TISO BLACKSTAR GROUP SE - Unaudited Interim Results For The Six Months Ended 31 December 2016

2017-03-20 09:00:00

TBG 201703200007A
Unaudited Interim Results For The Six Months Ended 31 December 2016

Tiso Blackstar Group SE
Unaudited Interim Results
For the six months ended 31 December 2016

Incorporated in Malta Company number SE 4
Registered as an external company with limited liability in the
Republic of South Africa under registration number
2011/008274/10
Share code: TBGR or TBG
ISIN: MT0000620113
('Tiso Blackstar' or the 'Company' or the 'Group')

Highlights for the interim period ended 31 December 2016

-   Results presented on a consolidated basis for the first time due to change in status from being an
    Investment Entity

-   Significant progress made in implementation of new strategy as a media focussed business
    including renaming of Times Media Group to Tiso Blackstar Group

-   In December 2016, announcement of sale of 22.9% interest in Kagiso Tiso Holdings for R1.5
    billion (GBP90 million) - expected to close May 2017

-   Consolidated turnover increased to R4.5 billion (GBP253 million) from R4.3 billion (GBP206 million)

-   Consolidated EBITDA increased to R270 million (GBP15 million) from R249 million (GBP12 million)

-   Times Media acquisition finance reduced from R730 million (GBP43 million) to R669 million (GBP39
    million) over the period

-   Tiso Blackstar head office acquisition finance reduced from R414 million (GBP24 million) to R395
    million (GBP23 million)

-   Interim dividend of 4.47275 cents (0. 28465 pence) per share

-   Proposed special dividend of R40 million (GBP2.5 million) on successful closure of KTH sale

-   From 1 July 2016 to date, Tiso Blackstar bought back R13 million (GBP0.7 million) worth of shares,
    currently held in treasury

-   Approval received to transfer the listing from Altx to the JSE Main Board subject to shareholder
    approval of the Company's Articles of Association amendments to comply with JSE Regulations

-   Tiso Blackstar Group is a global media company with roots in Africa, operating market-leading 
    newspaper, broadcast, digital and mobile properties focused on providing quality content and 
    services to its varied audiences. The Group has strong exposure to the rapidly growing digital, 
    broadcast and mobile markets, with a leading position in South Africa and a broad footprint across Kenya, 
    Ghana and Nigeria.    

Overview

The business has made significant progress in implementing the strategy of becoming a media and
related services group and these results reflect the positive effects of this new focus. The interim
results mark the first time that Tiso Blackstar has reported results on a consolidated basis.

Our core media operations were able to grow their earnings for the period despite difficult trading
conditions. This is the result of the repositioning of the business by reducing the legacy cost base and
implementing a more commercial, efficient and multi-platform business model.

During the period, we also announced the sale of our non-core 22.9% interest in Kagiso Tiso Holdings
Proprietary Limited ('KTH') for R1.5 billion (GBP90 million) which is expected to close in May 2017. The
Group's acquisition finance was reduced substantially over the period under review, and we envisage
repaying all of the Tiso Blackstar head office debt in May 2017.

The move to our new premises in Johannesburg in April 2017 will facilitate a far more integrated news
gathering and production process, resulting in further savings. The new newsroom will also allow for
the integration of other digital and print functions.

Performance review

Effective 1 July 2016, there was a change in the Group's status from an Investment Entity as defined
in IFRS 10 and the subsidiaries Times Media Group Proprietary Limited ('TMG'), Consolidated Steel
Industries Proprietary Limited ('CSI'), Robor Proprietary Limited ('Robor'), and the property
subsidiaries are no longer carried at fair value but rather accounted for as deemed acquisitions of
subsidiaries on 1 July 2016 and consolidated from this date forward. The net identifiable assets of
these subsidiaries have been recognised on balance sheet at fair value on 1 July 2016 resulting in
goodwill being recognised. Investments in associates, Radio Africa Limited ('RAG' or 'Radio Africa
Group'), Multimedia Group Limited ('MMG' or 'Multimedia Group') and Cooper Communications
Limited ('Coopers'), which were previously held at fair value have been equity accounted from 1 July
2016.

In accordance with IFRS, the comparative periods ended 31 December 2015 and 30 June 2016 have
not been restated and are disclosed on a fair value basis as has been previously reported. For this
reason the comparative financial statements are separately disclosed from the current interim
statements.

Segmental review

To assist shareholders in assessing the Group's performance over a period of time, pro forma
information in the form of consolidated comparatives have been prepared for the segmental analysis
on the assumption that Tiso Blackstar's holdings in these subsidiaries and associates was the same
in the comparative periods as for the current reporting period ended 31 December 2016.

                                                          Unaudited       Pro forma       Pro forma
                                                         Six months      Six months   Twelve months
                                                              ended           ended           ended
                                                        31 December     31 December         30 June
                                                               2016            2015            2016
                                                              R'000           R'000           R'000
                                    
Revenue                                    
Media                                                     1,304,728       1,408,456       2,699,294
Retail Solutions                                            865,148         904,753       1,628,806
CSI                                                       1,249,706         972,248       1,928,257
Robor                                                     1,114,768         992,319       2,271,893
                                                          4,534,350       4,277,776       8,528,250
                                    
EBITDA                                    
Media                                                        91,759          86,395         155,614
Retail Solutions                                            136,714         128,459         206,606
CSI                                                          45,883          39,374          58,959
Robor                                                         3,012          14,439          87,648
Other                                                       (7,832)        (20,078)        (31,134)
                                                            269,536         248,589         477,693

Media

Media reflected the positive effects of the restructuring of the business over the past 18 months, with
half-year EBITDA up 6.2% on the prior interim period to R91.8 million (GBP5.1 million).

The traditional media business (Newspapers, Magazines, Digital and Distribution) grew EBITDA
earnings by 16.7% to R86.9 million (GBP4.9 million) from the prior six month comparative period. The
combination of cost reductions and the introduction of new innovative revenue streams helped drive
significant growth in earnings in flagship titles such as Sunday Times and Business Day, while
magazines, supplements, events, digital and mobile all helped broaden the revenue base.

The growth in earnings came at the same time as a significant investment in digital, which reflected
the audience growth required to deliver significant future revenues. The company's large and high
quality digital audience is well placed to capture a greater share in a growing digital advertising
market. The focus on maintaining EBITDA margins during the restructuring and transition phase has
paid off, with a 1.6% improvement in the six month period.

The group's newspapers continued to grow their advertising market share rising to 25.9% in 2016
from 25.4% the year before. These products recorded declines in circulation, largely due to a
managed reduction in unprofitable or lower yielding distribution into non-core markets. Circulation has
stabilised in core markets and in some areas is now showing growth.

Magazines produced almost 40% earnings growth off the back of a 7% increase in revenues,
supported by new subscriber products. The business is also significantly more agile and able to
respond quickly to market changes.

The Broadcast and Content businesses produced solid improvement across most sectors, specifically
in television and radio, although films distribution was impacted by difficult market conditions and
dragged overall earnings lower. Music continues to trade profitably in a fast changing market.

TV production business Ochre showed strong growth having built a solid pipeline of contracts for
various broadcasters, while channels business One Africa Television performed well in all areas
except its motoring channel which was impacted by the weak motoring sector.

The company's two fledgling local stations, Vuma in KZN and Rise in Mpumalanga, both improved on
prior year performance, with revenue increasing by 25% and 54% respectively.

The majority-held investment Smartcall Technology Solutions Proprietary Limited ('STS'), one of SA's
biggest mobile content providers, grew revenues 34.0% and EBITDA 61.2% compared to the
previous six month period, building its presence in the Southern African region and producing
consistent earnings growth.

Retail Solutions

The Hirt & Carter Group ('H&C') continues to offer a strong value proposition to customers who are
looking to reduce their overall cost of marketing through the addition of technology, innovation and
leveraging the underlying efficiencies created.

During the period, H&C grew earnings and improved margins. H&C Software has been implementing
new clients during the period delivering a 40% growth in billings. H&C is in the process of setting up a
new division called Hive Digital, which will focus on delivering digital solutions to customers.
Economic pressures continue to affect customers, which in turn affects our core retail clients.

Uniprint, performed well in the six month period despite very difficult trading conditions, including
volatility of the currency and reduced volume experienced by Uniprint customers due to lower
consumer demand. However, despite the trading conditions, Uniprint grew its EBITDA slightly over
the prior period.

Uniprint acquired Triumph Printing and Packaging, a folding carton specialist business, in October 2016.  
This, consolidated with Uniprint's smaller Packaging business will result in cost savings and create economies of scale.  
The folding carton market is a growth segment and will enhance our product offering.

African Investments (investments in associates)

Our interests in East and West Africa Radio investments include market leading TV and radio
interests in Ghana and Kenya, two of the most exciting growth markets north of South Africa. Tiso
Blackstar holds a 49% interest in Radio Africa Group in Kenya which operates three of the top five
radio stations in Nairobi and has a Digital Terrestrial Television ('DTT') operation with strategic
partners. Multimedia Group, in which the Group holds a 32.2% interest, is situated in Ghana and
operates three of the top six radio stations and a broad reaching free-to-air ('FTA') television platform
and channels.

Multimedia Group produced strong earnings growth of over 200% in its full year to December 2016,
driven principally by a strong turnaround in its TV operations. Radio Africa Group reported a 25%
decline in EBITDA at half-year as a result of its investment into TV and economic uncertainty ahead of
national elections this year.

In 2016, Tiso Blackstar invested in Coopers which includes a newly launched Nigerian radio station
called Lagos Talks on 91.3 FM. Lagos Talks operates in the Talk Format and is focused on creating
and encouraging conversations about issues that affect all residents of Lagos. The station also holds
the Audio rights for the English Premier League. The launch of the station has been a huge success.
Tiso Blackstar holds an effective 36.5% shareholding in Lagos Talk.

Robor

Tough economic conditions resulted in EBITDA declining despite revenue growing to R1.1 billion (GBP0.6 million).  
Anticipated completion of delayed project work should improve results in the second half of the financial year.

Consolidated Steel Industries

CSI performed particularly well in an exceptionally tough operating environment. Revenue grew to
R1.2 billion (GBP0.1 billion) mainly through market share growth through strategy execution.

Financial review

Tiso Blackstar generated a profit of R39.8 million (GBP2.2 million) for the six months ended 31 December
2016.

Other gains (losses) of R23.0 million (GBP1.3 million) mainly comprise of the following: a R30.0 million
(GBP1.7 million) profit on disposal of property, plant and equipment; a R12.2 million (GBP0.7 million) gain
arising on step up acquisitions from associates to subsidiaries; a R8.2 million (GBP0.5 million) foreign
exchange loss arising on translation of foreign investments and intergroup loans fixed in foreign
currency; and exceptional non recurring expenses of R9.2 million (GBP0.5 million).

Share of profit of associates of R1.0 million (GBP0.05 million) comprises the Group's share of profits in
RAG, MMG and Coopers. Profit from discontinued operations, net of taxation of R12.1 million (GBP0.7
million) includes the KTH dividend received as well KTH directors' fees earned.

Other comprehensive loss of R45.5 million (GBP0.4 million) recognised directly to equity (namely the
Foreign Currency Translation Reserve) arose on translation of CSI's African subsidiaries and the
Group's African based associates to Rands.

The investment in KTH held at fair value less costs to sell of R1.5 billion (GBP90 million) is disclosed as
an asset held for sale. The related acquisition debt of R395.0 million (GBP23.3 million) which will be
settled on receipt of the proceeds on disposal in May 2017, is separately disclosed under current
liabilities.

Bank overdrafts and other short term borrowing facilities of R895.5 million (GBP52.8 million) include the
working capital facilities held by trading subsidiaries. Tiso Blackstar generated cash from operations
of R281.3 million (GBP15.7 million) during the reporting period.

Cash out flow of R611.3 million (GBP31.6 million) on acquisition of subsidiaries mainly comprises the net
cash balances and other short term borrowing facilities of the subsidiaries (TMG, CSI and Robor) of
R589.2 million (GBP30.2 million) on 1 July 2016. Borrowings of R190.0 million (GBP10.6 million) were repaid
(including repayment of finance leases and instalment sale liabilities) during the current reporting
period.

During the current reporting period, the Company repurchased a total of 1,153,589 Tiso Blackstar
shares in the open market at a total cost of R10.7 million (GBP0.6 million). At 31 December 2016, the
Company held 2,221,514 treasury shares representing 0.8% of the issued share capital. A dividend
of R12.0 million (GBP0.7 million) was paid to shareholders in January 2017 in respect of the prior
financial year.

Dividends

The Company places emphasis on making dividend payments on an interim and final basis and the
Tiso Blackstar Board has approved an interim dividend of 4.47275 South African cents (0.28465 pence) per
share. The exchange rates have been fixed for the calculation of the Euro and Pounds Sterling
equivalents based on the closing exchange rates on Thursday, 16 March 2017 of EUR1=ZAR13.704
and GBP1=ZAR15.713.

The interim dividend will be paid from income reserves in accordance with the salient dates and times
set out below:

Last day to trade on the South African register                              Tuesday, 4 April 2017
Trading ex-dividend commences on the South African register                Wednesday, 5 April 2017
Trading ex-dividend commences on the UK register                            Thursday, 6 April 2017
Record date for shareholders recorded on the UK and South African
registers                                                                     Friday, 7 April 2017
Date of payment                                                                 Monday, 8 May 2017

Share certificates may not be dematerialised or rematerialised between Wednesday, 5 April 2017
and Friday, 7 April 2017, both days inclusive, and transfers between the UK register and the South
African register may not take place between Monday, 20 March 2017 and Friday, 7 April 2017, both
days inclusive. Dividend tax will be withheld from the amount of the gross dividend of 4.47275 South
African cents per share paid to South African shareholders at the rate of 20% unless a shareholder
qualifies for exemption. After the dividend tax has been withheld, the net dividend will be 3.57820
South African cents per share. There are no other taxes (foreign or otherwise) to be withheld from the
dividend.

The Company had a total of 268,291,260 shares in issue (which includes 2,221,514 shares held in
treasury) at the date on which the dividend was announced, 20 March 2017. The dividend will be
distributed by Tiso Blackstar Group SE (Malta tax registration number 995944033) and is regarded
as a foreign dividend from a South African perspective.

In addition to the above, a special dividend of R40.0 million (GBP2.5 million*) has been approved by the
Board to be paid to shareholders conditional on completion of the KTH sale, and in due course
shareholders will receive the relevant information regarding the special dividend.

* Pounds sterling equivalent provided for disclosure purposes determined using the closing exchange rates on Thursday, 
  16 March 2017 as noted above. Special dividend per share to be determinded on declaration date based on the number of 
  shares in issues.


Black Economic Empowerment

Tiso Blackstar remains committed to transformation. TMG was proud to obtain a Level Three
Contributor status and more than 51% black ownership with the revised Broad-Based Black Economic
Empowerment Codes of Good practice ('B-BBEE') which came into effect on 1 May 2015. Refer to the 
detailed investor presentation available on the website for further information.

Transfer of listing to the Main Board of the JSE Limited

The Company has received approval from the JSE Limited ('JSE') to transfer its listing from a
secondary listing on the Alternative Exchange of the JSE ('Altx') to a dual primary listing on the Main
Board of the JSE. The approval is subject to the Company's Articles of Association being amended
to comply with the JSE Regulations and the successful migration of the Company to the United
Kingdom.

This will result in the Company having a dual primary listing on both AIM and the JSE Main Board,
which the Board believes will widen the Company's potential investor base, develop the Company's
governance framework and facilitate the Company's longer term growth ambitions.

An Extraordinary General Meeting ('EGM') will be requisitioned in order for shareholders to approve
these amendments to the Articles of Association. At the same EGM, the Company will propose a
long-term incentive scheme for employees of the Group. This scheme will aim to incentivise, attract
and retain key employees and align their interests with that of shareholders.

It is anticipated that the migration, the EGM and the Main Board listing will be completed before the
end of June 2017. Further information will be announced in relation to these matters in due course.

Outlook

The Company has laid a solid foundation for sustainable growth, with new diversified revenues and
stabilised core businesses well set to take advantage of any improvements in the South African
economy. Once Tiso Blackstar receives the proceeds from the sale of the KTH shareholding, the
balance sheet will be significantly strengthened and interest costs will reduce substantially.

The core businesses have performed satisfactorily to date in 2017 with key revenue streams above
prior year and earnings growth continuing. The transformation of the business into a multi-platform
diversified media company is proving successful and our market-leading brands continue to provide
strong cash flows to support future growth.

Highlights so far in 2017 include the successful launch and take-up of a paywall for our business titles
Business Day and Financial Mail, continued growth in advertising in our key products, and growth in
contractual income for our Retail Solutions business.

The Group intends to pay a special dividend of R40 million (GBP2.5 million*) once KTH sale proceeds
have been received.

We are currently looking at acquisition opportunities both in South Africa and internationally that
should add to the earnings of the Group.

Shareholders are advised that Tiso Blackstar has a detailed investor presentation which will be available
on the Company's website www.tisoblackstar.com from 22 March 2017.


AD Bonamour                                                                       DKT Adomakoh
Non-executive Director                                                            Non-executive Chairman

20 March 2017

Interim condensed consolidated statements of income and other comprehensive income

   Six months                                                                                          Six months
        ended                                                                                               ended
  31 December                                                                                         31 December
         2016                                                                                                2016
    Unaudited                                                                                           Unaudited
        R'000                                                                             Notes           GBP'000

    4,534,350    Revenue                                                                                  253,334
  (3,684,806)    Cost of sales                                                                          (205,870)
      849,544    Gross profit                                                                              47,464
    (605,633)    Operating expenses                                                                      (33,836)
    (117,017)    Depreciation, amortisation and straight - lining of leases charge                        (6,536)
       19,534    Other income                                                                               1,092
      146,428    Operating profit                                                                           8,184
       23,047    Other gains (losses)                                                                       1,279
      169,475    Net profit                                                                                 9,463
        4,211    Finance income                                                                               235
    (118,327)    Finance costs                                                                3           (6,611)
          995    Share of profit of associates and joint ventures                                              56
       56,354    Profit before taxation                                                                     3,143
     (28,679)    Taxation                                                                                 (1,602)
       27,675    Profit from continuing operations                                                          1,541
       12,136    Profit from discontinued operation, net of taxation                          4               678
       39,811    Profit for the period                                                                      2,219
 
                 Profit (Loss) for the period attributable to:
       46,745    Equity holders of the Group                                                                2,606
      (6,934)    Non-controlling interest                                                                   (387)
       39,811                                                                                               2,219

       39,811    Profit for the period                                                                      2,219
                 Other comprehensive (loss) income, net of taxation - items that may
     (45,522)    subsequently be reclassified to profit and loss:                             5            25,825
     (45,522)    Currency translation differences on the translation of foreign operations                    418
                 Currency translation differences on the translation of Rand denominated
            -    Group entities to presentational currency                                                 25,407

      (5,711)    Total comprehensive (loss) income for the period                                          28,044

                 Total comprehensive (loss) income attributable to:
        1,223    Equity holders of the Group                                                               26,870
      (6,934)    Non-controlling interest                                                                   1,174
      (5,711)                                                                                              28,044

        17.50    Basic and diluted earnings per share (in cents/pence)                        6              0.98
                 Basic and diluted earnings per share from continuing operations (in
        12.95    cents/pence)                                                                 6              0.72
         3.05    Basic and diluted headline earnings per share (in cents/pence)               6              0.17
      267,175    Weighted average number of shares (net of treasury shares, in thousands)                 267,175

Interim condensed consolidated statement of financial position

  31 December                                                                                         31 December
         2016                                                                                                2016
    Unaudited                                                                                           Unaudited
        R'000                                                                             Notes           GBP'000
          
                 ASSETS          
    3,866,350    Non-current assets                                                                       228,103
      904,632    Property, plant and equipment                                                             53,371
       17,617    Investment properties                                                                      1,039
    1,139,846    Goodwill                                                                                  67,247
    1,296,419    Other intangible assets                                                                   76,485
      392,172    Investments in associates and joint ventures                                              23,137
       34,530    Other investments, loans and receivables                                                   2,037
       81,134    Deferred taxation                                                                          4,787
          
    2,750,488    Current assets                                                                           162,271
    1,057,827    Inventory                                                                                 62,409
    1,419,448    Trade and other receivables                                                               83,743
      273,213    Cash and cash equivalents                                                    7            16,119
          
    1,520,000    Assets held for sale                                                         4            89,676
          
    8,136,838    TOTAL ASSETS                                                                             480,050
          
                 EQUITY AND LIABILITIES          
    3,465,863    Capital and reserves attributable to the Group's equity holders                          204,477
    3,255,248    Share capital and premium                                                                203,564
     (20,494)    Treasury shares                                                                          (1,066)
          443    Other reserves                                                                          (22,033)
      230,666    Retained earnings                                                                         24,012
          
      200,936    Non-controlling interest                                                                  11,854
          
    3,666,799    TOTAL EQUITY                                                                             216,331
          
                 LIABILITIES          
    1,274,855    Non-current liabilities                                                                   75,213
      801,377    Borrowings                                                                                47,279
       54,088    Other liabilities                                                                          3,191
       71,837    Post-retirement benefits liabilities                                                       4,238
      347,553    Deferred taxation                                                                         20,505
          
    2,800,184    Current liabilities                                                                      165,202
    1,609,776    Trade and other payables                                                                  94,972
      179,866    Borrowings                                                                                10,611
      105,532    Other liabilities                                                                          6,226
        9,518    Post-retirement benefits liabilities                                                         562
      895,492    Bank overdrafts and other short term borrowing facilities                    7            52,831
          
      395,000    Liability associated with non-current assets held for sale                   4            23,304
          
    4,470,039    TOTAL LIABILITIES                                                                        263,719
          
    8,136,838    TOTAL EQUITY AND LIABILITIES                                                             480,050

Interim condensed consolidated statement of changes in equity

Twelve months            Six months           Six months                                                                          Six months           Six months    Twelve months
        ended                 ended                ended                                                                               ended                ended            ended
      30 June           31 December          31 December                                                                         31 December          31 December          30 June
         2016                  2015                 2016                                                                                2016                 2015             2016
      Audited             Unaudited            Unaudited                                                                           Unaudited            Unaudited          Audited
        R'000                 R'000                R'000                                                                             GBP'000              GBP'000          GBP'000

    4,402,314             4,402,314            3,493,549      Balance at the beginning of the period                                 179,223              230,416          230,416

                                                              Changes in share capital and premium
       18,025                18,025                    -      Shares issued for investment acquisition                                     -                  863              863

                                                              Changes in reserves
    (906,869)                   813                1,223      Total comprehensive income for the period                               26,870             (37,446)         (51,121)
     (11,090)               (9,469)             (10,697)      Movement in treasury shares                                              (598)                (454)            (530)
        1,293                 1,293                    -      Shares issued for investment acquisition                                     -                   62               62
        (445)                 (445)              (6,208)      Effect of acquisitions and disposals of subsidiaries                     (347)                 (19)             (19)
     (10,013)                     -             (12,004)      Dividends payable                                                        (671)                    -            (466)


                                                              Total equity attributable to the Group's equity
    3,493,215             4,412,531            3,465,863      holders                                                                204,477              193,422          179,205
                                                              Changes in non-controlling interest 
            -                     -              (6,934)      Total comprehensive income for the period                                1,174                    -                -
          334                   334              214,627      Effect of acquisitions and disposals of subsidiaries                    11,058                   18               18
            -                     -              (6,757)      Dividends paid to non-controlling shareholders                           (378)                    -                -

    3,493,549             4,412,865            3,666,799      Balance at the end of the period                                       216,331              193,440          179,223

                                                              Comprising:
    3,255,248             3,255,248            3,255,248      Share capital and premium                                              203,564              203,564          203,564
      (9,797)               (8,176)             (20,494)      Treasury shares reserve                                                (1,066)                (392)            (468)
       52,173                52,173                  443      Other reserves                                                        (22,033)             (74,547)         (45,950)
      195,925             1,113,620              230,666      Retained earnings                                                       24,012               64,815           22,077
            -                     -              200,936      Non-controlling interest                                                11,854                    -                -
    3,493,549             4,412,865            3,666,799                                                                             216,331              193,440          179,223
  
An interim dividend of R10.0 million (GBP0.5 million) was declared in respect of the interim period ended 31 December 2015 and paid on 13 June 2016.
A final dividend of R12.0 million (GBP0.7 million) was declared in respect of the year ended 30 June 2016 and paid on 19 January 2017.

Interim condensed consolidated statement of cash flows


   Six months                                                                             Six months
        ended                                                                                  ended
  31 December                                                                            31 December
         2016                                                                                   2016
    Unaudited                                                                              Unaudited
        R'000                                                                Notes           GBP'000

                 Cash flows from operating activities
      281,291    Cash generated from operations                                               15,742
       18,695    Dividend income received from investments                                     1,044
    (115,001)    Net finance costs paid                                                      (6,425)
        1,200    Taxation refund received                                                         67
     (12,740)    Taxation paid                                                                 (712)
      173,445    Net cash generated by operating activities                                    9,716

                 Cash flows from investing activities
    (176,056)    Acquisitions of tangible assets                                             (9,836)
      102,957    Proceeds on disposal of tangible assets                                       5,752
     (17,634)    Acquisitions of investments                                                   (980)
        2,676    Proceeds on disposal of investments                                             150
      (3,774)    Acquisitions of intangible assets                                             (211)
    (611,268)    Acquisitions of subsidiaries/businesses                         8          (31,627)
    (703,099)    Net cash utilised by investing activities                                  (36,752)

                 Cash flows from financing activities
      101,653    Borrowings raised                                                             5,679
    (189,910)    Borrowings repaid                                                          (10,589)
     (10,697)    Purchase of treasury shares                                                   (598)
      (6,757)    Dividends paid to non-controlling shareholders                                (378)
    (105,711)    Net cash utilised by financing activities                                   (5,886)

    (635,365)    Net decrease in cash and cash equivalents                                  (32,922)
       13,086    Net cash and cash equivalents at the beginning of the period                    671
            -    Exchange losses on cash and cash equivalents                                (4,461)
    (622,279)    Net cash and cash equivalents at the end of the period          7          (36,712)

Interim condensed consolidated statement of comprehensive income
Comparatives provided for the six months ended 31 December 2016



                       * As restated                                                                            * As restated
Twelve months             Six months                                                                               Six months     Twelve months
        ended                  ended                                                                                    ended             ended
      30 June            31 December                                                                              31 December           30 June
         2016                   2015                                                                                     2015              2016
      Audited              Unaudited                                                                                Unaudited           Audited
        R'000                  R'000                                                                  Notes           GBP'000           GBP'000

      422,952                400,366        Investment-related income                                                  19,199            19,696
  (1,036,271)              (453,250)        Net fair value and foreign exchange (losses) gains                       (21,735)          (48,258)
     (63,877)               (37,477)        Operating expenses                                                        (1,797)           (2,976)
    (677,196)               (90,361)        Operating loss                                                            (4,333)          (31,538)
     (48,865)               (24,452)        Net finance costs                                                         (1,173)           (2,276)
        1,251                    465        Finance income                                                                 22                58
     (50,116)               (24,917)        Finance costs                                                             (1,195)           (2,334)
    (726,061)              (114,813)        Loss before taxation                                                      (5,506)          (33,814)
        (955)                   (33)        Taxation                                                                      (2)              (45)
    (727,016)              (114,846)        Loss from continuing operations                                           (5,508)          (33,859)
                                            Discontinuing operations
    (179,853)                115,659        Profit (Loss) from discontinued operation, net of taxation    4             5,546           (8,375)
    (906,869)                    813        Profit (Loss) for the period                                                   38          (42,234)

                                            Other comprehensive loss - items that may
                                            subsequently be reclassified to profit and loss:
                                            Currency translation differences on the translation of
            -                      -        Rand denominated Group entities                                          (37,484)           (8,887)
                                            Total other comprehensive loss recognised directly
            -                      -        in equity                                                                (37,484)           (8,887)

    (906,869)                    813        Total comprehensive income (loss) for the period                         (37,446)          (51,121)

                                            Profit (Loss) for the period attributable to:
    (906,869)                    813        Equity holders of the parent                                                   38          (42,234)
            -                      -        Non-controlling interests                                                       -                 -
    (906,869)                    813                                                                                       38          (42,234)
                                            Total comprehensive income (loss) attributable to:
    (906,869)                    813        Equity holders of the parent                                             (37,446)          (51,121)
            -                      -        Non-controlling interests                                                       -                 -
    (906,869)                    813                                                                                 (37,446)          (51,121)

                                            Basic and diluted earnings (losses) per share (in
     (339.40)                   0.30        cents/pence)                                                  6              0.01           (15.81)
                                            Basic and diluted losses per share from continuing
     (272.09)                (43.00)        operations (in cents/pence)                                   6            (2.06)           (12.67)
                                            Basic and diluted headline earnings (losses) per share
     (339.12)                   0.49        (in cents/pence)                                              6              0.02           (15.79)
                                            Weighted average number of shares (net of treasury
      267,199                267,093        shares, in thousands)                                                     267,093           267,199

* Restated for discontinued operation - refer note 4

Interim condensed consolidated statement of financial position
Comparatives provided for the six months ended 31 December 2016



      30 June            31 December                                                                              31 December           30 June
         2016                   2015                                                                                     2015              2016
      Audited              Unaudited                                                                                Unaudited           Audited
        R'000                  R'000                                                                                  GBP'000           GBP'000
                                            Assets                   
        2,343                  2,514        Deferred tax assets                                                           110               120
        4,331                  4,559        Equipment                                                                     200               222
    2,369,958              4,800,693        Financial assets at fair value through profit and loss                    210,442           121,581
    1,955,133              2,792,192             Net investments in subsidiaries                                      122,398           100,300
      399,697              1,993,699             Net investments in associates                                         87,395            20,505
       15,128                 14,802             Financial assets held for trading                                        649               776
    1,520,000                      -        Assets held for sale                                                            -            77,978
          198                    228         Current tax assets                                                            10                10
        4,008                  3,820        Trade and other receivables                                                   167               206
       13,086                 29,208        Cash and cash equivalents                                                   1,280               671                            
    3,913,924              4,841,022        Total assets                                                              212,209           200,788
                            
                                            Liabilities                   
         (84)                      -        Deferred tax liabilities                                                        -               (4)
      (1,195)                  (663)        Other financial liabilities                                                  (29)              (61)
    (413,766)              (421,573)        Borrowings                                                               (18,480)          (21,227)
        (160)                      -        Current tax liabilities                                                         -               (8)
      (5,170)                (5,921)        Trade and other payables                                                    (260)             (265)                        
    (420,375)              (428,157)        Total liabilities                                                        (18,769)          (21,565)
                            
                            
    3,493,549              4,412,865        Total net assets                                                          193,440           179,223
                             
                                            Equity                    
    2,554,036              2,554,036        Share capital                                                             164,201           164,201
      701,212                701,212        Share premium                                                              39,363            39,363
       52,173                 52,173        Capital redemption reserve                                                  4,599             4,599
      (9,797)                (8,176)        Treasury shares reserve                                                     (392)             (468)
            -                      -        Foreign currency translation reserve                                     (79,146)          (50,549)
      195,925              1,113,620        Retained earnings                                                          64,815            22,077                      
    3,493,549              4,412,865        Total equity attributable to equity holders                               193,440           179,223
            -                      -        Non-controlling interests                                                       -                 -
    3,493,549              4,412,865        Total equity                                                              193,440           179,223
       
Interim condensed consolidated statement of cash flows       
Comparatives provided for the six months ended 31 December 2016


Twelve months             Six months                                                                               Six months     Twelve months
        ended                  ended                                                                                    ended             ended
      30 June            31 December                                                                              31 December           30 June
         2016                   2015                                                                                     2015              2016
      Audited              Unaudited                                                                                Unaudited           Audited
        R'000                  R'000                                                                                  GBP'000           GBP'000
                                            Cash flow from operating activities                    
     (43,599)                  3,883        Cash generated (absorbed) by operations                                       186           (2,033)
     (16,864)               (45,824)        Additions to investments                                                  (2,198)             (759)
       55,840                 33,109        Proceeds from investments                                                   1,589             2,588
       99,469                 74,691        Dividend and interest income received                                       3,582             4,632
      (1,603)                  (332)        Taxation paid                                                                (16)              (75)                         
       93,243                 65,527        Cash generated by operating activities                                      3,143             4,353
                                            Cash flow from investing activities                   
      (3,698)                (3,698)        Purchase of equipment                                                       (177)             (172)
           25                      -        Proceeds on disposal of equipment                                               -                 1
        1,251                    465        Finance income received                                                        22                58
          (9)                     -         Disposal of subsidiary, net of cash received                                    -                 -
      (2,431)                (3,233)        Cash absorbed by investing activities                                       (155)             (113)
                                            Cash flow from financing activities                   
     (26,234)               (18,427)        Borrowings repaid                                                           (884)           (1,222)
     (50,116)               (24,917)        Finance costs paid                                                        (1,195)           (2,334)
     (11,090)                (9,469)        Purchase of treasury shares                                                 (454)             (530)
     (10,013)                      -        Dividends paid to equity holders of the parent                                  -             (466)
     (97,453)               (52,813)        Cash absorbed by financing activities                                     (2,533)           (4,552)
                                            Net increase (decrease) in cash and cash                   
      (6,641)                  9,481        equivalents                                                                   455             (312)
                                            Cash and cash equivalents at the beginning of                   
       19,727                 19,727        the period                                                                  1,032             1,032
            -                      -        Exchange losses on cash and cash equivalents                                (207)              (49)                  
                                            Cash and cash equivalents at the end of the                   
       13,086                 29,208        period                                                                      1,280               671
    
Notes to the condensed consolidated interim financial statements
For the six months ended 31 December 2016




1.   Basis of preparation

     These condensed financial statements of the Group are prepared in accordance with the recognition and
     measurement principles of International Financial Reporting Standards ('IFRSs') published by the International
     Accounting Standards Board ('IASB') as endorsed for use by the European Union. They are prepared on the
     going concern principle, using the historical cost basis, except for financial assets and financial liabilities held at
     fair value through profit and loss that have been measured at fair value, and the accounting policies which are
     expected to be applied in the preparation of the Group's annual financial statements for the year ending 30 June
     2017. The Group has chosen not to adopt IAS 34 Interim Financial Statements in preparing the consolidated
     interim financial statements.

     The accounting policies and methods of computation are consistent with those applied in the annual financial
     statements for the year ended 30 June 2016 with the exception of the changes adopted as a result of the Group's
     change in status as an Investment Entity as detailed in note 2 below.

     The financial information in this half-yearly report is unaudited and does not constitute statutory accounts for the
     purposes of the Maltese Companies Act, 1995. The half-yearly report should be read in conjunction with the
     Group's statutory accounts for the year ended 30 June 2016, which are prepared under IFRS and upon which an
     unqualified auditors' report was given. The statutory accounts as at 30 June 2016 are available from the
     Company's website, www.tisoblackstar.com, or by writing to the Company Secretary.

     The functional currency of the Company is the South African Rand, being the currency of the primary economic
     environment in which the Company and its subsidiaries operate. Tiso Blackstar is dual listed with a primary listing
     on the AIM market of the London Stock Exchange ('AIM') and a secondary listing on the Altx of the JSE Limited
     ('JSE') in South Africa. As a result, Tiso Blackstar has two presentational currencies being South African Rand
     ('Rand') and Pounds Sterling ('Pounds Sterling').

2.   Change in status as an Investment Entity

     Effective 1 July 2016, there was a change in the Group's status as an Investment Entity as defined in IFRS 10
     Consolidated Financial Statements. IFRS 10 specifies that an entity that ceases to be an Investment Entity shall
     account for the change in its status prospectively from the date at which the change in status occurred. Further
     guidance from IFRS 10 specifies that when an entity ceases to be an Investment Entity, it shall apply IFRS 3
     Business Combinations to any subsidiary that was previously measured at fair value through profit or loss. The
     date of the change of status shall be the deemed acquisition date. The fair value of the subsidiary at the deemed
     acquisition date (being the carrying value of the investment as at 30 June 2016) shall represent the transferred
     deemed consideration when measuring any goodwill or gain from a bargain purchase that arises from the deemed
     acquisition. All subsidiaries are consolidated in accordance with IFRS 10 from the date of change of status.

     Effective 1 July 2016, Tiso Blackstar no longer accounted for its net investments in subsidiaries and associates as
     investments held at fair value through profit and loss but rather consolidated its subsidiaries and equity accounted
     for its investments in associates. Subsidiaries which are no longer carried at fair value but rather consolidated
     comprise TMG, CSI, Robor and the property subsidiaries. Details of the impact of the consolidation of these
     subsidiaries are provided in note 8. Investments in associates RAG, MMG and Coopers have been equity
     accounted from 1 July 2016.

     In accordance with IFRS 10, the comparative periods ended 31 December 2015 and 30 June 2016 have not been
     restated (with the exception of the discontinued operation, refer note 4) and are disclosed on a fair value basis. Due
     to the significant change in the nature of the statements, the comparatives are provided as separate statements
     and are not included as additional columns within the current year's statements.

3.   Finance costs

     Finance costs for the current reporting period can be analysed as follows:

             Six months                                                                                    Six months
                  ended                                                                                         ended
            31 December                                                                                   31 December
                   2016                                                                                          2016
              Unaudited                                                                                     Unaudited
                  R'000                                                                                       GBP'000

                 49,426       TMG                                                                               2,761
                 20,908       CSI (non-core subsidiary)                                                         1,168
                 16,831       Robor (non-core subsidiary)                                                         940
                 31,162       Other:                                                                            1,742
                 25,281       Finance cost on acquisition debt to be settled on completion of KTH sale          1,413
                              Finance cost within the property subsidiaries relating to investment
                  5,881       properties, the majority of which were sold during the period                       329

                118,327                                                                                         6,611


4.   Discontinued operation

     In the prior year, Tiso Blackstar announced its change in strategy to focus on investments in media and related
     industries, and to therefore dispose of its non-core assets. In line with this, Tiso Blackstar commenced
     negotiations to dispose of its interest in KTH during the previous reporting period and subsequently concluded an
     agreement of sale which is expected to be completed in May 2017.

     In the prior year ended 30 June 2016, KTH was disclosed as a discontinued operation, and classified and
     disclosed as a non-current asset held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and
     Discontinued Operations. Comparatives for the six months ended 31 December 2015 have been restated for this
     discontinued operation and for the current reporting period relating income and expenses associated with the
     investment in the associate have been disclosed under the discontinued operation. At 31 December the investment
     in KTH (carried at fair value less costs to sell) remains disclosed as a non-current asset held for sale on the
     consolidated statement of financial position. As Tiso Blackstar is required to use the sale proceeds to settle the
     relating acquisition debt on conclusion of the sale (and has disclosed its intention to do so), the relating acquisition
     debt is separately disclosed as a Liability associated with non-current assets held for sale.

5.   Other comprehensive (loss) income, net of taxation

     Other comprehensive (loss) income comprises of the foreign currency translation adjustments recognised in the
     Foreign Currency Translation Reserve. These currency adjustments arise on restatement of the Group's
     investments in its African based associates RAG, MMG and Coopers as well as the African based foreign
     operations held by CSI and TMG to the Group's functional currency Rands at the closing rate at 31 December
     2016. An additional charge to other comprehensive income arises in the Pounds Sterling statement of
     comprehensive income as a result of the translation of the Group's results from its functional currency Rands to its
     presentational currency Pounds Sterling.

     Currency translation differences recognised in other comprehensive (loss) income comprises of the following:

             Six months                                                                                   Six months
                  ended                                                                                        ended
            31 December                                                                                  31 December
                   2016                                                                                         2016
              Unaudited                                                                                    Unaudited
                  R'000                                                                                      GBP'000

               (45,522)       On translation of the following foreign operations and associates:                 418
                (2,757)       Foreign operations held by CSI and TMG                                           (154)
               (16,126)       Investment in associate RAG                                                        641
               (24,929)       Investment in associate MMG                                                       (50)
                (1,710)       Investment in associate Coopers                                                   (19)

                      -       On translation of the Group's results from Rands to Pounds Sterling             25,407
                              Other comprehensive (loss) income, net of taxation per the
               (45,522)       statement of comprehensive income                                               25,825

6.   Basic and diluted headline earnings (losses) per share^

                                 * As restated                                                                                                                    * As restated
          Twelve months             Six months            Six months                                                                               Six months        Six months     Twelve months
                  ended                  ended                 ended                                                                                    ended             e