| Fri 25 Apr 2008, 13:33 | | CCI - CIC Holdings Limited - Reviewed preliminary |
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CCI
CCI
CCI - CIC Holdings Limited - Reviewed preliminary results for the eight months
ended 29 February 2008
CIC Holdings Limited
(Incorporated in the Republic of Namibia)
(Registration number 95/502)
(Registered as an external company in the Republic of South Africa)
(Registration number 1996/002672/10)
Share code: CCI & ISIN: NA0009174278
("CIC" or "the Group")
REVIEWED PRELIMINARY RESULTS FOR THE EIGHT MONTHS ENDED 29 FEBRUARY 2008
Key Information
Strong revenue growth over the 8 months.
Attributable earnings for 8 months exceed previous 12 months.
Headline earnings 10,3 cents per share.
COMMENTARY
The Group successfully listed on the Altx on 30 November 2007. The listing on
Altx has increased the number of shares in issue from 202 188 081 to
252 188 081 through the private placement of 50 million shares at R1 per share.
The majority of the Group income streams emanate from countries outside of
South Africa. Top line sales has unfortunately had to face the pressure of
rising costs particularly in the area of distribution with increased fuel
prices linked to managing customer service level appropriately. However,
the Group has experienced good sales growth, year on year, in all countries.
All categories, fast moving consumer goods, tobacco products, and alcoholic
beverages, which make up the core agency business, performed well.
The staffing solutions business performed to expectation despite having lost a
major blue collar staffing contract, as other divisions performed ahead of
expectations.
RESULTS
The Group has changed its financial year end from 30 June to the last day of
February. Comparative numbers for the previous year are therefore for a 12
month period compared to a current 8 month period.
Total revenue for the period was N$1 249 million.
Profit from operations was N$ 33,6 million with a margin improvement of 4,3% to
2,7%.
Profit before tax for the eight months was only 2,6% lower than that achieved
during last year`s full 12 month period. This was mainly as a result of the
acquisition of minority shareholdings in associated companies during the
period.
Profit after tax was N$23,5 million (2007 N$23,5 million). This again is a
commendable achievement based on 8 months for 2008 versus the 12 months for
2007.
Attributable profit to the Group`s shareholders increased from N$17,7 million to
N$20,4 million, up 15% based on 8 months versus 12 months last year. This was as
a result of good performances across the board as well as the effect of new
acquisitions in South Africa and the increased shareholding in Ocean Traders
International.
A total of 50 million new shares were issued pursuant to the listing of CIC on
the AltX. This contributed to the weighted average number of shares increasing
to 205 629 856 shares at the end of February 2008.
The Balance Sheet reflects the increased working capital requirements, but it
is not comparable to the prior period because of the February versus June cut
off. Inventory, debtors and creditors values increased due to price increases
this year. This, together with strategic stock purchasing at the end of
February, resulted in higher working capital levels at 29 February 2008.
Cash and cash equivalents increased to N$80,8 million versus the N$67,2 million
at 30 June 2007 and N$72,2 million as at the end of December 2007.
Net asset value per share increased to 75,9 cents per share.
REGIONAL REVIEW
SOUTH AFRICA
The staffing solutions business` strategic move into the hospitality market as
well as the acquisition of the Foundation Group has added significant critical
mass to the business. Other growth opportunities in the technical staff market
are also gaining momentum. LSC`s venture into Botswana is also starting to
experience success with a number of new accounts.
The investment in Vital Merchandising Services ("VMS") has contributed
positively to the year`s results. This was followed by the purchase of a
shareholding in the Focus Retail Services business in the Western Cape as a
further step in acquiring a national footprint in the sales and merchandising
services industry, supplying manufacturers with solutions to all trade sectors,
within which they operate.
SWAZILAND / MOZAMBIQUE OCEAN TRADERS INTERNATIONAL
Ocean Traders International has had a good year. Alcoholic beverages have sold
particularly well in the region.
The intent to increase the portfolio of fast moving consumer goods has been
very encouraging and started to contribute favourably towards the end of the
period. Additional resources have been deployed within the operations to manage
the momentum of the increased critical mass, along with upgrading
infrastructure to accommodate more appropriate stockholding and distribution
requirements.
NAMIBIA / BOTSWANA
The business performed to expectation for the period against last year. Focus
on cost control has been difficult, particularly in light of rising transport /
distribution costs linked to ever increasing fuel costs. Whilst the countries
have small populations residing in a vast land mass, service expectations are
not dissimilar to customers in South Africa. This puts further pressure on
managing costs. The businesses do have balanced portfolios within the fast
moving consumer goods, alcoholic beverages and tobacco categories that have to
a large extent resulted in profitability flowing through for the year.
PROSPECTS
The volatility seen in global markets and the food commodity uncertainty linked
to exploding price increases may well have a dampening effect on the consumer
goods markets within which the Group operates, in the short term.
The South African energy crisis, critical rising inflation, and higher food
costs, will have an effect on the momentum of growth, with the very real
possibility of affecting the overall consumer goods market as the year
progresses.
However, the balance of CIC`s market presence and the brand portfolios that are
represented across all categories will to some extent protect financial
performance, going forward. This is reflected in the forecast presented for the
next 12 month period. The forecast is based on existing business activities that
already forms part of the Group.
In addition, the Group continues to focus on acquisitions within the region that
are aligned to CIC`s business strategy and that can contribute good and reliable
financial results to CIC over time.
For and on behalf of the board
TP Rogers FW Britz
Chief Executive Officer Financial Director
25 April 2008
GROUP INCOME STATEMENTS
29 FEBRUARY 2008
REVIEWED AUDITED FORECAST
8 months 12 months 12 months
ended ended ended
Change 29/02/2008 30/06/2007 29/02/2009
% N$`000 N$`000 N$`000
Revenue (18.4) 1,248,739 1,529,402 1,963,306
Profit from operations (14.8) 33,552 39,370 56,071
Depreciation (25.0) 4,135 5,512 6,255
Net finance income/
(expense) 704.8 (1,167) (145) (265)
Share of profit of
associates - 4,574 - 5,085
Profit before tax (2.6) 32,824 33,713 54,636
Tax (8.8) 9,352 10,254 16,734
Profit for the period 0.1 23,472 23,459 37,902
Attributable to:
Equity holders of the
company 15.0 20,418 17,752 35,156
Minority interest (46.5) 3,054 5,707 2,746
0.1 23,472 23,459 37,902
Reconciliation of
headline earnings
Profit for the period 23,472 23,459 37,902
Non - trading items
- capital profit (129) - 0
- capital loss 1,500 - 0
Plus : tax on the above
items 43 - 0
Headline earnings 6.1 24,886 23,459 37,902
Headline earnings
attributable to
Equity holders of the
company 19.0 21,119 17,752 35,156
Minority interest (34.0) 3,767 5,707 2,746
6.1 24,886 23,459 37,902
Earnings per
ordinary share
Weighted average -
cents 0.8 9.9 9.9 14.6
Fully diluted -
cents (7.8) 8.1 8.8 13.9
Headline Earnings
per ordinary share
Weighted average -
cents 4.2 10.3 9.9 14.6
Fully diluted - cents (4.6) 8.4 8.8 13.9
Dividends per ordinary
share (cents) 3.5 4.4
Number of ordinary
shares
Weighted average 205,630 180,133 240,213
Fully diluted 252,188 202,188 252,188
GROUP STATEMENTS OF CHANGES IN SHAREHOLDERS` EQUITY
29 FEBRUARY 2008
REVIEWED AUDITED
8 months 12 months
ended ended
29/02/2008 30/06/2007
N$`000 N$`000
Balance at beginning as previously reported 146,276 129,035
Share option reserve 466 811
Shares issued 51,260 -
Shareholding increased in subsidiary (14,748) -
New subsidiaries - Transfer to minority interest (5,826) (1,917)
Translation of foreign entities 2,407 (1,427)
Net profit for the period 23,472 23,459
Ordinary dividends (8,785) (3,685)
Balance at end of the period 194,522 146,276
Comprising:
Share capital 237 180
Share premium 134,565 83,362
Share option reserve 2,637 2,104
Accumulated profit 56,631 59,266
Translation of foreign entities (2,751) (5,158)
Minority interest 3,203 6,522
194,522 146,276
GROUP BALANCE SHEETS
29 FEBRUARY 2008
REVIEWED AUDITED
8 months 12 months
ended ended
29/02/2008 30/06/2007
N$`000 N$`000
ASSETS
Non-current assets 99,130 59,180
Property, plant and equipment 24,766 19,305
Intangible assets 33,659 25,111
Deferred tax 8,285 9,044
Investments in associates 28,572 5,720
Other - non current assets 3,848 -
Current assets 392,732 333,014
Inventories 105,591 88,644
Trade and other receivables 196,917 166,587
Loan to associate company 3,105 2,000
Taxation 1,657 2,383
Cash and cash equivalents 85,462 73,400
Total assets 491,862 392,194
EQUITY AND LIABILITIES
Capital and reserves attributable to
equity holders 191,319 139,754
Issued capital 134,802 83,542
Reserves 56,517 56,212
Minority interest 3,203 6,522
Total equity 194,522 146,276
Non-current liabilities 30,919 26,741
Interest-bearing borrowings 17,324 14,234
Deferred tax 594 349
Deferred operating lease liabilities 13,001 12,158
Current liabilities 266,421 219,177
Current portion of interest-bearing borrowings 7,117 5,053
Current portion of deferred operating lease
liabilities 849 633
Accounts payable and accrued liabilities 226,963 202,160
Subsidiary purchase consideration payable 22,605 -
Taxation 4,246 5,151
Bank overdraft 4,641 6,180
Total equity and liabilities 491,862 392,194
Net asset value per share (cents) 75.9 69.1
Net tangible asset value per share 62.5 56.7
GROUP CASH FLOW STATEMENTS
29 FEBRUARY 2008
REVIEWED AUDITED
8 months 12 months
ended ended
29/02/2008 30/06/2007
N$`000 N$`000
Cash generated by operations 39,489 41,387
Change in working capital (23,670) (12,710)
Net finance and investment income/(expense) 160 (145)
Dividends paid (8,785) (4,263)
Taxation paid (8,504) (9,793)
Cash-flow from operations (1,310) 14,476
Investment to maintain operations: (8,706) (8,307)
- Additions to intangible asset (251) (2,774)
- Additions to property, plant and equipment (8,712) (7,508)
- Proceeds on disposal of property, plant and
equipment 257 1,975
Investments in associate companies (3,605) (7,720)
Investment in subsidiary (25,195) (9,706)
Cash flow from investing activities (37,506) (25,733)
Proceeds from issue of shares capital 47,263 -
Net movement in borrowings 5,154 (235)
Cash flows from financing activities 52,417 (235)
Net movement in cash and cash equivalents 13,601 (11,492)
Cash and cash equivalents at beginning of period 67,220 78,712
Cash and cash equivalents at end of period 80,821 67,220
GROUP SEGMENT REPORT
For the 8 months ended 29 February 2008
GEOGRAPHIC SEGMENTATION
Namibia and Botswana
2008 2007
N$`000 N$`000
Revenue 981,137 1,249,552
Attributable earnings 10,937 14,246
Capital expenditure 8,090 6,288
Segment assets and
liabilities
- Assets 302,982 270,526
- Liabilities (258,696) (187,921)
- Inter-group balances (47,342) (51,926)
South Africa Swaziland and Mozambique
2008 2007 2008 2007
N$`000 N$`000 N$`000 N$`000
Revenue 190,269 174,571 77,333 105,279
Attributable earnings 4,803 2,627 3,378 2,949
Capital expenditure 535 527 14 648
Segment assets and
liabilities
- Assets 108,577 86,852 12,389 11,683
- Liabilities (84,114) (46,232) (4,617) (6,771)
- Inter-group balances (7,471) (3,988) (256) -
Group services Total
2008 2007 2008 2007
N$`000 N$`000 N$`000 N$`000
Revenue - - 1,248,739 1,529,402
Attributable earnings 1,300 (2,070) 20,418 17,752
Capital expenditure 73 45 8,712 7,508
Segment assets and
liabilities
- Assets 67,914 23,133 491,862 392,194
- Liabilities 50,087 (4,994) (297,340) (245,918)
- Inter-group balances 55,069 55,914 - -
OPERATIONAL SEGMENTATION
Agency divisions Staffing solutions
2008 2007 2008 2007
N$`000 N$`000 N$`000 N$`000
Revenue 1,117,417 1,447,071 131,322 82,331
Attributable earnings 17,008 17,942 2,110 1,880
Capital expenditure 8,006 6,867 633 596
Segment assets and
liabilities
- Assets 388,946 348,159 35,002 20,902
- Liabilities (320,061) (225,229) (27,366) (15,695)
Group services Total
2008 2007 2008 2007
N$`000 N$`000 N$`000 N$`000
Revenue - - 1,248,739 1,529,402
Attributable earnings 1,300 (2,070) 20,418 17,752
Capital expenditure 73 45 8,712 7,508
Segment assets and
liabilities
- Assets 67,914 23,133 491,862 392,194
- Liabilities 50,087 (4,994) (297,340) (245,918)
GROUP ACQUISITIONS FOR THE 8 MONTHS ENDED 29 FEBRUARY 2008
Material acquisitions
The following amounts are dislcosed in respect of acquisitions during the
reporting period
Company Nature of Purchase Fair value of Premium
Effective date transaction consideration net assets paid
acquired
N$`000 N$`000 N$`000
Ocean Traders
International Increase in 20,573 4,338 16,235
01-Dec-07 shareholding
Foundation Group Business 8,400 0 8,400
01-Jul-07 acquired
Company Nature of Contribution since acquisition
Effective date transaction Revenue(1) Profit before
Tax(1)
N$`000 N$`000
Ocean Traders
International Increase in 50,835 4,421
01-Dec-07 shareholding
Foundation Group Business 53,640 2,438
01-Jul-07 acquired
Note:
(1) The revenue and profit before tax includes 100% of Ocean Traders
International Group for the 3 months ending 29 February 2008. CIC only acquired
a further 29% in Ocean Traders International (Pty) Limited and Ocean Traders
International Marketing (Pty) Limited and a further 14% in CIC (Swaziland)
(Pty) Limited with effect from 1 December 2007.
Basis of preparation and accounting policies
These financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS). The accounting policies and
critical accounting estimates applied to these financial statements are
consistent, in all material respects, with those used in the Annual Financial
Statements for the year ended 30 June 2007, except as disclosed below.
The revised IAS 27: Consolidated and Separate Financial Statements was adopted
early during the current accounting period. IAS 27 states that changes in a
parent`s ownership interest in a subsidiary that does not result in a loss of
control are accounted for as equity transactions (i.e. transactions with owners
in their capacity as owners). The premiums paid on the acquisition of the
additional shares in subsidiaries were therefore recognised directly in equity.
Forecast
The forecast is disclosed in line with JSE requirements. Grant Thornton`s
limited assurance report on the forecast is available for inspection at the
registered office of the Company.
Independent review
The company`s auditors, Grant Thornton Neuhaus, have reviewed the preliminary
condensed financial statements for the 8 months ended 29 February 2008. Their
unqualified review report is available for inspection at the registered office
of the Company.
Post-balance sheet events
There have been no significant events subsequent to 29 February 2008 and up to
the date of this report that would require adjustment.
Earnings per share
The difference between the total number of shares in issue (fully diluted) and
the weighted average number of shares in issue relates to treasury shares,
which are held by the share trusts for share options granted to employees that
are exercisable in the future, and to shares issued pursuant to the listing on
the Altx during the current period.
Dividend
The directors are pleased to announce that they have declared a final dividend
of 3.5 cents per share on 22 April 2008.
Shareholders are further advised that non-resident shareholders` tax ("NRST") of
10% is deductible by CIC from any dividend distributed by CIC to its
shareholders who are non-resident in Namibia and who do not carry on business in
Namibia.
The salient dates for the payment of
this dividend are set out below:
Last date to trade cum dividend Friday, 6 June 2008
Trading ex dividend commences Monday, 9 June 2008
Records date Friday, 13 June 2008
Payment date Tuesday, 17 June 2008
Share certificates may not be dematerialised or rematerialised between
Monday,9 June 2008 and Friday, 13 June 2008, both dates included.
Registered office
Corner of Iscor and Solingen Streets
Northern Industrial Area, Windhoek
(PO Box 98, Windhoek, Namibia)
Registered as an external company in the Republic of South Africa
Tuscany Office Park, Block 5
Coombe Place
Rivonia
(PO Box 3581, Rivonia, 2128)
Tel: 011 8070109
Fax: 011 8071316
Transfer Secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Designated adviser
Questco Sponsor (Pty) Limited
Corporate adviser
PSG Capital (Pty) Limited
Directorate
BH Kent (Chairman)*, TP Rogers (Chief Executive Officer), EHT Angula*#,
FW Britz, H-B Gerdes *#, JA Holtzhausen*, P Malan*
* - Non-executive, # - Namibian Citizen
Company Secretary
JFB Smit
Business address
Tuscany Office Park, Block 5
Coombe Place, Rivonia
Date: 25/04/2008 13:33:00 Produced by the JSE SENS Department.
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