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Beige -
Beige Holdings Limited
Registration No: 1997/006871/06
Share Code: BEG ISIN Code: ZAE000034161
("Beige" or "the company")
AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2003
Group Income Statements
Audited Unaudited Audited
for the for the 6 for the
year months year
ended ended ended
28 31 28
February August February
2003 2002 2002
R"000 R"000 R"000
Revenue 65 728 28 698 39 251
Cost of sales (37 409) (16 675) (22 006)
Gross profit 28 319 12 023 17 245
Operating expenses (20 480) (9 682) (15 241)
Depreciation (552) (223) (394)
Operating profit 7 287 2 118 1 610
Income from investments 120 30 208
Net profit from activities 7 407 2 148 1 818
before finance charges
Finance charges (541) (319) (235)
Net profit before taxation 6 866 1 829 1 583
Taxation 972 (156) 2 270
Net profit for the period 7 838 1 673 3 853
Calculation of headline R"000 R"000 R"000
earnings
Net profit for the period 7 838 1 673 3 853
Adjustments for:
(Recovery)/payment of (2 142) - 3 468
restraint undertaking payment
- (refer commentary)
Net surplus on consolidation - -
of settlement with Le-Sel (2 207)
Research (Proprietary)
Limited regarding release of
surety obligation, disputes
and other claims
Net profit on sale of Beige - -
Cosmetics (Proprietary) (125)
Limited
Net reversal of provision - -
against investment in Beige (171)
Cosmetics (Proprietary)
Limited
Award from Nedcor Limited (1 175) (978) -
(refer commentary)
Profit on settlement of - -
royalty agreement with PI (103)
Product (Proprietary) Limited
(The Like Silk brands)
Amortisation of goodwill 1 209 473 *315
Negative goodwill recognised (64) (32) *(691)
in the income statement
Loss/(profit) on disposal and 11 - (47)
impairment of plant and
equipment
5 574 1 136 4 395
Tax effect of adjustments 31 - -
Headline earnings for the 5 605 1 136 *4 395
period
Ordinary shares in issue
(000"s)
- Weighted (Note 1) 198 037 95 781 92 553
- Fully diluted (Note 2) 254 037 129 553
Earnings per share
information
Attributable earnings per 3.96 1.75 4.16
ordinary share (cents)
Headline earnings per share 2.83 1.19 4.60
(cents) (Note 3)
Fully diluted attributable 3.09 - 2.97
earnings per share (cents)
Fully diluted headline 2.21 - 3.39
earnings per share (cents)
(Note 3)
* Restated from last
published reviewed results to
audited result
Notes
1. Weighted average shares in issue has been calculated to reflect the
required issue of 8 723 850 new shares in respect of the Zizmax Investments
(Proprietary) Limited t/a Dudley Products ("Dudley"s") as a result of exceeding
profit warranties, as though the issue had taken place as at 01 March 2002.
2. Fully diluted earnings per share information is reflected showing the
potential effect of full dilution for 36 000 000 options held by Beige directors
and Arcay Group Limited and 20 000 000 shares in terms of a convertible loan.
3. Headline earnings per share information for the prior year has been
restated for the exclusion of deferred taxation from the headline earnings
computation in line with Generally Accepted Accounting Practice.
Group Balance Sheets
Audited Unaudited Audited
as at as at as at
28 31 August 28
February 2002 February
2003 R"000 2002
R"000 R"000
ASSETS
Non-current assets 6 663 5 047 5 645
Plant, equipment and vehicles 1 471 1 076 1 076
Investment - intangibles 1 849 1 855 2 296
Deferred taxation 3 343 2 116 2 273
Current assets 24 889 26 561 22 174
Inventories 9 192 8 316 6 890
Accounts receivable - trade 12 410 13 369 12 945
2 499 4 409 1 340
- other
Taxation prepaid 46 30 202
Cash resources 742 437 797
Total assets 31 552 31 608 27 819
EQUITY AND LIABILITIES
Capital and reserves 19 920 10 003 4 737
Shareholders" funds 19 920 10 003 4 737
Non-current liabilities 2 490 1 829 1 924
Long-term liabilities 2 490 1 829 1 924
Current liabilities 9 142 19 777 21 158
Accounts payable - trade 6 712 12 261 19 547
- 4 846 -
- acquisition and other
Current portion of long-term 147 209 21
liabilities
Taxation 129 588 588
Bank overdraft 2 154 1 873 1 002
Total equity and liabilities 31 552 31 608 27 819
Ordinary shares in issue
(000"s)
- At year end 252 099 155 000 95 125
- Fully diluted (Note 1) 254 037 - 129 555
Net asset value per share
information
Net asset value per share 7.90 6.45 4.98
(cents)
Net tangible asset value per 7.17 5.26 2.57
share (cents)
Fully diluted net asset value 7.84 ** **
per share (cents)
Fully diluted net tangible 7.11 ** **
asset value per share (cents)
** Not previously published
Notes
1. Fully diluted earnings per share information is reflected showing the
potential effect of full dilution for 36 000 000 options held by directors and
Arcay Group Limited, 20 000 000 shares in terms of a convertible loan and the
effect of the required issue of 8 723 850 new shares in respect of the Dudley"s
acquisition for exceeding profit warranties.
Abridged Group Cash Flow Statement
Audited Unaudited Audited for
for the for the the
year 6 months year ended
ended ended 28 February
28 31 August 2002
February 2002 R"000
2003 R"000
R"000
Net cash outflow from (8 286) (4 694) (1 613)
operating activities
Net cash outflow from (958) (223) (743)
investing activities
Net cash inflow from 8 037 3 686 750
financing activities
Net decrease in cash and (1 207) (1 231) (1 606)
cash equivalents
(Bank overdraft)/cash and (205) (205) 1 401
cash equivalents at
beginning of period
Bank overdraft at end of (1 412) (1 436) (205)
period
Group Statement of Changes in Equity
Share Share Accumulated Other Total
Capital premium loss
R"000 R"000 R"000 (R"000) R"000
Balance at 28 February 907 86 230 (86 657) - 480
2001
Shares issued in 44 360 404
settlement of debt
Profit for the year - - 3 853 - 3 853
Balance at 28 February 951 86 590 (82 804) - 4 737
2002
Issue of shares for 238 1 188 - - 1 426
Dudley"s acquisition
Issue of share for Get 149 744 - - 893
Fresh acquisition
Issue of shares for 1 096 4 385 - - 5 481
rights offer
Cost of issue of shares - (1 153) - - (1 153)
Increase in purchase - - -
price of Dudley"s 698 698
acquisition to be settled
in shares after year end
Profit for the year - - 7 838 - 7 838
Balance at 28 February 2 434 91 754 (74 966) 698 19 920
2003
COMMENTARY
The directors of Beige are pleased to announce solid annual results for the year
ended 28 February 2003. This is the first full financial year since the
company"s relisting on the JSE Securities Exchange South Africa in October 2001.
The accounting policies adopted for purposes of this report comply, and have
been consistently applied in all material respects, with South African
Statements of Generally Accepted Accounting Practice. The results have been
audited by KPMG Inc whose unqualified report is available for inspection at the
registered office of the company.
Results
During the past year, the company experienced significant growth, both organic
and through the effect of its acquisition of Dudley"s and the business and
assets of Get Fresh SA (Proprietary) Limited ("Get Fresh") in the prior year,
and achieved good results reporting earnings of R7.8 million (2002: R3.8
million) and headline earnings of R5.6 million (2002: R4.4 million). Revenue
increased by 67% to R65.7 million whilst operating profit increased by
approximately 353% from R1.6 million in the prior year.
During the year Beige had a rights offer to shareholders, which closed on 06
September 2002 and was fully underwritten. The proceeds of the rights offer
have been utilised primarily to fund the cash portion of the purchase price of
the acquisitions and to reduce old interest bearing debt which had arisen from
the prior restructuring and relisting of Beige.
Beige maintained a tight focus on its core business of being the preferred
supplier of toiletries and soap products for bath and body. The robust local
trading environment allowed the Group to take advantage of increased business
opportunities and to entrench itself further in its chosen markets.
Operational review
The acquisitions of Get Fresh and Dudley"s, completed last year, are now fully
integrated. These acquisitions have strengthened management and allowed the
company to put better succession planning in place.
Despite a good performance during the year, Get Fresh did not achieve its profit
warrantees stipulated in the acquisition agreement, mainly due to the
significant strengthening of the Rand against the major currencies resulting in
foreign exchange losses. This has resulted in a reduction of the restraint
payment (comprising shares and cash) made to the vendor in the prior year, which
was based on the performance of Get Fresh and was held back until profits had
been certified. The reduction in cost has been included in the net operating
profit and the shares previously issued have been cancelled.
In addition to the reduction in the restraint payment made relating to the
acquisition of Get Fresh as detailed above, Beige was awarded an amount of R1
175 000 in terms of cross-guarantees signed by Beige for former subsidiary
companies that were disposed of by the group during the February 2001 financial
year.
Dudley"s exceeded its profit warranty and, in terms of the acquisition
agreement, an additional payment of R697 908 to be settled through the issue of
8 723 850 new shares, at 8.0 cents per share, has been required. The weighted
average number of shares in issue has been increased to incorporate the effect
of this additional share issue for earnings per share calculations.
Furthermore, the company has recorded a profit on the settlement of a royalty
agreement with PI Products (Proprietary) Limited.
The Group developed new product lines for two prominent consumer companies and
secured a number of profitable new contracts. Export opportunities developed at
a satisfactory rate, with Get Fresh performing well in Europe and the United
States of America. Other subsidiaries also entered the export market.
Dividends
No dividend has been declared for the year ended 28 February 2003.
Prospects
Beige has laid a strong foundation over the past two years and this is expected
to continue to bear fruit for the Group. Subsequent to year-end, the Group
secured several major contracts with large consumer companies, while further
lucrative opportunities are being explored.
The domestic market is proving to be robust and demand for the Group"s products
is growing continually. In addition, the Group intends to broaden its market
reach through a concentrated marketing effort.
During the year ahead, Beige will concentrate on growing its relationships with
existing clients and expanding its business opportunities locally and
internationally, whilst improving profitability and enhancing shareholder
wealth.
By order of the Board
Kevin de Villiers John Rawlings
Chairman Chief Executive Officer
13 May 2003
Johannesburg
Corporate advisor and sponsor Transfer secretaries
Arcay Group Limited Computershare Investor
Services Limited
Company secretary
Arcay Client Support (Proprietary) Limited
Directors
KDD de Villiers* Chairman, JH Rawlings** Chief Executive Officer, MM
Di Nicola, LI Karp*, IL Stromin, C van Zeil, MK von Berg,
*Non-executive director **American
Date: 13/05/2003 03:01:37 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
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