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BEIGE - UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2004
BEIGE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration No: 1997/006871/06)
Share code: BEG ISIN code: ZAE000034161
(`Beige` or `the company`)
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2004
Group Income Statements
Unaudited for Unaudited for Audited for
the 6 months the 6 months the year
ended ended ended
31 August 31 August 2003 29 February
2004 R`000 2004
R`000 R`000
Revenue 41 802 34 078 69 519
Cost of sales (27 822) (20 013) (47 194)
Gross profit 13 980 14 065 22 325
Operating expenses (15 059) (12 829) (19 406)
Depreciation - (283) (632)
Operating(loss)/ profit (1 079) 953 2 287
Other income 19 27 26
Net (loss)/profit from (1 060) 980 2 313
activities before finance
charges and tax
Finance charges (188) (16) (224)
Net (loss)/profit before (1 248) 964 2 089
taxation
Taxation (42) (336) 137
Net (loss)/profit for the (1 290) 628 2 226
period
Calculation of headline R`000 R`000 R`000
earnings
Net (loss)/profit for the (1 290) 628 2 226
period
Adjustments for:
Write Back of unidentified -- -- (87)
deposits -- -- (750)
Capital Profit
Amortisation of goodwill 813 604 1 516
Negative goodwill recognised (32) (32) (63)
in the income statement
(Loss)/profit on disposal and (10) -- (75)
impairment of plant and
equipment
(519) 1 200 2 767
Tax effect of adjustments -- -- --
Headline (loss)/ earnings for (519) 1 200 2 767
the period
Ordinary shares in issue
(000`s)
- Weighted 282 099 261 881 272 126
- Fully diluted (Note 1) 316 829 309 131 311 442
Earnings per share
information
Attributable (loss)/earnings (0,46) 0,24 0,82
per ordinary share (cents)
Headline (loss)/earnings per (0,18) 0,46 1,02
share (cents)
Fully diluted attributable (0,41) 0,20 0,71
(loss)/earnings per share
(cents)
Fully diluted headline (0,16) 0,39 0,89
(loss)/earnings per share
(cents)
Notes
1. Fully diluted earnings per share information is reflected showing the
potential effect of full dilution for 26 000 000 options held by Beige directors
and Mr GP Victor to subscribe for new shares in Beige at 7,5 cents.
Group Balance Sheets
Unaudited as Unaudited as Audited as at
at at 29 February
31 August 31 August 2003 2004
2004 R`000 R`000
R`000
ASSETS
Non-current assets 8 896 6 406 9 198
Plant, equipment and vehicles 3 769 2 082 3 546
Investment - intangibles 1 707 1 277 2 189
Deferred taxation 3 420 3 047 3 463
Current assets 35 261 30 786 28 766
Inventories 13 906 11 667 12 715
Accounts receivable - trade 19 811 17 029 12 691
- other 614 1 369 2 497
Taxation prepaid 47 531 67
Cash resources 883 190 796
Total assets 44 157 37 192 37 964
EQUITY AND LIABILITIES
Capital and reserves 23 723 22 798 25 471
Shareholders` funds 23 723 22 798 25 471
Non-current liabilities 1 215 332 963
Long-term liabilities 1 215 332 963
Current liabilities 19 219 14 062 11 530
Accounts payable - trade 14 272 10 917 8 567
- other 614 547 --
Current portion of long-term 332 10 324
liabilities
Taxation 98 37 215
Bank overdraft 3 903 2 551 2 424
Total equity and liabilities 44 157 37 192 37 964
Ordinary shares in issue
(000`s)
At period end 282 099 282 099 282 099
At period end including
shares to be issued for 290 829 -- 290 829
purchase of 49% of Get Fresh
(Note 1 and 3)
Fully diluted (Note 2 and 3) 316 829 316 829 316 829
Net asset value per share
information
Net asset value per share 8,41 8,08 9,03
(cents)
Net tangible asset value per 7,80 7,63 8,25
share (cents)
Net asset value per share
(cents) including shares 8,16 n/a 8,76
issued for purchase of 49%
minority
Net tangible asset value per
share (cents) ) including 7,57 n/a 8,01
shares issued for purchase of
49% minority
Fully diluted net asset value 7,49 7,20 8,04
per share (cents)
Fully diluted net tangible 6,95 6,79 7,35
asset value per share (cents)
Notes
1. The number of shares to be issued to Craig van Zeil in relation to the
acquisition of the remaining 49% of Get Fresh as previously disclosed,
namely 13 316 213 shares, has reduced to 8 729 893 due to an adjustment
relating to warranted debtors not being realised. This has reduced the
purchase price by R458 632.
2. Fully diluted net asset value per share information is reflected, showing
the potential effect of full dilution for 26 000 000 options held by
directors and Mr GP Victor to subscribe for new shares at 7,5 cents each.
3. Prior periods partially diluted and fully diluted information per share has
accordingly been restated.
Abridged Group Cash Flow Statement
Unaudited for Unaudited for Audited for
the the the year
6 months 6 months ended ended
ended 31 August 2003 29 February
31 August R`000 2004
2004 R`000
R`000
Net cash (outflow)/inflow (559) (774) 2 434
from operating activities
Net cash (outflow)/inflow (803) (257) (4 880)
from investing activities
Net cash (outflow)/inflow (30) 82 2 230
from financing activities
Net decrease in cash and cash (1 392) (949) (216)
equivalents
(Bank overdraft)/cash and (1 628) (1 412) (1 412)
cash equivalents at beginning
of period
Bank overdraft at end of (3 020) (2 361) (1 628)
period
Group Statement of Changes in Equity
Share Share Accumulated Shares to Total
Capital premium loss be issued
R`000 R`000 R`000 (R`000) R`000
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
Issue of 8 723 850 shares 87 611 - (698) -
for Dudley`s acquisition
Issue of 30 000 000 300 1 950 - - 2 250
shares for conversion of
loans
Profit for period - - 2 226 - 2 226
49% of Get Fresh - net - - (256) - (256)
liability assumed
Issue of shares after - - - 1 331 1 331
year end for 49% of Get
Fresh
Balance at 29 February 2 821 94 315 (72 996) 1 331 25 471
2004
Reduction in shares to be - - - (458) (458)
issued for Get Fresh
Net loss for the period - - (1 290) - (1290)
Balance at 31 August 2004 2 821 94 315 (74 286) 873 23 723
COMMENTARY
The directors of Beige announce the results for the six months ended 31 August
2004. 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 (GAAP).
Results
The results for the period ended 31 August 2004 reflect an increase in revenue
for the 3rd consecutive year and by 23% for the comparative period. Despite the
increase in revenue, the group has shown a headline loss of R519 000 for the
period compared to headline earnings of R1,2 million for the comparable period
in the prior year. The decline in earnings is primarily attributable to
continued pressure on gross margin, partly due to the strengthening of the Rand
over the comparative period as it relates to export sales and local pricing
pressure, reflecting in the drop in gross margin percentage from 41% for the
comparative period to 34% for the current period. Measures continue to be put
in place to address local and export pricing and, as a result, gross margin
compared to the year ended 29 February 2004 has been maintained. Additional
write-offs were also incurred in the current period due to the prior year
quality problems experienced in the handover of the Get Fresh manufacturing
responsibilities. In addition, production for the Tura contract, secured during
May 2004, only commenced properly in July 2004 due to hand over delays from the
previous manufacturer, although infrastructure and carrying costs were incurred
in the period. Operating costs rose by 15%, largely as a result of marketing
costs being higher than the comparative period and the Tura contract, the
benefits of which are expected to be reflected in the full year results.
Shareholders are reminded that the company`s business is seasonal and it has now
entered its traditionally busy period.
Group review
Beige is a contract manufacturing company that manufactures and distributes
cosmetics, soaps, laundry soaps and allied products for bath and body care for
the South African and international markets. The business operations are
undertaken by clearly focused subsidiaries, located in Gauteng.
During the period, the Group focused on securing the Tura contract, gearing up
its manufacturing operations and securing additional plant to increase its
capacity. It also continued with the bedding down of structural and operational
changes implemented in the prior period. The continued investment in the
Group`s marketing drive has yielded results, with new deals and export
opportunities flowing through at a satisfactory rate.
During the period, an adjustment was made to the purchase price of the remaining
49% of Get Fresh as a result of certain warranted debtors not being recovered.
Accordingly, the purchase price has been reduced by R458 632 and only 8 729 893
additional shares at 10 cents per share are to be issued to Craig van Zeil,
resulting in a total cost of acquisition of R1 078 216, inclusive of the initial
cash portion paid of R205 227.
Subsequent to 31 August 2004, the Group has acquired plant and equipment to the
value of approximately R2 million from Elan Products (Proprietary) Limited,
which is to be financed by taking over a R1,5 million loan with the Industrial
Development Corporation and the balance through the issue of 4 316 667 new Beige
shares at 12 cents per share, subject to some minor conditions precedent. There
are no profit warranties in relation to this acquisition.
Dividends
No dividend has been declared for the six months ended 31 August 2004.
Prospects
The Group moves into the new period with a strong order book, the international
contract with Tura now in production and increased capacity within the Group.
To improve productivity further, the Group has identified a manufacturing
facility to house all subsidiary operations and it is expected that the Group
will relocate in the early part of 2005, subject to finalisation of lease
negotiations.
Beige is now entering its traditionally busy period and expects to return to
profitability for the year ending 28 February 2005.
By order of the Board
John Rawlings Mark Di Nicola
Chairman Chief Executive Officer
09 November 2004
Johannesburg
Company Secretary and Registered Office
Arcay Client Support (Pty) Ltd (Registration number
1998/025284/07)
Arcay House, Number 3 Anerley Road, Parktown, 2193
PO Box 62397, Marshalltown, 2107
Directors
JH Rawlings Chairman**, MM Di Nicola Chief Executive Officer,
IL Stromin, MK von Berg, C van Zeil, KDD de Villiers*, LI
Karp*, GH Pinches#, NP le Roux#
(*Non-executive **American #Alternate)
Designated Advisor Transfer Office
Arcay Group Limited Ultra Registrar
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