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BLUE LABEL INTEGRATED ANNUAL REPORT 2015
FINANCIAL DIRECTOR’S REPORT
CONTINUED
2014
R’000
Growth
R’000
%
growth
Corporate
EBITDA
(85 656)
(82 886)
(2 770)
(3)
Core net loss
(93 754)
(87 983)
(5 771)
(7)
2015
R’000
The increases in negative EBITDA and core net loss
were primarily attributable to bonuses granted to
senior executives who did not receive bonuses
in the prior year, partially offset by a once-off
income receipt.
STATEMENT OF FINANCIAL POSITION
Total assets increased by R524 million to R7 billion,
of which growth in non-current assets accounted for
R242 million and current assets for R282 million.
The net increase in non-current assets was mainly
attributable to a net growth in intangible assets
and goodwill totalling R249 million, to capital
expenditure net of depreciation of R9 million and to
loans receivable of R11 million. These increases were
offset by a net decline in investment in associates
and joint ventures of R50 million.
The net increase in intangible assets and goodwill
mainly pertained to the acquisition of Viamedia,
in which goodwill equated to R186 million and
intangibles R63 million. A further R125 million was
incurred for the purchase of software, development
costs, starter pack bases and distribution channels.
Amortisation of intangibles amounted to
R122 million.
The net decline in investment in associates and joint
ventures was predominantly due to the disposal
of the Group’s interest in Ukash amounting to
R94 million, a share of net losses of R79 million and
a negative impact of R10 million in foreign currency
translation reserves. These declines were offset by
an additional R50 million capital contribution to
Blue Label Mexico and a contingent purchase
consideration of R30 million for the acquisition of
an effective 37.5% shareholding in the Supa Pesa
group. Movements in loans equated to a further
R53 million, comprising loans granted of
R13 million, interest capitalised of R14 million and
unrealised foreign exchange gains of R26 million.
The net increase in current assets mainly comprised
an increase in accounts receivable of R530 million
and an increase in inventories of R127 million in line
with bulk inventory purchases. Cash resources
declined by R396 million congruent with the
application of cash to fund the increase in assets
and payment of dividends.
In spite of an increase in inventory of R127 million,
the stock turn improved from 35 days reported at
the interim reporting date to 26 days at year-end.
The discount afforded on bulk inventory purchases
justified the quantum of inventory held.
The debtor’s collection period increased from
44 days reported at the interim reporting date
to 46 days at year-end.
The net profit attributable to equity holders of
R578 million, less a dividend of R182 million,
resulted in retained earnings accumulating to
R2.6 billion.
Trade and other payables increased by R105 million
with credit terms averaging 53 days.
STATEMENT OF CASH FLOWS
Cash flows from operating activities amounted to
R132 million net of the funding of additional
working capital requirements of R657 million.
Cash flows applied to investing activities amounted
to R329 million. Of this amount R50 million related
to the additional investment in Blue Label Mexico,
R13 million to loans to associates, R157 million to
the acquisition of Viamedia, R125 million to the
purchase of intangible assets, R10 million to net