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Financial Results for the year ended 28 February 2019, Posting of Annual Report and Notice of AGM
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 2019, POSTING OF THE ANNUAL REPORT 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 28 February
2019 2018
Revenue 37 876 42 496
Gross profit 15 119 12 034
Operating expenses (18 895) (19 297)
(3 776) (7 263)
Other income 37 51
Loss on disposal of subsidiary (2 484)
Profit on disposal of property,
plant and equipment 122
Operating loss before interest and
taxation (3 617) (9 696)
Net interest expense (1 785) (1 535)
Loss before taxation (5 402) (11 231)
Taxation - deferred (2 551)
Loss for the year (5 402) (13 782)
Other comprehensive income for the - -
year net of taxation
Total comprehensive loss (5 402) (13 782)
Loss per share (cents) – basic and
diluted (0.06) (0.38)
Headline loss per share (cents) -
basic and diluted (0.06) (0.38)
Number of ordinary shares in issue
(000)
- issued net of treasury shares 13 653 368 3 653 368
- weighted-average 8 530 080 3 653 368
- Diluted weighted-average 8 530 080 3 653 368
Calculation of headline loss
(R’000)
Loss attributable to ordinary
shareholders (5 402) (13 782)
Loss on disposal of subsidiary 2 484
Profit on disposal of property,
plant and equipment (122)
Tax effect of adjustments
Headline loss attributable to
ordinary shareholders (5 524) (11 298)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Audited Audited
year ended year ened
Figures in R thousands 28 February 28 February
2019 2018
ASSETS
Non-current assets
Property, plant and equipment 23 214 23 730
Intangible assets 1 622 1 581
Deferred taxation 5 415 5 424
30 251 30 735
Current assets
Inventories 3 322 3 828
Trade and other receivables 5 483 4 390
Cash and cash equivalents 838 21
9 643 8 239
TOTAL ASSETS 39 894 38 974
EQUITY AND LIABILITIES
Stated capital 159 580 150 086
Reserves 10 733 10 939
Accumulated loss (152 367) (147 171)
Total shareholders’ funds 17 946 13 854
Non-current liabilities
Loans from related party 12 552 8 910
Deferred taxation 5 415 5 424
17 967 14 334
Current liabilities
Trade and other payables 3 075 3 968
Loans from related parties 2 551
Bank overdraft 906 1 835
Secured loan 2 432
3 981 10 786
Total liabilities 21 948 25 120
TOTAL EQUITY AND LIABILITIES 39 894 38 974
Net asset value per share (cents) 0.1 0.4
CONSOLIDATED STATEMENT OF CASH FLOWS
Audited Audited
year ended year ended
28 February 28 February
2019 2018
Figures in R thousands
Cash used in operations (3 513) (1 886)
Net interest expense (1 785) (1 535)
Cash flows from operating
activities (5 298) (3 421)
Cash flows from investing
activities
Purchase of property, plant and
equipment (1 287) (608)
Purchase of intangible assets (79) (323)
Proceeds on sale of property,
plant and equipment 257 287
Disposal of subsidiary
Cash flows from investing
activities (1 109) (644)
Cash flows from financing
activities
Proceeds on share issue 9 494
Net movement on related party
loans 1 091 3 458
Net movement on secured loans (2 432) 240
Repayment of instalment sale (20)
creditors
Cash flows from financing
activities 8 153 3 678
Net increase(decrease) in cash and
cash equivalents 1 746 (387)
Cash and cash equivalents at
beginning of year (1 814) (1 427)
Cash and cash equivalents at end
of year (68) (1 814)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED
28 FEBRUARY 2019
Total
Stated Treasury share
Figures in R thousands capital shares capital
Balance at 1 March 2017 -
audited 156 827 (6 741) 150 086
Issue of shares - - -
Share-based payment reserve - - -
Total comprehensive loss for
the year - - -
Balance at 29 February 2018
– audited 156 827 (6 741) 150 086
Issue of shares 9 494 - 9 494
Share-based payment reserve - - -
Total comprehensive loss for
the year - - -
Balance at 28 February 2019 166 321 (6 741) 159 580
- audited
Share-based Revaluation Accumulated
payment
reserve reserve loss
Figures in R thousands
Balance at 1 March 2017 -
audited 397 10 521 (133 389)
Issue of shares - - -
Share-based payment
reserve 21 - -
Total comprehensive loss
for the year - - (173 782)
Balance at 29 February
2018 – audited 418 10 521 (147 171)
Issue of shares - - -
Share-based payment - - -
reserve (206) - 206
Total comprehensive loss
for the year - - (5 402)
Balance at 28 February
2019 - audited 212 10 521 (152 367)
Total
equity
Figures in R thousands
Balance at 28 February
2017 - audited 27 615
Issue of shares -
Share-based payment
reserve 21
Total comprehensive loss
for the year (13 782)
Balance at 28 February
2018 – audited 13 854
Issue of shares 9 494
Share-based payment -
reserve
Total comprehensive loss
for the year (5 402)
Balance at 28 February
2019 - audited 17 946
GROUP SEGMENTAL ANALYSIS
Business Nutritional Health
Solutions
Segments Foods Services Consolidated
R'000
For the year
ended 28
February 2019 -
audited
Revenue from
external sales 37 876 37 876
Revenue from
internal sales 600 600
Segment loss
before tax (2 629) (2 773) (5 402)
Taxation
Loss for the
year (2 629) (2 773) (5 402)
Total external
assets 38 699 1 197 39 896
For the year
ended 28
February 2018 -
audited
Revenue from
external sales 41 721 775 - 42 497
Revenue from
internal sales - - 513 513
Segment loss
before tax (6 509) (874) (3 848) (11 231)
Taxation (2 551)
Loss for the
year (13 782)
Total external
assets 38 529 430 38 959
For management purposes the Group was previously 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. Impilo
Health Solutions Pty Ltd that made up the Healthcare segment
was sold on 23 February 2018. Going forward the group only
has two segments namely Foods and Services.
The Foods division involves the manufacture of staple dry
foods for the mass feeding market. The Services division
involves the providing of administration and management
services to its subsidiaries.
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 financial results for the year ended 28 February 2019 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, other than the adoption of IFRS 9 and IFRS 15, to the
extent that they are applicable. 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 during the year was the
manufacture, marketing and selling of staple dry food
products.
OVERVIEW
Nutritional Foods continues to underperform as a result of low
tonnage volumes through its Klerksdorp factory. During the
year under review management have realized that its stated
turnaround strategy will take longer than anticipated. In
order to ensure adequate cash flows to cover operational
expenses during this period management have engaged with the
Group’s majority shareholders to ensure their continued
support.
During the past 12 months, the company has not been able to
pass on the rising costs of base raw materials such as maize,
soya and sugar. This together with reduced sales volumes, as a
result of pressure on disposable income of the company’s
target customer base, has resulted in lower manufacturing
efficiencies and fixed cost recovery, contributing to
operating losses.
It is anticipated that current inflationary pressure being
experienced on maize and soya prices will result in operating
margins remaining lower than ideal.
FINANCIAL PERFORMANCE
Group Turnover of R37.876 million, 10.9% down on the R42.496
million of the previous corresponding period.
The operating loss for the period under review of R3.617
million was an improvement of 63.1% from R9.696 in the
previous corresponding period with the headline loss improving
by 51.1%.
GOING CONCERN
The Group incurred an operating loss before interest and
taxation for the year of R3.617 million (2018 R9.696 million)
The Group's total assets exceed its total liabilities by
R17.946 million (2018 R13.854 million) despite having an
accumulated loss of R152.367 million (2018 R147.171 million).
The Group continued to incur losses as a result of current
depressed market conditions within the LSM 3-6 market segment.
An additional three million rand loan was agreed and advanced
by the majority shareholder to the Group on 3 March 2019.
This loan is repayable on 31 March 2022. The loan was
advanced to finance working capital requirements of the Group.
A letter of financial support has been provided by the
majority shareholder confirming its intent to provide
financial and/or other support with a view to ensuring that
the company is able to meet its liabilities in the ordinary
course of business.
Given the directors evaluation that the group has sufficient
cash resources to meet its obligations as they fall due, the
financial statements have been prepared on the basis of
accounting policies applicable to a going concern. This basis
presumes that funds will be available to finance future
operations and that the realisation of assets and settlement
of liabilities and commitments will occur in the ordinary
course of business.
DIVIDEND
No dividend has been declared for the year.
AUDIT CONCLUSION
SNG Grant Thornton and Mr E Lakhi as the individual auditor
have audited the annual financial statements for the year
ended 28 February 2019 and their unmodified report is
available for inspection at the Company’s registered office.
These abridged results are extracted from the 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.
POSTING OF ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING
(“AGM”)
Shareholders of the Company are hereby advised that the
Company’s Annual Report, incorporating the full audited
consolidated annual financial statements of the Company for
the year ended 28 February 2019 and notice of the AGM of the
Company was dispatched to shareholders today, 31 May 2019.
Notice is hereby given that the AGM will be held at 10h00 on
Friday, 30 August 2019 at Unit 20, The Boulevard Business
Park, 14 Belladonna Road, Cornubia Industrial Park, Durban to
transact the business as set out in the notice of the AGM
which forms part of the Annual Report.
The date on which shareholders must be recorded as such in the
share register of the Company to be eligible to vote at the
AGM is Friday, 23 August 2019, with the last day to trade
being Tuesday, 20 August 2019.
CHANGES TO THE GROUP’S BOARD
C Kapnias resigned as a non-executive director on 31 August
2018. In terms of the Company’s MOI, GR Wambach was due for
re-election at the Company’s annual general meeting held on 31
August 2018 (“AGM”). As GR Wambach’s re-election was not
proposed as a non-executive director at the Company’s AGM his
directorship terminated. Dr PJ Mokgothu and Ms PM Chabeli were
appointed as non-executive directors on 31 August 2018.
On behalf of the Board
RS Etchells Umhlanga Rocks
Chief Executive Officer 31 May 2019
Registered Office:
Unit 20, Boulevard Business Park, 14 Belladonna Road,
Cornubia, Kwa-Zulu Natal
Tel: +27 31 536 8066
Auditors
SNG Grant Thornton
Designated advisor
PSG Capital
Transfer secretaries:
4 Africa Exchange Registry Proprietary Limited, 1st Floor
Cedarwood House, Ballyclare Drive, Bryanston Ext 7
Company secretary
JA Etchells CA(SA)
Directors:
RS Etchells (Chief Executive Officer), TV Mokgatlha (Non-
Executive Chairman), AR Pinfold (Independent Non-Executive),
Dr PJ Mokgothu (Independent Non-Executive), Ms PM Chabeli
(Independent Non-executive), MM Suping (Non-Executive)
Date: 31/05/2019 01:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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