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LAB - Labat Africa Limited - Unaudited interim results for the six months

Release Date: 30/11/2011 17:14
Code(s): LAB
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LAB - Labat Africa Limited - Unaudited interim results for the six months ended 31 August 2011 and withdrawal of cautionary 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 31 AUGUST 2011 AND WITHDRAWAL OF CAUTIONARY CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Unaudited Unaudited Audited 6 months 6 months 12 months
31 August 31 August 28 2011 2010 February 2011 R`000 R`000 R`000
Revenue 8,133 13,268 29,915 Continuing operations 8,133 13,268 27,550 Discontinued operations - - 2,365
Operating (loss)/profit before (1,098) 3,610 (2,817) depreciation, interest, taxation and fair value adjustments Continuing operations 1,210 7,391 3,510 Discontinued operations (2,308) (3,781) (6,327) Depreciation (311) (436) (883) Continuing operations (100) (155) (99) Discontinued operations (211) (281) (784) Operating (loss)/profit before (1,409) 3,174 (3,700) interest and taxation Continuing operations 1,110 7,236 3,411 Discontinued operations (2,519) (4,062) (7,111)
Interest paid - (1,331) (860) Continuing operations - (140) (133) Discontinued operations - (1,191) (727)
Interest received - 3 175 Continuing operations - 3 175 Discontinued operations - - -
(Loss)/profit before taxation, (1,409) 1,846 (4,385) sale and fair value adjustments Continuing operations 1,110 7,099 3,454 Discontinued operations (2,519) (5,253) (7,839) Fair value adjustments- 7,560 (5,825) 15,977 discontinued operations Impairment of financial asset - (968) - Expenses relating to - (4,857) (1,023) discontinued operations Gain on impairment of 7,560 - 17,757 loan/reversal of provision for interest Impairment of plant and - - (757) equipment
Profit/(loss) before taxation 6,151 (3,979) 11,592 Continuing operations 1,110 7,099 3,454 Discontinued operations 5,041 (11,078) 8,138
Income tax - - (118) Profit /(loss) for the period 6,151 (3,979) 11,474 after taxation Continuing operations 1,110 7,099 3,454 Discontinued operations 5,041 (11,078) 8,020 Attributable to Shareholders of Labat Africa 6,151 (3,979) 11,474 Limited Reconciliation of headline earnings Basic profit/(loss) 6,151 (3,979) 11,474 Sale of assets (49) - (1,050) Impairment of plant ,equipment - 968 1,780 and divisions Headline earnings/(loss) for 6,102 (3,011) 12,204 the period Weighted Shares in issue 197,155 197,155 197,155 throughout the period (`000) Basic profit/( loss) per share 3.1 (2.0) 5.8 (cents) -Continuing operations 0.5 3.6 1.8 -Discontinued operations 2.6 (5.6) 4.0 Headline profit/( loss) per 3.1 (1.5) 6.2 share (cents) -Continuing 0.5 3.6 1.8 -Discontinuing 2.6 (5.1) 4.4 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION Unaudited Unaudited Audited at at at 31 August 31 August 28
2011 2010 February 2011 R`000 R`000 R`000 ASSETS Non-current assets 672 566 539 Property, plant and equipment 402 387 360 Intangible asset 91 - - Other financial asset 179 179 179 Current Assets 9,552 11,024 12,267 Inventories 3,985 1,195 3,091 Trade and other receivables 3,341 6,430 4,376 Cash and cash equivalents 2,226 3,399 4,800 Assets of disposal group 36,362 37,703 35,026 classified as held for sale TOTAL ASSETS 46,586 49,293 47,832 EQUITY AND LIABILITIES Share capital and reserves (34,121) (55,970) (40,518) Long-term liabilities 11,992 5,916 11,340 Current Liabilities 4,547 10,696 4,789 Trade and other payables 4,547 10,696 4,789 Liabilities of disposal group 64,168 88,651 72,221 classified as held for sale TOTAL EQUITY AND LIABILITIES 46,586 49,293 47,832 Number of shares in issue 197,155 197,155 197155 (`000) Total Net asset value per share (9.5) (20.5) (12.7) (cents) CONDENSED GROUP STATEMENT OF CASHFLOWS Unaudited Unaudited Audited 6 months 6 months 12 months 31 August 31 August 28 2011 2010 February
2011 R`000 R`000 R`000 Net flow from operating (1,709) 7,024 (5,585) activities Net flow from investing (809) (8,149) 4,101 activities Net flow from financing (56) (313) 4,840 activities Net (decrease)/increase in (2,574) (1,438) 3,356 cash Cash at beginning of period 4,800 1,444 1,444 Cash at end of period 2,226 6 4,800 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY R`(000) Share Share Treasury Distri- Total Capita Premiu Shares butable Capital l m Reserves and reserves Balance 1,972 49,065 (482) (91,073) (40,518) at 1 March 2011 Profit 6,151 6,151 for the period Adjust- 246 246 ments relatin g to disposa l group Balance 1,972 49,065 (482) (84,676) (34,121) at 31 August 2011 Notes to the Interim Report 1. Discontinued Operations 31 August 31 August 28 February 2011 2010 2011 R`000 R`000 R`000 Assets Fixed Assets 32,700 34,618 33,651 Intangible Assets 1,710 - 1,375 Other assets 1,952 3,085 - 36,362 37,703 35,026
Liabilities Non Distributable 15,461 15,462 15,461 reserves Long term liabilities 26,460 34,020 34,020 Current liabilities 15,012 31,934 15,505 Deferred tax 7,235 7,235 7,235 64,168 88,651 72,221
Cash flow Net operating activities (3,232) (5,005) (11,163) Net investing activities- 1,505 - - sale of assets Net decrease in cash and (1,727) (5,005) (11,163) cash equivalents Condensed Segment Report 2. R`000 R`000 R`000 Revenue by Segment 8,133 13,268 29,915 Technology 8,133 13,268 29,915 Other operations - - - Profit/(loss) from (1,098) 3,610 (2,817) operations before finance costs, depreciation and fair value adjustments by segment Technology 617 3,884 713 Other operations* (1,715) (274) (3,530) Trade and Accounts 4,547 10,696 4,789 payable by segment Technology 731 5,944 1,181 Other operations 3,816 4,752 3,608
Intangible assets 91 - - Technology 91 - - Other operations - - -
Trade and Accounts 3,341 6,430 4,376 receivable by segment Technology 3,337 5,116 4,372 Other operations 4 1,314 4 Long Term Liabilities by 11,992 5,916 11,340 segment Technology - - - Other operations 11,992 5,916 11,340 Non Current Assets 402 387 360 Technology 376 328 328 Other operations 26 59 32 * Other operations incorporate the company, group adjustments and eliminations. COMMENTARY RESULTS The group is pleased to report positive results for the period under review. Total comprehensive income for the period was R6,1 million versus a loss of (R3,9) million for the corresponding period ended 31 August 2010. Continuing Operation The continuing operation which constitutes the Integrated Circuit ("IC") business is operating profitably but has suffered a decline in revenue due to a fall in world demand. Manufacturing has been completely transferred to the plant in China and production quality and margins are very satisfactory. Research and Development The Company has embarked on a major, two year, R&D programme to re-design all existing products to 0.5 micron. At the same time the products will be enhanced to meet customer needs. Some of the design work will be outsourced due to the acute shortage of suitably qualified designers in South Africa. Discontinuing Operations The old SAMES facilities have been completely closed and the remaining assets including the properties are being disposed of. The process of selling some of the fixed assets is going well and is expected to be completed within the next financial year and a buyer is being sought for the property. Prospects The current IC business is doing well and its prospects are good. Capacity constraints relating to the closed manufacturing plant no longer exist and our emphasis is now on growing our market and developing new and improved products. Acquisitions The group is now focused on expansion by acquisition and has identified several areas for targeted acquisitions. The GEM $100 million line of credit as previously announced will be used to fund suitable large acquisitions in pharmaceuticals, mining and in property investments. Pharmaceuticals The SAMES property has proven to be too small to house a 1000 ton production facility, which is the optimum size and, an alternative site is being sought. Phase two of the project is now being commenced in conjunction with the IDC. Mining Various discussions are taking place with a view to identifying suitable mining acquisitions. Basis of preparation The condensed group interim financial statements of Labat Africa Limited for the six months ended 31 August 2011 comprise the company and its subsidiary. The condensed consolidated interim financial statements are prepared in accordance with International Financial Reporting Standards, International Accounting Standard (IAS 34) Interim Financial Reporting, and in the manner required by the Companies Act of South Africa, 71 of 2008. The accounting policies applied by the group in these condensed group interim financial statements are consistent with those applied by the group in the audited financial statements for the year ended 28 February 2011. These interim results are unaudited and have not been reviewed by the auditors. Withdrawal of Cautionary Shareholders are referred to the SENS announcements dated 29 August 2011 and 11 October 2011 and are advised that as the negotiations mentioned there-in have been terminated, the said cautionary announcements are withdrawn. Corporate Governance The group subscribes to the values of good corporate governance at all levels and is committed to conducting business with discipline, integrity and social responsibility. Post Balance Sheet Events Management is not aware of any material events which occurred subsequent to the period ended 31 August 2011. Dividends In line with group policy, no dividend has been declared. The directors are not recommending the payment of a dividend until the negative equity position of the group has been reversed. Going Concern The board of directors is of the opinion that the group has sufficient resources to continue as a going concern. For and on behalf of the board. B G VAN ROOYEN Prepared by: D Asmal CA(S.A.) CEO 30 November 2011 Directors: B van Rooyen (CEO), D Asmal CA(S.A.) (FD), D O`Neill, B Jacobs, D Lupungela Company Secretary: A Britto Sponsors Arcay Moela Sponsors (Pty) Ltd Date: 30/11/2011 17:14:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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