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Inqo Investments Ltd - Unaudited results for period ended 31 August 2023

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Inqo Investments Limited · INQO

29/11/2023 07:00

Inqo Investments Ltd - Unaudited results for period ended 31 August 2023
RNS Number : 9581U
Inqo Investments Limited
29 November 2023

Inqo Investments Limited


Unaudited Group Results for the period ended 31 August 2023




Inqo Investments Limited ("Inqo" or "the Group") is a South African based social impact company that invests in businesses that tackle poverty and environmental challenges in Sub-Saharan Africa.




The Group remains in a strong financial position with total assets of R285,367,338 and minimal debt.


The funds that the Company received from Belmont University in the latter part of the 2022/3 financial year and the new shareholder funds received in the early part of the current 2023/4 financial year will be used to develop Inqo's Conservation and Rural Enterprise (CARE) project that will invest in businesses that tackle social and environmental issues in and around the Budongo Forest in Uganda. The first investment of the CARE project is an eco-lodge that will help create jobs, generate value from conservation for local communities and fund reforestation in the local area. Plans for the lodge have been approved and construction will begin in the third quarter of 2023.


Like businesses around the world, the Group has been heavily impacted by the Covid-19 pandemic with reduced earnings and implementation of cost saving measures. The severity of the impact and corresponding speed of recovery has varied across investee companies. Despite the challenges being faced, the directors of the Company have assessed the Company and its subsidiaries and agree that the operating units will continue as a going concern.


The results for the period under review showed revenue of R7,366,899 (August 2022: R3,389,258) with a profit after tax of R57,444,000 (August 2022: loss of R4,327,761). The primary reason for the profit before tax position is due to the grant income recognised between 1 September 2022 and 31 August 2023 for the cost of planting Spekboom cuttings on the property through the Reforest Action carbon credit contract.


The profit for the period is reported after accounting for the following income and cost items:

August 2023

August 2022

Income earned:

Included in other income is donation received for the cost of planting Spekboom cuttings on the property in terms of the Reforest Action carbon credit contract. The value of the donations received between 1 September 2022 and 28 February 2023 amounted to R9,090,000

Operating costs incurred:

Depreciation & amortisation

Listing expenses

Directors' fees and salaries

Professional fees

Impairment & fair value adjustments

Provision for bad & doubtful debts




61 513 070



1 605 019

372 904

486 168

306 600

24 822

160 321







1 730 282

428 462

490 403

315 678

57 142

137 275


In August 2023, the directors of Inqo reviewed the valuation placed on all income earning assets to ensure that they reflect their fair value.  Following the reviews, the directors are of the view that Group assets as stated in the Balance Sheet are reflected at fair value.  In the process of carrying out this review it was decided that the following value adjustments should be processed.


·      The Kuzuko Lodge operation, whilst steadily improving, has not yet returned to pre Covid-19 occupancies and still operates at a loss. Inqo has provided for impairment of Kuzuko receivables to the value of R2,750,937 against the total amount due of R4,076,944.  

·      There have been major operational changes at Kuzuko Lodge in that the group has decided, effective 31 October 2023, to part ways with the management company, Legacy Hospitality Management Services (Pty) Ltd.  This parting of ways has been entered into in a very fair, balanced and equitable manner.

·      Mr J. Tan was appointed CEO of Kuzuko Lodge in July 2023 and he is now working with his fellow directors to put in place a new and effective management structure.  The building of the new management unit is operating smoothly and on track to be fully operational before the summer season begins in November 2023.

·      The game on the property has not seen any major change in numbers on the land or in value and therefore there are no material changes in the game valuation at 31 August 2023.

·      The only non-South African company where Inqo held investments on 28th February 2023 that required assessment from a fair value adjustment perspective was Four One Financial Services Limited. The company has struggled financially but managed to remain operational, however in the process has defaulted on loan and interest repayments.  The consequences of this are that the full loans made by Inqo with a value of R753,537 have been impaired and a provision for doubtful debts have been raised against interest owing of R1,217,613.


The land and buildings are in terms of Inqo's accounting policies to be revalued every two years by an independent valuer.  The valuation was done in March 2023 as required.  The fact that the Eastern Cape has recovered from the drought experienced in previous years and that there have been sales of farmland in neighbouring areas resulted in the land and buildings having increased in value by R19,099,881.




·       Kuzuko Lodge (Pty) Ltd (South Africa) is a subsidiary entity that operates a Five Star game lodge designed to create jobs in an area of high unemployment and limited opportunities. The Lodge is slowly returning to pre-pandemic occupancy rates, however the tourism industry in the Eastern Cape Province has been slower to recover than in other parts of South Africa. Kuzuko management are now exploring several new avenues for marketing the lodge, in particular around the current global focus on sustainability, and expect that bookings will increase in strength over the next 12 months.


·      Inqo Africa (Pty) Ltd (South Africa), is a wholly owned subsidiary formed on 27 October 2020 to facilitate with the acquisition of investments in Kenya and Uganda. The group investment in Sanergy Incorporated is held by Inqo Africa (Pty) Ltd.


·      Spekboom Trading (Pty) Ltd (South Africa) is a subsidiary, which is currently rehabilitating degraded land on the Inqo Investments Limited property through reforestation using the indigenous Spekboom shrub. Spekboom Trading entered into a 30-year contract with an international carbon finance specialist, Reforest Action based in Paris, France, to restore 5,185 hectares of land on Inqo's property through planting of 25 million indigenous Spekboom trees. The project is progressing well with planting anticipated to be complete by December 2024.


·      Four One Financial Services Limited (Uganda) is a financial services company offering specially designed products for the underserved low-income demographic in Uganda. Four One was particularly hard hit by the pandemic with its loan portfolio highly impaired resulting in a pivot towards property development. We are pessimistic about the outlook of the company due to the damage to their loan portfolio. We have provided for a full impairment of the loans payable but have not impaired the conversion loan note between the Company and Four One Financial Services.


·      Kentegra (Kenya) is a Kenyan based biotechnology firm owned by the US holding company, Kentegra Biotechnology Holdings LLC, producing pyrethrum, a natural biocide and pesticide. The company has seen significant growth over the last 12 months and has continued to refine their factory processes. We are hopeful that the business will soon achieve a positive EBITDA.


·      South Lake Medical Centre - SLMC (Kenya) is a private healthcare provider in the Naivasha region of Kenya serving predominantly low-income flower farm workers. Since investment SLMC has progressed well developing a major and minor surgical unit and a positive EBITDA. The outlook for SLMC is positive as we expect the surgical revenue to continue to grow.


·      Sanergy Incorporated (Kenya) is a circular economy organic recycling business producing high protein animal feed from black soldier fly larvae in Nairobi, Kenya. Sanergy has continued to grow their business, refining their processes and exploring new markets for their animal feed and fertilizer. The outlook for Sanergy is positive.




The company is listed on the Aquis Exchange PLC (AIM:AQX) in London. Shares on AQSE will remain exempt from Capital Gains Tax and Inheritance Tax as they were on the NEX Exchange.




·      35,617 acres (14,414 hectares) 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 by Kuzuko year on year.

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

·      Conservation of 3 endangered species.

·      Kuzuko has re-wilded 14 adult cheetah and produced 10 cubs with diverse genetics to bolster the meta-population in southern Africa. Currently there are 4 orphaned cheetah cubs on the property being re-wilded.

·      Reforestation of 500 acres (200 hectares) of degraded land with Spekboom plants providing work for 100 part-time staff and sequestering carbon in prior financial periods.

·      37 acres (15 hectares) of land between the reception area of the Lodge and the Lodge area has been replanted with various forms of vegetation to recover heavily degraded land on the property.  As part of this erosion recovery process 100,000 Spekboom cuttings have been planted.

·      2,100+ voluntary low-income savers in micro-pension and loan schemes.

·      63,423 patient visits in the first 9 months of 2023 including 386 HIV patients receiving care and counselling, 5,599 people receiving health education including through community outreach and 149 surgeries in the new surgical unit which is the only surgical facility at the southern end of Lake Naivasha, Kenya.

·      4,000 toilets serving 125,000 people daily in Nairobi.

·      The reforestation contract planting program, in terms of the contract signed on 5 August 2022, is in progress.  5,701 acres (2,307 hectares) of land have been planted with Spekboom cuttings by 31 August 2023.  The project currently employs between 200 and 250 local previously unemployed individuals in the planting process.




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 during this challenging time.



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 period ended 31 August 2023.




The company has not declared a dividend the period ended 31 August 2023.


K.S Tan                                                                                              C.J Bertie

Chairman                                                                                       Chief Financial Officer


Issued on: 29 November 2023




Inqo Investments Limited

Tel: +44 7768 613346

Dr Kim Tan, Chairman


Hobart Capital Markets LLP

AQSE Corporate Adviser and Broker

Tel: +44 (0)20 7070 5665

Dr Wang Chong


Condensed consolidated statement of profit or loss and other comprehensive income

for the six months ended 31 August 2023

Six Months ended

31 August 2023

Six Months ended

31 August 2022






7 366 899

3 389 258

Cost of Sales

(1 049 896)

(481 850)

Gross profit

6 317 003

2 907 408

Other income

61 793 066

761 454


Personnel expenses

(2 854 379)

(1 962 577)


Directors' emoluments

(486 169)

(490 403)


Depreciation & amortisation

(1 605 019)

(1 730 282)


Listing expenses

(372 904)

(428 462)


Professional fees

(306 600)

(315 678)


Provision for doubtful debts

(160 321)

(137 275)


Impairment and fair value adjustment

(24 822)

(57 142)


Selling and administrative expenses

(6 511 330)

(3 826 319)


Operating profit/(loss)

55 788 525


(5 279 276)

Inventory write-up (down)




8 000




Fair value adjustment




296 460




Net financing income                                       




1 132 991


102 949


Finance income

1 218 522


184 255

Finance costs

(85 531)


(81 306)



Profit/(Loss) before taxation

57 225 976


(5 176 327)

Taxation credit

218 024


848 566

Loss for the period

57 444 000


(4 327 761)

Loss attributable to:



Equity holders

57 565 554


(4 216 047)

Non-controlling interest

(121 554)


(111 714)




57 444 000


(4 327 761)


Other comprehensive income:



Other comprehensive income



Total comprehensive income for the period

57 444 000


(4 327 761)


Condensed consolidated statement of financial position

as at 31 August 2023



31 August 2023


28 February 2023






Non-current assets

223 643 437

163 310 393

Property, plant and equipment

214 355 118

154 054 726

Intangible assets

1 340

1 840

Right of use asset

152 975

236 171

  Other investments

9 134 004

9 017 656



Current assets

61 723 901

46 946 317


5 055 693

4 862 236

Trade and other receivables

3 858 133

3 124 989

Biological assets

3 085 440

2 788 980

Cash and cash equivalents

49 724 635

36 170 112


Total current assets

61 723 901

          46 946 317


Total assets


285 367 338

       210 256 710


  Equity and liabilities

Capital and reserves

Ordinary share capital

72 584 925

72 584 925

Share premium

87 585 270

87 585 270

Revaluation reserve

86 693 347

86 693 347

Accumulated loss

(32 536 242)

(90 101 796)

Equity attributable to equity holders of:

  Inqo Investments Limited

Non-controlling interest

214 327 290


38 665



156 761 746


160 218

Total equity

214 365 965

156 921 964




Non-current liabilities

9 196 420

9 403 433

Loans from related parties

3 803 662

4 511 589

Deferred taxation

795 796


4 815 985


Lease liability

4 596 961

76 859



Current liabilities

61 804 953

43 931 313

Bank overdraft

532 409

146 855

Trade and other payables

8 064 296

8 503 452

Unutilised grant funding

52 994 005

35 066 926

Lease liability

217 243

214 080

Total liabilities

71 001 373

53 334 746

Total equity and liabilities



285 367 338

210 256 710

Condensed consolidated statement of cash flows

for the six months ended 31 August 2023



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