| Mon 1 Oct 2007, 15:00 | | SDH - SecureData - Reviewed preliminary financial |
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SDH
SDH
SDH - SecureData - Reviewed preliminary financial results for the
year ended 31 July 2007
SecureData Holdings Limited
(Formerly known as ERP.com Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1998/010017/06)
Share code: SDH & ISIN: ZAE000096368
("SecureData" or "the company")
Reviewed Preliminary Financial Results for the year ended 31 July 2007
CONDENSED CONSOLIDATED INCOME STATEMENT
for the year ended 31 July 2007
31 July 31 July
Percentage 2007 2006
change R`000 R`000
Revenue (10) 148 221 164 959
Earnings before interest, taxation, 21 37 901 31 256
depreciation and amortisation
(EBITDA)
Depreciation and amortisation (1 020) (1 795)
Profit from operations 25 36 881 29 461
Interest received 845 1 769
Finance costs (28) (5)
Profit before taxation 21 37 698 31 225
Taxation 1 (11 400) (11 252)
Current (9 730) (10 942)
Deferred taxation (549) 1 447
STC (1 121) (1 757)
Profit from continuing operations 32 26 298 19 973
Loss on disposal of discontinued (20 135) -
operations
Profit for the year attributable to (69) 6 163 19 973
shareholders
Earnings per share (cents) 31 16,5 12,6
Headline earnings per share (cents) 29 16,2 12,6
Dividends per share (cents) (100) - 5,0
Net asset value per share (cents) (6) 30,9 33,0
Weighted average number of shares 159 227 159 124
on which earnings per share is
based (`000)
Number of ordinary shares in issue 159 565 159 381
(`000)
Reconciliation between earnings and
headline earnings
Profit for the year attributable to 6 163 19 973
shareholders
Loss on disposal of discontinued 20 135 -
operations
Profit on disposal of assets (507) (11)
Headline earnings 25 791 19 962
CONDENSED CONSOLIDATED BALANCE SHEET
as at 31 July 2007
31 July 31 July
2007 2006
R`000 R`000
ASSETS
Non-current assets 44 378 20 334
Property, plant and equipment 3 889 1 514
Goodwill 37 123 2 726
Deferred taxation 3 366 2 897
Disposal group held for sale - 13 197
Current assets 77 325 71 048
Inventories and contracts in 7 807 1 484
progress
Trade and other receivables 46 977 29 408
Cash and cash equivalents 22 541 40 156
Total assets 121 703 91 382
EQUITY AND LIABILITIES
Capital and reserves 49 367 51 554
Share capital and premium 160 159
Treasury share reserve (18 128) (18 128)
Share based payment equity 615 -
Retained income 66 720 69 523
Non-current liabilities
Disposal group held for sale - 4 364
Current liabilities 72 336 35 464
Accounts payable 35 358 30 407
Owing to vendors 32 000 -
Taxation 4 978 5 057
Total equity and liabilities 121 703 91 382
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 July 2007
31 July 31 July
2007 2006
R`000 R`000
Cash flows from operating 8 498 (10 400)
activities
Profit before taxation 37 698 31 225
Adjustments not affecting the flow 1 060 21
of funds
Operating income before working 38 758 31 246
capital changes
Increase in working capital (11 063) (14 214)
Cash generated from operations 27 695 17 032
Interest received 845 1 769
Finance costs (28) (5)
Taxation paid (11 048) (15 140)
Dividends paid (8 966) (14 056)
Cash flows from investing (26 117) (535)
activities
Cash flows from financing 1 (19 214)
activities
Proceeds from issue of shares 207 656
Share issue expenses (4) (5)
Own shares acquired by subsidiary (202) (19 865)
Decrease in cash and cash (17 618) (30 149)
equivalents
Cash and cash equivalents at 40 159 70 308
beginning of year
Cash and cash equivalents at end of 22 541 40 159
year
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 July 2007
31 July 31 July
2007 2006
R`000 R`000
Share capital 160 159
Balance at beginning of year 159 168
Issued during the year 1 4
Own shares acquired by subsidiary - (13)
Share premium - -
Balance at beginning of year - 1 077
Issued during the year 206 652
Share issue expenses written off (4) (5)
Own shares acquired by subsidiary (202) (1 724)
Treasury share reserve (18 128) (18 128)
Balance at beginning of year (18 128) -
Own shares acquired by subsidiary - (18 128)
Share based payment equity 615 -
Balance at beginning of year - -
Created during the year 615 -
Retained income 66 720 69 523
Balance at beginning of year 69 523 63 606
Profit for the year 6 163 19 973
Dividends paid (8 966) (14 056)
Total capital and reserves 49 367 51 554
SEGMENTAL ANALYSIS
Percentage 2007 2006
change R`000 R`000
Turnover
Information risk management 56 148 221 95 107
Data and content management (100) - 28 163
Enterprise applications (100) - 41 689
Total 148 221 164 959
Profit/(loss) before tax
Information risk management 3 37 698 36 743
Data and content management (100) - (3 125)
Enterprise applications (100) - (2 393)
Total 37 698 31 225
Net assets/(liabilities)
Information risk management (29) 49 367 69 158
Data and content management (100) - (1 532)
Enterprise applications (100) - (5 720)
Total 49 367 61 906
COMMENTS
The directors of SecureData Holdings are satisfied with the group`s performance
for the year ended 31 July 2007. Although the first half of the year was a
turbulent period during which we disposed of operations that were not deemed to
support our stated Information Risk Management (IRM) strategy, it is evident
from the results that the continuing operations were not affected by this
corporate activity. Indeed it is the board`s opinion that the strong revenue
growth achieved by the continuing operations is a direct result of this renewed
focus on the core business.
During the year the company acquired Value Added Distribution (VAD) (effective 1
November 2006), and expended significant efforts in identifying additional
potential acquisitions that support the IRM strategy. These efforts culminated
in the acquisition of SensePost (Pty) Ltd (SensePost) (effective 1 July 2007)
and New Generation Solutions (Pty) Ltd (effective 1 August 2007).
Notwithstanding the fact that organic growth prospects remain exciting, the
board continues to evaluate potential targeted acquisitions that are deemed to
support the company strategy. Further announcements in this regard will be made
in due course.
Brett Parker and Arusha Sewram were appointed group Chief Operating Officer and
Chief Financial Officer, respectively, during the year. In addition other senior
management appointments were made and the core management teams of the acquired
companies were retained on long term service contracts resulting in significant
depth and breadth of management expertise being made available within the group.
OPERATIONAL REVIEW
Although group revenue declined 10% to R148 million no revenue from the
discontinued operations is included in this figure. Revenue from continuing
operations, therefore, grew 56% from R108 million resulting in a 32% improvement
in after tax profit from continuing operations. The loss on disposal of the
discontinued operations, amounting to R20,1 million (12,6 cents per share) has
been excluded from the calculation of earnings per share (EPS) and headline
earnings per share (HEPS) for the period, while the combined capital profit on
disposals of R507 000 has been excluded from the calculation of HEPS.
Accordingly the group has achieved EPS of 16,5 cents and HEPS of 16,2 cents
reflecting growth of 31% and 29% respectively.
During the year the group spent cash of R10,1 million in payment of dividends
and STC and R4,0 million on the acquisition of VAD. Required investment in
inventories and a substantial increase in accounts receivable due to late
payment by specific business partners, resulted in cash and cash equivalents
remaining fairly static in comparison to the interim results at R22,5 million.
Subsequent to the financial year-end the group expended in cash an additional
R39,0 million on acquisitions and intends to evaluate further acquisitions. In
light of this expenditure and the intention to pursue additional acquisitions
the board deems it prudent not to pay a dividend this year. The board will
continue to review the group`s financial position and, when appropriate will
resume dividend payments.
PROSPECTS
With the disposal of non-core operations behind us, the group has a clearly
defined and well-articulated vision for the future. We continue to identify new
market segments within our strategic focus which may be satisfied by attracting
additional product agencies, providing additional services, or by making
targeted acquisitions. The group`s strategic focus on an attractive segment
within the information technology industry, our ability to identify and execute
targeted acquisitions and our proven ability in growing organically leads the
board to the conclusion that the group is very well positioned to exploit
opportunities within the sector and that prospects for the group remain exciting
in both the medium and long term.
INDEPENDENT REVIEW
KPMG Inc., the company`s independent auditor, has reviewed the financial
statements contained in this preliminary report and has expressed an unmodified
conclusion on the preliminary financial statements. The review report is
available for inspection at the company`s registered office.
BASIS OF PREPARATION
These preliminary condensed consolidated financial statements have been prepared
in accordance with the recognition and measurement requirements of International
Financial Reporting Standards and the presentation and disclosure requirements
of IAS 34. The accounting policies applied in the preparation of these condensed
financial statements conform with the requirements of IFRS and are consistent
with those applied in the prior year. Circular 8/2007 has been early adopted in
the calculation of headline earnings per share.
The acquisitions of VAD and SensePost have been accounted for on a preliminary
basis, at cost. The purchase price allocation (PPA) required by IFRS3 will be
conducted in due course.
DIRECTORATE
Mr B Parker was appointed to the board, as an executive director, with effect
from 29 March 2007.
Mr AJ Ritzlmayr resigned as an executive director of the Group with effect from
28 February 2007.
For and on behalf of the board
P Sneddon DTK Brazier
Chairman Chief Executive Officer
1 October 2007
Directors:
P Sneddon* (Chairman), DTK Brazier (Chief Executive Officer), TN Mali*, YT
Moerane*, B Parker
*Independent non-executive director
Company secretary:
A Sewram (email: arushas@securedata.co.za)
Registered office:
Medscheme Building South, 10 Muswell Road South, Bryanston, 2021. (PO Box 4678,
Rivonia, 2128)
Transfer secretaries:
Computershare Investor Services 2004 (Proprietary) Limited
Registration number 2004/003647/07
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Share code: SDH
ISIN: ZAE000096368
www.securedata.co.za
Date: 01/10/2007 15:00:03 Produced by the JSE SENS Department.
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