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MYD
MYD
MYD - Myriad Medical Holdings - Abridged Unaudited Interim Financial
Statements For The 6 Months Ended 30 November 2007
MYRIAD MEDICAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2006/006371/06)
Share code: MYD & ISIN: ZAE000085825
(Myriad)
ABRIDGED UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE 6 MONTHS ENDED 30
NOVEMBER 2007
- Profit after tax for the six months increased by 30%
- Headline earnings per share for the six months increased by 14%
ABRIDGED GROUP BALANCE SHEET AS AT 30
NOVEMBER
(R`000) Note 2007 2006
ASSETS
Non-current assets 76,975 57,299
Property, plant and equipment 3,733 688
Intangibles 1 73,242 56,611
Current assets 74,079 53,976
Accounts receivable and inventory 71,979 39,651
Taxation 66 -
Cash and cash equivalents 2,034 14,325
Total assets 151,054 111,275
EQUITY AND LIABILITIES
Capital and reserves 123,620 97,159
Share capital and premium 93,388 89,068
Contingently issuable shares 2 3,000 -
Accumulated profits 27,232 8,091
Non-current liabilities 723 -
Deferred tax 1,073 72
Current liabilities 25,638 14,044
Accounts payable and provisions 25,638 10,811
Taxation - 3,233
Total equity and liabilities 151,054 111,275
Net asset value per share (cents) 65.6 52.9
Net tangible asset value per share (cents) 26.7 22.1
Closing number of shares 183,764,706
188,356,543
ABRIDGED GROUP INCOME STATEMENT FOR THE 6 MONTHS ENDED 30
NOVEMBER
(R`000) 2007 2006
Revenue 107,932 46,740
Cost of sales (57,782) (22,044)
Gross profit 50,150 24,696
Operating costs (35,036) (13,532)
Expense recognised in respect of share (468) -
based payments
Operation profit 14,646 11,164
Net interest received 480 232
Interest paid (175) -
Profit before taxation 14,951 11,396
Taxation (4,471) (3,305)
Earnings attributable to ordinary 8,091
shareholders 10,480
Headline earnings per share (cents) 4.9
3 5.6
Earnings per share (cents) 5.6 4.9
Fully diluted headline earnings per 5.4 4.9
share (cents)
Fully diluted earnings per share 5.4 4.9
(cents)
Weighted average number of shares 188,356,543 166,383,406
Fully diluted weighted average number 166,383,406
of shares 195,198,155
ABRIDGED GROUP STATEMENT OF CHANGES IN
EQUITY
2007
(R`000) Share Contingently Accumulated Total
capital issuable shares Profits
and
premium
Balance at the beginning of 93,388 - 16,283 109,671
the period
Contingently issuable shares - 3,000 3,000
Net profit for the period - - 10,480 10,480
Share based payment reserve - - 469 469
adjustment
Balance at the end of the 93,388 3,000 27,232 123,620
period
2006
(R`000) Share Contingently Accumulated Total
capital issuable shares Profits
and
premium
Balance at the beginning of 89,068 - - 89,068
the period
Net profit for the period - - 8,091 8,091
Balance at the end of the 89,068 - 8,091 97,159
period
ABRIDGED GROUP CASH FLOW STATEMENT
(R`000) 2007 2006
Cash from operations 14,646 11,164
Increase in accounts receivables and (20,903)
inventory (12,511)
Increase in accounts payable 464 10,244
2,599 505
Depreciation 570 203
Profit on disposal of property, plant (3) -
and equipment
Expense recognised in respect of share 469 -
based payments
Taxation paid (10,125) -
Interest received 480 232
Interest paid (175) -
Cash flow from operating activities (6,185) 940
Purchase of property, plant and (397)
equipment (1.013)
Purchase of businesses (208) (75,353)
Proceeds on disposal of property, plant 148 67
and equipment
Cash flows from investing activities (1,073) (75,683)
Share capital raised - 89,068
Repayment of borrowings (143) -
Cash flows from financing activities (143) 89,068
(Decrease)/ increase in cash and cash 14,325
equivalents (7,401)
Cash and cash equivalents at beginning -
of period 9.435
Cash and cash equivalents at end of 14,325
period 2,034
NOTES TO THE FINANCIAL STATEMENTS
1. CHANGES TO THE COMPOSITION OF THE GROUP DURING THE PERIOD
Acquisition Newport KZN business
Nature of business Supply of
ventilators
Date of acquisition July 2007
Percentage of business acquired 100%
Purchase consideration settled in cash (R`000) 600
Stock (R`000) 416
Purchase goodwill (R`000) 184
Revenue of Newport business (R`000) 446
Gross profit of Newport business (R`000) 335
2. CONTINGENTLY ISSUEABLE SHARES
The R3,000,000 contingently issuable shares relates to the share component of
the purchase consideration attributable to the acquisition of Filterworks. This
reserve has been raised as the achievement of the warranted profit after tax by
Filterworks and hence the issue of shares is probable. These shares have been
included in the calculation of fully diluted earnings and headline earnings per
share.
RECONCILIATION OF HEADLINE EARNINGS
2007 2006
Earnings attributable to ordinary shareholders 10,480 8,091
Profit on disposal of property, plant and equipment (3) -
Headline earnings 10,477 8,091
SEGMENT INFORMATION
Segment Single-use Capital Technical Total
devices equipment services
(R`000)
2007
Revenue 99,174 6,130 2,628 107,932
Segment 14,654 (117) 109 14,646
profit/(loss)
2006
Revenue 45,138 852 750 46,740
Segment 10,721 121 322 11,164
profit/(loss)
COMMENTRY
3. NATURE OF BUSINESS
The Myriad group is South Africa`s only listed supplier of medical devices and
single use products to both the public and private hospital sectors. Myriad`s
strategy is to consolidate and rationalise the South African medical device
sector. The group currently consists of seven business units, with the rights to
27 leading agencies with a wide range of different products of premier brands.
Myriad has two wholly-owned subsidiaries, Myriad Medical (Proprietary) Limited
(MMPL) and Filterworks (Pty) Limited (Filterworks). Besides the Pall medical
filter agency which is housed in Filterworks, MMPL houses all of the group`s
operating divisions and the Myriad training academy. These include, as separate
divisions, the Manta Medical division, the Manta Forensic division, the ICU
Medical division, the Earth Medical division and the Myriad Medical capital and
technical division.
4. OPERATIONAL REVIEW
For the six months to 30 November 2007, the group generated profit after tax of
R10.5 million. This represents an increase of 30% over the 2006 comparable
period. Based on the weighted average number of shares of 188,356,543, the
resultant earnings and headline earnings per share was 5.6 cents which is line
with the company`s expectations for the first six months.
Trading for the first six months was strong, with the majority of the group`s
divisions meeting or exceeding their respective forecasts. This strong
performance was in spite of the public sector hospital strike in June 2007 in
which sales to the public sector were significantly compromised. ICU
experienced growth in state business in the second half of 2007 and its
contracts with two of the major hospital groups were extended. Manta has
consolidated it existing business by adding additional government tenders to its
portfolio. Manta`s wound care products are becoming increasingly popular in the
market and sales are showing a steady increase, doubling in turnover the last
three months. Earth Medical won a two year state national tender on their
specialist surgical instrument cleaning and reprocessing products. The Myriad
Business Unit has been awarded a significant national government contract to
supply transport ventilators.
The bulk of inventory sold by the group is purchased from overseas suppliers.
The group accordingly has a policy of taking forward cover on a substantial
portion its overseas purchases. Forward cover contracts were entered into prior
to the appreciation of the Rand at the time. These contracts are required to be
re-valued at the reporting date. This treatment resulted in a foreign exchange
loss of R639,000.
The group has utilised its internally generated cash flow to fund the additional
payment of R3.7million relating to the achievement of super profits by both
Manta Divisions, to fund the working capital requirements of Filterworks and to
settle 2007 taxation liabilities. The increase in current assets can be
attributed to strong sales in October and November 2007 and the increased stock
holding due to additional products ranges being sold by Earth Medical and the
additional stock holding in Filterworks require to meet its forecast sales.
5. PROSPECTS
In terms of Myriad`s two-pronged approach to product range expansion, Myriad has
entered into an agreement subject to certain conditions, to acquire 100% of
Surgical Innovations (Pty) Limited. This will give Myriad access to a focused
range of complementary agencies and products in the areas of urology, ear, nose
and throat, vascular, neuro-surgery, general surgery, gynaecology and
ophthalmology. The group also continues to be in discussions with additional
international principals to represent their products in South Africa and Africa.
In addition to increasing its business with the public sector, Myriad will
continue to look for opportunities and develop its business north of the South
African border.
6. ACCOUNTING POLICIES
The abridged group financial results are prepared in accordance with IAS 34
(Interim Financial Reporting), the requirements of the South African Companies
Act, Act 61 of 1973, and the Listing Requirements of JSE Limited. The financial
results presented above have been reviewed but not audited by Mazars Moores
Rowland the group`s auditors. Their limited review report is available for
inspection at the Myriad`s registered office during normal office hours. The
abridged group financial results have been prepared under the historical cost
convention as modified by the revaluation model in terms of IAS16 - Property,
Plant and Equipment.
7. DIVIDEND
No dividend has been recommended or declared in this interim period.
For and on behalf of the board
Dr PM Mandela, Chairperson
Johannesburg
11 February 2008
Directors: Dr PM Mandela*, Dr J Shapiro, RS Shapiro, M Nielsen, D Schneider*, E.
Senamolele*, P Vallet*
(*non-executive)
Designated Adviser
Sasfin Capital
(a division of Sasfin Bank Limited)
Auditors
Mazars Moores Rowland
Transfer Secretaries
Computershare Investor Services 2004 (Pty) Ltd
Registered Office
Second Floor
5 St David`s Place
Parktown, 2193
Johannesburg
Date: 11/02/2008 11:26:01 Produced by the JSE SENS Department.
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