| Thu 31 May 2012, 17:34 | | LAB - Labat Africa Limited - Reviewed condensed provisional results for the |
|
LAB
LAB
LAB - Labat Africa Limited - Reviewed condensed provisional results for the
year ended 29 February 2012
LABAT AFRICA LIMITED
Incorporated in the Republic of South Africa
(Registration number 1986/001616/06)
JSE code: LAB ISIN: ZAE000018354
("Labat" or "the company")
REVIEWED CONDENSED PROVISIONAL RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2012
GROUP CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Reviewed Restated Audited
12 months 12 months 12 months
29 February 28 February 28 February
2012 2011 2011
R`000 R`000 R`000
Continuing operations
Revenue 15,544 29,915 29,915
Cost of sales (6,960) (8,737) (8,737)
Gross profit 8,584 21,178 21,178
Other income 1,518 17,757 17,757
Operating expenses (16,100) (24,316) (24,878)
Fair value adjustment 34,020 - -
Impairments (2,173) (1,780) (1,780)
Operating profit 25,849 12,839 12,277
Investment revenue 17 175 175
Finance costs (216) (860) (860)
Profit before taxation 25,650 12,154 11,592
Taxation 350 954 (118)
Profit from continuing 26,000 7,555 5,921
operations
Discontinued operations
Loss from discontinued (364) 5,553 5,553
operations
Profit for the year 25,636 13,108 11,474
Total comprehensive income 25,636 13,108 11,474
Attributable to:
Owners of the parent:
Profit for the year from 26,000 7,555 5,921
continuing operations
Loss for the year from (364) 5,553 5,553
discontinuing operations
Profit for the year 25,636 13,108 11,474
attributable to owners of the
parent
Total comprehensive income
attributable to:
Owners of the parent 25,636 13,108 11,474
Total basic earnings per 12,82 6,65 5,82
share
Continuing operations 13,00 3,83 3,0
Discontinued operations (0,18) 2,82 2,82
Total headline earnings per (2,8) 7,01 6,2
share
Continuing operations (3,96) 3,30 2,6
Discontinued operations (0,18) 3,72 3,6
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Reviewed Restated Audited
12 months 12 months 12 months
29 28 28
February February February
2012 2011 2011
R`000 R`000 R`000
ASSETS
Property, plant and equipment 31,301 31,580 33,187
Intangible assets - 1,375 1,375
Non-current assets 31,301 32,955 34,562
Inventories 3,233 3,091 3,091
Other financial assets 10 179 179
Trade and other receivables 11,311 14,795 4,375
Cash and cash equivalents 2,832 4,800 4,800
Current assets 17,386 22,864 12,445
Assets held for sale 2,168 2,748 579
Total assets 50,855 58,568 47,586
EQUITY AND LIABILITIES
Share capital and reserves 2,178 (23,458) (25,093)
Loans from shareholders 11,306 11,340 -
Other financial liabilities - 34,020 45,360
Deferred taxation 5,655 6,005 7,235
Non-current liabilities 16,961 51,365 52,595
Trade and other payables 30,728 29,562 8,343
Current portion of financial - 56 56
liabilities
Provisions 687 742 742
Taxation 301 301 301
Current liabilities 31,716 30,661 9,442
Liabilities held for sale - - 10,642
Total equity and liabilities 50,855 58,568 47,586
Number of shares in issue 197,155 197,155 197,155
(`000)
Total Net asset/(liability) 1,0 (11,00) (12,00)
value per share (cents)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed Restated Audited
12 months 12 months 12 months
29 February 28 February 28
2012 2011 February
2011
R`000 R`000 R`000
Net flow from operating (2,089) (5,585) (5,585)
activities
Net flow from investing 211 4,101 4,101
activities
Net flow from financing (91) 4,840 4,840
activities
Net increase/(decrease) in (1,969) 3,356 3,356
cash
Cash at beginning of period 4,800 1,444 1,444
Cash at end of period 2,831 4,800 4,800
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
R`(000) Share Share Non Distributable Total
Capital Premium Distribu- Reserves Capital
table and
Reserves reserves
Balance at 1 1,490 49,065 15,425 (102,547) (36,567)
March 2010
Total - - - 13,108 13,108
comprehensive
income for
the year
Opening 1,490 49,065 15,425 (91,073) (25,093)
balance as
previously
reported
Prior period - - - 1,635 1,635
errors
Balance at 01 1,490 49,065 15,425 (89,440) (23,458)
March 2011 as
restated
Total - - - 25,636 25,636
comprehensive
income for
the year
Balance at 29 1,490 49,065 15,425 (63,802) 2,178
February 2012
Segment information
SEGMENT REVIEW
Reviewed Audited
year year
ended ended
29 February 28 February
2012 2011
R(`000) R(`000)
Technology
External sales 15 544 29 915
Inter segmental revenue 1 080 2 112
Other Operations
External sales - -
Inter segmental revenue 2 632 2 632
Adjustments and eliminations (3 712) (4 744)
Total revenue 15 544 29 915
SEGMENT PROFIT / (LOSS)
Reviewed Audited
year year
ended ended
29 28
February February
2012 2011
R(`000) R(`000)
Technology
Profit for the year 30 812 14 930
Prior period adjustments - 1 634
Restated 30 812 16 564
Other Operations (5 176) (3 465)
SEGMENT ASSETS
Reviewed Audited
as at as at
29 28
February February
2012 2011
R(`000) R(`000)
Technology 50 417 58 106
Other operations 440 462
COMMENTARY
RESULTS
The group is pleased to report a set of positive results for the period under
review. Total comprehensive income for the year was R25,6 million against a
profit of R13,1 million in the previous year. Headline earnings however were
reduced from a profit of R13,8 million to a loss of R8,1 million.
Continuing Operations
The SAMES ICDC division is now operating profitably and prospects are good.
Manufacturing in China is going very well. Margins are good and quality and
delivery are excellent.
Discontinuing Operations
The old SAMES manufacturing facility has now been completely closed down and
the remaining plant is being sold and removed. This process is expected to
take a further 3-6 months. Losses have been eliminated and costs are now
being covered by the ICDC division.
Global Emerging Markets (GEM) Funding
GEM, an alternative investment group that manages a diverse set of investment
vehicles focused on emerging markets across the world has confirmed that
funding of $100 million for suitable investments is still available to Labat
in order to fund future acquisitions and transactions.
Property
The SAMES property in Koedoespoort is being re-furbished in order to put it
into a lettable condition. The property consists of two substantial, quality
buildings with over 12,000 sq meters of lettable space. The directors are of
the view that the property can be valued in excess of R100 million on a fully
let basis. Agents have been contracted to let the property and feedback is
positive with potential tenants being identified. Management are of the view
that this property will be let soon and will form the nucleus of a focused
BEE listed property company.
Management have identified a particular niche in the broader property market
and have identified particular properties which are available to purchase.
GEM has confirmed that their line of credit to Labat can be used for suitable
property investments. We have had discussions with various large property
companies with a view to acquiring portfolios of Government tenanted office
buildings. At the same time we have had discussions and signed a MOU with a
group of BEE property professionals to join Labat in pursuing these
opportunities
Strategy Forward
The firm intention is to turn Labat into a listed property group with a BBBEE
ownership of not less than 60%.The focus will be on growing a substantial
property group through acquisition.
The future prospects of the remaining Labat businesses will be reviewed in
due course. The Pharmaceutical API opportunity has been transferred to the
Eastern Cape. Discussions are taking place with the Eastern Cape Government
to relocate to the East London IDZ. Mining opportunities are still being
pursued.
Prospects
There is a real opportunity for a majority BBBEE owned listed Property
Company. Such a company concentrating on Government tenanted properties will
have the capacity to form long term lease relationships with Government,
almost on a public private sector partnership basis.
BASIS OF PREPARATION
Statement of compliance
The reviewed provisional consolidated financial results comprise a
consolidated statement of financial position at 29 February 2012, a
consolidated statement of comprehensive income, a consolidated statement of
changes in equity and a consolidated statement of cash flow for the year
ended 29 February 2012. The reviewed provisional financial results have been
prepared in accordance with the framework concepts and the measurement and
recognition requirements of International Financial Reporting Standards
("IFRS"), the AC500 standards as issued by the Accounting Practices Board,
the JSE Listings Requirements and the South African Companies Act 71 of 2008.
The accounting policies applied for the year are consistent with those of the
prior year.
The financial statements have been prepared on the historical cost basis,
except in the case of financial instruments which are measured using fair
value and amortised cost models, and investment properties that are measured
at fair value and non-current assets held for sale and assets of disposal
groups that are measured in terms of IFRS 5.
PRIOR PERIOD ERROR - RESTATEMENT OF DEFERRED TAX; ACCUMULATED DEPRECIATION;
ASSETS OF A DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE AND LIABILITIES OF A
DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE.
In the 2011 financial year, the group had an assessed loss of approximately
R537 million. The deferred tax liability of R7 235 000 originated from the
revaluation of buildings in one of the subsidiaries, SAMES Properties (Pty)
Ltd. The assessed loss available in the subsidiary amounted to R 4 393 135 of
which the tax benefit equates to R1 230 078. Because the subsidiary had an
existing assessed loss to utilise against any taxable temporary differences,
the deferred tax balance should have taken account of the benefit of the tax
loss.
The group had in 2010 decided to discontinue its manufacturing operations in
SAMES (Pty) Ltd. The subsidiary had plant and equipment which it intended
disposing of. The related plant and equipment should have been disclosed as
part of the disposal group classified as held for sale. The prior year
figures were adjusted accordingly.
Having regard to the above, once an asset is classified as part of a disposal
group held for sale, depreciation on those assets should cease. The assets
mentioned above were not classified as part of the disposal group in prior
years and as a result were depreciated. An adjustment was made to the prior
year in order to reverse the said depreciation.
The correction of the errors in the 2011 figures being restated are as
follows:
STATEMENT OF FINANCIAL POSITION 2011
Property, Plant and equipment - as previously 33 186
stated
Adjustment as result of prior period error (1 606)
Property, plant and equipment Total - Restated 31 580
Non-current assets held for sale and assets of 580
disposal groups as previously stated
Adjustment as result of prior period error 2 168
Non-current assets held for sale and assets of 2 748
disposal groups Total - Restated
Deferred tax liability as previously stated 7 235
Adjustment as result of prior period error 1 230
Deferred tax liability after adjustment for
prior period error 6 005
PROFIT OR LOSS 2011
Depreciation
Depreciation as previously stated (1 480)
Adjustment as result of prior period error 563
Tax effect
Income tax as previously stated (118)
Adjustment as result of prior period error 1 072
Total adjustment to prior period profit and loss 1 635
Profit and loss as previously stated 11 473
Profit and loss total - Restated 13 108
RECLASSIFICATION OF COMPARATIVE FIGURES
Certain comparative figures have been reclassified. Items of plant and
equipment have been reclassified to non-current assets held for sale and
assets of disposal groups as management`s intention to sell those assets
already existed in the prior year.
Liabilities of disposal groups classified as held for sale have also been
reclassified to trade payables and receivables as these liabilities are still
outstanding and the intention was never to sell them of as part off a
disposal group.
Earnings and headline earnings per share from continuing and discontinued
operations have also been reclassified.
Review Opinion
The condensed provisional financial statements of the group have been
reviewed by Nexia SAB&T, the Groups auditor. The review opinion of the
auditors contains an emphasis of matter outlined below. The review opinion
is available for inspection at the Company`s registered office.
Based on our review, except for the possible effects of the matter described
in the Emphasis of Matter paragraph below, nothing has come to our attention
that causes us to believe that the annual financial statements do not present
fairly, in all material respects the financial position of Labat Africa
Limited as at 29 February 2012 and its financial performance and cash flows
for the year then ended, in accordance with International Financial Reporting
Standards and the requirements of the Companies Act of South Africa.
Emphasis of matter
We draw attention to the fact that the Groups current liabilities exceed its
current assets by R14,3 million and that, as mentioned by the directors in
the going concern paragraph below, a liability of R34 million has been
written back to profit and loss during the period under review.
Going Concern
The board of directors is of the opinion that, having regard to the future
strategy of the Group, the Group has sufficient resources to continue as a
going concern.
In the current year the directors have resolved to write back to the
Statement of Comprehensive Income a liability of R34 million which has been
prescribing. Based on legal advice, the Directors are of the opinion that
this liability is not due and therefore retaining this amount in the
statement of financial position would not fairly reflect the financial
position of the Group.
We draw attention to the fact that the Group`s current liabilities exceed its
current assets by R14,3 million. This shortfall relates primarily to
provisions made concerning potential SARS liabilities. Labat and SARS have
had some long outstanding issues dating back to 2003 when Labat`s substantial
tax losses were disallowed. These tax losses were subsequently re-instated
and a number of consequent tax issues are currently being resolved. These are
expected to be finalised within the next six months. The directors are of the
opinion that any potential tax liabilities have been more than adequately
provided for in these financial results and in fact are of the opinion that a
substantial credit will be received by Labat particularly since no interest
has been raised on substantial credit balances due to the company.
Litigation
The group has various claims and counter claims made by and against Labat
which have risen in the normal course of business. All these matters are
being dealt with by the company`s attorneys.
Changes to the Board
During the year, with effect from 27 February 2012, Mrs R Majiedt was
appointed to the board as an independent non-executive chairperson. The
directors welcome Mrs Majiedt to the board and look forward to her
contribution.
Share Capital
The Company did not issue shares or repurchase any of its own shares during
the year under review. The Company has 197 154 482 shares in issue and 300
000 000 authorised shares.
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 year ended 29 February 2012.
Dividends
In line with group policy, no dividend has been declared.
For and on behalf of the board.
B G VAN ROOYEN D O` NEILL
CEO FINANCIAL DIRECTOR
31 May 2012 31 May 2012
Date: 31/05/2012 17:34:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
