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BJM
BJM
BJM - Barnard Jacobs Mellet - Abridged Unaudited Interim Results For The Six
Months Ended 30 September 2008
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 6%
- Headline earnings per share down 67%
- Net asset value per share up 14%
COMMENTARY
Operations
The six month period under review has seen unprecedented turmoil in the global
financial system, which included the bankruptcy of Lehman Brothers, with whom
BJM had a number of strategic and operational initiatives. No BJM clients
suffered any damage from Lehman`s default, and the direct financial loss to the
firm was not material. The impact of the global credit crisis on local markets
has resulted in a sharp decline in equity prices, a spike in volatility and an
increase to risk aversion, none of which have been conducive to our equities
business.
Due to these factors, revenue growth was pinned back to 6% year-on-year, whereas
the 15% increase in costs largely reflected the investment for anticipated
growth. As a consequence, headline earnings per share, which include STC charges
decreased by 67% to 10,9 cents per share while normalised earnings per share,
being earnings adjusted for the impact of non-recurring items and STC, decreased
by 60% to 13,9 cents per share. The effective tax rate for the period was
negatively impacted by withholding taxes paid on the repatriation of retained
earnings from offshore and the revaluation of certain deferred tax assets. Net
asset value, which does not include the value of BJM Private Client Services and
Finsettle Services, increased from 410 cents per share to 466 cents per share.
Certain balances previously included in Cash and Cash equivalents are now
reflected in Amounts Receivable in Respect of Stockbroking Activities which
better reflect the business model of the Group. The present disclosure is a more
accurate reflection of the nature of these balances based on the current Group
business model.
BJM Private Client Services continued to show real positive growth in the face
of difficult markets. The value of assets under administration declined by only
3%, whereas JSE Limited market capitalisation decreased by 22% over the period.
Gross equity brokerage declined by 10% but the fixed income division and
Corporate Finance made meaningful contributions to offset this. We are pleased
to report that all of the Group`s business units were profitable during the
period under review.
Prospects
Management has taken measured action with regard to, inter alia, cost
containment and capital management and is determined to ensure that the Group`s
major divisions retain their competitive market positions while operating
profitably and generating cash. While there is no certainty with regard to the
outcome of the global credit crisis, it is envisaged that basic earnings will
remain under pressure for as long as market conditions remain unchanged.
Dividend
Given the dysfunction in global credit markets, the Board considers it prudent
not to declare an interim dividend.
Basis of preparation
The accounting policies and methods of computation used in the preparation of
these abridged 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 2008. The September 2008 interim financial statements have not been
audited or reviewed by the company`s auditors KPMG Inc.
John Bester Andile Mazwai
Chairman Chief Executive Officer
Johannesburg
13 November 2008
CONSOLIDATED INCOME STATEMENT
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Operating income 232 309 216 756 474 569
Interest income 19 567 21 904 44 316
Revenue 251 876 238 660 518 885
Profit on sale of - - 156
investments
Total income 251 876 238 660 519 041
Operating costs (224 145) (193 625) (419 050)
Operating profit before 27 731 45 035 99 991
finance costs
Finance costs (9 916) (3 853) (17 043)
Income from investments - 8 -
Profit before tax 17 815 41 190 82 948
Income tax expense (10 131) (13 986) (28 709)
Profit for the period 7 684 27 204 54 239
Earnings per share
Basic earnings per share 10,4 32,9 67,6
(cents)
Diluted earnings per share 8,8 27,8 57,7
(cents)
CONSOLIDATED BALANCE SHEET
As at As at As at
30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Assets
Non-current assets
Equipment 31 230 5 877 22 531
Investments 742 4 462 740
Intangible assets 15 444 11 911 15 658
Deferred tax assets 24 233 21 258 12 625
Total non-current assets 71 649 43 508 51 554
Current assets
Amounts receivable in 6 443 871 5 059 601 8 172 137
respect of stockbroking
activities
Margin on derivative 1 135 19 101 5 832
financial instruments
Trade and other 36 238 48 498 33 733
receivables
Listed securities holdings 1 326 487 781 774 993 422
Current tax assets 900 - 2 303
Cash and cash equivalents 119 477 262 239 399 068
Total current assets 7 928 108 6 171 213 9 606 495
Total assets 7 999 757 6 214 721 9 658 049
Equity and liabilities
Equity
Share capital 672 784 762
Share premium 18 935 61 089 52 001
Non-distributable reserves 64 335 39 802 57 725
Retained earnings 228 934 219 753 232 689
Total equity 312 876 321 428 343 177
Non-current liabilities
Loans, borrowings and 55 340 53 316 56 880
deferred payments
Deferred tax liabilities 7 856 1 017 217
Total non-current 63 196 54 333 57 097
liabilities
Current liabilities
Amounts payable in respect 6 078 675 5 072 274 8 118 475
of stockbroking activities
Listed securities sold 1 368 840 603 760 1 012 821
short
Trade and other payables 135 749 101 042 116 479
Current tax liabilities 17 534 16 944 9 549
Shareholders for dividends 201 187 201
Bank overdraft 22 686 44 753 250
Total current liabilities 7 623 685 5 838 960 9 257 775
Total equity and 7 999 757 6 214 721 9 658 049
liabilities
RESULTS PER SHARE
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Audited
Weighted average number of 73 732 82 576 80 255
ordinary shares (`000)
Headline earnings per share 10,9 32,9 67,3
(cents)
Diluted headline earnings 9,2 27,8 57,4
per share (cent)
Ordinary dividends per 17,0 15,0 29,0
share (cents)
Net asset value per share 466,0 410,0 450,4
(cents)
Reconciliation of headline R`000 R`000 R`000
earnings
Basic earnings 7 684 27 204 54 239
Loss/(profit) on disposal 490 - (114)
of equipment
Profit on sale of - - (156)
investments
Total tax effects on (137) - 64
adjustments
Headline earnings 8 037 27 204 54 033
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 2007 833 87 856 38 642
Income and expenses recognised:
Directly in equity:
Exchange differences in - - 17 017
translating foreign operations
Fair-value adjustment on - - (6)
available-for-sale instruments
Profit realised on sale of - - (1 383)
available-for-sale instruments
Total income and expenses - - 15 628
recognised directly in equity
In the income statement:
Profit for the year - - -
Total recognised income and - - 15 628
expenses
Equity settled share-based - - 2 727
payments to employees
IFRS 2 recognition of BEE - - 606
credential
Additional settlement on BEE - - 122
transaction
Treasury stock acquired (105) (47 727) -
Treasury stock issued 34 11 872 -
Dividends paid - - -
Balance at 1 April 2008 762 52 001 57 725
Income and expenses recognised:
Directly in equity:
Exchange differences in - - (5 548)
translating foreign operations
Fair-value adjustment on - - (7)
available-for-sale instruments
Total income and expenses - - (5 555)
recognised directly in equity
In the income statement:
Profit for the period - - -
Total recognised income and - - (5 555)
expenses
Equity settled share-based - - 11 480
payments to employees
IFRS 2 recognition of BEE - - 303
credential
Additional settlement on BEE - - 382
transaction
Cancellation of ordinary shares (29) (10 924) -
Treasury stock acquired (61) (22 170) -
Treasury stock issued - 28 -
Dividends paid - - -
Balance at 30 September 2008 672 18 935 64 335
GROUP STATEMENT OF CHANGES IN EQUITY (continued)
Retained
earnings Total
R`000 R`000
Balance at 1 April 2007 205 008 332 339
Income and expenses recognised:
Directly in equity:
Exchange differences in translating foreign - 17 017
operations
Fair-value adjustment on available-for-sale - (6)
instruments
Profit realised on sale of available-for-sale - (1 383)
instruments
Total income and expenses recognised directly - 15 628
in equity
In the income statement:
Profit for the year 54 239 54 239
Total recognised income and expenses 54 239 69 867
Equity settled share-based payments to - 2 727
employees
IFRS 2 recognition of BEE credential - 606
Additional settlement on BEE transaction - 122
Treasury stock acquired - (47 832)
Treasury stock issued - 11 906
Dividends paid (26 558) (26 558)
Balance at 1 April 2008 232 689 343 177
Income and expenses recognised:
Directly in equity:
Exchange differences in translating foreign - (5 548)
operations
Fair-value adjustment on available-for-sale - (7)
instruments
Total income and expenses recognised directly - (5 555)
in equity
In the income statement:
Profit for the period 7 684 7 684
Total recognised income and expenses 7 684 2 129
Equity settled share-based payments to - 11 480
employees
IFRS 2 recognition of BEE credential - 303
Additional settlement on BEE transaction - 382
Cancellation of ordinary shares - (10 953)
Treasury stock acquired - (22 231)
Treasury stock issued - 28
Dividends paid (11 439) (11 439)
Balance at 30 September 2008 228 934 312 876
CONSOLIDATED CASH FLOW STATEMENT
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2008 2007 2008
Unaudited Unaudited Audited
R`000 R`000 R`000
Cash (utilised (248 619) 26 597 211 241
in)/generated from
operating activities
Cash utilised in investing (12 974) (1 138) (17 247)
activities
Cash (utilised (34 875) 23 084 13 255
in)/generated from
financing activities
Net (decrease)/increase in (296 468) 48 543 207 249
cash and cash equivalents
Cash and cash equivalents 398 818 174 594 174 594
at beginning of period
Effect of exchange rate (5 559) (5 651) 16 975
fluctuations
Cash and cash equivalents 96 791 217 486 398 818
at end of period
Note to the cash flow
statement
Cash (utilised
in)/generated from
operating activities
Net profit before tax 19 630 43 001 85 713
adjusted for non-cash items
Working capital changes (252 100) 12 672 184 873
Taxation paid (4 709) (16 611) (32 794)
Dividends paid (11 440) (12 465) (26 551)
Cash (utilised (248 619) 26 597 211 241
in)/generated from
operating activities
SEGMENTAL ANALYSIS
Settlement
and
Stock Corporate prime
broking finance broking
R`000 R`000 R`000
September 2008 (Unaudited)
Revenue from external 238 930 7 407 5 480
customers
Inter-segment revenue 2 765 720 9 796
Total income 241 695 8 127 15 276
Segment result 30 632 1 877 5 652
Finance costs
Income tax expense
Profit for the period
Segment assets 6 419 295 8 853 1 651 769
Segment liabilities 6 088 207 2 475 1 641 544
Non-cash items
Depreciation 1 551 112 107
Amortisation of intangible - - -
assets
IFRS 2 recognition of BEE - - -
credential
September 2007 (Unaudited)
Revenue from external 223 216 4 610 9 651
customers
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
Investment income
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
Amortisation of intangible - - -
assets
IFRS 2 recognition of BEE - - -
credential
30 March 2008 (Audited)
Revenue from external 482 341 22 302 13 866
customers
Inter-segment revenue 7 262 718 19 813
Total income 489 603 23 020 33 679
Segment result 91 992 10 878 13 839
Finance costs
Income tax expense
Profit for the year
Segment assets 6 631 182 12 255 2 553 413
Segment liabilities 6 292 123 7 218 2 543 639
Non-cash items
Depreciation 2 098 98 191
Amortisation of intangible - - -
assets
IFRS 2 recognition of BEE - - -
credential
SEGMENTAL ANALYSIS (continued)
Other Elimina- Consoli-
tions dated
R`000 R`000 R`000
September 2008 (Unaudited)
Revenue from external customers 59 - 251 876
Inter-segment revenue 28 762 (42 043) -
Total income 28 821 (42 043) 251 876
Segment result 2 633 (13 063) 27 731
Finance costs (9 916)
Income tax expense (10 131)
Profit for the period 7 684
Segment assets 232 595 (312 755) 7 999 757
Segment liabilities 68 577 (113 922) 7 686 881
Non-cash items
Depreciation 2 367 - 4 137
Amortisation of intangible 214 - 214
assets
IFRS 2 recognition of BEE 303 - 303
credential
September 2007 (Unaudited)
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)
Investment income 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
Amortisation of intangible 768 - 768
assets
IFRS 2 recognition of BEE 303 - 303
credential
30 March 2008 (Audited)
Revenue from external customers 532 - 519 041
Inter-segment revenue 41 120 (68 913) -
Total income 41 652 (68 913) 519 041
Segment result 5 617 (22 335) 99 991
Finance costs (17 043)
Income tax expense (28 709)
Profit for the year 54 239
Segment assets 743 605 (282 406) 9 658 049
Segment liabilities 580 137 (108 245) 9 314 872
Non-cash items
Depreciation 434 - 2 821
Amortisation of intangible 1 259 - 1 259
assets
IFRS 2 recognition of BEE 606 - 606
credential
Directors: JA Bester (Chairman), HSC Bester, AM Mazwai* (CEO),
AR Martin, SM Mellet*, MS Rebe*, TS Seopa *Executive
Company Secretary: S Adams
Registered office: Barnard Jacobs Mellet, 24 Fricker Road, Illovo, 2196
Transfer secretaries: Link Market Services South Africa (Pty) Limited, 11
Diagonal Street, Johannesburg, 2001
Date: 13/11/2008 17:00:01 Produced by the JSE SENS Department.
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