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enX GROUP LIMITED - Summarised preliminary consolidated financial results

Release Date: 29/10/2018 07:30
Code(s): ENX     PDF:  
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Summarised preliminary consolidated financial results

enX GROUP LIMITED 
(Incorporated in the Republic of South Africa) 
(Registration number 2001/029771/06) 
JSE share code: ENX    ISIN: ZAE000222253
("enX" or "the Group")

SUMMARISED PRELIMINARY CONSOLIDATED FINANCIAL RESULTS
for the year ended 31 August 2018

Revenue
UP 7.4 billion
(2017: R6.2 billion)

Operating profit
UP R741 million
(2017: R673 million)

Adjusted HEPS
UP 188.5 cps
(2017: 181.2 cps)

Obtained a zaA- credit
rating from S&P Global
Ratings

eXtract unbundled
and R250 million loan
repayment received
in full

NATURE OF BUSINESS
enX is a diversified industrial Group that provides quality branded industrial equipment, petrochemical,
fleet management and logistics products and related services.

enX is organised into three business segments as follows:
-    enX Equipment ("Equipment"):
     -   enX Industrial Equipment ("EIE") provides distribution, rental and value added services for
         industrial and materials handling equipment in South Africa, other African countries and
         the United Kingdom and Ireland ("UK"). EIE in South Africa is the market leader in materials
         handling and the sole distributor of Toyota Forklifts, BT warehousing equipment, Konecranes
         heavy duty forklifts and container handling equipment, Terberg Terminal Tractors, Hawker
         batteries and chargers, Hako Industrial cleaning equipment and Fassi truck mounted cranes in
         sub-Saharan Africa. Its UK operation, Impact, is the exclusive distributor for Cat Lift Trucks and
         Konecranes heavy duty forklifts and container handling equipment in the UK.
     -   Power comprise New Way Power which manufactures, installs and maintains diesel generators
         as well as provides temporary power through Genmatics. The business also distributes a range
         of industrial and marine engines and components through Power O2 which is the sole distributor
         of John Deere and Mitsubishi industrial engines in South Africa; and
     -   Wood trades through Austro, which distribute professional woodworking equipment, tooling,
         edging and the provision of associated services such as blade sharpening and equipment
         maintenance. It is the sole distributor of Biesse equipment and Leitz tooling in South Africa.

-    enX Fleet ("Fleet"):
     -   The Eqstra Fleet Management and Logistics business ("EFML" or "Eqstra") provides a full
         spectrum of passenger vehicle services including leasing, fleet management, outsourcing
         solutions, maintenance, warranty management and vehicle tracking solutions. It also provides
         fleet management solutions for commercial vehicle fleet owners and logistics solutions.
         Its footprint is South Africa and sub-Saharan Africa. Eqstra's commercial vehicle operations are
         supported by a nationwide network of workshops and panel repair shops.

-    enX Petrochemicals ("Petrochemicals"):
     -   Centlube and African Group Lubricants ("AGL") produce and market oil lubricants and greases
         in South Africa and sub-Saharan Africa. They are the sole distributors of ExxonMobil lubricants
         (excluding marine and aviation) and Houghton International's Advanced Fluids Solutions
         and Services.
     -   West African International ("WAI") and enX Polymers distribute plastics, polymers, rubber
         and speciality chemicals into Southern African. They are the sole agents and distributors of
         ExxonMobil chemicals in South Africa.

enX has a proven track record of acquiring quality industrial assets that have strong market positions
that represent leading global brands with committed customer partnerships. We instil entrepreneurial
management to drive returns through the disciplined allocation of capital. enX was founded in 2007,
operates in fourteen countries and has over 2 500 employees.

FINANCIAL RESULTS
Overview
Revenue for the year increased to R7.4 billion (2017: R6.2 billion) with the inclusion of EIE and EFML
for twelve months compared to ten months in the previous year. Consistent with prior disclosures,
management has elected to disclose adjusted EBIT which provides a more meaningful reflection of
sustainable earnings. Adjusted EBIT increased to R815 million (2017: R736 million).

Earnings
Adjusted headline earnings increased to R337 million (2017: R281 million) and translated into adjusted
HEPS of 188.5 cents (2017: 181.2 cents). Earnings have been impacted by general sluggish economic
market conditions especially in the Power industry.

Capex
Aligned to our growth strategy, capital expenditure increased to R1 781 million (2017: R1 385 million)
primarily to re-invest in leasing fleets. 

Funding
The Group's interest-bearing liabilities decreased slightly to R4 782 million (2017: R4 890 million).
Leasing assets increased to R5 378 million (2017: R5 078 million). Bank covenants were all met during
the year. The Group's higher average net borrowings for the year resulted in an increased net interest
charge to R377 million (2017: R292 million).

The Group redeemed its maturing notes amounting to R612 million during the year.

Investments
In October 2017 the Group unbundled its investment in eXtract Group Limited. During the year the
Group purchased three forklift dealerships in the UK to grow its EIE geographic footprint, amounting 
to R76 million. In addition, the Group invested R53 million for 37% in a base oil supplier.

Cash flow
Cash flows from operating activities after capital expenditure amounted to R226 million (2017:
R256 million). In addition, eXtract repaid its R250 million loan in full.

OPERATIONAL OVERVIEW
Equipment
Revenue of R3 719 million (2017: R3 063 million), adjusted EBIT of R401 million (2017: R346 million) 
and adjusted PBT of R223 million (2017: R197 million) were achieved.

The year under review produced satisfactory results for EIE. By all metrics the performance was
better than the previous year. Margins are continuing on an acceptable trajectory. Both the SA and UK
businesses performed well, and this is testament to the superior solutions, products and partnerships
that have been forged over the years. The bulk of the revenue is earned from after-market sales and
services. EIE focuses on its overhead recovery percentage contributed to performance. Despite the
volatility in exchange rates all the businesses remained price competitive.

The Power business experienced difficult trading conditions in the first half of the year but managed 
to turn the performance in the second half despite a subdued trading environment. The Wood business
experienced a small improvement in revenue however, due to this growth being driven more by lower
margin equipment sales rather than higher margin consumables and services, profitability was down.
The business introduced a rental solution to clients which has been well received.

Fleet
Revenues of R2 134 million (2017: R1 650 million), adjusted EBIT of R380 million (2017: R327 million)
and adjusted PBT of R197 million (2017: R181 million) were achieved. Eqstra continued to attract new
business with the emphasis on investment in sales resources as well as the implementation of "Quest",
a bespoke integrated IT solution for Eqstra and its clients. Eqstra maintained its high quality blue chip
customer base.

Unit and revenue growth in value added products ("VAPs"), particularly GPS and accident management,
contributed positively to margins for the year.

Petrochemicals
The petrochemicals business achieved revenue of R1 625 million (2017: R1 539 million), adjusted EBIT
of R80 million (2017: R101 million) and adjusted PBT of R56 million (2017: R77 million). The decline in
profitability was the result of lower sales volumes to an overstocked blending customer depleting its
existing stock holdings. This has subsequently reversed, and sales volumes are increasing. A new
lubricants blend plant was commissioned during the year to service greater demand in production
volumes, enabling growth in capacity. All key clients were retained with a number of additional
mandates awarded during the year. A late surge in revenue at WAI contributed to revenue growth of
28%. This, together with strong margins, drove growth in profit of 69% on the prior year. Working capital
requirements increased to support sales volumes.

PROSPECTS
Strategy
Our long-term goal is to build a growing, cash generative industrial business which over time
consistently delivers returns on equity in excess of its cost of capital. We aim to do this by investing in
assets and opportunities that:
-    Drive differentiation and scale;
-    Strengthen our partnerships with leading global brands;
-    Expand our businesses geographically;
-    Build an entrepreneurial culture;
-    Maintain strong financial disciplines; and
-    Ensure an ongoing social licence to conduct business.
We believe that operating on a decentralised basis is the most effective way to drive these strategies.

As a result we have had success executing on many objectives that fall within these themes. Focusing
our organic and acquisitive growth initiatives within our segments reduces the risks of growing as we
have experienced teams, industry knowledge and infrastructure in place. The specific initiatives that we
are pursuing are set out below:

Equipment:
Growing our operations with the support of our global OEM partners
-       EIE aims to expand its UK footprint and market share through the acquisition of complementary
        forklift businesses and strengthen its long-term partnership with Mitsubishi Caterpillar Forklifts
        Europe, the supplier of Cat Lift Trucks. EIE will also seek to grow forklift market share in line with
        Toyota's aspirations and improve operational efficiencies.
-       The Board is exploring the potential disposal of the Power and Wood businesses.

Fleet:
Leveraging data to differentiate our product offering
-       Eqstra is focused on growing revenues derived from VAPs, which are non-capital intensive, and
        which differentiates its offering. Capital has been made available to support their initiative to
        increase retention rates on existing business and pursue new leasing contracts. Following the
        implementation of Quest, further data and technology opportunities are being extracted to enhance
        our fleet management services and internal operational efficiencies. The board is in the process of
        considering a potential divestment of the fleet business to unlock maximum value for shareholders.

Petrochemicals:
Building a leading independent petrochemicals business in partnership with ExxonMobil
-       The lubricants business will focus on growing its distribution and contract manufacturing volumes
        in sub-Saharan Africa. These growth opportunities have been enabled through the successful
        commissioning of its new inland blending plant, integrated customer relationships and strong
        partnership with ExxonMobil. It will continue to seek and develop new product distribution
        opportunities through this relationship.
-       The chemicals business will focus on growing volumes in selected polymer and speciality
        chemicals. The business will also seek new distributorships, whereby it can increase sales volumes
        through its existing infrastructure.

Group:
The Group's aim is to continue to grow its investment in the EIE and Petrochemicals businesses. 
Our funding plan over the next 18 months is aimed at extending our debt maturity profile, attracting a
more diverse source of funds and achieving an "A" credit rating.

Outlook
The Group is in a process of assessing its investment portfolio with a view of optimising its allocation of
capital and achieve its strategy of being an entrepreneurial, diversified industrial company with a shared
ambition to be a preferred custodian of leading global brands. This process may involve divestment of
some of its current investments.

On a constant currency basis, EIE is expected to deliver annualised earnings growth driven by the UK
operations. Southern African forklift operations are expected to deliver solid performances.

The lubricant business received approval from ExxonMobil, allowing them to locally blend certain
products. Local blending should make us more competitive. Supportive conditions in the polymers and
rubber markets are expected to drive higher volumes and profitability.

Macro-economic conditions remained subdued. Whilst recognising this, enX believes that its business
model and current portfolio of businesses have defensive characteristics given the annuity generating
nature of its products and assets, strong market positions, brand partnerships and long-term client
commitments. The Group has an experienced, entrepreneurial management team who will continue
to maintain strong relationships with its OEM's, customers, drive cost efficiencies and be alert to
growth opportunities.

DIVIDENDS
In line with the Group policy to reinvest for growth, no cash dividend has been declared for the current
and prior years.


For and on behalf of the board


SB Joffe                                                                       JS Friedman
Chief Executive Officer                                                        Chief Financial Officer

29 October 2018

SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

                                                                Audited            Audited
                                                                  as at              as at
                                                         31 August 2018     31 August 2017
                                                                  R'000              R'000
ASSETS                                                                                    
Non-current assets                                            6 781 132          6 557 215
Property, plant and equipment                                   397 055            374 470
Leasing assets                                                5 377 858          5 077 814
Goodwill                                                        478 746            504 510
Intangible assets                                               400 245            428 943
Trade, other receivables and derivatives                          7 540              3 140
Investment in associate                                          54 240                  -
Other investments and loans                                      18 214            142 908
Deferred taxation                                                47 234             25 430
Current assets                                                2 928 340          3 093 649
Trade, other receivables and derivatives                      1 117 551          1 213 608
Inventories                                                   1 352 939          1 229 624
Other investments and loans                                           -             94 415
Taxation receivable                                               6 545             26 020
Bank and cash balances                                          451 305            317 806
Assets held for distribution - eXtract                                -            212 176
 
Total assets                                                  9 709 472          9 650 864
EQUITY AND LIABILITIES                                                                     
Total shareholders' interests                                 2 793 220          2 715 250
Stated capital                                                3 103 455          3 087 083
Other reserves                                                (681 952)          (725 389)
Accumulated profits                                             335 715            322 145
Equity attributable to equity holders of the parent           2 757 218          2 683 839
Non-controlling interests                                        36 002             31 411
Non-current liabilities                                       4 420 505          4 534 345
Interest-bearing liabilities                                  3 870 081          4 002 506
Deferred vendor considerations                                   11 989             24 186
Non-current financial liabilities                                13 513                  -
Deferred taxation                                               524 922            507 653
Current liabilities                                           2 495 747          2 401 269
Interest-bearing liabilities                                    832 161            820 125
Deferred vendor considerations                                   23 342             26 898
Trade, other payables, provisions and derivatives             1 548 604          1 500 073
Taxation payable                                                 46 931             37 824
Bank overdrafts                                                  44 709             16 349
 
Total equity and liabilities                                  9 709 472          9 650 864
 
Supplementary information:                                                                 
Number of shares in issue                                   181 317 725        180 439 427
Number of shares in issue (net of treasury shares)          179 288 484        178 156 727
Net asset value per share (cents)                               1 537.9            1 506.4
Net tangible asset value per share (cents) #                    1 110.1            1 047.7
 
(#)Equity attributable to equity holders of the parent/Number of shares net of treasury shares.

SUMMARISED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME

                                                                      Audited               Audited
                                                           for the year ended    for the year ended
                                                               31 August 2018        31 August 2017
                                                                        R'000                 R'000
Revenue                                                             7 429 294             6 218 342
Net operating expenses                                            (5 479 869)           (4 485 094)
Profit from operations before depreciation and
amortisation                                                        1 949 425             1 733 248
Depreciation and amortisation                                     (1 141 121)           (1 026 379)
(Loss)/profit on disposal of property, plant and equipment            (1 036)                    27
Share-based payment expense                                          (26 110)               (6 708)
Foreign exchange losses                                              (39 933)              (27 085)
Operating profit                                                      741 225               673 103
Impairment of goodwill                                               (56 184)                     -
Fair value adjustment of investments                                        -             (736 563)
Profit/(loss) before interest and taxation                            685 041              (63 460)
Net finance costs                                                   (377 176)             (291 679)
Interest received                                                      24 423                71 803
Interest paid                                                       (401 599)             (363 482)
Share of profit/(loss) from associates                                  1 246               (2 620)
Profit/(loss) before taxation                                         309 111             (357 759)
Taxation                                                             (78 448)             (103 368)
Profit/(loss) after taxation                                          230 663             (461 127)
Attributable to:                                                                                     
Equity holders of the parent                                          225 722             (467 313)
Non-controlling interests                                               4 941                 6 186
Profit/(loss) after taxation                                          230 663             (461 127)
Other comprehensive profit/(loss) net of taxation:                                                  
Profit/(loss) after taxation                                          230 663             (461 127)
Items that may be reclassified subsequently to profit
or loss:                                                                                            
 - Foreign currency translation reserve                                41 578                 4 108
Total comprehensive income/(loss)                                     272 241             (457 019)
Attributable to:                                                                                   
Equity holders of the parent                                          267 300             (463 205)
Non-controlling interests                                               4 941                 6 186
Total comprehensive income/(loss)                                     272 241             (457 019)
Supplementary information:                                                                          
Basic earnings/(loss) per share (cents)                                 126.2               (301.2)
Headline earnings/(loss) per share (cents)                              158.0               (301.2)
Adjusted headline earnings per share (cents)                            188.5                 181.2
EBITDA                                                              1 835 568               967 869
Adjusted EBIT                                                         815 185               735 626
Adjusted headline earnings                                            337 073               281 072
Diluted earnings/(loss) per share                                       124.7                    **
Weighted average number of shares in issue                        178 851 235           155 154 559
Weighted average diluted number of shares in issue                180 968 812                    **

** The dilutionary instruments in issue have an anti-dilutionary effect.

HEADLINE EARNINGS AND ADJUSTED HEADLINE EARNINGS RECONCILIATIONS

                                                                       Audited              Audited
                                                            for the year ended   for the year ended
                                                                31 August 2018       31 August 2017
                                                                         R'000                R'000
Profit/(loss) after taxation attributable to equity holders
of the parent                                                          225 722            (467 313)
Adjusted for:                                                                                       
Loss/(profit) on disposal of property, plant and equipment               1 036                 (27)
Impairment of goodwill                                                  56 184                    -
Taxation effect on adjustments                                           (290)                    8
Headline earnings/(loss) attributable to
ordinary shareholders                                                  282 652            (467 332)
Adjusted for:                                                                                      
Share-based payment expense                                             26 110                6 708
Restructuring and transaction costs                                      7 382               28 720
Retrenchment costs                                                       5 636                    -
Amortisation of intangible assets*                                      33 586               27 311
Interest received - eXtract                                                  -             (60 800)
Fair value adjustment of investments and associate losses
- eXtract                                                                    -              738 967
Taxation effect on adjustments                                        (18 293)                7 498
Adjusted headline earnings attributable to
ordinary shareholders^                                                 337 073              281 072

EBIT RECONCILIATION                                                                                 
Earnings before interest, taxation, depreciation and
amortisation ("EBITDA")                                              1 835 568              967 869
Depreciation and amortisation                                      (1 149 281)          (1 033 949)
Earnings/(loss) before interest and taxation (EBIT)                    686 287             (66 080)
Share-based payment expense                                             26 110                6 708
Restructuring and transaction costs                                      7 382               28 720
Retrenchment Costs                                                       5 636                    -
Amortisation of intangible assets*                                      33 586               27 311
Fair value adjustment of investments and associate losses
- eXtract                                                                    -              738 967
Impairment of goodwill                                                  56 184                    -
Adjusted EBIT^                                                         815 185              735 626
Adjusted EBIT%                                                              11                   12

^   Adjusted headline earnings per share and adjusted EBIT take into account all the profits and losses from
    operational, trading, and funding activities for the year and exclude once off transaction costs, IFRS 2 costs,
    intangible asset amortisation (excluding software), fair value adjustments of investments and other once
    off items.
*   The amortisation of intangible assets arising as part of business combinations has been added back for
    adjusted headlines earnings and adjusted EBIT.

SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                                       Audited              Audited
                                                            for the year ended   for the year ended
                                                                31 August 2018       31 August 2017
                                                                         R'000                R'000
Stated capital                                                       3 103 455            3 087 083
Balance at beginning of the year                                     3 087 083              634 565
Increase through the issue of shares (net of costs)                     18 493            2 494 201
Treasury shares                                                        (2 121)             (41 683)
Other reserves                                                       (681 952)            (725 389)
Balance at beginning of the year                                     (725 389)                 (40)
Foreign currency translation reserve                                    41 578                4 108
Share-based payment expense                                              1 859                7 106
Transfer from accumulated profits of the fair value
adjustment of investments                                                    -            (736 563)
Accumulated profits                                                    335 715              322 145
Balance at beginning of the year                                       322 145               52 895
Total comprehensive income/(loss) for the year                         225 722            (467 313)
Transfer to other reserves of the fair value adjustment
of investments                                                               -              736 563
Unbundling dividend to shareholders                                  (212 152)                    -
Non-controlling interest                                                36 002               31 411
Balance at beginning of the year                                        31 411                    -
At acquisition of subsidiary                                                 -               27 812
Total comprehensive income for the year                                  4 941                6 186
Dividends paid to minority shareholders                                  (350)              (2 587)

Total shareholders' interests                                        2 793 220            2 715 250

SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS

                                                                       Audited              Audited
                                                            for the year ended           year ended
                                                                31 August 2018       31 August 2017
                                                                         R'000                R'000
Cash flows from operating activities                                 2 007 418            1 640 721
  Cash generated from operations before working   
  capital movements                                                  1 893 662            1 699 545
  Working capital movements                                            559 935              391 735
  Interest received                                                     24 423               71 803
  Interest paid                                                      (401 022)            (356 864)
  Taxation paid                                                       (69 580)            (165 498)
Cash flows from investing activities                               (1 656 842)          (2 636 043)
  Capital expenditure                                              (1 781 109)          (1 384 740)
  Additions to goodwill                                               (11 983)                    -
  Proceeds on disposal of assets                                         9 177               12 859
  Business combinations                                               (67 179)          (1 315 228)
  Proceeds from other investments and loans                            194 252               51 066
Cash flows from financing activities                                 (248 827)            1 288 782
  Net movement in interest-bearing borrowings                        (238 803)            (109 193)
  Deferred vendor considerations paid                                  (9 674)             (40 989)
  Payments on transactions with non-controlling interests                (350)              (2 587)
  Net proceeds from shares issued                                            -            1 441 551
   
Net increase in cash and cash equivalents                              101 749              293 460
Effects of exchange rate charges on cash and     
cash equivalents                                                         3 390                    -
Cash and cash equivalents at beginning of the year                     301 457                7 997
Cash and cash equivalents at end of the year                           406 596              301 457
   

SUMMARISED CONSOLIDATED SEGMENTAL ANALYSIS

                                                 Equipment                                   Fleet                          Petrochemicals                  Group, financing and consolidation                       Total
                                                   Audited             Audited             Audited             Audited             Audited             Audited             Audited             Audited             Audited             Audited
                                        for the year ended  for the year ended  for the year ended  for the year ended  for the year ended  for the year ended  for the year ended  for the year ended  for the year ended  for the year ended
                                            31 August 2018      31 August 2017      31 August 2018      31 August 2017      31 August 2018      31 August 2017      31 August 2018      31 August 2017      31 August 2018      31 August 2017
                                                     R'000               R'000               R'000               R'000               R'000               R'000               R'000               R'000               R'000               R'000
Revenue                                          3 718 995           3 062 983           2 134 020           1 649 884           1 624 632           1 538 666            (48 353)            (33 191)           7 429 294           6 218 342
- South Africa                                   2 689 005           2 322 261           1 932 375           1 453 546           1 477 800           1 449 123              47 712              72 785           6 146 892           5 297 715
- Rest of World                                  1 017 326             736 944             179 717             175 169             133 075              81 299                   -                   -           1 330 118             993 412
- Intercompany                                      12 664               3 778              21 928              21 169              13 757               8 244            (96 065)           (105 976)            (47 716)            (72 785)
EBITDA*                                            971 717             858 530             857 140             807 432              87 044             108 767            (80 333)           (806 860)           1 835 568             967 869
Depreciation and amortisation                    (622 491)           (515 328)           (482 338)           (482 684)            (10 169)            (10 870)            (34 283)            (25 067)         (1 149 281)         (1 033 949)
EBIT                                               349 226             343 202             374 802             324 748              76 875              97 897           (114 616)           (831 927)             686 287            (66 080)
- South Africa                                     270 820             293 027             335 215             293 097              53 840              84 981           (114 616)           (831 927)             545 259           (160 912)
- Rest of World                                     78 406              50 175              39 587              31 651              23 035              13 006                   -                   -             141 028              94 832
Adjusted EBIT                                      400 660             345 706             380 210             326 760              80 434             101 381            (46 119)            (38 221)             815 185             735 626
Net finance costs                                (177 933)           (149 047)           (183 127)           (145 735)            (24 414)            (23 960)               8 298              27 063           (377 176)           (291 679)
Adjusted profit/(loss) before taxation             222 727             196 659             197 083             181 025              56 020              77 421            (37 821)            (11 158)             438 009             443 947
Total assets                                     4 676 400           4 320 170           3 050 455           3 117 237             997 906             840 424             984 711           1 373 033           9 709 472           9 650 864
- Goodwill and intangible assets                    30 077              13 235              26 543               8 391               3 295               2 881             819 076             908 946             878 991             933 453
- Leasing assets                                 2 763 398           2 494 411           2 614 460           2 583 403                   -                   -                   -                   -           5 377 858           5 077 814
- Inventories                                      877 462             810 449              13 918              27 630             461 559             391 545                   -                   -           1 352 939           1 229 624
- Trade, other receivables and
  derivative financial assets                      544 970             612 677             256 029             290 651             344 446             311 547            (20 354)               1 873           1 125 091           1 216 748
- Other assets                                     460 493             389 398             139 505             207 162             188 606             134 451             185 989             462 214             974 593           1 193 225
Total liabilities                                3 567 297           3 341 322           2 457 554           2 482 791             778 819             766 238             112 582             345 263           6 916 252           6 935 614
- Interest-bearing liabilities 
  and overdraft                                  2 553 820           2 474 841           1 874 605           1 884 969             284 609             289 830              33 917             189 340           4 746 951           4 838 980
- Deferred vendor consideration                      5 000               9 413                   -                   -              30 331              41 671                   -                   -              35 331              51 084
- Trade, other payables, provisions 
  and derivatives                                  768 342             649 298             307 696             319 655             453 553             430 321              19 013             100 799           1 548 604           1 500 073
- Other liabilities                                240 135             207 770             275 253             278 167              10 326               4 416              59 652              55 124             585 366             545 477
Capital expenditure net of proceeds                851 287             736 540             893 843             615 677              26 768              19 219                  34                 445           1 771 932           1 371 881
Number of employees                                  1 811               1 736                 563                 611                 129                  97                  15                  14               2 518               2 458
GEOGRAPHICAL SEGMENTATION                                                                                                                                                                                                                                                            
Total assets                                     4 676 400           4 320 170           3 050 455           3 117 237             997 906             840 424             984 711           1 373 033           9 709 472           9 650 864
- South Africa                                   3 155 168           3 134 732           2 674 156           2 777 549             952 563             812 091             984 711           1 373 033           7 766 598           8 097 405
- Rest of World                                  1 521 232           1 185 438             376 299             339 688              45 343              28 333                   -                   -           1 942 874           1 553 459
Total liabilities                                3 567 297           3 341 322           2 457 554           2 482 791             778 819             766 238             112 582             345 263           6 916 252           6 935 614
- South Africa                                   2 370 495           2 402 197           2 339 710           2 381 130             754 511             742 208             112 582             345 263           5 577 298           5 870 798
- Rest of World                                  1 196 802             939 125             117 844             101 661              24 308              24 030                   -                   -           1 338 954           1 064 816

*   Excludes intercompany management fees.
    No single customer exceeds 10% of group revenue.

BASIS OF PREPARATION
The summarised preliminary consolidated financial statements for the year ended 31 August
2018 have been prepared in accordance with the requirements of the JSE Listings Requirements
applicable to summarised preliminary reports and the requirements of the Companies Act, No. 71 of
2008 of South Africa applicable to summarised financial statements. The JSE Listings Requirements
require preliminary reports to be prepared in accordance with the framework concepts and the
measurement and recognition requirements of International Financial Reporting Standards ("IFRS"),
the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by the Financial Reporting Standards Council, and to also, as a minimum,
contain the information required by IAS 34: Interim Financial Reporting.

This report was compiled under the supervision of JS Friedman CA(SA), CFO of enX.

The accounting policies applied in the preparation of the consolidated financial statements (from which
these summarised results are derived) are, in terms of IFRS, from and are consistent with the accounting
policies applied in the preparation of the previous consolidated financial statements.


NOTES

                                                                                                 Audited
                                                                                      for the year ended
                                                                                          31 August 2018
                                                                                                   R'000
1.       Capital commitments                                                                           
         Total capital commitments contracted                                                          -
         Future expenditure will be financed from cash generated from operations and
         existing banking facilities.
         Capital commitments of R16.5 million existed in the prior year.                               
         On 13 February 2017 shareholders approved financial assistance in the form
         of a R15 million enX indemnity with regards to Capleverage Proprietary
         Limited.                                                                                      
         There were no contingent liabilities at 31 August 2018.          
                                      
2.       Assets held for sale - eXtract                                                                

These assets were distributed via an in specie dividend declaration to enX shareholders on
13 October 2017, as part of the eXtract restructure agreement.

                                                                            Audited              Audited
                                                                 for the year ended   for the year ended
                                                                     31 August 2018       31 August 2017
                                                                              R'000                R'000
3.       Interest-bearing liabilities                                                                  
         Medium Term Note Programme                                       1 106 166            1 233 897
         Bank debt and overdraft - South Africa                           2 645 323            2 776 806
         Bank debt and overdraft - Rest of world                            995 462              828 277
         Deferred vendor considerations                                      35 331               51 084
                                                                          4 782 282            4 890 064
         Comprising:                                                                                    
         Non-current                                                      3 882 070            4 026 692
         Current                                                            900 212              863 372
                                                                          4 782 282            4 890 064
                                                                          
                                                                            Audited              Audited
                                                                 for the year ended   for the year ended
                                                                     31 August 2018       31 August 2017
                                                                              R'000                R'000
4.       Net finance costs                                                                             
         Interest received - other                                           11 875               11 003
         Interest received - eXtract                                              -               60 800
         Interest paid                                                    (400 728)            (356 864)
         Deemed interest income/(expense)                                    11 677              (6 618)
                                                                          (377 176)            (291 679)
          
5.       Fair value hierarchy disclosures
         Valuation methodology
         Level 1 - Valuations with reference to quoted prices in an active market:
         Financial instruments valued with reference to unadjusted quoted prices for identical assets or
         liabilities in active markets where the quoted price is readily available and the price represents
         actual and regularly occurring market transactions on an arm's length basis. There are no
         level 1 financial instruments in the current year.

         Level 2 - Valuations based on observable and unobservable inputs include:
         Financial instruments valued using inputs other than quoted prices as described above for
         level 1 but which are observable for the asset or liability, either directly or indirectly, such as a
         quoted price for similar assets or liabilities in an active market; a quoted price for identical or
         similar assets or liabilities in inactive markets; a valuation model using observable inputs; and a
         valuation model using inputs derived from/corroborated by observable market data.

         Level 3 - Valuations based on unobservable inputs include:
         Financial instruments are valued using significant inputs which are not based on observable
         market data.

         The table below shows the Group's financial assets and liabilities that are recognised and
         subsequently measured at fair value, analysed by valuation technique.


                                                                          Level 2   Level 3   Fair value
         31 August 2018                                                     R'000     R'000        R'000
         Financial assets                                                                              
         Other investments and loans                                            -    18 214       18 214
         Designated as fair value through profit and loss                                               
         - Derivative financial assets                                     38 548         -       38 548
                                                                           38 548    18 214       56 762
         Financial liabilities                                                                          
                                                                                -         -            -
               
BUSINESS COMBINATIONS
The UK operation of EIE, Impact, acquired 100% of the share capital of three UK companies during the
year, thus expanding its geographical footprint. The companies acquired were Bendigo Mitchell Limited
on 17 October 2017, MacBrown Fork Truck Services Limited on 8 December 2017 and on 1 July 2018,
Dechmont Forklift Trucks Limited, a dealer of CAT Fork Lift Trucks. These businesses operate in broadly
the same geographical, product and customer markets as our current business operations. 

In addition enX completed the acquisition of the Fleet business in Botswana by paying R12 million. This
payment was recorded as additional goodwill in the Fleet cash-generating unit.

                                                                                                   R'000
Non-current assets                                                                                73 820
Current assets                                                                                    35 637
Non-current liabilities                                                                          (7 237)
Current liabilities                                                                             (25 949)
Total identifiable net assets acquired                                                            76 271
Total consideration transferred paid                                                              76 271
Cash balances taken over                                                                         (9 092)
Net cash outflow on total acquisitions                                                            67 179
                                                        
The purchase price allocation is provisional and will be finalised on the first anniversary of the
business combination.

Revenue of R48,5 million (GBP2.8 million) and net profit after taxation of R34,6 million (GBP.2 million) have
been included in these results with effect from the acquisition date. If the acquisition had occurred on
1 September 2017, the following amounts would have been included in the group results: Revenue of
R90,1 million (GBP5.2 million) and net profit after taxation of R5,2 million (GBP0.3 million).

SUBSEQUENT EVENTS
Improved maturity profile
Post year-end the Group obtained a zaA- long-term national scale credit rating from S&P Global Ratings.
This achievement enabled to Group to raise funds in the capital market at improved rates and also
broaden the scope of potential investors.

The banks agreed to extend R510 million of amortising bank term debt, improving the maturity profile of
the Group over the next 18 months. In addition, R96 million of four-year notes were raised in the capital
market.

The Group utilised cash received to early redeem R45 million of EQS05 bonds that were due to mature
in April 2019.

Apart from the above, there have been no other material events subsequent to year-end.

AUDIT REPORT
enX's independent auditor, Deloitte & Touche, has issued its opinion on the consolidated and separate
financial statements for the year ended 31 August 2018. The audit was conducted in accordance with
International Standards on Auditing. Deloitte & Touche has issued an unmodified opinion. A copy of the
independent auditor's report together with a copy of the audited consolidated and separate financial
statements is available for inspection at enX's registered office during normal business hours from
29 October 2018.

The summarised preliminary consolidated financial statements have been derived from and are
consistent in all material respects with the consolidated financial statements for the year ended
31 August 2018 but are not audited. The directors take full responsibility for the preparation of these
summarised preliminary consolidated financial results and confirm that the financial information has
been correctly extracted from the underlying audited consolidated financial statements. Any reference
to future financial information included in this announcement has not been reviewed or reported on
by the auditor. 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 consolidated and
separate audited consolidated financial statements as at 31 August 2018.

DIRECTORS
Executive directors:            SB Joffe (Chief Executive Officer),  JS Friedman (Financial Director)
Non-executive directors:        PM Makwana* (Chairman), PC Baloyi, SF Booysen*, A Joffe, NV Lila*,
                                LN Molefe*, PS O'Flaherty, AJ Phillips*
                                (* Independent)

The following changes to directorships took place during the year:
-    TC Moodley resigned as a non-executive director, effective 21 December 2017;
-    P Mansour, the previous Executive Deputy Chairman resigned as director, effective
     31 December 2017 and was appointed Chief Investment Officer;
-    JL Serfontein resigned as CEO, effective 31 December 2017;
-    SB Joffe, the previous Chairman, was appointed CEO effective 1 January 2018;
-    MP Makwana was appointed independent Chairman, effective 1 January 2018;
-    LL von Zeuner resigned as independent non-executive director, effective 13 July 2018; 
-    IM Lipworth resigned as CFO and director, effective 31 August 2018;
-    JS Friedman was appointed as CFO and director effective 1 September 2018; and
-    A Joffe was appointed non-executive director effective 5 September 2018.

Registered office
202D 11 Crescent Drive, Melrose Arch, Melrose

Postal address
PostNet Suite X86, Private Bag X7, Aston Manor, 1630

Sponsor
The Standard Bank of South Africa;

Transfer secretaries 
Computershare Investor Services Proprietary Limited

Auditors
Deloitte & Touche

Company secretary
L Moller

Release date
29 October 2018



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