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Abridged audited results for the year ended 30 April 2017 and notice of annual general meeting
AVIOR CAPITAL MARKETS HOLDINGS LIMITED
(previously Jamispan Proprietary Limited)
Incorporated in the Republic of South Africa
Registration number: 2015/086358/06
Share Code: AVR
ISIN: ZAE000211637
(“Avior Holdings” or “the Group”)
ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 30 APRIL 2017
HIGHLIGHTS
• HEADLINE EARNINGS PER SHARE (“HEPS”) DOWN 16%
• SUCCESSFUL LISTING ON THE JSE ALTX ON 6 JUNE 2017
• RANKED THIRD IN THE FINANCIAL MAIL’S RANKING THE ANALYST SURVEY 2017
The board of directors (“the Board”) of Avior Holdings, is pleased to present the abridged audited results of the
Group for the year ended 30 April 2017 (“the year”).
1. INTRODUCTION
Avior Holdings is the holding company of a capital markets group that provides research, stockbroking, corporate
finance, derivatives trading, fixed income trading and transition management service offerings to institutional clients
in South Africa and abroad. The Group has offices in Johannesburg, Cape Town and London. Avior Holdings listed
on the JSE Limited’s (“JSE”)’s Alternative Exchange (“ALTX“) on 6 June 2017.
Avior Capital Markets Proprietary Limited (“Avior”), a wholly-owned subsidiary of Avior Holdings is rated one of the
top 10 research companies in the Financial Mail equity research ratings and has achieved an overall unweighted
ranking of number 3 in their recent rankings. The Group’s research team consists of 27 analysts, of which 18 have
been independently rated by the Financial Mail Top Analyst Awards for 2017. The 18 analysts were rated across 19
equity research sectors and achieved a number 1 in 6 of those sectors.
2. EVENTS AFTER THE REPORTING PERIOD
At the end of the reporting period, conditions existed that Avior Capital Markets Holdings Limited will list on the JSE’s
AltX after year end and this is therefore an adjusting event as per IAS10. This set of financial statements are therefore
drafted based on the IAS 10 principle that Avior Holdings has already listed on the JSE Alt X at year end.
3. RESULTS COMMENTARY
Revenue is derived primarily from brokerage and fee income from stockbroking, research, derivatives and fixed
income, corporate finance and transition management services. For the year ended 30 April 2017, Group revenue
decreased by 2% year-on-year to R179m.
Revenue from the Group’s cash equities and research division, which accounted for 70% of total Group revenue,
declined 1% year-on-year owing in part to pricing pressure.
The derivatives division recorded a 26% year-on-year decline in revenue. The division accounted for 11% of total
revenue.
The UK division grew revenue by 23% year-on-year during the period.
The Africa division recorded a 6% year-on-year increase in revenue.
While still a small component of total revenue, income from Corporate Finance registered a 160% year-on-year
increase in revenue to R2.5m.
Gross profit margins improved from 75.2% to 76.9% as JSE and data service costs fell. As a result, gross profit was
flat during the period.
Operating expenses increased 5% year-on-year owing in part to a higher staff complement as the Group enhanced
its research and administration teams.
Due to the strength of the ZAR against the GBP, a R1.8m foreign exchange loss was recognised. Foreign exchange
losses on the translation of the UK balance sheet amounting to R5.5m is included in other comprehensive income.
4. PROSPECTS
The Group intends to enhance its existing service offerings, primarily through expanding its current research
coverage, partnering with the new exchanges, offer stockbroking and research services in respect of issuers listed
on such exchanges, expanding its corporate finance offering, and offering exchange traded fund products to its
institutional client base.
Prospects for the 2018 financial year are subject to numerous factors which remain uncertain, such as value traded
on local and global markets. Pricing pressure remains a risk as investors continue to cut costs. Avior is well
positioned to benefit from the introduction of MiFID II in Europe as asset managers remunerate high quality research
providers. We are focused on continued improvement in our operational performance and leveraging our brand and
strong operating platform.
5. REGULATORY CAPITAL SHORTFALL
The JSE’s Market Regulation Division commenced a formal investigation into Avior’s breach of its capital adequacy
requirements (“Shortfall Event”). This has been ongoing since October 2016. Avior has provided its full support
and has co-operated fully with the JSE throughout this process.
Additional details regarding the Shortfall Event can be found in paragraph 13.6 of the Avior Holdings Pre-Listing
Statement dated 30 May 2017.
6. CHANGES TO THE BOARD
During the financial period under review, the following changes occurred to the Board:
6.1. Marilyn Ramplin was appointed as an independent non-executive director and chairperson of the Board with
effect from Monday, 24 April 2017.
6.2. Mark Collier was appointed as an independent non-executive director and chairperson of the Audit and Risk
Committee with effect from Monday, 24 April 2017. Mr. Collier subsequently resigned with effect from Friday,
21 July 2017. The Board has commenced with the process to appoint a new independent non-executive
director and shareholders will be advised once an appointment has been made.
6.3. Elias Masilela was appointed as an independent non-executive director, with effect from Monday, 24 April
2017.
7. CHANGES TO THE DESIGNATED ADVISOR AND COMPANY SECRETARY
Ateeqah Khan was appointed as the Company Secretary on 5 April 2017.
8. DISTRIBUTION OF ANNUAL FINANCIAL STATEMENTS AND NOTICE OF ANNUAL GENERAL MEETING
8.1. Distribution of the annual financial statements for the year ended 30 April 2017:
A copy of the annual financial statements contained in this announcement, incorporating a notice of annual
general meeting will be distributed by Avior Holdings to its shareholders on or about 23 August 2017.
Shareholders should note that, as a result of Avior Holdings listing on the JSE’s ALTX subsequent to its financial
year-end, Avior Holdings will not prepare and distribute an integrated annual report for the year ended 30 April
2017. Accordingly, Avior Holdings first integrated annual report complying with the Listings Requirements of the
JSE and the King IV Report on Corporate Governance (“King IV”) will be prepared and distributed for the
financial year ending 30 April 2018.
8.2. The Board endorses the principles contained in the King Report on Corporate Governance (“King III”) and
confirms its commitment to those principles where, in the view of the Board, they apply to the Group. A copy of
the King III compliance checklist is contained in the Pre-listing Statement made available on the Group’s website
www.avior.co.za.
8.3. Broad Based Black Economic Empowerment (“BBBEE”’) Annual Compliance report
Avior is a level 5 contributor to BBBEE. The BBBEE Annual Compliance Certificate is available for download on
the Group website: www.avior.co.za.
8.4. Notice of annual general meeting:
8.4.1. Notice:
Notice is hereby given that the annual general meeting of the shareholders of the Group will be held in the
boardroom of Avior Holdings at its registered offices located on the 1st Floor, 82 on Maude, situated at 82
Maude Street, Sandton, Johannesburg, 2196 on Wednesday, 13 September 2017 at 10h00, to transact the
formal business as set out in the notice of annual general meeting.
8.4.2. Record date:
The date on which shareholders must be recorded as such in Avior Holdings’ share register in order to be
eligible to attend and vote at the annual general meeting is Friday, 8 September 2017, with the last day to
trade being, Tuesday, 5 September 2017.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF AVIOR HOLDINGS
MARILYN RAMPLIN
Chairperson
28 July 2017
AUDITOR
PKF (vga) Chartered Accountants Incorporated
Audit partner: HC Nieuwoudt
DESIGNATED ADVISOR
Pallidus Capital Proprietary Limited
TRANSFER SECRETARIES
Terbium Financial Services Proprietary Limited
REGISTERED OFFICE
82 on Maude
82 Maude Street
Sandton
WEBSITE:
www.avior.co.za
SUMMARISED AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
% Audited Audited
Figures in Rands change 30 April 2017 30 April 2016
Revenue -2% 178 505 436 181 775 953
Cost of sales -8% (41 200 138) (45 006 820)
Gross profit 0% 137 305 298 136 769 133
Other income 2424% 2 622 779 103 928
Operating expenses 5% (121 810 853) (116 226 650)
Operating profit -12% 18 117 224 20 646 411
Investment revenue 20% 3 220 530 2 679 110
Fair value adjustments -99% 11 031 1 770 478
Finance costs 114% (855 168) (398 951)
Profit before taxation -17% 20 493 617 24 697 048
Taxation -17% 6 300 330 7 599 872
Profit for the year after taxation -17% 26 793 947 32 296 920
Other comprehensive income:
Items that may be reclassified to profit or loss:
Exchange differences on translating foreign operations -960% (5 561 126) 646 753
Other comprehensive income for the year net of taxation -960% (5 561 126) 646 753
Total comprehensive income for the year -36% 21 232 821 32 943 673
Earnings per share (cents) -34% 12.50 18.98
Diluted earnings per share (cents) -34% 12.50 18.98
Headline earnings per share (cents) -16% 15.70 18.61
Diluted headline earnings per share (cents) -16% 15.70 18.61
Earnings attributable to ordinary shareholders 21 232 821 32 943 673
Loss or profit on disposal of property, plant and equipment (net of tax) (131 714) 597
Exchange differences on translating foreign operations 5 561 126 (646 753)
Headline earnings attributable to ordinary shareholders 26 662 233 32 297 517
Number of shares in issue -18% 141 457 900 172 162 800
Weighted average number of shares in issue -2% 169 838 094 173 532 000
Diluted weighted average number of shares in issue -2% 169 838 094 173 532 000
SUMMARISED AUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
% Audited Audited
Figures in Rands Change 30 April 2017 30 April 2016
Assets
Non-Current Assets
Property, plant and equipment 3% 3 614 650 3 509 268
Intangible assets 419 454 -
Deferred tax 52% 16 874 345 11 069 818
Loan receivable 0% 750 000 750 000
41% 21 658 449 15 329 086
Current Assets
Loans to directors, managers and employees -32% 2 424 767 3 546 059
Margin and collateral accounts 16% 8 574 583 7 366 215
Trade and other receivables 92% 5 653 858 2 937 517
Financial assets -52% 3 064 864 6 447 459
Operating lease asset -100% - 193 008
Current tax receivable 311% 1 102 971 268 146
Amounts receivable in respect of stock broking activities -89% 46 970 215 426 472 502
Cash and cash equivalents 6% 63 435 808 59 904 723
-74% 131 227 066 507 135 629
Total Assets -71% 152 885 515 522 464 715
Equity and Liabilities
Equity
Share capital -18% 14 146 17 216
Reserves 244% (5 561 126) (1 616 448)
Retained income -6% 79 617 120 84 289 805
74 070 140 82 690 573
Liabilities
Non-Current Liabilities
Loans from related parties 13 000 251 -
Current Liabilities
Trade and other payables 11% 17 860 309 16 055 688
Financial liabilities held for trading -40% 2 668 353 4 452 879
Operating lease liability 377 374 -
Current tax payable -97% 4 299 131 791
Provisions 39% 3 323 061 2 383 928
Amounts payable in respect of stock broking activities -90% 41 581 728 416 749 856
-85% 65 815 124 439 774 142
Total Liabilities -82% 78 815 375 439 774 142
Total Equity and Liabilities -71% 152 885 515 522 464 715
Total number of shares in issue -18% 141 457 900 172 162 800
Net asset value per share 9% 52.36 48.03
SUMMARISED AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
%
Figures in Rands change 30 April 2017 30 April 2016
Cash flows from operating activities
Cash receipts from customers 8% 172 075 632 159 136 413
Cash paid to suppliers and employees 48% (151 070 623) (101 877 386)
Cash generated from operations -63% 21 005 009 57 259 027
Interest income 4% 2 779 406 2 679 110
Dividend income 34 149 -
Finance costs 90% (757 985) (398 951)
Tax paid 10% (2 635 065) (2 395 562)
Net cash from operating activities -64% 20 425 514 57 143 624
Cash flows from investing activities
Purchase of property, plant and equipment -29% (1 813 348) (2 541 030)
Purchase of other intangible assets (338 775) -
Net cash from investing activities -15% (2 152 123) (2 541 030)
Cash flows from financing activities
Buy back of shares (29 025 554) -
Movement in loans from related parties 13 000 251 -
-
Dividends paid 100% - (9 581 324)
Net cash from financing activities 67% (16 025 303) (9 581 324)
Total cash movement for the year -95% 2 248 088 45 021 270
Cash at the beginning of the year 302% 59 904 723 14 883 453
Effect of exchange rate movement on cash balances 1 282 997 -
Total cash at end of the year 6% 63 435 808 59 904 723
SUMMARISED AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Foreign currency Treasury
Share Share Total share translation shares Total Retained
Figures in Rands capital premium capital reserve reserve reserves income Total equity
Balance at 01 May 2015 17 346 3 509 358 3 526 704 80 708 (1 493 831) (1 413 123) 58 483 527 60 597 108
Profit for the year - - - - - - 32 296 920 32 296 920
Other comprehensive income - - - 566 045 - 566 045 - 566 045
Total comprehensive income for the year - - - 566 045 - 566 045 32 296 920 32 862 965
Distribution of share premium - (3 509 358) (3 509 358) - - - - (3 509 358)
Purchase of own / treasury shares (130) - (130) - (769 370) (769 370) - (769 500)
Dividends - - - - - - (6 490 642) (6 490 642)
Total contributions by and distributions to
owners of group recognised directly in equity (130) (3 509 358) (3 509 488) - (769 370) (769 370) (6 490 642) (10 769 500)
Balance at 01 May 2016 17 216 - 17 216 646 753 (2 263 201) (1 616 448) 84 289 805 82 690 573
Profit for the year - - - - - - 26 793 947 26 793 947
Other comprehensive income - - - (6 207 879) - (6 207 879) - (6 207 879)
Total comprehensive income for the year - - - (6 207 879) - (6 207 879) 26 793 947 20 586 068
Purchase of own / treasury shares (3 070) - (3 070) - (345 120) (345 120) (28 858 311) (29 206 501)
Transfer between reserves - - - - 2 608 321 2 608 321 (2 608 321) -
Total contributions by and distributions to
owners of group recognised directly in equity (3 070) - (3 070) - 2 263 201 2 263 201 (31 466 632) (29 206 501)
Balance at 30 April 2017 14 146 - 14 146 (5 561 126) - (5 561 126) 79 617 120 74 070 140
SUMMARISED AUDITED CONSOLIDATED SEGMENTAL INFORMATION
Figures in Rands
2017 SA Region UK Region Total
Segment revenue 154 194 987 28 870 762 183 065 749
Revenue from external customers 149 636 745 32 375 351 182 012 096
Intersegment revenues eliminated - (3 529 304) (3 529 304)
Interest revenue 3 220 531 22 644 3 243 175
Other income 1 337 711 2 071 1 339 782
Segment expenses (146 684 300) (14 076 280) (160 760 580)
Cash expenses (147 483 367) (14 030 644) (161 514 011)
Interest expense (877 812) - (877 812)
Intersegment expenses eliminated 3 529 304 - 3 529 304
Depreciation and amortisation (1 852 425) (45 636) (1 898 061)
Income tax expense (317 392) 6 617 724 6 300 332
Segment profit 7 193 294 21 412 206 28 605 500
Non-cash items (not included in segments results)
Foreign exchange gains/(losses) (3 105 580) 1 282 997 (1 822 583)
Fair value adjustments 11 031 - 11 031
Segment assets and liabilities
Segment assets 117 395 581 49 723 308 167 118 889
Segment liabilities 91 003 762 526 112 91 529 874
Investments
Investments in subsidiaries 1 750 427 - 1 750 427
Capital expenditure
Computer equipment 867 073 126 236 993 309
Leasehold improvements 265 417 - 265 417
Furniture and Fixtures 220 954 - 220 954
Office Equipment 112 852 - 112 852
Computer software 402 055 - 402 055
Motor vehicles 760 800 - 760 800
Intangible asset - Cobi Interactive Software 524 317 - 524 317
Reconciliation between segment information - 2017
Revenue and other income 184 359 776
Total segment revenue 183 065 748
Foreign exchange gains 1 282 997
Fair value adjustments (non cash) 11 031
Revenue as per statement of profit and loss 184 359 776
Expenses (163 866 159)
Total segment expenses (160 760 579)
Foreign exchange gains/(losses) (non cash) (3 105 580)
Expenses as per statement of profit and loss (163 866 159)
Assets 152 885 514
Total segment assets 167 118 988
Loans to group companies eliminated (12 483 047)
Investments in subsidiaries (1 750 427)
Total assets as per statement of financial position 152 885 514
Liabilities 78 815 375
Total segment liabilities 91 529 874
Loans from group companies (12 483 047)
Accruals (231 452)
Total liabilities as per the statement of financial position 78 815 375
2 016 SA Region UK Region Total
Segment revenue 158 138 929 26 382 134 184 521 063
Revenue from external customers 155 393 819 29 788 190 185 182 009
Intersegment revenues eliminated - (3 406 056) (3 406 056)
Interest revenue 2 679 110 - 2 679 110
Other income 66 000 - 66 000
Segment expenses (144 449 988) (15 372 527) (159 822 515)
Cash expenses (144 892 944) (15 343 823) (160 236 767)
Interest expense (398 951) - (398 951)
Intersegment expenses eliminated 3 406 056 - 3 406 056
Depreciation and amortisation (2 564 149) (28 704) (2 592 853)
Income tax expense (3 342 482) 10 942 354 7 599 872
Segment profit 10 346 459 21 951 961 32 298 420
Non-cash items (not included in segments results)
Foreign exchange gains/(losses) 20 436 (1 809 077) (1 788 641)
Profit/(loss) on sale of tangible assets (37) (792) (829)
Fair value adjustments 1 770 478 - 1 770 478
Administration and management fees 17 492 - 17 492
Segment assets and liabilities
Segment assets 495 960 387 29 804 574 525 764 961
Segment liabilities 440 909 922 645 590 441 555 512
Investments
Investments in subsidiaries 1 750 327 - 1 750 327
Capital expenditure
Computer equipment 742 891 448 875 1 191 766
Leasehold improvements 99 033 - 99 033
Furniture and fixtures 137 427 - 137 427
Office equipment 734 811 - 734 811
Computer software 377 982 - 377 982
Reconciliation between segment information - 2016
Revenue and other income 186 329 469
Total segment revenue 184 521 063
Foreign exchange gains 20 436
Fair value adjustments (non cash) 1 770 478
Administration and management fees 17 492
Revenue as per statement of profit and loss 186 329 469
Expenses (161 632 421)
Total segment expenses (159 822 515)
Foreign exchange loss (1 809 077)
Profit/(loss) on sale of tangible assets (non cash) (829)
Expenses as per statement of profit and loss (161 632 421)
Assets 522 464 715
Total segment assets 525 764 961
Loans to group companies eliminated (1 549 919)
Investments in subsidiaries (1 750 327)
Total assets as per statement of financial position 522 464 715
Liabilities 439 774 142
Total segment liabilities 441 555 512
Loans from group companies (1 549 919)
Accruals (231 451)
Total liabilities as per the statement of financial position 439 774 142
Notes
Basis of preparation
The summarised consolidated annual financial statements have been prepared in accordance with the JSE Listings Requirements
and the requirements of the Companies Act, 71 of 2008 (as amended) (“the Act”) applicable to summarised financial statements. The
JSE Listings Requirements prescribes that summarised consolidated annual financial statements be prepared in accordance with the
framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (“IFRS”) as
issued by the International Accounting Standards Board, the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum, contain
the information required by IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of the consolidated
annual financial statements were derived in terms of IFRS and are consistent with those accounting policies applied in the preparation
of the previous consolidated annual financial statements. The consolidated annual financial statements have been prepared on the
historical cost basis, except for the measurement of certain financial instruments at fair value, and incorporate the principal accounting
policies. They are presented in South African Rand.
The consolidated financial statements were compiled by Nerious Nhara (Northplan Chartered Accountants) under the supervision of
Naeem Tilly (Financial Director) and were approved by the Board on 27 July 2017.
Independent audit
The summarised consolidated financial statements are extracted from audited information, but are not itself audited. The consolidated
annual financial statements were audited by PKF (VGA) Chartered Accountants., who expressed an unmodified opinion thereon. The
audited consolidated annual financial statements and the auditor’s report thereon are available for inspection at the Group’s registered
office. The directors take full responsibility for the preparation of the summarised consolidated financial statements and the financial
information has been correctly extracted from the underlying annual financial statements.
Dividend
Management believes that cash should be retained to fund future investment and growth within the Group. The Board has therefore
resolved not to declare a dividend for this reporting period.
P. Koutromanos N. Tilly
(Chief Executive Officer) (Financial director)
Date: 28/07/2017 03:33:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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