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Audited results for the fifteen months period ended 30 June 2013 and withdrawal of cautionary
AH-VEST LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1989/000100/06)
Share code: AHL ISIN code: ZAE000129177
AUDITED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE FIFTEEN
MONTHS PERIOD ENDED 30 JUNE 2013 AND WITHDRAWAL OF CAUTIONARY
ANNOUNCEMENT
Condensed statement of financial position
Audited Audited
15 months Ended Year Ended
30 June 2013 31 March 2012
R R
Assets
Non-current assets 11 668 241 13 847 812
Property, Plant & Equipment 10 983 032 12 565 157
Intangible assets 485 715 832 655
Deferred tax 199 494 450 000
Current assets 45 585 271 34 800 064
Inventories 20 046 808 16 063 276
Advances paid to employees 163 17 775
Trade & other receivables 22 022 794 15 615 905
Cash & cash equivalents 3 515 506 3 103 108
Non-current asset held for sale and assets of
disposal groups 5 372 974 -
Total Assets 62 626 486 48 647 876
Equity and Liabilities
Capital and reserves 19 765 610 19 096 075
Share capital 21 293 071 21 293 071
Reserves 3 332 271 4 688 610
Accumulated loss (4 859 732) (6 885 606)
Non-current liabilities 8 656 975 11 407 586
Finance lease obligation 193 811
Other financial liabilities
8 656 975 11 213 775
Current liabilities 33 326 990 18 144 215
Other financial liabilities 1 999 315 1 195 418
Loans from shareholders 237 659
Finance lease obligation 127 822 248 673
Trade and other payables 30 962 194 16 650 245
Operating lease liability - 49 879
Liabilities of disposal groups 876 911
Total Equity and Liabilities 62 626 486 48 647 876
Net asset value per share (cents) 19.38 18.72
Tangible net asset value per share (cents) 18.91 17.91
Shares in issue at period end 101 973 333 101 973 333
Condensed statement of comprehensive income
Audited
Audited Year ended
15 months ended 31 March 2012
30 June 2013 Reclassified
R R
Revenue 136 586 316 106 639 879
Cost of sales (84 002 266) (64 859 794)
Gross profit 52 584 050 41 780 085
Other income 471 994 280 405
Operating expenses (49 722 962) (36 953 085)
Operating profit before finance costs 3 333 082 5 107 405
Investment revenue 22 188 9 783
Finance costs (1 314 635) (1 217 314)
Profit before tax 2 040 635 3 899 874
Taxation (250 506) -
Profit for the period from continuing
operations 1 790 129 3 899 874
Profit/(loss) from discontinued operations 235 745 (243 673)
Profit for the period 2 025 874 3 656 201
Other comprehensive loss for the period net of
taxation (1 356 339)
Total comprehensive income 669 535 3 656 201
Earnings before interest, taxation,
depreciation and amortisation (“EBITDA”) 5 851 907 6 708 864
Depreciation (2 186 646) (1 563 067)
Amortisation (346 940) (277 551)
Investment income 22 188 9 783
Finance cost (1 314 635) (1 221 828)
Profit before taxation 2 025 874 3 656 201
Attributed to:
Equity holders of the company 2 025 874 3 656 201
Minority interest - -
Headline earnings reconciliation:
Profit attributed to equity holders of the company 2 025 874 3 656 201
Adjusted for:
Profit on sale of property, plant and equipment (40 000) -
Impairment of property, plant and equipment 324 033
Headline earnings 1 985 874 3 980 234
Weighted average shares in issue 101 973 333 101 973 333
Diluted weighted average shares in issue 101 973 333 101 973 333
Per share information (cents)
Earnings per share 1.99 3.59
- from continuing operations 1.76 3.82
- from discontinued operations 0.23 (0.24)
Headline earnings per share 1.95 3.90
- from continuing operations 1.72 4.14
- from discontinued operations 0.23 (0.24)
Statement of changes in equity
Audited Audited
15 months ended Year ended
30 June 2013 31 March 2012
R R
Share capital and share premium 21 293 071 21 293 071
Revaluation reserve 3 332 271 4 688 610
Accumulated loss (4 859 732) (6 885 606)
Capital and reserves 19 765 610 19 096 075
Condensed statement of cash flows
Audited
Audited Year ended
15 months ended 31 March 2012
30 June 2013 Reclassified
R R
Net cash generated from/(utilised in) operating
activities 8 772 576 (1 781 058)
Net cash used in investing activities (6 530 272) (536 478)
Net cash used in financing activities (1 829 906) (352 529)
Net increase/(decrease) in cash and cash
equivalents 412 398 (2 670 065)
Cash and cash equivalents at the beginning of
period 3 103 108 5 773 173
Cash and cash equivalents at end of period 3 515 506 3 103 108
COMMENTARY
The board is pleased to present the audited results for the 15 month period ended 30 June
2013. Shareholders are reminded that the Company has changed its year end to 30 June each
year and accordingly the audited results for the fifteen months ended 30 June 2013 are required
to be compared to the results for the 12 months ended 31 March 2012.
The board is pleased to report that the initiatives by the new management team taken
surrounding working capital management and stock controls, together with continued support of
AH-Vests customers and stakeholders, has led to a turnaround in the last three months of the
reporting period, returning the Company to profitability for the 15 months ended 30 June 2013.
Turnover has grown to over R136 million for the 15 month period, with gross margins being
slightly down from approximately 39% to 38.3%. Efficiency remains a problem whilst operating
at the existing Tarlton plant. The Company has experienced a problem with its logistics service
provider during the period under review with service delivery levels as low as 65%. This has
negatively impacted both the achievement of sales (lost sales) as well as margins. Subsequent
to year end, notice has been given to the said service provider and deliveries will be handled by
the larger Eastern Trading group, with an aim to achieve service delivery levels above 90%.
Whilst operating expenses have been well contained, as a percentage of turnover they have
increased slightly, which is to be expected with the change in control and the activity
surrounding the construction of the new plant. Operating expenses are expected to be well
controlled going forward.
Discontinued operations relate to the sale of the Land and Buildings owned by the subsidiary
company. The asset is still in the process of being transferred.
BASIS OF PREPARATION
The audited condensed consolidated financial results for the 15 months ended of the Group are
prepared on a going concern basis.
These audited condensed consolidated financial results, comprise a condensed consolidated
statement of financial position at 30 June 2013, a condensed consolidated statement of
comprehensive income, a condensed consolidated statement of changes in equity and a
condensed consolidated statement of cash flow for the 15 month period ended 30 June 2013.
The audited condensed consolidated financial results have been prepared in accordance with
the framework concepts and the measurement and recognition requirements of IFRS and the
SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and
Financial Reporting Pronouncements as issued by Financial Reporting Standards Council, the
JSE Limited Listings Requirements and the requirements of the South African Companies Act 71
of 2008.
The accounting policies are in terms of IFRS and are consistent with those of the previous
annual financial statements. The principal accounting policies, which comply with International
Financial Reporting Standards, have been consistently applied in all material respects in the
current and comparative period. All new interpretations and standards were assessed and
adopted with no material impact.
These condensed consolidated results have been audited by our auditors Nexia SAB&T, who
have issued an unqualified audit opinion on the results for the fifteen months ended 30 June
2013.
A copy of the audit opinion is available for inspection at the registered office of the company.
The results have been prepared by the Financial Director, Mr. R. Darsot. This summarised
report is extracted from the audited information, but is not itself audited. The directors take full
responsibility for the preparation for this provisional report and are satisfied that the financial
information has been correctly extracted from the underlying financial statements.
SEGMENTAL ANALYSIS
No segmental analysis has been presented as the company operates primarily within one
product segment, namely sauces, and one geographical segment namely South Africa. An
analysis of the revenue of customers over 10% is set out below:
Customer Analysis
2013 2012
Customer A 46% 49%
Customer B 29% 31%
ACQUISITIONS AND DISPOSALS
Disposal of head office and relocation of factory and head office
During the period under review, the Company concluded an agreement to dispose of its head
office premises, located at 103 Booysens Reserve Road Johannesburg, with effect from the
date of transfer.
The total cash consideration for the disposal of the property is R5 150 000 (Five million one
hundred and fifty thousand Rand) and the proceeds of the disposal, after associated costs, will
be utilised to reduce the Land Bank liability. Delays have been experienced in finalising the
transfer of the property and receipt of the proceeds. This asset and associated liabilities are
separately reflected under non-current assets held for sale and assets and liabilities held of
disposal groups.
Pursuant to the disposal of the aforementioned premises as well as due to the fact that the lease
at the Tarlton factory premises was terminating in January 2013, the Company entered into a
lease agreement with JR209 Investments (Pty) Ltd to rent the premises known as Twenty One
Industrial Estate, with the purpose of relocating the factory and headquarters into one location in
Clayville, Johannesburg.
In the interim, the lease at the Tarlton factory was temporarily extended. Lease negotiations for
alternate premises in Eikenhof are being finalised with the controlling shareholder of the
Company.
CONTINGENCIES
The Company entered into a lease agreement with JR 209 Investments (Pty) Ltd to rent the
premises known as Twenty One Industrial Estate, with the purpose of relocating the factory and
headquarters into one location in Clayville, Johannesburg.
A dispute has arisen in relation to this lease agreement as a notification of cancellation of lease
has been received following a demand for payment of R42 523 377 plus interest at prime plus
2% from 15 February 2013 to date of payment or alternatively or alternatively payment of
R9 272 401.60 plus interest at prime plus 2% from the date of the summons being 26 March
2013, alternatively at 15.5% per annum.
The Company’s attorneys are being consulted in this regard and the matter is regarded as being
frivolous.
The action has been defended by A H Vest Ltd and a notice in terms of Rule 35 (12) and 35 (14)
of the Supreme Court rules has been served on JR 209 Investments (Pty) Ltd on the 3 May
2013 which required a response from them within five days of the service of the notice.
A bare denial plea was submitted and the company has thus responded in the same manner
and the matter is currently at a stalemate.
ISSUE AND REPURCHASE OF SHARES
There were no share issues or share repurchases during the 15 months under review.
DIVIDENDS
No dividends were declared during the period. (2012: Nil).
CHANGE IN YEAR END
The Company changed its year end from 31 March to 30 June each year, in line with that of its
new holding company.
CHANGE IN DIRECTORS
During the period under review, the following board changes occurred:
Director Appointed Resigned
Nobuhle Gloria Mthethwa 1 November 2010 24 October 2012
Sanjay Paramanand Soni 29 February 2012 22 October 2012
Suresh Naidoo 2 February 2012 23 October 2012
Melville Aubrey Hill 02 September 2008 04 June 2013
Ismail Ebrahim Darsot 17 August 2012
Muhammed Naasif Ismail Darsot 17 August 2012
Bilaal Ismail Darsot 17 August 2012
Shuaib Ismail Darsot 17 August 2012
Raees Darsot 17 August 2012
Riyaaz Yousuf Noorbhai 15 January 2013
Haroon Takolia 10 December 2012
Marthinus Stephanus Appelgryn 12 December 2012
FUTURE PROSPECTS
Following the change in control of the Company and due to the unavailability of the Clayville
factory development and the current Tarlton factory lease coming to an end, the factory
premises will be moved to the 200-acre estate in Eikenhof, Johannesburg, from which all of the
other businesses owned by Eastern Trading Company are operated.
AH-Vest has continued to operate the current Tarlton factory, to defend its shelf space, albeit at
a higher cost. The new production lines are currently being commissioned with production trial
runs commencing in October 2013.
The board of directors are confident that any losses incurred as a result of the current factory not
producing the required volumes as well as the low service delivery levels will be made up in the
summer 2013/14 with increased volumes expected out of the new “state of the art” plant.
CONCLUSION OF A SETTLEMENT AGREEMENT WITH THE NATIONAL EMPOWERMENT
FUND
As announced on SENS on 23 July 2013, a settlement agreement has been signed in respect of
legal action instituted by the National Empowerment Fund (“NEF”) against the former CEO of
AH-Vest, Marci Pather (“Pather”) and in respect of which the Company had a potential
contingent liability. On fulfilment of the terms of the settlement agreement, which is expected to
be during or about April 2014, the 7 860 473 shares still held by the NEF will be transferred to
Pather or his nominee and the Company will have no further exposure to any claims from the
NEF arising as a result of the dispute. Shareholders are advised to refer to the announcement
made on SENS on 23 July 2013 for the full details.
WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT
Due to the announcement of all the details surrounding the cancellation of the factory lease, the
legal actions underway and the contingencies in relation thereto, shareholders are advised that
the cautionary announcement is now withdrawn.
I Darsot
Johannesburg
30 September 2013
Directors:
Executive Directors: I Darsot (Chairman/CEO); MN Darsot; B. Darsot; S. Darsot; R. Darsot;
MT Pather
Non-Executive Directors: H Takolia*; MS Appelgryn*; R Noorbhai (*independent)
Registered address:
Arcay House, Number 3 Anerley Road, Parktown, 2193
Designated Advisors Transfer secretaries
Arcay Moela Sponsors (Pty) Ltd Computershare Investor Services (Pty) Ltd
Auditors Company Secretary
Nexia SAB&T Arcay Client Support (Pty) Ltd
Date: 30/09/2013 05:11:00 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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