Imara Holdings (Botswana) HY 2009 financial results


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Imara Holdings (Botswana) HY 2009 financial results

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Imara Holdings (Botswana) HY 2009 financial results

  1. 1. SALIENT FEATURES - Total revenue increased by 3% - Profit after taxation decreased by 6% - Diluted earnings per share decreased by 12% - Net cash reserves increased to P110.6 million - Net borrowings unchanged at zero ABRIDGED CONSOLIDATED INCOME STATEMENT Un-audited Un-audited Period Audited Six months ended Six months ended on period Year ended 31 October 2008 31 October 2007 change 30 April 2008 Pula Pula % Pula Re-stated Continuing operations: Total revenue 61,561,267 59,626,573 3.24 181,455,656 Total expenses (53,154,894) (46,030,769) 15.48 (115,380,216) Profit before taxation 8,406,373 13,595,804 (38.17) 66,075,440 Taxation (2,305,215) (6,337,853) (63.63) (9,692,211) Profit for the period from continuing operations 6,101,158 7,257,951 (15.94) 56,383,229 Discontinued operations: Loss after tax for the period from discontinued operations - (771,671) (801,576) Profit for the year 6,101,158 6,486,280 (5.94) 55,581,653 Attributable earnings: Attributable to equity holders of the parent 6,106,782 6,864,399 (11.04) 56,449,140 Minority interest (5,624) (378,119) (98.51) (867,487) Profit after taxation - per above 6,101,158 6,486,280 (5.94) 55,581,653 Earnings per share: Number Number Number Weighted number of shares in issue - basic 55,761,433 54,085,056 54,876,969 Weighted number of shares in issue - diluted 57,395,706 56,491,486 56,601,685 Thebe Thebe Thebe Earnings per share - All operations: - Basic 0.110 0.127 (13.71) 103 - Diluted 0.106 0.122 (12.44) 100 Earnings per share - Continuing operations: - Basic 0.109 0.134 (18.47) 103 - Diluted 0.106 0.128 (17.26) 100 ABRIDGED CONSOLIDATED BALANCE SHEET Un-audited Un-audited Period Audited At 31 October 2008 At 31 October 2007 on period At 30 April 2008 Pula Pula change Pula Re-stated % ASSETS: Non-current assets: Equipment 2,767,287 4,452,198 3,821,393 Goodwill 89,584 100,952 96,027 Intangible assets 1,427,506 0 804,190 Investment in associate 2,712,265 2,786,067 2,712,265 Available for sale financial assets 5,633,300 8,850,669 8,714,677 Deferred tax asset 954,949 2,469,093 857,748 13,584,891 18,658,979 (27.19) 17,006,300 Current assets: Cash & equivalents 110,693,262 41,849,680 44,884,280 Listed trading securities 358,366 (311,222) 3,539,570 Trade and other receivable 25,917,895 70,838,380 188,382,152 Tax refundable 2,149,356 0 2,839,866 139,118,879 112,376,838 23.80 239,645,868 Total Assets 152,703,770 131,035,817 16.54 256,652,168 EQUITY AND LIABILITIES: Equity: Stated capital 44,900,012 36,731,207 37,111,325 Non distributable reserves 6,184,562 10,819,665 9,650,370 Distributable reserves 78,198,208 44,751,058 92,336,185 Total shareholders’equity 129,282,782 92,301,930 40.07 139,097,880 Minority interest 417,598 (667,214) 423,221 Total equity 129,700,380 91,634,716 41.54 139,521,101 Non-current liabilities: Interest bearing borrowings 0 367,038 15,739 Deferred taxation 7,525 0 7,525 Total non-current liabilities 7,525 367,038 (97.95) 23,264 Current liabilities: Trade and other payables 20,714,241 29,906,363 105,859,500 Provisions 1,621,102 7,589,379 1,719,114 Current portion - borrowings 9,149 0 10,020 Tax payable 591,184 482,365 407,866 Bank overdraft 60,189 1,055,956 9,111,303 Total current liabilities 22,995,865 39,034,063 (41.09) 117,107,803 Total liabilities 23,003,390 39,401,101 (41.62) 117,131,067 Total equity and liabilities 152,703,770 131,035,817 16.54 256,652,168 ABRIDGED CASH FLOW STATEMENT Un-audited Un-audited Audited Six months ended Six months ended Year ended 31 October 2008 31 October 2007 30 April 2008 Pula Pula Pula Re-stated Cash flows from operating activities 85,139,873 32,683,869 5,444,886 Cash flows from investing activities 2,192,905 9,543,100 10,966,300 Cash flows from financing activities (12,472,682) (10,088,298) (6,500,843) Movement in cash or cash equivalents 74,860,096 32,138,671 9,910,343 Cash and cash equivalents at beginning of the period 35,772,977 8,655,053 25,862,634 Cash and cash equivalents at end of the period 110,633,073 40,793,724 35,772,977 Cash and cash equivalents comprise: Cash and equivalents 110,693,262 41,849,680 44,884,280 Bank overdraft (60,189) (1,055,956) (9,111,303) 110,633,073 40,793,724 35,772,977 ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY As at 31 October 2008 Stated Non-distributable Distributable capital reserves reserves TOTAL Pula Pula Pula Pula Balance at beginning of the period 36,731,207 9,376,372 46,194,351 92,301,930 Re-statement of opening balances - BEE transaction (See note) - 1,443,293 (1,443,293) - Balance at beginning of the period- re-stated 36,731,207 10,819,665 44,751,058 92,301,930 Current period movement 8,168,805 (4,635,103) - 3,533,702 Profit for the period - - 53,691,909 53,691,909 Dividends paid - - (20,244,759) (20,244,759) Balance at end of the period 44,900,012 6,184,562 78,198,208 129,282,782 ACCOUNTING POLICIES The condensed un-audited interim financial statements of the group have been presented in accordance with IAS 34 - Interim Financial Reporting and comply with the requirements of the Botswana Stock Exchange. The Group’s accounting standards comply with International Financial Reporting Standards (“IFRS”) and have been applied consistently with the policies adopted in previous periods. RE-STATEMENT OF PRIOR PERIOD COMPARATIVES The comparatives for the period ended 31 October 2007 have been restated to take account of the Black Economic Empowerment ,(“BEE”) transaction in South Africa,details of which were fully disclosed in the 2008 Annual Report. This agreement was effective from 1 October 2007 and is deemed to be a share based payment transaction,accounted for in terms of IFRS 2.The effect of this adjustment on prior year reported earnings is a decrease of P1,44 million in profit before tax. COMMENTARY In the Announcement of Group Results for the year ended 30 April 2008,published in July 2008 and in the 2008 Annual Report circulated to shareholders in September 2008, the Board of Directors indicated that the 2008 -2009 financial year was likely to be more challenging than the previous year and barring any major upheaval in financial markets, Group results for the current year would be broadly in line with those of the previous financial year. Subsequent to these publications, financial markets globally have experienced an unprecedented crisis, characterized by extreme volatility, instability and dramatic falls in equity prices. The impact on African markets has been somewhat delayed relative to the more developed countries. As a financial services group, Imara has not been immune to the upheaval in world markets. Under these difficult circumstances Group earnings are inevitably under pressure.Recent events have necessitated a comprehensive review of both strategic objectives and earnings forecasts for the current year. At the strategic level, the Board believes that there is no need to deviate significantly from the stated objectives of expanding our regional footprint and diversifying the spread and quality of earnings. Current initiatives will continue albeit more cautiously, due to the recent world economic upheaval.Steps have been taken to protect the Group’s cash holdings by diversifying risk through a switch of bank backed assets to government guaranteed treasury bills. The impact of the world financial crisis on forecast earnings for the year is difficult to predict, more especially so as performance fees in the Asset Management Division have the potential to materially impact Group results,as was the case in 2008. Such fees can only be determined at the end of the financial year and will be dependent on the speed and extent of recovery in financial markets over the next six months. However, under current conditions it would be imprudent to anticipate any performance fee contribution in the current year from our flagship fund,the Imara Africa Opportunities Fund. The Imara Zimbabwe Fund remains something of a wild card and could generate meaningful performance fees if there is a timely resolution of the current political impasse. Financialresultsforthesixmonthsto31October2008reflecttosomeextent,thenegativeimpactoftheworldeconomic crisis, with profit after tax for the six months to 31 October 2008 some 6% below the prior period comparative. This direct comparison is however somewhat misleading in that the prior period profit after tax has been re-stated from P 7,93 million to P 6,49 million,to account for the BEE transaction in South Africa in October 2007.Had the prior period comparative not been re-stated, then profit after tax for the current six month period would have been 23% below the prior period. Results for the six month period to 31 October 2008 for the Stockbroking Division are ahead of budget, but both the Corporate Finance and Asset Management Divisions have been adversely affected by recent world events, and have reported earnings which are below budget.There is some scope for an improved performance in the Corporate Finance Division in the second half year but the forecasting of results for the Asset Management Division for the full year is more difficult for the reasons outlined above. OUTLOOK Stakeholders are reminded that there are a number of factors which contribute positively to the Group’s financial stability and ability to withstand the impact of the recent financial market upheaval. These include: - the Group’s strong balance sheet; - no Group borrowings; - our proprietary trading,in the normal course of business,remains small,contained,highly disciplined and with effective controls and checks and balances in place.More importantly,it is profitable and has been fully stress tested in these difficult times. - no exposure to sub-prime markets; - a diversified earnings base,having a wide geographic and product spread. The Group is still trading profitably and despite the reduced earnings forecast this is a creditable performance at this low stage of the market cycle and during the worst financial crisis for some 80 years.However,it should be noted that on the current trajectory,year on your comparisons for the second half could look less favourable DIVIDEND The Board of Directors, in line with current dividend policy, have recommended that no interim dividend be declared in respect of the six months ended 31 October 2008. For & on behalf of the Board of Directors: DE STONE Company Secretary Registered Offices: Transfer Secretaries: Union Provident Trust Corpserve Botswana Ground Floor,BIC House, First Floor,Block A,Unit 3,Plot 117 Main Mall Millennium Office Park,Kgale Hill, Gaborone Gaborone Directors: PJS Gray (Chairman),MJS Tunmer (Chief Executive Officer),AR Fleming,JR Legat, RH Macleod,ACH Mackeurtan,RR Matthews,SM Ndoro,DE Stone Company registration number: CO 2002 / 3377 Registered in the International Financial Services Centre:Tax certificate number 22 Listed on the Venture Capital Market board of the Botswana Stock Exchange -“Imara” ANNOUNCEMENT OF UN-AUDITED INTERIM GROUP RESULTS FOR THE SIX MONTHS ENDED 31 OCTOBER 2008 The Directors of Imara Holdings Limited have pleasure in announcing the un-audited consolidated financial results of the Group for the six months ended 31 October 2008.