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SVB
SVB
SVB - Key Features of Silverbridge Holdings Limited and Condensed Unaudited
Group Interim Financial Statements for the Six Month Period Ended 31
August 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")
Key Features Of Silverbridge Holdings Limited And Condensed Unaudited Group
Interim Financial Statements For The Six Month Period Ended 31 August 2008
FINANCIAL HIGHLIGHTS
for the six month period ended 31 August 2008
- The successful conclusion of the Ones `N Zeros Professional Services (SA)
(Pty) Ltd acquisition and inclusion of the company as a new subsidiary and
consulting business segment.
- Successful finalisation of the Regent Life implementation, the largest
implementation done by SDT to date.
- Successful implementation of La Prudance Life, a Mauritius based company,
expanding the footprint of SDT and SilverBridge in Africa.
- Revenue increased by 19%.
CONDENSED UNAUDITED GROUP INCOME STATEMENT
for the six months ended 31 August 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 29 February
2008 2007 Change 2008
R`000 R`000 % R`000
Revenue 29,769 25,049 19 59,865
Other income 1,057 342 1,236
Other expenses (27,815) (22,307) (47,780)
Finance income 531 454 846
Finance expense - (29) (139)
Profit/(loss) before 3,542 3,509 14,028
taxation
Taxation (998) (1,022) (4,221)
Profit/(loss) for the 2,544 2,487 2 9,807
year
Attributable to:
Equity holders of the 2,118 2,487 (15) 9,807
parent
Minority interests 426 - -
2,544 2,487 9,807
Number of shares in 33,588 32,597 32,491
issue (`000)
Weighted average 32,927 32,597 32,491
number of shares in
issue (`000)
Earnings per share 6.43 7.63 (15.73) 30.18
(cents)*
Diluted earnings per 6.37 7.63 (16.51) 30.18
share (cents)*
Headline earnings per 6.43 7.63 (15.73) 30.26
share (cents)*
Diluted headline 6.37 7.63 (16.51) 30.26
earnings per share
(cents)*
Reconciliation of
headline and diluted
headline earnings*
Basic and diluted 2,118 2,487 9,807
earnings
Adjusted for:
Gain on disposal of - - 26
equipment
Headline and diluted 2,118 2,487 9,833
headline earnings
Headline earnings per 6.43 7.63 30.26
share (cents)
Diluted earnings per 6.37 7.63 30.26
share (cents)
* Diluted earning per share calculated on earnings of R2.118 million and 990
401 shares. Shares include obligation to issued shares relating to the Ones `N
Zeros acquisition.
CONDENSED UNAUDITED GROUP BALANCE SHEET
as at 31 August 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 29 February
2008 2007 2008
R`000 R`000 R`000
ASSETS
Non-current assets
Equipment 5,347 2,104 2,040
Intangible assets 20,696 10,992 11,617
Investment in associate 139 72 91
Deferred tax assets 2,689 1,656 2,634
Total non-current assets 28,871 14,824 16,382
Current assets
Income tax receivable 3,168 1,350 3,164
Revenue recognised not yet 253 2,378 6,976
invoiced
Trade and other receivables 24,266 13,552 11,328
Cash and cash equivalents 5,831 7,874 12,631
Total current assets 33,518 25,154 34,099
Total assets 62,389 39,978 50,481
EQUITY AND LIABILITIES
Capital and reserves
Issued capital 336 326 326
Share premium 8,359 10,804 10,797
Treasury shares (197) (206) (197)
Retained earnings/(accumulated 24,587 14,722 22,042
loss)
Total equity attributable to 33,085 25,646 32,968
equity holders of the parent
Minority interests 7,723 - -
Total equity 40.808 25,646 32,968
Non-current liabilities
Shareholders loan 9 - -
Total non-current liabilities 9 - -
Current liabilities
Deferred revenue 1,650 3,188 3,282
Trade and other payables and 18,601 11,144 14,231
provisions
Shareholders for dividends 1,321 - -
Total current liabilities 21,572 14,332 17,513
Total equity and liabilities 62,389 39,978 50,481
CONDENSED UNAUDITED GROUP STATEMENT OF CHANGES IN EQUITY
for the six months period ended 31 August 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 29 February
2008 2007 2008
R`000 R`000 R`000
Opening balance 32,968 27,355 27,355
Profit for the year 2,118 2,487 9,807
attributable to equity holders
of the parent
Minority interests 426 - -
Total recognised income and 2,544 2,487 9,807
expense for the year
Minority interest in retained 7,723 - -
earnings on acquisition of
subsidiary
Allotment of 990,401 shares 2,476 - -
Treasury shares acquired - (128) (119)
Capital distribution of share (4,904) (4,068) (4,075)
premium
Closing balance 40,808 25,646 32,968
CONDENSED UNAUDITED GROUP CASH FLOW STATEMENT
for the six months period ended 31 August 2008
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 29 February
2008 2007 2008
R`000 R`000 R`000
Net cash from operating (6,316) (3,135) 2,576
activities
Net cash from investing (2,968) (1,190) (2,146)
activities
Net cash from financing 2,484 (4,199) (4,194)
activities
Net increase/(decrease) in (6,800) (8,524) (3,764)
cash
Cash at the beginning of the 12,631 16,398 16,398
year
Effects of exchange - - (3)
translation on cash and cash
equivalents
Cash at the end of the period 5,831 7,874 12,631
CONDENSED UNAUDITED GROUP SEGMENT REPORTS
for the six months period ended 31 August 2008
primary: Business segments report
Implemen-
tation Suppport
Total services services
R`000 R`000 R`000
Unaudited 6 months
ended 31 August 2008
Segment revenue 29,769 10,938 4,158
Segment result 11,556 742 1,706
Unallocated expenses, finance income (9,012)
and expense and income tax expense
Profit for the period 2,544
Audited 12 months ended 29 February
2008
Segment revenue 59,865 34,242 9,966
Segment result 36,470 22,318 5,430
Unallocated expenses, finance income (26,663)
and expense and income tax expense
Profit for the period 9,807
Unaudited 6 months ended 31 August
2007
Segment revenue 25,049 10,784 5,696
Segment result 8,897 2,187 2,416
Unallocated expenses, finance income (6,410)
and expense and income tax expense
Profit for the period 2,487
Research Software
and rental
development Consulting and
income other
R`000 R`000 R`000
Unaudited 6 months
ended 31 August 2008
Segment revenue - 4,112 10,561
Segment result (2,600) 1,147 10,561
Unallocated expenses, finance
income and expense and income
tax expense
Profit for the period
Audited 12 months ended 29
February 2008
- - 16,497
Segment revenue
Segment result (8,171) - 16,893
Unallocated expenses, finance
income and expense and income
tax expense
Profit for the period
Unaudited 6 months ended 31
August 2007
Segment revenue - - 8,569
Segment result (4,275) - 8,569
Unallocated expenses, finance
income and expense and income
tax expense
Profit for the period
* The assets & 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 assets and liabilities to the business segments.
SECONDARY: GEOGRAPHICAL SEGMENT
Other
South African
Total Africa countries*
R`000 R`000 R`000
Unaudited 6 months ended 31 August
2008
Revenue from external clients 29,769 23,628 6,141
Assets and liabilities
Segment assets 62,389 53,029 9,360**
Segment liabilities 21,581 21,581 -
Audited 12 months ended 29 February
2008
Revenue from external clients 59,865 41,093 18,772
Assets and liabilities
Segment assets 50,481 45,860 4,621
Segment liabilities 17,513 17,513 -
Unaudited 6 months ended 31 August
2007
Revenue from external clients 25,049 15,458 9,591
Assets and liabilities
Segment assets 39,978 33,613 6,365
Segment liabilities 14,322 14,322 -
* Other African countries include Kenya, Malawi, Nigeria, Ghana, Namibia,
Lesotho, Swaziland and Zimbabwe.
** Debtors are allocated to clients outside South Africa.
COMMENTARY
1. ACCOUNTING POLICIES
1.1. Basis of presentation
The interim financial statements have been prepared in accordance with IAS34,
Interim financial reporting and in compliance with the Listing Requirements of
the JSE Limited.
The interim financial statements for the six months ended 31 August 2008
incorporate the condensed unaudited Group financial statements and are
prepared in accordance with the Group`s accounting policies which are in
accordance with International Financial Reporting Standards (IFRS). The
accounting policies applied are consistent with those of the previous
financial year.
2. CORPORATE ACTIVITY
2.1. Acquisition of Ones `N Zeros Professional Services (Pty) Ltd
Shareholders are referred to the SENS announcements dated 18 June 2008 and 3
July 2008, regarding the acquisition of 51% of the shares in Ones `N Zeros
Professional Services (SA) (Pty) Ltd ("ONZ"). SilverBridge acquired 51% of the
equity of ONZ on 1 July 2008 for R10.7 million. The purchase price was settled
through a cash payment of R2.5 million and by issuing 990 401 SilverBridge
shares at an issue price of R2.50 a share. The balance of the purchase price
is payable 50% in cash and 50% by the issue of Silverbridge shares provided
ONZ achieves its profit forecasts.
SilverBridge has an option to buy the remaining 49% on similar terms to the
original transaction. ONZ`s primary business is systems implementation
consulting in the banking sector, while SDT has its own software solutions for
the life assurance market. The skills base of ONZ enables SilverBridge access
to the consulting sector of the life assurance market, while ONZ is now able
to expand out of its traditional market into life assurance.
The unaudited effect of the transaction on the financial statements is
summarised as follows:
R `000
Non-current assets 37
Trade accounts and other receivables 6,162
Trade payables and other payables 3,634
Cash and cash equivalents 3,344
Net asset value 5,909
Purchase price allocated to intangible assets 9,853
Assets excluding goodwill 15,762
Minority interest 7,723
Assets acquired 8,039
Purchase price 10,705
Issue of shares 2,476
Cash payment 2,773
Investment costs capitalised 456
Net present value of payment outstanding 2,500
Net present value of 990 401 share issue outstanding 2.500
at R2.80
Purchase price allocated to goodwill 2,666
The calculation of the intangible assets arising as a result of the merger
have not been finalised. The final detailed split of the goodwill and
intangible assets will be disclosed in the annual results for the period
ending February 2008.
2.2. Capital distribution
A capital distribution of R4 903 500 was approved by shareholders on 4 July
2008 and paid on 8 August 2008.
3. DIRECTORATE
Ms. Nthabiseng Mokone, as a representative of Amabubesi Investments (Pty) Ltd
was appointed as a non-executive director on 23 April 2008. Ms. Sandra
Duetsch, managing director of ONZ, was appointed as an executive director on
24 July 2008. Mr. Rowan Williams resigned from the board as a non-executive
director on 23 April 2008, but remains on the board as the alternate director
to Mr. David Smollan.
Mr. Jeremy de Villiers was appointed as an independent non-executive director.
Ms Sphelele Sangweni was appointed as an alternate director to the Chairman,
Mr. Andile Sangqu. Both appointments were made with effect from 2 October
2008.
From 2 October 2008 the role of Ms. Freda du Toit changed from that of an
executive director to a non-executive director. She consults to the group and
remains fully involved in the strategy and business development.
4. FINANCIAL RESULTS AND PERFORMANCE
4.1. Results and performance
The Group`s results for the six months ended 31 August 2008 were below that of
the comparative six months ended 31 August 2007. The six month results is
disproportionate to the financial year results for the 12 months ended 29
February 2008 and expected results for the 12 months ending 28 February 2009.
In particular:
- Revenue increased by 18.8% to R29.7 million in comparison with the
corresponding period of the prior year. The increase can be mainly attributed
to the inclusion of the revenue of ONZ since the effective date of the
acquisition. The first six months results were negatively impacted by delays
in securing and commencement of certain projects. As a result, the Group
carried overheads associated with these projects without the associated
revenues.
- The Group is maintaining fiscal discipline by streamlining operational
costs. The Group had however increased capacity in anticipation of securing
implementation projects and commencement of these projects.
- Earnings per share and headline earnings per share have decreased by 15.73%
to 6.43 cents per share compared to the comparative earnings and headline
earnings per share of 7.63 cents.
4.2. Cash position
The cash position was affected by the following events and is summarised
below:
- Significant revenue relating to the Regent implementation was only invoiced
in July and August 2008 resulting in an abnormal increase in debtors at the
period end. The debtor was collected after period end.
- The operating activities generated R1.2 million of cash.
- The group paid R4.7 million in tax.
- The Group returned cash to shareholders through a capital distribution. The
group had paid R3.8 million of the approved R4.9 million at the end of August
2008.
4.3. Group outlook
The outlook for the second half of the financial year remains positive. The
inclusion of ONZ in the Group unlocks new opportunities in the life assurance
and banking sectors. The sales pipeline of SDT remains strong especially in
the medium size market. The current crisis mentality in the financial markets
might slowdown decision making in our market for the short term, but no clear
trend is emerging yet.
In the medium term, the structural adjustments and economic pressures in the
local and international financial services industry continue to create a sound
market for the Group. The pressure on costs creates a demand for quality niche
software applications that support companies in driving down cost structures
and increase their ability to be competitive. The economic development in
Africa and resultant evolution of financial services still 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.
On behalf of the Board of directors
Jaco Swanepoel Andile Sangqu
Chief Executive Officer Chairman
Pretoria
4 November 2008
CORPORATE INFORMATION
Directors of SilverBridge:
Andile Sangqu* (Chairman),
Jaco Swanepoel (CEO),
Jeremy de Villiers**, Sandra Deutsch,
Freda du Toit*, Jaco Maritz,
Nthabiseng Mokone*, David Smollan*,
Justin van den Hoven*,
Sphelele Sangweni***,
Rowan Williams***
(All the directors are South Africa citizens).
*Non-executive.
**Independent Non-Executive
***Alternate director
(All the directors are South Africa citizens).
*Non-executive.
**Independent Non-Executive
***Alternate director
SilverBridge and SDT Registered offices
First Floor, Castle View North
495 Prieska Street, Erasmuskloof,
Pretoria, 0048
(PO Box 11799, Erasmuskloof, 0048)
Company Secretary:
Fusion Corporate Secretarial Services (Pty) Ltd,
represented by Melinda van den Berg
Auditors:
KPMG Incorporated
(Registration number: 99/21543/21)
Transfer secretaries
Computershare Investor Services (Pty) Ltd
(Registration number: 2004/003647/07)
70 Marshall Street, Johannesburg, 2001
(PO Box 61051Marshalltown, 2167)
Corporate advisers:
Sasfin Capital (a division of Sasfin Bank Limited)
(Registration number: 1951/002280/06)
Date: 04/11/2008 10:05:01 Produced by the JSE SENS Department.
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