Wrap Text
Unaudited interim results for the six months ended 30 June 2017
BRIMSTONE INVESTMENT CORPORATION LIMITED
ISIN Number: ZAE000015277 | Share Code: BRT
ISIN Number: ZAE000015285 | Share Code: BRN
Company Registration Number: 1995/010442/06 (Incorporated in the Republic of
South Africa)
("Brimstone" or "the Company" or "the Group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2017
SIGNIFICANT EVENTS
- Operating profit increased by 27%
- Successful listing of Sea Harvest on the JSE
- Downward revaluation of Life Healthcare and Tiger Brands of R380 million
COMMENTARY
The Company reported a 27% increase in operating profit to R155.9 million
(2016: R123.2 million) which is primarily attributable to its subsidiary Sea
Harvest increasing its operating profit by 117% to R167.7 million compared to
the comparative period. This positive feature of the result was offset by the
relatively poor results from operating subsidiaries, Lion of Africa Insurance
Company and House of Monatic and by the downward revaluation of investments,
the effect of which can be seen in both fair value adjustments and share of
profits of associates and joint ventures. The Company consequently reported a
loss for the period of R201.0 million compared to a profit of R48.3 million in
the comparative period.
During the period under review Sea Harvest listed on the JSE diluting
Brimstone's holding from 85% to 55% (including treasury shares) resulting in a
gain of R744.5 million which was credited to equity as "changes in ownership"
as required by IFRS.
Gross assets increased to R8.2 billion from R7.7 billion at 31 December 2016
while intrinsic net asset value decreased to R4.5 billion from R5.1 billion at
31 December 2016.
Brimstone Portfolio
Subsidiaries
Sea Harvest (55%)1
Sea Harvest was listed on the JSE on 23 March 2017, raising R1.24 billion net
after listing costs. Brimstone's shareholding diluted from 85% to 55%
(including treasury shares) following the listing. The share listed at R12.50
and closed at R13.70 on 30 June 2017. The group delivered headline earnings of
R110.6 million for the six months to 30 June 2017 which is an increase of 217%
on the R34.9 million for the same period last year, benefiting from the
improved performance of its South African operations as a result of investments
in both fleet and land-based operations, continued strong global demand for
hake and the acquisition of a controlling interest in Australian-listed
Mareterram Limited in July 2016.
Lion of Africa Insurance Company (Lion of Africa) (100%)
Lion of Africa reported a net loss for the six months ended 30 June 2017 of
R38.0 million compared to a loss of R3.4 million for the same period last year.
While this is disappointing, Lion of Africa has been in the process of
eliminating unprofitable business and, to this end, have been successful as
evidenced by satisfactory claims ratios. The reduction in premium as a result
of eliminating unprofitable business has resulted in severe strain on its
acquisition ratios. The challenge is to grow premium income from good business
in order to fully absorb Lion of Africa's acquisition costs.
House of Monatic (Monatic) (100%)
Revenue decreased by 15% to R88.4 million for the first six months, resulting
in a loss of R17.5 million compared to a profit of R0.3 million in the
comparative period. This is mainly due to the poor retail climate adversely
affecting Monatic's nine retail outlets, sales to independent retailers and
chain stores. Profitability was further impacted by Stuttafords going into
liquidation. As a result of the aforementioned factors, the factory suffered 19
days of short-time during the period.
Associates and Joint Ventures
Oceana (17%)2
Brimstone holds 23 million shares with a market value of R2.1 billion in
Oceana.
Oceana's share price closed at R90.90 per share, down from R120.00 per share at
31 December 2016. Brimstone received R20.7 million in dividends during the
period under review and recorded R18.9 million in equity accounted earnings
based on Oceana's reported six month earnings to 31 March 2017. An amount of
R33.9 million negatively impacted Brimstone's share of Oceana's non-
distributable reserves, which is largely attributable to the decrease in
Oceana's foreign currency translation and cash flow hedging reserves.
Grindrod (6.7%)
Brimstone accounts for its share of the results in the Consortium SPV as a
joint venture. Brimstone wrote its investment in the consortium down by R20.8
million to nil at 30 June 2017. Grindrod's share price closed at R11.06 on 30
June 2017, down from R13.45 per share at 31 December 2016.
Aon Re Africa (18%)
Brimstone, after adjusting for the non-controlling shareholder's share,
received a dividend of R3.3 million from Aon Re Africa and recorded R1.4
million in equity accounted earnings during the period under review.
South African Enterprise Development (SAED) (25%)
SAED is an investment vehicle providing equity growth capital to high potential
small and medium sized enterprises. SAED made a positive contribution of R1.7
million to earnings during the period under review.
INVESTMENTS
Equites (10%)3
Equites' share price closed at R17.12 per share, up from R15.80 per share at 31
December 2016. The investment was revalued upwards by R46.1 million to R597.4
million at period end.
Life Healthcare (4.7%)
Life Healthcare's share price closed at R25.65 per share, down from R32.60 per
share at 31 December 2016. Brimstone subscribed for 17.2 million Life
Healthcare shares at R24.50 per share in terms of the rights offer undertaken
by the company during the period, investing an additional R420.5 million. The
total investment was revalued downwards by R328.8 million to R1.7 billion.
Brimstone received a dividend of 35 cents per share resulting in total dividend
receipts from Life Healthcare of R23.6 million, down from R36.6 million for the
comparative period.
Long4Life (9.9%)
Brimstone subscribed for 40 million shares in Long4Life at R5.00 per share
during the period, investing R200.0 million in total. The Long4Life share price
closed at R6.10 per share at 30 June 2017, resulting in the investment being
revalued upwards by R44.0 million to R244.0 million at period end.
MTN Group and MTN Zakhele Futhi (1.5%)
Brimstone disposed of its remaining 570 000 MTN Group shares during March 2017
at an average price of R127.56 per share. Brimstone holds 1.8 million MTN
Zakhele Futhi shares which are accounted for as options. The independently
calculated option valuation was based on a MTN Group closing share price of
R114.10 per share, down from R126.17 per share at 31 December 2016. The
investment was revalued downwards by R15.1 million to R51.7 million.
Phuthuma Nathi (7%)
The Phuthuma Nathi 1 shares and Phuthuma Nathi 2 shares both closed at R140.00
per share (R129.60 and R132.99 per share respectively at 31 December 2016). The
investment was revalued upwards by R43.5 million to R663.4 million. Phuthuma
Nathi has recommended a dividend that, if approved by shareholders, will be
payable in September 2017. This dividend amounts to R91.3 million for
Brimstone.
Tiger Brands (0.9%)
Brimstone's rights to Tiger Brands shares, accounted for as options, have been
revalued at period end. The independently calculated option valuation was based
on a closing share price of R367.90 per share, down from R397.83 per share at
31 December 2016. The investment was revalued downwards by R50.9 million to
R322.4 million which includes the value of a forward sale transaction that
Brimstone entered into enabling it to sell 600 000 Tiger Brands shares in the
first quarter of 2018 at R374.80 per share.
INTRINSIC NET ASSET VALUE (INAV)
INAV at 30 June 2017 calculated on a line-by-line basis, totalled R4.53
billion, or R18.84 per share (31 December 2016: R5.13 billion or R21.40 per
share), representing a decrease of 11.7% from 31 December 2016 (a decrease of
11.9% on a per share basis). As at 30 June 2017, Brimstone Ordinary shares were
trading at a discount of 31.0% to INAV (31 December 2016: 39.3%). Brimstone "N"
Ordinary shares traded at a discount of 31.0% to Brimstone's INAV (31 December
2016: 43.9%). The analysis of INAV is available on the Company's website at
www.brimstone.co.za.
The INAV information presented in this report has been prepared on a basis
consistent with that used in the integrated report for the year ended 31
December 2016.
BASIS OF PREPARATION
The condensed consolidated interim financial statements have been prepared in
accordance with International Financial Reporting Standard, IAS 34: Interim
Financial Reporting, 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 Listings Requirements of the
JSE Limited and the requirements of the Companies Act of South Africa, No. 71
of 2008. The report has been prepared using accounting policies that comply
with International Financial Reporting Standards which are consistent with
those applied in the financial statements for the year ended 31 December 2016.
The condensed financial information has been prepared under the supervision of
the Group Financial Director, Geoffrey George Fortuin CA(SA).
The information has not been audited or reviewed by the Group's auditors,
Deloitte & Touche.
DIVIDEND
In line with previous years, no interim dividend is declared for the half year.
PROSPECTS
The Group will continue to maintain its positive long-term view on its
investments and pursue value accretive opportunities.
On behalf of the board
F Robertson MA Brey
Executive Chairman-Chief Executive Officer
23 August 2017
Notes
1. 57.5% net of treasury shares
2. 19.7% net of treasury shares
3. Subsequent to 30 June 2017 Brimstone's interest reduced to 8.5%
following a share placement by Equites
Directorate and administration
Registered office: Boundary Terraces, 1 Mariendahl Lane, Newlands 7700,
Cape Town
Transfer Secretaries: Computershare Investor Services (Pty) Ltd, Rosebank
Towers, 15 Biermann Avenue, Rosebank 2196
Sponsor: Nedbank CIB, 135 Rivonia Road, Sandton 2196
Directorate: F Robertson (Executive Chairman)*, MA Brey (Chief Executive
Officer)*, GG Fortuin (Financial)*, MI Khan (Chief Operating Officer)*,
PL Campher (Lead Independent), M Hewu, N Khan, KR Moloko, MK Ndebele,
LA Parker, FD Roman *Executive
Website: www.brimstone.co.za
E-mail: info@brimstone.co.za
Condensed Consolidated Income Statement
for the six months ended 30 June 2017
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
R'000 2017 2016 2016
Revenue 1 307 279 1 181 134 2 688 490
Sales and fee income 1 234 142 1 086 569 2 348 592
Dividends received 73 137 94 565 339 898
Operating expenses (1 151 416) (1 057 949) (2 229 010)
Operating profit 155 863 123 185 459 480
Fair value (losses)/gains (255 117) 103 188 (70 803)
Other investment gains - - 30 189
Share of profits of
associates and joint ventures 3 976 39 615 98 300
(Loss)/profit before net finance costs (95 278) 265 988 517 166
Income from investments 22 292 13 092 27 042
Finance costs (149 947) (116 488) (260 708)
Net (loss)/profit before taxation (222 933) 162 592 283 500
Taxation 21 958 (114 336) (86 173)
(Loss)/profit for the period (200 975) 48 256 197 327
(Loss)/profit attributable to:
Equity holders of the parent (244 102) 29 605 170 739
Non-controlling interests 43 127 18 651 26 588
(200 975) 48 256 197 327
(Loss)/earnings per share (cents)
Basic (101.6) 12.2 70.9
Diluted (101.6) 10.4 68.7
Condensed Consolidated Statement of Other Comprehensive Income
for the six months ended 30 June 2017
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
R'000 2017 2016 2016
(Loss)/profit for the period (200 975) 48 256 197 327
Other comprehensive (loss)/income,
net of tax (40 948) 91 232 43 479
Items that may be reclassified
subsequently to profit or loss
Cash flow hedges
(Loss)/gain arising during the period (17 917) 47 041 94 658
Foreign currency translation
Gain/(loss) arising during the period 7 382 - (44 292)
Share of non-distributable
reserves of associates (31 336) 44 191 (12 662)
Items that will not be reclassified
subsequently to profit or loss
Share of non-distributable reserves
of associates 923 - 5 775
Total comprehensive (loss)/income
for the period (241 923) 139 488 240 806
Total comprehensive (loss)/income
attributable to:
Equity holders of the parent (288 634) 102 318 209 680
Non-controlling interests 46 711 37 170 31 126
(241 923) 139 488 240 806
Condensed Consolidated Statement of Financial Position
as at 30 June 2017
Unaudited Unaudited Audited
30 June 30 June 31 December
R'000 2017 2016 2016
ASSETS
Non-current assets 5 733 967 5 411 601 5 406 092
Property, plant, equipment
and vehicles 598 634 508 684 607 721
Goodwill and intangible assets 487 216 97 286 479 933
Investments in associate companies
and joint ventures 1 167 855 1 220 921 1 171 960
Investments 3 366 717 3 530 910 3 043 768
Deferred taxation 78 338 17 871 45 896
Insurance assets 19 924 35 729 55 581
Other financial assets 15 283 200 1 233
Current assets 2 500 091 1 903 935 2 274 169
Inventories 411 447 263 372 385 097
Trade and other receivables 720 787 522 829 561 938
Insurance assets 234 807 416 955 396 753
Other financial assets 27 689 6 338 46 800
Taxation 8 878 45 15 242
Investments 322 408 85 667 373 257
Cash and cash equivalents 774 075 608 729 495 082
TOTAL ASSETS 8 234 058 7 315 536 7 680 261
EQUITY AND LIABILITIES
Capital and reserves 3 253 264 2 386 123 2 588 031
Share capital 41 41 41
Capital reserves 317 662 435 704 380 181
Revaluation reserves 7 223 14 143 14 143
Cash flow hedging reserve 14 010 (13 892) 32 534
Foreign currency translation reserve (15 917) - (29 119)
Changes in ownership 580 602 (170 033) (163 938)
Retained earnings 1 646 438 2 087 144 2 193 293
Attributable to equity holders
of the parent 2 550 059 2 353 107 2 427 135
Non-controlling interests 703 205 33 016 160 896
Non-current liabilities 3 167 535 3 431 590 3 509 121
Long-term interest bearing
borrowings 2 575 567 2 819 245 2 783 204
Long-term provisions 26 703 25 427 31 209
Deferred grant income 14 501 - 13 733
Other financial liabilities 61 267 - 82 448
Insurance liabilities 28 735 40 076 75 377
Deferred taxation 460 762 546 842 523 150
Current liabilities 1 813 259 1 497 823 1 583 109
Short-term interest bearing
borrowings 679 817 195 698 452 094
Bank overdrafts 55 832 65 017 24 390
Trade payables 456 204 403 258 409 482
Other payables 161 445 155 582 90 014
Insurance liabilities 406 765 627 867 529 784
Other financial liabilities 22 548 - 21 121
Short-term provisions 7 576 22 321 47 754
Taxation 23 072 28 080 8 470
TOTAL EQUITY AND LIABILITIES 8 234 058 7 315 536 7 680 261
NAV per share (cents) 1 060.1 986.0 1 011.5
Shares in issue at end
of period (000's) 240 548 238 651 239 956
Condensed Consolidated Statement of Cash Flows
for the six months ended 30 June 2017
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
R'000 2017 2016 2016
Operating activities
Net attributable (loss)/profit (200 975) 48 256 197 327
Adjustments for non-cash items 298 950 47 063 70 150
Operating cash flows before
movements in working capital 97 975 95 319 267 477
Increase in inventories (23 364) (4 541) (23 992)
(Increase)/decrease in trade
and other receivables (157 192) 94 534 117 999
Increase/(decrease) in trade
and other payables 117 537 (124 190) (181 238)
Net decrease in insurance assets 197 603 283 871 284 221
Net decrease in insurance liabilities (169 661) (288 369) (351 151)
Cash generated from operations 62 898 56 624 113 316
Interest received 21 086 13 092 27 042
Dividends received from associates
and joint ventures 26 631 40 105 130 980
Dividends received from other
equity investments 46 506 54 460 208 918
Income taxes paid (45 757) (11 306) (64 177)
Finance costs (109 463) (114 452) (207 545)
Net cash generated from
operating activities 1 901 38 523 208 534
Investing activities
Loan repayments and recoveries from
associate and investments - - 1 098
Proceeds on disposal of investments 80 311 531 180 658 802
Proceeds on disposal of property,
plant, equipment and vehicles 1 3 530 3 829
Acquisition of property, plant,
equipment and vehicles (54 499) (61 522) (126 084)
Acquisition of subsidiaries
- shares acquired and loans advanced - - (195 859)
Acquisition of intangible assets (3 460) (700) (7 611)
Proceeds from receipt of a
government grant - - 15 831
Acquisition of investments (648 470) (20 032) (134 548)
Net cash (utilised in)/generated
from investing activities (626 117) 452 456 215 458
Financing activities
Dividends paid by Company
and subsidiaries (104 943) (91 516) (91 517)
Distributions made to participants
of share trusts of subsidiary (167 321) - -
Distributions made to participants
of share trusts of Company - - (38 923)
Repayments of borrowings (388 857) (54 796) (248 716)
Loans raised 365 834 272 920 490 472
Repayment of financial liabilities (23 912) - -
Further investment in subsidiary - (167 162) (167 287)
Shares repurchased - (49 900) (62 950)
Disposal of treasury shares
by subsidiary - - 3 938
Proceeds on issue of trust
units/shares 6 844 4 451 19 870
Issue of shares by subsidiary 1 239 943 - -
Redemption of non-controlling
shareholder's preference shares - (88 994) (85 756)
Shares/units repurchased
by subsidiaries (55 831) - (108)
Increase in bank overdrafts 31 442 43 373 2 746
Net cash generated from/(utilised in)
financing activities 903 199 (131 624) (178 231)
Net increase in cash and
cash equivalents 278 983 359 355 245 761
Cash and cash equivalents at
beginning of period 495 082 249 374 249 374
Foreign exchange differences 10 - (53)
Cash and cash equivalents at
end of period
Bank balances and cash 774 075 608 729 495 082
Condensed Consolidated Statement of Changes in Equity
for the six months ended 30 June 2017
R'000 Share Capital Revaluation
capital reserves reserves
Balance at 1 January 2016 - Audited 41 427 049 14 143
Attributable profit for the
year ended 31 December 2016 - - -
Other comprehensive (loss)/income - (6 888) -
Total comprehensive (loss)/income - (6 888) -
Recognition of share-based payments - (9 788) -
Amount reclassified to share
options reserve - 17 747 -
Dividend paid - - -
Distributions made to participants
of share trusts - - -
Subsidiary's accrual for
preference dividends - - -
Non-controlling interest arising on
recognition of subsidiary - - -
Acquisition of non-controlling
interest in subsidiary - - -
Redemption of preference
shares by subsidiary - - -
Disposal of treasury shares
by subsidiary - - -
Shares/units purchased by subsidiary - - -
Issue of share capital - 15 524 -
Sale of trust units - 992 -
Recognition of change in value of share
option liability directly in equity - (1 535) -
Treasury shares acquired - (62 950) -
Further acquisition of
investment in subsidiary - - -
Share of non-distributable reserves
of associates transferred directly
to equity - 30 -
Balance at 31 December 2016 - Audited 41 380 181 14 143
Balance at 1 January 2017 - Audited 41 380 181 14 143
Attributable (loss)/profit for the
six months ended 30 June 2017 - - -
Other comprehensive (loss)/income - (30 782) -
Total comprehensive (loss)/income - (30 782) -
Recognition of share-based payments - (1 913) -
Dividend paid - - -
Distributions made to participants
of share trusts of subsidiary - - -
Recognition of forfeitable
share plan reserves - (55 001) -
Shares repurchased by subsidiary - - -
Shares issued by subsidiary - 20 885 (6 920)
Issue of share capital - 6 844 -
Share of non-distributable reserves of
associates transferred directly
to equity - (2 552) -
Balance at 30 June 2017 - Unaudited 41 317 662 7 223
1 January 2016 to 30 June 2016
- Unaudited
Balance at 1 January 2016 - Audited 41 427 049 14 143
Attributable profit for the six months
ended 30 June 2016 - - -
Other comprehensive income - 44 191 -
Total comprehensive income - 44 191 -
Recognition of share-based payments - 6 589 -
Dividend paid - - -
Subsidiary's accrual for
preference dividends - - -
Acquisition of non-controlling
interest in subsidiary - - -
Redemption of preference
shares by subsidiary - - -
Issue of share capital - 4 451 -
Treasury shares acquired - (49 900) -
Share of non-distributable reserves of
associates transferred directly
to equity - 3 324 -
Balance at 30 June 2016 - Unaudited 41 435 704 14 143
Condensed Consolidated Statement of Changes in Equity (continued)
for the six months ended 30 June 2017
R'000 Foreign
Cash flow currency
hedging translation Changes in
reserve reserve ownership
Balance at 1 January 2016 - Audited (42 414) - (11 839)
Attributable profit for the
year ended 31 December 2016 - - -
Other comprehensive (loss)/income 74 948 (29 119) -
Total comprehensive (loss)/income 74 948 (29 119) -
Recognition of share-based payments - - -
Amount reclassified to share
options reserve - - -
Dividend paid - - -
Distributions made to participants
of share trusts - - -
Subsidiary's accrual for
preference dividends - - -
Non-controlling interest arising on
recognition of subsidiary - - -
Acquisition of non-controlling
interest in subsidiary - - -
Redemption of preference
shares by subsidiary - - -
Disposal of treasury shares
by subsidiary - - -
Shares/units purchased by subsidiary - - -
Issue of share capital - - -
Sale of trust units - - -
Recognition of change in value of share
option liability directly in equity - - -
Treasury shares acquired - - -
Further acquisition of
investment in subsidiary - - (152 099)
Share of non-distributable reserves
of associates transferred directly
to equity - - -
Balance at 31 December 2016 - Audited 32 534 (29 119) (163 938)
Balance at 1 January 2017 - Audited 32 534 (29 119) (163 938)
Attributable (loss)/profit for the
six months ended 30 June 2017 - - -
Other comprehensive (loss)/income (5 846) (7 904) -
Total comprehensive (loss)/income (5 846) (7 904) -
Recognition of share-based payments - - -
Dividend paid - - -
Distributions made to participants
of share trusts of subsidiary - - -
Recognition of forfeitable
share plan reserves - - -
Shares repurchased by subsidiary - - -
Shares issued by subsidiary (12 678) 21 106 744 540
Issue of share capital - - -
Share of non-distributable reserves of
associates transferred directly
to equity - - -
Balance at 30 June 2017 - Unaudited 14 010 (15 917) 580 602
1 January 2016 to 30 June 2016
- Unaudited
Balance at 1 January 2016 - Audited (42 414) - (11 839)
Attributable profit for the six months
ended 30 June 2016 - - -
Other comprehensive income 28 522 - -
Total comprehensive income 28 522 - -
Recognition of share-based payments - - -
Dividend paid - - -
Subsidiary's accrual for
preference dividends - - -
Acquisition of non-controlling
interest in subsidiary - - (158 194)
Redemption of preference
shares by subsidiary - - -
Issue of share capital - - -
Treasury shares acquired - - -
Share of non-distributable reserves of
associates transferred directly
to equity - - -
Balance at 30 June 2016 - Unaudited (13 892) - (170 033)
Condensed Consolidated Statement of Changes in Equity (continued)
for the six months ended 30 June 2017
R'000 Attributable
to equity Non-
Retained holders of controlling
earnings the parent interests
Balance at 1 January 2016 - Audited 2 143 330 2 530 310 96 662
Attributable profit for the
year ended 31 December 2016 170 739 170 739 26 588
Other comprehensive (loss)/income - 38 941 4 538
Total comprehensive (loss)/income 170 739 209 680 31 126
Recognition of share-based payments - (9 788) 665
Amount reclassified to share
options reserve - 17 747 -
Dividend paid (85 791) (85 791) (5 726)
Distributions made to participants
of share trusts (38 923) (38 923) -
Subsidiary's accrual for
preference dividends - - 3 238
Non-controlling interest arising on
recognition of subsidiary - - 141 973
Acquisition of non-controlling
interest in subsidiary - - (15 188)
Redemption of preference
shares by subsidiary - - (88 994)
Disposal of treasury shares
by subsidiary 3 938 3 938 -
Shares/units purchased by subsidiary - - (108)
Issue of share capital - 15 524 -
Sale of trust units - 992 (1 576)
Recognition of change in value of share
option liability directly in equity - (1 535) -
Treasury shares acquired - (62 950) -
Further acquisition of
investment in subsidiary - (152 099) -
Share of non-distributable reserves
of associates transferred directly
to equity - 30 (1 176)
Balance at 31 December 2016 - Audited 2 193 293 2 427 135 160 896
Balance at 1 January 2017 - Audited 2 193 293 2 427 135 160 896
Attributable (loss)/profit for the
six months ended 30 June 2017 (244 102) (244 102) 43 127
Other comprehensive (loss)/income - (44 532) 3 584
Total comprehensive (loss)/income (244 102) (288 634) 46 711
Recognition of share-based payments (1 018) (2 931) (6 053)
Dividend paid (102 743) (102 743) (2 200)
Distributions made to participants
of share trusts of subsidiary (167 321) (167 321) -
Recognition of forfeitable
share plan reserves - (55 001) -
Shares repurchased by subsidiary (51 429) (51 429) (4 401)
Shares issued by subsidiary 19 758 786 691 508 252
Issue of share capital - 6 844 -
Share of non-distributable reserves of
associates transferred directly
to equity - (2 552) -
Balance at 30 June 2017 - Unaudited 1 646 438 2 550 059 703 205
1 January 2016 to 30 June 2016
- Unaudited
Balance at 1 January 2016 - Audited 2 143 330 2 530 310 96 662
Attributable profit for the six months
ended 30 June 2016 29 605 29 605 18 651
Other comprehensive income - 72 713 18 519
Total comprehensive income 29 605 102 318 37 170
Recognition of share-based payments - 6 589 -
Dividend paid (85 791) (85 791) (5 725)
Subsidiary's accrual for
preference dividends - - 3 238
Acquisition of non-controlling
interest in subsidiary - (158 194) (8 968)
Redemption of preference
shares by subsidiary - - (88 994)
Issue of share capital - 4 451 -
Treasury shares acquired - (49 900) -
Share of non-distributable reserves of
associates transferred directly
to equity - 3 324 (367)
Balance at 30 June 2016 - Unaudited 2 087 144 2 353 107 33 016
Condensed Consolidated Statement of Changes in Equity (continued)
for the six months ended 30 June 2017
R'000 Total
Balance at 1 January 2016 - Audited 2 626 972
Attributable profit for the
year ended 31 December 2016 197 327
Other comprehensive (loss)/income 43 479
Total comprehensive (loss)/income 240 806
Recognition of share-based payments (9 123)
Amount reclassified to share
options reserve 17 747
Dividend paid (91 517)
Distributions made to participants
of share trusts (38 923)
Subsidiary's accrual for
preference dividends 3 238
Non-controlling interest arising on
recognition of subsidiary 141 973
Acquisition of non-controlling
interest in subsidiary (15 188)
Redemption of preference shares
by subsidiary (88 994)
Disposal of treasury shares
by subsidiary 3 938
Shares/units purchased by subsidiary (108)
Issue of share capital 15 524
Sale of trust units (584)
Recognition of change in value of share
option liability directly in equity (1 535)
Treasury shares acquired (62 950)
Further acquisition of
investment in subsidiary (152 099)
Share of non-distributable reserves
of associates transferred directly
to equity (1 146)
Balance at 31 December 2016 - Audited 2 588 031
Balance at 1 January 2017 - Audited 2 588 031
Attributable (loss)/profit for the
six months ended 30 June 2017 (200 975)
Other comprehensive (loss)/income (40 948)
Total comprehensive (loss)/income (241 923)
Recognition of share-based payments (8 984)
Dividend paid (104 943)
Distributions made to participants
of share trusts of subsidiary (167 321)
Recognition of forfeitable
share plan reserves (55 001)
Shares repurchased by subsidiary (55 830)
Shares issued by subsidiary 1 294 943
Issue of share capital 6 844
Share of non-distributable reserves of
associates transferred directly
to equity (2 552)
Balance at 30 June 2017 - Unaudited 3 253 264
1 January 2016 to 30 June 2016
- Unaudited
Balance at 1 January 2016 - Audited 2 626 972
Attributable profit for the six months
ended 30 June 2016 48 256
Other comprehensive income 91 232
Total comprehensive income 139 488
Recognition of share-based payments 6 589
Dividend paid (91 516)
Subsidiary's accrual for
preference dividends 3 238
Acquisition of non-controlling
interest in subsidiary (167 162)
Redemption of preference
shares by subsidiary (88 994)
Issue of share capital 4 451
Treasury shares acquired (49 900)
Share of non-distributable reserves of
associates transferred directly
to equity 2 957
Balance at 30 June 2016 - Unaudited 2 386 123
HEADLINE (LOSS)/EARNINGS PER SHARE
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Headline (loss)/earnings per share (cents)
Basic (101.4) 11.5 48.0
Diluted (101.4) 9.8 46.5
Headline (loss)/earnings calculation
(Loss)/profit attributable to equity
holders of the parent (244 102) 29 605 170 739
Loss/(profit) on disposal of property,
plant, equipment and vehicles 234 (1 670) (2 098)
Impairment of property, plant,
equipment and vehicles 707 - -
Reversal of impairment of property,
plant, equipment and vehicles (251) - -
Realised loss on disposal of associate - - 9 451
Gain on remeasurement of previously
held interest in subsidiary - - (38 649)
Adjustments relating to
results of associates (47) (1 217) (28 727)
Total tax effects of adjustments (161) 1 140 4 865
Headline (loss)/earnings (243 620) 27 858 115 581
Weighted average number of shares on
which basic (loss)/earnings and basic
headline (loss)/earnings per share
is based (000's) 240 329 242 527 240 733
Weighted average number of shares on
which diluted (loss)/earnings and
diluted headline (loss)/earnings per
share is based (000's) 240 329 283 875 248 409
Intrinsic Net Asset Value (INAV)
Unaudited Unaudited Change since
30 June 31 December 31 December
2017 2016 2016
INAV of Brimstone (R'm) 4 532 5 134 -11.7%
INAV per share (cents) 1 884 2 140 -11.9%
Fully diluted INAV per share (cents) 1 790 2 043 -12.4%
Market price per share (cents)
Ordinary shares 1 300 1 299 0.1%
"N" Ordinary shares 1 300 1 200 8.3%
Discount to INAV
Ordinary shares 31.0% 39.3%
"N" Ordinary shares 31.0% 43.9%
The breakdown of INAV which has been prepared on the same basis as that used in
the integrated report for the year ended 31 December 2016, is available on the
Company's website at www.brimstone.co.za.
Further information
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
R'000 2017 2016 2016
1. Segmental information
Information reported to the
Group's operating decision makers
for the purpose of resource
allocation and assessment of
segment performance is specifically
focused on the individual entity
in which Brimstone has invested.
The Group's reportable segments
under IFRS 8: Operating Segments,
are therefore fishing, insurance,
clothing and investments.
Investments include investments
in associates, joint ventures,
available-for-sale investments,
investments at fair value through
profit or loss and the Group's
property portfolio.
Segment revenues and results
Segment revenue
Fishing 1 056 960 844 515 1 931 979
Insurance 83 063 138 469 208 679
Clothing 88 447 104 162 207 651
Investments 5 672 93 988 340 181
Total revenue 1 234 142 1 181 134 2 688 490
Segment profit/(loss) from operations
Fishing 167 715 77 233 196 562
Insurance (43 343) (9 696) (30 868)
Clothing (14 351) 2 949 5 918
Investments 45 842 52 699 287 868
Total profit from operations 155 863 123 185 459 480
Fair value (losses)/gains (255 117) 103 188 (70 803)
Other investment gains - - 30 189
Share of profits of associates
and joint ventures 3 976 39 615 98 300
Income from investments 22 292 13 092 27 042
Finance costs (149 947) (116 488) (260 708)
Taxation 21 958 (114 336) (86 173)
(Loss)/profit for the period (200 975) 48 256 197 327
2. Fair value measurements
This note provides information about how the Group determines fair
values of various financial assets and financial liabilities.
Fair value of the Group's financial assets and financial liabilities
that are measured on a fair value basis on a recurring basis
Some of the Group's financial assets and financial liabilities are
measured at fair value at the end of each financial reporting period.
The following table gives information about how the fair values of these
financial assets and financial liabilities are determined
(in particular, the valuation technique(s) and inputs used).
The directors consider that the carrying amounts of financial assets and
financial liabilities not measured at fair value on a recurring basis
(but fair value disclosures are required) recognised in the consolidated
financial statements approximate their fair values.
R'000
30 June 2017 Level 1 Level 2 Level 3 Total
Financial assets
at FVTPL*
Derivative financial
assets - 402 000(3) 15 057(3) 417 057
Listed shares 2 624 153 - - 2 624 153
Unlisted shares 663 399 - 5(1) 663 404
Available-for-sale
financial assets
Unlisted shares - - 25 265(2) 25 265
Unlisted shares - - 2 218(1) 2 218
Total 3 287 552 402 000 42 545 3 732 097
30 June 2016 Level 1 Level 2 Level 3 Total
Financial assets
at FVTPL*
Derivative financial
assets - 331 393(3) - 331 393
Listed shares 2 458 562 - - 2 458 562
Unlisted shares
and loan 735 244 - 5(1) 735 249
Other investments 70 428 - - 70 428
Available-for-sale
financial assets
Unlisted shares - - 25 265(2) 25 265
Unlisted shares - - 2 218(1) 2 218
Total 3 264 234 331 393 27 488 3 623 115
R'000
31 December 2016 Level 1 Level 2 Level 3 Total
Financial assets
at FVTPL*
Derivative financial
assets - 488 086(3) - 488 086
Listed shares 2 329 599 - - 2 329 599
Unlisted shares
and loan 619 885 - 5(1) 619 890
Available-for-sale
financial assets
Unlisted shares - - 25 265(2) 25 265
Unlisted shares - - 2 218(1) 2 218
Total 2 949 484 488 086 27 488 3 465 058
Financial liabilities
at FVTPL*
Derivative financial
liabilities - 2 698(3)^ - 2 698
*FVTPL = Fair value through profit or loss
^Adjusted for fishing licence liabilities of R100.9 million carried at
amortised cost
The table provided analyses financial instruments that are measured
subsequent to initial recognition at fair value, grouped in Levels 1 to
3 based on the degree to which fair value is observable.
- Level 1 fair value measurements are those derived from quoted prices
(unadjusted) in active markets for identical assets or liabilities.
- Level 2 fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
- Level 3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are
not based on observable market data (unobservable inputs).
There were no transfers between levels 1, 2 and 3 in the current or
prior period.
Notes
1. At cost or historical valuation.
2. Value determined by an independent valuer based on current market
values.
3. The following methods and inputs are used in valuing level 2
financial assets and liabilities:
- Options are independently valued using the Monte Carlo method,
taking into account the number of option shares, the spot price per
share, the risk free rate, dividend yield, volatility and
outstanding debt of the relevant share.
- The fair value of interest rate swaps is calculated as the present
value of the estimated future cash flows based on observable yield
curves.
- The fair value of forward exchange contracts is determined using
forward exchange spot and forward rates at the reporting date.
There are no changes to unobservable inputs that might result in a
significantly higher or lower fair value measurement within level 2 and
level 3 financial assets and liabilities.
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
3. Share Capital (number)
In issue
Ordinary shares 40 620 604 42 757 604 42 757 604
Held as treasury shares (2 136 074) (4 253 087) (4 273 074)
38 484 530 38 504 517 38 484 530
"N" Ordinary shares 235 907 107 246 330 843 238 423 687
Held as treasury shares (33 843 442) (46 184 634) (36 952 419)
202 063 665 200 146 209 201 471 268
Total net of treasury shares 240 548 195 238 650 726 239 955 798
Weighted average number of
shares on which basic
(loss)/earnings and basic
headline (loss)/earnings
per share is based: 240 328 910 242 526 545 240 732 715
Weighted average number of
shares on which diluted
(loss)/earnings and diluted
headline (loss)/earnings
per share is based: 240 328 910 283 874 851 248 409 451
Reconciliation of weighted
average number of shares used
in the calculation of basic and
diluted earnings per share and
headline earnings and diluted
headline earnings per share.
Basic 240 328 910 242 526 545 240 732 715
Dilutive instruments - 41 348 306 7 676 736
Diluted 240 328 910 283 874 851 248 409 451
Number of instruments treated
as anti-dilutive 34 590 141 1 826 519 25 805 605
Closing share price (cents)
Ordinary shares 1 300 1 350 1 299
"N" Ordinary shares 1 300 1 180 1 200
The following movements in the
number of shares occurred during
the period under review:
Shares issued Ordinary "N" Ordinary
9 March 2017 - 1 892 594
11 April 2017 - 400 000
Shares repurchased and cancelled
23 May 2017 2 137 000 4 809 174
Date: 23/08/2017 07:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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