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NUTRITIONAL HOLDINGS LIMITED - Financial Results for the year ended 28 February 2019, Posting of Annual Report and Notice of AGM

Release Date: 31/05/2019 13:01
Code(s): NUT     PDF:  
 
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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)

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