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Revenue for the group increased from R 5 714 233 in 2010
(12 months) to R 6 463 609 this is notwithstanding the
limited trading inVinguard Limited for the period.The profit
after taxation reflected a profit of R 279 388 compared to a
loss of R 9 084 125 recorded in the previous period.
The improved performance is attributable to a combina-
tion of factors including:
•
Significantly improved gross profits as a result of
increased revenue in the high margin biotechnology
operations;
•
Increase in other income primarily the disposal of the
Matesa claim and write off of the balance of the loan
from Golden Oak Corporate Advisors (Pty) Ltd and
•
The write back of tax assets impaired in the previous
period.
The group operations continued to experience working
capital constraints impacting on the trading performance
of the subsidiaries.
Vinguard’s turnover for the 12months reduced to R 368 590,
a 90% reduction compared to the previous reporting pe-
riod. The majority of Vinguard’s sales are generated from
mid-November during the South African table grape har-
vesting season. Unfortunately the Escalator funding, re-
leased to the business at end September 2010, was too late
and was also limited, resulting in Vinguard being unable to
secure raw materials in terms of the production schedules.
The business was unable to produce SO
2
sheets for distri-
bution during the 2010/2011 South African season as well
as for the traditional international markets. The incoming
directors, appointed in terms of the group restructure, re-
duced overheads for the last nine months under review in
order to limit losses. The company however incurred once
off restructuring expenses.
In comparison Lazaron’s revenue increased by 64% to
R 3.2 million. The increased sales performance was realised
over the latter half of the 15 months under review.The cost
of development of the sales channels increased overheads
during the same period.
The Cryo Save SA operations contributed 41% of the JDH
Group’s total revenue for the 15 month period despite
its active trading being limited to the last three months
of the financial year, from its effective date of 1 July 2011.
During this period the Cryo-Save SA trading was limited
to purely export storage services. The local storage option
became available from mid-September 2011. The revenue
generation was therefore somewhat depressed for the
three months to 30 September 2011 but none the less
record breaking sales were achieved. The associated
start-up costs resulted in a loss for the period of R 369 000.
JDH Credit Services was finally incorporated into the group
on 1 September 2011. The company reflected a small loss
for this initial period of R 80 216 and has an accrued debtors
book of just under R 4.6 million as at the close of the period.
The primary cost in the business is interest from loan capital.
Conversion of the Escalator Capital loan post the period will
reduce the cost of capital resulting in JDH Credit Services
becoming profitable.
The Group statement of financial position reflects a positive
net asset value position despite the history of operating
losses. The Group restructure is being funded by Escalator
through the finance restructure facility.The board obtained
a letter of continued financial support from Escalator un-
dertaking the continued funding of the restructuring pro-
cess until the Group operations become self-sustaining.
The sustainability of the group is being addressed in the
short term through improvement in the trading results as
well as through the corporate action pending at the period
end. On 10 June 2011, the directors announced two par-
tially underwritten rights offers, in JDH for R15 million and
in Lazaron for R 4.4 million, to recapitalise the Group and
return the statement of financial position to solvency.
The directors are confident that the combination of the
corporate restructuring, aggressive management of the
existing subsidiaries and further strategic acquisitions will
ensure the future sustainability of the group.