Wrap Text
Audited results and notice of AGM
PBT Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1936/008278/06)
JSE share code: PBG ISIN: ZAE000256319
("PBT Group" or "the Company" or "the Group")
PROVISIONAL AUDITED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
For the year ended 31 March 2019 and Notice of Annual General Meeting
INTRODUCTION
Shareholders are advised that the Integrated Annual Report for the year ended 31 March 2019 and the
Notice of Annual General Meeting (AGM) will be dispatched to shareholders on Friday, 5 July 2019.
In addition, the Integrated Annual Report, which includes the notice of AGM, together with the
Audited Consolidated Annual Financial Statements will also be available on the Company's website
- www.pbtgroup.co.za from Friday, 5 July 2019.
Copies of the Integrated Annual Report and the Audited Consolidated Annual Financial Statements
will also be available at the Company's registered office or on request from the Company Secretary
from Friday, 5 July 2019.
NOTICE OF AGM
Notice is hereby given that the next AGM of the shareholders of the Company will be held in the
boardroom at 10:00 on Friday, 2 August 2019 at PBT House, 2 Mews Close, Waterford Mews, Century City,
Cape Town, to consider and, if deemed fit, to pass with or without modification all of the ordinary
and special resolutions set out in the notice of AGM attached to the Integrated Annual Report.
Friday, 28 June 2019
Record date to receive the Notice of the Annual General Meeting
Friday, 5 July 2019
Date of posting the Notice of Annual General Meeting
Tuesday, 23 July 2019
Last date to trade to be eligible to vote
Friday, 26 July 2019
Record date to be eligible to attend, participate and vote at the Annual General Meeting
Wednesday, 31 July 2019
For administrative purposes, preferable date by which forms of proxy for the Annual General
Meeting are requested to be lodged, by 10:00
Friday, 2 August 2019
Annual General Meeting at 10:00
Friday, 2 August 2019
Results of Annual General Meeting published on SENS
AUDIT OPINION
This provisional report is extracted from audited information, but is not itself audited.
The financial statements from which these results were extracted were audited by BDO Cape Inc and
their unmodified opinion is included in the Annual Financial Statements and will be available for
inspection at the Company's registered office from Friday, 5 July 2019. The Directors take full
responsibility for the preparation of this provisional report and confirm that the financial
information has been correctly extracted from the underlying annual financial statements.
BUSINESS ACTIVITIES AND GROUP RESULTS
During the period under review PBT Group disposed of Prescient Capital, which does not form part of
the Group's core operations. A Supplementary Circular was posted to shareholders on 28 August 2018
and the transaction was approved by shareholders at the General Meeting held on 28 September 2018.
The income and expenses associated with Prescient Capital are disclosed as a profit from discontinued
operations in the audited consolidated statement of profit or loss and other comprehensive income
(loss from discontinued operations for the comparative period).
The earnings per share and headline earnings per share have been reflected as a split between
continuing and discontinued operations.
- Total profit after tax from continuing operations for the period was R33.7 million
(March 2018: loss of R139.4 million).
- The profit before tax from continuing operations for the period was R50.8 million
(March 2018: loss of R117.4 million).
- Headline earnings per share was 19.17 cents per share (March 2018: loss of 15.49 cents per
share, post 1-for-10 share consolidation).
- Headline earnings per share for continuing operations was 18.18 cents per share
(March 2018: loss of 13.5 cents per share, post 1-for-10 share consolidation).
- Headline earnings per share for discontinued operations was 0.99 cent per share
(March 2018: loss of 1.99 cents per share, post 1-for-10 share consolidation).
- Earnings per share was 25.32 cent per share (March 2018: loss of 125.48 cents per share,
post 1-for-10 share consolidation).
- Earnings per share for continuing operations was 17.97 cents per share (March 2018: loss of
97.28 cents per share, post 1-for-10 share consolidation).
- Earnings per share for discontinued operations was 7.35 cents per share (March 2018: loss of
28.20 cents per share, post 1-for-10 share consolidation).
On 2 November 2018 a 1-for-10 consolidation of the authorised and issued share capital of PBT Group
Limited became effective. The weighted average number of shares in issue for the 12 months ended
31 March 2019 was 124 063 076 (March 2018: 149 920 549 post 1-for-10 share consolidation).
South Africa and Australia
During the period under review PBT Group successfully completed the exit of the Middle East/Africa
(MEA) operations and no longer reports on it as a separate segment of the business. We are pleased
to report that this highly risky exercise has been completed with minimal financial damage. In addition,
our reputation as employer of choice remains intact as we succeeded to redeploy most of the affected
staff at alternative clients.
Despite this disruption and MEA's revenue decreasing from R80 958 224 to R41 132 560, consolidated
revenue increased from R556 093 567 to R588 414 409. This confirms the underlying growth in demand
for our services.
The operations in Australia remain subdued with revenue 10% lower than the 2018 financial year at
AUD6 000 743.
We are pleased to report increased momentum in our expansion into the United Kingdom and Europe
(including Ireland). A number of strategic partnerships have been formed with satisfactory client
engagements resulting therefrom.
BUSINESS MODEL
Since PBT Group's inception it has focused exclusively on the data management market and, as a result,
it finds itself ideally positioned to maximise the current and future potential revenue from this sector.
Our view on this remains relevant and we are optimistic about our positioning within this industry
sector. Our future prospects, as per the below, merely reflects some minor adjustments, yet very much
aligned with the intended strategic direction.
PBT Group's early decision to focus on data management was a calculated risk that was taken as a
result of experience and the foresight that data management will consistently outperform the growth
figures compared to the rest of the Information and Communication Technology (ICT) sector. The focused
approach has resulted in PBT Group acquiring and retaining highly specialised skills in the
professional services field of data. With more than 550 consultants, PBT Group has the capability to
successfully service the end-to-end data management landscape.
The explosion in the volume of data created in organisations on a daily basis necessitates the
extraction of information to remain competitive. We have been experiencing sustained and growing
demand for our services in this field over a 20-year period and all indications are that this trend
will continue, especially demand in the financial services sector. Our application development
services are also in high demand and are growing at a sustainable pace. The worldwide shortage of
skills creates opportunities, but is also a constraint as access to these skills is limited.
Our client base is of very high quality and is still expanding in a controlled manner.
PBT Group has a solid business strategy that allows for rapid change without compromising on the
quality of the service that is delivered to its clients. The strategic objectives that underpin
PBT Group's ongoing success are:
Be technology agnostic
In a market of consolidation and technical overload, the decision to be technology agnostic has
proven to be the right one. Not only does it ensure that PBT Group is trusted by its clients as an
objective partner, but it also allows for the consultant adjustment of its technology focus based
on what it views as the best of breed, without the pressure from technology vendors to stay loyal
to a brand that might no longer be delivering on client expectations. At the same time, it also
allows for successful exposure to all industries.
Specialised data
Connectivity is the number one reason for an explosion in data. It started off with the internet
but has truly gained momentum with the introduction of social media, mobile and Internet of Things
(loT) (millions of devices, from cars to fridges, are connected and continuously generate petabytes
of data). Data has therefore become central to every single aspect of running a business,
from recruitment to procurement, from finance to strategy to planning. Client engagement and
retention is no longer possible without near real-time access to data. The ongoing evolvement of
technology enables the harnessing of big data and significant progression in more advanced analytical
techniques resulting in artificial intelligence (AI). AI, when applied effectively, in turn is
transforming and disrupting many industries. However, at the heart of it all is data, and this will
not change in the foreseeable future. PBT Group acquired the skills and has the experience to
capitalise on this by successfully transforming data into business value for its clients. The latter
forms a core component of our business, namely data engineering.
Worldwide expansion
The skills that PBT Group acquired and developed over the last two decades are of world-class
standards. This presented an opportunity to compete internationally. PBT Group has been operating
successfully and profitably in Australia since 2005 and established a fully-fledged operation in
Melbourne in 2008. In the MEA region PBT Group followed the MTN footprint across 22 countries.
Although this unit is no longer a focus area for PBT Group, the use case of this venture reflects
a unique and significant achievement and the associated experiences and learnings will remain an
important intellectual asset. Technological advancement has paved the way for the exporting of our
skills. During 2018 a small-scale operation was established in the United Kingdom, from where we
will continue to expand our services in this market. Our offices based in Utrecht, Netherlands,
also established in 2018, has since been strengthened significantly by the deployment of a strong
pre-sales technical component supporting and enabling the opportunities mentioned below. From here
we will continue to serve and expand on our European client base.
Big data
The term big data originated from the accessibility to unstructured data, in an attempt to
differentiate it from other/structured data. Big data is, however, becoming the norm rather than
the exception and it might soon become "just data" again. A large component of PBT Group's consulting
base has been part of the industry that gave rise to the term big data. The telecommunication
companies were the first to generate millions of records of data every second. The social media
phenomenon opened the door for petabytes of unstructured data in the form of videos, pictures and
text to be uploaded continuously. They were also the first to realise the potential of analysing
this data. Connectivity is what defined big data. Being part of this process allowed PBT Group to
gain valuable experience and is assisting greatly in all current big data initiatives.
Cloud
With the advent of big data the move to cloud was inevitable. More and more data required scalable
infrastructure which was not financially viable within a decentralised model. Cloud allows businesses
to focus on core differentiators whilst being able to outsource standard components and availing
infrastructure in a short period of time. PBT Group has aligned itself with all the cloud players
and is, at the same time, exploring providing analytics as a service in the cloud.
Business analytics
The ultimate objective of obtaining, cleaning and structuring data is to analyse it in a way that
provides actionable insight that can drive an increase in bottom line returns for companies.
PBT Group has a solid understanding of this concept and has aligned itself with developing
technologies in this space. These include, but are not limited to, advanced analytics, machine
learning, cognitive computing, data lakes and geographical information systems.
Train and mentor potential candidates
PBT Group connected two components that are very specific to the South African market, namely skill
shortage and empowerment, and devised a programme in 2004 that has seen hundreds of eager youngsters
being skilled up and successfully deployed in the industry as business intelligence consultants and
analysts. The success of this programme is unprecedented and the talent that has been uncovered has
been tremendous. The programme has no equal in the market and the quality of the resulting skills
are world-class.
Best-of-breed methodologies
Even though PBT Group has remained technology agnostic, it is constantly aligning itself with
best-of-breed methodologies. PBT Group has established competency centres within the Company that
refine methodologies such as Ralph Kimball, third normal form, hybrid and agile continuously,
to ensure that it remains relevant with new developments in the market.
PBT Group provides leadership in the data management space and has positioned itself well to meet,
or even exceed, the growth potential that is projected for this sector. It has shown consistent
growth through tough economic times, because it proactively adjusted its strategy to cater for
challenges and to benefit from an extremely volatile market.
GOVERNANCE
PBT Group remains committed to sound corporate governance principles, including integrity,
transparency and accountability, and we subscribe to the Code of Corporate Practices and Conduct
as set out in King IV.
DIVIDEND
Biannually, the Directors consider the payment of a dividend, considering prevailing circumstances
and future cash and capital requirements of the Group in order to determine the appropriate
dividend in respect of a particular financial reporting period.
No dividend from normal commercial operations has been declared for the year ended 31 March 2019.
However, we are optimistic that dividend payouts will resume from the next reporting cycle as a
result of improved operating conditions.
PROVISIONAL AUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 March 2019
GROUP
Rand Notes 2019 2018
ASSETS
Non-current assets
Property, plant and equipment 4 247 142 6 030 533
Goodwill 3 135 666 420 135 666 420
Intangible assets 244 626 675 082
Loans receivable 4 6 458 606 -
Investments at fair value 5 26 868 915 -
Other financial assets 4, 5 - 25 785 812
Deferred tax 2 891 191 2 139 120
176 376 900 170 296 967
Current assets
Loans receivable 4 1 295 275 -
Trade and other receivables 112 075 437 91 270 083
Current tax receivable 521 042 1 815 649
Other financial assets 4, 5 - 3 206 276
Cash and cash equivalents 31 079 809 34 202 850
144 971 563 130 494 858
Non-current assets held for sale and assets of disposal group 6 - 57 120 959
Total assets 321 348 463 357 912 784
EQUITY AND LIABILITIES
Equity
Equity attributable to equity holders of parent
Share capital 7 3 490 921 65 358 941
Reserves 5 482 400 12 909 171
Retained income 247 931 820 221 403 368
256 905 141 299 671 480
Non-controlling interest 13 854 001 6 915 887
Total equity 270 759 142 306 587 367
Liabilities
Non-current liabilities
Deferred tax 1 615 464 183 984
Current liabilities
Trade and other payables 37 699 855 34 058 359
Current tax payable 2 777 895 1 774 418
Payroll-related accruals 8 396 227 8 584 433
Bank overdraft 99 880 152 191
48 973 857 44 569 401
Liabilities of disposal group 6 - 6 572 032
Total liabilities 50 589 321 51 325 417
Total equity and liabilities 321 348 463 357 912 784
PROVISIONAL AUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
for the year ended 31 March 2019
GROUP
Rand Notes 2019 2018
Continuing operations
Revenue 9 588 414 409 556 093 567
Cost of sales (440 865 367) (457 972 710)
Gross profit 147 549 042 98 120 857
Other income 1 272 869 2 756 748
Other operating (losses)/gains (497 750) 57 313
Movement in credit loss allowances 4 752 726 -
Gain/(loss) on exchange differences 1 152 300 (4 408 936)
Impairment loss (38 367) (127 040 905)
Other operating expenses (106 048 629) (87 680 084)
Operating profit/(loss) 48 142 191 (118 195 007)
Investment income 3 812 254 6 035 269
Finance costs (1 208 747) (5 190 937)
Profit/(loss) before taxation 50 745 698 (117 350 675)
Taxation (17 097 985) (22 018 328)
Profit/(loss) from continuing operations 33 647 713 (139 369 003)
Discontinued operations
Profit/(loss) from discontinued operations 6 9 113 855 (42 280 605)
Profit/(loss) for the year 42 761 568 (181 649 608)
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Gains on valuation of investments in equity instruments 470 363 -
Items that may be reclassified to profit or loss:
Exchange differences on translating foreign operations (7 929 281) 193 591
Other comprehensive (loss)/income for the year net of taxation (7 458 918) 193 591
Total comprehensive income/(loss) for the year 35 302 650 (181 456 017)
Profit/(loss) attributable to:
Owners of the parent
From continuing operations 22 299 599 (145 835 399)
From discontinued operations 9 113 855 (42 280 605)
31 413 454 (188 116 004)
Non-controlling interest
From continuing operations 11 348 114 6 466 396
42 761 568 (181 649 608)
Total comprehensive income/(loss) attributable to:
Owners of the parent 23 954 536 (187 922 413)
Non-controlling interest 11 348 114 6 466 396
35 302 650 (181 456 017)
Earnings per share (cents)
From continuing operations
Basic earnings/(loss) per share 12 17.97 (97.28)
Diluted earnings/(loss) per share 12 17.97 (97.28)
From discontinued operations
Basic earnings/(loss) per share 12 7.35 (28.20)
Diluted earnings/(loss) per share 12 7.35 (28.20)
PROVISIONAL AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2019
Total
Foreign attributable to
currency Share-based equity holders Non-
Share translation payment Revaluation Total Retained of the Group/ controlling Total
Rand Notes capital reserve reserve reserve reserves income Company interest equity
GROUP
Balance at 1 April 2017 136 698 640 12 715 580 - - 12 715 580 409 519 372 558 933 592 12 434 173 571 367 765
Loss for the year - - - - - (188 116 004) (188 116 004) 6 466 396 (181 649 608)
Other comprehensive income - 193 591 - - 193 591 - 193 591 - 193 591
Total comprehensive loss for the year - 193 591 - - 193 591 (188 116 004) (187 922 413) 6 466 396 (181 456 017)
Capital distribution (26 209 633) - - - - - (26 209 633) - (26 209 633)
Purchase of own shares (45 130 066) - - - - - (45 130 066) - (45 130 066)
Loss of control - - - - - - - (2 913 149) (2 913 149)
Dividends - - - - - - - (9 065 000) (9 065 000)
Change in ownership - - - - - - - (6 533) (6 533)
Total contributions by and
distributions to owners of
Company recognised directly
in equity (71 339 699) - - - - - (71 339 699) (11 984 682) (83 324 381)
Opening balance as previously reported 65 358 941 12 909 171 - - 12 909 171 221 403 368 299 671 480 6 915 887 306 587 367
Change in accounting policy 2 - - - - - (4 692 998) (4 692 998) - (4 692 998)
Balance at 1 April 2018 as restated 65 358 941 12 909 171 - - 12 909 171 216 518 366 294 786 478 6 915 887 301 702 365
Profit for the year - - - - - 31 413 454 31 413 454 11 348 114 42 761 568
Other comprehensive income - (7 929 281) - 470 363 (7 458 918) - (7 458 918) - (7 458 918)
Total comprehensive income for the year - (7 929 281) - 470 363 (7 458 918) 31 413 454 23 954 536 11 348 114 35 302 650
Shares repurchased from dissenting
shareholders (3 343 931) - - - - - (3 343 931) - (3 343 931)
Specific repurchase of shares (42 708 858) - - - - - (42 708 858) - (42 708 858)
Share-based payment shares included as
treasury shares 8 (16 500 000) - - - - - (16 500 000) - (16 500 000)
Dividend - - - - - - - (4 410 000) (4 410 000)
Share-based payment - - 32 147 - 32 147 - 32 147 - 32 147
Adjustment to share capital following
the discontinued operations 684 769 - - - - - 684 769 - 684 769
Total contributions by and distributions
to owners of Company recognised directly
in equity (61 868 020) - 32 147 - 32 147 - (61 835 873) (4 410 000) (66 245 873)
Balance at 31 March 2019 3 490 921 4 979 890 32 147 470 363 5 482 400 247 931 820 256 905 141 13 854 001 270 759 142
PROVISIONAL AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 March 2019
GROUP
Rand Notes 2019 2018
Cash flows from operating activities
Cash generated from operations 36 526 175 100 372 338
Interest income 3 812 254 4 166 997
Dividend income - 1 868 272
Finance costs (1 208 747) (5 190 937)
Tax paid (13 637 077) (30 059 131)
Cash flows of held-for-sale/discontinued operations 1 089 358 -
Net cash from operating activities 26 581 963 71 157 539
Cash flows from investing activities
Purchase of property, plant and equipment (1 144 278) (2 017 105)
Sale of property, plant and equipment 77 477 339 574
Purchase of intangible assets (304 255) (273 046)
Loans receivable advanced (2 732 215) (1 941 000)
Sale of financial assets - 5 970 405
Net cash flows of discontinued operations (937 176) -
Net cash from investing activities (5 040 447) 2 078 828
Cash flows from financing activities
Share-based payment advance 7 (16 500 000) -
Reduction of share capital 7 - (26 209 633)
Shares repurchased from dissenting shareholders (3 343 931) -
Dividend paid to non-controlling interests (4 410 000) -
Repayment of other financial liabilities - (35 000 000)
Net cash flows of discontinued operations (351 378) -
Acquisition of shares - (8 053 481)
Net cash from financing activities (24 605 309) (69 263 114)
Total cash movement for the year (3 063 793) 3 973 253
Cash at the beginning of the year 34 050 659 30 090 060
Effect of exchange rate movement on cash balances (6 937) (12 654)
Total cash at the end of the year 30 979 929 34 050 659
Notes to the PROVISIONAL AUDITED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
for the year ended 31 March 2019
1. STATEMENT OF COMPLIANCE
The consolidated annual financial statements have been prepared on the going concern basis in
accordance with, and in compliance with, International Financial Reporting Standards (IFRS),
the JSE Listings Requirements and International Financial Reporting Interpretations Committee
(IFRIC) interpretations issued and effective at the time of preparing these consolidated annual
financial statements and the Companies Act, Act 71 of 2008 of South Africa, as amended.
These consolidated annual financial statements comply with the requirements of the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and the Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council.
The consolidated annual financial statements have been prepared on the historic cost convention,
unless otherwise stated in the accounting policies which follow and incorporate the principal
accounting policies set out below. They are presented in Rands, which is the Group's functional
currency.
These accounting policies are consistent with the previous period, except for the adoption of
IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers which replaced
IAS 39 Financial Instruments: Recognition and Measurement and IAS 18 Revenue, respectively.
Judgements and estimates
The preparation of consolidated annual financial statements in conformity with IFRS requires
management, from time to time, to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets, liabilities, income and expenses.
These estimates and associated assumptions are based on experience and various other factors
that are believed to be reasonable under the circumstances. Actual results may differ from these
estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognised in the period in which the estimates are revised and in
any future periods affected.
Critical judgements in applying accounting policies
The critical judgements made by management in applying accounting policies, apart from those
involving estimations, that have the most significant effect on the amounts recognised in the
financial statements, are outlined as follows:
Loan granted to BEE company
The accounting of the loan granted to Spalding Investments 10 Proprietary Limited, taking into
account the terms of the shareholders agreement and the preference share agreement required
judgement and resulted in a conclusion that the loan should be presented as treasury shares.
Key sources of estimation uncertainty
Impairment of financial assets
The impairment provisions for financial assets are based on assumptions about risk of default and
expected loss rates. The Group uses judgement in making these assumptions and selecting the inputs
to the impairment calculation, based on the Group's past history, existing market conditions as
well as forward-looking estimates at the end of each reporting period. For details of the key
assumptions and inputs used, refer to the individual notes addressing financial assets.
The historical credit loss rates for trade receivables and loans receivable have been very low
and management has made the judgement, taking into account forward-looking indicators, that the
expected credit loss rates will continue to be at similarly low levels.
Fair value estimation
Investments of the Group are either measured at fair value or disclosure is made of their fair values.
The fair value measurement of the Group's financial and non-financial assets and liabilities utilises
market observable inputs and data as far as possible. Inputs used in determining fair value
measurements are categorised into different levels based on how observable the inputs used in
the valuation technique utilised are (the fair value hierarchy):
- Level 1: Quoted prices in active markets for identical items (unadjusted).
- Level 2: Observable direct or indirect inputs other than Level 1 inputs.
- Level 3: Unobservable inputs (i.e. not derived from market data).
The classification of an item into the above levels is based on the lowest level of the inputs
used that has a significant effect on the fair value measurement of the item. Transfers of items
between levels are recognised in the period they occur.
Observable market data is used as inputs to the extent that it is available. Qualified external
valuers are consulted for the determination of appropriate valuation techniques and inputs.
Impairment testing - goodwill
The recoverable amount of the cash-generating units has been determined based on a value-in-use
calculation. Key assumptions applied to determine the recoverable amount of the cash generating
units, using the value-in-use calculation relating to sales growth rates, working capital
requirements and capital expenditure.
The following assumptions were utilised:
Pre-tax discount rate: 16.4% (2018: 19.05%)
Terminal growth rate: 5.5% (2018: 3.00%)
Number of years: 4 years (2018: 5 years)
No reasonable possible change is expected in a key assumption used in the value-in-use calculation
that would change the value in use to be lower than the carrying value of goodwill.
Taxation
Estimates are required in determining the provision for income taxes due to the complexity of
legislation. There are many transactions and calculations for which the ultimate tax determination
is uncertain during the ordinary course of business. The Group recognises liabilities for
anticipated tax audit issues based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the amounts that were initially
recorded, such differences will impact the income tax and deferred tax provisions in the period
in which such determination is made.
The Group recognises the net future tax benefit related to deferred income tax assets to the
extent that it is probable that the deductible temporary differences will reverse in the
foreseeable future. Assessing the recoverability of deferred income tax assets requires the
Group to make significant estimates related to expectations of future taxable income. Estimates
of future taxable income are based on forecast cash flows from operations and the application of
existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income
differ significantly from estimates, the ability of the Group to realise the net deferred tax
assets recorded at the end of the reporting period could be impacted.
The deferred tax assets (arising mainly from assessed losses) in two subsidiaries of the Group
were not recognised in neither the current nor prior year as management does not expect that
there will be future taxable income in either of these entities.
Subsequent events
The Directors are not aware of any matter or circumstance arising since the end of its financial
year that materially affects the results of the Group for the year ended 31 March 2019 or the
financial position as at that date.
2. CHANGES IN ACCOUNTING POLICY
The consolidated annual financial statements have been prepared in accordance with International
Financial Reporting Standards on a basis consistent with the prior year except for the adoption
of the following new or revised standards.
Application of IFRS 9 Financial Instruments
In the current year the Group has applied IFRS 9 Financial Instruments (IFRS 9) (as revised in
July 2014) and the related consequential amendments to other IFRS. IFRS 9 replaces IAS 39
Financial Instruments: Recognition and Measurement (IAS 39) and introduces new requirements for
the classification and measurement of financial assets and financial liabilities, impairment for
financial assets and general hedge accounting. Details of these new requirements as well as
their impact on the Group's financial statements are described below.
The Group has applied IFRS 9 in accordance with the transition provisions set out in IFRS 9.
Classification and measurement of financial assets
The date of initial application (i.e. the date on which the Group has assessed its existing
financial assets and financial liabilities in terms of the requirements of IFRS 9) is 1 April 2018.
Accordingly, the Group has applied the requirements of IFRS 9 to instruments that have not been
derecognised as at 1 April 2018 and has not applied the requirements to instruments that have
already been derecognised as at 1 April 2018. Comparatives in relation to instruments that have
not been derecognised as at 1 April 2018 have not been restated. Instead, cumulative adjustments
to retained earnings have been recognised in retained earnings as at 1 April 2018.
All recognised financial assets that are within the scope of IFRS 9 are required to be subsequently
measured at amortised cost or fair value on the basis of the entity's business model for managing
the financial assets and the contractual cash flow characteristics of the financial assets.
The measurement requirements are summarised below:
- amortised cost;
- fair value through other comprehensive income equity instrument; and
- fair value through profit or loss (FVPL).
The classification of financial assets under IFRS 9 is generally based on the business model in
which a financial asset is managed and its contractual cash flow characteristics.
The Directors reviewed and assessed the Group's existing financial assets as at 1 April 2018
based on the facts and circumstances that existed at that date.
The following tables show the adjustments recognised in opening retained income on adoption of
IFRS 9, for each line item of the financial statements affected:
31 March 2018
As originally 1 April 2018
Notes Adjustments presented IFRS 9 As restated
GROUP
Statement of financial position
Assets
Non-current assets
Property, plant and equipment 6 030 533 - 6 030 533
Goodwill 135 666 420 - 135 666 420
Intangible assets 675 082 - 675 082
Other financial assets (a), (b) 25 785 812 (86 145) 25 699 667
Deferred tax (c) 2 139 120 675 416 2 814 536
170 296 967 589 271 170 886 238
Current assets
Trade and other receivables (a) 91 270 083 (5 282 269) 85 987 814
Other financial assets 3 206 276 - 3 206 276
Current tax receivable 1 815 649 - 1 815 649
Cash and cash equivalents 34 202 850 - 34 202 850
130 494 858 (5 282 269) 125 212 589
Non-current assets held for sale
and assets of disposal group 57 120 959 - 57 120 959
Total assets 357 912 784 (4 692 998) 353 219 786
Equity and Liabilities
Equity
Equity attributable to equity
holders of the parent
Share capital 11 65 358 941 - 65 358 941
Reserves 11 12 909 171 - 12 909 171
Retained earnings (a), (c) 221 403 368 (4 692 998) 216 710 370
299 671 480 (4 692 998) 294 978 482
Non-controlling interest 6 915 887 - 6 915 887
306 587 367 (4 692 998) 301 894 369
Liabilities
Non-current liabilities
Deferred tax 183 984 - 183 984
Current liabilities
Trade and other payables 34 058 359 - 34 058 359
Current tax payable 1 774 418 - 1 774 418
Payroll-related accruals 8 584 433 - 8 584 433
Bank overdraft 152 191 - 152 191
44 569 401 - 44 569 401
Liabilities of disposal group 6 572 032 - 6 572 032
Total liabilities 51 325 417 - 51 325 417
Total equity and liabilities 357 912 784 (4 692 998) 353 219 786
The nature of the adjustments resulting from the adoption of IFRS 9 Financial Instruments are
described below:
IFRS 9 replace IAS 39 Financial Instruments: Recognition and Measurement (IAS 39), and has had
a significant effect on the Group in the following areas:
(a) The Group applied the expected credit loss model when calculating impairment losses on its
financial assets measured at amortised costs (such as trade and other receivables and loans
and receivables included in other financial assets (both current and non-current)). This
resulted in increased impairment provisions and greater judgement due to the need to factor
in forward-looking information when estimating the appropriate amount of provisions.
In applying IFRS 9 the Group considered the probability of a default occurring over the
contractual life of its trade receivables and loans and receivables included in other
financial asset balances on initial recognition of those assets. Under the existing incurred
loss model each trade and other receivable and loans and receivables included in other
financial asset was assessed individually to determined if a loss has incurred. The bad debts
for the Group recognised was R235 437. Under the new model applied to all trade and other
receivables and loans and receivables included in other financial assets these amounts for
the Group increased to R5 282 269 and R86 145, respectively as at 1 April 2018 based on the
31 March 2018 figures and was accounted for directly in retained earnings.
(b) Included in other financial assets are two investments that was previously accounted at cost.
With the application of IFRS 9 the categories changed for each of the investments.
The investment in All Claims Proprietary Limited is now classified as at fair value through
profit or loss (FVPL) and the investment in Zuuse Limited (previously Progressclaim.com Limited)
is now classified as at fair value through other comprehensive income. This has resulted in
a change in the measurement basis.
(c) The expected credit loss allowance balances gave rise to deductible temporary differences
and the recognition of a deferred tax asset. The income statement deferred tax credit has
been accounted for directly in retained earnings.
The Group has chosen not to restate comparatives on adoption of IFRS 9 and, therefore, these changes
have been processed at the date of initial recognition (i.e. 1 April 2018), and presented in the
statement of changes in equity.
Application of IFRS 15 Revenue from Contracts with Customers
In the current year the Group has applied IFRS 15 Revenue from Contracts with Customers
(as revised in April 2016) and the related consequential amendments to other IFRS. IFRS 15
replaces IAS 11 Construction Contracts, IAS 18 Revenue as well as various interpretations
previously issued by the IFRS Interpretations Committee.
IFRS 15 introduces a five-step approach to revenue recognition. Far more prescriptive guidance
has been added in IFRS 15 to deal with specific scenarios. Details of these new requirements as
well as their impact on the Group financial statements are described below. Refer to the revenue
accounting policy for additional details.
The Group has applied IFRS 15 with an initial date of application of 1 April 2018 in accordance
with the cumulative effect method, by recognising the cumulative effect of initially applying
IFRS 15 as an adjustment to the opening balance of equity at 1 April 2018. The comparative
information has therefore not been restated.
Under IAS 18 Revenue, the Group recognised revenue on an invoice basis, with the amount of
revenue recognised being dependent on the contract type. Project revenue was recognised as
revenue upon completion of each milestone.
Under IFRS 15 Revenue from Contracts with Customers, management has elected to apply the
practical expedient available in paragraph B16 for all applicable contract types. As such,
the manner of revenue recognition has not changed from the method applied under IAS 18.
Therefore there has been no change in the revenue amount recognised for the prior year and
consequently there is no cumulative adjustment required.
3. GOODWILL
2019 2018
Accumulated Carrying Accumulated Carrying
Rand Cost impairment value Cost impairment value
Group
Goodwill 285 572 420 (149 906 000) 135 666 420 285 572 420 (149 906 000) 135 666 420
Reconciliation of goodwill
2019 2018
Opening Impairment Opening Impairment
Rand balance loss Total balance loss Total
Group
Goodwill 135 666 420 - 135 666 420 253 927 313 (118 260 893) 135 666 420
The goodwill on the statement of financial position arose from the reverse acquisition of PBT Group
Limited by the Prescient Holdings Group of companies (Prescient Holdings) effective 1 September 2012.
According to IFRS 3 Business Combinations, PBT Group Limited was treated as the accounting acquiree
and goodwill on the PBT Group of companies arose as a result.
During the 2017 financial year the financial services segment of the business, being Prescient Holdings,
was disposed of by the Group, leaving the PBT Group of companies and Prescient Capital Group of
companies. PBT Group comprises IT services. With the 2012 goodwill calculation and allocation,
the PBT Group of companies was seen as a separate cash-generating unit (CGU).
In terms of IFRS the Group performs an annual impairment test on goodwill based on CGUs.
The recoverable amount of each CGU to which goodwill is allocated has been determined based on
the value-in-use calculation which uses cash flow projections on financial forecasts.
Management based its cash flow projections on historical information and taking into account the
exit of the Middle East/Africa business. A steady and prudent revenue growth rate was used and
was calculated over a period of four years.
The discount rate (based on the weighted cost of capital for the Group) used to calculate the
value-in-use figure is 16.4% (2018: 19%) and the terminal growth rate 5.5% (2018: 3%).
At year-end, in terms of IFRS, the PBT Group of companies is still seen as a separate CGU and
an impairment test was performed. During the 2018 financial year the goodwill figure was impaired
from R253.9 million to R135.7 million in accordance with a Directors' calculation. For the 2019
financial year the goodwill figure has not been impaired as the recoverable amount was considerably
higher than the goodwill figure.
No reasonable possible change is expected in a key assumption used in the value-in-use calculation
that would change the value in use to be lower than the carrying value of goodwill.
4. LOANS RECEIVABLE
Loans receivable are presented at amortised cost, which is net of loss allowance, as follows:
GROUP
Rand 2019 2018
PBT Insurance Technologies Employees 4 723 230 1 508 907
The unsecured loan bears interest at prime minus 2% and has no
fixed terms of repayment. No capital repayments are required in the
next 12 months.
Enterprise development loans 2 537 400 1 840 000
The unsecured loan bears no interest and has no fixed terms of
repayment. No capital repayments are required in the next 12 months.
Bonds 493 251 432 787
Other loans and receivables - 1 366 276
The unsecured loan bears interest at prime and has been repaid
in the current year.
7 753 881 5 147 970
Split between non-current and current portions
Non-current assets 6 458 606 1 941 694
Current assets 1 295 275 3 206 276
7 753 881 5 147 970
Reconciliation of loss allowances
The following table shows the movement in the loss allowance
(lifetime expected credit losses) for the loans and receivables:
Opening balance in accordance with IAS 39 Financial instruments - -
Adjustments upon application of IFRS 9 (86 145) -
Opening balance in accordance with IFRS 9 (86 145) -
Increase in provisions for expected credit loss allowance (91 619) -
Closing balance (177 764) -
The prior-year figures presented in this note was classified differently according to IAS 39
Financial Instruments: Recognition and Measurement but included in this note to better present
the information for comparative purposes.
5. INVESTMENTS AT FAIR VALUE
Investments held by the Group which are measured at fair value are as follows:
GROUP
Rand 2019 2018
Equity investments at fair value through profit or loss 124 729 245 241
Equity investments at fair value through other comprehensive income 26 744 186 23 598 877
26 868 915 23 844 118
Fair value through profit or loss
All Claims Proprietary Limited 124 729 245 241
Equity investments at fair value through other comprehensive income
Zuuse Limited (previously Progressclaim.com Limited) 26 744 186 23 598 877
26 868 915 23 844 118
Split between non-current and current portions
Non-current assets 26 868 915 23 844 118
Equity instruments at fair value through other comprehensive income
The investment in Zuuse Limited is not held for trading, it is held for long-term strategic
purposes and has therefore been designated as at fair value through other comprehensive income.
No dividends were received related to this investment in the current or prior year.
In the prior year this investment was measured at cost, although it was classified as at fair
value through profit or loss. The investment was measured at cost due to the minority interest
it had in a private internet-based software company which is in a growth phase and is very
volatile in nature and as a result has an extremely wide valuation matrix.
In the current year this investment was measured at fair value through other comprehensive income.
IFRS 9 Financial Instruments was adopted in the current year and replaces IAS 39. This note
reflects the application of IFRS 9 to the specified instruments. Prior-year figures have not been restated.
6. DISCONTINUED OPERATIONS
PBT Group successfully disposed of Prescient Capital and its subsidiaries (Prescient Capital)
and shares held in Prescient Holdings Proprietary Limited (Prescient Holdings) on 28 September 2018.
The necessary announcement was published on SENS for the finalisation of the transaction.
The settlement of the total purchase price of R65.8 million for Prescient Capital and
Prescient Holdings was settled by way of a deposit of R4.8 million and the balance was accounted
for as a specific share repurchase against equity.
Also included in the Circular and Supplementary Circular released on 23 March 2018 and 28 August 2018,
respectively, was a share consolidation on the basis of one ordinary share for every 10 authorised
and issued ordinary shares and the cancellation of the specific repurchase received as part of the
consideration. Please refer to note 7 - Share capital for the effects of the specific repurchase
and share consolidation on the share capital of the Group.
The transaction is classified as both a specific repurchase and a related party transaction in
terms of the JSE Listings Requirements.
GROUP
Rand 2019 2018
Results of discontinued operations
Revenue 4 816 394 11 542 901
Other income 1 124 409 2 315 088
Foreign currency reserve released 20 723 419 -
Impairment loss (12 842 435) (42 848 287)
Expenses (4 770 558) (13 452 860)
Results from operating activities 9 051 229 (42 443 158)
Tax 62 626 162 553
Results from operating activities, net of tax 9 113 855 (42 280 605)
Gain on sale of discontinued operations - -
Profit for the year 9 113 855 (42 280 605)
Earnings/(loss) per share (cents)
Basic earnings per share 7.34 (2.82)
Diluted earnings per share 7.34 (2.82)
Profit from discontinued operations of R9.1 million (2018: loss of
R42.3 million) was attributable to the owners of the Company.
The consideration for the assets disposed of is based on the sum of
the cash received and the value of the underlying shares received.
Carrying value of assets 60 340 731 93 397 213
Fair value of consideration received:
Cash 4 789 488 4 789 488
Fair value of underlying shares received (305 062 917 at 14 cents
per share) (2018: 305 062 917 at 15 cents per share) 42 708 808 45 759 438
47 498 296 50 548 926
Impairment loss 12 842 435 42 848 287
Cash flows from/(used in) discontinued operations
Net cash from operating activities 1 089 358 24 816 072
Net cash used in investing activities (937 176) 30 404 900
Net cash from financing activities (351 378) (54 363 206)
Net cash flow for the year (199 196) 857 766
Net assets disposed of during the year
Assets disposed of during the year (2018: assets held for sale)
Property and equipment 730 379 47 608
Investment property 29 754 662 36 428 050
Financial assets at fair value through profit or loss 19 478 737 17 776 668
Trade and other receivables 1 045 293 920 608
Long-term loans receivable 127 546 288 480
Taxation receivable - 128 042
Cash and cash equivalents 1 259 872 1 531 504
52 396 489 57 120 960
Liabilities sold during the year
(2018: liabilities of disposal group)
Deferred tax liability (219 467) (302 957)
Long-term loans payable (3 555 621) (5 259 536)
Trade and other payables (1 123 106) (1 009 540)
(4 898 194) (6 572 033)
Net assets and liabilities disposed of during the year
(2018: held for sale) 47 498 295 50 548 927
Consideration received in cash - (4 789 488)
Cash and cash equivalents - (1 531 504)
Net cash inflow - (6 320 992)
7. SHARE CAPITAL
GROUP
Rand 2019 2018
Authorised
200 000 000 ordinary shares of no par value (2018: 2 000 000 000
ordinary shares of no par value) - -
Reconciliation of number of shares issued
Reported as at 1 April 1 669 250 950 1 669 250 950
Specific repurchased shares cancelled (305 062 917) -
Share consolidation (2 November 2018) (1 227 769 230) -
Fraction rate shares delisted (54) -
Treasury shares to be cancelled (28 471 787) (270 188 033)
Shares held by BEE company (Spalding Investments 10 Proprietary
Limited) treated as treasury shares (10 373 282) -
97 573 680 1 399 062 917
92 053 038 unissued ordinary shares are under the control of the
Directors in terms of a resolution of members passed at the last
Annual General Meeting. This authority remains in force until the
next Annual General Meeting.
Issued
Ordinary shares of no par value 117 935 401 117 804 955
Share-based payment shares included in treasury shares (16 500 000) -
Treasury shares (97 944 480) (52 446 014)
3 490 921 65 358 941
Transactions during the year
As part of the consideration for the disposal of the Prescient Capital Group, PBT Group received
305 062 917 PBT Group Limited shares. These shares are treated as a specific share repurchase
against equity and was included in treasury shares. These shares have been cancelled and does not
form part of the issued capital anymore.
As part of the Circular and Supplementary Circular released on 23 March 2018 and 28 August 2018,
respectively, a share consolidation of the Company's authorised and issued share capital on a
1-for-10 basis was approved and has taken effect on 2 November 2018.
Treasury shares
The treasury shares that were previously separately disclosed are shares held by PBT Group Limited.
As per section 35(5) of the Companies Act, shares that are acquired by a company have the same
status as shares that have been authorised but not issued. These treasury shares that have not
been cancelled are now presented net as a reduction of share capital instead of gross in an
equity reserve.
BEE transaction treated as treasury shares
During February 2019 PBT Group Limited granted a loan of R16 500 000 to a BEE company in order
to purchase shares in PBT Group Limited. The loan is structured as a preference share agreement
and the owners of the BEE company are employees within the Group. Future dividends received
through these shares will be applied to cover the preference dividends calculated at 72% of
prime rate compounded six monthly. As the only security for the repayment of the loan is the
underlying PBT Group Limited shares, with no recourse, the transaction is treated as the issue
of an option to the BEE parties and the amount is reflected as treasury shares (deduction in equity).
Please refer to note 8 for more information on the transaction.
The loan to the BEE company was advanced by a subsidiary in the PBT Group. Therefore in the
Company's accounts this was a non-cash financing transaction.
The shares that the BEE company owns are still considered to be issued and will not form part of
the unissued shares under the control of the Directors. These shares are classified as treasury
shares as per IFRS 2 Share-based Payments.
GROUP
Number of shares 2019 2018
Treasury share movements during the year
Reported as at 1 April 2018 270 188 033 9 871 888
Specific repurchase as per specific authority granted 305 062 917 -
Specific repurchased shares cancelled* (305 062 917) -
Purchased by PBT Group Limited - 47 776 900
Purchased by subsidiary - 2 221 178
Transfers - 210 318 067
Share consolidation** (243 169 229) -
Shares purchased from dissenting shareholders in terms of
section 164 of the Companies Act 1 452 983 -
Shares held by BEE company (Spalding Investments 10 Proprietary
Limited) treated as treasury shares 10 373 282 -
38 845 069 270 188 033
* On 28 September 2018 the shareholders approved Special Resolution Number 1 for the specific
repurchase of 305 062 917 ordinary shares and the subsequent cancellation of the treasury
shares. The effective date of the cancellation of the treasury shares was 30 October 2018
and the shares were delisted.
** On 28 September 2018 the shareholders approved Special Resolution Number 2 for a share
consolidation on the basis of one ordinary share for every 10 authorised and issued ordinary
shares, with all fractional entitlements rounded down to the nearest whole number. The effective
date of the share consolidation was 2 November 2018. As a result of the share consolidation
the number of authorised shares in issue as at the date of this report is 200 000 000.
Other than the specific transactions mentioned above, no purchases were made during the
2019 financial year. The average purchase price per share during the 2018 financial year was
16.14 cents per share. (If the share consolidation that took place on 2 November 2018 is taken
into account the average price would have been R1.61.)
During the 2018 financial year the Group made a capital reduction payment of a net amount of R26 209 633.
8. SHARE-BASED PAYMENTS
During February 2019 PBT Group Limited entered into a loan agreement with a BEE company called
Spalding Investments 10 Proprietary Limited (Spalding or the BEE company). A loan of R16 500 000
was advanced to the BEE company for the purpose of purchasing shares in PBT Group Limited.
The owners of Spalding are employees of the PBT Group and are required to remain employed within
the Group for a period of seven years in accordance with the shareholders' agreement. The loan
was structured as a preference share agreement with the following key terms:
- The preference dividends are calculated in arrears at a rate of 72% of the prime rate.
- Any preference dividends not paid out on a six-monthly basis will be rolled up and accrued for
repayment at a later date, the latest date being the redemption date.
- The preference shares are redeemable in three tranches, being:
- the first 33.33% five years after issue date (February 2024);
- the next 33.33% six years after issue date (February 2025); and
- the final 33.33% seven years after issue date (February 2026), including any rolled up or
unpaid preference dividends.
- The dividends that Spalding will receive from its investment in PBT Group Limited will be
utilised to repay the preference dividends and part capital if the dividends received are in
excess of the preference dividends payable.
As the only security for the repayment of the loan is the underlying PBT Group shares, with no
other recourse, the transaction is treated as a share-based payment transaction under IFRS 2 and
the loan is accounted for as treasury shares. The vesting period is seven years, with the only
vesting condition being that the individual remains an employee of the Group over the period.
The fair value of the share-based payment award has been calculated using share option valuation
techniques on the following basis:
Number Vesting Strike Fair value
of shares date price at grant date
Tranche 1 3 457 761 Feb 2024 Variable 20 cents
Tranche 2 3 457 761 Feb 2025 Variable 19 cents
Tranche 3 3 457 760 Feb 2026 Variable 14 cents
Total 10 373 282 17.66 cents*
* Weighted average.
The strike price has been defined as the redemption price of the preference shares with adjustments
made for compounded interest payments on the preference shares, reduced by expected future
PBT dividend payments in accordance with the terms of the agreement.
No options have vested or were exercised yet as the transaction was only implemented on
14 February 2019 and the first tranche vests in five years' time. The weighted average fair
value of each option granted during the year was 17.66 cents.
2019 2018
Equity settled Not
applicable
for the
2018 year
Option pricing model used Black-Scholes
Share price at date of grant (cents) 135
Contractual life (days) 1 825 - 2 555
Volatility relative to comparator index 33.48%
Risk-free interest rate:
5-year maturity 8.6%
6-year maturity 8.94%
7-year maturity 9.24%
Dividend growth rate relative to comparator index 6%
The implied volatility was calculated on the stock price movement of PBT Group Limited. However,
numerous anomalous events occurred that distorted the percentage and reverted to comparable
companies to calculate the volume weighted average volatility.
The share-based remuneration expense comprises:
Rand 2019 2018
Equity settled 32 147 -
The Group did not enter into any share-based payment transactions with parties other than
employees during the current or previous period.
9. REVENUE
GROUP
Rand 2019 2018
Revenue from contracts with customers
Sale of goods 3 395 635 3 883 128
Rendering of services 585 018 774 552 210 439
588 414 409 556 093 567
Disaggregation of revenue from contracts with customers
The Group has disaggregated revenue into various categories in the
following table which is intended to:
- depict the nature, amount and timing of revenue; and
- enable users to understand the various types of counterparties that
the Group provides services to.
Contract type
Fixed price contracts 121 383 350 -
Projects 24 403 240 -
Software licences 3 395 635 -
Time and material 421 969 573 -
Usage-based licences 17 262 611 -
588 414 409 -
Contract counterparties
Energy 13 422 800 -
Financial services 289 071 318 -
Information technology 99 958 858 -
Medical 29 656 057 -
Retail 45 010 492 -
Services 22 012 498 -
Telecommunications 89 282 386 -
588 414 409 -
Total revenue from contracts with customers 588 414 409 -
Timing of revenue recognition
At a point in time
Sale of goods 3 395 635 -
Over time
Rendering of services 585 018 774 -
Total revenue from contracts with customers 588 414 409 -
The Board has elected to apply the modified retrospective adoption method when transitioning to
IFRS 15 and as such no comparative figures are required to be disclosed in this note.
10. RELATED PARTIES
Relationships
Subsidiaries Members of key management and loans to staff
BI-Blue Consulting Proprietary Limited NA Freddy
CyberPro Consulting Proprietary Limited JC du Toit
PBT Group (South Africa) Proprietary Limited MN Engelbrecht
PBT Group Europe Besloten Vennootschap NJ Viljoen
PBT Group International Besloten Vennootschap W Viljoen
PBT Infosight Proprietary Limited M Visser
PBT Insurance Technologies Proprietary Limited HB Vosloo
PBT Technology Services (MEA) Proprietary Limited H Woest
PBT Technology Services Proprietary Limited
PBT Technology Services Ireland Limited
Spalding Investments 10 Proprietary Limited
Stadia International British Virgin Islands
Stricklands Tetra Cape Proprietary Limited
Technique Business Intelligence Software Proprietary Limited
GROUP
Rand 2019 2018
Related party balances
Loan accounts owing by related parties
JC du Toit 416 343 50 338
MN Engelbrecht 329 391 -
NJ Viljoen 416 343 50 338
W Viljoen 2 445 930 1 307 542
M Visser 416 343 50 338
HB Vosloo 413 185 -
H Woest 416 343 50 338
Amounts included in trade and other receivables regarding related parties
NA Freddy 20 786 -
Compensation to Directors and other key management
Short-term employee benefits 27 765 511 10 065 000
A loan was advanced to Spalding Investment 10 Proprietary Limited to the amount of R16 500 000,
which used the proceeds to purchase ordinary shares in PBT Group Limited. As the only security
for the repayment of the loan is the underlying PBT Group shares, with no recourse, the transaction
is treated as the issue of an option to the BEE parties and the loan and shares issued are not
recognised. Please refer to note 8 for full details on the transaction.
11. COMPARATIVE FIGURES
Certain prior-year comparative figures have been reclassified for consistency with the current-year
presentation of the consolidated annual financial statements. These reclassifications had no
effect on the reported results of operations.
The effects of the reclassification are as follows:
31 March 2018
As originally Reclassifi- 31 March 2018
presented cation As restated
GROUP
Statement of financial position
Share capital (1) 117 804 955 (52 446 014) 65 358 941
Reserves (1) (39 536 842) 52 446 014 12 909 172
Payroll-related accruals (previously provisions) (2) 6 790 383 1 794 050 8 584 433
Trade and other payables (2) 35 852 408 (1 794 050) 34 058 358
1. Treasury shares were previously classified under reserves in the statement of financial position.
These shares have now been reclassified to share capital.
2. The line item on the face of the statement of financial position has been renamed from
provisions to payroll-related accruals. An accrual for leave pay was previously classified
under trade and other payables. This amount has now been reclassified from trade and other
payables to payroll-related accruals.
12. EARNINGS PER SHARE
Cents 2019 2018
Basic earnings per share
Continuing operations 17.97 (97.28)
Discontinued operations 7.35 (28.20)
Diluted earnings per share
Continuing operations 17.97 (97.28)
Discontinued operations 7.35 (28.20)
The calculation of basic earnings per share as at 31 March 2019 was
based on the profit attributable to ordinary shareholders of
R31 million (2018: loss of R188.1 million) and a weighted average
of ordinary shares outstanding of 124 063 076 (2018: 149 920 549).
Diluted earnings per share is equal to basic earnings per share.
Diluted headline earnings per share is equal to headline earnings
per share.
Weighted average number of ordinary shares
Ordinary shares at 1 April 1 669 250 950 1 669 250 950
Share consolidation 166 925 095 166 925 095
Effect of treasury shares held (42 521 023) (17 004 546)
Shares held by BEE company included in treasury shares (340 996) -
124 063 076 149 920 549
Headline earnings per share
GROUP
2019 2018
Rand Gross Net Gross Net
Continuing operations
Profit attributable to equity holders of the parent 22 299 599 (145 835 399)
Losses on disposal of assets 348 153 250 670 - -
Impairments of assets 38 367 27 624 125 599 893 125 599 893
Headline earnings 22 577 893 (20 235 506)
Discontinued operations
Profit attributable to equity holders of the parent 9 113 855 (42 280 605)
Restatement to fair value of discontinued operations 12 842 435 12 842 435 16 371 089 16 371 089
Release of foreign currency translation reserve to
the statement of profit/loss (20 723 419) (20 723 419) - -
Change in fair value of investment property - - (3 545 056) (3 545 056)
Impairments of assets - - 26 477 198 26 477 198
1 232 871 (2 977 373)
GROUP
Cents 2019 2018
Headline earnings per share
Continuing operations 18.18 (13.50)
Discontinued operations 0.99 (1.99)
Diluted headline earnings per share
Continuing operations 18.18 (13.50)
Discontinued operations 0.99 (1.99)
Distributions
Capital reduction distribution - 1.57
13. SEGMENT REPORT
As a result of the exiting of services in the Middle East/Africa (MEA), management no longer
considers MEA to be a reportable segment.
Furthermore, the MEA operating segment does not meet any of the quantitative threshold requirements
in terms of IFRS 8 Operating Segments.
All amounts relating to the MEA have been presented in the "Other" segment in the current year.
Due to the expansion of the business into the European market, management considers Europe to be
a new segment in the current year.
The reportable segments for the current financial year are according to geographical areas, namely
South Africa, Australia and Europe.
- South Africa includes consulting and implementation of data, management information software
and healthcare administration services in the Republic of South Africa.
- Australia includes consulting and implementation of data, management information software and
healthcare administration services in Australia.
- Europe includes consulting and implementation of data, and management information software in Europe.
The Group evaluates segmental performance on the basis of profit or loss from operations calculated
in accordance with IFRS but excluding non-recurring losses such as goodwill impairment and the
effects of share-based payments.
South Africa Australia Europe Other Total
2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
Rand Restated Restated Restated
Continuing operations
Revenues from external clients 476 915 874 404 231 382 60 041 772 64 383 335 10 324 203 6 038 126 41 132 560 81 440 724 588 414 409 556 093 567
Other income 240 903 52 325 - 272 982 - - 1 031 966 2 542 050 1 272 869 2 867 357
Interest revenue 3 260 745 2 026 453 112 129 115 664 - - 439 380 3 893 152 3 812 254 6 035 269
Cost of sales (361 587 160) (301 312 403) (52 173 460) (55 010 480) (1 315 017) (4 180 552) (25 789 730) (97 469 276) (440 865 367) (457 972 710)
Depreciation and amortisation (1 403 862) (1 774 267) (49 918) (516 440) - - (1 779 291) (3 011 582) (3 233 070) (5 302 289)
Impairments (38 367) (75 020) - - - - - (1 365 992) (38 367) (1 441 012)
Operating expenses (75 314 699) (65 569 469) (6 071 290) (6 866 555) (4 258 924) - (17 138 499) (14 404 005) (102 783 412) (86 840 028)
Interest expense (852 465) (1 785 363) (88) (5 078) - - (356 193) (3 400 496) (1 208 747) (5 190 937)
Income tax expense (12 127 336) (7 115 833) (553 765) (681 346) (38 713) - (4 378 171) (14 221 149) (17 097 985) (22 018 328)
Profit/(loss) for the year 29 093 632 28 677 807 1 305 380 1 692 083 4 711 550 1 857 574 (6 837 978) (45 996 573) 28 272 584 (13 769 110)
Discontinued operations
Revenues from external clients - - - - - - 4 816 394 11 542 901 4 816 394 11 542 901
Other income - - - - - - 1 096 511 3 693 331 1 096 511 3 693 331
Interest revenue - - - - - - 27 898 127 489 27 898 127 489
Foreign currency reserve released - - - - - - 20 723 419 - 20 723 419 -
Depreciation and amortisation - - - - - - (19 196) (52 021) (19 196) (52 021)
Impairments - - - - - - (12 842 435) (14 286 917) (12 842 435) (14 286 917)
Operating expenses - - - - - - (4 385 212) (19 609 575) (4 385 212) (19 609 575)
Interest expense - - - - - - (366 150) (1 136 392) (366 150) (1 136 392)
Income tax expense - - - - - - 62 626 162 553 62 626 162 553
Profit/(loss) for the year - - - - - - 9 113 855 (19 558 630) 9 113 855 (19 558 630)
South Africa Australia Europe Other Total
2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
Rand Restated Restated Restated
Group
Revenues from external clients 476 915 874 404 231 382 60 041 772 64 383 335 10 324 203 6 038 126 45 948 954 92 983 625 593 230 803 567 636 468
Other income 240 903 52 325 - 272 982 - - 2 128 477 6 235 381 2 369 380 6 560 688
Interest revenue 3 260 745 2 026 453 112 129 115 664 - - 467 278 4 020 641 3 840 152 6 162 758
Foreign currency reserve released - - - - - - 20 723 419 - 20 723 419 -
Cost of sales (361 587 160) (301 312 403) (52 173 460) (55 010 480) (1 315 017) (4 180 552) (25 789 730) (97 469 276) (440 865 367) (457 972 710)
Depreciation and amortisation (1 403 862) (1 774 267) (49 918) (516 440) - - (1 798 487) (3 063 603) (3 252 266) (5 354 310)
Impairments (38 367) (75 020) - - - - (12 842 435) (15 652 909) (12 880 802) (15 727 928)
Operating expenses (75 314 699) (65 569 469) (6 071 290) (6 866 555) (4 258 924) - (21 523 711) (34 013 580) (107 168 624) (106 449 603)
Interest expense (852 465) (1 785 363) (88) (5 078) - - (722 343) (4 536 888) (1 574 897) (6 327 329)
Income tax expense (12 127 336) (7 115 833) (553 765) (681 346) (38 713) - (4 315 545) (14 058 596) (17 035 358) (21 855 775)
Profit/(loss) for the year 29 093 632 28 677 807 1 305 380 1 692 083 4 711 550 1 857 574 2 275 878 (65 555 204) 37 386 440 (33 327 741)
Continuing operations
Segment assets* 120 003 612 90 013 256 26 105 076 20 282 517 5 286 300 - 34 042 428 54 154 550 185 437 417 164 450 323
Intangible assets 221 872 479 430 - - - - 22 754 195 653 244 626 675 082
Total assets 120 225 485 90 492 686 26 105 076 20 282 517 5 286 300 - 34 065 182 54 350 203 185 682 043 165 125 405
Segment liabilities (35 286 857) (27 632 909) (7 160 215) (4 748 301) (361 008) - (7 781 242) (12 372 175) (50 589 321) (44 753 385)
Discontinued operations
Segment assets* - - - - - - - 57 120 959 - 57 120 959
Intangible assets - - - - - - - - - -
Total assets - - - - - - - 57 120 959 - 57 120 959
Segment liabilities - - - - - - - (6 572 032) - (6 572 032)
Group
Segment assets* 120 003 612 90 013 256 26 105 076 20 282 517 5 286 300 - 34 042 428 111 275 509 185 437 417 221 571 282
Intangible assets 221 872 479 430 - - - - 22 754 195 653 244 626 675 082
Total assets 120 225 485 90 492 686 26 105 076 20 282 517 5 286 300 - 34 065 182 111 471 162 185 682 043 222 246 364
Segment liabilities (35 286 857) (27 632 909) (7 160 215) (4 748 301) (361 008) - (7 781 242) (18 944 208) (50 589 321) (51 325 417)
* Goodwill is not managed as part of segment assets and has therefore been excluded.
Rand 2019 2018
Reconciliation of reportable segment revenue
Total consolidated income for reportable segments 593 230 803 567 636 468
Elimination of discontinued operations (4 816 394) (11 542 901)
Consolidated total income 588 414 409 556 093 567
Reconciliation of profit before taxation
Total consolidated profit before taxation for reportable segments 54 421 798 (11 471 966)
Less impairment of goodwill - (125 599 893)
Less share-based payment expense (32 147) -
Add other operating gains (497 750) -
Add gains/losses on exchange differences 1 152 300 -
Add movement in credit loss allowances 4 752 726 -
Elimination of discontinued operations (9 051 229) 19 721 183
Consolidated profit before taxation 50 745 698 (117 350 675)
Reconciliation of assets
Total assets for reportable segments 151 616 861 110 775 202
Goodwill 135 666 420 135 666 420
Assets for other segments 34 065 182 111 471 162
Elimination of discontinued operations - (57 120 959)
Consolidated total assets 321 348 464 300 791 826
Reconciliation of liabilities
Total liabilities for reportable segment (42 808 079) (32 381 210)
Liabilities for other segments (7 781 242) (18 944 208)
Elimination of discontinued operations - 6 572 032
Consolidated total liabilities (50 589 321) (44 753 385)
Country of incorporation
South Africa
Nature of business and principal activities
Information management and data analytics services
Directors
Tony Taylor (Independent Non-Executive Chairman)
Pierre de Wet (Chief Executive Officer)
Murray Louw (Financial Director)
Cheree Dyers (Independent Non-Executive Director)
Herman Steyn (Non-Executive Director)
Arthur Winkler (Independent Non-Executive Director)
Audit and Risk Committee
Arthur Winkler (Chairman)
Cheree Dyers
Tony Taylor
Remuneration and Nomination Committee
Cheree Dyers (Chairman)
Herman Steyn
Tony Taylor
Arthur Winkler
Social and Ethics Committee
Elizna Read (Chairman)
Cheree Dyers
Tony Taylor
Company Secretary
Bianca Pieters
Registered office
PBT House
2 Mews Close
Waterford Mews
Century City
7441
South Africa
Postal address
PO Box 276
Century City
7446
South Africa
Auditors
BDO Cape Incorporated
Sponsor
Sasfin Capital (a Member of the Sasfin Group)
Transfer Secretaries
Link Market Services South Africa Proprietary Limited
PO Box 4844, Johannesburg, 2000, South Africa
19 Ameshoff Street, Braamfontein, 2001, South Africa
Website
www.pbtgroup.co.za
Cape Town
1 July 2019
Date: 01/07/2019 04:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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