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
|
|
|
|
|
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
|
Figures in
R
|
|
Group
31
August
2024
|
Group
29
February
2024
|
Group
31
August
2023 -
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.
|
Figures in
R
|
|
|
Group
31
August
2024
|
Group
29
February
2024
|
Group
31 August 2023
- restated*
|
|
|
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
R
31 August 2024
|
2024
|
- restated*
|
|
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)
|
|
|
|
532,516
|
|
(5,303,571}
|
(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 *
|
|
0.03
|
|
(0.36)
|
(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)
|
|
|
|
532,516
|
|
(5,303,571}
|
(4,069,070}
|
Statement of Cash
Flows
|
|
Group 6 month
period ended
|
|
Group 12 month
period ended
29 February
|
Group
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
|
