| Mon 16 Mar 2009, 16:35 | | SDH - SecureData Holdings - Unaudited results for the six months ended 31 |
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SDH
SDH
SDH - SecureData Holdings - Unaudited results for the six months ended 31
January 2009
SecureData Holdings Limited
Incorporated in the Republic of South Africa
(Registration number 1998/010017/06)
Share code: SDH & ISIN: ZAE000096368
("SecureData" or "the group")
Unaudited results for the six months ended 31 January 2009
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 31 January 2009
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 January 31 January 31 July
2009 2008 2008
R`000 R`000 R`000
Revenue 232 087 112 214 271 347
Earnings before interest, 19 260 21 712 36 456
taxation, depreciation and
amortisation (EBITDA)
Depreciation and amortisation (11 121) (946) (8 732)
- Depreciation (2 187) (946) (2 651)
- Amortisation (8 934) - (6 081)
Profit from operations 8 139 20 766 27 724
Interest received 769 378 1 289
Finance costs (7 458) (1 910) (13 420)
- Interest paid (8 898) (1 910) (5 376)
- Foreign exchange 1 440 - (8 044)
gains/(losses) on loan to
subsidiary
Profit before taxation 1 450 19 234 15 593
Taxation (918) (5 327) (6 654)
Profit after taxation 532 13 907 8 939
Profit attributable to minority 1 137 - (240)
shareholders
Profit for the period 1 669 13 907 8 699
attributable to equity holders
of the group
Earnings per share (EPS) 0,7 8,7 5,0
(cents)
Net asset value per share 69,3 40,0 66,7
(cents)
Weighted average numbers of 227 306 159 749 173 219
shares on which - earnings per
share is based (`000)
Number of ordinary shares in 242 102 180 102 242 102
issue (`000)
Reconciliation between earnings
and headline earnings
Profit for the period 1 669 13 907 8 699
attributable to ordinary
shareholders
Profit on disposal of assets (30) - -
Headline earnings 1 639 13 907 8 699
Headline earnings per share 0,7 8,7 5,0
(cents)
Reconciliation between earnings
and adjusted earnings
- Profit for the period 1 669 13 907 8 699
attributable to ordinary
shareholders
- Amortisation (after taxation) 6 358 - 4 354
- Foreign exchange (gains) / (1 037) - 5 791
losses on group loans (after
taxation)
Adjusted earnings 6 990 13 907 18 844
Adjusted earnings per share 3,1 8,7 10,9
(cents)
CONDENSED CONSOLIDATED BALANCE SHEET
at 31 January 2009
Unaudited Unaudited Audited at
at at
31 January 31 January 31 July
2009 2008 2008
R`000 R`000 R`000
ASSETS
Non-current assets 287 362 59 393 291 630
Property, plant and equipment 7 627 4 674 7 495
Goodwill 122 159 51 353 120 975
Intangible assets 118 648 - 125 587
Deferred taxation 38 928 3 366 37 573
Current assets 133 712 89 963 131 586
Inventories 2 896 7 984 6 117
Trade and other receivables 89 123 60 231 83 236
Taxation 3 591 - 723
Cash and cash equivalents 38 102 21 748 41 510
Total assets 421 074 149 356 423 216
EQUITY AND LIABILITIES
Equity 167 712 63 987 161 617
Share capital 242 180 242
Share premium 115 234 12 039 115 234
Treasury share reserve (21 377) (30 124) (23 586)
Share-based payment equity 2 882 1 265 2 482
Foreign exchange conversion (6 357) - (8 174)
reserve
Retained earnings 77 088 80 627 75 419
Outside shareholders` interest 20 633 - 21 770
Non-current liabilities 118 328 29 076 127 328
Long-term loans 84 968 29 076 92 167
Deferred taxation 33 360 - 35 161
Current liabilities 114 401 56 293 112 501
Trade and other payables 97 773 47 375 97 401
Owing to vendors - 5 525 -
Taxation 2 938 3 393 1 907
Short-term loans 13 690 - 13 193
Total equity and liabilities 421 074 149 356 423 216
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31 January 2009
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 January 31 January 31 July
2009 2008 2008
R`000 R`000 R`000
Cash flow from operating 15 803 11 060 37 735
activities
Profit before taxation 1 450 19 234 15 593
Adjustments not affecting the 18 600 3 191 23 450
flow of funds
Operating income before working 20 050 22 425 39 043
capital changes
Increase/(Decrease) in working (2 294) (2 628) 24 181
capital
Cash generated from operations 17 756 19 797 63 224
(1 953) (8 737) (25 489)
Finance income 769 378 1 289
Finance costs (413) (1 910) (13 420)
Taxation paid (2 309) (7 205) (13 358)
Cash flow from investing (5 960) (39 206) (202 555)
activities
Cash flow from financing (13 251) 27 353 183 789
activities
Proceeds from issue of shares - - 105 406
Share issue expenses - - (2 149)
Own shares acquired by - - (379)
subsidiary
Own shares sold by subsidiary 2 209 - 6 980
Loans raised/(repaid) (15 460) 27 353 73 931
Increase/(Decrease) in cash (3 408) (793) 18 969
equivalents
Cash and cash equivalents at 41 510 22 541 22 541
beginning of the period
Cash and cash equivalents at 38 102 21 748 41 510
end of the period
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 January 2009
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 January 31 January 31 July
2009 2008 2008
R`000 R`000 R`000
Share capital 242 180 242
Balance at beginning of the 242 180 180
period
Issued during the period - - 62
Share premium 115 234 12 039 115 234
Balance at beginning of the 115 234 12 039 12 039
period
Issued during the period - - 105 344
Share issue expenses - - (2 149)
Treasury share reserve (21 377) (30 124) (23 586)
Balance at beginning of the (23 586) (30 187) (30 187)
period
Own shares acquired by - - (411)
subsidiary
Own shares sold by subsidiary 2 209 63 7 012
Share-based payment equity 2 882 1 265 2 482
Balance at beginning of the 2 482 615 615
period
Share-based payment 400 650 1 867
transactions during the period
Foreign exchange conversion (6 357) - (8 174)
reserve
Balance at beginning of the (8 174) - -
period
Foreign exchange movements 1 817 - (8 174)
during the period
Retained earnings 77 088 80 627 75 419
Balance at beginning of the 75 419 66 720 66 720
period
Profit for the period 1 669 13 907 8 699
Dividends paid - - -
Total capital and reserves 167 712 63 987 161 617
COMMENTARY
GENERAL REVIEW
Although SecureData continued to make significant progress toward achieving
its vision of becoming a significant provider of Information Risk Management
(IRM) solutions and services in all its geographical areas of operation, the
period under review was marred by continuing earnings weakness in the
SecureData Africa division and underperformance by the operations in the
United Kingdom (UK).
Group revenue increased by 107% to R232,1 million implying organic growth,
excluding MIS-CDS, of 27% to R142,8 million in the South African operations
over the prior half year. Group EBITDA declined 11% to R19,3 million over the
prior half year, and net borrowings at 31 January 2009 stood at R60,6
million, down from R63,9 million at the prior year end.
The Rand weakened in the six months to 31 January 2009 relative to Pound
Sterling and the group achieved an exchange profit of R1,4 million on its
intra group loans. The amortisation of intangible assets of all acquired
companies resulted in a charge during the period of R8,9 million. The
combined negative effect of these non-cash, non-operational items on EPS is
2,4 cents. An `adjusted EPS` calculation that ignores these non-cash items
but includes cash expenses such as interest results in an `adjusted EPS` of
3,1 cents per share.
Working capital management improved significantly with inventories halving
from R6,1 million to R2,9 million and debtors days reducing to 61 days from
73 days at the prior year end. Management continues to place particular
emphasis on working capital management.
OPERATIONAL AND SEGMENTAL REVIEW
SecureData operates subsidiaries in three major groupings:
SecureData Africa
6 months to 6 months to 12 months to
31 January 31 January 31 July
2009 2008 2008
R`000 R`000 R`000
Revenue 131 966 101 094 221 941
EBITDA 10 005 17 055 24 320
EBITDA margin (%) 7,6 16,9 11,0
SecureData Africa markets and distributes category leading IRM products in
South Africa and the rest of the continent.
As indicated previously, despite a consistent prior record of earnings and
revenue growth, SecureData Africa saw a decline in margins during the latter
part of the 2008 financial year. The decline was primarily attributable to a
less than optimum product mix and an increase in operating costs. During the
period under review the company took significant steps to redress this under
performance including a senior management restructure, the appointment of
Tony Nutter as Managing Director, a detailed analysis of operating expenses
and a complete product portfolio review. The effect of these changes was
beginning to be realised during the reporting period.
MIS-CDS
6 months to 2 months to
31 January 31 July
2009 2008
R`000 R`000
Revenue 89 269 28 857
EBITDA 5 288 5 335
EBITDA margin (%) 5,9 18,5
MIS-CDS is one of the largest and longest established independent information
security solution providers in the UK.
The macro economic environment in which MIS-CDS trades deteriorated
significantly in 2008 and the outlook for the economy remains uncertain.
Although the IRM market has historically proved to be resilient to economic
cycles, the scale of this downturn has limited the opportunities for growth.
MIS-CDS recorded lower than initially anticipated revenues, which had a
significant impact on margins due to fixed costs. As a result overhead costs
had been cut during the period under review.
SensePost
6 months to 6 months to 12 months to
31 January 31 January 31 July
2009 2008 2008
R`000 R`000 R`000
Revenue 10 851 11 121 20 549
EBITDA 3 967 4 657 6 801
EBITDA margin (%) 36,6 41,9 33,1
SensePost provides independent information security assessment services.
Based in South Africa, the company is a recognised leader in this niche
market and boasts a blue-chip client base spanning five continents.
SensePost posted revenue of R10,9 million with a pleasing 36,6% EBITDA margin
reflecting the specialist, high value nature of the company`s service
offering. Approximately a quarter of SensePost revenues were generated
outside South Africa and we have begun to use our UK presence to increase
SensePost offshore revenues.
STRATEGIC REVIEW
The group continues to gain market share in the markets in which it trades,
and has a significant IRM presence in the Europe/Africa region. The group
continues to be cash generative, plans to restore its operating margins are
being implemented, and working capital management has improved.
The IRM market has historically proved to be quite resilient during downturns
in the economic cycle and although it remains difficult to predict to what
extent current financial market turmoil will impact buyer activity, the board
of directors believes the group is well positioned to take advantage of
attractive opportunities within the IRM sector well into the future.
SUBSEQUENT EVENTS
The board of directors is not aware of any material matters or circumstances
arising since the end of the interim period and up to the date of this
report.
BASIS OF PREPARATION
These condensed interim consolidated financial statements have been prepared
in accordance with the recognition and measurement requirements of
International Financial Reporting Standards and the presentation and
disclosure requirements of IAS 34 - Interim Financial Reporting, the
Companies Act, 1973 (Act 61 of 1973), as amended, and with the Listings
Requirements of the JSE Limited. The accounting policies applied in the
preparation of these condensed financial statements conform with the
requirements of International Financial Reporting Standards, and are
consistent with those applied in the annual financial statements for the year
ended 31 July 2008. These interim financial statements have not been audited
or reviewed by the group`s auditors.
Directorate
Mr B Parker resigned from the group and the board of directors on 10 February
2009.
For and on behalf of the board
P Sneddon DTK Brazier
Chairman Chief Executive Officer
16 March 2009
Directors:
P Sneddon* (Chairman), DTK Brazier (Chief Executive Officer),
JG du Toit (Financial Director), TN Mali*, YT Moerane*,
S Murray+, R Pretorius+
*Independent non-executive director
+Non-executive director
Company secretary:
K Rossam (email: krossam@telkomsa.net)
Registered office:
Medscheme Building South
10 Muswell Road South, Bryanston, 2021.
(PO Box 4673, Rivonia, 2128)
Transfer secretaries:
Computershare Investor Services (Proprietary) Limited
(Registration number 2004/003647/07)
70 Marshall Street, Johannesburg, 2001.
(PO Box 61051, Marshalltown, 2107)
Sponsors:
Merchantec (Proprietary) Limited
www.securedataholdings.com
Date: 16/03/2009 16:35:02 Produced by the JSE SENS Department.
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