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UNICORN CAPITAL PARTNERS LIMITED - Unaudited condensed consolidated financial results for the six months ended 31 December 2017

Release Date: 28/03/2018 17:05
Code(s): UCP     PDF:  
Wrap Text
Unaudited condensed consolidated financial results for the six months ended 31 December 2017

UNICORN CAPITAL PARTNERS LIMITED
Previously known as Sentula Mining Limited
Incorporated in the Republic of South Africa
(Registration number 1992/001973/06)
Share code: UCP ISIN: ZAE000244745
("Unicorn" or "the Company")

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2017

OVERVIEW OF RESULTS

-   Basic earnings per share improved to 1,08 cents (December 2016: loss per share of 7,40 cents)
-   Headline loss per share improved to 0,11 cents (December 2016: headline loss per share of 4,01 cents)
-   Basic earnings per share from continuing operations improved to 0,73 cents (December 2016: loss per share of 0,80 cents)
-   Net asset value per share increased to 22 cents (June 2017: 21 cents)
-   The net Group overdraft position reduced to R9 million (June 2017: R31 million)

INTRODUCTION
Unicorn Capital Partners Limited has been listed on the Main Board of the JSE Limited since 1993. Unicorn's current portfolio
of companies includes the provision of overburden drilling and blasting, mobile crane hire and exploration drilling services
to the mining sector as well as an operational anthracite mine. Unicorn is on course to convert from a diversified mining and
mining services group to an investment holding company. Unicorn's investment focus will not be sector specific but will
rather focus on businesses that have good investment characteristics and yield attractive returns on capital.

The interim results for the six months ended 31 December 2017 represent the culmination of the efforts that led to the
improvement of what was once a company that had been incurring consecutive losses to an enterprise that can once again
lift its head and focus on what is important: delivering sustainable returns to its shareholders. Although still very modest,
Unicorn was able to deliver an attributable profit of R12,5 million to its shareholders for the interim period ended
31 December 2017, yielding positive results for the first time since September 2012. Our efforts during the past two years
finally started paying off during the six month period, evident in every one of our mining services companies achieving a
profit. Annualised return from operations on assets exceeded 15% in all instances. In addition, the remaining contract mining
machinery and equipment was disposed of during the period, completing the Group's exit from direct contract mining
activities. The only remaining piece to complete the short term puzzle, is the Nkomati Anthracite mine. Our consolidated
profits suffered as a result of our decision to accelerate the development of the mine to ensure that we can realize some of
the potential of this quality anthracite resource. We remain on target to achieve steady state mining operations in April 2018.
The interim financial results reflect the execution of the Group's strategic objectives of returning to profitability, sustaining
cash flow momentum in JEF, Ritchie and Geosearch and completing the Nkomati expansion within time and budget.

Drilling and blasting
The acquisition by JEF of nineteen drill rigs during the previous financial year delivered the results envisaged. The rigs were
fully deployed, assisting JEF in delivering its best six months performance since September 2014. Drill rig availability averaged
83% while drill rig utilisation averaged 87%. JEF recorded an operating profit of R23 million (December 2016: R4 million),
which equates to an annualised EBIT-return-on-assets of 19% compared to 3% as at June 2017. External debt to total assets
reduced to 16% compared to 19% as at 30 June 2017. The lower debt levels and strong performance warrants further
investment in JEF during the second half of the financial year should the operating environment remain robust.

Heavy mobile crane lifting
The four additional mobile cranes acquired by Ritchie during the previous financial year were fully deployed from the date
of acquisition. Crane availability averaged 85% and crane utilisation 76%. The average hourly rate charged per crane,
however, increased by less than inflation when compared to the previous interim period. Ritchie recorded an operating profit
of R18 million (December 2016: R13 million), which equates to an annualised EBIT-return-on-assets of 19% compared to 17%
as at June 2017. External debt to total assets reduced to 14% compared to 17% as at 30 June 2017, which provides capacity
for further expansion. Ritchie's operating environment remains healthy and investment in additional mobile cranes will most
likely be made during the second half of the 2018 calendar year.

Exploration drilling
The operating environment for Geosearch, with exploration drilling operations in South Africa, Botswana and Mozambique
continued to improve, albeit at a slow pace. During the six months ended 31 December 2017, we were able to commence a
large project in Botswana, were awarded a promising new contract in South Africa and were able to deploy additional drill
rigs at Vale's coal mine in Tete, Mozambique. Total drill rigs deployed as a percentage of our total fleet increased from 30%
as at 30 June 2017 to 37% by 31 December 2017, which was slightly below our target. Geosearch recorded an operating profit
of R8 million (December 2016: R3 million), which equates to an annualised EBIT-return-on-assets of 18%, compared to a 0%
as at June 2017. The exploration drilling operations remain ungeared.

Anthracite mining
During the six months ended 31 December 2017, we invested R67 million in Nkomati. Of the R67 million, R31 million was
invested in the make-safe and recommissioning of the underground mine and R36 million invested in the construction of the
new wash plant. The R67 million investment was financed through the long term IDC loan secured during the 2017 financial
year. Work on the underground mine and plant not yet commissioned at 31 December 2017, was capitalised as work in
progress. During March 2018, we commissioned our new 90,000 run of mine tons wash plant, and reopened the underground
mine. The new wash plant complex, with total capacity of 130,000 run of mine tons per month, will be fully operational by
early April 2018. Our underground mine aims to achieve steady state production by the end of April 2018. There have been
no lost time injuries during the period at Nkomati. Nkomati's operating loss of R44 million (December 2016: R2 million) can
be directly attributed to the successful expansion of the open pit mine. The loss is a direct result of the increase in the size of
the open pit, which should enable more sustainable and predictable open pit production in future.

The mine supplies a product which is ideal for the ferrochrome market. All the projected steady state production can be sold
locally as we are one of only a handful of mines in the country with the quality preferred for the ferrochrome market.
Exploration to establish the extent of the resource is ongoing on the available 6000 ha minable area. At this stage the total
resource amounts to 8.7 million Mineable Tons In Situ.

Contract mining
Sentula Coal, the Group's last remaining operating entity involved in opencast mining and earthmoving, has two remaining
Anglo American Coal South Africa contracts: The main contract, Umlalazi, will expire on 31 March 2018 while the New Vaal
contract was recently extended to December 2020. Both contracts are executed through the use of subcontractors. Sentula
Coal takes no operational risk and only provides management and administrative services. The company's last remaining
machinery and equipment was disposed of during October 2017 for a profit of R16 million, delivering R28 million in positive
cash flow. For the six month period ended 31 December 2017, the opencast mining and earthmoving segment reported an
operating profit of R25 million (December 2016: loss of R85 million).

Overdraft facility
Following the disposal of the opencast mining machinery and equipment, the Group's gross overdraft facility was reduced to
R46 million (June 2017: R65 million). Net cash on hand amounted to a negative R9 million (June 2017: negative R31 million).

As at 31 December 2017 the Group's centralised overdraft facility is secured through various cross-sureties across all Group
companies. In order to execute the Group's strategy of ring-fencing operating entities and to facilitate Unicorns transition to
an investment holding company, during March 2018 the centralised overdraft facility has been re-distributed from Unicorn
level to the individual operating companies.

Resource statement
The most recent South African Mineral Resource Committee compliant Resource and Reserve Statements of Nkomati is
available on the Unicorn website (www.unicorncapital.co.za). The respective Reserve and Resource statements contain
details of all the competent persons, their professional memberships, qualifications and experience. There has been no
significant change to the resources as disclosed in the previous Reserve and Resource Statement.

Matters of litigation
Unicorn continues to be involved in various litigation matters. We remain cautiously optimistic that we will achieve some
success during the current financial year.

On behalf of the Board

Ralph Patmore                                                  Jacques Badenhorst
Independent non-executive Chairman                             Chief Executive Officer
Woodmead
28 March 2018

CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS
For the six months ended 31 December 2017

                                                                           Unaudited six         Unaudited six
                                                                                months -              months -      Audited year ended
R'000                                                                   31 December 2017      31 December 2016            30 June 2017
Revenue                                                                          587 076               615 432               1 069 269
Cost of sales                                                                  (536 662)             (556 665)               (976 962)
Gross profit                                                                      50 414                58 767                  92 307
Other income                                                                       2 032                 1 659                   2 930
Administrative expenses                                                         (53 252)              (46 221)               (110 862)
(Loss)/profit from operations                                                      (806)                14 205                (15 625)
Net profit on disposal of assets                                                  12 757                   285                   4 224
Impairment of property, plant and equipment                                            -              (11 535)                (11 535)
Operating profit/(loss)                                                           11 951                 2 955                (22 936)
Finance expense                                                                 (10 585)               (8 538)                (19 893)
Finance income                                                                       600                   396                   1 360
Fair value adjustment                                                                  -               (1 026)                 (1 110)
Profit/(loss) before income tax                                                    1 966               (6 213)                (42 579)
Income tax expense                                                              (13 347)               (4 076)                 (6 335)
Loss for the period from continuing operations                                  (11 381)              (10 289)                (48 914)
Discontinued operations       
Profit/(loss) for the period from discontinued operations       
(attributable to the owners of the parent)                                         4 045              (76 739)                (77 620)
Loss on disposal of discontinued operations                                            -                     -                (11 649)
Profit/(loss) for the period from discontinued operations                          4 045              (76 739)                (89 269)
Loss for the period                                                              (7 336)              (87 028)               (138 183)
Attributable to:        
- Owners of the parent                                                            12 521              (85 982)               (120 197)
  - continuing operations                                                          8 476               (9 243)                (30 928)
  - discontinued operations                                                        4 045              (76 739)                (89 269)
- Non controlling interest                                                      (19 857)               (1 046)                (17 986)
  - continuing operations                                                       (19 857)               (1 046)                (17 986)
  - discontinued operations                                                            -                     -                       -
                                                                                 (7 336)              (87 028)               (138 183)
Weighted basic and diluted earnings/(loss) per share (cents)        
- Continuing operations                                                             0,73                (0,80)                  (2,66)
- Discontinued operations                                                           0,35                (6,60)                  (7,68)
Basic and diluted earnings/(loss) per share                                         1,08                (7,40)                 (10,34)

Shares in issue at end of the period excluding treasury        
shares ('000)                                                                  1 162 010             1 162 010               1 162 010
Weighted average shares in issue at the end of the period        
excluding treasury shares ('000)                                               1 162 010             1 162 010               1 162 010
       
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME       
For the six months ended 31 December 2017       
                                                                           Unaudited six        Unaudited six
                                                                                months -             months -       Audited year ended
R'000                                                                   31 December 2017     31 December 2016             30 June 2017
Loss for the period                                                              (7 336)             (87 028)                (138 183)
Other comprehensive loss       
Items that may be subsequently reclassified to profit or loss       
Foreign currency translation differences for foreign       
operations                                                                       (2 088)             (10 704)                  (5 274)
Other comprehensive loss for the period, net of income        
tax                                                                              (2 088)             (10 704)                  (5 274)
Total comprehensive loss for the period                                          (9 424)             (97 732)                (143 457)
       
Attributable to:       
- Owners of the parent                                                            10 433             (96 686)                (125 471)
  - continuing operations                                                          6 388             (19 947)                 (36 202)
  - discontinued operations                                                        4 045             (76 739)                 (89 269)
- Non controlling interest                                                      (19 857)              (1 046)                 (17 986)
  - continuing operations                                                       (19 857)              (1 046)                 (17 986)
  - discontinued operations                                                            -                    -                        -
       
                                                                                 (9 424)             (97 732)                (143 457)

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION  
At 31 December 2017         
                                                                                Unaudited at          Unaudited at          Audited at
R'000                                                                       31 December 2017      31 December 2016        30 June 2017
Assets                
Non-current assets                                                                   641 899               488 185             592 825
Property, plant and equipment                                                        310 915               261 596             338 520
Mining assets                                                                        165 345               156 841             155 303
Work in progress                                                                      89 275                     -              22 725
Goodwill                                                                              37 427                37 427              37 427
Restricted cash                                                                        7 230                 4 560               6 461
Other financial assets                                                                 5 439                     -               6 121
Deferred income tax assets                                                            26 268                27 761              26 268
Current assets                                                                       255 725               299 485             257 904
Inventories                                                                           19 029                25 575              18 960
Trade and other receivables                                                          200 207               242 312             202 809
Cash and cash equivalents                                                             36 489                29 799              34 271
Current income tax assets                                                                  -                 1 799               1 864
Assets of disposal group classified as held-for-sale                                       -               109 408               4 937
TOTAL ASSETS                                                                         897 624               897 078             855 666
Equity                
Total equity attributable to owners of the parent                                    250 371               268 723             239 938
Share capital                                                                      2 097 075             2 097 075           2 097 075
Reserves                                                                              78 932                75 590              81 020
Accumulated loss                                                                 (1 925 636)           (1 903 942)         (1 938 157)
Non-controlling interest                                                            (59 791)              (22 994)            (39 934)
TOTAL EQUITY                                                                         190 580               245 729             200 004
                
Liabilities               
Non-current liabilities                                                              271 563               144 547             200 273
Loans and borrowings                                                                  93 643                     -              22 484
Finance lease obligations                                                             38 129                10 902              49 934
Rehabilitation provision                                                              81 917                71 172              72 240
Deferred income tax liabilities                                                       57 874                62 473              55 615
Current liabilities                                                                  435 481               504 791             455 389
Trade and other payables                                                             196 642               257 318             206 390
Megacube arbitration award                                                            92 331                92 331              92 331
Loans and borrowings                                                                  10 350                18 827                   -
Finance lease obligations                                                             26 071                16 421              26 227
Deferred revenue                                                                           -                 5 331              12 000
Bank overdraft                                                                        45 526                68 678              65 305
Current income tax liabilities                                                        64 561                45 885              53 136
Liabilities of disposal group classified as held-for-sale                                  -                 2 011                   -
TOTAL LIABILITIES                                                                    707 044               651 349             655 662
TOTAL EQUITY AND LIABILITIES                                                         897 624               897 078             855 666
Net asset value per share (excluding treasury shares) -               
cents                                                                                     22                    23                  21
Tangible net asset value per share (excluding goodwill),                
(excluding treasury shares) - cents                                                       18                    20                  17

CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 December 2017
                                                                             Unaudited six         Unaudited six
                                                                                  months -              months -     Audited year ended
R'000                                                                     31 December 2017      31 December 2016           30 June 2017
Cash flows from operating activities            
Cash generated from/(utilised in) operating activities                              18 294                 9 367               (10 779)
Working capital changes                                                           (18 919)              (19 622)               (16 411)
Income taxes received/(paid)                                                           622               (1 442)                (5 629)
Interest paid                                                                      (7 316)               (8 131)               (17 668)
Net cash (outflow) from operating activities                                       (7 319)              (19 828)               (50 487)
Cash flow from investing activities            
Interest received                                                                      582                   396                  1 375
Purchase of property, plant and equipment                                          (7 807)              (12 237)               (98 616)
Mine development work in progress                                                 (62 988)                     -               (22 810)
Proceeds from disposal of property, plant and equipment                             29 678                53 365                 54 579
Proceeds from disposal of assets held-for-sale                                       5 633                 2 731                 97 462
Movement in other financial assets                                                   (125)                     -                      -
Increase in restricted cash                                                          (769)               (1 710)                (3 611)
Net cash (outflow)/inflow from investing activities                               (35 796)                42 545                 28 379
Cash flows from financing activities            
Proceeds from borrowings                                                            77 288                     -                 22 484
Repayment of borrowings                                                                  -              (14 679)               (33 500)
Finance lease advances                                                               1 630                10 231                 79 144
Finance lease payments                                                            (13 591)               (7 049)               (27 124)
Net cash inflow/(outflow) from financing activities                                 65 327              (11 497)                 41 004
Net increase in cash and cash equivalents                                           22 212                11 220                 18 896
Cash and cash equivalents at the beginning of the period                          (31 034)              (49 120)               (49 120)
Exchange losses on cash and cash equivalents                                         (215)                 (946)                  (810)
Cash and cash equivalents at the end of the period                                 (9 037)              (38 846)               (31 034)
Cash and cash equivalents classified as assets held-for            
sale                                                                                     -                    33                      -
Cash and cash equivalents per statement of financial            
position                                                                           (9 037)              (38 879)               (31 034)
Cash and cash equivalents at the end of the period                                 (9 037)              (38 846)               (31 034)

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 December 2017

                                                                         Foreign
                                        Share-based                     currency                                    Non-
                                 Share      payment     Treasury     translation     Accumulated             controlling
R'000                          capital      reserve       shares         reserve            loss      Total     interest   Total Equity
Balance at 30 June 2016      2 122 973       31 632     (25 898)          54 662     (1 817 960)    365 409     (21 948)        343 461
Loss for the period                  -            -            -               -        (85 982)   (85 982)      (1 046)       (87 028)
Other comprehensive loss             -            -            -        (10 704)               -   (10 704)            -       (10 704)
Balance at 31 December 2016  2 122 973       31 632     (25 898)          43 958     (1 903 942)    268 723     (22 994)        245 729
Loss for the period                  -            -            -               -        (34 215)   (34 215)     (16 940)       (51 155)
Other comprehensive income           -            -            -           5 430               -      5 430            -          5 430
Balance at 30 June 2017      2 122 973       31 632     (25 898)          49 388     (1 938 157)    239 938     (39 934)        200 004
Profit/(loss) for the period         -            -            -               -          12 521     12 521     (19 857)        (7 336)
Other comprehensive loss             -            -            -         (2 088)               -    (2 088)            -        (2 088)
Balance at 31 December 2017  2 122 973       31 632     (25 898)          47 300     (1 925 636)    250 371     (59 791)        190 580

INFORMATION ABOUT REPORTABLE SEGMENTS
The Group is organised into five operating segments, namely overburden drilling and blasting ("JEF"), mobile crane hire ("Ritchie"),
exploration drilling ("Geosearch"), anthracite mining ("Nkomati") and opencast mining and earthmoving services, as described below.
The strategic business units offer different services within the mining industry and are managed separately due to different equipment,
technology and skills requirements.

Benicon and CCT have been disclosed as discontinued operations in the opencast and earthmoving segment due to the wind-down of
these operations. Benicon Sales was disposed of on 1 January 2017 and its results for the six months ended 31 December 2016 were
included as discontinued operations in this segment. Sentula Coal is included in opencast mining and earthmoving services continued operations.

Even though Megacube is no longer operational, it has been disclosed separately due to its materiality.

Segment performance is measured based on the segment profit before interest and income tax. Inter-segment revenue is priced on an
arm's length basis.
    
                                      Opencast                Overburden                                            Corporate
                                    mining and  Exploration drilling and       Mobile   Anthracite                  and other
R'000                              earthmoving     drilling     blasting   crane hire       mining     Megacube      services       Total
Unaudited six months ended    
31 December 2017    
Total segment revenue                  261 587       70 209      176 368       54 419       27 314            -        23 481     613 378
Inter-segment revenue                        -      (1 225)            -      (1 384)            -            -      (23 481)    (26 090)
External revenue                       261 587       68 984      176 368       53 035       27 314            -             -     587 288
 - Continuing operations               261 375       68 984      176 368       53 035       27 314            -             -     587 076
 - Discontinued operations                 212            -            -            -            -            -             -         212
Total segment results                    7 463        8 288       22 347       18 218     (44 316)      (1 577)      (11 229)       (806)
Net profit on sale of assets            12 441         (25)          341            -            -            -             -      12 757
Results from operating    
activities - Continuing    
operations                              19 904        8 263       22 688       18 218     (44 316)      (1 577)      (11 229)      11 951
Total segment results                      732            -            -            -            -            -             -         732
Net profit on sale of assets             3 996            -            -            -            -            -             -       3 996
Net profit on sale of assets         
held-for-sale                             696             -            -            -            -            -             -         696
Results from operating         
activities - Discontinuing         
operations                               5 424            -            -            -            -            -             -       5 424
   

                                        Opencast               Overburden                                            Corporate
                                      mining and Exploration drilling and       Mobile   Anthracite                  and other
R'000                                earthmoving    drilling     blasting   crane hire       mining      Megacube     services      Total
Unaudited six months ended       
31 December 2017       
Segment assets                            57 735      81 393      233 127      188 446      298 308         2 244       10 103    871 356
Current and deferred tax         
assets                                         -      11 746            -            -       14 522             -            -     26 268
Total assets                              57 735      93 139      233 127      188 446      312 830         2 244       10 103    897 624
Segment liabilities                       62 398       9 620       71 132       33 857      242 016        95 078       70 508    584 609
Current and deferred tax         
liabilities                               41 152       7 135       19 752       32 709            -        17 928        3 759    122 435
Total liabilities                        103 550      16 755       90 884       66 566      242 016       113 006       74 267    707 044

                                     Opencast                Overburden                                             Corporate
                                   mining and  Exploration drilling and       Mobile      Anthracite                and other
R'000                             earthmoving     drilling     blasting   crane hire          mining    Megacube     services       Total
Unaudited six months ended 
31 December 2016 
Total segment revenue                 356 095       82 924      147 406       41 114          95 632           -       24 174     747 345
Inter-segment revenue                 (1 775)      (1 606)     (19 986)        (127)               -           -     (24 174)    (47 668)
External revenue                      354 320       81 318      127 420       40 987          95 632           -            -     699 677
 - Continuing operations              270 075       81 318      127 420       40 987          95 632           -            -     615 432
 - Discontinued operations             84 245            -            -            -               -           -            -      84 245
Total segment results                   4 506        3 162        3 994       13 215         (1 508)       1 218     (10 382)      14 205
Impairment of property, plant  
and equipment                        (11 535)            -            -            -               -           -            -    (11 535)
Net profit on sale of assets                -          115          105           65               -           -            -         285
Results from operating 
activities - Continuing  
operations                            (7 029)        3 277        4 099       13 280         (1 508)       1 218     (10 382)       2 955
Total segment results                (50 084)            -            -            -               -           -            -    (50 084)
Impairment of property, plant        
and equipment                        (27 106)            -            -            -               -           -            -    (27 106)
Impairment of assets held-for-      
sale                                  (3 258)            -            -            -               -           -            -     (3 258)
Net profit on sale of assets            2 193            -            -            -               -           -            -       2 193
Results from operating       
activities - Discontinuing       
operations                           (78 255)            -            -            -               -           -            -    (78 255)

                                     Opencast                 Overburden                                              Corporate
                                   mining and   Exploration drilling and       Mobile    Anthracite                   and other
R'000                             earthmoving      drilling     blasting   crane hire        mining       Megacube     services      Total
Unaudited six months ended
31 December 2016 
Segment assets                        120 441        85 186      188 450      156 755       194 833          7 268        5 177    758 110
Assets classified as held-for-  
sale                                   98 454             -            -            -             -              -       10 954    109 408
Current and deferred tax   
assets                                      -        11 746        1 799            -        14 644              -        1 371     29 560
Total assets                          218 895        96 932      190 249      156 755       209 477          7 268       17 502    897 078
Segment liabilities                   204 407        15 461       22 658       13 023        82 074         95 661      107 696    540 980
Liabilities classified as held-
for-sale                                    -             -            -            -             -              -        2 011      2 011
Current and deferred tax   
liabilities                            35 218         9 848       15 735       26 887             -         16 802        3 868    108 358
Total liabilities                     239 625        25 309       38 393       39 910        82 074        112 463      113 575    651 349

                                     Opencast               Overburden                                               Corporate 
                                   mining and Exploration drilling and       Mobile      Anthracite                  and other 
R'000                             earthmoving    drilling     blasting   crane hire          mining       Megacube    services       Total
Audited year ended 30 June 
2017 
Total segment revenue                 634 304     144 677      286 532       91 131         157 259              -      61 159   1 375 062
Inter-segment revenue               (153 461)     (4 566)     (34 786)        (256)               -              -    (61 159)   (254 228)
External revenue                      480 843     140 111      251 746       90 875         157 259              -           -   1 120 834
 - Continuing operations              429 278     140 111      251 746       90 875         157 259              -           -   1 069 269
 - Discontinued operations             51 565           -            -            -               -              -           -      51 565
Total segment results pre- 
impairment                           (39 318)       (545)        4 465       30 430        (44 221)        (4 575)    (18 388)    (72 152)
Impairment of property, plant, 
equipment and motor 
vehicles                             (38 641)           -            -            -               -              -           -    (38 641)
Impairment of assets held-for-     
sale                                  (3 258)           -            -            -               -              -           -     (3 258)
Net profit on sale of assets            2 617          98        1 748        (113)             303          1 405           1       6 059
Net profit on sale of assets  
held-for-sale                           9 264           -            -            -               -              -           -       9 264
Results from operating 
activities                           (69 336)       (447)        6 213       30 317        (43 918)        (3 170)    (18 387)    (98 728)
- Continuing operations                 6 456       (447)        6 213       30 317        (43 918)        (3 170)    (18 387)    (22 936)
- Discontinued operations            (75 792)           -            -            -               -              -           -    (75 792)

                                    Opencast               Overburden                                              Corporate
                                  mining and Exploration drilling and      Mobile    Anthracite                    and other
R'000                            earthmoving    drilling     blasting  crane hire        mining       Megacube      services        Total
Audited year ended 30 June  
2017  
Segment assets                        85 913      77 851      230 686     189 090       226 679            373        12 005      822 597
Assets classified as held-for-   
sale                                   4 937           -            -           -             -              -             -        4 937
Current and deferred tax 
assets                                     -      11 746        1 864           -        14 522              -             -       28 132
Total assets                          90 850      89 597      232 550     189 090       241 201            373        12 005      855 666
Segment liabilities                   93 195      12 270       81 879      40 708       138 800         95 107        84 952      546 911
Current and deferred tax 
liabilities                           37 162       8 129       14 003      27 979             -         17 688         3 790      108 751
Total liabilities                    130 357      20 399       95 882      68 687       138 800        112 795        88 742      655 662

RECONCILIATION OF HEADLINE LOSS
   
                                                Unaudited six months -           Unaudited six months -             Audited year ended -
                                                  31 December 2017                  31 December 2016                      30 June 2017
R'000                                      Continuing Discontinued Group     Continuing Discontinued Group      Continuing Discontinued Group
Profit/(loss) for the period
attributable to equity holders of the parent   8 476     4 045    12 521     (9 243)    (76 739)  (85 982)    (30 928)    (89 269)  (120 197)
Adjusted for:
Net profit on disposal of plant and
equipment                                   (12 757)   (3 996)  (16 753)       (285)       4 656     4 371     (3 230)     (1 834)    (5 064)
Profit on disposal of assets held-
for-sale                                           -     (696)     (696)           -     (6 849)   (6 849)           -     (9 264)    (9 264)
Scrapping of assets                               60         -        60           -           -         -           -           -          -
Impairment of plant and
equipment                                          -         -         -      11 535      27 106    38 641      11 535      27 106     38 641
Impairment of assets held-for-   
sale                                               -         -         -           -       3 258     3 258           -       3 258      3 258
Loss on disposal of subsidiary                     -         -         -           -           -         -           -      11 649     11 649
Tax effect on the above                        3 579         -     3 579           -           -         -         217           -        217
Non-controlling interest portion
allocation                                         -         -         -           -           -         -           -           -          -
Headline (loss)/profit attributable
to ordinary shareholders                       (642)     (647)   (1 289)       2 007    (48 568)  (46 561)    (22 406)    (58 354)   (80 760)
Weighted headline and diluted  
(loss)/earnings per share (cents)             (0,05)    (0,06)    (0,11)        0,17      (4,18)    (4,01)      (1,93)      (5,02)     (6,95)

NOTES TO THE FINANCIAL STATEMENTS

1. Basis of preparation

The unaudited condensed consolidated interim financial statements for the six months ended 31 December 2017 were prepared under
the supervision of Mr. JC Lemmer (CA) SA 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 and Financial
Pronouncements as issued by the Financial Reporting Standards Council, and the requirements of the Companies Act of South Africa and
the Listings Requirements of the JSE Limited.

The unaudited condensed consolidated interim financial statements do not include all the information and disclosures required in the
annual financial statements, and should be read in conjunction with the Group's financial statements for the year ended 30 June 2017,
which were prepared in accordance with International Financial Reporting Standards as issued by the Internal Accounting Standards Board.

The accounting standards and amendments to issued accounting standards and interpretations, which are relevant to the Group, but not
yet effective on 31 December 2017 have not been early adopted. It is expected that, where applicable, these standards and amendments
will be adopted on each respective effective date, except where specifically identified.

These results have not been audited or reviewed by the Group's auditors.

2. Accounting policies

The significant accounting policies, judgements, estimates and methods of computation are in terms of IFRS and are consistent in all
material respects with those applied in the financial statements for the year ended 30 June 2017 and are presented in South African rand,
which is the functional and presentational currency of the Group.

There have been no material changes to the items measured at fair value as disclosed in the financial statements subsequent to 30 June
2017. The directors consider that the carrying amounts of financial assets and liabilities recorded at amortised cost approximate their 
fair values.

3. Discontinued operations

Benicon Opencast and CCT were wound down in the previous financial year and the companies have been presented as discontinued
operations. Benicon Sales was disposed of on 1 January 2017 and its results for the six months ended 31 December 2016 have been
disclosed as a discontinued operation in the opencast mining segment.

Financial performance relating to these discontinued operations for the period is set out below:

                                                                     Unaudited six         Unaudited six
                                                                          months -              months -      Audited year ended
R'000                                                             31 December 2017      31 December 2016            30 June 2017
Revenue                                                                        212                84 245                  51 565
Cost of sales                                                                  258             (125 808)               (102 412)
Gross profit/(loss)                                                            470              (41 563)                (50 847)
Other income                                                                    84                   411                   1 160
Administration expenses                                                        178               (8 932)                 (6 840)
Profit/(loss) from operations                                                  732              (50 084)                (56 527)
Profit on disposal of assets                                                 3 996                     -                   1 835
Profit on disposal of assets held-for-sale                                     696                 2 193                   9 264
Impairment of property, plant and equipment                                      -              (27 106)                (27 106)
Impairment of assets held-for-sale                                               -               (3 258)                 (3 258)
Operating profit/(loss)                                                      5 424              (78 255)                (75 792)
Net finance expense                                                        (1 377)               (1 894)                 (5 238)
Profit/(loss) before taxation                                                4 047              (80 149)                (81 030)
Taxation                                                                         -                 3 410                   3 410
Profit/(loss) for the period from discontinued operations                    4 047              (76 739)                (77 620)

4. Contingent assets

Megacube

During the previous year judgment was granted in favour of the Golden Autumn Trust against Argent Industrial for payment of the sum
of R8,8 million with interest on this sum a tempore more, as well as costs of the suit. Argent was granted leave to appeal this matter on
8 May 2015. The appeal hearing date has been set for 30 July 2018. Any funds recovered through the Golden Autumn Trust, net of costs,
will be paid over to Megacube.

Nkomati

Nkomati is claiming R25 million from the previous opencast mining contractor due to non-performance in terms of the contract. A dispute
has been lodged for arbitration commencing during March 2018.

Scharrighuisen
Megacube and the Trustees of the insolvent estate of Mr C Scharrighuisen, a former director, have instituted legal proceedings against
Mr Scharrighuisen and related parties in the Netherlands, the British Virgin Islands and Curacao in ongoing attempts to locate and secure
Mr Scharrighuisen's assets. Megacube currently has two judgements against Mr Scharrighuisen's in excess of R 383 million, both of which
remain unsatisfied. The quantum of funds that can be recovered through the legal proceedings have not been determined.

To the best of our knowledge and belief there are no other contingent assets not set out or referred to in this report which may materially
affect the financial position of the Group.

5. Contingent liabilities

Keaton sought, in one of its claims in the arbitration, compensation for the value of run of mine coal allegedly not extracted amounting
to R39.5 million based on 386 592 tons. As an alternative to this claim Keaton claimed an amount of R48.6 million in respect of the cost
to remove the overburden above the coal allegedly not extracted. The higher amount of R48.6 million was provided for.

However, the arbitrator awarded Keaton tonnage substantially in excess of what it sought, namely for 657 583 tons run of mine coal
allegedly not extracted. The additional 270 991 tons of run of mine coal awarded under this claim, equates to an estimated value of
R45 million and was not provided for. The duplicated award is under dispute and as a result, no further provision has been made above
the compensation originally sought by Keaton.

Apart from the matter set out above, there are no other contingent liabilities not set out or referred to in this report which may materially
affect the financial position of the Group.

8. Events after the reporting period

The directors are not aware of any subsequent events that occurred between the reporting period and up to the date of this report, not
otherwise dealt within this report.

9. Going concern

The financial statements have been prepared on the going concern basis. The basis presumes that funds will be available to finance future
operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the
ordinary course of business. The Group's current liabilities exceed current assets by R180 million (June 2017: R197 million). Net current
liabilities relating to discontinued opencast mining operations and Megacube amounts to R158 million (June 2017: R 159 million). There
is no recourse to Unicorn or any of the other operating subsidiaries for these amounts outstanding. Although the current liabilities of the
Group exceed its current assets, due to the nature of these liabilities the directors have every reason to believe that funds will be available
to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will
occur in the ordinary course of business. Based on Unicorn subsidiaries' cash flow forecasts for the 2018 financial year, the Group is
expected to meet all its obligations during this period.

Directors: RB Patmore* (Chairman), JC Badenhorst (Chief Executive Officer), JC Lemmer (Financial Director), DR Zihlangu*, SP Naudé*,
ME Gama*, T de Bruyn#
*Independent non-executive #Non-executive

This report contains forward-looking statements which are not historical facts. Forward-looking statements involve inherent risks,
uncertainties and assumptions, including, without limitation, risks related to the timing or ultimate completion of any proposed
transactions; and the possibility that benefits may not materialise or such assumptions prove incorrect. Actual results could differ
materially from those expressed or implied by such forward-looking statements and assumptions. The forward-looking statements in this
report are made as of the date of this report and Unicorn expressly disclaims any obligations to update or correct the statements due to
events occurring after issuing this report.

Company Secretary: Arbor Capital Proprietary Limited

Transfer secretaries: Computershare Investor Services Proprietary Limited
2nd Floor, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196.
PO Box 61051, Marshalltown 2107. Tel (011) 370-5000

Sponsor: Questco Corporate Advisory Proprietary Limited
Auditor: PricewaterhouseCoopers Inc.

Registered address: Ground Floor, Building 14, Woodlands Office Park, Woodmead, 2080
PO Box 76, Woodmead, 2080 • Tel (011) 656-1303
www.unicorncapital.co.za

Abbreviations: ("Argent") Argent Industrial Limited; ("Benicon") Benicon Opencast Mining Proprietary Limited; ("CCT") Classic Challenge
Trading Proprietary Limited; ("Geosearch") Companies in the Group that performs exploration drilling services; ("IDC") Industrial
Development Corporation; ("JEF") JEF Drill and Blast Proprietary Limited; ("Keaton"): Keaton Mining Proprietary Limited ("Megacube")
Megacube Proprietary Limited; ("Nkomati") Nkomati Anthracite Proprietary Limited; ("Ritchie") Ritchie Crane Hire Proprietary Limited;
("Sentula Coal") Sentula Coal Proprietary Limited; ("the Group") Unicorn Capital Partners Limited, its subsidiaries associates and affiliates;
("Benicon Sales") Benicon Sales Proprietary Limited.



Date: 28/03/2018 05:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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