6 Months 12 Months 
30 Sept 2010 31 Mar 2010 
US$'000 US$'000 
Property, plant and equipment 2,203 2,28...
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Cottco Holdings Limited HY 2011 financial results


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Cottco Holdings Limited leading Agriculture company listed on the Zimbabwe Stock Exchange has released their half year Results . Check out insights into this company in their presentation which appears below.
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Cottco Holdings Limited HY 2011 financial results

  1. 1. UNAUDITED AUDITED 6 Months 12 Months 30 Sept 2010 31 Mar 2010 US$'000 US$'000 Property, plant and equipment 2,203 2,283 Current assets 435 1,129 Total assets 2,638 3,412 Deferred tax 612 612 Current liabilities 281 2,809 Total liabilities 893 3,421 Net assets 1,745 (9) Revenue 244 1,484 Loss from operations (711) (2,090) (Loss)/profit for the year (743) (2,139) 5. Supplementary Information UNAUDITED UNAUDITED AUDITED 6 Months 6 Months 12 Months 30 Sept 2010 30 Sept 2009 31 Mar 2010 US$'000 US$'000 US$'000 5.1 Depreciation 3,682 4,275 7,288 5.2 Capital expenditure 6,733 3,406 6,080 5.3 Commitments for capital expenditure Contracted for - - 943 Approved by the Directors but not yet contracted for 3,622 12,848 6,363 TOTAL 3,622 12,848 7,306 COMMENTARY ECONOMIC OVERVIEW The economic environment continues on a stable footing, though recovery and growth are significantly limited by lack of liquidity and high interest rates. On the other hand, power outages remain a considerable constraint to economic recovery. Furthermore, consumer demand remains largely subdued due to low disposable incomes. As a result, local firms continue, mostly, to operate below capacity, thus compromising their competitiveness against imported goods. However, commodity prices improved remarkably in the first half of the year and continue to rise. OPERATIONS REVIEW Cotton Seed cotton intake improved in the last season to 111 075 tonnes up from previous year intake of 98 091 tonnes. High interest costs, arising, mostly, from short term debt carryover debt, will result in the business performing below expectation. It is critical, therefore, that this debt is eliminated and/or restructured. Ginning is almost complete and disbursements for the forthcoming planting season have started. The Regulations which are now a year old, saw relatively more orderly procurement of the crop, though there were concerns over failure by the industry to reign in one or two unlicenced operators. Discussions are underway and agreement is imminent on how to handle similar situations going forward. Meanwhile, the business will continue to operate within the confines of the Regulations together with like minded companies in the Cotton Ginners Association and together we will succeed. Seed Seed production was satisfactory with all business units meeting or exceeding their targets. In particular, Zimbabwe achieved a threefold growth in seed production. Maize seed production went up by 83% while overall seed production grew 35% over prior year. Exports to neighbouring countries resulted in winter cereal volumes growing by 68% over last year. FMCG Sales volumes for the period were 98% above last year, albeit off a low base. However, performance continues to be constrained by liquidity problems. It is imperative that funding issues in this business are resolved in order to return it to profitability. Spinning Demand for the company's products is good. Sales volumes were 30% ahead of last year. Though prices were higher than last year, they lagged behind increases in the global prices of lint resulting in very thin margins. GROUP PERFORMANCE Group performance has been disappointing with losses forecast in Cottco, Olivine and Scottco. An injection of capital is critical to the future success of the Group. Revenue of US$53.1 million was 12% lower than last year due to lower carryover stocks. Loss before tax was US$11.7 million. High interest costs affected overall performance of the Group. Net cash utilized in operations amounted to US$63.3 million - driven in the main by crop procurement activities across the Group. Capital expenditure for the half year was US$6.7 million TREASURY The Board is actively pursuing various fund raising options for the Group. Shareholders will be advised of progress in due course. OUTLOOK Aggregate volumes will be higher than last year. We expect strong performance from the Seed business. However, high interest costs in Cotton and slow volume growth in FMCG due to liquidity and working capital constraints will retard overall Group performance. Both the Cotton and FMCG businesses will record losses for the year to March 2011. Subject to the funding and capital structure constraints in these two businesses being addressed, they remain very attractive businesses which should return to profitability soon thereafter. DIRECTORATE The Board wishes to advise that Messrs Patrick Rooney and Filip Montfort were appointed directors of the Company with effect from 6 August 2010 and 12 October 2010 respectively. The Board extends a warm welcome to these new members and looks forward to their valuable contribution. Mr Patison Sithole who has been Chairman of the Group for the past five years stepped down from the Board on 10 November 2010, after serving on the Group Board for a total of ten years. Mr Bhekitemba Nkomo, who has been the Audit Committee Chairman during this time will take over from Mr Sithole as Chairman of the Board. Meanwhile, the Board and Staff at AICO Africa Limited wish to take this opportunity to thank Mr Sithole for his leadership, counsel and guidance during what was a most difficult period. We wish him well in all his future endeavours. DIVIDEND In line with the Group's policy, no interim dividend has been declared. By Order of the Board ABRIDGED GROUP STATEMENT OF COMPREHENSIVE INCOME For The Six Month Period Ended 30 September 2010 UNAUDITED UNAUDITED AUDITED 6 Months 6 Months 12 Months 30 Sept 2010 30 Sept 2009 31 Mar 2010 US$'000 US$'000 US$'000 (Loss)/profit for the period (10,903) (4,197) 2,397 Other comprehensive income Foreign currency translation differences from foreign operations (2,265) 7,597 1,026 Revaluation of property, plant and equipment 23 - (141) Impairment charge against revaluation reserve - - (12,130) Income tax on other comprehensive income 32 - 7,894 Other comprehensive (loss)/income for the period (2,210) 7,597 (3,351) Total comprehensive (loss)/income for the period (13,113) 3,400 (954) Total comprehesive (loss)/income attributable to: Equity holders of the parent (15,214) 1,726 4,102 Non-controlling interest 2,101 1,674 (3,148) (13,113) 3,400 (954) ABRIDGED GROUP INCOME STATEMENT For The Six Month Period Ended 30 September 2010 UNAUDITED UNAUDITED AUDITED 6 Months 6 Months 12 Months 30 Sept 2010 30 Sept 2009 31 Mar 2010 US$'000 US$'000 US$'000 Revenue 53,082 54,501 162,879 (Loss)/profit from operations (4,173) (1,204) 12,783 Investment income 679 88 519 Other (losses)/gains (42) 1,890 2,413 Finance costs (8,170) (5,302) (10,840) (Loss)/profit before taxation (11,706) (4,528) 4,875 Income tax expense 1,546 331 (339) (Loss)/profit after tax from continuing operations (10,160) (4,197) 4,536 Loss from discontinued operations (743) - (2,139) (Loss)/profit for the period (10,903) (4,197) 2,397 (Loss)/profit attributable to: Equity holders of the parent (10,060) (2,781) (4,270) Non-controlling interest (843) (1,416) 6,667 (10,903) (4,197) 2,397 Weighted number of shares in issue ('000) 531,065 551,563 530,650 Basic loss per share (US cents) (1.89) (0.52) (0.80) Diluted loss per share (US cents) (1.82) (0.51) (0.78) ABRIDGED GROUP STATEMENT OF FINANCIAL POSITION As At 30 September 2010 UNAUDITED UNAUDITED AUDITED 6 Months 6 Months 12 Months 30 Sept 2010 30 Sept 2009 31 Mar 2010 ASSETS Non-current assets Property, plant and equipment 119,115 131,901 116,800 Investment property 684 1,141 684 Other financial assets 1,818 - - Investment in associate 65 65 65 Total non-current assets 121,682 133,107 117,549 Current assets Assets classified as held for sale 2,638 - 3,441 Other current assets 154,406 129,357 103,691 Total current assets 157,044 129,357 107,132 Total assets 278,726 262,464 224,681 EQUITY AND LIABILITIES Capital and reserves Equity attributable to equity holders of the parent 71,861 87,381 82,455 Non-controlling interest 28,087 31,295 32,117 Total equity 99,948 118,676 114,572 Non-current liabilities Borrowings 268 54 10 Deferred tax liabilities 24,036 38,365 25,974 Finance lease liabilities - - 258 Total non-current liabilities 24,304 38,419 26,242 Current liabilities Liabilities classified as held for sale 904 - 1,252 Other current liabilities 153,570 105,369 82,615 Total current liabilities 154,474 105,369 83,867 Total equity and liabilities 278,726 262,464 224,681 ABRIDGED GROUP STATEMENT OF CASH FLOWS For The Six Month Period Ended 30 September 2010 Cash flows from operating activities Operating cash flow before reinvesting in working capital (2,044) 18,154 (Decrease)/increase in working capital (54,326) 3,094 Net finance costs (5,384) (10,840) Taxation paid (1,583) (2,022) Net cash (utilised)/generated from operations (63,337) 8,386 Net cash outflow from investing activities (6,599) (5,871) Net cash inflow from financing activities 44,515 340 (Decrease)/increase in cash and cash equivalents (25,421) 2,855 GROUP STATEMENT OF CHANGES IN EQUITY For The Six Month Period Ended 30 September 2010 US$'000 US$'000 US$'000 UNAUDITED AUDITED 6 Months 12 Months 30 Sept 2010 31 Mar 2010 US$'000 US$'000 ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT NON-CONTROLLING Head Office: 1st Floor, SAZ Building, Northend Close, Northridge Park, Borrowdale, Harare, Box BW537, Borrowdale, Harare, Tel: 263-4-852795, 853054-6, 853059 Fax: 263-4-850705 P Manamike Company Secretary 10 November 2010 Abridged Group Unaudited Results For The Six Month Period Ended 30 September 2010 NOTES TO THE FINANCIAL STATEMENTS 1. Presentation The financial statements are presented in United States dollars, which is the Group's functional currency. The financial information presented in United States dollars has been rounded off to the nearest thousand. 2. Accounting policies Accounting policies have been applied consistently with those used in the Group financial statements of AICO Africa Limited for the year ended 31 March 2010. 3. Statement of compliance The financial statements have been prepared in conformity with International Financial Reporting Standards (IFRS) except for certain comparative information which is not fully compliant. Although IAS 1 Presentation of Financial Statements requires that comparative information be disclosed, comparative information for the Statement of Cash Flows for September 2009 has not been included as management and the Board concluded that for the period ended 30 September 2009 compliance with the requirements of this standard would have been so misleading that it would conflict with the objective of fair presentation in accordance with the Framework for the Preparation and Presentation of Financial Statements. 4. Discontinued operations 4.1 The Group has closed down two of its smaller operations. a) Exhort Enterprises (Pvt) Limited The Group's frozen vegetables operation which was performing unsatisfactorily was discontinued. Operations have been wound up and the entity is being disposed of. b) Salamax Trading (Pty) Limited Salamax Trading (Pty) Ltd had been established as a buying office in South Africa in 2008. Since economic conditions have positively changed, the Board decided that the office had served its purpose and was no longer required. It has since been closed. 4.2 Discontinued operations In compliance with the requirements of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, the assets and liabilities of the discontinued operations amounting to US$2.6 million and US$0.9 million, respectively have been included in the Group Statement of Financial Position as 'assets classified as held for sale', and as 'liabilities classified as held for sale'. During the year, discontinued operations recorded a loss of US$0.7 million which has been included in the Group Income Statement as 'loss from discontinued operations'. The analysis of assets, liabilities and performance of the discontinued operations is shown below. Directors: BL Nkomo (Chairman), P St. L Devenish* (Group Chief Executive), CC Chitiyo (Ms), F Montfort, CB Mudzimuirema*, AF Nhau, LF Preston, JP Rooney (*Executive) TOTAL Share Capital Revenue Total INTEREST EQUITY Capital Reserves Reserves US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Balance at 31 March 2009 - 52,143 33,512 85,655 29,621 115,276 Changes in equity for the year ended 2010 - Share based payments transactions - (11) 476 465 74 539 Reversal of non-controlling interest reserves - 236 201 437 (437) - Dividend paid - - - - (289) (289) Total comprehensive income/(loss) for the year (net of tax) - 168 (4,270) (4,102) 3,148 (954) Balance at 31 March 2010 - 52,536 29,919 82,455 32,117 114,572 Changes in equity for the year ending 2011 Share based payments transactions - 417 - 417 - 417 Dividend paid - - - - (1,928) (1,928) Total comprehensive loss for the half year (net of tax) - (951) (10,060) (11,011) (2,102) (13,113) Balance at 30 September 2010 - 52,002 19,859 71,861 28,087 99,948