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Reviewed condensed consolidated results for the year ended 31 March 2019
Niveus Investments Limited
(Incorporated in the Republic of South Africa)
Registration number: 1996/005744/06
JSE share code: NIV
ISIN code: ZAE000169553
("the Company" or "the Group" or "Niveus")
REVIEWED CONDENSED CONSOLIDATED RESULTS FOR THE YEAR ENDED 31 MARCH 2019
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Reviewed Audited
31 March 31 March
2019 2018
R'000 R'000
ASSETS
Non-current assets 269 428 484 664
Property, plant and equipment 43 336 114 159
Investment properties 153 900 262 758
Goodwill - 11 714
Intangible assets 185 12 830
Interest in associates and joint arrangements 41 471 35 322
Other financial assets 24 014 38 779
Deferred taxation 6 522 1 040
Loans receivable - 8 062
Current assets 264 960 287 676
Trade and other receivables 19 836 27 806
Other 1 948 336
Cash and cash equivalents 243 176 259 534
Assets of disposal group classified as held for sale 36 777 855 273
Total assets 571 165 1 627 613
EQUITY AND LIABILITIES
Equity 473 474 1 400 212
Equity attributable to equity holders of the parent 380 558 924 356
Non-controlling interest 92 916 475 856
Non current liabilities 17 529 44 088
Deferred taxation 17 529 44 088
Current liabilities 65 419 183 313
Liabilities of disposal group classified as held for sale 14 743 -
Total equity and liabilities 571 165 1 627 613
Net asset value per share (cents) 319 776
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Audited
Reviewed Year ended
Year ended 31 March
31 March 2018
2019 Restated
% Change R'000 R'000
Revenue 6,2% 18 398 17 328
Operating expenses (41 439) (49 220)
EBITDA (23 041) (31 892)
Depreciation and amortisation (1 377) (24 580)
Share of losses of associates and joint arrangements (4 680) (2 084)
Investment income 23 562 81 205
Fair value adjustment of other financial assets (30 567) 5 539
Fair value adjustments of investment properties (111 640) 48 119
Impairment of assets (94) (142)
Impairment of investment in associate - (934)
Finance costs - (1 233)
(Loss) profit before taxation (147 837) 73 998
Taxation 34 954 (47 783)
(Loss) profit for the year from continuing operations (112 883) 26 215
Net result from discontinued operations 21 152 181 943
(Loss) profit for the year (91 731) 208 158
Attributable to:
Equity holders of the parent (55 452) 184 260
Non-controlling interest (36 279) 23 898
(91 731) 208 158
Reviewed Audited
Year ended Year ended
31 March 31 March
2019 2018
R'000 R'000
Reconciliation of headline earnings Gross Net Gross Net
Earnings attributable to equity holders of the parent (55 452) 184 260
Losses (gains) on disposal of plant and equipment 2 510 2 494 (907) (907)
Impairment of assets 928 545 4 003 4 003
Gains on disposal of subsidiaries (26 741) (26 741) (67 597) (67 597)
Fair value adjustment to investment property 111 640 50 394 (46 693) (36 235)
Headline (loss) profit -134,4% (28 760) 83 524
Audited
Reviewed Year ended
Year ended 31 March
31 March 2018
2019 Restated
Earnings per share (cents) -130,1% (46,5) 154,6
- Continuing operations (67,6) 92,2
- Discontinued operations 21,1 62,4
Headline earnings per share (cents) -134,4% (24,1) 70,1
- Continuing operations (23,1) 7,3
- Discontinued operations (1,0) 62,8
Diluted earnings per share (cents) -130,3% (46,5) 153,7
- Continuing operations (67,6) 91,7
- Discontinued operations 21,1 62,0
Diluted headline earnings per share (cents) -134,6% (24,2) 69,8
- Continuing operations (23,2) 7,4
- Discontinued operations (1,0) 62,4
Actual number of share in issue at end of year ('000) 119 163 119 163
Weighted average number of shares in issue ('000) 119 163 119 163
Weighted average number of shares in issue (diluted) ('000) 119 163 119 960
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Reviewed Audited
Year ended Year ended
31 March 31 March
2019 2018
R'000 R'000
(Loss) profit for the year (91 731) 208 158
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Foreign currency translation differences 21 828 (20 305)
Items that may not be reclassified subsequently to profit or loss
Change in use - revaluation of property - Gross - 52 184
Change in use - revaluation of property - Tax - (11 689)
Total comprehensive (loss) income (69 903) 228 348
Attributable to:
Equity holders of the parent (33 624) 187 298
Non-controlling interest (36 279) 41 050
(69 903) 228 348
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Reviewed Audited
Year ended Year ended
31 March 31 March
2019 2018
R'000 R'000
Balance at beginning of year 1 400 212 1 881 755
Total comprehensive (loss) income (69 903) 228 348
Equity-settled share-based payments (18 140) (781)
Effects of changes in holding (8 223) (16 608)
Business disposals 9 035 17 392
Capital reductions and dividends (839 507) (709 894)
Balance at end of year 473 474 1 400 212
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed Audited
Year ended Year ended
31 March 31 March
2019 2018
R'000 R'000
Cash flows from operating activities 7 257 554 873
Cash generated from operations 5 402 568 263
Net interest 24 031 68 557
Taxation paid (22 176) (81 947)
Cash flows from investing activities (20 959) (573 115)
Additions to property, plant and equipment (5 609) (92 187)
Proceeds on disposal of property, plant and equipment 1 234 2 700
Proceeds on disposal of investments 36 753 -
Investment in associates and joint arrangements (11 052) (45 962)
Business combinations and disposal of subsidiaries 565 (206 319)
Investment in financial assets (39 124) (217 348)
Other (3 726) (13 999)
Cash flows from financing activities (7 414) (430 958)
Dividends paid - (302 679)
Other financial liabilities - 122 361
Long-term funding repaid - (250 640)
Transactions with non-controlling shareholders (7 414) -
Decrease in cash and cash equivalents (21 116) (449 200)
At beginning of year 259 534 708 734
Foreign exchange differences 14 299 -
At end of year 252 717 259 534
Bank balances and deposits 243 176 259 534
Classified as held for sale 9 541 -
252 717 259 534
SEGMENTAL ANALYSIS
Audited
Reviewed Year ended
Year ended 31 March
31 March 2018
2019 Restated
R'000 R'000
Revenue 18 398 17 328
Other - 1 889
Property 18 398 15 439
EBITDA (23 041) (31 892)
Head office and other (24 730) (25 980)
Property 1 689 (5 912)
(Loss) profit before tax (147 837) 73 998
Head office and other (29 781) (51 405)
Property (118 056) 125 403
Headline earnings
Continuing operations (27 618) 8 680
Head office and other (32 527) (21 253)
Property 4 909 29 933
Discontinued operations (1 142) 74 844
Gaming and entertainment (1 142) 74 844
(28 760) 83 524
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of preparation and accounting policies
The results for the year ended 31 March 2019 have been prepared in accordance with International Financial Reporting Standards ("IFRS"),
IAS 34 - Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council, the requirements of the South African Companies Act, No. 71 of 2008
(as amended) and the Listings Requirements of the JSE Limited. The accounting policies of the Group are consistent with those applied for the year
ended 31 March 2018, except for the adoption of IFRS 9 and IFRS 15 in the current year, which did not have an impact on the results of the Group.
As required by the Listings Requirements of the JSE Limited, the Group reports headline earnings in accordance with Circular 4/2018 - Headline
Earnings, as issued by the South African Institute of Chartered Accountants. These financial statements were prepared under the supervision of the
financial director, Mr AF Pereira CA(SA).
Auditor's review
These condensed consolidated financial statements for the year ended 31 March 2019 have been reviewed by BDO South Africa Inc., who expressed an
unmodified review conclusion.
A copy of the auditor's review report is available for inspection at the Company's registered office together with the financial statements
identified in the auditor's report. The auditor's report does not necessarily report on all of the information contained in this announcement.
Shareholders are therefore advised that, in order to obtain a full understanding of the nature of the auditor's engagement, they should obtain a
copy of the auditor's report together with the accompanying financial information from the issuer's registered office.
Discontinued operations and disposal groups held for sale
- During June 2017, Niveus entered into an agreement with Tsogo Sun Holdings Limited to dispose of all of its interests in Vukani Gaming
Corporation Proprietary Limited ("Vukani"), Galaxy Gaming and Entertainment Proprietary Limited ("Galaxy") and all their associated entities, trusts
and businesses (collectively the "Gaming Businesses") to Tsogo subject to certain conditions precedent. These conditions were met in November 2017
and the disposal became effective. The results of these operations are included in discontinued operations in the prior year.
- During June 2017, the Group disposed of subsidiaries Jacaranda Royal Casino Limited, VSlots Lesotho (Proprietary) Limited and VSlots Swaziland
(Proprietary) Limited. The results of these operations were included in discontinued operations in the prior year.
- On 15 June 2018 the Group disposed of the entire share capital of Niveus Invest 1 Proprietary Limited, the owner of the Grand Oasis Casino in
Kuruman, Northern Cape, for final net consideration of R93,5 million. The results of these operations are classified under discontinued operations
in the current and prior year.
- The Group disposed of its entire interests in Niveus Invest 13 Proprietary Limited and Slots and Keno Limited, effective 1 April 2018 and
31 May 2018, respectively, for total consideration of R5 million. The results of these operations have been reclassified to discontinued operations
in the current and prior year.
- During March 2019 the Company initiated the process to dispose of its online and retail sportsbetting interests. The assets and liabilities of
these operations have therefore been reclassified to disposal groups held for sale in the current year and the results of its operations to
discontinued operations in the current and prior year.
The results of discontinued operations were as follows:
Audited
Reviewed Year ended
Year ended 31 March
31 March 2018
2019 Restated
R'000 R'000
Profit relating to discontinued operations
Revenue 1 079 80 998
Net gaming win 77 246 944 109
Other income and operating costs (79 363) (772 473)
Share of losses of associates and joint arrangements - (5 085)
Investment income 488 8 410
Depreciation and amortisation (3 932) (60 590)
Asset impairments (834) (18 027)
Fair value adjustments of investment properties - (1 426)
Gain on disposal of business 26 741 86 050
Foreign currency translation reserves reclassified to profit and loss - (18 454)
Finance costs (17) (19 815)
Profit before taxation 21 408 223 697
Taxation (256) (41 754)
Profit from discontinued operations 21 152 181 943
Cash flows from discontinued operations
Cash flows from operating activities 5 713 418 789
Cash flows from investing activities (1 434) (483 768)
Cash flows from financing activities - 170 644
4 279 105 665
Proceeds, net cash flow and analysis of assets and liabilities on disposal
Property, plant and equipment 59 043
Other non-current assets 14 790
Cash and cash equivalents 4 435
Other current assets 2 346
Current liabilities (17 869)
62 745
Non-controlling interest 9 035
Profit on disposal 26 741
Disposal proceeds 98 521
Set-off against existing liability (93 521)
Cash and cash equivalents at date of disposal (4 435)
Net cash inflow 565
Revaluation of investment properties
Management of the La Concorde group concluded a review of the carrying value of its investment properties during March 2019. Current zoning and
market conditions were considered. Valuations on these properties resulted in the following downward revaluations:
Carrying value Fair value Carrying value
before revaluation adjustments at 31 March 2019
R'000 R'000 R'000
Erf 31403, Main Street House, Paarl, Western Cape 5 000 (1 000) 4 000
Erf 11919, De Hoop Farm, Paarl, Western Cape 25 000 (11 800) 13 200
Erf 31366, Picardie Farm, Paarl, Western Cape 35 000 (26 000) 9 000
Erf 8677, Paarl, Western Cape 24 000 (11 000) 13 000
Erf 8676, Paarl, Western Cape 76 182 (26 182) 50 000
Erf 13004, Paarl, Western Cape 97 500 (35 000) 62 500
Various erven 2 858 (658) 2 200
265 540 (111 640) 153 900
COMMENTARY
During the prior financial year Niveus disposed of its limited payout and bingo operations. It also utilised the majority of cash and promissory
notes held by the La Concorde Group ("La Concorde") to purchase an interest in Hosken Passenger Logistics and Rail Limited, which interest was
distributed to shareholders during April 2018.
The Group received regulatory approval to dispose of its interest in the Grand Oasis Casino during June 2018, resulting in the conclusion of the
disposal of the Group's limited payout, bingo and casino operations to Tsogo Sun Holdings.
Niveus's remaining investments consist significantly of its interests in La Concorde, online and retail sports betting operator, BETcoza, and golf
ball tracking technology company, Alphawave Golf.
La Concorde
The assets of La Concorde consist mainly of investment property, art and cash, as well as HPL&R shares acquired during the acquisition and
distribution of the Group's interest in that company. The La Concorde office building is nearly fully tenanted and improved utilisation of the
Laborie estate's existing facilities is being planned. Further development of other properties is being considered, however, the current zoning of
certain properties will result in significant delays.
BETcoza
Niveus has an interest in online sports betting and retail sports betting licences of which five are currently operational. While certain key
performance indicators of the online business has been encouraging, further scale is required to ensure it is less vulnerable to fluctuations in
gross gaming revenue. The further roll out of retail licences will require significant funding and additional management expertise at site level.
The Company has initiated the process of disposing of these businesses, although no formal negotiations have been entered with counterparties.
Alphawave
Niveus invested in a start-up investment, developing radar tracking products in the golf industry, during the previous financial year. Development
progress is in line with planned targets. Due to the early phase nature of this business, further investment will be required to reach full
commercial viability.
CHANGES IN DIRECTORATE
Mr Andre van der Veen resigned as non-executive director effective 1 August 2018. Ms Muriel Loftie-Eaton resigned as executive director and CEO on
1 August 2018, Mr Yunis Shaik replacing her as CEO effective the same date. Effective 8 February 2019, Mr Shaik resigned as CEO and Ms Lael Bethlehem
was appointed as an executive director and CEO on the same date. Ms Carolyn Kristal resigned as financial director effective 1 July 2018, replaced
by Mr Cisco Pereira from the same date.
DIVIDEND
The directors have resolved not to declare a final dividend.
JA Copelyn LI Bethlehem
Chairman Chief executive officer
23 May 2019
Paarl
Directors: LI Bethlehem*, JA Copelyn+, ML Molefi#, JG Ngcobo#, AF Pereira*, Y Shaik*, RD Watson#
(* executive + non-executive # independent non-executive)
Company secretary: HCI Managerial Services Proprietary Limited
Transfer secretaries: Computershare Investor Services Proprietary Limited
Sponsor: Investec Bank Limited
Date: 23/05/2019 02:35:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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