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Unaudited Interim Results for the six months ended 31 December 2017
SUPER GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number 1943/016107/06
Share code: SPG
ISIN: ZAE000161832
("Super Group" or "the Group" or "the company")
UNAUDITED INTERIM RESULTS
for the six months ended
31 December 2017
Results at a glance
for the six months ended 31 December 2017
REVENUE UP 27% R18.0 billion
OPERATING PROFIT UP 11% R1.1 billion
PROFIT BEFORE TAX UP 7% R1.0 billion
HEPS UP 8% 155 cents
EBITA UP 10% R1.2 billion
OFFSHORE OPERATING PROFIT SHARE 62% R0.7 billion
EPS UP 7% 153 cents
NAV PER SHARE since 30 June 2017 UP 4% 2 493 cents
INTRODUCTION
Super Group reported a satisfactory set of results for the six months ended 31 December 2017. Political uncertainty and
adverse trading conditions remained a challenge in Africa, Europe and the United Kingdom (UK). Australian economic conditions
were stable, with good growth in certain industries. Following a two-year period of concluding strategic acquisitions,
Super Group's results reflect the benefits derived from geographically diversifying its revenue stream.
Super Group's non-South African businesses contributed 46% of revenue and 62% of operating profit. The average Rand exchange rate
for the period strengthened against the Australian Dollar (AUD) and Pound Sterling (GBP), but weakened against the Euro (EUR).
Overall exchange rate variances had an immaterial impact on the earnings of the Group in relation to the prior comparable period.
In October 2017, Super Group raised an amount of R500 million through an Accelerated Bookbuild placement of 12 422 360 shares
at a price of R40.25 per share. The price represented a 4.1% discount to the 30-day volume weighted average price on 12 October 2017.
The book was oversubscribed.
The transactions concluded by Super Group during the period are explained in more detail in the Financial Performance section and
the Divisional Review section of this document.
Financial performance
Group revenue increased by 27.5% to R18.0 billion (Dec 2016: R14.1 billion) predominantly as a result of the acquisitions of the
Slough Motor Corporation (SMC) dealerships in the United Kingdom and SG IN tIME's net acquisition of an 88% interest in the Spanish
courier company, Servicios Empresariales Ader, SL (Ader). Revenue also increased as a result of the inclusion of the Essex Auto Group (EAG)
and the Western Cape dealerships for the full period, as well as an excellent performance by SG Coal.
Operating profit increased by 10.8% to R1 149.2 million (Dec 2016: R1 036.8 million). The main reason for the growth rate in operating
profit being lower than the revenue growth rate is the acquisition of lower margin businesses, namely SMC and Ader.
The increase in net finance costs of 36.0% to R168.9 million (Dec 2016: R124.2 million) is attributable to the funding of the
various acquisitions, as well as the funding of the working capital and the properties acquired with SMC. The average interest rate
paid on borrowings was 5.7% (Dec 2016: 6.2%) and the average interest rate earned on cash was 3.0% (Dec 2016: 3.9%).
Profit before tax increased by 7.4% to R980.3 million (Dec 2016: R912.6 million). The effective tax rate increased to 27.7%
(Dec 2016: 26.5%).
Earnings per share (EPS) and headline earnings per share (HEPS) increased by 6.6% to 152.9 cents (Dec 2016: 143.5 cents)
and 7.7% to 155.1 cents (Dec 2016: 144.0 cents) respectively.
Core HEPS increased by 5.8% to 172.8 cents (Dec 2016: 163.3 cents). Core HEPS excludes the amortisation of Purchase Price Allocation (PPA)
intangibles arising from business combinations, acquisition-related costs and B-BBEE costs, after tax and non-controlling interests.
The increase in total assets of 4.8% to R26.1 billion (Jun 2017: R24.9 billion) is mainly as a result of the newly acquired assets in
SMC and Ader during the period under review. The Group's Return on Net Operating Assets, after tax, was 12.0% (Dec 2016: 12.5%).
Super Group's net debt position at 31 December 2017 was R3 321.7 million, equating to a gearing ratio of 31.6%, similar to the ratio
at year-end. The net asset value per share increased by 4.1% for the period to 2 492.5 cents at 31 December 2017
(30 June 2017: 2 394.1 cents).
Operating cash flow increased by 19.3% for the period to R1 688.1 million (Dec 2016: R1 414.5 million) mainly due to a combination of the
acquisition of SMC and the inclusion of the Western Cape dealerships and Motiva for the full period compared to four months and one month,
respectively, in the prior period.
Divisional review
SUPPLY CHAIN
Supply Chain Africa
Six months Six months Year
ended ended ended
Change 31 December 31 December 30 June
R'000 % 2017 2016 2017
Revenue 7.8 4 656 626 4 320 536 8 344 186
EBITA (1.1) 275 170 278 190 482 163
Operating profit 0.4 261 950 260 931 448 528
Operating margin (%) 5.6 6.0 5.4
Profit before tax (0.9) 241 403 243 548 413 665
Supply Chain Africa's SG Consumer, SG Convenience, Digistics and SG Freight businesses were largely impacted by the weak consumer demand
experienced in the FMCG and Quick Service Restaurant industries. SG Coal delivered another excellent set of results compared to the
prior period. Super Rent, SG Mobility and African Logistics performed satisfactorily over the reporting period, however, these businesses
experienced pressure on margins. Phola Coaches and VSc Solutions reported disappointing results as a result of the competitive environment
in which they trade. Super Group acquired a 90% interest in the MDS Group, a web-based express domestic courier company, servicing both
individuals and corporates including some of the country's largest multinationals. In addition, Super Group acquired the remaining 45% of
Digistics and an additional 15% in Legend, as well as sold 15% of SG Coal to the Group's Black Empowerment Scheme.
Supply Chain Europe
Six months Six months Year
ended ended ended
Change 31 December 31 December 30 June
R'000 % 2017 2016 2017
Revenue 60.6 1 608 404 1 001 252 1 997 915
EBITA 14.0 106 639 93 534 194 468
Operating profit 13.5 62 579 55 125 120 158
Operating margin (%) 3.9 5.5 6.0
Profit before tax 11.4 36 893 33 118 78 105
Supply Chain Europe's results of SG IN tIME, a Time-critical Delivery Services company, included the results of Ader, a Spanish courier
and express transport operator, acquired effective July 2017. Ader's business operates at lower margins than IN tIME, impacting the
division's overall operating margin. The weakening of the average Rand against the Euro positively impacted Super Group's profit before
tax to an amount of R1.4 million (Dec 2016: R1.3 million).
FLEET SOLUTIONS
Fleet Africa
Six months Six months Year
ended ended ended
Change 31 December 31 December 30 June
R'000 % 2017 2016 2017
Revenue (3.4) 315 552 326 685 623 357
EBITA (21.5) 61 425 78 262 146 921
Operating profit (21.5) 61 425 78 262 146 921
Operating margin (%) 19.5 24.0 23.6
Profit before tax (22.1) 54 570 70 068 129 284
Fleet Africa delivered an expected decline in results. The Transnet and other major contracts continued to perform well. Both the roll-out
of the City of Tshwane emergency vehicles and the National Department of Transport maintenance contract are progressing slowly. Significant
New tenders continue to be submitted.
SG Fleet
Six months Six months Year
ended ended ended
Change 31 December 31 December 30 June
R'000 % 2017 2016 2017
Revenue 14.3 1 599 657 1 399 728 2 985 856
EBITA 12.3 526 873 469 224 1 002 689
Operating profit 12.4 493 047 438 467 939 455
Operating margin (%) 30.8 31.3 31.5
Profit before tax 12.3 448 787 399 516 853 961
SG Fleet reported a good set of results and benefited from the inclusion of Motiva (UK) for the full period compared to only one month
in the comparable prior period. Fairly tough trading conditions were experienced in 2Q2018. The novated lease market softened, subdued consumer
sentiment was felt and winning contracts in the heavy commercial vehicle segment at acceptable returns posed a challenge. The margins decreased
as a result of the lower Motiva (UK) and Fleet Hire (UK) margin businesses. The strengthening of the average Rand against the Australian Dollar
negatively impacted Super Group's profit before tax by an amount of R4.9 million (Dec 2016: positively impacted the results by R28.1 million).
DEALERSHIPS
Dealerships SA
Six months Six months Year
ended ended ended
Change 31 December 31 December 30 June
R'000 % 2017 2016 2017
Revenue 17.7 5 016 721 4 261 576 9 074 861
EBITA 19.0 167 007 140 396 288 101
Operating profit 19.0 167 007 140 396 288 101
Operating margin (%) 3.3 3.3 3.2
Profit before tax 14.3 120 029 105 029 210 683
Dealerships SA reported an excellent set of results, comfortably outperforming NAAMSA statistics. The results include the nine Western Cape
dealerships for the full period compared to only four months in the prior comparable period. Following the announcement by General Motors that
they are exiting South Africa, Dealerships SA sold one dealership and closed another. Dealerships delivered a 7.9% growth rate in new vehicle
sales (17.9% growth excluding dealerships sold/closed) compared to the NAAMSA dealer market reporting an increase of 2.3% in new vehicle sales
for the six-month period ended 31 December 2017. Used vehicle sales increased by a satisfactory 10.5% over the same period (17.9% growth
excluding dealerships sold/closed). The Parts and Services business continued to perform well. Dealerships SA maintained its operating
margin at 3.3%.
Dealerships UK
Six months Six months Year
ended ended ended
Change 31 December 31 December 30 June
R'000 % 2017 2016 2017
Revenue 71.3 4 764 855 2 781 681 6 840 438
EBITA 53.5 113 971 74 239 180 424
Operating profit 55.6 111 321 71 556 175 243
Operating margin (%) 2.3 2.6 2.6
Profit before tax 40.1 63 691 45 448 116 965
Dealerships UK's results were positively impacted by the inclusion of Essex Auto Group and Slough Motor Corporation. During the last six months
of 2017, the UK dealership market experienced steep declines in new vehicle sales of 10.5%, as well as a drop in used car volumes due to fewer
trade-ins. Ford lost market share in the UK, as a result of temporary and unprecedented supply problems with the popular Fiesta and Focus models,
negatively impacting Allen Ford's results. Overall vehicle sales in Dealerships UK grew by 69.1% (existing dealerships declined by 13.5%),
with new vehicle sales growth of 60.5% (existing dealerships declined by 14.4%) and used vehicle sales growth of 87.2% (existing dealerships
declined by 11.6%) over the reporting period. The strengthening of the average Rand against the GBP had a negative impact on the profit before
tax of the Group of R1.0 million (Dec 2016: R8.8 million).
SERVICES
The Services segment includes the Corporate and the Mauritius operations. The Services segment performed well on the back of the solid
performance by Treasury together with other recoveries.
OUTLOOK
Super Group's strategy of being an innovative, integrated mobility solutions company remains integral to growing and expanding its core businesses.
The European and UK markets seem to be stabilising despite the continuing uncertainty regarding the potential Brexit outcome. The South African
socio-political landscape continues to be challenging although there is some positive sentiment given the current political changes.
The South Africa consumer remains under significant pressure and low growth rates are expected to persist. Nevertheless, the Group remains
cautiously optimistic with regards to the impact of these political changes on the economies in which it operates and expects to further improve
operational efficiencies and gain market share in most business sectors over the remainder of the financial year.
No interim dividend for the six months ended 31 December 2017 has been declared.
On behalf of the Board
P Vallet P Mountford
Chairman of the company Chief Executive Officer
Sandton
19 February 2018
The Unaudited Interim Results will be available on the Group's website after 08:30 on Tuesday, 20 February 2018. The presentation to the investor
community can be viewed on the Group's website after 13:00. Copies of the full announcement are available on request from Nigel Redford,
Company Secretary, nigel.redford@supergrp.com. The Group's website is www.supergroup.co.za.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The Condensed Consolidated Interim Financial Statements are prepared in accordance with International Financial Reporting Standards, (IAS) 34 Interim
Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by
Financial Reporting Standards Council and the requirements of the Companies Act of South Africa. The accounting policies applied in the preparation
of these Condensed Consolidated Interim Financial Statements are in terms of International Financial Reporting Standards (IFRS) and are consistent
with those applied in the previous Annual Financial Statements.
The definitions of capital items, core headline earnings and related adjustments are included in the accounting policies in the June 2017
Annual Financial Statements. There were no standards and amendments to standards with a material impact on the Condensed Consolidated
Interim Financial Statements that are relevant to and became effective for the first time in Super Group's financial year that
commenced 1 July 2017.
Standards effective for financial year commencing 1 July 2018:
- IFRS 15 Revenue from Contracts with Customers
- IFRS 9 Financial Instruments
- Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)
- Transfers of Investment Property (Amendments to IAS 40)
- IFRIC 22 Foreign Currency Transactions and Advance Considerations
Standards effective for reporting periods starting on or after 1 July 2019:
- IFRS 16 Leases
- IFRIC 23 Uncertainty over Income Tax Treatments
The Group will adopt the above standards and interpretations when they become effective.
The Group has been holding workshops and strategy meetings to determine the potential impact of the adoption of IFRS 15, IFRS 9 and IFRS 16 on the
Financial Statements.
IFRS 15 - Revenue from Contracts with Customers replaces IAS 18 - Revenue, and provides a single comprehensive model for
revenue recognition based on the satisfaction of performance obligations and additional disclosures in respect of revenue. The initial assessment
indicates that the only material anticipated change is expected in the SG Fleet businesses resulting in a gross up of the end of lease income and
fleet management costs, some of which are currently presented as a net balance within revenue. This is expected to be a presentation change and
will not have an impact on the operating results. The new standard also introduces expanded disclosure requirements and changes in presentation.
These are expected to change the nature and extent of the Group's disclosures about its revenue from contracts with customers and associated assets.
IFRS 9 - Financial Instruments replaces IAS 39 Financial instruments. The initial assessment indicates that the impairment allowance of receivables
currently estimated on the incurred loss model will be estimated on an expected credit loss model and the increase of the allowance is not expected
to have a material impact on the Group.
IFRS 16 - Leases replaces IAS 17 - Leases, introduced changes to lessee accounting, in particular, the
requirement to recognise leases currently classified as operating leases on balance sheet. The standard requires a lessee to recognise a right-of-use
asset, representing its rights to use the underlying lease asset, and a lease liability representing its obligation to make lease payments, with
certain exceptions for short-term leases or leases of low-value assets, on the Statement of Financial Position. The initial assessment indicates that
the present value of operating rental commitments disclosed in note 9 of the salient features be recorded as a financial liability with a
corresponding capitalised non-current asset on the Statement of Financial Position. The related amortised finance cost and non-current asset
depreciation will be recorded in the Statement of Comprehensive Income, replacing the operating lease expenses currently recognised.
The Board's initial view on the other standards not yet effective is that the impact is not expected to be material.
The Condensed Consolidated Interim Financial Statements are presented in Rand, which is the company's functional currency and the Group's
presentation currency, rounded to the nearest thousand.
These results have been compiled under the supervision of the Chief Financial Officer, Colin Brown, CA(SA), BCompt (Hons), MBL.
Condensed Consolidated Statement
of Comprehensive Income
Restated(1)
Six-month Six-month Restated(1)
period ended period ended Year ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
R'000 R'000 R'000
Revenue 17 966 337 14 094 915 29 873 856
Depreciation and amortisation (excluding amortisation of PPA intangibles) (424 066) (345 266) (750 697)
Operating expenditure - excluding capital items (16 292 845) (12 619 204) (26 813 272)
Operating expenditure - capital items (6 432) (4 526) (17 474)
EBITA 1 242 994 1 125 919 2 292 413
Amortisation of PPA intangibles (93 756) (89 108) (176 360)
Operating profit 1 149 238 1 036 811 2 116 053
Finance costs (230 410) (207 137) (441 171)
Interest received and income from equity-accounted investees 61 516 82 917 161 171
Profit before income tax 980 344 912 591 1 836 053
Income tax expense (271 595) (241 940) (503 322)
Profit for the period 708 749 670 651 1 332 731
Profit for the period attributable to:
Non-controlling interests (NCI) 165 100 170 857 339 987
Equity holders of Super Group 543 649 499 794 992 744
708 749 670 651 1 332 731
Other comprehensive income (OCI) for the period
Item which will be reclassified to profit or loss: (159 428) (521 409) (414 073)
Translation adjustment (160 403) (515 542) (418 503)
Effective portion of hedge 1 342 (8 114) 6 897
Tax effect of effective portion of hedge (367) 2 247 (2 467)
Items which will not be reclassified to profit or loss: - - (15 363)
Revaluation of land and buildings - - (9 148)
Tax effect and change in capital gains tax inclusion rate of revaluation of land and buildings - - (6 215)
Other comprehensive income for the period (net of tax) (159 428) (521 409) (429 436)
Total comprehensive income for the period (net of tax) 549 321 149 242 903 295
Total comprehensive income for the period attributable to:
Non-controlling interests 129 905 27 057 220 604
Equity holders of Super Group 419 416 122 185 682 691
549 321 149 242 903 295
RECONCILIATION OF HEADLINE EARNINGS
Profit attributable to equity holders of Super Group 543 649 499 794 992 744
Capital items after tax (Refer note 8 in salient features) 7 489 1 631 12 416
Headline earnings for the period 551 138 501 425 1 005 160
RECONCILIATION OF CORE HEADLINE EARNINGS
Headline earnings for the period 551 138 501 425 1 005 160
Acquisition costs after tax and NCI 2 810 18 350 42 075
B-BBEE costs after tax and NCI 13 546 7 702 25 644
Amortisation of intangible assets arising on business combinations after tax and NCI 46 834 41 325 83 704
Core headline earnings for the period 614 328 568 802 1 156 583
Earnings per share (cents)
Basic 152.9 143.5 284.7
Diluted 152.4 141.3 282.6
Headline earnings per share (cents)
Basic 155.1 144.0 288.2
Diluted 154.5 141.7 286.1
Core headline earnings per share (cents)
Basic 172.8 163.3 331.7
Diluted 172.2 160.8 329.3
(1)The earnings per share, headline earnings per share and core earnings per share have been restated in terms of IAS 33.28 as a result of the
bookbuild in October 2017. The restated numbers for 30 June 2017 have not been audited.
Condensed Consolidated Statement
of Financial Position
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
R'000 R'000 R'000
ASSETS
Non-current assets 15 093 989 13 756 408 14 558 691
Property, plant and equipment 4 654 858 3 637 144 4 216 737
Investment property 149 800 143 200 149 800
Full maintenance lease assets 1 508 157 1 661 732 1 613 868
Intangible assets 1 311 135 1 314 727 1 270 627
Goodwill 7 114 078 6 675 689 6 990 630
Investments and other non-current assets 209 457 98 232 103 649
Deferred tax assets 146 504 225 684 213 380
Current assets 10 975 040 9 570 792 10 314 060
Inventories 3 796 476 2 952 608 3 399 158
Trade receivables 3 273 604 2 731 748 3 034 492
Sundry receivables 1 321 406 1 349 499 1 153 277
Cash and cash equivalents 2 583 554 2 536 937 2 727 133
Total assets 26 069 029 23 327 200 24 872 751
EQUITY AND LIABILITIES
Capital and reserves
Capital and reserves attributable to equity holders of Super Group 9 050 340 7 731 094 8 355 814
Non-controlling interests 1 447 124 1 640 439 1 499 521
Total equity 10 497 464 9 371 533 9 855 335
Non-current liabilities 5 756 941 6 167 661 6 120 815
Fund reserves 511 202 575 158 523 008
Non-controlling interest put option and other liabilities 245 516 342 526 268 078
Full maintenance lease borrowings 543 270 732 630 672 189
Interest-bearing borrowings 3 737 897 3 829 625 3 977 826
Provisions 69 000 83 631 57 860
Deferred tax liabilities 650 056 604 091 621 854
Current liabilities 9 814 624 7 788 006 8 896 601
Non-controlling interest put option liability - 114 822 102 665
Full maintenance lease borrowings 328 017 361 624 337 009
Interest-bearing borrowings 1 296 081 572 979 845 837
Trade and other payables 7 913 470 6 499 849 7 234 455
Income tax payable 40 717 83 634 112 251
Provisions 236 339 155 098 264 384
Total equity and liabilities 26 069 029 23 327 200 24 872 751
Condensed Consolidated Statement
of Cash Flows
Six-month Six-month
period ended period ended Year ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
R'000 R'000 R'000
Cash flows from operating activities
Operating cash flow 1 688 143 1 414 463 3 111 395
Working capital (outflow)/inflow (241 267) 136 996 82 925
Cash generated from operations 1 446 876 1 551 459 3 194 320
Finance costs paid (212 441) (197 427) (441 915)
Investment income and interest received 62 140 82 632 152 498
Income tax paid (286 680) (156 467) (409 559)
Dividend paid to non-controlling interest (128 679) (114 128) (222 407)
Net cash generated from operating activities 881 216 1 166 069 2 272 937
Cash flows from investing activities
Additions to property, plant and equipment (579 660) (469 601) (958 110)
Additions to full maintenance lease assets (233 087) (263 201) (625 453)
Additions to intangible assets (30 459) (20 584) (44 574)
Proceeds on disposal of property, plant and equipment 101 550 94 362 224 116
Proceeds on disposal of full maintenance lease assets 134 298 119 800 317 096
Net acquisition of businesses (net of cash acquired) (459 776) (1 250 266) (1 794 057)
Dividends received from equity-accounted investee - 9 785 10 882
Other investing activities (2 748) 41 272 40 748
Net cash outflow from investing activities (1 069 882) (1 738 433) (2 829 352)
Cash flows from financing activities
Share issues net of expenses 497 150 - -
Cash (outflow)/inflow on share options (1 050) 6 439 (1 830)
Additional investments in existing subsidiaries (540 005) (32 909) (95 074)
Interest-bearing borrowings raised 668 816 1 035 047 1 766 608
Full maintenance lease borrowings raised 264 666 108 708 396 010
Interest-bearing borrowings repaid (393 444) (828 800) (1 253 827)
Full maintenance lease borrowings repaid (387 596) (148 115) (522 571)
Net cash inflow from financing activities 108 537 140 370 289 316
Net decrease in cash and cash equivalents (80 129) (431 994) (267 099)
Net cash and cash equivalents at beginning of the period 2 727 133 3 127 910 3 127 910
Effect of foreign exchange on cash and cash equivalents (63 450) (158 979) (133 678)
Cash and cash equivalents at end of the period 2 583 554 2 536 937 2 727 133
Condensed Consolidated Statement of
Changes in Equity
Share
Stated Other Retained buyback
capital reserves earnings reserve
R'000 R'000 R'000 R'000
Balance at 30 June 2016 - Audited 3 256 491 1 158 011 3 496 689 (297 071)
Changes in equity for the 2017 year
Other comprehensive income - (377 609) - -
Translation adjustment - (374 542) - -
Effective portion of hedge - (4 242) - -
Tax effect of effective portion of hedge - 1 175 - -
Profit for the period - - 499 794 -
Total comprehensive income for the period - (377 609) 499 794 -
Realisation of revaluation reserve through depreciation - (39) 39 -
Share-based payment reserve movement - - 18 750 -
Share options exercised - - (78 292) -
B-BBEE good leaver options exercised1 - - (2 412) -
Movement in treasury shares - - - 87 597
Dividends paid to NCI - - - -
Deferred tax recorded directly in equity on movement in options - - (2 345) -
NCI put option movement - - (23 399) -
Transactions with equity partners - SG Fleet - - (25 047) -
Transactions with equity partners - Motiva - - 6 459 -
Transactions with equity partners - Fleet Hire - - 13 478 -
NCI recognised in respect of subsidiary acquired - Legend - - - -
Balance at 31 December 2016 - Unaudited 3 256 491 780 363 3 903 714 (209 474)
Other comprehensive income - 67 556 - -
Translation adjustment - 77 532 - -
Effective portion of hedge - 7 854 - -
Tax effect of effective portion of hedge - (2 467) - -
Revaluation of land and buildings - (9 148) -
Tax effect and change in capital gains tax inclusion rate of
revaluation of land and buildings - (6 215) -
Non-
controlling Total
Total interest equity
R'000 R'000 R'000
Balance at 30 June 2016 - Audited 7 614 120 1 687 673 9 301 793
Changes in equity for the 2017 year
Other comprehensive income (377 609) (143 800) (521 409)
Translation adjustment (374 542) (141 000) (515 542)
Effective portion of hedge (4 242) (3 872) (8 114)
Tax effect of effective portion of hedge 1 175 1 072 2 247
Profit for the period 499 794 170 857 670 651
Total comprehensive income for the period 122 185 27 057 149 242
Realisation of revaluation reserve through depreciation - - -
Share-based payment reserve movement 18 750 2 011 20 761
Share options exercised (78 292) (454) (78 746)
B-BBEE good leaver options exercised1 (2 412) - (2 412)
Movement in treasury shares 87 597 - 87 597
Dividends paid to NCI - (114 128) (114 128)
Deferred tax recorded directly in equity on movement in options (2 345) (1 144) (3 489)
NCI put option movement (23 399) - (23 399)
Transactions with equity partners - SG Fleet (25 047) (7 862) (32 909)
Transactions with equity partners - Motiva 6 459 10 128 16 587
Transactions with equity partners - Fleet Hire 13 478 18 817 32 295
NCI recognised in respect of subsidiary acquired - Legend - 18 341 18 341
Balance at 31 December 2016 - Unaudited 7 731 094 1 640 439 9 371 533
Other comprehensive income 67 556 24 417 91 973
Translation adjustment 77 532 19 507 97 039
Effective portion of hedge 7 854 7 157 15 011
Tax effect of effective portion of hedge (2 467) (2 247) (4 714)
Revaluation of land and buildings (9 148) - (9 148)
Tax effect and change in capital gains tax inclusion rate of
revaluation of land and buildings (6 215) - (6 215)
Share
Stated Other Retained buyback
capital reserves earnings reserve
R'000 R'000 R'000 R'000
Profit for the period - - 492 950 -
Total comprehensive income for the period - 67 556 492 950 -
Realisation of revaluation reserve through depreciation - (45) 45 -
Share-based payment reserve movement - - 19 779 -
Share options exercised - - (8 268) -
B-BBEE good leaver options exercised1 - - (8 269) -
Movement in treasury shares - - - 8 278
Dividends paid to NCI - - - -
Deferred tax recorded directly in equity on movement in options - - (28 771) -
NCI put option movement - - 30 985 -
Transactions with equity partners - SG Fleet - - (7 691) -
Transactions with equity partners - SG Coal - - 58 171 -
NCI recognised in respect of subsidiary acquired - Legend - - - -
Balance at 30 June 2017 - Audited 3 256 491 847 874 4 452 645 (201 196)
Changes in equity for the 2018 peri
Other comprehensive income - (124 233) - -
Translation adjustment - (124 772) - -
Effective portion of hedge - 742 - -
Tax effect of effective portion of hedge - (203) - -
Profit for the period - - 543 649 -
Total comprehensive income for the period - (124 233) 543 649 -
Realisation of revaluation reserve through depreciation - (58) 58 -
Bookbuild shares issued for cash2 500 000 - - -
Share issue expenses2 (2 850) - - -
Share-based payment reserve movement - - 19 948 -
Share options exercised - South Africa - - (68 323) -
Share options exercised - Australia - - (11 033) -
B-BBEE good leaver options exercised - - (1 050) -
Movement in treasury shares - - - 68 397
Deferred tax recorded directly in equity on movement in options - - 7 396 -
NCI put options movement - - 115 416 -
Dividends paid to NCI - - - -
NCI recognised in respect of subsidiaries acquired3 - - - -
Transacions with equity partners - increase in shareholdings3 - - (363 779) -
Transacions with equity partners - decrease in shareholdings3 - - 10 988 -
Balance at 31 December 2017 - Unaudited 3 753 641 723 583 4 705 915 (132 799)
Non-
controlling Total
Total interest equity
R'000 R'000 R'000
Profit for the period 492 950 169 130 662 080
Total comprehensive income for the period 560 506 193 547 754 053
Realisation of revaluation reserve through depreciation - - -
Share-based payment reserve movement 19 779 2 402 22 181
Share options exercised (8 268) (10) (8 278)
B-BBEE good leaver options exercised1 (8 269) - (8 269)
Movement in treasury shares 8 278 - 8 278
Dividends paid to NCI - (108 279) (108 279)
Deferred tax recorded directly in equity on movement in options (28 771) (1 067) (29 838)
NCI put option movement 30 985 - 30 985
Transactions with equity partners - SG Fleet (7 691) (1 795) (9 486)
Transactions with equity partners - SG Coal 58 171 (225 476) (167 305)
NCI recognised in respect of subsidiary acquired - Legend - (240) (240)
Balance at 30 June 2017 - Audited 8 355 814 1 499 521 9 855 335
Changes in equity for the 2018 peri
Other comprehensive income (124 233) (35 195) (159 428)
Translation adjustment (124 772) (35 631) (160 403)
Effective portion of hedge 742 600 1 342
Tax effect of effective portion of hedge (203) (164) (367)
Profit for the period 543 649 165 100 708 749
Total comprehensive income for the period 419 416 129 905 549 321
Realisation of revaluation reserve through depreciation - - -
Bookbuild shares issued for cash2 500 000 - 500 000
Share issue expenses2 (2 850) - (2 850)
Share-based payment reserve movement 19 948 1 994 21 942
Share options exercised - South Africa (68 323) (74) (68 397)
Share options exercised - Australia (11 033) (9 728) (20 761)
B-BBEE good leaver options exercised (1 050) - (1 050)
Movement in treasury shares 68 397 - 68 397
Deferred tax recorded directly in equity on movement in options 7 396 133 7 529
NCI put options movement 115 416 - 115 416
Dividends paid to NCI - (128 679) (128 679)
NCI recognised in respect of subsidiaries acquired3 - 15 678 15 678
Transacions with equity partners - increase in shareholdings3 (363 779) (178 817) (542 596)
Transacions with equity partners - decrease in shareholdings3 10 988 117 191 128 179
Balance at 31 December 2017 - Unaudited 9 050 340 1 447 124 10 497 464
(1) A good leaver is an employee who participated in the Broad-Based Black Economic Empowerment Scheme whose employment was
terminated due to their death, retrenchment or sale of the subsidiary or business whom employed the participant.
(2) A bookbuild is an offer of shares to selected investors of the company.
(3) Refer to business combinations note.
Operating segments
Super Group Supply Chain Africa Supply Chain Europe
Six-month Six-month Six-month Six-month Six-month Six-month
period ended period ended period ended period ended period ended period ended
31 December 31 December 31 December 31 December 31 December 31 December
2017 2016 2017 2016 2017 2016
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
R'000 R'000 R'000 R'000 R'000 R'000
Revenue 17 966 337 14 094 915 4 656 626 4 320 536 1 608 404 1 001 252
Depreciation and amortisation (excluding amortisation (424 066) (345 266) (180 222) (169 953) (7 681) (5 916)
of PPA intangibles)
Net operating expenditure - excluding capital items (16 292 845) (12 619 204) (4 207 485) (3 867 561) (1 493 648) (901 792)
Operating expenditure - capital items (6 432) (4 526) 6 251 (4 832) (436) (10)
EBITA 1 242 994 1 125 919 275 170 278 190 106 639 93 534
Amortisation of PPA intangibles (93 756) (89 108) (13 220) (17 259) (44 060) (38 409)
Operating profit 1 149 238 1 036 811 261 950 260 931 62 579 55 125
Net finance charges (168 894) (124 220) (20 547) (17 383) (25 686) (22 007)
Profit before tax 980 344 912 591 241 403 243 548 36 893 33 118
Net capex 607 358 539 224 353 538 189 116 9 263 10 205
Super Group Supply Chain Africa Supply Chain Europe
As at As at As at As at As at As at
31 December 30 June 31 December 30 June 31 December 30 June
2017 2017 2017 2017 2017 2017
Unaudited Audited Unaudited Audited Unaudited Audited
R'000 R'000 R'000 R'000 R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 4 654 858 4 216 737 2 151 034 1 977 777 58 358 39 127
Investment property 149 800 149 800 - - - -
Full maintenance lease assets 1 508 157 1 613 868 - - - -
Intangible assets 1 311 135 1 270 627 57 568 55 763 564 976 480 190
Goodwill 7 114 078 6 990 630 663 794 636 891 1 726 919 1 675 097
Investments and other non-current assets 209 457 103 649 72 893 74 599 2 592 -
Current assets
Inventories 3 796 476 3 399 158 396 549 343 237 1 849 2 226
Trade receivables 3 273 604 3 034 492 1 414 349 1 185 153 591 889 368 624
Sundry receivables 1 321 406 1 153 277 870 713 701 576 16 978 18 079
Intercompany trade receivables - - 7 892 9 458 - -
SEGMENT ASSETS 23 338 971 21 932 238 5 634 792 4 984 454 2 963 561 2 583 343
LIABILITIES
Non-current liabilities
Long-term borrowings 4 281 167 4 650 015 565 257 511 512 843 376 765 205
Non-controlling interest put options and other
liabilities 245 516 268 078 24 148 40 152 142 912 138 353
Fund reserves 511 202 523 008 - - - -
Long-term provisions 69 000 57 860 - - 2 685 2 701
Current liabilities
Short-term borrowings 1 624 098 1 182 846 312 036 278 465 473 3 840
Non-controlling interest put options - 102 665 - 102 665 - -
Trade and other payables and provisions 8 149 809 7 498 839 1 893 790 1 413 372 492 020 239 541
Intercompany trade payables - - 29 929 30 231 - -
SEGMENT LIABILITIES 14 880 792 14 283 311 2 825 160 2 376 397 1 481 466 1 149 640
Net operating assets 14 156 104 13 495 267 3 628 990 3 455 840 2 466 263 2 341 101
Services & intercompany
Fleet Africa SG Fleet Dealerships SA Dealerships UK eliminations
Six-month Six-month Six-month Six-month Six-month Six-month Six-month Six-month Six-month Six-month
period ended period ended period ended period ended period ended period ended period ended period ended period ended period ended
31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December
2017 2016 2017 2016 2017 2016 2017 2016 2017 2016
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
315 552 326 685 1 599 657 1 399 728 5 016 721 4 261 576 4 764 855 2 781 681 4 522 3 457
(90 913) (84 204) (112 978) (60 701) (9 707) (8 464) (13 836) (8 063) (8 729) (7 965)
(163 214) (164 219) (959 289) (870 005) (4 830 848) (4 112 727) (4 637 048) (2 699 379) (1 313) (3 521)
- - (517) 202 (9 159) 11 - - (2 571) 103
61 425 78 262 526 873 469 224 167 007 140 396 113 971 74 239 (8 091) (7 926)
- - (33 826) (30 757) - - (2 650) (2 683) - -
61 425 78 262 493 047 438 467 167 007 140 396 111 321 71 556 (8 091) (7 926)
(6 855) (8 194) (44 260) (38 951) (46 978) (35 367) (47 630) (26 108) 23 062 23 790
54 570 70 068 448 787 399 516 120 029 105 029 63 691 45 448 14 971 15 864
29 580 107 939 103 401 65 783 87 324 45 845 11 101 98 015 13 151 22 321
Services & intercompany
Fleet Africa SG Fleet Dealerships SA Dealerships UK eliminations
As at As at As at As at As at As at As at As at As at As at
31 December 30 June 31 December 30 June 31 December 30 June 31 December 30 June 31 December 30 June
2017 2017 2017 2017 2017 2017 2017 2017 2017 2017
Unaudited Audited Unaudited Audited Unaudited Audited Unaudited Audited Unaudited Audited
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
1 288 1 200 38 891 42 624 781 970 704 889 832 739 666 091 790 578 785 029
- - - - - - - - 149 800 149 800
898 021 961 113 610 136 652 755 - - - - - -
- - 632 331 674 373 - - 48 077 51 533 8 183 8 768
87 822 87 822 3 310 757 3 441 719 545 823 554 978 778 963 594 123 - -
- - - - - - - - 133 972 29 050
- - 103 131 113 515 1 324 736 1 275 363 1 967 168 1 664 817 3 043 -
106 322 90 548 618 152 680 701 308 947 299 055 231 766 394 566 2 179 15 845
52 491 71 886 124 259 132 552 48 862 27 676 34 616 35 171 173 487 166 337
197 592 - - 1 135 1 167 - - (9 224) (11 217)
1 146 141 1 213 161 5 437 657 5 738 239 3 011 473 2 863 128 3 893 329 3 406 301 1 252 018 1 143 612
282 318 385 882 1 433 649 1 625 079 200 000 200 000 387 567 463 339 569 000 698 998
- - 17 134 20 002 29 068 31 713 - - 32 254 37 858
46 906 40 841 464 296 482 167 - - - - - -
- - 66 315 55 159 - - - - - -
98 510 66 132 464 550 524 444 - - 597 943 303 356 150 586 6 609
- - - - - - - - - -
98 011 114 047 1 518 341 1 625 230 1 829 349 1 829 861 2 183 966 2 143 444 134 332 133 344
7 172 7 465 - - 958 838 - - (38 059) (38 534)
532 917 614 367 3 964 285 4 332 081 2 059 375 2 062 412 3 169 476 2 910 139 848 113 838 275
943 816 993 739 3 370 858 3 555 688 1 152 097 1 000 715 1 709 362 1 262 857 884 718 885 327
Business combinations
Interest Purchase price
Subsidiaries and businesses acquired Nature of business Operating segment Date acquired acquired (%) R'000
Servicios Empresariales Ader, S.L. (Ader) Logistics Supply Chain Europe 4 July 2017 89.5 (173 752)
Bestodeck Limited (SMC) Dealerships Dealerships UK 4 July 2017 100 (414 344)
MDS Group (MDS) Logistics Supply Chain Africa 1 October 2017 90 (59 045)
Purchase price (647 141)
Ader SMC MDS Total
Net cost on acquisition of businesses R'000 R'000 R'000 R'000
Fair value of assets acquired and liabilities assumed at date of acquisitio
Asset
Property, plant and equipment (17 801) (185 445) (10 454) (213 700)
Intangible assets (130 598) - (17 633) (148 231)
Goodwill (62 147) (200 120) (30 274) (292 541)
Inventories - (515 394) (318) (515 712)
Trade and other receivables (187 294) (13 595) (22 009) (222 898)
Provision for impairment of trade receivable - - 315 315
Taxation receivable - - (788) (788)
Cash and cash equivalents (9 024) (183 508) - (192 532)
(406 864) (1 098 062) (81 161) (1 586 087)
Liabilitie
Interest-bearing borrowings - - 1 901 1 901
Deferred tax liabilities 27 027 15 479 4 797 47 303
Trade and other payables 188 695 664 555 11 689 864 939
Income tax payable 3 003 3 684 - 6 687
Provisions 1 906 - 400 2 306
Overdraft - - 132 132
220 631 683 718 18 919 923 268
Fair value of net assets acquired (186 233) (414 344) (62 242) (662 819)
Less: Non-controlling interest 12 481 - 3 197 15 678
Purchase price (173 752) (414 344) (59 045) (647 141)
Cash/(overdraft) acquired 9 024 183 508 (132) 192 400
Cash outflow (164 728) (230 836) (59 177) (454 741)
The acquisition of Ader through IN tIME Holding GmbH (IN tIME) will bolster the Supply Chain Europe division and increase the Group's footprint
in the Eurozone. The Group performed a PPA exercise on Ader whereby intangible assets acquired were separately valued. The valuation,
using projected financial information led to the recognition of a trade name, software, customer contracts and relationships of R54.8 million,
R11.0 million and R64.8 million respectively.
The acquisition of the MDS Group, consisting of MDS Collivery Proprietary Limited, MDS outsourcing Proprietary Limited, Messenger and delivery
services technologies Proprietary Limited, MDS VISAPAK Proprietary Limited and MDS vehicle management Proprietary Limited, will bolster the
Supply Chain Africa division. The Group performed a PPA exercise on MDS whereby intangible assets acquired were separately valued. The valuation,
using projected financial information led to the recognition of a trade name, software, customer contracts and relationships of R4.7million,
R9.0 million and R3.4 million respectively.
The acquisition of SMC will expand the the Group's dealership footprint in the United Kingdom. The Group performed a PPA exercise which resulted
in no additional intangible assets recognised.
The non-controlling interests have been calculated using the present ownership instruments' proportionate share in the recognised amounts of the
acquiree's identifiable net assets.
The values identified in relation to the acquisitions are provisional as at 31 December 2017.
Goodwill has been recognised on the acquisition of Ader, SMC and MDS amounting to R62.1 million, R200.1 million and R30.3 million respectively.
Goodwill is attributable mainly to the skills and technical talent of the workforce and synergies expected to be achieved from integrating the
acquired businesses into the Group's various operations. None of the goodwill is expected to be deductible for tax purposes.
The acquisition related costs of R14.8 million in respect of these acquisitions are included in the consolidated statement of
comprehensive income.
Ader SMC MDS Total
Impact of the acquisitions on the results of the Group R'000 R'000 R'000 R'000
From the dates of acquisition, the acquired businesses contributed:
Revenue 408 162 1 140 988 29 488 1 578 638
Profit after tax and amortisation of PPA intangibles1 6 439 9 165 2 828 18 432
Attributable profit to equity holders of Super Group1 4 322 9 165 2 545 16 032
(1)Excluding acquisition related costs.
Impact of the acquisitions on the results of the Group- had they Ader SMC MDS Total
occurred on 1 July 2017 R'000 R'000 R'000 R'000
From 1 July 2017 the businesses would have contributed:
Revenue 408 162 1 140 988 56 624 1 605 774
Profit after tax and amortisation of PPA intangibles1 6 439 9 165 5 385 20 989
Attributable profit to equity holders of Super Group1 4 322 9 165 4 847 18 334
(1)Excluding acquisition related costs.
Tommy Martin Other Total
Net proceeds on disposal of business R'000 R'000 R'000
Fair value of assets and liabilities disposed were:
Assets
Property, plant and equipment 539 - 539
Inventories 10 805 - 10 805
Trade and other receivables - 254 254
Cash and cash equivalents - 8 809 8 809
11 344 9 063 20 407
Liabilities
Trade and other payables (7 274) (6 410) (13 684)
Provisions (296) (30) (326)
(7 570) (6 440) (14 010)
Fair value of net assets disposed 3 774 2 623 6 397
Loss on sale of business - (2 623) (2 623)
Selling price 3 774 - 3 774
Cash disposed - (8 809) (8 809)
Cash inflow/(outflow) 3 774 (8 809) (5 035)
Net costs on increase in existing shareholding SG Fleet Digistics Legend Ader Total
in subsidiaries R'000 R'000 R'000 R'000 R'000
Non-controlling interest (92 756) (68 760) (18 285) 984 (178 817)
Effect of transactions between equity partners on equity (307 475) (33 905) (21 415) (984) (363 779)
Cash outflow (400 231) (102 665) (39 700) - (542 596)
During the period the Group purchased an additional 9 742 802 shares in SG Fleet for R400.2 million, the remaining 45% of Digistics for
R102.7 million and an additional 15% in Legend for R39.7 million. In December the Group increased its investment in Ader via a purchase of shares.
This transaction did not change the Group's profit share arrangement.
SG Fleet Ader SG Coal Total
Net proceeds on decrease in existing shareholding in subsidiaries R'000 R'000 R'000 R'000
Non-controlling interest 30 505 2 038 84 648 117 191
Effect of transactions between equity partners on equity (9 917) 553 20 352 10 988
20 588 2 591 105 000 128 179
Equity shares of SG Fleet transferred (20 588) - - (20 588)
Long-term receivable - - (105 000) (105 000)
Cash inflow - 2 591 - 2 591
During the period SG Fleet issued 4 327 277 shares for the fulfilment of the vesting of SG Fleet's share options. The Group's closing shareholding
is 55.27%.
In December IN tIME disposed of 1.5% of Ader for R2.6 million.
On 1 October the Group disposed of 15% of SG Coal for R105.0 million.
Salient features
Six-month Six-month
period ended period ended Year ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
R'000 R'000 R'000
1. INTEREST-BEARING BORROWINGS
Australia and New Zealand 1 131 401 1 366 832 1 289 527
Germany 728 882 770 120 769 045
South Africa 1 782 775 1 436 847 1 695 585
United Kingdom 1 261 848 828 805 1 069 506
Spain 114 967 - -
Mauritius 14 105 - -
5 033 978 4 402 604 4 823 663
2. SHARE STATISTICS
Total issued less treasury shares ('000) 363 110 348 793 349 013
Weighted number of shares ('000)1 355 450 348 230 348 723
Diluted weighted number of shares ('000)1 356 660 353 792 351 274
Net asset value per share (cents)2 2 492.5 2 216.5 2 394.1
(1) As a result of the Bookbuild undertaken by the Group in October 2017, the comparative weighted and diluted
weighted number of shares in issue had to be adjusted in terms of IAS 33.28. The restated numbers for
30 June 2017 have not been audited.
(2) Net asset value per share is calculated as the capital and reserves attributable to equity shareholders of Super
Group divided by the total issued less treasury shares.
3. CAPITAL COMMITMENTS
Authorised but not yet contracted for capital commitments, excluding full maintenance 472 077 544 825 913 103
lease assets.
Capital commitments will be funded from normal operating cash flows and the utilisation of
existing borrowings facilities.
4. RELATED PARTY TRANSACTIONS
The Group, in the ordinary course of business, entered into various sales and purchase transactions on an arm's length basis with related parties.
Certain management of subsidiary companies sub-contracts vehicles to the Group. Sales, purchases and management fees received amounted to
R14.7 million (Dec 2016: R14.4 million), R36.5 million (Dec 2016: R30.3 million) and R11.2 million (Dec 2016: R11.5 million) respectively for
these services. These transactions were entered into in the normal course of business under terms and conditions that were no more favourable
than those arranged with third parties. Net amounts owing by key employees of this subsidiary was R3.9 million (June 2017: R 0.04 million).
5. SUBSEQUENT EVENTS
Other than the matters disclosed, the directors are not aware of other matters or circumstances arising subsequent to the reporting date up
to the date of this report, which will materially affect these results.
6. SIGNIFICANT EVENTS
IN tIME acquisition of Ader
IN tIME acquired Ader effective 4 July 2017 for a purchase consideration of R173.8 million. The statement of financial position as at
31 December 2017 has been impacted by increases in intangible assets of R125.5 million, goodwill of R61.8 million, trade and other receivables
of R207.6 million, deferred tax liability of R26.4 million and trade and other payables of R256.3 million as a result of this acquisition.
Trading relating to the 6 months ended 31 December 2017 has been included in the Statement of Comprehensive Income.
SG International Holdings Limited acquisition of SMC
SG International Holdings Limited acquired SMC effective 4 July 2017 for a purchase consideration of R414.3 million. The statement of financial
position as at 31 December 2017 has been impacted by increases in goodwill of R195.8 million, inventories of R452.6 million and trade and other
payables of R528.1 million as a result of this acquisition. Trading relating to the 6 months ended 31 December 2017 has been included in the
Statement of Comprehensive Income.
Exchange rate movements
The Group operates in foreign countries which use currencies other than presentation currency. The main currencies used in the Group's foreign
operations are Australian Dollar, US Dollar, Euro and the Pound Sterling. The strengthening of the Rand against the majority of these
currencies has had an effect on the Group's financial statements and has resulted in a foreign currency translation adjustment of R160.4 million
decreasing total equity.
The table below reflects the movement in the exchange rates from the prior reporting periods:
31 December 31 December %
2017 2016 Change
Average currency rate to the South African Rand:
Australian Dollar 10.43 10.54 (1.0)
US Dollar 13.41 13.99 (4.1)
Euro 15.77 15.34 2.8
Pound Sterling 17.67 17.89 (1.2)
31 December 30 June
2017 2017
Closing currency rate to the South African Rand:
Australian Dollar 9.66 10.07 (4.1)
US Dollar 12.38 13.07 (5.3)
Euro 14.86 14.95 (0.6)
Pound Sterling 16.72 17.04 (1.9)
The non-South African operations account for 57% (June 2017: 58%) and 64% (June 2017: 60%) of the Group's total assets and
liabilities respectively.
The non-South African operations generated 46% (December 2016: 38%) and 62% (December 2016: 58%) of the Group's revenue and operating
profit respectively.
Hierarchy
Level 2 Level 3
R'000 R'000 Valuation technique
7. FAIR VALUE
Property, plant and equipment - Land, 2 374 204 An external valuation was performed on the significant South African
buildings and leasehold improvements properties by Onyx valuation services in June 2017. The valuation
model considers the present value of net cash flows to be generated
from these properties, taking into account expected rental growth
rate, void period, occupancy rate, lease incentive costs such as
rent-free periods and other costs not paid by tenants. The expected
net cash flows are discounted using risk-adjusted discount rates.
Among other factors, the discount rate estimation considers the
quality of a building and its location (prime vs secondary), tenant
credit quality and lease terms.
Investment properties 149 800
Deferred contingent purchase consideration 60 000 Due to the sale of the GWM business in 2016 and the related profit
receivable - GWM warranties not being met, the amount receivable is certain as at
31 December 2017 according to the purchase agreement and has
been assessed as recoverable.
Deferred contingent purchase consideration 40 316 An obligation exists at acquisition date resulting from the possibility
payable - Legend of the acquiree's aggregate profit after tax for the three-year
period ending 30 June 2019 exceeding R60 million. The deferred
contingent purchase consideration is calculated by applying 75%
to every R1 excess over the R60 million aggregate profit after tax.
The present value of this obligation is determined using a pre-tax
discount rate of 9.5%. The date of exercise is the second business
day after the aggregate profit after tax is agreed.
FEC Liabilities 8 848 The fair values are based on broker quotes. Similar contracts are
traded in an active market and reflect the actual transactions in
similar instruments.
Legend put option 14 231 This put option is calculated as the fair value of the business at
exercise date of the option, by present valuing the free cash flows
for a 10-year period post the date of exercise. The present value is
determined by using a pre-tax discount rate of 9.5%. The option can
be exercised on 1 October 2019.
IN tIME put option 142 912 This put option is calculated as the fair value determined by using
the average audited EBITDA for the three years preceding the put
option exercise date at a price earnings multiple of 7.5, adjusted for
net debt. The present value has been determined using a pre-tax
discount rate of 7.7%. The put option can be exercised from
30 June 2020 to 30 June 2025.
The carrying value of all other financial instruments approximates the fair value of the financial instruments as at 31 December 2017.
Movement in level 3 financial instruments measured at fair value
The following table shows a reconciliation from the opening to closing balances of level 3 financial instruments carried at fair value:
31 December
2017
Unaudited
R'000
Property, plant and equipment - Land and buildings and leasehold improvements Total
Opening balance 2 120 365
Net additions 98 709
Acquisition of businesses 190 384
Other (35 254)
2 374 204
Investment properties
There has been no movement in the fair value of the Investment properties as at 31 December 2017. The next external valuation will be performed
in June 2018.
31 December
2017
Unaudited
GWM Legend R'000
Financial asset/(liability) - Deferred contingent purchase consideration R'000 R'000 Total
Opening balance 60 000 (24 501) 35 499
Fair value adjustment to profit and loss - (15 815) (15 815)
60 000 (40 316) 19 684
Financial assets - Put option liabilities
Opening balance 270 784
Movement through statement of changes in equity (113 641)
Exercised - Digistics (102 665)
Exercised - Legend (18 418)
Fair value adjustment 5 667
Foreign currency translation 1 775
157 143
Sensitivity analysis:
Deferred contingent purchase consideration
The significant assumptions included in the fair value measurement of the deferred contingent purchase consideration for Legend is based on the
projected income that is not observable in the market. The following table shows how the fair value of the Legend payable would change if the
projected earnings assumption was increased by 100bps:
Increase in
Fair value liability
R'000 R'000
Legend - Deferred contingent purchase consideration payable 40 497 181
Due to the Group having disposed of GWM, the deferred contingent purchase consideration of R60 million is certain.
Put options
The significant assumption included in the fair value measurement of the put option liabilities relates to the projected income that is not
observable in the market. The following table shows how the fair value of the liabilities would change if the earnings assumption was
increased by 100bps:
Increase in
Fair value liability
R'000 R'000
Legend 14 333 102
IN tIME 146 571 3 659
Six-month Six-month
period ended period ended Year ended
31 December 31 December 30 June
2017 2016 2017
Unaudited Unaudited Audited
R'000 R'000 R'000
8. CAPITAL ITEMS
Impairment of property/(reversal of impairment), plant and equipment and intangible assets 3 486 (14) 20 604
Impairment of goodwill 9 155 - 4 521
Loss on sale of business 2 623 - -
(Profit)/loss on sale of property, plant and equipment (8 832) 4 540 254
Fair value adjustment to investment property - - (6 600)
Reversal of impairment of equity-accounted investee - - (1 305)
Capital items before tax and NCI 6 432 4 526 17 474
Tax effect of capital items 1 661 (1 263) (5 064)
NCI effect of capital items (604) (1 632) 6
Capital items after tax and NCI 7 489 1 631 12 416
31 December
2017
Unaudited
R'000
9. OPERATING RENTAL COMMITMENTS
Property 2 390 445
- less than one year 388 966
- between one and five years 930 094
- thereafter 1 071 385
Rental and transport fleet 244 088
- less than one year 65 835
- between one and five years 127 822
- thereafter 50 431
Other 73 889
- less than one year 43 734
- between one and five years 30 155
- thereafter -
Total rental commitments 2 708 422
- less than one year 498 535
- between one and five years 1 088 071
- thereafter 1 121 816
Corporate information
Directors
Executive: P Mountford (Chief Executive Officer) and C Brown (Chief Financial Officer)
Non-executive: P Vallet* (Chairman of the company), Dr E Banda*, M Cassim*, V Chitalu*#, J Newbury* and D Rose*
*Independent #Zambian
Company Secretary
N Redford
Registered office
27 Impala Road, Chislehurston, Sandton, 2196
Transfer secretaries
Computershare Investor Services Proprietary Limited
(Registration number 2004/003647/07)
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196
(PO Box 61051, Marshalltown, 2107)
Sponsor
Deutsche Securities (SA) Proprietary Limited
(Registration number 1995/011798/07)
3 Exchange Square, 87 Maude Street, Sandton, 2196
Investor Relations
Keyter Rech Investor Solutions CC
(Registration number 2008/156985/23)
5 2nd Road, Hyde Park, 2196
www.supergroup.co.za
Date: 19/02/2018 02:03:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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