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Unaudited condensed consolidated financial results for the 6 months ended 31 Dec 2014
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 2014
Condensed Consolidated Statement of Financial Position
Unaudited Audited Unaudited
6 Months 12 Months 6 Months
31 Dec 2014 30 Jun 2014 31 Dec 2013
Assets
Non-Current Assets 28 710 158 24 535 839 13 344 971
Property, plant and equipment 20 896 478 16 583 383 12 798 537
Intangible assets 69 388 208 164 346 940
Deferred tax 7 744 292 7 744 292 199 494
Current Assets 46 195 094 31 064 617 40 478 655
Inventory 23 758 564 14 117 443 18 639 437
Advances to employees 0 8 334 7 508
Trade and other receivables 21 156 251 16 938 740 20 478 087
Cash and Cash Equivalents 1 280 279 100 1 353 623
Non-current asset held for sale 257 542 5 598 996
Total Assets 74 905 252 55 857 998 59 422 622
Equity and Liabilities
Capital and reserves 15 747 296 15 270 230 13 873 282
Share Capital 21 293 071 21 293 071 21 293 071
Revaluation Reserves 0 0 3 130 464
Accumulated Loss -5 545 776 -6 022 841 -10 550 253
Liabilities
Non-Current Liabilities 8 804 568 9 668 600 8 656 975
Other financial liabilities 0 8 656 975
Loans from Shareholder 8 804 568 9 668 600
Current Liabilities 50 353 388 30 811 204 35 495 663
Loans from Shareholder 0 0 2 059 600
Other financial liabilities 0 0 1 024 176
Finance lease obligation 0 0 35 944
Current taxation payable 0 2 992
Trade and other payables 45 201 971 27 162 127 32 375 943
Bank overdraft 5 151 417 3 646 085
Liabilities of Disposal groups 107 964 1 396 702
Total liabilities 59 157 956 40 587 768 45 549 340
Total Equity and Liabilities 74 905 252 55 857 998 59 422 622
Net Asset value per share (cents) 15.44 14.97 13.60
Tangible net asset value per share (cents) 15.37 14.77 13.26
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 12 Months 6 Months
31-Dec-14 30-Jun-14 31-Dec-13
R R R
Revenue 78 186 924 122 936 160 62 660 198
Cost of Sales -44 609 650 -85 265 807 -43 588 311
Gross Profit 33 577 274 37 670 353 19 071 887
Other Income -22 609 268 901 92 150
Operating Expenses -31 150 741 -49 711 692 -24 611 463
Operating Profit(Loss) 2 403 924 -11 772 438 -5 447 426
Investment Revenue 547 1 066 521
Finance Costs -1 927 403 -1 216 903 -492 078
Profit (Loss) before taxation 477 068 -12 988 275 -5 938 983
Taxation 7 544 798 0
Profit from continuing operations 477 068 -5 443 477 -5 938 983
Discontinued Operations 0 948 097 46 655
Profit (Loss) from Discontinued Operations 0 0 0
Profit (Loss) for the Period 477 068 -4 495 380 -5 892 328
Other comprehensive Profit (Loss) for the
period net of taxation 0 0 0
Total comprehensive income 477 068 -4 495 380 -5 892 328
Attributed to:
Equity holders of the company 477 068 -4 495 380 -5 892 328
Minority Interest 0 0 0
Headline Earnings Reconciliation
Profit attributed to equity holders of the company 477 068 -4 495 380 -5 892 328
Adjusted for:
Profit on sale of property, plant and equipment -351
Headline Earnings 477 068 -4 495 380 -5 892 679
- 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 0.47 -5.78
-from Continuing Operations 0.47 -6.06
-from Discontinuing Operations 0.00 0.05
Headline Earnings per share (cents) 0.47 -5.78
-from Continuing Operations 0.47 -5.82
-from Discontinuing Operations 0.00 0.05
Condensed Consolidated Statement of Changes in Equity
Unaudited Audited Unaudited
6 Months 2 Months 6 Months
31 Dec 2014 Jun 2014 31 Dec 2013
R R R
Share capital and share premium 21 293 071 21 293 071 21 293 071
Revaluation reserve 0 0 3 130 464
Accumulated loss -5 545 776 -6 022 841 -10 550 253
Capital and reserves 15 747 296 15 270 230 13 873 282
Condensed Consolidated Condensed Statement of Cash Flows
Unaudited Audited Unaudited
6 Months 12 Months 6 Months
31 Dec 2014 30 Jun 2014 31 Dec 2013
R R R
Net cash generated from/(utilised in) operating
activities -226 022 -4 001 381 -313 015
Net cash used in investing activities -313 016 -1 798 768 -2 603 792
Net cash used in financing activities 0 -1 361 342 754 924
Net increase/(decrease) in cash and cash
equivalents -539 038 -7 161 491 -2 161 883
Cash and cash equivalents at the beginning of
period -3 645 985 3 515 506 3 515 506
Cash and cash equivalents at end of period -4 185 023 -3 645 985 1 353 623
COMMENTARY
The board presents the unaudited results for the 6 months ended 31 December 2014 compared to the
results for the 6 months ended 31 December 2013.
General
The new management took over the company in August 2012 under very difficult financial and operational
conditions and set about the task of turning around the business by injecting additional financial resources
and experienced management in logistics and manufacturing. The board is pleased to report that the
strategies employed by the new management team to turn around the business have now started to bear
fruit as the company’s performance has now started to improve, with the business now achieving some
significant milestones.
Financial Performance
The turnover for the six months to 31 December 2014 increased by 25% from R62.7m to R78.2m over the
comparable period ended 31 December 2013. This was due to improved capacity in the factories as well
as improved service levels in the distribution of products which is now being done in-house.
Gross margins have improved from 31% last year to 43%. This was mainly due to improved stock
management, better procurement and greater efficiencies in the manufacturing and distribution process.
Operating expenses have increased by 27% over the six month period compared to a 25% increase in
turnover. The operating expenses as a percentage of turnover has declined marginally from 39% in 2013
to 40% in 2014 showing management cost containment efforts.
The profit before taxation for the six months ended 31 December 2014 was R477 068 compared to a loss
of R5 089 2328 in the comparative period, which saw a number of once off large costs. The company is
showing steady progress towards a recovery to profitability.
Service Levels
After many years of difficulties due to poor service levels, the board is now pleased to announce that this
issue is now a thing of the past. The service levels have now improved from 65% at time of take-over in
2012 to 90% at half year 2014. Management is working tirelessly to improve this ratio further as this key
performance indicator is critical to the attainment of financial and service targets.
Warehousing
The board would like to advise that the group has completed a large new warehouse which is now fully
operational. It has a capacity of 5000 pallet placings and this will go a long way in addressing the
inadequacy of cost effective warehousing the business has been struggling with in the past.
Relocation of the factory facility
The company will complete the relocation of the manufacturing facilities from Tarlton to Eikenhof in the
second half of this financial year. Notice of the company’s intention to terminate the month-on-month
tenancy has been given to the landlord in preparation for the move. The board is pleased that five
production lines at the new Eikenhof facility are now fully operational and the balance will be installed in
the second half of this financial year.
Tomato Paste production facility
After many years of sourcing tomato paste from various international suppliers and the recent introduction
of the import tariff on tomato paste, the group was left with no option but to develop an in house tomato
paste factory to reduce dependency on foreign suppliers as well as exposure to the volatile exchange
rate. The board is pleased to announce that Eastern Trading Proprietary Limited, the parent company of
AH-Vest, has acquired a tomato paste factory located in Limpopo Province from Tiger Brands. This
factory will go a long way in securing the supply and controlling the quality of this key ingredient.
BASIS OF PREPARATION
The unaudited condensed consolidated financial results for the 6 months ended 31 December 2014 are
prepared on a going concern basis and comprise a condensed consolidated statement of financial
position at 31 December 2014, 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 2014.
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 2014 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 2014. 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 2014 31 December 2013
Customer A 53% 56%
Customer B 23% 33%
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. (2013: Nil).
CHANGE IN DIRECTORS
During the period under review, Zaahir Elias resigned as a director the on 11 September 2014. There
were no other changes to the board.
FUTURE PROSPECTS
The company has now set a good foundation for growth going into the future by consolidating its factory
facilities into one location where the distribution hub is situated. This will enhance the capacity of the
business as well as improve the distribution efficiency. With the access to the tomato paste factory the
company will be better poised to backwardly integrate the supply chain to improve efficiency and reduce
costs of manufacture. The board remains confident that the turnaround of the business has been
achieved, the future of the business is bright and the growth trajectory will continue.
I Darsot
Johannesburg
27 March 2015
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*; JJ Du Plooy* (*independent)
Registered address:
15 Misgund Road, Eikenhof
Designated Advisors Transfer secretaries
Arbor Capital Sponsors (Pty) Ltd Computershare Investor Services (Pty) Ltd
Auditors Company Secretary
Nexia SAB&T Arbor Capital Company Secretarial (Pty) Ltd
Date: 27/03/2015 09:57:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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