|
IQG
IQG
IQG - IQuad Group Limited - Unaudited abridged interim results for the period
ended 31 August 2008
IQuad Group Limited
(Incorporated in the Republic of South Africa)
Registration number: 2004/025177/06
Share code: IQG
ISIN: ZAE000101622
("IQuad" or "the Company")
Unaudited abridged interim results for the period ended 31 August 2008
Highlights and Commentary
Investment Incentives
The last six month period saw the Department of Trade & Industry (DTI) achieve
efficiencies in the processing of claims related to the Small Medium Enterprise
Development Programme (SMEDP). In view of the improved efficiencies, total
revenue from SMEDP claims processing increased year on year by 9,6% for the six
month period to August.
The Enterprise Investment Programme (EIP) was launched on 21 July 2008 with an
effective term of six years to 2014. This incentive replaces the SMEDP as the
primary investment promotion product offered by the DTI. We expect to
participate meaningfully in the promotion of this incentive to eligible
businesses in the manufacturing and tourism sectors. The EIP bears a strong
resemblance to the replaced SMEDP and we are confident that revenues from this
programme will make a meaningful contribution to revenues in years to come.
We are pleased that government has confirmed its continued support of the Motor
Industry Development Programme (MIDP) through to 2019, as this will promote
further investment into this important and substantial industry. There is still
some uncertainty on the exact structure of the MIDP programme beyond 2012, but
we are confident that we will continue to play a substantial role in assisting
clients to maximise their opportunities in terms of the existing programme up to
2012 and the adjusted programme up to 2019.
In terms of MIDP administration and IRCC trading, despite the substantial
slowdown in local car sales we have managed to grow turnover due to robust
exports and the accrual of new clients.
Global Trade Services
We have continued to find it difficult to grow the Treasury business unit in
Australia, and have recognised that without an Australian partner we are
unlikely to make any meaningful progress in this market. We have cut overheads
substantially and should we not have made progress in finding a suitable partner
within a reasonable time, we will gradually wind down this business. We have
impaired our total investment, and do not expect to accrue any further
substantial losses in respect thereof.
The increased market volatility in the markets has created opportunities for the
Treasury business unit, and we expect this volatility to continue to help us
gain new clients as well as create opportunities from a performance fee point of
view.
We continue to grow our client base in terms of duty draw back and rebate
administration and expect this trend to continue.
Audit and Verification
Our BEE Verification business is performing in line with our budgets and is
expected to continue its strong growth cycle to the extent that we expect a
positive contribution to income in the second six months, i.e. after a long
period of capacity and infrastructural development. We have capitalised on a
variety of opportunities available in the industry, but have been marginally
affected by the delays in government`s accreditation process.
Business Development
Unfortunately recent restructuring of the Umsobomvu Youth Fund (UYF) had a
negative impact on earnings, however this has been comfortably offset by above
expected growth in training opportunities.
We are in the process of expanding the recently acquired Entrepreneur Survival
Solutions (ESS) by rolling out this successful concept to areas outside of
Kwazulu Natal, and look forward to a positive contribution from these new
initiatives.
General Comments & Prospects
We have had some unexpected challenges in the past six months, but do expect a
marked improvement in the second half of the year due to seasonal factors, an
improved contribution from recent acquisitions and start-up operations and our
core businesses are performing well. The executive committee has committed to
reviewing our growth strategies and are taking steps to mitigate future risk.
Organic Growth Prospects
We believe the tough market conditions currently being experienced have hampered
our organic growth from within our existing client base, and we expect these
tough market conditions to prevail for at least the next six months. We have
however managed to accrue new clients at a steady pace across the majority of
our businesses and expect our improved customer relationship management system
to assist us in optimising our cross-selling opportunities within the respective
divisions.
We have been actively pursuing strategic alliances with various industry bodies
as well as other service providers who offer complimentary services, and intend
leveraging off this increased exposure and footprint.
Acquisitive Growth Prospects
In terms of acquisitions, even though the tougher conditions in the market have
exerted downward pressure on selling prices of financial assets, sellers have in
certain instances been resistant in adjusting their prices in line with the
general market. However, we do anticipate that such resistance cannot be
maintained indefinitely, as tough conditions continue and we believe there will
be substantial opportunities to acquire well-priced assets. To this end we have
arranged facilities with third party financiers so that we are in a position to
take advantage of the ever-growing pipeline of opportunities.
Consolidated balance sheet
Unaudited Unaudited Audited
31-Aug-08 31-Aug-07 29-Feb-08
R000 R000 R000
Assets
Non-current assets 113 710 94 193 111 785
Property, plant and equipment 2 313 4 035 5 723
Intangible assets 95 988 86 376 89 370
Investments in associates 13 522 1 784 14 474
Investments 1 - 1
Deferred tax assets 1 886 1 998 2 217
Current assets 44 278 46 049 36 900
Work in progress 3 848 - 3 498
Current tax assets - - 575
Amounts owing by related parties 17 866 3 113
Trade and other receivables 20 025 12 218 16 299
Cash and cash equivalents 2 539 33 828 16 415
Total assets 157 988 140 242 148 685
Equity and liabilities
Equity and reserves 132 144 127 685 130 297
Issued ordinary capital 103 810 108 914 100 831
Foreign currency translation (168) (20) (168)
reserve
Accumulated profits 25 664 18 189 25 747
Attributable to equity shareholders 129 306 127 083 126 410
of the Company
Minority interest 2 838 602 3 887
Non-current liabilities - 1 650 300
Long-term borrowings - 1 650 -
Deferred tax liabilities - - 300
Current liabilities 25 844 10 907 18 088
Amounts owing to related parties - 695 -
Current tax liabilities 2 874 3 207 2 790
Provisions 498 - 366
Short-term portion of borrowings - 62 49
Trade and other payables 13 259 6 943 14 883
Bank overdraft 9 213 - -
Total equity and liabilities 157 988 140 242 148 685
Consolidated income statement
Unaudited Unaudited Audited
31-Aug-08 31-Aug-07 29-Feb-08
R000 R000 R000
Continuing operations
Revenue 35 366 26 431 62 353
Other operating income 596 1 054 12
Operating expenses (26 995) (17 769) (39 713)
Share of (losses) profits of (147) (945) 603
associates
Operating profit 8 820 8 771 23 255
Investment income 2 221 559 1 748
Finance costs (369) (366) (778)
Profit before taxation 10 672 8 964 24 225
Taxation 4 271 3 285 7 682
Profit for the period from
continuing operations 6 402 5 679 16 543
Discontinued operations
(Loss) / profit for the (1 095) 808 679
period from discontinued
operations
Profit after taxation 5 307 6 487 17 222
Attributable to: 5 307 6 487 17 222
Minority shareholders (226) 338 305
Equity shareholders of the 5 533 6 149 16 917
Company
Basic and diluted earnings
per ordinary share (cents)
Continuing operations 23.6 22.9 62.8
Discontinued operations (3.9) 3.5 2.6
Total basic earnings per 19.7 26.4 65.4
share
Consolidated statement of changes in equity
Total Minority Total
interests equity
R000 R000 R000
Balance at 1 March 2007 - audited 89 864 843 90 707
Issue of share capital 33 918 - 33 918
Treasury shares (357) - (357)
Net profit for the period 6 129 311 6 440
Dividends (2 523) (500) (3 023)
Business combinations 52 (52) -
Balance at 31 August 2007 - 127 083 602 127 685
unaudited
Net profit for the period 10 716 (269) 10 447
Share buy-back (4 855) - (4 855)
Treasury shares (3 227) - (3 227)
FCTR (148) - (148)
Dividends (3 158) - (3 158)
Business combinations - 3 555 3 555
Balance at 1 March 2008 - audited 126 411 3 888 130 299
Treasury shares utilised in 2 979 - 2 979
business combinations
Net profit for the period 5 533 (226) 5 307
Dividends (5 617) (1 794) (7 411)
Business combinations - 970 970
Balance at 31 August 2008 - 129 306 2 838 132 144
unaudited
Consolidated cash flow statement
Unaudited Unaudited Audited
31-Aug-08 31-Aug-07 29-Feb-08
R000 R000 R000
Cash flows from operating 4 407 7 825 10 851
activities
Cash generated from 6 074 7 868 15 412
operations
Investment income 2 221 559 1 748
Finance costs (369) (366) (778)
Taxation paid (3 519) (236) (5 531)
Cash flows from investing (6 586) (3 824) (23 931)
activities
Acquisition of property, (1 099) (3 167) (5 514)
plant and equipment
Proceeds on disposal of -
property, plant and equipment
Acquisition of treasury - - (3 584)
shares
Acquisition of intangible -
assets
Acquisition of investments - - (1)
Investment in subsidiaries (5 487) (110) (11 643)
Investment in associates - (547) (3 189)
Cash flows from financing (20 910) 22 931 22 597
activities
Proceeds from issue of - 33 561 33 668
shares, net of cash expenses
Share buy-back - - (4 605)
Minority shareholders` loans (521) - 575
(repaid) / advanced
Loans receivable (advanced) (12 978) 148 (275)
repaid
Loans payable repaid - (7 755) (585)
Dividends paid (7 411) (3 023) (6 181)
(Decrease)/increase in cash (23 089) 26 932 9 517
and cash equivalents
Cash and cash equivalents at 16 415 6 898 6 898
beginning of the period
Cash and cash equivalents at (6 674) 33 830 16 415
end of the period
Selected explanatory notes
Basis of preparation and accounting policies
This interim financial report has been compiled in accordance with
International Financial Reporting Standards (IFRS) and complies with IAS
34: Interim Financial Reporting.
The accounting policies and critical accounting estimates and judgements
applied to these financial statements are consistent with those applied
for the year ended 29 February 2008.
Financial results
This interim financial report has not been reviewed or audited by the
Group`s auditors.
Business combinations and disposals
On 1 March, the Group acquired a 60% interest in Entrepreneurs Survival
Solutions (Pty) Ltd (ESS) for a purchase consideration of R7.8 million.
The purchase price was settled partly by R5.2 million cash and the
balance was paid for by the allocation of 512 820 ordinary treasury
shares to the value of R2.6 million. The share price was determined with
reference to IQuad Group Limited`s share price during February 2008.
Unaudited Unaudited Audited
31-Aug-08 31-Aug-07 29-Feb-08
R R R
Fair value of assets acquired:
Property, plant and equipment 184 217 275
Intangible assets - 79 158
Investments in associates - - 9 889
Loans receivable 181 - -
Deferred tax assets 13 - -
Trade and other receivables 3 199 1 604 1 648
Cash and cash equivalents 61 35 461
Minority interests (568) 258 (2 618)
Long-term borrowings (919) (2 309) (528)
Trade and other payables (952) (233) (234)
Bank overdraft (348) - -
Net assets acquired 851 (349) 9 051
Goodwill 6 949 494 3 053
Purchase consideration 7 800 145 12 104
Cash and cash equivalents 287 (35) (461)
Paid by issue of ordinary shares (2 600) - -
Net cash outflow on acquisition 5 487 110 11 643
On 1 March the Group disposed of 50% of its shareholding in IQuad
Property Investment (Pty) Ltd for a cash consideration of R150 000, at
a profit of R149 940.
The remaining 50% interest is equity-accounted.
The Group has advanced funds to IQuad Property Investment (Pty) Ltd to
the value of R14 million. The loan bears interest at a market-related
interest rate.
Dividends
The directors of IQuad are pleased to announce that they declared a
dividend of 11 cents per share on 23 September 2008 and wish to ensure
that shareholders receive payment thereof as expeditiously as possible
in terms of the JSE Listings requirements.
The salient dates for the payment of this dividend are set out below:
Last day to trade cum dividend Friday, 17 October 2008
Trading ex dividend commences Monday, 20 October 2008
Record date Friday, 24 October 2008
Payment date Monday, 27 October 2008
Share certificates my not be dematerialised or rematerialised between
Monday, 20 October 2008, and Friday, 24 October 2008, both days
included.
Headline earnings and dividend per share
Unaudited Unaudited Audited
31-Aug-08 31-Aug-07 29-Feb-08
Cents Cents Cents
Headline and diluted headline
earnings per share
Headline earnings per share from 23.7 22.9 62.8
continuing operations
Headline earnings per share from (3.3) 3.5 2.6
discontinuing operations
Total headline earnings per share 20.4 26.4 65.4
Dividend per share
Interim 11.0 10.0 10.0
Final - - 20.0
Total dividend per share 11.0 10.0 30.0
Number of shares
Issued 28 085 28 937 28 085
Weighted 28 085 23 313 25 842
Headline earnings reconciliation
Basic earnings attributable to 5 533 6 149 16 917
ordinary shareholders
Profit on disposal of subsidiary (129) - -
Profit on disposal of property, (10) - (5)
plant and equipment
Impairment of property, plant and - - 7
equipment
Impairment of goodwill 163 - -
Impairment of investment in 181 - -
associate
Headline earnings 5 737 6 149 16 919
Discontinued operations
Earnings for the six months ended 31 August 2008 were negatively
affected by the Group`s 35% interest in Cullinan Industrial Porcelain
(Pty) Ltd ("CIP").
The investment in CIP has accordingly been impaired and is accounted
for as a discontinued operation.
Unaudited Unaudited Audited
31-Aug-08 31-Aug-07 29-Feb-08
R R R
Analysis of the result of the
discontinued operation
Impairment of carrying value of (1 144) - -
associate
Equity-accounted profits of - 945 794
associate
Net (loss) / profit before taxation (1 144) 945 794
Taxation (49) 137 115
Profit for the period from the (1 095) 808 679
discontinued operation
There were no cash flows during the period resulting from the discontinued
operation.
Segment report
The Group has four reportable segments which are the Group`s strategic business
units (SBUs). The SBUs offer different services and are managed separately as
they require different technology and marketing strategies.
The summary below describes the operations in each of the Group`s segments:
Investment incentives
Includes consulting services aimed at enabling clients to maximise the benefits
they can receive from government investment incentive programmes.
Global trade services
Includes providing clients, mainly exporters and importers, with specialised
risk management services that meet their specific operational and management
requirements, including administration and support.
Business development
Includes business improvement and turnaround services as well as leadership
assessment and training.
Verification services
These services provide critical certification for a broad spectrum of business
requirements and opportunities.
Segment Segment Segment
revenue profit assets
before
taxation
Operating segments R000 R000 R000
For the period ended 31 August 2008 -
unaudited
Investment incentives 18 438 7 895 14 566
Global trade services 11 162 3 065 11 199
Business development 4 472 (1 315) 17 634
Verification services 1 861 113 1 832
Total 35 933 9 758 45 231
For the period ended 31 August 2007 -
unaudited
Investment incentives 14 702 6 770 18 347
Global trade services 8 232 2 076 11 846
Business development 402 403 1 485
Verification services 3 360 1 943 3 580
Total 26 696 11 192 35 258
For the period ended 29 February 2008
- audited
Investment incentives 34 787 16 632 17 569
Global trade services 20 473 6 378 19 023
Business development 1 226 (611) 1 027
Verification services 5 867 2 887 4 774
Total 62 353 25 286 42 393
Unaudited Unaudited Audited
31-Aug-08 31-Aug-07 29-Feb-08
Reconciliation of segment profit R000 R000 R000
Total profit before tax for 9 758 11 192 25 286
reportable segments
Unallocated (losses) / profits (328) 2 067 (267)
Elimination of intersegment profits / 98 (3 350) -
(losses)
Discontinued operation disclosed 1 144 (945) (794 )
separately
Group profit before tax as per income 10 672 8 964 24 225
statement
Transactions with individual clients did not amount to 10% or more of
the Group`s total revenue.
For and on behalf of the board
Trevor Hayter
Chief Executive Officer
Frans Botha
Financial Director
Registered office: 5 Mangold Street, Newton Park, Port Elizabeth, 6045
Directors: TB Hayter (CEO), A da Costa (Chairman)#*, P Malan#, DM Edwards, FJ
Botha, ZL Combi#*, M Shaik Amod#*
# Non-executive * Independent Alternate to DM Edwards
Transfer Secretaries: Computershare Investor Services (Pty) Ltd
Designated Advisor: PSG Capital (Pty) Ltd
Date: 25/09/2008 16:55:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
