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Abridged Audited Consolidated Financial Results and Notice of Annual General Meeting
NUTRITIONAL HOLDINGS LIMITED
Registration number 2004/002282/06
(Incorporated in the Republic of South Africa)
("the Group" or "the Company")
Share code : NUT ISIN : ZAE000156485
ABRIDGED AUDITED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR
ENDED 28 FEBRUARY 2017 AND NOTICE OF ANNUAL GENERAL MEETING
CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND COMPREHENSIVE
INCOME
Audited Audited
year ended year ended
Figures in R thousands 28 February 29 February
2017 2016
Revenue 43 215 38 269
Gross profit 16 389 12 490
Other income 39 69
Operating expenses (23 665) (17 252)
Loss on disposal of intangible
assets (7 633) -
Operating loss before interest and
taxation (14 870) (4 693)
Net interest expense (1 336) (710)
Loss before taxation (16 206) (5 403)
Taxation (825) (12)
Loss for the year (17 031) (5 415)
Other comprehensive income for the - (59)
year net of taxation
Total comprehensive (loss) profit (17 031) (5 474)
Loss per share (cents) – basic and
diluted (0.49) (0.16)
Headline loss per share (cents) -
basic and diluted (0.24) (0.16)
Number of ordinary shares in issue
(000)
- issued net of treasury shares 3 653 368 3 407 368
- weighted-average 3 505 231 3 407 368
- Diluted weighted-average 3 521 251 3 458 193
Calculation of headline loss
(R’000)
Loss attributable to ordinary
shareholders (17 031) (5 415)
Loss on disposal of intangible
assets 7 633 -
Profit on disposal of property,
plant and equipment (19)
Tax effect of adjustments 908 -
Headline loss attributable to
ordinary shareholders
(8 489) (5 434)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
year ended year ened
Figures in R thousands 28 February 28 February
2017 2016
ASSETS
Non-current assets
Property, plant and equipment 24 730 24 764
Intangible assets 1 762 13 834
Deferred taxation 9 629 10 310
36 121 48 908
Current assets
Inventories 6 375 4 819
Trade and other receivables 7 569 4 758
Cash and cash equivalents 91 67
14 035 9 644
Non-current assets held for sale 20
TOTAL ASSETS 50 156 58 572
EQUITY AND LIABILITIES
Stated capital 150 086 145 750
Reserves 10 918 10 818
Accumulated loss (133 389) (116 358)
Total shareholders’ funds 27 615 40 210
Non-current liabilities
Loans from related party 7 813 7 374
Instalment sale creditors - 20
Secured loan 2 192 -
Deferred taxation 5 366 5 222
15 371 12 616
Current liabilities
Trade and other payables 5 442 4 499
Loans from related parties 190 250
Bank overdraft 1 518 920
Instalment sale creditors 20 77
7 170 5 746
Total liabilities 22 541 18 362
TOTAL EQUITY AND LIABILITIES 50 156 58 572
Net asset value per share (cents) 0.8 1.2
CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
year ended year ended
28 February 29 February
2017 2016
Figures in R thousands
Cash used in operations (9 130) (2 146)
Net interest expense (1 336) (710)
Cash flows from operating
activities (10 466) (2 856)
Cash flows from investing
activities
Purchase of property, plant and
equipment (1 396) (5 761)
Purchase of intangible assets (242) (1 043)
Proceeds on sale of intangible
assets 4 700 -
Proceeds on sale of property,
plant and equipment - 78
Repayment in loans receivable - 59
Cash flows from financing
activities
Proceeds on share issue 4 336 -
Advances on related party loans 379 7 624
Advances on securted loans 2 192 -
Repayment of instalment sale (77) (70)
creditors
Net (decrease)/increase in cash
and cash equivalents (574) (1 969)
Cash and cash equivalents at
beginning of year (853) 1 116
Cash and cash equivalents at end
of year (1 427) (853)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED
28 FEBRUARY 2017
Total
Stated Treasury share
Figures in R thousands capital shares capital
Balance at 28 February 2015
- audited 152 491 (6 741) 145 750
Issue of shares - - -
Share-based payment reserve - - -
Total comprehensive loss for
the year - - -
Balance at 29 February 2016
– audited 152 491 (6 741) 145 750
Issue of shares 4 336 - 4 336
Share-based payment reserve - - -
Total comprehensive loss for
the year - - -
Balance at 28 February 2017 156 827 (6 741) 150 086
- audited
Share-based Revaluation Accumulated
payment
reserve reserve loss
Figures in R thousands
Balance at 28 February
2015 - audited 149 10 580 (110 943)
Issue of shares - - -
Share-based payment
reserve 148 - -
Total comprehensive loss
for the year - (59) (5 415)
Balance at 29 February
2016 – audited 297 10 521 (116 358)
Issue of shares - - -
Share-based payment 100 - -
reserve
Total comprehensive loss
for the year - - (17 031)
Balance at 28 February
2017 397 10 521 (133 389)
Total
equity
Figures in R thousands
Balance at 28 February
2015 - audited 45 536
Issue of shares -
Share-based payment
reserve 148
Total comprehensive loss
for the year (5 474)
Balance at 29 February
2016 – audited 40 210
Issue of shares 4 336
Share-based payment 100
reserve
Total comprehensive loss
for the year (17 031)
Balance at 28 February
2017 27 615
GROUP SEGMENTAL ANALYSIS
Business Nutritional Health
Solutions
Segments Foods Services Consolidated
R'000
For the year
ended 29
February 2017 -
audited
Revenue from
external sales 42 162 1 053 - 43 215
Revenue from
internal sales - - 1 250 1 250
Segment
(loss)/profit (2 363) 4 362 (18 205) (16 206)
before tax
Taxation (825)
Loss for the
year (17 031)
Total assets 41 806 7 921 429 50 156
For the year
ended 29
February 2016 -
audited
Revenue from
external sales 37 070 1 199 - 38 269
Revenue from
internal sales - - 1 380 1 380
Segment (loss)
profit before (728) 722 (5 397) (5 403)
tax
Taxation (12)
Loss for the
year (5415)
Total assets 41 176 7 221 12 366 60 763
For management purposes the Group is organised into three
major operating divisions, namely Foods, Healthcare solutions
and Services. These divisions are the basis on which the
company reports its primary segment information.
The Foods division involves the manufacture of staple food for
the mass feeding sector. The Healthcare Solutions division
involves the supply of a range of chlorine free water
purification products. The Services division involves the
providing of administration and management services.
These operating segments are monitored by the Group’s Board
and strategic decisions are made on the basis of adjusted
segment operating results.
BASIS OF PRESENTATION
The abridged financial results for the year ended 28 February
2017 have been prepared in accordance with International
Financial Reporting Standards (“IFRS”), the presentation and
disclosure requirements of IAS 34: Interim Financial
Reporting, the SAICA Financial Reporting Guides as issued by
the Accounting Practices Committee, Financial Reporting
Pronouncements as issued by the Financial Reporting Standards
Council, the Listing Requirements of the JSE Limited and the
requirements of the Companies Act, No 71 of 2008. The results
have been prepared in terms of IFRS on the historical cost
basis, except for the measurement of land and buildings and
certain financial instruments which are measured at fair value
and are consistent, in all material respects, with the
accounting policies and methods applied in the previous
corresponding period. The abridged financial results have been
prepared under the supervision of RS Etchells, in his capacity
as Chief Financial Officer.
NATURE OF BUSINESS
The Group’s primary business focus is to manufacture, market
and sell staple dry food products, water purification and
renewable energy solutions.
OVERVIEW
During the course of the year under review the Board of
Directors resolved to diversify the company’s exposure to
include investments outside of the food manufacturing sector
and to invest in a broader range of sectors within the
industrial and manufacturing sectors.
As part of this strategic change of direction, the board
raised funds via the issue of shares for cash. The proceeds
from the share issue were used to cover operational costs in
the services division of the group.
Further to this management concluded the acquisition of Velani
Strategic Solutions Proprietary Limited (“VSS”), an accredited
distributor of Bosch branded renewable energy and security
solutions to commercial and industrial clients. It should be
noted that VSS has not been consolidated into the current
years financial results as operational control as well as the
costs associated with such remain vested with the previous
owners until such time as the profit warranty has been
achieved. On achievement of the profit warranty the
acquisition price payable for VSS will be settled via the
issue of 300 million NUT shares at 3 cents per share.
Nutritional Foods continues to underperform with pressure on
gross margins resulting from the high cost of raw material
inputs. Volume increases remain a challenge with many
potential volume-increasing opportunities not materializing to
date.
This has been further tempered by the companies BBBEE rating
being reduced from a level 2 to level 5, based on the new
BBBEE scorecard system.
The Board has been approached by various parties that have
shown an interest in acquiring and/or investing in the food
business. The Board will continue to engage with these parties
moving forward.
Cash flows remain a major challenge requiring tight control as
we seek to manage the transition period from a food focused
company to a predominantly energy focused company.
FINANCIAL PERFORMANCE
Group Turnover of R 43,215 million, 12.9% up on the R 38,269
million of the previous corresponding period. The headline
loss increased by 49%, largely as a result of the impairment
of a sundry debtor as well as the significant increase in
financing costs on shareholders and sundry loans advanced to
the Group. Management is pursuing the recovery of the sundry
debtor which if successful will result in the reversal of the
impairment in the next financial period. The high cost of
borrowings is expected to continue during the course of
2017/18.
ISSUE OF SHARES FOR CASH
On 30 September 2016 the company issued 200 000 000 ordinary
NUT shares to Ontario Private Equity Proprietary Limited at an
issue price of 2 cents per share for a consideration of R4
million.
GOING CONCERN
Shareholders are advised that the audited results for the year
ended 28 February 2017 have been prepared on a going concern
basis. This basis presumes that funds will be available to
finance future operations and that the realization of assets
and settlement of liabilities, contingent obligations and
commitments will occur in the ordinary course of business.
DIVIDEND
No dividend has been declared for the year.
AUDIT OPINION
Grant Thornton Durban have audited the annual financial
statements for the year ended 28 February 2017 and their
unmodified audit report is available for inspection at the
Company’s registered office.
These abridged results are extracted from audited information,
but are not in itself audited. The directors therefore take
full responsibility for the preparation of the abridged
results and that the financial information has been correctly
extracted from the underlying financial statements.
The auditor’s report does not necessarily cover all of the
information contained in this announcement/financial report.
Shareholders are therefore advised that in order to obtain a
full understanding of the nature of the auditor’s work, they
should obtain a copy of that report, together with the
accompanying financial information, from the registered office
of the company.
NOTICE OF ANNUAL GENERAL MEETING
Shareholders are hereby advised that the integrated annual
report was released today, which incorporates the notice of
annual general meeting to be held at the Boardroom of Great
Wall Motors SA (Pty) Ltd, 5 Sneezewood Lane, Glen Anil, Durban
on Friday, 1 September 2017 at 10h00. The integrated report
will also be available on the company’s website at
www.nholdings.co.za.
The date on which shareholders must be recorded as such in the
share register for purposes of being entitled to attend and
vote at this meeting is Friday, 25 August 2017 with the last
day to trade being Tuesday, 22 August 2017.
CHANGES TO THE GROUP’S BOARD
Mr Ian Murgatroyd was appointed on 25 April 2016 and resigned
as executive Commercial Director of the Group with effect from
the 5 August 2016.
On behalf of the Board
TV Mokgatlha Umhlanga Rocks
Chief Executive Officer 31 May 2017
Registered Office:
Unit 20, Boulevard Business Park, 14 Belladonna Road,
Cornubia, Kwa-Zulu Natal
Tel: +27 31 536 8066
Auditors
Grant Thornton (Durban)
Designated advisors
PSG Capital Proprietary Limited
Transfer secretaries:
Terbium Financial Services Proprietary Limited, Beacon House,
13 Beacon Road, Florida-North, 1709
Company secretary
JA Etchells CA(SA)
Directors:
RS Etchells (Chief Financial Officer), C Kapnias (Non-
Executive), TV Mokgatlha (Chief Executive Officer), AR Pinfold
(Non-Executive), GR Wambach (Non-Executive Chairman)
Date: 31/05/2017 04:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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