| Tue 17 Feb 2009, 8:30 | | MYD - Myriad Medical Holdings - Reviewed Condensed Interim Financial Statements |
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MYD
MYD
MYD - Myriad Medical Holdings - Reviewed Condensed Interim Financial Statements
For The 6 Months Ended 30 November 2008
MYRIAD MEDICAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2006/006371/06)
JSE code: MYD & ISIN: ZAE000085825
(Myriad or the Group)
REVIEWED CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE 6 MONTHS ENDED 30
NOVEMBER 2008
- Operating profit up 18%
- Earnings per share up 16%
- Cash from operations up 18%
- Net tangible asset value per share up 21% from 31 May 2008
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 30 NOVEMBER 2008
(R`000) Reviewed Reviewed Audited
30 30 31
November November May
2008 2007 2008
ASSETS
Non-current assets 84,777 76,975 84,671
Property, plant and equipment 3,359 3,733 3,286
Intangibles 81,298 73,242 81,298
Deferred taxation asset 120 - 87
Current assets 102,500 74,079 93,457
Accounts receivable and inventory 101,428 71,979 85,405
Taxation - 66 6,408
Cash and cash equivalents 1,072 2,034 1,644
Total assets 187,277 151,054 178,128
EQUITY AND LIABILITIES
Total equity 145,669 123,620 134,943
Share capital and premium 94,240 93,388 95,909
Contingently issueable shares - 3,000 -
Accumulated profits 51,429 27,232 39,034
Non-current liabilities 2,076 1,796 1,702
Instalment sale liabilities 618 723 828
Deferred taxation 1,458 1,073 874
Current liabilities 39,532 25,638 41,483
Accounts payable and provisions 36,365 25,638 33,157
Taxation 3,167 - 8,326
Total equity and liabilities 187,277 151,054 178,128
Net asset value per share (cents) 77.1 65.6 70.6
Net tangible asset value per share 34.0 26.7 28.1
(cents)
188 675 164 188,356,543 191,047,869
Closing number of shares
CONDENSED CONSOLIDATED INCOME
STATEMENT
FOR THE 6 MONTHS ENDED 30 NOVEMBER
2008
(R`000) Reviewed Reviewed Audited
30 30 31
November November May
2008 2007 2008
Revenue 133,880 108,191 228,250
Turnover 132,454 107,932 227,153
Cost of sales (76,036) (57,782) (119,899)
Gross profit 56,418 50,150 107,254
Net operating costs (39,206) (35,504) (76,614)
Operating profit 17,212 14,646 30,640
Interest received 801 480 1,025
Interest paid (965) (175) (624)
Profit before taxation 17,048 14,951 31,041
Taxation (4,783) (4,471) (8,870)
Profit for the period 12,265 10,480 22,171
Earnings per share (cents) 6.5 5.6 11.6
Diluted earnings per share (cents) 6.2 5.4 11.1
Weighted average number of shares 190,106,568 188,356,543 191,333,060
Diluted weighted average number of 198,055,292 195,198,155 199,705,285
shares
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY FOR THE 6 MONTHS ENDED
30 NOVEMBER 2008
(R`000) Share Contingent Accumulate Total
capital ly d profits
and issueable
premium shares
Balance at 31 May 2007 93,388 - 16,283 109,671
Contingently issueable shares - 3,000 - 3,000
Profit for the period - - 10,480 10,480
Share based payment reserve - - 469 469
adjustment
Balance at 30 November 2007 93,388 3,000 27,232 123,620
Issue of shares 3,083 (3,000) - 83
Share buy-back (Treasury (562) - - (562)
shares)
Profit for the period - - 11,691 11,691
Share based payment reserve - - 111 111
adjustment
Balance at 31 May 2008 95,909 - 39,034 134,943
Share buy-back (Treasury (1,669) - - (1,669)
shares)
Profit for the period - - 12,265 12,265
Share based payment reserve - - 130 130
adjustment
Balance at 30 November 2008 94,240 - 51,429 145,669
CONDENSED CONSOLIDATED CASH FLOW
STATEMENT FOR THE 6 MONTHS ENDED 30
NOVEMBER 2008
(R`000) Reviewed Reviewed Audited
30 30 31 May
November November 2008
2008 2007
Cash flow from operations 17,199 14,582 32,519
Cash inflow/(outflow) from operating 2,120 (6,185) 2,615
activities
Cash outflow from investing activities (2,482) (1,073) (9,445)
Cash outflow from financing activities (210) (141) (959)
Decrease in cash and cash equivalents (572) (7,399) (7,789)
Cash and cash equivalents at beginning 1,644 9,433 9,433
of period
Cash and cash equivalents at end of 1,072 2,034 1,644
period
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
The condensed consolidated interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting and in compliance with the
South African Companies Act, 1973 and the Listing Requirements of JSE limited.
The condensed consolidated interim financial statements are prepared on the
historical cost basis, with the exception of certain financial instruments which
are measured at fair value. The results of the interim period are not
necessarily indicative of the results for the entire year, and these reviewed
financial statements should be read in conjunction with the audited financial
statements for the year ended 31 May 2008. The financial results presented above
have been reviewed but not audited by Mazars Moores Rowland, the Group`s
auditors. Their limited review report is available for inspection at Myriad`s
registered office during normal office hours.
The preparation of condensed consolidated interim financial statements requires
the use of estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date
of the condensed consolidated interim financial statements and the reported
amounts of revenue and expenses during the reporting periods. Although these
estimates are based on management`s best knowledge of current events and actions
that the Group may undertake in the future, actual results may differ from those
estimates.
The accounting policies and methods of computation are consistent with those
applied in the financial statements for the year ended 31 May 2008.
2. SUBSEQUENT EVENTS
No events material to the understanding of the report have occurred in the
period between the period end and the date of this report, other than the
acquisition of two international agencies which have been discussed in this
report under "PROSPECTS".
3. RELATED PARTY TRANSACTIONS
There were no trading transactions between related parties during the reporting
period.
4. ACQUISITIONS AND DISPOSALS OF PROPERTY, PLANT AND EQUIPMENT
During the period under review, the group purchased fixed assets to the value of
R812,634, with no material disposals of equipment or other assets.
5. RECONCILIATION OF HEADLINE EARNINGS
Reviewed Reviewed Audited
30 November 30 31 May
2008 November 2008
2007
Headline earnings per share (cents) 6.5 5.6 11.7
Diluted headline earnings per share 6.2 5.4 11.2
(cents)
(R`000)
Earnings for the period 12,265 10,480 22,171
Loss/(profit) on disposal of property, 2 (3) (34)
plant and equipment
Goodwill write-off - - 184
Headline earnings 12,267 10,477 22,321
6. SEGMENT INFORMATION
Segment Single-use Medical Technical Group
medical capital services
devices equipment
(R`000)
Reviewed 30 November
2008
Turnover 118,300 9,908 4,246 132,454
Operating profit 16,360 540 312 17,212
Interest received 801
Interest paid (965)
Profit before 17,048
taxation
Taxation expense (4,783)
Profit for the 12,265
period
Reviewed 30 November
2007
Turnover 99,174 5,255 3,503 107,932
Operating profit 14,654 (117) 109 14,646
Interest received 480
Interest paid (175)
Profit before 14,951
taxation
Taxation expense (4,471)
Profit for the 10,480
period
Audited 31 May 2008
Turnover 203,899 16,278 6,976 227,153
Operating profit 30,176 283 181 30,640
Interest received 1,025
Interest paid (624)
Profit before 31,041
taxation
Taxation expense (8,870)
Profit for the 22,171
period
COMMENTARY
1. NATURE OF BUSINESS
The Myriad Group is South Africa`s only listed exclusive supplier of medical
devices, single use consumables and medical capital equipment to both the public
and private hospital sectors. In line with its strategy, Myriad continues to
consolidate and rationalise the South African medical device sector. The Group
currently consists of seven business units, with the rights to 32 leading
agencies with a wide range of different premier brands.
Myriad has two wholly-owned subsidiaries, Myriad Medical (Proprietary) Limited
(MMPL) and Filterworks (Proprietary) Limited (Filterworks). Besides the Pall
medical filter agency which is housed in Filterworks, MMPL houses all of the
Group`s operating divisions and the Myriad training division. These include, as
separate divisions, Manta Medical, Manta Forensic, ICU Medical, Earth Medical
and Myriad Medical Capex and Technical.
Myriad focuses on both the public and private healthcare sectors, with its
client base consisting of hospitals and private clinics. Currently, the private
sector contributes 70% and the public sector 30% to Group turnover. The Group
has consistently progressed towards a balanced mix between these sectors since
listing in 2006, when the private sector was 85% and the public sector 15%.
2. RESULTS
Financial review
The results for the six months to 30 November 2008 represent the fifth
consecutive set of positive results since listing in October 2006. Trading for
the six months under review was strong due to continued demand in both the
public and private sectors for Myriad`s established and wide range of medical
devices. Turnover increased by 23% to R132.45 million (2007: R107.93 million)
and operating profit increased by 18% to R17.21 million (2007: R14.65 million).
These increases were achieved despite challenging market conditions, which bears
testament to the highly specialised and dedicated sales and management teams,
the Group`s core brand loyalties and strong customer relationships.
In line with Group expectations, earnings per share increased by 16% to 6.5
cents (2007: 5.6 cents). This increase represents organic growth. Myriad`s
balance sheet remains strong with a minimal amount of debt. All businesses were
cash generative at the operating level.
The Group generated R17,20 million (2007: R14.58 million) cash from operations.
The cash was utilised as follows:
- To repurchase further shares in the company for R1.67 million;
- R9.2 million for stock. The increase in stock was mainly attributable to some
divisions taking advantage of favourable discounts from suppliers, a general
increase in turnover, higher landed cost (due to the devaluation of the Rand),
new agency stock, longer supplier lead times from two of the Group`s major
foreign suppliers and increased stock holdings in anticipation of higher
December sales. Going forward, management will continue to monitor stock levels
to keep them as low as possible, however, as is current practice, further stock
investments will be required to support any new agencies.
- R2.98 million for taxation,
- R2.55 million working capital requirements other than stock; and
- R0.80 million for fixed assets.
The majority of the Group`s inventory is sourced from foreign suppliers. The
Group`s policy is to take out forward cover on a substantial portion of its
overseas purchases.
Operational review
90% of the Group`s revenue is derived from single use medical consumables. These
products are distributed by the Group`s Manta Medical, Manta Forensic,
Filterworks, ICU Medical and Earth Medical divisions.
During the period under review, these divisions continued to grow and secure
their positions both within the private and public sectors. Manta, the largest
of these divisions performed well and exceeded its budgeted numbers.
Filterworks, ICU and Manta Forensic maintained a steady growth pattern for the
six months and performed in line with expectations. Earth Medical`s orthopedic
business experienced a reduction in the number of orthopedic cases towards the
end of the period due to medical aid cover being depleted as the year end
approached. An increase in sales of orthopedic devices is expected in the first
half of the 2009 calendar year.
The Group`s Capex and Technical division, which contributes 10% to Group
revenue, was profitable for the period under review.
3. PROSPECTS
The Group`s strategy is to expand its product offering through new agencies and
the acquisition of businesses that can deliver enhanced shareholder value. This
two-pronged strategy, coupled with the Group`s low gearing, gives Myriad the
opportunity to increase its critical mass without having to rely solely on the
equity capital markets for expansion.
Margins may come under pressure, should the higher cost of imported products and
the uncertain economic environment persist. Myriad will focus on increasing its
market share, whilst still ensuring that margins are protected as much as
possible. Price increases submitted to customers and hospitals have been
accepted for 2009.
The Group has secured two leading international agencies, both of which are
already established in the South African market. Firstly, a sports medicine
agency, which was previously held by a well known South African medical device
company, will be housed in Earth Medical and will complement and extend Earth`s
existing range of products. Secondly, a surgical products agency, will be housed
in Filterworks and will also be marketed and distributed through its existing
infrastructure. These agencies have now increased the Group`s sector range from
six sectors on listing to eleven sectors currently.
The healthcare sector regulatory environment is currently in the process of
evolving. The Group believes that these changes will result in a more
transparent and level playing field for the medical device industry, which the
Group welcomes.
4. DIVIDEND
No dividend has been recommended or declared for the interim period.
For and on behalf of the board
Dr PM Mandela, Chairperson
Johannesburg
17 February 2009
Directors: Dr PM Mandela*, Dr J Shapiro, RS Shapiro, BC Budler, W Marshall-
Smith*, 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 (Pty) Ltd
Registered Office
Manta Place
Turnberry Office Park
48 Grosvenor Road
Bryanston
2021
Johannesburg
17 February 2009
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Date: 17/02/2009 08:30:03 Produced by the JSE SENS Department.
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