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IFW
IFW
IFW - InfoWave - Unaudited Group Results For The Six Months Ended 31 August 2007
INFOWAVE HOLDINGS LIMITED
Registration number 1998/017276/06
Share code: IFW
ISIN: ZAE000016440
"InfoWave" or "the company"
UNAUDITED GROUP RESULTS
for the six months ended 31 August 2007
ABRIDGED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
6 months 6 months Year
ended ended ended
31 August 31 August 28 February
2007 2006 2007
R`000 R`000 R`000
Revenue 27 384 25 958 49 300
Profit from operations (before
interest) 4 109 3 984 8 084
Net interest income 154 95 184
Preference dividends received 149 134 267
Revaluation of listed preference
shares (36) (436) (906)
Profit from associate 367 297 535
Profit before taxation 4 743 4 074 8 164
Taxation (1 771) (1 588) (2 378)
Normal tax (1 342) (1 223) (2 013)
Secondary taxation on companies (429) (365) (365)
Profit for the period 2 972 2 486 5 786
Attributable to minorities 95 155 151
Attributable to ordinary shareholders 3 067 2 641 5 937
Headline profit
Profit attributable to ordinary
shareholders 3 067 2 641 5 937
Profit on sale of property and
equipment (27)
Headline profit 3 067 2 641 5 910
Number of ordinary shares in issue
(`000) 86 501 86 906 86 217
Weighted average ordinary shares
in issue (`000) 86 407 86 546 86 396
Headline earnings per
ordinary share (cents) 3,55 3,05 6,84
Earnings per ordinary share (cents) 3,55 3,05 6,87
Fully diluted earnings per share
(cents) 3,53 3,02 6,85
Return on equity (%) 21,26 22,12 39,90
Return on assets (%) 15,70 13,51 31,90
ABRIDGED CONSOLIDATED BALANCE SHEET (UNAUDITED)
31 August 31 August 28 February
2007 2006 2007
R`000 R`000 R`000
Assets
Non-current assets
Property and equipment 1 644 936 1 092
Intangible assets 797 545 1 344
Goodwill 59 44 59
Investment in associated company 1 051 647 793
Deferred taxation asset 830 215 716
4 381 2 387 4 004
Current assets
Trade and other receivables 7 280 10 640 8 216
Listed preference shares* 3 624 4 131 3 660
Cash resources 4 245 2 395 3 872
15 149 17 166 15 748
Total assets 19 530 19 553 19 752
Equity and liabilities
Capital reserves
Issued capital 9 9 9
Share premium 358 671 262
Share-based payment reserve 597 624 478
Accumulated profit 14 515 12 066 15 194
Equity attributable to ordinary
shareholders 15 479 13 370 15 943
Minority interest 345 436 440
Total equity 15 824 13 806 16 383
Non-current liabilities
Deferred taxation liability 77
Current liabilities
Trade and other payables 3 706 5 670 3 369
Total equity and liabilities 19 530 19 553 19 752
Net asset value (R`000) 15 479 13 370 15 943
Net asset value per ordinary
share(cents) 17,89 15,38 18,49
Liquidity ratio (times) 4,09 3,03 4,67
Solvency ratio (times) 5,27 3,40 5,86
Market price per share
Close (cents) 69 55 66
High (cents) 89 72 80
Low (cents) 62 50 50
Capital expenditure for the period 602 268 752
Capital expenditure authorised 822 891 1 144
* These comprise an investment in Standard Bank prefererence shares and have a
coupon rate of 70% of prime.
ABRIDGED CONSOLIDATED CASH FLOW INFORMATION (UNAUDITED)
6 months 6 months Year
ended ended ended
31 August 31 August 28 February
2007 2006 2007
R`000 R`000 R`000
Cash flows from operating
activities
Profit from operations
(before interest and dividends) 4 109 3 984 8 084
Adjustment for:
Share-based payment expense 119 161 15
Profit on sale of equipment (27)
Depreciation and amortisation 596 494 848
Cash generated from operations,
before working capital changes 4 824 4 639 8 920
Working capital changes
Decrease/(increase) in receivables 936 (2 551) (212)
(Decrease)/increase in payables (235) 665 (1 628)
Cash generated from operations 5 525 2 753 7 080
Taxation paid (1 312) (1 507) (2 793)
Net interest income 154 95 184
Preference dividend received 149 134 267
Dividend paid to shareholders (3 746) (3 021) (3 189)
Net cash inflow/(outflow)
from operating activities 770 (1 546) 1 549
Cash flow from investing activities
Acquisition of equipment (602) (268) (752)
Investment in intangible assets (834)
Proceeds on disposal of equipment 38
Decrease/(increase) in investment
in associated company 109 (137) (52)
Acquisition of subsidiary (626) (640)
Proceeds on issue of subsidiary
shares 261 261
Net cash outflow from investing
activities (493) (770) (1 979)
Cash flow from financing activities
Repurchase of company`s shares (447)
Proceeds from share issues 96 210 248
Net cash inflow/(outflow)
from financing activities 96 210 (199)
Net increase/(decrease) in cash
resources 373 (2 106) (629)
Cash resources at beginning of
period 3 872 4 254 4 254
Cash resources on acquisition of
subsidiaries 247 247
Cash resources at end of period 4 245 2 395 3 872
GROUP STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
Share-based
Share Share Accumulated payment
capital premium profit reserve
R`000 R`000 R`000 R`000
Balance at 28 February 2006 9 461 12 446 463
Subsidiary acquired
Profit for the year 5 937
Shares issued during
the year 1 248
Shares repurchased during
the year (1) (447)
Recognition of
share-based payment 15
Dividend paid (3 189)
Balance at 28 February 2007 9 262 15 194 478
Profit for the year 3 067
Shares issued during
the period 96
Recognition of
share-based payment 119
Dividend paid (3 746)
Balance at 31 August 2007 9 358 14 515 597
Attributable
to equity
holders of Minority
InfoWave interest Total
R`000 R`000 R`000
Balance at 28 February 2006 13 379 13 379
Subsidiary acquired 591 591
Profit for the year 5 937 (151) 5 786
Shares issued during
the year 249 249
Shares repurchased during
the year (448) (448)
Recognition of
share-based payment 15 15
Dividend paid (3 189) (3 189)
Balance at 28 February 2007 15 943 440 16 383
Profit for the year 3 067 (95) 2 972
Shares issued during
the period 96 96
Recognition of
share-based payment 119 119
Dividend paid (3 746) (3 746)
Balance at 31 August 2007 15 479 345 15 824
DIRECTORS` COMMENT
These results have been prepared in accordance with International Financial
Reporting Standards (IFRS) and IAS 34 on Interim Financial Reporting.
There have been no changes in accounting policies.
The directors endorse the aims of the King Report on Corporate Governance in
conducting the affairs of the company with integrity and in accordance with
the highest standards of corporate practice. The company is committed to the
principles of openness, integrity and accountability in its dealings with all
its stakeholders.
REPORT TO STAKEHOLDERS
RESULTS OF OPERATIONS
Revenue grew 5,5% over the comparative period in the prior year to R27,4
million. A continued shortage of IT skills in the market has constrained growth
whilst we have significant demand for project work. A high level of focus is
being placed on resourcing solutions to ensure delivery to our clients. Profit
attributable to ordinary shareholders grew 16% to R3,1 million (R2,6 million)
as well as earnings per share which grew to 3,55 cents per share (3,05 cents)
on the comparative period in the prior year. This was affected by a devaluation
on listed preference shares in the comparative period. Subsequent to the end of
the reporting period these shares have been sold. ApplyIT contributed a loss of
R0,1 million to the group.
Associated company Adapt-IT, which focuses predominantly in the public sector,
performed well, growing profit by 24%. The group`s share of profit after tax
was R0,37 million.
The group has a strong balance sheet and has surplus cash retained for future
investment opportunities.
DIVIDEND
Ordinary dividend number 5 of 4,29 cents per share was paid to shareholders on
11 June 2007. This represented a dividend cover of 1,6 times. The company has
a policy to declare dividends at the end of the financial year and not at the
interim reporting date.
STRATEGY
In parallel with driving organic growth of the core business, it continues to
be the group`s strategy to diversify by acquisitive growth.
THE BOARD
C Jessop resigned as a director in August 2007. The board expresses its thanks
to her for her contribution to the group over the past three years. Her
responsibilities have been assumed by C von Pannier and B Lionnet. There have
been no other changes to the board in the period.
BEE
InfoWave (Pty) Limited obtained a broad-based BEE rating. It is a level 4
contributor which gives customers 100% procurement spend recognition for their
BEE scorecards. ApplyIT is a level 3 contributor as a Qualifying Small
Enterprise (QSE) which gives customers 110% procurement spend recognition for
their BEE scorecards. InfoWave remains committed to genuine broad-based
transformation across all aspects of the Department of Trade and Industry`s
Codes of Good Practice.
PROSPECTS
The prospects of the group for the remainder of the financial year are sound.
We will focus on the performance of ApplyIT to ensure its success,
sustainability and positive contribution to the group. We will pursue further
acquisitive growth and diversification opportunities in line with our
strategy.
APPRECIATION
We express our thanks to our customers for the success of our longstanding
relationships with them. We also recognise all employees of the group for
their dedication and hard work in serving our customers.
RP Collis T Dunsdon
Non-executive Chairman Chief Executive Officer
INFOWAVE HOLDINGS LIMITED
Registration number 1998/017276/06
Share code: IFW
ISIN: ZAE000016440
"InfoWave" or "the company"
DIRECTORS
RP Collis (Non-executive Chairman)
T Dunsdon (Chief Executive Officer)
MCB Lionnet, CL von Pannier, BR Carrilho
W Shuenyane (Non-executive Director)
P Aposporis*, Dr AB Ravno*
*Independent Non-executive Directors
REGISTERED OFFICE
Gleneagles Park, 10 Flanders Drive, Mount Edgecombe, 4300
PO Box 2225, MECC, Mount Edgecombe, 4301
TRANSFER SECRETARY
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
SPONSOR
Sasfin Capital
(a division of Sasfin Bank Limited)
Sasfin Place, North Block
13-15 Scott Street, Waverley, 2090
Ukuze uthole imphumela yesingisi uyacelwa ukuba ubheke kwi "website" ethi
www.infowave.co.za
Date: 02/10/2007 16:45:14 Produced by the JSE SENS Department.
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