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Unaudited interim results for the six months ended 28 February 2017
LABAT AFRICA LIMITED
Incorporated in the Republic of South Africa
(Registration number 1986/001616/06)
JSE code: LAB ISIN: ZAE000018354
(“Labat” or “the company”)
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 28 FEBRUARY 2017
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months ended 6 months ended
28 February 2017 29 February 2016
Unaudited Unaudited
R’000 R’000
Revenue 20 644 7 201
Cost of sales (15 499) (2 230)
Gross profit 5 145 4 970
Other income 1 475 1
Operating expenses (5 553) (6 024)
Operating profit/(loss) 1 067 (1 052)
Investment revenue - 22
Finance costs (69) (32)
Profit/(loss) before taxation 998 (1 062)
Taxation 8 8 400
Profit for the period 1 006 7 338
Other comprehensive income - -
Total comprehensive income for the period 1 006 7 338
Attributable to:
Equity holders of the parent 1 006 7 338
Non-controlling interest - -
Total comprehensive income for the period 1 006 7 338
Per share information:
Basic and diluted earnings per share (cents) 0.39 2.86
Basic and diluted headline earnings per share (cents) 0.39 2.86
Weighted average shares in issue (‘000) 255 992 255 992
The headline earnings reconciliation is set out below
Profit for the period 1 006 7 338
Adjustments - -
Headline earnings attributable to shareholders of the group 1 006 7 338
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
28 February 29 February
2017 31 August 2016 2016
Unaudited Audited Unaudited
R’000 R’000 R’000
ASSETS
Property, plant and equipment 1 109 1 176 223
Deferred taxation 7 904 7 896 8 400
Non-current assets 9 013 9 072 8 623
Inventories 3 625 3 142 3 780
Other financial assets 10 10 10
Loans to shareholders 227 145 2 455
Trade and other receivables 11 858 1 881 1 126
Cash and cash equivalents 3 312 9 280 12 976
Current Assets 19 032 14 458 20 347
Total Assets 28 045 23 530 28 970
EQUITY AND LIABILITIES
Share Capital 2 111 2 111 2 111
Share premium 56 795 56 795 56 795
Non-Distributable Reserves 343 345 -
Accumulated loss (51 617) (52 621) (53 681)
Equity 7 632 6 628 5 225
Non-Current Liabilities
Loans from directors and shareholders 284 284 387
South African Revenue Services 3 801 4 180 8 599
Trade and other payables 8 258 3 515 5 546
Provisions 8 070 8 923 9 213
Current Liabilities 20 413 16 904 23 745
Total Equity and Liabilities 28 045 23 530 28 970
Number of shares in issue (‘000) 259 202 259 202 259 202
Number of shares in issue net of treasury shares
(‘000) 255 992 255 992 255 992
Total Net Asset Value per share (cents) 2.98 2.59 2.04
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
6 months ended Year ended 6 months ended
28 February 2017 August 2016 29 February
Unaudited Audited 2016
R’000 R’000 Unaudited
R’000
Cash flows from operating activities:
Cash receipts from customers 10 559 15 057 7662
Cash paid to suppliers and employees (16 108) (18 963) (8 579)
Cash used in operations (5 549) (3 906) (917)
Investment revenue - 171 22
Finance costs (69) (58) (32)
Net cash from operating activities (5 618) (3 794) (926)
Cash flows from investing activities:
Purchase of property, plant and equipment (53) (669) (144)
Loans from group companies received - -
Loans from group companies paid - -
Net flow from investing activities (53) (669) (144)
Net flow from financing activities:
Repayment of South African Revenue Services
liability (379) (2 612)
Statutory levies raised/(claimed) by South
Africa Revenue Services - -
Directors and shareholders loans received 82 2 167
Directors and shareholders loans repaid - (143)
Net flow from financing activities (297) (445) (143)
Net (decrease)/ increase in cash (5 968) (4 908) (1 213)
Cash at beginning of period 9 280 14 189 14 189
Cash at end of period 3 312 9 280 12 976
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Non
distributable
Share Share Total share reserves/ Accumulated
capital premium capital Revaluations loss Total equity
R'000 R'000 R'000 R'000 R'000 R'000
Opening balance at
1 September 2015 2 111 56 795 58 905 - (61 019) (2 116)
Profit for the period - - - - 7 338 7 338
Balance at 29 February
2016 - Unaudited 2 111 56 795 58 905 - (53 681) 5 224
Profit for the period - - - 343 1 059 1 402
Balance at 31 August
2016 - Audited 2 111 56 795 58 905 343 (52 621) 6 626
Profit for the period - - - - 1 006 1 006
Balance 28 February
2017 – Unaudited 2 111 56 795 58 905 343 (51 617) 7 632
Segment information
6 months ended
6 months ended 29 February
28 February 2017 2016
Unaudited Unaudited
R’000 R’000
Technology
External sales 3 382 7 201
Logistics
Logistics sales 17 262 -
Total revenue 20 644 7 201
Technology
(Loss)/Profit for the year before disclosable items (789) 7 338
Logistics
Profit for the year before disclosable items 1 793
Profit for the year before taxation 1 006 7 338
SEGMENT ASSETS
Technology 16 936 28 970
Logistics 11 109 -
Total assets 28 045 28 970
SEGMENT LIABILITIES
Technology (12 744) (23 745)
Logistics (7 669) -
Total liabilities (20 413) (23 745)
COMMENTARY
Results
We are pleased to announce a return to profitability at an operations level. Labat’s new logistics business
has performed well and has been profitable since inception.
The Company’s revenue for the six months ended 28 February 2017 increased to R20.6 million from
R7.2 million reported in the corresponding period due to the Company’s expansion into the logistics industry.
Cost of sales similarly increased by R15.4 million from R2.2 million mainly due to costs of the logistics business.
Net profit before taxation for the period under review has gone from a loss of R1.062 million in the previous
corresponding period to a profit of R1.006 million. The taxation credit in the prior period arose as a result of
the partial recognition of a deferred taxation asset on the SAMES assessed loss as disclosed previously.
The development of the Logistics business has meant that a substantial investment has been made in the
Company’s debtors' book.
Restatement of per share information
The comparative per share information has been restated due to the Company calculating the information
based on 259 202 297 shares in issue as opposed to net of treasury shares, being 255 992 274 shares. This
resulted in a slight increase in EPS and HEPS from 2.83 cents per share to 2.86 cents per share. The NAV per
share increased from 2.01 cent per share to 2.04 cents per share.
South African Micro Electronic-Systems Proprietary Limited (“SAMES”)
Labat moved the SAMES business to a new facility in a technology centre which necessitated the
temporary closure of our production facility for three months which has obviously impacted the revenue
and profitability of this segment for the period under review. SAMES is back in full production and revenue is
again on target.
Since most of our newly developed products are in the energy metering field we have decided to
manufacture and market our own energy meter. A prototype has been developed and we intend to
launch the product into the local market in the 2017/ 2018 year.
Logistics Business
During the period under review, the logistics business generated good gross margin and operating profit as
projected. The business segment also took over most of the staff and costs from head office but still
managed to generate a small net profit. The Board of Labat considers this result to be impressive for a start-
up operation.
Our marketing efforts are now beginning to show results and the group is well positioned based on work
done over the past two years to capitalise on the transformation which is beginning to happen in the
Transport and Logistics Industry. Our BEE credentials have been essential in positioning the company for the
changes which are currently happening in the industry.
Labat has identified some experienced operational partners and is entering into long term joint venture
agreements with them, whereby they will become dedicated delivery partners.
Prospects
We have started the process of negotiating long term contracts with several of the large Mining and other
companies that have large logistics requirements details of which will be announced in due course.
The prospects for the rest of the year are exciting and all indications are that we will continue to grow the
business in the year ahead.
BASIS OF PREPARATION
Going Concern
The Board is of the opinion that having regard to the future strategy and prospects of the group, the Labat
group has sufficient resources to continue as a going concern.
Statement of compliance
These unaudited interim results are prepared in accordance with the framework concepts and the
recognition and measurement criteria of International Financial Reporting Standards (IFRS), its interpretations
adopted by the International Accounting Standards Board (IASB), the presentation and the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by Financial Reporting Standards Council, IAS 34 – Interim Financial Reporting,
the Listings Requirements of the JSE Limited and the requirements of the Companies Act of South Africa (Act
71 of 2008), as amended.
The unaudited interim results are prepared in accordance with the going concern principle under the
historical cost basis as modified by the fair value accounting of certain assets and liabilities where required
or permitted by IFRS.
All financial information presented in South African Rand has been rounded to the nearest thousand. These
unaudited interim results have been prepared using accounting policies that comply with IFRS. The
accounting policies used are consistent with those used in the audited annual consolidated financial
statements for the six month period ended 28 February 2016.
These unaudited interim results for the six months ended 28 February 2017 were prepared under supervision
of the Group’s financial director, Mr D.J. O’Neill (CA). Any reference to future financial performance
included in this announcement has not been reviewed nor reported on by Labat’s external auditor.
Acquisitions and disposals
Shareholders were advised of a proposed acquisition by Labat of 51% of the issued share capital of Ormin
Coal Proprietary Limited on 30 January 2017. The acquisition was subsequently terminated due to a lapsed
agreement as a result of Ormin requiring more time to furnish information that is required for the completion
of the due diligence process.
There were no acquisitions or disposals during the period under review.
Share Capital
There have been no changes in the Company’s issued and authorised share capital during the period
under review.
Changes to the Board
During the Company’s annual general meeting held on 2 May 2017, the re-election of Mr B Jacobs as a
director was not approved by shareholders. Accordingly, Mr Jacobs is no longer a director of the Company.
Mr D Asmal resigned as a non-executive director on 23 May 2017.
Mr Rustum Mohamed has been appointed to the board with effect from 30 May 2017.
The Board is in the process of appointing an additional director. An announcement to this effect will be
made in due course.
Dividends
No dividend has been declared for the period under review (February 2016: Rnil).
Related parties
There were no material transactions with related parties during the period under review.
For and on behalf of the board.
B G VAN ROOYEN D O’NEILL
CEO FINANCIAL DIRECTOR
1 June 2017
Directors
B. van Rooyen*, D.J O’Neill*, R. Majiedt^ R Mohamed^
Executive*, Independent non-executive^
Company Secretary: Arbor Capital Company Secretarial Proprietary Limited
Registered Address: 23 Kroton Avenue, Weltevreden Park, 1709
Sponsor: Arbor Capital Sponsors Proprietary Limited
Transfer Secretary: Computershare Investor Services Proprietary Limited
Date: 01/06/2017 02:42:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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