Wrap Text
Provisional Summarised Audited Consolidated Annual Results For The Year Ended 30 June 2017
Tiso Blackstar Group SE
Incorporated in England and Wales
Company number SE 000110
Registered as an external company with limited liability in the
Republic of South Africa under registration number
2011/008274/10
Share codes: TBGR and TBG
ISIN: GB00BF37LF46
("Tiso Blackstar" or the "Company" or the "Group")
Provisional Summarised Audited
Consolidated Annual Results for
the year ended 30 June 2017
Highlights
- Consolidated EBITDA1 increased by 30.0% from R359.6 million* (GBP16.7 million*) to R467.6 million (GBP27.1 million);
- Consolidated turnover increased to R9.1 billion (GBP529.5 million) from R8.1 billion* (GBP376.5 million*);
- Core2 term debt reduction from R730.0 million (GBP37.4 million) to R633.1 million* (GBP37.3 million*);
- Proposed final dividend of 4.65912 cents (0.25935 pence) per share;
- Strong performance from Media with EBITDA growth of 25.8%;
- Hirt & Carter Group increased EBITDA from R234.8 million* (GBP10.9 million*) to R245.0 million (GBP14.2 million);
- Agreed sale of 22.9% interest in KTH for R1.5 billion (GBP88.3 million);
- Blackstar Holdings Group achieved a level 2 B-BBEE contributor status, post year end, based on the revised
Broad-Based Black Economic Empowerment Codes of Good Practice that came into effect on 1 May 2015;
- Listing transferred from Altx to JSE Main Board on 13 July 2017;
- Successful migration of the Company from Malta to the United Kingdom;
- Special dividend of R40.0 million (GBP2.4 million) expected to be proposed on the successful closure of KTH
sale; and
- Financial highlights:
- Net profit before interest and tax of R284.0 million (GBP16.5 million) compared to a net loss before interest
and tax of R677.2 million (GBP31.5 million) in the prior year; and
- Earnings per share of 2.95 cents per share (0.18 pence per share) compared to a loss per share of 339.40
cents per share (15.81 pence per share).
Executive summary
Overview
The financial year under review corresponded with exceptionally difficult economic conditions. These were
triggered by South Africa entering a recession and exacerbated by political and policy uncertainty across most
of the regions in which we operate.
The Group's core businesses, housed under Blackstar Holdings Group Proprietary Limited ("BHG", previously Times
Media Group Proprietary Limited), posted above-inflation growth despite these conditions and higher input costs,
and are well positioned for any improvement in economic activity.
Earnings Before Interest Taxation Depreciation and Amortisation ("EBITDA") of the Group's non-core steel assets
declined on the back of very weak results from Robor Proprietary Limited ("Robor") which offset EBITDA growth
by Consolidated Steel Industries Proprietary Limited ("CSI"). The steel industry is particularly sensitive to the current
lack of economic growth and this performance is reflective, but strategies are being put in place to stop further
declines.
Core
The Group achieved growth in its core EBITDA despite significant investment in digital media to position the
business for the future, and unwinding the costly legacy structures of a traditional media house.
Notable core business highlights in the year included:
- The move to our new purpose-built premises in Parktown, Johannesburg, at a reduced rental, featuring
South Africa's first fully integrated multidisciplinary newsroom;
- Successful introduction of a digital paywall for Business Day and Financial Mail;
- Launch of our new eventing and conference centre - The Empire;
- Hirt & Carter Group adding new major international retail clients to its customer base on the strength of its
unique position in the market. Hirt & Carter Group provides wide-ranging retail marketing solutions including
information systems, pre-media services, and printing and production services for the bulk of South Africa's
retailers and brand companies;
- Our films division increasing its investment in both South African and international movie productions to
reduce its reliance on pure licensed movie distribution;
- Films, being appointed by Metro Goldwyn Mayer ("MGM") as its official distribution partner in South Africa;
- Our music business, Gallo Music, growing its repertoire of frontline artists and securing the Idols SA franchise;
- Ghanaian business Multimedia group recording significant growth in revenues and audiences to become
the country's leading TV and Radio business;
- Multi TV has the highest audience reach in Ghana around 33.0%; and
- Radio in Ghana is regional, however Multimedia group stations have the highest aggregate audience share
in the two most populous regions in Ghana - an audience share of 30.0% in Greater Accra and 25.0% in the
Ashanti region.
(1) EBITDA is defined as profit before interest and tax after adding back depreciation, amortisation, straight lining of leases and cash settled share
based payment expenses. Consolidated EBITDA is inclusive of items outside the ordinary day-to-day activities, while segmental EBITDA excludes
items outside of the ordinary day to day activities (refer note 10 for reconciliation between EBITDA and net profit before interest and tax)
(2) "Core" includes the segments Media, Hirt & Carter Group, Broadcast and Content, and the segment Africa (excluding South Africa) which comprises our interest
in associates: Radio Africa group in Kenya; Multimedia group in Ghana; and Coopers in Nigeria. "Non-core" category includes Robor and CSI
(*) Pro forma comparative financial information has been provided as a result in the change in the accounting treatment between the current and
prior years - refer Pro forma financial information section
Non-core
We made significant progress in strengthening our statement of financial position through the agreed sale of our
minority interest in Kagiso Tiso Holdings Proprietary Limited ("KTH") to Kagiso Trust Strategic Investments Proprietary
Limited ("Kagiso") for R1.5 billion (GBP88.3 million).
Kagiso will settle the transaction through a series of purchases of our shares in KTH over the next twelve to eighteen
months. The sale is expected to close once we receive regulatory approval.
EBITDA of the Group's non-core steel assets declined by 56.3% to R60.9 million (GBP3.5 million) as a result of very
weak results from Robor which offset EBITDA growth by CSI. We remain intent on disposing of these assets in the
foreseeable future when market conditions settle and the opportunity arises.
Pro forma financial information
As detailed in the interim results, Tiso Blackstar changed its status and was no longer an Investment Entity as
defined in IFRS 10 Consolidated Financial Statements, from 1 July 2016. Consequently the Group's subsidiaries,
as well as property subsidiaries are consolidated in terms of International Financial Reporting Standards ("IFRS")
from this date. The net identifiable assets of the Group's subsidiaries were recognised on the statement of financial
position at fair value on 1 July 2016, resulting in goodwill and gain on bargain purchase being recognised at that date.
Investments in associates - Radio Africa Limited ("Radio Africa group"), Multimedia Group Limited ("Multimedia group") and Cooper
Communications Limited ("Coopers") - previously held at fair value, were equity accounted from 1 July 2016.
In line with IFRS, the comparative period ended 30 June 2016 has not been restated and is disclosed on a fair-value basis
as previously reported.
To assist shareholders in assessing our performance over time, pro forma financial information in the form of
consolidated comparatives has been prepared for Group debt, Group working capital, Revenue and EBITDA,
and the segmental analysis review, on the assumption that our holdings in these subsidiaries and associates were
the same in comparative periods as for the reporting period ended 30 June 2017 (refer note 10). The pro forma
financial information is further analysed by segment and allocated to core and non-core categories to give the
reader further insight into our operations and those that are expected to be continuing, i.e. core and non-
continuing ("non-core"), collectively ("the pro forma financial information").
The pro forma financial information has been prepared for illustrative purposes only and due to the nature of the
pro forma financial information, the consolidated comparatives for Group debt, Group working capital, Revenue
and EBITDA, and the segmental analysis review may not fairly present Tiso Blackstar's financial position, changes
in equity, results of operations or cash flows after these adjustments.
The pro forma financial information for the years ended 30 June 2015 and 30 June 2016 is presented in a manner
that is consistent with the new accounting policies of Tiso Blackstar as at 30 June 2017.
The pro forma financial information has been prepared in accordance with the JSE Listings Requirements and in
compliance with the SAICA Guide on Pro Forma Financial Information as if the acquisitions had taken place at
1 July 2014 and 1 July 2015 respectively, being the commencement date of the financial period for the purposes
of the statement of comprehensive income at 30 June 2015 and 30 June 2016, being the last day of the
financial period for the purposes of the statement of financial position. The pro forma financial information should
be read in conjunction with the unmodified assurance report of the independent reporting accountants which
is open for inspection at the Company's registered office.
The Directors of Tiso Blackstar are responsible for the preparation of the pro forma financial information.
A reconciliation of the pro forma EBITDA to the net profit for the period has been provided in note 10. A summary
of core and non-core Revenue and EBITDA for the current and prior years if presented on a consolidated basis is
as follows:
Pro forma Pro forma
financial financial
information information
30 June 30 June 30 June 30 June
2016 2017 2017 2016
R'000 R'000 GBP'000 GBP'000
REVENUE
3,813,607 4,220,296 Core 244,447 177,598
1,722,654 2,045,556 Media 118,482 80,223
1,581,958 1,733,554 Hirt & Carter Group 100,411 73,671
508,995 441,186 Broadcast and Content 25,554 23,704
4,200,150 4,906,857 Non-core 284,213 195,599
1,928,257 2,428,645 CSI 140,671 89,798
2,271,893 2,478,212 Robor 143,542 105,801
Segmental EBITDA
383,114 411,874 Core 23,858 17,843
104,327 131,237 Media 7,602 4,859
234,842 244,968 Hirt & Carter Group 14,190 10,937
43,945 35,669 Broadcast and Content 2,066 2,047
139,385 60,855 Non-core 3,524 6,492
55,742 90,892 CSI 5,264 2,596
83,643 (30,037) Robor (1,740) 3,896
The core category includes the segments Media, Hirt & Carter Group, Broadcast and Content, and the segment
Africa (excluding South Africa) which comprises our interest in associates: Radio Africa group in Kenya;
Multimedia group in Ghana; and Coopers in Nigeria.
The non-core category includes Robor and CSI.
Group debt review
Debt
30 June 30 June 30 June
2017 2016* 2015*
Rm
Core 804 839 913
Other 443 414 440
Non-core 139 129 116
Total debt 1,386 1,382 1,469
Tiso Blackstar's debt is split between core and non-core. Non-core debt is expected to be assumed by purchasers
as part of the sales of non-core assets as these are implemented.
Core debt in Tiso Blackstar (held by BHG) includes R633.1 million, GBP37.3 million (2016: R730.0 million*, GBP37.4 million*)
of term debt and R159.4 million, GBP9.4 million (2016: R94.0 million*, GBP4.8 million*) of asset-based finance.
During the year, core acquisition debt decreased 13.3% in line with contractual repayments; asset-based finance
grew 69.6% after acquiring new equipment for Hirt & Carter Group, and the net cash position exceeded its overdrafts.
Other debt held at head-office level by Tiso Blackstar Holdings SE includes R407.2 million, GBP24.0 million (2016: R413.8
million, GBP21.2 million) of term debt, which will be repaid in full with part of the cash proceeds received from the
sale of KTH.
Non-core debt is inclusive of term debt and asset-based finance held by CSI and Robor. At the financial year
end, Robor had term debt of R83.7 million, GBP4.9 million (2016: R86.1 million*, GBP4.4 million*) and net working capital
facility (consisting of factored debtors, stock debt and overdrafts) of R420.2 million, GBP24.7 million (2016: R361.0
million*, GBP18.5 million*). CSI does not have term debt and, at 30 June 2017, had R36.1 million, GBP2.1 million (2016:
R35.6 million*, GBP1.8 million*) of asset-based finance and net working capital facility utilisation of R372.4 million,
GBP15.6 million (2016: R265.7 million*, GBP13.6 million*). Working capital facility amounts are not included in the debt
figures above.
* Pro forma comparative financial information has been provided as a result in the change in the accounting treatment
between the current and prior years - refer Pro forma financial information section
Working capital review
Rigorous control of working capital preserved cash flow generation over the year with a R6.1 million (GBP0.4 million)
increase in net working capital on the core businesses and a R24.8 million (GBP1.5 million) reduction in net working
capital from the non-core businesses.
Segmental review
Core
Media
Media turned in a strong performance in the face of difficult trading conditions, growing EBITDA by 25.8% to
R131.2 million (GBP7.6 million) despite revenue declines in traditional media, and significant investment in digital to
position the business for the future. Media generated revenue of R2.0 billion (GBP118.5 million) for the year.
Newspaper EBITDA grew by 37.2% after declines in recent years, reflecting the focus on costs, the publication of
high-margin supplements and 360° advertising offerings that helped grow market share.
The focus on growing subscriber bases, while containing costly distribution spend, continued. Notably, the launch
of the BusinessLive subscription paywall grew the Group's subscription base by over 10.0% across our business titles
in under three months. Post year end, the redesigned Sunday Times and Times newspapers began introducing a
new paywall to their online products. This mirrors the BusinessLive strategy as well as the global trend toward
paywalls and growing 'paid for' reader revenue.
Magazines remain a strong contributor, thanks to innovative custom publishing products and continued success
of the SA HomeOwner franchise. Newspaper brand extensions such as Business Day's Wanted, Sowetan's S-Mag
and Sunday Times' Edit all contributed to profitability.
The digital and events areas of Media are in the investment phase and showing excellent progress.
Digital investment levels were retained as advertising grew in line with market trends, although revenues still lag
behind audience figures. The business is focused on developing innovative revenue streams that include native
advertising, multimedia income and 'paid for' reading models. This is especially important as traditional digital
advertising becomes increasingly pressured by programmatic advertising trends.
Eventing revenue grew by leveraging the excellent brands in the business and building bespoke events with
higher margins to build sustainability. The business also opened its new eventing home - The Empire - which is
already generating good third-party revenue as a pure eventing space. The business has been bolstered by the
addition of a highly-rated sponsorship team that is already having a positive impact.
Smartcall Technology Solutions Proprietary Limited ("STS"), which provides mobile content and technology
services in South Africa and sub-Saharan Africa, maintained solid earnings and revenue growth. STS continues to
look to develop new products and services in a fast-evolving market, especially outside a maturing South African
market.
Broadcast and Content
The Broadcast and Content segment produced strong results all round, except for its films business which remains
pressured by changed market conditions. This segment generated revenue of R441.2 million (GBP25.6 million) and
EBITDA of R35.7 million (GBP2.1 million) during the year.
The most positive performance in the segment was in TV and Radio which, combined, grew revenue 10.3% and
EBITDA by over 60.0%. TV production business, Ochre, and the Group's TV channels posted solid revenue and
EBITDA growth.
Early-stage SA radio investments continued to make good progress, growing turnover while maintaining their
respective current cost bases. Revenue for Mpumalanga's Rise FM grew by 40.0% and Vuma FM in KwaZulu-Natal
grew revenue by 20.0%.
Despite a softer earnings performance, the films business is well positioned for growth over the next two years.
This follows a restructuring to focus on owned content, good theatrical performance and continued success as
Africa's premier all-rights distributor of filmed content.
Tiso Blackstar Group Content division extended its representation of studio partners after being appointed by
MGM as its official distribution partner in South Africa across select content platforms with respect to new
theatrical features. This partnership further strengthens the Group's representation of its existing portfolio
of partners, being 20th Century Fox, Warner Bros. Pictures and numerous other key independent studio partners.
Gallo Music remained profitable in a turbulent market, characterised by the continued shift from physical to
digital and increasing emergence of music streaming as the core driver of future revenues. Gallo Records made
progress in developing and establishing new frontline artists including Nozipho, Jeremy Loops, Kabomo, The
Parlotones and Oliver Mtukudzi. It also recently secured the prestigious Idols SA music franchise. Gallo Music
Publishing grew EBITDA by using its owned catalogue of music. Gallo Music remains one of Africa's leading music
players and is poised to grow as the streaming market develops further. The business continues to seek
opportunities in music across the continent.
Hirt & Carter Group ("H&C")
H&C performed well in a difficult sales environment, increasing earnings and margins by focusing on costs and
efficiencies. This segment reported a 4.3% increase in EBITDA from R234.8 million* (GBP10.9 million*) in 2016 to R245.0
million (GBP14.2 million) in 2017. The integration of Uniprint and H&C continues to have positive results for the group
and new opportunities have been identified. Cost reduction initiatives are under way, which will reflect positively
in the next financial year's results.
H&C Software continues to grow revenue and EBITDA. Investment in new digital technology contributed to an
improved margin and allowed the group to drive further innovation in the market. Triumph Packaging was
successfully integrated into Uniprint and contributed to EBITDA over the period.
H&C has commissioned a new combined head office to house all its business units. This facility will be ready mid-
2018 and is expected to improve efficiencies across business units and enhance customer service.
H&C acquired a 51.0% interest in signage and branding specialist Bothma Branding Solutions Proprietary Limited
("BBS"), effective 1 July 2017. This will allow H&C to extend its client offering and further contribute to earnings.
Africa (excluding South Africa)
This segment comprises our African interests outside South Africa: a 32.3% interest in Multimedia group in Ghana,
49.0% in Radio Africa group in Kenya, and an effective 36.5% interest in Coopers in Nigeria.
Multimedia group Ghana performed well in the period, with its television arm delivering on its potential after
previous losses. It grew revenue 40.0% in its first half to June and EBITDA was up substantially on the prior year.
Radio Africa group felt the pressure of weak economic conditions ahead of August's elections and, as a result,
revenue decreased by 13.7%. It has since restructured its cost base, repositioned its radio business and partnered
with another leading media player in the country to further develop its Bamba TV platform.
Via our investments in Coopers and Radio Africa group, Tiso Blackstar owns an effective 36.5% interest in Lagos
Talks 91.3 FM - a 24-hour talk radio station in Lagos, Nigeria, which launched in September 2016 at the peak of
the economic recession. Despite this, Lagos Talks has steadily built an audience and recently secured English
Premier League live broadcast rights that include both the review and preview of league games.
Non-core investments
Overview
South African steel has, historically, been supplied by ArcelorMittal SA Limited ("AMSA") in a monopolistic fashion
where the supplier dictates terms, volumes and prices to distributors, fabricators and construction contractors.
Since the acquisition of Iscor by ArcelorMittal ("AM"), AMSA's international/export markets are now primarily
being serviced by AM through its international network of subsidiaries. Over the past five years, new-technology
Chinese steel mills have come on-line and are principally responsible for at least half of the 600 million-ton
oversupply of steel worldwide.
In addition to the state of the international steel market, a number of issues relate to AMSA operations in South
Africa specifically. These have led to the market being dominated by uncompetitive pricing and credit terms,
compounded by unreliable steel supply and quality, and slowing production. Unsustainable working capital
investment has meant high borrowings and low, if any, returns to shareholders. Understandably, these local issues
have increased demand for internationally produced steel.
* Pro forma comparative financial information has been provided as a result in the change in the accounting
treatment between the current and prior years - refer Pro forma financial information section
Robor
Robor had a very difficult year. The operating environment and local uncertainty resulted in the company
recording an EBITDA loss for the year of R30.0 million, GBP1.7 million (2016 EBITDA profit of R83.6 million*, GBP3.9 million*).
Lower volumes and margins, and the lack of real demand, materially impacted its business. Management took
steps to address market conditions by focusing on costs, efficiencies and cash flow. Robor's exports into
international and other African markets grew while South African market sales declined. During the year, Robor
completed the acquisition of the remaining 50.0% of Mine Support Products Proprietary Limited ("MSP").
Consolidated Steel Industries ("CSI")
CSI's principal divisions are Global Roofing Solutions and Stalcor. CSI increased revenue by 26.0% and EBITDA by
63.1%, reporting revenue of R2.4 billion (GBP140.7 million) and EBITDA of R90.9 million (GBP5.3 million) for the current
financial year. This result was achieved despite a struggling South African economy which has recorded significant
year-on-year shrinkages in the construction and steel fabrication industries.
CSI management expects further contractions in the local economy to manifest in flat revenue and profits in the
coming year, however, CSI's growing sub-Saharan Africa market share bodes well for future revenue and profit
growth. The group's Africa initiative requires intensive management to mitigate the vagaries of business in these
countries.
Working capital management remains a focus area for CSI, particularly given the challenges of increased
volumes and higher steel prices.
KTH
KTH is an investment holding company whose investments include market leaders in key sectors such as media,
resources, infrastructure, power and financial services, and comprise a mix of listed and private investments.
Further details on KTH can be found on www.kagiso.com.
On 6 July 2017, Tiso Blackstar updated shareholders on the conditional sale of its interest in KTH for R1.5 billion
(GBP88.3 million). The Company signed a share purchase agreement with KTH and Kagiso whereby Kagiso will
purchase Tiso Blackstar's entire shareholding in KTH, subject to the fulfilment of suspensive conditions. All the
conditions have been completed with the exception of the finalisation of the funding agreements and the
approval from the competition authorities.
Financial review
Tiso Blackstar's status as an Investment Entity changed as a result of its revised strategy, and it now consolidates
its investment in subsidiaries and equity accounts for its investments in associates from 1 July 2016. Due to this, the
prior year results are not comparable. These financial figures comprise the new base going forward.
Tiso Blackstar generated a profit before interest and tax of R284.0 million (GBP16.5 million) and consolidated EBITDA
of R467.6 million (GBP27.1 million), after adding back depreciation, amortisation and straight lining of leasing of R178.8 million
(GBP10.3 million) and the cash settled share based incentive payment of R4.8 million (GBP0.3 million). Tiso Blackstar
generated a loss after taxation of R15.4 million (GBP0.9 million) for the year ended 30 June 2017.
Operating expenses of R1.4 billion (GBP82.3 million) mainly include the day-to-day operational expenses of R43.7
million (GBP2.5 million) to run Tiso Blackstar head office, R848.4 million (GBP49.1 million) to run the core business BHG,
R501.8 million (GBP29.1 million) to run the non-core businesses CSI and Robor, and transaction related costs of R10.2
million (GBP0.6 million) the majority of which are costs arising on the shareholder approved migration to the UK. Costs
are closely monitored and action is taken wherever possible to cut any excess expenditure in order to improve
the profitability of the Group.
Other gains of R70.2 million (GBP4.1 million) mainly comprise of the following: a R22.1 million (GBP1.3 million) profit on
disposal of property, plant and equipment; a R11.4 million (GBP0.7 million) reversal of impairment on property, plant
and equipment; a R41.7 million (GBP2.4 million) gain arising on step up acquisitions from associate to subsidiary; a
R4.9 million (GBP0.3 million) fair value loss to investment property; a R7.8 million (GBP0.5 million) profit on disposal of
investment properties; a R3.1 million (GBP0.1 million) foreign exchange loss arising on translation of foreign amounts
and a R25.3 million (GBP1.5 million) impairment loss on equity investments.
Share of profit of associates of R7.4 million (GBP0.4 million) mainly comprises the Group's share of profits in Radio Africa group,
Multimedia group and Coopers.
Other comprehensive loss of R70.5 million (profit of GBP24.0 million) recognised directly in equity (namely the Foreign
Currency Translation Reserve) arose on translation of CSI's African subsidiaries and the Group's African based
associates to Rands (a loss of R70.5 million, GBP4.1 million) and a profit of GBP28.1 million on translation of the Group's
results from Rands to Pounds Sterling. An actuarial gain of R2.7 million (GBP0.2 million) arose on the valuation of the
post retirement medical aid ("PRMA") liability in BHG.
Bank overdrafts and other short term borrowing facilities of R886.8 million (GBP52.2 million) includes working capital
facilities of R792.6 million (GBP46.7 million) and bank overdrafts of R94.2 million (GBP5.5 million), held by the trading
subsidiaries. Tiso Blackstar generated cash from operations of R312.1 million (GBP17.5 million) during the reporting
period.
Cash out flow from investing activities of R882.2 million (GBP47.0 million) mainly comprises the net cash balances
and other short term borrowing facilities of the Deemed Acquisitions (BHG, CSI and Robor refer to note 2) of R714.0
million (GBP37.5 million) on 1 July 2016.
Cash out flow from financing activities of R154.5 million (GBP8.9 million) mainly comprises repayment of borrowings
of R328.9 million (GBP19.1 million) (including repayment of finance leases, instalment sale agreements and other
financial labilities) and R23.8 million (GBP1.4 million) dividend paid to shareholders, during the current year.
As an Investment Entity which fair valued its investments, the Group reported total assets of R3.9 billion (GBP200.8
million) as at 30 June 2016, and on a consolidated basis, total assets amounted to R8.4 billion (GBP495.7 million) as
at 30 June 2017.
At 30 June 2017 and 30 June 2016, the investment in KTH met the requirements of IFRS 5 Non-current Assets Held
for Sale and Discontinued Operations, and has been separately classified and disclosed from other investment
in associates, as a non-current asset held for sale and a discontinued operation.
Changes in the fair value, dividends and fees earned, and relating tax charges, attributable to KTH have been
disclosed separately from continuing operations as a discontinued operation. The loss from the discontinued
operation of R7.6 million (GBP0.4 million) includes a R20.0 million (GBP1.2 million) loss on remeasurement of fair value less
costs to sell; a R13.2 million (GBP0.8 million) dividend received; and a R1.1 million (GBP0.07 million) in directors' fees earned.
On implementation of the BHG and KTH acquisitions during June 2015, Tiso Blackstar raised debt of R534.0 million
(GBP28.0 million) which was utilised to settle the cash consideration and to repay the existing facility as full and final
settlement. This debt was reduced to R407.2 million (GBP24.0 million) by 30 June 2017, by utilising proceeds from
disposals and free cash. R35.5 million (GBP2.1 million) of the general banking facility was utilised by 30 June 2017.
The term funding raised by BHG in June 2015 of R800.0 million (GBP42.0 million) was reduced to R633.1 million (GBP37.3
million) by 30 June 2017.
During the current financial year, the Company repurchased a total of 1,944,424 Tiso Blackstar shares in the open
market at an average price per share of R9.41 (GBP0.53) and a total cost of R18.3 million (GBP1.0 million).
At 30 June 2017, Tiso Blackstar held 3,012,349 (2016: 1,067,925) treasury shares. The award under the long term Management
Incentive Scheme was issued from treasury shares on 30 June 2017 but are not considered issued for IFRS purposes. A dividend of
R12.0 million (GBP0.7 million) was paid to shareholders in December 2016 in respect of the prior financial year, and a
R12.0 million (GBP0.7 million) interim dividend was paid to shareholders in March 2017 in respect of the current financial year.
A final dividend of R12.5 million (GBP0.7 million) has been proposed in respect of the current financial year.
Dividends
In determining dividends, the Company considers its current financial flexibility, the expected net cash flows from
assets, as well as expected strategic corporate actions. It also considers the current share trading price, and the
opportunity to buy back Tiso Blackstar shares to enhance shareholder return. The Company places emphasis on
making some dividend payments on an interim and final basis, with a view to growing the dividend over time.
An interim dividend of 4.47275 South African cents (0.28465 pence) per ordinary share was paid on 20 March 2017.
The Tiso Blackstar Board has recommended a final dividend of 4.65912 South African cents (0.25935 pence) per ordinary
share, which is subject to shareholder approval at the next Annual General Meeting ("AGM"). The timetable for
the dividend, which includes the record and payment dates, will be released along with the timetable for the
AGM in due course.
In addition to the above, a special dividend of R40.0 million (GBP2.4 million#) has been approved by the Tiso Blackstar Board
to be paid to shareholders conditional on completion of the KTH sale, and in due course shareholders will receive
the relevant information regarding the special dividend.
(#) Pounds Sterling equivalent provided for disclosure purposes determined using the closing exchange rate on
30 June 2017 as noted above. Special dividend per share to be determined on declaration date based on the number
of shares in issue.
Black economic empowerment
Tiso Blackstar remains committed to transformation. BHG was proud to achieve a level 2 B-BBEE contributor status
with a procurement recognition level of 125.0% and more than 51.0% black ownership. BHG was audited based on
the revised Broad-Based Black Economic Empowerment Codes of Good Practice that came into effect on 1 May 2015.
Outlook
The core businesses have evolved over the past year and we look forward to ongoing growth in H&C and continuous
improvement in Media's performance.
Proceeds from the sale of our KTH investment will give Tiso Blackstar a stronger balance sheet and will position
the Group to capitalise on future opportunities.
Although, tough economic conditions have persisted in making the business environment very challenging,
particularly in the steel industry, management in the extended Group are taking the necessary steps to ensure
operations stabilise and remain as profitable as possible. This includes focusing on profit margins, reducing working
capital levels, an ongoing drive to reduce operating costs and a continuous search for innovative ways to
increase revenue and add new income streams.
AD Bonamour DKT Adomakoh
Chief Executive Officer Non-executive Chairman
27 September 2017
Summarised consolidated statements of income and other comprehensive income
for the year ended 30 June 2017
On a fair value basis On a consolidated basis
(Investment Entity)^: (Trading Entity):
30 June 30 June 30 June 30 June
2016 2016 2017 2017
GBP'000 R'000 R'000 GBP'000
Continuing operations
559 12,002 Revenue 9,141,010 529,462
- - Cost of sales (7,421,440) (429,862)
559 12,002 Gross profit 1,719,570 99,600
(2,899) (62,222) Operating expenses (1,420,826) (82,293)
(77) (1,652) Depreciation, amortisation and straight lining of leases (178,814) (10,317)
19,137 410,950 Other income 93,849 5,436
16,720 359,078 Operating profit 213,779 12,426
(48,258) (1,036,274) Other gains (losses) 70,194 4,081
(31,538) (677,196) Net profit (loss) 283,973 16,507
(2,276) (48,865) Net finance costs (240,700) (13,942)
58 1,251 Finance income 8,175 474
(2,334) (50,116) Finance costs (refer note 4) (248,875) (14,416)
- - Share of profit of associates - equity accounted 7,395 416
(33,814) (726,061) Profit (Loss) before taxation 50,668 2,981
(45) (955) Taxation (58,508) (3,409)
(33,859) (727,016) Loss from continuing operations (7,840) (428)
(8,375) (179,853) Loss from discontinued operation, net of taxation (refer note 5) (7,607) (441)
(42,234) (906,869) Loss for the year (15,447) (869)
Loss for the year attributable to:
(42,234) (906,869) Equity holders of the parent 7,823 486
- - Non-controlling interest (23,270) (1,355)
(42,234) (906,869) (15,447) (869)
Other comprehensive income (loss), net of taxation items that
(8,887) - may subsequently be reclassified to profit and loss (refer note 6): (70,471) 23,955
Currency translation differences on the translation of
- - foreign operations (70,471) (4,118)
Currency translation differences on the translation of Rand
(8,887) - denominated Group entities to presentational currency - 28,073
- - Actuarial gains on PRMA 2,667 154
(8,887) - Other comprehensive (loss) income for the year (67,804) 24,109
(51,121) (906,869) Total comprehensive (loss) income for the year (83,251) 23,240
Total comprehensive (loss) income attributable to:
(51,121) (906,869) Equity holders of the parent (58,701) 23,167
- - Non-controlling interest (24,550) 73
(51,121) (906,869) (83,251) 23,240
Basic earnings (losses) per ordinary share (in cents/pence)
(15.81) (339.40) attributable to equity holders (refer note 7) 2.95 0.18
Diluted earnings (losses) per ordinary share (in cents/pence)
(15.81) (339.40) attributable to equity holders (refer note 7) 2.93 0.18
Basic earnings (losses) per ordinary share (in cents/pence)
attributable to equity holders from continuing operations
(12.67) (272.09) (refer note 7) 5.82 0.35
Diluted earnings (losses) per ordinary share (in cents/pence)
attributable to equity holders from continuing operations
(12.67) (272.09) (refer note 7) 5.78 0.35
Weighted average number of shares
267,199 267,199 (net of treasury shares, in thousands) (refer note 7) 265,279 265,279
Weighted average number of shares in issue (in thousands)
267,199 267,199 (refer note 7) 266,879 266,879
^ Refer note 3
Summarised consolidated statement of financial position
as at 30 June 2017
On a fair value basis On a consolidated basis
(Investment Entity)^: (Trading Entity):
30 June 30 June 30 June 30 June
2016 2016 2017 2017
GBP'000 R'000 R'000 GBP'000
ASSETS
121,924 2,376,644 Non-current assets 3,964,466 233,440
222 4,331 Property, plant and equipment 965,816 56,875
- - Investment property 12,674 746
1 12 Straight lining of lease asset 169 10
- - Goodwill 1,224,936 72,126
- - Intangible assets 1,289,933 75,953
120,805 2,354,830 Financial assets designated at fair value through profit and loss - -
100,300 1,955,133 Net investments in subsidiaries - -
20,505 399,697 Net investments in associates - -
- - Investments in associates - equity accounted 346,161 20,383
776 15,128 Other investments, loans and receivables 29,704 1,749
120 2,343 Deferred taxation 95,073 5,598
78,866 1,537,313 Current assets 4,453,348 262,221
- - Inventories 1,088,622 64,100
1 21 Straight lining of lease asset 3,282 193
206 4,008 Trade and other receivables 1,656,453 97,537
10 198 Current tax assets 30,090 1,770
671 13,086 Cash and cash equivalents (refer note 8) 174,901 10,298
77,978 1,520,000 Non-current asset held for sale 1,500,000 88,323
200,790 3,913,957 TOTAL ASSETS 8,417,814 495,661
EQUITY AND LIABILITIES
179,223 3,493,549 Capital and reserves attributable to the Group's equity holders 3,378,132 199,159
203,564 3,255,248 Share capital and premium 3,255,248 203,564
(468) (9,797) Treasury shares (27,079) (1,448)
4,599 52,173 Other reserves 66,716 5,448
(50,549) - Foreign currency translation reserve (68,455) (27,986)
22,077 195,925 Retained earnings 151,702 19,581
- - Non-controlling interest 190,762 10,990
179,223 3,493,549 TOTAL EQUITY 3,568,894 210,149
LIABILITIES
20,357 395,084 Non-current liabilities 1,737,972 102,335
20,353 395,000 Borrowings 1,069,260 62,960
- - Straight lining of lease liability 83,907 4,941
- - Other financial liabilities 8,491 500
- - Finance lease and instalment sale obligations 135,956 8,005
- - Post-retirement benefits liabilities 54,355 3,201
- - Provisions 11,246 662
4 84 Deferred taxation 374,757 22,066
1,210 25,324 Current liabilities 3,110,948 183,177
874 18,766 Borrowings 120,885 7,117
63 1,228 Straight lining of lease liability - -
- - Other financial liabilities 6,660 392
- - Finance lease and instalment sale obligations 59,495 3,503
- - Post-retirement benefits liabilities 7,551 445
- - Provisions 115,441 6,797
265 5,170 Trade and other payables 1,882,123 110,823
8 160 Current tax liabilities 31,951 1,881
Bank overdrafts and other short term borrowing facilities
- - (refer note 8) 886,842 52,219
21,567 420,408 TOTAL LIABILITIES 4,848,920 285,512
200,790 3,913,957 TOTAL EQUITY AND LIABILITIES 8,417,814 495,661
^ Refer note 3
Summarised consolidated statement of changes in equity
for the year ended 30 June 2017
Foreign
currency Attributable Non-
Share Share Treasury Other translation Retained to equity controlling Total
capital premium shares reserves reserve earnings holders interest equity
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Balance as at 1 July 2015 2,535,442 701,781 - 52,173 - 1,113,252 4,402,648 (334) 4,402,314
Total comprehensive loss for the year: - - - - - (906,869) (906,869) - (906,869)
Loss for the year - - - - - (906,869) (906,869) - (906,869)
Other comprehensive loss for the year - - - - - - - - -
Transactions with owners: 18,594 (569) (9,797) - - (10,458) (2,230) 334 (1,896)
Shares issued for investment acquisitions 18,594 (569) 1,293 - - - 19,318 - 19,318
Purchase of treasury shares - - (11,090) - - - (11,090) - (11,090)
Disposal of entire interest in
consolidated subsidiary - - - - - (445) (445) 334 (111)
Dividends paid - - - - - (10,013) (10,013) - (10,013)
Balance as at 30 June 2016 2,554,036 701,212 (9,797) 52,173 - 195,925 3,493,549 - 3,493,549
Total comprehensive loss for the year - - - 2,667 (69,191) 7,823 (58,701) (24,550) (83,251)
Loss for the year - - - - - 7,823 7,823 (23,270) (15,447)
Other comprehensive loss for the year - - - 2,667 (69,191) - (66,524) (1,280) (67,804)
Transactions with owners: - - (17,282) 11,876 736 (52,046) (56,716) 215,312 158,596
Deemed Acquisitions - - - 491 736 8 1,235 204,295 205,530
Issued in terms of the long term
Management Incentive Scheme - - 1,044 (1,044) - - - - -
Purchase of treasury shares - - (18,326) - - - (18,326) - (18,326)
On acquisition of subsidiary/business - - - (2,829) - (28,251) (31,080) 20,407 (10,673)
Equity loans from non-controlling interest - - - 15,258 - - 15,258 - 15,258
Dividends paid - - - - - (23,803) (23,803) (9,390) (33,193)
Balance as at 30 June 2017 2,554,036 701,212 (27,079) 66,716 (68,455) 151,702 3,378,132 190,762 3,568,894
Summarised consolidated statement of changes in equity
for the year ended 30 June 2017
Foreign
currency Attributable Non-
Share Share Treasury Other translation Retained to equity controlling Total
capital premium shares reserves reserve earnings holders interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1 July 2015 163,310 39,391 - 4,599 (41,662) 64,796 230,434 (18) 230,416
Total comprehensive loss for the year - - - - (8,887) (42,234) (51,121) - (51,121)
Loss for the year - - - - - (42,234) (42,234) - (42,234)
Other comprehensive loss for the year - - - - (8,887) - (8,887) - (8,887)
Transactions with owners: 891 (28) (468) - - (485) (90) 18 (72)
Shares issued for investment acquisitions 891 (28) 62 - - - 925 - 925
Purchase of treasury shares - - (530) - - - (530) - (530)
Disposal of entire interest in
consolidated subsidiary - - - - - (19) (19) 18 (1)
Dividends paid - - - - - (466) (466) - (466)
Balance as at 30 June 2016 164,201 39,363 (468) 4,599 (50,549) 22,077 179,223 - 179,223
Total comprehensive income for the year: - - - 154 22,527 486 23,167 73 23,240
Loss for the year - - - - - 486 486 (1,355) (869)
Other comprehensive income for the year - - - 154 22,527 - 22,681 1,429 24,109
Transactions with owners: - - (980) 695 36 (2,982) (3,231) 10,917 7,686
Deemed Acquisitions - - - 193 36 - 229 10,481 10,710
Issued in terms of the long term
Management Incentive Scheme - - 60 (60) - - - - -
Purchase of treasury shares - - (1,040) - - - (1,040) - (1,040)
On acquisition of subsidiary/business - - - (320) - (1,628) (1,948) 966 (982)
Equity loans from non-controlling interest - - - 882 - - 882 - 882
Dividends paid - - - - - (1,354) (1,354) (530) (1,884)
Balance as at 30 June 2017 164,201 39,363 (1,448) 5,448 (27,986) 19,581 199,159 10,990 210,149
A 2016 final dividend of 4.47 South African cents, 0.25 pence per ordinary share was paid on 15 December 2016.
A 2017 interim dividend of 4.47 South African cents, 0.28 pence per ordinary share was paid on 20 March 2017.
A 2017 final dividend of 4.65912 South African cents, 0.25935 pence per ordinary share was proposed on 19
September 2017.
Summarised consolidated statement of cash flows
as at 30 June 2017
On a fair value basis On a consolidated basis
(Investment Entity): (Trading Entity):
30 June 30 June 30 June 30 June
2016 2016 2017 2017
GBP'000 R'000 R'000 GBP'000
Cash flow from operating activities
- - On a consolidated basis (Trading Entity): 312,126 17,491
- - Cash generated by operations 457,791 25,928
- - Dividend income received from investments 24,738 1,433
- - Net finance costs paid (129,572) (7,505)
- - Taxation refund received 1,080 63
- - Taxation paid (41,911) (2,428)
4,353 93,243 On a fair value basis (Investment Entity): - -
(2,033) (43,599) Cash utilised by operations - -
(759) (16,864) Additions to investments - -
2,588 55,840 Proceeds from investments - -
4,632 99,469 Dividend and interest income received from investments - -
(75) (1,603) Taxation paid - -
4,353 93,243 Net cash generated by operating activities 312,126 17,491
Cash flow from investing activities
- - On a consolidated basis (Trading Entity): (882,615) (47,001)
- - Acquisition of property, plant and equipment (279,784) (16,206)
- - Proceeds on disposal of property, plant and equipment 55,925 3,239
- - Additions to investments (34,505) (1,999)
- - Proceeds on disposal of investments 6,638 384
- - Additions to investment properties (412) (24)
- - Proceeds on disposal of investment properties 88,484 5,125
- - Additions to intangible assets (27,890) (1,393)
- - Equity loan from non-controlling interest 15,258 883
- - Acquisitions of consolidated subsidiaries/businesses (713,972) (37,453)
- - Disposal of consolidated subsidiary 7,643 443
(113) (2,431) On a fair value basis (Investment Entity): - -
(172) (3,698) Acquisition of property, plant and equipment - -
1 25 Proceeds on disposal of property, plant and equipment - -
58 1,251 Finance income received - -
- (9) Disposal of consolidated subsidiary - -
(113) (2,431) Net cash utilised by investing activities (882,615) (47,001)
Cash flow from financing activities
- - On a consolidated basis (Trading Entity): (154,538) (8,890)
- - Borrowings raised 250,028 14,482
- - Borrowings repaid (328,919) (19,050)
- - Cash settled share based payment of subsidiary (24,128) (1,398)
- - Purchase of treasury shares (18,326) (1,040)
- - Dividends paid (23,803) (1,354)
- - Dividends paid to non-controlling interest (9,390) (530)
(4,552) (97,453) On a fair value basis (Investment Entity): - -
(1,222) (26,234) Borrowings repaid - -
(2,334) (50,116) Finance costs paid - -
(530) (11,090) Purchase of treasury shares - -
(466) (10,013) Dividends paid to non-controlling interest - -
(4,552) (97,453) Net cash utilised by financing activities (154,538) (8,890)
(312) (6,641) Net decrease in cash and cash equivalents (725,027) (38,400)
1,032 19,727 Cash and cash equivalents at the beginning of the year 13,086 671
(49) - Exchange losses on cash and cash equivalents - (4,192)
671 13,086 Cash and cash equivalents at the end of the year (711,941) (41,921)
Notes to the summarised consolidated financial statements
for the year ended 30 June 2017
1. Basis of preparation
Investors should consider non-Generally Accepted Accounting Principles ("non-GAAP") financial measures
shown in this provisional announcement in addition to, and not as a substitute for or as superior to, measures
of financial performance reported in accordance with International Financial Reporting Standards ("IFRS").
The IFRS results reflect all items that affect reported performance and therefore it is important to consider
the IFRS measures alongside the non-GAAP measures.
The principal accounting policies adopted in the preparation of the summarised consolidated financial
statements and have been consistently applied across all periods presented in the summarised consolidated
financial statements. All the summarised consolidated financial statements are presented in both Pounds
Sterling and South African Rands and all financial information has been rounded to the nearest thousand
unless stated otherwise.
While the financial information included in this provisional announcement has been prepared in accordance
with the recognition and measurement criteria of IFRS published by the International Accounting Standards
Board ("IASB") as endorsed for use by the European Union and South Africa, this announcement does not
itself contain sufficient information to comply with IFRS. The financial information is a provisional summarised
consolidated set of financial statements of the Integrated Annual Report which was approved by the Tiso Blackstar
Board on 27 September 2017. The financial statements have been prepared on a historical cost basis,
except for financial assets and financial liabilities held at fair value through profit and loss, and investment property
that have been measured at fair value.
The accounting policies and methods of computation are in terms of IFRS and consistent with those applied
in the annual consolidated financial statements for the year ended 30 June 2016 with the exception of the
changes adopted as a result of the Company's change in status as an Investment Entity as detailed in note 2.
The provisional summarised consolidated financial statement announcement is only a summary of the
information in the consolidated financial statements included in the Integrated Annual Report and does
not contain full or complete details. Any investment decision by investors and/or shareholders should be
based on consideration of the final consolidated financial statements included in the Integrated Annual
Report 2017 to be published on the Company's website as a whole.
1.1 JSE Listing
The Company has a dual primary listing on the Main Board of the JSE Limited ("JSE") in South Africa and the
AIM market ("AIM") of the London Stock Exchange ("LSE").
These provisional summarised consolidated financial statements have been prepared in accordance with
the framework concepts and the measurement and recognition requirements of IFRS and SAICA Financial
Reporting Guides as issued by the Accounting Practice Committee and the Financial Pronouncements as
issued by the Financial Reporting Standards Council, and the minimum information as required by
International Accounting Standards ("IAS") 34: Interim Financial Reporting.
The Group's South African external auditors, Deloitte & Touche, have issued their opinions on the Group's
consolidated financial statements and the provisional summarised consolidated financial statements for the
year ended 30 June 2017. The audits were for both the summarised and full set of consolidated financial
statements conducted in accordance with International Standards on Auditing. Deloitte & Touche have
expressed unmodified opinions on the Group's consolidated financial statements and the provisional
summarised consolidated financial statements. The copies of their audit reports are available for inspection
at the Company's registered office. Any reference to future financial performance included in this
provisional report has not been reviewed or reported on by the Group's South African external auditors.
The auditor's report does not necessarily report on all of the information contained in this
announcement/financial results. 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 that report, together
with the accompanying financial information, from the Company's registered office.
These provisional summarised consolidated financial statements are extracted from the audited Group
consolidated financial statements. The Directors take full responsibility for the preparation of the provisional
summarised audited results and confirm that the financial information and related commentary has been
correctly extracted from the underlying Group consolidated financial statements.
1.2 AIM Listing
The financial information for the year ended 30 June 2017 does not constitute statutory accounts as defined
in sections 435(1) and 435(2) of the UK Companies Act 2006 (Companies Act 2006) but has been derived
from those accounts. Statutory accounts for the year ended 30 June 2016 have been delivered to the
Registrar of Companies in Malta and those for the year ended 30 June 2017 will be delivered to the
Companies House in the UK following the Company's Annual General Meeting ("AGM").
The AGM will be held on Tuesday, 21 November 2017. Further information relating to the AGM will be
provided to shareholders in future correspondence.
Deloitte LLP, the external auditor registered in the UK, has reported on these accounts for the year ended
30 June 2017. Their report was unqualified, did not include a reference to any matters to which auditors
draw attention by way of emphasis of matter and did not contain a statement under section 498(2) or 498(3)
of the Companies Act 2006. These statutory accounts have been prepared in accordance with IFRS and
IFRS Interpretations Committee interpretations adopted for use by the EU, with those parts of the Companies
Act 2006 applicable to companies reporting under IFRS.
1.3 Going concern
The Tiso Blackstar Board has reviewed the working capital requirements of the Group along with the funding requirements
for the Group, from the date of approval of the annual financial statements, and has found that the Group
will remain a going concern for at least the next twelve months.
On 6 July 2017, Tiso Blackstar updated shareholders on the conditional sale of its interest in KTH for R1.5 billion
(GBP88.3 million). The Company signed a share purchase agreement with KTH and Kagiso whereby Kagiso will
purchase Tiso Blackstar's entire shareholding in KTH, subject to the fulfilment of suspensive conditions. All the
conditions have been completed with the exception of the finalisation of the funding agreements and the
approval from the competition authorities.
Debt held at head-office level by Tiso Blackstar Holdings SE includes R407.2 million (GBP24.0 million) (2016: R413.8
million, GBP21.2 million) of term debt, which will be repaid in full with part of the cash proceeds received from
the sale of KTH. Tiso Blackstar also remains intent on paying a special dividend of R40.0 million (GBP2.4 million).
The remaining funds will be held to be reinvested into media-focused investments in accordance with Tiso
Blackstar's stated strategy.
The Group along with Rand Merchant Bank ("RMB"), are in the process of restructuring the debt facilities of
Robor. The Group will provide additional guarantees to RMB and these additional guarantees will not
impede the Group's ability to service its own debt for at least the next twelve months.
The Tiso Blackstar Board is not aware of any material uncertainties which may cast significant doubt over the Group's
ability to continue as a going concern.
1.4 Foreign currencies
Functional and presentation currency
The functional currency of the Company is South African Rands, being the currency of the primary economic
environment in which the Company and its subsidiaries operate.
The Company has a dual primary listing on the Main Board of the JSE in South Africa and the AIM market of
the LSE. As a result, Tiso Blackstar has two presentational currencies being South African Rands ("Rands")
and Pounds Sterling ("Pounds Sterling").
The principal exchange rates utilised to prepare the summarised consolidated financial statements are as
follows:
Closing rate Average rate
30 June 30 June 30 June 30 June
2017 2016 2017 2016
GBP/ZAR 16.983 19.493 17.265 21.473
EUR/ZAR 14.901 16.269 14.833 16.105
EUR/GBP 0.877 0.835 0.859 0.750
2. Change in status as an Investment Entity
Effective 1 July 2016, there was a change in the Group's status as an Investment Entity as defined in IFRS 10
Consolidated Financial Statements. IFRS 10 specifies that an entity that ceases to be an Investment Entity
shall account for the change in its status prospectively from the date at which the change in status occurred.
Further guidance from IFRS 10 specifies that when an entity ceases to be an Investment Entity, it shall apply
IFRS 3 Business Combinations to any subsidiary that was previously measured at fair value through profit and
loss. The date of the change of status shall be the Deemed Acquisition Date. The fair value of the subsidiary
at the deemed acquisition date (being the carrying amount of the investment as at 30 June 2016) shall
represent the transferred deemed consideration when measuring any goodwill or gain from bargain
purchase that arises from the Deemed Acquisition. All subsidiaries are consolidated in accordance with IFRS
10 from the date of change of status.
Effective 1 July 2016, Tiso Blackstar no longer accounted for its net investments in subsidiaries and associates
as investments held at fair value through profit and loss, but rather consolidated its subsidiaries and equity
accounted its investments in associates. Subsidiaries which are no longer carried at fair value but rather
consolidated comprise BHG, CSI, Robor and the property subsidiaries. Details of the impact of the
consolidation of these subsidiaries are provided in note 9. Investments in associates Radio Africa group,
Multimedia group and Coopers have been equity accounted from 1 July 2016.
In accordance with IFRS 10, the comparative period ended 30 June 2016 has not been restated (with the
exception of the discontinued operation, refer note 5) and are disclosed on a fair value basis.
3. Reclassifications
As a result of the Group's change in status, certain line items within the consolidated statements of income
and other comprehensive income and consolidated statement of financial position, have been reclassified
for consistency with the current year classifications. This change does not affect the quantitative value of
amounts previously presented.
3.1 Effect of change on consolidated statements of income and other comprehensive income
Per 30 June Per 30 June
2016 Annual 2016 Annual
Report Reclassified Reclassified Report
30 June Reclassi- 30 June 30 June Reclassi- 30 June
2016 fications 2016 2016 fications 2016
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
- 12,002 12,002 Revenue 559 559 -
422,952 (422,952) - Investment-related income - (19,696) 19,696
(1,036,271) 1,036,271 - Net fair value and foreign exchange losses - 48,258 (48,258)
(63,877) 1,655 (62,222) Operating expenses (2,899) 77 (2,976)
Depreciation, amortisation and straight
- (1,652) (1,652) lining of leases (77) (77) -
- 410,950 410,950 Other income 19,137 19,137 -
(677,196) 1,036,274 359,078 Operating profit (loss) 16,720 48,258 (31,538)
- (1,036,274) (1,036,274) Other gains (losses) (48,258) (48,258) -
(677,196) - (677,196) Net loss (31,538) - (31,538)
(48,865) - (48,865) Net finance costs (2,276) - (2,276)
1,251 - 1,251 Finance income 58 - 58
(50,116) - (50,116) Finance costs (2,334) - (2,334)
Share of profit of associates equity
- - - accounted - -
(726,061) - (726,061) Loss before taxation (33,814) - (33,814)
(955) - (955) Taxation (45) - (45)
(727,016) - (727,016) Loss from continuing operations (33,859) - (33,859)
Loss from discontinued operation,
(179,853) - (179,853) net of taxation (8,375) - (8,375)
(906,869) - (906,869) Loss for the year (42,234) - (42,234)
3.2 Effect of change on consolidated statement of financial position
At 30 June 2016, the Group presented the consolidated statement of financial position in order of liquidity,
while at 30 June 2017 it has been presented showing the split between current, assets which it expects to
recover within twelve months and liabilities which it expects to settle within twelve months, and non-current
portions.
Per 30 June Per 30 June
2016 Annual 2016 Annual
Report Reclassified Reclassified Report
30 June Reclassi- 30 June 30 June Reclassi- 30 June
2016 fications 2016 2016 fications 2016
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
Non-current assets
- 12 12 Straight lining lease asset 1 1 -
Current assets
- 21 21 Straight lining of lease asset 1 1 -
Non-current liabilities
413,766 18,766 395,000 Borrowings 20,353 874 21,227
1,195 1,195 - Straight lining of lease liability - 61 61
Current liabilities
- (18,766) 18,766 Borrowings 874 (874) -
- (1,228) 1,228 Straight lining lease liability 63 (63) -
4. Finance costs
Finance costs for the current reporting period can be analysed as follows:
On a consolidated basis (Trading Entity):
30 June 30 June
2017 2017
R'000 GBP'000
BHG (core subsidiary) (97,514) (5,648)
CSI (non-core subsidiary) (47,025) (2,724)
Robor (non-core subsidiary) (46,444) (2,691)
Other: (57,892) (3,353)
Finance costs on acquisition debt to be settled on completion of KTH sale (51,478) (2,982)
Finance costs within the property subsidiaries relating to investment properties,
the majority of which were sold during the year (5,757) (333)
Finance costs on loans from non-controlling interest (657) (38)
(248,875) (14,416)
5. Discontinued operation
In the prior year, Tiso Blackstar announced its change in strategy to focus on investments in media and
related industries, and to therefore dispose of its non-core assets. In line with this, Tiso Blackstar commenced
negotiations to dispose of its interest in KTH during the 2016 financial year and post 30 June 2017 concluded
an agreement of sale, the terms of which were finalised in July 2017.
KTH was disclosed as a discontinued operation, and classified and disclosed as a non-current asset held for sale
in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations as at 30 June 2016.
At 30 June 2017 the investment in KTH remains disclosed as a non-current asset held for sale in the consolidated
statement of financial position, and is carried at its fair value less costs to sell determined by the anticipated
value expected to be realised in the next twelve to eighteen months.
6. Other comprehensive (loss) income, net of taxation
Other comprehensive (loss) income comprises of the foreign currency translation adjustments recognised
in the foreign currency traslation reserve. These currency adjustments arise on restatement of the Group's
investments in its African based associates Radio Africa group, Multimedia group and Coopers as well as the African based foreign
operations held by CSI and BHG to the Group's functional currency Rands at the closing rate at 30 June
2017. A credit to other comprehensive income arises in the Pounds Sterling statement of other comprehensive
income as a result of the translation of the Group's results from its functional currency Rands to its
presentational currency Pounds Sterling.
Items recognised in other comprehensive (loss) income comprise of the following:
On a fair value basis On a consolidated
(Investment Entity): basis (Trading Entity):
30 June 30 June 30 June 30 June
2016 2016 2017 2017
GBP'000 R'000 R'000 GBP'000
- - On translation of the following foreign operations and associates: (70,471) (4,118)
- - Foreign operations held by CSI and BHG (3,648) (198)
- - Investments in associate Radio African group (27,388) (1,611)
- - Investment in associate Multimeadi group (37,297) (2,182)
- - Investment in associate Coopers (2,138) (127)
(8,887) - On translation of the Group's results from Rands to Pounds Sterling - 28,073
- - Actuarial gain on PRMA 2,667 154
- - Other comprehensive (loss) income, net of taxation per the
(8,887) - statement of comprehensive income (67,804) 24,109
7. Earnings (Losses) per ordinary share ("EPS")
7.1 Basic and diluted earnings (losses) per ordinary share
On a fair value basis On a consolidated
(Investment Entity): basis (Trading Entity):
30 June 30 June 30 June 30 June
2016 2016 2017 2017
GBP'000 R'000 R'000 GBP'000
Profit (Loss) for the year attributable to equity holders of the
(33,859) (727,016) parent from continuing operations 15,430 927
Loss for the year attributable to equity holders of the parent
(8,375) (179,853) from discontinued operation (7,607) (441)
(42,234) (906,869) Profit (Loss) for the year attributable to equity holders of the parent 7,823 486
Weighted average number of shares in issue (net of
267,199 267,199 treasury shares, in thousands)^^ 265,279 265,279
267,199 267,199 Weighted average number of shares in issue (in thousands) 266,879 266,879
Basic earnings (losses) per ordinary share (in cents/pence)
(15.81) (339.40) attributable to equity holders 2.95 0.18
Diluted earnings (losses) per ordinary share (in cents/pence)
(15.81) (339.40) attributable to equity holders 2.93 0.18
Basic earnings (losses) per ordinary share (in cents/pence)
(12.67) (272.09) attributable to equity holders from continuing operations 5.82 0.35
Diluted earnings (losses) per ordinary share (in cents/pence)
(12.67) (272.09) attributable to equity holders from continuing operations 5.78 0.35
^^ The treasury shares issued under the long term Management Incentive Scheme are contingently returnable shares and are excluded from the
EPS calculation until such date as they are not subject to recall
Reconciliation of Weighted average number of shares in issue (in thousands)
Treasury shares issued 3,012,349
Estimated vesting percentage 53.1%
Number of shares expected to vest 1,599,557
Number of shares expected to vest (in thousands) 1,600
Weighted average number of shares in issue (in thousands) 266,879
Less number of shares expected to vest (in thousands) (1,600)
Weighted average number of shares in issue (net of treasury shares, in thousands) 265,279
7.2 Basic and diluted headline losses per ordinary share
On a fair value basis On a consolidated
(Investment Entity): basis (Trading Entity):
30 June 30 June 30 June 30 June
2016 2016 2017 2017
GBP'000 R'000 R'000 GBP'000
Profit (Loss) for the year attributable to equity holders of the
(42,234) (906,869) parent, adjusted for: 7,823 486
- - Gains arising on investment properties (2,858) (166)
- - Gains recognised on acquisition of subsidiaries, step up acquisitions (41,697) (2,414)
- - Gain on bargain purchase (1,745) (90)
- - Loss on disposal of investments 2,413 140
- - Impairment of investments 25,270 1,464
- - Gains on investments held for trading (256) (15)
- 3 (Profit) Loss on disposal of property, plant and equipment (22,133) (1,282)
- - Reversal of impairment of property, plant and equipment (11,379) (659)
- - Profit on disposal of intangible assets (49) (3)
34 737 Impairment of loans designated at fair value through profit and loss - -
- (1) Total tax effects of adjustments 11,099 642
(42,200) (906,130) Headline losses (33,512) (1,897)
Basic headline losses per ordinary share attributable to equity holders
(15.79) (339.12) (in cents/pence) (12.63) (0.72)
Diluted headline losses per ordinary share attributable to equity holders
(15.79) (339.12) (in cents/pence) (12.56) (0.71)
8. Net cash and cash equivalents
Net cash and cash equivalents for the current reporting period can be analysed as follows:
On a consolidated
basis (Trading Entity):
30 June 30 June
2017 2017
R'000 GBP'000
BHG (core subsidiary) 15,478 911
CSI (non-core subsidiary) (347,422) (20,457)
Robor (non-core subsidiary) (393,965) (23,197)
Other 13,968 822
(711,941) (41,921)
Cash and cash equivalents 174,901 10,298
Bank overdrafts and other short term borrowing facilities (886,842) (52,219)
Net cash and cash equivalents per the statement of cash flow (711,941) (41,921)
9. Business combinations
Effective 1 July 2016, there was a change in the Group's status as an Investment Entity as defined in IFRS 10
and from this date, the Group applied IFRS 3 to any subsidiary that was previously
measured at fair value through profit or loss. The fair value of the subsidiary as at 1 July 2016 ("Deemed
Acquisition Date") represents the transferred "Deemed Consideration" when measuring any goodwill or
gain from bargain purchase that arises from the deemed acquisition. All subsidiaries were consolidated
in accordance with IFRS 10 from the date of change of status.
9.1 Deemed Acquisitions
Subsidiaries which are no longer carried at fair value but rather consolidated ("the Deemed Acquisitions")
comprise of:
Proportion of
ownership rights
Principal place held on Deemed
of business Principal activity Name of consolidated subsidiaries Acquisition Date
South Africa Media Blackstar Holdings Group Proprietary Limited (previously
Times Media Group Proprietary Limited) ("BHG") 100.0%
South Africa Industrial steel company Consolidated Steel Industries Proprietary Limited ("CSI") 100.0%
South Africa Industrial steel company Robor Proprietary Limited ("Robor") 51.0%
South Africa Investment property Tiso Blackstar Real Estate Proprietary Limited ("TBRE") 100.0%
company
South Africa Investment property Fantastic Investments 379 Proprietary Limited ("Fantastic") 100.0%
company
South Africa Investment property Firefly Investments 223 Proprietary Limited ("Firefly") 70.0%
company
9.2 Other businesses acquired
During the year other less significant acquisitions of subsidiaries and businesses took place ("Other Business
Acquisitions") and comprise of:
Proportion of
ownership rights
Principal place held on
of business Principal activity Name of business acquired Acquisition Date
South Africa Web Applications Smartcall Technology Solutions Proprietary Limited ("STS") 50.0%
South Africa Printing and Packaging Triumph Printing and Packaging Proprietary Limited ("Triumph") 100.0%
South Africa Manufacturing Mine Support Products Proprietary Limited ("MSP") 50.0%
9.3 Assets acquired and liabilities recognised at the date of acquisition
The book value of the assets and liabilities acquired approximate the fair value on Aquisition/Deemed Acquisition Date.
TBRE and the Other
property Business
BHG CSI Robor subsidiaries Acquisitions Total
30 June 2017 R'000 R'000 R'000 R'000 R'000 R'000
Tangible assets 270,607 116,827 386,571 98,181 46,859 919,045
Intangible assets 1,226,823 88,760 660 - - 1,316,243
Investments in associates, joint ventures
other investments and loans and receivables 35,054 6,164 23,115 - - 64,333
Inventories 215,100 410,258 521,920 - 37,460 1,184,738
Trade and other receivables 678,003 364,733 408,603 665 136,373 1,588,377
Cash and cash equivalents 86,154 16,783 23,176 3,746 47,636 177,495
Non-controlling interest 10,674 (5,803) (4,486) - - 385
Net deferred taxation (223,015) (4,928) (30,352) (4,659) 4,580 (258,374)
Borrowings and other liabilities (977,210) (49,108) (133,728) (57,242) (27,655) (1,244,943)
Contingent liabilities (11,873) (28,478) (2,250) - - (42,601)
Trade and other payables (760,895) (505,539) (417,400) (555) (134,830) (1,819,219)
Bank overdrafts and other short term
borrowing facilities (95,570) (261,108) (362,408) - (12,478) (731,564)
Identifiable assets and liabilities at fair value at
acquisition/Deemed Acquisition Date 453,852 148,561 413,421 40,136 97,945 1,153,915
Non-controlling interest - - (202,576) (2,103) 4,199 (200,480)
Goodwill 996,148 109,439 - - 114,780 1,220,367
Gain on bargain purchase - - (1,745) - - (1,745)
1,450,000 258,000 209,100 38,033 216,924 2,172,057
Less Deemed Consideration on change in
status as an Investment Entity and fair value
of existing shareholding on step up acquisitions (1,450,000) (258,000) (209,100) (38,033) (57,021) (2,012,154)
Purchase consideration paid in cash - - - - 159,903 159,903
Cash flow
Cash consideration paid for Other Business
Acquisitions - - - - (159,903) (159,903)
Consolidated cash from acquisitions (9,416) (244,325) (339,232) 3,746 35,158 (554,069)
Cash flow on acquisition (9,416) (244,325) (339,232) 3,746 (124,745) (713,972)
TBRE and the Other
property Business
BHG CSI Robor subsidiaries Acquisitions Total
30 June 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Tangible assets 13,882 5,995 19,830 5,036 2,714 47,457
Intangible assets 62,938 4,553 34 - - 67,525
Investments in associates, joint ventures
other investments and loans and receivables 1,798 316 1,186 - - 3,300
Inventories 11,035 21,047 26,775 - 2,170 61,027
Trade and other receivables 34,782 18,711 20,962 34 7,899 82,388
Cash and cash equivalents 4,420 861 1,189 192 2,759 9,421
Non-controlling interest 548 (298) (230) - - 20
Net deferred taxation (11,441) (253) (1,557) (239) 265 (13,225)
Borrowings and other liabilities (50,132) (2,519) (6,860) (2,937) (1,602) (64,050)
Contingent liabilities (609) (1,461) (115) - - (2,185)
Trade and other payables (39,035) (25,935) (21,413) (29) (7,810) (94,222)
Bank overdrafts and other short term
borrowing facilities (4,903) (13,395) (18,592) - (723) (37,613)
Identifiable assets and liabilities at fair value at
Acquisition/Deemed Acquisition Date 23,283 7,622 21,209 2,057 5,672 59,843
Non-controlling interest - - (10,392) (107) 243 (10,256)
Goodwill 51,103 5,614 - - 6,648 63,365
Gain on bargain purchase - - (90) - - (90)
74,386 13,236 10,727 1,950 12,563 112,862
Less Deemed Consideration on change in
status as an Investment Entity and fair value of
existing shareholding on step up acquisitions (74,386) (13,236) (10,727) (1,950) (3,303) (103,602)
purchase consideration paid in cash - - - - 9,260 9,260
Cash flow
Cash consideration paid for Other Business Acquisitions - - - - (9,260) (9,260)
Consolidated cash from acquisitions (483) (12,534) (17,403) 192 2,035 (28,193)
Cash flow on acquisition (483) (12,534) (17,403) 192 (7,225) (37,453)
9.4 Non-controlling interest
The non-controlling interest relates to a 49.0% ownership interest in Robor, a 30.0% ownership interest in Firefly
and a 50.0% ownership interest in STS, and was recognised at the fair value of the identifiable assets and
liabilities at Acquisition/Deemed Acquisition Date.
9.5 Goodwill arising on acquisitions
TBRE and Other
the property Business
BHG CSI Robor subsidiaries Acquisitions Total
30 June 2017 R'000 R'000 R'000 R'000 R'000 R'000
Consideration transferred 1,450,000 258,000 209,100 38,033 159,903 2,115,036
Plus: Non-controlling interest - - 202,576 2,103 (4,199) 200,480
Less: Fair value of net identifiable
assets acquired (453,852) (148,561) (413,421) (40,136) (40,924) (1,096,894)
Goodwill arising on acquisition (Gain on
bargain purchase) 996,148 109,439 (1,745) - 114,780 1,218,622
TBRE and Other
the property Business
BHG CSI Robor subsidiaries Acquisitions Total
30 June 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Consideration transferred 74,386 13,236 10,727 1,950 9,260 109,559
Plus: Non-controlling interest - - 10,392 107 (243) 10,256
Less: Fair value of net identifiable
assets acquired (23,283) (7,622) (21,209) (2,057) (2,369) (56,540)
Goodwill arising on acquisition (Gain on
bargain purchase) 51,103 5,614 (90) - 6,648 63,275
10. Segmental information
For the purpose of reporting to the Tiso Blackstar Board (who are considered to be the Chief Operating
Decision Maker "CODM" of the Company), the Group is organised into segments. It is the CODM's strategy
for the Group to focus on owning and growing diversified revenues streams from media businesses with
leading market position, strong cash flows, historic earnings growth and ability to continue as a going
concern.
As a result of its change in status from an Investment Entity, the Group has reviewed its segments and
identified its operating segments based on the nature of the operating segment. The reportable segments
are as follows:
- Media: this division houses the Group's interest in the distribution of knowledge and content via print,
online assets and other platforms;
- Hirt & Carter Group: the division includes the activities on retail advertising production systems and
related database management and development, and retail print via H&C and Uniprint;
- Broadcast and Content: the division includes the television and radio platforms, radio assets, films which
is the leading all-rights distributor of local and international films business, and Gallo the music business;
- Africa (excluding South Africa): includes the Group's interests in the associates Radio Africa group in
Kenya, Multimedia group in Ghana and Coopers in Nigeria (all the African interests are equity
accounted and the share of profits from these interests are therefore not shown in the tables 10.1 or
10.2);
- CSI: a wholly-owned subsidiary comprising of Stalcor which is a processor, distributor and stockist of
carbon steel, stainless steel and aluminium in the form of high quality sheet, plate and coil as well as
structural and other long product profiles, and GRS which is a steel roofing and cladding company;
- Robor: in which the Group holds a 51.0% interest is a manufacturer and supplier of welded steel tube
and pipe and cold formed steel profiles; and
- Other: comprising of investments that are not deemed to be material to the Group including the
property subsidiaries and other consolidated Group companies, including head office, holding
companies and the investment advisor Tiso Blackstar SA Proprietary Limited ("Tiso Blackstar SA").
KTH was disclosed as a discontinued operation, and classified and disclosed as a non-current asset held for
sale in accordance with IFRS 5 at 30 June 2017 and 30 June 2016. The segment information reported does not
include any amounts for KTH, which is described in more detail in note 5.
10.1 Reconciliation of Net profit (loss) to EBITDA
Hirt & Carter Broadcast and
Media Group Content CSI Robor Other Total
30 June 2017 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Revenue 2,045,556 1,733,554 441,186 2,428,645 2,478,212 13,857 9,141,010
Cost of sales (1,670,344) (1,075,644) (313,912) (2,080,785) (2,280,755) - (7,421,440)
Gross profit 375,212 657,910 127,274 347,860 197,457 13,857 1,719,570
Operating expenses (291,194) (434,634) (92,652) (269,094) (235,483) (97,769) (1,420,826)
Inter-group income (costs) 5,204 1,132 (5,403) (1,960) (2,000) 3,027 -
Depreciation (17,920) (54,560) (4,606) (14,281) (26,776) (2.986) (121,129)
Amortisation (33,090) (23,946) (1,676) (4,165) (463) - (63,340)
Straight lining of leases charge## (2,156) 6,917 94 (8,542) (14,233) 23,575 5,655
Other income 42,015 20,560 6,450 14,086 9,989 749 93,849
Operating profit 78,071 173,379 29,481 63,904 (71,509) (59,547) 213,779
Other gains (losses) 17,076 8,843 (62,558) (3,006) 26,050 83,789 70,194
Net profit (loss) 95,147 182,222 (33,077) 60,898 (45,459) 24,242 283,973
Reconciliation to EBITDA:
Depreciation 17,920 54,560 4,606 14,281 26,776 2.986 121,129
Amortisation 33,090 23,946 1,676 4,165 463 - 63,340
Straight lining of leases charge## 2,156 (6,917) (94) 8,542 14,233 (23,575) (5,655)
Share based payment expense - - - - - 4,836 4,836
Other (gains) losses (17,076) (8,843) 62,558 3,006 (26,050) (83,789) (70,194)
Total Segmental EBITDA 131,237 244,968 35,669 90,892 (30,037) (75,300) 397,429
Other gains (losses) 17,076 8,843 (62,558) (3,006 ) 26,050 83,789 70,194
Total Consolidated EBITDA 148,313 253,811 (26,889) 87,886 (3,987) 8,489 467,623
Hirt & Carter Broadcast and
Media Group Content CSI Robor Other Total
30 June 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 118,482 100,411 25,554 140,671 143,542 802 529,462
Cost of sales (96,749) (62,303) (18,182) (120,523) (132,105) - (429,862)
Gross profit 21,733 38,108 7,372 20,148 11,437 802 99,600
Operating expenses (16,866) (25,175) (5,367) (15,586) (13,640) (5,659) (82,293)
Inter-group income (costs) 301 66 (313) (114) (116) 176 -
Depreciation (1,038) (3,160) (267) (827) (1,551) (173) (7,016)
Amortisation (1,876) (1,387) (97) (241) (27) - (3,628)
Straight lining of leases charge## (125) 401 5 (495) (824) 1,365 327
Other income 2,434 1,191 374 816 579 42 5,436
Operating profit 4,563 10,044 1,707 3,701 (4,142) (3,447) 12,426
Other gains (losses) 989 512 (3,623) (174) 1,509 4,868 4,081
Net profit (loss) 5,552 10,556 (1,916) 3,527 (2,633) 1,421 16,507
Reconciliation to EBITDA:
Depreciation 1,038 3,160 267 827 1,551 173 7,016
Amortisation 1,876 1,387 97 241 27 - 3,628
Straight lining of leases charge## 125 (401) (5) 495 824 (1,365) (327)
Share based payment expense - - - - - 280 280
Other (gains) losses (989) (512) 3,623 174 (1,509) (4,868) (4,081)
Total Segmental EBITDA 7,602 14,190 2,066 5,264 (1,740) (4,359) 23,023
Other gains (losses) 989 512 (3,623) (174) 1,509 4,868 4,081
Total Consolidated EBITDA 8,591 14,702 (1,557) 5,090 (231) 509 27,104
Each segment within the Group is assessed by the CODM based on EBITDA excluding gains or losses outside
of the ordinary scope of business. However, when the CODM assesses the Group as a whole, gains or losses
outside of the ordinary scope of business are included in the CODM's assessment. As a result, when EBITDA
is discussed in the summarised consolidated financial statements regarding a segment, the amount does
not include other gains or losses, while the total consolidated Group EBITDA does include other gains and
losses outside the ordinary scope of business.
## Straight lining of leases are required under IAS 17 leases and are excluded to determine actual operating costs
10.2 Reconciliation from 30 June 2016 reported financial information to 30 June 2016 pro forma financial
information
Hirt & Broadcast
Media Carter Group and Content CSI Robor Other Total
30 June 2016 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Operating loss as
presented for the period
ending 30 June 2016 - - - - - - (677,196)
Adjusted for Investment Entity
accounting entries:
Operating expenses - - - - - - 63,877
Net fair value and
foreign exchange losses - - - - - - 1,036,271
Investment-related income - - - - - - (422,952)
Adjusted for pro forma
financial information:
Revenue 1,722,654 1,581,958 508,995 1,928,257 2,271,893 69,900 8,083,657
Cost of sales (1,467,548) (982,665) (356,242) (1,671,233) (1,967,417) (59,065) (6,504,170)
Other income - - - 18,968 6,220 5,088 30,276
Investment-related
income - - - - - 16,987 16,987
Inter-group income (costs) - - - (3,217) - 3,217 -
Operating expenses (150,710) (364,451) (108,808) (217,033) (242,621) (85,297) (1,168,920)
Forex profit (loss) (69) - - - 15,568 (2,610) 12,889
Total pro forma Segmental
EBITDA 104,327 234,842 43,945 55,742 83,643 (51,780) 470,719
Other gains (losses) - (457) (18,376) (44,260) 25,507 (73,514) (111,100)
Total pro forma Consolidated
EBITDA 104,327 234,385 25,569 11,482 109,150 (125,294) 359,619
Hirt & Broadcast
Media Carter Group and Content CSI Robor Other Total
30 June 2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating loss as
presented for the period
ending 30 June 2016 - - - - - - (31,538)
Adjusted for Investment Entity
accounting entries:
Operating expenses - - - - - - 2,976
Net fair value and
foreign exchange losses - - - - - - 48,258
Investment-related income - - - - - - (19,696)
Adjusted for pro forma
financial information:
Revenue 80,223 73,671 23,704 89,798 105,801 3,254 376,451
Cost of sales (68,343) (45,762) (16,590) (77,828) (91,621) (2,751) (302,895)
Other income - - - 883 290 237 1,410
Investment-
related income - - - - - 791 791
Inter-group income (costs) - - - (150) - 150 -
Operating expenses (7,018) (16,972) (5,067) (10,107) (11,299) (3,973) (54,436)
Forex profit (loss) (3) - - - 725 (122) 600
Total pro forma Segmental
EBITDA 4,859 10,937 2,047 2,596 3,896 (2,414) 21,921
Other gains (losses) - (21) (856) (2,061) 1,118 (3,354) (5,174)
Total proforma Consolidated EBITDA 4,859 10,916 1,191 535 5,014 (5,768) 16,747
11. Changes in Directors
The capacity of Andrew Bonamour changed from a non-executive director to Chief Executive Officer
("CEO") with effect from 17 July 2017. This appointment culminated as a result of the Company's change
in status from an Investment Entity to a consolidated group, its migration to the UK and in light of the fact
that Andrew Bonamour is the CEO of the Company's investment advisor Tiso Blackstar SA as well as CEO of
the Group's core business BHG.
Richard Wight resigned from his position as a non-executive director effective 20 July 2017.
12. Subsequent Events
Effective 1 July 2017, Hirt & Carter Group acquired a 51.0% interest in Botha Branding Solutions Proprietary Limited ("BBS") for
R17.0 million (GBP1.0 million). BBS design, produce and execute branding solutions in the formal and informal retail markets.
Robor acquired Aegion South Africa Proprietary Limited ("Aegion SA") on the 22 August 2017. A joint venture was formed with Robor owning
40.0% and Aegion International Holdings Limited owning the remaining 60.0%. Robor's purchase consideration was R8.7 million (GBP0.5 million).
Aegion SA supply and strengthen sewer, water, energy and mining piping systems, buildings, bridges and tunnels and waterfront structures.
13. Related Parties
In terms of the agreement between SAI Holdings Limited ("SAI") and the Company, consulting services are provided to the Company for assistance
in origination of transactions within the African continent for a fee of USD$ 600,000 per annum, payable in quarterly instalments.
In terms of the agreement between Tiso Investment Holdings Proprietary Limited ("TIH") and Tiso Blackstar SA, consulting services are provided
to Tiso Blackstar SA for assistance in origination of transactions and the ongoing management of KTH, for a fee of R223,500, GBP12,945
(excluding Value Added Taxation) per month. In terms of the TIH agreement, the TIH payment will cease following the realisation of KTH.
TIH and SAI are related parties under the AIM Rules as David Adomakoh and Nkululeko Sowazi in addition to being Directors, both have interests
in SAI and TIH. Accordingly the directors, other than David Adomakoh and Nkululeko Sowazi, having consulted with Northland Capital Partners,
the Company's nominated adviser, consider that the terms of the consultancy arrangements with both TIH and SAI are fair and reasonable
insofar as shareholders are concerned.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
27 September 2017
For further enquiries, please contact:
Tiso Blackstar Group SE Leanna Isaac +44 (0) 20 7887 6017
Northland Capital Partners Tom Price +44 (0) 203 861 6625
JSE Sponsor: PSG Capital David Tosi +27 (0) 21 887 9602
Date: 27/09/2017 09:00:00 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,
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