| Fri 11 Sep 2009, 16:20 | | BEG - Beige Holdings Limited - Audited results for the year ended 31 March 2009 |
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BEG
BEG
BEG - Beige Holdings Limited - Audited results for the year ended 31 March 2009
Beige Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration No: 1997/006871/06)
Share code: BEG ISIN code: ZAE000034161
("Beige" or "the company")
AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2009
The reviewed results for the year ended 31 March 2009 reported to shareholders
on 30 June 2009 have been restated in the audited consolidated annual financial
results for Beige.
The restatement relates to the prior year results for the year ended 31 March
2008 and has no impact on the earnings for the year ended 31 March 2009.
The discount on the acquisition of Amcos Cosmetics International (Pty) Ltd of
R12.7 million accounted for as a profit in the previous financial year ended 31
March 2008 has been reduced to R1.1 million as a result of the overstatement of
the purchase price allocation. This also resulted in a reduction of goodwill at
31 March 2008 of R11.6 million.
The effect of the restatement between the reviewed and audited results can be
summarised as follows:
31 March 2009 31 March 2008
R million`s
Decrease in net asset value 11.6 11.6
Decrease in intangible assets 11.6 11.6
Increase in loss before and after taxation - 11.6
Cents
Decrease in net asset value per share (0.73) (0.69)
Decrease in earnings per share - (0.88)
The audited condensed consolidated results of the Beige group after accounting
for these restatements can be summarised as follows:
Condensed Consolidated Balance Sheet as at 31 March 2009
Audited Restated
31 March 2009 31 March 2008
R`000 R`000
ASSETS
Non-current assets 263,503 229,192
Property, plant and equipment 139,909 112,250
Intangible assets 107,179 103,611
Deferred income tax assets 16,415 13,331
Current assets 202,917 220,055
Inventories 70,720 57,772
Trade and other receivables 122,792 113,845
Cash and cash equivalents 9,405 48,438
Total assets 466,420 449,247
EQUITY AND LIABILITIES
Capital and reserves 201,472 179,194
Ordinary share capital 16,011 16,885
Ordinary share premium 274,476 280,603
Reserves 10,842 10,626
Accumulated loss (99,857) (128,920)
Non-current liabilities 76,545 84,424
Long-term borrowings 71,657 67,145
Call option liability 2,362 17,279
Deferred income tax liabilities 2,526 -
Current liabilities 188,403 185,629
Trade and other payables 117,986 127,421
Current portion of long-term borrowings 32,561 30,388
Current income tax liabilities 7,777 3,443
Bank overdrafts 30,079 24,377
Total equity and liabilities 466,420 449,247
Condensed Consolidated Income Statement for the year ended 31 March 2009
Audited Restated
Year ended Year ended
31 March 2009 31 March 2008
R`000 R`000
Revenue 599,020 452,212
Cost of sales (480,304) (361,267)
Gross profit 118,716 90,945
Distribution costs (12,068) (9,156)
Administrative expenses (75,700) (61,875)
Operating profit 30,948 19,914
Goodwill impairment - (70,535)
Excess of net assets acquired over purchase
consideration - 1,107
Gain on the re-measurement of call option
liability (Note 1) 14,917 1,868
Profit/(loss) before finance costs 45,865 (47,646)
Finance income 1,657 2,859
Finance costs (11,982) (6,051)
Profit/(loss) before income tax 35,540 (50,838)
Income tax expense (6,477) (406)
Profit/(loss) for the year 29,063 (51,244)
Headline earnings adjustments:
Goodwill impairment - 70,535
Excess of net assets acquired over purchase
consideration - (1,107)
Profit on disposal of plant and equipment - (16)
Headline earnings for the year 29,063 18,168
In issue (Note 2) 1 672 843 1 332 425
Fully diluted (Note 2 and 3) 1 684 405 1 443 436
Earnings per share information
Earnings per share (cents) 1.74 (3.85)
Headline earnings per share (cents) 1.74 1.36
Fully diluted earnings per share (cents) 1.73 (3.50)
Fully diluted headline earnings per share (cents) 1.73 1.31
Notes
1. On 2 July 2007 the company issued to its ordinary shareholders a
capitalisation award of redeemable preference shares that are convertible into
ordinary shares at the holder`s option. Initially the company classified the
preference shares as equity, but has retrospectively adjusted the
classification to a debt instrument, amounting to R13.2 million with an
embedded call option liability amounting to R19.1 million. On initial
recognition and subsequent re- measurement the preference shares and the
embedded call option liability were measured at fair value, based on the
prevailing interest rates, the Beige share price, the conversion ratio, and the
strike price of 15 cents per ordinary share. Beige has re-measured the embedded
call option liability to fair value at balance sheet date to R2.4 million (2008:
R17.3 million). As a result, Beige has recorded a gain of R14.9 million (2008:
R1.9 million) in profit and loss, due to the decrease in the Beige share price.
2. 91 716 667 (2008: 4 316 667) shares held as treasury stock have been
subtracted from the respective share totals for purposes of calculating
earnings per share information.
3. Diluted per share information has been incorporated to show the potential
effect of the dilution for 21 300 090 (2008: 18 233 387) options held by
directors and senior management to subscribe for new shares at 7.5 cents per
share, equating to a dilutive effect of 11 562 423 (2008: 11 010 222) ordinary
shares. The directors and senior management options, which were approved by
shareholders at the general meeting held on 13 November 2006, were granted with
effect from 1 April 2006 and expire on 31 March 2011. In addition, dilution
allowing for the conversion of the redeemable convertible preference shares has
been assumed at nil in the current year and 99 999 998 dilutive ordinary shares
in the prior year.
Condensed Consolidated Cash Flow Statement
Audited Restated
31 March 2009 31 March 2008
R`000 R`000
Net cash inflow/(outflow) from
operating activities 12,969 (2,486)
Net cash outflow from investing activities (49,814) (55,359)
Net cash (outflow)/ inflow from
financing activities (7,890) 59,532
Net (decrease)/increase in cash
and cash equivalents (44,735) 1,687
Cash and cash equivalents at the
beginning of year 24,061 22,374
Cash and cash equivalents at the
end of the year (20 674) 24 061
Group Statement of Changes in Equity - Audited
Pre- Pre-
Ordinary Ordinary Ordinary ference ference
share treasury share share share
capital Shares premium capital premium
R`000 R`000 R`000 R`000 R`000
Balance at 31
March 2007 7 762 100 123 127 - -
Prior year
adjustments - - - - -
Restated
balance at 31
March 2007 7 762 100 123 127 - -
Ordinary shares
issued 8 775 - 170 771 - -
Preference
shares issued - - (15 000) 143 14 857
Utilisation of
treasury
shares 100 (100) - - -
Revaluation of
property - - - - -
Share options 191 - 1 334 - -
Employees share
option
scheme:
- value of employee
services - - - - -
- proceeds from
shares issued 57 - 371 - -
Loss for the
year as previously
reported - - - - -
Balance at 31
March 2008 16 885 - 280 603 143 14 857
Prior year
adjustments-
Income statement - - - (143) (14 857)
Equity - - - - -
Restated
balance at 31
March 2008 16 885 - 280 603 - -
Treasury shares
held by subsidiary - (874) (6 127) - -
Employees share
option scheme:
- value of
employees services - - - - -
Profit for the year - - - - -
Balance at 31
March 2009 16 885 (874) 274 476 - -
Share
based
Reval- pay- Acumu-
uation ment lated
reserve reserve loss Total
R`000 R`000 R`000 R`000
Balance at 31 March 2007 - 1 544 (62 173) 70 360
Prior year adjustments
Restated balance at 31 - - (576) (576)
March 2007 - 1 544 (62 749) 69 784
Ordinary shares issued - - - 179 546
Preference shares issued - - - -
Utilisation of treasury
shares - - - -
Revaluation of property 9 202 - - 9 202
Share options - - - 1 525
Employees share option scheme:
- value of employee services - 219 - 219
- proceeds from shares issued - - - 428
Loss for the year as
previously reported - - (24 982) (24 982)
Balance at 31 March 2008 9 202 1 763 (87 731) 235 722
Prior year adjustments-
Income statement (339) - (43 689) (59 028)
**
Equity - - 2 500 2 500
Restated balance at 31
March 2008 8 863 1 763 (128 920) 179 194
Treasury shares held by
subsidiary - - - (7 001)
Employees share option scheme:
- value of employees services - 216 - 216
Profit for the year - - 29 063 29 063
Balance at 31 March 2009 8 863 1 979 (99 857) 201 472
** The restatement includes total restatements of losses accounted for in the
income statement of R26.2 million, and an embedded loss on an embedded call
option liability of R17.4 million.
1. Segmental analysis for the year ended 31 March 2009 - Audited
Outsource Plastic
manufacturing products
R`000 R`000
Segment revenue
- year ended 31 March 2009 504 438 94 582
- year ended 31 March 2008 386 715 65 497
Segment operating profit/(loss)
- year ended 31 March 2009 38 701 (7 772)
- year ended 31 March 2008 24 753 (5 966)
Segment profit/(loss) before taxation
- year ended 31 March 2009 35 197 (11 279)
- year ended 31 March 2008 25 782 (78 632)
Segment assets
- year ended 31 March 2009 308 508 153 752
- year ended 31 March 2008 296 025 127 950
Segment liabilities
- year ended 31 March 2009 169 468 47 644
- year ended 31 March 2008 171 769 45 789
Other Group
R`000 R`000
Segment revenue
- year ended 31 March 2009 - 599 020
- year ended 31 March 2008 - 452 212
Segment operating profit/(loss)
- year ended 31 March 2009 19 30 948
- year ended 31 March 2008 1 127 19 914
Segment profit/(loss) before taxation
- year ended 31 March 2009 11 622 35 540
- year ended 31 March 2008 2 012 (50 838)
Segment assets
- year ended 31 March 2009 4 160 466 020
- year ended 31 March 2008 25 272 449 247
Segment liabilities
- year ended 31 March 2009 47 836 264 948
- year ended 31 March 2008 52 495 270 053
2. Prior year adjustments
The following restatements in respect of prior year adjustments can be
summarised as follows
Cost of Admin
Revenue sales expenses
Note R`000 R`000 R`000
GROUP
Adjustments to prior year income
statement
increase/(decrease) in profit
Crystal pack irregularities 1 2,399 2,849 2,582
Stock valuations adjusted 2 - 1,951 -
Amortisation of customer
relationships 3 - - 2,133
Fair value adjustments on
acquisition of
business and expenses restated 3 - - (1,440)
Deferred tax adjustment on
acquisition of business 3 - - -
Returned shares incorrectly
accounted for in income 4 - - 2,500
Gain on re-measurement of an
embedded
conversion option liability 5 - - -
Adjustments 2,399 4,800 5,775
Invest Finance Finance
ments cost income Tax
GROUP R`000 R`000 R`000 R`000
Adjustments to prior year
income statement
increase/(decrease) in profit
Crystal pack irregularities - - - (2,067)
Stock valuations adjusted - - (546)
Amortisation of customer
relationships - - - (597)
Fair value adjustments on
acquisition of
business and expenses restated 11,612 199 3,601 347
Deferred tax adjustment on
acquisition of business - - - 2,393
Returned shares incorrectly
accounted for in income - - - -
Gain on re-measurement of an
embedded
conversion option liability - 298 - (84)
Adjustments 11,612 497 3,601 (554)
Embed-
ded call Transferred
option to equity
GROUP R`000 R`000
Adjustments to prior year income statement
increase/(decrease) in profit
Crystal pack irregularities - 5,763
Stock valuations adjusted - 1,405
Amortisation of customer relationships - 1,536
Fair value adjustments on acquisition of
business and expenses restated - 14,319
Deferred tax adjustment on acquisition
of business - 2,393
Returned shares incorrectly accounted
for in income - 2,500
Gain on re-measurement of an embedded
conversion option liability (1,868) (1,654)
Adjustments (1,868) 26,262
Equity Debtors Inventory PPE
Note R`000 R`000 R`000 R`000
Adjustments to other
changes (increase)/
decrease in assets
and liabilities
Crystal pack
irregularities 1 - (3,175) (2,857) (541)
Stock valuations adjusted 2 - - (1,951) -
Amortisation of customer
relationships 3 1,013 - - -
Fair value adjustments
on acquisition of
business and expenses
restated 3 (436) - - -
Deferred tax adjustment
on acquisition
of business 3 - - - -
Returned shares
incorrectly accounted
for in income 4 (2,500) - -
Deficit in fair value of
preference share
& option liability 5 19,146 - - -
Decrease in preference
share capital
(restated as debt at
fair value) 5 13,280 - - -
Adjustment to deferred
tax on revaluation
of property 339 - - -
Adjustment to 2008
income transferred
to equity 26,262 - - -
57,104 (3,175) (4,808) (541)
Pref
share
Suppliers Intangibles option
R`000 R`000 R`000
Adjustments to other changes
(increase)/decrease in assets and
liabilities
Crystal pack irregularities (1,256) - -
Stock valuations adjusted - - -
Amortisation of customer relationships - (2,609) -
Fair value adjustments on
acquisition of business and
expenses restated 1, 440 (14,204) -
Deferred tax adjustment on
acquisition of business - 2, 393 -
Returned shares incorrectly accounted
for in income
Deficit in fair value of preference
share & option liability - - (17,279)
Decrease in preference share capital
(restated as debt at fair value) - - -
Adjustment to deferred tax on
revaluation of property - - -
Adjustment to 2008 income
transferred
to equity - - -
184 (14,420) (17,279)
Deferred
Borrowings Tax
R`000 R`000
Adjustments to other changes
(increase)/decrease in assets and liabilities
Crystal pack irregularities - 2, 067
Stock valuations adjusted - 546
Amortisation of customer relationships - 60
Fair value adjustments on acquisition of
business and expenses restated (1,986) (3,835)
Deferred tax adjustment on acquisition
of business - -
Returned shares incorrectly
accounted for in income
Deficit in fair value of preference share
& option liability (298) -
Decrease in preference share capital
(restated as debt at fair value) (13,280) -
Adjustment to deferred tax on
revaluation of property - (339)
Adjustment to 2008 income transferred
to equity - -
(15,564) (1,501)
1. As a result of certain material accounting irregularities identified at
Crystal Pack (Pty) Ltd ("Crystal Pack"), the prior year results are required to
be restated.
2. Overheads were incorrectly allocated in previous years to inventory of
certain subsidiaries instead of cost of sales.
3. As part of business combinations previously acquired by the group (Quality
Products (Pty) Ltd ("Quality Products"), Crystal Pack (Pty) Ltd ("Crystal
Pack"), Lornamead (Pty) Ltd ("Lornamead") and Amcos Cosmetics International
(Pty) Ltd ("Amcos")) certain restatements were required on the purchase price
allocation. This resulted in the restatement of intangible assets namely
customer relationships and goodwill, changes to the fair value of loans, as
well as an increase in deferred tax assets.
4. During the previous financial year shares were returned to Beige as part of
a settlement to the value of R2 500 000. This was treated as income, but is
now allocated to reserves.
5. In the previous financial year the company issued to its ordinary share
holders a capitalisation award redeemable preference shares that are
convertible into ordinary shares at the holders option. Initially the company
classified the preference shares as equity, but has retrospectively adjusted
the classification to a debt instrument amounting to R13.2 million with an
embedded call option liability amounting to R19.1 million. Beige has
re-measured the embedded call option liability to fair value at 31 March 2008
at R17.3 million.
Balance Sheet As Adjustments Restated
previously
reported
2008 2008
R`000 R`000 R`000
Assets
Non-current assets 245,654 (16,462) 229,192
Property, plant and equipment 112,791 (541) 112,250
Intangible assets 118,031 (14,420) 103,611
Deferred income tax assets 14,832 (1,501) 13,331
Current assets 228,038 (7,983) 220,055
Inventories 62,580 (4,808) 57,772
Trade and other receivables 117,020 (3,175) 113,845
Cash and cash equivalents 48,438 - 48,438
Total assets 473,692 (24,445) 449,247
Equity
Capital and reserves 236,298 (57,104) 179,194
Share capital 17,028 (143) 16,885
Share premium 295,460 (14,857) 280,603
Other reserves 10,965 (339) 10,626
Accumulated loss (87,155) (41,765) (128,920)
Total equity
Liabilities
Non-current liabilities 51,581 32,843 84,424
Borrowings 51,581 15,564 67,145
Preference share option - 17,279 17,279
Deferred tax - -
Current liabilities 185,813 (184) 185,629
Trade and other payables 127,605 (184) 127,421
Borrowings 30,388 - 30,388
Current income tax liabilities 3,443 - 3,443
Bank overdrafts 24,377 - 24,377
Total liabilities 237,394 32,659 270,053
Total equity and liabilities 473,692 (24,445) 449,247
Income Statement As Adjustments Restated
previously
reported
2008 2008
R`000 R`000 R`000
Revenue 454,611 (2,399) 452,212
Cost of sales (356,467) (4,800) (361,267)
Gross profit 98,144 (7,199) 90,945
Distribution costs (9,156) - (9,156)
Administrative expenses (56,100) (5,775) (61,875)
Operating profit 32,888 (12,974) 19,914
Goodwill impairment (70,535) - (70,535)
Excess of net assets acquired over
purchase consideration 12,719 (11,612) 1,107
Gain on the re-measurement of an
embedded conversion option liability 1,868 1,868
Net loss before finance costs (24,928) (22,718) (47,646)
Finance income 6,460 (3,601) 2,859
Finance costs (5,554) (497) (6,051)
Finance costs - net 906 (4,098) (3,192)
Loss before income tax (24,022) (26,816) (50,838)
Income tax expense (960) 554 (406)
Loss for the year (24,982) (26,262) (51,244)
COMMENTARY
The directors of Beige are pleased to announce the audited results for the year
ended 31 March 2009. These results show the consolidated position of Beige, the
largest fully empowered contract manufacturer in the personal care industry.
1. Accounting policies
The consolidated results are reported in accordance with International
Financial Reporting Standards ("IFRS").
The condensed consolidated financial statements for the year ended 31 March
2009 were prepared in accordance with International Financial Reporting
Standards, the requirements of the Companies Act of South Africa and in
compliance with the Listing Requirements of the JSE Limited.
The principal policies used in the preparation of the results for the year
ended 31 March 2009 are consistent with those applied for the year ended 31
March 2008.
2. Audited results
These condensed consolidated results have been audited by our auditors
PricewaterhouseCoopers Inc., who have performed their audit in accordance with
the International Standards on Auditing. A copy of their unqualified audit
report is available for inspection at the registered office of the company.
3. Group review
Beige is a registered holding company operating through thirteen subsidiaries.
The Beige group primarily operates as a contract manufacturer, manufacturing
and distributing cosmetics, soaps, laundry soaps and allied products on behalf
of brand owners for the local and international home and personal care
industry. During 2007, the company diversified its operations through the
acquisition of a manufacturing business to complement its contract
manufacturing operations. Beige is listed on the Alternative Exchange ("AltX")
of the JSE Limited.
During the year under review, with the exception of Crystal Pack, which was
acquired in the prior year and further details of which are provided below, all
the operating units performed significantly better than the prior comparative
period. Quality Products, the largest subsidiary, saw continued increase in
organic growth, from both key and new customers. The combined operations at
Chloorkop and Argo Soap and Chemicals (Pty) Ltd have also showed substantially
improved operational and financial results. Beige has made additional
investments in infrastructure and capacity and both the Durban and Johannesburg
operations have been expanded. Amcos Cosmetics International (Proprietary)
Limited ("Amcos") has been included for a full year following its acquisition
with effect from 01 January 2008. RAP Products International (Proprietary)
Limited ("RAP") has been consolidated into the group from September 2008.
The company continues to experience a growth in demand for the goods and
services that it provides. The second six months showed a change in product
demand, with consumers substituting luxury products for more affordable
products.
Update on the acquisition of Crystal Pack
During the previous financial year the company acquired 100% of Crystal Pack
and related manufacturing contracts ("Star"), which acquisition was approved by
shareholders at a general meeting held on 31 May 2007. Shareholders were
previously advised on SENS that the board of directors uncovered material
accounting irregularities at Crystal Pack, a wholly-owned subsidiary of Beige.
Suspicions were raised in September 2008 and Beige immediately commissioned a
forensic audit into Crystal Pack`s financial affairs. Crystal Pack was acquired
by Beige from the CAVI consortium from 1 July 2007 and was subject to profit
and other warranties for the year to 31 March 2008. The forensic audit revealed
accounting irregularities, which Beige is of the opinion, constitutes serious
manipulation of financial accounts from both prior to the Crystal Pack
acquisition date, and during the warranty period. The matter has been referred
to the National Prosecuting Authorities and steps are being taken to recover
damages and/or losses from the various parties associated with Crystal Pack.
Subsequent to year end, certain members of the CAVI Consortium have signed an
agreement with Beige for the return and cancellation of 56 887 561 shares,
being the balance of the shares received by certain of the CAVI Consortium
members. CAVI will jointly pursue damages and recovery of losses from the
parties responsible for the irregularities at Crystal Pack, together with
Beige.
The financial effects of the irregularities above have mostly affected the
financial results of the prior year ended 31 March 2008 and these results have
consequently been restated. Since December 2008, Beige has taken management
control of Crystal Pack and has managed to turn the operations around from
incurring large monthly losses to a breakeven position by March 2009. Crystal
Pack is expected to become profitable in the forthcoming year.
Restatement of prior year results
The prior year results have been restated due to, inter alia, the Crystal Pack
accounting irregularities. Full details of all restatements are set out in
section 2.
4. Financial and operational overview
The growth in turnover and business of Beige has continued in the year under
review and the board is pleased with the results, which reflect the continued
implementation of the organic and acquisitive growth strategy underway at
Beige.
Revenue increased substantially from R452 million in the comparative period to
R599 million for the year under review, an increase of 33%. The gross profit
increased by 31% to R119 million from R91 million and the gross profit margin
has remained consistent at 20%.
Distribution costs have increased by 32% due to the increased levels of
business, along with administration costs which increased by nearly 22%. This
increase in costs was primarily due to increased administration costs from
Amcos, which was consolidated for a full year for the first time as well as
RAP, which was consolidated from September 2008. The group also incurred
certain non-recurring costs such as the relocation of the Amcos factory into
the Chloorkop facility. The incorporation of the RAP facility into the Crystal
Pack facility is currently under way and is due to be completed shortly.
The profit before tax (after adjusting for non-recurring items and unrealised
financial instrument gains) for the group increased by 23% to R21 million from
R17 million. The adjustments can be set out as follows:
2009 2008
R`000 R`000
Group profit/(loss) for the year before income
taxation 35 540 (50 838)
Non-recurring and unrealised financial instrument
positions to be adjusted to assess the results
of the group, namely:
Gain on re-measurement of embedded conversion option
liability arising from the
decrease in the Beige share price (14 917) (1 868)
Headline earning adjustment (mainly net impairment) - 69 412
20 623 16 706
The profits were adjusted for the headline earnings adjustments, as well as the
re-measurement of the preference shares and the embedded call option liability
measured at fair value, based on the prevailing interest rates, the Beige share
price, the conversion ratio, and the strike price of 15 cents per ordinary
share, namely unrealised gain of R14.9 million (2008: R1.8 million).
Finance costs increased substantially over the prior period due to the company
having to finance Crystal Pack losses and related working capital requirements.
Finance costs include the preference dividend.
Taxation is approximately R6 million higher due to deferred taxation assets
being raised in the prior year against assessable losses. The taxation rate is
also affected by permanent differences due to the interest on preference shares
not being deductable for taxation.
The Competition Commission gave their unconditional approval for Beige to
acquire 100% of Amcos in December 2007 and the Beige management team have been
instrumental in turning this business around, with Amcos now contributing
positively to the group. During the year under review, Amcos has been relocated
and integrated into the Chloorkop facility.
In addition, the Competition Commission gave their unconditional approval for
Beige to acquire 100% of the shares in RAP at the end of August 2008 and the
results of RAP have been consolidated into the group from September 2008. RAP
carries on the business of manufacturing injection and blow moulded plastic
packaging products, primarily for the cosmetics industry.
These initiatives all form part of a strategic decision by management to grow
market share in a controlled fashion and to obtain critical mass at the
factories. The long term benefits of this growth strategy include the
optimisation of available production capacity, improvements in efficiency and
the achievement of greater benefits resulting from consolidated procurement.
5. Acquisitions and issue of shares
In August 2008, the group acquired 100% of the share capital of RAP for a cash
consideration of R17.1 million. The acquired business contributed revenues of
R36.4 million and net profit of R1.3 million to the group for the period from
acquisition to 31 March 2009. If the acquisition had occurred on 1 April 2008,
consolidated revenue and consolidated profit for the year ended 31 March 2009
would have been R45.6 million and R1.1 million respectively.
Details of net assets acquired and goodwill are as follows:
R million
Purchase consideration:
Cash paid 14.7
Direct costs relating to the acquisition 2.4
Total purchase consideration 17.1
Purchase price allocated as follows:
Fair value of net identifiable assets acquired 11.2
Goodwill 5.9
17.1
No shares have been issued during the year under review. However, shareholders
are referred to paragraph 6 below.
6. Repurchases of and cancellations of shares
During the year under review, Beige repurchased 87 400 000 shares at a total
value of R7 000 740 under its general authority. The repurchased shares are
held as treasury shares.
In addition, shares that were issued in relation to Crystal Pack profit
warranties are to be cancelled ab initio in terms of agreements signed with
CAVI Consortium members as mentioned in paragraph 1 above. At the date of this
announcement agreements have been signed for the cancellation of 56 887 561
shares.
7. Prospects
The group has excellent prospects for strong, sustained growth in earnings.
Improved performance in the coming year is expected with the integration of
Amcos into the Chloorkop facility, the recent operational turnaround of the
Crystal Pack operations, the intended merging of the Crystal Pack and RAP
facilities and the strengthened management at Crystal Pack with the
introduction of the RAP management team. Beige expects synergies and cost
benefits to flow in due course.
8. Director appointments and resignations
Following receipt of Competition Commission approval for the acquisition by
Thebe Investment Corporation (Proprietary) Limited of a 33.36% interest in
Beige, Messrs. V Khanyile and M Fandeso were appointed to the board with effect
from 17 March 2009, whilst Ms L Gadd and Mr J Alderslade were appointed as
alternate directors to Messrs. Khanyile and Fandeso. Messrs. John Black and
Yaseen Bhayat resigned from the board with effect from 16 March 2009, following
the disposal by Thebe Medicare (Proprietary) Limited of its investment in
Beige. Mr G Anderson resigned as a director with effect from 31 December 2008,
whilst Mr M ten Hope resigned as a director with effect from 18 August 2008.
9. Change in auditors
During the year under review, PricewaterhouseCoopers Inc. were appointed as
auditors to the company.
10. Dividends
Pursuant to the acquisition of Crystal Pack in the prior year, a capitalisation
award of redeemable, convertible, cumulative 8% preference shares was made to
ordinary shareholders, prior to the issue of shares to the vendors of Crystal
Pack. The capitalisation award was made in the ratio of one preference share
for every 55.03271 Beige ordinary shares held. The first preference share
dividend of 8.40 cents was paid to all preference shareholders recorded in the
preference share register of the company at the close of business on 29 August
2008.
No ordinary dividend has been declared for the year ended 31 March 2009.
11. Contingent assets
Beige has initiated legal action against all parties who have been involved in
the material accounting irregularities at Crystal Pack and preliminary steps to
recover all amounts involved, including costs and damages have commenced.
No asset in relation to this claim has been recognised in these results as the
claim is in a preliminary stage.
12. Subsequent events
The company is in the process of acquiring 51% of Herbal & Homeopathic
(Proprietary) Limited, for an amount of R3 million settled in cash, which
company contract manufactures nutri-ceutical products. The acquisition is in
line with the group`s strategy to become the preferred contract packing
manufacturer in South Africa, supplying more products to its customer base.
13. Notice of Annual General Meeting
Notice is hereby given that the annual general meeting of shareholders of the
Company will be held in the boardroom, Arcay House II, Number 3 Anerley Road,
Parktown, Johannesburg, at 10:00 on Wednesday, 30 September 2009.
By order of the Board
Monwabisi Fandeso Mark Di Nicola
Chairman Chief Executive Officer
11 September 2009
Johannesburg
Company Secretary and Registered Office
Arcay Client Support (Pty) Ltd (Registration number 1998/025284/07)
Arcay House, Number 3 Anerley Road, Parktown, 2193
PO Box 62397, Marshalltown, 2107
Directors
MP Fandeso*; MM Di Nicola Chief Executive Officer; MC Easter Financial
Director; MM du Preez*; VP Khanyile*; LI Karp*; RH Weissenberg*
(* Non-executive)
Designated Advisor
Arcay Moela Sponsors (Pty) Ltd
Transfer Office
Link Market Services South Africa (Pty) Ltd
Date: 11/09/2009 16:20:06 Produced by the JSE SENS Department.
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