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BIO - BioScience - Unaudited results for the six months ended 31 December
Wed, 10 Mar 2010 16:30
BIO
BIO
BIO - BioScience - Unaudited results for the six months ended 31 December
2009
BIOSCIENCE BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number: 2005/005805/06)
Share code: BIO ISIN code: ZAE000115036
("BioScience" or "the company")
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2009
CONDENSED GROUP Unaudited Unaudited Audited
INCOME STATEMENT 6 months 6 months 12 months
ended ended ended
31 December 31
December 30 June
2009 2008 2009
R R R
Revenue 28 513 307 38 227 131 66 503 641
Cost of sales (12 470 734) (16 585 604) (29 236 454)
Gross profit 16 042 573 21 641 527 37 267 187
Operating expenses (16 112 143) (19 968 959) (47 670 557)
Operating (69 570) 1 672 568 (10 403 370)
(loss)/profit
Net finance costs (930 644) (1 546 007) (2 998 453)
(Loss)/profit before (1 000 214) 126 561 (13 401 823)
taxation
Taxation (379 440) - (1 323 100)
Net (loss)/profit (1 379 654) 126 561 (14 724 923)
attributable to
ordinary
shareholders
CONDENSED GROUP Unaudited Unaudited Audited
BALANCE SHEET 31 December 31 December 30 June
2009 2008 2009
R R R
ASSETS
Non current assets
Property
plant and 1 197 449 764 020 951 498
equipment
Intangibles assets 54 659 016 52 144 154 54 659 016
Deferred tax asset 279 991 451 473 659 431
Total non-current 56 136 456 53 359 647 56 269 945
assets
Curent assets
Inventories 11 103 990 16 329 556 12 944 918
Trade and other 13 095 850 20 900 304 14 453 195
receivables
Cash and cash 579 654 3 151 980 1 973 639
equivalents
Total current assets 24 779 494 40 381 840 29 371 752
Total assets 80 915 950 93 741 487 85 641 697
SHAREHOLDER`S EQUITY
Equity and
liabilities
Capital and reserves
Issued capital 244 287 202 162 244 287
Share premium 111 371 533 98 077 440 111 371 533
Accumulated loss (64 072 345) (47 841 207) (62 692 691)
Ordinary 47 543 475 50 438 395 48 923 129
shareholders equity
LIABILITIES
Non current
liabilities
Loans and borrowings 6 373 25 519 16 535
Total non-current 6 373 25 519 16 535
liabilities
Current liabilities
Taxation payable 1 928 433 600 537 1 928 433
Trade payables 11 382 432 14 397 617 11 532 717
Other
payables and 9 152 773 6 748 329 9 871 337
accruals
Short term portion
of loans and 2 629 533 17 421 423 4 490 894
borrowings
Bank overdraft 8 272 931 4 109 667 8 878 652
Total current 33 366 102 43 277 573 36 702 033
liabilities
Total Equity and 80 915 950 93 741 487 85 641 697
Liabilities
CONDENSED GROUP CASH Unaudited Unaudited Audited
FLOW STATEMENT 6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2009 2008 2009
R R R
Cash flows generated
from/(used in) 1 497 443 (4 778 818) (6 052 041)
operating activities
Cash flows used in (414 184) (4 911 172) (12 888 589)
investing activities
Cash flows (used
in)/ from financing (1 871 523) 9 000 000 12 303 314
activities
Decrease in cash & (788 264) (689 720) (6 637 316)
cash equivalents
Cash & cash
equivalents at (6 905 013) (267 967) (267 967)
beginning of year
Cash & cash (7 693 277) (957 687) (6 905 013)
equivalents at end
of year
CONDENSED GROUP
Unaudited Unaudited Audited
STATEMENT OF CHANGES 6 months 6 months 12 months
IN EQUITY ended ended ended
31 December 31 December 30 June
2009 2008 2009
R R R
Balance at beginning 48 923 129 40 311 834 40 311 834
of the period
Issue of share - 10 000 000 23 336 218
capital
(Loss)/profit for (1 379 654) 126 561 (14 724 923)
the period
Balance at end of 47 543 475 50 438 395 48 923 129
the period
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The interim financial results have been prepared in accordance with IAS
34: Interim Financial Reporting and using accounting policies in
compliance with International Financial Reporting Standards and the
Companies Act in South Africa and is consistent with the prior year.
BioScience has adopted all the statements and interpretations issued
and effective during the current period by the International Accounting
Standards Board ("IASB"). The adoption of these standards and
interpretations did not have any significant impact on the financial
results.
The Company`s auditors have not reviewed or audited these results for
the six months ended 31
December 2009.
2. EARNINGS, HEADLINE EARNINGS AND NET ASSET VALUE PER SHARE
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2009 2008 2009
Cents per Cents per Cents per
share share share
(Loss)/earnings per
share
Basic (0.0565) 0.0067 (0.7092)
Diluted* (0.0565) 0.0030 (0.7092)
Headline
(loss)/earnings per
share
Basic (0.0575) 0.0070 (0.7096)
Diluted* (0.0575) 0.0031 (0.7096)
Net asset value per 1.95 2.49 2.00
share
Weighted average
shares in issue
(`000)
Basic 2 442 870 1 892 666
2 076 378
Diluted* 2 442 870 4 217 206 2 076 378
R R R
Calculation of
headline earnings:
(Loss)/profit
attributable to (1 379 654) 126 561 (14 724 923)
ordinary shareholders
Adjustments for:
(Profit)/loss on (24 560) 5 322 (9 225)
disposal of property,
plant and equipment
Headline(loss)/profit (1 404 214) 131 883 (14 734 148)
for the period
*the diluted per share information shows the full effect of the
exercise of options granted by the company, which options terminated in
June, August and September 2009.
3. COMMENTARY
On the basis of a two pronged approach to both streamline operations
and extend market reach; BioScience Brands Limited is structurally
poised for improved performance into the future. The company has
completed the consolidation and restructuring associated with
integration of Wellco Health, Bioharmony and Muscle Science, and has
cut costs overall. Manufacturing and distribution inefficiencies have
been resolved with very few out-of-stocks being experienced across the
all active products and
service levels into customers are consistently
at target levels. Working capital continues to improve with better
debtor days, stock levels and stock mix.
Bioscience further made significant investment into new brands, brand
rejuvenation and brand promotion during the period under review. The
benefits of this will be experienced in the next few months:
* Xplode launched as a brand with ready-to-drink beverages and
shots.
* Staminade launched as a brand with ready-to-drink beverages and
bars.
* Muscle Science re-launched in new packaging and re-formulated.
* Muscle Science bars launched.
* Herbology, re-formulated and re-branded, has increased its
listings into additional customers.
* Bioharmony advertising campaign launched. This includes a 13-
episode television series on DSTV featuring Patrick Holford.
Flighting commenced on 1 February 2010.
Most of BioScience`s brands operate in the premium sector of the
nutritional supplements market. Numerous tactical promotion
initiatives were implemented during the period under review but the
performance of Bioscience at large continued to be compromised by the
recessionary retail environment. In addition Muscle Science sales were
impacted when the re-launch had to be delayed by 2 months due to
supplier problems diluting the impact of the re-launch. The gross
margin across the business has been maintained at very similar levels
to the same period
last year. Advertising at R3.6m (12.4% of turnover)
is R1.6m less than last year which was 13.4% of turnover. Total
overheads, at R9.4m, are R2.1m less than last year. All origination,
design and launch costs associated with the Muscle Science re-launch,
Xplode launch, Staminade launch and the introduction of bars were
expensed in the period. This amounts to approximately R609k. Similarly
approximately R172k associated with the origination and design of the
Bioharmony 2010 campaign was expensed as incurred during the period.
Had these costs not been prudently expensed but amortised over the
period of the new launches, BioScience would have made a Operating
Profit of R489k during the period under review. Finance costs remained
high during the period under review with R683k related to the old
Wellco facility and loans and the interim loan required
for the
acquisition of Bioharmony and Muscle in 2008. This interim loan was
required due to the rights offer, which formed part of the `initial
transaction` as per the Circular to Shareholders dated 13 August 2008,
being delayed. All repayments have been scheduled and the capital
portion of the interim loan has been repaid.
A segmental analysis has not been prepared as the group does not have
more than one segment and operates within South Africa.
4. DIRECTOR APPOINTMENTS
Mr J Fenster was appointed to the Board during the period under review.
Subsequent to the period end, Mr Ian Black, Chairman of the Board
decided not to stand for re-election at the AGM on 28 January 2010 and
tendered his resignation with effect from the conclusion of the
meeting.
5. CONTINGENCIES AND COMMITMENTS
The group has no outstanding contingencies or commitments that the
directors are aware of.
6. DIVIDENDS
No dividends have been declared for the period under review.
7. ACQUISITIONS, DISPOSALS AND ISSUES OF SHARES FOR CASH
During the period under review, there were no acquisitions, disposals
or issue of shares.
8. FUTURE PROSPECTS
Prospects
The company infrastructure, support functions and suppliers have been
optimised and the success of the business now rests
totally on its
ability to leverage these assets toward increased sales and profits.
Bioscience has responded to the difficult trading environment with
novel campaigns which maximise brand potential. Bioharmony`s 13-part
television series `Naturally You`, featuring Patrick Holford, is a
first for the nutritional supplement industry in South Africa and
initial indications are that it is indeed having the desired effect. It
has resulted in Bioharmony increasing its listings into national
grocery stores and increasing the number of products listed at existing
national customers. The Muscle Science re-launch with its innovative
packaging has weathered the delay in the initial launch and competitor
activity to counter its shelf appeal, and consumers are reacting
positively. The roll-out of Xplode and Staminade into grocery stores
and garage
forecourts has been initiated.
Overall the business is targeting a small profit at the end of June
2010, signalling the end of the turnaround phase of this business.
By order of the Board
MG Allan PA Ireland
Chief Executive Officer Financial Director
10 March 2010
Durban
Company Secretary and Registered Office
Statucor (Pty) Ltd
Number 3 Anerley Road, Parktown, 2193 PO Box 62397, Marshalltown, 2107
Business Address
10 Ennisdale Drive, Durban North
Directors
MG Allan (Chief Executive Officer), PA Ireland (Financial Director), M
Strydom*, M Di Nicola*, Y Bhayat*, JJ Fenster*.
(*Non-executive)
Designated Advisor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
Transfer Office
Computershare Investor Services (Pty) Ltd
Date: 10/03/2010 16:00:01 Produced by the JSE SENS Department.
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