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NICTUS LIMITED - Abridged report for the year ended 31 March 2019, notice of AGM and the availability of the B-BBEE report

Release Date: 28/06/2019 09:00
Code(s): NCS     PDF:  
 
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Abridged report for the year ended 31 March 2019,  notice of AGM and the availability of the B-BBEE report

Nictus Limited
(Incorporated in the Republic of South Africa) 
(Registration number: 1981/011858/06)
JSE Share code: NCS
ISIN Code: NA0009123481
("Nictus" or "the company" or "the group")

Abridged report relating to the audited financial results for 
the year ended 31 March 2019, details of the notice of the annual 
general meeting and availability of the B-BBEE annual compliance report

Abridged consolidated statement of financial position as at 31 March 2019

Figures in R'000                                      2019         2018
Assets
Property, plant and equipment                       18 026       18 051
Intangible assets                                    1 201          118
Investments                                         28 640       11 340
Deferred tax assets                                  3 253        3 020
Loans and receivables                                4 485        5 387
Non-current assets                                  55 605       37 916
Inventories                                         10 119       10 993
Loans and receivables                               38 085       44 226
Trade and other receivables                        401 190      358 645
Investments                                         93 156       98 809
Cash and cash equivalents                           64 640       89 717
Current tax receivable                                  70            - 
Current assets                                     607 260      602 390
Total assets                                       662 865      640 306
Equity and liabilities
Stated capital                                      25 969       48 668
Revaluation reserve                                  7 983        7 983
Retained earnings                                   65 147       46 076
Equity                                              99 099      102 727
Liabilities
Deferred tax liabilities                             2 633        2 400
Non-current liabilities                              2 633        2 400
Trade and other payables                            11 478       10 974
Insurance contract liability                       549 655      524 193
Current tax payable                                      -           12
Current liabilities                                561 133      535 179
Total liabilities                                  563 766      537 579
Total equity and liabilities                       662 865      640 306


Abridged consolidated statement of profit or loss and other comprehensive 
income for the year ended 31 March 2019

Figures in R'000                                      2019         2018
Revenue                                             50 752       47 361
Cost of sales                                      (25 468)     (26 470) 
Gross profit                                        25 284       20 891
Other income                                           734        2 259
Investment income from operations                   44 190       42 505
Operating expenses                                 (50 594)     (48 258) 
Administrative expenses                            (17 263)     (17 128) 
Results from operating activities                    2 351          269
Investment income                                    4 192        4 601
Profit before taxation                               6 543        4 870
Taxation credit                                          -          542
Profit for the year                                  6 543        5 412
Other comprehensive income                               -            - 
Total comprehensive income for the
year                                                 6 543        5 412
Profit attributable to:
Owners                                               6 543        5 412
Total comprehensive income attributable to:
Owners                                               6 543        5 412
Basic earnings per share (cents)                     10,60         8,17
Diluted basic earnings per share
(cents)                                              10,60         8,17


Abridged consolidated statement of cash flows for the year 
ended 31 March 2019

Figures in R'000                                      2019         2018
Cash flows from operating activities
Cash utilised by operations                        (57 908)     (23 070) 
Investment income received from operations          42 958       40 709
Dividends received                                   1 232        1 796
Dividends paid                                      (1 988)      (1 988) 
Tax paid                                               (82)      (1 109) 
Net cash (utilised by)/generated from
operating activities                               (15 788)      16 338
Cash flows from investing activities
Acquisition of property, plant and
equipment                                             (629)        (875)
Proceeds on sale of property, plant and
equipment                                              169            - 
Acquisition of intangible assets                    (1 353)        (145) 
Acquisition of investments                         (51 666)     (35 126) 
Investment income received                           4 192        4 601
Short-term funds disinvested                        42 081       46 781
Loans repaid by related party                        6 141          540
Net cash (utilised by)/generated from
investing activities                                (1 065)      15 776
Cash flows from financing activities
Repurchase of company shares: Specific
buy-back from shareholder                           (8 224)           - 
Net cash utilised by financing activities           (8 224)           -
Total cash movement for the year                   (25 077)      32 114
Cash and cash equivalents at the beginning
of the year                                         89 717       57 603
Total cash and cash equivalents at the end
of the year                                         64 640       89 717


Abridged consolidated statement of changes in equity for the year 
ended 31 March 2019
 
                              Stated   Revaluation   Retained     Total  
Figures in R'000             capital       reserve   earnings    equity
Balance as at 
1 April 2017                  48 668         7 983     42 652    99 303
Profit for the year                -             -      5 412     5 412
Total comprehensive 
income for the year                -             -      5 412     5 412
Transactions with the 
owners of the company
Distributions to the 
owners of the company
Dividends paid                     -             -     (1 988)   (1 988) 
Total transactions with 
the owners of the company          -             -     (1 988)   (1 988) 
Balance as at 
31 March 2018                 48 668         7 983     46 076   102 727
Profit for the year                -             -      6 543     6 543 
Total comprehensive 
income for the year                -             -      6 543     6 543
Transactions with the 
owners of the company
Distributions to the 
owners of the company
Dividends paid                     -             -     (1 988)   (1 988) 
Prescribed dividends               -             -         41        41
Shares repurchased from 
the owners of the company
Specific repurchase -
ordinary shares#             (22 699)            -     14 475*   (8 224)
Total transactions with 
the owners of the company    (22 699)            -     12 528   (10 171)
Balance as at 
31 March 2019                 25 969         7 983     65 147    99 099

# During the year, the company successfully completed a specific repurchase 
transaction, in terms of sections 4, 48(8)(b) and 114 of the Companies Act 
of South Africa No. 71 of 2008 ("Companies Act"), read together with sections 
115 and 164 of the Companies Act, the JSE Listings Requirements and Nictus' 
Memorandum of Incorporation of 12 826 440 ordinary shares (constituting 19,35% 
of the company's total ordinary shares in issue) from Nictus Holdings Limited, 
a related party, for a consideration of R7,471 million, being a price of 
58,25 cents per share.
* This amount represents the gain on the specific repurchase of ordinary shares.


Abridged segmental report for the year ended 31 March 2019

Figures in R'000                                      2019         2018
Segment assets
Furniture retail                                    51 756       70 391
Insurance                                          617 081      609 636
Sub-total                                          668 837      680 027
Head office and eliminations                        (5 972)     (39 721) 
Total segment assets                               662 865      640 306
Segment revenue
Furniture retail                                    42 716       43 543
Insurance                                            9 235        5 150
Sub-total                                           51 951       48 693
Head office and eliminations                        (1 199)      (1 332) 
Total segment revenue                               50 752       47 361
Net profit for the year 
Furniture retail                                       842        1 168
Insurance                                            3 293        1 896
Sub-total                                            4 135        3 064
Head office and eliminations                         2 408        2 348
Total net profit for the year                        6 543        5 412


Accounting policies
Basis of preparation
The abridged consolidated financial statements for the year ended
31 March 2019 ("Abridged Financial Statements") are prepared in accordance 
with the requirements of the JSE Limited ("JSE") Listings Requirements 
("Listings Requirements") for abridged reports, and the requirements of the 
Companies Act applicable to Abridged Financial Statements.

The Abridged Financial Statements are prepared in accordance with the 
framework concepts and the measurement and recognition requirements of 
International Financial Reporting Standards (IFRS) and the SAICA Financial 
Reporting Guides as issued by the Accounting Practices Committee and Financial 
Reporting Pronouncements as issued by the Financial Reporting Standards Council 
and also, as a minimum, contain the information required by IAS 34: 
Interim Financial Reporting. This announcement does not include the information 
required pursuant to paragraph 16A(j)and 16A(l) of IAS 34. The accounting 
policies applied in the preparation of the audited consolidated financial 
statements for the year ended 31 March 2019 ("Audited Financial Statements"), 
from which the Abridged Financial Statements were derived, are in terms of 
International Financial Reporting Standards and are consistent with the 
accounting policies applied in the preparation of the previous audited 
consolidated financial statements, except as indicated otherwise on pages 65 
and 66 of the Audited Financial Statements, in the case of new accounting 
standards implemented effective 1 April 2018. The adoption of the new accounting 
standards and interpretations had no material impact on the results of the group.

Mr Eckhart H Prozesky (financial director, CA (SA)) was responsible for 
supervising the preparation of the Abridged Financial Statements.

The full Audited Financial Statements are available on our website, at our 
registered office and upon request.

Related parties
During the period, certain companies within the group entered into transactions 
with each other. These intra-group transactions have been eliminated on 
consolidation. Related party information is unchanged from that reported at 
31 March 2019. Refer to the Audited Financial Statements for further information.

Reconciliation between earnings and headline earnings for the year 
ended 31 March 2019

                           Profit on                     Non-
                            ordinary              controlling       Net
Figures in R'000          activities    Taxation     interest    profit 
2019
Profit for the year            6 543           -            -     6 543
Adjustments for: 
Profit on disposal of
property, plant and
equipment                       (70)          20            -       (50) 
Headline earnings             6 473           20            -     6 493
2018
Profit for the year           4 870          542            -     5 412
Adjustments for: 
Loss on disposal of
property, plant and
equipment                         6           (2)           -         4
Headline earnings             4 876          540            -     5 416

                                                         2019      2018
Headline earnings per share (cents)                     10,52      8,17
Diluted headline earnings per share (cents)             10,52      8,17


Responsibility for Audited Financial Statements
The Audited Financial Statements have been audited by KPMG Inc., and their 
unqualified audit opinion is available for inspection at the registered 
office of the company. The auditor's opinion does not necessarily report 
on all of the information contained in this Abridged Financial Statements 
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 opinion together with the accompanying Audited 
Financial Statements from the issuer's registered office or website.

The Abridged Financial Statements have been extracted from the Audited Financial 
Statements, but is not itself audited. The directors of Nictus are solely 
responsible for the preparation of the Abridged Financial Statements and for its 
correct extraction from the underlying Audited Financial Statements.

Events after reporting date
There were no material events after the reporting date and up to the date of 
approval of the Abridged Financial Statements that required adjustment to or 
disclosure in the Audited Financial Statements, other than that a dividend of 
3,75 cents per share was declared by the board of directors ("board") subsequent 
to year end, payable to all shareholders recorded in the company's shareholder 
register at close of business on 19 July 2019. A separate announcement will 
follow containing details of the dividend.

Changes to the board and board committees
Mr John D Mandy, an independent non-executive director of the company retired 
with effect from 31 January 2019.

Mr Cornelius J de Vrye (Ronnie), an independent non-executive director of the 
company, replaced Mr John D Mandy as chairman of the audit and risk committee 
and member of the remuneration and nomination committee, with effect from 
31 January 2019.

Mr Gerard Swart, an independent non-executive director of the company, resigned 
as a member of the social and ethics committee with effect from 20 November 2018 
and Mr Stephanus J Gerber (Ion), a prescribed officer of the insurance segment 
of the company, replaced Mr Gerard Swart on the same date.

Chairman's report - Barend J Willemse (Johan)
South Africa's economic growth slowed further during 2018 and is part of a 
declining trend since 2009/10. The economic growth rate for 2018 was published 
at 0,8% by the South African Reserve Bank (SARB), with household consumption 
spending growing by only 1,8% during 2018 and official unemployment increasing 
towards the 28% level.

Corruption and corporate scandals continue with a lot of pressure to improve 
corporate governance throughout the South African business sector and government 
entities. Hopefully, we will see several prosecutions during 2019 and a slight 
improvement in South Africa's economic and business confidence.

The challenges with electricity supply and fuel price increases continue with 
further tax increases expected and a reduction in household disposable income. 
The SARB expects that we will only see an improvement in growth in household 
spending by late 2019 and into 2020. Consumer and business confidence declined 
further and, in early 2019, reached comparable levels to the world recessionary 
period in 2008/09.

The board continues to focus on its long-term strategy to maintain profitability 
amid a weak economic environment and deteriorating consumer and business 
confidence.

Management continues to adapt to a difficult trading environment in both the 
furniture retail and insurance sectors. The board is of the opinion that we will 
remain profitable during the current economic slowdown through continued 
improvements and innovation as well as the maintenance of profit levels. Costs 
have been well managed within the budget and profit levels were maintained.

We are making progress in maintaining a more stable profit level and the board 
has also adopted an approach to deliver a steady dividend payment to shareholders
in the current economic down-cycle. We are of the opinion, that as we build this 
record, it will translate into better support for the share price. The board has
also embarked on a strategy to employ capital more profitably and has adopted a 
strategy that we believe will support the share price and increase 
profits/dividends into the future. The share buy-back from Nictus Holdings 
Limited (a Namibian company), has not only consolidated shareholding but has 
also reduced the number of shares in issue. The strategy remains to employ 
capital optimally and improve profitability (and dividends) to a more desirable 
level. We envisage new actions during the financial year that will further 
improve the efficiency of capital employed and improve profitability within the 
current capital structure.

Continued focus on our customers and target market will remain a priority to 
improve our client offering and client base and will continue to build the 
business in a sustainable manner. Given the fact that the new Solvency 
Assessment and Management (SAM) regulations have been legislated within the 
insurance industry, regulatory uncertainty has been reduced, but the burden 
continues to add costs to doing business.

While the country slipped into a mode of corporate scandal and corruption on a 
broad basis, the board and management remain very focused in maintaining our 
values and integrity and fulfilling our fiduciary duties to the shareholders. 
In this regard, I want to thank John Mandy, who fulfilled his role as an 
independent non-executive director and the chairman of the audit and risk 
committee, for his dedication and due diligence.

A word of thanks to the board of directors for their dedication and focus in 
fulfilling their roles as directors and for safeguarding our shareholders' 
interests.

I also want to welcome Ronnie de Vrye as an independent non-executive director 
and chairman of the audit and risk committee and thank him for the contribution 
he is making to our corporate governance and strategy.

My thanks also to the managing director, financial director and staff for their 
enthusiasm and dedication with which they implement the company's strategy and 
values to improve profitability on an ethical basis.

Group managing director's report - Gerard R de V Tromp
It is once again a privilege to present and report on the financial results of 
the group. Although challenging, it was an exciting year where we were forced to
be creative and competitive to build on our long-term strategy to sustainably 
grow our earnings and asset base to create wealth for all our stakeholders.

A great milestone that was achieved this year was the share buy-back transaction 
from Nictus Holdings Limited which resulted in an increase in the net asset 
value per share, which, in turn, created intrinsic value for our shareholders. 
We are proud to maintain a constant ordinary dividend payment and have aligned 
our strategies to enhance and maintain a sustainable dividend payment to reward 
our shareholders, especially in these challenging, yet interesting, times in the 
South African political and economic environments.

We are privileged to welcome Ronnie de Vrye to our board and look forward to 
appreciating the wealth of experience and skills he will contribute to the 
group. We wish John Mandy well for his retirement and we are thankful for his 
contribution during his term as director.

Insurance segment
We experienced a steady growth in insurance premiums this year and are delighted 
with the success and value that our product is contributing to our clients 
within their different operations. We remain focused on tailormade 
client-specific solutions. One of our success factors remains the service and 
turnaround time to our clients and potential clients. We have aligned our 
investment strategy to challenge the grim investment environment and we are 
satisfied with the results achieved where no significant fluctuations were 
experienced that impacted earnings. We are excited to approach the coming years 
and look forward to opportunities where we can, together with our clients, 
create opportunities to identify risks and convert them into sustainable wealth.

Furniture segment
Furniture retail will always be one of the most challenging, yet rewarding, 
operations in the retail industry. Quality and value for money cannot be 
separated from the success of furniture retail and we are thankful that we can 
report on the profitability of this segment. Although profit margins are 
increasingly under pressure, we applaud the support from our suppliers for their
combined efforts in satisfying customer needs and preferences. We have had 
success in identifying and delivering unique product lines to our devoted 
customers and look forward to building and improving on this in the coming 
years. It is rewarding that we have had few nonperforming debtors and that bad 
debts and the provision therefore were far below industry norms, as well as our 
expectations.

Corporate governance
Nictus is proud to promote the highest standards of corporate governance and 
transparency. We value the integrity of our extremely committed employees in the 
effort to endorse a sound internal control environment. We remain committed to 
conforming to all rules and regulations we are exposed to across the group to 
assist in improving and building on a better South Africa and fighting corrupt 
practices.

Outlook
Nictus is committed to creating wealth for its stakeholders and will continue to 
build on this strategy. Our customers remain our core focus and we will 
persevere in providing them with innovative and exclusive products and solutions 
with unsurpassed levels of customer service.

Improvements of systems and ongoing focus on all aspects of the group will be a 
priority in order to be efficient in our operations and effective in maximising 
returns and optimising all capital structures.

We have hope in the new leadership of the country and take pride in being a 
South African corporate citizen contributing to the process of restoring 
South Africa to economic prosperity.

Appreciation
I would like to bring tribute and all glory to our loving God as without his 
love and grace this group would have no success.

I would like to express a warm thank you to our chairman and all board members 
for their exceptional value add to the group as well as their commitment and 
support to achieve the desired outcomes. Thank you to each and every employee 
and their families for their commitment and assistance on the journey to achieve
our ideal future. Thank you to all of our clients and customers for their 
unqualified support and belief in the group and lastly, I would like to thank 
my family for their unreserved and unconditional support and for being the 
cornerstone on which we can build this group.

Integrated annual report and notice of annual general meeting
The Integrated Annual Report contains a notice convening the annual general 
meeting of Nictus shareholders for the year ended 31 March 2019 ("the AGM"). The 
AGM will be held in the boardroom at the Nictus Building, corner of Pretoria 
and Dover Streets, Randburg, Gauteng on Wednesday, 21 August 2019 at 12h00.

The notice of AGM and the summarised version of the Audited Financial 
Statements, are to be posted to Nictus shareholders today, 28 June 2019. These 
documents and the full Integrated Annual Report are also available on the 
company's website at: http://www.nictuslimited.co.za/wp- 
content/uploads/2019/06/Nictus-Limited_IAR-2019.pdf.

Availability of the Broad-Based Economic Empowerment annual compliance report
The company's annual compliance report prepared pursuant to section
13(G)(2) of the Broad-Based Economic Empowerment Act No.53 of 2003 is available 
on the company's website at: http://www.nictuslimited.co.za/wp- 
content/uploads/2019/06/Nictus-Limited_BEE-Certificate-2019.pdf.


Barend J Willemse (Johan) 
Chairman

28 June 2019

Sponsor:
One Capital

Registered office of the Company
Head office
1st Floor, Nictus Building
Corner of Pretoria and Dover Streets, Randburg
PO Box 2878, Randburg 2125

Windhoek office
Nictus Building, 1st Floor
140 Mandume Ndemufayo Avenue, Windhoek
Private Bag 13231, Windhoek

Company secretary
Veritas Board of Executors Proprietary Limited
Registration number: 1984/007487/07
1st Floor, Nictus Building
Corner of Pretoria and Dover Streets, Randburg
PO Box 2878, Randburg 2125

Auditors and reporting accountant
KPMG Inc.
Registration number: 1999/021543/21
KPMG Crescent
85 Empire Road, Parktown 2193
Private Bag 9, Parktown 2122












 
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