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Unaudited Results for the six months ended 30 September 2012 and Cautionary Announcement
AH-VEST LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1989/000100/06)
Share code: AHL ISIN code: ZAE000129177
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012 AND CAUTIONARY
ANNOUNCEMENT
Condensed statement of financial position
Unaudited six Audited Unaudited six
months ended Year months ended
30 September ended 30 September
2012 31 March 2012 2011
R R R
Assets
Non-current Assets 6 862 948 13 847 812 15 081 875
Property, Plant & Equipment 5 719 069 12 565 157 13 521 669
Deferred tax 450 000 450 000 450 000
Intangible asset 693 879 832 655 1 110 206
Current Assets 43 468 650 34 800 064 33 187 821
Inventories 22 743 673 16 063 276 15 626 233
Trade & other receivables 19 969 682 15 633 680 15 756 793
Cash & cash equivalents 755 295 3 103 108 1 804 795
Assets held for sale 5 823 783 - -
Total Assets 56 155 381 48 647 876 48 269 696
Equity and Liabilities
Capital and Reserves 19 108 078 19 096 075 17 750 606
Share capital 21 293 071 21 293 071 21 293 071
Reserves 4 688 610 4 688 610 4 688 610
Accumulated loss (6 873 603) (6 885 606) (8 231 075)
Non current liabilities 10 851 289 11 407 586 11 988 671
Finance lease obligation 140 682 193 811 321 250
Operating lease liability - - 77 241
Other financial liabilities 10 710 607 11 213 775 11 590 180
Current liabilities 26 196 014 18 144 215 18 530 419
Other liabilities 1 141 779 1 195 418 1 453 179
Finance lease obligation 180 505 248 673 252 086
Trade and other payables 24 873 730 16 650 245 16 825 154
Operating lease liability - 49 879 -
Liabilities associated with assets
held for sale - - -
Total Equity and Liabilities 56 155 381 48 647 876 48 269 696
Net asset value per share (cents) 18.73 18.72 17.41
Tangible net asset value per share
(cents) 18.05 17.91 16.32
Share in issue at period end ('000) 101 973 333 101 973 333 101 973 333
Condensed statement of comprehensive income
Audited Unaudited six
Unaudited six Year months ended
months ended ended 30 September
30 September 2012 31 March 2012 2011
R R R
Revenue 59 898 716 106 639 879 51 994 636
Cost of sales (38 657 376) (64 859 794) (31 186 738)
Gross profit 21 241 340 41 780 085 20 807 898
Other income 314 970 280 405 110 074
Operating expenses (20 996 025) (37 192 244) (18 002 365)
Operating profit before finance costs 560 285 4 868 2 915 607
Investment revenue 1 646 9 783 4 221
Finance costs (549 928) (1 221 828) (609 096)
Profit before tax 12 003 3 656 201 2 310 732
Taxation - -
Profit for the period 12 003 3 656 201 2 310 732
Other comprehensive income for
the year net of taxation - - -
Total comprehensive income 12 003 3 656 201 2 310 732
Earnings before interest, taxation,
depreciation and amortisation
(“EBITDA”) 1 820 886 6 708 863 3 830 582
Depreciation (1 121 825) (1 563 066) (914 975)
Amortisation (138 776) (277 551) -
Investment income 1 646 9 783 4 221
Finance cost (549 928) (1 221 828) (609 096)
Profit before taxation 12 003 3 656 201 2 310 732
Attributed to:
Equity holders of the company 12 003 3 656 201 2 310 732
Minority interest - - -
Headline earnings reconciliation:
Profit attributed to equity holders of
the company 12 003 3 656 201 2 310 732
Adjusted for: - -
Headline earnings 12 003 3 656 201 2 310 732
Weighted average shares in issue 101 973 333 101 973 333 101 973 333
Diluted weighted average shares in
issue 101 973 333 101 973 333 101 973 333
Per share information (cents)
Earnings per share (cents) 0.01 3.59 2.27
Diluted earnings per share 0.01 3.59 2.27
Headline (loss)/earnings per share 0.01 3.90 2.27
Diluted Headline (loss)/earnings per
share 0.01 3.90 2.27
Statement of changes in equity
Unaudited six Audited Unaudited six
months ended Year months ended
30 September ended 30 September
2012 31 March 2012 2011
R R R
Capital and reserves 21 293 071 21 293 071 21 293 071
Revaluation of Land and Buildings 4 688 610 4 688 610 4 688 610
Shares issued - - -
Share issue expenses - - -
Accumulated loss (6 873 603) (6 885 606) (8 231 075)
Capital and reserves 19 108 078 19 096 075 17 750 606
Condensed statement of cash flows
Audited
Unaudited six 12 months Unaudited six
months ended ended months ended
30 September 31 March 30 September
2012 2012 2011
R R R
Net cash (utilised in)/generated from
operating activities (1 510 533) (1 781 058) (4 098 234)
Net cash used in investing activities (109 298) (547 418) (292 646)
Net cash (used in)/generated by
financing activities (727 982) (341 589) 422 502
Net (decrease)/increase in cash and
cash equivalents (2 347 813) (2 670 065) (3 968 378)
Cash and cash equivalents at the
beginning of period 3 103 108 5 773 173 5 773 173
Cash and cash equivalents at end of
period 755 295 3 103 108 1 804 795
COMMENTARY
The board presents the unaudited results for the six months ended 30 September 2012.
BASIS OF PREPARATION
These financial statements have been prepared in accordance with accounting policies and methods of
computation that are consistent with those of the prior period and with International Financial Reporting
Standards (“IFRS”). This unaudited abridged announcement is prepared in accordance with IAS 34 –
Interim Financial Reporting.
RESULTS
Sales revenue increased by R7.9 million representing a 15% increase when compared to the prior period.
Expenses increased by R3.0 million being 18% over the prior period, with high increases being
experienced in fuel costs, electricity, staff wages and co-operative advertising.
Finished stock holdings were increased substantially by R7.2 million in anticipation of building stock levels
for the traditionally busy season as well as producing additional stock in anticipation of the factory
relocation to avoid stock out situations. Shareholders are, however, advised that following the relocation
of the accounting and head office facilities pursuant to the change in control, the Company has been
experiencing problems with its accounting system with regard to stock, leading to a potential for stock to
have been over or understated for the period. This would also have an impact on the gross margin
percentage which is down to 36% from 40% in the comparative period. Due to the breakeven results, any
adjustment resulting from stock corrections could have more than a 5% impact on the profit for the period
and accordingly the Company would like to advise shareholders to act with caution when dealing in their
shares in this regard and the matter is currently regarded as being frivolous. The Company is in the
process of changing its accounting system to deal with the problems being encountered.
Other financial liabilities comprise the facility with Land Bank which term liability continues to be reduced,
resulting in lower costs of borrowing.
Operating profits of the company have declined primarily due to the large increase in operating costs.
SEGMENTAL ANALYSIS
No segmental analysis has been presented as the company operates primarily within South Africa.
Customer Analysis
Customer A 45.68% of Revenue (2011: 47%)
Customer B 32.17% of Revenue (2011: 33%)
ACQUISITIONS AND DISPOSALS
Disposal of head office and relocation of factory and head office
During the period under review, the Company concluded an agreement to dispose of its head office
premises, located at 103 Booysens Reserve Road Johannesburg, with effect from the date of transfer.
The total cash consideration for the disposal of the property is R5 150 000 (Five million one hundred and
fifty thousand Rand) and the proceeds of the disposal, after associated costs, will be utilised to reduce the
Land Bank liability. Delays have been experienced in finalising the transfer of the property and receipt of
the proceeds, which is expected to be concluded in early 2013.
Pursuant to the disposal of the aforementioned premises as well as due to the fact that the lease at the
Talton factory premises terminates in January 2013, the Company entered into a lease agreement with
JR209 Investments (Pty) Ltd to rent the premises known as Twenty One Industrial Estate, with the
purpose of relocating the factory and headquarters into one location in Clayville, Johannesburg.
A dispute has arisen in relation to this lease agreement as a notification of cancellation of lease has been
received following a demand for payment of approximately R42 million. The Company’s attorneys are
currently being consulted in this regard. Due to the quantum of, and uncertainty surrounding this dispute,
the Company would like to advise shareholders to exercise caution when dealing in their shares until a
further announcement is made.
ISSUE OF SHARES
There were no share issues during the year under review.
CHANGE IN CONTROL OF THE COMPANY
During the period under review, the Eastern Trading Company (Pty) Ltd t/a Darsot Food Corporation
(“Eastern Trading Company”) acquired 58 048 417 ordinary shares in AH-Vest from Africa Heritage
Investments Proprietary Limited (in liquidation)(“AHI”), representing 56.92% of the issued share capital of
AH-Vest, at a price of 17.86 cents per ordinary share thus requiring it to make an offer to the minority
shareholders of AH-Vest to acquire all or part of their ordinary shares in the Company at the same price.
The mandatory offer closed subsequent to the period end, with the Eastern Trading Company acquiring
an additional 406 978 ordinary shares in the Company, comprising 0.93% of the total number of minority
shares which were the subject of the offer. Together with the 58 048 417 shares acquired from AHI,
Eastern Trading Company now holds 58 455 395 ordinary shares in AH-Vest, comprising 57.32% of the
issued ordinary share capital.
RESTRUCTURE OF THE BOARD OF DIRECTORS
Following the change in control of the Company and the acquisition by Eastern Trading Company of a
56.92% interest in the Company from AHI, Messrs. I Darsot, MN Darsot, B Darsot, S Darsot and R Darsot
were appointed to the board with effect from 17 August 2012, initially in the capacity of non-executive
directors, but with effect from 21 September 2012, as executive directors.
Subsequent to the period end Messrs S Naidoo, S Soni and Ms N Mthethwa, resigned as independent
non-executive directors with effect from 24 October 2012, whilst Messrs MS Appelgryn and H Takolia
were appointed as independent non-executive directors with effect from 13 December 2012. Mr R
Noorbhai was appointed as a non-executive director with effect from 9 January 2013.
DIVIDENDS
No dividends were declared during the period. (2011: Nil).
CHANGE IN YEAR END
The Company will be changing its year end from 31 March to 30 June each year, in line with that of its
holding company. The Company will publish reviewed results for the 12 month period ending 31 March
2013 in accordance with the JSE Listing Requirements.
FUTURE PROSPECTS
Following the change in control of the Company and due to the unavailability of the Clayville factory
development and the current Talton factory lease coming to an end, the factory premises will be moved to
the 200-acre estate in Eikenhof, Johannesburg, from which all of the other businesses owned by Eastern
Trading Company are operated.
Although production disruptions in the first half of 2013 are expected as a consequence of “teething
problems” associated with a new factory, management are confident that any losses incurred as a result
thereof will be recovered in the second half of 2013 with an increase in sales volumes as a result of the
commissioning of a new high speed “state of the art” production and packaging plant.
CAUTIONARY ANNOUNCEMENT
Due to the issues surrounding stock and the cancellation of the factory lease as detailed above,
shareholders are advised to exercise caution when dealing in their securities until a further announcement
is made.
Johannesburg
14 January 2013
Directors:
Executive Directors: I Darsot (Chairman/CEO); MN Darsot; B. Darsot; S.Darsot; R. Darsot; MT Pather;
MA Hill;
Non-Executive Directors: H Takolia*; MS Appelgryn*; R Noorbhai
(*independent)
Registered address
Arcay House, No. 3 Anerley Road, Parktown 2193
Designated Advisors Transfer secretaries
Arcay Moela Sponsors (Pty) Ltd Computershare Investor Services (Pty) Ltd
Auditors Company Secretary
PKF (Pta) Inc. Arcay Client Support (Pty) Ltd
Date: 14/01/2013 05:49:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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