| Thu 31 May 2007, 16:12 | | ISA - ISA Holdings Limited - Abridged audited resu |
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ISA
ISA
ISA - ISA Holdings Limited - Abridged audited results and dividend declaration
ISA Holdings Limited
("ISA")
(Registration number: 1998/009608/06)
JSE share code: ISA
ISIN code: ZAE000067344
ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2007 AND DIVIDEND
DECLARATION
2007 2006
R`000s R`000s
GROUP INCOME STATEMENT
Revenue 43,934 37,935
Cost of goods sold (23,186) (21,450)
Gross profit 20,748 16,485
Other income 859 153
Selling and marketing costs (5,352) (4,834)
Administrative expenses (5,093) (4,864)
Operating profit 11,162 6,940
Finance income - net 2,320 472
Share of profit from associate - 37
Profit before taxation 13,482 7,449
Taxation (2,914) 30
Profit attributable to shareholders 10,568 7,479
GROUP BALANCE SHEET
ASSETS
Non-current assets 8,024 8,589
- Tangible assets 533 494
- Intangible assets 6,367 6,367
- Share trust 498 953
- Deferred tax 626 775
Current assets 46,644 20,519
- Cash and cash equivalents 37,908 11,899
- Inventories (trading stock) 49 46
- Trade and other receivables 8,687 8,574
Total assets 54,668 29,108
EQUITY
Capital and reserves 42,054 21,158
- Share capital and share premium 37,571 15,687
- Non-distributable reserve 3,021 3,021
- Retained earnings 1,462 2,450
LIABILITIES
Long term liabilities 2,679 0
- Loan 2,642 0
- Deferred tax 37 0
Current liabilities 9,935 7,950
- Trade and other payables 7,267 7,649
- Receiver of revenue 1,283 0
- Provisions 1,385 301
Total equity and liabilities 54,668 29,108
GROUP CASH FLOW STATEMENT
Cash flows from operating activities 10,187 6,452
Cash flows from investing activities 2,852 570
Cash flows from financing activities 12,970 (55)
Net increase in cash and cash equivalents 26,009 6,967
Cash and cash equivalents at beginning of year 11,899 4,932
Cash and cash equivalents at end of year 37,908 11,899
GROUP STATEMENT OF CHANGES IN EQUITY
Balance at beginning of the year 21,158 16,279
Net profit for the year 10,568 7,479
New shares issued during the year 21,884 0
Dividends paid during the year (11,556) (2,600)
Balance at the end of the year 42,054 21,158
RECONCILIATION OF EARNINGS AND HEADLINE EARNINGS
Earnings as per income statement 10,568 7,479
Impairment of goodwill 0 464
Capital profit on disposal of investment (355) 0
Headline earnings 10,213 7,943
ORDINARY SHARES
Earnings per share (cents) 6.2 5.8
Headline earnings per share (cents) 5.9 6.1
Weighted average number of shares in issue (`000s) 171,728 130,000
Net asset value per share (cents) 21.8 16.3
Net tangible asset value per share (cents) 18.5 11.4
Number of shares in issue at year end (`000s) 192,593 130,000
BASIS OF PREPARATION
The annual financial statements of the Group have been prepared in accordance
with International Financial Reporting Standards (IFRS) with the date of
transition to IFRS being 1 March 2005. The annual financial statements have been
prepared under the historical cost convention, as modified by the revaluation of
tangible and intangible assets to fair value and have been prepared on a going-
concern basis.
AUDITORS` OPINION
The Group`s auditors, Levenstein and Partners, have audited these results and a
copy of their unmodified audit opinion as well as their accompanying unmodified
audit report is available at the Company`s registered office.
DIVIDEND DECLARATION AND CAPITAL REPAYMENT
Notice is hereby given that the directors declare ordinary dividend number 4, of
1.1 cents per share, to be ratified at the Annual General Meeting, to be held on
29 June 2007.
Notice is hereby given that the directors propose a capital repayment out of
share premium of 3.9 cents per share, to be approved by shareholders at the
Annual General Meeting to be held on Friday the 29th of June 2007 at 10:00am.
The salient dates for the capital and dividend distributions ("distributions")
are as follows:
Distributions declaration date: Thursday, 31 May 2007
Distributions finalisation date: Friday, 29 June 2007
Last day to trade "cum" the distributions: Friday, 6 July 2007
Date trading commences "ex" the distributions: Monday, 9 July 2007
Record date: Friday, 13 July 2007
Date of payment: Monday, 16 July 2007
Shareholders may not dematerialise or rematerialise their shares between Monday
9 July 2007 and Friday 13 July 2007, both days inclusive.
In terms of the requirements of the Companies Act No. 61 of 1973, the directors
confirm that, after the cash capital and dividend distributions, ISA Holdings
Limited will be able to pay its debts as they become due in the ordinary course
of business, and that its consolidated assets, fairly valued, will exceed its
consolidated liabilities.
COMMENTS
The Group has delivered a strong trading performance driven by consistent sales
growth throughout the year. I am pleased that these results comprise of over 50%
annuity income with healthy margins, demonstrating the strength and quality of
the underlying business. I remain confident in our ability to grow shareholder
value and to continue to generate profits with matching increases in cash
balances.
As the digital world grows and becomes more and more connected and distributed,
users increasingly need to be aware of viruses, worms, and malicious hackers, as
well as missed software patches, neglected backup schedules, policy non-
compliance and other self-inflicted errors that compromise important corporate
information. Today business faces all of these challenges, as well as growing
threats from sophisticated criminals who use email phishing, spoofing and phoney
websites to steal money, personal identities and corporate secrets. It is no
longer enough to secure computers within the network - today the digital
interactions themselves need to be protected from attacks, disruptions and
misuse.
Without protection, these risks can rapidly foster doubt, uncertainty and a lack
of confidence in the information itself. It is for this reason that an
investment in data protection and IT security is vital to the sustainability of
modern business.
ISA develops, markets and supports a wide range of security solutions, including
software, hardware and a host of specialised services. Our broad range of
offerings is specifically designed with a unified architecture platform,
together with centralised management and distributed enforcement. Configured
with real-time security updates and embedded anomaly detection, our solutions
are able to effectively identify and mitigate these new world risks.
These results reflect meaningful growth in all key performance areas. Turnover
increased by 16% to R44 million and gross margins increased to 47% from 43%. The
net effect on the bottom line was further enhanced by stringent cost control
resulting in a modest increase in operating expenditure of 9%. Earnings
increased by 41% to R10.6 million, which translated into earnings per share of
6.2 cents. This was achieved after taking into account a maiden R1.3 million
current income tax expense, as well as the 48% dilution from the issue of
62,592,953 new shares to our BEE partner.
The issue of new shares during the period, together with robust operational cash
flows, resulted in our significant cash holding of R38 million at year end.
Further increases in net tangible asset value, by 62% to 18.5 cents per share,
was achieved after accounting for dividends paid during the period of 6 cents
per share.
ISA should be able to sustain its organic growth objectives with little impact
to its capital structures. In this light and in support of the directors`
opinion that surplus cash should be distributed to shareholders, the board of
directors declares an ordinary dividend of 1.1 cents per share. The board of
directors also recommends that a capital distribution of 3.9 cents per share, to
be approved by shareholders at the Annual General Meeting to be held on Friday
the 29th of June 2007 at 10:00am.
During the period under review, dividend number 2, of 4 cents per share and a
maiden interim dividend, dividend number 3, of 2 cents per share were declared
and paid. Secondary tax on companies of R1.4 million has been accounted for and
paid in respect of these dividends.
Management remains determined to build a trusted information security brand and
to create tangible value for all stakeholders. Vigilant cost controls,
innovative offerings and a persistent focus on high-profit service delivery
remain our priority. The essential part of our growth strategy is investment in
organic growth, where we can build and enhance our existing capabilities. We do
however continue to look for strategic activities to complement our existing
business and to eliminate inefficiencies by further improving our internal
systems. While a healthy business environment continues into the new financial
year, we are mindful of the national skills shortage within the ICT industry and
the effect on our earnings from the full tax rate.
I look forward to the future, confident that our niche IT security focus,
distinctive offering and motivated team will enable ISA to take advantage of
growth opportunities as they occur.
On behalf of the board, I would like to take this opportunity to thank our
employees who have been unfailing in their efforts to reach targets set. My
gratitude also extends to our shareholders and business partners for their
continued support and confidence.
For and on behalf of the board:
Clifford Katz
Chief Executive Officer
Randburg
31 May 2007
Designated advisor: Exchange Sponsors (Pty) Ltd
Date: 31/05/2007 16:12:00 Produced by the JSE SENS Department.
