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Provisional condensed consolidated results for the year ended 28 February 2015
LABAT AFRICA LIMITED
Incorporated in the Republic of South Africa
(Registration number 1986/001616/06)
JSE code: LAB ISIN: ZAE000018354
(“Labat” or “the company”)
PROVISIONAL CONDENSED CONSOLIDATED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2015
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Reviewed for the Audited for the
year ended year ended
28 February 2015 28 February 2014
(Restated)
R’000 R’000
Revenue 12 127 9 996
Cost of sales (3 909) (3 537)
Gross profit 8 218 6 459
Other income 2 606 187
Operating expenses (9 419) (12 206)
Operating profit/(loss) 1 405 (5 560)
Investment revenue 13 12
Finance costs (398) (474)
Profit/(loss) before taxation 1 020 (6 022)
Taxation - -
Profit/(loss) from continuing operations 1 020 (6 022)
Discontinued operations
Profit/(loss) from discontinued operations 404 (842)
Profit/(loss) for the year 1 424 (6 864)
Other comprehensive income/(loss):
Loss on revaluation of property - (7 102)
Taxation related to revaluation of property - 1 989
Other comprehensive loss for the year net of taxation - (5 113)
Total comprehensive income/(loss) for the year 1 424 (11 977)
Attributable to:
Owners of the parent:
Profit/(loss) for the year from continuing operations 1 020 (6 022)
Profit/(loss) for the year from discontinuing operations 404 (842)
Profit/(loss) for the year attributable to owners of the 1 424 (6 864)
parent
Earnings/(loss) and diluted earnings/(loss) per share
from continuing operations
Basic and diluted earnings /(loss) per share (cents) 0.42 (3.03)
From discontinued operations
Basic and diluted earnings /(loss) per share (cents) 0.17 (0.43)
Total earnings per share
Basic and diluted earnings /(loss) per share (cents) 0.59 (3.46)
Headline earnings /(loss) and diluted headline
earnings/(loss) per share from continuing operations
Basic and diluted headline earnings/(loss) per share 0.40 (3.01)
(cents)
From discontinued operations
Basic and diluted headline earnings/(loss) per share 0.21 (0.34)
(cents)
Total earnings per share
Basic and diluted headline earnings/(loss) per share 0.61 (3.35)
(cents)
The headline earnings/(loss) from continuing operations was determined using the following
information:
Profit/(loss) attributable to shareholders of the group 1 020 (6 022)
(Profit) /loss on the sale of fixed assets (38) 17
Headline earnings attributable to shareholders of the
group 982 (6 005)
The headline loss from discontinuing operations was determined using the following
information:
Profit/loss) attributable to shareholders of the group 404 (842)
Fair value adjustment 103 200
Headline earnings attributable to shareholders of the
group 507 (642)
Share information („000) („000)
Weighted average shares in issue 244 954 199 683
Shares in issue at year end 259 202 202 212
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Reviewed as at Audited as at
Audited as at 28
28 February 28 February
February 2013
2015 2014
(Restated) (Restated)
R’000 R’000 R’000
ASSETS
Non-current assets 35 51 26 656
Inventories 2 589 4 107 5 297
Other financial assets 10 10 10
Loans to shareholders 2 011 - -
Trade and other receivables 881 688 1 837
Cash and cash equivalents 16 458 1 048 830
Current Assets 21 949 5 852 7 974
Assets of disposal groups - 20 672 -
Total Assets 21 984 26 576 34 629
EQUITY AND LIABILITIES
Share capital and reserves 450 (8 576) 2 652
Equity 450 (8 576) 2 652
Non-Current Liabilities - - 3 281
Loans from directors and
387 9 540 7 751
shareholders
South African Revenue Services 8 674 11 035 11 757
Trade and other payables 3 256 4 075 3 341
Provisions 9 212 8 263 5 847
Bank overdraft 5 29 -
Current Liabilities 21 534 32 943 28 697
Liabilities of disposal groups - 2 208 -
Total Equity and Liabilities 21 984 26 576 34 629
Number of shares in issue („000) 259 202 202 212 197 155
Total Net asset /(liability) value per
0.17 (4.24) 1.34
share (cents)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed for
Audited for the
the year ended
year ended 28
28 February
February 2014
2015
(Restated)
R’000 R’000
Net flow from operating activities 21 324 (1 654)
Net flow from investing activities 33 11
Net flow from financing activities (5 924) 1 832
Net decrease in cash 15 434 189
Cash at beginning of period 1 019 830
Cash at end of period 16 453 1 019
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Non
Total distributable
Share Share share reserves/ Accumulated Total
capital premium capital revaluations loss equity
R'000 R'000 R'000 R'000 R'000 R'000
Opening balance as
1 490 49 065 50 555 12 926 (62 102) 1 379
previously reported
Prior year adjustments - - - 1 129 144 1 273
Balance at 01 March
1 490 49 065 50 555 14 055 (61 958) 2 652
2013 as restated
Loss for the year - - - - (6 864) (6 864)
Total comprehensive
- - - (5 113) - (5 113)
income as restated
Issue of shares 51 699 750 - - 750
Transfer of revaluation
- - - (169) 169 -
reserve through use
Balance at 01 March
1 541 49 764 51 305 8 773 (68 654) (8 576)
2014 as restated
Profit for the year - - - - 1 424 1 424
Rights issue 570 7 031 7 601 - - 7 601
Transfer between
reserves on disposal of - - - (8 773) 8 773 -
land and buildings
Balance at 28 February
2 111 56 795 58 906 - (58 456) 450
2015
Segment information
Reviewed Audited
for the year ended for the year ended
28 February 2015 28 February 2014
(Restated)
R'000 R'000
Technology
External sales 12 127 9 942
Inter segmental revenue 257 -
Other Operations
External sales - -
Inter segmental revenue - -
Adjustments and eliminations (257) -
Total revenue from continuing operations 12 127 9 942
Technology
Profit /(Loss) for the year before disclosable
items 3 747 (4 362)
Reversal of impairment /(Impairments)/ 4 525 (10 293)
Profit /(Loss) for the year before taxation and
discontinued operations 8 272 (14 655)
Other Operations
Loss for the year before taxation and
discontinued operations (2 727) (6 917)
Total (loss)/profit for the year before
eliminations, tax and discontinued 5 545 (21 572)
operations
Adjustments and eliminations (4 525) 15 550
Total (loss) / profit for the year before
taxation and discontinuing operations 1 020 (6 022)
SEGMENT ASSETS
Technology 27 322 24 043
Other operations 2 495 321
Adjustments and eliminations (7 833) 2 211
Total assets 21 984 26 576
SEGMENT LIABILITIES
Technology (56 260) (62 377)
Other operations (15 371) (25 715)
Adjustments and eliminations 50 097 52 940
Total liabilities (21 534) (35 152)
COMMENTARY
RESULTS
The total comprehensive profit for the year was R1,424m as opposed to a loss in the previous
year of R11,977m. Sales increased substantially and the business is now trading profitably
and we have also successfully dealt with various legacy issues.
Maximizing existing business values
Sames
The Sames business is trading profitably. Manufacturing is being carried out very successfully
in China and quality and margins are being maintained. The lengthy process of re-design of
existing products, to take us to a 5 micron platform from 2.0 micron, has been successfully
completed and improved new products are being readied for market.
Manufacturing capacity and quality issues, which were always the constraint with our old
Sames plant have been eliminated and there is substantial capacity available to us in China
with no quality issues. We can now look forward to new growth with both enhanced quality
products as well as a wider range of products.
New Strategy and Initiatives
As an investment holding company, Labat is pursuing investments and acquisitions in various
sectors. However, our main thrust currently is in making acquisitions in the Road Transport
Logistics sector.
There are some real opportunities available in this sector to Labat as one of the few Level 1
BEE listed companies. Accordingly, we have recently negotiated a substantial acquisition in
this sector, subject to certain conditions precedent as separately announced, and are
actively seeking other such acquisitions.
Global Emerging Markets (“GEM”)
GEM continues to provide support to Labat and has reconfirmed its $100m (R1,2 billion) line
of equity credit to the company. This line of credit is available for Working Capital purposes
as well as acquisition funding. This agreement has now been extended for a further five
years.
Prospects
Prospects for the year ahead are very positive and shareholders are referred to the separate
announcement relating to the intended acquisition of Reinhardt Transport Group (“RTG”).
The existing business is also expected to grow as mentioned above and our acquisition
strategy and plan is progressing well.
BASIS OF PREPARATION
Statement of compliance
The condensed consolidated 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 (IFRS), the SAICA Financial Reporting Guides
and in the manner required by the Companies Act and the JSE Listings Requirements. The
principle accounting policies applied in the preparation of the condensed consolidated
financial statements are in terms of IFRS and are consistent with those applied in the previous
consolidated annual financial statements, except for the adoption of new standards which
became effective during the year.
Review Conclusion
The results of the Company, which were prepared under supervision of the Group?s financial
director, Mr D.J. O?Neill CA, were reviewed by the Group?s auditors, Nexia SAB&T who
expressed an unmodified review conclusion. A copy of the auditor?s review report is
available for inspection at the company?s registered office together with the financial
statements identified in the auditor?s review report.
RESTATEMENT
Background
During the financial period ended 28 February 2014, Labat entered into an agreement to
dispose of its land and buildings. The land and buildings were therefore accounted for as a
disposal group in accordance with IFRS 5: Non-current Assets Held for Sale (IFRS 5).
The misstatement occurred as a result of incorrectly applying the requirements of IFRS 5 in
accounting for the movement of the revaluation reserve in the statement of other
comprehensive income as part of the profit from discontinued operations, as well as errors
made in the calculation of the deferred tax implications on the fair value adjustment.
Furthermore, it was identified that the deferred tax on the revaluation of the land portion,
was not accounted for at a capital gains tax rate as required by IAS 12: Income Taxes which
resulted in the comparative figures being misstated.
The misstatement of the 2014 AFS were identified following the JSE Limited?s (“JSE”) pro-
active monitoring process whereby the 2014 AFS were selected for review by the JSE (“Pro-
active Monitoring”).
Effect of restatement
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
28 February 2013
Adjustment
on use of CGT
As previously rate on land Restated
reported portion balance
Statement of Financial Position R’000 R’000 R’000
Non-distributable reserve (12 927) (1 128) (14 055)
Deferred tax (4 554) 1 273 (3 281)
Retained loss 62 103 (144) 61 959
28 February 2014
Adjustment
on
revaluation
reserve and Adjustment
As effect on on use of
previously change of CGT rate on Restated
Statement of Financial reported rate land portion) balance
Position R’000 R’000 R’000 R’000
Non-distributable reserve (5 656) (1 988) (1 129) (8 773)
Liabilities of disposal groups (2 213) (1 268) 1 273 (2 208)
Retained loss 65 542 3 256 (144) 68 654
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
28 February 2014
As previously Restated
Statement of comprehensive reported Restatement balance
income R’000 R’000 R’000
(Loss)/profit from continuing
operations (6 022) - (6 022)
Discontinued operations
Profit/(loss) from discontinued
operations 2 414 (3 256) (842)
(Loss)/profit for the year (3 607) (3 256) (6 864)
Other comprehensive
income
Loss on revaluation reserve (9 862) 2 761 (7 101)
Taxation related to revaluation
of property 2 761 (773) 1 988
Other comprehensive loss (7 101) 1 988 (5 112)
Total Comprehensive
(loss)/income for the year (10 709) (1 268) (11 977)
EARNINGS AND HEADLINE
EARNINGS PER SHARE
-Continuing operations (3.03) - (3.03)
-Discontinued operations 1.22 (1.65) (0.43)
Total loss per share (1.81) (1.65) (3.46)
-Continuing operations (3.01) - (3.01)
-Discontinued operations 1.31 (1.65) (0.34)
Total headline loss per share (1.70) (1.63) (3.35)
Going Concern
The Board of Directors are of the opinion that the group has sufficient resources to continue
as a going concern with a profitable business, sufficient cash resources and access to a
$100m (R1,2 billion) line of equity credit for Working Capital and acquisition requirements.
Litigation
The group has various claims and counter claims made by and against Labat which have
risen in the normal course of business as previously disclosed. All these matters are being
dealt with by the company?s attorneys.
Share Capital
During the year, 56 990 274 shares were issued pursuant to the Company?s rights offer at 15
cents per share.
The results of the Rights Offer, which closed on Friday, 23 May 2014, resulted in additional
shares issued as follows:
Number of % of Rights Value of Rights
rights offer Offer shares @ 15 cents per
shares share (ZAR)
Rights Offer Shares available for 202 212 023 100% 30 331 803
subscription
Rights Offer Shares subscribed for by 5 223 494 2.58% 783 524
shareholders
Excess applications subscribed for by 93 300 0.05% 13 995
shareholders
Rights Offer Shares subscribed for by 51 673 480 25.55% 7 751 022
the Underwriter
Total 56 990 274 8 548 541
Corporate Governance
The group subscribes to the values of good corporate governance at all levels and is
committed to conducting business with discipline, integrity and social responsibility.
Post Balance Sheet Events
Shareholders are referred to the Company?s announcements of 22 April 2015 and 18 May
2015 and 12 June 2015 regarding Labat?s intention to acquire RTG. Shareholders are advised
that Post Balance Sheet, Labat and RTG have now concluded an agreement for the
acquisition subject to certain conditions precedent (“the Transaction”).
In terms of the transaction, Labat will acquire 100% of RTG for a consideration of R645 million.
It is intended that the financing will be structured by way of R325 million of debt and the
balance through a Private Placement of shares in Labat. Labat intends issuing 240 million
new Labat shares at 150 cents per share to settle the balance of the consideration.
Dividends
In line with group policy, no dividend has been declared.
For and on behalf of the board.
B G VAN ROOYEN D O?NEILL
CEO FINANCIAL DIRECTOR
15 June 2015 15 June 2015
Directors
B. van Rooyen*, D.J O?Neill*, R. Majiedt^, B. Jacobs^, D Asmal^
Executive*, Independent non-executive^, Non-Executive#
Company Secretary: Arbor Capital Company Secretarial Proprietary Limited
Registered Address: 23 Kroton Avenue, Weltevreden Park, 1709
Sponsor: Arbor Capital Sponsors Proprietary Limited
Transfer Secretary: Computershare Investor Services Proprietary Limited
Date: 15/06/2015 04:16:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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