| Mon 29 Sep 2008, 17:15 | | BCH - Best Cut - Condensed Audited Consolidated Results For The Year |
|
BCH
BCH
BCH - Best Cut - Condensed Audited Consolidated Results For The Year
Ended 30 June 2008
Best Cut Limited
(formerly Integrear Limited),
(Incorporated in the Republic of South Africa)
(Registration number: 1989/001319/06
JSE Code: BCH ISIN: ZAE000105391
("Best Cut" or "the company")
CONDENSED AUDITED CONSOLIDATED RESULTS FOR THE YEAR ENDED 30 JUNE 2008
Consolidated Income Statement
Audited Audited
June 2008 June 2007
R R
Revenue 96 827 869 -
Cost of sales (60 491 942) -
Gross profit 36 335 927 -
Operating expenses (30 047 953) (939 936)
Other income 182 444 39 563
Profit/(loss) from operations before
net finance costs 6 470 418 (900 373)
Finance costs (1 379 381) (73 248)
Finance income 44 345 57 004
Net profit/(loss) before tax 5 135 382 (916 617)
Taxation (1 606 864) -
Net profit/(loss) after tax 3 528 518 (916 617)
Earnings per share (cents) 2,99 (1,02)
Headline earnings per share (cents) 2,99 (1,06)
Weighted average number of
shares in issue 118 017 494 90 000 000
Reconciliation of earnings and
headline earnings
Earnings 3 528 518 (916 617)
Profit on disposal of PPE - (39 563)
Headline earnings 3 528 518 (956 180)
Consolidated balance sheet
Audited Audited
June 2008 June 2007
R R
ASSETS
Non-current assets 41 527 466 -
Property, plant and equipment 37 885 066 -
Intangible assets 3 642 400 -
Current assets 29 507 843 673 755
Trade and other receivables 14 755 541 244 235
Loans 8 333 929 -
Inventories 4 918 966 -
Cash and cash equivalents 1 499 407 429 520
TOTAL ASSETS 71 035 309 673 755
EQUITY AND LIABILITIES
Share capital and reserves 25 747 990 (691 076)
Share capital 177 793 125 642
Share premium 27 593 927 4 735 530
Non-distributable reserves 828 000 828 000
Capital redemption reserve fund 48 558 48 557
Accumulated loss (2 900 288) (6 428 805)
Non-current liabilities 22 677 966 1 072 917
Long-term borrowings: 21 174 419 1 072 917
Deferred taxation liabilities 1 503 547 -
Current liabilities 22 609 353 291 914
Trade payables and accruals 12 893 280 279 924
Short-term borrowings 7 786 561 -
Provisions 561 994 -
Current tax liability 103 317 -
Bank overdraft 1 264 201 11 990
TOTAL EQUITY AND LIABILITIES 71 035 309 673 755
Net asset value per share (cents) 20,2 (0,8)
Net tangible asset value per share (cents) 17,4 (0,8)
Number of shares in issue 127 356 658 90 000 000
Consolidated cash flow statement
Audited Audited
June 2008 June 2007
R R
Cash generated/(utilised) from operating
activities 7 984 738 (781 268)
Cash receipts from customers 95 993 844 -
Cash paid to suppliers and employees (89 174 070) (765 024)
Cash generated/(utilised) from operations 6 819 774 (765 024)
Finance costs (1 379 381) (73 248)
Finance income 44 345 57 004
Cash flows from investing activities (28 430 615) -
Purchases of equipment - expanding
operations (5 288 214) -
Intangible assets (3 642 401) -
Acquisition of subsidiaries (19 500 000) -
Cash flows from financing activities 22 763 553 (2 450 000)
Issue of shares 10 184 198 -
Listing costs (6 974 779) -
Increase in loans (8 333 929) -
Repayment of share premium - (3 450 000)
Increase in borrowings 27 888 063 1 000 000
Net decrease in cash and cash equivalents (182 324) (3 231 268)
Cash and cash equivalents at beginning of
the year 417 530 3 648 798
Cash and cash equivalents at end of the year 235 206 417 530
Consolidated Statement of changes in equity
Non-
distri-
Share Share butable
capital premium reserve
R R R
Balance at 1 July 2006 125 642 685 530 828 000
Net loss for the period
Repayment of capital (3 450 000)
Investment written off 7 500 000
Balance at 30 June 2007 125 642 4 735 530 828 000
Shares issued 52 151 29 833 176
Listing costs (6 974 779)
Net profit for the period
Balance as at 30 June 2008 177 793 27 593 927 828 000
Accumu-
Capital lated
redemption (loss)/
fund profits Total
R R R
Balance at 1 July 2006 48 558 2 014 553 3 702 283
Net loss for the period (916 617) (916 617)
Repayment of capital (3 450 000)
Investment written off (7 526 741) (26 741)
Balance at 30 June 2007 48 558 (6 428 805) (691 075)
Shares issued 29 885 327
Listing costs (6 974 779)
Net profit for the period 3 528 518 3 528 518
Balance as at 30 June 2008 48 558 (2 900 287) 25 747 990
Commentary on results
NATURE OF BUSINESS
Best Cut operations are located in Richards Bay and Empangeni in KwaZulu-Natal.
The operations comprise an abattior operation, biltong factory, meat processing
and wholesale operation as well as retail outlets. The processed products are
distributed in KwaZulu-Natal, Mpumalanga and Gauteng. The Group is focused on
establishing a national footprint in South Africa, and have established a
distribution warehouse in Olifantsfontein (Gauteng). The Group now supplies 66
Checkers stores and 20 Spar stores in Gauteng.
FINANCIAL REVIEW
The results as presented consolidate the operations of the Best Cut Group for a
9 month period, from 1 October 2007 to 30 June 2008.
Earnings per share and headline earnings per share were 72% below the forecast
in the revised listings particulars and 69% below the revised forecast included
in an announcement dated 11 January 2008. This decrease in earnings and headline
earnings can be attributed to a significant increase in costs of raw materials,
which the Group was unable to pass on to customers due to market resistance to
price increases and the fact that the Group`s planned geographic expansion was
met by lower volumes than expected.
Factors specifically impacting the Group`s performance are:
- Production in the abattoir came on-line later than anticipated. The abattoir
was forecast to make a reasonable contribution to the Group`s profits which did
not materialise.
- The economic downturn had a negative effect on sales volumes.
- The proposed expansion into Gauteng and Mpumalanga, although underway, is
progressing slower than planned due to market trading conditions which resulted
in lower volumes than expected and price resistance.
The Group is confident that the market will improve and is focused on
establishing a national footprint from which it will be able to increase brand
awareness and expand sales volumes thereby increasing its market share. Specific
focus is being placed on expanding through acquisition in the Eastern and
Western Cape. In the current financial year, management will also be focussing
on improving operational efficiencies in all Group operations. Included in long-
term borrowings of R21 174 419 are shareholder`s loans amounting to R11 182 620.
The shareholder has agreed not to claim payment in the next 12 months.
SEGMENTAL ANALYSIS
The primary segment is defined as those business units providing products that
are subject to risks and returns that are different from those in other business
segments. The segments identified are meat processing and retail. The secondary
segment is the geographical segment, which at this point, is still predominantly
focussed in KwaZulu-Natal.
Meat
processing Retail Other Total
Revenue
- External 74 674 506 22 153 363 - 96 827 869
- Inter segment 21 638 140 9 894 344 - 31 532 485
- Eliminated (21 638 140) (9 894 344) - (31 532 485)
74 674 506 22 153 363 - 96 827 869
Operating profit 4 269 632 2 018 342 - 6 287 974
Operating assets 51 336 485 8 708 515 10 990 310 71 035 309
BASIS OF PREPARATION
The condensed financial statements have been prepared in accordance with the
recognition and measurement criteria of International Financial Reporting
Standards ("IFRS") and the presentation disclosure requirements of IAS 34 -
Interim Financial reporting, the JSE Listings Requirements and the South African
Companies Act.
The accounting policies applied in these condensed consolidated financial
statements are in terms of IFRS and consistent with those applied in the
circular to shareholders issued on 4 October 2007 and the revised listing
particulars.
The condensed consolidated financial statements were approved by the board of
directors on 26 September 2008.
AUDIT OPINION
The condensed consolidated financial statements have been audited by Van Dyk &
Associates. The unqualified audit report is available for inspection at the
company`s registered office.
CORPORATE GOVERNANCE
The Group subscribes to the principles of, and implements where possible, the
recommendations of the King II Code on Corporate Governance.
DIVIDENDS
No dividend has been been declared.
BUSINESS COMBINATIONS
On 1 October 2007, 100% of the businesses of the Best Cut Group were acquired
and reverse listed into the Integrear Limited cash shell. Details of the net
assets acquired are as follows;
Property, plant and equipment 34 192 950
Inventories 4 320 926
Trade and other receivables 13 494 836
Trade payables and accruals (12 807 586)
39 201 126
Purchase consideration 39 201 126
Cash 19 500 000
Shares issued 19 701 126
The results of the Group as presented are entirely attributable to the
acquisition for the period 1 October 2007 to 30 June 2008. The vendor was issued
24 626 408 shares in Best Cut at a price of 80 cents per share.
CONTINGENCIES AND COMMITMENTS
There are no significant contingencies or commitments.
SUBSEQUENT EVENTS
There were no significant events after the balance sheet date.
STATEMENT ON GOING CONCERN
The financial statements have been prepared on the going-concern basis since the
directors have every reason to believe that the company has adequate resources
in place to continue in operation for the foreseeable future.
For and on behalf of the Board
M Tshishonga
Chairperson
29 September 2008
CORPORATE INFORMATION
Non executive directors: M Tshishonga (Chairperson), NF Serfontein
Executive directors: TJ Hill (Chief Executive Officer),
R Donald (Financial Director)
Registered address: 24A 18th Street, Menlo Park 0081
Postal address: PO Box 397, Menlyn, 0063
Company secretary: Morestat Corporate Services (Pty) Limited
Transfer secretaries: Computershare Investor Services (Pty)
Limited
Auditors: Van Dyk & Associates
Sponsor: Vunani Corporate Finance
www.bestcut.co.za
Date: 29/09/2008 17:15:42 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.
