Wrap Text
Audited provisional summarised results for the 11 month period ended 28 February 2018
Long4Life Limited
("L4L", "the group", or "the company")
Incorporated in the Republic of South Africa
Registration number: 2016/216015/06
Share code: L4L
ISIN: ZAE000243119
AUDITED PROVISIONAL SUMMARISED RESULTS FOR THE ELEVEN MONTH PERIOD ENDED 28 FEBRUARY 2018
HIGHLIGHTS
- Successfully listed on the JSE on 7 April 2017: R2 billion capital raised
- Acquisitions of Sportsmans Warehouse, Outdoor Warehouse and Performance Brands (housed within previously
listed Holdsport Limited), Sorbet, and Inhle Beverages, as well as Chill Beverages (post
period end)
- Decentralised operating structure implemented
- Reported results include trading results of acquired companies for a four month period
while interest earned on capital raised pursuant to the listing, net of corporate expenses, is
for the full eleven months
- Strong balance sheet with R1,7 billion in cash
- Well-resourced to continue pursuit of growth opportunities including additional acquisitions
- Maiden dividend of 5.40 cents declared
COMMENTARY
Long4Life Limited ("L4L", "the Company" or "the group") was listed on the JSE Limited on 7 April 2017. On
listing, 405 million shares were issued with R2 billion of capital raised, after which L4L commenced
its activities as an investment company.
The focus since listing has been on the constitution of the board and bringing together an executive
team that has a proven entrepreneurial business record and operating philosophy. Subsequent
thereto, foundation assets primarily in the leisure and lifestyle sector, were targeted and acquired.
In aggregate, roughly 484 million L4L shares were issued and cash of the R436 million paid pursuant
to these acquisitions.
FINANCIAL OVERVIEW
The group's revenue for the period ended 28 February 2018, generated from the acquired
assets for a four-month period, amounted to R730.66 million. Operating profit generated totalled
R117.04 million, while interest earned on cash balances, which totalled R1.7 billion at the end of the
period, amounted to R128.48 million. Basic earnings attributable to shareholders of the Company
amounted to R168.95 million with headline earnings at R170.39 million. Based on 564,066,872
weighted average number of outstanding shares in issue, this translated into basic earnings and
headline earnings of 30.0 cents and 30.2 cents, respectively.
ACQUISITIONS
During the period under review, the Company acquired Sportsmans Warehouse, Outdoor
Warehouse and Performance Brands (housed within previously listed Holdsport Limited), Sorbet
and Inhle Beverages, while Chill Beverages has been acquired post period end. The businesses were
acquired on the basis of them generating approximately R540 million EBITDA creating a
significant platform for growth. These acquisitions have been decentralised into the group's
divisional structures of Sport and Recreation, Personal Care and Wellness, and Beverages.
BBBEE AND VENTURE CAPITAL INITIATIVES
BBBEE
L4L is committed to enhancing black economic empowerment and participation, and to this
end is currently negotiating the introduction of additional BBBEE shareholders. If successfully
implemented, it is anticipated that this will increase effective BBBEE ownership in L4L to
approximately 20%. This, together with addressing other elements of BBBEE across the group's
operating companies, is expected to yield meaningful benefits for the Company and all affected
stakeholders alike.
Venture Capital
The L4L board recently approved the allocation of R100 million to venture capital opportunities.
The fund will provide seed-funding in selected opportunities aimed at enhancing our vision in
leisure and lifestyle. Additionally, this will assist in the development of South Africa's vast collective
of emerging entrepreneurs, by supporting individuals and small- to medium-sized companies in
the pursuit of their respective endeavours of bringing products and services to market. An early
investment for the fund is the acquisition of a 49% stake in lifestyle footwear company, Veldskoen
Shoes. This company owns the iconic Veldskoen and Plakkies trademarks and operates the website
www.veldskoen.shoes.
PROSPECTS
As the South African economy transforms further under its new political leadership, and even
though the full extent and benefit of these changes is still to materialise, L4L is ideally positioned
to take advantage of the opportunities that will result. This relates not only to the current portfolio
of assets that have the capability of expansion and an ability to enhance efficiencies to adapt to
current market circumstances, but also to pursue other value enhancing businesses. The executive
team's entrepreneurial flair, the Company's balance sheet strength, access to an appropriate
transactional pipeline as well as a wide spectrum of investors, are all catalysts for its ongoing yet
diligent assessment of organic and acquisitive possibilities.
The Company's overriding objectives continue to be expansion at a pragmatic rate and delivering
above-average growth. This will be achieved by ensuring quality operating earnings from strong
cash generating businesses and acquisitions with appropriately assessed risk characteristics.
OPERATIONAL REVIEW
Introduction
L4L has a small corporate office with a skilled and experienced team. The group's emphasis on
decentralisation of operations and management responsibility is complemented by strategic and
financial input, guidance and support to the management teams within the various structures.
These teams carry responsibility and accountability for the day-to-day operation of their respective
businesses and are required to focus on being disciplined in the deployment of capital, while being
ambitious on returns.
L4L's acquired businesses have performed in line with expectations and have been positioned
for growth. The companies are primarily wholly owned, which enables the full benefit of cash
flows. Management is currently focused on numerous opportunities that exist to leverage off the
foundation of these assets, including the extension of existing products and services, expanding the
geographic footprint, as well as through complementary and bolt-on acquisitions.
Sport and Recreation Division
The acquisition of Sportsmans Warehouse, Outdoor Warehouse and Performance Brands
(all previously held under the Holdsport company structure) has been transformational for L4L.
It has added substance and scale while presenting considerable opportunity over and above the
existing product and service offering that was already firmly established at the time of purchase.
Sportsmans Warehouse: This is a complete sports concept with a three-decade legacy that
differentiates from other retailers in terms of its breadth and depth of offering. It provides
sporting equipment and apparel, including "athleisure", and sources brands from international
principals, as well as from its Performance Brands unit. Although it already boasts a vast national
base, there is a cautious approach to expanding the footprint further, simultaneously remaining
focused on ensuring superior returns and maximising sales per square metre. Examples of the
latter are two newly-designed stores that recently opened, which are smaller in size, still offering a
comprehensive product range and the same exemplary in-store experience. Trading over the period
was in line with expectation.
Outdoor Warehouse: This unique offering was also established 30 years ago and remains focused
on the outdoor apparel and equipment market with an offering that has been successfully evolving,
including the range of offerings, in-store services, and specialist advice. Despite a tough market
environment, Outdoor Warehouse has been trading above expectation. It is entrenched as a
destination business, where considerable opportunity exists, and has embarked on a positioning
process aimed at enhancing the look and feel of the stores.
Performance Brands: The division's Performance Brands, specifically, First Ascent, Cape Storm,
Second Skins and African Nature are well-established in the market. A mix of internal sales as well
as to external clients, such as corporate entities, schools, and game lodges in South and southern
Africa, have been gaining momentum. Exciting prospects are evident with the unit performing well
and showing signs of good market acceptance and growth.
Online: The division's fledgling e-commerce strategy is an important component that complements
the in-store experience. Progress has been good, albeit coming off a low-base, but the potential is
evident for robust future sales and profitability. The recently-launched rewards programme is also
showing good signs of acceptance, which offers another compelling opportunity. Additionally, the
e-commerce learnings, techniques and applications for other L4L divisions are significant.
Personal Care and Wellness Division
Sorbet: Sorbet was acquired to form the basis for the group's foray into the wellness, health and
beauty sector, which has the potential for significant expansion through acquisition and bolt-on
opportunities. Sorbet's highly recognised and respected brand, its national footprint and proven
business model, have enabled the business to grow sustainably over the last few years. Satisfactory
same-store growth is being achieved with new openings boosting overall revenue. With close on
200 stores run by a carefully selected group of franchisees, the full extent and leverage of Sorbet's
offering, new products and ongoing initiatives is still to be derived. Additionally, meaningful benefits
are anticipated through planned refinements to the supply chain and improved efficiencies in
several areas of the business.
Beverages Division
L4L's first acquisition in this division was Inhle Beverages (Inhle), this subsequently having been
complemented by the acquisition (post period end) of Chill Beverages (Chill).
Inhle: Inhle, based near Heidelberg in Gauteng, is a beverage contract packaging (co-packaging)
business that has the potential for strong growth and development. Inhle specialises in the canning
and bottling of energy drinks and natural mineral water using cans and polyethylene terephthalate
(PET). Direct access to the largest market in the country as well as its proximity to surrounding
territories, positions Inhle extremely well from an expansionary point of view. This is augmented
by the recently secured liquor licence (for packaging purposes) which represents an additional
industry opportunity.
Chill: Chill, based in the Western Cape, is a leading producer, packer and distributor of a range of
beverages with storage and distribution facilities located in major cities across South Africa. Chill
provides a fully integrated in-house business platform from product conception and development,
through production, to sales and marketing, in addition to providing co-packing services to a
number of market leading entities. Chill owns a portfolio of recognised brands, including Score
Energy, Fitch & Leedes, Bashews and Country Club, amongst others.
Through the acquisition of both Inhle and Chill, L4L has manged to accelerate its entrée into the
beverage industry. The various synergies that exist and which can be brought to bear between
these complementary businesses, coupled with a broader national coverage afforded by their
respective operational locations, presents exciting opportunities for L4L to enhance its presence in
the growing South African beverage space. L4L sees this as an important and essential component
of its chosen area of focus, namely the lifestyle, wellness and leisure sector.
DIVIDENDS
The board has declared a maiden dividend gross of 5.40 cents per ordinary share in respect of the
period ended 28 February 2018. The dividend is based on earnings from the group's businesses for
the four months since acquisition, net of acquisition and corporate costs incurred for the full
eleven months to 28 February 2018.
The dividend has been declared out of income reserves as defined in the Income Tax Act. Where
applicable, the dividend will be subject to South African dividends withholding tax at a rate of
20% which will result in a net dividend of 4.32 cents per share payable to those shareholders who
are not exempt from paying dividends withholding tax.
The number of ordinary shares in issue as at the date of this declaration is 911,728,057 and the
company’s tax reference number is 9745546169.
The salient dates relating to the payment of the dividend are as follows:
Last day to trade cum dividend: Tuesday, 29 May 2018
Shares commence trading ex dividend: Wednesday, 30 May 2018
Record date: Friday, 1 June 2018
Payment date: Monday, 4 June 2018
Share certificates may not be dematerialised or rematerialised between Wednesday, 30 May 2018
and Friday, 1 June 2018, both days inclusive.
Signed on behalf of the board
Brian Joffe Peter Riskowitz
Chief executive officer Chief financial officer
Johannesburg, South Africa
8 May 2018
SUMMARISED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
for the period ended 28 February 2018
Audited Audited
11 months 9 months
2018 2017
Note R'000 R'000
Revenue 730 661 -
Cost of sales (312 131) -
Gross profit 418 530 -
Operating expenses (286 797) (130)
Other income 15 717 -
Trading profit (loss) 147 450 (130)
Share-based payment expense (12 100) -
Acquisition costs (16 839) -
Net capital items 2 (1 469) -
Operating profit (loss) 117 042 (130)
Net finance income 122 298 -
Finance income 128 481 -
Finance charges (6 183) -
Profit (loss) before taxation 239 340 (130)
Taxation (69 680) -
Profit (loss) for the period 169 660 (130)
Attributable to
Shareholders of the Company 168 948 (130)
Non-controlling interests 712 -
169 660 (130)
Basic earnings (loss) per share (cents) 30,0 (130)
Diluted basic earnings (loss) per share (cents) 29,6 (130)
Headline earnings (loss) per share (cents) 2 30,2 (130)
Diluted headline (loss) earnings per share (cents) 29,8 (130)
SUMMARISED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
for the period ended 28 February 2018
Audited Audited
11 months 9 months
2018 2017
R'000 R'000
Profit (loss) for the period 169 660 (130)
Other comprehensive income net of taxation
Items that may be reclassified subsequently to profit and loss
Exchange differences on translating foreign operations (393) -
Total comprehensive income (loss) for the period 169 267 (130)
Attributable to
Shareholders of the Company 169 061 (130)
Non-controlling interest 206 -
169 267 (130)
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 28 February 2018
Audited Audited
2018 2017
Note R'000 R'000
Assets
Non-current assets 2 800 362 -
Property, plant and equipment 198 955 -
Intangible assets 644 127 -
Deferred taxation assets 6 692 -
Goodwill 1 927 606 -
Investments 5 22 982 -
Current assets 2 344 015 *
Inventories 580 363 -
Trade and other receivables 66 642 -
Cash and cash equivalents 1 691 662 *
Taxation receivable 5 348 -
Total assets 5 144 377 *
Equity and liabilities
Capital and reserves 4 523 863 (18 893)
Stated capital 4 4 339 723 (18 893)
Reserves attributable to shareholders of the company 163 361
Non-controlling interests 20 779 -
Non-current liabilities 257 089 -
Deferred taxation liabilities 159 610 -
Long-term provisions 2 126 -
Other financial liability 5 48 000 -
Long-term portion of straight-lining of leases 47 353 -
Current liabilities 363 425 18 893
Trade and other payables 200 377 18 893
Taxation 2 710 -
Borrowings 160 338 -
Total equity and liabilities 5 144 377 *
Net asset (deficit) value per share attributable to
shareholders of the company (cents) 506 (18 893 000)
* Amount below R1 000
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
for the period ended 28 February 2018
Audited Audited
11 months 9 months
2018 2017
Note R'000 R'000
Cash flows from operating activities 200 135 -
Cash generated by operations 151 702 -
Finance income received 128 481 -
Finance charges paid (6 183) -
Taxation paid (73 865) -
Cash effects of investment activities (489 878) -
Investments acquired (64 927) -
Additions to property, plant and equipment (41 234) -
Additions to intangible assets (58) -
Proceeds on disposal of property, plant and equipment 15 650 -
Net cash outflow on acquisition of subsidiaries 3 (399 309) -
Cash effects of financing activities 1 981 411 -
Capital raised on listing 2 000 000 -
Borrowings repaid (17 850) -
Dividends paid to non-controlling interests (739) -
Net increase in cash and cash equivalents 1 691 668 -
Cash and cash equivalents at beginning of period * *
Effects of exchange rate fluctuations on cash
and cash equivalents (6) -
Cash and cash equivalents at end of period 1 691 662 *
* Amount below R1 000
SUMMARISED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
for the period ended 28 February 2018
Audited Audited
2018 2017
Note R'000 R'000
Equity attributable to shareholders of the company 4 503 084 (18 893)
Stated capital 4 4 339 723 *
Balance at beginning of the period - *
Shares issued during the period 4 339 723 -
Transactional costs for issuing equity instruments (20 435) (18 763)
Balance at beginning of the period (18 763) -
Transaction costs incurred (1 672) (18 763)
Foreign currency translation reserve (393) -
Balance at beginning of the period - -
Exchange differences on translating foreign operations (393) -
Equity-settled share-based payment reserve 15 371 -
Balance at beginning of the period - -
Recognition of share-based payments 12 100 -
Deferred taxation recognised directly in reserve 3 271 -
Retained earnings (loss) 168 818 (130)
Balance at beginning of the period (130) -
Profit for the period 168 948 (130)
Equity attributable to non-controlling interests of the
company 20 779 -
Balance at beginning of the period - -
Other comprehensive income 206 -
Profit for the period 712 -
Exchange differences on translating foreign operations (506) -
Dividends paid (739) -
Arising on acquisition of subsidiaries 21 312 -
Total equity 4 523 863 (18 893)
* Amount below R1 000
NOTES TO THE SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION AND ACCOUNTING POLICIES
These summarised consolidated financial statements have been prepared in accordance
with the framework concepts and the measurement and recognition requirements of International
Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council, and includes, at a minimum, disclosure as required by IAS 34 Interim
Financial Reporting, the Companies Act of South Africa and the JSE Listings Requirements. Selected
explanatory notes are included to explain events and transactions that are significant to an
understanding of the group's financial position and performance.
The accounting policies applied in these summarised consolidated financial statements
are in terms of IFRS and, where applicable, are consistent with those applied in the
consolidated financial statements for the period ended 31 March 2017. During the period additional
accounting policies, where required, were adopted.
These summarised consolidated financial statements are extracted from the audited consolidated
financial statements. The directors take full responsibility for the preparation of the financial
results and confirm that the financial information and related commentary has been correctly
extracted from the underlying audited consolidated financial statements.
PREPARER OF THE SUMMARISED PROVISIONAL CONSOLIDATED FINANCIAL STATEMENTS
The summarised and consolidated financial statements have been prepared by Sarah Bishop CA(SA)
(group financial manager) under the supervision of Peter Riskowitz CA(SA) (chief financial officer)
and were approved by the board of directors on 8 May 2018.
REPORT OF THE INDEPENDENT AUDITORS
The auditors, Deloitte & Touche, have issued their opinion on the consolidated financial statements
for the 11 month period ended 28 February 2018. The audit was conducted in accordance with
International Standards on Auditing. They have issued an unmodified opinion.
A copy of the auditor's report together with a copy of the audited consolidated financial statements
are available for inspection at the company's registered office.
These summarised consolidated financial statements have been derived from the consolidated
financial statements and are consistent in all material respects with the consolidated
financial statements. These summarised consolidated financial statements have been audited by
the company's auditors who have issued an unmodified opinion. The auditor's report does not
necessarily report on all of the information contained in this announcement.
Shareholders are advised, that in order to obtain a full understanding of the
nature of the auditor's engagement they should obtain a copy of that report together with the
accompanying financial information from the company's registered office. Any reference to
future financial information included in this announcement has not been reviewed or reported
on by the auditors.
EVENTS AFTER THE REPORTING PERIOD
L4L acquired 100% of the issued share capital of Chill Holdings (Pty) Ltd ("Chill") effective on
1 March 2018 for a consideration settled in a combination of cash and shares of R 476 million.
A contingent consideration remains payable based on the outcome of the audited 30 June 2018
EBITDA, refer to the SENS released on 28 Novemeber 2018 available on the L4L website at
www.long4life.co.za. Management is still in the process of completing the initial allocation of
goodwill acquired.
The board approved a R100 million venture capital fund on 8 May 2018 aimed at investing in, and
supporting, individual entrepreneurs and small- to medium-sized companies to pursue and realise
their respective visions of bringing products and services to market. An early investment for the
fund was the acquisition of a 49% stake in lifestyle footwear company Veldskoen Shoes (Pty) Ltd
(Veldskoen). Veldskoen owns the iconic Veldskoen and Plakkies trademarks.
Other than the above, no other material events have occurred between the reporting date up to the
date of the financial statements.
CHANGE IN FINANCIAL YEAR-END AND COMPARATIVE FIGURES
The Company changed its financial year end from the end of March to the end of February, to align
with that of its largest investee company. It is noted that the Company was, for all intents and
purposes, dormant as at 31 March 2017, and accordingly the financial information presented is not
meaningful from a comparative point of view.
CHANGE IN DIRECTORATE
During the period Kevin Hedderwick and Jason Joffe resigned from the board on 6 October 2017
and 7 December 2017, respectively.
Syd Muller and Keneilwe Moloko were appointed as independent non-executive directors of the
group with effect from 24 October 2017 and 1 November 2017, respectively. On 1 January 2018,
Colin Datnow's status as a non-executive changed to that of full time executive director.
SEGMENTAL REPORT
Audited Audited
11 months 9 months
2018 2017
R'000 R'000
Having acquired various businesses during the period,
the group has the following reportable segments: sport
and recreation, personal care and wellness, beverages and
corporate.
Operating segments are identified based on the nature of the
underlying businesses and on the same basis that financial
information is reported internally for the purpose of
allocating resources between segments and assessing their
performance by the group's chief operating decision maker,
defined as the group executive committee. Reportable segments
have been identified after applying the quantitative thresholds
per IFRS 8: Operating Segments, and after aggregating
operating segments with similar economic characteristics.
Segmental revenue
Trading operation 730 661 -
Sport and recreation 637 508 -
Personal care and wellness 32 769 -
Beverages 60 384 -
Segmental operating profit/(loss)
Trading operation 164 604 -
Sport and recreation 133 722 -
Personal care and wellness 8 261 -
Beverages 22 621 -
Corporate (47 562) (130)
Operating profit 117 042
Net finance income 122 298 -
Profit before tax 239 340 -
Segmental assets and liabilities
Segmental assets
Trading operation 4 167 907 -
Sport and recreation 3 962 188 -
Personal care and wellness 104 573 -
Beverages 101 146 -
Corporate 5 095 365 -
9 263 272
Inter-group loan eliminations (4 118 895) -
Total assets 5 144 377 -
Segmental liabilities
Trading operation 3 034 633 -
Sport and recreation 2 968 997 -
Personal care and wellness 39 225 -
Beverages 26 411 -
Corporate 1 704 776 18 893
4 739 409 18 893
Inter-group loan eliminations (4 118 895) -
Total liabilities 620 514 18 893
Headline earnings (loss) per share
Profit (loss) attributable to shareholders of the company 168 948 (130)
Adjusted for:
Loss on disposal of property, plant and equipment 105 -
Impairment of associate 1 364 -
Tax effects (29) -
Headline earnings 170 388 (130)
Weighted average number of shares in issue ('000) 564 067 *
Headline earnings (loss) per share (cents) 30.2 (130)
*Amount below R 1 000
ACQUISITION OF SUBSIDIARIES
L4L acquired 100% of Holdsport, Sorbet and Inhle during the financial period. The
effective date of each of these transactions was 1 November 2017 and were funded through
a combination of cash and shares. Goodwill arose on the acquisitions as the anticipated
value to the group exceeded the fair value of the net assets acquired.The consideration
paid for the business combinations effectively included amounts in relation to the benefit
of revenue growth and future market development of Holdsport, Sorbet and Inhle. These
benefits are not recognised separately from goodwill because they do not meet the
recognition criteria for identifiable intangible assets. The acquisitions have enabled
the group to establish its presence in the lifestyle sector and as a consequence, has
broadened the group’s base in the marketplace.
Audited Audited
2018 2017
Holdsport Sorbet Inhle Total
R'000 R'000 R'000 R'000 R'000
Fair value of tangible assets/
(liabilities) acquired
Property, plant equipment 145 585 7 981 43 208 196 774 -
Trademarks 563 900 80 630 - 644 530 -
Other intangible assets - 45 - 45 -
Investments 92 790 - - 92 790 -
Inventories 598 381 5 812 5 341 609 534 -
Trade and other receivables 41 782 9 716 16 136 67 634 -
Cash and cash equivalents 12 139 (5 294) 41 511 48 356 -
Straight lining of leases (44 676) (465) - (45 141) -
Borrowings (160 000) (331) (18 538) (178 869) -
Put option liability (48 000) - - (48 000) -
Trade and other payables (180 017) (27 954) (15 651) (223 622) -
Provisions - (136) (2 000) (2 136) -
Deferred taxation (140 256) (17 679) (4 043) (161 978) -
Taxation 12 067 52 (7 878) 4 241 -
Net assets acquired 893 695 52 377 58 086 1 004 158 -
Consideration transferred
Cash 181 613 39 820 214 848 436 281 -
Issue of shares 2 203 907 75 150 56 916 2 335 973 -
Fair value of previously held
interest 45 408 - - 45 408 -
Inter-group loan 92 790 - - 92 790 -
2 523 718 114 970 271 764 2 910 452
Plus: Non-controlling interest
measured at their share of fair
value of net assets 6 355 14 957 - 21 312 -
Less: Fair value of identifiable
net assets acquired (893 695) (52 377) (58 086) (1 004 158) -
Goodwill arising at acquisition 1 636 378 77 550 213 678 1 927 606 -
Consideration paid in cash (181 613) (39 820) (214 848) (436 281) -
Overdraft/(cash) acquired 12 139 (5 294) 41 511 48 356 -
Costs incurred in respect
of acquisitions (8 269) (1 703) (1 412) (11 384) -
Net cash outflow on
acquisition of subsidiaries (177 743) (46 817) (174 749) (399 309) -
Contribution to results
for the period
Revenue 637 508 32 769 60 384 730 661 -
Operating profit 133 722 8 261 22 621 164 604 -
Had these acquisitions been effective from 1 April 2017, the revenue of the group would have
been R2.1 billion and the profit before taxation would have been R 407.6 million for period ended
28 February 2018. The directors consider this to represent an approximate measure of the
performance of the combined group for the full eleven months. In determining the profit before
taxation on this basis the directors have excluded once-off pre-acquisition costs not associated with
ordinary operating activities.
Stated capital
Audited Audited
2018 2017
R'000 R'000
Balance at beginning of the period * *
Shares issued pursuant to listing on the JSE 2 000 000 -
Shares issued for business acquisitions 2 335 973 -
Shares issued for executive remuneration 3 750 -
Balance at the end of the period 4 339 723 *
*Amount below R 1 000
Authorised
4 000 000 000 ordinary shares of no par value (2017: 4 000 000 000 ordinary shares of no par value)
Issued
889 775 767 ordinary shares of no par value (2017: 100 ordinary shares of no par value)
Stated capital and treasury shares
No par value ordinary shares are classified as equity. Incremental costs directly attributable to
the issuance of new no par value ordinary shares are deducted against the stated capital account.
Shares in the company, held by its subsidiary, are classified as treasury shares. These shares are
treated as a deduction from the issued and weighted average number of shares. The cost price of the
treasury shares is presented as a deduction from total equity. Distributions received on treasury
shares are eliminated on consolidation.
FINANCIAL INSTRUMENTS
When measuring the fair value of an asset or a liability, the group uses market observable data as
far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the
inputs used in the valuation techniques categorised as follows:
Level 1: Measured using unadjusted, quoted prices in an active market for identical financial
instruments.
Level 2: Valued using techniques based significantly on observable market data. Instruments in
this category are valued using:
(a) Quoted prices for similar instruments or identical instruments in markets which
are not considered to be active, or
(b) Valuation techniques where all the inputs that have a significant effect on the
valuation are directly or indirectly based on observable market data.
Level 3: Valued using valuation techniques that incorporate information other than observable
market data and where at least one input (which could have a significant effect on
instruments' valuation) cannot be based on observable market data.
The following table shows the carrying amounts and fair values of financial assets and financial
liabilities, including their levels in the fair value hierarchy for financial instruments measured at
fair value. It does not include fair value information for financial assets and financial liabilities not
measured at fair value if the carrying amount is a reasonable approximation of fair value.
Carrying Current 1 -2 2 - 5 More than
Level amount year years years 5 years
R'000 R'000 R'000 R'000 R'000
At 28 February 2018
At fair value
Financial assets
Investments
- Listed held-for-trading 1 22 982 22 982 - - -
Financial liabilities
Foreign exchange contracts 1 (5 334) (5 334) - - -
Other financial liability -
NCI put option 3 (48 000) - (23 721) (24 279) -
Total (53 334) (5 334) (23 721) (24 279) -
Valuation technique
The value of the put option liability was determined using a profit multiple designed to approximate
the fair value of the shares of the non-controlling interest's (NCI's) proportionate share of the profit after
tax for the period ending 28 February 2018, discounted using a risk-adjusted discount rate.
Significant unobservable inputs
Profit after tax growth rates 25% to 32%
Profit after tax multiple 9.0 to 9.5
Risk-adjusted discount rate 16%
Inter-relationship between significant unobservable inputs and fair value measurement
The estimated fair value would increase (decrease) if:
- the Profit after tax were higher (lower); or
- the risk-adjusted discount rate were lower (higher)
Capital commitments
Audited Audited
2018 2017
R'000 R'000
Capital expenditure approved:
Contracted for 17 500 -
Not contracted for 89 700 -
107 200 -
Capital expenditure is in respect of property, plant and equipment. It is anticipated that
capital expenditure will be financed out of existing cash resources.
ADMINISTRATION
DIRECTORS
Independent non-executive directors
Graham Dempster (Chairman)
Lionel Jacobs
Keneilwe Moloko
Syd Muller
Tasneem Abdool-Samad
Executive directors
Brian Joffe (Chief executive officer)
Peter Riskowitz (Chief financial officer)
Colin Datnow
COMPANY SECRETARY
Marlene Klopper
CORPORATE INFORMATION
Long4Life Limited Independent auditors
("L4L", "the group", or "the company") Deloitte & Touche
Incorporated in the Republic of South Africa Practice number: 902276
Registration number: 2016/216015/06 Deloitte Place, The Woodlands
Share code: L4L 20 Woodlands Drive, Woodmead, Sandton,
ISIN: ZAE000243119 2193
Private Bag X6, Gallo Manor, 2052
Transfer secretaries
Computershare Investor Services Registered office
Proprietary Limited 7th Floor, Rosebank Towers
Registration number: 2004/003647/07 13-15 Biermann Avenue
1st Floor, Rosebank Towers Rosebank, Johannesburg, 2196
13-15 Biermann Avenue Box 521870, Saxonwold, 2132
Rosebank, Johannesburg, 2196
PO Box 61051, Marshalltown, 2107 Further information regarding our group can
Telephone +27 (11) 370 5000 be found on the Long4Life website:
Sponsor www.long4life.co.za
The Standard Bank of South Africa Limited
30 Baker Street, Rosebank
South Africa, 2196
www.long4life.co.za
Johannesburg
09 May 2018
Date: 09/05/2018 07:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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