| Thu 25 Mar 2010, 14:17 | | MYD - Myriad Medical Holdings - Reviewed Condensed Consolidated Results For |
|
MYD
MYD
MYD - Myriad Medical Holdings - Reviewed Condensed Consolidated Results For
The 7 Months Ended 31 December 2009
MYRIAD MEDICAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2006/006371/06)
JSE code: MYD & ISIN: ZAE000085825
("Myriad" or the "Group")
REVIEWED CONDENSED CONSOLIDATED RESULTS FOR THE 7 MONTHS ENDED 31 DECEMBER 2009
- Acquisition of Litha Healthcare Holdings (Proprietary) Limited announced
during period. Expected to be implemented in April 2010
- Change of year end, therefore periods not comparable
STATEMENT OF FINANCIAL POSITION
(R`000) Reviewed Audited
at at
31 December 31 May
2009 2009
ASSETS
Non-current assets 85,190 86,508
Property, plant and equipment 3,495 2,878
Intangibles 81,468 81,468
Deferred taxation asset 227 2,162
Current assets 130,165 119,634
Inventory 53,920 60,807
Trade and other receivables 56,861 50,711
Taxation 4,450 3,015
Cash and cash equivalents 14,934 5,101
Total assets 215,355 206,142
EQUITY AND LIABILITIES
Total equity 140,803 156,082
Share capital and premium 64,371 94,271
Accumulated profits and reserves 76,432 61,811
Non-current liabilities 27,798 383
Long term liabilities 27,378 -
Instalment sale liabilities 375 383
Deferred taxation liability 45 -
Current liabilities 46,754 49,677
Accounts payable and provisions 30,372 37,289
Other financial liabilities 1,189 6,531
Short term portion of long term 7,133 402
liabilities
Bank overdraft 6,571 -
Taxation 1,489 5,455
Total equity and liabilities 215,355 206,142
COMMENTARY TO THE FINANCIAL POSITION
Total number of shares in issue 154,230,364 188,230,364
Net asset value per share (cents) 91,3 82,9
Net tangible asset value per share 38,5 39.6
(cents)
STATEMENT OF COMPREHENSIVE INCOME
(R`000) Audited
Reviewed 12 months ended
7 months ended 31 May
31 December 2009
2009
178,048
Revenue 277,899
Turnover 176,876 273,614
Cost of sales (96,294) (159,418)
Gross profit 80,582 114,196
Net operating costs (59,130) (82,968)
Operating profit 21,452 31,228
Interest received 858 2,586
Interest paid (1,464) (2,274)
Profit before taxation 20,846 31,540
Taxation (6,256) (8,858)
Total comprehensive income for the 14,590 22,682
period
Earnings per share (cents) 8.1 12.0
Diluted earnings per share (cents) 7.8 11.5
COMMENTARY TO THE STATEMENT OF COMPREHENSIVE INCOME
Headline earnings reconciliation
Total comprehensive income for the 14,590 22,682
period
Profit from disposal of property, plant (55) (30)
and equipment
Tax effect of adjustments 15 8
Headline earnings 14,550 22,660
Weighted average number of shares 180 445 317 189 316 410
Diluted weighted average number of 186 503 542 197 224 365
shares
Headline earnings per share (cents) 8.1 12.0
Diluted headline earnings per share 7.8 11.5
(cents)
STATEMENT OF CHANGES IN EQUITY
(R`000) Share Share Accumulated Total
capital and based profits
premium paymen
t
reserv
e
Balance at 1 June 2008 95,909 578 38,456 134,943
Total comprehensive income - - 22,682 22,682
Share based payment reserve - 95 - 95
adjustment
Share repurchase (1,638) - - (1,638)
Balance at 31 May 2009 94,271 673 61,138 156,082
Total comprehensive income - - 14,590 14,590
Share based payment reserve - 31 - 31
adjustment
Share repurchase (29,900) - - (29,900)
Balance at 31 December 2009 64,371 704 75,728 140,803
STATEMENT OF CASH FLOWS
(R`000) Reviewed Audited
7 months 12 months
ended ended
31 December 31 May
2009 2009
Cash generated by operations 10,574 18,749
Cash flows from operating activities 2,785 6,614
Cash flows from investing activities (1,386) (1,022)
Cash flows from financing activities 1,863 (2,135)
Net increase in cash and cash equivalents 3,262 3,457
Cash and cash equivalents at beginning of 5,101 1,644
period
Cash and cash equivalents at end of period 8,363 5,101
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
The reviewed condensed consolidated financial results have been prepared in
accordance with International Financial Reporting Standards, IAS 34 Interim
Financial Reporting, and the requirements of the South African Companies Act,
1973. The financial results presented above have been reviewed but not audited
by Mazars Moores Rowland, the Group`s auditors. Their review report is available
for inspection at Myriad`s registered office during normal office hours. The
reviewed condensed consolidated financial results are prepared on the historical
cost basis with the exception of certain financial instruments which are
measured at fair value. The financial statements should be read in conjunction
with the audited financial statements for the year ended 31 May 2009.
The preparation of the reviewed condensed consolidated financial results
required the use of estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the preliminary condensed Group financial statements and the
reported amounts of revenue and expenses during the reporting periods. Although
these estimates are based on management`s best knowledge of current events and
actions that the Group may undertake in the future, actual results may differ
from those estimates.
The accounting policies and methods of computation are consistent with those
applied in the financial statements for the year ended 31 May 2009.
2. SUBSEQUENT EVENTS
It was announced on 14 December 2009 that Myriad had concluded agreements to
acquire 51% of the issued share capital of Litha Healthcare Holdings
(Proprietary) Limited ("Litha") for a purchase consideration of approximately
R114 million. The Company also secured an option for the acquisition by Myriad
of the balance of the shares in Litha at a price equivalent to 7.2 times 49% of
the average profit after tax earned by Litha for the two financial years
preceding the date on which the option is exercised. 70% of the purchase price
payable will be funded by way of a rights offer to raise R100 million at a
price of 80 cents per share. The offer is underwritten by Blackstar Group Plc.
The balance of the purchase price will be settled by the issue of 42 800 001
Myriad shares at an issue price of 80 cents per share. The acquisition remains
conditional upon shareholder approval being obtained.
Other than this, no events material to the understanding of the report have
occurred in the period between the period end and the date of this report.
3. RELATED PARTY TRANSACTIONS
There were no trading transactions between related parties during the reporting
period.
4. PROPERTY, PLANT AND EQUIPMENT
During the period under review, the group purchased property, plant and
equipment to the value of R1.4 million, with no material disposals of equipment
or other assets. These acquisitions were in the "Single-use medical devices"
segment.
5. SEGMENT INFORMATION
Segment Single-use Capital Technical Group
medical medical services
devices equipment
(R`000)
Reviewed 31 December 2009
Turnover 169,434 4,938 2,504 176,876
Reportable segment profit 29,459 (8,109) 102 21,452
/(loss)
Audited 31 May 2009
Turnover 242,709 21,633 9,272 273,614
Reportable segment profit 30,355 533 340 31,228
COMMENTARY
1. NATURE OF BUSINESS
The Myriad Group is South Africa`s only listed exclusive supplier of medical
devices, single use consumables and medical capital equipment to both the Public
and Private hospital sectors. The Group currently consists of seven business
units, with the rights to 32 leading agencies with a wide range of different
premier brands.
Myriad has two wholly-owned subsidiaries, Myriad Medical (Proprietary) Limited
(MMPL) and Filterworks (Proprietary) Limited (Filterworks). Besides the Pall
medical filter and Van Straten wound drainage agencies which are housed in
Filterworks, MMPL houses Myriad`s training division as well as all of the
Group`s operating divisions. These include, as separate divisions, Manta
Medical, Manta Forensic, ICU Medical, Earth Medical and Myriad Medical Capex and
Technical.
Myriad focuses on both the public and private healthcare sectors, with its
client base consisting of hospitals and private clinics. Currently, the private
sector contributes 62% and the public sector 38% to Group turnover. The Group is
consistently progressing towards a balanced mix between these sectors.
2. RESULTS
Financial review
Due to the change of the Myriad year end to 31 December, these results represent
a 7 month period from 1 June 2009 to 31 December 2009. As commented in the
interim results announcement for the 6 months ended 30 November 2009, Myriad
delivered solid results which were achieved despite challenging market
conditions and significant once off costs related to a repurchase of 34,000,000
shares in November 2009.
Turnover showed steady growth as Myriad started to benefit fully from the
addition of two new agencies in the Filterworks and Earth Medical divisions.
Demand from the Private and Public sectors remained strong throughout the period
under review. Gross margin improved to 46% (12 months ended 31 May 2009: 42%)
which was aided by the strength of the Rand.
Net operating costs as a percentage of Sales increased to 33% (12 months ended
31 May 2009: 30%). The increase was due to restructuring costs in the Capex and
Technical division of R2.2 million and once-off non-tax deductible costs related
to the repurchase of 34,000,000 shares from Messrs Jacob Shapiro and Reuben
Shapiro at 85c per share (R28.9 million). Costs related to this repurchase
amounted to R3.5 million.
Property, plant and equipment to the value of R1.4 million was purchased during
the period. The period under review saw an improvement in overall working
capital management. Inventory days improved to 120 days (31 May 2009: 139 days)
and Debtors days were maintained at 69 days (31 May 2009: 68 days) despite a
R7.1 million prepayment made to a supplier towards year end in order to take
advantage of discounts. Creditors days, which were indirectly affected by the
above prepayment, decreased to 67 days (31 May 2009: 85 days). A loan of R34
million was raised to fund the share repurchase and related costs. The loan is
repayable in quarterly installments over 4 years at a rate of JIBAR plus 5.5%.
Despite this increase in long term debt, the Group has maintained a healthy
balance sheet with a low gearing of 20%. Net asset value per share at 31
December 2009 improved to 91.3 cents per share (31 May 2009: 82.9 cents per
share).
Cash generated by operations was R10.6 million for the 7 month period (R18.7
million for the 12 months period ended 31 May 2009). Cash generated by operating
activities was utilised to fund the increase in working capital requirements due
to increased turnover and also contributed to the 65% increase in the cash and
cash equivalents balance in comparison to 31 May 2009.
Operational review
96% of the Group`s revenue was derived from single use medical consumables.
These products are distributed by the Group`s Manta Medical, Manta Forensic,
Filterworks, ICU Medical and Earth Medical divisions.
Single use medical devices
The Filterworks, Earth Medical and Manta divisions exceeded their budgets for
the 7 month period. The new agencies acquired by Filterworks and Earth Medical
have been successfully integrated into their businesses and are complementary to
their existing product range. Manta Medical won significant tenders in the
Government sector and retained existing formularies in the private sector. Manta
Forensic had a slow start to the financial year as the existing SAPS forensic
tender came to a close. The division however secured all products in the new
forensic tender, the benefits of which are starting to show. ICU Medical
performed in line with its budget.
Capital medical equipment and services
The Group`s Capex and Technical division, which contributed 4% to Group revenue,
underwent a significant restructuring during the 7 months. These restructuring
expenses contributed towards the loss in this division. The division is being
carefully monitored on an ongoing basis to determine whether the restructuring
has been successful or if further restructuring is required.
3. PROSPECTS
On 14 December 2009, Myriad announced the acquisition of 51% of Litha. As part
of the acquisition Myriad will be changing its name to Litha Healthcare Group
Limited, moving its listing to the Main Board of the JSE Limited and
diversifying into biotechnology (vaccines) and pharmaceuticals, in addition to
Myriad`s current medical consumable and device businesses. Litha`s executive
team will become instrumental in the management of the Group, with Messrs Selwyn
Kahanovitz and Martin Kahanovitz becoming the Group`s Chief Executive Officer
and Chief Financial Officer respectively. This transaction represents a seminal
moment in the history of the Group. On completion of this transaction
(anticipated towards the end of May 2010), Blackstar will have fulfilled its
role of providing interim executive management to the Group post the departure
of the Shapiros. The board of Myriad wishes the new management every success for
the future.
4. DIVIDEND
No dividend has been recommended or declared for the interim period.
For and on behalf of the board
AD Bonamour, Chairman
Johannesburg
25 March 2010
Directors: AD Bonamour*, W Marshall-Smith, BC Budler, EL Senamolele*
(*non-executive)
Designated Adviser
Java Capital (Proprietary) Limited
Auditors
Mazars Moores Rowland
Transfer Secretaries
Computershare Investor Services (Proprietary) Limited
Registered Office
Manta Place
Turnberry Office Park
48 Grosvenor Road
Bryanston
2191
Date: 25/03/2010 14:17:14 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.
