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NUT - Nutritional Holdings Limited - Abridged annual financial results for the

Release Date: 23/05/2012 15:49
Code(s): NUT
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NUT - Nutritional Holdings Limited - Abridged annual financial results for the year ended 29 February 2012 and notice of the Annual General Meeting Nutritional Holdings Limited (Previously Imuniti Holdings Limited) Reg no 2004/002282/06 (Incorporated in the Republic of South Africa) ("the Group" or "the Company") Share code : NUT ISIN : ZAE000156485 ABRIDGED ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2012 AND NOTICE OF THE ANNUAL GENERAL MEETING Financial Highlights Increase in Earnings per Share 33.3% Increase in Net Asset Value per Share 17.4% Increase in Gross Profit percentage to 48.7% The audited financial results are presented on a consolidated basis Condensed consolidated Statement Audited Audited of Comprehensive Income for the year ended year ended year ended 29 Feb 2012 28 Feb 2011 R`000 Revenue 41 067 46 708 Gross Profit 20 012 21 712 Other income 272 481 Operating expenses (25 603) (26 737) Impairment reversal - Distribution rights 7 200 - Finance costs (577) (1 070) Investment revenue 577 1 039 Profit (loss) before taxation for 1 881 (4 575) the year Taxation 738 6 239 Profit for the year 2 619 1 664 Other comprehensive income: Gain on property revaluation 2 909 3 900 Taxation related to components of other comprehensive income (797) (1 022) Other comprehensive income for the year net of taxation 2 112 2 878 Total comprehensive income for the year 4 731 4 542 Earnings per share (cents) - basic and diluted 0.20 0.15 Headline (loss) earnings per share (cents) - basic and diluted -0.35 0.14
Number of ordinary shares in issue (000) - issued net of treasury shares 1 489 768 1 144 035 - weighted-average 1 297 890 1 120 493 - Diluted weighted-average 1 297 890 1 120 493 Calculation of headline earnings (R`000) Total profit for the year 2 619 1 664 Reversal of impairment of distribution rights (7 200) - Loss (profit) on disposal of property, plant and equipment 3 (83) Headline (loss) earnings attributable to ordinary shareholders (4 578) 1 581 Condensed Consolidated Statement Audited Audited of Financial Position year ended year ended for the year ended 29 Feb 2012 28 Feb 2011 R` 000 ASSETS Non-current assets Property, plant and equipment 14 251 11 656 Intangible assets 18 943 11 694 Deferred tax 8 757 8 486 Finance lease receivables - 1 147 41 951 32 983
Current assets Inventories 4 829 3 999 Trade and other receivables 6 268 6 439 Loans receivable 9 8 Finance lease receivables 1 147 751 Cash and cash equivalents 630 56 12 883 11 253
TOTAL ASSETS 54 834 44 236 EQUITY AND LIABILITIES Equity Stated capital 123 231 113 302 Reserves 5 659 3 547 Accumulated loss (88 181) (90 800) 40 709 26 049 Non-current liabilities Interest-bearing borrowings 30 601 Deferred tax 3 600 3 270 3 630 3 871 Current liabilities Trade and other payables 4 277 9 764 Loans payable - 1 200 Current tax payable - 141 Bank overdraft 5 631 2 332 Current portion of interest- bearing borrowings 587 879 10 495 14 316
TOTAL EQUITY AND LIABILITIES 54 834 44 236 Net asset value per share (cents) 2.7 2.3 Condensed consolidated Audited Audited statement of cash flows year ended year ended for the year ended 29 Feb 2012 28 Feb 2011 R` 000 Cash utilised by operations (10 930) (2 042) Finance costs (577) (1 070) Investment revenue 577 1 039 Taxation (paid) refunded (141) 547 Cash flows from operating activities (11 071) (1 526) Cash flows from investing activities (270) 2 495 Cash flows from financing activities 8 616 (1 229) Total cash movement for the year (2 725) (260) Cash and cash equivalents at beginning of year (2 276) (2 016) Cash and cash equivalents at end of year (5 001) (2 276) Condensed Consolidated Statement of Changes in Equity Share/Stated Share Treasury for the year ended capital premium Shares 29 February 2012 R` 000 Balance at 28 February 2010 - audited 109 112 549 Issue of shares 5 639 Total comprehensive income for the year Balance at 28 February 2011 - audited 114 113 188 Issue of shares 16 670 (6 741) Conversions of shares to no par value 113 188 (113 188) Total comprehensive income for the year Balance at 29 February 2012 129 972 - (6 741) Total Accumulated equity loss
R` 000 Revaluation reserve Balance at 28 February 2010 - audited 669 (92 464) 20 863 Issue of shares 644 Total comprehensive income for the year 2 878 1 664 4 542 Balance at 28 February 2011 - audited 3 547 (90 800) 26 049 Issue of shares 9 929 Conversions of shares to no par value Total comprehensive income for the year 2 112 2 619 4 731 Balance at 29 February 2012 5 659 (88 181) 40 709 Condensed Group segmental analysis for the year ended 29 February 2012 - audited Operating Nutritional Pharmaceutical Services Consolidated Segments Foods R`000 Revenue from external sales 37 393 3 674 - 41 067 Segment profit (loss) before tax 4 825 4 501 (5 333) 3 993 Taxation 738 Segment profit for the year 4 731 for the year ended 28 February 2011 - audited Revenue from external sales 43 327 3 381 - 46 708 Segment profit (loss) before tax (1 422) 122 (397) (1 697) Taxation 6 239 Segment profit for the year 4 542 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 it primary segment information. The Nutritional Foods division involves the manufacture of high-protein and fortified powdered food and food supplements. The Pharmaceutical division involves the supply of pharmaceutical, complimentary and natural medicines. The Services involves the providing of administration and management services. These operating segments are monitored by the Group`s chief decision-maker and strategic decisions are made on the basis of adjusted segment operating results. BASIS OF PRESENTATION The condensed financial results for the year ended 29 February 2012 have been prepared in accordance with International Financial Reporting Standards ("IFRS"), the presentation and disclosure requirements of IAS 34, AC 500 standards issued by the Accounting Practices Board, the Listing Requirements of the JSE Limited and the requirements of the 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 year ended 29 February 2012 is nil. The condensed financial results have been prepared under the supervision of the Financial Director, JA Etchells CA(SA). NATURE OF BUSINESS The Group`s primary business focus is to manufacture, market and sell pharmaceutical products and complementary and natural medicines as well as high-protein fortified powdered nutritional food products and supplements. OVERVIEW As a result of the delay caused by the new Companies Act requirements, the funding that was negotiated from certain of the shareholders in March 2011 only materialised in the latter half of the calendar year. This resulted in a delay in putting into place the necessary measures to restore the Group after the long period of cash constraints. Nutritional Foods division Nutritional Foods, once the capital injection in the latter half of the year was received, focused on managing its working capital optimally so as not to lose critical sales but also to be able to expand group market share. Pricing and margin issues were dealt with and the sales forces were brought in-house. The production facilities remain currently underutilised and management is working on ways to address this problem. Intense management involvement has resulted in far higher levels of coordination and cooperation between the different elements of this business and a far greater strategic focus on the direct needs of the business. The factory has extensive spare capacity and the impact of increased volumes on profitability will be considerable. Pharmaceutical division The Impilo business (Impilo Marketing and Impilo Drugs) has a contract manufacturing agreement with a pharmaceutical manufacturer in terms of which they manufacture the Impilo product range. During the year under review the supply problems from this manufacturer were addressed and a reliable supply of product has since been maintained. This has assisted Impilo to recover some of its previously lost revenue, in the second half of the year. Impilo as part of its risk strategy is negotiating with two other contract manufacturers to manufacture products on its behalf in order to ensure the continuous supply of product which in the past has not always been available and which has damaged our market share. The process is time consuming due to the numerous statutory requirements but steady progress is being made. The upgrade of the manufacturing facility at Isithebe that the group utilises has been delayed. This upgrade will ensure that the factory is fully compliant with all the new Medicines Control Council ("MCC") regulations. FINANCIAL PERFORMANCE Sales of R41,607 million were 12% down on the R46,708 million of the previous year. This was mainly due to a decline in sales in the Nutritional Foods division. Sales at Nutritional Foods were at R38 million level for the year. Gross profit declined by R1,700m to R20,012 million as a result of the decline in sales offset by an increase in the gross margin from 46.5% to 48.7%. The increase in margin was primarily as a result of restructuring the pricing levels at Nutritional Foods. The reduction in the gross margin, however, was offset by a reduction in expenses from R26,737 million to R25,603 million (4.2%). Earnings per share increased by 33.3% to 0.20 cents from 0.15 cents while Headline earnings decreased from headline earnings of R1,581 million to headline loss of (R4,578) million. This difference in headline earnings from the prior year is as, the results for the previous corresponding period affected by the IFRS requirements relating to the recognition of deferred tax assets on estimated tax losses which were recognised for the first time during the 2011 period. The profit for the year increased from a profit of R1,664 million in 2011 to a profit of R2,619 million in 2012. This profit of the Group as well as the proceeds from the increase in the number of shares in issue were the major factors in increasing the net asset value per share from 2.3 cents to 2.7 cents. Reversal of prior year impairment of intangible assets The intangible asset relating to the Distribution Rights of the Imuniti Nutritional Supplement Combo Pack (ISCP) was impaired in 2009. A portion of this impairment has been reversed as the Company has received orders and produced this product during the period. There is no indication that this order level will not be maintained for at least 10 years. The first three Distribution outlets owned by the customer of the ISCP has been completed in the Western Cape. These customer distribution outlets are budgeted to monthly require product in excess of the orders already placed. Events after the reporting period There are no material events after the period ended 29 February 2012 to report on. Going concern Shareholders are advised that the audited results for the year ended 29 February 2012 have been prepared on the going concern concept. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. DIVIDEND In view of the Group`s current financial position, no dividend has been declared for the year. AUDIT OPINION Grant Thornton have audited the annual financial statements for the year ended 29 February 2012 and their unqualified audit report is available for inspection at the Company`s registered office. NOTICE OF THE ANNUAL GENERAL MEETING Shareholders are hereby advised that it is anticipated that the Company`s integrated annual report (incorporating the audited annual financial statements) will be distributed on or before Thursday, 31 May 2012 which contains the notice of the annual general meeting to be held at the Durban Country Club on Thursday 28 June 2012 at 10:00. On behalf of the Board HJ van der Merwe CA(SA) Umhlanga Rocks Chief Executive Officer 23 May 2012 Registered office First Floor, 9 Frosterley Park, La Lucia Ridge, 4019 Tel: +27 31 584 7100 Auditors Grant Thornton Designated advisors PSG Capital Proprietary Limited Transfer secretaries Link Market Services South Africa Proprietary Limited, 5th Floor, 11 Diagonal Street, Johannesburg, 2000 Company secretary GA Verga Directors CD Angus (Non-executive), JA Etchells (Financial Director), TR Hendry (Non- executive), HJ van der Merwe (Chief Executive Officer), GR Wambach (Non- executive Chairman) Date: 23/05/2012 15:49:01 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. 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