TIDMINQO
RNS Number : 5113I
Inqo Investments Limited
20 June 2017
INQO INVESTMENTS LIMITED
AUDITED GROUP RESULTS FOR THE YEARED 28 FEBRUARY 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 group started a process of consolidating its financial
position in 2014 and we are pleased to report that the various
negotiations entered into with lender institutions have been
concluded resulting in a R14m write-back and a stronger balance
sheet with no debt.
The results for the year reflect a profit before tax of
R10,259,510 (2016: Loss of R4,718,271) equating to R0.61 cents per
share. Revenues increased by 59% from R10,650,195 in 2016 to
R17,026,098 in 2017.
The Selling & Administration expenses for the group amounted
to R19,456,853 in 2016/7, the Kuzuko costs amounted to R13,837,149
while those of Inqo amounted to R5,869,837. The Kuzuko costs are
traditional costs incurred by an operating unit in the game lodge
hospitality industry. The material cost contributors for Inqo were
depreciation R2,082,399, listing costs R572,019, directors
emoluments R636,000, audit & professional fees R642,169 and
impairments R629,169.
Investee companies
Kuzuko Lodge (South Africa)
The improved profitability of the group is mainly attributable
to the Kuzuko Lodge operation, Inqo's main trading subsidiary which
earned a profit before tax for the year of R783,706 (2016: Loss of
R950,638).
The profit turnaround has come about from the business being
able to achieve both improved occupancies and improved average room
rates. As Kuzuko enters its ninth season of trading we expect this
profit turnaround achieved in 2016/7 to continue into the
future.
Conservation costs remain high as Kuzuko continues to
rehabilitate the game reserve as well as the gradual introduction
of more animals.
Spekboom Trading (South Africa)
The contract entered into with the Department of Environmental
Affairs (DEA) to fund the planting of Spekboom on the Kuzuko Game
Reserve to achieve reforestation of the Reserve and to create jobs
in the local community has come to an end. During the term of the
contract some 500 acres of degraded land were replanted with
Spekboom and in the process 100 job opportunities were created.
We are currently investigating other opportunities to continue
the reforestation program.
Bee Sweet Honey (Zambia)
We concluded negotiations in the first quarter with Bee Sweet
Honey Limited a Zambian commercial producer of honey. The number of
beehives placed by the company increased by 50% taking the total to
90,000 beehives with 13,000 farmers in its programme. Output for
2016 was around 220 tons of honey for export. Inqo invested an
initial tranche of US$60,000 in this venture to allow Bee Sweet to
acquire and supply an additional 3,000 hives and recruit 500 new
farmers to the honey production programme. The bee hives are
harvested twice a year and Inqo expects to earn its first revenues
in the next financial year.
Four One Financial Services Limited (Uganda)
In April 2017, we 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 savings schemes. The Uganda
government has licensed Mazima to provide a voluntary savings
scheme for such low income earners. Mazima is supervised by a group
of 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 the improved trading from the
Kuzuko Lodge operation and the first revenues from each of the Bee
Sweet Honey and Four One Financial Services Investment.
The improved room rates that have been achieved and the
increased occupancies experienced at Kuzuko Lodge in the latter
part of the 2016/7 year and the first quarter of 2017/8 are
expected to continue on the back of the fact that the Rand remains
weak against other currencies making South Africa an attractive
destination of travel.
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.
-- 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.
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 audited group financial
statements for the year ended 28 February 2017. A copy of these
audited financial statements will be available on the company
website by 21 June 2017.
DIVID
The company has not declared a dividend for the year ended 28
February 2017.
K.S Tan C.J Bertie
Chairman Chief Financial Officer
19 June 2017
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
Statements of profit or loss and other comprehensive income
for the year ended 28 February 2017
Audited Audited
28 Feb 29 Feb
17 16
R'000 R'000
Revenue 17 026 10 651
Cost of Sales (2 390) (1 650)
Gross profit 14 636 9 001
Other income 14 042 867
Selling and administrative
expenses (19 457) (14 796)
--------- ----------
Operating profit/(loss) 9 221 (4 928)
Fair value adjustment 502 268
Net financing
income/(costs) 536 (58)
--------- ----------
Finance income 581 997
Finance expense (45) (1 055)
--------- ----------
Profit/(loss)
before taxation 10 259 (4 718)
Taxation (2 868) 259
--------- ----------
Profit/(loss)
for the year 7 391 (4 459)
--------- ----------
Profit/(loss)
attributable
to:
Equity holders 7 085 (4 326)
Non-controlling
interest 306 (133)
--------- ----------
7 391 (4 459)
--------- ----------
Other comprehensive
income
10 575 (2 896)
--------- ----------
Revaluation 13 627 -
of land
Deferred tax
on revaluation (3 052) (2 896)
--------- ----------
Total comprehensive
income/(loss)
for the year 17 966 (7 355)
========= ==========
Total comprehensive
income attributable
to:
Equity holders 17 660 (7 222)
Non-controlling
interest 306 (133)
--------- ----------
17 966 (7 355)
========= ==========
Earnings/(loss)
per share (cents) 0.61 (0.53)
Diluted earnings/(loss)
per share (cents) 0.58 (0.50)
Statements of financial position
for the year ended 28 February 2017
Audited Audited
28 Feb 29 Feb
17 16
R'000 R'000
Assets
Non-current
assets 132 870 119 110
---------- ----------
Property, plant
and equipment 131 898 119 082
Intangible assets 18 28
Loans to subsidiaries - -
Other investments 954 -
Investments - -
in subsidiaries
---------- ----------
Current assets 10 655 31 803
---------- ----------
Inventories 486 389
Trade and other
receivables 3 115 4 806
Biological assets 3 512 2 950
Cash and cash
equivalents 3 542 23 658
---------- ----------
Total assets 143 525 150 913
---------- ----------
Equity and liabilities
Capital and
reserves
Ordinary share
capital 58 198 58 198
Share premium 58 228 58 228
Revaluation
reserve 70 774 60 200
Accumulated
loss (58 786) (65 871)
---------- ----------
Equity attributable
to equity holders
of Inqo Investments
Limited 128 414 110 755
Non-controlling
interest 173 (133)
---------- ----------
Total equity 128 587 110 622
Non-current
liabilities 9 753 17 759
---------- ----------
Loans from related
parties 436 414
Other long term
loans 566 538
External loans
and borrowings - 13 977
Deferred tax
liability 8 558 2 637
Debentures 193 193
---------- ----------
Current liabilities 5 185 22 532
---------- ----------
Trade and other
payables 4 933 6 277
Provision 252 252
External loans
and borrowings
- current portion - 16 003
---------- ----------
Total liabilities 14 938 40 291
---------- ----------
Total equity
and liabilities 143 525 150 913
---------- ----------
Statements of changes in equity
for the year ended 28 February 2017
Share capital Share premium Revaluation Accumulated Non-controlling Total
reserve loss interest
R'000 R'000 R'000 R'000 R'000 R'000
Balance at 28
February
2016 58 198 58 228 60 200 (65 871) (133) 110 622
Profit for the
year - - 10 574 7 085 306 17 965
Balance at 28
February
2017 58 198 58 228 70 774 (58 786) 173 128 587
============== ============== ============ ============ ================ ==================
Restated balance
at
28 February 2015 28 813 13 266 63 096 (61 545) - 43 630
Share issue 29 385 44 962 - - - 74 347
Loss for the year - - (2 896) (4 326) (133) (7 355)
58 198 58 227 60 199 (65 871 110 621
075 703 652 034) (132 561) 835
-------------- -------------- ------------ ------------ ---------------- ------------------
Restated balance
at
29 February 2016 58 198 58 228 60 200 (65 871) (133) 110 622
============== ============== ============ ============ ================ ==================
Statements of cash flows
for the year ended 28 February 2017
Audited Audited
28 Feb 29 Feb
17 16
R'000 R'000
Cash utilised by operations (986) (4 004)
Net cash outflow from
operating activities (986) (4 004)
--------- --------
Cash flows from investing
activities
Increase in loans to
subsidiary - -
Acquisition of other (954) -
investments
Acquisition of property,
plant and equipment
and intangible assets (2 288) (1 757)
Disposal of property, 66 -
plant and equipment
Net cash outflow from
investing activities (3 176) (1 757)
--------- --------
Cash flows from financing
activities
Loans and borrowings
(repaid)/ received (15 976) 94
Shares issued to new
shareholder for cash - 12 500
Loans from related
parties received 22 -
--------- --------
Net cash (outflow)/inflow
from financing activities (15 954) 12 594
--------- --------
Net movement in cash
and cash equivalents (20 116) 6 833
Cash and cash equivalents
at beginning of year 23 658 16 825
Cash and cash equivalents
at end of year 3 542 23 658
========= ========
This information is provided by RNS
The company news service from the London Stock Exchange
END
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