Inqo Investments Ltd - Annual Financial Report FY2019
Announcement provided by
Inqo Investments Limited · INQO31/07/2019 08:00
Audited Group Results for the year ended
CHAIRMAN AND CHIEF EXECUTIVE STATEMENT
COMMENTARY
The Group has continued its process of consolidating its financial position that started in 2014 and remains in a strong financial position with no debt.
The Group consolidated revenues saw a slight increase to R23,795,780 from R22,962,689 in 2018 with an EBITDA of -R642,183 (2018: -R3,671,677). The Group results for the year reflect a loss after tax for the year of R1,862,282 (2018: Loss of R4,274,616), an improvement of 56%. Cost control and asset revaluations in an improved operating environment have resulted in an improved operating result for the year. The loss takes into account depreciation of R2,697,401 while included in operating costs for the year are listing expenses of R834,420, directors' fees of R896,947 and professional fees of R621,023. The loss for the year equates to a loss of R0.15 per share (2018: R0.41 per share).
The loan to Kuzuko has historically been fully impaired due to losses incurred by this main subsidiary company. In 2018 the loan impairment was reduced by R3,500,000. There was no further impairment in 2019, since Kuzuko has forecast that it will be profitable. The Group annually reviews the value of its income earning assets to ensure that they reflect their fair value. The assets which have traditionally resulted in valuation movements have been Biological Assets (game animals owned by Inqo). The market for game in
During the 2017/8 and 2018/9 financial years a number of the current Inqo shareholders committed to a private placement of shareholder funds of
INVESTEE COMPANIES
The continued financial improvement of the Group is largely attributable to the
The company earned profits in FY2017 and FY2018 but incurred a loss of R409,995 in FY2019. Tourism in
Conservation costs remain high as Kuzuko continues to rehabilitate the game reserve as well as gradually introduce more animals onto the property. During the year, Kuzuko entered into an ambitious partnership with the
Spekboom Trading (
The contract entered into with the
We are currently investigating other opportunities to continue the reforestation programme.
Inqo made an initial investment in this commercial producer of honey in 2016 and a further investment in 2018. The company contracts with rural farmers to look after its hives in return for a share of the harvest.
The
The hives are harvested twice a year, generally in May and November. The harvest in the 2018/9 year was the largest harvest ever yielded. Inqo earned R178,417 (2018: R41,439) as its share of revenue in the 2018/9 financial year.
Inqo made an initial investment in 2017 and a further investment in 2018 in
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
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, the
Over the 18 months since its launch, the scheme has attracted over 2,100 savers with a fund size of UGX 1.5 billion. Mazima has several partnerships with organizations like
Inqo earned interest on its investment in the
OUTLOOK
Inqo will continue to benefit from the improved trading of the
The improved room rates being achieved by
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
· Increased VAT and income tax paid year on year, currently 68 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.
· 85,512 beehives in the field providing 10,000 farmers with increased income.
· 2,100+ voluntary low income savers in micro-pension scheme
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
DIVIDEND
The company has not declared a dividend for the year ended
K.S Tan C.J Bertie
Chairman Chief Financial Officer
Enquiries:
|
|
Chris Bertie, Chief Financial Officer and Chief Operating Officer |
Tel: +27 (0)83 6254069 |
|
|
|
|
ISDX Corporate Adviser and broker |
|
Dr Wang Chong |
Tel: +44 (0)20 7186 9948 |
Condensed consolidated statement of profit or loss and other comprehensive income For the year ended |
|||||||||
|
|
|
|
|
|||||
|
|
|
|
|
|
||||
|
|
|
(Audited) |
|
(Audited) |
||||
|
|
|
Year ended |
|
Year ended |
||||
|
|
|
28 February |
|
28 February |
||||
|
|
|
2019 |
|
2018 |
||||
|
|
|
|
|
|
||||
|
|
|
R'000 |
|
R'000 |
||||
|
|
|
|
|
|
||||
Revenue |
|
|
23 796 |
|
22 963 |
||||
Cost of sales |
|
|
(3 459) |
|
(3 046) |
||||
Gross profit |
|
|
20 337 |
|
19 917 |
||||
Other income |
|
|
853 |
|
146 |
||||
Personnel expenses |
|
|
(8 177) |
|
(7 772) |
||||
Depreciation |
|
|
(2 697) |
|
(2 447) |
||||
Listing expenses |
|
|
(834) |
|
(722) |
||||
Professional fees |
|
|
(621) |
|
(467) |
||||
Selling and administrative expenses |
|
(13 390) |
|
(12 732) |
|||||
Operating Loss |
|
|
(4 529) |
|
(4 077) |
||||
|
|
|
|
|
|
||||
Fair value adjustment |
|
|
1 178 |
|
(2 052) |
||||
|
|
|
|
|
|
||||
Net financing income |
|
|
850 |
|
135 |
||||
Finance income |
|
|
1 060 |
|
166 |
||||
Finance costs |
|
|
(210) |
|
(31) |
||||
|
|
|
|
|
|
||||
Loss before taxation |
|
|
(2 501) |
|
(5 994) |
||||
Taxation |
|
|
639 |
|
1 720 |
||||
Loss for the year |
|
|
(1 862) |
|
(4 274) |
||||
Other comprehensive income |
|
|
|
|
|
||||
|
|
|
2 378 |
|
- |
||||
Revaluation of land |
|
|
3 065 |
|
- |
||||
Deferred tax on revaluation |
|
|
(687) |
|
- |
||||
|
|
|
|
|
|
||||
Total comprehensive income for the period |
|
|
516 |
|
(4 274) |
||||
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
Loss per share (rands) |
|
|
(0.15) |
|
(0.41) |
||||
Diluted Loss per share (rands) |
|
|
(0.15) |
|
(0.41) |
||||
|
|
|
|
|
|
||||
|
|
|
|
|
|
Condensed consolidated statement of financial position |
|
|
|
||
At |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Audited) |
|
|
(Audited) |
|
|
28 February |
|
|
28 February |
|
|
2019 |
|
|
2018 |
|
|
R'000 |
|
|
R'000 |
Assets |
|
|
|
|
|
Non-current assets |
|
137 201 |
|
|
131 196 |
Property, plant and equipment |
|
135 555 |
|
|
129 725 |
Intangible assets |
|
15 |
|
|
15 |
Other Investments |
|
1 631 |
|
|
1 013 |
Loan receivable |
|
- |
|
|
443 |
|
|
|
|
|
|
Current assets |
|
43 690 |
|
|
28 767 |
Inventories |
|
911 |
|
|
730 |
Trade and other receivables |
|
23 514 |
|
|
22 668 |
Biological assets |
|
7 708 |
|
|
2 463 |
Cash and cash equivalents |
|
11 558 |
|
|
2 906 |
|
|
|
|
|
|
Total assets |
|
180 891 |
|
|
159 963 |
|
|
|
|
|
|
Equity and liabilities |
|
|
|
|
|
Capital and reserves |
|
|
|
|
|
Ordinary share capital |
|
70 559 |
|
|
65 004 |
Share premium |
|
83 429 |
|
|
70 774 |
Revaluation reserve |
|
73 153 |
|
|
70 774 |
Accumulated loss |
|
(65 557) |
|
|
(63 546) |
Equity attributable to equity holders of |
|
161 584 |
|
|
143 006 |
Non-controlling interest |
|
808 |
|
|
659 |
Total equity |
|
162 392 |
|
|
143 665 |
|
|
|
|
|
|
Non-current liabilities |
|
7 872 |
|
|
7 815 |
Loans from related parties |
|
168 |
|
|
189 |
Other long term loans |
|
625 |
|
|
595 |
Deferred taxation |
|
6 886 |
|
|
6 838 |
Debentures |
|
193 |
|
|
193 |
|
|
|
|
|
|
Current liabilities |
|
10 627 |
|
|
8 483 |
Trade and other payables |
|
10 037 |
|
|
8 336 |
Provision |
|
590 |
|
|
147 |
|
|
|
|
|
|
Total liabilities |
|
18 499 |
|
|
16 298 |
|
|
|
|
|
|
Total equity and liabilities |
|
180 891 |
|
|
159 963 |
|
|
|
|
|
|
Statements of cash flows
For the year ended
|
|
|
|
||
|
|
Audited 2019 |
|
Audited 2018 |
|
|
|
R |
|
R |
|
|
|
|
|
|
|
Cash (utilised) / generated by operations |
|
(1 887) |
|
1 202 |
|
Finance income |
|
1 060 |
|
166 |
|
Finance expense |
|
(210) |
|
(31) |
|
Net cash (outflow) / inflow from operating activities |
|
(1 037) |
|
1 337 |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Acquisition of other investments |
|
- |
|
(59) |
|
Loan advanced to other investments |
|
(176) |
|
(443) |
|
Acquisition of property, plant and equipment |
|
(5 507) |
|
(1 193) |
|
Acquisition of intangible assets |
|
(10) |
|
(7) |
|
Acquisition of biological assets |
|
(4 066) |
|
(93) |
|
Proceeds on disposal of property, plant and equipment |
|
86 |
|
40 |
|
Net cash outflow from investing activities |
|
(9 673) |
|
(1 755) |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Proceeds from share issue |
19 352 |
|
- |
|
|
Loans from related parties repaid |
- |
|
(269) |
|
|
Loans and borrowings received |
|
- |
|
29 |
|
Loans from related parties received |
|
10 |
|
22 |
|
Net cash inflow/(outflow) from financing activities |
|
19 362 |
|
(218) |
|
Net movement in cash and cash equivalents |
8 652 |
|
(636) |
|
|
Cash and cash equivalents at beginning of year |
2 906 |
|
3 542 |
|
|
Cash and cash equivalents at end of year |
|
11 558 |
|
2 906 |
|
This information is provided by RNS, the news service of the