| Tue 21 Sep 2010, 8:00 | | LHG - Litha Healthcare Group Limited - Reviewed condensed consolidated interim |
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LHG
LHG
LHG - Litha Healthcare Group Limited - Reviewed condensed consolidated interim
results for the 6 months ended 30 June 2010
LITHA HEALTHCARE GROUP LIMITED
(Formerly Myriad Medical Holdings Limited)
(Registration number 2006/006371/06);
Share code: LHG, ISIN: ZAE000144671
("The group")
REVIEWED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE 6 MONTHS ENDED 30 JUNE
2010
* Litha and Pharmafrica acquisitions effective 1 May 2010
* Two months of Litha and Pharmafrica earnings included in these results
* Headline earnings per share up 36%
* Proforma core earnings per share 9.2c
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(R`000) Reviewed 30 Unaudited Audited
June 2010 30 November 31 December
2009 2009
ASSETS
Non-current assets 294,403 85,146 85,190
Property, plant and equipment 74,736 3,591 3,495
Goodwill and intangibles 216,039 81,468 81,468
Deferred taxation asset 2,633 87 227
Other non-current assets 995 - -
Current assets 633,064 136,378 130,165
Inventory 224,323 52,870 53,920
Trade and other receivables 286,678 63,968 56,861
Other current assets 13,924 1,382 4,450
Cash and cash equivalents 108,139 18,158 14,934
Total assets 927,467 221,524 215,355
EQUITY AND LIABILITIES
Total equity 384,257 140,461 140,803
Share capital and premium 194,447 64,371 64,371
Accumulated profits and reserves
attributable to holders of the 94,938 76,090 76,432
parent
Non-controlling interest 94,872 - -
Non-current liabilities 76,899 29,096 27,798
Interest bearing borrowings 74,230 27,388 27,753
Deferred taxation liability 2,669 1,708 45
Current liabilities 466,311 51,967 46,754
Accounts payable and provisions 422,539 37,871 30,372
Other current liabilities 4,304 921 2,678
Interest bearing borrowings 37,100 7,165 7,133
Bank overdraft 2,368 6,010 6,571
Total equity and liabilities 927,467 221,524 215,355
Total number of shares in issue 325,717,768 154,230,364 154,230,364
Net asset value per share (cents)
88.8 91.1 91,3
Net tangible asset value per share 22.6 38.2 38,5
(cents)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(R`000) Audited 7
Unaudited 6 months ended
Reviewed months 31 December
6 months ended 2009
ended 30 June 30 November
2010 2009
423,711 178,048
Revenue 155,289
Turnover 412,060 153,201 176,876
Cost of sales (298,170) (83,015) (96,294)
Gross profit 113,890 70,186 80,582
Net operating costs (80,221) (53,243) (59,443)
Other income 8,630 3,148 313
Operating profit 42,299 20,091 21,452
Interest received 3,021 404 858
Interest paid (4,132) (800) (1,464)
Profit before taxation 41,188 19,695 20,846
Taxation (12,536) (5,514) (6,256)
Profit for the period 28,652 14,181 14,590
Other comprehensive income for the
period net of tax
Fair value adjustments to 1,879 - -
available for sale financial
assets
Total comprehensive income for the 30,531 14,181 14,590
period
Profit attributable to:
Equity holders of Litha Healthcare 17,548 14,181 14,590
Group Limited
Non-controlling interest 11,104 - -
Total profit for the period 28,652 14,181 14,590
Total comprehensive income 18,506 14,181 14,590
attributable to:
Equity holders of Litha Healthcare
Group Limited
Non-controlling interest 12,025 - -
Total comprehensive income for the 30,531 14,181 14,590
period
Earnings per share (cents) 7.5 6.9 7.3
Diluted earnings per share (cents) 7.4 6.6 7.1
COMMENTARY TO THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Headline earnings reconciliation
Attributable profit 17,548 14,181 14,590
Adjusted for:
Goodwill impairment 4,250 - -
Profit from disposal of property, (11) (55) (55)
plant and equipment
Tax effect of profit from disposal 3 15 15
of property, plant and equipment
Headline earnings 21,790 14,141 14,550
Weighted average number of shares 232,681,697 205,592,933 199,452,211
Diluted weighted average number of 235,678,697 213,501,158 205,510,436
shares
The prior periods` weighted average number of shares and diluted weighted
average number of shares have been recalculated to account for the bonus
portion of the rights issue that took place during the period under review.
Headline earnings per share 9.4 6.9 7.3
(cents)
Diluted headline earnings per 9.2 6.6 7.1
share (cents)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(R`000) Share Share Non Total
capital based Availa Ordinary contr
and payment ble Accum- share- ollin
premium reserve for ulated holders g
sale profits interest inter
revalu est
ation
reserv
e
Audited 94 ,271 673 61,138 156,082 - 156,082
balance at 1 -
June 2009
Total - - - 14,181 14,181 - 14,181
comprehensive
income
Share based - 98 - - 98 - 98
payment
reserve
adjustment
Share buyback (29,900 - - - (29,900) - (29,900)
)
Unaudited 64,371 771 - 75,319 140,461 140,461
balance at 30
November 2009
Total - - - 409 409 - 409
comprehensive
income
Share based - (67) - - (67) - (67)
payment
reserve
adjustment
Audited 64,371 704 75,728 140,803 - 140,803
balance at 31 -
December 2009
Rights issue 95,836 - - - 95,836 - 95,836
Acquisition of 34,240 - - - 34,240 82,84 117,087
subsidiary 7
companies
Total - - 958 17,548 18,506 12,02 30,531
comprehensive 5
income
Reviewed 194,447 704 958 93,276 289,385 94,87 384,257
balance at 30 2
June 2010
CONSOLIDATED STATEMENT OF CASH FLOWS
(R`000) Unaudited
Reviewed 6 months Audited 7
6 months ended months
ended 30 30 ended 31
June 2010 November December
2009 2009
Cash (utilised)/generated by operating (28,076) 9,757 13,318
activities
Cash flows from operating activities (35,593) 4,517 2,785
Cash flows from investing activities (134,963) (1,341) (1,386)
Cash flows from financing activities 94,323 3,871 1,863
Net (decrease)/increase in cash and (76,233) 7,047 3,262
cash equivalents
Cash acquired on acquisition of 173,641
subsidiary
Cash and cash equivalents at beginning 8,363 5,101 5,101
of period
Cash and cash equivalents at end of 105,771 12,148 8,363
period
COMMENTARY
1.NATURE OF BUSINESS
Litha Healthcare Group Limited is the result of the successful acquisition by
Myriad Medical Holdings Limited ("Myriad ") of 18 year old Litha Healthcare
Holdings (Proprietary) Limited, which saw the diversified company list on the
main board of the JSE in May 2010. The transaction significantly increased the
group`s size and diversified its healthcare offering into three major divisions
- biotechnology (vaccines), medical devices and pharmaceuticals.
To ensure an efficient operation, shared services (HR, Finance, Corporate
Affairs, IT and Legal) are provided for the entire group at the head office.
The logistics functions has been rationalised in the vaccine distribution
division, which is channelled through Litha Medical Logistics (a specialised
cold chain distribution and logistics business). Further opportunities for
rationalisation of all other logistics functions within the group are being
investigated.
Litha Biotech
The Biotechnology division imports and distributes paediatric and adult
vaccines under agency from several major international pharmaceutical companies.
It is a supplier of paediatric vaccines to the South African government through
The Biovac Institute ("TBI"), of which the South African Government owns 35%
through the Department of Health and 12,5% through the Department of Science
and Technology.
Litha Medical
Litha Medical houses the historic Myriad businesses of Earth Medical, Manta
Medical, Filterworks, ICU Medical SA, Litha Critical Care (formerly Myriad
Capex) and Manta Forensic. This division comprises the wholesale distribution,
assembly and importation of local and international medical devices and
consumables. It has rights to 34 leading international agencies with a wide
range of different premier brands in the single use consumable and medical
capital equipment sectors.
Litha Pharma
The Pharmaceutical division, the smallest division, sells, markets and
distributes pharmaceutical, generic, over-the-counter ("OTC") and ancillary
products to the pharmaceutical and consumer related industry. This division is
the fastest growing area of operations within the group due to its focus on
generic medicines. These medicines are marketed through license agreements,
co-marketing agreements and joint ventures with international pharmaceutical
and generics companies.
2.RESULTS
Financial overview
The period under review saw the acquisition of 51% of Litha Healthcare Holdings
(Pty) Ltd (`LHH") and the remaining 74% of shares in Pharmafrica (Pty) Ltd
("Pharmafrica") not already owned by the group. The effective date for these
acquisitions was 1 May 2010. Their results are therefore only included for the
two months ended 30 June 2010.
In the context of current economic conditions, the group is pleased to announce
a set of robust results. In the original medical business, demand from the
public sector for the group`s quality products was strong, with the private
sector sales lagging behind somewhat. With the acquisitions referred to above
the mix between public and private sector contribution has changed significantly
with the public sector currently contributing 45% and private sector 55% to
group gross profit.
Group revenue increased by 172% from R155.3 million to R423.7 million due to the
inclusion of the LHH and Pharmafrica results for the last two months of the
period. Organic revenue growth for the period in the original business decreased
slightly from R155.5 million to R153.8 million, which is indicative of the
current economic environment and the pressure being imposed by some of the
group`s medical division customers.
Headline earnings per share increased by 36% to 9.4c per share (2009: 6.9c).
Earnings per share increased by 9% to 7.5c per share (2009: 6.9c) despite
significant transaction costs relating to the acquisition of LHH and
Pharmafrica, and a goodwill impairment in the group`s Critical care business
unit. Transaction costs relating to the acquisition of Litha, which were
expensed, amounted to R4,78 million. These transaction costs had a large impact
on earnings as they were large relative to the size of the original business and
were only offset by two months of LHH results. The group also impaired the
remainder of the goodwill pertaining to the Critical Care business unit
amounting to R4.25 million. One of the group`s minor investments, classified as
an asset available for sale was revalued and a net revaluation profit of R1.9
million was recognised in other comprehensive income. A profit of R4.5 million
was also realised in LHH in terms of IFRS 3 on acquisition of the remainder of
the Pharmafrica shareholding. Operating profit before these transaction costs,
goodwill impairments and fair value adjustments increased by 133% to R46.8
million (2009: R20.1 million).
As 90% of the group`s products are imported, the strength of the Rand
significantly contributed to gross profit margin growth in each of the Litha
Medical, Pharmaceutical and Biotechnology divisions. The group`s policy is to
take out forward cover for approximately 60% of its estimated foreign purchases
for a year in advance. The Biotechnology division is largely hedged against
currency fluctuations due to exchange rate mechanisms in place with the National
Department of Health.
Interest cover for the period under review was 10 times (PY: 25 times),
indicating a capacity to raise further interest bearing debt in the future.
The effective tax rate of 30% was higher than the South African Statutory tax
rate of 28%, mainly due to the non deductibility of the goodwill impairment and
transaction costs, which are now expensed in terms of IFRS 3.
Proforma Core Earnings
LHH and Pharmafrica now form the group`s Biotechnology and Pharmaceutical
divisions. For information purposes, the table below indicates financial
information for the group had the LHH and Pharmafrica results been included
for the full 6 months. The earnings have been adjusted for non-core/headline
transactions of profit/loss on sale of assets, goodwill impairment, once-off
significant transaction costs relating to acquisitions and revaluation of
investments and assets available for sale. This table has not been reviewed by
the group`s auditors.
LHH Pharmafrica Original Total
medical
device
(R`000) business
Turnover 556,516 23,455 152,250 731,221
Cost of Sales (477,803) (10,026) (75,663) (563,492)
Gross Profit 78,713 13,429 76,587 168,729
Net Operating Costs (24,234) (6,578) (58,571) (89,383)
Operating Profit 54,479 6,851 18,016 79,346
Net Profit after Tax and 22,747 4,932 9,579 37,258
outside Shareholders
Add back: once off 4,530
transaction costs and
goodwill impairment and
revaluations
Non-controlling (11,821)
shareholders interest
Net profit for period 29,967
Number of shares in 325,717,768
issue
Earnings per share 9.2
(cents)
Financial Position
The vast majority of the group`s property, plant and equipment relates to
assets situated in TBI where the majority of capital expenditure has taken
place and is expected to take place on the vaccine testing and manufacturing
facility (see prospects). In respect of this facility,
funding arrangements for a R75 million loan with the Industrial Development
Corporation (IDC), and a grant from the Italian government to the value of
Euro 2,4 million will provide the bulk of the funding needed to complete the
initial phase of the manufacturing roadmap. A budget for the full 4 years of
the project is estimated at Euro 12 million with approximately 10% to be used
from cash generated by the TBI business. The IDC loan is structured as an eight
year loan. Repayments will only take place when the company is generating
profits and will therefore not put undue pressure on the business. The
effective holding of TBI is 17% at present and it operates as a stand-alone
company raising its own financing as and when required. While it is our
intention to increase the groups holdings in TBI in the future, gearing in
TBI will not affect the holding company`s ability to raise further debt
should it be required and the debt levels and ratios in TBI regard should be
viewed independently of the group.
The increase in goodwill relates to the acquisitions concluded during the
period, as well as payments made to the vendors of the Filterworks and Earth
Medical units within the Litha Medical division for their achievement of
warranted profit target. The payments to the Filterworks and Earth Medical
division were R5.5 million and R9.3 million respectively. See note 4 to the
condensed financial statements for further details regarding the goodwill
allocation for Litha and Pharmafrica. An amount of R4.2 million was impaired in
the group`s Critical Care business unit relating to its original acquisition due
to remaining lack of visibility in terms of its future earnings.
The group maintained a healthy financial position with low gearing. Refer to the
table below for key financial ratios.
Reviewed Unaudited Audited 7
6 months 6 months months
ended 30 ended ended 31
June 2010 30 December
November 2009
2009
Current ratio 1.4 2.6 2.8
Quick ratio (Acid Test) 0.9 1.6 1.6
Debt: Equity (Group) 29% 25% 25%
Average collection period 60 76 68
(Days Sales Outstanding)
Inventory turnover 2.82 3.14 3.06
The average collection period and inventory turnover was calculated taking into
account the full 6 months of LHH and Pharmafrica sales and cost of sales.
Cash Flow
Cash and cash equivalents acquired as a result of the LHH and Pharmafrica
acquisitions amounted to R173.6 million.
The net cash outflow from operating activities was R35.6 million (2009: Inflow
of R4.5 million) for the period under review. The outflow was specifically due
to negative working capital movements in TBI which amounted to R59.4 million in
the two months up to period end. This arose as a result of a large prepayment
from TBI customers on an H1N1 order. Had TBI working capital remained constant,
the group would have generated R23.8 million from operating activities,
indicating strong cash generation. Had TBI been consolidated for a full 6 month
period, it would have had a positive working capital impact of R20.3 million on
the group. TBI operates as a stand-alone company and its cash generation or
utilisation does not affect any of the other companies within the group.
The cash outflow from investing activities of R134.9 million (2009: R1.3
million) relates to cash payments made to the vendors of LHH and Pharmafrica,
as well as warranted profit payments made to the Earth Medical and Filterworks
vendors. There are no further warranted profit payments required for any
existing acquisition agreements.
The vast majority of the cash inflow from financing activities relates to cash
raised in terms of the rights issue during the period to finance the LHH and
Pharmafrica acquisitions.
3. OPERATIONAL REVIEW
Litha Biotech Division
The introduction of the new vaccines to the government Expanded Programme for
Immunisation has gained momentum in the last 12 months. The country wide roll
outs for the government`s polio, measles and flu pandemic mass immunisation
campaigns were successfully executed.
Vaccine Manufacturing Facility: As outlined above, TBI`s commercial vaccine
manufacturing facility roll out remains on track, with the development of tender
packages for all clean room, steam, water and filling equipment. Operational
completion remains anticipated for 2013.
Clinical Trial Manufacturing Facility (CTM): A pilot clinical trial facility to
be audited by the South African Medicines Control Council ("MCC") later this
year is in its final stages of completion. This will be the only pilot clinical
trial facility for vaccines on the African continent.
Litha Medical Division
Manta Medical exceeded its budgeted operating profit by 25% due to the increase
in supply of syringes pertaining to the mass immunisation campaigns. Manta
Forensic has commenced with delivery on its tender with the SAPS Forensic
Department. However, as orders were delayed from government, this resulted in a
slow start to the six months under review. Since period end, Manta Forensic has
commenced with delivery on its tender with demand being higher than expected.
ICU Medical and Filterworks were also ahead of budgeted operating profit, with
increased sales by ICU into the private sector. Litha Critical Care (formerly
Myriad Capex) still remains under financial pressure, mainly due to the lack of
government spending on medical capital equipment. This business unit continues
to disappoint, resulting in the balance of goodwill relating to its original
acquisition, of R4,25 million being written off. Action plans to re-engineer the
unit are being investigated.
Litha Pharma Division
The integration of Pharmafrica into Litha Pharma strengthened the division`s
operational platform. The division`s growth strategy remains on track to
target opportunities to acquire products already approved for sale in South
Africa. Through this, it will generate additional product lines for
Pharmafrica`s sales teams.
The group continues to develop its regulatory infrastructure to assist in
finalising and expediting outstanding issues related to products at the MCC.
4. PROSPECTS
The Litha group`s business development plans will see the company grow through
profitable acquisitions, joint ventures, co-marketing ventures and manufacturing
and distributions agreements, including currently marketed products.
The group`s businesses remain well positioned to benefit from increased
government spend on healthcare, specifically in the biotechnology and medical
consumables areas, as well as to maintain its market share in the private sector
through the delivery of quality products and services.
A combination of organic growth and value-adding acquisitive growth
opportunities will see the expansion of Litha Healthcare Group in the next three
to five years, particularly in the Pharmaceutical division, as that is where
management believes significant growth opportunities exist.
Litha Medical Division will be expanding the number of international agencies
and is presently investigating local packaging and assembly opportunities to
enable the group to be more competitive. Business development plans are in
place to acquire new products and agencies to complement existing product
groupings and to establish new business opportunities. Synergies between all
business units will also be developed to better manage operational protocols
and procedures.
Litha Biotechnology will be looking for technology transfer arrangements with
existing and new strategic partners for products that can expand on its product
range for the South African and developing world markets.
As stated in the press, a lucrative 10-year joint venture was concluded with a
large European generics company. The Litha Pharma Division is set to introduce
a minimum of 80 new generic over-the-counter products within the same timeframe.
Launches of the first batch of product submissions should start in 2-3 years
once they have been approved by the MCC. Similarly plans are presently underway
to identify niche products and therapeutic areas, to secure a highly competitive
product pipeline.
These combined initiatives will assist in the group continuing to grow its
market share, operating profit and margins.
To consolidate existing markets and to drive growth and expansion into new
markets, the group will focus on leveraging the strengths of each of the
group`s divisions. Further cost reductions and streamlining of operations is
expected to reduce overhead costs of the larger group. With the appointment of
three divisional CEO`s for the Medical, Biotech and Pharma divisions, the group
anticipates greater alignment of the division`s operations to the group`s
strategy.
NOTES TO THE FINANCIAL STATEMENTS
1.ACCOUNTING POLICIES
The reviewed condensed consolidated results have been prepared in accordance
with the Framework concepts and the measurement and recognition requirements
of the International Financial Reporting Standards and containing information
required by the IAS 34 Interim Financial Reporting and in the manner required
by the Companies Act.
The interim report has also been prepared in accordance with and containing
the information required by AC 500 series as issued by the Accounting Practices
Board or its successor. The reviewed condensed consolidated interim financial
statements are prepared on the historical cost basis, with the exception of
certain financial instruments which are measured at fair value. The results
of the interim period are not necessarily indicative of the results for the
entire year. During the prior year, the directors resolved to change the
financial year end from 31 May to 31 December. Accordingly, these interim
results are for the 6 months ended 30 June 2010, and the comparative period
is the 6 months ended 30 November 2009 These financial statements should be
read in conjunction with the audited financial statements for the 7 months
ended 31 December 2009. The interim financial statements for the period
ending 30 June 2010 have been reviewed, but not audited, by Mazars, the
group`s auditors. Their unqualified review report is available for inspection
at Litha`s registered office during normal business hours.
The preparation of condensed consolidated interim financial statements requires
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 condensed consolidated interim 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 7 months ended 31 December 2009.
2.SUBSEQUENT EVENTS
Subsequent to the period end, the group sold its 26% holding in BioMerieux (Pty)
Ltd and is in the process of selling its 10% holding in Arrow Pharma SA (Pty)
Ltd in line with its strategy of divesting in non controlling interests held by
Litha Healthcare Holdings (Pty) Ltd before the acquisition of it by the group.
No other events material to the understanding of the report have occurred in the
period between 30 June 2010 and the date of this report.
3.RELATED PARTY TRANSACTIONS
There were no material trading transactions between related parties during the
reporting period.
4.ACQUISITION OF LITHA HEALTHCARE HOLDINGS (PTY) LTD AND PHARMAFRICA (PTY) LTD
As previously reported, the group acquired 51% of the issued share capital of
Litha Healthcare Holdings (Pty) Ltd ("LHH") and the remaining 74% of shares in
Pharmafrica (Pty) Ltd ("Pharmafrica") not already owned by the group. LHH owned
26% of Pharmafrica before 1 May 2010. On acquisition of Pharmafrica, LHH
revalued their holding in terms of IFRS 3(R), which resulted in a profit on
revaluation of R4.513 million taking the fair value of the 26% holding to
R20.703 million. The purchase price allocation exercise has not been completed
at the date of this announcement; therefore the balances and goodwill allocation
for the LHH and Pharmafrica acquisitions have been provisionally accounted for
in terms of IFRS 3 (R) Business Combinations. As part of the transaction
concluded with LHH, put and call options are in place to purchase the remaining
49% not already owned by the group at a price earnings ratio of 7.2 times 49% of
the average profit after tax earned by LHH for the two years preceding the date
on which the option is exercised. The Pharmafrica shares were acquired for a
total purchase consideration of R 58.9 million payable as follows: R37.5 million
on the date on which the acquisition was implemented; R8.7 million to be paid on
4 June 2011; R8,7 million on 4 June 2012 and R4,0 million on 30 September 2012.
(All amounts are to be paid together with interest thereon at the prime rate
calculated from the effective date)
Qualitative factors that make up goodwill of LHH include: Experience and regard
for their executive management team, the high barriers to entry to their vaccine
and pharmaceutical businesses, the strong relationships that they have with the
public and private healthcare sector, the scale that LHH brings to the group and
the potential to unlock savings by centralising certain functions where
operationally and commercially justifiable. Qualitative factors that make up
goodwill in Pharmafrica include the high barriers to entry in their
pharmaceutical business, the high regard that the market has for Pharmafrica`s
products and the brand strength of the products.
(R`000)
LHH Pharmafrica
Effective date of acquisition for 1 May 2010 1 May 2010
accounting purposes
Voting equity percentage 51% 100% (30% owned
by LHG and 70%
owned by LHH).
Number of shares issued (Issued at 42 800 000 -
80c per share)
At acquisition values (At 1 May (R`000) (R`000)
2010)
Non-current assets acquired 90,851 1,552
Accounts receivable 98,756 9,681
Other current assets 471,350 22,000
Non-current liabilities assumed (46,087) (307)
Current liabilities assumed (459,249) (17,983)
Net asset value 155,621 14,943
Cost of acquisition 114,240 58,926
Goodwill 66,056 42,499
Revenue for the period 1 May 2010 to 252,647 10,778
30 June 2010
Profit for the period 1 May 2010 to 10,421 1,942
30 June 2010
Revenue for the period 1 January to 556,516 23,455
30 June 2010
Profit for the period 1 January to 22,747 4,932
30 June 2010
On acquisition, cash and cash equivalents were R167.9 million in LHH and R5.7
million in Pharmafrica. Average debtors days outstanding in LHH are 78 days and
75 days in Pharmafrica. LHH and Pharmafrica assess impairment on individual
receivables and there are currently no material receivables considered
irrecoverable. The net asset value of receivables acquired equals their fair
value.
5.ACQUISITIONS AND DISPOSALS OF PROPERTY, PLANT AND EQUIPMENT
During the period under review, the group purchased property, plant and
equipment as follows:
Medical device division: R3.1 million
Pharmaceutical division: R0.2 million
Biotechnology division: R4.5 million
There were no material disposals of equipment or other assets.
6. SEGMENT INFORMATION
Segment Medical Pharmaceutical Biotechnology Group
device division division
division (Two months) (Two months)
(R`000)
6 months ended
30 June 2010
Turnover 157,295 10,789 243,976 412,060
(External)
Reportable 32,233 2,759 18,721 53,713
segment profit
Inter-group (11,414)
services
(including
logistics)
Net interest (1,111)
paid
Taxation (12,536)
Profit for the 28,652
period
Non-controlling (11,104)
interest
Profit for the 17,548
period
attributable to
equity holders
of the parent
6 months ended
30 November
2009
Turnover 153,201 - - 153,201
(External)
Reportable 24,643 - - 24,643
segment profit
Inter-group (4,552)
services
Net interest (396)
paid
Taxation (5,514)
Profit for the 14,181
period
attributable to
equity holders
of the parent
7 months ended
31 December
2009
Turnover 176,876 - - 176,876
(External)
Reportable 26,763 - - 26,763
segment profit
Inter-group (5,311)
services
Net interest (606)
paid
Taxation (6,256)
Profit for the 14,590
period
attributable to
equity holders
of the parent
The basis for the segmental reporting changed during the period under review due
to the acquisitions and the restructuring of the management reporting formats.
DIVIDEND
No dividend has been recommended or declared for the interim period. It is
anticipated that while Litha Biotechnology continues to invest in infrastructure
and with further investments anticipated in the Litha Pharmaceutical division,
we will continue to reinvest any profit generated back into the business.
For and on behalf of the board
AD Bonamour, Chairman
Johannesburg
21 September 2010
Directors: AD Bonamour*, S Kahanovitz, M Makhoana, M Kahanovitz, N Sowazi*, W
Marshall-Smith*, M Mzimba*
(*non-executive)
Sponsor
Java Capital
Auditors
Mazars
Transfer Secretaries
Computershare Investor Services
Registered Office
Manta Place
Turnberry Office Park
48 Grosvenor Road
Bryanston
2191
Date: 21/09/2010 08:00:06 Produced by the JSE SENS Department.
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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.
