Wrap Text
Summarised audited consolidated financial statements for the year ended
28 February 2018, dividend declaration
Verimark Holdings Limited
(Incorporated in the Republic of South Africa)
Registration Number: 1998/006957/06
Share Code: VMK
ISIN: ZAE000068011
("Verimark" or "the Group" or “the Company”)
SUMMARISED AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED
28 FEBRUARY 2018, DIVIDEND DECLARATION AND NOTICE OF ANNUAL GENERAL MEETING
HIGHLIGHTS
- Revenue up 15,7% to R508,1 million (2017: R439,1 million)
- Profit before tax up 25,1% to R46,7 million (2017: R37,3 million)
- Headline earnings of R33,7 million (2017:R25,8 million)
- Basic EPS at 31,9 cents per share (2017: 24,0 cents per share)
- Headline EPS up 32,9% at 31,9 cents per share (2017: 24,0 cents per share)
- Dividend per share up 32,7% at 15,0 cents per share (2017: 11,3 cents per share)
OVERVIEW
The South African economic environment remained challenging, exacerbated by an uncertain political
environment over the past year. This all contributed to a recessionary environment with GDP
declining 0,7% in the first quarter of 2017, impacting negatively on consumer confidence and resulting
in lower spend in the retail market.
The uncertain economic outlook increased rand volatility against foreign currencies. The rand
strengthened by 10,1% between the beginning and end of Verimark’s 2018 financial year. However,
the average exchange rate of R13,08, compared with the previous financial year’s R14,26, improved
by only 8.2%.
Sales for the year increased by 15,7% to R508,1 million (2017: R439,1 million) . The increase in the
last six months of the financial year, compared to the same period in the previous year, was 17,2%.
The number of new innovative products introduced as well as the ranging and management of stock
levels across Verimark’s retail partners, were the main contributors to this increase. A key contributor
to the revenue growth is the trust in, and credibility, of the Verimark brand and sub-brands (Bauer,
Floorwiz, Genesis, I-Play ).
The strengthening of the average rand / dollar exchange rate, effectively reversing the trend of
previous years, enabled Verimark to keep selling prices the same as the prior year and even reduce
certain product prices. This resulted in a positive impact on sales volumes.
Profit before tax increased by 25,1% to R46,7 million (2017: R37,3 million). This increase has been a
result of improved sales, strict cost containment throughout the business and a stronger rand. During
the financial year, the Company introduced eleven new Verimark Emporium Stores. These stores
expanded the servicing function as well as improved customer care reach across South Africa. While
the costs have been incurred, the anticipated financial benefits will only be seen in the coming
financial years.
Verimark’s financial position is robust, being highly liquid with little debt as well as positive cash
reserves. Improved stock management and control at retail outlets, to avoid out-of-stock situations,
have also assisted revenue growth.
Given the healthy state of Verimark’s financial position and its shares trading below net asset value,
the Board utilised the general authority obtained at the annual general meeting held on Thursday, 3
August 2017 and announced on 30 November 2017 that Verimark (Pty) Limited, a 100% owned
subsidiary had bought back 3 389 640 ordinary shares which are held as treasury shares by the
subsidiary company.
1
On 3 January 2018 the Board used the same general authority and the Company repurchased a
further 2 022 696 ordinary shares, which were subsequently cancelled and delisted, thereby reducing
the number of issued shares to 112 249 632. (Total number of treasury shares held by subsidiary
companies are 10 741 499).
FINAL DIVIDEND
Notice is hereby given that a final gross dividend for the financial year ended 28 February 2018, of
R16,8 million or 15,01006 cents per share (2017:R12,9 million or 11,30016 cents per share) has been
declared, payable on Monday 11 June 2018, to shareholders recorded in the register at the close of
business on Friday 8 June 2018. This is consistent with the dividend policy of 50% of profit
attributable to the shareholders of the Company. This policy will be reassessed by the Board on an
on-going basis. In accordance with the settlement procedures of Strate, the following dates will apply
to the final dividend payment:
Declaration and finalisation data announcement Tuesday, 22 May 2018
Last date to trade shares cum dividend Tuesday, 5 June 2018
Shares commence trading ex-dividend Wednesday, 6 June 2018
Record date Friday, 8 June 2018
Payment date Monday, 11 June 2018
Share certificates may not be dematerialised or rematerialised between Wednesday, 6 June 2018 and
Friday, 8 June 2018, both days inclusive.
On Monday 11 June 2018, the final dividend will be electronically transferred into the bank accounts
of all certificated shareholders where this facility is available, and shareholders who hold
dematerialised shares will have their accounts at their CSDP or broker credited.
The final dividend will be subject to dividend withholding tax at a rate of 20%, which will result in a net
dividend of 12,00805 cents per share to those shareholders who are not exempt in terms of section
64F of the Income Tax Act. The final dividend has been declared out of income reserves. The number
of ordinary shares in issue as at the date of this declaration is 112 249 632. Verimark’s income tax
reference number is 9638/138/84/3.
REPORTING ENTITY
Verimark is a company domiciled in South Africa. The summarised audited consolidated financial
statements as at and for the financial the year ended 28 February 2018 comprise the consolidated
results of Verimark and its subsidiary.
BASIS OF PREPARATION
The summarised consolidated financial statements are prepared in accordance with the requirements
of the JSE Limited Listings Requirements (“Listings Requirements”) for provisional reports, and the
requirements of the Companies Act of South Africa, applicable to summary financial statements. The
Listings Requirements require provisional reports to be prepared in accordance with the
framework concepts and the measurement and recognition requirements of International Financial
Reporting Standards (IFRS) and 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.
The accounting policies applied in the preparation of the consolidated financial statements, from
which the summarised consolidated financial statements were derived, are in terms of IFRS and are
consistent with the accounting policies applied in the preparation of the previous consolidated annual
financial statements.
Mr Bryan Groome CA (SA), Financial Director, was responsible for supervising the preparation of the
consolidated annual financial statements and preparing the summary consolidated financial
statements.
2
The summarised consolidated financial statements have been extracted from the audited
consolidated financial statements, but is not itself audited. The auditors, KPMG Inc have expressed
an unmodified audit opinion on the audited consolidated financial statements. The audited
consolidated financial statements and the auditor’s report thereon are available for inspection at the
Company’s registered office.
The directors take full responsibility for the preparation of the provisional report and that the financial
information has been correctly extracted from the underlying annual financial statements.
The Group has no assets or liabilities measured at fair value which requires fair value hierarchy
disclosures. The carrying values of financial assets and financial liabilities as reflected in the
statement of financial position approximate their fair values at the reporting date.
To obtain a copy of the annual financial statements that have been summarised in this report, please
go to www.verimark.co.za and click on the Annual Reports hyperlink on the website.
SEGMENTAL ANALYSIS
In the past the Group had an operating company registered in Singapore. Per IFRS 8 Operating
Segments the operations of the Group are split between South Africa and Foreign. Operations in
Singapore were discontinued and liquidated and are reflected as discontinued operations in the 2018
financial year as well as the prior year.
RELATED PARTY TRANSACTIONS
Verimark (Pty) Ltd, a 100% owned subsidiary, purchased 3 389 640 Verimark Holdings shares at an
average price of 81 cents per share during the 2018 financial year.
CHANGES TO THE BOARD
Mr Mitesh Patel resigned as Board Chairman and Independent Non-Executive Director on Monday 2
April 2018. Ms Simone van Straaten was appointed as Chief Operating Officer as well as an Alternate
Director to Mr MJ van Straaten on Thursday 1 March 2018. Ms NP Gosa and Ms M Kabi were
appointed as Independent Non-Executive Directors and members of the Audit Committee on Monday
7 May 2018. Ms Gosa was appointed as Board Chairman effective Friday 18 May 2018.
SUBSEQUENT EVENTS
No events material to the understanding of this report have occurred in the period between the
reporting date and the date of this report.
PROSPECTS
Verimark’s future is promising and we are excited about what is to come. We are well-positioned, our
products are gaining more markets acceptance and we are assessing various growth and expansion
possibilities. The South African economy has kept us focused in recent months, with the change in
South Africa’s presidency, not being downgraded by Moody’s rating agency, interest rate movements,
but which were offset by the 1% increase in the VAT rate.
Incidentally, Verimark has decided not to transfer the VAT increase onto the consumer, but rather
absorb the cost.
The company will continue to focus on bringing the best innovation to the South African market as
well as remain the number one Direct TV / Retail selling company in the country. Verimark has
decided to re-enter the international market. This will however take some time to show a return on
investment.
Our website (www.verimark.co.za) has been re-vamped and upgraded and this will allow Verimark to
participate meaningfully in the e-commerce space. Additionally, this is a multipurpose offering and
will allow even closer interactions with customers, while also ensuring that our customer service
remains at the highest level.
Training and development of staff is, and always will be, a key focus for the company. We have
participated in youth employment for the last 41 years and will continue to assist in reducing the un-
employment rate for youth and previously disadvantaged individuals. We will pursue further
learnerships and partnerships to ensure we can continue employing the best possible candidates and
assist in on-going career development.
3
Statements contained in this announcement, regarding the prospects of the Group, have not been
reviewed or audited by the Group’s external auditors.
SUMMARISED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Year ended 28 Year ended 29
February 2018 February 2017
Audited Audited
R’000 R’000
Continuing operations
Revenue 508 137 439 119
Gross profit 230 899 196 320
Operating profit before net finance expense 46 880 35 832
Finance income 2 363 3 637
Finance expense (2 558) (2 153)
Profit before taxation 46 686 37 316
Income tax (12 988) (11 004)
Profit for the year 33 697 26 312
Discontinued operations
Loss for the year from discontinued operations (after 0 (487)
tax)
Profit for the year 33 697 25 825
Other comprehensive income
Items that are or may be reclassified subsequently to
profit or loss
Foreign currency translation reserve movement 0 324
Total comprehensive income for the year 33 697 26 149
Basic and diluted earnings per share 31,9 24,0
Earnings and diluted earnings per share (EPS) – 31,9 24,4
continuing operations
Loss and diluted loss per share (EPS) – discontinued 0 (0,5)
operations
4
SUMMARISED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 28 At 28 At 29
February February February
2018 2017 2016
Audited Audited Audited
(restated) (restated)
R’000 R’000 R’000
Assets
Plant and equipment 8 459 7 195 8 295
Intangible assets 15 750 14 157 14 336
Deferred taxation asset 5 928 4 392 3 305
Non-current assets 30 137 25 744 25 936
Inventories 84 485 83 623 65 581
Trade and other receivables 87 265 46 356 61 970
Prepayments 662 989 463
Prepaid taxation 0 790 23
Asset held for sale 0 0 164
Cash and cash equivalents 23 818 34 072 15 651
Current assets 196 230 165 830 143 852
Total assets 226 367 191 574 169 788
Equity and liabilities
Share capital 338 357 360
Share premium 27 422 31 810 32 269
Foreign currency translation deficit 0 0 (323)
Retained earnings 139 786 118 170 96 340
Equity attributable to the equity holders of the parent 167 546 150 337 128 646
Interest-bearing borrowings 3 237 3 774 3 367
Straight lining accrual 5 702 4 784 3 220
Non-current liabilities 8 939 8 558 6 587
Trade and other payables 40 881 30 625 22 051
Current portion of interest-bearing borrowings 2 161 1 039 702
Bank overdraft 6 400 1 015 9 929
Taxation payable 440 0 1 873
Current liabilities 49 882 32 679 34 556
Total liabilities 58 821 41 237 41 143
Total equity and liabilities 226 367 191 574 169 788
5
SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Capital Share Foreign Retained Total
Premium currency earnings
translation
deficit
360 32 269 (323) 96 340 128 646
Balance at 29 February
2016
Total comprehensive 26 313 26 313
income
Profit for the year – (487) (487)
continuing operations
Loss for the year – 323 323
discontinued operations
Other comprehensive
income
Transactions with (3) (459) (462)
owners recorded in
equity
Dividends paid (3 996) (3 996)
Balance at 28 February 357 31 810 0 118 170 150 337
2017
Total comprehensive
income
Profit for the year – 33 697 33 697
continuing operations
Transactions with
owners recorded in
equity
Repurchase of shares (7 ) (1 654) (1 661)
Purchased Treasury (12) (2 734) (2 746)
shares
Dividends paid (12 082) (12 082)
Balance at 28 February 338 27 422 0 139 785 167 545
2018
6
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 28 Year ended 28
February 2018 February 2017
Audited Audited
R’000 R’000
Net cash inflows from operating activities (4 419) 30 132
Cash generated from operations 21 151 47 375
Dividends paid (12 082) (3 996)
Finance income received 2 363 3 637
Finance costs paid (2 558) (2 153)
Taxation paid (13 293) (14 731)
Cash outflows from investing activities (5 971) (3 220)
Acquisition of plant and equipment to expand (3 997) (3 242)
operations
Acquisition of intangible assets to maintain (2 006) (24)
operations
Proceeds on sale of assets held for sale 0 23
Proceeds from disposal of plant and equipment 32 23
Cash inflow/(outflows) from financing activities (5 249) 282
Advances in interest-bearing borrowings 274 744
Repayment of interest-bearing borrowings (1 117) 0
Repurchase of own shares (4 406) (462)
Net increase in cash and cash equivalents (15 639) 27 194
Cash and cash equivalents at beginning of year 33 057 5 722
Cash and cash equivalents held for sale at beginning 0 141
of the year
Cash and cash equivalents held for sale 0 0
Cash and cash equivalents at end of year 17 418 33 057
SEGMENTAL INFORMATION – for the year ended 28 February 2018
South Africa Foreign Group Total
(Discontinued) elimination
R’000 R’000 R’000 R’000
Revenue 508 137 0 0 508 137
Profit before tax 46 686 0 0 46 686
Profit after tax 33 697 0 0 33 697
Segment assets 226 367 0 0 226 367
Segment liabilities 58 821 0 0 58 821
7
SEGMENTAL INFORMATION – for the year ended 28 February 2017
South Africa Foreign Group Total
(Discontinued) elimination
R’000 R’000 R’000 R’000
Revenue 439 119 0 0 439 119
Profit before tax 37 316 (487) 0 36 829
Profit after tax 26 313 (487) 0 25 826
Segment assets 191 574 0 0 191 574
Segment liabilities (41 237) 0 0 (41 237)
DETERMINATION OF ATTRIBUTABLE EARNINGS AND HEADLINE EARNINGS
Year ended Year ended
28 February 28 February
2018 2017
Audited Audited
Attributable profit (after tax) (R’000) 33 697 25 826
(Profit)/Loss on sale of plant and equipment (R’000) (24) 41
Tax on loss on sale of plant and equipment (R’000) 7 (11)
Headline earnings (R’000) 33 680 25 856
Shares in issue at year end 112 249 632 114 272 328
Shares held by subsidiary at year end 10 741 599 7 351 959
Weighted average shares for the period^ 105 686 243 107 782 370
Diluted weighted average shares Share options 105 686 243 107 782 370
dilutive portion
Basic earnings and diluted earnings per share (cps) 31,9 24,0
Headline and diluted headline earnings per share 31,9 24,0
(cps)
Net asset value per share* (cps) 165,1 140,6
Net tangible asset value per share** (cps) 149,5 127,4
^ Weighted average shares for the period
The total number of issued shares at year end less shares held by the subsidiary, weighted by shares
repurchased and cancelled by the Company and shares acquired by the subsidiary, during the year.
*Net asset value per share
Shareholders’ equity divided by the total number of issued shares at the end of the year less shares
held by the subsidiary. Shareholders’ equity is the equity attributable to equity holders of the parent
(which is basically total assets less total liabilities).
**Net tangible asset value per share
The net asset value of the tangible assets divided by the total number of issued shares at the end of
the year less shares held by the subsidiary.
NOTE ON PRIOR PERIOD ERROR
During 2018, the group discovered that the rent straight-lining provision was erroneously disclosed as
a current liability since inception. As a consequence the current liabilities were overstated and the
non- current liabilities understated. The error has been corrected and the prior period restated to
reflect the correction.
8
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of the Company will be held at Verimark, in
the Boardroom, 50 Clairwood Avenue, Hoogland Ext 55, Randburg, on Thursday 2 August 2018 at
10h00, to transact business as stated in the Notice of the Annual General Meeting, issued together
with the Integrated Annual Report, and made available on the Company website
(www.verimark.co.za), on or about Friday, 25 May 2018.
The record date in terms of section 59(1) (b) of the Companies Act for shareholders to participate in,
attend and vote at the Annual General Meeting is set as at the close of business on Friday 27 July
2018 (“voting record date”).
Accordingly, the last date to trade in the Company’s shares on the JSE Limited in order to be
recorded in the share register on the voting record date is Tuesday 24 July 2018.
On behalf of the Board
Michael van Straaten
Chief Executive Officer
Johannesburg
22 May 2018
Directors:
NP Gosa (Chairman)* J M Pieterse*, A T Nzimande*, M Kabi*, M J van Straaten (CEO),
B M Groome (FD), S van Straaten^
*Independent Non-executive
^ Alternate director
Company Secretary:
PremCorp Consulting Services (Pty) Ltd
Registered office:
50 Clairwood Avenue
Extension 55, Hoogland
Randburg 2194
Postal address:
PO Box 78260, Sandton 2146
Email address:
investors@verimark.co.za
www.verimark.co.za
Transfer Secretaries:
Computershare Investor Services (Pty) Limited
Auditors:
KPMG Incorporated
Sponsor:
Grindrod Bank Limited
9
Date: 22/05/2018 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
