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LAB
LAB
LAB - Labat Africa - Reviewed Results for the Year Ended 28 February 2009
LABAT AFRICA LIMITED
Incorporated in the Republic of South Africa
(Registration number 1986/001616/06)
JSE code: LAB
ISIN: ZAE000018354
("Labat")
REVIEWED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2009
GROUP CONSOLIDATED INCOME Reviewed Audited
STATEMENT
12 months 12 months
28 February 29 February
2009 2008
R`000 R`000
Revenue 42 201 154,646
Continuing operations 42 201 41 784
Discontinued operations - 112 862
Operating income before (4 351) 50 207
depreciation and amortisation
Continuing operations (4 351) 28 740
Discontinued operations - 21 467
Depreciation and amortisation (8 393) (21 548)
Continuing operations (8 393) (13 583)
Discontinued operations - (7 965)
Operating (loss)/ profit (12 744) 28 659
before interest and taxation
Continuing operations (12 744) 15 157
Discontinued operations - 13 502
Interest paid (9 264) (9 650)
Continuing operations (9 264) (5 336)
Discontinued operations - (4 314)
Interest received 2 491 5 029
Continuing operations 2 491 2 235
Discontinued operations - 2 794
(Loss)/profit before taxation, (19 517) 24 038
sale and fair value
adjustments
Continuing operations (19 517) 12 056
Discontinued operations - 11 982
Fair Value Adjustments 67 528 (12 223)
Surplus on restructuring of - 3 854
subsidiary
Unbundling of TCS 48 793 -
Impairment of financial asset 1 392 -
Revaluation of asset 17 343 -
Bee discount-TCS - (16 077)
Profit before taxation 48 011 11 815
Continuing operations 48 011 15 910
Discontinued operations - (4 095)
Taxation 9 525 (10 420)
Continuing operations 9 525 (22)
Discontinued operations - (10 398)
Profit after taxation 57 536 1 395
Continuing operations 57 536 (189)
Discontinued operations - 1 584
Attributable to
Minority Interest - 2 230
Equity holders 57 536 (835)
Profit attributable to 57 536 1 395
shareholders
Weighted shares in issue 197 155 189 100
throughout the year (000)
Basic profit/( loss) per share 29.2 (0.4)
(cents)
Headline loss per share (5.1) (0.5)
(cents)
Reconciliation of basic to
headline earnings
Basic profit 57 536 (835)
Surplus on revaluation of (17 343) -
asset
Profit on sale of assets - (62)
Unbundling of TCS (48 793) -
Impairment of investment (1 392) -
Headline loss (9 992) (897)
GROUP CONSOLIDATED BALANCE Reviewed Audited
SHEET
28 February 29 February
2009 2008
R`000 R`000
ASSETS
Property, plant and equipment 78 114 87 432
Goodwill - 19 424
Other intangible assets - 2 120
Other financial assets - 2 704
Non-current assets 78 114 111 680
Inventories 21 223 18 233
Trade and other receivables 18 204 50 573
Cash and cash equivalents 11 417 44 112
Current assets 50 844 112 918
Total assets 128 958 224 598
EQUITY AND LIABILITIES
Share capital and reserves 22 822 31 316
Unexpended grant 16 518 39 686
Long-term liabilities 34 724 57 099
Deferred taxation 6 667 21 789
Non-current liabilities 41 391 78 888
Trade and other payables 45 903 57 472
Bank overdraft 1 756 1 862
Current portion of financial 568 13 153
liabilities
Taxation - 2 221
Current liabilities 48 227 74 708
Total equity and liabilities 128 958 224 598
Number of shares in issue 197 155 197 155
(`000)
Total net asset value per 11.6 11.5
share (cents)
Reviewed Audited
CASH FLOW STATEMENT 12 months 12 months
28 February 29 February
2009 2008
R`000 R`000
Net flow from operating (29 884) (3 865)
activities
Net flow from investing (2 322) (9 147)
activities
Net flow from financing (489) 16 594
activities
Net (decrease)/increase in (32 695) 3 582
cash
Cash at beginning of year 44 112 40 530
Cash at end of year 11 417 44 112
STATEMENT OF CHANGES IN EQUITY
R`(000) Share Share Non-Distributable
Capital Premium Reserves
Balance at 1 March 2007 1 864 49 065 41 099
Issue of share capital 108
Prior year adjustment
Minorities bought out
Loss for the year
Dividend paid
Balance at 29 February 1 972 49 065 41 099
2008
Direct transfer to - - -
reserves-after tax
effect of depreciation
Shareholders loans - - (9 261)
repaid
Attributable loss for - - -
the year
Loss before unbundling - - -
of TCS
Unbundling of TCS - - -
Dividend paid - - -
Balance at 28 February 1 972 49 065 31 838
2009
Table continues:.
Distributable Capital and Minority Total
Reserves Reserves Interest
(66 890) 25 138 15 227 40 365
108 108
(1 003) (1 003) (1 003)
(702) (702) 3 186 2 484
(835) (835) 2 230 1 395
(12 033) (12 033)
(69 430) 22 706 8 610 31 316
9 808 9 808 - 9 808
- (9 261) - (9 261)
(431) (431) (8 610) (9 041)
8 739 8 739 (41) 8 698
48 793 48 793 (8 569) 40 224
(57 963) (57 963) - (57 963)
- -
(60 053) 22 822 - 22 822
COMMENTARY
Results
Basic earnings per share increased from a loss per share of 0,4 cents in the
previous year to basic earnings per share in the current year of 29.2 cents.
This increase is primarily due to a fair value adjustment on property of
R17.3 million and the unbundling of Total
Client Services Limited ("TCS") which resulted in an accounting profit on
unbundling of R48.8 million. Headline loss per share increased from 0.5 cents
in the previous year to 5.1 cents in the current year. Net asset value per
share increased marginally from 11.5 cents to 11.6 cents.
Restructuring
After the distribution of the TCS shares to shareholders, the company is left
with one remaining operating business, South African Micro-Electronic Systems
(Proprietary) Limited ("SAMES").
SAMES
Despite attempts over several years to continue with the manufacture of
integrated circuits (ICs), profitably in our plant at Koedoespoort, the
current market conditions, the aggressive competition from China and the
current Rand strength have made it impossible to do so. It has been decided
therefore to cease wafer production at Koedoespoort and move the wafer
manufacture to a plant in China. The Integrated Circuit Design (ICDC)
division therefore will immediately take over the management of manufacturing
outsourcing and continue with the design and marketing of the SAMES product
range but now with enhanced products at competitive prices.
The existing premises and plant will be used for a variety of other ventures.
Staff will be re-deployed to these other ventures and redundancies will be
kept to a minimum. We have been aware for some time that the manufacture of
ICs in the existing facility would not be sustainable in the long term and
have explored many alternative uses for the facility. The unique facilities,
in particular the clean room and clean water plant, lend themselves very well
to a variety of alternative uses. It has been decided to concentrate
primarily on establishing;
- an Active Pharmaceutical Ingredient (API) facility; and
- a Pharmaceutical formulation facility.
Our investigations to date have confirmed that these facilities can be
converted to supply the bulk of the ARV drugs required in South Africa.
Secondary uses include a Micro-Electro-Mechanical-Systems (MEMS) facility and
the production of health/mineral waters. In the meantime we will continue
with our two existing operating divisions, ICDC and Elsec, our security
hardware manufacturer. Excess plant and equipment will be disposed of and the
proceeds will be used to fund the migration to new business ventures.
Potential partners for these new ventures have been identified and
negotiations are taking place with a view to rolling out these new businesses
in the immediate future.
Basis of preparation
The reviewed condensed consolidated financial statements for the year have
been prepared in accordance with the recognition and measurement principles
of International Financial Reporting Standards, the disclosure requirements
of IAS34: Interim Financial Reporting and in the manner required by the JSE
Limited Listings Requirements and the South African Companies Act, 1973. The
accounting policies and method of measurement and recognition applied in
preparation of the reviewed consolidated annual financial statements are
consistent with those applied in the group`s annual financial statements for
the year ended 29 February 2008, which comply with International Financial
Reporting Standards.
Review opinion
These reviewed condensed consolidated annual financial statements have been
reviewed by the group`s auditors, Ngubane Zeelie Inc, and their unmodified
review opinion is available for inspection at the company`s registered
office.
Statement on going concern
The reviewed condensed consolidated annual financial statements for the year
ended 28 February 2009 have been prepared on the going concern basis as the
directors have every reason to believe that that the group has adequate
resources to continue in operation for the foreseeable future.
Corporate Governance
The group subscribes to the values of good corporate governance at all levels
and is committed to conducting business with discipline, integrity and social
responsibility.
Post balance sheet events
Management is not aware of any material events which occurred subsequent to
the year ended 28 February 2009.
Dividends
In line with group policy, no dividend has been declared.
For and on behalf of the board.
B G VAN ROOYEN
Chairman
12 June 2009
Directors: B G van Rooyen, D J O`Neill, V J Labat*, R Mohamed*
* Non-executive
Registered Office
23 Kroton Avenue
Weltevreden Park, Roodepoort, 1709
Private Bag X09-248
Weltevreden Park, 1715
Transfer secretaries
Computershare Investor Services (Proprietary) Limited
70 Marshall Street
Johannesburg
2001
PO Box 61051
Marshalltown, 2107
Auditors
Ngubane Zeelie Inc
Zeelie Office Park
381 Ontdekkers Road
1709
Sponsor
Vunani Corporate Finance
Date: 12/06/2009 16:10:01 Produced by the JSE SENS Department.
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