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BIO
BIO
BIO - BioScience Brands Limited - Audited condensed consolidated financial
results for the year ended 30 June 2010
BioScience Brands Limited
(Registration number 2005/005805/07)
Incorporated in the Republic of South Africa
Share code: BIO
ISIN code: ZAE000115036
(BioScience" or "the Company")
AUDITED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2010
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2010
30 June 2010 30 June 2009
R R
ASSETS
Non-current assets 56 665 926 56 269 945
Plant and equipment 924 573 951 498
Intangible assets 54 659 016 54 659 016
Deferred tax 1 082 337 659 431
Current assets 20 232 948 29 371 752
Inventories 9 791 385 12 944 918
Trade and other receivables 10 039 734 14 453 195
Cash and cash equivalents 401 829 1 973 639
Total assets 76 898 874 85 641 697
EQUITY AND LIABILITIES
Total equity 44 261 961 48 923 129
Issued capital 262 136 244 287
Share premium 113 138 607 111 371 533
Accumulated loss (69 138 782) (62 692 691)
Non-current liabilities - 16 535
Loans and borrowings - 16 535
Current liabilities 32 636 913 36 702 033
Taxation payable 1 928 433 1 928 433
Trade and other payables 20 424 966 21 404 054
Short-term portion of loans and 766 115 4 490 894
borrowings
Bank overdraft 9 517 399 8 878 652
Total equity and liabilities 76 898 874 85 641 697
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30
JUNE 2010
30 June 2010 30 June 2009
R R
Revenue 51 370 241 66 503 641
Operating loss (4 704 419) (10 403 370)
Net financing costs (2 164 578) (2 998 453)
Loss before taxation (6 868 997) (13 401 823)
Taxation 422 906 (1 323 100)
Loss and comprehensive loss (6 446 091) (14 724 923)
for the year
Loss attributable to:
Equity holders of the parent (6 446 091) (14 724 923)
Basic and diluted loss per (0.26) (0.71)
share (cents)
Headline earnings
reconciliation:
IAS 33 Loss attributable to (6 446 091) (14 724 923)
equity holders of the parent
Adjusted for:
Loss (profit) on disposal of 46 959 (9 225)
plant and equipment
Headline loss (6 399 132) (14 734 148)
Headline and diluted loss per (0.26) (0.71)
share (cents)
Weighted average number of 2 451 672 812 2 076 377 504
shares on which loss and
headline loss per share are
based
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2010
30 June 2010 30 June 2009
R R
Cash flows from (used in) operating
activities:
Cash operating loss (4 266 420) (7 846 485)
Working capital requirements 6 587 906 4 792 897
Cash generated from (used in) 2 321 486 (3 053 588)
operating activities
Financing costs, taxation and (2 164 578) (2 998 453)
dividend
Cash flows from (used in) operating 156 908 (6 052 041)
activities
Cash flows used in investing
activities:
Replacement capital expenditure (411 074) (407 121)
Net investment in future operations - (12 481 468)
Cash flows used in investing (411 074) (12 888 589)
activities
Cash flows from (used in) financing (1 956 391) 12 303 314
activities
Net decrease in cash and cash (2 210 557) (6 637 316)
equivalents
Cash and cash equivalents at (6 905 013) (267 697)
beginning of year
Cash and cash equivalents at end of (9 115 570) (6 905 013)
year
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE
2010
30 June 2010 30 June 2009
R R
Share capital
Balance at beginning of the year 244 287 169 305
Issue of new shares 17 849 46 838
Shares in the process of being - 32 988
issued
Cancellation of share issue - (4 844)
Balance at end of the year 262 136 244 287
Share premium
Balance at beginning of the year 111 371 533 88 110 297
Issue of new shares 1 767 074 13 802 429
Shares in the process of being - 11 149 231
issued
Cancellation of share issue - (1 690 424)
Balance at end of the year 113 138 607 111 371 533
Accumulated Loss
Balance at beginning of the year (62 692 691) (47 967 768)
Loss for the year (6 446 091) (14 724 923)
Balance at end of the year (69 138 782) (62 692 691)
Total equity 44 261 961 48 923 129
OTHER SALIENT FEATURES 30 June 2010 30 June 2009
Net asset value per share 1.69 2.00
(cents)
Net tangible asset value per (0.40) (0.23)
share (cents)
Number of shares in issue at 2 621 362 757 2 442 870 452
period end
Depreciation (R) 391 040 383 891
Investment expenditure (R) 411 074 12 888 584
- expansion - 12 481 468
- replacement 411 074 407 121
Lease commitments (R)
- land and buildings 824 503 1 746 661
Net financing costs (R) 2 164 578 2 998 453
Interest paid 2 164 583 3 002 702
Less: Interest received (5) (4 249)
COMMENTARY
The board presents the results for the year ended 30 June 2010.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
The consolidated financial results of the company and its subsidiaries (together
referred to as the "group") has been prepared in accordance with the framework
concepts and the measurement and recognition requirements of International
Financial Reporting Standards (IFRS), the AC 500 standards as issued by
Accounting Practices Board, the Companies Act of South Africa, 1973, the
disclosure requirements of the Listing Requirements of the JSE Limited, and as
required by IAS 34: Interim Financial Reporting.
BioScience Brands has adopted all the statements and interpretations issued and
effective during the current period by the International Accounting Standards
Board ("IASB"). The accounting policies adopted are consistent with those
applied in the previous financial year, except for the adoption of International
Accounting Standard (IAS) 1 (revised) - Presentation of Financial Statements,
IFRS 7 - Financial Instruments: Disclosures, which were adopted during the
current accounting period. The adoption of these standards has resulted in
certain disclosure reclassifications but has not resulted in any changes in
accounting policy.
RESULTS
BioScience Brands Limited trades in the nutritional supplement retail sector
which is experiencing far-reaching transition. This is particularly evidenced in
the significant changes in the retail channel in which the company trades where
the major retail chains have massively increased their footprints in the last
two years to the detriment of the small niche retailers and pharmacies. Scale
and advertising spend is becoming increasingly important in this environment to
educate and inform consumer choices. BioScience Brands has successfully managed
its position in the changing retail environment and its key brands are listed in
all major Fast Moving Consumer Goods ("FMCG") retailers. However, the demand for
advertising spend and scale is challenging.
The company owns well recognised brands in the premium priced nutritional
supplements and sports nutrition categories. These are Bioharmony, Muscle
Science, including Xplode and Staminade, Herbology, Phyto Nova and KGB.
Recessionary trading conditions have affected sales and delayed BioScience`s
return to profitability in its second year following the take-over of Wellco
Health Limited. Overhead costs remain tightly controlled and have been reduced
by 33% to R18.9 million over last year whilst, despite pressure on revenue cash
generated from operating activities increased by 176%, from an outflow of R3.1
million to an inflow of R2.3 million. Much of the cash generated from operations
have been used to settle obligations and interest thereto, incurred as Wellco
Health Limited, (prior to restructuring).
The net loss for the year was R6.4 million compared to a loss of R14.7 million
for the prior period. EPS improved from a loss of 0.71 cents to a loss of 0.26
cents.
SEGMENTAL REPORTING
The group`s brands operate in one market segment and sales are made in South
Africa.
ACQUISITIONS AND DISPOSALS
There were no acquisitions or disposals during the year.
BOARD CHANGES
The following director appointments, resignations and changes
occurred during the year under review and up to and including
the date of this announcement:
Status
Date
JJ Fenster
JI Black
M Strydom
Appointed
Resigned
Executive to non-executive
10 September 2009
28 January 2010
1 February 2010
CONTINGENCIES AND COMMITMENTS
The directors are not aware of any contingencies and commitments at the date of
this report.
PROSPECTS AND GOING CONCERN
Having consolidated its trading base through listing at national retailers,
BioScience Brands is poised to grow as these chains continue to pursue
aggressive expansion strategies. However like FMCG products, vitamins and
supplements now require substantial above-the-line advertising. BioScience
Brands must compete with large companies who commit significant funds to command
sufficient share-of-voice to influence consumer behaviour. It is therefore
incumbent upon BioScience Brands to focus its resources towards maximising
return on high return brands whilst simultaneously pursuing substantial revenue
and cash flow improvements. This will involve a combined strategy of brand
rationalisation, mergers and acquisitions to ensure cash injection. In the
interim a stringent cost management programme is in place. Based on the
successful outcome of this strategy the directors are of the opinion that the
group will continue as a going concern and the company and the group financial
statements have been prepared on this basis.
AUDITED RESULTS - AUDITOR`S OPINION
The auditors, Deloitte & Touche, have issued their opinion on the group`s
financial statements for the year ended 30 June 2010. The audit was conducted in
accordance with International Standards on Auditing. They have issued an
unqualified audit opinion with an emphasis of matter relating to the material
uncertainty of the group`s ability to continue as a going concern. These
summarised financial statements have been derived from the group financial
statements and are consistent in all material respects, with the group financial
statements. A copy of their audit report is available for inspection at the
company`s registered office.
DIVIDENDS
No dividend has been declared for the period under review (2009: R nil)
SHARE CAPITAL
During the year under review 178 492 305 ordinary shares were issued. The
proceeds of the issue were used to settle a claim relating to interest incurred
following the acquisition of Bioharmony (Pty) Ltd and Aldabri 53 (Pty) Ltd in
2008.
CHANGE IN COMPANY SECRETARY
BioScience Brands appointed Statucor (Pty) Ltd, a member company of BDO
International, as its Company Secretary on 01 November 2009.
By order of the Board
MG Allan
Chief Executive Officer
27 September 2010
Johannesburg
Company Secretary and Registered Office
Statucor (Pty) Ltd
10 Ennisdale Drive, Durban North, 4051
PO Box 1955, Durban, 4000
Directors
MG Allan (Chief Executive Office), PA Ireland, M Strydom*, Y
Bhayat*, MM Di Nicola*, JJ Fenster*#.
(* Non-executive) (# independent)
Designated Advisor Transfer Office
PricewaterhouseCoopers Computershare Investor
Corporate Finance (Pty) Ltd Services (Pty) Ltd
Date: 27/09/2010 17:30:01 Produced by the JSE SENS Department.
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