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BJM
BJM
BJM - Barnard Jacobs Mellet Holdings - Unaudited Interim Results For The Six
Months Ended 30 September 2007 And Dividend Declaration
BARNARD JACOBS MELLET HOLDINGS LIMITED
Reg no: 1995/004798/06
Incorporated in the Republic of South Africa
ISIN: ZAE000014262 & Share Code: BJM
("the Group" or "BJM")
- Revenue up 25%
- Headline earnings per share up 30%
- Ordinary dividends per share 14c
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
COMMENTARY
Operations
The domestic equity market proved resilient against tightening monetary
policy and risk aversion following the sub-prime market collapse during the
period under review. This provided a platform to grow revenues 25% year-on-
year, despite continued pressure on institutional brokerage commission rates.
Headline earnings, which include STC charges increased by 30% to R27,2
million while normalised earnings, being earnings adjusted for the impact of
non-recurring items and STC, decreased by 10% to R28,4 million. This 10%
decrease resulted mainly from costs associated with creating additional
capacity, and secondly, normal inflationary pressures. Net asset value rose
from 406 cents per share to 410 cents per share.
Costs were primarily driven by variable costs of trade and settlement as well
as growth in our staff complement. Like for like staff costs trended in line
with industry. Management is confident that the increase in headcount will be
earnings enhancing.
Continued growth in assets under administration in BJM Private Client
Services ("BJM PCS") from R28 billion at year-end to R33 billion bears
testimony to the success achieved in this area of the business. BJM PCS
remains the fastest growing unit in the Group and it is of strategic
importance.
Gross equity brokerage rose by 21% to R168 million, notwithstanding
significant continued pressure on brokerage commission rates during the year.
The fixed income market remained subdued but the Group`s activity in this
area remained profitable with a quality product provided to both
institutional and retail clients. All of the Group`s business units were
profitable during the period under review.
The acquisition of Quaestor Capital (Pty) Ltd, a corporate finance boutique,
is meeting expectations set at the time of the transaction, with growth in
both sponsor and corporate advisory work.
The R7,65 million claim lodged by Computershare South Africa (Pty) Limited
against Finsettle Services (Pty) Ltd, a wholly-owned subsidiary of BJM, and
referred to in previous reports is still to be heard in court.
Our contention that the claim is unfounded remains intact and no provision
has been raised in the financial accounts.
Prospects
It is envisaged that both basic and headline earnings will be driven
primarily by market conditions and market share. Management is cognisant of
the corrosion in margin, and is implementing initiatives aimed at addressing
it. Management expects the growth in corporate finance and the retail
business to continue.
Dividend
Notice is hereby given that the Board has declared an interim ordinary
dividend of 14 cents per share in respect of the period ended 30 September
2007.
Dividend pay date Monday, 10 December 2007
Last day to trade in Friday, 30 November 2007
Ex-dividend date Monday, 3 December 2007
Record date Friday, 7 December 2007
Share certificates may not be dematerialised or rematerialised between
Monday, 3 December 2007 and Friday, 7 December 2007, both days inclusive.
Basis of preparation
The accounting policies and methods of computation used in the preparation of
these interim results comply with the recognition and measurement basis of
the full IFRS and the presentation and disclosure requirements of IAS 34 and
are consistent in all material respects with those adopted for the year ended
31 March 2007. The impact of IFRS 7 will be fully disclosed in the year-end
annual financial statements.
The September 2007 interim financial statements have not been audited or
reviewed by the company`s auditors KPMG Inc.
Directorate
It was with shock and sadness that the Group lost one of its founding
members, Kevin Jacobs, during the period following
22 years of diligent service to the Group. The Board and the Group express
their sincerest condolences to Kevin`s family and friends during this
difficult time.
John Bester Andile Mazwai
Chairman Chief Executive Officer
Johannesburg 14 November 2007
Directors
JA Bester (Chairman), HSC Bester, AM Mazwai* (CEO), AR Martin,
SM Mellet, MS Rebe*, TS Seopa
*Executive
Registered office
Barnard Jacobs Mellet House
5 Sturdee Avenue, Rosebank, 2196
Transfer secretaries
Link Market Services (Pty) Ltd
1 Diagonal Street,
Johannesburg,
2001
CONSOLIDATED INCOME STATEMENT
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2007 2006 2007
Unaudited Unaudited Audited
R`000 R`000 R`000
Operating income 216 756 173 334 371 421
Interest income 21 904 16 847 35 976
Revenue 238 660 190 181 407 397
Profit on sale of investments - 67 134 71 938
Total income 238 660 257 315 479 335
Operating costs (193 625) (144 251) (318 281)
Operating profit before 45 035 113 064 161 054
finance costs
Finance costs (3 853) (544) (1 267)
Income from investments 8 - 33
Profit before tax 41 190 112 520 159 820
Income tax expense (13 986) (34 143) (46 864)
Profit for the period 27 204 78 377 112 956
Basic earnings per share 32,9 94,2 136,1
(cents)
Diluted earnings per share 27,8 80,2 118,1
(cents)
CONSOLIDATED BALANCE SHEET
As at As at As at
30 September 30 September 31 March
2007 2006 2007
Unaudited Unaudited Audited
R`000 R`000 R`000
Assets
Non-current assets
Equipment 5 877 4 532 5 955
Investments 4 462 8 664 4 081
Intangible assets 11 911 3 692 12 678
Deferred tax assets 21 258 20 417 10 664
43 508 37 305 33 378
Current assets
Amounts receivable in respect of
stockbroking activities 5 059 601 3 776 193 5 526 066
Margin on derivative financial 19 101 20 740 31 080
instruments
Trade and other receivables 48 498 53 059 60 111
Listed securities holdings 781 774 196 405 548 695
Unlisted promissory notes - 15 425 5 353
Cash and cash equivalents 262 239 395 994 189 488
6 171 213 4 457 816 6 360 793
Total assets 6 214 721 4 495 121 6 394 171
Equity and liabilities
Equity
Share capital 784 827 833
Share premium 61 089 97 951 87 856
Non-distributable reserves 39 802 49 150 38 642
Retained earnings 219 753 187 561 205 008
321 428 335 489 332 339
Non-current liabilities
Loans, borrowings and deferred 53 316 - 3 239
payments
Deferred tax liabilities 1 017 1 058 2 710
54 333 1 058 5 949
Current liabilities
Amounts payable in respect of
stockbroking activities 5 072 274 3 720 663 5 391 083
Listed securities sold short 603 760 310 670 554 478
Trade and other payables 101 042 90 352 88 011
Income tax payable 16 944 22 419 7 223
Shareholders for dividends 187 179 194
Bank overdraft 44 753 14 291 14 894
5 838 960 4 158 574 6 055 883
Total equity and liabilities 6 214 721 4 495 121 6 394 171
RESULTS PER SHARE
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2007 2006 2007
Unaudited Unaudited Audited
Weighted average number of
ordinary
shares in issue (`000) 82 576 83 230 82 982
Headline earnings per share 32,9 25,2 61,8
(cents)
Diluted headline earnings per 27,8 21,5 53,7
share (cents)
Dividend per share (cents)
- Ordinary 15,0 38,5 52,0
- Special - 52,1 57,1
Net asset value per share (cents) 410 406 399
Reconciliation of headline R`000 R`000 R`000
earnings
Earnings attributable to ordinary 27 204 78 377 112 956
shareholders
Loss on disposal of equipment - 9 8
Liquidation distribution received - - (139)
Profit on sale of investments - (57 400) (61 507)
Headline earnings 27 204 20 986 51 318
Diluted earnings and headline
earnings per share are calculated
inclusive of the shares in the
Share Incentive Trust and the BEE
transaction
GROUP STATEMENT OF CHANGES IN EQUITY
Non-
Share Share distributable
capital premium reserves
R`000 R`000 R`000
Balance at 1 April 2006 833 96 382 41 637
Exchange differences on
translating foreign operations - - 26 461
Equity settled share-based
payments to employees - - 4 652
IFRS 2 recognition of BEE
Credential - - 606
Fair-value adjustment on
available for sale instruments - - 23 800
Profit realised with sale of
available for sale instruments - - (58 514)
Purchase of treasury stock (35) (18 916) -
Sale of treasury stock 35 10 390 -
Profit for the year - - -
Dividends paid - - -
Balance at 1 April 2007 833 87 856 38 642
Exchange differences on
translating foreign operations - - (5 673)
Equity settled share-based
payments to employees - - 9 352
IFRS 2 recognition of BEE
Credential - - 303
Additional settlement on BEE
Transaction - - 122
Fair-value adjustment on
available for sale instruments - - (2 944)
Purchase of treasury stock (49) (26 855) -
Sale of treasury stock - 88 -
Profit for the period - - -
Dividends paid - - -
Balance at
30 September 2007 784 61 089 39 802
GROUP STATEMENT OF CHANGES IN EQUITY (continued)
Retained
earnings Total
R`000 R`000
Balance at 1 April 2006 190 764 329 616
Exchange differences on
translating foreign operations - 26 461
Equity settled share-based
payments to employees - 4 652
IFRS 2 recognition of BEE
Credential - 606
Fair-value adjustment on
available for sale instruments - 23 800
Profit realised with sale of
available for sale instruments - (58 514)
Purchase of treasury stock - (18 951)
Sale of treasury stock - 10 425
Profit for the year 112 956 112 956
Dividends paid (98 712) (98 712)
Balance at 1 April 2007 205 008 332 339
Exchange differences on
translating foreign operations - (5 673)
Equity settled share-based
payments to employees - 9 352
IFRS 2 recognition of BEE
Credential - 303
Additional settlement on BEE
Transaction - 122
Fair-value adjustment on
available for sale instruments - (2 944)
Purchase of treasury stock - (26 904)
Sale of treasury stock - 88
Profit for the period 27 204 27 204
Dividends paid (12 459) (12 459)
Balance at
30 September 2007 219 753 321 428
CONSOLIDATED CASH FLOW STATEMENT
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2007 2006 2007
Unaudited Unaudited Audited
R`000 R`000 R`000
Cash generated from/(utilised in)
operating activities 26 597 (74 844) (258 408)
(note 1)
Cash (utilised in)/generated from
investing activities (1 138) 64 341 56 626
Cash generated from/(utilised in)
financing activities 23 084 1 563 (6 362)
Net increase/(decrease) in cash
and cash equivalents 48 543 (8 940) (208 144)
Cash and cash equivalents at
beginning of period 174 594 356 277 356 277
Effect of exchange rate fluctuations (5 651) 34 366 26 461
Cash and cash equivalents at end
of period 217 486 381 703 174 594
1. Note to the cash flow statements
Cash generated from/(utilised in)
operating activities
Decrease/(increase) in cash tied up in 147 656 (5 798) (82 251)
settlements
Increase/(decrease) in listed (177 158) 40 757 (61 675)
securities
Taxation paid (16 611) (35 065) (51 210)
Dividends paid (12 465) (81 522) (98 639)
Profit before tax adjusted for non-
cash
items 43 001 46 683 94 374
Other working capital changes 42 174 (39 899) (56 007)
Cash generated from/(utilised in)
operating activities 26 597 (74 844) (258 408)
SEGMENTAL ANALYSIS
Business segment Stockbroking Corporate Settlement
finance and prime
broking
September 2007 (Unaudited) R`000 R`000 R`000
Revenue from external customers 223 216 4 610 9 651
Inter-segment revenue 3 407 55 1 954
Total income 226 623 4 665 11 605
Segment result 45 799 1 861 2 567
Finance costs
Income from investments
Income tax expense
Profit for the period
Segment assets 5 207 728 5 577 763 253
Segment liabilities 4 905 595 6 747 754 397
Non-cash items
Depreciation 996 40 99
IFRS 2 recognition of BEE credential - - -
Business segment
September 2006 (Unaudited)
Revenue from external customers 185 003 1 897 10 305
Inter-segment revenue 2 151 55 1 628
Total income 187 154 1 952 11 933
Segment result 48 726 (377) 3 210
Finance costs
Income tax expense
Profit for the period
Segment assets 4 355 770 1 561 12 439
Segment liabilities 4 072 710 3 795 5 361
Non-cash items
Depreciation 769 21 105
IFRS 2 recognition of BEE credential - - -
Business segment
March 2007 (Audited)
Revenue from external customers 386 575 3 872 18 320
Inter-segment revenue 6 415 110 3 826
Total income 392 990 3 982 22 146
Segment result 90 222 (215) 4 652
Finance costs
Income from investments
Income tax expense
Profit for the year
Segment assets 5 762 412 4 378 415 886
Segment liabilities 5 469 447 6 656 408 288
Non-cash items
Depreciation 1 568 40 212
IFRS 2 recognition of BEE credential - - -
Segmental analysis (continued)
Business segment Other Eliminations Consolidated
September 2007 (Unaudited) R`000 R`000 R`000
Revenue from external customers 1 183 - 238 660
Inter-segment revenue 19 950 (25 366) -
Total income 21 133 (25 366) 238 660
Segment result 5 192 (10 384) 45 035
Finance costs (3 853)
Income from investments 8
Income tax expense (13 986)
Profit for the period 27 204
Segment assets 535 389 (297 226) 6 214 721
Segment liabilities 376 898 (150 344) 5 893 293
Non-cash items
Depreciation 203 - 1 338
IFRS 2 recognition of BEE credential 303 - 303
Business segment
September 2006 (Unaudited)
Revenue from external customers 60 110 - 257 315
Inter-segment revenue 19 607 (23 441) -
Total income 79 717 (23 441) 257 315
Segment result 72 796 (11 291) 113 064
Finance costs (544)
Income tax expense (34 143)
Profit for the period 78 377
Segment assets 251 719 (126 368) 4 495 121
Segment liabilities 100 014 (22 248) 4 159 632
Non-cash items
Depreciation 160 - 1 055
IFRS 2 recognition of BEE credential 303 - 303
Business segment
March 2007 (Audited)
Revenue from external customers 70 568 - 479 335
Inter-segment revenue 28 612 (38 963) -
Total income 99 180 (38 963) 479 335
Segment result 79 212 (12 817) 161 054
Finance costs (1 267)
Income from investments 33
Income tax expense (46 864)
Profit for the year 112 956
Segment assets 366 385 (154 890) 6 394 171
Segment liabilities 207 372 (29 931) 6 061 832
Non-cash items
Depreciation 353 - 2 173
IFRS 2 recognition of BEE credential 606 - 606
WWW.BJM.CO.ZA
Date: 14/11/2007 17:06:01 Produced by the JSE SENS Department.
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