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MKX
MKX
Milkworx - Abridged Unaudited Maiden Interim Financial Results For The Six
Months Ended 31 December 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")
ABRIDGED UNAUDITED MAIDEN INTERIM FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31
DECEMBER 2005
Balance sheets
Unaudited Audited Unaudited
31 Dec 2005 30 Jun 2005 31 Dec 2004
R"000 R"000 R"000
ASSETS
Non-current assets 21 492 22 852 19 338
Property, plant and 20 920 21 941 18 841
equipment
Intangible assets 568 568 -
Deferred taxation 4 343 497
Current assets 19 690 15 589 19 410
Inventories 8 950 8 025 6 628
Trade and other 9 260 7 188 10 995
receivables
Cash and cash equivalents 1 480 376 1 787
Total assets 41 182 38 441 38 748
EQUITY AND LIABILITIES
Capital and reserves 24 205 22 834 18 626
Share capital 5 453 5 453 4 907
Share premium 15 353 15 353 12 898
Retained income/(loss) (11 111) (12 482) (13 689)
Non-distributable reserves 14 510 14 510 14 510
Non-current liabilities 4 371 4 805 6 913
Negative goodwill - - 739
Long-term liabilities 1 591 1 990 1 804
Shareholders loans 2 780 2 815 4 160
Loans payable - 210
Current liabilities 12 606 10 802 13 209
Trade and other payables 8 413 6 491 12 188
Bank overdraft 3 037 3 058 665
Provision and accruals 252 326 -
Short-term portion of 904 927 356
liabilities
Total equity and 41 182 38 441 38 748
liabilities
Net asset value per share 4.4 4.2 3.8
(cents)
Net tangible asset value 4.3 4.1 3.8
per share (cents)
Closing number of shares 545 248 545 248 490 702
("000)
Income statements
Unaudited Audited Unaudited
6 Months 12 Months 6 Months
ended ended ended
31 Dec 2005 30 Jun 2005 31 Dec 2004
R"000 R"000 R"000
Revenue 43 058 67 794 37 525
Cost of sales (27 527) (48 863) (21 442)
Gross profit 15 531 18 931 16 083
Other income 77 781 775
Amortisation of negative - 1 348 82
goodwill
Operating expenses (13 586) (17 585) (15 043)
Profit before interest and 2 022 3 475 1 897
taxation
Finance charges (311) (367) (150)
Profit before taxation 1 711 3 108 1 747
Taxation (340) (478) (325)
Net profit for the period 1 371 2 630 1 422
Reconciliation between earnings and headline earnings
Earnings per share (cents) 0.25 0.50 0.29
Profit on sale of assets - (0.01) (0.01)
(cps)
Profit on debt written off (0.01) (0.12) (0.06)
and settled (cps)
Amortisation of goodwill - (0.27) (0.02)
(cps)
Headline earnings per 0.24 0.1 0.20
share (cents)
Weighted average number of 545 248 499 793 490 702
shares ("000)
CASH FLOW statements
Unaudited Audited Unaudited
6 Months 12 Months 6 Months
ended ended ended
31 Dec 2005 30 Jun 2004 31 Dec 2004
R"000 R"000 R"000
Cash flows from operating 2 279 ( 4 263) 5 684
activities
Cash flows from investing (721) (1 405) (20 804)
activities
Cash flows from financing (433) 2 984 16 240
activities
Net movement in cash and 1 125 (2 684) 1 120
cash equivalents
Cash and cash equivalents (2 682) 2 2
at beginning of period
Cash and cash equivalents (1 557) ( 2 682) 1 122
at end of period
Statements OF CHANGES IN EQUITY
Share Share Non- Accumulated Total
capital premium distributable Profit R"000
R"000 R"000 reserve R"000
R"000
Balance at 1 Jul 1 083 5 047 14 408 (15 112) 5 427
2004
Cancellation of (102) - 102 - -
shares
Issue of shares 4 472 10 306
Net profit for - - - 2 630 11 777
the period
Balance at 1 Jul 5 453 15 353 14 510 (12 482) 22 834
2005
Net profit for - - - 1 371 -
the period
Balance at 31 5 453 15 353 14 510 (11 111) 24 205
Dec 2005
COMMENTARY
Financial and operational overview
The board is pleased with the interim results for the six months ended 31
December 2005, as the results were in line with forecasts made.
In the circular to shareholders, dated 24 August 2004, the board of directors
made a two-year profit forecast of R2.95 million, which is for the full
financial year ending 30 June 2006. The net profit for the six months ended 31
December 2005 was 7% lower than previously forecasted.
The gross profit margin for the six months increased from 28% to 36%, due to a
price increase on products since October 2005.
The company has shown a steady growth and an increased market share.
A number of factors contributed to the steady growth in turnover, including:
- maintaining a consistent growth in the supermarket trade while servicing
the existing client base;
- extending Milkworx Ltd"s geographical reach by continuing growth in both
Nelspruit and Pietersburg, which distribute stock to supermarkets in the area.
securing a contract with a multinational group country wide with promising
turnover and profit levels.
Prospects
The board, during the six month period decided to increase the fleet and to
acquire an additional freezer room to satisfy the increased demand. The board
of directors believes that this capital expenditure will enhance effective
distribution and lead to potentially increased profits.
Milkworx Ltd is currently looking into expanding its activities by negotiating
contracts with multinational organisations, which will effectively enable the
company to expand both informal and supermarket sectors of the market.
The board of directors is of the opinion that the above will lead to
satisfactory growth in earnings for the current financial year.
Accounting policies
The accounting policies of the company comply in all material respects with
South African Statements of Generally Accepted Accounting Practice, the
Companies Act of 1973 and International Financial Reporting Standards. The
accounting policies and methods of measurement and recognition are consistent
with those applied in the previous financial period.
Dividends
No dividends were recommended or declared for the interim period.
5. Cautionary Announcement
Shareholders are advised that the company has entered into negotiations, which
if successfully concluded may have a material effect on the price of the
company"s securities. Accordingly, shareholders are advised to exercise caution
when dealing in Milkworx"s securities until a full announcement is made.
For and on behalf of the board
Stephan Roux
Chief Executive Officer
31 March 2006
Directors: SA Roux, T Dajcar, P van Heerden, AL Cruickshank*, D Thomas*
(*non-executive)
Transfer secretaries Registered address
Computershare Investor Services 2004 (Pty) Ltd 167 Alumina Street,
Silvertondale, Pretoria
Designated Advisor
River Sponsors (Pty) Ltd
Date: 03/04/2006 07:35:50 AM Produced by the JSE SENS Department
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