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VALUE GROUP LIMITED - Reviewed Condensed Consolidated Financial Results for the year ended 29 February 2020

Release Date: 12/06/2020 16:48
Code(s): VLE     PDF:  
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Reviewed Condensed Consolidated Financial Results for the year ended 29 February 2020

Value Group Limited

(Incorporated in the Republic of South Africa)

Registration number 1997/002203/06

ISIN number: ZAE000016507    Share code: VLE

Reviewed Condensed Consolidated Financial Results 

for the year ended 29 February 2020

Directors: C D Stein* (Chairman), S D Gottschalk (CEO), C L Sack, 

I M Groves*, N M Phosa*, M Padiyachy, V W Mcobothi*,B Bulo* 

*Non-executive director

Sponsor: Investec Bank Limited

Revenue up 4% R2,88bn

Headline earnings per share UP 22% 92,2 cents

Earnings per share UP 22% 89,5 cents

Net asset value per share up 9% 564,6 cents

Cash generated by operations UP 12% R599m

Final dividend per share down 11% 24 cents

Value Group Limited and its subsidiaries ("the Group") provide a comprehensive range of tailored logistical solutions 

throughout southern Africa. 


The poor economic conditions have proven to be very challenging with consumer demand, volume and pricing pressures 

affecting the wholesale and certain logistics divisions within the various segments. Volume decline was however 

partially mitigated by management's strategic initiatives of growing the customer base organically in addition to 

cross selling of Group services which contributed to revenue increasing by a marginal 4% from R2,78 billion to R2,88 


Ongoing focus on improving operational efficiencies in addition to improved planning and maintenance cost savings 

contributed to gross profit margins improving from 31,7% to 32,9%. Gross profit increased by 7,4% to R947,8 million 

while operating profit increased marginally to R257,7 million.

The Group adopted IFRS16 effective 1 March 2019 whereby a right-of-use asset and an associated liability is raised for 

its operating leases. The Group applied the full retrospective approach in its adoption of IFRS16.

The Group benefited from a reduction in the effective tax rate from 25,8% to 24,3% due to the comparative period's 

inclusion of an under-provision pertaining to a prior period and the receipt in the current period of an allowance for 

energy efficiency savings.

The combined effects of the above has contributed to headline earnings per share increasing by 22% to 92,2 cents per 


Notwithstanding increased working capital requirements from the accelerated payment cycle on conversion of the 

remaining labour broker staff to permanent employees, minor increases in inventory and receivable balances from growth 

in the customer base and ongoing focus on working capital management yielded improved cash flow results. Debtors 

collections during the second half of the financial year were very strong and exceeded expectations. In addition, the 

Group generated record proceeds on disposal of older vehicles amounting to R59,1 million. Consequently, cash generated 

by operations increased by 12% to R598,7 million. The improvement in cash generated by operations resulted in cash 

resources at year end increasing by a significant R86,6 million to R262,6 million. 


The Group has implemented stringent SHEQ compliance procedures to ensure the health, safety and wellbeing of its 

employees in order to fulfil its part in controlling and eradicating the spread of the Covid-19 pandemic. Aside from 

preventing the spread of the virus, extensive focus has been applied in safeguarding the sustainability and operations 

of the Group. 

To date, the extent of the Group's cash resources materially exceeds that budgeted. The Group is thus solvent, has 

adequate cash resources and banking facilities required to continue trading into the future. 


Trading performance subsequent to year end has been affected by Covid-19. The Group continues to deal with these 

challenges noting the following:

There have been no significant increases in credit risk as customers have generally continued to pay in accordance 

with agreed credit terms. 

Trade creditors have been settled without any extension of terms and tax returns have been paid on time without 

requiring any form of financial assistance.

Disposal of older assets has gained momentum with proceeds realised being similar to that achieved in the previous 

financial year. 

Accordingly, no significant impairments to any of the Group's assets are currently required as a result of the Covid-

19 lockdown measures.

The implementation of the level 5 lockdown, resulted in a material reduction in revenue. The Group was designated as 

an essential service provider and was permitted to provide services to a limited number of customers supplying 

essential goods. Accordingly, April 2020 revenue was 32,6 % below that of April 2019. As lockdown restrictions eased 

to level 4, more of the Group's customers were permitted to trade which resulted in a material increase in revenue 

compared to April 2020. Revenue in May 2020 was however only 5,3% down on May 2019. Notwithstanding the aforementioned 

reduction in revenue, profitability was materially better than expected albeit less than last year. With the shift to 

less restrictive level 3 lockdown, the Group became almost fully operational.


COVID-19 will have an effect on the Group's 2021 results. Despite the damaging effects of COVID-19, the Group's 

business characterized by low debt levels, substantial asset base and the ability to generate positive cash flows will 

ensure its sustainability into the foreseeable future. The Group is resilient and well positioned to adapt and grow in 

this changing environment. In this light, the Group has been successful in growing its customer base with the 

onboarding of a number of new customers in the current financial year. Lastly, further improvements in certain 

operations should contribute to improved profitability and sustainability in the years ahead.

Any reference to future financial performance included in this announcement has not been reviewed nor reported on by 

the Group's auditors.


The Group's net cash position is highly positive with access to adequate banking facilities should the need arise. 

Accordingly, the Group has sufficient cash balances to increase its final dividend, however, due to the uncertainty of 

COVID-19, the Board has considered that a more conservative approach be adopted and therefore resolved to declare a 

reduced gross final dividend for the year ended 29 February 2020 of 24 cents per ordinary share which will be paid out 

of distributable reserves. This dividend is covered 2,52 times by second half headline earnings. The number of 

ordinary shares in issue at the date of this declaration is 172 635 000.  The dividend will be subject to dividend 

withholding tax of 20% which amounts to 4,8 cents per  share. This will result in a net dividend of 19,2 cents per 

share payable to those shareholders who are not exempt from paying dividend withholding tax. The tax reference number 

of Value Group Limited is 9319054715. The dividend is payable to shareholders as follows:

Declaration date                       Friday, 12 June 2020

Last day to trade cum dividend       Tuesday, 4 August 2020

Trading ex-dividend commences      Wednesday, 5 August 2020

Record date                           Friday, 7 August 2020

Payment date                        Tuesday, 11 August 2020

Share certificates may not be dematerialised or rematerialised between Wednesday, 5 August 2020 and Friday, 7 August 

2020, both days inclusive.


This short form announcement is the responsibility of the directors and is only a summary of the information in the 

full announcement. The full announcement was released on SENS at on 12 June 2020 and is also available on the Group's 

website at Copies of the full announcement may also be requested at the company's registered office, 

at no charge, during office hours. The Group's auditor, SVG has reviewed these results. A copy of their unmodified 

review report is available for inspection at the Company's registered office. Any investment decision must be based on 

the full announcement published.

For and on behalf of the Board 

C D Stein          S D Gottschalk

Chairman          Chief Executive Officer


12 June 2020


Investec Bank Limited

Company Secretary:

Fluidrock Advisory (Pty) Ltd

Transfer secretary:

Computershare Investor Services (Pty) Ltd

Registered office: 

49 Brewery Road, Isando, 1600, PO Box 778, Isando, 1600, Tel: (011) 570 2000

Date: 12-06-2020 04:48:00
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