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AVIOR CAPITAL MARKETS HOLDINGS LIMITED - Unaudited condensed consolidated interim results for the 6 months ended 31 October 2018

Release Date: 25/01/2019 17:30
Code(s): AVR     PDF:  
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Unaudited condensed consolidated interim results for the 6 months ended 31 October 2018

AVIOR CAPITAL MARKETS HOLDINGS LIMITED

Incorporated in the Republic of South Africa

Registration number: 2015/086358/06

JSE Share Code: AVR

ISIN: ZAE000211637

"Avior Holdings" or "the Company"



UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS 

for the 6 months ended 31 October 2018



FINANCIAL HIGHLIGHTS



Operating revenue

Declined 22% to R76.8 million



Headline earnings per share

Declined 106% to (0.45) cents



Earnings per share

Declined 106% to (0.44) cents



Profit for the period

Declined 106% to R(0.6) million



Condensed consolidated statement of profit and loss and other comprehensive income 

for the 6 months ended 31 October 2018



                                                                                             Unaudited        Reviewed

                                                                                            Six months      Six months

                                                                            %               31 October      31 October 

                                                                       change     Notes           2018            2017

Operating revenue                                                         (22)              76 845 672      99 110 778

Other income                                                              (15)                 251 130         295 214

Total revenue                                                             (22)        2     77 096 802      99 405 992

Operating expenses                                                         (1)        3    (82 461 950)    (83 569 112)

(Loss)/profit from operations                                           >(100)              (5 365 148)     15 836 880

Net interest received                                                   >(100)                (137 397)         98 244

Investment income                                                         (11)                 998 274       1 116 221

Finance cost                                                               12               (1 135 671)     (1 017 977)

Foreign exchange gains/(losses) for the year                            >(100)               4 942 315        (271 036)

Share of loss in equity-accounted investee                               (100)        4              -        (163 256)

Profit before taxation                                                   >(100)                (560 230)     15 500 832

Income tax expense                                                        (98)                 (83 909)     (4 129 472)

(Loss)/profit for the period                                            >(100)                (644 139)     11 371 360

Other comprehensive income:                        

Items that may be reclassified to profit or loss:                        

Exchange differences on translating foreign operation                      75                8 624 471       4 920 584

Other comprehensive income for the year net of taxation                    75                8 624 471       4 920 584

Total comprehensive income for the year                                   (51)               7 980 332      16 291 944

Basic and diluted earnings per share (cents)                            >(100)        5          (0,44)           7,80



Condensed consolidated statement of financial position

as at 31 October 2018



                                                                                             Unaudited         Audited

                                                                                            Six months   Twelve months

                                                                                            31 October        30 April 

                                                                                  Notes           2018            2018

Non-Current Assets                  

Property plant and equipment                                                                 9 746 611       9 366 046 

Intangible assets                                                                              556 621         667 945 

Deferred tax                                                                                16 319 327      14 371 676 

Loans to Directors, managers and employees                                                   1 568 108       1 508 364 

Loan receivable                                                                                605 199         579 138 

                                                                                            28 795 866      26 493 169 

Current Assets                  

Loans to Directors, managers and employees                                                     834 835         797 516 

Margin and collateral account                                                                4 303 002      11 027 981 

Trade and other receivables                                                                 13 276 935       8 945 038 

Financial assets held for trading                                                           55 417 350          47 946 

Current tax receivable                                                                       2 019 958       2 641 773 

Amounts receivable in respect of stockbroking activities                                   572 778 197     373 499 993 

Cash and cash equivalents                                                                   58 657 170      71 710 133 

                                                                                           707 287 447     468 670 380 

Total Assets                                                                               736 083 313     495 163 549 

Equity and Liabilities                  

Equity                   

Share capital                                                                         6      8 647 754       8 647 754 

Share scheme reserve                                                                           130 802               - 

Reserves                                                                                     2 386 833      (6 237 638)

Retained income                                                                             82 459 123      83 103 262 

                                                                                            93 624 512      85 513 378 

Liabilities                  

Non-Current Liabilities                  

Loans from related parties                                                                  13 000 251      13 000 251 

                                                                                            13 000 251      13 000 251 

Current Liabilities                  

Amounts payable in respect of stockbroking activities                                      510 807 465     374 744 959 

Trade and other payables                                                                    23 157 238      20 500 489 

Financial liabilities held for trading                                                      93 909 330         555 191 

Loans from related parties                                                                     132 496         128 222 

Current tax payable                                                                            456 010         268 327 

Operating lease liability                                                                      996 011         452 732 

                                                                                           629 458 550     396 649 920 

Total Liabilities                                                                          642 458 801     409 650 171 

Total Equity and Liabilities                                                               736 083 313     495 163 549



Condensed consolidated statement of changes in equity

for the 6 months ended 31 October 2018



                                                                                   Foreign        Share-

                                                                                  currency         based

                                                                        Share  translation      payments         Total      Retained         Total

                                                                      capital      reserve       reserve      reserves        income        equity

Balance at 01 May 2017 (audited)                                       14 146    (5 561 126)           -    (5 561 126)   79 617 120    74 070 140 

Profit for the period                                                                                                     11 371 360    11 371 360 

Other comprehensive income                                                  -     4 920 584            -     4 920 584             -     4 920 584 

Total comprehensive income for the year                                     -     4 920 584            -     4 920 584    11 371 360    16 291 944

Issue of shares                                                     8 633 700             -            -             -             -     8 633 700 

Purchase of own shares                                                    (92)            -            -             -      (882 078)     (882 170)

Total contributions by and distributions to 

owners of Group recognised directly in equity                       8 633 608            -             -             -      (882 078)     7 751 530 

Balance at 31 October 2017 (reviewed)                               8 647 754      (640 542)           -      (640 542)    90 106 402    98 113 614 

Profit for the period                                                                                                     (7 003 140)   (7 003 140)

Other comprehensive income                                                  -    (5 597 096)           -    (5 597 096)            -    (5 597 096)

Total comprehensive income for the year                                     -    (5 597 096)           -    (5 597 096)   (7 003 140)  (12 600 236)

Total contributions by and distributions to owners 

of Group recognised directly in equity                                      -             -            -             -             -             - 

Balance at 1 May 2018 (audited)                                     8 647 754    (6 237 638)           -    (6 237 638)   83 103 262    85 513 378 

Profit for the year                                                         -             -            -             -      (644 139)     (644 139)

Other comprehensive income                                                  -     8 624 471            -     8 624 471             -     8 624 471

Total comprehensive income for the year                                     -     8 624 471            -     8 624 471      (644 139)    7 980 332

Share-based payments                                                        -             -      130 802       130 802             -       130 802

Balance at 31 October 2018 (unaudited)                              8 647 754     2 386 833      130 802     2 517 635    82 459 123    93 624 512



Condensed consolidated statement of cash flows 

for the 6 months ended 31 October 2018



                                                                                    Audited

                                                                    Unaudited        Twelve      Reviewed

                                                                   Six months        months    Six months

                                                                   31 October      30 April    31 October

                                                                         2018          2018          2017

Cash flows from operating activities                  

Cash generated from operations                                    (13 697 858)   15 591 461     2 169 362 

Investment income                                                     896 843     2 191 252     1 031 664 

Dividend income                                                       555 877            49             -

Finance costs                                                      (1 000 325)   (1 944 011)     (882 721)

Tax paid                                                              (11 448)   (1 817 077)   (2 065 334)

Net cash from operating activities                                (13 256 911)   14 021 674       252 971 

Cash flows from investing activities                  

Acquisition of property, plant and equipment                       (1 236 544)   (7 929 099)   (3 282 997)

Proceeds on disposal of property, plant and equipment                       -        70 976       104 261 

Acquisition of intangible assets                                            -      (414 997)     (323 140)

Loans advanced to Directors and employees                              (7 000)     (845 915)            -

Receipts from loans to Directors and employees                        206 197       967 508       125 486 

Proceeds on disposal of financial assets held for trading                   -     3 012 771             -

Repayment of financial liabilities held for trading                         -    (2 113 162)            -

Loans advanced to equity-accounted investee                                 -      (310 000)     (150 000)

Acquisition of equity-accounted investee                                    -      (500 000)     (500 000)

Net cash from investing activities                                 (1 037 347)   (8 061 918)   (4 026 390)

Cash flows from financing activities                  

Share issue                                                                 -     8 633 700     8 633 700 

Repurchase of shares                                                        -      (212 040)     (220 270)

Repayment of loan to related parties                                 (128 222)            -             -

Net cash from financing activities                                   (128 222)    8 421 660     8 413 430 

Total cash movement for the year                                  (14 422 480)   14 381 416     4 640 011 

Cash at the beginning of the year                                  71 710 133    63 435 808    63 435 808 

Effect of exchange rate movement on cash balances                   1 369 517    (6 107 091)    1 569 065 

Total cash at the end of the year                                  58 657 170    71 710 133    69 644 884



Segmental report 

for the 6 months ended 31 October 2018



Unaudited 31 October 2018                                               South 

                                                                       Africa            UK           Total 

Revenue from external customers                                    66 605 031    10 240 641      76 845 672

Intersegment revenues eliminated                                    4 439 012       989 733       5 428 745

Other income                                                          251 130             -         251 130

                                                                   71 295 173    11 230 374      82 525 547

Operating expenses                                                (72 631 252)   14 287 863)    (86 919 115)

Depreciation and amortisation                                        (924 066)      (47 513)       (971 579)

Investment income                                                    1 002 782       431 416       1 434 198

Finance costs                                                      (1 571 596)            -      (1 571 596)

Forex gains for the year                                              560 638     4 381 677       4 942 315

Income tax expense                                                    658 525      (742 434)        (83 909)

Segment (loss)/profit                                              (1 609 796)      965 657        (644 139)

Segment Assets                                                    698 718 227    37 365 086     736 083 313

Segment Liabilities                                              (641 374 494)   (1 084 307)   (642 458 801)

Revenue Reconciliation                  

Total revenue per reportable segments                                                            82 274 417

Other income                                                                                        251 130

Elimination of intersegment revenues                                                             (5 428 745)

Entity’s revenue per profit and loss statement                                                   77 096 802

Reconcile profit and loss statement                  

Total profit for reportable segments                                                               (644 139)

Elimination of intersegmental profits                                                                      -

Entity’s loss per profit and loss statement                                                        (644 139)

                  

Reviewed 31 October 2017                                                South 

                                                                       Africa            UK           Total 

Revenue from external customers                                    81 733 574    17 377 204      99 110 778

Intersegment revenues eliminated                                      210 000       562 283         772 283

Other income                                                          283 751        11 463         295 214

                                                                   82 227 325    17 950 950     100 178 275

Operating expenses                                                (73 432 901)   (9 458 821)    (82 891 722)

Depreciation and amortisation                                      (1 200 143)      (39 529)     (1 239 672)

Investment income                                                   1 116 221             -       1 116 221

Finance costs                                                      (1 017 977)            -      (1 017 977)

Forex gains/(losses) for the year                                     477 979      (749 015)       (271 036)

Income tax expense                                                 (2 594 386)   (1 535 086)     (4 129 472)

Segment profit                                                      5 576 118     6 168 499      11 744 617

Segment Assets                                                    438 637 752    39 927 768     478 565 520

Segment Liabilities                                              (380 006 948)     (453 189)   (380 460 137)

Revenue Reconciliation                  

Total revenue per reportable segments                                                            99 883 061

Other income                                                                                        295 214

Elimination of intersegment revenues                                                               (772 283)

Entity’s revenue per profit and loss statement                                                   99 405 992

Reconcile profit and loss statement                  

Total profit for reportable segments                                                             11 744 617

Elimination of intersegmental profits                                                              (373 257)

Entity’s profit per profit and loss statement                                                    11 371 360



Notes

for the 6 months ended 31 October 2018



Basis of preparation

The condensed consolidated interim financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"), IAS 34 

Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as 

issued by the Financial Reporting Standards Council, the Listings Requirements of the JSE Limited ("JSE") and the requirements of the Companies Act 

of South Africa. The accounting policies applied in the preparation of these interim financial statements are in terms of IFRS and are consistent 

with those of the previous financial year and the corresponding interim reporting period except for the adoption of new and amended standards as set 

out in note 1 below.



The unaudited condensed consolidated interim financial statements have been prepared on the historical cost basis except for the measurement of 

certain financial instruments at fair value and incorporate the principal accounting policies set out below. They are presented in South African Rand 

which is the Group presentation currency. The unaudited condensed consolidated interim financial statements of the Avior Group as at and for the six 

months ended 31 October 2018 comprise the company and its subsidiaries ("the Group") results and the Group’s interests in equity accounted investees.  

All significant transactions and balances between Group enterprises are eliminated on consolidation.



1. New and amended standards adopted by the Group

The accounting policies are consistent with those reported in the previous year except for the adoption of the following standards and amendments 

effective for the current period:



IFRS 9 Financial Instruments

IFRS 9 Financial Instruments (IFRS 9), with effect from 1 January 2018, replaced IAS 39 Financial Instruments: Recognition and Measurement (IAS 39). 

IFRS 9 introduced new requirements which includes an expected credit loss (ECL) impairment model and new requirements for the classification and 

measurement of financial assets. As disclosed in the notes to the 2018 financial statements, there is no significant impact to the business as a 

result of the adoption of IFRS 9.



IFRS 15 Revenue from Contracts with Customers

IFRS 15 Revenue from Contracts with Customers (IFRS 15), with effect from 1 January 2018, replaces the existing revenue standards and the related 

interpretations. The standard sets out the requirements for recognising revenue that applies to all contracts with customers (except for contracts 

that are within the scope of the standards on leases, insurance contracts or financial instruments). The core principle of the standard is that 

revenue recognised reflects the consideration to which the company expects to be entitled in exchange for the transfer of promised goods or services 

to the customer. The standard incorporates a five step analysis to determine the amount and timing of revenue recognition. The standard does not 

apply to revenue associated with financial instruments, and therefore does not impact the majority of the group’s revenue.



IFRIC 22 Foreign Currency Transactions and Advance Consideration (IFRIC 22)

IFRIC 22 Foreign Currency Transactions and Advance Consideration (IFRIC 22), with effect from 1 January 2018, provides guidance on how to determine 

the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income 

(or part of it) on the derecognition of a non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration 

in a foreign currency. There is no significant impact to the business as a result of the adoption of IFRIC 22.



2. Total revenue

Revenue includes trading, brokerage and commissions, research and investment banking, advisory fees disaggregated between it’s reporting segments, 

key product types and customer types.

                                                                              Unaudited                          Reviewed

                                                                             Six months                         Six months 

                                                                            31 October 2018                   31 October 2017      

                                                                          SA      International             SA      International

Operating revenue                        

Equity brokerage and commissions                        

- Institutional                                                    37 531 111         7 183 121      47 917 573        11 458 622

- Private wealth                                                    2 298 913                 -         904 049                 -

Derivatives and bonds brokerage 

and commissions                                                    14 920 481                 -      25 840 727                 -

Research                                                            5 188 933         3 057 520       6 257 363         5 918 582

Investment banking (corporate broking)                              6 665 593                 -         813 862                 -

                                                                   66 605 031        10 240 641      81 733 574        17 377 204

Other income                        

Other income comprises trading revenue.                        

Realised                         

Financial assets at fair value through profit and loss                 203 277                 -       1 138 755                 -

Fair value adjustments                        

Financial assets at fair value through profit and loss              (2 130 314)                -        (745 432)                -



3. Impairment of trade and other receivables included in operating expenses balance

The Group recognised provisions for expected credit losses of R1 145 548, during the 6 months to 31 October 2018, relating to all Zimbabwean trade 

receivables. The Group  identified a change in the credit exposure risk due to current economic conditions in Zimbabwe  and the foreign exchange 

liquidity challenges. A reasonable approximation of the expected loss rate was applied using the anticipated haircut rate incurred relating to a 

repatriation of funds strategy using dual-listed equities.



4. Disposal of equity accounted joint venture, A-Trade (Pty) Limited ("A-Trade")

With effect from 28 May 2018 Avior Holdings disposed of its shareholding in A-Trade (Pty) Limited for a consideration of R1 to Pallidus Investments 

(Namibia) (Pty) Limited.



The terms of the agreement were such that the Avior Holdings disposed of all 500 000 class A ordinary shares comprising 50% of the share capital of 

A-Trade.



The service level agreement between Avior Holdings and A-Trade for the management services was also terminated. The total loan at 30 April 2018 was 

R310 000 and this was written off as it is not recoverable per the agreed exit terms. The total investment in A-Trade of R500 000 was impaired and 

written off to zero, while the share of loss on the investment was limited to R500 000 which was the investment value.  Losses relating to the entity 

were no longer recognised given they exceeded the net investment in the entity and any write-offs were recorded in the prior year’s financial 

statements.



5. Reconciliation of headline earnings for the period



                                                                                                  Audited

                                                                    Unaudited      Reviewed        Twelve

                                                                   Six months    Six months        months

                                                                   31 October    31 October      30 April

                                                                         2018          2017          2018

Profit attributable to ordinary equity holders of the 

parent entity (basic and diluted)                                    (644 139)   11 371 360     4 368 220

Profit or loss on disposal of property  plant and equipment            10 521         1 773       537 530

Impairment of property plant and equipment                                  -             -       447 113

Insurance refunds                                                     (34 827)            -       (18 011)

Share of loss on equity accounted investee                                  -       163 256             -

Tax effects of adjustments                                              6 806          (496)     (145 465)

Headline earnings                                                    (661 639)   11 535 893     5 189 387

Basic and diluted earnings per share (cents)                            (0,44)         7,80          2,99

Headline and diluted earnings per ordinary share (cents)                (0,45)         7,91          3,55

Number of ordinary shares in issue                                146 285 100   146 285 100   146 285 100

Weighted average number of ordinary shares in issue               146 285 100   145 795 923   146 039 841



6. Authorised and issued stated capital



                                                                                    Audited    

                                                                    Unaudited        Twelve      Reviewed

                                                                   Six months        months    Six months

                                                                   31 October      30 April    31 October

Authorised                                                               2018          2018          2017

Ordinary shares no par value                                      400 000 000   400 000 000   400 000 000 

Issued                   

Ordinary shares no par value                                      146 285 100   146 285 100   146 285 100 

Issued (Rands)                  

Ordinary shares no par value                                        8 647 754     8 647 754     8 647 754



Shares awarded in terms of the staff share scheme (refer note 7) were all subject to performance conditions. As none of these conditions were met at 

31 October 2018 the shares were not dilutive at that date. However, in the event that the performance conditions may be met in future periods the 

shares will have a dilutive effect on earnings per share.



7. Share-based payments

Avior Holdings implemented a staff share scheme in August 2018. Employees are awarded equity shares upon vesting over a 5 year period which are based 

on performance conditions. These performance conditions comprise service conditions or performance targets tailored to the duties of the participant. 

The vesting dates are calendar year ends 3, 4 and 5 from the grant date. Shares are awarded for zero consideration.



The first issue of share scheme awards was made on 6 August 2018 and 24 October 2018 respectively. Share scheme awards were made to employees of the 

Group’s subsidiaries, being Avior Capital Markets (Pty) Limited and Avior Capital Markets International Limited.



Grant - 6 August 2018 and 24 October 2018            

1st tranche vesting          2nd tranche vesting         3rd tranche vesting

06 August 2021               06 August 2022              06 August 2023

24 October 2021              24 October 2022             24 October 2023

33% vesting                  32% vesting                 35% vesting



      Unaudited 31 October 2018      

                                                                    Retention        Performance

                                                                   Six months         Six months

                                                                   31 October         31 October

                                                                         2018               2018

Reconciliation of shares awarded            

Balance at the beginning of the period                                      -                  -

Granted during the year                                             2 240 000          4 240 000

Balance at the end of the period                                    2 240 000          4 240 000

Fair value of share-based payment assumptions             

Fair value at grant date (06 August 2018) (cents)                          30      

Fair value at grant date (24 October 2018) (cents)                         30      

Share price at grant date (06 August 2018) (cents)                         74      

Share price at grant date (24 October 2018) (cents)                        35      



The directors considered whether the ruling market price was an appropriate indicator of fair value. In view of the highly illiquid nature of the 

share, the fact that the majority of share dealings in 2018 were directors dealings, and that there were very few dealings by market participants, 

the directors considered that the EBITDA multiples of comparable companies trading in liquid markets would be a more appropriate indicator of fair 

value. As at 31 October 2018 the following relating to the share scheme was recognised in the Group’s results:



Share-based payment expense                                                              100 138

Share-based payment reserve                                                              100 138

Deferred tax asset                                                                        58 703

Deferred tax (equity)                                                                     30 665

Deferred tax (profit or loss)                                                             28 039



8. Financial instruments carried at fair value

The fair value of the financial instruments is the price that would be received for the sale of the assets or paid for the transfer of a liability in 

an orderly transaction between market participants at the measurement date. The Group classifies assets and liabilities measured at fair value using 

a fair value hierarchy that reflects whether observable or unobservable inputs are used in determining the fair value of the item.



Fair value may be determined using unadjusted quoted prices in active markets for identical assets or liabilities where these are readily available 

and the price represents actual and regularly occurring market transactions. If this information is not available, fair value is measured using 

another valuation technique that maximises the use of relevant observable inputs and minimises the use of unobservable inputs. Where a valuation 

model is applied and the Group cannot mark-to-market, it applies a mark-to-model approach, subject to valuation adjustments.



The valuation methodologies, techniques and inputs applied to the fair value measurement of the financial instruments have been applied in a manner 

consistent with that of the previous financial period.                              



                                                               Unaudited 31 October 2018                    Audited 30 April 2018      

Figures Rands                                              Carrying amount      Fair value            Carrying amount      Fair value

Fair values                               

Financial assets measured at fair value                              

Trading securities                                              55 615 279       55 417 350                    22 668          47 946

Financial assets not measured at fair value                              

Loans to Directors, managers and employees                       2 402 943        2 402 943                 2 305 880       2 305 880

Loan receivable                                                    605 199          605 199                   579 138         579 138

                                                                58 623 421       58 425 492                 2 907 686       2 932 964

Financial liabilities measured at fair value                              

Trading securities                                             (91 972 798)     (93 909 330)                 (525 768)       (555 191)

Financial liabilities not measured at fair value                              

Loans from related parties                                     (13 132 747)     (13 132 747)              (13 128 473)    (13 128 473)

                                                              (105 105 545)    (107 042 077)              (13 654 241)    (13 683 664)

Total                                                          (46 482 124)     (48 616 585)              (10 746 555)    (10 750 700)



The carrying amounts of cash and cash equivalents, accounts receivable in respect of trading activities, margin and collateral accounts,  trade and 

other receivables,  accounts  payable in respect of trading activities and trade and other payables reasonably approximate their fair values, due to 

their short-term nature.



Fair value hierarchy of financial instruments at fair value through profit or loss

The table below analyses recurring fair value measurements for financial assets and financial liabilities at fair value through profit and loss. 

These fair value measurements are categorised into different levels in the fair value hierarchy based on inputs to the valuation techniques used. The 

different levels are defined as follows:



- Level 1:   Quoted prices (unadjusted) in active markets for identical assets or liabilities.



- Level 2:   Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly 

             (i.e. as prices) or indirectly (i.e. derived from prices).



- Level 3:   Inputs for the asset or liability that are not based on observable market data (unobservable inputs).



Unaudited 31 October 2018                                             Level 1

Financial assets held for trading                                  55 417 350

Financial liabilities held for trading                            (93 909 330)

Audited 30 April 2018                                                 Level 1

Financial assets held for trading                                      47 946

Financial liabilities held for trading                               (555 191)



9. Related party transactions

In addition to the transactions disclosed in the most recent Annual Financial Statements the following related party transactions are disclosed:

Oakleaf balances and transactions                                   

                                                                    
                                                                    Unaudited      Reviewed
                                                                   Six months    Six months

                                                                   31 October    31 October

                                                                         2018          2017

Commission expense                                                    207 091       286 578

Trade payable balance                                                 138 463       156 384



Avior Capital Markets International Limited’s Directors, Dana Becker and David Haveron, are shareholders in Oakleaf Financial Limited (UK corporate 

entity). Commission sharing payments relating to certain brokerage revenue streams are made to the entity. These revenue streams were secured by the 

two Directors prior to the acquisition of Avior Capital Markets International in 2015.



Director’s participation in staff share scheme

Directors and prescribed officers participation as at 31 October 2018

Directors                      Grant date               Expiry date          Number of shares

Justin Larsen                  06 August 2018        06 August 2021          132 000

                                                     06 August 2022          128 000

                                                     06 August 2023          140 000



Refer to note 7 for further detail relating to the staff share scheme. 



10. Events after reporting date

There were no material events identified after the reporting date to the date of this report, being 29 January 2019.



11. Dividends

No dividends were paid to shareholders for the period ended 31 October 2018.



12. Going concern

The directors have made an assessment of the ability of the company and its subsidiaries to continue as going concerns and have no reason to believe 

the businesses will not continue as going concerns for the foreseeable future.



Commentary

Overview

The six months ended 31 October 2018 was characterised by a continued withdrawal of funds from emerging markets to higher-return and lower-risk 

markets. South Africa’s continued political and policy uncertainty, corporate scandals, and poor South African GDP performance weighed in on investor 

sentiment. These trends largely contributed to the JSE’s worst performance in 10 years and the second worst equity performance globally, second only 

to Turkey, from a USD perspective.



Avior Holdings operates a cyclical business with its performance directly affected by market conditions.  Avior Holding’s current results are 

therefore representative of the current environment.  



Avior Holding’s profit for the period declined by 106% to -R0.6 million (2018: R11.4 million). Headline Earnings per Share (HEPS) declined 106% to - 

0.45c (2018: 7.91c). 



The Group’s segments are:

• South Africa

• International



Segmental analysis

The South African segment contributed -R1.61 million to profit for the period (2018: R5.6 million) and was weighed down by its brokerage business. 

The International segment contributed R1.0 million to profit for the period (2018: R6.2 million). The International business showed resilience 

despite the European Union’s MiFID II regulations, growing its research and brokerage revenues. It was, however, negatively impacted by a sharp 

decline in performance fees which are dependent on South African equity market performance.



Financial performance

Operating revenue decreased by 22% to R76.8 million (2018: R99.1 million). This is largely attributable to a decline of 31% in brokerage commissions. 

Other income decreased 15% to R0.25 million (2018: R0.3 million).



Operating expenses decreased by 1% to R82.5 million (2018: R83.6 million). The decrease is attributable to an active cost saving programme, of which 

R2.2 million relates to once-off cost saving measures.



Foreign exchange gains for the period were R4.9 million (2018: -R0.3 million) and were largely driven by the strengthening of GBP to other major 

currencies, being Avior Capital Markets International Limited’s functional currency. The gains were largely generated from cash and cash equivalents 

and trade debtor turnover.



The net result of the above was a decline in profit for the period of 106% to -R0.6 million (2018: R11.4 million).



Despite the current market conditions the Group has largely maintained its cash and cash equivalent reserves, with the 31 October 2018 balance at 

R58.7 million (2018: R71.7 million). The difference between the previous comparative period is largely due to an increase in financial assets held 

for trading and changes in working capital. 



Prospects

Global market conditions are likely to remain uncertain over the next 6 months. In South Africa, elevated levels of uncertainty are likely to persist 

leading up to the 2019 general elections. 



Despite the current conditions the Group’s strategy, as articulated in the recent 2018 Integrated Annual Report, remains unchanged as the Group 

continues to invest in its strategic initiatives. The goal is to continue to expand its high-touch services to a growing client base, while 

leveraging its core research business. A key element of this is also revenue diversification.



The Group will also continue to focus on its cost saving programme to help ensure resilience in the current market, while continuing to enhance 

capacity and scale to take advantage of the next market cycle.



Forward-looking statements and directors' responsibility

The Company cannot guarantee that any forward-looking statement will materialise and accordingly, readers are cautioned not to place undue reliance 

on any forward-looking statements. The Company disclaims any intention and assumes no obligation to update or revise any forward-looking statement 

even if new information becomes available as a result of future events or for any other reason, other than as required by the JSE Listings 

Requirements. 



The condensed interim financial statements are the responsibility of the Board of Directors of the Company.  Neither these condensed interim 

financial statements, nor any reference to future financial performance included in this results announcement, have been reviewed or audited by the 

Group’s external auditor, BDO South Africa Incorporated. The interim results were prepared under the supervision of the Finance Director, Justin 

Larsen CA (SA).



Signed on behalf of the Board of Directors by Peter Koutromanos (Chief Executive Officer) and Justin Larsen (Finance Director) on 24 January 2019.


Corporate Information



Company secretary 

Fusion Corporate Secretarial Services

Unit 7, Block C, Southdowns Office Park, 

Karee street, Irene, Pretoria



Registered office

Avior Capital Markets Offices

11th Floor, South Tower, 140 West Street, Sandton, 2196



Designated advisor

Pallidus Capital

Cradock Heights, corner of Tyrwhitt & 

Cradock Avenue Rosebank, Johannesburg



Transfer secretaries

4 Africa Exchange Registry (Pty) Limited

1st Floor, Cedarwood House

Ballywood’s Office Park

35 Ballyclare Drive, Bryanston, 2121


25 January 2019

Date: 25/01/2019 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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