| Fri 19 Sep 2008, 16:05 | | IFC - IFCA Tech - Unaudited Results For The 6 Months Ended 30 June 2008 And |
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IFC
IFC
IFC - IFCA Tech - Unaudited Results For The 6 Months Ended 30 June 2008 And
Renewal Of Cautionary Announcement
IFCA TECHNOLOGIES LIMITED
Incorporated in the Republic of South Africa)
(Registration number 2006/030759/06)
Share code: IFC & ISIN: ZAE000088555
("IFCA Tech" or "the company")
UNAUDITED RESULTS FOR THE 6 MONTHS ENDED 30 JUNE 2008 AND RENEWAL OF
CAUTIONARY ANNOUNCEMENT
The unaudited results set out below represent the second interim results of
IFCA Tech group.
Balance Sheets
Figures in Rand 30 June 2008 30 June 2007
R R
ASSETS
Non-Current Assets 40 822 601 43 111 940
Property, plant and equipment 5 593 247 5 748 962
Intangible assets 34 286 630 37 362 978
Deferred Tax 942 724 --
Current Assets 3 091 191 8 578 447
Inventory -- 153 550
Trade and other receivables 2 605 804 5 928 417
Taxation 90 237 --
Cash and cash equivalents 395 150 2 496 480
Non-Current asset held for sale -- --
Total Assets 43 913 792 51 690 387
EQUITY AND LIABILITIES
Equity and reserves 37 555 556 45 199 942
Share capital 42 585 965 42 585 965
(Accumulated deficit)/Retained income (5 030 409) 2 613 977
Minority interest -- (74 760)
Non-Current Liabilities 1 823 503 3 048 602
Other financial liabilities 1 823 503 2 479 377
Deferred tax -- 569 225
Current Liabilities 4 534 733 3 516 603
Other financial liabilities -- --
Current tax payable -- 183 034
Trade and other payables 4 060 656 2 132 356
Deferred income 474 077 1 201 213
Total Equity and Liabilities 43 913 792 51 690 387
Net asset value per share (cents per 37.56 45.20
share)
Net tangible asset value per share 3.26 7.84
(cents per share)
Number of shares in issue at period end 100 000 000 100 000 000
Income Statements
Figures in Rand 6 months ended 6 months ended
30 June 2008 30 June 2007
R R
Revenue 5 130 028 5 485 845
Cost of sales (2 062 352) (3 215 936)
Gross profit 3 067 676 2 269 909
Other income -- 409 378
Operating expenses (5 807 271) (4 201 118)
Operating loss before impairments (2 739 595) (1 521 831)
Impairment of deferred development (3 879 797) --
expenditure
Operating loss (6 619 392) (1 521 831)
Investment revenue 33 382 108 315
Foreign exchange losses (432 092) --
Finance costs (131 722) (42 660)
Loss before taxation (7 149 824) (1 456 176)
Taxation -- 87 452
Loss for the period (7 149 824) (1 368 724)
Attributable to minorities -- (74 760)
Attributable to ordinary equity holders (7 149 824) (1 293 964)
Adjustments for headline earnings:
- Profit on disposal of asset -- (409 378)
- Impairment of deferred development 3 879 797 --
expenditure
Headline (loss)/earnings for the period (3 270 027) (1 703 342)
Loss per share (cents per share) -7.31 -1.29
Headline loss per share (cents per -3.27 -1.70
share)
Weighted average number of shares in 100 000 000 90 751 634
issue
Statement of Changes in Equity
Figures in Rand Share Share Retained Total
capital premium Income equity
R R R R
Balance at 31 100 000 42 725 099 3668 807 44 705 380
December 2006
Errors effecting (239 134) (253 884) (493 018)
equity
Restated Balance at 1 100 000 42,485 965 3 414 923 46 000 888
January 2007
Loss for the 12 month -- -- (1 295 508) (1 295 508)
period
Balance at 31 100 000 42 485 965 2 119,415 44 705 380
December 2007
Loss for the period -- -- (7 149 824) (7 149 824)
Balance at 30 June 100 000 42 485 965 (5 030 409) 37 555 556
2007
Abridged Cash Flow Statements
Figures in Rand 30 June 2008 30 June 2007
R R
Cash flows utilised in from operating (918 457) (1 030 885)
activities
Cash flows utilised in investing activities -- (3 064 530)
Cash flows from financing activities -- 1 886 255
Total cash movement for the period (918 457) (2 209 160)
Cash at the beginning of the period 1 313 607 4 705 639
Total cash at end of the period 395 150 2 496 479
COMMENTARY
The board of directors presents the company`s results for the 6 month period
ended 30 June 2008, which have been prepared in accordance with IAS 34 -
Interim Financial Reporting on the basis of consistent accounting policies
that comply with International Financial Reporting Standards ("IFRS").
INDUSTRY AND BUSINESS OVERVIEW
IFCA Tech is an enterprise-wide integrated business solutions provider
providing industry specific software solutions for four business segments,
namely:
- Property Development and Management (known as Property+);
- Project Management, Engineering and Construction (known as Contract+);
- Hospitality (known as Resorts+, D`Hotel and D`Club); and
Finance & Leasing (Loans+).
IFCA Tech`s solutions encompass the functionalities and features of products
that have been nurtured and matured for almost 21 years by the IFCA group
worldwide, from meeting the business needs of more than 1 200 customers and
16 000 registered users spread across four continents. IFCA Tech`s customers
include Transnet Housing, The Country Club Johannesburg, Maccauvlei Learning
Academy, Kopanong Hotel and Conference Centre, Eagle International Group
Holding (Eagle Canyon), Atlantic Beach Golf Club in Cape Town, The Botswana
Housing Corporation, Eduloan (Namibia) and the Swaziland National Housing
Corporation.
The IFCA group worldwide has recently launched its new .Net products
successfully in Malaysia and Singapore. IFCA Tech will be launching .Net in
South Africa, together with Microsoft, on 31 October 2008 at the Microsoft
auditorium in Sunninghill, Johannesburg,
FINANCIAL OVERVIEW
The results for the 6 months ended 30 June 2008 reflects a decline in
earnings compared to last year primarily due to the following events:
The company has recognised a debtors book adjustment of R869,960 in May 2008
due to uncollectible book debts. The debts relate to prior year trading.
An impairment of R3,879,797 has been made to deferred development costs
capitalised over the previous 3 years of trading. The directors have deemed
the impairment necessary to be consistent with accounting policies adopted by
the controlling shareholder.
The company`s major client namely, Transnet Housing, sold their loan book to
First National Bank and therefore cancelled the Loans+ contract in March
2008. Transnet has continued to utilise the IFCA property and resort
products. The monetary value of the turnover loss of the contract amounted to
R1.3 million for the period under review compared to the prior period.
Excluding the above, the company has actually shown an improvement in gross
profit and held operating expenses in line with inflation.
The weak trading performance has had a negative impact on cash reserves and
the company has decided to commence with a downsizing exercise. The staff
complement has reduced from 26 to 13. This will lead to a lower fixed
operating cost structure in due course.
Strategy going forward
Mr Jack Yong, one of the founders of the controlling shareholder, IFCA
Malaysia and a director of IFCA Tech,, has taken over as acting CEO of the
company and IFCA Malaysia has seconded Mr BH Loh to South Africa to take over
the as the general manger. Mr Loh has 13 years experience within the IFCA
group and has had extensive experience in managing profitable IFCA branches
in Malaysia. The intimate knowledge of the products will assist the company
in positioning IFCA as a significant player within the African continent.
The following prospects have been identified to return the company to
profitability:
IFCA Tech is in negotiations with a BEE partner to sell a significant stake
in the company.
The new .Net software, designed in Malaysia will be available to clients in
Africa. The new software, which has recently been successfully launched and
has had a major impact in the Asian market, is set to compete with all the
major ERP business solutions software products in South Africa.
The controlling shareholders of IFCA Malaysia are committed to the future
success of the South African operation and will continue their support as an
active shareholder.
Following the launch of .Net in South Africa, an aggressive sales plan will
be implemented into Africa.
One of the properties has been sold in order in inject cash in the short
term.
DIVIDENDS
The directors have decided not to declare an interim dividend.
SEGMENTAL REPORTING
The company has presented segmental information for the revenue relating to
the Software Solutions and Computerised Business Equipment as follows:
6 months ending 6 months ending
30 June 2008 30 June 2007
Revenue R R
Software Solutions 4 011 208 5 077 479
Computerised Business Equipment 1 118 820 408 366
Total 5 130 028 5 485 845
Cost of sales 2 062 352 3 215 936
Software Solutions 1 165 109 2 891 030
Computerised Business Equipment 897 243 324 906
Gross profit 3 067 676 2 269 909
Software Solutions 2 846 099 2 186 449
Computerised Business Equipment 221 577 83 460
Segment assets
Software Solutions 42 991 927 51 303 554
Computerised Business Equipment 921 865 386 833
Segment liabilities
Software Solutions 4 566 622 5 759 244
Computerised Business Equipment 1 791 614 805 961
ACQUISITIONS AND ISSUE OF SHARES FOR CASH
There were no acquisitions or issues of shares during the period under
review.
SUBSEQUENT EVENTS
The previously reported offer to purchase on the Ferndale property has fallen
through. The company is in the process of disposing of the Rivonia property
for a purchase consideration of R3.1 million in order to inject cash into the
group during the turnaround phase. There have been no other significant
subsequent events that require reporting.
DIRECTOR CHANGES
During the period under review Mr Mark Shaw was appointed as financial
director pursuant to Chris Boshoff retiring from the board. Mr Craig
Christensen has resigned as a director. Two new alternate directors to the
two Malaysian directors were appointed, namely Messrs Ian Jeremy Jones and
Hiok Khiang Chan. No other changes were made.
LITIGATION
There is no litigation pending against the company.
RENEWAL OF CAUTIONARY ANNOUNCEMENT
The company remains in negotiations with a potential BEE partner for the
group. Accordingly, shareholders are advised to continue to exercise caution
until a further announcement is made.
By order of the Board
KK (Jack) Yong
Acting Chief Executive Officer
19 September 2008
Johannesburg
Registered Office
Arcay House, Number 3 Anerley Road, Parktown, Johannesburg,
2193
PO Box 62397, Marshalltown, Johannesburg, 2107
Directors
Dr CT Ndlovu*(Chairman), M Shaw, MR Gahagan
*, KC Yong^*, KK
Yong^*, IJ Jones^#, HK Chan
* Non-executive, # Alternate, ^ Malaysian,
British
Designated Advisor
Transfer Office
Arcay Moela Sponsors Link Market Services (Proprietary)
(Proprietary) Limited Limited
Date: 19/09/2008 16:05:01 Produced by the JSE SENS Department.
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