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JOHN DANIEL HOLDINGS LIMITED - Unaudited Interim Results for the Six Month Period Ended 30 June 2013

Release Date: 02/09/2013 17:36
Code(s): JDH     PDF:  
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Unaudited Interim Results for the Six Month Period Ended 30 June 2013

JOHN DANIEL HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 1998/013215/06
JSE Code: JDH - ISIN: ZAE000136677
("the Company" or "JDH" or "the Group")


UNAUDITED INTERIM RESULTS FOR THE 6 MONTH PERIOD ENDED 30 JUNE
2013


HIGHLIGHTS
The Directors are pleased to inform shareholders of sustained
improvement in the Group's performance for the interim period
under review.

Below are certain highlights of the unaudited interim results
for the 6 months ended 30 June 2013:

      -   Operating results improved by 110% to an operating
          profit of R0.2 million for the 6 months ended 30 June
          2013 compared to an operating loss of R2.1 million for
          the comparative 6 month period.

      -   The Group's current ratio improved to 4.0 as at 30 June
          2013 compared to 1.6 at the end of the comparative
          period.

      -   Turnover increase by 33% to R16.0 million for the 6
          months ended 30 June 2013 compared to turnover of R12.0
          million for the comparative 6 month period.

      -   Gross profit increased by 71% to R11.0 million for the 6
          months ended 30 June 2013 compared to R6.5 million for
          the comparative 6 months period.

      -   Assets under management in Escalator Credit Services
          increased by 362% compared with the comparative 6 month
          period.

The Company changed its year end from 30 September to 31
December during 2012. In 2011 the Company also extended its year
end from 30 June to 30 September, consequently the current six
month interim period ended on 30 June 2013 while the comparative
interim period ended 31 March 2012.

OPERATIONAL REVIEW

Group overview
JDH continues to conduct business as an investment holding
company, focusing on investing in companies which operate in
niche markets that are strategic in nature. Preference is given
to financial services and related companies which have clear
African and Global markets. In particular, these companies are
required to produce products or provide services with high
barriers to entry and generate high gross profit margins.

Below is an overview of the JDH Group's operations during the
interim period.

Financial services
Escalator Credit Services (Pty) Ltd (formerly JDH Credit
Services) (“Credit Services”) total loan book increased by 362%
from R8.7 million at 31 March 2012 to R40.2 million by 30 June
2013.

Credit Services provides loans to third party company employees
and secures repayment through payroll deductions.  Credit
Services also provides funding to SME's.

The unsecured micro finance environment is growing at a rapid
rate and Credit Services is ideally positioned to maximise the
opportunity.

The primary cost in the business is interest on loan capital
required to fund the growth of the loan book. Management are
actively seeking alternative funding options to reduce costs,
thereby improving profitability.

Biotechnology
The Group's Biotechnology operations incorporate the results of
Cryo-Save SA (Pty) Ltd (“Cryo-Save SA”) and Lazaron
Biotechnologies (SA) Limited (“Lazaron”). The combined turnover
of the two companies contributed 64% of the Group's total
turnover and amounted to R10.3 million for the interim period.
This represents an increase of 34.8% compared to the comparative
period.

In the 6 months to June 2013 Cryo-Save SA further strengthened
its South African market share, building on the gains achieved
during the 2012 financial period.

At the end of 2012 Cryo-Save SA, with technical support from
Cryo-Save NV (“Cryo-Save”), transferred the Cape Town laboratory
to a state of the art cryogenic laboratory in Gauteng. The
investment in the new enlarged laboratory significantly improved
capacity with the objective of supporting projected volume
growth. The new facility became fully operational in January
2013 and operates to the highest quality standards applied
internationally by the Cryo-Save Group.

The move of the operational activities to Gauteng has realised
significant operational cost savings and enhanced the efficiency
of logistics to volume markets as well as to the expanding
African operation.

The operational loss reported for the Biotechnology operations
incorporates once off charges including, costs related to the
establishment of the Gauteng laboratory and an unrealised
foreign exchange loss arising from the depreciation of the Rand
against the Euro during the period.

The restructuring of Lazaron has resulted in its return to
profitability and the directors continue to evaluate further
opportunities for Lazaron.

Agricultural packaging
The restructuring of Vinguard Limited's (“Vinguard”) operations
and the reengineering of the production process resulted in
significant reductions in the manufacturing cost per unit,
enhancing Vinguard's competitiveness.

Vinguard's operating loss reported for the period under review
incorporates a portion of the cost related to the move of the
manufacturing operation and the upgrading thereof to facilitate
the reengineered process. Vinguard will be one of the directors'
areas of particular focus during the second half of 2013.

PROSPECTS
Key elements of the on-going restructure process are the
continued growth of subsidiaries through product and market
extension, aggressive trading and cost reduction as well as the
acquisition of new subsidiaries which are profit generating and
aligned with the Group's strategy. The above-mentioned approach
is aimed at developing a robust and complementary Group of
companies which provide sustainable returns.

RESULTS
Presented below are the unaudited interim results for the 6
month period ended 30 June 2013.

Unaudited Condensed Statement of Financial Position

                               Interim        Interim
                             Unaudited      Unaudited          Audited
                                 Group          Group            Group
                               30 June       31 March      31 December
                                  2013           2012             2012
                                R '000         R '000           R '000
ASSETS
Non-current assets
Property, plant and
equipment                        6 725          4 407            6 745
Intangible assets                1 820          1 825            1 650
Other financial assets           6 524          3 613            6 667
Deferred tax                    12 132         12 154           11 341

Total current assets            47 113         11 812           28 321

TOTAL ASSETS                    74 314         33 811           54 724

EQUITY AND LIABILITIES
Equity                          21 736         17 746           21 717
Non-controlling interest          (798)         1 267             (194)

Non-current liabilities
Other financial
liabilities                     40 547          6 937           20 166
Deferred tax                     1 152            509              567

Total current
liabilities                     11 677          7 352           12 468

TOTAL EQUITY AND
LIABILITIES                     74 314         33 811           54 724

Net asset value                 21 736         17 746           21 717

Net tangible asset value        19 916         15 921           20 067

Net   asset    value   per        4.89           4.03             4.89
share (cents)

Net tangible asset value
per share (cents)                 4.48           3.62             4.52

Unaudited Condensed Statement of Comprehensive Income

                               Interim        Interim        15 months
                             Unaudited      Unaudited          Audited
                                 Group          Group            Group
                               30 June       31 March      31 December
                                  2013           2012             2012
                                R '000         R '000           R '000

Revenue                         16 034         12 048           37 593
Cost of sales                   (5 022)        (5 591)         (14 024)
GROSS PROFIT                    11 012          6 457           23 569
 
Other income                       467            166              268
Operating expenses             (11 263)        (8 700)         (21 815)
OPERATING    PROFIT    /
(LOSS)                             216         (2 077)           2 022

Fair value adjustment –
unsecured loan book                  -              -            1 001
Net Finance costs               (1 008)        (1 024)          (2 380)
(LOSS) / PROFIT BEFORE
TAXATION                          (792)        (3 101)             643
Taxation                           207            735             (135)
(LOSS) / PROFIT FOR THE
PERIOD                            (585)        (2 366)             508

Attributable   to    non-
controlling interest              (604)            86           (1 485)
NET    PROFIT/    (LOSS)
ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS                        19         (2 280)           1 993

BASIC    AND    HEADLINE
EARNINGS / (LOSS)

Basic profit / (loss)              19         (2 280)            1 993
Headline profit / (loss)           46         (2 273)            2 001
Basic earnings/(loss)
per share (cents)
attributable to equity
holders of the parent           0.004         (0.622)            0.483
Headline earnings/(loss)
per share (cents)
attributable to equity
holders of the parent           0.010         (0.621)            0.485

Number of  shares in
issue ('000)                  444 132        440 406           444 132

Weighted average number
of shares ('000)              444 132        366 353           412 525



RECONCILIATION   BETWEEN
BASIC PROFIT / (LOSS)
AND HEADLINE EARNINGS /
(LOSS)
IAS 33 Basic Profit /
(Loss)                              19        (2 280)           1 993
IAS 16 Loss / (Profit)
on disposal of property
plant and equipment                 27             7                8
Headline    Earnings   /
(Loss)                              46        (2 273)           2 001

Unaudited Condensed Segmental Information

The segments identified are based on the operational and
financial information reviewed by management for performance
assessment and resource allocation.

Unaudited for the 6 months ended 30 June 2013

                                                           Operating
Segment                                                      profit/
                                              Revenue         (loss)
                                               R’ 000         R’000
Financial Services                             3 360          2 102
Biotechnology                                 10 265           (415)
Agricultural packaging                           909         (1 350)
Corporate head office                          3 038           (121)
Eliminations                                  (1 538)             -
Group total                                   16 034            216

Unaudited for the 6 months ended 31 March 2012

                                                           Operating
                                                             profit/
Segment                                        Revenue       (loss)
                                               R’ 000         R’000
Financial Services                              1 431         (891)
Biotechnology                                   7 614         (477)
Agricultural packaging                          2 920         (575)
Corporate head office                             808         (902)
Eliminations                                     (725)         768

Group total                                     12 048      (2 077)

Audited for the 15 months ended 31 December 2012

                                                           Operating
                                                             profit/
Segment                                         Revenue      (loss)
                                                 R’ 000       R’000
Financial Services                                5 214       1 865
Biotechnology                                    19 197      (2 147)
Agricultural packaging                            7 803      (1 972)
Corporate head office                             9 918       4 599
Eliminations                                     (4 539)       (323)

Group total                                       37 593      2 022

Unaudited Statement of Changes in Equity

                                  Non
                  Share   distribute-
                capital          able    Accumul-   Minority     Total
                             reserves   ated loss   interest    equity
                 R'000          R'000       R'000      R'000     R'000

Unaudited Group 30 June 2013

Balance as at
1 January
2013            55 226          3 912   (37 421)       (194)    21 523
Total
comprehensive        -             -         19        (604)      (585)
profit /
(loss) for
the 6 months
Balance as at
30 June 2013    55 226           3 912  (37 402)       (798)    20 938

Unaudited Group 31 March 2012

Balance at 1
October 2011    36 496           7 752  (41 519)      1 118      3 847
Total
comprehensive
loss for the
6 months             -               -   (2 280)       (86)    (2 366)
Issue of
shares          19 793               -          -        -     19 793
Share issue
expenses          (975)              -          -         -      (975)
Change in
ownership            -          (1 522)         -       236    (1 286)
Balance as at
31 March 2012
                55 314           6 230    (43 799)    1 268    19 013

Audited Group 31 December 2012

Balance as at
1 July 2010     35 665           7 729    (42 225)     (433)     736
Issue of
shares             831               -          -         -      831
Total
comprehensive
profit /
(loss) for
the 15 months        -               -        706      (426)     280
Change in
ownership            -              23          -       (23)       -
Business
combinations         -               -          -      2 000    2 000
Balance as at
1 October
2011            36 496           7 752    (41 519)     1 118    3 847
Total
comprehensive
profit
/(loss) for
the 15 months        -               -      1 993    (1 485)      508
 Issue of
 shares         20 053               -          -         -    20 053
Share issue
expenses        (1 323)              -          -         -     (1323)


Change in                                                  
ownership            -          (3 840)     2 105        173   (1 562)
Balance at 31
December
2012             55 226          3 912    (37 421)      (194)  21 523


Unaudited Condensed Cash Flow Statement

                            Unaudited     Unaudited          Audited
                                Group         Group            Group
                              30 June      31 March      31 December
                                 2013          2012             2012
                               R '000        R '000           R '000

NET CASH OUTFLOW FROM
OPERATING ACTIVITIES          (1 001)       (6 190)          (1 117)

NET CASH OUTFLOW FROM
INVESTING ACTIVITIES         (18 557)       (5 629)         (26 919)

NET CASH INFLOW FROM
FINANCING ACTIVITIES           20 314        13 240          27 963

Increase in cash and
cash equivalents                  756         1 421            (73)

Cash and cash
equivalents at the
beginning of the period           236           309             309

Cash and cash
equivalents at the end
of the period                     992         1 730             236

Notes to the Unaudited Financial Statements for the 6 months
Ended 30 June 2013

ACCOUNTING POLICIES
The abridged financial statements have been prepared in
accordance with IAS 34 – Interim Financial Reporting in
accordance with the accounting policies that comply with
International Financial Reporting Standards and in the manner
required by the Company's Act and the JSE Listing Requirements.
The principle accounting policies adopted in preparation of
these financial statements are consistent with those of the
prior period.

The interim results of the Company were prepared under the supervision
of the Group's financial director, Mr D van der Merwe CA(SA) and have
not reviewed or audited by the auditors.

REVIEW OF RESULTS AND FINANCIAL POSITION
The 30 June 2013 consolidated financial results represents the
trading   results  of   the  corporate   head  office   and  its
subsidiaries active in the financial services, biotechnology and
agricultural packaging markets.

Group turnover increased by 33% to R16.0 million for the 6
months ended 30 June 2013 compared to the comparative period.
Group   turnover   increased   despite   the   limited turnover
contribution from the cyclical Vinguard business.

The bulk of Vinguard's revenue is generated in the second half
of the calendar year during the South African Table Grape
season. The current interim period incorporates limited export
sales while the comparative 6 month period incorporated a full
Vinguard sales season.

Operational expenses increased by 29.5% to R11.3 million for the
6 months ended 30 June 2013 compared to the R8.7 million for the
comparative 6 months ended 31 March 2012. The increase in
operational expenses results from investment in operational
support structures and resources required to underpin the
continued turnover growth and is further impacted by the once
off expenses enumerated previously.

The increase in operational expenses of 29.5% was leveraged in
the period to grow turnover by 33% and implement other
operational efficiencies that contributed to the improvement of
71% in the Group?s gross profit. The improved gross profit
margins and increased revenue resulted in an operating profit of
R0.2 million compared to the operating loss of R2.1 million for
the comparative period.

The strategy of combining aggressive management of existing
subsidiaries and further strategic acquisitions is aimed at
ensuring the future sustainability of the Group.

OTHER FINANCIAL ASSETS
The other financial asset category incorporates the Escalator
Credit Services (Pty) Ltd loan books which increased by 362% in
total during the period. Below is detail regarding the Group?s
other financial assets:

                                                           Audited
                                
                                  Unaudited   Unaudited      Group
                                      Group       Group         31
                                    30 June    31 March   December
                                       2013        2012       2012
                                     R '000      R '000     R '000

At fair value through profit
and loss – designated
Unsecured distressed debtor
book                                  1 435           -      1 301

Loans and receivables
Unsecured loans                      10 953       8 697     11 228
Secured SME loans                    28 605           -     10 496
Escalator Global Mauritius            5 217           -      5 217

Total other financial assets         46 210       8 697     28 242

Non-current assets
At fair value though profit
and loss – designated                 1 086           -      1 181
Loans and receivables                 5 438       3 613      5 486
Total included in non-
current assets                        6 524       3 613      6 667

Current assets
At fair value though profit
and loss – designated                   349           -        120
Loans and receivables                39 336       5 084     21 455
Total included in non-
current assets                       39 685       5 084     21 575


CORPORATE ACTIONS AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
The negotiations with Escalator Capital Global (“Escalator”),
the majority shareholder in Escalator Capital (RF) Limited
(“Escalator Capital”), to acquire some or all of the equity and
/ or assets of Escalator Capital are continuing and shareholders
are accordingly advised to continue to exercise caution in
dealing in their securities.

Shareholders are referred to the renewal of cautionary
announcement released on SENS on 25 July 2013.

EVENTS AFTER THE REPORTING PERIOD
Shareholders approved all special resolutions incorporated in
the notice of the annual general meeting held on 31 July 2013.
The special resolutions have been lodged with CIPC.

The company acquired 2 588 942 Vinguard shares from a Vinguard
director increasing its interest in Vinguard from 73.38% to
75.87%. The acquisition consideration was less than 0.25% of the
Group's market capitalisation.

The directors  are   not  aware   of  any   other matters  or
circumstances of material significance arising since the end of
the financial period ended 31 December 2012 that should be
reported as events after the reporting period.

CONTINGENCIES
Litigation has been suspended against a former employee of
Vinguard who obtained a CCMA ruling granting a R100 000 cash
settlement and the issue of shares in Vinguard. The former
employee seems to have abandoned his claim in light of the
counter claim by Vinguard for the PAYE payable on this possible
issue of Vinguard shares.

APPOINTMENT OF NEW DIRECTORS
The appointment of Mr E Engelbrecht as a non-executive director
was announced on 27 February 2012.  Mr E Engelbrecht's
appointment was ratified by the JDH Shareholders during the AGM
held on 31 July 2013.

ACQUISITIONS AND DISPOSALS
There were no other acquisitions or disposals during the period
under review.

As noted elsewhere, the board is actively investigating
acquisition opportunities aimed at improving earnings and cash
generation for the group.

ISSUE OF SHARES
No shares were issued during the period.

GOING CONCERN
The directors are of the opinion that the group will continue as
a going concern for the foreseeable future due to the continued
financial support of certain parties to the group and in
particular by the Company to its subsidiaries.

DIVIDENDS
No dividends have been declared and no dividend is proposed.

AUDITORS
The shareholders resolved to re-appoint AM Smith and Company
Inc. as the Group auditors on 31 July 2013 at the annual general
meeting.

For and on behalf of the Board

Johannesburg
2 September 2013

Directors: RJ Connellan* (Chairman), TP Gregory (Chief Executive
Officer), DP van der Merwe (Financial Director), BP Topham*, KA
Rayner*, E Engelbrecht#.
(* Independent Non-executive)
(# Non-executive)
Company Secretary: CL Tromp
Registered Office: Acacia     House, Green Hill Village Office
Park, on Lynnwood Road, Cnr Botterklapper and Nentabos Street,
The Willows, Pretoria East.
Transfer Secretaries: Link Market Services (Pty) Ltd, 13th Floor
Rennie House, 19 Ameshoff Street, Braamfontein 2000, PO Box
4844, Johannesburg 2000
Auditors: AM Smith and Company Inc.
Sponsor: Arcay Moela Sponsors (Pty) Ltd

Date: 02/09/2013 05:36:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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