Back to all announcements

DJ Inqo Investments Limited Half-year Report

TIDMINQO

RNS Number : 9999U

Inqo Investments Limited

01 November 2017

INQO INVESTMENTS LIMITED

UNAUDITED GROUP RESULTS FOR THE PERIOD ENDED 31 AUGUST 2017

CHAIRMAN AND CHIEF EXECUTIVE STATEMENT

Inqo Investments Limited ('Inqo' or 'the Company') is a South African based social impact company that acquires and invests in businesses that tackle poverty and the social needs of low income earners at the base of the economic pyramid in Sub-Saharan Africa.

COMMENTARY

The process that the group started in 2014 to consolidate its financial position was concluded in the 2016/7 year which meant that the group started this 2017/8 financial year with no debt leading to the group being able to produce a stronger balance sheet.

The results for the six months reflected a loss after tax of R4,045,783 (August 2016: a profit of R6,989,880) of which R1,029,799 was for depreciation. The results for the first half of the last financial year 2016/7 were buoyed by a once off write back of interest on renegotiated loans, which were settled in April 2016.

Inqo's revenues are derived primarily from its main subsidiary, the Kuzuko Lodge. In the first six months of this year, revenues have grown to R7,605,499 (2016: R5,324,300) a rise of 43%. This is a marked improvement in trading given that these financial results cover the low season period.

INVESTEE COMPANIES

Kuzuko Lodge (South Africa)

The Lodge traded at a loss for the six months to date reflecting a loss of R2,006,939 (August 2016 six month period: R1,864,204). Trading in the six month period to date has improved year on year and improved occupancy levels are anticipated for the rest of the 2017/8 high season as shown by the advanced bookings currently in the system and already prepaid.

Annual occupancy to date at 31 August 2017 reflects a 20% improvement compared to 2016 while the average room rate shows a 51% improvement over 2016.

The Kuzuko Foundation supported 100 pupils from township schools on a day visit to the Kuzuko Educational Park. The Foundation is supported by donors as well as guests at Kuzuko Lodge.

Spekboom Trading (South Africa)

We continue our interaction with the Department of Environmental Affairs (DEA) to obtain a further reforestation grant to extend the planting of spekboom on the Kuzuko Game Reserve. When an agreement is reached with the DEA we will create some 100 new jobs in the local community. To date, the company has re-planted 500 acres of spekboom on degraded land.

Bee Sweet Honey (Zambia)

Inqo invested US$60,000 in Bee Sweet Honey Limited, a Zambian exporter of honey. Bee Sweet currently have 90,000 bee hives in the field managed by 13,000 farmers. The harvest for the May 17 crop was 133 Metric tonnes with Inqo's share being 7.4 tonnes. Inqo earned its first revenue from the honey harvested in May 17.

Four-One Financial Services Limited (Uganda)

In April 2017, the company made an investment in Four-One Financial Services Limited, a Ugandan based company which manages the Mazima Voluntary Individual Retirement Benefits Scheme.

The Mazima Retirement Plan is the trading name of Mazima Voluntary Individual Retirement Benefits Scheme (MVIRBS). It is a retirement savings scheme for low income earners in the informal sector of the economy. The poor and informal workers do not currently have any formal retirement for such low income earners. Mazima is supervised by a group trustees and is licensed and regulated by the Uganda Retirements Benefits Regulatory Authority (URBRA), the government body that regulates all pension and retirement benefits schemes. Four-One Financial Services is the management company responsible for marketing and administration of the Mazima retirement scheme.

Savers register online and pay through mobile banking or e-banking through the bank. No cash is used. Each saver has his/her own account managed by the custodian bank, Housing Finance Bank. The investments are managed by AA Financial, a regulated advisor.

OUTLOOK

Inqo expects to benefit from improved trading from the Kuzuko Lodge operation and revenues from each of the Bee Sweet Honey Operation and the Four-One Financial Services Investment.

The occupancies and average room rates currently achieved at Kuzuko Lodge in the second six months of the 2017/8 year are very strong, with the Lodge experiencing higher than ever occupancy levels in the final quarter of 2017. This trend is expected to continue into 2018 on the back of the fact that the Rand remains weak against other currencies making South Africa an attractive destination of travel. Kuzuko Lodge is situated in a malaria free area and this factor is proving to be positive to the business as the Lodge is now experiencing a higher level of enquiries from potential North American visitors.

SUMMARY OF SOCIAL & ENVIRONMENTAL METRICS SINCE PROJECT COMMENCEMENT

-- 39,000 acres of former farmland restored as a game reserve in a region of endemic poverty in the poorest province in South Africa.

-- Increased VAT and income tax paid year on year, currently 55 fulltime and 12 part-time and contracted staff employed.

-- All staff living at Kuzuko in standard housing with flush toilets, power, water and solar panels.

   --      Conservation of 3 endangered species. 

-- 100 pupils from township schools entertained on a day visit to the Kuzuko Educational Centre to learn about conservation in the period from June to August

-- Reforestation of 500 acres of degraded land with spekboom providing work for 100 part time staff.

-- 90,000 beehives in the field providing 13,000 farmers with increased income. 3000 of these hives are the property of Inqo.

-- The Mazima Retirement Plan now has 830 active members having grown from 430 active members in August 2016.

STAFF

The directors would like to take this opportunity to thank all the operating staff in the group for their contribution and commitment to the group's objectives.

FINANCIAL INFORMATION

The financial information set out in this announcement does not constitute statutory financial statements. This financial information has been extracted from Inqo's unaudited condensed consolidated financial statements for the six months ended 31 August 2017.

KPMG has performed a review of the condensed consolidated interim financial statements for the six months ended 31 August 2017.

A copy of these condensed consolidated interim financial statements and KPMG's review report will be available at the Company's offices on 1 November 2017.

DIVIDEND

The company has not declared a dividend for the period ended 31 August 2017.

K.S Tan

Chairman

C.J Bertie

Chief Financial Officer

ENQUIRIES

 
 Inqo Investments Limited 
 Mr Chris Bertie, Chief Financial 
  Officer 
 and Chief Operating Officer        Tel: +27 (0)83 625 4069 
 
 Shard Capital Partners LLP 
 NEX Exchange Corporate Adviser 
  and Broker 
 Dr Wang Chong                      Tel: +44 (0)20 7186 
                                     9948 
 
 
 Inqo Investments 
  Limited Group 
 Condensed consolidated statement of profit or 
  loss and other comprehensive income 
 For the six months ended 
  31 August 2017 
 
                                                              Group 
                                    (Reviewed)             (Reviewed)              (Audited) 
                                    Six Months             Six Months             Year ended 
                                       ended 
                                         31                 ended 31              28 February 
                                      August 
                                        2017               August 2016               2017 
 
                                    (6 months)             (6 months)             (12 months) 
                                       R'000                  R'000                  R'000 
 
 Revenue                                      7 652                   5 324                17 026 
 Cost of sales                              (1 160)                   (909)               (2 390) 
                               --------------------  ----------------------  -------------------- 
 Gross profit                                 6 492                   4 415                14 636 
 
 Other income                                     -                  13 977                14 042 
 Selling and administrative 
  expenses                                 (11 095)                 (8 251)              (19 457) 
                               --------------------  ----------------------  -------------------- 
 Operating (loss) 
  / profit                                  (4 603)                  10 141                 9 221 
 
 Fair value adjustment                            -                       -                   502 
 
 Net financing 
  income                                         86                     469                   536 
 Finance income                                 101                     495                   581 
 Finance costs                                 (15)                    (26)                  (45) 
                               --------------------  ----------------------  -------------------- 
 
 (Loss) / profit 
  before taxation                           (4 517)                  10 610                10 259 
 Taxation                                       471                 (3 620)               (2 868) 
                               --------------------  ---------------------- 
 (Loss) / profit 
  for the year                              (4 046)                   6 990                 7 391 
                               --------------------  ----------------------  -------------------- 
 Other comprehensive 
  income 
                                                  -                       -                10 575 
 Revaluation of 
  land                                            -                       -                13 627 
 Deferred tax on 

(MORE TO FOLLOW) Dow Jones Newswires

November 01, 2017 03:00 ET (07:00 GMT)

DJ Inqo Investments Limited Half-year Report -2-

  revaluation                                     -                       -               (3 052) 
                               --------------------  ----------------------  -------------------- 
 
 Total comprehensive 
  income for the 
  period                                    (4 046)                   6 990                17 966 
                               ====================  ======================  ==================== 
 
 
 (Loss)/earnings 
  per share (cents)                          (0.29)                    0.65                  0.61 
 Diluted (loss)/earnings 
  per share (cents)                               -                    0.65                  0.58 
 
 
 
 Inqo Investments 
  Limited Group 
 Condensed consolidated statement 
  of financial position 
 At 31 August 2017 
 
                                                           Group 
                                   (Reviewed)           (Reviewed)            (Audited) 
                                   31 August             31 August           28 February 
                                      2017                 2016                  2017 
                                     R'000                 R'000                R'000 
 Assets 
 Non-current assets                       132 849               120 065              132 870 
 Property, plant 
  and equipment                           131 266               119 089              131 898 
 Intangible assets                             14                    22                   18 
 Other Investments                          1 013                   954                  954 
 Loan Receivables                             556                     -                    - 
                              -------------------  --------------------  ------------------- 
 
 Current assets                             7 291                11 306               10 655 
 Inventories                                  663                   584                  486 
 Trade and other 
  receivables                               2 267                 2 378                3 115 
 Biological assets                          3 605                 3 023                3 512 
 Cash and cash equivalents                    756                 5 321                3 542 
                              -------------------  --------------------  ------------------- 
 
 Total assets                             140 140               131 371              143 525 
                              ===================  ====================  =================== 
 
 Equity and liabilities 
 Capital and reserves 
 Ordinary share 
  capital                                  58 198                58 198               58 198 
 Share premium                             58 228                58 228               58 228 
 Revaluation reserve                       70 774                60 200               70 774 
 Accumulated loss                        (62 186)              (58 319)             (58 786) 
                              -------------------  --------------------  ------------------- 
 Equity attributable 
  to equity holders 
  of Inqo Investments 
  Limited                                 125 014               118 307              128 414 
 Non-controlling 
  interest                                  (472)                 (695)                  173 
                                                   --------------------  ------------------- 
 Total equity                             124 542               117 612              128 587 
 
 Non-current liabilities                    9 296                 7 416                9 753 
 Loans from related 
  parties                                     436                   414                  436 
 Other long term 
  loans                                       580                   552                  566 
 Deferred taxation                          8 087                 6 257                8 558 
 Debentures                                   193                   193                  193 
                              -------------------  --------------------  ------------------- 
 
 Current liabilities                        6 302                 6 343                5 185 
 Trade and other 
  payables                                  6 050                 5 088                4 933 
 Provision                                    252                   252                  252 
 Interest bearing                               -                                          - 
  loans and borrowings 
  - current portion                                               1 003 
                              -------------------  --------------------  ------------------- 
 
 Total liabilities                         15 598                13 759               14 938 
 
 Total equity and 
  liabilities                             140 140               131 371              143 525 
                              ===================  ====================  =================== 
 
 
 
  Inqo Investments Limited Group 
   Unaudited interim financial information for 
    the six months ended 31 August 2017 
 
   Basis of preparation 
 
   The interim financial statements are prepared 
    in accordance with IAS 34 Interim Financial 
    Statements and the requirements of the Companies 
    Act of South Africa and should be read in conjuction 
    with the Group's last annual consolidated financial 
    statements as at and for the year ended 28 February 
    2017 ('last annual financial statements'). They 
    do not include all of the information required 
    for a complete set of IFRS financial statements. 
   The condensed financial information has been 
    presented on the historical cost basis, except 
    for financial instruments carried at fair value, 
    and are presented in Rands which is Inqo Investment 
    Ltd's functional and presentation currency. 
   This financial inforamtion has been extracted 
    from Inqo's unaudited condensed consolidated 
    interim financial statements for the six months 
    ended 31 August 2017. 
   This financial information was prepared under 
    the supervision of Mr C Bertie CA(SA), in his 
    capacity as group financial director. 
 
 
 Inqo Investments 
  Limited Group 
 Summarised financial 
  information 
 For the six months 
  ended 31 August 2017 
 
                                                             Group 
                                      (Reviewed)          (Reviewed)          (Audited) 
                                      Six Months          Six Months          Year ended 
                                        ended                ended 
                                          31                   31            28 February 
                                        August              August 
                                         2017                 2016               2017 
 
                                      (6 months)          (6 months)         (12 months) 
 
 Earnings/(loss) 
  per share 
 
 (Loss)/earnings 
  per share (cents)                       (0.29)                   0.65                 0.61 
 Diluted (loss)/earnings 
  per share (cents)                            -   *               0.65                 0.58 
 (Loss)/profit attributable 
  to equity shareholders 
  (R'000)                                (3 401)                  7 551                7 085 
 Weighted average 
  number of shares 
  in issue for normalised                 11 639                 11 639               11 639 
  EPS calculation                            615                    615                  615 
 Weighted average 
  number of shares 
  in issue for diluted                    11 755                 11 677               12 205 
  normalised EPS calculation                 656                    473                  410 
 
 
 * Computation of the diluted earnings per share 
  is anti-dilutive and therefore has not been computed. 
 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

NEXBSBDGCXXBGRG

(END) Dow Jones Newswires

November 01, 2017 03:00 ET (07:00 GMT)