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NUT
NUT
NUT - Nutritional Holdings Limited - Abridged annual financial results for the
year ended 29 February 2012 and notice of the Annual General Meeting
Nutritional Holdings Limited
(Previously Imuniti Holdings Limited)
Reg no 2004/002282/06
(Incorporated in the Republic of South Africa)
("the Group" or "the Company")
Share code : NUT ISIN : ZAE000156485
ABRIDGED ANNUAL FINANCIAL RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2012 AND
NOTICE OF THE ANNUAL GENERAL MEETING
Financial Highlights
Increase in Earnings per Share 33.3%
Increase in Net Asset Value per Share 17.4%
Increase in Gross Profit percentage to 48.7%
The audited financial results are presented on a consolidated basis
Condensed consolidated Statement Audited Audited
of Comprehensive Income for the year ended year ended
year ended 29 Feb 2012 28 Feb 2011
R`000
Revenue 41 067 46 708
Gross Profit 20 012 21 712
Other income 272 481
Operating expenses (25 603) (26 737)
Impairment reversal - Distribution
rights 7 200 -
Finance costs (577) (1 070)
Investment revenue 577 1 039
Profit (loss) before taxation for 1 881 (4 575)
the year
Taxation 738 6 239
Profit for the year 2 619 1 664
Other comprehensive income:
Gain on property revaluation 2 909 3 900
Taxation related to components of
other comprehensive income (797) (1 022)
Other comprehensive income for the
year net of taxation 2 112 2 878
Total comprehensive income for the
year 4 731 4 542
Earnings per share (cents) - basic
and diluted 0.20 0.15
Headline (loss) earnings per share
(cents) - basic and diluted -0.35 0.14
Number of ordinary shares in issue
(000)
- issued net of treasury shares 1 489 768 1 144 035
- weighted-average 1 297 890 1 120 493
- Diluted weighted-average 1 297 890 1 120 493
Calculation of headline earnings
(R`000)
Total profit for the year 2 619 1 664
Reversal of impairment of
distribution rights (7 200) -
Loss (profit) on disposal of
property, plant and equipment 3 (83)
Headline (loss) earnings
attributable to ordinary
shareholders (4 578) 1 581
Condensed Consolidated Statement Audited Audited
of Financial Position year ended year ended
for the year ended 29 Feb 2012 28 Feb 2011
R` 000
ASSETS
Non-current assets
Property, plant and equipment 14 251 11 656
Intangible assets 18 943 11 694
Deferred tax 8 757 8 486
Finance lease receivables - 1 147
41 951 32 983
Current assets
Inventories 4 829 3 999
Trade and other receivables 6 268 6 439
Loans receivable 9 8
Finance lease receivables 1 147 751
Cash and cash equivalents 630 56
12 883 11 253
TOTAL ASSETS 54 834 44 236
EQUITY AND LIABILITIES
Equity
Stated capital 123 231 113 302
Reserves 5 659 3 547
Accumulated loss (88 181) (90 800)
40 709 26 049
Non-current liabilities
Interest-bearing borrowings 30 601
Deferred tax 3 600 3 270
3 630 3 871
Current liabilities
Trade and other payables 4 277 9 764
Loans payable - 1 200
Current tax payable - 141
Bank overdraft 5 631 2 332
Current portion of interest-
bearing borrowings 587 879
10 495 14 316
TOTAL EQUITY AND LIABILITIES 54 834 44 236
Net asset value per share (cents) 2.7 2.3
Condensed consolidated Audited Audited
statement of cash flows year ended year ended
for the year ended 29 Feb 2012 28 Feb 2011
R` 000
Cash utilised by operations (10 930) (2 042)
Finance costs (577) (1 070)
Investment revenue 577 1 039
Taxation (paid) refunded (141) 547
Cash flows from operating
activities (11 071) (1 526)
Cash flows from investing
activities (270) 2 495
Cash flows from financing
activities 8 616 (1 229)
Total cash movement for the
year (2 725) (260)
Cash and cash equivalents at
beginning of year (2 276) (2 016)
Cash and cash equivalents at
end of year (5 001) (2 276)
Condensed
Consolidated
Statement of
Changes in Equity Share/Stated Share Treasury
for the year ended capital premium Shares
29 February 2012
R` 000
Balance at 28
February 2010 -
audited 109 112 549
Issue of shares 5 639
Total comprehensive
income for the year
Balance at 28
February 2011 -
audited 114 113 188
Issue of shares 16 670 (6 741)
Conversions of shares
to no par value 113 188 (113 188)
Total comprehensive
income for the
year
Balance at 29
February 2012 129 972 - (6 741)
Total
Accumulated equity
loss
R` 000 Revaluation
reserve
Balance at 28
February 2010 -
audited 669 (92 464) 20 863
Issue of shares 644
Total comprehensive
income for the year 2 878 1 664 4 542
Balance at 28
February 2011 -
audited 3 547 (90 800) 26 049
Issue of shares 9 929
Conversions of shares
to no par value
Total comprehensive
income for the year 2 112 2 619 4 731
Balance at 29
February 2012 5 659 (88 181) 40 709
Condensed Group
segmental
analysis for the
year ended 29
February 2012 -
audited
Operating Nutritional Pharmaceutical Services Consolidated
Segments Foods
R`000
Revenue from
external sales 37 393 3 674 - 41 067
Segment profit
(loss) before
tax 4 825 4 501 (5 333) 3 993
Taxation
738
Segment profit
for the year 4 731
for the year
ended 28
February 2011 -
audited
Revenue from
external sales 43 327 3 381 - 46 708
Segment profit
(loss) before
tax (1 422) 122 (397) (1 697)
Taxation
6 239
Segment profit
for the year 4 542
For management purposes the Group is organised into three major operating
divisions, namely Nutritional Foods, Pharmaceuticals and Services. These
divisions are the basis on which the Company reports it primary segment
information.
The Nutritional Foods division involves the manufacture of high-protein and
fortified powdered food and food supplements. The Pharmaceutical division
involves the supply of pharmaceutical, complimentary and natural medicines.
The Services involves the providing of administration and management services.
These operating segments are monitored by the Group`s chief decision-maker and
strategic decisions are made on the basis of adjusted segment operating
results.
BASIS OF PRESENTATION
The condensed financial results for the year ended 29 February 2012 have been
prepared in accordance with International Financial Reporting Standards
("IFRS"), the presentation and disclosure requirements of IAS 34, AC 500
standards issued by the Accounting Practices Board, the Listing Requirements
of the JSE Limited and the requirements of the Companies Act, No 71 of 2008,
as amended. They have been prepared on the historical cost basis, except for
certain financial instruments which are measured at fair value or at amortised
cost. The significant accounting policies and methods of computation are
consistent in all material respects with those applied in the previous
financial year, except for the adoption of improved, revised or new standards
and interpretations. The aggregate effect of these changes in respect of the
year ended 29 February 2012 is nil. The condensed financial results have been
prepared under the supervision of the Financial Director, JA Etchells CA(SA).
NATURE OF BUSINESS
The Group`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.
OVERVIEW
As a result of the delay caused by the new Companies Act requirements, the
funding that was negotiated from certain of the shareholders in March 2011
only materialised in the latter half of the calendar year. This resulted in a
delay in putting into place the necessary measures to restore the Group after
the long period of cash constraints.
Nutritional Foods division
Nutritional Foods, once the capital injection in the latter half of the year
was received, focused on managing its working capital optimally so as not to
lose critical sales but also to be able to expand group market share. Pricing
and margin issues were dealt with and the sales forces were brought in-house.
The production facilities remain currently underutilised and management is
working on ways to address this problem.
Intense management involvement has resulted in far higher levels of
coordination and cooperation between the different elements of this business
and a far greater strategic focus on the direct needs of the business. The
factory has extensive spare capacity and the impact of increased volumes on
profitability will be considerable.
Pharmaceutical division
The Impilo business (Impilo Marketing and Impilo Drugs) has a contract
manufacturing agreement with a pharmaceutical manufacturer in terms of which
they manufacture the Impilo product range. During the year under review the
supply problems from this manufacturer were addressed and a reliable supply of
product has since been maintained. This has assisted Impilo to recover some of
its previously lost revenue, in the second half of the year.
Impilo as part of its risk strategy is negotiating with two other contract
manufacturers to manufacture products on its behalf in order to ensure the
continuous supply of product which in the past has not always been available
and which has damaged our market share. The process is time consuming due to
the numerous statutory requirements but steady progress is being made.
The upgrade of the manufacturing facility at Isithebe that the group utilises
has been delayed. This upgrade will ensure that the factory is fully compliant
with all the new Medicines Control Council ("MCC") regulations.
FINANCIAL PERFORMANCE
Sales of R41,607 million were 12% down on the R46,708 million of the previous
year. This was mainly due to a decline in sales in the Nutritional Foods
division. Sales at Nutritional Foods were at R38 million level for the year.
Gross profit declined by R1,700m to R20,012 million as a result of the decline
in sales offset by an increase in the gross margin from 46.5% to 48.7%. The
increase in margin was primarily as a result of restructuring the pricing
levels at Nutritional Foods. The reduction in the gross margin, however, was
offset by a reduction in expenses from R26,737 million to R25,603 million
(4.2%).
Earnings per share increased by 33.3% to 0.20 cents from 0.15 cents while
Headline earnings decreased from headline earnings of R1,581 million to
headline loss of (R4,578) million. This difference in headline earnings from
the prior year is as, the results for the previous corresponding period
affected by the IFRS requirements relating to the recognition of deferred tax
assets on estimated tax losses which were recognised for the first time during
the 2011 period.
The profit for the year increased from a profit of R1,664 million in 2011 to a
profit of R2,619 million in 2012.
This profit of the Group as well as the proceeds from the increase in the
number of shares in issue were the major factors in increasing the net asset
value per share from 2.3 cents to 2.7 cents.
Reversal of prior year impairment of intangible assets
The intangible asset relating to the Distribution Rights of the Imuniti
Nutritional Supplement Combo Pack (ISCP) was impaired in 2009. A portion of
this impairment has been reversed as the Company has received orders and
produced this product during the period. There is no indication that this
order level will not be maintained for at least 10 years. The first three
Distribution outlets owned by the customer of the ISCP has been completed in
the Western Cape. These customer distribution outlets are budgeted to monthly
require product in excess of the orders already placed.
Events after the reporting period
There are no material events after the period ended 29 February 2012 to report
on.
Going concern
Shareholders are advised that the audited results for the year ended 29
February 2012 have been prepared on the going concern concept. This basis
presumes that funds will be available to finance future operations and that
the realisation of assets and settlement of liabilities, contingent
obligations and commitments will occur in the ordinary course of business.
DIVIDEND
In view of the Group`s current financial position, no dividend has been
declared for the year.
AUDIT OPINION
Grant Thornton have audited the annual financial statements for the year ended
29 February 2012 and their unqualified audit report is available for
inspection at
the Company`s registered office.
NOTICE OF THE ANNUAL GENERAL MEETING
Shareholders are hereby advised that it is anticipated that the Company`s
integrated annual report (incorporating the audited annual financial
statements) will be distributed on or before Thursday, 31 May 2012 which
contains the notice of the annual general meeting to be held at the Durban
Country Club on Thursday 28 June 2012 at 10:00.
On behalf of the Board
HJ van der Merwe CA(SA) Umhlanga Rocks
Chief Executive Officer 23 May 2012
Registered office
First Floor, 9 Frosterley Park, La Lucia Ridge, 4019
Tel: +27 31 584 7100
Auditors
Grant Thornton
Designated advisors
PSG Capital Proprietary Limited
Transfer secretaries
Link Market Services South Africa Proprietary Limited, 5th Floor, 11 Diagonal
Street, Johannesburg, 2000
Company secretary
GA Verga
Directors
CD Angus (Non-executive), JA Etchells (Financial Director), TR Hendry (Non-
executive), HJ van der Merwe (Chief Executive Officer), GR Wambach (Non-
executive Chairman)
Date: 23/05/2012 15:49:01 Produced by the JSE SENS Department.
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