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HUGE GROUP LIMITED - Trading statement

Release Date: 27/05/2022 17:10
Code(s): HUG     PDF:  
Wrap Text
Trading statement

HUGE GROUP LIMITED
(Registration number 2006/023587/06)
Share code: HUG       ISIN: ZAE000102042
(“Huge” or “Huge Group” or “the Company”)

TRADING STATEMENT

In terms of paragraph 3.4(b) of the JSE Listings Requirements, companies are required
to publish a trading statement as soon as a reasonable degree of certainty exists that
the financial results to be reported upon next, being the financial results for the year
ended 28 February 2022 (the current reporting period), will differ by at least 20% from
the financial results for the corresponding period in the prior year, being the financial
results for the year ended 28 February 2021 (FY2021 or the comparative reporting
period).

Huge Group is in the process of preparing its financial results for the twelve months
ended 28 February 2022.

Shareholders are advised that a reasonable degree of certainty exists that Huge
Group’s:
•   Earnings per share (EPS) for the current reporting period will be between 285.57
    cents and 287.86 cents, which will be between 1117% and 1126% higher than the
    EPS for the comparative reporting period (FY2021: 23.47 cents);
•   Headline earnings per share (HEPS) for the current reporting period will be between
    56.01 cents and 58.81 cents, which will be between 102% and 113% higher than
    the HEPS for the comparative period (FY2021: 27.67 cents).

On 1 March 2021, the board of directors of Huge Group resolved to account for Huge
Group as an investment entity in accordance with International Financial Report
Standard 10 (IFRS10).

The increase in EPS is largely attributable to Huge Group’s change in accounting and
the treatment of Huge Group as an investment entity, which has involved a
deconsolidation of the underlying subsidiaries of Huge Group, the recognition of a gain
on the loss of control of the subsidiaries, and a fair value increase through profit and
loss.

Huge Group’s vision, strategy, and policies (particularly its investment policy) are those
of an investment entity. Its structure, the skills, background, and experience of its
officers (regarding deal-making and mergers and acquisitions) no longer justifies
treating Huge Group as a consolidated group.

Huge Group meets the definition of an investment entity in terms of IFRS10 as it triggers
all the investment entity provisos. Huge Group’s adoption of this accounting treatment
has been verified by an independent expert and the Company’s auditors. In
accordance with IFRS10 (B101), when an entity becomes an investment entity, it shall
cease to consolidate its subsidiaries at the date of the change in status, except for any
subsidiary that shall continue to be consolidated in accordance with paragraph 32 of
IFRS10. The investment entity shall apply the requirements of paragraph 25 and 26 (Loss
of control) of IFRS10 to those subsidiaries that it ceases to consolidate as though the
investment entity had lost control of those subsidiaries at that date. The only entity that
is consolidated under Huge Group is Huge Management Company Proprietary Limited,
the entity that provides a treasury function to Huge Group’s underlying investee
companies.
Further details relating to the impact of this change in accounting is disclosed in the
integrated report for the twelve months ended 28 February 2022, which is expected to
be released on SENS by 31 May 2022.

This trading statement has not been reviewed or reported on by the Company’s
external auditors.

Johannesburg
27 May 2022

Sponsor
Questco Corporate Advisory Proprietary Limited

Date: 27-05-2022 05:10:00
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