| Mon 13 Nov 2006, 8:30 | | Wellco Health Limited - Trading update |
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WLL
WLL
Wellco Health Limited - Trading update
WELLCO HEALTH LIMITED
(Registration No: 2005/005805/06
JSE code: WLL
ISIN: ZAE000071841
("Wellco" or "the Company")
Trading update
The company would like to advise shareholders that the earnings and
headline earnings for the interim period, 1 March 2006 to 31 August 2006,
are expected to be materially lower in relation to the comparative period
in the prior year.
For the six month period ending 31 August 2006, the company expects a loss
and headline loss of between R2,6 and R2,7 million compared to a headline
loss of R385,824 for the same period in the prior year. The loss per share
is accordingly expected to increase from 0,99 cents per share to a loss of
between 4,00 and 4,15 cents per share. Headline loss per share is
accordingly expected to increase from 1,34 cents per share to a headline
loss of between 4,00 and 4,25 cents per share.
As at 31 August 2006, the company expects a net asset value per share of
approximately 50,02 cents per share, compared to a net asset value of 52,65
cents in the prior year. The net tangible asset value per share is expected
to increase from (9.69) cents per share to approximately 3.75 cents per
share.
The expected losses mentioned above can be mainly attributed to the
following factors:
The favourable 100% increase in comparative turnover has been a function of
strong marketing and advertising support. The additions to the Herbology
brand, most notably in the Lifestyle and Oils range, have meant a
commensurate increase in the investment in launching these new variants.
Whilst the investment took place in the first half of the year the revenue
streams are anticipated to accrue over the next 12 months. The marginal
increase in costs is approximately R1,3m.
The costs of integration of the acquired Nutribrands business have been
higher than initially expected. The integration process had to be extended
to ensure that all the acquired products were compliant with Medical
Control Council and Department of Health regulations and statute. This
entailed the revision of packaging, product formulations and composition,
as well as the recall of non compliant products. The marginal cost of
integration is approximately R1,8m.
Staffing costs have doubled to R2,2m. This is a function of the company
increasing their executive capability to meet the group"s obligations as a
listed entity and to develop a sound business model to ensure growth in the
different commercial areas.
The Wellco board is presently finalising their review of the Company"s
results for the interim period ended 31 August 2006. These unaudited
interim results will be published on or about the 15 November 2006.
Shareholders are advised that the information in this trading statement has
not been reviewed or reported on by Wellco auditors.
Johannesburg
13 November 2006
Designated Advisor
River Group
Warning: The listing of the ordinary shares in the company is on the ALTX.
Shareholders are advised of the risks of investing in a company listed on
the ALTX. Shareholders are advised that the JSE does not guarantee the
viability or the success of a company listed on the ALTX. In terms of the
JSE Listings Requirements a designated advisor has to be retained by the
company. The designated advisor is required to, inter alia, attend all
board meetings held by the company to ensure that all JSE Listings
Requirements and applicable regulations are complied with, approve the
financial director of the company and guide the company in a competent,
professional and impartial manner. If the company fails to retain a
designated advisor it must make arrangements to appoint a new designated
advisor within 10 business days, failing which the company faces suspension
of trading of its securities. If a designated advisor is not appointed
within 30 days of its suspension the company faces the termination of its
listing without an offer to minority shareholders.
Date: 13/11/2006 08:30:05 AM Produced by the JSE SENS Department
