| Thu 20 Aug 2009, 16:50 | | MYD - Myriad - Reviewed Preliminary Condensed Annual Financial Statements For |
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MYD
MYD
MYD - Myriad - Reviewed Preliminary Condensed Annual Financial Statements For
The Year Ended 31 May 2009
MYRIAD MEDICAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2006/006371/06)
Share code: MYD & ISIN: ZAE000085825
(Myriad or the Group)
REVIEWED PRELIMINARY CONDENSED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED
31 MAY 2009
Turnover up 20%
Cash flows from operating activities up 153%
Cash and cash equivalents at end of the year up 210%
Tangible net asset value per share up 41%
Operating profit before foreign exchange fair value adjustments up 19%
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 31 MAY 2009
Reviewed Audited
31 May 31 May
2009 2008
(R`000) Note
ASSETS
Non-current assets 86 508 84 671
Property plant and equipment 2 878 3 286
Goodwill 5 81 468 81 298
Deferred taxation asset 2 162 87
Current assets 119 634 93 457
Inventories 60 807 45 693
Trade and other receivables 50 711 39 712
Taxation receivable 3 015 6 408
Cash and cash equivalents 5 101 1 644
Total assets 206 142 178 128
EQUITY AND LIABILITIES
Total equity 156 082 134 943
Share capital and premium 94 271 95 909
Accumulated profits 61 811 39 034
Non-current liabilities 383 1 702
Instalment sale liabilities 383 828
Deferred taxation - 874
Current liabilities 49 677 41 483
Accounts payable and provisions 44 222 33 157
Taxation payable 5 455 8 326
Total equity and liabilities 206 142 178 128
Net asset value per share (cents) 82.9 70.3
Net tangible asset value per share
(cents) 39.6 28.0
Closing number of shares 188 230 364 191 917 767
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MAY 2009
Reviewed Audited
31 May 31 May
(R`000) 2009 2008
Revenue 277 899 228 250
Turnover 273 614 227 153
Cost of sales (159 418) (119 899)
Gross profit 114 196 107 254
Operating costs (79 579) (77 424)
Expense recognised in respect of
share-based payments (95) (578)
Loss attributable to goodwill impairment - (184)
Foreign exchange (losses)/gains 6 (3 324) 1 525
Profit on sale of property, plant and
equipment 30 47
Operating profit 31 228 30 640
Interest received 2 586 1 025
Interest paid (2 274) (624)
Profit before taxation 31 540 31 041
Taxation (8 858) (8 870)
Profit for the year 22 682 22 171
Earnings per share (cents) 12.0 11.6
Diluted earnings per share (cents) 11.5 11.1
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2009
Share Share Share-
capital premium based
payment
(R`000) reserve
Balance at 1 June 2007 188 93 200 -
Issue of shares 4 3 079 -
Share buy-back (Treasury shares) (1) (561) -
Profit for the year - - -
Share-based payment reserve - - 578
Balance at 31 May 2008 191 95 718 578
Share buy-back (Treasury shares) - (1 638) -
Profit for the year - - -
Share-based payment reserve - - 95
Balance at 31 May 2009 191 94 080 673
Accumu- Total
lated
Profits
(R`000)
Balance at 1 June 2007 16 285 109 673
Issue of shares - 3 083
Share buy-back (Treasury shares) - (562)
Profit for the year 22 171 22 171
Share-based payment reserve - 578
Balance at 31 May 2008 38 456 134 943
Share buy-back (Treasury shares) - (1 638)
Profit for the year 22 682 22 682
Share-based payment reserve - 95
Balance at 31 May 2009 61 138 156 082
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MAY 2009
Reviewed Audited
31 May 31 May
(R`000) 2009 2008
Cash inflows from operating activities 6 614 2 615
Cash outflows from investing activities (1 022) (9 445)
Cash outflows from financing activities (2 135) (959)
Increase/(decrease) in cash and cash equivalents 3 457 (7 789)
Cash and cash equivalents at beginning of year 1 644 9 433
Cash and cash equivalents at end of year 5 101 1 644
NOTES TO THE FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The preliminary condensed Group financial results are prepared in accordance
with IAS 34 - Interim Financial Reporting the requirements of the South African
Companies Act Act 61 of 1973 and the Listing Requirements of the JSE Limited.
The financial results presented above have been reviewed but not audited by
Mazars Moores Rowland the Group`s auditors. Their review report is available
for inspection at Myriad`s registered office during normal office hours. The
preliminary annual financial statements are prepared on the historical cost
basis with the exception of certain financial instruments which are measured at
fair value. The financial statements should be read in conjunction with the
audited 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 year end and the date of this report.
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 year under review the Group purchased fixed assets to the value of
R1.1 million with no material disposals of equipment or other assets.
5 GOODWILL
In terms of the sale and purchase agreement between the original vendor of
Filterworks and Myriad, Myriad was required to make an additional capital
payment of R4.4 million in cash to the original vendor of Filterworks which
increased the Goodwill.
One of the Group`s divisions did not achieve its warranted profit target as set
out in the sale and purchase agreement between the vendors and Myriad. The
resultant effect was a R4.2 million reduction in Goodwill.
6. FOREIGN EXCHANGE CONTRACTS
The foreign exchange loss in the main represents the loss on revaluation of
foreign exchange contracts at year end.
7. RECONCILIATION OF HEADLINE EARNINGS
Reviewed Audited
31 May 31 May
2009 2008
Headline earnings per share (cents) 12.0 11.7
Diluted headline earnings per share (cents) 11.5 11.2
(R`000)
Earnings attributable to ordinary shareholders 22 682 22 171
Profit on disposal of property plant and
equipment (30) (47)
Tax effect on profit on disposal of property
plant and equipment 8 13
Loss attributable to goodwill revaluation - 184
Headline earnings 22 660 22 321
Weighted average number of shares 189 316 410 191 333 060
Diluted weighted average number of shares 197 224 365 199 705 285
8. SEGMENT INFORMATION
Segment
Single-use
devices and Capital Total
(R`000) head office equipment Technical services
Reviewed 31 May 2009
Turnover 242 709 21 633 9 272 273 614
Operating profit 30 355 533 340 31 228
Interest received 2 586
Interest paid (2 274)
Profit before taxation 31 540
Taxation expense (8 858)
Profit for the year 22 682
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 taxation 31 041
Taxation expense (8 870)
Profit for the year 22 171
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. Since
listing the Group has doubled in size. The Group 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 65% and the public sector 35% to Group turnover. The Group`s
strategy is to continue to strive towards a more balanced mix between these
sectors.
2. RESULTS
Overview
The results for the year ended 31 May 2009 represent the sixth consecutive set
of positive results since listing in October 2006.
Trading for the 12 months was strong with most divisions meeting or exceeding
their budgets. Turnover increased by 20% to R273.6 million (2008: R227.2
million). These increases were achieved despite the challenging market
conditions that continued to persist.
The Group achieved 19% growth in core operating income as can be seen in the
table below.
Reviewed Audited
31 May 31 May Percentage
2009 2008 increase
Operating profit before foreign
currency gains
and losses 34 552 29 115 19%
Adjusted for foreign exchange gains
and losses (3 324) 1 525
Operating profit 31 228 30 640 3%
Myriad has gearing of less than 1%.
Cash generation was very strong with all divisions being cash generative at the
operating level. Cash from operating activities increased by 153% to R6.614
million (2008: R2.615 million).
Foreign exchange adjustments
As over 90% of the Group`s products are imported Myriad has historically taken
out Forward Exchange Contracts (FECs) to mitigate against a volatile Rand. A
cover of approximately 70% of the anticipated future purchases is taken out
about nine months in advance.
In the year under review the Rand depreciated by around 40% against the US
Dollar which was followed by a rapid appreciation shortly before the Group`s
financial year end at 31 May 2009.
In terms of IFRS reporting requirements all foreign exchange contracts taken
out for the period after the year end (for purchases yet to take place in the
2010 financial year) need to be re-valued. The net effect of this IFRS
adjustment and the revaluation of foreign creditors at year end was a negative
impact of R3.3 million on the 2009 income statement, which significantly
distorted the strong operating performance of the Group.
Going forward, if the Rand stays at its current levels, this FEC liability will
be reversed in the next financial year, resulting in a positive impact on the
income statement and resulting operating profit and earnings per share for
2010.
Operational review
Myriad continues to distinguish itself as a superior supplier and service
provider to private and state hospitals with a diverse range of leading
products. The vast majority 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.
Manta Medical the largest division traded well and added significant government
tenders to its portfolio in addition to increasing its sales to the private
sector. Filterworks and ICU performed well and both exceeded their budgeted
profit for the financial year. Earth Medical concluded the acquisition of the
complete ArthroCare Sports medicine range. Manta forensics maintained
profitability at a good level.
The Group`s Capex and Technical division which is a small contributor to Group
revenue was profitable for the period under review.
3. GROUP PROSPECTS
The Group will aim to continue supplementing its growth strategy with value-
enhancing acquisitions and organic growth to enhance the Group`s offering.
A number of positive factors should continue to drive the performance of Myriad,
inter alia, Government`s commitment to extending healthcare benefits to more
people, state tender activity and success of the Government Employee`s Medical
Scheme in capturing more members into the private healthcare system. The supply
of sophisticated surgical consumables by Myriad has been and continues to be in
consistent demand due to the criticare nature of these well established leading
brands of products. This, together with the ability to add new agencies and
products should enhance Myriad`s prospects.
4. DIVIDEND
No dividend has been recommended or declared.
5. CAUTIONARY ANNOUNCEMENT
Shareholders are referred to the cautionary announcement dated 30 July 2009.
Shareholders are advised to continue to exercise caution when dealing in their
securities.
For and on behalf of the board
Dr PM Mandela Chairperson
Johannesburg
20 August 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 Advisor
Sasfin Capital
(a division of Sasfin Bank Limited)
Auditors
Mazar Moores Rowland
Transfer Secretaries
Computershare Investor Services (Pty) Ltd
Registered Office
Manta Place
Turnberry Office Park
48 Grosvenor Road
Bryanston
2021
Date: 20/08/2009 16:50:01 Produced by the JSE SENS Department.
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