| Tue 14 Aug 2007, 16:47 | | BEE - Beget - Audited annual results for the 12 mo |
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BEE
BEE
BEE - Beget - Audited annual results for the 12 months ended 30 April 2007
BEGET HOLDINGS LIMITED
Incorporated in the Republic of South Africa
Registration number: 2002/011635/06
Share code: BEE ISIN number: ZAE000044111
("Beget" or "the company")
AUDITED ANNUAL RESULTS FOR THE 12 MONTHS ENDED 30 APRIL 2007
BALANCE SHEET at 30 April 2007
Audited Audited
12 Months 16 Months
30-Apr-07 30-Apr-06
Assets R `000 R `000
Non-current assets 1,862 14,266
Property, plant and equipment 597 893
Goodwill 0 5,429
Loans to shareholders 74 74
Intangible assets 1,190 7,868
Current assets 2,000 3,561
Inventory 1,026 1,849
Trade and other receivables 972 1,663
Loans to managers & employees 0 48
Cash and cash equivalents 1 0
Total assets 3,862 17,827
Equity and liabilities
Capital and reserves -15,025 1,594
Issued capital 27,625 24,344
Distributable reserve -42,650 -22,749
Non-current liabilities 4,867 3,097
Shareholder loans 2,824 2,254
Finance lease obligation 235,224 0
Deferred income 1,807 843
Current liabilities 14,020 13,135
Trade and other payables 7,844 5,010
Bank overdraft 733 681
Deferred income 928 341
Finance lease obligation 52 0
Other financial liabilities 3,575 5,714
Provisions 873 582
Loans from shareholders 0 793
Taxation Current 12 12
Total equity and liabilities 3,862 17,827
INCOME STATEMENT
for the 12 months ended 30 April 2007
Audited Audited
12 Months 16 Months
30-Apr-07 30-Apr-06
R `000 R `000
Gross revenue 13,277 20,781
Cost of sales -5,880 -13,155
Gross profit 7,396 7,625
Other income 0 256
Operational expenses -13,699 -14,098
Impairment cost -11,352 0
Operational Loss -17,654 -6,217
Investment revenue 5 7
Finance cost -2,252 -1,488
Loss for the period -19,901 -7,698
Weighted average shares in issue (`000) 508,508 409,379
Earnings per share (cents) -3.91 -2.01
Headline earnings per share (cents) -1.68 -1.96
RECONCILIATION BETWEEN EARNINGS AND HEADLINE EARNINGS
2007 2006
Earnings -19,901 -7,698
Less Impairment adjustment 11,352 211
Headline earnings -8,549 -8,003
STATEMENT OF CHANGES IN EQUITY
for the 12 months ended 30 April 2007
Share Share Cumulative Total
capital premium loss
R R `000 R `000 R `000
Balance at 01 May 2005 724 13,599 -14,534 -934
Loss for the year -8,215 -7,698
Issue of shares 248 11,725 11,725
Cancellation of shares -8 -8
Share issue expenses -981 -981
Business combinations -516
Balance at 01 May 2006 964 24,343 -22,749 1,594
Loss for the year -19,901 -19,901
Share issue expenses -171 -171
Issue of share capital 150 3,451 3,452
Balance at 30 April 2007 1,114 27,624 -42,,650 -15,025
CASH FLOW STATEMENT
for the 12 months ended 30 April 2007
Audited Audited
12 Months 16 Months
30-APR-07 30-APR-06
R `000 R `000
Cash flows from operating activities -980 -3,076
Cash flows from investing activities -302 -12,590
Cash flows from financing activities 1,230 14,792
Decrease / increase in cash and cash -52 -873
equivalents
Cash and cash equivalents at beginning -681 192
of period
Cash and cash equivalents at end of the -733 -681
period
ACCOUNTING POLICIES
The financial statements for the 12 months ended 30 April 2007 ("the period")
have been prepared in accordance with IFRS (International Financial Reporting
Standards. The accounting policies applied in the preparation of the annual
financial statements are consistent with those applied in the interim financial
statements for the period ended 31 October 2006. These annual financial
statements have been audited by PKF (PTA). The auditors report is available for
inspection at the registered office of the company.
Going Concern
A subsidiary in the group, Beget Solutions (Pty) Ltd, as well as Beget Holdings
Limited has incurred substantial losses resulting in negative cash flows and the
inability to pay its creditors on due dates. The going concern status of this
subsidiary is subject to the successful implementation of a turnaround strategy,
securing new business and the ability to generate sufficient cash flows in the
ordinary course of business in order to meet its operating and other
commitments.
Reportable Irregularity
In accordance with our responsibilities in terms of Sections 44(2) and 44(3) of
the Auditing Profession Act, we report that a reportable irregularity arose out
of Beget Solutions (Pty) Ltd, a subsidiary company, trading whilst factually
insolvent. The financial losses of Beget Solutions (Pty) Ltd had a significant
impact on the group financial statements, which is now also trading factually
insolvent. None of the companies in the group are now unable to make value added
tax payments as required by the Value Added Tax Act, and pay as you earn,
unemployment insurance fund and skills development contributions as required by
the Income Tax Act, due to severe cash flow constraints.
GROUP PROFILE
Beget is an IT and telecoms group specializing in the development of
applications on the GPRS technology platform. This enables the transmission of
data using the cell phone network at a fraction of the cost of fixed and radio
telephony.
COMMENTARY ON RESULTS
The group consolidated its business operations during the past year and re-built
its systems and procedures. This operation had a drastic effect on turnover,
but with cost reductions the trading loss were controlled for the 12 months
ending 30 April 2007.
Turnover dropped by 38% to R13,3 million (2006: R20,7) but with stringent cost
control the trading loss was restricted to increase by 7% to R8.5 million (2006:
R8,0) for the period.
The acquisition of the Intellectual Property (IP) from Excellular has begun to
show substantial income returns after the balance sheet date. In terms of
accounting requirements the IP must be evaluated on a yearly basis. The auditors
recommended to the Board that the impairment could be accounted for in full in
this current year. The amount impaired totaled R11,352,898 and increased the
loss for the period to R19,901,214
The drop in turnover can mainly be attributed to Beget`s inability to market its
GPRS communication devices to the banking sector.
OPERATIONAL REVIEW
The group now has three divisions:
Web based Biometric with GPRS including:
Access control
Time & Attendance
Payroll
Web based SMS`s
Bulk SMS`s
MMS
Web based LBS (Location Based Services)
SMSOS
Data base management with LBS
Our main focus has been on the sales division. Our retail sales division
consists of a well trained, in-house sales force and the results are visible in
an increase in Biometric retail sales. In the coming year we will be
concentrating on enlarging our sales exposure by introducing Business Partners.
We are proud to announce that we have concluded our BEE transaction and a
circular with all the details will be posted within the next few weeks for
shareholders approval.
The group culture is one of commitment to achieving improved performance, and
management and staff are motivated and focused on delivery and profitability.
PROSPECTS
With the foundation of the business now reformed and a range of products that
are stable and exceptionally well tested, Beget is set for solid growth.
The board is confident of an operating profit in 2008.
With the BEE transaction awaiting shareholders approval, Beget is able to tender
on large projects
Royalty income is being received
Retail sales process is in place and all marketing tools activated
The directors are aware of the auditors` comment regarding the non-payment of
certain items to SARS. The company is presently in discussions with SARS and
will rectify the position shortly.
POST BALANCE SHEET EVENTS
There are no post balance sheet events to report.
CHANGES TO THE BOARD OF DIRECTORS
S Hirschowitz resigned 31 January 2007
D Harrington resigned 26 April 2007
T Mogashoa appointed as acting chairman 1 June 2007
DECLARATION OF DIVIDEND
In line with the group policy no dividend has been declared for the period.
On behalf of the Board
14 August 2007
AH Potgieter - CEO
Directors: T. Mogashoa*(Chairman); AH Potgieter (CEO); CJ van Coller*, JS
Coetzee* *non-executive
Registered Office: 85 Durham Street, Clubview, CENTURION (PO Box 13983,
Clubview, 0014)
Transfer Secretaries: Link Marketing Services South Africa (Pty) Ltd, 11
Diagonal Street, Johannesburg, 2001 (PO Box 4844, Johannesburg, 2000)
Company Secretary: Secricover Network CC, 685B Verdi Street, Erasmuskloof, 0048
(PO Box 11699, Erasmuskloof, 0048)
Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
Date: 14/08/2007 16:47:02 Produced by the JSE SENS Department.
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