Unaudited Interim Results for the Six Months Ended 31 August 2014 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 2014 CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION Unaudited Reviewed Audited 6 months 6 months 12 months 31 August 2014 31 August 2013 28 February 2014 Figures in Rand (‘000) R'000 R'000 R'000 ASSETS Property, plant and equipment 143 26 583 51 Deferred taxation 1 331 - - Non-current assets 1 474 26 583 51 Other financial assets 10 10 10 Inventories 3 033 4 331 4 106 Trade and other receivables 2 548 1 075 688 Cash and cash equivalents 16 303 1 718 1 048 Current assets 21 894 7 134 5 852 Non-current Assets held for sale - - 20 672 Total assets 23 368 33 716 26 575 EQUITY AND LIABILITIES Share capital and reserves (969) 610 (8 582) Share Capital 2 110 1 540 1 540 Share premium 57 735 49 764 49 764 Non Distributable Reserves (0) 12 926 5 656 Distributable Reserves (60 814) (63 621) (65 542) Deferred taxation 73 4 554 - Non-current liabilities 73 4 554 - Trade and other payables 3 949 3 169 4 075 Loans from Directors 2 078 8 366 9 540 Provisions 5 057 5 578 8 263 South African Revenue Services 13 180 11 439 11 035 Bank Overdraft - - 29 Current liabilities 24 264 28 553 32 942 Liabilities of disposal group 2 213 Total equity and liabilities 23 368 33 716 26573 Number of shares in issue (000?) 259 148 202 212 202 212 Total Net (liability) /asset value per share (cents) (0.4) 0.3 (4.24) CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME Unaudited Unaudited Audited 6 months 6 months 12 months 31 August 2014 31 August 2013 28 February 2014 R'000 R'000 R'000 Revenue 8 173 5 217 9 942 Cost of Sales (2 237) (1 869) (3 537) Gross Profit 5 936 3 347 6 405 Other Income 61 - 187 Operating Expenses (4 422) (4 868) (12 152) - - - Operating Profit 1 575 (1 521) (5 560) Interest received 67 2 12 Finance Costs - - (474) Reversal of impairment - Loss/profit before taxation 1 642 (1 519) (6 022) Taxation Profit/ loss from continuing operations 1 642 (1 519) (6 022) Profit/(loss) from discontinued operations 789 - 2 414 Taxation - discontinued income 2 612 - - Profit/(Loss) for the year 5 043 (1 519) (3 608) Other comprehensive income - - (7 101) Total comprehensive profit/(Loss) for the period 5 043 (1 519) (10 709) CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOW Unaudited Unaudited Audited Figures in rand (‘000) 6 months 6 months 12 months 31 August 2014 31 August 2013 29 February 2014 Net flow from operating activities (5920) (1 185) (3 003) -continuing 1241 (1 185) (1 652) -discontinuing (7 162) - (1 351) Net flow from investing activities 20 242 1 322 11 -continuing 1 252 1 322 11 -discontinuing 18 990 - - Net flow from financing activities 822 750 1 832 -continuing 822 750 1 832 -discontinuing - - - Net (decrease)/increase in cash 15 144 888 (1 160) -continuing 3 316 888 191 -discontinuing 11 828 - (1 351) Cash at beginning of period 1 159 830 941 -continuing 1 048 830 830 -discontinuing 111 - 111 Cash at end of period 16 303 1 718 (220) -continuing 4 364 1 718 1 021 -discontinuing 11 939 - (1 240) CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGE IN EQUITY Non- Total Capital Share Share Distributable Accumulated and R'(000) Capital Premium Reserves loss reserves Balance at 1 March 2013 1 490 49 065 12 926 (62 102) 1 379 Loss for the year (3 608) (3 608) Other comprehensive loss (7 101) (7 101) Total comprehensive loss for the year (7 101) (3 608) (10 709) Issue of shares 51 699 750 Transfer of revaluation reserve through use (169) 169 - Total contributions by and distributions to owners of company recognized directly in equity 51 699 (169) 169 - Balance at 28 February 2014 1 541 49 764 5 656 (65 541) (8 582) Loss for the period-continuing operations (2 883) (2 883) Reversal of impairment-continuing operations 4 525 4 525 Profit from discontinuing operations 3 401 3 401 Comprehensive profit for the year 5 043 5 043 Transfer of revaluation reserve through sale (5 656) 5 656 - Issue of shares 569 7 971 De-recognition of reserves on sale of property (5 971) (5 971) Balance at 31 August 2014 2 110 57 735 - (60 815) (969) Per share information 31 August 31 August 28 February 2014 2013 2014 Basic earnings (loss) per share 2.33 (0.75) (1.81) From continuing operations 1.35 (0.75) (3.02) From discontinued operations 0.98 - 1.21 Reconciliation of profit/ (loss) for the period to basic earnings Profit and loss for the period attributable to 2 919 (1 519) (6 022) equity holders of parent from continuing operations Profit and loss for the period attributable to equity holders 2 124 - 2 414 of the parent from discontinued operations Headline earnings (loss) per share 1.32 (0.75) (1.70) From continuing operations (0.75) (3.01) From discontinued operations - 1.31 Reconciliation between earnings (loss) and headline earnings (loss) from continuing operations Basic earnings (loss) 2 919 (1 519) (6 022) Adjusted for: - Loss/(profit) on disposal of assets (61) - 17 Headline earnings (loss) for the period 2 858 (1 519) (6 005) Weighted averages shares in issue („000) 216 446 197 155 199 683 OVERVIEW BASIS OF PREPARATION OF THE UNAUDITED INTERIM RESULTS Statement of compliance The unaudited consolidated condensed group interim results have been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (“IFRS”), the AC500 Standards and the presentation and disclosure requirements of IAS 34: Interim Financial Reporting, the JSE Limited Listings Requirements and the Companies Act of South Africa. These interim results have not been reviewed or audited and as such the auditors have not expressed an opinion on the figures. Significant accounting policies The same accounting policies, presentation and methods of computation have been followed in these unaudited interim results as were applied in the preparation of the Group?s Financial Statements for the year ended 28 February 2014. Basis of measurement The unaudited consolidated condensed group interim results have been prepared on the historical cost basis except for certain financial instruments measured at fair value. INTERIM RESULTS The directors are pleased to report that the SAMES business is trading profitably and is now generating consistent profits. The re-design of the existing product range is virtually completed and a full complement of new products will be launched in 2015. Prospects for growth are now evident and positive. No segmental report has been presented as the company only operates in one segment in South Africa and does not have any customers that represent more than 10% of its sales. RIGHTS ISSUE AND SALE OF SURPLUS ASSETS The rights issue and the sale of the SAMES property raised a total of R27.3 million. This has resulted in a substantial reduction in liabilities and has left the company with a cash surplus of R16,3 million as at 31 August 2014. PROSPECTS Apart from the further development of the SAMES business as well as sustainable organic growth, Labat has identified various potential acquisitions with a focus on the Rail Industry. These initiatives are being pursued with the assistance of Global Emerging Markets (GEM) who have provided a $100 million equity line of credit for these acquisitions. Shareholders are reminded that the Company is trading under cautionary in this regard. DIVIDENDS In line with group policy, no dividend has been declared. When deemed appropriate, a dividend will be declared. GOING CONCERN The board of directors is of the opinion that the group has sufficient resources to continue as a going concern. SUBSEQUENT EVENTS Management is not aware of any material events which occurred subsequent to the period ended 31 August 2014, although it is advised that the Company continues to trade under a cautionary announcement. For and on behalf of the board B G VAN ROOYEN Prepared by: D. O?NEILL Chief Executive Officer Financial Director Johannesburg 12 December 2014 Directors: B van Rooyen (CEO), D O`Neill (FD), R Majiedt #(Chairperson), B Jacobs #, D Asmal # # - Independent non-executive Company Secretary: S. Van Rooyen Sponsor: Arbor Capital Sponsors Proprietary Limited Date: 12/12/2014 03:47:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 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