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IMU
IMU
IMU - Imuniti Holdings - Unaudited Interim Results Announcement For The Six
Months Ended 31 August 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" or "the group")
- Earnings per share up 46%
- Headline earnings per share up 46%
- Operating costs down 21%
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2008
CONSOLIDATED INCOME STATEMENTS
6 months 6 months year ended
ended ended
31-Aug 31-Aug 28-Feb
2008 2007 2008
Unaudited Reviewed Audited
R R R
Revenue 31,189,364 36,121,496 69,584,031
Gross profit 17,259,691 18,624,069 36,029,140
Gross profit % 55.3% 51.6% 51.8%
Other income 258,271 42,622 304,594
Impairment of customer 0 0 -7,673,310
contracts
Impairment of loan -81,282 0 -732,131
accounts
Write down of inventory -598,660 0 -2,901,854
Operating costs -19,919,361 - -
25,108,098 44,122,609
Loss before interest -3,081,341 -6,441,407 -
and taxation 19,096,170
Interest expense -691,615 -259,889 -932,782
Interest received 17,318 21,605 47,060
Loss before taxation -3,755,638 -6,679,691 -
19,981,892
Taxation 923,959 1,347,967 2,854,205
Net loss from -2,831,679 -5,331,724 -
continuing operations 17,127,687
Loss from discontinued -360,327 0 -6,383,590
operations
Loss attributable to -3,192,006 -5,331,724 -
ordinary shareholders 23,511,277
Reconciliation of
headline loss:
Loss attributable to -3,192,006 -5,331,724 -
ordinary shareholders 23,511,277
Adjusted for:
Impairments 0 0 12,483,090
Profit on sale of -38,536 -3,216 -10,746
property, plant and
equipment
Headline earnings -3,230,542 -5,334,940 -
attributable to 11,038,933
ordinary shareholders
Weighted average shares 843,126 752,946 753,556
in issue on which
earnings per share are
based (`000)
Shares in issue at 874,416 752,946 753,556
period end (`000)
Earnings per share -0.38 -0.71 -3.12
(cents)
Headline Earnings per -0.38 -0.71 -1.46
share
CONSOLIDATED BALANCE
SHEETS
31 August 31 August 28 February
2008 2007 2008
Unaudited Reviewed Audited
R R R
ASSETS
Non-current assets 77,955,551 86,258,176 77,473,089
Property, plant and 12,565,730 12,454,632 13,007,227
equipment
Intangible assets 35,694,216 47,445,169 35,694,216
Goodwill 25,414,407 24,507,374 25,414,407
Deferred taxation 4,281,198 1,851,001 3,357,239
Current assets 22,538,905 27,324,555 20,258,699
Inventories 8,465,160 11,068,902 7,268,418
Trade and other 12,197,115 15,128,340 12,470,151
receivables
Loans receivable 769,226 954,749 368,319
Cash and cash 1,107,404 172,564 151,811
equivalents
Total assets 100,494,456 113,582,731 97,731,788
EQUITY AND LIABILITIES
Capital and reserves 80,400,510 93,612,975 76,631,674
Share capital and 106,022,358 97,863,265 99,061,517
premium
Accumulated loss -25,871,588 -4,500,030 -22,679,583
Revaluation reserve 249,740 249,740 249,740
Non-current liabilities
Borrowings and other 2,395,679 736,238 2,240,725
payables
Current liabilities 17,698,267 19,233,518 18,859,388
Provisions 1,451,198 976,885 1,288,342
Acquisition liability - - -
Current portion of 873,511 751,421 733,852
borrowings
Trade and other 12,267,482 13,043,612 12,580,728
payables
Bank overdraft 3,106,076 4,461,600 4,256,467
Total equity and 100,494,456 113,582,731 97,731,788
liabilities
Shares in issue (`000) 843,126 752,946 753,556
Net asset value per 10 12 10
share (cents)
Net tangible asset 2 3 2
value per share (cents)
CONSOLIDATED STATEMENTS OF CHANGES IN
EQUITY
Share Share Total Share Revaluation Retained Total
capital premium Capital reserve Earnings equity
R R R R R R
Balance 75,295 97,790,601 97,865,896 249740 831,694 98,947,330
at 1
March
2007
Listing 0 -2,631 -2,631 0 0 -2,631
expenses
Net loss 0 0 0 0 -5,331,724 -5,331,724
for 6
months
Balance 75,295 97,787,970 97,863,265 249,740 -4,500,030 93,612,975
at 31
August
2007
Issue of 1,463 1,196,789 1,198,252 0 0 1,198,252
shares
Net loss 0 0 0 0 - -
for 6 18,179,553 18,179,553
months
Balance 76,758 98,984,759 99,061,517 249,740 - 76,631,674
at 1 22,679,583
March
2008
Issue of 10,684 6,950,158 6,960,842 0 0 6,960,842
shares
Net loss 0 0 0 0 -3,192,006 -3,192,006
for 6
months
Balance 87,442 105,934,917 106,022,359 249,740 - 80,400,510
at 31 25,871,589
August
2008
CONSOLIDATED CASH FLOW
STATEMENTS
6 months 6 months year ended
ended ended
31-Aug 31-Aug 28-Feb
2008 2007 2008
Unaudited Reviewed Audited
R R R
Cash flow from operating - - -4,831,511
activities 4,211,638 5,007,751
Cash outflow from operations - - -4,000,483
3,537,341 4,769,467
Interest received 17,318 21,605 47,060
Interest paid -691,615 -259,889 -932,782
Tax refund 0 0 54,694
Cash flows from investing -937,833 792,966 -1,881,433
activities
Property, plant and equipment - -132948 -1747000
acquired 633133.43
Proceeds on disposals of 96,208
property, plant and equipment
103,216 95,005
Increase in goodwill 0 0 -207,109
Loans (advanced)/repaid -400,908 822,698 -22,329
Cash flows from financing 7,255,455 -283,154 2,399,385
activities
Long term borrowings 294,613 -283,154 1,203,764
Proceeds on share issue 10,684 0 1,463
Increase in share premium 6,950,158 0 1,194,158
Change in cash and cash 2,105,984 - -4,313,559
equivalents 4,497,939
Cash and cash equivalents at - 208,903 208903
beginning of year 4,104,656
Cash and cash equivalents at - - -4,104,656
end of year 1,998,672 4,289,036
COMMENTARY
Nutritional Foods (Pty) Limited
The Board is satisfied with the results of Nutritional Foods as it continues to
be profitable and is cash positive. The directors are confident that this
company will continue to be successful and make significant contribution to the
Group.
Impilo Marketing
We are also pleased to announce that the marketing division of the Impilo Group
is also profitable and contributes positively to the Group.
Impilo Drugs
The area for concern to date has been Impilo Drugs, the manufacturing division
of the Impilo Group. Impilo Drugs is currently undergoing restructuring with the
objective of reducing operating expenses.
Its re-focus will be on selected products identified by management with a proven
track record of successful sales, at a pricing strategy that the market will
accept, as well as a lower overhead structure.
Impilo Brand
In addition the Impilo brand has now been re-vitalised and established in
selected market segments. The directors do expect that these activities will
have a major impact on the growth of the business and if required Impilo will be
outsourcing manufacturing to keep up with the demand of certain product lines.
PROSPECTS
The Board is mindful that the increased level of macro-economic uncertainty over
the last few months has created a challenging trading climate that will impact
on the company. The company however remains committed to focusing on its core
capabilities and will continue to improve its performance with a shift of focus
to the marketing, distribution and sales of specific products to selected target
markets.
The Nutritional Foods business can capture additional market share through
aggressive pricing, revised trading terms and conditions and growth incentives.
This can be achieved as Nutritional Foods is trading over breakeven point and
the factory is running below its design capacity.
The field work regarding the Medicine Research Council("MRC") trials on the
Imuniti Wellness Pack has been completed and we are currently awaiting the
official statistics and report from the MRC.
Management is currently investigating the introduction of a direct marketing
network that could have a significant positive impact on the Group. At present
38% of natural and complementary medicines in South Africa are being distributed
through direct marketing channels. Management will vigorously investigate this
avenue.
In addition Imuniti is investigating the export market, and the launch of a
"monthly food pack" which could address the current food shortages that South
Africa is faced with.
CHANGE TO THE BOARD
As previously reported Imuniti has recently appointed three non-executive
directors of whom one is Chairperson. The value that these directors have added
to the business, since their appointments, has been significant and the
disciplines that they have introduced will have a positive impact on the
business.
BASIS OF PREPARATION
The results have been prepared in terms of IAS 34 Interim Financial Reporting
and are in accordance with the group`s accounting policies which fully comply
with International Financial Reporting Standards (IFRS) and are consistent with
those applied in the previous year.
These interim results have not been audited or reviewed by our current auditors.
NATURE OF THE BUSINESS
The company`s primary business focus is to manufacture, market and sell
pharmaceutical products and complementary natural medicines as well as high-
protein fortified powdered nutritional food products and supplements.
FINANCIAL RESULTS
Financial Performance
In comparison to the reviewed results for the six months ended 31 August 2007,
turnover decreased by R 4 932 132(2007: increased by R 9 912 862). This was
primarily due to a loss of market share by Nutritional Foods in the mining
sector. Nutritional Foods has subsequently regained the market share lost, with
an aggressive pricing strategy as well as changed strategic intervention in
respect of a growth incentive, trading terms and rebate / discount terms.
Although turnover reduced, the gross margin increased by 3,7 percentage points
to 55,3 % (2007: 51,6 %).
Due to a conscious effort by management Imuniti successfully managed to reduce
operating costs from R 25 108 098 to R 19 919 361(21%).
Contributing to the net attributable loss of R 3 192 006 was stock a write-off
of R 598 660 and liquidation costs of R 360 327 arising from the liquidation of
Imuniti Health Management Services (Pty) Ltd. The liquidation of Imuniti Health
Management Services was reported on previously.
Financial Position
Net asset value increased by R 3 768 836 as compared with the net asset value as
at 28 February 2008. This is due to the raising of R 6 840 000 capital through
the issue of 100 000 000 shares which created stability in the trading
conditions of the company.
The Board deemed the intangible assets and goodwill to be fairly valued for this
reporting period. The values are as per the audited financial statements as at
28 February 2008. The company will obtain independent valuations for the current
financial year end.
DIVIDEND
No dividend was declared for the 6 month period.
WITHDRAWAL OF CAUTIONARY
Further to the cautionary announcement dated 16 October 2008, shareholders are
advised that Imuniti has discontinued the negotiations referred to which could
have had a material effect on the share price of Imuniti shares. Shareholders no
longer need to exercise caution when dealing in Imuniti shares.
CORPORATE INFORMATION
Non executive directors: M R Gahagan * (Chairperson), S Bean,
N Lamble,HAK Slabbert
Executive directors: P H Fouche (CEO), J J Barnard (COO), M A Mantel(CFO)
* British
Registration number: 2004/002282/06
Registered address: Suite E101 Hampden Court, 7 Hampden Road, Durban
Postal address: PO Box 201966, Durban North, 4016
Company secretary: M A Mantel
Telephone: (031) 312 4141
Facsimile: (031) 312 4595
Transfer secretaries: Link Market Services (Pty) Ltd
Designated Adviser: Grindrod Bank Ltd
24 November 2008
Date: 24/11/2008 15:20:39 Produced by the JSE SENS Department.
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