| Tue 26 May 2009, 7:05 | | DTH - DTH Dynamic Technology Holdings - Audited Results For The Twelve Months |
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DTH
DTH
DTH - DTH Dynamic Technology Holdings - Audited Results For The Twelve Months
Ended 28 February 2009 and dividend declaration
DTH DYNAMIC TECHNOLOGY HOLDINGS LIMITED
(Formerly Dynamic Visual Technologies Holdings Limited)
(Registration number 2004/016984/06)
Share Code: DTH
ISIN: ZAE000124681
("DTH" or "the group")
www.DTH.co.za
AUDITED RESULTS FOR THE TWELVE MONTHS ENDED 28 FEBRUARY 2009 AND DIVIDEND
DECLARATION
HIGHLIGHTS
- Revenue increased by 39,6% to R81,8 million
- Attributable earnings increased by 44,9% to R8,7 million
- Headline earnings per share increased by 24,1% to 17,5 cents
- Total assets increased by 28,8% to R43,0 million
- Tangible net asset value per share increased by 47,3% to 45,2 cents
- Cash increased to R13,8 million
CONSOLIDATED INCOME STATEMENT
for the year ended 28 FEBRUARY
2009 2008
Revenue 81 781 336 58 601 108
Cost of sales (934 185) (764 097)
Gross profit 80 847 151 57 837 011
Other income 99 194 261 113
Operating expenses (70 250 933) (49 974 920)
Operating profit 10 695 412 8 123 204
Investment revenue 1 249 907 455 332
Finance costs (57 439) (1 571)
Profit before taxation 11 887 880 8 576 965
Taxation (3 008 504) (2 409 656)
Profit for the year 8 879 376 6 167 309
Attributable to:
Equity holders of the parent 8 734 134 6 029 228
Minority Interest 145 242 138 081
Weighted number of shares in issue 49 948 231 41 946 841
Fully diluted weighted number of shares in issue 49 948 231 42 330 957
Earnings per share (cents)
- Basic 17.5 14.4
- Headline 17.5 14.1
- Diluted 17.5 14.2
- Diluted headline 17.5 14.0
Dividend per share ...3.0 -
The earnings used in the calculation of headline earnings per share reconciles
to the earnings used in the calculation of basic earnings per share as follows:
Profit attributable to the equity 8 734 134 6 029 228
holders of the parent
less: Preference shares dividends and related - -
taxes
Earnings used in the calculation of basic EPS 8 734 134 6 029 228
from continuing operations
add: Loss on disposal of equipment (13 515) 8 858
less: Profit on disposal of investment in - (108 012)
subsidiary
Headline earnings 8 720 619 5 930 074
CONDENSED CONSOLIDATED BALANCE SHEET
As at 28 February 2009 2008
ASSETS
Non-Current Assets 12 415 098 11 054 370
Property, plant and equipment 1 358 588 886 640
Goodwill 10 233 429 9 751 445
Intangible assets 526 257 280 640
Deferred tax 296 824 135 645
Current Assets 30 599 896 22 332 878
Trade and other receivables 16 848 296 10 515 194
Cash and cash equivalents 13 751 600 11 817 684
Total Assets 43 014 994 33 387 248
EQUITY AND LIABILITIES
Capital and reserves 33 658 240 25 495 734
Share capital 13 182 384 13 995 100
Reserves 167 682 71 836
Retained income 19 924 677 11 190 543
Minority interest 383 497 238 255
Current liabilities 9 356 754 7 891 514
Current tax payable 1 827 134 1 374 882
Operating lease liability 83 096 43 583
Trade and other payables 6 959 648 5 523 278
Deferred income 486 876 899 771
Dividend payable 50 000
Total Equity and Liabilities 43 014 994 33 387 248
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
for the year ended 28 February
Share
Total Based
Share Share Share Payment
Capital Premium Capital Reserves
Balance at 1 March 2007 1 375 4 254,253 4 255 628 -
Shares held by Share Trust (13 122) (2 621 896) (2 635 018) -
Share based payment - - - 71 836
Minority on acquisition
Derecognising of minority interest - - - -
Capitalization of listing - (1 444 652) (1 444 652) -
expenditure
Issue of shares on extraction 163 2 556 468 2 556 631 -
minority
Share buy-back (22 478) (3 209 083) (3 231 561) -
Capitalization of share premium 198 470 (198 470) - -
Issue of new shares 72 470 14 421 602 14 494 072 -
Profit for the year - - - -
Balance at 1 March 2008 236 878 13 758 222 13 995 100 71 836
Profit for the year
Shares held by Share Trust (1 878) (298 356) (300 234) -
Treasury shares held by (3 106) (509 376) (512 482) -
Subsidiary
Share based payment - - - 95 846
Balance at 28 February 2009 231 894 12 950 490 13 182 384 167 682
Total
attributable
to equity
Retained holders of Minority Total
income the Group interest equity
Balance at 1 March 2007 5 161 315 9 416 943 357 893 9 774 836
Shares held by Share Trust - (2 635 018) 2 635 018)
Share based payment - 71 836 71 836
Minority on acquisition - - 189 838 189 838
Derecognising of minority interest - - (447 557) (447 557)
Capitalization of listing - (1 444 652) - (1 444 652)
expenditure
Issue of shares on extraction - 2 556 631 - 2 556 631
minority
Share buy-back - (3 231 561) - 3 231 561)
Capitalization of share premium
Issue of new shares - 14 494 072 - 14 494 072
Profit for the year 6 029 228 6 029 228 138 081 6 167 309
Balance at 1 March 2008 11 190 543 25 257 479 238 255 25 495 734
Profit for the year 8 734 134 8 734 134 145 242 8 879 376
Shares held by share trust - (300 234) - (300 234)
Treasury shares held by - (512 482) - (512 482)
Subsidiary
Share based payment - 95 846 - 95 846
Balance at 28 February 2009 19 924 677 33 274 743 383 497 33 658 240
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
for the year ended 28 February
2009 2008
Cash receipts from customers 74 647 634 53 738 740
Cash paid to suppliers and employees (68 458 440) (46 831 686)
Cash generated from operations 6 189 194 6 907 054
Interest income 1 249 907 455 332
Finance costs (57 439) (1 571)
Tax paid (2 717 435) (1 863 677)
Net cash from operating activities 4 664 227 5 497 138
Net cash from investing activities (1 917 595) (2 367 581)
Purchase of property, plant and equipment (926 594) (438 494)
Proceeds on sale of property, plant and equipment 30 437 16 287
Purchase of other intangible assets (518 258) (295 605)
Acquisition of businesses (503 180) (1 649 769)
Net cash from financing activities (812 716) 6 929 469
Proceeds on share issue - 235 503
Share buy back (4 984)
Repayment of other financial liabilities - (253 535)
Receipt of / (repurchased) share premium (807 732) 6 947 501
Total cash movement for the year 1 933 916 10 059 026
Cash at the beginning of the year 11 817 684 1 758 658
Total cash at end of the year 13 751 600 11 817 684
CONDENSED SEGMENTAL ANALYSIS
for the twelve months ended 28 February
Central
2009 Product Services Operations
Turnover 9 503 766 72 277 569 -
EBITDA 1 333 990 9 873 017 218 965
Depreciation and Amortization (290 912) (435 796) (3 853)
Net interest 28 808 3 580 1 160 082
Profit before tax 1 071 886 9 440 801 1 375 194
Tax 285 158 (2 913 042) (380 620)
Profit after tax 1 357 044 6 527 759 994 574
Major Customers
Customer 1 - 10 641 480 -
Customer 2 - 10 022 942 -
Customer 3 - 9 848 872 -
Customer 4 - 7 752 484 -
Central
2008 Product Services Operations
Turnover 5 329 541 53 271 567 -
EBITDA 215 854 8 661 045 (222 785)
Depreciation and Amortization (95 282) (434 666) (963)
Net interest 9 834 162 019 281 908
Profit before tax 130 406 8 388 399 58 160
Tax (4 010) (2 405 646) -
Profit after tax 126 396 5 982 753 58 160
Major customers
Customer 1 - 7 383 976 -
Customer 2 - 11 170 571 -
Customer 3 - 11 023 679 -
Customer 4 - 4 504 903 -
OVERVIEW
Nature of Business
DTH is a group of businesses specialising in application software. Our core
focus is providing tailor-made solutions to fit the specific needs of our
clients. We typically use a blend of existing and custom built software and
components. Through our operating businesses, we offer solutions based on both
Microsoft .Net(TM) and Java(TM)development platforms and also provide specialist
skills and professional services across the entire software development
lifecycle.
The group has four operating business as follows:
DVT - custom software development and related services
Offline Digital - specialist customised content solutions
Talent Exchange - IT staffing and recruitment services
Emerald Consulting - legal industry software solutions
Basis of Preparation
The audited results for the 12 months ended 28 February 2009 have been prepared
in accordance with International Financial Reporting Standards, IAS 34 (Interim
Financial Reporting), the Listings Requirements of the JSE Limited and the
Companies Act in South Africa. The accounting policies used are consistent with
those used in the preparation of the annual financial statements for the year
ended 29 February 2008.
The results for the 12 months ended 28 February 2009 have been audited by the
group`s auditors, Greenwoods Chartered Accountants, and their unqualified audit
opinion is available for inspection at the group`s registered office.
Financial Overview
- Revenue for the period increased by 39,6% to R81,8 million due to a strong
organic growth and through the effects of a minor acquisition of the business
of Emerald Consulting.
- Operating margin decreased slightly to 13,1% (2008: 13,9%). This was due to
downward pressure on billable rates due to market conditions and the risk
mitigating strategy of increasing the ratio of contacting staff to permanent
staff, as well as continued upward pressure on salaries as a result of the
ongoing shortage of available skills in the market.
- The Group achieved basic attributable earnings of R8,7 million. This
represents year on year growth of 44,9%. The profit after tax for the year
achieved exceeded the 2009 forecast profit after tax as published in the pre-
listing prospectus (dated 29 October 2007) by 3,6%.
- Headline earnings were 17,5 cents per share, up 24,1% from the prior year.
- Total assets in the Group increased from R33,4 million to R43,0 million,
a year on year growth of 28,8%. On a per share basis Net Asset Value is
67,3 cents (2008: 51,0 cents) and Tangible Net Asset Value is 45,2 cents
(2008: 30,7 cents).
- Cash generated from operations was below expectation. The major cause was
an increase in debtors due to a combination of business growth and a general
slow-down in cash collections. The slow-down in cash collections is
symptomatic of the prevailing generally negative economic conditions.
Operational Review
We are pleased with the results achieved in a year that will be remembered for
the global financial crisis and subsequent economic turmoil and widespread
recessions. We continued to grow our business in both our existing strategic
clients as well as winning business in new clients. We also achieved an
important goal of further diversifying our corporate client base and increasing
our footprint into medium sized clients.
As a primarily services business our growth is largely dependent on increasing
our billable capacity. We reduced staff attrition and grew our capacity by
nearly 40 people during the year.
Corporate Activity
DTH made a minor acquisition of the business of Emerald Consulting on 1 October
2008. The main solution of Emerald Consulting is practice management solutions
primarily for the legal industry.
Black Economic Empowerment
DTH is committed to the principles of BEE and to continuously improving our
rating in terms of the DTI Codes of Good Conduct. The group`s subsidiaries are
currently officially rated between level 2 and level 4 contributors.
Market Conditions
We expect a general slowdown in business activity throughout 2009 due to the
prevailing negative economic situation globally and locally. This will put
downward pressure on demand for IT products and services as our target market
comes under financial pressure. We expect our trading conditions to be
characterised by longer lead times, more effort to conclude new business and
downward pressure on billable rates.
The IT sector in South Africa continues to be characterised by a shortage of
highly skilled technical and managerial staff which puts upward pressure on
salaries.
Prospects
Despite the worsening market conditions we remain confident that the group is
able to build on its solid platform, retain its large strategic clients and grow
further in the next year. Additional focus and effort will be expended on
retaining existing clients, building new relationships and pre-sales activities.
In contractual terms, flexibility on pricing will be required.
The Group continues to look for suitable acquisition opportunities that will
extend or complement its existing businesses.
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 Report.
Board of Directors
Mr A De Klerk resigned as a Director on 6 November 2008. Mr D Hughes was
appointed as an Executive Director and Company Secretary on 9 October 2008.
Mr R Fehrsen was appointed as an Independent Non Executive Director on
30 March 2009
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 this report.
Dividends
Notice is hereby given that a maiden cash dividend of 3,0 cents per share
(2008: no dividend) (`the dividend`) has been declared. Salient dates in
respect of the dividend are as follows:
Last date to trade "cum" dividend: Friday, 26 June 2009
Shares trade "ex" dividend : Monday, 29 June 2009
Record date : Friday, 3 July 2009
Payment date : 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 does not represent a change to dividend policy. The board will consider
the declaration of a dividend each year on merit taking into account the market
and business conditions and the need for capital in the business.
Annual Report
The company`s 2009 annual report, including a notice of the annual general
meeting will be posted to shareholders in due course. A further SENS
announcement providing salient information relating to the posting of the
Annual report and notice of Annual General Meeting will be published.
Additional Documents
A neatly formatted version of this announcement in PDF form and the financial
results in a spreadsheet are available for download from the Investor Section of
the DTH website (www.dth.co.za).
For and on behalf of the Board
H Ratshefola C Wilkins G Fowler
Chairman Chief Executive Officer Financial Director
26 May 2009
Transfer secretaries:
Link Market Services (Pty) Ltd
11 Diagonal Street, Johannesburg, 2001
Company secretary and registered office:
D Hughes
Ground Floor, Victoria Gate South, Hyde Lane, Sandton, 2199
Directors:
H Ratshefola (Chairman)*, C Wilkins (Group CEO), G Fowler (FD),
D Hughes, J Mamogale**, R Fehrsen**
*Non-executive director **Independent non-executive director
Designated Advisor:
PSG Capital (Proprietary) Limited
Date: 26/05/2009 07:05:02 Produced by the JSE SENS Department.
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