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SMSP - Stimulus - Audited Annual Financial Statements For The Year Ended
29 February 2008
Stimulus Investments Limited
(Incorporated in the Republic of Namibia)
(Registration number 2004/482)
("Stimulus")
NSX Share code: SMSP
ISIN: NA000A0DK7D9
STIMULUS INVESTMENTS LIMITED ("STIMULUS")
AUDITED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 FEBRUARY 2008
Condensed Group Income statement
for the year ended 29 February 2008
Audited Audited
2008 2007
N$ N$
Revenue 31,104,867 8,675,949
Cost of sales (9,375,555) -
Gross profit 21,729,312 8,675,949
Profit on sale of 2,457,504 -
investment
Other income 102,189 -
Operating expenses (17,787,285) (3,410,640)
Operating profit 6,501,720 5,265,309
Finance income 767,242 464,584
Fair value 13,543,719 4,110,505
adjustments
Finance costs (5,825,573) (5,874,834)
Profit before 14,987,108 3,965,564
taxation
Taxation (1,176,768) -
Profit for the 13,810,340 3,965,564
year
Attributable to:
Equity holders of 14,486,643 2,749,415
the parent
Minority interest (676,303) 1,216,149
Condensed Group Balance Sheet
at 29 February 2008
Audited Audited
2008 2007
N$ N$
Assets
Non-current assets 60,433,096 43,306,802
Property, plant and 5,267,945 -
equipment
Goodwill and other 7,120,243 -
intangible assets
Loans to related 307,481 238
parties
Other financial assets 47,704,552 43,306,564
Deferred tax 32,875 -
Current assets 94,487,306 90,966,284
Inventory 933,010 -
Trade and other 1,097,983 -
receivables
Prepayments 515,333 515,333
Cash and cash 91,940,980 90,450,951
equivalents
Total assets 154,920,402 134,273,086
Equity and Liabilities
Equity 23,510,005 9,847,381
Share capital 1,000 1,000
Retained earnings 23,116,383 8,629,740
Minority Interest 392,622 1,216,641
Non-current 128,644,573 124,329,938
liabilities
Redeemable preference 123,680,000 123,680,000
share
Other non-current 1,552,730 -
liabilities
Loan from related 3,141,425 649,938
parties
Deferred tax 270,418 -
Current liabilities 2,765,824 95,767
Loans from related 86,687 38,098
parties
Trade and other 2,665,468 55,387
payables
Current tax payable 13,669 -
Dividend payable - 2,282
Total equity and 154,920,402 134,273,086
liabilities
Condensed Group Cash Flow Statement
for the year ended 29 February 2008
Audited Audited
2008 2007
N$ N$
Cash generated from 10,336,773 4,465,700
operations
Interest income 767,242 464,584
Finance costs (5,825,573) (5,874,834)
Tax paid (1,029,042) -
Net cash flow from 4,249,400 (944,550)
operating activities
Net cash flow from (4,819,846) (23,545,567)
investing activities
Net cash flow from 2,060,475 687,847
financing activities
Total cash movement for 1,490,029 (23,802,270)
the year
Cash and cash 90,450,951 114,253,221
equivalents at beginning
of year
Cash and cash 91,940,980 90,450,951
equivalents at end of
year
Condensed Group Statement of Changes in Equity
for the year ended 29 February 2008
Share Retained Minority
capital income interest
N$ N$ N$
Balance at 1 March 1,000 5,880,325 -
2006
Changes in equity
Profit for the - 2,749,415 1,216,149
year
Business - - 491
combinations
Total changes - 2,749,415 1,216,640
Balance at 1 March 1,000 8,629,740 1,216,640
2007
Changes in equity
Profit for the - 14,486,643 (676,303)
year
Sale of share in - - (147,715)
investment
Total changes - 14,486,643 (824,018)
Balance at 29 1,000 23,116,383 392,622
February 2008
NOTES
1. Statement of
compliance
The Condensed consolidated financial statements have been
prepared in accordance with International Financial Reporting
Standards. The Condensed consolidated financial statements do
not include all information required for full annual financial
statements, and should be read in conjunction with the
consolidated financial statements of the Group as at and for the
year ended 29 February 2008.
2. Prior year figures
Prior year results have been restated in order to achieve more
appropriate presentation of results subsequent to the
acquisition of a subsidiary.
3. Financial assets through
profit and loss
Investments in unlisted equity are carried at fair value with
fair value adjustments recognised in profit and loss for the
period.
COMMENTARY: REVIEW OF
RESULTS
The period under review was characterised with various
discussions on policy instruments which should impact the
regulatory environment within which Stimulus operates, namely,
the Transformation of Economic and Social Empowerment Framework
(TESEF), amendments to Regulation 28 of the Pension Funds Act,
1956, and amendments to Regulation 15 of the Long-term Insurance
Act, 1998. While speculation relating to Reg. 28/Reg. 15 was
dispelled by its gazetting in February 2008, TESEF remains under
consultation.
Stimulus acquired a 75.83% stake in the Joe`s Beerhouse Group of
Companies, which results are incorporated in the Stimulus Group
Financial Statements with effect from 1 March 2007. The
significant increase in revenue, cost of sales and operating
expenses can largely be attributed to the Joe`s Beerhouse Group.
Revenue directly attributable to the investment activities of
Stimulus comprise dividends received from investee companies of
N$ 2,070,625 (2007: N$ 919,825), returns generated from money
market investments of N$ 7,706,194 (2007: N$ 7,752,350), fair
value gains from the revaluation of the Stimulus investments in
unlisted shares of N$ 13,543,719 (2007: N$ 4,110,505) and
finance income of N$ 325,324 (2007: N$ 462,354). It is evident
that dividends received from investments increased significantly
compared to the previous period. This is due to the higher
number of investments as well as the well-performing portfolio.
During the current year, Stimulus sold 49% of its investment in
One Africa Television at a profit of N$2,457,504.
The increase in value of the portfolio is indicative of strong
underlying investments and we are comfortable that the Stimulus
portfolio is well-balanced and comprises leaders within their
respective industries. Healthy growth was experienced in the
bulk of the portfolio with the remainder (approximately 25%) of
the portfolio experiencing moderate growth since investment.
The portfolio is well positioned to continue to deliver
attractive returns going forward.
POST BALANCE SHEET
EVENT
In the previous year`s Annual Financial Statements, indication
was given that should Stimulus remain under-invested, a
mechanism would be considered whereby excess cash would be
returned to investors. This was effected on 14 March 2008 with
the return of N$43.29 million to investors. The return of excess
capital leaves investors in Stimulus with more concentrated
exposure to the Stimulus portfolio.
PROSPECTS
The Stimulus investments in unlisted shares to date total N$
47.70 million with a remaining N$30 million earmarked for
investments in the pipeline. Stimulus continues to adhere to the
principle of only investing in companies that present attractive
returns relative to the investment risks under question. With
the return of excess capital, resources will in future be fully
applied to the growth of existing investments as well as
improvements in post-deal processes. Stimulus` vision is to be
Namibia`s de facto private equity investment company and even
though small investments will no longer be considered, it
remains open to investment in transactions of significant value.
DIVIDEND DECLARATION
The Directors have resolved that an amount of N$8,237,088 be
declared as a final dividend to the preference shareholders,
which translates into a dividend of 666 cents per preference
share (2007: 463 cents per preference share). This amount
represents the total ealized after-tax cashflow profits of
Stimulus Investments Limited, after adjusting for fair value
gains and outstanding receivables. The salient details of the
dividend are:
Last day to Register:
20 June 2008
Payment Date: 04 July
2008
Note: Payments will be made electronically to the bank account
details as provided to Transfer Secretaries. Holders who have
changed banking details are advised to inform Transfer
Secretaries accordingly.
ACKNOWLEDGEMENTS
Stimulus is entering its fourth year as Namibia`s de facto
private equity investment company and it has managed to build a
reputable and recognised track-record in this highly specialised
field. We would like to thank our investors for their continued
support, input and trust, particularly during the year under
review. We would furthermore like to thank the management and
staff of our underlying investment companies as the strong
growth reflected in the portfolio is indicative of their hard
work and commitment to their respective businesses.
Peter Koep
Independent, Non-Executive Chairman
Windhoek
29 May 2008
Sponsor
IJG Securities (Pty) Ltd
Member of the NSX
12 Love Street
P O Box 186, Windhoek, Namibia
Registration No. 95/505
Date: 29/05/2008 17:43:01 Produced by the JSE SENS Department.
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