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SLL - Stella Vista Technologies Limited - Interim financial results summary
for the six months ended 29 February 2012
Stella Vista Technologies Limited
(Incorporated in the Republic of South Africa)
Company registration number 1998/000172/06
JSE share code: SLL
ISIN: ZAE000018198
("Stella Vista" or "the Company" or "the Group")
INTERIM FINANCIAL RESULTS SUMMARY FOR THE SIX MONTHS ENDED 29
FEBRUARY 2012
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudite Unaudited Audited
d
6 months 6 months 12 months
ended ended ended
29-Feb- 28-Feb-11 31-Aug-11
12
NR`000 R`000 R`000
o
t
e
Revenue 10,842 17,940 27,414
Gross Profit 6,513 11,134 16,866
(Loss)/profit before (40) 2,496 2,672
interest and depreciation
Depreciation (2,007) (1,848) (3,803)
(Loss)/profit before (2,047) 648 (1,131)
interest and taxation
Investment income 0 0 0
Finance cost (16) (195) (744)
(Loss)/profit before (2,063) 453 (1,875)
taxation
Taxation - - 392
(Loss)/profit after (2,063) 453 (1,483)
taxation
Other comprehensive (loss)/income:
Foreign currency 241 - (85)
translation differences on
foreign operations
Total comprehensive (1,822) 453 (1,568)
(loss)/profit for the year
(Loss)/profit attributable to:
- Equity holders of the (1,973) 400 (1,319)
parent company
- Non-controlling (90) 53 (164)
interests
(Loss)/profit for the year (2,063) 453 (1,483)
Total comprehensive
(loss)/profit attributable to:
- Equity holders of the (1,722) 400 (1,393)
parent company
- Non-controlling (100) 53 (175)
interests
Total comprehensive (1,822) 453 (1,568)
(loss)/profit for the year
Earnings and headline earnings per share
(cents)
(Loss)/earnings per share 3(1.36) 0.28 (0.91)
Headline (Loss)/earnings 3(1.19) 0.28 (0.96)
per share
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
Unaudite Unaudited Audited
d 6 months 12 months
6 months ended ended
ended 28-Feb-11 31-Aug-11
29-Feb- R`000 R`000
12
R`000
ASSETS
Non-current assets 9,389 8,370 11,086
Property, plant and 8,328 7,701 10,025
equipment
Deferred taxation assets 1,061 669 1,061
Current assets 16,727 16,354 12,994
Inventory 7,161 12,261 7,838
Trade and other receivables 9,076 3,619 4,140
Cash and cash equivalents 490 474 1,016
TOTAL ASSETS 26,116 24,724 24,080
EQUITY AND LIABILITIES
Equity 7,404 10,692 9,226
Attributable to Stella 7,374 10,119 9,096
Vista
Non-controlling interests 30 573 130
Non-current liabilities 239 1,310 360
Interest-bearing borrowings 0 155 34
Deferred revenue 239 1,155 326
Current liabilities 18,473 12,722 14,495
Trade and other liabilities 10,381 5,916 6,847
Deferred revenue 515 637 1,068
Taxation payable 459 459 459
Current portion of interest- 7,073 5,698 5,995
bearing borrowings
Bank overdraft 45 12 125
TOTAL EQUITY AND 26,116 24,724 24,080
LIABILITIES
Net Asset Value per share 5.09 6.98 6.27
(cents)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudite Unaudited Audited
d 6 months 12 months
6 months ended ended
ended 28-Feb-11 31-Aug-11
29-Feb- R`000 R`000
12
R`000
Net (loss)/profit before (2,063) 453 (1,875)
tax and separately
disclosed items
Non-cash items 1,567 (6,908) 590
Working capital changes (725) 4,048 (96)
Cash generated from (1,220) (2,407) (1,381)
operations
Investment income 0 0 0
Finance cost (16) (195) (744)
Taxation refunded/(paid) - - -
Cash flow from operating (1,236) (2,602) (2,125)
activities
(Sale)/purchase of (255) 275 (132)
property, plant and
equipment
Cash flow from investing (255) 275 (132)
activities
Proceeds from interest 1,044 1,350 1,709
bearing borrowings
Cash flow from financing 1,044 1,350 1,709
activities
Net movement in cash and (447) (977) (546)
cash equivalents
Cash and cash equivalents 891 1,439 1,439
at beginning of year
Cash and cash equivalents 445 462 891
at end of year
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
for the six months ended Share Foreign Share
February 2012 capital currency based
and translation payment
premium reserve reserve
R `000s
Audited balance at 1 19,650 (1,655) 693
September 2010
Share options forfeited 693 - (693)
transferred to share
premium
Total comprehensive loss - (85) -
for the year
Audited balance at 31 20,343 (1,740) -
August 2011
Total comprehensive loss - 241 -
for the year
Unaudited balance at 29 20,343 (1,499) -
February 2012
Accumula Attributable Non-controlling Total
ted to equity interests equity
Losses holders of
the parent
company
R `000s
Audited balance at 1 (7,894) 10,489 305 10,794
September 2010
Share options forfeited - - - -
transferred to share
premium
Total comprehensive loss (1,483) (1,394) (175) (1,568)
for the year
Audited balance at 31 (9,377) 9,096 130 9,226
August 2011
Total comprehensive loss (2,063) (1,722) (100) (1,822)
for the year
Unaudited balance at 29 (11,450) 7,374 30 7,404
February 2012
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of preparation
1. The interim results for the six months ended 29 February 2012
("interim period under review") have been prepared in accordance with
lAS 34 - Interim Financial Reporting, the South African Companies Act
2008 (Act 71 of 2008) and the JSE Listings Requirements.
2. Accounting policies
The accounting policies and methods of computation applied in the
preparation of the results for the interim period under review are
consistent with those applied in the preparation of the group`s annual
financial statements for the year ended 31 August 2011.
3. Reconciliation of earnings and headline (loss)/earnings
(Loss)/profit after taxation
attributable to:
Ordinary equity holders of the (1,973) 400 (1,319)
parent entity for the year
Loss on disposal of property, - - -
plant and equipment
Diluted (loss)/earnings (1,973) 400 (1,319)
Foreign currency translation 251 0 (74)
differences
Headline (loss)/earnings (1,722) 400 (1,394)
Weighted average number of 145,000 145,00 145,000
shares in issue (000`s) 0
(Loss)/earnings per share (1.36) 0.28 (0.91)
(cents)
Diluted headline (1.36) 0.28 (0.91)
(loss)/earnings per share
(cents)
Headline (Loss)/earnings per (1.19) 0.28 (0.96)
share (cents)
4. Segment information
Management has determined the operating
segments based on the monthly reports reviewed
by the board of the directors that are used to
make strategic decisions. The chief operating
decision maker has been identified as the
group`s chief executive officer. The chief
executive officer considers the business from
a geographical basis as the products and
business are the same across all business
segments. The chief executive officer assesses
the performance of the operating segments
based on revenue, operating profit and cash
flow. The monthly management accounts tabled
at the board meeting and used by the chief
operating decision maker are in line with
IFRS.
South African operations, which earns revenue
from the sale of the screens
United Kingdom operations, which earns rental
income from renting of screens
R `000s South United Total
Africa Kingdom
Unaudited at 29 February
2012
Total segment revenue 7,880 3,088 10,968
Inter-segment revenue (126) - (126)
Revenue from external 7,754 3,088 10,842
customers
Cost of sales 3,751 578 4,329
Depreciation and 194 1,813 2,007
amortisation
Income tax credit/(expense) - - -
Loss after tax 263 1,799 2,063
Inventory 7,161 - 7,161
Total assets 17,335 8,781 26,116
Total liabilities 10,389 8,352 18,742
Audited at 31 August 2011
Total segment revenue 21,881 8,220 30,100
Inter-segment revenue (2,687) - (2,687)
Revenue from external 19,194 8,220 27,414
customers
Cost of sales 8,494 2,053 10,547
Depreciation and 528 3,275 3,803
amortisation
Income tax credit/(expense) 392 - 392
Loss/(profit) after tax (719) 2,202 1,483
Inventory 7,838 - 7,838
Total assets 12,270 11,810 24,080
Total liabilities 13,757 1,097 14,854
DIRECTORS COMMENTARY
Introduction
The Company
Stella Vista Technologies Limited (Stella
Vista) was established in February 1994 and
has over the years been a leader in design and
provision of information solutions based on
LED electronic displays in South Africa,
Middle East, the Indian sub-continent, the
Caribbean and the UK and Ireland. In addition
to the head office and factory situated in
Kyalami, South Africa the company owns Stella
Vista International Ltd, with offices and
warehouse in Hampton, England. Stella Vista is
one of the frontrunners in the visual mass
communications industry worldwide. Driven by
the pursuit of excellence, the Company prides
itself on reliability and superior service
made possible by its vision, creativity,
ambition and integrity.
The Market and prospects
The Economic situation and entry of cheap
Chinese screens has resulted in tougher
competition and increased pressure on margins.
Further complications are introduced by South
African regulations being strictly applied to
local manufacturers and not applicable to our
overseas competitors. The end result is a
significant reduction of sales income and a
reduction in workforce. Local buyers believe
they are safer if they import products
regardless of price competitiveness and lack
of local support what could have grave
consequences as the expected life span of an
LED display is 10 years. We have embarked on
a customer education programme promoting the
benefit of procurement through a local
manufacturer offering guidance on product
design solutions and the benefits of local
back up and technical support thus ensuring an
improved ROI for our customers.
A few major projects were delayed because of
the economic situation in Europe, and our
rental income was adversely affected due to
the lack of Autumn Internationals in Europe as
a result of the Rugby World Cup 2011.We are
striving to maintain and further develop
business with our current customers by
improving our competitiveness through cutting
costs and making partnerships in fields where
the South African environment is not
competitive (production, volume purchasing,
cost of doing business...). At the same time
we are offering a wider range of quality
options at different price points and we are
making significant efforts to expand our
customer base which will result in more cost
effective products and services.
Products and services
On a positive note, during the period under
review Stella Vista re-entered the VMS
(variable message signs) market and in
partnership with Dimension Data developed a
Traffic LED Display for installation onto a
mobile trailer with a solar power supply. We
also recently concluded an agreement to
feature perimeter LED`s in cricket where in
two of these events over 400m of LED signage
will be deployed and includes the 4th ODI
cricket match between England and South Africa
in Cardiff. Our R&D in partnership with a few
international developers are aggressively
developing innovative new products and
services which will translate into greater
value and savings for our customers which in
turn will increase our market share going
forward. The value of Stella Vista`s
faceUpRegistered standard is continuing to
prove its existence, the creation of a 2nd
hand market for used displays provided income
during this period. In addition the logic of
buying used products is to start a business
with lower entry investments and still have an
opportunity to upgrade equipment later with
the newest technology at a fraction of the
cost. The current worldwide trend confirms
that billboards are going digital and we see
major opportunities in this sector in the
future. We strongly believe in the many
advantages of our design in this highly
competitive market.
Financial results
Stella Vista is operating in a difficult
environment for the LED industry worldwide,
when comparing the first 6 months of 2011, the
result is a reduction in revenue of 39.6%, a
reduction in Gross Profit of 41.5% and a
profit of R453 thousand turning to a loss of
R1.8 million. The current economic times
continue to be challenging to Stella Vista
however Management stays committed to growth
of the business and market footprint. In
terms of technology we are and will remain
committed to innovations and excellence.
Subsequent events and capital commitments
There have been no significant events since
the end of the interim period under review and
the date of this report. There was no
significant capital expenditure authorised as
at 29 February 2012.
Dividends
The Board has resolved not to declare
dividends until the Group`s liquidity position
has improved.
On behalf of the directors
M. Tabakovic
Chief Executive Officer
Registered office
62 Kyalami Boulevard, Kyalami Business Park,
Kyalami
Tel: (0ll) 466 2020
Website: www.stellavista.com
E-mail: muris@stellavista.com
Directors
M. Tabakovic (Chief Executive Officer)
C. Livingstone (Non-executive)
D. Tabakovic
L. Kerr
Company secretary
L. Kerr
Sponsor
Arcay Moela Sponsors (Pty) Limited
Auditors
IAPA Johannesburg Chartered Accountants (SA)
Date: 15/06/2012 15:02:19 Produced by the JSE SENS Department.
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