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IMU
IMU
IMU - Imuniti - Unaudited Interim Results for the six months ended 31 August
2010
Imuniti Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2004/002282/06)
(JSE Code: IMU & ISIN: ZAE000089199)
("Imuniti" or "the company" or "the group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED
31 AUGUST 2010
GROUP STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months Year
ended ended ended
31-Aug 31-Aug 28-Feb
2010 2009 2010
Unaudited Unaudited Audited
R R R
Revenue 26,533,855 27,461,588 53,607,034
Gross profit 13,406,346 11,187,713 21,820,544
Gross profit % 50.5% 40.7% 40,7%
Other income 138,333 315,579 2,734,687
Operating costs -15,989,370 -16,885,942 -33,120,373
Loss before interest -2,444,691 -5,382,650 -8,565,142
and taxation
Interest expense -378,600 -888,510 -1,695,786
Interest received 2,644 104,592 579,680
Loss before taxation -2,820,647 -6,166,568 -9,681,248
Taxation - - -
Net loss -2,820,647 -6,166,568 -9,681,248
Other comprehensive - - 680,000
income:
Gain on property
revaluation
Loss attributable to
ordinary shareholders -2,820,647 -6,166,568 -9,001,248
Reconciliation of
headline loss:
Loss attributable to -2,820,647 -6,166,568 -9,001,248
ordinary shareholders
Adjusted for:
Other comprehensive
income - - -680 000
Loss on sale of - 31,864 20,209
property, plant and
equipment
Headline loss -2,820,647 -6,134,704 -9,661,039
attributable to
ordinary shareholders
Weighted average 1,104,702 905,221 947,267
shares in issue on
which earnings per
share are based
(`000)
Shares in issue at 1,144,035 909,983 1,092,535
period end (`000)
Loss per share -0.26 -0.68 -0.95
(cents)
Headline loss per
share (cents) -0.26 -0.68 -1.02
GROUP STATEMENT OF FINANCIAL POSITION
31 August 31 August 28 February
2010 2009 2010
Unaudited Unaudited Audited
R R R
ASSETS
Non-current assets 21,906,909 22,957,346 22,638,425
Property, plant and 10,212,693 11,263,130 10,944,209
equipment
Intangible assets 11,694,216 11,694,216 11,694,216
Current assets 14,233,099 16,570,576 13,787,593
Inventories 5,105,161 6,858,554 5,439,518
Trade and other 8,942,747 9,668,706 7,430,269
receivables
Loans receivable 144,154 - 2,540
Current tax - 28,175 405,472
receivable
Cash and cash 41,037 15,141 509,794
equivalents
Total assets 36,140,008 39,527,922 36,426,018
EQUITY AND
LIABILITIES
Capital and reserves 18,685,936 18,256,513 20,863,277
Share capital and 113,301,963 107,217,213 112,658,657
premium
Accumulated loss -95,545,767 -89,210,440 -92,725,120
Revaluation reserve 929,740 249,740 929,740
Non-current
liabilities
Borrowings and other 832,660 1,527,166 1,398,178
payables
Current liabilities 16,621,412 19,744,243 14,164,563
Provisions 873,138 882,000 1,010,357
Current portion of 1,172,173 1,523,323 1,117,787
borrowings
Loans from related 822,817 104,759
parties 89,616
Current tax payable 131,036 - -
Trade and other 10,924,269 12,796,184 9,416,009
payables
Bank overdraft 3,431,180 3,719,919 2,515,651
Total equity and 36,140,008 39,527,922 36,426,018
liabilities
Shares in issue (`000) 1,144,035 909,983 1,092,535
Net asset value per 1.6 2.0 1.9
share (cents)
Net tangible asset 0.6 0.7 0.8
value per share (cents)
GROUP STATEMENT OF CHANGES IN EQUITY
Share Share Total
capital premium Share
capital
R R R
Balance at 1 March 2009 88,141 106,179,072 106,267,213
Issue of shares 2,857 947,143 950,000
Total comprehensive loss 0 0 0
for 6 months
Balance at 31 August 2009 90,998 107,126,215 107,217,213
Issue of shares 18,255 5,423,189 5,441,444
Total comprehensive loss 0 0 0
for 6 months
Balance at 1 March 2010 109,253 112,549,404 112,658,657
Issue of shares 5,150 638,156 643,306
Total comprehensive loss 0 0 0
for 6 months
Balance at 31 August 2010 114,403 113,187,560 113,301,963
Revaluation Retained Total
reserve Earnings equity
R R R
Balance at 1 March 2009 249,740 -83,043,872 23,473,081
Issue of shares - - 950,000
Total comprehensive loss - -6,166,568 -6,166,568
for 6 months
Balance at 31 August 249,740 -89,210,440 18,256,513
2009
Issue of shares - - 5,441,444
Total comprehensive loss 680,000 -3,514,680 -2,834,680
for 6 months
Balance at 1 March 2010 929,740 -92,725,120 20,863,277
Issue of shares - - 643,306
Total comprehensive loss - -2,820,647 -2,820,647
for 6 months
Balance at 31 August 929,740 -95,545,767 18,685,936
2010
GROUP STATEMENT OF CASH FLOW
6 months 6 months Year ended
ended ended
31-Aug 31-Aug 28-Feb
2010 2009 2010
Unaudited Unaudited Audited
R R R
Cash flow from operating -1,504,234 -1,774,233 -4,291,850
activities
Cash used in operations -1,664,786 -638,806 -2,446,938
Interest received 2,644 104,592 579,680
Interest paid -378,600 -888,510 -1,695,786
Tax refunded/(paid) 536,508 -351,509 -728,806
Cash flows from investing -12,226 -810,416 120,035
activities
Property, plant and -12,226 - -27,832
equipment acquired
Proceeds on disposals of - 92,500
property, plant and 147,867
equipment
Net movement in loans - 717,916 -
Cash flows from financing 132,174 522,589 5,429,508
activities
Long term borrowings -511,132 -427,411 -961,936
Proceeds on share issue 643,306 950,000 6,391,444
-1,384,286 -441,228 1,257,693
Change in cash and cash
equivalents
Cash and cash equivalents -2,005,857 -3,263,550 -3,263,550
at beginning of year
Cash and cash equivalents -3,390,143 -3,704,778 -2,005,857
at end of year
SEGMENTAL ANALYSIS
The Group has three reportable segments, which are the group`s strategic
business units.
31 August Nutritional Pharma- Con-
2010 Foods ceuticals Services solidated
Six months Six months Six months Six months
Figures in Ended Ended Ended Ended
Rand 31 31 31 31
August 2010 August 2010 August 2010 August 2010
Segment
revenue
Total revenue 24 305 320 2 228 535 1 020 000 27 553 855
Intersegment - - (1 020 000) (1 020 000)
revenue
Total external 24 305 320 2 228 535 - 26 533 855
revenue
Segment
results
Loss before
interest
and taxation (2 035 762) (222 830) (186 099) (2 444 691)
Finance costs (281 887) (96 713) - (378 600)
Finance income - - 2 644 2 644
Taxation - - - -
Other - - - -
comprehensive
income
Segment loss (2 317 649) (319 543) (183 455) (2 820 647)
Segment assets 20 618 390 4 182 757 49 315 331 74 116 478
Consolidated - - (648 327) (648 327)
eliminations
Intersegment (19 405) - (37 308 738) (37 328 143)
assets
Total external 20 598 985 4 182 757 11 358 266 36 140 008
assets
Segment 30 406 576 22 243 289 2 112 315 54 762 180
liabilities
Consolidation - - 631 631
eliminations
Intersegment (20 006 265) (17 302 474) - (37 308 739)
liabilities
Total external 10 400 311 4 940 815 2 112 946 17 454 072
liabilities
Capital and non-
cash items
Additions to
property, plant
and equipment 10 526 - 1 700 12 226
Disposals of
property, plant
and equipment - - - -
Depreciation 340 665 391 977 11 100 743 742
Impairment - (163 967) 2,637,192 -
losses
No. of 55 3 2 60
employees at
period end
31 August Nutritional Pharma- Con-
2009 Foods ceuticals Services solidated
Six months Six months Six months Six months
Figures in Ended Ended Ended Ended
Rand 31 31 31 31
August 2009 August 2009 August 2009 August 2009
Segment
revenue
Total revenue 25 814 765 1 852 392 880 000 28 547 157
Intersegment - (205 569) (880 000) (1 085 569)
revenue
Total external 25 814 765 1 646 823 - 27 461 588
revenue
Segment
results
Loss before
interest
and taxation (1 590 782) (2 564 642) (1 227 226) (5 382 650)
Finance costs (469 603) (418 907) - (888 510)
Finance income 73 314 - 31 278 104 592
Taxation - - - -
Other - - - -
comprehensive
income
Segment loss (1 987 071) (2 983 549) (1 195 948) (6 166 568)
Segment assets 22 155 782 5 572 046 12 126 353 39 527 922
Segment 29 047 517 21 875 374 3 011 126 21 271 409
liabilities
Capital and
non-cash items
Additions to
property,
plant
and equipment - - - -
Disposals of
property,
plant
and equipment - 124 364 - 124 364
Depreciation 518 233 374 666 29 560 922 459
Impairment - - - -
losses
No. of 60 49 3 112
employees at
period end
Note:
The comparative for the 6 months ended 31 August 2009 has been stated as per the
SENS announcement made last year i.e. consolidated eliminations, intersegmental
assets and intersegmental liabilities were not shown under the assets and
liabilities section.
COMMENTARY
These results have been prepared in terms of IAS 34: Interim Financial Reporting
and the accounting policies, which are in line with International Financial
Reporting Standards ("IFRS"). They are consistent with the prior year.
Nutritional Foods (Pty) Limited
During the period, Nutritional Foods underwent a major right-sizing and re-
structuring exercise to align the business with current market demand and to
position it to take full advantage of the opportunities that exist for its
products and brands in the market. The company was negatively affected during
this period by the extended school closures due to the Soccer World Cup (SWC) as
well as the public sector strikes. However, demand has since returned to normal.
Pharmaceuticals
The performance of this sector (Impilo Marketing and Impilo Drugs) was
constrained during the period by production challenges associated with the
upgrade of the Impilo factory by our outsourced manufacturer, namely Pac-Con.
Despite this, demand for the products remained strong and the company is well
prepared and positioned for the expected increase in throughput when the upgrade
project is completed. After several delays, it is expected that this will be
completed during the first half of 2011. The R10 million upgrade was essential
to ensure that the factory complied with the relevant MCC regulations and in
terms of our current agreement, this upgrade is being undertaken at no cost to
the shareholders of Imuniti. Shareholders are also advised that the company
receives rental income on the plant from Pac-Con.
Events after the reporting period
There are no material events after the period ended 31 August 2010 to report on.
However, shareholders are referred to the going concern paragraph below.
Prospects
The Board is pleased at this point with the progress that has been made in
stabilising the company and re-focusing the company strategy and structure on
the two underlying businesses. The Imuniti Head Office continued to operate with
an extremely lean structure with available resources being directed into the
underlying businesses in line with the company strategy. Despite the fact that
there were no sales of the Imuniti Wellness Pack during the period, demand for
the products and brands of the two underlying companies remains strong. There is
still considerable spare capacity at the Nutritional Foods factory in Klerksdorp
to take advantage of market opportunities that exist. However as reported
previously in the company`s Annual Report, the further injection of capital into
the company is critical to ensure the success of the business in realising its
full potential in the future.
NATURE OF THE BUSINESS
The company`s primary business focus is to manufacture, market and sell
pharmaceutical products and complementary and natural medicines as well as high-
protein fortified powdered nutritional food products and supplements.
FINANCIAL RESULTS
Financial Performance
Revenue at R26.5 million was 3.3% down on the comparative period last year.
However this reduction in revenue was offset by a significant improvement of
9.8% in the Gross Profit. This improvement translated to a Gross Profit for
the period of R13.4 million (50.5%) in comparison with the R11.2 million (40.7%)
of the previous period. This was mainly due to improved margins at Nutritional
Foods and the fact that the major write down of stock in the previous period did
not occur in this period.
Expenses at R16.0 million were 5.3% lower than the comparative period due to the
downsized Head Office and the significant savings in expenses as a result of the
Impilo sub-contracting arrangement.
The Operating Loss of R2.8 million was R3.3 million better than the comparative
period last year (loss of R6.2 million) mainly as a result of the improved
margins, decrease in expenses and stricter control over stocks.
Financial Position
Capital and reserves were R429 423 higher than the previous period. However due
to an increase in the number of shares in issue the Net Asset Value of the share
reduced from 2 cents to 1.6 cents.
The improvement in the accounts receivable, inventories and accounts payable
from the period comparative period primarily relate to the change to an
outsourcing model for the Impilo business.
CHANGES TO THE BOARD
There were no changes to the Board during the period under review.
SHARES ISSUED
During the period shares were issued for cash. The amount raised amounted to
R645 000. The shares were issued at 1.3 cents amounting to 51 500 000 ordinary
shares.
DIVIDEND
No dividend was declared for the 6 month period.
GOING CONCERN
Shareholders are advised that the unaudited interim results for the six months
ended 31 August 2010 have been prepared on the going concern concept. The
Annual Report for the year ended 28 February 2010 contained an emphasis of
matter as to going concern and the directors` report emphasised the need for the
company to be able to raise additional funding through, inter alia, the issue of
shares. As at today`s date, the unissued shares are not under the control of
the directors and a notice of a Special General Meeting will be issued in due
course. Shareholders are also referred to a separate cautionary announcement
relating to the intended resignation of two of the directors of Imuniti.
DURBAN
29 OCTOBER 2010
CORPORATE INFORMATION
Independent Non-executive Directors: M R Gahagan* (Chairperson), S R Bean.
Executive Directors: N P Lamble (Acting Chief Executive Officer) P H Fouche
(Financial Director)
* British
Registration number: 2004/002282/06
Registered address: Suite E101 Hampden Court, 7 Hampden Road, Durban
Postal address: PO Box 201966, Durban North, 4016
Company Secretary: P H Fouche
Telephone: (031) 312 4141
Facsimile: (031) 312 4595
Transfer Secretaries: Link Market Services (Pty) Ltd
Designated Advisor: Arcay Moela Sponsors (Pty) Ltd
Date: 29/10/2010 11:08:01 Produced by the JSE SENS Department.
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