Milkworx presses on with its R4,7m issue

Milkworx makes and distributes ice cream and related products, under its own brands, Avondale and Creamstar, and as a contract manufacturer for multinational groups.

It recently expanded its range to include fresh milk, yoghurt, drinking yoghurt, maas, dairy blends and fresh cream. The expansion contributed to growth in the six months to December, although it had a R470,000 loss.

For the six months to December, turnover was up 13%, earnings per share 53% and headline earnings per share up 47%. Turnover rose because of price increases and higher demand in contract packing from existing clients, with volumes increasing a new contract manufacturing contract and more favourable weather conditions.

Growth was limited to the Avondale segment, up 22% while the Creamstar segment continued downward trend with a decrease of 7%.

The shares would be issued at 2c per share and be fully underwritten by Inshare. The aim was to provide working capital, to expand business operations by improving existing plant and equipment, and cut debt.

At the recent annual meeting, shareholders agreed R6m could be invested in the company by a “strategic investor”, who had subscribed for 266,7-million shares at 2.25c.

On Wednesday, Milkworx traded at 3c per share, unchanged from the previous day's close. Market capitalisation is R28m with 934-million shares in issue. Its high since listing was 59c.

Milkworx also said it would capitalise R4,7m of loan accounts held by directors through issuing 220,7-million shares. It will repurchase and cancel 208,7-million shares from the liquidators of South African Horticulture Technologies and the trustees of insolvent estate The Cruickshank Industrial Trust, both previously controlled indirectly by Angus Cruickshank, previous chairman.

Milkworx would repurchase the 35% to remove “substantial uncertainty” on control of the company.

Cruickshank allegedly poisoned himself a day after selling an interest in Ovation to a Fidentia subsidiary. He was linked to J Arthur Brown, Fidentia CEO, who faces fraud charges.

At least R1bn is thought to be missing at the former investment company, including benefits for widows and orphans of mineworkers, from the Umbrella Trust Fund, later renamed Living Hands, from which about R600m is missing.

Fidentia's accounts were in a shambles when curators were called in. Forensic specialists spent months unravelling a tangled web of complicated financial deals, hidden assets and shell companies.

Source: Business Day

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