| Thu 13 Oct 2005, 17:01 | | Milkworx - Audited Results For The Twelve Months E |
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Milkworx - Audited Results For The Twelve Months Ended 30 June 2005
Milkworx Limited
(Previously Acuity Group Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1998/011074/06)
Share code: MKX ISIN: ZAE000058020
("Milkworx" or "the company")
AUDITED ANNUAL RESULTS FOR THE YEAR ENED 30 JUNE 2005
BALANCE SHEET
Audited Unaudited Audited
as at as at as at
30 Jun 31 Dec 30 Jun
2005 2004 2004
R"000 R"000 R"000
ASSETS
Non-current assets 22 851 19 338 822
Property, plant and equipment 21 940 18 841 -
Intangible assets 568
Deferred tax 343 497 822
Current assets 15 587 19 410 5 460
Inventories 8 024 6 628 -
Trade and other payables 7 188 10 995 5 458
Cash and cash equivalents 375 1 787 2
Total assets 38 439 38 748 6 282
EQUITY AND LIABILITIES
Capital and reserves 22 833 18 626 5 427
Issued capital 5 454 4 907 1 083
Share premium 15 351 12 898 5 047
Non-distributable reserves 14 510 14 510 14 408
Accumulated loss (12 482) (13 689) (15 111)
Non-current liabilities 4 804 6 913 210
Non-interest bearing 2 814 1804 -
liabilities
Interest bearing Liabilities 1 990 4 160 -
Negative goodwill - 739 -
Current liabilities 10 801 13 419 855
Loans payable - 210 210
Trade and other payables 6 491 12 188 645
Current portion of liabilities 926 356 -
Bank overdraft 3 057 665 -
Provisions 327
Total equity and liabilities 38 263 38 748 6 282
Net asset value per share 4.2 3.8 4.3
(cents)
Net tangible asset value per 4.1 3.8 4.3
share (cents)
Closing number of shares 545 246 490 702 108 315
(`000)
INCOME STATEMENTS
Audited Unaudited Audited
12months 6months 15months
Ended Ended Ended
30 Jun 31 Dec 30 Jun
2005 2004 2005
R"000 R"000 R"000
Revenue 67 794 37 525 -
Cost of sales (48 862) (21 442) -
Gross profit 18 931 16 083 -
Other income 2 121 857 5 989
Operating expenses (24 519) (15 043) (296)
Net profit before interest and 3 467 1 897 5 693
taxation
Finance charges (359) (150) (5)
Net profit before taxation 3 108 1 747 5 688
Taxation (478) (325) 822
Net profit for the period 2 630 1 422 6 510
Reconciliation between earnings and headline earnings
per share
Earnings per share (cents) 0.59 0.29 6.01
Profit/(loss) on disposal and (0.10) (0.01) (0.86)
impairment of plant and
equipment
Profit on debt written-off and (0.04) (0.06) (0.30)
settled
Negative goodwill recognized (0.30) (0.02) -
in the income statement
Headline earnings per share 0.15 0.20 4.85
(cents)
Weighted average number of 449,793 490 702 108 315
shares (`000)
CASH FLOW STATEMENTS
Audited Unaudited Audited
12months 6months 15months
Ended Ended Ended
30 Jun 31 Dec 30 Jun
2005 2004 2005
R"000 R"000 R"000
Cash flows from operating (4 263) 5 684 (407)
activities
Cash flows from investing (1 405) (20 804) (32)
activities
Cash flows from financing 2 984 16 240 50
activities
Net movement in cash and cash (2 684) 1 120 (389)
equivalents
Cash and cash equivalents at 2 2 391
the beginning of the period
Cash and cash equivalents at (2 682) 1 122 2
the end of the period.
STATEMENT IN CHANGES OF EQUITY
Capital Premium Reserve Profit Total
R"000 R"000 R"000 R"000 R"000
Balance at 1 1 083 5 047 14 517 (21 621) (974)
Apr 2003
Net profit for - - - 6 510 6 510
the period
Sale of - - (109) - (109)
subsidiaries
Balance at 1 1 083 5 047 14 408 (15 111) 5 426
Jul 2004
Cancellation (102) - 102 - -
of shares
Issue of 4 471 10 306 - - 14 777
shares
Net profit for - - - 2 630 2 630
the period
Balance at 30 5 452 15 353 14 510 12 481 22 833
Jun 2005
COMMENTARY
1. Financial and operational overview
The directors present the maiden annual results for the year ended 30 June 2005
("the year") for Milkworx, after the acquisition of the ice cream manufacturing,
packaging and trading businesses of Avondale and Cream Star. Shareholders should
therefore take care not to put undue significance on direct comparison with
historical figures.
The profit forecast of Milkworx represents the only appropriate yardstick of the
performance for the year. Against this background, the board is pleased to
announce a net profit of R 2.6 million which is in line with the forecast of
R2,5 million in the circular to shareholders, issued 24 August 2004 in respect
of the acquisition.
Revenue of R 67.7 million exceeded the forecast amount of R 56.5 million with
20% for the year. The growth in turnover underlines the strategic focus of the
directors to grow market share in a controlled fashion and ensure that the new
combined businesses achieve critical mass. A number of factors contributed to
the strong growth in turnover, including:
- acquiring the rights to manufacture, distribute and sell certain of Cas Ice
Cream products, which also opened up access to their existing client base in
Gauteng;
- breaking into the supermarket trade;
extending the company"s geographical reach to Kwa-zulu natal, Mpumalanga and the
Limpopo province.
developing and acquiring new product lines for the retail market
The strategy of the company was focused on establishing a long-term growth
platform which is ultimately defined as optimizing the available production
capacity, benefiting from procurement, achieving greater pricing power and
reducing exposure to specific clients, contracts and product lines. The
immediate impact in creating and sustaining this resulted in an increase in
costs and a decrease in margins. Due to the streamlining of manufacturing
operations, administration and distribution capabilities mainly to create and
sustain the increased turnover capabilities, operating costs were slightly
higher than expected. The biggest contributors to this were the expansion of the
distribution fleet and other related distribution costs, additional labour
overtime requirements and electricity consumption. Other higher than forecast
expenditure items included establishing an infrastructure for new depots and
implementation and finalization of quality control procedures (HACCP approval).
A large portion of these expenditure items are of a non-recurring nature.
2. Basis of preparation
The accounting policies of the company comply in all material respects with
South African Statements of Generally Accepted Accounting Practice and the
Companies Act of 1973. The accounting policies and methods of measurement and
recognition are consistent with those applied in the previous financial period,
except for the adoption of IFRS 3 (AC 140) - Business combinations. In terms of
IFRS 3 (AC 140) negative goodwill is recognized as revenue in the income
statement and no longer amortised and goodwill is no longer amortised but
instead tested for impairment. Shareholders are advised that the company will
adopt International Financial Reporting Standards ("IFRS") with effect from 1
July 2005.
The financial statements have been audited by Compendium (Pretoria) Incorporated
and their unqualified audited opinion is available for inspection at Milkworx"s
registered office.
4. Dividends
In view of anticipated increase in future revenue, resulting in increased levels
of inventory and accounts receivable, working capital needs to be retained
therefore no dividend has been declared and none is recommended.
For and on behalf of the board of directors
SA Roux
Chief Executive Officer
13 October 2005
Warning: Investors are warned that investing in companies listed on ALTx is
speculative in nature and the JSE does not guarantee the viability or success of
the company. In accordance with ALTx"s Listing Requirements, a Designated
Advisor has to be retained by the company. The Designated Advisor is required
to, inter alia, attend all board meetings held by the company to ensure that all
JSE Listing Requirements and applicable regulations are complied with, approve
the financial director of the company and guide the company in a competent,
professional and impartial manner. If the company fails to retain the Designated
Advisor it must make arrangements to appoint a new Designated Advisor within 10
business days, failing which the company faces suspension of trading of its
securities. If a designated advisor is not appointed within 30 days of its
suspension the company faces the termination of its listing without an offer to
minority shareholders.
Date: 13/10/2005 05:01:35 PM Produced by the JSE SENS Department
