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Unaudited Condensed Consolidated Results for the Six Months ended 31 December 2013
AH-VEST LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1989/000100/06)
Share code: AHL ISIN code: ZAE000129177
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2013
Condensed Consolidated Statement of Financial Position
Unaudited Audited Unaudited
6 months 15 months 6 months
ended ended ended
31 December 30 June 30 September
2013 2013 2012
R R R
Assets
Non-Current Assets 13,344,971 11,668,241 6,862,948
Property, plant and equipment 12,798,537 10,983,032 5,719,069
Intangible assets 346,940 485,715 693,879
Deferred tax 199,494 199,494 450,000
Current Assets 40,478,655 45,585,271 43,468,650
Inventory 18,639,437 20,046,808 22,743,673
Advances to employees 7,508 163 0
Trade and other receivables 20 478 087 22,022,794 19,969,682
Cash and Cash Equivalents 1,353,623 3,515,506 755,295
Non-current assets held for sale and
assets of disposal group 5,598,996 5,372,974 5,823,783
Total Assets 59 422 622 62,626,486 56,155,381
Equity and Liabilities
Capital and reserves 13,873,282 19,765,610 19,108,078
Share Capital 21,293,071 21,293,071 21,293,071
Revaluation Reserves 3,130,464 3,332,271 4,688,610
Accumulated Loss (10,550,253) (4,859,732) (6,873,603)
Liabilities
Non-Current Liabilities 8,656,975 8,656,975 10,851,289
Other financial liabilities 8,656,975 8,656,975 10,710,607
Finance lease obligation 0 0 140,682
Current Liabilities 35,495,663 33,326,990 26,196,014
Loans from Shareholder 2,059,600 237,659 0
Other financial liabilities 1,024,176 1,999,315 1,141,779
Finance lease obligation 35,944 127,822 180,505
Trade and other payables 32,375,943 30,962,194 24,873,730
Liabilities of Disposal Groups 1,396,702 876,911 0
Total Liabilities 45,549,340 42,860,876 37,047,303
Total Equity and Liabilities 59,422,622 62,626,486 56,155,381
Net asset value per share (cents) 13.60 19.38 18.73
Tangible net asset value per share (cents) 13.26 18.91 18.05
Shares in issue at period end 101,973,333 101,973,333 101,973,333
Condensed Consolidated Statement of Comprehensive Income
Unaudited Audited Unaudited
6 Months ended 15 months ended 6 Months Ended
31 December 30 June 30 September
2013 2013 2012
R R R
Revenue 62,660,198 136,586,316 59,898,716
Cost of Sales (43,588,311) (84,002,266) (38,657,376)
Gross Profit 19,071, 887 52,584,050 21,241,340
Other Income 92,150 471,994 314,970
Operating Expenses (24,611,463) (49,722,962) (20,996,025)
Operating(Loss)/Profit (5,447,426) 3,333,082 560,285
Investment Revenue 521 22,188 1,646
Finance Costs (492,078) (1,314,635) (549,928)
(Loss)/Profit before taxation (5,938,983) 2,040,635 12,003
Taxation 0 (250,506) 0
(Loss)/Profit from continuing operations (5,938,983) 1,790,129 12,003
Discontinued Operations
Profit from Discontinued Operations 46,655 235,745 0
(Loss)/Profit for the Period (5,892,328) 2,025,874 12,003
Other comprehensive (Loss)/Profit for the
period net of taxation 0 (1,356,339) 0
Total comprehensive (loss)/income (5 892 328) 669,535 12,003
Earnings before interest, taxation,
depreciation and amortisation (EBITDA) (4,473,709) 5,851,907 1,820,886
Depreciation (788,287) (2,186,646) (1,121,825)
Amortisation (138,776) (346,940) (138,776)
Investment Income 521 22,188 1,646
Finance Cost (492,078) (1,314,635) (549,928)
(Loss)/Profit before taxation (5,892,328) 2,025,874 12,003
Attributed to:
Equity holders of the company (5,892,328) 2,025,874 12,003
Minority Interest 0 0 0
Headline Earnings Reconciliation
Profit attributed to equity holders of the
company (5,892,328) 2,025,874 12,003
Adjusted for:
Profit on sale of property, plant and
equipment (351) (40,000) 0
Headline Earnings (5,892,679) 1,985,874 12,003
- Weighted average shares in issue 101,973,333 101,973,333 101,973,333
- Diluted weighted average shares in issue 101,973,333 101,973,333 101,973,333
Earnings / (Loss) per share (cents) From continuing and Discontinued Operations
Per share information (cents)
(Loss)/Earnings per share (5.78) 1.99 0.01
-from Continuing Operations (6.06) 1.76 0.01
-from Discontinued Operations 0.05 0.23 -
Headline (Loss)/Earnings per share
(cents) (5.78) 1.95 0.01
-from Continuing Operations (5.82) 1.72 0.01
-from Discontinued Operations 0.05 0.23 -
Condensed Consolidated Statement of Changes in Equity
Unaudited Audited Unaudited
6 months 15 months 6 months
ended ended ended
31 December 30 June 30 September
2013 2013 2012
R R R
Share capital and share premium 21,293,071 21,293,071 21,293,071
Revaluation reserve 3,130,464 3,332,271 4,688,610
Accumulated loss (10,550,253) (4,859,732) (6,873,603)
Capital and reserves 13,873,282 19,765,610 19,108,078
Condensed Consolidated Statement of Cash Flows
Unaudited Audited Unaudited
6 months 15 months 6 months
ended ended ended
31 December 30 June 30 September
2013 2013 2012
R R R
Net cash generated (utilised in)/from operating
activities (313,015) 8,772,576 (1,510,533)
Net cash used in investing activities (2,603,792) (6,530,272) (109,298)
Net cash generated from/(used in) financing
activities 754,924 (1,829,906) (727,982)
Net (decrease)/increase in cash and cash
equivalents (2,161,883) 412,398 (2,347 ,813)
Cash and cash equivalents at the beginning of
period 3,515,506 3,103,108 3,103, 108
Cash and cash equivalents at end of period 1,353,623 3,515,506 755,295
COMMENTARY
The board presents the unaudited results for the 6 months ended 31 December 2013. Shareholders are
reminded that the Company has changed its year end to 30 June each year and accordingly the
unaudited results for the 6 months ended 31 December 2013 are required to be compared to the results
for the 6 months ended 30 September 2012, which were the last published half year results.
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-Vest's customers
and stakeholders, has led to a turnaround in the management of working capital but the initiatives that
resulted in an initial return to profitability have been negatively impacted by external and once off factors
as detailed further below.
Turnover has grown to over R62 million for the 6 month period, but gross margins have been negatively
impacted by the devaluation of the Rand combined with an increase in major inputs being, the cost of
tomato paste and plastic bottles. The government levied import duties and tariffs of 37% on imported triple
concentrated tomato paste, as there is no locally produced tomato paste available to the company, it is
being negatively impacted by this policy. Further the company was unable to "pass on" these increases to
the leading supermarket chain stores which are our major trade customers. Efficiency has remained a
problem whilst operating at the existing Tarlton plant as there are constant power outages, poor
telecommunications and ageing equipment. However, the lease has now come to an end and the
equipment is now under care and maintenance while the company is preparing to move its operations to
Eikenhof, the new factory that will be equipped with new state of the art plant and equipment. This
decision has put strain on production and ability to satisfy the sales order book.
The Company experienced a problem with its logistics service provider up to the end of the last financial
year with service delivery levels dropping as low as 65% as previously reported. This negatively impacted
both the achievement of sales and anticipated margins during the period. From 1 September 2013 the
contract with the said service provider was terminated and deliveries are now being handled by Eastern
Trading Group, the holding company. Service delivery levels above 80% have already been achieved.
The company recorded a headline loss of R5 892 328 for the six months ended 31 December 2013.
Whilst operating expenses have been well contained, as a percentage of turnover they have increased
slightly, which is to be expected with the increase in transport costs, a sharp increase in raw materials,
packaging, and the activity surrounding the construction of the new plant. Operating expenses are
expected to be well controlled going forward after the new factory is commissioned which is expected in
the second half of 2014.
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 unaudited condensed consolidated financial results for the 6 months ended 31 December 2013 are
prepared on a going concern basis and comprise a condensed consolidated statement of financial
position at 31 December 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 6 months ended 31 December 2013.
The unaudited financial results have been prepared in accordance with the framework concepts and the
measurement and recognition requirements of International Financial Reporting Standards (IFRS), the
presentation and disclosure requirements of IAS 34 – Interim Financial Reporting, 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, as amended.
SIGNIFICANT ACCOUNTING POLICIES
These financial results for the six months ended 31 December 2013 have not been audited or reviewed by
the company's auditors, Nexia SAB&T. The accounting policies are in terms of International Financial
Reporting Standards (IFRS) and are consistent with those of the previous audited annual financial
statements for the year ended 30 June 2013. 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.
The unaudited results have been prepared by the Financial Director, Mr. C. Sambaza.
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
31 December 2013 30 September 2012
Customer A 56% 46%
Customer B 33% 32%
ACQUISITIONS AND DISPOSALS
Disposal of head office and relocation of factory and head office
During 2012 the company entered into a sale agreement of the former head office premises for a total
cash consideration 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. This will reduce the
liability from R9.6m at 31 December 2013 to about R4.7m. The company has experienced major delays in
finalising the transfer of the property and receipt of the proceeds due to delays in obtaining the rates
clearance certificate from the City of Johannesburg, efforts are being made to finalise this process in the
second half of the current year. This asset and associated liabilities are separately reflected under non-
current assets held for sale and assets and liabilities held for disposal groups.
In the interim, the lease at the Tarlton factory was temporarily extended due to the fact that work to
complete the new factory at the new Eikenhof factory is still in progress. Once this factory is ready the
business will start operating on one site for the first time. This will result in improved efficiencies from
reduced double handling of goods and synergies with the holding company that will start to be realised.
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 in 2012.
As previously disclosed, a dispute arose in relation to this lease agreement and 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 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. A bare denial plea was submitted and the company has thus responded in the same manner.
ISSUE AND REPURCHASE OF SHARES
There were no share issues or share repurchases during the 6 months under review.
DIVIDENDS
No dividends were declared during the 6 month period. (2012: Nil).
CHANGE IN DIRECTORS
During the period under review, the following board changes occurred:
Director Appointed Resigned
Zaahir Elias 16 October 2013
Jacobus Johannes Du Plooy 16 October 2013
Christopher (“Chris”) Sambaza 21 October 2013
FUTURE PROSPECTS
AH-Vest has continued to operate the current Tarlton factory, to defend its shelf space, albeit at a higher
cost. The new production facility being constructed at Eikenhof is expected to come on line before the
end of 2014.
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 high costs of production will start reversing in the second half
of 2014, with increased volumes and economies of scale expected out of the new “state of the art” plant.
I Darsot
Johannesburg
27 March 2014
Directors:
Executive Directors: I Darsot (Chairman and CEO); MN Darsot; B. Darsot; S. Darsot; R. Darsot;
MT Pather, C Sambaza (FD)
Non-Executive Directors: H Takolia*; MS Appelgryn*; Z Elias*, JJ Du Plooy* (*independent)
Registered address:
15 Misgund Road, Eikenhof
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: 27/03/2014 01:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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