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JOHN DANIEL HOLDINGS LIMITED - AUDITED RESULTS FOR THE YEAR ENDED 30
JUNE 2004
JOHN DANIEL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1998/013215/06)
Share code: JDH ISIN: ZAE000044343
(`JDH` or `the company`)
ABRIDGED BALANCE SHEET AT 30 JUNE 2004
GROUP GROUP COMPANY COMPANY
2004 2003 2004 2003
R R R R
ASSETS
Non-current assets 11 151 226 18 750 060 43 150 510 20 204 09
Property, plant and 4 212 045 3 320 608 - -
equipment
Goodwill 6 260 697 14 212 831 - -
Intangible assets - 1 196 621 - -
Investments - 20 000 43 150 510 20 204 09
Deferred taxation 678 484 - - -
Current assets 3 738 042 3 280 460 - -
TOTAL ASSETS 14 889 268 22 030 520 43 150 510 20 204 09
EQUITY AND LIABILITIES
Capital and reserves 4 295 558 16 798 866 38 840 519 17 721 67
Minority interest (460 428) - - -
Non-current liabilities 3 029 340 1 817 703 4 305 106 2 478 041
Interest-bearing 599 176 737 539 - -
borrowings
Non-interest bearing 2 430 164 1 080 164 1 080 164 1 080 164
borrowings
Amounts owing to group - - - 1 397 877
companies
Deferred taxation - - 3 224 942 -
Current liabilities 8 024 798 3 413 951 4 885 4 375
TOTAL EQUITY AND 14 889 268 22 030 520 43 150 510 20 204 09
LIABILITIES
ABRIDGED INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2004
GROUP GROUP COMPANY COMPANY
2004 2003 2004 2003
R R R R
REVENUE 13 621 369 10 811 627 1 210 167 -
COST OF SALES (12 131 162) (7 595 689) - -
GROSS PROFIT 1 490 207 3 215 938 1 210 167 -
Other operating 58 824 97 121 22 945 910 -
income
Selling, (15 893 963) (4 119 189) (812 290) (1 590)
distribution and
administration
expenses
OPERATING (14 344 932) (806 130) 23 343 787 (1 590)
PROFIT/(LOSS)
Net finance cost (297 588) (118 777) - (509)
Taxation 678 484 - (3 224 942) -
Minority 460 728 - - -
interest
NET PROFIT/(LOSS) (13 503 308) (924 907) 20 118 845 (2 099)
FOR THE YEAR
Basic
earnings/(loss)
per share
(cents) (0.233) (0.016) - -
Headline
earnings/(loss)
per share
(cents) (0.075) (0.002) - -
Reconciliation
of earnings to
headline
earnings per
share:
Earnings -13 503 308 -924 907 - -
Amortization of - 36 074 - -
intangible
assets
Amortization of 7 952 134 748 044 - -
goodwill
Profit on
disposal of -10 200 - - -
property, plant
and equipment
Fair value 20 000 - - -
adjustment on
investment
Impairment of 1 196 621 - - -
intangible
assets
Headline -4 324 353 -140 789 - -
earnings
ABRIDGED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2004
Share SHARE NON Accumulated Total
Capital PREMIUM DISTRIBUTAB LOSS
LE RESERVE
R R R R R
GROUP
Balance at 30 570 198 22 344 579 5 359 358 (11 475 269) 16 798 866
June 2003
Issue of 10 000 990 000 - - 1 000 000
shares
Net loss for - - - (13 503 308) (13 503
the year 308)
Balance at 30 580 198 23 334 579 5 359 358 (24 978 577) 4 295 558
June 2004
COMPANY
Balance at 30 570 198 22 344 579 5 359 358 (10 552 461) 17 721 674
June 2003
Issue of 10 000 990 000 - - 1 000 000
shares
Net profit - - - 20 118 845 20 118 845
for the year
Balance at 30 580 198 23 334 579 5 359 358 9 566 384 38 840 519
June 2004
ABRIDGED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2004
GROUP GROUP COMPANY COMPANY
2004 2003 2004 2003
R R R R
NET Cash 4 758 092 62 702 397 877 (291 068)
INflow/
(OUTFLOW)
from
operating
activities
NET Cash (1 326 601) 1 365 587 - -
OUTflow from
investing
activities
NET Cash 5 478 325 (1 063 263) (397 877) 290 164
INflow/(OUTFL
OW)
from
financing
activities
Decrease in (606 368) 365 026 - (904)
cash and cash
Equivalents
Cash and cash 363 831 (1 195) (2 099) (1 195)
equivalents
at
beginning of
period
Cash and cash
equivalents at
the end of (242 537) 363 831 (2 099) (2 099)
period
REVIEW OF RESULTS AND FINANCIAL POSITION
The past financial year was, without a doubt, not only a difficult
year, but it has been a year of major transition for JDH. The company
transformed from having just one wholly-owned subsidiary to a group of
companies.
This transition heralded a new era for the group, as JDH faced major
challenges. The biggest challenge was to implement the strategic
decisions taken during the previous year in terms of the board`s Vision
2005 Business Strategy. This change in vision led to major
restructuring of the group, both financially and in terms of its
business strategy.
After restructuring, the group is left with a leaner overhead structure
and now employs 12 permanent staff members in all of its operations
compared to 45 in the previous financial year.
The new business strategy focuses on generating profits through
diversified investments in high technology companies, such as Vinguard
Limited (`Vinguard`) and Lazaron Biotechnologies (SA) Limited
(`Lazaron`) by 2005.
The decision to move the operations of JDH`s wholly-owned subsidiary
John Daniel Containers Limited (`JDC`) to Gauteng was correct.
Turnover reported at JDC increased from R10m during the previous
financial year to R13.6m in the year under review, despite the break in
operations during the move.
Costs relating to restructuring the group, retrenchment of staff in
Mossel Bay as well as the costs of moving around 300 metric tons of
equipment to Gauteng impacted negatively on the results for the year.
The fair value of JDC had to be considered according to the going
concern principle as the subsidiary continues to post substantial
losses impacting negatively on consolidated income of the group.
Accordingly, JDC was re-valued and is now positioned, after the fair
value adjustment, to conclude its proposed merger with Kearney`s Truck
and Trailer CC (`Kearney`s`). The option to merge with Kearney`s
remains available in terms of the agreement entered into between the
parties in January 2004. Both Kearney`s and JDC continue to
investigate this possibility.
The net result of the re-valuation of JDC resulted in a loss to the
group and holding company of R7 million and R10 million respectively
for the year under review.
The acquisition of the majority stake in Vinguard has turned out to be
highly profitable and has strengthened the balance sheet and Net Asset
Value (NAV) of JDH as a group and company, from the previous year.
OPERATION REVIEW
Group Overview
In view of the Vision 2005 business strategy, the board has taken a
conservative financial approach in valuing underlying assets to reflect
realizable values determined from its ability to generate future
economic benefits for the group.
The above approach lays the foundation for further strategic
investments in other high technology companies. JDH might choose to
realize certain underlying assets, including the potential sale of JDC
through either the aforementioned merger or outright sale thereof in
favour of increasing its cash flow. The increased cash flow will be
utilized to invest in other opportunities and also to provide funding
if necessary to both Vinguard and Lazaron.
The board has set a target date for the conclusion of a transaction
with its empowerment partners to bring the company in line with the
requirements of ownership in the group portraying meaningful Black
Economic Empowerment. The aim is to have at least 25% black ownership
of JDH by 2005.
JDC Limited
JDC continues to trade from Gauteng in terms of its manufacturing
agreement with Kearney`s. The move, closer to the target markets
proved successful and the company is on track to reach minimum targets
set by the board.
The board is not happy with the continued losses being reported by JDC
and consequently various options are being reviewed as stated
previously.
Vinguard Limited
Vinguard has commenced with production of SO2 generators for the
2004/2005 table grape season. Vinguard commenced with its share offer
during July 2004.
The offer was initially well received by the market, until negative
publicity relating to litigation between the licensor SO2 Generators
(Pty) Ltd and a competitor company surfaced. News of the litigation
impacted negatively on the success of the offer. The board of
Vinguard, however, is reviewing various other funding mechanisms
together with Mondi Ltd.
Production of SO2 generators continue at the current manufacturing
plant located in Stellenbosch. The company aims to commission its new
plant before the end of 2004 subject to the raising of further funding.
ACQUISITION OF STAKE IN LAZARON BIOTECHNOLOGIES (SA) LTD (`LAZARON`)
JDH has acquired a 25% stake in associate company Lazaron after this
reporting period.
Lazaron is in the process of establishing the first human cord blood
stem cell storage bank in Africa together with a leading pathology
group.
The acquisition of the stake in Lazaron is considered to be a highly
strategic investment, which will add substantial income to the group in
years to come through a management agreement entered into between JDH
and Lazaron. Secondly, JDH might elect to dispose of a portion of its
interest in Lazaron once this company is well established, thereby
strengthening its cash reserves in favour of further diversification.
Strategic Overview
JDH remains committed to implementing the board`s Vision 2005 Business
Strategy. The company reached the milestones set for 2004 by
concluding at least 2 strategic acquisitions during 2004. The board is
confident that JDH and its stakeholders will see good returns from
these investments in years to come.
The board is currently reviewing various other opportunities, and the
company aims to conclude at least one more acquisition before June
2005. While the board remains mindful of a too rapid approach to
expansion, the challenge facing management remains to provide
stakeholders with a company that has turned its fortunes.
Current subsidiaries and the associate company have strong
entrepreneurial management teams, which will be strengthened as they
grow.
Accounting Policies and Audit Report
The financial statements have been prepared in accordance with South
African Statements of Generally Accepted Accounting Practice.
The results have been audited by Fisher Hoffman PKF (Newlands) Inc. and
their unqualified audit report is available for inspection at the
company`s office.
Dividends
No dividends have been declared or are intended to be declared for the
period under review.
Appointment of Directors
In compliance to the listing requirements of the JSE Securities
Exchange South Africa, the board has decided to separate the roles of
managing director and chairman of the board.
Mr H de V Minnie, a director of Vinguard Ltd and Lazaron, has been
appointed as managing director of JDH effective from 01 October 2004.
Mr N J Ackermann has been appointed as financial director of JDH, JDC,
Vinguard Ltd and Lazaron, effective from 01 October 2004.
Mr LF Harris remains the executive chairman.
The board welcomes the addition of the new directors whose main aim and
task will be to implement the adopted business strategies in terms of
its declared Vision 2005.
Date: 04/10/2004 03:12:47 PM Produced by the JSE SENS Department
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