SENS announcement for JSE listed company: AVV
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ALVIVA HOLDINGS LIMITED – AVV : Trading Statement And Update


                            

AVV : Trading Statement And Update:
Alviva Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1986/000334/06
Share Code: AVV
ISIN: ZAE000227484
(‘Alviva’ or ‘the Group’ or ‘the Company’)

TRADING STATEMENT AND UPDATE

The trading statement is published in compliance with paragraph 3.4(b) of the JSE Listings
Requirements.

Headline earnings, Earnings per Share (‘EPS’), Headline Earnings per Share (‘HEPS’) and
Core Earnings per Share (‘Core EPS’)

Shareholders are advised that the Company is reasonably certain that its results for the six
months ended 31 December 2019 will reflect the following:

Six months to 31 Six months to 31 December
Expected change
December 2018 2019
percentage
Actual Expected Values

Headline earnings R214 million -39% to -46% R115 million to R130 million

EPS 146.3 cents -33% to -41% 86 cents to 98 cents

HEPS 146.2 cents -33% to -41% 86 cents to 98 cents

CORE EPS 172.4 cents -21% to -31% 120 cents to 136 cents

The Company has produced disappointing results for the period, mainly as a result of the
performance of the Distribution segment. This segment has been affected by the tough
economic environment, operating challenges with its new ERP system, minor losses on forex
positions compared to profits in the prior period, and changes in the go to market strategy
adopted by a large vendor, all of these in approximately equal measure.

The balance of the decrease in profitability has been brought about through the increase in the
amortisation charges on intangible assets, further impairment charges on the loan to an
associate, and the introduction of IFRS 16 (see note below).

Notes:

1. The Group has adopted IFRS 16 effective from 1 July 2019 whereby right-of-use assets
and associated liabilities for its operating leases of equipment and properties have been
recognised. The nature of expenses related to those leases has changed as the group
now incurs depreciation charges for the right-of-use assets and interest expenses on the
lease liabilities. Previously, the group recognised operating lease expenses on a straight-
line basis over the term of the leases.
The Group has applied the modified retrospective approach whereby historic comparative
information has not been restated. IFRS 16 has no impact on the income statement over
the full lease term but is earnings dilutive towards the beginning of the relevant lease term
and earnings enhancing towards the end of the lease term. The pre-tax effect on the profit
for the six months ended 31 December 2019 was a decrease of approximately R9.9
million. The Group is on average at the beginning stages of most of its leases and hence
the reduction in all earning metrics in the current period. Cash outflows associated with
the adoption of IFRS 16 regarding the payment of the lease obligations did not and will not
change going forward.

2. Consistent with prior reporting the Company aims to present to shareholders the same
information that management utilises to evaluate the performance of the Group’s
operations. Accordingly, we present Core EPS, which is headline earnings (as calculated
based on SAICA Circular 4/2018) adjusted for the amortisation charge of intangible assets
recognised on business combinations and expenses incurred in the acquisition of these
entities.

The above information has not been reviewed or reported on by the Company’s external
auditors. The Company’s unreviewed interim results for the six months ended 31 December
2019 are expected to be published on SENS on or about 2 March 2020.

Midrand
14 February 2020

Sponsor: Deloitte & Touche Sponsor Services (Pty) Ltd

Date: 14-02-2020 11:00:00
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