Wrap Text
Unaudited Condensed Interim Results For The Six Months Ended 31 August 2012
Nutritional Holdings Limited
Reg no 2004/002282/06
(Incorporated in the Republic of South Africa)
("The Group" or "The Company")
Share code : NUT ISIN code : ZAE000156485
UNAUDITED CONDENSED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST
2012
Financial Highlights
Net Asset Value per Share (cents) 2.48
Gearing 1.4%
The unaudited financial statements are presented on a consolidated basis
Unaudited Unaudited Audited
Condensed consolidated income six months six months year ended
statement
for the period ended 31 Aug 2012 31 Aug 2011 29 Feb 2012
R’000 R’000 R’000
Revenue 17,527 22,809 41,067
Cost of Sales (8,127) (12,408) (21,055)
Gross Profit 9,400 10,401 20,012
Operating loss before interest (3,689) (2,249) (5,319)
Reversal of impairment of - 7,200 7,200
intangible asset
Finance costs (352) (238) (577)
Finance income 166 346 577
Profit (loss) before taxation (3,875) 5,059 1,881
Taxation 11 757 738
Profit (loss) for the period (3,864) 5,816 2,619
Other comprehensive income:
Gain on property revaluation - 2,909 2,909
Taxation related to components
of other comprehensive income - (814) (797)
Other comprehensive income for
the period net of taxation - 2,095 2,112
Attributable to ordinary
shareholders (3,864) 7,911 4,731
(Loss)/Earnings per share (0.26) 0.49 0.20
(cents) – basic and diluted
Headline (loss)/earnings per
share (cents) – basic and (0.26) (0.12) (0.35)
diluted
Number of ordinary shares in issue (000)
- issued net of treasury 1,517,368 1,362,368 1,489,768
shares
- weighted-average 1,512,768 1,180,424 1,297,890
- Diluted weighted-average 1,512,768 1,180,424 1,297,890
Calculation of headline earnings (R’000)
(Loss)/Profit for the period (3,864) 5,816 2,619
Reversal of impairment of - (7,200) (7,200)
intangible assets
Loss on disposal of property, - - 3
plant and equipment
Headline (loss)/earnings (3,864) (1,384) (4,578)
attributable to ordinary
shareholders
Unaudited Unaudited Audited
Condensed consolidated six months six months year ended
statement of financial 31 Aug 2012 31 Aug 2011 29 Feb 2012
position
for the period ended
R’000 R’000 R’000
ASSETS
Non-current assets
Property, plant and equipment 14,427 14,498 14,251
Intangibles 18,966 18,763 18,943
Deferred taxation 8,559 9,621 8,757
Finance lease receivables - 600 -
41,952 43,482 41,951
Current assets
Inventories 3,434 5,547 4,829
Trade and other receivables 5,323 7,473 6,268
Loans receivable 9 4 9
Finance lease receivables 684 949 1,147
Bank balance and cash 400 439 630
9,850 14,412 12,883
TOTAL ASSETS 51,802 57,894 54,834
EQUITY AND LIABILITIES
Capital and reserves
Share capital 124,059 120,410 123,231
Reserves 5,659 5,642 5,659
Retained earnings (92,045) (84,982) (88,181)
Total shareholders' funds 37,673 41,070 40,709
Non-current liabilities
Interest-bearing borrowings 259 242 30
Deferred taxation 3,392 4,463 3,600
3,651 4,705 3,630
Current liabilities
Trade and other payables 4,210 9,105 4,277
Loans from related parties - 500 -
Taxation - 141 -
Bank overdraft 5,981 1,629 5,631
Current portion of interest- 287 744 587
bearing borrowings
10,478 12,119 10,495
TOTAL EQUITY AND LIABILITIES 51,802 57,894 54,834
Net asset value per share 2.48 3.01 2.73
(cents)
Unaudited Unaudited Audited
Condensed consolidated six months six months year ended
statement of cash flows for 31 Aug 2012 31 Aug 2011 29 Feb 2012
the period ended
R’000 R’000 R’000
Cash utilised by operations (1,115) (5,176) (10,930)
Finance costs (352) (238) (577)
Finance income 166 346 577
Taxation refunded - - (141)
Cash flows from operating (1,301) (5,068) (11,071)
activities
Cash flows from investing (495) 239 (270)
activities
Cash flows from financing 1,216 5,915 8,616
activities
Net (decrease)increase in cash (580) 1,086 (2,725)
and cash equivalents
Cash and cash equivalents at (5,001) (2,276) (2,276)
beginning of period
Cash and cash equivalents at (5,581) (1,190) (5,001)
end of period
Condensed consolidated statement of changes in equity for the period ended
31 August 2012
Share Share Trea- Total Reval- Re- Total
capital premium sury stated uation tained ordinary
shares capital reserve Earn- Share-
ings holders'
funds
R’000 R’000 R’000 R’000 R’000 R’000 R’000
Balance at 28 114 113,188 113,302 3,547 (90,799) 26,050
February 2011 -
audited
Total - 2,095 5,817 7,912
comprehensive
loss for the
period
Issue of shares 7,108 7,108 7,108
Balance at 31 7,222 113,188 120,410 5,642 (84,982) 41,070
August 2011 –
unaudited
Issue of shares 9,562 (6,741) 2,821 2,821
Conversion of 113,188 (113,188) - -
shares to no
par value
Total - 17 (3,199) 3,182)
comprehensive
income for the
period
Balance at 29 129,972 - (6,741) 123,231 5,659 (88,181) 40,709
February 2012 -
audited
Issue of shares 828 828 828
Total - (3,864) (3,864)
comprehensive
loss for the
period
Balance at 31 130,800 - (6,741) 124,059 5,659 (92,045) 37,673
August 2012 -
unaudited
Condensed Group segmental analysis
Nutritional Pharmaceutical Services Consolidated
Foods
R’000 R’000 R’000 R’000
Business segments
for the six months ended 31
August 2012 - unaudited
Revenue from external sales 14,833 2,694 - 17,527
Profit (Loss) before tax (1,340) 288 (2,823) (3,875)
Taxation 11
Loss for the period (3,864)
for the six months ended 31
August 2011 - unaudited
Revenue from external sales 20,901 1,908 - 22,809
Profit (Loss) before tax (1,005) 207 5,857 5,059
Taxation 757
Profit for the period 5,816
for the year ended 29
February 2012 - audited
Revenue from external sales 37,393 3,674 - 41,067
Profit (Loss) before tax 2,713 4,501 (5,333) 1,881
Taxation 738
Profit for the year 2,619
For management purposes the Group is organised into three major operating
divisions, namely Nutritional Foods, Pharmaceuticals and Services. These
divisions are the basis on which the Company reports its primary segment
information.
Basis of presentation
The condensed interim financial statements have been prepared in
accordance with International Financial Reporting Standards (“IFRS”)
and IAS 34 – Interim Financial Reporting as issued by the International
Accounting Standards Board (IASB), AC500, the Listing Requirements of
the JSE Limited and the South African Companies Act No 71 of 2008, as amended.
They have been prepared on the historical cost basis, except for certain
financial instruments which are measured at fair value or at amortised cost.
The significant accounting policies and methods of computation are consistent
in all material respects with those applied in the previous financial year,
except for the adoption of improved, revised or new standards and interpretations. The aggregate effect of these changes in respect of the period ended 31 August 2012 is nil.
The condensed financial results have been prepared under the supervision of the
Chief Financial Officer, CD Angus CA(SA).
Nature of business
The Group’s primary business focus is to manufacture, market and sell
high-protein fortified nutritional food products made from soya, sorghum
and maize as well as the sale of pharmaceutical and complementary medicines
and supplements.
Overview
The first half of the financial year has been particularly challenging
for the Group with revenue dropping as a result of pressure on the low
margin tender based market. Consequently the Group’s results show a
significant drop in earnings. This has prompted a review of the
management structure as well as its core markets. To this end the Board
has appointed a new Chief Executive Officer, to oversee the “ turnaround”
of the Group’s operations, effective 30 November 2012. The incumbent CEO
has been working closely with the Board over the past two months
formalising a “turnaround” strategy. Going forward the Group will be
refocusing its operations towards the FMCG wholesale market as well as
reviewing its product range.
The effect of these changes is expected to have a positive influence in
the Group’s performance in the next 12 to 18 months.
The process of rationalisation and re-focusing of the Group’s core
businesses will necessitate the raising of capital to fund the
restructure process. The finalisation of this process is expected by the
end of the current financial year.
Financial overview
Headline earnings declined by 178.8% to a loss of R3,864 million from a
loss of R1,384 million for the same corresponding period the previous
year as a result of a reduction in revenue.
Revenue decreased by 23.2% from R22,8 million to R17,5 million mostly
caused by lower sales in the Nutritional Foods division.
The operating losses increased by 64% due to the reduction in revenue due
to pressure on the Group’s traditional markets resulting in them cutting
back on orders. This situation has prompted management to re-look at its
traditional market base with a view to moving from the low margin tender
market to the FMCG wholesale market.
Earnings per share decreased by 152.9% from a profit per share of 0.49
cents to a loss per share of 0.26 cents. Headline earnings per share
decreased by 116.7% from a loss per share of 0.12 cents to a loss per
share of 0.26 cents per share.
The net debt (borrowings less cash and cash equivalents) to equity ratio
has reduced to 1.4% compared to 2.4% at 31 August 2011.
Events after the reporting period
Mr Henk van der Merwe resigned as Chief Executive Officer with effect
from 31 October 2012.
Mr Rob Etchells has been appointed as Chief Executive Officer with effect
30 November 2012.
There are no other material events after the period ended 31 August 2012
to report on.
Going Concern
Shareholders are advised that the unaudited interim results for the six
months ended 31 August 2012 have been prepared on the going concern
concept. The annual report for the year ended 28 February 2012 contained
emphasis of matter as to going concern and the directors’ report
emphasised the need for the Company to be able to raise additional
funding through, inter alia, the issue of shares. As mentioned in the
overview this is being pursued.
Changes to the Group’s Board
The following changes to the board of directors transpired during the
past financial period, and to the date of this report, mainly as a result
of the restructuring of the Group:
J Etchells resigned as Financial Director on 31 May 2012 and C Angus was
appointed as Chief Financial Officer on 1 June 2012.
J Etchells appointed as non-executive Director on 31 May 2012.
C Angus resigned as independent non-executive Director on 01 June 2012.
J Ellis and J Louw appointed as independent non-executive Directors on 12
July 2012.
H van der Merwe resigned as Chief Executive Officer on 31 October 2012.
R Etchells appointed as Chief Executive Officer on 30 November 2012.
On behalf of the Board
CD Angus CA(SA)
Chief Financial Officer
Umhlanga Rocks
30 November 2012
Registered Office:
First Floor, 9 Frosterley Park, La Lucia Ridge, 4019
Tel: +27 31 584 7100
Designated advisors:
PSG Capital Proprietary Limited
Transfer secretaries:
Link Market Services South Africa Proprietary Limited, 13th Floor, Rennie
House, 19 Ameshoff, Braamfontein, 2001
Directors:
CD Angus (Chief Financial Officer), JC Ellis (Independent Non-executive),
RS Etchells (Chief Executive Officer),JA Etchells (Non-executive), TR
Hendry (Independent Non-executive), JD Louw (Independent Non-executive),
GR Wambach (Independent Non-executive Chairman)
Date: 30/11/2012 05:07:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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