| Wed 14 Mar 2012, 17:43 | | ACT/ACTP - AfroCentric Investment Corporation Limited - Unaudited Interim |
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ACT
ACT
ACT/ACTP - AfroCentric Investment Corporation Limited - Unaudited Interim
Results for the six months ended 31 December 2011
AfroCentric Investment Corporation Limited
Registration number 1988/000570/06
JSE Code: ACT, ACTP
ISIN: ZAE 000078416, ZAE 000082269
("AfroCentric" or "the Company" or "the Group")
Unaudited Interim Results for the six months ended 31 December 2011
Headlines
Earnings per share 16% up
Diluted earnings per share 15% up
Headline earnings per share 13% up
Diluted headline earnings per share 12% up
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 Dec 2011 31 Dec 2010 30 Jun 2011
R`000 R`000 R`000
ASSETS
Non-current assets 941,838 970,061 951,923
Property, plant and equipment 100,048 118,169 101,083
Investment property 10,100 8,543 10,100
Intangible assets 609,926 592,865 609.552
Unlisted investments 280 280 280
Investment in associates 62,368 64.796 63,859
Investment in preference shares 100,000 100,000 100,000
Deferred income tax assets 59,116 85,408 67,049
Current assets 241,966 209,517 291,064
Trade and other receivables 94,685 98,706 93,010
Receivables from associates
and joint venture 18,647 15,586 18,039
Current tax asset 7,981 - -
Cash and cash equivalents 120,653 95,225 180,015
Total assets 1,183,804 1,179,578 1,242,987
EQUITY AND LIABILITIES
Capital and reserves 758,355 670,268 726,850
Issued capital 347,716 393.181 372,060
Contingent shares to be issued 188,540 188,540 188,540
Treasury shares (1,162) (610) (1,162)
Foreign currency translation reserve (327) (462) 241
Distributable reserve 223,588 89,619 167,171
Minority interest 17,694 25,021 20.786
Total equity 776,049 695,289 747,636
Non-current liabilities 270,376 346,550 304,129
Deferred income tax liabilities 35,031 39,698 37,273
Borrowings 200,000 200,000 200,000
Provisions 9,215 67,575 41,600
Post-employment medical obligations 3,821 3,866 3,821
Accrual for straight lining of leases 22,309 35,411 21,435
Current liabilities 137,379 137,739 191,222
Provisions 2,073 2,790 20,378
Trade and other payables 69,953 67,515 76,334
Taxation 4,239 3,540 8,495
Bank overdraft 9,087 15,245 7,304
Employment benefit provisions 52,026 48,649 78,711
Total liabilities 407,755 484,289 495,351
Total equity and liabilities 1,183,804 1,179,578 1,242,987
- - -
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
six months six months year
ended ended ended
% 31 Dec 2011 31 Dec 2010 30 Jun 2011
change R`000 R`000 R`000
Revenue 670,007 672,088 1,351,254
Operating costs (566,807) (579,641) (1,128,141)
Operating profit 103,201 92,447 223,113
Other income 10,965 15,714 31,978
Net finance cost (1,701) 1,434 1,478
Share of profit from associates 4,906 2,211 10,888
Profit before impairment
and amortisation 117,370 111,806 267,457
Impairment of investment - - (10,266)
Impairment of intangible assets - (996) (4,958)
Depreciation (19,294) (24,062) (44,170)
Amortisation of intangible assets (17,359) (14,760) (35,542)
Profit before income tax 80,718 71,988 172,521
Income tax expense (21,783) (21,166) (45,982)
Total comprehensive income
for the period 58,935 50,822 126,539
Attributable to:
Equity holders of the Parent 16 54,344 46,704 117,248
Non-controlling interest 4,591 4,118 9,291
16 58,935 50,822 126,539
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 Dec 2011 31 Dec 2010 30 Jun 2011
R`000 R`000 R`000
Balance at beginning of the period 747,636 642,063 642,063
Issue of share capital 3,929 3,741 5,996
Treasury shares revalued - - (552)
Foreign currency translation reserve (568) (462) 241
Distributions to shareholders (33,883) (875) (26,651)
Income attributable to equity
holders of the parent 54,344 46,704 117,248
Income attributable to minorities 4,591 4,118 9,291
Balance at end of period 776,049 695,289 747,636
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 Dec 2011 31 Dec 2010 30 Jun 2011
R`000 R`000 R`000
Net cash generated / (utilised)
in operating activities (11,947) (29,196) 103,993
Net cash inflow / (outflow)
from investing activities (24,854) (43,289) (88,869)
Net cash inflow /
(outflow) from financing activities (24,344) 37,928 43,050
Net cash flow from continuing
operations (61,145) (34,557) 58,174
Net (decrease)/increase
in cash and cash equivalents (61,145) (34,557) 58,174
Cash and cash equivalents at
beginning of the period 172,711 114,537 114,537
Cash and cash equivalents at
end of the period 111,566 79,980 172,711
Reconciled as follows:
Cash and cash equivalents on hand 120,653 95,225 180,015
Bank overdraft (9,087) (15,245) (7,304)
111,566 79,980 172,711
EARNINGS ATTRIBUTABLE TO EQUITY HOLDERS
Unaudited Unaudited Audited
six months six months year
ended ended ended
% 31 Dec 2011 31 Dec 2010 30 Jun 2011
change R`000 R`000 R`000
Number of ordinary shares
in issue 267,458,718 264,920,135 265,947,672
Number of preference shares
in issue 16,638,000 16,638,000 16,638,000
Weighted average number of
ordinary shares 265,332,341 263,744,652 264,561,839
Weighted average number of
ordinary shares and
potential ordinary shares 312,530,939 310,056,281 311,493,781
Basic earnings 54,344 46,704 117,248
Adjusted by:
- Fair value gains - - (4,466)
- Impairment of property, plant
and equipment - - - 146
- Impairment of intangible assets - 996 4,958
- Impairment of investment in associate - - 10,266
- Profit on disposal of assets (166) - (1,226)
- Reversal of loan impairments (137) - -
Headline earnings 54,041 47,700 126,926
Earnings per share (cents)
- Attributable to ordinary
shares (cents) 16 20.48 17.71 44.32
- Diluted earnings per
share (cents) 15 17.39 15.06 37.64
Headline earnings per
share (cents)
- Attributable to ordinary
shares (cents) 13 20.37 18.09 47.98
- Diluted earnings per
share (cents) 12 17.29 15.38 40.75
SEGMENTAL ANALYSIS
Unaudited interim results
for the six months ended 31 Dec 2011
Revenue Profit Total
before tax assets
R`000 R`000 R`000
Healthcare administration 670,007 72,152 806,941
Electronics - 2,650 -
Treasury activities - 284 110,517
Other - including inter-segment
elimination - 5,631 266,346
670,007 80,718 1,183,804
Unaudited interim results
for the six months ended 31 Dec 2010
Revenue Profit Total
before tax assets
R`000 R`000 R`000
Healthcare administration 672,088 60,545 787,687
Electronics - 1,081 -
Treasury activities - 4,182 110,208
Other - including inter-segment
elimination - 6,180 281,684
672,088 71,988 1,179,579
Audited results
for the year ended 30 Jun 2011
Revenue Profit Total
before tax assets
R`000 R`000 R`000
Healthcare administration 1,351,254 185,092 874,384
Electronics - 2,147 -
Treasury activities - 8,049 110,272
Other - including inter-segment
elimination - (22,767) 258,331
1,351,254 172,521 1,242,987
COMMENTARY
Introduction
The Board of Directors has pleasure in presenting the Group`s interim
results for the six month period ended 31 December 2011.
While the group is able to report a satisfactory increase in comparative
earnings for the period under review, given the variety of once-off benefits
and costs related to the acquisition and incorporation of Old Mutual
Healthcare and the sale of Medscheme Life, an exact comparison with the 6
months ending December 2010 does not convey the now more efficient delivery
platform which the group`s subsidiary, Lethimvula Investments Limited
("LIL") is today.
Accounting policies and basis of preparation
The condensed consolidated financial statements for the six months ended 31
December 2011 are prepared in accordance with International Financial
Reporting Standards ("IFRS"), International Accounting Standard 34, The JSE
Limited Listings Requirements, the South African Companies Act 71 of 2008 as
amended and AC 500 Standards as issued by the Accounting Practices Board or
its successor. The condensed consolidated interim financial statements are
prepared on the historical cost basis and the accounting policies are
consistent with those adopted and applied for the year ended 30 June 2011 in
terms of IFRS.
Nature of business
AfroCentric is a black owned diversified investment holding company, its
major investments being in healthcare administration, electronics and the
communications industries. AfroCentric also has a co-operation agreement
with Rio Tinto Plc for mineral prospecting and exploration projects. The
Company`s subsidiary, LIL, owns 100% of the shares in Medscheme Holdings
(Pty) Limited, a multi medical scheme administrator. Medscheme is the
largest black-owned medical scheme administrator in South Africa covering
approximately 3 million lives in the private healthcare administration
market.
The company`s associate, Jasco Electronics Holdings Limited ("Jasco")
provides communications, industrial and energy solutions, services and
products to a broad range of customers.
Operational review
LIL`s operating profits amounted to R72 million during the period under
review (2010: R61 million). The improved profitability arises primarily from
continuous efficiency improvements in the administration business. LIL`s
administration and managed care contracts are reviewed in January of each
year and accordingly profits of the healthcare division are favourably
weighted toward the period January-June. LIL`s performance for the period is
substantially on target with management forecast expectations for the 2012
financial year.
LIL continues to generate strong operating cash flows. It is important to
note that within the net cash generated from operating activities is an
outflow of R53.7 million relating to the termination of an onerous property
lease agreement. The extrication from this onerous contract will yield
positive cash flow benefits in future periods to 2013.
AfroCentric continues to acquire LIL shares from the minority shareholders
who approach the Company to sell their shares. During the period AfroCentric
acquired a further 6 151 099 LIL shares (1,1%) to bring the Company`s
ownership of the issued share capital of LIL to 92,63%.
AfroCentric`s investment in listed Jasco yielded earnings and investment
income for the six months ended 31 December 2011 of R4.9 million (2009: R2.2
million). The significant improvement in Jasco`s performance was influenced
by the acquisition and integration of Spescom during the first quarter in
2011, and a significant restructuring of the business for growth. Further
information on Jasco`s earnings, operations and prospects are available on
SENS under JSE Code: JSC.
AfroCentric`s exploration and prospecting projects with Rio Tinto Plc
continue in terms of the Reciprocal Strategic Co-operation Agreement.
Financial results
For the six month period ended 31 December 2011, earnings per share (EPS)
increased by 16% to 20,48 cents (2010: 17,71 cents) and diluted EPS
increased by 15% to 17,39 cents (2010: 15,06 cents). Headline earnings per
share (HEPS) increased by 13% to 20,37 cents (2010: 18,09 cents) and diluted
HEPS increased by 12% to 17,29 cents (2010: 15,38 cents).
Prospects
The Board maintains a regular review of the activities of the group`s
current investment portfolio. The Board is satisfied with the progress in
each case and given the gradual improvement in market conditions and
confidence, will continue to assess opportunities which satisfy the criteria
of the Board Investment Committee.
Subsequent events
No significant events have occurred in the period between the reporting date
and the date of this announcement.
Directors
There were no changes in the constitution of the Board of Directors during
the period under review.
Dividends
The policy of the Board is to review profits available for distribution to
shareholders at the end of each financial year. Accordingly no distribution
has been considered at this time.
By Order of the Board
MI Sacks CA (SA) AICPA (ISR)
Company secretary
Johannesburg
Directors
NB Bam** (Chairperson), JM Kahn**, M I Sacks**#, B Joffe**,
MJ Madungundaba**, AT Mokgokong**, WRC Holmes, GL Napier*, Y Masithela*
* independent non-executive, ** non-executive, # company secretary
Registered Office
37 Conrad Road
Florida North 1709
14 March 2012
Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
www.afrocentric.za.com
Date: 14/03/2012 17:43:01 Produced by the JSE SENS Department.
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