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ADI
ADI
ADI - AdaptIT - Unaudited Group Results For The Six Months Ended 31 August 2008
ADAPTIT HOLDINGS LIMITED
(Formerly known as InfoWave Holdings Limited)
(Registration number 1998/017276/06)
Share code: ADI & ISIN: ZAE000113163
("AdaptIT" or "the group")
Unaudited group results
for the six months ended 31 August 2008
Abridged consolidated income statement (unaudited)
Audited
6 months 6 months Year
Ended ended ended
31 August 31 August 29 February
2008 2007 2008
R`000 R`000 R`000
Revenue 37 585 27 384 57 650
Profit from operations
(before interest) 6 697 4 109 9 729
Net interest income 240 154 375
Preference dividends
received - 149 367
Loss on sale/revaluation of
listed preference shares - (36) (217)
Profit from associate 41 367 287
Profit before taxation 6 978 4 743 10 541
Taxation (2 401) (1 771) (3 215)
Normal tax (1 991) (1 342) (2 786)
Secondary taxation on
Companies (410) (429) (429)
Profit for the period 577 2 972 7 326
Attributable to minorities (361) 95 (224)
Attributable to ordinary 4 216 3 067 7 102
shareholders
Headline profit
Profit attributable to
ordinary shareholders 4 216 3 067 7 102
Loss on sale of investment
in listed preference shares 181
Headline profit 4 216 3 067 7 283
Number of ordinary shares
in issue (`000) 95 644 86 501 97 458
Weighted average ordinary
shares in issue (`000) 96 747 86 407 89 137
Headline earnings per
ordinary share (cents) 4.36 3.55 8.17
Earnings per ordinary
share (cents) 4.36 3.55 7.97
Fully diluted earnings
per share (cents) 4.35 3.53 7.96
Return on equity (%) 20.21 21.26 32.00
Return on assets (%) 12.49 15.70 25.70
Abridged consolidated cash flow information (unaudited)
Audited
6 months 6 months Year
Ended ended ended
31 August 31 August 29 February
2008 2007 2008
R`000 R`000 R`000
Cash flows from operating
activities profit from
operations
(before interest and
dividends) 6 697 4 109 9 729
Adjustment for:
Share-based payment expense 84 119 195
Depreciation and amortization 759 596 1 530
Cash generated from
operations, before 7 540 4 824 11 454
working capital changes
Working capital changes
(Increase)/decrease in
Receivables (2 090) 936 (3 549)
(Decrease)/increase in
Payables (667) (235) 2 512
Cash generated from
Operations 4 783 5 525 10 417
Taxation paid (2 137) (1 312) (2 923)
Net interest income 240 154 374
Preference dividend received - 149 367
Dividend paid to
shareholders (4 317) (3 746) (3 711)
Net cash (outflow)/inflow
From operating activities (1 431) 770 4 524
Cash flow from investing
activities
Acquisition of
Equipment (571) (602) (1 254)
Investment in intangible
Assets - - (2)
Proceeds on sale of
preference shares - - 3 443
Decrease/(increase) in
investment
in associated company - 109 335
Acquisition of subsidiary - - (4 315)
Net cash outflow from
investing
Activities (571) (493) (1 793)
Cash flow from financing
activities
Repurchase of
company`s shares (1 110) - -
Proceeds from share issues - 96 124
Net cash (outflow)/inflow
From financing
activities (1 110) 96 124
Net (decrease)/increase in
cash resources (3 112) 373 2 855
Cash resources at
beginning
of period 7 920 3 872 3 872
Cash resources on
Acquisition
of subsidiaries - - 1 193
Cash resources at end
of period 4 808 4 245 7 920
Group statement of changes in equity (unaudited)
Share-based
Share Share Retained payment
Capital premium earnings reserve
R`000 R`000 R`000
R` 000
Balance at 28 February 2007 9 262 15 194 478
Profit for the year - - 7 102 -
Total recognised income
and expense 9 262 22 296 478
Shares issued during the
Year 1 7 850 - -
Shares repurchased - - - -
Recognition of share-based
Payment - - - 195
Dividend paid - - (3 711) -
Balance at 29 February 2008 10 8 112 18 585 673
Profit for the period - - 4 216 -
Total recognised income
and expense 10 8 112 22 801 673
Shares repurchased (1) (1 109) - -
Recognition of share-based
Payment - - - 84
Dividend paid - - (4 317) -
Balance at 31 August 2008 9 7 003 18 484 757
Attributable
to equity
holders Minority
of AdaptIT interest Total
R`000 R`000 R`000
Balance at 28 February 2007 15 943 440 16 383
Profit for the year 7 102 224 7 326
Total recognised income and
Expense 23 045 664 23 709
Shares issued during the year 7 851 - 7 851
Shares repurchased - (1) (1)
Recognition of share-based
Payment 195 - 195
Dividend paid (3 711) - (3 711)
Balance at 29 February 2008 27 380 663 28 043
Profit for the period 4 216 361 4 577
Total recognised income and
expense 31 596 1 024 32 620
Shares repurchased (1 110) - (1 110)
Recognition of share-based
Payment 84 - 84
Dividend paid (4 317) - (4 317)
Balance at 31 August 2008 26 253 1 024 27 277
Abridged consolidated balance sheet (unaudited)
Audited
31 August 31 August 29 February
2008 2007 2008
R`000 R`000 R`000
Assets
Non-current assets
Property and equipment 2 379 1 644 2 333
Intangible assets 353 797 586
Goodwill 10 408 59 10 408
Investment in associated
Company 41 1 051 -
Deferred taxation asset 255 830 825
13 436 4 381 14 152
Current assets
Trade and other receivables 15 523 7 280 13 433
Listed preference shares - 3 624 -
Cash resources 4 808 4 245 7 920
20 331 15 149 21 353
Total assets 33 767 19 530 35 505
Equity and liabilities
Capital reserves
Issued capital 9 9 10
Share premium 7 003 358 8 112
Share-based payment reserve 757 597 673
Retained earnings 18 484 14 515 18 585
Equity attributable to
ordinary shareholders 26 253 15 479 27 380
Minority interest 1 024 345 664
Total equity 27 277 15 824 28 044
Current liabilities
Trade and other payables 6 490 3 706 7 461
Total equity and liabilities 33 767 19 530 35 505
Net asset value (R`000) 26 253 15 479 27 380
Net asset value per ordinary
share (cents) 27.45 17.89 28.09
Liquidity ratio (times) 3.13 4.09 2.86
Solvency ratio (times) 5.20 5.27 4.76
Market price per share
Close (cents) 54 69 55
High (cents) 71 89 86
Low (cents) 41 62 55
Capital expenditure for
the period 573 602 1 255
Capital expenditure
Authorised 818 822 1 490
Directors` comment
These results have been prepared in terms of IAS 34 Interim Financial Reporting
and are in accordance with the Group`s accounting policies which fully comply
with International Financial Reporting Standards (IFRS) and are consistent with
those applied in the previous year.
The directors endorse the aims of the King Report on Corporate Governance in
conducting the affairs of the Group with integrity and in accordance with the
highest standards of corporate practice. The Group is committed to the
principles of openness, integrity and accountability in its dealings with all
its stakeholders.
Interim report to stakeholders for six months ended 31 August 2008
Results of operations
Revenue grew 37% over the comparative period in the prior year to R37,5
million. Profit from operations grew 63% to R6,7 million. Profit attributable to
ordinary shareholders grew 37% to R4,2 million (R3,1 million) while earnings per
share grew by 23% to 4.36 cents per share (3.55) on the comparative period in
the prior year. ApplyIT contributed a profit of R1,2 million to the group.
Adapt-IT (Pty) Limited contributed a profit of R0,5 million to the group.
Isizinda Consulting (Pty) Limited, a subsidiary acquired as part of the merger
contributed a profit of R0,3 million. The results of the acquisitive strategy
implemented over the past three years are pleasing. The integration of our
businesses is progressing well.
Dividend
Ordinary dividend number 6 of 4.43 cents per share was paid to shareholders on
17 June 2008. This represented a dividend cover of 1.8 times. The Group has a
policy to declare dividends at the end of the financial year and not at the
interim reporting date.
Share Repurchase
During the period the group repurchased 2 096 111 shares at an average price of
51.72 cents. 1 813 911 treasury shares are held by a subsidiary and the
remainder were issued to staff in terms of the share option scheme.
Strategy
The Group`s strategic objectives are to increase operational efficiency, defend
current markets, pursue organic growth, and pursue acquisitive growth into new
markets.
The Board
P Aposporis resigned as a non-executive director in May 2008. The board
expresses its thanks to him for his contribution to the group over the past ten
years. B Tembe was appointed as a non-executive director in May 2008. There have
been no other changes to the board in the period.
BEE
The AdaptIT Group is rated by Empowerdex as a Level 4 contributor to broad
based BEE, which gives our customers 100% recognition of their procurement
spend recognition for their BEE scorecard purposes. Two subsidiaries of the
AdaptIT Group namely, InfoWave (Pty) Limited and ApplyIT (Pty) Limited were
rated as Level 3 contributors which gives customers 110% procurement spend
recognition. AdaptIT remains committed to genuine and sustainable broad based
transformation.
Prospects
We are quite bullish about the prospects of the group going forward as we have
re-defined our service offerings to position us for growth both within current
markets, and into new markets, whilst pursuing acquisitive growth opportunities
in line with our strategy.
Appreciation
We express our thanks to our customers for the success of our longstanding
relationships with them. We also recognise all employees of the group for their
dedication and hard work in serving our customers.
R P Collis S Shabalala
Non-executive chairman Chief executive officer
General Share Repurchases by AdaptIT
1 Introduction
InfoWave (Pty) Limited has acquired a total of 2 096 111 of its holding
company, AdaptIT Holdings Limited`s shares between 12 May and 1 August 2008
and, representing 2.2% of its issued share capital ("the share repurchases"), at
the time of the Annual General Meeting ("AGM").
The share repurchases were effected on the open market in terms of the special
resolution relating to a general authority to repurchase shares ("the general
authority") passed at the AGM of the company held on 30 May 2008 and registered
by the Registrar of Companies.
2 Details of the share repurchases
In respect of the share repurchases:
- the highest price paid was 56 cents per share and the lowest was 45 cents
per share;
- the total consideration paid was R1 084 035;
- and 17 395 582 ordinary shares (representing 17.8% of the issued share
- capital) may still be repurchased in terms of the general authority.
All of the share repurchases were effected in accordance with paragraph 5.72(a)
of the JSE Limited (JSE) Listings Requirements.
3 Source of funds
The share repurchases have been and will continue to be funded from available
cash resources.
4 Directors` statement
Having considered the effect of the share repurchases the board of directors of
AdaptIT ("the board") are of the opinion that the:
- company and the group will be able in the ordinary course of business to
pay its debts for a period of 12 months after the date of this announcement;
- assets of the company and the group will be in excess of the liabilities of
the company and the group for a period of 12 months after the date of this
announcement measured in accordance with the accounting policies used in the
latest audited annual financial statements;
- share capital and reserves of the company and the group will be adequate
for ordinary business purposes for a period of 12 months after the date of this
announcement; and
- working capital of the company and the group will be adequate for ordinary
business purposes for a period of 12 months after the date of this announcement.
5 Financial effects
The pro forma financial effects on the share repurchases on AdaptIT are the
responsibility of the board. The unaudited pro forma financial effects are
presented for illustrative purposes only and because of their nature may not
give a fair reflection of AdaptIT`s results, financial position and changes in
equity before the repurchases.
Before the
Interim share re- %
results 1 purchases 2 Change
Earnings per share 4.36 4.34 3&4 0.46
Headline earnings per share 4.36 4.34 3&4 0.46
Net asset value per share 28.52 29.02 3 (1.72)
Net tangible asset
value per share 17.00 17.75 (4.23)
Number of shares in issue 95 644 555 97 740 666 4 (2.14)
Notes
1. The figures in the "After" column have been extracted from AdaptIT`s
unaudited interim results for the period ended 31 August 2008.
2. The figures in the "Before" column reflect the pro forma effects on the
assumption that the share repurchases were not effected between 12 May and
1August 2008 for earnings purposes and on 31 August 2008 for net asset
value purposes.
3. Based on an assumed after tax interest income of 8,41% earned on surplus
cash prior to the share repurchases.
4. Assumed that no STC is payable as the shares repurchased are held as
treasury shares.
6 JSE listing
In terms of the share repurchases, 282 200 of the shares have been issued
to staff in terms of the share option scheme and the remainder will remain
in issue and be held as treasury shares.
7 Conclusion
The board will continue to repurchase securities as and when deemed
appropriate.
Directors
R P Collis (non-executive chairman), S Shabalala
(chief executive officer), T Dunsdon, M C B Lionnet,
C L von Pannier, B R Carrilho, W Shuenyane
(non-executive director), B Tembe *, Dr A B Ravno*
(independent non-executive directors)
Registered office
Gleneagles Park, 10 Flanders Drive, Mount Edgecombe, 4300
P O Box 2225, M.E.C.C.,
Mount Edgecombe, 4301
Transfer secretary
Computershare Investor Services (Pty) Limited,
70 Marshall Street, Johannesburg, 2001
P O Box 61051, Marshalltown, 2107
Sponsor
Sasfin Capital,
a division of Sasfin Bank Limited, Sasfin Place, North Block,
13-15 Scott Street,
Waverley, 2090
Date: 06/10/2008 09:00:01 Produced by the JSE SENS Department.
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