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MKX
MKX
MKX - Milkworx Limited - Abridged unaudited maiden interim financial results for
the six months ended 31 December 2006
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 2006
BALANCE SHEETS
Unaudited Unaudited Audited
31 Dec 2006 31 Dec 2005 30 Jun 06
R`000 R`000 R`000
ASSETS
Non-current assets 21 486 21 492 22 573
Property, plant and equipment 19 022 20 920 20 051
Intangible assets 738 568 753
Deferred taxation 1 726 4 1 769
Current assets 22 976 19 690 15 985
Inventories 7 730 8 950 8 367
Trade and other receivables 13 003 9 260 7 421
Cash and cash equivalents 2 243 1 480 197
Total assets 44 462 41 182 38 558
EQUITY AND LIABILITIES
Capital and reserves 19 448 24 205 19 355
Share capital 5 453 5 453 5 453
Share premium 15 353 15 353 15 353
Retained income/(loss) (15 868) (11 111) (15 961)
Non-distributable reserves 14 510 14 510 14 510
Non-current liabilities 4 437 4 371 4 472
Long-term liabilities 1 469 1 591 1 694
Shareholders loans 2 968 2 780 2 778
Current liabilities 20 577 12 606 14 731
Trade and other payables 13 718 8 413 9 320
Bank overdraft 4 501 3 037 2 827
Provision and accruals 334 252 334
Short-term portion of liabilities 2 024 904 2 250
Total equity and liabilities 44 462 41 182 38 558
Net asset value per share (cents) 3.6 4.4 3.6
Net tangible asset value per share (cents)3.4 4.3 3.4
Closing number of shares (`000 545 248 545 248 545 248
INCOME STATEMENTS
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
Ended ended ended
31 Dec 2006 31 Dec 2005 30 Jun 06
R`000 R`000 R`000
Revenue 39 245 43 058 68 847
Cost of sales (29 375) (27 527) (53 499)
Gross profit 9 870 15 531 15 348
Other income 107 77 223
Operating expenses (9 433) (13 586) (19 725)
Profit before interest
and taxation 544 2 022 (4 155)
Finance charges (407) (311) (751)
Profit before taxation 137 1 711 (4 905)
Taxation (43) (340) 1 425
Net profit for the period 94 1 371 (3 480)
Reconciliation between earnings and headline earnings
Earnings per share (cents) 0.02 0.25 (0.6)
Profit on sale of assets (cps)
Profit on debt written off
and settled (cps) - (0.01) -
Impairment of assets - - 0.1
Amortisation of goodwill (cps) - - -
Headline earnings per
share (cents) 0.02 - -
Weighted average number of
shares (`000) 545 248 545 248 545 248
CASH FLOW STATEMENTS
Unaudited Unaudited Audited
6 Months 6 Months 12 Months
Ended ended ended
31 Dec 06 31 Dec 05 30 Jun 06
R`000 R`000 R`000
Cash flows from operating activities 809 2 279 331
Cash flows from investing activities (177) (721) (1 128)
Cash flows from financing activities (260) (433) 849
Net movement in cash and cash equivalents 372 1 125 52
Cash and cash equivalents at
beginning of period (2 630) (2 682) (2 682)
Cash and cash equivalents at end of period (2 258) (1 557) (2 630)
STATEMENTS OF CHANGES IN EQUITY
Share Share Non- Accumulated Total
capital premium distributable Profit
reserve
R`000 R`000 R`000 R`000 R`000
Balance at
1 Jul 2005 5 453 15 353 14 510 (12 482) 22 834
Net profit
for the period (3 479) (3 479)
Balance at
1 Jul 2006 5 453 15 353 14 510 (15 961) 19 355
Net profit
for the period 94 94
Balance at
31 Dec 2006 5 453 15 353 14 510 (15 867) 19 449
SEGMENT RESULTS
Avondale Creamstar Group
6 Months 6 Months 6 Months
Ended ended ended
31 Dec 2006 31 Dec 2006 30 Dec 2006
R`000 R`000 R`000
Revenue
External sales 19 949 22 542 42 491
Internal segment sales 1 490 112 1 602
Total Revenue 21 439 22 654 44 075
Results 1 184 (601) 583
Unallocated expenses (446)
Taxation (43)
Results 94
Avondale Creamstar Group
6 Months 6 Months 6 Months
Ended ended ended
31 Dec 205 31 Dec 2005 30 Dec 2005
R`000 R`000 R`000
Revenue
External sales 16 580 30 849 47 429
Internal segment sales 2 347 99 2 446
Total Revenue 18 927 30 948 49 875
Results 2 348 (127) 2 221
Unallocated expenses (511)
Taxation (339)
Results 1 371
COMMENTARY
1 Financial and operational overview
Turnovers have decreased by 8.7% for the periods ended 31 December 2005 to 31
December 2006. This is due to the cancellation of unfavorable contracts with
supermarkets.
The gross profit margin for the 6 month period ended December 2006 decreased
from 36% to 26%, compared to December 2005. This is mainly due operating
expenses that were reclassified to cost of sales. The gross profit margin would
have been 40% if expenses were not reallocated to cost of sales.
Net profit decreased due to restructuring costs such as retrenchment packages.
Milk powder prices increased and due to fixed contract prices the final product
prices could not be recouped.
2 Prospects
The company will introduce new product lines (milk based products) that should
increase turnovers and to minimise the seasonality effect of the ice-cream
trade. This is in line with the board`s previous decision to diversify its
product lines.
Due to the closure of the Alrode depot (a loss making segment) and retrenchments
in the group, the overall financial situation of the company will improve during
the next 6 months.
The company is looking at replacing all milk powders with fresh milk which will
be more cost effective for the group and enable the company to produce other
milk based products. Very little capital expenditure is required as most of the
equipment is already in place.
The company will open concept stores to increase turnover and profitability
supplying milk-based products and ice cream directly to the public.
3 Accounting policies
The accounting policies of the company comply in all material respects with
International Financial Reporting Standards 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.
During the year under review the method of calculating the carrying value of
fixed assets was changed in that the estimated residual values of the asset was
taken into account and remaining useful life of assets were reassessed.
4 Dividends
No dividends were recommended or declared for the interim period.
For and on behalf of the board
Stephan Roux
Chief Executive Officer
02 March 2007
Directors: SA Roux, T Dajcar, P van Heerden, A Stander (Non Executive)
Transfer secretaries Registered address
Computershare Investor Services 2004 (Pty) Ltd 167 Alumina Street
Silvertondale
Pretoria
Designated Advisor
River Group
Date: 02/03/2007 16:40:01 Produced by the JSE SENS Department.
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