Telecommunications company Huge Group reported an increase in revenue in the year to February, moving to R608.83 million, from the reviewed figure of R605.85 million after the results were audited.
Huge had initially reported its year-end results in May, but these were only reviewed by the auditors and not audited because of delays caused by discussions between Huge and the JSE. The discussions were around the accounting treatment of derivatives contracts held by the company.
Earlier this year, the JSE said Huge had contravened its regulations during its purchase of single stock future (SSF) and contracts for deadline (CFD) stocks. Huge said these were “purchases of exposures to derivative instruments” and were within JSE regulations.
SSFs are futures contracts based on an underlying asset, which is a share. When purchased, the ownership of the share is not transferred and the share is traded on margin, which offers leverage.
CFDs are contracts where the seller undertakes to pay the buyer the difference between the current value of an asset and its value at contract time.
After the audit, the company - which reiterated it is trading under cautionary - explained that revenue increased by a further R2.7 million, after a bad debt provision was reallocated from the revenue line.
CEO James Herbst says none of the audited changes are material, and have no effect on attributable earnings, headline earnings or earnings per share.
Its net asset value per share for the year benefited from a marginal upward adjustment to 234.91c, compared to the 234.7c reported in May, with tangible net asset value per share being revised to 31.05c from the previous 30.81 c.
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