Imara Holdings (Botswana) FY 2014 financial results

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Imara Holdings (Botswana) FY 2014 financial results

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Imara Holdings (Botswana) FY 2014 financial results

  1. 1. IMARA HOLDINGS LIMITED ANNOUNCEMENT OF AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 APRIL 2014 SALIENT FEATURES • The group has returned to profitability with PAT of P16,08 million for the year; • Attributable earnings for the year of P10 million; • Revenue up 35%; • All trading divisions were profitable; • Funds under management - increased by 25% to P5,3 billion; • The arbitration process involving NBS Bank, Malawi which has been on-going since October 2007, has finally been concluded in favour of Imara, with a costs award of P6,7 million; 2014 2013 2012 2011 2010 Revenue P 000's 197,539 145,919 122,483 95,538 92,809 Attributable earnings P 000's 10,005 (4,305) 5,635 (8,211) 247 Diluted earnings per share thebe 16.01 (7.34) 9.20 (14.12) 0.42 Dividend yield-ordinary dividend % 3.13 Passed 1.18 Passed Passed Shareholders' equity P 000's 140,465 129,209 137,731 133,021 140,817 Total assets P 000's 344,222 252,471 199,921 242,383 244,099 Return on equity % 7.12 (3.33) 4.09 (6.17) 0.18 ABRIDGED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended 30 April 2014 Pula 2013 Pula % Change Revenue 197,539,238 145,919,445 35% Other income 22,288,132 18,191,196 23% 219,827,370 164,110,641 34% Cost of services sold (21,935,132) (19,488,607) 13% Operating expenses (172,443,266) (140,547,968) 23% Finance costs (1,147,017) (396,768) 189% Income from associate 1,006,112 1,094,609 (8)% Impairment of investment in associates (232,600) (1,294,653) (82)% Profit before taxes 25,075,467 3,477,254 621% Taxation (8,994,040) (4,977,395) 81% Profit /(loss) for the year 16,081,427 (1,500,141) 1172% Other comprehensive loss (4,589,680) (3,409,055) 19% Total comprehensive income/(loss) for the year net of tax 11,491,747 (4,909,196) 345% Profit /(loss) for the year: Attributable to :Equity holders of the parent 10,005,339 (4,304,682) 332% :Non-controlling interest 6,076,088 2,804,541 16,081,427 (1,500,141) 1172% Total comprehensive income for the year: Attributable to :Equity holders of the parent 5,415,659 (7,713,737) :Non-controlling interest 6,846,753 3,545,930 12,262,412 (4,167,807) EARNINGS AND DIVIDEND PER SHARE: 2014 2013 Earnings per share - Basic thebe 16.92 (7.34) Earnings per share - Diluted thebe 16.01 (7.34) Ordinary dividend per share thebe 5.00 Passed ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION: As at 30 April ASSETS 2014 Pula 2013 Pula % change Non - current assets Equipment 5,255,221 6,098,309 Goodwill & intangible assets 13,016,352 13,048,391 Investment in associate 2,470,075 877,669 Available-for-sale-financial assets 10,608,807 21,180,571 Deferred tax asset 526,460 1,033,646 31,876,915 42,238,586 (25)% Current assets Listed trading securities 3,049,006 5,276,905 Trade and other receivables 224,742,840 134,346,123 Cash and cash equivalents 83,752,412 69,805,677 Tax refundable 801,275 804,055 312,345,533 210,232,760 49% TOTAL ASSETS 344,222,448 252,471,346 36% EQUITY AND LIABILITIES Equity Stated capital 50,931,011 50,931,011 Non-distributable reserves 8,799,160 12,069,282 Distributable reserves 79,242,797 66,208,347 Total shareholders equity 138,972,968 129,208,640 9% Non-controlling interest 13,964,932 8,550,953 Total equity 152,937,900 137,759,593 11% Non - current liabilities Shareholders’loans - 2,757,301 Retirement benefit obligation 1,197,019 535,205 Deferred taxation 2,299,291 2,421,586 3,496,310 5,714,092 (39)% Current liabilties Trade, other payables and provisions 186,362,189 105,102,465 Listed trading securities sold short 464,382 95,169 Interest bearing loans and borrowings - short term - 3,295,644 Tax payable 961,667 502,264 Bank overdraft - 2,119 187,788,238 108,997,661 72% Total liabilities 191,284,548 114,711,753 TOTAL EQUITY & LIABILITIES 344,222,448 252,471,346 36% ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS Year ended 30 April 2014 Pula 2013 Pula Profit from operating activiites 25,075,467 3,477,254 Adjustments to operating profit (6,499,473) (5,840,816) Operating cash flows before working capital changes 18,575,994 (2,363,562) Working capital changes (8,404,031) (5,963,096) Cash (utilised) generated from operations 10,171,963 8,326,658 Income tax paid (8,581,309) (4,074,483) Net interest received 5,094,573 3,144,460 Net cash flows from operating activities 6,685,227 (9,256,681) Cash flows from investing activities 11,740,823 (3,805,504) Cash flows from financing activities (6,127,335) (2,813,021) Net (decrease)/ in cash and cash equivalents 12,298,715 (15,875,206) Cash and cash equivalents at the beginning of the year 69,803,558 84,491,592 Exchange rate differences on cash and cash equivalents 1,650,139 1,187,172 Cash and cash equivalents at the end of year 83,752,412 69,803,558 Comprising: Cash & cash equivalents 83,752,412 69,805,677 Bank overdraft - (2,119) 83,752,412 69,803,558 ABRIDGED STATEMENT OF CHANGES IN EQUITY For the year ended 30 April Stated capital Pula Non- distributable reserves Pula Distributable reserves Pula Non- controlling interest Pula TOTAL Pula Balance at 1 May 2012 50,914,889 14,706,691 72,109,221 5,790,172 143,520,973 Issuance of shares 16,122 - - - 16,122 Other comprehensive income - (3,409,055) - 741,389 (2,667,666) Share based payment expense - 854,156 - - 854,156 Associate non-distributable reserves prior to becoming a subsidiary - 95,507 - (95,507) - Associate reserves prior to becoming a subsidiary - - - 1,236,381 1,236,381 Acquisition of non-controlling interest in subsidiary - - - (1,926,023) (1,926,023) Transfer of NDR to retained earnings on realisation of assets - (178,017) 178,017 - - Profit /(Loss) for the year - (4,304,682) 2,804,541 (1,500,141) Dividends paid - - (1,774,209) - (1,774,209) Balance at 30 April 2013 50,931,011 12,069,282 66,208,347 8,550,953 137,759,593 Balance at 1 May 2013 50,931,011 12,069,282 66,208,347 8,550,953 137,759,593 Issuance of shares - preference shares - - - - 1,491,545 Issuance of shares - ordinary shares - - - 1,379,707 1,379,707 Other comprehensive income - (4,361,388) (228,292) 770,665 (3,819,015) Share based payment expense - 1,024,222 - - 1,024,222 Amalgamation reserve - - 680,890 - 680,890 Common control - 89,960 - 86,433 176,393 Transfer of BEE dividend to retained earnings - - 3,178,966 - 3,178,966 Acquisition of non-controlling interest in subsidiary - - (651,893) 497,645 (154,248) Transfer of NDR to retained earnings on realisation of assets - (22,916) 49,440 (26,524) - Profit /(Loss) for the year - - 10,005,339 6,076,088 16,081,427 Dividends paid to non-controlling interest - - - (4,861,580) (4,861,580) Balance at 30 April 2014 50,931,011 8,799,160 79,242,797 13,964,932 152,937,900 ABRIDGED SEGMENTAL REPORT For the year ended 30 April 2014 Asset Management Pula Corporate Finance Pula Stockbroking Pula Trust Administration Pula Other Pula Adjustments Pula TOTAL Pula Revenue 64,707,420 12,602,903 104,808,783 18,209,598 197,071 (2,986,537) 197,539,238 Other material items - Interest receivable 961,000 78,101 5,039,809 - 162,681 - 6,241,590 - Interest payable - - 1,147,017 - - - 1,147,017 -Depreciation & amortisation 241,943 459,721 1,060,175 225,510 321,300 - 2,308,649 - Capital expenditure 235,955 85,307 720,414 86,527 297,962 - 1,426,166 Income Statement Segment profit / (loss) before tax 19,596,829 4,511,518 15,493,688 6,154,010 (21,454,090) - 24,301,954 Share of income / (losses) from associate (101,132) - 1,107,244 - - - 1,006,112 Impairment losses (73,109) - (159,491) - - - (232,600) Profit / (loss) before tax 19,422,588 4,511,518 16,441,442 6,154,010 (21,454,090) - 25,075,467 Taxation (2,616,982) (1,098,478) (2,953,274) (1,035,291) (1,290,015) - (8,994,040) Profit / (loss) after tax 16,805,606 3,413,039 13,488,168 5,118,719 (22,744,105) - 16,081,427 Segmental total assets 31,190,736 17,037,419 241,527,199 24,278,840 30,188,254 - 344,222,448 Segmental total liabilities (11,170,807) (495,841) (164,120,878) (7,200,772) (8,296,240) - (191,284,538) Net segmental assets / liabilities 20,019,929 16,541,578 77,406,321 17,078,068 21,892,014 - 152,937,910 Asset Management Pula Corporate Finance Pula Stockbroking Pula Trust Administration Pula Other Pula Adjustments Pula TOTAL Pula Revenue 53,110,890 8,541,892 78,993,570 8,769,386 10,203,622 (13,699,915) 145,919,445 Other material items - - Interest receivable 557,802 36,652 2,579,829 - 366,945 - 3,541,228 - Interest payable - - 395,103 - 1,665 - 396,768 -Depreciation & amortisation 502,890 196,336 1,029,126 139,076 294,658 - 2,162,086 - Capital expenditure 436,887 73,405 728,752 127,882 912,318 - 2,279,244 Income Statement Segment profit / (loss) before tax 18,678,479 (5,918,176) 9,954,727 3,420,367 (22,458,099) - 3,677,298 Share of income / (losses) from associate - - 428,398 - 666,211 - 1,094,609 Impairment losses - - (1,217,474) - (77,179) - (1,294,653) Profit / (loss) before tax 18,678,479 (5,918,176) 9,165,651 3,420,367 (21,869,062) - 3,477,255 Taxation (1,569,087) 51,070 (1,606,228) (330,458) (1,522,692) - (4,977,394) Profit / (loss) after tax 17,109,392 (5,867,106) 7,559,423 3,089,909 (23,391,759) - (1,500,141) Segmental total assets 36,869,106 7,582,705 161,218,427 22,688,790 24,112,318 - 252,471,346 Segmental total liabilities (12,094,176) (1,965,960) (87,747,343) (6,299,304) (6,604,970) - (114,711,753) Net segmental assets / liabilities 24,774,930 5,616,745 73,471,084 16,389,486 17,507,348 - 137,759,593 The Directors of Imara Holdings Limited have pleasure in announcing the audited financial results of the Group for the twelve months ended 30 April 2014. FIVE YEAR FINANCIAL HIGHLIGHTS INDEPENDENT AUDITORS The independent auditors to the Imara Holdings Limited Group are Messrs Ernst & Young- Botswana. Their audit opinion on the Financial Statements of the group and the company are available on request at the registered offices of the company. 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 a historical cost basis except for certain financial instruments that are carried at fair value. COMMENTARY & OUTLOOK Overview Imara Holdings Limited has delivered a much improved performance for the year ended 30 April 2014 with profit after tax of P16.08 million and attributable earnings of P10 million. This represents the best financial performance by the group since 2008, when it had its record year, on the back of an exceptional performance by the asset management division. This year’s profit is a marked improvement on the P1.50 million loss for the prior year. This result is particularly pleasing given that the group’s operating business environment, in most instances, has not significantly changed and has remained sluggish. African capital markets remain highly influenced by global economic adversity and uncertainty, although there are some recent indicators to suggest perhaps a slight recovery. However, this aside, some redemption of emerging and frontier markets asset classes is apparent, driven more by onerous regulatory and compliance issues, which are afflicting First World markets, than the need for cash per se. Against this macro-economic backdrop, the group`s performance is commendable. Total assets which amount to P344.22 million, reflect a 36% increase over the prior year. This increase is largely attributable to stockbroking activities and more specifically to the cut off dates for accounting and reporting purposes, which impact directly on“due to” and“due from”brokerage positions. This is illustrated by the increase in trade and other receivables which have increased from P134.35 million to P224.74 million, and in trade and other payables which have increased from P105.10 million to P186.36 million. Cash flows for the year were positive by P12.29 million which is encouraging following the negative trend of recent years. The group closed the year with cash and cash equivalents of P83.75 million and with no borrowings. Divisional Performances It is pleasing to report that all divisions were profitable for the year. The asset management division remains the star performer for the group and achieved PAT of P16.81 million, although this was marginally below the prior year`s performance. The division also registered growth in new markets in Zambia and Mauritius and FUM increased by almost 25% to close the year at P5.3 billion. The Stockbroking division delivered PAT of P13.49 million vs P7.56 million in the prior year, with improved performances by our stockbrokers across the region. Imara Edwards Securities in Zimbabwe reported excellent results despite a challenging Zimbabwean market and the Botswana stockbroker Imara Capital Securities returned to profitability after a disappointing 2013. The Africa Desk of Imara SP Reid, contributed strongly to earnings, and leveraging of its infrastructure and technology investment over the past two years, is well positioned to make a greater contribution to future earnings. The Mauritius based trust division contributed PAT of P5.12 million up from P3.09 million in 2013. An amalgamation exercise to merge the two principle trust subsidiaries into a single entity was completed and implemented during the year. The cost savings which will result from this exercise have not been fully reflected in the 2014 earnings as implementation was only finalised in April 2014. The corporate finance division, which in recent years has reported losses, contributed PAT of P3.41 million vs a loss of P5.86 million in 2013. A significant factor relating to the current year performance was the successful conclusion of the NBS Malawi arbitration, which has been in process since October 2007. The Arbitration Tribunal have ruled in Imara’s favour together with an award of costs of P6.70 million. Lead times for mandate execution have improved and pipe line business remains strong. The Imara Mondise joint venture in South Africa, after a sluggish start, is starting to gather some traction. It is also pleasing to report that partial implementation of the group restructuring exercise, was possible during the year, and resulted in the de-registration of four subsidiary companies. For regulatory reasons, the re-organisation exercise has become an extremely protracted matter. Further company de-registrations are planned during the next financial year as the group continues to rationalise its structure in order to effect cost savings. Risk and Compliance In line with international best practice, the group continues to strengthen its risk management and compliance functions. The implementation of the enterprise wide risk management and reporting system is on track and in line with the original project plan. The compliance function is also being expanded and strengthened and is being complemented by an investment in technology and staff training. Dividend The group`s dividend policy is for dividends to be three times covered. In line with this policy, the Board has resolved to pay a dividend of 5 thebe per share in respect of the year ended 30 April 2014. Details relating to the dividend are outlined later in this announcement. Outlook and Strategy Opportunities for investment in African capital markets remain relatively cheap in world terms, despite the fact that African markets are not as strong and robust as in prior years. Across the African continent we continue to observe, improving corporate earnings, reasonable dividend yields, and fund flows from the pension fund industry, facilitated by deregulation, and a general increase in formal wage levels. Interest rates remain stable, at reduced rates, due to macro-economic factors and generally improved fiscal discipline at government level. Against this background, Imara is well positioned to continue to seek opportunities that provide better returns to stakeholders, and the Board’s emphasis continues to be on the sustainability of earnings. The group remains committed to investing in Africa! TRADING STATEMENT A trading statement, advising shareholders of the improved financial results for the group, for the year ended 30 April 2014, was published on 7 July 2014. DIRECTORATE There have been no changes to the directorate of the company during the current financial year. DIVIDEND Notice is hereby given that the Board has declared a dividend of 5 thebe per share in respect of the year ended 30th April 2014, payable in cash to all shareholders registered in the books of the company as at 5th September 2014. In terms of the Botswana Income Tax Act (Chapter 50:01) as amended, withholding tax, unless varied by a Double Taxation Agreement or any other enacted tax legislation, will be deducted where applicable from the gross dividend payable to shareholders. SHAREHOLDERS’DIARY Important dates pertaining to the dividend are: Declaration date: 23rd July 2014 Announcement of group results & dividend declaration 31st July 2014 Last date to register 5th September 2014 Cheques & dividend warrants mailed 22nd September 2014 For and on behalf of the Board of Directors: SM Ndoro MJS Tunmer Chairman Chief Executive Officer Transfer Secretaries: Corpserve Botswana Unit 206, Second Floor, Plot 64516 Showgrounds Close, Fairgrounds, Gaborone Telephone 393 2244: email: contactus@corpservebotswana.com Directors: SM Ndoro (Chairman), MJS Tunmer (Chief Executive Officer), AR Fleming, GE Johns, JR Legat, ACH Mackeurtan, TJ Matsau, RH Macleod, DE Stone, GZ Steffens For the year ended 30 April 2013 117%

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