| Mon 1 Oct 2007, 16:07 | | ISA - ISA Holdings - Unaudited results for the six |
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ISA
ISA
ISA - ISA Holdings - Unaudited results for the six months ended 31 August 2007
ISA Holdings Limited
(Registration number: 1998/009608/06)
JSE share code: ISA
ISIN code: ZAE000067344
("ISA")
UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2007
31-Aug-07 31-Aug-06 28-Feb-07
6 months 6 months Year
ended ended ended
Unaudited Unaudited Audited
R`000s R`000s R`000s
GROUP INCOME STATEMENT
Revenue 22,673 21,874 43,934
Cost of goods sold (12,408) (11,962) (23,186)
Gross profit 10,265 9,912 20,748
Other income 125 367 859
Operating expenses (4,645) (4,409) (10,445)
Operating profit 5,745 5,870 11,162
Finance income - net 1,400 374 2,320
Profit before tax 7,145 6,244 13,482
Taxation (2,503) (963) (2,914)
- Income tax (2,055) 0 (1,283)
- Deferred tax (183) 0 (186)
- Secondary tax on companies (265) (963) (1,445)
Profit attributable to
shareholders 4,642 5,281 10,568
GROUP BALANCE SHEET
ASSETS
Non-current assets 7,585 8,641 8,024
- Tangible assets 528 546 533
- Intangible assets 6,367 6,367 6,367
- Share trust 247 953 498
- Deferred tax asset 443 775 626
Current assets 42,592 41,494 46,644
- Cash and cash equivalents 35,403 34,245 37,908
- Inventories 46 46 49
- Trade and other receivables 7,143 7,203 8,687
Total assets 50,177 50,135 54,668
EQUITY
Equity capital and reserves 37,066 40,619 42,054
- Share capital and share premium 30,060 37,571 37,571
- Non-distributable reserve 3,021 3,021 3,021
- Retained earnings 3,985 27 1,462
LIABILITIES
Long term liabilities 2,805 0 2,679
- Loan 2,768 0 2,642
- Deferred tax 37 0 37
Current liabilities 10,306 9,516 9,935
- Trade and other payables 7,783 9,152 7,267
- Receiver of Revenue 2,139 0 1,283
- Provisions 384 364 1,385
Total equity and liabilities 50,177 50,135 54,668
GROUP CASH FLOW STATEMENT
Cash flows from operating
activities 5,253 7,934 10,187
Cash flows from investing activities 1,747 232 2,852
Cash flows from financing activities(9,505) 14,180 12,970
Net increase in cash & cash
equivalents (2,505) 22,346 26,009
Cash and cash equivalents at
beginning of the period 37,908 11,899 11,899
Cash and cash equivalents at end
of the period 35,403 34,245 37,908
GROUP STATEMENT OF CHANGES IN EQUITY
Share Capital and reserves
Balance at beginning of the period 42,054 21,158 21,158
Shares issued during the period 0 21,884 21,884
Attributable profit for the period 4,642 5,281 10,568
Repayment of share premium during
the period (7,511) 0 0
Dividends paid during the period (2,119) (7,704) (11,556)
Total equity capital and reserves 37,066 40,619 42,054
RECONCILIATION OF HEADLINE EARNINGS
Earnings as per income statement 4,642 5,281 10,568
Capital profit on disposal of
investment (125) 0 (355)
Headline earnings 4,517 5,281 10,213
ORDINARY SHARES
Earnings per share (cents) 2.4 2.7 6.2
Headline earnings per share (cents) 2.3 2.7 5.9
Number of shares in issue at end of
period (`000s) 192,593 192,593 192,593
Net asset value per share at end
of period(cents) 19.2 21.1 21.8
Net tangible asset value per share
at end of period(cents) 15.9 17.8 18.5
OPERATIONAL REVIEW
As anticipated, our results have been impacted by the full tax rate being levied
against earnings for the first time. Despite this effect on profits, the overall
performance of the business has been satisfactory.
ISA`s ability to apply rigorous financial management principles continues to
generate positive cash flows and ensure that profits are matched with increases
in cash resources.
The distributions declared in the previous financial year were paid during the
current period, resulting in an outflow of cash from financing activities.
Modest revenue growth was achieved despite managements` distraction caused by
the challenge of addressing the scarcity of skills within our sector. Higher
staff turnover and remuneration levels exceeded budget and it is anticipated
that these pressures will continue to be a reality, for as long as the national
IT skills shortage persists.
The quality of revenue was further enhanced by a healthy increase in annuity
based income, which increased from 50% to 60%, during the period.
DIVIDEND
The board remains committed to distributing excess cash to shareholders, however
in light of recent changes to tax legislation, no dividend has been declared for
the current period.
BEE
Management is committed to transformation and continues to improve on all
pillars of the balanced score card. The board currently comprises of 62.5% non-
executive, with 50% being black directors. We are proud that our staff
compliment now comprises over 30% black employees.
ACCOUNTING POLICIES
These results have been prepared on a going concern basis, using accounting
principles and policies that comply with International Financial Reporting
Standards (IFRS), and are consistent with the previous period.
PROSPECTS
We remain determined to build a trusted information security brand throughout
the Sub-Sahara African region and maintain our focus on creating wealth for
shareholders.
Our strong balance sheet, together with our ability to generate cash flows,
continues to build a solid foundation to leverage future opportunities.
The fundamental market drivers, including legislative compliance, corporate
governance and an increase in the reliance on digital information, supports
growth in the IT security sector, and consequently for ISA. However, macro-
economic uncertainty, both domestically and globally, necessitates a cautiously
optimistic strategy for growth.
For and on behalf of the board.
Clifford Katz
Chief Executive Officer
1 October 2007
Designated advisor: Exchange Sponsors (Pty) Ltd
Date: 01/10/2007 16:07:19 Produced by the JSE SENS Department.
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