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COGNITION HOLDINGS LIMITED - Short Form Announcement - Unaudited Condensed Consolidated Interim Results

Release Date: 11/03/2020 15:15
Code(s): CGN     PDF:  
 
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Short Form Announcement - Unaudited Condensed Consolidated Interim Results

COGNITION HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number: 1997/010640/06)
Share code: CGN ISIN: ZAE000197042
("Cognition" or "the Group" or "the Company")

SHORT FORM ANNOUNCEMENT - UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS 
FOR THE SIX MONTHS ENDED 31 DECEMBER 2019

REVENUE *                            +75.1%
GROSS PROFIT *                      +100.2%
PROFIT BEFORE TAX *                  +24.6%
PROFIT FOR THE PERIOD *              +29.7%
EARNINGS PER SHARE +                 -49.9%

* Includes Private Property South Africa Proprietary Limited ("Private Property")
+ Decrease as a consequence of the dilutionary effect following the issue of 103 883 333 Cognition 
shares for the acquisition of Private Property in February 2019.

Financial Position as at:                              31 Dec 2019      31 Dec 2019      30 Jun 2019
                                                        (Unaudited)      (Unaudited)        (Audited)
                                            Change           R’000            R’000            R’000 
Total assets                                 47.3%         315 425          214 183          354 807
Cash and cash equivalents                   -12.6%          68 984           78 920          123 439
Capital and reserves                         72.2%         260 379          151 193          297 950
Total liabilities                           -12.6%          55 046           62 990           56 857

Financial Performance for the period:                                        
                                                         Unaudited        Unaudited          Audited
                                                          6 months         6 months        12 months
                                                             ended            ended            ended
                                                       31 Dec 2019      31 Dec 2018      30 Jun 2019
                                                             R’000            R’000            R’000
Revenue                                      75.1%         145 739           83 239          215 149
Gross profit                                100.2%         112 424           56 165          155 325
Profit before tax                            24.6%          17 363           13 936           25 833
Dividends paid                              218.3%          26 272            8 255            8 255

Net asset value and earnings per share:                                        
Net asset value per share                   -3.95%    104.97 cents     109.28 cents     116.05 cents
Basic earnings per share (cents)            -49.9%            3.40             6.79             8.17
Headline earnings per share (cents)         -50.4%            3.37             6.79             8.17

In general, market conditions have deteriorated and business confidence is low, resulting in a 
challenging interim period across most of the Group’s operating divisions.

A large portion of the Group’s services depends on our traditional clients engaging in consumer 
engagement services, promotions or research projects. As they have been constrained in the difficult 
trading ecosystem with the resultant weak consumer spending, they have limited their consumer 
interactions drastically, which has had a "knock-on effect" on our Group’s diverse operating assets. 
Notwithstanding this, Private Property was able to perform in line with its budget and new strategic 
objectives

Prospects

The protracted economic slowdown, with the consumer under pressure, is expected to continue in 2020. 
The country is battling rising unemployment, poverty and inequality and a continuously declining GDP. 
This has a net negative impact on consumer confidence and consumption resulting in many businesses 
curtailing expansion plans and expenditure.

Our strategy going forward is aimed at ensuring each operating asset "re-invents" and re-aligns 
itself to become more relevant to our current or potential clients in the context of the country’s 
challenging economic environment.

Private Property has implemented a strategy to enhance the platform and develop new growth areas 
which is already providing additional value to both buyers and sellers of properties, renters and 
estate agents. The strategy has resulted in enhanced growth in key metrics. The strategy will enable 
Private Property to become the leading and premier property portal. 

New revenue streams and channels to market are being developed and deployed in an organic strategy. 
Our newly formed Universal ID (UNiID) holds great promise in a new economy which is forced to comply 
with enhanced privacy regulations and offer more focussed and personalised offerings.

We are optimistic that we can bring a number of new offerings (platforms) to the market in the next 
six months.

Costs will also be contained and the "shared services" strategy across the Group’s assets will be 
enhanced.

We continue to look for appropriate and relevant acquisitions in line with our overall platform 
strategy.

DIVIDEND POLICY

Although an interim dividend was declared in 2017, the Group traditionally only pays an annual 
dividend. The Board has decided to not declare an interim dividend and to rather preserve cash for 
acquisition purposes.

Directors: Ashvin Mancha#* - Chairman, Mark Smith - Chief Executive Officer, Pieter Scholtz - 
Financial Director, Gaurang Mooney#* (Botswana), Graham Groenewaldt - Sales Director, Paul Jenkins#*, 
Roger Pitt#*, Marc du Plessis#, Piet Greyling#, Trevor Ahier#*, Dennis Lupambo#* # Non-executive * 
Independent

This short-form announcement is the responsibility of the directors. This announcement is only a 
summary of the information in the full announcement and does not contain full or complete details. 
The full announcement was released on SENS on 11 March 2020, is available at 
https://senspdf.jse.co.za/documents/2020/jse/isse/cgn/interim20.pdf and can be found on the Company’s 
website at www.cognitionholdings.co.za. Copies of the full announcement may also be requested at the 
Company’s registered office or the office of the sponsor, Merchantec Capital, at no charge, during 
office hours. Any investment decision should be based on the full announcement released on SENS and 
published on the Company’s website.

Johannesburg
11 March 2020

Sponsor
Merchantec Capital

Date: 11-03-2020 03:15:00
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