| Wed 13 Aug 2008, 9:00 | | MYD - Myriad Medical Holdings Limited - Reviewed preliminary condensed annual |
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MYD
MYD
MYD - Myriad Medical Holdings Limited - Reviewed preliminary condensed annual
financial statements for the year ended 31 May 2008
MYRIAD MEDICAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2006/006371/06)
Share code: MYD & ISIN: ZAE000085825
(Myriad or the Company)
REVIEWED PRELIMINARY CONDENSED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31
MAY 2008
- Headline earnings increased by 37% to R22.3 million
- Headline earnings per share increased by 26% to 11.7 cents per share
- Tangible net asset value per share increased by 33%
- Awarded four new leading international agencies
GROUP CONDENSED BALANCE SHEET AS AT
31 MAY
(R`000) Note 2008 2007
ASSETS
Non-current assets 84 671 73 470
Property, plant and equipment 3 286 3 437
Intangibles 1 81 298 70 033
Deferred tax asset 87 -
Current assets 93 457 68 901
Inventories 45 693 31 111
Trade and other receivables 39 712 28 357
Taxation receivable 6 408 -
Cash and cash equivalents 1 644 9 433
Total assets 178 128 142 371
EQUITY AND LIABILITIES
Capital and reserves 134 943 109 673
Share capital and premium 95 909 93 388
Accumulated profits 39 034 16 285
Non-current liabilities 1 702 1 109
Current liabilities 41 483 31 589
Accounts payable and provisions 33 157 25 173
Taxation payable 8 326 6 416
Total equity and liabilities 178 128 142 371
Net asset value per share (cents) 70.3 58.2
Net tangible asset value per share 28.0 21.0
(cents)
Closing number of shares 191 917 767 188 356 543
GROUP CONDENSED INCOME STATEMENT FOR THE YEAR ENDED 31 MAY
(R`000) 2008 2007
Gross revenue 228 250 131 517
Turnover 227 153 130 687
Cost of sales (119 899) (68 952)
Gross profit 107 254 61 735
Operating costs (77 424) (40 757)
Expense recognised in respect of (578) -
share-based payments
Loss attributable to goodwill (184) -
impairment
Foreign exchange gains 2 1 525 1 132
Profit on sale of property, plant and 47 5
equipment
Operating profit 30 640 22 115
Interest received 1 025 830
Interest paid (624) -
Profit before taxation 31 041 22 945
Taxation (8 870) (6 660)
Profit for the period 22 171 16 285
Headline earnings per share (cents) 3 11.7 9.3
Earnings per share (cents) 11.6 9.3
Diluted headline earnings per share 3 11.2 9.2
(cents)
Diluted earnings per share (cents) 11.1 9.2
Weighted average number of shares 191 333 060 175 237 112
Diluted weighted average number of 199 705 285 177 912 737
shares
GROUP CONDENSED STATEMENT OF CHANGES
IN EQUITY
2008
(R`000) Share capital Accumulated Total
and premium Profits
Balance at the beginning of 93 388 16 285 109 673
the period
Issue of shares 3 083 - 3 083
Share buy back (562) - (562)
Profit for the period - 22 171 22 171
Share-based payment reserve - 578 578
adjustment
Balance at the end of the 95 909 39 034 134 943
period
2007
(R`000) Share capital Accumulated Total
and premium Profits
Balance at the beginning of 67 - 67
the period
Issue of shares 99 504 - 99 504
Share issue expenses (6 183) - (6 183)
Profit for the period - 16 285 16 285
Balance at the end of the 93 388 16 285 109 673
period
GROUP CONDENSED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MAY
(R`000) 2008 2007
Cash flow from operations 31 041 22 945
Cash flow from operating activities 1 936 10 597
Cash flows from investing activities (12 734) (95 910)
Cash flows from financing activities 3 009 94 679
(Decrease)/ increase in cash and cash (7 789) 9 366
equivalents
Cash and cash equivalents at 9 433 67
beginning of period
Cash and cash equivalents at end of 1 644 9 433
period
COMMENTARY
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 has
long standing and established relationships with its customers. Myriad`s
strategy is to consolidate and rationalise the South African medical device
sector. The Group which has in excess of 30% black shareholding, currently
consists of seven business units with the rights to 30 international premier
agencies. Although some of the multinational companies in South Africa compete
with Myriad at product level, Myriad provides the widest range of medical
devices in the country through dedicated units of highly skilled personnel with
its world class brands.
Myriad has two wholly-owned subsidiaries, Myriad Medical (Proprietary) Limited
(MMPL) and Filterworks (Proprietary) Limited (Filterworks). Besides the Pall
Medical Filters 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.
Myriad does not only supply products and offer national technical support, but
also provides a broad range of generic medical training to a large number of
healthcare professionals through it`s in-house training academy resulting in a
comprehensive solution to its customers` needs.
OPERATIONAL REVIEW
In line with the Group`s strategy of expanding its product offering to its
customers Myriad has over the past year added four new international agencies to
its existing stable of products. Uroplasty which previously had been marketed in
South Africa by a well known supplier has been well received under the Myriad
umbrella and has become a profit contributor from day one. Caldera and
Thermablate Eas, both women`s health products, were also previously marketed in
South Africa by other distributors and are being aggressively promoted and will
contribute to profitability in the year ahead. The anaesthetic machines
manufactured by Heinen and Lowenstein have been successfully trialled in a
number of hospitals. Concurrent with these developments and in order to further
strengthen the sales and marketing teams Myriad has employed additional senior
and clinical sales personnel.
For the 12 months to 31 May 2008, the group increased headline earnings by 37%
to R22.3 million (2007: R16.3 million). Based on the weighted average number of
shares of 191 333 060, the resultant headline earnings per share is 11.7 cents
per share which is an increase of 26% over 2007 (9.3 cents per share) and is in
line with the company`s expectations.
Trading for the past year was strong with the Group`s divisions meeting or
exceeding their respective forecasts. This strong performance was achieved
despite the public sector hospital strike in June 2007 as a result of which
sales to the public sector were significantly compromised and in addition, costs
incurred in 2008 in respect of tender and training departments and head office
infrastructure was only operational for part of the 2007 financial year. ICU
Medical experienced continuing growth in both the public and private sectors
with particular success in its needle free short line products. In addition, ICU
Medical once again extended its contracts with two of the major hospital groups.
Manta Medical has expanded its existing business by adding additional government
tenders to its portfolio. Manta Medical`s wound care products continue to make
significant inroads into the market and sales are showing a steady increase.
Utilising its existing sales, marketing and logistical resources Manta Medical
has added the Uroplasty agency to its portfolio. Earth Medical won a two year
public sector national tender on their specialist surgical instrument cleaning
and reprocessing products. Earth Medical has also established an active presence
in the discipline of women`s health through its Caldera Medical product range
and its recently introduced Canadian technology, Thermablate Eas which is
dedicated to endometrial ablation. The Myriad Business Unit was awarded a
national government contract to supply transport ventilators and has been making
steady progress in the sale of capital equipment to the private and public
hospitals. The technical arm of the Myriad Capex and Technical division has been
strengthened with new maintenance contracts which have been concluded both for
products supplied by Myriad as well as on behalf of third parties.
UTILISATION OF CASH RESOURCES
Myriad utilised its cash generated during the year predominantly in the
following areas:
- R8.4 million to settle the remaining purchase consideration for the
acquisition of Filterworks;
- R2.8 million to fund Filterworks initial inventory;
- R6.5 million for inventory for new agencies and product range expansion;
and
- R12.8 million for the payment of provisional tax payments in respect of the
2007 and 2008 financial years.
Myriad currently has minimal on-balance sheet debt. The group will look to
utilise a component of debt to fund further acquisitions.
PROSPECTS
Myriad continues to explore appropriate acquisition and new international agency
opportunities as well as acceleration of generic growth by increasing its
business with the public and private sectors. In addition, Myriad will continue
to look for opportunities and develop its business north of the South African
border.
ACCOUNTING POLICIES
The preliminary condensed group financial results are prepared in accordance
with IFRS, including IAS 34 - Interim Financial Reporting, the requirements of
the South African Companies Act, Act 61 of 1973, and the Listing Requirements of
the JSE Limited. The financial results presented above have been reviewed but
not audited by Mazars Moores Rowland the Group`s auditors. Their review report
is available for inspection at the Myriad`s registered office during normal
office hours. The preliminary condensed 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 and certain fair value
applications as required by IAS 39 - Financial Instruments: Measurement. The
accounting policies and methods of computation are consistent with those of the
prior year.
DIVIDEND
No dividend has been recommended or declared during the period.
NOTES TO THE FINANCIAL STATEMENTS
1. PURCHASE CONSIDERATION PAID TO THE SHAREHOLDERS OF FILTERWORKS
(PROPRIETARY) LIMITED
In terms of the sale and purchase agreement between the shareholders of
Filterworks and Myriad, Myriad was required to make an additional payment
of R8.4 million in cash and issue 3.1 million shares at 98 cents per share
to the shareholders of Filterworks as Filterworks achieved and exceeded its
warranted profit after tax of R4 million for the 12 months ended 31 March
2008.
2. FOREIGN EXCHANGE CONTRACTS
The foreign exchange gain in the main represents the gain on revaluation of
foreign exchange contracts at year end. This is in line with the Group`s
policy of taking out forward cover contracts linked to the timing of the
anticipated payments for inventories.
3. RECONCILIATION OF HEADLINE EARNINGS
(R `000) 2008 2007
Earnings attributable to ordinary 22 171 16 285
shareholders
After tax effect of profit on disposal (33) (5)
of property, plant and equipment
Loss attributable to goodwill 184 -
revaluation
Headline earnings 22 322 16 280
4. SEGMENT INFORMATION
Segment Single-use Capital Technical Total
devices equipment services
and head
office
(R`000)
2008
Turnover 203 899 16 278 6 976 227 153
Segment 30 176 283 181 30 640
profit
Total 164 640 9 361 4 127 178 128
assets
2007
Turnover 119 147 10 318 1 222 130 687
Segment 20 555 1 008 552 22 115
profit
Total 135 684 2 675 4 012 142 371
assets
For and on behalf of the board
Dr PM Mandela, Chairperson
Johannesburg
13 August 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 (Proprietary) Ltd
Registered Office
Manta Place
Turnberry Office Park
48 Grosvenor Rd
Bryanston
Sandton
Date: 13/08/2008 09:00:01 Produced by the JSE SENS Department.
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