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enX GROUP LIMITED - FInancial Results for the six months ended 28 February 2022

Release Date: 17/05/2022 10:00
Code(s): ENX     PDF:  
Wrap Text
FInancial Results for the six months ended 28 February 2022

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")


FINANCIAL RESULTS
for the six months ended 28 February 2022


-   Revenue from continuing operations of R2.386 billion (2021: R2.047 billion)
-   HEPS from continuing operations of 53c per share (2021: 28c per share)
-   Net cash generated before financing activities of R29.9 million (2021: R336.1 million)
-   Net asset value per share of R14.82 (31 August 2021: R14.47)

                                                                          Restated          Restated
                                                 For the period     For the period      For the year
                                                       ended 28           ended 28             ended
                                                  February 2022      February 2021    31 August 2021
Total operations
Net asset value per share (cents)**                      1 482               1 391                1 447
Net tangible asset value per share (cents)               1 468               1 380                1 434
Continuing operations
Basic earnings per share (cents)                            53                  28                   89
Diluted earnings per share (cents)                          53                  28                   89
Headline earnings per share (cents)                         53                  28                   90
Discontinued operations
Basic (loss)/ earnings per share (cents)                   (20)                 35                  76
Diluted (loss)/ earnings per share (cents)                 (20)                 35                  76
Headline earnings per share (cents)                         95                  34                 118

** Equity attributable to equity holder of the parent/Number of shares in issue less treasury shares

Shareholders are referred to the SENS announcement dated 4 April 2022, in which the directors have
declared a special distribution out of contributed tax capital of R2.00 per share to enX ordinary
shareholders. We anticipate this to be paid on or about 13 June 2022, although this date is subject to
change.

The results for the six months ended 28 February 2022 reflect robust performance. enX continued
on its post COVID-19 recovery underpinned by solid profitability, an improved financial position and
continued generation of net cash flows before financing.

enX's financial position continues to strengthen with net debt to equity of 47%, reducing substantially
from 208% as at 31 August 2020, supported by the receipt of the net proceeds from the sale of Impact Handling
(UK) during June 2021 and overall reduction in debt. Net asset value increased by 2% to R14.82 per
share (31 August 2021: R14.47 per share).

Revenue from continuing operations increased by 17% to R2.386 billion (2021: R2.047 billion)
driven mainly by the continued recovery in activity across most businesses as COVID-19 lockdown
restrictions eased and higher selling prices due to the pass through of increasing base oil and chemical input
prices. Shortages in inputs were noted as demand increased in combination with global supply chain challenges.

Operating profit from continuing operations before net finance charges and earnings from our
associate was R206 million (2021: R132 million), an increase of 56%.

Net finance charges in respect of continuing operations were R65 million (2021: R74 million), a
reduction of 12% arising from lower debt balances primarily in Eqstra.

Headline earnings per share from continuing operations was 53c per share (2021: 28c per share), an
increase of 89%.

Current period - Discontinued operations
Shareholders are referred to the SENS announcement dated 30 September 2021 announcing the
disposal of EIE SA to CFAO Holdings South Africa (''CFAO South Africa''). Binding Heads of Terms
("HoT'') were signed by enX and CFAO South Africa, whereby enX would dispose of its equity
ownership in EIE SA for R700 million, subject to typical leakage adjustments between 31 December
2020 and closure of the transaction. On 29 November 2021, enX, CFAO and EIE SA concluded
definitive transaction agreements. Shareholder approval was obtained at a general meeting on
20 January 2022 as required by the JSE Listings Requirements. Fulfilment of the final condition
precedents took place on 1 April 2022 and the transaction became effective on that date. The net
transaction value was R676 million, being the transaction value of R700 million less calculated
leakage of R24 million. R135 million was placed in escrow, being 20% of the net transaction value, for
a period of two years, in terms of the transaction agreements.

In terms of IFRS 5, EIE SA has been reported as an asset held for sale and discontinued operation
from 31 August 2021, the date that the conditions were met to be classified as such. enX is required
to cease depreciation and amortisation from that date and assess the carrying value of the held for
sale assets relative to the transaction value. Consequently, depreciation and amortisation from
1 September 2021 to 28 February 2022 amounting to R222 million (after tax: R160 million) was not
recorded in the current period. On a like-for-like basis, profit before tax was R39 million (2021:
R33 million). An impairment of R188 million has been raised to adjust the carrying
value to net realisable value and equates to depreciation and amortisation from 1 September 2022
that has ceased, the profit earned for the period together with transaction and other costs.

Based on the Board's longer-term decision to exit and manage a controlled wind-down of Austro
Proprietary Limited ("Austro") with the specific intention to maximise cash generation, the business
will be sold to two shareholders, WeOnIt Projects Proprietary Limited and WorkPlace Proprietary
Limited for a consideration of R8.4 million on an as is basis, subject to the security for the pledge of
Austro shares being released by enX Trading's lenders. In line with IFRS 5, Austro has been
reported as an asset held for sale and discontinued operation with effect from 26 February 2022.
Austro's revenue for the six months ended 28 February 2022 was R42 million (2021: R68 million)
and the loss before tax was R6 million (2021: R2 million profit before tax). Profitability has been
negatively impacted by relocation, exit and resizing costs. An impairment of R25 million has been
raised to adjust the carrying value to net realisable value.

The financial results for the six months ended 28 February 2022 have not been audited or reviewed
by the Group's external auditors.

This short-form announcement is the responsibility of the directors of the Company. This short-form
announcement is only a summary of the full announcement which is published on the Company's
website (https://www.enxgroup.co.za/interim-results) on 17 May 2022 and does not contain complete
or full details. Any investment decisions by investors and/or shareholders should be based on
consideration of the full announcement. This short-form announcement has not been reviewed or
audited by the Company's auditors.

The full announcement can be accessed directly using the following JSE link:

https://senspdf.jse.co.za/documents/2022/jse/isse/enx/H1_FY2022.pdf

Copies of the full announcement may be requested during office hours at no charge by emailing
info@enxgroup.co.za or from the Company Secretary at enx@acorim.co.za

By order of the board

A Hannington                                    R Lumb
Chief Executive Officer                         Chief Financial Officer

17 May 2022

DIRECTORS

Executive directors:
A Hannington (Chief Executive Officer), R Lumb (Chief Financial Officer), O Mabandla (Executive)

Non-executive directors:
P Baloyi (Chairman), W Chapman, V Jarana^, Z Matthews*, L Molefe*, B Ngonyama*

(* Independent)
(^ Lead independent)

Registered office:
9th Floor, Katherine Towers, 1 Park Lane, Sandton, 2196

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

Sponsor:
The Standard Bank of South Africa Limited

Company secretary:
Acorim Proprietary Limited, represented by R Cloete

Transfer secretaries:
Computershare Investor Services Proprietary Limited

Date: 17-05-2022 10:00:00
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