|
BEG
BEG
BEG - Beige - Unaudited Group Results For The Six Months Ended
30 September 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")
UNAUDITED GROUP RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2009
The board presents its unaudited results for the six months ended 30
September 2009 below, together with audited results for the year ended 31
March 2009 and unaudited restated results for the six months ended 30
September 2008.
Condensed consolidated balance sheets as at 30 September 2009
Unaudited six Audited Unaudited and
months ended 31 March 2009 restated six months
30 September ended
2009 30 September 2008
R`000 R`000 R`000
ASSETS
Non-current assets 262 160 263 503 261 044
Property, plant and 139 467 139 909 137 762
equipment
Intangible assets 105 992 107 179 108 707
Deferred income tax 14 575
assets 16 701 16 415
Current assets 205 340 202 917 215 677
Inventories 86 787 70 720 73 961
Trade and other 136 195
receivables 114 245 122 792
Cash and cash equivalents 5 521
4 308 9 405
Total assets 467 500 466 420 476 721
EQUITY AND LIABILITIES
Capital and reserves 195 238
attributable to equity
holders of the company 209 783 201 472
Ordinary share capital 15 968 16 011 16 885
Ordinary share premium 274 088 274 476 280 603
Reserves 10 842 10 842 10 734
Accumulated loss (91 115) (99 857) (112 984)
Non-current liabilities 93 173
70 070 76 545
Long-term borrowings 67 886 71 657 74 547
Call option liability 206 2 362 15 298
Deferred income tax 3 328
liabilities 1 978 2 526
Current liabilities 187 647 188 403 188 310
Trade and other payables 121 495 117 986 124 680
Current portion of long- 26 426
term borrowings 25 985 32 561
Current income tax 8 533
liabilities 5 425 7 777
Bank overdrafts 34 742 30 079 28 671
Total liabilities 257 717 264 948 281 483
Total equity and 476 721
liabilities 467 500 466 420
Condensed consolidated statements of comprehensive income for the six
months ended 30 September 2009
Unaudited six Audited Unaudited and
months ended 31 March 2009 restated six months
30 September ended
2009 30 September 2008
R`000
R`000 R`000
Revenue 278 893 599 020 303 553
Cost of sales (221 259) (480 304) (237 020)
Gross profit 57 634 118 716 66 533
Distribution costs
(6 945) (12 068) (6 178)
Administrative
expenses (34 917) (75 700) (37 382)
Operating profit
15 772 30 948 22 973
Gain on the re-
measurement of call
option liability
(Note 1)
2 156 14 917 1 981
Profit before
finance costs 17 928 45 865 24 954
Finance income 165 1 657 2 250
Finance costs (6 856) (11 982) (5 256)
Profit before income
tax 11 237 35 540 21 948
Income tax expense
(2 495) (6 477) (6 012)
Total comprehensive
income for the
period
8 742 29 063 15 936
Total comprehensive
income attributable
to:
Equity holders of
the company
8 742 29 063 15 936
Earnings per share
(cents):
- basic (Note 2 )
0.55 1.74 0.95
- diluted (Note 2
and 3) 0.55 1.73 0.89
Additional
information
Headline earnings
(R`000)
8 742 29 063 15 936
Headline earnings
per share (cents)
- basic (Note 2 )
- diluted (Note 2 0.55 1.74 0.89
and 3)
0.55 1.73 0.89
Net asset value per
share (cents)
13.14 12.04 11.59
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 initial classification to a debt
instrument, amounting to R13.5 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
R0.2 million. As a result, Beige has recorded a gain of R2.2 million
in profit and loss, due to the decrease in the Beige share price as at
30 September 2009.
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 1 979
212 (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 period and 99 999 998 dilutive
ordinary shares in the prior period.
Group statement of changes in equity for the six months ended 30 September
2009
Ordinary Ordinary Ordinary Preference Preference
share treasury share share share
capital shares premium capital premium
R`000 R`000 R`000 R`000 R`000
Balance at 31
March 2008
as previously 16 885 -- 280 603 143 14 857
reported
Prior year
adjustments -
Income statement -- -- -- (143) (14 857)
Prior year
adjustments -
Equity -- -- -- -- --
Restated balance
at 31 March 2008 16 885 -- 280 603 -- --
Employee share
options scheme: -
Value of employee
services -- -- -- -- --
Total
comprehensive
income -- -- -- -- --
Balance at 30
September 2008 16 885 -- 280 603 -- --
Prior period
adjustments -- -- -- -- --
Restated balance
at 30 September
2008 16 885 -- 280 603 -- --
Treasury shares
held by subsidiary
-- (874) (6 127) -- --
Employee share
options scheme: -
Value of employee
services -- -- -- -- --
Total
comprehensive
income -- -- -- -- --
Balance at 31
March 2009 16 885 (874) 274 476 -- --
Treasury shares
held by subsidiary
-- (43) (388) -- --
Total
comprehensive
income -- -- -- -- --
Balance at 30
September 2009 16 885 (917) 274 088 -- --
Table continued
Reserves Accumulated loss Total
(See table below) (See table below)
R`000 R`000 R`000
Balance at 31 March
2008 as previously
reported 10 965 (87 731) 235 722
Prior year
adjustments - Income
statement (17 766) (26 262) (59 028)
Prior year
adjustments - Equity
-- 2 500 2 500
Restated balance at
31 March 2008 (6 801) (111 493) 179 194
Employee share
options scheme: -
Value of employee
services 108 -- 108
Total comprehensive
income -- 15 999 15 999
Balance at 30
September 2008 (6 693) (95 494) 195 301
Prior period
adjustments -- (63) (63)
Restated balance at
30 September 2008 (6 693) (95 557) 195 238
Treasury shares held
by subsidiary -- -- (7 001)
Employee share
options scheme: -
Value of employee
services 108 -- 108
Total comprehensive
income -- 13 127 13 127
Balance at 31 March
2009 (6 585) (82 430) 201 472
Treasury shares held
by subsidiary -- -- (431)
Total comprehensive
income -- 8 742 8 742
Balance at 30
September 2009 (6 585) (73 688) 209 783
Group statement of changes in equity for the six months ended 30 September
2009 - continued
Reserves
Revaluation Share Distributable Total
reserve based reserve - reserves
payments preference
reserve share option
R`000
R`000 R`000
R`000
Balance at 31 March 2008 9 202 1 763 -- 10 965
Prior year adjustments - (339) -- (17 427) (17 766)
Income Statement
Restated balance at 31 8 863 1 763 (17 427) (6 801)
March 2008
Employee share option
scheme:
Value of employee -- 108 -- 108
services
Balance at 30 September 8 863 1 871 (17 427) (6 693)
2008
Employee share option
scheme:
Value of employee -- 108 -- 108
services
Balance at 31 March 2009 8 863 1 979 (17 427) (6 585)
Balance at 30 September 8 863 1 979 (17 427) (6 585)
2009
Condensed consolidated statement of cash flows for the six months ended 30
September 2009
Unaudited Audited Unaudited
six months 31 March and restated
ended 2009 six months
30 September ended
2009 30 September
R`000 R`000 2008
R`000
Cash operating profit 20 514 41 904 19 800
Increase in inventories (16 068) (2 606) (5 850)
(Increase)/decrease in trade (12 289)
and other
receivables (8 547) 1 114
Increase/(decrease) in trade (9 238)
and other
payables 2 044 (15 876)
Cash generated from /(utilised (7 577)
in) operating activities 15 037 24 536 (1 815)
Net interest paid (5 738) (8 337)
(3 694) (3 230) (1 329)
Income tax paid
Net cash generated from 5 605 12 969 (10 721)
/(utilised in) operating
activities
Net cash used in investing (4 065) (49 814) (41 636)
activities
Acquisition of subsidiary, net -- (19 962) (19 962)
of cash acquired
Purchases of property, plant (4 065) (29 852) (21 674)
and equipment
Net cash generated for 1 540 (36 845) (52 357)
/(utilised in) the period
Cash (used in)/generated by (11 300) (7 890) 5 146
financing activities
Purchase of treasury shares -- (7 000) --
(Decrease)/increase in (11 300) (890) 5 146
borrowings
Net decrease in cash and cash (9 760) (44 735) (47 211)
equivalents
Cash, cash equivalents and bank 24 061
overdrafts at beginning of (20 674) 24 061
period
Cash, cash equivalents and bank (23 150)
overdrafts at end of period (30 434) (20 674)
Segmental analysis for the six months ended 30 September 2009
Outsource
manufacturing Packaging Other Group
R`000 R`000 R`000 R`000
Segment revenue
- Unaudited six months
ended 30 September 2009
Total 225 709 61 710 9 042 296 461
Intersegment revenue (6 957) (1 569) (9 042) (17 568)
Revenue (from 218 752 60 141 -- 278 893
external customers)
- Audited as at 31 March
2009
Total 521 919 100 589 -- 622 508
Intersegment revenue (17 481) (6 007) -- (23 488)
Revenue (from 504 438 94 582 -- 599 020
external customers)
- Unaudited six months
ended 30 September 2008
Total 281 098 37 330 -- 318 428
Intersegment revenue (14 875) -- -- (14 875)
Revenue (from 266 223 37 330 -- 303 553
external customers)
Segment operating
profit/(loss)
- Unaudited six months
ended 30 September 2009 14 044 1 405 323 15 772
- Audited as at 31 March
2009 38 701 (7 772) 19 30 948
- Unaudited six months
ended 30 September 2008 31 886 (3 732) (5 181) 22 973
Segment profit/(loss)
before taxation
- Unaudited six months
ended 30 September 2009 10 000 154 1 083 11 237
- Audited as at 31 March
2009 35 197 (11 279) 11 622 35 540
- Unaudited six months
ended 30 September 2008 30 887 (5 385) (3 554) 21 948
Segment assets
- Unaudited six months
ended 30 September 2009 285 958 142 322 39 220 467 500
- Audited as at 31 March
2009 308 508 153 752 4 160 466 420
- Unaudited six months
ended 30 September 2008 312 821 136 674 27 226 476 721
Segment liabilities
- Unaudited six months
ended 30 September 2009 126 675 49 983 81 059 257 717
- Audited as at 31 March
2009 169 468 47 644 47 836 264 948
- Unaudited six months
ended 30 September 2008 143 143 51 420 86 920 281 483
COMMENTARY
The directors of Beige are pleased to announce the unaudited consolidated
group results for the six months ended 30 September 2009.
1. Nature of business
Beige is a registered holding company operating through thirteen
subsidiaries. The Beige group primarily operates as a contract and
packaging manufacturer, manufacturing and distributing cosmetics, soaps,
laundry soaps, packaging and allied products on behalf of brand owners for
both the local and international home and personal care industry and is the
largest fully empowered contract manufacturer in the South African home and
personal care industry.
2. Listing information
Beige is listed on the Alternative Exchange ("AltX") of the JSE Limited
under the share code: BEG. The company`s ISIN number is ZAE 000034161.
3. Basis of preparation
The condensed results have been prepared in accordance with IAS 34 -
Interim Financial Reporting. Except as described below, the accounting
policies applied are consistent with those of the annual financial
statements for the year ended 31 March 2009, as described in those annual
financial statements.
The following new standards and amendments to standards are mandatory for
the first time for the financial year beginning 1 April 2009.
- IAS 1 (revised), `Presentation of financial statements`. The revised
standard prohibits the presentation of items of income and expenses
(that is `non-owner changes in equity`) in the statement of changes in
equity, requiring `non-owner changes in equity` to be presented
separately from owner changes in equity. All `non-owner changes in
equity` are required to be shown in a performance statement.
Entities can choose whether to present one performance statement (the
statement of comprehensive income) or two statements (the income
statement and statement of comprehensive income).
The group has elected to present one statement: the statement of
comprehensive income. The interim financial statements have been
prepared under the revised disclosure requirements.
- IFRS 8, `Operating segments`. IFRS 8 replaces IAS 14, `Segment
reporting`. It requires a `management approach` under which segment
information is presented on the same basis as that used for internal
reporting purposes. This has resulted in no increase in the number of
reportable segments presented.
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker. The
chief operating decision-maker has been identified as the board of
directors that makes strategic decisions.
4. Segment reporting
The chief operating decision-maker has been identified as the board of
directors. The board reviews the group`s internal reporting in order to
assess performance and allocate resources. Management has determined the
operating segments based on these reports. The board considers the business
from a product perspective, from which management assesses the performance
of outsource manufacturing and packaging products.
5. Business review
During the period under review most of the operating units have performed
worse than the prior comparative period, given the difficult trading
conditions that are currently being experienced in the local and
international retail trading environment. The exception has been Crystal
Pack Pty Ltd ("Crystal Pack") which has shown a significant turnaround from
the prior year comparative period. Beige has made additional investments
in infrastructure and capacity and both the Durban and Johannesburg
operations have been expanded, in expectation of the future growth in
demand for the goods and services that it provides.
These initiatives all formed 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.
The results of Rap Products (Pty) Ltd ("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.
6. Prior year adjustment
The following restatements in respect of prior period adjustments can be
summarised as follows:
GROUP Note Admin Finance Tax Embedded Transferred
expenses cost R`000 call to equity
R`000 R`000 option R`000
R`000
Adjustments to
prior period income
statement
increase/(decrease)
in profit
Amortisation of a 1 187 -- -- -- 1 187
customer
relationships
Fair value a -- 1 002 (280) -- 722
adjustments on
acquisition of
business and
expenses restated
Gain on re- b -- 188 (53) (1 981) (1 846)
measurement of an
embedded conversion
option liability
Adjustments 1 187 (333) (1 981) 63
1190
GROUP Note Equity Intangibles
R`000 R`000
Adjustments to prior
period balance sheet
increase/(decrease) in
assets and liabilities
Amortisation of customer a -- (1 187)
relationships
Fair value adjustments on a -- --
acquisition of business
and expenses restated
Deficit in fair value of b -- --
preference share and
option liability
Adjustment to 2008 income 63 --
transferred to equity
Adjustments 63 (1 187)
Table continues:.
Preference share Borrowings Deferred tax
option R`000 R`000
R`000
-- -- --
-- (1 002) 280
1 981 (188) 53
-- -- --
1 981 (1 190) 333
Notes:
a. As part of business combinations previously acquired by the group
(Quality Products (Pty) Ltd ("Quality Products"), 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.
b. In the previous financial year the company issued to its ordinary
shareholders a capitalisation award 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. Beige has re-measured the embedded call
option liability to fair value at 31 March 2008 at R17.3 million.
7. Financial and operational overview
The board presents the results for the first six months of the year to 30
September 2009. These results show a decrease in operating profit of 31%,
compared to the six month period ended 30 September 2008, and a 45% decline
in earnings, from earnings of R15.9 million to R8.7 million for the
period.
Turnover decreased from R303.6 million in the comparative period to R278.9
million for the period under review, a decrease of 8%. The gross profit
margin has decreased to 21% compared to 22% for the comparative period, but
is slightly up compared to the gross profit margin percentage for the full
year to March 2009.
Distribution costs have increased by 12% due mainly to the inclusion of a
full six months of distribution costs for Rap in the current period,
compared to only one month in the prior comparative period. Administration
costs have decreased by nearly 7%. This decrease in costs was primarily due
to increased focus on cost reduction throughout the group. This is even
more significant in that Rap has been consolidated for the full period
under review, compared to prior period when it was only consolidated for
September 2008.
The performance of Crystal Pack has been encouraging with the business
having been turned around during the six months under review. In addition,
the integration of the Rap manufacturing facilities into the Crystal Pack
facility was successfully achieved during the period and Rap management
have taken over the management of the joint operations from July 2009 and a
new general manager has been appointed.
For the six months ended 30 September 2009, Rap contributed R1 389 000 (one
month ended 30 September 2008: R396 000) in net profit after tax.
Overall the group is in a much stronger position than in the comparative
period as represented by a stronger balance sheet, with tangible net asset
value increasing by 20% from that of the prior comparative period.
8. Prospects
The company is now entering its traditionally busier season, but the
slowdown in the economic activity could have an effect on the second half
of the year. The consolidation of Crystal Pack and Rap and the
strengthening of its management should see synergies and cost benefits
realising in due course.
9. Acquisitions
The company acquired 51% of Herbal & Homeopathic (Pty) Ltd, for an amount
of R3 million settled in cash, which company contract manufactures nutri-
ceutical products. This acquisition will be effective from 01 October 2009
and 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. If the acquisition had occurred on 01 April 2009, the group
revenue would have been R15.5 million more, and operating profit would have
been R50,260 more.
Group
Details of the purchase consideration and net 2009
assets acquired are as follows:
R` 000
Purchase consideration:
- Cash paid 3 000
- Direct costs relating to the acquisition -
Total purchase consideration 3 000
The carrying values of assets and liabilities
as of 1 October 2009 arising from the
acquisition are as follows:
Acquiree`s
carrying
amount
R` 000
Property, plant and equipment 6,625
Deferred tax asset 1,712
Inventories 2,407
Accounts receivable 6,977
Cash 28
Long term borrowings (1,855)
Short term portion of borrowings (958)
Accounts payable (5 300)
Tax payable (2 463)
Carrying value of net assets 7 173
Non controlling interest 3 586
Controlling interest 3,587
Excess of net assets acquired over purchase (587)
consideration to be allocated
Total purchase consideration 3 000
As required by IFRS 3, the company will be
performing a purchase price allocation within
12 months from acquisition date.
10. 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.
11. Dividends
The second preference dividend of 8.40 cents per share was recently
announced on SENS and was paid to all preference shareholders recorded in
the preference share register of the company at the close of business on
Friday, 25 September 2009. This dividend was in respect of a capitalisation
award of redeemable, convertible, cumulative 8% preference shares made to
ordinary shareholders, prior to the issue of shares to the vendors of
Crystal Pack.
No ordinary dividends are proposed for the period.
12. Changes to the board
There have been no changes to the board for the six month period ended 30
September 2009.
13. Cancellation and issue of shares
During the period under review the company has not cancelled nor issued any
shares.
14. Subsequent events
There are no events subsequent to the period end that require reporting.
Herbal & Homeopathic (Pty) Ltd will be included for the first time
following its acquisition with effect from 01 October 2009.
By order of the Board
Monwabisi Fandeso Mark Di Nicola
Chairman Chief Executive Officer
30 October 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* Chairman*; MM Di Nicola Chief Executive Officer;
MC Easter Financial Director; MM du Preez*; LI Karp*; RH
Weissenberg*; VP Khanyile*
(* Non-executive)
Designated Advisor Transfer Office
Arcay Moela Sponsors Link Market Services South
(Proprietary) Limited Africa (Pty) Ltd
2 November 2009
Date: 02/11/2009 08:43:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
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,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
| Profile Group (Pty) Ltd. has taken care in preparing all information on this website, but does not accept any liability for errors or out-of-date information. | |||||||||||||
| Other Profile Group sites: FundsData Online (unit trust data) | Profile Group corporate site | |||||||||||||
| [ Terms of Use | Privacy Policy | PAIA manual | FAQs/Help | Site Map | © Copyright Reserved 2026 ] | |||||||||||||
|
|||||||||||||
