| Fri 30 May 2008, 17:31 | | TCS - Total Client Services Limited - Reviewed condensed financial results for |
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TCS
TCS
TCS - Total Client Services Limited - Reviewed condensed financial results for
the year ended 29 February 2008
Total Client Services Limited
(Formerly Labat Traffic Solutions (Proprietary) Limited)
Incorporated in the Republic of South Africa
(Registration Number 1998/025018/06)
Share code: TCS
ISIN CODE: ZAE000116208
"TCS" or "the Group"
REVIEWED CONDENSED FINANCIAL RESULTS FOR THE YEAR ENDED 29 FEBRUARY 2008
Introduction
The directors of TCS are pleased to present the Groups results for the year
ended 29 February 2008. These are not the Groups maiden results as a listed
entity as the Group listed on the AltX on the 7th of April 2008, subsequent to
the financial year end. The maiden annual results as a listed entity will be
presented for the financial year ended 28 February 2009.
During the year under review, the company acquired the minority interest in its
subsidiary, Total Computer Services (Proprietary) Limited, giving it 100%
control thereof. The effects of this transaction are dealt with in the financial
statements and have been recorded in the prospectus as published.
During the pre-listing period when presenting the prospects of the company to
investors, the company presented what was termed "sustainable earnings". This
was arrived at as the profits after tax before the IFRS2 adjustments, the once
off management contracts cancellation costs, the STC on the Mvela deal and the
special dividend, and minority interests. This figure was presented as R23,409m
for the year ended 29 February 2008. The directors are pleased to report that
the actual "sustainable earnings" after the adjustments noted above are
R25,603m, exceeding the forecasts by 9,37%. The directors are proud to report
that the profit after tax of R1,497m exceeded the forecast loss of R744 000 as
detailed in the prospectus.
The 2007 year end figures have been restated to give effect to a prior period
error relating to revenue recognition and the related tax treatment by the
subsidiary company. Furthermore, as stated in the prospectus, the taxation
assessments for the holding company for the years 2005 and 2006 were revised by
the South African Revenue Services. The effect of the taxation review and re-
assessment by the South African Revenue Services has been to increase the
assessed loss of the company at the beginning of the financial year to R4,161m.
SEGMENTAL REPORTING
Technology
This is responsible, where contracted, for the image capture of traffic offences
and offenders. These images are then used by the contracted clients in the
processing of and production of the relevant fines. Revenues are generated and
earned based on actual offences paid to the clients by the offender.
Service Centre
The service centre is the "back office" service provider to the company`s
clients whereby images and other traffic offences are processed on behalf of the
contracted client and issued to the offenders. Once again revenues in this area
are recognised based on actual receipts from offenders by the company`s clients.
Reviewed Results for the year ended 29 February 2008
BALANCE SHEET Reviewed Audited
29 February 2008 28 February 2007
R`000 R`000
ASSETS
Non current assets 40 015 25 861
Current assets 38 853 31 508
78 868 57 369
TOTAL ASSETS
EQUITY AND LIABILITIES
Shareholders Funds 15 933 22 394
Non-current liabilities 34 616 4 126
Current liabilities 28 319 30 849
Total equity and liabilities 78 868 57 369
Actual Shares in issue at period end 383 569 383 722
(`000)
Net asset value per share (cents) 4.15 5.84
INCOME STATEMENT Reviewed Audited
29 February 28 February
2008 2007
R`000 R`000
Gross Revenue 112 453 114 695
Operating profit/(loss) 13 000 30 093
Profit/(loss) before taxation 11 480 28 561
Taxation 9 983 10 801
Profit/(loss) attributable to shareholders 1 497 17 760
Reconciliation headline earnings
Profit/(loss) for the period 1 497 17 760
Adjusted for
- Other income 0 0
- Profit on disposal of property, plant and 0 0
equipment
Headline earnings (loss) for period 1 497 17 760
Basic and diluted earnings per share (cents) 0.44 4.63
Weighted average number of shares (`000) 341 538 383 722
Headline earnings per share (cents) 0.44 4.63
CASH FLOW STATEMENTS Reviewed Audited
29 February 28 February
2008 2007
R`000 R`000
Cash flows from operating activities 5 245 7 141
Cash flows from investing activities (7 538) (8 596)
Cash flows from financing activities 567 75
Net movement in cash and cash equivalents (1 726) (1 380)
Cash and cash equivalents at beginning of year 4 792 6 172
Cash and cash equivalents at end of year 3 066 4 792
STATEMENT OF CHANGES Share Share BEE Retaine Minorit Total
IN EQUITY Capital Premium Reserve d y
R`000 R`000 R`000 Income interes R`000
R`000 t
R`000
Balance as at 1 0.1 17 286 4 093 21 379
March 2006
Profit for the year 10 728 7 555 18 283
Dividends paid (8 670) (8 330) (17
Prior year (268) 000)
adjustment (268)
Balance as at 1 0.1 19 076 3 318 22 394
March 2007 Restated
Work in Process 2 583 2 583
prior year
adjustment 3 318 (3 318) 0
Minority interest (0.021) 0
buy out 0.031 17 382 (9 923) 7 459
Share buyback 1 497 1 497
Share issue (18 (18
Profit for the year 000) 000)
Dividend paid
Balance as at 29 0.11 17 382 (9 923) 8 474 0 15 933
February 2008
CONDENSED SEGMENT REPORT FOR THE GROUP
Service
R`000 Technology Centre Total
2008
Revenue 98 862 13 591 112 453
Operating profit (loss) 38 389 ( 25 389) 13 000
Total Assets 64 202 14 666 78 868
Total Liabilities 52 733 10 203 62 936
2007
Revenue 99 848 14 847 114 695
Operating profit (loss) 53 570 (23 477) 30 093
Total Assets 48 312 9 059 57 371
Total Liabilities 27 073 7 902 34 975
BASIS OF PREPARATION OF THE REVIEWED RESULTS
Statement of compliance
The condensed consolidated provisional financial statements comprise a
consolidated balance sheet at 29 February 2008, a consolidated income statement,
consolidated statement of changes in equity and a summarised consolidated cash
flow statement for the year ended 29 February 2008.
The condensed financial statements have been prepared in accordance with the
recognition and measurement criteria of International Financial Reporting
Standards ("IFRS") and the presentation and disclosure requirements of IAS 34
(AC 127), Interim Financial Reporting, JSE Listings Requirements and South
African Companies Act.
Basis of Measurement
The condensed financial statements have been prepared on the historical cost
basis except for certain financial instruments measured at fair value.
The accounting policies are consistent with those used in the annual financial
statements for the year ended 28 February 2007.
Reviewed Results
The auditors, PricewaterhouseCoopers INC, have reviewed these results and their
unmodified review opinion is available for inspection at the company`s
registered office.
Prospects
Operationally the focus has been to place the Group in the position to meet the
demands created by the marketing and business development drive. The operational
infrastructure has been streamlined to meet the demands placed on the
organisation and continues to evolve around the required changes and strategic
implementations as may be required.
In keeping with our prospects as outlined, new contracts, as well as extensions
and expansions on some existing contracts have been awarded to the Group
subsequent to the listing on the AltX. Furthermore, initiatives are underway in
forming strategic alliances so as to meet the long term strategic goals of the
Group.
The organisations focus on driving from marketing and business development
perspective as outlined in the listing prospectus has already borne positive
results, including:
The Road Traffic Management Corporation -AARTO project now sees TCS as a
strategic supplier and has included TCS with the national department of
transport
Matlosana Municipality (Klerksdorp) - new contract awarded to TCS for the full
service offering
George Municipality - camera contract extended to include a back office service
centre.
Numerous contracts have been tendered for and a continual stream of invitations
to present our offerings are coming in.
Primarily and importantly, TCS branding and profile is reaching the market
place.
While the economic outlook in the country for the next year indicates a definite
slowing down of the economy, directly affecting consumer spending and
consumption patterns, the Group believes that it will achieve its earnings
targets for the 2009 financial year end as forecast in it`s prospectus.
Dividend Policy
Other than the special dividend paid to shareholders prior to the listing of the
Group, no further dividends are proposed or declared for the year under review.
The Groups policy is 6 times cover which will apply to the year ended February
2009.
For and on behalf of the Board
AS Mohamed Mark Reichenberg
Chief Executive Officer Financial Director
30 May 2008
Corporate Information
Registered office and postal address
23 Kroton Avenue, Weltevreden Park, Johannesburg, 1709. Private Bag X09-248,
Weltevreden Park, 1715
Directors
GN Sam* (Chairman), L Sipoyo*, AS Mohamed (Chief Executive Officer), M
Reichenberg (Financial Director), BN Birkholtz, JH Taljaard (*Non-Executive)
Company Secretary
Alison Britto
Transfer secretaries
Computershare Investor Services (Proprietary) Limited
Auditors
PricewaterhouseCoopers Inc, Chartered Accountants (SA)
Designated Adviser
Merchant Sponsors (Proprietary) Limited
Date: 30/05/2008 17:31:03 Produced by the JSE SENS Department.
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