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BJM
BJM
Barnard Jacobs Mellet - Unaudited Results Six Months Ended 30 September 2006
BARNARD JACOBS MELLET HOLDINGS LIMITED
Registration number: 1995/004798/06
Incorporated in the Republic of South Africa
ISIN: ZAE000014262 & JSE code: BJM
Unaudited results for the six months ended 30 September 2006
Normalised earnings up 44%
Basic earnings per share up 155%
Ordinary dividend per share 13,5 cents
Special dividend per share 5 cents
COMMENTARY
BJM generated after-tax profit of R78,4 million for the six months ended 30
September 2006 representing an increase of 116% on the R36,2 million for
the comparative period. Profit generated from operations amounted to
R31,6 million, 44% higher than the comparative period"s R22 million,
while the disposal of the Group"s holding of JSE shares resulted in an
after-tax profit
of R57 million.
Basic earnings per share of 94 cents represents an increase of 155% while
headline earnings per share of 25 cents, which includes an STC expense of
R10,6 million paid on the final FY06 dividend and the dividend in specie
distribution, represents an increase of 12%. Notwithstanding the
distribution of R105,5 million in capital to shareholders by means of
dividends, net asset value rose by 9% to 406 cps from 371 cps. The value
of BJM Private Client Services and Finsettle Services is not reflected in
NAV.
Operating income rose by 19% to R173 million while operating costs rose by
17%. The cost increases are fully attributable to both fixed and variable
cost increases in manpower and to variable settlement charges which are a
function of increased turnover. Domestic equity brokerage rose by 30% to
R103 million, while gross equity brokerage, including that of the
international offices, rose by 23% to R139 million.
The Group"s presence in the retail investment market continues to grow with
assets under administration having risen by 23% year-on-year to R22
billion together with an appreciable increase in contribution to Group
profitability.
The strong market during the period continued to have a positive impact on
the business and the entrenchment of the business model continues to
produce acceptable returns. Major contributions have come from BJM
Securities, BJM Private Client Services and BJM USA.
The Group resolved to distribute its holding of JSE shares to its
shareholders as a dividend in specie and this resulted in one JSE share
being distributed for every 70 BJM shares held. STC of R6,3 million and
CGT of R9,4 million were incurred as a result of this distribution. The
Group elected to fund these costs by selling the remaining JSE shares
withheld from the dividend in specie for this purpose. The residual
balance of R5 million will be declared as a special cash dividend payable
simultaneously with the interim dividend.
Prospects
The Group is well positioned to take advantage of continued favourable market
conditions but it should be noted that margins have recently come under
pressure from increased competition and structural change within our
industry.
Dividends
Notice is hereby given that the Board has declared an interim ordinary
dividend of 13,5 cents per share in respect of the six months ended 30
September 2006. The Board has further declared a special dividend of 5
cents per share in respect of the non-recurring income from the sale of
the balance of the JSE shares. Both dividends will be paid on Monday, 11
December 2006.
The last day to trade in the shares for purposes of entitlement to both
dividends will be Friday, 1 December 2006. The shares will commence
trading ex-dividends on Monday, 4 December 2006 and the record date will
be Friday, 8 December 2006.
Share certificates may not be dematerialised or rematerialised between
Monday, 4 December 2006 and Friday, 8 December 2006, both days inclusive.
Basis of preparation
The accounting policies and methods of computation used in the preparation of
these results comply with IFRS and are consistent in all material
respects with those adopted in the year ended 31 March 2006. The
September financial statements have not been audited or reviewed by the
company"s auditors KPMG Inc.
Kevin Jacobs John Bester
Chief Executive Officer Chairman
Johannesburg 15 November 2006
CONSOLIDATED INCOME STATEMENTS
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
R"000 R"000 R"000
Operating income 240 468 163 680 342 259
Interest income 16 847 15 390 29 037
Revenue 257 315 179 070 371 296
Operating costs (144 251) (123 684) (261 566)
Operating profit before finance
costs 113 064 55 386 109 730
Finance costs (544) (848) (2 097)
Preference dividends - (1 396) (1 396)
Profit before tax 112 520 53 142 106 237
Income tax expense (34 143) (16 899) (37 411)
Profit for the period 78 377 36 243 68 826
Basic earnings per share
(cents) 94,2 36,9 75,4
Diluted earnings per share
(cents) 80,2 32,9 66,0
CONSOLIDATED BALANCE SHEETS
As at As at As at
30 September 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
R"000 R"000 R"000
Assets
Non-current assets
Equipment 4 532 3 248 3 543
Investments 8 664 18 558 45 225
Goodwill 3 692 3 692 3 692
Deferred tax assets 20 417 17 192 11 272
37 305 42 690 63 732
Current assets
Amounts receivable in respect
of stockbroking activities 3 776 193 2 946 036 3 498 133
Margin on derivative financial
instruments 20 740 16 249 7 742
Trade and other receivables 53 059 12 453 11 861
Listed securities holdings 196 405 253 801 187 002
Unlisted promissory notes 15 425 - 24 276
Cash and cash equivalents 395 994 521 973 363 317
4 457 816 3 750 512 4 092 331
Total assets 4 495 121 3 793 202 4 156 063
Equity and liabilities
Equity
Share capital 827 933 833
Share premium 97 951 139 077 96 382
Non-distributable reserves 49 150 24 075 41 637
Accumulated profit 187 561 182 166 190 764
335 489 346 251 329 616
Non-current liabilities
Deferred tax liabilities 1 058 4 056 6 225
1 058 4 056 6 225
Current liabilities
Amounts payable in respect of
stockbroking activities 3 720 663 2 895 355 3 448 401
Listed securities sold short 310 670 447 543 269 360
Trade and other payables 90 352 90 410 80 862
Income tax payable 22 419 5 899 14 438
Shareholders for dividends 179 85 121
Bank overdraft 14 291 3 603 7 040
4 158 574 3 442 895 3 820 222
Total equity and liabilities 4 495 121 3 793 202 4 156 063
GROUP STATEMENTS OF CHANGES IN EQUITY
Non-
distri- Accumu-
Share Share butable lated
capital premium reserves profit Total
R"000 R"000 R"000 R"000 R"000
Balance at
1 April 2005 990 156 509 17 473 148 238 323 210
Foreign currency
translation
reserve - - (5 999) - (5 999)
Equity settled
share-based
payments - - (2) - (2)
BEE credential
recognition - - 606 - 606
Fair-value adjustment
on available for
sale instruments - - 36 134 - 36 134
Transfer to
accumulated profit - - (6 575) 6 575 -
Cancellation of
shares (121) (48 179) - - (48 300)
Treasury stock (36) (11 948) - - (11 984)
Profit for the
period - - - 68 826 68 826
Dividends paid - - - (32 875) (32 875)
Balance at
1 April 2006 833 96 382 41 637 190 764 329 616
Foreign currency
translation
reserve - - 34 366 - 34 366
Equity settled
share-based
payments - - 4 734 - 4 734
BEE credential
recognition - - 303 - 303
Fair-value
adjustment on
available for sale
instruments - - (31 890) - (31 890)
Treasury stock (6) 1 569 - - 1 563
Profit for the
period - - - 78 377 78 377
Dividends paid - - - (81 580) (81 580)
Balance at
30 September 2006 827 97 951 49 150 187 561 335 489
CONSOLIDATED CASH FLOW STATEMENTS
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
R"000 R"000 R"000
Cash (utilised in)/generated
from operating activities (74 844) 52 916 (60 630)
Cash generated from investing
activities 64 341 71 556 70 205
Cash generated from/(utilised in)
financing activities 1 563 (138 650) (181 444)
Net decrease in cash and cash
equivalents (8 940) (14 178) (171 869)
Cash and cash equivalents at
beginning of the period 356 277 534 145 534 145
Effect of exchange rate
fluctuations 34 366 (1 597) (5 999)
Cash and cash equivalents at
end of the period 381 703 518 370 356 277
RESULTS PER SHARE
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2006 2005 2006
Unaudited Unaudited Audited
Weighted average number of
shares in issue ("000) 83 230 98 195 91 249
Headline earnings per share
(cents) 25,2 22,4 60,0
Diluted headline earnings
per share (cents) 21,5 20,0 52,4
Dividend per share (cents) 90,6 9,0 38,0
Net asset value per share
(cents) 406 371 396
Reconciliation of headline
earnings per share R"000 R"000 R"000
Headline earnings 20 986 22 014 54 719
(Loss)/profit on disposal of
fixed assets (9) 12 (757)
Liquidation distribution
received - 6 560 7 092
Profit on sale of investment 57 400 7 657 7 772
Basic earnings 78 377 36 243 68 826
SEGMENTAL ANALYSIS
Settlement
and
Stock- Corporate prime
broking finance broking
BUSINESS SEGMENT R"000 R"000 R"000
September 2006 (Unaudited)
Revenue from external customers 185 003 1 897 10 305
Inter-segment revenue 2 151 55 1 628
Total revenue 187 154 1 952 11 933
Segment result 48 726 (377) 3 210
Finance costs
Income tax expense
Profit for the period
Segment assets 4 355 770 1 561 12 439
Segment liabilities 4 072 710 3 795 5 361
Non-cash items
Depreciation 769 21 105
BEE credential recognition - - -
September 2005 (Unaudited)
Revenue from external customers 148 650 3 413 8 694
Inter-segment revenue 2 267 - 2 707
Total revenue 150 917 3 413 11 401
Segment result 35 003 1 018 2 598
Finance costs
Preference dividend
Income tax expense
Profit for the period
Segment assets 3 692 335 1 082 8 599
Segment liabilities 3 435 391 3 178 3 954
Non-cash items
Depreciation 2 213 8 77
BEE credential recognition - - -
March 2006 (Audited)
Revenue from external customers 325 252 5 996 17 673
Inter-segment revenue 3 687 14 5 431
Total revenue 328 939 6 010 23 104
Segment result 84 903 1 428 5 360
Finance costs
Preference dividend
Income tax expense
Profit for the period
Segment assets 3 516 319 1 429 507 962
Segment liabilities 3 221 046 3 305 502 434
Non-cash items
Depreciation 1 976 16 168
BEE credential recognition - - -
SEGMENTAL ANALYSIS (continued)
Elimina- Consoli-
Other tions dated
BUSINESS SEGMENT R"000 R"000 R"000
September 2006 (Unaudited)
Revenue from external customers 60 110 - 257 315
Inter-segment revenue 19 607 (23 441) -
Total revenue 79 717 (23 441) 257 315
Segment result 72 796 (11 291) 113 064
Finance costs (544)
Income tax expense (34 143)
Profit for the period 78 377
Segment assets 251 719 (126 368) 4 495 121
Segment liabilities 100 014 (22 248) 4 159 632
Non-cash items
Depreciation 160 - 1 055
BEE credential recognition 303 - 303
September 2005 (Unaudited)
Revenue from external customers 18 313 - 179 070
Inter-segment revenue 14 641 (19 615) -
Total revenue 32 954 (19 615) 179 070
Segment result 19 379 (2 612) 55 386
Finance costs (848)
Preference dividend (1 396)
Income tax expense (16 899)
Profit for the period 36 243
Segment assets 317 282 (226 096) 3 793 202
Segment liabilities 18 911 (14 483) 3 446 951
Non-cash items
Depreciation 148 - 2 446
BEE credential recognition 303 - 303
March 2006 (Audited)
Revenue from external customers 22 375 - 371 296
Inter-segment revenue 24 572 (33 704) -
Total revenue 46 947 (33 704) 371 296
Segment result 20 060 (2 021) 109 730
Finance costs (2 097)
Preference dividend (1 396)
Income tax expense (37 411)
Profit for the period 68 826
Segment assets 258 945 (128 592) 4 156 063
Segment liabilities 116 662 (17 000) 3 826 447
Non-cash items
Depreciation 294 - 2 454
BEE credential recognition 606 - 606
Directors
JA Bester (Chairman), HSC Bester, KG Jacobs* (CEO), AM Mazwai*,
AR Martin, SM Mellet, TS Seopa
* Executive
Company secretary
A de Villiers
Registered office Transfer secretaries
Barnard Jacobs Mellet House Link Market Services South Africa
5 Sturdee Avenue (Pty) Limited
Rosebank, 2196 11 Diagonal Street
Johannesburg, 2001
Date: 15/11/2006 05:00:11 PM Produced by the JSE SENS Department
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