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ADI
ADI
ADI - Adapt It Holdings - Abridged Audited Results For The Year Ended 28
February 2009, Final Dividend Declaration, Notice Of Annual General Meeting
And Posting Of The Annual Report
ADAPT IT HOLDINGS LIMITED
(Formerly known as InfoWave Holdings Limited)
(Incorporated in the Republic of South Africa)
(Registration number 1998/017276/06)
Share code: ADI & ISIN Code: ZAE000113163
("AdaptIT" or "the Company" or "the Group")
ABRIDGED AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2009, FINAL DIVIDEND
DECLARATION, NOTICE OF ANNUAL GENERAL MEETING AND POSTING OF THE ANNUAL REPORT
- 33% INCREASE IN TURNOVER
- 30% INCREASE IN PROFIT FROM OPERATIONS
- 28% INCREASE IN PROFIT FOR THE YEAR ATTRIBUTABLE TO EQUITY SHAREHOLDERS
- 18% INCREASE IN EARNINGS PER SHARE
Income statements for the year ended 28 February 2009
GROUP GROUP COMPANY COMPANY
2009 2008 2009 2008
R R R R
Services
rendered 74 865 150 56 439 041 2 363 236 832 902
Interest income 2 632 530 1 588 285 400 637 98 429
Dividends
received - - 4 200 000 4 000 000
REVENUE 77 497 680 58 027 326 6 963 873 4 931 331
TURNOVER 74 865 150 56 439 041 2 363 236 832 902
Cost of sales (36 199 769) (27 136 893) (181 829) -
Gross profit 38 665 381 29 302 148 2 181 407 832 902
Administrative,
selling and
other costs (27 592 822) (20 784 514) (542 310) (796 047)
Dividends
received - - 4 200 000 4 000 000
Profit from
operations
(before
interest) 11 072 559 8 517 634 5 839 097 4 036 855
Interest income 2 632 530 1 588 285 400 637 98 429
Preference
dividend
received - 366 894 - 366 894
Loss on
sale/revaluation
of listed
preference
shares - (217 102) - (217 102)
Finance costs (14 444) (2 839) - (4)
Profit from
associate 137 278 286 527 - -
Profit before
taxation 13 827 923 10 539 399 6 239 734 4 285 072
Taxation (3 999 312) (3 213 836) (1 069 334) (688 010)
Profit for the
year after
taxation 9 828 611 7 325 563 5 170 400 3 597 062
Attributable to:
Equity
shareholders 9 077 243 7 101 848 5 170 400 3 597 062
Minority
interests 751 368 223 715 - -
9 828 611 7 325 563 5 170 400 3 597 062
Earnings per
share (cents) 9,44 7,97
Fully diluted
earnings per
share (cents) 9,43 7,96
Balance sheets as at 28 February 2009
GROUP GROUP COMPANY COMPANY
2009 2008 2009 2008
R R R R
ASSETS
Non-current assets 13 525 877 14 152 697 16 031 593 16 031 593
Property and
equipment 1 974 368 2 164 435 - -
Intangible assets 347 470 754 846 - -
Interest in
subsidiaries and
share trust - - 16 031 593 16 031 593
Investment in
associate company 137 308 - - -
Goodwill 10 407 854 10 407 854 - -
Deferred taxation
asset 658 877 825 562 - -
Current assets 28 591 229 21 352 691 8 383 266 3 140 851
Accounts receivable 14 035 153 13 432 836 604 524 22 550
Cash resources 14 556 076 7 919 855 7 778 742 3 118 301
Total assets 42 117 106 35 505 388 24 414 859 19 172 444
EQUITY AND
LIABILITIES
Issued capital 7 937 9 745 9 745 9 745
Share premium 7 187 875 8 112 296 8 112 296 8 112 296
Share-based payment
reserve 802 679 672 384 - -
Accumulated profit 23 345 179 18 585 346 2 224 153 1 371 163
Equity attributable
to ordinary
shareholders 31 343 670 27 379 771 10 346 194 9 493 204
Minority interest 1 415 355 663 987 - -
Total equity 32 759 025 28 043 758 10 346 194 9 493 204
Current liabilities 9 358 081 7 461 630 14 068 665 9 679 240
Accounts payable 6 825 210 4 959 137 485 053 181 528
Provisions 1 596 754 1 322 747 - -
Loans from
subsidiaries - - 12 959 243 9 301 437
Taxation payable 936 117 1 179 746 624 369 196 275
Total equity and
liabilities 42 117 106 35 505 388 24 414 859 19 172 444
Statements of changes in equity for the year ended 28 February 2009
SHARE-
ACCU- BASED
SHARE SHARE MULATED PAYMENT
CAPITAL PREMIUM PROFIT RESERVE
R R R R
GROUP
Balance at
28 February 2007 8 621 261 867 15 194 386 477 832
Profit for the year 7 101 848
Total recognised income
and expense 8 621 261 867 22 296 234 477 832
Shares issued during the
year 1 124 7 850 429
Recognition of
share-based payment 194 552
Dividend paid (3 710 888)
Balance at 29 February
2008 9 745 8 112 296 18 585 346 672 384
Profit for the year 9 077 243
Total recognised income
and expense 9 745 8 112 296 27 662 589 672 384
Treasury shares
repurchased
during the year (1 808) (924 421)
Recognition of
share-based payment 130 295
Dividend paid (4 317 410)
Balance at 28 February
2009 7 937 7 187 875 23 345 179 802 679
ATTRI-
BUTABLE
TO EQUITY MINORITY
HOLDERS INTEREST TOTAL
R R R
GROUP
Balance at 28 February 2007 15 942 706 440 340 16 383 046
Profit for the year 7 101 848 223 715 7 325 563
Total recognised income
and expense 23 044 554 664 055 23 708 609
Shares issued during the year 7 851 553 7 851 553
Shares repurchased during the year - (68) (68)
Recognition of share-based payment 194 552 194 552
Dividend paid (3 710 888) (3 710 888)
Balance at 29 February 2008 27 379 771 663 987 28 043 758
Profit for the year 9 077 243 751 368 9 828 611
Total recognised income
and expense 36 457 014 1 415 355 37 872 369
Treasury shares repurchased
during the year (926 229) (926 229)
Recognition of share-based payment 130 295 130 295
Dividend paid (4 317 410) (4 317 410)
Balance at 28 February 2009 31 343 670 1 415 355 32 759 025
ACCU-
SHARE SHARE MULATED
CAPITAL PREMIUM PROFIT TOTAL
R R R R
COMPANY
Balance at 28
February 2007 8 621 261 867 1 484 989 1 755 477
Profit for the year 3 597 062 3 597 062
Total recognised
income and expense 8 621 261 867 5 082 051 5 352 539
Shares issued during
the year 1 124 7 850 429 7 851 553
Dividend paid (3 710 888) (3 710 888)
Balance at 29
February 2008 9 745 8 112 296 1 371 163 9 493 204
Profit for the year 5 170 400 5 170 400
Total recognised
income and expense 9 745 8 112 296 6 541 563 14 663 604
Dividend paid (4 317 410) (4 317 410)
Balance at 28
February 2009 9 745 8 112 296 2 224 153 10 346 194
Cash flow statements for the year ended 28 February 2009
GROUP GROUP COMPANY COMPANY
2009 2008 2009 2008
R R R R
CASH FLOWS FROM
OPERATING
ACTIVITIES
Profit from
operations
(before
interest and
dividends) 11 072 559 8 517 634 1 639 097 36 854
Adjustment for:
Provision for
leave pay 274 007 359 898 - -
Impairment loss 20 086 - 20 086 193 564
Non-cash flow
items 9 154 - - -
Share-based
payment expense 130 295 194 552 - -
Loss on sale of
property and
equipment 1 016 - - -
Depreciation
and
amortisation 1 799 481 1 530 328 - -
Cash generated
from
operations,
before working
capital changes 13 306 598 10 602 412 1 659 183 230 418
Working capital
changes
Increase in
receivables (602 317) (3 548 714) (581 974) (16 425)
Increase in
payables 1 866 076 2 152 585 303 524 102 921
Cash generated
from operations 14 570 357 9 206 283 1 380 733 316 914
Taxation paid (3 948 135) (2 923 175) (641 240) (593 925)
Interest income 2 632 530 1 588 285 400 637 98 429
Finance costs (14 444) (2 839) - (4)
Dividend
received from
subsidiary - - 4 200 000 4 000 000
Preference
dividend
received - 366 894 - 366 894
Dividend paid
to shareholders (4 317 410) (3 710 888) (4 317 410) (3 710 888)
Net cash inflow
from operating
activities 8 922 898 4 524 560 1 022 720 477 420
CASH FLOWS FROM
INVESTING
ACTIVITIES
Acquisition of
property and
equipment on
expansion (1 243 952) (1 253 778) - -
Investment in
intangible
assets - (1 806) - -
Proceeds on
disposal of
property and
equipment 40 898 - - -
Proceeds on
sale of
preference
shares - 3 443 180 - 3 443 180
(Increase)/decrease
in investment
in associate (137 308) 335 338 - -
Acquisition of
subsidiary (20 086) (4 315 849) (20 086) (4 315 849)
Increase in
interest in
subsidiaries - - 3 657 807 3 374 507
Net cash
outflow from
investing
activities (1 360 448) (1 792 917) 3 637 721 2 501 838
CASH FLOWS FROM
FINANCING
ACTIVITIES
Repurchase of
company`s
shares (926 229) - - -
Proceeds of
share issues - 124 075 - 124 075
Net cash
(outflow)/inflow
from financing
activities (926 229) 124 075 - 124 075
Net increase in
cash resources 6 636 221 2 855 718 4 660 441 3 103 333
Cash resources
at beginning of
year 7 919 855 3 871 580 3 118 301 14 968
Cash resources
on acquisition
of subsidiaries - 1 192 557 - -
Cash resources
at end of year 14 556 076 7 919 855 7 778 742 3 118 301
Directors` report to the stakeholders
for the year ended 28 February 2009
FINANCIAL RESULTS
Turnover grew by 33% over the prior year to R75 million. Operating profit grew
by 30% with profit attributable to ordinary shareholders growing by 28% to
R9,1 million (R7,1 million). Earnings per share grew by 18% to 9,44 (7,97)
cents per share. The percentage growth in earnings per share was lower than the
percentage growth in earnings attributable to ordinary shareholders due to the
shares issued in respect of the Adapt-IT (Pty) Limited transaction in November
2007.
HEADLINE EARNINGS PER SHARE
2009 2008
Reconciliation between earnings and headline
Earnings attributable to ordinary shareholders 9 077 243 7 101 848
Add loss on sale of property and equipment 1 016 -
Add impairment on investment 20 086 -
Add loss on sale of investment in listed
preference shares - 181 220
Headline earnings 9 098 345 7 283 068
Headline earnings per share (cents) 9,46 8,17
ACCOUNTING POLICIES
The abridged group and company annual financial statements are prepared in
accordance with International Accounting Standard 34 (IAS 34) and the JSE
Limited Listings Requirements. The abridged group and company annual financial
statements for the year ended 28 February 2009 incorporate extracts of the
group and company`s unqualified audited financial statements, and are prepared
in accordance with, International Financial Reporting Standards ("IFRS"), the
Listing Requirements for the JSE Limited and the Companies Act of South
Africa. The accounting policies applied are consistent with those of the
previous financial year except for the accounting standards and
interpretations which became effective during the current financial year
which do not have a material impact on the financial position or performance
of the group and company. For a better understanding of the Group`s financial
position and results of operations, these abridged financial statements must
be read in conjunction with the Group`s audited annual financial statements
for the year ended 28 February 2009 which include all disclosures required by
IFRS.
AUDIT REPORT
The annual financial statements and the abridged financial statement for
the year ended 28 February 2009 have been audited by Ernst & Young Inc.
and their unqualified audit report is available for inspection at the
Company`s registered office.
DIVIDENDS
Ordinary dividend number 6 of 4,43 (4,29) cents per share was paid to
shareholders on 17 June 2008.
The board has decided to increase the dividend cover in order to retain a
greater proportion of accumulated profit for future growth initiatives.
Accordingly, the company has declared a seventh annual ordinary dividend of
1,86 cents per share which will be payable to shareholders on 6 July 2009. This
represents a dividend cover of five times. In line with the group`s strategy
to grow by means of acquisitions, the board has decided to reduce the dividend
to take advantage of the acquisition opportunities that may arise in the
future.
DIRECTORS` REPORT AND APPROVAL OF THE ANNUAL FINANCIAL STATEMENTS
Responsibility for annual financial statements
The directors are responsible for the preparation, integrity and objectivity of
annual financial statements and other information contained in this annual
report. The annual financial statements have been prepared in accordance with
International Financial Reporting Standards, and have been reported on by the
company`s auditors.
In discharging this responsibility, the group maintains suitable internal
control systems and adequate accounting records to provide reasonable assurance
that assets are safeguarded and that transactions are executed and recorded in
accordance with group policies. Appropriate accounting policies supported by
reasonable and prudent judgements have been applied consistently with those of
the prior year.
To the best of their knowledge and belief, based on the above, the directors
are satisfied that no material breakdown in the operation of the systems of
internal control has occurred during the year under review, and the directors
believe that the business will be a going concern for the year ahead. An
effective risk management system has been maintained. The Code of Corporate
Practices and Conduct has been adhered to.
POST BALANCE SHEET EVENTS
There are no material events between the balance sheet date and the date of
this report.
SHARE CAPITAL
1 808 088 treasury shares were held by the group at year-end, resulting in a
reduction of issued share capital in the current year.
INVESTMENT IN SUBSIDIARIES AND ASSOCIATES
Details of the subsidiaries and associates appear in the notes to the
financial statements.
Aggregate profit before tax from subsidiaries is R11 650 910 (2008: R10 478
043).
STRATEGY
The strategy of Adapt IT Holdings Limited is to focus on the health, organic
growth and diversification of the existing lines of business in line with our
stated objective of continuously improving our service levels to our clients.
We continue to actively sell our existing services and products to new markets
and add new offerings to our existing clients to ensure sustainable organic
growth. Further, Adapt IT Holdings Limited continues to seek new acquisitions
in support of its diversification strategy.
OPERATIONS
We have focused on improving the efficiency of our merged operations through
the integration project which is now complete. We have maintained customer
focus through dedicated divisions and teams. We prioritise continuous
improvement in service delivery, quality and innovation.
BOARD COMPOSITION
During the year there were several board changes. Paris Aposporis resigned
after some 10 years serving on the board as a non-executive director since
listing. We would like to sincerely thank him for his invaluable contribution
to Adapt IT Holdings during his tenure. He was replaced by Bongiwe Ntuli, a
chartered accountant with international commercial experience, whom we welcome
to the board. Bev Carrilho, financial director resigned from the board on 1
March 2009 to pursue a career in the education sector after serving the group
for four years. We thank her for her valuable contribution and wish her every
success.
Siboniso Shabalala was appointed as financial director on 1 April 2009. He is
an experienced financial director, having worked in both the banking and
utilities sectors. We welcome him to the group.
BLACK ECONOMIC EMPOWERMENT
Adapt IT Holdings Limited is firmly committed to genuine broad-based
transformation across all aspects of the Department of Trade and Industry`s
Codes of Good Practice. We obtained an independent broad-based rating from
Empowerdex, in which we were rated as a Level 3 contributor to broad-based
black economic empowerment, which allows our customers to recognise 110% of
their spend with us for their BEE procurement measurement purposes.
We are rated as the seventh most empowered company on the JSE according to the
Financial Mail`s Top Empowerment Companies survey in April 2009. We also won
the Alec Rogoff BBBEE Empowerment Award of the Durban Chamber of Commerce and
Industry in the corporate category.
PROSPECTS
Despite the current economic downturn the prospects of the group for the year
ahead are good. We will focus on adding value to our existing clients by
broadening our service and product offerings to them. We will selectively
expand into new markets where we have competitive advantage and the required
competencies to succeed.
APPRECIATION
We express our appreciation to our customers for the success of our
longstanding relationships with them.
We remain fervently committed to them. We also pay tribute to all of our
employees for their dedication and hard work. We thank them for their spirit of
determination to succeed in delivery to our customers.
RP Collis S Shabalala
Non-executive chairman Chief executive officer
6 May 2009
ORDINARY DIVIDENDS NUMBER 7
The board has set a policy of considering a dividend once annually after the
year-end. The board has declared a dividend on a dividend cover ratio of 5
times as the group will have sufficient working capital to meet its
requirements after the dividend payment. Notice is hereby given that a cash
dividend of 1.86 cents per share ("the dividend") has been declared, payable
to shareholders recorded in the books of the company at close of business on
Friday, 3 July 2009.
The salient dates relating to the cash dividend are as follows:
Last day to trade cum Friday, 26 June 2009
Shares commence trading ex dividend Monday, 29 June 2009
Record date Friday, 3 July 2009
Payment of the dividend Monday, 6 July 2009
Share certificates may not be dematerialised or rematerialised during the
period Monday, 29 June 2009 to Friday, 3 July 2009, both days inclusive. This
dividend, having been declared after the year-end, has not been provided for in
the financial statements.
NOTICE OF THE ANNUAL GENERAL MEETING AND POSTING OF ANNUAL REPORT
The annual report will be mailed to shareholders on 06 May 2009.
Notice is hereby given that the annual general meeting of Adapt IT will be
held at Adapt IT, Gleneagles Park, 10 Flanders Drive, Mt Edgecombe on
19 June 2009 to transact the business as stated in the annual general
meeting notice forming part of the annual financial statements.
Registered office
Gleneagles Park
10 Flanders Drive
Mount Edgecombe
4300
Postal address
PO Box 2225
MECC
Mount Edgecombe
4301
Transfer secretaries
Computershare Investor Services (Pty) Limited
PO Box 61051
Marshalltown
2107
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
Sasfin Place
13 - 15 Scott Street
Waverley
2090
Date: 06/05/2009 09:00:02 Produced by the JSE SENS Department.
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