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Imara Holdings (Botswana) FY 2011 financial results

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Imara Holdings (Botswana) FY 2010 financial results

Imara Holdings (Botswana) FY 2010 financial results

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  • 1. IMARA HOLDINGS LIMITED ANNOUNCEMENT OF AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 APRIL 2011 2011 2010 2009 2008 2007 Revenue P 000's 95,538 92 809 101,516 179,084 127,550 Attributable earnings P 000's (8,211) 247 5,770 56,449 48,143 Diluted earnings per share thebe (14.12) 0,42 9,9 100 90 Dividend yield-ordinary dividend % Passed Passed 0.67 2.26 5.6 Shareholders' equity P 000's 133,021 140,817 132,168 139,098 91,713 Total assets P 000's 242,383 244,099 208,464 257,229 172,683 Return on equity % (6.17) 0.18 4 41 52 ABRIDGED STATEMENT OF CHANGES IN EQUITY: For the year ended 30 April Non- Non- Stated distributable Distributable controlling capital reserves reserves interest TOTAL Pula Pula Pula Pula Pula Balance at 1 May 2009 44,909,348 10,312,300 76,946,281 327,132 132,495,061 Acquistion of subsidiary 1,422,789 1,422,789 Issuance of ordinary shares 3,623,633 3,623,633 Other comprehensive income 5,934,462 5,934,462 Share based payment expense 1,545,094 1,545,094 Share based payment expense - BEE transaction 140,038 140,038 Profit for the year 246,765 253,964 500,729 Dividends paid to BEE partners (1,131,140) (1,131,140) Dividends paid (1,709,347) (1,709,347) Balance at 30 April 2010 48,532,981 17,931,894 74,352,559 2,003,885 142,821,319 Balance at 1 May 2010 48,532,981 17,931,894 74,352,559 2,003,885 142,821,319 Issuance of shares- minority of subsidiary 950,096 950,096 Other comprehensive income (405,835) (405,835) Share based payment expense 1,792,554 1,792,554 Share based payment expense - BEE transaction - (Loss) / Profit for the year (8,210,788) 518,227 (7,692,561) Dividends paid-BEE partners (972,738) (972,738) Dividends paid-minorities of subsidiary (1,012,792) (1,012,792) Balance at 30 April 2011 48,532,981 19,318,613 65,169,033 2,459,416 135,480,043 ABRIDGED SEGMENTAL REPORT: For the year ended 30 April 2011 Asset Corporate Management Finance Stockbroking Head Office Adjustments TOTAL Pula Pula Pula Pula Pula Pula Revenue 34,107,633 2,508,445 59,030,824 4,901,300 (5,009,907) 95,538,295 Other material items: - Interest income 106,123 65,211 3,979,601 519,700 4,670,635 - Finance charges 284 193,818 96 194,198 - Depreciation & amortisation 136,756 192,154 654,593 508,258 1,491,761 - Capital expenditure 78,399 579,822 407,650 1,065,871 Income Statement: Segment profit / (loss) before tax 11,350,941 (5,595,894) 6,838,542 (19,019,268) (6,425,679) Share of income / (losses) from associate (814,770) 1,459,505 644,735 Impairment losses (122,765) (301,692) (424,457) Profit / (loss) before tax 11,350,941 (5,595,894) 5,901,007 (17,861,455) - (6,205,401) Taxation (214,889) (549,780) (2,502,533) 1,780,042 (1,487,160) Profit / (loss) after tax 11,136,052 (6,145,674) 3,398,474 (16,081,413) - (7,692,561) Segmental total assets 14,480,776 442,218 170,373,970 57,060,978 242,357,942 Segmental total liabilities (7,185,999) (77,091) (95,713,536) (3,901,273) (106,877,899) Net segmental assets / liabilities 7,294,777 365,127 74,660,434 53,159,705 - 135,480,043 For the year ended 30 April 2010 Asset Corporate Management Finance Stockbroking Head Office Adjustments TOTAL Pula Pula Pula Pula Pula Pula Revenue 27,049,703 2,058,369 63,086,343 614,492 92,808,907 Other material items: - Interest income 55,327 188,583 6,374,247 466,677 7,084,834 - Finance charges 232 127,925 34,235 162,392 - Depreciation & amortisation 103,484 259,032 861,644 438,326 1,662,486 - Capital expenditure 75,089 724,162 296,954 1,096,205 Income Statement: Segment profit / (loss) before tax 12,000,938 (6,088,631) 11,636,960 (16,726,107) 823,160 Share of income / (losses) from associate (553,160) 2,474,614 1,921,454 Impairment losses 234,299 (815,715) (581,416) Profit / (loss) before tax 12,000,938 (6,088,631) 11,318,099 (15,067,208) - 2,163,198 Taxation (319,235) 191,045 (2,787,263) 1,252,984 (1,662,469) Profit / (loss) after tax 11,681,703 (5,897,586) 8,530,836 (13,814,224) - 500,729 Segmental total assets 17,899,315 698,318 166,727,431 58,774,177 244,099,241 Segmental total liabilities (5,711,552) 3,161,452 (88,907,499) (9,820,323) (101,277,922) Net segmental assets / liabilities 12,187,763 3,859,770 77,819,932 48,953,854 - 142,821,319 The Directors of Imara Holdings Limited have pleasure in announcing the audited financial results of the Group for the twelve months ended 30 April 2011. ABRIDGED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME: Year ended 30 April 2011 2010 % Pula Pula Change Revenue 95,538,295 92,808,907 3% Other income 7,070,793 5,032,298 41% 102,609,088 97,841,205 5% Cost of services sold (18,830,913) (14,589,090) 29% Operating expenses (90,009,656) (82,266,563) 9% Finance costs (194,198) (162,392) Income from associate 644,735 1,921,454 (66%) Impairment of investment in associates (424,457) (581,416) (27%) (Loss) / profit before taxes (6,205,401) 2,163,198 (387%) Taxation (1,487,160) (1,662,469) (11%) (Loss) / profit for the year (7,692,561) 500,729 (1,636%) Other comprehensive income (405,835) 5,934,462 (107%) Total comprehensive (loss)/income for the year net of tax (8,098,396) 6,435,191 (226%) (Loss) / profit for the year: Attributable to: Equity holders of the parent (8,210,788) 246,765 (3,427%) Non - controlling interest 518,227 253,964 (7,692,561) 500,729 (1,636%) Total comprehensive (loss)/income for the year: Attributable to: Equity holders of the parent (8,616,623) 6,181,227 Non - controlling interest 518,227 253,964 (8,098,396) 6,435,191 EARNINGS AND DIVIDEND PER SHARE: 2011 2010 Earnings per share - Basic thebe (14,12) 0,43 Earnings per share - Diluted thebe (14,12) 0,42 Ordinary dividend per share Passed Passed *Due to the attributable loss reported in the current year the potential future ordinary shares are non dilutive therefore diluted earnings per share is the same as the basic earnings per share ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION: As at 30 April 2011 2010 % Pula Pula change ASSETS Non-currrent assets Equipment 3,263,563 3,612,333 Goodwill & intangible assets 775,134 966,324 Investment in associate 13,347,094 12,188,060 Available-for-sale-financial assets 7,507,585 8,475,145 Deferred taxation 3,284,134 3,251,286 28,177,510 28,493,148 (1%) Current assets Listed trading securities 6,120,458 9,231,792 Trade and other receivables 109,400,113 82,312,674 Cash and cash equivalents 98,212,462 123,400,183 Tax refundable 472,736 661,444 214,205,769 215,606,093 (1%) TOTAL ASSETS 242,383,279 244,099,241 (1%) EQUITY AND LIABILITIES Equity Stated capital 48,532,981 48,532,981 Non-distributable reserves 19,318,613 17,931,894 Distributable reserves 65,169,033 74,352,559 Total shareholders equity 133,020,627 140,817,434 (6%) Non-controlling interest 2,459,416 2,003,885 Total equity 135,480,043 142,821,319 (5%) Non-current liabilities Deferred taxation 1,492,683 1,577,366 1,492,683 1,577,366 (5%) Current liabilties Trade, other payables and provisions 101,482,634 90,973,592 Listed trading securities sold short 580,443 6,537,578 Interest bearing loans and borrowings-short term 3,208,528 2,173,893 Tax payable 113,611 15,493 Bank overdraft 25,337 - 105,410,553 99,700,556 6% Total liabilities 106,903,236 101,277,922 TOTAL EQUITY & LIABILTIES 242,383,279 244,099,241 (1%) SALIENT FEATURES: Revenue increased by 3% and operating expenses by 9%; Attributable losses for the year total P 8,2 million; No "special item" profit adjustments in respect of the current year; Adjusted earnings have declined by P 7 million year on year; Associates contributed a net P 220 278 to profit for the year. Prior year P 1,34 million; Net exchange rate losses for the year P 3,10 million; Funds under management increased by 10%; Year on year decrease in cash and cash equivalents of P 22,49 million to P 98,19 million; No borrowings / gearing -(short term interest bearing loans and borrowings relate to dividends withheld in terms of BEE transaction;) Financial years ended 30 April Operating (loss) / profit after adjusting for "special items": 2011 2010 2009 2008 2007 Attributable earnings P 000's (8,211) 247 5,770 56,449 48,143 Special items P 000's - (1,480) - (55,199) (18,636) Operating (loss)/profit after adjusting for "special items" P 000's (8,211) (1,233) 5,770 1,250 29,507 FIVE YEAR FINANCIAL HIGHLIGHTS BASIS OF PREPARATION OF FINANCIAL STATEMENTS The consolidated financial statements of the Group have been prepared on a going concern basis in accordance with International Financial Reporting Standards, (IFRS), which comprise standards approved by the International Accounting Standards Boards, ("IASB"), and interpretations approved by the International Financial Reporting Interpretations Committee, ("IFRIC"), and the applicable requirements of the Botswana Companies Act , 2003. The financial statements have been prepared on an historical cost basis except for certain financial instruments that are carried at fair value. COMMENTARY & OUTLOOK The financial year ending April 2011 was very disappointing. Having budgeted for positive growth in earnings, the year ended with an after tax loss of P7.69 million. On an adjusted basis, the Group made an after tax operating loss of P2.1 million, whilst a reduction in net earnings from our associates, together with such non-cash items as foreign exchange losses, (primarily on off shore cash holdings), and share option valuation provisions, added to the net loss. Total income increased 5% on a year on year basis, operating expenses increased by 9% and the tax charge declined by 11%. Shareholders’ equity declined by 6% to P133 million while total assets at P242 million remained relatively static. In terms of the core divisions of the company, asset management had another strong year growing funds under management by 10% to produce after tax profits of P11.1 million. Stockbroking ended the year with profits after tax of P3.4 million, down on previous years, and indicative of a fall in volumes traded in South Africa and in the major African stock exchanges as compared to the past two years. Corporate advisory recorded losses of P6.1 million, which was disappointing compared with the profits that we had budgeted for in the financial year. This does not reflect a lack of work or mandates, but rather the slow completion of the mandates themselves, often for reasons beyond our immediate control. In line with current industry practice, most of the fees in this division are now success driven and as such the determination of completion dates for mandates and the related revenue flows are difficult to predict, as has been the case in the year under review. Turning to the statement of cash flows, there was a net outflow of cash of P22.5 million during the course of the year. However, this does not reflect the‘true’position of the Group as the reported numbers are distorted by the working capital requirements of our South African stockbroker, Imara SP Reid that change on a daily basis in line with their clients’ trading volumes and which had a beneficial impact on cash flow the previous year. Aside from the operating losses, the major cash outflows relate to investing activities, (primarily acquisitions), tax payments and exchange losses on cash holdings denominated in Sterling or USD.The Group’s“free”cash position remains strong with no debt. Shareholders are reminded that the short term borrowings reflected in the Statement of Financial Position relate to dividends declared in favour of our South Africa empowerment partners that are being withheld pending settlement of their obligations in terms of the BEE transaction. It is important to summarize the lessons learnt during the year, firstly, markets have and are recovering across the region as evident by significant growth in funds under management and the asset management division`s performance. However, despite the upward trend in capital markets on the continent, volatility has constrained turnover as investors remain cautious. Secondly, the corporate advisory paradigm has shifted significantly and despite a strong pipeline, our ability to close mandates has been limited as deals take longer to execute. At the Group level, an exercise to re-structure the operations of the Group, including the closure of certain loss making entities, is well advanced and should be implemented during the first half of the current financial year. This will reduce the number of operating companies across the Group with a resultant saving in operating expenses. OUTLOOK Board and management focus is to return to sustainable profits by capturing growth from existing businesses. Greater attention will be placed on “return on invested capital” to ensure that shareholder returns are maximized and as such non-performing businesses will be critically reviewed for strategic fit and sustainable profitability. We anticipate further growth in the asset management division with a number of exciting new partnerships in the pipeline that we believe will increase our profile. We further hope that continued good performance in our funds will attract new inflows, enhancing annuity income and enabling the division to earn additional performance fees during the year. Within stockbroking we are looking to grow our trading volumes in African markets by utilizing the infrastructure that is in place at Imara SP Reid. In line with this we have relocated the Africa Desk to Imara SP Reid and invested significant resources into the research function to better service the institutional market both in South Africa and Africa.The corporate finance division has a number of exciting new mandates on its books, whilst certain of the existing mandates near completion, allowing us to earn fees for work that has largely been undertaken during the previous financial year. Further, management in this division has worked hard to reduce costs through rationalization and efficiencies allowing a significant drop in the break-even level of the company. Despite the below expected performance of our associate companies in 2011, we remain positive about their future prospects and will be looking to make further investments into our regional “footprint” in the year ahead. We will also shortly be launching a new private equity initiative which will add to the group’s service offering. DIRECTORATE Mr Gunter Steffens OBE and Mr Joe Matsau, a BEE partner in South Africa, were invited to join the Board in December 2010. Both appointments are still subject to formal approval by Non Bank Financial Institutions Regulatory Authority, (“NBFIRA”), and the applications are pending. We regret to advise that Mr L Maine resigned as a non-executive director on 20th April, 2011 due to personal reasons. DIVIDEND The dividend for the year has been passed. For & on behalf of the Board of Directors SM Ndoro MJS Tunmer Chairman Chief Executive Officer Transfer Secretaries: Corpserve Botswana First Floor, Block A, Unit 3, Plot 117 Millennium Office Park, GABORONE Telephone 393 2244: email: corpserve@info.bw Directors: SM Ndoro (Chairman), MJS Tunmer (Chief Executive Officer), AR Fleming, GE Johns, JR Legat, ACH Mackeurtan, J Matsau*, RH Macleod, DE Stone, G Steffens * * subject to approval by NBFIRA ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS Year ended 30 April 2011 2010 Pula Pula (Loss)/profit from operating activities (6,205,401) 2,163,198 Adjustments to operating profit 419,120 (1,278,631) Operating cash flows before working capital changes (5,786,281) 884,567 Working capital changes (18,954,166) 25,264,420 Cash (utilised)/generated from operations (24,740,447) 26,148,987 Income tax paid (1,317,869) (3,992,173) Net interest income 4,476,437 6,922,442 Net cash flows from operating activities (21,581,879) 29,079,256 Cash flows from investing activities (841,206) (3,468,943) Cash flows from financing activities (62,695) 53,147 Net (decrease)/increase in cash and cash equivalents (22,485,780) 25,663,460 Cash and cash equivalents at the beginning of the year 123,400,183 101,512,634 Exchange rate differences on cash and cash equivalents (2,727,278) (3,775,911) Cash & cash equivalents at end of year 98,187,125 123,400,183 Comprising: Cash & cash equivalents 98,212,462 123,400,183 Bank overdraft (25,337) - 98,187,125 123,400,183