TIDMTBGR
RNS Number : 9338R
Tiso Blackstar Group SE
27 September 2017
Tiso Blackstar Group SE
Provisional Summarised Audited
Consolidated Annual Results for
the year ended 30 June 2017
Incorporated in England and Wales
Company number SE 000110
Registered as an external company with limited liability in
the
Republic of South Africa under registration number
2011/008274/10
Share codes: TBGR and TBG
ISIN: GB00BF37LF46
("Tiso Blackstar" or the "Company" or the "Group")
Highlights
-- Consolidated EBITDA(1) increased by 30.0% from R359.6
million* (GBP16.7 million*) to R467.6 million (GBP27.1
million);
-- Consolidated turnover increased to R9.1 billion (GBP529.5
million) from R8.1 billion* (GBP376.5 million*);
-- Core(2) term debt reduction from R730.0 million (GBP37.4
million) to R633.1 million* (GBP37.3 million*);
-- Proposed final dividend of 4.65912 cents (0.25935 pence) per share;
-- Strong performance from Media with EBITDA growth of 25.8%;
-- Hirt & Carter Group increased EBITDA from R234.8 million*
(GBP10.9 million*) to R245.0 million (GBP14.2 million);
-- Agreed sale of 22.9% interest in KTH for R1.5 billion (GBP88.3 million);
-- Blackstar Holdings Group achieved a level 2 B-BBEE
contributor status, post year end, based on the revised Broad-Based
Black Economic Empowerment Codes of Good Practice that came into
effect on 1 May 2015;
-- Listing transferred from Altx to JSE Main Board on 13 July 2017;
-- Successful migration of the Company from Malta to the United Kingdom;
-- Special dividend of R40.0 million (GBP2.4 million) expected
to be proposed on the successful closure of KTH sale; and
-- Financial highlights:
o Net profit before interest and tax of R284.0 million (GBP16.5
million) compared to a net loss before interest and tax of R677.2
million (GBP31.5 million) in the prior year; and
o Earnings per share of 2.95 cents per share (0.18 pence per
share) compared to a loss per share of 339.40 cents per share
(15.81 pence per share).
1 EBITDA is defined as profit before interest and tax after
adding back depreciation, amortisation, straight lining of leases
and cash settled share based payment expenses. Consolidated EBITDA
is inclusive of items outside the ordinary day-to-day activities,
while segmental EBITDA excludes items outside of the ordinary
day-to-day activities (refer note 10 for reconciliation between
EBITDA and net profit before interest and tax)
2 "Core" includes the segments Media, Hirt & Carter Group,
Broadcast and Content, and the segment Africa (excluding South
Africa) which comprises our interest in associates: Radio Africa
group in Kenya; Multimedia group in Ghana; and Coopers in Nigeria.
"Non-core" category includes Robor and CSI
* Pro forma comparative financial information has been provided
as a result in the change in the accounting treatment between the
current and prior years - refer Pro forma financial information
section
Executive summary
Overview
The financial year under review corresponded with exceptionally
difficult economic conditions. These were triggered by South Africa
entering a recession and exacerbated by political and policy
uncertainty across most of the regions in which we operate.
The Group's core businesses, housed under Blackstar Holdings
Group Proprietary Limited ("BHG", previously Times Media Group
Proprietary Limited), posted above-inflation growth despite these
conditions and higher input costs, and are well positioned for any
improvement in economic activity.
Earnings Before Interest Taxation Depreciation and Amortisation
("EBITDA") of the Group's non-core steel assets declined on the
back of very weak results from Robor Proprietary Limited ("Robor")
which offset EBITDA growth by Consolidated Steel Industries
Proprietary Limited ("CSI"). The steel industry is particularly
sensitive to the current lack of economic growth and this
performance is reflective, but strategies are being put in place to
stop further declines.
Core
The Group achieved growth in its core EBITDA despite significant
investment in digital media to position the business for the
future, and unwinding the costly legacy structures of a traditional
media house.
Notable core business highlights in the year included:
-- The move to our new purpose-built premises in Parktown,
Johannesburg, at a reduced rental, featuring South Africa's first
fully integrated multidisciplinary newsroom;
-- Successful introduction of a digital paywall for Business Day and Financial Mail;
-- Launch of our new eventing and conference centre - The Empire;
-- Hirt & Carter Group adding new major international retail
clients to its customer base on the strength of its unique position
in the market. Hirt & Carter Group provides wide-ranging retail
marketing solutions including information systems, pre-media
services, and printing and production services for the bulk of
South Africa's retailers and brand companies;
-- Our films division increasing its investment in both South
African and international movie productions to reduce its reliance
on pure licensed movie distribution;
-- Films, being appointed by Metro Goldwyn Mayer ("MGM") as its
official distribution partner in South Africa;
-- Our music business, Gallo Music, growing its repertoire of
frontline artists and securing the Idols SA franchise;
-- Ghanaian business Multimedia group recording significant
growth in revenues and audiences to become the country's leading TV
and Radio business;
-- Multi TV has the highest audience reach in Ghana around 33.0%; and
-- Radio in Ghana is regional, however Multimedia group stations
have the highest aggregate audience share in the two most populous
regions in Ghana - an audience share of 30.0% in Greater Accra and
25.0% in the Ashanti region.
Non-core
We made significant progress in strengthening our statement of
financial position through the agreed sale of our minority interest
in Kagiso Tiso Holdings Proprietary Limited ("KTH") to Kagiso Trust
Strategic Investments Proprietary Limited ("Kagiso") for R1.5
billion (GBP88.3 million).
Kagiso will settle the transaction through a series of purchases
of our shares in KTH over the next twelve to eighteen months. The
sale is expected to close once we receive regulatory approval.
EBITDA of the Group's non-core steel assets declined by 56.3% to
R60.9 million (GBP3.5 million) as a result of very weak results
from Robor which offset EBITDA growth by CSI. We remain intent on
disposing of these assets in the foreseeable future when market
conditions settle and the opportunity arises.
Pro forma financial information
As detailed in the interim results, Tiso Blackstar changed its
status and was no longer an Investment Entity as defined in IFRS 10
Consolidated Financial Statements, from 1 July 2016. Consequently,
the Group's subsidiaries, as well as property subsidiaries are
consolidated in terms of International Financial Reporting
Standards ("IFRS") from this date. The net identifiable assets of
the Group's subsidiaries were recognised on the statement of
financial position at fair value on 1 July 2016, resulting in
goodwill or gain on bargain purchase being recognised at that date.
Investments in associates - Radio Africa Limited ("Radio Africa
group"), Multimedia Group Limited ("Multimedia group") and Cooper
Communications Limited ("Coopers") - previously held at fair value,
were equity accounted from 1 July 2016.
In line with IFRS, the comparative period ended 30 June 2016 has
not been restated and is disclosed on a fair value basis as
previously reported.
To assist shareholders in assessing our performance over time,
pro forma financial information in the form of consolidated
comparatives has been prepared for Group debt, Group working
capital, Revenue and EBITDA, and the segmental analysis review, on
the assumption that our holdings in these subsidiaries and
associates were the same in comparative periods as for the
reporting period ended 30 June 2017 (refer note 10). The pro forma
financial information is further analysed by segment and allocated
to core and non-core categories to give the reader further insight
into our operations and those that are expected to be continuing,
i.e. core and non-continuing ("non-core"), collectively ("the pro
forma financial information").
The pro forma financial information has been prepared for
illustrative purposes only and due to the nature of the pro forma
financial information, the consolidated comparatives for Group
debt, Group working capital, Revenue and EBITDA, and the segmental
analysis review may not fairly present Tiso Blackstar's financial
position, changes in equity, results of operations or cash flows
after these adjustments.
The pro forma financial information for the years ended 30 June
2015 and 30 June 2016 is presented in a manner that is consistent
with the new accounting policies of Tiso Blackstar as at 30 June
2017.
The pro forma financial information has been prepared in
accordance with the JSE Listings Requirements and in compliance
with the SAICA Guide on Pro Forma Financial Information as if the
acquisitions had taken place at 1 July 2014 and 1 July 2015
respectively, being the commencement date of the financial period
for the purposes of the statement of comprehensive income at 30
June 2015 and 30 June 2016, being the last day of the financial
period for the purposes of the statement of financial position. The
pro forma financial information should be read in conjunction with
the unmodified assurance report of the independent reporting
accountants which is open for inspection at the Company's
registered office.
The Directors of Tiso Blackstar are responsible for the
preparation of the pro forma financial information.
A reconciliation of the pro forma EBITDA to the net profit for
the period has been provided in note 10. A summary of core and
non-core Revenue and EBITDA for the current and prior years if
presented on a consolidated basis is as follows:
Pro forma Pro forma
financial financial
information information
30 June 30 June 30 June 30 June
2016 2017 2017 2016
R'000 R'000 GBP'000 GBP'000
------------ --------- ---------------------- -------- ------------
REVENUE
3,813,607 4,220,296 Core 244,447 177,598
------------ --------- -------- ------------
1,722,654 2,045,556 Media 118,482 80,223
1,581,958 1,733,554 Hirt & Carter Group 100,411 73,671
508,995 441,186 Broadcast and Content 25,554 23,704
------------ --------- -------- ------------
4,200,150 4,906,857 Non-core 284,213 195,599
------------ --------- -------- ------------
1,928,257 2,428,645 CSI 140,671 89,798
2,271,893 2,478,212 Robor 143,542 105,801
------------ --------- -------- ------------
Segmental EBITDA
383,114 411,874 Core 23,858 17,843
------------ --------- -------- ------------
104,327 131,237 Media 7,602 4,859
234,842 244,968 Hirt & Carter Group 14,190 10,937
43,945 35,669 Broadcast and Content 2,066 2,047
------------ --------- -------- ------------
139,385 60,855 Non-core 3,524 6,492
------------ --------- -------- ------------
55,742 90,892 CSI 5,264 2,596
83,643 (30,037) Robor (1,740) 3,896
------------ --------- ---------------------- -------- ------------
The core category includes the segments Media, Hirt & Carter
Group, Broadcast and Content, and the segment Africa (excluding
South Africa) which comprises our interest in associates: Radio
Africa group in Kenya; Multimedia group in Ghana; and Coopers in
Nigeria.
The non-core category includes Robor and CSI.
Group debt review
Debt
30 June 30 June 30 June
Rm 2017 2016* 2015*
----------- ------- ------- -------
Core 804 839 913
Other 443 414 440
Non-core 139 129 116
----------- ------- ------- -------
Total debt 1,386 1,382 1,469
----------- ------- ------- -------
Tiso Blackstar's debt is split between core and non-core.
Non-core debt is expected to be assumed by purchasers as part of
the sales of non-core assets as these are implemented.
Core debt in Tiso Blackstar (held by BHG) includes R633.1
million, GBP37.3 million (2016: R730.0 million*, GBP37.4 million*)
of term debt and R159.4 million, GBP9.4 million (2016: R94.0
million*, GBP4.8 million*) of asset-based finance.
During the year, core acquisition debt decreased 13.3% in line
with contractual repayments; asset-based finance grew 69.6% after
acquiring new equipment for Hirt & Carter Group, and the net
cash position exceeded its overdrafts.
Other debt held at head-office level by Tiso Blackstar Holdings
SE includes R407.2 million, GBP24.0 million (2016: R413.8 million,
GBP21.2 million) of term debt, which will be repaid in full with
part of the cash proceeds received from the sale of KTH.
Non-core debt is inclusive of term debt and asset-based finance
held by CSI and Robor. At the financial year end, Robor had term
debt of R83.7 million, GBP4.9 million (2016: R86.1 million*, GBP4.4
million*) and net working capital facility (consisting of factored
debtors, stock debt and overdrafts) of R420.2 million, GBP24.7
million (2016: R361.0 million*, GBP18.5 million*). CSI does not
have term debt and, at 30 June 2017, had R36.1 million, GBP2.1
million (2016: R35.6 million*, GBP1.8 million*) of asset-based
finance and net working capital facility utilisation of R372.4
million, GBP15.6 million (2016: R265.7 million*, GBP13.6 million*).
Working capital facility amounts are not included in the debt
figures above.
* Pro forma comparative financial information has been provided
as a result in the change in the accounting treatment between the
current and prior years - refer Pro forma financial information
section
Working capital review
Rigorous control of working capital preserved cash flow
generation over the year with a R6.1 million (GBP0.4 million)
increase in net working capital on the core businesses and a R24.8
million (GBP1.5 million) reduction in net working capital from the
non-core businesses.
Segmental review
Core
Media
Media turned in a strong performance in the face of difficult
trading conditions, growing EBITDA by 25.8% to R131.2 million
(GBP7.6 million) despite revenue declines in traditional media, and
significant investment in digital to position the business for the
future. Media generated revenue of R2.0 billion (GBP118.5 million)
for the year.
Newspaper EBITDA grew by 37.2% after declines in recent years,
reflecting the focus on costs, the publication of high-margin
supplements and 360deg advertising offerings that helped grow
market share.
The focus on growing subscriber bases, while containing costly
distribution spend, continued. Notably, the launch of the
BusinessLive subscription paywall grew the Group's subscription
base by over 10.0% across our business titles in under three
months. Post year end, the redesigned Sunday Times and Times
newspapers began introducing a new paywall to their online
products. This mirrors the BusinessLive strategy as well as the
global trend toward paywalls and growing 'paid for' reader
revenue.
Magazines remain a strong contributor, thanks to innovative
custom publishing products and continued success of the SA
HomeOwner franchise. Newspaper brand extensions such as Business
Day's Wanted, Sowetan's S-Mag and Sunday Times' Edit all
contributed to profitability.
The digital and events areas of Media are in the investment
phase and showing excellent progress.
Digital investment levels were retained as advertising grew in
line with market trends, although revenues still lag behind
audience figures. The business is focused on developing innovative
revenue streams that include native advertising, multimedia income
and 'paid for' reading models. This is especially important as
traditional digital advertising becomes increasingly pressured by
programmatic advertising trends.
Eventing revenue grew by leveraging the excellent brands in the
business and building bespoke events with higher margins to build
sustainability. The business also opened its new eventing home -
The Empire - which is already generating good third-party revenue
as a pure eventing space. The business has been bolstered by the
addition of a highly-rated sponsorship team that is already having
a positive impact.
Smartcall Technology Solutions Proprietary Limited ("STS"),
which provides mobile content and technology services in South
Africa and sub-Saharan Africa, maintained solid earnings and
revenue growth. STS continues to look to develop new products and
services in a fast-evolving market, especially outside a maturing
South African market.
Broadcast and Content
The Broadcast and Content segment produced strong results all
round, except for its films business which remains pressured by
changed market conditions. This segment generated revenue of R441.2
million (GBP25.6 million) and EBITDA of R35.7 million (GBP2.1
million) during the year.
The most positive performance in the segment was in TV and Radio
which, combined, grew revenue 10.3% and EBITDA by over 60.0%. TV
production business, Ochre, and the Group's TV channels posted
solid revenue and EBITDA growth.
Early-stage SA radio investments continued to make good
progress, growing turnover while maintaining their respective
current cost bases. Revenue for Mpumalanga's Rise FM grew by 40.0%
and Vuma FM in KwaZulu-Natal grew revenue by 20.0%.
Despite a softer earnings performance, the films business is
well positioned for growth over the next two years. This follows a
restructuring to focus on owned content, good theatrical
performance and continued success as Africa's premier all-rights
distributor of filmed content.
Tiso Blackstar Group Content division extended its
representation of studio partners after being appointed by MGM as
its official distribution partner in South Africa across select
content platforms with respect to new theatrical features. This
partnership further strengthens the Group's representation of its
existing portfolio of partners, being 20th Century Fox, Warner
Bros. Pictures and numerous other key independent studio
partners.
Gallo Music remained profitable in a turbulent market,
characterised by the continued shift from physical to digital and
increasing emergence of music streaming as the core driver of
future revenues. Gallo Records made progress in developing and
establishing new frontline artists including Nozipho, Jeremy Loops,
Kabomo, The Parlotones and Oliver Mtukudzi. It also recently
secured the prestigious Idols SA music franchise. Gallo Music
Publishing grew EBITDA by using its owned catalogue of music. Gallo
Music remains one of Africa's leading music players and is poised
to grow as the streaming market develops further. The business
continues to seek opportunities in music across the continent.
Hirt & Carter Group ("H&C")
H&C performed well in a difficult sales environment,
increasing earnings and margins by focusing on costs and
efficiencies. This segment reported a 4.3% increase in EBITDA from
R234.8 million* (GBP10.9 million*) in 2016 to R245.0 million
(GBP14.2 million) in 2017. The integration of Uniprint and H&C
continues to have positive results for the group and new
opportunities have been identified. Cost reduction initiatives are
under way, which will reflect positively in the next financial
year's results.
H&C Software continues to grow revenue and EBITDA.
Investment in new digital technology contributed to an improved
margin and allowed the group to drive further innovation in the
market. Triumph Packaging was successfully integrated into Uniprint
and contributed to EBITDA over the period.
H&C has commissioned a new combined head office to house all
its business units. This facility will be ready mid-2018 and is
expected to improve efficiencies across business units and enhance
customer service.
H&C acquired a 51.0% interest in signage and branding
specialist Bothma Branding Solutions Proprietary Limited ("BBS"),
effective 1 July 2017. This will allow H&C to extend its client
offering and further contribute to earnings.
Africa (excluding South Africa)
This segment comprises our African interests outside South
Africa: a 32.3% interest in Multimedia group in Ghana, 49.0% in
Radio Africa group in Kenya, and an effective 36.5% interest in
Coopers in Nigeria.
Multimedia group Ghana performed well in the period, with its
television arm delivering on its potential, after previous losses.
It grew revenue 40.0% in its first half to June and EBITDA was up
substantially on the prior year.
Radio Africa group felt the pressure of weak economic conditions
ahead of August's elections and, as a result, revenue decreased by
13.7%. It has since restructured its cost base, repositioned its
radio business and partnered with another leading media player in
the country to further develop its Bamba TV platform.
Via our investments in Coopers and Radio Africa group, Tiso
Blackstar owns an effective 36.5% interest in Lagos Talks 91.3 FM -
a 24-hour talk radio station in Lagos, Nigeria, which launched in
September 2016 at the peak of the economic recession. Despite this,
Lagos Talks has steadily built an audience and recently secured
English Premier League live broadcast rights that include both the
review and preview of league games.
* Pro forma comparative financial information has been provided
as a result in the change in the accounting treatment between the
current and prior years - refer Pro forma financial information
section
Non-core investments
Overview
South African steel has, historically, been supplied by
ArcelorMittal SA Limited ("AMSA") in a monopolistic fashion where
the supplier dictates terms, volumes and prices to distributors,
fabricators and construction contractors. Since the acquisition of
Iscor by ArcelorMittal ("AM"), AMSA's international/export markets
are now primarily being serviced by AM through its international
network of subsidiaries. Over the past five years, new-technology
Chinese steel mills have come on-line and are principally
responsible for at least half of the 600 million-ton oversupply of
steel worldwide.
In addition to the state of the international steel market, a
number of issues relate to AMSA operations in South Africa
specifically. These have led to the market being dominated by
uncompetitive pricing and credit terms, compounded by unreliable
steel supply and quality, and slowing production. Unsustainable
working capital investment has meant high borrowings and low, if
any, returns to shareholders. Understandably, these local issues
have increased demand for internationally produced steel.
Robor
Robor had a very difficult year. The operating environment and
local uncertainty resulted in the company recording an EBITDA loss
for the year of R30.0 million, GBP1.7 million (2016: EBITDA profit
of R83.6 million*, GBP3.9 million*). Lower volumes and margins, and
the lack of real demand, materially impacted its business.
Management took steps to address market conditions by focusing on
costs, efficiencies and cash flow. Robor's exports into
international and other African markets grew while South African
market sales declined. During the year, Robor completed the
acquisition of the remaining 50.0% of Mine Support Products
Proprietary Limited ("MSP").
Consolidated Steel Industries ("CSI")
CSI's principal divisions are Global Roofing Solutions and
Stalcor. CSI increased revenue by 26.0% and EBITDA by 63.1%,
reporting revenue of R2.4 billion (GBP140.7 million) and EBITDA of
R90.9 million (GBP5.3 million) for the current financial year. This
result was achieved despite a struggling South African economy
which has recorded significant year-on-year shrinkages in the
construction and steel fabrication industries.
CSI management expects further contractions in the local economy
to manifest in flat revenue and profits in the coming year,
however, CSI's growing sub-Saharan Africa market share bodes well
for future revenue and profit growth. The group's Africa initiative
requires intensive management to mitigate the vagaries of business
in these countries.
Working capital management remains a focus area for CSI,
particularly given the challenges of increased volumes and higher
steel prices.
KTH
KTH is an investment holding company whose investments include
market leaders in key sectors such as media, resources,
infrastructure, power and financial services, and comprise a mix of
listed and private investments. Further details on KTH can be found
on www.kagiso.com.
On 6 July 2017, Tiso Blackstar updated shareholders on the
conditional sale of its interest in KTH for R1.5 billion (GBP88.3
million). The Company signed a share purchase agreement with KTH
and Kagiso whereby Kagiso will purchase Tiso Blackstar's entire
shareholding in KTH, subject to the fulfilment of suspensive
conditions. All the conditions have been completed with the
exception of the finalisation of the funding agreements and the
approval from the competition authorities.
Financial review
Tiso Blackstar's status as an Investment Entity changed as a
result of its revised strategy, and it now consolidates its
investment in subsidiaries and equity accounts for its investments
in associates from 1 July 2016. Due to this, the prior year results
are not comparable. These financial figures comprise the new base
going forward.
Tiso Blackstar generated a profit before interest and tax of
R284.0 million (GBP16.5 million) and consolidated EBITDA of R467.6
million (GBP27.1 million), after adding back depreciation,
amortisation and straight lining of leases of R178.8 million
(GBP10.3 million) and the cash settled share based incentive
payment of R4.8 million (GBP0.3 million). Tiso Blackstar generated
a loss after taxation of R15.4 million (GBP0.9 million) for the
year ended 30 June 2017.
Operating expenses of R1.4 billion (GBP82.3 million) mainly
include the day-to-day operational expenses of R43.7 million
(GBP2.5 million) to run Tiso Blackstar head office, R848.4 million
(GBP49.1 million) to run the core business BHG, R501.8 million
(GBP29.1 million) to run the non-core businesses CSI and Robor, and
transaction related costs of R10.2 million (GBP0.6 million) the
majority of which are costs arising on the shareholder approved
migration to the UK. Costs are closely monitored and action is
taken wherever possible to cut any excess expenditure in order to
improve the profitability of the Group.
Other gains of R70.2 million (GBP4.1 million) mainly comprise of
the following: a R22.1 million (GBP1.3 million) profit on disposal
of property, plant and equipment; a R11.4 million (GBP0.7 million)
reversal of impairment on property, plant and equipment; a R41.7
million (GBP2.4 million) gain arising on step up acquisitions from
associate to subsidiary; a R4.9 million (GBP0.3 million) fair value
loss to investment property; a R7.8 million (GBP0.5 million) profit
on disposal of investment properties; a R3.1 million (GBP0.1
million) foreign exchange loss arising on translation of foreign
amounts and a R25.3 million (GBP1.5 million) impairment loss on
equity investments.
Share of profit of associates of R7.4 million (GBP0.4 million)
mainly comprises the Group's share of profits in Radio Africa
group, Multimedia group and Coopers.
Other comprehensive loss of R70.5 million (profit of GBP24.0
million) recognised directly in equity (namely the Foreign Currency
Translation Reserve) arose on translation of CSI's African
subsidiaries and the Group's African based associates to Rands (a
loss of R70.5 million, GBP4.1 million) and a profit of GBP28.1
million on translation of the Group's results from Rands to Pounds
Sterling. An actuarial gain of R2.7 million (GBP0.2 million) arose
on the valuation of the post retirement medical aid ("PRMA")
liability in BHG.
Bank overdrafts and other short term borrowing facilities of
R886.8 million (GBP52.2 million) includes working capital
facilities of R792.6 million (GBP46.7 million) and bank overdrafts
of R94.2 million (GBP5.5 million), held by the trading
subsidiaries. Tiso Blackstar generated cash from operations of
R312.1 million (GBP17.5 million) during the reporting period.
Cash out flow from investing activities of R882.6 million
(GBP47.0 million) mainly comprises the net cash balances and other
short term borrowing facilities of the Deemed Acquisitions (BHG,
CSI and Robor - refer note 2) of R714.0 million (GBP37.5 million)
on 1 July 2016.
Cash out flow from financing activities of R154.5 million
(GBP8.9 million) mainly comprises repayment of borrowings of R328.9
million (GBP19.1 million) (including repayment of finance leases,
instalment sale agreements and other financial labilities) and
R23.8 million (GBP1.4 million) dividend paid to shareholders,
during the current year.
As an Investment Entity which fair valued its investments, the
Group reported total assets of R3.9 billion (GBP200.8 million) as
at 30 June 2016, and on a consolidated basis, total assets amounted
to R8.4 billion (GBP495.7 million) as at 30 June 2017.
At 30 June 2017 and 30 June 2016, the investment in KTH met the
requirements of IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations, and has been separately classified and
disclosed from other investment in associates, as a non-current
asset held for sale and a discontinued operation.
Changes in the fair value, dividends and fees earned, and
relating tax charges, attributable to KTH have been disclosed
separately from continuing operations as a discontinued operation.
The loss from the discontinued operation of R7.6 million (GBP0.4
million) includes a R20.0 million (GBP1.2 million) loss on
remeasurement of fair value less costs to sell; a R13.2 million
(GBP0.8 million) dividend received; and a R1.1 million (GBP0.07
million) in directors' fees earned.
On implementation of the BHG and KTH acquisitions during June
2015, Tiso Blackstar raised debt of R534.0 million (GBP28.0
million) which was utilised to settle the cash consideration and to
repay the existing facility as full and final settlement. This debt
was reduced to R407.2 million (GBP24.0 million) by 30 June 2017, by
utilising proceeds from disposals and free cash. R35.5 million
(GBP2.1 million) of the general banking facility was utilised by 30
June 2017. The term funding raised by BHG in June 2015 of R800.0
million (GBP42.0 million) was reduced to R633.1 million (GBP37.3
million) by 30 June 2017.
During the current financial year, the Company repurchased a
total of 1,944,424 Tiso Blackstar shares in the open market at an
average price per share of R9.41 (GBP0.53) and a total cost of
R18.3 million (GBP1.0 million).
At 30 June 2017, Tiso Blackstar held 3,012,349 (2016: 1,067,925)
treasury shares. The award under the long term Management Incentive
Scheme was issued from treasury shares on 30 June 2017 but are not
considered issued for IFRS purposes. A dividend of R12.0 million
(GBP0.7 million) was paid to shareholders in December 2016 in
respect of the prior financial year, and a R12.0 million (GBP0.7
million) interim dividend was paid to shareholders in March 2017 in
respect of the current financial year. A final dividend of R12.5
million (GBP0.7 million) has been proposed in respect of the
current financial year.
Dividends
In determining dividends, the Company considers its current
financial flexibility, the expected net cash flows from assets, as
well as expected strategic corporate actions. It also considers the
current share trading price, and the opportunity to buy back Tiso
Blackstar shares to enhance shareholder return. The Company places
emphasis on making some dividend payments on an interim and final
basis, with a view to growing the dividend over time. An interim
dividend of 4.47275 South African cents (0.28465 pence) per
ordinary share was paid on 20 March 2017. The Tiso Blackstar Board
has recommended a final dividend of 4.65912 South African cents
(0.25935 pence) per ordinary share, which is subject to shareholder
approval at the next Annual General Meeting ("AGM"). The timetable
for the dividend, which includes the record and payment dates, will
be released along with the timetable for the AGM in due course.
In addition to the above, a special dividend of R40.0 million
(GBP2.4 million(#) ) has been approved by the Tiso Blackstar Board
to be paid to shareholders conditional on completion of the KTH
sale, and in due course shareholders will receive the relevant
information regarding the special dividend.
# Pounds Sterling equivalent provided for disclosure purposes
determined using the closing exchange rate on 30 June 2017 as noted
above. Special dividend per share to be determined on declaration
date based on the number of shares in issue
Black economic empowerment
Tiso Blackstar remains committed to transformation. BHG was
proud to achieve a level 2 B-BBEE contributor status with a
procurement recognition level of 125.0% and more than 51.0% black
ownership. BHG was audited based on the revised Broad-Based Black
Economic Empowerment Codes of Good Practice that came into effect
on 1 May 2015.
Outlook
The core businesses have evolved over the past year and we look
forward to ongoing growth in H&C and continuous improvement in
Media's performance.
Proceeds from the sale of our KTH investment will give Tiso
Blackstar a stronger balance sheet and will position the Group to
capitalise on future opportunities.
Although, tough economic conditions have persisted in making the
business environment very challenging, particularly in the steel
industry, management in the extended Group are taking the necessary
steps to ensure operations stabilise and remain as profitable as
possible. This includes focusing on profit margins, reducing
working capital levels, an ongoing drive to reduce operating costs
and a continuous search for innovative ways to increase revenue and
add new income streams.
AD Bonamour DKT Adomakoh
Chief Executive Officer Non-executive Chairman
27 September 2017
Summarised consolidated statements of income and other
comprehensive income
for the year ended 30 June 2017
On a fair value On a consolidated
basis basis
(Investment (Trading Entity):
Entity)^:
30 June 30 June 30 June 30 June
2016 2016 2017 2017
GBP'000 R'000 R'000 GBP'000
-------- ----------- ------------------------------------------------- ------------ ----------
Continuing operations
559 12,002 Revenue 9,141,010 529,462
- - Cost of sales (7,421,440) (429,862)
-------- ----------- ------------------------------------------------- ------------ ----------
559 12,002 Gross profit 1,719,570 99,600
(2,899) (62,222) Operating expenses (1,420,826) (82,293)
Depreciation, amortisation
(77) (1,652) and straight lining of leases (178,814) (10,317)
19,137 410,950 Other income 93,849 5,436
-------- ----------- ------------------------------------------------- ------------ ----------
16,720 359,078 Operating profit 213,779 12,426
(48,258) (1,036,274) Other gains (losses) 70,194 4,081
-------- ----------- ------------------------------------------------- ------------ ----------
(31,538) (677,196) Net profit (loss) 283,973 16,507
(2,276) (48,865) Net finance costs (240,700) (13,942)
-------- ----------- ------------ ----------
58 1,251 Finance income 8,175 474
Finance costs (refer note
(2,334) (50,116) 4) (248,875) (14,416)
-------- ----------- ------------ ----------
Share of profit of associates
- - - equity accounted 7,395 416
-------- ----------- ------------------------------------------------- ------------ ----------
(33,814) (726,061) Profit (Loss) before taxation 50,668 2,981
(45) (955) Taxation (58,508) (3,409)
-------- ----------- ------------------------------------------------- ------------ ----------
(33,859) (727,016) Loss from continuing operations (7,840) (428)
Loss from discontinued operation,
net of taxation (refer note
(8,375) (179,853) 5) (7,607) (441)
-------- ----------- ------------------------------------------------- ------------ ----------
(42,234) (906,869) Loss for the year (15,447) (869)
-------- ----------- ------------------------------------------------- ------------ ----------
Loss for the year attributable
to:
(42,234) (906,869) Equity holders of the parent 7,823 486
- - Non-controlling interest (23,270) (1,355)
-------- ----------- ------------------------------------------------- ------------ ----------
(42,234) (906,869) (15,447) (869)
-------- ----------- ------------------------------------------------- ------------ ----------
Other comprehensive income
(loss), net of taxation items
that may subsequently be
reclassified to profit and
(8,887) - loss (refer note 6): (70,471) 23,955
-------- ----------- ------------ ----------
Currency translation differences
on the translation of foreign
- - operations (70,471) (4,118)
Currency translation differences
on the translation of Rand
denominated Group entities
(8,887) - to presentational currency - 28,073
-------- ----------- ------------ ----------
- - Actuarial gains on PRMA 2,667 154
-------- ----------- ------------------------------------------------- ------------ ----------
Other comprehensive (loss)
(8,887) - income for the year (67,804) 24,109
-------- ----------- ------------------------------------------------- ------------ ----------
Total comprehensive (loss)
(51,121) (906,869) income for the year (83,251) 23,240
-------- ----------- ------------------------------------------------- ------------ ----------
Total comprehensive (loss)
income attributable to:
(51,121) (906,869) Equity holders of the parent (58,701) 23,167
- - Non-controlling interest (24,550) 73
-------- ----------- ------------------------------------------------- ------------ ----------
(51,121) (906,869) (83,251) 23,240
-------- ----------- ------------------------------------------------- ------------ ----------
Basic earnings (losses) per
ordinary share (in cents/pence)
attributable to equity holders
(15.81) (339.40) (refer note 7) 2.95 0.18
-------- ----------- ------------------------------------------------- ------------ ----------
Diluted earnings (losses)
per ordinary share (in cents/pence)
attributable to equity holders
(15.81) (339.40) (refer note 7) 2.93 0.18
-------- ----------- ------------------------------------------------- ------------ ----------
(Basic earnings (losses)
per ordinary share (in cents/pence)attributable
to equity holders from continuing
(12.67) (272.09) operations (refer note 7) 5.82 0.35
-------- ----------- ------------------------------------------------- ------------ ----------
(Diluted earnings (losses)
per ordinary share (in cents/pence)
attributable to equity holders
from continuing operations
(12.67) (272.09) (refer note 7) 5.78 0.35
-------- ----------- ------------------------------------------------- ------------ ----------
(Weighted average number
of shares net of treasury
shares, in thousands) (refer
267,199 267,199 note 7) 265,279 265,279
-------- ----------- ------------------------------------------------- ------------ ----------
Weighted average number of
shares in issue (in thousands)
267,199 267,199 (refer note 7) 266,879 266,879
-------- ----------- ------------------------------------------------- ------------ ----------
^ Refer note 3
Summarised consolidated statement of financial position
as at 30 June 2017
On a consolidated
On a fair value basis basis
(Investment Entity)^: (Trading Entity):
30 June 30 June 30 June 30 June
2016 2016 2017 2017
GBP'000 R'000 R'000 GBP'000
----------- ----------- ----------------------------------------------- ---------- --------
ASSETS
121,924 2,376,644 Non-current assets 3,964,466 233,440
----------- ----------- ---------- --------
222 4,331 Property, plant and equipment 965,816 56,875
- - Investment property 12,674 746
1 12 Straight lining of lease asset 169 10
- - Goodwill 1,224,936 72,126
- - Intangible assets 1,289,933 75,953
Financial assets designated at fair value
120,805 2,354,830 through profit and loss - -
----------- ----------- ---------- --------
100,300 1,955,133 Net investments in subsidiaries - -
20,505 399,697 Net investments in associates - -
----------- ----------- ---------- --------
- - Investments in associates - equity accounted 346,161 20,383
776 15,128 Other investments, loans and receivables 29,704 1,749
120 2,343 Deferred taxation 95,073 5,598
----------- ----------- ---------- --------
78,866 1,537,313 Current assets 4,453,348 262,221
----------- ----------- ---------- --------
- - Inventories 1,088,622 64,100
1 21 Straight lining of lease asset 3,282 193
206 4,008 Trade and other receivables 1,656,453 97,537
10 198 Current tax assets 30,090 1,770
671 13,086 Cash and cash equivalents (refer note 8) 174,901 10,298
77,978 1,520,000 Non-current asset held for sale 1,500,000 88,323
----------- ----------- ----------------------------------------------- ---------- --------
200,790 3,913,957 TOTAL ASSETS 8,417,814 495,661
----------- ----------- ----------------------------------------------- ---------- --------
EQUITY AND LIABILITIES
Capital and reserves attributable to the
179,223 3,493,549 Group's equity holders 3,378,132 199,159
----------- ----------- ---------- --------
203,564 3,255,248 Share capital and premium 3,255,248 203,564
(468) (9,797) Treasury shares (27,079) (1,448)
4,599 52,173 Other reserves 66,716 5,448
(50,549) - Foreign currency translation reserve (68,455) (27,986)
22,077 195,925 Retained earnings 151,702 19,581
----------- ----------- ---------- --------
- - Non-controlling interest 190,762 10,990
----------- ----------- ----------------------------------------------- ---------- --------
179,223 3,493,549 TOTAL EQUITY 3,568,894 210,149
----------- ----------- ----------------------------------------------- ---------- --------
LIABILITIES
20,357 395,084 Non-current liabilities 1,737,972 102,335
----------- ----------- ---------- --------
20,353 395,000 Borrowings 1,069,260 62,960
- - Straight lining of lease liability 83,907 4,941
- - Other financial liabilities 8,491 500
- - Finance lease and instalment sale obligations 135,956 8,005
- - Post-retirement benefits liabilities 54,355 3,201
- - Provisions 11,246 662
4 84 Deferred taxation 374,757 22,066
----------- ----------- ---------- --------
1,210 25,324 Current liabilities 3,110,948 183,177
----------- ----------- ---------- --------
874 18,766 Borrowings 120,885 7,117
63 1,228 Straight lining of lease liability - -
- - Other financial liabilities 6,660 392
- - Finance lease and instalment sale obligations 59,495 3,503
- - Post-retirement benefits liabilities 7,551 445
- - Provisions 115,441 6,797
265 5,170 Trade and other payables 1,882,123 110,823
8 160 Current tax liabilities 31,951 1,881
Bank overdrafts and other short term borrowing
- - facilities (refer note 8) 886,842 52,219
----------- ----------- ----------------------------------------------- ---------- --------
21,567 420,408 TOTAL LIABILITIES 4,848,920 285,512
----------- ----------- ----------------------------------------------- ---------- --------
200,790 3,913,957 TOTAL EQUITY AND LIABILITIES 8,417,814 495,661
----------- ----------- ----------------------------------------------- ---------- --------
^ Refer note 3
Summarised consolidated statement of changes in equity
for the year ended 30 June 2017
Foreign Attributable
currency to Non-
Share Share Treasury Other translation Retained equity controlling Total
capital premium shares reserves reserve earnings holders interest equity
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
-------------------- --------- ------- -------- -------- ----------- --------- ------------ ----------- ---------
Balance as at 1
July 2015 2,535,442 701,781 - 52,173 - 1,113,252 4,402,648 (334) 4,402,314
Total comprehensive
loss for the year: - - - - - (906,869) (906,869) - (906,869)
--------- ------- -------- -------- ----------- --------- ------------ ----------- ---------
Loss for the year - - - - - (906,869) (906,869) - (906,869)
Other comprehensive
loss for the year - - - - - - - - -
--------- ------- -------- -------- ----------- --------- ------------ ----------- ---------
Transactions with
owners: 18,594 (569) (9,797) - - (10,458) (2,230) 334 (1,896)
--------- ------- -------- -------- ----------- --------- ------------ ----------- ---------
Shares issued for
investment
acquisitions 18,594 (569) 1,293 - - - 19,318 - 19,318
Purchase of treasury
shares - - (11,090) - - - (11,090) - (11,090)
Disposal of entire
interest in
consolidated
subsidiary - - - - - (445) (445) 334 (111)
Dividends paid - - - - - (10,013) (10,013) - (10,013)
-------------------- --------- ------- -------- -------- ----------- --------- ------------ ----------- ---------
Balance as at 30
June 2016 2,554,036 701,212 (9,797) 52,173 - 195,925 3,493,549 - 3,493,549
-------------------- --------- ------- -------- -------- ----------- --------- ------------ ----------- ---------
Total comprehensive
loss for the year: - - - 2,667 (69,191) 7,823 (58,701) (24,550) (83,251)
--------- ------- -------- -------- ----------- --------- ------------ ----------- ---------
Loss for the year - - - - - 7,823 7,823 (23,270) (15,447)
Other comprehensive
loss for the year - - - 2,667 (69,191) - (66,524) (1,280) (67,804)
--------- ------- -------- -------- ----------- --------- ------------ ----------- ---------
Transactions with
owners: - - (17,282) 11,876 736 (52,046) (56,716) 215,312 158,596
--------- ------- -------- -------- ----------- --------- ------------ ----------- ---------
Deemed Acquisitions - - - 491 736 8 1,235 204,295 205,530
Issued in terms
of the long term
Management Incentive
Scheme - - 1,044 (1,044) - - - - -
Purchase of treasury
shares - - (18,326) - - - (18,326) - (18,326)
On acquisition
of
subsidiary/business - - - (2,829) - (28,251) (31,080) 20,407 (10,673)
Equity loans from
non-controlling
interest - - - 15,258 - - 15,258 - 15,258
Dividends paid - - - - - (23,803) (23,803) (9,390) (33,193)
-------------------- --------- ------- -------- -------- ----------- --------- ------------ ----------- ---------
Balance as at 30
June 2017 2,554,036 701,212 (27,079) 66,716 (68,455) 151,702 3,378,132 190,762 3,568,894
-------------------- --------- ------- -------- -------- ----------- --------- ------------ ----------- ---------
Summarised consolidated statement of changes in equity
for the year ended 30 June 2017
Foreign Attributable
currency to Non-
Share Share Treasury Other translation Retained equity controlling Total
capital premium shares reserves reserve earnings holders interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- ------- ------- -------- -------- ----------- -------- ------------ ----------- --------
Balance as at 1
July 2015 163,310 39,391 - 4,599 (41,662) 64,796 230,434 (18) 230,416
Total comprehensive
loss for the year: - - - - (8,887) (42,234) (51,121) - (51,121)
------- ------- -------- -------- ----------- -------- ------------ ----------- --------
Loss for the year - - - - - (42,234) (42,234) - (42,234)
Other comprehensive
loss for the year - - - - (8,887) - (8,887) - (8,887)
------- ------- -------- -------- ----------- -------- ------------ ----------- --------
Transactions with
owners: 891 (28) (468) - - (485) (90) 18 (72)
------- ------- -------- -------- ----------- -------- ------------ ----------- --------
Shares issued for
investment
acquisitions 891 (28) 62 - - - 925 - 925
Purchase of treasury
shares - - (530) - - - (530) - (530)
Disposal of entire
interest in
consolidated
subsidiary - - - - - (19) (19) 18 (1)
Dividends paid - - - - - (466) (466) - (466)
-------------------- ------- ------- -------- -------- ----------- -------- ------------ ----------- --------
Balance as at 30
June 2016 164,201 39,363 (468) 4,599 (50,549) 22,077 179,223 - 179,223
-------------------- ------- ------- -------- -------- ----------- -------- ------------ ----------- --------
Total comprehensive
income for the
year: - - - 154 22,527 486 23,167 73 23,240
------- ------- -------- -------- ----------- -------- ------------ ----------- --------
Loss for the year - - - - - 486 486 (1,355) (869)
Other comprehensive
income for the
year - - - 154 22,527 - 22,681 1,428 24,109
------- ------- -------- -------- ----------- -------- ------------ ----------- --------
Transactions with
owners: - - (980) 695 36 (2,982) (3,231) 10,917 7,686
------- ------- -------- -------- ----------- -------- ------------ ----------- --------
Deemed Acquisitions - - - 193 36 - 229 10,481 10,710
Issued in terms
of the long term
Management Incentive
Scheme - - 60 (60) - - - - -
Purchase of treasury
shares - - (1,040) - - - (1,040) - (1,040)
On acquisition
of
subsidiary/business - - - (320) - (1,628) (1,948) 966 (982)
Equity loans from
non-controlling
interest - - - 882 - - 882 - 882
Dividends paid - - - - - (1,354) (1,354) (530) (1,884)
-------------------- ------- ------- -------- -------- ----------- -------- ------------ ----------- --------
Balance as at 30
June 2017 164,201 39,363 (1,448) 5,448 (27,986) 19,581 199,159 10,990 210,149
-------------------- ------- ------- -------- -------- ----------- -------- ------------ ----------- --------
A 2016 final dividend of 4.47 South African cents, 0.25 pence
per ordinary share was paid on 15 December 2016.
A 2017 interim dividend of 4.47 South African cents, 0.28 pence
per ordinary share was paid on 20 March 2017.
A 2017 final dividend of 4.65912 South African cents, 0.25935
pence per ordinary share was proposed on 19 September 2017.
Summarised consolidated statement of cash flows
as at 30 June 2017
On a fair value basis On a consolidated
(Investment Entity): basis
(Trading Entity):
30 June 30 June 30 June 30 June
2016 2016 2017 2017
GBP'000 R'000 R'000 GBP'000
---------- ----------- ----------------------------------------------------- ----------- --------
Cash flow from operating activities
- - On a consolidated basis (Trading Entity): 312,126 17,491
---------- ----------- ----------- --------
- - Cash generated by operations 457,791 25,928
- - Dividend income received from investments 24,738 1,433
- - Net finance costs paid (129,572) (7,505)
- - Taxation refund received 1,080 63
- - Taxation paid (41,911) (2,428)
---------- ----------- ----------- --------
4,353 93,243 On a fair value basis (Investment Entity): - -
---------- ----------- ----------- --------
(2,033) (43,599) Cash utilised by operations - -
(759) (16,864) Additions to investments - -
2,588 55,840 Proceeds from investments - -
4,632 99,469 Dividend and interest income received from - -
investments
(75) (1,603) Taxation paid - -
---------- ----------- ----------------------------------------------------- ----------- --------
4,353 93,243 Net cash generated by operating activities 312,126 17,491
---------- ----------- ----------------------------------------------------- ----------- --------
Cash flow from investing activities
- - On a consolidated basis (Trading Entity): (882,615) (47,001)
---------- ----------- ----------- --------
- - Acquisition of property, plant and equipment (279,784) (16,206)
Proceeds on disposal of property, plant
- - and equipment 55,925 3,239
- - Additions to investments (34,505) (1,999)
- - Proceeds on disposal of investments 6,638 384
- - Additions to investment properties (412) (24)
- - Proceeds on disposal of investment properties 88,484 5,125
- - Additions to intangible assets (27,890) (1,393)
- - Equity loan from non-controlling interest 15,258 883
- - Acquisitions of consolidated subsidiaries/businesses (713,972) (37,453)
- - Disposal of consolidated subsidiary 7,643 443
---------- ----------- ----------- --------
(113) (2,431) On a fair value basis (Investment Entity): - -
---------- ----------- ----------- --------
(172) (3,698) Acquisition of property, plant and equipment - -
Proceeds on disposal of property, plant
1 25 and equipment - -
58 1,251 Finance income received - -
- (9) Disposal of consolidated subsidiary - -
---------- ----------- ----------------------------------------------------- ----------- --------
(113) (2,431) Net cash utilised by investing activities (882,615) (47,001)
---------- ----------- ----------------------------------------------------- ----------- --------
Cash flow from financing activities
- - On a consolidated basis (Trading Entity): (154,538) (8,890)
---------- -----------
- - Borrowings raised 250,028 14,482
----------- --------
- - Borrowings repaid (328,919) (19,050)
- - Cash settled share based payment of subsidiary (24,128) (1,398)
- - Purchase of treasury shares (18,326) (1,040)
- - Dividends paid (23,803) (1,354)
- - Dividends paid to non-controlling interest (9,390) (530)
---------- ----------- ----------- --------
(4,552) (97,453) On a fair value basis (Investment Entity): - -
---------- ----------- ----------- --------
(1,222) (26,234) Borrowings repaid - -
(2,334) (50,116) Finance costs paid - -
(530) (11,090) Purchase of treasury shares - -
(466) (10,013) Dividends paid to non-controlling interest - -
---------- ----------- ----------------------------------------------------- ----------- --------
(4,552) (97,453) Net cash utilised by financing activities (154,538) (8,890)
---------- ----------- ----------------------------------------------------- ----------- --------
(312) (6,641) Net decrease in cash and cash equivalents (725,027) (38,400)
1,032 19,727 Cash and cash equivalents at the beginning 13,086 671
of the year
(49) - Exchange losses on cash and cash equivalents - (4,192)
---------- ----------- ----------------------------------------------------- ----------- --------
Cash and cash equivalents at the end of
671 13,086 the year (711,941) (41,921)
---------- ----------- ----------------------------------------------------- ----------- --------
Notes to the summarised consolidated financial statements
for the year ended 30 June 2017
1. Basis of preparation
Investors should consider non-Generally Accepted Accounting
Principles ("non-GAAP") financial measures shown in this
provisional announcement in addition to, and not as a substitute
for or as superior to, measures of financial performance reported
in accordance with International Financial Reporting Standards
("IFRS"). The IFRS results reflect all items that affect reported
performance and therefore it is important to consider the IFRS
measures alongside the non-GAAP measures.
The principal accounting policies adopted in the preparation of
the summarised consolidated financial statements and have been
consistently applied across all periods presented in the summarised
consolidated financial statements. All the summarised consolidated
financial statements are presented in both Pounds Sterling and
South African Rands and all financial information has been rounded
to the nearest thousand unless stated otherwise.
While the financial information included in this provisional
announcement has been prepared in accordance with the recognition
and measurement criteria of IFRS published by the International
Accounting Standards Board ("IASB") as endorsed for use by the
European Union and South Africa, this announcement does not itself
contain sufficient information to comply with IFRS. The financial
information is a provisional summarised consolidated set of
financial statements of the Integrated Annual Report which was
approved by the Tiso Blackstar Board on 27 September 2017. The
financial statements have been prepared on a historical cost basis,
except for financial assets and financial liabilities held at fair
value through profit and loss, and investment property that have
been measured at fair value.
The accounting policies and methods of computation are in terms
of IFRS and consistent with those applied in the annual
consolidated financial statements for the year ended 30 June 2016
with the exception of the changes adopted as a result of the
Company's change in status as an Investment Entity as detailed in
note 2. The provisional summarised consolidated financial statement
announcement is only a summary of the information in the
consolidated financial statements included in the Integrated Annual
Report and does not contain full or complete details. Any
investment decision by investors and/or shareholders should be
based on consideration of the final consolidated financial
statements included in the Integrated Annual Report 2017 to be
published on the Company's website as a whole.
1.1 JSE Listing
The Company has a dual primary listing on the Main Board of the
JSE Limited ("JSE") in South Africa and the AIM market ("AIM") of
the London Stock Exchange ("LSE").
These provisional summarised consolidated financial statements
have been prepared in accordance with the framework concepts and
the measurement and recognition requirements of IFRS and SAICA
Financial Reporting Guides as issued by the Accounting Practice
Committee and the Financial Pronouncements as issued by the
Financial Reporting Standards Council, and the minimum information
as required by International Accounting Standards ("IAS") 34:
Interim Financial Reporting.
The Group's South African external auditors, Deloitte &
Touche, have issued their opinions on the Group's consolidated
financial statements and the provisional summarised consolidated
financial statements for the year ended 30 June 2017. The audits
were for both the summarised and full set of consolidated financial
statements conducted in accordance with International Standards on
Auditing. Deloitte & Touche have expressed unmodified opinions
on the Group's consolidated financial statements and the
provisional summarised consolidated financial statements. The
copies of their audit reports are available for inspection at the
Company's registered office. Any reference to future financial
performance included in this provisional report has not been
reviewed or reported on by the Group's South African external
auditors.
The auditor's report does not necessarily report on all of the
information contained in this announcement/financial results.
Shareholders are therefore advised that in order to obtain a full
understanding of the nature of the auditor's engagement they should
obtain a copy of that report, together with the accompanying
financial information, from the Company's registered office.
These provisional summarised consolidated financial statements
are extracted from the audited Group consolidated financial
statements. The Directors take full responsibility for the
preparation of the provisional summarised audited results and
confirm that the financial information and related commentary has
been correctly extracted from the underlying Group consolidated
financial statements.
1.2 AIM Listing
The financial information for the year ended 30 June 2017 does
not constitute statutory accounts as defined in sections 435(1) and
435(2) of the UK Companies Act 2006 ("Companies Act 2006") but has
been derived from those accounts. Statutory accounts for the year
ended 30 June 2016 have been delivered to the Registrar of
Companies in Malta and those for the year ended 30 June 2017 will
be delivered to the Companies House in the UK following the
Company's Annual General Meeting ("AGM").
The AGM will be held on Tuesday, 21 November 2017. Further
information relating to the AGM will be provided to shareholders in
future correspondence.
Deloitte LLP, the external auditor registered in the UK, has
reported on these accounts for the year ended 30 June 2017. Their
report was unqualified, did not include a reference to any matters
to which auditors draw attention by way of emphasis of matter and
did not contain a statement under section 498(2) or 498(3) of the
Companies Act 2006. These statutory accounts have been prepared in
accordance with IFRS and IFRS Interpretations Committee
interpretations adopted for use by the EU, with those parts of the
Companies Act 2006 applicable to companies reporting under
IFRS.
1.3 Going concern
The Tiso Blackstar Board has reviewed the working capital
requirements of the Group along with the funding requirements for
the Group, from the date of approval of the annual financial
statements, and has found that the Group will remain a going
concern for at least the next twelve months.
On 6 July 2017, Tiso Blackstar updated shareholders on the
conditional sale of its interest in KTH for R1.5 billion (GBP88.3
million). The Company signed a share purchase agreement with KTH
and Kagiso whereby Kagiso will purchase Tiso Blackstar's entire
shareholding in KTH, subject to the fulfilment of suspensive
conditions. All the conditions have been completed with the
exception of the finalisation of the funding agreements and the
approval from the competition authorities.
Debt held at head-office level by Tiso Blackstar Holdings SE
includes R407.2 million (GBP24.0 million) (2016: R413.8 million,
GBP21.2 million) of term debt, which will be repaid in full with
part of the cash proceeds received from the sale of KTH. Tiso
Blackstar also remains intent on paying a special dividend of R40.0
million (GBP2.4 million). The remaining funds will be held to be
reinvested into media-focused investments in accordance with Tiso
Blackstar's stated strategy.
The Group along with Rand Merchant Bank ("RMB"), are in the
process of restructuring the debt facilities of Robor. The Group
will provide additional guarantees to RMB and these additional
guarantees will not impede the Group's ability to service its own
debt for at least the next twelve months.
The Tiso Blackstar Board is not aware of any material
uncertainties which may cast significant doubt over the Group's
ability to continue as a going concern.
1.4 Foreign currencies
Functional and presentation currency
The functional currency of the Company is South African Rands,
being the currency of the primary economic environment in which the
Company and its subsidiaries operate.
The Company has a dual primary listing on the Main Board of the
JSE in South Africa and the AIM market of the LSE. As a result,
Tiso Blackstar has two presentational currencies being South
African Rands ("Rands") and Pounds Sterling ("Pounds
Sterling").
The principal exchange rates utilised to prepare the summarised
consolidated financial statements are as follows:
Closing rate Average rate
30 June 30 June 30 June 30 June
2017 2016 2017 2016
-------- ------- ------- ------- -------
GBP/ZAR 16.983 19.493 17.265 21.473
EUR/ZAR 14.901 16.269 14.833 16.105
EUR/GBP 0.877 0.835 0.859 0.750
-------- ------- ------- ------- -------
2. Change in status as an Investment Entity
Effective 1 July 2016, there was a change in the Group's status
as an Investment Entity as defined in IFRS 10 Consolidated
Financial Statements. IFRS 10 specifies that an entity that ceases
to be an Investment Entity shall account for the change in its
status prospectively from the date at which the change in status
occurred. Further guidance from IFRS 10 specifies that when an
entity ceases to be an Investment Entity, it shall apply IFRS 3
Business Combinations to any subsidiary that was previously
measured at fair value through profit and loss. The date of the
change of status shall be the deemed acquisition date. The fair
value of the subsidiary at the Deemed Acquisition Date (being the
carrying amount of the investment as at 30 June 2016) shall
represent the transferred deemed consideration when measuring any
goodwill or gain from bargain purchase that arises from the Deemed
Acquisition. All subsidiaries are consolidated in accordance with
IFRS 10 from the date of change of status.
Effective 1 July 2016, Tiso Blackstar no longer accounted for
its net investments in subsidiaries and associates as investments
held at fair value through profit and loss, but rather consolidated
its subsidiaries and equity accounted its investments in
associates. Subsidiaries which are no longer carried at fair value
but rather consolidated comprise BHG, CSI, Robor and the property
subsidiaries. Details of the impact of the consolidation of these
subsidiaries are provided in note 9. Investments in associates
Radio Africa group, Multimedia group and Coopers have been equity
accounted from 1 July 2016.
In accordance with IFRS 10, the comparative period ended 30 June
2016 has not been restated (with the exception of the discontinued
operation, refer note 5) and are disclosed on a fair value
basis.
3. Reclassifications
As a result of the Group's change in status, certain line items
within the consolidated statements of income and other
comprehensive income and consolidated statement of financial
position, have been reclassified for consistency with the current
year classifications. This change does not affect the quantitative
value of amounts previously presented.
3.1 Effect of change on consolidated statements of income and other comprehensive income
Per Per
30 June 30 June
2016 2016
Annual Annual
Report Reclassified Reclassified Report
30 June Reclassi- 30 June 30 June Reclassi- 30 June
2016 fications 2016 2016 fications 2016
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
----------- ----------- ------------ --------------------------- ------------- ---------- --------
- 12,002 12,002 Revenue 559 559 -
Investment-related
422,952 (422,952) - income - (19,696) 19,696
Net fair value and
foreign exchange
(1,036,271) 1,036,271 - losses - 48,258 (48,258)
(63,877) 1,655 (62,222) Operating expenses (2,899) 77 (2,976)
Depreciation, amortisation
and straight lining
- (1,652) (1,652) of leases (77) (77) -
- 410,950 410,950 Other income 19,137 19,137 -
----------- ----------- ------------ --------------------------- ------------- ---------- --------
Operating profit
(677,196) 1,036,274 359,078 (loss) 16,720 48,258 (31,538)
- (1,036,274) (1,036,274) Other gains (losses) (48,258) (48,258) -
----------- ----------- ------------ --------------------------- ------------- ---------- --------
(677,196) - (677,196) Net loss (31,538) - (31,538)
(48,865) - (48,865) Net finance costs (2,276) - (2,276)
----------- ----------- ------------ ------------- ---------- --------
1,251 - 1,251 Finance income 58 - 58
(50,116) - (50,116) Finance costs (2,334) - (2,334)
----------- ----------- ------------ ------------- ---------- --------
Share of profit
of associates -
- - - equity accounted - - -
----------- ----------- ------------ --------------------------- ------------- ---------- --------
(726,061) - (726,061) Loss before taxation (33,814) - (33,814)
(955) - (955) Taxation (45) - (45)
----------- ----------- ------------ --------------------------- ------------- ---------- --------
Loss from continuing
(727,016) - (727,016) operations (33,859) - (33,859)
Loss from discontinued
operation, net of
(179,853) - (179,853) taxation (8,375) - (8,375)
----------- ----------- ------------ --------------------------- ------------- ---------- --------
(906,869) - (906,869) Loss for the year (42,234) - (42,234)
----------- ----------- ------------ --------------------------- ------------- ---------- --------
3.2 Effect of change on consolidated statement of financial position
At 30 June 2016, the Group presented the consolidated statement
of financial position in order of liquidity, while at 30 June 2017
it has been presented showing the split between current, assets
which it expects to recover within twelve months and liabilities
which it expects to settle within twelve months, and non-current
portions.
Per Per
30 June 30 June
2016 2016
Annual Annual
Report Reclassified Reclassified Report
30 June Reclassi- 30 June 30 June Reclassi- 30 June
2016 fications 2016 2016 fications 2016
R'000 R'000 R'000 GBP'000 GBP'000 GBP'000
-------- ---------- ------------ ------------------------ ------------- ---------- --------
Non-current assets
Straight lining
- 12 12 of lease asset 1 1 -
Current assets
Straight lining
- 21 21 of lease asset 1 1 -
-------- ---------- ------------ ------------------------ ------------- ---------- --------
Non-current liabilities
413,766 18,766 395,000 Borrowings 20,353 874 21,227
Straight lining
1,195 1,195 - of lease liability - 61 61
-------- ---------- ------------ ------------------------ ------------- ---------- --------
Current liabilities
- (18,766) 18,766 Borrowings 874 (874) -
Straight lining
- (1,228) 1,228 of lease liability 63 (63) -
-------- ---------- ------------ ------------------------ ------------- ---------- --------
4. Finance costs
Finance costs for the current reporting period can be analysed
as follows:
On a consolidated basis (Trading Entity):
30 June 30 June
2017 2017
R'000 GBP'000
-------------------------------------------- --------- --------
BHG (core subsidiary) (97,514) (5,648)
CSI (non-core subsidiary) (47,025) (2,724)
Robor (non-core subsidiary) (46,444) (2,691)
Other: (57,892) (3,353)
--------- --------
Finance costs on acquisition debt
to be settled on completion of KTH
sale (51,478) (2,982)
Finance costs within the property
subsidiaries relating to investment
properties, the majority of which
were sold during the year (5,757) (333)
Finance costs on loans from non-controlling
interest (657) (38)
-------------------------------------------- --------- --------
(248,875) (14,416)
-------------------------------------------- --------- --------
5. Discontinued operation
In the prior year, Tiso Blackstar announced its change in
strategy to focus on investments in media and related industries,
and to therefore dispose of its non-core assets. In line with this,
Tiso Blackstar commenced negotiations to dispose of its interest in
KTH during the 2016 financial year and post 30 June 2017 concluded
an agreement of sale, the terms of which were finalised in July
2017.
KTH was disclosed as a discontinued operation, and classified
and disclosed as a non-current asset held for sale in accordance
with IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations as at 30 June 2016. At 30 June 2017 the investment in
KTH remains disclosed as a non-current asset held for sale in the
consolidated statement of financial position and is carried at its
fair value less costs to sell determined by the anticipated value
expected to be realised in the next twelve to eighteen months.
6. Other comprehensive (loss) income, net of taxation
Other comprehensive (loss) income comprises of the foreign
currency translation adjustments recognised in the foreign currency
translation reserve. These currency adjustments arise on
restatement of the Group's investments in its African based
associates Radio Africa group, Multimedia group and Coopers as well
as the African based foreign operations held by CSI and BHG to the
Group's functional currency Rands at the closing rate at 30 June
2017. A credit to other comprehensive income arises in the Pounds
Sterling statement of other comprehensive income as a result of the
translation of the Group's results from its functional currency
Rands to its presentational currency Pounds Sterling.
Items recognised in other comprehensive (loss) income comprise
of the following:
On a fair value basis On a consolidated
(Investment Entity): basis (Trading Entity):
30 June 30 June 30 June 30 June
2016 2016 2017 2017
GBP'000 R'000 R'000 GBP'000
------------ --------- ------------------------------------ ---------------- --------
On translation of the following
foreign operations and
- - associates: (70,471) (4,118)
------------ --------- ---------------- --------
Foreign operations held
- - by CSI and BHG (3,648) (198)
Investments in associate
- - Radio Africa group (27,388) (1,611)
Investment in associate
- - Multimedia group (37,297) (2,182)
Investment in associate
- - Coopers (2,138) (127)
------------ --------- ---------------- --------
On translation of the Group's
results from Rands to Pounds
(8,887) - Sterling - 28,073
- - Actuarial gain on PRMA 2,667 154
------------ --------- ------------------------------------ ---------------- --------
Other comprehensive (loss)
income, net of taxation
per the statement of comprehensive
(8,887) - income (67,804) 24,109
------------ --------- ------------------------------------ ---------------- --------
7. Earnings (Losses) per share ("EPS")
7.1 Basic and diluted earnings (losses) per ordinary share
On a fair value basis On a consolidated
(Investment Entity): basis (Trading Entity):
30 June 30 June 30 June 30 June
2016 2016 2017 2017
GBP'000 R'000 R'000 GBP'000
---------- ----------- ------------------------------- ------------ ------------
Profit (Loss) for the year
attributable to equity
holders of the parent from
(33,859) (727,016) continuing operations 15,430 927
Loss for the year attributable
to equity holders of the
parent from discontinued
(8,375) (179,853) operation (7,607) (441)
---------- ----------- ------------------------------- ------------ ------------
Profit (Loss) for the year
attributable to equity
(42,234) (906,869) holders of the parent 7,823 486
---------- ----------- ------------------------------- ------------ ------------
Weighted average number
of shares in issue (net
of treasury shares, in
267,199 267,199 thousands)^^ 265,279 265,279
---------- ----------- ------------------------------- ------------ ------------
Weighted average number
of shares in issue (in
267,199 267,199 thousands) 266,879 266,879
---------- ----------- ------------------------------- ------------ ------------
Basic earnings (losses)
per ordinary share (in
cents/pence) attributable
(15.81) (339.40) to equity holders 2.95 0.18
---------- ----------- ------------------------------- ------------ ------------
Diluted earnings (losses)
per ordinary share (in
cents/pence) attributable
(15.81) (339.40) to equity holders 2.93 0.18
---------- ----------- ------------------------------- ------------ ------------
Basic earnings (losses)
per ordinary share (in
cents/pence) attributable
to equity holders from
(12.67) (272.09) continuing operations 5.82 0.35
---------- ----------- ------------------------------- ------------ ------------
Diluted earnings (losses)
per ordinary share (in
cents/pence) attributable
to equity holders from
(12.67) (272.09) continuing operations 5.78 0.35
---------- ----------- ------------------------------- ------------ ------------
^^ The treasury shares issued under the long term Management
Incentive Scheme are contingently returnable shares and are
excluded from the EPS calculation until such date as they are not
subject to recall
Reconciliation of Weighted average number of shares in issue (in
thousands)
Treasury shares issued 3,012,349
Estimated vesting percentage 53.1%
------------------------------------ ---------
Number of shares expected to vest 1,599,557
------------------------------------ ---------
Number of shares expected to vest
(in thousands) 1,600
------------------------------------ ---------
Weighted average number of shares
in issue (in thousands) 266,879
Less number of shares expected to
vest (in thousands) (1,600)
------------------------------------ ---------
Weighted average number of shares
in issue (net of treasury shares,
in thousands) 265,279
------------------------------------ ---------
7.2 Basic and diluted headline losses per ordinary share
On a fair value
basis On a consolidated
(Investment basis (Trading
Entity): Entity):
30 June 30 June 30 June 30 June
2016 2016 2017 2017
GBP'000 R'000 R'000 GBP'000
-------- --------- --------------------------------- --------- --------
Profit (Loss) for the
year attributable to equity
holders of the parent,
(42,234) (906,869) adjusted for: 7,823 486
Gains arising on investment
- - properties (2,858) (166)
Gains recognised on acquisition
of subsidiaries, step
- - up acquisitions (41,697) (2,414)
- - Gain on bargain purchase (1,745) (90)
- - Loss on disposal of investments 2,413 140
- - Impairment of investments 25,270 1,464
Gains on investments held
- - for trading (256) (15)
(Profit) Loss on disposal
of property, plant and
- 3 equipment (22,133) (1,282)
Reversal of impairment
of property, plant and
- - equipment (11,379) (659)
Profit on disposal of
- - intangible assets (49) (3)
Impairment of loans designated
at fair value through
34 737 profit and loss - -
- (1) Total tax effects of adjustments 11,099 642
-------- --------- --------------------------------- --------- --------
(42,200) (906,130) Headline losses (33,512) (1,897)
-------- --------- --------------------------------- --------- --------
Basic headline losses
per ordinary share attributable
to equity holders (in
(15.79) (339.12) cents/pence) (12.63) (0.72)
-------- --------- --------------------------------- --------- --------
Diluted headline losses
per ordinary share attributable
to equity holders (in
(15.79) (339.12) cents/pence) (12.56) (0.71)
-------- --------- --------------------------------- --------- --------
8. Net cash and cash equivalents
Net cash and cash equivalents for the current reporting period
can be analysed as follows:
On a consolidated
basis (Trading Entity):
30 June 30 June
2017 2017
R'000 GBP'000
------------------------------------- ------------- -----------
BHG (core subsidiary) 15,478 911
CSI (non-core subsidiary) (347,422) (20,457)
Robor (non-core subsidiary) (393,965) (23,197)
Other 13,968 822
------------------------------------- ------------- -----------
(711,941) (41,921)
------------------------------------- ------------- -----------
Cash and cash equivalents 174,901 10,298
Bank overdrafts and other short term
borrowing facilities (886,842) (52,219)
------------------------------------- ------------- -----------
Net cash and cash equivalents per
the statement of cash flow (711,941) (41,921)
------------------------------------- ------------- -----------
9. Business combinations
Effective 1 July 2016, there was a change in the Group's status
as an Investment Entity as defined in IFRS 10 and from this date,
the Group applied IFRS 3 to any subsidiary that was previously
measured at fair value through profit or loss. The fair value of
the subsidiary as at 1 July 2016 ("Deemed Acquisition Date")
represents the transferred "Deemed Consideration" when measuring
any goodwill or gain from bargain purchase that arises from the
deemed acquisition. All subsidiaries were consolidated in
accordance with IFRS 10 from the date of change of status.
9.1 Deemed Acquisitions
Subsidiaries which are no longer carried at fair value but
rather consolidated ("the Deemed Acquisitions") comprise of:
Proportion
of
ownership
rights
held on
Principal Deemed
place Name of consolidated Acquisition
of business Principal activity subsidiaries Date
------------- ------------------- ------------------------------ ------------
Blackstar Holdings Group
Proprietary Limited
(previously Times Media
South Group Proprietary Limited)
Africa Media ("BHG") 100.0%
Consolidated Steel Industries
South Industrial Proprietary Limited
Africa steel company ("CSI") 100.0%
South Industrial Robor Proprietary Limited
Africa steel company ("Robor") 51.0%
Tiso Blackstar Real
South Investment Estate Proprietary Limited
Africa property company ("TBRE") 100.0%
Fantastic Investments
South Investment 379 Proprietary Limited
Africa property company ("Fantastic") 100.0%
Firefly Investments
South Investment 223 Proprietary Limited
Africa property company ("Firefly") 70.0%
------------- ------------------- ------------------------------ ------------
9.2 Other businesses acquired
During the year other less significant acquisitions of
subsidiaries and businesses took place ("Other Business
Acquisitions") and comprise of:
Proportion
of
ownership
rights
Principal held on
place Acquisition
of business Principal activity Name of business acquired Date
------------- ------------------- -------------------------- ------------
Smartcall Technology
Solutions Proprietary
South Africa Web Applications Limited ("STS") 50.0%
Triumph Printing and
Printing and Packaging Proprietary
South Africa Packaging Limited ("Triumph") 100.0%
Mine Support Products
Proprietary Limited
South Africa Manufacturing ("MSP") 50.0%
------------- ------------------- -------------------------- ------------
9.3 Assets acquired and liabilities recognised at the date of acquisition
The book value of the assets and liabilities acquired
approximate the fair value on Acquisition/Deemed Acquisition
Date.
TBRE
and
the Other
property Business
BHG CSI Robor subsidiaries Acquisitions Total
30 June 2017 R'000 R'000 R'000 R'000 R'000 R'000
---------------------------------- ----------- --------- --------- ------------- ------------- -----------
Tangible assets 270,607 116,827 386,571 98,181 46,859 919,045
Intangible assets 1,226,823 88,760 660 - - 1,316,243
Investments in associates,
joint ventures, other
investments, and loans
and receivables 35,054 6,164 23,115 - - 64,333
Inventories 215,100 410,258 521,920 - 37,460 1,184,738
Trade and other receivables 678,003 364,733 408,603 665 136,373 1,588,377
Cash and cash equivalents 86,154 16,783 23,176 3,746 47,636 177,495
Non-controlling interest 10,674 (5,803) (4,486) - - 385
Net deferred taxation (223,015) (4,928) (30,352) (4,659) 4,580 (258,374)
Borrowings and other
liabilities (977,210) (49,108) (133,728) (57,242) (27,655) (1,244,943)
Contingent liabilities (11,873) (28,478) (2,250) - - (42,601)
Trade and other payables (760,895) (505,539) (417,400) (555) (134,830) (1,819,219)
Bank overdrafts and
other short term borrowing
facilities (95,570) (261,108) (362,408) - (12,478) (731,564)
---------------------------------- ----------- --------- --------- ------------- ------------- -----------
Identifiable assets
and liabilities at
fair value at Acquisition/Deemed
Acquisition Date 453,852 148,561 413,421 40,136 97,945 1,153,915
Non-controlling interest - - (202,576) (2,103) 4,199 (200,480)
Goodwill 996,148 109,439 - - 114,780 1,220,367
Gain on bargain purchase - - (1,745) - - (1,745)
---------------------------------- ----------- --------- --------- ------------- ------------- -----------
1,450,000 258,000 209,100 38,033 216,924 2,172,057
Less Deemed Consideration
on change in status
as an Investment Entity
and fair value of existing
shareholding on step
up acquisitions (1,450,000) (258,000) (209,100) (38,033) (57,021) (2,012,154)
---------------------------------- ----------- --------- --------- ------------- ------------- -----------
Purchase consideration
paid in cash - - - - 159,903 159,903
---------------------------------- ----------- --------- --------- ------------- ------------- -----------
TBRE
and
the Other
property Business
BHG CSI Robor subsidiaries Acquisitions Total
30 June 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------- -------- --------- --------- ------------- ------------- ---------
Cash flow
Cash consideration
paid for Other Business
Acquisitions - - - - (159,903) (159,903)
Consolidated cash
from acquisitions (9,416) (244,325) (339,232) 3,746 35,158 (554,069)
---------------------------------- -------- --------- --------- ------------- ------------- ---------
Cash flow on acquisition (9,416) (244,325) (339,232) 3,746 (124,745) (713,972)
---------------------------------- -------- --------- --------- ------------- ------------- ---------
Tangible assets 13,882 5,995 19,830 5,036 2,714 47,457
Intangible assets 62,938 4,553 34 - - 67,525
Investments in associates,
joint ventures, other
investments, and
loans and receivables 1,798 316 1,186 - - 3,300
Inventories 11,035 21,047 26,775 - 2,170 61,027
Trade and other receivables 34,782 18,711 20,962 34 7,899 82,388
Cash and cash equivalents 4,420 861 1,189 192 2,759 9,421
Non-controlling interest 548 (298) (230) - - 20
Net deferred taxation (11,441) (253) (1,557) (239) 265 (13,225)
Borrowings and other
liabilities (50,132) (2,519) (6,860) (2,937) (1,602) (64,050)
Contingent liabilities (609) (1,461) (115) - - (2,185)
Trade and other payables (39,035) (25,935) (21,413) (29) (7,810) (94,222)
Bank overdrafts and
other short term
borrowing facilities (4,903) (13,395) (18,592) - (723) (37,613)
---------------------------------- -------- --------- --------- ------------- ------------- ---------
Identifiable assets
and liabilities at
fair value at Acquisition/Deemed
Acquisition Date 23,283 7,622 21,209 2,057 5,672 59,843
Non-controlling interest - - (10,392) (107) 243 (10,256)
Goodwill 51,103 5,614 - - 6,648 63,365
Gain on bargain purchase - - (90) - - (90)
---------------------------------- -------- --------- --------- ------------- ------------- ---------
74,386 13,236 10,727 1,950 12,563 112,862
Less Deemed Consideration
on change in status
as an Investment
Entity and fair value
of existing shareholding
on step up acquisitions (74,386) (13,236) (10,727) (1,950) (3,303) (103,602)
---------------------------------- -------- --------- --------- ------------- ------------- ---------
Purchase consideration
paid in cash - - - - 9,260 9,260
---------------------------------- -------- --------- --------- ------------- ------------- ---------
Cash flow
Cash consideration
paid for Other Business
Acquisitions - - - - (9,260) (9,260)
Consolidated cash
from acquisitions (483) (12,534) (17,403) 192 2,035 (28,193)
---------------------------------- -------- --------- --------- ------------- ------------- ---------
Cash flow on acquisition (483) (12,534) (17,403) 192 (7,225) (37,453)
---------------------------------- -------- --------- --------- ------------- ------------- ---------
9.4 Non-controlling interest
The non-controlling interest relates to a 49.0% ownership
interest in Robor, a 30.0% ownership interest in Firefly and a
50.0% ownership interest in STS, and was recognised at the fair
value of the identifiable assets and liabilities at
Acquisition/Deemed Acquisition Date.
9.5 Goodwill arising on acquisitions
TBRE
and
The Other
property Business
BHG CSI Robor subsidiaries Acquisitions Total
30 June 2017 R'000 R'000 R'000 R'000 R'000 R'000
-------------------------- --------- --------- --------- ------------- ------------- -----------
Consideration transferred 1,450,000 258,000 209,100 38,033 159,903 2,115,036
Plus: Non-controlling
interest - - 202,576 2,103 (4,199) 200,480
Less: Fair value
of net identifiable
assets acquired (453,852) (148,561) (413,421) (40,136) (40,924) (1,096,894)
-------------------------- --------- --------- --------- ------------- ------------- -----------
Goodwill arising
on acquisition (Gain
on bargain purchase) 996,148 109,439 (1,745) - 114,780 1,218,622
-------------------------- --------- --------- --------- ------------- ------------- -----------
TBRE
and
the Other
property Business
BHG CSI Robor subsidiaries Acquisitions Total
30 June 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- -------- -------- ------------- ------------- --------
Consideration transferred 74,386 13,236 10,727 1,950 9,260 109,559
Plus: Non-controlling
interest - - 10,392 107 (243) 10,256
Less: Fair value of
net identifiable assets
acquired (23,283) (7,622) (21,209) (2,057) (2,369) (56,540)
-------------------------- -------- -------- -------- ------------- ------------- --------
Goodwill arising on
acquisition (Gain
on bargain purchase) 51,103 5,614 (90) - 6,648 63,275
-------------------------- -------- -------- -------- ------------- ------------- --------
10. Segmental information
For the purpose of reporting to the Tiso Blackstar Board (who
are considered to be the Chief Operating Decision Maker "CODM" of
the Company), the Group is organised into segments. It is the
CODM's strategy for the Group to focus on owning and growing
diversified revenues streams from media businesses with leading
market position, strong cash flows, historic earnings growth and
ability to continue as a going concern.
As a result of its change in status from an Investment Entity,
the Group has reviewed its segments and identified its operating
segments based on the nature of the operating segment. The
reportable segments are as follows:
-- Media: this division houses the Group's interest in the
distribution of knowledge and content via print, online assets and
other platforms;
-- Hirt & Carter Group: the division includes the activities
on retail advertising production systems and related database
management and development, and retail print via H&C and
Uniprint;
-- Broadcast and Content: the division includes the television
and radio platforms, radio assets, films which is the leading
all-rights distributor of local and international films business,
and Gallo the music business;
-- Africa (excluding South Africa): includes the Group's
interests in the associates Radio Africa group in Kenya, Multimedia
group in Ghana and Coopers in Nigeria (all the African interests
are equity accounted and the share of profits from these interests
are therefore not shown in the tables 10.1 or 10.2);
-- CSI: a wholly-owned subsidiary comprising of Stalcor which is
a processor, distributor and stockist of carbon steel, stainless
steel and aluminium in the form of high quality sheet, plate and
coil as well as structural and other long product profiles, and GRS
which is a steel roofing and cladding company;
-- Robor: in which the Group holds a 51.0% interest is a
manufacturer and supplier of welded steel tube and pipe and cold
formed steel profiles; and
-- Other: comprising of investments that are not deemed to be
material to the Group including the property subsidiaries and other
consolidated Group companies, including head office, holding
companies and the investment advisor Tiso Blackstar SA Proprietary
Limited ("Tiso Blackstar SA").
KTH was disclosed as a discontinued operation, and classified
and disclosed as a non-current asset held for sale in accordance
with IFRS 5 at 30 June 2017 and 30 June 2016. The segment
information reported does not include any amounts for KTH, which is
described in more detail in note 5.
10.1 Reconciliation of Net profit (loss) to EBITDA
Hirt
& Broadcast
Carter and
Media Group Content CSI Robor Other Total
30 June 2017 R'000 R'000 R'000 R'000 R'000 R'000 R'000
---------------------- ----------- ----------- --------- ----------- ----------- -------- -----------
Revenue 2,045,556 1,733,554 441,186 2,428,645 2,478,212 13,857 9,141,010
Cost of sales (1,670,344) (1,075,644) (313,912) (2,080,785) (2,280,755) - (7,421,440)
---------------------- ----------- ----------- --------- ----------- ----------- -------- -----------
Gross profit 375,212 657,910 127,274 347,860 197,457 13,857 1,719,570
Operating expenses (291,194) (434,634) (92,652) (269,094) (235,483) (97,769) (1,420,826)
Inter-group
income (costs) 5,204 1,132 (5,403) (1,960) (2,000) 3,027 -
Depreciation (17,920) (54,560) (4,606) (14,281) (26,776) (2.986) (121,129)
Amortisation (33,090) (23,946) (1,676) (4,165) (463) - (63,340)
Straight lining
of leases charge(##) (2,156) 6,917 94 (8,542) (14,233) 23,575 5,655
Other income 42,015 20,560 6,450 14,086 9,989 749 93,849
---------------------- ----------- ----------- --------- ----------- ----------- -------- -----------
Operating profit 78,071 173,379 29,481 63,904 (71,509) (59,547) 213,779
Other gains
(losses) 17,076 8,843 (62,558) (3,006) 26,050 83,789 70,194
---------------------- ----------- ----------- --------- ----------- ----------- -------- -----------
Net profit
(loss) 95,147 182,222 (33,077) 60,898 (45,459) 24,242 283,973
---------------------- ----------- ----------- --------- ----------- ----------- -------- -----------
Reconciliation
to EBITDA:
Depreciation 17,920 54,560 4,606 14,281 26,776 2.986 121,129
Amortisation 33,090 23,946 1,676 4,165 463 - 63,340
Straight lining
of leases charge(##) 2,156 (6,917) (94) 8,542 14,233 (23,575) (5,655)
Share based
payment expense - - - - - 4,836 4,836
Other (gains)
losses (17,076) (8,843) 62,558 3,006 (26,050) (83,789) (70,194)
---------------------- ----------- ----------- --------- ----------- ----------- -------- -----------
Total Segmental
EBITDA 131,237 244,968 35,669 90,892 (30,037) (75,300) 397,429
---------------------- ----------- ----------- --------- ----------- ----------- -------- -----------
Other gains
(losses) 17,076 8,843 (62,558) (3,006) 26,050 83,789 70,194
---------------------- ----------- ----------- --------- ----------- ----------- -------- -----------
Total Consolidated
EBITDA 148,313 253,811 (26,889) 87,886 (3,987) 8,489 467,623
---------------------- ----------- ----------- --------- ----------- ----------- -------- -----------
Hirt
& Broadcast
Carter and
Media Group Content CSI Robor Other Total
30 June 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------- -------- -------- --------- --------- --------- -------- ---------
Revenue 118,482 100,411 25,554 140,671 143,542 802 529,462
Cost of sales (96,749) (62,303) (18,182) (120,523) (132,105) - (429,862)
---------------------- -------- -------- --------- --------- --------- -------- ---------
Gross profit 21,733 38,108 7,372 20,148 11,437 802 99,600
Operating expenses (16,866) (25,175) (5,367) (15,586) (13,640) (5,659) (82,293)
Inter-group
income (costs) 301 66 (313) (114) (116) 176 -
Depreciation (1,038) (3,160) (267) (827) (1,551) (173) (7,016)
Amortisation (1,876) (1,387) (97) (241) (27) - (3,628)
Straight lining
of leases charge(##) (125) 401 5 (495) (824) 1,365 327
Other income 2,434 1,191 374 816 579 42 5,436
---------------------- -------- -------- --------- --------- --------- -------- ---------
Operating profit 4,563 10,044 1,707 3,701 (4,142) (3,447) 12,426
Other gains
(losses) 989 512 (3,623) (174) 1,509 4,868 4,081
---------------------- -------- -------- --------- --------- --------- -------- ---------
Net profit
(loss) 5,552 10,556 (1,916) 3,527 (2,633) 1,421 16,507
---------------------- -------- -------- --------- --------- --------- -------- ---------
Reconciliation
to EBITDA:
Depreciation 1,038 3,160 267 827 1,551 173 7,016
Amortisation 1,876 1,387 97 241 27 - 3,628
Straight lining
of leases charge(##) 125 (401) (5) 495 824 (1,365) (327)
Share based
payment expense - - - - - 280 280
Other (gains)
losses (989) (512) 3,623 174 (1,509) (4,868) (4,081)
---------------------- -------- -------- --------- --------- --------- -------- ---------
Total Segmental
EBITDA 7,602 14,190 2,066 5,264 (1,740) (4,359) 23,023
---------------------- -------- -------- --------- --------- --------- -------- ---------
Other gains
(losses) 989 512 (3,623) (174) 1,509 4,868 4,081
---------------------- -------- -------- --------- --------- --------- -------- ---------
Total Consolidated
EBITDA 8,591 14,702 (1,557) 5,090 (231) 509 27,104
---------------------- -------- -------- --------- --------- --------- -------- ---------
(##) Straight lining of leases are required under IAS 17 Leases
and are excluded to determine actual operating costs
Each segment within the Group is assessed by the CODM based on
EBITDA excluding gains or losses outside of the ordinary scope of
business. However, when the CODM assesses the Group as a whole,
gains or losses outside of the ordinary scope of business are
included in the CODM's assessment. As a result, when EBITDA is
discussed in the summarised consolidated financial statements
regarding a segment, the amount does not include other gains or
losses, while the total consolidated Group EBITDA does include
other gains and losses outside the ordinary scope of business.
10.2 Reconciliation from 30 June 2016 reported financial
information to 30 June 2016 pro forma financial information
Hirt
& Broadcast
Carter and
Media Group Content CSI Robor Other Total
30 June 2016 R'000 R'000 R'000 R'000 R'000 R'000 R'000
--------------------- ----------- --------- --------- ----------- ----------- --------- -----------
Operating loss
as presented
for the period
ending 30 June
2016 - - - - - - (677,196)
Adjusted for
Investment
Entity accounting
entries:
Operating
expenses - - - - - - 63,877
Net fair value
and foreign
exchange losses - - - - - - 1,036,271
Investment-related
income - - - - - - (422,952)
Adjusted for
pro forma financial
information:
Revenue 1,722,654 1,581,958 508,995 1,928,257 2,271,893 69,900 8,083,657
Cost of sales (1,467,548) (982,665) (356,242) (1,671,233) (1,967,417) (59,065) (6,504,170)
Other income - - - 18,968 6,220 5,088 30,276
Investment-related
income - - - - - 16,987 16,987
Inter-group
income (costs) - - - (3,217) - 3,217 -
Operating
expenses (150,710) (364,451) (108,808) (217,033) (242,621) (85,297) (1,168,920)
Forex profit
(loss) (69) - - - 15,568 (2,610) 12,889
--------------------- ----------- --------- --------- ----------- ----------- --------- -----------
Total pro forma
Segmental EBITDA 104,327 234,842 43,945 55,742 83,643 (51,780) 470,719
Other gains
(losses) - (457) (18,376) (44,260) 25,507 (73,514) (111,100)
--------------------- ----------- --------- --------- ----------- ----------- --------- -----------
Total pro forma
Consolidated
EBITDA 104,327 234,385 25,569 11,482 109,150 (125,294) 359,619
--------------------- ----------- --------- --------- ----------- ----------- --------- -----------
Hirt
& Broadcast
Carter and
Media Group Content CSI Robor Other Total
30 June 2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- -------- --------- -------- -------- -------- ---------
Operating loss
as presented
for the period
ending 30 June
2016 - - - - - - (31,538)
Adjusted for
Investment
Entity accounting
entries:
Operating
expenses - - - - - - 2,976
Net fair value
and foreign
exchange losses - - - - - - 48,258
Investment-related
income - - - - - - (19,696)
Adjusted for
pro forma financial
information:
Revenue 80,223 73,671 23,704 89,798 105,801 3,254 376,451
Cost of sales (68,343) (45,762) (16,590) (77,828) (91,621) (2,751) (302,895)
Other income - - - 883 290 237 1,410
Investment-related
income - - - - - 791 791
Inter-group
income (costs) - - - (150) - 150 -
Operating
expenses (7,018) (16,972) (5,067) (10,107) (11,299) (3,973) (54,436)
Forex profit
(loss) (3) - - - 725 (122) 600
--------------------- -------- -------- --------- -------- -------- -------- ---------
Total pro forma
Segmental EBITDA 4,859 10,937 2,047 2,596 3,896 (2,414) 21,921
--------------------- -------- -------- --------- -------- -------- -------- ---------
Other gains
(losses) - (21) (856) (2,061) 1,118 (3,354) (5,174)
--------------------- -------- -------- --------- -------- -------- -------- ---------
Total pro forma
Consolidated
EBITDA 4,859 10,916 1,191 535 5,014 (5,768) 16,747
--------------------- -------- -------- --------- -------- -------- -------- ---------
11. Changes in Directors
The capacity of Andrew Bonamour changed from a non-executive
director to Chief Executive Officer ("CEO") with effect from 17
July 2017. This appointment culminated as a result of the Company's
change in status from an Investment Entity to a consolidated group,
its migration to the UK and in light of the fact that Andrew
Bonamour is the CEO of the Company's investment advisor Tiso
Blackstar SA as well as CEO of the Group's core business BHG.
Richard Wight resigned from his position as a non-executive
director effective 20 July 2017.
12. Subsequent Events
Effective 1 July 2017, Hirt & Carter Group acquired a 51.0%
interest in Botha Branding Solutions Proprietary Limited ("BBS")
for R17.0 million (GBP1.0 million). BBS design, produce and execute
branding solutions in the formal and informal retail markets.
Robor acquired Aegion South Africa Proprietary Limited ("Aegion
SA") on the 22 August 2017. A joint venture was formed with Robor
owning 40.0% and Aegion International Holdings Limited owning the
remaining 60.0%. Robor's purchase consideration was R8.7 million
(GBP0.5 million). Aegion SA supply and strengthen sewer, water,
energy and mining piping systems, buildings, bridges and tunnels
and waterfront structures.
13. Related Parties
In terms of the agreement between SAI Holdings Limited ("SAI")
and the Company, consulting services are provided to the Company
for assistance in origination of transactions within the African
continent for a fee of USD$ 600,000 per annum, payable in quarterly
instalments.
In terms of the agreement between Tiso Investment Holdings
Proprietary Limited ("TIH") and Tiso Blackstar SA, consulting
services are provided to Tiso Blackstar SA for assistance in
origination of transactions and the ongoing management of KTH, for
a fee of R223,500, GBP12,945 (excluding Value Added Taxation) per
month. In terms of the TIH agreement, the TIH payment will cease
following the realisation of KTH.
TIH and SAI are related parties under the AIM Rules as David
Adomakoh and Nkululeko Sowazi in addition to being Directors, both
have interests in SAI and TIH. Accordingly the directors, other
than David Adomakoh and Nkululeko Sowazi, having consulted with
Northland Capital Partners, the Company's nominated adviser,
consider that the terms of the consultancy arrangements with both
TIH and SAI are fair and reasonable insofar as shareholders are
concerned.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
27 September 2017
For further enquiries, please contact:
Tiso Blackstar Group SE Leanna Isaac +44 (0) 20 7887 6017
Northland Capital Partners Tom Price +44 (0) 203 861 6625
JSE Sponsor: PSG Capital David Tosi +27 (0) 21 887 9602
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEASMWFWSELU
(END) Dow Jones Newswires
September 27, 2017 03:00 ET (07:00 GMT)
Grafico Azioni Tiso Blackstar (LSE:TBGR)
Storico
Da Mag 2024 a Giu 2024
Grafico Azioni Tiso Blackstar (LSE:TBGR)
Storico
Da Giu 2023 a Giu 2024