Comments on results
Quarter ended 31 March 2016
Group results for the quarter ended 31 March 2016 are encouraging.
Group revenue on continuing activities (after deduction of the results of The BrandHouse Ltd (TBH) from the prior period’s results) grew by 14%. All business segments yielded a year-on-year growth in revenue. Group Profit After Taxation (PAT) from continuing activities was 2% lower than last year at Rs 152.2m. The shortfall was due mostly to non-recurring foreign exchange gains made by the Global Business cluster in the second quarter last year.
The Finance cluster performed well on account of higher consumer finance volumes. Cluster revenue grew by 19% to Rs 351.8m and cluster PAT improved by 4% to Rs 68.4m.
The Global Business cluster posted a 7% increase in revenue to Rs 200.6m. However, the profitability of the cluster dropped to Rs 57.8m on account of a large foreign exchange gain of Rs 32.2m in the corresponding quarter last year.
Revenue of the Property cluster grew by 10% to Rs 30.4m for the quarter. The Property cluster PAT was boosted by the net bargain purchase gain of Rs 21.3m made on the acquisition of the remaining 50% of the shares of Edith Cavell Properties Ltd, the purchase consideration being less than the fair value of the assets acquired.
The Investments cluster recorded a drop in turnover and profitability on account of the disposal of TBH in October 2015. Part of the shortfall is being compensated by the contribution of iVeri Technologies which was acquired in June 2015.
Six months ended 31 March 2016
Group revenue on continuing activities (excluding TBH) for the six months grew by 16% to Rs 1,123.6m.
Group PAT for the semester grew by 11% to Rs 333.2m. PAT from continuing activities (excluding TBH prior period’s results and the profit on disposal of TBH) grew by 8% to Rs 286.2m.
The performance of the various clusters of the Group for the semester broadly followed the trends described in the quarterly report set out above.
The Government has yesterday announced changes to the Double Taxation Avoidance Agreement between Mauritius and India. The new agreement will only affect structures set up in Mauritius post 1 April 2017. All current structures and those formed before 1 April 2017 are protected by a ‘grandfathering’ clause.
In 2014, we initiated various actions to move our Global Business cluster away from reliance on tax driven deal flows. To this end, a Professional Services Outsourcing (PSO) unit was set up to offer Mauritius as a low cost jurisdiction for companies based in more expensive financial centres. We are pleased to report that encouraging new mandates have been won by PSO.
Concurrently, we have repositioned our office in Singapore as a hub for South East Asia with the appointment of a new Managing Director and we have expanded our geographical reach with the opening of an office in Johannesburg. We believe that these initiatives should help our Global Business cluster to adapt to the new paradigm.
The results of the Group at the half-year mark are positive and give further momentum to the various initiatives that are underway within the Group to achieve our long-term growth objectives backed by a sound balance sheet.
By order of the Board
Cim Administrators Ltd
11 May 2016
The abridged financial statements of the Group are unaudited and have been prepared using the same accounting policies as the audited statements for the year ended 30 September 2015, except for the adoption of published Standards that are now effective.
These abridged financial statements are issued pursuant to Listing Rule 12.20 and the Securities Act 2005.
Copies of the statement of direct and indirect interests of Officers pursuant to rule 8(2)(m) of the Securities (Disclosure Obligations of Reporting Issuers) Rules 2007 and the financial statements are available free of charge upon request made to the Company Secretary at the registered office of Cim Financial Services Ltd.
The Board of Directors of Cim Financial Services Ltd accepts full responsibility for the accuracy of the information contained therein.