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LAB
LAB
LAB - Labat Africa - Unaudited Results for the Six Months Ended 31 August 2009
and Renewal of the Cautionary Announcement
LABAT AFRICA LIMITED
Incorporated in the Republic of South Africa
(Registration number 1986/001616/06)
JSE code: LAB & ISIN: ZAE000018354
("Labat")
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2009 AND RENEWAL OF THE
CAUTIONARY ANNOUNCEMENT
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AS AT 31 AUGUST 2009
Unaudited Reviewed Audited
6 months 6 months 12 months
31 August 31 August 28
2009 2008 February
2009
R`000 R`000 R`000
Revenue 13,633 24,937 42,201
Operating income before depreciation (5,509) 391 (4,995)
and amortization
Depreciation and amortization (3,631) (4,194) (8,393)
Operating (loss)/ profit before (9,140) (3,803) (13,388)
interest and taxation
Interest paid (3,260) (3,168) (9,264)
Interest received 249 1,481 2,491
(Loss)/profit before taxation, sale (12,151) (5,490) 20,161
and fair value adjustments
Fair Value Adjustments - 48,793 50,072
Surplus on restructuring of - - 1,392
subsidiary
Unbundling of TCS - 48,793 48,793
Fair value adjustment to investment - - (113)
Loss / profit before taxation (12,151) 43,303 29,911
Taxation - - 15,286
Loss / profit after taxation (12,151) 43,303 45,197
Attributable to
Minority Interest - - -
Equity holders (12,151) 43,303 45,197
Profit attributable to shareholders (12,151) 43,303 45,197
Weighted Shares in issue throughout 197,155 197,155 197,155
the period (000)
Basic loss (profit) per share (6.2) 22.0 22.9
(cents)
Headline loss per share (cents) (6.2) (2.8) (2.5)
Reconciliation of basic to headline earnings
Basic profit (12,151) 43,303 45,197
Surplus on restructuring - - (1,392)
Unbundling of TCS - (48,793) (48,793)
Fair value adjustment on investment - - 113
Headline loss (12,151) (5,490) (4,875)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 AUGUST 2009
Reviewed Audited
Unaudited
6 months 6 months 12
months
31 August 31 August 28
2009 2008 February
2009
R`000 R`000 R`000
ASSETS
Property, plant and equipment 74,530 64,627 78,114
Other intangible assets - 795 -
Other financial assets 1,403 6,627 1,632
Non-current assets 75,933 72,049 79,746
Inventories 19,135 17,597 21,223
Trade and other receivables 4,451 17,180 16,278
Cash and cash equivalents 2,470 25,905 11,417
Current assets 26,056 60,682 48,918
Total assets 101,988 132,731 128,664
EQUITY AND LIABILITIES
Share capital and reserves 10,377 8,045 22,528
Unexpended grant 9,134 30,694 16,518
Long-term liabilities 34,418 27,460 34,724
Deferred taxation 6,667 16,736 6,667
Non-current liabilities 41,085 44,196 57,909
Trade and other payables 40,641 48,160 41,391
Bank overdraft 1 1,636 1,756
Current portion of financial 568 - 568
liabilities
Provisions - - 4,329
Taxation 183 - 183
Current liabilities 41,393 49,796 48,227
Total equity and liabilities 101,988 132,731 128,664
Number of shares in issue (`000) 197,155 197,155 197,155
Total Net asset value per share 5.3 4.1 11.0
(cents)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS AS AT 31 AUGUST 2009
Reviewed Audited
Unaudited
6 months 6 months 12 months
31 August 31 August 28
2009 2008 February
2009
R`000 R`000 R`000
Net flow from operating activities (3,056) (11,122) (29,792)
Net flow from investing activities (47) (5,056) (2,332)
Net flow from financing activities (5,844) (2,029) (581)
Net increase/(decrease) in cash (8,947) (18,207) (32,695)
Cash at beginning of period 11,417 44,112 44,112
Cash at end of period 2,470 25,905 11,417
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Non- Distributable
Distributable
R`(000) Capital Premium Reserves Reserves
Balance at 29 1,972 49,065 41,099 (69,430)
February 2008
Attributable loss - - - (14,661)
for the period
Loss before - - - (5,490)
unbundling of TCS
Unbundling of TCS - - - 48,793
Dividend paid - - - (57,963)
Balance at 31 1,972 49,065 41,099 (84,091)
August 2008
Balance at 28 1,972 49,065 43,420 (71,447)
February 2009
Direct transfer (3,595) 3,595
to reserves-after
tax effect of
depreciation
Attributable loss (12,151)
for the year
Balance at 28 1,972 49,065 39,825 (80,004)
February 2009
Treasury Capital Minority Total
and
Shares Reserves Interest
R`(000) 22,706 8,610 31,316
Balance at 29 (14,661) (8,610) (23,271)
February 2008
Attributable loss (5,490) (41) (,532)
for the period
Loss before 48,793 (8,569) 40,224
unbundling of TCS
Unbundling of TCS (57,963) (57,963)
Dividend paid
8,045 - 8,045
Balance at 31 (482) 22,528 22,528
August 2008
Balance at 28 - - -
February 2009
Direct transfer to (12,151) (12,151)
reserves-after tax
effect of
depreciation
Attributable loss 10,377 - 10,377
for the year
Balance at 28
February 2009
Segments at 31 August 2009
Profit Trade and Trade and Long term
Revenue before Property, Accounts Accounts liabilities
interest plant and Receivable Payable
and tax equipment
Technology 13,633 (5,985) 74,438 4,438 32,323 34,418
Other - (3,154) 92 13 8,318
operations
13,633 (9,140) 74,530 4,451 40,641 34,418
COMMENTARY
Results
The unaudited results show a net loss for the period before taxation of
R12,151,000. As reported previously, the manufacturing of integrated circuits
("ic`s") in South African Micro Electronic Systems (Pty) Limited ("SAMES") is
being discontinued. This process is almost complete and the plant will be closed
by the end of October 2009. The winding down, restructuring and retrenchment
costs have contributed largely to the loss for the period.
Discussions are underway with a number of tertiary institutions and
organisations with a view to retaining most of the ic equipment for these
institutions, thereby ensuring the continuity of vital projects such as MEMS
driven by the interest group in conjunction with the Department of Science and
Technology. A valuation is currently being conducted by an independent
consultant for this purpose.
SAMES
As reported in our publication of 12 June 2009, it has been decided to cease
wafer production at Koedoespoort and move manufacturing to a plant in China. The
Integrated Circuit Design (ICDC) division therefore will take over the
management of manufacturing outsourcing and continue with the design and
marketing of the SAMES product range.
The existing premises and plant will potentially be used for a variety of other
ventures. 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;
- a Pharmaceutical formulation facility; and
- a Medical diagnostic manufacturing facility.
Potential partners for these new ventures have been identified and discussions
are taking place with a view to rolling out these new businesses in the
immediate future. Negotiations are taking place with various funders including
Man Ferrostaal in order to restructure the balance sheet for the way forward.
Accounting Policies
The interim results have been prepared in accordance with the group`s accounting
policies which have been consistently applied and comply with International
Financial Reporting Standards ("IFRS") and IAS 34 (Interim Financial Reporting)
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
period ended 31 August 2009.
Cautionary announcement
On 15 September 2009 a cautionary announcement was issued advising shareholders
to exercise caution when dealing in the company`s shares. Shareholders are
advised to continue to exercise caution when dealing in the company`s shares
until a further announcement is made, which announcement is expected to be made
within the next 2 weeks.
Dividends
In line with group policy, no dividend has been declared.
For and on behalf of the board.
B G VAN ROOYEN
Chairman
13 October 2009
Directors: B G van Rooyen, D J O`Neill, V J Labat*, R. Mohamed
* Non-executive
Registered Office
23 Kroton Avenue
Weltevreden Park, 1709
Private Bag X09-248
Weltevreden Park, 1715
Transfer secretaries
Computershare Investor Services (Proprietary) Limited
70 Marshall Street
Johannesburg
2001
P O Box 61051
Marshalltown, 2107
Auditors
Ngubane Zeelie Inc.
Zeelie Office Park
381 Ontdekkers Road
Florida Park, Extension 3
Sponsor
Vunani Corporate Finance
Date: 13/10/2009 16:00:15 Produced by the JSE SENS Department.
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