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SMSP - Stimulus Investments Limited - Condensed Annual Financial Report for the
Year Ended 28 February 2009
Stimulus Investments Limited
(Incorporated in the Republic of Namibia)
(Registration number 2004/482)
("Stimulus")
NSX Share code: SMSP
ISIN: NA000A0DK7D9
CONDENSED ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 28 FEBRUARY 2009
Condensed Consolidated Income Statement for the
year ended 28 February 2009
Reviewed Audited
2009 2008
N$ N$
Revenue
29,316,735 31,104,867
Cost of sales
(11,109,257) (9,375,555)
Gross profit
18,207,478 21,729,312
Profit on sale of
investment - 2,457,504
Other income
184,895 102,189
Operating expenses
(14,743,089) (17,787,285)
Operating profit
3,649,284 6,501,720
Investment revenue
347,247 767,242
Fair value
adjustments 18,429,280 13,543,720
Finance costs
(8,452,796) (5,825,573)
Profit before
taxation 13,973,015 14,987,109
Taxation
(918,625) (1,176,768)
Profit for the
year 13,054,390 13,810,341
Attributable to:
Equity holders of
the parent 12,833,297 14,486,644
Minority interest
221,093 (676,303)
Condensed Consolidated Balance
Sheet at 28 February 2009
Reviewed Audited
2009 2008
N$ N$
Assets
Non-current assets
106,291,792 60,433,096
Property, plant and
equipment 12,047,718 5,267,945
Intangible assets
6,335,243 7,120,243
Loans to related
parties - 307,481
Other investments
87,908,831 47,704,552
Deferred tax asset
- 32,875
Current assets
23,535,888 94,487,306
Inventories
1,387,705 933,010
Trade and other
receivables 602,776 1,097,983
Prepayments
334,967 515,333
Assets classified as
held for sale 2,500,000 -
Cash and cash
equivalents 18,710,440 91,940,980
Total assets
129,827,680 154,920,402
Equity and
Liabilities
Equity
41,802,754 23,510,006
Share capital
1,000 1,000
Reserves
4,155,669 -
Retained earnings
35,949,681 23,116,384
Minority Interest
1,696,404 392,622
Non-current
liabilities 86,219,061 128,644,573
Redeemable preference
share 80,392,000 123,680,000
Secured bank loan
1,507,158 1,552,730
Loan from related
parties 3,146,972 3,141,425
Deferred tax
liabilities 1,172,931 270,418
Current liabilities
1,805,865 2,765,823
Loans from related
parties 64,149 86,687
Trade and other
payables 1,732,415 2,665,467
Current tax payable
9,301 13,669
Total equity and
liabilities 129,827,680 154,920,402
Condensed Consolidated Cash Flow Statement for the
year ended 28 February 2009
Reviewed Audited
2009 2008
N$ N$
Cash generated from
operations 4,452,530 10,336,772
Interest income
347,247 767,242
Finance costs
(8,452,796) (5,825,573)
Tax paid
(631,708) (1,029,042)
Net cash (used in) /
from operating (4,284,727) 4,249,399
activities
Net cash used in
investing activities (25,370,575) (4,819,845)
Net cash (used in) /
from financing (43,575,238) 2,060,475
activities
Net (decrease) /
increase in cash and
cash equivalents
(73,230,540) 1,490,029
Cash and cash
equivalents at beginning
of year
91,940,980 90,450,951
Cash and cash
equivalents at end of 18,710,440 91,940,980
year
Condensed Statement of Changes in Equity for the year ended
28 February 2009
Share Revaluation Retained Minority
capital reserve income interest
N$ N$ N$ N$
Balance at 1 March
2007 1,000 - 8,629,740 1,216,148
Changes in equity
Profit for the
year - - 14,486,644 (676,303)
Sale of share in
investment - - - (147,715)
Total changes
- - 14,486,644 (824,018)
Balance at 1 March
2008 1,000 - 23,116,384 392,622
Changes in equity
Revaluation of
land and buildings - 4,155,669 - 1,324,359
Profit for the
year - - 12,833,297 221,093
Dividends
- - - (241,670)
Total changes
- 4,155,669 12,833,297 1,303,782
Balance at 28
February 2009 1,000 4,155,669 35,949,681 1,696,404
NOTES
1. Statement of compliance
These Condensed consolidated financial statements have been prepared in
accordance with International Financial Reporting Standard (IFRS) IAS 34,
Interim Financial Reporting. The Condensed consolidated financial
statements do not include all information required for full annual
financial statements, however these are available on request from the
Company.
2. Financial assets through profit and loss
Investments in unlisted equities are carried at fair value with fair value
adjustments recognised in profit and loss for the year.
3. Significant accounting policies
The accounting policies applied by the Group in these condensed
consolidated financial statements are the same as those applied by the
Group in its consolidated financial statements as at and for the year ended
29 February 2008.
COMMENTARY: REVIEW OF RESULTS
Stimulus owns a majority stake in the Joe`s Beerhouse Group of Companies, whose
results are therefore incorporated in the Stimulus Group Financial Statements
with effect from 1 March 2007. Revenue directly attributable to the investment
activities of Stimulus (excluding any consolidated results from group companies)
comprise dividends received from investee companies of N$2,978,877 (2008:
N$2,070,625) and returns generated from money market investments of N$2,961,767
(2008: N$7,706,194). The fair value gains of N$18,429,280 million are based on
conservative valuations of the underlying unlisted equity investments using the
discounted cash flow method of valuation and where necessary, discounting
factors have been adjusted to take into account the current uncertain economic
environment.
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 good investments in the respective industries. Good growth was
experienced in the bulk of the portfolio with the remainder (approximately 25%)
experiencing moderate growth. The portfolio is well positioned to continue to
deliver attractive returns going forward.
During the current year, Stimulus returned 35% of its originally issued
preference share capital. This payment to the amount of N$43,288,000 took the
form of a cash distribution out of the share premium account. The return of
excess capital leaves Stimulus with an uninvested cash balance of approximately
N$13,500,000, which funds are envisaged to be utilised for the increase of
Stimulus` stake in one or more of its current high performing unlisted equity
investments. The return of the funds enables management to focus its attention
on adding value to the existing investments and leaves shareholders in Stimulus
with more concentrated exposure to the Stimulus portfolio.
PROSPECTS
Stimulus continues to adhere to the principle of only investing in companies
that present attractive returns relative to the investment risks. With the
return of excess capital, resources will in future be fully applied to the
growth of existing investments as well as further improvement in post-deal
processes. Stimulus` vision is to be Namibia`s leading private equity investment
company.
DIVIDEND DECLARATION
The Directors have resolved that an amount of N$3,549,616 (2008: N$8,237,088) be
declared as a final dividend to the preference shareholders, which translates
into a dividend of 287 cents per preference share (2008: 666 cents per
preference share). This amount represents the total realised 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 trade: 12 June 2009
Securities start trading ex-dividend: 15 June 2009
Last day to register: 19 June 2009
Payment date: 02 July 2009
Note: Payments will be made electronically to the bank account details as
provided to Transfer Secretaries (Pty) Ltd. Holders who have changed banking
details are advised to inform Transfer Secretaries (Pty) Ltd accordingly.
AUDITORS REVIEW OPINION
The condensed financial statements for the period ended 28 February 2009 were
reviewed by SGA. The unqualified review opinion is available for inspection at
the Company`s registered office.
ACKNOWLEDGEMENTS
Stimulus is entering its fifth 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. We would furthermore like to thank
the management and staff of our underlying investment companies for 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 2009
Registered office
24 Orban Street
Klein Windhoek
Windhoek
Namibia
Sponsor
IJG Securities (Pty) Ltd
Member of the NSX
100 Robert Mugabe Avenue
P O Box 186, Windhoek, Namibia
Registration No. 95/505
Date: 28/05/2009 17:53:40 Produced by the JSE SENS Department.
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