Wrap Text
Condensed Consolidated Interim Results for the six months ended 31 December 2018
ECSPONENT LIMITED
Incorporated in the Republic of South Africa
Registration number: 1998/013215/06
JSE Code: ECS - ISIN: ZAE000179594
(“the Company” or “Ecsponent”)
Condensed Consolidated Interim Results for the six months ended 31 December 2018
The Board is pleased to present the condensed consolidated results of the Group for the six months
ended 31 December 2018.
The financial results of the six-month period ended 31 December 2018 reflect the impact of the
various transactions which the Group has embarked upon in order to continue the balance sheet
growth trajectory. The financial results for the period represent a transition phase and shareholders
are advised to consider the substance of the Group giving due consideration thereto.
RESULTS – OVERVIEW
The financial results of the 6-month period ended 31 December 2018 continues to build on the
secure base established by more than seven years of steady growth, from which further growth can
be pursued.
Overview of the Group’s interim results ended 31 December 2018 compared to the comparative
results for the six-month period ended 30 September 2017 (“Prior Period”) are set out below:
- Gross assets increased by 89.7% to R2.8 billion from R1.5 billion in the Prior Period.
- Investment in Associates increased by 173.9% to R748 million from R273 million in the Prior
Period.
- Loans and Advances increased by 18.9% to R1.2 billion from R1 billion in the Prior Period.
- Revenue from continuing operations increased by 29.5% to R200 million compared to the Prior
Period.
- Operating profits from continuing operations increased by 70.2% to R218 million compared to
R128 million for the Prior Period.
- Net cash inflows from financing activities increased by 40.8% to R408.3 million from
R290 million for the Prior Period.
- Significant increases in finance costs and taxation resulted in a reduction in total
comprehensive income to R8.6 million from R34.2 million for the Prior Period.
- Headline earnings per share (“HEPS”) and earnings per share (“EPS”) declined by 81.7% and
89.8% respectively.
Of the Group’s R2 775 million total assets, R1 275 million, or 46.0% of total assets, are held outside
of the Common Monetary Area. These investments provide a hedge against a weakening Rand.
The Company continues to focus on mechanisms to mitigate against short-term earnings volatility,
that arise from the currency and price risks associated with offshore listed equities.
During the period, the Group deployed funding from international sources to expand its African
operations and international asset base. Current loan funding and investments funded remain
denominated in US dollar or Euro to avoid exposure to emerging market exchange rate risk, thereby
providing additional foreign currency assets. Post the reporting period, the Company announced the
conclusion of a term sheet which, once concluded, would result in a R700 million debt funding facility
being made available to the Group from Afreximbank.
OPERATIONAL REVIEW
Group Overview
Below is an overview of the Group’s operations for the 2018 interim period end.
Investment Services
The Group’s preference share programme (“the Programme”), which raises capital to fund
investments, has continued to facilitate the Group’s expansion strategy. The Programme provides
retail and institutional investors with returns over a five-year period, after which their capital is
returned.
As at 31 December 2018 the Group’s Investment Services business unit had raised approximately
R1.8 billion from the issue of preference shares, since implementation of the Programme in
September 2014.
In addition to raising capital through the Programme, the Investment Services unit has as a strategic
objective of lowering the cost of capital to the Group through securing further institutional debt
funding.
The Group’s ability to deliver effective investment and other financial services products to the retail
market is one of its core competencies. To leverage opportunities offered through the established
distribution channel, the Investment Services business unit introduced a R10 billion note programme
to the market. Between the mid-December launch date and period end of 31 December 2018, the
Investment Services business had placed R5.9 million under the note programme. These products
will give this business unit further ability to meet multiple investment needs of the investor base
and generate additional profit opportunities for the Group.
Credit
The Credit business unit provides secured credit to fund the business operations of qualifying
entities. The unit has distinct products that cater to the needs of specific unbanked and underbanked
Small to Medium Enterprises (SMEs). These products offer unique loan and funding products, which
are fully secured, thereby minimising its risk.
- The SME secured credit product provides wholesale funding to target niche businesses. The
nature of these transactions is typically medium-term facilities, but with a short-term call-
up to ensure liquidity for the group.
- Ecsponent’s supply chain and enterprise development solutions aim to integrate qualifying
vendors into the formal supply chain of large corporate businesses.
- The bridging finance product provides short term asset funding which is secured by fixed
property.
The Group controls all credit operations centrally, which significantly improves both governance and
consistency across the operations. In addition, the centralised procurement and logistics operations
provide the critical mass required to support enterprise development in each of the territories. At
the same time, it contributes to securing the Group’s interests in transactions related to the supply
chain and enterprise development activities.
The demand for credit from the SME sector remains buoyant and has resulted in continued, sustained
growth of the business across the Group’s footprint. Total assets increased by 41.3% from R1.6
billion to R2.3 billion compared to the Prior Period. Operating profit decreased by 17.8% from R204
million to R168 million.
Equity Holdings
The Equity Holdings business unit invests strategically in companies that are well-managed, self-
sufficient and provide a balance in the Group’s short-term and long-term asset base.
It targets businesses with significant intellectual property, which provide a barrier to entry for
competitors, command sizeable margins and employs a robust business model. As a result, the
Group holds investments in innovative and growing sectors, including Financial Services, Healthcare,
Digital Media and Fintech.
At 31 December 2018, the Group held 24.3% in MyBucks. This investment has the added advantage
of providing a foreign currency hedge against local currency frailty.
Total assets increased by 76% from R318 million to R560 million compared to the Prior Period and
revenue increased by 376.8% from R18.7 million to R89 million.
It is the Group’s intention to obtain a controlling interest in MyBucks. The investment will give the
Group access to financial services and related technology, which provides quantifiable value to its
operations.
Geographical Footprint
The Group’s operations in South Africa are mirrored across the operational footprint in Eswatini and
Botswana, with in-country client representation in each territory. In Zambia, the Group holds a 25%
interest in the local entity, which is registered as a deposit-taking financial institution.
Post the reporting period, the Group announced its investment in the Zimbabwean stock exchange
listed GetBucks Microfinance Bank Limited.
The back-office infrastructure of each territory is centrally managed from South Africa.
PROSPECTS
Key elements of the Group’s on-going growth strategy are:
• the continued focus on core businesses;
• ongoing investment in the Group’s credit operations, including the deployment of the new
Afrexim facility, once this is approved;
- growth in the Wealth business through increase assets under management (AUM) as well as
product diversification.
- consolidation of the Group’s interest in the listed MyBucks investment;
- increased emphasis on high yield equity opportunities and sector diversification
• obtaining rand-based and foreign currency institutional funding; and
• aggressive cost rationalisation/reduction.
The abovementioned approach is aimed at the continued development of a robust and
complementary financial services Group which continues to provide sustainable returns.
REVIEW OF RESULTS AND FINANCIAL POSITION
The condensed consolidated interim financial results represent the trading results of the Company and
its subsidiaries which are active in the financial services and private equity markets.
FINANCIAL RESULTS
Presented below are the condensed consolidated financial statements for the 6 months ended 31
December 2018.
Condensed Consolidated Interim Statement of Financial Position as at 31 December 2018
Reviewed Audited
31 December 30 September 30 June
2018 2017 2018
Group Group Group
Notes R’000 R’000 R’000
ASSETS
Non-current assets
Investment in associates 5 748 420 273 285 21 500
Loans and advances 6 193 511 895 770 803 599
Other financial assets 7 531 745 - 537 232
Intangible assets and Goodwill 23 968 5 668 4 066
Property, plant and equipment 3 591 6 296 4 005
Deferred tax 80 001 39 623 49 635
Other non-current receivables 750 5 652 -
Current assets
Loans and advances 6 1 090 644 184 638 434 753
Other financial assets 7 38 407 - 294 956
Cash and cash equivalents 37 673 11 938 45 086
Trade and other receivables 24 244 38 419 37 878
Current tax receivable 1 541 254 2 440
Inventories 683 1 050 654
TOTAL ASSETS 2 775 178 1 462 593 2 235 804
EQUITY AND LIABILITIES
Equity 193 012 141 151 193 139
Non-controlling interest 735 (12 431) 362
Non-current liabilities
Preference shares 8 1 920 795 1 232 459 1 694 362
Note programme 9 5 972 - -
Other financial liabilities 10 227 491 7 282 150 523
Finance lease liabilities 811 - 879
Trade and other payables - 3 431 1 616
Deferred tax 150 484 18 689 93 831
Current liabilities
Preference shares 8 100 308 12 438 7 613
Other financial liabilities 10 150 207 - 72 432
Current tax payable 8 800 32 483 138
Finance lease liabilities 158 - 158
Trade and other payables 16 017 26 350 19 970
Bank overdraft 388 741 781
TOTAL EQUITY AND LIABILITIES 2 775 178 1 462 593 2 235 804
Condensed Consolidated Statement of Profit and Loss and Other Comprehensive Income for
the interim period ending 31 December 2018
Reviewed Audited
6 months 6 months 15 months
ended 31 ended 30 ended 30
December September June
2018 2017 2018
Group Group Group
Notes R’000 R’000 R’000
Revenue 200 175 154 597 466 984
Cost of sales (101 772) (18 115) (83 637)
Other income 79 554 22 286 52 162
Operating expenses (62 200) (45 422) (175 838)
Fair value adjustments 102 622 15 127 153 951
Loss from equity accounted investments (233) (274) (1 173)
OPERATING PROFIT 218 146 128 199 412 449
Net finance costs (161 578) (82 832) (260 585)
PROFIT BEFORE TAXATION 56 568 45 367 151 864
Taxation 11 (52 746) (29 710) (69 812)
PROFIT FROM CONTINUING OPERATIONS 3 822 15 657 82 052
Profit from discontinued operations - 15 312 15 311
PROFIT FOR THE PERIOD 3 822 30 969 97 363
Other comprehensive income / (loss) 5 176 478 (2 547)
TOTAL COMPREHENSIVE INCOME 8 998 31 447 94 816
(Profit)/Loss attributable to non-controlling interest (373) 2 718 4 807
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE 8 625 34 165 99 623
TO ORDINARY SHAREHOLDERS
Profit attributable to owners of the parent from:
Continuing operations 3 449 18 324 86 869
Discontinued operations - 15 373 15 311
3 449 33 697 102 180
Total comprehensive income/(loss) attributable to:
Owners of the parent 8 625 34 165 99 623
Non-controlling interest 373 (2 718) (4 807)
8 998 31 447 94 816
Basic and fully diluted earnings per share (cents) from 12 0.319 1.697 8.047
continuing operations attributable to equity holders of the
parent
Basic and fully diluted earnings per share (cents) from - 1.424 1.418
discontinued operations attributable to equity holders of
the parent
Basic and fully diluted earnings per share (cents) 12 0.319 3.121 9.465
attributable to equity holders of the parent
Condensed Statement of Changes in Equity for the 6 months ended 31 December 2018
Notes Share capital Foreign currency Accumulated Total attributable Non- Total equity
translation profit/(loss) to owners of the controlling
reserve parent interest
R’000 R’000 R’000 R’000 R’000 R’000
Balance at 1 April 2017 145 169 (398) (37 785) 106 986 (11 429) 95 557
Profit for the period - - 102 180 102 180 (4 817) 97 363
Other comprehensive income - (2 559) - (2 559) 12 (2 547)
Issue of shares 1 - - 1 - 1
Disposal of subsidiaries - - (13 469) (13 469) 16 596 3 127
Balance at 30 June 2018 145 170 (2 957) 50 926 193 139 362 193 501
Profit for the period - - 3 449 3 449 373 3 822
Other comprehensive income - 5 176 - 5 176 - 5 176
IFRS 9 adjustment 2 - - (8 752) (8 752) - (8 752)
Balance at 31 December 2018 145 170 2 219 45 623 193 012 735 193 747
Condensed Consolidated Cash Flow Statement for the 6 months ended 31 December 2018
Reviewed Audited
6 months 6 months 15 months
ended 31 ended 30 ended 30
December September June
2018 2017 2018
Group Group Group
R’000 R’000 R’000
Cash generated by operations 68 891 100 789 343 682
Dividends received 5 500 - 3 000
Finance cost (122 138) (61 176) (203 723)
Taxation paid (10 527) (16 649) (33 647)
Net cash (outflow) / inflow from operating activities (58 274) 22 964 109 312
Purchase of property, plant and equipment (60) - (1 405)
Proceeds on disposal of property, plant and equipment 190 - -
Investment in intangible assets (19 915) - (80)
Proceeds on disposal of associate - - 10 000
Cash disposed of through sale of investment in subsidiary - (7 369) (6 754)
Investment in financial assets (2 494) - (327 801)
Proceeds from financial assets 5 987 - -
Prepayments of loans and advances received 293 331 56 381 303 081
Disbursement of loans and advances (631 290) (377 228) (921 003)
Other - (193) -
Net cash outflow from investing activities (354 251) (328 409) (943 962)
Proceeds on preference share issues 266 919 294 702 685 667
Proceeds from other financial liabilities 199 464 - 184 287
Repayment of other financial liabilities (58 065) (4 664) (13 452)
Finance lease payments (68) - (1 141)
Net cash inflow from financing activities 408 250 290 038 855 361
Movement in cash and cash equivalents for the period (4 275) (15 407) 20 711
Cash and cash equivalents at the beginning of the period 44 305 26 481 26 480
Effect of exchange rate movement on cash balances (2 745) 123 (2 886)
Cash and cash equivalents at the end of the period 37 285 11 197 44 305
Notes to the Condensed Consolidated Financial Statements for the 6 months ended
31 December 2018
1. ACCOUNTING POLICIES, BASIS OF PREPARATION OF RESULTS AND REVIEW OPINION
The condensed consolidated interim financial statements are prepared in accordance the JSE Limited
Listings Requirements for interim reports and the requirements of the Companies Act of South Africa
and in accordance with International Financial Reporting Standards (IAS) 34 Interim Financial
Reporting, 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 Financial Reporting
Standards Council.
These interim financial results have not been reviewed or reported on by the Company’s auditors.
The accounting policies applied in the preparation of the condensed consolidated financial statements
are in terms of IFRS and are consistent with those applied in the previous consolidated annual financial
statements.
The results of the Group were prepared under supervision of the Group’s financial director, Mr DP van
der Merwe CA (SA).
2. NEW STANDARDS AND INTERPRETATIONS
With the adoption of IFRS 9 - Financial Instruments (“IFRS 9”) from 1 July 2018, the start of the
current interim reporting period, the Group’s accounting policies were adjusted to comply with the
standard.
IFRS 9 replaces the provisions of IAS 39 Financial Instruments: Recognition and Measurement
(“IAS 39”) that relate to the recognition, classification and measurement of financial assets and
financial liabilities, derecognition of financial instruments, impairment of financial assets and hedge
accounting.
IFRS 9 introduces an expected credit loss model replacing the incurred loss impairment model
contained in IAS 39 for financial periods beginning on or after 1 January 2018
IFRS 9 adoption occurs without the need to restate comparative information (except for certain
aspects of hedge accounting), as allowed in terms of the standard. The reclassification and the
adjustments arising from the new impairment rules are consequently recognised in the opening
statement of financial position on 1 July 2018.
The following table show the adjustments recognised for each individual line item, these adjustments
are explained in more detail below.
Extract of the 1 July 2018
30 June 2018
Statement of IFRS 9 adjustment Amended opening
Financial Position As originally presented
balance
Assets
Loans and advances 1 238 352 (12 116) 1 226 236
Other financial assets 832 188 - 832 188
Deferred tax asset 49 635 3 364 52 999
Other assets 115 629 - 115 629
Total assets 2 235 804 (8 752) 2 227 052
Preference shares 1 701 975 - 1 701 975
Other liabilities 340 328 - 340 328
Liabilities 2 042 303 - 2 042 303
Share Capital 145 170 - 145 170
Reserves (2 957) - (2 957)
Retained earnings 50 926 (8 752) 42 174
Attributable to
193 139 (8 752) 184 387
owners of the parent
Non-controlling interest 362 - 362
Total equity 193 501 (8 752) 184 749
Classification and measurement
On 1 July 2018 management assessed which business models applied to the financial assets held by
the Group and classified its financial instruments into the appropriate IFRS 9 categories. The Group’s
financial assets remain classified as carried at amortised cost.
Impairment of financial assets
The Loans and Advances and Trade Receivables financial asset classes of the Group is impacted by
IFRS 9’s new expected credit loss model and as a result the Group revised its impairment
methodology in terms of the requirements of IFRS 9. The impact of the change in impairment
methodology on the Group’s retained earnings and equity is disclosed above.
The Group applies the IFRS 9 expected loss model by formulating the expected future losses of
customers based on past behaviour, current exposure and future economic scenarios. Loans and
Advances and Trade Receivables are segmented into sub-risk categories to isolate different risk
behaviours across various countries and industries, as follows:
- Category 1 – Fully performing receivables
- Category 2 – Receivables with a significant increase level of credit risk
- Category 3 – Receivables that are in default
The most notable change in the impairment modelling is the forward-looking nature of the model as
opposed to the incurred nature of the previous model. The categories were assessed for impairment
retrospectively.
3. RECLASSIFICATION OF COMPARATIVE FIGURES
The Group announced a rationalisation process during 2016 designed to streamline and re-align its
operations to sustain increased strategic growth. The process continued into the 30 September
2017, the comparative period of the current interim reporting period.
The process resulted in the Group’s current structure focusing on the Credit, Equity Holdings and
Investment Services operations.
Certain of the comparative period’s figures have been reclassified to align the financial disclosures
to the revised Group structure with the objective of enhancing the users understanding of the
Ecsponent operations. It is, however, important to note that none of the comparative figures have
been restated and, as noted above, the accounting policies have been consistently applied.
Consolidated statement of financial position
Presented below are the 30 September 2017 Consolidated Statement of Financial
position figures before and after the reclassification.
- Column A contains the reclassified comparative figures for the period ended 30 September
2017, as disclosed in the 31 December 2018 interim financial statements.
- Column B contains the figures as originally disclosed in the 30 September 2017 interim
financial statements.
The following reclassifications occurred:
- Loans and Advances
An additional asset class “Loans and Advances” has been disclosed in the statement of
financial position and as a separate note (refer note 6 below). These assets were
previously disclosed as part of the other financial asset class in the comparative results.
The additional asset class was added to distinguish the Credit operation’s assets from
those of the Equity Holding assets, which continue to be included under “Other Financial
Assets”.
Column A Column B
R’000 R’000
Assets
Non-current assets
Loans and advances 895 770 n/a
Other financial assets - 895 770
Current assets
Loans and advances 184 638 n/a
Other financial assets - 184 638
Total 1 080 408 1 080 408
- Preference share liability
An additional liability classification “Preference shares” has been disclosed in the statement
of financial position and as a separate note (refer note 8 below). The preference share
liability was previously disclosed as part of the other financial liability classification in the
comparative results.
Column A Column B
R’000 R’000
Liabilities
Non-current liabilities
Preference shares 1 232 459 n/a
Other financial liabilities - 1 239 741
Current liabilities
Preference shares 12 438 n/a
Other financial liabilities 7 282 12 438
Total 1 252 179 1 252 179
- Deferred revenue
Deferred revenue is no longer a significant component of the core operations due to the
rationalisation process. As a result, the deferred revenue liability has been included in the
trade and other payable balance and disclosed separately in the accounting policy note.
Column A Column B
R’000 R’000
Liabilities
Non-Current liabilities
Trade and other payables 3 431 n/a
Deferred revenue n/a 3 431
Total non-current liabilities 3 431 3 431
Current liabilities
Trade and other payables 26 350 26 131
Deferred revenue n/a 219
Total current liabilities 26 350 26 350
Consolidated statement of profit and loss
The following reclassification of the 30 September 2017 comparative figures in the consolidated
statement of profit or loss occurred:
- The nature of the Group’s core operation predominantly gives raise to interest, investment
and service income. The disclosure of “gross profit” in the statement of profit and loss has
become irrelevant to the Group results. The 30 June 2018 statement of profit or loss no
longer includes gross profit disclosure, and as a result, the comparative information has
been adjusted accordingly.
- The Equity Holdings operations invest with the objective to earn a combination of
investment income and capital appreciation. The comparative figures have been adjusted
to include the fair value adjustments and income from equity investments relating to
Ecsponent’s Equity Holdings operations in the Group’s operating results.
Refer below for an extract of the 30 September 2017 consolidated statement of profit or loss as
disclosed in the 30 September 2017 interim financial statements. The effect of the
abovementioned reclassifications to the comparative figures for 31 December 2018 is to increase
the operating profit to R128.2 million from the R113.3 million as disclosed in 30 September 2017
financial statements. The profit before taxation, however, remains unchanged at R45.4 million.
30 September
2017
R’000
Revenue 154 597
Cost of sales (18 115)
Gross profit 136 482
Other income 22 286
Operating expenses (45 422)
Operating profit 113 346
Fair value adjustments 15 127
Income from equity accounted investments (274)
Finance costs (82 832)
Profit before taxation 45 367
4. FINANCIAL INSTRUMENT – FAIR VALUE AND RISK MANAGEMENT
Financial instruments measured in the statement of financial position at fair value require disclosure.
Financial instruments of the Group carried at fair value are disclosed below.
Fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs
to the fair value measurements are observable and the significance of the inputs to the fair value
measurement in its entirety, which are described as follows:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities
that the entity can access at the measurement date;
- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable
for the asset or liability, either directly or indirectly; and
- Level 3 inputs are unobservable inputs for the asset or liability.
31 December 2018
Financial instrument carried at fair value Carrying Fair value - Fair value –
value - Level 1 Level 3
Designated at
fair value
R’000 R’000
R’000
Other financial assets 503 297 37 528 465 769
Reviewed 30 September 2017
Financial instrument carried at fair value Carrying Fair value - Fair value –
value - Level 1 Level 3
Designated at
fair value
R’000 R’000
R’000
Other financial assets - - -
Audited 30 June 2018
Financial instrument carried at fair value Carrying Fair value - Fair value –
value - Level 1 Level 3
Designated at
fair value
R’000 R’000
R’000
Other financial assets 766 461 280 700 485 761
Measurements of fair value – reconciliation of Level 1 fair values
Financial instrument carried at fair value Reviewed Audited
Group Group Group
31 December 30
2018 September 30 June
2017
2018
R’000 R’000
R’000
Fair value gains/(loss) recognised in profit and 122 614 - (82 557)
loss
Financial instrument carried at fair value Reviewed Audited
31 December 30 30 June
2018 September 2018
R’000 2017
R’000
R’000
Opening balance at the start of the period 280 700 - 232 980
Purchases & revaluations 9 339 - 88 234
Transfer of realised gains recognised in profit and 122 614 - (40 514)
loss
Disposal of financial instrument (375 125) - -
Balance at the end of the period 37 528 - 280 700
Measurements of fair value – reconciliation of Level 3 fair values
Other financial assets designated as at fair value through profit and loss
Financial instrument carried at fair value Reviewed Audited
31 December 30 30 June
2018 September
2017 2018
R’000
R’000 R’000
Fair value (loss)/gains recognised in profit and (19 992) - 225 702
loss
Financial instrument carried at fair value Reviewed Audited
31 December 30 30 June
2018 September
2017 2018
R’000
R’000 R’000
Opening balance at the start of the period 485 761 - -
Purchases & revaluations - - 260 059
Transfer of realised gains recognised in profit and (19 992) - 238 904
loss
Impairment - - (13 202)
Balance at the end of the period 465 769 - 485 761
Measurements of fair value – valuation techniques and significant unobservable inputs
The following table reflects the valuation techniques used in measuring Level 3 fair values, as well as
the significant unobservable inputs used:
Type Valuation technique Significant unobservable
inputs
Option agreement The Black Scholes formula - A 0% dividend yield
was applied to determine on the underlying
the value of the European listed equity was
option contract. assumed
- A two year period
of historic price
history was used to
calculate average
price volatility at
46.36%
- A risk free rate of
0.2% based on
Euro bonds was
applied.
- Option strike price
of Euro 18
- 31 December 2018
spot Euro rate to
convert to reporting
currency
Preference shares Dividend discount model to - Dividend growth rate
determine the present of 0%
value of - 22% discount rate
future dividend flows. - Actual dividend
payments
Capitis Equities - S12J portfolio Each individual asset class - Discount rate of 22%
within the portfolio’s fair - 0% dividend yield
value was determined
FINANCIAL INSTRUMENTS
The carrying amount of all significant financial instruments approximates the fair value.
FINANCIAL RISK MANAGEMENT
The Group's financial risk management objectives and policies are consistent with those disclosed in
the consolidated annual financial statements as at and for the year ended 30 June 2018.
5. INVESTMENT IN ASSOCIATES
Reviewed Audited
31 30 30 June
December September 2018
2018 2017
Group
Group Group
R‘000 R‘000 R‘000
Cost of investment in associates 374 146 273 559 22 119
Reclassification from other financial assets 375 125 -
Reclassification from investment in - - 10 000
subsidiary
749 271 273 559 32 119
Share of post-acquisition reserves net of
dividends received (851) (274) (1 173)
Disposal of investment in associate - - (9 446)
748 420 273 285 21 500
Total investment in associates
At 31 December 2018 the Group had significant influence over MyBucks S.A. Limited (“MyBucks”)
and Ecsponent Financial Services Ltd (“Ecsponent Zambia”) by virtue of its interest in these
companies shareholding and voting powers.
Details of the Group’s material associates are as follows:
Proportion of
Proportion of voting
Principl Place of ownership interest
Name of power (%)
e incorporati (%)
associate
activity on Dec Sept June Dec Sept June
2018 2017 2018 2018 2017 2018
MyBucks S.A Financial
Limited Services Luxembourg 24.3% 9.4% 12.1% 24.3% 22.2% 12.1%
Ecsponent Financial
Financial Services
Services Ltd Zambia 25.0% 25.0% 25.0% 25.0% 25.0% 25.0%
Reviewed Audited
31 30 30 June
December September 2018
2018 2017
Group
Group Group
R‘000 R‘000 R‘000
MyBucks S.A. Limited
Equity method of accounting 727 152 269 861
Fair value 727 152 269 861
Ecsponent Financial Services Ltd
Equity method of accounting 21 268 3 424 21 500
Fair value (unlisted) 28 823 3 424 27 469
The financial period end of MyBucks and Ecsponent Financial Services Ltd (Zambia) is 30 June
annually. The financial management accounts of these entities were used for the purpose of applying
the equity method of accounting for the interim period to 31 December 2018.
Increase holding in MyBucks
By 31 December 2018 the Group held 24.3% of the MyBucks issued share capital after increasing
its interest in MyBucks in a range of stepped acquisitions from its initial investment on 30 March
2017.
At 30 September 2017 the Group had a direct equity holding of 9.4% in Mybucks. Ecsponent
indirectly controlled a further 12.8% of the total voting rights in terms of a voting pool agreement
with a customer of Ecsponent. Via the direct equity holding and the voting pool agreement Ecsponent
controlled 22.2% of the MyBucks voting powers and as a result classified MyBucks as an associate
in the 30 September 2017 results.
The Group acquire a further stake in MyBucks during February 2018 increasing its shareholding to
12.1% at 30 June 2018. The voting pool arrangement was, however, cancelled prior to the period
end resulting in the Group losing control of the voting pool shares and significant influence. The
MyBucks investment was accordingly classified as a financial instrument held at fair value in the
30 June 2018 audited results.
Ecsponent continued to acquire additional shares during the current interim period and increased its
shareholding to 24.3% effective on 14 December 2018, the date on which the final condition
precedent was fulfilled to acquire a further 11.8% or 1 498 600 shares in MyBucks.
The MyBucks investment was classified as a financial instrument at fair value at the start of the
current interim period until the acquisition on 14 December 2018. In determining the cost of the
MyBucks associate investment for equity accounting purposes the fair value of the existing holding
together with the cost of the additional MyBucks shares was classified as the cost of the associate.
Transfer out of level 1
The fair value of the MyBucks investment classified at level 1 at 30 June 2018 was transferred to
level 3 for the interim reporting period prior to the transfer to the cost of the associate on
14 December 2018.
Management deemed the transfer to level 3 appropriate due to the inactive market, with thin trading
volumes of less than 0.5% of the number of MyBucks shares in issue during the 6 months interim
period. In addition, the volume of MyBucks shares traded during the interim period reduced by 40%
in comparison to the volumes traded in the preceding six-months.
Summarised financial information for the 6 months ended 31 December 2018
Ecsponent
MyBucks
Zambia
R‘000 R‘000
Post-tax loss from continuing operations (70 543) (931)
Total comprehensive loss (78 792) (931)
Total assets 3 468 551 40 383
Total liabilities 3 194 478 60 159
6. LOANS AND ADVANCES
Reviewed Audited
Group Group Group
31 30 September 30 June
December 2017 2018
2018
R ‘000 R ‘000 R ‘000
Loans and advances carried at amortised cost
Business credit 1 308 386 1 080 408 1 281 443
The business funding advances are secured, via a
cession of the underlying equity and/or assets with
targeted security cover ranging between 100% – 150%.
The advances bear interest at fixed interest rates based
on the entity risk profile, ranging between 19% – 28%
(Sept 2017: 24% – 30%) and repayment terms are
facility specific, ranging between 2 – 3 years.
Supply chain funding 34 553 - 36 788
Enterprise development and supply chain advances
are of short-term nature with an average transaction
cycle of 15 – 60 days. These advances provide high
yielding annualised returns. Ecsponent secures funding
via the terms of the transactions and where appropriate
additional covering security is obtained.
Total loans and advances 1 342 939 1 080 408 1 318 231
Credit Impairments (58 784) - (79 879)
Impairments for non-performing loans and (23 262) - (22 289)
advances
Impairments for performing loans and advances (35 522) - (57 590)
Net loans and advances after credit
impairments 1 284 155 1 080 408 1 238 352
Non-current assets 193 511 895 770 803 599
Current assets 1 090 644 184 638 434 753
Total Loans and Advances 1 284 155 1 080 408 1 238 352
7. OTHER FINANCIAL ASSETS
Reviewed Audited
Group Group Group
31 December 30 30 June
2018 September 2018
2017
R ‘000 R ‘000 R ‘000
At fair value through profit and loss –
designated
Option agreement 218 912 - 238 904
In June 2018, the Group entered into a put option
agreement with MHMK Group Limited and
Sunblaze Investment Holdings Incorporated, the
Option Issuers. In terms of the agreement the
Group holds an unconditional and nonexclusive
option to require the Option Issuers to purchase,
jointly or severally, all or any portion of the Option
Shares, being the total number of MyBucks SA
ordinary shares held by Ecsponent as at 31
December 2021, at an Option Strike price of €18.
The option can be exercised directly after the
Option Period’s expiration date being 31
December 2021, during the 30-day Option
Exercise Period which follows. The Black-Scholes
model was used to value the investment at year
end.
Preference shares 100 000 - 100 000
The preference share investment comprises 1 666
667 preference shares held in VSS Financial
Services (Pty) Ltd (“VSS”). The preference shares
are cumulative perpetual instruments with VSS
holding the right to redeem or to convert to an
alternative class of share. Dividends are declared
at the discretion of the VSS board.
Capitis Equities (Pty) Ltd 146 857 - 146 857
The company invested in a Section 12J company,
Capitis Equities (Pty) Ltd, by acquiring a 19%
stake in the ordinary shares of the entity. The
company further invested in the qualifying 12J
investment portfolio of Capitis. The Board
assesses the portfolio’s fair value on a regular
basis and at a minimum at each reporting period.
Listed shares – Go Life
The Group acquired 68.2 million ordinary shares 37 528 - 43 740
in Go Life International, a healthcare company
registered in the Republic of Mauritius. The
Company’s primary listing is on the Mauritian
stock exchange with a secondary listing on the
JSE’s Alt X.
Listed shares – MyBucks - - 236 960
The Group acquired foreign denominated listed
equities of the issued share capital of the Mybucks
Group, as part of its private equity portfolio. The
shares are listed on the Frankfurt stock exchange.
Due to the additional investment in the listed
equities in the current 6-month period, this
investment has been reclassified to an Investment
in Associate as at 31 December 2018.
Other Financial Assets at amortised cost
Getbucks Botswana – Bond 66 855 - 65 727
Bond issued by GetBucks Botswana, listed on the
Botswana stock exchange. The bond has a fixed
coupon rate of 18% per annum and matures on 31
December 2021.
Total Other Financial Assets 570 152 - 832 188
Non-current assets
At fair value through profit and loss – 465 769 - 485 761
designated
At amortised cost 65 976 - 51 471
531 745 - 537 232
Current assets
At fair value through profit and loss – 37 528 - 280 700
designated
At amortised cost 879 - 14 256
38 407 294 956
Total Other Financial Assets 570 152 - 832 188
8. PREFERENCE SHARES
Ecsponent’ s business model requires funding for both organic business growth and to pursue further
acquisitions. Funding is deployed in the growth of credit assets and the acquisition of new equity
investments. Preference shares are considered a reliable source of funding for these on-going
business needs and accordingly the Company has registered a R5 billion preference share
programme (“the programme”). The Programme was approved by the JSE on 8 September 2014
and again on 15 December 2015. By 31 December 2018 Ecsponent Limited had received subscription
investments of R1.6 billion from the South African programme and a further combined R262 million
in the Swaziland and Botswana markets.
The preference share capital is classified as debt and separately disclosed in the Condensed
Consolidated Statement of Financial Position as at 31 December 2018 in line with the principles of
IFRS. Consequently, the preference share dividends are classified as finance costs and disclosed as
such in the Condensed Consolidated Statement of Profit and Loss and Other Comprehensive Income
for the 6-month period ended 31 December 2018.
Reviewed Audited
Group Group Group
31 30 September 30 June
December 2017 2018
2018
R ‘000 R ‘000 R ‘000
Held at amortised cost
Preference shares issued by Ecsponent
Limited (South Africa)
Preference share – Class A 76 069 73 523 75 316
Initial issue price redeemable after five years. Monthly
dividends are paid at a rate of 10% per annum.
Preference share – Class B 543 694 280 628 417 931
Preference share redeems at 170% of the initial issue
price after five years. No monthly dividends are paid.
Preference share – Class C 718 881 703 744 713 021
Initial issue price redeemable after five years. Monthly
dividends are paid at a rate of prime plus 4% per
annum.
Preference share – Class D 250 091 935 137 414
Initial issue price redeemable after five years. Monthly
dividends are paid at a rate of 12.5% per annum.
Preference share – Class E 149 511 - 86 311
Initial issue price redeemable after five years. Monthly
dividends are paid at a rate of 11.25% per annum.
Preference share – Class G 4 104 - 3 007
Initial issue price redeemable after five years. Monthly
dividends are paid at a rate of 10% per annum.
Preference shares issued by Ecsponent
Swaziland Limited
Preference share – Class A 139 816 84 960 139 878
Five-year income provider with a variable rate
redeemable, convertible unit of E1 000 comprising E1
preference share and E999 claim. Rate of 15% paid
monthly.
Preference share – Class B 120 384 82 168 111 303
Five-year capital growth provider with a zero-rate
redeemable, convertible unit of E1 000 comprising E1
preference share and E999 claim. Redeem at the end
of five years at E2 000.
Preference shares issued by Ecsponent
Botswana Limited
Preference share – Class A 13 932 15 077 13 560
Five-year income provider with a variable rate
redeemable, convertible unit of P1 000 comprising P1
preference share and P999 claim. Rate of 15% paid
monthly.
Preference share – Class B 4 621 3 862 4 234
Five-year capital growth provider with a zero-rate
redeemable, convertible unit of P1 000 comprising P1
preference share and P999 claim. Redeem at the end
of five years at P2 000.
Total preference shares 2 021 103 1 244 897 1 701 975
Non-current liabilities 1 920 795 1 232 459 1 694 362
Current liabilities 100 308 12 438 7 613
Total preference shares 2 021 103 1 244 897 1 701 975
Reconciliation of the number of preference shares in issue:
Ecsponent Limited (South Africa)
Class A Class B Class C Class D Class E Class G
Reported at the
beginning of the
period 783 069 3 688 644 7 344 514 1 418 825 892 920 31 110
Issues during the
period - 732 346 - 744 711 455 530 11 200
Reserved for issue at
period end - 247 220 - 412 050 215 880 -
783 069 4 668 210 7 344 514 2 575 586 1 564 330 42 310
Weighted average
issue price per
share (Rands) 96.80 100.00 100.00 100.00 100.00 100.00
Ecsponent Swaziland Limited
Class A Class E
Reported at the beginning of the period 148 208 92 705
Redemption of preference shares during the period (858) (247)
147 350 92 458
Weighted average issue price per share (Rand) 1.00 1.00
Ecsponent Botswana Limited
Class A Class B
Reported at the beginning of the period 10 350 2 027
Repayment of preference shares during the period - -
10 350 2 027
Weighted average issue price per share (Pula) 1.00 1.00
Weighted average issue price per share (Rand) 1.31 1.31
9. NOTE PROGRAMME
Reviewed Audited
Group Group Group
31 30 September 30 June
December 2017 2018
2018
R ‘000 R ‘000 R ‘000
Held at amortised cost
Notes issued by Ecsponent Limited (South
Africa)
Note 1 – Fixed Rate 10
Initial issue price redeemable after three years. Monthly
interest is paid at a rate of 9% per annum.
Note 2 – Fixed Rate 388
Initial issue price redeemable after three years. Monthly
interest is paid at a rate of 10% per annum
Note 3 – Fixed Rate 4 114
Initial issue price redeemable after three years. Monthly
interest is paid at a rate of 12% per annum
Note 4 – Zero Coupon 879
Note redeems at 137.49% of the initial issue price after
three years. No monthly interest is paid.
Note 5 – Floating Rate 581
Initial issue price redeemable after three years. Monthly
interest is paid at a rate of prime plus 1.5% per annum.
Total notes in issue 5 972
Non-current liabilities 5 972
Current liabilities -
Total notes in issue 5 972
Reconciliation of the number of listed notes in issue:
Ecsponent Limited (South Africa)
Fixed rate Fixed rate Fixed rate Floating Zero –
Note 1 Note 2 Note 3 rate Note Coupon
Note
Reported at the - - - - -
beginning of the
period
Issue of listed Notes 10 000 - - 100 000 100 000
during the period
Listed Notes reserved - 400 000 1 500 000 500 000 800 000
for issue at period end
10 000 400 000 1 500 000 600 000 900 000
Weighted average
issue price per Note 100.00 100.00 100.00 100.00 100.00
(Rands)
10. OTHER FINANCIAL LIABILITIES
The other financial liabilities category incorporates external funding facilities with either banks,
individuals or corporate funding entities. Provided below is the detail regarding the Group’s other
financial liabilities:
Reviewed Audited
Group Group Group
31 December 30 30 June
2018 September 2018
2017
R ‘000 R ‘000 R ‘000
Held at amortised cost
Scipion Active Trading Fund 144 774 - 138 385
USD 10 million term loan facility that bears interest
at 10% plus 12-month LIBOR screen rate
amortised and payable monthly. 50% of the capital
is payable by May 2021 and the remaining 50% is
payable by July 2021.
This loan is secured over 1 100 000 MyBucks SA
Limited shares
Norsad Finance (Botswana) Limited 70 393 - -
USD 5 million term loan facility that bears interest
at the three-month LIBOR plus 11% per annum,
payable quarterly. The loan is repayable during
July 2022.
Capitis Equities (Pty) Ltd 90 484 - -
This loan facility bears interest at 8% per annum
and is repayable on 28 February 2019.
GetBucks Ltd (Mauritius) 27 079 - -
USD 2.5 million loan facility bears interest at 17%
per annum and has no fixed terms of repayment.
Ever Prosperous Worldwide Limited 29 528 - 72 432
USD 6 million loan is unsecured, bears interest at
2.5% per month and was repayable by 31
December 2018, terms extended to repayment in
full by 31 March 2019.
Colyn Promissory Note 12 654 - 12 138
This loan bears interest at 8% per annum, interest
is payable monthly, and the capital is repayable by
20 March 2021.
Ecsponent Eswatini Collective Investment 2 784 - -
Scheme
This loan facility bears interest at 15% per annum,
payable monthly. The loan is repayable within 12
months.
Esperite NV Group - 6 390 -
The loan was unsecured, interest free and
repayable on demand.
Other 2 892 -
Total Other Financial Liabilities 377 698 7 282 222 955
Non-current liabilities 227 491 7 282 150 523
Current liabilities 150 207 - 72 432
377 698 7 282 222 955
11. RECONCILIATION OF THE TAX EXPENSE
Reconciliation between the applicable tax rate and average effective tax rate.
Reviewed Audited
Group Group Group
31 30 30 June
December September 2018
2018 2017
% % %
Applicable tax rate 28.00 28.00 28.00
Disallowable charges - preference share dividends 31.63 45.51 26.73
Disallowable charges – penalties - - 0.01
Exempt income (8.13) - (0.51)
Effect of unused tax losses and tax offsets not
recognised as deferred tax asset - (2.94) -
Income from equity accounted investments - 0.17 (0.22)
Different tax rates applied in foreign subsidiaries 41.75 (1.67) (2.18)
Capital gains tax (0.39) (1.03) (5.10)
92.86 68.04 46.73
12. EARNINGS AND FULLY DILUTED EARNINGS PER SHARE
Reviewed Audited
Group Group Group
31 30 30 June
December September 2018
2018 2017
BASIC AND HEADLINE EARNINGS R’000 R’ 000 R’ 000
Basic earnings 3 449 33 697 102 810
Headline earnings 3 359 18 325 75 476
Basic and fully diluted earnings per share (cents)
attributable to equity holders of the parent 0.319 3.121 9.465
Headline and fully diluted headline earnings per
share (cents) attributable to equity holders of the
parent 0.311 1.698 6.991
Number of shares in issue 1 079 555 1 079 550 1 079 555
364 795 364
Weighted average number of shares 1 079 555 1 079 550 1 079 551
364 795 326
RECONCILIATION BETWEEN BASIC EARNINGS
AND HEADLINE EARNINGS
IAS 33 Basic earnings 3 449 33 697 102 180
IAS 16 (Profit) / Loss on disposal of property plant
and equipment (90) - 5
IAS 38 Impairment of intangible assets - 66 811
IFRS 3 Gain on disposal of subsidiary and/or
associate - - (399)
IFRS 5 Gain on disposal groups held for sale - - (3 905)
IFRS 5 Gain on disposal of discontinued operations - (15 438) (15 438)
IFRS 10 Gain on disposal of subsidiary - - (7 780)
Headline earnings 3 359 18 325 75 474
13. CONDENSED CONSOLIDATED SEGMENTAL INFORMATION
The segments identified are based on the operational and financial information reviewed by
management for performance assessment and resource allocation. There has been no change in the
basis of operational segmentation or in the basis of measurement of segment profit or loss since the
2018 annual financial statements.
The continued expansion of the Group has resulted in the need for geographic segmentation in
addition to the operational segmentation.
Period ended 31 December 2018
Operating Segment Total Assets Revenue Operating
profit / (loss)
R’ 000 R’ 000 R’000
Business credit 2 256 384 138 001 168 178
Investment services 2 201 529 181 669 172 408
Equity holdings 560 047 89 174 84 754
Corporate 4 385 12 617 3 952
Eliminations (2 247 167) (221 286) (211 146)
Discontinued operations - - -
Group total 2 775 178 200 175 218 146
Geographic Segment Total Assets Revenue Operating
profit / (loss)
R’ 000 R’ 000 R’000
South Africa 3 878 907 326 557 304 545
Botswana 795 499 24 437 57 292
Swaziland 188 669 61 636 57 930
Namibia - - -
Zambia - 26 (135)
Mauritius 159 270 8 805 9 660
Eliminations (2 247 167) (221 286) (211 146)
Discontinued operations - - -
Group total 2 775 178 200 175 218 146
Period ended 30 September 2017
Operating Segment Total Assets Revenue Operating
profit / (loss)
R’ 000 R’ 000 R’000
Business credit 1 597 124 198 122 204 576
Investment services 1 425 394 38 842 113 987
Equity holdings 318 269 18 701 13 275
Corporate 12 767 11 896 (9 017)
Eliminations (1 890 961) (104 089) (185 597)
Discontinued operations - (8 875) (23 878)
Group total 1 462 593 154 597 113 346
Geographic Segment Total Assets Revenue Operating
profit / (loss)
R’ 000 R’ 000 R’000
South Africa 2 579 809 213 948 249 596
Botswana 431 853 20 405 43 598
Swaziland 341 562 32 471 28 720
Namibia 330 330 104
Zambia - 407 803
Eliminations (1 890 961) (104 089) (185 597)
Discontinued operations - (8 875) (23 878)
Group total 1 462 593 154 597 113 346
Year ended 30 June 2018
Operating Segment Total Assets Revenue Operating
profit / (loss)
R’ 000 R’ 000 R’000
Business credit 1 422 870 497 576 363 354
Investment services 375 771 362 409 288 994
Equity holdings 617 150 41 336 138 955
Corporate 16 307 37 984 724
Eliminations (196 294) (472 321) (379 578)
Discontinued operations - (8 875) (7 040)
Group total 2 235 804 458 109 405 409
Geographic Segment Total Assets Revenue Operating
profit / (loss)
R’ 000 R’ 000 R’000
South Africa 1 448 080 792 554 550 965
Botswana 795 912 48 115 147 491
Swaziland 171 966 97 960 85 551
Namibia 194 508 (5)
Mauritius 2 112 168 8 025
Zambia 13 834 - -
Eliminations (196 294) (472 321) (379 578)
Discontinued operations - (8 875) (7 040)
Group total 2 235 804 458 109 405 409
14. RELATED PARTY DISCLOSURES
The Group entered related party transactions with its holding company and related subsidiaries during
the financial period. Below is a summary of the relevant balances and transactions in this regard:
Reviewed Audited
Group Group Group
31 30 30 June
December September 2018
2018 2017
R’000 R’000
R’000
Related party balances
Investment in associate companies 748 420 273 285 21 500
Other Financial Assets
Associate companies 166 856 - -
Loans owing (to) / by:
Associate companies 315 603 481 082 -
Shareholders with significant influence - (6 390) -
Amounts included in trade receivables / (trade
payables)
Associate companies - (4 347) -
Other financial assets
MHMK Capital Limited - option agreement 218 912 238 904
15. ACQUISITIONS
The following acquisitions / investments were concluded during the financial period:
MyBucks S.A. Limited
R352.1 million acquisition of an additional 1 498 600 MyBucks S.A. Limited shares at an average
price of Euro 14.25 per share. Total investment in MyBucks SA Limited ordinary shares after the
transaction amounts to 3 095 530 shares comprising a total holding of 24.3%.
The acquisition was approved by general meeting of Ecsponent shareholders during the period and
was effective on 14 December 2018.
GetBucks SMME Lending (Pty) Ltd
During the current 6-month period, the Group acquired 100% of a specialist finance company for R10
million to complement its SMME lending offerings. The company was subsequently renamed to
Ecsponent Business Credit (Proprietary) Limited.
16. CORPORATE ACTIONS
In addition to the transactions mentioned above the following corporate actions were implemented
during the period under review:
Capitis Equities
Shareholders approved on 5 September 2018 a further investment of up to R243 million in Capitis
Equities, a section 12J entity. The approval provides the Ecsponent directors with the authority to
increase its current investment of R156 million to a maximum of R400 million.
The board periodically re-evaluates the allocation of investment funding to its portfolio of
investments. At 31 December 2018 the Group had not utilised the approval to make any further
investments in Capitis Equities.
R10 billion Domestic Medium Term Note Programme
The company announced on 7 December 2018 the listing of the initial issue under its R10 billion
Domestic Medium Term Note Programme.
The initial issue comprised of:
- Fixed rate notes paying interest monthly at a rate of 9% per annum, with the capital
redeemable on 14 December 2021;
- Floating rate notes paying interest monthly at a rate of prime plus 1.5% per annum, with
the capital redeemable on 14 December 2021; and
- Zero coupon notes issued at an initial issue price of R100 with capital redeemable at
R137.49 on 14 December 2021, providing an implied yield of 10.66% per annum;
17. EVENTS AFTER THE REPORTING PERIOD
The directors are not aware of any material event, other than the matters listed below, which occurred
after the reporting date and up to the date of this report, which require disclosure.
Acquisition of Pink Orchid
Shareholders approved in the general meeting held on 22 January 2019 the acquisition of Pink Orchid
(Pty) Ltd a company incorporated in Mauritius for R185 million. The transaction resulted in Ecsponent
obtaining:
- A further 1 953 874 MyBucks shares increasing its holding to 39.7% of MyBucks; and
- 34.89% of Getbucks Zimbabwe Limited.
Recapitalisation of MyBucks and Ecsponent taking a controlling interest
Ecsponent concluded an agreement in March 2019 enabling it to take a controlling interest in the
Frankfurt-listed fintech company, MyBucks.
In terms of the agreement Ecsponent converts the loans it advanced to MyBucks’, together with
predetermined assets to the value of R450 million or EUR27,829,312 (at exchange rate of EUR16.17)
into MyBucks shares at a subscription price of EUR1.00 per MyBucks share.
The resultant issue of 27,829,312 MyBucks shares to Ecsponent, increase the Ecsponent shareholding
from 39,7% to a controlling stake, at an average price of EUR2.89 per share. The final shareholding
percentage being dependent on confirmation of the extent to which other shareholders participate in
the capitalisation.
The MyBucks acquisition is subject to, inter alia, Ecsponent obtaining shareholder approval for the
acquisition. The effective date of the acquisition will be the date of fulfilment of all conditions
precedent.
18. DIVIDENDS
No ordinary dividends have been declared or proposed for the year.
Preference Share dividends of R134 million accrued to investors for the 6 months ended 31
December 2018. The dividends are classified as finance costs and included in the finance cost
expense in the Condensed Consolidated Statement of Profit and Loss and Comprehensive Income.
The Company has six classes of preference shares in issue with the following summarised dividend
terms:
- Class A – 10% fixed rate monthly dividend;
- Class B – 0% monthly dividend, but redeeming at a rate equal to 170% of the Initial Issue
Price;
- Class C – prime plus 4% floating rate monthly dividend;
- Class D – 12.5% fixed rate monthly dividend;
- Class E – 11.25% fixed rate monthly dividend; and
- Class G – 10% fixed rate monthly dividend.
19. CONTINGENCIES
The directors are not aware of any material contingent liability which existed at the reporting date and
up to the date of this report that requires disclosure.
20. DIRECTOR CHANGES
Mr. G Manyere, appointed as non-executive vice chairman in March 2017 was appointed as an
executive director on 1 February 2019.
Mr. BR Topham resigned as an independent non-executive director on 31 January 2019.
21. COMPANY SECRETARY
L du Preez-Cilliers continued in office as the company secretary for the Group.
22. AUDITORS
At the Annual General Meeting held on 2 November 2018, shareholders reappointed Nexia SAB&T as
the independent external auditors of the Group for the 2019 financial year.
23. GOING CONCERN
The directors believe that the Group has adequate financial resources to continue in operation for the
foreseeable future and accordingly the Condensed Consolidated Interim Financial Statements for the 6
months ended 31 December 2018 have been prepared on a going concern basis. The directors have
satisfied themselves that the Group is in a sound financial position and that it has access to sufficient
equity and borrowing facilities to meet its foreseeable cash requirements.
The directors are not aware of any new material changes that may adversely affect the Group. The
directors are also not aware of any material non-compliance with statutory or regulatory requirements
or of any pending changes to legislation which may affect the Group.
For and on behalf of the Board
TP Gregory
Pretoria
26 March 2019
Directors: RJ Connellan* (Chairman), KA Rayner*, W Oberholzer*, P Matute #, G Manyere
(Executive Director), TP Gregory (Chief Executive Officer) and DP van der Merwe (Financial
Director).
(* Independent Non-Executives)
(# Non-Executive)
Company Secretary: L Du Preez-Cilliers
Registered Office: 43 Garsfontein Road, Waterkloof, Pretoria, 0145, PO Box 39660, Garsfontein
East 0060
Transfer Secretaries: Computershare Investor Services Proprietary Limited, (Registration number
2004/003647/07), 2nd Floor, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, (PO Box
61051, Marshalltown, 2107)
Auditors: Nexia SAB&T Inc.
Sponsor: Questco Corporate Advisory (Pty) Ltd
Date: 26/03/2019 09:52:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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