| Tue 26 Feb 2008, 7:05 | | DGC - DigiCore - Group interim Results for the six month period ended 31 |
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DGC
DGC
DGC - DigiCore - Group interim Results for the six month period ended 31
December 2007
DigiCore Holdings Limited
Registration number 1998/012601/06
JSE code: DGC ISIN: ZAE000016945
("DigiCore" or "the Group")
Group interim Results for the six month period ended 31 December 2007
Operating Profit Up 61%
Revenue Up 63%
Earnings Per Share Up 46%
Commentary
Introduction
The DigiCore board is extremely proud to announce an excellent all round
performance from our subsidiaries, distributors, support divisions and branches
for the six months ended 31 December 2007. We have managed to grow our
turnover and basic earnings per share by 63% and 46% respectively, despite a
generally tougher trading environment.
What made this growth even more remarkable is the fact that we have had
compounded year-on-year growth, in excess of 30%, over the past six years.
Financial results
Our operating profit grew by 61% from R48.8 million (2006) to R78.6 million.
Earnings per share increased to 23.5 cents per share opposed to 16.1 cents per
share in the comparative period last year, representing growth of 46%.
Cash generated from operating activities increased to R50.0 million from R42.4
million (2006) for the period. Cash and cash equivalents decreased by R11.8
million over the six-month period mainly due to dividend and tax payments as
well as increased working capital requirements emanating from aggressive sales
growth.
Inventories as a percentage of cost-of-sales have decreased although the
rand value increased by R17 million from June 2007. Work-in-progress over
the holiday season for final production and shipment in January 2008 was one
of the main reasons for this increase.
Our debtors book increased by a further R5 million during the six-month period.
The average outstanding debtors days have, however, decreased by 31 days
despite the fact that payment on exported products entails a relatively lengthy
chain of events in our international subsidiaries.
We are continuously focusing our attention on methods of reducing the working
capital requirements.
Local operations
Our product mix for our South African operations has changed substantially
since 2006 with the growth of our C-track Secure Stolen Vehicle Recovery
systems, this while maintaining our leadership role in the fleet management
arena. We have been awarded substantially more business by Government and Blue
Chip companies, continuing to underpin the quality of our products and services.
We have made great strides with the South African Police Service installations
and software implementation and they are already reaping the benefits from
using the system.
C-track Secure as a stolen vehicle recovery system has made better than
expected inroads into this market during the six-month period. Strong monthly
growth has been experienced in this very competitive market with some well
established players.
Total manufactured units sales grew by just over 100% for the comparative
period.
International operations
International sales have performed well for the period. Exports have increased
by 153% and now account for 63% of total unit sales (50% in 2006).
Our subsidiaries in the UK and Europe achieved impressive growth, winning
tenders from Royal Mail and several other Blue Chip utility companies, while
Trakker Pakistan continues to live up to expectations.
Our distributors in the UAE and Nigeria have started performing well after an
initial slow start up period.
Thus overall a great performance from abroad.
The future
Prospects are looking good for the next 6 months of the financial year as we
are continuing to roll out some of the contracts won during 2007. Strategies
are in place to expand our local and international divisions. The demand for a
technologically advanced Stolen Vehicle Recovery system at a reasonable price
is growing and we believe greater inroads into this industry will be made in
months to come. All indications are there that our newer distributors and
partners abroad are now bedded down and healthy orders will flow through
for production in the future.
In conclusion the board is comfortable that we can sustain a reasonable level
of growth in the months to come.
For and on behalf of the board
NA Gasa NH Vlok
Chairman Chief executive officer
26 February 2008
Abridged group balance sheet
As at As at As at
31 Dec 31 Dec 30 June
2007 2006 2007
R`000 (Unaudited) (Unaudited) (Audited)
Assets
Non-current assets 163 582 91 056 154 166
Property, plant and equipment 46 177 24 837 38 857
Intangible assets: goodwill 108 874 56 649 107 364
Investments 2 903 2 559 2 818
Deferred tax 5 628 7 011 5 127
Current assets 286 110 213 891 276 096
Inventories 88 050 62 144 71 073
Trade and other receivables 150 607 86 971 145 780
Cash and cash equivalents 47 453 64 776 59 243
Total assets 449 692 304 947 430 262
Equity and liabilities
Capital and reserves 343 345 222 004 263 525
Equity attributable to ordinary
shareholders 331 404 208 947 257 361
Share capital and premium 52 322 11 751 13 368
Distributable reserves 7 553 1 714 2 533
Retained income 271 529 195 482 241 460
Minority interest 11 941 13 057 6 164
Non-current liabilities 22 272 14 750 19 676
Interest-bearing borrowings 22 272 14 750 19 676
Current liabilities 84 075 68 193 147 061
Current portion of long-term
borrowings 5 446 - 1 376
Provisions 8 769 9 531 14 213
Taxation 18 423 29 258 16 726
Trade and other payables 51 437 29 404 59 318
Vendor liabilities - - 55 428
Total liabilities 449 692 304 947 430 262
Net asset value per share (cents) 155,0 103,3 127,2
Abridged group income statement
6 months
ended
31 Dec %
2007 growth
R`000 (Unaudited)
Revenue 309 246 63
Cost of sales and operating expenses (230 641)
Net operating profit 78 605 61
Net investment (expense)/income (563)
Net income from equity accounted investments -
Profit before taxation 78 042 55
Income tax expense (24 457) 57
Net profit after tax 53 585 54
Attributable to:
Minority shareholders 5 777
Equity holders of the parent 47 808 50
Number of ordinary shares in issue (`000) 213 865
Weighted average number of ordinary shares in
issue (`000) 203 444
Fully diluted number of ordinary shares in issue (`000) 213 865
Basic earnings per share (cents) 23,5 46
Basic headline earnings per share (cents) 23,3 46
Fully diluted earnings per share (cents) 22,4 43
Interim dividend per share (cents) 6,0 20
Final dividend per share (cents)
Reconciliation between basic to
headline earnings:
Attributable earnings to equity holders of
the parent 47 808
Profit on disposal of fixed asset (423)
Headline earnings for the period 47 385
6 months Year
ended ended
31 Dec 30 June
2006 2007
R`000 (Unaudited) (Audited)
Revenue 189 986 440 667
Cost of sales and operating expenses (141 229) (306 088)
Net operating profit 48 757 134 579
Net investment income 1 242 1 442
Net income from equity accounted investments 439 766
Profit before taxation 50 438 136 787
Income tax expense (15 578) (40 986)
Net profit after tax 34 860 95 801
Attributable to:
Minority shareholders 3 073 7 671
Equity holders of the parent 31 787 88 130
Number of ordinary shares in issue (`000) 202 355 202 355
Weighted average number of ordinary
shares in issue (`000) 198 043 198 585
Fully diluted number of ordinary shares
in issue (`000) 202 355 208 865
Basic earnings per share (cents) 16,1 44,4
Basic headline earnings per share (cents) 15,9 44,1
Fully diluted earnings per share (cents) 15,7 42,2
Interim dividend per share (cents) 5,0 5,0
Final dividend per share (cents) 8,0
Reconciliation between basic to
headline earnings:
Attributable earnings to equity holders of
the parent 31 787 88 130
Profit on disposal of fixed asset (279) (650)
Headline earnings for the period 31 508 87 480
Abridged group cash flow statement
6 months 6 months Year
ended ended ended
31 Dec 31 Dec 30 June
2007 2006 2007
R`000 (Unaudited) (Unaudited) (Audited)
Cash flows from operating activities 8 937 14 415 28 706
Cash generated from operations 50 011 42 443 102 881
Net investment income (563) 1 242 1 442
Taxation paid (22 772) (17 828) (54 137)
Dividends paid (17 739) (11 881) (22 246)
Net equity profit from associate - 439 766
Cash flows from investing activities (12 453) (7 743) (29 987)
Cash flows from financing activities (8 274) (3 318) (898)
(Decrease)/increase in cash and
cash equivalents for the period (11 790) 3 354 (2 179)
Cash and cash equivalents at
beginning of the period 59 243 61 422 61 422
Cash and cash equivalents at end
of the period 47 453 64 776 59 243
Statement of changes in equity
6 months 6 months Year
ended ended ended
31 Dec 31 Dec 30 June
2007 2006 2007
R`000 (Unaudited) (Unaudited) (Audited)
Share capital and premium
Share capital and premium at
beginning of the period 13 368 11 630 11 630
Movement in treasury shares 219 121 1 738
Arising on shares issued for the
purchase of Digicore
Europe BV 38 735 - -
Share capital and premium at end
of the period 52 322 11 751 13 368
Distributable reserves
Foreign currency translation
reserve
Balance at beginning of period 1 822 1 150 1 150
Arising during current period 3 326 142 672
Balance at end of period 5 148 1 292 1 822
Equity-settled share-based
payment reserve
Balance at beginning of period 711 277 277
Arising during current period 1 694 145 434
Balance at end of period 2 405 422 711
Distributable reserves at end of
the period 7 553 1 714 2 533
Retained income
Retained income at beginning of
the period 241 460 175 576 175 576
Movement in attributable earnings
during the period 47 808 31 787 88 130
Dividends paid during the period (17 739) (11 881) (22 246)
Retained income at the end of the
period 271 529 195 482 241 460
Minority interest
Balance at beginning of period 6 164 9 845 9 845
Movement through business
combinations - - (11 352)
Share of recognised income and
expenses 5 777 3 212 7 671
Minority interest at end of the
period 11 941 13 057 6 164
Corporate Governance
The group endorses the Code of Corporate Practice and Conduct as set out in the
King Committee Report on Corporate Governance in South Africa (2002).
Post-balance sheet events
There have been no significant events subsequent to 31 December 2007 and up to
the date of this report, that would require adjustment.
Basis of preparation and accounting policies
The condensed consolidated interim financial statements for the six months
ended 31 December 2007 have been prepared in accordance with International
Accounting Standard 34: Interim Financial Reporting, and the requirements of
the South African Companies Act, 1973, as amended, and the JSE Limited`s
Listings Requirements.
These Interim Financial Statements have not been audited or reviewed.
The accounting policies applied are consistent with those used in the
preparation of the Annual Financial Statements for the year ended 30 June 2007.
Earnings per share
The difference between the total number of shares in issue and the weighted
number of shares in issue relates to treasury shares, which are held by the
share trust for share options given to employees that will convert in the
future and shares issued in part payment for the purchase of DigiCore Europe BV
during the current period.
Dividend announcement
The board has declared an interim dividend of 6 cents (2006: 5 cents) per share
which is a 20% increase on the comparative period.
Payment will be made on Tuesday,25 March 2008 to all shareholders recorded in
the register on Thursday, 20 March 2008.
The last day to trade to qualify for the dividend will be Thursday,
13 March 2008 and the shares will be traded ex-dividend from Friday,
14 March 2008, both days inclusive.
Share certificates may not be dematerialised or rematerialised between Friday,
14 March 2008 and Thursday, 20 March 2008, both days inclusive.
Registered office
20 Eddington Crescent, Highveld Park, Centurion
(PO Box 68270, Highveld Park, 0169)
Tel: +27 12 665 7300
Fax: +27 12 665 5376
Transfer secretaries
Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61051, Marshalltown, 2107)
Sponsor
PSG Capital (Pty) Limited
Directorate
NA Gasa* (Chairman), NH Vlok (Chief Executive Officer), SR Aberdein,
D du Rand, BC Esterhuyzen*, BS Khuzwayo*, SS Ntsaluba*, BJ Richards#,
MD Rousseau, FJ SchindehA1/4tte
* Non-executive # British
Company secretary
DA Nieuwoudt
Website
www.digicore.com
Date: 26/02/2008 07:05:13 Produced by the JSE SENS Department.
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