The derivatives division recorded a 26% year-on-year decline in revenue. The division accounted for 11% of total revenue.

Transcription

1 AVIOR CAPITAL MARKETS HOLDINGS LIMITED (previously Jamispan Proprietary Limited) Incorporated in the Republic of South Africa Registration number: 2015/086358/06 Share Code: AVR ISIN: ZAE ( Avior Holdings or the Group ) ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 30 APRIL 2017 HIGHLIGHTS HEADLINE EARNINGS PER SHARE ( HEPS ) DOWN 16% SUCCESSFUL LISTING ON THE JSE ALT X ON 6 JUNE 2017 RANKED THIRD IN THE FINANCIAL MAIL S RANKING THE ANALYST SURVEY 2017 The board of directors ( the Board ) of Avior Holdings, is pleased to present the abridged audited results of the Group for the year ended 30 April 2017 ( the year ). 1. INTRODUCTION Avior Holdings is the holding company of a capital markets group that provides research, stockbroking, corporate finance, derivatives trading, fixed income trading and transition management service offerings to institutional clients in South Africa and abroad. The Group has offices in Johannesburg, Cape Town and London. Avior Holdings listed on the JSE Limited s ( JSE ) s Alternative Exchange ( ALT X ) on 6 June Avior Capital Markets Proprietary Limited ( Avior ), a wholly-owned subsidiary of Avior Holdings is rated one of the top 10 research companies in the Financial Mail equity research ratings and has achieved an overall unweighted ranking of number 3 in their recent rankings. The Group s research team consists of 27 analysts, of which 18 have been independently rated by the Financial Mail Top Analyst Awards for The 18 analysts were rated across 19 equity research sectors and achieved a number 1 in 6 of those sectors. 2. EVENTS AFTER THE REPORTING PERIOD At the end of the reporting period, conditions existed that Avior Capital Markets Holdings Limited will list on the JSE s Alt X after year end and this is therefore an adjusting event as per IAS10. This set of financial statements are therefore drafted based on the IAS 10 principle that Avior Holdings has already listed on the JSE Alt X at year end. 3. RESULTS COMMENTARY Revenue is derived primarily from brokerage and fee income from stockbroking, research, derivatives and fixed income, corporate finance and transition management services. For the year ended 30 April 2017, Group revenue decreased by 2% year-on-year to R179m. Revenue from the Group s cash equities and research division, which accounted for 70% of total Group revenue, declined 1% year-on-year owing in part to pricing pressure. The derivatives division recorded a 26% year-on-year decline in revenue. The division accounted for 11% of total revenue. The UK division grew revenue by 23% year-on-year during the period. The Africa division recorded a 6% year-on-year increase in revenue. While still a small component of total revenue, income from Corporate Finance registered a 160% year-on-year increase in revenue to R2.5m. Gross profit margins improved from 75.2% to 76.9% as JSE and data service costs fell. As a result, gross profit was flat during the period.

2 Operating expenses increased 5% year-on-year owing in part to a higher staff complement as the Group enhanced its research and administration teams. Due to the strength of the ZAR against the GBP, a R1.8m foreign exchange loss was recognised. Foreign exchange losses on the translation of the UK balance sheet amounting to R5.5m is included in other comprehensive income. 4. PROSPECTS The Group intends to enhance its existing service offerings, primarily through expanding its current research coverage, partnering with the new exchanges, offer stockbroking and research services in respect of issuers listed on such exchanges, expanding its corporate finance offering, and offering exchange traded fund products to its institutional client base. Prospects for the 2018 financial year are subject to numerous factors which remain uncertain, such as value traded on local and global markets. Pricing pressure remains a risk as investors continue to cut costs. Avior is well positioned to benefit from the introduction of MiFID II in Europe as asset managers remunerate high quality research providers. We are focused on continued improvement in our operational performance and leveraging our brand and strong operating platform. 5. REGULATORY CAPITAL SHORTFALL The JSE s Market Regulation Division commenced a formal investigation into Avior s breach of its capital adequacy requirements ( Shortfall Event ). This has been ongoing since October Avior has provided its full support and has co-operated fully with the JSE throughout this process. Additional details regarding the Shortfall Event can be found in paragraph 13.6 of the Avior Holdings Pre-Listing Statement dated 30 May CHANGES TO THE BOARD During the financial period under review, the following changes occurred to the Board: 6.1. Marilyn Ramplin was appointed as an independent non-executive director and chairperson of the Board with effect from Monday, 24 April Mark Collier was appointed as an independent non-executive director and chairperson of the Audit and Risk Committee with effect from Monday, 24 April Mr. Collier subsequently resigned with effect from Friday, 21 July The Board has commenced with the process to appoint a new independent non-executive director and shareholders will be advised once an appointment has been made Elias Masilela was appointed as an independent non-executive director, with effect from Monday, 24 April 2017.

3 7. CHANGES TO THE DESIGNATED ADVISOR AND COMPANY SECRETARY Ateeqah Khan was appointed as the Company Secretary on 5 April DISTRIBUTION OF ANNUAL FINANCIAL STATEMENTS AND NOTICE OF ANNUAL GENERAL MEETING 8.1. Distribution of the annual financial statements for the year ended 30 April 2017: A copy of the annual financial statements contained in this announcement, incorporating a notice of annual general meeting will be distributed by Avior Holdings to its shareholders on or about 23 August Shareholders should note that, as a result of Avior Holdings listing on the JSE s ALT X subsequent to its financial year-end, Avior Holdings will not prepare and distribute an integrated annual report for the year ended 30 April Accordingly, Avior Holdings first integrated annual report complying with the Listings Requirements of the JSE and the King IV Report on Corporate Governance ( King IV ) will be prepared and distributed for the financial year ending 30 April The Board endorses the principles contained in the King Report on Corporate Governance ( King III ) and confirms its commitment to those principles where, in the view of the Board, they apply to the Group. A copy of the King III compliance checklist is contained in the Pre-listing Statement made available on the Group s website Broad Based Black Economic Empowerment ( BBBEE ) Annual Compliance report Avior is a level 5 contributor to BBBEE. The BBBEE Annual Compliance Certificate is available for download on the Group website: Notice of annual general meeting: Notice: Notice is hereby given that the annual general meeting of the shareholders of the Group will be held in the boardroom of Avior Holdings at its registered offices located on the 1 st Floor, 82 on Maude, situated at 82 Maude Street, Sandton, Johannesburg, 2196 on Wednesday, 13 September 2017 at 10h00, to transact the formal business as set out in the notice of annual general meeting Record date: The date on which shareholders must be recorded as such in Avior Holdings share register in order to be eligible to attend and vote at the annual general meeting is Friday, 8 September 2017, with the last day to trade being, Tuesday, 5 September FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF AVIOR HOLDINGS MARILYN RAMPLIN Chairperson 28 July 2017 AUDITOR PKF (vga) Chartered Accountants Incorporated Audit partner: HC Nieuwoudt DESIGNATED ADVISOR Pallidus Capital Proprietary Limited TRANSFER SECRETARIES Terbium Financial Services Proprietary Limited REGISTERED OFFICE 82 on Maude 82 Maude Street Sandton WEBSITE:

4 SUMMARISED AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME % Audited Audited Figures in Rands change 30 April April 2016 Revenue -2% Cost of sales -8% ( ) ( ) Gross profit 0% Other income 2424% Operating expenses 5% ( ) ( ) Operating profit -12% Investment revenue 20% Fair value adjustments -99% Finance costs 114% ( ) ( ) Profit before taxation -17% Taxation -17% Profit for the year after taxation -17% Other comprehensive income: Items that may be reclassified to profit or loss: Exchange differences on translating foreign operations -960% ( ) Other comprehensive income for the year net of taxation -960% ( ) Total comprehensive income for the year -36% Earnings per share (cents) -34% Diluted earnings per share (cents) -34% Headline earnings per share (cents) -16% Diluted headline earnings per share (cents) -16% Earnings attributable to ordinary shareholders Loss or profit on disposal of property, plant and equipment (net of tax) ( ) 597 Exchange differences on translating foreign operations ( ) Headline earnings attributable to ordinary shareholders Number of shares in issue -18% Weighted average number of shares in issue -2% Diluted weighted average number of shares in issue -2%

5 SUMMARISED AUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION % Audited Audited Figures in Rands Change 30 April April 2016 Assets Non-Current Assets Property, plant and equipment 3% Intangible assets Deferred tax 52% Loan receivable 0% % Current Assets Loans to directors, managers and employees -32% Margin and collateral accounts 16% Trade and other receivables 92% Financial assets -52% Operating lease asset -100% Current tax receivable 311% Amounts receivable in respect of stock broking activities -89% Cash and cash equivalents 6% % Total Assets -71% Equity and Liabilities Equity Share capital -18% Reserves 244% ( ) ( ) Retained income -6% Liabilities Non-Current Liabilities Loans from related parties Current Liabilities Trade and other payables 11% Financial liabilities held for trading -40% Operating lease liability Current tax payable -97% Provisions 39% Amounts payable in respect of stock broking activities -90% % Total Liabilities -82% Total Equity and Liabilities -71% Total number of shares in issue -18% Net asset value per share 9%

6 SUMMARISED AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS Figures in Rands % change Audited Audited 30 April April 2016 Cash flows from operating activities Cash receipts from customers 8% Cash paid to suppliers and employees 48% ( ) ( ) Cash generated from operations -63% Interest income 4% Dividend income Finance costs 90% ( ) ( ) Tax paid 10% ( ) ( ) Net cash from operating activities -64% Cash flows from investing activities Purchase of property, plant and equipment -29% ( ) ( ) Purchase of other intangible assets ( ) - Net cash from investing activities -15% ( ) ( ) Cash flows from financing activities Buy back of shares ( ) - Movement in loans from related parties Dividends paid - 100% - ( ) Net cash from financing activities 67% ( ) ( ) Total cash movement for the year -95% Cash at the beginning of the year 302% Effect of exchange rate movement on cash balances Total cash at end of the year 6%

7 SUMMARISED AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Figures in Rands Share capital Share premium Total share capital Foreign currency translation reserve Treasury shares reserve Total reserves Retained income Total equity Balance at 01 May ( ) ( ) Profit for the year Other comprehensive income Total comprehensive income for the year Distribution of share premium - ( ) ( ) ( ) Purchase of own / treasury shares (130) - (130) - ( ) ( ) - ( ) Dividends ( ) ( ) Total contributions by and distributions to owners of group recognised directly in equity (130) ( ) ( ) - ( ) ( ) ( ) ( ) Balance at 01 May ( ) ( ) Profit for the year Other comprehensive income ( ) - ( ) - ( ) Total comprehensive income for the year ( ) - ( ) Purchase of own / treasury shares (3 070) - (3 070) - ( ) ( ) ( ) ( ) Transfer between reserves ( ) - Total contributions by and distributions to owners of group recognised directly in equity (3 070) - (3 070) ( ) ( ) Balance at 30 April ( ) - ( )

8 SUMMARISED AUDITED CONSOLIDATED SEGMENTAL INFORMATION Figures in Rands 2017 SA Region UK Region Total Segment revenue Revenue from external customers Intersegment revenues eliminated - ( ) ( ) Interest revenue Other income Segment expenses ( ) ( ) ( ) Cash expenses ( ) ( ) ( ) Interest expense ( ) - ( ) Intersegment expenses eliminated Depreciation and amortisation ( ) (45 636) ( ) Income tax expense ( ) Segment profit Non-cash items (not included in segments results) Foreign exchange gains/(losses) ( ) ( ) Fair value adjustments Segment assets and liabilities Segment assets Segment liabilities Investments Investments in subsidiaries Capital expenditure Computer equipment Leasehold improvements Furniture and Fixtures Office Equipment Computer software Motor vehicles Intangible asset - Cobi Interactive Software

9 Reconciliation between segment information Revenue and other income Total segment revenue Foreign exchange gains Fair value adjustments (non cash) Revenue as per statement of profit and loss Expenses ( ) Total segment expenses ( ) Foreign exchange gains/(losses) (non cash) ( ) Expenses as per statement of profit and loss ( ) Assets Total segment assets Loans to group companies eliminated ( ) Investments in subsidiaries ( ) Total assets as per statement of financial position Liabilities Total segment liabilities Loans from group companies ( ) Accruals ( ) Total liabilities as per the statement of financial position

10 2 016 SA Region UK Region Total Segment revenue Revenue from external customers Intersegment revenues eliminated - ( ) ( ) Interest revenue Other income Segment expenses ( ) ( ) ( ) Cash expenses ( ) ( ) ( ) Interest expense ( ) - ( ) Intersegment expenses eliminated Depreciation and amortisation ( ) (28 704) ( ) Income tax expense ( ) Segment profit Non-cash items (not included in segments results) Foreign exchange gains/(losses) ( ) ( ) Profit/(loss) on sale of tangible assets (37) (792) (829) Fair value adjustments Administration and management fees Segment assets and liabilities Segment assets Segment liabilities Investments Investments in subsidiaries Capital expenditure Computer equipment Leasehold improvements Furniture and fixtures Office equipment Computer software

11 Reconciliation between segment information Revenue and other income Total segment revenue Foreign exchange gains Fair value adjustments (non cash) Administration and management fees Revenue as per statement of profit and loss Expenses ( ) Total segment expenses ( ) Foreign exchange loss ( ) Profit/(loss) on sale of tangible assets (non cash) (829) Expenses as per statement of profit and loss ( ) Assets Total segment assets Loans to group companies eliminated ( ) Investments in subsidiaries ( ) Total assets as per statement of financial position Liabilities Total segment liabilities Loans from group companies ( ) Accruals ( ) Total liabilities as per the statement of financial position

12 Notes Basis of preparation The summarised consolidated annual financial statements have been prepared in accordance with the JSE Listings Requirements and the requirements of the Companies Act, 71 of 2008 (as amended) ( the Act ) applicable to summarised financial statements. The JSE Listings Requirements prescribes that summarised consolidated annual financial statements be prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards ( IFRS ) as issued by the International Accounting Standards Board, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of the consolidated annual financial statements were derived in terms of IFRS and are consistent with those accounting policies applied in the preparation of the previous consolidated annual financial statements. The consolidated annual financial statements have been prepared on the historical cost basis, except for the measurement of certain financial instruments at fair value, and incorporate the principal accounting policies. They are presented in South African Rand. The consolidated financial statements were compiled by Nerious Nhara (Northplan Chartered Accountants) under the supervision of Naeem Tilly (Financial Director) and were approved by the Board on 27 July Independent audit The summarised consolidated financial statements are extracted from audited information, but are not itself audited. The consolidated annual financial statements were audited by PKF (VGA) Chartered Accountants., who expressed an unmodified opinion thereon. The audited consolidated annual financial statements and the auditor s report thereon are available for inspection at the Group s registered office. The directors take full responsibility for the preparation of the summarised consolidated financial statements and the financial information has been correctly extracted from the underlying annual financial statements. Dividend Management believes that cash should be retained to fund future investment and growth within the Group. The Board has therefore resolved not to declare a dividend for this reporting period. P. Koutromanos N. Tilly (Chief Executive Officer) (Financial director)