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ZPT
ZPT
ZPT - Zaptronix - Abridged Unaudited Interim Financial Statements And
Cautionary Announcement
ZAPTRONIX LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1997/014928/06)
Share code: ZPT & ISIN: ZAE000070934
("Zaptronix" or "the company" or "the Group")
* ABRIDGED UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE 6 MONTHS ENDED 28
FEBRUARY 2007
* CAUTIONARY ANNOUNCEMENT
HIGHLIGHTS
* 62% increase in EBIT during period of restructuring
* 42% growth in new generation mobile units under management
* 15.3% increase in turnover
* DuO v4 Mobile solution implementations
* Re-Activation of ZAP meter supply chain
* IT platform and applications paid from internally-generated funds and
under-written by the embedded value of future business
* Market penetration into distribution and courier operations
GROUP BALANCE SHEETS
Unaudited Audited Unaudited
At At At
(R`000) 28-Feb-07 31-Aug-06 28-Feb-06
ASSETS
Non-current assets
10,558 10,307 9,069
Fixed assets and
intangibles 10,088 9,837 8,786
Investment in associate
470 470 283
Current assets
5,307 4,575 5,362
Accounts receivable and
inventory 5,195 4,527 5,354
Cash and cash equivalents
112 47 8
Total assets
15,864 14,881 14,431
EQUITY AND LIABILITIES
Capital and reserves
7,255 7,011 7,147
Share capital and premium
29,632 29,632 29,651
Reserve for fair valuation
of assets 250 250 341
Non-distributable reserve-
exchange variance 65 177
Accumulated
profits/(losses) (22,692) (23,048) (22,845)
Non-current liabilities
3,529 2,994 2,925
Borrowings
3,529 2,994 2,925
Current liabilities
5,080 4,876 4,359
Accounts payable and
provisions 5,080 4,876 3,930
Bank
429
Total equity and
liabilities 15,864 14,881 14,431
Net assets value per share 1.91 1.85 1.88
(cents)
Net tangible assets value 0.20 0.20 0.53
per share (cents)
Number of shares (` 000) 379319 379319 379319
GROUP INCOME STATEMENTS
Unaudited Audited Unaudited
Six months 12-months Six months
ended ended ended
(R`000) 28-Feb-07 31-Aug-06 28-Feb-06
Revenue
11,604 20,831 10,059
Cost of sales (4,498) (7,982) (3,267)
Gross profit 7,106 12,849 6,792
Operating costs (5,483) (11,096) (5,675)
Operating profit/(loss) 1,623 1,753 1,117
Other income 3 27 31
net income/(loss) before 1,627 1,780 1,148
interest, depreciation
and exceptional items
Depreciation (1,058) (1,401) (784)
Net interest paid (280) (219) (92)
Net operating profit 289 161 272
(loss) before tax
Share of associate (2) (12)
profit/(loss)
Net profit (loss) before 289 159 260
taxation
Taxation (44) (180) (79)
Earnings (loss) after 245 (22) 181
taxation
Earnings/(loss) per share
(cents) 0.06 (0.01) 0.05
Loss on assets scrapped
(cents) -
Impairment of investment
(cents) - 0.01
Headline profit/(loss) per
share (cents) 0.06 (0.01) 0.06
Weighted average number of 379319 379319 379319
shares (` 000)
GROUP STATEMENTS OF CHANGES IN EQUITY
Unaudited Audited Unaudited
Six months 12-months Six months
ended ended ended
(R`000) 28-Feb-07 31-Aug-06 28-Feb-06
Balance at the beginning of
the period 7,011 6,625 6,625
Foreign currency
translation reserve 177
Costs incurred
(19)
Reserve for revaluation
surplus 250 341
Net profit/(loss) for the
period 245 (22) 181
Balance at the end of the
period 7,255 7,011 7,147
GROUP CASH FLOW STATEMENTS
Cash flows from operating
activities 883 1,630 127
Cash generated/(utilised)
in operating activities 1,163 1,849 219
Net interest paid
(280) (219) (92)
Cash flows from investing
activities (1,354) (3,675) (1,754)
Foreign currency
translation reserve (0)
Purchase of tangible assets
(810) (1,864) (1,065)
Purchase of tangible assets
Purchase of intangible
assets (544) (1,811) (689)
Change in investment in
associate -
Cash flows from financing
activities 535 1,811 925
Loans raised
535 1,811 925
Increase/(decrease) in cash and
cash equivalents 64 (233) (702)
Cash and cash equivalents at
beginning of year 47 281 281
Cash and cash equivalents
at end of year 112 47 (421)
COMMENTARY
Basis of preparation
1.1 Basis of preparation
The abridged interim results for the 6 months period ended 28 February 2007,
have been prepared in accordance with International Financial Reporting
Standards (`IFRS`) and the Companies Act of South Africa. The accounting
policies applied are consistent with those of the previous financial year.
1.2 Operational Review
The business of Z@ptronix is to leverage its risk management methodologies
through proprietary telematics, hardware, software and bureau services to the
Mobile & Logistics and Energy & Water Consumer market space.
The base products and services make commercial transportation safer, easier and
smarter for its customers contracted to its DuO Solutions Provider. Turnover
for the 6-months to February 2007 from the Mobile Logistic Managed Services
increased by 13.2% compared to the comparative period.
The transforming of the customer base from the historical tracking to data-
logging, contracted 24/7 technical and risk control support platforms is 62%
completed. Three blue-chip fleets have joined the DuO SP over the period.
The business base of DuO SP is evolving from safer to safer and easier, with
the result that the quality of earnings is improving. This places DuO SP in a
niche market segment that is not volume installation driven. The novel
Z@ptronix Technology has seen cost to customers reduce and the yields to DuO SP
improving. This value-add is reflected in the embedded value of future
earnings increasing by 15%.
The Energy Managed Services contributed similar earnings from Z@ptronix
Electricity Meters, compared with the 6 months to February 2006. These results
are positive, considering the significant restructuring of procurement and
manufacturing operations that were required during the 6 months to position the
Z@ptronix business for growth.
The rental business in Z@ptronix Systems had increased fourfold.
The operational leverage within Z@ptronix is coming off a smart business base
and once commercialized into the Fleet, Energy and Risk management space, will
enhance the performance of the Group.
1.3 Financial review
The results for the 6 months to February 2007 are marginally better than the
same period last year.
Turnover in the Group has increased by 15% and the operating costs of the
company have decreased by 2% to the comparative 6 months of 2006.
The cash generator in Z@ptronix is DuO SP. This business generated R1,16-
million in cash for the 6 months.
The assets of the Group and the earnings base has changed materially comparing
February 2007 to February 2006. The restructuring of the business is expected
to be completed by year-end and fully paid for from own funds.
The Group has invested a further R544 000 in its core technology. The asset
base has grown by R1,7-million. A loan of R740,000 was secured to replace
working capital tied up in procurements of components for Mobile and Energy
units on back-order.
Working capital of Z@ptronix as a Group is healthy, with suitable financial
arrangements in place. The increase in accounts payable and provisions should
be read with the cash flow statement. The loan is included in the figure of
R5,08 million as is the current liability from the rental discounting facility.
The net effect on the Group`s Balance Sheet has been an increased in total
equity of 2.1%.
There was no change in the number of shares issued and the Group EPS has moved
from 0.05 cents to 0.08 cents on a weighted average number of shares of
379,319,000.
The Balance Sheet of Z@ptronix fairly reflects the Net Asset Value. The
financial strength lies in the financial leverages in the sunken asset base,
the dual revenue generation and embedded value of the existing business base.
1.4 BEE transaction and cautionary announcement
Shareholders are referred to the announcements dated 31 March 2006 and 1
December 2006 detailing the BEE transaction with Royal Bafokeng Capital
(Proprietary) Limited ("RBC"). In terms of the agreement between Strider
Holdings (Proprietary) Limited ("Strider") and RBC ("the Strider - RBC
agreement"), Strider agreed to facilitate the BEE transaction by the transfer
of 113 795 700 shares in Zaptronix to RBC. At the same time, Zaptronix agreed
to grant RBC certain options to subscribe for up to 113 795 700 new Zaptronix
shares ("the RBC options"), which grant still required Zaptronix shareholder
approval.
The board of directors of Zaptronix ("the board") has now been informed by RBC
that the Strider-RBC agreement has lapsed due to the non-fulfilment of certain
suspensive conditions. As a result, RBC, Strider and the board have entered
into discussions with RBC regarding the BEE transaction and the RBC options and
the possible restructuring thereof.
Having regard to the above shareholders are advised to exercise caution when
trading in their Zaptronix shares until a further announcement is made in this
regard.
1.5 Dividend
No interim dividend was proposed.
Midrand
25 April 2007
For and on behalf of the Board:
T. KGAGE J.P. NEL
Chairman Chief Executive Officer
Date: 25/04/2007 17:00:04 Produced by the JSE SENS Department.
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