Wrap Text
Reviewed Provisional Condensed Consolidated Financial Results for the Year Ended 30 June 2018
AH-VEST LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1989/000100/06)
Share code: AHL ISIN code: ZAE000129177
(“AH-Vest” or “the Company” or “the Group”)
REVIEWED PROVISIONAL CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED
30 JUNE 2018
Condensed statement of financial position
Reviewed Audited
Year Ended Year Ended
30 June 2018 30 June 2017
R R
Assets
Non-current Assets 53 249 737 48 996 001
Property, plant & equipment 47 412 404 42 859 433
Intangible assets 80 594 72 699
Deferred tax 5 756 739 6 063 869
Current Assets 37 240 398 39 344 763
Inventories 12 644 262 12 925 833
Trade and other receivables 18 596 649 20 128 924
Loan to shareholder 5 886 657 6 178 386
Cash and cash equivalents 112 830 111 620
Total Assets 90 490 135 88 340 764
Equity and Liabilities
Capital and Reserves 20 645 245 19 562 163
Stated capital 21 293 071 21 293 071
Accumulated loss (647 826) (1 730 909)
Non-current Liabilities 21 649 621 26 160 605
Finance lease and instalment obligations 3 667 047 4 915 254
Other financial liabilities 12 142 859 15 000 000
Deferred income 5 839 715 6 245 351
Current Liabilities 48 195 269 42 617 996
Provisions 751 978 2 229 531
Trade and other payables 34 249 097 31 406 007
Finance lease and instalment obligations 2 206 980 2 318 282
Other financial liabilities 2 929 472 2 943 249
Deferred income 405 637 405 637
Bank overdraft 7 652 105 3 315 291
Total Equity and Liabilities 90 490 135 88 340 764
Net asset value per share (cents) 20.25 19.18
Net tangible asset value per share (cents) 20.17 19.11
Shares in issue at period end 101 973 333 101 973 333
Condensed statement of comprehensive income
Reviewed Audited
Year Ended Year Ended
30 June 2018 30 June 2017
R R
Revenue 155 779 317 165 495 293
Cost of sales (94 098 530) (108 650 924)
Gross profit 61 680 787 56 844 369
Other operating income 634 213 1 458 341
Operating expenses (58 666 835) (53 776 617)
Operating profit 3 648 165 4 526 092
Investment revenue 1 145 324 714 001
Finance costs (3 403 274) (3 030 780)
Profit before taxation 1 390 215 2 209 313
Taxation (307 129) (892 070)
Profit for the year 1 083 090 1 317 243
Attributed to:
Equity holders of the company 1 083 090 1 317 243
Per share information (cents)
Earnings per share 1.06 1.29
Headline earnings per share 1.05 1.29
Diluted earnings per share 1.06 1.29
Diluted headline earnings per share 1.05 1.29
Weighted average shares in issue 101 973 333 101 973 333
Diluted weighted average shares in issue 101 973 333 101 973 333
Condensed statement of changes in equity
Reviewed Audited
Year Ended Year Ended
30 June 2018 30 June 2017
R R
Share capital and share premium
Opening Balance 1 July 21 293 071 21 293 071
Changes during the year - -
Closing balance at year ended 21 293 071 21 293 071
Accumulated loss
Opening balance (1 730 916) (3 048 163)
Profit for the year 1 083 090 1 317 247
Closing balance at year ended (647 826) (1 730 916)
Total at 30 June 20 645 245 19 562 155
Consolidated statement of cash flows
Reviewed Audited
Year Ended Year Ended
30 June 2018 30 June 2017
R R
Cash flows from operations 11 270 454 3 054 887
Interest received 3 207 957
Interest paid (3 403 274) (2 785 998)
Cash generated from operating activities 7 870 387 269 846
Cash flows from investing activities
Purchase of property plant and equipment (5 900 750) (5 095 409)
Purchase of intangible assets (7 895) -
Advances to shareholder (15 960 057) (5 465 342)
Advances to shareholder repaid 14 741 469 -
Cash utilised in investing activities (7 127 233) (10 560 751)
Cash flows from financing activities
Loans received from shareholder - 244 783
Loans repaid to shareholder - (10 312 421)
Proceeds from other financial liabilities - 17 943 249
Repayment of other financial liabilities (2 870 918) -
Finance lease and instalment sale payments (2 207 845) (724 869)
Government grants received - 2 393 483
Cash (utilised in)/generated from financing activities (5 078 763) 9 544 224
Net decrease in cash and cash equivalents (4 335 609) (746 681)
Cash and cash equivalents at beginning of year (3 203 672) (2 456 990)
Cash and cash equivalents at end of year (7 539 281) (3 203 672)
Cash flows from operations
Profit before taxation for the year 1 390 221 2 209 313
Finance income (1 145 324) (714 001)
Finance costs 3 403 274 3 030 781
Depreciation 2 316 829 2 822 005
Movement in provisions (1 477 549) 1 729 424
Profit on disposal of assets (16 253) -
Government grants (405 636) (696 910)
Decrease/(increase) in inventories 281 570 (3 477 586)
Decrease/(increase)in trade receivables 989 992 (3 704 108)
Increase in trade payables 5 933 330 1 855 970
11 270 454 3 054 888
COMMENTARY
The Board of Directors (“the Board”) of AH- Vest, presents the reviewed results for the year ended
30 June 2018. Revenue has decreased to R155.8 million for the year ended 30 June 2018,
compared to R165.5 million for the year ended 30 June 2017, a decrease of 5.9%. This can be
partly attributed to but not limited to the Company not participating in the Black Friday sales in
the second quarter of FY2018, the Company’s main trade customers cutting back on their
inventory levels in their distribution centres in the period under review, the Company’s trade
customers imposing shorter lead times on orders placed for their distribution centres and the
Company’s inability to respond to the reduced lead times on a timely basis. The Company did
not meet its 95% service level targets in the period under review.
Gross profit margins increased to 39.6% from 34.3% in the prior year. This can be attributed to
increased market share of added value brands with unique offerings, namely the Veri-Peri range,
All Joy Spaghetti Sauce range, Pasta sauces as well as the Big Squeeze range. Service levels
were disappointing on the added value range in the period under review. The Company is under
pressure to increase its capacity on its value-added products, to achieve the targeted service
levels.
Management is currently addressing the production capacity challenges and is anticipating an
improved performance in the next period. Operating expenses have increased by 9.1%
compared to the prior year. The operating expenses as a percentage of turnover increased to
37.7% compared to 32.5% in the prior year. This was mainly due to the 5.9% decrease in turnover,
increased delivery, promotional and employee costs and the failure to pass product price
increases to the supermarket chain stores on time.
The finance lease and installment obligations have decreased by 18.8% from R7.2m (2017) to
R5.9m. This was mainly due to repayments and a settlement of a vehicle during the year under
review.
Provisions have decreased by 66.3% from R2.2m (2017) to R0.8m. The decrease was mainly due
to the settlement of the FSB matter obligation during the year under review.
Other financial liabilities being a term loan have decreased by 16.0% from R17.9m (2017) to
R15m. This was mainly due to repayments made during the period under review.
The bank overdraft has increased by 130.8% from R3.3m (2017) to R7.7m. This was mainly due to
capital expenditure investments to build machinery that will be refinanced in FY2019.
During the year there was an impairment provision of R0.6m for trade and other receivables
compared to R0.3m in 2017. This was mainly due to disputed claims from some customers.
During the year the Company purchased property plant and equipment for R9m compared to
R10.2m in 2017. This was part of the on-going expansion programme, to increase production on
its value-added products namely Veri Peri, however this had not yet been commissioned at the
end of the period under review. It is expected to be commissioned in FY2019. The new
production line is expected to significantly increase the capacity of Veri Peri production. The
expenditure was mainly as follows: plant and equipment R3.1m, motor vehicles R4.1m, lease hold
improvements R0.6m and other assets R1.2m. During the year the Company disposed of motor
vehicles with a carrying amount of R2.1m.
RELATED PARTY BALANCES AND TRANSACTIONS
Eastern Trading (Pty) Limited is deemed to be a related party because it is the holding company
of AH Vest Limited.
Tin Can Man (Pty) Limited is also related party as it is a 100% subsidiary of Eastern Trading (Pty)
Ltd.
Transactions with Eastern Trading (Pty) Ltd
30 June 2018 30 June 2017
Purchase of goods 11 331 002 28 031 295
Revenue from sale of goods (11 337 871) (12 741 481)
Rent paid 3 000 000 3 000 000
Admin and management fees paid 3 966 300 4 153 369
Transport 8 672 417 13 080 966
Interest paid - 244 783
Interest received/ charged (1 145 324) (713 044)
Energy and operating costs 7 063 878 10 102 106
Balances with Eastern Trading (Pty) Ltd
Loan 5 886 657 6 178 386
Trade receivables 2 236 022 3 365 358
Transactions with Tin Can Man (Pty) Ltd
Purchase of goods 6 719 651 4 085 818
Key management remuneration
Executive directors’ remuneration 5 152 945 4 863 819
Non-executive directors’ remuneration 247 500 207 848
STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION
The reviewed provisional condensed consolidated financial statements are prepared in
accordance with the requirements of the JSE Limited Listings Requirements for provisional reports
and the requirements of the Companies Act of South Africa. The Listings Requirements require
provisional reports to be prepared in accordance with the framework concepts and the
measurement and recognition requirements of International Financial Reporting Standards (IFRS)
and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Pronouncements as issued by Financial Reporting Standards Council and to also,
as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The
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.
These provisional condensed consolidated financial results have been reviewed by Nexia SAB&T,
who have issued an unmodified review conclusion thereon. A copy of the review conclusion is
available for inspection at the registered office of the Company.
The results have been prepared by the Financial Director, Mr C Sambaza CA (SA)
The directors take full responsibility for the preparation of this provisional report and are satisfied
that the financial information has been correctly extracted from the underlying financial
statements.
SEGMENTAL REPORTING
IFRS 8 requires an entity to report financial and descriptive information about its reportable
segments, which are operating segments or aggregations of operating segments that meet
specific criteria. Operating segments are components of an entity about which separate
financial information is available that is evaluated regularly by the chief operating decision
maker.
The Chief Executive Officer of the Group, is the chief operating decision maker. He evaluates the
financial information of the Group as one operating unit. Separate operating segment financial
information is not available.
Therefore IFRS 8 was not implemented.
CUSTOMER ANALYSIS
An analysis of the revenue of customers over 10% is set out below: -
2018 2017
Customer A 49% 55%
Customer B 19% 22%
Total 68% 77%
The Company’s overall dependence on its top 2 customers decreased by 9 percentage points
during the current financial year. This was mainly due to the growth in the independent trade
customers but also a decrease in the sales to the retail trade. This is a positive outcome as the
efforts to market into the non-retail market are bearing fruit and management will continue to
focus on growing this side of the business.
HEADLINE EARNINGS
Headline earnings reconciliation:
Profit attributable to equity holders of the company 1 083 090 1 317 243
Adjustments: - -
Profit on disposal of property plant and equipment (16 253) -
Taxation thereon 4 551 -
Headline earnings 1 071 388 1 317 243
ACQUISITIONS AND DISPOSALS
There were no business acquisitions or disposals during the year under review.
CONTINGENCIES
The Company has no contingencies in the period under review.
ISSUE AND REPURCHASE OF SHARES
There were no new share issues or share repurchases during the year under review.
LITIGATION
The Company is currently not involved in any litigation. The FSB matter was settled during the
year under review.
SUBSEQUENT EVENTS
There were no material subsequent events from the year end to the period of publication of
these reviewed results.
FAIR VALUES
The Company does not currently carry any assets or liabilities at fair value which required any
disclosure on its fair value measurement. The directors are of the opinion that the carrying
amount of the financial assets and financial liabilities approximate their fair values due to the
short-term nature thereof. Remaining long term borrowings bear interest at market related
interest rates which results in the carrying amount approximating its fair value.
DIVIDENDS
No dividends were declared during the period. (2017: Nil).
CHANGE IN DIRECTORS
There were no changes to the Board during the year under review. However, post year end, the
Board of AH-Vest is pleased to announce the appointment of Ms Unati Speirs as an Independent
Non-Executive director with effect from 28 September 2018.
Unati holds an MSc in Agriculture and has extensive experience in senior management in South
Africa, the US, Japan and the EU and UN. She is the current chairperson of the UN FAO/UNEP
Sustainable Agri-Food Production Task Team, an Executive Director of the Agri-Consult Group
and serves on the boards of several companies. Unati has vast experience in Agri-business
strategy and business funding, having previously held the position of Head of Business Unit:
Industrial Development Division at the IDC.
The Board welcomes Unati and looks forward to her contribution to the Board.
FUTURE PROSPECTS
The Company developed a new range of products, from locally sourced ingredients and
canned the locally grown produce at its parent company’s tomato processing factory which is
located in The Limpopo province and supports the local farmers providing much needed jobs to
this region. This range is packed in a unique 500g easy open can, and is expected to benefit the
Company into the future, the new products are:
1. All Joy baked beans packed in an easy open 500g can.
2. All Joy Chakalaka Mild & Hot packed in an easy open 500g can.
3. All Joy Peeled Chunky braai relish packed in an easy open 500g can
4. All Joy Peeled crushed tomato packed in an easy open 500g can
5. All Joy peeled chopped tomato 500g packed in an easy open 500g can
The Company, will promote its newly launched Earthwise range of products, using social media.
The product range has been listed in most leading supermarket chain stores.
The Company is committed to growing its exports in strategically targeted countries promoting its
authentically South African brands and expects the export efforts to gain traction in FY2019. The
Company is optimistic about continued growth prospects for the future.
ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING
The annual report is in the process of being compiled and will be posted to shareholders in due
course. A further announcement providing details of the Annual General Meeting will be
published in due course.
I E Darsot
Johannesburg
15 October 2018
Executive Directors: IE Darsot (Chairman/CEO); MNI Darsot; BI Darsot; SI Darsot; R Darsot;
MT Pather; C Sambaza
Non-Executive Directors: H Takolia*; MS Appelgryn*; J Du Plooy* U Speirs (*independent)
Registered address: 15 Misgund Road, Eikenhof, Johannesburg
Designated Advisor Transfer secretaries
Arbor Capital Sponsors Proprietary Limited Computershare Investor Services Proprietary Limited
Auditors Company Secretary
Nexia SAB&T Arbor Capital Company Secretarial Proprietary
Limited
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