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Datatec Limited - Half-year Report

RNS Number : 2440W
Datatec Limited
13 November 2017
 

13 November 2017

 

Datatec Limited

 

 

Results for the six months ended 31 August 2017

 

Datatec Limited ("Datatec", the "Company" or the "Group", JSE and LSE: DTC), the international information and communications technology (ICT) group, is today publishing its unaudited interim results for the six months ended 31 August 2017 ("the Period" or "H1 FY18").

 

Highlights

·    Value unlocked through two significant disposals:

o Sale of Westcon Americas and 10% of Westcon International to SYNNEX Corporation for up to US$830 million

o Sale of Logicalis SMC, Dutch business unit for US$42 million

·    Plan to return US$350 million of cash to shareholders

·    Any deferred consideration received from SYNNEX will be returned to shareholders

·    Westcon International to be streamlined

·    Positive outlook for Logicalis in second half

·    Continuing operations: revenue US$1.84 billion (H1 FY17: US$1.98 billion); EBITDA US$7.7 million (H1 FY17: US$24.4 million

·    Underlying* earnings per share 1.4 US cents (H1 FY17: 12.5 US cents)

 

Datatec Limited (www.datatec.com)

 

Jens Montanana - Chief Executive Officer

+44 (0) 1753 797 118

Ivan Dittrich - Chief Financial Officer

+27 (0) 11 233 3301

Wilna de Villiers - Investor Relations Manager

+27 (0) 11 233 1013

Jefferies International Limited - Nominated adviser and broker

Nick Adams/Simon Hardy

+44 (0) 20 7029 8000

finnCap - Broker

 

Stuart Andrews

+44 (0) 20 7220 0500

Instinctif Partners

 

Frederic Cornet/Keagile Makgoba (SA)

+27 (0) 11 447 3030

Adrian Duffield/Chantal Woolcock (UK)

+44 (0) 20 7457 2077

 

Jens Montanana, Chief Executive of Datatec, commented:

"Although the first half headline results were disappointing, we have generated exceptional value through the successful sale of our Westcon Americas business and recently the smaller disposal of the non-core Logicalis SMC business.

"In the near term, we plan to return US$350 million of cash to shareholders in a structured way to give them maximum flexibility and in due course return to shareholders any deferred cash consideration from the sale of Westcon Americas.

"The outlook for Logicalis, which contributed most of our profits, is increasingly positive with a number of important developments set to support an overall improvement in H2. We are moving rapidly to create the appropriate structure in Westcon International to support the direction of the business."

 

GROUP ACTIVITIES

Datatec is an international ICT solutions and services group operating in more than 50 countries across North America, Latin America, Europe, Africa, Middle East and Asia-Pacific. The Group's service offering spans the technology, distribution, integration and consulting sectors of the ICT market.

Following the sale of the Westcon Americas businesses to SYNNEX in September 2017, Datatec operates two main divisions:

·    Technology distribution - Westcon International: distribution of security, collaboration, networking and data centre products and solutions; and

·   Integration and managed services - Logicalis: ICT infrastructure solutions and services.

The specialist activities of Consulting and Datatec Financial Services are included with the corporate head office functions in the "Corporate, Consulting and Financial Services" segment of the Group.

STRATEGIC OVERVIEW

Datatec's strategy remains to deliver long-term, sustainable and above average returns to shareholders through portfolio management and the development of its principal subsidiaries providing technology solutions and services to targeted customers in identified markets around the world.

The Group completed two major disposals after the half-year, realising material returns to shareholders.

Effective 1 September 2017, the Group sold Westcon-Comstor's businesses in North America and Latin America ("Westcon Americas") and a 10% interest in the remaining part of Westcon-Comstor ("Westcon International") to SYNNEX Corporation for US$630 million in cash, with the potential for an earn-out of up to US$200 million in cash.

In October 2017, Logicalis also realised significant value from the sale of its non-core SMC consulting business to DXC Technology Company (NYSE: DXC) for US$42 million.

Following the disposal of Westcon Americas (the largest profit contributor of Westcon-Comstor) the remaining business, Westcon International, will be directly managed by the Datatec management team. This business, which has faced difficult trading for the last few years, will be reshaped through a combination of cost-reduction measures and business efficiency initiatives.

Westcon International currently retains the circa US$63 million annual central costs of Westcon-Comstor and has a transitional services agreement with SYNNEX, which will run until August 2018. Subsequently, Westcon International will be able to implement fully its plans to reduce the central costs and right-size the business.

Logicalis has now become the strongest part of the Group in terms of profitability and cash generation and continues to provide the widest geographical exposure with its substantial Latin American and USA businesses. The Group intends to continue to develop and grow the Logicalis business.

As announced on 24 October 2017, the AIM listing of Datatec shares will be cancelled on 8 December 2017. The AIM listing has not had the desired effect of diversifying Datatec's investor base and trading of the shares on AIM has dwindled to negligible volumes.

The Group's trading in H1 FY18 continued to be adversely impacted by the roll out of the SAP ERP system and business process outsourcing ("BPO") across Westcon-Comstor's operations in Europe, Middle East and Africa ("EMEA").

Westcon Americas and the Logicalis SMC business are classified as a "disposal group" in accordance with IFRS 5. The Group's results for H1 FY18 are reported in the form of the "continuing operations", excluding the disposal group.

Continuing operations had revenues of US$1.84 billion in H1 FY18 and US$1.98 billion in the six-month financial period ended 31 August 2016 ("the Comparable Period" or "H1 FY17"). Continuing EBITDA was US$7.7 million in H1 FY18 (H1 FY17: US$24.4 million).

Group total revenue, on the "combined" basis including revenue of the disposal group, for H1 FY18 was US$2.99 billion compared to US$3.04 billion in H1 FY17. Group combined EBITDA was US$39.3 million (H1 FY17: US$68.9 million).

Underlying* earnings per share ("UEPS") was 1.4 US cents compared to 12.5 US cents for H1 FY17.

Given the Group's dividend policy and as underlying* earnings in H1 FY18 would only support a negligible dividend, the Board is not declaring an interim dividend.

CURRENT TRADING AND OUTLOOK

While the Group's trading in H1 FY18 has been disappointing, the Board expects a much better performance from Logicalis in H2 FY18. 

 

Logicalis is expected to benefit from the contribution of Packet Systems Indonesia ("PSI") which was acquired in September 2017 and a major multi-year contract win in Latin America, which will underpin the performance of Logicalis in that geography. 

 

Datatec is continuing to focus on improving the financial performance of Westcon International and streamlining its operations.

 

PROPOSED DISTRIBUTION TO SHAREHOLDERS following the disposal of westcon americas

The Company has consulted with its principal bankers relative to adjusting its debt levels and agreed that $350 million of the designated free cash of $500 million may be distributed to shareholders. The balance of $150 million will be utilised to reduce the Group's residual interest bearing debt to mutually acceptable levels. For clarity, no part of the amount retained is earmarked for acquisitions and all will be applied to debt reduction and working capital funding.

 

The Board intends to distribute a special dividend of $350 million (approximately R5 billion) to shareholders as a cash dividend with a scrip distribution alternative.

 

To the extent that the full $350 million is not paid due to shareholders electing the scrip distribution alternative, the Board will use the full undistributed cash amount to do a general buyback of shares through the market under the authority granted at the Annual General Meeting on 14 September 2017. 

 

The formal dividend declaration is expected to be done before the end of November 2017.

 

Shareholders will be advised in due course when the result of the special dividend election is known.

 

In addition, a further special dividend will be declared and/or a share buyback effected from all of the SYNNEX earn-out consideration received by the Group. This is expected to be known and advised to shareholders in April 2018.

 

GROUP RESULTS

Revenue

Group combined revenues for the period were US$2.99 billion (H1 FY17: US$3.04 billion). Continuing revenues of US$1.84 billion in H1 FY18 (H1 FY17: US$1.98 billion) are included in the combined results as shown in the table below.

 

 

 

US$ millions

Combined

H1 FY18

Continuing

H1 FY18

Disposal

group

H1 FY18

Combined

H1 FY17

Continuing

H1 FY17

Disposal

group

H1 FY17

Revenue

 

 

 

 

 

 

Westcon-Comstor

 2 278.6

 1 148.0

 1 130.6

 2 256.1

 1 216.4

 1 039.7

Logicalis

 693.7

 677.6

 16.1

 757.2

 736.1

 21.1

Consulting and Financial Services

 19.2

 19.2

-

 23.6

 23.6

-

 

 2 991.5

 1 844.8

 1 146.7

 3 036.9

 1 976.1

 1 060.8

Revenue by geography

 

 

 

 

 

 

North America

 1 027.3

 184.3

 843.0

 1 056.4

 237.3

 819.1

Latin America

 496.3

 208.7

 287.6

 415.9

 195.3

 220.6

Europe

 964.2

 948.1

 16.1

 1 018.6

 997.5

 21.1

Asia-Pacific

 325.2

 325.2

-

 345.3

 345.3

-

MEA

 178.5

 178.5

-

 200.7

 200.7

-

 

 2 991.5

 1 844.8

 1 146.7

 3 036.9

 1 976.1

 1 060.8

Gross profit by geography

 

 

 

 

 

 

North America

 106.5

 50.2

 56.3

 125.5

 63.1

 62.4

Latin America

 87.9

 48.8

 39.1

 80.1

 44.3

 35.8

Europe

 130.5

 127.2

 3.3

 139.0

 135.4

 3.6

Asia-Pacific

 55.3

 55.3

-

 52.7

 52.7

-

MEA

 17.9

 17.9

-

 22.5

 22.5

-

 

 398.1

 299.4

 98.7

 419.8

 318.0

 101.8

Group EBITDA

 

 

 

 

 

 

Westcon-Comstor

 19.0

 (12.0)

 31.0

 42.9

 (1.2)

 44.1

Logicalis

 28.8

 28.2

 0.6

 33.0

 32.6

 0.4

Consulting and Financial Services

 (8.5)

 (8.5)

-

 (7.0)

 (7.0)

-

 

 39.3

 7.7

 31.6

 68.9

 24.4

 44.5

 

Group combined gross margins in H1 FY18 were 13.3% (H1 FY17: 13.8%) and continuing gross margins in H1 FY18 were 16.2% (H1 FY17: 16.1%). Combined gross profit was US$398.1 million (H1 FY17: US$419.8 million) including US$299.4 million (H1 FY17: US$318.0 million) gross profit from continuing operations.

Overall combined operating costs were US$358.8 million (H1 FY17: US$350.9 million), including US$291.7 million (H1 FY17: US$293.6 million) from continuing operations. Included in the combined operating costs are total restructuring costs of US$6.7 million (H1 FY17: US$7.2 million).

Combined EBITDA was US$39.3 million (H1 FY17: US$68.9 million) and combined EBITDA margin was 1.3% (H1 FY17: 2.3%). Continuing EBITDA was US$7.7 million (H1 FY17: US$24.4 million) and continuing EBITDA margin was 0.4% (H1 FY17: 1.2%).

Combined operating profit was US$10.0 million (H1 FY17: US$40.7 million) including a loss of US$19.0 million (H1 FY17: US$0.7 million) from continuing operations.

The combined net interest charge increased to US$17.0 million (H1 FY17: US$10.3 million).

Combined loss before tax was US$6.6 million (H1 FY17: US$34.3 million profit). Loss before tax from continuing operations was US$28.5 million (H1 FY17: US$2.1 million).

A tax charge of US$0.9 million has arisen on a loss from continuing operations of US$28.5 million. This is largely due to the fact that the tax credit associated with certain management and IT costs of the continuing business have been treated as a benefit arising for the disposal group. This is also reflected in the comparative numbers. The underlying tax rate continues to be adversely affected by losses arising in Westcon-Comstor's Asia-Pacific and Africa regions for which limited deferred tax assets have been recognised.

Underlying* earnings per share were 1.4 US cents (H1 FY17: 12.5 US cents). Headline loss per share was 5.8 US cents (H1 FY17: 9.1 US cents headline earnings per share).

 

Cash

The Group generated US$29.3 million of cash from combined operations during H1 FY18 (H1 FY17: US$24.2 million) and ended the period with a combined net debt of US$428.6 million (H1 FY17: US$251.7 million and FY17: US$396.5 million). The increase in net debt is a result of reduced cash earnings and funding of increased working capital. Of the net debt at 31 August 2017, US$273.4 million related to continuing operations and US$155.2 million related to the disposal group.

On 1 September 2017, the Group received US$630 million for the sale of Westcon Americas to SYNNEX.

Acquisitions

Effective 1 June 2017, Analysys Mason acquired 100% of the share capital of Nexia Management Consulting AS, a telecoms management consultancy company registered in Norway.

Effective 4 July 2017, Logicalis Group acquired 51% of the share capital in NubeliU, a South America-based company specialising in cloud computing projects based on OpenStack.

As a result of these acquisitions, goodwill and other intangibles assets increased by US$6.7 million and US$1.8 million respectively. None of the goodwill recognised is expected to be deductible for income tax purposes. The revenue and EBITDA included from these acquisitions in H1 FY18 were US$1.0 million and US$0.1 million respectively. Had the acquisition dates been 1 March 2017, revenue and EBITDA attributable to these acquisitions would have been approximately US$2.4 million and US$0.2 million for H1 FY18 respectively.

Acquisition-related costs of the above acquisitions of US$0.3 million are included under operating costs in the condensed consolidated statement of comprehensive income.

An assessment of the fair value of the assets acquired across both the acquisitions made by the Group is shown in the table below.

Shareholder distributions and dividend policy

The Group's policy is to maintain a fixed three times cover relative to underlying* earnings when declaring dividends. The level of underlying earnings in H1 FY18 would only support a negligible dividend under this policy so no interim dividend for FY18 is declared.

As set out above, the Board has determined a structured programme of dividends and share repurchases in order to return the majority of cash received from the SYNNEX transaction to shareholders.

Foreign exchange translation

Gains of US$8.5 million (H1 FY17: US$47.5 million) arising on translation to presentation currency are included in total comprehensive loss of US$0.3 million (H1 FY17: income US$62.8 million).

DIVISIONAL REVIEWS

 

Westcon-Comstor

Westcon-Comstor accounted for 76% of the Group's combined revenues (H1 FY17: 74%) and 62% of the Group's continuing revenues (H1 FY17: 62%). Westcon-Comstor accounted for 59% of its combined EBITDA (H1 FY17: 56%).

Westcon-Comstor is a value-added technology distributor of category-leading solutions in security, collaboration, networking and data centre. Westcon-Comstor is transforming the technology supply chain through its global capabilities in cloud, services and global deployment. It has teams in 50-plus countries, combining expert technical and market knowledge with industry-leading partner enablement programmes. Collaborating with its partners in a unique engagement model, Westcon-Comstor strives to provide an exceptional partner experience by delivering results together. The company goes to market under the Westcon and Comstor brands. Westcon-Comstor's portfolio of market-leading vendors includes: Cisco, Avaya, Polycom, Juniper, Check Point, F5, Palo Alto and Symantec.

With effect from 1 September 2017, Westcon Americas was sold to SYNNEX and the EMEA and Asia-Pacific businesses of Westcon-Comstor (Westcon International) continue under Datatec ownership with a 10% interest held by SYNNEX.

US$ millions

Combined

H1 FY18

Continuing

(Westcon

International)

H1 FY18

Disposal

group

(Westcon

Americas)

H1 FY18

Combined

H1 FY17

Continuing

(Westcon

International)

H1 FY17

Disposal

group

(Westcon

Americas)

H1 FY17

Combined

% change

Continuing

% change

Revenue

 

 

 

 

 

 

 

 

North America

 843.0

-

 843.0

 819.1

-

 819.1

2.9

-

Latin America

 287.6

-

 287.6

 220.6

-

 220.6

30.4

-

Europe

 730.5

 730.5

-

 760.5

 760.5

-

 (3.9)

 (3.9)

Asia-Pacific

 241.0

 241.0

-

 257.6

 257.6

-

 (6.5)

 (6.5)

MEA

 176.5

 176.5

-

 198.3

 198.3

-

 (11.0)

 (11.0)

 

 2 278.6

 1 148.0

 1 130.6

 2 256.1

 1 216.4

 1 039.7

1.0

 (5.6)

Gross profit

 

 

 

 

 

 

 

 

North America

 56.3

-

 56.3

 62.4

-

 62.4

 (9.8)

-

Latin America

 39.1

-

 39.1

 35.8

-

 35.8

 9.2

-

Europe

 72.6

 72.6

-

 87.1

 87.1

-

 (16.7)

 (16.7)

Asia-Pacific

 31.2

 31.2

-

 29.6

 29.6

-

 5.4

 5.4

MEA

 17.1

 17.1

-

 21.6

 21.6

-

 (20.8)

 (20.8)

 

 216.3

 120.9

 95.4

 236.5

 138.3

 98.2

(8.6)

 (12.6)

 

Westcon-Comstor's combined revenues increased by 1% to US$2.3 billion (H1 FY17: US$2.3 billion) with higher revenue in North America and Latin America offset by lower revenues in Europe, MEA and Asia-Pacific.

There was a decline in the financial performance of the EMEA region. Continued business transformation challenges in EMEA led to a drop in revenues of US$51.8 million in H1 FY18 compared to H1 FY17. The drop in revenue resulted in a reduction in gross profit of US$19.0 million in EMEA, representing the bulk of the drop in gross profit in Westcon-Comstor. Trading conditions in MEA were weak, particularly in South Africa.

Asia-Pacific revenues were US$16.6 million lower due to reduced sales in China; however, gross profit was US$1.6 million better than H1 FY17.

Westcon-Comstor combined revenue by technology category:

 

 

H1 FY18

        H1 FY17

Security

38%

38%

Networking

25%

26%

Unified communications

22%

22%

Data centre and other

15%

14%

 

100%

100%

 

Westcon-Comstor's combined gross margins were 9.5% (H1 FY17: 10.5%) due to unfavourable geographic mix with lower margins in Latin America and MEA.

Combined operating expenses increased to US$197.3 million (H1 FY17: US$193.6 million). The 2% increase is primarily due to higher foreign exchange expense in Latin America and Asia-Pacific.

Restructuring expenses of US$4.3 million (H1 FY17: US$7.0 million) were incurred, mainly in North America, Asia-Pacific and Global Support related to BPO transformation. In addition US$1.4 million of expenditure was incurred in relation to the recently completed transaction with SYNNEX.

Combined EBITDA was US$19.0 million (H1 FY17: US$42.9 million). Westcon-Comstor's continuing operations (Westcon International) incurred an EBITDA loss of US$12.0 million (H1 FY17: US$1.2 million) and the disposal group (Westcon Americas) recorded EBITDA of US$31.0 million (H1 FY17: US$44.1 million).

Net working capital days decreased to 32 days compared to FY17 (39 days) primarily due to significant improvement in inventory turns in EMEA and Asia-Pacific. The improvement in net working capital days, partially offset by lower cash earnings, US$15.8 million of capital expenditures and the further purchase of US$2 million Angola government bonds resulted in a decrease of US$32.1 million in net debt to US$371.3 million.

Of this net debt, US$207.5 million is in the continuing Westcon International business and US$163.8 million is in the disposal group (Westcon Americas). Of the US$12.4 million incurred in capitalised development expenditure during H1 FY18, the majority is attributable to the SAP ERP system transition, cloud development and digital transformation.

From H2 FY18 Westcon International is being managed by the Datatec management team and the Group will be collapsing the Datatec and Westcon International head office functions to further streamline its operations. Westcon International is well positioned to benefit from its partnership with SYNNEX, continued growth in security and mobile networks, investments in its cloud practice as well as improving conditions in emerging markets.

Logicalis

Logicalis accounted for 23% of the Group's combined revenues (H1 FY17: 25%) and 37% of the Group's continuing revenues (H1 FY17: 37%).

Logicalis is a global IT solutions and managed services provider with expertise in data centre and cloud services, security and network infrastructure, workspace communications and collaboration, data and information strategies, and IT operation modernisation.

Combined revenues were US$693.7 million (H1 FY17: US$757.2 million), including US$0.3 million of revenue from acquisitions made during the period. Revenues from continuing operations (excluding Logicalis' disposal group, SMC) were US$677.6 million (H1 FY17 US$736.1 million). Services revenues were up 7.4% with strong growth in both professional services and annuity revenue. Revenue contribution by geography is shown below:

 

H1 FY18

H1 FY17

North America

26%

31%

Latin America

30%

26%

Europe

32%

32%

Asia-Pacific

12%

11%

 

100%

100%

 

 

Revenue increases in Latin America were offset by decreases in Europe, North America and Asia-Pacific.

In Europe, the UK results have improved as the restructuring of the UK operation continued and it benefited from a large supplier credit. Latin America showed improvement notably in Argentina. North America was adversely impacted by weak trading conditions and product sales in the first half.

Revenues from product were down 16.5%, with decreases in Cisco, HPE and IBM.

Logicalis' combined gross margins were 25.2% (H1 FY17: 23.2%), benefiting from the improved services mix. Gross margins from continuing operations were 25.3% (H1 FY17: 23.3%).

Combined gross profit was down 0.4% to US$174.7 million (H1 FY17: US$175.4 million). Gross profit from continuing operations was US$171.4 million (H1 FY17: US$171.8 million).

Logicalis' combined gross profit contribution by geography is shown below:

 

 

H1 FY18

H1 FY17

North America

28%

36%

Latin America

28%

25%

Europe

31%

27%

Asia-Pacific

13%

12%

 

100%

100%

 

Combined EBITDA was US$28.8 million (H1 FY17: US$33.0 million), with a corresponding EBITDA margin of 4.2% (H1 FY17: 4.4%). Combined operating profit was US$16.5 million (H1 FY17: US$20.3 million). Operating profit from continuing operations was US$16.0 million (H1 FY17: US$20.0 million).

Logicalis incurred US$2.4 million expenditure in H1 FY18 restructuring its UK and US operations. Combined EBITDA before restructuring charges was US$31.2 million with a combined EBITDA margin of 4.5% and operating profit before these restructuring charges was US$18.9 million.

At 31 August 2017, Logicalis has a net overdraft of US$1.9 million (H1 FY17: US$11.3 million net cash). The reduction in net cash was caused primarily by significant prepaid expenses in Latin America. The sale of the SMC business in October 2017 brought US$42 million of cash into the business in H2 FY18.

Logicalis continues to have a contingent liability in respect of a possible tax liability at its PromonLogicalis subsidiary in Brazil.

In July 2017, Logicalis acquired 51% of the share capital in NubeliU, a South American company specialising in cloud computing projects based on OpenStack. The 51% interest in NubeliU was acquired for a cash consideration of US$3.8 million. NubeliU's expertise in OpenStack will accelerate the global expansion of Logicalis' cloud computing and SDx (Software Defined everything) practices, strengthening its position as a cloud integrator and ensuring its ability to meet its customers' requirements on their journey to digital transformation.

In September 2017, Logicalis won a significant long-term project with a large service provider covering multiple territories within Latin America which will contribute significantly to the business in H2 FY18 and beyond.

Digital innovation is accelerating; business technology is undergoing a major shift. Logicalis is transitioning itself into a Digital Enabler for its customers, driven by the explosion of data, the rise of mobile and the cloud and many opportunities exist to tap into themes such as security to augment its strong networking heritage.

Logicalis is also investing in areas such as business intelligence and data analytics to grow its data centre infrastructure offerings for customers. Cloud continues to be a key feature in the business and IT strategies of customers and Logicalis is well positioned to support customers regardless of their cloud strategy.

Logicalis remains confident about the prospects for the industry and its positioning and expects a solid H2 FY18.

Corporate, Consulting and Financial Services

This segment accounted for 1% of Group's combined and continuing revenues (H1 FY17: 1%).

The Consulting unit comprised: Analysys Mason, a provider of strategic, trusted advisory, modelling and market intelligence services to the telecoms, media and technology industries; and Mason Advisory, an independent and impartial IT consultancy providing related strategic, technical and operational advice to the public and private sectors. Datatec's shareholding in Mason Advisory reduced to 42.5% at the end of H1 FY17 and accordingly it has been equity-accounted from that date.

Consulting revenues were US$18.5 million (H1 FY17: US$22.3 million) and EBITDA was US$0.9 million (H1 FY17: US$1.1 million). The H1 FY17 Consulting revenues and EBITDA include Mason Advisory but in H1 FY18 the Group's share of Mason Advisory's profit is included in "share of equity-accounted investment earnings". Both Analysys Mason and Mason Advisory achieved improved results for H1 FY18 compared to H1 FY17.

In June 2017, Analysys Mason acquired Nexia Management Consulting AS, a telecoms management consultancy based in Norway which will enhance Analysys Mason's existing track record in the Nordics, where telecoms, media and technology ("TMT") markets are among the most advanced in the world.

Datatec Financial Services is in a development phase of its business providing financing/leasing solutions for ICT customers. The business recorded revenues of US$0.7 million in H1 FY18 (H1 FY17: US$1.2 million) and an EBITDA loss of US$0.8 million (H1 FY17: US$0.3 million).

Corporate includes the net operating costs of the Datatec head office entities which were US$8.6 million (H1 FY17: US$6.0 million). These costs include the remuneration of the Board and head office staff, consulting and audit fees. In H1 FY18, foreign exchange gains were negligible (H1 FY17: US$1.7 million foreign exchange loss). The net operating costs included SYNNEX transaction related expenses of US$2.0 million in H1 FY18.

 

SUBSEQUENT EVENTS

 

On 1 September 2017, the sale of Datatec's Westcon Americas and 10% of the remaining part of Westcon-Comstor (Westcon International) to SYNNEX Corporation completed.

On 13 October 2017, Logicalis sold its SMC operation in the Netherlands for US$42 million in cash. Logicalis had acquired SMC on 4 March 2013 as one of the four European operations purchased from 2e2 for US$31 million. The purchase price attributed to SMC was US$5 million.

The profit on sale and associated adjustments from the two disposals noted above will be accounted for in the second half of FY18.

On 4 September 2017, Logicalis completed the acquisition, with its Indonesian partner Metrodata, of a majority stake in Packet Systems Indonesia ("PSI"), a leading ICT systems integrator and service company. PSI will be integrated with Logicalis Metrodata Indonesia ("LMI"), the existing Indonesian operation of Logicalis.

 

REPORTING

 

This interim financial report was prepared in accordance with the framework concepts and the recognition and measurement criteria of IFRS and its interpretations adopted by the International Accounting Standards Boards ("IASB") in issue and effective for the group at 1 March 2017 and the SAICA Financial Reporting Guides, as issued by the Accounting Practices Committees and Financial Reporting pronouncements as issued by the Financial Reporting Standards Council. This interim report was prepared using the information as required by IAS 34 - Interim Financial Reporting, and complies with the Listings Requirements of the JSE Limited, the AIM Rules for Companies, and the requirements of the Companies Act, No 71 of 2008, of South Africa. This report was compiled under the supervision of Ivan Dittrich CA(SA) (Chief Financial Officer).

The accounting policies and methods of computation applied in the preparation of these interim financial statements are in terms of IFRS and are consistent with those accounting policies applied in the preparation of the previous consolidated annual financial statements. The adoption of certain amendments to existing standards did not have an impact on the accounting policies of the Group.

DISCLAIMER

 

This announcement may contain statements regarding the future financial performance of the Group which may be considered to be forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty, and although the Group has taken reasonable care to ensure the accuracy of the information presented, no assurance can be given that such expectations will prove to have been correct.

The Group has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements and there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. It is important to note, that:

(i) unless otherwise indicated, forward-looking statements indicate the Group's expectations and have not been reviewed or reported on by the Group's external auditors;

(ii) actual results may differ materially from the Group's expectations if known and unknown risks or uncertainties affect its business, or if estimates or assumptions prove inaccurate;

(iii)       the Group cannot guarantee that any forward-looking statement will materialise and, accordingly, readers are cautioned not to place undue reliance on these forward-looking statements; and

(iv)       the Group disclaims any intention and assumes no obligation to update or revise any forward-looking statement even if new information becomes available, as a result of future events or for any other reason, other than as required by the JSE Limited Listings Requirements and/or the AIM Rules.

On behalf of the Board

SJ Davidson

Chairman

JP Montanana

Chief Executive Officer

IP Dittrich

Chief Financial Officer

13 November 2017

 

DIRECTORS

SJ Davidson°• (Chairman), JP Montanana• (CEO), IP Dittrich (CFO), O Ighodaro°‡, JF McCartney°†, MJN Njeke°, CS Seabrooke°, NJ Temple°•

°Non-executive  •British †American ‡Nigerian

*          Excluding impairments of goodwill and intangible assets, profit or loss on sale of investments and assets, amortisation of acquired intangible assets, unrealised foreign exchange movements, acquisition-related adjustments, fair value movements on acquisition-related financial instruments, restructuring costs relating to fundamental reorganisations, SYNNEX deal-related expenses and the taxation effect on all of the aforementioned.

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months to 31 August 2017

US$'000

Unaudited

Six months

to 31 August

2017

Unaudited

Re-presented+

Six months

to 31 August

2016

Audited

Re-presented+

Year ended

28 February

2017

Revenue

1 844 823

1 976 119

3 861 991

Continued operations

1 843 819

1 975 214

3 859 775

Revenue from acquisitions

1 004

905

2 216

Cost of sales

(1 545 460)

(1 658 125)

(3 239 701)

Gross profit

299 363

317 994

622 290

Operating costs

(284 602)

(284 397)

(579 177)

Restructuring costs

(4 885)

(7 236)

(13 072)

Share-based payments

(2 174)

(1 925)

(1 000)

Operating profit before interest, tax, depreciation and amortisation ("EBITDA")

7 702

24 436

29 041

Depreciation

(13 648)

(13 356)

(27 440)

Amortisation of capitalised development expenditure

(7 209)

(5 914)

(13 461)

Amortisation of acquired intangible assets and software

(5 828)

(5 887)

(11 429)

Operating loss

(18 983)

(721)

(23 289)

Interest income

1 705

1 554

2 912

Finance costs

(11 625)

(6 883)

(16 729)

Share of equity-accounted investment earnings/(losses)

231

250

(793)

Acquisition-related fair value adjustments

66

3 563

5 565

Fair value movements on put option liabilities

**

-

658

Fair value adjustment on deferred and/or contingent purchase consideration

66

3 563

4 907

Other income

115

142

230

Profit on disposal of associate/loss of control of subsidiary

-

-

319

Loss before taxation

(28 491)

(2 095)

(31 785)

Taxation

(860)

697

(21 242)

Loss for the period from continuing operations

(29 351)

(1 398)

(53 027)

Profit for the period from discontinued operations

18 162

24 069

63 776

(Loss)/profit for the period

(11 189)

22 671

10 749

**Less than US$1 000.

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

for the six months to 31 August 2017

US$'000

Unaudited

Six months

to 31 August

2017

Unaudited

Re-presented+

Six months

to 31 August

2016

Audited

Re-presented+

Year ended

28 February

2017

Other comprehensive (loss)/income

 

 

 

Items that may be reclassified subsequently to profit and loss

 

 

 

Exchange differences arising on translation to presentation currency

8 498

47 527

56 947

Translation of equity loans net of tax effect

149

(7 661)

(9 994)

Transfers and other items

2 244

287

622

Total comprehensive (loss)/income for the period

(298)

62 824

58 324

(Loss)/profit attributable to:

 

 

 

Owners of the parent

(12 363)

19 145

3 038

Non-controlling interests

1 174

3 526

7 711

 

(11 189)

22 671

10 749

Total comprehensive (loss)/income attributable to:

 

 

 

Owners of the parent

(296)

53 946

44 732

Non-controlling interests

(2)

8 878

13 592

 

(298)

62 824

58 324

+ The prior years have been re-presented to show comparative results from continuing and discontinued operations in accordance with IFRS 5.

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 August 2017

US$'000

Unaudited

Six months

to 31 August

2017

Unaudited

Six months

to 31 August

2016

Audited

Year ended

28 February

2017

ASSETS

 

 

 

Non-current assets

671 821

784 039

786 361

Property, plant and equipment

 59 425

 77 048

 73 742

Goodwill

403 530

463 324

461 651

Capitalised development expenditure

84 596

76 612

80 843

Acquired intangible assets and software

41 060

54 181

48 620

Investments

27 266

23 842

24 887

Deferred tax assets

40 624

55 602

67 644

Finance lease receivables

6 819

6 780

8 885

Other receivables

8 501

26 650

20 089

Current assets

2 966 452

2 641 694

2 698 539

Inventories

256 431

420 923

438 503

Trade receivables

1 049 965

1 592 494

1 548 003

Current tax assets

7 401

19 935

17 849

Prepaid expenses and other receivables

320 906

286 884

340 696

Finance lease receivables

2 679

5 581

7 854

Cash resources

233 504

315 877

345 634

Assets classified as held for sale

1 095 566

-

-

 

 

 

 

Total assets

3 638 273

3 425 733

3 484 900

EQUITY AND LIABILITIES

 

 

 

Equity attributable to equity holders of the parent

855 412

870 366

854 986

152 396

 134 215

151 947

66 105

 77 013

63 299

(132 030)

(148 277)

(141 816)

3 440

 2 480

2 681

765 501

 804 935

778 875

Non-controlling interests

52 097

47 932

51 889

Total equity

907 509

918 298

906 875

Non-current liabilities

119 430

116 479

127 056

Long-term liabilities

56 136

27 116

31 902

Liability for share-based payments

3 075

5 326

2 080

Amounts owing to vendors

190

2 798

580

Deferred tax liabilities

40 429

71 970

78 959

Provisions

8 413

8 756

8 376

Other liabilities

11 187

513

5 159

Current liabilities

2 611 334

2 390 956

2 450 969

Trade and other payables

1 218 685

1 831 899

1 720 391

Short-term interest-bearing liabilities

58 944

59 079

64 787

Provisions

5 265

6 488

8 634

Amounts owing to vendors

1 343

4 353

512

Current tax liabilities

2 378

7 736

11 159

Bank overdrafts

391 813

481 401

645 486

Liabilities directly associated with assets classified as held for sale

932 906

-

-

 

 

 

 

Total equity and liabilities

3 638 273

3 425 733

3 484 900

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

for the six months to 31 August 2017

US$'000

Unaudited

Six months

to 31 August

2017

Unaudited

Six months

to 31 August

2016

Audited

Year ended

28 February

2017

Operating profit before working capital changes

42 255

69 989

134 535

Working capital changes

(11 754)

(41 131)

(184 576)

3 465

581

(11 995)

(125 052)

(78 285)

(83 753)

109 833

36 573

(88 828)

Other working capital changes

(1 217)

(4 673)

12 720

Cash generated from/(utilised in) operations

29 284

24 185

(37 321)

Net finance costs paid

(13 125)

(9 638)

(25 264)

Taxation paid

(14 861)

(21 262)

(43 299)

Net cash inflow/(outflow) from operating activities

1 298

(6 715)

(105 884)

Cash outflow for acquisitions

(5 262)

(1 854)

(1 854)

Increase in investments

(2 118)

-

(9 201)

Additions to property, plant and equipment

(13 149)

(39 426)

(30 796)

Proceeds on disposal of investments

-

-

533

Increase in capitalised development expenditure

(12 433)

-

(29 091)

Additions to software

-

-

(1 566)

Proceeds on disposal of property, plant and equipment

89

-

2 302

Net cash outflow from investing activities

(32 873)

(41 280)

(69 673)

Dividends paid to shareholders

-

(14 680)

(20 949)

Amounts paid to vendors

(210)

-

(3 429)

Inflow of long-term liabilities

27 321

18 694

20 851

Net cash inflow/(outflow) from financing activities

27 111

4 014

(3 527)

Net decrease in cash and cash equivalents

(4 464)

(43 981)

(179 084)

Cash and cash equivalents at the beginning of the year

(299 852)

(132 685)

(132 685)

Translation differences on cash and cash equivalents

(259)

11 142

11 917

Cash and cash equivalents at the end of the period# - combined

(304 575)

(165 524)

(299 852)

Cash flows from discontinued operations

 

Re-presented+

Re-presented+

Net cash (outflow)/inflow from operating activities

(49 747)

5 076

(18 654)

Net cash outflow from investing activities

(2 700)

(2 824)

(1 472)

Net cash inflow/(outflow) from financing activities

8 240

(10 535)

(35)

Net decrease in cash and cash equivalents

(44 207)

(8 283)

(20 161)

Opening cash

(101 122)

 

 

Translation differences

(937)

 

 

Net decrease in cash and cash equivalents

(44 207)

 

 

Cash and cash equivalents at the end of the period# - discontinued operations

(146 266)

 

 

Cash and cash equivalents at the end of the period# - continuing operations

(158 309)

 

 

#Comprises cash resources, net of bank overdrafts.

+The prior years have been re-presented to show comparative results from discontinued operations in accordance with IFRS 5.

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY

for the six months to 31 August 2017

US$'000

Unaudited

Six months

to 31 August

2017

Unaudited

Six months

to 31 August

2016

Audited

Year ended

28 February

2017

Balance at the beginning of the period

906 875

869 420

869 420

Transactions with equity holders of the parent

 

 

 

(296)

53 946

44 732

-

(14 680)

(20 949)

722

734

837

Transactions with non-controlling interests

 

 

 

(2)

8 878

13 592

210

-

-

-

-

(757)

Balance at the end of the period

907 509

918 298

906 875

 

DETERMINATION OF HEADLINE AND UNDERLYING EARNINGS

for the six months to 31 August 2017

US$'000

Unaudited

Six months

to 31 August

2017

Unaudited

Six months

to 31 August

2016

Audited

Year ended

28 February

2017

(Loss)/profit attributable to the equity holders of the parent

(12 363)

19 145

3 038

Headline earnings adjustments

79

(32)

1 262

-

-

1 600

-

(14)

(319)

131

(28)

(36)

(52)

10

17

 Non-controlling interests

-

-

(7)

Headline (losses)/earnings

(12 284)

19 113

4 293

Continuing operations - Re-presented+

(30 446)

(4 928)

(59 426)

Discontinued operations - Re-presented+

18 162

24 041

63 719

 

 

 

 

DETERMINATION OF UNDERLYING EARNINGS

 

 

 

Underlying earnings adjustments

20 299

8 689

24 677

4 311

(1 092)

1 854

(66)

(3 563)

(5 565)

3 442

-

-

6 713

7 236

16 559

5 899

6 108

11 829

Tax effect

(4 650)

(1 525)

(5 488)

Non-controlling interests

(332)

(155)

(340)

Underlying earnings

3 033

26 122

23 142

Continuing operations - Re-presented+

(18 355)

2 589

(43 896)

Discontinued operations - Re-presented+

21 388

23 533

67 038

 

 

 

 

+The prior years have been re-presented to show comparative results from continuing and discontinued operations in accordance with IFRS 5.

                                                                                                                                          

SALIENT FINANCIAL FEATURES

for the six months to 31 August 2017

US$'000

Unaudited

Six months

to 31 August

2017

Unaudited

Re-presented+

Six months

to 31 August

2016

Audited

Re-presented+

Year ended

28 February

2017

Number of shares issued (millions)

 

 

 

Issued

212

211

212

Weighted average

212

210

211

Diluted weighted average

214

211

212

(Losses)/earnings per share ("EPS") (US cents)

 

 

 

Basic

(5.8)

9.1

1.4

(14.4)

(2.4)

(28.9)

8.6

11.5

30.3

Diluted basic

(5.8)

9.1

1.4

(14.3)

(2.3)

(28.7)

8.5

11.4

30.1

 

 

 

 

Headline (losses)/earnings

(12 284)

19 113

4 293

(30 446)

(4 928)

(59 426)

18 162

24 041

63 719

Headline (losses)/earnings per share (US cents)

 

 

 

(5.8)

9.1

2.0

(14.4)

(2.4)

(28.3)

8.6

11.5

30.3

(5.8)

9.1

2.0

(14.3)

(2.3)

(28.1)

8.5

11.4

30.1

Underlying earnings

3 033

26 122

23 142

(18 355)

2 589

(43 896)

21 388

23 533

67 038

Underlying earnings per share (US cents)

 

 

 

1.4

12.5

11.0

(8.7)

1.3

(20.8)

10.1

11.2

31.8

1.4

12.4

10.9

(8.6)

1.2

(20.7)

10.0

11.2

31.6

Net asset value per share (US cents)

404.3

412.2

403.5

KEY RATIOS

 

 

 

Gross margin (%) - continuing operations

16.2

16.1

16.1

EBITDA (%) - continuing operations

0.4

1.2

0.8

Effective tax rate (%) - continuing operations

(3.0)

33.3

(66.8)

Exchange rates

 

 

 

Average Rand/US$ exchange rate

13.2

14.7

14.2

Closing Rand/US$ exchange rate

13.0

14.5

13.0

+The prior years have been re-presented to show comparative results from continuing and discontinued operations in accordance with IFRS 5.

 

 

CONDENSED SEGMENTAL ANALYSIS

for the six months to 31 August 2017

 

 

Westcon-Comstor

Logicalis

Corporate, Consulting and Financial Services

Total

 

Unaudited

Six months

to 31 August

2017

Unaudited

Re-presented+

Six months

to 31 August

2016

Audited

Re-presented+

Year ended

28 February

2017

Unaudited

Six months

to 31 August

2017

Unaudited

Re-presented+

Six months

to 31 August

2016

Audited

Re-presented+

Year ended

28 February

2017

Unaudited

Six months

to 31 August

2017

Unaudited

Re-presented+

Six months

to 31 August

2016

Audited

Re-presented+

Year ended

28 February

2017

Unaudited

Six months

to 31 August

2017

Unaudited

Re-presented+

Six months

to 31 August

2016

Audited

Re-presented+

Year ended

28 February

2017

Revenue

1 147 968

1 216 414

2 352 752

677 650

736 123

1 468 238

19 205

23 582

41 001

1 844 823

1 976 119

3 861 991

EBITDA

(11 999)

(1 163)

(33 667)

28 186

32 605

76 350

(8 485)

(7 006)

(13 642)

7 702

24 436

29 041

Reconciliation of operating (loss)/profit to (loss)/profit for the period

 

 

 

 

 

 

 

 

 

 

 

 

Operating (loss)/profit

(25 986)

(13 467)

(61 102)

15 968

20 028

52 017

(8 965)

(7 282)

(14 204)

(18 983)

(721)

(23 289)

Interest income

679

542

1 313

839

836

1 273

187

176

326

1 705

1 554

2 912

Finance costs

(6 160)

(4 322)

(9 996)

(5 463)

(2 534)

(6 690)

(2)

(27)

(43)

(11 625)

(6 883)

(16 729)

Share of equity-accounted investment earnings/(losses)

146

250

(933)

-

-

-

85

-

140

231

250

(793)

Fair value movements on put option liabilities

**

-

658

-

-

-

-

-

-

**

-

658

Fair value adjustments on deferred and/or contingent purchase consideration

-

-

-

66

3 563

4 907

-

-

-

66

3 563

4 907

Other income

-

-

-

-

-

-

115

142

230

115

142

230

Profit on disposal of associate/loss of control of subsidiary

-

-

-

-

-

-

-

-

319

-

-

319

(Loss)/profit before taxation

(31 321)

(16 997)

(70 060)

11 410

21 893

51 507

(8 580)

(6 991)

(13 232)

(28 491)

(2 095)

(31 785)

Taxation

1 681

7 680

(2 697)

(3 361)

(6 763)

(16 326)

820

(220)

(2 219)

(860)

697

(21 242)

(Loss)/profit for the period from continuing operations

(29 640)

(9 317)

(72 757)

8 049

15 130

35 181

(7 760)

(7 211)

(15 451)

(29 351)

(1 398)

(53 027)

Profit for the period from discontinued operations

17 930

24 051

62 275

232

18

1 501

-

-

-

18 162

24 069

63 776

(Loss)/profit for the period

(11 710)

14 734

(10 482)

8 281

15 148

36 682

(7 760)

(7 211)

(15 451)

(11 189)

22 671

10 749

Total assets

2 465 006

2 374 333

2 405 604

1 121 801

955 747

986 291

51 466

95 653

93 005

3 638 273

3 425 733

3 484 900

Total liabilities

(1 909 526)

(1 798 264)

(1 861 416)

(812 352)

(664 799)

(685 867)

(8 886)

(44 372)

(30 742)

(2 730 764)

(2 507 435)

(2 578 025)

+The prior years have been re-presented to show comparative results from continuing and discontinued operations in accordance with IFRS 5.

Sales and purchases between Group companies are concluded at arm's length in the ordinary course of business. The inter-group sales of goods and provision of services for the year ended 31 August 2017 amounted to US$19.9 million (H1 FY17: US$25.5 million).

 

 

 

DISCONTINUED OPERATIONS

for the six months to 31 August 2017

 

Westcon

     Americas

disposal

group

Six months

to 31 August

2017

SMC

    disposal

group

Six months

to 31 August

2017

Datatec

  consolidation

adjustments

Six months

to 31 August

2017

  Discontinued

operations

Six months

to 31 August

2017

Westcon

   Americas

disposal

group

 Six months

to 31 August

2016

SMC

disposal

group

Six months

to 31 August

2016

Datatec

  consolidation

adjustments

Six months

 to 31 August

2016

  Discontinued

operations

Six months

to 31 August

2016

Westcon

      Americas

disposal

group

Year ended

28 February

2017

SMC

disposal

group

Year ended

28  February

2017

Datatec

  consolidation

adjustments

Year ended

28 February

2017

  Discontinued

operations

Year ended

28 February

2017

 

Revenue

1 151 849

16 088

(21 251)

1 146 686

1 071 305

21 065

(31 579)

1 060 791

2 234 659

42 061

(55 328)

2 221 392

 

Continued operations

1 130 598

16 088

-

1 146 686

1 039 726

21 065

-

1 060 791

2 179 331

42 061

-

2 221 392

 

Inter-segmental revenue

21 251

-

(21 251)

-

31 579

-

(31 579)

-

55 328

-

(55 328)

-

 

Cost of sales

(1 056 453)

(12 732)

21 251

(1 047 934)

(973 126)

(17 434)

31 579

(958 981)

(2 033 077)

(32 801)

55 328

(2 010 550)

 

Gross profit

95 396

3 356

-

98 752

98 179

3 631

-

101 810

201 582

9 260

-

210 842

 

Operating costs

(62 172)

(2 771)

-

(64 943)

(53 990)

(3 215)

-

(57 205)

(109 462)

(6 601)

-

(116 063)

 

Impairment if property

-

-

-

-

-

-

-

-

(1 600)

-

-

(1 600)

 

Restructuring costs

(1 828)

-

-

(1 828)

-

-

-

 

(3 488)

-

-

(3 488)

 

Share-based payments

(401)

-

-

(401)

(144)

-

-

(144)

139

-

-

139

 

Operating profit before interest, tax, depreciation and amortisation ("EBITDA")

30 995

585

-

31 580

44 045

416

-

44 461

87 171

2 659

-

89 830

 

Management fees - Westcon

(18 109)

-

18 109

-

(14 430)

-

14 430

-

(40 027)

-

40 027

-

 

Datatec Group management fees

(4 441)

-

4 441

-

(3 853)

-

3 853

-

(7 208)

-

7 208

-

 

EBITDA after management fees

8 445

585

22 550

31 580

25 762

416

18 283

44 461

39 936

2 659

47 235

89 830

 

Depreciation

(1 555)

(55)

-

(1 610)

(2 153)

(54)

-

(2 207)

(3 887)

(103)

-

(3 990)

 

Amortisation of capitalised development expenditure

(338)

-

-

(338)

-

-

-

-

(351)

-

-

(351)

 

Amortisation of acquired intangible assets and software

(667)

-

-

(667)

(782)

(75)

-

(857)

(1 507)

(151)

-

(1 658)

 

Operating profit

5 885

530

22 550

28 965

22 827

287

18 283

41 397

34 191

2 405

47 235

83 831

 

Net finance costs

(6 889)

(234)

-

(7 123)

(4 723)

(251)

-

(4 974)

(9 964)

(422)

-

(10 386)

 

(Loss)/profit before taxation

(1 004)

296

22 550

21 842

18 104

36

18 283

36 423

24 227

1 983

47 235

73 445

 

Taxation

(3 616)

(64)

-

(3 680)

(12 336)

(18)

-

(12 354)

(9 187)

(482)

-

(9 669)

 

(Loss)/profit for the period from discontinued operations

(4 620)

232

22 550

18 162

5 768

18

18 283

24 069

15 040

1 501

47 235

63 776

 

The Westcon-Comstor management fees charged are added back as these costs will remain within the Datatec Group as per the Share Purchase agreement. Datatec management fees are eliminated at Datatec Group.

 

 

CAPITAL EXPENDITURE AND COMMITMENTS

as at 31 August 2017

US$'000

Unaudited

Six months

to 31 August

2017

Unaudited

Six months

to 31 August

2016

Audited

Year ended

28 February

2017

Capital expenditure incurred in the current period (including capitalised development expenditure)

 25 584

 32 808

 61 453

Continuing operations

 22 961

 32 808

 61 453

Discontinued operations

 2 623

-

-

Capital commitments at the end of the period - continuing operations

 29 359

 22 586

 36 155

Lease commitments at the end of the period - continuing operations

 126 033

 149 543

 133 202

Payable within one year - continuing operations

 31 429

 35 711

 33 894

Payable after one year - continuing operations

 94 604

 113 832

 99 308

 

 

 

 

 

 

ACQUISITIONS MADE DURING THE PERIOD

as at 31 August 2017

The following table sets out the assessment of the fair value of assets and liabilities acquired in the acquisition made by the Group during the period. The fair value assessments of assets and liabilities acquired and the amounts recognised as goodwill and intangible assets have only been determined provisionally due to the timing of the acquisitions and future amendments may impact classification in these categories.

US$'000

Unaudited

Six months

to 31 August

2017

Assets acquired

 

Non-current assets

98

Current assets

1 394

Non-current liabilities

(273)

Current liabilities

(817)

Net assets acquired

402

Intangible assets

1 777

Goodwill

6 760

Non-controlling interest

(210)

Fair value of acquisition

8 729

Purchase consideration

 

Cash

5 814

Deferred purchase consideration

844

Subsidiary shares issued

2 051

Total consideration

8 709

Cash outflow for acquisitions

 

Cash and cash equivalents acquired

(552)

Cash consideration paid

5 814

Net cash outflow for acquisitions

5 262

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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