|
MKX
MKX
MKX - Milkworx Limited - Abridged unaudited interim financial results for the
six months ended 31 December 2007
MILKWORX LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 1998/011074/06)
SHARE CODE MKX ISIN ZAE000058020
("MILKWORX" OR "THE COMPANY")
ABRIDGED UNAUDITED INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED
31 DECEMBER 2007
BALANCE SHEETS
Unaudited Unaudited Audited
31 Dec 2007 31 Dec 2006 30 Jun 2007
R`000 R`000 R`000
ASSETS
Non-current assets 21 790 21 486 22 223
Property, plant and 18 050 19 022 18 685
equipment
Intangible assets 704 738 732
Deferred taxation 3 036 1 726 2 806
Current assets 17 715 22 976 14 880
Inventories 7 427 7 730 7 839
Trade and other 7 910 13 003 6 888
receivables
Cash and cash 2 378 2 243 153
equivalents
Total assets 39 505 44 462 37 103
EQUITY AND LIABILITIES
Capital and reserves 18 243 19 448 18 636
Share capital 5 953 5 453 5 753
Share premium 16 353 15 353 15 953
Retained income/(loss) (18 573) (15 868) (17 580)
Non-distributable 14 510 14 510 14 510
reserves
Non-current liabilities 3 394 4 437 4 975
Long-term liabilities 836 1 469 2 350
Shareholder`s loans 2 558 2 968 2 625
Current liabilities 17 868 20 577 13 492
Trade and other 12 096 13 718 8 226
payables
Bank overdraft 2 988 4 501 3 542
Provision and accruals 601 334 705
Short-term portion of 2 183 2 024 1 019
liabilities
Total equity and 39 505 44 462 37 103
liabilities
Net asset value per 3.1 3.6 3.3
share (cents)
Net tangible asset
value per share (cents) 3.0 3.4 3.2
Shares in issue at 595 248 545 248 575 248
period end (`000)
INCOME STATEMENTS
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
Ended ended ended
31 Dec 2007 31 Dec 2006 30 Jun
2007
R`000 R`000 R`000
Revenue 32 584 39 245 66 352
Cost of sales (26 913) (29 375) (50 670)
Gross profit 5 671 9 870 15 682
Other income 336 107 150
Operating expenses (6 861) (9 433) (17 682)
(Loss)/Profit before (854) 544 (1 850)
interest and taxation
Interest received - - 21
Finance charges (370) (407) (826)
(Loss)/Profit before (1 224) 137 (2 655)
taxation
Taxation 231 (43) 1 037
Net (loss)/profit for (993) 94 (1 618)
the period
Reconciliation between earnings and headline earnings
Earnings per share (0.17) 0.02 (0.3)
(cents)
Headline earnings per (0.17) 0.02 (0.3)
share (cents)
Weighted average number
of shares (`000) 590 206 545 248 557 083
CASH FLOW STATEMENTS
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
Ended ended ended
31 Dec 2007 31 Dec 2006 30 Jun
2007
R`000 R`000 R`000
Cash flows from 3 224 809 141
operating activities
Cash flows from (583) (177) (1 214)
investing activities
Cash flows from 138 (260) 315
financing activities
Net movement in cash
and cash equivalents 2 779 372 (758)
Cash and cash
equivalents at (3 389) (2 630) (2 630)
beginning of period
Cash and cash
equivalents at end of (610) (2 258) (3 389)
period
STATEMENT OF CHANGES IN EQUITY
Non-
Share Share Distributable Accumulated
Capital Premium Reserve Profit Total
R`000 R`000 R`000 R`000 R`000
Balance at 1 Jul 5 453 15 353 14 510 (15 962) 19 354
2006
Net loss for the (1 618) (1 618)
period
Issue of shares 300 600 900
Balance at 1 Jul 5 753 15 953 14 510 (17 580) 18 636
2007
Net loss for the (993) (993)
period
Issue of shares 200 400 600
Balance at 31 Dec 5 953 16 353 14 510 (18 573) 18 243
2007
SEGMENT RESULTS
Avondale Creamstar Group
6 Months 6 Months 6 Months
ended ended ended
31 Dec 2007 31 Dec 2007 31 Dec 2007
R`000 R`000 R`000
Revenue
External sales 22 681 9 903 32 584
Internal segment sales 571 73 644
Total Revenue 23 252 9 976 33 228
Results (410) (455) (865)
Unallocated expenses (359)
Taxation 231
Results (993)
Avondale Creamstar Group
6 Months 6 Months 6 Months
ended ended ended
31 Dec 31 Dec 2006 31 Dec
2006 2006
R`000 R`000 R`000
Revenue
External sales 19 949 22 542 42 491
Internal segment sales 1 490 112 1 602
Total Revenue 21 439 22 654 44 093
Results 1 184 (601) 583
Unallocated expenses (446)
Taxation
Results 94
COMMENTARY
1. Group Review
Milkworx manufactures and distributes ice cream and other related products, both
under its own brands, Avondale and Creamstar and as a contract manufacturer for
various multinational companies.
2. Basis of preparation
The unaudited interim financial statements have been prepared in accordance with
International Accountings Standards (IAS) 34: Interim Financial Reporting. The
accounting policies of the company comply in all material respects with
International Financial Reporting Standards(IFRS) and the Companies Act, 1973.
The accounting policies and methods of measurement and recognition are
consistent with those applied in the previous financial period.
3. Financial and operational overview
The interim results for the six months ended 31 December 2007 reflect a decrease
in turnover of 17% from the prior comparative period. This is attributable to
the adverse weather conditions experienced during the summer months, which
dampened the demand for the Company`s products as well as decrease in purchases
by the informal sector, the traditional stronghold of the Creamstar division.
This, together with the ongoing effects of the cancellation by Milkworx of
unprofitable supermarket contracts, resulted in Creamstar`s turnover decreasing
by approximately 56%.
A continued increase in the cost of certain raw materials and the market`s
intolerance to price increases on the final product, resulted in a decline in
the gross profit margin from 26% in the comparative period to 17.5% in the
current year.
The combination of lower revenues and the significant decrease in margins,
together with an 8% increase in cost of sales, resulted in a decline in the net
profit from a profit of R94 000 in the comparative period to a loss of R993 000.
During the previous financial year, the board identified and began implementing
remedial actions to address the declining profits. These included the upgrading
of the Avondale facility to enable it to receive and store fresh milk, a switch
to the use of fresh milk as opposed to milk powders in the production of the
Company`s products, the opening of a concept store in Silvertondale, the
termination of the loss-making supermarket contracts, the outsourcing of
maintenance operations and an improvement in collection of trade receivables.
The benefits of these actions have initially been seen in the 27% reduction in
operating expenses compared to the prior comparative period, but the full impact
of these initiatives is only expected to begin to flow through during the
remainder of the current financial year.
4. Prospects
Shareholders were advised at the time of release of the annual financial
statements that following the termination of the supermarket contracts, the
Company would be exploring alternative revenue generating and cost-saving
initiatives to return the group to profitability and to ensure the
sustainability of future earnings. In this regard, fresh cream sales are
increasing and there is great potential to grow this market. Allied to this,
the Avondale facility is currently researching the market potential for and is
involved in the process of developing and testing non-dairy cream. This process
is expected to be concluded within the next six months and, if deemed viable,
the product will be launched into the market.
Following the opening of the first concept factory outlet at Silvertondale, new
shop locations are being investigated. As previously reported, these shops will
initially be opened and managed by the Company, although the franchising concept
is being investigated.
The world prices on certain commodities (milk powders) have stabilized and
according to international traders the prices will start following a downward
trend in the short term. This should reduce the cost of sales on certain
products.
5. Issue of Shares
On the 15th of August 2007, the Company issued 20 000 000 shares under the
general authority of the directors. The shares were issued at 3 cents per share,
being a 10% discount to the volume trade weighted share price for the 30 days
preceding the issue of these shares.
6. Board Appointment
Dr Heidi Grimmer was appointed as a non-executive director and Chairman of the
Company with effect from 01 January 2008.
7. Dividends
No dividends were recommended or declared for the interim period.
8. Cautionary Announcement
Shareholders are advised that the Company has entered into negotiations which,
if successfully concluded, could have a material effect on the price at which
the Company`s securities trade on the JSE Limited. Shareholders are accordingly
advised to exercise caution when dealing in their Milkworx securities until a
further announcement is made.
For and on behalf of the board
Stephan Roux
Chief Executive Officer
8 April 2008
Directors: H Grimmer (Chairperson)*, SA Roux (Chief Executive Officer), T
Dajcar,
P van Heerden, A Stander, J du Toit*
*(Non Executive)
Transfer secretaries Registered address
Computershare Investor Services (Pty) Ltd 167 Alumina Street
Silvertondale
Pretoria
Designated Advisor
Arcay Moela Sponsors (Pty) Ltd
Date: 09/04/2008 16:40:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
