Wrap Text
Unaudited Condensed Consolidated Interim Results For The Six Months Ended 30 September 2017
Niveus Investments Limited
(Incorporated in the Republic of South Africa)
Registration number: 1996/005744/06
JSE share code: NIV
ISIN code: ZAE000169553
("the Company" or "the Group" or "Niveus")
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS for the six months ended 30 September 2017
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
30 Sept 2017 30 Sept 2016 31 Mar 2017
R'000 R'000 R'000
ASSETS
Non-current assets 926 543 884 750 1 315 728
Property, plant and equipment 397 535 707 675 659 202
Investment properties 21 164 7 056 28 638
Goodwill 11 714 56 444 59 944
Intangible assets 13 187 19 157 18 480
Interest in associates and joint ventures 27 596 33 290 73 707
Deferred taxation 8 805 29 039 28 251
Loans receivable 446 542 32 089 447 506
Current assets 882 946 296 019 1 057 007
Other 232 074 151 970 348 273
Cash and cash equivalents 650 872 144 049 708 734
Assets of disposal group classified as held for sale 641 308 1 704 332 5 419
Total assets 2 450 797 2 885 101 2 378 154
EQUITY AND LIABILITIES
Equity 1 974 038 2 049 248 1 881 755
Equity attributable to equity holders of the parent 1 417 532 1 390 022 1 314 265
Non-controlling interest 556 506 659 226 567 490
Non-current liabilities 21 435 186 641 231 344
Borrowings - 74 347 205 623
Deferred taxation 21 435 84 321 21 348
Operating lease equalisation liability - 5 694 4 373
Other payables - 22 279 -
Current liabilities 100 651 437 532 262 596
Liabilities of disposal group classified as held for sale 354 673 211 680 2 459
Total equity and liabilities 2 450 797 2 885 101 2 378 154
Net asset value per share (cents) 1 190 1 166 1 103
Net tangible asset value per share (cents) 1 169 1 116 1 038
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Unaudited
Unaudited Six months Audited
Six months ended Year ended
ended 30 Sept 2016 31 Mar 2017
30 Sept 2017 Restated Restated
R'000 R'000 R'000
Revenue 10 769 3 767 12 786
Net gaming win 20 272 13 190 27 354
Group revenue 31 041 16 957 40 140
Other income 463 2 781 2 851
Operating expenses (58 490) (55 864) (107 002)
(26 986) (36 126) (64 011)
Depreciation and amortisation (20 685) (15 865) (32 545)
Share of income of associates and joint ventures 1 860 731 736
Investment income 48 880 1 204 49 711
Impairment of assets (152) (27) (1 982)
Impairment of goodwill - - (3 958)
Impairment of investment in associate (412) - (6 971)
Gain on disposal of subsidiaries 1 772 - 6 074
Finance costs (62) (37) (112)
Profit/(loss) before taxation 4 215 (50 120) (53 058)
Taxation (24 737) 803 (6 551)
Loss for the year from continuing operations (20 522) (49 317) (59 609)
Net result from discontinued operations 174 375 42 903 (66 839)
Profit/(loss) for the period 153 853 (6 414) (126 448)
Attributable to:
Equity holders of the parent 134 524 25 350 (9 154)
Non-controlling interest 19 329 (31 764) (117 294)
153 853 (6 414) (126 448)
Unaudited
Unaudited Six months Audited
Six months ended Year ended
ended 30 Sept 2016 31 Mar 2017
30 Sept 2017 Restated Restated
R'000 R'000 R'000
Reconciliation of headline earnings Gross Net Gross Net Gross Net
Continuing operations
Loss attributable to equity holders of the parent (29 745) (43 129) (70 220)
IAS 16 Gains on disposal of plant and equipment (110) (109) - - (24) (10)
IAS 16 Impairment of assets 152 139 27 7 1 982 889
IAS 27 Gains from disposal of subsidiaries (1 772) (1 240) - - (6 074) (4 252)
IAS 28 Impairment of investments in associates 412 288 - - 6 971 4 880
IAS 36 Impairment of goodwill - - - - 3 958 3 958
(30 667) (43 122) (64 755)
Discontinued operations
Profit attributable to equity holders of the parent 164 269 68 479 61 066
IAS 16 Gains on disposal of plant and equipment (493) (355) (152) (317) (495) (299)
IAS 16 Impairment of assets 3 123 2 249 358 258 1 767 1 272
IAS 27 Loss from disposal of subsidiaries 2 723 2 555 - - - -
IAS 28 Impairment of investment in joint venture - - 85 35 85 49
IFRS 5 Remeasurement to fair value less cost to sell - - 191 134 72 054 - -
IAS 40 Fair adjustment to investment property - - - - (403) (313)
Loss on disposal of operating assets of KWV - - - - 503 629 216 485
168 718 140 509 278 260
Unaudited
Unaudited Six months Audited
Six months ended Year ended
ended 30 Sept 2016 31 Mar 2017
30 Sept 2017 Restated Restated
Earnings per share (cents) 112,9 21,3 (7,7)
- Continuing operations (25,0) (36,2) (58,9)
- Discontinued operations 137,9 57,5 51,2
Headline earnings per share (cents) 115,9 81,7 179,2
- Continuing operations (25,7) (36,2) (54,3)
- Discontinued operations 141,6 117,9 233,5
Diluted earnings per share (cents) 112,1 21,1 (7,6)
- Continuing operations (24,8) (35,9) (58,6)
- Discontinued operations 136,9 57,0 51,0
Diluted headline earnings per share (cents) 115,1 81,0 178,1
- Continuing operations (25,5) (35,9) (54,0)
- Discontinued operations 140,6 116,9 232,1
Weighted average number of shares in issue ('000) 119 163 119 163 119 163
Actual number of shares in issue at end of year ('000) 119 163 119 163 119 163
Weighted average number of shares in issue (diluted) ('000) 119 960 120 258 119 909
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Unaudited
Unaudited Six months Audited
Six months ended Year ended
ended 30 Sept 2016 31 Mar 2017
30 Sept 2017 Restated Restated
R'000 R'000 R'000
Profit/(loss) for the period 153 853 (6 414) (126 448)
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Foreign currency translation differences 9 572 (11 268) (20 725)
Total comprehensive income/(loss) 163 425 (17 682) (147 173)
Attributable to:
Equity holders of the parent 144 091 14 264 (29 879)
Non-controlling interest 19 334 (31 946) (117 294)
163 425 (17 682) (147 173)
Total comprehensive income attributable to equity holders of the parent arises from:
- Continuing operations (19 953) (58 846) (90 908)
- Discontinued operations 164 044 73 110 61 029
144 091 14 264 (29 879)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
30 Sept 2017 30 Sept 2016 31 Mar 2017
R'000 R'000 R'000
Cash flows from operating activities 169 873 195 442 357 744
Cash generated from operations 212 121 248 490 430 038
Net interest 11 420 (12 174) (7 519)
Taxation paid (53 668) (40 874) (64 775)
Cash flows from investing activities (104 996) (120 969) 293 536
Property, plant and equipment: additions (60 540) (102 386) (165 154)
Proceeds from disposal of assets 1 488 2 356 532 791
Investment in associates and joint ventures (33 739) (5 712) (48 516)
Other (12 205) (15 227) (25 585)
Cash flows from financing activities (70 792) (36 978) (102 512)
Dividends paid (55 188) (17 516) (38 965)
Long-term funding repaid (15 604) (19 462) (63 547)
(Decrease)/increase in cash and cash equivalents (5 915) 37 495 548 768
Classified as held for sale (53 052) (54 517) (1 105)
Cash and cash equivalents
At beginning of period 709 839 161 071 161 071
At end of period 650 872 198 566 709 839
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
30 Sept 2017 30 Sept 2016 31 Mar 2017
R'000 R'000 R'000
Balance at beginning of period 1 881 755 2 080 498 2 080 498
Total comprehensive income/(loss) 163 425 (17 682) (147 173)
Equity-settled share-based payments (2 675) 5 341 7 304
Effects of changes in holding (15 599) (1 043) (4 425)
Business combinations (1 092) - (1 596)
Disposal of subsidiaries 5 377 - -
Capital reductions and dividends (57 153) (17 866) (52 853)
Balance at end of period 1 974 038 2 049 248 1 881 755
SEGMENTAL ANALYSIS
Unaudited
Unaudited Six months Audited
Six months ended Year ended
ended 30 Sept 2016 31 Mar 2017
30 Sept 2017 Restated Restated
R'000 R'000 R'000
Revenue
Continuing operations 10 769 5 759 12 786
Gaming and entertainment 3 228 3 767 7 441
Property 7 541 1 992 5 345
Discontinued operations 35 141 609 167 640 798
Beverages - 566 898 566 898
Gaming and entertainment 35 141 42 269 73 900
45 910 614 926 653 584
Net gaming win
Continuing operations
Gaming and entertainment 20 272 13 190 27 354
Discontinued operations
Gaming and entertainment 696 513 632 819 1 299 256
716 785 646 009 1 326 610
EBITDA
Continuing operations (26 986) (36 126) (64 011)
Gaming and entertainment (7 478) (4 251) (9 797)
Head office (16 713) (26 502) (47 054)
Property (2 795) (5 373) (7 160)
Discontinued operations 265 186 296 342 531 132
Beverages - 81 725 81 725
Gaming and entertainment 265 186 214 617 449 407
238 200 260 216 467 121
Profit before tax
Continuing operations 4 215 (50 120) (53 058)
Gaming and entertainment (25 374) (18 625) (44 812)
Head office (15 281) (25 424) (44 610)
Property 44 870 (6 071) 36 364
Discontinued operations 221 484 229 061 (105 075)
Beverages - 77 452 (426 177)
Gaming and entertainment 221 484 151 609 321 102
225 699 178 941 (158 133)
Headline earnings
Continuing operations (30 667) (43 122) (64 755)
Gaming and entertainment (29 687) (15 527) (40 848)
Head office (14 811) (25 212) (43 990)
Property 13 831 (2 383) 20 083
Discontinued operations 168 718 140 509 278 260
Beverages - 31 658 31 528
Gaming and entertainment 168 718 108 851 246 732
138 051 97 387 213 505
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of preparation and accounting policies
The results for the six months ended 30 September 2017 have been prepared in accordance with International Financial Reporting Standards ("IFRS"),
IAS 34 - Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council, the requirements of the South African Companies Act, 71 of 2008 (as amended)
and the Listings Requirements of the JSE Limited. The accounting policies of the Group are consistent with those applied for the year ended
31 March 2017. The adoption of new standards that are applicable for this financial year had no impact on the figures presented. Details of the
standards adopted will be provided in the annual financial statements. As required by the Listings Requirements of the JSE Limited, the Group reports
headline earnings in accordance with Circular 2/2015 - Headline Earnings, as issued by the South African Institute of Chartered Accountants.
These financial statements were prepared under the supervision of the financial director, Ms CE Kristal CA(SA), and have neither been audited nor
independently reviewed by the Group's auditors.
Discontinued operations
Unbundling of shares in gaming businesses
During June 2017, Niveus accepted an indicative offer from Tsogo Sun Holdings Limited ("Tsogo") for the sale of all its interests in Vukani Gaming Corporation
Proprietary Limited ("Vukani"), Galaxy Gaming and Entertainment Proprietary Limited ("Galaxy") and all their associated entities, trusts and businesses
to Tsogo subject to certain conditions precedent. Revenue and expenses, and gains and losses relating to these assets have been removed from the results
of continuing operations and are shown as a single line item on the face of the consolidated statement of profit or loss
("Net result from discontinued operations"). The operating results of the discontinued operations were as follows:
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
30 Sept 30 Sept 2016 31 Mar 2017
2017 Restated Restated
R'000 R'000 R'000
Profit relating to discontinued operations
Revenue 35 141 42 222 73 853
Net gaming win 695 751 630 769 1 295 256
Other income and operating costs (465 997) (457 855) (917 903)
Share of losses of associates and joint ventures (3 784) (3 090) (7 081)
Investment income 909 2 314 4 362
Fair value adjustments of investment properties - - 403
Depreciation and amortisation (22 457) (45 106) (92 698)
Impairment of assets (3 123) (358) (1 767)
Finance costs (12 290) (16 016) (30 220)
Profit before taxation 224 150 152 880 324 205
Taxation (47 109) (37 506) (64 789)
Profit from discontinued operations 177 041 115 374 259 416
Cash flows from discontinued operations
Cash flows from operating activities 139 170 125 870 235 133
Cash flows from investing activities (47 602) (48 306) (96 887)
Cash flows from financing activities (21 091) (25 972) (69 324)
70 477 51 592 68 922
Assets of disposal group classified as held for sale
Property, plant and equipment 300 649
Investment properties 7 526
Goodwill 50 433
Intangible assets 8 788
Interest in associates and joint ventures 72 301
Deferred taxation 10 037
Other current assets 138 522
Cash and cash equivalents 53 052
641 308
Liabilities of disposal group classified as held for sale
Borrowings 225 375
Deferred taxation 180
Operating lease equalisation liability 4 792
Other current liabilities 124 326
354 673
Net asset value of disposal group 995 981
Fair value less cost to sell ITO IFRS 5 995 981
Fair value of disposal group assets 641 308
Fair value of disposal group liabilities 354 673
Remeasurement of disposal group -
Shares in African gaming businesses
During March 2017, the Group contracted to dispose of subsidiaries Jacaranda Royal Casino Limited, VSlots Lesotho (Proprietary) Limited and VSlots
Swaziland (Proprietary) Limited. The disposal was concluded in June 2017. Revenue and expenses, and gains and losses relating to these assets have
been removed from the results of continuing operations and are shown as a single line item on the face of the consolidated statement of profit or
loss ("Net result from discontinued operations"). The operating results of the discontinued operations and the loss on sale of assets were as follows:
Unaudited
Unaudited Six months Audited
Six months ended Year ended
ended 30 Sept 2016 31 Mar 2017
30 Sept 2017 Restated Restated
R'000 R'000 R'000
Loss relating to discontinued operations
Revenue - 47 47
Net gaming win 762 2 050 4 000
Other income and operating costs (471) (2 616) (5 846)
Investment income - 37 -
Depreciation and amortisation (232) (788) (1 301)
Finance costs (2) (1) (3)
Profit/(loss) from discontinued operations 57 (1 271) (3 103)
Loss on disposal (2 723) - -
Net result from discontinued operations (2 666) (1 271) (3 103)
Cash flows from discontinued operations
Cash flows from operating activities 447 (2 736) (2 216)
Cash flows from investing activities - 1 533 1 571
447 (1 203) (645)
Proceeds on disposal, net cash flow on disposal and analysis of assets and liabilities disposed
Property, plant and equipment 1 524
Intangible assets 1 194
Trade and other receivables 417
Bank and cash balances 1 371
Trade and other payables (3 129)
1 377
Non-controlling interest 4 596
Loss on disposal of subsidiaries (2 723)
Consideration received in cash 3 250
Less cash at date of disposal (1 371)
Net cash inflow 1 879
COMMENTARY
The unbundling of the Niveus gaming assets, other than its sports betting and lottery interests, ("GameCo") to Niveus shareholders, and the
subsequent offer by Tsogo to acquire these shares, substantially changed the nature of Niveus.
The effective date of the unbundling was 10 November and Tsogo extended an offer to all Niveus shareholders to acquire their shares as detailed
in the circular to shareholders. The unbundling resulted in Niveus shareholders receiving GameCo shares at an effective value of R33,54 per Niveus
share.
Niveus retained 6,25% of the GameCo shares and sold these shares to Tsogo as part of the minority offer. Proceeds from this sale were used to
settle the debt of the Group, and Niveus is now debt free.
The consolidated results of the Group reflect the GameCo assets as discontinued operations.
The board has also approved, subject to certain conditions, various transactions and initiatives to distribute a portion of its interest in
La Concorde Holdings Limited ("La Concorde") to shareholders, following the acquisition of Golden Arrow Bus Services Proprietary Limited ("GABS").
Following the completion of the transactions described above, the Group will hold interests in some smaller assets, as described below in Other
Assets, and some cash.
Discontinued operations
Vukani and Galaxy continued to trade well during the period under review, despite the general slow down in spending in the gaming sector and the
low levels of consumer confidence.
The consolidated EBITDA of the gaming businesses increased to R265 million from R215 million in the comparative period. Headline earnings
increased to R168 million from R109 million in the comparative period.
Continuing operations
La Concorde
The Group owns an effective 58% in La Concorde. During the period Niveus announced the acquisition, by a subsidiary of La Concorde ("NewCo"),
of 100% of the issued shares in Hosken Passenger Logistics and Rail Proprietary Limited (of which GABS is a wholly owned subsidiary), from
Hosken Consolidated Investments Limited ("HCI") for R1,8 billion ("GABS Acquisition"). NewCo will be capitalised with R1,1 billion of cash or
cash equivalents by La Concorde and the purchase consideration for the GABS Aquisition will be settled by the issue of shares in NewCo to HCI.
The GABS Acquisition is, inter alia, subject to the conclusion of transaction agreements, the positive completion of a due diligence and Niveus
shareholder approval.
Shareholders are referred to the transaction announcement on 14 September 2017 for more information on the GABS Acquisition.
A circular detailing the terms of the GABS Acquisition will be distributed to shareholders in due course, once the legal agreements for the GABS
Acquisition have been concluded.It is anticipated that the circular will be distributed during or about the week commencing on 18 December 2017.
It is envisaged that NewCo will, following the implementation of the GABS Acquisition, make a cash distribution to its shareholders, with the
ultimate aim thereafter being to list NewCo on the JSE. It is anticipated that, upon such listing, NewCo shares will be distributed to the
La Concorde shareholders, following which Niveus will unbundle the NewCo shares received to its shareholders.
The remaining assets of La Concorde consist of property and art.
Other Assets
The other assets of the Niveus Group are its interests in BET.co.za, a leading online sports betting company, its remaining African gaming
investments and the residual cash retained in the Group.
The online sports betting market is a growing market in South Africa, albeit small compared to the other gaming sectors. The gross gaming revenue
of BET.co.za increased during the period but the increased marketing spend limited profit growth. It is anticipated that the business will continue
to invest significantly in marketing in the future as it seeks to increase its registered clients. In addition, BET.co.za has opened retail outlets
and holds licences for additional outlets in Limpopo and Gauteng.
The Group disposed of its gaming operations in Zambia, Lesotho and Swaziland. The only gaming operation remaining is the route operator and sports
betting operations in Tanzania. This business is marginally profitable and does not require significant investment to grow in future.
The Group also holds an interest in a start-up investment that provides radar tracking to the golf industry. R28 million has been committed to the
investment with a further R20 million potential investment.
Future of the Group
The directors are considering the future plans and strategy of the Group following unbundling of the Group's major assets and the plans to
distribute most of the value in La Concorde. The remaining assets of the Group are unlisted and substantially smaller in value. The directors
believe that these assets have good growth prospects but may not be adequate to sustain the separate listing of Niveus. Shareholders will be advised
in due course about the board's future plans for the Group.
Change in management
Andre van der Veen resigned as CEO of Niveus and La Concorde, effective 1 November 2017, following his appointment as CEO of eMedia Holdings Limited.
He will however remain on the board of Niveus and La Concorde as executive director. Muriel Loftie-Eaton was appointed as CEO and Carolyn Kristal as
financial director of Niveus and La Concorde, effective 1 November 2017. Following the implementation and completion of the GameCo unbundling, the
three additional independent non-executive directors appointed for the purpose of the unbundling, Francine-Ann du Plessis, Mike Joubert and
Wessel van der Merwe, have resigned from the board, effective 17 November 2017.
Muriel Loftie-Eaton
Chief executive officer
22 November 2017
Paarl
CORPORATE INFORMATION
Directors: JA Copelyn^, CE Kristal*, MM Loftie-Eaton*, ML Molefi#, JG Ngcobo#, Y Shaik^,
A van der Veen* (* executive ^ non-executive # independent non-executive)
Company secretary: HCI Managerial Services Proprietary Limited
Transfer secretaries: Computershare Investor Services Proprietary Limited
Sponsor: PSG Capital Proprietary Limited
www.niveus.co.za
Date: 22/11/2017 11:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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