| Wed 19 Nov 2008, 14:58 | | DTH - Unaudited Interim Results For The 6 Months Ended 31 August 2008 |
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DTH
DTH
DTH - Unaudited Interim Results For The 6 Months Ended 31 August 2008
DTH DYNAMIC TECHNOLOGY HOLDINGS LIMITED
(Formerly Dynamic Visual Technology Holdings Limited)
(Registration number 2004/016984/06)
Share Code: DTH
ISIN:ZAE000124681
("DTH" or "the group")
www.dth.co.za
UNAUDITED INTERIM RESULTS FOR THE 6 MONTHS ENDED 31 AUGUST 2008
HIGHLIGHTS
- Revenue increased by 28,7% to R36,4 million
- Operating profit increased by 28,8% to R5,1 million
- Attributable earnings increased by 47,1% to R4,0 million
- Headline earnings per share up 11,7%
- Assets increased by 69,7% to R36,9 million
- Net tangible asset value per share up 173%
CONDENSED GROUP INCOME STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
Ended ended ended
31 August 31 August 28 February
2008 2007 Change 2008
R `000 R `000 % R `000
Revenue 36 375 28 268 28.7% 58 601
Operating profit 5 130 3 984 28.8% 8 123
Operating profit margin (%) 14.1% 14.1% 13.9%
Investment revenue 441 83 455
Finance costs (0.2) - (1.6)
Profit before taxation 5 571 4 067 8 577
Taxation (1 455) (1 222) (2 410)
Profit for the year 4 116 2 845 44.7% 6 167
Attributable to:
Equity holders of the parent 4 053 2 755 47.1% 6 029
Minority interest 63 90 138
Weighted number of shares
in issue 50 000 000 37 976 027 41 946 841
Basic earnings
per share (cents) 8.1 7.3 11.7% 14.4
Headline earnings per share 8.1 7.3 11.7% 14.1
Diluted Earnings per share 8.0 7.3 10.8% 14.2
Diluted Headline
earnings per share 8.0 7.3 10.8% 14.0
CONDENSED GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months Year ended
to 31 August to 31 August to 28 February
2008 2007 2008
R `000 R `000 R `000
Nat cash from Operating
activities 1 172 5 072 5 497
Cash generated from
operations 2 076 5 042 6 907
Net interest income 441 83 454
Taxation paid (1 345) (53) (1 864)
Net Cash from Investing
activities (595) (1 133) (2 368)
Net Cash from Financing
activities (154) (434) 6 929
Increase in cash and cash
equivalents 423 3 505 10 059
Cash at beginning of period 11 818 1 759 1 759
Cash at end of period 12 241 5 263 11 818
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months ended
31 August 31 August 28 February
2008 2007 2008
R `000 R `000 R `000
Balance at beginning of period 25 496 9 775 9 775
Profit attributable to
equity holders of the parent 4 053 2 755 6 029
Share buy-back and issue of
new shares - 2 512 13 819
Capitalisation of listing
expenditure - (176) (1 445)
Treasury shares held by SIT (153) - (2 635)
Minority interest 63 (358) (120)
Share based payment 78 - 72
Balance at end of period 29 536 14 509 25 496
CONDENSED GROUP BALANCE SHEET
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 August 31 August 28 February
2008 2007 2008
R `000 R R `000
Non-current assets 11 383 11 054
Property, plant and
equipment 1 009 915 887
Goodwill and
Intangible assets 10 181 8 827 10 032
Deferred tax 193 155 136
Current assets 25 593 11 886 22 333
Trade and other receivables 13 352 6 622 10 515
Cash and cash equivalents 12 241 5 264 11 818
Total assets 36 976 21 783 33 387
Equity 29 536 14 509 25 496
Equity attributable to
equity holders
of parent 29 235 14 509 25 257
Share capital 13 842 6 592 13 995
Reserves 149 - 72
Retained income 15 244 7 917 11 191
Minority interest 301 (0) 238
Non-current liabilities
Loans payable (0) 40 (0)
Current liabilities 7 440 7 234 7 892
Trade and other payables 5 897 5 291 6 517
Deferred tax liability 74 - -
Taxation 1 469 1 943 1 375
Total equity and liabilities 36 976 21 783 33 387
Shares in issue at end
of period 50 000 000 40 000 000 50 000 000
Net asset value per
share (cents) 58 36 51
Net tangible asset value
per share (cents) 38 14 30
CONDENSED SEGMENTAL ANALYSIS
Product Services Central operations
Unaudited 6 months ended 31
August 2008
Turnover 4 295 32 080 -
Profit after tax 467 3 331 318
Unaudited 6 months ended
31 August 2007
Turnover 2 052 26 216 -
Profit / (loss) after tax (214) 3 105 (45)
Audited 12 months ended
28 February 2008
Turnover 5 330 53 272 -
Profit after tax 126 5 983 58
OVERVIEW
Nature of Business
Dynamic Technology Holdings Group (DTH) is the holding company for a number of
businesses that provide business application software and services for corporate
and medium sized clients. Our software is provided either as a packaged product
or is custom built and tailored for specific business needs. Our custom-built
software is nearly always developed for core business functionality, and we are
contracted to provide services that range from outsourced partnerships and
support, through large-scale projects, ad-hoc development, and specific
individual skills. Our packaged products offer Customer Care and Service
software, including CRM, Loyalty / Incentive, IT Helpdesk, Call Centre solutions
and Content Management solutions. The Group retains specific skills in
Microsoft and Java Technologies, has a solid relationship with Microsoft at a
senior level, and is a Microsoft Gold certified partner. The Group is an
outcomes based business, and retains core competencies in software development,
business analysis, process analysis and project management. Our strategy is to
become one of the largest premier providers of business applications software
and services in South Africa.
Group Business
DVT - the original business providing application software solutions on the
Microsoft(tm) platform.
jCentric - provides application software solutions on the Java(tm) platform.
Talent Exchange - a specialist IT recruitment business.
Offline Digital - a specialist digital content and publishing business.
Emerald Consulting - provides legal practice management software solutions.
Basis of Preparation
The unaudited results for the six months ended 31 August 2008 have been prepared
in accordance with International Financial Reporting Standards (IFRS), and
comply with IAS 34 - Interim Financial Reporting. The accounting policies used
in the preparation of the interim results are consistent with those used in the
annual financial statements for the year ended 28 February 2008.
Financial Overview
- Revenue for the period increased by 28,7% to R36,4 million mainly due to
strong organic growth.
- Operating profits increased by 28,8% to R5.1m at a maintained operating margin
of 14,1% when compared to the same period last year. Despite margins being
maintained, market conditions are such that continuous downward pressure is
being applied to billable rates and upward pressure on costs are being
experienced as a result of the acute skills shortage. The fixed cost base in
the business is being managed so as to maintain margins.
- The Group achieved basic earnings of R4,0 million or 8.1 cents (2007: 7.3
cents) per share, representing an earnings growth of 47,1% year on year which
equates to 11,7% year on year on a per share basis.
- Total assets in the Group increased significantly from R21.8 million to R36.9
million which translates into a Net Asset Value per share of 58 cents (2007: 36
cents) and a Tangible Net Asset Value per share of 38 cents (2007: 14 cents).
- The group carries no long term debt and therefore remains un-geared and
continues to enjoy strong levels of liquidity.
Change statement
In accordance with change statements released on 4 June 2008 and 21 August 2008,
shareholders are advised that as a consequence of those changes, the equivalent
changes to the unaudited results of the company for the 6 months ended 31 August
2007 as released on SENS on 30 November 2007 was required. The nature of the
changes related firstly to the interpretation of IAS 33 (earnings per share)
where the weighted average number of shares for the company was recalculated to
37,976,027 shares and the second change related to the Consolidated cashflow
statement whereby the fair value of assets acquired for all business
combinations was restated to remove the effects of net assets acquired with
shares and not cash. The resultant changes in values are set out below:
Earnings per share (cents) for 31 August 2007:
For the period ended 31 August 2007 Original Amended
Weighted number of shares in issue 20 137 482 37 976 027
Diluted weighted number of shares in issue 20 137 482 37 976 027
Earnings per share (cents)
- Basic 14.1 7.3
- Diluted 14.1 7.3
- Headline 14.1 7.3
- Diluted Headline 14.1 7.3
Amended Consolidated Cashflow as at 31 August 2007: Original Amended
Variance
Net cash from Investing activities (3 690) (1 133)
(2 557)
Net cash from Financing activities 2 122 (434)
2 557
Operational Review
The Group has two persistent and parallel objectives each year. These are
firstly to achieve financial targets, and secondly to build capacity for the
next financial period. We have achieved both of these objectives for the first
half of the year. Our financial success has been underpinned by strong organic
growth with existing clients and new business opportunities with other
successful clients. We have continued to build and extend our management
capacity and invest in key individuals and processes, and are on track to meet
our financial targets for the second half of the year. We have developed a
strong recruitment and resourcing capability within the Group as we see no sign
of the current skills shortage abating in the medium term.
Corporate Activity
Whilst our primary growth to date has been organic, DTH listed on AltX during
November 2007 and raised a total of R12,5 million for the purposes of growth
through acquisition and to underpin the working capital requirements for strong
organic growth. DTH has made two minor acquisitions since listing. Although
DTH will continue to pursue an aggressive acquisition program, current economic
and market conditions have meant we have adopted a more cautious approach until
conditions improve. DTH continues to look for opportunities to expand through
acquisition, which will allow the business to diversify into related and
complementary technology and service areas.
Human Resources
We believe that the listing of the company has raised the Group`s profile as an
employer of choice, as well as improved its prospects of attracting and
retaining the best skills in the market.
Black Economic Empowerment
The Group companies are certified BEE level 4 contributors, and the Group
continues with its efforts to improve all aspects of BEE.
Market Conditions
Although market conditions for the year under have deteriorated due to the
global economic crisis DTH expects current customer demand to continue to fuel
good organic growth in all areas of the business.
Prospects
Prospects remain relatively positive in our sector, but we believe there will
continue to be slow downward pressure on billable rates, with no increase in the
number of large, new projects starting up in 2009. The Group is however well
positioned both operationally and strategically, to deliver strong organic
growth and management are confident of meeting revenue and earnings targets for
the year ending February 2009 as stated in its prospectus.
Corporate Governance
The group recognises the need to conduct its business with integrity,
transparency and equal opportunity and subscribes to the spirit of good
corporate governance as set out in the King II Report.
Board of Directors
Mr A De Klerk resigned as Group Chief Operating Officer on 5 November 2008 and
his duties have been assumed by Mr D M Hughes, a recently appointed Executive
Director.
Subsequent Events
No events material to the understanding of the report have occurred in the
period between the period-end date and the date of the report.
Dividends
Given the growth prospects and strategy of DTH, it is anticipated that earnings
generated by the group will be re-invested to fund future growth and
development. Therefore, the Board does not propose an interim dividend for the
period under review. It is the intention of the company to periodically
consider the dividend policy and to take account of prevailing circumstances and
future cash requirements in determining whether it would be appropriate to pay a
dividend in respect of a particular financial reporting period.
Additional documents
This SENS announcement in a printable format and the financial numbers in a
spreadsheet will be available for download from the DTH website (www.dth.co.za)
within 2 days.
For and on behalf of the Board
H Ratshefola C Wilkins G Fowler
Chairman Chief Executive Officer Chief Financial Officer
Johannesburg
19 November 2008
Transfer secretaries:
Link Market Services (Pty) Ltd
11 Diagonal Street, Johannesburg, 2001
Company secretary and registered office:
D M Hughes
Ground Floor, Victoria Gate South, Hyde Lane, Hyde Park, Sandton, 2199.
Directors:
H Ratshefola (Chairman)*, C Wilkins (Group CEO), G Fowler (CFO), D M Hughes, J
Mamogale*
* Non-executive directors
Designated Advisor:
PSG Capital (Proprietary) Limited
Date: 19/11/2008 14:58:30 Produced by the JSE SENS Department.
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