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Quarterly Progress Report
PEMBURY LIFESTYLE GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number 2013/205899/06)
Share code: PEM ISIN: ZAE000222949
(“Pembury” or “the Company” or “the Group”)
QUARTERLY PROGRESS REPORT
In terms of paragraph 1.11(c) of the JSE Listings Requirements of the JSE Limited (“JSE”) pertaining to the
continuing obligations of suspended companies, shareholders are hereby provided with a quarterly progress
report on the current state of affairs of the Company.
Shareholders are referred to the quarterly progress report released on SENS on
30 September 2021, which referenced previous announcements, including the announcement released on
SENS on 30 November 2021, (and using the terms defined therein unless otherwise stated) dealing with,
inter alia, the Share Subscription Agreement with Verityhurst for a total consideration of R18 900 000 and
the disposal of the PLG Retirement Villages.
The matter pertaining to the issue of shares to Verityhurst has now been concluded. The issue will no longer
be proceeding.
Shareholders are referred to the announcements released on 26 August 2021, 21 September 2021 and 29
October 2021, pertaining to the restructuring of the board of directors of Pembury (“Board”).
Mr Andrew McLachlan was re-appointed as the Chief Executive Officer with effect from 29 October 2021.
Mr Thabo Tshepuwane CA(SA) was appointed as the Financial Director with effect from 1 December 2021.
The Company continues to address the finalisation of the audit for the financial years ended 31 December
2019 and 31 December 2020, on a back-to-back basis, which requires, inter alia, an additional injection of
cash in order to meet the expected audit cost, which is substantial.
The Company is currently considering alternative solutions in order to complete the 2019 and 2020 financial
statement audits following the unexpected doubling of the audit fee proposal earlier this year to just under
R4 million. The Company reached out to its former auditor to provide quotes on completing each subsidiary
annual financial statements separately and then report to the Group’s auditors in order to complete the
consolidated annual financial statements. Alternatively, the auditor could be changed. Both Nexia SAB&T
and Moore Assurance (“Moore”) had provided quotes to the Company, which were both lower for the two
years than the incumbent auditor for one year. This good progress had been made with the acquisition of
Moore’s claim and both parties being more comfortable with the new Board composition and the risk
reduction.
The Audit and Risk Committee, together with the Board continues to explore every possible means to
complete the audit of the 31 December 2019 financial statements and the 31 December 2020 financial
statements in order to get the suspension lifted and the shares trading again.
Shareholders are reminded that various cost saving initiatives have been undertaken to start the turnaround
of the Company.
Mr Andrew McLachlan’s re-appointment as CEO has brought about extensive cost saving measures to PLG
as follows:
• closing nonperforming schools;
• changing various service providers to others with major savings;
• raising funds for PLG to settle creditors;
• reducing unnecessary staff throughout Group; and
• preparing 2 Pembury properties that are no longer suited for schooling purposes to be put up for
sale with firstly shareholders and JSE approval. This strategy will raise approximately R22 million
in cash.
To date, 2 nonperforming schools have been closed as at 31 December 2021 while a third has been sold off
on 14 December 2021.
Whilst a number of claims and surprises keep appearing, these are less frequent and are being managed as
they arise. Certain liabilities are disputed or are not those of the holding company and its remaining
subsidiaries, but the Company or the Group have been cited. It is expected that all these matters will be
settled in due course.
As previously announced, as a result of the aforementioned interventions, five of the schools are at a positive
or breakeven EBITDA level, before allocation of head office costs and the impact of collections. Improving
collections and pupil numbers, whilst containing the costs, remain a key driver for the turnaround of the
Group. The Group still needs to raise additional capital in the interim and efforts are ongoing. Interest from
third parties in acquiring a shareholding in the Company remains.
Shareholders are reminded that it takes time to turn a business around, particularly during a period where
the economic environment is tough due to COVID-19, the various lockdowns, the economic impact on the
country and some of the schools’ parents, through job losses or salary cuts. The turnaround is still expected
to take another 12 to 18 months.
The Board extends its thanks to all stakeholders, and specifically suppliers of the Group, for showing patience
and understanding during this turnaround phase. Furthermore, the Board extends thanks to all parents, pupils
and staff for their loyalty and resilience during this period.
Shareholders are reminded that the Company remains under cautionary until further announcements have
been made.
Johannesburg
3 January 2022
Designated Adviser
Merchantec Capital
Date: 03-01-2022 08:00:00
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