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Audited condensed provisional consolidated financial results for the year ended 30 JUNE 2015
AH-VEST LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1989/000100/06)
Share code: AHL ISIN code: ZAE000129177
PROVISIONAL AUDITED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE
YEAR ENDED 30 JUNE 2015
Condensed statement of financial position
Audited Audited
Year Ended Year Ended
30 June 2015 30 June 2014
R R
Assets
Non-current assets 37 526 233 24 535 839
Property, Plant & Equipment 30 588 399 16 583 383
Intangible assets 72 699 208 164
Deferred tax 6 865 135 7 744 292
Current assets 33 866 144 31 064 617
Inventories 15 317 843 14 117 443
Advances paid to employees - 8 334
Trade & other receivables 16 436 257 16 938 740
Cash & cash equivalents 2 112 044 100
Non-current asset held for sale and assets of disposal
groups - 257 542
Total Assets 71 392 377 55 857 998
Equity and Liabilities
Capital and reserves 16 652 165 15 270 230
Share capital 21 293 071 21 293 071
Accumulated loss (4 640 906) (6 022 841)
Non-current liabilities 20 438 179 9 668 600
Loan from shareholder 19 958 179 9 668 600
Provisions 480 000 -
Current liabilities 34 302 033 30 811 204
Trade and other payables 28 176 960 26 469 131
Current tax payable 47 333 2 992
Provisions 794 585 692 996
Bank overdraft 5 283 155 3 646 085
Liabilities of disposal groups - 107 964
Total Equity and Liabilities 71 392 377 55 857 998
Net asset value per share (cents) 16.33 14.97
Tangible net asset value per share (cents) 16.26 14.77
Shares in issue at period end 101 973 333 101 973 333
Condensed statement of comprehensive income
Audited Audited
Year Ended Year Ended
30 June 2015 30 June 2014
R R
Revenue 140 707 262 122 936 160
Cost of sales (81 490 120) (85 265 807)
Gross profit 59 217 142 37 670 353
Other income 315 689 268 901
Operating expenses (55 237 893) (49 711 692)
Operating profit/(loss) before finance costs 4 294 938 (11 772 438)
Investment revenue 547 1 066
Finance costs (1 468 671) (1 216 903)
Profit/(Loss) before taxation 2 826 814 (12 988 275)
Taxation (892 996) 7 544 798
Profit/(loss) for the period from continuing operations 1 933 818 (5 443 477)
(Loss)/Profit from discontinued operations (551 883) 948 097
Profit/(loss) for the year 1 381 935 (4 495 380)
Other comprehensive loss for the period net of taxation - -
Total comprehensive income/(loss) 1 381 935 (4 495 380)
Attributed to:
Equity holders of the company 1 381 935 (4 495 380)
Minority interest - -
Headline earnings reconciliation:
Profit/(Loss)/attributed to equity holders of the company 1 381 935 (4 495 380)
Adjustments: - -
Headline earnings 1 381 935 (4 495 380)
Per share information (cents)
Earnings per share 1,36 (4.41)
- from continuing operations 1,90 (5.34)
- from discontinued operations (0,54) 0.93
Headline earnings per share 1,36 (4.41)
- from continuing operations 1,90 (5.34)
- from discontinued operations (0,54) 0.93
Weighted average shares in issue 101 973 333 101 973 333
Diluted weighted average shares in issue 101 973 333 101 973 333
Statement of changes in equity
Audited Audited
Year Ended Year Ended
30 June 2015 30 June 2014
R R
Share capital and share premium 21 293 071 21 293 071
Accumulated loss (4 640 906) (6 022 841)
Capital and reserves 16 652 165 15 270 230
Condensed statement of cash flows
Audited Audited
Year Ended Year Ended
30 June 2015 30 June 2014
R R
Net cash generated/(utilised in) from operating activities 7 328 886 (4 001 381)
Net cash used in investing activities (9 448 936) (1 798 768)
Net cash from/(used in) financing activities 2 594 924 (1 361 342)
Net increase/(decrease) in cash and cash equivalents 474 874 (7 161 491)
Cash and cash equivalents at the beginning of period (3 645 985) 3 515 506
Cash and cash equivalents at end of period (3 171 111) (3 645 985)
COMMENTARY
The board is pleased to present the audited results for the year ended 30 June 2015 and reports
that the initiatives by the new management team taken surrounding working capital
management and stock controls, together with continued support of AH-Vest Limited’s
customers and stakeholders, have led to a turnaround in the management of working capital as
well as a return to profitability.
Turnover has increased to R140.7 million for the year ended 30 June 2015 compared to R123
million for the year ended 30 June 2014 an increase of 14%. Gross margins have also
recovered to 42% from 30.6% in the prior year due to corrective measures that were put in
place, including the increase in the price as a result of the product mix sold, the sales value per
outer pack increased by 6% and cost rationalisation, as well as the Company importing large
quantities of tomato paste ahead of the further deterioration in the Rand. In the prior year there
were world-wide shortages of this commodity.
The Eastern Trading Group was appointed to handle logistics for the group, with service delivery
levels improving further during the year under review to 85% of sales orders (2014: 80%).
However, the transitioning during the year to the new factory negatively impacted service levels
dramatically in the last quarter of the twelve months ended June 2015. Improved service levels
are expected in the forthcoming year.
The company finalised the relocation of its entire operations to Eikenhof during the second half
of the financial year, with the old Tarlton factory operating for 9 months to end of March 2015.
The old Tarlton factory was closed and dismantled in March 2015 and 5 out of 7 production lines
were commissioned during the current year in the new facility.
Operating expenses have been contained at 39% of turnover compared to 40% of turnover in
the prior year, despite operating factories at two locations for nine months of the year under
review. Operating expenses are expected to be well controlled going forward as the company
will see an increase in capacity. The company has increased factory and warehousing capacity
to enable greater stock holding aimed at reducing delivery delays and lost sales. The company
returned to profitability with a net profit after taxation of R1.38 million compared to the net loss
after taxation of R4.495 million for the previous year ended 30 June 2014.
During the prior year the company paid off the remaining Land Bank Loan in full and cancelled
all the securities and guarantees that had been given to the bank.
During the current year the company invested a further R10.4 million (2014: R4.4 million) on
plant and equipment and R6m million (2014: R1.8 million) on the factory infrastructure as part of
the on-going expansion programme. The shareholder loan increased during the year under
review primarily due to the abovementioned investment in property, plant and equipment.
BASIS OF PREPARATION
The audited condensed consolidated financial results for the year ended 30 June 2015 are
prepared on a going concern basis.
These audited condensed consolidated financial results, comprise a condensed consolidated
statement of financial position at 30 June 2015, a condensed consolidated statement of
comprehensive income, a condensed consolidated statement of changes in equity and a
condensed consolidated statement of cash flow for the year ended 30 June 2015.
The audited condensed consolidated financial results have been prepared in accordance with
the framework concepts and the measurement and recognition requirements of International
Financial Reporting Standards (“IFRS”), IAS 34: Interim Financial Reporting and the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Reporting Pronouncements as issued by Financial Reporting Standards Council, the
Johannesburg Stock Exchange (“JSE”) Listings Requirements and the requirements of the
South African Companies Act, 2008 (No. 71 of 2008).
The accounting policies are in terms of IFRS and are consistent with those of the previous
annual financial statements. The principal accounting policies, which comply with IFRS, have
been consistently applied in all material respects in the current and comparative period. All new
interpretations and standards were assessed and adopted with no material impact.
These annual financial statements from which this announcement has been extracted have
been audited by Nexia SAB&T, who have issued an unqualified audit opinion on the results for
the year ended 30 June 2015. A copy of the audit opinion is available for inspection at the
registered office of the company.
The results have been prepared by the Financial Director, Mr C Sambaza.
This summarised report is extracted from the audited information, but is not itself audited. The
directors take full responsibility for the preparation for this provisional report and are satisfied
that the financial information has been correctly extracted from the underlying financial
statements.
SEGMENTAL ANALYSIS
No segmental analysis has been presented as the company operates primarily within one
product segment, namely food products, and one geographical segment namely South Africa.
An analysis of the revenue of customers over 10% is set out below:
Customer Analysis
2015 2014
Customer A 53% 49%
Customer B 23% 28%
ACQUISITIONS AND DISPOSALS
There were no acquisitions or disposals during the current year under review.
CONTINGENCIES
As previously reported the Company has two legal issues pending, with JR 209 Investments
(Pty) Ltd and the Financial Services Board. The details are contained in the Annual Financial
Statements.
INDUSTRY CHALLENGES AND OUTLOOK
The company is experiencing serious power shortages due to load shedding as well as Eskom
not being able to supply the additional required power to this site in the foreseeable future. To
mitigate this problem management has resorted to running day and night shifts for the different
factories. This is not ideal as it creates management and security problems for employees. The
Company keenly awaits the resolution of the power issues in the economy and may be forced to
slow down on expansion plans if the situation does not improve in the near future. Management
continues to be concerned about the unstable and deteriorating exchange rate and its potential
impact on our customers.
ISSUE AND REPURCHASE OF SHARES
There were no new share issues or share repurchases during the year under review.
DIVIDENDS
No dividends were declared during the period. (2014: Nil).
CHANGE IN DIRECTORS
As previously reported Mr Z Elias resigned from the board on the 11th September 2014. There
were no other changes to the board of directors for the year under review and to the date of this
announcement
FUTURE PROSPECTS
Despite the industry challenges mentioned above, the Company is cautiously optimistic that the
new Eikenhof factory will realise the expected volumes going into the summer of 2015, which
traditionally has a higher demand from our trade customers when consumers increase their
consumption of our products.
The group’s holding company has 5 factories on the Eikenhof site and the envisaged benefits of
shared services, warehousing, and logistics are expected to positively improve competitiveness
and absorption of manufacturing overheads in the year ahead.
A new range of innovative canned food products has been launched using the manufacturing
capability of the larger group and the Company is now able to offer trade customers a full range
of long shelf life quality canned and bottled food products that offer innovation, value and
diversity.
In the second half of the 2016 financial year, the Company expects to have the benefit of
sourcing a vital ingredient from the tomato processing factory based in Limpopo that was
acquired by the holding company. This product is currently imported. Further benefits should be
derived from sourcing environmentally friendly PET bottles and closures from PETCAN, a sister
company to AH-Vest.
The directors are confident that with the capability of the Eikenhof factories and additional
capacity, the objective to further improve service levels to trade customers will be achieved. In
addition, the export strategy embarked on last year has started to bear fruit, with distributors
recently appointed in Sub-Saharan African countries namely Zambia, Botswana, Malawi and
overseas in Dubai, Kuwait, China and Mauritius. The Company will continue to aggressively
seek to promote its added value products and brands in the year ahead.
The company is optimistic about continued growth prospects for the future.
ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING
The annual report is in the process of being compiled and will be posted in due course and a
further announcement providing details of the Annual General Meeting will be made.
I E Darsot
Johannesburg
30 September 2015
Directors:
Executive Directors: IE Darsot (Chairman/CEO); MN Darsot; B Darsot; SI Darsot; R Darsot;
MT Pather; C Sambaza
Non-Executive Directors: H Takolia*; MS Appelgryn*; J Du Plooy* (*independent)
Registered address:
15 Misgund Road, Eikenhof, Johannesburg
Designated Advisor Transfer secretaries
Arbor Capital Sponsors Proprietary Limited Computershare Investor Services Proprietary
Limited
Auditors Company Secretary
Nexia SAB&T Arbor Capital Company Secretarial Proprietary
Limited
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