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NCS
NCS
NCS - Nictus - Abridged Report Relating to the Audited Financial Results for the
Year Ended 31 March 2009 and Details of the Notice of Annual General Meeting
NICTUS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1981/001858/06)
JSE Share code: NCS
NSX Share code: NCT
ISIN Code NA0009123481
("Nictus" or "the company")
ABRIDGED REPORT RELATING TO THE AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31
MARCH 2009 AND DETAILS OF THE NOTICE OF ANNUAL GENERAL MEETING
ABRIDGED SUMMARISED GROUP INCOME STATEMENT FOR THE YEAR ENDED 31
MARCH 2009
Audited Audited
2009 2008
R`000 R`000
Revenue 369 529 265 229
Cost of sales (289 512) (201 933)
Gross profit 80 017 63 296
Other operating income 3 682 3 535
Administrative expenses (33 349) (24 258)
Other operating expenses (57 460) (45 181)
Investment income from operations 17 083 12 043
Operating profit 9 973 9 435
Investment income 3 238 3 284
Finance expenses (5 265) (5 536)
Profit before taxation 7 946 7 183
Taxation 2 097 (486)
Profit for the year 10 043 6 697
Attributable to:
Equity holders of the parent 10 043 6 697
Minority interest - -
Profit for the year 10 043 6 697
Basic earnings per share (cents) 18.98 12.96
Diluted earnings per share (cents) 18.79 12.53
RECONCILIATION BETWEEN EARNINGS AND HEADLINE EARNINGS:
Profit for the year 10 043 6 697
Loss on disposal of property, plant and 31 28
equipment net of insurance proceeds
Headline earnings 10 074 6 725
Headline earnings per share (cents) 19.04 13.02
ABRIDGED SUMMARISED GROUP BALANCE SHEET AS AT 31 MARCH 2009
Audited Audited
2009 2008
R`000 R`000
Assets
Non-current assets
Property, plant and equipment 55 284 53 697
Goodwill 1 647 1 647
Intangible assets 478 582
Investments 20 670 16 771
Loans and receivables 186 543 122 319
Deferred tax asset 13 992 8 710
Current assets
Inventories 40 695 27 700
Trade and other receivables 128 436 111 957
Cash and cash equivalents 177 896 109 279
Current tax assets 73 146
Assets classified as held for sale 2 066 -
Total assets 627 780 452 808
Equity
Share capital 26 456 25 832
Revaluation reserve 17 002 17 002
Contingency reserve 16 989 10 693
Retained income 18 409 16 800
Non-current liabilities
Interest bearing loans and borrowings 21 659 15 000
Deferred tax liability 8 413 6 135
Current liabilities
Bank overdraft 14 389 19 026
Interest bearing loans and borrowings 50 558 26 485
Insurance contract liabilities 413 131 289 668
Trade and other payables 39 876 25 998
Current tax liabilities 898 169
Total equity and liabilities 627 780 452 808
ABRIDGED SUMMARISED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH
2009
Audited Audited
2009 2008
R`000 R`000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 7 946 7 183
Adjustment for:
Investment income from operations received (6 739) (5 413)
Dividends received (10 344) (6 630)
Investment income received (3 238) (3 284)
Finance expenses 5 265 5 536
Depreciation of property, plant and equipment 1 326 859
Amortisation of intangible asset 273 57
Loss on disposal of property, plant and 31 28
equipment
Profit on disposal of investments (1) (230)
Fair value adjustment on investments (66) (362)
Working capital changes:
Increase in inventories (12 995) (1 921)
Increase in trade and other receivables (18 545) (38 591)
Increase in insurance contract liabilities 123 463 58 573
Increase in trade and other payables 13 878 2 247
Cash generated by operations 100 254 18 052
Investment income from operations received 6 739 5 413
Interest paid (5 265) (5 536)
Dividends received 10 344 6 630
Taxation (refunded)/ paid (105) 465
Net cash flow from operating activities 111 967 25 024
CASH FLOWS FROM INVESTING ACTIVITIES
Expansion of property, plant and equipment (3 041) (5 517)
Proceeds from disposal of property, plant and 97 1 606
equipment
Purchases of intangible assets (169) (392)
Investment income received 3 238 3 284
Proceeds from disposal of investments 3 288 1 805
Investments made (7 120) (167)
Loans and receivables advanced (64 224) (3 241)
Net cash flow from investing activities (67 931) (2 622)
CASH FLOWS FROM FINANCING ACTIVITIES
Interest bearing loans and borrowings raised 30 732 23 315
Interest bearing loans and borrowings repaid - (11 750)
Movement in treasury shares 624 103
Dividends paid (2 138) (2 004)
Net cash flow from financing activities 29 218 9 664
Net movement in cash and cash equivalents 73 254 32 066
Cash and cash equivalents at beginning of year 90 253 58 187
Cash and cash equivalents at end of year 163 507 90 253
ABRIDGED SUMMARISED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH
2009
Audited Share Revalu- Con- Retained Total
capital ation tingency Income equity
reserve reserve
R`000 R`000 R`000 R`000 R`000
Balance at 1 25 729 17 002 7 199 15 601 65 531
April 2007
Transfer to 103 103
treasury shares
Profit for the 6 697 6 697
year
Transfer to 3 494 (3 494)
contingency
reserve
Dividend (2 004) (2 004)
Balance at 31 25 832 17 002 10 693 16 800
March 2008 70 327
Transfer to 624 624
treasury shares
Profit for the 10 043 10 043
year
Transfer to 6 296 (6 296)
contingency
reserve
Dividend (2 138) (2 138)
Balance at 31 26 456 17 002 16 989 18 409
March 2009 78 856
ABRIDGED SUMMARISED SEGMENTAL ANALYSIS FOR THE YEAR ENDED 31 MARCH 2009
2009 2008
R`000 R`000
SEGMENT REVENUE
Motor retail 258 377 169 933
Furniture retail 51 280 47 034
Insurance & Finance 68 479 53 996
Head Office 11 339 4 908
Eliminations (19 947) (10 642)
Total revenue 369 528 265 229
SEGMENT RESULTS
Motor retail 4 453 6 017
Furniture retail 2 733 2 133
Insurance & Finance 16 517 16 402
Head Office 10 180 13 377
Eliminations (20 672) (25 210)
Total operating profit before financing
costs 13 211 12 719
ACCOUNTING POLICIES
The abridged summarised consolidated annual financial statements have been
prepared in accordance with the recognition and measurement requirements of
International Financial Reporting Standards (IFRSs) and its interpretations
adopted by the International Accounting Standards Board, and the presentation
and disclosure requirements of IAS 34 Interim Financial Reporting. The
accounting policies are consistent with those applied in the consolidated
financial statements for the year ended 31 March 2009.
RELATED PARTIES
The company has a related party relationship with its subsidiaries, fellow
subsidiaries, associates and with its directors and executive officers.
2009 2008
TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL R`000 R`000
Short-term employee benefits 4 854 3 556
TRANSACTIONS WITH RELATED PARTIES
PREMIUMS RECEIVED
Key management personnel and affiliates
Hitech Lasers (Pty) Ltd 988 400
Hitech Laser Systems (Pty) Ltd 375 76
Management Outsource Services (Pty) Ltd - 300
Medilase (Pty) Ltd 422 123
NC Tromp Boerdery - 21
Premier Services (Pty) Ltd 24 47
PJ de W Tromp & Seuns (Pty) Ltd 13 18
WO Fourie - 218
LOANS ADVANCED TO RELATED PARTIES
Key management personnel and affiliates
Aquaries Properties (Pty) Ltd - 86
H & Z Consulting (Pty) Ltd - 82
Swart Family Trust 127 125
ADVANCES INCLUDED IN LOANS AND RECEIVABLES
Key management personnel and affiliates
Aquaries Properties (Pty) Ltd 586 867
H & Z Consulting (Pty) Ltd 49 268
Hartelus Farming (Pty) Ltd 902 1 017
Outsourcing Management Solutions (Pty) Ltd 193 172
Swart Family Trust - 332
Tromp Consulting International (Pty) Ltd 44 263
PREFERENCE SHARES INCLUDED IN LOANS AND RECEIVABLES
Affiliates
Makalani Grapes (Pty) Ltd 5 000 5 000
Suidwesdrukkery Ltd 1 500 1 500
Seasonaire (Pty) Ltd 4 000 4 000
PJ de W Tromp & Seuns (Pty) Ltd 2 000 2 000
COMMITMENTS
Authorised capital expenditure, contracted for but - 567
not provided
The committed expenditure relates to property and
will be financed by internal funds when incurred.
RESPONSIBILITY FOR CONSOLIDATED ANNUAL FINANCIAL STATEMENTS
Appropriate accounting policies supported by reasonable and prudent judgements
have been applied consistently with those of prior year. The annual consolidated
financial statements for the year ended 31 March 2009 have been audited by KPMG
Inc., and their unqualified audit opinion is available for inspection at the
registered office of the company.
CHAIRMAN`S REPORT
Overview
The annual reporting period ended 31 March 2009 was an excellent year for the
Nictus Group, notwithstanding the severe global economic meltdown which
prevailed. The report also stands in direct contrast to my cautious prospects
eluded to in the previous annual report. There was, and still is, unprecedented
volatility in the financial markets, economies slowed down drastically and
confidence was badly shaken. We are however, very fortunate and proud to
announce an all time record performance of the Group and out performance in
almost all segments of our business. What is further very pleasing is that the
reported profit was primarily derived from operations and not from revaluations
or other non-operating profits.
The following summary of our financial performance highlights the above.
- Revenue increased 39.3% to R370 million.
- Profit for the year increased by R3.3 million to R10 million.
- Return on equity was 12.7%.
- Headline earnings increased by 46.2% to 19.04 cents per share.
- The Group`s asset base increased 38.6% and now stands at R628 million.
- The cash position of the Group improved by R73 million to R164 million.
- Capital and reserves grew by R9 million to R79 million.
- Net asset value per share increased to 149.03 cents per share.
The results are remarkable in light of the prevailing economic conditions, and
were primarily possible due to the following factors:
- Up to the fiscal year end the Namibian economy, which still provides the
largest portion of the Group`s income, was not as severely affected by the
global economic meltdown due to various factors and cautious decisions
taken by the Namibian Government.
- The entrepreneurship and good judgment of the Executive Committee of our
Motor segment identified and utilised the overstocked position of our
suppliers to our mutual benefit. This performance was in contrast to most
motor dealers in Namibia and the Republic of South Africa (RSA).
- The dedication and good marketing efforts of the Insurance and Finance
Executive Committee and its team, in Namibia and the RSA, and greater
acceptance of our alternative insurance product resulted in the largest
premiums written in any financial year. The high level of renewal of
existing policies and recurring premiums also proved the trust of our
Policy Holders in our Group.
- The Group`s consolidation and elimination of non-performing investments in
the previous years enabled us to concentrate on the core business during
this fiscal period.
- Although our Executive Management has always been dedicated, the take-up of
a sizable shareholding by them and other personnel had a further positive
impact on our ownership principle and cohesion of the executive management.
- The upgrading of the facilities of the Furniture and Retail segment in the
previous years created an environment that enabled this segment to
outperform expectations in the depressed market. The consistent application
of our policies regarding the debtor`s book avoided major write-offs and
future excessive risks of bad debt.
- As I have regularly remarked on in the past, the lag performance between
the Namibian and RSA economies, again stood us in good stead in this
reporting period. For this reason it remains one of the priorities of the
board to grow our South African operations, within our limits, to enable us
to take full benefit of these circumstances , when it happen.
The future and prospects
Your board is well aware that although the Namibian economy was spared, the
current collapse of the global economies the risk of further turmoil has not
dissipated. The Namibian economy, due to its dynamics and small comparative
size, might still be adversely affected by a prolonged possible recovery in
global commodity markets on which Namibian exports are largely depended. The
Institute for Public Policy Research (Namibia) in its Feb 2009 Business Climate
Monitor commented that the "Economic growth forecast remains bleak for the
remainder of the year with estimates still hovering around +/-1%". The Institute
further commented in its March 2009 paper that "Namibia`s prospects will be
dimmed by the current crises: development targets will be harder to reach,
export-driven growth will be undercut, the growth in the economy will slow down
and un-employment will rise". They however feel that Namibia is better placed to
ride out some of the worst effects of the storm.
Backed by these comments, the early signs of a possible slow recovery in the
world economy, possible recovery of confidence in the RSA economy and the
expected stimulus the soccer world cup might bring, we expect the Group to
sustain its present performance in the coming fiscal year.
The recent and expected cuts in interest rates by both Governments should impact
positively on the results of our furniture retail business. The lower interest
rates will impact negatively on our Insurance and Finance segment`s investment
income. We expect to maintain our margins on our Insurance business despite the
lower interest rates. The increased focus on risk awareness by potential clients
will benefit our Insurance products which are designed and regularly updated, to
specifically address their needs.
We expect our motor segment to be hard pressed to repeat its good performance,
in the current economic climate, due to the reduced availability of the
appropriate stock from our suppliers and the possible cutback on certain
models.The board`s continued responsible management of our capital to the
benefit of our Policy- and Shareholders remain a priority.
Business Model Change
After careful consideration the Board decided that the most appropriate model
for Nictus Ltd was to act as an investment company. All subsidiary companies
will be treated as investments which need to perform according to set investment
criteria. This change was supported by the previous decision of the board to
have a separate Board and Executive Committee for each subsidiary that takes
full responsibility for its operations.
The board believes that this model will enhance its philosophy of "Taking
ownership", by the executive and senior management, but without the fear of
loss of cohesion and developing competing silos due to the comparatively sizable
stake the management now have in Nictus Ltd.
Directorate and Management
Prof. S Laubscher resigned from the board during December 2008 due to other
commitments, which demanded more of his time. His contribution will be surely
missed and we wish him well for the future.
In order to align itself with the suggestions in the King 3 report and the new
Companies Act, the board will shortly make appointments in this regard.
The board has also recently restructured internal audit as an independent
function.
Corporate Governance
"A clear conscience fears no accusation" - Sierra Leone.
The recent unprecedented corporate governance failures make it inevitable for
all enterprises, and in our particular business operations, to truly live and
practice the principles of corporate governance. We are committed to be
transparent and accountable in all spheres of business and uphold integrity.
The Group complies with the various IFRS`s and JSE listing requirements.
Dividend
Notwithstanding the outstanding performance achieved by the Group, the board
decided to remain in line with its dividend policy of three times cover, and
approved a final dividend of 6.25 cents per share.
Appreciation
I wish again to thank my fellow board members for their continued support during
this year. We also express our appreciation to our shareholders, customers,
suppliers, external auditors and other stakeholders for their support in
achieving these results. A special thanks and appreciation goes to our Group
Chief Executive, Nico Tromp, the other executive directors, management and
personnel for the exceptional results they achieved. I am well aware of their
untiring effort and dedication this past year. It is a job well done.
What we achieved this year and what we have planned for the coming fiscal year
is eventually depended on the Grace of God Almighty.
JL Olivier
Chairman: Nictus Group
GROUP CHIEF EXECUTIVE`S REPORT
Overview
It gives me great pleasure to announce, on behalf of management, that the past
year`s performance has been satisfactory. Strategy implemented over the past
eight years achieved exceptional results for the financial year under review. We
have succeeded in developing the risk profile of the Group to a level where we
believe we can weather the existing global turmoil.
The acceleration of global economic uncertainty, and in the SADC region, had a
positive effect on the group results during the past year. During times of
uncertainty and crisis, consumers seek certainty, and value. The Group delivered
both of these.
The continued focus on service delivery, marketing, relationship management and
synergies within the Group paid dividends and created shareholder wealth.
Financial performance was pleasing as all business segments out-performed
expectations.
Financial overview
The details of the results are reflected in the Chairman`s Report and annual
financial statements.
Segmental performance
Most segments performed significantly better during the current year. The
culmination of the strategies implemented over the last number of years is a
major contributor to the success of the year under review.
Furniture segment
Turnover in the furniture segment increased by 9%. The unprofitable carpet
division was closed during the prior year. The results have been included in the
prior year`s figures.
Operating profit was maintained, notwithstanding the closure of the carpet
division. We expect a sustainable growth in turnover for the coming year in this
segment.
Motor segment
Turnover in the motor segment increased substantially by 52%. Due to the
contraction in the economy in South Africa, and subsequent availability of
inventory from our supplier, we were able to increase our car park in Namibia.
We expect this segment to find it difficult to repeat the past year`s
performance due to prevailing economic conditions.
Insurance and finance segment
Our insurance segment once again performed well, with an increase of 65% in
gross written premiums. The South African subsidiary is building up momentum. We
were able to broaden our customer base in South Africa and Namibia. The higher
interest rates for the major part of the financial year impacted positively on
the results of this segment.
We expect to maintain our present performance in this segment during the coming
year.
Growth strategy
Strategically our objectives remain unchanged, and the Group will strive to
increase sales from existing profit centres. The Group is driving customer
retention and acquisition, and will maintain the quality of all debtors` books.
Product sourcing will be expanded as we try to maximise this competitive
advantage. Organic growth has always been our preferred strategy. We expect
considerable consolidation in the coming year in our industries and our Group,
due to the global economic downturn.
Human capital
Focus on human resource management has paid off handsomely for the Group.
Management monitors the development of human capital in the Group on an ongoing
basis. Demand for skilled and experienced people is fierce in the current
environment. The Group has a policy of preserving its human capital and
therefore this must be matched by prudent remuneration allocation.
Outlook
Trading conditions are expected to remain tough, while external factors such as
oil prices and food inflation affects our target markets. However we have an
experienced management team that has traded successfully in periods of downturn
in the past. I have every confidence in their ability to lead the business in
the current environment. Brand loyalty plays an increasing role in challenging
times, and the Group has a portfolio of well established brands with a loyal
customer base.
Appreciation
In closing, I would like to pay tribute to the contribution of our staff and
management who take so much pride in belonging to the Nictus Group. Thank you to
our stakeholders, suppliers, business partners, the investment and financial
community and the media for your support.
We are committed to serving our customers and thank them for the loyalty they
continue to show towards our brands.
N.C. Tromp
Group Chief Executive
DECLARATION OF ORDINARY DIVIDEND
The board has declared a final dividend of 6.25 cents per share to ordinary
shareholders of the Company for the year ended 31 March 2009.
The salient dates of this dividend are:
Last day to trade "cum" the dividend Friday, 17 July 2009
Shares commence trading "ex" the dividend
from the commencement of business on Monday, 20 July 2009
Record date Friday, 24 July 2009
Payment date Monday, 27 July 2009
Share certificates may not be dematerialised or rematerialised between Monday 20
July 2009 and Friday 24 July 2009 both days inclusive.
Shareholders are furthermore advised that a 10% non-resident shareholder`s tax
on the declared dividend will be applicable to all shareholders with addresses
outside of Namibia.
By order of the board
ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING
As the annual report for the year ended 31 March 2009 ("the annual report") was
posted to shareholders within 3 months of Nictus`s year end, this announcement
is not required to appear in the press and will not be sent to shareholders.
The annual report contains a notice convening the annual general meeting of
Nictus shareholders for the year ended 31 March 2009 ("the AGM"). The AGM will
be held in the boardroom at the Nictus Building, corner of Pretoria and Dover
Street, Randburg, Gauteng on Tuesday 17th of August 2009 at 15h00.
J L Olivier
Chairman
26 June 2009
Date: 26/06/2009 16:32:01 Produced by the JSE SENS Department.
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