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CNX
CNX
Conafex - Preliminary announcement of unaudited results for the period ended
30th September 2006
Conafex Holdings Societe Anonyme
(Incorporated in Luxembourg
RC Luxembourg No. B 17789)
("Conafex")
JSE CODE: CNX ISIN: LU0243998001
Registered office
6 rue Adolphe Fischer, L-1520,
(PO Box 1361, L-1013)
Luxembourg
Preliminary announcement of unaudited results for the period ended 30th
September 2006
Group Profile
Conafex is an African agri-resource group listed on the Luxembourg and
Johannesburg stock exchanges. Conafex takes strategic, controlling and
private equity stakes in businesses focused on horticulture, niche and value-
added agriculture.
Corporate Activity
As described in last year"s Report and Accounts, we fully provided against all
investments in Zimbabwe. Simultaneously we transferred ownership of those
assets to an unlisted company, ZRC Limited, and the shares in ZRC Limited were
then distributed to shareholders as a dividend in specie.
Once the doubt over valuation of any legacy interest in Zimbabwe had been
removed we raised additional funding from two new investors of R6,335,000
(US$955,000) at R14.93 (US$2.25) per share to support future growth.
The strategic decision has been taken to concentrate investment in businesses
in Southern Africa in which we can add value and where we can have significant
influence.
Following on from this decision it is appropriate that the reporting currency
should be changed to South African Rands, and so these results have been
prepared in South African Rands.
We have sold our small minority stake in Rose Blooms of Zambia Limited at a
small profit because it had become apparent that we would not be able to exert
significant influence.
On 16th August 2006 it was announced that Conafex had acquired 25% of the
issued share capital and loan accounts of Simply Cereal (Pty) Limited for R50
and R4,846,900 respectively. Simply Cereal produces and markets in South
Africa a quality range of breakfast cereals, mueslis and cereal snack bars.
Overview
Cape Natural Tea Products, the herbal tea processing and marketing subsidiary
maintained its earnings in a highly competitive environment with little relief
from the strong rand.
The Grassroots Group, which exports most of its natural lifestyle and health
products, is accounted for as an associate and turned in an excellent
performance particularly from phyto medicinals.
Accord Services, our subsidiary in the United Kingdom similarly showed good
growth and made a valuable contribution.
Kenya Highlands Seeds suffered reduced sales caused by the drought in East
Africa during the early part of the agricultural season but was profitable.
In its first year as a subsidiary, our coffee company Global Coffee Exports
Limited put in a solid performance and continues to trade roast, ground and
soluble coffee. Subsequent to the year end a small roasting facility in Cape
Town has been acquired with potential for meaningful growth.
Our investment in JSE listed Intertrading Limited has been a disappointment
and the company is being reorganised to enable it to return to profitability.
Financial
The Group made a loss attributable to shareholders of R2,907,000 (2005 - loss
R12,299,000) for 13 month period. The loss includes an exceptional item of
R1,856,000, related mainly to the cost of the reduction in capital mentioned
above and an allotment of shares to a Conafex Employee Share Benefit Trust.
Dividend
As a result of the losses incurred the company is unable to pay a dividend for
the 13 month period ending 30th September 2006.
Prospects
We expect the underlying businesses within the Conafex group to continue to
show growth in the year ahead. However to realise their potential these
embryonic businesses in which we have invested will undoubtedly require
significant plough-back of any surpluses. We will continue the process of
disposing of any non-core businesses and will seek opportunities within South
Africa for further expansion and acquisitions.
MARK BURRELL
Chairman
30th November 2006
NOTICE OF MEETING
The Annual General Meeting will take place on Friday 30th March 2007 at 3.30
p.m. at the registered office of the Company, 6 rue Adolphe Fischer L-1520
Luxembourg. Copies of the annual report and accounts will be posted to
shareholders in December 2006.
Unaudited Consolidated Profit And Loss Account
Period Year
ended 30th ended 31st
September August
2006 2005
R000 R000
Group revenue including share of 45,012 28,054
associates
Less share of revenue of associates (16,212) (12,442)
Revenue 28,800 15,612
Operating costs (30,795) (17,097)
Operating loss (1,995) (1,485)
Share of associated companies" results 2,255 1,019
Income from investment in Zimbabwean 41 44
subsidiary - dividend
Dividend receivable 68 81
Interest receivable 342 559
Exchange (losses)/gains (63) 236
Interest paid and similar charges (359) (615)
Profit/(Loss) on ordinary activities 289 (161)
before exceptional items and tax
Exceptional items (1,856) (11,050)
Loss before tax and minority interests (1,567) (11,211)
Taxation on ordinary activities (1,072) (1,044)
Loss after tax before minority interests (2,639) (12,255)
Minority interests (268) (44)
Loss attributable to shareholders of the (2,907) (12,299)
Group
Reconciliation of headline earnings per
share
Loss per share SA cents (189)c (908)c
Exceptional item, net of tax and minority 120 c 856 c
interests (SA cents)
Headline loss per share SA cents (69)c (52)c
Unaudited Consolidated Statement of Recognised Gains and Losses
Period Year ended
ended 30th 31st
September August
2006 2005
R000 R000
Exchange differences on translation of 1,935 (1,206)
the financial statements of foreign
entities
Proceeds of new shares issued, net of 6,335 -
costs
Fair value adjustment of investments (2,572) 1,528
Dividend forfeit in respect of prior - 64
year
5,698 386
Net loss for the period (2,907) (12,299)
Total recognised gains/(losses) and 2,791 (11,913)
change in shareholders" funds
Opening shareholders" funds 21,022 32,935
Closing shareholders" funds 23,813 21,022
Unaudited Consolidated Balance Sheet
At 30th 31st August
September 2005
2006 R000
R000
Assets
Non current assets
Property, plant & equipment 1,913 264
Goodwill 1,501 -
Investments 9,270 12,841
12,684 13,105
Current assets
Inventories 5,787 941
Accounts receivable 14,517 2,876
Cash and bank balances 2,557 9,147
22,861 12,964
Current liabilities
Accounts payable falling due within one (8,380) (4,525)
year
Net current assets 14,481 8,439
Total assets less current liabilities 27,165 21,544
Creditors due after more than one year (273) -
Deferred taxation (180) -
26,712 21,544
Capital and reserves
Called up share capital 21,819 52,411
Share premium account 1,390 -
Other reserves 707 2,914
Retained earnings (103) (34,303)
Shareholders" funds 23,813 21,022
Minority interests 2,899 522
26,712 21,544
Unaudited Consolidated Cash Flow Statement
Period ended Year ended
30th 31st August
September 2005
2006 R000
R000
2006 2005
R000 R000
Cash Flows from operating activities
Cash utilised by operations (6,328) (1,995)
Interest paid (358) (615)
Taxation paid (693) (1,125)
Net cash outflow from operating (7,379) (3,735)
activities
Investment activities
Purchase of tangible assets (614) (12)
Disposal of investments 353 (3,661)
Acquisition of loan notes in Simply (4,847) -
Cereal
Proceeds on disposal of investments 1,160 11,310
Acquisition of minority interest in (1,293) -
Cape Natural Tea Products
Further acquisition of minority (609) (472)
interest in Accord Tea Services
Dividends received from Zimbabwean 41 44
subsidiary
Interest received and other investment 543 640
income
Net cash (outflow)/inflow from (5,266) 7,849
investment activities
Net cash (outflow)/inflow before (12,645) 4,114
financing
Financing
Proceeds of new shares issued, net of 6,335 -
costs
Dividend paid to minorities - (12)
Net cash inflow from financing 6,335 (12)
Net (decrease)/ increase in funds (6,310) 4,102
Net funds at start of period 8,271 4,200
Effect of foreign exchange rate changes 39 (31)
Net funds at end of period 2,000 8,271
Notes:
1. Investments have been reflected in accordance with IAS 39. The results
for the period ended 30th September 2006 and the balance sheet at that date
have been prepared on the basis of accounting policies adopted for the year
ended 31st August 2005. The financial statements comply with International
Financial Reporting Standards. The results, which have been reviewed by the
Company"s auditors, AGN Horsburgh & Co., are unaudited.
2. Capital expenditure during the year was R614,000 (2005 - R13,000). At
30th September 2006, there were no material outstanding capital commitments
(2005 - S$nil).
Earnings per share are based on the results attributable to shareholders and
the average number of shares in issue during the year - 1,536,518 (2005
adjusted for share consolidation - 1,355,038).
30 November 2006
Johannesburg
Sponsor
Imara Corporate Finance South Africa (Pty) Ltd
Date: 30/11/2006 03:09:53 PM Produced by the JSE SENS Department
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