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Directors’ Report
1. Operational review
Group Overview
John Daniel Holdings Limited (“JDH”) continued to con-
duct business as a venture capital investment holding
company, and will continue to do so, focusing on invest-
ing in companies which are niche players and strategic
in nature. Preference is given to companies which have
clear African and Global markets. In particular, these
companies are required to produce products or provide
services with high barriers to entry and high gross profit
margins.
At the beginning of the 15 month period under review
JDH held two trading subsidiaries:
• Vinguard Limited (“Vinguard”); and
• Lazaron Biotechnologies (SA) Limited (“Lazaron”).
These subsidiaries contained significant intrinsic value,
however they have consistently produced disappointing
results. In order to unlock the potential the JDH Group en-
tered into a finance restructure agreement with Escalator
Capital Limited (“Escalator”) in the last quarter of 2010.
The Group restructure process initiated at the end of
September 2010 resulted in significant changes dur-
ing the subsequent six month. The changes include,
amongst others, the re-constitution of the board of di-
rectors and all relevant governance mechanism in the
Group, repositioning the strategic direction of the Group
and the trading subsidiaries, development of appropri-
ate corporate actions to recapitalise the Group, signifi-
cant reductions in the overhead structure of Vinguard,
establishment of a marketing channel and sales force
in Lazaron, and relocation of the corporate head office
including the replacement of the Group’s financial and
administration staff.
The benefits of the measures implemented realised
during the last six months of the period under review
through improved trading results. In addition, the Group
announced a JDH and Lazaron rights offer and two ac-
quisitions:
•
Viscacom (Pty) Limited (“Viscacom”) trading as JDH
Credit Services, a wholly owned subsidiary acquired
on 1 September 2011; and
•
Rexisource (Pty) Limited trading as Cryo-Save SA
(“Cryo-Save SA”), JDH acquired a 50% stake on 1 July
2011.
The turnaround of current subsidiaries through product
and market extension, aggressive trading and cost re-
duction continues.
This includes the evaluation of product range extension
in subsidiaries, development of new markets for subsid-
iaries and rationalization of administration and support
structures. Ongoing shareholders support is required to
continue to develop the current companies and look for
new opportunities.
The new board of directors is actively investigating ac-
quisition opportunities that will improve earnings and
cash generation for the group. It is the intention of the
board to develop a robust and complementary group of
companies which provide sustainable returns.
Viscacom trading as JDH Credit Services
The conditions precedent contained in the Viscacom
acquisition agreement were met by end August 2011
and with effect from 1 September 2011 JDH acquired,
through its wholly owned subsidiary Restibyte (Pty) Lim-
ited trading as JDH Financial Services, 100% of the shares
in Viscacom for a cash consideration of R100.
JDH Credit Services is a micro finance organisation pro-
viding financial services to third party company employ-
ees and is the first acquisition by JDH in its new Financial
Services Division.
JDH Credit Services was established in 2010 and has
shown exponential growth since its incorporation. As at
30 June 2011 the company had over 200 clients and a
loan book of R2.6 million.