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CML
CML
CML - Coronation Fund Managers Limited - Reviewed interim results for the six
months ended 31 March 2012
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 2012
Assets under management of R296 billion
Diluted headline earnings per share of 86.7 cents
Interim dividend per share of 95 cents
Coronation produced a solid set of results for the six months to 31 March 2012.
All areas of the business benefited from inflows over the period, with the
retail business in particular continuing to receive strong support. In terms
of long-term unit trust funds, Coronation remains the second largest manager
in the country.
Strong net inflows of R19.1 billion for the period and robust global equity
markets (in the second quarter of the financial year), grew assets under
management by 28% to R296 billion (March 2011: R231 billion). For the six months
under review, the MSCI World and Emerging Markets indices returned 20.3% and
19.2% (in US dollar terms) respectively, while the FTSE/JSE All Share Index
returned 14.9%.
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 11% to R912 million off the strong revenue base
achieved in 2011. This has resulted in a 6% increase in diluted headline
earnings per share to 86.7 cents (March 2011: 81.7 cents).
Long-term investing
The consistent delivery on our promise to clients to add value across different
mandates was again recognised at the 2012 Morningstar South Africa Awards where
Coronation was named Best Large Fund House for the second consecutive year.
Performance highlights for the interim period ended 31 March 2012 reflect:
- Our institutional global balanced portfolios ranked 1st over 3 years
and 2nd over 5 years in the Alexander Forbes (AF) Global Large Manager
Watch Survey, while our domestic balanced portfolios ranked 3rd over
5 years in the AF SA Large Manager Watch Survey. Within the absolute
product range, our global portfolios ranked 1st over 3 and 5 years in
the AF Conservative Global Manager Watch Survey.
- Over 1, 3, 5 and 10 years the Coronation Top 20, Balanced Plus and
Capital Plus funds ranked in the 1st quartile of their respective
Morningstar categories. Coronation Top 20, our concentrated equity fund
for investors seeking long-term capital growth, has outperformed its
benchmark by an impressive 6.8% per annum since launch in October 2000.
Likewise, our multi-asset Coronation Balanced Plus Fund has delivered
2.3% ahead of its benchmark per year since launch in April 1996.
Coronation Capital Plus, our flagship absolute return fund, has beaten
inflation by 8.3% per annum since launch in July 2001, strongly
delivering on its dual objective of producing both income and capital
growth. Within our lower risk options, Coronation Balanced Defensive
celebrated its 5-year track record as one of the country`s top
performing conservative funds, while Strategic Income, our flagship
fixed interest fund, has outperformed cash by 2.7% per year since
launch in July 2001.
International
We continued to build on the long-term track records across our comprehensive
range of international funds over the period. Worthy of note is the Coronation
Global Emerging Markets (USD) Fund which received a Raging Bull Award for Best
Offshore Global Equity Fund available to South African investors. Since launch
in July 2008, this fund has delivered 5.0% (net of all fees) ahead of the MSCI
Emerging Markets Index per year. In addition, our longest running international
unit trust fund, Coronation World Equity (ZAR) Fund of Funds, has outperformed
the MSCI World Index by 2.1% per annum (net of all fees) since launch almost 15
years ago in August 1997. Since launch in October 2008, the institutional
Coronation Africa Frontiers Fund has delivered 7.2% ahead of its benchmark per
year (gross of all fees).
Our commitment to clients
As an independent fund manager, our reputation and very existence depend on our
ability to outperform the market. It is therefore important that our business
does not grow to a level that impedes our ability to effectively manage client
assets.
Following the closure of our South African Equity products to new institutional
clients on 31 March 2012, we have announced the closure of our Balanced and
Absolute Return products to new institutional clients effective 31 December
2012. These closures have no impact on our retail or existing institutional
clients. Our institutional SA Fixed Interest, Hedge and International fund
ranges remain open to new investments.
Transformation
Upon the receipt of the interim dividend, Coronation`s broad-based black
economic empowerment partner, the Imvula Trust, is in a position to settle its
remaining debt. This will facilitate the conversion of the Imvula investment in
Coronation Investment Management (Pty) Ltd to listed Coronation shares as
reflected in our fully diluted headline earnings per share calculations.
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. Dividends declared after 31 March 2012, are no longer
subject to the 10% Secondary Tax on Companies (STC) regime, which levied the
tax on the declaring company, but are now subject to a 15% Dividends Tax (DT),
which is a withholding tax levied on non-exempt shareholder recipients of the
dividend..
Taking into account projected cash requirements, we have declared an interim
gross dividend of 95 cents per share for the period.The absolute dividend
declared therefore, has not been subjected to a 10% STC charge, but will be
subject to a 15% DT charge in the hands of non-exempt shareholders resulting in
a net dividend of 80.75 cents per share for such shareholders. No STC credits
have been utilised
In compliance with the Listings Requirements of the JSE Limited, the following
dates are applicable:
Last day to trade Friday, 1 June 2012
Shares trade ex dividend Monday, 4 June 2012
Record date Friday, 8 June 2012
Payment date Monday, 11 June 2012
Share certificates may not be dematerialised or rematerialised between Monday,
4 June 2012, and Friday, 8 June 2012, both dates inclusive.
In terms of the DT effective 1 April 2012, the following additional information
is disclosed:
(a) the local DT rate is 15%;
(b) the number of ordinary shares in issue at the date of this declaration is
314 819 192;
(c) Coronation`s tax reference number is 9675 107 719.
Prospects
We are committed to a rigorous investment philosophy that has withstood the test
of time. In an environment where market participants continue to respond to
short-term newsflow, we continue to focus on capitalising on any mispriced
opportunities that we believe will add long-term value for all our stakeholders.
We expect the challenges in global financial markets to persist for the
foreseeable future and caution investors of ongoing market volatility. By
closing three of our institutional products to new investors, we will be better
equipped to continue meeting our client expectations and deliver superior levels
of performance. We strongly believe our business is positioned to respond to the
ever changing environment.
External audit review
The external auditors, Ernst & Young Inc., reviewed the condensed statement of
financial position of Coronation Fund Managers Limited Group as at 31 March 2012
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
Chairman
Hugo Nelson
Chief Executive Officer
Anton Pillay
Chief Operating Officer
Condensed consolidated statement of comprehensive income
Restated
Six months Six months Full year
reviewed reviewed audited
31 March 31 March 30 Sept
2012 2011 % 2011
R`000 R`000 Change R`000
Fund management activities
Revenue (see note 2) 911 929 820 686 11% 1 725 910
Other income 562 18 381 21 407
Operating expenses (470 700) (401 759) 17% (838 056)
Share-based payment expense (1 427) (2 061) (4 856)
Other expenses (see note 2) (469 273) (399 698) (833 200)
Results from operating 441 791 437 308 1% 909 261
activities
Finance and dividend income 7 797 4 638 12 263
Finance expense (1 487) (3 160) (5 262)
Share of profit of equity- 2 182 1 173 2 365
accounted investee
Profit from fund management 450 283 439 959 2% 918 627
Income attributable to 22 286 9 583 19 518
policyholder linked assets and
investment partnerships
Net fair value gains on 31 753 18 296 34 431
policyholder and investment
partnership financial
instruments
Administration expenses borne (9 467) (8 713) (14 913)
by policyholders and investors
in investment partnerships
Profit before income tax 472 569 449 542 938 145
Income tax expense (175 773) (150 455) (314 295)
Taxation on shareholder (153 487) (140 872) (294 777)
profits
Taxation on policyholder (22 286) (9 583) (19 518)
investment contracts
Profit for the period 296 796 299 087 (1%) 623 850
Other comprehensive income
Foreign currency translation (2 996) 1 153 20 627
differences for foreign
operations
Net change in fair value of 2 287 1 745 (737)
available-for-sale financial
assets
Other comprehensive (709) 2 898 19 890
income/(expense) for the
period
Total comprehensive income for 296 087 301 985 643 740
the period
Profit attributable to:
- equity holders of the 295 878 298 842 (1%) 623 977
company
- non-controlling interest 918 245 (127)
Profit for the period 296 796 299 087 623 850
Total comprehensive income
attributable to
- equity holders of the 295 169 301 740 (2%) 643 867
company
- non-controlling interest 918 245 (127)
Total comprehensive income 296 087 301 985 643 740
for the period
Earnings per share (cents)
- basic 94.0 94.9 (1%) 198.2
- diluted 86.7 86.9 0% 181.3
Note to the statement of
comprehensive income
Headline earnings per share
(cents)
- basic 94.0 89.2 5% 192.4
- diluted 86.7 81.7 6% 176.1
Dividend per share (cents)
- interim 95.0 80.0 19% 80.0
- final 92.0
Condensed consolidated statement of financial position
Reviewed Reviewed Audited
31 March 31 March 30 Sept
2012 2011 2011
R`000 R`000 R`000
Assets
Goodwill and intangible assets 1 087 772 1 087 772 1 087 772
Equipment 13 404 13 925 14 839
Investment in equity accounted 30 782 30 147 31 338
investees
Deferred tax asset 2 650 2 496 8 069
Investments backing policyholder 40 276 713 27 379 486 31 566 179
funds and investments held through
investment partnerships
Investment securities 104 482 28 965 28 467
Trade and other receivables 286 159 289 820 242 450
Cash and cash equivalents 215 746 148 147 393 169
Total assets 42 017 708 28 980 758 33 372 283
Liabilities
Interest-bearing borrowing 20 300 64 300 42 800
Deferred tax liabilities 29 423 22 548 18 629
Policyholder investment contract 40 247 627 27 357 188 31 547 550
liabilities and liabilities to
holders of interests in investment
partnerships
Income tax payable 6 836 44 625 9 860
Trade and other payables 320 305 193 261 361 916
Total liabilities 40 624 491 27 681 922 31 980 755
Net assets 1 393 217 1 298 836 1 391 528
Equity
Total equity attributable to equity 1 390 552 1 297 417 1 389 781
holders of the company
Non-controlling interest 2 665 1 419 1 747
Total equity 1 393 217 1 298 836 1 391 528
Condensed consolidated statement of cash flows
Six months Six months Full year
reviewed reviewed audited
31 March 31 March 30 Sept
2012 2011 2011
R`000 R`000 R`000
Cash flows from operating activities
Profit for the period 296 796 299 087 623 850
Income tax expense 175 773 150 455 314 295
Non-cash and other adjustments (14 105) (15 523) (12 598)
Operating profit before changes in 458 464 434 019 925 547
working capital
Working capital changes (84 563) (206 142) 10 361
Cash generated from operations 373 901 227 877 935 908
Interest paid (2 244) (4 193) (6 773)
Income taxes paid (162 584) (106 621) (314 718)
Net cash from operating activities 209 073 117 063 614 417
Net cash from investing activities (65 175) 1 485 3 037
Cash flows from financing activities (318 325) (272 192) (545 550)
- dividends to shareholders (295 292) (243 494) (495 351)
- repayment of interest-bearing (22 500) (17 700) (39 200)
borrowing
- other (533) (10 998) (10 999)
Net (decrease)/increase in cash and (174 427) (153 644) 71 904
cash equivalents
Cash and cash equivalents at 393 169 300 638 300 638
beginning of period
Exchange rate adjustments (2 996) 1 153 20 627
Cash and cash equivalents at end of 215 746 148 147 393 169
period
The cash flows above represent cash and cash equivalents of shareholders and
excludes policyholders` cash and cash equivalents.
Consolidated statement of changes in equity
R`000 Share Foreign Retained Share-based
capital and currency earnings payment
premium translation reserve
reserve
Balance at 30 September 2010 255 907 419 866 019 113 559
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 comprehensive 1 153
income
Total comprehensive income 1 153 298 842 -
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 by the (1 573)
Imvula Trust
Loss of control of
subsidiary
Total transactions with - - (244 516) 1 750
owners
Balance at 31 March 2011 255 907 1 572 920 345 115 309
Total comprehensive income
for the period
Profit for the period 325 135
Other comprehensive income
Currency translation 19 474
differences
Revaluation of available-for-
sale financial assets
- net change in fair value
Total other comprehensive 19 474
income
Total comprehensive income 19 474 325 135
for the period
Transactions with owners
recorded directly to equity
Share-based payments 2 795
Dividends paid (251 857)
Imvula units acquired by the (701)
Imvula Trust
Increase in equity of
subsidiary
Total transactions with (252 558) 2 795
owners
Balance at 30 September 2011 255 907 21 046 992 922 118 104
Total comprehensive income
for the period
Profit for the period 295 878
Other comprehensive income
Currency translation (2 996)
differences
Revaluation of available-for-
sale financial assets
- net change in fair value
Total other comprehensive
income
Total comprehensive income (2 996) 295 878
for the period
Transactions with owners
recorded directly to equity
Share-based payments 1 427
Dividends paid (295 292)
Imvula units acquired by the (533)
Imvula Trust
Total transactions with (295 825) 1 427
owners
Balance at 31 March 2012 255 907 18 050 992 975 119 531
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 2010 2 539 1 238 443 10 702 1 249 145
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-for-1 745 1 745 1 745
sale financial assets
- net change in fair value 1 745 1 745 1 745
Total other comprehensive 1 745 2 898 2 898
income
Total comprehensive income 1 745 301 740 245 301 985
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 the (1 573) (1 573)
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
Total comprehensive income
for the period
Profit for the period 325 135 (372) 324 763
Other comprehensive income
Currency translation 19 474 19 474
differences
Revaluation of available-for-(2 482) (2 482) (2 482)
sale financial assets
- net change in fair value (2 482) (2 482) (2 482)
Total other comprehensive (2 482) 16 992 16 992
income
Total comprehensive income (2 482) 342 127 (372) 341 755
for the period
Transactions with owners
recorded directly to equity
Share-based payments 2 795 2 795
Dividends paid (251 857) (251 857)
Imvula units acquired by the (701) (701)
Imvula Trust
Increase in equity of 700 700
subsidiary
Total transactions with (249 763) 700 (249 063)
owners
Balance at 30 September 2011 1 802 1 389 781 1 747 1 391 528
Total comprehensive income
for the period
Profit for the period 295 878 918 296 796
Other comprehensive income
Currency translation (2 996) (2 996)
differences
Revaluation of available-for-2 287 2 287 2 287
sale financial assets
- net change in fair value 2 287 2 28 2 287
Total other comprehensive 2 287 (709) (709)
income
Total comprehensive income 2 287 295 169 918 296 087
for the period
Transactions with owners
recorded directly to equity
Share-based payments 1 427 1 427
Dividends paid (295 292) (295 292)
Imvula units acquired by the (533) (533)
Imvula Trust
Total transactions with (294 398) (294 398)
owners
Balance at 31 March 2012 4 089 1 390 552 2 665 1 393 217
Earnings per share
Six months Six months Full year
reviewed reviewed audited
31 March 31 March 30 Sept
2012 2011 2011
Weighted average number of 314 819 192 314 819 192 314 819 192
ordinary shares in issue
during the period
Weighted average number of 349 643 634 349 391 630 349 512 339
ordinary shares potentially in
issue
R`000 R`000 R`000
Earnings attributable to 296 796 299 087 623 850
shareholders
Non-controlling interest (918) (245) 127
Earnings attributable to 295 878 298 842 623 977
ordinary shareholders
Profit on disposal of - - (5)
equipment
Gain on loss of control of - (18 130) (18 130)
subsidiary
Headline earnings attributable 295 878 280 712 605 842
to ordinary shareholders
Actual number of shares in 314 819 192 314 819 192 314 819 192
issue at the end of the period
Condensed consolidated segment report
Africa
Six months
reviewed Audited
31 March 30 Sept
Restated
R`000 2012 2011 2011
Segment external revenue 767 376 736 431 1 531 729
Segment income before tax and 331 695 366 021 760 792
finance income/expense
Condensed consolidated segment report (continued)
International
Six months
reviewed Audited
31 March 30 Sept
Restated
R`000 2012 2011 2011
Segment external revenue 144 553 84 255 194 181
Segment income before tax 109 534 52 906 127 062
and finance income/expense
Condensed consolidated segment report (continued)
Group
Six months
reviewed Audited
31 March 30 Sept
Restated
R`000 2012 2011 2011
Segment external revenue 911 929 820 686 1 725 910
Segment income before tax and 441 229 418 927 887 854
finance income/expense
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 AC 500 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 reviewed results have been prepared under the supervision of
financial manager, Mrs 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 R44 million in the respective amounts on the
face of the 2011 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.
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
15 May 2012
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 15/05/2012 07:05:07 Produced by the JSE SENS Department.
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