| Tue 8 Nov 2011, 7:05 | | CML - Coronation Fund Managers Limited - Reviewed preliminary |
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CML
CML
CML - Coronation Fund Managers Limited - Reviewed preliminary
financial results for the year ended 30 September 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 preliminary financial results for the year ended 30 September 2011
Assets under management of R247 billion, up 21%
Diluted headline earnings per share of 176 cents, up 38%
Total dividend per share of 172 cents, up 35%
Despite extreme volatility across markets, Coronation delivered another set
of excellent results for the year to 30 September 2011. While emerging
markets sold off substantially in the second half of the year (MSCI Emerging
Markets Index -23.3% for the six months and -15.9% for the year in US dollar
terms), the FTSE/JSE All Share Index managed to return 3.6% for the year.
The rand slid 20% against the US dollar in the final quarter to close at
R/USD8.09 and the MSCI World Index recorded -3.8% (in US dollar terms).
Notwithstanding this backdrop, the business continued to produce outstanding
long-term investment performance and attract significant flows over the
period. In particular, the increase in market share to 9.9% (September 2010:
7.5%) of long-term funds by the retail business takes us from 3rd to 2nd
largest long-term fund manager in the country.
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 increased by 34% to R1.7 billion (2010: R1.3 billion). Together with
a continued focus on cost control measures, this resulted in a 42% increase
in profit for the period to R624 million; and growth in diluted headline
earnings per share of 38% to 176 cents (September 2010: 128 cents).
Long-term performance
Assets under management increased by 21% to R247 billion (September 2010:
R203.5 billion) on the strength of our long-term track record of excellent
stock picking and asset allocation. Our investment philosophy of finding
long-term value ignores the short-term noise, allowing us to seek out
quality businesses that will deliver solid returns for clients over time.
- Our institutional domestic and global balanced portfolios ranked 1st over
3 years and 2nd over 5 years in the Alexander Forbes (AF) SA and Global
Large Manager Watch surveys respectively to end September. Within the
absolute product range our global portfolios ranked 1st over 3 and 5 years
in the AF Conservative Global Manager Watch Survey.
- The consistent performance delivered by our unit trust funds resulted in
Coronation being named Best Large Fund House at the 2011 Morningstar South
Africa Awards. This accolade was supported by the top quartile performance
across our domestic flagship fund range over 3, 5, 10 years and since their
respective launch dates to end September. Highlights include Coronation
Balanced Plus, which was the no.1 balanced fund in South Africa over 5 years
and since launch in 1996, and the Coronation Balanced Defensive Fund which
was the no.1 conservative fund over 3 years and since launch in 2007, as
ranked by Morningstar. Furthermore, our concentrated equity fund, Coronation
Top 20, continued to outperform its benchmark with an impressive 7% per
annum since launch in 2000.
International
While heightened levels of risk aversion left no market unscathed, our long-
term investment track record across the fund range remained strong. Our
longest running international unit trust, Coronation World Equity (ZAR) Fund
of Funds, has outperformed the MSCI World Index by 2.1% per annum (in US
dollars net of all fees) since launch in 1997. The Coronation Global
Emerging Markets Fund has outperformed the MSCI Emerging Markets Index by
6.8% per annum (gross of all fees) since launch in 2008, and the Coronation
Africa Frontiers Fund has outperformed its benchmark by 5.4% per annum
(gross of all fees) also since launch in 2008.
Our commitment to clients
As one of the largest managers of third-party assets in the country, our
first priority is to consistently deliver the best possible returns across
all client mandates. To achieve this it is imperative that our business does
not grow to a level that impedes our ability to deliver outperformance. In
the interests of this objective, in May we communicated our pre-emptive
decision to close our specialist South Africa equity mandates to new
institutional investors effective 31 March 2012.
Final 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 final dividend to 92 cents per share.
Together with the interim dividend of 80 cents per share, this amounts to a
total dividend of 172 cents per share for the year.
In compliance with the Listings Requirements of the JSE Limited (JSE), the
following dates are applicable:
Last day to trade Friday, 25 November 2011
Shares trade ex dividend Monday, 28 November 2011
Record date Friday, 2 December 2011
Payment date Monday, 5 December 2011
Share certificates may not be dematerialised or rematerialised between
Monday, 28 November 2011, and Friday, 2 December 2011, both dates inclusive.
Prospects
Over the past year we have experienced considerable growth and produced
strong returns for all stakeholders. Looking ahead the implications of the
ongoing global economic turmoil on financial markets are sobering, creating
a highly challenging investment environment for some years to come. Our
focus will continue to be on delivering trusted investment performance, and
over the next year we will seek to consolidate our institutional business
and nurture our retail and international franchises.
External audit review
The external auditors, Ernst & Young Inc., reviewed the condensed statement
of financial position of Coronation Fund Managers Limited Group as at 30
September 2011 and the related condensed statement of comprehensive income,
changes in equity and cash flows for the 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. are available for inspection at the registered office of the company.
Shams Pather Hugo Nelson Anton Pillay
Chairman Chief Executive Officer Chief Operating Officer
Cape Town
8 November 2011
Condensed consolidated statement of comprehensive income
Restated
Reviewed Audited
30 Sept 30 Sept
2011 % 2010
R`000 Change R`000
Fund management activities
Revenue (see note 2) 1 725 910 34 1 290 887
Other income 21 407 3 814
Operating expenses (838 056) 28 (656 554)
Share-based payment expense (4 856) (14 059)
Other expenses (see note 2) (833 200) (642 495)
Results from operating activities 909 261 42 638 147
Finance and dividend income 12 263 21 480
Finance expense (5 262) (8 851)
Share of income of equity accounted 2 365 -
investee
Profit from fund management 918 627 41 650 776
Income attributable to policyholder linked 19 518 34 583
assets and investment partnerships
Net fair value gains on policyholder and 34 431 49 191
investment partnership financial
instruments
Administration expenses borne by (14 913) (14 608)
policyholders and investors in investment
partnerships
Profit before income tax 938 145 685 359
Income tax expense (314 295) (244 983)
Taxation on shareholder profits (294 777) (210 400)
Taxation on policyholder investment (19 518) (34 583)
contracts
Profit for the year 623 850 42 440 376
Other comprehensive income 19 890 (9 594)
Foreign currency translation differences 20 627 (10 268)
for foreign operations
Net change in fair value of available-for- (737) 683
sale financial assets
Net change in fair value of available-for- - (9)
sale financial assets reclassified to
profit or loss
Total comprehensive income for the year 643 740 430 782
Profit attributable to:
- equity holders of the company 623 977 43 437 108
- non-controlling interest (127) 3 268
Profit for the year 623 850 440 376
Total comprehensive income attributable to
- equity holders of the company 643 867 51 427 514
- non-controlling interest (127) 3 268
Total comprehensive income for the year 643 740 430 782
Earnings per share (cents)
- basic 198.2 43 138.9
- diluted 181.3 42 127.9
Note to the statement of comprehensive income
Headline earnings per share (cents)
- basic 192.4 39 138.9
- diluted 176.1 38 128.0
Dividend per share (cents)
- interim 80.0 57 51.0
- final 92.0 21 76.0
Diluted number of shares (thousand)
Reviewed Audited
30 Sept 30 Sept
2011 2010
Weighted average number of shares in issue 314 819 314 733
Shares to be issued
- BEE transaction 34 693 34 116
Diluted weighted average number of shares in issue 349 512 348 849
Consolidated statement of changes in equity
R`000 Share Foreign Retained Share-
capital currency earnings based
and translation payment
premium reserve reserve
Balance at 30 September 2009 255 039 10 687 677 751 130 313
Total comprehensive income for
the year
Profit for the year 437 108
Other comprehensive income
Currency translation differences (10 268)
Revaluation of financial assets
available-for-sale
- Net change on fair value
- Reclassified to profit or loss
on disposal
Total other comprehensive income - (10 268) - -
Total comprehensive income for - (10 268) 437 108 -
the year
Transactions with owners
recorded directly in equity
Share-based payments 14 059
Transfer to retained earnings 30 813 (30 813)
Dividends paid (279
653)
Shares issued 868
Increase in equity of subsidiary
Total transactions with owners 868 - (248 (16 754)
840)
Balance at 30 September 2010 255 907 419 866 019 113 559
Total comprehensive income for
the year
Profit for the year 623 977
Other comprehensive income
Currency translation differences 20 627
Revaluation of financial assets
available-for-sale
- Net change on fair value
Total other comprehensive income - 20 627 - -
Total comprehensive income for - 20 627 623 977 -
the year
Transactions with owners
recorded directly in equity
Share-based payments 4 856
Transfer to retained earnings
Dividends paid (495 111)
Imvula units acquired by the Imvula Trust (2 274)
Loss of control of subsidiary
Increase in equity of subsidiary
Total transactions with owners - - (497 4 545
074)
Balance at 30 September 2011 255 907 21 046 992 922 118 104
Consolidated statement of changes in
equity (continued)
Revaluati Issued Non- Total
on capital controlling equity
reserve and interest
reserves
attributab
le to
equity
holders of
the
company
R`000
Balance at 30 September 1 865 1 075 655 8 289 1 083
2009 944
Total comprehensive income
for the year
Profit for the year 437 108 3 268 440 376
Other comprehensive income
Currency translation (10 268) (10 268)
differences
Revaluation of financial 674 674 674
assets available-for-sale
- Net change on fair value 683 683 683
- Reclassified to profit or (9) (9) (9)
loss on disposal
Total other comprehensive 674 (9 594) - (9 594)
income
Total comprehensive income 674 427 514 3 268 430 782
for the year
Transactions with owners
recorded directly in equity
Share-based payments 14 059 14 059
Transfer to retained - -
earnings
Dividends paid (279 653) (1 305) (280
958)
Shares issued 868 868
Increase in equity of 450 450
subsidiary
Total transactions with - (264 726) (855) (265
owners 581)
Balance at 30 September 2 539 1 238 443 10 702 1 249
2010 145
Total comprehensive income
for the year
Profit for the year 623 977 (127) 623 850
Other comprehensive income
Currency translation 20 627 20 627
differences
Revaluation of financial (737) (737) (737)
assets available-for-sale
- Net change on fair value (737) (737) (737)
Total other comprehensive (737) 19 890 - 19 890
income
Total comprehensive income (737) 643 867 (127) 643 740
for the year
Transactions with owners
recorded directly in equity
Share-based payments 4 856 4 856
Transfer to retained -
earnings
Dividends paid (495 111) (103) (495
214)
Imvula units acquired by (2 274) (2 274)
the Imvula Trust
Loss of control of (9 425) (9 425)
subsidiary
Increase in equity of 700 700
subsidiary
Total transactions with - (492 529) (8 828) (501
owners 357)
Balance at 30 September 1 802 1 389 781 1 747 1 391
2011 528
Condensed consolidated statement of
financial position
Reviewed Audited
30 Sept 30 Sept
2011 2010
R`000 R`000
Assets
Goodwill and intangible assets 1 087 772 1 097 309
Equipment 14 839 13 993
Investment in equity accounted investees 31 338 -
Deferred tax asset 8 069 4 900
Investments backing policyholder funds and 31 566 23 930 963
investments held through investment partnerships 179
Investment securities 28 467 28 274
Trade and other receivables 242 450 227 006
Cash and cash equivalents 393 169 300 638
Total assets 33 372 25 603 083
283
Liabilities
Interest-bearing borrowing 42 800 82 000
Deferred tax liabilities 18 629 22 528
Policyholder investment contract liabilities and 31 547 23 908 436
liabilities to holders of interests in investment 550
partnerships
Income tax payable 9 860 3 215
Trade and other payables 361 916 337 759
Total liabilities 31 980 24 353 938
755
Net assets 1 391 528 1 249 145
Equity
Share capital and premium 255 907 255 907
Accumulated earnings 992 922 866 019
Reserves 140 952 116 517
Total equity attributable to equity holders of the 1 389 781 1 238 443
company
Non-controlling interest 1 747 10 702
Total equity 1 391 528 1 249 145
Condensed consolidated statement of cash
flows
Reviewed Audited
30 Sept 30 Sept
2011 2010
R`000 R`000
Cash flows from operating activities
Profit for the period 623 850 440 376
Income tax expense 314 295 244 983
Non-cash and other adjustments (12 598) (801)
Operating profit before changes in working capital 925 547 684 558
Working capital changes 10 361 73 507
Cash generated from operations 935 908 758 065
Interest paid (6 773) (9 685)
Income taxes paid (314 718) (259 992)
Net cash from operating activities 614 417 488 388
Net cash from investing activities 3 037 48 686
Cash flows from financing activities (545 550) (303 766)
- dividends to shareholders (495 351) (280 940)
- repayment of interest-bearing borrowing (39 200) (24 144)
- other (10 999) 1 318
Net increase in cash and cash equivalents 71 904 233 308
Cash and cash equivalents at beginning of year 300 638 77 598
Exchange rate adjustments 20 627 (10 268)
Cash and cash equivalents at end of year 393 169 300 638
The cash flows above represent cash and
cash equivalents of shareholders and
excludes policyholders` cash and cash
equivalents.
Reconciliation of headline earnings
Reviewed Audited
30 Sept 30 Sept
2011 2010
R`000 R`000
Earnings attributable to ordinary shareholders 623 977 437 108
Effect of adjustments (18 136) 122
(Profit)/loss on disposal of equipment (6) 131
Gain on loss of control of subsidiary (18 130)
Profit on disposal of available-for-sale financial - (9)
assets
Total tax effect of adjustments 1 (22)
Headline earnings attributable to ordinary 605 842 437 208
shareholders
Condensed consolidated segment report
Africa
Restated
Reviewed Audited
30 Sept 30 Sept
2011 2010
R`000 R`000
Segment external revenue 1 531 729 1 158 309
Segment operating expenses (770 937) (595 191)
Segment profit 760 792 563 118
Share of income of equity accounted investee 2 365 -
Net financial income/(expense) 28 078 16 818
Profit from fund management 791 235 579 936
Segment assets 33 182 25 460 894
681
Condensed consolidated segment report
(continued)
International
Restated
Reviewed Audited
30 Sept 30 Sept
2011 2010
R`000 R`000
Segment external revenue 194 181 132 578
Segment operating expenses (67 119) (61 363)
Segment profit 127 062 71 215
Share of income of equity accounted investee - -
Net financial income/(expense) 330 (375)
Profit from fund management 127 392 70 840
Segment assets 189 602 142 189
Condensed consolidated segment report
(continued)
Group
Restated
Reviewed Audited
30 Sept 30 Sept
2011 2010
R`000 R`000
Segment external revenue 1 725 910 1 290 887
Segment operating expenses (838 056) (656 554)
Segment profit 887 854 634 333
Share of income of equity accounted investee 2 365 -
Net financial income/(expense) 28 408 16 443
Profit from fund management 918 627 650 776
Segment assets 33 372 25 603
283 083
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, as well as the AC500 standards as issued by the
Accounting Practices Board or its successor, the requirements of the South
African Companies Act, Act 71 of 2008 and the Listings Requirements of the
JSE. The condensed consolidated financial statements do not include all of the
information required for full annual financial statements.
These condensed consolidated financial statements have been prepared in
accordance with the historical cost basis 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.
The accounting policies applied in the presentation of the condensed
consolidated financial statements are in terms of IFRS and are consistent with
those presented in the previous annual financial statements.
These preliminary reviewed results have been prepared under the supervision of
Financial Manager, A Rhoda CA(SA).
2. Reclassification of comparative figures
Commissions collected in an agency capacity by the company have now been
excluded from revenue and other expenses in terms of IAS 18 Revenue. This has
resulted in a reduction of R61 million in the respective amounts on the face
of the 2010 consolidated statement of comprehensive income. This
reclassification has had no impact on the group`s reported results.
3. 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.
4. SARS review
From time to time, in common with other organisations, companies within the
group are subject to review by SARS. Presently the Life company is subject to
such a review, however the board is confident of the company`s position and
are of the view that the possibility of any loss being incurred is remote and
not capable of reliable estimation.
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
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 08/11/2011 07:05:01 Produced by the JSE SENS Department.
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