Wrap Text
Unaudited Condensed Interim Results for the Six Months Ended 31 August 2015
Nutritional Holdings Limited
Reg no 2004/002282/06
(Incorporated in the Republic of South Africa)
("the Group" or "the Company")
Share code : NUT ISIN code : ZAE000156485
UNAUDITED CONDENSED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST
2015
The unaudited financial statements are presented on a consolidated basis
Unaudited Unaudited Audited
Condensed Consolidated Six months Six months Year ended
Income Statement
for the period ended 31 Aug 2015 31 Aug 2014 28 Feb 2015
R’000 R’000 R’000
Revenue 18,162 19,300 37,753
Cost of Sales (11,696) (11,501) (23,101)
Gross Profit 6,466 7,799 14,652
Operating loss before
interest (2,109) (1,562) (4,063)
Finance costs (244) (420) (786)
(Loss) before taxation (2,353) (1,982) (4,849)
Taxation 23 (44) 1,671
(Loss) for the period (2,330) (2,026) (3,178)
Other comprehensive income
for the year net of taxation - - 4,921
Attributable to ordinary
shareholders (2,330) (2,026) 1,743
(Loss) per share (cents) –
basic and diluted (0.08) (0.11) (0.15)
Headline (loss) per share
(cents) – basic and diluted (0.08) (0.11) (0.15)
Number of ordinary shares in issue (000)
- issued net of treasury 3,407,368 1,907,368 3,407,368
shares
- weighted-average 2,938,532 1,907,368 2,133,053
- Diluted weighted-average 2,938,532 1,907,368 2,133,053
Calculation of headline earnings
(Loss) for the period (2,330) (2,026) (3,178)
Profit on disposal of (60)
property, plant and - -
equipment
Headline (loss)attributable
to ordinary shareholders (2,330) (2,026) (3,238)
Condensed Consolidated
Statement of Financial Unaudited Unaudited Audited
Position for the period Six months Six months Year ended
ended 31 Aug 2015 31 Aug 2014 28 Feb 2015
R’000 R’000 R’000
ASSETS
Non-current assets
Property, plant and 24,607 13,523 20,055
equipment
Intangibles 13,005 12,662 12,791
Deferred taxation 9,919 8,193 9,896
47,531 34,378 42,742
Current assets
Inventories 6,198 5,568 6,184
Trade and other receivables 4,842 5,262 5,675
Loans receivable 54 9 59
Bank balance and cash 93 138 1,693
11,187 10,977 13,611
Non-current assets
held for sale - 70 20
TOTAL ASSETS 58,718 45,425 56,373
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 145,750 131,722 145,750
Reserves 10,760 5,659 10,729
Retained earnings (113,273) (109,791) (110,943)
Total shareholders' funds 43,237 27,590 45,536
Non-current liabilities
Interest-bearing borrowings 66 133 98
Deferred taxation 4,737 2,992 4,737
4,803 3,125 4,835
Current liabilities
Trade and other payables 4,986 5,946 5,356
Bank overdraft 3,605 5,853 577
Loans from related parties 2,020 2,845 -
Current portion of interest- 67 66 69
bearing borrowings
10,678 14,710 6,002
TOTAL EQUITY AND LIABILITIES 58,718 45,425 56,373
Net asset value per share 1.3 1.4 1.3
(cents)
Condensed Consolidated Unaudited Unaudited Audited
Statement of Cash Flows For Six months Six months Year ended
the period ended 31 Aug 2015 31 Aug 2014 28 Feb 2015
R’000 R’000 R’000
(Loss) before taxation (2,353) (1,982) (4,849)
Depreciation 371 290 592
Profit on disposal of assets - - (60)
Share based payments 31 - 149
Finance costs 244 420 786
(Increase) in working
capital (12) (35) (1,653)
Cash utilised by operations (1,719) (1,307) (5,035)
Finance costs (244) (420) (786)
Cash flows from operating
activities (1,963) (1,727) (5,821)
Cash flows from investing
activities (5,137) (544) (770)
Cash flows from financing
activities - 1,806 12,957
Net (decrease)increase in
cash and cash equivalents (7,100) (465) 6,366
Cash and cash equivalents at
beginning of period 1,116 (5,250) (5,250)
Cash and cash equivalents at
end of period (5,984) (5,715) 1,116
Condensed Total
consolidated
Statement of Changes ordinary
in Equity for the Stated Trea- Share- Reval- Re- Share-
sury based
period ended shares payment uation tained holders’
capital
31 August 2015 reserve reserve earnings funds
R’000 R’000 R’000 R’000 R’000 R’000
Balance at 28
February 2014 -
audited 138,463 (6,741) - 5,659 (107,765) 29,616
Total comprehensive
loss for the period - (2,026) (2,026)
Balance at 31 August
2014 – unaudited 138,463 (6,741) - 5,659 (109,791) 27,590
Total comprehensive
loss for the period 4,921 (1,152) (3,769)
Share-based payment
reserve 149 149
Issue of shares 14,028 14,028
Balance at 28
February 2015 –
audited 152,491 (6,741) 149 10,580 (110,943)45,536
Total comprehensive
loss for the period (2,330) (2,330)
Share-based payment 31 31
Balance at 31 August
2015 – unaudited 152,491 (6,741) 180 10,580 (113,273) 43,237
Condensed Group Nutritional Pharmaceutical Services Consolidated
Segmental Analysis Foods
R’000 R’000 R’000 R’000
Business segments
for the six months ended 31
August 2015 - unaudited
Revenue from external sales 17,701 658 - 18,359
Segment Profit (Loss) 181 400 (2,934) (2,353)
before tax
Taxation 23
Segment (Loss) for the (2,330)
period
for the six months ended 31
August 2014 - unaudited
Revenue from external sales 16,917 2,383 - 19,300
Segment Profit (Loss) 206 156 (2,344) (1,982)
before tax
Taxation (44)
Segment (Loss) for the (2,026)
period
for the year ended 28
February 2015 - audited
Revenue from external sales 33,904 3,849 - 37,753
Segment Profit (Loss) (157) 282 (4,974) (4,849)
before tax
Taxation 1,671
Segment (Loss) for the year (3,178)
COMMENTARY
Basis of presentation
The unaudited condensed interim financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) and IAS
34 – Interim Financial Reporting as issued by the International Accounting
Standards Board (IASB) (the interpretations adopted by the International
Accounting Standards Board (IASB)), The SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee, the Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council, the
Listings Requirements of the JSE Limited and the South African Companies
Act, No 71 of 2008, as amended.
Accounting Policies
The unaudited condensed financial results have been prepared on the
historical cost basis, except for certain financial instruments which are
measured at fair value or at amortised cost. The significant accounting
policies used are in terms of IFRS and methods of computation are consistent
in all material respects with those applied in the previous financial year,
except for the adoption of improved, revised or new standards and
interpretations. The aggregate effect of these changes in respect of the
period ended 31 August 2015 is nil.
The unaudited condensed financial results have been prepared under the
supervision of the Group Financial Director, RS Etchells.
Neither these condensed interim financial results, nor any reference to
future financial performance included in this results announcement, has been
audited or reviewed or reported on by the Company’s external auditor, Grant
Thornton.
Nature of business
The Group companies comprise of 3 operational units and one service
division.
Nutritional Foods -
Nutritional Foods, which is located in Klerksdorp, owns a mass production
dry food manufacturing facility. The company formulates, manufactures and
sells a large range of fortified dry food products and supplements into the
LSM 3-6 market. In addition it has a wide basket of products serving the
industrial catering sector throughout Southern Africa.
Impilo Health Solutions -
Impilo Health Solutions markets a range of basic family health care products
via a licensing agreement with Avid Brands (Pty) Ltd (AVID). In terms of the
agreement AVID manufacture, market and distribute the products directly to
pharmacies for their own risk and reward. Impilo is paid a royalty fee of
10% of the net invoiced value of all sales. The Companies range of products
includes registered medicines with the South African Medicines Control
Council as well as certain complimentary medicines.
NH2O -
NH2O markets and distributes a range of “chlorine free” water purification
products under licence from the manufacturers ACN Chemicals UK Limited.
These products include “point of use” water purification drops called
OneDrop as well as BacSan, an industrial application for use by
municipalities and other bulk water suppliers. Both products carry
certification from the CSIR.
OVERVIEW
Nutritional Foods Division
The first six months of the year have seen management focus on building
relationships with key players in the feeding scheme space with specific
emphasis on the National Schools Nutritional Program (NSNP). This process
has been time consuming and to a large extent the benefits from this process
will only come to light during the next 6 to 12 months due to the current
contractual obligations of the various provincial departments. We are
however confident that with time these discussions will start to bear fruit.
During the period March to August 2015 the Company took advantage of the
DTI’s MCEP Incentive Programme investing in various items of new plant and
machinery to better place itself with regards to being able to meet
production demand as and when new business starts to come through the
pipeline. To this end two complete “twin-screw” extrusion lines were
purchased and installed at the Klerksdorp factory. These new extruders,
together with two further “form, fill and seal” packing lines purchased in
the same period, have given the Company the ability to quickly ramp up
production with confidence. Despite complying with all the requirements of
the MCEP Incentive Programme, management have been informed by the DTI that
due to a lack of funding all claims have been suspended pending
clarification from National Treasury. This has seriously affected the
Company’s cash flow situation due to an outstanding application of
approximately R4,2 million. During the period under review the Company was
able to “wash it’s face” making a small operating profit for the period of
R181 000.
Impilo Health Solutions Division
As reported in the Financial Year End results of the pervious period ended
28 February 2015 the Company entered into a long term royalty agreement with
Avid Brands whereby AVID took over complete control of the manufacture,
marketing and sale of it’s scheduled medicines and range of complementary
medicines. AVID have been able to grow the turnover of “Impilo” branded
products by 59% during the period under review resulting in Impilo Health
Solutions making a profit of R400 000 for the six months to 31 August 2015.
Management are confident that over time AVID will continue to grow turnover
resulting in the royalty flow increasing accordingly.
NH2O Division
Since the Company was formed, in the latter portion of the 2014/15 financial
year, focus has been on introducing the 2 chlorine free water purification
solutions to the market. OneDrop, a “point of use” water purifier, is
listed with various retail outlets nationally. Management is currently
pursuing the development of the industrial market with high regard to the
current drought situation in Southern Africa and the resultant lack of clean
drinking water.
FINANCIAL HIGHLIGHTS
Group Turnover of R 18,162 million was 5.9% down on the R 19,300 million of
the previous corresponding period. The headline loss increased slightly from
a loss of R2,026 million to a loss of R2,330 million, with both the loss per
share and Headline loss per share reducing from a loss of 11c to a loss of
8c.
The Group has no long term debt with all assets on it’s balance sheet
remaining unencumbered with the exception of a covering bond held by the
Group’s bankers over the property as security for certain overdraft
facilities.
Events after the reporting period
Shareholders are advised that a SENs announcement will be released during
the course of today, 16 November 2015, detailing the proposed issue of
shares for cash in terms of the general authority granted to the board at
the last AGM held on 3 July 2015.
Deferred Tax Assets
The Group is made up of three trading companies and the holding company. No
deferred tax asset has been recognised for tax losses available for set-off
against future taxable income where it is not probable that future taxable
income will be available. Two of the companies in the Group earned a taxable
income and it is probable that taxable profit will be available in future in
order to utilise the assessed losses available. A deferred tax asset has
therefore been raised on these two companies’ assessed losses. These
companies (separate taxable entities) did not suffer a loss in the current
period in the tax jurisdiction to which the deferred tax assets relates. A
deferred tax asset has also been recognised on the assessed loss of the
other trading company to the extent of the deferred tax liability arising
from capital allowances on the property, plant and equipment.
Going concern
Shareholders are advised that the unaudited interim results for the six
months ended 31 August 2015 have been prepared on the going concern concept.
The annual report for the year ended 28 February 2015 contained emphasis of
matter as to going concern.
Changes to the Group’s board
The were no changes to the board of directors during the period under
review.
Dividends
No dividends were declared as at 31 August 2015.
On behalf of the board
T.V.Mogkatlha
Chief Executive Officer
Umhlanga Rocks
16 November 2015
Registered office
Suite 3, Ground Floor, 49 Richefond Circle, Ridgeside, 4319
Tel: +27 31 584 7100
Directors
TV Mogkatlha (Chief Executive Officer)
RS Etchells (Group Financial Director & Chief Operating Officer)
TR Hendry (Independent Non-executive)
C Kapnias (Independent Non-executive)
AR Pinfold (Non-executive)
GR Wambach (Independent Non-executive Chairman)
Registered office
Suite 3, Ground Floor, 49 Richefond Circle, Ridgeside, 4319
Tel: +27 31 536 8066
Designated Advisor
PSG Capital Proprietary Limited
Transfer secretaries
Link Market Services South Africa Proprietary Limited
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, Johannesburg,
2001
Date: 16/11/2015 12:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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