| Fri 30 Oct 2009, 17:18 | | BCH - Best Cut - Reviewed Condensed Consolidated Results For The Period |
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BCH
BCH
BCH - Best Cut - Reviewed Condensed Consolidated Results For The Period
Ended 30 June 2009
Best Cut Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1989/001319/06)
JSE Code: BCH & ISIN: ZAE000105391
("Best Cut", "the Group" or "the company")
Reviewed Condensed Consolidated Results for the period ended 30 June 2009
Consolidated Income Statement
for the period ended 30 June
Reviewed Audited
June 2009 June 2008
12 Months 9 months
R`000 R`000
Revenue 73 291 96 828
Cost of sales (49 544) (60 492)
Gross profit 23 747 36 336
Other income 2 520 182
Operating expenses (33 337) (28 452)
Loss/(profit) from operations before
depreciation and amortisation (7 070) 8 066
Depreciation and amortisation (960) (1 596)
(Loss)/profit from operations before
net finance costs (8 030) 6 470
Finance costs (5 172) (1 379)
Finance income 11 44
(Loss)/profit before tax (13 191) 5 135
Taxation 1 075 (1 607)
(Loss)/profit for the period (12 116) 3 528
Shares in issue 127 357 127 365
(Loss)/earnings (12 116) 3 528
Weighted average number of shares in issue 127 357 118 017
(Loss)/earnings per share - basic and
diluted (9,51) 2,99
Headline (loss)/earnings per share - basic
and diluted (11,49) 2,99
Reconciliation of (loss)/earnings and
headline (loss)/earnings
(Loss)/earnings attributable to ordinary
shareholders (12 116) 3 528
Shareholder`s loan written off (2 520) -
(Loss)/earnings (14 636) 3 528
Consolidated balance sheet
as at 30 June
Reviewed Audited
June 2009 June 2008
R`000 R`000
ASSETS
Non-current assets 20 137 41 527
Property, plant and equipment 16 139 37 885
Intangible assets 3 998 3 642
Current assets 31 945 29 508
Trade and other receivables 9 468 14 756
Loans receivable 19 994 8 334
Inventory 2 069 4 919
Cash and cash equivalents 414 1 499
TOTAL ASSETS 52 082 71 035
EQUITY AND LIABILITIES
Capital and reserves 13 632 25 748
Share capital 178 178
Share premium 27 594 27 594
Non-distributable reserves 828 828
Capital redemption fund 48 48
Accumulated loss (15 016) (2 900)
Non-current liabilities 15 587 22 678
Long-term borrowings 5 937 9 991
Shareholders loans 9 650 11 183
Deferred tax - 1 504
Current liabilities 22 863 22 609
Trade and other payables 14 890 13 455
Short-term borrowings 7 850 7 787
Taxation payable 103 103
Bank overdraft 20 1 264
TOTAL EQUITY AND LIABILITIES 52 082 71 035
Net asset value per share (cents) 10,7 20,2
Net tangible asset value per share (cents) 7,6 17,4
Number of shares in issue (000) 127 357 127 357
Consolidated cash flow statement
for the period ended 30 June
Reviewed Audited
June 2009 June 2008
R`000 R`000
Cash (utilised)/generated from operating
activities (3 720) 5 485
Cash received from customers 70 833 95 993
Cash paid to suppliers and employees (69 392) (89 174)
Cash generated from operations 1 441 6 819
Finance costs (5 172) (1 379)
Finance income 11 45
Cash flows from investing activities (634) (28 430)
Purchases of equipment - maintaining
operations (34) (5 288)
Intangible assets (600) (3 642)
Acquisition of subsidiaries - (19 500)
Cash flows from financing activities 4 513 22 762
Issue of shares - 10 184
Listing costs - (6 975)
Proceeds on disposal of property, plant and
equipment 8 217 -
Decrease/(increase) in loans receivable 1 820 (8 333)
(Decrease)/increase in borrowings (5 524) 27 886
Net increase/(decrease) in cash and cash
equivalents 159 (183)
Cash and cash equivalents at beginning of
the period 235 418
Cash and cash equivalents at end of the
period 394 235
Condensed consolidated statement of changes in equity
for the period ended 30 June
Non- Capital Accumu-
distri- Redemp- lated
Share Share butable tion (loss)/
capital premium reserve fund profit Total
R`000 R`000 R`000 R`000 R`000 R`000
Balance at 30
June 2007 126 4 736 828 48 (6 428) (690)
Shares issued 52 29 833 - - - 29 885
Listing costs - (6 975) - - - (6 975)
Net profit for
the period - - - - 3 528 3 528
Balance at
30 June 2008 178 27 594 828 48 (2 900) 25 748
Net loss for
the period - - - - (12 116) (12 116)
Balance at
30 June 2009 178 27 594 828 48 (15 016) 13 632
Segmental information
for the period ended 30 June
The primary segment is defined as those business units providing products that
are subject to risks and returns that are different from those in other
business segments. The segments identified are meat processing and retail. The
secondary segment is the geographical segment which at this point is still
predominantly focussed in KwaZulu-Natal.
2009 Meat
processing Retail Other Total
Revenue
- Total 73 291 - - 73 291
- Intersegment - - - -
- External 73 291 - - 73 291
Segment result (10 550) - - (10 550)
Total assets 40 123 - 20 176 60 299
Total liabilities 19 077 - 19 373 38 450
Capital expenditure (634) - - (634)
Depreciation and amortisation 960 - - 960
2008
Revenue
- Total 96 313 32 047 - 128 360
- Intersegment (21 638) (9 894) - (31 532)
- External 74 675 22 153 - 96 828
Segment result 4 270 2 018 - 6 288
Total assets 51 336 8 708 10 991 71 035
Total liabilities 24 443 9 791 10 127 44 361
Capital expenditure 8 930 - - 8 930
Depreciation and amortisation 961 636 - 1 596
Commentary
The directors hereby announce the reviewed financial results for the 12 months
ended 30 June 2009. The financial results have been reviewed by the Group`s
auditors and an emphasis of matter paragraph was included in the auditors
report relating to going concern. The reviewed consolidated financial results
were approved by the Board on 30 October 2009.
Nature of Business
Best Cut`s operations following the Variation of Conditions of Sale as set out
below is primarily that of meat processor and distributor to the catering,
wholesale and retail trade.
Basis of preparation
The reviewed consolidated financial results has been prepared in accordance
with International Financial Reporting Standards (IFRS), the Listings
Requirements of the JSE Limited and the requirements of the South African
Companies Act 1973 as amended. This report has been prepared in accordance
with International Accounting Standards. The accounting policies are
consistent with those used in the annual financial statements for 30 June
2008.
Variation of Conditions of Sale
Best Cut has entered into an agreement on 3 December 2008 to cancel specific
sales agreements entered into on 13 June 2007. Further details are included in
the SENS announcement dated 29 December 2008. In terms of this agreement
certain of the businesses acquired are taken back by the vendor. The rational
for the transaction is that these businesses are at an early stage of
development and have thus required constant capital investment which has
placed strain on the cash resources of Best Cut. Furthermore, Best Cut has
been unable to place the shares issued to the vendor, in terms of the sale
agreement with other investors, thereby precluding the vendor from realising
the purchase consideration in cash. A circular will be issued to shareholders
in this regard.
The results of operations, financial position, assets and liabilities related
to the specific operations have been excluded from the financial statements as
the agreement was effective 1 July 2008.
Borrowings
During the 12 months under review the short-term portions of the loans payable
to Natal Landbou Ko-Op Bpk amounting to R8,5 million including interest were
repaid. Best Cut entered into a financing agreement with Journey Finance
whereby certain assets were sold and leased back. Best Cut entered into a
factoring agreement with Merchant Factors under which a significant portion of
the debtors book has been factored in order to improve cash flow. A R3 million
loan was obtained in terms of financing Best Cut`s operation in the second
half of the reporting period.
Financial Review
The Group has been negatively impacted by the world wide credit squeeze that
resulted in suppliers to the Group becoming more conservative in terms of
their credit limits and credit terms. The period under review saw large
increases in the cost of raw material and strained consumer spending, the drop
in sales and cost increases placed the gross margin under pressure. The
cumulated effect placed the Group under tremendous pressure in terms of
profitability and cash flow.
Operational Review
The restructuring of the Group has continued and will be complete by the date
of publishing these results. Changes were made in terms of management
structures, segregation of duties, logistics and distribution, cash cycle
management and financial control. The results should be improved operational
effectiveness, efficiency and improved financial performance.
BUSINESS COMBINATIONS
In terms of an agreement with the vendor, certain of the businesses acquired
from the vendor in terms of the sale agreement dated 13 June 2007, have been
taken back by the vendor with effect from 1 July 2008. See the variation of
conditions of sale paragraph for more information. Details of the net assets
disposed of are as follows:
R`000
Property, plant and equipment 12 248
Trade and other receivables 7 746
Inventories 2 244
Cash and cash equivalents 1 525
Trade and other payables (8 631)
Loans (1 652)
Net asset value of businesses disposed 13 480
Purchase consideration
Loan account raised 13 480
Dividends
No dividend has been declared for this reporting period.
Appointment of Auditors
As the Group`s previous auditors, Van Dyk & Associates were not approved by
the JSE in terms of the new JSE requirements, the Group appointed Ngubane
Zeelie Incorporated as auditors, effective from15 April 2009.
Renewal of Cautionary Announcement
Shareholders are referred to the previous cautionary announcements,
the last of which was dated 12 August 2009, and are advised that
negotians are still in progress which, if successfully concluded, may have
an effect on the price of Best Cut`s securities. Accordingly, shareholders are
advised to continue to exercise caution when dealing in the company`s
securities until a further announcement is made.
Going Concern
The directors are of the opinion that the Group will be a going concern in the
year ahead, taking into account the finance negotiated with third parties and
further negotiations with a Contract Manufacturer relating to contract
manufacturing and financial assistance of up to R6 million, as well as
improvements in management structures and financial controls.
Post Balance Sheet Event
The Group entered into a contract manufacturing agreement to improve working
capital and cash flow. This agreement allows the Group to focus on its
production capability and should assist the group to return to profitability
in the near future.
For and on behalf of the Board
JV Swart
Chairman
30 October 2009
Corporate information
Non executive JV Swart (Chairman), NV Makhani (Mrs)
directors:
Executive directors: TJ Hill (Chief Executive Officer),
G Barnard (Financial Director)
Registered address: 24A 18th Street, Menlo Park, 0081
Postal address: PO Box 397, Menlyn, 0063
Company secretary: Morestat Corporate Services (Pty) Limited
Transfer secretaries: Computershare Investor Services (Pty) Limited
Auditors: Ngubane Zeelie Incorporated
Sponsor: PSG Capital (Pty) Limited
Date: 30/10/2009 17:18:04 Produced by the JSE SENS Department.
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implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
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