to be declared because of the necessity to apply
the Group’s cash resources to any planned acquisitions or that it is in th e interest of the Group to
build up cash reserves for foreseeable unfavourable market or economic conditions.
For and on behalf of the Board
ANDREW MCLACHLAN RIAAN VAN JAARSVELD
Chief Executive Officer Group Financial Director
18 April 2017
Executive Directors
Andrew McLachlan (Chief Executive Officer)
Riaan van Jaarsveld (Group Financial Director)
Independent Non-executive directors
Lou Brits (Chairman)
Barry Moyo
Grant Waters
Non-executive director
Christo Hechter
Company Secretary and Registered Office
Arbor Capital Corporate Services Proprietary Limited
(Registration number 2016/120671/07)
Ground Floor, One Health Building
Woodmead North Office Park
54 Maxwell Drive
Woodmead, 2157
(Suite # 439, Private Bag X29, Gallo Manor, 2052)
Designated Advisor
Arbor Capital Sponsors Proprietary Limited
Transfer Secretaries
Link Market Services South Africa Proprietary Limited
(Registration number 2000/007239/07)
13th Floor, Rennie House
19 Ameshoff Street
Braamfontein, 2001
(PO Box 4844, Johannesburg, 2000)
WEBSITE
http://www.plgschools.co.za
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