Wrap Text
Summarised Unaudited Consolidated Results for the Six Months Ended 30 June 2018
4SIGHT HOLDINGS LIMITED
(Incorporated in the Republic of Mauritius)
(Registration number: C148335 C1/GBL)
(“4Sight Holdings” or “the Company” or “the Group”)
ISIN Code: MU0557S00001 JSE Code: 4SI
SUMMARISED UNAUDITED CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2018
GROUP AND FINANCIAL HIGHLIGHTS:
The Board of Directors is pleased to present its maiden set of six month results from 1 January 2018
to 30 June 2018. The date of incorporation of the Group was on 28 June 2017 and as a result no
comparatives for the interim results is available. Accordingly, where appropriate, the results have
been compared to the group results published for the six months ended 31 December 2017. These
comparative numbers may thus not be considered adequately comparable due to the
difference in reporting period presented.
During the first half of the year 4Sight Holdings had the following highlights:
- Turnover for the six months to 30 June 2018 was $19 374 220. A substantial portion of the
turnover was derived from acquisitive growth post listing, being the Mining and
Manufacturing sector and the Platform sector, together contributing $11.5m. It should be
noted that the Telco sector traditionally earns 70% of its revenue in the second half of the
year.
- Operating expenses were higher for the six month period at $11 476 199 compared to the
six months ended 31 December 2017 of $7 114 045 in line with the growth in turnover levels
and acquisitions, as well as a number of once-off costs associated therewith.
- Earnings before interest, tax, depreciation and amortisation (EBITDA) was $1 800 277 for the
period under review.
- Operating profit was $1 215 192 and cash flow from operations was positive at $456 395.
- Earnings per share (“EPS”) and Headline Earnings per Share (“HEPS”) was 0.15 (USD cents),
based on 476 268 895 weighted average shares in issue.
- The group has successfully acquired a number of companies since the start of the period
under review in line with its strategic objectives ahead of the listing on October 2017 and
with the intention to create solutions in certain sectors, namely:
• Telco, Media and Property, which is the segment which was included in the
prospectus ahead of the listing;
• Mining and Manufacturing, which segment is already reaping the benefits of the
synergies created with the ability to provide an end-to-end solution; and
• Platform Solutions, which acquisitions were concluded during the period under review
and are showing rapid growth.
BUSINESS OVERVIEW
4Sight Holdings is a technology investment company with a vision to empower people to make
better decisions in the digital economy. Exponential technologies are driving the old economy
towards a new digital economy, commonly called ‘the fourth industrial revolution’ (4IR). In this
context, 4Sight Group has significantly grown its business in the past six months through a series of
acquisitions to ensure that the Group can offer full end-to-end autonomous intelligence (AI)
solutions to various industries.
The business now has 600 permanent employees who serve 3000 customers across 30 countries in
five major go-to-market industry clusters. At our inception and listing we focused only on the
telecommunications sector; but this has since expanded to embrace mining and manufacturing,
health and insurance, cross-industry platform technologies, digital advisory and a cluster of smaller
industries such as property, media, and retail.
OUR ACHIEVEMENTS
Our vision is to develop, own, and license AI solutions in various industries, with the core focus on
AI and the basket of supporting exponential technologies. Our business model uses various levels
of corporate activity, such as acquisitions, organic growth, and research and development to
achieve this. We have achieved the following milestones in the past six months:
Acquisitions: To date the Group has acquired 16 business units and three associates. These
acquisitions were carefully and strategically planned in order to acquire Intellectual Property,
capable and deep management experience, existing customers, track records and solutions into
five main clusters for specific industries, which are currently grouped in three segments for
reporting purposes.
Management team: We have established an executive team consisting of five cluster heads and
five key management.
Workforce: We have 600 permanent employees across the Group, most of whom are highly skilled,
and 400 available support contractors on the Sirbie workforce platform.
Resellers: We have 200 cloud service resellers in 18 countries.
World regions: In line with our approach of “Think Global, Act Local” 4Sight Holdings has a number
of regions in which it operates, namely Europe, Middle East and Africa (“EMEA”), which currently
represents the majority of group revenue, with the Americas and the Asia Pacific contributing to
group revenue.
Regional implementation channels: 4Sight Holdings South Africa, in which 4Sight Holdings has 49%,
has been developed as a Level 2 B-BBEE company, as stated in our prospectus commitment; and
in our memorandum of understanding with Chinese investors with whom we shall establish a
Chinese 4Sight joint venture.
Customer base: We have 3 000 customers in 30 countries worldwide.
Sales channels: We have established two global and two regional channels.
Offering: We offer nine main autonomous intelligence (AI) solutions, with 63 sub-AI technologies.
MARKET
The 4IR revolution began around 2007 in the consumer market, but it took ten years to shape the
business market for 4IR. We currently see huge demand for digital transformation services and
solutions in the business market; specifically with cloud technologies as the entry point into the
digital transformation race. Most of our customers focus on building smarter operations through
digital transformation, progressing from hindsight to insight. This investment requires a significant
focus on making sure that operational technologies and the Internet of Things integrate into
existing Information technology infrastructure safely and securely. We predict that, in the next
three years, customers will begin to transform their product offerings through exponential
technologies, and then move into disruptive industry offerings.
BUSINESS PERFORMANCE
With a series of acquisitions completed in the past eight months since listing, our revenue split
between international business and South African business has settled at a seventy five-twenty
five ratio. In the South African context, the first three months of 2018 have been one of the most
difficult trading seasons, with business confidence hitting its lowest point in recent years because
of various political changes and challenges. In international markets, the so-called ‘trade war’
scenarios of the Trump administration have the potential to impact business trade in the 30
countries in which we do business. The initial investment in the telecommunications sector, which
historically experienced a 30%/70% revenue split, will still skew our revenue to a 40%/60% split
between the first six months and the latter six months of the 2018 financial year. It should also be
noted that most of the acquisitions during the six months under review, had an effective date of
1 April 2018 and therefore have only contributed three months of profits to the group results.
Our acquisition strategy is based on the principle that payment is made for proven historical
earnings and, where high growth is projected, vendors will be paid on an earn-out model, based
on the net profit after tax generated by the company before shares are issued. Under IFRS 3, future
shares must be accounted for on the date of acquisition resulting in the recognition of the liability.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Unaudited Audited
6 months 6 months
ended ended
Figures in US Dollars 30 June 31 December
2018 2017
Revenue 19 374 220 11 980 920
Cost of Sales (6 697 510) (2 582 125)
Gross Profit 12 676 710 9 398 795
Other income 14 681 69 195
Operating expenses (11 476 199) (7 114 045)
Operating profit 1 215 192 2 353 945
Investment income 19 401 21 713
Finance costs (267 694) (63 596)
Income from equity accounted investments 101 141 -
Profit before taxation 1 068 040 2 312 062
Taxation (244 314) (219 918)
Profit for the period 823 726 2 092 144
Other comprehensive income:
Items that may be classified to profit or loss
Unrealised exchange differences on translating foreign (1 462 528) 256 982
operations
Other comprehensive income for the period net of (1 462 528) 256 982
taxation
Total comprehensive (loss)/income for the period (638 802) 2 349 126
Profit attributable to:
Owners of the parent 721 328 1 832 044
Non-controlling interest 102 398 260 100
823 726 2 092 144
Total comprehensive (loss)/income attributable to:
Owners of parent (642 517) 2 089 026
Non-controlling interest 3 715 260 100
(638 802) 2 349 126
Per share information:
Earnings per Share (USD cents) 0.15 0.51
Diluted Earnings per Share (USD cents) 0.13 0.49
Headline Earnings per Share (USD cents) 0.15 0.50
Diluted Headline Earnings per Share (USD cents) 0.13 0.49
Weighted average number of shares in issue 476 268 895 360 695 468
Fully diluted weighted average number of shares in issue 559 350 277 374 930 762
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
6 months ended Audited
Figures in US Dollars 30 June 31 December
2018 2017
ASSETS
Non-Current Assets 56 561 488 38 509 359
Property, plant and equipment 3 026 742 3 048 548
Goodwill 39 502 676 23 803 478
Intangible assets 12 839 984 10 487 844
Deferred tax 1 057 669 1 169 489
Investment in associates 134 417 -
Current Assets 14 612 836 14 952 097
Inventories 182 688 144 862
Trade and other receivables 9 805 072 10 246 173
Other financial assets 21 351 24 940
Current tax receivable 84 280 73 564
Cash and cash equivalents 4 519 445 4 462 558
Total Assets 71 174 324 53 461 456
EQUITY AND LIABILITIES
Equity
Equity attributable to Equity Holders of Parent
Share capital 50 510 908 41 295 921
Reserves (4 323 986) (2 960 141)
Retained income 2 553 372 1 832 044
48 740 294 40 167 824
Non-controlling interest (88 412) (87 550)
48 651 882 40 080 274
Liabilities
Non-Current Liabilities 7 559 441 4 567 042
Other financial liabilities 7 147 155 3 720 160
Deferred income 380 132 698 948
Deferred taxation 32 154 147 934
Current Liabilities 14 963 001 8 814 140
Trade and other payables 4 750 022 5 460 147
Other financial liabilities 8 141 968 559 712
Deferred income 1 650 185 2 549 991
Bank overdraft 218 179 244 290
Current tax payable 202 647
Total Liabilities 22 522 442 13 381 182
Total Equity and Liabilities 71 174 324 53 461 456
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Total
Foreign attributable
Currency Non- to equity Non-
Share Treasury Translation Distributable Retained holders of controlling Total
Figures in US Dollars capital Shares reserve Reserves Income the Group interest equity
Profit for the period - - - 1 832 044 1 832 044 260 100 2 092 144
Other comprehensive income - 256 982 - 256 982 - 256 982
Total comprehensive income for - 256 982 1 832 044 2 089 026 260 100 2 349 126
the period
Issue of shares 41 295 921 - - 41 295 921 - 41 295 921
Acquisition of minority interest - - (3 217 123) - (3 217 123) (3 508 223) (6 725 346)
Business combinations - - - - 3 160 573 3 160 573
Balance at 31 December 2017 41 295 921 256 982 (3 217 123) 1 832 044 40 167 824 (87 550) 40 080 274
Profit for the period - - - 721 328 721 328 102 398 823 726
Other comprehensive income - (1 363 845) - (1 363 845) (98 683) (1 462 528)
Total comprehensive income for - (1 363 845) 721 328 (642 517) 3 715 (638 802)
the period
Issue of shares 10 010 507 - - 10 010 507 - 10 010 507
Acquisition of minority interest - - - - - - -
Share issue cost (41 862) - - - (41 862) (41 862)
Treasury shares (753 658) (753 658) (753 658)
Business combinations - - - - (4 577) (4 577)
Balance at 30 June 2018 51 264 566 (753 658) (1 106 863) (3 217 123) 2 553 372 48 740 294 (88 412) 48 651 882
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Audited
6 months ended 6 months ended
30 June 31 December
Figures in US Dollars 2018 2017
Cash flows from/(used in) operating activities
Cash generated/(used in) from operations 550 098 (2 071 979)
Interest income (19 401) 21 713
Finance costs (36 925) (63 596)
Tax paid (37 377) (320 830)
Net cash from/(used in) operating activities 456 395 (2 434 692)
Cash flows (used in)/from investing activities
Purchase of property, plant and equipment (105 533) (40 602)
Proceeds on disposal of property, plant and 23 817 31 581
equipment
Purchase of intangible assets (803 123) (780 423)
Business combinations 520 060 3 172 350
Other financial assets repaid 4 010 022
Net cash (used in)/from investing activities (364 779) 6 392 928
Cash flows from financing activities
Expenditure incurred on share issue (41 862) 1 144 473
Proceeds from other financial liabilities 810 971 4 347 977
Repayments of other financial liabilities (206 804) (1 990 471)
Acquisition of minorities without change in control (3 297 250)
Net cash from financing activities 562 305 204 729
Total cash movement for the period 673 921 4 162 965
Total cash at the beginning of the period 4 218 268 -
Effect of translation of foreign entities (590 923) 55 303
Total cash at end of the period 4 301 266 4 218 268
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The accounting policies and method of measurement and recognition applied in the preparation
of these summarised unaudited consolidated six months results are in terms of International
Financial Reporting Standards (IFRS). The Group was established with the incorporation of the
holding company on 29 June 2017 with its year end set at 31 December each year. The Group
published its first set of results from incorporation to 31 December 2017. Accordingly, this is the
maiden six month interim results for the Group.
The unaudited condensed consolidated six month results for the six months ended 30 June 2018
have been prepared in accordance with the requirements of the JSE Limited Listings Requirements
for interim reports, the requirements of the Mauritian Companies Act, 15 of 2001 applicable to
condensed financial statements, the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee, the Financial Reporting Pronouncements as issued by the
Financial Reporting Standards Council and contain information required by IAS 34 Interim
Financial Reporting. The accounting policies applied in preparation of these condensed
consolidated six months results are consistent with those applied in the previous annual financial
statements.
The group adopted IFRS 9: Financial Instruments and IFRS 15: Revenue from Contracts with
Customers effective from 1 January 2018. The adoption of the new standards and interpretations
did not have a significant impact on the Group's financial results.
The unaudited condensed interim results were prepared under the supervision of the Financial
Director, Mr Jacques Hattingh (CA) SA and were approved by the board of directors on 18
September 2018.
The directors of 4Sight Holdings (“the Board”) take full responsibility for the preparation of the
summarised unaudited consolidated interim results.
RESULTS COMMENTARY
Turnover for the six months to 30 June 2018 was $19 374 220. A substantial portion of the turnover
was derived from acquisitive growth post listing, being the Mining and Manufacturing sector and
the Platform sector, together contributing $11.5m. It should be noted that the Telco sector
traditionally earns 70% of its revenue in the second half of the year.
Operating expenses were higher for the six month period at $11 476 199 compared to the six
months ended 31 December 2017 of $7 114 045 in line with the growth in turnover levels and
acquisitions, as well as a number of once-off costs associated therewith.
Earnings before interest, tax, depreciation and amortisation (EBITDA) was $1 800 277 for the period
under review, whilst operating profit was $1 215 192.
Finance costs, comprised:
- interest on mortgage bonds, which increased due to two more properties being acquired,
which were held by subsidiaries acquired by 4Sight Holdings; and
- interest on deferred vendor liabilities amounted to a non-cash finance cost of $230 769. This
finance cost is directly related to the vendors earn-out periods.
Income from equity accounted investments arose from the profit share received from Digitata
Networks America.
The total comprehensive loss was impacted by the loss on exchange differences on translating
foreign operations.
Earnings per share (“EPS”) and Headline Earnings per Share (“HEPS”) was 0.15 (USD cents), based
on 476 268 895 weighted average shares in issue.
The group has successfully acquired a number of companies since the start of the period under
review in line with its strategic objectives ahead of the listing on October 2017, which was the main
reason for the increase in Goodwill, Intangible Assets and Other Financial Liabilities compared to
period ended 31 December 2017.
The reduction in trade and other receivables from 31 December 2017 to 30 June 2018 is primarily
associated with the Telco sector, which has it license renewals in the second half of the financial
year, normally around November and December each year as well as the effect of the foreign
exchange translation. However, cash and cash equivalents improved compared to the prior
period.
Stated capital increased due to the acquisitions during the period under review as further detailed
below.
Other Financial Liabilities, both Non-Current and Current, increased due to acquisitions in the
current period. Other financial liabilities also increased due to bonds associated with properties
acquired indirectly through the acquisitions. Details of the Other Financial Liabilities are set out
below:
Other Financial Liabilities
Unaudited Audited
30 June 31 December
Figures in US Dollars 2018 2017
ABSA Bank Ltd-Instalment Sale Agreements 84 814 123 481
ABSA Bank Ltd-Mortgage Bond 179 094 218 894
Standard Bank of South Africa Ltd-Mortgage Bond 1 312 861 501 890
STRATEGIX 203 235 -
Randburg Control 49 565 77 639
Blue Sparrow Trust 166 670 200 000
N.L Jackson 153 341 212 747
M.A Powel 68 631 76 158
Digitata Investment Trust 4 233 4 233
Deferred Vendor Liability 13 066 679 2 864 830
- AGE 2 950 404 2 864 830
- SET 2 181 284 -
- AccTech 6 347 993 -
- Dynamics 1 586 998 -
15 289 123 4 279 872
Non-current liabilities
At amortised cost 7 147 155 3 720 160
Current liabilities
At amortised cost 8 141 968 559 712
15 289 123 4 279 872
Cash flow from operations was positive at $456 395, primarily due to good management of
working capital.
SEGMENTAL REVENUE, TOTAL ASSETS, TOTAL LIABILITIES AND RESULTS
The Executive Directors assess the performance of the operating segments based on the
measure of operating profit.
The Group has the following strategic divisions, which are its reportable segments. These divisions
offer different products and services and are managed separately because they require different
technology and marketing strategies. The three main reportable segments consist of
Telco/Media/Property, Mining and Manufacturing and Platform. The following summary describes
the operations of each reportable segment.
The Executive directors is the Chief Operating decision makers of the Group.
Telco/Media/Property
The Telco/Media/Property segment was originally acquired in terms of the 4Sight Holdings’
strategy in which our algorithms help network operators to optimize revenue while retaining
customers on the network within optimal use of the network infrastructure and our digital media
solution helps brands to reach and engage consumers for brand awareness, campaigns and
customer behaviour profiling.
This segment further consists of the following minor segments:
- Dynamic Tariffing - provides operators with the ability to price calls, SMS, data, and content
intelligently. This intelligence is applied to the customer “segment of one” with a smart app
to provide data control, customer behaviour, and real-time offers to consumers.
- Networks services - provides intelligent vendor-agnostic solutions to monitor, audit, control
and automate mobile technologies (2G, 3G, and 4G) across multiple network components.
- Insights / Media - uses gamification technology to reach and engage consumers on feature
and smart mobile devices on behalf of its customers.
- Property services - focuses on providing smart property solutions in the Industry4.0 economy,
ranging from smart utility management to communication and billing services.
- Development - provision of development services for a range of software applications both
internally and externally relating to the telecommunications, media and property industry.
- Telecommunications – providing cloud-based telecommunication solutions to small and
medium-sized businesses.
Mining and Manufacturing
The Mining and Manufacturing segment consists mainly of three entities namely BluESP, Age and
SET.
- BluESP Holdings (Pty) Ltd and its subsidiary (“BluESP”)
Revenue from BluESP arises from both annuity and project related income and consists of
Software, Consulting Services, Training and Support of Solutions that helps customers
increase profitability through Supply Chain Optimisation, Production Optimisation,
Prescriptive Maintenance and Manufacturing Execution Solutions.
- Age Technologies JHB (Pty) Ltd (“AGE”)
AGE is a systems integrator and sales are derived from the sale of products such as sensors,
IoT, instrumentation, control system hardware, cabling and networking equipment for large
Industrial installations and the associated engineering and services work. Current
installations are being done in the mining and water segments in Southern African Countries.
This includes South Africa, Botswana, Zambia, Democratic Republic of Congo and
Zimbabwe. This is the only company in the Group that sell physical (IoT) products and
provide interfacing between the digital and real worlds.
- Simulation Engineering Technologies (Pty) Ltd (“SET”)
SET is an independent consulting company that specialises in creating accurate discrete-
event computer simulation models of complex systems in the mining, rail, logistics,
manufacturing and service industries. SET was established in 2004 and its senior staff have
been in the simulation industry since 1995. SET has over 50 years of collective experience in
conducting simulation studies in the aforementioned industries.
SET’s professional services include the application of various industrial engineering
techniques and principles like process simulation, production scheduling, warehouse slotting
optimisation capacity planning, operations improvement, systems optimisation, work
studies, training, etc. SET is also a supplier of various simulation, scheduling and optimisation
software packages in Africa and the Middle East with strategic partnerships across the
globe.
Platform
The Platform segment consists mainly of the following:
- Casewise South Africa (Pty) Ltd (“Casewise”)
Casewise specialises in enterprise architecture and enterprise data modelling and design;
the cornerstones of enabling digitization of physical assets. These data management tools
form the basic design and deployment tools of analyzing, constructing, and deploying data
in Industry4.0 applications.
- AccTech Systems (Pty) Ltd (“AccTech”) & Dynamics Africa Services (Pty) Ltd (“Dynamics”)
AccTech has been servicing the Private and Government Sector on Enterprise Resource
Planning (ERP) products since 1994, with over 1 200 customers and 35 600 users
internationally, (80% in RSA). AccTech has offices in 15 African cities and 300 staff (180 in
Pretoria Head Office), all within Africa’s reach. The main products and services include
business software (ERP, Business Process Management (BPM), Human Resource
Management (HRM), Business Intelligence (BI), implementation services, software
development and system support. These products and services are delivered to customers
in various industries such as; Finance, Mining, Manufacturing, Distribution, Logistics, Property
Management, State-owned Organisations, Not-for-Profits, and Retail. Of the users, 12 000
users are on AccTech’s own BPM solution, 12 000 users on Sage ERP products, 5 000 on 3rd
Party products and 6 600 users on Human Capital and Customer Relation Management
(CRM) solutions from Sage and Microsoft.
Dynamics Africa, an AccTech subsidiary, has been appointed by Microsoft as an Indirect
Cloud Solutions Provider (CSP) for the regions Middle East, Central Europe and Africa
regions. The CSP program allows for the distribution of Microsoft’s range of cloud
applications, including Office 365, Dynamics Africa 365 and Microsoft Azure to its dedicated
partners across the globe.
- Strategix Applications Systems (Pty) (“STRATEGIX’)
STRATEGIX is a software development company that has digitized SHEQ solutions, integrated
management systems, integrated business continuity management systems and
occupational health and wellness management solutions as well as integrated
environmental sustainability systems.
- Onesource Africa (Pty) Ltd (“Onesource Africa”)
OneSource Africa supplies Governance, Risk and Compliance (“GRC”) services to a range
of local and international companies. Its business model is not just based on traditional
consulting services but also includes outsourced services related to a range of Business
Management Services. Its ability to innovate, implement and deliver utilising technology
forms the basis of rationale for the acquisition.
With the suite of GRC software together with the deep subject knowledge and
implementation skills within OneSource Africa, it will lay the platform for enabling 4Sight’s
mission to enable people to make decisions in the digital economy and key to that is the
digital transformation brought about by cloud technologies.
- Visualitics (Pty) Ltd (“Visualitics”)
Visualitics was founded in 2009 as one of the first true data science companies in South
Africa. From its outset, Visualitics focused on the delivery of bespoke data science solutions
for customers, which required a unique blend of capabilities to solve difficult business
problems. In this process, the foundation was established for 4Sight Holdings to focus on
creating Industry4.0 solutions by the steps of “visualize”, “digitize”, “analyze” and “optimize”.
From a technology perspective (“digitize”), Visualitics developed sensor technologies to
measure pedestrian movements in a non-intrusive manner for clients (over 90 million unique
customer movements have been logged, analysed and presented to clients in retail,
property development and media), to the extreme of building new spatial-economic
models for competition law enforcement (“optimize”).
Visualitics also offers change management services to international customers in the areas
of business engineering, enterprise transformation and re-engineering. This provides
Visualitics with the unique capability to understand Industry4.0 change, and to assist
customers to digitize their business strategies and operations through the 4Sight Holdings
capabilities; using the technologies of Artificial Intelligence, Machine Learning, Big Data and
block chain.
The segmental information for the three main segments is presented below:
Six-month period ended 30 June 2018
Telco/
Media/ Mining and
Figures in US Dollars Property Manufacturing Platform Other Total
Revenue
- External 7 845 700 4 930 416 6 598 104 19 374 220
- Internal - - 197 451 (197 451) -
Operating Profit/(Loss) 724 650 298 943 945 076 (84 775) 1 883 894
Depreciation and
amortisation (504 076) (40 158) (40 851) - (585 085)
Vendor Liability Interest
Non-cash item (230 769) (230 769)
Taxation (20 703) (47 020) (179 477) 2 886 (244 314)
Profit/(Loss) 199 871 211 765 724 748 (312 658) 823 726
The Executive Directors do not monitor assets and liabilities by segment.
Geographical segment
The Group operates principally in Mauritius and South Africa. Thus, these locations have been
disclosed, however, areas such as the Seychelles, Malaysia and other locations are insignificant,
and thus not shown as a separate segment:
Six-month period ended 30 June 2018
Figures in US Dollars
Total
South Africa Mauritius Eliminations reported
Revenue
- External 14 652 539 4 721 681 - 19 374 220
- Internal 3 175 442 3 116 568 (6 292 010) -
17 827 981 7 838 249 (6 292 010) 19 374 220
Operating profit/(loss) 987 197 896 697 - 1 883 894
Depreciation & Amortisation (162 984) (422 101) - (585 085)
Deferred Vendor Liability (230 769) - (230 769)
Interest-Non-cash item
Taxation (211 428) (32 886) - (244 314)
Profit/(Loss) 612 785 210 941 - 823 726
The Executive Directors do not monitor assets and liabilities by segment.
HEADLINE EARNINGS RECONCILIATION
The headline earnings reconciliation and per share information is set out below:
Unaudited Audited
Six month Six month
period period
ended ended
30-Jun-18 31-Dec-17
USD USD
Profit attributable to owners of the parent 721 328 1 832 044
Adjustments for:
Profit/(loss) on disposal of property, plant and equipment – net of 15 566 (11 841)
tax
Headline earnings for the period 736 894 1 820 203
Per share information:
Headline Earnings per Share (US cents) 0.15 0.50
Diluted Headline Earnings per Share (US cents) 0.13 0.49
Weighted average number of shares in issue 476 268 895 360 695 468
Fully diluted weighted average number of shares in issue 559 350 277 374 930 762
ACQUISITIONS AND DISPOSALS
During the period under review, the Company has concluded a number of acquisitions in its
targeted Industry4.0 strategy as follows:
- Foursight Holdings Proprietary Limited (“Foursight”) for a purchase consideration of
USD0.3 million;
- Casewise for a purchase consideration of USD1.4 million;
- Fleek Technologies Holdings Proprietary Limited (“Fleek”) for a purchase consideration of
USD1.8 million, which now forms part of the Telco/Property/Media segment;
- Visualitics for a purchase consideration of USD0.8 million;
- Corporate Lifestyle Management Holdings Proprietary Limited (“CLM”) for a purchase
consideration of USD0.07 million;
- SET for a purchase consideration of USD3.6 million, of which USD2.2 million remains subject to
the achievement of a profit warranty within the next year;
- AccTech for a purchase consideration of USD8.4 million, of which USD6.3 million remains
subject to the achievement of profit warranties of the next two years;
- Dynamics for a purchase consideration of USD2.1 million, of which USD1.6 million remains
subject to the achievement of profit warranties of the next two years;
- SRATEGIX for a purchase consideration of USD0.2 million. The remainder of the consideration
to be determined based on Net Profit After tax, multiplied by a Price Earnings of 8, divided by
3 over the next three years less the original consideration already paid;
- Onesource Africa for a purchase consideration of USD0.1 million. The remainder of the
consideration to be determined based on Net Profit After tax, multiplied by a Price Earnings of
6, divided by 3 over the next three years, less the original consideration already paid;
- XWES Proprietary Limited (“XWES”) for a purchase consideration to be determined based on
Net Profit After tax, multiplied by a Price Earnings of 6, divided by 3 over the next three years;
The ZAR based investments were accounted for fair value of consideration payable.
The aggregate business combinations are disclosed below:
Figures in US Dollars Casewise Fleek VLS SET
Property, plant and equipment 608 32 705 124 199 76 044
Intangible assets and goodwill 19 277 9 462 - -
Other financial assets 3 086 25 285 643 644 577 633
Deferred tax asset - 23 486 19 805 -
Trade and other receivables 21 657 137 299 - 310 884
Inventory - - - -
Cash and cash equivalents 61 919 93 267 9 325 44 757
Other financial liabilities (8 564) (227 594) (852 474) (706 676)
Deferred income - - - -
Bank overdraft - - - -
Forex translation reserve - - - -
Trade and other payables (39 651) (194 879) (33 253) -
Total identifiable net
assets/(liabilities) 58 332 (100 969) (88 754) 302 642
Non-controlling interest - 13 126 - (90 793)
Goodwill 1 369 189 1 888 954 838 034 3 391 601
Purchase consideration 1 427 521 1 801 111 749 280 3 603 450
Other
Immaterial
Figures in US Dollars AccTech DAS Acquisitions Total
Property, plant and equipment 70 088 2 245 13 812 319 701
Intangible assets 2 026 319 - - 2 055 058
Other financial assets 170 193 155 994 865 911 2 441 746
Deferred tax asset - - 50 411 93 702
Trade and other receivables 2 037 421 603 166 70 367 3 180 794
Inventory - - - -
Cash and cash equivalents 159 950 147 930 8 367 525 515
Other financial liabilities (1 002 289) (16 252) (1 123 220) (3 937 069)
Deferred income - - (424) (424)
Bank overdraft - - (5 455) (5 455)
Forex translation reserve - - - -
Trade and other payables (689 802) (635 392) (23 759) (1 616 736)
Total identifiable net assets /
(liabilities) 2 771 880 257 691 (143 990) 3 056 832
Non-controlling interest - - 73 090 (4 577)
Goodwill 5 655 142 1 849 064 707 214 15 699 198
Purchase consideration 8 427 022 2 106 755 636 314 18 751 453
The contribution to the trading results of businesses acquired has been accounted from the
effective date of the business combination. In determining the purchase consideration paid, the
profit history of the relevant business and its growth prospects in the group are considered. The fair
value of shares issued as part of the purchase price was determined based on the share price at
the effective date. The accounting of these subsidiaries and businesses is based on best estimates
and provisional fair values. The Group has not yet completed its assessment of the fair value of all
identifiable assets, liabilities and/or contingent liabilities. The fair values will be accurately
determined within 12 months from the date of acquisition. Goodwill relates primarily to future
profits of these businesses and the anticipated synergies that the businesses bring to the Group.
There were no disposals during the period under review.
NON-CONTROLLING INTEREST
The movement of the non-controlling interest for the periods ending is as follows:
Unaudited Audited
30 June 31 December
Figures in US Dollars 2018 2017
Balance at the beginning of the period (87 550) -
Non-controlling interest in current
period income 3 715 260 100
Acquisition of non-controlling interest - (3 508 223)
Business combinations (4 577) 3 160 573
Total non-controlling interest at the end
of the period (88 412) (87 550)
GOODWILL
The movement of goodwill for the interim period ending is as follows:
Unaudited Audited
30 June 31 December
Figures in US Dollars 2018 2017
Balance at the beginning of the period 23 803 478 -
Additions through business combinations 15 699 198 23 803 478
Total goodwill at the end of the period 39 502 676 23 803 478
INTANGABLE ASSETS
The movement of intangible assets for the interim period ending is as follows:
Unaudited Audited
30 June 31 December
Figures in US Dollars 2018 2017
Balance at the beginning of the period 10 487 844 -
Additions 803 123 780 464
Additions through business combinations 2 055 450 10 125 281
Foreign exchange movements (26 895) 19 437
Amortisation (479 538) (437 338)
Total intangible assets at the end of the period 12 839 984 10 487 844
COMMITMENTS AND SUBSEQUENT EVENTS
Planned acquisition of Curo Health
The Company has entered into an addendum on the agreement dated 1 January 2018, through
its wholly owned subsidiary, Foursight, with Tigrasmart Proprietary Limited (the vendor) for the
acquisition of 100% of the shares in Curo Health with effect from 1 October 2018 for a purchase
consideration of USD1.766 million (R21 840 000).
Change in Company Secretary
The Company appointed Amicorp (Mauritius) Limited effective from 1 August 2018 as disclosed
on SENS on 31 July 2018.
SHARE ISSUES AND REPURCHASES
The Company was incorporated in the prior period. 4Sight Holding had 418 106 476 shares in issue
at the beginning of the period under review, where after the Company has issued the following
shares:
- 36 941 800 shares at R2.00 per share for the acquisition of 100% of Foursight which included
Casewise, Visualitics and Fleek;
- 5 460 000 shares at R2.00 per share for the acquisition of 100% of Curo Health Ltd, the shares
were subsequently reclassified to treasury shares due to the change in effective date of
acquisition to 1 October 2018;
- 13 386 088 shares at R2.00 per share for the acquisition of 70% of SET;
- 22 555 150 shares at R2.00 per share for the acquisition of 100% of AccTech;
- 5 000 000 shares at R2.00 per share for the acquisition of 100% of Dynamics; and
- 1 500 000 shares at R2.00 per share for the acquisition of 51% of STRATEGIX;
Unaudited Audited
30 June 31 December
2018 2017
Balance at the beginning of the period 418 106 476 -
On incorporation 41 150 000
Issue of shares – ordinary 243 271 630
Issue of shares to directors – ordinary shares 99 784 846
Issue of shares to acquire subsidiaries 84 843 038 24 800 000
Issue of shares to acquire subsidiaries – capital raised 9 100 000
Treasury shares (5 460 000)
497 489 514 418 106 476
Issued
Balance at the beginning of the period 41 295 921 -
Ordinary shares of no par value 10 010 507 41 717 755
Treasury shares (753 658) -
Share issue cost written off against share capital (41 862) (421 834)
50 510 908 41 295 921
The above share issues are reflected at the fair value at the date that the acquisition became
unconditional in accordance with IFRS.
There have been no repurchases of shares by the Company or any of its subsidiaries during the
period under review.
RELATED PARTY DISCLOSURE
Effective 1 January 2018 the Group acquired the entire issued share capital and loan account
claims of the Foursight South Africa group (“Foursight”).
Foursight was originally created as a public holding company in 2016 to acquire Industry4.0
technology companies operating in digitisation implementation, data science, data
management, process mining, dashboard technology, enterprise architecture and customer
relationship management solution areas, and ultimately listing on the JSE. Initial founders were
also secured to fund the initial acquisition and listing strategy.
This process was put on hold when Foursight approached Digitata Limited (“Digitata”) to join the
group and, following a request from Digitata, a Mauritian holding company was established for
the listing, namely 4Sight Holdings.
Foursight had concluded the acquisition of the following companies through a series of
agreements as follows:
- 100% of Casewise, which sellers are unrelated to 4Sight Holdings.
- 100% of Visualitics, a company associated with Antonie van Rensburg, a director of 4Sight
Holdings; and
- 87% of Fleek Consulting (Pty) Ltd, a company associated with Gary Lauryssen, a director of
4Sight Holdings;
The above companies provide data analytic consulting and solutions, which supports the larger
telecommunications, media and property solutions (Digitata) and the mining and manufacturing
group solutions through BluESP and AGE.
Of the total consideration settled by way of the issue of 36 941 800 shares, associates of Antonie
van Rensburg and Gary Lauryssen received 7 751 000 shares and 6 027 896 shares respectively.
FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT
The carrying amount of all financial assets and liabilities approximates the fair value. Directors
consider the carrying value of financial instruments of a short-term nature, that mature in 12
months or less, to approximate the fair value of such assets or liability classes. The carrying value
of longer term assets are considered to approximate their fair value as these instruments bear
interest at interest rates appropriate to the risk profile of the asset or liability class. The Group does
not carry any financial instruments measured in the statement of financial position at fair value at
30 June 2018.
GOING CONCERN
The financial statements have been prepared on the basis of accounting policies applicable to
a going concern. This basis presumes that funds will be available to finance future operations and
that the realisation of assets and settlement of liabilities, contingent obligations and commitments
will occur in the ordinary course of business.
LITIGATION
As at year end, there was no litigation pending against the Company or its subsidiaries, which is
expected to have a material impact on the results of the Group.
CONTINGENT LIABILITIES
At the financial year end the Group did not have any contingent liabilities.
PROSPECTS AND REVISED PROFIT FORECAST
Shareholders are reminded that 4Sight Holdings has issued a revised profit forecast as subsequent
to the listing, the Company had concluded a number of acquisitions in its targeted Industry4.0
strategy to expand into mining, manufacturing and data analytics as follows:
- BluESP, effective 1 November 2017;
- AGE, effective 1 November 2017; and
- Foursight, effective 1 January 2018
The revised profit forecasts, including detailed assumptions, of the enlarged 4Sight Holdings group
was published on SENS on 9 March 2018 for the year ending 31 December 2018 and is represented
below.
REVISED
Year ending
Figures in US Dollars 31-Dec-18
Revenue 43 716 698
Cost of Sales (16 818 854)
Gross Profit 26 897 844
Other Income 3 545
Operating Expenses (21 970 071)
Operating Profit 4 931 318
Finance cost (317 554)
Finance Income 33 129
Profit before taxation 4 646 893
Taxation (1 333 606)
Profit after taxation 3 313 287
Non-controlling interests (272 207)
Profit attributable to owners of the parent 3 041 080
Share information:
Earnings per share (US cents) 0.67
Weighted average number of shares in issue 455 048 276
Earnings per share (US cents) 0.66
Weighted average number of shares in issue (fully diluted) 461 098 276
Shareholders are advised that the revised profit forecast does not include the acquisitions of
AccTech, Dynamics, SET, STRATEGIX, Onesource Africa, XWES and Curo Health, which were
acquired after the revised profit forecast was published.
BOARD OF DIRECTORS
At the end of the period under review, the board comprised the following board members:
Date of Date of
Director
appointment departure
Professor Antonie van Rensburg (Chief Executive Officer) 28-Jun-17
Jacques Hattingh (Financial Director) 28-Jun-17
Gary Lauryssen (Corporate Finance Director) 28-Jun-17
Tinus Neethling (Executive Director) 28-Jun-17
Conal Lewer-Allen (Non-Executive Director) 24-Aug-17 15-Jun-18
Dr Rama Sithanen (Independent Chairman) 24-Aug-17
Geoffrey Carter (Independent Non-Executive Director) 24-Aug-17
DIVIDEND
The Board has agreed a formal dividend pay-out policy of at least 6.6 times cover, being at least
15% of headline earnings of the consolidated group of companies, unless the Board is of the
opinion that a lower dividend is to be declared because of the necessity to apply the Group’s
cash resources to any planned acquisitions or that it is in the interest of the Group to build up cash
reserves for foreseeable unfavourable market or economic conditions.
No dividend is to be declared for the interim period ended 30 June 2018 due to the current
acquisition strategy.
For and on behalf of the Board
Chief Executive Officer Financial Director
Prof A.C.J. van Rensburg J. Hattingh
26 September 2018
Executive Directors Independent Non-executive directors
Prof Antonie van Rensburg (Group CEO) Geoffrey Carter
Tinus Neethling (Digitata Group CEO) Dr Rama Sithanen
Jacques Hattingh (FD)
Gary Lauryssen (Group Executive – Mergers
and Acquisitions)
Company Secretary and Registered Office Designated Advisor
Amicorp (Mauritius) Limited Arbor Capital Sponsors Proprietary Limited
Transfer Secretaries WEBSITE
Link Market Services South Africa Proprietary http://www.4sightholdings.co.za
Limited
Date: 26/09/2018 11:01:00 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,
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