MMDZ Audited Results for FY Ended 31 Dec 13
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Transcript of MMDZ Audited Results for FY Ended 31 Dec 13
CHAIRMANS REPORT
Highlights:
• Group revenues increased 14% from $13.8 million in 2012 to $15.7 million in 2013.
• Chicago Cosmetics (Pvt) Ltd has a strong first year.
• MedTech Food and Beverage (Pvt) Ltd associate commences business and records sales of $1.58 million.
Zimbabwe Pharmaceuticals (Pvt) Ltd
As previously advised to the shareholders the Group has accepted a firm offer from a local company for the entire shareholding of Zimbabwe Pharmaceuticals, for the sum of $1.00, but with certain guarantees against historic debt with some security in place for this debt.
The local consortium has not yet provided security, nor has Zimbabwe Pharmaceuticals paid installments due on the debt guarantee. Talks with the buyer are ongoing, and the Board has made full provision against the debt, amounting to $670,912.
Medical Segment
2013 2012
Revenues $2,035,866Gross Profit % 34,5%
The Medical Segment includes MedTech Medical and Scientific (Pvt) Ltd and Education and Laboratory Services Division including Laboratory Services. The segment has delivered sales growth of 22,4%, however this was lower than expected. Sales were constrained by ongoing problems in the medical supplies sector emanating from delayed payments to pharmacists and government institutions by Medical Aid Societies. This in turn reduced re-orders from Medical service providers.
Business expectations are that the segment will recover and financing options currently being pursued will assist in funding working capital as the segment experiences strong anticipated demand for both local and imported product.
In the fourth quarter of 2012, the Group set up a toiletries manufacturing subsidiary in Ruwa. Fundamentals are positive and well branded Baby Line Petroleum jelly, and Clere glycerine, are manufactured. 2013 revenues reflect a full year of production. The products, which were previously imported by MedTech Distribution, are sold to MedTech Distribution for sale to the wholesale and retail trade. The product range is set to expand as more equipment arrives.
The associate company has achieved country wide distributorship status from PepsiCo Inc. The brands actively sold are Pepsi, Mirinda, and 7Up. The business has received further investment and will continue its growth in 2014.
The MedTech Holdings share of the business is 20%, and has not been required to make capital input.However the Group’s contribution comprises Management and Distribution expertise. No share of the associatecompany result is included for the year as this is insignificant.
The FMCG Segment includes MedTech Distribution and Smart Retail. Segment sales grew 13.1% compared with the corresponding period, with Distribution growth of 21,9% being offset by lower Retail sales.
Gross margins in Distribution were lower due to proportionally higher sales to wholesale customers.
The margins in FMCG are susceptible to exchange rate fluctuations. Management adjusts costings according to exchange rate changes. The exchange gain for the year of $475,743 relates to transaction and translation movements on foreign denominated balances.
Group
The 2013 year was one of mixed success for the Group. The Distribution business enjoyed strong demand and grew 13.6%. Challenges were experienced at MedTech Medical and Scientific due to slow debtors payments and a shortage of capital.
The financing cost of the group reduced 10% in line with lower interest rates. The interest costs continue to be actively managed by the Directors.
Debtors collection performance improved in the first half of the year, however large customers delayed payments in the second half. The Board has made adequate provision for doubtful debts amounting to $177,000 for FMCGsegment and $130,804 in the Medical segment.
Outlook
The Board does not expect increases in real incomes for the target market sectors, and as such, growth in sales will only be achieved through increased market share for key products. The macro-economic outlook could witness an upturn if policy consistency and investor confidence improves.
Dividend
In view of the performance of the Group, the Board has decided that there will be no dividends declared for 2013.
Appreciation
I would like to record my thanks to our customers, suppliers, fellow directors, managers and staff for their role in the development of the MedTech Group. The Group remains focussed on performance and is committed to stakeholders who share similar values.
R. MazulaChairman
1st April 2014
Directors: R. Mazula (Chairman), A. Motiwala* (CEO);K.P. McCosh*(Finance);F. Sheikh; T.Sheikh; V. Lapham. (*Executive) Auditors Statement
These financial results should be read in conjunction with the complete set of financial statements for the year ended 31st December 2013, which have been audited by AMG Global and an unmodified audit opinion dated 1stApril issued thereon. The auditors report is on the financial statements, which form the basis of these financial results, is available for inspection at the Company’s registered office.
GROUP STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CASH FLOWS
GROUP STATEMENT OF CHANGES IN EQUITY
As at 31 December 2013
TOTAL ASSETS
Non current assetsProperty, plant and equipment 525,582 Deferred taxation 88,121Loans receivable 547,162
1,160,865
Current assetsInventories 3,595,087 Accounts receivable 2,588,299 Loans receivable 123,750 Cash and bank balances 168,329
6,475,465
Total assets 7,636,330
EQUITY AND LIABILITIES
EquityIssued share capital and reserves 1,309,483
Non-current Liabilities
Current liabilitiesAccounts payable 3,753,207 Short term loans payable 939,816Amounts owed to related parties 276,590 Taxation 228,406 Dividends payable 22,398
5,413,318
Total equity and liabilities 7,636,330
year ended 31 December 2013
2012 $
NET CASH FLOWS FROM OPERATING ACTIVITIES
Net cash flows from operations 221,687
Returns on investments and servicing of financeNet financing income 81,867
Taxes paidIncome tax paid (4,700)Net cash flows from operating activities 298,854
NET CASHFLOWS FROM INVESTING ACTIVITIES
Loans receivable (670,912)Acquisition of plant and equipment (185,574)Proceeds from disposal of equipment 11,717 Disposal of subsidiary company (408)Net cash flows from investing activities (845,177)
NET CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of shares -Net movement in short-term loans payable (36,280)
DECREASE IN CASH AND CASH EQUIVALENTS
(582,603)
Year ended December 2013
Non Non-Share Share Distributable Retained Controlling
Capital Premium Reserve Earnings Total Interest Total$ $ $ $ $ $ $
Balance as at31 December 2013 27,996 1,562,694 1,011,253 (1,936,796) 665,147 850,581 1,515,728
Total comprehensiveloss for the year - - - (644,336) (644,336) 72,675 (571,661)
Issue of shares toNon-controlling Interests - - - - - 98 98
Balance as at31 December 2011 27,996 1,562,694 1,011,253 (868,408) 1,733,535 522,267 2,255,802
Disposal of Business - - - - - 157,455 157,455 Total comprehensiveloss for the year - - (424,052) (424,052) 98,086 (325,966)Balance as at31 December 2012 27,996 1,562,694 1,011,253 (1,292,460) 1,309,483 777,808 2,087,291
Non- Controlling Interests 777,808 Total equity 2,087,291
Deferred taxation 135,721
Bank Overdraft 192,901
SUPPLEMENTARY INFORMATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2013
1. Statement of compliance
The underlying financial statements to these results have been prepared in accordance with International Financial Reporting Standards and in the manner required by the Companies Act (Chapter 24:03).
2. Accounting policies and reporting currency
There have been no changes in the Company’s accounting policies since the date of the last audited financial statements. The underlying financial statements to these results are presented in United States dollars, which is the functional currency of the Company.
3. Contingent liabilities
The Company had no material contingent liabilities as at 31 December 2013.
4. Supplementary information
2013 2012 $ $
Capital expenditure 183,262Depreciation expense 143,721Approved Capital Commitments at the date of approval of the financial statements 252,662Operating profit from continuing operations 35,502Operating profit is stated after charging items of significance:Auditors remuneration 56,252Directors Fees 23,900
Approval and events after the reporting period
The underlying financial statements to these results were approved by the Board on 1st April 2014. Subsequent to the reporting period date there were no material adjusting or non-adjusting events.
8. Discontinued Operation - Zimbabwe Pharmaceuticals (Pvt) Ltd
See Chairmans Report for a detailed report on Zimbabwe Pharmaceuticals (Pvt) Ltd.
8.1 Loss for the period from discontinued operation
2013 2012$ $
Revenue 961,200 Expenses (1,808,646)Net financing costs - Loss before tax (847,446)Attributable tax 113,795
(733,651)Gain on fair value less cost of sale 321,094
Attributable tax 53,389 Loss for the year from discontinued operations (359,168)
Loss for the period attributable to non-controlling interests - Loss for the period attributable to owners (359,168)
(359,168)
8.2 Cashflows from discontinued operations
Net cash in/(out) flows from operating activities (4,338)Net cash in/(out) flows from investing activities (1,261)Net cash in/(out) flows from financing activities - Net cash in/(out) flows (5,599)
2013 2012Note $ $
Year ended 31 December 2013Turnover 13,810,700Cost of sales (10,067,385) Gross profit 3,743,315
Operating Profit 35,502Net financing income 81,867Profit before taxation 117,369Taxation (84,167)Profit from continuing operations 33,202
Loss from Discontinued Operations 8.1 (359,168) Loss for the year after taxation (325,966)Other comprehensive income -Total comprehensive loss for the year (325,966)
Attributable to:Owners of the Parent from continuing operations (64,884)Owners of the Parent from discontinued operations (359,168)
(424,052)
Non Controlling Interests from continuing operations 98,086 Non Controlling Interests from discontinued operations -
98,086
(325,966) Earnings/(Loss) per share cents cents
Earnings/(Loss) per Share from Continuing Operations (0.002)Loss per Share from Discontinued operations (0.013)Headline Earnings/(Loss) per Share (0.002)
Ordinary Shares in issue during the year
HOLDINGS L I M I T E D
Med Tech
PERMANENT HAIR COLOUR
For me, colour and shine...
- Quick and easy apply- Gives radiant colour- Guaranteed results
RICH PERMANENT HAIR COLOUR
- Guaranteed results
RICH PERMANENT HAIR COLOUR
2,799,634,872
2013 $
2012 $
2013 $
ABRIDGED AUDITED FINANCIAL RESULTSFOR THE YEAR ENDED 31 DECEMBER 2013
$2,491,09832,0%
FMCG Segment
2013 2012
Revenues $11,823,756Gross Profit % 27,2%
$13,375,68824,7%
Manufacturing Segment
2013 2012
Revenues $213,609Gross Profit % 27,7%
$2,113,08022,2%
Associate Company: MedTech Food and Beverages (Pvt) Ltd
In previous years MedTech used two report Segments – Trading and Manufacturing.
Following an internal reorganization the previous “Trading” Segment has been split into FMCG and Medical. This is because the Medical businesses, comprising MedTech Medical and Scientific, MedTech Education and Laboratory, including Laboratory Services are distinct from the FMCG business, comprising Personal Care and Toiletries ranges sold through major retail and wholesale customers.
The Manufacturing Segment remains unchanged.
The 2012 comparative segment report has been restated to reflect the above changes.
Additional Operating Segment
684,960186,753
101,742
47,500
Impairment of accounts receivable - (670,912)
(670,912)
(670,912) (670,912)
--- -
15,699,986(11,185,331)
4,514,655
101,742151,374253,116
(153,865)99,251
(670,912) (571,661)
-(571,661)
26,576(670,912)(644,336)
72,675 -
72,675
(571,661)
0.001(0.024)0.001
2,799,634,872
1,018,889 150,879
- 1,169,768
4,165,935 3,122,687
- 137,762
7,426,384
8,596,152
665,147 850,581
1,515,728
178,196
5,010,881 919,106345,330 392,054
-
6,836,394
8,596,152
169,024
Finance leases - 65,833 135,721244,029
509,373
151,374
(10,500)650,247
-(684,960)
5,200 -
(679,760)
45,123
(6,690)
98
Dividends paid -(22,398)
200,000
29,441
--
- --
- -
-
-
Net cash flows from financing activities (36,280)22,823
5. Property, Plant and Equipment
The Chicago Petroleum Jelly and Glcerine Plant were installed and fully operational in the first quarter of the year at a cost of $250,001. In addition the FMCG Segment acquired vehicles costing $374,340. The balance of the capital spent was for computers, software and office equipment bringing total capital expenditure to $684,960.
6. Accounts Payable
The accounts payable increased from $3,753,027 to $5,010,881 due primarily to Chicago plant and equipment and raw material supplies.
7. Issue of Shares
The Chicago Cosmetics (Pvt) Ltd manufacturing plant was a joint venture whereby a private equity partner provided expertise and access to finance to establish the business in exchange for 98 shares valued at $1,00 each, representing 49% of the issued share capital of Chicago Cosmetics (Pvt) Ltd.