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BFS
BFS
BFS - Blue Financial Services - Reviewed Preliminary Results For Financial
Year Ended 29 February 2008
BLUE FINANCIAL SERVICES
Registration number: 1996/006595/06
JSE code: BFS & ISIN: ZAE000083655
("The Group" or "the Company" or "Blue")
REVIEWED PRELIMINARY RESULTS FOR FINANCIAL YEAR ENDED 29 FEBRUARY 2008
SALIENT HIGHLIGHTS
- Loan book increased by 132% from R207 million to R482 million.
- Earnings increased by 88% from R32 million to R60,3 million.
- Earnings per share increased by 37% from 10,37 cents to 14,24 cents.
GROUP INCOME STATEMENT for the year ended 29 February 2008
Reviewed Audited
12 months to 12 months to
29 Feb 28 Feb
2008 2007 Change
R`000 R`000 %
Interest income 182 720 114 337 60
Interest expense (65 985) (25 167) 162
Net interest income 116 735 89 170 31
Administration and insurance income 148 339 32 404 358
Other operating income 16 898 4 373 286
Operating income 281 971 125 947 124
Impairment of loan advances (4 472) (3 314) 35
Operating expenses (212 359) (80 948) 162
Operating profit 65 140 41 685 56
Investment revenue 12 562 334 3 661
Fair value adjustments 6 162 - -
Profit before taxation 83 864 42 019 100
Taxation (23 536) (9 648) 144
Profit after taxation 60 328 32 371 86
Reconciliation of earnings to
headline earnings
Profit after taxation 60 328 32 371 86
Less: Minority interest (313) (100)
Earnings 60 328 32 058 88
Less: Negative goodwill (419) - -
Less: Profit on sale of property, (3 162) - -
plant and equipment
Less: Fair value adjustments (6 162)
Add: Impairment of loan - Blue Cell - 4 439 (100)
(Pty) Limited
Headline earnings 50 585 36 497 39
Number of shares in issue (net of 465 659 345 632 35
treasury shares) (`000)
Weighted number of shares in issue 423 520 309 139 37
(`000)
Fully diluted number of shares in 470 548 397 689 18
issue (`000)
Earnings per share in cents 14,24 10,37 37
Fully diluted earnings per share in 13,63 8,77 55
cents
Headline earnings per share 11,94 11,81 1
Fully diluted headline earnings per 11,56 9,89 17
share in cents
GROUP BALANCE SHEET as at 29 February 2008
Reviewed Audited
29 Feb 28 Feb
2008 2007 Change
R`000 R`000 %
Assets
Cash and cash equivalents 66 976 11 833 466
Loan advances 481 940 207 328 132
Trade and other receivables 8 363 2 425 245
Other financial assets 122 841 3 779 3 151
Investment property - 1 976 (100)
Property, plant and equipment 44 101 20 306 117
Current tax receivable 1 496 - -
Deferred tax 20 213 1 303 1 451
Intangible assets 54 237 59 058 (8)
Goodwill 309 274 265 022 17
Total assets 1 109 441 573 030 94
Equity and liabilities
Equity
Share capital 526 905 399 894 32
Reserves 2 122 (16) (13 363)
Retained income 92 386 32 058 188
Minority interest (198) 538 (137)
Total equity 621 215 432 474 44
Liabilities
Bank overdraft 106 384 32 306 229
Trade and other payables 22 626 14 163 60
Current tax payable 38 503 17 464 120
Other financial liabilities 291 651 44 887 550
Finance lease obligation 9 055 11 992 (24)
Loans from shareholders - 328 (100)
Provisions 2 355 2 131 11
Operating lease liability 830 153 442
Deferred tax 16 822 17 132 (2)
Total liabilities 488 226 140 556 247
Total equity and liabilities 1 109 441 573 030 94
Net asset value per share in cents 133,41 125,13 7
Tangible net asset value per share 55,34 31,36 76
in cents
GROUP STATEMENT OF CHANGES IN EQUITY for the year ended 29 February 2008
Share Foreign Retained Total
capital currency income Attributable
and translation R`000 to
premium reserve equity
R`000 R`000 holders
of the group
R`000
Balance at 1 March 2006 - - - -
Currency translation (16) (16)
differences
Profit for the period 32 058 32 058
Issue of ordinary 393 600 393 600
shares
Purchase of (6 368) (6 368)
own/treasury ordinary
shares
Issue of preference 35 200 35 200
shares
Share issue costs (22 538) (22 538)
Business combinations -
Balance at 28 February 399 894 (16) 32 058 431 936
2007
Currency translation 2 138 2 138
differences
Profit for the period 60 328 60 328
Issue of ordinary 123 657 123 657
shares
Transfer of 1 747 636 5 121 5 121
own/treasury ordinary
shares to staff
Redemption of (35 200) (35 200)
preference shares
Issue of preference 35 000 35 000
shares
Share issue costs (1 567) (1 567)
Purchase of minority -
interest
Balance at 29 February 526 905 2 122 92 386 621 413
2008
GROUP STATEMENT OF CHANGES IN EQUITY for the year ended 29 February 2008
(continued)
Minority Total
interest eqity
R`000 R`000
Balance at 1 March 2006 - -
Currency translation (16)
differences
Profit for the period 313 32 371
Issue of ordinary 393 600
shares
Purchase of (6 368)
own/treasury ordinary
shares
Issue of preference 35 200
shares
Share issue costs (22 538)
Business combinations 225 225
Balance at 28 February 538 432 474
2007
Currency translation 2 138
differences
Profit for the period 60 328
Issue of ordinary 123 657
shares
Transfer of 1 747 636 5 121
own/treasury ordinary
shares to staff
Redemption of (35 200)
preference shares
Issue of preference 35 000
shares
Share issue costs (1 567)
Purchase of minority (736) (736)
interest
Balance at 29 February (198) 621 215
2008
GROUP CASH FLOW STATEMENT for the year ended 29 February 2008
Reviewed Audited
12 months 12 months
to to
29 Feb 28 Feb
2008 2007
R`000 R`000
Cash flows from operating activities (261 868) (27 115)
Cash generated by/(utilised in) operations (185 839) 4 830
Interest expense (65 985) (25 167)
Investment revenue 12 562 334
Taxation paid (23 212) (7 973)
Non-cash items 606 861
Cash flows from investing activities (113 043) (96 486)
Property, plant and equipment acquired (32 186) (17 246)
Proceeds on disposal of property, plant and 6 063 211
equipment
Proceeds on disposal of investment property - 7 020
Acquisition of businesses (41 988) (79 164)
Purchase of financial assets - (2 868)
Proceeds on disposal of financial assets (44 932) -
Impairment of loans - (4 439)
Cash flows from financing activities 355 977 103 127
Proceeds on issue of ordinary shares 84 233 82 602
Proceeds on issue of redeemable preference 35 000 35 200
shares
Redemption of redeemable preference shares - -
Finance lease repayments (2 938) -
Shareholders` loan repaid (328) -
Financial liabilities raised/(repaid) 240 010 (14 675)
Increase/(decrease) in cash and cash (18 934) (20 474)
equivalents
Cash and cash equivalents at beginning of the (20 474) -
period
Cash and cash equivalents at end of the period (39 408) (20 474)
GROUP SEGMENTAL ANALYSIS for the year ended 29 February 2008
South Africa Botswana
Reviewed Audited Reviewed Audited
12 months 12 months 12 months 12 months
to 29 Feb to 28 Feb to 29 Feb to 28 Feb
2008 2007 2008 2007
R`000 R`000 R`000 R`000
Interest income 109 620 82 076 30 332 22 791
Interest expense (35 621) (12 908) (15 499) (7 011)
Net interest 73 999 69 168 14 832 15 780
income
Administration and 56 777 14 490 21 153 8 755
insurance income
External 38 317 10 429 21 153 8 755
administration and
insurance income
Intersegment 18 460 4 061 - -
administration and
insurance income
Other operating 8 316 4 045 2 819 274
income
Operating income 139 092 87 703 38 804 24 809
Impairment of loan 2 311 (1 806) (2 684) (1 061)
advances
Operating expenses (142 165) (50 972) (24 787) (17 746)
Operating profit (763) 34 925 11 333 6 002
Investment revenue 12 562 334
Fair value 6 162
adjustments
Segment result: 17 961 35 259 11 333 6 002
profit before
taxation
Taxation
Profit after
taxation
Other disclosures
Segment assets 709 487 215 768 92 868 32 189
Segment (497 458) (75 119) (66 964) (22 205)
liabilities
Fair value 6 162
adjustments
Depreciation and 9 645 6 538 2 043 1 207
amortisation
Capital 9 182 12 915 8 144 777
expenditure
GROUP SEGMENTAL ANALYSIS for the year ended 29 February 2008
Zambia Malawi
Reviewed Audited Reviewed Audited
12 months 12 months 12 months 12 months
to 29 Feb to 28 Feb to 29 Feb to 28 Feb
2008 2007 2008 2007
R`000 R`000 R`000 R`000
Interest income 20 598 9 397 3 750 -
Interest expense (7 291) (5 184) (1 677) -
Net interest 13 307 4 213 2 073 -
income
Administration and 43 855 13 138 21 714 -
insurance income
External 43 855 13 138 21 714 -
administration and
insurance income
Intersegment - - - -
administration and
insurance income
Other operating 948 54 1 238 -
income
Operating income 58 110 17 405 25 024 -
Impairment of loan (2 341) (400) (327)
advances
Operating expenses (23 271) (11 021) (4 296) -
Operating profit 32 498 5 984 20 401 -
Investment revenue
Fair value
adjustments
Segment result: 32 498 5 984 20 401 -
profit before
taxation
Taxation
Profit after
taxation
Other disclosures
Segment assets 91 534 28 588 44 681 -
Segment (55 341) (26 920) (23 258) -
liabilities
Fair value
adjustments
Depreciation and 1 090 628 92
amortisation
Capital 981 1 175 1 765
expenditure
GROUP SEGMENTAL ANALYSIS for the year ended 29 February 2008
Other Eliminated
Reviewed Audited Reviewed Audited
12 months 12 months 12 months 12 months
to 29 Feb to 28 Feb to 29 Feb to 28 Feb
2008 2007 2008 2007
R`000 R`000 R`000 R`000
Interest income 18 421 72 - -
Interest expense (5 897) (63) - -
Net interest 12 525 9 - -
income
Administration and 23 300 82 (18 460) (4 061)
insurance income
External 23 300 82 - -
administration and
insurance income
Intersegment - - (18 460) (4 061)
administration and
insurance income
Other operating 3 578 - - -
income
Operating income 39 402 91 (18 460) (4 061)
Impairment of loan (1 431) (47)
advances
Operating expenses (36 299) (5 270) 18 460 4 061
Operating profit 1 672 (5 226) - -
Investment revenue
Fair value
adjustments
Segment result: 1 672 (5 226) - -
profit before
taxation
Taxation
Profit after
taxation
Other disclosures
Segment assets 169 442 4 764 (366 395) (33 663)
Segment (158 813) (15 379) 366 395 33 663
liabilities
Fair value
adjustments
Depreciation and 2 194 162
amortisation
Capital 10 375 2 379
expenditure
GROUP SEGMENTAL ANALYSIS for the year ended 29 February 2008
Consolidated
Reviewed Audited
12 months 12 months
to 29 Feb to 28 Feb
2008 2007
R`000 R`000
Interest income 182 720 114 337
Interest expense (65 985) (25 167)
Net interest income 116 735 89 170
Administration and insurance 148 339 32 404
income
External administration and 148 339 32 404
insurance income
Intersegment administration - -
and insurance income
Other operating income 16 898 4 373
Operating income 281 971 125 947
Impairment of loan advances (4 472) (3 314)
Operating expenses (212 359) (80 948)
Operating profit 65 140 41 685
Investment revenue 12 562 334
Fair value adjustments 6 162 -
Segment result: profit 83 864 42 019
before taxation
Taxation (23 536) (9 648)
Profit after taxation 60 328 32 371
Other disclosures
Segment assets 741 618 247 647
Segment liabilities (435 439) (105 960)
Fair value adjustments 6 162 -
Depreciation and 15 063 8 534
amortisation
Capital expenditure 30 448 17 246
Reconciliation of segment
assets and assets per
balance sheet
Assets per segments 1 108 013 281 310
Intercompany loans (366 395) (33 663)
eliminated
Sub-total 741 618 247 647
Goodwill 309 274 265 022
Intangible assets 54 237 59 058
Deferred tax assets 4 312 1 303
Assets per balance sheet 1 109 441 573 030
Reconciliation of segment
liabilities and liabilities
per balance sheet
Liabilities per segments (801 834) (139 623)
Intercompany loans 366 395 33 663
eliminated
Sub-total (435 439) (105 960)
Deferred tax liabilities (15 780) (17 132)
Income tax liabilities (37 007) (17 464)
Liabilities per balance (488 226) (140 556)
sheet
The segment result for South Africa comprise contributing profit from group
holding company and operational activities as follows:
South Africa
Reviewed Audited
12 months 12 months
to 29 Feb to 28 Feb
2008 2007
R`000 R`000
Contributing 68 009 56 760
profit from
operational
activities
Contributing loss (50 048) (21 501)
from group holding
company activities
Segment result 17 961 35 259
NOTES
BASIS OF PREPARATION
The reviewed financial results of the company at and for the year ended 29
February 2008 comprise the financial results of the Company and its subsidiaries
(together referred to as the "Group"). The Group`s principal accounting policies
have been applied consistently over the current and prior financial years. These
reviewed financial results have been prepared in accordance with the recognition
and measurement criteria of IFRS, interpretations issued by the International
Financial Reporting Interpretations Committee (IFRIC), and the presentation and
disclosure requirements of International Accounting Standard: Interim Financial
Reporting (IAS 34).
In the preparation of these financial results the group has applied key
assumptions concerning the future and other indeterminate sources in recording
various assets and liabilities. These assumptions were applied consistently to
both the company and group financial statements for the year ended 29 February
2008. These assumptions are subject to ongoing review and possible amendments.
DISCLOSURE NOTES
1. Investments in subsidiaries
Name of company % holding % holding Carrying Carrying
Feb 2008 Feb 2007 amount amount
R`000 R`000 Feb 2008 Feb 2007
R`000 R`000
Blue Employee Benefits (Pty) 100 100 43 030 43 030
Limited
Blue Incremental Housing Finance 100 88 20 204 19 884
(Pty) Limited
Blue Employee Benefits (Pty) 100 100 67 538 67 538
Limited - Botswana
Blue Financial Services Zambia 100 100 54 288 54 288
Limited
Blue Limited - Kenya 100 100 21 121 21 121
Blue Employee Benefits Limited - 100 100 31 803 31 803
Uganda
Blue Investments Limited - 75 75 21 926 21 926
Cameroon
Blue Financial Services Limited 100 100 15 472 15 472
- Tanzania
Blue Financial Services Limited 100 100 6 731 6 731
- Rwanda
Blue Financial Services South 100 100 97 927 97 927
Africa (Pty) Limited
Greenstart Homeloans (Pty) 100 15 4 676 -
Limited
Africa Mobile Cellular (Pty) 100 - 1 100 -
Limited
Makhulong Multi Finance (Pty) 100 - 1 441 -
Limited - Lesotho
Blue Financial Services Limited 100 - 1 -
- Malawi
Bonus Finance Namibia(Pty) 100 - 17 881 -
Limited - Namibia
405 139 379 720
All investments in subsidiaries are being held by Blue, with the exception of
Africa Mobile Cellular (Pty) Limited, which is held by Blue Financial Services
South Africa (Pty) Limited, previously known as Micro Access Financial Services
(Pty) Limited ("Future Finance").
Blue remains on a strong growth curve and the nature of the business is organic
and acquisitive. As a result the following consolidation and acquisitions took
place during the year ended 29 February 2008.
Blue acquired the remaining 12% in Blue Incremental Housing Finance (Pty)
Limited on 1 March 2007 by issuing 100 000 Blue shares at R3,20 per share. These
shares were issued at a premium of 1,9% to the 30 business day volume weighted
average price on 1 March 2007. The company formed Blue Financial Services
Limited - Malawi on 1 March 2007 at a formation cost of R539. The aquiree`s
profit since the acquisition of the interest amounted to R13 605 839.
As a result of the Future Finance acquisition, the company acquired a 100%
holding in African Mobile Cellular (Pty) Limited through its wholly-owned
subsidiary Blue Financial Services South Africa (Pty) Limited, previously known
as Micro Access Financial Services (Pty) Limited, on 1 March 2007 for a cash
consideration of R1 100 000. The aquiree`s profit since the acquisition of the
interest amounted to R125 478.
Blue increased its shareholding in Greenstart Homeloans (Pty) Limited from 15%
to 100% with effect from 15 March 2007 by issuing 838 197 Blue shares at R2,7887
per share and a cash consideration of R2 337 500. The shares for the acquisition
of the 85% interest in Greenstart Homeloans (Pty) Limited were issued at the 30
business day volume weighted average price on 31 January 2007. The acquiree`s
profit since the acquisition of the interest amounted to R7 135 860.
The company acquired 100% of the shareholding in Makhulong Multi Finance (Pty)
Limited, incorporated in Lesotho, on 29 March 2007 for a deferred cash
consideration of R1 441 398 of which R570 000 has been paid to date. The
aquiree`s profit since the acquisition of the interest amounted to R6 538 056.
Blue acquired 100% of the shareholding in Bonus Finance Namibia (Pty) Limited
("Bonus Finance"), incorporated in Namibia, for a cash consideration of R16 100
000 and the business conducted by NFIT 2 Trust, NFIT 3 Trust and NFIT 5 Trust in
Namibia for a cash consideration of R5 400 000, with effect from 1 October 2007.
The aquiree`s profit since the acquisition of the interest amounted to R2 119
731.
No operations acquired have been subsequently disposed of. The amounts
recognised at the acquisition date for each class of the acquiree`s assets,
liabilities and contingent liabilities determined in accordance with IFRS
immediately before the combination is disclosed in note 4 (Acquisition of
businesses). The initial accounting for the business combination that is
reflected in the financial results is only provisional and will be finalised
within the timeframe specified by IFRS 3: Business Combinations. The carrying
amounts of subsidiaries are shown net of impairment losses.
Feb 2008 Feb 2007
R`000 R`000
2. Share capital
Authorised
1 000 000 000 ordinary shares of par value 1 1
R0,000001 each
140 000 000 Class A preference shares of - 14
R0,0001 each
90 000 000 Class B preference shares of 9 9
R0,0001 each
70 000 000 Class C preference shares of 7 7
R0,0001 each
17 31
Reconciliation of number of shares issued: Aug 2007 Feb 2007
Reported as at 1 March 2007 352 000 000 -
Treasury shares (4 620 605) (6 368 241)
Issue of shares - ordinary shares 118 279 498 352 000 000
465 658 893 345 631 759
All unissued ordinary shares are under the control of the directors in
terms of a resolution of members passed at the last annual general meeting.
This authority remains in force until the next annual general meeting.
Feb 2008 Feb 2007
R`000 R`000
Ordinary shares (net of treasury shares) 0,466 0,346
Class A preference shares - 35 200
Class B preference shares 35 000 -
Share premium 491 904 364 694
526 905 399 894
The Class A preference shares were redeemed on 25 July 2007
and subsequently cancelled.
Feb 2008 Feb 2007
R`000 R`000
3. Cash (used in)/generated from operations
Profit before taxation 83 864 42 019
Adjustments for:
Depreciation and amortisation 15 063 8 534
Profit on sale of assets (6 702) (3 860)
Profit on foreign exchange (2 292) -
Investment revenue (12 562) (334)
Interest expense 65 985 25 167
Fair value adjustments (6 162)
Impairments (419) 4 439
Movements in operating lease assets and 677 153
accruals
Movements in provisions 73 (743)
Foreign currency differences 1 169 (16)
Realisation of revaluation through - 4 248
profit/(loss)
Other non-cash items 5 120 300
Change in working capital:
Inventories 14 -
Trade and other receivables (337 037) (82 024)
Trade and other payables 7 370 6 947
(185 839) 4 830
Feb 2008 Feb 2007
R`000 R`000
4. Acquisition of businesses
Fair value of assets acquired
Property, plant and equipment 506 7 299
Intangible assets 2 029 63 574
Other financial assets 288 911
Investment properties - 9 376
Deferred tax (663) (17 879)
Goodwill 43 833 265 022
Trade and other receivables 10 862 127 730
Inventory 14 -
Cash and cash equivalents (2 954) 5 036
Shareholders` loans - (11 898)
Amounts owning to related parties - (7 047)
Long-term liabilities - (38 349)
Other financial liabilities (10 779) -
Provisions (151) (2 875)
Taxation (65) (13 739)
Trade and other payables (1 094) (7 215)
Outside shareholders 738 (227)
42 564 379 720
Consideration paid
Cash (39 035) (84 200)
Equity - 281 972 500 ordinary shares in Blue - (281 973)
Financial Services Limited
Equity - 938 197 ordinary shares in Blue Financial (2 658) -
Services Limited
Deferred payments - fair value (871) (13 547)
(42 564) (379 720)
Net cash outflow on acquisition
Cash consideration paid (39 035) (84 200)
Cash acquired (2 954) 5 036
(41 989) (79 164)
COMMENTARY ON THE RESULTS
NATURE OF BUSINESS
Blue is a pan-African financial services supplier, providing ethical, innovative
and affordable credit solutions to people within Africa. Blue currently operates
in Botswana, Kenya, Lesotho, Namibia, Malawi, South Africa, Tanzania, Uganda and
Zambia. The Group currently employs more than 1,500 staff and has more than 171
branches in 9 countries in Africa.
KEY FEATURES
The key features of the reviewed results for the year ended 29 February 2008 are
as follows:
-Loan book increased by 132% from R207 million to R482 million.
-Earnings increased by 88% from R32 million to R60,3 million.
-Earnings per share increased by 37% from 10,37 cents to 14,24 cents.
FINANCIAL OVERVIEW
Blue generated earnings of R60,3 million for the year ended 29 February 2008
(2007: R32,4 million), up 86% on the prior year. The loan book increased by 132%
to R481,9 million (2007: R207 million). The inclusion of the Micro Access
Financial Services (Pty) Ltd (Future Finance) operation acquired in December
2006 for the entire reporting period, the success in growing the Botswana and
Zambian operations and developing new operations in Lesotho, Malawi and Namibia
were the main drivers of the comparative improvement in these results. The
Group`s operating margins have declined in the year under review due to the
Company`s extensive expansion into new countries as well as a result of
Corporate Governance and management structures being strengthened to ensure
sustainable growth.
The increase in other financial liabilities from R48,9 million to R291,7 million
is as result of funding obtained from various international funding institutions
such as the Dutch Development Bank (FMO)and the International Finance
Corporation (IFC). These funds were mainly utilised to grow the debtors book in
operations outside of South Africa.
CHANGES TO THE BOARD OF DIRECTORS
Mr Navin P Kanabar (Tanzanian) was appointed as non-executive director on 13
March 2007. Mr Antonios Couloubis (Tony) from American International Group
("AIG") joined the Board as non-executive director on 1 June 2007. Mr Reynier
van der Westhuizen replaced Ms Margaretha Stoltz (Retha) as company secretary on
13 August 2007. Mr Johan C Maritz joined the Board on 1 September 2007 as
financial director, following the resignation of Mr Johan S Coetzee as financial
director with effect from that date. Mr Ceaser W Siwale retired by rotation at
the annual general meeting on 27 September 2007. Mr Riaan Swart resigned as an
executive director of Blue with effect from 1 February 2008. Ms Genevieve
Sangudi was appointed as non-executive director on 20 May 2008.
DIVIDENDS
In line with the Group policy no dividend has been declared for the year under
review.
POST-BALANCE SHEET EVENTS
1. Formation of a subsidiary in Nigeria
An agreement, dated 6 March 2008, was entered into between Blue Employee
Benefits (Pty) Limited - Botswana ("BEB"), Blue, Intercontinental Bank plc
("ICB") and AIG Capital Partners, Inc ("AIG") ("the parties") in terms of which
Blue will introduce its products to Nigeria and ICB wil expand its product
offering to its clients to include Blue`s products. A company, Blue
Intercontinental Micro Finance Bank ("BIMFB") ("the new project"), will be
established for this purpose.
BIMFB will not have any liabilities, indebtedness or obligations other than in
terms of the agreement. BIMFB will be registered in such a manner that its
legal structure meets the requirements of the Central Bank of Nigeria to qualify
for a Micro Finance Banking license ("MFB license"). In order to obtain a MFB
license, an amount of one billion Nigerian Naira (approximately US$8,7 million)
was deposited into an account as designated by the Central Bank of Nigeria ("the
deposit"). BEB and ICB provided the funding for the deposit as set out below.
Subject to the ICB conditions precedent, the following initial subscriptions
will be made for BIMFB shares:
- 520 000 shares by BEB for a total subscription price of US$1 million;
and
- 280 000 shares by ICB for a total subscription price of US$10,8 million.
Subject to the AIG conditions precedent, AIG will purchase from BEB that number
of shares which will result in AIG holding 10% of BIMFB for US$5 million.
At the same time as the shares are sold to AIG, further BIMFB shares will be
subscribed for as follows:
- 130 000 shares by BEB for a total subscription price of US$6 million;
and
- 70 000 shares by ICB for a total subscription price of US$3,2 million.
The resulting shareholding in BIMFB will be as follows:
%
Shareholder shareholding
BEB or another member of the Blue group of companies ("the 55
BEB shares")
ICB ("the ICB shares") 35
AIG ("the AIG shares") 10
100
2. Acquisition of Nedfin Limited
On 8 May 2008, Blue announced that Blue Employee Benefits (Pty) Limited Botswana
("BEB") a wholly owned subsidiary of Blue, has entered into a sale agreement in
terms of which BEB purchased the entire share capital in and claims against
Nedfin Limited ("Nedfin") with effect from 1 April 2008, for a cash
consideration of $9 million (United States dollars).
Nedfin, a company duly incorporated in Zambia under registration number 56964,
commenced trading in July 2005 and was granted its Non-Banking Financial
Institution Licence by the Bank of Zambia in September 2005. It is involved in
the micro-lending business, providing small to medium size loans to individuals
who are gainfully employed and where repayments in respect of such loans are
collected in cash, debit order or through payroll deduction. The business
focuses on short-term lending through its eight Zambian branches. The
acquisition of Nedfin will result in Blue having a combined branch network in
Zambia of 20 branches and will effectively make Blue the single biggest micro-
financier in Zambia.
3. Issue of of unsecured convertible bonds
On 15 April 2008, Blue advised shareholders that the Company entered into an
agreement with foreign investor, EMP Africa FII Investments LLC ("EMP"), in
terms of which Blue will issue and sell 10 convertible bonds ("convertible
bonds") for US$10 million ("the transaction").
The terms of the convertible bonds are as follows:
Issue and price: 10 convertible unsecured bonds at an aggregate value of US$10
million.
Interest rate: 10% per annum payable bi-annually in February and August.
Maturity date: 28 February 2013.
Conversion: All the bonds.
Conversion event: Event of material default / mandatory conversion.
Mandatory conversion: At a price of R5.30 per Blue ordinary share
("conversion price"), operative immediately when the price of Blue`s ordinary
shares, based on the weighted average traded price on the JSE equals or exceeds
R5.83 for 30 consecutive days.
Currency: Converts to Rand at the actual exchange rate upon initial receipt of
the funds.
A circular dated 5 May 2008 was sent to shareholders, setting out further
details relating to the convertible bonds and at the general meeting of
shareholders held on 21 May 2008, the resolution to issue and sell the
convertible bonds was approved by 99,9% of the shareholders present and voting
at the general meeting.
4. Botswana dual-listing
Effective 15 May 2008, the current share capital of Blue which is listed on the
JSE Limited became available for trade on the Botswana Stock Exchange ("BSE")
after the company`s dual-listing on the BSE was approved. No additional shares
were issued.
FORWARD LOOKING STATEMENT
Blue remains well positioned to maintain a strong growth path through its
expansion into new countries as well as organic and acquisitive growth in
current operational areas. The focus for the year ahead will be to kick off and
bed down the Nigerian operation, build critical mass in our East African
operations consisting of Kenya, Tanzania and Uganda, commence operations in
additional African countries, further diversify our loan product offering and to
accelarate the growth of the Group`s debtors book (loan book) through expansion
and enhancement of business processes, operating systems and communication
platforms over the next 12 months.
UNMODIFIED REVIEW OPINION
PKF (Pta) Inc, the group`s independent auditors, have reviewed the financial
statements that comprise the consolidated balance sheet at 29 February 2008,
consolidated income statement, condensed consolidated statement of changes in
equity and condensed consolidated cash flow statement for the year then ended,
and selected explanatory notes, and have expressed an unmodified review
conclusion on these financial statements. The review report is available for
inspection at the company`s registered office.
For and on behalf of the Board
D van Niekerk
Pretoria
22 May 2008
Directors: D van Niekerk (Chairman and CEO); JC Maritz(Financial Director); WJ
Smit (Legal Director); MJ Sondiyazi*,A Steyn*; A Couloubis* and NP Kanabar*
(Tanzanian) *non-executive
Registered Office:
Blue Building, 10 Boardwalk Office Park, 107 Haymeadow Street, Faerie Glen,
Pretoria, 0081
PO Box 72041, Lynnwood Ridge, 0040
Auditers:
PKF (Pta) Inc
Registration number 2000/026635/21
Designated Advisor:
PSG Capital (Pty) Limited
Registration number 2006/015817/07
Transfer Secretaries:
Link Market Services (Pty) Ltd11 Diagonal Street, Johannesburg, 2001(PO Box
4844, Johannesburg, 2000)
Company Secretary:
Mr. Reynier van der Westhuizen 10 Boardwalk Office Park, 107 Haymeadow Street,
Faerie Glen, Pretoria, 0081
reynier@blue.co.zaTel: (012) 990 8400
Group head office: Tel: +27 12 990 8400 Fax: +27 86 637 6033
E-mail: blue@blue.co.za
www.blue.co.za
Date: 22/05/2008 07:38:39 Produced by the JSE SENS Department.
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