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Unaudited condensed consolidated financial results for the six months ended 31 December 2015
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 2015
Condensed statement of financial position
Unaudited Audited Unaudited
6 Months 12 Months 6 Months
31 Dec 2015 30 Jun 2015 31 Dec 2014
R R R
Assets
Non-current assets 36 978 372 37 526 233 28 710 158
Property, Plant & Equipment 30 290 539 30 588 399 20 896 478
Intangible assets 72 699 72 699 69 388
Deferred tax 6 615 134 6 865 135 7 744 292
Current assets 39 274 110 33 866 144 46 195 094
Inventories 13 110 393 15 317 843 23 758 564
Trade & other receivables 25 128 778 16 436 257 21 156 251
Cash & cash equivalents 1 034 939 2 112 044 1 280 279
Total Assets 76 252 482 71 392 377 74 905 252
Equity and Liabilities
Capital and reserves 17 361 254 16 652 165 15 747 296
Share capital 21 293 071 21 293 071 21 293 071
Accumulated loss (3 931 817) (4 640 906) (5 545 776)
Non-current liabilities 18 072 594 20 438 179 8 804 568
Loans from shareholder 17 327 804 19 958 179 8 804 568
Provisions 480 000 480 000 -
Other financial liabilities 264 790 - -
Current liabilities 40 818 634 34 302 033 50 353 388
Other financial liabilities 132 395 - -
Trade and other payables 36 772 754 28 176 960 45 201 971
Current tax payable - 47 333 -
Provisions - 794 585
Bank overdraft 3 913 485 5 283 155 5 151 417
Total Equity and Liabilities 76 252 482 71 392 377 74 905 252
Net asset value per share (cents) 17.03 16.33 15.44
Tangible net asset value per share (cents) 16.95 16.26 15.37
Shares in issue at period end 101 973 333 101 973 333 101 973 333
Condensed statement of comprehensive income
Unaudited Audited Unaudited
6 Months 12 Months 6 Months
31 Dec 2015 30 Jun 2015 31 Dec 2014
R R R
Revenue 80 691 485 140 707 262 78 186 924
Cost of sales (47 130 031) (81 490 120) (44 609 650)
Gross profit 33 561 454 59 217 142 33 577 274
Other income 71 612 315 689 (22 609)
Operating expenses (31 663 940) (55 237 893) (31 150 741)
Operating profit before finance costs 1 969 126 4 294 938 2 403 924
Investment revenue - 547 547
Finance costs (1 010 037) (1 468 671) (1 927 403)
Profit before taxation 959 089 2 826 814 477 068
Taxation (250 000) (892 996) -
Profit for the period from continuing
operations 709 089 1 933 818 477 068
Loss from discontinued operations - (551 883) -
Profit for the year 709 089 1 381 935 477 068
Other comprehensive income for the period
net of taxation - - -
Total comprehensive income 709 089 1 381 935 477 068
Attributed to:
Equity holders of the company 709 089 1 381 935 477 068
Minority interest - - -
Headline earnings reconciliation:
Profit attributed to equity holders of the
company 709 089 1 381 935 477 068
Adjustments: - - -
Headline earnings 709 089 1 381 935 477 068
Per share information (cents)
Earnings per share 0.70 1.36 0.47
- from continuing operations 0.70 1.90 0.47
- from discontinued operations - (0.54) -
Headline earnings per share 0.70 1.36 0.47
- from continuing operations 0.70 1.90 0.47
- from discontinued operations - (0.54) -
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
Statement of Changes in Equity
Unaudited Audited Unaudited
6 Months 12 Months 6 Months
31 Dec 2015 30 Jun 2015 31 Dec 2014
R R R
Share capital and share premium 21 293 071 21 293 071 21 293 071
Accumulated loss (3 931 817) (4 640 906) (5 545 776)
Capital and reserves 17 361 254 16 652 165 15 747 296
Condensed Statement of Cash Flows
Unaudited Audited Unaudited
6 Months 12 Months 6 Months
31 Dec 2015 30 June 2015 31 Dec 2014
R R R
Net cash generated from/(utilised in)
operating activities 4 581 807 7 328 886 (226 022)
Net cash used in investing activities (1 576 052) (9 448 936) (313 016)
Net (used in)/cash from financing activities (2 713 190) 2 594 924 -
Net increase/(decrease) in cash and cash equivalents 292 565 474 874 (539 038)
Cash and cash equivalents at the beginning of period (3 171 111) (3 645 985) (3 645 985)
Cash and cash equivalents at end of period (2 878 546) (3 171 111) (4 185 023)
COMMENTARY
The board presents the unaudited results for the six months period ended 31 December 2015. The Board
is pleased to report that the initiatives by the management team taken surrounding working capital
management and stock controls, together with continued support of AH-Vest Limited’s customers and
stakeholders, have led to improvements in the management of working capital as well as to the company’s
profitability.
Financial Performance
Turnover for the six month period ended 31 December 2015 was R80.7 million compared to R78 million for
the comparable period, an increase of 3.2%. This was due to improved capacity in the factory as well
increased demand from customers. Gross margins decreased slightly to 41.6% from 42.9% over the comparable
period due to increased inflation in raw material, electricity, labour and transportation costs.
Management continued to improve stock management, procurement and achieved greater efficiencies in the
manufacturing and distribution process.
The profit before taxation for the six months ended 31 December 2015 was R959 089 compared to a profit
of R477 068 in the comparative period.
Operating expenses as a percentage of turnover remained contained at 39% showing management cost
containment efforts.
The company has increased factory and warehousing capacity to enable greater stock holding aimed at
reducing delivery delays and lost sales. The company’s net profit after taxation increased by 48.63%
to R709 000 from R477 000. Taxation for the period was R250 000 being a deferred taxation adjustment.
Earnings per share and headline earnings per share were 0.7 cents compared to 0.47 cents per share in
the prior period, up 48.9%. During the current period the company invested a further R1.6 million on
plant and equipment as part of the on-going expansion programme and the shareholder loan was reduced
by R2.6 million.
There has been a 44.81% decline in inventory levels from 31 December 2014 to 31 December 2015. This
was due to the company making a bulk purchase of tomato paste in 2014 due to the scarcity of the
commodity on the world market. From year ended 30 June 2015 to 31 December 2015, inventory levels
also decreased by 14.4% mainly due to reduction in stock holding for both raw and finished goods.
Trade and other payables increased from the year end at 30 June 2015 to 31 December 2015 in line with
the seasonal nature of the business. The festive season is the busiest period of the year and purchases
increase towards this time of the year.
Net Asset Value per share was 17.03 cents, up from 15.44 cents per share, an increase of 10.3%.
The company completed the relocation of the manufacturing facilities from Tarlton to Eikenhof in March
2015, and is now fully operational in one facility.
BASIS OF PREPARATION
The unaudited condensed consolidated financial results for the 6 months ended 31 December 2015 are
prepared on a going concern basis and comprise a condensed consolidated statement of financial
position at 31 December 2015, 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 2015.
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 Johannesburg Stock Exchange's
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 2015 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 2015. 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 CA (SA) CA (Z).
SEGMENTAL ANALYSIS
No segmental analysis has been presented as the company operates primarily within one product segment,
namely food products, and one geographical segment namely South Africa. The company has commenced with
its export strategy during the period under review.
An analysis of the revenue of customers over 10% is set out below:
Customer Analysis
31 December 2015 31 December 2014
Customer A 41% 53%
Customer B 18% 23%
DISPOSALS / ACQUISITIONS
There have been no disposals or acquisitions during the six months ended 31 December 2015.
ISSUE AND REPURCHASE OF SHARES
There were no share issues or share repurchases during the six months under review.
DIVIDENDS
No dividends were declared during the six month period. (2014: Nil).
CHANGE IN DIRECTORS
During the period under review there were no 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 of the company.
The Tzaneen tomato paste factory, a sister company that is owned by the holding company, was commissioned
into production in August 2015. This will make the procurement and availability of tomato paste, a key
ingredient in the production of sauces, easier. The company’s access to the tomato paste factory allows
the company to backwardly integrate the supply chain to improve efficiency, secure local supplies and
reduce lead times.
Operating expenses are expected to increase going forward as the company sees an increase in inflation
due to the depreciating Rand and increases in cost of labour, electricity and transportation.
The company is in the process of completing a 10 500 square metre warehouse, which will go a long way
in addressing the historical inadequacy of cost effective warehousing.
The Board remains confident that the future of the business is bright and the growth trajectory is on the
correct path.
I Darsot
Johannesburg
31 March 2016
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 Advisor 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: 31/03/2016 03:57:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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