| Thu 25 Feb 2010, 7:05 | | UBU - Ububele - Interim Results For The Six Months Ended 31 December 2009 |
|
UBU
UBU
UBU - Ububele - Interim Results For The Six Months Ended 31 December 2009
Ububele Holdings Limited (formerly Milkworx Limited)
(Incorporated in the Republic of South Africa)
(Registration number: 1998/011074/06)
Share code: UBU
ISIN code: ZAE000140182
("Ububele" or "the company" or "the group")
Interim results for the six months ended 31 December 2009
Abridged consolidated statement of comprehensive income
Unaudited Unaudited Audited
6 months 6 months 16 months
31 December 31 December 30 June
2009 2008 2009
R R R
Gross revenue 295 633 833 287 262 025 471 769 348
Cost of sales (209 707 583) (207 589 757) (323 403
512)
Gross profit 85 926 250 79 672 268 148 365 836
Operating expenses (69 741 261) (59 293 778) (132 500
370)
Earnings before interest, tax, 16 184 989 20 378 490 15 865 466
depreciation and amortisation
("EBITDA")
Depreciation and amortization (1 125 243) (1 613 494) (3 773 078)
Operating profit 15 059 746 18 764 996 12 092 388
Other income 5 594 624 1 276 676 5 555 405
Net interest paid (1 297 891) (1 706 976) (1 011 607)
Profit before taxation 19 356 479 18 334 696 16 636 186
Taxation ( 1 125 446) ( 7 102 724) (6 523 460)
Profit for the period 18 231 033 11 231 972 10 112 726
Total comprehensive income
attributable to:
Ordinary shareholders 15 420 306 7 370 028 1 409 345
Non-controlling interests 2 810 727 3 861 944 8 703 381
Profit for the period 18 231 033 11 231 972 10 112 726
Reconciliation of headline
earnings:
Comprehensive income 15 420 306 7 370 028 1 409 345
attributable to ordinary
shareholders
(Profit)/loss on disposal (129 436) 19 138 (12 115)
of property, plant and
equipment
Profit on disposal of - - (195 338)
joint venture
Headline earnings attributable 15 290 870 7 389 166 1 201 892
to ordinary shareholders
Number of ordinary shares in 8 741 750 167 7 141 492 543 7 465 011
issue 084
Weighted number of ordinary 8 001 643 412 7 056 797 762 6 829 489
shares in issue 809
Fully diluted weighted average 8 001 643 412 7 056 797 762 6 829 489
number of ordinary shares 809
Earnings per ordinary share 0.19 0.10 0.02
(cents)
Headline earnings per ordinary 0.19 0.10 0.02
share (cents)
Fully diluted earnings per 0.19 0.10 0.02
ordinary share (cents)
Fully diluted headline 0.19 0.10 0.02
earnings per ordinary share
(cents)
Abridged consolidated statement of financial position
Unaudited Audited
31 December 30 June
2009 2009
R R
Assets
Non-current assets 140 994 161 104 032 245
Property, plant and equipment 23 195 404 10 122 756
Goodwill 78 178 199 63 632 737
Intangible assets 27 587 230 25 688 462
Investments in associates 1 550 589 -
Available-for-sale financial assets at fair 1 643 216 1 566 937
value
Deferred taxation 8 839 523 3 021 353
Current assets 275 657 297 131 083 383
Inventories 83 224 230 58 406 471
Current tax receivable 5 154 659 -
Loans receivable - 110 981
Trade and other receivables 158 109 921 62 496 048
Cash and cash equivalents 29 168 487 10 069 883
Total assets 416 651 458 235 115 628
Equity and liabilities
Capital and reserves 147 727 906 102 227 424
Share capital and premium 97 024 446 67 774 997
Non-distributable reserve 187 135 248 210
Accumulated profit 30 519 293 17 017 912
127 730 874 85 041 119
Non-controlling interest 19 997 032 17 186 305
Non-current liabilities 5 964 170 7 246 793
Interest-bearing borrowings 5 590 673 6 872 678
Operating lease liability 84 947 -
Deferred taxation 288 550 374 115
Current liabilities 262 959 382 125 641 411
Trade and other payables 189 534 294 65 146 238
Taxation 8 178 972 3 046 460
Interest-bearing borrowings 2 040 975 1 825 950
Loans payable 2 903 694 1 260 546
Provisions 8 676 009 -
Loans from shareholders 34 144 207 42 331 551
Derivative financial instruments - 41 290
Bank overdraft and acceptances 17 481 230 11 989 376
Total equity and liabilities 416 651 458 235 115 628
Abridged consolidated statement of changes in equity
Unaudited Unaudited Audited
6 months 6 months 16 months
31 December 31 December 30 June
2009 2008 2009
R R R
Balance at beginning of period 102 227 424 52 583 729 53 402 773
Share capital and premium 67 774 997 34 211 013 34 008 013
Other reserves 248 210 - -
Retained earnings 17 017 912 16 259 473 17 385 967
Non-controlling interest 17 186 305 2 113 243 2 008 793
Net shares issued 29 249 449 3 043 400 36 766 984
Acquisition of previously - - (3 000 000)
issued shares
Profit for the period - 15 420 306 7 370 028 1 409 345
attributable to ordinary
shareholders
Profit for the period - non- 2 810 727 3 861 944 8 703 381
controlling interest
Revaluation of unlisted - - 248 210
investment
Transfer from other reserves (61 075) - -
Transfer to retained earnings 61 075 - -
Dividend paid - non- (1 980 000) (950 000) (1 777 400)
controlling interest
Net acquisition of - - 6 474 131
subsidiaries
Balance at end of period 147 727 907 65 909 101 102 227 424
Share capital and premium 97 024 446 37 254 413 67 774 997
Other reserves 187 135 - 248 210
Retained earnings 30 519 293 22 679 501 17 017 912
Non-controlling interest 19 997 032 5 975 187 17 186 305
Abridged consolidated statement of cash flows
Unaudited Unaudited Audited
6 months 6 months 16 months
31 December 31 December 30 June
2009 2008 2009
R R R
Cash flows from operating 11 921 813 (16 936 284) (6 631 908)
activities
Cash flows from investing 20 445 421 9 002 616 (3 680 824)
activities
Cash flows from financing 1 524 049 22 518 693 4 397 752
activities
Net increase/(decrease) in 33 891 283 14 585 025 (5 914 980)
cash and cash equivalents
Cash and cash equivalents (681 093) 5 093 406 5 093 165
acquired in business
combination
Cash and cash equivalents at (1 919 493) (4 044 195) (1 097 678)
beginning of period
Cash and cash equivalents at 31 290 697 15 634 236 (1 919 493)
end of period
Notes to the Abridged consolidated financial statements for the six months
ended 31 December 2009
1. Highlights for the period
Ububele Holdings Limited is pleased to present its maiden financial results
since its reverse listing on the JSE`s AltX in November 2009.
Ububele, which means "kindness" or "nurturing", started business in 2002 and
became a public company in 2007. The Ububule brand essence is about creating
sustainable wealth through innovative and holistic agricultural compounds and
Food processing solutions in a manner that is socially responsible and
environmentally sensitive. Ububele has managed strong growth over the past
seven years. We started with a turnover of just R2.7m in 2002, which we have
grown to R300m for the first six months of 2010. We have exceeded shareholder
expectations every year, delivering returns in excess of shareholders`
expectations.
* Ububele Holdings listed on the AltX of the JSE by way of a reverse listing
on 11 November 2009;
* The group experienced a substantial increase in sales volumes in both
divisions (Agriculture and Food);
* Ububele acquired the operations of Milkworx Limited ("Milkworx") by means of
a reverse listing; and
* Headline earnings per share increased by 90%.
Management looks forward to a year of further value enhancing for its
shareholders and feels that Ububele is poised to take advantage of improved
market conditions and to continue the company`s growth in its respective
markets.
2. Commentary on results
Ububele`s gross revenue increased marginally for the interim period. The
Agriculture division experienced a substantial increase in sales volumes, but
this was unfortunately offset by the stronger Rand in comparison to prior
reporting periods and thus contributed to a decrease of 4% in gross revenue
from the Agriculture division. The Food division, however, contributed a
substantial increase in gross revenue of 92%, owing to the acquisition of
Milkworx`s operations during the period, as well as significant increases in
sales volumes from existing operations.
The marginal increase in revenue provided Ububele a gross profit margin
increase of 7.8% based on organic increases in sales volumes and added
efficiencies of operations.
Ububele experienced an increase in operating expenditure of R10.4m during the
interim period as a result of the additional costs of R5m from our newly
acquired Milkworx dairy operations, as well as incurring R1.4m as part of
Ububele restructuring costs and listing fees as a result of the reverse
listing in November 2009.
Other income received by Ububele included an insurance payout of R1m as a
result of a fire at our dairy operations and foreign exchange gains of R2.4m.
Proceeds of R600k that were received from the disposal of the use of a
registration held by the Agriculture division, were also included in other
income.
Ububele is greatly satisfied with the increase of 62% in the net profit after
tax for the period, as well as a substantial improvement of 100% in the
company`s cash position.
As a result headline earnings per share increased by 90%.
Current assets increased by 110% and current liabilities by 109% due to an
increase in operating activity and sales volumes.
Non-current assets increased by 35% due to an increase in investments made.
3. Basis of presentation and accounting policies
The abridged interim consolidated financial statements have been prepared in
terms of IAS 34 - Interim Financial Reporting, the South African Companies
Act, as amended, and the JSE`s Listing Requirements and should be read in
conjunction with the annual financial statements for the year ended 30 June
2009, which have been prepared in accordance with IFRS.
The accounting policies applied in the preparation of the interim consolidated
financial statements are consistent with those used in the previous year, as
described in those annual financial statements.
4. Business combination
Ububele listed on the JSE`s AltX on 11 November 2009 through a reverse listing
into Milkworx. The effective date of the transaction was 22 October 2009. The
consolidated results were prepared in terms of IFRS 3 (Business Combinations).
Consequently, the consolidated results for the six months ended 31 December
2009 include the trading results of Milkworx since the effective date, as well
as the trading results of Ububele for the entire period under review.
In a reverse acquisition, the acquirer is the entity whose equity interest has
been acquired (the legal subsidiary) and the issuing entity (the legal parent)
is the acquiree. Although legally the issuing entity is regarded as the parent
and the entity whose equity interest has been acquired is regarded as the
subsidiary, the legal subsidiary is the acquirer as it has the power to govern
the financial and operating policies of the legal parent so as to obtain
benefits from its activities.
Consolidated financial statements prepared following a reverse acquisition are
issued under the name of the legal parent, but are a continuation of the
financial statements of the legal subsidiary (i.e. The acquirer for accounting
purposes). Because such consolidated financial statements represent a
continuation of the financial statements of the legal subsidiary:
the assets and liabilities of the legal subsidiary are recognised and measured
in those consolidated financial statements at their pre-combination carrying
amounts;
the retained earnings and other equity balances recognised in the consolidated
financial statements are the retained earnings and other equity balances of
the legal subsidiary immediately before the business combination;
the amount recognised as issued equity instruments in the consolidated
financial statements shall be determined by adding to the issued equity of the
legal subsidiary immediately before the business combination, the cost of the
combination. However, the equity structure appearing in the consolidated
financial statements (i.e. the number and type of equity instruments issued)
reflects the equity structure of the legal parent, including the equity
instruments issued by the legal parent to effect the combination; and
comparative information presented in the consolidated financial statements is
that of the legal subsidiary.
Details of net assets acquired and goodwill are as follows:
R
Effective consideration paid 26 879 305
Fair value of net identifiable assets acquired (see (16 916 873)
below)
Goodwill 9 962 432
The goodwill is attributable to Milkworx`s existing client base and the
synergies expected to arise after its acquisition by the group.
The assets and liabilities arising from the acquisition are as follows:
Acquiree`s Provisiona
carrying l fair
amount value
R R
Plant and equipment 12 510 053 12 510 053
Intangible assets 1 640 183 1 640 183
Deferred tax 1 680 000 1 680 000
Inventories 5 610 267 5 610 267
Trade and other receivables 4 895 465 4 895 465
Cash and cash equivalents 2 126 623 2 126 623
Trade and other payables (8 202 712) (8 202
712)
Bank overdraft (2 807 715) (2 807
715)
Interest-bearing borrowings (320 418) (320 418)
Provisions (214 873) (214 873)
16 916 873 16 916 873
4. Segment information
The group`s reportable segments have been identified as the Agriculture and
Food business units.
The Agriculture business unit is involved in the manufacturing and
distribution of agricultural compounds in the Republic of South Africa and
Namibia.
The Food business unit is involved in the catering and distribution of
products in the Republic of South Africa and Namibia.
Business segments:
6 months ended 31 December 2009
Agriculture Food Total
R R R
Revenue and other income 246 719 305 54 458 726 301 178 031
external
Revenue and other income 12 811 400 300 000 13 111 400
internal
Net interest income/(expense) (564 926) (420 504) (985 430)
Depreciation and amortisation 489 349 1 452 283 1 941 632
Segment profits attributable to
ordinary shareholders
8 237 348 7 448 458 15 685 806
Segment profits attributable to 2 563 163 247 565 2 810 728
minorities
Segment assets 309 586 031 89 545 100 399 131 131
Segment liabilities 235 480 756 32 551 265 268 032 021
6 months ended 31 December 2008
Agriculture Food Total
R R R
Revenue and other income 257 546 690 28 311 252 285 857 942
external
Revenue and other income - 21 499 772 540 000 22 039 772
internal
Net interest income/(expense) (565 555) (1 003 494) (1 569 049)
Depreciation and amortisation 564 298 1 049 196 1 613 494
Segment profits attributable to
shareholders
10 013 122 (2 400 660) 7 612 462
Segment profits attributable to 3 861 944 - 3 861 944
minorities
Segment assets 320 012 870 48 990 743 369 003 613
Segment liabilities 232 994 870 41 946 696 274 941 566
On behalf of the board
JT Kleinhans HW Cloete
Executive Chairman Financial director
Cape Town
25 February 2010
Directors: JT Kleinhans (Executive Chairman)*, HW Cloete (Financial
Director)*, MP Mocke*, SA Roux*, JMK Matlala*, Dr DWR Hertzog#, GI Bayne#
(*executive #non-executive)
Secretary and registered office: Fusion Corporate Secretarial Services (Pty)
Limited, 56 Regency Road, Route 21 Corporate Park, Irene, Pretoria
Transfer Secretaries: Computershare Investor Services (Pty) Limited, Ground
Floor, 70 Marshall Street, Johannesburg, 2001
Designated Adviser: PSG Capital
Date: 25/02/2010 07:05:46 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.
