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CNX
CNX
CNX - Conafex - Unaudited results for the half-year ended 31 March 2007
CONAFEX HOLDINGS SOCIETE ANONYME
(Incorporated in Luxembourg)
RC Luxembourg No. B 17789)
("Conafex")
JSE CODE: CNX ISIN: LU0243998001
Registered office
6 rue Adolphe Fischer, L-1520,
(PO Box 1361, L-1013)
Luxembourg
27 June 2007
Dear Shareholder,
UNAUDITED RESULTS FOR THE HALF-YEAR ENDED 31 MARCH 2007
PROFILE
Conafex is an African agri-resource group listed on the Luxembourg and
Johannesburg stock exchanges. Conafex takes strategic and private equity stakes
in businesses focused on the food sector, in particular horticulture, niche and
value added agriculture.
TRADING UPDATE
Associates and Subsidiaries
A high proportion of the income accrues in the second half of the year due to
the seasonality of the main businesses in which Conafex has invested. Export
oriented businesses based in South Africa experienced a slow start but are
expected to improve in the latter part of the year provided the exchange rate
adjusts to compensate for producer price inflation. Cape Natural Tea Products,
the herbal tea business is expected to show better growth following an easing in
the supply of rooibos tea as a result of a succession of good rainy seasons in
the Cape. The coffee business is performing satisfactorily and Kenya Highlands
Seeds benefited from a good rainy season in East Africa and is well ahead of
budget.
Investments
JSE listed Intertrading Limited, in which Conafex has a 17.5% stake, is in the
final stages of a major restructuring to return it to sustainable earnings. We
expect this company to enter into a growth phase following the closing down of
non-performing and the sale of non-strategic business units. Simply Cereal is
performing to expectation in a highly competitive market and has developed an
exciting range of new products in the health food sector.
FINANCIAL
An operating loss before tax was incurred of R1,433,000 (2006 - operating loss
R1,995,000) and a loss attributable to shareholders of R 1,516,000 (2006 - loss
R1,836,000) for the six-month period ending 28 February 2007.
PROSPECTS
As mentioned in the 2006 review, the Conafex strategy is to concentrate
investment in businesses located in Southern Africa. As a consequence, Accord
Tea Services, the United Kingdom based tea packing business, was sold for
GBP250,000 (R3,545,000) on 3 April 2007.
ZRC Limited, the company to which all Conafex`s Zimbabwe interests were
transferred in February 2006, has indicated that it intends to exercise some of
the options to subscribe for shares in Conafex that were granted to it as part
of the reconstruction of the Conafex group in 2006. The shares in ZRC were
distributed to Conafex shareholders at the time by way of a dividend in specie
and similarly the Conafex shares arising from the exercise of the options will
be distributed in specie to ZRC`s shareholders. The resultant injection of
additional capital into Conafex will provide opportunities for organic growth of
existing businesses and acquisitions.
DIVIDEND
Your Directors do not propose to pay a dividend at the interim stage.
M W BURRELL
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Half years ended Period ended
31 28 30
March February September
2007 2006 2006
Unaudited Unaudited Audited
R000 R000 R000
Notes
Group Revenue, including
share of associates 22,200 16,064 45,012
Less revenue of
associates (8,325) (5,901) (16,212)
Revenue 13,875 10,163 28,800
Operating costs (15,308) (11,726) (30,795)
Operating loss (1,433) (1,563) (1,995)
Share of associated
companies results (251) 349 2,255
Dividend income
Zimbabwean subsidiary - 38 41
Other dividends 40 - 68
receivable
Interest receivable 104 178 342
Exchange gains/(losses) 158 (172) (63)
Interest paid and similar
charges (119) (197) (359)
(Loss)/Profit on ordinary
activities before
exceptional items and tax (1,501) (1,367) 289
Exceptional items 3 (57) (95) (1,856)
Loss before tax 2 (1,558) (1,461) (1,567)
Taxation on ordinary
activities (53) (457) (1,072)
Loss after tax (1,611) (1,918) (2,639)
Minority Interests 95 (83) (268)
Loss attributable to
shareholders (1,516) (1,836) (2,907)
Basic (losses)/earnings
per share (US cents) 127c (189)c
Headline
(losses)/earnings per
share (US cents) 4 120c (69)c
Reconciliation of headline earnings/(losses) per share
Basic loss per share (US cents) 81 c 127 c 189 c
Less exceptional items, net of
tax and minority interests (US
cents) (3)c (7c) (120c)
Headline loss per share (US 78 c (120)c 69 c
cents)
STATEMENT OF CHANGES IN EQUITY
Half years ended Period ended
31 28 30
March February September
2007 2006 2006
Unaudited Unaudited Audited
R000 R000 R000
Fair value adjustment of 64 (796) (2,572)
investments
Proceeds of new shares issued, - - 6,335
net of costs
Exchange differences on
translation of the financial 70 (900) 1,935
statements of foreign entities
Net gain/(loss) not recognised 134 (1,696) 5,698
in the income statement
Net loss for the period (1,516) (1,836) (2,907)
Total recognised (losses)/gains (1,382 (3,532) 2,791
and change in shareholders`
funds
Shareholders` funds at start of 23,813 21,022 21,022
period
Shareholders` funds at end of 22,431 17,490 23,813
period
CONSOLIDATED GROUP BALANCE SHEET
31 28 30
March February September
2007 2006 2006
Unaudited Unaudited Audited
Notes R000 R000 R000
Non current assets
Property, plant and 2,093 1,030 1,913
equipment
Goodwill - 1,123 -
Intangibles 1,501 105 1,501
Investments 5 9,062 10,037 9,270
12,656 12,295 12,684
Current assets
Inventories 7,704 4,355 5,787
Accounts receivable 12,666 4,739 14,517
Cash 10,182 6,971 2,557
30,552 16,065 22,861
Current liabilities
Accounts payable (falling
due within one year) (18,370) (8,588) (8,380)
Net current assets 12,182 7,477 14,481
Accounts payable in more (305) (345) (273)
than one year
Deferred taxation (98) 56 (180)
Total assets less current
liabilities 24,435 19,483 26,712
Capital and reserves
Called up share capital 20,370 13,400 21,819
Share premium account 1,298 - 1,390
Other reserves 660 561 707
Retained earnings 13 3,529 (103)
Shareholders` funds 22,341 17,490 23,813
Minority interests 2,094 1,993 2,899
24,435 19,483 26,712
CONSOLIDATED CASH FLOW STATEMENT
Half years ended Period ended
31 28 30
March February September
2007 2006 2006
Unaudited Unaudited Audited
R000 R000 R000
Operating activities
Cash generated/(used) by 9,216 235 (6,328)
operations
Interest paid (119) (191) (358)
Taxation paid (135) (616) (693)
Net cash inflow/(outflow) 8,962 (572) (7,379)
from operating activities
Investment activities
Purchase of tangible (403) (99) (614)
assets
Purchase of investments (419) - (4,847)
Acquisition of (698) (2,437) (1,902)
subsidiaries/further parts
of minority interests
Proceeds on disposal of - - 1,513
investments
Interest received and 144 178 543
other income
Dividends received from - 38 41
Zimbabwean subsidiary
Net cash outflow from (1,376) (2,320) (5,266)
investment activities
Net cash outflow before 7,586 (2,892) (12,645)
financing
Financing
Proceeds of issue of new - - 6,335
shares
Increase in long term debt 32 43 -
Net decrease in funds 7,618 (2,849) 6,310
Net funds at start of 2,000 8,271 8,271
period
Effect of foreign exchange (93) (530) 39
rate changes
Net funds at end of period 9,525 4,892 2,000
NOTES
1 The results and the cash flow statement for the half year ended 31 March
2007 and the balance sheet at that date, which are unaudited, have been
prepared on the basis of accounting policies adopted for the period ended
30 September 2006, and comply with International Financial Reporting
Standards in all respects, and with Luxembourg legal requirements.
2. Following the decision last year to change the reporting currency, the
results for the comparable period last year have been restated into South
African Rands.
3 The analysis of results is as follows:-
Half years ended
31 March 28 February
2007 2006
R$000 R$000
Revenue Result Revenue Result
South Africa 6,894 (1,013) 6,434 (273)
United Kingdom 4,153 270 3,335 121
Luxembourg and other 2,828 (691) 394 (1,411)
13,875 (1,433) 10,163 (1,563)
Share of associated
companies 8,325 (251) 5,901 349
22,200 (1,684) 16,064 (1,214)
Dividend from
Zimbabwean
subsidiary - 38
Other dividends and
interest received 144 178
Interest paid (119) (197)
Exchange
gains/(losses) 158 (172)
Exceptional items (57) (95)
Loss before tax (1,558) (1,462)
4. The exceptional item in the current period arises on potential compliance
costs of an acquisition/further investment in Simply Cereal. The
exceptional item in the prior year was the costs arising in connection with
the capital restructuring, goodwill on acquisitions, less profits on
disposals of non current assets by a subsidiary.
5. Loss per share is based on the net results attributable to members and the
weighted number of shares in issue of 1,872,484 (2006 comparable period
1,448,038; for the year 1,536,038). Headline earnings per share are based
on the result attributable to shareholders excluding exceptional items, net
of minority interests and tax, where applicable.
6. The investments are stated at fair value.
7. There was capital expenditure of R403,000 during the period (2006 -
R99,000). There were no material capital expenditure commitments as at 31
March 2007 (28 February 2006 - nil).
Date: 27/06/2007 15:00:00 Produced by the JSE SENS Department.
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