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SVB
SVB
SVB - Silverbridge Holdings Limited - Abridged Audited Group Annual Financial
Statements For The Year Ended 29 February 2008
SILVERBRIDGE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration No. 1995/006315/06)
JSE Share code: "SVB" ISIN Code: ZAE000086229
("SilverBridge" or "the Group")
ABRIDGED AUDITED GROUP ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 29
FEBRUARY 2008
Financial Highlights
- 34% BEE shareholding transformation
- Revenue increased by 17.2%
- Operating profit increased by 20.9%
- Profit for the year increased by 19.7%
- Capital distribution`s increased by 20.3% *
* Representing capital distributions recommended after the year end.
ABRIDGED AUDITED GROUP INCOME STATEMENT
for the year ended 29 February 2008
2008 2007
R`000 R`000
Revenue 59 865 51 079
Other income 1 236 1 013
Salaries (28 490) (24 240)
Defined pension contributions (1 442) (1 169)
Directors remuneration (3 834) (2 833)
Depreciation and amortisation (1 357) (1 074)
Impairment losses - trade receivables (756) (264)
Professional fees paid for services (3 253) (3 417)
Other expenses (8 501) (7 955)
Operating profit 13 468 11 140
Finance income 846 582
Finance expense (139) (11)
Share of loss in associate (147) (53)
Profit before income tax expense 14 028 11 658
Income tax expense (4 221) (3 462)
Profit for the year 9 807 8 196
Attributable to:
Equity holders of the parent 9 807 8 177
Minority interest - 19
Earnings per share information
Basic earnings per ordinary share (cents) 30.18 30.36
Headline earnings per ordinary share (cents) 30.26 30.55
Basic earnings attributable to ordinary 9 807 8177
shareholders (R`000)
Reconciliation to Headline earnings:
Loss on disposal of assets (R`000) 26 -
Loss on sale of controlling interest in - 52
subsidiary (R`000)
Headline earnings (R`000) 9 833 8 229
Reconciliation of weighted average number of
shares in issue
Shares in issue (2007: deemed to be in issue 32 597 25 000
* (i)) at the beginning of the year (`000)
Effect of treasury shares acquired on 1 March (106) -
2007 (`000)
Effect of share allotment for private - 599
placement (27 November 2006) (`000)
Weighted average shares in issue post the - 1 337
acquisition date * (ii) (`000)
Weighted average number of shares in issue at 32 491 26 936
the end of the year (`000)
* In terms of IFRS 3: Business Combinations, Appendix B, the weighted average
number of ordinary shares to be utilised in the period when a reverse
acquisition occurs is determined as follows:
i. the number of shares outstanding from the beginning of the period to the
date of acquisition is deemed to be the number of ordinary shares issued by
the legal parent to the owners of the legal subsidiary;
ii. the number of ordinary shares outstanding from the acquisition date to the
end of that period shall be the actual number of ordinary shares of the
legal parent outstanding during that period; and
iii. all other equity changes, post the reverse aquisition date of 6 November
2006, are as per the legal parents` share changes.
ABRIDGED AUDITED GROUP BALANCE SHEET
at 29 February 2008
2008 2007
R`000 R`000
ASSETS
Non-current assets 16 382 14 394
Plant and equipment 2 040 1 703
Intangible assets 11 617 11 191
Investment in associate 91 71
Deferred tax assets 2 634 1 429
Current assets 34 099 31 770
Income tax receivable 3 164 250
Revenue recognised not yet invoiced 6 976 2 066
Trade and other receivables 11 328 13 056
Cash and cash equivalents 12 631 16 398
Total assets 50 481 46 164
EQUITY AND LIABILITIES
Equity 32 968 27 355
Share capital 326 326
Share premium 10 797 14 872
Treasury shares (197) (78)
Retained earnings 22 042 12 235
Total equity attributable to equity holders of 32 968 27 355
the parent
Minority interests - -
Current liabilities 17 513 18 809
Trade and other payables 12 794 8 502
Deferred revenue 3 282 5 514
Provisions 1 437 4 793
Total equity and liabilities 50 481 46 164
ABRIDGED AUDITED GROUP STATEMENT OF CHANGES IN EQUITY
for the year ended 29 February 2008
Issued Share Treasury Retained
capital premium shares earnings Total
R`000 R`000 R`000 R`000 R`000
Balance at 1 March 1 - - 4 058 4 059
2006
Profit for the year - - - 8 177 8 177
Total recognised - - - 8 177 8 177
income and expense
for the year
Deemed cost of 301 10 195 - - 10 496
reverse acquisition *
Allotment of 2 350 24 4 677 - - 4 701
000 shares
Reduction in minority - - - - -
interest on sale of
controlling interest
in subsidiary
Treasury shares - - (78) - (78)
acquired
Balance at 28 326 14 872 (78) 12 235 27 355
February 2007
Profit for the year - - - 9 807 9 807
Total recognised - - - 9 807 9 807
income and expense
for the year
Treasury shares - - (119) - (119)
acquired
Capital distribution: - (4 075) - - (4 075)
2 July 2007
Balance at 29 326 10 797 (197) 22 042 32 968
February 2008
Minority
interests Total
R`000 R`000
Balance at 1 March 2006 7 4 066
Profit for the year 19 8 196
Total recognised income and expense for the year 19 8 196
Deemed cost of reverse acquisition * - 10 496
Allotment of 2 350 000 shares - 4 701
Reduction in minority interest on sale of (26) (26)
controlling interest in subsidiary
Treasury shares acquired - (78)
Balance at 28 February 2007 - 27 355
Profit for the year - 9 807
Total recognised income and expense for the year - 9 807
Treasury shares acquired - (119)
Capital distribution: 2 July 2007 - (4 075)
Balance at 29 February 2008 - 32 968
* In terms of IFRS 3: Business Combinations, the share capital of the Group
represents:
i. the original share capital of the acquirer (SDT); plus
ii. the deemed cost of the reverse business combination. (This represents the
fair value of the shares SDT would be required to issue in itself, in
exchange for the 82,65% controlling interest acquired in SilverBridge, on 6
November 2006, so as to result in a similar control structure);
iii. thereafter, equity changes are as per the legal parents` share changes. The
share capital of the Group is presented in terms of the share structure of
the legal parent company (SilverBridge).
ABRIDGED AUDITED GROUP CASH FLOW STATEMENT
for the year ended 29 February 2008
2008 2007
R`000 R`000
Cash flows from operating activities
Cash receipts from clients 55 687 51 715
Cash paid to suppliers and employees (42 122) (36 098)
Cash generated from operations 13 565 15 617
Interest received 846 582
Interest paid (139) (11)
Dividends paid - (9 000)
Taxation paid (11 696) (2 576)
STC paid - (1 125)
Net cash inflow from operating activities 2 576 3 487
Cash flows from investing activities
Plant and equipment acquired to expand and (1 341) (1 316)
maintain operations
Proceeds from sale of equipment 17 9
Proceeds on disposal of controlling interest - (119)
in subsidiary
Acquisition of subsidiary, net of cash - 3 161
Capitalisation of development costs (822) (484)
Net cash (outflow)/ inflow from investing (2 146) 1 251
activities
Cash flows from financing activities
Treasury shares acquired (119) (78)
Shares issued - 4 701
Capital distribution from share premium (4 075) -
Net cash (outflow)/inflow from financing (4 194) 4 623
activities
Net (decrease)/increase in cash and cash (3 764) 9 361
equivalents
Cash and cash equivalents at the beginning of 16 398 7 048
the year
Effects of exchange rate translations on cash (3) (11)
and cash equivalents
Cash and cash equivalents at the end of the 12 631 16 398
year
ABRIDGED AUDITED GROUP SEGMENT REPORTS
for the year ended 29 February 2008
Business segments
Research
Implementation Support and
services services development
R`000 R`000 R`000
2008
Revenue from external clients 34 242 9 966 -
Inter-segment revenue - - -
34 242 9 966 -
Elliminations - - -
Segment revenue 34 242 9 966 -
Segment result 22 318 5 430 (8 171)
Unallocated expenses
Operating profit
Net finance income and share of
loss in associate
Income tax expense
Profit for the year
Assets and liabilities
Total assets unallocated *
Total liabilities unallocated *
2007
Revenue from external clients 30 100 9 358 -
Inter-segment revenue - - -
30 100 9 358 -
Elliminations - - -
Segment revenue 30 100 9 358 -
Segment result 21 659 3 629 (5 185)
Unallocated expenses
Operating profit
Net finance income and share of
loss in associate
Income tax expense
Profit for the year
Assets and liabilities
Total assets unallocated*
Total liabilities unallocated *
Software
licence fees
and other Total
R`000 R`000
2008
Revenue from external clients 15 657 59 865
Inter-segment revenue 840 840
16 497 60 705
Elliminations (840) (840)
Segment revenue 15 657 59 865
Segment result 16 893 36 470
Unallocated expenses (23 002)
Operating profit 13 468
Net finance income and share of loss in 560
associate
Income tax expense (4 221)
Profit for the year 9 807
Assets and liabilities
Total assets unallocated * 50 481
Total liabilities unallocated * 17 513
2007
Revenue from external clients 11 621 51 079
Inter-segment revenue 259 259
11 880 51 338
Elliminations (259) (259)
Segment revenue 11 621 51 079
Segment result 12 897 33 000
Unallocated expenses (21 860)
Operating profit 11 140
Net finance income and share of loss in 518
associate
Income tax expense (3 462)
Profit for the year 8 196
Assets and liabilities
Total assets unallocated* 46 164
Total liabilities unallocated * 18 809
* The assets and liabilities of the Group are organised and managed at a
corporate business support level. As the assets and liabilities contribute at a
corporate level, it is not practicable to determine a reasonable allocation of
the assets and liabilities to the business segments.
Geographical segments
Other African
South Africa Zimbabwe countries* Total
R`000 R`000 R`000 R`000
2008
Segment revenue 41 093 1 225 17 547 59 865
Assets and
liabilities
Segment assets 45 769 960 3 661 50 390
Investment in 91 - - 91
associate
Total assets 45 860 960 3 661 50 481
Segment 17 513 - - 17 513
liabilities
Total 17 513 - - 17 513
liabilities
2007
Segment revenue 28 123 2 331 20 625 51 079
Assets and
liabilities
Segment assets 39 138 1 165 5 790 46 093
Investment in 71 - - 71
associate
Total assets 39 209 1 165 5 790 46 164
Segment 18 809 - - 18 809
liabilities
Total 18 809 - - 18 809
liabilities
* Other African countries includes the following:
- Kenya, Malawi, Nigeria, Ghana, Namibia, Lesotho, Swaziland and Mauritius.
COMMENTARY
1. CORPORATE ACTIVITY
During the year under review the following major shareholder transactions
occurred:
i. 20% Shareholding acquisition transaction by Kagiso Investments Limited
On 7 May 2007 The Jaco Swanepoel Trust, i-Capital Growth Fund Trust
(i-Capital), Freda du Toit Family Trust and Rowan Nigel Williams Family
Trust sold part of their shareholding for a purchase price of R14 342 805
(Equating to 220 cents per share), to Kagiso Trust Limited (Kagiso), via
Kagiso`s special purpose vehicle (SPV), CShell 448 (Pty) Ltd. This
transaction allowed Kagiso to acquire a 20% interest in SilverBridge.
ii. 14% Shareholding acquisition transaction by Amabubesi Investments (Pty) Ltd
On 19 October 2007 Amabubesi Investments (Pty) Ltd acquired a 14% interest
in SilverBridge from i-Capital for a purchase price of R12 880 000
(equating to 280 cents per share). The transaction did not result in any
beneficial interest to the affiliated directors of i-Capital that are on
the Board.
These two transactions together allowed SilverBridge to become a 34% BEE
owned company.
2. ACCOUNTING POLICIES
2.1 Basis of presentation
The abridged group annual financial statements for the year ended 29
February 2008 incorporate extracts of the Group`s unqualified audited
financial statements, and are prepared in accordance with International
Financial Reporting Standards ("IFRS"), the Listing Requirements for the
JSE Limited and the Companies Act of South Africa. These abridged group
annual financial statements are prepared in accordance with IAS 34: Interim
Financial Reporting. The accounting policies applied are consistent with
those of the previous financial year.
For a better understanding of the Group`s financial position and results of
operations, these abridged financial statements must be read in conjunction
with the Group`s audited annual financial statements for the year ended 29
February 2008 which include all disclosures required by IFRS, and which are
expected to be distributed on or about 20 May 2008.
The Group results for the year ending 29 February 2008, and the related
comparatives, represent a continuation of the business of the SDT Group.
This is due to the reverse takeover by SDT of Synergy Holdings Limited
subsequently renamed SilverBridge Holdings Limited, on 6 November 2006.
The financial statements have been prepared on a historical cost basis
applying the accrual basis except for the cash flow information.
The financial statements are presented in rands, which is the Group`s
functional and presentation currency. All financial information presented
in rands has been rounded to the nearest thousand (R`000) except when
otherwise indicated.
3. AUDIT REPORT
KPMG Inc`s unmodified auditors` reports included in the annual financial
statements and on the summarised financial statements contained in this
abridged report are available for inspection at the Company`s registered
office.
4. POST BALANCE SHEET EVENTS
Subsequent to the year end the following non-adjusting events occurred:
4.1 Distributions to shareholders
i. SDT has declared a dividend to SilverBridge of R8 600 000 on 16 April 2008;
and
ii. the directors of SilverBridge have recommended a repayment of capital, from
the share premium, amounting to R4 903 500 (2007: R4 098 000), on 19 April
2007. The repayment of capital has been recommended for approval by the
shareholders at the Annual General Meeting ("AGM")to be held on 4 July
2008.
5. FINANCIAL RESULTS AND PERFORMANCE
The Group`s results for the year exceeded the profit forecast published in the
Circular dated 6 November 2006. In particular:
i. Profit for the year exceeded the forecast by 10.39 % and exceeded the prior
year results by 19.7%;
ii. Basic earnings per share and headline earnings per share exceeded the
forecast by 10.55% and 10.84% respectively. In comparison with the prior
year results, this has only marginally decreased by 0.6% and 0.95%
respectively. This is mainly attributable to the change in weighted average
number of shares increasing to 32.491 million shares (2007: 26.936 million
shares).
Overall, in comparison to performance in the previous year the Group has
shown an increase in revenue of 17.2% which is supported by annuity revenue
which comprises approximately 43% (2007: 41%) of total revenue.
The Group is cash generative and cash balances at the end of the year were
R12.631million (2007: 16.398 million). Our cash has reduced mainly due to
the capital distribution pay-out on 2 July 2007 of R4.098 million,
representing a repayment of 12.5 cents per share.
Development costs are only capitalised to the extent that there is a proven
business case, and that, in all probability, the asset will provide an
acceptable return. During the year, development costs of R822 000 (2007:
R484 000) were capitalised.
6. GROUP OUTLOOK
The structural adjustments in the local financial services industry
continue to create a sound market for the Group in South Africa. The market
for software in financial services is growing and we foresee a significant
increase in the demand for quality niche software applications. The
economic development in Africa and resultant evolution of financial
services presents an exciting opportunity for well positioned solution
providers, and the Group expects continued growth on the continent.
The Group is constantly seeking out reputable companies for acquisition and
incorporation into the Group, in order to expand and grow the SilverBridge
footprint.
7. SOCIAL RESPONSIBILITY
The Group is involved in a number of initiatives and is committed to
continue with the initiatives to uplift the community. Some of the
initiatives are POPUP, Future Forwards, as well as the Group`s own "SDT
Academy".The Group also provides bursaries to students, to stimulate
interest in the software industry and increase skills within the industry.
Development of the Group`s employees` skills are a focal point. The Group
provides training and development to the employees in order to contribute
to heightened skills within the IT industry.
8. CORPORATE GOVERNANCE
The Board is committed to the promotion of good corporate governance as set
out in the King II report on Corporate Governance in South Africa. The
Board recognises the need for adherence to the report and is continuing to
implement procedures in order to ensure that the Group has an effective
corporate governance policy.
9. NOTICE OF THE AGM
The AGM of SilverBridge will be held at 10:00 on 4 July 2008 at First
Floor, Castle View North, 495 Prieska Street, Erasmuskloof, Pretoria,0048.
10. DIRECTORATE
During the year under review the Board has undergone certain changes in its
composition:
i. Andile Sangqu has been appointed on 7 May 2007 as non-executive director
and Chairman to the Board;
ii. Justin van den Hoven has been appointed on 7 May 2007 as non-executive
director to the Board;
iii. Nthabiseng Mokone has been appointed on 23 April 2008 as non-executive
director to the Board.
On behalf of the Board
Jaco Swanepoel Andile Sangqu
Chief Executive Officer Chairman
Pretoria
6 May 2008
CORPORATE INFORMATION
Directors of SilverBridge:
Jaco Swanepoel, Freda du Toit, Jaco Maritz,
*David Smollan, *Rowan Williams, *Andile Sangqu, *Justin van den Hoven,
*Nthabiseng Mokone.
(All the directors are South African citizens).
* Non-executive
SilverBridge and SDT Registered offices
First Floor, Castle View North
495 Prieska Street, Erasmuskloof,
Pretoria, 0048
(PO Box 11799, Erasmuskloof, 0048)
Company Secretary: (SDT and SilverBridge)
Fusion Corporate Secretarial Services (Pty) Ltd,
represented by Melinda van den Berg
Auditors:
KPMG Incorporated
(Registration number: 4530188665)
SDT Financial Software Solutions (Pty) Ltd
(Incorporated in the Republic of South Africa)
(Registration No. 1995/005860/07)
("SDT")
Directors of SDT:
Jaco Swanepoel, Freda du Toit,
Jaco Maritz, *David Smollan,
*Johan Reyneke
(All the directors are South African citizens).
* Non-executive
Transfer secretaries
Computershare Investor Services (Pty) Ltd
(Registration number: 2004/003647/07)
70 Marshall Street, Johannesburg, 2001
(PO Box 61051 Marshalltown, 2107)
Designated advisers:
Sasfin Capital (a division of Sasfin Bank Limited)
(Registration number: 1951/002280/06)
Corporate advisers:
i-Capital fund managers (Pty) Ltd
(Registration number: 1998/018719/07)
Date: 06/05/2008 17:00:07 Produced by the JSE SENS Department.
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