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AHL - AH-VEST Limited - Unaudited results for the six months ended 30 September
2011 and withdrawal of cautionary announcement
AH-VEST LIMITED
(Formerly All Joy Foods 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 2011 AND WITHDRAWAL OF
CAUTIONARY ANNOUNCEMENT
Condensed statement of financial position
Unaudited six Year Unaudited six
months ended ended months ended
30 September 31 March 2011 30 September 2010
2011
R R R
Assets
Non-current Assets 15 081 875 15 704 204 14 009 086
Property, Plant & 13 521 669 14 143 998 12 448 880
Equipment
Deferred tax 450 000 450 000 450 000
Intangible asset 1 110 206 1 110 206 1 110 206
Current Assets 33 187 821 28 435 725 31 348 927
Inventories 15 626 233 10 267 639 9 448 544
Loans to fellow - - 2 736 462
subsidiary
Loan to staff members - 28 715 -
Trade & other receivables 15 756 793 12 366 198 13 816 461
Cash & cash equivalents 1 804 795 5 773 173 5 347 460
Total Assets 48 269 696 44 139 929 45 358 013
Equity and Liabilities
Capital and Reserves 17 750 606 15 439 874 19 097 998
Share capital 21 293 071 21 293 071 21 293 071
Reserves 4 668 610 4 688 610 4 688 610
Accumulated loss (8 231 075) (10 541 807) (6 883 683)
Non current liabilities 11 988 671 11 845 571 475 398
Finance lease obligation 321 250 442 484 -
Operating lease liability 77 241 97 101 141 106
Other financial 11 590 180 11 305 986 334 292
liabilities
Current liabilities 18 530 419 16 854 484 25 784 617
Other financial 1 453 179 1 169 470 13 310 009
liabilities
Finance lease obligation 252 086 286 266 51 112
Trade and other payables 16 825 154 15 398 748 12 423 496
Total Equity and 48 269 696 44 139 929 45 358 013
Liabilities
Net asset value per share 17.41 15.14 18.73
(cents)
Tangible net asset value 16.32 14.05 17.20
per share (cents)
Share in issue at period 101 973 333 101 973 333 101 973 333
end (`000)
Condensed statement of comprehensive income
Unaudited six Year Unaudited six
months ended ended months ended
30 September 31 March 2011 30 September 2010
2011
R R R
Revenue 51 994 636 88 284 479 42 855 354
Cost of Sales (31 186 738) (55 741 723) (25 223 659)
Gross profit 20 807 898 32 542 756 17 631 695
Other income 110 074 134 026 93 251
Operating expenses (18 002 365) (34 264 594) (16 060 460)
Operating profit before 2 915 607 (1 587 812) 1 664 486
finance costs
Investment income 4 221 474 423 242 490
Finance costs (609 096) (1 334 760) (697 001)
Profit/(Loss) before tax 2 310 732 (2 448 149) 1 209 975
Taxation - - -
Profit/(Loss) for the 2 310 732 (2 448 149) 1 209 975
period
Other comprehensive
income
Gains and losses on - - -
property revaluation
Taxation related to - - -
components of other
comprehensive income
Other comprehensive - - -
income for the year net
of taxation
Total comprehensive 2 310 732 (2 448 149) 1 209 975
income/(loss)
Earnings before 3 830 582 2 746 081 2 284 646
interest, taxation,
depreciation and
amortisation ("EBITDA")
Depreciation (914 975) (4 333 893) (620 160)
Amortisation
Investment income 4 221 474 423 242 490
Finance cost (609 096) (1 334 760) (697 001)
Profit/(loss) before 2 310 732 (2 448 149) 1 209 975
taxation
Attributed to:
Equity holders of the 2 310 732 (2 448 149) 1 209 975
company
Minority interest - - -
Headline Profit/(loss)
calculation:
Profit/(Loss) attributed 2 310 732 (2 448 149) 1 209 975
to equity holders of the
company
Adjusted for: - - -
Headline earnings/(loss) 2 310 732 (2 448 149) 1 209 975
Weighted average shares 101 973 333 101 973 333 101 973 333
in issue
Diluted weighted average 101 973 333 101 973 333 101 973 333
shares in issue
Per share information
(cents)
Earnings/(Loss) per 2.27 (2.40) 1.19
share
Diluted earnings/(loss) 2.27 (2.40) 1.19
per share
Headline earnings/(loss) 2.27 (2.40) 1.19
per share
Diluted Headline 2.27 (2.40) 1.19
earnings/(loss) per
share
Statement of changes in equity
Unaudited six Year Unaudited six
months ended ended months ended
30 September 31 March 2011 30 September 2010
2011
R R R
Capital and reserves 21 293 071 21 293 071 21 293 071
Revaluation of Land and 4 668 610 4 668 610 4 668 610
Buildings
Shares issued - - -
Share issue expenses - - -
Accumulated net (8 231 075) (10 541 807) (6 883 683)
profit/(loss) for the
year
Capital and reserves 17 750 606 15 439 874 19 097 998
Condensed statement of cash flows
Unaudited six 12 months Unaudited six
months ended ended months ended
30 September 31 March 30 September
2011 2011 2011
R R R
Net cash from operating (4 098 234) 6 781 622 3 183 551
activities
Net cash used in (3 508 651) (1 754 828)
investing activities
Net cash generated 422 502 (2 178 689) (760 154)
by/(used in) financing
activities
Net increase in cash and (3 968 378) 1 094 282 668 569
cash equivalents
Cash and cash equivalents 5 773 173 4 678 891 4 678 891
at the beginning of
period
Cash and cash equivalents 1 804 795 5 773 173 5 347 460
at end of period
COMMENTARY
The board is pleased to present the unaudited results for the six months ended
30 September 2011.
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 22.0% to R51 994 636 for the six months to September
2011 when compared to the previous six month period. Sales revenue to budget is
3.5% up. This performance can be attributed, but not limited to, the growth in
the All Joy and Veri Peri brands market share.
The Veri Peri production line and Tomato Sauce production line has been
producing the required volumes competitively and demand for both these product
categories have been significantly higher in the period under review.
The increased volumes in this reporting period under review has supported the
improvement in gross profits by around 18%.
The Company has controlled and managed operating expenses, however electricity,
boiler fuel, transport and staff costs are higher, which is an industry norm.
This lead to an overall increase in operating costs of around 18%. The Company
is contemplating and reviewing alternates to deal with these increasing costs
going forward.
EBITDA increased by 66% as demonstrated above, which shows the sound fundamental
growth in the business whilst profit before taxation increased by over 90%
compared to the prior six month period.
The Company took a strategic decision to increase its finished goods
inventories, to ensure that it does not lose sales in the festive period and
with the 22% increase in sales, the trade accounts receivable has increased
significantly, which has strained the cash-flow. However, strong relationships
built over two decades with the Company`s suppliers has assisted the Company
with its growth in the short term. Plans are in place to address the Company`s
growth requirements in terms of additional funding.
SEGMENTAL ANALYSIS
No segmental analysis has been presented as the company operates primarily
within South Africa. The Group will adopt the IFRS 8: Operating Segments
standard for the first time in the 2011 financial statements.
Customer Analysis
Customer A 47% of Revenue
Customer B 33% of Revenue
ACQUISITIONS AND DISPOSALS
There were no acquisitions or disposals during the year under review.
ISSUE OF SHARES
There were no share issues during the year under review.
CHANGE IN BOARD OF DIRECTORS
Antonio Gonsalves resigned from the Board with effect from 18 July 2011, Mutumwa
Dziva Mawere with effect from 30 September 2011 and Parmanathan Mariemuthu with
effect from 8 November 2011. Buhle Mthethwa has been appointed as the interim
independent non-executive chairperson with effect from 11 November 2011. No
other changes to the board were made during the period under review and to the
date of this report. The Board is aware of the necessity of appointing
additional independent directors to fill the vacancies left by these
resignations and announcement in this regard will be made in due course.
DIVIDENDS
No dividends were declared during the period. (2010: Nil).
PROPOSED DELISTING AND WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Ongoing discussions regarding the potential delisting of the Company, as
announced on SENS on 31 December 2010, which noted that a proposed offer to
minorities be made by AH-Vest by way of a repurchase of shares have been
terminated due to the company requiring its cash flow to fund the growth levels
currently being experienced. Accordingly, shareholders are advised that the
cautionary announcement issued in relation thereto is withdrawn.
FUTURE PROSPECTS
Veri Peri, the group`s hot sauce brand has achieved FDA approval and the Company
will ship its first consignment into New York City later this year. Veri Peri
is a uniquely African brand and the Company intends targeting the export market
with the brand.
The Rand has depreciated to the Dollar and whilst this puts pressure on the
costs of the raw material that is imported, this represents a maximum of 15% of
volumes. The Rand also has a secondary impact, through the increase in prices
on certain packaging material. However, it also presents an opportunity because
"buying local" is expected to improve production volumes.
The next six months is the Company`s favoured period of the year as more sauces
are consumed in the summer and the festive period. The Company has launched a
range of products packaged, for convenient "out of home" use in "single serving
sachets" suitable for braais, picnics and camping.
The Company will target new users and the emerging market with the 50g single
serving sachet and expects to continue to delight its customers by recognising
local tastes. The Company is optimistic about the continued growth prospects
for the future, in line with its budgeted sales and profits
OTHER MATTERS
Shareholders are advised that a court has ruled that the shareholding, which was
the subject of a dispute, be transferred from Africa Heritage Properties
(Proprietary) Limited to Africa Heritage Investments (Proprietary) Limited, (in
liquidation), both of which the ultimate beneficiaries are the members of the
Africa Heritage Society. The Takeover Regulation Panel has been consulted and
the Company is not required to take any further action in this regard. Whilst
this does not have a direct impact on the Company, it is likely that this
shareholding will remain the subject of an on-going dispute for the foreseeable
future and the Company will continue to keep stakeholders properly informed.
SUBSEQUENT EVENTS
There were no subsequent events that require disclosure at the date of this
announcement.
Johannesburg
15 November 2011
Directors:
Executive Directors: MT Pather (CEO); M Hill (FD);
Non-Executive Directors: B Mthethwa; R Manning
Registered address
Arcay House, No. 3 Anerley Road, Parktown 2193
Designated Advisors Transfer secretaries
Arcay Moela Sponsors Computershare Investor Services
(Proprietary) Limited (Pty) Ltd
Auditors Company Secretary
PKF Gauteng. Arcay Client Support (Proprietary)
Limited
Date: 15/11/2011 14:20:01 Supplied by www.sharenet.co.za
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