| Fri 18 Mar 2011, 7:05 | | BIO - BioScience Brands - Unaudited results for the six months ended 31 December |
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BIO
BIO
BIO - BioScience Brands - Unaudited results for the six months ended 31 December
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")
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2010
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2010
Unaudited Unaudited Audited
31 December 31 December 30 June 2010
2010 2009
R R R
ASSETS
Non-current assets 50 002 242 56 136 456 56 665 926
Plant and equipment 760 889 1 197 449 924 573
Intangible assets 48 159 016 54 659 016 54 659 016
Deferred tax 1 082 337 279 991 1 082 337
Current assets 14 729 928 24 779 494 20 232 948
Inventories 7 360 408 11 103 990 9 791 385
Trade and other receivables 7 084 844 13 095 850 10 039 734
Cash and cash equivalents 284 676 579 654 401 829
Total assets 64 732 170 80 915 950 76 898 874
EQUITY AND LIABILITIES
Total equity 34 165 049 47 543 475 44 261 961
Issued capital 262 136 244 287 262 136
Share premium 113 138 607 111 371 533 113 138 607
Accumulated loss (79 235 694) (64 072 345) (69 138 782)
Non-current liabilities - 6 373 -
Loans and borrowings - 6 373 -
Current liabilities 30 567 121 33 366 102 32 636 913
Taxation payable 1 928 433 1 928 433 1 928 433
Trade payables 8 375 634 11 382 432 10 413 690
Other payables and accruals 10 319 839 9 152 773 10 011 276
Short term portion of loans 748 277 2 629 533 766 115
and borrowings
Bank overdraft 9 194 938 8 272 931 9 517 399
Total equity and 64 732 170 80 915 950 76 898 874
liabilities
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 6 MONTH PERIOD ENDED 31 DECEMBER 2010
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June 2010
2010 2009
R R R
Revenue 19 471 709 28 513 307 51 370 241
Cost of sales (9 286 340) (12 470 734) (24 176 094)
Gross profit 10 185 369 16 042 573 27 194 147
Operating expenses (13 087 900) (16 112 143) (31 898 566)
Impairment of intangible (6 500 000) - -
asset
Operating loss (9 402 531) (69 570) (4 704 419)
Net financing costs (694 381) (930 644) (2 164 578)
Loss before taxation (10 096 912) (1 000 214) (6 868 997)
Taxation - (379 440) 422 906
Loss and comprehensive loss (10 096 912) (1 379 654) (6 446 091)
for the period
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 6 MONTH PERIOD ENDED 31 DECEMBER 2010
Unaudited Unaudited Audited
6 months ended 6 months 12 months
31 December 2010 ended ended
31 December 30 June
2009 2010
R R R
Cash flows generated from 183 304 1 497 443 156 908
operating activities
Cash flows from (used in) 39 842 (414 184) (411 074)
investing activities
Cash flows used in financing (17 838) (1 871 523) (1 956 391)
activities
Net increase (decrease) in 205 308 (788 264) (2 210 557)
cash and cash equivalents
Cash and cash equivalents at (9 115 570) (6 905 013) (6 905 013)
beginning of period
Cash and cash equivalents at (8 910 262) (7 693 277) (9 115 570)
end of period
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 6 MONTH PERIOD ENDED 31 DECEMBER 2010
Unaudited Unaudited Audited
6 months ended 6 months 12 months
31 December 2010 ended ended
31 December 30 June
2009 2010
R R R
Balance at beginning of the 44 261 961 48 923 129 48 923 129
period
Issue of share capital - - 1 784 923
(Loss)/profit for the period (10 096 912) (1 379 654) (6 446 091)
Balance at end of the period 34 165 049 47 543 475 44 261 961
1 BASIS OF PREPARATION AND ACCOUNTING POLICIES
The interim financial results have been prepared in accordance with IAS 34:
Interim Financial Reporting and using accounting policies in compliance with
International Financial Reporting Standards, the AC 500 statements as issued by
the Accounting Practices Board and the Companies Act in South Africa and is
consistent with the prior period.
BioScience has adopted all the statements and interpretations issued and
effective during the current period by the International Accounting Standards
Board ("IASB"). The adoption of these standards and interpretations did not have
any significant impact on the financial results.
The Company`s auditors have not reviewed or audited these results for the six
months ended 31 December 2010.
2 EARNINGS, HEADLINE EARNINGS AND NET ASSET VALUE PER SHARE
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2010 2009 2010
Cents per Cents per Cents per
share share share
Loss per share
Basic and diluted (0.3852) (0.0565) (0.2629)
Headline loss per share
Basic and diluted (0.1383) (0.0575) (0.2610)
Net asset value per share 1.30 1.95 1.69
Weighted average shares in issue
(`000)
Basic and diluted 2 621 363 2 442 870 2 451 673
R R R
Calculation of headline earnings:
Comprehensive loss for the period (10 096 912) (1 379 654) (6 446 091)
Adjustments for:
(Profit) loss on disposal of (28 179) (24 560) 46 959
property, plant and equipment
Impairment of intangible asset 6 500 000 - -
Headline(loss)/profit for the (3 625 091) (1 404 214) (6 399 132)
period
3 COMMENTARY
BioScience Brands Limited ("BioScience") has continued to trade in a difficult
consumer environment where the discretionary spend on complementary health and
nutritional products remains depressed. In addition, Bioharmony (Pty) Ltd
("Bioharmony"), a BioScience subsidiary, has been in dispute with Patrick
Holford over his purported right to terminate the exclusive licence agreement
applicable to 15 of the 42 Bioharmony products as ruled by an arbitration.
Bioharmony is in the process of appealing the arbitrator`s award. Although fixed
costs continue to be well managed, this dispute has resulted in Bioharmony
incurring legal costs in the period.
In order to focus its limited resources on its larger brands, BioScience
intended to reverse the Phyto Nova acquisition by returning the business to
Thebe Medicare (Pty) Ltd, now Akacia Healthcare (Pty) Ltd ("Akacia"), and
receiving back the 257 142 857 shares issued just prior to listing. This
transaction did not proceed but nevertheless the Phyto Nova intangible asset was
impaired by R6.5m from R9m during this interim reporting period to reflect its
current valuation. Subsequent to the interim reporting period, BioScience has
disposed of the Phyto Nova brand to Akacia for R2.5 million thereby alleviating
some pressure on working capital and fulfilling the strategy to focus resources
on its larger brands.
In addition, BioScience has also had to make fundamental changes to its business
operations to survive the difficult trading environment. In terms of a Heads of
Agreement ("HOA") concluded between BioScience and Akacia and as announced on
SENS on 18th February 2011, BioScience has agreed to outsource a significant
portion of its operational head office functions to Akacia from 1 April 2011 to
further reduce costs and improve effectiveness by being represented by a much
bigger company operating in exactly the same channels that BioScience operates
in. As a result BioScience will close its head office in Durban and relocate to
Akacia`s offices at 4 Brewery Road, Isando from 1 April 2011.
The outsourcing includes sales, distribution management, administration, supply
chain management including logistics and procurement, regulatory and quality
management and operational brand management. It will exclude strategic planning,
corporate finance functions, investor and securities exchange relationships,
legal, SARS relationships as well as financial reporting.
Substantive agreements covering:
the management agreement (which includes the terms for the outsourcing);
a loan by Akacia (the "Akacia loan"); and
a share issue to Akacia,
(collectively the "substantive agreements")
are in the process of being negotiated and developed in further detail. The
completion and signature of each of the substantive agreements will replace the
corresponding provisions in the HOA and the detailed terms of these agreements
will be announced after which the relevant shareholder and regulatory approvals
will be obtained. The Akacia loan together with the proceeds of the Phyto Nova
brand disposal (which was announced on the 10th February 2011), will be used to
fund initial restructuring costs, repayment of liabilities and funding of
working capital.
A segmental analysis has not been prepared as the group does not have more than
one segment and operates within South Africa.
4 DIRECTOR RESIGNATIONS
At the Company`s Annual General Meeting held on 7 December 2010 Mr M Strydom was
not re-elected as a non-executive director, and accordingly resigned from that
date. Post period-end Mr M Di Nicola resigned as a non-executive director on 2
February 2011.
5 CONTINGENCIES AND COMMITMENTS
The group has no outstanding contingencies or commitments that the directors are
aware of.
6 DIVIDENDS
No dividends have been declared for the period under review.
7 ACQUISITIONS, DISPOSALS AND ISSUES OF SHARES FOR CASH
During the period under review, there were no acquisitions, disposals or issue
of shares.
8 FUTURE PROSPECTS
In the Board`s opinion the outsourcing of BioScience`s operational functions to
Akacia, subject to the required shareholder and stakeholder approvals, will have
a positive impact on overhead costs with the closure of the Durban head-office.
In addition Akacia, with its large and established sales operations, should
increase the sales footprint of all the brands.
By order of the Board
MG Allan PA Ireland
Chief Executive Officer Financial Director
18 March 2011
Durban
Company Secretary
Statucor (Pty) Ltd
Registered Office and Business Address
10 Ennisdale Drive, Durban North, Durban, 4051
PO Box 1955, Durban, 4000
Directors
MG Allan (Chief Executive Officer), PA Ireland (Financial
Director), Y Bhayat*, JJ Fenster*.
(*Non-executive)
Designated Advisor Transfer Office
PricewaterhouseCoopers Computershare Investor Services
Corporate Finance (Pty) (Pty) Ltd
Ltd
Date: 18/03/2011 07:05:25 Produced by the JSE SENS Department.
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