Unaudited Results For The Six Months Ended 31 August 2017
 
 
PSG Group Limited
 
Incorporated in the Republic of South Africa
 
Registration number: 1970/008484/06
 
JSE Ltd (“JSE”) share code: PSG
 
ISIN code: ZAE000013017
 
(“PSG Group” or “PSG” or “the company” or “the group”)
 
 
PSG Financial Services Limited
 
Incorporated in the Republic of South Africa
 
Registration number: 1919/000478/06
 
JSE share code: PGFP
 
ISIN code: ZAE000096079
 
(“PSG Financial Services”)
 
 
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2017
 
 
• SOTP value of R262.32 per share as at 6 October 2017
 
• Interim dividend up 10% to 138 cents per share
 
• Recurring headline earnings stable at 412 cents per share
 
 
OVERVIEW
 
 
PSG is an investment holding company consisting of underlying investments that operate across a
 
diverse range of industries, which include banking, education, financial services and food and
 
related business, as well as early-stage investments in growth sectors. PSG’s market capitalisation
 
(net of treasury shares) is approximately R54bn.
 
 
PERFORMANCE
 
 
The two key benchmarks in terms of which PSG measures performance are sum-of-the-parts (“SOTP”)
 
value and recurring headline earnings per share as long-term growth in PSG’s SOTP value and share
 
price will depend on, inter alia, sustained growth in the recurring headline earnings per share of
 
our underlying investments.
 
 
SOTP
 
 
The calculation of PSG’s SOTP value is simple and requires limited subjectivity as 91% of the
 
value is calculated using JSE-listed share prices, while other investments are included at
 
market-related valuations. At 31 August 2017, the SOTP value per PSG share was R261.05
 
(28 February 2017: R240.87), representing an 8% increase. At 6 October 2017, it was R262.32 per
 
share. The 5-year compound annual growth rate (“CAGR”) of both PSG’s SOTP value and share price
 
was 31% at 31 August 2017.
 
 
29 Feb 28 Feb 31 Aug 6 Oct
 
2016 2017 2017 2017 Share 5-year
 
Asset/Liability Rm Rm Rm Rm of total CAGR#
 
 
Capitec* 16 820 25 727 31 954 31 689 53% 35%
 
Curro (including Stadio)* 9 773 11 180 8 877 9 653 16% 18%
 
PSG Konsult* 5 441 6 084 7 210 7 250 12% 34%
 
Zeder* 2 815 5 398 4 607 4 382 7% 17%
 
PSG Alpha+ 1 367 1 909 2 510 2 530 4% 23%
 
Dipeo+ 557 812 546 480 1%
 
Other assets
 
Cash^ 2 895 1 513 1 196 1 163 2%
 
Pref investments
 
and loans receivable^ 1 335 2 002 2 128 2 120 4%
 
PSG Corporate++ 1 510
 
Other^ 128 71 69 59 1%
 
Total assets 42 641 54 696 59 097 59 326 100%
 
Perpetual pref funding* (1 309) (1 350) (1 358) (1 304)
 
Other debt^ (949) (949) (950) (957)
 
Total SOTP value 40 383 52 397 56 789 57 065
 
 
Shares in issue (net of
 
treasury shares) (m) 216.3 217.5 217.5 217.5
 
 
SOTP value per share (R) 186.67 240.87 261.05 262.32 31%
 
Share price (R) 173.69 251.43 252.60 246.17 31%
 
 
* Listed on the JSE + SOTP value ++ Valuation ^ Carrying value
 
# Based on share price/SOTP value per share
 
 
Note: PSG’s live SOTP is available at www.psggroup.co.za
 
 
Capitec remains PSG’s largest investment comprising 54% of the total SOTP assets as at 31 August 2017
 
(28 February 2017: 47%), and the major contributor to PSG’s recurring headline earnings.
 
 
RECURRING HEADLINE EARNINGS
 
 
The six-month period under review saw satisfactory recurring headline earnings per share performance
 
from PSG’s core investments offset by Zeder’s weaker performance, being largely invested in the food
 
and related sectors that were negatively affected by particularly tough conditions. Despite Zeder’s
 
performance, PSG’s recurring headline earnings per share remained stable at 412 cents.
 
 
Audited
 
Unaudited Year
 
Six months ended ended
 
Aug-16 Change Aug-17 Feb-17
 
Rm % Rm Rm
 
 
Capitec 538 628 1 164
 
Curro 47 61 96
 
PSG Konsult 132 147 300
 
Zeder 79 27 275
 
PSG Alpha 49 66 133
 
Dipeo (3) (34) (20)
 
PSG Corporate 38 (18) 29
 
Other (mainly pref div income) 51 68 112
 
Recurring headline earnings before funding 931 1.5 945 2 089
 
Funding (net of interest income) (49) (57) (104)
 
Recurring headline earnings 882 0.7 888 1 985
 
Non-recurring items 126 (107) 160
 
Headline earnings 1 008 (22.5) 781 2 145
 
Non-headline items 16 52 17
 
Attributable earnings 1 024 (18.7) 833 2 162
 
 
Non-recurring items comprises:
 
- Unrealised fair value gains/(losses) on
 
Dipeo’s investment portfolio 132 (98) 187
 
- Other (6) (9) (27)
 
126 (107) 160
 
 
Weighted average number of shares in issue
 
(net of treasury shares) (m) 214.2 0.6 215.4 214.2
 
 
Earnings per share (cents)
 
- Recurring headline 411.8 0.1 412.1 926.6
 
- Headline 470.5 (22.9) 362.6 1 001.4
 
- Attributable 477.8 (19.1) 386.4 1 009.0
 
 
Dividend per share (cents) 125.0 10.4 138.0 375.0
 
 
Headline earnings per share decreased by 22.9% to 362.6 cents following Zeder’s lower contribution
 
and unrealised fair value losses incurred on Dipeo’s investment portfolio, as opposed to unrealised
 
fair value gains achieved in the comparative period last year.
 
 
Attributable earnings per share decreased by a smaller margin than headline earnings per share
 
mainly due to non-headline gains made on businesses sold during the period under review.
 
 
SIGNIFICANT TRANSACTIONS
 
 
During the period under review, PSG invested a further R62m in PSG Alpha’s portfolio of early-stage
 
investments.
 
 
During September 2017, PSG Alpha concluded an agreement (subject to regulatory approvals being
 
obtained) to obtain a 50% interest in Evergreen Lifestyle, one of South Africa’s leading providers
 
of retirement living, for R675m. This investment marks a significant new focus area for PSG and one
 
of its biggest initial cash investments to date.
 
 
Following its recent listing and unbundling from Curro, Stadio, the private tertiary education
 
provider, will undertake a rights offer of R640m later in October 2017 to fund growth, which has
 
been fully underwritten by PSG. Stadio will in future be reported on as part of the PSG Alpha
 
investment portfolio.
 
 
CAPITEC (30.7%)
 
 
Capitec is a South African retail bank focused on delivering simplified banking that is both
 
affordable and easy to access through personal service.
 
 
It reported a 17% increase in headline earnings per share for the period under review.
 
 
Capitec is listed on the JSE and its comprehensive results are available at www.capitecbank.co.za.
 
 
PSG KONSULT (61.4%)
 
 
PSG Konsult is a financial services company, focused on providing wealth management, asset
 
management and insurance solutions to clients.
 
 
It reported a 10% increase in recurring headline earnings per share for the period under review.
 
 
PSG Konsult is listed on the JSE and the Namibian Stock Exchange, and its comprehensive results
 
are available at www.psg.co.za.
 
 
CURRO (55.6%)
 
 
Curro is the largest provider of private school education in Southern Africa.
 
 
It reported a 22% increase in headline earnings per share for its six months ended 30 June 2017.
 
 
Curro is listed on the JSE and its comprehensive results are available at www.curro.co.za.
 
 
ZEDER (42.1%)
 
 
Zeder is an investor in the broad agribusiness industry. Its largest investment is a 27% interest
 
in Pioneer Foods, comprising 52% of Zeder’s total SOTP assets.
 
 
It reported a 75% decrease in recurring headline earnings per share for the period under review.
 
 
Both Zeder and Pioneer Foods are listed on the JSE and their respective comprehensive results are
 
available at www.zeder.co.za and www.pioneerfoods.co.za.
 
 
PSG ALPHA (97.4%)
 
 
PSG Alpha serves as incubator to find the businesses of tomorrow. Given its nature, this portfolio
 
is likely to yield volatile earnings, while providing significant optionality.
 
 
It reported a 23% increase in recurring headline earnings per share for the period under review,
 
with most of the investments performing to expectation.
 
 
DIPEO (49%)
 
 
Dipeo, a BEE investment holding company, is 51%-owned by the Dipeo BEE Education Trust of which all
 
beneficiaries are black individuals. Dipeo’s most significant investments include shareholdings in
 
Curro (5.2%), Pioneer Foods (4.3%), Quantum Foods (4.1%), Kaap Agri (20%) and Energy Partners
 
(15.7%). The latter investment totalling R150m was made during the period under review and all
 
investments, apart from those in Curro and Kaap Agri, remain subject to BEE lock-in periods. The
 
Dipeo BEE Education Trust will use its share of the value created in Dipeo to fund black students’
 
education.
 
 
PROSPECTS
 
 
Although Zeder in particular experienced strong head winds during the period under review, we
 
believe PSG’s investment portfolio should continue yielding above-average returns. PSG currently
 
has R1.2bn cash available for further investments.
 
 
DIVIDENDS
 
 
Ordinary shares
 
 
PSG’s policy remains to pay up to 100% of available free cash flow as an ordinary dividend, of
 
which approximately one third is payable as an interim and the balance as a final dividend at
 
year-end. The directors have resolved to declare an interim gross dividend of 138 cents
 
(2016: 125 cents) per share from income reserves for the six months ended 31 August 2017.
 
 
The interim dividend amount, net of South African dividend tax of 20%, is 110.4 cents per share
 
for those shareholders that are not exempt from dividend tax. The number of ordinary shares in
 
issue at the declaration date is 231 449 404, and the income tax number of the company is
 
9950080714.
 
 
The salient dates for this dividend distribution are:
 
 
Last day to trade cum dividend Tuesday, 31 October 2017
 
Trading ex dividend commences Wednesday, 1 November 2017
 
Record date Friday, 3 November 2017
 
Payment date Monday, 6 November 2017
 
 
Share certificates may not be dematerialised or rematerialised between Wednesday, 1 November 2017,
 
and Friday, 3 November 2017, both days inclusive.
 
 
Preference shares
 
 
The directors of PSG Financial Services declared a gross dividend of 438.68 cents per share in
 
respect of the cumulative, non-redeemable, non-participating preference shares for the six months
 
ended 31 August 2017, which was paid on Tuesday, 26 September 2017. The detailed announcement in
 
respect hereof was disseminated on the JSE’s Stock Exchange News Services.
 
 
UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 
 
Unaudited Audited
 
Aug-17 Aug-16 Feb-17
 
6 months 6 months 12 months
 
Condensed consolidated income statement Rm Rm Rm
 
 
Revenue from sale of goods 7 013 7 064 14 429
 
Cost of goods sold (5 894) (5 978) (12 416)
 
Gross profit from sale of goods 1 119 1 086 2 013
 
 
Income
 
Changes in fair value of biological assets 39 115 224
 
Investment income (note 7)* 984 957 1 851
 
Fair value gains and losses (note 7) 1 479 1 912 1 540
 
Fair value adjustment to investment contract
 
liabilities (note 7) (1 194) (1 066) (976)
 
Fair value adjustment to third-party liabilities arising
 
on consolidation of mutual funds (note 7) (1 256) (1 089) (1 239)
 
Commission, school, net insurance and other fee income* 2 999 2 678 5 763
 
Other operating income 198 81 158
 
3 249 3 588 7 321
 
 
Expenses
 
Insurance claims and loss adjustments, net of recoveries (336) (292) (581)
 
Marketing, administration and other expenses (3 499) (3 198) (6 224)
 
(3 835) (3 490) (6 805)
 
 
Net income from associates and joint ventures
 
Share of profits of associates and joint ventures 901 880 1 827
 
Loss on impairment of associates (6)
 
Net (loss)/profit on sale/dilution of interest in associates (20) 11 10
 
881 891 1 831
 
 
Profit before finance costs and taxation 1 414 2 075 4 360
 
Finance costs (256) (251) (474)
 
Profit before taxation 1 158 1 824 3 886
 
Taxation (137) (255) (537)
 
Profit for the period 1 021 1 569 3 349
 
 
Attributable to:
 
Owners of the parent 833 1 024 2 162
 
Non-controlling interests 188 545 1 187
 
1 021 1 569 3 349
 
 
* Reclassified as set out in note 11.
 
 
Unaudited Audited
 
Change Aug-17 Aug-16 Feb-17
 
Earnings per share and number of shares in issue % 6 months 6 months 12 months
 
 
Earnings per share (cents)
 
- Recurring headline 0.1 412.1 411.8 926.6
 
- Headline (note 4) (22.9) 362.6 470.5 1 001.4
 
- Attributable (19.1) 386.4 477.8 1 009.0
 
- Diluted headline (22.6) 354.9 458.5 978.8
 
- Diluted attributable (18.9) 377.9 466.0 986.0
 
 
Number of shares (m)
 
- In issue 231.4 230.8 231.4
 
- In issue (net of treasury shares) 215.4 214.2 215.4
 
- Weighted average 215.4 214.2 214.2
 
- Diluted weighted average 218.3 217.3 216.7
 
 
Unaudited Audited
 
Aug-17 Aug-16 Feb-17
 
6 months 6 months 12 months
 
Condensed consolidated statement of comprehensive income Rm Rm Rm
 
 
Profit for the period 1 021 1 569 3 349
 
Other comprehensive loss for the period, net of taxation (24) (168) (519)
 
Items that may be subsequently reclassified to profit
 
or loss
 
Currency translation adjustments (13) (161) (450)
 
Cash flow hedges (3) (18) (21)
 
Share of other comprehensive income and equity movements
 
of associates (21) 11 (44)
 
Items that may not be subsequently reclassified to
 
profit or loss
 
Gains/(losses) from changes in financial and demographic
 
assumptions of post-employment benefit obligations 13 (4)
 
Total comprehensive income for the period 997 1 401 2 830
 
 
Attributable to:
 
Owners of the parent 795 969 1 974
 
Non-controlling interests 202 432 856
 
997 1 401 2 830
 
 
Unaudited Audited
 
Aug-17 Aug-16 Feb-17
 
Condensed consolidated statement of financial position Rm Rm Rm
 
 
Assets
 
Property, plant and equipment* 8 363 6 732 7 943
 
Intangible assets 3 274 2 912 3 108
 
Biological assets 468 399 486
 
Investment in ordinary shares of associates and
 
joint ventures 13 917 12 719 13 212
 
Investment in preference shares of/loans granted to
 
associates and joint ventures 247 170 144
 
Deferred income tax assets 220 202 194
 
Financial assets linked to investment contracts (note 7) 24 768 22 033 22 561
 
Cash and cash equivalents 55 41 14
 
Other financial assets 24 713 21 992 22 547
 
Other financial assets (note 7)* 28 246 23 925 26 795
 
Inventory 1 565 1 536 1 667
 
Trade and other receivables (note 8) 4 473 4 362 3 838
 
Current income tax assets 80 62 64
 
Cash and cash equivalents 2 182 1 614 2 035
 
Non-current assets held for sale 34 76 14
 
Total assets 87 837 76 742 82 061
 
 
Equity
 
Ordinary shareholders’ equity 16 392 14 328 15 900
 
Non-controlling interests 10 943 10 958 10 900
 
Total equity 27 335 25 286 26 800
 
 
Liabilities
 
Insurance contracts 525 564 544
 
Financial liabilities under investment contracts (note 7) 24 768 22 033 22 561
 
Borrowings 6 236 5 957 5 411
 
Other financial liabilities 104 93 156
 
Third-party liabilities arising on consolidation of
 
mutual funds (note 7) 23 645 17 735 21 394
 
Deferred income tax liabilities 823 762 857
 
Trade and other payables and employee benefit
 
liabilities (note 8) 4 336 4 212 4 281
 
Current income tax liabilities 65 100 57
 
Total liabilities 60 502 51 456 55 261
 
 
Total equity and liabilities 87 837 76 742 82 061
 
 
Net asset value per share (R) 76.09 66.88 73.81
 
Net tangible asset value per share (R) 60.89 53.28 59.38
 
 
* Reclassified as set out in note 11.
 
 
Unaudited Audited
 
Aug-17 Aug-16 Feb-17
 
Condensed consolidated statement of changes Change 6 months 6 months 12 months
 
in equity % Rm Rm Rm
 
 
Ordinary shareholders’ equity at beginning
 
of the period 15 900 13 634 13 634
 
Total comprehensive income 795 969 1 974
 
Issue of shares 1 75
 
Share-based payment costs - employees 33 31 60
 
Net movement in treasury shares 21
 
Transactions with non-controlling interests 203 122 832
 
Dividends paid (540) (428) (696)
 
Ordinary shareholders’ equity at end of the period 16 392 14 328 15 900
 
 
Non-controlling interests at beginning of the period 10 900 10 127 10 127
 
Total comprehensive income 202 432 856
 
Issue of shares 345 964 1 415
 
Share-based payment costs - employees 15 18 27
 
Subsidiaries acquired 14
 
Transactions with non-controlling interests (243) (355) (1 188)
 
Dividends paid (276) (228) (351)
 
Non-controlling interests at end of the period 10 943 10 958 10 900
 
 
Total equity 27 335 25 286 26 800
 
 
Dividend per share (cents)
 
- Interim 10.4 138.0 125.0 125.0
 
- Final 250.0
 
138.0 125.0 375.0
 
 
Unaudited Audited
 
Aug-17 Aug-16 Feb-17
 
6 months 6 months 12 months
 
Condensed consolidated statement of cash flows Rm Rm Rm
 
 
Net cash flow from operating activities
 
Cash (utilised by)/generated from operations (note 5)*^ (414) (296) 302
 
Interest income*^ 803 737 1 431
 
Dividend income* 544 520 1 078
 
Finance costs (208) (241) (433)
 
Taxation paid (197) (299) (553)
 
Net cash flow from operating activities before cash
 
movement in policyholder funds 528 421 1 825
 
Cash movement in policyholder funds* 41 (73) (101)
 
Net cash flow from operating activities 569 348 1 724
 
 
Net cash flow from investing activities (448) (1 051) (1 674)
 
Cash flow from businesses/subsidiaries acquired (note 6.1) (147) (165) (491)
 
Cash flow from consolidation of mutual funds 10 32
 
Cash flow from businesses sold (note 6.2) 27
 
Acquisition of ordinary shares in associates (171) (60) (147)
 
Proceeds from disposal of ordinary shares in associates 10 13
 
Acquisition of property, plant and equipment (621) (593) (1 631)
 
Other investing activities 464 (253) 550
 
 
Net cash flow from financing activities (361) 30 76
 
Dividends paid to group shareholders (540) (428) (696)
 
Dividends paid to non-controlling interests (276) (232) (351)
 
Capital contributions by non-controlling interests 204 756 1 183
 
Acquisition from non-controlling interests (118) (220) (202)
 
Borrowings drawn 589 371 495
 
Borrowings repaid (221) (218) (449)
 
Proceeds from delivery of holding company’s share
 
incentive trust treasury shares 1 1 21
 
Shares issued 75
 
 
Net (decrease)/increase in cash and cash equivalents (240) (673) 126
 
Exchange gains/(losses) on cash and cash equivalents 8 (27) (71)
 
Cash and cash equivalents at beginning of the period 1 056 1 001 1 001
 
Cash and cash equivalents at end of the period** 824 301 1 056
 
 
Cash and cash equivalents consists of:
 
Cash and cash equivalents per the statement of
 
financial position 2 182 1 614 2 035
 
Cash and cash equivalents attributable to equity holders 1 939 1 513 1 946
 
Other clients’ cash and cash equivalents 243 101 89
 
Cash and cash equivalents linked to investment contracts 55 41 14
 
Bank overdrafts attributable to equity holders (included
 
in borrowings) (1 413) (1 354) (993)
 
824 301 1 056
 
 
* These line items are impacted by linked investment contracts and consolidated mutual funds
 
as detailed in note 7.
 
 
** Available cash held at a PSG Group-level is invested in the PSG Money Market Fund. As a
 
result of the group’s consolidation of the PSG Money Market Fund, the cash invested in same
 
is derecognised and all of the fund’s underlying highly liquid debt securities (included in
 
“other financial assets” in the condensed consolidated statement of financial position) are
 
recognised. Third parties’ cash invested in the PSG Money Market Fund are recognised as a
 
payable and included under “third-party liabilities arising on consolidation of mutual funds”.
 
Available cash held at a PSG Group-level and invested in the PSG Money Market Fund amounted
 
to R1.2bn (31 August 2016: R1.7bn; 28 February 2017: R1.5bn) at the reporting date.
 
 
^ Reclassified as set out in note 11.
 
 
Notes to the condensed interim consolidated financial statements
 
 
1. Basis of presentation and accounting policies
 
 
These condensed interim consolidated financial statements have been prepared in accordance with
 
the recognition and measurement principles of International Financial Reporting Standards
 
(“IFRS”) as issued by the International Accounting Standards Board, including IAS 34 Interim
 
Financial Reporting; the SAICA Financial Reporting Guides, as issued by the Accounting Practices
 
Committee; the Financial Reporting Pronouncements, as issued by the Financial Reporting Standards
 
Council; the requirements of the South African Companies Act, 71 of 2008, as amended; and the
 
JSE Listings Requirements.
 
 
The accounting policies applied in the preparation of these condensed interim consolidated
 
financial statements are consistent in all material respects with those used in the prior year’s
 
consolidated annual financial statements. The group also adopted the various other revisions to
 
IFRS which are effective for its financial year ending 28 February 2018. These revisions have not
 
resulted in material changes to the group’s reported results and disclosures in these condensed
 
interim consolidated financial statements.
 
 
In preparing these condensed interim consolidated financial statements, the significant judgements
 
made by management in applying the group’s accounting policies and the key sources of estimation
 
uncertainty were the same as those that applied to the group’s annual financial statements for the
 
year ended 28 February 2017.
 
 
2. Preparation
 
 
These condensed interim consolidated financial statements were compiled under the supervision of
 
the group chief financial officer, Mr WL Greeff, CA (SA), and were not reviewed or audited by
 
PSG Group’s external auditor, PricewaterhouseCoopers Inc. Any reference to future financial
 
performance included in this announcement, has not been reviewed or reported on by the company’s
 
auditor.
 
 
3. PSG Financial Services
 
 
PSG Financial Services is a wholly-owned subsidiary of PSG Group, except for the 17 415 770
 
(31 August 2016: 17 415 770; 28 February 2017: 17 415 770) perpetual preference shares which are
 
listed on the JSE. These preference shares are included in non-controlling interests in the
 
condensed consolidated statement of financial position. No separate financial statements are
 
presented in this announcement for PSG Financial Services as it is the only directly held asset
 
of PSG Group.
 
 
Unaudited Audited
 
Aug-17 Aug-16 Feb-17
 
6 months 6 months 12 months
 
Rm Rm Rm
 
 
4. Headline earnings
 
 
Profit for the period attributable to owners of the parent 833 1 024 2 162
 
Non-headline items
 
Gross amounts (88) (10) (8)
 
Loss on impairment of associates 6
 
Net loss/(profit) on sale/dilution of interest
 
in associates 20 (11) (10)
 
Fair value gain on step-up from associate to subsidiary (39)
 
Net profit on sale of businesses (note 6.2) (80)
 
Net loss on sale/impairment of intangible assets
 
(including goodwill) 7 1 5
 
Net loss/(profit) on sale/impairment of property, plant
 
and equipment 2 (4) 11
 
Non-headline items of associates (33) 4 18
 
Bargain purchase gain (4) (15)
 
Impairment of non-current assets held for sale 16
 
Non-controlling interests 36 (7) (10)
 
Taxation 1 1
 
Headline earnings 781 1 008 2 145
 
 
Unaudited Audited
 
Aug-17 Aug-16 Feb-17
 
6 months 6 months 12 months
 
Rm Rm Rm
 
 
5. Cash (utilised by)/generated from operations
 
 
Profit before taxation 1 158 1 824 3 886
 
Share of profits of associates and joint ventures (901) (880) (1 827)
 
Depreciation and amortisation 247 208 433
 
Investment income* (984) (957) (1 851)
 
Finance costs 256 251 474
 
Working capital changes and other non-cash items (190) (742) (813)
 
Cash (utilised by)/generated from operations* (414) (296) 302
 
 
* Reclassified as set out in note 11.
 
 
6. Businesses/subsidiaries acquired/sold
 
 
6.1 Businesses/subsidiaries acquired
 
 
Businesses/subsidiaries acquired by the group during the period under review included:
 
 
Platchro Holdings (Pty) Ltd (“Platchro”)
 
 
During May 2017, the group, through Provest Holdings (Pty) Ltd (“Provest”), being a subsidiary
 
of PSG Alpha Investments (Pty) Ltd (“PSG Alpha”), acquired 100% of the issued share capital of
 
Platchro for a cash consideration of R125m. Platchro is involved in the mining services industry,
 
offering complementary services to Provest’s existing operations. Goodwill of R74m arose in
 
respect of, inter alia, the workforce, expected synergies, economies of scale and the business’s
 
growth potential.
 
 
The amounts of identifiable net assets of businesses/subsidiaries acquired, as well as goodwill
 
recognised from business combinations during the period under review, can be summarised as
 
follows:
 
 
Unaudited
 
Platchro Other Total
 
Rm Rm Rm
 
 
Identifiable net assets acquired 51 28 79
 
Goodwill recognised 74 28 102
 
Gain on bargain purchase (4) (4)
 
Cash consideration paid 125 52 177
 
 
Cash consideration paid (125) (52) (177)
 
Cash and cash equivalents acquired 27 3 30
 
Cash flow from businesses/subsidiaries acquired (98) (49) (147)
 
 
Transaction costs relating to the business combinations were insignificant and expensed in the
 
income statement.
 
 
The aforementioned business combinations have been provisionally accounted for and do not
 
contain any contingent consideration or indemnification asset arrangements.
 
 
Had the aforementioned businesses combinations been accounted for with effect from 1 March 2017
 
instead of their respective acquisition dates, the condensed consolidated income statement would
 
have reflected additional revenue of R111m and profit for the period of R8m.
 
 
Receivables of R29m are included in the identifiable net assets acquired, which are all
 
considered to be recoverable. The fair value of these receivables approximates its carrying
 
value.
 
 
6.2 Businesses sold
 
 
During July 2017, the group, through Capespan Group Ltd, being a subsidiary of Zeder
 
Investments Ltd (“Zeder”), merged the fruit distribution businesses of two wholly-owned
 
subsidiaries, Capespan Japan Ltd (“Capespan Japan”) and Metspan Hong Kong Ltd (“Metspan”),
 
with that of Joy Wing Mau Asia (“JWM Asia”) in exchange for a 30% equity interest in JWM Asia.
 
 
The amounts of identifiable net assets of businesses sold, as well as the remaining interest
 
recognised during the period under review, can be summarised as follows:
 
 
Unaudited
 
Capespan
 
Japan Metspan Total
 
Rm Rm Rm
 
 
Identifiable net assets derecognised (76) (51) (127)
 
Recognition of investment in ordinary shares of associate 26 26
 
Recognition of loans granted to associate 73 49 122
 
Profit on sale of businesses (80) (80)
 
Cash consideration received (3) (56) (59)
 
 
Cash consideration received 3 56 59
 
Cash and cash equivalents derecognised (18) (14) (32)
 
Cash flow from businesses sold (15) 42 27
 
 
7. Linked investment contracts and consolidated mutual funds
 
 
Linked investment contracts are represented by PSG Life Ltd (an existing subsidiary of
 
PSG Konsult Ltd) clients’ assets held under investment contracts, which are linked to a
 
corresponding liability. Accordingly, the value of policy benefits payable is directly linked to
 
the fair value of the supporting assets and therefore the group is not exposed to the financial
 
risks associated with these assets and liabilities.
 
 
As a result of the group’s consolidation of mutual funds which it controls in accordance with
 
IFRS 10, the group’s investments in these mutual funds have been derecognised and all the funds’
 
underlying assets have been recognised. Third parties’ funds invested in the respective mutual
 
funds are recognised as a payable and included under “third-party liabilities arising on
 
consolidation of mutual funds”.
 
 
The condensed consolidated income statement impact recognised from the assets and liabilities
 
pertaining to the linked investment contracts and consolidated mutual funds are split from the
 
corresponding condensed consolidated income statement line items attributable to the equity
 
holders of the group below:
 
 
Linked
 
investment
 
contracts and
 
consolidated Equity
 
mutual funds holders Total
 
Rm Rm Rm
 
Six months ended 31 August 2017 (unaudited)
 
 
Investment income 758 226 984
 
Fair value gains and losses 1 738 (259) 1 479
 
Fair value adjustment to investment
 
contract liabilities (1 194) (1 194)
 
Fair value adjustment to third-party
 
liabilities arising on consolidation
 
of mutual funds (1 256) (1 256)
 
Various other line items (46) (46)
 
-
 
Six months ended 31 August 2016 (unaudited)
 
 
Investment income 723 234 957
 
Fair value gains and losses 1 489 423 1 912
 
Fair value adjustment to investment
 
contract liabilities (1 066) (1 066)
 
Fair value adjustment to third-party
 
liabilities arising on consolidation
 
of mutual funds (1 089) (1 089)
 
Various other line items (57) (57)
 
-
 
Year ended 28 February 2017 (audited)
 
 
Investment income* 1 398 453 1 851
 
Fair value gains and losses 957 583 1 540
 
Fair value adjustment to investment
 
contract liabilities (976) (976)
 
Fair value adjustment to third-party
 
liabilities arising on consolidation
 
of mutual funds (1 239) (1 239)
 
Various other line items (140) (140)
 
-
 
 
* Reclassified as set out in note 11.
 
 
The condensed consolidated statement of cash flows impact recognised from the assets and
 
liabilities pertaining to the linked investment contracts and consolidated mutual funds are split
 
from the corresponding condensed consolidated statement of cash flows line items attributable to
 
the equity holders of the group below:
 
 
Unaudited
 
Aug-17 Aug-16
 
6 months 6 months
 
Linked Linked
 
investment investment
 
contracts and contracts and
 
consolidated Equity consolidated Equity
 
mutual funds holders Total mutual funds holders Total
 
Rm Rm Rm Rm Rm Rm
 
 
Cash (utilised by)/
 
generated from
 
operations (510) 96 (414) (684) 388 (296)
 
Interest income 496 307 803 427 310 737
 
Dividend income 174 370 544 194 326 520
 
Finance costs (208) (208) (241) (241)
 
Taxation paid (6) (191) (197) (12) (287) (299)
 
Cash movement in
 
policyholder
 
funds 41 41 (73) (73)
 
Net cash flow
 
from operating
 
activities 195 374 569 (148) 496 348
 
Net cash flow
 
from investing
 
activities (448) (448) 11 (1 062) (1 051)
 
Net cash flow
 
from financing
 
activities (361) (361) 30 30
 
Net increase/
 
(decrease) in cash
 
and cash
 
equivalents 195 (435) (240) (137) (536) (673)
 
Exchange gains/
 
(losses) on cash
 
and cash
 
equivalents 8 8 (27) (27)
 
Cash and cash
 
equivalents at
 
beginning of
 
the period 103 953 1 056 281 720 1 001
 
Cash and cash
 
equivalents at
 
end of the period 298 526 824 144 157 301
 
 
Audited
 
Feb-17
 
12 months
 
Linked
 
investment
 
contracts and
 
consolidated Equity
 
mutual funds holders Total
 
Rm Rm Rm
 
 
Cash (utilised by)/generated from operations* (1 236) 1 538 302
 
Interest income* 802 629 1 431
 
Dividend income 375 703 1 078
 
Finance costs (433) (433)
 
Taxation paid (50) (503) (553)
 
Cash movement in policyholder funds (101) (101)
 
Net cash flow from operating activities (210) 1 934 1 724
 
Net cash flow from investing activities 32 (1 706) (1 674)
 
Net cash flow from financing activities 76 76
 
Net (decrease)/increase in cash and cash equivalents (178) 304 126
 
Exchange losses on cash and cash equivalents (71) (71)
 
Cash and cash equivalents at beginning of the year 281 720 1 001
 
Cash and cash equivalents at end of the year 103 953 1 056
 
 
* Reclassified as set out in note 11.
 
 
8. Trade and other receivables and payables
 
 
Included under trade and other receivables are PSG Online broker and clearing accounts of which
 
R1.3bn (31 August 2016: R1.3bn; 28 February 2017: R1.2bn) represents amounts owing by the JSE for
 
trades conducted during the last few days before the reporting date. These balances fluctuate on
 
a daily basis depending on the activity in the markets.
 
 
The control account for the settlement of these transactions is included under trade and other
 
payables, with the settlement to clients taking place within three days after the transaction
 
date. All such balances have been settled accordingly.
 
 
9. Corporate actions
 
 
Apart from the transactions set out in notes 6.1 and 6.2, the group’s most significant corporate
 
actions are detailed in the commentary section of this announcement.
 
 
10. Financial instruments
 
 
10.1 Financial risk factors
 
 
The group’s activities expose it to a variety of financial risks: market risk (including currency
 
risk, fair value risk, fair value interest rate risk and price risk), credit risk and liquidity
 
risk.
 
 
These condensed interim consolidated financial statements do not include all financial risk
 
management information and disclosures set out in the consolidated annual financial statements,
 
and therefore they should be read in conjunction with the group’s consolidated annual financial
 
statements for the year ended 28 February 2017. Risk management continues to be carried out by
 
each entity within the group under policies approved by the respective boards of directors.
 
 
10.2 Fair value estimation
 
 
The group, through PSG Life Ltd, issues linked investment contracts where the value of the policy
 
benefits (i.e. liability) is directly linked to the fair value of the supporting assets, and as
 
such does not expose the group to the market risk relating to fair value movements in the
 
supporting assets.
 
 
The information below analyses financial assets and liabilities, which are carried at fair value,
 
by level of hierarchy as required by IFRS 13. The different levels in the hierarchy are defined
 
below:
 
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
 
- Level 2: input other than quoted prices included within level 1 that is observable for the asset
 
or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
 
- Level 3: input for the asset or liability that is not based on observable market data (that is,
 
unobservable input).
 
 
The carrying value of financial assets and liabilities carried at amortised cost approximates
 
their fair value, while those measured at fair value in the statement of financial position can
 
be summarised as follows:
 
 
Level 1 Level 2 Level 3 Total
 
Rm Rm Rm Rm
 
31 August 2017 (unaudited)
 
 
Assets
 
Derivative financial assets 45 45
 
Equity securities 2 876 592 51 3 519
 
Debt securities 805 2 986 3 791
 
Unit-linked investments 39 904 947 40 851
 
Investment in investment contracts 16 16
 
Closing balance 3 681 43 543 998 48 222
 
 
Liabilities
 
Derivative financial liabilities 58 42 100
 
Investment contracts 23 680 935 24 615
 
Trade and other payables 43 43
 
Third-party liabilities arising on
 
consolidation of mutual funds 23 645 23 645
 
Closing balance - 47 383 1 020 48 403
 
 
31 August 2016 (unaudited)
 
 
Assets
 
Derivative financial assets 76 76
 
Equity securities 2 194 1 420 59 3 673
 
Debt securities 889 1 587 2 476
 
Unit-linked investments 32 964 1 101 34 065
 
Investment in investment contracts 29 29
 
Closing balance 3 083 36 076 1 160 40 319
 
 
Liabilities
 
Derivative financial liabilities 21 68 89
 
Investment contracts 20 731 1 089 21 820
 
Trade and other payables 28 28
 
Third-party liabilities arising on
 
consolidation of mutual funds 17 735 17 735
 
Closing balance - 38 487 1 185 39 672
 
 
28 February 2017 (audited)
 
 
Assets
 
Derivative financial assets 64 64
 
Equity securities 2 257 1 606 50 3 913
 
Debt securities 1 005 1 686 2 691
 
Unit-linked investments 36 545 1 111 37 656
 
Investment in investment contracts 16 16
 
Closing balance 3 262 39 917 1 161 44 340
 
 
Liabilities
 
Derivative financial liabilities 38 114 152
 
Investment contracts 21 317 1 099 22 416
 
Trade and other payables 38 38
 
Third-party liabilities arising on
 
consolidation of mutual funds 21 394 21 394
 
Closing balance - 42 749 1 251 44 000
 
 
The following table presents changes in level 3 financial instruments during the respective
 
periods:
 
 
Unaudited Audited
 
Aug-17 Aug-16 Feb-17
 
Assets Liabilities Assets Liabilities Assets Liabilities
 
Rm Rm Rm Rm Rm Rm
 
 
Opening balance 1 161 1 251 1 403 1 369 1 403 1 369
 
Additions 256 277 85 111 193 295
 
Disposals (441) (528) (351) (323) (454) (449)
 
Fair value adjustments 22 20 23 25 19 36
 
Other movements 3
 
Closing balance 998 1 020 1 160 1 185 1 161 1 251
 
 
Unit-linked investments represent the largest portion of the level 3 financial assets and relate
 
to units held in hedge funds that are priced monthly. The prices are obtained from the asset
 
managers of the particular hedge funds. These are held to match investment contract liabilities,
 
and as such any change in measurement would result in a similar adjustment to investment contract
 
liabilities.
 
 
Derivative financial assets, equity securities, debt securities, unit-linked investments and
 
investment in investment contracts are all included in “other financial assets” in the condensed
 
consolidated statement of financial position, while “other financial liabilities” comprises
 
mainly derivative financial liabilities.
 
 
There have been no significant transfers between level 1, 2 or 3 during the period under review,
 
nor were there any significant changes to the valuation techniques and inputs used to determine
 
fair values. Valuation techniques and main inputs used to determine fair value for financial
 
instruments classified as level 2 can be summarised as follows:
 
 
Instrument Valuation technique Main inputs
 
 
Derivative financial assets Exit price on recognised Not applicable
 
and liabilities over-the-counter platforms
 
Debt securities Valuation model that uses the Bond interest rate curves,
 
market inputs (yield of issuer credit ratings and
 
benchmark bonds) liquidity spreads
 
Unit-linked investments Quoted exit price provided Not applicable - daily
 
by the fund manager prices are publicly
 
available
 
Investment in investment Prices are obtained from the Not applicable - prices
 
contracts insurer of the particular provided by registered
 
investment contract long-term insurers
 
Investment contracts Current unit price of underlying Not applicable
 
unitised financial asset that
 
is linked to the liability,
 
multiplied by the number of
 
units held
 
Third-party liabilities arising on Quoted exit price provided by Not applicable - daily
 
consolidation of mutual funds the fund manager prices are publicly
 
available
 
 
11. Reclassification of prior year figures
 
 
Leasehold improvements
 
 
Leasehold improvements made by a subsidiary, Curro Holdings Ltd, have been reclassified from
 
“other financial assets” to “property, plant and equipment”, since these leasehold improvements
 
are not recoverable from the landlord. This reclassification had no impact on previously reported
 
equity, liabilities, profitability or cash flows; however, it had the following impact on the
 
condensed consolidated statement of financial position at 28 February 2017:
 
 
Previously Now
 
reported reported Change
 
Statement of financial position Rm Rm Rm
 
 
Property, plant and equipment 7 703 7 943 240
 
Other financial assets 27 035 26 795 (240)
 
-
 
 
Fee income
 
 
Fees earned by a subsidiary of PSG Konsult Ltd, a subsidiary, have been reclassified from
 
“investment income” to “commission, school, net insurance and other fee income”, in order to
 
reflect the nature of the fees earned more accurately. This reclassification had no impact on
 
previously reported assets, equity, liabilities or profitability; however, it had the following
 
impact on the condensed consolidated income statement and condensed consolidated statement of
 
cash flows for the year ended 28 February 2017:
 
 
Previously Now
 
reported reported Change
 
Income statement Rm Rm Rm
 
 
Investment income 1 896 1 851 (45)
 
Commission, school, net insurance and other fee income 5 718 5 763 45
 
-
 
 
Statement of cash flows
 
 
Net cash flow from operating activities
 
Cash generated from operations 257 302 45
 
Interest income 1 476 1 431 (45)
 
-
 
 
12. Segment report
 
 
The group’s classification into seven reportable segments, namely: Capitec, Curro, PSG Konsult,
 
Zeder, PSG Alpha, Dipeo and PSG Corporate, remains unchanged. These segments represent the major
 
investments of the group. The services offered by PSG Konsult consist of financial advice, stock
 
broking, asset management and insurance, while Curro offers private education services. The other
 
segments offer financing, banking, investing and advisory services. All segments operate
 
predominantly in the Republic of South Africa. However, the group has exposure to operations
 
outside the Republic of South Africa through, inter alia, Curro, Zeder’s investments in Capespan
 
Group Ltd, Zaad Holdings Ltd and Agrivision Africa, and PSG Alpha’s investment in CA Sales
 
Holdings (Pty) Ltd.
 
 
Intersegment income represents income derived from other segments within the group which is
 
recorded at the fair value of the consideration received or receivable for services rendered in
 
the ordinary course of the group’s activities. Intersegment income mainly comprises intergroup
 
management fees charged in terms of the respective management agreements, intergroup advisory
 
fees and interest income.
 
 
Headline earnings comprise recurring and non-recurring headline earnings. Recurring headline
 
earnings are calculated on a proportional basis, and include the proportional headline earnings
 
of underlying investments, excluding marked-to-market adjustments and once-off items. The result
 
is that investments in which the group holds less than 20% and which are generally not equity
 
accountable in terms of accounting standards, are equity accounted for the purpose of calculating
 
the consolidated recurring headline earnings. Non-recurring headline earnings include once-off
 
gains and losses and marked-to-market fluctuations, as well as the resulting taxation charge on
 
these items.
 
 
SOTP is a key valuation tool used to measure PSG’s performance. In determining SOTP, listed
 
assets and liabilities are valued using quoted market prices, whereas unlisted assets and
 
liabilities are valued using appropriate valuation methods. These values will not necessarily
 
correspond with the values per the condensed consolidated statement of financial position since
 
the latter are measured using the relevant accounting standards which include historical cost
 
and the equity method of accounting.
 
 
The chief operating decision-maker (the PSG Group Executive Committee) evaluates the following
 
information to assess the segments’ performance:
 
 
Recurring
 
Inter- headline Non-
 
segment earnings recurring
 
Six months ended Income income (segment headline Headline SOTP
 
31 August 2017 ** ** profit) earnings earnings value^
 
(unaudited) Rm Rm Rm Rm Rm Rm
 
 
Capitec* 628 628 31 954
 
Curro 1 113 61 61 8 877
 
PSG Konsult 2 098 147 147 7 210
 
Zeder 4 627 27 4 31 4 607
 
PSG Alpha 2 591 66 2 68 2 510
 
Dipeo (255) (34) (98) (132) 546
 
PSG Corporate 35 (7) (18) (18)
 
Funding 93 (33) (57) (15) (72) (2 308)
 
Other 68 68 3 393
 
Total 10 302 (40) 888 (107) 781 56 789
 
Non-headline items 52
 
Earnings attributable to
 
non-controlling interests 188
 
Taxation 137
 
Profit before taxation 1 158
 
 
Recurring
 
Inter- headline Non-
 
segment earnings recurring
 
Six months ended Income income (segment headline Headline SOTP
 
31 August 2016 ** ** profit) earnings earnings value^
 
(unaudited) Rm Rm Rm Rm Rm Rm
 
 
Capitec* 538 538 20 673
 
Curro 890 47 47 9 519
 
PSG Konsult 1 967 132 132 5 687
 
Zeder 5 073 79 (3) 76 3 591
 
PSG Alpha 2 172 49 5 54 1 729
 
Dipeo 417 (3) 132 129 689
 
PSG Corporate 131 (96) 38 38 1 418
 
Funding 98 (49) (8) (57) (2 317)
 
Other 51 51 3 580
 
Total 10 748 (96) 882 126 1 008 44 569
 
Non-headline items 16
 
Earnings attributable to
 
non-controlling interests 545
 
Taxation 255
 
Profit before taxation 1 824
 
 
Recurring
 
Inter- headline Non-
 
segment earnings recurring
 
Year ended Income income (segment headline Headline SOTP
 
28 February 2017 ** ** profit) earnings earnings value^
 
(audited) Rm Rm Rm Rm Rm Rm
 
 
Capitec* 1 164 1 164 25 727
 
Curro 1 834 96 96 11 180
 
PSG Konsult 3 799 300 300 6 084
 
Zeder 10 522 275 (4) 271 5 398
 
PSG Alpha 4 781 133 3 136 1 909
 
Dipeo 594 (20) 187 167 812
 
PSG Corporate 155 (102) 29 (26) 3
 
Funding 193 (26) (104) (104) (2 299)
 
Other 112 112 3 586
 
Total 21 878 (128) 1 985 160 2 145 52 397
 
Non-headline items 17
 
Earnings attributable to
 
non-controlling interests 1 187
 
Taxation 537
 
Profit before taxation 3 886
 
 
Unaudited Audited
 
Aug-17 Aug-16 Feb-17
 
6 months 6 months 12 months
 
Rm Rm Rm
 
 
Reconciliation of segment revenue to IFRS revenue:
 
Segment revenue as stated above:
 
Income 10 302 10 748 21 878
 
Intersegment income (40) (96) (128)
 
Less:
 
Changes in fair value of biological assets (39) (115) (224)
 
Fair value gains and losses (1 479) (1 912) (1 540)
 
Fair value adjustment to investment contract liabilities 1 194 1 066 976
 
Fair value adjustment to third-party liabilities arising
 
on consolidation of mutual funds 1 256 1 089 1 239
 
Other operating income (198) (81) (158)
 
IFRS revenue*** 10 996 10 699 22 043
 
 
Non-recurring headline earnings comprises:
 
Non-recurring items from investments (92) 134 186
 
Other losses (15) (8) (26)
 
(107) 126 160
 
 
* Equity method of accounting applied.
 
** The total of “income” and “intersegment income” comprises the total of “revenue from sale
 
of goods” and “income” per the condensed consolidated income statement.
 
*** IFRS revenue comprises “revenue from sale of goods”, “investment income” and “commission,
 
school, net insurance and other fee income” as per the condensed consolidated income
 
statement.
 
^ SOTP is a key valuation tool used to measure the group’s performance, but does not
 
necessarily correspond to net asset value.
 
 
13. Capital commitments, contingencies and suretyships
 
 
The group’s most significant capital commitments are in respect of:
 
- Curro’s 2017 investment programme, which includes the construction of seven new campuses to
 
the value of R600m and the expansion of existing campuses to the value of R900m;
 
- Stadio’s committed business acquisitions (subject to certain conditions precedent) of R540m
 
and the expansion of existing campuses to the value of R130m; and
 
- PSG Konsult’s conclusion of an agreement during September 2017 to acquire the commercial and
 
industrial insurance brokerage business of Absa Insurance and Financial Advisers (Pty) Ltd,
 
with its business made up of 102 advisers and having in excess of 32,000 clients.
 
 
Apart from the aforementioned, contingencies and suretyships similar to those disclosed in the
 
group’s annual financial statements for the year ended 28 February 2017 remained in effect
 
during the period under review.
 
 
14. Related-party transactions
 
 
Related-party transactions similar to those disclosed in the consolidated annual financial
 
statements for the year ended 28 February 2017 took place during the period under review.
 
 
15. Events subsequent to the reporting date
 
 
No material event, apart from those already disclosed in the commentary section of this
 
announcement, occurred between the reporting date and the date of approval of these condensed
 
interim consolidated financial statements.
 
 
On behalf of the board
 
 
Jannie Mouton Piet Mouton Wynand Greeff
 
Chairman Chief Executive Officer Chief Financial Officer
 
 
Stellenbosch
 
11 October 2017
 
 
DIRECTORS:
 
JF Mouton (Chairman)+, PE Burton^^, ZL Combi^, FJ Gouws+, WL Greeff (CFO)*, JA Holtzhausen*,
 
MJ Jooste+ (Alt: TLR de Klerk), B Mathews^, JJ Mouton+, PJ Mouton (CEO)*, CA Otto^
 
* Executive + Non-executive ^ Independent non-executive ^^ Lead independent director
 
 
During October 2017, Mr TLR de Klerk was nominated to serve in Mr AB la Grange's stead as
 
alternate director to Mr MJ Jooste.
 
 
COMPANY SECRETARY AND REGISTERED OFFICE:
 
PSG Corporate Services (Pty) Ltd, 1st Floor Ou Kollege, 35 Kerk Street, Stellenbosch, 7600;
 
PO Box 7403, Stellenbosch, 7599
 
 
TRANSFER SECRETARY:
 
Computershare Investor Services (Pty) Ltd, Rosebank Towers, 15 Biermann Avenue, Rosebank,
 
2196; PO Box 61051, Marshalltown, 2107
 
 
SPONSOR:
 
PSG Capital
 
 
AUDITOR:
 
PricewaterhouseCoopers Inc
 
Date: 11/10/2017 01:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
 
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