| Thu 4 Jun 2009, 14:08 | | TCS - Total Client Services Limited - Reviewed condensed consolidated results |
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TCS
TCS
TCS - Total Client Services Limited - Reviewed condensed consolidated results
for the year ended 28 February 2009
Total Client Services Limited
Incorporated in the Republic of South Africa
(Registration number 1998/025018/06)
Share code: TCS ISIN: ZAE000116208
("TCS" or "the group" or "the company")
REVIEWED CONDENSED CONSOLIDATED RESULTS FOR THE YEAR ENDED 28 FEBRUARY
2009
REVIEWED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2009
CONDENSED CONSOLIDATED INCOME STATEMENT
Reviewed Audited
year ended year ended
28 February 29 February
2009 2008
% R R
change
Gross Revenue (11.6) 99 771 049 112 862 126
Operating profit before (3.7) 12 998 728 13 502 287
interest and taxation
Net interest paid (4 546 630) (1 520 335)
Profit before taxation (29.5) 8 452 098 11 981 952
Taxation (3 835 762) (10 398
186)
Profit after tax 191.5 4 616 336 1 583 766
Attributable to:
Equity holders of the company 4 616 336 (1 256 252)
Minority interests - 2 840 018
Reconciliation of earnings per
ordinary share to headline
earnings per ordinary share
Attributable earnings/(loss) 4 616 336 (1 256 252)
Adjusted for:
Surplus on disposal of 111 964 (53 253)
property, plant and equipment
Headline earnings/(loss) for 461.1 4 728 300 (1 309 505)
the year
Earnings/(Loss) per ordinary 421.6 1.19 (0.37)
share attributable to the
equity holders of the company
(cents)
Weighted average number of 389 469 130 341 538 211
ordinary shares in issue
Headline earnings per ordinary 418.4
share (cents) 1.21 (0.38)
CONDENSED CONSOLIDATED BALANCE SHEET
Reviewed Audited year
year ended ended
28 February 29 February
2009 2008
R R
ASSETS
Non-current assets 34 302 244 40 493 275
Current assets 44 735 757 39 615
341
TOTAL ASSETS 79 038 001 80 108
616
EQUITY AND LIABILITIES
Capital and reserves 23 142 264 17 631
833
Non-current liabilities 27 441 582 29 331 510
(interest bearing)
Deferred taxation 4 075 281 5 053 169
Current liabilities 24 378 874 28 092 104
TOTAL EQUITY AND 79 038 001 80 108
LIABILITIES 616
Total number of ordinary 390 134 690 383 569 031
shares in issue at year end
Net asset value per 5.93 4.60
ordinary share (cents)
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Reviewedyear Auditedyear
ended ended
28 February 2009 29 February
2008
R R
Cash flows from operating activities 25 865 420 11 121 679
Cash flows from investing activities (2 074 367) (7 083 477)
Cash flows from financing activities (10 713 143) (5 812 007)
Net movement in cash and cash 13 077 910 (1 773 805)
equivalents
Cash and cash equivalents at the 3 017 737 4 791 542
beginning of the year
Cash and cash equivalents at the end 16 095 647 3 017 737
of the year
STATEMENT OF CHANGES IN EQUITY
Shar Share BEE Retained Minorit Total
e premium reserve income y
capi interes
tal t
R R R R R R
Balance as at 1 100 - - 20 570 4 833 25 404
March 2007: 840 848 788
Restated
Net - (1 059 - - - (1 059
income/(expense) 500) 500)
recognised
directly in
equity
Minority interest - - - - 1 146 1 146
buy out 134 134
Share buyback (22) - (25 999 - - (26 000
979) 001)
Share issue 38 18 441 16 076 - - 34 556
279 785 582 646
Profit for the - - - (1 256 2 840 1 583
year 252) 018 766
Dividend paid - - - (9 180 (8 820 (18 000
000) 000) 000)
Balance as at 29 38 17 382 (9 923 10 134 - 17 631
February 2008 357 285 397) 588 833
Share issue costs - ( 1 621 - - - (1 621
written off 480) 480)
against share
premium
Profit for the - - - 4 616 - 4 616
year 336 336
Issue of shares 601 2 514 974 - - - 2 515
575
Balance as at 28 38 18 275 (9 923 14 750 - 23 142
February 2009 958 779 397) 924 264
CONDENSED SEGMENT REPORT FOR THE GROUP
Cape Town Other Total
R R R
2009
Total revenue 32 563 99 771
67 207 549 500 049
Total profit/(loss) before tax 35 975 690 (27 523 8
for reportable segments 592) 452 098
2008
Total revenue 74 996 649 37 865 477 112 862 126
Total profit/(loss) before tax 39 226 950 (27 244 11 981 952
for reportable segments 998)
OPERATIONAL PERFORMANCE
The New Business Development ("NBD") unit, which was established prior to the
listing of TCS on the AltX on 7 April 2008, has ensured that the company`s
profile and delivery capabilities are consistently being promoted. The success
of the NBD unit is evidenced in the shortlisting of TCS for 23 of the tenders
submitted by TCS. However, as a result of the changes in the political landscape
and continued downward pressures in the economy during the financial period
under review, only a few of the tenders have been adjudicated, thus impacting on
the company`s growth. Nonetheless, the post election period has already
reflected positive results in TCS being awarded two contracts/tenders. TCS
places a high emphasis on retaining its existing clients and increasing income
to enhance the sustainability of the company.
FINANCIAL PERFORMANCE
Revenue declined by 11.6% from the previous corresponding financial year. The
decline is due to pressures on disposable household income, interest rates and
rising inflation, which have resulted in reduced timeous payments of outstanding
traffic fines by the public.
Strict controls were put into place to reduce expenses, which have resulted in
the operating profit declining by only 3.7% from the previous corresponding
period.
Headline earnings per share has increased by 418.4% to 1.21 cents per share and
earnings per share has increased by 421.6% to 1.19 cents per share from the
previous corresponding period.
A strong focus on cash generation and effective working capital management
resulted in a R13 077 910 increase in the year end bank balance from R3 017 737
at the end of the previous corresponding period to R16 095 647 at the end of the
current financial year.
The following material events and transactions had a negative impact on the
results for the year:
Legal settlement with a former consultant of TCS R4 000 000
Legal settlement with a previous shareholder of TCS R911 426
- Impairment of related party loan R1 948 977
PROSPECTS AND FUTURE PERFORMANCE
Since the start of the 2010 financial year the group`s strategy has been to
ensure that the loss of the City of Cape Town ("COCT") contract is marginalised.
We are confident that this objective is achievable in the short to medium term
future as TCS plans to obtain new tenders from other municipalities and to focus
on the prospects set out below.
The new Administration Adjudication of Road Traffic Offences Project ("AARTO")
is expected to be implemented in the 2009/2010 period. It is anticipated that
AARTO will enhance the company`s revenue and growth prospects. TCS has been
involved in the project definition planning phases, however, to date the scope
and deliverable of the product has not yet been finalised. TCS has aligned its
business strategy, products and services in accordance with the requirements of
AARTO.
As part of a strong international consortium lead by Inter Toll SA, TCS has been
shortlisted in the Gauteng Open Road Tolling tender. In addition, TCS has also
formed an alliance and entered into a co-operation agreement with Gijima-AST
Group Limited with the objective of partnering on certain business projects, the
first being the National Drivers Licence Tender, which closed in April 2009.
SEGMENT REPORTING
The company elected to early-adopt IFRS 8 together with the IASB IFRS 8 annual
improvement standard. This new standard requires a `management approach` under
which segments are identified and are reported on the same basis as is used
internally for evaluating operating segment performance and deciding how to
allocate resources to operating segments.
Service Centres have been identified by the entity as operating segments as they
engage in business activities from which they earn revenue and incur expenses.
In addition, their operating results are regularly reviewed by the group`s chief
operating decision makers in order to asses the segment`s performance and to
allocate resources.
The group`s reportable segments are:
The COCT Service Centre; and
- Other (which consists of all other Municipal Service Centres).
BASIS OF PREPARATION OF THE REVIEWED RESULTS
Statement of Compliance
The accounting policies applied in the preparation of these reviewed condensed
financial statements, which are based on reasonable judgments and estimates, are
in accordance with International Financial Reporting Standards and are
consistent with those applied in the annual financial statements for the year
ended 29 February 2008. These reviewed condensed financial statements as set out
in this report have been prepared in terms of IAS 34 - Interim Financial
Reporting, the Companies Act, 1973 (Act 61 of 1973), as amended, and the
Listings Requirements of JSE Limited.
Basis of Measurement
These reviewed condensed financial statements have been prepared on the
historical cost basis, except for certain financial instruments that have been
measured at fair value.
The accounting policies are consistent with those used in the annual financial
statements for the year ended 29 February 2008 except for the early adoption of
IFRS 8.
Subsequent Events
The group`s bid to continue to provide traffic contravention systems and
services to the COCT was unsuccessful due to pricing. However, the existing
contract is in the process of being extended for an 18-month period commencing
on 1 July 2009 in order for TCS to finalise all offences that will be in the
current system up to and including 30 June 2009. TCS plans to mitigate the loss
of the COCT contract by obtaining new tenders from other municipalities and
focusing on new prospects.
A summons was issued against TCS by Labat Africa Limited ("Labat") in respect of
dividends outstanding. A full and final settlement was reached subsequent to
year end. The full amount of the settlement had been provided for as a liability
in 2009.
A settlement agreement was reached between TCS and a former consultant
subsequent to year end in terms of which TCS agreed to settle with the former
consultant. The full amount of the settlement had been provided for as a
liability in 2009.
Shareholders are referred to the cautionary announcement released on SENS on 27
May 2009 and are advised that PricewaterhouseCoopers Forensics Services has been
appointed to investigate an irregular transaction in respect of the bank account
of Total Computer Services (Proprietary) Limited, a subsidiary of TCS, amounting
to approximately R4.3 million. Once the forensic report is finalised the
findings will be made available to the board of directors and to all
shareholders.
Changes in Contingent Liability
During the previous financial year a claim was instituted against TCS by a
former consultant for an amount of R14 779 860. This claim was disclosed as a
contingent liability in the annual report of the previous corresponding period,
During the current financial year this claim was settled by for an amount of R4
million.
Reviewed Results
The auditors, PricewaterhouseCoopers Inc, have reviewed these results and their
unmodified review opinion is available for inspection at the company`s
registered office.
By order of the board
Shaheed Mohamed Ina Jonker
Chief Executive Officer Financial Director
4 June 2009
Directors
L Sipoyo*, (Chairman), AS Mohamed (Chief Executive Officer), FE Jonker
(Financial Director), JH Taljaard (Chief Operating Officer), E Page, V Zitumane*
(*Non-executive)
Registered office:
20 Regency Drive, Route 21 Corporate Park, Irene, Pretoria, 0153
(PO Box 853, Wingate Park, 0157)
Company Secretary:
Probity Business Services (Proprietary) Limited
Third Floor, JHI House, 11 Cradock Avenue
Rosebank, 2196
Auditors:
PricewaterhouseCoopers Inc. Chartered Accountants (SA)
2 Eglin Road, Sunninghill, 2157
(Private Bag X36, Sunninghill, 2157)
Designated Adviser:
Merchantec (Proprietary) Limited
Transfer secretaries:
Computershare Investor Services (Proprietary) Limited
70 Marshall Street, Johannesburg, 2001
(PO Box 61763, Marshalltown, 2107)
Company website:
www.tcsonline.co.za
Date: 04/06/2009 14:08:51 Produced by the JSE SENS Department.
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