| Fri 30 Jun 2006, 16:02 | | Nictus - Abridged Report: Audited Financial Resul |
|
NCS
NCS
Nictus - Abridged Report: Audited Financial Results & 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 2006 AND DETAILS OF THE NOTICE OF ANNUAL GENERAL MEETING
ABRIDGED GROUP INCOME STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
Audited *Audited
2006 2005
R"000 R"000
Revenue 247 898 207 959
Cost of sales (149 436) (116 413)
Change in gross provision for unearned
premiums (21 093) (29 901)
Claims incurred (28 555) (23 492)
Gross profit 48 814 38 153
Other operating income 1 152 426
Administrative expenses (19 267) (17 427)
Other operating expenses (29 533) (22 895)
Operating profit before investment income 1 166 (1 743)
Investment income 5 259 5 013
Operating profit before financing costs 6 425 3 270
Financing costs (5 235) (4 555)
Share of profits of associates 105 -
Profit/(loss) before taxation 1 295 (1 285)
Taxation 1 792 102
Profit/(loss) for the year 3 087 (1 183)
Attributable to:
Equity holders of the parent 3 004 (1 109)
Minority interest 83 (74)
Profit/(loss) for the year 3 087 (1 183)
Earnings/(loss) per share (cents) 5.62 (2.08)
Reconciliation between earnings and headline
earnings:
Profit/(loss) for the year 3 004 (1 109)
Impairment loss on goodwill 406 601
Loan recovered (300) -
Loss/(profit) on disposal of property, plant 102 (105)
and equipment net of insurance proceeds
Write off of plant and equipment (357) 647
Headline earnings 2 855 34
Headline earnings per share (cents) 5.34 0.06
ABRIDGED GROUP BALANCE SHEETS AS AT 31 MARCH 2006
Audited *Audited
2006 2005
R"000 R"000
Assets
Non-current assets
Property, plant and equipment 37 811 37 063
Intangible assets 3 773 4 161
Interest in associates 1 030 -
Investments 6 467 5 286
Loans and receivables 101 530 90 030
Deferred taxation 10 120 8 404
Current assets
Inventories 33 188 26 696
Trade and other receivables 58 772 59 959
Cash and cash equivalents 55 058 42 066
Receiver of Revenue 678 443
Total assets 308 427 274 108
Equity and liabilities
Capital and reserves
Issued capital 26 722 26 722
Contingency reserve 5 322 5 400
Retained income 11 779 8 697
Minority interest 1 031 948
Non-current liabilities
Interest bearing loans and borrowings 17 844 17 131
Deferred taxation 4 708 4 841
Current liabilities
Bank overdraft 15 401 15 405
Interest bearing loans and borrowings 18 142 15 855
Insurance contract provision 183 960 154 510
Trade and other payables 23 435 24 573
Receiver of Revenue 83 26
Total equity and liabilities 308 427 274 108
ABRIDGED CASH FLOW STATEMENTS FOR THE YEAR ENDED 31 MARCH 2006
Audited *Audited
2006 2005
R"000 R"000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) before taxation 1 295 (1 285)
Adjustment for:
Investment income (5 259) (5 013)
Financing costs 5 235 4 555
Depreciation 2 193 2 121
Amortisation of software 228 219
Loss/(profit) on disposal of property, plant
and equipment 102 (105)
Profit on disposal of shares (9) (44)
Profit on disposal of investments at fair (617) -
value through profit or loss
Fair value adjustment on listed shares (526) (277)
Property, plant and equipment written off (357) -
Impairment of goodwill 406 601
Operating income before working capital
changes 2 691 772
Working capital changes
Increase in inventories (6 492) (3 230)
Decrease/(increase) in trade and other 1 187 (25 757)
receivables
Increase in insurance contract provision 29 450 25 817
Decrease in trade and other payables (1 138) (12 101)
Cash generated/(utilised) by operations 25 698 (14 499)
Interest received 12 092 12 811
Interest paid (4 522) (3 829)
Ordinary dividends received 3 287 858
Preference dividend paid (713) (726)
No claim bonuses paid (10 120) (8 656)
Taxation paid (235) (172)
Ordinary dividends paid - (802)
Net cash flow from operating activities 25 487 (15 015)
CASH FLOWS FROM INVESTING ACTIVITIES
Replacement of property, plant and equipment (4 128) (8 696)
Developments and purchases of intangible (246) -
assets
Proceeds from disposal of property, plant
and equipment 1 081 2 861
Proceeds from disposal of investments 4 851 192
Investments made (4 625) 317
Interest in associate (925) -
Acquisition of subsidiary - (1 836)
Loans and receivables repaid (11 500) 15 227
Net cash flow from investing activities (15 491) 8 065
CASH FLOWS FROM FINANCING ACTIVITIES
Interest bearing loans and borrowings raised 3 000 8 144
Net cash flow from financing activities 3 000 8 144
Net movement in cash and cash equivalents 12 996 1 194
Cash and cash equivalents at beginning of
year 26 661 25 467
Cash and cash equivalents at end of year 39 657 26 661
ABRIDGED STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2006
Audited
Share Revalu- Con- Retained Total
capital ation tingency Income equity
reserves reserve Minority
Total interest
R"000 R"000 R"000 R"000 R"000 R"000 R"000
Balance at 1 26 722 6 987 - 7 613
April 2004 41 322 1 897 43 219
Effect of - (6 987) - 8 395 1 325
adoption of
IFRS and other
adjustments 1 408 (83)
Restated 26 722 - - 16 008 44 544
balance at 1 42 730 1 814
April 2004
Arising on - - - - (792)
acquisition of
Parcel Force
Couriers (Pty)
Ltd - (792)
Transfer to - - 5 400 (5 400) -
contingency
reserve - -
Net loss for - - - (1 109) (1 183)
the year (1 (74)
109)
Dividend paid - - - (802) (802) - (802)
Balance at 31 26 722 - 5 400 8 697 41 767
March 2005 40 948
819
Net profit for - - - 3 004 3 087
the year 3 004 83
Transfer from - - (78) 78 -
contingency
reserve - -
Balance at 31 26 722 - 5 322 11 779 44 854
March 2006 43 1 031
823
ABRIDGED SEGMENTAL ANALYSIS FOR THE YEAR ENDED 31 MARCH 2006
2006 *2005
R"000 R"000
Motor retail 2 256 1 348
Furniture & carpet retail 298 610
Wholesale (738) (499)
Insurance & Finance 1 946 2 901
Head Office 2 663 (1 090)
Total operating profit 6 425 3 270
* Comparative figures have been restated in terms of IFRS.
ACCOUNTING POLICIES
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) and its interpretations
adopted by the International Accounting Standards Board (IASB). The
accounting policies are consistent with those applied in the comparative
financial periods, except for those which have arisen or changed due to the
transition to IFRS. Accounting policies used in the comparative financial
period may be inspected in the prior year annual financial statements.
COMPLIANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
The audited results of the group for the year ended 31 March 2006 have been
prepared in accordance with accounting policies that comply with IFRS, with
the date of transition to IFRS for the group being 1 April 2004.
The audited results of the group for the year ended 31 March 2006 have been
prepared in accordance with accounting policies to comply with IFRS
effective 1 April 2004.
Comparative information has been restated where applicable to account for
the transition to IFRS.
1. In terms of IFRS 1, Property, plant and equipment have been measured
at its fair value and these fair values have been used as deemed cost at
transition date. Where parts of an item of property, plant and equipment
have different useful lives, they are accounted for as separate items of
property, plant and equipment.
2. In terms of IFRS 4, insurance contracts and contracts with
discretionary participation features are tested for adequacy by discounting
current estimates of all future contractual cash flows and comparing this
amount to the carrying value of the liability net of deferred acquisition
costs and any related assets. Where a shortfall is identified, an
additional provision is made and the group recognises the deficiency in the
income for the year.
The conversion to IFRS, with the exception of the items detailed below, did
not result in any material adjustments to the equity or net profit.
RECONCILIATION OF THE IMPACT OF FIRST TIME ADOPTION OF IFRS AND OTHER
ADJUSTMENTS ON THE BALANCE SHEET
Assets Liabilities Equity
1 April 31 March 1 April 31 March 1 April 31 March
2004 2005 2004 2005 2004 2005
R"000 R"000 R"000 R"000 R"000 R"000
As reported under
SA GAAP 239 463 270 284 198 141 228 690 41 322 41 595
Reclassification
Minority
shareholders
interest - - (1 897) (207) 1 897 207
Adjustments for:
Revaluation of
property 2 637 2 200 - - 1 714 1 277
Residual value of
assets 826 267 - - 537 327
Goodwill - 591 - - - 591
Investments 86 (123) - - - -
Operating leases - - 351 408 (246) (286)
Insurance contract
provision - - 1 542 3 150 (1 002) 2 047)
Share incentive
trust 212 212 519 300 (222) (212)
Deferred tax 60 677 - - 627 315
As reported under
IFRS 243 284 274 108 198 656 232 341 44 628 41 767
RECONCILIATION OF THE IMPACT OF FIRST TIME ADOPTION OF IFRS AND OTHER
ADJUSTMENTS ON PROFIT FOR THE YEAR
2005
R"000
Profit as reported under SA GAAP 1 076
Reallocation of minority shareholder"s
interest (74)
Adjustments for
Residual value of assets (995)
Goodwill (234)
Operating leases (56)
Insurance contract provision (1 608)
Consolidation of share incentive trust 10
Minority shareholders interest 83
Deferred tax 615
Loss as reported under IFRS (1 183)
Earnings per share under SA GAAP (cents) 2.01
Loss per share under IFRS (cents) (2.08)
RECONCILIATION OF THE IMPACT OF FIRST TIME ADOPTION OF IFRS AND OTHER
ADJUSTMENTS ON THE CASH FLOW STATEMENT
There has been no adjustments to the cash flow statement in respect of cash
utilised by operating activities, with the exception that the non-cash item
in the reconciliation to the cash flow statement has been adjusted for the
adjustments made to the depreciation charge on transition to IFRSs. There
were no adjustments to cash flows from investing activities and cash flows
from financing activities as a result of the adoption of IFRSs.
NOTES ON THE RECONCILIATION OF THE IMPACT OF FIRST TIME ADOPTION OF IFRS
AND OTHER ADJUSTMENTS
The group, as permitted by IFRS 1 First-time Adoption of International
Financial Reporting Standards, has elected to use the following exemptions
from the retrospective application of certain parts of IFRSs.
Business combinations
The group has elected not to retrospectively apply the requirements of IFRS
3 Business Combinations for combinations that occurred prior to 1 April
2004.
Fair value as deemed cost
The group has elected to measure owner-occupied property, plant and
equipment at the date of transition to IFRSs at its fair value and use that
fair value as its deemed cost at that date.
Reclassifications
Minority interest has been reclassified as part of equity to comply with
the new requirement of IAS 1.
Revaluation of property, plant and equipment
Property, plant and equipment have been measured at their fair values at
the date of transition to IFRSs. These fair values have been used as the
deemed cost at that date. The revaluation reserve on property has been
reset to zero due to the deemed cost exemption being applied.
Residual value of assets
Depreciable amount for property, plant and equipment is no longer cost, but
rather the difference between cost and residual value.
Goodwill
Due to the assignment of residual values to plant and equipment the
goodwill on purchase of subsidiary has been effected accordingly. The
calculation of goodwill has been appropriately adjusted.
Investments
The investment in Parcel Force Couriers (Pty) Ltd has been adjusted with
the reassessment of the residual values of plant and equipment of this
subsidiary.
Operating leases
Operating lease costs which were previously expensed as paid are now spread
over the period of the lease.
Insurance contract provision
In terms of IFRS 4, insurance contracts and contracts with discretionary
participation features are tested for adequacy by discounting current
estimates of all future contractual cash flows and comparing this amount to
the carrying value of the liability net of deferred acquisition costs and
any related assets. Where a shortfall is identified, an additional
provision is made and the group recognises the deficiency in the income for
the year.
Consolidation of share incentive trust
In the past the share incentive Trust had not been consolidated into the
group due to the insignificance of the transactions compared to the group.
The Trust has now been consolidated into the group.
Deferred tax
This is the deferred tax effects on the above adjustments.
RELATED PARTIES
The company has a related party relationship with its holding company,
subsidiaries, fellow subsidiaries, associates and with its directors and
executive officers.
2006 2005
TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL R"000 R"000
Salaries and bonuses 3 891 3 945
TRANSACTIONS WITH RELATED PARTIES
PREMIUMS RECEIVED
Key management personnel
E Tromp 11 11
Gecko Consulting (Pty) Ltd 154 121
Hitech Lasers 632 586
Management Outsource Services (Pty) Ltd 44 96
NC Tromp Boerdery 18 17
NCT Trust 89 91
Premier Services (Pty) Ltd 35 70
Tromp & Seuns 14 14
Tromp Consulting International 13 172
LOANS ADVANCED TO RELATED PARTIES
Key management personnel
Aquaries Properties (Pty) Ltd 275 297
E Tromp 6 6
Gecko Consulting (Pty) Ltd 184 -
H & Z Consulting (Pty) Ltd 8 88
Hartelus Farming (Pty) Ltd 20 134
Management Outsource Services (Pty) Ltd 8 172
N Prinsloo 112 150
Swart Family Trust 39 150
Tromp Consulting International (Pty) Ltd 37 121
PREFERENCE SHARES REDEEMED
Key management personnel
Tromp & Seuns 26 -
LOANS ADVANCED BY NICTUS SHARE INCENTIVE TRUST TO
RELATED PARTIES
Key management personnel
E Tromp 106 -
FR van Staden 106 40
G Swart 106 -
JJ Retief 107 32
N Prinsloo 106 -
NC Tromp 106 40
YEAR END BALANCES WITH RELATED PARTIES
INSURANCE CONTRACT PROVISION
Key management personnel
E Tromp 150 138
Gecko Consulting (Pty) Ltd 275 121
Hitech Lasers 1 218 586
Management Outsource Services (Pty) Ltd 190 146
NC Tromp Boerdery 97 79
NCT Trust 249 160
Premier Services (Pty) Ltd 206 171
Tromp & Seuns 42 28
Tromp Consulting International 184 172
ADVANCES INCLUDED IN LOANS AND RECEIVABLES
Key management personnel
Aquaries Properties (Pty) Ltd 728 452
E Tromp - 6
Empty Investments 30 CC 303 -
Gecko Consulting (Pty) Ltd 184 -
GW Swart - 174
H von Luttichau 1 265 1 125
Hartelus Farming (Pty) Ltd 888 869
Management Outsource Services (Pty) Ltd 185 144
N Prinsloo 38 -
Swart Family Trust 189 -
Tromp Consulting International (Pty) Ltd 158 -
Ultra Investments (Pty) Ltd - 1 468
PREFERENCE SHARES INCLUDED IN LOANS AND RECEIVABLES
Key management personnel
Makalani Grapes (Pty) Ltd 5 000 5 000
Suidwesdrukkery Ltd 1 500 1 500
Tromp & Seuns 2 000 2 026
NICTUS SHARE INCENTIVE TRUST INCLUDED IN LOANS AND
RECEIVABLES
Key management personnel
E Tromp 106 -
FR van Staden 146 40
G Swart 106 -
JJ Retief 139 32
N Prinsloo 106 -
NC Tromp 146 40
LOANS FROM SHAREHOLDERS
Corporate Guarantee (Namibia) Ltd 38 -
E Weakly 123 60
H von Luttichau 185 -
Namibia Electronic Payments (Pty) Ltd 61 55
RESPONSIBILITY FOR ANNUAL FINANCIAL STATEMENTS
The annual financial statements have been prepared in accordance with
International Financial Reporting Standards. These are the group"s first
consolidated financial statements under IFRSs and IFRS 1 has been applied.
Appropriate accounting policies supported by reasonable and prudent
judgements have been applied consistently with those of the prior year.
These financial statements 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
During the year under review, we have made satisfactory progress in various
areas within our group. The results of the group incorporate revisions
made to the accounting standards in order to comply with International
Financial Reporting Standards (IFRS"s). Comparative figures have been
restated accordingly.
The financial highlights are the following:
* Revenue increased by 19% to R248 million
* Profit for the year increased by 360% to R3 million
* The group asset base grew by 12% to R308 million
* The net cash position of the group increased by 48% to a record high
of R40 million
* Capital and reserves grew by 7% to R45 million
The balance sheet of the group has been strengthened during the year under
review by the growth of cash and other assets, which is our long-term
strategy.
THE PAST YEAR
During the year under review both the consumer and the retailer benefited
from positive economic factors in the South African furniture industry. The
buoyant economy coupled with the strong rand and the base resource prices
led to a low inflationary -and interest rate environment. The consumer
benefited from a higher disposable income and lower furniture prices.
The Namibian economy was not as buoyant as that of South Africa, due to the
adverse effects of the stronger rand on the economy. The credit risk
profiles of both the Namibian and South African consumers remained stable
as did the positive payment patterns.
Notwithstanding the fact that there was a slight increase in the inflation
rate in Namibia, positive growth was experienced on average during the
year. The Namibian consumer price index increased to 4.7% for the 12 months
to 31 March 2006 compared to 3.4% for the year ending 2005. Although the
Namibian inflation rate remained lower than that of South Africa, it
followed the same trend since September 2004. Real gross domestic product
growth, although below the record high of 6% in 2004, is projected to rise
to 4% in 2006. The Namibian economy is benefiting from sound global
economic conditions and a strong global macro economy.
Our focus during the past year has been on establishing our operations in
South Africa. We are satisfied that we have established a good base
through our furniture and carpet divisions. Although our insurance
operations in South Africa are still in its infant stage, we believe that
good growth could come from this sector in the coming year.
THE FUTURE
The board is of the opinion that most of our future growth will come from
the South African market. We expect that the positive trading conditions
would continue in South Africa and that the Namibian economy should follow
suite.
As the group is essentially a furniture retail group, we are closely
monitoring the requirements of the new law on national credit in South
Africa and are geared to comply with the said Act. Our furniture segment
has always applied our credit policy in a responsible manner.
The ability and knowledge of your board was further strengthened by the
appointment of Mr. Nic Campbell and Mr Hannes Retief as main board members.
Mr Campbell serves as chairperson of the Audit Committee and Mr Retief is a
member of the Remuneration Committee. Mr Campbell, a Chartered Accountant
by profession is a retired partner from the auditing firm
PriceWaterhouseCoopers and practiced for 40 years as an auditor. He also
served as chairperson of the Gauteng Society of Chartered Accountants and
served on the Board of the South African Institute of Chartered Accountants
for many years. Mr Hannes Retief, who is a member of the executive
committee and is responsible for the furniture segment, served the group
for the past 10 years. His appointment reaffirms the group"s policy of
developing their own people to the highest level of excellence.
DIVIDEND
The board of directors has approved a final dividend of 1, 5 cent per
share.
STRATEGIC FOCUS
Our vision to be an independent group that creates above average value for
our shareholders and other stakeholders through continuous profitable
growth remains firm.
CORPORATE GOVERNANCE
The Board is fully committed to the principles of good corporate governance
through transparency, integrity and accountability, and accepts that the
responsibility for this rests with the Board and its Chairman.
APPRECIATION
I wish to thank my fellow Board members, Executive committee and all staff
members for their efforts and dedication for the past sixty years. We also
appreciate the continuous support of our customers and other stakeholders.
We trust that we shall experience the same support for the coming year.
What we have achieved and what we plan is eventually dependent on the Grace
of God Almighty.
J L Olivier
Chairman: Nictus Group
DECLARATION OF ORDINARY DIVIDEND
The board has declared a final dividend of 1,5 cents per share to ordinary
shareholders of the Company for the year ended 31 March 2006.
The salient dates of this dividend are:
Last day to trade "cum" the dividend Friday, 7 July 2006
Shares commence trading "ex" the dividend
from the commencement of business on Monday, 10 July 2006
Record date Friday, 14 July 2006
Payment date Monday, 17 July 2006
Share certificates may not be dematerialised or rematerialised between
Monday 10 July 2006 and Friday 14 July 2006 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 2006 ("the annual report")
will be posted to shareholders today, 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 2006 ("the AGM"). The AGM
will be held in the boardroom at the Nictus Building, corner of Pretoria
and Dover Street, Randburg, Gauteng on Monday 21st of August 2006 at 14h00.
J L Olivier
Chairman
30 June 2006
Johannesburg30 June 2006
Sponsor on the JSE: KPMG Services (Pty) Ltd
Sponsor on the NSX: Namibia Equity Brokers (Pty) Ltd
Date: 30/06/2006 04:09:47 PM Produced by the JSE SENS Department
