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12
JOHN DANIEL HOLDINGS LIMITED AND ITS SUBSIDIARIES
INTEGRATED ANNUAL REPORT 2011
Chief Executive Officer’s Report -
Continued
Operational Highlights
The board of JDH introduced a R15 million rights of-
fer to shareholders in September 2011. The purpose of
the offer was to rehabilitate the JDH balance sheet and
to raise working capital for the group. The rights offer
was partially underwritten by Escalator Capital Limited
who have continued to support the directors efforts.
The rights offer was fully subscribed. 214 285 714 shares
were issued to existing shareholders and the issued
share capital increased from 157 652 363 to 371 938 677.
R 15 million was raised in cash and the action in con-
junction with other improvements implemented had
the effect of returning the company to solvency.
The structure of Lazaron was changed during the pe-
riod under review as the venture with Cryo-Save NV has
eliminated the need for a large storage infrastructure
within Lazaron. The reduction in the overheads has
substantially improved the profitability of the compa-
ny. Lazaron continues to provide state of the art stem
cell harvesting and cryogenic storage of stem cells de-
rived from cord blood and tissue and will in the future
become more directly involved in the application of
therapies. It is also the intention to create a dedicated
animal division to leverage the research and develop-
ment which has been conducted in this field.
Vinguard did not manufacture gas sheets for the sea-
son during the period under review and this had a det-
rimental effect on the company’s profitability, This was
however substantially mitigated by the rightsizing ex-
ercise concluded late last year and the net effect was
in fact a reduced loss. Funds have been allocated and
production has commenced for the new season. Initial-
orders are very promising and the company anticipates
significantly improved revenue generation for the next
period. Refinement of the Vinguard products and ex-
tensive testing in the off season has resulted in the best
product on the market in the view of the directors.
Two strategic acquisitions were made during the pe-
riod, A 100% stake in Viscacom (Pty) Ltd a niche market
credit provider and a 50% stake in Cryo-Save South Af-
rica (Pty) Ltd a venture with Cryo-Save NV of Belgium.
The acquisition of Viscacom is the first acquisition in
the establishement of the JDH Financial Services divi-
sion. Viscacom trades as JDH Credit Services within the
greater umbrella of JDH Financial Services. The acquisi-
tion has not only provided the investment opportunity
but has also created the basis for bespoke financial ser-
vices designed to improve the market penetration of
products provided by other subsidiaries in the group.
An example of this is the payment plan provided dur-
ing October to Cryo-Save clients. JDH Credit Services
will in the short to medium term not deliver a cash flow
benefit to the group as the focus is to grow the debtors
book as rapidly as possible.
Cryo-Save South Africa began operations in July and
achieved record sales for two of the three months un-
der review. The board is particularly pleased with this
result considering that the previous Cryo-Save opera-
tion in South Africa had been trading for over nine years.
The local laboratory has been established by Cryo-Save
NV (international) to the same standards as the indus-
try leading laboratory in Belgium. Identical equipment
and protocols have been deployed resulting in a best
in class facility. Notwithstanding the start-up costs the
new company was profitable within three months.