| Wed 26 Sep 2007, 17:23 | | ALT - Allied Technologies Limited - Unaudited abri |
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ALT - Allied Technologies Limited - Unaudited abridged consolidated interim
financial results for the six months ended 31 August 2007
Allied Technologies Limited
(Incorporated in the Republic of South Africa),
(Registration number 1946/020415/06)
ISIN: ZAE000015251, Share code: ALT
Unaudited Abridged Consolidated Interim Financial Results for the six months
ended 31 August 2007
Highlights for the six months
Revenue up 20%
Operating profit up 6%
Headline earnings per share up 11%
Balance sheet remains strong
Acquisition opportunities being pursued
Income statements
Six months Six months Year
ended ended ended
31 August 31 August 28 February
% 2007 2006 2007
Figures in R million Change (Unaudited) (Unaudited) (Audited)
Revenue 20 3 994 3 321 6 780
Operating profit
before capital items 6 306 289 573
Investment income 46 43 79
Finance cost (9) (9) (6)
Capital items (Note 1) (47) (12)
Profit before taxation 296 323 634
Taxation (92) (96) (173)
STC (26) (26) (38)
Profit after taxation 178 201 423
Attributable to minority
shareholders 10 8 22
Attributable to ordinary
shareholders 168 193 401
Basic earnings per
share (cents) (13) 172 197 410
Diluted basic
earnings per share
(cents) (13) 167 193 398
Notes
Six months
ended
31 August
% 2007
Figures in R million Change (Unaudited)
Headline earnings per share (cents) 11 220
Diluted headline earnings per share (cents) 11 214
Basis of preparation
The unaudited interim financial results have been
prepared in accordance with International
Financial Reporting Standards (IFRS), as well as
in terms of IAS34. The accounting policies used
in the preparation of these interim results are
consistent with those used in the annual
financial statements for the year
ended 28 February 2007.
1. Capital items
Net loss on disposal of property,
plant and equipment
Impairment of goodwill (47)
Divisional closure cost
Discontinuing operations
(47)
2. Reconciliation between earnings and
headline earnings
Attributable earnings 168
Capital items gross 47
Tax effect of adjustments
Minority shareholders` interest
Headline earnings 215
3. Dividends
It is group policy for dividends to be
declared after the financial year.
Six months Year
ended ended
31 August 28 February
2006 2007
Figures in R million (Unaudited) (Audited)
Headline earnings per share (cents) 197 414
Diluted headline earnings per share (cents) 193 402
Basis of preparation
The unaudited interim financial results have been
prepared in accordance with International
Financial Reporting Standards (IFRS), as well as
in terms of IAS34. The accounting policies used
in the preparation of these interim results are
consistent with those used in the annual
financial statements for the year
ended 28 February 2007.
1. Capital items
Net loss on disposal of property,
plant and equipment (1)
Impairment of goodwill
Divisional closure cost (5)
Discontinuing operations (1)
(7)
2. Reconciliation between earnings and
headline earnings
Attributable earnings 193 401
Capital items gross 7
Tax effect of adjustments (2)
Minority shareholders` interest (1)
Headline earnings 193 405
3. Dividends
It is group policy for dividends to be
declared after the financial year.
Balance sheets
31 August 31 August 28 Fe bruary
2007 2006 2007
Figures in R million (Unaudited) (Unaudited) (Audited)
Assets
Non-current assets 702 653 685
Property, plant and equipment 288 265 260
Goodwill 287 332 335
Intangible assets 42 9 30
Investment and loan 13
Deferred taxation 72 47 60
Current assets 2 576 2 362 2 240
Inventories 429 370 400
Trade and other receivables 962 720 667
Net cash and cash equivalents 1 185 1 272 1 173
TOTAL ASSETS 3 278 3 015 2 925
Equity and liabilities
Total equity 1 741 1 761 1 883
Shareholders` equity 1 672 1 670 1 822
Minority shareholders` interest 69 91 61
Non-current liabilities 113 32 32
Long-term loans 110 30 30
Deferred taxation 3 2 2
Current liabilities 1 424 1 222 1 010
Trade and other payables 1 291 1 094 971
Warranty provisions 21 7 20
Taxation payable 112 121 19
TOTAL EQUITY AND LIABILITIES 3 278 3 015 2 925
Abridged cash flow statements
Six months Six months Year
ended ended ended
31 August 31 August 28 February
2007 2006 2007
Figures in R million (Unaudited) (Unaudited) (Audited)
Cash flows operating activities 98 (196) (211)
Cash generated by operations 341 340 672
Changes in working capital (4) (243) (327)
Net finance income 37 34 73
Taxation paid (38) (120) (324)
Cash available operating activities 336 11 94
Dividends paid
to shareholders (235) (205) (302)
to minority shareholders (3) (2) (3)
Cash flows investing activities (170) (28) (116)
Cash flows financing activities 84 (2) 2
Net increase/(decrease) in cash and
cash equivalents 12 (226) (325)
Cash and cash equivalents
at beginning of period 1 173 1 498 1 498
at end of period 1 185 1 272 1 173
Supplementary information
31 August 31 August 28 February
2007 2006 2007
Figures in R million (Unaudited) (Unaudited) (Audited)
Taxation
Prior year expense 9 9
Depreciation and amortisation 42 44 97
Impairment of goodwill 47 5
Capital expenditure 71 28 68
Capital commitments 9
Lease commitments 195 166 163
Payable within the next 12
months: 57 49 56
property 43 35 32
plant, equipment and vehicles 14 14 24
Payable thereafter: 138 117 107
property 132 115 101
plant, equipment and vehicles 6 2 6
Net foreign exchange
(losses)/gains (4) 10 4
Weighted average number of
shares (million) 98 98 98
Diluted average number of
shares (million) 100 100 101
Shares in issue at end of
period (million) 96 98 98
Ratios
EBITDA 394 333 667
Operating margin (%) 7,7 8,7 8,5
ROCE (%) 39,4* 36,6* 34,3
ROE (%) 20,0* 23,2* 22,7
ROA (%) 36,4* 42,6* 43,2
Current ratio 1,8 1,9 2,2
Acid test ratio 1,5 1,6 1,8
NAV (cps) 1 734 1 708 1 863
* Annualised
Abridged segmental analysis
Six months Six months
ended ended
31 August 31 August
2007 2006
Figures in R million (Unaudited) % (Unaudited)
Revenue:
Telecommunications division 2 911 73 2 419
Multi-media and
Electronics divisions 809 20 651
Information Technology
division 340 9 297
Inter-group sales (66) (2) (46)
3 994 100 3 321
Operating pro fit:*
Telecommunications division 229 75 229
Multi-media and
Electronics divisions 59 19 66
Information Technology
division 16 5 (5)
Corporate 2 1 (1)
306 100 289
Year
ended
28 February
2007
Figures in R million % (Audited) %
Revenue:
Telecommunications division 73 4 976 73
Multi-media and
Electronics divisions 20 1 241 18
Information Technology
division 9 653 10
Inter-group sales (2) (90) (1)
100 6 780 100
Operating pro fit:*
Telecommunications division 79 438 76
Multi-media and
Electronics divisions 23 114 20
Information Technology
division (2) 25 4
Corporate (4)
100 573 100
* Operating profit is stated before goodwill impaired and capital items
Statements of changes in equity
Share
capital and Treasury Other Retained
Figures in R million premium shares reserves earnings
Balance at 1 March 2006 62 (257) 1 1 875
Recognised income and expense
Share-based payments 3
Attributable earnings 193
Transactions with shareholders
Dividends (205)
Transaction with minorities (3)
Capital introduced
Issue of share capital 1
Balance at 31 August 2006
(unaudited) 63 (257) 1 1 863
Recognised income and expense
Share- based payments 4
Attributable earnings 208
Foreign currency translation
differences 5
Transactions with shareholders
Dividends (97)
Issue of share capital 1 1
Transaction with minorities 31
Balance at 28 February 2007
(audited) 64 (257) 6 2 009
Recognised income and expense
Share- based payments 4
Foreign currency translation
differences 1
Attributable earnings 168
Transactions with shareholders
Dividends (235)
Issue of share capital 4
Treasury shares (103)
Transaction with minorities 11
Balance at 31 August 2007
(unaudited) 68 (360) 6 1 958
Ordinary
shareholders` Minority Total
Figures in R million equity interest equity
Balance at 1 March 2006 1 681 89 1 770
Recognised income and expense
Share-based payments 3 3
Attributable earnings 193 8 201
Transactions with shareholders
Dividends (205) (2) (207)
Transaction with minorities (3) (4) (7)
Capital introduced
Issue of share capital 1
Balance at 31 August 2006
(unaudited) 1 670 91 1 761
Recognised income and expense
Share-based payments 4 4
Attributable earnings 208 14 222
Foreign currency translation
differences 5 5
Transactions with shareholders
Dividends (97) (1) (98)
Issue of share capital 1 1
Transaction with minorities 31 (43) (12)
Balance at 28 February 2007
(audited) 1 822 61 1 883
Recognised income and expense
Share- based payments 4 4
Foreign currency translation
differences 1 1
Attributable earnings 168 10 178
Transactions with shareholders
Dividends (235) (3) (238)
Issue of share capital 4 4
Treasury shares (103) (103)
Transaction with minorities 11 1 12
Balance at 31 August 2007
(unaudited) 1 672 69 1 741
Message to our shareholders
Altech has recorded another successful half -year for the six months ended 31
August 2007, with headline earnings per share up 11% to 215 cents. Revenue
increased by 20% to R4 billion and operating profit increased by 6% to R306
million. A strong balance sheet and net asset value of 1 734 cents per share
continue to support the group`s expansion strategy, with notable progress made
in several key areas during the review period.
Group highlights
Corporate finance
Heads of agreement have been signed for the Sameer ICT group of Kenya. In
terms thereof, Altech will acquire a 51% controlling interest in Kenya Data
Networks Limited (KDN), Swift Global (Kenya) Limited and Infocom Limited.
KDN is the pre- eminent data network operator in Kenya. Its network
infrastructure includes a fibre optic line from Mombasa to Nairobi, 300km of
fibre in the city o f Nairobi, a fibre link to the Uganda border and over 150
WiFi hotspots. It has an international gateway licence for Kenya and advanced
plans to extend its network to various additional African countries including
the DRC and Tanzania. It also plans to participate in a future African east
coast submarine cable link.
Swift Global is a leading internet service provider and provider of corporate
virtual private network solutions as well as VoIP (voice over internet
protocol) services, operating in Kenya and Tanzania. Infocom operates a
broadband network and is an internet service provider in Uganda, which provides
specialised IT services to corporate clients in that country.
Through this potential acquisition, the Altech group will become a leading data
network operator and internet service provider in east and central Africa. The
transaction is subject to various conditions precedent, including an
independent valuation process.
Heads of agreement have been signed for the proposed acquisition of a 50%
joint controlling interest in a new company which will hold 60% of Netstar
Advanced Systems Sdn Bhd (Netstar Malaysia), Altech Netstar`s franchisee in
Malaysia. Following an independent valuation process, the purchase
consideration of the transaction has been agreed with the vendors at
approximately R34 million. A due diligence investigation is currently under
way.
During the review period, Altech acquired, subject to Competition authorities
approval, a well established fleet management company, ComTech (Pty) Limited.
ComTech will become a wholly- owned subsidiary of Altech Netstar Fleet
Management Holdings (Pty) Limited, in which Altech Netstar`s empowerment
partner Nariku (Pty) Limited will hold 25%. The potential full value of the
deal is R90 million of which R50 million is payable upfront and the balance
over two years depending on agreed financial targets being achieved. This
acquisition effectively doubles Altech Netstar`s share of the local fleet
management market, extends its product range and further strengthens the base
of skills.
The acquisition, as a going concern, of the business of Altech Netstar`s
franchisee in North -West province (Netstar Rustenburg), involving a cash
outlay of R10,96 million. Netstar Rustenburg has a stolen vehicle recovery
subscriber base of approximately 12 000 units.
During July 2007, Altech repurchased 1 635 094 Altech ordinary shares,
equivalent to 1,54% of its current issued share capital, for an aggregate
outlay of R102,6 million.
Telecommunications
Altech Autopage Cellular produced satisfactory results for the six months under
review, increasing its total subscriber base to over 850 000. Higher average
revenue per user (ARPU) than the corresponding period in 2006 underscores
management`s focus on the quality of new business. Importantly, Altech
Autopage Cellular has experienced little or no long-term effect from the
introduction of mobile number portability and very low levels of churn,
reflecting its superior service levels and comprehensive product range. The
significantly increased contribution from its national 150-store franchise
network reflects the benefits of intensive training and appropriate resourcing
in recent months.
In a deregulated South African telecommunications market environment, Altech
Autopage Cellular is capitalising on its subscriber base to move into a broader
communications market, particularly wireless data services where demand is
increasing exponentially.
Altech Netstar recorded excellent growth in the first half of the year,
increasing the number of subscribers to its market leading stolen vehicle
recovery services to over 400 000 in a market characterised by declining new
car sales and increased competition. The ComTech acquisition is expected to
expand both the range of services and customer base in its fleet management
division, Altech Netstar Fleet Management Services. The 2006 finalisation of a
25% empowerment stake in this company by Nariku (Pty) Limited has proved
beneficial in securing new business, particularly tender- based contracts. A
further smaller acquisition was made to expand regional geographic coverage.
Management structures were strengthened to ensure continued technological
innovation in meeting and anticipating the changing needs of customers and the
market.
Heads of agreement were concluded during the period for a joint controlling
interest in the Malaysian operation which has over 35 000 vehicles on the
system. This will enhance Altech`s presence in a market with considerable
potential. Further international expansion through targeted markets, including
Africa, South America, the Middle East and Europe, is being actively pursued.
Altech Alcom Matomo, a leading radio and telemetry service provider,
experienced a good first half and will complete the R540- million digital
terrestrial trunked radio (Tetra) network for Gauteng`s South African Police
Services by October. Based on this track record, a number of similar systems
are under discussion with SAPS and other parties. During the review period, the
company completed system upgrades for Transnet`s rail freight subsidiary which
will provide data communications and location of locomotives as part of a
programme to improve freight handling services.
Altech Alcom Radio Distributors remains the dominant distributor of two -way
radio products for southern Africa through its network of authorised dealers
and sub -distributors as reflected by its selection as Motorola`s top
distributor in Europe, Middle East and Africa for 2006. The Motorola Canopy
(broadband) reseller product line has been added to its portfolio and is making
inroads into the marketplace. The good performance during the first half is
expected to underpin continued growth for the full year.
Altech Stream Rwanda was granted a licence to deliver broadband internet access
services in major Rwandan cities, using both WiFi and WiMax technology and
dedicated spectrum usage. The licence includes the rights for Altech Stream to
install its own satellite earth -station for direct connection to the worldwide
web. Services will include access to the internet, e- mail and value - added
offerings to capitalise on pent -up demand in the business and consumer
segments as well as the public sector. Rwanda is an important springboard in
Altech`s strategy to operate broadband networks in Africa. Detailed engineering
designs of the broadband infrastructure are under way. The Kigali network is
expected to be operational before the end of the year.
In the South African WiMax arena where Altech has secured broadband
partnerships with Samsung Electronics and CityNet Wireless trial sites have
been installed and testing is currently being conducted. Results from this
pilot network are expected by the end of the first quarter of the 2008
financial year.
Multi-media and electronics
Altech UEC Multi- media recorded excellent results during the review period,
reflecting strong demand for the advanced set -top box products and associated
software which it develops, manufactures and deploys. Global demand is being
met by significantly increased production fro m the Durban -based factory and
additional production facilities are being sub- contracted in Thailand and
India. Initial shipments for the Indian contract, secured in 2006, have
commenced. Against this growing demand Altech UEC has continued to invest
heavily in research and development as well as additional production capacity
to maintain its competitive edge in new generation systems (such as IPTV and
MPeg 4) and the longer- term digitisation of public broadcasting systems.
Altech Global Decoder Logistics, the support and logistics operating units in
Australia and South Africa, performed well during the review period.
Arrow Altech Distribution exceeded its targets off the 2006 high base, despite
margin pressure caused by fluctuations in the rand exchange rate. These results
underpin increased activity from customers across all markets from pre -paid
utility meters to domestic and automotive security systems, vehicle tracking
and fleet management products and electronic contract manufacturing services.
Information technology
Altech Isis Information Systems recorded a solid performance for the half year,
further entrenching its position as a supplier of end-to- end operational
support systems (OSS) solutions in Africa with significant new contracts being
secured. Altech Isis France recorded satisfactory results, benefiting from
access to MobiMaster clients in new regions and the acquisition of operations
in Martinique in the West Indies.
Altech Card Solutions delivered a strong performance during the review period
with continued growth in its plastic card and personalisation equipment
business units. Opportunities in Africa are emerging as electronic banking
gains momentum in targeted markets.
Altech NamITech is Africa`s leading provider of cellular SIM cards, pre -paid
vouchers and magnetic stripe bank cards. In Nigeria, Altech`s pre -paid
cellular voucher manufacturing facility in Lagos continued to increase output,
from 50 million to over 60 million vouchers per month, with customers that
include five major telecommunications operators. The aggressive re- engineering
exercise in the South African operations has continued and an improved
performance is expected in the near term. However, as a result of the slower
than expected turnaround, an amount of R47 million was impaired on goodwill
relating to the Altech NamITech South Africa operation.
Supported by the finalisation of further licence agreements during the period,
Altech`s electronic voucher distribution operations are well placed to continue
their aggressive production and geographical expansion.
Prospects
These interim results underscore the strategic focus and balance- sheet
strength driving Altech`s continued progress. Strategically, the pace of change
in the technology environment requires equal measures of prudence and agility.
Equally, a competitive global market requires a significant geographic
footprint. With its broadband initiatives under way and its global presence
increasing exponentially, Altech has demonstrated its willingness and capacity
to meet these challenges and continue delivering steady growth.
By order of the board
Dr Hilton Davies Craig Venter Dr John Carstens
Independent non-executive Chief Executive Officer Chief Financial
Chairman Officer
Directors
Dr HK Davies (Independent non -executive Chairman), CG Venter (Chief Executive
Officer), Dr EN Banda#, Dr JEW Carstens (Chief Financial Officer),
PMO Curle*, ML Leoka#, R Naidoo#, DC Radley#, Dr HA Serebro#, RE Venter#,
Dr WP Venter#, PL Wilmot#
* British # Non- executive
Secretaries
Altech Management Services (Pty) Limited
Ms R Wolmarans
Sponsor
Investec Bank Limited
Altech
Registration number: 1946/020415/06
ISIN: ZAE000015251
Share code: ALT
Proudly South African
Altron
A Member of the Altron Group
The interim financial results are also available on the internet at
www.altech.co.za and the JSE News Service (SENS)
Date: 26/09/2007 17:23:01 Produced by the JSE SENS Department.
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