| Wed 28 May 2008, 14:20 | | IMU - Imuniti - Reviewed Results For The Year Ended 29 February 2008 |
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IMU
IMU
IMU - Imuniti - Reviewed Results For The Year Ended 29 February 2008
IMUNITI HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2004/002282/06)
(JSE Code: IMU & ISIN: ZAE000089199)
("Imuniti" or "the company")
Reviewed Results For The Year Ended 29 February 2008
Group income statement
Reviewed Audited 14
months ended
Year ended 29 28 February
February 2008 2007
Continuing Operations
Sales 69,584,031 63,314,940
Cost of sales (33,464,560) (31,893,260)
Gross Profit 36,119,471 31,421,700
Other Income 304,594 1,121,986
Operating expenditure (44,119,978) (29,717,317)
Inventory write-down (2,901,854)
Operating profit/(loss) (10,597,767) 2,826,369
Interest income 47,060 37,764
Finance costs (932,782) (120,665)
Profit / (Loss) before taxation (11,483,489) 2,745,468
Taxation 2,854,205 (300,096)
Net Profit/(Loss) from continuing (8,629,284) 2,445,372
operations
Discontinued operations
Profit/(Loss) from discontinued operations (6,383,590) -
Net Profit/(Loss for the year (15,012,874) 2,445,372
EPS and HEPS
Reviewed Audited
Year ended 14 months ended
29 February 2008 28 February 2007
Earnings per share
Earnings per income statement (15,005,324) 2,445,372
Weighted average number of 753,555,956 587,203,000
shares
EPS (cents) (1.99) 0.42
Headline earnings per share
Earnings per income statement (15,005,324) 2,445,372
Adjust for
Profit from disposal of (10,746) (3,216)
property,plant & equipment
Loss from discontinuing 6,383,590 -
operations
Headline earnings (8,632,480) 2,442,156
Weighted average number of 753,555,956 587,203,000
shares
HEPS (cents) (1.15) 0.41
Reviewed Audited
BALANCE SHEET
year ended year ended
Assets 29 February 2008 28 February 2007
Non-Current Assets 85,146,399 86,801,609
Property, plant and equipment 13,007,227 13,646,108
Intangible assets 43,367,526 47,445,169
Goodwill 25,414,407 25,207,298
Deferred tax 3,357,239 503,034
Current Assets 20,990,830 26,153,124
Inventories 7,268,418 10,700,526
Trade and other receivables 12,470,151 13,213,499
Other loans receivable 1,100,450 1,078,121
Cash and cash equivalents 151,811 1,160,978
Total Assets 106,137,229 112,954,733
Equity and Liabilities
Equity 85,127,450 98,947,330
Share capital & premium 99,058,886 97,865,896
Retained income (14,181,176) 831,694
Revaluation reserve 249,740 249,740
Liabilities 2,240,725 1,348,198
Instalment sale obligations 2,240,725 1,348,198
Current Liabilities 18,769,054 12,659,205
Current portion of instalment 733,852 422,615
sale
Trade and other payables 12,490,394 11,065,575
Provisions 1,288,342 218,940
Overdraft 4,256,467 952,075
Total Equity and Liabilities 106,137,229 112,954,733
Group statement of changes in equity
Share capital Share premium
Balance at 1 January 2005 50,000 -
Profit for the year
Issue of shares 25,295 97,790,601
Revaluation of land and buildings
Balance at 1 March 2007 75,295 97,790,601
Loss for the year
Issue of shares 1,463 1,191,527
Balance at 29 February 2008 76,758 98,982,128
Revaluation Retained
reserve earnings
/accumulated
loss
Balance at 1 January 2005 - (1,613,679)
Profit for the year 2,445,372
Issue of shares
Revaluation of land and buildings 249,740
Balance at 1 March 2007 249,740 831,693
Loss for the year (15,012,873)
Issue of shares
Balance at 29 February 2008 249,740 (14,181,180)
Total equity
Balance at 1 January 2005 (1,563,679)
Profit for the year 2,445,372
Issue of shares 97,815,896
Revaluation of land and buildings 249,740
Balance at 1 March 2007 98,947,329
Loss for the year (15,012,873)
Issue of shares 1,192,990
Balance at 29 February 2008 85,127,446
Group cash flow statement
Reviewed Audited
Year ended 14 months ended
29 February 28 February
2008 2007
Cash flow from operating (4,932,327) (2,727,958)
activities
- Cash used in operations (4,046,605) (2,537,057)
- Finance costs (932,782) (120,665)
- Interest received 47,060 39,764
- Normal tax paid - (110,000)
Cash flow from investing (1,777,986) (92,293,532)
activities
- Purchase of property, plant (1,596,794) (1,479,543)
& equipment
- Proceeds on disposal of 48,246 361,414
property, plant
& equipment
- Increase in intangible (207,109) (28,077,643)
assets
- Increase in loans receivable (22,329) (1,078,121)
- Businesses acquired - (62,019,639)
Cash flow from financing 2,396,754 94,638,531
activities
- increase/(decrease) in 1,203,764 (305,290)
long term borrowings
- Decrease in other loans - (2,872,075)
- Issue of shares 1,192,990 97,815,896
Net cash movement (4,313,559) (382,959)
Cash at beginning 208,903 591,862
Cash at end (4,104,656) 208,903
Notes to cash flow
Operating Profit (10,597,767) 2,826,369
(Profit) / loss on disposal (10,746) 311
Depreciation and scrapping 2,198,175 3,342,130
Provisions 1,069,402 218,940
Cash outflow from discontinuing (2,305,941)
operations
(9,646,877) 6,387,750
Working capital changes
- Decrease/(increase) in 3,432,108 (4,420,794)
inventory
- Decrease/(increase) in trade 743,348 (10,721,529)
& other
receivables
- Increase in trade & other 1,424,816 6,217,516
payables
Net cash generated from (4,046,605) (2,537,057)
operations
Basis of preparation
The annual financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS"), the presentation
requirements of IAS34 (Interim Financial Report) and the Companies Act of South
Africa. The annual financial statements have been prepared on the historical
cost basis, and incorporate the principal accounting policies set out below.
These accounting policies are consistent with the previous period.
Review
The results have been reviewed by our auditors, Siyabala Inc. whose review
report is available for inspection at the registered office of the company.
Commentary:
Income Statement
The second six months of the financial year have shown a major improvement to
that of the first 6 months.
Sales have increased by 9,9 % as compared the fourteen month financial period
ended 28 February 2007 to R 69 584 031(2007: R 63 314 940). As previously
mentioned Imuniti has adopted a strategy of focusing on its existing product
range and this strategy has started to produce results. Imuniti has also managed
to reduce operating costs significantly from R 25 108 098 for the first 6 months
of the financial year to R 19 011 880 for the second six months of the thereof.
In addition, our gross profit margin improved by 4,59% to 51,91% (2007: 49,63%).
Again, the second six months of the financial year showed an improvement over
the first with the gross profit margin increasing to 52,28% from 51,56%.
A year end adjustment was made to stock, due to a quantity of stock having
expired. The stock was in existence as at 31 August 2007 and should not reflect
on the trading results of the 2nd six months. This provision was in line with
the policy of writing stock down to the lower of cost and net realizable value.
A possibility exists that Imuniti may still recover R 1 m from the stock, but
this has not been accounted for.
Of significance is that after taking account of the above, Imuniti managed to
reduce the net loss reported for the first 6 months from the previously reported
R 5 331 723 adjusted by a further R 2 901 854 (stock write-off), to a net loss
of R 395 705 for the second six months of the year. This was achieved despite
the fact that the December and January periods are low trading months. The
strategies that were implemented have started to show results and Imuniti will
continue to build on these.
It should be noted that Imuniti still incurred costs in the 2nd six months which
have now been eliminated from the overhead cost structure of the group.
including expenses related to the Pretoria office and reductions in directors`
salaries.
This trend of cost reduction will continue into the new year and barring major
issues that are out of our control we believe that Imuniti has managed to turn
the company around.
Imuniti decided to write-off the intangible asset created by the captilisation
of costs incurred in building the Imuniti Health Management Services brand and
to deal with the roll out of wellness centres. As previously reported Imuniti
discontinued these operations and in line with sound accounting principles
decided to write the associated intangible asset off. This issue has now finally
been concluded on and is no longer a cash drain on the group. The impairment
amounts to R 6 383 590, of which R 4 077 643 relates to the previous financial
year and R 2 305 947 to this financial year, and R 2 031 528 of the R 2 305 947
to the first 6 months of the current year.
It is the belief of Imuniti`s management that the company has now finally
"cleared out the cupboard" and that has the correct infrastructure and key staff
members and directors in the correct positions To produce more favourable
results going forward.
Liquidity has to date been affected in that the company has had to fund the
losses made.
Balance Sheet
Balance Sheet strength remains at acceptable levels with the Net Asset value of
R 85 127 450 equating to 11 c per share.
Share Capital has increased by the 14 634 147 shares that the company issued for
cash to fund working capital raising an amount of R 1 200 000, less JSE
transaction costs. This was in accordance with the general authority to issue
shares for cash given to the Directors at the AGM.
Prospects
As reported with the release of the interim results, Imuniti has implemented new
strategies. As can be seen from the second six month results these have started
to show results. Imuniti started to achieve the turn around as reported. We
focused on our core businesses, and we have unlocked value of our own range of
products and brands.
We operate in an area that the demand far exceeds the supply. The world is
facing a food crisis, and with adequate capital we will unlock further value for
our shareholders.
As a manufacturer, Imuniti`s strength and competitive advantage is that it owns
two factories wherein lies its net asset value. Imuniti has increased market
awareness of the group`s products. This will be backed by lower operating
expenses to ensure the sales translate into bottom line profits.
As reported before the following actions as implemented have shown and will
continue to show results:
Marketing
Imuniti has appointed Malusi Mngxathi as the Impilo Health Care, Nutritional
Foods and Imuniti Wellness Pack marketing executive, fulfilling a role formerly
lacking in the group. Malusi has extensive experience in marketing having
joinined the group from Enaleni Pharmaceuticals consumer division where he was
marketing manager of health care. Previously he worked for Tiger Brands where
his brand management portfolio included Ingram`s Camphor Cream, Panado and Citro
Soda. Malusi`s role will be to unlock brand value as Imuniti expands into the
retail market with its existing brands.
Imuniti Wellness Pack
As reported on the 6 December 2007, the initiative with the Africa Forum is
still on going.
Imuniti reported on the 13 December that the Medicine Control Council will be
conducting clinical trials on the Imuniti Wellness Pack. Due to circumstances
beyond our control there has been a delay on the conclusion of the trials. Full
payment for the conduct and completion of the trials has been made and that the
trial process is going. Further SENS announcements will be made in due course in
this regard.
The Imuniti Group consists of:
Imuniti Holdings Ltd
PB Tully Family Holdings (Pty) Ltd - 100 % held by Imuniti Holdings Ltd
Impilo Drugs (1966) (Pty) Ltd - 100 % owned by PB Tully Family Holdings (Pty)
Ltd
Impilo Marketing (Pty) Ltd - 100 % held by Imuniti Holdings Ltd
Nutritional Foods (Pty) Ltd - 100 % held by Imuniti Holdings Ltd
Imuniti Health Management Services (Pty) Ltd 100 % held by Imuniti Holdings Ltd
On behalf of the Board:
P. Fouche (CEO), J. Barnard (COO), J. Graham (CFO), H. Wessels (Secretary and
Legal Director), C. Matjila (Non-executive Chairman), B. Gxowa (Non-executive
Director), H. Slabbert (Non-executive Director)
28 May 2007
Registered Office:
Suite E101, Hampden Court
7 Hampden Road
Morningside, Durban
Transfer Secretaries:
Link Market Services (Pty) Ltd
11 Diagonal Street
Johannesburg
Designated Advisor:
Exchange Sponsors (Pty) Ltd
Date: 28/05/2008 14:20:28 Produced by the JSE SENS Department.
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