| Tue 30 Sep 2008, 8:00 | | ALT - Altech - Unaudited Abridged Consolidated Interim Financial Results For The |
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ALT
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ALT - Altech - Unaudited Abridged Consolidated Interim Financial Results For The
Six Months Ended 31 August 2008
Allied Technologies Limited
(Registration number 1946/020415/06)
Share code: ALT
ISIN: ZAE000015251
("Altech" or "the company")
Unaudited Abridged Consolidated Interim Financial Results for the six months
ended 31 August 2008
HIGHLIGHTS
- Revenue UP 13%
- Operating profit UP 34%
- Headline earnings UP per share 19%
- Return on UP equity 26%
- Strong balance sheet
Income statements
Six months
ended
31 August
% 2008
Figures in R million Change (Unaudited)
Revenue 13 4 533
Operating profit before capital items 34 409
Investment income 24
Finance cost (21)
Capital items (Note 1) 1
Profit before taxation 413
Taxation (102)
STC (28)
Profit after taxation 283
Attributable to minority shareholders 30
Attributable to ordinary shareholders 253 168
Basic earnings per share (cents) 53 262
Diluted basic earnings per share (cents) 50 252
Six months Year
ended ended
31 August 29 February
2007 2008
Figures in R million (Unaudited) (Audited)
Revenue 3 994 8 242
Operating profit before capital items 306 664
Investment income 46 98
Finance cost (9) (21)
Capital items (Note 1) (47) (87)
Profit before taxation 296 654
Taxation (92) (193)
STC (26) (26)
Profit after taxation 178 435
Attributable to minority shareholders 10 26
Attributable to ordinary shareholders 409
Basic earnings per share (cents) 172 421
Diluted basic earnings per share (cents) 167 406
Notes
Six months
ended
31 August
% 2008
Figures in R million Change (Unaudited)
Headline earnings per share (cents) 19 261
Diluted headline earnings per share (cents) 17 251
Adjusted headline earnings
per share (cents) 23 269
Diluted adjusted headline earnings
per share (cents) 21 259
Basis of preparation
The unaudited interim financial results
have been prepared in accordance with
International Financial Reporting Standards
(IFRS), and in terms of IAS 34.
The accounting policies used in the preparation
of these interim results are consistent with
those used in the annual financial statements
for the year ended 29 February 2008.
1. Capital items
Net profit/(loss) on disposal of
property, plant and equipment 1
Impairment of goodwill -
1
2. Reconciliation between earnings
and headline earnings
Attributable earnings 253
Capital items - gross (1)
Headline earnings 252
Additional earnings attributable to
BEE minorities (2)
Fully diluted headline earnings 250
3. Reconciliation between earnings
and fully diluted earnings
Attributable earnings 253
Additional earnings attributable to
BEE minorities (2)
Fully diluted earnings 251
4. Reconciliation between earnings
and adjusted headline earnings
Attributable earnings 253
Capital items - gross (1)
Amortisation of intangible assets 9
Tax effect of adjustments (1)
Adjusted headline earnings 260
Additional earnings attributable to
BEE minorities (2)
Fully adjusted diluted headline earnings 258
Six months Year
ended ended
31 August 29 February
2007 2008
Figures in R million (Unaudited) (Audited)
Headline earnings per share (cents) 220 511
Diluted headline earnings per share (cents) 214 494
Adjusted headline earnings
per share (cents) 220 511
Diluted adjusted headline earnings
per share (cents) 214 494
Basis of preparation
The unaudited interim financial results
have been prepared in accordance with
International Financial Reporting Standards
(IFRS), and in terms of IAS 34.
The accounting policies used in the preparation
of these interim results are consistent with
those used in the annual financial statements
for the year ended 29 February 2008.
1. Capital items
Net profit/(loss) on disposal of
property, plant and equipment - (1)
Impairment of goodwill (47) (86)
(47) (87)
2. Reconciliation between earnings
and headline earnings
Attributable earnings 168 409
Capital items - gross 47 87
Headline earnings 215 496
Additional earnings attributable to
BEE minorities - (4)
Fully diluted headline earnings 215 492
3. Reconciliation between earnings
and fully diluted earnings
Attributable earnings 168 409
Additional earnings attributable to
BEE minorities - (4)
Fully diluted earnings 16 8 405
4. Reconciliation between earnings
and adjusted headline earnings
Attributable earnings 168 409
Capital items - gross 47 87
Amortisation of intangible assets - -
Tax effect of adjustments - -
Adjusted headline earnings 215 496
Additional earnings attributable to
BEE minorities - (4)
Fully adjusted diluted headline earnings 215 492
5. Dividends
It is group policy for dividends to be declared
after the financial year.
Balance sheets
31 August 31 August 29 February
2008 2007 2008
Figures in R million (Unaudited) (Unaudited) (Audited)
Assets
Non-current assets 1 694 702 796
Property, plant and equipment 628 288 299
Intangible assets and goodwill 962 329 409
Investment and loan - 13 -
Deferred taxation 104 72 88
Current assets 2 253 2 576 2 892
Inventories 402 429 364
Trade and other receivables 1 256 962 937
Net cash and cash equivalents 595 1 185 1 591
TOTAL ASSETS 3 947 3 278 3 688
Equity and liabilities
Total equity 2 103 1 742 2 027
Shareholders` equity 1 905 1 673 1 955
Minority shareholders` interest 198 69 72
Non-current liabilities 132 113 100
Interest-bearing loans 107 110 77
Deferred taxation 25 3 23
Current liabilities 1 712 1 423 1 561
Trade and other payables 1 573 1 290 1 452
Warranty provisions 18 21 22
Taxation payable 121 112 87
TOTAL EQUITY AND LIABILITIES 3 947 3 278 3 688
Abridged cash flow statements
Six months Six months Year
ended ended ended
31 August 31 August 29 February
2008 2007 2008
Figure s in R million (Unaudited) (Unaudited) (Audited)
Cash flows - operating
activities (197) 98 683
Cash generated by operations 444 341 761
Changes in working capital (246) (4) 248
Net finance income 3 37 77
Taxation paid (109) (38) (165)
Cash available - operating
activities 92 336 921
Dividends paid
- to shareholders (278) (235) (235)
- to minority shareholders (11) (3) (3)
Cash flows - investing
activities (747) (170) (242)
Cash flows - financing
activities (52) 84 (23)
Net (decrease)/increase in cash
and cash equivalents (996) 12 418
Cash and cash equivalents
- at beginning of period 1 591 1 173 1 173
- at end of period 595 1 185 1 591
Supplementary information
31 August 31 August 29 February
2008 2007 2008
Figures in R million (Unaudited) (Unaudited) (Audited)
Depreciation and amortisation 77 42 96
Impairment - 47 86
Capital expenditure 139 71 137
Capital commitments 2 9 5
Lease commitments 176 195 208
Payable within the next 12
months: 72 57 78
- property 42 43 50
- plant, equipment and vehicles 30 14 28
Payable thereafter: 104 138 130
- property 102 132 125
- plant, equipment and vehicles 2 6 5
Net foreign exchange
gains/(losses) 16 (4) 25
Weighted average number of
shares (million) 96 98 97
Diluted average number of
shares (million) 100 100 100
Shares in issue at end of
period (million) 96 96 96
Ratios
EBITDA 510 394 667
Operating margin (%) 9,0 7,7 8,1
ROCE (%) 39,4* 39,4* 36,6
ROE (%) 26,4* 20,0* 25,4
ROA (%) 36,2* 36,4* 41,5
Current ratio 1,3 1,8 1,9
Acid test ratio 1,1 1,5 1,6
NAV (cps) 1 974 1 734 2 026
* Annualised
Abridged segmental analysis
Six months
ended
31 August
2008
Figures in R million (Unaudited) %
Revenue:
Telecommunications
division 3 342 74
Multi-media and
Electronics divisions 870 19
Information Technology
division 371 8
Inter-group sales (50) (1)
4 533 100
Operating profit:*
Telecommunications
division 325 80
Multi-media and
Electronics divisions 48 12
Information Technology
division 30 7
Corporate 6 1
409 100
Six months
ended
31 August
2007
Figures in R million (Unaudited) %
Revenue:
Telecommunications
division 2 911 73
Multi-media and
Electronics divisions 809 20
Information Technology
division 340 9
Inter-group sales (66) (2)
3 994 100
Operating profit:*
Telecommunications
division 229 75
Multi-media and
Electronics divisions 59 19
Information Technology
division 16 5
Corporate 2 1
306 100
Year
ended
29 February
2008
Figures in R million (Audited) %
Revenue:
Telecommunications
division 5 950 72
Multi-media and
Electronics divisions 1 655 20
Information Technology
division 731 9
Inter-group sales (94) (1)
8 242 100
Operating profit:*
Telecommunications
division 493 74
Multi-media and
Electronics divisions 121 18
Information Technology
division 56 9
Corporate (6) (1)
664 100
* Operating profit is stated before goodwill impaired and capital items
Statements of changes in equity
Share
capital and Treasury Other
Figures in R million premium shares reserves
Balance at 1 March 2007 64 (257) 6
Recognised income and expense
Share-based payments
Foreign currency translation
differences
Attributable earnings
Transactions with shareholders
Dividends
Transaction with minorities
Treasury shares acquired (35)
Cancellation of treasury shares
acquired (67)
Issue of share capital 4
Balance at 31 August 2007 (unaudited) 1 (292) 6
Recognised income and expense
Share-based payments
Attributable earnings
Cash flow hedge reserve 2
Foreign currency translation
differences 65
Transactions with shareholders
Issue of share capital 2
Transaction with minorities
Balance at 29 February 2008 (audited) 3 (292) 73
Recognised income and expense
Share-based payments
Foreign currency translation
differences (29)
Attributable earnings
Transactions with shareholders
Dividends
Acquisition of subsidiary
Balance at 31 August 2008 (unaudited) 3 (292) 44
Ordinary
Retained shareholders`
Figures in R million earnings equity
Balance at 1 March 2007 2 009 1 822
Recognised income and expense
Share-based payments 4 4
Foreign currency translation differences 1 1
Attributable earnings 168 168
Transactions with shareholders
Dividends (235) (235)
Transaction with minorities 11 11
Treasury shares acquired (35)
Cancellation of treasury shares acquired (67)
Issue of share capital 4
Balance at 31 August 2007 (unaudited) 1 958 1 673
Recognised income and expense
Share-based payments 3 3
Attributable earnings 241 241
Cash flow hedge reserve 2
Foreign currency translation differences 65
Transactions with shareholders
Issue of share capital 2
Transaction with minorities (31) (31)
Balance at 29 February 2008 (audited) 2 171 1 955
Recognised income and expense
Share-based payments 4 4
Foreign currency translation differences (29)
Attributable earnings 253 253
Transactions with shareholders
Dividends (278) (278)
Acquisition of subsidiary - -
Balance at 31 August 2008 (unaudited) 2 150 1 905
Minority Total
Figures in R million interest equity
Balance at 1 March 2007 61 1 883
Recognised income and expense
Share-based payments 4
Foreign currency translation differences 1
Attributable earnings 10 178
Transactions with shareholders
Dividends (3) (238)
Transaction with minorities 1 12
Treasury shares acquired (35)
Cancellation of treasury shares acquired (67)
Issue of share capital 4
Balance at 31 August 2007 (unaudited) 69 1 742
Recognised income and expense
Share-based payments 3
Attributable earnings 16 257
Cash flow hedge reserve 2
Foreign currency translation differences 65
Transactions with shareholders
Issue of share capital 2
Transaction with minorities (13) (44)
Balance at 29 February 2008 (audited) 72 2 027
Recognised income and expense
Share-based payments 4
Foreign currency translation differences (20) (49)
Attributable earnings 30 283
Transactions with shareholders
Dividends (11) (289)
Acquisition of subsidiary 127 127
Balance at 31 August 2008 (unaudited) 198 2 103
Message to our shareholders
The directors of Allied Technologies Limited (Altech) are pleased to report
that the group has recorded a successful half-year for the six months ended 31
August 2008, with headline earnings per share up 19% to 261 cents, revenue 13%
higher at R4,5 billion, and operating profit up 34% to R409 million. A strong
balance sheet and a net asset value of 1 974 cents per share underpins the
group`s expansion strategy, with notable progress in several areas during the
half-year, particularly in Africa as detailed under group highlights.
Without doubt, the key highlight of the period was the ruling by the Pretoria
High Court in favour of Altech Autopage Cellular permitting the company to have
its existing value-added network services (VANS) licence converted into an
individual electronic communications network service (I-ECNS) licence. The
Minister of Communications has subsequently brought an application for leave to
appeal the decision, which Altech will be opposing.
Group highlights
Corporate finance
Salient transactions and arrangements involving the Altech group during the six
month period are as follows:
- The conclusion, with effect from 1 March 2008, of the acquisition of 51%
controlling interests in certain East African digital network operations -
Kenya Data Networks Limited (KDN), Swift Global (Kenya) Limited (Swift) and
Infocom Limited (Infocom). These transactions involved a maximum purchase
consideration of US$75 million.
- Detailed agreements relating to the acquisition of the entire issued share
capital of Fleetcall (Pty) Limited (Fleetcall), a national trunked radio
network operator, licensed by ICASA, have been signed. Fleetcall`s end-users
are primarily involved in the road transportation industry.
- This transaction involves a maximum potential purchase consideration of R85
million, of which R50 million will be paid shortly after the fulfilment of the
remaining conditions precedent relating to the transaction. The balance of R35
million will be payable over two years, subject to Fleetcall achieving certain
specified profit levels.
- Signature of a term sheet relating to the proposed acquisition of 51% of
the share capital of Verstay (Pty) Limited (Verstay), for R7,5 million. Verstay
is the distributor in southern Africa of the Vertex Standard range of two-way
radio products, which is complementary to the product range of Altech Alcom
Radio Distributors.
- The acquisitions, by Altech Netstar of the businesses of its franchisees,
as going concerns, in Bloemfontein and Witbank for an aggregate maximum purchase
consideration of approximately R18 million.
- Signature of term sheets relating to the acquisitions by Altech Netstar, of
the businesses of its franchisees in Nelspruit and Pietersburg, as going
concerns, by way of separate transactions.
Telecommunications
Altech Autopage Cellular remains the largest independent service provider in
South Africa in a telecommunications market that continues to evolve. During
the period, the company performed well ahead of expectations, exceeding both
profitability and cash flow targets.
During the period under review, Altech Autopage Cellular signed five year
extension agreements with both MTN and Vodacom. At the end of the interim
period, the company signed a long-term distribution agreement with South
Africa`s new telecommunications network operator, Neotel, which offers
consumers a viable alternative to Telkom`s existing products and services. This
anchor partnership, effective 1 October 2008, extends Altech Autopage
Cellular`s range of products and services, allowing customers to purchase off-
the-shelf fixed line, voice and data products. In turn, Neotel has immediate
access to a nationwide retail distribution network.
The partnership will provide Altech Autopage Cellular`s customers, many of whom
do not have a fixed-line telephone or data service, with an affordable
solution to enhance and complement their existing mobile services.
Altech Autopage Cellular connected approximately 80 000 new contract
subscribers during the first six months of the year, taking its total
subscriber base to over 941 000 for post-paid and pre-paid connections
combined. The pre-paid subscriber base continues to grow steadily.
ARPU (average revenue per user) declined slightly on the previous year due to
depressed economic conditions. This is being addressed by increasing high-end
corporate and fixed cellular connections and sales of value-added services.
Sales of electronic pre-paid vouchers showed continued good growth.
Sales of mobile data services through add-on data bundles and cellular data
connections are providing a growing stream of revenue and enhanced ARPU for the
company. The broadband and data subscriber base exceeds 57 000.
Altech Autopage Cellular`s existing channels to market - 150 franchise stores,
the corporate sales force (supported by branches in Durban, Cape Town, Port
Elizabeth and Bloemfontein) and premium service provider Altech Supercall -
have been supplemented by third-party call centres and distributors of data
products.
Altech Autopage Cellular teamed up with Kulula to launch a mobile Internet
service that offers 3G packages over 24-month contracts available on the
Kulula website. The six month pilot phase has been concluded and over 1 000
subscribers have been filtered through the airline`s "Get Connected for Less"
product offering.
Mobile number portability continues to generate a steady migration of `port
customers` for the company. This removal of a long-standing barrier to open
competition for subscribers in the cellular market has resulted in a net gain
of around 10 000 subscribers for Altech Autopage Cellular.
Altech Netstar delivered strong trading results and maintained its market share
lead, despite tough trading conditions, caused by the sharp decline in motor
vehicle sales and the highly competitive nature of the stolen vehicle recovery
(SVR) industry.
The company now manages a SVR subscriber base of 461 000 vehicles, with the
value of vehicles protected exceeding R53 billion.
The merger of Altech Netstar Fleet Management Services and ComTech into Altech
Netstar Fleet Solutions has delivered the expected savings as well as the most
comprehensive range of products available in the fleet management market, to a
consolidated subscriber base of over 48 000 vehicles. Altech Netstar Fleet
Solutions is now a formidable competitor in the fleet management sector with
approximately 20% market share.
Altech Netstar signed an agreement with London Stock Exchange Listed, ITIS
Investments of the United Kingdom to provide traffic information. A joint
venture, Altech Netstar Traffic, has been formed to manage this opportunity.
Altech Netstar continued to invest in technological development, launching a
number of innovative products over the period, including the Guardian - a
personal GPS tracking device that can pinpoint an individual`s location to
within three metres.
Altech Alcom Matomo, a leading radio and telemetry service provider, had an
excellent first half, ahead of both budget and prior-year performance.
Following the completion of the South African Police Services (SAPS) Gauteng
Tetra network, a bid was submitted for the SAPS Eastern Cape Tetra system,
which is expected to be announced in the fourth quarter of 2008. The company`s
healthy order book underpins an expected solid performance in the second half.
Altech Alcom Radio Distributors is the dominant Motorola distributor of two
-way radio products for South and southern Africa through a network of
authorised dealers and sub-distributors. Results for the first half reflect
focused efforts in servicing this strong dealer base, increased sales of
broadband link products and a solid export performance. Application software
has been procured to enable users of the new Motorola digital radios to fully
utilise the GPS function in personal and vehicle tracking.
Altech Stream successfully completed its mobile WiMax trial in Gauteng in May
2008 and demonstrated the network`s capabilities to ICASA, including the
wireless delivery of triple-play services (video streaming, internet access and
voice over internet protocol or VoIP), using equipment provided by Samsung
Electronics of Korea. This network has since been dismantled, in line with the
provisions of the trial licence. Resources that have gained experience from
this trial have been re-deployed to East Africa to assist with new and
continuing WiMax rollouts in that region.
Altech Stream East Africa
As part of the acquisition of 51% of KDN, Swift and Infocom, Altech and Sameer
ICT Limited (Sameer) have injected fresh capital of US$20 million into the
acquired companies to expand their capacity and revenue-generating
capabilities. KDN, Swift and Infocom have deployed the bulk of this capital,
resulting in notable expansions of their network diversity, capacity and
reliability. The additional customers already attracted are expected to
underpin forecast growth in revenue and profits. The group has met its earn
-out profit targets for the six month period under review.
Together with Altech Stream Rwanda, these companies are grouped functionally
into Altech Stream East Africa, with headquarters in Nairobi. Altech Stream
Rwanda has commissioned its network in Kigali, comprising its own satellite
teleport and an optimal blend of wireless access technologies (ie both WiMax
and WiFi).
Altech Stream East Africa is the largest data network operator group in the
region. It is uniquely positioned to capitalise on the substantial capacity in
international connectivity via submarine optical fibre, which should become
available next year. The inter-country fibre optic cable networks of the
companies in Altech Stream East Africa will be used to connect customers in
landlocked countries to international communications networks, relieving their
dependence on slow and expensive satellite connectivity.
Multi-media and electronics
Altech UEC recorded satisfactory results in the review period, reflecting
continued demand for the advanced set-top box products and associated software
it develops, manufactures and deploys. Acknowledged as a global participant in
decoder technology, the company has continued to expand into the international
marketplace, particularly India, where it has secured significant orders.
Growing demand is being met by significantly increased production from the
Durban-based factory and additional production facilities in south-east Asia.
After having invested substantially in research and development, to maintain
its competitive edge in new-generation systems, Altech UEC has been able to
release a host of new products into the market, including products in the
medium to high-end PVR market, and low-end MPEG4 products for Asia. These
products have generated considerable interest with new contracts negotiated in
India, and advance sales activities in many other countries.
The Media-kiosk, developed by Altech UEC, the intellectual property rights of
which are exclusively owned by Altech, is a revolutionary new approach to IPTV
for emerging markets. The retail kiosk allows the download of a video from a
hard drive in the kiosk onto a portable flash memory drive, for later replay
via a low cost set-top box. The intellectual property contained in this program
concerns Digital Rights Management and Content Management which previously
prevented development of this retail proposition, because of the security
concerns of the content owner s. International television operators and media
distribution companies have expressed enthusiasm, for the new market enabled by
this home-grown product.
Altech Global Decoder Logistics, with support and logistics operating units in
Australia and South Africa, performed well during the period.
Arrow Altech Distribution maintained its market leadership position with
earnings ahead of the prior year. Good growth was recorded in key technology
groups and, specifically, significant strides have been made in lighting and
energy products. The company`s focus on customised solutions has kept the order
book at acceptable levels for a comprehensive market range-from automatic
utility meters to domestic and automotive security systems, vehicle tracking
and fleet management products and electronic contract manufacturing services.
Information technology
Altech Information Technologies
As of 1 January 2008, all the South African information technology businesses
within the Altech group were consolidated under one company, namely Altech
Information Technologies. This company comprises the following trading
divisions: Altech Isis; Altech NamITech and Altech Card Solutions.
Altech Isis` trading for the period has been satisfactory. The company is
experiencing a significant increase in the supply of systems integration
services to the telecommunications market. Managing customer demand with a
highly skilled workforce in an environment experiencing severe skill shortages,
has been challenging and is expected to continue for the foreseeable future.
The addition of KDN as a customer during the trading period has contributed
positively and will continue to do so in the following trading period. The
company is making impressive new in-roads with its real-time converged
`Customer Care and Billing` product supported by its systems integration
and 24x7 support services.
Altech NamITech South Africa is one of Africa`s leading providers of cellular
SIM cards, pre-paid vouchers, magnetic stripe and EMV bank cards. Fierce
competition is presently being experienced from international suppliers in tough
trading conditions. Also contributing to this difficult situation is the
substantial consolidation that has taken place in the African cellular landscape
which has lead to the industry being dominated by a few large companies with
central purchasing controls. Selling price and margin pressure in this highly
commoditised market has been experienced during the trading period and is
expected to continue. Consequently trading losses have been recorded, albeit at
lower levels compared to the prior year. A steady growth in the roll-out of EMV
products was experienced with these growth rates expected to be maintained. Due
to the reported high level of debit card fraud experienced by the financial
institutions in South Africa the conversion from magnetic stripe to EMV debit
cards will be accelerated by the financial institutions which will have a
positive impact in the following trading period.
Altech Card Solutions recorded a solid performance for the half-year. The
resale of EFTPOS terminals to financial institutions has been better than
budgeted and compared to the previous trading period. The transaction switch
has experienced steady growth with the addition of new customers during the
trading period. The switching division is working on strategic projects that
should make a substantial contribution in the following trading period. The new
e-security business division performed better than expected and ahead of
budget.
Altech NamITech West Africa`s pre-paid cellular voucher manufacturing
facility in Lagos, Nigeria continues to experience growth hence an increase in
production output from 60 million vouchers per month being produced in the
previous trading period to over 100 million vouchers per month in the present
trading period. These are supplied to the five major telecommunications
operators in the region. This operation experienced strong revenue and profit
growth, exceeding expectations.
Business combinations
As mentioned above, on 1 March 2008, the group acquired from Sameer 51% of the
issued share capital of KDN, Swift and Infocom. The purchase price of US$75
million was allocated as follows:
- US$68 million for the shares in KDN.
- US$5 million for the shares in Swift.
- US$2 million for the shares in Infocom.
Of the total purchase price of US$75 million, an amount of US$10 million is
being held in escrow, to be released to the vendors of the shares concerned,
against the achievement of an aggregated combined profit after taxation of at
least US$11,7 million for the 12 months ending 28 February 2009. The escrow
amount and interest thereon will be reduced proportionately to any shortfall on
the warranted profit after taxation stated above.
In addition the company and Sameer injected new capital of US$20 million into
the three companies acquired, of which 51% was provided by Altech and the
remaining 49% was provided by Sameer. Therefore, Altech`s maximum total
investment was US$85,2 million, comprising the purchase price of US$75 million
and the cash injection of US$10,2 million.
KDN is a full service data communications carrier and its portfolio of services
include Metro fibre Trunk backhaul, Gateway and Metro wireless. Swift is an
internet service provider in Kenya, utilising gateway and network capacity
provided by KDN. Infocom provides internet and information techhnology
services, including the design and implementation of virtual private networks.
The acquired businesses contributed revenue of R173 million and profit after
tax of R27 million for the six months ended 31 August 2008.
The above acquisitions had the following effect on the group`s assets and
liabilities:
Carrying Fair value Recognised
amount adjustments values
R`000 R`000 R`000
Non-current assets 305 - 305
Current assets 111 - 111
Non-current liabilities (139) - (139)
Current liabilities (173) - (173)
Net identifiable assets and
liabilities 104 - 104
Attributable to minorities (51)
Goodwill on acquisition 544
Total consideration 597
The purchase price allocation is in the process of being finalised.
Acquisition of the Altech Netstar franchisees in Witbank and Bloemfontein
During the period under review the group acquired 100% of the Altech Netstar
franchisees in Witbank and Bloemfontein.
The acquirees` combined balance sheets at the date of acquisition were as
follows:
R million
Purchase price - cash consideration 18
Fair value of net assets acquired -
Intangible assets 18
Revenue and profit after tax attributable to these acquisitions are not
material.
Directorate
Mr Alex Smith was appointed to the Altech board as a non-executive director as
well as being appointed a member of the Altech business risk committee, with
effect from 1 September 2008.
Black economic empowerment
Building on progress made in recent years, Altech released its updated
Transformation Vision 2012 initiative during the period under review. This sets
out enhanced broad-based black economic empowerment targets for each group
company, which have been integrated into management performance assessments as
measurable indicators and will underpin the competitiveness and continued
success of our group.
Prospects
Continued innovation and strategic restructuring have positioned Altech well to
meet the challenges of the prevailing economic climate in South Africa.
Equally, the broader group is appropriately structured to manage the predicted
convergence in the fields of voice, video and data in domestic and
international markets.
With a strong order book and growing annuity revenue (which now represents 77%
of group turnover), the liberalisation and deregulation of the
telecommunications sector, Altech is well positioned for continued real growth
during the second half of the financial year.
By order of the board
Dr Hilton Davies Craig Venter Dr John Carstens
Non-executive Chairman Chief Executive Officer Chief Financial Officer
Directors
Dr HK Davies (Non executive Chairman)#, CG Venter (Chief Executive Officer),
Dr JEW Carstens - (Chief Financial Officer), PMO Curle*, ML Leoka#, R Naidoo#,
Dr H A Serebro#, M Sindane#, ZJ Sithole#, AMR Smith#*, RE Venter#,
Dr WP Venter# #Non-executive *British
Secretaries
Altech Management Services (Pty) Limited
R Wolmarans
Sponsor
Investec Bank Limited
The interim financial results are also available on the internet at
www.altech.co.za and the JSE News Service (SENS)
Date: 30/09/2008 08:00:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
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employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
