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CML
CML
CML - Coronation Fund Managers Limited - Reviewed interim results for the six
months ended 31 March 2011
Coronation Fund Managers Limited
(Incorporated in the Republic of South Africa)
Registration number: 1973/009318/06
JSE share code: CML
ISIN: ZAE000047353 ("Coronation")
Reviewed interim results for the six months ended 31 March 2011
Assets under management of R231 billion
Diluted headline earnings per share of 81.7 cents
Interim dividend per share of 80 cents
Coronation Fund Managers produced another set of exceptional results for the
six months to 31 March 2011. The FTSE/JSE All Share Index closed the period
just 3% off its May 2008 peak, however this masks high levels of volatility
driven by significant global events in the first quarter of 2011. The local
market returned 10.7% for the six-month period, while the MSCI World and MSCI
Emerging Markets Indices returned 14.4% and 9.6% (in dollar terms)
respectively. During this time Coronation produced outstanding investment
performance across all client portfolios.
Enquiries:
Coronation Fund Managers: 021 680 2000
Hugo Nelson, CEO: 021 680 2041
Anton Pillay, COO: 021 680 2480
John Snalam, CFO: 021 680 2094
CapitalVoice
Johannes van Niekerk: 082 921 9110
Results
Revenue has increased by 32% to R865 million. This has resulted in a 32%
increase in profit for the period to R299 million, and growth in diluted
headline earnings per share of 26% to 81.7 cents (March 2010: 64.8 cents).
Assets under management
Strong inflows, particularly to the retail business, excellent stock picking
and asset allocation, combined with a positive market environment to increase
assets under management to R231 billion (September 2010: R203 billion -
restated).
Long-term performance
Our philosophy of investing with a long time horizon continued to generate
alpha that resulted in strong investment returns for all our clients. This
consistency of performance was recognised in our being named Best Large Fund
House at the FM/Morningstar South Africa Awards.
- Both our domestic balanced and global balanced portfolios ranked 1st over
three years and 2nd over five years in the Alexander Forbes SA and Global
Large Manager Watch Surveys respectively to end March 2011. Likewise, our
flagship multi-asset Coronation Balanced Plus Fund was the no.?1 balanced
unit trust fund in the country for the five-year period to end March, ranked
by Morningstar. The fund has outperformed its market-related benchmark by
2.4% per annum since inception in April 1996.
- For individual investors seeking long-term capital growth, our concentrated
equity fund, Coronation Top 20 has outperformed its market benchmark by an
impressive 7% per annum since inception in October 2000. Our flagship
absolute fund, Coronation Capital Plus continued to deliver on its dual
objective of income and growth, outperforming inflation by an annualised 8.6%
since inception in July 2001. Similarly, our lower risk options produced
strong returns: Coronation Balanced Defensive was the no.?1 conservative fund
in the country for the year to end March 2011, and our flagship fixed
interest fund, Coronation Strategic Income has beaten cash by 2.4% per annum
since inception in July 2001.
International
Global markets corrected in March 2011, which created the opportunity to add
to positions where we see value. Since inception in July 2000, the
institutional portfolio Coronation Global Equity Fund of Funds has
outperformed the MSCI World Index by 2.3% per annum net of all fees. The
Coronation Global Capital Plus Fund has outperformed its global cash
benchmark by 9.3% per annum gross of all fees since inception in September
2009.
Within our specialist units, the Coronation Global Emerging Markets Fund
ranked no.?2 in its peer group of 42 funds to end March 2011. Launched almost
three years ago in July 2008, the fund has outperformed the MSCI Emerging
Markets Index by 7.8% per annum gross of all fees. Despite the heightened
challenges inherent in Africa, our Africa portfolios attracted great interest
from investors over the period and continue to build a strong performance
track record. Since inception in October 2008, the Coronation Africa
Frontiers Fund has outperformed the FTSE/JSE Africa Top 30 Ex SA Index by
30.1% per annum gross of all fees.
Interim cash dividend
We continue to reward shareholders through regular and significant
distributions of free cash flow generated. We endeavour to distribute at
least 75% of after-tax cash profit. Taking into account projected cash
requirements, we have increased the interim dividend to 80 cents per share
for the period.
In compliance with the Listings Requirements of the JSE Limited, the
following dates are applicable:
Last day to trade: Friday, 3 June 2011
Shares trade ex dividend: Monday, 6 June 2011
Record date: Friday, 10 June 2011
Payment date: Monday, 13 June 2011
Share certificates may not be dematerialised or rematerialised between
Monday, 6 June 2011, and Friday, 10 June 2011, both dates inclusive.
Prospects
Our philosophy of investing for the long term supports the sustainability of
our business through the investment cycle. The past 18 months have been
exceptional for our business and we therefore caution against future revenue
growth expectations. The investment environment is likely to remain
challenging in the foreseeable future, but we believe the best way of adding
value to all our stakeholders is by staying singularly focused.
External audit review
The external auditors, Ernst & Young Inc., reviewed the condensed statement
of financial position of Coronation Fund Managers Ltd Group as at 31 March
2011 and the related condensed statement of comprehensive income, changes in
equity and cash flows for the six-month period then ended, and other
explanatory notes, from which this information has been extracted. The review
has been conducted in accordance with the International Standard on Review
Engagements 2410. Copies of the unqualified report of Ernst & Young Inc. is
available for inspection at the registered office of the company.
Shams Pather
Chairman
Hugo Nelson
Chief Executive Officer
Anton Pillay
Chief Operating Officer
Cape Town
17 May 2011
Condensed consolidated statement of comprehensive income
Six months Six months Full year
reviewed reviewed audited
31 March 31 March 30 Sept
2011 2010 % 2010
R`000 R`000 Change R`000
Fund management activities
Revenue 864 716 654 825 32% 1 351 979
Other income 18 381 1 730 3 814
Operating expenses (445 789) (338 006) 32% (717 646)
Share-based payment expense (2 061) (9 588) (14 059)
Other expenses (443 728) (328 418) (703 587)
Results from operating 437 308 318 549 37% 638 147
activities
Finance and dividend income 4 638 13 655 21 480
Finance expense (3 160) (5 250) (8 851)
Net finance costs 1 478 8 405 12 629
Share of profit of associate - -
(net of tax) 1 173
Profit from fund management 439 959 326 954 35% 650 776
Income attributable to 9 583 34 583
policyholder linked assets and 19 998
investment partnerships
Net fair value gains on 18 296 49 191
policyholder and investment 28 199
partnership financial
instruments
Administration expenses borne (8 713) (14 608)
by policyholders and investors (8 201)
in investment partnerships
Profit before income tax 449 542 346 952 685 359
Income tax expense (150 455) (120 421) (244 983)
Taxation on shareholder (140 872) (100 423) (210 400)
profits
Taxation on policyholder (9 583) (19 998) (34 583)
investment contracts
Profit for the period 299 087 226 531 32% 440 376
Other comprehensive income
Foreign currency translation 1 153 (10 268)
differences for foreign (1 318)
operations
Net change in fair value of 1 745 683
available-for-sale financial (2 631)
assets
Net change in fair value of - (9)
available-for-sale financial -
assets transferred to profit
or loss
Other comprehensive 2 898 (9 594)
income/(expense) for the (3 949)
period (net of income tax)
Total comprehensive income for 301 985 222 582 430 782
the period
Profit attributable to:
- equity holders of the 298 842 223 997 33% 437 108
company
- non-controlling interest 245 2 534 3 268
Profit for the period 299 087 226 531 440 376
Total comprehensive income
attributable to:
- equity holders of the 301 740 220 048 37% 427 514
company
- non-controlling interest 245 2 534 3 268
Total comprehensive income for 301 985 222 582 430 782
the period
Earnings per share (cents)
- basic 94.9 71.2 33% 138.9
- diluted 86.9 64.8 34% 127.9
Note to the statement of
comprehensive income
Headline earnings per share
(cents)
- basic 89.2 71.2 25% 138.9
- diluted 81.7 64.8 26% 128.0
Dividend per share (cents)
- interim 80 51.0 57% 51.0
- final 76.0
Condensed consolidated statement of financial position
Reviewed Reviewed Audited
31 March 31 March 30 Sept
2011 2010 2010
R`000 R`000 R`000
Assets
Goodwill and intangible assets 1 087 772 1 097 309 1 097 309
Equipment 13 925 14 133 13 993
Deferred tax asset 2 496 4 309 4 900
Investments backing policyholder funds 27 379 486 21 301 229 23 930 963
and investments held through investment
partnerships
Investment securities 28 965 26 168 28 274
Investment in associate 30 147 - -
Trade and other receivables 289 820 305 454 227 006
Cash and cash equivalents 148 147 108 521 300 638
Total assets 28 980 758 22 857 123 25 603 083
Liabilities
Interest-bearing borrowing 64 300 98 144 82 000
Deferred tax liabilities 22 548 19 994 22 528
Policyholder investment contract 27 357 188 21 281 235 23 908 436
liabilities and liabilities to holders of
interests in investment partnerships
Income tax payable 44 625 45 313 3 215
Trade and other payables 193 261 214 406 337 759
Total liabilities 27 681 922 21 659 092 24 353 938
Net assets 1 298 836 1 198 031 1 249 145
Equity
Total equity attributable to equity 1 297 417 1 188 063 1 238 443
holders of the company
Non-controlling interest 1 419 9 968 10 702
Total equity 1 298 836 1 198 031 1 249 145
Condensed consolidated statement of cash flows
Six months Six months Full year
reviewed reviewed audited
31 March 31 March 30 Sept
2011 2010 2010
R`000 R`000 R`000
Cash flows from operating activities
Profit for the period 299 087 226 531 440 376
Income tax expense 150 455 120 421 244 983
Non-cash and other adjustments (15 523) (1 309) (801)
Operating profit before changes in working 434 019 345 643 684 558
capital
Working capital changes (206 142) (89 520) 73 507
Cash generated from operations 227 877 256 123 758 065
Interest paid (4 193) (5 701) (9 685)
Taxation paid (106 621) (95 275) (259 992)
Net cash from operating activities 117 063 155 147 488 388
Net cash from investing activities 1 485 3 175 48 686
Cash flows from financing activities (272 192) (126 081) (303 766)
- dividends to shareholders (243 494) (119 400) (280 940)
- other (28 698) (6 681) (22 826)
Net (decrease)/increase in cash and cash
equivalents (153 644) 32 241 233 308
Cash and cash equivalents at beginning of
period 300 638 77 598 77 598
Exchange rate adjustments 1 153 (1 318) (10 268)
Cash and cash equivalents at end of period
148 147 108 521 300 638
Consolidated statement of changes in equity
R`000 Share Foreign Retained Share-
capital and currency earnings based
premium translation payment
reserve reserve
Balance at 30 September 255 039 10 687 677 751 130 313
2009
Total comprehensive
income for the period
Profit for the period 223 997
Other comprehensive
income
Currency translation (1 318)
differences
Revaluation of
available-for-sale
financial assets
- Net change in fair
value
Total other - (1 318) - -
comprehensive income
Total comprehensive - (1 318) 223 997 -
income for the period
Transactions with
owners recorded
directly to equity
Share-based payments 9 588
Transfer to retained 26 509 (26 509)
earnings
Dividends paid (118 096)
Shares issued 868
Increase in equity of
subsidiary
Total transactions with 868 - (91 587) (16 921)
owners
Balance at 31 March 255 907 9 369 810 161 113 392
2010
Total comprehensive
income for the period
Profit for the period 213 111
Other comprehensive
income
Currency translation (8 950)
differences
Revaluation of
available-for-sale
financial assets
- Net change in fair
value
- Reclassified to
profit or loss on
disposal
Total other (8 950)
comprehensive income
Total comprehensive (8 950) 213 111 -
income for the period
Transactions with
owners recorded
directly to equity
Share-based payments 4 471
Transfer to retained 4 304 (4 304)
earnings
Dividends paid (161 557)
Total transactions with - - (157 253) 167
owners
Balance at 30 September 255 907 419 866 019 113 559
2010
Total comprehensive
income for the period
Profit for the period 298 842
Other comprehensive
income
Currency translation 1 153
differences
Revaluation of
available-for-sale
financial assets
- Net change in fair
value
Total other 1 153
comprehensive income
Total comprehensive 1 153 298 842 -
income for the period
Transactions with
owners recorded
directly to equity
Share-based payments 2 061
Transfer to retained 311 (311)
earnings
Dividends paid (243 254)
Imvula units acquired (1 573)
by the Imvula Trust
Loss of control of
subsidiary
Total transactions with - - (244 516) 1 750
owners
Balance at 31 March 255 907 1 572 920 345 115 309
2011
Consolidated statement of changes in equity (continued)
R`000 Revalu- Issued Non- Total
ation capital and controlling equity
reserve reserves interest
attributable
to equity
holders
of the
company
Balance at 30 September 1 865 1 075 655 8 289 1 083 944
2009
Total comprehensive
income for the period
Profit for the period 223 997 2 534 226 531
Other comprehensive
income
Currency translation (1 318) (1 318)
differences
Revaluation of available-(2 631) (2 631) (2 631)
for-sale financial
assets
- Net change in fair (2 631) (2 631) (2 631)
value
Total other (2 631) (3 949) - (3 949)
comprehensive income
Total comprehensive (2 631) 220 048 2 534 222 582
income for the period
Transactions with owners
recorded directly to
equity
Share-based payments 9 588 9 588
Transfer to retained - -
earnings
Dividends paid (118 096) (1 305) (119 401)
Shares issued 868 868
Increase in equity of - 450 450
subsidiary
Total transactions with - (107 640) (855) (108 495)
owners
Balance at 31 March 2010 (766) 1 188 063 9 968 1 198 031
Total comprehensive
income for the period
Profit for the period 213 111 734 213 845
Other comprehensive
income
Currency translation (8 950) (8 950)
differences
Revaluation of available-3 305 3 305 3 305
for-sale financial
assets
- Net change in fair 3 314 3 314 3 314
value
- Reclassified to profit (9) (9) (9)
or loss on disposal
Total other 3 305 (5 645) (5 645)
comprehensive income
Total comprehensive 3 305 207 466 734 208 200
income for the period
Transactions with owners
recorded directly to
equity
Share-based payments 4 471 4 471
Transfer to retained - -
earnings
Dividends paid (161 557) - (161 557)
Total transactions with - (157 086) - (157 086)
owners
Balance at 30 September 2 539 1 238 443 10 702 1 249 145
2010
Total comprehensive
income for the period
Profit for the period 298 842 245 299 087
Other comprehensive
income
Currency translation 1 153 1 153
differences
Revaluation of available-1 745 1 745 1 745
for-sale financial
assets
- Net change in fair 1 745 1 745 1 745
value
Total other 1 745 2 898 2 898
comprehensive income
Total comprehensive 1 745 301 740 245 301 985
income for the period
Transactions with owners
recorded directly to
equity
Share-based payments 2 061 2 061
Transfer to retained - -
earnings
Dividends paid (243 254) (103) (243 357)
Imvula units acquired by (1 573) (1 573)
the Imvula Trust
Loss of control of (9 425) (9 425)
subsidiary
Total transactions with - (242 766) (9 528) (252 294)
owners
Balance at 31 March 2011 4 284 1 297 417 1 419 1 298 836
Earnings per share
Six months Six months Full year
reviewed reviewed audited
31 March 31 March 30 Sept
2011 2010 2010
Weighted average number of ordinary
shares in issue during the period 314 819 192 314 646 591 314 733 128
Weighted average number of ordinary
shares potentially in issue 349 391 630 347 731 074 348 848 803
R`000 R`000 R`000
Earnings attributable to shareholders 299 087 226 531 440 376
Non-controlling interest (245) (2 534) (3 268)
Earnings attributable to ordinary
shareholders 298 842 223 997 437 108
Loss on disposal of financial assets
available-for-sale - 107
Profit on disposal of equipment - (7)
Gain on loss of control of subsidiary (18 131)
Headline earnings attributable to
ordinary shareholders 280 711 223 997 437 208
Actual number of shares in issue at the
end of the period 314 819 192 314 819 192 314 819 192
Condensed consolidated segment report
Africa
Six months
R`000
reviewed Audited
31 March 30 Sept
2011 2010 2010
Segment external revenue 773 226 582 076 1 219 401
Segment income before tax and finance 379 039 288 945 563 118
income/expense
Condensed consolidated segment report (continued)
International
Six months
reviewed Audited
31 March 30 Sept
R`000 2011 2010 2010
Segment external revenue 91 490 72 749 132 578
Segment income before tax and finance
income/expense 39 888 27 874 71 215
Condensed consolidated segment report (continued)
Group
Six months
reviewed Audited
31 March 30 Sept
R`000 2011 2010 2010
Segment external revenue 864 716 654 825 1 351 979
Segment income before tax and finance
income/expense 418 927 316 819 634 333
Notes to the condensed consolidated financial statements
1. Basis of preparation and accounting policies
The financial information has been prepared in accordance with IAS 34 Interim
Financial Reporting, the requirements of the South African Companies Act, Act
61 of 1973, as amended, and the Listings Requirements of the JSE Limited
(JSE). The condensed consolidated financial statements do not include all of
the information required for full annual financial statements.
The accounting policies applied in the presentation of the condensed
consolidated financial statements are consistent with those applied for the
year ended 30 September 2010.
These condensed consolidated financial statements have been prepared in
accordance with the historical cost convention except for certain financial
instruments which are stated at fair value. The condensed consolidated
financial statements are presented in rand, rounded to the nearest thousand.
2. Related party transactions
The group, in the ordinary course of business, entered into various sale and
purchase transactions on an arm`s length basis at market rates with related
parties.
3. Investment in associate
On 1 October 2010 Coronation disposed of 6.8% of its effective shareholding
in Namibia Asset Management Limited and has equity accounted for its 48.05%
shareholding from that date. As a result of this disposal, a gain on
revaluation of this investment in associate of R18.13 million was recognised
in the income statement in accordance with IFRS 3 Business Combinations.
Directors:
S Pather (Chairman)*, H A Nelson (CEO), J G February*, J D McKenzie*,
A C Pillay (COO), A Watson* (* Independent Non-Executive)
Registered office:
7th Floor, MontClare Place
Cnr Campground and Main Roads
Claremont 7708, Cape Town
Postal address:
PO Box 44684, Claremont 7735, Cape Town
Transfer secretaries:
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg 2001
Website: www.coronation.com
Cape Town
17 May 2011
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 17/05/2011 07:05:01 Produced by the JSE SENS Department.
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