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LAB
LAB
LAB - Labat Africa Limited - Unaudited interim results for the six months
ended 31 August 2011 and withdrawal of cautionary
LABAT AFRICA LIMITED
Incorporated in the Republic of South Africa
(Registration number 1986/001616/06)
JSE code: LAB ISIN: ZAE000018354
("Labat" or "the company")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2011 AND
WITHDRAWAL OF CAUTIONARY
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months 12 months
31 August 31 August 28
2011 2010 February
2011
R`000 R`000 R`000
Revenue 8,133 13,268 29,915
Continuing operations 8,133 13,268 27,550
Discontinued operations - - 2,365
Operating (loss)/profit before (1,098) 3,610 (2,817)
depreciation, interest,
taxation and fair value
adjustments
Continuing operations 1,210 7,391 3,510
Discontinued operations (2,308) (3,781) (6,327)
Depreciation (311) (436) (883)
Continuing operations (100) (155) (99)
Discontinued operations (211) (281) (784)
Operating (loss)/profit before (1,409) 3,174 (3,700)
interest and taxation
Continuing operations 1,110 7,236 3,411
Discontinued operations (2,519) (4,062) (7,111)
Interest paid - (1,331) (860)
Continuing operations - (140) (133)
Discontinued operations - (1,191) (727)
Interest received - 3 175
Continuing operations - 3 175
Discontinued operations - - -
(Loss)/profit before taxation, (1,409) 1,846 (4,385)
sale and fair value
adjustments
Continuing operations 1,110 7,099 3,454
Discontinued operations (2,519) (5,253) (7,839)
Fair value adjustments- 7,560 (5,825) 15,977
discontinued operations
Impairment of financial asset - (968) -
Expenses relating to - (4,857) (1,023)
discontinued operations
Gain on impairment of 7,560 - 17,757
loan/reversal of provision for
interest
Impairment of plant and - - (757)
equipment
Profit/(loss) before taxation 6,151 (3,979) 11,592
Continuing operations 1,110 7,099 3,454
Discontinued operations 5,041 (11,078) 8,138
Income tax - - (118)
Profit /(loss) for the period 6,151 (3,979) 11,474
after taxation
Continuing operations 1,110 7,099 3,454
Discontinued operations 5,041 (11,078) 8,020
Attributable to
Shareholders of Labat Africa 6,151 (3,979) 11,474
Limited
Reconciliation of headline
earnings
Basic profit/(loss) 6,151 (3,979) 11,474
Sale of assets (49) - (1,050)
Impairment of plant ,equipment - 968 1,780
and divisions
Headline earnings/(loss) for 6,102 (3,011) 12,204
the period
Weighted Shares in issue 197,155 197,155 197,155
throughout the period (`000)
Basic profit/( loss) per share 3.1 (2.0) 5.8
(cents)
-Continuing operations 0.5 3.6 1.8
-Discontinued operations 2.6 (5.6) 4.0
Headline profit/( loss) per 3.1 (1.5) 6.2
share (cents)
-Continuing 0.5 3.6 1.8
-Discontinuing 2.6 (5.1) 4.4
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
at at at
31 August 31 August 28
2011 2010 February
2011
R`000 R`000 R`000
ASSETS
Non-current assets 672 566 539
Property, plant and equipment 402 387 360
Intangible asset 91 - -
Other financial asset 179 179 179
Current Assets 9,552 11,024 12,267
Inventories 3,985 1,195 3,091
Trade and other receivables 3,341 6,430 4,376
Cash and cash equivalents 2,226 3,399 4,800
Assets of disposal group 36,362 37,703 35,026
classified as held for sale
TOTAL ASSETS 46,586 49,293 47,832
EQUITY AND LIABILITIES
Share capital and reserves (34,121) (55,970) (40,518)
Long-term liabilities 11,992 5,916 11,340
Current Liabilities 4,547 10,696 4,789
Trade and other payables 4,547 10,696 4,789
Liabilities of disposal group 64,168 88,651 72,221
classified as held for sale
TOTAL EQUITY AND LIABILITIES 46,586 49,293 47,832
Number of shares in issue 197,155 197,155 197155
(`000)
Total Net asset value per share (9.5) (20.5) (12.7)
(cents)
CONDENSED GROUP STATEMENT OF CASHFLOWS
Unaudited Unaudited Audited
6 months 6 months 12 months
31 August 31 August 28
2011 2010 February
2011
R`000 R`000 R`000
Net flow from operating (1,709) 7,024 (5,585)
activities
Net flow from investing (809) (8,149) 4,101
activities
Net flow from financing (56) (313) 4,840
activities
Net (decrease)/increase in (2,574) (1,438) 3,356
cash
Cash at beginning of period 4,800 1,444 1,444
Cash at end of period 2,226 6 4,800
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
R`(000) Share Share Treasury Distri- Total
Capita Premiu Shares butable Capital
l m Reserves and
reserves
Balance 1,972 49,065 (482) (91,073) (40,518)
at 1
March
2011
Profit 6,151 6,151
for the
period
Adjust- 246 246
ments
relatin
g to
disposa
l group
Balance 1,972 49,065 (482) (84,676) (34,121)
at 31
August
2011
Notes to the Interim Report
1. Discontinued Operations 31 August 31 August 28 February
2011 2010 2011
R`000 R`000 R`000
Assets
Fixed Assets 32,700 34,618 33,651
Intangible Assets 1,710 - 1,375
Other assets 1,952 3,085 -
36,362 37,703 35,026
Liabilities
Non Distributable 15,461 15,462 15,461
reserves
Long term liabilities 26,460 34,020 34,020
Current liabilities 15,012 31,934 15,505
Deferred tax 7,235 7,235 7,235
64,168 88,651 72,221
Cash flow
Net operating activities (3,232) (5,005) (11,163)
Net investing activities- 1,505 - -
sale of assets
Net decrease in cash and (1,727) (5,005) (11,163)
cash equivalents
Condensed Segment Report
2.
R`000 R`000 R`000
Revenue by Segment 8,133 13,268 29,915
Technology 8,133 13,268 29,915
Other operations - - -
Profit/(loss) from (1,098) 3,610 (2,817)
operations before
finance costs,
depreciation and fair
value adjustments by
segment
Technology 617 3,884 713
Other operations* (1,715) (274) (3,530)
Trade and Accounts 4,547 10,696 4,789
payable by segment
Technology 731 5,944 1,181
Other operations 3,816 4,752 3,608
Intangible assets 91 - -
Technology 91 - -
Other operations - - -
Trade and Accounts 3,341 6,430 4,376
receivable by segment
Technology 3,337 5,116 4,372
Other operations 4 1,314 4
Long Term Liabilities by 11,992 5,916 11,340
segment
Technology - - -
Other operations 11,992 5,916 11,340
Non Current Assets 402 387 360
Technology 376 328 328
Other operations 26 59 32
* Other operations incorporate the company, group adjustments and
eliminations.
COMMENTARY
RESULTS
The group is pleased to report positive results for the period under review.
Total comprehensive income for the period was R6,1 million versus a loss of
(R3,9) million for the corresponding period ended 31 August 2010.
Continuing Operation
The continuing operation which constitutes the Integrated Circuit ("IC")
business is operating profitably but has suffered a decline in revenue due to
a fall in world demand. Manufacturing has been completely transferred to the
plant in China and production quality and margins are very satisfactory.
Research and Development
The Company has embarked on a major, two year, R&D programme to re-design all
existing products to 0.5 micron. At the same time the products will be
enhanced to meet customer needs. Some of the design work will be outsourced
due to the acute shortage of suitably qualified designers in South Africa.
Discontinuing Operations
The old SAMES facilities have been completely closed and the remaining assets
including the properties are being disposed of. The process of selling some
of the fixed assets is going well and is expected to be completed within the
next financial year and a buyer is being sought for the property.
Prospects
The current IC business is doing well and its prospects are good. Capacity
constraints relating to the closed manufacturing plant no longer exist and our
emphasis is now on growing our market and developing new and improved
products.
Acquisitions
The group is now focused on expansion by acquisition and has identified
several areas for targeted acquisitions. The GEM $100 million line of credit
as previously announced will be used to fund suitable large acquisitions in
pharmaceuticals, mining and in property investments.
Pharmaceuticals
The SAMES property has proven to be too small to house a 1000 ton production
facility, which is the optimum size and, an alternative site is being sought.
Phase two of the project is now being commenced in conjunction with the IDC.
Mining
Various discussions are taking place with a view to identifying suitable
mining acquisitions.
Basis of preparation
The condensed group interim financial statements of Labat Africa Limited for
the six months ended 31 August 2011 comprise the company and its subsidiary.
The condensed consolidated interim financial statements are prepared in
accordance with International Financial Reporting Standards, International
Accounting Standard (IAS 34) Interim Financial Reporting, and in the manner
required by the Companies Act of South Africa, 71 of 2008. The accounting
policies applied by the group in these condensed group interim financial
statements are consistent with those applied by the group in the audited
financial statements for the year ended 28 February 2011. These interim
results are unaudited and have not been reviewed by the auditors.
Withdrawal of Cautionary
Shareholders are referred to the SENS announcements dated 29 August 2011 and
11 October 2011 and are advised that as the negotiations mentioned there-in
have been terminated, the said cautionary announcements are withdrawn.
Corporate Governance
The group subscribes to the values of good corporate governance at all levels
and is committed to conducting business with discipline, integrity and social
responsibility.
Post Balance Sheet Events
Management is not aware of any material events which occurred subsequent to
the period ended 31 August 2011.
Dividends
In line with group policy, no dividend has been declared. The directors are
not recommending the payment of a dividend until the negative equity position
of the group has been reversed.
Going Concern
The board of directors is of the opinion that the group has sufficient
resources to continue as a going concern.
For and on behalf of the board.
B G VAN ROOYEN Prepared by: D Asmal CA(S.A.)
CEO
30 November 2011
Directors: B van Rooyen (CEO), D Asmal CA(S.A.) (FD), D O`Neill, B Jacobs, D
Lupungela
Company Secretary: A Britto
Sponsors
Arcay Moela Sponsors (Pty) Ltd
Date: 30/11/2011 17:14:01 Produced by the JSE SENS Department.
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