30 June 2016

R’000

30 June 2015

R’ 000

31 December 2015

R’ 000

Net asset value

47 322

72 475

78 191

Net tangible asset value

27 190

66 566

69 633

Net asset value per share (cents)

5.24

8.04

8.67

Net tangible asset value per share (cents)

3.01

7.38

7.72

 

 

Acquisitions and disposals

The board actively investigates acquisition opportunities aimed at improving earnings and cash generation for the Group.

 

Return on Innovation (Pty) Ltd (“ROi”)

ROi provides strategic management inputs across all media platforms from the rumblings on social media, through the wide variety of print media to radio and TV – all managed through one intelligence platform. The business provides a strategic high ground for its corporate clients. For Ecsponent, this acquisition is in line with its growth strategy in that ROi is an opportunity that is high tech, offers high margins, high barriers to entry and can effectively be applied in both a South African as well as in an international context. The Group concluded an agreement to acquire 51% of the company, effective 1 March 2016. ROi reported sales amounting to R3.3 million, and a loss after tax and contributions toward group overheads of R977 588 for the interim period ended 30 June 2016.

 

Fair value of the assets acquired and liabilities assumed are as follows:

2016

R

Property, plant and equipment

3 221 303

Deferred taxation

1 434 674

Trade and other receivables

1 570 226

Cash and cash equivalents

282 528

Other financial liabilities

(6 059 728)

Trade and other payables

(1 714 290)

Total identifiable net liabilities

(1 265 287)

Non-controlling interest

619 991

Common control reserve

2 145 296

Purchase consideration

1 500 000

 

 

Ecsponent Development Fund (Pty) Ltd (“ECS Developments”)

ECS Developments, a 74% owned subsidiary of the Company, agreed to acquire the business conducted by Ecsponent Investment Holdings (Pty) Ltd as a going concern. The business provides high yielding financing opportunities which offer an attractive proposition for the Company. The Group concluded an agreement to acquire the business of the company, effective 30 June 2016.

 

Fair value of the assets acquired and liabilities assumed are as follows:

2016

R

Property, plant and equipment

368 871

Deferred taxation

446 087

Trade and other receivables

44 608 966

Trade and other payables

(357 332)

Total identifiable net assets

45 066 592

Non-controlling interest

19 211 569

Common control reserve

54 679 081

Purchase consideration

118 957 242

 

 

Clade Investment Management (Pty) Ltd (“Clade”) and its subsidiary

Ecsponent acquired 51% of the ordinary share capital of Clade, which wholly own the shares of Exchange Trade Fund Ltd, effective 30 June 2016. It has category 2 and 2A investment licences with the Financial Services Board.

 

Fair value of the assets acquired and liabilities assumed are as follows:

2016

R

Property, plant and equipment

8 606

Deferred taxation

3 400 896

Trade and other receivables

1 621 142

Cash and cash equivalents

11 453 166

Other financial liabilities

(11 452 166)

Trade and other payables

(1 608 171)

Bank overdraft

(2 360)

Total identifiable net assets

3 421 113

Non-controlling interest

(1 676 345)

Intangible assets and goodwill

9 255 232

Purchase consideration

11 000 000

 

 

 

Start-up businesses

The Board of Directors established the following new businesses in line with the expansion strategy:

 

Ecsponent Asset Management (Pty) Ltd Botswana (“Ecsponent Asset Management”)

Ecsponent Asset Management was awarded a licence to operate as an Investment Company with Variable Capital (ICVC). Ecsponent through its local holding structures has a 70% interest in this operation. The Group is currently rolling out products in the sector.

 

 

Disposals

Disposal of 51% of Ligagu Investments (Pty) Ltd Swaziland(“Ligagu Investments”)

Ecsponent entered into an agreement to dispose of its 51% shareholding in Ligagu Investments, its subsidiary in Swaziland providing retail credit loans to individuals. The investment was effectively sold on 30 June 2016 for a total purchase consideration of R16 million, payable in twelve equal instalments from 31 July 2016.

 

Fair value of the assets and liabilities disposed of are as follows:

2016

R

Property, plant and equipment

199 222

Intangible assets

275 321

Deferred taxation

759 219

Other financial assets

29 629 448

Trade and other receivables

751 854

Cash and cash equivalents

2 615 690

Other financial liabilities

(19 897 090)

Trade and other payables

(9 746 114)

Current tax payable

(1 729 620)

Total identifiable net assets

2 857 930

Non-controlling interest

(1 245 645)

Net assets derecognised

1 612 285

Profit on disposal

14 387 715

Consideration receivable

16 000 000

 

 

Disposal of acquired debt collection books

Ecsponent decided, as part of its new focus on financial services, to dispose of its collection books. This disposal consideration of R9 million is payable in cash to Ecsponent Credit Services (Pty) Ltd for the acquired debt books in 12 equal instalments. The collection books had a carrying value of R8.9 million on the effective date.