| Fri 30 Sep 2005, 17:48 | | John Daniel Holdings Limited - Abridged Annual Fi |
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John Daniel Holdings Limited - Abridged Annual Financial Statements
For The Year Ended 30 June 2005
JOHN DANIEL HOLDINGS LIMITED
Incorporated in the Republic of South Africa - Registration number:
1998/013215/06
JSE Code: JDH - ISIN: ZAE000044343 - ("the Company" or "JDH" or "the Group")
Abridged Annual Financial Statements
For the year ended 30 June 2005
Abridged Balance Sheet
Group Group
Audited Audited
2005 2004
R"000 R"000
ASSETS
Non-current assets 16,466 12,031
Property, plant and 3,353 4,306
equipment
Goodwill 5,607 7,009
Intangible assets - -
Investments 4,500 -
Deferred tax 2,282 716
Loan receivable 724
-
Current assets 2,583 3,738
Total assets 19,049 15,769
EQUITY AND LIABILITIES
Capital and reserves 11,615 5,144
Minority interest 4,444 (429)
Non-current liabilities 1,501 3,029
Interest-bearing 599
borrowings 48
Non-interest-bearing 1,453 2,430
borrowings
Amounts owing to group
companies - -
Deferred tax
- -
Current liabilities 1,489 8,025
Total equity and 19,049 15,769
liabilities
Net asset value 16,059 4,715
Net tangible asset value 10,452 (2,294)
Net asset value per 0,28 0,08
share (cents
Net tangible asset value 0,18 (0,04)
per share (cents)
Abridged Annual Financial Statements
For the year ended 30 June 2005
Statement of Changes in Equity
Capital Non- Total
distributa Accumulate
ble d
Group Reserve Loss
R"000 R"000 R"000 R"000
Balance at 30 June
2004 23,915 5,359 (24,130) 5,144
Net profit for the
period - - 6,471 6,471
Balance at 30 June
2005 23,915 5,359 (17,659) 11,615
Abridged Annual Financial Statements
For the year ended 30 June 2005
Abridged Income Statement
Group Group
Audited Audited
2005 2004
R"000 R"000
Revenue 6,151 13,611
Cost of sales (5,261 (12,131)
Gross profit 890 1,480
Other operating income 12,626 70
Selling, distribution and (9,838)
administration expenses (14,995)
Operating profit/(loss) 3,678
(13,445)
Net finance costs (48) (298)
Taxation 1,388 699
Minority interest 1,453 430
Net profit for the year 6,471
(12,614)
Basic earnings 6,471
(12,614)
Headline earnings 6,364 (4,224)
Basic earnings per share 0,11 (0,22)
(cents)
Headline earnings per share 0,11 (0,07)
(cents)
Weighted average number shares 5,805,97 5,783,05
in issue (000"s) 6 9
Number of shares in issue 5,805,97 5,805,97
(000"s) 6 6
Reconciliation between basic
and headline earnings
Basic earnings 6,471
(12,614)
Impairment of goodwill and 1,402 8,400
intangibles
Profit on disposal of property, (1,509) (10)
plant and equipment
Headline earnings 6,364
(4,224))
Abridged Annual Financial Statements
For the year ended 30 June 2005
Abridged Cash Flow Statement
Group Group
Audited Audited
2005 2004
R"000 R"000
Net cash flow from operating
activities (5,679) (4,759)
Net cash flow from investing
activities 2,552 (1,327)
Net cash flow from financing
activities 4,587 5,478
Cash movement for the year
1,460 (608)
Cash and cash equivalents at the
beginning of the year (244) 364
Cash and cash equivalents at the
end of the year 1,216 (244)
Comments
REVIEW OF RESULTS AND FINANCIAL POSITION
At the beginning of 2003 the board of JDH adopted its "Vision 2005" business
strategy. The aim and ultimate goal of this strategy was to develop and grow
JDH as an investment holding company with diversified investments in high
technology companies. As a listed investment holding company JDH and its
shareholders were previously too exposed to a single income stream through the
heavy trailer manufacturing subsidiary, particularly due to the historically
poor sentiment towards venture capital investments which inhibited the company"s
ability to access additional funding.
The board is pleased to inform stakeholders that the "Vision 2005" business
strategy has been implemented with a great deal of success. As a Venture
Capital Company JDH has maintained its traditional focus of developing new
technologies that have not only local but global income potential. The latest
investment in Lazaron Biotechnologies (SA) Ltd ("Lazaron") has been a very
strategic investment for JDH and, particularly as Lazaron is involved in the
unique and specialized biomedical field of stem cells and the future medical
applications thereof.
Stakeholders will note that JDH has chosen the early adoption of International
Financial Reporting Standards (IFRS).
From a group financial perspective JDH has achieved a profit of R6,5M. This
from a loss of (R12,6M) in the previous year. Headline earnings are up by 252%
to R6.4M from a headline loss in the prior year of (R4.2M).
Important to stakeholders is the substantial increase in the net tangible asset
value of R10,4M in the current year as apposed to a net tangible liability
situation of (R2,3M) in the prior year.
Group liquidity has improved substantially from a net current liability of
(R4,3M) in the prior year to a net current asset position of R1,1M.
Taking a closer look at the company"s market positioning, the PE ratio of JDH in
relation to the average of both the Venture Capital and Alt-X markets in the
third quarter of 2005 is as follows: AltX +9, VCM - 7.9 and JDH +9.
At the end of June 2005 the group remains cash positive by R1,2M.
OPERATIONAL OVERVIEW
Group Overview
The growth and development of JDH through its investment strategy has been
satisfactory. Stakeholders are reminded that the future growth and subsequent
financial success of JDH is dependant on its subsidiaries achieving good levels
of profitability. Currently the board sees no reason why JDH will not continue
to provide good returns into the future.
High technology companies by their very nature are dependant on good market
acceptance of their specialized products or services. On the other hand, if
successful, the profitability is inevitably much higher in niche markets. Group
focus therefore will be directed towards commercially developing the company"s
investments, and assisting these companies to realize their full potential.
John Daniel Containers Ltd ("JDC")
JDC continues to trade through its manufacturing agreement with Kearney"s Truck
and Trailer CC. No final decision has been made regarding a further renewal or
a possible merger of the two entities.
The board has set a target for a final decision in this respect for the end of
October 2005. Stakeholders will be kept informed.
Vinguard Ltd ("Vinguard")
During the past year, Vinguard has been highly successful in developing its
overseas network under the guidance of foremost SO2 sheet specialist, Mr
Cristian Gomez, who joined the company during March 2005. The company has
entered into various international distribution and sale agreements in a number
of countries. The details of these agreements remain commercially sensitive.
Prospects for Vinguard remain extremely positive, particularly as the company
has recently also successfully completed various international scientific trials
of its products, some together with leading overseas academic institutions.
This enables Vinguard to confidently supply its products to global markets in
the next season. The new manufacturing plant has been commissioned and product
will be supplied to local and South American markets during the summer grape
season.
Lazaron Biotechnologies (SA) Ltd
Lazaron recently completed its IPO very successfully and raised R6.5M. The
success of the IPO underscores the potential of this company from an investment
perspective. As a strategic investment this was very successful for JDH as a
group.
Lazaron managed to establish its human cord blood stem cell laboratories and
facilities, prior to the closing of the public offer. The board remains
confident that Lazaron will realize enormous returns for the group, particularly
when Lazaron develops its human regenerative cell division and the animal bio-
cell division. Lazaron aims to develop these divisions in the short term and
JDH will continue to support this exciting investment opportunity. The board is
currently reviewing the option for JDH to increase its stake in this company.
This will be determined by group cash reserves.
PROSPECTS
The goals and milestones of the "Vision 2005" business strategy, to focus on
generating profits through diversified investments in high technology companies,
has to a large extent been met. Shareholders" confidence in the group has
improved as has the group"s ability to attract business opportunities.
The challenge remains to identify good opportunities then to develop and
commercialize these within the group"s investment focus. JDH will continue to
search for new opportunities while remaining cognisant of its size, resources
and financial ability.
In order to set a course for future growth the board, together with various
external advisors, have developed a five year growth plan with strategic and
measurable milestones that need to be met in all subsidiary and associate
companies. Management in these companies have agreed to the adoption of this
business strategy referred to as "JDH towards twenty ten". The main aim of this
business strategy is to grow JDH to the size where it will qualify for a listing
on the main board of the JSE Ltd. While this remains an ambitious target,
stakeholders are assured of the full commitment of all the employees of the
company towards this goal.
Stakeholders remain advised that JDH might choose to realize certain underlying
assets or part thereof in favour of increasing its cash flow. The increased
cash flow will be used to invest in other opportunities, which are under review.
DIVIDENDS
No dividends have been declared or proposed for the period under review.
ACCOUNTING POLICIES
The financial statements have been prepared in accordance with International
Financial Reporting Standards. The principle accounting policies adopted in the
preparation of these financial statements are consistent with those of the prior
year except for the effects of first time adoption of International Financial
Reporting Standards.
Reconciliation of equity of 1 July 2003 (date of transition to IFRSs)
Note GAAP Effect IFRSs
of
transiti
on to
IFRSs
R000"s R000"s R000"s
Property, plant and 3 321 (58) 3 263
equipment
Deferred tax asset - 18 18
Retained earnings (11 475) (40) (11 515)
Total liabilities
Change in accounting
policies:
Goodwill
Goodwill was previously amortised over 20 years. Goodwill is now being treated
as per the new policy disclosed under the accounting policies.
Property, plant and equipment
Property, plant and equipment were previously depreciated on the straight line
basis over the useful lives of the assets. Property, plant and equipment is now
being treated as per the new policy disclosed under the accounting policies.
Financial instruments
All investments were previously accounted for as available for sale financial
assets. Investments are now all classified as a financial asset or liability
through profit or loss.
AUDIT REPORT
These results have been audited by PKF (Newlands) Inc. and their unqualified
audit report is available for inspection at the company"s registered office.
For and behalf of the Board.
LF HARRIS
Chairman
Stellenbosch
30 September 2005
Directors: LF Harris (Executive Chairman), HD Minnie (CEO), NJ Ackermann
(Financial Director), DJ Hall (Executive Director), T Mvusi (Non-Executive
Director), S Tshiki (Non-Executive Director), S Serex (Non-Executive Director)
Company Secretary: Capital Commitments Limited
Registered Office: Infruitec Northern Terrain, Lelie Street, Stellenbosch 7600,
PO Box 1243, Stellenbosch, 7599.
Transfer Secretaries: Computershare Investor Services 2004 (Pty) Ltd, 70
Marshall Street, Marshalltown 2001. PO Box 61051, Marshalltown, 2107.
Sponsor: LPC Manhattan Moela (Pty) Ltd
Auditors: PKF (Newlands) Inc.
Date: 30/09/2005 05:48:40 PM Produced by the JSE SENS Department
