Wrap Text
Unaudited Condensed Consolidated Interim Results for the six months ended 31 August 2018
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 CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED
31 AUGUST 2018
Unaudited Unaudited Audited
Unaudited Condensed Six months Six months Year ended
Consolidated Statement of
Profit and Loss and
Comprehensive Income
for the period ended 31 Aug 2018 31 Aug 2017 28 Feb 2018
R’000 R’000 R’000
Revenue 19,430 22,462 42,496
Operating loss before
interest and taxation (2,053) (2,275) (7,212)
Loss on disposal of (2,484)
subsidiary
Net finance costs (753) (701) (1,535)
Loss before taxation (2,806) (2,976) (11,231)
Taxation - (2,726) (2,551)
Loss for the period (2,806) (5,702) (13,782)
Other comprehensive income
for the year net of - - -
taxation
Attributable to ordinary (2,806) (5,702) (13,782)
shareholders
Loss per share (cents) –
basic and diluted (0.08) (0.16) (0.38)
Headline loss per share
(cents) – basic and diluted (0.08) (0.16) (0.31)
Number of ordinary
shares in issue (000)
- issued net of treasury 3,653,368 3,653,368 3,653,368
shares
- weighted-average 3,653,368 3,653,368 3,653,368
- Diluted weighted-average 3,657,257 3,667,633 3,661,146
Calculation of headline
earnings (R’000)
Loss attributable to
ordinary shareholders (2,806) (5,702) (13,782)
Loss on disposal of
subsidiary - - 2,484
Headline loss attributable
to ordinary shareholders (2,806) (5,702) (11,298)
Unaudited Condensed
Consolidated
Statement of Financial Unaudited Unaudited Audited
Position for the period Six months Six months Year ended
ended 31 Aug 2018 31 Aug 2017 28 Feb 2018
R’000 R’000 R’000
ASSETS
Non-current assets
Property, plant and 23,093 24,232 23,730
equipment
Intangibles 1,518 1,675 1,581
Deferred taxation 5,463 6,902 5,424
30,074 32,809 30,735
Current assets
Inventories 4,842 6,559 3,828
Trade and other receivables 4,344 8,659 4,390
Bank balance and cash 4,482 57 21
13,668 15,275 8,239
TOTAL ASSETS 43,742 48,084 38,974
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 150,086 150,086 150,086
Shares to be issued 10,000 - -
Reserves 10,939 10,949 10,939
Accumulated loss (149,977) (139,091) (147,171)
Total shareholders’ funds 21,048 21,944 13,854
Non-current liabilities
Loans from related parties 12,062 8,484 8,910
Secured loan - 2,313 -
Deferred taxation 5,463 5,366 5,424
17,525 16,163 14,334
Current liabilities
Trade and other payables 3,811 7,293 3,968
Bank overdraft 1,358 2,684 1,835
Loans from related parties - - 2,551
Secured loan - - 2,432
5,169 9,977 10,786
TOTAL EQUITY AND 43,742 48,084 38,974
LIABILITIES
Net asset value per share 0.6 0.6 0.4
(cents)
Unaudited Condensed Unaudited Unaudited Audited
Consolidated
Statement of Cash Flows For Six months Six months Year ended
the period ended 31 Aug 2018 31 Aug 2017 28 Feb 2018
R’000 R’000 R’000
Cash utilised by operations (2,378) (872) (1,886)
Net finance costs (753) (701) (1,535)
Cash flows from operating
activities (3,131) (1,573) (3,421)
Cash flows from investing
activities
Purchase of property, plant
and equipment (163) (297) (608)
Disposal of intangible
assets 63 87 -
Purchase of intangible
assets - - (323)
Disposal of subsidiary - - 287
Cash flows from financing
activities
Shares to be issued 10,000 - -
Advances on related party 601 481 3,458
loans - 121 240
Advances on secured loan
Repayment of instalment - (20) (20)
sale creditors
Net (decrease)increase in
cash and cash equivalents 7,370 (1,201) (387)
Cash and cash equivalents
at beginning of period (1,814) (1,427) (1,427)
Cash and cash equivalents
at end of period 5,556 (2,628) (1,814)
Unaudited Condensed
Consolidated
Statement of Changes
in Equity for the Trea- Share-
Stated sury based Reval- Accu- Equity
period ended capital shares payment uation mulated
31 August 2017 reserve reserve loss
R’000 R’000 R’000 R’000 R’000 R’000
Balance at 28
February 2017 -
audited 156,827 (6,741) 397 10,521 (133,389) 27,615
Total comprehensive
loss for the period (5,702) (5,702)
Share-based payment 31 31
reserve
Balance at 31 August
2017 – unaudited 156,827 (6,741) 428 10,521 (139,091) 21,944
Total comprehensive
loss for the period - - - (8,080) (8,080)
Share-based payment
reserve - (10) - (10)
Balance at 28
February 2018 –
audited 156,827 (6,741) 418 10,521 (147,171) 13,854
Total comprehensive
loss for the period - - - - (2,806) (2,806)
Balance at 31 August
2018 – unaudited 156,827 (6,741) 428 10,521 (149,977) 11,048
Unaudited Condensed Foods Healthcare Services Consolidated
Consolidated Group Solutions
Segmental Analysis
R’000 R’000 R’000 R’000
Business segments
for the six months ended 31
August 2018 - unaudited
Revenue from external sales 19,430 - - 19,430
Revenue from internal sales - - 300 300
Segment Profit (Loss) (1,744) - (1,062) (2,806)
before tax
Taxation -
Loss for the period (2,806)
for the six months ended 31
August 2017 - unaudited
Revenue from external sales 22,043 419 - 22,462
Revenue from internal sales - - 313 313
Segment Profit (Loss) (1,140) (213) (1,623) (2,976)
before tax
Taxation (2,726)
Loss for the period (5,702)
for the year ended 28
February 2018 - audited
Revenue from external sales 41,721 775 - 42,496
Revenue from internal sales - - 513 513
Segment Profit (Loss) (6,709) (838) (3,684) (11,231)
before tax
Taxation (2,551)
Loss for the year (13,782)
COMMENTARY
BASIS OF PRESENTATION
The unaudited, condensed interim financial results for the period ended 31
August 2018 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 Accountants Council, the
Listings 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 annual financial statements.
The unaudited, condensed interim financial results have been prepared under
the supervision of the Group Financial Director, Mr RS Etchells.
Neither these unaudited, 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
For management purposes the Group is organized into two major operating
divisions, namely Foods and Services. These divisions are the basis on
which the Group reports its primary segment information.
The Group’s primary business focus during the period under review was the
manufacture and sale of basic staple dry food products to the LSM 3 to 6
market sectors as well as mass feeding schemes and other contract
manufacturing activities at its Klerksdorp based facility, Nutritional Foods
(“NF”).
NF operates a FSSC22000 accredited factory in the North-West province that
manufactures and sells a basket of staple dry food products. The company’s
main customers being the National Department of Basic Education, via the
National School Nutrition Program (NSNP), the National Department of Health,
mining houses as well as industrial catering outlets. In addition, the
company offers contract manufacturing services.
OVERVIEW
NF experienced little progress during the period under review due mainly to
the Groups severely strained cash flow position as well as the lack of
suitable BBBEE credentials. To this end management sort to find an equity
investor that would be able to re-capitalise the Group as well as improve
company’s BBBEE scorecard.
In May 2018 management secured a provisional commitment from Baphalane Ba
Mantserre Investment Holding Proprietary Limited (“BBMIH”) to underwrite a
R10m Claw Back Rights Issue. During the course of the following 3 months
management worked closely with its designated advisors, PSG Capital, to
finalise the Rights Issue, culminating in the opening of the Rights Issue at
the end of August 2018. After the issue of the new shares the Groups black
ownership is at 76.4%, with the BBMIH holding 66.7% of the total number of
shares in issue. Management are now busy finalizing the new BBBEE
application for NF, which will result in the company achieving an improved
BBBEE rating being.
Management are confident that this fact, together with the assistance of its
new majority shareholders BBMIH, will greatly assist NF in securing new off-
take agreements with mining houses and public sector clients.
In August 2017 Mr Thabo Mokgatlha resigned as CEO of the company in order to
pursue his interest in community development. He was appointed as CEO OF
BBMIH, the community investment company that is now the majority shareholder
in NUT.
Mr. Rob Etchells was appointed as the Chief Executive Officer of the company
and will continue to serve as the Group Financial Director in the interim
whilst the board looks to appoint a suitably qualified replacement as
Financial Director.
FINANCIAL HIGHLIGHTS
Group Turnover decreased to R19,430 million compared to R22,462 million in
the previous corresponding period. The Headline loss decreased by 50.7% for
the period under review, to R2,806 million compared to a loss of R5,702
million in the previous corresponding period. Both the loss per share and
headline loss per share decreased by 50.7% for the period under review, to
0,08 cents compared a loss of 0,16 cents in the previous corresponding
period. The main reason for the improvement being the once-off write-off of
a deferred tax asset of R2,726 million in the previous corresponding period.
SUCCESSFUL CONCLUSION OF RIGHTS OFFER
In terms of the Subscription agreement with Baphalane Ba Mantserre
Investment Holdings Proprietary Limited (“the Subscriber”), they committed
to subscribe fully for the Rights offer shares which was effected on 10
September 2018. The R10 million for this Rights Offer was paid into the
company’s bank account on 1 June 2018, by the Subscriber. This amount has
therefore been included in equity.
GOING CONCERN
As stated in the commentary above the Company has continued to make
operating losses. These losses continue to place strain on already stressed
cash flows. As a consequence, management was forced to review the status of
the Company’s disposable cash resources as well as its commitments to repay
its overdraft facilities and certain shareholders loans. To this end
management sought to find an equity investor that would be able to re-
capitalise the Group as well as to negotiate an extension on existing
shareholders loans. Management are happy to inform shareholders that they
have successfully concluded an underwriting agreement with BMIH to fully
fund a R10m Claw Back Rights Issue. Furthermore, management were able to
renegotiate the terms of the shareholders loans that were due at the end of
March 2018 for a period of 3 years. This places the group in a more stable
financial position with the ability to finance growth in its operations.
Shareholders are advised that the unaudited condensed consolidated interim
results for the six months ended 31 August 2018 have been prepared on the
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.
CHANGES TO THE GROUP’S BOARD
Mr Thabo Mokgatlha resigned as Chief Executive Officer but has remained as a
Non-executive director.
Mr Rob Etchells was appointed as Chief Executive Officer.
Dr C Kapnias resigned as Independent Non-executive directors with effect
from 31 August 2018.
Mr GR Wambach retired as Independent Non-executive directors with effect
from 31 August 2018.
Dr PJ Mokgothu and Ms PM Chabeli were appointed as Independent Non-executive
directors with effect from 31 August 2018.
DIVIDENDS
No dividends were declared for the six months ended 31 August 2018.
On behalf of the board
R.S.Etchells
Chief Executive Officer
Umhlanga Rocks
30 October 2018
Directors
RS Etchells (Chief Executive Officer & Group Financial Director)
AR Pinfold (Lead Independent Non-executive)
TV Mokgatlha (Non-executive Chairman)
Dr PJ Mokgothu (Independent Non-executive)
Ms PM Chabele (Independent Non-executive)
Registered office
Unit 20 Boulevard Business Park, 14 Belladonna Road, Cornubia, Durban
Tel: +27 31 536 8066
Designated Advisor
PSG Capital Proprietary Limited
Transfer secretaries
4 Africa Exchange Registry Proprietary Limited
1st Floor, Cedarwood House, Ballyswoods Office Park, 33 Ballymore Drive,
Bryanston, 2121
Company secretary
JA Etchells CA(SA)
Date: 30/10/2018 03:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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