Unaudited results for period ended 31 August 2024
27/11/2024 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241127:nRSa7409Na&default-theme=true
RNS Number : 7409N Inqo Investments Limited 27 November 2024
Inqo Investments Limited
Unaudited Group Results for the half-year period ended 31 August 2024
CHAIRMAN AND CHIEF EXECUTIVE'S STATEMENT
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.
COMMENTARY
The Group remains in a strong financial position with total assets of
R234,859,780 and minimal debt.
The results for the half-year period under review showed revenue of R8,199,813
(August 2023: R7,366,899). The hospitality and tourism industry is
characterised by seasonal fluctuations, with the interim period aligning with
the off-peak season, which historically results in lower occupancy rates and
revenue. The Group generates 80% of its revenue from the hospitality and
tourism sector. The Group earned a profit after tax of R532,516 (August 2023:
loss after tax R4,069,070).
In April 2024, the company issued 1,854,646 new ordinary shares, raising gross
capital of R 29,984,428. This includes the conversion of two credit loan notes
of USD 1,000,000 and R 2,000,000 respectively into equity by the lenders
exercising their conversion rights.
In 2023, Inqo was awarded a US$4 million grant over three years to fund its
Conservation and Rural Enterprise (CARE) project in Uganda. To date, Inqo has
received US$3 million of this grant. During the period, the Group formalised
three CARE investments in Uganda, namely Flybox Budongo (BSF) Farm Limited,
Pabidi Lodge Budongo Limited and Empower Clean Cooking Limited. In the
current period, grant funding utilised amounted to R5,143,989 (August 2023:
Rnil).
Whilst there has been no change in the company's shareholding in Spekboom
Trading (Pty) Limited, a shift in the voting rights has occurred. As a result,
the company has ceased consolidation and now recognises the investment under
the equity method.
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 unaudited group financial statements for the half-year period
ended 31 August 2024.
FINANCIAL RESULTS
The unaudited financial results for the half-year period ended 31 August 2024
are as follows:
Aug-24 Aug-23
R'000 R'000
Revenue 8,200 7,367
Profit/(Loss) for the year 533 (4,069)
Earnings per share 0.03 (0.27)
Total Assets 234,860 223,854
Unutilised Grant Funding 41,620 34,404
Total Liabilities excl Unutilised Grant Funding 10,540 36,597
Net Assets 182,700 152,853
Profit/(Loss) from operating activities includes the following items
Grant income 5,144 -
Depreciation and amortisation (1,102) (1,605)
Personnel Costs (2,524) (2,855)
Directors' Fees and Salaries (648) (486)
Listing Expenses (486) (373)
Professional Fees (528) (307)
Reversal/(Raising) of impairment of loans: Four One 181 (25)
Re-instatement of impairment of loans: Spekboom Trading (530) -
Fair value adjustment of the buffalo herd 18 296
In August 2024, 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 Statement of Financial Position are reflected at fair value.
The only non-South African company where Inqo held investments 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. For this reason, the loan including interest amounting to
R4,005,264 remains impaired in full.
INVESTEE COMPANIES: FINANCIAL, ENVIRONMENTAL AND SOCIAL PERFORMANCE COMMENTARY
Beyond the specific changes outlined below, there have been no other material
developments or significant events impacting the investee companies during the
period.
Kuzuko Lodge (Pty) Limited (South Africa)
After exiting the hotel management company approximately one year ago, Kuzuko
Lodge has implemented a focused strategy to improve operational efficiency and
increase revenue. These efforts have resulted in a turnaround, with a loss of
R4,013,271 in August 2023 shifting to a loss of R743,774 in August 2024. This
positive trajectory can be attributed to a combination of cost containment
measures and targeted marketing initiatives. The directors anticipate that
Kuzuko will continue to build on this momentum and achieve profitability by
the end of the year, particularly as the peak tourism season approaches.
CARE Investees
· Flybox Budongo (BSF) Farm Limited (Uganda) forms part of the Uganda
CARE project. Inqo has partnered with Mana Biosystems Limited (United Kingdom)
(FlyBox UK) to implement the Black Soldier Fly project in Uganda. The
purpose of insect farming is to upcycle organic waste into animal protein and
compost. The business will initially sell larvae and eggs to farmers to grow
to maturity by feeding on market and organic waste. These larvae can then be
harvested for use as protein substitute in animal feed. At reporting date,
Flybox UK had been commissioned to build modular insect farms due for delivery
in Uganda in December 2024. No further business activity has commenced.
· Pabidi Lodge Budongo Limited (Uganda) forms part of the Uganda
CARE project. Pabidi Lodge is currently under construction and it is expected
to open in May 2025. The lodge will be the only luxury accommodation offering
sustainable ecotourism to guests in the Budongo Forest. The Lodge will be
operated by Great Lakes Safaris, one of the leading tour operators in Uganda.
Great Lakes Safaris hold the sole conservancy in the Budongo Forest, an 825 sq
km forest that is home to more than 600 chimpanzees. The founder and CEO of
Great Lake Safaris is the majority shareholder of Budongo-Eco Lodge Limited,
Inqo's joint venture partner. The site clearance and construction of the lodge
commenced during the reporting period.
· Empower Clean Cooking Limited (Uganda) forms part of the Uganda
CARE project. Empower Clean Cooking Limited is a joint venture between Inqo
and East African Power Limited. Empower Clean Cooking Limited will be
managed and operated by East Africa Power, a highly experienced renewable
energy developer and operator with hydro and solar plants in Rwanda, Uganda,
DRC, Zambia, Zimbabwe and Kenya. The objective of the company is to safeguard
the environment through providing clean cooking solutions to local
environments. The joint venture will manufacture biomass pellets for cooking
fuel as an alternative to wood and charcoal and to explore clean cooking
solutions for the local community. The company has not commenced operations.
SUMMARY OF SOCIAL & ENVIRONMENTAL METRICS SINCE PROJECT COMMENCEMENT
· Kuzuko Lodge
o 35,617 acres (14,414 hectares) of former farmland restored and protected
as a game reserve
o 70 km of game fencing erected
o 45 FTE staff at Kuzuko in standard housing with flush toilets, power,
water and solar panels
o 120 fixed term jobs
o Conservation of 2 endangered species, 8 endangered species protected, 23
species introduced
o Re-wilded 18 adult cheetahs with diverse genetics to bolster the
meta-population in southern Africa
· Southlake Medical Centre
o 98,719 patient visits including 386 HIV patients receiving care and
counselling, 5,599 people receiving health education including through
community outreach, 217 safe deliveries, 205 surgeries, 2,000 cervical cancer
screens and 700+ HPV vaccinations
· Kentegra
o 300 FTE and 26,000 contracted out-growers
· Sanergy
o 1,000 FTE, 2,000 indirect jobs, 5,000 toilets serving 270,000 people in
Nairobi, Kisumu and Eldoret
· Spekboom Trading
o 5,185 hectares degraded land planted with 30 million spekboom; 350 fixed
term jobs
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 during this challenging time.
K.S
Tan
R.H Steyn
Chairman
Chief Financial
Officer
Issued on: 27 November 2024
Enquiries
Inqo Investments Limited Tel: +27 834249880
Robyn Steyn, Chief Financial Officer Email: finance@inqo.co.za (mailto:finance@inqo.co.za)
Hobart Capital Markets LLP
AQSE Corporate Adviser and Broker Tel: +44 (0)20 7070 5665
Dr Wang Chong Email: wang.chong@hobartcapital.com
Statements of Financial Position
Group
Group Group 31 August
Figures in R 31 August 29 February 2024 2023 -
2024 restated*
Assets
Non-current assets
Property, plant and equipment * 150,695,290 151,980,926 152,842,048
Right-of-use assets 68,147 152,975
Intangible assets 339 840 1,340
Investment in joint ventures and associates 7,867,661
Other investments 7,179,889 7,306,227 9,134,004
Total non-current assets * 165,743,179 159,356,140 162,130,367
Current assets
Inventories 4,179,170 4,295,937 5,055,693
Trade and other receivables 3,550,837 6,059,424 3,858,133
Biological assets 995,000 977,000 3,085,440
Cash and cash equivalents 60,391,594 43,771,590 49,724,635
Total current assets 69,116,601 55,103,951 61,723,901
Total assets * 234,859,780 214,460,091 223,854,268
* - The donation of Spekboom plantings had been recognised as Other Income in
the interim report for the period ended 31 August 2023. This was not the final
accounting treatment in the audited annual financial statements for the year
ended 29 February 2024, and as such the 31 August 2023 interim comparatives
above have been corrected to follow the annual financial statements.
Group
Group Group 31 August 2023 - restated*
Figures in R 31 August 2024 29 February 2024
Equity and liabilities
Equity
Ordinary share capital 81,858,155 72,584,925 72,584,925
Share premium 108,296,468 87,585,270 87,585,270
Accumulated loss * (94,528,411) (95,364,654) (94,049,312)
Revaluation reserve 86,693,347 86,693,347 86,693,347
Total equity attributable to owners of the parent* 182,319,559 151,498,888 152,814,230
Non-controlling interests 380,106 119,507 38,665
Total equity* 182,699,665 151,618,395 152,852,895
Liabilities
Non-current liabilities
Deferred tax liabilities 4,582,035 3,809,116 4,596,962
Loans from related parties 1,614,127 3,423,672 4,599,458
Other loans 18,931,500 18,590,000
Total non-current liabilities 6,196,162 26,164,288 27,786,420
Current liabilities
Trade and other payables 4,344,165 3,683,554 8,061,296
Lease liabilities 80,155 217,243
Unutilised grant funding 41,619,788 32,846,571 34,404,005
Bank overdraft 67,128 532,409
Total current liabilities 45,963,953 36,677,408 43,214,953
Total liabilities 52,160,115 62,841,696 71,001,373
Total equity and liabilities * 234,859,780 214,460,091 223,854,268
Statements of Profit or Loss and Other Comprehensive Income
Group
Group 12 month Group 6 month
6 month period ended period ended
period ended 29 February 31 August 2023
Figures in 2024 - restated*
R
31 August 2024
Revenue 8,199,813 20,610,801 7,366,899
Cost of sales (1,074,048) (2,421,823) (1,049,896)
Gross profit 7,125,765 18,188,978 6,317,003
Other income *
5,378,999 3,630,200 279,996
Personnel expenses (3,171,797) (6,996,171) (3,340,548)
Depreciation and amortisation (1,102,141) (2,936,964) (1,605,019)
Listing expenses (486,185) (933,451) (372,904)
Professional fees (528,209) (369,556) (306,600)
Provision for doubtful debts (160,321) (319,841) (160,321)
Impairment 181,457 (1,920,552) (24,822)
Reinstatement of loan impairment - Spekboom (530,286)
Other expenses (5,966,543) (12,836,487) (6,511,330)
Profit/ (loss) from operating activities * 740,739 (4,493,844) (5,724,545)
Inventory write (down)/up (832,272) 8,000
Fair value adjustment 18,000 (1,811,980) 296,460
Finance income 568,705 995,676 1,218,522
Finance costs (22,008) (167,020) (85,531)
Profit/ (loss) before tax* 1,305,436 (6,309,440) (4,287,094)
Income tax (expense)/ credit (772,920) 1,005,869 218,024
Profit/ (loss) for the period * 532,516 (5,303,571) (4,069,070)
Group
Group 12 month Group 6 month
6 month period ended period ended
period ended 29 February 31 August 2023
Figures in R 31 August 2024 2024 - restated*
Profit/ (loss} for the period attributable to:
Owners of Parent * 553,267 (5,262,858) (3,947,516)
Non-controlling interest (20,751) (40,713) (121,554)
(5,303,571}
532,516 (4,069,070}
Earnings per share from continuing and discontinuing operations
attributable to owners of the parent during the period Basic earnings per
share *
Basic earnings/ (loss) per share *
0.03 (0.36) (0.27)
Diluted earnings per share *
Diluted earnings/ (loss) per share * (0.36)
0.03 (0.27)
Total comprehensive income* 532,516 (5,303,571} (4,069,070}
Comprehensive income attributable to:
Comprehensive income, attributable to owners of parent * 553,267 (5,262,858) (3,947,516)
Comprehensive income, attributable to non-controlling interests (20,751) (40,713) (121,554)
(5,303,571}
532,516 (4,069,070}
Statement of Cash Flows
Group 12 month
Group 6 month period ended Group
period ended 29 February 6 month
period ended
Figures in R 31 August 2024 2024 31 August 2023
Net cash flows used in operations (1,013,582) (11,800,817) (4,901,289)
Interest paid (12,251) (143,656) (85,531)
Interest received 1,013,664 995,676 1,218,522
Net cash flows used in operating activities (12,169) (10,948,797) (3,768,298)
Cash flows from investing activities
Cash flows from losing control of subsidiaries (2,668)
Cash flows used in obtaining control of subsidiaries or other businesses
(7,225,997)
Proceeds from sales of property, plant and equipment (17,103) 58,696
Purchase of property, plant and equipment (746,289) (677,038) (300,055)
Purchase of biological assets 248,100
Purchase of other financial assets (141,170)
Grant funding received 17,728,014 1,397,799 17,066,111
Cash flows from investing activities 9,753,060 703,658 16,931,682
Cash flows from financing activities
Proceeds from issuing shares 10,197,528
Other loans 25,869
Payments to related parties 227,105 (1,087,917) 62,000
Loans received related parties 17,786,900
Repayments of finance lease (80,155) (234,148) (82,284)
Cash flows from financing activities 10,344,478 16,464,835 5,585
Net increase in cash and cash equivalents before effect of
exchange rate changes 20,085,369 6,219,696 13,168,969
Effect of exchange rate changes on cash and cash equivalents (3,398,237) 1,461,509
Net increase in cash and cash equivalents 16,687,132 7,681,205 13,168,969
Cash and cash equivalents at beginning of the period 43,704,462 36,023,257 36,023,257
Cash and cash equivalents at end of the period 60,391,594 43,704,462 49,192,226
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END NEXEASFKASLLFFA