| Wed 1 Oct 2008, 16:47 | | ALJ - All Joy - Reviewed Results For The 12 Months Ended 30 June 2008 |
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ALJ
ALJ
ALJ - All Joy - Reviewed Results For The 12 Months Ended 30 June 2008
ALL JOY FOODS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1989/001000/06)
Share code: ALJ
ISIN code: ZAE000017240
("All Joy" or "the Group")
REVIEWED RESULTS FOR THE 12 MONTHS ENDED 30 JUNE 2008
Consolidated balance Reviewed Year Audited Year
sheet ended 30 June ended 30 June
2008 2007
ASSETS
Non- current assets 13,976,032 15,206,771
Property, plant and 12,791,419 13,001,522
equipment
Intangible assets 1,184,613 1,179,388
Deferred taxation - 1,025,866
Current Assets 19,801,333 22,098,221
Inventory 9,398,565 8,942,403
Trade and other 8,627,905 11,916,954
receivables
Cash resources 1,774,863 1,238,864
Total Assets 33,777,365 37,304,992
EQUITY AND LIABILITIES
Capital and reserves 5,184,631 15,507,019
Share capital 419,734 419,734
Share premium 6,423,844 6,509,767
Reserves 4,169,678 4,169,678
Accumulated profit / -5,828,625 4,407,840
(loss)
Non-current liabilities 66,882 246,962
Interest-bearing - -
liabilities
Finance lease obligation 66,882 246,962
Current liabilities 28,525,852 21,551,011
Trade and other payables 10,290,406 7,599,378
Interest-bearing 15,837,444 474,654
liabilities
Taxation payable 1,663,986 1,432,917
Bank overdraft 87 921 11,889,935
Provisions 646,095 154,127
Total equity and 33,777,365 37,304,992
liabilities
Net asset value per 12.35 36.95
share (cents)
Tangible net asset value 9.53 34.14
per share (cents)
Shares in issue at year 41,973,333 41,973,333
end
Consolidated income Reviewed Year Audited Year
statement ended 30 June ended 30 June
2008 2007
Revenue 55,112,169 51,919,474
Earnings before interest, -5,957,900 1,673,964
taxation, depreciation and
amortisation ("EBITDA")
Depreciation -1,189,247 -988,487
Amortisation - -
Investment income 17,763 9,775
Finance cost -1,850,149 -1,219,765
Loss before tax -8,979,533 -524,513
Taxation -1,256,935 -518,085
Loss for the year -10,236,468 -1,042,598
Attributable to:
Equity holders of the -10,236,468 -1,042,598
company
Minority interest - -
Headline loss calculation:
Loss attributable to equity -10,236,468 -1,042,598
holders of the company
Adjusted for:
Profit on sale of property, - -19,577
plant and equipment
Impairment of assets -
Headline earnings/(loss) -10,236,468 -1,062,175
Number of shares
- Weighted average shares in 41,973,333 41,973,333
issue
- Diluted weighted average 41,973,333 41,973,333
shares in issue
Headline loss per share
(cents)
- Basic (24.4) (2.5)
- Diluted (24.4) (2.5)
Loss per share (cents)
- Basic (24.4) (2.5)
- Diluted (24.4) (2.5)
Consolidated statement Reviewed Year Audited Year
of changes in equity ended 30 June ended 30 June
2008 2007
Capital and reserves 15,507,022 16,163,525
Shares issued - 419,734
Share issue expenses -85,923 -33,642
Net profit / (loss) for -10,236,468 -1,042,598
period
Capital and reserves 5,184,631 15,507,019
Consolidated cash flow Reviewed Year Audited Year
statement ended 30 June ended 30 June
2008 2007
Net cash flow (used -1,722,867 2,316,273
in)/generated from
operations
Net cash flow used in -985,123 -3,248,134
investing activities
Net cash flow used in 15,046,033 -555,233
financing activities
Net increase / 12,338,013 -1,487,094
(decrease) in cash
resources
Cash resources at the -10,651,071 -9,163,977
beginning of year
Cash resources at end of 1,686,942 -10,651,071
year
COMMENTARY
The board presents the results for the 12 months ended 30 June 2008.
Basis of preparation and accounting policies
The abridged reviewed financial results have been prepared in accordance with
IAS 34: Interim Financial Reporting and using accounting policies in compliance
with International Financial Reporting Standards, the Companies Act of South
Africa and the disclosure requirements of the Listing Requirements of the JSE
Limited.
The auditor, PKF (Pta) Inc., has issued its unmodified review opinion on the
group`s financial statements for the year ended 30 June 2008. Copies of the
review report on the summarised financial statements are available for
inspection at the registered office of the group.
All Joy has adopted all the statements and interpretations issued and effective
during the current period by the International Accounting Standards Board
("IASB"). The accounting policies adopted are consistent with those applied in
the previous financial year, except for the following changes which did not have
any significant impact on the financial results:
- Adoption of IFRS 7: Financial Instruments: Disclosure;
- Circular 8/07: Headline Earnings per Share
Results
The loss and headline loss for the period of R10 236 468 showed a large decline
from the prior year of R1 042 598, despite an increase in turnover of 6.1%, due
largely to a number of once off factors.
- A new packing operation for the production of sachet and dry goods has been
put into place with once off costs of approximately R1.5 million being
incurred, against little revenue generation. This plant is now in
production, products have been listed with customers and sales have
commenced subsequent to year end.
- The year saw two changes of distributors, with an interim move on short
notice resulting in increased distribution costs of up to R1.4 million
above normal due to a different pricing approach and a provision for
unresolved invoicing issues and credit notes of approximately R1.5 million.
The company has since moved to a new distributor and these costs and
processes and now under control.
- Bad debt write off`s and provision for rebates and settlement discounts
amounted to R1.1 million at year end.
- The gross profit and gross margin of the business has been largely
influenced by substantial increases in cost of products, in particular that
of packaging and tomato paste. In addition, wages increased by
approximately 27% over the prior year in order to bring All Joy`s factory
staff wages in line with industry norms. It has taken time to pass these
increases on to customers resulting in a reduction in gross profit by an
estimated R2.5 million.
- Provision for leave pay increased by approximately R500 000 over the prior
year.
- Finance costs were 51.6% higher due to the higher levels of borrowings over
the period.
- Due to the losses, the deferred taxation asset of R1 025 886 has been
reversed, resulting in a taxation charge in the income statement.
Subsequent to year end, the company has raised R15 million by way of a rights
offer, there has been a change in control of both the company and the board of
directors and the company is in the process of implementing a turnaround
strategy. Shareholders are referred to future prospects below.
Segmental Analysis
No segmental analysis has been presented as the company operates in one
segmental, within South Africa.
Dividends
No dividends were declared during the period. (2007: Nil)
Board of Directors
During the year and to the date of this announcement, the board of directors has
changed as follows:
Name and designation Date appointed Date resigned
P Mariemuthu (Executive 25 August 2008
Chairman)
MT Pather (Chief Executive
Officer
M Hill (Financial director) 16 September 2008
A Gonsalves (Executive 25 August 2008
director)
MD Mawere (Non-executive) 25 August 2008
R Manning (Non-executive) 25 August 2008
MJ Janse van Rensburg (Non- 25 August 2008
executive)
S Fanaroff (Non-executive) 25 August 2008
W Parsons (Non-executive) 25 August 2008
JW Walters (Financial 25 August 2008
Director)
Change in company secretary and designated advisor
The company secretary has changed to Africa Heritage Management Services
(Proprietary) Limited with effect from 25 August 2008 and 05 September 2008
respectively.
Subsequent events and future prospects
After the balance sheet date, the company has raised R15 million by way of a
rights issue, which was underwritten by Africa Heritage Investments (Pty) Ltd
("Africa Heritage"), which has become the controlling shareholder of All Joy.
This has resulted in a substantial strengthening of the balance sheet, lower
gearing of the company and lower finance costs.
A plan to initiate and implement corrective action within All Joy has been put
into place over the past few months. This involves the introduction of Africa
Heritage as a strategic investor, the appointment of a substantially new board
of directors, the recent appointment of Mel Hill as the Financial Director and
Tony Gonsalves as Operations Director. A thorough investigation and overhaul of
systems and controls has been actioned as well as policies and procedures. A
focus on maintaining costs until performance is satisfactory will be initiated,
with profits expected after the 31 December 2008 interim results.
A substantial base price increase has been implemented to all customers
effective from Aug/Sep 2008. Production has been ongoing since July 2008 on the
new "Single serving" packing operation, which products sell at higher percentage
margins due to the nature of the products and pack size. New sales from supply
chain agreements of finished product and certain raw materials entered into with
Hatnoon Milling and Bakeden, effective 1 October 2008, will contribute to the
recovery.
Reduced distribution costs are expected with the change in distributor and
implementation of the new strategy of low volume - high cost. This will be
boosted by below the line marketing and promotion to support the higher prices
to be achieved. New sales channel "Food service distributors" that supply
restaurants, fast food outlets, delis and caterers.
30 September 2008
Johannesburg
Directors:
Executive Directors: P Mariemuthu; MT Pather; M Hill; A Gonsalves.
Non-Executive Directors: MD Mawere; R Manning; MJ Janse van Rensburg
Registered address
103 Booysens Reserve Road, Crown Mines, 2001
Company Secretary Transfer secretaries
Africa Heritage Management Computershare Investor
Services (Pty) Ltd Services (Pty) Ltd
Designated Advisors
Auditors Arcay Moela Sponsors
PKF Chartered Accountants (Proprietary) Limited
(SA)
1 October 2008
Date: 01/10/2008 16:47:37 Produced by the JSE SENS Department.
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