DJ Inqo Investments Limited Half-year Report
TIDMINQO
RNS Number : 9767P
Inqo Investments Limited
24 November 2016
INQO INVESTMENTS LIMITED
UNAUDITED GROUP RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2016
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 period since October 2014 to date has been a period of consolidation and over this period the group has negotiated loan settlements with our two institutional lenders that have resulted in a R30 million interest saving. The final DBSA transaction was settled in April 2016 and as a result, an interest write-back of R14 million was processed to the income statement. The loan with ECDC was settled in September 2016.
The results for the six month period reflected a profit after tax for the six month period of R6,989,880 (August 2015 six month period: Loss of R3,035,766) equating to R0.60 per share with revenues of R5,324,300 (2015: R3,228,177), a rise of 65%. The improved group results reflected in this six month period to 31 August 2016 have come about as a result of the improved trading at Kuzuko Lodge and the finalisation of the loan restructuring package entered into.
INVESTEE COMPANIES
Kuzuko Lodge
The Lodge traded at a loss for the six months to date reflecting a loss of R1,862,500 (August 2015 six month period: R2,497,774). Trading in the six month period to date has improved year on year. The first six months of our business cycle are the quieter ones and we expect to see substantially improved trading results in the second half of the financial year through the improved occupancies and rates trends that we have experienced and that we see in current advance bookings. Annual occupancy to date at 31 August 2016 shows a 30% improvement compared to 2015.
Spekboom Trading
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
Inqo invested US$60,000 in Bee Sweet Honey Limited, a Zambian exporter of honey. Bee Sweet currently have 66,000 bee hives in the field managed by 13,000 farmers. The farmers earned US$108,438 in the May/June season of 2016. Inqo expects to earn its first revenue from the sale of honey in the 2017/8 year. In the period under review 110 tons of honey was sold internationally and 33 tons sold locally.
Medical Diagnostech
The company manufactures rapid point-of-care (POC) tests for HIV/AIDS, malaria, drugs of abuse and pregnancy.
The company produced 450,000 test kits in the six months to 31 August 2016.
OUTLOOK
Inqo expects to continue to benefit from the improved trading at Kuzuko Lodge while first revenues from its Bee Sweet Honey investment will accrue in the 2017/8 year.
The improved room rates that have been achieved and the increased occupancies experienced at Kuzuko Lodge in the first six months of the current year and the balance of 2016/7 are continuing on the back of the fact that the Rand remains weak against other currencies, making South Africa an attractive destination for tourists.
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 employee 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.
-- Reforestation of 500 acres of degraded land with spekboom providing work for 81 part time staff.
-- 450,000 low cost medical diagnostic tests for infectious diseases manufactured and supplied in the six months ended 31 August 2016.
-- 66,000 beehives in the field providing 13,000 farmers with increased income. Farmers earned an average of US$55 in the six month trading period to date.
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 group financial statements for the six month period ended 31 August 2016. KPMG has performed a review of the condensed consolidated interim financial statements for the six months ended 31 August 2016. A copy of these condensed consolidated interim financial statements and KPMG's review report will be available at the company's registered office by 30 November 2016.
DIVIDEND
The company has not declared a dividend for the period ended 31 August 2016.
K.S Tan C.J Bertie Chairman Chief Financial Officer
23 November 2016
Enquiries
Inqo Investments Limited Mr Chris Bertie, Chief Financial Officer and Chief Operating Officer Tel: +27 (0)83 625 4069 Shard Capital Partners LLP ISDX Corporate Adviser and Broker Dr Wang Chong Tel: +44 (0)20 7186 9948
Inqo Investments Limited Group
Unaudited interim financial information for the six months ended 31 August 2016
Basis of preparation
The interim financial statements are prepared in accordance with International Financial Reporting Standards, IAS 34 Interim Financial Reporting, the SAICA Financial Reporting Guides issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and the requirements of the Companies Act of South Africa.
The accounting policies applied in the preparation of these interim financial statements are in terms of International Financial Reporting Standards and are consistent with those applied in the previous annual 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 information was prepared under the supervision of Mr C Bertie CA(SA), in his capacity as group financial director.
Inqo Investments Limited Group
Statement of comprehensive income
for the six months ended 31 August 2016
Group
(Reviewed) (Reviewed) (Audited)
Six Months ended Six Months ended Year ended 29
31 August 2016 31 August 2015 February
2016
(6 months) (6 months) (12 months)
R R R
Revenue 5 324 300 3 228 177 10 650 195
Cost of sales (909 201) (603 995) (1 649 670)
------------------- ------------------- -------------------
Gross profit 4 415 099 2 624 182 9 000 525
Other income 13 976 887 2 058 205 867 241
Selling and administrative expenses (8 250 713) (8 107 915) (14 795 348)
------------------- ------------------- -------------------
Operating profit / (loss) 10 141 273 (3 425 528) (4 927 582)
Fair value adjustment - - 267 200
Net financing income / (costs) 468 675 389 762 (57 889)
------------------- ------------------- -------------------
Finance income 495 125 1 242 660 996 893
Finance costs (26 450) (852 898) (1 054 782)
------------------- ------------------- -------------------
Profit / (loss) before taxation 10 609 948 (3 035 766) (4 718 271)
Taxation (3 620 068) - 259 385
------------------- ------------------- -------------------
Profit / (loss) for the year 6 989 880 (3 035 766) (4 458 886)
------------------- ------------------- -------------------
Other comprehensive income
- - (2 896 203)
------------------- ------------------- -------------------
Revaluation of land - - -
Deferred tax on revaluation - - (2 896 203)
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DJ Inqo Investments Limited Half-year Report -2-
------------------- ------------------- -------------------
Total comprehensive income for the period 6 989 880 (3 035 766) (7 355 089)
=================== =================== ===================
Earnings/(loss) per share (cents) 0.60 (0.53) (0.62)
Diluted earnings/(loss) per share (cents) 0.60 (0.39) (0.59)
Inqo Investments Limited Group
Statement of financial
position
at 31 August 2016
Group
(Reviewed) (Reviewed) (Audited)
31 August 31 August 29 February
2016 2015
2016
Assets R R R
120 064 118 007 119 109
Non-current assets 534 481 761
----------- ----------- -------------
Property, plant and 119 088 117 975 119 081
equipment 580 185 602
Intangible assets 21 660 32 296 28 159
Investment 954 294 - -
11 305 17 974 31 803
Current assets 982 452 519
----------- ----------- -------------
Inventories 583 599 725 038 389 211
2 377 2 109 4 806
Trade and other receivables 775 548 513
3 023 2 683 2 950
Biological assets 500 000 200
5 321 12 456 23 657
Cash and cash equivalents 108 866 595
----------- ----------- -------------
131 370 135 981 150 913
Total assets 516 933 280
=========== =========== =============
Equity and liabilities
Capital and reserves
58 198 28 813 58 198
Ordinary share capital 075 042 075
58 227 13 265 58 227
Share premium 703 727 703
60 199 63 095 60 199
Revaluation reserve 652 855 652
(58 881 (64 581 (65 871
Accumulated loss 154) 006) 034)
---------- --------- ----------
Equity attributable
to equity holders
of Inqo Investments 117 744 40 593 110 754
Limited 276 618 396
Non-controlling (132
interest (132 561) 531 561)
---------- --------- ----------
117 611 40 594 110 621
Total equity 715 149 835
7 416 81 076 17 759
Non-current liabilities 089 217 198
---------- --------- ----------
Loans from related 27 960
parties 413 779 525 413 779
Other long term 33 945
loans - convertible 551 967 348 538 257
Interest bearing 18 976 13 976
loans and borrowings - 887 887
6 256 2 636
Deferred taxation 886 - 818
Debentures 193 457 193 457 193 457
----------
6 342 14 311 22 532
Current liabilities 712 567 247
---------- --------- ----------
Trade and other 5 087 2 956 6 277
payables 579 799 114
Provision 251 796 352 543 251 796
Interest bearing
loans and borrowings 1 003 11 002 16 003
- current portion 337 225 337
---------- --------- ----------
13 758 95 387 40 291
Total liabilities 801 784 445
Total equity and 131 370 135 981 150 913
liabilities 516 933 280
========== ========= ==========
Inqo Investments Limited Group
Summarised financial information
For the six months ended 31 August 2016
(Reviewed) (Reviewed) (Audited)
Six Months Six Months Year ended
ended ended 29 February
31 August 31 August 2016
2016 2015
(6 months) (6 months) (12 months)
Earnings/(loss) per
share
Earnings/(loss) per
share (cents) 0.60 (0.53) (0.62)
Diluted earnings/(loss)
per share (cents) 0.60 (0.39) (0.59)
Profit/(loss) attributable 6 989
to equity shareholders 880 (3 035 766) (7 221 997)
Weighted average
number of shares
in issue for normalised 11 639
EPS calculation 615 5 762 606 11 555 340
Weighted average
number of shares
in issue for diluted 11 677
normalised EPS calculation 473 7 873 156 12 093 580
This information is provided by RNS
The company news service from the London Stock Exchange
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