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ANNUAL RESULTS
FOR THE YEAR ENDED
29 FEBRUARY 2016
8 SEPTEMBER 2016
ANNUAL RESULTS: 8 SEPTEMBER 2016
Basis of preparation
Revenues reflect the effective shareholding of Oakbay Investments ex...
OVERVIEW
OF RESULTS
Nazeem Howa
Chief Executive
ANNUAL RESULTS: 8 SEPTEMBER 2016
Basis of preparation and disclaimer
Overview of results
History of Group
Business philoso...
ANNUAL RESULTS: 8 SEPTEMBER 2016
OAKBAY INVESTMENTS PRESENTATION TEAM
Nazeem Howa
CEO of Oakbay Investments
Jacques Roux
C...
ANNUAL RESULTS: 8 SEPTEMBER 2016
Continued strong performance
 Group revenue increased 7% to 2.62 billion Rand (2015: 2.4...
HISTORY OF
GROUP
Nazeem Howa
Chief Executive
ANNUAL RESULTS: 8 SEPTEMBER 2016
 Contrary to misperceptions, Oakbay has been operating
successfully in South Africa for ...
ANNUAL RESULTS: 8 SEPTEMBER 2016
Two key deliverables with equal importance:
Profit and job creation
Five main principles ...
ICT DIVISION
Stephan Nel
CEO of Sahara
ANNUAL RESULTS: 8 SEPTEMBER 2016
■ Sahara was established in 1997 as an ICT provider. Its CEO
is Stephan Nel
■ Has revolut...
ANNUAL RESULTS: 8 SEPTEMBER 2016
■ Sahara reported revenues of 1.1 billion Rand
■ Contributed 44% of Oakbay Investments’ r...
ANNUAL RESULTS: 8 SEPTEMBER 2016
■ Sahara business will become 100% mobile-focused by the end of
2016
■ Focus on launching...
MINING DIVISION
Jacques Roux
CEO of Oakbay Resources
and Energy
Trevor Scott
CFO of Oakbay Resources
and Energy
Louis Lour...
ANNUAL RESULTS: 8 SEPTEMBER 2016
Mining operations include: extraction and prospecting licences for a
number of coal, uran...
ANNUAL RESULTS: 8 SEPTEMBER 2016
Group’s mining businesses reported total revenues of 1.17
billion Rand
 44.5% of Oakbay ...
ANNUAL RESULTS: 8 SEPTEMBER 2016
In April 2016, Tegeta completed its 2.15 billion Rand acquisition
of the Optimum coal min...
ANNUAL RESULTS: 8 SEPTEMBER 2016
 Significant opportunities for JIC to cross-sell with existing
customers
 Division majo...
MEDIA DIVISION
Moegsien Williams
Editor in Chief of The New Age
ANNUAL RESULTS: 8 SEPTEMBER 2016
A successful and growing media business led by Editor
in Chief, Moegsien Williams, which ...
ANNUAL RESULTS: 8 SEPTEMBER 2016
■ Media businesses continuing to grow and generate revenue
through innovative new platfor...
ANNUAL RESULTS: 8 SEPTEMBER 2016
Strategy to continue to be at the forefront of transforming and
disrupting the South Afri...
STRATEGIC
INVESTMENTS
Nazeem Howa
Chief Executive
ANNUAL RESULTS: 8 SEPTEMBER 2016
■ Indirect minority shareholding (17%) in VR Laser, a
leading manufacturer of steel produ...
GOVERNMENT
REVENUE
Nazeem Howa
Chief Executive
ANNUAL RESULTS: 8 SEPTEMBER 2016
Revenue split of Government contracts
Mining Media Engineering
Government revenue
attribu...
OUTLOOK
Nazeem Howa
ANNUAL RESULTS: 8 SEPTEMBER 2016
Continued focus on our two primary
performance indicators: profit and job
creation, via:
...
ANNUAL RESULTS: 8 SEPTEMBER 2016
Q&A
29
Oakbay Investments Annual Results for the Year Ended Feb 2016
Oakbay Investments Annual Results for the Year Ended Feb 2016
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Oakbay Investments Annual Results for the Year Ended Feb 2016

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Revenues reflect the effective shareholding of Oakbay Investments excluding portions attributable to other shareholders.

All revenue numbers are reflected gross as would be the case in the individual financial statements and intergroup revenue has not been removed for the purposes of this presentation as would be the case when preparing consolidated financial statements.

For additional information, see video on http://www.cnbcafrica.com/video/?bctid=5116990887001

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Oakbay Investments Annual Results for the Year Ended Feb 2016

  1. 1. ANNUAL RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2016 8 SEPTEMBER 2016
  2. 2. ANNUAL RESULTS: 8 SEPTEMBER 2016 Basis of preparation Revenues reflect the effective shareholding of Oakbay Investments excluding portions attributable to other shareholders. All revenue numbers are reflected gross as would be the case in the individual financial statements and intergroup revenue has not been removed for the purposes of this presentation as would be the case when preparing consolidated financial statements. Disclaimer Opinion expressed herein are, by nature, subjective to known and unknown risks and uncertainties. Changing information or circumstances may cause the actual results, plans and objectives of Oakbay Investments Proprietary Limited (“the Company”) or any legal entity that is a subsidiary or associate of the Company (“the Group”) to differ materially from those expressed or implied in any forward-looking statements. Financial forecasts and data given herein are estimates based on audited annual financial statements, information readily available in the public domain and reports prepared by experts who, in turn, may have relied on management estimates. Undue reliance should not be placed on such opinions, forecasts or data contained herein. Neither the Company, the Group, nor any of its affiliates, advisors, employees, directors, agents or representatives accepts any responsibility for any loss arising from the use of any opinion expressed or forecast or data herein. Forward-looking statements apply only as of the date on which they are made, and are based on current circumstances and estimates, and the Company does not undertake any obligation to publicly update or revise any opinions or forward-looking statements whether to reflect new data or future events or circumstances. 2
  3. 3. OVERVIEW OF RESULTS Nazeem Howa Chief Executive
  4. 4. ANNUAL RESULTS: 8 SEPTEMBER 2016 Basis of preparation and disclaimer Overview of results History of Group Business philosophy Divisional performance and outlook  ICT  Mining  Media  Strategic Investments Government revenue breakdown Group outlook Q&A CONTENTS 4
  5. 5. ANNUAL RESULTS: 8 SEPTEMBER 2016 OAKBAY INVESTMENTS PRESENTATION TEAM Nazeem Howa CEO of Oakbay Investments Jacques Roux CEO of Oakbay Resources and Energy Trevor Scott CFO of Oakbay Resources and Energy Louis Lourens Deputy CEO of JIC Mining George Van Der Merwe COO of Optimum Stephan Nel CEO of Sahara Moegsien Williams Editor in Chief of The New Age 5
  6. 6. ANNUAL RESULTS: 8 SEPTEMBER 2016 Continued strong performance  Group revenue increased 7% to 2.62 billion Rand (2015: 2.44 billion Rand) Excellent progress on strategic priorities  3,991 jobs sustained despite South Africa’s wider economic challenges, and 3,719 jobs in the mining sector  Solid growth in key sectors: mining, ICT, media and engineering  Continued business turnaround of under-performing Group assets Growth driven by private sector contracts and business philosophy of disrupting established industries and turning around performance in under-performing assets  Mining continues to contribute the largest share of Group revenues despite pressures to commodity prices  Sahara is the second biggest contributor to the group’s total revenue  Neither JIC or Sahara has any government revenue MAIDEN ANNUAL RESULTS Mining ICT Media Engineering Revenue by sector 6
  7. 7. HISTORY OF GROUP Nazeem Howa Chief Executive
  8. 8. ANNUAL RESULTS: 8 SEPTEMBER 2016  Contrary to misperceptions, Oakbay has been operating successfully in South Africa for 20 years and has a long track record of strong business performance in a number of sectors  Operations began in the IT sector with Sahara Computers and have since diversified into a variety of sectors including: mining, media and engineering  Group diversification has enabled consistent growth and job creation throughout economic cycle LONG TRACK RECORD OF SUCCESS AND JOB CREATION IN SOUTH AFRICA 8 employees in 1997, now employ 7,991 99% of the Group’s employees are from Southern Africa and 76% is South African Paid over 141 million Rand in corporate income taxes Grown revenues to 2.62 billion Rand Sahara was the Group’s first company 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sahara notebook was the number one bestseller in the country Sahara was the number two brand in South Africa for household goods, behind only Samsung Acquired JIC, a mining services company Established Tegeta, a mining exploration company Acquired an indirect minority stake in engineering company VR Laser 8 Shiva acquired uranium mine Launched the ANN7 news network Launched The New Age national newspaper
  9. 9. ANNUAL RESULTS: 8 SEPTEMBER 2016 Two key deliverables with equal importance: Profit and job creation Five main principles are:  Seeking to disrupt established industries;  Turning around performance in under-performing or distressed assets;  Managing its strategy and asset portfolio for the long-term;  Adopting a managerial structure that is un-bureaucratic, allowing for rapid decision-making; and  Very hard work OUR BUSINESS PHILOSOPHY Oakbay has created thousands of jobs for South Africans since inception All profits (after drawings and retained working capital balances) have been reinvested in South Africa 9
  10. 10. ICT DIVISION Stephan Nel CEO of Sahara
  11. 11. ANNUAL RESULTS: 8 SEPTEMBER 2016 ■ Sahara was established in 1997 as an ICT provider. Its CEO is Stephan Nel ■ Has revolutionised the traditional dealer channel in South Africa by changing the standard dynamics of how distribution was handled at the time - Best prices / Tier One product / easy access / unique distribution country-wide ■ Always very visible, public face of Oakbay’s operations - In 2005, Sahara’s notebook was the no. 1 South African- branded notebook ■ Evolving strategy focussed on anticipating future customer demand - 2010: strategic shift and embraced increasing levels of connectivity to become more retail and technology focused - direct to retail customers and embracing tablets and smartphones - Focus now on mobile and two-in-one devices - Sahara has recently partnered with the international brand Alcatel to focus on telcos and the data industry ■ Sahara has undertaken no Government business since 2008 ICT DIVISION: OVERVIEW Sahara customer base 60% 30% 10% Retail Channels Corporate 11
  12. 12. ANNUAL RESULTS: 8 SEPTEMBER 2016 ■ Sahara reported revenues of 1.1 billion Rand ■ Contributed 44% of Oakbay Investments’ revenues - second biggest contributor ■ Shift to mobile product sales has continued throughout the period, reflecting demand ■ Today, Sahara still serves a niche customer base of dealers around the country: - Top 5 retailers in the country - A growing online base - Corporate/B2B customers ■ Successfully implemented strategic priorities: - Exiting lower margin contracts - Enhancing relationships with technology partners/general retailers who are the most progressive in the mobile area, including: Alcatel and Edcon ICT DIVISION: PERFORMANCE 12
  13. 13. ANNUAL RESULTS: 8 SEPTEMBER 2016 ■ Sahara business will become 100% mobile-focused by the end of 2016 ■ Focus on launching a variety of new products - Cell phone accessories; and - Innovative ideas such as a ‘child-proximity’ watch ■ Anticipated that more transactions will be direct to the retail consumer - Sahara will use transaction data to better understand customer demands ■ Sahara has always embraced the Group’s philosophy of never standing still – always pushing boundaries and/or disrupting markets to extract value ■ Strategic emphasis for medium term: - being online - focusing on mobile products - aligning itself with the best partners, and - using data for the benefit of both consumers and Sahara ICT DIVISION: OUTLOOK 13
  14. 14. MINING DIVISION Jacques Roux CEO of Oakbay Resources and Energy Trevor Scott CFO of Oakbay Resources and Energy Louis Lourens Deputy CEO of JIC Mining George Van Der Merwe COO of Optimum
  15. 15. ANNUAL RESULTS: 8 SEPTEMBER 2016 Mining operations include: extraction and prospecting licences for a number of coal, uranium and gold ore bodies, as well as a mining services business. The Group’s mining businesses are: Mining operations:  Oakbay Resources & Energy (listed on the Johannesburg Stock Exchange – CEO is Jacques Roux): the owners and operators of Shiva Uranium and the Brakfontein mine; and  Tegeta – the owners and operators of the Optimum and Koornfontein coal mines Mining services: CEO is JP Arora  JIC Mining Services – a provider of specialised mining services for over 25 years Demonstrable track record in turning around performance, driving greater efficiencies and delivering profitable businesses In 2015/16, Oakbay’s mining division has sustained 3,719 jobs vs South Africa’s wider mining sector which has seen tens of thousands of jobs lost MINING DIVISION: OVERVIEW 15
  16. 16. ANNUAL RESULTS: 8 SEPTEMBER 2016 Group’s mining businesses reported total revenues of 1.17 billion Rand  44.5% of Oakbay Investments’ revenues Shiva Uranium is one of the most significant and advanced uranium projects in the world  Uranium mine is under development  Significant quantities of gold in the ore body means that the mine continues to be profitable and employ over 700 workers  No employees have been retrenched since the business was acquired Tegeta supplied 1.49 million tonnes of coal to Eskom. This constituted 1.25% of Eskom’s total coal supply ■ Oakbay’s 29% share in Tegeta equals 0.43 million tonnes of supply and just 0.36% of Eskom’s total coal supply MINING DIVISION: PERFORMANCE JIC is one of the largest business in the Oakbay Investments group by revenue  Never had a government contract  Enables increased production levels and efficiencies with safety as the highest priority  Home to MQA-accredited training academy, training for the wider mining industry 16
  17. 17. ANNUAL RESULTS: 8 SEPTEMBER 2016 In April 2016, Tegeta completed its 2.15 billion Rand acquisition of the Optimum coal mine and other assets from Glencore  Formal approval granted in February 2016 by the Competition Tribunal of South Africa and Tegeta took full operational control Tegeta: grown production and enhanced efficiencies to reduce cost of coal production  Koornfontein coal production increased from 170,000 tonnes to 250,000 tonnes per month between April 2016 and July 2016 and the cost of production per tonne has been reduced by 21%  At Optimum, a second drag line is now operational and a third is expected to come on-stream in Q3 2016  Open cast coal production increased from 180,000 tonnes per month in December 2015, to 440,000 tonnes in July 2016 and cost of production has been reduced by 28%  Underground coal production per month has increased from 370,000 tonnes to 420,000 tonnes and cost of production has been reduced by 10.2% MINING DIVISION: TEGETA ACQUISITION 0 50 100 150 200 250 300 350 400 450 500 Koornfontein Optimum open cast Optimum underground Tonnes(000s) Level of coal production April July 17
  18. 18. ANNUAL RESULTS: 8 SEPTEMBER 2016  Significant opportunities for JIC to cross-sell with existing customers  Division major strategic focus on coal. Platinum demand will remain, but coal has the potential to be a significant driver of growth  Shiva Uranium: well positioned to take advantage of anticipated increase in the global price of uranium - Uranium produced is intended for export, once mining becomes commercially viable  Export quality coal is being produced at both Optimum and Koornfontein, and with increased production both mines are exploring opportunities to open up export markets MINING DIVISION: OUTLOOK 18
  19. 19. MEDIA DIVISION Moegsien Williams Editor in Chief of The New Age
  20. 20. ANNUAL RESULTS: 8 SEPTEMBER 2016 A successful and growing media business led by Editor in Chief, Moegsien Williams, which includes:  The New Age (TNA) national newspaper; and  Africa News Network (ANN7) Launched in 2010, TNA’s strategy is to provide balance to debate around government and government policy, given most of the media landscape in terms of ownership and political inclinations, is little changed since 1994  TNA’s business model has been to achieve its share of private/public advertising revenue  Currently, the position of TNA is supportive of government, whilst remaining editorially independent and scrutinising of the ruling party MEDIA DIVISION: OVERVIEW Differentiated market position  Competitors’ news content output is very urban- focused and opposition-supporting  TNA is much more regionally-focused, reflecting that approx 50% of its readers are rurally located  TNA is sold and distributed in all nine of South Africa’s provinces with six daily regional editions and a bureau office in every province  TNA is the only truly national, broadsheet daily that also has an element of regional focus - front page is frequently different depending on which province it is being read in ANN7, launched in 2013, is broadcast across Africa on DSTV  Network attracts more than 2.3 million monthly viewers  One of the most popular 24 hour news networks in South Africa  ANN7 is present in is three provinces currently  Cadet Academy – since 2012 – has produced on average 40 young journalists per year Since inception, TNA and ANN7 have together created 783 jobs for South Africans 20
  21. 21. ANNUAL RESULTS: 8 SEPTEMBER 2016 ■ Media businesses continuing to grow and generate revenue through innovative new platforms - Revenues of 275.6 million Rand, 10.5% of Oakbay’s revenues - Both businesses are profitable ■ The media businesses generated 78.53 million Rand of advertising revenue from the state which is 27.16% ■ Less than 9% of total government advertising spend is with TNA and ANN7* ■ Challenging operating environment, specifically a general decline in levels of commercial advertising ■ Innovative new platforms such as the ‘TNA Breakfast Briefing’ with SABC and ANN7’s ‘SA Decides’ programmes, have both grown revenue through a mix of government and private sector advertising and sponsorships - Frequently reaches up to 2 million people and is South Africa’s biggest breakfast show - Broadcast across 43 countries in Africa * Source: Nielsen Report 2015-16 MEDIA DIVISION: PERFORMANCE 21
  22. 22. ANNUAL RESULTS: 8 SEPTEMBER 2016 Strategy to continue to be at the forefront of transforming and disrupting the South African media landscape ■ Continue to expand and become increasingly multi-channel ■ TNA focussed on having region-specific editions in all nine provinces, an increase on current six editions across those nine provinces. ■ ANN7 intends to mirror the roll-out model executed by TNA - aggressive hiring process set to increase this to six provinces by early 2017 Address the industry challenge of how to optimally manage both its print and online content, with respect to overheads and the consumption trends of its readers Aspirations to add radio platform to ANN7 broadcast content – clear market opportunity ■ Radio has huge penetration in South Africa - listened to by 87% of the population ■ For every person who uses Facebook in South Africa, there are three radio listeners ■ For every person who reads a newspaper, there are two times as many listening to radio Role to promote South Africa and effect real change that benefits ordinary South Africans MEDIA DIVISION: OUTLOOK 22
  23. 23. STRATEGIC INVESTMENTS Nazeem Howa Chief Executive
  24. 24. ANNUAL RESULTS: 8 SEPTEMBER 2016 ■ Indirect minority shareholding (17%) in VR Laser, a leading manufacturer of steel products for global, blue- chip customers in a range of industries including: defence, mining, rail and transport ■ VR Laser is already a very well-established name, with a 15 year track record - Often the only company who can fulfil contracts to the standard demanded by global, blue-chip companies ■ In the last six months alone, VR Laser has created 100 jobs, taking its total headcount from 150 to 250 ■ Non-government contracts dominate VR Laser’s operations. Non-government work accounted for : - 2014-15: 68% - 2015-16: 47% - 2016 to date: 56% ■ VR Laser’s government revenue in 2015-16 was 118 million Rand, of which Oakbay’s 17% share is 20 million Rand STRATEGIC INVESTMENTS ■ By far the largest contributor of government work to VR Laser is Denel, which contributed 39.1% of revenue (87 million Rand) - Primarily relates to contracts to supply armoured vehicles for African peace keeping missions to the United Nations – UN insisted that the vehicles be manufactured at VR Laser ■ Denel’s latest published revenue in its most recent Annual Report was 5.8 billion Rand ■ In terms of other government revenue (rail), Transnet contributed less than 0.1% ■ The Group also has additional, associated but un- consolidated strategic investments in Islandsite Investments 180 and Confident Concepts. ■ These entities are involved in the equipment leasing and property sectors. They generate total revenues of 189 million Rand, of which zero is generated from Government sources 24
  25. 25. GOVERNMENT REVENUE Nazeem Howa Chief Executive
  26. 26. ANNUAL RESULTS: 8 SEPTEMBER 2016 Revenue split of Government contracts Mining Media Engineering Government revenue attributable to the Group totalled 235 million Rand which accounted for 8.9% of the Group’s revenue GOVERNMENT REVENUE BREAKDOWN Revenue split of Government contracts 26
  27. 27. OUTLOOK Nazeem Howa
  28. 28. ANNUAL RESULTS: 8 SEPTEMBER 2016 Continued focus on our two primary performance indicators: profit and job creation, via:  Disrupting long established and closed industries; and  Planning for the long-term Three strategic imperatives for our business are:  Developing our uranium plan for international export;  Developing an export capacity within our coal mining facilities for which the current coal price is encouraging; and  Establishing a free-to-air presence for our media business GROUP OUTLOOK 28
  29. 29. ANNUAL RESULTS: 8 SEPTEMBER 2016 Q&A 29

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